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What changed in Nutex Health, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Nutex Health, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+548 added−422 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-31)

Top changes in Nutex Health, Inc.'s 2025 10-K

548 paragraphs added · 422 removed · 284 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

84 edited+56 added−33 removed42 unchanged
Biggest changeSince the second quarter of 2022, we deconsolidated 18 Real Estate Entities after the third-party lenders released our guarantees of associated mortgage loans, leaving two Real Estate Entities as current VIEs consolidated in our financial statements. ​ Sources of Revenue ​ The following table shows revenue for each of our operating segments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hospital division revenue ​ $ 449,063,683 ​ $ 218,070,397 ​ $ 198,508,245 Population health management division revenue ​ ​ 30,884,950 ​ ​ 29,575,919 ​ ​ 20,786,061 Total revenue ​ $ 479,948,633 ​ $ 247,646,316 ​ $ 219,294,306 ​ Our hospital division receives payment for facility services rendered by us from federal agencies, private insurance carriers, and patients.
Biggest changeSources of Revenue The following table shows revenue for each of our operating segments (in thousands): Year Ended December 31, 2025 2024 2023 Hospital division revenue $ 844,162 $ 449,064 $ 218,070 Population health management division revenue 31,095 30,885 29,576 Total revenue $ 875,257 $ 479,949 $ 247,646 Our hospital division receives payment for facility services rendered by us from federal agencies, private insurance carriers, and patients.
Of particular importance are: ​ • No Surprises Act; • the federal physician self-referral law, commonly referred to as the Stark Law; • the federal Anti-Kickback Act; • the criminal healthcare fraud provisions of the Health Insurance Portability and Accountability Act (HIPAA); • the federal False Claims Act; • reassignment of payment rules that prohibit certain types of billing and collection; • similar state law provisions pertaining to anti-kickback, self-referral and false claims issues; • state laws that prohibit general business corporations, such as us, from practicing medicine; • laws that regulate debt collection practices as applied to our debt collection practices; ​ No Surprises Act.
Of particular importance are: • No Surprises Act; • the federal physician self-referral law, commonly referred to as the Stark Law; • the federal Anti-Kickback Act; • the criminal healthcare fraud provisions of the Health Insurance Portability and Accountability Act (HIPAA); • the federal False Claims Act; • reassignment of payment rules that prohibit certain types of billing and collection; • similar state law provisions pertaining to anti-kickback, self-referral and false claims issues; • state laws that prohibit general business corporations, such as us, from practicing medicine; and • laws that regulate debt collection practices as applied to our debt collection practices.
We are subject to a number of federal and state laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and security laws, data breach notification laws, and consumer protection laws and regulations (e.g., Section 5 of the FTC Act).
Data Privacy and Security Laws . We are subject to a number of federal and state laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and security laws, data breach notification laws, and consumer protection laws and regulations (e.g., Section 5 of the FTC Act).
In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, many of which are intended to contain or reduce healthcare costs.
Healthcare Reform . In the United States, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, many of which are intended to contain or reduce healthcare costs.
In addition, network providers are required under their participating provider agreements with Nutex to have established an ongoing quality assurance program. Moreover, Nutex’ contracts may allow Nutex to withhold compensation from time to time based upon the providers meeting certain quality metrics, including HEDIS quality measures and care coordination metrics. ​ State Corporate Practice of Medicine and Fee-Splitting Laws .
In addition, network providers are required under their participating provider agreements with Nutex to have established an ongoing quality assurance program. Moreover, Nutex’s contracts may allow Nutex to withhold compensation from time to time based upon the providers meeting certain quality metrics, including HEDIS quality measures and care coordination metrics. State Corporate Practice of Medicine and Fee-Splitting Laws .
The Physician LLCs receive payment for doctor services from these same sources. On average, greater than 90% of our net patient service revenue is paid by insurers, federal agencies, and other non-patient third parties. The remaining revenues are directly paid by our patients in the form of copays, deductibles, and self-payment.
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 directly paid by our patients in the form of copays, deductibles, and self-payment.
Nutex’ credentialing program is designed to meet CMS and the National Committee for Quality Assurance, or NCQA, credentialing requirements as well as applicable federal and state laws. Providers are generally recredentialed every three years or more often if necessary, which is consistent with industry guidelines.
Nutex’s credentialing program is designed to meet CMS and the National Committee for Quality Assurance, or NCQA, credentialing requirements as well as applicable federal and state laws. Providers are generally recredentialed every three years or more often if necessary, which is consistent with industry guidelines.
On our Internet website, http://www.nutexhealth.com, on the “Investors” webpage under the caption “SEC Filings”, we post the following recent filings as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. 12 Table of Contents
On our Internet website, http://www.nutexhealth.com, on the “Investors” webpage under the caption “SEC Filings,” we post the following recent filings as soon as reasonably practicable after they are electronically filed with or furnished to the 13 Table of Contents SEC: our annual reports on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.
The implementation of cost containment measures or other 10 Table of Contents healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on our business. ​ Further, healthcare providers and industry participants are also subject to a growing number of requirements intended to promote the interoperability and exchange of patient health information.
The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on our business. Further, healthcare providers and industry participants are also subject to a growing number of requirements intended to promote the interoperability and exchange of patient health information.
A determination of non-compliance against us and/or our affiliated professional entities or other physician partners based on the reinterpretation of existing laws or adoption of new laws could lead to adverse judicial or administrative action, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of provider licenses, and/or restructuring of these arrangements. ​ Healthcare Fraud and Abuse Laws.
A determination of non-compliance against us and/or our affiliated professional entities or other physician partners based on the reinterpretation of existing laws or adoption of new laws could lead to adverse judicial or administrative action, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of provider licenses, and/or restructuring of these arrangements.
We believe that wait times are significantly lower than traditional ER settings and patients are welcomed by a friendly attentive staff and physician team. Our hospital division generally operates as an out-of-‎network provider and, as such, does not have negotiated reimbursement rates with insurance ‎companies.
We believe that wait times at our hospitals are significantly lower than traditional ER settings and patients are welcomed by a friendly attentive staff and physician team. Our hospital division generally operates as an out-of-network provider and, as such, does not have negotiated reimbursement rates with most insurance companies.
We contract with the physician entities to provide administrative services including claims billing and collections, financial accounting and other responsibilities. ​ • Hospital facility entity – Nutex typically has 60% or more equity ownership of new hospital facilities and in-market physicians usually own much of the remaining equity.
We contract with the physician entities to 4 Table of Contents provide administrative services, including claims billing and collections, financial accounting and other responsibilities. • Hospital facility entity – Nutex typically has 60% or more equity ownership of new hospital facilities and in-market physicians usually own much of the remaining equity.
A claim includes “any request or demand” for money or property presented to the United States government. Moreover, the government may assert that a claim including items and services resulting from a violation of the AKS or the Stark Law constitutes a false or fraudulent claim for purposes of the civil False Claims Act.
A claim includes “any request or demand” for money or property presented to the United States government. Moreover, the government may assert that a claim including items and services resulting from a violation of the AKS or the Stark Law constitutes a false or fraudulent claim for purposes of the civil FCA.
Once the physician provider network is secured, we work to contract with health insurance plans and begin enrolling patients in the new IPA. ​ We may achieve our growth strategy in part by acquiring or contracting existing healthcare facilities and IPAs.
Once the physician provider n etwork is secured, we work to contract with health insurance plans and begin enrolling patients in the new IPA. We may achieve our growth strategy in part by acquiring or contracting existing healthcare facilities and IPAs.
We are also seeking to establish IPAs in many of the locales where we operate micro-hospitals in order to leverage our community presence and relationships with in-market physicians. ​ We expect to open three new hospital facilities in 2025. These facilities are either under construction or in advanced planning stages.
We are also seeking to establish IPAs in many of the locales where we operate micro-hospitals in order to leverage our community presence and relationships with in-market physicians. We expect to open four new hospital facilities in 2026. These facilities are either under construction or in advanced planning stages.
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.
The arbitration process includes expenses associated with third party providers, including IDR entities, which typically collect fees at the beginning of the process, 9 Table of Contents before the claim award amounts are decided by arbitrators.
Once established, the IPA enrolls patients and negotiates managed care contracts with insurers to provide comprehensive care to their patients, often for a value-based fixed annual fee (capitation). The IPA entities are not owned by us but are managed by our MSO which provides management, administrative, and other support services.
Once established, the IPA enrolls patients and negotiates managed care contracts with insurers to provide comprehensive care to their patients, often for a value-based fixed annual fee known as a capitated rate. The IPA entities are not owned by us, but are managed by our MSO which provides management, administrative, and other support services.
Entities that are found to be in violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about privacy practices, or an audit by HHS, may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. ​ In addition, certain state laws, such as the California Confidentiality of Medical Information Act (CMIA), the California Consumer Privacy Act of 2018 (CCPA), and the California Privacy Rights Act (CPRA), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. ​ Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.
Entities that are found to be in violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about privacy practices, or an audit by HHS, may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. 12 Table of Contents In addition, certain state laws, such as the California Confidentiality of Medical Information Act (CMIA), the California Consumer Privacy Act of 2018 (CCPA), and the California Privacy Rights Act (CPRA), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
Our business strategy is to increase stockholder value through earnings growth and cash flow generation by: ​ • Developing and operating innovative micro-hospitals – We currently operate 24 micro-hospital facilities in 11 states and four IPAs.
Our business strategy is to increase stockholder value through earnings growth and cash flow generation by: • Developing and operating innovative micro-hospitals – We currently operate 26 micro-hospital facilities in 12 states and four IPAs.
Competition ​ The healthcare industry is highly competitive and highly fragmented. ‎We face competition in every aspect of our business, including in offering a favorable ‎payment structure for existing physician partners and attracting physician ‎partners who are not contracted with us, from a range of large and medium-sized local and ‎national companies that provide care under a variety of models that could attract patients, ‎providers, and payors.
We face competition in every aspect of our business, including in offering a favorable payment structure for existing physician partners and attracting physician partners who are not contracted with us, from a range of large and medium-sized local and national companies that provide care under a variety of models that could attract patients, providers, and payors.
We begin development of new IPAs by identifying underserved markets. As noted previously, we are focused on launching IPAs in markets around our micro-hospitals. Doing so will leverage our existing physician relationships and increase visibility of our micro-hospitals in the marketplace.
We begin development of new IPAs by identifying underserved markets. As noted previously, we are focused on launching IPAs in markets around our micro-hospitals. Doing so leverages our existing physician relationships and increases visibility of our micro-hospitals in the marketplace.
Federal expenditure for healthcare increased by 3.4% due to the initial impacts of the Inflation Reduction Act on federal Medicare spendings and faster spending growth for Medicare hospital and physician spending, while private health insurance spending increased by 11.5%.
Federal expenditure for healthcare increased by 5.5% due to the initial impacts of the Inflation Reduction Act on federal Medicare spending and faster spending growth for Medicare hospital and physician spending, while private health insurance spending increased by 8.8%.
We do not have direct ownership interest in these entities but they are owned and, in some instances, controlled by related parties, including our CEO. We consolidate the Real Estate Entities as VIEs in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans.
Other than the aforementioned properties, we do not have direct ownership interest in these entities, which are owned and, in some instances, controlled by related parties, including our CEO. We consolidate the Real Estate Entities we do not have direct ownership in as VIEs in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans.
We receive management fees that are based on gross capitation revenues of the IPAs or physician groups we manage. ​ Our Strategy Our mission is to make exceptional concierge-level healthcare more accessible to communities.
We receive management fees that are based on gross capitation revenues of the IPAs or physician groups we manage. 2 Table of Contents Our Strategy Our mission is to make exceptional concierge-level healthcare more accessible to people in the communities we serve.
The Physician LLCs employ the doctors who work in our hospitals. ‎The ‎Real Estate Entities, which generally have the same ownership as the related Physician LLCs, own the land and ‎hospital buildings in ‎which the hospitals operate and lease the buildings ‎to the hospitals.
The Real Estate Entities, which generally have the same ownership as the related Physician LLCs, own the land and hospital buildings in which the hospitals operate and lease the buildings to the hospitals.
These laws include, but are not limited to, federal and state anti-kickback, false claims, self-referral and other healthcare fraud and abuse laws. ​ The federal Anti-Kickback Statute, or AKS, prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in cash or kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
The federal Anti-Kickback Statute ("AKS"), prohibits, among other things, knowingly and willfully offering, paying, soliciting, or receiving remuneration, directly or indirectly, in cash or kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
Nutex also contracts with this entity to provide administrative services including financial accounting and other responsibilities. 4 Table of Contents ​ • Physician LLC entity – the in-market physicians create and independently own the physician entity. In certain states, state laws and regulations prohibit non-physician ownership of physician practices.
Nutex also contracts with this entity to provide administrative services, including financial accounting and other responsibilities. • Physician LLC entity – the in-market physicians create and independently own the physician entity. In certain states, state laws and regulations prohibit non-physician ownership of physician practices. The physician entity employs or contracts with physicians who staff the new location.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. ​ Several courts have interpreted AKS’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the AKS has been violated. ​ The AKS includes statutory exceptions and regulatory safe harbors that protect certain arrangements.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. 10 Table of Contents Several courts have interpreted AKS’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the AKS has been violated.
We believe our business, ‎partnership and operations model enables us to compete favorably. ‎ ​ 5 Table of Contents The Healthcare Industry ​ According to the Centers for Medicare & Medicaid Services, or CMS, national healthcare expenditures grew 7.5% in 2023 to $4.9 trillion.
We believe our business, partnership and operations model enables us to compete favorably. The Healthcare Industry According to the Centers for Medicare & Medicaid Services, or CMS, national healthcare expenditures grew 7.2% in 2024 to $5.3 trillion.
We currently have an IPA presence in the top three states for seniors, California, Florida, and Texas, which make up a quarter of the nation’s seniors.
We currently have an IPA presence in the top three states for seniors: California, Florida, and Texas, which make up a quarter of the nation’s seniors. Competition The healthcare industry is highly competitive and highly fragmented.
Such suits, known as qui tam actions, are pervasive in the healthcare industry. ​ 9 Table of Contents Further, the Civil Monetary Penalties Statute authorizes the imposition of civil monetary penalties, assessments, and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to offering remuneration to a federal health care program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive health care items or services from a particular provider.
Further, the Civil Monetary Penalties Statute authorizes the imposition of civil monetary penalties, assessments, and exclusion against an individual or entity based on a variety of prohibited conduct, including, but not limited to offering remuneration to a federal health care program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive health care items or services from a particular provider.
We plan to grow our operations by expanding our innovative micro-hospital model into several more states and developing IPAs which leverage our presence and physician relationships in each community we serve. 2 Table of Contents ​ • Providing a patient-centric care model – We fulfill a healthcare segment needing immediate and convenient access to primary and emergency care.
We plan to grow our operations by expanding our innovative micro-hospital model into additional states and developing IPAs which leverage our presence and physician relationships in each community we serve. • Providing a patient-centric care model – We fulfill the healthcare needs of patients seeking immediate and convenient access to primary and emergency care.
Many of these entities are owned in part, and in some cases, controlled by our Chairman and Chief Executive Officer. ​ The Physician LLCs are consolidated by the Company as variable interest entities (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. ​ 1 Table of Contents Population Health Division.
The Physician LLCs are consolidated by the Company as variable interest entities (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. 1 Table of Contents Population Health Management Division .
Our IPAs offer a trusted network of primary care physicians and specialists fostering closer patient-physician relationships. ​ Governmental Regulation The healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments.
We believe this need may be met in markets we service through our IPAs. Our IPAs offer a trusted network of primary care physicians and specialists fostering closer patient-physician relationships. Governmental Regulation The healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments.
To complement our organic growth plans, we may, in the normal course of business, consider and review opportunistic acquisitions. ​ Our Growth Strategy We are focused on expanding patient access to quality healthcare by expanding our clinical services at our existing facilities and by opening or acquiring new micro-hospital facilities in high demand areas of the United States.
Our Growth Strategy We are focused on expanding patient access to quality healthcare by broadening our clinical services at existing facilities and by opening or acquiring new micro-hospital facilities in high demand areas of the United States.
Violations may result in penalties or other disincentives. It is unclear at this time what the costs of compliance with the new rules will be, and what additional risks there may be to our business.
Violations may result in penalties or other disincentives. It is unclear at this time what the costs of compliance with the new rules will be, and what additional risks there may be to our business. Additionally, the potential impact of new policies that may be implemented as a result of the new administration is currently uncertain.
ACOs that fail to comply with such program requirements can face penalties or even termination of their participation in the Medicare shared savings program. ​ Additionally, the Center for Medicare and Medicaid Innovation continues to test an array of value-based alternative payment models, including the Global and Professional Direct Contracting Model to allow Direct Contracting Entities to negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
Additionally, the Center for Medicare and Medicaid Innovation continues to test an array of value-based alternative payment models, including the Global and Professional Direct Contracting Model to allow Direct Contracting Entities to negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
As noted, we generally operate as an out-of-‎network provider and, as such, do not have negotiated reimbursement rates with insurance ‎companies. ​ The population health management division recognizes 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.
As noted, we generally operate as an out-of-network provider and, as such, do not have negotiated reimbursement rates with most insurance companies. The population health management division recognizes revenue for capitated payments and management fees for services to IPAs and physician groups monthly.
Some state fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial insurers, not just those reimbursed by a federally funded healthcare program. ​ Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations, in the event that a corporate integrity agreement or other agreement is required to resolve allegations of noncompliance with these laws, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and/ or individual imprisonment. ​ Healthcare Reform.
Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations, in the event that a corporate integrity agreement or other 11 Table of Contents agreement is required to resolve allegations of noncompliance with these laws, the curtailment or restructuring of operations, exclusion from participation in governmental healthcare programs and/ or individual imprisonment.
Patient care is our number one priority and every single decision that we make as a company revolves around creating the best possible patient care.
Our vision is to be leaders in individualized patient care and innovators in the future of health care. Patient care is our number one priority and every single decision that we make as a company revolves around creating the best possible patient care.
CMS anticipates that total U.S. healthcare annual expenditures will reach nearly $7.7 trillion by 2032, accounting for approximately 19.7% of the total U.S. gross domestic product. ​ Hospital services, the market within the healthcare industry in which we primarily operate, is the largest single category of healthcare expenditures.
CMS anticipates that total U.S. healthcare annual expenditures will account for approximately 20.3% of the total U.S. gross domestic product by 2033. 5 Table of Contents Hospital services, the market within the healthcare industry in which we primarily operate, is the largest single category of healthcare expenditures.
Our licensed micro-hospitals average approximately 15,000 to 25,000 square feet and include seven to eight emergency treatment rooms, two to ten in-patient beds for both short- and long-term stays and advanced imaging equipment, laboratory and pharmacy.
Most of our licensed micro-hospitals average approximately 15,000 to 25,000 square feet and include seven to eight emergency treatment rooms, two to ten in-patient beds for both short- and long-term stays and advanced imaging equipment, laboratory and pharmacy services. Our staffing at each facility includes four to ten physicians and hospitalists depending on the community’s needs.
Our ability to compete successfully varies from location to location and depends on a number of factors that include, but are not limited to: the number of competing facilities in the local market and the types of services available at those facilities, our local reputation for quality care of members, the commitment and expertise of our medical staff, our local service offerings and community programs, the cost of care in each locality, and the physical appearance, location, age and condition of our facilities. ​ Our growth strategy and our business could be ‎adversely affected if we are not able to continue to operate in existing geographies, successfully ‎expand into new geographies or maintain or establish new relationships with ‎physician partners.
Our ability to compete successfully varies from location to location and depends on a number of factors that include, but are not limited to, the number of competing facilities in the local market and the types of services available at those facilities, our local reputation for quality care of members, the commitment and expertise of our medical staff, our local service offerings and community programs, the cost of care in each locality, and the physical appearance, location, age and condition of our facilities.
Nutex does not own any of the real estate entities but enters into a long-term market rate lease of the facility for its operations with the real estate entity.
In some instances, Nutex may participate as a co-borrower or guarantor of this indebtedness. Nutex does not own any of the real estate entities, but enters into a long-term market rate lease of the facility for its operations with the real estate entity.
Generally, we place our micro-hospitals in larger suburban or rural locations. Before entering a new state, we investigate the regulation and licensing requirements for our business and the construction design and permitting requirements of the targeted community.
Generally, we place our micro-hospitals in larger suburban or rural locations. Before entering a new state, we investigate the regulation and licensing requirements for our business and the construction design and permitting requirements of the targeted community. Next, we identify and contract with in-market physicians who will co-invest with us and become the on-site management of the new facility.
We own and operate 24 ‎healthcare facilities across 11 ‎states and currently have an additional 10 de novo micro-hospitals under various stages of ‎development. ​ Our micro-hospitals generate revenue from both emergency services and in-patient services, providing operating leverage and significant earning potential of each facility.
As of December 31, 2025, we owned and operated 26 healthcare facilities across 12 states and had an additional nine de novo micro-hospitals under various stages of development. Our micro-hospitals generate revenue from both emergency services and in-patient services, providing operating leverage and significant earning potential at each facility.
Sanctions for failure to comply with applicable state and federal licensing, certification and other regulatory requirements include suspension, revocation or limitation of the applicable authorization, significant fines and penalties and/or an inability to receive reimbursement from government healthcare programs and other third-party payors. ​ Nutex’ providers must meet minimum requirements to apply for participation or continued participation with Nutex through a credentialing process, including, without limitation, having a valid, current medical license and DEA registration, if required for the 8 Table of Contents provider’s scope of practice, the absence of any debarment, suspension, exclusion or other restriction from receiving payments from any government or other third-party payor program, and clearing National Practitioner Data Bank of any reports and/or disciplinary actions.
Nutex providers must meet minimum requirements to commence participation or continue participation with Nutex through a credentialing process, including, without limitation, having a valid current medical license and DEA registration, if required for the provider’s scope of practice, the absence of any debarment, suspension, exclusion or other restriction from receiving payments from any government or other third-party payor program, and clearing National Practitioner Data Bank of any reports and/or disciplinary actions.
As such, we aim to attract and retain qualified and passionate partner doctors, hospitalists and support staff who represent a diverse array of perspectives and skills who work together as a cohesive team that embodies our values and support our mission. ​ Our ability to recruit and retain partner doctors, hospitalists and support staff depends on a number of factors, including providing ownership opportunities, competitive compensation and benefits, development and career advancement opportunities, and a collegial work environment.
As such, we aim to attract and retain qualified and passionate partner doctors, hospitalists and support staff who represent a diverse array of perspectives and skills who work together as a cohesive team that embodies our values and support our mission.
Construction of new facilities or major renovation of existing buildings to meet our specifications requires significant financial resources. In most cases, these financial resources are provided by a newly established real estate entity that is independently owned by the in-market physicians and other partners, including in many cases, members of our executive management team.
In most cases, these financial resources are provided by a newly established real estate entity that is independently owned by the in-market physicians and other partners, including in many cases, members of our executive management team. The real estate entities often enter into mortgage loans to finance the acquisition of the associated land or the build out of facilities.
Although this prohibition applies only to federal healthcare program beneficiaries, the routine waivers of copayments and deductibles offered to patients covered by commercial payors may implicate applicable state laws related to, among other things, unlawful schemes to defraud, excessive fees for services, tortious interference with patient contracts and statutory or common law fraud. ​ HIPAA also established federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, and knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
HIPAA also established federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, and knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Item 1. Business Overview ​ 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. Our hospital division implements and operates innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments (“HOPDs”).
Item 1. Business Overview Nutex Health Inc. (“Nutex Health” or the “Company”) is a physician-led, healthcare services and operations company with 26 hospital facilities (as of December 31, 2025) in 12 states (hospital division), and a primary care-centric, risk-bearing population health management division.
Our primary competitors are free-standing emergency departments and traditional large local hospital systems that are developing micro-hospitals to increase their footprint in their local communities.
Our primary competitors are free-standing emergency departments and traditional large local hospital systems that are developing micro-hospitals to increase their footprint in their local communities. Our competitors typically vary by geography, and we may also encounter competition in the future from other new entrants.
Beginning in September 2022, the Texas Medical Association (TMA) filed several actions in federal court, mainly seeking to invalidate the IDR related provisions of the final rule. ​ The TMA on November 30, 2022 filed a lawsuit challenging the methodology of the federal regulator’s calculation of the QPA amount under the final rules, which allows consideration of all negotiated rates, including those provided in contracts with providers who do not actually provide the particular service.
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).
None of our employees are covered by collective bargaining agreements, and we have not experienced any strikes or work stoppages related to labor relation issues.
Employees We had 944 full-time employees as of December 31, 2025, including our named executive officers. None of our employees are covered by collective bargaining agreements, and we have not experienced any strikes or work stoppages related to labor relation issues. We believe we have good relations with our employees.
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 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 paid to us monthly in the period services are provided based on the number of enrollees selecting us as their healthcare provider.
We are subject to a number of federal and state healthcare regulatory laws that restrict certain business practices in the healthcare industry.
Healthcare Fraud and Abuse Laws . We are subject to a number of federal and state healthcare regulatory laws that restrict certain business practices in the healthcare industry. These laws include, but are not limited to, federal and state anti-kickback, false claims, self-referral and other healthcare fraud and abuse laws.
Our management and administrative teams provide a comprehensive suite of ‎operational and managerial services to hospitals, including management, billing, collections, human resources and recruiting, legal, accounting, regulatory, legislative ‎and marketing / business development.
When developing new hospitals, we provide a turn-key process from location selection, real estate design, and development of the facility to staffing, training and operations. Our corporate management and administrative teams provide a comprehensive suite of operational and managerial services to our hospitals, including management, billing, collections, human resources and recruiting, legal, accounting, regulatory, legislative and marketing / business development.
Our hospital division develops and operates a network of micro-hospitals, specialty hospitals and HOPDs providing comprehensive and high-quality 24/7 care. Our full-service care delivery model provides concierge-level care traditionally ‎offered by larger hospitals in a ‎patient-friendly and cost-effective setting.
Our full-service care delivery model provides concierge-level care traditionally offered by larger hospitals in a patient-friendly and cost-effective setting.
We believe opportunities exist in selected markets to create micro-hospitals serving the community’s emergency needs which expand the reach of healthcare services and have lower wait times for care than often seen in larger hospital emergency departments. ​ Physician and clinical services expenditures grew 7.4% to $978.0 billion in 2023, faster growth than the 4.6% in 2022.
Patients needing the most complex care are more often served by larger and/or more specialized urban hospitals. We believe opportunities exist in selected markets to create micro-hospitals serving the community’s emergency medical needs which expand the reach of healthcare services and have lower wait times for care than often seen in larger hospital emergency departments.
Rather, the government may evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and may be subject to greater scrutiny by enforcement agencies. ​ The Stark Law prohibits a physician who has a financial relationship, or who has an immediate family member who has a financial relationship, with entities providing designated health services, or DHS, from referring Medicare and Medicaid patients to such entities for the furnishing of DHS, unless an exception applies.
The Stark Law prohibits a physician who has a financial relationship, or who has an immediate family member who has a financial relationship, with entities providing designated health services, or DHS, from referring Medicare and Medicaid patients to such entities for the furnishing of DHS, unless an exception applies.
Building out IPA networks in the same communities as our micro-hospitals help drive patient volume and result in greater revenue from increased capitation and full-risk contracts.
Building out IPA networks in the same communities as our micro-hospitals helps drive patient volume and results in greater revenue from increased capitation and full-risk contracts. To complement our organic growth plans, we may, in the normal course of business, consider and review opportunistic acquisitions.
It also has the added benefit of reducing healthcare costs as extended hospital stays and more costly treatments may be avoided. ​ Consumers desire affordable primary care with access to specialists as needed. We believe this need may be met in markets we service through our IPAs.
Preventative primary care is an important focus of U.S. healthcare education to consumers with the goal of improving patient care outcomes through early detection and treatment of illnesses. It also has the added benefit of reducing healthcare costs as extended hospital stays and more costly treatments may be avoided. Consumers desire affordable primary care with access to specialists as needed.
Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral. ​ The Federal False Claims Act, or FCA, prohibits a person from knowingly presenting, or caused to be presented, a false or fraudulent request for payment from the federal government, or from making a false statement or using a false record to have a claim approved.
The Stark Law also prohibits the entity from billing for any such prohibited referral. Unlike the AKS, the Stark Law is violated if the financial arrangement does not meet an applicable exception, regardless of any intent by the parties to induce or reward referrals or the reasons for the financial relationship and the referral.
We consolidate the IPA entities in our financial statements as VIEs since we manage these entities. ​ Real Estate Division. 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.
In total, the Company’s IPAs now have approximately 38,000 members across their platform, including commercial and Medicaid managed care members. We consolidate the IPA entities in our financial statements as VIEs since we manage these entities. Real Estate Division . The Real Estate Entities own the land and hospital buildings which are leased to our hospital entities.
Further, state regulatory stances regarding downstream risk-sharing arrangements can change rapidly and codified provisions may not keep pace with evolving risk-sharing mechanisms and other new value-based reimbursement models.
Further, state regulatory stances regarding downstream risk-sharing arrangements can change rapidly and codified provisions may not keep pace with evolving risk-sharing mechanisms and other new value-based reimbursement models. Certain of the states where we currently operate or may choose to operate in the future regulate the operations and financial condition of risk bearing organizations like us and our affiliated providers.
According to the TMA, as of January 24, 2025, the nonrefundable administrative fee is $115 per party per dispute and the certified IDR entity fee ranges from $200 to $400 for single determinations and $268 to $1,173 for batched determinations. ​ Future Developments.
According to the CMS, as of July 23, 2025, the nonrefundable administrative fee was $115 per party per dispute and the certified IDR entity fee ranged from $375 to $800 for single determinations and $75 to $1,150 for batched determinations.
We invest in those areas in an effort to ensure that we continue to be the employer of choice for our team members. ​ Where You Can Find More Information We file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the Securities and Exchange Commission (the “SEC”).
Where You Can Find More Information We file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the Securities and Exchange Commission (the “SEC”). Our SEC filings are also available to the public from the SEC’s internet site at http://www.sec.gov.
We believe we have good relations with our employees. ​ Human Capital Management ​ Attracting, developing, and retaining talented people who embrace our culture, execute our strategy, and enable us to compete effectively in our industry is critical to our success.
Human Capital Management Attracting, developing, and retaining talented people who embrace our culture, execute our strategy, and enable us to compete effectively in our industry is critical to our success. Our mission is to make concierge-level health care more accessible to all communities we choose to enter, with a practice centered on patients’ experience and satisfaction.
Our patients with commercial insurance coverage have historically applied out of network benefits and patient co-pays to settle invoices.
Our patients with commercial insurance coverage have historically applied out of network benefits and patient co-pays to settle invoices. In the future, we expect to contract directly with more commercial payors whose reimbursement rates for our services are more closely aligned with the value offered.
According to the American Hospital Association, there are approximately 5,112 community hospitals in the U.S., which are not-for-profit owned, investor owned, or state or local government owned. Of these hospitals, approximately 35% are located in non-urban communities. Hospital facilities offer a broad range of healthcare services, including internal medicine, general surgery, cardiology, oncology, orthopedics, OB/GYN and emergency services.
Of these hospitals, approximately 35% are located in non-urban communities. Hospital facilities offer a broad range of healthcare services, including internal medicine, general surgery, cardiology, oncology, orthopedics, OB/GYN and emergency services. In addition, hospitals offer other ancillary services, including psychiatric, diagnostic, rehabilitation, home care and outpatient surgery services.
On August 24, 2023, the federal district court ruled to vacate several aspects of the regulations mandating the methodology for the QPA calculation.
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.
The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion.
The scope of these laws and the interpretations of them vary from state to state and are enforced by state courts and regulatory authorities, each with broad discretion. Some state fraud and abuse laws apply to items or services reimbursed by any payor, including patients and commercial insurers, not just those reimbursed by a federally funded healthcare program.
Our staffing at each facility includes four to ten physicians and hospitalists depending on the community’s needs. ​ Most of our hospitals have contractual relationships with separately owned professional entities (the “Physician LLCs”) and real estate entities (the “Real Estate Entities”).
Most of our hospitals have contractual relationships with separately owned professional entities (the “Physician LLCs”) and real estate entities (the “Real Estate Entities”). The Physician LLCs employ the doctors who work in our hospitals.
Next, we identify and contract with in-market physicians who will co-invest with us and become the on-site management of the new facility. ​ For each new hospital location, three entities are usually created: ​ • Real estate entity – our hospital facilities are designed and constructed to meet our specific needs and governmental regulations for micro-hospitals.
For each new hospital location, three entities are usually created: • Real estate entity – our hospital facilities are designed and constructed to meet our specific needs and governmental regulations for micro-hospitals. Construction of new facilities or major renovation of existing buildings to meet our specifications requires significant financial resources.
We were incorporated on April 13, 2000 in the state of Delaware. ​ Operating Segments ​ We report the results of our operations as three segments: (i) the hospital division, (ii) the PHM division and (iii) the real estate division. ​ Hospital Division.
Operating Segments We report the results of our operations as three segments: (i) the hospital division, (ii) the PHM division, and (iii) the real estate division. Hospital Division . Our hospital division develops and operates a network of micro-hospitals, specialty hospitals and HOPDs providing comprehensive and high-quality 24/7 care.
CMS projects that the hospital services category will grow at an average of 5.6% annually from 2027 through 2032, reaching nearly $2.4 trillion by 2032. ​ The U.S. hospital industry includes acute care, rehabilitation and psychiatric facilities that are either public (government owned and operated), not-for-profit private (religious or secular), or for-profit institutions (investor owned).
The U.S. hospital industry includes acute care, rehabilitation and psychiatric facilities that are either public (government owned and operated), not-for-profit private (religious or secular), or for-profit institutions (investor owned). According to the American Hospital Association, there are approximately 5,112 community hospitals in the U.S., which are not-for-profit owned, investor owned, or state or local government owned.
Other companies or hospital groups could enter the micro-hospital market in the future and divert some, or all, of our business.
Since there are no substantial capital expenditures required for providing healthcare services, as facilities and equipment may be leased, there are few financial barriers to entry. Other companies or hospital groups could enter the micro-hospital market in the future and divert some, or all, of our business.
The population health management (“PHM”) division owns and operates provider networks such as independent physician associations (“IPAs”). ​ We employ 800 full-time employees, contract 255 doctors at our facilities and partner with over 2,100 physicians and specialists within our networks. Our corporate headquarters is based in Houston, Texas.
We employ 944 full-time employees, contract more than 280 doctors at our facilities and partner with over 3,600 physicians and specialists within our IPA networks. Our corporate headquarters is based in Houston, Texas. We were incorporated on April 13, 2000 in the state of Delaware.
We have no ownership interests in either the Physician LLCs or Real Estate Entities, but provide back office accounting for each.
We have no ownership interest in any of the Physician LLCs and have a 51% interest in one of the Real Estate Entities, but provide back office accounting for each. Many of these entities are owned in part, and in some cases controlled, by our Chairman and Chief Executive Officer.
Relative spending for primary care in the U.S. is lower than that of many other developed nations. Preventative primary care is an important focus of U.S. healthcare education to consumers with the goal of improving patient care outcomes through early detection and treatment of illnesses.
Physician and clinical services expenditures grew 7.4% to $978.0 billion in 2023, faster growth than the 4.6% in 2022. Relative spending for primary care in the U.S. is lower than that of many other developed nations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, our hospital division generally operates as an out-of-‎network provider and, as such, does not have negotiated reimbursement rates with insurance ‎companies, adding to the complexity and potential uncertainty of the estimation process. ​ Our estimates with respect to the claims processing by insurance companies and our resulting cash collections may differ from previous estimated results, and we may be required to make periodic adjustments to our estimation process for new facts ‎or circumstances. ​ 16 Table of Contents Additionally, our estimates with respect to arbitration wins and our resulting cash collections from arbitration may differ due to significant administrative time built into the federal arbitration process and delays in collections. ​ Ultimate amounts collected may differ from anticipated collections, and, as a result, may impact our ability to generate revenue at expected levels. ​ Public health emergencies could negatively affect our operations, business and financial condition, and our ability to generate revenue could be negatively impacted if the U.S. economy remains unstable for a significant amount of time. ​ As a front-line provider of health care services, we have been and will be affected by the health and economic effects of public health emergencies such as COVID-19.
Biggest changeAdditionally, our estimates with respect to arbitration wins and our resulting cash collections from arbitration may differ due to significant administrative time built into the federal arbitration process and delays in collections. Ultimate amounts collected may differ from anticipated collections, and, as a result, may impact our ability to generate revenue at expected levels.
There can be no assurance that the market price of Common Stock will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: ​ • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • changes in the market’s expectations about our operating results; • success of competitors; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning us or the health population management industry in general; • operating and stock price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • our ability to meet compliance requirements; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Common Stock available for public sale; • any major change in our board of directors or management; • sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. ​ The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
There can be no assurance that the market price of Common Stock will not fluctuate widely or decline significantly in the future in response to a number of factors, including, among others, the following: • actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; • changes in the market’s expectations about our operating results; • success of competitors; • our operating results failing to meet the expectation of securities analysts or investors in a particular period; • changes in financial estimates and recommendations by securities analysts concerning us or the health population management industry in general; • operating and stock price performance of other companies that investors deem comparable to us; • our ability to market new and enhanced products on a timely basis; • changes in laws and regulations affecting our business; • our ability to meet compliance requirements; • commencement of, or involvement in, litigation involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of shares of our Common Stock available for public sale; • any major change in our board of directors or management; • sales of substantial amounts of Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and • general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. 35 Table of Contents The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected.
Failure to attract new personnel or failure to retain and motivate our current personnel, could have a material adverse effect on our business, financial condition and results of operations. ​ Our growth depends in part on our ability to identify and develop successful new geographies, physician partners and patients.
Failure to attract new personnel or failure to retain and motivate our current personnel, could have a material adverse effect on our business, financial condition and results of operations. Our growth depends in part on our ability to identify and develop successful hospitals in new geographies, physician partners and patients.
The government may also assert that a claim including items or services resulting from a violation of the AKS or Stark Law constitutes a false or fraudulent claim for purposes of the FCA; 28 Table of Contents • the Civil Monetary Penalties Statute, which prohibits, among other things, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider; • the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
The government may also assert that a claim including items or services resulting from a violation of the AKS or Stark Law constitutes a false or fraudulent claim for purposes of the FCA; • the Civil Monetary Penalties Statute, which prohibits, among other things, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider; • the criminal healthcare fraud provisions of HIPAA and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
As a result, adequate professional liability insurance may not be available to us and our partner professionals in the future at acceptable costs or at all, which may negatively impact our and our partner professionals’ ability to provide services to our hospitals, and thereby adversely affect our overall business and operations. ​ Any claims made against us or our partner professionals that are not fully covered by insurance could be costly to defend against, result in substantial damage awards, and divert the attention of our management and our partner professional entities from our operations, which could have a material adverse effect on our business, financial condition and results of operations.
As a result, adequate professional liability insurance may not be available to us and our partner professionals in the future at acceptable costs or at all, which may negatively impact our and our partner professionals’ ability to provide services to our hospitals, and thereby adversely affect our overall business and operations. 25 Table of Contents Any claims made against us or our partner professionals that are not fully covered by insurance could be costly to defend against, result in substantial damage awards, and divert the attention of our management and our partner professional entities from our operations, which could have a material adverse effect on our business, financial condition and results of operations.
These risk factors may be important to understanding other statements in this Annual Report and should be read in conjunction with the consolidated financial statements and related notes in Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part I, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
These risk factors may be important to understanding other statements in this Annual Report and should be read in conjunction with the consolidated financial statements and related notes in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
Of particular importance are: ​ • the federal Anti-Kickback Statute, or the AKS, which prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare program, such as Medicare and Medicaid.
Of particular importance are: • the federal Anti-Kickback Statute, or the AKS, which prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate or other remuneration for referring an individual, in return for ordering, leasing, purchasing or recommending or arranging for or to induce the referral of an individual or the ordering, purchasing or leasing of items or services covered, in whole or in part, by any federal healthcare 31 Table of Contents program, such as Medicare and Medicaid.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to significant penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment.
If our operations are found to be in violation of any of such laws or any 32 Table of Contents other governmental regulations that apply, we may be subject to significant penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, the curtailment or restructuring of operations, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and imprisonment.
If we do not successfully manage these processes, our business, financial condition, cash flow and results of operations could be harmed. ​ In his capacity as the co-owner of the real estate entities that lease the land and buildings to our hospital facilities, Dr.
If we do not 22 Table of Contents successfully manage these processes, our business, financial condition, cash flow and results of operations could be harmed. In his capacity as the co-owner of the real estate entities that lease the land and buildings to our hospital facilities, Dr.
Therefore, such agencies may not be successful in collecting payments owed to us and our affiliated physician groups. If practices of collection agencies utilized by us are inconsistent with these standards, we may be subject to actual damages and penalties.
Therefore, such agencies may not be successful in collecting payments owed to us and 29 Table of Contents our affiliated physician groups. If practices of collection agencies utilized by us are inconsistent with these standards, we may be subject to actual damages and penalties.
There are numerous continuing legal challenges to the federal regulations promulgated under the NSA, in 30 Table of Contents particular those mandating the methodology of calculating the qualifying payment amount and implementing the independent dispute resolution process, creating significant uncertainty in the claims recovery process.
There are numerous continuing legal challenges to the federal regulations promulgated under the NSA, in particular those mandating the methodology of calculating the qualifying payment amount and implementing the independent dispute resolution process, creating significant uncertainty in the claims recovery process.
We also rely on our leadership team in the areas of operations and general and administrative functions. From time to time, there may be changes in our management team resulting from the hiring or departure of executives, which could disrupt our business.
We also rely on our leadership team in the areas of operations and general and administrative functions. From time to time, there may be changes in our management team resulting from the hiring or departure of executives, 21 Table of Contents which could disrupt our business.
Although we take reasonable measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may still be vulnerable to, and we have in the past experienced, low-threat attacks by hackers or breaches due to employee error, malfeasance or other malicious or inadvertent disruptions.
Although we take reasonable measures to protect sensitive data from unauthorized access, use or disclosure, our information technology and infrastructure may still 26 Table of Contents be vulnerable to, and we have in the past experienced, low-threat attacks by hackers or breaches due to employee error, malfeasance or other malicious or inadvertent disruptions.
General reductions in expenditures by healthcare industry participants could result from, among other things: ​ • regulatory uncertainty regarding the implementation of and reimbursement processes under the NSA; • government regulations or private initiatives that affect the manner in which healthcare providers interact with patients, payors or other healthcare industry participants, including changes in pricing or means of delivery of healthcare products and services; • consolidation of healthcare industry participants; • reductions in government funding for healthcare; and • adverse changes in business or economic conditions affecting healthcare payors or providers or other healthcare industry participants. ​ Any of these changes in healthcare spending could adversely affect our revenue.
General reductions in expenditures by healthcare industry participants could result from, among other things: • regulatory uncertainty regarding the implementation of and reimbursement processes under the NSA; • government regulations or private initiatives that affect the manner in which healthcare providers interact with patients, payors or other healthcare industry participants, including changes in pricing or means of delivery of healthcare products and services; • consolidation of healthcare industry participants; • reductions in government funding for healthcare; and • adverse changes in business or economic conditions affecting healthcare payors or providers or other healthcare industry participants.
These obligations may limit our flexibility in our operations, and breaches of these obligations could result in defaults under the term loans 23 Table of Contents or guarantees, even if we had satisfied our payment obligations.
These obligations may limit our flexibility in our operations, and breaches of these obligations could result in defaults under the term loans or guarantees, even if we had satisfied our payment obligations.
As a result, our market opportunity estimates and financial forecasts developed as we enter into a new 18 Table of Contents geography, are subject to significant uncertainty, and are based on assumptions and estimates that may not prove to be accurate.
As a result, our market opportunity estimates and financial forecasts developed as we enter into a new geography, are subject to significant uncertainty, and are based on assumptions and estimates that may not prove to be accurate.
Vo, the Company’s chairman and Chief Executive Officer. ​ The term loans and lease and mortgage loan guarantees require us to comply with a number of financial and other obligations, which include maintaining debt service coverage and leverage ratios and maintaining insurance coverage, and may impose significant operating and financial restrictions on us, including restrictions on our ability to take actions that may be in our interests.
The term loans and lease and mortgage loan guarantees require us to comply with a number of financial and other obligations, which include maintaining debt service coverage and leverage ratios and maintaining insurance coverage, and may impose significant operating and financial restrictions on us, including restrictions on our ability to take actions that may be in our interests.
There can be no assurance that our affiliated physician group, such as our IPA, will remain in compliance with DMHC requirements or be able to timely and adequately rectify non-compliance.
There can be no assurance that our affiliated physician group, such as our IPA, will remain in compliance with DMHC 30 Table of Contents requirements or be able to timely and adequately rectify non-compliance.
These applications and data encompass a wide 21 Table of Contents variety of business-critical information, including research and development information, customer information, commercial information and business and financial information.
These applications and data encompass a wide variety of business-critical information, including research and development information, customer information, commercial information and business and financial information.
These factors and events could have a material adverse effect on our business, results of operations, and financial condition. ​ We have established reserves for our potential medical claim losses, which are subject to inherent uncertainties, and a deficiency in the established reserves may lead to a reduction in our assets or net incomes. ​ We establish reserves for estimated Insured but Not Reported (IBNR) claims.
These factors and events could have a material adverse effect on our business, results of operations, and financial condition. We have established reserves for our potential medical claim losses, which are subject to inherent uncertainties, and a deficiency in the established reserves may lead to a reduction in our assets or net incomes.
To the extent that we need to provide additional capital to our affiliated physician group in the future in order to comply with DMHC regulations, we would have less cash available for other parts of our operations. ​ Primary care physicians may seek to affiliate with our and our competitors’ IPAs at the same time. ​ It is common in the medical services industry for primary care physicians to be affiliated with multiple IPAs.
To the extent that we need to provide additional capital to our affiliated physician group in the future in order to comply with DMHC regulations, we would have less cash available for other parts of our operations. Primary care physicians may seek to affiliate with our and our competitors’ IPAs at the same time.
The estimation methods and the resulting reserves are periodically reviewed and updated. ​ Many of our contracts are complex in nature and may be subject to differing interpretations regarding amounts due for the provision of various services. Such interpretations may not come to light until a substantial period of time has passed.
Many of our contracts are complex in nature and may be subject to differing interpretations regarding amounts due for the provision of various services. Such interpretations may not come to light until a substantial period of time has passed.
We currently face competition in various aspects of our business, including from a range of companies that provide similar services, including hospitals, managed service organizations and provider networks and data analysis consultants. ​ Our primary competitors include numerous local provider networks, hospitals and health systems.
Our industry is competitive, and we expect it to attract increased competition. We currently face competition in various aspects of our business, including from a range of companies that provide similar services, including hospitals, managed service organizations and provider networks and data analysis consultants. Our primary competitors include numerous local provider networks, hospitals and health systems.
Under current DMHC regulations, our affiliated physician groups, as applicable, are required to, among other things: ​ • Maintain, at all times, a minimum “cash-to-claims ratio” (which means the organization’s cash, marketable securities, and certain qualified receivables, divided by the organization’s total unpaid claims liability) of 0.75; and • Submit periodic reports to the DMHC containing various data and attestations regarding their performance and financial solvency, including IBNR calculations and documentation and attestations as to whether or not the organization (i) was in compliance with the “Knox-Keene Act” requirements related to claims payment timeliness, (ii) had maintained positive tangible net equity (“TNE”), and (iii) had maintained positive working capital. ​ In the event that a physician group is not in compliance with any of the above criteria, it would be required to describe in a report submitted to the DMHC the reasons for non-compliance and actions to be taken to bring it into compliance.
Under current DMHC regulations, our affiliated physician groups, as applicable, are required to, among other things: • Maintain, at all times, a minimum “cash-to-claims ratio” (which means the organization’s cash, marketable securities, and certain qualified receivables, divided by the organization’s total unpaid claims liability) of 0.75; and • Submit periodic reports to the DMHC containing various data and attestations regarding their performance and financial solvency, including IBNR calculations and documentation and attestations as to whether or not the organization (i) was in compliance with the “Knox-Keene Act” requirements related to claims payment timeliness, (ii) had maintained positive tangible net equity (“TNE”), and (iii) had maintained positive working capital.
Although some licensed facilities are in-network with payors, the Company’s general payor contracting/government enrollment strategy is to remain out of network.
Although some licensed hospital facilities are in-network with payors, the Company’s general payor contracting/government enrollment strategy to date has been to remain out of network.
Accordingly, the loss or dissatisfaction of any physician partners, our inability to recruit, or the failure of our hospitals to recruit additional physicians or manage and scale capacity to timely meet patient demand, could substantially harm our reputation, impact our competitiveness, and impair our ability to attract new physician partners and maintain existing physician partnerships, both in new geographies and in geographies in which we currently operate, which could have a material adverse effect on our business, financial condition, cash flows and results of operations. ​ Further, our growth strategy depends, in part, on securing and integrating new high-caliber physician partners and expanding into new geographies in which we have little or no operating experience.
Accordingly, the loss or dissatisfaction of any physician partners, our inability to recruit, or the failure of our hospitals to recruit additional physicians or manage and scale capacity to timely meet patient demand, could substantially harm our reputation, impact our competitiveness, and impair our ability to attract new physician partners and maintain existing physician partnerships, both in new geographies and in geographies in which we currently operate, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. ​ If securities or industry analysts do not publish research or publish inaccurate or unfavourable research about our business, the price and trading volume of our securities could decline. ​ The trading market for our securities depends in part on the research and reports that securities or industry analysts publish about us or our business.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price and trading volume of our securities could decline.
An adverse outcome from any such lawsuit could adversely affect our business, cash flows and financial condition. ​ If we inadvertently employ or contract with an excluded person, we may face government sanctions. ​ Individuals and entities can be excluded from participating in the Medicare and Medicaid programs for violating certain laws and regulations, or for other reasons such as the loss of a license in any state, even if the person retains other licensure.
If we inadvertently employ or contract with an excluded person, we may face government sanctions. Individuals and entities can be excluded from participating in the Medicare and Medicaid programs for violating certain laws and regulations, or for other reasons such as the loss of a license in any state, even if the person retains other licensure.
Our affiliated IPA often has no knowledge, and no way of knowing, whether a physician is subject to an exclusivity agreement without being informed by the physician. Competitors could initiate lawsuits against us alleging in part interference with such exclusivity arrangements.
Our affiliated IPA often has no knowledge, and no way of knowing, whether a physician is subject to an exclusivity agreement without being informed by the physician. Competitors could initiate lawsuits against us alleging in part interference with such exclusivity arrangements. An adverse outcome from any such lawsuit could adversely affect our business, cash flows and financial condition.
Demand for our services may not continue at current levels and we may not have adequate technical, financial, and marketing resources to react to changes in the healthcare industry.
However, the timing and impact of developments in the healthcare industry are difficult to predict. Demand for our services may not continue at current levels and we may not have adequate technical, financial, and marketing resources to react to changes in the healthcare industry.
The estimated time to receive approval for the enrollment is sometimes difficult to predict and, in recent years, the Medicare program carriers often have not issued these numbers to our affiliated physicians in a timely manner.
The estimated time to receive approval for the enrollment is sometimes difficult to predict and, in recent years, the Medicare program carriers often have not issued these numbers to our affiliated physicians in a timely manner. These practices result in delayed reimbursement that may adversely affect our cash flows.
We are dependent on our physicians and other healthcare professionals to effectively manage the quality and cost of care. ​ Our success depends upon our continued ability to collaborate with and expand the number of highly qualified physicians and other healthcare professionals, which are key drivers of our profitability. ​ We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed. ​ Our industry is competitive, and we expect it to attract increased competition.
Our success depends upon our continued ability to collaborate with and expand the number of highly qualified physicians and other healthcare professionals, which are key drivers of our profitability. 24 Table of Contents We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition and results of operations will be harmed.
Additionally, the closure of a hospital may temporarily disrupt patient referrals and relationships with healthcare providers in the affected region. ​ While we believe that such strategic decisions are essential for the long-term sustainability of our organization and the continued provision of high-quality care, there is a risk that the closure of underperforming hospitals could lead to a short-term decrease in our overall revenues.
While we believe that such strategic decisions are essential for the long-term sustainability of our organization and the continued provision of high-quality care, there is a risk that the closure of underperforming hospitals could lead to a short-term decrease in our overall revenues.
Further, our current or potential competitors may be acquired by or partner with third parties with greater resources than we have. As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand premium competition.
As a result, our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand premium competition.
Comprehensive statutes and regulations govern the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payors, our contractual relationships and arrangements with healthcare providers and vendors, our marketing activities and other aspects of our operations.
The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments. Comprehensive statutes and regulations govern the manner in which we provide and bill for services and collect reimbursement from governmental programs and private payors, our contractual relationships and arrangements with healthcare providers and vendors, our marketing activities and other aspects of our operations.
If our affiliated entities or their equity holders fail to perform as expected, we may have to incur substantial costs and expend additional resources to enforce such arrangements. ​ Any failure by our affiliated entities or their owners to perform their obligations under their agreements with us would have a material adverse effect on our business, results of operations and financial condition. ​ The Physician LLCs are owned by individual physicians who could die, become incapacitated, or become no longer affiliated with us.
Any failure by our affiliated entities or their owners to perform their obligations under their agreements with us would have a material adverse effect on our business, results of operations and financial condition. The Physician LLCs are owned by individual physicians who could die, become incapacitated, or become no longer affiliated with us.
We may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, 15 Table of Contents systems and procedures, which could have an adverse effect on our business, reputation and financial results.
We may not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs, systems and procedures, which could have an adverse effect on our business, reputation and financial results. Additionally, rapid growth in our business may place a strain on our human and capital resources.
Volatility in the price of our stock may, therefore, adversely affect our ability to attract or retain highly skilled personnel. Further, the requirement to expense stock options and other equity instruments may discourage us from granting the size or type of stock option or equity awards that job candidates require to join our company.
Further, the requirement to expense stock options and other equity instruments may discourage us from granting the size or type of stock option or equity awards that job candidates require to join our company.
Our affiliated IPA therefore may enter into agreements with physicians who are also affiliated with our competitors. However, some of our competitors at times have agreements with physicians that require the physician to provide exclusive services.
It is common in the medical services industry for primary care physicians to be affiliated with multiple IPAs. Our affiliated IPA therefore may enter into agreements with physicians who are also affiliated with our competitors. However, some of our competitors at times have agreements with physicians that require the physician to provide exclusive services.
Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, including, without limitation, the following: ​ • the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • our ability to respond to competitive developments; • security or data privacy breaches and associated remediation costs; and • the timing of expenses related to the development or acquisition of additional hospitals or businesses. ​ Any fluctuation in our quarterly results may not accurately reflect the underlying performance of our business and could cause a decline in the trading price of our Common Stock. ​ Obligations under the term loans of our hospitals, and our related loan and leases guarantees could restrict our operations, particularly our ability to respond to changes in our business or to take specified actions.
Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, including, without limitation, the following: • the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable implementation timelines; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations and infrastructure; • our ability to respond to competitive developments; • security or data privacy breaches and associated remediation costs; and • the timing of expenses related to the development or acquisition of additional hospitals or businesses.
We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and tax authorities may challenge the positions that we take. ​ Our quarterly results may fluctuate significantly, which could adversely impact the value of our Common Stock. ​ Our quarterly results of operations, including our revenue, net loss and cash flows, have varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful.
We are required to take positions regarding the interpretation of complex statutory and regulatory tax rules and on valuation matters that are subject to uncertainty, and tax authorities may challenge the positions that we take. Our quarterly results may fluctuate significantly, which could adversely impact the value of our Common Stock.
If there is a change in accounting principles or the interpretation thereof affecting consolidation of VIEs, it could impact our consolidation of total revenues derived from our affiliated physician groups . ​ Our financial statements are consolidated and include the accounts of our majority-wholly owned subsidiary AHP Health Management Services Inc., non-owned affiliated physician groups and real estate entities that each is a VIE, which consolidation is effectuated in accordance with applicable accounting rules promulgated by the Financial Accounting Standards Board (“FASB”).
Our financial statements are consolidated and include the accounts of our majority-wholly owned subsidiary AHP Health Management Services Inc., non-owned affiliated physician groups and real estate entities that each is a VIE, which consolidation is effectuated in accordance with applicable accounting rules promulgated by the FASB.
If adverse inspections, reviews, audits or investigations occur and any of the results noted above occur, it could have a material adverse effect on our business and operating results.
If adverse inspections, reviews, audits or investigations occur and any of the results noted above occur, it could have a material adverse effect on our business and operating results. Furthermore, the legal, document production and other costs associated with complying with these inspections, reviews, audits or investigations could be significant.
IBNR estimates are developed using actuarial methods and are based on many variables, including the utilization of healthcare services, historical payment patterns, cost trends, product mix, seasonality, changes in membership, and other factors.
We establish reserves for estimated Insured but Not Reported ("IBNR") claims. IBNR estimates are developed using actuarial methods and are based on many variables, including the utilization of healthcare services, historical payment patterns, cost trends, product mix, seasonality, changes in membership, and other factors. The estimation methods and the resulting reserves are periodically reviewed and updated.
Unless waived by creditors, for which no assurance can be given, defaulting on these obligations could result in a material adverse effect on our financial condition and ability to continue our operations. ​ The arrangements we have with our VIEs are not as secure as direct ownership of such entities. ​ Because of corporate practice of medicine laws, we entered into contractual arrangements to manage certain affiliated physician practice groups or independent physician associations, which allow us to consolidate those groups for financial reporting purposes.
Unless waived by creditors, for which no assurance can be given, defaulting on these obligations could result in a material adverse effect on our financial condition and ability to continue our operations. The arrangements we have with our VIEs are not as secure as direct ownership of such entities.
The existence of errors or defects in our applications and the correction of such errors could divert our resources from other matters relating to our business, damage our reputation, increase our costs, and have a material adverse effect on our business, financial condition, and results of operations. ​ Risks Related to Our Legal and Regulatory Environment ​ We conduct business in a heavily regulated industry and if we fail to adhere to all of the complex government laws and regulations that apply to our business, we could incur fines or penalties or be required to make changes to our operations or experience adverse publicity, any or all of which could have a material adverse effect on our business, results of operations, financial condition, cash flows, and reputation. ​ The U.S. healthcare industry is heavily regulated and closely scrutinized by federal, state and local governments.
Risks Related to Our Legal and Regulatory Environment We conduct business in a heavily regulated industry and if we fail to adhere to all of the complex government laws and regulations that apply to our business, we could incur fines or penalties or be required to make changes to our operations or experience adverse publicity, any or all of which could have a material adverse effect on our business, results of operations, financial condition, cash flows, and reputation.
Any significant revisions to the federal arbitration process may result in a substantial decrease in claim amounts recovered in the future.
Any significant changes to the federal arbitration process may result in a substantial decrease in the claim amounts we will be able to recover in the future.
In addition, any claims may adversely affect our business or reputation. ​ If we or our partner physicians or other healthcare providers fail to comply with applicable data interoperability and information blocking rules, our consolidated results of operations could be adversely affected. ​ The 21st Century Cures Act, or the Cures Act, which was passed and signed into law in December 2016, includes provisions related to data interoperability, information blocking and patient access.
In addition, any claims may adversely affect our business or reputation. If we or our partner physicians or other healthcare providers fail to comply with applicable data interoperability and information blocking rules, our consolidated results of operations could be adversely affected.
Although the Management Services Agreements (MSAs) of our hospitals with these affiliates provide that they will be binding on successors of current owners, as the successors are not parties to the MSAs, it is uncertain in case of the death, bankruptcy, or divorce of a current owner whether their successors would be subject to such MSAs.
Although the Management Services Agreements (MSAs) of our hospitals with these affiliates provide that they will be binding on successors of current owners, as the successors are not parties to the MSAs, it is uncertain in case of the death, bankruptcy, or divorce of a current owner whether their successors would be subject to such MSAs. 28 Table of Contents If there is a change in accounting principles or the interpretation thereof affecting consolidation of VIEs, it could impact our consolidation of total revenues derived from our affiliated physician groups.
If these third-party vendors or subcontractors fail to protect their information technology systems and our confidential and proprietary information, we may be vulnerable to disruptions in service and unauthorized access to our confidential or proprietary information and we could incur liability and reputational damage. ​ The secure processing, storage, maintenance and transmission of information is vital to our operations and business strategy, and we devote significant resources to protecting such information.
If these third-party vendors or subcontractors fail to protect their information technology systems and our confidential and proprietary information, we may be vulnerable to disruptions in service and unauthorized access to our confidential or proprietary information and we could incur liability and reputational damage.
Any failure to comply with these rules could have a material adverse effect on our business, results of operations and financial condition. ​ Our business and operations could suffer in the event of material information technology system failures, security breaches, or other deficiencies in cybersecurity. ​ Our information technology systems facilitate our ability to conduct our business.
Our business and operations could suffer in the event of material information technology system failures, security breaches, or other deficiencies in cybersecurity. Our information technology systems facilitate our ability to conduct our business.
In addition, in the event that a significant number of our management personnel were unavailable in the event of a disaster, our ability to effectively conduct business could be adversely affected. ​ In the ordinary course of our business, we, our partner physicians or other physician partners collect and store sensitive data, including personally identifiable information, protected health information, intellectual property and proprietary business information owned or controlled by us or our employees, members and other parties.
In the ordinary course of our business, we, our partner physicians or other physician partners collect and store sensitive data, including personally identifiable information, protected health information, intellectual property and proprietary business information owned or controlled by us or our employees, members and other parties.
Additionally, the potential impact of new policies that may be implemented as a result of the new administration is currently uncertain. ​ On January 1, 2022, the NSA became effective. As a result, we experienced a significant decline in collections of patient claims for emergency services.
On January 1, 2022, the NSA became effective. As a result, we experienced a significant decline in collections of patient claims for emergency services.
The companion rules will transform the way in which healthcare providers, health IT developers, health information exchanges/health information networks, or HIEs/HINs, and health plans share patient information, and create significant new requirements for healthcare industry participants.
The companion rules will transform the way in which healthcare providers, health IT developers, health information exchanges/health information networks, or HIEs/HINs, and health plans share patient information, and create significant new requirements for healthcare industry participants. Heightened information blocking enforcement may result in penalties and reimbursement disincentives. HHS has directed OIG and ONC to actively enforce information-blocking regulations.
While we have succession plans in place and we have employment arrangements with our key executives, these do not guarantee that the services of these or suitable successor executives will continue to be available to us. ​ Competition for qualified personnel in our field is intense due to the limited number of individuals who possess the skills and experience required by our industry.
While we have succession plans in place and we have employment arrangements with our key executives, these do not guarantee that the services of these or suitable successor executives will continue to be available to us.
Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy. The healthcare industry is subject to changing political, regulatory and other influences.
Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending, reimbursement and policy. The healthcare industry is subject to changing political, regulatory and other influences. Additionally, the potential impact of new policies that may be implemented as a result of the new administration is currently uncertain.
Furthermore, the legal, document production and other costs associated with complying with these inspections, reviews, audits or investigations could be significant. ​ Recent healthcare regulations, and other changes in the healthcare industry and in healthcare spending may adversely affect our business, financial condition and results of operations. ​ The impact on us of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is uncertain, but may adversely affect our business, financial condition and results of operations.
Recent healthcare regulations, and other changes in the healthcare industry and in healthcare spending may adversely affect our business, financial condition and results of operations. The impact on us of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is uncertain, but may adversely affect our business, financial condition and results of operations.
This could be due to various factors such as declining patient admissions, increasing operational costs, or changes in healthcare regulations. The closure of any hospital within our portfolio carries inherent risks, including a potential negative impact on our overall revenues. The closure process may involve staff reallocation or severance, and asset dispositions, all of which can be complex and costly.
The closure of any hospital within our portfolio carries inherent risks, including a potential negative impact on our overall revenues. The closure process may involve staff reallocation or severance, and asset dispositions, all of which can be complex and costly. Additionally, the closure of a hospital may temporarily disrupt patient referrals and relationships with healthcare providers in the affected region.
Even if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific market segments that we serve now or in the future. However, the timing and impact of developments in the healthcare industry are 20 Table of Contents difficult to predict.
Any of these changes in healthcare spending could adversely affect our revenue. Even if general expenditures by industry participants remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific market segments that we serve now or in the future.
We assume the financial risks relating to uncollectible and delayed payments. In particular, we rely on some key governmental payors. Governmental payors typically pay on a more extended payment cycle, which could require us to incur substantial expenses prior to receiving corresponding payments.
Governmental payors typically pay on a more extended payment cycle, which could require us to incur substantial expenses prior to receiving corresponding payments.
If we are not able to successfully execute upon our growth strategies, there may be a material adverse effect on our business, financial condition, cash flows and results of operations. 17 Table of Contents ​ Our business depends on our ability to identify and develop successful geographies and relationships with physician partners and healthcare professionals, and to successfully execute upon our growth initiatives to increase the profitability of our physician partners and healthcare professionals.
If we are not able to successfully execute upon our growth strategies, there may be a material adverse effect on our business, financial condition, cash flows and results of operations.
Vo, our Chairman, CEO and major stockholder, may have conflicts of interest with the Company and its public stockholders. ​ The majority of our hospital facilities have contractual relationships with separately owned real estate entities‎ (the ‎‎‎“Real Estate Entities”) and ‎each hospital has contractual relationships with separately owned professional entities (the ‎‎“Physician LLCs”). ‎ ​ The Physician LLCs are owned by the doctors providing services to the corresponding hospital, provide physician ‎and provider services to the hospitals, and employ the doctors and other providers. ‎ ​ The Real Estate Entities, also partially owned by the doctors providing services to the corresponding hospital, own the land and/or buildings that are leased to our hospitals.
Vo, our Chairman, CEO and major stockholder, may have conflicts of interest with the Company and its public stockholders. The majority of our hospital facilities have contractual relationships with separately owned real estate entities (the “Real Estate Entities”) and each hospital has contractual relationships with separately owned professional entities (the “Physician LLCs”).
The Real Estate Entities incur debt to purchase or construct the hospital facility. Lease payments received from our hospitals are used by the Real Estate Entities to make payments on their debt.
The Real Estate Entities incur debt to purchase or construct the hospital facility. Lease payments received from our hospitals are used by the Real Estate Entities to make payments on their debt. Each hospital facility’s lease payments are guaranteed by the Company. In addition to its respective doctor owners, each Real Estate Entity is partially owned or controlled by Dr.
As previously disclosed, we have historically closed underperforming facilities. Our commitment to providing high-quality healthcare services demands that we continually assess the performance of our hospitals. In some instances, we may find it necessary to make the difficult decision to close underperforming facilities.
Our commitment to providing high-quality healthcare services demands that we continually assess the performance of our hospitals. In some instances, we may find it necessary to make the difficult decision to close underperforming facilities. This could be due to various factors such as declining patient admissions, increasing operational costs, or changes in healthcare regulations.
If we underestimate or do not correctly predict the cost of the care our partner physicians furnish to patients, we might be underpaid for the care that must be provided to patients, which could have a negative impact on our results of operations and financial condition. ​ We primarily depend on reimbursement by third-party payors, as well as payments by individuals, which could lead to delays and uncertainties in the timing and process of reimbursement, including any changes or reductions in Medicare reimbursement rates or rules. ​ The reimbursement and associated arbitration process is complex and can involve lengthy delays.
We primarily depend on reimbursement by third-party payors, as well as payments by individuals, which could lead to delays and uncertainties in the timing and process of reimbursement, including any changes or reductions in Medicare reimbursement rates or rules. The reimbursement and associated arbitration process is complex and can involve lengthy delays.
Staffing, equipment, and medical supplies shortages may also impact our ability to serve patients at our centers. ​ In addition, our results and financial condition may be adversely affected by future federal or state laws, regulations, orders, or other governmental or regulatory actions addressing public health emergencies such as a COVID-19 or the U.S. health care system, which, if adopted, could result in direct or indirect restrictions to its business, financial condition, results of operations and cash flow. ​ We rely on our management team and key employees and our business, financial condition, cash flows and results of operations could be harmed if we are unable to retain qualified personnel. ​ Our success depends largely upon the continued services of key members of senior management, including our chief executive officer.
In addition, our results and financial condition may be adversely affected by future federal or state laws, regulations, orders, or other governmental or regulatory actions addressing public health emergencies such as a COVID-19 or the U.S. health care system, which, if adopted, could result in direct or indirect restrictions to its business, financial condition, results of operations and cash flow.
If one or more of the analysts who covers us downgrades our securities, publishes incorrect or unfavorable research about us, ceases coverage of us, or fails to publish reports on us regularly, demand for and visibility of our securities could decrease, which could cause the price or trading volumes of our securities to decline. ​ We will continue to incur significantly increased costs and devote substantial management time as a result of operating as a public company. ​ As a public company, we incur significant legal, accounting and other expenses.
If one or more of the analysts who covers us downgrades our securities, publishes incorrect or unfavorable research about us, ceases coverage of us, or fails to publish reports on us regularly, demand for and visibility of our securities could decrease, which could cause the price or trading volumes of our securities to decline. Item 1B. Unresolved Staff Comments None.
Each time a new vulnerability is identified we are at risk that cyber-attackers exploit such known vulnerability before we have been able to address it. ​ Any unauthorized access, breach, or loss of personal information could result in the disruption of our operations, legal claims or proceedings, and liability under federal or state laws that protect the privacy of personal information, and corresponding regulatory penalties.
Any unauthorized access, breach, or loss of personal information could result in the disruption of our operations, legal claims or proceedings, and liability under federal or state laws that protect the privacy of personal information, and corresponding regulatory penalties.
Other third-party payors may also reserve the right to conduct audits. We also periodically conduct internal audits and reviews of our regulatory compliance.
We also periodically conduct internal audits and reviews of our regulatory compliance.
In addition, any action against us or our partner physicians or other physician partners for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and result in adverse publicity, or otherwise experience a material adverse impact on our business, results of operations, financial condition, cash flows, reputation as a result. ​ If any of our hospitals lose their regulatory licenses, permits and/or registrations, as applicable, or become ineligible to receive reimbursement from third-party payors, there may be a material adverse effect on our business, financial condition, cash flows, or results of operations. ​ The operations of our hospitals through partner physicians and other healthcare professionals are subject to extensive federal, state and local regulation relating to, among other things, the adequacy of medical care, equipment, personnel, operating policies and procedures and proof of financial ability to operate.
In addition, any action against us or our partner physicians or other physician partners for violation of these laws or regulations, even if we successfully defend against it, could cause us to incur significant legal expenses, divert our management’s attention from the operation of our business and result in adverse publicity, or otherwise experience a material adverse impact on our business, results of operations, financial condition, cash flows, reputation as a result.
The Company regularly conducts a comparative analysis of its actual results to its previously estimated results in ‎order to evaluate whether changes to its estimation process are required.‎ The estimation of variable consideration is particularly complex within the healthcare ‎industry generally because of the broad range of services provided, the range of reimbursements by patient ‎insurance companies and collectability of patient responsible amounts.
The estimation of variable consideration is particularly complex within the healthcare industry generally because of the broad range of services provided, the range of reimbursements by patient insurance companies and collectability of patient responsible amounts.
Even though these charges may be non-cash items and not have an immediate impact on liquidity, any report of charges of this nature could contribute to negative market perceptions about us or our securities. In addition, charges such as write-downs or impairments may make future financing difficult to obtain on favorable terms or at all.
We may be forced to write down or write off assets, restructure operations, or incur impairment or other charges that could result in losses. Even though these charges may be non-cash items and not have an immediate impact on liquidity, any report of charges of this nature could contribute to negative market perceptions about us or our securities.
In addition, we have experienced employee turnover and expect to continue to experience employee turnover in the future. New hires require significant training and, in most cases, take significant time before they achieve full productivity. New employees may not become as productive as we expect, and we may be unable to hire or retain sufficient numbers of qualified individuals.
If our hiring efforts in new or existing geographies are not successful, our business will be harmed. In addition, we have experienced employee turnover and expect to continue to experience employee turnover in the future. New hires require significant training and, in most cases, take significant time before they achieve full productivity.
If the DMHC were to determine that we have been inappropriately taking risk for institutional and professional services as a result of our various hospital and physician arrangements without having any Knox-Keene license or applicable regulatory exemption, we may be required to obtain a Knox-Keene license and could be subject to civil and criminal liability, any of which could have a material adverse effect on our business, results of operations, and financial condition. ​ A Knox-Keene Act license or exemption from licensure, where applicable, is required to operate a healthcare service plan, e.g., an HMO, or an organization that accepts global risk, i.e., accepts full risk for a patient population, including risk related to institutional services, e.g., hospital, and professional services. 25 Table of Contents ​ If our affiliated physician group is not able to satisfy California financial solvency regulations, they could become subject to sanctions and their ability to do business in California could be limited or terminated. ​ The DMHC has instituted financial solvency regulations.
If the DMHC were to determine that we have been inappropriately taking risk for institutional and professional services as a result of our various hospital and physician arrangements without having any Knox-Keene license or applicable regulatory exemption, we may be required to obtain a Knox-Keene license and could be subject to civil and criminal liability, any of which could have a material adverse effect on our business, results of operations, and financial condition.
Despite our implementation of security measures reasonably designed to prevent unauthorized access, there is no guarantee we can protect our data from breach. ​ Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements, including contractual obligations, could adversely affect our business, financial condition and results of operations. ​ Numerous state and federal laws, regulations, standards and other legal obligations, including consumer protection laws and regulations, which govern the collection, dissemination, use, access to, confidentiality, security and processing of personal information, including health-related information, could apply to our operations or the operations of our partners. ​ These privacy and security laws and regulations (including our contractual obligations) are constantly evolving, may conflict with each other, and can result in investigations, procedures, or actions that lead to significant civil and criminal penalties and operational restrictions.
Despite our implementation of security measures reasonably designed to prevent unauthorized access, there is no guarantee we can protect our data from breach. Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements, including contractual obligations, could adversely affect our business, financial condition and results of operations.
Third-party payors are also increasingly focused on controlling healthcare costs, and such efforts, including any revisions to reimbursement policies, may further reduce, complicate or delay our reimbursement claims. ​ In addition, certain of our patients are covered under health plans that require the patient to cover a portion of their own healthcare expenses through the payment of copayments or deductibles.
In addition, certain of our patients are covered under health plans that require the patient to cover a portion of their own healthcare expenses through the payment of copayments or deductibles.
If actual claims exceed our estimated reserves, we may be required to increase reserves, which would lead to a reduction in our assets or net income. ​ We do not have a Knox-Keene license. ​ The Knox-Keene Health Care Service Plan Act of 1975 was passed by the California State Legislature to regulate California managed care plans and is currently administered by the California Department of Managed Healthcare (DMHC).
If actual claims exceed our estimated reserves, we may be required to increase reserves, which would lead to a reduction in our assets or net income. We do not have a Knox-Keene license.
Since we do not have any contractual arrangements with insurance companies, we cannot predict the timing and amount of the payments we ultimately receive for our services and estimates and assumptions, which are based on historical insurance payment amounts and timing. ​ In addition, as a result of the NSA becoming effective on January 1, 2022, we initially experienced a significant decline in collections of patient claims for emergency services and have had only limited success at achieving collections at or higher than the established qualifying payment amount, which is the median in-network contracted rate for the same insurance market.
In addition, as a result of the NSA becoming effective on January 1, 2022, we initially experienced a significant decline in collections of patient claims for emergency services and for a significant period only had limited success at achieving collections at or higher than the established qualifying payment amount, which is the median in-network contracted rate for the same insurance market. 20 Table of Contents The federal regulations promulgated under the NSA, including those establishing the IDR process, have been and continue to be subject to legal challenges.
Our information systems must also be continually updated, patched and upgraded to protect against known vulnerabilities and the sheer volume and criticality of these patches has increased markedly.
Our information systems must also be continually updated, patched and upgraded to protect against known vulnerabilities and the sheer volume and criticality of these patches has increased markedly. Each time a new vulnerability is identified we are at risk that cyber-attackers exploit such known vulnerability before we have been able to address it.
These practices result in delayed reimbursement that may adversely affect our cash flows. 24 Table of Contents ​ We may have difficulty collecting payments from third-party payors in a timely manner. ​ We derive significant revenue from third-party payors, and delays in payment or refunds to payors may adversely impact our net revenue.
We may have difficulty collecting payments from third-party payors in a timely manner. We derive significant revenue from third-party payors, and delays in payment or refunds to payors may adversely impact our net revenue. We assume the financial risks relating to uncollectible and delayed payments. In particular, we rely on some key governmental payors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of this process, the Audit Committee receives regular updates from the Director of Information Technology and Chief Operating Officer on critical issues related to our information security risks, cybersecurity strategy, supplier risk and business continuity capabilities. ​ The Company’s framework includes an incident management and response program that continuously monitors the Company’s information systems for vulnerabilities, threats and incidents; manages and takes action to contain incidents that occur; remediates vulnerabilities; and communicates the details of threats and incidents to management, including the Director of Information Technology and Chief Operating Officer, as deemed necessary or appropriate.
Biggest changeThe Company’s framework includes an incident management and response program that continuously monitors the Company’s information systems for vulnerabilities, threats and incidents; manages and takes action to contain incidents that occur; remediates vulnerabilities; and communicates the details of threats and incidents to management, including the Director of Information Technology and Chief Operating Officer, as deemed necessary or appropriate.
Pursuant to the Company’s incident response plan, 33 Table of Contents incidents are reported to the Audit Committee, appropriate government agencies and other authorities, as deemed necessary or appropriate, considering the actual or potential impact, significance and scope. ​ We work to require our third-party partners and contractors to handle data in accordance with our data privacy and information security requirements and applicable laws.
Pursuant to the Company’s incident response plan, incidents are reported to the Audit Committee, appropriate government agencies and other authorities, as deemed necessary or appropriate, considering the actual or potential impact, significance and scope. We work to require our third-party partners and contractors to handle data in accordance with our data privacy and information security requirements and applicable laws.
These assessments complement our other assessment work by evaluating our cybersecurity program as a whole. ​ We complete an enterprise information risk assessment as part of our overall enterprise information security risk management assessment, which is overseen by our Director of Information Technology and Chief Operating Officer.
These assessments complement our other assessment work by evaluating our cybersecurity program as a whole. 36 Table of Contents We complete an enterprise information risk assessment as part of our overall enterprise information security risk management assessment, which is overseen by our Director of Information Technology and Chief Operating Officer.
The Audit Committee of the Board of Directors has oversight of our cybersecurity program and is responsible for reviewing and assessing the Company’s cybersecurity and data protection policies, procedures and resource commitment, including key risk areas and mitigation strategies.
Our cybersecurity program is managed by our Director of Information Technology and Chief Operating Officer. The Audit Committee of the Board of Directors has oversight of our cybersecurity program and is responsible for reviewing and assessing the Company’s cybersecurity and data protection policies, procedures and resource commitment, including key risk areas and mitigation strategies.
We regularly engage with our suppliers, partners, contractors, service providers and internal development teams to identify and remediate vulnerabilities in a timely manner and monitor system upgrades to mitigate future risk, and ensure they employ appropriate and effective controls and continuity plans for their systems and operations. ​ To ensure that our program is designed and operating effectively, our infrastructure and information systems are audited periodically by internal and external auditors.
We regularly engage with our suppliers, partners, contractors, service providers and internal development teams to identify and remediate vulnerabilities in a timely manner and monitor system upgrades to mitigate future risk, and ensure they employ appropriate and effective controls and continuity plans for their systems and operations.
The Chief Operating Officer has more than 20 years of in-depth knowledge of our business operations that helps integrate the cybersecurity program into the overall business operations. ​ As of December 31, 2024, the Company has not identified any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition, but there can be no assurance that any such risk will not materially affect the Company in the future.
As of December 31, 2025, the Company has not identified any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition, but there can be no assurance that any such risk will not materially affect the Company in the future.
The framework allows us to identify, assess and mitigate the risks we face, and assists us in establishing policies and safeguards to protect our systems and the information of those we serve. ​ Our cybersecurity program is managed by our Director of Information Technology and Chief Operating Officer.
Item 1C. Cybersecurity Nutex manages cybersecurity and data protection through a continuously evolving framework. The framework allows us to identify, assess and mitigate the risks we face, and assists us in establishing policies and safeguards to protect our systems and the information of those we serve.
We will perform regular vulnerability assessments and penetration tests to improve system security and address emerging security threats. Our internal audit team independently assesses security controls against our enterprise policies to evaluate compliance and leverages a combination of auditing and security frameworks to evaluate how leading practices are applied throughout our enterprise.
Our internal audit team independently assesses security controls against our enterprise policies to evaluate compliance and leverages a combination of auditing and security frameworks to evaluate how leading practices are applied throughout our enterprise. Audit results and remediation progress are reported to and monitored by senior management and the Audit Committee.
Audit results and remediation progress are reported to and monitored by senior management and the Audit Committee. We also periodically partner with industry-leading cybersecurity firms to assess our cybersecurity program.
We also periodically partner with industry-leading cybersecurity firms to assess our cybersecurity program.
The Director of Information Technology has more than 25 years of information technology experience across the healthcare industry before joining Nutex Health.
The Director of Information Technology had more than 25 years of information technology experience across the healthcare industry before joining Nutex. The Chief Operating Officer had more than 20 years of in-depth knowledge of business operations prior to joining Nutex, and we believe will be helpful in integrating our cybersecurity program into our overall business operations.
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Item 1C. Cybersecurity ​ Nutex manages cybersecurity and data protection through a continuously evolving framework.
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As part of this process, the Audit Committee receives regular updates from the Director of Information Technology and Chief Operating Officer on critical issues related to our information security risks, cybersecurity strategy, supplier risk and business continuity capabilities.
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To ensure that our program is designed and operating effectively, our infrastructure and information systems are audited periodically by internal and external auditors. We will perform regular vulnerability assessments and penetration tests to improve system security and address emerging security threats.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties ​ Our principal executive office is located at 6030 S. Rice Ave, Suite C, Houston, Texas 77081. We also maintain corporate offices located at 2455 East Sunrise Blvd. Suite 1204 Fort Lauderdale FL, 33304. Each of these locations is leased.
Biggest changeItem 2. Properties Our principal executive office is located at 1776 Yorktown Street, Suite 700, Houston, Texas, which we own. We also maintain corporate offices located at 2455 East Sunrise Blvd., Suite 1204, Fort Lauderdale, Florida, which are leased. As of December 31, 2025, our hospital division operated 26 micro-hospitals, specialty hospitals and HOPDs in 12 states in the U.S.
As of December 31, 2024, our hospital division operated 24 micro-hospitals, specialty hospitals and HOPDs in 11 states in the U.S. We lease each of these locations. Our population health management division manages three IPAs and two MSOs which operate from leased locations in two states.
We lease 25 locations. The one hospital division micro-hospital building we own is located at 7904 Cabela Dr, Hammond, Indiana. Our population health management division manages three IPAs and two MSOs, which operate from leased locations in two states.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, the Company is involved in litigation and proceedings as part of its normal course of business. The Company is not a party to any litigation that we believe would have a material effect on our business or financial condition. Item 4.
Biggest changeItem 3. Legal Proceedings The Company, its consolidated subsidiaries or VIEs are involved in a number of lawsuits and other proceedings arising from the normal course of business.
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Mine Safety Disclosures Not applicable. ​ 34 Table of Contents PART II
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Given the indeterminate amounts sought and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain of these matters could have a material adverse effect on the Company’s financial condition or results of operations in future periods.
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Based upon counsel and management’s opinion, except for the items listed below, the outcome of such matters is currently not expected to have a material adverse effect on the audited consolidated financial statements.
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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.
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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).
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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.
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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 Holdco and Dr.
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Vo have filed their answers and counterclaims, addressing the allegations set forth and presenting their own claims against the ABQ Plaintiffs. The parties are engaged in written discovery and are in the process of taking key witness depositions. At this time, no dispositive motions have been filed. Trial is currently set for September 21, 2026.
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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.
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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 . 37 Table of Contents In addition, on May 30, 2025, JBS Fort Smith Hospital Investors, LP, Copper Oaks Emergency Physicians, LLC, KG4JB 5578, PLLC, Mark R.
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Rucker, PLLC, Premier Macy Management Holdings, LLC, Nicut EMS, LLC, and Tribbey Emergency Services, 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.
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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.
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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.
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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, currently captioned In re Nutex Health Inc. Securities Litigation , Case No. 4:25-cv-03999.
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The complaint, as amended, is on behalf of two plaintiffs and all other persons (other than defendants) who purchased Nutex Health Inc.’s stock between February 5, 2025 and August 14, 2025.
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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.
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The plaintiffs allege 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.
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The plaintiffs also allege that the defendants made material misstatements and omissions related to the Company’s internal controls over financial reporting and its accounting treatment of certain non-cash stock-based compensation obligations. The plaintiffs seek unspecified damages, fees, and interest on behalf of themselves and the putative class.
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The Company has not yet responded to the complaint but expects to file a motion to dismiss on or about April 3, 2026. 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.
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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.
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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.
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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.
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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.
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On November 25, 2025, the court consolidated the two derivative actions under the caption In re Nutex Health Inc. Derivative Litigation , Case No. 4:25-cv-04253. On December 11, 2025, the court stayed the litigation until resolution of the forthcoming motion to dismiss the securities action described earlier.
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The Company is unable to predict the outcome of the litigation or estimate the potential financial impact, if any. Item 4. Mine Safety Disclosures Not applicable. 38 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThese warrants were issued in a private placement in reliance on section 4(a)(2) of the Securities Act.
Biggest changeThese warrants were issued in a private placement in reliance on section 4(a)(2) of the Securities Act. 39 Table of Contents Issuer Purchases of Equity Securities On August 14, 2025, the Board authorized a stock repurchase program (the "Repurchase Program") of up to $25.0 million of the Company’s common stock over the subsequent six months.
Recent Sales of Unregistered Securities ​ 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).
Recent Sales of Unregistered Securities On March 26, 2024, the Company and the holders of the Unsecured Convertible Term Notes agreed to amend the conversion price and the exercise price of the related 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).
Item 5. Market for Registrant’s Common Equity and Related Shareholder Matters. Our common stock is quoted on NASDAQ Capital Market under the symbol “NUTX.” Stockholders As of the date of this report, there are approximately 841 stockholders of record of our common stock based upon our transfer agent’s report.
Item 5. Market for Registrant’s Common Equity and Related Shareholder Matters. Our common stock is quoted on NASDAQ Capital Market under the symbol “NUTX.” Stockholders As of December 31, 2025, there are approximately 834 stockholders of record of our common stock based upon our transfer agent’s report.
Refer to Note 13 to the consolidated financial statements included in this Annual Report for additional information relating to outstanding warrants. ​ Equity Compensation Plans 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.
Equity Compensation Plans 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.
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. Shares available for issuance as of December 31, 2024, were 30,648. ​ At December 31, 2024, there were 21,965 options outstanding for the purchase of Common Stock.
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.
Refer to Note 12 to the consolidated financial statements included in this Annual Report for additional information relating to outstanding options.
Warrants At December 31, 2025, there were 144,620 warrants outstanding for the purchase of Company common stock. Refer to Note 13 - Equity to the consolidated financial statements included in this Annual Report for additional information relating to outstanding warrants.
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Warrants At December 31, 2024, there were 207,338 warrants outstanding for the purchase of Company common stock.
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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.
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Shares available for issuance as of December 31, 2025, were 1,108,911. At December 31, 2025, there were 17,183 options outstanding for the purchase of Common Stock. Refer to Note 12 - Stock-based Compensation to the consolidated financial statements included in this Annual Report for additional information relating to outstanding options.
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Pursuant to the 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.
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The 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 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. Any share repurchases made under the Repurchase Program may be subject to a U.S. federal excise tax.
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Subject to certain exceptions and adjustments, the amount of the excise tax is generally 1% of the aggregate fair market values of the shares of stock repurchased by the corporation during a taxable year, net of the aggregate fair market value of certain new stock issuances by the repurchasing corporation during the same taxable year.
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The following table provides information with respect to shares of our common stock we repurchased under the Repurchase Program during the three months ended December 31, 2025: Period Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate $ value of shares that may yet be purchased under the plans or programs (in '000s) 10/1/25 - 10/31/25 — $ — — $ 25,000 11/1/25 - 11/30/25 — $ — — $ 25,000 12/1/25 - 12/31/25 27,870 $ 177.70 27,870 $ 20,047 27,870 27,870 Future share repurchases under our Repurchase Program are at the discretion of management, taking into consideration our historical and projected results of operations, financial condition, cash flows, capital requirements, covenant compliance, current economic environment and other factors considered relevant.
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At December 31, 2025, we had approximately $20.0 million available under the Repurchase Program. In January 2026, subsequent to year end, the Company repurchased the remaining shares available under the Repurchase Program for an aggregate purchase price of $20.0 million, thereby completing the Repurchase Program.
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On March 4, 2026, subsequent to year end, the Company announced that the Board authorized a second stock repurchase program of up to $25.0 million of the Company's common stock.
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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.
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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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Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between April 5, 2022 (the date of the first available closing price for Nutex Health Inc. on the NASDAQ following the merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc. on April 1, 2022) and December 31, 2025, with the cumulative total return of (i) the NASDAQ-100 Index and (ii) NASDAQ Health Care Index, over the same period.
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This graph assumes the investment of $100 on April 5, 2022 at the closing sale price of our common stock, the NASDAQ-100 Index and the NASDAQ Health Care Index and assumes the quarterly reinvestment of dividends, if any, before consideration of income taxes. 40 Table of Contents 4/5/2022 12/31/2022 12/31/2023 12/31/2024 12/31/2025 Nutex Health $ 100.00 $ 10.61 $ 1.01 $ 1.18 $ 6.13 NASDAQ 100 Index $ 100.00 $ 73.81 $ 113.53 $ 141.78 $ 170.37 NASDAQ Healthcare Index $ 100.00 $ 91.21 $ 97.17 $ 96.34 $ 118.11 Except to the extent that we specifically incorporate this information by reference, the foregoing Stockholder Performance Graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended.
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This information shall not otherwise be deemed filed under such Acts. Item 6. Reserved Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeActivity within our business segments is significantly impacted by the demand for healthcare services we provide, competition for these services in each of the market areas we serve, and the legislative changes discussed above. ​ 38 Table of Contents Following is our results of operations for the periods shown: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2024 2023 2022 Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ Hospital division ​ $ 449,063,683 ​ $ 218,070,397 ​ $ 198,508,245 Population health management division ​ ​ 30,884,950 ​ ​ 29,575,919 ​ ​ 20,786,061 Total revenue ​ ​ 479,948,633 ​ ​ 247,646,316 ​ ​ 219,294,306 Segment operating income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ Hospital division ​ ​ 195,539,009 ​ ​ 36,336,211 ​ ​ 15,035,130 Population health management division ​ ​ 1,380,659 ​ ​ (1,558,601) ​ ​ 387,469 Real estate division ​ ​ (658,391) ​ ​ (3,439) ​ ​ (861) Total segment operating income ​ ​ 196,261,277 ​ ​ 34,774,171 ​ ​ 15,421,738 Corporate and other costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ Facilities closing costs ​ ​ - ​ ​ 217,266 ​ ​ - Acquisition costs ​ ​ - ​ ​ 43,464 ​ ​ 3,885,666 Stock-based compensation ​ ​ 16,631,898 ​ ​ 2,835,971 ​ ​ 189,581 Impairment of assets ​ ​ 3,887,216 ​ ​ 29,082,203 ​ ​ - Impairment of goodwill ​ ​ 3,197,391 ​ ​ 1,139,297 ​ ​ 398,135,038 General and administrative expenses ​ ​ 41,923,972 ​ ​ 33,229,718 ​ ​ 19,810,607 Total corporate and other costs ​ ​ 65,640,477 ​ ​ 66,547,919 ​ ​ 422,020,892 Interest expense ​ ​ 19,932,015 ​ ​ 16,317,869 ​ ​ 12,490,260 Loss on warrant liability ​ ​ 1,608,973 ​ ​ - ​ ​ - Other expense (income) ​ ​ (668,930) ​ ​ 399,182 ​ ​ 559,299 Income (loss) before taxes ​ ​ 109,748,742 ​ ​ (48,490,799) ​ ​ (419,648,713) Income tax expense (benefit) ​ ​ 14,476,821 ​ ​ (5,067,084) ​ ​ 13,090,905 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ ​ 95,271,921 ​ ​ (43,423,715) ​ ​ (432,739,618) Less: net income (loss) attributable to noncontrolling interests ​ ​ 43,092,753 ​ ​ 2,362,899 ​ ​ (7,959,172) Net income (loss) attributable to Nutex Health Inc. ​ $ 52,179,168 ​ $ (45,786,614) ​ $ (424,780,446) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted EBITDA ​ $ 123,709,142 ​ $ 10,827,681 ​ $ 12,547,923 ​ Year December 31, 2024 Compared to Year December 31, 2023 ​ We reported a net income attributable to Nutex Health Inc. of $52.2 million, or earnings of $9.71 per share, for 2024 as compared with a net loss attributable to Nutex Health Inc. of $45.8 million, or a loss of $10.39 per share, for 2023.
Biggest changeActivity within our business segments is significantly impacted by the demand for healthcare services we provide, competition for these services in each of the market areas we serve, and the legislative changes discussed above. 43 Table of Contents Following is our results of operations for the periods shown (in thousands): Year ended December 31, 2025 2024 2023 Revenue: Hospital division $ 844,162 $ 449,064 $ 218,070 Population health management division 31,095 30,885 29,576 Total revenue 875,257 479,949 247,646 Segment operating income (loss): Hospital division 444,027 195,539 36,336 Population health management division 690 1,380 (1,559) Real estate division (436) (658) (3) Total segment operating income 444,281 196,261 34,774 Corporate and other costs: Facilities closing costs — — 217 Acquisition costs — — 44 Stock-based compensation 117,003 16,555 2,836 Impairment of assets — 3,887 29,082 Impairment of goodwill — 3,197 1,139 General and administrative expenses 51,653 41,924 33,230 Total corporate and other costs 168,656 65,563 66,548 Interest expense 22,226 19,932 16,318 Loss on warrant liability — 1,609 — Other expense (income) 8,618 (669) 399 Income (loss) before taxes 244,781 109,826 (48,491) Income tax expense (benefit) 64,424 15,020 (5,067) Net income (loss) 180,357 94,806 (43,424) Less: net income attributable to noncontrolling interests 109,568 42,709 2,363 Net income (loss) attributable to Nutex Health Inc. $ 70,789 $ 52,097 $ (45,787) Adjusted EBITDA $ 259,565 $ 102,774 $ (5,830) Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 We reported net income attributable to Nutex Health Inc. of $70.8 million, or earnings of $10.48 per share, for 2025 as compared with a net income attributable to Nutex Health Inc. of $52.1 million, or earnings of $9.69 per share, for 2024 .
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, any acquisition-related costs and impairments.
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 totaled $19.9 million in 2024 as compared with $16.3 million for 2023. The increase in interest expense is primarily due to leases entered into in 2024 for the opening four facilities throughout the year. ​ Income tax expense.
Interest expense totaled $19.9 million in 2024 as compared with $16.3 million for 2023 . The increase in interest expense is primarily due to leases entered into in 2024 for the opening of four facilities throughout the year. Income tax expense .
At December 31, 2024, we were in compliance with these debt arrangements; we had remaining availability of an aggregate of $5.5 million under outstanding lines of credit. ​ Pre-Paid Advance Agreement with Yorkville. On February 15, 2024, the parties terminated the Pre-Paid Advance Agreement (the “PPA”) dated April 11, 2023 between the Company and YA II PN, Ltd.
At December 31, 2025 , we were in compliance with these debt arrangements; we had remaining availability of an aggregate of $5.3 million under outstanding lines of credit. Pre-Paid Advance Agreement with Yorkville. On February 15, 2024, the parties terminated the Pre-Paid Advance Agreement (the “PPA”) dated April 11, 2023 between the Company and YA II PN, Ltd.
Our 2024 results were principally affected by: ​ • Revenue growth of approximately $169.7 million was primarily driven by successful participation in arbitration through the Independent Dispute Resolution ("IDR") process under the No Surprises Act ("NSA"). • Increased revenue was also attributed to higher utilization of more complex clinical services, including increased observation and in-patient stays. • Patient visits rose by 16.9% for the year ended December 31, 2024, compared to the same period in 2023.
Our 2024 results were principally affected by: • Revenue growth of approximately $169.7 million was primarily driven by successful participation in arbitration through the IDR process under the No Surprises Act ("NSA"). • Increased revenue was also attributed to higher utilization of more complex clinical services, including increased observation and in-patient stays. • Patient visits rose by 16.9% for the year ended December 31, 2024 , compared to the same period in 2023 .
The Real Estate Entities have mortgage loans payable to third parties which are collateralized by the land and buildings. We consolidate the Real Estate Entities as VIEs in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans.
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 the Real Estate Entities as VIEs in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans.
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.
Capitation is a fixed payment amount per patient per unit of time paid in advance 42 Table of Contents 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.
Based on historical collection trends and other analyses, the Company concluded that revenue for a given portfolio would not be materially different than if accounting for revenue on a contract-by-contract basis. ​ Customer payments are due upon receipt of an explanation of benefits for insured patients or it is due upon receipt of the bill from the Company for uninsured payments.
Based on historical collection trends and other analyses, the Company concluded that revenue for a given portfolio would not be materially different than if accounting for revenue on a contract-by-contract basis. 51 Table of Contents Customer payments are due upon receipt of an explanation of benefits for insured patients or it is due upon receipt of the bill from the Company for uninsured payments.
We were incorporated on April 13, 2000 in the state of Delaware. ​ Our 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 we are the primary beneficiary. ​ The hospital division includes our healthcare billing and collections organization and hospital entities.
We were incorporated on April 13, 2000 in the state of Delaware. 41 Table of Contents Our 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 we are the primary beneficiary. The hospital division includes our healthcare billing and collections organization and hospital entities.
We plan to expand our operations by expanding our clinical services at our existing facilities, by entering new market areas either through development of new hospitals, formation of new IPAs or by making acquisitions. We expect to open three new hospital facilities by the end of the year 2025. These facilities are either under construction or in advanced planning stages.
We plan to expand our operations by expanding our clinical services at our existing facilities, by entering new market areas either through development of new hospitals, formation of new IPAs or by making acquisitions. We expect to open three new hospital facilities by the end of 2026. These facilities are either under construction or in advanced planning stages.
Our revenue for 2024 totaled $449.1 million as compared to $218.1 million for 2023, an increase of 106% caused by successful participation in arbitration through the IDR process under the NSA and by an increase in the number of patient visits associated with higher utilization of premium services.
Our revenue for 2024 totaled $449.1 million as compared to $218.1 million for 2023 , an increase of 106% caused by successful participation in arbitration through the IDR process under the NSA and by an increase in the 46 Table of Contents number of patient visits associated with higher utilization of premium services.
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.
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 45 Table of Contents recognized outside of segment operating income as other income by the Real Estate Entities.
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.
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 47 Table of Contents recognized outside of segment operating income as other income by the Real Estate Entities.
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 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 paid to us monthly in the period services are provided based on the number of enrollees selecting us as their healthcare provider.
Generally, our hospital facilities are responsible for the leasehold buildout and equipment while the associated Real Estate Entity procures the land, if any, and constructs a new or remodeled facility.
Generally, our hospital facilities are responsible for the leasehold build out and equipment while the associated Real Estate Entity procures the land, if any, and constructs a new or remodeled facility.
As a result of the Pre-Paid Advance, the Company (i) issued, on April 11, 2023, 0.2 million shares of common stock to Yorkville (23.1 million prior to the 2024 Reverse Stock Splits), reducing the principal of initial Pre-Paid Advance to $7.3 million, (ii) made Optional Prepayments of $8.2 million in accordance with the PPA, consisting of $7.7 million of principal and $1.0 million attributed to the Payment Premium offset by $0.5 million in debt discount amortization, and (iii) paid off in full the remaining outstanding balance of the PPA on January 30, 2024. 44 Table of Contents ​ Unsecured Convertible Term Notes and Warrants with Accredited Investors.
As a result of the Pre-Paid Advance, the Company (i) issued, on April 11, 2023, 0.2 million shares of common stock to Yorkville (23.1 million prior to the 2024 Reverse Stock Splits), reducing the principal of initial Pre-Paid Advance to $7.3 million, (ii) made Optional Prepayments of $8.2 million in accordance with the PPA, consisting of $7.7 million of principal and $1.0 million attributed to the Payment Premium offset by $0.5 million in debt discount amortization, and (iii) paid off in full the remaining outstanding balance of the PPA on January 30, 2024.
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.
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 Company’s indebtedness at December 31, 2024 is presented in Item 8, “Financial Statements – Note 8 – Debt” and our lease obligations are presented in Item 8, “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.
The Company’s indebtedness at December 31, 2025 is presented in Note 8 – Debt and our lease obligations are presented in 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.
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 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.
This change in estimate increased revenue and net income before tax for the year ended December 31, 2024 by approximately $169.7 million and $112.0 million, respectively. ​ The hospital division’s operating income was $195.5 million during 2024, up 438.0% as compared to $36.3 million in the same period of 2023.
This change in estimate increased revenue and net income before tax for the year ended December 31, 2024 by approximately $169.7 million and $112.0 million, respectively. The hospital division’s operating income was $444.0 million during 2025 , increase of 127% as compared to $195.5 million in the same period of 2024 .
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 consolidated balance sheets unless the lease is from a consolidated Real Estate Entity.
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 consolidated balance sheets unless the lease is from a consolidated Real Estate Entity. Our growth plans include the development of new hospital locations.
As of December 31, 2024, we provided guarantees to the indebtedness of two Real Estate Entities. ​ 40 Table of Contents 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.
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.
Mature hospitals experienced an average visit growth of 6.5% year-over-year, alongside the impact of four new hospital openings in 2024. • Our operating expenses increased primarily due the revenue generated from the IDR process in addition to the opening of new facilities and volume growth. ​ Adjusted EBITDA for 2024 was $123.7 million as compared to $10.8 million for 2023.
Mature hospitals experienced an average visit growth of 6.5% year-over-year, alongside the impact of four new hospital openings in 2024 . • Our operating expenses increased primarily due the revenue generated from the IDR process in addition to the opening of new facilities and volume growth.
We anticipate launching one-to-three additional IPAs per year, principally in geographic areas around our existing micro-hospitals. ​ 37 Table of Contents 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.
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.
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.
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.
On average, greater than 90% 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 patients in the form of copays, deductibles, and self-payment.
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 patients in the form of copays, deductibles, and self-payment.
On June 30, 2024, we determined that the fair value of our Population Health Management Division was greater than its carrying value. Therefore, no goodwill impairment was recognized for the quarter ended June 30, 2024.
Due to the sale of Procare, the Company tested for impairment the remaining goodwill in the Population Health Management Division of $13.9 million . On June 30, 2024, we determined that the fair value of our Population Health Management Division was greater than its carrying value. Therefore, no goodwill impairment was recognized for the quarter ended June 30, 2024.
During 2023, we deconsolidated one Real Estate Entity after the third-party lenders released our guarantees of associated mortgage loans. 42 Table of Contents ​ 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.
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.
The following table shows the number of patient visits during the periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2024 ​ 2023 Patient visits: ​ ​ ​ ​ ​ ​ Hospital ​ ​ 168,388 ​ ​ 144,058 ​ Total revenue increased $231.0 million in 2024 from 2023 primarily due to successful participation in arbitration through the IDR process, contributing $169.7 million to the increase, and by an increase in the number of patient visits and the number of visits associated with higher utilization of more complex clinical services. ​ On July 1, 2024, we engaged with a third-party IDR vendor to further support our out of network claims appeals and determine which claims would be beneficial to arbitrate.
The following table shows the number of patient visits during the periods: Year ended December 31, 2024 2023 Patient visits: Hospital 168,388 144,058 Total revenue increased $231.0 million in 2024 from 2023 primarily due to successful participation in arbitration through the IDR process, contributing $169.7 million to the increase, and by an increase in the number of patient visits and the number of visits associated with higher utilization of more complex clinical services.
Our operating income for 2024 was positively affected by an increase in net revenue as noted above. Our contract services expense increased $57.6 million due to the cost associated with the IDR process. Our payroll expense increased due to the opening of four facilities in 2024 as well as due to the accrual of bonus payable in 2025.
Our operating income for 2025 was positively affected by an increase in net revenue as noted above. Our contract services expense increased by $89.6 million primarily due to the cost associated with the IDR process.
We do not have an equity interest in this VIE but consolidate it since we are the primary beneficiary of its operations under our management services contract with them.
We do not have an equity interest in this VIE but consolidate it since we are the primary beneficiary of its operations under our management services contract with them. We also earn management fees under our management services contracts with other IPAs and MSOs which are reported as revenue.
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. Adjusted EBITDA is not intended to serve as an alternative to U.S.
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. 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.
There is no financing component associated with payments due from insurers or patients. ​ Population health management division – The population health management division recognizes revenue for capitation and management fees for services to IPAs and physician groups and for the licensing, training, and consulting related to our cloud-based proprietary technology. ​ Capitation revenue consists primarily of capitated fees for medical services provided by physician-owned entities we consolidate as VIEs.
There is no financing component associated with payments due from insurers or patients. Population health management division – The population health management division recognizes revenue for capitation and management fees for services to IPAs and physician groups and for the licensing, training, and consulting related to our cloud-based proprietary technology on a monthly basis.
Costs incurred to construct assets which will ultimately be classified as fixed assets are capitalized and classified in our financial statements as construction in progress until construction is completed and the asset is available for use.
Costs incurred to construct assets which will ultimately be classified as fixed assets are capitalized and classified in our financial statements as construction in progress until construction is completed and the asset is available for use. Once the asset is available for use, it is reclassified as another category of fixed assets and depreciated across its useful life. Goodwill Impairment.
This division reports the operations of consolidated Real Estate Entities where we provide guarantees of their indebtedness or are co-borrowers. During the second quarter of 2022, we deconsolidated 17 Real Estate Entities after the third-party lenders released our guarantees of associated mortgage loans.
This division reports the operations of consolidated Real Estate Entities where we provide guarantees of their indebtedness or are co-borrowers. During 2023 , we deconsolidated one Real Estate Entity after the third-party lenders released our guarantees of associated mortgage loans. As of December 31, 2024 , we provided guarantees to the indebtedness of two Real Estate Entities.
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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2024 2023 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Insurance ​ ​ 94% ​ ​ 93% ​ ​ 89% Self pay ​ ​ 3% ​ ​ 4% ​ ​ 9% Workers compensation ​ 2% ​ ​ 2% ​ ​ 1% Medicare/Medicaid ​ ​ 1% ​ ​ 1% ​ ​ 1% Total ​ ​ 100% ​ ​ 100% ​ ​ 100% ​ The population health management division recognizes revenue for capitation and management fees for services to IPAs.
The following tables present the allocation of the transaction price with the patient between the primary patient classification of insurance coverage: Year Ended December 31, 2025 2024 2023 Insurance 97 % 94 % 93 % Self pay 1 % 3 % 4 % Workers compensation 1 % 2 % 2 % Medicare/Medicaid 1 % 1 % 1 % Total 100 % 100 % 100 % The population health management division recognizes revenue for capitation and management fees for services to IPAs monthly.
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.
Off-Balance Sheet Arrangements As of December 31, 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.
Total accrued arbitration expenses are $47.7 million as of December 31, 2024. ​ For these reasons, we refined our estimates of variable consideration and revenue recognition timing, particularly to claims subject to arbitration. Our methodology now incorporates historical arbitration outcomes, payor behavior, and expected resolution timing in determining the expected transaction price for applicable claims.
For these reasons, we refined our estimates of variable consideration and revenue recognition timing, particularly to claims subject to arbitration. Our methodology now incorporates historical arbitration outcomes, payment history, and expected resolution timing in determining the expected transaction price for applicable claims.
Legacy Clinigence’s operations are reported as the population health management division. Our total revenue for 2024 for this division was $30.9 million consisting of capitation revenue of $27.8 million, management fees of $2.1 million and SaaS revenue of $1 million. The increase in revenue is attributed to increases in capitation revenue in 2024.
Our total revenue for 2024 for this division was $30.9 million consisting of capitation revenue of $27.8 million, management fees of $2.1 million and SaaS revenue of $1.0 million. The increase in revenue is attributed to increases in capitation revenue in 2024 . Capitation revenue is recognized by our consolidated VIE, Atlas.
Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. ​ 39 Table of Contents A discussion of our segment results is included below. ​ Hospital Division.
Adjusted EBITDA for 2024 was $102.8 million as compared to $(5.8) million for 2023 . Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. A discussion of our segment results is included below. Hospital Division.
Estimates utilized in the projected cash flows include consideration of macroeconomic conditions, overall category growth rates, competitive activities, Company business plans and the discount rate applied to the cash flows.
Estimates utilized in the projected cash flows include consideration of macroeconomic conditions, overall category growth rates, competitive activities, Company business plans and the discount rate applied to the cash flows. Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions.
Nutex is a guarantor or, in limited cases, a co-borrower on the debt arrangements of the Real Estate Entities for the periods shown.
Nutex is a guarantor or, in limited cases, a co-borrower on the debt arrangements of the Real Estate Entities for the periods shown. Certain outstanding debt arrangements require minimum debt service coverage ratios and other financial covenants.
In addition, 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 .
The population health management division includes our management services organizations. In addition, Atlas Healthcare Physicians (“Atlas”, formerly known as “Associated Hispanic Physicians of So. California”), 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.
The population health management division owns and operates provider networks such as independent physician associations (“IPAs”) and offers a cloud-based proprietary technology platform to IPAs which aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers. ​ At December 31, 2024, we employed approximately 800 full-time employees, contracted 255 doctors at our facilities and partnered with over 2,100 physicians within our networks.
The population health management division owns and operates provider networks such as independent physician associations (“IPAs”) and offers a cloud-based proprietary technology platform to IPAs which aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers.
Our operating income was adversely impacted by $4.1 million from the opening of four new hospital locations in 2024. Start-up and operating expenses at new facilities often exceed our revenue at these facilities until they achieve stabilized volumes of patient visits. ​ Population Health Management Division. We completed our reverse business combination with Clinigence in April 2022.
Start-up and operating expenses at new facilities often exceed our revenue at these facilities until they achieve stabilized volumes of patient visits. Population Health Management Division. We completed our reverse business combination with Clinigence in April 2022. Legacy Clinigence’s operations are reported as the population health management division.
During the second quarter of 2022, we deconsolidated 17 Real Estate Entities after the third-party lenders released our guarantees of associated mortgage loans. During 2023, we deconsolidated one Real Estate Entity after the third-party lenders released our guarantees of associated mortgage loans.
During 2023, we deconsolidated one Real Estate Entity after the third-party lenders released our guarantees of associated mortgage loans. As of December 31, 2025 , we provided guarantees to the indebtedness of two Real Estate Entities.
Unanticipated market or macroeconomic events and circumstances may occur, which could affect the accuracy or validity of the estimates and assumptions. ​ On June 30, 2024, the impairment of goodwill of $3.2 million and the derecognition of goodwill of $0.5 million, both for the Population Health Management Division, relate to the sale of Procare Health, Inc., a wholly-owned subsidiary of Nutex.
On June 30, 2024, the impairment of goodwill of $3.2 million and the derecognition of goodwill of $0.5 million, both for the Population Health Management Division, relate to the sale of Procare Health, Inc., a wholly-owned subsidiary of Nutex. Procare was considered part of the Population Health Management Division.
Capitation revenue is recognized by our consolidated VIE, AHISP. We do not have an equity interest in this VIE but consolidate it since we are the primary beneficiary of its operations under our management services contract with them.
We do not have an equity interest in this VIE but consolidate it since we are the primary beneficiary of its operations under our management services contract with them. We also earn management fees under our management services contracts with other IPAs and MSOs which are reported as revenue.
Because all the Company’s performance obligations relate to contracts with patients with a duration of less than one-year, certain disclosures are limited. ​ We are considered “out-of-network” with commercial health plans.
Hospital revenues earned by the Company are recognized at a point in time when the services are provided to patients, net of adjustments and discounts. Because all the Company’s performance obligations relate to contracts with patients with a duration of less than one-year, certain disclosures are limited. We are considered “out-of-network” with commercial health plans.
On the sale of Procare, the Company recognized the derecognition of goodwill of $0.5 million based on the remaining carrying amount of goodwill for the Procare business after impairment. ​ Due to the sale of Procare, the Company tested for impairment the remaining goodwill in the Population Health Management Division of $13.9 million.
Prior to the sale of Procare, the Company recognized a goodwill impairment amount of $3.2 million. On the sale of Procare, the Company recognized the derecognition of goodwill of $0.5 million based on the remaining carrying amount of goodwill for the Procare business after impairment.
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 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 paid to us monthly in the period services are provided based on the number of enrollees selecting us as their healthcare provider.
Our corporate costs for 2023 included general and administrative costs of $33.2 million, a non-cash impairment charge of $30.2 and stock-based compensation of $2.8 million.
Our corporate costs for 2024 included general and administrative costs of $41.9 million, a non-cash impairment charge of $7.1 million and stock-based compensation of $16.6 million .
In determining the appropriate valuation allowance, the Company considered the projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies and reversals of existing taxable temporary differences. ​ As of December 31, 2024, we recorded a non-cash benefit of $6.5 million to income tax expense to remove the majority of the valuation allowance after we concluded that the associated deferred tax assets would be realizable.
As of December 31, 2024 , we recorded a non-cash benefit of $6.5 million to income tax expense to remove the majority of the valuation allowance after we concluded that the associated deferred tax assets would be realizable.
We use an income method to estimate the fair value of these assets, which is based on forecasts of the expected future cash flows attributable to the respective assets. Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants and include the amount and timing of future cash flows (including expected growth rates and profitability).
Significant estimates and assumptions inherent in the valuations reflect a consideration of other marketplace participants, and include the amount and timing of future cash flows (including expected growth rates and profitability).
For the year ended December 31, 2022 we recorded a non-cash benefit of $2.4 million to income tax expense to remove the acquired valuation allowance after we concluded that the associated deferred tax assets would be realizable. ​ As of December 31, 2023, a valuation allowance was established against the net deferred tax asset because the Company determined it was more likely than not that future earnings would not be sufficient to realize the corresponding tax benefits.
As of December 31, 2023, a valuation allowance was established against the net deferred tax asset because the Company determined it was more likely than not that future earnings will not be sufficient to realize the corresponding tax benefits.
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.
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 Physician LLCs are consolidated by the Company as VIEs because they do not have sufficient equity at risk to finance their activities independently.
The result of this change in estimate increased our estimate of the ultimate amounts of accounts receivable we will collect for the current and prior periods.
The new methodology incorporates historical arbitration outcomes, payment history, and expected resolution timing in determining the expected transaction price for applicable claims. The result of this change in estimate increased our estimate of the ultimate amounts of accounts receivable we will collect for the current and prior periods.
In determining the appropriate valuation allowance, the Company considered its net cumulative earnings (adjusted for permanent items) for the last three years, along with the change to its business related to the higher revenue estimates without impacting its existing cost structure. $1.0M valuation allowance remains to offset the deferred tax asset related to capital loss carryforwards that the company does not expect to realize. ​ Each of the discrete items above, as well as the non-deductible goodwill impairment expense recognized in 2024, 2023 and 2022, are one-time, non-cash items. ​ Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 ​ We reported a net loss attributable to Nutex Health Inc. of $45.8 million, or a loss of $10.39 per share, for 2023 as compared with a net loss attributable to Nutex Health Inc. of $424.8 million, or a loss of $100.36 per share, for 2022.
In determining the appropriate valuation allowance, the Company considered its net cumulative earnings (adjusted for permanent items) for the last three years, along with the change to its business related to the higher revenue estimates without impacting its existing cost structure. $1.0 million valuation allowance remains to offset the deferred tax asset related to capital loss carryforwards that the company does not expect to realize.
No goodwill impairment was recognized for year ended December 31, 2024. ​ On December 31, 2023, we recognized an impairment loss of $1.1 million in a reporting unit within our Hospital Division for the closure of a facility in January 2024. ​ During the three months ended September 30, 2022, we determined that the estimated fair value of our population health management division reporting unit which was acquired in the reverse business combination with Clinigence was less than its carrying value.
No goodwill impairment was recognized for years ended December 31, 2025 and December 31, 2024 . 52 Table of Contents On December 31, 2023, we recognized an impairment loss of $1.1 million in a reporting unit within our Hospital Division for the closure of a facility in January 2024.
We also earn management fees under our management services contracts with other IPAs and MSOs which are reported as revenue. ​ The population health management division had $1.4 million of operating income for 2024 driven by our divestiture of Procare and Clinigence Health Inc. entities. These two entities were negatively impacting the population health management division’s operating performance.
The population health management division had $1.4 million of operating income for 2024 driven by our divestiture of Procare and Clinigence Health Inc. entities. These two entities were negatively impacting the population health management division’s operating performance. This strategic move contributed to improved gross margins from 2024 onward, reinforcing the organization's long-term profitability. Real Estate Division.
These amounts are net of appropriate discounts giving recognition to differences between the Company’s charges and reimbursement rates from third party payors. ​ 46 Table of Contents Hospital revenues earned by the Company are recognized at a point in time when the services are provided to patients, net of adjustments and discounts.
Patient service revenues are recorded at the amount that reflects the consideration that the Company expects to be paid for providing patient care. These amounts are net of appropriate discounts giving recognition to differences between the Company’s charges and reimbursement rates from third party payors.
However, actual events and results could differ substantially from those used in our valuations.
We believe the estimates and assumptions utilized in our impairment testing are reasonable and are comparable to those that would be used by other marketplace participants. However, actual events and results could differ substantially from those used in our valuations.
However, these amounts are largely eliminated in the consolidation of these entities into our financial statements. ​ At December 31, 2023, two Real Estate Entities continue to be consolidated in our financial statements.
As of December 31, 2025, two Real Estate Entities continue to be consolidated in our financial statements as VIEs. The Company has no direct or indirect ownership interest in the Physician LLCs.
Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue and start-up costs of four new hospitals in 2023 contributed significantly to the decline in Adjusted EBITDA in the 2023 period. ​ A discussion of our segment results is included below. ​ Hospital Division.
The increased expenses for 2025 related primarily to distributions to ramping hospitals' partners. 44 Table of Contents Adjusted EBITDA for 2025 was $259.6 million as compared to $102.8 million for 2024 . Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. A discussion of our segment results is included below. Hospital Division.
Legacy Clinigence’s operations are reported as the population health management division. Our total revenue for 2023 for this division was $29.6 million consisting of capitation revenue of $25.4 million, management fees of $2.9 million and SaaS revenue of $1.3 million.
Our total revenue for 2025 for this division was $31.1 million consisting of capitation revenue of $28.1 million and management fees of $3.0 million. Capitation revenue is recognized by our consolidated VIE, Atlas.
General and administrative costs increased $8.6 million attributed to increases in accrued bonus expense ($2.7 million), professional services ($2.3 million), insurance expense ($2.3 million) and in other ($1.3 million). ​ As a public company, we must comply with new laws, regulations and requirements, certain corporate governance provisions of the Sarbanes-Oxley Act of 2002, related regulations of the SEC and the continued listing requirements of the NASDAQ, with which we were not required to comply with as a private company.
Our corporate costs for included general and administrative costs of $33.2 million, a non-cash impairment charge of $30.2 million and stock-based compensation of $2.8 million. General and administrative costs increased $8.6 million attributed to increases in accrued bonus expense ($2.7 million), professional services ($2.3 million), insurance expense ($2.3 million) and in other ($1.3 million). Nonoperating items Interest expense .
Since the second quarter of 2022, we deconsolidated 18 Real Estate Entities after the third-party lenders released our guarantees of associated mortgage loans, leaving three Real Estate Entities as current VIEs consolidated in our financial statements. 36 Table of Contents ​ 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 consolidated balance sheets and statements of operations. ​ The population health management division includes our management services organizations.
The Company has no direct or indirect interests in the Real Estate Entities except for the two noted above and a 51% ownership in the May 2025 Acquiree (see Note 3 - Mergers, Acquisitions and Divestitures) , so 100% of the equity for these entities is shown as noncontrolling interest in the consolidated balance sheets and statements of operations.
We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Explanatory Note ​ On April 1, 2022, Nutex Health Holdco LLC merged with Clinigence Holdings, Inc., a publicly traded Delaware corporation, which was renamed Nutex Health Inc. after the merger.
We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law. Overview Nutex Health Inc. is a physician-led, healthcare services and operations company with 26 hospital facilities in 12 states (hospital division), and a primary care-centric, risk-bearing population health management division.
Removed
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.
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At December 31, 2025 , we employed approximatel y 944 full-tim e employees, contra cted more than 280 doc tors at our facilities and partnered with over 3,600 physicians within our networks. Our corporate headquarters is based in Houston, Texas.
Removed
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 Holdings, Inc. (n/k/a Nutex Health, Inc.). ​ The Merger was accounted for as a reverse business combination under U.S. GAAP.
Added
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.
Removed
Therefore, Nutex Health Holdco LLC was treated as the accounting acquirer in the merger.
Added
We generally operate as an out-of-network provider and, as such, do not have negotiated reimbursement rates with insurance companies.
Removed
Beginning with the second quarter of 2022, our financial statements are presented on a consolidated basis and include Clinigence. ​ Except where the context indicates otherwise, (i) references to “we,” “us,” “our,” or the “Company” refer, for periods prior to the completion of the merger, to Nutex Health Holdco LLC and its subsidiaries, (ii) references the “Nutex Health” for periods following the completion of the merger, refer to Nutex Health Inc. and its subsidiaries and (ii) references to “Clinigence” refer to Clinigence Holdings, Inc. and its subsidiaries prior to the completion of 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.
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We anticipate launching one-to-three additional IPAs per year, principally in geographic areas around our existing micro-hospitals.
Removed
Our corporate headquarters is based in Houston, Texas.
Added
Our 2025 results were princip ally affected by: • Patient visits rose by 11.8% for the year ended December 31, 2025, compared to the same period in 2024.
Removed
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.
Added
Mature hospitals experienced an average visit growth of 1.3% year-over-year, alongside the impact of two new hospital openings in 2025. • 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 in the form of one-time obligations of earn-out shares issuable to qualifying under construction and ramping hospitals of $117.0 million for 2025, an increase of $100.4 million compared to 2024 . • Higher income tax expense of $64.4 million for 2025, an increase of $49.3 million compared to 2024. • Higher other expenses of $8.6 million for 2025 compared to income of $0.7 million for 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeQuantitative and Qualitative Disclosure About Market Risk ​ We are exposed to market risk related to changes in interest rates, primarily as a result of the line of credit facilities which bear interest based on floating rates. ​ The estimated fair value of our long-term debt approximates the carrying amount at December 31, 2024 due to its relatively short maturity.
Biggest changeItem 7A. Quantitative and Qualitative Disclosure About Market Risk We are exposed to market risk related to changes in interest rates, primarily as a result of the line of credit facilities which bear interest based on floating rates.
To mitigate the impact of fluctuations in interest rates, we generally target our debt portfolio to be maintained at fixed rates. ​ ​
To mitigate the impact of fluctuations in interest rates on our long-term debt, we generally target our debt portfolio to be maintained at fixed rates. 54 Table of Contents

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