Greetings and welcome to the Nutex Health Shareholders Update Conference Call. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Vivian Sanders, Corporate Director of Marketing and Business Development. Thank you. You may begin.

Good morning, everyone, and welcome to Nutex Health, Inc.'s Second Quarter 2025 Company Update Conference Call. I'm Vivian Sanders, and I'm pleased to moderate today's discussion. Thank you for joining us as we review our performance and outline our plans for the future. This call is being recorded, and a replay will be available on our website. With me today are our key leaders, Dr. Tom Vo, Chairman and CEO; Jon Bates, Chief Financial Officer; Dr. Warren Hosseinion, President; and Dr. Mike Chang, Chief Medical Officer. They will provide insights into our financial results, operational progress, clinical quality and strategic direction, followed by a Q&A session. Before we begin, a few reminders. Today's discussion may include forward-looking statements based on management's current expectations. These are subject to risks and uncertainties that could cause actual results to differ. For details, please refer to our press release and Form 8-K filed last week and our other SEC filings. These preliminary results being presented today remain subject to the completion of normal quarter-end and fiscal and accounting procedures and closing statement adjustments, and the quarterly review process conducted by our auditors. With that, I'm pleased to turn the call over to Dr. Tom Vo, our Founder and CEO. Dr. Vo, the floor is yours.

Thank you, Vivian, and good morning, everyone. I am thrilled to present Nutex Health's preliminary results for the second quarter of 2025, which builds on the strong momentum from our first quarter and reflects our continued execution of a patient-first, high-quality care model. Our micro hospital approach, combined with strong operational efficiency and effective revenue cycle management has driven continued robust growth. Let me first discuss our operational results. And Jon will update everyone with our progress on the audit and interim review of our financials with our new auditor. Operationally, Q2 2025 shows strong performance with total patient visits reaching 45,573, a 10.6% increase from Q2 of 2024. For the first half of 2025, total patient visits were 93,842, a 15.5% increase from the first half of 2024. Total revenue increased to $244 million for the three months ended June 30, 2025, as compared to total revenue of $76.1 million for the same period in 2024, an increase of 220%. Gross profit was $124.8 million or 51.1% of total revenue for the three months ended June 30, 2025, as compared to gross profit of $22.6 million or 29.7% of total revenue for the same period of 2024. Adjusted EBITDA attributed to Nutex Health was $73.3 million as compared to adjusted EBITDA attributed to Nutex Health of $6.8 million for the three months ended June 30, 2024. Net cash from operating activities was $78.2 million for the six months ended June 30, 2025, compared to $16.3 million for the same period in 2024. As of 6/30/2025, we had $96.7 million of cash in the bank. The strong performance was a testament to our solid fundamentals and dedication and collaboration from all of the team members here at Nutex as we strive to fulfill our core mission of providing better access to healthcare. One driver of our financial success in addition to strong volume growth and higher patient acuity is our arbitration strategy under the No Surprises Act independent dispute resolution process. Congress enacted the No Surprises Act 'NSA' effective January 1, 2022, to protect patients from surprise medical bills incurred when they receive emergency medical services from out-of-network healthcare providers. Providers bill the insurers directly. And if the insurer doesn't pay or if the provider underpays for the medical services provided, the NSA creates the independent dispute resolution or IDR process for unresolved billing disputes between providers and insurers. The patient is not involved in this process, and payment is issued directly to the provider from the insurer. The IDR process safeguards providers by promoting fair reimbursement for payers, helping to ensure their continued ability to deliver care. This process, though administratively intensive, is critical for securing fair compensation when insurers do not pay fair and reasonable awards, as is evidenced by the recent governmental data, which shows that during the second half of 2024, 85% of arbitration awards are in favor of the higher offers submitted by the providers. Nutex undertakes extensive labor and cost-intensive efforts to comply with all applicable laws and regulations in each of the jurisdictions in which it operates, including the eligibility rules in effect at the time a claim is being submitted to federal arbitration. For more information on the NSA and IDR process, please go through our Form 8-K filed on August 22, 2025, under term 8.01 and cms.gov under independent dispute resolution. On July 1, 2024, we engaged HaloMD, a third-party expert to work with us in challenging underpaid out-of-network claims. HaloMD specializes in independent dispute resolution through the MSA and state regulation for out-of-network healthcare providers. Nutex Health determines which claims to submit to arbitration. Given the complexity of the federal arbitration process and its interaction with state surprise billing laws, it is crucial for providers like Nutex Health to seek tech-enabled expert assistance in the highly complex submission process. This third-party expertise, such as that provided by HaloMD, is essential for navigating the complexity of submission of claims in bifurcated states where either state or federal law may apply, depending on the insurance coverage and services provided. As such, independent federal arbitration is now by necessity an integral part of our revenue cycle management operating procedure. Next, I'd like to address a few items that were published in a recently highly misleading short seller report, revolving around mainly HaloMD and allegations made by large insurers and several lawsuits against HaloMD. We strongly disagree with the allegations in the short seller report. Further, we believe that the report misrepresents Nutex business, its claim process and its ability to collect revenue. Further, we believe the short seller completely misunderstands the regulatory framework underpinning the independent federal arbitration system implemented under the No Surprises Act. Nutex Health has not been named in any lawsuit filed by Blue Cross Anthem or any other insurer against HaloMD. And Nutex Health has no hospital locations in jurisdictions where HaloMD is subject to allegations initiated by insurers. In a press release issued on June 4, 2025, with respect to the lawsuit filed by Blue Cross Blue Shield of Georgia, HaloMD states that it is prepared to vigorously defend itself in this litigation in a manner that will highlight the lawsuit's meritless nature. Patient eligibility seem to have been a large point of contention in the lawsuit. So a few clarifying points related to our situation. Nutex Health undertakes extensive labor and cost-intensive efforts to comply with all applicable laws and regulations in each of the jurisdictions in which it operates, including the eligibility rules in effect at the time a claim is being submitted to federal arbitration. The claims process for operating network claims differ from state to state and is highly complex due to mainly the bifurcated nature of many states, which have their own surprise billing rules for fully insured claims and for certain types of providers. Further, there are different rules in each state governing the determination of whether individual claims may be bundled or batched when submitting to the certified independent dispute resolution entity. The short seller extrapolating from the HaloMD lawsuit, which does not apply to Nutex Health, seeks to allege that Nutex Health participated in an intentional flooding of the arbitration system, fortunately obtains large payment and could be subject to revenue clawback. As we have outlined in detail in our Form 8-K filed on August 22, 2025, the eligibility determination for the submission of out-of-network claims to the federal arbitration process is complex. We believe we meticulously adhere to the existing rules underlying those eligibility criteria. As further detailed in our Form 8-K, according to the data published by CMS, Nutex is part of an industry-wide trend, resulting in a large increase in the number of claims submitted for arbitration. During the final two quarters of 2024, providers initiated 1.5 million disputes, which represents more than 70 times the predicted annual caseload. Of those, 85% were decided in favor of the provider, the higher offer, resulting in a median winning offer of over 4 times the median in-network rate of each insurer. Contrary to the allegations contained in the short seller report, we believe that Nutex Health complies with the federal arbitration rules as currently in effect. With respect to revenue collection, the CMS has recently allowed the reopening of awards made prior to June 6, 2025, based purely on narrowly defined clerical, jurisdictional or procedural errors by the independent federal arbitration entity. Neither insurers nor providers may challenge prior awards based on their own errors or on substantial grounds. Further, to address the potential of non-payment by insurers in violation of the No Surprises Act, the No Surprises Act Enforcement Act has been recently reintroduced in Congress and the Senate. In addition, almost all claims are for out-of-network services and the percentages of Medicare and Medicaid of our patients are less than 5%. Since our claims process and revenue cycle management team are all in-house, we believe we expend significant resources to review and determine which claims are sent to the independent dispute resolution entity. Lastly, the short seller report also mentioned Neighbors Emergency Center bankruptcy in 2018. Neighbors Emergency Center was indeed co-founded by myself in 2008. However, I left Neighbors in 2011 to start Nutex Health. The two models are completely different. Neighbors had a freestanding ER model located only in Texas, whereas Nutex Health is a micro hospital model with facilities on a national level. Neighbors did eventually file for bankruptcy around 2018, seven years after I left its management team. On the regulatory front, we are not seeing any significant legislative changes to either the NSA or the IDR process. We feel that Congress is currently content with NSA because it has done its job to protect the American public from surprise bills. Any changes to the NSA may potentially put the American public at risk. We expect the federal arbitration process for out-of-network services will continue to evolve and become more efficient and less complex. As an example, on July 1, 2025, the federal IDR portal was upgraded to streamline the arbitration process and enhance the quality of data submitted. We believe the proposed No Surprise Act Enforcement Act will also be beneficial to providers such as Nutex Health. It was reintroduced on July 23 by a bipartisan, bicameral group, including representative Greg Murphy of North Carolina, Raul Ruiz and Jimmy Panetta of California, John Joyce of Pennsylvania, Kim Schrier of Washington and Bob Onder of Missouri. A companion legislation was also introduced by Senators Roger Marshall of Kansas and Senator Michael Bennet of Colorado. If enacted, either version would offer significant benefits to providers participating in the NSA's IDR process. Importantly, both bills impose penalties for late or non-payments when a non-prevailing party fails to make the required payment within 30 days of an IDR determination. The penalty imposed will be three times the difference between the initial payment and the IDR determination per claim. Interest will also apply to late or non-payments. The bills authorize the imposition of civil monetary penalties on health plans and insurers for violation of the NSA's balance billing provision. HHS would have discretion to assess penalties of up to $10,000 per violation, the same maximum penalty currently applicable to providers who violate these requirements. The bills also include the new HHS labor and treasury requirements aimed at better reporting transparencies for insurers and health plans. Please refer to our current report on Form 8-K dated August 20, 2025, for additional information. Our growth strategy remains robust with over 15 hospital projects in development, including two confirmed openings by the end of 2025 and a potential third. These projects target high-growth markets with strong demand for our micro hospital model as discussed in Q1. We are also advancing our Population Health Management Division, planning to launch one to two independent physician associations (IPAs) annually, particularly near our micro hospitals, to enhance care coordination and synergies. To drive organic growth, we're investing in existing facilities by expanding clinical services and optimizing workflow, a strategy we find from Q1 feedback to boost performance. Our combination of organic growth, new market entries, and strategic acquisitions position Nutex for sustained success. To further enhance shareholder value, on July 30, 2025, the Board of Directors authorized a stock repurchase program of up to $25 million of the company's common stock over the next six months. In summary, Q2 2025 was a transformative quarter with strong volume growth, strong cash generation and a clear development pipeline. We remain committed to delivering value to patients and shareholders while navigating industry trends. I will now turn the call over to Jon Bates, our Chief Financial Officer.

Thank you, Tom, and good morning, everyone. Today, I will cover a few topics, some of which Tom has already discussed. First, I'll provide some background on the delay in filing our second quarter 2025 10-Q and outline our timeline for completing all necessary filings. Then, I'll present key financial data for the second quarter and the six months ended June 2025, which we believe will remain unaffected by the accounting issue that caused the delay, underlining the positive trend the company has experienced since the fourth quarter of 2024 without any fundamental changes to our operational model. Let's start with the delay in our second quarter 2025 10-Q filing, which we noted in our current report on Form 8-K dated August 20, 2025. While preparing our financials for this filing, we reevaluated the accounting treatment for stock-based compensation obligations associated with certain hospitals under construction and ramping under U.S. GAAP standards. In our merger with Clinigen in April 2022, we entered into earn-out agreements with the previous owners of these hospitals for additional payments once the facilities became operational. These obligations were recorded as equity and stock compensation expense. However, upon reevaluation, we determined these obligations should be classified as liabilities instead of equity. We are also revising how these obligations are accounted for. While the adjustments are noncash and material to our financial statements for the quarter ended March 31, 2025, and for the year ending December 31, 2024, we filed a Form 8-K on August 24, 2025, stating that these SEC filings should not be relied upon until we complete corrections and submit amended filings. We are currently collaborating with our auditors on this restatement. Our preliminary calculations suggest that total liabilities as of December 31, 2024, will increase by approximately $10 million to $20 million, leading to a corresponding decrease in reported equity. Liabilities as of March 31, 2025, are expected to rise by about $20 million to $50 million, again with a decrease in equity. Net income for the three months ending March 31, 2025, is projected to increase by between $2 million and $10 million due to this. These obligations and expenses are purely for stock-based compensation and are noncash. The corrections will not affect previously reported amounts for key financial statement line items such as revenue, gross profit, liquidity, working capital, debt, operating cash flow, adjusted EBITDA, or patient visits. Although adjusted EBITDA is a non-GAAP measure, we believe it highlights important trends in our operating results by excluding significant noncash items required by GAAP. We are making efforts to address these corrections promptly while continuing to execute our operating and growth plans. Additionally, we received a notice from NASDAQ about our missed filing of the June 30, 2025, Form 10-Q, granting us 60 calendar days until October 20, 2025, to file it. We plan to complete this process within the timeline and will provide necessary updates if changes arise. Now, let's discuss key financial data for the second quarter of 2025 and the six months ended June 2025, which we believe remain unaffected by the accounting issue. For the three months ended June 30, 2025, total revenue reached $244 million, up from $76.1 million for the same period in 2024, marking an increase of 220%. Much of this growth was driven by the Hospital Division, which generated $236.3 million, up 350% from the previous year. Out of this hospital revenue, $167.7 million came from independent dispute resolution revenue, making up about 71%. Revenue from mature hospitals, those opened before December 31, 2021, rose by 203% in 2025 compared to 2024. The Population Health Division also saw a slight increase of $0.8 million, or 9.2%, in revenue to $7.7 million. Regarding arbitration-related revenue, we have consistently submitted 60% to 70% of our business through the independent dispute resolution process, achieving a legal determination on over 85% of submitted claims and maintaining a collection rate exceeding 75%. Arbitration costs have remained stable, accounting for 26% to 28% of arbitration revenues. From a corporate cost perspective, G&A expenses as a percentage of total revenue dropped to 5.1% in the second quarter of 2025, down from 14% in the same quarter of 2024, reflecting our ongoing commitment to cost control alongside revenue growth. Gross profit stood at $125 million or 51.1% of total revenue, compared to $22.6 million or 29.7% of total revenue for the same period in 2024. For the three months ended June 30, 2025, hospital visits totaled 45,573, increasing by 10.6% from 41,208 in the same period in 2024. Visits at mature hospitals rose by 0.6%. In total, we collected $175 million on hospital revenue in this quarter, our highest ever, with $109 million, about 62% of collections, related to arbitration revenue. Adjusted EBITDA rose to $71.6 million, up from $6.8 million in 2024, while operating cash flow was $27.1 million compared to $13.3 million the previous year. Now, for the six months ended June 2025, total revenue reached $455.8 million versus $143.5 million in 2024, a growth of 217.5%. The Hospital Division accounted for the majority of this growth with $440.2 million, up from $127.6 million in the first half of 2024. IDR revenue contributed approximately 64% of that figure. Revenue from mature hospitals climbed by 195.2% year-over-year. The Population Health Division experienced a slight decline by $0.4 million to $15.5 million. In terms of arbitration costs, 26% to 28% of the arbitration revenue was due to arbitration costs. Gross profit for the six months was a robust $243.1 million, representing 53.3% of total revenue, compared to $32.7 million or 22.8% in the prior year. G&A expenses again fell as a percentage of total revenue to 4.9% from 13.4%, emphasizing our focus on cost control and net revenue improvement. Total visits at the Hospital Division were 93,842 for the six months ended June 2025, which is a 15.5% increase from 81,276 in the same period in 2024, with mature hospitals seeing a 3% rise. During this period, we collected $311 million in cash, the highest first-half collection in our history, with $172 million, or about 55%, related to arbitration revenue. Adjusted EBITDA reached $144.4 million, compared to $6.4 million in the previous year, and operating cash flow was $78.1 million compared to $16.1 million. As of June 30, 2025, total assets were nearly $855 million, including $96.4 million in cash and $349.2 million in accounts receivable. We incurred significant tax payments relating to the 2024 tax year, along with estimated payments for 2025, totaling just under $51 million, and $18.8 million in member distribution payments during this period, contributing to larger outflows. The current portion of long-term debt and total long-term debt amounted to $15 million and $20.5 million, respectively, in June 2025. Overall, we are confident in the direction of the company, supported by a strong balance sheet, solid cash flow, and limited true debt, enabling us to effectively manage current needs, whether it be opening new hospitals, supporting existing ones, buying back shares, or pursuing growth opportunities for our shareholders. Lastly, I want to share more about the 21 named hospitals with contribution agreements signed when we went public on April 1, 2022. These include four ramping hospitals and 17 under-construction hospitals eligible for additional stock issuance after being operational for two years. As of June 30, 2025, all ramping hospitals have opened, but none qualified for earn-out shares. Among the under-construction hospitals, four have abandoned their development plans. Of the remaining 13, six had measurement periods ending on or before June 30, 2025, with two not qualifying for earn-out shares. Regarding shares of dilution from hospitals with measurement periods concluding in the first half of 2025, we estimate about one million shares will be affected, with vesting staggered over three tranches. The remaining seven under-construction hospitals have measurement periods that conclude after June 30, 2025, varying from August 2025 to March and into the fourth quarter of 2026. Finally, three hospitals have yet to open, with one slated for later in 2025 and two potentially opening in 2026. With that, I'll hand the call over to Warren Hosseinion, our President, to discuss the population health segment further.

Thank you, Jon, and good morning, everyone. I'm pleased to update you on Nutex Health's Population Health Management Division, a key pillar of our value-based care strategy. Building on our Q1 discussion, we've refined our focus on growth and operational efficiency to drive long-term success. As outlined previously, our strategy integrates hospitals and Independent Physician Associations or IPAs, to deliver coordinated cost-effective care. Our IPA comprising primary care physicians and specialists near our facilities now manage over 41,000 patients in risk-based arrangements. In Q2 2025, the division generated $7.7 million, down slightly from $8.5 million in Q2 2024, reflecting the divestiture of two non-core assets in mid-2024. For the first half of 2025, revenue was $15.5 million compared to $15.9 million in 2024. Operating income for the first half improved to $0.1 million from a $0.6 million loss in 2024. Our strategic focus remains on expanding our IPA network, targeting one to two new IPAs annually near our micro hospitals to leverage synergies as discussed in Q1. In 2025, we expanded and now have over 300 primary care physicians and over 900 specialists contracted in our network, supported by a team equipped to manage this larger network. The division is well-positioned to capitalize on value-based care trends with growth driven by organic expansion, partnerships, and potential acquisitions. In conclusion, our improved profitability and strategic investments position the division for growth. We're excited to expand our IPA network and enhance our value-based offerings. I'll now turn the call over to Dr. Michael Chang, our Chief Medical Officer.

Thank you, Warren, and good morning, everyone. I'm pleased to provide an update on Nutex Health's clinical quality and patient experience, which remain at the core of our mission to deliver high-quality patient-centric care. Building on our Q1 focus, we continue to prioritize clinical excellence and exceptional patient satisfaction, which sets us apart in the health care industry. Our commitment to clinical quality is reflected in our rigorous standards and outcomes. In Q2 2025, we maintained a patient satisfaction rate exceeding 96% across our facilities as measured by internal surveys. This is complemented by our outstanding Google ratings, which average about 4.7 out of 5 in every market, with most facilities achieving 4.9 or 5.0. Such high satisfaction levels are nearly unheard of in healthcare today, underscoring the strength of our micro hospital model, which emphasizes personalized concierge-style care in a low wait time environment. These metrics reflect our dedication to meeting patient needs with efficiency and compassion, a priority we've consistently highlighted in our prior calls. As Tom already mentioned, Nutex continues to grow patient revenue and volume. Q2 2025 total patient visits increased 10.6% to 45,573 compared to Q2 2024, reflecting growth in both new and mature hospitals. Mature hospitals grew by 0.6% in the second quarter. For the six months ended June 30, 2025, total visits were 93,842 compared to 81,276 for the same period in 2024, an increase of 15.5%. This growth reflects our leadership team's ongoing efforts in community engagement, business development, and adding specialists and service lines to manage more complex cases. Our capacity to provide high-quality around-the-clock ER observation and inpatient stays is a key strength and positions Nutex as a trusted provider in the communities we serve. Cost discipline remains a priority. Excluding arbitration costs, operating costs remained stable despite higher volumes and new hospitals this year. Labor costs did increase 31% from $27 million to $34.9 million, due to increased payroll and benefits for opening four new hospitals in 2024 and staffing for higher ER volumes and an increased volume of higher acuity observation and inpatients. Overall, labor costs continue to be a much smaller percentage of net revenue than most hospital companies at 14.7% for the second quarter, exemplifying our lean, high-quality model. Supply costs continue to be a very good story for us. Supply costs did increase 34% from $33.6 million to $44.8 million in the quarter, partly due to our anticipated opening of two more new hospitals in Q4 2025 as well as growth in overall volume and services. Despite the increase, our overall medical supply spend is actually lower by 3% year-to-date compared to the same period in 2024. We expect to see supply cost savings throughout 2025 as a result of our GPO and vendor realignment as previously stated in the third quarter 2024 earnings call. We're continuing to explore technology investments, including AI for patient check-ins, staffing optimization, provider note writing, and coding. Our clinical and operational teams remain focused on delivering high-quality care while supporting a sustainable revenue cycle. By integrating clinical excellence with strategic revenue management, we ensure that our patient-first mission translates into both exceptional outcomes and financial stability. I will now turn the call back to Vivian for Q&A. Thank you.

Thank you, Tom, Jon, Warren, and Mike, for those updates. We'll move over to Q&A. Operator, please provide instructions for our analysts.

Our first question comes from the line of Anthony Vendetti with Maxim.

I was wondering in terms of the restatement process, do you have a timeline for when you think you'll get the audited results and be able to file the amended '24 10-K and the first quarter '25 10-Q?

Yes, Anthony, I will speak. Thank you for the question. So we're working through it right now, right? Engagement has already begun in that process. And so I know we have, as I mentioned before, the 60 days to file the second quarter, which to do that, you've got to finish out 2024 and then make sure the first and second quarters of '25 are there. So we're working actively to try to get all of that done in that time period. And as things evolve and change, if that looks like it wouldn't happen for some reason, we will let everybody know. But our focus right now is all hands on deck to get that done, especially when our main focus, if you can talk about what that restatement is really for is mostly reclassifications of equity to debt and just making sure that everything else remains consistent. So that's where we're at right now. We're working hard in the 60 days. And then as things change, we'll definitely let everyone be made aware if it's going to go outside of that.

All right. Jon, that's helpful. I want to confirm the numbers you mentioned. You said 75% of the IDR awards have been collected, and in the second quarter, 62% or 64% of those awards were collected. I understand there’s a penalty for insurers who don’t pay as per the current legislation. Is there a way for them to appeal the arbitration award? Also, is there any other method to compel them to pay apart from the potential government penalty? Additionally, for revenue recognition, are you recognizing the full amount of the award or only the amount that has been paid?

I'll address your questions in reverse order. To recap what we've discussed, we have seen a consistent number of claims going through the independent fee resolution process. It appears that we are underpaid in many cases, with about 60% to 70% of the payments indicating this. This percentage reflects what is currently processed. When these claims go to arbitration, we have experienced a high success rate, similar to industry trends, with over 85% of submissions resulting in favorable outcomes for us. After winning the dispute, the next step is collection, which is gradually improving. The industry suggests we might achieve collection rates of 80% to 90%, but there will always be some contention with payers over the final percentage. So far, we have managed to receive over 75% of the determinations promptly, and we are focused on enhancing this further. From an accrual standpoint, we have been conservatively estimating revenue, and our current collections stand at around 75%. We are aiming for full collection as circumstances evolve. However, we have seen a steady increase in our collection rate, and we aspire to reach 100% in the long run. There are various strategies we employ, including continuous communication with CMS regarding any payment issues, as well as direct follow-ups with payers. Sometimes, these payers just need reminders to process payments quickly. It’s vital to note that there may always be friction in these interactions. We are also monitoring enforcement actions that might simplify this process. We pursue legal avenues where appropriate, but they often don’t yield immediate results. Our main tactic remains to collaborate closely with our third-party provider, Halo, and the payers to ensure timely payments. Tom may have additional insights, but this outlines our strategy.

Okay, if Tom doesn’t have anything to add, I have one last question for the team. Can you provide any updates on the new hospital openings? Is everything on track according to the outlined schedule? Also, regarding the mature hospitals, I understand that patient visits can fluctuate each quarter. Are there any internal strategies being implemented to ensure continued growth in patient visits for those mature hospitals? I’ll return to the queue afterward.

Yes, thank you for your question and for your support. To address your first inquiry regarding the opening schedule for this year, we initially planned to open three hospitals, but it appears that two will be definitely opening. The third one is uncertain and is entirely reliant on construction progress. We expect Sherman, Texas to likely open in October and Houston in November, while we're still trying to expedite the timeline for San Antonio, aiming for a potential opening in 2025, or early 2026 if delays occur. That outlines our current schedule. Additionally, in 2026, we anticipate opening four more hospitals, including in Jacksonville, West Little Rock, and Beach Blvd, along with another one later that year. Our pipeline is quite strong, and for 2027, we have four more planned, with preparations already underway for 2028. Regarding our mature hospitals, we continuously market to our patients and the surrounding community around the clock, aiming for higher patient volumes. As I mentioned previously, we are committed to retaining patients within the hospital once they arrive in the emergency room. This means focusing on observation or inpatient care rather than transferring patients to other facilities. We're seeing positive results in this effort. Although patient numbers in mature hospitals have only risen by about 0.5% from the previous quarter, the observations and admissions are increasing quarterly. This should reflect positively in the year-over-year financials since inpatient reimbursements are significantly higher than those for emergency room visits. Therefore, even if the patient increase seems modest, the year-over-year revenue growth is stronger.

Our next question comes from the line of Gene Mannheimer with Freedom Capital.

Looking at your preliminary results, it appears that the implied EBITDA margin for the quarter is around 30%, which is slightly lower than what we've observed in the previous quarters, despite a strong gross margin of 51%. I'm trying to understand the factors affecting EBITDA margins this quarter compared to the earlier quarters, Jon.

Yes, that's a great question, Gene. There are definitely additional supplier payments to consider. As we look towards potentially opening some of the new facilities later this year, we'll incur costs early in the first and second quarters, with more expected in the third quarter as we prepare for those openings. That will factor into the equation. Additionally, there have been some increased arbitration-related costs on a period-to-period basis, but nothing too significant affecting EBITDA. Regarding cash flow, we previously discussed the impact of accrued tax payments that built up at the end of last year. In the first six months, particularly the second quarter, we paid a substantial tax amount, nearly $50 million, which contributed to some cash drawdown. However, with strong cash collections and a positive trend, we're still very optimistic about that front.

That's great information. As I consider the revenue per visit, I appreciate you sharing the arbitration contribution for the quarter. If I exclude the IDR-related revenue from this quarter and the same quarter last year, can I say that revenue per visit increased by low single digits from an organic standpoint?

Yes, I think that's about right. As you consider this, it's likely true. Now that we have a longer time period to look at, particularly since starting the arbitration process, we have about a year's worth of data to review the overall reimbursement trends. The overall revenue divided by visits for this nearly 12-month span shows that it's just over $4,000, almost $4,200. People have often asked where we might settle, and that will depend on various factors including acuity. However, I believe we are beginning to get a clearer picture of what to expect moving forward. Your assumption seems accurate, and we will continue to closely monitor this as we progress. Thank you for your valuable insights, Gene.

Our next question comes from the line of Bradford Seagraves with Northbank Capital.

Just a couple of quick ones. One, we're halfway through Q3. Can you provide any commentary to the market on how Q3 to date is going specifically on kind of the free cash flow side?

Well, we haven't reported on the Q3, so I'll hold back a little bit, but I can tell you that what we've seen since the fourth quarter of '24, first quarter of '25, second quarter of '25 and what we've talked about in each of sort of these calls, I think you can see where we feel things are headed in that respect. And I think things have remained very, very consistent and very, very strong in relation to that is how I would answer that question.

Okay. And then also, are you going to be able to provide to the market, are you going to be able to publish unaudited financial statements for Q2? Because you mentioned the tax payment, but still would be curious to see the rest of the cash flow statement.

Yes. The answer is that anything from a quarter is unaudited, but I understand you're looking for specific information. We'll explore how much more we can share. We wanted to be mindful of our ongoing review process and consider the 2024 outlook as well. We believe that the information we have should remain stable and provide some clarity. We'll see what additional details we can offer. However, the main point we wanted to convey is that most of what relates to the review delay involves noncash items, particularly regarding stock-based compensation expenses. Overall, we have not observed any significant changes in our operations.

We have reached the end of the question-and-answer session. Ms. Sanders, I'd like to turn the floor back over to you for closing comments.

Thank you all for your valuable questions and answers. For those joining us today, if you have additional questions, email us at [email protected], and we'll respond promptly. On behalf of the Nutex management team, thank you for joining our Q2 2025 company update call. We've covered growth, strategy, clinical quality, and our vision, and we appreciate your interest. A recording of this call will be available on our website for a limited time. Take care, and we look forward to keeping you updated.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.