Merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc

Note 3 - Merger of Nutex Health Holdco LLC and Clinigence Holdings, Inc.         

The merger of Nutex Health Holdco LLC and Clinigence was completed pursuant to the Merger Agreement on April 1, 2022. As discussed above, the merger was accounted for as a reverse business combination with Nutex Health Holdco LLC as the accounting acquirer and Clinigence as the accounting acquiree.

The fair value of purchase consideration transferred on the closing date includes the value of the shares of the combined company owned by Clinigence shareholders at closing of the merger and the fair value of Clinigence’s outstanding and exercisable common stock options and warrants as determined using a Black-Scholes valuation model. The fair value per share of Clinigence’s common stock was $6.40; its traded closing price on April 1, 2022. Total consideration in the merger is shown below:

Fair value of Clinigence common shares at $6.40 per share	$	326,151,098
Fair value of Clinigence outstanding common stock options and warrants		120,875,452
Total consideration	$	447,026,550

The following is a preliminary estimate of the allocation of the total purchase consideration to acquired assets and assumed liabilities including the fair value of identified intangible assets as determined by independent valuation (a level 3 measurement):

Cash and cash equivalents	$	12,716,228
Accounts receivable, net		2,127,076
Prepaid expenses and other current assets		127,384
Property and equipment, net		14,793
Right of use asset, net		86,989
Intangible assets, net		21,668,000
Goodwill		424,216,539
Accounts payable and accrued expenses		(3,966,100	)
Deferred revenue		(92,111	)
Convertible notes payable, net		(3,771,858	)
Term note payable		(553,150	)
Lease liability		(91,238	)
Deferred tax liability		(5,456,002	)
Assets acquired	$	447,026,550

The intangible assets denoted above each have definite lives. These intangible assets are being amortized over their estimated useful lives of 5 to 16 years. Goodwill arising from the transaction is not tax-deductible.

The results of operations of Clinigence have been included in the Company’s consolidated financial statements since the April 1, 2022 merger date. We expensed $3.9 million of acquisition-related costs for the merger. These costs consisted principally of legal, accounting and other professional fees for the transaction.

Supplemental Pro Forma Information – The supplemental pro forma financial information presented below is for illustrative purposes only and is not necessarily indicative of the financial position or results of operations that would have been realized if the merger with Clinigence had been completed on the date indicated, nor is it indicative of future operating results or financial position. The pro forma adjustments are based upon currently available information and certain assumptions that management believes are reasonable under the circumstances.

The supplemental pro forma financial information reflects pro forma adjustments to present the combined pro forma results of operations as if the acquisition had occurred on January 1, 2021, to give effect to certain events that management believes to be directly attributable to the acquisition. These pro forma adjustments primarily include an increase to depreciation and amortization expense that would have been recognized due to acquired tangible and intangible assets.

The supplemental pro forma financial information for the periods presented is as follows:

	Three months ended June 30				Six months ended June 30
	2022		2021		2022		2021
Revenue	$	58,047,933	$	68,105,177	$	143,384,350	$	157,462,764
Net income (loss) attributable to Nutex Health Inc.		(19,395,754)		23,711,523		(12,215,600)		56,629,242

The pro forma adjustment included in the pro forma loss above for the six months ended June 30, 2022 included $14.2 million of one-time stock-based compensation expense related to the merger transaction. Pro forma data does not purport to be indicative of the results that would have been obtained had these events actually occurred at the beginning of the period presented and is not intended to be a projection of future results.