Nutex Health Q3 2026 revenue falls to $218M
Quarterly revenue and attributable income were lower year over year, while nine-month operating cash flow and attributable income were higher.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Nutex Health Inc. reported third-quarter 2026 revenue of $217.6 million, down from $267.8 million a year earlier. Hospital-division revenue was $209.1 million versus $260.2 million, while population health management revenue was $8.5 million versus $7.6 million. Operating income was $77.1 million, compared with $130.4 million, and net income attributable to Nutex was $40.2 million versus $55.4 million.
For the first nine months, revenue was $644.9 million versus $723.6 million, while net income attributable to Nutex was $152.9 million versus $59.0 million. That comparison includes a prospective accounting estimate change tied to the amended HaloMD agreement and lower federal IDR administrative fees: the change reduced contract services expense by $52.3 million and increased net income attributable to Nutex by $25.0 million for the nine-month period.
Net cash provided by operating activities was $188.1 million versus $177.7 million for the nine months. Cash and cash equivalents were $249.9 million as of September 30, 2026.
2 points · 0 major0 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month attributable income: $152.9 million vs. $59.0 million; estimate change increased it by $25.0 million.
- Minor point$188.1 million nine-month operating cash flow, versus $177.7 million.
Negative
- Moderate pointThird-quarter revenue: $217.6 million, versus $267.8 million a year earlier.
- Moderate pointThird-quarter attributable income: $40.2 million, versus $55.4 million.
Filing Explained
As of November second, Nutex reported six million eight hundred sixty thousand seven hundred ninety-four shares outstanding, including shares issuable under existing earn-outs.
In this Form 10-Q, Nutex Health reports existing earn-out obligations under which former hospital owners may receive additional common shares; one hospital’s pro forma estimate is 73,600 shares, which would increase the share count and reduce existing holders’ percentage ownership if issued.
The 73,600 shares are not reported as issued: they are a pro forma estimate for a hospital with a measurement period ending
For eight hospitals whose measurement periods had ended by
As of
Key Figures
Third-quarter revenue: $217.6 million versus $267.8 million
Third-quarter net income attributable to Nutex: $40.2 million versus $55.4 million
Nine-month revenue: $644.9 million versus $723.6 million
+4 more
7 metrics
Third-quarter revenue
$217.6 million versus $267.8 million
Three months ended September 30, 2026 and 2025
Third-quarter net income attributable to Nutex
$40.2 million versus $55.4 million
Three months ended September 30, 2026 and 2025
Nine-month revenue
$644.9 million versus $723.6 million
Nine months ended September 30, 2026 and 2025
Nine-month net income attributable to Nutex
$152.9 million versus $59.0 million
Nine months ended September 30, 2026 and 2025; includes a $25.0 million increase from the estimate change
Net cash provided by operating activities
$188.1 million versus $177.7 million
Nine months ended September 30, 2026 and 2025
Cash and cash equivalents
$249.9 million
As of September 30, 2026
Reduction in contract services expense
$52.3 million
Nine months ended September 30, 2026; related to the HaloMD agreement amendment and CMS fee reduction
Key Terms
independent dispute resolution (IDR), qualifying payment amount (QPA), out-of-network rate, variable interest entities (VIEs), +1 more
5 terms
independent dispute resolution (IDR) regulatory
"the independent dispute resolution (IDR) process"
qualifying payment amount (QPA) regulatory
"the qualifying payment amount (QPA)"
out-of-network rate regulatory
"statutorily calculated “out-of-network rate”"
variable interest entities (VIEs) financial
"consolidated variable interest entities (“VIEs”)"
A variable interest entity (VIE) is a business structure where one party controls another company’s operations and economic benefits through contracts rather than majority ownership, often used when direct ownership is restricted. Think of it like having power of attorney over a business: you run it and get the profits, but you don’t hold the legal title. For investors this matters because VIEs can concentrate legal and regulatory risk and may limit shareholders’ direct rights to assets, which can affect valuation and stability.
change in estimate financial
"accounted for these impacts as a change in estimate"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was NUTX revenue in the third quarter of 2026?
NUTX reported $217.6 million of revenue for the three months ended September 30, 2026, versus $267.8 million a year earlier. Hospital-division revenue was $209.1 million versus $260.2 million, while population health management revenue was $8.5 million versus $7.6 million.
How much net income did NUTX report in the third quarter of 2026?
NUTX reported $57.3 million in total net income and $40.2 million attributable to Nutex for the third quarter of 2026. A year earlier, those figures were $96.8 million and $55.4 million, respectively.
How did Nutex's IDR fee changes affect earnings?
The June 30, 2026 amendment to Nutex's HaloMD agreement and the CMS fee reduction led to a $52.3 million reduction in contract services expense for the nine months ended September 30, 2026. Nutex said the changes increased net income attributable to it by $25.0 million and net income attributable to noncontrolling interests by $18.0 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
See more from StockTitan in Google Search and AI answers.
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
or
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-41346
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip code) | ||||
(713 ) 660-0557
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Nasdaq Texas, LLC | ||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 2, 2026, the registrant had 6,860,794 shares of common stock, $0.001 par value, outstanding. Includes the additional shares issuable to satisfy existing earn out obligations.
Table of Contents
NUTEX HEALTH INC.
FORM 10-Q
TABLE OF CONTENTS
Introductory Note | ||||||||
Cautionary Note Regarding Forward-Looking Statements | ||||||||
Part I — Financial Information | ||||||||
Item 1. | Financial Statements | 4 | ||||||
Condensed Consolidated Balance Sheets (unaudited) | 4 | |||||||
Condensed Consolidated Statements of Operations (unaudited) | 5 | |||||||
Condensed Consolidated Statements of Changes in Equity (unaudited) | 6 | |||||||
Condensed Consolidated Statements of Cash Flows (unaudited) | 7 | |||||||
Notes to Condensed Consolidated Financial Statements (unaudited) | 9 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 41 | ||||||
Item 4. | Controls and Procedures | 41 | ||||||
Part II — Other Information | ||||||||
Item 1. | Legal Proceedings | 41 | ||||||
Item 1A. | Risk Factors | 42 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 43 | ||||||
Item 3. | Defaults upon Senior Securities | 43 | ||||||
Item 4. | Mine Safety Disclosures | 43 | ||||||
Item 5. | Other Information | 44 | ||||||
Item 6. | Exhibits | 44 | ||||||
Table of Contents
INTRODUCTORY NOTE
Unless the context dictates otherwise, references in this Quarterly Report on Form 10-Q to the “Company,” “we,” “us,” “our,” “Nutex” and similar words are references to Nutex Health Inc., a Delaware corporation, and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”).
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions.
This document contains certain forward-looking statements with respect to our financial condition, results of operations and business, plans, objectives and strategies. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” “commit,” “advance,” “likely” or similar expressions that convey the prospective nature of events or outcomes.
These forward-looking statements reflect our current views with respect to future events and are based on numerous assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors we believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future.
Such uncertainties and risks include, but are not limited to:
•regulatory, legislative and litigation uncertainty under the No Surprises Act;
•lawsuits filed by health insurance providers against our third-party provider in the arbitration process;
•sales of a substantial amount of our Common Stock by our stockholders;
•our obligation to issue a significant amount of additional shares of our Common Stock to former doctor owners of hospitals under construction at the time of our 2022 merger;
•manipulative short seller reports;
•the impact of litigation and disputes, including pending earn-out disputes, securities class actions, derivative actions and class actions related to the recent cybersecurity incident;
•impacts of the recent and potential future cybersecurity incidents;
•inability to successfully execute our growth strategy;
•general and industry specific economic conditions;
•inability to obtain capital;
•the effects of rapid growth upon the Company and the ability of management to effectively respond to the growth and demand for products and services of the Company;
•newly developing technologies;
•the Company’s ability to compete;
•conflicts of interest in related party transactions, including with our CEO and major stockholder; and
•the effects of competition.
The factors described in the context of such forward-looking statements in this document could cause our plans, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to have been correct and persons reading this document are therefore cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report. We do not assume any obligation to update the information contained in this document (whether as a result of new information, future events or otherwise), except as required by applicable law.
When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under, but not limited to, the heading “Item 1A. Risk Factors” included in this Quarterly Report, the Quarterly Report on Form 10-Q for the quarters ended June 30, 2026 and March 31, 2026, and in the Annual Report of Nutex Health Inc. on Form 10-K for the year ended December 31, 2025 and other filings of the Company with the United States Securities and Exchange Commission.
Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (In thousands, except share and per share amounts) | September 30, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash and short-term investments | ||||||||||||||
| Accounts receivable | ||||||||||||||
| Accounts receivable - related parties | ||||||||||||||
| Inventories | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
Property and equipment, net (accumulated depreciation of | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Financing lease right-of-use assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill, net | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities and Equity | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accounts payable - related parties | ||||||||||||||
| Lines of credit | ||||||||||||||
| Current portion of long-term debt | ||||||||||||||
| Operating lease liabilities, current portion | ||||||||||||||
| Financing lease liabilities, current portion | ||||||||||||||
| Accrued arbitration expenses | ||||||||||||||
| Accrued income tax expense | ||||||||||||||
| Accrued stock-based compensation | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt, net | ||||||||||||||
| Non-current operating lease liabilities, net | ||||||||||||||
| Non-current financing lease liabilities, net | ||||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
Commitments and contingencies (Note 10) | ||||||||||||||
| Equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Nutex Health Inc. equity | ||||||||||||||
| Noncontrolling interests | ||||||||||||||
| Total equity | ||||||||||||||
| Total liabilities and equity | $ | $ | ||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
4
Table of Contents
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (In thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | ||||||||||||||||||||||
| Population health management division | ||||||||||||||||||||||||||
| Total revenue | ||||||||||||||||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||||||||
| Payroll | ||||||||||||||||||||||||||
| Contract services | ||||||||||||||||||||||||||
| Medical supplies | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total operating costs and expenses | ||||||||||||||||||||||||||
| Gross profit | ||||||||||||||||||||||||||
| Corporate and other costs: | ||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||
| General and administrative expenses | ||||||||||||||||||||||||||
| Total corporate and other costs | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Other (income) expense | ( | ( | ||||||||||||||||||||||||
| Income before taxes | ||||||||||||||||||||||||||
| Income tax expense | ||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||
| Less: net income attributable to noncontrolling interests | ||||||||||||||||||||||||||
| Net income attributable to Nutex Health Inc. | $ | $ | $ | $ | ||||||||||||||||||||||
| Earnings per common share: | ||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
5
Table of Contents
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED)
| Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Noncontrolling Interests | Total Equity | |||||||||||||||||||||||||||||||
| (In thousands, except share data) | Shares | Amount | |||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for ESPP | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for ESPP | — | — | — | ||||||||||||||||||||||||||||||||
| Asset acquisition noncontrolling interest | — | — | — | — | |||||||||||||||||||||||||||||||
| Debt conversion to common stock | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | |||||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Contributions | — | — | — | ||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ( | |||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for ESPP | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued for acquisition | — | — | — | ||||||||||||||||||||||||||||||||
| Asset acquisition noncontrolling interest | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | |||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common stock issued for ESPP | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Stock repurchases and retirements | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Contributions | — | — | — | ||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Warrant exercises | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued for ESPP | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Stock repurchases and retirements | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Contributions | — | — | — | ||||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Warrant exercises | — | — | — | ||||||||||||||||||||||||||||||||
| Common stock issued for ESPP | — | — | — | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
| Vesting of Restricted Stock Units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Contributions | — | — | — | — | |||||||||||||||||||||||||||||||
| Distributions | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
6
Table of Contents
NUTEX HEALTH INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Nine Months Ended September 30, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustment to reconcile net income to net cash from operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Stock-based compensation expense | ||||||||||||||
| Changes to deferred taxes | ||||||||||||||
| Debt accretion expense | ||||||||||||||
| Non-cash effect of change in estimate | ( | |||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| (Increase)/Decrease in Accounts receivable | ( | ( | ||||||||||||
| (Increase)/Decrease in Accounts receivable - related party | ( | |||||||||||||
| (Increase)/Decrease in Inventories | ( | ( | ||||||||||||
| (Increase)/Decrease in Income tax receivable | ( | |||||||||||||
| (Increase)/Decrease in Prepaid expenses and other current assets | ( | |||||||||||||
| (Increase)/Decrease in Operating right-of-use assets | ||||||||||||||
| Increase/(Decrease) in Accounts payable | ( | |||||||||||||
| Increase/(Decrease) in Accounts payable - related party | ||||||||||||||
| Increase/(Decrease) in Operating lease liabilities | ( | ( | ||||||||||||
| Increase/(Decrease) in Accrued arbitration expenses | ||||||||||||||
| Increase/(Decrease) in Accrued income tax expense | ( | |||||||||||||
| Increase/(Decrease) in Accrued expenses and other current liabilities | ||||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Acquisitions of property and equipment | ( | ( | ||||||||||||
| Proceeds from restricted short-term investment | ||||||||||||||
| Cash related to asset acquisition | ( | |||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
7
Table of Contents
| Nine Months Ended September 30, | ||||||||||||||
| (In thousands) | 2026 | 2025 | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Proceeds from lines of credit | ||||||||||||||
| Proceeds from notes payable | ||||||||||||||
| Repayments of lines of credit | ( | ( | ||||||||||||
| Repayments of notes payable | ( | ( | ||||||||||||
| Repayments of finance leases | ( | ( | ||||||||||||
| Proceeds from exercise of warrants | ||||||||||||||
| Cash related to stock repurchases and retirements | ( | |||||||||||||
| Members' contributions | ||||||||||||||
| Members' distributions | ( | ( | ||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||
| Net change in cash, cash equivalents, and restricted cash | ||||||||||||||
| Cash and cash equivalents - beginning of the period | ||||||||||||||
| Restricted cash and short-term investment - beginning of period | ||||||||||||||
| Cash and cash equivalents and restricted cash and short-term investment - beginning of period | ||||||||||||||
| Cash and cash equivalents - end of period | ||||||||||||||
| Restricted cash and short-term investment - end of period | ||||||||||||||
| Cash and cash equivalents and restricted cash and short-term investment - end of period | $ | $ | ||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
8
Table of Contents
NUTEX HEALTH INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 – Organization and Operations
Nutex Health Inc. (“Nutex Health” or the “Company”), is a physician-led, healthcare services and operations company with 28 hospital facilities in 12 states (hospital division), and a primary care-centric, risk-bearing population health management division. The Company's hospital division implements and operates different innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments. The population health management division owns and operates provider networks such as independent physician associations (“IPAs”).
The Company employs approximately 1,093 full-time employees, contracts over 280 doctors at our facilities and partners with over 3,600 physicians within our networks as of September 30, 2026. The Company's corporate headquarters is based in Houston, Texas and we were incorporated on April 13, 2000 in the state of Delaware.
Merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc. On April 1, 2022, Nutex Health Holdco LLC merged with Clinigence Holdings, Inc. (“Clinigence”), a publicly traded Delaware corporation, which was renamed Nutex Health Inc. after the merger (the “Merger”). Immediately prior to the Merger, holders of 84 % of the aggregate equity interests in subsidiaries and affiliates of Nutex Health Holdco LLC contributed these ownership interests to Nutex Health Holdco LLC in exchange for Nutex Health Holdco LLC equity interests (“Contribution Agreements”). Immediately thereafter, in the Merger, each unit representing an equity interest in Nutex Health Holdco LLC was converted into the right to receive shares of common stock of Clinigence (n/k/a Nutex Health Inc.). Refer to Note 11 – Stock-based Compensation for discussion of additional issuances of stock for Under Construction Hospitals, an obligation within the Contribution Agreements. The Merger was accounted for as a reverse business combination under U.S. GAAP, and Nutex Health Holdco LLC was treated as the accounting acquirer in the Merger. After completing the merger, Clinigence was renamed Nutex Health Inc.
Note 2 - Summary of Significant Accounting Policies
Basis of presentation. These unaudited condensed consolidated financial statements present the Company’s consolidated financial condition and results of operations including those of majority-owned subsidiaries and variable interest entities (“VIEs”) for which the Company is the primary beneficiary.
The hospital division includes the Company’s hospital entities. In addition, the Company has financial and operating relationships with multiple professional entities (the “Physician LLCs”) and real estate entities, which are a part of the real estate division.
The Physician LLCs employ the physicians who provide services at the Company’s hospitals. These Physician LLCs are consolidated by the Company as VIEs because they do not have sufficient equity at risk to finance their activities independently. The Company is considered the primary beneficiary of these entities because (i) it has the power to direct the activities that most significantly affect their economic performance through its contractual and operational oversight, and (ii) it has the obligation to absorb losses and the right to receive benefits that could be significant, as evidenced by the Company’s historical practice of providing financial support during periods of cash shortfall and receiving the benefit of services. While the Company does not hold any direct equity ownership in the Physician LLCs, it is deemed to have an indirect economic interest through its contractual relationships with intermediary entities such as ER LLCs, which provide operational and functional support to the VIEs. As a result, 100 % of the equity in these VIEs is reflected as noncontrolling interest in the Company’s unaudited condensed consolidated balance sheets and statements of operations. Certain of the Physician LLCs are owned in part and, in some cases, controlled by related parties, including members of the Company’s executive management team.
The real estate division comprises of real estate entities and the activities related to the development and construction of hospital facilities. The real estate entities own the land and buildings used by the Company’s hospital entities and lease these facilities to hospital entities. The real estate entities also include the Company's headquarters. These entities have mortgage loans payable to third parties which are collateralized by the land and buildings. The Company consolidates two real estate entities as VIEs (the "Real Estate VIEs") as the Company’s hospital entities are guarantors or co-borrowers under the related mortgage loans. The Company is considered the primary beneficiary because it has the power to direct the entities’ most significant activities and has the obligation to absorb losses and the right to receive benefits that could be significant to the Real Estate VIEs. As a result, 100% of the equity in the Real Estate VIEs is reflected as noncontrolling interest in the Company’s unaudited condensed consolidated balance sheets and statements of operations. The Real Estate VIEs in some cases are controlled by related parties, including members of the Company’s executive management team.
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The population health management division includes our management services organization. Additionally, Atlas Healthcare Physicians ("Atlas", formerly known as "Associated Hispanic Physicians of So. California"), an independent physician association (“IPA”) entity not owned by the Company, is consolidated as a VIE of the Company’s wholly-owned subsidiary AHP Health Management Services (“AHP”). AHP is deemed the primary beneficiary of Atlas because it has the power to direct the significant activities of Atlas through a comprehensive management services agreement and has the right to receive substantially all of the economic benefits from its operations.
All significant intercompany balances and transactions have been eliminated in consolidation.
Interim financial statements. These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). The unaudited condensed consolidated financial statements include all material adjustments of a normal recurring nature that, in the opinion of management, are necessary for a fair presentation of the results of operations for the interim periods presented. These interim financial statements should be read together with the consolidated financial statements and notes thereto included in our audited financial statements for the year ended December 31, 2025.
Use of estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include (i) estimates of net revenue and accounts receivable, (ii) fair value of acquired assets and liabilities in business combinations, (iii) impairment of long-lived assets and goodwill, (iv) estimate of valuation allowance against deferred taxes and (v) fair value of non-employee stock-based compensation. Management's estimates also include the effects of the June 30, 2026 amendment to the Payment Dispute Resolution Services Agreement, as defined in Note 3 — Revenue, with HaloMD and the related federal independent dispute resolution ("IDR") fee changes, which were accounted for as a prospective change in estimate affecting contract services expense, accrued arbitration expenses and accounts payable. Actual results could differ from those estimates.
The following table provides a reconciliation of cash and cash equivalents and restricted cash and short-term investment balances to the total amounts shown within the unaudited condensed consolidated statements of cash flows for the end of the periods (in thousands):
| September 30, 2026 | September 30, 2025 | |||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash and short-term investments | ||||||||||||||
| Restricted cash | ||||||||||||||
| Restricted short-term investments | ||||||||||||||
| Cash, cash equivalents and restricted cash and short-term investment | $ | $ | ||||||||||||
Segment reporting. A public company is required to report descriptive information about its reportable operating segments. Operating segments, as defined, are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Aggregation of similar operating segments into a single reportable operating segment is permitted if the businesses have similar economic characteristics and meet established criteria. The Company operates three reportable segments – the hospital division, the population health management division and the real estate division. The real estate division is comprised of real estate entities
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along with activity related to the development and construction of hospital facilities. Refer to Note 16 – Segment Information for information on the Company’s segments.
Reclassifications. During the three months ended March 31, 2026, the Company identified an immaterial revision in the purchase price allocation for a real estate asset acquisition completed on December 15, 2025. The original allocation overstated the amount assigned to building and understated the amounts assigned to land. The Company has revised the comparative prior‑period financial statements, specifically Note 5 – Property and Equipment, net, presented herein. The revisions resulted in reclassifications within property and equipment in the consolidated balance sheet as of December 31, 2025. The impact of this revision was not material to any previously issued financial statements.
Recent accounting pronouncements – issued, not yet adopted
In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03 – Income Statement – Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. The Company is currently evaluating the impact of this update.
Note 3 – Revenue
The Company disaggregates revenue from contracts with customers into types of services or products, consistent with the Company's reportable segments, as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Hospital division revenue | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division revenue | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Hospital division revenue. We receive payment for facility services rendered by us from federal agencies, private insurance carriers, and patients. The Physician LLCs receive payment for doctor services from these same sources. On average, greater than 99 % of our net patient service revenue is paid by insurers and other non-patient third parties. The remaining revenue is paid by our patients in the form of copays, deductibles and self-payment. We generally operate as an out-of-network provider and, as such, do not have negotiated reimbursement rates with insurance companies.
The following tables present the allocation of the estimated transaction price with the patient among the primary patient classification of insurance coverage:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Insurance | % | % | % | % | ||||||||||||||||||||||
| Self-pay | % | % | % | % | ||||||||||||||||||||||
| Workers' compensation | % | % | % | % | ||||||||||||||||||||||
| Medicare/Medicaid | % | % | % | % | ||||||||||||||||||||||
| Total | % | % | % | % | ||||||||||||||||||||||
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The No Surprises Act (“NSA”) is a federal law that took effect January 1, 2022, to protect consumers from most instances of “surprise” balance billing. With respect to the Company, the NSA limits the amount an insured patient will pay for emergency services furnished by an out-of-network provider. The NSA addresses the payment of these out-of-network providers by group health plans or health insurance issuers (collectively, “insurers”). In particular, the NSA requires insurers to reimburse out-of-network providers at a statutorily calculated “out-of-network rate.” In states without an all-payor model agreement or specified state law, the out-of-network rate is either the amount agreed to by the insurer and the out-of-network provider or an amount determined through an IDR process.
Under the NSA, insurers must issue an initial payment or notice of denial of payment to a provider within thirty days after the provider submits a bill for an out-of-network service. If the provider disagrees with the insurer’s determination, the provider may initiate a thirty-business day period of open negotiation with the insurer over the claim. If the parties cannot resolve the dispute through negotiation, the parties may then proceed to the IDR process.
Effective May 1, 2024, we engaged with a third-party IDR vendor, HaloMD, to further support all our out of network claims and determine which claims would be beneficial to arbitrate (see Management's Arbitration process discussion under Part I. Item 2). The IDR process can take up to three to five months to receive payments. To facilitate the dispute arbitration process, the Company incurred fees payable to the Centers for Medicare and Medicaid Services (“CMS”), the organizations that arbitrate the payment amount between the plan and providers known as independent dispute resolution entities (“IDRE”), and commission and fees to the third-party IDR vendor. IDRE fee payments represent refundable payments if arbitrations are successful. Therefore, these payments are reported as prepaid and other current assets in the unaudited condensed consolidated balance sheets. The unsuccessful portion of the IDRE fee payments is written off to contract services expense in the unaudited condensed consolidated statements of operations. Prepaid expenses related to IDRE fees were $7.8 million and $20.9 million as of September 30, 2026 and December 31, 2025, respectively. Accounts payable to the third-party IDR vendor was zero and $37.7 million as of September 30, 2026 and December 31, 2025, respectively. Total accrued arbitration expenses were $51.3 million and $49.7 million as of September 30, 2026 and December 31, 2025, respectively.
HaloMD contract amendment, CMS fee reduction and resulting change in estimate. Effective June 30, 2026, the Company amended its Payment Dispute Resolution Services Agreement with HaloMD, L.L.C. (the “Agreement”), dated as of May 1, 2024, which supports the Company’s IDR process for certain out-of-network claims. Among other changes, the amendment transitioned the applicable fee payment structure to a pay-on-collected basis, rather than payment due upon award determination, retroactive to the effective date of the original Agreement, and amended the service fee structure applicable to various federal and state net settlement amounts obtained on or after July 1, 2026. Pursuant to the Agreement, the Company may perform dispute resolution services in-house or through the engagement of another third-party vendor or service provider with respect to certain future facilities. In addition, on June 4, 2026, CMS and other federal agencies reduced the non-refundable administrative fee for the federal IDR process from $115 to $15 per party per dispute, effective June 11, 2026. The Company accounted for these impacts as a change in estimate in accordance with ASC 250 and recognized the effects prospectively in the period of change and future periods. The effect of these changes for the three and nine months ended September 30, 2026 is reflected as a reduction to contract services expense of zero and $52.3 million, respectively, in the unaudited condensed consolidated statements of operations. Additionally, as of June 30, 2026, this amount resulted in a corresponding reduction to accounts payable and a reduction to accrued arbitration expenses in the unaudited condensed consolidated balance sheets. This change increased net income and net income attributable to Nutex Health Inc. by zero and $25.0 million for the three and nine months ended September 30, 2026, respectively. Net income attributable to noncontrolling interest increased by zero and $18.0 million for the three and nine months ended September 30, 2026, respectively. From a per-basic and per-diluted share basis, there was no 4.96 and $4.83 , respectively, for the nine months ended September 30, 2026.
Note 4 - Acquisitions
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Note 5 - Property and Equipment, net
The principal categories of property and equipment, net are summarized as follows (in thousands):
| Useful Life (years) | September 30, | December 31, | |||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Buildings and improvements | $ | $ | |||||||||||||||
| Land | — | ||||||||||||||||
| Leasehold improvements | |||||||||||||||||
| Construction in progress | — | ||||||||||||||||
| Medical equipment | |||||||||||||||||
| Office furniture and equipment | |||||||||||||||||
| Computer hardware and software | |||||||||||||||||
| Vehicles | |||||||||||||||||
| Signage | |||||||||||||||||
| Total cost | |||||||||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||||||||
| Total property and equipment, net | $ | $ | |||||||||||||||
We consolidate two Real Estate VIEs. Refer to Note 18 – Variable Interest Entities.
Depreciation and amortization of property and equipment for the three months ended September 30, 2026 and 2025 totaled $1.9 million and $1.7 million, respectively, and for the nine months ended September 30, 2026 and 2025 totaled $5.5 million and $5.1 million, respectively.
Note 6 – Intangible Assets and Goodwill
Intangible Assets. The following tables provide detail of the Company’s intangible assets (in thousands):
| As of September 30, 2026 | Weighted Average Useful Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||
| Amortizing intangible assets: | ||||||||||||||||||||||||||
| Member relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Trademarks | ( | |||||||||||||||||||||||||
| Total amortizing intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
| Indefinite-lived intangible asset - Certificate of Need | — | |||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||||||||
| Amortizing intangible assets: | ||||||||||||||||||||||||||
| Member relationships | $ | $ | ( | $ | ||||||||||||||||||||||
| Trademarks | ( | |||||||||||||||||||||||||
| Total amortizing intangible assets | $ | ( | $ | |||||||||||||||||||||||
| Indefinite-lived intangible asset - Certificate of Need | — | |||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
Amortization of intangible assets for the three months ended September 30, 2026 and 2025 totaled $0.4 million and $0.3 million, respectively, and for the nine months ended September 30, 2026 and 2025 totaled $1.0 As of
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September 30, 2026, expected amortization of intangible assets for each of the five succeeding fiscal years and thereafter is as follows (in thousands):
| Year ended December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total amortizing intangible assets | $ | |||||||
There have been no significant changes to goodwill from what was disclosed in Note 6 to the financial statements presented in the 2025 Form 10-K.
Note 7 – Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
| September 30, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Accrued wages and benefits | $ | $ | |||||||||
| Accrued supplier expenses | |||||||||||
| Accrued medical claims | |||||||||||
| Accrued taxes other than income tax | |||||||||||
| Accrued other | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
Note 8 – Debt
The Company’s outstanding debt is shown in the following table (dollars in thousands):
| Maturity Dates | Interest Rates | September 30, | December 31, | ||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Term loans secured by all assets | 12/2026 - 4/2031 | $ | $ | ||||||||||||||||||||
| Term loans secured by property and equipment | 03/2027 - 10/2031 | ||||||||||||||||||||||
| Line of credit secured by all assets | 09/2028 | ||||||||||||||||||||||
| Term loans of Real Estate VIEs | 05/2028 - 03/2037 | ||||||||||||||||||||||
| Seller note | 09/2035 | ||||||||||||||||||||||
| Deferred payment | 09/2035 | ||||||||||||||||||||||
| Total | |||||||||||||||||||||||
| Less: unamortized issuance costs and discount | |||||||||||||||||||||||
| Less: short-term lines of credit | |||||||||||||||||||||||
| Less: current portion of long-term debt | |||||||||||||||||||||||
| Total long-term debt | $ | $ | |||||||||||||||||||||
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Term loans and lines of credit. We have entered into private debt arrangements with banking institutions for the purchase of equipment and to provide working capital and liquidity through cash and lines of credit. Unless otherwise delineated above, these debt arrangements are obligations of Nutex and/or its wholly-owned subsidiaries. Consolidated real estate entities have entered into private debt arrangements with banking institutions for purposes of purchasing land, constructing new emergency room 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 VIEs for the periods shown.
Certain outstanding debt arrangements require minimum debt service coverage ratios and other financial covenants. At September 30, 2026, we were in compliance with these debt arrangements; we had remaining availability of $6.8 million under outstanding lines of credit. On June 30, 2026, we were issued an irrevocable standby letter of credit in the amount of $1.7 million to support certain lease obligations. In August 2026, we were issued another standby letter of credit in the amount of $1.7 million to support certain lease obligations. As of September 30, 2026, no amounts had been drawn under either letter of credit, and no liability has been recorded for the undrawn amount. During the nine months ended September 30, 2026, the Company reclassified $3.4 million from cash and cash equivalents to restricted cash and short-term investments to account for certificates of deposit required under the terms of the contractual agreement.
Note 9 – Leases
As Lessee
We have entered into hospital property, office and equipment rental agreements with various lessors including related parties. The following tables disclose information about our leases of property and equipment (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||
| Amortization of right-of-use assets | $ | $ | $ | $ | |||||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||||||||
| Total finance lease cost | $ | $ | $ | $ | |||||||||||||||||||
As Lessor
We lease space to tenants under operating leases in an office building purchased in December 2025. The leases provide for the payment of fixed base rents payable monthly. For the three and nine months ended September 30, 2026, lease income was $0.3 million and $1.0 million, respectively, and was included in Hospital division revenue in the unaudited condensed consolidated statements of operations.
Note 10 – Commitments and Contingencies
Litigation. The Company, its consolidated subsidiaries or VIEs may be named in various claims and legal actions in the normal course of business and the matters listed under Part II, Item 1, Legal Proceedings. The outcome of these matters is currently not considered probable or reasonably estimable; accordingly, no provision or accrual has been recorded. Based upon counsel and management’s opinion, the ultimate resolution of such matters is not expected to have a material adverse effect on the unaudited condensed consolidated financial statements, except as stated in Part II, Item 1, Legal Proceedings.
Note 11 – Stock-based Compensation
Total stock-based compensation for the three months ended September 30, 2026 and 2025 was $7.4 million and $13.2 million, respectively, and for the nine months ended September 30, 2026 and 2025 was $6.4 million and $119.6 million, respectively. Stock-based compensation expense includes amounts recognized primarily for non-employee arrangements for the obligations for
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under-construction and ramping hospitals, as well as amounts granted to employees and board members for services rendered. The decreased balance for the three and nine months ended September 30, 2026 is due to the decrease of accrued stock-based compensation related to the obligations for under-construction and ramping hospitals. There have been no significant changes to options from those disclosed in Note 12 to the 2025 Form 10-K.
Obligations for under-construction and ramping hospitals. Under the terms of the Contribution Agreements, former doctor owners of the Ramping and Under Construction Hospitals (as determined on April 1, 2022) are eligible to receive a one-time additional issuance of Company common stock.
•With respect to ramping hospitals that were acquired before the Merger, 24 months after the opening date (the “Determination Date”) of the applicable ramping hospital, such owner is eligible to receive such owner’s pro rata share of a number of shares of Company common stock equal to (i) the trailing twelve months earnings before interest, taxes, depreciation and amortization on the respective Determination Date, multiplied by (ii) 10 , (iii) minus the initial equity value received at the closing of the Merger, and (iv) minus such owner’s pro rata share of the aggregate debt of the applicable ramping hospital outstanding as of the closing of the Merger. The number of additional shares to be issued will be determined based on the greater of (a) the price of the Company’s common stock at the time of determination or (b) $420.00 , as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to the Company’s common stock.
•With respect to under construction hospitals that were acquired before the Merger, contributing owners of under construction hospitals will be eligible to receive, on the Determination Date, such owner’s pro rata share of a number of shares of Company common stock equal to (a)(i) the trailing twelve months earnings before interest, taxes, depreciation and amortization as of the Determination Date multiplied by (ii) 10 , minus (iii) the aggregate amount of such owner’s capital contribution to the under construction hospital, minus (iv) such owner’s pro rata share of the aggregate debt of the applicable under construction hospital outstanding as of the closing of the Merger, divided by (b) the greater of (i) the price of the Company common stock at the time of determination or (ii) $420.00 , as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to the Company’s common stock.
Ramping Hospitals are hospitals that at the time of the Merger had less than two years of operating results and as such were not considered mature hospitals. Under Construction Hospitals are hospitals that at the time of the Merger had not started accepting patients and as such did not have any operating results to serve as a basis for a valuation. At the time of the Merger, the parties agreed to additional issuances of common stock once these Ramping and Under Construction Hospitals had operated for at least 24 months, with the valuation to be based on trailing twelve months operating results determined at the end of such 24-month period (“Measurement Period”).
Pursuant to the Merger Agreement, and based on a valuation of $420.00 per share of Clinigence common stock, each member interest in Nutex Holdco issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive 0.23809523833 shares of Clinigence common stock.
With respect to the Under Construction Hospitals, the aggregate number of shares of Clinigence common stock issued in the Merger to such former doctor owners was equal to the aggregate capital contribution amounts received from the contributing former doctor owners of the Under Construction Hospitals divided by $420.00 . In addition, Nutex Health assumed all the debt of such Under Construction Hospitals outstanding at the closing of the Merger.
Under the Contribution Agreements, the Ramping and Under Construction Hospitals are entitled to additional shares of Company Common Stock. The number of additional shares depends on two main factors: the trailing twelve-month operating results of the particular hospital and the trading price of Nutex Health common stock, with both factors determined at the end of the applicable Measurement Period. There is no threshold of certain operating results to be achieved; however, there is a floor price of common stock to be applied to the calculation. The exact amount a former doctor owner of a particular hospital will receive will accordingly depend on (i) the trailing twelve months of operating results of that particular hospital, minus the initial capital contribution and debt assumption, (ii) the current Nutex common stock trading price, and (iii) the ownership percentage in the hospital such former doctor owner held prior to the Contribution Transaction and the Merger.
At the closing of the Merger, four hospitals were identified as Ramping Hospitals and 17 hospitals were identified as Under Construction Hospitals. Related to the four Ramping Hospitals, no additional issuances of common stock were made due to operating results for three Ramping Hospitals and the closure of one Ramping Hospital in February 2023. Of the 17 Under Construction Hospitals,
•Eight hospitals with Measurement Periods ended on or before September 30, 2026.
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•Four hospitals with no Measurement Period as these hospitals' development plans have been abandoned.
•Two hospitals with Measurement Periods that end after September 30, 2026.
•Three hospitals with no defined Measurement Periods as these hospitals have not opened as of September 30, 2026.
In the tables below, we show the number of shares issuable, the number of shares issued to date, and compensation expense recognized with respect to hospitals with Measurement Periods that ended prior to the end of September 30, 2026.
Measurement Periods ending on or prior to September 30, 2026 (dollars in thousands):
| Number of Hospitals | End of Measurement Period | Number of Shares Issuable | Number of Shares Issued to Date | Inception-to-date Compensation Expense | Year-to-date 2026 Compensation Expense | |||||||||||||||||||||||||||
| 1 | February 28, 2023 | $ | $ | |||||||||||||||||||||||||||||
| 2 | February 29, 2024 | |||||||||||||||||||||||||||||||
| 1 | February 28, 2025 | |||||||||||||||||||||||||||||||
| 2 | June 30, 2025 | |||||||||||||||||||||||||||||||
| 1 | August 31, 2025 | |||||||||||||||||||||||||||||||
| 1 | March 31, 2026 | ( | ||||||||||||||||||||||||||||||
| 8 | $ | $ | ( | |||||||||||||||||||||||||||||
In the table below, we show the estimated number of shares issuable to two hospitals with Measurement Periods that end after September 30, 2026 and are operating, but showing a pro forma calculation as if the respective Measurement Periods had ended on September 30, 2026. Since we cannot predict the future operating results of a particular hospital or the Nutex Health trading price at the end of such particular Measurement Period, the actual number of shares issuable to the former doctor owners of such Hospital cannot be determined.
Measurement Periods ending after September 30, 2026 (dollars in thousands):
| Number of Hospitals | End of Measurement Period | Estimated Number of Shares Issuable | Estimated Compensation Expense | Inception-to-date Compensation Expense | Year-to-date 2026 Compensation Expense | |||||||||||||||||||||||||||
| 1 | November 30, 2026 | $ | ( | |||||||||||||||||||||||||||||
| 1 | December 31, 2026 | |||||||||||||||||||||||||||||||
| 2 | $ | $ | $ | |||||||||||||||||||||||||||||
The Company measures these obligations as liability-classified stock-based compensation at fair value (level 3) on each reporting date until settlement, with changes in fair value recognized in the consolidated statement of operations. The fair value of these awards is determined using Monte Carlo simulation, which incorporates inputs such as expected term, volatility, risk-free interest rate, dividend yield and the probability of achieving performance conditions. At September 30, 2026, the aggregate liability recorded for these obligations was $11.5 million as compared to $8.3 million at December 31, 2025. The change in fair value recognized in the consolidated statements of operations for three months ended September 30, 2026 and 2025 was $6.7 million and $13.2 million, respectively, and for the nine months ended September 30, 2026 and 2025 totaled $4.5 million and $119.6 million.
Restricted Stock Units. The following is an inception-to-date summary of the restricted stock units (RSUs) granted to certain employees and board members participating in the Company's long-term incentive program (shares and dollars in thousands):
| Grant Date | RSUs Granted | Grant Date Fair Value | RSUs Vested | RSUs Forfeited | RSUs Unvested | Future Vesting Dates | ||||||||||||||||||||||||||||||||
| June 16, 2024 | $ | March 2027 | ||||||||||||||||||||||||||||||||||||
| March 10, 2025 | March 2027 and 2028 | |||||||||||||||||||||||||||||||||||||
| July 14, 2025 | ||||||||||||||||||||||||||||||||||||||
| March 2, 2026 | March 2027, 2028, 2029 | |||||||||||||||||||||||||||||||||||||
| April 23, 2026 | April 2027 | |||||||||||||||||||||||||||||||||||||
| Total | $ | |||||||||||||||||||||||||||||||||||||
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The following table summarizes activity in restricted stock units:
| Shares (in thousands) | Weighted Average Grant-Date Fair Value Per Share | ||||||||||
| Non-vested awards, December 31, 2024 | $ | ||||||||||
| Granted | |||||||||||
| Forfeitures | ( | ||||||||||
| Vested | ( | ||||||||||
| Non-vested awards, September 30, 2025 | $ | ||||||||||
| Non-vested awards, December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Forfeitures | ( | ||||||||||
| Vested | ( | ||||||||||
| Non-vested awards, September 30, 2026 | $ | ||||||||||
As of September 30, 2026 and 2025, we estimate $4.5 million and $2.4 million, respectively, of unrecognized compensation cost related to restricted stock units issued to our employees to be recognized over the weighted-average vesting period of 1.5 years and 1.6 years, respectively.
Employee Stock Purchase Plan. In May 2023, the Board adopted the 2023 Employee Stock Purchase Plan (“2023 ESPP”), which was subsequently approved by the Company’s stockholders and became effective in June 2023. The 2023 ESPP authorizes the initial issuance of up to 33,333 shares of the Company’s common stock to eligible employees, who are entitled to purchase shares of common stock equal to 85 % of the closing price on the purchase date with accumulated payroll deductions. During the three months ended September 30, 2026 and 2025, the Company issued 943 shares and 351 shares, respectively, and for the nine months ended September 30, 2026 and 2025 issued 3,452 shares and 2,378 shares, respectively.
Note 12 – Equity
Share Repurchases and Retirements.
Activity related to the repurchase and retirement of shares is as follows:
| Repurchase and retirement description | Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | ||||||||||||
| Shares repurchased under the August 2025 Repurchase Program | ||||||||||||||
| Shares repurchased under the March 2026 Repurchase Program | ||||||||||||||
| Shares retired under the Settlement Agreements with former doctor owners of under construction hospitals | ||||||||||||||
| Total shares repurchased and retired | ||||||||||||||
August 2025 Repurchase Program. On August 14, 2025, the Board authorized a stock repurchase program (the “August 2025 Repurchase Program”) of up to $25.0 million of the Company’s common stock over the subsequent six months. No repurchases for this program occurred during the three months ended September 30, 2026. During the nine months ended September 30, 2026, the Company repurchased 118,867 shares of common stock under the August 2025 Repurchase Program in open market transactions at a weighted-average price of $168.65 , for an aggregate price of $20.0 million, inclusive of transaction costs. The repurchases completed the August 2025 Repurchase Program.
March 2026 Repurchase Program. On March 4, 2026, the Board authorized a second stock repurchase program (the “March 2026 Repurchase Program”) of up to $25.0 million of the Company’s common stock over the subsequent six months. Pursuant to the March 2026 Repurchase Program, the Company may repurchase, from time to time, up to an aggregate of $25.0 million of its outstanding shares of common stock, exclusive of any fees, commissions or other expenses related to such repurchases. The March 2026 Repurchase Program permits the Company to repurchase shares of common stock at any time or from time to time at
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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. The March 2026 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.
Settlement Agreements with certain Former Doctor Owners of Under Construction Hospitals. During the three and nine months ended September 30, 2026, the Company entered into agreements with certain former doctor owners to settle existing disputes and, in connection with the settlements, retire a portion of the shares issuable to satisfy obligations for under-construction and ramping hospitals. See Note 11 – Stock-based Compensation for discussion of additional issuances of stock for Under Construction Hospitals, an obligation within the Contribution Agreements. During the three and nine months ended September 30, 2026, the Company retired zero and 147,352 shares of common stock, respectively, at an aggregate value of zero and $25.3 million, respectively.
Common Stock Warrants. Warrant activity is as follows:
| Warrants Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (years) | |||||||||||||||
| Warrants outstanding at December 31, 2024 | $ | ||||||||||||||||
| Warrants issued | |||||||||||||||||
| Warrants exercised | |||||||||||||||||
| Warrants expired | ( | ||||||||||||||||
| Warrants outstanding at September 30, 2025 | $ | ||||||||||||||||
| Warrants outstanding at December 31, 2025 | $ | ||||||||||||||||
| Warrants issued | |||||||||||||||||
| Warrants exercised | ( | ||||||||||||||||
| Warrants expired | ( | ||||||||||||||||
| Warrants outstanding at September 30, 2026 | $ | ||||||||||||||||
Warrants outstanding as of September 30, 2026 consisted of:
| Expiration Date | Number Outstanding | Number Exercisable | Exercise Price | |||||||||||||||||
| May 31, 2027 | ||||||||||||||||||||
| September 30, 2029 | ||||||||||||||||||||
| October 31, 2029 | ||||||||||||||||||||
| November 30, 2029 | ||||||||||||||||||||
| December 31, 2029 | ||||||||||||||||||||
| Total | ||||||||||||||||||||
Note 13 – Income Taxes
Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
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Our effective tax rate was 21.0 % and 21.9 % for the three months ended September 30, 2026 and 2025, respectively, and for the nine months ended September 30, 2026 and 2025 was 18.7 % and 25.2 %. The primary difference from the federal statutory rate of 21 % is related to state taxes, income of noncontrolling interests in flow-through entities and permanent differences for non-deductible expenses.
Note 14 – Earnings per Share
The following is the computation of earnings per basic and diluted share (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Basic and diluted earnings per share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income attributable to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares used to compute basic EPS | |||||||||||||||||||||||
| Basic earnings per share: | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Dilutive net income attributable to common stockholders | $ | $ | |||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares used to compute basic EPS | |||||||||||||||||||||||
| Dilutive effect of convertible note | |||||||||||||||||||||||
| Dilutive effect of common stock warrants | |||||||||||||||||||||||
| Dilutive effect of unvested restricted stock units | |||||||||||||||||||||||
| Dilutive effect of contingently issuable shares | |||||||||||||||||||||||
| Weighted average shares used to compute diluted EPS | |||||||||||||||||||||||
| Diluted earnings per share: | $ | $ | $ | $ | |||||||||||||||||||
Note 15 - Supplemental Cash Flows Information
The below supplemental cash flows information is presented in thousands:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash paid for interest on long-term debt | $ | $ | |||||||||
| Cash paid for interest on finance leases | |||||||||||
| Cash paid for operating leases | |||||||||||
| Cash paid for income taxes | |||||||||||
| Non-cash investing and financing activities: | |||||||||||
| Financed capital expenditures | |||||||||||
| Acquisition of financing leases | |||||||||||
| Debt converted to common stock | |||||||||||
| Common stock issued for Employee Stock Purchase Plan | |||||||||||
| Net reversal of financing lease due to acquisition of lessor | ( | ||||||||||
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Adjustments to reconcile net income to net cash from operating activities for the nine months ended September 30, 2026 include the non-cash effect of change in estimate of $52.3 million related to the HaloMD contract amendment and CMS fee reduction. See Note 3 — Revenue.
Note 16 – Segment Information
We report the results of our operations as three segments in our unaudited condensed consolidated financial statements: (i) the hospital division, (ii) the population health management division and (iii) the real estate division. Reportable segment information, including intercompany transactions, is presented below (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets: | |||||||||||
| Hospital division | $ | $ | |||||||||
| Population health management division | |||||||||||
| Real estate division | |||||||||||
| Total Assets | $ | $ | |||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue from external customers: | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
| Revenue from inter-segment activities: | |||||||||||||||||||||||
| Real estate division | $ | $ | $ | $ | |||||||||||||||||||
| Segment expenses: | |||||||||||||||||||||||
| Hospital division | |||||||||||||||||||||||
| Payroll | $ | $ | $ | $ | |||||||||||||||||||
| Contract services | |||||||||||||||||||||||
| Medical supplies | |||||||||||||||||||||||
| Other hospital division expenses | |||||||||||||||||||||||
| Hospital division expenses | |||||||||||||||||||||||
| Population health management division expenses | |||||||||||||||||||||||
| Total segment expenses | $ | $ | $ | $ | |||||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division | |||||||||||||||||||||||
| Real estate division | |||||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Segment gross profit (loss): | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division | ( | ||||||||||||||||||||||
| Real estate division | ( | ( | ( | ( | |||||||||||||||||||
| Total segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Consolidated operating income: | |||||||||||||||||||||||
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Total segment gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Corporate and other costs | ( | ( | ( | ( | |||||||||||||||||||
| Consolidated operating income | $ | $ | $ | $ | |||||||||||||||||||
| Segment income: | |||||||||||||||||||||||
| Hospital division | |||||||||||||||||||||||
| Hospital division gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
| Other expense | |||||||||||||||||||||||
| Hospital division income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
| Population health management division income before income taxes | ( | ||||||||||||||||||||||
| Real estate division loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Non-segment loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
| Capital expenditures: | |||||||||||||||||||||||
| Hospital division | $ | $ | $ | $ | |||||||||||||||||||
| Total capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
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Note 17 – Related Party Transactions
The Company enters into transactions with entities owned or controlled by related parties, including its CEO, as well as with noncontrolling interest owners of consolidated entities. These related party transactions primarily include physician services arrangements, facility leases, construction-related obligations, and distributable cash arrangements. The Company believes the terms of these transactions are generally comparable to those that would be obtained in arm's-length transactions.
Summary quantitative information related to related party balances and transactions is presented below (in millions):
Balances with related parties in the condensed consolidated balance sheets:
| September 30, | December 31, | |||||||||||||||||||
| Balance sheet caption | Related party description | 2026 | 2025 | |||||||||||||||||
| Accounts receivable - related party | Amounts due from noncontrolling interest owners of consolidated ER entities | $ | $ | |||||||||||||||||
| Accounts payable - related party | Reimbursement of expenses incurred on behalf of the Company | $ | $ | |||||||||||||||||
| Accounts payable - related party | Outstanding obligations of contributions for facilities under construction | $ | $ | |||||||||||||||||
Transactions with related parties in the condensed consolidated statements of operations and cash flows:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
| Type of transaction | Related party description | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||
| Lease payments - related party facilities (cash basis) | Cash payments under facility leases with real estate entities owned by related parties, including the CEO, and the corporate headquarters lease | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Distributable cash paid to CEO | CEO’s pro‑rata share (approximately | $ | $ | $ | $ | |||||||||||||||||||||||||||
Additional qualitative information:
•Physician LLCs: The physicians who work in the Company’s hospitals are employed by separate limited liability companies (“Physician LLCs”). The Company has no direct ownership interest in these entities; they are owned and, in some instances, controlled by related parties, including the CEO. The Physician LLCs are consolidated as variable interest entities because they do not have sufficient equity at risk and the Company has historically provided support in the event of cash shortages and is the primary beneficiary of their services.
•Real estate entities: Most hospital division facilities are leased from real estate entities owned by related parties. These leases are typically triple‑net, with the hospital division responsible for operating costs, repairs, and taxes. The Company consolidates certain real estate entities as variable interest entities when they do not have sufficient equity at risk and the Company’s hospital entities are guarantors or co‑borrowers under their mortgage loans. Real Estate VIEs with third‑party mortgage loans collateralized by land and buildings remain consolidated as of September 30, 2026; the Company has no direct ownership interest in two of these entities, which are owned and controlled by related parties including the CEO.
•Distributable cash arrangement with CEO: In connection with the closing of the Merger Agreement, the CEO, as an original owner, is entitled, for the first two years following closing and solely with respect to the two locations that repaid a specified short‑term loan, to receive his pro‑rata share (approximately 38 %) of aggregate distributable cash flow, as determined by the Company after satisfaction of debt and tax obligations. Total distributable cash paid under this arrangement is presented in the table above.
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Note 18 – Variable Interest Entities
The following tables provide the balance sheet amounts for consolidated VIEs (in thousands):
| September 30, 2026 | |||||||||||||||||||||||
| Real Estate VIEs | Physician LLCs | Facility Entity | IPAs | ||||||||||||||||||||
| Current assets | $ | $ | $ | $ | |||||||||||||||||||
| Property and equipment, net | |||||||||||||||||||||||
| Other long-term assets | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||
| Long-term liabilities | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
| Equity | ( | ||||||||||||||||||||||
| Total liabilities and equity | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Real Estate VIEs | Physician LLCs | Facility Entity | IPAs | ||||||||||||||||||||
| Current assets | $ | $ | $ | $ | |||||||||||||||||||
| Property and equipment, net | |||||||||||||||||||||||
| Other long-term assets | |||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||
| Current liabilities | |||||||||||||||||||||||
| Long-term liabilities | |||||||||||||||||||||||
| Total liabilities | |||||||||||||||||||||||
| Equity | |||||||||||||||||||||||
| Total liabilities and equity | $ | $ | $ | $ | |||||||||||||||||||
Note 19 - Subsequent Events
* * * * *
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Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
Overview
Nutex Health Inc. is a physician-led, healthcare services and operations company with 28 hospital facilities in 12 states (hospital division), and a primary care-centric, risk-bearing population health management division. Our hospital division implements and operates innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments. The population health management division owns and operates provider networks such as independent physician associations (“IPAs”).
As of September 30, 2026, we employed approximately 1,093 full-time employees, contracted with over 280 doctors at our facilities and partnered with over 3,600 physicians within our networks. Our corporate headquarters is based in Houston, Texas. We were incorporated on April 13, 2000 in the state of Delaware.
Our financial statements present the Company’s unaudited condensed consolidated financial condition and results of operations including those of majority-owned subsidiaries and variable interest entities (“VIEs”) for which we are the primary beneficiary.
The hospital division includes our hospital entities. In addition, we have financial and operating relationships with multiple professional entities (the “Physician LLCs”) and real estate entities part of the real estate division. The Physician LLCs employ the doctors who work in our hospitals. These entities are consolidated by the Company as VIEs because they do not have 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. While the Company does not hold any direct equity ownership in the Physician LLCs, it is deemed to have an indirect economic interest through its contractual relationships with intermediary entities. Certain of the Physician LLCs are owned in part and, in some cases, controlled by related parties, including members of the Company’s executive management team.
The real estate division comprises of real estate entities along with activity related to the development and construction of hospital facilities. The real estate entities own the land and hospital buildings which are leased to our hospital entities. The real estate entities also include the Company's headquarters. These entities have mortgage loans payable to third parties which are collateralized by the land and buildings. We consolidate certain real estate entities as VIEs (the "Real Estate VIEs") in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans. As of September 30, 2026, we continue to consolidate two Real Estate VIEs in our financial statements. The Real Estate VIEs are in part and, in some cases, controlled by related parties, including members of the Company’s executive management team.
The population health management division includes our management services organization. Additionally, 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.
Of the Company's billable visits, approximately 50-60% are submitted through the IDR process, with 40-50% of all billable visits resulting in an award determination. The difference is mainly due to claims rejected or withdrawn because of missing or incomplete information required to be provided by payors that is necessary to determine the plan’s eligibility for federal
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arbitration, claims not being filed timely, or coding and administrative errors. When an award determination is made, Nutex Health prevailed in over 80% of those determinations over the last nine months and collects, on average, over 80% of the award amounts as calculated on awards from inception through March of 2026.
The following tables present the allocation of the transaction price with the patient between the primary patient classification of insurance coverage:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Insurance | 97 | % | 97 | % | 97 | % | 97 | % | ||||||||||||||||||
| Self-pay | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||||||
| Workers' compensation | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||||||
| Medicare/Medicaid | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||||||||||
| Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||||||||
Recent Regulatory and IDR Related Developments.
IDR Operations Final Rule. The Federal IDR Operations final rule became effective August 3, 2026. Under this rule, the nonrefundable administrative fee drops from $115 to $15 per party per dispute for disputes initiated on or after June 11, 2026. Additionally, the rule updates batching limits and mandates registration in the new Federal IDR Registry.
Fifth Circuit Vacatur of Ghost Rates. On August 11, 2026, the Fifth Circuit, in an en banc decision, affirmed in part the U.S. District Court for the Eastern District of Texas which had previously vacated the rules that had required non-negotiated and artificially low “ghost rates” to be included in the qualifying payment amount (QPA) calculation. The District Court held that the rules unlawfully required the inclusion of ghost rates and the exclusion of bonus and incentive payments. Following the safe-harbor expiration effective October 1, 2026, payers may no longer include ghost rates or exclude incentive metrics. Violations would be subject to direct CMS enforcement.
CMS Audits. Two recent CMS audits document that CareSource, a non-profit, multi-state health insurance plan headquartered in Ohio, improperly substituted usual-and-customary rates for the required median in network rate and that Aetna (the administrator for the Ohio School Employees Retirement System) altered its data pool by excluding negotiated contract rates simply because no claims had been filed, indicating structural calculation errors. As required by law, federal IDR entities rely mainly on the QPA as calculated by insurers to determine fair payment. However, absent a CMS audit, there can be no assurance that QPAs are calculated as required by the NSA.
Dismissal of Insurer Lawsuits. Federal district courts in California, Florida, Georgia, Texas and Virginia dismissed insurer lawsuits in 2026, ruling that insurers cannot use secondary fraud or civil RICO claims to collaterally attack binding administrative IDR awards. Other cases remain pending, and all dismissals have been appealed.
Competing Proposed Congressional Legislation. The bipartisan No Surprises Act Enforcement Act, introduced in July 2025 by Rep. Greg Murphy and Sen. Roger Marshall, would keep arbitration and penalize payers that fail to pay within 30 days after an IDR payment determination at three times the difference between the initial payment and the IDR-determined rate, plus interest. Rep. Frank Pallone’s Lower Premiums, Faster Payments Act, introduced on October 8, 2026, would instead eliminate IDR entirely for services furnished on or after January 1, 2028. Instead, a recalculated QPA based solely on internal payer data would be implemented as the final, non-negotiable payment rate for a particular CPT code, specialty, and geographic region. The proposed Pallone bill would also require payment within 30 days, bar judicial review of the QPA methodology and mandate annual audits with public findings.
Arbitration process
Federal Rules Applicable to Out-of-Network Billing
Congress enacted the No Surprises Act effective January 1, 2022, to protect patients from surprise medical bills incurred when they receive emergency medical services from out-of-network healthcare providers, as well as non-emergency services at in-network facilities, and air ambulance services. The NSA achieves this by relieving patients from financial liability for surprise bills and creating an independent dispute resolution process for billing disputes between providers and insurers. The patient is not
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involved in this process, and payment is issued directly to the provider. The IDR process safeguards providers by promoting fair reimbursement from payors, helping ensure their continued ability to deliver care.
•Independent Dispute Resolution. Under the IDR provisions, Nutex Health and the insurer first must try to agree on a price for the services. If negotiations fail, either party has four business days to initiate IDR proceedings. If the parties pursue IDR, either the parties or the Department of Health and Human Services selects a Certified Independent Dispute Resolution Entity (“CIDRE”) to determine the final payment amount.
•Certified Independent Dispute Resolution Entity. The CIDRE has the sole discretion to determine both the eligibility of claims submitted for the IDR process, subject to federal and state regulations, and the amount the payor owes the provider.
•The CIDRE makes a threshold determination of IDR eligibility and sets the payment amount by choosing between the offers of each party; the provider and insurer each submit a final offer, and the CIDRE selects one party’s offer as the award after reviewing and evaluating all statutorily required information submitted by both parties.
•In deciding which offer to award, the CIDRE must consider several factors outlined in the law, only one of which is the qualifying payment amount (“QPA”), which is calculated by the insurer, subject to the statutory definition as the “median of the contracted rates recognized by the plan or issuer . . . for the same or a similar item or service” offered in the same insurance market and geographic area. The QPA calculation remains a significant source of regulatory and litigation uncertainty: in August 2026, the Fifth Circuit, sitting en banc in TMA III, affirmed vacatur of key portions of the 2021 QPA methodology relating to non-negotiated “ghost rates” and bonus and incentive payments, while allowing the agencies’ exclusion of one-off, single-case agreements from contracted rates. See Legal challenges to HHS Final Rule below. Among the other factors to be considered by the CIDRE are the complexity or acuity of the case, the doctor’s expertise, and the scope of services provided at the facility.
•Arbitration Awards Are Binding. In the absence of a fraudulent claim or evidence of a misrepresentation of facts to the CIDRE, the IDR award is binding upon the parties involved and payment of the award must be made not later than 30 days after the date on which the payment determination is made.
•Patients are not involved in open negotiations or the IDR process, and payors must issue any IDR award payments directly to the provider.
•The NSA empowers HHS to assess penalties against insurers for failure to comply with the NSA, including timely payment of CIDRE awards. However, significant enforcement gaps remain in the current law. Several courts have held that providers do not have an express or implied private right of action to confirm or enforce unpaid IDR awards under the NSA, including the Fifth Circuit’s statement in Guardian Flight that the NSA contains no express right of action to enforce or confirm an IDR award and district court decisions in Delaware and New Jersey dismissing provider enforcement claims. Other courts have permitted enforcement or confirmation to proceed under different theories, including district court decisions in Maryland and Connecticut. In September 2026, aligning with the Fifth Circuit, the Second Circuit also held that the NSA does not provide an implied private right of action for providers to enforce IDR payment awards. Accordingly, the availability of private judicial enforcement of unpaid IDR awards remains unsettled and may depend on the forum.
•Highlighting the complexity and uncertainty with the NSA and IDR process and the unsuccessful results by various insurers, there are numerous pending lawsuits brought by insurers against IDR vendors and providers (other than Nutex), challenging the awards made in favor of the IDR vendors (including Nutex's vendor, HaloMD) and providers. The insurers have alleged, among other things, that the defendant vendors and providers engaged in fraudulent schemes with respect to IDR eligibility determinations. During 2026, federal district courts in several jurisdictions have granted the defendants’ motions to dismiss many of these lawsuits, primarily on the grounds that the NSA bars judicial review of IDR determinations except for certain narrow exceptions permitted under the Federal Arbitration Act that were not met. All dismissed cases have been appealed. In one of these dismissed cases that had been filed against HaloMD in the Northern District of Georgia, the court further held that the insurer had not adequately alleged a plausible fraud claim, reasoning that it was “highly improbable to infer from these facts that there is a vast conspiracy of providers and IDREs that have conspired to defraud the [insurer] of millions of dollars in thousands of NSA IDR proceedings,” and that it was “highly plausible to infer that the [insurer] engages in a consistent practice of submitting lowball offers to out-of-network providers in an effort to maximize its profits.”
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•Reopening of Disputes Closed Prior to June 6, 2025 Only for CIDRE Clerical, Jurisdictional or Procedural Errors. On June 6, 2025 HHS published a Technical Assistance allowing the reopening of disputes (1) received on or after June 6, 2025, or (2) received prior to June 5, 2025, but not responded to prior to June 6, 2025. Reopening is permitted solely for clerical, jurisdictional or procedural errors by the CIDRE. Errors by the parties or substantive disputes among the parties, in particular, with respect to the qualifying payment amount and related statutorily prescribed factors, will not result in a reopening. In addition, HHS has increased the number of CIDREs from 13 to 17 and updated the federal submission portal with respect to, among other things, service-code modifier fields, duplicate-dispute validation, and resubmission rules.
•Federal IDR Operations Final Rule. On June 4, 2026, CMS and federal agencies published the Federal Independent Dispute Resolution Operations final rule, significantly restructuring the Federal IDR Process. Key changes include:
•the non-refundable administrative fee was reduced from $115 to $15 per party per dispute for disputes initiated on or after June 11, 2026;
•the revised batching rules expand permissible batching categories, cap batched determinations at 50 qualified IDR items or services, and apply certain batching revisions to disputes with open negotiation periods beginning November 1, 2026 or 90 calendar days after the Departments issue guidance announcing supporting portal functionality, depending on the provision;
•payors must use standardized Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) on remittance advice sent to out-of-network providers in the manner and timeframe specified in future guidance, and the final rule states that plans and issuers will not be required to use CARCs and RARCs under the rule until the applicability date specified in that guidance;
•open negotiation notices and responses must be submitted through the Federal IDR portal, with standardized forms, expanded information requirements, supporting documentation, and response deadlines, once the relevant portal functionality and applicability dates are announced;
•payors must register with a new Federal IDR Registry, which is intended to provide a centralized source for contact information and information relevant to state law or all-payer model applicability, thereby reducing incorrectly initiated or ineligible disputes;
•CIDREs must determine eligibility no later than five business days after the final selection of the CIDRE; and
•failure to pay the administrative fee or timely pay the certified IDR entity fee will result in the non-paying party’s offer not being considered, while the party remains responsible for payment of the applicable fee.
In late 2026, the Federal IDR process will transition from single-use web forms to a new IDR Gateway, a centralized digital platform for managing disputes, with IDR Gateway functions supporting the final rule expected to be implemented on a rolling basis. The general effective date of the final rule is August 3, 2026, with many procedural changes taking effect 90 calendar days after the Departments issue guidance announcing that supporting portal functionality has become available. While the reduction of the administrative fee in particular is expected to have a positive impact, the Company is unable to predict the overall operational and financial impact of the IDR Operations Final Rule.
•Legal challenges to HHS Final Rule. The final rule has been the subject of multiple legal challenges. Beginning in September 2022, the Texas Medical Association (“TMA”) filed several actions in federal court in Texas, seeking, among other things, to invalidate the IDR related provisions of the final rule.
•Federal Court vacates 2021 HHS interim final rules to ensure fair and accurate rates (TMA III). On November 30, 2022, the TMA filed a lawsuit challenging the federal regulators’ methodology for calculating the QPA. The interim final rules allowed consideration of all negotiated rates, including rates appearing in contracts with providers who do not actually provide the particular service, referred to as “ghost rates,” and excluded certain bonus, incentive, risk-sharing and other payment adjustments from the QPA calculation. On August 24, 2023, the federal district court vacated several aspects of the QPA calculation methodology. After the Fifth Circuit initially reversed that vacatur, the court vacated its panel opinion and granted rehearing en banc. On August 11, 2026, the Fifth Circuit, sitting en banc, affirmed in part, reversed in part, and remanded. The court held that the agencies’ rules were unlawful to the extent they required inclusion of non-negotiated ghost rates and exclusion of bonus and incentive payments, but upheld the agencies’ exclusion of one-off, single-case agreements from the QPA calculation. The Departments may issue further guidance or rulemaking in response, and we cannot predict how the final resolution of the QPA methodology will affect out-of-network payments awarded in the IDR process.
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•Federal Court removes restrictions imposed on arbitrators in 2022 HHS final rules (TMA II).
On August 2, 2024, the Fifth Circuit upheld a ruling by district court disallowing provisions of the final rules established under the NSA which would have required arbitrators (i) to prioritize the insurer established QPA over any of the other factors listed below and (ii) to justify in writing the arbiter’s reliance on any factors beyond the QPA. The Fifth Circuit held that the NSA requires that the arbitrator must consider several factors of equal weight in determining the out-of-network rate. These factors include:
•The qualifying payment amount, which Congress intended as the median rate the insurer would have paid for comparable services in the same geographic area if provided by an in-network provider or facility;
•The doctor’s level of training;
•the market share of the doctor or insurer in the geographic region;
•the acuity of the patient or the complexity of the case;
•the scope of services of the facility; and
•the good faith efforts (or lack of good faith efforts) made by the out-of-network provider or the plan to enter into network agreements and, if applicable, contracted rates between the parties during the previous four years.
Accordingly, in their payment determination, the CIDREs must consider all factors listed above, including, but not prioritizing, the QPA.
IDR Claims Process
The process for out-of-network claims submitted in the IDR process is subject to the bifurcated nature of many states which have their own surprise billing rules for fully insured claims (and for certain types of providers) and the differing rules governing the determination whether individual claims may be bundled or “batched” when submitting to the CIDRE. As a result, eligibility determinations require involved processes, and Nutex aims to comply with all applicable laws and regulations in each of the jurisdictions in which it operates, including the eligibility rules in effect at the time a claim is being submitted to federal arbitration.
Our claims for out-of-network services are subject to the following federally mandated process once we submit a payment request to the applicable insurance company:
•Initial Payment or Denial. Under the NSA, insurers must issue either an initial payment or a notice of denial to a provider within 30 days after receiving a bill for an out-of-network service.
•Negotiation Period. If the provider disagrees with the insurer’s determination, the provider may initiate a 30-business-day open negotiation period with the insurer regarding the claim.
•IDR Process. If the dispute is not resolved through negotiation, either party may proceed to the IDR process within four business days.
•Payment Timeline. The IDR process is intended to take no more than 30 days, but in practice can take between three to five months before we receive IDR approved and adjusted payments, including the 30 day deadline for the payor to submit payments after the award has been determined.
•Late Payment or Non-Payment. Currently, HHS has the authority to impose financial penalties on payors for late payment or non-payment upon application of the provider, but the availability of a private judicial remedy to enforce unpaid IDR awards remains unsettled. The No Surprises Act Enforcement Act, if enacted, would impose additional penalties and interest for late payment or non-payment after an IDR entity payment determination, including a penalty tied to three times the difference between the initial payment or denial amount and the out-of-network rate.. See “Future Expectations” below.
Effective May 1, 2024, we engaged HaloMD, a third-party tech-enabled expert, to further support our out-of-network claims and determine which claims would be beneficial to arbitrate. HaloMD specializes in independent dispute resolution through the NSA and state regulations for out-of-network healthcare providers. HaloMD attests to the eligibility of claims to be submitted to arbitration. Given the complexity of the federal arbitration process and its interaction with state surprise billing laws, it is crucial for providers like Nutex to seek tech-enabled expert assistance in the highly complex submission process. This third-party expertise, such as that provided by HaloMD, helps the Company navigate the complexity of submission of claims in bifurcated states where either state or federal law may apply, depending on the insurance coverage and services provided.
“Bifurcated” states are states in which some out-of-network services are subject to the federal IDR process and others are subject to a specified state law or all-payer model agreement. The out-of-network services subject to either federal or state jurisdiction
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differ from state to state, rendering the medical billing process highly complex. HaloMD assists Nutex throughout our arbitration process in the bifurcated states of Texas, Florida, New Mexico, and the non-bifurcated states of Arizona, Arkansas, Idaho, Indiana, Kansas, Louisiana, Oklahoma, and Wisconsin, when we conclude that the payor has not properly paid or underpaid a claim for services as required under the NSA. In that regard, HaloMD works closely with us in navigating the following key area:
•Documentation Submission. Based on the information and data we provide to HaloMD, using a proprietary data driven process, HaloMD submits the required documentation to the CIDRE through the federal portal.
•Eligibility Determination. It is the CIDRE who determines the eligibility of the claims submitted to arbitration based on the information provided through the federal portal. All payors have the right to object to whether the claim is eligible for IDR review or subject to a similar state law dispute resolution process based upon the type of insured member.
•Jurisdictional Eligibility. Jurisdictional eligibility depends on whether a state is “bifurcated,” which means that state laws regarding surprise billing only partially align with federal law.
•State Laws. Certain states have their own surprise billing laws, which must meet specified requirements to take precedence over the federal process but may not cover all claims. In our case, Texas, Florida, and New Mexico are bifurcated states where state law takes precedence for most out-of-network claims.
•Claim Submission. Providers or their representatives must attest to the best of their knowledge whether a claim falls under state or federal jurisdiction based on the type of insurance plan and the services involved. The CIDRE then determines whether the dispute is eligible to proceed under the federal IDR process. Where applicable, state law procedures and requirements govern the equivalent arbitration process under state law.
•Federal Arbitration Process. Under the federal arbitration process, both the insurer and the provider submit offers indicating the amounts they are willing to pay or receive, respectively. Based on the information submitted through the federal portal, the CIDRE selects either the insurer’s or the provider’s offer to determine the payment.
•Offer Determination. HaloMD, using proprietary data analysis and benchmarking, determines the appropriate offer amount on our behalf.
•Independent Review. The IDR process allows an independent review of a provider’s services and payment requests. Prior to federal arbitration, the insurer had been the sole arbiter of the amount payable for out-of-network services.
•For the first time, independent federal arbitration offers providers a venue to submit claims to an independent arbiter, which we believe has resulted in payments that more accurately reflect fair and reasonable value of the services provided.
•In this fully transparent process, both the payor and the provider submit offers indicating the amounts they are willing to pay or receive, respectively.
•Based on the information submitted through the federal portal by HaloMD, the CIDRE selects either the insurer’s or the provider’s offer to determine the payment.
IDR Industry Trends. According to current arbitration data published by the Centers for Medicare and Medicaid Services (CMS), CIDREs are making significant progress in improving the overall Federal IDR process:
•Between January 1, 2026, and May 31, 2026, disputing parties initiated 1,433,289 disputes through the Federal IDR portal. In May 2026, 287,520 disputes were initiated. Certified IDR entities closed 1,354,911 disputes during January 1 through May 31, 2026, approximately keeping pace with new dispute initiations.
•The top initiating parties (HaloMD, Team Health and SCP Health) accounted for approximately 44% of all disputes initiated in the first six months of 2025, and 38% of all disputes initiated in the last six months of 2025.
•From January 1 through June 30, 2025, providers, facilities or air ambulance providers prevailed in approximately 88% of payment determinations.
•During the first six months of 2025, the prevailing offer was higher than the QPA in approximately 88% of payment determinations made during such period.
•The primary cause of processing delays is the complexity of determining whether disputes are eligible for the Federal IDR process, since the certified IDR entity must confirm dispute eligibility.
•The percentage of disputes found ineligible decreased from 69% in the first six months of 2022 to 20% in the last six months of 2024 and 17% in the first six months of 2025. As of May 31, 2026, of the 5,862,819 total disputes closed since the portal's launch, 1,066,645 (approximately 18%) were found ineligible.
Overall, between April 15, 2022 and September 30, 2026, 7,798,616 disputes were initiated through the Federal IDR portal, with 5,805,326 payment determinations issued and 7,304,875 total disputes closed. During August and September 2026, certified IDR entities closed 784,352 disputes, exceeding the 750,022 disputes initiated during the same period, which CMS stated reflected continued processing efficiency and the near-elimination of the existing IDR backlog.
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Future Expectations. We expect the federal arbitration process for out-of-network services will continue to evolve. On July 23, 2025, the No Surprises Act Enforcement Act was introduced in both the House and the Senate and referred to committee. The proposed legislation would, among other things, increase penalties for specified balance-billing-related violations, require payment notifications after IDR determinations, impose additional penalties and interest for late payment or non-payment after IDR entity payment determinations, and create additional transparency reporting requirements. We cannot predict whether this legislation will be approved and signed into law. Future federal court decisions, agency guidance, rulemaking, and regulatory changes may adversely affect our ability to collect the revenue for our services that we believe is fair and reasonable.
IDR Process and Revenue Recognition Constraints. The Company recognizes revenue at the time of service based on the estimated transaction price it expects to receive from third-party payers. We apply ASC 606 – Revenue from Contracts with Customers in making estimates of its earned revenue and accounts receivable at each reporting date. For out-of-network services subject to the No Surprises Act, our methodology incorporates, among other things, historical arbitration outcomes, payor behavior, and expected resolution timing in determining the expected transaction price for applicable claims. This estimation process is highly subjective. The Company regularly conducts a comparative analysis of its actual results to its previously determined transaction results in order to evaluate whether adjustments are required based on newly available information. When the expected transaction price is adjusted, the cumulative effect of that adjustment is reflected in revenue in the period in which the adjustment is identified, including its impact on accounts receivable balances recognized in prior periods, and can result in significant fluctuations in recognized revenue from period to period.
The federal IDR process experienced a significant systemic expansion in dispute volumes, resulting in severe processing backlogs and prolonged determination timelines that frequently exceed statutory windows. In response to these backlogs, HHS implemented several technical adjustments, including increasing the number of CIDREs from 13 to 17, updating the federal submission portal to adjust service-code modifier fields, and altering duplicate-dispute validation and resubmission rules. The 2026 IDR Operations Final Rule and IDR Gateway transition are intended to centralize notices and dispute information, improve early eligibility communications, standardize CARC and RARC information, implement a new payor registry, and reduce ineligible disputes, but the rule will be implemented in phases as supporting functionality becomes available.
While these administrative and technical updates are intended to improve portal efficiency over time, their immediate implementation may introduce further operational volatility, administrative complexity, and lingering eligibility challenges. The Departments anticipate that the final rule’s CARC and RARC requirements, open negotiation notices and responses, IDR initiation notices and responses, batching changes, and Federal IDR Registry could reduce ineligible disputes, but they also anticipate that the lower administrative fee could increase dispute volume.
Consequently, in accordance with ASC 606, when estimating the amount we ultimately expect to recover at the time of service, the Company re-evaluates the expected transaction price at each reporting period as additional information becomes available and adjusts the variable consideration incorporated in such transaction price when warranted by newly available facts, dispute developments, or collections experience. Due to the ongoing operational volatility of the IDR framework and the implementation of these portal modifications, there is inherent uncertainty regarding the ultimate timing and impact of these updates on our financial results. Revenue associated with these estimates is recognized as information becomes available during the normal course of the claims adjudication process, which may result in fluctuations in patient revenue between the period services are rendered and the period related adjustments are recorded.
Cost of Arbitration. There is a significant cost to enter the arbitration process. The arbitration process includes expenses associated with third party providers, including IDR entities, which typically collect fees at the beginning of the process, before the claim award amounts are decided by arbitrators. Effective June 30, 2026, the Company amended its Payment Dispute Resolution Services Agreement with HaloMD, L.L.C. to transition the fee payment structure to a pay-on-collected basis rather than payment due upon award determination, and to amend the service fee structure applicable to various federal and state net settlement amounts obtained on or after July 1, 2026. Pursuant to the Agreement, the Company may perform dispute resolution services in-house or through the engagement of another third-party vendor or service provider with respect to certain future facilities. In addition, on June 4, 2026, CMS and other federal agencies reduced the nonrefundable administrative fee for the federal IDR process from $115 to $15 per party per dispute, effective June 11, 2026. The Company accounted for the impact of these changes as a change in estimate in accordance with ASC 250 and recognized the effects prospectively in the period of change and future periods. The effect of these changes for the three and nine months ended September 30, 2026 is reflected as a zero and $52.3 million reduction to contract services expense, respectively, in the unaudited condensed consolidated statements of operations. According to the CMS, as of July 27, 2026, the nonrefundable administrative fee was $15 per party per dispute and the certified IDR entity fee ranged from $200 to $840 for single determinations and $268 to $1,173 for batched determinations. The total cost of arbitration for all Nutex hospital and professional services for the three months ended September 30, 2026 and 2025
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totaled $27.8 million and $41.9 million, respectively, and for the nine months ended September 30, 2026 and 2025 totaled $61.4 million and $116.2 million, respectively.
Regulatory Licensing and Certification. Many states, including Arizona, Arkansas, Florida, Indiana, Kansas, Louisiana, New Mexico, Ohio, Oklahoma, Texas, and Wisconsin, require regulatory approval, including licensure and certification, before establishing certain types of clinics offering certain professional and ancillary services, including the services Nutex offers. The operations of the Nutex owned and managed hospitals 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. Our ability to operate profitably depends in part on the ability of Nutex owned and managed facilities and its providers to obtain and maintain all necessary licenses and other approvals, and maintain updates to their enrollment in the Medicare and Medicaid programs, including the addition of new hospital locations, providers and other enrollment information. In addition, certain ancillary services such as the provision of diagnostic laboratory testing require additional state and federal licensure and regulatory oversight, including oversight by CMS, under Clinical Laboratory Improvement Amendments of 1988, or CLIA, which requires all clinical laboratories to meet certain quality assurance, quality control and personnel standards, and comparable state laboratory licensing authorities. Standards for testing under CLIA are based on the complexity of the tests performed by the laboratory, with tests classified as “high complexity,” “moderate complexity,” or “waived.” Nutex owned and managed facilities hold CLIA Certificates of Waiver and perform certain CLIA-waived tests, which subject such clinics to certain CLIA requirements. 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 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. 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. 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. Our arrangements with our affiliated professional entities and other physician partners are subject to various state laws, commonly referred to as corporate practice of medicine and fee-splitting laws, which are intended to prevent unlicensed persons from interfering with or influencing the physician’s professional judgment and prohibiting the sharing of professional service fees with non-professional or business interests. These laws vary from state to state, including those where the Company does business, and are subject to broad interpretation and enforcement by state regulators.
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. 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.
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. 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. By way of example, the AKS safe harbor for value-based arrangements and the safe harbor for arrangements between managed care organizations and
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downstream contractors both require, among other things, that the arrangement does not induce a person or entity to reduce or limit medically necessary items or services furnished to any patient. Failure to meet the requirements of an applicable AKS safe harbor, however, does not render an arrangement illegal. 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 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.
The Federal False Claims Act ("FCA") prohibits a person from knowingly presenting, or causing 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. 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. Penalties for a violation of the FCA include fines for each false claim, plus up to three times the amount of damages caused by each false claim. Private individuals also have the ability to bring actions under these false claims’ laws in the name of the government alleging false and fraudulent claims presented to or paid by the government (or other violations of the statutes) and to share in any amounts paid by the entity to the government in fines or settlement. Such suits, known as qui tam actions, are pervasive in the healthcare industry.
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. Moreover, in certain cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable under the AKS and civil FCA. One of the statutory exceptions to the prohibition is non-routine, unadvertised waivers of copayments or deductible amounts based on individualized determinations of financial need or exhaustion of reasonable collection efforts. The HHS’ Office of Inspector General emphasizes, however, that this exception should only be used occasionally to address special financial needs of a particular patient. 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. Similar to the AKS, 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 states in which we operate have also adopted similar fraud and abuse laws as described above. 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.
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. 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. By way of example, in the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “ACA”) substantially changed the way healthcare is financed by both governmental and private insurers. The ACA required, among other things, CMS to establish a Medicare shared savings program that promotes
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accountability and coordination of care through the creation of Accountable Care Organizations (ACOs). The Medicare shared savings program allows for providers, physicians and other designated health care professionals and suppliers to form ACOs and voluntarily work together to invest in infrastructure and redesign delivery processes to give coordinated high-quality care to their Medicare patients, avoid unnecessary duplication of services and prevent medical errors. ACOs that achieve quality performance standards established by CMS are eligible to share in a portion of the Medicare program’s cost savings. ACO program methodologies and participation requirements are updated by CMS for each performance year and participants are expected to comply with such program requirements and required to report on performance after the close of the year. 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. Although we currently do not participate in these pilot payment models, we may choose to do so in the future. Additional changes that may affect our business include the expansion of new programs such as Medicare payment for performance initiatives for physicians under the Medicare Access and CHIP Reauthorization Act of 2015, which first affected physician payment in 2019. At this time, it is unclear how the introduction of the Medicare quality payment program will impact overall physician reimbursement. In addition, there likely will continue to be regulatory proposals directed at containing or lowering the cost of healthcare, as government healthcare programs and other third-party payors transition from FFS to value-based reimbursement models, which can include risk-sharing, bundled payment and other innovative approaches. It is possible that the federal or state governments will implement additional reductions, increases, or changes in reimbursement in the future under government programs that may adversely affect us or increase the cost of providing our services. 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. An example is the 21st Century Cures Act, also known as the Cures Act, which was passed and signed into law in December 2016, which includes provisions related to data interoperability, information blocking and patient access. On April 5, 2021, healthcare providers and certain other entities became subject to information blocking restrictions pursuant to the Cures Act that prohibit practices that are likely to interfere with the access, exchange or use of electronic health information, except as required by law or specified by the HHS as a reasonable and necessary activity. 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.
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). For example, HIPAA imposes obligations on “covered entities,” including certain healthcare providers, such as the affiliated professional entities, health plans, and healthcare clearinghouses, and their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, as well as their covered subcontractors with respect to safeguarding the privacy, security and transmission of individually identifiable health information. 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. Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.
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Federal and State Insurance and Managed Care Laws. Regulation of downstream risk-sharing arrangements, including, but not limited to, at-risk and other value-based arrangements, varies significantly from state to state. Some states require downstream entities and risk-bearing entities to obtain an insurance license, a certificate of authority, or an equivalent authorization, in order to participate in downstream risk-sharing arrangements with payors. In some states, statutes, regulations and/or formal guidance explicitly address whether and in what manner the state regulates the transfer of risk by a payor to a downstream entity. However, the majority of states do not explicitly address the issue, and in such states, regulators may nonetheless interpret statutes and regulations to regulate such activity. If downstream risk-sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payor as the party to such a downstream risk-sharing arrangement. Such oversight is accomplished via contract and may include the imposition of reserve requirements, as well as reporting obligations. 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.
Industry Trends
The demand for healthcare services continues to be impacted by the following trends:
•Regulatory uncertainty, including potential changes to healthcare laws, reimbursement rates and payment policies;
•A growing focus on healthcare costs by consumers, employers and insurers, who are actively seeking lower-cost care solutions;
•A shift in patient volumes from inpatient to outpatient settings due to technological advancements and demand for care that is more convenient, affordable and accessible;
•The growing aged population, which requires greater chronic disease management and higher-acuity treatment; and
•Ongoing consolidation of providers and insurers across the healthcare industry.
The healthcare industry, particularly emergency care hospitals, continues to be subject to ongoing regulatory uncertainty. Changes in federal or state healthcare laws, regulations, funding policies or reimbursement practices, especially those involving reductions to government payment rates or limitations on what providers may charge, could significantly impact future revenue and operations. For example, the No Surprises Act prohibits providers from charging patients an amount beyond the in-network cost sharing amount for services rendered by out-of-network providers, subject to limited exceptions. For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the amounts received by out-of-network providers from health plans. Any reduction in the rates that we can charge or the amounts we can receive for our services will reduce our total revenue and our operating margins.
Recent Developments
Cybersecurity Incident. As disclosed in Item 8.01 of the Current Report on Form 8-K filed with the SEC on August 24, 2026, and updated in Item 1.05 of the Form 8-K filed with the SEC on August 31, 2026, we became aware of unauthorized activity involving data stored on our computer network. We engaged an independent third-party cybersecurity response team and forensic experts, activated a cybersecurity response plan, implemented containment measures and notified law enforcement.
To date, we have not identified any material impact of the cybersecurity incident on our business operations or financial reporting systems. Based on the information currently available, our assessment of the materiality of the Cybersecurity Incident, as set forth in the August 31, 2026 8-K, has not changed. We will continue to evaluate the impact of the Cybersecurity Incident as more information becomes available through our ongoing analysis, and will provide further updates as warranted, including any required amendments to our prior disclosures. At this stage, we are unable to predict the outcome of the related litigation or estimate the potential impact of the Cybersecurity Incident on our business strategy, operations, financial condition, results of operations or the trading price of our common stock. We may incur additional costs and expenses in connection with the Cybersecurity Incident, including costs related to investigation, remediation, notification, litigation, and potential regulatory inquiries, which may not be fully covered by insurance. See Part II, Item 1, “Legal Proceedings — Purported Class Actions Related to the Cybersecurity Incident.”
Nasdaq Texas Approval. On September 23, 2026, the Company’s common stock commenced trading on Nasdaq Texas, LLC (“Nasdaq Texas”) under its current ticker symbol “NUTX.” The dual listing on Nasdaq Texas did not require any action by the Company’s stockholders and did not affect the Company’s outstanding shares of common stock. Shares of common stock remain fully fungible across both trading venues.
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Results of Operations
We report the results of our operations as three segments in our unaudited condensed consolidated financial statements: (i) the hospital division, (ii) the population health management division and (iii) the real estate division. Activity within our business segments is significantly impacted by the demand for healthcare services we provide, competition for these services in each of the markets we serve, and the legislative changes discussed above.
Following are the results of operations for the periods presented (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Hospital division | $ | 209,097 | $ | 260,239 | $ | 618,519 | $ | 700,488 | |||||||||||||||
| Population health management division | 8,516 | 7,565 | 26,331 | 23,090 | |||||||||||||||||||
| Total revenue | 217,613 | 267,804 | 644,850 | 723,578 | |||||||||||||||||||
| Segment gross profit (loss): | |||||||||||||||||||||||
| Hospital division | 103,481 | 154,107 | 334,901 | 397,571 | |||||||||||||||||||
| Population health management division | (1,779) | 883 | 160 | 899 | |||||||||||||||||||
| Real estate division | (176) | (109) | (526) | (327) | |||||||||||||||||||
| Total segment gross profit | 101,526 | 154,881 | 334,535 | 398,143 | |||||||||||||||||||
| Corporate and other costs: | |||||||||||||||||||||||
| Stock-based compensation | 7,388 | 13,217 | 6,357 | 119,606 | |||||||||||||||||||
| General and administrative expenses | 17,040 | 11,297 | 48,097 | 33,830 | |||||||||||||||||||
| Total corporate and other costs | 24,428 | 24,514 | 54,454 | 153,436 | |||||||||||||||||||
| Operating income | 77,098 | 130,367 | 280,081 | 244,707 | |||||||||||||||||||
| Interest expense, net | 4,862 | 5,452 | 14,215 | 17,250 | |||||||||||||||||||
| Other expense (income) | (304) | 976 | (319) | 8,570 | |||||||||||||||||||
| Income before taxes | 72,540 | 123,939 | 266,185 | 218,887 | |||||||||||||||||||
| Income tax expense | 15,197 | 27,140 | 49,762 | 55,138 | |||||||||||||||||||
| Net income | 57,343 | 96,799 | 216,423 | 163,749 | |||||||||||||||||||
| Less: net income attributable to noncontrolling interests | 17,114 | 41,364 | 63,545 | 104,794 | |||||||||||||||||||
| Net income attributable to Nutex Health Inc. | $ | 40,229 | $ | 55,435 | $ | 152,878 | $ | 58,955 | |||||||||||||||
Adjusted EBITDA(1) | $ | 63,877 | $ | 98,530 | $ | 211,426 | $ | 242,965 | |||||||||||||||
| Patient visits: | |||||||||||||||||||||||
| Hospital | 54,622 | 46,232 | 154,326 | 140,074 | |||||||||||||||||||
(1)See reconciliation of net income attributable to Nutex Health Inc. to Adjusted EBITDA under Non-GAAP Financial Measures.
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
Net income attributable to Nutex Health Inc. was $40.2 million, or income of $5.71 per diluted share, for the three months ended September 30, 2026 compared to net income attributable to Nutex Health Inc. of $55.4 million, or income of $7.76 per share, for the same period 2025. Our 2026 results were principally affected by:
•Higher patient visits, which increased by 18.1% during the three months ended September 30, 2026 as compared with the same period of 2025. Visits at same hospitals, which are hospitals that were opened by December 31, 2024, increased an average of 12.4% versus prior year.
•Hospital division revenue of $209.1 million for the three months ended September 30, 2026 as compared to $260.2 million for the same period in 2025, a decrease of $51.1 million.
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•Lower income tax expense of $15.2 million for the three months ended September 30, 2026 compared to $27.1 million for the three months ended September 30, 2025, a decrease of $11.9 million.
•Net income attributable to noncontrolling interests of $17.1 million for the three months ended September 30, 2026 compared to $41.4 million for the three months ended September 30, 2025, a decrease of $24.3 million.
Adjusted EBITDA for the three months ended September 30, 2026 was $63.9 million as compared to $98.5 million for the same period in 2025. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of net income attributable to Nutex Health Inc. to Adjusted EBITDA.
A discussion of our segment results is included below.
Hospital Division. Our revenue for the three months ended September 30, 2026 totaled $209.1 million as compared to $260.2 million for the same period in 2025, a decrease of $51.1 million or 19.7%. The decrease was primarily driven by factors that favorably impacted revenue recognized in 2025, including the availability of additional collection data that supported higher estimates for services rendered in 2024 and the reconciliation of certain ineligible charts during the fourth quarter of 2025 that had been included from mid-2024 through the first nine months of 2025. Revenue related to same hospitals decreased by 20.1%.
Total patient visits increased 18.1% during the three months ended September 30, 2026 as compared with the same period in 2025 including the impact of the opening of two facilities throughout 2025 which are fully operating in 2026.
The hospital division’s gross profit was $103.5 million during the three months ended September 30, 2026, compared with $154.1 million in the same period in 2025, a decrease of 32.9%. The decrease is primarily driven by lower revenue in the current period than the same period in 2025.
Population Health Management Division. Our total revenue for the three months ended September 30, 2026 was $8.5 million as compared with $7.6 million for the same period in 2025, with the increase primarily due to increased members.
The population health management division had $1.8 million of loss before income taxes for the three months ended September 30, 2026 as compared to $0.9 million of income before income taxes for the same period in 2025. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Corporate and other costs. Corporate and other costs in the three months ended September 30, 2026 totaled $24.4 million as compared to $24.5 million for the same period in 2025, a decrease of 0.4%, attributed to the decrease in stock-based compensation of $5.8 million offset by the increase in general and administrative expenses of $5.7 million. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees.
Nonoperating items
Interest expense, net. Interest expense, net was $4.9 million for the three months ended September 30, 2026 as compared with $5.5 million for the same period of 2025. The decrease in interest expense, net in 2026 is primarily due to the payoff of loans and interest income received from sweep accounts.
Income tax expense. Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Net income attributable to Nutex Health Inc. was $152.9 million, or income of $21.50 per diluted share, for the nine months ended September 30, 2026 compared to net income attributable to Nutex Health Inc. of $59.0 million, or income of $8.87 per share, for the same period 2025. Our 2026 results were principally affected by:
•Higher patient visits, which increased by 10.2% during the nine months ended September 30, 2026 as compared with the same period of 2025. Visits at same hospitals, which are hospitals that were opened by December 31, 2024, increased an average of 6.3% versus prior year.
•Hospital division revenue of $618.5 million for the nine months ended September 30, 2026 as compared to $700.5 million for the same period in 2025, a decrease of $82.0 million.
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•Lower total stock-based compensation of $6.4 million for the nine months ended September 30, 2026 as compared to $119.6 million for the same period in 2025, a decrease of $113.2 million, primarily related to obligations for under construction and ramping hospitals.
•Net income attributable to noncontrolling interests of $63.5 million for the nine months ended September 30, 2026 as compared to $104.8 million for the same period in 2025, a decrease of $41.2 million.
Adjusted EBITDA for the nine months ended September 30, 2026 was $211.4 million as compared to $243.0 million for the same period in 2025. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of net income attributable to Nutex Health Inc. to Adjusted EBITDA.
A discussion of our segment results is included below.
Hospital Division. Our revenue for the nine months ended September 30, 2026 totaled $618.5 million as compared to $700.5 million for the same period in 2025, a decrease of $82.0 million or 11.7%. The decrease was primarily driven by factors that favorably impacted revenue recognized in 2025, including the availability of additional collection data that supported higher estimates for services rendered in 2024 and the reconciliation of certain ineligible charts during the fourth quarter of 2025 that had been included from mid-2024 through the first nine months of 2025. Revenue related to same hospitals decreased by 11.2%.
Total patient visits increased 10.2% during the nine months ended September 30, 2026 as compared with the same period in 2025 including the impact of the opening of two facilities throughout 2025 which are fully operating in 2026.
The hospital division’s gross profit was $334.9 million during the nine months ended September 30, 2026 compared with $397.6 million for the same period in 2025, a decrease of 15.8%. The decrease is primarily driven by lower revenue in the current period than the same period in 2025.
The nine months ended September 30, 2026 also experienced a decrease in total cost of arbitration, reflected as a reduction to contract services expense of $52.3 million, primarily due to the amendment to the Agreement with HaloMD effective June 30, 2026 and the reduction by CMS and other federal agencies of administrative fees ("CMS fee"). The amendment transitioned the applicable fee payment structure to a pay-on-collected basis (rather than payment due upon award determination) retroactive to the effective date of the original Agreement with HaloMD. This changes in fee payment structure contributed to $38.4 million of the reduction to contract services. Additionally, the amendment changed the service fee structure applicable to various federal and state net settlement amounts obtained on or after July 1, 2026. The impact of this change in service fee structure contributed to $9.6 million of the reduction to contract services. Regarding the CMS fee reduction, the non-refundable administrative fee for the federal IDR process reduced from $115 to $15 per party per dispute, effective June 11, 2026. The reduction in the CMS fee contributed to $4.3 million of the reduction to contract services.
Population Health Management Division. Our total revenue for the nine months ended September 30, 2026 was $26.3 million as compared with $23.1 million for the same period in 2025.
The population health management division had $0.2 million and $0.9 million of income before income taxes for the nine months ended September 30, 2026 and 2025, respectively. Strategically, we are focused on the growth of this division principally through the addition of new independent physician associations and have staffed our organization to manage larger numbers of such organizations.
Corporate and other costs. Corporate and other costs in the nine months ended September 30, 2026 totaled $54.5 million as compared to $153.4 million for the same period in 2025, a decrease of 64.5%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The decrease in corporate and other costs is primarily due to a decrease in stock-based compensation of $113.2 million related to obligations for under-construction and ramping hospitals, offset partially by an increase in general and administrative expenses of $14.3 million.
Nonoperating items
Interest expense, net. Interest expense, net was $14.2 million for the nine months ended September 30, 2026 as compared with $17.3 million for the same period of 2025. The decrease in interest expense, net in 2026 is primarily due to interest income received from sweeps as a result of increased investment of excess cash.
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Income tax expense. Income tax provisions for interim quarterly periods are generally based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items related specifically to interim periods. The income tax impact of discrete items is recognized in the period these occur.
Liquidity and Capital Resources
As of September 30, 2026, we had $249.9 million of cash and equivalents, compared to $185.6 million of cash and equivalents as of December 31, 2025.
Significant sources and uses of cash during the first nine months of 2026.
Sources of cash:
•Cash from operating activities was $188.1 million, primarily driven by significantly higher net income largely attributable to a decrease in stock-based compensation related to obligations for under construction and ramping hospitals, and favorable developments in the arbitration process, which contributed to lower operating costs and expenses.
Uses of cash:
•Stock repurchases, cash payments in settlement of earn out obligations, and retirements of $50.7 million.
•Distributions, net of contributions, to noncontrolling interests totaled $52.0 million
•Repayments of lines of credit and notes payable $5.5 million.
•Repayments of finance leases totaled $4.5 million.
•Acquisitions of property and equipment totaled $8.9 million.
Future sources and uses of cash. Our operating activities are financed with cash on hand which is generated from revenues. Most of our hospital facilities are leased from various lessors including related parties. These leases are presented in our unaudited condensed consolidated balance sheets unless the lease is from a consolidated Real Estate Entity. Our growth plans include the development of new hospital locations. We expect that in many of these locations we will lease facilities from newly established entities partially owned by related parties.
We routinely enter into equipment lease agreements to procure new or replacement equipment and may also finance these purchases with term debt. We have smaller lines of credit 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 as of September 30, 2026 is presented in Item 1, “Financial Statements – Note 8 – Debt” and our lease obligations are presented in Item 1, “Financial Statements—Note 9 – Leases.”
We have entered into private debt arrangements with banking institutions for the purchase of equipment and to provide working capital and liquidity through cash and lines of credit. Unless otherwise delineated above, these debt arrangements are obligations of Nutex and/or its wholly-owned subsidiaries. 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 Real Estate VIEs for the periods shown.
Certain outstanding debt arrangements require minimum debt service coverage ratios and other financial covenants. At September 30, 2026, we were in compliance with these debt arrangements; we had remaining availability of $6.8 million under outstanding lines of credit.
Off-Balance Sheet Arrangements
As of September 30, 2026, we had no material off-balance sheet arrangements.
Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA are used as supplemental non-GAAP financial measures by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. We
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believe EBITDA and Adjusted EBITDA are useful because these measures allow us to more effectively evaluate our operating performance.
We define EBITDA as net income attributable to Nutex Health Inc. plus interest expense, net, income taxes, depreciation and amortization. Interest expense, net includes interest on lease liabilities, which is a component of total finance lease cost.
We define Adjusted EBITDA as net income attributable to Nutex Health Inc. plus interest expense, net, income taxes, depreciation and amortization, further adjusted for stock-based compensation, finance lease payments related to leases under ASC 842, certain defined items of expense and any acquisition-related costs and impairments. A reconciliation of net income to EBITDA and Adjusted EBITDA is included below.
Beginning in the first quarter of 2025, we have updated our presentation of Adjusted EBITDA to separately disclose finance lease payments related to leases under ASC 842. We believe this update provides greater transparency into our operating performance.
EBITDA and Adjusted EBITDA are not intended to serve as alternatives to U.S. GAAP measures of performance and may not be comparable to similarly-titled measures presented by other companies. EBITDA and Adjusted EBITDA follow (in thousands):
| Three Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of net income attributable to Nutex Health Inc. to Adjusted EBITDA: | |||||||||||
| Net income attributable to Nutex Health Inc. | $ | 40,229 | $ | 55,435 | |||||||
| Depreciation and amortization | 5,622 | 5,003 | |||||||||
| Interest expense, net | 4,862 | 5,452 | |||||||||
| Income tax expense | 15,197 | 27,140 | |||||||||
| Allocation to noncontrolling interests | (2,565) | (1,243) | |||||||||
| EBITDA | 63,345 | 91,787 | |||||||||
| Stock-based compensation | 7,388 | 13,217 | |||||||||
Finance lease payments | (6,856) | (6,474) | |||||||||
| Adjusted EBITDA | $ | 63,877 | $ | 98,530 | |||||||
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Reconciliation of net income attributable to Nutex Health Inc. to Adjusted EBITDA: | |||||||||||
| Net income attributable to Nutex Health Inc. | $ | 152,878 | $ | 58,955 | |||||||
| Depreciation and amortization | 16,431 | 15,343 | |||||||||
| Interest expense, net | 14,215 | 17,250 | |||||||||
| Income tax expense | 49,762 | 55,138 | |||||||||
| Allocation to noncontrolling interests | (7,490) | (3,815) | |||||||||
| EBITDA | 225,796 | 142,871 | |||||||||
| Stock-based compensation | 6,357 | 119,606 | |||||||||
| Finance lease payments | (20,727) | (19,512) | |||||||||
| Adjusted EBITDA | $ | 211,426 | $ | 242,965 | |||||||
Significant Accounting Policies
The preparation of financial statements and related disclosures in accordance with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2025 describes the significant accounting policies and methods used in the preparation of the consolidated financial statements. The Company’s critical accounting policies that are impacted by judgments, assumptions and estimates are described in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of
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Operations in our Annual Report on Form 10-K for the year ended December 31, 2025. Since December 31, 2025, there have been no material changes in the Company’s accounting policies that are impacted by judgments, assumptions and estimates.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
With respect to the three and nine months ended September 30, 2026, there have been no material changes in our primary market risk exposures or how those exposures are managed since the information disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Item 4. Controls and Procedures
In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, we concluded that our disclosure controls and procedures were effective as of September 30, 2026, to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
There has been no change in our internal control over financial reporting that occurred during the three months and nine months ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The Company, its consolidated subsidiaries or VIEs may be named in various claims and legal actions in the normal course of business. Based upon counsel and management’s opinion, except for the items listed below, the outcome of such matters is not expected to have a material adverse effect on the unaudited condensed consolidated financial statements.
On April 14, 2025, VLS Emergency Medicine, LLC, Astra Assets, LLC, Right on Hereford, LLC, and Nexus Group Two LLC (collectively, the “ABQ Plaintiffs”) filed an Original Petition against Nutex Health Holdco LLC (“Nutex Holdco”) and Thomas Vo, MD in the District Court of Harris County, Texas, Case No. 2025-26239. The ABQ Plaintiffs allege that the May 16, 2024 Amendment to the Contribution Agreement, dated November 23, 2021, was wrongfully executed by Nutex Holdco and Dr. Vo, in his capacity as the authorized “Owner Representative” (as defined in the Contribution Agreement). The Amendment clarifies that the Parent Stock Price Floor, as defined in the Contribution Agreement, is adjusted for the Company's 2024 reverse stock splits. The Parent Stock Price Floor is used in the determination of the number of shares to be issued to the ABQ Plaintiffs. Rejecting the reverse-stock-split adjustment, the ABQ Plaintiffs demand the issuance of a higher number of shares, which would force the Company to grant the ABQ Plaintiffs a higher percentage ownership in the Company, to the detriment of the Company’s other stockholders.
Nutex Holdco and Dr. Vo have filed their answers and counterclaims, addressing the allegations set forth and presenting their own claims against the ABQ Plaintiffs. On September 22, 2026, Nutex Holdco filed a traditional motion for partial summary judgment. The case is scheduled for the two-week trial docket beginning December 7, 2026. 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.
In addition, in a letter dated February 23, 2026, Emergency Medical Provider and Family Medical Associates, P.A. submitted a Demand and Draft Complaint (“Royse City Notice”) to Nutex Holdco and Thomas Vo, MD. The Royse City Notice demands that the pre-reverse split Parent Stock Price Floor be used in the calculation of the number of shares to be issued. RCER LLC (collectively with Emergency Medical Provider and Family Medical Associates, P.A., the “Former Royse City Owners”) has made a similar demand. The Company is unable to predict the outcome of these discussions or determine whether any resolution of the demands made by the Former Royse City Owners will have a materially adverse effect on the Company and its stockholders.
Securities Action
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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. 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. The complaint names Nutex Health Inc., its Chairman of the Board and Chief Executive Officer, its Chief Financial Officer and its President and Director as defendants and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act”) and Rule 10b-5 promulgated thereunder.
The 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. 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.
The Company filed a motion to dismiss on April 3, 2026, which is pending. The Company is unable to predict the outcome of the litigation or estimate the potential financial impact, but an adverse ruling could have a material adverse effect on the Company’s financial position or results of operations.
Derivative Actions
On September 8, 2025, a purported stockholder filed a derivative action on behalf of Nutex Health Inc. in the United States District Court for the Southern District of Texas, captioned Juan Camilo Jimenez, derivatively on behalf of Nutex Health Inc., Case No. 4:25-cv-04253, naming as defendants the Company’s Chief Executive Officer, its Chief Financial Officer and its President, along with the current members of its Board of Directors (other than Frank E. Jaumot) and a director who recently retired from the Board of Directors, alleging, among other things, violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. In addition, on September 11, 2025, a second purported stockholder filed a derivative action on behalf of Nutex Health Inc. in the United States District Court for the Southern District of Texas, captioned Michael Minckler, derivatively on behalf of Nutex Health Inc., nominal defendant v. Thomas T. Vo, et al; Case no. 4:25-cv-4330 containing nearly identical allegations.
The derivative actions arise from the same operative facts as alleged in the securities class action, and they seek orders permitting the plaintiffs to maintain the actions 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.
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 Company’s motion to dismiss the securities action described earlier. The Company is unable to predict the outcome of the litigation or estimate the potential financial impact, if any.
Purported Class Actions Related to the Cybersecurity Incident
As disclosed in our Current Report on Form 8-K filed with the SEC on August 24, 2026, as updated by the Form 8-K (Item 1.05) filed on August 31, 2026, we became aware of unauthorized activity involving certain data stored on our computer network. Following such disclosure, several putative class action complaints were filed against the Company in the United States District Court for the Southern District of Texas, Houston Division, on behalf of a putative class of all individuals whose personally identifiable information and/or protected health information was allegedly accessed and/or acquired by an unauthorized party in connection with the incident.
At this stage, the Company is unable to predict the outcome of the litigation or estimate the potential impact of the incident on the Company’s business strategy, operations, financial condition, results of operations or the trading price of the Company’s common stock.
Item 1A. Risk Factors
In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Risk Factors” included in our Form 10-K for the year ended December 31, 2025, the Quarterly Reports on Form 10-Q for the periods ended March 31, 2026 and June 30, 2026, and the risk factors and other
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cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
Our business and operations could suffer in the event of material information technology system failures, security incidents, or other deficiencies in cybersecurity.
We rely on on-site and cloud-based information technology systems, parts of which are managed by third-party vendors, to conduct our business. Despite our security measures, our systems have been and could in the future be subject to incidents or disruptions.
In the ordinary course of our business, we and our physician partners are required to collect and store sensitive data, including personally identifiable information, protected health information and proprietary business information relating to our patients, employees, providers and business. While we use third-party security services and seek to mitigate vendor risk through contractual measures, these measures cannot provide absolute protection, and potential failures by our vendors or subcontractors could expose us to service disruptions, unauthorized access to our information, liability and reputational damage.
Like many organizations, we have been, and may in the future be, the subject of cyber-attacks. As disclosed in our Current Reports on Form 8-K filed on August 24, 2026 and August 31, 2026 (Item 1.05), and our subsequent update in September 2026, an unauthorized third party accessed and exfiltrated certain data from our computer network, including patient, employee, provider, business and financial information.
Unauthorized access, breach or loss of personal information could disrupt our operations and result in legal claims, regulatory investigations and penalties, and/or liability under federal or state privacy laws. For example, several putative class actions have been filed against us in the U.S. District Court for the Southern District of Texas arising from the cybersecurity incident we first disclosed on August 24, 2026, alleging our failure to maintain adequate security measures. We could also be required to notify affected individuals, regulators, or State Attorneys General in order to comply with state and federal law. We could incur significant remediation costs and reputational harm. Our insurance may not be sufficient to cover all liability and does not address reputational damage. Like many organizations, we may be the subject of future cyber-attacks.
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 federal and state laws, regulations and other obligations govern the collection, use, security and processing of personal information, including health-related information, and apply to us, including HIPAA, the Texas Data Privacy and Security Act, the Texas Medical Records Privacy Act, Texas Senate Bill 1188 (governing electronic health records and AI use in healthcare), and SEC cybersecurity rules.
These requirements are constantly evolving and may conflict, and any actual or perceived failure by us or third parties acting on our behalf to comply, even if unfounded, could result in investigations, significant civil and criminal penalties, operational restrictions, additional costs and reputational harm, and adversely affect our business and results of operations.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Trading Arrangements
During the three months ended September 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted terminated
Item 6. Exhibits
| Exhibit No. | Description | ||||
| 31.1* | Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 31.2* | Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
| 32.1* | Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.) | ||||
| 32.2* | Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (This exhibit shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.) | ||||
| 101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
*Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 5, 2026.
| Nutex Health Inc. | ||||||||
| By: | /s/ Thomas T. Vo | |||||||
| Thomas T. Vo | ||||||||
| Chief Executive Officer and Chairman of the Board (principal executive officer) | ||||||||
| By: | /s/ Jon C. Bates | |||||||
| Jon C. Bates | ||||||||
| Chief Financial Officer (principal financial officer and principal accounting officer) | ||||||||
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