University General Health System, Inc. Provides Update Regarding Annual 10K Report and Reports Significant Growth and

University General Health System, Inc. Provides Update Regarding Annual 10K 
Report and Reports Significant Growth and Confidence in
Business Model as Part of Major Restructuring 
HOUSTON, TX -- (Marketwired) -- 06/05/14 --  University General
Health System, Inc. (OTCQB: UGHS) ("University General"), a
diversified, multi-specialty, integrated, physician-centric general
acute care regional health care delivery system, today announced that
the delay in the filing of the Company's annual Form 10-K, which was
due on April 15, 2014, is due to continued challenges surrounding the
following areas, which management has been addressing for over a

--  Accounting for derivatives associated with the placement of preferred
    shares in April 2012
--  Tax calculations
--  Accounting for purchase price allocations
--  Revenue cycle management reconciliations between inpatient and
    hospital outpatient gross revenues and net accounts receivables, which
    include contractual adjustments, bad debts and provision for doubtful

While these areas are significant for any company, the growth
experienced by University General from 2010 through 2013, combined
with a change in EMR (Electronic Medical Records) systems and the
integration of acquisitions, have proven a significant challenge to
the Company. However, management believes that systems have been
implemented that will reduce future delays in the audit process. As
part of this process, the Company has recruited a significant number
of experienced accounting personnel to assist with the validation of
financial reporting systems that will be more easily auditable than
in the past. 
In the 2013 Form 10-K, the Company looks forward to reporting
significant growth in revenues from 2012 to 2013, and this trend has
continued into 2014. Occupancies at the Company's hospitals in
Houston and Dallas approximated 61% and 31% in 2013, respectively.
Surgical volumes at UGH - Houston totaled 9,275, for a 23% increase
from prior-year levels, while UGH - Dallas performed 1,864 surgeries,
representing an increase of 19% from the previous year. In addition,
the Company recently announced that UHG - Houston has entered into
agreements with United Healthcare and Humana, thus providing "in
network" benefits from both carriers. The Company believes this will
provide significant benefits to the patients it serves. 
Ms. Kris Trent, CPA, who joined the Company as Chief Accounting
Officer over a year ago, has been primarily responsible for designing
and implementing internal controls, resolving material weaknesses,
and developing systems that will ensure timely and accurate reporting
compliance in the future. 
The Company also announced the following strategic initiatives as
part of its global restructuring: 

--  UGH - Dallas :
    --  While the Company did not achieve its initial market guidance for
        2013 at UGH - Dallas, management believes numerous strategic
        initiatives that have been implemented will provide positive
        growth and EBITDA going forward. Some, but not all, of these
        initiatives and their impacts include:
        --  A total of 195 inpatient surgeries and approximately 200
            outpatient surgeries were performed in April 2014,
            representing the largest monthly volume since the acquisition
            of the hospital in December 2012.
        --  The number of new physicians added to the hospital's roster
            has increased by over 25% since December 2012.
        --  The implementation of a new gero-psychiatric outpatient
            program has attracted an average of 6 patients per day to the
        --  Emergency room visits are now averaging 1,050 per month,
            versus 800 prior to the hospital's acquisition.
        --  Total procedures for outpatient services reached 147 in April
            2014, versus a monthly average of 101 prior to the
--  Debt Refinancing Efforts: The Company has embarked upon a global
    refinancing/restructuring of its indebtedness, a portion of which has
    already been completed, with additional funding anticipated upon
    filing of the Form 10-K.
--  Management has aggressively pursued a cost/benefit analysis of all
    business units and is in the process of implementing strategic changes
    in the following areas:
    --  Hospital Outpatient Departments
    --  Wholly owned subsidiaries
    --  Material contracts
    --  Management agreements
    --  Partially owned subsidiaries
    --  Marketing related agreements
    --  Other healthcare costs
    --  Supplier relationships
--  The Company is also exploring potential opportunities for mergers,
    acquisitions or divestitures that can add management talent, expand
    capital or access to capital and/or result in synergistic revenue
    enhancement, which will ultimately increase shareholder value.

"These actions are necessary, require strong leadership and should
allow the Company to complete the platform required for our continued
growth," stated Hassan Chahadeh, MD, Chairman and Chief Executive
Officer. "While we have invested over $15 million in our Dallas
hospital and related management/marketing initiatives, many of these
expenses were non-recurring in nature and required to build a strong
foundation for the continued growth of our integrated regional health
care delivery system. While we regret the erosion of confidence in
the capital markets due to our filing delays, we are committed to our
business model and our ability to position the Company optimal
performance in the future health care environment. We are also
committed to our restructuring plan and are confident that it will
provide our shareholders with a much better understanding of our
performance and future growth opportunities." 
About University General Hospital 
University General Hospital delivers high-quality patient-oriented
services by providing timely, innovative health solutions that are
uniquely competitive, efficient and adaptive in today's health care
delivery environment. The hospital is owned by University General
Health System, Inc., a diversified, integrated multi-specialty health
care provider Company that currently operates two hospitals, three
ambulatory surgical centers, a number of diagnostic imaging, physical
therapy and sleep clinics, and a hyperbaric wound care center in the
Houston and Dallas metropolitan areas. Also, University General owns
three senior living facilities, manages six senior living facilities,
and owns a Support Services company that provides revenue cycle and
luxury facilities management services. 
University General Health System, Inc. is headquartered in Houston,
Texas, and its common stock trades on the OTCQB under the symbol
Forward-Looking Statements 
The information in this news release may include certain
forward-looking statements that are based upon assumptions that in
the future may prove not to have been accurate and are subject to
significant risks and uncertainties, including statements related to
the future financial performance of University General Health System,
Inc. (UGHS). Although UGHS believes that the expectations reflected
in the forward-looking statements are reasonable, it can give no
assurance that such expectations or any of its forward-looking
statements will prove to be correct. Factors that could cause results
to differ include, but are not limited to, successful execution of
growth strategies, product development and acceptance, the impact of
competitive services and pricing, general economic conditions, and
other risks and uncertainties described in UGHS's periodic filings
with the Securities and Exchange Commission. 
For Further Information, Please Contact: 
Donald Sapaugh
University General Health System, Inc.
(713) 375-7557  
R. Jerry Falkner, CFA
RJ Falkner & Company, Inc.
Investor Relations Counsel
(800) 377-9893 
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