Nutex Health Inc

Previous wording

Nutex Health Inc. is a physician-led, healthcare services and operations company with 21 hospital facilities in nine states (hospital division), and a primary care-centric, risk-bearing population health management division. Our hospital division implements and operates different innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments (“HOPDs”). The population health management division owns and operates provider networks such as independent physician associations (“IPAs”) and offers a cloud-based proprietary technology platform to IPAs which aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers.

Current wording

Nutex Health Inc. is a physician-led, healthcare services and operations company with 22 hospital facilities in ten states (hospital division), and a primary care-centric, risk-bearing population health management division. Our hospital division implements and operates different innovative health care models, including micro-hospitals, specialty hospitals and hospital outpatient departments (“HOPDs”). The population health management division owns and operates provider networks such as independent physician associations (“IPAs”).

Previous wording

The hospital division includes our healthcare billing and collections organization and hospital entities. In addition, we have financial and operating relationships with multiple professional entities (the “Physician LLCs”) and real estate entities (the “Real Estate Entities”). The Physician LLCs employ the doctors who work in our hospitals. These entities are consolidated by the Company as VIEs because they do not have significant equity at risk, and we have historically provided support to the Physician LLCs in the event of cash shortages and received the benefit of their cash surpluses.

Current wording

The hospital division includes our healthcare hospital management platform, billing and collections organization and hospital entities. In addition, we have financial and operating relationships with multiple professional entities (the “Physician LLCs”) and real estate entities (the “Real Estate Entities”). The Physician LLCs employ the doctors who work in our hospitals. These entities are consolidated by the Company as VIEs because they do not have significant equity at risk, and we have historically provided support to the Physician LLCs in the event of cash shortages and received the benefit of their cash surpluses.

Previous wording

The Real Estate Entities own the land and hospital buildings which are leased to our hospital entities. The Real Estate Entities have mortgage loans payable to third parties which are collateralized by the land and buildings. We consolidate the Real Estate Entities as VIEs in instances where our hospital entities are guarantors or co-borrowers under their

Current wording

The Real Estate Entities own the land and hospital buildings which are leased to our hospital entities. The Real Estate Entities have mortgage loans payable to third parties which are collateralized by the land and buildings. We consolidate the Real Estate Entities as VIEs in instances where our hospital entities are guarantors or co-borrowers under their outstanding mortgage loans. Since the second quarter of 2022, we deconsolidated 18 Real Estate Entities after the third-party lenders released our guarantees of associated mortgage loans.

Previous wording

The population health management division recognizes revenue for capitation and management fees for services to IPAs and physician groups and for the licensing, training, and consulting related to our cloud-based proprietary technology. Capitation revenue consists primarily of capitated fees for medical services provided by physician-owned entities we consolidate as VIEs. Capitated arrangements made directly with various managed care providers including HMOs. Capitation revenues are typically prepaid monthly to us based on the number of enrollees selecting us as their healthcare provider. Capitation is a fixed payment amount per patient per unit of time paid in advance for the delivery of health care services, whereby the service providers are generally liable for excess medical costs. We receive management fees that are received based on gross capitation revenues of the IPAs or physician groups we manage.

Current wording

The population health management division recognizes revenue for capitation and management fees for services to IPAs and physician groups. Capitation revenue consists primarily of capitated fees for medical services provided by physician-owned entities we consolidate as VIEs. Capitated arrangements are made directly with various managed care providers including HMOs. Capitation revenues are typically prepaid monthly to us based on the number of enrollees selecting us as their healthcare provider. Capitation is a fixed payment amount per patient per unit of time paid in advance for the delivery of health care services, whereby the service providers are generally liable for excess medical costs. We receive management fees that are received based on gross capitation revenues of the IPAs or physician groups we manage.

Previous wording

*Our growth plans.*We plan to expand our operations by entering new market areas either through development of new hospitals, formation of new IPAs or by making acquisitions.

Current wording

*Our growth plans.*We plan to expand our operations by entering new market areas either through the development of new hospitals, formation of new IPAs or by making acquisitions.

Previous wording

We identify new market areas for hospitals based on the area’s need for access to emergency health services and growth expectations. We identify and partner with local physicians who will operate and manage the new location. When developing new hospitals, we have a turn-key process for location selection, real estate acquisition, design, ‎and development of the facility including staffing, training and operations. We extend our existing comprehensive suite of ‎centralized services to operating hospitals, including executive management, billing, collections, recruiting ‎and marketing.

Current wording

We identify new market areas for hospitals based on the area’s need for access to emergency health services and growth expectations. We identify and partner with local physicians who will operate and manage the new location in conjunction with our internal management team. When developing new hospitals, we have a turn-key process for location selection, real estate acquisition, design, ‎and development of the facility including staffing, training and operations. We extend our existing comprehensive suite of ‎centralized services to operating hospitals, including executive management, billing, collections, recruiting, human resources, legal ‎and marketing.

Previous wording

Independent Dispute Resolution. The provider and insurer each submits a proposed payment amount and ‎explanation to the arbitrator. The arbitrator must select one of the two proposed payment amounts taking into ‎account the “qualifying payment amount” and additional circumstances including among other things the level of training, outcomes ‎measurements of the facility, the acuity of the individual treated, and the case mix and scope of services of the ‎facility providing the service. The NSA prohibits the arbitrator from considering the provider’s usual and ‎customary charges for an item or service, or the amount the provider would have billed for the item or service in ‎the absence of the NSA. ‎

Current wording

Independent Dispute Resolution. The provider and insurer each submit a proposed payment amount and ‎explanation to the arbitrator. The arbitrator must select one of the two proposed payment amounts taking into ‎account the “qualifying payment amount” and additional circumstances including among other things the level of training, outcomes ‎measurements of the facility, the acuity of the individual treated, and the case mix and scope of services of the ‎facility providing the service. The NSA prohibits the arbitrator from considering the provider’s usual and ‎customary charges for an item or service, or the amount the provider would have billed for the item or service in ‎the absence of the NSA. ‎

Previous wording

The TMA on November 30, 2022 filed a lawsuit (“TMA III”) challenging how insurers are establishing the QPA under the final rules, alleging that the final rules allow insurers to include what is referred to in the healthcare industry as “ghost rates,” which are rates included in contracts with providers who do not actually provide the specified service and as a result are lower than rates a provider would have incentive to meaningfully negotiate, thus artificially lowering the QPA. On August 24, 2023, the U.S. District Court in the Eastern District of Texas in TMA III ruled to vacate several aspects of the regulations mandating the methodology for the QPA calculation. In particular, the court prohibited the inclusion of “ghost rates” as part of the QPA calculation and QPA calculations that are not based on the same or similar specialty. This is the fourth time the federal court has ruled in favor of the TMA effective nationwide. In its FAQs dated October 6, 2023, the Department of Labor states that the Department of Justice intends to appeal the court’s ruling. As of the date of this filing, the appeal process is still ongoing and a hearing date has not been set.

Current wording

The TMA on November 30, 2022 filed a lawsuit (“TMA III”) challenging how insurers are establishing the QPA under the final rules, alleging that the final rules allow insurers to include what is referred to in the healthcare industry as “ghost rates,” which are rates included in contracts with providers who do not actually provide the specified service and as a result are lower than rates a provider would have incentive to meaningfully negotiate, thus artificially lowering the QPA. On August 24, 2023, the U.S. District Court in the Eastern District of Texas in TMA III ruled to vacate several aspects of the regulations mandating the methodology for the QPA calculation. In particular, the court prohibited the inclusion of “ghost rates” as part of the QPA calculation and QPA calculations that are not based on the same or similar specialty. This is the fourth time the federal court has ruled in favor of the TMA effective nationwide. On October 20, 2023, the Department of Justice filed a notice of appeal against the court’s ruling. This appeal was submitted to the Fifth Circuit Court of Appeals.

Previous wording

end of 2022 to the end of 2023. In our experience, insurers often initially pay amounts lower than the QPA without regard for other information relevant to the claim. This requires us to make appeals using the IDR process. As of June 2024, we submitted 16,600 cases for IDR open negotiation whereas in 2023, we submitted 90,000 cases for IDR open negotiation. In the first half of 2024, there were delays in payor processing due to outages caused by the 2024 Change Healthcare ransomware attack. As the outages have been resolved, we expect IDR filings to increase in the third quarter of 2024. We anticipate approximately 60-70% of our claims to be submitted through the IDR process by year end. The IDR process, subsequent appeals and insurance payor delays require extensive administrative time and delays in collections. While we are working within the established processes for IDR, we have had varying successes at achieving collections at or higher than the established QPA.

Current wording

After the NSA became effective January 1, 2022, our average payment by insurers of adjudicated patient claims by date of service for emergency services had declined by approximately 26% at the end of 2022. At the end of 2023, that overall decline was reduced to 19% from January 1, 2022, thereby showing an incremental improvement of 7% from the end of 2022 to the end of 2023. In our experience, insurers often initially pay amounts lower than the QPA without regard for other information relevant to the claim. This requires us to make appeals using the IDR process. As of the end of September 2024, we submitted 89,960 cases for IDR open negotiation or arbitration, whereas in the full year of 2023, we submitted 98,000 cases for IDR open negotiation only. In the first half of 2024, there were delays in payor processing due to outages caused by the 2024 Change Healthcare ransomware attack. As the outages have been resolved, we expect IDR filings to increase in the fourth quarter of 2024. We anticipate approximately 60-70% of our claims to be submitted through the IDR process by year end. The IDR process, subsequent appeals and insurance payor delays require extensive administrative time and delays in collections. While we are working within the established processes for IDR, we have had varying successes at achieving collections at or higher than the established QPA.

Previous wording

Net loss attributable to Nutex Health Inc. decreased to $0.4 million, or a loss of $0.07 per share, for the three months ended June 30, 2024 from a net loss attributable to Nutex Health Inc. of $3.5 million, or a loss of $0.79 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue due to:

Current wording

Net loss attributable to Nutex Health Inc. increased to $8.8 million, or a loss of $1.72 per share, for the three months ended September 30, 2024 from a net loss attributable to Nutex Health Inc. of $5.5 million, or a loss of $1.25 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue and cost due to:

Previous wording

Adjusted EBITDA for the three months ended June 30, 2024 increased to $12.0 million from $4.0 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.

Current wording

Adjusted EBITDA for the three months ended September 30, 2024 increased to $13.5 million from $1.3 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.

Previous wording

*Hospital Division.*Our revenue for the three months ended June 30, 2024 totaled $67.6 million as compared to $51.6 million for the same period of 2023, an increase of $16.0 million or 31.0%. This increase was attributed to an increase in visits, an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 13.2% related to mature hospitals, which are hospitals that were opened by December 31, 2021.

Current wording

*Hospital Division.*Our revenue for the three months ended September 30, 2024 totaled $71.7 million as compared to $54.6 million for the same period of 2023, an increase of $17.1 million or 31.3%. This increase was attributed to an increase in visits, an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 20.7% related to mature hospitals, which are hospitals that were opened by December 31, 2021.

Previous wording

Total patient visits increased 28.0% during the three months ended June 30, 2024 as compared with the same period of 2023 including the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 10.3% related to mature hospitals, which are hospitals opened by December 31, 2021.

Current wording

Total patient visits increased 11.3% during the three months ended September 30, 2024 as compared with the same period of 2023 including the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 3.8% related to mature hospitals, which are hospitals opened by December 31, 2021.

Previous wording

The hospital division’s operating income was $22.8 million during the three months ended June 30, 2024, compared with an operating income of $9.1 million in the same period of 2023, an increase of 150.3%. Our revenue and operating income for the second quarter of 2024 was positively affected by the increase in visits and increase in rate paid by insurers discussed above.

Current wording

The hospital division’s operating income was $21.4 million during the three months ended September 30, 2024, compared with an operating income of $7.2 million in the same period of 2023, an increase of 197.2%. Our revenue and operating income for the third quarter of 2024 was positively affected by the increase in visits and increase in rate paid by insurers discussed above.

Previous wording

*Population Health Management Division.*Our total revenue for the six months ended June 30, 2024 was $15.9 million as compared with $14.3 million for the same period of 2023. The increase was due to higher capitation revenue earned.

Current wording

*Population Health Management Division.*Our total revenue for the three months ended September 30, 2024 was $7.1 million as compared with $8.1 million for the same period of 2023. The decrease in revenue was due to no revenue amounts attributed to Clinigence and Procare businesses as those businesses were sold in 2024.

Previous wording

The population health management division had $0.2 million of operating loss for the three months ended June 30, 2024 as compared with $0.5 million of operating income for the same period of 2023. 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.

Current wording

The population health management division had $0.5 million of operating income for the three months ended September 30, 2024 as compared with $0.2 million of operating loss for the same period of 2023. 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.

Previous wording

Corporate and other costs. Corporate and other costs in the three months ended June 30, 2024 totaled $17.3 million as compared to $10.0 million for the same period of 2023, an increase of 72.5%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to impairment of assets of $3.5 million and impairment of goodwill

Current wording

Corporate and other costs. Corporate and other costs in the three months ended September 30, 2024 totaled $12.3 million as compared to $7.9 million for the same period of 2023, an increase of 55.7%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to an increase in stock-based compensation of $2.0 million, and an increase in general and administrative expenses of $2.1 million, of which $0.8 million is due to an increase accrued wages and bonuses.

Previous wording

Interest expense. Interest expense was $5.1 million in the three months ended June 30, 2024 as compared with $4.8 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense, the opening of new facilities in 2023 and interest expense associated with the Unsecured Convertible Term Debt.

Current wording

Interest expense. Interest expense was $5.4 million in the three months ended September 30, 2024 as compared with $4.1 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense, the opening of new facilities in 2023 and interest expense associated with the Unsecured Convertible Term Debt.

Previous wording

Gain on warrant liability. Gain on warrant liability was $3.1 million in the three months ended June 30, 2024 is the remeasurement of the warrant liability required at each reporting period and is influenced by changes in our common stock market price.

Current wording

Loss on warrant liability. Loss on warrant liability was $6.7 million in the three months ended September 30, 2024 is the remeasurement of the warrant liability required at each reporting period and for every warrant exercise. The loss is influenced by changes in our common stock market price.

Previous wording

Our effective tax rate for the three months ended June 30, 2024 was approximately 22.9%. 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.

Current wording

Our effective tax rate for the three months ended September 30, 2024 was approximately (177.7)%. 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.

Previous wording

Net loss attributable to Nutex Health Inc. decreased to $0.7 million, or a loss of $0.15 per share, for the six months ended June 30, 2024 from a net loss attributable to Nutex Health Inc. of $8.6 million, or a loss of $1.98 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue due to:

Current wording

Net loss attributable to Nutex Health Inc. decreased to $9.5 million, or a loss of $1.91 per share, for the nine months ended September 30, 2024 from a net loss attributable to Nutex Health Inc. of $14.2 million, or a loss of $3.23 per share, for the same period of 2023. Our 2024 results were principally affected by higher revenue and cost due to:

Previous wording

Adjusted EBITDA for the six months ended June 30, 2024 increased to $16.6 million from $6.4 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.

Current wording

Adjusted EBITDA for the nine months ended September 30, 2024 increased to $30.1 million from $7.7 million for the comparable period of 2023. Refer to Non-GAAP Financial Measures discussed below for a definition and reconciliation of Adjusted EBITDA. The items affecting revenue contributed significantly to the increase in Adjusted EBITDA in the 2024 period.

Previous wording

*Hospital Division.*Our revenue for the six months ended June 30, 2024 totaled $127.6 million as compared to $100.9 million for the same period of 2023, an increase of $26.7 million or 26.5%. This increase was attributed to an increase in visits, an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR process and increased utilization of higher paid services such as increased observation and in-patient stays. Of this revenue increase, 9.7% related to mature hospitals, which are hospitals that were opened by December 31, 2021.

Current wording

*Hospital Division.*Our revenue for the nine months ended September 30, 2024 totaled $199.4 million as compared to $155.5 million for the same period of 2023, an increase of $43.9 million or 28.2%. This increase was attributed to an increase in visits, and an increase in revenue per visit due to success in efforts to obtain higher rates through the IDR

Previous wording

Total patient visits increased 24.6% during the six months ended June 30, 2024 as compared with the same period of 2023 due mostly to the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 9.7% related to mature hospitals, which are hospitals opened by December 31, 2021.

Current wording

Total patient visits increased 19.6% during the nine months ended September 30, 2024 as compared with the same period of 2023 due mostly to the opening of four facilities throughout 2023 which are fully operating in 2024. Of this visit increase, 7.7% related to mature hospitals, which are hospitals opened by December 31, 2021.

Previous wording

The hospital division’s operating income was $33.3 million during the six months ended June 30, 2024, compared with an operating income of $13.9 million in the same period of 2023, an increase of 139.6%. Our revenue and operating income for the second quarter of 2024 was positively affected by the increase in visits and revenue per visit discussed above.

Current wording

The hospital division’s operating income was $54.7 million during the nine months ended September 30, 2024, compared with an operating income of $21.1 million in the same period of 2023, an increase of 159.2%. Our revenue and operating income for the third quarter of 2024 was positively affected by the increase in visits and revenue per visit discussed above.

Previous wording

*Population Health Management Division.*Our total revenue for the three months ended June 30, 2024 was $8.5 million as compared with $7.3 million for the same period of 2023. The increase was due to higher capitation revenue earned.

Current wording

*Population Health Management Division.*Our total revenue for the nine months ended September 30, 2024 was $23.0 million as compared with $22.5 million for the same period of 2023. The increase was due to higher capitation revenue earned.

Previous wording

The population health management division had $0.5 million of operating loss for the six months ended June 30, 2024 as compared with $0.6 million of operating income for the same period of 2023. 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.

Current wording

The population health management division had $0.1 million of operating loss for the nine months ended September 30, 2024 as compared with $0.4 million of operating income for the same period of 2023. 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.

Previous wording

Corporate and other costs. Corporate and other costs in the six months ended June 30, 2024 was $26.0 million as compared to $19.3 million for the same period of 2023, an increase of 34.5%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to impairment of assets of $3.5 million and impairment of goodwill of $3.2 million. These impairments are related to the sale of Procare and the expected sale of Clinigence Health.

Current wording

Corporate and other costs. Corporate and other costs in the nine months ended September 30, 2024 was $38.2 million as compared to $27.2 million for the same period of 2023, an increase of 40.4%. General and administrative costs include our executive management, accounting, human resources, corporate technology, insurance and professional fees. The increase in corporate and other costs is primarily due to impairment of assets of $3.9 million, impairment of goodwill of $3.2 million, and accrued wages and bonuses of $1.3 million. These impairments are related to the sale of Procare and Clinigence Health.

Previous wording

Interest expense. Interest expense was $9.5 million in the six months ended June 30, 2024 as compared with $8.0 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense, the opening of new facilities and interest expense associated with the Unsecured Convertible Term Debt.

Current wording

Interest expense. Interest expense was $14.9 million in the nine months ended September 30, 2024 as compared with $12.1 million for the same period of 2023. The increase in interest expense for the 2024 period is principally due to discount amortization expense, the opening of new facilities and interest expense associated with the Unsecured Convertible Term Debt.

Previous wording

Gain on warrant liability. Gain on warrant liability was $5.7 million in the six months ended June 30, 2024 is the remeasurement of the warrant liability required at each reporting period and is influenced by changes in our common stock market price.

Current wording

Loss on warrant liability. Loss on warrant liability was $1.1 million in the nine months ended September 30, 2024 from the remeasurement of the warrant liability required at every warrant exercise and each reporting period. The remeasurement is influenced by changes in our common stock market price.

Previous wording

Our effective tax rate for the three months ended June 30, 2024 was approximately 34.2%. 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.

Current wording

Our effective tax rate for the nine months ended September 30, 2024 was approximately 501.2%. 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.

Previous wording

As of June 30, 2024, we had $40.8 million of cash and equivalents, compared to $22.0 million of cash and equivalents at December 31, 2023.

Current wording

As of September 30, 2024, we had $46.9 million of cash and equivalents, compared to $22.0 million of cash and equivalents at December 31, 2023.

Previous wording

Significant sources and uses of cash during the first six months of 2024.

Current wording

Significant sources and uses of cash during the first nine months of 2024.

Previous wording

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 with favorable economic terms or at all. We also believe that our existing cash, cash equivalents, and marketable securities, and available borrowing capacity, will be sufficient to meet our anticipated cash needs requirements for operations and growth objectives ‎for at least the next twelve months. If the assumptions underlying our business plan regarding future

Current wording

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 with favorable economic terms or at all. We also believe that our existing cash, cash equivalents, and marketable securities, and available borrowing capacity, will be sufficient to meet our anticipated cash needs requirements for operations and

Previous wording

revenue and expenses change or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or debt securities.

Current wording

growth objectives ‎for at least the next twelve months. If the assumptions underlying our business plan regarding future revenue and expenses change or if unexpected opportunities or needs arise, we may seek to raise additional cash by selling equity or debt securities.

Previous wording

*Indebtedness.*The Company’s indebtedness at June 30, 2024 is presented in Item I, “Financial Statements – Note 8 – Debt” and our lease obligations are presented in Item I, “Financial Statements—Note 9 – Leases.”

Current wording

*Indebtedness.*As discussed above, we enter into debt arrangements, classified as long-term debt on our financial statements, to address equipment purchases and working capital purposes. We also enter into lease agreements for our hospital facilities, classified as lease liabilities on our financial statements. The Company’s indebtedness as of September 30, 2024 is presented in Item I, “Financial Statements – Note 8 – Debt” and our lease obligations are presented in Item I, “Financial Statements—Note 9 – Leases.”

Previous wording

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 consolidated financial statements and accompanying notes. Note 1 to the Consolidated Financial Statements included in the Form 10-K for the year ended December 31, 2023 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, 2023. Since December 31, 2023, there

Current wording

December 31, 2023 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, 2023. Since December 31, 2023, there have been no material changes in the Company’s accounting policies that are impacted by judgments, assumptions and estimates.