Nutex Health Inc.: Form 10-Q for the period ended Mar 31, 2026

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 27 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 March 31, 2026, we employed approximately 1,005 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 significant equity at risk to finance their activities independently. The Company is considered the primary beneficiary of these entities because (i) it has the power to direct the activities that most significantly affect their economic performance through its contractual and operational oversight, and (ii) it has the obligation to absorb losses and the right to receive benefits that could be significant, as evidenced by the Company’s historical practice of providing financial support during periods of cash shortfall and receiving the benefit of services. The Company has no direct or indirect ownership interest in the Physician LLCs. 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 March 31, 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.

The following tables present the allocation of the transaction price with the patient between the primary patient classification of insurance coverage:

Arbitration process

Federal Rules Applicable to Out-of-Network Billing

Congress enacted the No Surprises Act (“NSA”) effective January 1, 2022, to protect patients from surprise medical bills incurred when they receive emergency medical services from out-of-network healthcare providers, 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 (“IDR”) process for billing disputes between providers and insurers. The patient is not involved in this process, and payment is issued directly to the provider. The IDR process safeguards providers by promoting fair reimbursement from payors, helping ensure their continued ability to deliver care.

• Independent Dispute Resolution. Under the IDR provisions, Nutex Health and the insurer first must try to agree on a price for the services. If negotiations fail, either party has four days to initiate IDR proceedings. If the parties pursue IDR, either the parties or the Department of Health and Human Services (“HHS”) selects a certified independent dispute resolution entity (“CIDRE”) to determine the final payment amount.
• Certified Independent Dispute Resolution Entity. The CIDRE has the sole discretion to determine both the eligibility of claims submitted for the IDR process, 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 insurer’s qualifying payment amount (“QPA”), defined as the “median of the contracted rates recognized by the plan or issuer . . . for the same or a similar item or service” offered in the same insurance market and geographic area. Among the other factors to be considered are the complexity or acuity of the case, the doctor’s expertise, and the scope of services provided at the facility. See also below “Legal Challenges to HHS Final Rule – Federal Court removes restrictions imposed on arbitrators in 2022 HHS final Rules (TMA II).”
• Arbitration Awards Are Binding. In the absence of a fraudulent claim or evidence of a misrepresentation of facts to the CIDRE, the IDR award is binding upon the parties involved and payment of the award must be made not later than 30 days after the date on which the payment determination is made.
• Patients are not involved in open negotiations or the IDR process, and payors must issue any IDR award payments directly to the provider.
• The NSA empowers HHS to assess penalties against insurers for failure to comply with the NSA, including timely payment of CIDRE awards. However, as illustrated by the pending legislation discussed below under “Future Expectations,” significant enforcement gaps remain in the current law.
• 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 and providers by alleging fraudulent schemes with respect to eligibility determinations, among other things. Recently, United States District Courts in each of California and Florida, granted the IDR vendor’s or provider’s, as applicable, motions

to dismiss against the insurers, primarily on the grounds that IDR decisions are not reviewable by courts. In addition, citing the California District Court’s dismissal, the United States District Court for the Eastern District of Pennsylvania granted the provider’s motion to dismiss against the insurer, declining to bypass Congress’ intent in the NSA, which limits judicial review. The dismissal rulings are subject to appeal.

• 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 arbitration cases closed prior to June 6, 2025 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 16 and updated the federal submission portal with respect to, among other things, service-code modifier fields, duplicate-dispute validation, and resubmission rules.
• Legal challenges to HHS Final Rule. The final rule has been the subject of multiple legal challenges. Beginning in September 2022, the Texas Medical Association (“TMA”) filed several actions in federal court in Texas, seeking, among other things, to invalidate the IDR related provisions of the final rule.
• Federal Court vacates 2021 HHS interim final rules to ensure fair and accurate rates (TMA III). On November 30, 2022, the TMA filed a lawsuit challenging the methodology of the federal regulator’s calculation of the QPA. The interim final rules allowed consideration of all negotiated rates, including those provided in contracts with providers who do not actually provide the particular service (ghost rates). On August 24, 2023, the federal district court vacated several aspects of the regulations mandating the methodology for the QPA calculation. On October 30, 2024, the United States Court of Appeals for the Fifth Circuit (“Fifth Circuit”) reversed the district court’s vacatur of the QPA calculation methodology. However, on December 17, 2024, the Fifth Circuit ordered that the mandate be withheld and on May 30, 2025 vacated the previous opinion and held an en banc oral argument on September 24, 2025. No final en banc opinion has been issued. We cannot predict how such final opinion will affect the QPA calculation or the opinion’s impact on out-of-network payments awarded in the IDR process.
• Federal Court removes restrictions imposed on arbitrators in 2022 HHS final rules (TMA II).

On August 2, 2024, the Fifth Circuit upheld a ruling by district court disallowing provisions of the federal rules established under the NSA which would have required arbitrators (i) to prioritize the insurer established QPA over any of the other factors listed below and (ii) to justify in writing the arbiter’s reliance on any factors beyond the QPA. The Fifth Circuit held that the NSA requires that the arbitrator must consider several factors of equal weight in determining the out-of-network rate. These factors include:

• The qualifying payment amount, which Congress intended as the median rate the insurer would have paid for comparable services in the same geographic area if provided by an in-network provider or facility;
• 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 days 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. If the No Surprises Enforcement Act is passed and signed into law, payors would face automatic financial penalties for late or non- payment. See “Future Expectations” below.

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 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 areas:

• Documentation Submission. Based on the information and data we provide to HaloMD, using a proprietary data driven process, HaloMD submits the required documentation to the CIDRE through the federal portal.
• Eligibility Determination. It is the CIDRE who determines the eligibility of the claims submitted to arbitration based on the information provided through the federal portal. 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 arbitration data published by the Center for Medicare and Medicaid Services (CMS) as of January 21, 2026, CIDREs are making significant progress in improving the overall Federal IDR process:

• Between January 1, 2025, and June 30, 2025, disputing parties initiated 1,186,812 disputes through the Federal IDR portal, 39% more than the last six months of 2024 (853,374 disputes).
• Providers or their representatives initiated the majority of disputes (81%) in the first six months of 2025.
• The top three initiating parties (HaloMD, Team Health and SCP Health), who represent thousands of clinicians across multiple states, accounted for approximately 44% of all disputes initiated in the first six months of 2025.
• From January 1 through June 30, 2025, providers, facilities or air ambulance providers, prevailed in approximately 88% of payment determinations, as compared to 85% in the last six months of 2024.
• 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.

Overall, between April 15, 2022 and March 31, 2026, 5,729,954 disputes were initiated, with 985,659 disputes (or approximately 17% of disputes submitted) found ineligible.

Future Expectations. We expect the federal arbitration process for out-of-network services will continue to evolve. On July 23, 2025, the No Surprises Enforcement Act was introduced both in the House and in the Senate and referred to committee, primarily to mandate financial penalties to be imposed on insurers for late payment or non-payment of IDR awards. We cannot predict whether this legislation will be approved and signed into law. Future federal court decisions and regulatory changes may adversely affect our ability to collect the revenue for our services that we believe is fair and reasonable.

Cost of arbitration. There is a significant cost to enter the arbitration process. The arbitration process includes expenses associated with third party providers, including IDR entities, which typically collect fees at the beginning of the process, before the claim award amounts are decided by arbitrators. According to the CMS, as of July 23, 2025, the nonrefundable administrative fee was $115 per party per dispute and the certified IDR entity fee ranged from $375 to $800 for single determinations and $75 to $1,150 for batched determinations. The total cost of arbitration for all Nutex hospital and professional services for the three months ended March 31, 2026 and 2025 was $46.1 million and $26.3 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 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 caused to be presented, a false or fraudulent request for payment from the federal government, or from making a false statement or using a false record to have a claim approved. 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 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.

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
• A growing focus on healthcare spending by consumers, employers and insurers, who are actively seeking lower-cost care solutions;
• A shift in patient volumes from inpatient to outpatient settings due to technological advancements and demand for care that is more convenient, affordable and accessible;
• The growing aged population, which requires greater chronic disease management and higher-acuity treatment; and
• Ongoing consolidation of providers and insurers across the healthcare industry.

The healthcare industry, particularly emergency care hospitals, continues to be subject to ongoing regulatory uncertainty. Changes in federal or state healthcare laws, regulations, funding policies or reimbursement practices, especially those involving reductions to government payment rates or limitations on what providers may charge, could significantly impact future revenue and operations. For example, the No Surprises Act prohibits providers from charging patients an amount beyond the in-network cost sharing amount for services rendered by out-of-network providers, subject to limited exceptions. For services for which balance billing is prohibited, the No Surprises Act includes provisions that may limit the amounts received by out-of-network providers from health plans. Any reduction in the rates that we can charge or the amounts we can receive for our services will reduce our total revenue and our operating margins.

Recent Developments

Share Repurchase Programs. On March 4, 2026, the Board authorized a stock repurchase program of up to $25.0 million of the Company’s common stock over the subsequent six months pending compliance with the Company's current reporting obligations. The purpose of the share repurchase is to increase shareholder value and offset dilution from the issuance of additional shares in connection with the Merger (Refer to “Item 1A. Risk Factors" for additional share information).

Pursuant to each stock repurchase program the Company may repurchase, from time to time, up to an aggregate of $25.0 million of its outstanding shares of common stock, exclusive of any fees, commissions or other expenses related to such repurchases. The stock repurchase program permits the Company to repurchase shares of common stock at any time or from time to time at management’s discretion in open market transactions made in accordance with the provisions of Rule 10b-18 and/or Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, privately negotiated transactions or by other means in accordance with applicable securities laws.

The timing of any repurchases and the number of shares repurchased are subject to the discretion of the Company and may be affected by various factors, including general market and economic conditions, the market price of the Company’s common stock, the Company’s earnings, financial condition, capital requirements and levels of indebtedness, legal requirements, and other factors that management may deem relevant. The share repurchase program authorization does not obligate the Company to acquire any shares of its common stock and may be amended, suspended or discontinued at any time.

Settlement Agreements with certain Former Doctor Owners of Under Construction Hospitals. During and subsequent to the three months ended March 31, 2026, the Company entered into agreements with certain former doctor owners to settle existing disputes and, in connection with the settlements, to 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 months ended March 31, 2026, the Company retired 60,516 shares of common stock at an aggregate value of $9.7 million. Subsequent to the three months ended March 31, 2026, the Company retired an additional 72,350 shares of common stock at an aggregate value of $13.0 million.

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):

(1) See reconciliation of net loss attributable to Nutex Health Inc. to Adjusted EBITDA under Non-GAAP Financial Measures.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Net income attributable to Nutex Health Inc. was $46.8 million, or income of $6.52 per diluted share, for the three months ended March 31, 2026 compared to net income attributable to Nutex Health Inc. of $21.2 million, or income of $3.33 per share, for the same period 2025. Our 2026 results were principally affected by:

• Higher patient visits, which increased by 3.1% during the three months ended March 31, 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 0.6% versus prior year.
• Increased cash collections and billable visits partially offset by a decrease in net revenue per visit.
• Lower stock-based compensation to under construction and ramping hospitals of $(3.9) million for the three months ended March 31, 2026, a decrease of $31.6 million compared to the same period last year.
• Lower income tax expense of $13.8 million for the three months ended March 31, 2026 compared to $20.4 million for the three months ended March 31, 2025, a decrease of $6.6 million.

Adjusted EBITDA for the three months ended March 31, 2026 decreased to $57.6 million from $72.8 million for the comparable period 2025. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of net income (loss)

attributable to Nutex Health Inc. to Adjusted EBITDA. Stock-based compensation contributed significantly to the decrease in Adjusted EBITDA in the 2026 period.

A discussion of our segment results is included below.

Hospital Division. Our revenue for the three months ended March 31, 2026 totaled $207.6 million as compared to $203.9 million for the same period in 2025, an increase of $3.6 million or 1.8%. This increase was attributed to an increase in cash collections and billable visits, slightly offset by a decrease in net revenue per visit. Revenue related to same hospitals increased by 0.2%.

Total patient visits increased 3.1% during the three months ended March 31, 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 $89.6 million during the three months ended March 31, 2026, compared with $117.9 million in the same period in 2025, a decrease of 24.0%. The decrease is primarily driven by the total cost of arbitration, which for all Nutex hospital and professional services for the three months ended March 31, 2026 and 2025 was $46.1 million and $26.3 million, respectively. This decrease was due to less settlements and open disputes in the prior period as the Company was increasing its IDR submissions in the first quarter of 2025.

Population Health Management Division. Our total revenue for the three months ended March 31, 2026 was $8.9 million as compared with $7.8 million for the same period in 2025.

The population health management division had $2.4 million of loss before income taxes for the three months ended March 31, 2026 as compared with $0.6 million of loss 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.

Real Estate Division. This division reports the operations of real estate entities, which own the land and buildings for certain hospital entities and for the Company's headquarters.

Revenue and operating expenses of consolidated real estate entities are not significant since the extent of these entities’ operations is to own facilities leased to the Company which are financed by a combination of contributed equity by the Company, related parties and third-party mortgage indebtedness. Such leases are typically on a triple net basis where our hospital division is responsible for all operating costs, repairs and taxes on the facilities. Finance lease income is recognized outside of segment operating income as other income by the real estate entities. However, these amounts are largely eliminated in the consolidation of these entities into our financial statements. As lessor, operating lease income from third-party lessees is not significant and presented with hospital division revenue.

As of March 31, 2026, the Company consolidates two Real Estate VIEs. We expect that hospitals we open in the future may be leased from new real estate entities which may be owned in whole or part by the Company or related parties. If owned by related parties, third-party lenders to these entities may require that we provide a guarantee or become co-borrowers under mortgage indebtedness and financings for such facilities. In such instances, we may be required to consolidate these new real estate entities in our financial statements as VIEs.

Corporate and other costs. Corporate and other costs in the three months ended March 31, 2026 totaled $10.5 million as compared to $37.7 million for the same period in 2025, a decrease of 72.2%. 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 $31.6 million related to obligations for under-construction and ramping hospitals, and an increase in general and administrative expenses of $4.3 million.

Nonoperating items

Interest expense. Interest expense was $4.7 million for the three months ended March 31, 2026 as compared with $6.1 million for the same period of 2024. The decrease in interest expense 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.

Liquidity and Capital Resources

As of March 31, 2026, we had $207.3 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 three months of 2026.

Sources of cash:

• Cash from operating activities was $75.5 million, primarily driven by significantly higher net income largely attributable to favorable developments in the arbitration process, which contributed to higher revenue and cash collections.

Uses of cash:

• Stock repurchases, cash payments in settlement of earn out obligations, and retirements of $31.7 million.
• Distributions, net of contributions, to noncontrolling interests totaled $14.1 million
• Repayments of lines of credit and notes payable $2.1 million.
• Repayments of finance leases totaled $1.6 million.
• Acquisitions of property and equipment totaled $1.2 million.

Future sources and uses of cash. Our operating activities are financed with cash on hand which is generated from revenues. Most of our hospital facilities are leased from various lessors including related parties. These leases are presented in our unaudited condensed consolidated balance sheets unless the lease is from a consolidated Real Estate Entity. Our growth plans include the development of new hospital locations. We expect that in many of these locations we will lease facilities from newly established entities partially owned by related parties.

We routinely enter into equipment lease agreements to procure new or replacement equipment and may also finance these purchases with term debt. We have smaller lines of credits available for working capital purposes and are presently working to supplement or replace these with larger financing commitments. These larger financing commitments are subject to market conditions and we may not be able to obtain such larger financing commitments at favorable economic terms or at all.

Indebtedness. The Company’s indebtedness as of March 31, 2026 is presented in Item I, “Financial Statements – Note 8 – Debt” and our lease obligations are presented in Item I, “Financial Statements—Note 9 – Leases.”

We have entered into private debt arrangements with banking institutions for the purchase of equipment and to provide working capital and liquidity through cash and lines of credit. Unless otherwise delineated above, these debt arrangements are obligations of Nutex and/or its wholly-owned subsidiaries. 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.

At March 31, 2026, the Company was not subject to any financial covenants under its outstanding debt arrangements and we had remaining availability of $3.4 million under outstanding lines of credit.

Off-Balance Sheet Arrangements

As of March 31, 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 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, income taxes, depreciation and amortization. Interest expense 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 net interest expense, 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):

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 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.

With respect to the three and three months ended March 31, 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.

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 March 31, 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 ended March 31, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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 and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Our obligation to issue additional shares of our common stock to former doctor owners of under construction hospitals may cause significant dilution of the voting power of our current stockholders.

We may be required to issue the additional shares of our common stock to former doctor owners of hospitals that were under construction and non-operational prior to our April 1, 2022 merger. Such former owners, including Dr. Vo, transferred their hospital interests to Nutex Health Holdco LLC in connection with the merger. The aggregate number of additional shares we may be required to issue could significantly dilute the voting power of our existing stockholders. Any such additional shares, including the shares issued to Dr. Vo, will be subject to a 100% lock up for six months, with 66 2/3% of these shares locked up for one year, and, with respect to the remaining 33 1/3%, the lock up expiring 18 months after issuance, which may be waived or amended at the discretion of the Company.

As approved by the stockholders on April 1, 2022, the number of additional shares issuable is equal to (a)(i) the trailing twelve months of earnings before interest, taxes, depreciation and amortization, as determined at the end of each such hospital’s initial 24-month operation period multiplied by (ii) 10; minus (iii) the aggregate amount of the former doctor owners’ capital contribution; minus (iv) such former doctor owners’ pro rata share of the aggregate debt, with the resulting value divided by (b) the greater of (i) the price of the common stock at the end of the operational period or (ii) $420.00 (representing $2.80 as adjusted for the 2024 reverse stock splits and subject to adjustment for future stock dividends, combinations, splits, recapitalizations and the like).

With respect to eight hospitals, the initial 24-month operational periods expired on or prior to March 31, 2026. Based on the formula described above, and assuming an aggregate 1,374,614 shares issued, the earn out shares represent approximately 19.8% of our issued and outstanding shares as of March 31, 2026 (including shares subject to issuance pursuant to the earn out and accrued as of such date).

With respect to two additional hospitals with an initial 24-month operational period expiring on or prior to December 31, 2026, we estimate, based on current expectations, to issue approximately 47,100 additional shares, or 0.7% of our issued and outstanding shares as of March 31, 2026 (including shares subject to issuance pursuant to the earn out and accrued as of such date). See Part I - Item 1 – Notes to Condensed Consolidated Financial Statements (unaudited) – Note 11. This estimated number of shares is calculated on a pro forma basis based on September 30, 2026 operating results and trading price. Since we cannot predict future operating results and trading prices, the actual number of additional shares issued may differ significantly from our estimate.

Former owners of certain under construction hospitals have disputed the number of additional shares issuable to them in accordance with the formula agreed upon at the time of the merger (as described above) and assert, among other things, that the number of shares in the calculation should not be adjusted for the 2024 reverse stock splits. We disagree with these allegations but cannot predict the outcome of these disputes. (Refer to Item 1. -- Legal Proceedings.)