Nutex Health Inc.
03/05/2026 | Press release | Distributed by Public on 03/05/2026 15:11
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion is intended to assist you in understanding our results of operations and our present financial condition and contains forward-looking statements that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. We caution you that our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences are discussed elsewhere in this Annual Report, particularly in the "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors," all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. 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 26hospital facilities in 12states (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"). 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, 2025, we employed approximately 944 full-time employees, contracted more than 280 doctors at our facilities and partnered with over 3,600physicians within our networks. Our corporate headquarters is based in Houston, Texas. We were incorporated on April 13, 2000 in the state of Delaware.
Our financial statements present the Company's consolidated financial condition and results of operations including those of majority-owned subsidiaries and variable interest entities ("VIEs") for which we are the primary beneficiary.
The hospital division includes our healthcare billing and collections organization and hospital entities. In addition, we have financial and operating relationships with multiple professional entities (the "Physician LLCs") and real estate entities (the "Real Estate Entities"). The Physician LLCs employ the doctors who work in our hospitals. These Physician LLCs are consolidated by the Company as VIEs because they do not have sufficient equity at risk to finance their activities independently. The Company is considered the primary beneficiary of these entities because (i) it has the power to direct the activities that most significantly affect their economic performance through its contractual and operational oversight, and (ii) it has the obligation to absorb losses and the right to receive benefits that could be significant, as evidenced by the Company's historical practice of providing financial support during periods of cash shortfall and receiving the benefit of services.
The Real Estate Entities own the land and 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. As of December 31, 2025, twoReal 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. 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.
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.
Sources of revenue.Our hospital division recognizes net patient service revenue for contracts with patients and in most cases a third-party payor (commercial insurance, workers compensation insurance or, in limited cases, Medicare/Medicaid).
We receive payment for facility services rendered by us from federal agencies, private insurance carriers, and patients. The Physician LLCs receive payment for doctor services from these same sources. On average, greater than 99%of our net patient service revenue is paid by insurers, federal agencies, and other non-patient third parties. The remaining revenues are paid by our patients in the form of copays, deductibles, and self-payment. We generally operate as an out-of-network provider and, as such, do not have negotiated reimbursement rates with insurance companies.
The following tables present the allocation of the transaction price with the patient between the primary patient classification of insurance coverage:
| 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. 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. Capitation is a fixed payment amount per patient per unit of time paid in advance
for the delivery of health care services, whereby the service providers are generally liable for excess medical costs. We receive management fees that are based on gross capitation revenues of the IPAs or physician groups we manage.
Our growth strategy. We plan to expand our operations by expanding our clinical services at our existing facilities, by entering new market areas either through 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. We anticipate launching one-to-three additional IPAs per year, principally in geographic areas around our existing micro-hospitals.
Industry Trends
The demand for healthcare services continues to be impacted by the following trends:
•Regulatory uncertainty;
•A growing focus on healthcare spending by consumers, employers and insurers, who are actively seeking lower-cost care solutions;
•A shift in patient volumes from inpatient to outpatient settings due to technological advancements and demand for care that is more convenient, affordable and accessible;
•The growing aged population, which requires greater chronic disease management and higher-acuity treatment; and
•Ongoing consolidation of providers and insurers across the healthcare industry.
The healthcare industry, particularly emergency care hospitals, continues to be subject to ongoing regulatory uncertainty. Changes in federal or state healthcare laws, regulations, funding policies or reimbursement practices, especially those involving reductions to government payment rates or limitations on what providers may charge, could significantly impact future revenue and operations. For example, the No Surprises Act prohibits providers from charging patients an amount beyond the in-network cost sharing amount for services rendered by out-of-network providers, subject to limited exceptions. For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the amounts received by out-of-network providers from health plans. Any reduction in the rates that we can charge or amounts we can receive for our services will reduce our total revenue and our operating margins.
Results of Operations
We report the results of our operations as three segments in our consolidated financial statements: (i) the hospital division, (ii) the population health management division and (iii) the real estate division. Activity within our business segments is significantly impacted by the demand for healthcare services we provide, competition for these services in each of the market areas we serve, and the legislative changes discussed above.
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 incomeattributable to Nutex Health Inc. of $70.8 million, or earnings of $10.48 per share, for 2025as compared with a net incomeattributable to Nutex Health Inc. of $52.1 million, or earnings of $9.69per share, for 2024. Our 2025results were principally affected by:
•Patient visits rose by 11.8% for the year ended December 31, 2025, compared to the same period in 2024. 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. The increased expenses for 2025 related primarily to distributions to ramping hospitals' partners.
Adjusted EBITDA for 2025was $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.Our revenue for 2025totaled $844.2 million as compared to $449.1 million for 2024, an increaseof $395.1 million, or 88%.Our revenue for 2025 was positively affected by an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process, an increase in visits and increased utilization of higher paid services such as increased observation and in-patient stays. The following table shows the number of patient visits during the periods:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Patient visits: | |||||||||||
| Hospital | 188,279 | 168,388 | |||||||||
Effective May 1, 2024, we engaged HaloMD, a third-party IDR vendor, to further support our out of network claims appeals and determine which claims would be beneficial to arbitrate. The IDR process can take up to three to five months to receive payments relative to the start of a claim's open negotiation process. In order to facilitate the dispute arbitration process, the Company incurred fees to the Centers for Medicare and Medicaid Services ("CMS"), the organizations that arbitrate the payment amount between the plan and providers ("IDRE"), and commission and fees to the third-party IDR vendor. Total accrued arbitration expenses were $49.7 million and $47.7 million as of December 31, 2025 and 2024, respectively.
For these reasons, in 2024 we refined our estimates of variable consideration and revenue recognition timing, particularly to claims subject to arbitration. 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. This change in estimate increased revenue and net income before tax for the year ended December 31, 2024by 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. Our operating income for 2025was positively affected by an increase in net revenue as noted above. Our contract services expense increasedby $89.6 million primarily due to the cost associated with the IDR process. Our payroll expense increased by $40.6 million due to the opening of two facilities in 2025 as well as due to the accrual of bonus payable in 2026.
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. Our total revenue for 2025for 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. 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.
The population health management division had $0.7 million of operating income for 2025driven by significant membership growth and the higher claims experience associated with newly enrolled members.
Real Estate Division.This division reports on 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, 2025, we provided guarantees to the indebtedness of twoReal Estate Entities.
Revenue and operating expenses of consolidated Real Estate Entities are not significant since the extent of these entities' operations is to own facilities leased to our hospital division entities which are financed by a combination of contributed equity by related parties and third-party mortgage indebtedness. Such leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Finance lease income is
recognized outside of segment operating income as other income by the Real Estate Entities. However, these amounts are largely eliminated in the consolidation of these entities into our financial statements.
On May 2, 2025, the Company acquired a 51% membership interest in an Indiana-based limited liability company ("May 2025 Acquiree") for $2.3 million in cash. Due to the assumption of the note payable, interest expense was $0.2 million for the year ended December 31, 2025.
On December 17, 2025, the Company acquired land and an office building, together with related contractual rights, including existing tenant lease agreements and certain service contracts pursuant to an asset purchase agreement, for $2.2 million in cash. The Company recognized rental income of $0.1 million, which is included in the hospital division revenue line item in the consolidated statements of operations, and $0.2 million in operating expenses for the year ended December 31, 2025.
Corporate and other costs.Corporate and other costs in 2025included general and administrative expenses totaling $51.7 million and stock-based compensation of $117.0 million. Our stock-based compensation expense in the form of one-time obligations paid in common stock to qualifying under construction and ramping hospitals increased by $100.4 million. Our corporate costs for 2024included 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. General and administrative costs increased $9.7 million attributed to increases in accrued bonus expense and payroll of $4.5 million, audit and audit-related fees associated with the restatement of our 2024 financial statements of $2.3 million, recruiting fees of $1.4 million, and other professional and IT expenses of $1.4 million.
Nonoperating items
Interest expense. Interest expense totaled $22.2 million in 2025as compared with $19.9 million for 2024. The increasein interest expense is primarily due to leases entered into throughout 2024 that are fully operatingin 2025, and due to leases entered into in 2025forthe opening of two facilities throughout the year.
Income tax expense. As of December 31, 2025 the Company fully utilized its federal and state net operating losses. As of December 31, 2025 and 2024, the Company had a capital loss carryforward of $0.2 million and $4.5 million, respectively. Due to the uncertainty about the Company's ability to utilize the capital loss prior to the expiration date, the Company maintained a valuation allowance against that deferred tax asset as of December 31, 2024. The expired capital loss was written off and the corresponding valuation allowance was reversed as of December 31, 2025.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
We reported a net income attributable to Nutex Health Inc. of $52.1 million, or earnings of $9.69per share, for 2024as compared with a net loss attributable to Nutex Health Inc. of $45.8 million, or a loss of $10.39per share, for 2023. Our 2024results 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. 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 2024was $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.Our revenue for 2024totaled $449.1 million as compared to $218.1 million for 2023, an increaseof 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. 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 2024from 2023primarily 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.
Effective May 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 IDR process can take up to three to five months to receive payments relative to the start of a claim's open negotiation process. In order to facilitate the dispute arbitration process, the Company incurred fees to the Centers for Medicare and Medicaid Services ("CMS"), the organizations that arbitrate the payment amount between the plan and providers ("IDRE"), and commission and fees to the third-party IDR vendor. 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, 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. This change in estimate increased revenue and net income before tax for the year ended December 31, 2024by approximately $169.7 million and $112.0 million, respectively.
The hospital division's operating income was $195.5 million during 2024, up 438.1%as compared $36.3 million in the same period of 2023. Our operating income for 2024was 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 was adversely impacted by $8.4 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. 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 $1.0 million. The increase in revenue is attributed to increases in capitation revenue in 2024. Capitation revenue is recognized by our consolidated VIE, Atlas. 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.
The population health management division had $1.4 million of operating income for 2024driven 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 2024onward, reinforcing the organization's long-term profitability.
Real Estate Division.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 twoReal Estate Entities.
Revenue and operating expenses of consolidated Real Estate Entities are not significant since the extent of these entities' operations is to own facilities leased to our hospital division entities which are financed by a combination of contributed equity by related parties and third-party mortgage indebtedness. Such leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Finance lease income is
recognized outside of segment operating income as other income by the Real Estate Entities. However, these amounts are largely eliminated in the consolidation of these entities into our financial statements.
Corporate and other costs.Corporate and other costs in 2024included general and administrative expenses totaling $41.9 million, impairment losses of assets and goodwill of $7.1 million due to facility closures and stock-based compensation of $16.6 million. 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. Interest expense totaled $19.9 million in 2024as compared with $16.3 million for 2023. The increase in interest expense is primarily due to leases entered into in 2024for the opening of four facilities throughout the year.
Income tax expense.
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 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. 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.
Each of the discrete items above, as well as the non-deductible goodwill impairment expense recognized in 2024 and 2023are one-time, non-cash items.
Liquidity and Capital Resources
As of December 31, 2025, we had $185.6 million of cash and equivalents, compared to $40.6 million of cash and equivalents at December 31, 2024.
Significant sources and uses of cash during 2025.
Sources of cash:
•Cash from operating activities was $248.1 million.
•Cash related to restricted short-term investment was $1.6 million.
•Cash capital contributions by noncontrolling members of $0.8 million.
•Proceeds from borrowings under lines of credit were $5.0 million.
Uses of cash:
•Acquisitions of property and equipment were $2.5 million.
•We made distributions to noncontrolling interest owners totaling $74.3 million.
•Net repayment of notes payable totaled $11.4 million.
•Cash related to stock repurchases and retirements was $5.0 million.
•Repayments of lines of credit totaled $7.9 million.
•Payments for asset acquisitions of $4.3 million.
•Repayments of finance leases totaled $5.2 million.
Future sources and uses of cash. Our operating activities are financed with cash on hand which is generated from revenues. Most of our hospital facilities are leased from various lessors including related parties. These leases are presented in our consolidated balance sheets unless the lease is from a consolidated Real Estate Entity. Our growth plans include the development of new hospital locations. We expect that in many of these locations we will lease facilities from newly established entities partially owned by related parties.
We routinely enter into equipment lease agreements to procure new or replacement equipment and may also finance these purchases with term debt. We have smaller lines of credits available for working capital purposes and are presently working to supplement or replace these with larger financing commitments. These larger financing commitments are subject to market conditions and we may not be able to obtain such larger financing commitments at favorable economic terms or at all.
Indebtedness.The Company's indebtedness at December 31, 2025 is presented in Note 8- Debtand 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. Unless otherwise delineated above, these debt arrangements are obligations of Nutex and/or its wholly-owned subsidiaries. Consolidated Real Estate Entities have entered into private debt arrangements with banking institutions for purposes of purchasing land, constructing new emergency room facilities and building out leasehold improvements which are leased to our hospital entities. Nutex is a guarantor or, in limited cases, a co-borrower on the debt arrangements of the Real Estate Entities for the periods shown.
Certain outstanding debt arrangements require minimum debt service coverage ratios and other financial covenants. At December 31, 2025, we were in compliance with these debt arrangements; we had remaining availability of an aggregate of $5.3 millionunder 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. ("Yorkville") pursuant to which the Company requested an advance of $15.0 million from Yorkville a "Pre-Paid Advance") purchased by Yorkville at 90% of the face amount. Interest accrued on the outstanding balance of the Pre-Paid Advance at an annual rate equal to 0% subject to an increase to 15% upon events of default described in the PPA. The Pre-Paid Advance had a maturity date of 12 months from the Pre-Paid Advance Date. 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.
Unsecured Convertible Term Notes and Warrants with Accredited Investors.From September 2023 to December 2023, the Company conducted a private offering of convertible notes ("Unsecured Convertible Term Notes") and six-year warrants ("Warrants") to accredited investors (the "Holders") as defined in Rule 501 under the 1933 Act and issued Unsecured Convertible Term Notes convertible into an aggregate of 89,751 shares (13,462,500 prior to the 2024 Reverse Stock Splits) of common stock at a conversion price of $60.00 per share ($0.40 prior to the 2024 Reverse Stock Splits) and Warrants to purchase an aggregate of 44,875 shares of common stock (6,731,250 prior to the 2024 Reverse Stock Splits) at an exercise price of $60.00 per share ($0.40 prior to the 2024 Reverse Stock Splits). We also issued Warrants for the purchase of 26,925 shares (4,038,750 prior to the 2024 Reverse Stock Splits) to the placement agent. On March 26, 2024, the Company and the Holders agreed to amend the conversion price of the Unsecured Convertible Term Notes and exercise price of the Warrants to $30.00 each ($0.20 prior to the 2024 Reverse Stock Splits), resulting in the Unsecured Convertible Term Notes being convertible into 179,500 shares of common stock (26,925,000 prior to the 2024 Reverse Stock Splits), the Warrants exercisable for 89,750 shares of common stock (13,462,500 prior to the 2024 Reverse Stock Splits) and the placement agent Warrants exercisable for 53,850 shares of common stock (8,077,500 prior to the 2024 Reverse Stock Splits). The Unsecured Convertible Term Notes matured on October 31, 2025 and the Warrants expire on December 31, 2029.
As of October 31, 2025, the remaining note holders of unsecured convertible term notes converted $4.9 million of principal and $0.1 million of interest to 165,030 shares of the Company's common stock, valued at $30.00 per share.
The Company appointed Emerson Equity LLC as placement agent for the September 2023 Private Offering. Per the Placement Agent Agreement, the Company agrees to pay (i) a cash commission equal to 10% of the gross proceeds and (ii)
warrants to purchase a number of Common Stock equal to 20% of the total number of shares issuable upon conversion or exercise of the Unsecured Convertible Term Notes and Warrants, as applicable.
On December 16, 2025, the Company entered into an amendment of the terms of the September 2023 Private Offering. The amendment permits the Holder to exercise the Warrant on a cashless basis in the event that there is no effective registration statement available for the resale of the underlying securities. The amendment did not change the exercise price of the Warrant, which remains $30.00 per share, nor did it modify the number of Warrants issued. On December 16, 2025, pursuant to the amended terms, a Holder completed a cashless exercise of a Warrant and the Company issued 40,387 shares of its common stock.
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. We believe Adjusted EBITDA is useful because it allows us to more effectively evaluate our operating performance.
We define Adjusted EBITDA as net income (loss) attributable to Nutex Health Inc. plus net interest expense, income taxes, depreciation and amortization, further adjusted for stock-based compensation, certain defined items of expense, and any acquisition-related costs and impairments. Interest expense includes interest on lease liabilities, which is a component of total finance lease cost. A reconciliation of net income to Adjusted EBITDA is included below. 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.
Beginning if the first quarter of 2025, we have updated our presentation of Adjusted EBITDA to separately disclose finance lease payments related to leases under ASC 842. We believe this change provides greater transparency into our operating performance. The prior periods presented are adjusted to reflect this change in presentation. Adjusted EBITDA follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA: | |||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | $ | 70,789 | $ | 52,097 | $ | (45,786) | |||||||||||
| Depreciation and amortization | 20,530 | 18,972 | 17,592 | ||||||||||||||
| Interest expense, net | 22,226 | 19,932 | 16,318 | ||||||||||||||
| Income tax expense (benefit) | 64,424 | 15,020 | (5,067) | ||||||||||||||
| Allocation to noncontrolling interests | (9,385) | (7,176) | (5,546) | ||||||||||||||
| EBITDA | 168,584 | 98,845 | (22,489) | ||||||||||||||
| Facility closing costs | - | - | 217 | ||||||||||||||
| Acquisition costs | - | - | 43 | ||||||||||||||
| Loss on warrant liability | - | 1,609 | - | ||||||||||||||
| Stock-based compensation | 117,003 | 16,555 | 2,836 | ||||||||||||||
| Impairment of assets | - | 3,887 | 29,082 | ||||||||||||||
| Impairments of goodwill | - | 3,197 | 1,139 | ||||||||||||||
|
Finance lease payments(1)
|
(26,022) | (21,319) | (16,658) | ||||||||||||||
| Adjusted EBITDA | 259,565 | 102,774 | (5,830) | ||||||||||||||
|
Three months ended December 31, 2025 |
Three months ended December 31, 2024 |
||||||||||
| Unaudited | Unaudited | ||||||||||
| Reconciliation of net income (loss) attributable to Nutex Health Inc. to Adjusted EBITDA: | |||||||||||
| Net income (loss) attributable to Nutex Health Inc. | $ | 11,834 | $ | 61,612 | |||||||
| Depreciation and amortization | 5,187 | 5,280 | |||||||||
| Interest expense, net | 4,976 | 5,052 | |||||||||
| Income tax expense | 9,286 | 9,152 | |||||||||
| Allocation to noncontrolling interests | (5,570) | (2,195) | |||||||||
| EBITDA | 25,713 | 78,901 | |||||||||
| Loss on warrant liability | - | 536 | |||||||||
| Stock-based compensation | (2,603) | 14,603 | |||||||||
| Impairment of assets | - | (11) | |||||||||
|
Finance lease payments(1)
|
(6,510) | (7,363) | |||||||||
| Adjusted EBITDA | $ | 16,600 | $ | 86,666 | |||||||
1.Finance lease payments consist of cash payments for financing leases under ASC842, which should be deducted from EBITDA. We believe this change is useful to investors to evaluate the ongoing operating performance of our business.
Significant Accounting Policies
Revenue recognition.
Hospital division- Our hospital division recognizes patient service revenue for contracts with patients, and in most cases, patients with out of network benefits with a third-party payor, such as, commercial insurance, workers compensation insurance or, in limited cases, Medicare/Medicaid. The Company's performance obligations are to provide emergency health care services primarily on an outpatient basis. 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.
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. As there are no contractual rates established with insurance entities, revenues are estimated based on the "usual and customary" charges allowed by insurance payors using historical collection experience, historical trends of refunds and payor payment adjustments (retractions). Revenue from the Medicare program is based on reimbursement rates set by governmental authorities. For insured patients, the transaction price is determined based on gross charges for services provided, reduced by adjustments provided to third-party payors, discounts and implicit price concessions provided primarily to uninsured patients in accordance with the Company's policy. For uninsured patients, the Company recognizes revenue based on established rates, subject to certain discounts and implicit price concessions. The Company is reimbursed from third party payors under various methodologies based on the level of care provided.
Patients who have health care insurance may also have discounts applied related to their copayment or deductible. Estimates of contractual adjustments and discounts are determined by major payor classes for outpatient revenues based on historical experience. The Company estimates implicit price concessions based on its historical collection experience with these classes of patients using a portfolio approach. The portfolios consist of major payor classes for outpatient revenue. 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. 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.
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. Capitation is a fixed payment amount per patient per unit of time paid in advance for the delivery of health care services, whereby the service providers are generally liable for excess medical costs.
We receive management fees that are based on gross capitation revenues of the IPAs or physician groups we manage. Revenue is recognized and received monthly for our services. In addition, we provide consultant services that are charged as a flat fixed rate and recognized as revenue when the service is performed. Consultant services revenues represent a small portion of our total revenue.
Construction in Progress.The Company regularly is in the process of constructing new facilities. 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. 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.We test goodwill for impairment at least annually by first performing a qualitative assessment to determine whether a quantitative goodwill test is necessary or by electing to forgo the qualitative assessment and perform the quantitative goodwill test. For the year ended December 31, 2025, the Company elected to perform a qualitative assessment of goodwill. Upon performing the qualitative assessment of goodwill, qualitative factors are assessed to determine whether it is more likely than not that the fair value is less than the carrying amount. For the years ended December 31, 2024 and 2023, we elected to perform a quantitative goodwill test which compares the estimated fair values of our reporting units to their respective carrying values. For the quantitative test, we use the 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). 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.
Based on the results of the annual qualitative assessment of goodwill for the year ended December 31, 2025, we concluded it is not more likely than not that the fair value of the Population Health Management Division is less than the carrying amount and therefore, did not perform a quantitative goodwill test or record impairment.
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. 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.
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. No goodwill impairment was recognized for years ended December 31, 2025 and 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.
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. To the extent such factors result in a failure to achieve the level of projected cash flows used to estimate fair value for purposes of establishing or subsequently impairing the carrying amount of goodwill and intangible assets, we may need to record additional non-cash impairment charges in the future.
Selected Quarterly Financial Data
During 2025, the Company determined that its previously issued consolidated financial statements for the year ended December 31, 2024 required restatement. The restatement primarily related to the reclassification of non-cash stock-based compensation obligations associated with under-construction and ramping hospitals from equity to liabilities, based on the applicable classification criteria under ASC 718, Compensation-Stock Compensation, and ASC 480, Distinguishing Liabilities from Equity. In addition, the Company recorded certain immaterial adjustments, including the reclassification of related-party balances intended as capital contributions, the reclassification of restricted balances out of cash and cash equivalents, adjustments to income tax expense and related disclosures, and certain presentation refinements. As a result of these changes, the Company's previously reported quarterly results for fiscal years 2024 and 2025 have been revised, including income (loss) and earnings per share, as reflected in the summarized quarterly financial information presented below:
| For the quarters ended | |||||||||||||||||||||||
| (In thousands, except per share amounts) | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | |||||||||||||||||||
| Total revenue | $ | 151,679 | $ | 267,804 | $ | 243,985 | $ | 211,789 | |||||||||||||||
| Total operating costs and expenses | 105,541 | 112,923 | 119,061 | 93,451 | |||||||||||||||||||
| Gross profit | 46,138 | 154,881 | 124,924 | 118,338 | |||||||||||||||||||
| Total corporate and other costs | 15,220 | 24,514 | 91,245 | 37,677 | |||||||||||||||||||
| Operating income (loss) | 30,918 | 130,367 | 33,679 | 80,661 | |||||||||||||||||||
| Income (loss) before taxes | 25,894 | 123,939 | 23,732 | 71,216 | |||||||||||||||||||
| Income tax expense (benefit) | 9,286 | 27,140 | 7,588 | 20,410 | |||||||||||||||||||
| Net income (loss) | 16,608 | 96,799 | 16,144 | 50,806 | |||||||||||||||||||
| Less: net income attributable to noncontrolling interests | 4,774 | 41,364 | 33,841 | 29,589 | |||||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | 11,834 | 55,435 | (17,697) | 21,217 | |||||||||||||||||||
| Earnings (loss) per common share | |||||||||||||||||||||||
| Basic | 1.68 | 8.27 | (2.95) | 3.74 | |||||||||||||||||||
| Diluted | 1.62 | 7.76 | (2.95) | 3.33 | |||||||||||||||||||
| For the quarters ended | |||||||||||||||||||||||
| (In thousands, except per share amounts) | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | |||||||||||||||||||
| Total revenue | $ | 257,619 | $ | 78,795 | $ | 76,082 | $ | 67,453 | |||||||||||||||
| Total operating costs and expenses | 115,992 | 56,878 | 53,521 | 57,296 | |||||||||||||||||||
| Gross profit | 141,626 | 21,917 | 22,561 | 10,157 | |||||||||||||||||||
| Total corporate and other costs | 27,340 | 12,254 | 17,262 | 8,707 | |||||||||||||||||||
| Operating income (loss) | 114,286 | 9,663 | 5,299 | 1,450 | |||||||||||||||||||
| Income (loss) before taxes | 108,654 | (2,580) | 3,904 | (152) | |||||||||||||||||||
| Income tax expense (benefit) | 9,151 | 4,585 | 894 | 390 | |||||||||||||||||||
| Net income (loss) | 99,503 | (7,165) | 3,010 | (542) | |||||||||||||||||||
| Less: net income attributable to noncontrolling interests | 37,890 | 1,623 | 3,374 | (178) | |||||||||||||||||||
| Net income (loss) attributable to Nutex Health Inc. | 61,613 | (8,788) | (364) | (364) | |||||||||||||||||||
| Earnings (loss) per common share | |||||||||||||||||||||||
| Basic | 11.33 | (1.72) | (0.07) | (0.08) | |||||||||||||||||||
| Diluted | 9.88 | (1.72) | (0.07) | (0.08) | |||||||||||||||||||
Nutex Health Inc. published this content on March 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 05, 2026 at 21:12 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]