Greetings, and welcome to the Nutex Health Shareholders Update Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Vivian Sanders, Corporate Director of Marketing and Business Development. Thank you. You may begin. Vivian S

Good morning, everyone, and welcome to Nutex Health, Inc.'s Second Quarter 2025 Company Update Conference Call. I'm Vivian Sanders, and I'm pleased to moderate today's discussion. Thank you for joining us as we review our performance and outline our plans for the future. This call is being recorded, and a replay will be available on our website. With me today are our key leaders, Dr. Tom Vo, Chairman and CEO; Jon Bates, Chief Financial Officer; Dr. Warren Hosseinion, President; and Dr. [Mike] Chang, Chief Medical Officer. They will provide insights into our financial results, operational progress, clinical quality and strategic direction, followed by a Q&A session. Before we begin, a few reminders. Today's discussion may include forward-looking statements based on management's current expectations. These are subject to risks and uncertainties that could cause actual results to differ. For details, please refer to our press release and Form 8-K filed last week and our other SEC filings. These preliminary results being presented today remain subject to the completion of normal quarter end and fiscal and accounting procedures and closing statement adjustments, and the quarterly review process conducted by our auditors. With that, I'm pleased to turn the call over to Dr. Tom Vo, our Founder and CEO. Dr. Vo, the floor is yours.

Thank you, Vivian, and good morning, everyone. I am thrilled to present Nutex Health's preliminary results for the second quarter of 2025, which builds on the strong momentum from our first quarter and reflects our continued execution of a patient-first, high-quality care model. Our micro hospital approach, combined with strong operational efficiency and effective revenue cycle management has driven continued robust growth. Let me first discuss our operational results. And Jon will update everyone with our progress on the audit and interim review of our financials with our new auditor. Operationally, Q2 2025 shows strong performance with total patient visits reaching 45,573, a 10.6% increase from Q2 of 2024. For the first half of 2025, total patient visits were 93,842, a 15.5% increase from the first half of 2024. Total revenue increased to $244 million for the three months ended June 30, 2025, as compared to total revenue of $76.1 million for the same period in 2024, an increase of 220%. Gross profit was $124.8 million or 51.1% of total revenue for the three months ended June 30, 2025, as compared to gross profit of $22.6 million or 29.7% of total revenue for the same period of 2024. Adjusted EBITDA attributed to Nutex Health was $73.3 million as compared to adjusted EBITDA attributed to Nutex Health of $6.8 million for the three months ended June 30, 2024. Net cash from operating activities was $78.2 million for the six months ended June 30, 2025, compared to $16.3 million for the same period in 2024. As of 6/30/2025, we had $96.7 million of cash in the bank. The strong performance was a testament to our strong fundamentals and dedication and collaboration from all of the team members here at Nutex as we strive to fulfill our core mission of providing better access to health care. One driver of our financial success in addition to strong volume growth and higher patient acuity is our arbitration strategy under the No Surprises Act independent dispute resolution process. Congress enacted the No Surprises Act "NSA" effective January 1, 2022, to protect patients from surprise medical bills incurred when they receive emergency medical services from out-of-network health care providers. Providers bill the insurers directly. And if the insurer doesn't pay or in view of the provider underpays for the medical services provided, the NSA creates the independent dispute resolution or IDR process for unresolved billing disputes between providers and insurers. The patient is not involved in this process, and payment is issued directly to the provider from the insurer. The IDR process safeguards providers by promoting fair reimbursement for payers, helping ensure their continued ability to deliver care. This process, though administratively intensive, is critical for securing fair compensation when insurers do not pay fair and reasonable awards as is evidenced by the recent governmental data, which shows that during the second half of 2024, 85% of arbitration awards are in favor of the higher offers submitted by the providers. Nutex undertakes extensive labor and cost-intensive efforts to comply with all applicable laws and regulations in each of the jurisdictions in which it operates, including the eligibility rules in effect at the time a claim is being submitted to federal arbitration. For more information on the NSA and IDR process, please go through our Form 8-K filed on August 22, 2025, under term 8.01 and cms.gov under independent dispute resolution. On July 1, 2024, we engaged HaloMD, a third-party expert to work with us in challenging underpaid out-of-network claims. HaloMD specializes in independent dispute resolution through the MSA and state regulation for out-of-network health care providers. Nutex Health determines which claims to submit to arbitration. Given the complexity of the federal arbitration process and its interaction with state surprise billing laws, it is crucial for providers like Nutex Health to seek tech-enabled expert assistance in the highly complex submission process. This third-party expertise, such as that provided by HaloMD is essential for navigating the complexity of submission of claims in bifurcated states where either state or federal law may apply, depending on the insurance coverage and services provided. As such, independent federal arbitration is now by necessity and an integral part of our revenue cycle management operating procedure. Next, I'd like to address a few items that were published in a recently highly misleading short seller report, revolving around mainly HaloMD and allegations made by large insurers and several lawsuits against HaloMD. We strongly disagree with the allegations in the short seller report. Further, we believe that the report misrepresents Nutex business, its claim process and its ability to collect revenue. Further, we believe the short seller completely misunderstands the regulatory framework underpinning the independent federal arbitration system implemented under the No Surprises Act. Nutex Health has not been named in any lawsuit filed by Blue Cross Anthem or any other insurer against HaloMD. And Nutex Health has no hospital locations in jurisdiction where HaloMD is subject to alleviation initiated by insurers. In a press release issued on June 4, 2025, with respect to the lawsuit filed by Blue Cross Blue Shield of Georgia, HaloMD states that it is prepared to vigorously defend itself in this litigation in a manner that will highlight the lawsuit's meritless nature. Patient eligibility seem to have been a large point of contention in lawsuit. So a few clarifying points related to our situation. Nutex Health undertakes extensive labor and cost-intensive effort to comply with all applicable laws and regulations in each of the jurisdiction in which it operates, including the eligibility rules in effect at the time a claim is being submitted to the federal arbitration. the claims process for operating network claims differ from state to state and is highly complex due to mainly the bifurcated nature of many states, which have their own surprise billing rules for fully insured claims and for certain types of providers. Further, there are different rules in each state governing the determination whether individual claims may be bundled or batched when submitting to the certified independent dispute resolution entity. The short seller extrapolating from the HaloMD lawsuit, which does not apply to Nutex Health, seeks to allege that Nutex Health participate in an intentional flooding of the arbitration system, fortunately obtains large payment and could be subject to revenue clawback. As we have outlined in detail in our Form 8-K filed on August 22, 2025, the eligibility determination for the submission of out-of- network claims to the federal arbitration process are complex. We believe we meticulously adhere to the existing rules underlying those eligibility criteria. As further detailed in our Form 8-K, according to the data published by CMS, Nutex is part of an industry- wide trend, resulting in a large increase in the number of claims submitted for arbitration. During the final 2 quarters of 2024, providers initiated 1.5 million disputes, which represents more than 70x the predicted annual case load. Of those, 85% were decided in favor of the provider, the higher offer, resulting in a median winning offer of over 4x the median in-network rate of each insurer. Contrary to the allegations contained in the short seller report, we believe that Nutex Health complies with the federal arbitration rules as currently in effect. With respect to revenue collection, the CMS has recently allowed the reopening of awards made prior to June 6, 2025, based purely on narrowly defined clerical, jurisdictional or procedural errors by the independent federal arbitration entity. Neither insurers nor providers may challenge prior awards based on their own errors or on substantial grounds. Further, to address the potential of nonpayment by insurers in violation of the No Surprises Act, the No Surprises Act Enforcement Act has been recently reintroduced in Congress and the Senate. In addition, almost all claims are for out-of-network services and the percentages of Medicare and Medicaid of our patients are less than 5%. Since our claims process and revenue cycle management team are all in-house, we believe we expend significant resources to review and determine which claims are set to the independent dispute resolution entity. Lastly, the short seller report also mentioned Neighbors Emergency Center bankruptcy in 2018. Neighbors Emergency Center was indeed co-founder by myself in 2008. However, I left Neighbors in 2011 to start Nutex Health. The 2 models are completely different. Neighbors with a freestanding ER model located only in Texas, whereas Nutex Health is a micro hospital model with facilities on a national level. Neighbors did eventually file for bankruptcy around 2018, 7 years after I left its management team. On the regulatory front, we are not seeing any significant legislative changes to either the NSA or the IDR process. We feel that Congress is currently content with NSA because it has done its job to protect the American public from surprise bills. Any changes to the NSA may potentially put the American public at risk. We expect the federal arbitration process for out-of-network services will continue to evolve and become more efficient and less complex. As an example, on July 1, 2025, the federal IDR portal was upgraded to streamline the arbitration process and enhance the quality of data submitted. We believe the proposed No Surprise Act Enforcement Act will also be beneficial to providers such as Nutex Health. It was reintroduced on July 23 by a bipartisan, bicameral group, including representative Greg Murphy of North Carolina, Raul Ruiz and Jimmy Panetta of California, John Joyce of Pennsylvania, Kim Schrier of Washington and Bob Onder of Missouri. A companion legislation was also introduced by Senators Roger Marshall of Kansas and Senator Michael Bennet of Colorado. If enacted, either version would offer significant benefit to providers participating in the NSA's IDR process. Importantly, both bills impose penalty for late or nonpayments with a nonprevailing party fails to make the required payment within 30 days of an IDR determination. The penalty imposed will be 3x the difference between the initial payment and the IDR determination per claim. Interest will also apply to late or nonpayments. The bills authorized the imposition of civil monetary penalties on health plans and insurers for violation of the NSA's balance billing provision. HHS would have discretion to assess penalties of up to $10,000 per violation, the same maximum penalty currently applicable to providers who violate these requirements. The bills also include the new HHS labor and treasury requirements aimed at better reporting transparencies for insurers and health plans. Please refer to our current report on Form 8-K dated August 20, 2025, for additional information. Our growth strategy remains robust with over 15 hospital projects in development, including 2 confirmed opening by the end of 2025 and a potential third. These projects target high-growth markets with strong demand for our micro hospital model as discussed in Q1. We are also advancing our Population Health Management Division, planning to launch 1 to 2 independent physician association, IPAs annually, particularly near our micro hospitals to enhance care coordination and synergies. To drive organic growth, we're investing in existing facilities by expanding clinical services and optimizing workflow, a strategy we find from Q1 feedback to boost performance. Our combination of organic growth, new market entries and strategic acquisitions position Nutex for sustained success. To further enhance shareholder value, on July 30, 2025, the Board of Directors has authorized a stock repurchase program of up to $25 million of a company's common stock over the next 6 months. In summary, Q2 2025 was a transformative quarter with strong volume growth, strong cash generation and a clear development pipeline. We remain committed to delivering value to patients and shareholders while navigating industry trends. I will now turn the call over to Jon Bates, our Chief Financial Officer.

Thank you, Tom, and good morning, everyone. I was going to go over a couple of different topics today, some Tom discussed and some others as well. And first of all, I want to provide some background and color on the recent delay in the filing of our second quarter 2025 10-Q and our time line for completing all the necessary filings. Then I'll follow up with some key financial data for the second quarter, June 2025 and the six months ended June 2025 period that we believe will be unaffected by the accounting issue that led to this delay, highlighting the continued positive trend the company has experienced since the fourth quarter of 2024 with no fundamental changes in our operational model. So let's first discuss the details around the delay in our second quarter 2025 10-Q filing that was noted in our current report on Form 8-K dated August 20, 2025. During the preparation of our financials to be included in the company's second quarter 10-Q filing, we reevaluated the accounting treatment of stock-based compensation obligations for certain under construction and ramping hospitals under U.S. GAAP accounting standards. In our go-public merger transaction with Clinigen back in April 2022, we entered into earn-out agreements with the former owners of those hospitals for payments of additional consideration after these facilities become operational. These obligations were recorded to equity and stock compensation expense. However, based on our reevaluation of the accounting treatment, we have determined that the obligation should be classified as liability and not equity along the way. We are also making changes in how the accounting recorded for those obligations are determined. But based upon this work, while the adjustments we are anticipating are noncash in nature, the quantitative impacts of these changes are material to the financial statements filed in our 10-Q for the quarter ended March 31, 2025, and filed in our Form 10-K for the year end December 31, 2024. So on August 24 of '25, we filed the Form 8-K stating that these SEC statements should not be relied upon until we complete corrections and make amended filings with the SEC. And we're working with the auditors on this restatement at present. But based on our preliminary calculations, just to give you some perspective, the estimated impact of the corrections is as follows: Total liabilities as of December 31, 2024, would increase by approximately a range of $10 million to $20 million with a corresponding decrease in reported equity on the balance sheet. And the total liabilities as of March 31, 2025, would increase by approximately a range of $20 million to $50 million with a corresponding decrease in reported equity in the balance sheet. And the net income for the three months ended March 31, 2025 is expected to increase by a range of between $2 million and $10 million as a result of this. And these obligations and expenses are noncash as they are exclusively for stock-based compensation. The corrections have no impact on previously reported amounts for key financial statement line items such as revenue, gross profit, liquidity, working capital, short- and long-term debt, operating cash flow, adjusted EBITDA or the number of patient visits, just to name a few. While adjusted EBITDA is a non-GAAP measure, we feel it highlights the important trend in our operating results by excluding significant noncash items reported in net income as required by GAAP. So we are working to address the corrections quickly while we continue to execute our company's operating and growth plans. Now as mentioned before, August 20, 2025, I mentioned now, the company did receive a notice from NASDAQ notifying the company that due to the company's failure to timely file its June 30, 2025, Form 10-Q with the SEC, the company has 60 calendar days or until October 20, 2025, from the date of the notice to file its June 30, 2025, Form 10-Q. The company plans to complete this process within this time line and will provide updates as necessary along the way if anything changes. Next, let's discuss some of the key financial data for the second quarter 2025 and then the six month ended June of 2025 period that we believe will be unaffected by the accounting issue that led to this delay. First of all, financial highlights for the three months ended June 30, 2025. As Tom mentioned earlier, total revenue was $244 million for the three months ended June of '25 as compared to total revenue of $76.1 million for the same period in 2024, an increase of 220%. The Hospital Division drove most of this growth, generating $236.3 million, up 350% from $76.1 million in the second quarter of 2024. Now of the $236 million in hospital revenue, $167.7 million related to the independent dispute resolution revenue, which amounts to approximately 71%. And revenue from mature hospitals, which are hospitals opened prior to December 31, 2021, increased by 203% in 2025 compared to 2024. Additionally, the Population Health Division revenue increased by $0.8 million or 9.2% to $7.7 million in the second quarter of '25 from $8.5 million in the same period in 2024. Now with regard to arbitration-related revenue, we have continued to submit between 60% to 70% of our business through the independent dispute resolution process. We have also won a legal determination on 85-plus percent of the claims submitted, and we currently have an average collection rate of 75-plus percent of the legal determination wins. And arbitration costs have remained relatively consistent, approximating between 26% to 28% of the arbitration revenue reflected. From a corporate cost perspective, the G&A expenses as a percentage of total revenue for the second quarter of 2025 decreased to 5.1% compared to 14% for the second quarter of 2024, showing our continued focus on controlling costs while improving revenue. Gross profit was $125 million for this time period or 51.1% of total revenue as compared to the gross profit of $22.6 million or 29.7% of total revenue for the same period in 2024. Regarding visits at the Hospital Division, they were 45,573 for the three months ended June of '25 as compared to 41,208 for the same period in '24, an increase of 4,365 visits or 10.6%. And visits at mature hospitals increased by 0.6% in the three months ended June as compared to the same period in 2024. And then for the three months ended June, the company did collect $175 million on hospital revenue, which was the highest collection amount for any quarter and $109 million or roughly 62% of the collections related to the arbitration revenue. Adjusted EBITDA was $71.6 million for the three months ended June of 2025 as compared to $6.8 million for the same period in 2024. And then operating cash flow was $27.1 million for the three months ended June as compared to $13.3 million for the same period in 2024. Now I'll move on to the -- some of the highlights for the six months ended June of 2025. Total revenue was $455.8 million for the 6 months as compared to total revenue of $143.5 million for the same period in 2024, an increase of 217.5%. Hospital Division drove most of this growth, generating $440.2 million, up 244.9% from $127.6 million in the first half of 2024. Of the $440.2 million in hospital revenue, $280.8 million related to IDR revenue, which amounts to approximately 64%. Revenue from the mature hospitals, which are hospitals opened prior to December 31 of '21, increased by 195.2% in '25 compared to '24. Additionally, the Population Health Division, its revenue decreased by $0.4 million or 2.4% to $15.5 million in the first half of '25 from $15.9 million in 2024. Related to arbitration costs, again, approximately 26% to 28% of the arbitration revenue was attributed to the cost of arbitration. Gross profit was a very strong $243.1 million or 53.3% of total revenue for the six months ended June of 2025 as compared to a gross profit of $32.7 million or $22.8 million of total revenue for the same period in 2024. From a corporate cost perspective, G&A again as a percentage of total revenue in the first half -- for the first half of 2025 decreased to 4.9% from 13.4% for the first half of 2024, again showing our continued focus on controlling costs and again, improving net revenue. Total revenue at the Hospital Division -- excuse me, total visits at the Hospital Division were 93,842 for the six months ended June '25 as compared to 81,276 for the same period in 2024, an increase of 12,566 visits or 15.5% and business at mature hospitals increased by 3% in the six months ended June '25 as compared to the same period in '24. For the 6 months ended June of '25, the company did collect $311 million in cash, the highest collection amount for the first 2 quarters of any year, $172 million or roughly 55% of the collections related to arbitration revenue. Adjusted EBITDA was $144.4 million for that 6-month period as compared to $6.4 million for the same period in '24. Operating cash flow was $78.1 million for the six months ended June of '25 as compared to $16.1 million for the same period in 2024. As of June 30, 2025, the company had total assets of just under $855 million, including cash of $96.4 million and accounts receivable of $349.2 million. During the 6-month period, we did have some larger tax payments made related to the 2024 tax year, along with our estimated payments for 2025 that amounted to around just under $51 million, along with other member distribution payments of around $18.8 million during the 6-month period, helping explain some of the larger outflows during the period. Current portion of long-term debt -- current portion of the long-term debt and the long-term debt itself was $15 million and $20.5 million, respectively, at June of 2025. Now as we look at some of these key financial data, we feel strong about the company and the direction it's headed with a very strong balance sheet, continued solid cash flow and limited true debt, which allows us to comfortably handle all the current needs, whether it is opening a hospital, supporting our existing hospitals, buying back shares, as Tom mentioned earlier in the discussion or looking for other accretive opportunities for our shareholders. Lastly, I wanted to provide a little more insight into the 21 named hospitals that had contribution agreements signed when the company went public back on 4/1/22 with certain owners of hospitals that were either determined to be what we call ramping hospitals, which there were 4 of them or under construction hospitals, which there were 17 of them, where once any of the hospitals were open for 2 years, the owners of each hospital would be eligible to receive a onetime additional issuance of company common stock based upon the earnings of the hospital in the second year of their operations, which we denote as the earn-out period. To give you a little more specifics on those. So as of June 30, 2025, we talked about there was 21 total. And then of those, there were 4 ramping hospitals at that point when we went public. Of those 4 ramping hospitals, all of them, of course, were opened, but none of them met the criteria for an earn-out shares. So they went through the process with no earn-out. So of the 17 under construction hospitals, 4 hospitals had their development plans abandoned, so obviously, no share dilution at all. So they're out of the picture. Of the remaining 13 under construction hospitals, 6 of those had measurement periods that ended on or before June 30, 2025. And 2 of those 6 did not meet the criteria for an earn-out share. One of the hospitals had a measurement period that ended on February 28, 2024. One of the hospitals had a measurement period on February -- the end of February in 2025 and then 2 other hospitals had a measurement period that ended on June 30, 2025. And so for the 3 hospitals that had measurement period ends in the first 6 months of 2025, their dilution approximates -- the number of shares of dilution approximates about 1 million shares, 1/3 of those shares vesting 6 months after issuance, 1/3 after 12 months of issuance and then the remaining 1/3 vesting after 18 months of issuance. So over 3 tranches of 1/3 each of 6-month periods. Of the remaining 7 under construction hospitals, 4 hospitals have measurement periods ending after June 30, 2025. One hospital has a measurement period ending in August of 2025, one has a measurement period ending in March of 2026 and then 2 hospitals have measurement periods ending in the fourth quarter of 2026. And all that leaves the remaining 3 named hospitals, each of which have not opened yet, with one scheduled to open later in 2025 and the 2 others potentially opening later in 2026. With that, I'm going to turn over the call to Warren Hosseinion, our President, to talk more about the population health side of the business. Warren?

Thank you, Jon, and good morning, everyone. I'm pleased to update you on Nutex Health's Population Health Management Division, a key pillar of our value-based care strategy. Building on our Q1 discussion, we've refined our focus on growth and operational efficiency to drive long-term success. As outlined previously, our strategy integrates hospitals and Independent Physician Associations or IPAs, to deliver coordinated cost-effective care. Our IPA comprising primary care physicians and specialists near our facilities now manage over 41,000 patients in risk-based arrangements. In Q2 2025, the division generated $7.7 million, down slightly from $8.5 million in Q2 2024, reflecting the divestiture of 2 non-core assets in mid-2024. For the first half of 2025, revenue was $15.5 million compared to $15.9 million in 2024. Operating income for the first half improved to $0.1 million from $0.6 million loss in 2024. Our strategic focus remains on expanding our IPA network, targeting 1 to 2 new IPAs annually near our micro hospitals to leverage synergies as discussed in Q1. In 2025, we expanded and now have over 300 primary care physicians and over 900 specialists contracted in our network, supported by a team equipped to manage this larger network. The division is well positioned to capitalize on value-based care trends with growth driven by organic expansion, partnerships and potential acquisitions. In conclusion, our improved profitability and strategic investments position the division for growth. We're excited to expand our IPA network and enhance our value-based offerings. I'll now turn the call over to Dr. Michael Chang, our Chief Medical Officer.

Thank you, Warren, and good morning, everyone. I'm pleased to provide an update on Nutex Health's clinical quality and patient experience, which remain at the core of our mission to deliver high-quality patient-centric care. Building on our Q1 focus, we continue to prioritize clinical excellence and exceptional patient satisfaction, which sets us apart in the health care industry. Our commitment to clinical quality is reflected in our rigorous standards and outcomes. In Q2 2025, we maintained a patient satisfaction rate exceeding 96% across our facilities as measured by internal surveys. This is complemented by our outstanding Google ratings, which average about 4.7 out of 5 in every market with most facilities achieving 4.9 or 5.0. Such high satisfaction levels are nearly unheard of in health care today, underscoring the strength of our micro hospital model, which emphasizes personalized concierge-style care in a low wait time environment. These metrics reflect our dedication to meeting patient needs with efficiency and compassion, a priority we've consistently highlighted in our prior calls. And as Tom already mentioned, Nutex continues growing patient revenue -- patient volume. Q2 2025 total patient visits increased 10.6% to 45,573 compared to Q2 2024, which reflects growth in both new and mature hospitals. Mature hospitals grew by 0.6% in the second quarter. And for the six months ended June 30, 2025, total visits were 93,842 as compared to 81,276 for the same period in 2024, an increase of 15.5%. This continued growth reflects our leadership team's ongoing efforts in community engagement, business development and adding specialists and service lines to manage more complex cases. Our capacity to provide high-quality around-the-clock ER observation and inpatient stays is a key strength and positions Nutex as a trusted provider in the communities we serve. Cost discipline remains a priority. Excluding arbitration costs, operating costs remained stable despite higher volumes and new hospitals this year. Labor costs did increase 31% from $27 million to $34.9 million, which was comprised of increased payroll and benefits for opening 4 new hospitals in 2024 and staffing for higher ER volumes and an increased volume of higher acuity observation and inpatients. Overall, labor costs continue to be a much smaller percentage of net revenue than most hospital companies at 14.7% for the second quarter, which exemplifies our lean, high-quality model. Supply costs continue to be a very good story for us. Supply costs did increase 34% from $33.6 million to $4.8 million in the quarter, in part due to our anticipated opening of 2 more new hospitals in Q4 2025 as well as growth in the overall volume and services. Despite the uptick, our overall medical supply spend is actually lower by 3% year-to-date compared to the same period 2024. We will continue to see supply cost savings throughout 2025 as a result of our GPO and vendor realignment as previously stated in the third quarter 2024 earnings call. We're continuing to explore technology investments, including AI for patient check-ins, staffing optimization, provider note writing and coding. Our clinical and operational teams remain focused on delivering high-quality care while supporting a sustainable revenue cycle. By integrating clinical excellence with strategic revenue management, we ensure that our patient-first mission translates into both exceptional outcomes and financial stability. I will now turn the call back to Vivian for Q&A. Thank you.

Thank you, Tom, Jon, Warren and [Mike], for those updates. We'll move over to Q&A. Operator, please provide instructions for our analysts.

[Operator Instructions]. Our first question comes from the line of Anthony Vendetti with Maxim.

I was wondering in terms of the restatement process, do you have a time line for when you think you'll get the audited results and be able to file the amended '24 10-K and the first quarter '25 10-Q?

Yes, Anthony, I will speak. Thank you for the question. So we're working through it right now, right? Engagement has already begun in that process. And so I know we have, as I mentioned before, the 60 days to file the second quarter, which to do that, you got to -- you have to finish out 2024 and then make sure the first and second quarters of '25 are there. So we're working actively to try to get all of that done in that time period. And as things evolve and change, if that looks like it wouldn't happen for some reason, we will let everybody know. But our focus right now is all hands on deck to get that done, especially when our main focus, if you can talk about what that restatement is really for is really mostly reclassifications of equity to debt and just making sure that everything else remains consistent. So that's where we're at right now. We're working hard in the 60 days. And then as things change, we'll definitely let everyone be made aware if it's going to go outside of that.

All right. Jon, yes, that's helpful. And I just want to make sure I have these numbers correct. So you mentioned 75% of the IDR awards have been collected. And I think in the second quarter, 62% or 64% of those awards have been collected. And I know there's a penalty if these insurers do not pay according to the current legislation. Is there any recourse for them to appeal the arbitration award? And how do you -- is there any other methodology to force them to pay other than a potential government penalty? So maybe just get into that. And then the revenue recognition, are you recognizing 100% of the award? Or are you recognizing the amount that has been paid?

Okay. Great questions. I'll start backwards. And then, of course, Tom and the rest of the team might jump in as well. But let me -- just as I'm reiterating kind of what we talked about, so it starts out with the number of claims ultimately going to the independent fee resolution. And we've been somewhat consistent since we started the process. It turns out that about 60% to 70% of the payments that we get from payers, we believe we are underpaid in a lot of cases, materially underpaid. So the 60% to 70% is the amount that's physically going through this process. And of those, we talked about -- when it goes to the arbitrator or a win or a loss, we've continued to see like the industry has shown a very, very high success rate on winning and getting a legal determination. So in this quarter and now collectively, we feel like we're up at around 85% plus of what we submit to the independent dispute resolution process that we're winning on. Then -- so you win 85- plus percent of the time, which is fantastic, we believe. And then you got to collect. And so that has continued to improve as well. I do think that's -- industry even shows that you'll get up to maybe 80%, 85%, 90%, and you're always going to fight for the last 10% to 15% with the payers. And so we've progressively improved and actually been able to get over 75% of those determinations in a timely fashion. And now we're still focusing hard on trying to get the rest of those. So we believe that will continue to improve. You also asked about -- so from an accrual perspective, so because we wanted to be conservative on the process, but it's fairly accurate, what we're seeing since we're seeing it, we're currently getting paid, collection rates have been around 75% or so. That's what we're accruing from a revenue perspective on a visit that walks in the door on average today. And so as that improves, obviously, that would change up or down as well. Obviously, it goes down, that it can adjust that way. But currently, we've seen sort of a steady uptick in that collection rate up to 75-plus percent, and we're going to continue to force trying to make sure we're getting 100% of that when the dust settles. So there are -- there's different approaches you can take. Obviously, we're working hard to get information back to CMS if there's an issue with a determination where they've come back and said, we've won, but we're not getting paid. So there's communication directly to some of the payers. And in some cases, it's just they have to be reminded and they turn around and make that payment. But I think there's always going to be a push-pull there until one of the enforcement items that Tom alluded to earlier was if and when that gets in place here, that will really help with this process. So we're watching it closely. We -- what can you do? You can always attempt to litigate. And -- but in a lot of cases, that doesn't necessarily have any sort of immediate impact. And so we look for opportunities where we can, if that makes sense. But generally, we're working just one-on-one back through our third-party provider, Halo plus the payers directly to try to get feedback and try to get those payments coming in a little bit quicker. So I don't know Tom might have some more information on that, but that's kind of our approach.

Okay. Then if Tom, if you don't have anything to add there, just one last question and for the team maybe and so whoever wants to respond. So on the new hospital openings, any update there? Or is everything on track based on the schedule you've outlined? And then on the mature hospitals in terms of -- I know that's obviously based on patients that come in and that can vary quarter-to-quarter. But is there anything that you're doing internally to try to ensure that the mature hospitals continue to see growth in terms of patient visits? And then I'll hop back in the queue.

Yes, Anthony, thank you for the question, and thank you once again for covering us. But to answer to your first question, in terms of the opening schedule for this year, yes, we originally have 3 hospitals scheduled for this year, but it looks like 2 of them will be open for sure. The third one is suspect, and it's all 100% dependent on construction. So Sherman, Texas will probably open in October; Houston will probably open in November and then San Antonio, we're still working with the contractor to see if they could speed up the process and open in 2025. But if not, then probably first quarter of 2026. So that's basically the schedule. And then in 2026, we have probably 4 more hospitals that are opening, including Jacksonville, West Little Rock, and [Beach Blvd] and I think one more later in 2026. So the pipeline is very robust. And then on top of that, for 2027, we have 4 more, and then we're already working on 2028. So that's the pipeline. Now in terms of the mature hospitals, we market 24/7 to our own patients and the community that we serve. And obviously, the goal is to get higher volume. But like I mentioned last time, last quarter, we are doing everything we can to keep those patients that are in the hospital once they get to the ER. So in other words, instead of transferring people out to other hospitals, we do everything we can to keep patients in-house through either observation or inpatient. And so far, we're seeing good results. And so even though the mature hospital has only increased by about 0.5% quarter-over-quarter, the number of observation and admissions for the mature hospitals are going up quarterly. And so that -- you should see that in the year-over-year financial because, obviously, the reimbursement for inpatient is a lot higher than ER. And so that's one of the reasons why the revenue year-over-year is higher even though the patient increase may not be as dramatic.

Our next question comes from the line of Gene Mannheimer with Freedom Capital.

So as I look at your preliminary results, I think the implied EBITDA margin is about 30% for the quarter, and that's a little bit down from what we've seen in the last couple of quarters, though your gross margin was strong, 51%. So I'm just trying to reconcile that. What -- is there anything that was compressing EBITDA margins this quarter relative to the last couple of quarters, Jon?

Yes. I mean that's a great question, Gene. I mean there's obviously some more supplier payments. I know as we start to potentially look at opening some of the facility -- these newer facilities later in the year, you're going to have costs that are happening early on in that later first quarter, second quarter, we'll have some more in the third quarter as well as we get ready to open up. So some of that will come into play there. And then obviously, with the improvement in the arbitration side, there's certainly some more arbitration type costs period-to-period. So that's something that's in there. So it's -- there's nothing, I'd say, dramatic about that when it comes to, say, the EBITDA side. I know when you're talking about cash flow and the cash impact, we did have -- and you didn't ask about this, but we talked about it earlier, but for the year, when you have the buildup of the accrued tax amount at the end of last year and as we had started to make those payments more so into the second quarter, we had a pretty large tax amount paid, almost $50-some million in that first 6 months and mostly in the second half of this first 6 months. So that was one of the things that played in some of the cash draw, if you want to call it, but with incredible cash collections and continued trend, we're still very optimistic there.

That's great color. And then as I look at the revenue per visit, thanks for giving us that arbitration contribution in the quarter. If I back that out from -- if I back out the IDR-related revenue this quarter and the prior year quarter, is it correct to say that revenue per visit was up low single digits from an organic perspective, if you will?

Yes, I think that's about right. As you think about it, that's probably true. And you have to look now over -- now we have a little bit longer time period, which is nice to see when we started the arbitration process. So now that we have roughly a year's worth of data, you can kind of see the overall reimbursement that's been in place. So now you're a little over $4,000, almost $4,200 over the time period since we started overall revenue divided by visits for that almost 12-month period. So that's -- people have asked before kind of where are you going to settle. It will depend on acuity and everything else around that. But we're starting, I think, to see kind of a better idea of what we would expect is as we look going forward. But I mean, I think your assumption is probably accurate as we go through this, and we'll more specifically watch that as we move forward too, Gene, but thank you for the cutting insight.

Our next question comes from the line of Bradford Seagraves with Northbank Capital.

Just a couple of quick ones. One, we're halfway through Q3. Can you provide any commentary to the market on how Q3 to date is going specifically on kind of the free cash flow side?

Well, we haven't reported on the Q3, so I'll hold back a little bit, but I can tell you that what we've seen since fourth quarter of '24, first quarter of '25, second quarter of '25 and what we've talked about in each of sort of these calls, I think you can see where we feel things are headed in that respect. And I think things have remained very, very consistent and very, very strong in relation to that is how I would answer that question.

Okay. And then also, are you going to be able to provide to the market, are you going to be able to publish unaudited financial statements for Q2? Because you mentioned the tax payment, but still would be curious to see the rest of the cash flow statement.

Yes. So I mean the answer is anything even in a quarter is unaudited, but I know what you're asking to be able to put all the specific information out there. And we'll look and see how much more we can provide. We wanted to be sensitive to the fact that we were going back and going through that review process and looking back at 2024 as well. So we're pretty happy that this information very comfortably should not be changing and it gives some perspective. So we'll look and see how much more we can provide. But really, the focus of what we were trying to communicate here is most of what you have related to the delay in the review -- around that delay is more of the noncash items around the stock-based comp expense. So the rest of the fundamentals are not -- we have not seen any sort of changes -- material changes in the operations.

We have reached the end of the question-and-answer session. Ms. Sanders, I'd like to turn the floor back over to you for closing comments.

Thank you all for your valuable questions and answers. For those joining us today, if you have additional questions, e-mail us at investors@nutexhealth.com, and we'll respond promptly. On behalf of the Nutex management team, thank you for joining our Q2 2025 company update call. We've covered growth, strategy, clinical quality and our vision, and we appreciate your interest. A recording of this call will be available on our website for a limited time. Take care, and we look forward to keeping you updated.

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.