Part I — Financial Information [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) For the three months ended March 31, 2024, Nutex Health Inc. reported total revenues of $67.5 million, a 19.8% increase year-over-year, driven primarily by its Hospital division. The company shifted from an operating loss of $4.4 million in Q1 2023 to an operating income of $1.4 million in Q1 2024. Net loss attributable to the company significantly decreased to $0.4 million from $5.1 million in the prior-year period. Total assets grew to $404.3 million, and cash and cash equivalents increased to $30.0 million, supported by $9.2 million in net proceeds from a common stock issuance [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects an increase in total assets to **$404.3 million**, driven by higher cash, and the recognition of a **$5.1 million** warrant liability Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2024 ($) | December 31, 2023 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 30,006,419 | 22,002,056 | | Total current assets | 100,358,343 | 90,848,403 | | Total assets | 404,283,854 | 398,245,497 | | **Liabilities & Equity** | | | | Total current liabilities | 59,888,184 | 58,313,052 | | Total liabilities | 324,271,704 | 319,139,391 | | Total equity | 80,012,150 | 79,106,106 | | Total liabilities and equity | 404,283,854 | 398,245,497 | - Total assets increased to **$404.3 million** as of March 31, 2024, from **$398.2 million** at year-end 2023, primarily due to an increase in cash and cash equivalents[12](index=12&type=chunk) - A new warrant liability of **$5.1 million** was recorded on the balance sheet as of March 31, 2024, which was not present at the end of 2023[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Operations show **19.8%** revenue growth to **$67.5 million**, a shift to **$1.4 million** operating income, and a reduced net loss of **$0.4 million**, aided by a warrant liability gain Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended Mar 31, 2024 ($) | Three Months Ended Mar 31, 2023 ($) | | :--- | :--- | :--- | | Total revenue | 67,453,787 | 56,329,417 | | Gross profit | 10,157,178 | 4,847,723 | | Operating income (loss) | 1,449,601 | (4,445,087) | | Net loss | (542,487) | (6,921,972) | | Net loss attributable to Nutex Health Inc. | (364,075) | (5,147,279) | | Basic and Diluted Loss per share | (0.01) | (0.12) | - Total revenue increased by **19.8%** year-over-year, from **$56.3 million** in Q1 2023 to **$67.5 million** in Q1 2024, primarily driven by a **21.8%** increase in the Hospital division's revenue[15](index=15&type=chunk) - The company reported a significant improvement in profitability, with operating income of **$1.4 million** in Q1 2024 compared to an operating loss of **$4.4 million** in Q1 2023. Net loss attributable to the company narrowed to **$0.4 million** from **$5.1 million**[15](index=15&type=chunk) - A gain on warrant liability of **$2.6 million** was recognized in Q1 2024, contributing to the reduced net loss[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations improved to **$3.1 million**, with financing activities providing **$5.7 million** primarily from stock issuance, while investing activities significantly decreased cash usage Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three Months Ended Mar 31, 2024 ($) | Three Months Ended Mar 31, 2023 ($) | | :--- | :--- | :--- | | Net cash from operating activities | 3,050,859 | 1,052,013 | | Net cash from investing activities | (733,323) | (5,416,140) | | Net cash from financing activities | 5,686,827 | 2,945,398 | | **Net change in cash and cash equivalents** | **8,004,363** | **(1,418,729)** | | Cash and cash equivalents - end of period | 30,006,419 | 32,836,535 | - Cash from operating activities improved to **$3.1 million** in Q1 2024 from **$1.1 million** in Q1 2023[21](index=21&type=chunk) - Financing activities provided **$5.7 million** in cash, primarily from **$9.2 million** in proceeds from a common stock issuance, offset by repayments of debt and finance leases[21](index=21&type=chunk) - Investing activities used significantly less cash (**$0.7 million**) compared to the prior year (**$5.4 million**), mainly due to lower acquisitions of property and equipment[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's divisional structure, the **1-for-15** reverse stock split, and the **$9.2 million** capital raise in January 2024, which led to a **$7.7 million** warrant liability - The company operates through two main divisions: a hospital division with 21 facilities and a population health management division. It consolidates several Variable Interest Entities (VIEs), including Physician LLCs and Real Estate Entities[24](index=24&type=chunk)[37](index=37&type=chunk) - On April 9, 2024, the company effected a **1-for-15** reverse stock split to regain compliance with Nasdaq's minimum bid price requirement. All share and per-share amounts in the financial statements have been retroactively adjusted[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - In January 2024, the company raised **$9.2 million** in gross proceeds through a securities purchase agreement, issuing **4.4 million** shares of common stock and warrants to purchase an equal number of shares. This resulted in the recognition of a **$7.7 million** warrant liability[93](index=93&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the improved performance in Q1 2024 to a 21.1% increase in patient visits, driven by the opening of four new facilities in 2023, and higher revenue per visit. The Hospital division's revenue grew 21.7% to $60.0 million, with operating income more than doubling to $10.5 million. The company is actively managing the financial impact of the No Surprises Act through various strategies, including maximizing coding efficiency and pursuing the Independent Dispute Resolution (IDR) process. Cash and equivalents increased to $30.0 million, bolstered by a $9.2 million stock issuance, which management believes is sufficient to fund operations and growth for the next twelve months. Adjusted EBITDA for the quarter rose to $4.6 million from $2.4 million in the prior-year period [Overview of Legislative Developments](index=29&type=section&id=Overview%20of%20Legislative%20Developments) Legislative developments, particularly the No Surprises Act, have reduced reimbursement rates by **30%**, prompting the company to implement mitigation strategies, with recent court rulings offering potential improvements - The No Surprises Act (NSA), effective January 1, 2022, aims to protect patients from surprise medical bills for out-of-network emergency services. This has significantly impacted the company's reimbursement rates[140](index=140&type=chunk) - Following the NSA's implementation, the company's average payment from insurers for emergency services declined by approximately **30%** by the end of 2022. While there was a slight improvement in 2023, the process requires extensive administrative effort through the Independent Dispute Resolution (IDR) process[148](index=148&type=chunk) - The company has implemented several strategies to mitigate the NSA's impact, including maximizing claims coding, increasing collection efforts, dedicating a team to the IDR process, and focusing on the less-affected value-based IPA business[151](index=151&type=chunk) - Recent court rulings, such as TMA III, have been favorable to providers by vacating regulations that unfairly favored the insurer's Qualifying Payment Amount (QPA), potentially improving future reimbursement rates[147](index=147&type=chunk)[154](index=154&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Operating results show a **19.8%** revenue increase to **$67.5 million**, a **92.9%** reduction in net loss to **$0.4 million**, and an **87.1%** rise in Adjusted EBITDA to **$4.6 million** Financial Performance Summary | Metric | Q1 2024 ($) | Q1 2023 ($) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 67,453,787 | 56,329,417 | +19.8% | | Hospital Division Revenue | 60,029,369 | 49,288,164 | +21.7% | | Population Health Mgt. Revenue | 7,424,418 | 7,041,253 | +5.4% | | Total Segment Operating Income | 10,157,178 | 4,847,723 | +109.5% | | Net Loss Attributable to Nutex | (364,075) | (5,147,279) | -92.9% | | Adjusted EBITDA | 4,560,401 | 2,437,854 | +87.1% | - The decrease in net loss was primarily driven by higher revenue from a **21.1%** increase in patient visits, largely due to four new facilities opened in 2023, and an increase in revenue per visit[164](index=164&type=chunk)[167](index=167&type=chunk) - The Hospital division's operating income increased by **119%** to **$10.5 million** in Q1 2024 from **$4.8 million** in Q1 2023[169](index=169&type=chunk) - The company recorded **$0.7 million** of net revenue from cash collections for previously provided services that had been reserved as uncollectible[168](index=168&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash and equivalents increased to **$30.0 million**, supported by **$3.0 million** from operations and **$9.2 million** from stock issuance, which management deems sufficient for future needs - As of March 31, 2024, the company had **$30.0 million** in cash and cash equivalents, an increase from **$22.0 million** at December 31, 2023[181](index=181&type=chunk) - Key sources of cash during Q1 2024 were **$3.0 million** from operating activities and **$9.2 million** net proceeds from a common stock issuance[184](index=184&type=chunk) - Key uses of cash included **$2.1 million** in net debt repayments, **$0.7 million** for capital expenditures, and **$1.0 million** for finance lease repayments[184](index=184&type=chunk) - Management believes existing cash and available borrowing capacity will be sufficient to meet anticipated cash needs for operations and growth for at least the next twelve months[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material changes in its primary market risk exposures or the management of those exposures during the three months ended March 31, 2024, compared to the disclosures in its 2023 Form 10-K - There have been no material changes in the company's primary market risk exposures or how those exposures are managed since the 2023 Form 10-K[192](index=192&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2024, management concluded that the company's disclosure controls and procedures were not effective. This conclusion is based on previously identified material weaknesses in internal control over financial reporting, including ineffective IT access and change management controls, inadequate business process controls, and lack of controls over key spreadsheets. The company is actively undertaking remediation efforts, such as implementing a new enterprise-wide system and engaging an external accounting firm, but these efforts are ongoing and have not yet been fully validated - Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to previously identified material weaknesses[193](index=193&type=chunk) - Material weaknesses identified include ineffective controls over IT logical access and program changes, inadequate segregation of duties in business processes, and poor controls over the accuracy of key spreadsheets[196](index=196&type=chunk) - Remediation plans are in progress, including implementing a new enterprise-wide system, engaging an accounting firm for assistance, and hiring key senior management positions. These efforts are ongoing and require further validation[195](index=195&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) Part II — Other Information [Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that it believes would have a material effect on its business or financial condition - The company reports that it is not involved in any legal proceedings expected to have a material effect on its business or financial condition[201](index=201&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The primary risk highlighted is the company's potential inability to maintain compliance with the Nasdaq Capital Market's continued listing requirements, specifically the $1.00 minimum bid price rule. Despite effecting a 1-for-15 reverse stock split in April 2024, the company had not regained compliance as of the report date. Failure to regain compliance by the May 20, 2024 deadline could result in a delisting notice, which would have significant adverse consequences, including reduced liquidity and limited market quotations for its securities - A significant risk is the potential failure to maintain compliance with Nasdaq's minimum bid price requirement of **$1.00** per share[203](index=203&type=chunk) - The company received a notice from Nasdaq in May 2023 and was granted an extension until May 20, 2024, to regain compliance[203](index=203&type=chunk)[204](index=204&type=chunk) - Despite a **1-for-15** reverse stock split on April 10, 2024, the company had not regained compliance as of the filing date. Failure to do so by the deadline will result in a delisting notice, which the company intends to appeal[204](index=204&type=chunk)[205](index=205&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On March 26, 2024, the company amended the terms of its previously issued Unsecured Convertible Term Notes and related warrants. The conversion and exercise prices were reduced to $3.00 per share. This modification resulted in the notes being convertible into a total of 1,795,000 shares and the related warrants becoming exercisable for a total of 1,436,000 shares. These securities were issued in a private placement - On March 26, 2024, the company amended the conversion price of its Unsecured Convertible Term Notes and the exercise price of related warrants to **$3.00** per share[206](index=206&type=chunk) - This amendment increased the number of shares issuable upon conversion of the notes to **1.8 million** and upon exercise of the warrants to **1.4 million** (**0.9 million** for investors and **0.5 million** for the placement agent)[206](index=206&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, which include certifications from the CEO and CFO as required by the Sarbanes-Oxley Act (Sections 302 and 906), and XBRL interactive data files - The exhibits filed with this report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[210](index=210&type=chunk) - Interactive Data Files (XBRL documents) are also included as exhibits[210](index=210&type=chunk)

HOUSTON, May 7, 2024 /PRNewswire/ -- Nutex Health Inc. ("Nutex Health" or the "Company") (NASDAQ: NUTX), a physician-led, technology-enabled integrated healthcare delivery system comprised of 21 state-of-the-art micro hospitals in 9 states and primary care-centric, risk-bearing physician networks, today announced that it will release financial results for the first quarter ended March 31, 2024 after the close of the stock market on Wednesday, May 8, 2024. The Company will discuss those results on a conferen ...

HOUSTON, May 6, 2024 /PRNewswire/ -- Nutex Health Inc. ("Nutex Health" or the "Company") (NASDAQ: NUTX), a physician-led, technology-enabled integrated healthcare delivery system comprised of 21 state-of-the-art micro hospitals in 9 states and primary care-centric, risk-bearing physician networks, today announced the availability of its definitive proxy materials for its 2024 Annual Meeting to be held on June 17, 2024 at 10:00 am Central Daylight Time via the internet as a virtual meeting only (and not in p ...

HOUSTON, April 29, 2024 /PRNewswire/ -- Nutex Health Inc. ("Nutex Health" or the "Company") (NASDAQ: NUTX), a physician-led, technology-enabled integrated healthcare delivery system comprised of 21 state-of-the-art micro hospitals in 9 states and primary care-centric, risk-bearing physician networks, today announced its second annual private leadership conference from April 30 to May 2 in Houston, Texas.    The conference serves as an opportunity for Nutex Health leaders from across the country to gather, s ...

For the transition period from _________ to ___________ Commission file number 001-41346 NUTEX HEALTH INC. Delaware 11-3363609 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 6030 S. Rice Ave, Suite C, Houston, Texas 77081 Telephone Number (713) 660-0557 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal yea ...

Financial Performance - Total revenue for the year ended December 31, 2023, was $247.6 million, an increase of 13% compared to $219.3 million in 2022[6] - Total revenue for the fourth quarter of 2023 was $69.7 million, representing a 30% increase from $53.7 million in the same period of 2022[6] - Net loss attributable to Nutex Health Inc. for the year ended December 31, 2023, was $45.8 million, significantly improved from a net loss of $424.8 million in 2022[6] - The company reported a net loss attributable to Nutex Health Inc. of $31.6 million for the fourth quarter of 2023, compared to a net loss of $14.8 million in the fourth quarter of 2022[6] - Net income for 2023 was a loss of $43,423,715, compared to a loss of $432,739,618 in 2022, indicating a significant improvement[13] Operating Income and Expenses - Hospital division operating income increased by 142% to $36.3 million for the year ended December 31, 2023, compared to $15.0 million in 2022[6] - Adjusted EBITDA for the year ended December 31, 2023, was $10.8 million, down from $12.6 million in 2022[6] - Adjusted EBITDA for 2023 was $10,827,681, a decrease from $12,547,923 in 2022, reflecting ongoing operational challenges[16] - Cash flows from operating activities generated $1,256,452 in 2023, a substantial decline from $50,607,108 in 2022[13] - Net cash from operating activities for the year ended December 31, 2023, was $1.3 million[6] Assets and Cash Position - As of December 31, 2023, total assets were $398.2 million, down from $431.8 million in 2022[6] - Total cash and cash equivalents at the end of 2023 were $22,002,056, down from $34,255,264 at the end of 2022[13] - Net cash from investing activities was a negative $11,239,882 in 2023, compared to a negative $4,337,398 in 2022, indicating increased investment outflows[13] Strategic Initiatives - The management team initiated a strategic plan in January 2024 aimed at reducing annual cash operating expenses and optimizing resource allocation[6] - The company aims to deliver profitability on a net income basis to its investors in the medium and long term[7] - The company anticipates challenges in executing its growth strategy due to economic conditions and regulatory changes[20] Divisional Highlights - The Hospital Division operates 20 facilities across 8 states, focusing on innovative healthcare models[17] - The Population Health Management division utilizes a cloud-based technology platform to enhance patient care efficiency[18] Impairments and Financing - The company reported an impairment of assets totaling $29,082,203 in 2023, compared to no impairments in 2022[16] - Proceeds from notes payable in 2023 amounted to $16,952,905, a significant increase from $815,881 in 2022[13]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 of incorporation or organization) Identification No.) or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41346 NUTEX HEALTH INC. (Exact name of registrant a ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41346 NUTEX HEALTH INC. (Exact name of registrant as specified in its charter) Delaware 11-3363609 (State or o ...

[Introductory Note](index=3&type=section&id=INTRODUCTORY%20NOTE) Provides preliminary information and context for the financial report [Note About Forward-Looking Statements](index=3&type=section&id=NOTE%20ABOUT%20FORWARD-LOOKING%20STATEMENTS) Highlights the inherent uncertainties and risks associated with forward-looking statements in the report [Part I — Financial Information](index=4&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) Presents the company's unaudited condensed consolidated financial statements and management's analysis for the reporting period [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Nutex Health Inc.'s unaudited condensed consolidated financial statements and comprehensive notes for Q1 2023 [Condensed Consolidated Balance Sheets](index=4&type=section&id=NUTEX%20HEALTH%20INC.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS%20(UNAUDITED)) Details the company's financial position, including assets, liabilities, and equity, as of March 31, 2023, and December 31, 2022 Balance Sheet Summary | Metric | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Total Assets | $430,096,330 | $431,751,985 | | Total Liabilities | $320,558,176 | $311,424,585 | | Total Equity | $109,538,154 | $120,327,400 | | Cash and Cash Equivalents | $32,836,535 | $34,255,264 | | Accounts Receivable | $50,977,291 | $57,777,386 | | Total Current Assets | $88,667,107 | $97,973,924 | | Total Current Liabilities | $47,878,789 | $54,862,969 | - Total assets decreased by **$1.66 million**, while total liabilities increased by **$9.13 million**, leading to a **$10.79 million decrease in total equity** from December 31, 2022, to March 31, 2023[14](index=14&type=chunk) - Current assets saw a decrease of **$9.31 million**, primarily driven by reductions in cash and cash equivalents (**$1.42 million**) and accounts receivable (**$6.80 million**)[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=NUTEX%20HEALTH%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20(UNAUDITED)) Presents the company's revenues, expenses, and net income or loss for the three months ended March 31, 2023 and 2022 Operations Summary | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (YoY) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Total Revenue | $56,329,417 | $79,127,242 | -28.8% | | Hospital division revenue | $49,288,164 | $79,127,242 | -37.7% | | Population health management division revenue | $7,041,253 | $- | N/A | | Total Operating Costs and Expenses | $51,481,694 | $43,311,746 | +18.8% | | Gross Profit | $4,847,723 | $35,815,496 | -86.5% | | Operating Income (Loss) | $(4,445,087) | $29,238,973 | N/A (Loss vs Income) | | Net Income (Loss) | $(6,921,972) | $24,826,131 | N/A (Loss vs Income) | | Net Income (Loss) Attributable to Nutex Health Inc. | $(5,147,279) | $21,442,843 | N/A (Loss vs Income) | | Basic EPS | $(0.01) | $0.04 | N/A (Loss vs Income) | | Diluted EPS | $(0.01) | $0.04 | N/A (Loss vs Income) | - Total revenue decreased by **28.8%** year-over-year, primarily due to a **37.7% decline in the Hospital division's revenue**, while the Population Health Management division generated **$7.0 million in revenue** in Q1 2023, having no revenue in the prior year[17](index=17&type=chunk) - The company shifted from a net income of **$24.8 million** in Q1 2022 to a net loss of **$6.9 million** in Q1 2023, resulting in a basic and diluted loss per share of **$(0.01)** compared to **$0.04 earnings per share** in the prior year[17](index=17&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=6&type=section&id=NUTEX%20HEALTH%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY%20(UNAUDITED)) Outlines changes in the company's equity components, including common stock, additional paid-in capital, and accumulated deficit, for Q1 2023 Equity Changes Summary | Metric | Balance at Jan 1, 2023 | Balance at Mar 31, 2023 | Change | | :------------------------------------ | :--------------------- | :---------------------- | :----- | | Common Stock (Amount) | $650,224 | $651,926 | +$1,702 | | Additional Paid-in Capital | $458,498,402 | $460,396,700 | +$1,898,298 | | Accumulated Deficit | $(363,285,925) | $(368,433,204) | -$5,147,279 | | Nutex Health Inc. Equity | $95,862,701 | $92,615,422 | -$3,247,279 | | Noncontrolling Interests | $24,464,699 | $16,922,732 | -$7,541,967 | | Total Equity | $120,327,400 | $109,538,154 | -$10,789,246 | - Total equity decreased by **$10.79 million** from January 1, 2023, to March 31, 2023, primarily due to a net loss of **$5.15 million** attributable to Nutex Health Inc. and a **$7.54 million decrease in noncontrolling interests**[19](index=19&type=chunk) - Additional paid-in capital increased by **$1.90 million**, reflecting the issuance of **1,000,000 common shares** to Apollo Medical Holdings, Inc[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=NUTEX%20HEALTH%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(UNAUDITED)) Reports the cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023 and 2022 Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net Cash from Operating Activities | $1,052,013 | $35,741,422 | | Net Cash from Investing Activities | $(5,416,140) | $(8,591,823) | | Net Cash from Financing Activities | $2,945,398 | $(27,709,393) | | Net Change in Cash and Cash Equivalents | $(1,418,729) | $(559,794) | | Cash and Cash Equivalents - End of Period | $32,836,535 | $35,558,490 | - Net cash from operating activities significantly decreased from **$35.7 million** in Q1 2022 to **$1.1 million** in Q1 2023, primarily driven by the shift from net income to net loss[21](index=21&type=chunk) - Net cash from financing activities shifted from an outflow of **$27.7 million** in Q1 2022 to an inflow of **$2.9 million** in Q1 2023, largely due to proceeds from notes payable and lines of credit[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=NUTEX%20HEALTH%20INC.%20NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) Provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1 – Organization and Operations](index=8&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Operations) Describes the company's business, operational structure, and the impact of the Clinigence merger - Nutex Health Inc. is a physician-led healthcare services and operations company with **19 hospital facilities in eight states** and a primary care-centric population health management division[23](index=23&type=chunk) - The company employs approximately **1,200 full-time employees** and partners with over **900 physicians**[24](index=24&type=chunk) - The merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc. was completed on **April 1, 2022**, with Clinigence subsequently renamed Nutex Health Inc. and Nutex Health Holdco LLC treated as the accounting acquirer[25](index=25&type=chunk)[28](index=28&type=chunk) [Note 2 - Summary of Significant Accounting Policies](index=8&type=section&id=Note%202%20-%20Summary%20of%20Significant%20Accounting%20Policies) Outlines the key accounting principles and methods used in preparing the financial statements - The financial statements consolidate majority-owned subsidiaries and Variable Interest Entities (VIEs), including Physician LLCs and certain Real Estate Entities, for which the company is the primary beneficiary[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Since the second quarter of 2022, **18 Real Estate Entities have been deconsolidated** after third-party lenders released the company's guarantees of associated mortgage loans[32](index=32&type=chunk) - The company operates three reportable segments: the hospital division, the population health management division, and the real estate division[44](index=44&type=chunk) [Note 3 - Merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc.](index=10&type=section&id=Note%203%20-%20Merger%20of%20Nutex%20Health%20Holdco%20LLC%20and%20Clinigence%20Holdings%2C%20Inc.) Details the accounting treatment and financial impact of the reverse business combination completed on April 1, 2022 Merger Consideration Summary | Metric | Amount | | :------------------------------------------ | :------------- | | Fair value of Clinigence common shares | $326,151,098 | | Fair value of Clinigence outstanding common stock options and warrants | $110,543,915 | | Total consideration | $436,695,013 | - The merger of Nutex Health Holdco LLC and Clinigence, completed on **April 1, 2022**, was accounted for as a reverse business combination with Nutex Health Holdco LLC as the accounting acquirer[46](index=46&type=chunk) - A non-cash impairment charge of **$398.1 million** was recognized in 2022 to reduce the carrying amount of goodwill arising from the reverse business combination[50](index=50&type=chunk) [Note 4 – Revenue](index=12&type=section&id=Note%204%20%E2%80%93%20Revenue) Provides a disaggregation of revenue by division and payor type for the reporting periods Revenue Disaggregation | Revenue Source | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Hospital Division | $49,288,164 | $79,127,242 | | Population Health Management Division | $7,041,253 | $- | | Total Revenue | $56,329,417 | $79,127,242 | - Hospital Division revenue decreased by **37.7%** year-over-year, while the Population Health Management Division generated **$7.0 million in revenue** in Q1 2023, having no revenue in the prior year due to the merger timing[56](index=56&type=chunk) - Over **90% of net patient service revenue** is paid by insurers, federal agencies, and other non-patient third parties, with **93% from insurance** in Q1 2023 (down from 96% in Q1 2022)[56](index=56&type=chunk)[57](index=57&type=chunk) [Note 5 - Property and Equipment](index=13&type=section&id=Note%205%20-%20Property%20and%20Equipment) Details the carrying amounts and changes in property and equipment, net, including depreciation and deconsolidations Property and Equipment, Net | Metric | March 31, 2023 | December 31, 2022 | | :-------------------------------- | :------------- | :---------------- | | Total Property and Equipment, Net | $77,116,496 | $82,094,352 | | Construction in progress | $13,560,583 | $19,389,329 | - Total property and equipment, net, decreased by **$4.98 million**, partly due to the deconsolidation of one Real Estate Entity in Q1 2023, following 17 deconsolidations in Q2 2022[58](index=58&type=chunk) - Depreciation and amortization of property and equipment for the three months ended March 31, 2023, totaled **$1,123,053**, a decrease from **$1,469,198** in the same period of 2022[59](index=59&type=chunk) [Note 6 – Intangible Assets](index=13&type=section&id=Note%206%20%E2%80%93%20Intangible%20Assets) Presents the net carrying amounts and amortization of various intangible assets, including member relationships and contracts Intangible Assets Carrying Amounts | Intangible Asset | Net Carrying Amount (Mar 31, 2023) | Net Carrying Amount (Dec 31, 2022) | Weighted Average Useful Life (Years) | | :----------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Member relationships | $15,772,401 | $16,054,050 | 15 | | Management contracts | $1,894,687 | $1,926,266 | 16 | | Customer contracts | $853,067 | $868,300 | 15 | | Trademarks | $1,274,967 | $1,312,475 | 7-12 | | PHP technology | $327,200 | $347,650 | 5 | | Indefinite life intangible - license | $682,649 | $682,649 | - | | Total | $20,804,971 | $21,191,390 | | - Total net carrying amount of intangible assets decreased slightly from **$21.19 million** to **$20.80 million**[60](index=60&type=chunk) - Amortization of intangible assets for the three months ended March 31, 2023, totaled **$386,419**, compared to **$0** in the prior year, reflecting the impact of the Clinigence merger[61](index=61&type=chunk) [Note 7 – Accrued Expenses and Other Current Liabilities](index=14&type=section&id=Note%207%20%E2%80%93%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Breaks down the components of accrued expenses and other current liabilities, highlighting changes between periods Accrued Expenses Summary | Accrued Item | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------- | :---------------- | | Accrued wages and benefits | $5,901,561 | $4,235,167 | | Accrued taxes | $3,461,054 | $1,029,790 | | Accrued other | $799,551 | $975,856 | | Total Accrued Expenses and Other Current Liabilities | $10,162,166 | $6,240,813 | - Total accrued expenses and other current liabilities increased by **$3.92 million**, primarily driven by increases in accrued wages and benefits (**$1.67 million**) and accrued taxes (**$2.43 million**)[62](index=62&type=chunk) [Note 8 – Debt](index=14&type=section&id=Note%208%20%E2%80%93%20Debt) Provides details on the company's outstanding debt, including term loans and lines of credit, and compliance status Outstanding Debt Summary | Debt Type | March 31, 2023 | December 31, 2022 | | :------------------------------------ | :------------- | :---------------- | | Term loans secured by all assets | $10,965,545 | $11,341,934 | | Term loans secured by property and equipment | $10,815,089 | $9,299,197 | | Line of credit secured by all assets | $2,672,894 | $2,623,479 | | Term loans of consolidated Real Estate Entities | $13,886,997 | $15,068,920 | | Total Outstanding Debt | $38,340,525 | $38,333,530 | | Total Long-Term Debt | $25,108,364 | $23,051,152 | - Total outstanding debt remained relatively stable at **$38.34 million**, while long-term debt increased by **$2.06 million**[63](index=63&type=chunk) - As of March 31, 2023, the company was not in compliance with the debt service coverage ratio for one term loan with an outstanding balance of **$1.0 million**, which has been included in current liabilities[64](index=64&type=chunk) [Note 9 – Leases](index=15&type=section&id=Note%209%20%E2%80%93%20Leases) Reports lease costs for operating and finance leases, reflecting the impact of new lease arrangements Lease Costs Summary | Lease Cost Type | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Operating lease cost | $948,515 | $692,669 | | Total Finance lease cost | $5,172,795 | $1,908,283 | - Total finance lease costs significantly increased from **$1.91 million** in Q1 2022 to **$5.17 million** in Q1 2023, reflecting higher amortization of right-of-use assets and interest on lease liabilities[67](index=67&type=chunk) [Note 10 – Commitments and Contingencies](index=15&type=section&id=Note%2010%20%E2%80%93%20Commitments%20and%20Contingencies) Addresses the company's involvement in legal actions and other commitments, assessing their potential financial impact - The company is involved in various claims and legal actions in the normal course of business, but the outcome is not expected to have a material adverse effect on the consolidated financial statements[68](index=68&type=chunk) [Note 11 – Stock-based Compensation](index=15&type=section&id=Note%2011%20%E2%80%93%20Stock-based%20Compensation) Details the company's equity incentive plan, stock option activity, and eligibility for additional common stock issuances - The 2022 Equity Incentive Plan authorizes up to **5,000,000 shares**, with **2,416,221 shares available for issuance** as of March 31, 2023[69](index=69&type=chunk) - Contributing owners of under-construction and ramping hospitals are eligible for additional common stock issuances based on future EBITDA performance, with the number of shares determined by the greater of the stock price at determination or **$2.80**[70](index=70&type=chunk)[71](index=71&type=chunk) Stock Options Outstanding | Metric | Options Outstanding (Dec 31, 2022) | Options Outstanding (Mar 31, 2023) | Weighted Average Exercise Price (Mar 31, 2023) | Weighted Average Remaining Contractual Life (Years) | | :------------------------------------ | :--------------------------------- | :--------------------------------- | :--------------------------------------------- | :-------------------------------------------------- | | Total Options Outstanding | 5,147,770 | 5,147,770 | $2.32 | 7.35 | [Note 12 – Equity](index=16&type=section&id=Note%2012%20%E2%80%93%20Equity) Outlines authorized common stock, recent issuances, and warrant activity, impacting the company's equity structure - The company is authorized to issue up to **900,000,000 shares of common stock** with a par value of **$0.001 per share**[73](index=73&type=chunk) - In March 2023, **1,000,000 common shares** were issued to Apollo Medical Holdings, Inc. for IPA managerial services, resulting in **$1.9 million of stock-based compensation expense** recognized as an out-of-period adjustment[74](index=74&type=chunk)[76](index=76&type=chunk) Warrants Outstanding | Metric | Warrants Outstanding (Dec 31, 2022) | Warrants Outstanding (Mar 31, 2023) | Weighted Average Exercise Price (Mar 31, 2023) | Weighted Average Remaining Contractual Life (Years) | | :------------------------------------ | :---------------------------------- | :---------------------------------- | :--------------------------------------------- | :-------------------------------------------------- | | Total Warrants Outstanding | 11,033,015 | 10,225,062 | $1.99 | 3.53 | [Note 13 – Income Taxes](index=17&type=section&id=Note%2013%20%E2%80%93%20Income%20Taxes) Explains the effective tax rate and factors contributing to its difference from the federal statutory rate - The effective tax rate for the three months ended March 31, 2023, was **11.63%**, primarily differing from the federal statutory rate due to state taxes, noncontrolling interests in flow-through entities, and permanent differences for non-deductible expenses[79](index=79&type=chunk)[149](index=149&type=chunk) - Prior to the Clinigence merger, Nutex Health Holdco LLC and its subsidiaries were pass-through entities, with federal taxes being obligations of their members[78](index=78&type=chunk) [Note 14 – Earnings per Share](index=18&type=section&id=Note%2014%20%E2%80%93%20Earnings%20per%20Share) Presents basic and diluted earnings per share calculations, including the impact of anti-dilutive securities Earnings Per Share Calculation | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) attributable to common stockholders | $(5,147,279) | $21,442,843 | | Weighted average shares used to compute basic and diluted EPS | 650,915,693 | 592,791,712 | | Basic EPS | $(0.01) | $0.04 | | Diluted EPS | $(0.01) | $0.04 | - The company reported a basic and diluted loss per share of **$(0.01)** in Q1 2023, a significant decline from **$0.04 earnings per share** in Q1 2022[81](index=81&type=chunk) - The computation of diluted EPS for Q1 2023 excludes **5,147,770 common stock options** and **10,225,062 warrants** due to their anti-dilutive effect given the net loss[81](index=81&type=chunk) [Note 15 - Supplemental Cash Flows Information](index=18&type=section&id=Note%2015%20-%20Supplemental%20Cash%20Flows%20Information) Provides additional details on non-cash investing and financing activities and cash paid for interest Non-Cash Activities (Q1 2023) | Non-Cash Investing and Financing Activities (Q1 2023) | Amount | | :---------------------------------------------------- | :------------- | | Financed capital expenditures | $2,709,019 | | Acquisition of finance leases | $18,798,667 | | Termination of operating and finance leases | $2,818,498 | | Exercise of warrants on cashless basis | $702 | | Issuance of common stock to Apollo Medical Holdings, Inc. | $1,900,000 | | Deconsolidation of Real Estate Entity | $4,258,133 | - Cash paid for interest decreased from **$875,355** in Q1 2022 to **$430,643** in Q1 2023[82](index=82&type=chunk) [Note 16 – Segment Information](index=18&type=section&id=Note%2016%20%E2%80%93%20Segment%20Information) Reports financial performance by the company's three operating segments: hospital, population health, and real estate - The company operates three reportable segments: hospital division, population health management division, and real estate division, with performance evaluated based on operating income[83](index=83&type=chunk) Segment Performance Summary | Segment | Revenue (Q1 2023) | Revenue (Q1 2022) | Operating Income (Q1 2023) | Operating Income (Q1 2022) | | :------------------------------------ | :---------------- | :---------------- | :------------------------- | :------------------------- | | Hospital division | $49,288,164 | $79,127,242 | $4,778,637 | $35,815,496 | | Population health management division | $7,041,253 | $- | $69,086 | $- | | Total | $56,329,417 | $79,127,242 | $4,847,723 | $35,815,496 | - Hospital division revenue and operating income significantly declined by **37.7%** and **86.6%** respectively, while the population health management division generated new revenue and a small operating income in Q1 2023[85](index=85&type=chunk) [Note 17 – Related Party Transactions](index=19&type=section&id=Note%2017%20%E2%80%93%20Related%20Party%20Transactions) Details transactions and relationships with related parties, including consolidated VIEs and managerial fees - The company consolidates Physician LLCs and certain Real Estate Entities as VIEs, despite no direct ownership, due to financial support and control, with many owned/controlled by related parties including the CEO[86](index=86&type=chunk)[88](index=88&type=chunk) - Cash payments for related party lease obligations totaled **$3,519,345** in Q1 2023, up from **$2,883,681** in Q1 2022[87](index=87&type=chunk) - Managerial fees from related party emergency centers decreased from **$412,554** in Q1 2022 to **$158,851** in Q1 2023[89](index=89&type=chunk) [Note 18 – Variable Interest Entities](index=21&type=section&id=Note%2018%20%E2%80%93%20Variable%20Interest%20Entities) Explains the consolidation of Real Estate Entities and Physician LLCs as VIEs, including deconsolidation events - The company consolidates Real Estate Entities as VIEs when hospital entities guarantee their mortgage loans; **17 were deconsolidated in Q2 2022** and **one in Q1 2023** as guarantees were released[91](index=91&type=chunk)[92](index=92&type=chunk) - As of March 31, 2023, **two Real Estate Entities** continue to be consolidated in the financial statements[92](index=92&type=chunk) VIE Financial Summary | VIE Type | Total Assets (Mar 31, 2023) | Total Liabilities (Mar 31, 2023) | Equity (Mar 31, 2023) | | :---------------- | :-------------------------- | :--------------------------- | :-------------------- | | Real Estate Entities | $35,281,481 | $14,876,950 | $20,404,531 | | Physician LLCs | $6,291,763 | $5,400,568 | $891,195 | | AHISP IPA | $24,270,925 | $24,270,925 | $- | [Note 19 - Subsequent Events](index=22&type=section&id=Note%2019%20-%20Subsequent%20Events) Discloses significant events occurring after the balance sheet date, including a Pre-Paid Advance Agreement and RSU issuances - On April 11, 2023, the company entered into a Pre-Paid Advance Agreement (PPA) with Yorkville for up to **$100 million** over 18 months, receiving an initial **$15 million** (**$12.8 million net of expenses**)[95](index=95&type=chunk)[96](index=96&type=chunk) - Subsequent to March 31, 2023, Yorkville converted **$2,000,000 of principal balance** into **3,856,267 shares of common stock** under the PPA[97](index=97&type=chunk) - On April 1, 2023, **604,158 Restricted Stock Units (RSUs)** valued at **$610,210** were issued to employees, with a portion vesting immediately and the remainder vesting in March 2024 and March 2025[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on the company's financial performance, condition, and future outlook for Q1 2023 [Explanatory Note](index=23&type=section&id=Explanatory%20Note) Clarifies the accounting treatment of the Clinigence merger and its impact on historical financial reporting - The merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc. was completed on **April 1, 2022**, with Nutex Health Holdco LLC treated as the accounting acquirer[102](index=102&type=chunk) - Financial statements for periods prior to the merger date are those of Nutex Health Holdco, LLC, while subsequent periods are presented on a consolidated basis including Clinigence[102](index=102&type=chunk) [Overview](index=23&type=section&id=Overview) Summarizes the company's business model, operational scope, and consolidation practices for Variable Interest Entities - Nutex Health Inc. operates **19 hospital facilities in eight states** (hospital division) and a primary care-centric population health management division[104](index=104&type=chunk) - The company consolidates Variable Interest Entities (VIEs), including Physician LLCs and certain Real Estate Entities, for which it is the primary beneficiary, despite having no direct ownership interest[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - Since Q2 2022, **18 Real Estate Entities have been deconsolidated** due to the release of the company's guarantees on their mortgage loans[107](index=107&type=chunk) [Sources of Revenue](index=24&type=section&id=Sources%20of%20Revenue) Identifies the primary revenue streams from the hospital and population health management divisions, including payor mix - Hospital division revenue primarily comes from net patient services, with over **90% paid by insurers, federal agencies, and other third parties**[111](index=111&type=chunk)[112](index=112&type=chunk) Patient Classification by Payor | Patient Classification | Q1 2023 | Q1 2022 | | :--------------------- | :------ | :------ | | Insurance | 93% | 96% | | Self pay | 4% | 3% | | Workers compensation | 1% | 1% | | Medicare/Medicaid | 2% | 0% | - Population health management division revenue is derived from capitation and management fees for IPAs and physician groups, and SaaS revenue from its cloud-based proprietary technology[112](index=112&type=chunk) [Our Growth Plans](index=24&type=section&id=Our%20Growth%20Plans) Outlines strategies for business expansion through new hospital development, IPA formation, and acquisitions - The company plans to expand operations by entering new market areas either through development of new hospitals, formation of new IPAs, or by making acquisitions[113](index=113&type=chunk) - New hospital development involves a turn-key process for location selection, real estate acquisition, design, and development of the facility, including staffing, training, and operations, supported by existing centralized services[114](index=114&type=chunk) [Overview of Legislative Developments](index=24&type=section&id=Overview%20of%20Legislative%20Developments) Discusses the impact of the Affordable Care Act and the expiration of CARES Act provisions on healthcare operations - The Affordable Care Act has impacted healthcare services coverage, delivery, and reimbursement, with ongoing uncertainty regarding its implementation and interpretation[115](index=115&type=chunk)[116](index=116&type=chunk) - The CARES Act, which waived insurance copayments and deductibles for COVID-19 tests and visits, expired on **June 30, 2021**, leading to higher revenue during its effectiveness due to a shift in payor mix and increased patient acuity[117](index=117&type=chunk)[118](index=118&type=chunk) [No Surprises Act](index=25&type=section&id=No%20Surprises%20Act) Explains the implications of the No Surprises Act on out-of-network billing and the Independent Dispute Resolution process - The No Surprises Act (NSA), effective **January 1, 2022**, protects consumers from surprise balance billing for out-of-network emergency services and mandates insurers to reimburse providers at a statutorily calculated 'out-of-network rate'[119](index=119&type=chunk) - Since the NSA's implementation, the company's average payment by insurers for emergency services has declined by approximately **30%**, requiring more appeals through the Independent Dispute Resolution (IDR) process[125](index=125&type=chunk) - New CMS guidance (effective **Feb 6, 2023**) for the IDR process requires arbiters to consider all submitted evidence, not just the Qualified Payment Amount (QPA), aiming to balance the arbitration process[126](index=126&type=chunk)[127](index=127&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Analyzes the company's financial performance for Q1 2023 compared to Q1 2022, highlighting key drivers of change Operations Summary | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (YoY) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Total Revenue | $56,329,417 | $79,127,242 | -28.8% | | Total Segment Operating Income | $4,847,723 | $35,815,496 | -86.5% | | Net Income (Loss) Attributable to Nutex Health Inc. | $(5,147,279) | $21,442,843 | N/A (Loss vs Income) | | Adjusted EBITDA | $2,437,854 | $24,175,775 | -89.9% | - The company reported a net loss of **$5.1 million** in Q1 2023, a significant decline from net income of **$21.4 million** in Q1 2022, primarily due to lower patient visits, **$1.9 million stock-based compensation expense**, and higher employee/contractor costs[133](index=133&type=chunk)[135](index=135&type=chunk) - Adjusted EBITDA decreased by **89.9%** to **$2.4 million** in Q1 2023 from **$24.2 million** in Q1 2022, largely due to reduced revenue and increased start-up costs[133](index=133&type=chunk) [Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022](index=27&type=section&id=Three%20Months%20Ended%20March%2031%2C%202023%20Compared%20to%20Three%20Months%20Ended%20March%2031%2C%202022) Compares the company's overall financial results, including net income and Adjusted EBITDA, between Q1 2023 and Q1 2022 - The company reported a net loss attributable to Nutex Health Inc. of **$5.1 million** (**$0.01 loss per share**) for Q1 2023, compared to net income of **$21.4 million** (**$0.04 per diluted share**) for Q1 2022[133](index=133&type=chunk) - The decline was principally affected by a **36% decrease in patient visits** (due to increased COVID-19 visits in January 2022), a **$1.9 million stock-based compensation expense**, and higher overall costs for employees and independent contractors[133](index=133&type=chunk)[135](index=135&type=chunk) - Adjusted EBITDA for Q1 2023 was **$2.4 million**, a significant decrease from **$24.2 million** in Q1 2022, primarily due to lower revenue and increased start-up costs[133](index=133&type=chunk) [Hospital Division](index=28&type=section&id=Hospital%20Division) Examines the revenue, patient visits, and operating income performance of the hospital division for the reporting periods Hospital Division Performance | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (YoY) | | :---------------- | :-------------------------------- | :-------------------------------- | :----------- | | Revenue | $49,288,164 | $79,127,242 | -37.7% | | Patient visits | 33,085 | 51,743 | -36% | | Operating income | $4,778,637 | $35,815,496 | -86.6% | - The hospital division's revenue decreased by **37.7%** and operating income by **86.6%** year-over-year, primarily due to a **36% reduction in patient visits**, with Q1 2022 benefiting from significant COVID-19 related cases[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Population Health Management Division](index=28&type=section&id=Population%20Health%20Management%20Division) Reports the inaugural revenue and operating income for the population health management division in Q1 2023 Population Health Revenue (Q1 2023) | Revenue Type (Q1 2023) | Amount | | :----------------------- | :------------- | | Capitation revenue | $6.0 million | | Management fees | $0.7 million | | SaaS revenue | $0.3 million | | Total Revenue | $7.0 million | - This division, established after the **April 2022 Clinigence merger**, generated **$7.0 million in total revenue** and **$0.1 million in operating income** for Q1 2023[139](index=139&type=chunk)[140](index=140&type=chunk) - The strategic focus for this division is growth through the addition of new independent physician associations, with staffing aligned to manage larger numbers of such organizations[140](index=140&type=chunk) [Real Estate Division](index=28&type=section&id=Real%20Estate%20Division) Discusses the deconsolidation of Real Estate Entities and their financial impact on the company's operations - One Real Estate Entity was deconsolidated in Q1 2023 after third-party lenders released the company's guarantees of associated mortgage loans, following **17 deconsolidations in Q2 2022**[141](index=141&type=chunk) - Revenue and operating expenses of consolidated Real Estate Entities are not significant, as their primary operation is owning facilities leased to the hospital division, financed by equity and mortgage debt[142](index=142&type=chunk) - As of March 31, 2023, **two Real Estate Entities** continue to be consolidated, and future hospital openings may lead to consolidation of new Real Estate Entities if guarantees are required[143](index=143&type=chunk) [Corporate and other costs](index=28&type=section&id=Corporate%20and%20other%20costs) Analyzes changes in general and administrative expenses, facilities closing costs, and stock-based compensation Corporate and Other Costs Summary | Cost Type | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | General and administrative expenses | $7.2 million | $6.6 million | | Facilities closing costs | $0.2 million | $- | | Stock-based compensation expense | $1.9 million | $- | | Total Corporate and Other Costs | $9.3 million | $6.6 million | - Corporate and other costs increased to **$9.3 million** in Q1 2023 from **$6.6 million** in Q1 2022, driven by higher professional fees as a public company, staffing additions, and **$0.2 million in facilities closing costs**[144](index=144&type=chunk)[146](index=146&type=chunk) - A **$1.9 million stock-based compensation expense** was recognized in March 2023 for issuing **1,000,000 common shares** to Apollo Medical Holdings, Inc. for IPA managerial services, noted as an out-of-period adjustment[146](index=146&type=chunk) [Nonoperating items](index=29&type=section&id=Nonoperating%20items) Reviews financial items outside of core operations, including interest expense and income tax expense or benefit [Interest expense](index=29&type=section&id=Interest%20expense) Details the increase in interest expense, covering various debt and lease obligations for the reporting period Interest Expense Summary | Item | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :---------------- | :-------------------------------- | :-------------------------------- | | Interest expense | $3.1 million | $1.9 million | - Interest expense increased to **$3.1 million** in Q1 2023 from **$1.9 million** in Q1 2022, covering mortgage indebtedness of consolidated Real Estate Entities, term notes, lines of credit, and finance leases[147](index=147&type=chunk) [Income tax expense (benefit)](index=29&type=section&id=Income%20tax%20expense%20(benefit)) Explains the effective income tax rate and its reconciliation to the federal statutory rate for Q1 2023 - The effective income tax rate for Q1 2023 was **11.63%**, primarily due to state taxes, income of noncontrolling interests in flow-through entities, and permanent differences for non-deductible expenses, differing from the **21% federal statutory rate**[149](index=149&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's ability to meet short-term and long-term financial obligations and fund growth initiatives Cash and Equivalents Summary | Metric | March 31, 2023 | December 31, 2022 | | :----------------------- | :------------- | :---------------- | | Cash and Equivalents | $32.8 million | $34.3 million | - Cash from operating activities was **$1.1 million** in Q1 2023, including **$2.9 million** from the primary components of working capital[154](index=154&type=chunk) - The company received net proceeds of **$5.4 million** from borrowings under notes payable and lines of credit, while capital expenditures were **$4.4 million**[154](index=154&type=chunk) [Significant Sources and Uses of Cash](index=29&type=section&id=Significant%20sources%20and%20uses%20of%20cash%20during%20the%20first%20three%20months%20of%202023.) Highlights major cash inflows and outflows from operating, investing, and financing activities in Q1 2023 - Cash from operating activities was **$1.1 million**, which included **$2.9 million** from the primary components of working capital (receivables, inventories, accounts payable, and expenses)[154](index=154&type=chunk) - The company received net proceeds of **$5.4 million** from borrowings under notes payable and lines of credit[154](index=154&type=chunk) - Capital expenditures were **$4.4 million**, and distributions, net of contributions, to noncontrolling interests totaled **$1.5 million**[154](index=154&type=chunk) [Future Sources and Uses of Cash](index=29&type=section&id=Future%20sources%20and%20uses%20of%20cash.) Discusses anticipated cash needs for operations and growth, including reliance on existing funds and potential external financing - The company expects existing cash, cash equivalents, marketable securities, available borrowing capacity, and **$12.8 million of net proceeds** from the Yorkville PPA (executed April 11, 2023) to be sufficient to meet anticipated cash needs for operations and growth objectives for at least the next twelve months[153](index=153&type=chunk) - Growth plans include developing new hospital locations, often leased from newly established entities partially owned by related parties, which may require guarantees or co-borrowing under mortgage indebtedness[152](index=152&type=chunk) - The company may seek to raise additional cash by selling equity or debt securities if business plan assumptions change or unexpected opportunities arise, noting that larger financing commitments are subject to market conditions[153](index=153&type=chunk) [Indebtedness](index=30&type=section&id=Indebtedness) Refers to detailed information on the company's debt and lease obligations provided in the financial statement notes - The company's indebtedness and lease obligations are presented in Note 8 (Debt) and Note 9 (Leases) of the financial statements[155](index=155&type=chunk) [Off-Balance Sheet Arrangements](index=30&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of material off-balance sheet arrangements as of the reporting date - As of March 31, 2023, the company had no material off-balance sheet arrangements[155](index=155&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) Defines and reconciles Adjusted EBITDA, a key non-GAAP metric used by management to assess operating performance - Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users to evaluate operating performance, defined as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for stock-based compensation, facilities closing costs, acquisition related costs, and impairments[156](index=156&type=chunk)[157](index=157&type=chunk) Adjusted EBITDA Reconciliation | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income (loss) attributable to Nutex Health Inc. | $(5,147,279) | $21,442,843 | | EBITDA | $320,588 | $24,175,775 | | Adjusted EBITDA | $2,437,854 | $24,175,775 | - Adjusted EBITDA significantly decreased from **$24.2 million** in Q1 2022 to **$2.4 million** in Q1 2023, reflecting the decline in net income and other adjustments[158](index=158&type=chunk) [Significant Accounting Policies](index=30&type=section&id=Significant%20Accounting%20Policies) Reiterates the use of management judgments and estimates in financial statement preparation, with no material changes since year-end - The preparation of financial statements and related disclosures in accordance with GAAP requires management to make judgments, assumptions, and estimates, as described in Note 1 to the Consolidated Financial Statements in the 2022 Form 10-K[159](index=159&type=chunk) - There have been no material changes in the company's critical accounting policies that are impacted by judgments, assumptions, and estimates since December 31, 2022[159](index=159&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States that there have been no material changes in the company's market risk exposures or their management since the prior fiscal year - No material changes in primary market risk exposures or their management have occurred since the 2022 Form 10-K filing[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Evaluates the effectiveness of disclosure controls and internal control over financial reporting, noting material weaknesses and remediation efforts [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Concludes that disclosure controls and procedures were not effective as of March 31, 2023, due to identified material weaknesses - As of March 31, 2023, the company concluded that its disclosure controls and procedures were not effective due to previously identified material weaknesses[162](index=162&type=chunk) [Previously Reported Material Weaknesses](index=31&type=section&id=Previously%20Reported%20Material%20Weaknesses) Details specific material weaknesses in logical access, business process controls, and completeness/accuracy of key spreadsheets - Material weaknesses identified include ineffective logical access controls for certain financially relevant systems, poorly designed/implemented business process controls (lacking segregation of duties and key management review), and ineffective controls over the completeness and accuracy of key spreadsheets[163](index=163&type=chunk) - These weaknesses led management to conclude that internal control over financial reporting was not effective as of December 31, 2022[163](index=163&type=chunk) [Remediation Plans](index=31&type=section&id=Remediation%20Plans) Outlines ongoing efforts to address material weaknesses through system implementation, control design, and staffing additions - Remediation efforts are ongoing and include implementing a new enterprise-wide system in Q1 2023 to reduce reliance on manual processes, engaging a firm for control design/testing, and adding key senior management and accounting/financial reporting staff[164](index=164&type=chunk) - The identified material weaknesses did not result in material misstatement of the consolidated financial statements for the periods presented[164](index=164&type=chunk) - The effectiveness of remediation efforts will require validation and testing, and additional measures may be needed to fully remediate the material weakness[165](index=165&type=chunk)[166](index=166&type=chunk) [Changes in Internal Control Over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Reports changes to internal control over financial reporting related to the implementation of a new enterprise-wide system - Changes are being made to internal control over financial reporting in connection with the implementation of a new enterprise-wide system in Q1 2023[167](index=167&type=chunk) - Except for these remediation actions, no other changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control during the period[167](index=167&type=chunk) [Inherent Limitations on Effectiveness of Disclosure Controls and Procedures](index=32&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Disclosure%20Controls%20and%20Procedures) Acknowledges that control systems provide reasonable, not absolute, assurance and are subject to inherent limitations - Management acknowledges that control systems provide only reasonable, not absolute, assurance against errors and fraud due to inherent limitations[168](index=168&type=chunk) - Projections of effectiveness to future periods are subject to risks that controls may become inadequate or compliance may deteriorate[168](index=168&type=chunk) [Part II — Other Information](index=32&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) Presents additional non-financial information, including legal proceedings, risk factors, and equity security sales [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings.) States that the company is not involved in any material litigation as of March 31, 2023 - The company is not a party to any litigation that is material to ongoing operations as of March 31, 2023[169](index=169&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors.) Outlines significant risks, including potential stock dilution from the PPA, funding uncertainties, and financial hardship from trigger events [Substantial Blocks of Common Stock Sales Risk from PPA](index=32&type=section&id=Substantial%20blocks%20of%20our%20Common%20Stock%20may%20be%20sold%20into%20the%20market%20as%20a%20result%20of%20the%20Pre-Paid%20Advance%20Agreement.) Highlights the risk of stock price decline and dilution due to potential substantial sales of common stock under the PPA - The Pre-Paid Advance Agreement (PPA) with Yorkville allows for the issuance of common stock to offset advances, potentially leading to substantial sales that could dilute existing stockholders and cause the stock price to decline[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - The PPA has an aggregate commitment amount of **$100 million**, with advances purchased at **90% of face amount**, and conversion prices tied to VWAP, subject to a floor price of **$0.1851 per share**[172](index=172&type=chunk) [Risk of Not Receiving Full Initial Pre-Paid Advance](index=33&type=section&id=We%20may%20not%20receive%20the%20full%20amount%20of%20the%20initial%20Pre-Paid%20Advance) Warns that the company may not receive the full second tranche of the PPA due to stock price conditions - The company may not receive the full **$10 million second tranche** of the initial Pre-Paid Advance if the VWAP for the ten trading days prior to **June 10, 2023**, or the balance reduction date, is below **$0.60 per share**[175](index=175&type=chunk) - As a result, the company may only receive total proceeds, before expenses, of approximately **$12.8 million** from the initial advance[175](index=175&type=chunk) [Lack of Control Over Stock Issuance Timing and Amount Under PPA](index=33&type=section&id=Once%20we%20receive%20a%20Pre-Paid%20Advance%2C%20we%20do%20not%20have%20the%20right%20to%20control%20the%20timing%20and%20amount%20of%20the%20issuance%20of%20our%20shares%20of%20Common%20Stock%20to%20Yorkville%20under%20the%20PPA%20and%2C%20accordingly%2C%20it%20is%20not%20possible%20to%20predict%20the%20actual%20number%20of%20shares%20we%20will%20issue%20pursuant%20to%20the%20Pre-Paid%20Advance%20Agreement%20at%20any%20one%20time%20or%20in%20total.) Emphasizes the company's lack of control over PPA stock issuance timing and volume, potentially leading to market volatility - The company lacks control over the timing and amount of common stock issuances to Yorkville under the PPA, making it impossible to predict the total number of shares or proceeds[176](index=176&type=chunk)[177](index=177&type=chunk) - Issuances are limited by a Nasdaq Exchange Cap of **19.9% of outstanding shares** (as of April 10, 2023) and an Ownership Limitation for Yorkville of **4.99% of voting power or outstanding shares**, which could restrict funding[178](index=178&type=chunk) - The resale by Yorkville of a significant amount of shares could cause the market price of common stock to decline and become highly volatile[180](index=180&type=chunk) [Risk of Financial Hardship from Trigger Event Payments](index=33&type=section&id=Upon%20a%20trigger%20event%2C%20the%20Company%20may%20be%20required%20to%20make%20payments%20that%20could%20cause%20financial%20hardship%20to%20the%20Company.) Warns of potential financial hardship from substantial cash payments required upon specific trigger events under the PPA - A trigger event (stock price below **$0.1851** for five of seven trading days or issuing substantially all shares under the Nasdaq Cap) requires the company to make a monthly cash payment of **$7.5 million** (plus interest and **6% premium**) to Yorkville[182](index=182&type=chunk) - This financial obligation could impose an undue and unsustainable burden, materially adversely affecting the company's operations and financial condition[182](index=182&type=chunk) [Capital Requirements and Funding Risks](index=34&type=section&id=Our%20current%20business%20plans%20require%20a%20significant%20amount%20of%20capital.%20If%20we%20are%20unable%20to%20obtain%20suf%20ficient%20funding%20or%20do%20not%20have%20access%20to%20capital%2C%20we%20may%20not%20be%20able%20to%20execute%20our%20business%20plans%20and%20our%20prospects%2C%20financial%20condition%20and%20results%20of%20operations%20could%20be%20materially%20adversely%20af%20ected.) Addresses the company's significant capital needs and the risks associated with insufficient funding for business execution - The company's business plans require significant capital for expansion, with capital expenditures expected to remain high, leading to uncertain and potentially higher actual capital requirements[184](index=184&type=chunk) - Reliance on Yorkville for funding depends on market conditions and PPA limitations (Exchange Cap, Ownership Limitation), and the company may not be able to utilize the PPA or other facilities (like the Lincoln Purchase Agreement) when needed[183](index=183&type=chunk)[185](index=185&type=chunk) - Failure to raise sufficient funds on favorable terms could force the company to reduce spending, delay/cancel activities, or substantially change its corporate structure, potentially leading to curtailment or discontinuation of operations[187](index=187&type=chunk)[188](index=188&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Reports recent unregistered issuances of common stock from warrant exercises and for managerial services - In Q1 2023, **702,285 common shares** were issued from cashless exercises of warrants (**806,453 warrants**), and **1,000,000 common shares** were issued to Apollo Medical Holdings, Inc. for IPA managerial services[189](index=189&type=chunk) - All issuances were unregistered and exempt from registration requirements under Section 4(a)(2) of the Securities Act of 1933[189](index=189&type=chunk) [Item 3. Defaults upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities.) Indicates no defaults on senior securities occurred during the reporting period - This item is marked as 'Not Applicable', indicating no defaults upon senior securities[190](index=190&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company's operations - This item is marked as 'Not Applicable', indicating no mine safety disclosures are required[190](index=190&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) Indicates no other material information to report beyond what is already disclosed - This item is marked as 'Not Applicable', indicating no other material information to report[191](index=191&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Lists all documents filed as exhibits, including employment agreements and regulatory certifications - Exhibits include an employment agreement, CEO and CFO certifications (Sarbanes-Oxley Act Sections 302 and 906), and various XBRL taxonomy documents[192](index=192&type=chunk) - Certifications under Section 906 are not deemed 'filed' for Section 18 liability purposes and are not incorporated by reference into other filings[192](index=192&type=chunk) [SIGNATURES](index=37&type=section&id=SIGNATURES) Contains the required signatures of authorized officers, certifying the accuracy of the report

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission file number 001-41346 NUTEX HEALTH INC. (State or other jurisdiction of incorporation or organization) (I.R.S. Employer ...