In the news release, NUTEX HEALTH ANNOUNCES YORKVILLE PAYOFF AND
STREAMLINED STRATEGIC PLAN, issued 30-Jan-2024 by Nutex Health, Inc. over PR
Newswire, we are advised by the company there is a revised version
that should replace the previous version. The complete, corrected
release follows:
NUTEX HEALTH ANNOUNCES STREAMLINED STRATEGIC PLAN
HOUSTON, Jan. 31,
2024 /PRNewswire/ -- CORRECTED — 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 a new streamlined strategic plan which the company
believes will enhance shareholder value and strengthen its
financial position.
- Nutex has paid off in full the remaining outstanding
balance of $2.7 million under its
Pre-Paid Advance Agreement, in lieu of future stock issuances. The
Company appreciated Yorkville Advisors' financing
support.
- 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:
Southeast Texas ER and 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.
- 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:
- On January 25, 2024, Nutex
Health closed 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. The Company believes that the benefits of this recent
capital raise outweigh any recent downward pressure on its stock
and expects that together with its new strategic plan will enhance
shareholder value and enhance its financial position.
- 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 service 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%.
- 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 of 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 20, 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.