NUTEX HEALTH ANNOUNCES YORKVILLE PAYOFF AND STREAMLINED STRATEGIC PLAN
HOUSTON, Jan. 30, 2024 /PRNewswire/ -- Nutex Health Inc. ("Nutex Health" or the "Company") (NASDAQ: NUTX), a physician-led, technology-enabled integrated healthcare delivery system comprised of 20 state-of-the-art micro hospitals in 8 states and primary care-centric, risk-bearing physician networks, today announces full payoff of Yorkville Advisors and a new streamlined strategic plan.
1. Nutex has paid off in full the remaining outstanding balance of $2.7
million under the Pre-Paid Advance Agreement, in lieu of future stock
issuances at the discretion of Yorkville Advisors. The company believes
that this will mitigate the recent downward pressure on its share price
and strengthen Nutex Health's financial position.
2. In line with our commitment to the continuous optimization of our
portfolio companies, the company has made the strategic decision to close
two underperforming hospitals: SE Texas ER & Hospital in Humble
(Houston), Texas, and Coppell ER in Coppell (Dallas), Texas. The combined
annual cash flow savings from closing both facilities is expected to be
approximately $5 million. This strategic move ensures a more focused
allocation of resources and underscores our dedication to financial
sustainability and profitability.
3. A targeted reduction in annual cash operating expenses. Management is in
the process of implementing multiple initiatives which we believe will
reduce cash operating expenses in 2024 and beyond, with an intense focus
on profitability. The full effects of the new operating cost structure
are expected to be in place by the third quarter of fiscal year 2024.
Additionally, the Company announces the following developments:
1. On January 25, 2004, Nutex Health closed on an offering of $10 million of
shares of common stock and warrants with a health care focused
institutional investor. This capital infusion will play a role in
financing the operations of several of the new micro hospitals.
2. Effective January 1, 2024, in consultation with the Departments of Labor
and Health and Human Services, the Internal Revenue Service (IRS)
announced the annual increase that health plans must apply to the
calculation of the qualifying payment amount (QPA) for insurance
reimbursements to account for inflation from 2023 to 2024 (Notice
2024-1). Under the No Surprises Act, QPAs are calculated based on median
contracted rates for the same or similar services as they existed in
2019. Treasury Regulations direct the IRS to anchor the annual
inflationary update in the Consumer Price Index for All Urban Consumers
(CPI-U). In Notice 2024-1, the IRS directs health plans to update QPAs
in 2024 by an increase of 5.4% over 2023 QPAs. Alternatively, to update
2023 rates, health plans may return to the original 2019 calculation and
apply a cumulative update factor to account for the IRS inflationary
updates from 2019 to 2024. Under that approach, the cumulative update
that must be applied to 2019 base year rates is 20.9%.
3. Despite recent macroeconomic challenges, Nutex Health remains steadfast
in its commitment to growth. The company is on track to opening five new
micro hospitals in 2024, strategically located in growth markets
including Green Bay, WI, Milwaukee, WI, Tampa, FL, San Antonio, TX, and
Coeur d'Alene, ID.
"Nutex Health firmly believes that micro hospitals are the future of healthcare. For 2024, our goals are to increase revenue through both patient volumes as well as reimbursement. Additionally, we plan to tackle the ever-increasing cost of delivering quality medical care head-on as part of our strategic plan. Our goals are to increase profitability in 2024 without any compromise on our usual excellent patient care and satisfaction," stated Tom Vo, M.D., MBA, Chairman and Chief Executive Officer of Nutex Health.
About Nutex Health Inc.
Headquartered in Houston, Texas and founded in 2011, Nutex Health Inc. (NASDAQ: NUTX) is a healthcare management and operations company with two divisions: a Hospital Division and a Population Health Management Division.
The Hospital Division owns, develops and operates innovative health care models, including micro-hospitals, specialty hospitals, and hospital outpatient departments (HOPDs). This division owns and operates 20 facilities in 8 states.
The Population Health Management division owns and operates provider networks such as Independent Physician Associations (IPAs). Through our Management Services Organization (MSO), we provide management, administrative and other support services to our affiliated hospitals and physician groups. Our cloud-based proprietary technology platform aggregates clinical and claims data across multiple settings, information systems and sources to create a holistic view of patients and providers, allowing us to deliver greater quality care more efficiently.
Forward-Looking Statements
Certain statements and information included in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. When used in this press release, the words or phrases "will", "will likely result," "expected to," "expects to," "will continue," "anticipated," "estimate," "projected," "intend," "goal," or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks, known and unknown, and uncertainties, many of which are beyond the control of the Company. Such uncertainties and risks include, but are not limited to, our ability to successfully execute our growth strategy, changes in laws or regulations, including final rules implemented under the No Surprises Act and related regulatory guidance, economic conditions, dependence on management, dilution to stockholders, lack of capital, the effects of rapid growth upon the Company and the ability of management to effectively respond to the growth and demand for products and services of the Company, newly developing technologies, the Company's ability to compete, conflicts of interest in related party transactions, regulatory matters, protection of technology, lack of industry standards, the effects of competition and the ability of the Company to obtain future financing. An extensive list of factors that can affect future results are discussed in the Annual Report on Form 10-K for the year ended December 31, 2022 and the Current Reports on Form 10-Q for the periods ended March 31, 2023, June 30, 2023 and September 30, 2023 under the heading "Risk Factors" in Part I, Item IA thereof, and other documents filed from time to time with the Securities and Exchange Commission. Such factors could materially adversely affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed within this press release.
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SOURCE Nutex Health, Inc.
