Nutex Health Inc.

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.

The Implementation of the Federal Independent Dispute Resolution process has, and may continue in the future, result in significant volatility in our quarterly financial results and materially adversely affect the trading price of our common stock.

We recognize revenue at the time of service based on the estimated transaction price we expect to receive from third-party payers. We apply Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606 –Revenue from Contracts with Customers in making estimates of our earned revenue and accounts receivable at each reporting date. For out-of-network services subject to the No Surprises Act, our methodology incorporates, among other things, historical arbitration outcomes, payor behavior, and expected resolution timing in determining the expected transaction price for applicable claims. This estimation process is highly subjective. We regularly conduct a comparative analysis of our actual results to our previously determined transaction results in order to evaluate whether adjustments are required based on newly available information. When the expected transaction price is adjusted, the cumulative effect of that adjustment is reflected in revenue in the period in which the adjustment is identified, including its impact on accounts receivable balances recognized in prior periods, and can result in significant fluctuations in recognized revenue from period to period.

Due to the ongoing operational volatility of the IDR framework and the implementation of these portal modifications, there is inherent uncertainty regarding the ultimate timing and impact of these updates on our financial results. Revenue associated with these estimates is recognized as information becomes available during the normal course of the claims adjudication process, which may result in fluctuations in patient revenue between the period services are rendered and the period related adjustments are recorded. As a result, we may experience significant volatility in our quarterly financial results, which may have a materially adverse effect on the trading price of our common stock.

Certain former doctor owners dispute the number of shares issuable to them under the earn out formula approved in connection with the merger.

We are 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.

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).

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. For example, the former doctor owners of ABQ Hospital, LLC dispute the Company’ calculation that an aggregate of 216,039 shares are to be issued to them. Including these shares, an aggregate of approximately 256,005 shares computed by the Company under the formula described above is still under dispute. We disagree with these allegations, but cannot predict the outcome of these disputes, including the amounts of cash settlement, if any, and the impact on our financial condition.(Refer to Item 1. -- Legal Proceedings).