Nutex Health Inc.

Current report

Our business and operations could suffer in the event of material information technology system failures, security incidents, or other deficiencies in cybersecurity.

Current report

We rely on on-site and cloud-based information technology systems, parts of which are managed by third-party vendors, to conduct our business. Despite our security measures, our systems have been and could in the future be subject to incidents or disruptions.

Current report

In the ordinary course of our business, we and our physician partners are required to collect and store sensitive data, including personally identifiable information, protected health information and proprietary business information relating to our patients, employees, providers and business. While we use third-party security services and seek to mitigate vendor risk through contractual measures, these measures cannot provide absolute protection, and potential failures by our vendors or subcontractors could expose us to service disruptions, unauthorized access to our information, liability and reputational damage.

Current report

Like many organizations, we have been, and may in the future be, the subject of cyber-attacks. As disclosed in our Current Reports on Form 8-K filed on August 24, 2026 and August 31, 2026 (Item 1.05), and our subsequent update in September 2026, an unauthorized third party accessed and exfiltrated certain data from our computer network, including patient, employee, provider, business and financial information.

Current report

Unauthorized access, breach or loss of personal information could disrupt our operations and result in legal claims, regulatory investigations and penalties, and/or liability under federal or state privacy laws. For example, several putative class actions have been filed against us in the U.S. District Court for the Southern District of Texas arising from the cybersecurity incident we first disclosed on August 24, 2026, alleging our failure to maintain adequate security measures. We could also be required to notify affected individuals, regulators, or State Attorneys General in order to comply with state and federal law. We could incur significant remediation costs and reputational harm. Our insurance may not be sufficient to cover all liability and does not address reputational damage. Like many organizations, we may be the subject of future cyber-attacks.

Current report

Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements, including contractual obligations, could adversely affect our business, financial condition and results of operations.

Current report

Numerous federal and state laws, regulations and other obligations govern the collection, use, security and processing of personal information, including health-related information, and apply to us, including HIPAA, the Texas Data Privacy and Security Act, the Texas Medical Records Privacy Act, Texas Senate Bill 1188 (governing electronic health records and AI use in healthcare), and SEC cybersecurity rules.

Current report

These requirements are constantly evolving and may conflict, and any actual or perceived failure by us or third parties acting on our behalf to comply, even if unfounded, could result in investigations, significant civil and criminal penalties, operational restrictions, additional costs and reputational harm, and adversely affect our business and results of operations.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

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

Previous report

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.

Previous report

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).

Previous report

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).