Nutex Health (NUTX) - 2021 Q1 - Quarterly Report

Part I — Financial Information Financial Statements 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 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 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 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] - Stock-based compensation added $3,882,637 to stockholders' equity during the quarter[13] Condensed Consolidated Statements of Cash Flows 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] Notes to Consolidated Financial Statements 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][28] - 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] - 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][112] - 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][118] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) 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][136] - 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] - 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][153] Quantitative and Qualitative Disclosures About Market Risk 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] Controls and Procedures 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] - 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] Part II — Other Information Legal Proceedings 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] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities for the period - None reported[164] Defaults upon Senior Securities The company reported no defaults upon senior securities - None reported[164] Other Information The company reported no other information - None reported[164] Exhibits 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]