NUTX 10-Q
Nutex Health Inc. (NUTX)
10-Q
2025-11-19
For: 2025-09-30
View Original
Added on
April 10, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2025
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
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip code) | ||||
(713 ) 660-0557
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
| ☒ | Smaller reporting company | ||||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 10, 2025, the registrant had 7,071,916 shares of common stock, $0.001 par value, outstanding.
NUTEX HEALTH INC.
FORM 10-Q
TABLE OF CONTENTS
INTRODUCTORY NOTE
Unless the context dictates otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us,” “our,” “Nutex” and similar words are references to Nutex Health Inc., a Delaware corporation, and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”).
The Company effected two reverse stock splits of its common stock during 2024: a 1-for-15 reverse stock split effective April 9, 2024 and a 1-for-10 reverse stock split effective July 2, 2024 (the “2024 Reverse Stock Splits”). Unless otherwise indicated, all authorized, issued, and outstanding stock and per share amounts referred to in this Quarterly Report on Form 10-Q have been adjusted to reflect the 2024 Reverse Stock Splits for all prior periods presented. Proportionate adjustments for the 2024 Reverse Stock Splits were made to the exercise prices and number of shares issuable under the Company’s equity incentive plans, and the number of shares underlying outstanding equity awards, as applicable. See Note 1 for information and disclosures relating to adjustments related to the 2024 Reverse Stock Splits.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, changes in laws or regulations applicable to our operations, any statements about our business, financial condition, operating results, plans, objectives, expectations and intentions, any guidance on, or projections of, earnings, revenue or other financial items, or otherwise, and our future liquidity, including cash flows; any statements of any plans, strategies, and objectives of management for future operations, such as the material opportunities that we believe exist for our Company; any statements concerning proposed services, developments, mergers or acquisitions; or strategic transactions; any statements regarding management’s view of future expectations and prospects for us; any statements about prospective adoption of new accounting standards or effects of changes in accounting standards; any statements regarding future economic conditions or performance; any statements of belief; any statements of assumptions underlying any of the foregoing; and other statements that are not historical facts. Forward-looking statements may be identified by the use of forward-looking terms such as “anticipate,” “could,” “can,” “may,” “might,” “potential,” “predict,” “should,” “estimate,” “expect,” “project,” “believe,” “think,” “plan,” “envision,” “intend,” “continue,” “target,” “seek,” “contemplate,” “budgeted,” “will,” “would” and the negative of such terms, other variations on such terms or other similar or comparable words, phrases or terminology. These forward-looking statements present our estimates and assumptions only as of the date of this Quarterly Report on Form 10-Q and are subject to change.
Forward-looking statements involve risks and uncertainties and are based on the current beliefs, expectations, and certain assumptions of management. Some or all of such beliefs, expectations, and assumptions may not materialize or may vary significantly from actual results. Such statements are qualified by important economic, competitive, governmental, and technological factors that could cause our business, strategy, or actual results or events to differ materially from those in our forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under, but not limited to, the heading “Item 1A. Risk Factors” included in this Quarterly Report, the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, and in the Annual Report of Nutex Health Inc. on Form 10-K/A for the year ended December 31, 2024 and other filings of the Company with the United States Securities and Exchange Commission. Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change, and significant risks and uncertainties that could cause actual conditions, outcomes and results to differ materially from those indicated by such statements. Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
4
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (In thousands, except share and per share amounts) | September 30, 2025 | December 31, 2024 | ||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted short-term investments | ||||||||||||||
| Accounts receivable | ||||||||||||||
| Accounts receivable - related parties | ||||||||||||||
| Inventories | ||||||||||||||
| Income tax receivable | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Financing lease right-of-use assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill, net | ||||||||||||||
| Deferred tax assets | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accounts payable - related parties | ||||||||||||||
| Lines of credit | ||||||||||||||
| Current portion of long-term debt | ||||||||||||||
| Operating lease liabilities, current portion | ||||||||||||||
| Financing lease liabilities, current portion | ||||||||||||||
| Accrued arbitration expenses | ||||||||||||||
| Accrued income tax expense | ||||||||||||||
| Accrued stock-based compensation | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt, net | ||||||||||||||
| Operating lease liabilities, net | ||||||||||||||
| Financing lease liabilities, net | ||||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||
| Equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Nutex Health Inc. equity | ||||||||||||||
| Noncontrolling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
5
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In thousands, except share and per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | ||||||||||||||||||||||
| Population health management division | ||||||||||||||||||||||||||
| Total revenue | ||||||||||||||||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||||||||
| Payroll | ||||||||||||||||||||||||||
| Contract services | ||||||||||||||||||||||||||
| Medical supplies | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total operating costs and expenses | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Corporate and other costs: | ||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||
| Impairment of assets | ||||||||||||||||||||||||||
| Impairment of goodwill | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Total corporate and other costs | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Loss on warrant liability | ||||||||||||||||||||||||||
| Other (income) expense | ( | |||||||||||||||||||||||||
| Income (loss) before taxes | ( | |||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income (loss) | ( | ( | ||||||||||||||||||||||||
| Less: net income attributable to noncontrolling interests | ||||||||||||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Earnings (loss) per common share | ||||||||||||||||||||||||||
| Basic | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
| Diluted | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
6
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||
| (In thousands, except share data) | Shares | Amount | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issuance | — | — | — | ||||||||||||||||||||||||||||||||
| Debt conversion to common stock | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Reverse stock split adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock received in sale of business | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Common stock issued for Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued for acquisition | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Reverse stock split adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | |||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | |||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued for acquisition | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Warrant exercises | — | — | — | ||||||||||||||||||||||||||||||||
| Contributions | — | — | — | ||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
(Continued)
See accompanying notes to the unaudited condensed consolidated financial statements.
7
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||
| (In thousands, except share data) | Shares | Amount | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Asset acquisition noncontrolling interest | — | — | — | — | |||||||||||||||||||||||||||||||
| Debt conversion to common stock | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Contributions | — | — | — | ||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | |||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for Employee Stock Purchase Plan | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued for acquisition | — | — | — | ||||||||||||||||||||||||||||||||
| Asset acquisition noncontrolling interest | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | |||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at September 30,2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
8
NUTEX HEALTH INC.
9
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine Months Ended September 30, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | $ | ( | |||||||||||
| Adjustment to reconcile net income to net cash from operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Loss on warrant liability | ||||||||||||||
| Impairment of assets | ||||||||||||||
| Impairment of goodwill | ||||||||||||||
| Derecognition of goodwill | ||||||||||||||
| Stock-based compensation expense | ||||||||||||||
| Changes to deferred taxes | ( | |||||||||||||
| Debt accretion expense | ||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| (Increase)/Decrease in Accounts receivable | ( | ( | ||||||||||||
| (Increase)/Decrease in Accounts receivable - related party | ( | |||||||||||||
| (Increase)/Decrease in Inventories | ( | |||||||||||||
| (Increase)/Decrease in Income tax receivable | ( | |||||||||||||
| (Increase)/Decrease in Prepaid expenses and other current assets | ( | ( | ||||||||||||
| (Increase)/Decrease in Operating right-of-use assets | ||||||||||||||
| Increase/(Decrease) in Accounts payable | ( | |||||||||||||
| Increase/(Decrease) in Accounts payable - related party | ( | |||||||||||||
| Increase/(Decrease) in Operating lease liabilities | ( | ( | ||||||||||||
| Increase/(Decrease) in Accrued arbitration expenses | ||||||||||||||
| Increase/(Decrease) in Accrued income tax expense | ( | |||||||||||||
| Increase/(Decrease) in Accrued expenses and other current liabilities | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Acquisitions of property and equipment | ( | ( | ||||||||||||
| Proceeds from restricted short-term investment | ||||||||||||||
| Cash related to sale of business | ( | |||||||||||||
| Cash related to asset acquisition | ( | |||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from lines of credit | ||||||||||||||
| Proceeds from notes payable | ||||||||||||||
| Repayments of lines of credit | ( | ( | ||||||||||||
| Repayments of notes payable | ( | ( | ||||||||||||
| Repayments of finance leases | ( | ( | ||||||||||||
| Proceeds from common stock issuance, net issuance costs | ||||||||||||||
| Proceeds from exercise of warrants | ||||||||||||||
| Members' contributions | ||||||||||||||
| Members' distributions | ( | ( | ||||||||||||
| Net cash provided by (used in) financing activities | ( | |||||||||||||
| Net increase in cash and cash equivalents | ||||||||||||||
| Cash and cash equivalents - beginning of the period | ||||||||||||||
| Cash and cash equivalents - end of the period | $ | $ | ||||||||||||
10
See accompanying notes to the unaudited condensed consolidated financial statements.
11
NUTEX HEALTH INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 – Organization and Operations
Nutex Health Inc. (“Nutex Health” or the “Company”), is a physician-led, healthcare services and operations company with 24 hospital facilities in 11 states (hospital division), and a primary care-centric, risk-bearing population health management division. The Company's hospital division implements and operates different innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments. The population health management division owns and operates provider networks such as independent physician associations (“IPAs”).
The Company employs approximately 880 full-time employees, contracts 255 doctors at our facilities and partners with over 2,100 physicians within our networks as of September 30, 2025. The Company's corporate headquarters is based in Houston, Texas and we were incorporated on April 13, 2000 in the state of Delaware.
Merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc. On April 1, 2022, the merger (the “Merger”) of Nutex Health Holdco LLC and Clinigence Holdings, Inc. (“Clinigence”) was completed pursuant to the Agreement and Plan of Merger (the “Merger Agreement”) entered into on November 23, 2021 between Clinigence, Nutex Acquisition LLC (a Delaware limited liability company and wholly-owned subsidiary of Clinigence), Nutex Health, Micro Hospital Holding LLC (solely for the purposes of certain sections of the Merger Agreement), Nutex Health Holdco LLC and Thomas Vo, M.D., solely in his capacity as the representative of the equity holders of Nutex Health Holdco LLC.
In connection with the Merger Agreement, Nutex Health Holdco LLC entered into certain Contribution Agreements with holders of equity interests including Dr. Vo, our Chairman and CEO (“Nutex Owners”), of subsidiaries and affiliates (the “Nutex Subsidiaries”), including Nutex Subsidiaries categorized as Under Construction Hospitals, pursuant to which such Nutex Owners agreed to contribute certain equity interests in the Nutex Subsidiaries to Nutex Health Holdco LLC in exchange for specified equity interests in Nutex Health Holdco LLC (collectively, the “Contribution Transaction”). Nutex Owners, having ownership interests representing approximately 84 % of the agreed upon aggregate equity value of the Nutex Subsidiaries, agreed to contribute all or a portion of their equity interests, as applicable.
Refer to Note 11 – Stock-based Compensation for discussion of additional issuances of stock for Under Construction Hospitals, an obligation within the Contribution Agreements.
Pursuant to the Merger Agreement, and based on a valuation of $2.80 per share, each unit representing an equity interest in Nutex Health Holdco LLC that was issued and outstanding immediately prior to the effective time of the Merger (but following the Contribution Transaction) was converted into the right to receive 3.571428575 shares of Clinigence common stock, resulting in an aggregate issuance of 592,791,712 shares (3,951,944 after the 2024 Reverse Stock Splits) of Clinigence common stock.
After completing the merger, Clinigence was renamed Nutex Health Inc.
2024 Reverse Stock Splits.
1:10 Reverse stock split. The Company’s Board of Directors (the “Board”) determined to effect a reverse stock split of the common stock at a 1-for-10 ratio (the “1:10 Reverse Stock Split”) effective as of 11:59 pm Eastern time on July 2, 2024. The Company’s stockholders, at the annual meeting on June 17, 2024, had approved a reverse stock split within a range of 1:2 and 1:16 to be effected within one year of approval at the discretion of the Board. This 1:10 Reverse Stock Split is in addition to the Company’s previous 1:15 reverse stock split effective as of 11:59 pm Eastern time on April 9, 2024 (together, the “2024 Reverse Stock Splits”). The Company’s common stock began trading on The Nasdaq Stock Market (the “NASDAQ”) on a post-1:10 Reverse Stock Split basis under the Company’s existing trading symbol “NUTX” at the open of the market on July 3, 2024. The 2024 Reverse Stock Splits were implemented for the purpose of regaining compliance with the minimum bid price requirement for continued listing of the Company’s common stock on the NASDAQ.
As a result of the 2024 Reverse Stock Splits, the Company had 5,511,452 shares of common stock outstanding as of December 31, 2024, inclusive of whole shares issued for fractional shares, and the number of authorized shares of common stock remained at 950,000,000 . The Company had 6,905,262 shares of common stock outstanding as of September 30, 2025.
12
Unless otherwise indicated, all authorized, issued and outstanding stock and per share amounts contained in the accompanying unaudited condensed consolidated financial statements have been adjusted to reflect the 2024 Reverse Stock Splits for all prior periods presented. Proportionate adjustments for the 2024 Reverse Stock Splits were made to the exercise prices and number of shares issuable under the Company’s equity incentive plans, and the number of shares underlying outstanding equity awards, as applicable. The impacts of the 2024 Reverse Stock Splits were applied retroactively for all periods presented in accordance with applicable guidance.
Note 2 - Summary of Significant Accounting Policies
Basis of presentation. These unaudited condensed financial statements present the Company’s consolidated financial condition and results of operations including those of majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary.
The hospital division includes the Company’s healthcare billing and collections organization and hospital entities. In addition, the Company has financial and operating relationships with multiple professional entities (the “Physician LLCs”) and real estate entities (the “Real Estate Entities”). The Physician LLCs employ the physicians who provide services at the Company’s hospitals. These Physician LLCs are consolidated by the Company as VIEs because they do not have sufficient equity at risk to finance their activities independently. The Company is considered the primary beneficiary of these entities because (i) it has the power to direct the activities that most significantly affect their economic performance through its contractual and operational oversight, and (ii) it has the obligation to absorb losses and the right to receive benefits that could be significant, as evidenced by the Company’s historical practice of providing financial support during periods of cash shortfall and receiving the benefit of services.
The Real Estate Entities own the land and buildings used by the Company’s hospital entities and lease these facilities to the Company. These entities have mortgage loans payable to third parties which are collateralized by the land and buildings. The Company consolidates certain Real Estate Entities as VIEs when the Company’s hospital entities are guarantors or co-borrowers under the related mortgage loans. In such cases, the Company is considered the primary beneficiary because it has the power to direct the entities’ most significant activities and has the obligation to absorb losses and the right to receive benefits that could be significant to the Real Estate Entities.
While the Company does not hold any direct equity ownership in the consolidated Physician LLCs or certain Real Estate Entities, it is deemed to have an indirect economic interest through its contractual relationships with intermediary entities such as ER LLCs, which provide operational and functional support to the VIEs. As a result, 100 % of the equity in these VIEs is reflected as noncontrolling interest in the Company’s unaudited condensed consolidated balance sheets and statements of operations. Certain of the Physician LLCs and Real Estate Entities are owned in part and, in some cases, controlled by related parties, including members of the Company’s executive management team.
The population health management division includes our management services organization. Additionally, Associated Hispanic Physicians of So. California (“AHISP”), an independent physician association (“IPA”) entity not owned by the Company, is consolidated as a VIE of the Company’s wholly-owned subsidiary AHP Health Management Services (“AHP”). AHP is deemed the primary beneficiary of AHISP because it has the power to direct the significant activities of AHISP through a comprehensive management services agreement and has the right to receive substantially all of the economic benefits from its operations.
All significant intercompany balances and transactions have been eliminated in consolidation.
Interim financial statements. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all material adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods presented. These interim financial statements should be read together with the consolidated financial statements and notes thereto included in our audited financial statements for the year ended December 31, 2024.
Use of estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include (i) estimates of net revenue and accounts receivable, (ii) fair value of acquired assets and liabilities in business combinations, (iii) impairment of long-lived assets and goodwill, (iv) estimate of valuation allowance against deferred taxes, (v) fair value of non-employee stock-based compensation and (vi) Black-Scholes option model to compute
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fair value of warrant liability. Actual results could differ from those estimates. During the year ended December 31, 2024, we effected a change in estimate for estimates of net revenue and accounts receivable.
Segment reporting. A public company is required to report descriptive information about its reportable operating segments. Operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Aggregation of similar operating segments into a single reportable operating segment is permitted if the businesses have similar economic characteristics and meet established criteria. The Company operates three reportable segments – the hospital division, the population health management division and the real estate division. The real estate division is comprised of the Real Estate Entities. Refer to Note 16 – Segment Information for information on the Company’s segments.
Recent accounting pronouncements – issued, not yet adopted
In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. The update is effective for annual periods beginning after December 15, 2024. We will adopt ASU 2023-09 in our Annual Report on Form 10-K for the year ending December 31, 2025. Adoption will impact disclosures only and will not affect our consolidated financial statements. We expect to apply the guidance prospectively and will add the required annual disclosures beginning with our 2025 year-end financial statements.
In November 2024, the FASB issued ASU 2024-03 – Income Statement – Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. The Company is currently evaluating the impact of this update.
Note 3 – Revenue
The Company disaggregates revenue from contracts with customers into types of services or products, consistent with the Company's reportable segments, as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Hospital division revenue | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division revenue | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Hospital division revenue. We receive payment for facility services rendered by us from federal agencies, private insurance carriers, and patients. The Physician LLCs receive payment for doctor services from these same sources. On average, greater than 99 % of our net patient service revenue is paid by insurers and other non-patient third parties. The remaining revenue is paid by our patients in the form of copays, deductibles and self-payment. We generally operate as an out-of-network provider and, as such, do not have negotiated reimbursement rates with insurance companies.
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The following tables present the allocation of the estimated transaction price with the patient among the primary patient classification of insurance coverage:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Insurance | % | % | % | % | ||||||||||||||||||||||
| Self pay | % | % | % | % | ||||||||||||||||||||||
| Workers compensation | % | % | % | % | ||||||||||||||||||||||
| Medicare/Medicaid | % | % | % | % | ||||||||||||||||||||||
| Total | % | % | % | % | ||||||||||||||||||||||
The No Surprises Act (“NSA”) is a federal law that took effect January 1, 2022, to protect consumers from most instances of “surprise” balance billing. With respect to the Company, the NSA limits the amount an insured patient will pay for emergency services furnished by an out-of-network provider. The NSA addresses the payment of these out-of-network providers by group health plans or health insurance issuers (collectively, “insurers”). In particular, the NSA requires insurers to reimburse out-of-network providers at a statutorily calculated “out-of-network rate.” In states without an all-payor model agreement or specified state law, the out-of-network rate is either the amount agreed to by the insurer and the out-of-network provider or an amount determined through an independent dispute resolution (“IDR”) process.
Under the NSA, insurers must issue an initial payment or notice of denial of payment to a provider within thirty days after the provider submits a bill for an out-of-network service. If the provider disagrees with the insurer’s determination, the provider may initiate a thirty-business day period of open negotiation with the insurer over the claim. If the parties cannot resolve the dispute through negotiation, the parties may then proceed to the IDR process.
On July 1, 2024, we engaged with a third-party IDR vendor, HaloMD, to further support all our out of network claims and determine which claims would be beneficial to arbitrate (see Management's Arbitration process discussion under Part I. Item 2). The IDR process can take up to to five months to receive payments. To facilitate the dispute arbitration process, the Company incurred fees payable to the Centers for Medicare and Medicaid Services (“CMS”), the organizations that arbitrate the payment amount between the plan and providers known as independent dispute resolution entities (“IDRE”), and commission and fees to the third-party IDR vendor. IDRE fee payments represent refundable payments if arbitrations are successful. Therefore, these payments are reported as prepaid and other current assets in the consolidated balance sheets. The unsuccessful portion of the IDRE fee payments is written off to contract services expense in the consolidated statements of operations. Prepaid expenses related to IDRE fees was $11.8 million as of September 30, 2025. Accounts payable to the third-party IDR vendor was $34.7 million as of September 30, 2025. Total accrued arbitration expenses were $64.3 million as of September 30, 2025.
Population health management division revenue. We recognize revenue for capitation and management fees for services to IPAs and physician groups. Capitation revenue consists primarily of capitated fees for medical services provided by physician-owned entities we consolidate as VIEs. Capitated arrangements are made directly with various managed care providers including HMOs. Capitation revenues are typically prepaid monthly to us based on the number of enrollees selecting us as their healthcare provider. Capitation is a fixed payment amount per patient per unit of time paid in advance for the delivery of health care services, whereby the service providers are generally liable for excess medical costs. We receive management fees that are based on gross capitation revenues of the IPAs or physician groups we manage. Revenue is recognized and payment is received monthly for our services.
Note 4 - Acquisitions
May 2025 Acquisition of controlling interest and consolidation
On May 2, 2025, the Company acquired a 51 % membership interest in an Indiana-based limited liability company (“May 2025 Acquiree”) for $2.3 million in cash. The Company determined that the May 2025 Acquiree does not meet the definition of a business under ASC 805-10-55-5A. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50. The identifiable assets acquired and liabilities assumed were recognized based on their relative fair values.
The Company concluded that the May 2025 Acquiree is a voting interest entity and that it has a controlling financial interest based on its majority voting rights and operational control. As such, the Company consolidated the May 2025 Acquiree under the voting interest model in accordance with ASC 810-10 as of the acquisition date.
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As part of the transaction, a noncontrolling interest representing 49 % ownership in May 2025 Acquiree was recognized and is accounted for at cost. The noncontrolling interest does not have substantive participating rights.
The following table summarizes the allocation of the purchase consideration: is the net amount of May 2025 Acquiree's identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):
| Cash and cash equivalents | $ | |||||||
| Building and improvements | ||||||||
| Land | ||||||||
| Note payable assumed | ( | |||||||
| Net identifiable assets acquired | $ | |||||||
The following is a summary of the total consideration paid and the noncontrolling interest at cost (in thousands):
| Cash consideration transferred | ||||||||
Fair value of noncontrolling interest ( | ||||||||
| Total consideration transferred | $ | |||||||
Prior to the acquisition, a wholly owned subsidiary of the Company was the lessee under a financing lease with May 2025 Acquiree. Upon acquisition, the lease arrangement became an intercompany transaction within the consolidated group. Accordingly, the right-of-use asset and corresponding lease liability previously recognized under ASC 842 were eliminated in consolidation. For purposes of consolidation and in accordance with ASC 842, the effect of elimination is adjusted against the acquired asset's carrying amount determined as follows (in thousands):
| Building and improvements | ||||||||
| Lease derecognition upon consolidation | ( | |||||||
| Adjusted carrying value of building and improvements | $ | |||||||
No goodwill was recognized in connection with the acquisition, consistent with the guidance in ASC 805. The operating results of May 2025 Acquiree have been included in the Company’s consolidated financial statements beginning on the acquisition date.
September 2025 Asset Acquisition
On September 19, 2025, the Company, through its consolidated subsidiary acquired certain assets and assumed specific liabilities of a non-operational hospital facility located in St. Louis, Missouri ("September 2025 Acquiree") pursuant to an asset purchase agreement.
The Company determined September 2025 Acquiree does not meet the definition of a business under ASC 805-10-55-5A. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50. The identifiable assets acquired and liabilities assumed were recognized based on their relative fair values.
In exchange for the assets acquired, the Company agreed to: (i) $5.8 million of seller note, (ii) real property and equipment lease obligations, (iii) make a deferred payment of $1.0 million over 10 years, and (iv) issue a 15 % membership interest in the consolidated subsidiary over a -year period. The equity interest vests based on operational milestones, and is accounted for as purchase consideration rather than compensation, as no continuing services are required of the seller.
The following table summarizes the preliminary allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed (in thousands):
| Furniture and fixtures | $ | |||||||
| Intangible asset - Certificate of Need | ||||||||
| Total identifiable assets acquired | $ | |||||||
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The following table summarizes the total consideration for the acquisition (in thousands):
| Seller note | ||||||||
| Deferred payment obligation | ||||||||
| Equity interest in September 2025 Acquiree issued to seller | ||||||||
| Total purchase consideration | $ | |||||||
As a result of the transaction, the consolidated subsidiary was determined to be a VIE under ASC 810 due to insufficient equity at risk and its reliance on guarantees and financial support from the Company. The Company is the primary beneficiary of the consolidated subsidiary and consolidates its financial results. See Note 18 - Variable interest entities for additional information.
Note 5 - Property and Equipment, net
The principal categories of property and equipment, net are summarized as follows (in thousands):
| Useful Life (years) | September 30, | December 31, | |||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Buildings and improvements | $ | $ | |||||||||||||||
| Land | — | ||||||||||||||||
| Leasehold improvements | |||||||||||||||||
| Construction in progress | — | ||||||||||||||||
| Medical equipment | |||||||||||||||||
| Office furniture and equipment | |||||||||||||||||
| Computer hardware and software | |||||||||||||||||
| Vehicles | |||||||||||||||||
| Signage | |||||||||||||||||
| Total cost | |||||||||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||||||||
| Total property and equipment, net | $ | $ | |||||||||||||||
We consolidate two Real Estate Entities in the Company. We acquired one Real Estate Entity in the second quarter of 2025. Two of the three Real Estate Entities are VIEs. Refer to Note 18 – Variable Interest Entities.
Depreciation and amortization of property and equipment for the three months ended September 30, 2025 and 2024 totaled $1.7 million and $1.8 million, respectively, and for the nine months ended September 30, 2025 and 2024 totaled $5.1 million and $5.0 million, respectively.
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Note 6 – Intangible Assets and Goodwill
Intangible Assets. The following tables provide detail of the Company’s intangible assets (in thousands):
| As of September 30, 2025 | Weighted Average Useful Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||
| Amortizing intangible assets: | ||||||||||||||||||||||||||
| Member relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Trademarks | ( | |||||||||||||||||||||||||
| Total amortizing intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
| Indefinite-lived intangible asset - Certificate of Need | — | |||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||
| Amortizing intangible assets: | ||||||||||||||||||||||||||
| Member relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Trademarks | ( | |||||||||||||||||||||||||
| Total | $ | $ | ( | $ | ||||||||||||||||||||||
Member relationships and trademarks are associated with existing entities in the population health management division.
During the three months ended September 30, 2025, the Company acquired an indefinite-lived intangible asset consisting of a state-issued Certificate of Need ("CON") associated with the operation of one of its hospital facilities. The Company determined that the CON has an indefinite useful life because it is renewable at minimal cost and is expected to contribute to cash flows indefinitely. Accordingly, the asset is not amortized, but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. As of September 30, 2025, the carrying amount of the indefinite-lived intangible asset was $7.0 million.
Amortization of intangible assets for the three months ended September 30, 2025 and 2024 totaled $0.3 million and $0.3 million, respectively, and for the nine months ended September 30, 2025 and 2024 totaled $1.0 million and $1.1 million, respectively.
As of September 30, 2025, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows (in thousands):
| Year ended December 31, | Amount | |||||||
| Remainder of 2025 | $ | |||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
| Total Intangible Assets | $ | |||||||
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Goodwill. The carrying amount of goodwill by operating segment is as follows (in thousands):
| Hospital Division | Population Health Management Division | Total | |||||||||||||||
| Balance as of September 30, 2025 | |||||||||||||||||
| Goodwill | |||||||||||||||||
| Accumulated impairment losses | ( | ( | ( | ||||||||||||||
| $ | $ | $ | |||||||||||||||
Note 7 – Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Accrued wages and benefits | $ | $ | |||||||||
| Accrued supplier expenses | |||||||||||
| Accrued medical claims | |||||||||||
| Accrued other taxes | |||||||||||
| Accrued other | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
Note 8 – Debt
The Company’s outstanding debt is shown in the following table (dollars in thousands):
| Maturity Dates | Interest Rates | September 30, | December 31, | ||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Term loans secured by all assets | 04/2026 - 09/2035 | $ | $ | ||||||||||||||||||||
| Term loans secured by property and equipment | 11/2025 - 1/2030 | ||||||||||||||||||||||
| Term loan secured by deposits | 04/2025 | ||||||||||||||||||||||
| Line of credit secured by all assets | 10/2025 - 01/2026 | ||||||||||||||||||||||
| Term loans of consolidated Real Estate Entities | 05/2028 - 03/2037 | ||||||||||||||||||||||
| Seller note | 09/2035 | ||||||||||||||||||||||
| Deferred payment | 09/2035 | ||||||||||||||||||||||
| Unsecured convertible term notes | 10/2025 | ||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| Less: unamortized issuance costs and discount | |||||||||||||||||||||||
| Less: short-term lines of credit | |||||||||||||||||||||||
| Less: current portion of long-term debt | |||||||||||||||||||||||
| Total long-term debt | $ | $ | |||||||||||||||||||||
Term loans and lines of credit. We have entered into private debt arrangements with banking institutions for the purchase of equipment and to provide working capital and liquidity through cash and lines of credit. Unless otherwise delineated above, these debt arrangements are obligations of Nutex and/or its wholly-owned subsidiaries. Consolidated Real Estate Entities have entered into private debt arrangements with banking institutions for purposes of purchasing land, constructing new emergency room
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facilities and building out leasehold improvements which are leased to our hospital entities. Nutex is a guarantor or, in limited cases, a co-borrower on the debt arrangements of the Real Estate Entities for the periods shown.
At September 30, 2025, the Company was not subject to any financial covenants under its outstanding debt arrangements and we had remaining availability of $5.9 million under outstanding lines of credit.
In connection with the September 2025 asset acquisition, the Company, through its consolidated subsidiary, issued a seller note with a fair value of approximately $5.8 million. The note bears interest at 8 % per annum and is payable over 10 years, with the first principal and interest payment deferred for 12 months following the closing date. The seller note was issued as consideration for the acquired assets, which primarily included a certificate of need with a fair value of $7.0 million. The note represents long-term financing associated with the acquisition and is classified within long-term debt on the consolidated balance sheet.
As part of the same transaction, the Company also agreed to make a deferred cash payment of $1.0 million, which was recognized at its present value at a 10 % discount rate. The deferred payment is payable in installments over 10 years, with the first payment due 19 months after the closing date of September 19, 2025. This obligation was included as part of the total purchase consideration and is reflected within long-term debt in the accompanying consolidated financial statements.
September 2023 Convertible Debt Issuance.
From September 2023 to December 2023, the Company conducted a private offering of convertible notes (“Unsecured Convertible Term Notes”) and six-year warrants (“Warrants”) to accredited investors (the “Holders”) as defined in Rule 501 under the 1933 Act and issued Unsecured Convertible Term Notes convertible into an aggregate of 89,751 shares (13,462,500 prior to the 2024 Reverse Stock Splits) of common stock at a conversion price of $60.00 per share ($0.40 prior to the 2024 Reverse Stock Splits) and Warrants to purchase an aggregate of 44,875 shares of common stock (6,731,250 prior to the 2024 Reverse Stock Splits) at an exercise price of $60.00 per share ($0.40 prior to the 2024 Reverse Stock Splits). We also issued Warrants for the purchase of 26,925 shares (4,038,750 prior to the 2024 Reverse Stock Splits) to the placement agent. The Unsecured Convertible Term Notes mature on October 31, 2025 and the Warrants expire on December 31, 2029.
On March 26, 2024, the Company and the Holders agreed to amend the conversion price of the Unsecured Convertible Term Notes and exercise price of the Warrants to $30.00 each ($0.20 prior to the 2024 Reverse Stock Splits), resulting in the Unsecured Convertible Term Notes being convertible into 179,500 shares of common stock (26,925,000 prior to the 2024 Reverse Stock Splits), the Warrants exercisable for 89,750 shares of common stock (13,462,500 prior to the 2024 Reverse Stock Splits) and the placement agent Warrants exercisable for 53,850 shares of common stock (8,077,500 prior to the 2024 Reverse Stock Splits).
The Unsecured Convertible Term Notes bear an annual interest rate of 8 % if paid in cash or an annual interest rate of 10 % if paid in the form of common stock. The payment of interest in the form of common stock is at the discretion of the Company. When paid in common stock, the number of shares is equal to the quotient of the total accrued interest due divided by the last reported sale price of the Company’s common stock on the last complete trading day of such quarter. The Holders have the option, at any time, to convert all or any portion of the unpaid principal and interest outstanding in common stock at the conversion price of $30.00 per share. If the Company fails to pay the outstanding principal amount and all accrued interest within 30 days of the maturity date, the interest rate payable is adjusted to 12 %.
The Company appointed Emerson Equity LLC as placement agent for the September 2023 Private Offering. Per the Placement Agent Agreement, the Company agrees to pay (i) a cash commission equal to 10 % of the gross proceeds and (ii) warrants to purchase a number of common stock equal to 20 % of the total number of shares issuable upon conversion or exercise of the Unsecured Convertible Term Notes and Warrants, as applicable. For the three and nine months ended September 30, 2025, no 0.5 million of the Unsecured Convertible Term Notes converted to 17,874 shares based on the terms noted above.
The net carrying amount of the Unsecured Convertible Term Notes was $4.8 million and $4.5 million as of September 30, 2025 and December 31, 2024, respectively, and the weighted average effective interest rate on the convertible debt was 21.5
The Unsecured Convertible Term Notes interest expense was $0.3 million for the three months ended September 30, 2025, comprising $0.2 million in amortization expense and $0.1 million in accrued interest expense. For the nine months ended September 30, 2025 interest expense was $1.0 million, comprising $0.7 million in amortization expense and $0.3 million in accrued interest expense. For the three months ended September 30, 2024, interest expense was $0.3 million, comprising of $0.2 million in amortization expense and $0.1 million in accrued interest expense. For the nine months ended September 30, 2024,
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interest expense was $1.0 million, comprising of $0.7 million in amortization expense and $0.3 million in accrued interest expense.
Note 9 – Leases
We have entered into hospital property, office and equipment rental agreements with various lessors including related parties. The following tables disclose information about our leases of property and equipment (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | $ | |||||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||||||||
| Total finance lease cost | $ | $ | $ | $ | |||||||||||||||||||
Note 10 – Commitments and Contingencies
Litigation. The Company, its consolidated subsidiaries or VIEs may be named in various claims and legal actions in the normal course of business. Based upon counsel and management’s opinion, outside of the items listed below, the outcome of such matters is not expected to have a material adverse effect on the unaudited condensed consolidated financial statements.
Please read Part II - Item 1. Legal Proceedings.
Note 11 – Stock-based Compensation
In 2023, the stockholders of the Company approved the Amended and Restated Nutex Health Inc. 2023 Equity Incentive Plan (the “2023 Plan”), providing a total of 73,426 shares of Common Stock (11,013,943 prior to the 2024 Reverse Stock Splits) for issuance. Awards granted under the 2023 Plan may be incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units or performance shares. The awards are granted at an exercise price equal to the fair market value on the date of grant. The 2023 Plan is subject to annual increases on January 1st of each calendar year through January 1, 2033 of up to 1 % of the issued and outstanding shares of the Company's common stock on the final day of the preceding calendar year, at the discretion of the Compensation Committee of the Board. During the second quarter of 2024, the number of shares to be issued under the 2023 Plan increased to 118,563 shares, most of which were issued as restricted stock units in June 2024, as discussed below. During the first quarter of 2025, the number of shares to be issued under the 2023 Plan increased to 55,115 shares, most of which were issued as restricted stock units in 2025, as discussed below. On July 14, 2025, stockholders of the Company approved an amendment to the 2023 Plan to increase the number of shares available for issuance under the Plan by 1,100,000 over the 10 year term of the Plan and to allow the number of shares available to automatically increase on January 1st of each calendar year through January 1, 2033 in an amount equal to 5 % of the number of outstanding shares at December 31 of the previous fiscal year, provided that the Board may decide that there shall be no or lesser increase.
Total stock-based compensation expense for the three months ended September 30, 2025 and 2024 was $13.2 million and $2.0 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $119.6 million and $2.0 million, respectively. Stock-based compensation expense includes amounts recognized for awards granted to employees for services rendered and non-employee arrangements, specifically the obligations for under-construction and ramping hospitals (the “Additional Merger Shares”).
For the three and nine months ended September 30, 2025, approximately 99.5 13.2 million and $119.6 million, respectively, are due to the obligations for under-construction and ramping hospitals, noted below.
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Obligations for under-construction and ramping hospitals. Under the terms of the Contribution Agreements, Nutex Owners of the Ramping and Under Construction Hospitals (as determined on April 1, 2022) are eligible to receive a one-time additional issuance of Company common stock.
•With respect to ramping hospitals that were acquired before the Merger, 24 months after the opening date (the “Determination Date”) of the applicable ramping hospital, such owner is eligible to receive such owner’s pro rata share of a number of shares of Company common stock equal to (i) the trailing twelve months earnings before interest, taxes, depreciation and amortization on the respective Determination Date, multiplied by (ii) 10 , (iii) minus the initial equity value received at the closing of the Merger, and (iv) minus such owner’s pro rata share of the aggregate debt of the applicable ramping hospital outstanding as of the closing of the Merger. The number of additional shares to be issued will be determined based on the greater of (a) the price of the Company’s common stock at the time of determination or (b) $2.80 ($420.00 after the 2024 Reverse Stock Splits), as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to the Company’s common stock.
•With respect to under construction hospitals that were acquired before the Merger, contributing owners of under construction hospitals will be eligible to receive, on the Determination Date, such owner’s pro rata share of a number of shares of Company common stock equal to (a)(i) the trailing twelve months earnings before interest, taxes, depreciation and amortization as of the Determination Date multiplied by (ii) 10 , minus (iii) the aggregate amount of such owner’s capital contribution to the under construction hospital, minus (iv) such owner’s pro rata share of the aggregate debt of the applicable under construction hospital outstanding as of the closing of the Merger, divided by (b) the greater of (i) the price of the Company common stock at the time of determination or (ii) $2.80 ($420.00 after the 2024 Reverse Stock Splits), as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to the Company’s common stock.
Ramping Hospitals are hospitals that at the time of the Merger had less than two years of operating results and as such were not considered mature hospitals. Under Construction Hospitals are hospitals that at the time of the Merger had not started accepting patients and as such did not have any operating results to serve as a basis for a valuation. At the time of the Merger, the parties agreed to additional issuances of common stock once these Ramping and Under Construction Hospitals had operated for at least 24 months, with the valuation to be based on trailing twelve months operating results determined at the end of such 24-month period (“Measurement Period”).
Pursuant to the Merger Agreement, and based on a valuation of $2.80 per share ($420.00 per share after the 2024 Reverse Stock Splits) of Clinigence common stock, each member interest in Nutex Holdco issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive 3.571428575 shares of Clinigence common stock.
With respect to the Under Construction Hospitals, the aggregate number of shares of Clinigence common stock issued in the Merger to such Nutex Owners was equal to the aggregate capital contribution amounts received from the contributing Nutex Owners of the Under Construction Hospitals divided by (b) $2.80 ($420.00 per share after the 2024 Reverse Stock Splits). In addition, Nutex Health assumed all the debt of such Under Construction Hospitals outstanding at the closing of the Merger.
Under the Contribution Agreements, the Ramping and Under Construction Hospitals are entitled to additional shares of Company Common Stock. The number of additional shares depends on two main factors: the trailing twelve-month operating results of the particular hospital and the trading price of Nutex Health common stock, with both factors determined at the end of the applicable Measurement Period. There is no threshold of certain operating results to be achieved; however, there is a floor price of common stock to be applied to the calculation. The exact amount a Nutex Owner of a particular hospital will receive will accordingly depend on (i) the trailing twelve months of operating results of that particular hospital, minus the initial capital contribution and debt assumption, (ii) the current Nutex common stock trading price, and (iii) the ownership percentage in the hospital such Nutex Owner held prior to the Contribution Transaction and the Merger.
At the closing of the Merger, four hospitals were identified as Ramping Hospitals and 17 hospitals were identified as Under Construction Hospitals. Of the four Ramping Hospitals:
•The Measurement Period of two Ramping Hospitals ended on June 30, 2022, with no additional issuances of common stock due to operating results.
•The Measurement Period of one Ramping Hospital ended on June 30, 2023, with no additional issuances of common stock due to operating results.
•The Measurement Period of one Ramping Hospital ended on November 30, 2023, with no additional issuances of common stock due to hospital closure in February 2023.
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Of the 17 Under Construction Hospitals,
•Seven hospitals with Measurement Periods ended on or before September 30, 2025.
•Three hospitals with Measurement Periods that end after September 30, 2025.
•Three hospitals with no defined Measurement Periods as these hospitals have not opened as of September 30, 2025.
•Four hospitals with no Measurement Period as these hospitals' development plans have been abandoned.
In the tables below, we show the number of shares issuable, the number of shares issued to date, and compensation expense recognized with respect to hospital with Measurement Periods that ended prior to the end of September 30, 2025.
Measurement Periods ending on or prior to September 30, 2025 (dollars in thousands):
| Number of Hospitals | End of Measurement Period | Number of Shares Issuable | Number of Shares Issued to Date | Inception-to-date Compensation Expense | Year-to-date 2025 Compensation Expense | |||||||||||||||||||||||||||
| 1 | February 28, 2023 | $ | $ | |||||||||||||||||||||||||||||
| 2 | February 29, 2024 | |||||||||||||||||||||||||||||||
| 1 | February 28, 2025 | |||||||||||||||||||||||||||||||
| 2 | June 30, 2025 | |||||||||||||||||||||||||||||||
| 1 | August 31, 2025 | |||||||||||||||||||||||||||||||
| 7 | $ | $ | ||||||||||||||||||||||||||||||
In the table below, we show the estimated number of shares issuable to four hospitals with Measurement Periods that end after September 30, 2025 and are operating, but showing a pro forma calculation as if the respective Measurement Periods had ended on September 30, 2025. Since we cannot predict the future operating results of a particular hospital or the Nutex Health trading price at the end of such particular Measurement Period, the actual number of shares issuable to the Nutex Owners of such Hospital cannot be determined.
Measurement Periods ending after September 30, 2025 (dollars in thousands):
| Number of Hospitals | End of Measurement Period | Estimated Number of Shares Issuable | Estimated Compensation Expense | Inception-to-date Compensation Expense | Year-to-date 2025 Compensation Expense | |||||||||||||||||||||||||||
| 1 | March 31, 2026 | $ | $ | |||||||||||||||||||||||||||||
| 1 | November 30, 2026 | |||||||||||||||||||||||||||||||
| 1 | December 31, 2026 | |||||||||||||||||||||||||||||||
| 3 | $ | $ | $ | |||||||||||||||||||||||||||||
The Company measures these obligations as liability-classified stock-based compensation at fair value (level 3) on each reporting date until settlement, with changes in fair value recognized in the consolidated statement of operations. The fair value of these awards is determined using Monte Carlo simulation, which incorporates inputs such as expected term, volatility, risk-free interest rate, dividend yield and the probability of achieving performance conditions. At September 30, 2025, the aggregate liability recorded for these obligations was $11.2 million as compared to $16.4 million at December 31, 2024. The change in fair value recognized in the consolidated statements of operations for three months ended September 30, 2025 and 2024 was $13.2 million and $1.8 million, respectively, and for the nine months ended September 30, 2025 and 2024 was $119.6 million and $1.7 million, respectively.
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Options. The following table summarizes stock-based awards activity:
| Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | |||||||||||||||
| Options outstanding at December 31, 2023 | $ | ||||||||||||||||
| Options exercised | |||||||||||||||||
| Options cancelled | ( | ||||||||||||||||
| Options outstanding at September 30, 2024 | $ | ||||||||||||||||
| Options outstanding at December 31, 2024 | $ | ||||||||||||||||
| Options exercised | |||||||||||||||||
| Options cancelled | ( | ||||||||||||||||
| Options outstanding at September 30, 2025 | $ | ||||||||||||||||
Options outstanding as of September 30, 2025 consisted of:
| Expiration Date | Number Outstanding | Number Exercisable | Exercise Price | |||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||
| May 11, 2027 | ||||||||||||||||||||
| June 9, 2027 | ||||||||||||||||||||
| January 27, 2030 | ||||||||||||||||||||
| January 28, 2031 | ||||||||||||||||||||
| September 9, 2031 | ||||||||||||||||||||
| December 17, 2031 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
Restricted Stock Units. On June 16, 2024, the Company issued 118,538 RSUs (1,184,946 prior to the 1:10 Reverse Stock Split) valued at $0.6 million to certain employees participating in the Company’s long-term incentive program. 39,514 RSUs vested on March 1, 2025, 39,514 RSUs will vest on March 1, 2026, and 39,510 will vest on March 1, 2027.
On March 10, 2025, the Company issued 60,365 RSUs valued at $2.5 million to certain employees participating in the Company’s long-term incentive program. 20,122 RSUs will vest on March 1, 2026, 20,122 RSUs will vest on March 1, 2027, and 20,123 will vest on March 1, 2028.
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For grants of restricted stock units, we recognize compensation expense over the applicable vesting period equal to the fair value of our common stock at grant date. Grants of restricted stock units generally vest one third per year on each of the first three anniversaries of the grant date. The following table summarizes activity in restricted stock units:
| Shares (in thousands) | Weighted Average Grant-Date Fair Value Per Share | ||||||||||
| Non-vested awards, December 31, 2023 | $ | ||||||||||
| Granted | |||||||||||
| Forfeitures | ( | ||||||||||
| Vested | ( | ||||||||||
| Non-vested awards, September 30, 2024 | $ | ||||||||||
| Non-vested awards, December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Forfeitures | ( | ||||||||||
| Vested | ( | ||||||||||
| Non-vested awards, September 30, 2025 | $ | ||||||||||
As of September 30, 2025 and 2024, we estimate $2.4 million and $0.7 million, respectively, of unrecognized compensation cost related to restricted stock units issued to our employees to be recognized over the weighted-average vesting period of 1.6 years and 1.7 years, respectively.
Employee Stock Purchase Plan. In May 2023, the Board adopted the 2023 Employee Stock Purchase Plan (“2023 ESPP”), which was subsequently approved by the Company’s stockholders and became effective in June 2023. The 2023 ESPP authorizes the initial issuance of up to 33,333 shares (5,000,000 prior to the 2024 Reverse Stock Splits) of the Company’s common stock to eligible employees, who are entitled to purchase shares of common stock equal to 85 % of the closing price on the purchase date with accumulated payroll deductions. During the three months ended September 30, 2025 and 2024, the Company issued 351 shares and 4,300 shares, respectively, and for the nine months ended September 30, 2025 and 2024, the Company issued 2,378 shares and 7,107 shares, respectively, under the ESPP.
Note 12 – Equity
We are authorized to issue up to a total of 950,000,000 shares of common stock having a par value of $0.001 per share. Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and to receive ratably in proportion to the shares of common stock held by them any dividends declared from time to time by the Board. Our common stock has no preferences or rights of conversion, exchange, pre-exemption or other subscription rights.
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Common Stock Warrants. Warrant activity is as follows:
| Warrants Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (years) | |||||||||||||||
| Warrants outstanding at December 31, 2023 | $ | ||||||||||||||||
| Warrants issued | |||||||||||||||||
| Warrants exercised | |||||||||||||||||
| Warrants expired | ( | ||||||||||||||||
| Warrants outstanding at September 30, 2024 | $ | ||||||||||||||||
| Warrants outstanding at December 31, 2024 | $ | ||||||||||||||||
| Warrants issued | |||||||||||||||||
| Warrants exercised | |||||||||||||||||
| Warrants expired | ( | ||||||||||||||||
| Warrants outstanding at September 30, 2025 | $ | ||||||||||||||||
Warrants outstanding as of September 30, 2025 consisted of:
| Expiration Date | Number Outstanding | Number Exercisable | Exercise Price | |||||||||||||||||
| October 31, 2025 | ||||||||||||||||||||
| October 31, 2025 | ||||||||||||||||||||
| February 26, 2026 | ||||||||||||||||||||
| July 31, 2026 | ||||||||||||||||||||
| May 31, 2027 | ||||||||||||||||||||
| September 30, 2029 | ||||||||||||||||||||
| October 31, 2029 | ||||||||||||||||||||
| November 30, 2029 | ||||||||||||||||||||
| December 31, 2029 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
Note 13 – Income Taxes
Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
Our effective tax rate was 21.9 % and (177.7 )% for the three months ended September 30, 2025 and 2024, respectively, and for the nine months ended September 30, 2025 and 2024 was 25.2 % and 501.2 %, respectively. The primary difference from the federal statutory rate of 21 % is related to state taxes, income of noncontrolling interests in flow-through entities and permanent differences for non-deductible expenses.
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Note 14 – Earnings (Loss) per Share
The following is the computation of earnings per basic and diluted share (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Basic and diluted earnings (loss) per share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares used to compute basic and diluted EPS | |||||||||||||||||||||||
| Basic earnings (loss) per share: | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted earnings (loss) per share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | |||||||||||||||||||
| Dilutive net income attributable to common stockholders | |||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares used to compute basic EPS | |||||||||||||||||||||||
| Dilutive effect of convertible note | |||||||||||||||||||||||
| Dilutive effect of common stock warrants | |||||||||||||||||||||||
| Dilutive effect of unvested restricted stock | |||||||||||||||||||||||
| Dilutive effect of contingently issuable shares | |||||||||||||||||||||||
| Weighted average shares used to compute diluted EPS | |||||||||||||||||||||||
| Diluted earnings (loss) per share: | $ | $ | ( | $ | $ | ( | |||||||||||||||||
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Note 15 - Supplemental Cash Flows Information
The below supplemental cash flows information is presented in thousands:
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash paid for interest on long-term debt | $ | $ | |||||||||
| Cash paid for interest on finance leases | |||||||||||
| Cash paid for operating leases | |||||||||||
| Cash paid for income taxes | |||||||||||
| Non-cash investing and financing activities: | |||||||||||
| Financed capital expenditures | |||||||||||
| Acquisition of finance leases | |||||||||||
| Warrant liability related to common stock issuance | |||||||||||
| Common stock issued for Employee Stock Purchase Plan | |||||||||||
| Convertible debt converted to common stock | |||||||||||
| Payment for acquisition in common stock | |||||||||||
| Common stock received in sale of business | |||||||||||
| Net reversal of financing lease due to acquisition of lessor | ( | ||||||||||
Note 16 – Segment Information
We report the results of our operations as three segments in our unaudited condensed consolidated financial statements: (i) the hospital division, (ii) the population health management division and (iii) the real estate division.
The Company’s chief operating decision maker (“CODM”) is our Chief Executive Officer (“CEO”). The determination of our reporting segments was made based on our strategic priorities, which corresponds to the way our CODM reviews and evaluates operating performance to make decisions about resources to be allocated. For our operating segments, the CODM uses segment gross profit and segment income before tax to allocate resources (including financial and capital resources) in the annual and forecasting processes. On a monthly basis, the CODM considers month-to-month and budget-to-actual variances for both measures when allocating resources to segments.
Other hospital division expenses include expenses such as facility-specific utilities, marketing and advertising, repairs and maintenance, and other tax expenses. Corporate costs primarily include expenses for support functions and salaries and benefits for corporate employees and are excluded from segment operating results.
Reportable segment information, including intercompany transactions, is presented below (in thousands):
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Hospital division | $ | $ | |||||||||
| Population health management division | |||||||||||
| Real estate division | |||||||||||
| Total Assets | $ | $ | |||||||||
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue from external customers: | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||
| Hospital division | |||||||||||||||||||||||
| Payroll | $ | $ | $ | $ | |||||||||||||||||||
| Contract services | |||||||||||||||||||||||
| Medical supplies | |||||||||||||||||||||||
| Other hospital division expenses | |||||||||||||||||||||||
| Hospital division expenses | |||||||||||||||||||||||
| Population health management division expenses | |||||||||||||||||||||||
| Total segment expenses | $ | $ | $ | $ | |||||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division | |||||||||||||||||||||||
| Real estate division | ( | ||||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Segment gross profit (loss): | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division | ( | ||||||||||||||||||||||
| Real estate division | ( | ( | |||||||||||||||||||||
| Total segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Consolidated operating income: | |||||||||||||||||||||||
| Total segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Corporate and other costs | ( | ( | ( | ( | |||||||||||||||||||
| Consolidated operating income | $ | $ | $ | $ | |||||||||||||||||||
| Segment income: | |||||||||||||||||||||||
| Hospital division | |||||||||||||||||||||||
| Hospital division gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
| Other expense (income) | ( | ||||||||||||||||||||||
| Hospital division income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division income before income taxes | |||||||||||||||||||||||
| Real estate division loss before income taxes | ( | ( | |||||||||||||||||||||
| Non-segment loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) before income taxes | $ | $ | ( | $ | $ | ||||||||||||||||||
| Capital expenditures: | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Total capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
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Note 17 – Related Party Transactions
Related party transactions included the following:
•The Physician LLCs employ the doctors who work in our hospitals. We have no direct ownership interest in these entities, but they are owned and, in some instances, controlled by related parties including our CEO, Dr. Thomas Vo. The Physician LLCs are consolidated by the Company as VIEs because they do not have significant equity at risk, and we have historically provided support to them in the event of cash shortages and been the primary beneficiary of their services.
The Physician LLCs had outstanding obligations to their member owners, who are also Company stockholders, totaling less than $0.8
Most of our hospital division facilities are leased from real estate entities which are owned by related parties. These leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Our obligations under these leases are presented in Note 9 – Leases. For the three months ended September 30, 2025 and 2024, we made cash payments totaling $5.7 million and $5.1 million, respectively, and for the nine months ended September 30, 2025 and 2024, we made cash payments totaling $16.6 million and $14.7 million for those lease obligations. In addition, the building that houses the Company's corporate headquarters is owned by our CEO and leased to the Company, and lease payments under this arrangement are included in the lease obligation totals.
•We consolidate Real Estate Entities as VIEs when they do not have sufficient equity at risk and our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans. Two of the three consolidated Real Estate Entities have mortgage loans payable to third parties which are collateralized by the land and buildings, and continue to be consolidated in our financial statements as of September 30, 2025. We have no direct ownership interest in two of the Real Estate Entities, but they are owned and, in some instances, controlled by related parties including our CEO.
•Accounts receivable – related party included $7.3 million and $4.3 million at September 30, 2025 and December 31, 2024, respectively, due from noncontrolling interest owners of consolidated ER Entities.
•Accounts payable – related party in our unaudited condensed consolidated balance sheets included $2.0 million at September 30, 2025 and zero at December 31, 2024 for reimbursement of expenses incurred on our behalf.
In addition, we have outstanding obligations of contributions for facilities currently under construction totaling $2.2 million and $1.6 million at September 30, 2025 and December 31, 2024, respectively, reported within accounts payable-related party in our unaudited condensed consolidated balance sheets.
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Note 18 – Variable Interest Entities
The following tables provide the balance sheet amounts for consolidated VIEs (in thousands):
| September 30, 2025 | |||||||||||||||||||||||
| Real Estate Entities | Physician LLCs | Facility Entity | IPAs | ||||||||||||||||||||
| Current assets | $ | $ | $ | $ | |||||||||||||||||||
| Property and equipment, net | |||||||||||||||||||||||
| Other long-term assets | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||
| Long-term liabilities | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
| Equity | |||||||||||||||||||||||
| Total liabilities and equity | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||
| Real Estate Entities | Physician LLCs | IPAs | |||||||||||||||
| Current assets | $ | $ | $ | ||||||||||||||
| Property and equipment, net | |||||||||||||||||
| Total assets | $ | $ | $ | ||||||||||||||
| Current liabilities | |||||||||||||||||
| Long-term liabilities | |||||||||||||||||
| Total liabilities | |||||||||||||||||
| Equity | |||||||||||||||||
| Total liabilities and equity | $ | $ | $ | ||||||||||||||
The assets of each of the hospital facilities may only be used to settle the liabilities of that entity or its consolidated VIEs and may not be required to be used to settle the liabilities of any of the other hospital facilities, other VIEs, or corporate entities. Additionally, the assets of corporate entities cannot be used to settle the liabilities of VIEs. The Company has aggregated all Physician LLCs and certain Real Estate Entities into two categories above, because they have similar risk characteristics, and presenting distinct financial information for each VIE would not add more useful information.
Two Real Estate Entities are consolidated by the Company as VIEs because they do not have sufficient equity at risk and our hospital entities are guarantors of their outstanding mortgage loans. We have been working with the third-party lenders to remove our guarantees of their outstanding mortgage loans. As these guarantees are released, the associated Real Estate Entity no longer qualifies as a VIE and is deconsolidated. As of September 30, 2025, two Real Estate Entities continue to be consolidated as VIEs in our financial statements.
In addition, during the third quarter of 2025, the Company, through its consolidated subsidiary, acquired certain assets and assumed specific liabilities of a non-operational hospital facility located in St. Louis, Missouri. The consolidated subsidiary was determined to be a VIE under ASC 810 due to insufficient equity investment at risk and its reliance on financial support and guarantees from the Company, including a $5.8 million seller note payable. The Company holds a 100 % ownership interest in
31
consolidated subsidiary which will decrease by 15 % evenly over a -year period and has both (i) the power to direct the activities that most significantly affect the consolidated subsidiary's economic performance and (ii) the obligation to absorb potentially significant losses or the right to receive potentially significant benefits. Accordingly, the Company is the primary beneficiary and consolidates the entity as a VIE. As of September 30, 2025, the consolidated subsidiary remained non-operational and did not contribute revenues or expenses to the Company's consolidated results. See Note 4 - Acquisitions for more details around the acquisition.
Note 19 - Subsequent Events
The Company has evaluated subsequent events through the filing of this report. Management identified the following event that warrant disclosure:
•From October 1, 2025 to October 31, 2025, the remaining note holders of unsecured convertible term notes converted $4.9 million of principal and $0.1 million of interest to 165,030 shares of the Company's common stock, valued at $30.00 per share.
* * * * *
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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
Explanatory Note
On April 1, 2022, Nutex Health Holdco LLC merged with Clinigence Holdings, Inc. (“Clinigence”), a publicly traded Delaware corporation, which was renamed Nutex Health Inc. after the merger (the “Merger”). Immediately prior to the Merger, holders of 84% of the aggregate equity interests in subsidiaries and affiliates of Nutex Health Holdco LLC contributed these ownership interests to Nutex Health Holdco LLC in exchange for Nutex Health Holdco LLC equity interests. Immediately thereafter, in the Merger, each unit representing an equity interest in Nutex Health Holdco LLC was converted into the right to receive shares of common stock of Clinigence (n/k/a Nutex Health Inc.).
The Merger was accounted for as a reverse business combination under U.S. GAAP, and Nutex Health Holdco LLC was treated as the accounting acquirer in the Merger.
Overview
Nutex Health Inc. is a physician-led, healthcare services and operations company with 24 hospital facilities in 11 states (hospital division), and a primary care-centric, risk-bearing population health management division. Our hospital division implements and operates innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments. The population health management division owns and operates provider networks such as independent physician associations (“IPAs”).
At September 30, 2025, we employed approximately 880 full-time employees, contracted 255 doctors at our facilities and partnered with over 2,100 physicians within our networks. Our corporate headquarters is based in Houston, Texas. We were incorporated on April 13, 2000 in the state of Delaware.
Our financial statements present the Company’s unaudited condensed consolidated financial condition and results of operations including those of majority-owned subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary.
The hospital division includes our healthcare billing and collections organization and hospital entities. In addition, we have financial and operating relationships with multiple professional entities (the “Physician LLCs”) and real estate entities (the “Real Estate Entities”). The Physician LLCs employ the doctors who work in our hospitals. These entities are consolidated by the Company as VIEs because they do not have significant equity at risk, and we have historically provided support to the Physician LLCs in the event of cash shortages and received the benefit of their cash surpluses.
The Real Estate Entities own the land and hospital buildings which are leased to our hospital entities. The Real Estate Entities have mortgage loans payable to third parties which are collateralized by the land and buildings. We consolidate certain Real Estate Entities as VIEs in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans. As of September 30, 2025, two Real Estate Entities continue to be consolidated as VIEs in our financial statements.
The Company has no direct or indirect ownership interest in the Physician LLCs or Real Estate Entities, so 100% of the equity for these entities is shown as noncontrolling interest in the unaudited condensed consolidated balance sheets and statements of operations.
The population health management division includes our management services organization. Additionally, AHISP, IPA, a physician-affiliated entity that is not owned by us, is consolidated as a VIE of our wholly-owned subsidiary AHP since we are the primary beneficiary of their operations under AHP’s management services contracts with them.
Sources of revenue. Our hospital division recognizes net patient service revenue for contracts with patients and in most cases a third-party payor (commercial insurance, workers compensation insurance or, in limited cases, Medicare/Medicaid).
We receive payment for facility services rendered by us from federal agencies, private insurance carriers and patients. The Physician LLCs receive payment for doctor services from these same sources. On average, greater than 99% of our net patient service revenue is paid by insurers, federal agencies and other non-patient third parties. The remaining revenues are paid by our
33
patients in the form of copays, deductibles and self-payment. We generally operate as an out-of-network provider and as such, do not have negotiated reimbursement rates with insurance companies.
The following tables present the allocation of the transaction price with the patient between the primary patient classification of insurance coverage:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||
| Insurance | 97 | % | 95 | % | 97 | % | 93 | % | ||||||||||||||||||
| Self pay | 1 | % | 2 | % | 1 | % | 4 | % | ||||||||||||||||||
| Workers compensation | 1 | % | 2 | % | 1 | % | 2 | % | ||||||||||||||||||
| Medicare/Medicaid | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||
Arbitration process.
Federal Rules Applicable to Out-of-Network Billing
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. The NSA achieves this by relieving patients from financial liability for surprise bills and creating an Independent Dispute Resolution (“IDR”) process for billing disputes between providers and insurers. The patient is not involved in this process, and payment is issued directly to the provider. The IDR process safeguards providers by promoting fair reimbursement from payors, helping ensure their continued ability to deliver care.
•Independent Dispute Resolution. Under the IDR provisions, Nutex Health and the insurer first must try to agree on a price for the services. If negotiations fail, either party has four days to initiate IDR proceedings. If the parties pursue IDR, either the parties or the Department of Health and Human Services (“HHS”) selects a certified independent dispute resolution entity (“CIDRE”) to determine the final payment amount.
•Certified Independent Dispute Resolution Entity. The CIDRE has the sole discretion to determine both the eligibility of claims submitted for the IDR process and the amount the payor owes the provider.
•The CIDRE makes a threshold determination of IDR eligibility and sets the payment amount by choosing between the offers of each party; the provider and insurer each submit a final offer, and the CIDRE selects one party’s offer as the award after reviewing and evaluating all statutorily required information submitted by both parties.
•In deciding which offer to award, the CIDRE must consider several factors outlined in the law, only one of which is the insurer’s qualifying payment amount (“QPA”), defined as the “median of the contracted rates recognized by the plan or issuer . . . for the same or a similar item or service” offered in the same insurance market and geographic area. Among the other factors to be considered are the complexity or acuity of the case, the doctor’s expertise, and the scope of services provided in the facility. See also below “Legal Challenges to HHS Final Rule – Federal Court removes restrictions imposed on arbitrators in 2022 HHS final Rules (TMA II).”
•Arbitration Awards Are Binding. In the absence of a fraudulent claim or evidence of a misrepresentation of facts to the CIDRE, the IDR award is binding upon the parties involved and payment of the award must be made not later than 30 days after the date on which the payment determination is made.
•Patients are not involved in open negotiations or the IDR process, and payors must issue any IDR award payments directly to the provider.
•The NSA empowers HHS to assess penalties against insurers for failure to comply with the NSA, including timely payment of CIDRE awards. However, as illustrated by the pending legislation discussed below, significant enforcement gaps remain in the current law.
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•Legal challenges to HHS Final Rule. The final rule has been the subject of multiple legal challenges. Beginning in September 2022, the Texas Medical Association (“TMA”) filed several actions in federal court in Texas, seeking, among other things, to invalidate the IDR related provisions of the final rule.
•Federal Court vacates 2021 HHS interim final rules to ensure fair and accurate rates (TMA III)
On November 30, 2022, the TMA filed a lawsuit challenging the methodology of the federal regulator’s calculation of the QPA. The interim final rules allowed consideration of all negotiated rates, including those provided in contracts with providers who do not actually provide the particular service (ghost rates). On August 24, 2023, the federal district court vacated several aspects of the regulations mandating the methodology for the QPA calculation. On October 30, 2024, the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”) reversed the district court’s vacatur of the QPA calculation methodology. However, on December 17, 2024, the Fifth Circuit ordered that the mandate be withheld and on May 30, 2025 vacated the previous opinion and held an en banc oral argument on September 24, 2025. No final en banc opinion has been issued. We cannot predict how such final opinion will affect the QPA calculation or the opinion's impact on out-of-network payments awarded in the IDR process.
•Federal Court removes restrictions imposed on arbitrators in 2022 HHS final rules (TMA II).
On August 2, 2024, the Fifth Circuit upheld a ruling by district court disallowing provisions of the federal rules established under the NSA which would have required arbitrators (i) to prioritize the insurer established QPA over any of the other factors listed below and (ii) to justify in writing the arbiter’s reliance on any factors beyond the QPA.
•The Fifth Circuit held that the NSA requires that the arbitrator must consider several factors of equal weight in determining the out-of-network rate. These factors include:
•The qualifying payment amount, which Congress intended as the median rate the insurer would have paid for comparable services in the same geographic area if provided by an in-network provider or facility (as properly calculated excluding “ghost rates); and
•Five additional factors:
•The doctor’s level of training;
•the market share of the doctor or insurer in the geographic region;
•the acuity of the patient or the complexity of the case;
•the scope of services of the facility; and
•the good faith efforts (or lack of good faith efforts) made by the out-of-network provider or the plan to enter into network agreements and, if applicable, contracted rates between the parties during the previous four years.
Accordingly, in their payment determination, the CIDRE must consider all factors listed above, including, but not prioritizing, the QPA.
Our Claims Process
The claims process for out-of-network claims is highly complex due mainly to the bifurcated nature of many states which have their own surprise billing rules for fully insured claims (and for certain types of providers) and the differing rules governing the determination whether individual claims may be bundled or “batched” when submitting to the CIDRE. As a result, eligibility determinations are highly complex and time consuming. 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.
Our claims for out-of-network services are subject to the following federally mandated process once we submit a payment request to the applicable insurance company:
•Initial Payment or Denial. Under the NSA, insurers must issue either an initial payment or a notice of denial to a provider within 30 days after receiving a bill for an out-of-network service.
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•Negotiation Period. If the provider disagrees with the insurer’s determination, the provider may initiate a 30-business-day open negotiation period with the insurer regarding the claim.
•IDR Process. If the dispute is not resolved through negotiation, either party may proceed to the IDR process within four business days.
•Payment Timeline. The IDR process is intended to take no more than 30 days, but in practice can take between three to five months before we receive IDR approved and adjusted payments, including the 30 days deadline for the payor to submit payments after the award has been made.
•Late Payment or Non-Payment. Currently, the HHS has the authority to impose financial penalties on payors for late payment or non-payment upon application of the provider. If the No Surprises Enforcement Act is passed and signed into law, payors would face automatic financial penalties for late or non- payment. See “Future Expectations” below.
On July 1, 2024, we engaged HaloMD, a third-party expert, to further support all our out of out-of-network claims and determine which claims would be beneficial to arbitrate. HaloMD specializes in independent dispute resolution through the NSA and state regulations 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.
“Bifurcated” states are states in which some out-of-network services are subject to the federal IDR process and others are subject to a specified state law or all-payer model agreement. The out-of-network services subject to either federal or state jurisdiction differ from state to state, rendering the medical billing process highly complex. HaloMD assists Nutex throughout our arbitration process in the bifurcated states of Texas, Florida, New Mexico, and the non-bifurctaed states of Arizona, Arkansas, Idaho, Indiana, Kansas, Louisiana, Oklahoma, and Wisconsin, when we conclude that the payor has not properly paid or underpaid a claim for services as required under the NSA. In that regard, HaloMD works closely with us in navigating the following key areas:
•Documentation Submission. Based on the information and data we provide to HaloMD, using a proprietary data driven process, HaloMD submits the required documentation to the CIDRE through the federal portal.
•Eligibility Determination. It is the CIDRE who determines the eligibility of the claims submitted to arbitration based on the information provided through the federal portal and all payors have the right to object to whether the claim is eligible for IDR review or subject to a similar state law dispute resolution process based upon the type of insured member.
•Jurisdictional Eligibility. Jurisdictional eligibility depends on whether a state is “bifurcated”, which means that state laws regarding surprise billing only partially align with federal law.
•State Laws. Certain states have their own surprise billing laws, which must meet specified requirements to take precedence over the federal process but may not cover all claims. In our case, Texas, Florida, and New Mexico are bifurcated states where state law takes precedence for most out-of-network claims.
•Claim Submission. Providers must attest to the best of their knowledge whether a claim falls under state or federal jurisdiction based on the type of insurance plan and the services involved. The CIDRE then determines whether the dispute is eligible to proceed under the federal IDR process. Where applicable, state law procedures and requirements govern the equivalent arbitration process under state law.
•Federal Arbitration Process. Under the federal arbitration process, both the insurer and the provider submit offers indicating the amounts they are willing to pay or receive, respectively. Based on the information submitted through the federal portal, the CIDRE selects either the insurer’s or the provider’s offer to determine the payment.
•Offer Determination. HaloMD, using proprietary data analysis and benchmarking, determines the appropriate offer amount on our behalf.
•Independent Review. The IDR process allows an independent review of a provider’s services and payment requests. Without federal arbitration, the insurer is the sole arbiter of the amount payable for out-of-network services.
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•For the first time, independent federal arbitration offers providers a venue to submit claims to an independent arbiter, which we believe has resulted in payments that more accurately reflect fair and reasonable value of the services provided.
•In this fully transparent process, both the payor and the provider submit offers indicating the amounts they are willing to pay or receive, respectively.
•Based on the information submitted through the federal portal by HaloMD, the CIDRE selects either the insurer’s or the provider’s offer to determine the payment.
•IDR Industry Trends. According to arbitration data published by the Center for Medicare and Medicaid Services (CMS), CIDREs are making significant progress in improving the overall Federal IDR process:
•During the final two quarters of 2024, providers initiated 1.5 million billing disputes which represents more than 70 times the predicted annual caseload.
•Of those, 85 percent were decided in favor of the provider (the higher offer), resulting in a median winning offer of over four times the median in-network rate of each insurer.
•In its bi-monthly report as of May 31, 2025, CMS reports that between April 15, 2022 and May 31, 2025, the number of disputes closed was 2,831,804, of which 539,664 were found ineligible and 2,152,045 resulted in a payment determination.
•The Federal IDR program dispute closure volume continues to rise month over month. CIDREs closed 264,805 disputes in May 2025, 8% more than April 2025 (244,705) and 26% more than were initiated in March 2025 (209,637).
•Future Expectations. We expect the federal arbitration process for out-of-network services will continue to evolve and become more efficient and less complex. On July 23, 2025, the No Surprises Enforcement Act was introduced both in the House and in the Senate and referred to committee, primarily to mandate financial penalties to be imposed on insurers for late payment or non-payment of IDR awards. We cannot predict whether this legislation will be approved and signed into law. Future federal court decisions and regulatory changes may adversely affect our ability to collect the revenue for our services that we believe is fair and reasonable.
Geographic Reach
The following is a map indicating the geographic location of our existing and upcoming hospital locations, and specifies which state is a bifurcated jurisdiction for federal arbitration purposes.
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Cost of arbitration. There is a significant cost to enter the arbitration process. The arbitration process includes expenses associated with third party providers, including IDR entities, which typically collect fees at the beginning of the process, before the claim award amounts are decided by arbitrators. According to the Center for Medicare and Medicaid Services, as of July 23, 2025, the nonrefundable administrative fee is $115 per party per dispute and the certified IDR entity fee ranges from $375 to $800 for single determinations and $75 to $1,150 for batched determinations. The total cost of arbitration for all Nutex hospital and professional services for the three and nine months ended September 30, 2025 was $41.9 million and $116.2 million, respectively.
Population health management division. The population health management division recognizes revenue for capitation and management fees for services to independent physician associations (“IPAs”) or physician groups. Capitation revenue consists primarily of capitated fees for medical services provided by physician-owned entities we consolidate as VIEs. Capitated arrangements are made directly with various managed care providers including HMOs. Capitation revenues are typically prepaid monthly to us based on the number of enrollees selecting us as their healthcare provider. Capitation is a fixed payment amount per patient per unit of time paid in advance for the delivery of health care services, whereby the service providers are generally liable for excess medical costs. We receive management fees that are based on gross capitation revenues of the IPAs or physician groups we manage.
Our growth strategy. We plan to expand our operations by expanding our clinical services at our existing facilities, by entering new market areas either through the development of new hospitals, the formation of new IPAs or by making acquisitions. We expect to open three new hospital facilities by the end of 2025. These facilities are either under construction or in advanced planning stages. We anticipate launching one-to-three additional IPAs per year, principally in geographic areas around our existing micro-hospitals.
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Industry Trends
The demand for healthcare services continues to be impacted by the following trends:
•Regulatory uncertainty
•A growing focus on healthcare spending by consumers, employers and insurers, who are actively seeking lower-cost care solutions;
•A shift in patient volumes from inpatient to outpatient settings due to technological advancements and demand for care that is more convenient, affordable and accessible;
•The growing aged population, which requires greater chronic disease management and higher-acuity treatment; and
•Ongoing consolidation of providers and insurers across the healthcare industry.
The healthcare industry, particularly emergency care hospitals, continues to be subject to ongoing regulatory uncertainty. Changes in federal or state healthcare laws, regulations, funding policies or reimbursement practices, especially those involving reductions to government payment rates or limitations on what providers may charge, could significantly impact future revenue and operations. For example, the No Surprises Act prohibits providers from charging patients an amount beyond the in-network cost sharing amount for services rendered by out-of-network providers, subject to limited exceptions. For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the amounts received by out-of-network providers from health plans. Any reduction in the rates that we can charge or the amounts we can receive for our services will reduce our total revenue and our operating margins.
Recent Developments
On July 4, 2025, the "One Big Beautiful Bill Act" was signed into law, enacting significant changes to the U.S. tax code and coverage benefits for certain public healthcare insurance beneficiaries. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the reinstatement of 100% bonus depreciation. The changes were not reflected in the income tax provision for the period ended September 30, 2025, as enactment occurred after the balance sheet date. The Company is currently evaluating the provisions of the legislation and assessing the potential impact on its financial statements for future periods
Short Seller Report. Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of buying identical securities at a later date to return to the lender. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale. On July 22, 2025, a short seller report that contained various allegations against the Company was published, that had an adverse impact on the market price of our common stock. This report disclosed the writer had a short position with respect to our common stock. On July 23, 2025, the closing price of our common stock was $92.90, representing a decrease of $18.29 or 16.4% compared to the closing price of our common stock on July 21, 2025, prior to the publication of the report. We timely responded to what we strongly consider to be false allegations and misleading statements in the report. Refer to “Item 1A. Risk Factors".
The short seller report was largely based on allegations made against HaloMD and certain providers in lawsuits filed during the spring of 2025 by affiliates of Blue Cross Blue Shield. Those lawsuits allege that HaloMD has repeatedly submitted claims ineligible for federal arbitration under the No Surprises Act and abused the IDR process. HaloMD has filed motions to dismiss, which are pending. Nutex Health is not party to these or similar lawsuits and cannot predict their outcomes.
Share Repurchase Program. On August 14, 2025, the Board authorized a stock repurchase program of up to $25.0 million of the Company’s common stock over the subsequent six months pending compliance with the Company's current reporting obligations. The purpose of the share repurchase is to increase shareholder value and offset dilution from the issuance of Additional Shares in connection with the Merger (Refer to “Item 1A. Risk Factors for Additional Share information).
Pursuant to the stock repurchase program the Company may repurchase, from time to time, up to an aggregate of $25.0 million of its outstanding shares of common stock, exclusive of any fees, commissions or other expenses related to such repurchases. The stock repurchase program permits the Company to repurchase shares of common stock at any time or from time to time at management’s discretion in open market transactions made in accordance with the provisions of Rule 10b-18 and/or Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, privately negotiated transactions or by other means in accordance with applicable securities laws.
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The timing of any repurchases and the number of shares repurchased are subject to the discretion of the Company and may be affected by various factors, including general market and economic conditions, the market price of the Company’s common stock, the Company’s earnings, financial condition, capital requirements and levels of indebtedness, legal requirements, and other factors that management may deem relevant. The share repurchase program authorization does not obligate the Company to acquire any shares of its common stock and may be amended, suspended or discontinued at any time.
Results of Operations
We report the results of our operations as three segments in our unaudited condensed consolidated financial statements: (i) the hospital division, (ii) the population health management division and (iii) the real estate division. Activity within our business segments is significantly impacted by the demand for healthcare services we provide, competition for these services in each of the markets we serve, and the legislative changes discussed above.
Following are the results of operations for the periods presented (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Hospital division | $ | 260,239 | $ | 71,733 | $ | 700,488 | $ | 199,367 | |||||||||||||||
| Population health management division | 7,565 | 7,062 | 23,090 | 22,964 | |||||||||||||||||||
| Total revenue | 267,804 | 78,795 | 723,578 | 222,331 | |||||||||||||||||||
| Segment gross profit (loss): | |||||||||||||||||||||||
| Hospital division | 154,107 | 21,438 | 397,571 | 54,700 | |||||||||||||||||||
| Population health management division | 883 | 479 | 899 | (66) | |||||||||||||||||||
| Real estate division | (109) | — | (327) | — | |||||||||||||||||||
| Total segment gross profit | 154,881 | 21,917 | 398,143 | 54,634 | |||||||||||||||||||
| Corporate and other costs: | |||||||||||||||||||||||
| Stock-based compensation | 13,217 | 1,964 | 119,606 | 1,952 | |||||||||||||||||||
| Impairment of assets | — | 425 | — | 3,899 | |||||||||||||||||||
| Impairment of goodwill | — | — | — | 3,197 | |||||||||||||||||||
| General and administrative expenses | 11,297 | 9,865 | 33,830 | 29,175 | |||||||||||||||||||
| Total corporate and other costs | 24,514 | 12,254 | 153,436 | 38,223 | |||||||||||||||||||
| Interest expense | 5,452 | 5,381 | 17,250 | 14,880 | |||||||||||||||||||
| Gain on warrant liability | — | 6,734 | — | 1,073 | |||||||||||||||||||
| Other (income) expense | 976 | 128 | 8,570 | (711) | |||||||||||||||||||
| Income (loss) before taxes | 123,939 | (2,580) | 218,887 | 1,169 | |||||||||||||||||||
| Income tax expense | 27,140 | 4,585 | 55,138 | 5,868 | |||||||||||||||||||
| Net income (loss) | 96,799 | (7,165) | 163,749 | (4,699) | |||||||||||||||||||
| Less: net income attributable to noncontrolling interests | 41,364 | 1,623 | 104,794 | 4,819 | |||||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | $ | 55,435 | $ | (8,788) | $ | 58,955 | $ | (9,518) | |||||||||||||||
Adjusted EBITDA(1) | $ | 98,530 | $ | 9,670 | $ | 242,965 | $ | 16,105 | |||||||||||||||
(1)See reconciliation of net loss attributable to Nutex Health Inc. to Adjusted EBITDA under Non-GAAP Financial Measures.
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Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024
Net income attributable to Nutex Health Inc. was $55.4 million, or income of $8.27 per diluted share, for the three months ended September 30, 2025 compared to a net loss attributable to Nutex Health Inc. of $8.8 million, or a loss of $1.72 per share, for the same period 2024. Our 2025 results were principally affected by higher revenue and cost due to:
•Higher patient visits, which increased by 11.0% during the three months ended September 30, 2025 as compared with the same period of 2024. Same-store mature hospitals visits decreased an average of 0.6% versus prior year as well as the opening of four new hospitals in 2024;
•Increased revenue per visit due to success in efforts to obtain higher rates through the Independent Dispute Resolution (“IDR”) process and increased utilization of higher paid services such as increased observation and in-patient stays.
•Higher stock-based compensation to under construction and ramping hospitals of $13.2 million for the three months ended September 30, 2025, an increase of $11.3 million compared to the same period last year.
•Higher income tax expense of $27.1 million for the three months ended September 30, 2025 compared to $4.6 million for the three months ended September 30, 2024, an increase of $22.5 million.
•Higher interest expense of $5.5 million for the three months ended September 30, 2025 compared to $5.4 million for the three months ended September 30, 2024, an increase of $0.1 million.
•No gain or loss on warrant liability for the three months ended September 30, 2025 as compared to a $6.7 million gain for the three months ended September 30, 2024.
Adjusted EBITDA for the three months ended September 30, 2025 increased to $98.5 million from $9.7 million for the comparable period 2024. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA. The items affecting revenue, stock-based compensation and income tax expense contributed significantly to the increase in Adjusted EBITDA in the 2025 period.
A discussion of our segment results is included below.
Hospital Division. Our revenue for the three months ended September 30, 2025 totaled $260.2 million as compared to $71.7 million for the same period in 2024, an increase of $188.5 million or 262.8%. This increase was attributed to an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process, an increase in visits and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 208.9% is related to mature hospitals, which are hospitals that were opened by December 31, 2021.
The following table shows the number of patient visits during the periods:
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Patient visits: | |||||||||||
| Hospital | 46,232 | 41,668 | |||||||||
Total patient visits increased 11.0% during the three months ended September 30, 2025 as compared with the same period in 2024 including the opening of four facilities throughout 2024 which are fully operating in 2025.
The hospital division’s gross profit was $154.1 million during the three months ended September 30, 2025, compared with $21.4 million in the same period in 2024, an increase of 618.8%. Our revenue and operating income for the third quarter of 2025 was positively affected by an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process, an increase in visits and increased utilization of higher paid services such as increased observation and in-patient stays.
Population Health Management Division. Our total revenue for the three months ended September 30, 2025 was $7.6 million as compared with $7.1 million for the same period in 2024.
The population health management division had $0.9 million of loss before income taxes for the three months ended September 30, 2025 as compared with $0.9 million of loss for the same period in 2024. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Real Estate Division. This division reports the operations of consolidated Real Estate Entities where we provide guarantees of their indebtedness or are co-borrowers.
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Revenue and operating expenses of consolidated Real Estate Entities are not significant since the extent of these entities’ operations is to own facilities leased to our hospital division entities which are financed by a combination of contributed equity by related parties and third-party mortgage indebtedness. Such leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Finance lease income is recognized outside of segment operating income as other income by the Real Estate Entities. However, these amounts are largely eliminated in the consolidation of these entities into our financial statements.
On May 2, 2025, the Company acquired 51% membership interest in an Indiana based limited liability company (“Acquiree”) for $2.3 million in cash. As part of the transaction, the Company assumed $8.1 million in outstanding note payable of the Acquiree. The acquisition strengthens the Company’s operations in Indiana and is consistent with our growth initiatives. The noncontrolling interest was measured at cost of $0.8 million for the 49% interest.
On September 19, 2025, the Company, through its consolidated subsidiary, acquired certain assets and assumed specific liabilities of a non-operational hospital facility located in St. Louis, Missouri (the "Facility") pursuant to an asset purchase agreement. The Company determined the Facility does not meet the definition of a business under ASC 805-10-55-5A. Accordingly, the transaction was accounted for as an asset acquisition under ASC 805-50 and resulted in the recognition of approximately $7.0 million of indefinite-lived intangible assets representing the certificate of need. The consolidated subsidiary was determined to be a VIE for which the Company is the primary beneficiary and, accordingly, is consolidated in the Company's financial statements.
As of September 30, 2025, two Real Estate Entities continue to be consolidated in our financial statements as VIEs. We expect that hospitals we open in the future may be leased from new Real Estate Entities which may be owned in whole or part by related parties. Third-party lenders to these entities may require that we provide a guarantee or become co-borrowers under mortgage indebtedness and financings for such facilities. In such instances, we may be required to consolidate these new Real Estate Entities in our financial statements as VIEs.
Corporate and other costs. Corporate and other costs in the three months ended September 30, 2025 totaled $24.5 million as compared to $12.3 million for the same period in 2024, an increase of 100.0%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to an increase in stock-based compensation of $11.3 million related to obligations for under-construction and ramping hospitals, and an increase in general and administrative expenses of $1.4 million.
Nonoperating items
Interest expense. Interest expense was $5.5 million for the three months ended September 30, 2025 as compared with $5.4 million for the same period of 2024. The increase in interest expense in 2025 is primarily due to the finance lease obligations related to the new facility openings throughout 2024 that are fully operating in 2025.
Gain on warrant liability. Gain on warrant liability was zero in the three months ended September 30, 2025 as compared to $6.7 million for the same period of 2024. All relevant warrants were exercised by November 2024.
Income tax expense. Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Net income attributable to Nutex Health Inc. was $59.0 million, or income of $9.63 per diluted share, for the nine months ended September 30, 2025 compared to a net loss attributable to Nutex Health Inc. of $8.8 million, or a loss of $1.72 per share, for the same period 2024. Our 2025 results were principally affected by higher revenue and cost due to:
•Higher patient visits, which increased by 13.9% during the nine months ended September 30, 2025 as compared with the same period of 2024. Same-store mature hospitals visits increased an average of 1.8% versus prior year as well as the opening of four new hospitals in 2024;
•Increased revenue per visit due to success in efforts to obtain higher rates through the Independent Dispute Resolution (“IDR”) process and increased utilization of higher paid services such as increased observation and in-patient stays.
•Higher stock-based compensation to under construction and ramping hospitals of $119.6 million for the nine months ended September 30, 2025, an increase of $117.7 million compared to the same period last year.
•Higher income tax expense of $55.1 million for the nine months ended September 30, 2025 compared to $5.9 million for the nine months ended September 30, 2024, an increase of $49.2 million.
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•Higher interest expense of $17.3 million for the nine months ended September 30, 2025, an increase of $2.4 million compared to the same period in 2024.
•No gain or loss on warrant liability for the nine months ended September 30, 2025 as compared to a $1.1 million gain for the same period in 2024.
Adjusted EBITDA for the nine months ended September 30, 2025 increased to $243.0 million from $16.1 million for the comparable period 2024. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA. The items affecting revenue, stock-based compensation and income tax expense contributed significantly to the increase in Adjusted EBITDA in the 2025 period.
A discussion of our segment results is included below.
Hospital Division. Our revenue for the nine months ended September 30, 2025 totaled $700.5 million as compared to $199.4 million for the same period in 2024, an increase of $501.1 million or 251.4%. This increase was attributed to an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process, an increase in visits and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 200.0% is related to mature hospitals, which are hospitals that were opened by December 31, 2021.
The following table shows the number of patient visits during the periods:
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Patient visits: | |||||||||||
| Hospital | 140,074 | 122,944 | |||||||||
Total patient visits increased 13.9% during the nine months ended September 30, 2025 as compared with the same period in 2024 including the opening of four facilities throughout 2024 which are fully operating in 2025.
The hospital division’s gross profit was $397.6 million during the nine months ended September 30, 2025, compared with $54.7 million in the same period in 2024, an increase of 626.8%. Our revenue and operating income for the nine months ended September 30, 2025 was positively affected by an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process, an increase in visits and increased utilization of higher paid services such as increased observation and in-patient stays.
Population Health Management Division. Our total revenue for the nine months ended September 30, 2025 was $23.1 million as compared with $23.0 million for the same period in 2024.
The population health management division had less than $0.1 million of income before income taxes for the nine months ended September 30, 2025 as compared with $0.3 million of loss for the same period in 2024. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Real Estate Division. This division reports the operations of consolidated Real Estate Entities where we provide guarantees of their indebtedness or are co-borrowers.
Revenue and operating expenses of consolidated Real Estate Entities are not significant since the extent of these entities’ operations is to own facilities leased to our hospital division entities which are financed by a combination of contributed equity by related parties and third-party mortgage indebtedness. Such leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Finance lease income is recognized outside of segment operating income as other income by the Real Estate Entities. However, these amounts are largely eliminated in the consolidation of these entities into our financial statements.
On May 2, 2025, the Company acquired 51% membership interest in an Indiana based limited liability company (“Acquiree”) for $2.3 million in cash. As part of the transaction, the Company assumed $8.1 million in outstanding note payable of the Acquiree.
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The acquisition strengthens the Company’s operations in Indiana and is consistent with our growth initiatives. The noncontrolling interest was measured at a cost of $0.8 million for the 49% interest.
As of September 30, 2025, two Real Estate Entities continue to be consolidated in our financial statements as VIEs. We expect that hospitals we open in the future may be leased from new Real Estate Entities which may be owned in whole or part by related parties. Third-party lenders to these entities may require that we provide a guarantee or become co-borrowers under mortgage indebtedness and financings for such facilities. In such instances, we may be required to consolidate these new Real Estate Entities in our financial statements as VIEs.
Corporate and other costs. Corporate and other costs in the nine months ended September 30, 2025 totaled $153.4 million as compared to $38.2 million for the same period in 2024, an increase of 301.4%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to an increase in stock-based compensation of $117.7 million related to obligations for under-construction and ramping hospitals, and an increase in general and administrative expenses of $4.7 million, offset by the absence of any impairments of assets or goodwill recognized in 2025 period.
Nonoperating items
Interest expense. Interest expense was $17.3 million for the nine months ended September 30, 2025 as compared with $14.9 million for the same period in 2024. The increase in interest expense in 2025 is primarily due to the finance lease of the new facility openings throughout 2024 that are fully operating in 2025.
Gain on warrant liability. Gain on warrant liability was zero in the nine months ended September 30, 2025 as compared to a $1.1 million gain for the same period in 2024. All relevant warrants were exercised by November 2024.
Income tax expense. Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
Liquidity and Capital Resources
As of September 30, 2025, we had $166.0 million of cash and equivalents, compared to $40.6 million of cash and equivalents as of December 31, 2024.
Significant sources and uses of cash during the first nine months of 2025.
Sources of cash:
•Cash from operating activities was $177.7 million, primarily driven by significantly higher net income largely attributable to favorable developments in the arbitration process, which contributed to higher revenue.
•Borrowings under lines of credit of $5.0 million
Uses of cash:
•Repayments of lines of credit and notes payable $11.6 million
•Distributions, net of contributions, to noncontrolling interests totaled $41.9 million; and
•Repayments of finance leases totaled $4.0 million
•Acquisitions of property and equipment totaled $1.1 million
•Payments for acquisitions of businesses, net of cash acquired totaled $4.0 million
Future sources and uses of cash. Our operating activities are financed with cash on hand which is generated from revenues. Most of our hospital facilities are leased from various lessors including related parties. These leases are presented in our unaudited condensed consolidated balance sheets unless the lease is from a consolidated Real Estate Entity. Our growth plans include the development of new hospital locations. We expect that in many of these locations we will lease facilities from newly established entities partially owned by related parties.
We routinely enter into equipment lease agreements to procure new or replacement equipment and may also finance these purchases with term debt. We have smaller lines of credits available for working capital purposes and are presently working to supplement or replace these with larger financing commitments. These larger financing commitments are subject to market conditions and we may not be able to obtain such larger financing commitments at favorable economic terms or at all.
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Indebtedness. The Company’s indebtedness as of September 30, 2025 is presented in Item I, “Financial Statements – Note 8 – Debt” and our lease obligations are presented in Item I, “Financial Statements—Note 9 – Leases.”
We have entered into private debt arrangements with banking institutions for the purchase of equipment and to provide working capital and liquidity through cash and lines of credit. Unless otherwise delineated above, these debt arrangements are obligations of Nutex and/or its wholly-owned subsidiaries. Consolidated Real Estate Entities have entered into private debt arrangements with banking institutions for purposes of purchasing land, constructing new emergency room facilities and building out leasehold improvements which are leased to our hospital entities. Nutex is a guarantor or, in limited cases, a co-borrower on the debt arrangements of the Real Estate Entities for the periods shown.
At September 30, 2025, the Company was not subject to any financial covenants under its outstanding debt arrangements and we had remaining availability of $5.9 million under outstanding lines of credit.
Off-Balance Sheet Arrangements
As of September 30, 2025, we had no material off-balance sheet arrangements.
Non-GAAP Financial Measures
Adjusted EBITDA. Adjusted EBITDA is used as a supplemental non-GAAP financial measure by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.
We define Adjusted EBITDA as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for stock-based compensation, certain defined items of expense and any acquisition-related costs and impairments. Interest expense includes interest on lease liabilities, which is a component of total finance lease cost. A reconciliation of net income to Adjusted EBITDA is included below.
Beginning in the first quarter of 2025, we have updated our presentation of Adjusted EBITDA to separately disclose finance lease payments related to leases under ASC 842. We believe this change provides greater transparency into our operating performance.
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Adjusted EBITDA is not intended to serve as an alternative to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. Adjusted EBITDA follows (in thousands):
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA: | (Updated) | (Prior) | (Updated) | (Prior) | |||||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | $ | 55,435 | $ | 55,435 | $ | (8,788) | $ | (8,788) | |||||||||||||||
| Depreciation and amortization | 5,003 | 5,003 | 4,972 | 4,972 | |||||||||||||||||||
| Interest expense, net | 5,452 | 5,452 | 5,381 | 5,381 | |||||||||||||||||||
| Income tax expense | 27,140 | 27,140 | 4,585 | 4,585 | |||||||||||||||||||
| Allocation to noncontrolling interests | (1,243) | (1,243) | (1,808) | (1,808) | |||||||||||||||||||
| EBITDA | 91,787 | 91,787 | 4,342 | 4,342 | |||||||||||||||||||
| Loss on warrant liability | — | — | 6,734 | 6,734 | |||||||||||||||||||
| Impairment of assets | — | — | 424 | 424 | |||||||||||||||||||
Finance lease payments(1) | (6,474) | — | (3,794) | — | |||||||||||||||||||
| Stock-based compensation | 13,217 | 13,217 | 1,964 | 1,964 | |||||||||||||||||||
| Adjusted EBITDA | $ | 98,530 | $ | 105,004 | $ | 9,670 | $ | 13,464 | |||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA: | (Updated) | (Prior) | (Updated) | (Prior) | |||||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | $ | 58,955 | $ | 58,955 | $ | (9,517) | $ | (9,517) | |||||||||||||||
| Depreciation and amortization | 15,343 | 15,343 | 13,691 | 13,691 | |||||||||||||||||||
| Interest expense, net | 17,250 | 17,250 | 14,880 | 14,880 | |||||||||||||||||||
| Income tax expense | 55,138 | 55,138 | 5,868 | 5,868 | |||||||||||||||||||
| Allocation to noncontrolling interests | (3,815) | (3,815) | (4,980) | (4,980) | |||||||||||||||||||
| EBITDA | 142,871 | 142,871 | 19,942 | 19,942 | |||||||||||||||||||
| Loss on warrant liability | — | — | 1,073 | 1,073 | |||||||||||||||||||
| Impairment of assets | — | — | 3,898 | 3,898 | |||||||||||||||||||
| Impairment of goodwill | — | — | 3,197 | 3,197 | |||||||||||||||||||
Finance lease payments(1) | (19,512) | — | (13,957) | — | |||||||||||||||||||
| Stock-based compensation | 119,606 | 119,606 | 1,952 | 1,952 | |||||||||||||||||||
| Adjusted EBITDA | $ | 242,965 | $ | 262,477 | $ | 16,105 | $ | 30,062 | |||||||||||||||
(1)Finance lease payments consist of cash payments for financing leases under ASC 842, which should be deducted from EBITDA. We believe this change is useful to investors to evaluate the ongoing operating performance of our business.
Significant Accounting Policies
The preparation of financial statements and related disclosures in accordance with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2024 describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The Company’s critical accounting policies that are impacted by judgments, assumptions and estimates are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024. Since December 31, 2024, there have been no material changes in the Company’s accounting policies that are impacted by judgments, assumptions and estimates.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
With respect to the three and nine months ended September 30, 2025, there have been no material changes in our primary market risk exposures or how those exposures are managed since the information disclosed in our 2024 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In accordance with Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision of our CEO and our CFO, the effectiveness of disclosure controls and procedures as of September 30, 2025. Based on this evaluation, the Company concluded that our disclosure controls and procedures were not effective as of September 30, 2025 due to the material weakness previously identified as described below.
Previously Reported Material Weaknesses. We previously identified material weaknesses in our internal control over financial reporting in our Form 10-K/A for the year ended December 31, 2024, based on criteria established in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). Based on our assessment, the following material weaknesses were identified:
•The Company had ineffective design, implementation and operation controls over logical access, program change management and vendor management controls:
1)appropriate restrictions that would adequately prevent users from gaining inappropriate access to the financially relevant systems.
2)IT program and data changes affecting the Company’s financial IT applications and underlying accounting records, are identified, tested, authorized and implemented appropriately to validate that data produced by its relevant IT systems were complete and accurate. Automated process-level and manual controls that are dependent upon the information derived from such financially relevant systems were also determined to be ineffective as a result of such deficiency.
3)key third party service provider SOC reports were obtained and reviewed.
•Business process controls across all financial reporting processes were not effectively designed and implemented to properly address the risk of material misstatement, including controls without proper segregation of duties between preparer and reviewer and key management review controls.
•Ineffective design and implementation of controls over the completeness and accuracy of information included in key spreadsheets supporting the financial statements.
•The Company had ineffective design, implementation and operation of controls to timely and accurately analyze and account for complex and non-routine accounting matters.
Management has concluded that, based on applying the COSO criteria, as of December 31, 2024, the Company’s internal control over financial reporting was not effective to provide reasonable assurance of the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Remediation Plans. These material weaknesses did not result in a material misstatement of the Company’s consolidated financial statements for the periods presented. In 2024, the Company began designing and implementing internal control measures to remediate the reported material weaknesses, and these efforts continued in 2025. The Company’s efforts included the following:
•Hiring qualified accounting and internal control professionals with the appropriate experience and training to design, implement, execute and monitor our system of internal controls. During the first quarter of 2025, we hired a new Director of Internal Audit and added new positions across our finance, accounting and internal audit functions to support remediation efforts and organizational growth.
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•Continuing to engage an accounting firm to assist in the proper design, implementation and testing of internal controls over financial reporting.
•Leveraging existing functions more effectively in our enterprise resource planning system to continue to reduce reliance on manual processes and spreadsheets supporting the financial statements.
While we believe that these efforts will continue to improve our internal control over financial reporting, our remediation efforts are ongoing and will require validation and testing of the design and operating effectiveness of internal controls. The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight. We will not be able to conclude whether the steps we are taking will fully remediate the remaining material weakness in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness. We may also conclude that additional measures may be required to remediate the material weakness in our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting. We are taking actions to remediate the material weaknesses relating to our internal control over financial reporting, as described above. Except as otherwise described herein, there were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Disclosure Controls and Procedures. Our senior members of management do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The Company, its consolidated subsidiaries or VIEs may be named in various claims and legal actions in the normal course of business. Based upon counsel and management’s opinion, except for the items listed below, the outcome of such matters is not expected to have a material adverse effect on the unaudited condensed consolidated financial statements.
On April 14, 2025, VLS Emergency Medicine, LLC, Astra Assets, LLC, Right on Hereford, LLC, and Nexus Group Two LLC (collectively, the “ABQ Plaintiffs”) filed an Original Petition against Nutex Health Holdco LLC (“Nutex Holdco”) and Thomas Vo, MD in the District Court of Harris County, Texas, Case No. 2025-26239. The ABQ Plaintiffs allege that the May 16, 2024 Amendment to the Contribution Agreement, dated November 23, 2021, was wrongfully executed by Nutex Holdco and Dr. Vo, in his capacity as the authorized “Owner Representative” (as defined in the Contribution Agreement). The Amendment clarifies that the Parent Stock Price Floor, as defined in the Contribution Agreement, is adjusted for the 2024 Reverse Stock Splits. The Parent Stock Price Floor is used in the determination of the number of shares to be issued to the ABQ Plaintiffs. Rejecting the reverse-stock-split adjustment, the ABQ Plaintiffs demand the issuance of a higher number of shares, which would force the Company to grant the ABQ Plaintiffs a higher percentage ownership in the Company, to the detriment of the Company’s other stockholders. Nutex Health disputes the allegation that the Amendment was wrongfully executed and intends to defend against the ABQ Plaintiffs’ demands. The Company cannot guarantee that the ABQ Plaintiffs will not prevail in their demands, which would have a materially adverse effect on the Company and its stockholders. Please see Item 1A. Risk Factors - Our obligation to issue additional shares of our common stock to former owners of under construction hospitals may cause additional dilution of our current stockholders.
Nutex Holdco and Dr. Vo have filed their answers and counterclaims, addressing the allegations set forth and presenting their own claims against the ABQ Plaintiffs. The parties are currently engaged in the initial stages of written discovery and document production. At this time, no depositions have been conducted, and no dispositive motions have been filed. A trial date for this case has not been set.
In addition, on May 30, 2025, JBS Fort Smith Hospital Investors, LP, Copper Oaks Emergency Physicians, LLC, KG4JB 5578, PLLC, Mark R. Rucker, PLLC, Premier Macy Management Holdings, LLC, Nicut EMS, LLC, and Tribbey Emergency Services,
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LLC (collectively the “Former Ft. Smith Owners”) submitted a Notice of Claim and Draft Complaint (“Notice”) to Nutex Holdco. In the Notice, the Former Ft. Smith Owners demand that the pre-reverse split Parent Stock Price Floor shall be used in the calculation of the number of shares to be issued. The parties are currently engaged in settlement discussions. The Company is unable to predict the outcome of these discussions or determine whether any resolution of the demands made in the Notice will have a materially adverse effect on the Company and its stockholders.
Securities Action
On August 22, 2025, a putative securities class action complaint was filed in the United States District Court for the Southern District of Texas (Anjana Bhagavan v. Nutex Health Inc., Case No. 4:25-cv-03999) on behalf of the plaintiff and all other persons (other than defendants) who purchased Nutex Health Inc.’s stock between August 8, 2024 and August 14, 2025. The complaint names Nutex Health Inc., its Chairman of the Board and Chief Executive Officer, its Chief Financial Officer and its President and Director as defendants and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
The plaintiff alleges that the defendants made material misstatements and omissions in the Company’s public filings relating to the alleged conduct of a third-party vendor who assisted the Company in pursuing claims against health plans under the independent dispute resolution process of the No Surprises Act. The plaintiff also alleges that the defendants made material misstatements and omissions related to the Company’s internal accounting controls. The plaintiff seeks unspecified damages, fees, and interest on behalf of himself and the putative class.
The Company has not yet responded to the complaint. The court has not yet issued a scheduling order or set the case for trial. No discovery has occurred. The Company is unable to predict the outcome of the litigation or estimate the potential financial impact, but an adverse ruling could have a material adverse effect on the Company’s financial position or results of operations.
Derivative Actions
On September 8, 2025, a purported stockholder filed a derivative action on behalf of Nutex Health Inc. in the United States District Court for the Southern District of Texas, captioned Juan Camilo Jimenez, derivatively on behalf of Nutex Health Inc., Case No. 4:25-cv-04253, naming as defendants the Company’s Chief Executive Officer, its Chief Financial Officer and its President, along with the current members of its Board of Directors (other than Frank E. Jaumot) and a director who recently retired from the Board of Directors, alleging, among other things, violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. In addition, on September 11, 2025, a second purported stockholder filed a derivative action on behalf of Nutex Health Inc. in the United States District Court for the Southern District of Texas, captioned Michael Minckler, derivatively on behalf of Nutex Health Inc., nominal defendant v. Thomas T. Vo, et al; Case no. 4:25-cv-4330 containing nearly identical allegations. The derivative actions arise from the same operative facts as alleged in the securities class action, and they seek orders permitting the plaintiff to maintain the action derivatively on behalf of the Company, awarding unspecified damages allegedly sustained by the Company, awarding restitution from the individual defendants and requiring the Company to make certain reforms to its corporate governance and internal procedures.
The Company has stipulated to the consolidation of the two derivative actions but has not yet responded to the complaints. The court has not yet issued a scheduling order or set either case for trial. No discovery has occurred. The Company is unable to predict the outcome of the litigation or estimate the potential financial impact, if any.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Risk Factors” included in our Form 10-K for the year ended December 31, 2024 and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Short sellers of our stock may be manipulative and may drive down the market price of our common stock.
Short selling is the practice of selling securities that the seller does not own but rather has borrowed or intends to borrow from a third party with the intention of buying identical securities at a later date to return to the lender. A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as
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the short seller expects to pay less in that purchase than it received in the sale. Since it is in the short seller’s interest for the price of the stock to decline, some short sellers publish, or arrange for the publication of, opinions or characterizations regarding the relevant issuer, its business prospects and similar matters calculated to or which may create negative market momentum, which may permit them to obtain profits for themselves as a result of selling the stock short. Issuers whose securities have historically had limited trading volumes or have been susceptible to relatively high volatility levels can be particularly vulnerable to such publications, sometimes known as “short seller attacks.”
On July 22, 2025, a short seller report that contained various allegations against the Company was published, that had an adverse impact on the market price of our common stock. This report disclosed the writer had a short position with respect to our common stock. On July 23, 2025, the closing price of our common stock was $92.90, representing a decrease of $18.29 or 16.4% compared to the closing price of our common stock on July 21, 2025, prior to the publication of the report. We cannot assure you that others will not publish similar misleading reports in the future. The publication of any such commentary regarding us may bring about a temporary, or long term, decline in the market price of our common stock. Similar declines in the market price of our common stock may occur in the future, in connection with such commentary by short sellers or otherwise.
In addition, following the publication of short seller reports, companies targeted by these short seller publications have sometimes faced securities class action litigation against the company as a result. Additionally, allegations made by short sellers, whether substantiated or not, could result in investigations by regulators, including the Securities and Exchange Commission. If we were subject to such investigations as a result of such allegations, we could incur substantial costs defending the Company from the lawsuit or such investigation. These could also divert the time and attention of our management from our business and result in negative publicity, which could significantly harm our profitability and reputation.
We may be subject to risks of litigation and disputes.
From time to time, we have been and may become involved in disputes and litigation with former doctor owners, stockholders, government and regulatory agencies or other parties. Such actions could result in the imposition of various remedies such as injunctions or monetary damages, which if awarded could materially and adversely harm our business, subject us to substantial defense costs and expenses, and divert resources and the attention of management from our business. For example, on August 22, 2025, the Company and certain current and former officers and directors were named in a putative class action lawsuit filed in the United States District Court for the Southern District of Texas. The complaint alleges violations of federal securities laws arising out of alleged misstatements or omissions by the defendants during the alleged class period and seeks, among other things, damages and attorneys’ fees and costs on behalf of the putative class. Following the putative class action lawsuit, in September 2025, the Company and certain of its directors and officers were named in two derivative action lawsuits filed in the United States District Court for the Southern District of Texas. Each of the derivative actions was brought on behalf of the Company by a putative stockholder alleging, among other things, breaches of fiduciary duties and violations of federal securities laws. The complaints seek, among other things, damages and attorneys’ fees and costs. In addition, from time to time, we are, and may become, the subject of inquiries, requests for information, investigations, or other actions by government and regulatory agencies regarding our business. Any such matters, regardless of their merit or resolution, could be costly and divert the efforts and attention of our management, damage our reputation, or otherwise adversely affect our business.
Our obligation to issue additional shares of our common stock to former doctor owners of under construction hospitals may cause significant dilution of the voting power of our current stockholders.
We may be required to issue the additional shares of our common stock to former doctor owners of hospitals that were under construction and non-operational prior to our April 1, 2022 merger. Such former owners, including Dr. Vo, transferred their hospital interests to Nutex Health Holdco LLC in connection with the merger. The aggregate number of additional shares we may be required to issue could significantly dilute the voting power of our existing stockholders. Any such additional shares, including the shares issued to Dr. Vo, will be subject to a 100% lock up for six months, with 66 2/3% of these shares locked up for one year, and, with respect to the remaining 33 1/3%, the lock up expiring 18 months after issuance.
As approved by the stockholders on April 1, 2022, the number of additional shares issuable is equal to (a)(i) the trailing twelve months of earnings before interest, taxes, depreciation and amortization, as determined at the end of each such hospital’s initial 24-month operation period multiplied by (ii) 10; minus (iii) the aggregate amount of the former doctor owners’ capital contribution; minus (iv) such former doctor owners’ pro rata share of the aggregate debt, with the resulting value divided by (b) the greater of (i) the price of the common stock at the end of the operational period or (ii) $420.00 (representing $2.80 as adjusted for the 2024 Reverse Stock Splits, and subject to further adjustment for future stock dividends, combinations, splits, recapitalizations and the like).
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With respect to seven hospitals, the initial 24-month operational periods expired on or prior to September 30, 2025. Based on the formula described above, and assuming an aggregate 1,359,624 shares issued, the earn out shares will represent approximately 19.7% of outstanding shares as of September 30, 2025.
With respect to three additional hospitals with an initial 24-month operational period expiring on or prior to December 31, 2026, we estimate, based on current expectations, to issue approximately 218,600 additional shares, or 3.2% of our outstanding shares as of September 30, 2025. See Part I - Item 1 – Notes to Condensed Consolidated Financial Statements (unaudited) – Note 11. This estimated number of shares is calculated on a pro forma basis based on September 30, 2026 operating results and trading price. Since we cannot predict future operating results and trading prices, the actual number of additional shares issued may differ significantly from our estimate.
Former owners of certain under construction hospitals have disputed the number of additional shares issuable to them in accordance with the formula agreed upon at the time of the merger (as described above) and assert, among other things, that the number of shares in the calculation should not be adjusted for the 2024 Reverse Stock Splits. We disagree with these allegations but cannot predict the outcome of these disputes. (Refer to Item 1. -- Legal Proceedings.)
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Mine Safety Disclosures
Not Applicable
Item 5. Other Information
Trading Arrangements
During the three months ended September 30, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted terminated
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Item 6. Exhibits
| Exhibit No. | Description | ||||
| 31.1* | |||||
| 31.2* | |||||
| 32.1* | |||||
| 32.2* | |||||
| 101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
*Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 19, 2025.
| Nutex Health Inc. | ||||||||
| By: | /s/ Thomas T. Vo | |||||||
| Thomas T. Vo | ||||||||
| Chief Executive Officer and Chairman of the Board (principal executive officer) | ||||||||
| By: | /s/ Jon C. Bates | |||||||
| Jon C. Bates | ||||||||
| Chief Financial Officer (principal financial officer and principal accounting officer) | ||||||||
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