[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 ...

Part I — Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended September 30, 2022, reflect a significant net loss of $432.4 million, primarily due to a goodwill impairment charge [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2022, total assets increased to $434.5 million, while total equity significantly declined to $132.5 million due to a retained deficit Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$434,517,727** | **$394,650,043** | | Cash and cash equivalents | $36,620,799 | $36,118,284 | | Goodwill, net | $17,010,637 | $1,139,297 | | **Total Liabilities** | **$301,989,725** | **$203,069,033** | | Financing lease liabilities, net | $204,591,022 | $65,735,501 | | **Total Equity** | **$132,528,002** | **$191,581,010** | | Retained earnings (accumulated deficit) | ($358,967,267) | $102,315,623 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q3 2022, the company reported a net loss of $433.2 million, primarily due to a $408.5 million goodwill impairment charge, with revenue significantly decreasing Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$28,395,058** | **$117,971,732** | **$165,570,233** | **$268,129,646** | | Hospital division Revenue | $21,244,305 | $117,971,732 | $151,976,226 | $268,129,646 | | Population health management division Revenue | $7,150,753 | $— | $13,594,007 | $— | | Impairment of goodwill | $408,466,575 | $— | $408,466,575 | $— | | **Operating Income (Loss)** | **($439,012,276)** | **$74,462,783** | **($411,151,780)** | **$154,727,918** | | **Net Income (Loss)** | **($433,240,552)** | **$74,494,252** | **($432,412,571)** | **$155,051,299** | | Net Income (Loss) Attributable to Nutex Health Inc. | ($422,517,803) | $53,793,277 | ($420,359,806) | $118,614,814 | | **Basic EPS** | **($0.65)** | **$0.09** | **($0.67)** | **$0.20** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2022, net cash from operating activities significantly decreased to $46.1 million, despite a goodwill impairment charge Cash Flow Summary (Nine Months Ended September 30) | Cash Flow Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash from operating activities | $46,101,114 | $127,008,338 | | Net cash from investing activities | ($12,217,448) | ($25,206,117) | | Net cash from financing activities | ($33,381,151) | ($93,078,162) | | **Net change in cash and cash equivalents** | **$502,515** | **$8,724,059** | | Cash and cash equivalents - end of the period | $36,620,799 | $34,238,334 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's structure, accounting policies, and key financial events, including the Clinigence merger, goodwill impairment, and revenue reduction from the No Surprises Act - The merger with Clinigence on April 1, 2022, was accounted for as a reverse business combination, establishing the company's two-division structure: Hospital and Population Health Management[32](index=32&type=chunk)[40](index=40&type=chunk) - A non-cash impairment charge of **$408.5 million** was recognized in Q3 2022 to reduce the carrying amount of goodwill for the population health management division, initially recorded as part of the reverse merger[68](index=68&type=chunk)[98](index=98&type=chunk) - The implementation of the No Surprises Act (NSA) on January 1, 2022, led to a decline in average insurance payments, resulting in a revenue reduction of approximately **$29.0 million** for Q3 2022 and **$38.6 million** for the nine months ended September 30, 2022[104](index=104&type=chunk)[108](index=108&type=chunk) - In Q2 2022, the company deconsolidated **17 Real Estate Entities (VIEs)** after third-party lenders released the company's guarantees on their mortgage loans, removing significant assets and liabilities from the consolidated balance sheet[45](index=45&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Subsequent to the quarter end, on November 14, 2022, the company entered into an agreement with Lincoln Park Capital Fund for the right to sell up to **$100 million** of its common stock over a 36-month period to support working capital and growth[151](index=151&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the significant net loss in Q3 2022 to a $408.5 million goodwill impairment and the No Surprises Act, impacting revenue and patient visits - The No Surprises Act (NSA), effective January 1, 2022, has caused an approximate **30% decline** in average insurer payments for emergency services, leading to a revenue reduction of **$29.0 million** in Q3 2022 and **$38.6 million** in the first nine months of 2022[181](index=181&type=chunk)[192](index=192&type=chunk)[208](index=208&type=chunk) - A non-cash goodwill impairment charge of **$408.5 million** was recorded in Q3 2022 for the population health management division, significantly impacting the net loss for the period[193](index=193&type=chunk)[201](index=201&type=chunk) Adjusted EBITDA Reconciliation (Non-GAAP) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Nutex Health Inc. | ($422,517,803) | $53,793,277 | ($420,359,806) | $118,614,814 | | **Adjusted EBITDA** | **($15,703,878)** | **$55,720,823** | **$18,456,057** | **$125,469,515** | Hospital Patient Visits | Period | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Three months ended Sept 30 | 36,500 | 59,990 | (39%) | | Nine months ended Sept 30 | 121,414 | 137,041 | (11%) | - The company is pursuing strategic actions to mitigate the impact of the NSA, including working with legislatures, maximizing claims coding, increasing co-pay collections, dedicating a team to the IDR process, and seeking favorable contracts with insurers[182](index=182&type=chunk)[184](index=184&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required for smaller reporting companies, thus no information is provided - Disclosure is not required for smaller reporting companies[248](index=248&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2022, due to material weaknesses, with remediation efforts underway - The company's disclosure controls and procedures were deemed **ineffective** as of September 30, 2022[249](index=249&type=chunk) - A material weakness was identified in internal control over financial reporting concerning the revenue estimation process, lease accounting, and inadequate accounting close processes[251](index=251&type=chunk) - Remediation efforts are underway, including hiring a new CFO, engaging specialists, and employing additional experienced accounting personnel to strengthen internal controls[252](index=252&type=chunk) Part II — Other Information [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) As of September 30, 2022, the company is not a party to any material litigation - The Company is not a party to any material litigation as of the period ended September 30, 2022[256](index=256&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Form S-3 Registration Statement filing on September 30, 2022 - No material changes in risk factors have occurred since the Form S-3 filing on September 30, 2022[258](index=258&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q3 2022, the company issued 851,611 common shares to convert convertible notes payable, an unregistered sale exempt under Section 4(a)(2) of the Securities Act - During Q3 2022, **851,611 common shares** were issued to convert the remaining convertible notes payable[259](index=259&type=chunk) - The issuance was an unregistered sale, exempt from registration requirements under Section 4(a)(2) of the Securities Act[259](index=259&type=chunk) [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No other information is reported for this item - None[261](index=261&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed, including CEO and CFO certifications required by the Sarbanes-Oxley Act - The exhibits filed include CEO and CFO certifications as required by the Sarbanes-Oxley Act[262](index=262&type=chunk)

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, 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: 000-53862 Securities registered pursuant to Section 12(b) of the Act: NUTEX HEALTH INC. | Title of each class | Trading Symbol(s) | ...

Delaware 11-3363609 (I.R.S. Employer Identification No.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended March 31, 2022. ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to Commission file number 000-53862 NUTEX HEALTH INC. (formerly known as Clinigence Holdings, Inc.) (Exact name of registrant as speci ...

[Part I - Business and Risk Factors](index=5&type=section&id=PART%20I) This section provides an overview of the company's business model, operational structure, and the significant risks it faces [Business Overview](index=5&type=section&id=Item%201.%20Business) Clinigence Holdings operates as a technology-driven, risk-bearing population health management company, generating revenue from capitation, SaaS, and management fees, with a strategy to expand its national network - The company operates as a technology-enabled, risk-bearing population health management company that manages provider networks, primarily through its subsidiaries which include MSOs, IPAs, and a healthcare IT company[19](index=19&type=chunk) - Key subsidiaries include Clinigence Health (SaaS platform), AHP Health Management (manages an IPA with **22,065 patients**), and Procare Health (an MSO serving HMOs and IPAs)[21](index=21&type=chunk)[22](index=22&type=chunk)[24](index=24&type=chunk) - Revenue is generated from three primary streams: Capitation revenue from its AHP subsidiary, SaaS subscription revenue from its CHI subsidiary, and Management Fee income from its Procare subsidiary[27](index=27&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - The company has significant customer concentration, with two key payors accounting for **23% of total net capitation revenue in 2021**[32](index=32&type=chunk) - Operations are subject to extensive healthcare regulations, including the Stark Law, Anti-Kickback Statute, HIPAA, and state-specific laws like California's prohibition on the corporate practice of medicine, which necessitates the use of Management Services Agreements (MSAs) with physician-owned IPAs[35](index=35&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks from the COVID-19 pandemic, reliance on the California market, its VIE structure, intense competition, and complex healthcare regulations including corporate practice of medicine laws - The COVID-19 pandemic has impacted business through reduced inpatient visits and may continue to disrupt operations, affect health network partners, and impact the ability to access capital[53](index=53&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) - The company's financial statements are consolidated with a non-owned affiliated physician group (a Variable Interest Entity or VIE); changes in accounting principles or regulations regarding VIEs could prevent the company from consolidating these revenues[59](index=59&type=chunk)[60](index=60&type=chunk) - A substantial portion of revenues are derived from California, making the business vulnerable to economic, regulatory, or other changes specific to that state[65](index=65&type=chunk) - The company faces significant risk under its capitation contracts, where it could incur substantial losses if medical care-related expenses exceed the fixed capitation payments received[124](index=124&type=chunk) - State laws prohibiting the corporate practice of medicine, particularly in California, require the company to operate through Management Services Agreements (MSAs); if these arrangements are deemed invalid, it could have a material adverse effect on operations and financial condition[83](index=83&type=chunk)[84](index=84&type=chunk)[125](index=125&type=chunk) - The business is subject to numerous complex federal and state healthcare laws, including the Anti-Kickback Statute and the Stark Law; non-compliance could lead to significant penalties, fines, and exclusion from federal healthcare programs[85](index=85&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk) - The company does not hold a Knox-Keene license in California; if regulators determine that its risk-bearing arrangements require such a license, it could face civil and criminal liability and be required to restructure its operations[110](index=110&type=chunk)[111](index=111&type=chunk) [Properties](index=33&type=section&id=Item%202.%20Properties) The company operates from leased office spaces in Florida and California, with no owned real property - The company leases all its properties, with primary offices in Florida and California; leases have terms expiring between 2021 and 2024 with monthly rents from **$2,500 to $4,000**[153](index=153&type=chunk) [Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2021, the company is not involved in any material litigation - The company is not party to any material litigation as of December 31, 2021[154](index=154&type=chunk) [Part II - Market, Financials, and MD&A](index=34&type=section&id=PART%20II) This section covers the company's common stock market, detailed financial performance, liquidity, critical accounting policies, and internal controls [Market for Common Equity and Related Matters](index=34&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on OTCMarkets, with no cash dividends planned, and significant stock issuances occurred in 2021 for acquisitions and operations - The company's common stock is listed on the OTCMarkets under the symbol **"CLNH"**[158](index=158&type=chunk) - No cash dividends have been paid, and none are contemplated for the foreseeable future[159](index=159&type=chunk) - In 2021, the company sold **7.5 million common shares** for proceeds of **$14.4 million**[160](index=160&type=chunk) - Significant stock issuances in 2021 were made in connection with acquisitions: **14.2 million shares for AHA**, **19.0 million shares for AHP**, and **0.6 million shares for Procare**[162](index=162&type=chunk)[163](index=163&type=chunk) [Management's Discussion and Analysis (MD&A)](index=35&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The MD&A details the company's transformative 2021 financial performance driven by acquisitions, resulting in significantly increased revenue and a higher net loss, alongside improved liquidity and a planned reverse merger [2021 Highlights and Recent Developments](index=35&type=section&id=2021%20Highlights%20and%20Recent%20Developments) Key developments in 2021 included the acquisitions of AHP, AHA, and Procare, culminating in a merger agreement for a reverse merger with Nutex Health - On February 26, 2021, the company consummated mergers with AHP Health Management Services, Inc. and Accountable Healthcare America, Inc. (AHA)[173](index=173&type=chunk)[179](index=179&type=chunk) - On October 15, 2021, the company acquired Procare Health, Inc[184](index=184&type=chunk)[185](index=185&type=chunk) - On November 23, 2021, the company entered into a merger agreement for a reverse merger with Nutex Health Holdco LLC, which was subsequently approved by shareholders in March 2022[188](index=188&type=chunk)[493](index=493&type=chunk) [Results of Operations (2021 vs. 2020)](index=38&type=section&id=Results%20of%20operation) The company experienced dramatic revenue growth in 2021 due to acquisitions, alongside a significant increase in general and administrative expenses, leading to a higher net loss Consolidated Statement of Operations (2021 vs. 2020) | Financial Metric | 2021 | 2020 | | :--- | :--- | :--- | | **Total Sales** | **$18,793,783** | **$1,585,952** | | Capitation revenue, net | $16,620,488 | $0 | | SaaS revenue | $1,653,806 | $1,585,952 | | Management services revenue, net | $519,489 | $0 | | **Cost of sales** | $14,647,045 | $909,780 | | **Gross profit** | **$4,146,738** | **$676,172** | | **General and administrative expenses** | $12,177,316 | $3,251,353 | | **Income (loss) from operations** | **($9,018,075)** | **$1,373,320** | | **Net loss** | **($13,668,624)** | **($5,650,167)** | | **Net loss attributable to Clinigence** | **($13,669,515)** | **($5,650,167)** | - Total revenue increased dramatically to **$18.8 million in 2021** from **$1.6 million in 2020**, primarily due to **$16.6 million in new capitation revenue** from the AHP acquisition[200](index=200&type=chunk) - General and administrative expenses increased to **$12.1 million in 2021** from **$3.25 million in 2020**, largely due to transactional costs from acquisitions and stock-based compensation[205](index=205&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company's cash position significantly improved in 2021 due to stock offerings, alleviating going concern doubts and providing sufficient capital for future operations - Cash position significantly improved to **$15.3 million** at year-end 2021, compared to just **$26,931** at year-end 2020[217](index=217&type=chunk) - The company raised approximately **$14.4 million** in gross proceeds from stock offerings during 2021[218](index=218&type=chunk) - Management believes that with the funds raised, it has alleviated substantial doubt about the company's ability to continue as a going concern and has sufficient capital to fund operations for at least one year from the filing date[218](index=218&type=chunk)[393](index=393&type=chunk) Cash Flow Summary for FY 2021 | Cash Flow Activity | Amount | | :--- | :--- | | Net Cash Used in Operating Activities | ($6,703,530) | | Net Cash Provided by Investing Activities | $7,951,570 | | Net Cash Provided by Financing Activities | $14,039,357 | [Critical Accounting Policies and Estimates](index=42&type=section&id=CRITICALACCOUNTING%20POLICIES%20AND%20ESTIMATES) Key accounting estimates involve the valuation of assets and liabilities from business combinations, consolidation of Variable Interest Entities, and annual goodwill impairment testing - Key estimates include the valuation of assets acquired and liabilities assumed in business combinations, particularly for the 2021 acquisitions of Procare, AHA, and AHP[224](index=224&type=chunk)[251](index=251&type=chunk) - The company consolidates Variable Interest Entities (VIEs) for which it is the primary beneficiary, determined by a qualitative analysis of power and economics[233](index=233&type=chunk) - Goodwill is not amortized but is tested annually for impairment; no impairment was recorded for the year ended December 31, 2021[253](index=253&type=chunk)[408](index=408&type=chunk) [Financial Statements and Supplementary Data](index=48&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The audited financial statements for 2021 and 2020 are presented with an unqualified auditor opinion, highlighting the valuation of acquisition-related assets and liabilities as a Critical Audit Matter - The independent auditor, Marcum LLP, issued an unqualified opinion on the financial statements[348](index=348&type=chunk) - A Critical Audit Matter was identified concerning the valuation of assets and liabilities from the acquisitions of AHA, AHP, and Procare, due to the highly subjective and judgmental nature of estimating the fair value of intangible assets and goodwill[352](index=352&type=chunk)[353](index=353&type=chunk)[357](index=357&type=chunk) Consolidated Balance Sheet Highlights (as of Dec 31) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Cash | $15,314,328 | $26,931 | | Goodwill | $57,338,935 | $0 | | Intangible assets, net | $10,585,592 | $0 | | **Total Assets** | **$85,733,528** | **$169,857** | | Total Liabilities | $10,594,906 | $1,303,652 | | **Total Stockholders' Equity (Deficiency)** | **$75,138,622** | **($1,133,795)** | - Subsequent to year-end, on March 16, 2022, stockholders approved the merger with Nutex Health Holdco LLC[493](index=493&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that as of December 31, 2021, the company's disclosure controls and procedures were effective[265](index=265&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of December 31, 2021, based on the COSO framework[267](index=267&type=chunk)[268](index=268&type=chunk) [Part III - Corporate Governance and Compensation](index=50&type=section&id=PART%20III) This section outlines the company's corporate governance structure, executive compensation, security ownership, related party transactions, and principal accountant fees [Directors, Executive Officers, and Corporate Governance](index=50&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The report details the Board of Directors and executive team, including established committees and the adoption of a Code of Business Conduct and Ethics Key Executive Officers | Name | Position | | :--- | :--- | | Dr. Warren Hosseinion | Chief Executive Officer and Chairman of the Board | | Fred Sternberg | President, Director | | Michael Bowen | Chief Financial Officer | | Dr. Lawrence Schimmel | Chief Medical Information Officer | | Elisa Luqman | General Counsel, EVP of Finance and Director | - The Board has established an Audit Committee, a Compensation Committee, and a Governance and Nominating Committee[294](index=294&type=chunk) - The Audit Committee is composed of three independent directors, with John Waters serving as Chairman and designated "audit committee financial expert"[296](index=296&type=chunk) - The company has adopted a Code of Business Conduct and Ethics applicable to its principal officers[303](index=303&type=chunk) [Executive Compensation](index=56&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for 2021 included base salaries, bonuses, and significant stock awards, with a new equity incentive plan approved in 2022 2021 Summary Compensation for Key Executives | Name & Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Warren Hosseinion, CEO | 2021 | 342,805 | 150,000 | 964,602 | 1,307,407 | | Fred Sternberg, President | 2021 | 232,500 | 10,000 | 0 | 242,500 | | Michael Bowen, CFO | 2021 | 167,509 | 50,000 | 0 | 217,509 | - The company has multi-year employment agreements with its named executive officers, which include provisions for severance payments upon termination without cause[308](index=308&type=chunk)[309](index=309&type=chunk) - In 2022, shareholders approved the 2022 Equity Plan, which replaces the 2019 Plan; contingent upon this approval, the company granted **3,624,000 nonqualified stock options** in late 2021[315](index=315&type=chunk)[317](index=317&type=chunk) [Security Ownership](index=61&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Dominus Embree is the largest beneficial owner, while directors and executive officers collectively hold a significant portion of the company's outstanding shares - The largest known beneficial owner is Dominus Embree, with **6,973,483 shares**, representing **14.39% beneficial ownership**[326](index=326&type=chunk) - All directors and officers as a group beneficially own **21,694,050 shares**, representing **44.78% of the company**[326](index=326&type=chunk) [Related Transactions and Director Independence](index=62&type=section&id=Item%2013.%20Certain%20Relationships%2C%20Related%20Transactions%20and%20Director%20Independence) A majority of the board members are independent, with limited related party transactions and one disclosed family relationship among executives - The Board of Directors has determined that a majority of its members, including Messrs. Breslin, Creem, Fawcett, Margolin, Meiri, Sim, and Waters, are independent[331](index=331&type=chunk) - A family relationship exists between President Fred Sternberg and his son, Andrew Barnett, Executive Vice President of Corporate Development[333](index=333&type=chunk) [Principal Accountant Fees and Services](index=62&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Fees paid to Marcum LLP for audit services in 2021 and 2020 are detailed, with all services pre-approved by the Audit Committee Accountant Fees (Marcum LLP) | Fee Type | 2021 | 2020 | | :--- | :--- | :--- | | Audit Fees | $142,623 | $55,000 | | Audit-Related Fees | $0 | $0 | | All Tax Fees | $0 | $0 | | Other Fees | $0 | $0 | | **Total** | **$142,623** | **$55,000** | [Part IV - Exhibits and Financial Statement Schedules](index=64&type=section&id=PART%20IV) This section lists all financial statements and key exhibits filed with the report, including merger agreements and equity incentive plans [Exhibits and Financial Statement Schedules](index=64&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements and key exhibits filed with the report, including merger agreements and equity incentive plans - Lists all financial statements and schedules filed with the report[341](index=341&type=chunk) - Key exhibits filed include merger agreements for the 2021 acquisitions (AHA, AHP, Procare), the 2019 and 2022 Equity Incentive Plans, and various corporate governance documents[341](index=341&type=chunk)

Revenue Performance - Revenue for the three months ended September 30, 2021, was $5,568,757, a significant increase from $350,032 for the same period in 2020, primarily due to the AHP acquisition [151]. - Revenue for the nine months ended September 30, 2021, was $12,873,607, compared to $1,194,250 for the same period in 2020, also driven by the AHP acquisition [151]. Operating Expenses - Operating expenses for the three months ended September 30, 2021, were $2,012,197, compared to $1,636,889 for the same period in 2020 [147]. - General and administrative expenses for the three months ended September 30, 2021, were $1.74 million, up from $698,598 for the same period in 2020, primarily due to the AHP and AHA acquisitions [157]. - Interest expense for the three months ended September 30, 2021, was $1.56 million, compared to $18,252 for the same period in 2020, primarily due to debt related to the acquisition of AHA [162]. - Research and Development expense for the nine months ended September 30, 2021, was $208,615, down from $502,961 for the same period in 2020, due to a reduction in personnel [156]. - The company anticipates additional increases in operating expenses and capital expenditures related to developmental and marketing expenses [173]. Cash Flow and Financing - Cash of $6,011,442 was reported for the nine months ended September 30, 2021, an increase of $5,984,511 from $26,931 as of December 31, 2020 [168]. - Cash used in operating activities for the nine months ended September 30, 2021, was $3,970,719, compared to $1,557,995 for the same period in 2020 [170]. - Cash provided by financing activities for the nine months ended September 30, 2021, was $7,161,652, compared to $472,766 for the same period in 2020 [172]. - The company has no lines of credit or bank financing arrangements, relying on private placements of equity and debt instruments for operations [173]. - Future financing may not be available on acceptable terms, potentially restricting business operations [173]. - Additional issuances of equity or convertible debt securities may result in dilution to current shareholders [173]. Going Concern and Capital Requirements - There is substantial doubt about the company's ability to continue as a going concern, dependent on raising additional capital and generating profitable operations [174]. - Working capital requirements are expected to increase in line with business growth, funded through existing funds and further issuances of securities [173]. - The financial statements have been prepared assuming the company will continue as a going concern, highlighting the need for sufficient capital [174]. - The company may not be able to find alternative sources of cash or generate positive cash flow, adversely affecting business and shareholders [174].

Revenue Growth - Revenue for the three months ended June 30, 2021, was $5,290,505, a significant increase from $378,588 for the same period in 2020, primarily due to the AHP acquisition [134]. - Revenue for the six months ended June 30, 2021, was $7,304,850, compared to $844,218 for the same period in 2020, also driven by the AHP acquisition [134]. Operating Expenses - Operating expenses for the three months ended June 30, 2021, totaled $2,039,436, up from $1,796,351 in 2020, reflecting increased costs associated with the AHP and AHA acquisitions [131]. - General and administrative expenses for the six months ended June 30, 2021, were $6,200,000, up from $2,200,000 in 2020, largely due to stock-based compensation and acquisitions [140]. - Interest expense for the three months ended June 30, 2021, was $2,000,000, compared to $249,283 for the same period in 2020, primarily due to debt accretion related to the AHA acquisition [142]. - Research and Development expense for the three months ended June 30, 2021, was $59,629, down from $314,255 in 2020, reflecting a reduction in personnel [137]. - Management anticipates additional increases in operating expenses and capital expenditures related to developmental and marketing expenses [155]. Financial Position - Cash as of June 30, 2021, was $4,795,175, an increase of $4,768,244 or 177% compared to $26,931 as of December 31, 2020 [149]. - Cash used in operating activities for the six months ended June 30, 2021, was $2,392,675, compared to $1,368,229 for the same period in 2020, indicating increased operational cash outflow [151]. - Cash provided by financing activities for the six months ending June 30, 2021, was $3,272,652, a significant increase from $369,073 for the same period in 2020 [153]. - Proceeds from the sale of common stock amounted to $3,195,000, contributing to the overall financing activities [153]. Capital Raising and Concerns - The company anticipates raising capital in private markets to support business expansion, although there is no guarantee of favorable terms [150]. - The company expects working capital requirements to increase in line with business growth, funded through existing funds and further securities issuances [155]. - There is substantial doubt about the company's ability to continue as a going concern, dependent on raising additional capital and generating profitable operations [156]. - The company has no lines of credit or bank financing arrangements, relying on private placements of equity and debt instruments for funding [155]. - Additional issuances of equity or convertible debt securities may dilute current shareholders and could have senior rights that impact common stock [155]. - The company may face challenges in raising adequate funds on acceptable terms, which could restrict business operations [156]. - Future financing may not be available, impacting the company's ability to pursue new business opportunities [156]. - The financial statements have been prepared assuming the company will continue as a going concern, highlighting the need for positive cash flow [156].

Part I — Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Q1 2021 acquisitions of AHP and AHA dramatically transformed the company's financial position, boosting assets and revenue while widening net loss due to increased operating costs and stock-based compensation [Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, the company's total assets dramatically increased to $75.9 million from $169.9 thousand at year-end 2020, primarily driven by goodwill and intangible assets from recent acquisitions, while total liabilities rose to $49.7 million, shifting stockholders' equity from a deficiency to a positive $66.3 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$75,935,655** | **$169,857** | | Goodwill | $54,978,298 | $— | | Intangible assets, net | $9,653,956 | $— | | Cash | $3,741,458 | $26,931 | | **Total Liabilities** | **$49,671,614** | **$1,303,652** | | Accounts payable and accrued expenses | $4,336,217 | $695,424 | | **Total Stockholders' Equity (Deficiency)** | **$66,264,041** | **($1,133,795)** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2021, sales surged to $2.01 million, a 333% increase from $465,630 in the same period of 2020, primarily due to acquisitions, yet the net loss widened significantly to $4.44 million from $1.12 million year-over-year, driven by a sharp rise in operating expenses including substantial stock-based compensation Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Sales | $2,014,345 | $465,630 | | Gross Profit | $426,872 | $266,502 | | Total Operating Expenses | $4,576,795 | $1,206,417 | | Loss from Operations | ($4,149,923) | ($939,915) | | Net Loss Attributable to Clinigence | ($4,444,559) | ($1,122,730) | | Net Loss per Share | ($0.24) | ($0.24) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) During the first quarter of 2021, stockholders' equity increased from a deficit of $1.1 million to a positive $66.3 million, primarily driven by the issuance of common stock valued at $68.0 million for business acquisitions and $3.9 million in stock-based compensation, partially offset by a net loss of $4.5 million - The company issued **33,009,382** shares of common stock valued at **$67,999,339** for business acquisitions in Q1 2021[13](index=13&type=chunk) - Stock-based compensation added **$3,882,637** to stockholders' equity during the quarter[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the three months ended March 31, 2021, the company's cash position increased by $3.7 million, ending the period at $3.74 million, with net cash used in operating activities of $567,063, significant cash inflow from investing activities of $3.89 million, and $393,323 provided by financing activities Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2021 | | :--- | :--- | | Net Cash Used in Operating Activities | ($567,063) | | Net Cash Provided by Investing Activities | $3,888,267 | | Net Cash Provided by Financing Activities | $393,323 | | **Net Increase in Cash** | **$3,714,527** | | **Cash - End of Period** | **$3,741,458** | - Non-cash investing and financing activities included the issuance of **$67,999,339** in common stock for the acquisition of subsidiaries[16](index=16&type=chunk) [Notes to Consolidated Financial Statements](index=7&type=section&id=Unaudited%20Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant corporate events and accounting policies, including the February 2021 mergers with AHP Management Inc. and Accountable Healthcare America, Inc. (AHA), which led to substantial goodwill and intangible assets, the company's Variable Interest Entity (VIE) structure with AHPIPA, a 'Going Concern' warning due to historical losses and a working capital deficit, and subsequent events like additional stock sales and a letter of intent to acquire Procare Health Inc - On February 26, 2021, the company consummated mergers with AHP Management Inc. and Accountable Healthcare America, Inc. (AHA)[21](index=21&type=chunk)[28](index=28&type=chunk) - The company's financial statements include a 'Going Concern' warning due to an accumulated deficit of **$22.7 million** and a working capital deficit, raising substantial doubt about its ability to continue operations for the next twelve months without additional funding[70](index=70&type=chunk) - The company consolidates AHPIPA as a Variable Interest Entity (VIE), as it is the primary beneficiary with the power to direct its significant non-clinical economic activities[25](index=25&type=chunk)[112](index=112&type=chunk) - Subsequent to the quarter end, the company sold **814,286** shares of common stock for proceeds of **$1.22 million** and entered into a binding Letter of Intent to acquire Procare Health Inc[117](index=117&type=chunk)[118](index=118&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's post-acquisition transformation, highlighting significant revenue growth and increased net loss, while addressing liquidity and the 'going concern' note Q1 2021 vs Q1 2020 Results of Operations | Metric | Q1 2021 | Q1 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $2,014,345 | $465,630 | 332.61% | | Gross Profit | $426,872 | $266,502 | 60.18% | | Loss from Operations | ($4,149,923) | ($939,915) | 341.52% | | Net Loss | ($4,484,140) | ($1,122,730) | 299.40% | - The increase in revenue was primarily attributable to the AHP acquisition, which added **$1.59 million** in capitation revenue[135](index=135&type=chunk)[136](index=136&type=chunk) - General and administrative expenses increased significantly, primarily due to stock-based compensation expense of **$3.9 million** and costs from the AHP and AHA acquisitions[140](index=140&type=chunk) - The company had cash of **$3.7 million** as of March 31, 2021, and believes it has sufficient liquidity for the next 12 months, but notes that its financial statements contain a 'going concern' explanatory paragraph[147](index=147&type=chunk)[153](index=153&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not required for a smaller reporting company - As a smaller reporting company, quantitative and qualitative disclosures about market risk are not required[154](index=154&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2021, concluding they were effective, with no material changes to internal control over financial reporting identified during the first fiscal quarter of 2021 - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[155](index=155&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[156](index=156&type=chunk) Part II — Other Information [Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material litigation as of March 31, 2021 - The Company is not a party to any litigation that is material to ongoing operations as of the period ended March 31, 2021[159](index=159&type=chunk) [Risk Factors](index=32&type=page&id=Item%201A.%20Risk%20Factors) The company states there have been no material changes in its risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2020, directing investors to that report for a full discussion of risks - There have been no material changes in the company's risk factors from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[161](index=161&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities for the period - None reported[164](index=164&type=chunk) [Defaults upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[164](index=164&type=chunk) [Other Information](index=32&type=section&id=Item%205.%20Other%20Information) The company reported no other information - None reported[164](index=164&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) The report lists the exhibits filed, which include certifications by the Chief Executive Officer and Chief Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections **302** and **906**[164](index=164&type=chunk)

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, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 000-53862 CLINIGENCE HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 11-3363609 (I.R.S. ...