HOUSTON - Nutex Health Inc. (NASDAQ: NUTX), a healthcare delivery system, has announced a 1-for-10 reverse stock split of its common stock, set to take effect as the market opens on July 3, 2024. The reverse stock split is aimed at regaining compliance with Nasdaq's minimum bid price requirement for continued listing.
Shareholders authorized the reverse split on June 17, 2024, and the Board of Directors has now determined the 1-for-10 ratio. The amendment to the Amended and Restated Certificate of Incorporation will reflect this change. The reverse stock split follows a previous 1-for-15 split effective April 10, 2024.
With the implementation of the reverse stock split, every ten shares of Nutex Health's common stock will be consolidated into one share. Stockholders who would otherwise hold a fraction of a share will receive a rounded up whole share instead.
The total number of common shares will decrease from around 49 million to approximately 4.9 million, with the number of authorized shares remaining at 950 million. The split will also proportionally adjust the shares reserved for the company's equity compensation plan and the terms of outstanding warrants and stock options.
Nutex Health, headquartered in Houston, Texas, operates 21 micro hospitals and manages physician networks through its Hospital Division and Population Health Management Division. The company utilizes a proprietary technology platform to support its integrated healthcare delivery system.
This announcement is based on a press release statement from Nutex Health Inc. The company cautions that forward-looking statements in the release are subject to risks and uncertainties that could materially affect their financial performance. These include the ability to execute growth strategies and respond to rapid growth demands, as well as other factors listed in their annual and quarterly SEC filings.
In other recent news, Nutex Health Inc. has been notified by Nasdaq of a potential delisting due to non-compliance with the exchange's minimum bid price requirement. The company has appealed this decision and a hearing is scheduled for July 9, 2024. To regain compliance, the Board of Directors approved a reverse stock split on April 24, 2024, subject to shareholder approval at the annual meeting on June 17, 2024.
Simultaneously, the company's first-quarter performance showed a 20% increase in revenue and a significant year-over-year increase of 88% in Adjusted EBITDA, reaching $4.6 million. Despite this, Benchmark has adjusted its outlook on Nutex Health shares, lowering its price target from $6.00 to $5.00, while retaining a Buy rating.
The recent strong enrollment figures for the Independent Physician Associations (IPAs) in Texas and Florida are expected to contribute positively to the company's performance. Despite the delay in the opening of four new facilities to conserve cash, Nutex Health's financial position appears stable with $30 million in cash reserves, bolstered by $10 million from January's equity financing. These are among the recent developments at Nutex Health Inc.
InvestingPro Insights
In light of Nutex Health Inc.'s recent strategy to implement a reverse stock split, investors are closely monitoring the company's performance metrics and market position. According to real-time data from InvestingPro, Nutex Health's market capitalization stands at a modest 28.24 million USD, reflecting its small-cap status in the healthcare industry. The company's P/E ratio is currently negative at -0.81, which aligns with an InvestingPro Tip indicating that analysts do not expect the company to be profitable this year.
InvestingPro Data also shows a significant revenue growth of 31.69% over the last twelve months as of Q1 2024, suggesting a strong increase in sales. Still, this growth has not translated into profitability, as evidenced by the company's negative return on assets of -8.88%. The price of Nutex Health's stock has been highly volatile, with a 1-month total return of -26.66% and a staggering 1-year total return decline of -91.86%, underscoring another InvestingPro Tip that highlights the stock's poor performance over an extended period.
Investors interested in a deeper analysis of Nutex Health's financial health and future prospects can find a wealth of additional InvestingPro Tips on the company. In fact, there are 13 more tips available, which provide a comprehensive overview of factors such as debt burden, valuation multiples, dividend policy, and stock price trends.
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