What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-10 compared with 2020-11-09 · 194 added, 336 removed, 471 unchanged (53% of the section changed)

3 unchanged sentences

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

September 30,

2021 December 31,

32 unchanged sentences

Common stock - $ 0.0001 par value, 200,000,000 shares authorized;

51,596,098 and 50,314,328 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively

52,340,856 and 51,640,537 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Additional paid-in-capital 316,032 307,788

10 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Service fee revenue $ 279,577 $ 248,333

5 unchanged sentences

Depreciation and amortization 22,656 21,934

Loss on sale and disposal of equipment and other 342 917 543 1,990

(Gain) loss on sale and disposal of equipment and other ( 1,307 ) 771

Severance costs 285 218

Total operating expenses 303,914 290,340

INCOME FROM OPERATIONS 23,375 16,850 14,780 46,104

INCOME (LOSS) FROM OPERATIONS 17,653 ( 8,776 )

OTHER INCOME AND EXPENSES

2 unchanged sentences

Non-cash change in fair value of interest rate hedge ( 11,245 ) —

Other (income) expenses ( 139 ) 2 ( 247 ) 1,271

Total other expenses 9,325 9,942 32,543 31,788

Other expenses 206 6

Total other (income) expenses ( 498 ) 9,603

INCOME (LOSS) BEFORE INCOME TAXES 18,151 ( 18,379 )

15 unchanged sentences

(IN THOUSANDS)

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

NET INCOME (LOSS) $ 13,775 $ ( 13,998 )

10 unchanged sentences

(IN THOUSANDS EXCEPT SHARE DATA)

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended September 30, 2020 and September 30, 2019.

Common Stock Additional Paid-In

Capital Accumulated Other

Comprehensive

Income (Loss) Accumulated

Deficit Total

Radnet, Inc.'s

Equity Noncontrolling

Interests Total

Shares Amount

BALANCE - July 1, 2020 51,554,760 $ 5 $ 304,012 $ ( 26,098 ) $ ( 130,111 ) $ 147,808 $ 85,448 $ 233,256

Issuance of common stock under the equity compensation plan 37,000 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 4,338 — — — — — — —

Stock-based compensation expense — — 2,067 — — 2,067 — 2,067

Distributions paid to noncontrolling interests — — — — — — ( 601 ) ( 601 )

Change in cumulative foreign currency translation adjustment — — — 11 — 11 — 11

Change in fair value of cash flow hedge, net of taxes — — — 195 — 195 — 195

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 969 — 969 — 969

Other — — — — ( 1 ) ( 1 ) — ( 1 )

Net income — — — — 6,156 6,156 4,069 10,225

BALANCE-SEPTEMBER 30, 2020 51,596,098 $ 5 $ 306,079 $ ( 24,923 ) $ ( 123,956 ) $ 157,205 $ 88,916 $ 246,121

BALANCE - July 1, 2019 50,127,234 $ 5 $ 257,607 $ ( 6,942 ) $ ( 116,752 ) $ 133,918 $ 78,512 $ 212,430

Issuance of common stock under the equity compensation plan 25,000 — — — — — — —

Stock-based compensation expense — — 1,356 — — 1,356 — 1,356

Issuance of common stock for purchase of membership interest in HVRA 101,902 — 1,500 — — 1,500 — 1,500

Change in cumulative foreign currency translation adjustment — — — ( 23 ) — ( 23 ) — ( 23 )

Change in fair value cash flow hedge, net of taxes — — — ( 5,283 ) — ( 5,283 ) — ( 5,283 )

Other — — — ( 2 ) 2 — — —

Net income — — — — 3,195 3,195 1,897 5,092

BALANCE-SEPTEMBER 30, 2019 50,254,136 $ 5 $ 260,463 $ ( 12,250 ) $ ( 113,555 ) $ 134,663 $ 80,409 $ 215,072

The accompanying notes are an integral part of these financial statements.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS EXCEPT SHARE DATA)

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the nine months ended September 30, 2020 and September 30, 2019.

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended March 31, 2021 and March 31, 2020.

Common Stock Additional Paid-In

11 unchanged sentences

Stock-based compensation expense — — 8,248 — — 8,248 — 8,248

Issuance of common stock for sale of unregistered securities for the DeepHealth acquisition 823,615 — 33,011 — — 33,011 — 33,011

Distributions paid to noncontrolling interests — — — — — — ( 601 ) ( 601 )

Purchase of noncontrolling interests — — ( 4 ) — — ( 4 ) — ( 4 )

Contribution from noncontrolling partner — — — — — — 123 123

Change in cumulative foreign currency translation adjustment — — — ( 12 ) — ( 12 ) — ( 12 )

Change in fair value cash flow hedge, net of taxes — — — ( 18,764 ) — ( 18,764 ) — ( 18,764 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 925 — 925 — 925

Net loss — — — — ( 20,797 ) ( 20,797 ) 8,063 ( 12,734 )

BALANCE-SEPTEMBER 30, 2020 51,596,098 $ 5 $ 306,079 $ ( 24,923 ) $ ( 123,956 ) $ 157,205 $ 88,916 $ 246,121

Net income — — — — 9,458 9,458 4,317 13,775

BALANCE-MARCH 31, 2021 52,340,856 $ 5 $ 316,032 $ ( 23,138 ) $ ( 108,541 ) $ 184,358 $ 97,000 $ 281,358

BALANCE - January 1, 2020 50,314,328 $ 5 $ 262,865 $ ( 8,026 ) $ ( 103,159 ) $ 151,685 $ 81,454 $ 233,139

Issuance of common stock upon exercise of options 10,000 — 50 — — 50 — 50

Issuance of common stock under the equity compensation plan 380,047 — — — — — — —

Stock-based compensation expense — — 6,596 — — 6,596 — 6,596

Issuance of common stock for purchase of membership interest in HVRA 440,207 — 6,000 — — 6,000 — 6,000

Forfeiture of restricted stock ( 1,500 ) — ( 5 ) — — ( 5 ) — ( 5 )

Sale of noncontrolling interests, net of taxes — — 3,090 — — 3,090 2,008 5,098

Purchase of noncontrolling interests — — — — — — ( 1,818 ) ( 1,818 )

Contribution from noncontrolling partner — — — — — — 750 750

Issuance of common stock for purchase of Nulogix 101,902 — 1,500 — — 1,500 — 1,500

Change in cumulative foreign currency translation adjustment — — — 1 — 1 — 1

Change in fair value cash flow hedge, net of taxes — — — ( 18,549 ) — ( 18,549 ) — ( 18,549 )

Net income — — — — 4,360 4,360 6,400 10,760

BALANCE-SEPTEMBER 30, 2019 50,254,136 $ 5 $ 260,463 $ ( 12,250 ) $ ( 113,555 ) $ 134,663 $ 80,409 $ 215,072

Net (loss) income — — — — ( 16,358 ) ( 16,358 ) 2,360 ( 13,998 )

BALANCE-MARCH 31, 2020 50,694,375 $ 5 $ 269,461 $ ( 26,574 ) $ ( 119,517 ) $ 123,375 $ 83,814 $ 207,189

The accompanying notes are an integral part of these financial statements.

2 unchanged sentences

(IN THOUSANDS)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income $ ( 12,734 ) $ 10,760

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 13,775 $ ( 13,998 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 22,656 21,934

2 unchanged sentences

Amortization of deferred financing costs and loan discount 1,147 1,081

Loss on sale and disposal of equipment and other 543 1,990

(Gain) loss on sale and disposal of equipment and other ( 1,307 ) 771

Amortization of cash flow hedge 925 —

1 unchanged sentence

Stock-based compensation 8,248 6,622

Other non-cash items included in cost of operations — ( 559 )

Change in fair value of contingent consideration

( 145 ) ( 1,749 )

Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions:

9 unchanged sentences

Purchase of imaging facilities and other acquisitions ( 57,075 ) ( 4,300 )

Equity investments at fair value — ( 143 )

Purchase of property and equipment ( 30,424 ) ( 51,538 )

Proceeds from sale of equipment 151 779

Proceeds from the sale of equity interests in a joint venture — 132

Nulogix return of capital — 792

Equity contributions in existing and purchase of interest in joint ventures ( 1,631 ) ( 103 )

Net cash used in investing activities ( 87,348 ) ( 55,059 )

2 unchanged sentences

Payments on term loan debt ( 10,824 ) ( 10,824 )

Additional deferred finance costs on revolving loan amendment ( 741 ) —

Proceeds from debt issuance, net of issuing costs — 97,144

Proceeds from Payment Protection Program 4,023 —

Distributions paid to noncontrolling interests ( 601 ) ( 1,818 )

Proceeds from sale of noncontrolling interest — 5,275

Contribution from noncontrolling partner — 750

Proceeds from revolving credit facility 87,100 215,900

Payments on revolving credit facility ( 87,100 ) ( 135,900 )

Proceeds from issuance of common stock upon exercise of options — 50

Net cash (used in) provided by financing activities ( 11,651 ) 68,262

9 unchanged sentences

Supplemental Schedule of Non-Cash Investing and Financing Activities

We acquired equipment and certain leasehold improvements for approximately $ 28.1 million and $ 14.1 million during the nine months ended September 30, 2020 and 2019, respectively, which were not paid for as of September 30, 2020 and 2019 , respectively.

We acquired equipment and certain leasehold improvements for approximately $ 28.8 million and $ 30.8 million during the three months ended March 31, 2021 and 2020, respectively, which were not paid for as of March 31, 2021 and 2020 , respectively.

The offsetting amounts due were recorded in our condensed consolidated balance sheet under accounts payable, accrued expenses and other.

On June 1, 2020, we completed our stock purchase of DeepHealth, Inc.

by issuing 823,615 shares of our common stock to purchase all of DeepHealth's shares and share equivalents.

The shares were ascribed a value of $ 13.9 million.

On August 1, 2019 we issued RadNet common stock in the amount of $ 1.5 million to acquire 75 % controlling interest in our formerly 25 % owned joint venture Nulogix.

See Note 2, Significant Accounting Policies, for further information.

We transferred approximately $ 4.3 million in net assets to our new joint venture, Ventura County Imaging Group, LLC in March 2019.

On February 27, 2019, we issued 440,207 shares of our common stock to the sellers of Hudson Valley Radiology Associates, P.L.L.C.

("HVRA") which permitted our variable interest entity, Lenox Hill Radiology and Medical Imaging Associates, P.C., to complete its purchase of the membership interest of HVRA.

The shares were ascribed a value of $ 6.0 million.

On January 1, 2021 we entered into the Simi Valley Imaging Group, LLC, partnership agreement with Simi Valley Hospital and Health Services ("Simi Adventist").

Of the total combined assets of $ 0.4 million, RadNet transferred $ 0.3 million and Simi Adventist contributed the remaining $ 0.1 million.

AND SUBSIDIARIES

2 unchanged sentences

We are a national provider of freestanding, fixed-site outpatient diagnostic imaging services with operations in seven U.S.

At September 30, 2020, we operated, directly or indirectly through joint ventures with hospitals, 334 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

At March 31, 2021, we operated, directly or indirectly through joint ventures with hospitals, 346 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

Our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders.

29 unchanged sentences

We consolidate the revenue and expenses, assets and liabilities of the Group.

The Group on a combined basis recognized $ 38.3 million and $ 40.6 million of revenue, net of management services fees to RadNet, for the three months ended September 30, 2020 and 2019, respectively and $ 38.3 million and $ 40.6 million of operating expenses for the three months ended September 30, 2020 and 2019, respectively.

RadNet recognized $ 169.0 million and $ 154.5 million of total billed net service fee revenue for the three months ended September 30, 2020, and 2019, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 104.8 million and $ 116.9 million of revenue, net of management services fees to RadNet, for the nine months ended September 30, 2020 and 2019, respectively and $ 104.8 million and $ 116.9 million of operating expenses for the nine months ended September 30, 2020 and 2019, respectively.

RadNet recognized $ 433.3 million

and $ 456.1 million of total billed net service fee revenue for the nine months ended September 30, 2020, and 2019, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 46.1 million and $ 39.6 million of revenue, net of management services fees to RadNet, for the three months ended March 31, 2021 and 2020, respectively and $ 46.1 million and $ 39.6 million of operating expenses for the three months ended March 31, 2021 and 2020, respectively.

RadNet recognized $ 179.0 million and $ 147.9 million of total billed net service fee revenue for the three months ended March 31, 2021, and 2020, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The cash flows of the Group are included in the accompanying condensed consolidated statements of cash flows.

All intercompany balances and transactions have been eliminated in consolidation.

In our condensed consolidated balance sheets at September 30, 2020 and December 31, 2019, we have included approximately $ 84.5 million and $ 100.3 million, respectively, of accounts receivable and approximately $ 10.7 million and $ 7.0 million of accounts payable and accrued liabilities related to the Group, respectively.

In our condensed consolidated balance sheets at March 31, 2021 and December 31, 2020, we have included approximately $ 89.9 million and $ 82.3 million, respectively, of

accounts receivable and approximately $ 20.5 million and $ 15.2 million of accounts payable and accrued liabilities related to the Group, respectively.

The creditors of the Group do not have recourse to our general credit and there are no other arrangements that could expose us to losses on their behalf.

However, RadNet may be required to provide financial support to cover any operating expenses in excess of operating revenues.

However, we may be required to provide financial support to cover any operating expenses in excess of operating revenues.

We also own a 49 % economic interest in ScriptSender, LLC, which provides secure data transmission services of medical information.

Through a management agreement, RadNet provides management and accounting services and receives an agreed upon fee.

ScriptSender, LLC is dependent on the Company to finance its own activities, and as such we determined that it is a VIE but we are not a primary beneficiary since we do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance.

ScriptSender, LLC is dependent on RadNet to finance its own activities, and as such we determined that it is a VIE but we are not a primary beneficiary since we do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance.

At all of our centers not serviced by the Group we have entered into long-term contracts (typically up to 40 years) with independent radiology groups to provide physician services at those centers.

6 unchanged sentences

generally accepted accounting principles for complete financial statements;

however, in the opinion of our management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods ended September 30, 2020 and 2019 have been made.

however, in the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods ended March 31, 2021 and 2020 have been made.

The results of operations for any interim period are not necessarily indicative of the results for a full year.

10 unchanged sentences

As it relates to the Group, this service fee revenue includes payments for both the professional medical interpretation revenue recognized by them as well as the payment for all other aspects related to our providing the imaging services, for which we earn management fees.

As it relates to others centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payors.

4 unchanged sentences

Revenue under capitation arrangements is recognized in the period in which we are obligated to provide services to plan enrollees under contracts with various health plans.

Our total service revenues during the three and nine months ended September 30, 2020 and 2019 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):

Our total service revenues during the three months ended March 31, 2021 and 2020 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):

Three Months Ended

September 30, Nine Months Ended

September 30,

2020 2019 2020 2019

Commercial insurance $ 182,096 $ 155,461

10 unchanged sentences

COVID-19 PANDEMIC AND CARES ACT FUNDING - On March 11, 2020 the World Health Organization (WHO) designated COVID-19 as a global pandemic.

Patient volumes and the related revenues for our services were significantly impacted during the latter portion of the first quarter through the middle of the third quarter of 2020 as a result of federal, state and local government mandated restrictions requiring many people to remain at home and forced the closure of or limitations on certain businesses, as well as suspended elective procedures by health care facilities.

Many of these restrictions have been eased or completely lifted across the states the Company operates in however, we are unable to predict the future impact of the pandemic on our operations.

During the nine months ended September 30, 2020, we received $ 39.4 million of accelerated Medicare payments, $ 5.0 million from Blue Cross, $ 25.7 million from the general distribution and $ 4.0 million from the Paycheck Protection Program established through the Coronavirus Aid, Relief and Economic Security (“CARES”) Act.

The accelerated Medicare payments are recorded under the caption “ Deferred Revenue“ in our condensed consolidated balance sheet and will be repaid beginning in 2021.

The general distribution funds were accounted for as government grants and recognized as other revenue, once reasonable assurance that the applicable terms and conditions required to retain the funds were met, under the caption “Provider relief funding” in our condensed Consolidated Statements of Operations

During the three months ended September 30, 2020, the Department of Health and Human Services significantly changed the measurement of Provider Relief Funds that providers are able to retain.

We received approximately $ 0.2 million in

funding and based on our assessment of the likelihood of meeting the applicable terms and conditions of the general distribution we continue to recognized the funds received as other revenue.

The CARES Act also providers for a payment deferral of the employer portion of Social Security tax incurred during the pandemic, allowing half of such payroll taxes to be deferred until December 2021 and the remaining half until December 2022.

At September 30, 2020, the Company had deferred $ 10.8 million of Social Security taxes.

These payment deferrals are recorded as payroll tax liability under the caption “Accounts payable, accrued expenses and other” in our condensed consolidated balance sheet.

We believe the extent of the COVID-19 pandemic’s impact on our operating results and financial condition has been and will continue to be driven by many factors, most of which are beyond our control and ability to forecast.

Such factors include, but are not limited to, the scope and duration of stay-at-home practices, business closures and restrictions, suspensions of elective procedures and continued decline in procedure volumes for an indeterminable length of time and incremental expenses required for supplies and personal protective equipment.

Because of these uncertainties, we cannot estimate the length or impact of the pandemic on our business.

If we incur declines in cash flows and results of operations, such declines could have an impact on the inputs and assumptions used in significant accounting estimates, including implicit prices concessions related to uninsured patient accounts, and potential impairment of goodwill and long-lived assets.

During the third quarter of 2020, procedure volumes increased and have had a positive impact on our patient revenue.

However, the impact of COVID-19 in future periods may vary and could adversely impact our results of operations.

RECLASSIFICATION –We have reclassified certain amounts previously classified as held for sale related to property and equipment and goodwill to conform to our 2020 presentation.

To aid businesses and stimulate the national economy, Congress passed the The Coronavirus Aid, Relief, and Economic Security ("CARES") Act, which was signed in to law on March 27, 2020.

Through March 31, 2021, we have received since inception of the various programs established by the CARES Act, $ 39.5 million of accelerated Medicare payments, $ 32.5 million from general distribution and $ 4.0 million from the Paycheck Protection Program.

In addition, we have received $ 5.0 million in advance payments from insurer Blue Shield.

The accelerated Medicare and Blue Shield payments are recorded to Deferred Revenue in our condensed consolidated balance sheet and will be applied to revenue as services are performed beginning in 2021.

For the three months ended March 31, 2021, $ 2.5 million of the accelerated Medicare and $ 2.5 million of the Blue Shield funds have been applied to revenue.

The amounts obtained from general distribution were accounted for as government grants and recognized as other revenue and displayed as Provider relief funding in our condensed consolidated statements of operations, of which $ 6.2 million of the total $ 32.5 million was received in the three months ended March 31, 2021.

The $ 4.0 million secured from the Paycheck Protection Program was accounted for as debt and in December 2020 we met the eligibility requirements under the government guidelines for forgiveness and the loans were written off to gain on extinguishment of debt.

The CARES Act also provides for a payment deferral of the employer portion of Social Security tax incurred during the pandemic, allowing half of such payroll taxes to be deferred until December 2021 and the remaining half until December 2022.

At March 31, 2021, the Company had in total $ 16.3 million of deferred Social Security taxes.

These payment deferrals

are recorded as payroll tax liability under the caption “Accounts payable, accrued expenses and other” in our condensed consolidated balance sheet.

ACCOUNTS RECEIVABLE - Substantially all of our accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients.

1 unchanged sentence

We continuously monitor collections from our payors and maintain an allowance for bad debts based upon specific payor collection issues that we have identified and our historical experience.

In regards to the credit loss standard, we have concluded that the historical credit loss experienced across our receivable portfolio is materially similar to any current expected credit losses estimated under the Current Expected Credit Loss ("CECL") model.

In 2018 and 2019 we entered into factoring agreements with various institutions and sold certain accounts receivable under non-recourse agreements in exchange for notes receivables from the buyers.

We have entered into factoring agreements with various institutions and sold certain accounts receivable under non-recourse agreements in exchange for notes receivables from the buyers.

These transactions are accounted for as a reduction in accounts receivable as the agreements transfer effective control over and risk related to the receivables to the buyers.

Proceeds on notes receivables are reflected as operating activities on our statement of cash flows and on our balance sheet as prepaid expenses and other current assets for the current portion and deposits and other for the long term portion.

At September 30, 2020 we have $ 20.4 million remaining to be collected on these agreements.

We do not utilize factoring arrangements as an integral part of our financing for working capital.

To employ the CECL model for the notes receivable, we assess the party's ability to pay upfront at the inception of the notes receivable and subsequently by reviewing their financial statements annually and reassessing any insolvency risk on a periodic basis.

In the event of a significant past due balance, as the sold receivables were already revalued and recorded at net realizable value, we can mitigate the expected credit loss by offsetting any collections from the underlying factored receivables and not remitting that to the counter party.

DEFERRED REVENUE - As noted above, in April of 2020, we received approximately $ 39.4 million in advanced Medicare payments from the Centers for Medicare and Medicaid Services ("CMS") as part of the expanded Accelerated and Advance Payment Program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

As these payments are required to be repaid to CMS beginning 120 days after their receipt through offsets from new Medicare claims over a three month period, we have recorded amounts received to deferred revenue which will be amortized as Medicare reimbursements are earned.

In addition, in May of 2020 we received $ 5.0 million in advance payments from an insurance carrier with similar repayment terms as the CMS.

At March 31, 2021 we have $ 20.5 million remaining to be collected on these agreements.

We do not utilize factoring arrangements as an integral part of our financing for working capital and assess the party's ability to pay upfront at the inception of the notes receivable and subsequently by reviewing their financial statements annually and reassessing any insolvency risk on a periodic basis.

DEFERRED FINANCING COSTS - Costs of financing are deferred and amortized using the effective interest rate method.

Deferred financing costs, net of accumulated amortization, were $ 1.9 million and $ 1.6 million, as of September 30, 2020 and December 31, 2019, respectively and related to our Barclays line of credit.

Deferred financing costs, net of accumulated amortization, were $ 1.6 million and $ 1.8 million, as of March 31, 2021 and December 31, 2020, respectively and related to our Barclays Revolving Credit Facility.

See Note 5, Credit Facilities and Notes Payable for more information.

8 unchanged sentences

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.

GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at September 30, 2020 totaled $ 470.7 million.

Indefinite lived intangible assets at September 30, 2020 were $ 11.3 million.

GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at March 31, 2021 totaled $ 502.6 million.

Indefinite lived intangible assets at March 31, 2021 were $ 7.1 million.

Goodwill and Indefinite Lived Intangibles are recorded as a result of business combinations.

2 unchanged sentences

In addition to the annual impairment test, we regularly assess if an event has occurred which would require interim impairment testing.

We considered the current and expected future economic and market conditions surrounding the novel strain of coronavirus ("COVID-19") pandemic and did not identify an indication of goodwill impairment being more likely than not through September 30, 2020.

Activity in goodwill for the nine months ended September 30, 2020 is provided below (in thousands):

We considered the current and expected future economic and market conditions surrounding COVID-19 pandemic and did not identify an indication of goodwill impairment being more likely than not through March 31, 2021.

Activity in goodwill for the three months ended March 31, 2021 is provided below (in thousands):

Balance as of December 31, 2020 $ 472,879

Goodwill acquired through the acquisition of Olney Open MRI, LLC 601

Goodwill acquired through the acquisition of MRI at Woodbridge, LLC 1,833

Goodwill acquired through the acquisition of DeepHealth, Inc.

Goodwill acquired through the acquisition of AZ-Tech Radiology & Open MRI, LLC 2,882

Balance as of September 30, 2020 $ 470,685

Goodwill acquired through acquisitions 29,609

Goodwill attributable to formation of Simi Valley Imaging Group LLC 105

Other Adjustments ( 27 )

Balance as of March 31, 2021 $ 502,566

INCOME TAXES - Income tax expense is computed using an asset and liability method and using expected annual effective tax rates.

1 unchanged sentence

The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized.

When it appears more likely than not that deferred taxes will not be realized, a valuation allowance is recorded to reduce the deferred tax asset to its estimated realizable value.

When it appears more likely than not that deferred taxes will not be realized, a valuation allowance is recorded to reduce the deferred tax

asset to its estimated realizable value.

For net deferred tax assets we consider estimates of future taxable income in determining whether our net deferred tax assets are more likely than not to be realized.

We recorded an income tax expense of $ 3.8 million, or an effective tax rate of 27.2 %, for the three months ended September 30, 2020 compared to an income tax expense of $ 1.8 million, or an effective tax rate of 26.3 % for the three months ended September 30, 2019.

We recorded an income tax benefit of $ 5.0 million, or an effective tax rate of 28.3 %, for the nine months ended September 30, 2020 compared to an income tax expense of $ 3.6 million , or an effective tax rate of 24.8 % for the nine months ended September 30, 2019.The income tax rates for the three and nine months ended September 30, 2020 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships;

We recorded income tax expense of $ 4.4 million, or an effective tax rate of 24.1 %, for the three months ended March 31, 2021 compared to a benefit from income taxes of $ 4.4 million, or an effective tax rate of 23.8 % for the three months ended March 31, 2020.

The income tax rates for the three months ended March 31, 2021 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships;

(ii) effects of state income taxes;

1 unchanged sentence

We believe no significant changes in the unrecognized tax benefits will occur within the next 12 months.

On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act").

The CARES Act, among other things, includes certain income tax provisions for individuals and corporations;

On March 27, 2020, the President of the United States signed into law the CARES Act, which among other things, includes certain income tax provisions for individuals and corporations;

however, these benefits do not impact the Company’s current tax provision.

8 unchanged sentences

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For a contract in which we are a lessee that contains fixed

payments for both lease and non-lease components, we have elected to account for the components as a single lease component, as permitted.

For a contract in which we are a lessee that contains fixed payments for both lease and non-lease components, we have elected to account for the components as a single lease component, as permitted.

For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.

1 unchanged sentence

Our ROU assets consist of facility and equipment assets on operating leases.

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets in 2020.

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of March 31, 2021.

Our facility leases require us to maintain insurance policies which would cover major damage to our facilities.

14 unchanged sentences

2017 Equity Incentive Plan.

See Note 4, Facility Acquisitions and Note 6, Stock-Based Compensation, for more information.

See Note 6, Stock-Based Compensation, for more information.

COMPREHENSIVE INCOME (LOSS) - ASC 220 establishes rules for reporting and displaying comprehensive income or loss and its components.

Our unrealized gains or losses on foreign currency translation adjustments, interest rate cap and swap agreements are included in comprehensive loss and are included in the consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020 and 2019 .

COMMITMENTS AND CONTINGENCIES - We are party to various legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business.

2 unchanged sentences

However, the outcome of these matters is inherently uncertain.

Therefore, if one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

Therefore, if one or more of

these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

DERIVATIVE INSTRUMENTS

In the fourth quarter of 2016, we entered into two forward interest rate cap agreements ("2016 Caps").

The 2016 Caps will mature in September and October 2020.

The 2016 Caps had notional amounts of $ 150,000,000 and $ 350,000,000 , respectively.

Under these arrangements, the Company purchased a cap on 3 month LIBOR at 2.0 %.

We incurred a $ 5.3 million premium to enter into the 2016 Caps which is being accrued over the life of the agreements.

At inception, we designated our 2016 Caps as cash flow hedges of floating-rate borrowings.

In accordance with accounting guidance, derivatives that have been designated and qualify as cash flow hedging instruments are reported at fair value.

The gain or loss of the hedge (i.e.

change in fair value) is reported as a component of comprehensive loss in the consolidated statement of equity since such hedge has been determined to be effective.

See Fair Value Measurements section below for the fair value of the 2016 Caps at September 30, 2020.

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2016 Caps is as follows (amounts in thousands):

For the three months ended September 30, 2020

Account July 1, 2020 Balance Amount of comprehensive gain recognized on derivative net of taxes September 30, 2020 Balance Location

Accumulated Other Comprehensive Loss, net of taxes ( 1,409 ) 195 ( 1,214 ) Liabilities and Equity

For the nine months ended September 30, 2020

Account January 1, 2020 Balance Amount of comprehensive gain recognized on derivative net of taxes September 30, 2020 Balance Location

Accumulated Other Comprehensive Loss, net of taxes ( 1,877 ) 663 ( 1,214 ) Liabilities and Equity

In the second quarter of 2019, we entered into four forward interest rate agreements ("2019 Swaps").

9 unchanged sentences

The remaining gain or loss, if any, is recognized currently in earnings.

As a result of the economic impact of the coronavirus pandemic, which precipitated a reduction in interest rates , the cash flows for both our $ 400,000,000 notional interest rate swap contract locked in at 2.05 % due October 2025 and our $ 100,000,000 notional interest rate swap contract locked in at 1.96 % do not match the cash flows for our First Lien Term Loans and so we have determined that they are not currently effective as cash flow hedges.

The cash flows for both our $ 400,000,000 notional interest rate swap contract locked in at 2.05 % due October 2025 and our $ 100,000,000 notional interest rate swap contract locked in at 1.96 % do not match the cash flows for our First Lien Term Loans and so we have determined that they are not currently effective as cash flow hedges.

Accordingly, all changes in their fair value after April 1, 2020 for the $ 400,000,000 notional and after July 1, 2020 for the $ 100,000,000 notional will be recognized in earnings.

As of July 1, 2020, the total change in fair value relating to swaps included in other comprehensive income was approximately $ 24.4 million, net of taxes.

This amount will be amortized to interest expense through October 2025 at approximately $ 0.4 million per month.

This amount will be amortized to interest expense through October 2023 at approximately $ 0.4 million per month and continuing at approximately $ 0.3 million through October 2025.

A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):

For the three months ended September 30, 2020

Account July 1, 2020 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes September 30, 2020 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $ ( 24,406 ) $ — $ 969 $ ( 23,437 ) Liabilities and Equity

For the nine months ended September 30, 2020

Account January 1, 2020 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes September 30, 2020 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $ ( 5,870 ) $ ( 19,428 ) $ 1,861 $ ( 23,437 ) Liabilities and Equity

A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps for the Swaps that became ineffective during the third quarter is as follows (amounts in thousands):

For the three months ended September 30, 2020

Ineffective interest rate swap Amount of loss recognized in income on derivative (current period ineffective portion) Location of loss recognized in Income on derivative (current period ineffective portion) Amount of loss reclassified from accumulated OCI into income (prior period effective portion) Location of gain (Loss) reclassified from accumulated OCI into income (prior period effective portion)

Interest rate contracts $ ( 679 ) Other income (expense) $ ( 1,312 ) Equity and Interest Expense

For the nine months ended September 30, 2020

Interest rate contracts $ ( 4,523 ) Other income (expense) $ ( 2,204 ) Equity and Interest Expense

See Fair Value Measurements section below for the fair value of the 2016 caps and 2019 swaps at September 30, 2020.

For the three months ended March 31, 2021

Account January 1, 2021 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes March 31, 2021 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $ ( 22,581 ) $ — $ 925 $ ( 21,656 ) Equity

For the twelve months ended December 31, 2020

Accumulated Other Comprehensive Loss, net of taxes $ ( 5,870 ) $ ( 19,352 ) $ 2,641 $ ( 22,581 ) Equity

A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):

For the three months ended March 31, 2021

Ineffective interest rate swap Amount of gain recognized in income on derivative (current period ineffective portion) Location of gain recognized in Income on derivative (current period ineffective portion) Amount of loss reclassified from accumulated OCI into income (prior period effective portion) Location of loss reclassified from accumulated OCI into income (prior period effective portion)

Interest rate contracts $ 11,245 Other income (expense) $ ( 925 ) Interest Expense

See Fair Value Measurements section below for the fair value of the 2019 Swaps at March 31, 2021.

FAIR VALUE MEASUREMENTS – Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy.

8 unchanged sentences

The tables below summarize the estimated fair values of certain of our financial assets that are subject to fair value measurements, and the classification of these assets on our condensed consolidated balance sheets, as follows (in thousands):

As of September 30, 2020

As of March 31, 2021

Level 1 Level 2 Level 3 Total

Current and long term liabilities

2016 caps - Interest Rate Contracts $ — $ 182 $ — $ 182

2019 Swaps - Interest Rate Contracts $ — $ 26,744 $ — $ 26,744

2 unchanged sentences

Current and long term liabilities

2016 caps - Interest Rate Contracts $ — $ 1,081 $ — $ 1,081

2019 Swaps - Interest Rate Contracts $ — $ 37,989 $ — $ 37,989

4 unchanged sentences

The table below summarizes the estimated fair value compared to our face value of our long-term debt as follows (in thousands):

As of September 30, 2020

As of March 31, 2021

Level 1 Level 2 Level 3 Total Fair Value Total Face Value

1 unchanged sentence

As of December 31, 2020

Level 1 Level 2 Level 3 Total Total Face Value

Level 1 Level 2 Level 3 Total Fair Value Total Face Value

First Lien Term Loans and SunTrust Term Loan $ — $ 661,640 $ — $ 661,640 $ 662,403

As of September 30, 2020 and at December 31, 2019 our Barclays revolving credit facility had no balance outstanding.

Our SunTrust revolving credit facility relating to our consolidated subsidiary NJIN, had no principal amount outstanding at September 30, 2020 and at December 31, 2019.

The estimated fair value of our long-term debt, which is discussed in Note 5, was determined using Level 2 inputs primarily related to comparable market prices.

As of March 31, 2021 and at December 31, 2020 our Barclays revolving credit facility had no balance outstanding.

Our SunTrust revolving credit facility relating to our consolidated subsidiary The New Jersey Imaging Network ("NJIN"), had no principal amount outstanding at March 31, 2021 and at December 31, 2020.

The estimated fair value of our long-term debt, which is discussed in Note 5, Credit Facilities and Notes Payable, was determined using Level 2 inputs primarily related to comparable market prices.

We consider the carrying amounts of cash and cash equivalents, receivables, other current assets, current liabilities and other notes payables to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment.

1 unchanged sentence

EARNINGS PER SHARE - Earnings per share is based upon the weighted average number of shares of common stock and common stock equivalents outstanding, net of common stock held in treasury, as follows (in thousands except share and per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Net income (loss) attributable to RadNet, Inc.'s common stockholders $ 9,458 $ ( 16,358 )

14 unchanged sentences

If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost, adjusted for observable price changes and impairments, with changes recognized in net income.

As of September 30, 2020, we have three equity investments for which a fair value is not readily determinable and therefore the total amounts invested are recognized at cost as follows:

As of March 31, 2021, we have three equity investments for which a fair value is not readily determinable and therefore the total amounts invested are recognized at cost as follows:

Medic Vision Imaging Solutions Ltd., based in Israel, specializes in software packages that provide compliant radiation dose structured reporting and enhanced images from reduced dose CT scans.

On March 24, 2017, we acquired an initial 12.5 % equity interest in Medic Vision for $ 1.0 million.

We also received an option to exercise warrants to acquire up to an additional 12.5 % equity interest for $ 1.4 million within one year from the initial share purchase date, if exercised in full.

On March 1, 2018 we exercised our warrant in part and acquired an additional 1.96 % for $ 0.2 million.

Our initial equity interest has been diluted to 12.25 % and our total equity investment stands at 14.21 %.

In accordance with accounting guidance , as we exercise no significant influence over Medic Vision’s operations, the investment is recorded at its cost of $ 1.2 million, given that the fair value is not readily determinable.

No observable price changes or impairment in our investment was identified as of September 30, 2020.

Our investment of $ 1.2 million represents a 14.21 % equity interest in the company.

No observable price changes or impairment in our investment was identified as of March 31, 2021.

Turner Imaging Systems, based in Utah, develops and markets portable X-ray imaging systems that provide a user the ability to acquire X-ray images wherever and whenever they are needed.

1 unchanged sentence

On January 1, 2019 we funded a convertible promissory note in the amount of $ 0.1 million that converted to additional 80,000 shares December 21, 2019.

No observable price changes impairment in our investment was identified as of September 30, 2020.

No observable price changes or impairment in our investment was identified as of March 31, 2021.

WhiteRabbit.ai Inc., based in California, is currently developing an artificial intelligence suite which aims to improve the speed and accuracy of cancer detection in radiology and improve patient care.

On November 5, 2019 we acquired an equity interest in the company for $ 1.0 million and also loaned the company $ 2.5 million, the principal of which is due November 2022.

To leverage their artificial intelligence expertise, we entered into a software subscription service contract to assist our radiology work flow and advanced them $ 4.0 million for future software subscription fees that is recorded as a prepaid expense in Prepaid and Other Current assets in our consolidated balance sheets.

No observable price changes or impairment in our investment or the loan receivable was identified as of September 30, 2020.

On November 5, 2019 we acquired an equity interest in the company for $ 1.0 million and also loaned the company $ 2.5 million in support of its operations.

No observable price changes, impairment in our investment or impairment of the loan receivable was identified as of March 31, 2021.

INVESTMENT IN JOINT VENTURES – We have 13 unconsolidated joint ventures with ownership interests ranging from 35 % to 55 %.

3 unchanged sentences

We evaluate our investment in joint ventures, including cost in excess of book value (equity method goodwill) for impairment whenever indicators of impairment exist.

No indicators of impairment existed as of September 30, 2020.

Joint venture investment contribution

In the month of August 2020, we made additional cash contributions to our Santa Monica Imaging Group, LLC partnership in the amount of $ 1.6 million in support of its expanded operations.

We maintain our 35 % economic interest in the partnership.

No indicators of impairment existed as of March 31, 2021.

Joint venture investment and financial information

The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2020 (in thousands):

The following table is a summary of our investment in joint ventures during the three months ended March 31, 2021 (in thousands):

Balance as of December 31, 2020 $ 34,528

Equity in earnings in these joint ventures 2,285

Distribution of earnings ( 5,706 )

Equity contributions in existing joint ventures 1,631

Balance as of September 30, 2020 $ 35,571

We charged management service fees from the centers underlying these joint ventures of approximately $ 2.7 million and $ 1.8 million for the three months ended September 30, 2020 and 2019, respectively, and $ 8.6 million and $ 7.8 million for the nine months ended September 30, 2020 and 2019, respectively.

We eliminate any unrealized portion of our management service fees with our equity in earnings of joint ventures.

The following table is a summary of key balance sheet data for these joint ventures as of September 30, 2020 and December 31, 2019 and income statement data for the nine months ended September 30, 2020 and 2019 (in thousands):

Balance as of March 31, 2021 $ 36,813

We charged management service fees from the centers underlying these joint ventures of approximately $ 5.2 million and $ 2.6 million for the three months ended March 31, 2021 and 2020, respectively.

The following table is a summary of key balance sheet data for these joint ventures as of March 31, 2021 and December 31, 2020 and income statement data for the three months ended March 31, 2021 and 2020 (in thousands):

Balance Sheet Data:

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Current assets $ 33,265 $ 27,085

6 unchanged sentences

Total value of RadNet joint venture interests $ 36,813 $ 34,528

Total book value of other joint venture partner interests $ 34,835 $ 32,374

Income statement data for the nine months ended September 30, 2020 2019

Income statement data for the three months ended March 31, 2021 2020

Net revenue $ 31,718 $ 26,341

Net income $ 4,803 $ 4,245

NOTE 3 – RECENT ACCOUNTING AND REPORTING STANDARDS

NOTE 3 – RECENT ACCOUNTING AND REPORTING STANDARD

Accounting standards adopted

In June 2016, the FASB issued ASU No.

2016-13 ("ASU 2016-13), Financial Instruments - Credit Losses.

ASU 2016-13 replaces the incurred loss methodology previously utilized for valuing financial instruments with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology.

We prospectively adopted the standard on January 1, 2020 and the adoption did not have a material impact to the condensed consolidated financial statements, resulting in no adjustments to our prior year earnings.

See the Accounts Receivable section to Note 2 for further information on our allowances for credit losses.

In August 2018, the FASB issued ASU No.

2018-15 (“ASU 2018-15”), Intangibles-Goodwill and Other-Internal-Use Software.

ASU 2018-15 aligns the requirements for deferring implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software.

This ASU is effective in the first quarter of 2020 with early adoption permitted and can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

The adoption of this standard did not have a material impact on our condensed consolidated balance sheet.

In March 2020, the FASB issued ASU 2020-03 ("ASU 2020-03"), Codification Improvements to Financial Instruments .

The amendments in this update represent changes to clarify or improve the codification and correct unintended application.

ASU 2020-03 was effective immediately upon issuance and its adoption did not have a material impact on our financial statements.

In August 2018, the FASB issued ASU No.

2018-13 ("ASU 2018-13"), Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurements .

This standard removes, modifies and adds certain disclosures related to recurring and nonrecurring fair value measurements.

We adopted ASC 2018-13 effective January 1, 2020 and it had no effect on our disclosures.

Accounting standards not yet adopted

In December 2019, the FASB issued ASU 2019-12 ("ASU 2019-12"), Income Taxes (Topic 740).

ASU 2019-12 removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other areas of the standard.

ASU 2019-12 will be effective beginning in the first quarter of 2021.

Early adoption is permitted.

Certain amendments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption.

We are currently evaluating the impact this ASU will have on our financial statements and related disclosures as well as the timing of adoption.

In January 2020, the FASB issued ASU 2020-01 ("ASU 2020-01"), Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815), clarifying the interaction between accounting standards related to equity securities, equity method investments, and certain derivatives.

ASU 2020-01 is effective for fiscal years beginning after December 15, 2020.

We do not expect the adoption of this guidance will have a material impact on our financial statements.

In January 2021, the FASB issued ASU 2021-01 ("ASU 2021-01"), Reference Rate Reform (Topic 848), Scope .

ASU 2021-01 provides clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain option expedients and exceptions in Topic 848.

The guidance is effective upon issuance and generally can be applied through December 31, 2022.

We are currently evaluating the potential impact of ASU 2021-01 on our financial statements.

In March 2020, the FASB issued ASU 2020-04 ("ASU 2020-04"), Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting .

2 unchanged sentences

We are currently evaluating the potential impact of ASU 2020-04 on our financial statements.

NOTE 4 – FACILITY ACQUISITIONS AND DISPOSITIONS

Acquisitions:

On August 31, 2020 we completed our acquisition of certain assets of AZ-Tech Radiology & Open MRI, LLC, consisting of eight multi-modality imaging centers located in the Phoenix, Arizona area for purchase consideration of $ 5.5 million.

We made a preliminary fair value determination of the acquired assets and assumed liabilities and approximately $ 2.5 million in property and equipment, $ 7.6 million in right-of-use assets, $ 0.1 million in other assets, $ 7.6 million in operating lease liabilities, and $ 2.9 million in goodwill were recorded.

On June 1, 2020, we completed our acquisition of all the equity interests of DeepHealth Inc., ("DeepHealth") an artificial intelligence and machine learning company in an all stock purchase.

As initial purchase consideration, we issued 915,132 shares at $ 16.93 per share ( 823,615 issued at execution, with up to 91,517 shares to be issued 18 months after acquisition subject to adjustment for any indemnification claims).

The transaction was accounted for as an acquisition of a business and total purchase consideration determined to be approximately $ 34.6 million including i) 823,615 shares issued on the date of closing with fair value of $ 13.9 million, ii) a liability of 91,517 shares with a fair value of $ 1.5 million to be issued 18 months after acquisition subject to adjustment for any indemnification claims and will be marked to market in subsequent periods, iii) replacement awards attributable to pre-combination service issued to DeepHealth option holders with allocated fair value of $ 2.0 million, iv) acquisition date fair value of contingent consideration of $ 17.0 million and v) $ 0.1 million in closing costs reimbursed to the seller.

The fair values of replacement awards attributable to pre-combination service and contingent consideration are recorded in additional paid in capital upon closing of the transaction.

For the contingent consideration, there are three arrangements that will be settled in a fixed number of shares upon achievement of three individual specific milestones which are mutually exclusive of each other, with 390,789 , 586,184 , and 195,393 shares, respectively, issuable for each milestone arrangement.

The fair value of the contingent consideration was estimated at the date of acquisition based on our share price and estimated probability of the achievement of the respective milestones.

We preliminarily recorded $ 0.1 million in current assets, $ 3.5 million in deferred tax liabilities, $ 14.8 million in intangible assets, primarily in-process research and development ("IPR&D'), and $ 23.4 million in goodwill.

The goodwill is primarily attributable to expected post-acquisition synergies from integrating DeepHealth’s assembled workforce and IPR&D technologies.

The fair values of the identifiable intangible assets related to IPR&D were determined by the income method and the assets will not be amortized until completion.

On March 2, 2020 our consolidated subsidiary New Jersey Imaging Networks ("NJIN") completed the acquisition of certain assets of MRI at Woodbridge, LLC consisting of a single multi-modality imaging center located in Avenel, New Jersey for cash consideration of $ 2.6 million.

NJIN made a fair value determination of the acquired assets and assumed liabilities and approximately $ 0.5 million in property and equipment, $ 1.1 million in right-of-use assets, $ 0.3 million in intangible assets, $ 1.1 million in operating lease liabilities, $ 0.1 million in finance lease liabilities, and $ 1.8 million in goodwill were recorded.

On January 2, 2020 we completed our acquisition of certain assets of Olney Open MRI, LLC, consisting of a single multi-modality imaging center located in Columbia, Maryland for cash consideration of $ 1.8 million.

We have made a fair value determination of the acquired assets and assumed liabilities and approximately $ 0.8 million in property and equipment, $ 1.3 million in right-of-use assets, $ 0.3 million in intangible assets, $ 1.3 million in operating lease liabilities and $ 0.6 million in goodwill were recorded.

Dispositions:

On June 1, 2020 we completed our sale of certain assets of our Imaging On Call subsidiary to RadVantage P.C.

(an unrelated corporation) for approximately $ 1.0 thousand.

With this transaction, we have exited the teleradiology business.

ASU 2020-01 is effective for fiscal years beginning after December 15, 2020.

The adoption did not have a material impact on our financial statements.

In December 2019, the FASB issued ASU 2019-12 ("ASU 2019-12"), Income Taxes (Topic 740).

It also clarifies and simplifies other areas of the standard.

ASU 2019-12 is effective beginning in the first quarter of 2021.

The adoption did not have a material impact on our financial statements.

NOTE 4 – FACILITY ACQUISITIONS

During the first quarter of 2021, we completed the acquisition of certain assets of the following entities, all located in the New York city area.

We made a preliminary fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands):

Entity Acquired Total Purchase Consideration Property & Equipment Right of Use Assets Goodwill Intangible Assets Other Assets Right of Use Liabilities

Personal Health Imaging PLLC $ 2,995 $ 576 $ 608 $ 2,355 $ 50 $ 14 $ ( 608 )

ZP Elmont LLC 2,194 1,112 1,695 1,005 50 27 ( 1,695 )

ZP Freeport LLC 6,065 3,968 2,361 2,018 50 29 ( 2,361 )

Broadway Medical Imaging LLC 1,155 1,076 1,791 6 50 23 ( 1,791 )

3235 Hempstead LLC 9,386 4,304 10,115 5,032 50 — ( 10,115 )

SLZM Realty LLC 13,671 3,862 7,715 9,759 50 — ( 7,715 )

2012 Sunrise Merrick LLC 11,428 2,363 5,919 9,015 50 — ( 5,919 )

ZP Bayside LLC 3,545 3,385 9,393 40 50 70 ( 9,393 )

ZP Laurelton LLC 2,658 2,530 5,157 32 50 46 ( 5,157 )

ZP Smith LLC 3,978 3,581 10,558 347 50 — ( 10,558 )

Total $ 57,075 $ 26,757 $ 55,312 $ 29,609 $ 500 $ 209 $ ( 55,312 )

Formation of majority owned subsidiary

On January 1, 2021 we entered into the Simi Valley Imaging Group, LLC, a partnership with Simi Valley Hospital and Health Services ("Simi Adventist").

The operation will offer multi-modality imaging services out of two locations in Ventura County, California.

Total investment in the venture is $ 0.4 million.

RadNet contributed $ 0.3 million in assets for a 60 % economic interest and Simi Adventist contributed assets totaling $ 0.1 million for a 40 % economic interest.

NOTE 5 – CREDIT FACILITIES AND NOTES PAYABLE

As of September 30, 2020 and December 31, 2019 our debt obligations consisted of the following (in thousands):

September 30,

As of March 31, 2021 and December 31, 2020 our debt obligations consisted of the following (in thousands):

2021 December 31,

2 unchanged sentences

SunTrust Term Loan Agreement collateralized by NJIN's tangible and intangible assets 50,250 51,375

Paycheck Protection Program loans at 1 % due April 2022

Equipment note payable at 4.6 %, due through 2020, collateralized by medical equipment

Total debt obligations 642,850 652,704

1 unchanged sentence

Long term portion debt obligations $ 602,684 $ 612,913

Included in our condensed consolidated balance sheets at September 30, 2020 are $ 620.7 million of First Lien Term Loans and $ 52.5 million of SunTrust Term Loan debt for a combined total of $ 673.2 million of total term loan debt (exclusive of unamortized discounts of $ 10.7 million) in thousands:

Included in our condensed consolidated balance sheets at March 31, 2021 are $ 601.3 million of First Lien Term Loans and $ 50.3 million of SunTrust Term Loan debt for a combined total of $ 651.6 million of total term loan debt (exclusive of unamortized discounts of $ 8.7 million) in thousands:

Face Value Discount Total Carrying

2 unchanged sentences

Total Term Loans $ 651,580 $ ( 8,730 ) $ 642,850

We had no balance under our $ 195.0 million Barclays Revolving Credit Facility at September 30, 2020 and have reserved $ 6.3 million for certain letters of credit.

The remaining $ 188.7 million of our Barclays Revolving Credit Facility was available to draw upon as of September 30, 2020.

We had no balance under our $ 30.0 million SunTrust Revolving Credit Facility related to our consolidated subsidiary NJIN at September 30, 2020.

We had no outstanding balance under our $ 195.0 million Barclays Revolving Credit Facility at March 31, 2021 and have reserved $ 7.9 million for certain letters of credit.

The remaining $ 187.1 million of our Barclays Revolving Credit Facility was available to draw upon as of March 31, 2021.

We had no outstanding balance under our $ 30.0 million SunTrust Revolving Credit Facility at March 31, 2021.

As of March 31, 2021, we were in compliance with all covenants under our credit facilities.

Senior Secured Credit Facilities

Barclays Credit Facilities:

At September 30, 2020, (a) our Barclays credit facilities were comprised of one tranche of term loans (“First Lien Term Loans”) and a revolving credit facility of $ 195.0 million (the “Barclays Revolving Credit Facility”) and (b) our SunTrust credit facilities, which relate to our consolidated subsidiary NJIN, were comprised of one term loan (the "SunTrust Term Loan") and a revolving credit facility of $ 30.0 million (the "SunTrust Revolving Credit Facility").

As of September 30, 2020, we were in compliance with all covenants under our credit facilities.

Deferred financing costs at September 30, 2020, net of accumulated amortization, was $ 1.9 million and is specifically related to our Barclays Revolving Credit Facility.

At March 31, 2021, our Barclays credit facilities were comprised of one tranche of term loans (“First Lien Term Loans”) in the principal amount described in the table above and a revolving credit facility of $ 195.0 million (the “Barclays Revolving Credit Facility”) both of which are provided pursuant to the Amended and Restated First Lien Credit and Guaranty Agreement dated July 1, 2016, among RadNet, Barclays Bank plc, as administrative agent, and the lenders identified therein (as amended, the "First Lien Credit Agreement").

Deferred financing costs at March 31, 2021, net of accumulated amortization, was $ 1.6 million and is specifically related to our Barclays Revolving Credit Facility.

Our First Lien Term Loans bear interest at either an Adjusted Eurodollar Rate or a Base Rate, plus an applicable margin according to the following schedule:

First Lien Leverage Ratio Eurodollar Rate Spread Base Rate Spread

> 5.50x 4.50 % 3.50 %

4.50 % 3.50 %

> 4.00 x but ≤ 5.50 x

3.75 % 2.75 %

> 3.50 x but ≤ 4.00 x

≤ 3.50x 3.25 % 2.25 %

At September 30, 2020 the effective Adjusted Eurodollar Rate and the Base Rate for the First Lien Term Loans was 1.00 % and 3.25 %, respectively and the applicable margin for Adjusted Eurodollar Rate and Base Rate borrowings was 3.75 % and 2.75 %, respectively.

3.50 % 2.50 %

3.25 % 2.25 %

At March 31, 2021 the effective Adjusted Eurodollar Rate and the Base Rate for the First Lien Term Loans was 1.00 % and 3.25 %, respectively and the applicable margin for Adjusted Eurodollar Rate and Base Rate borrowings was 3.50 % and 2.50 %, respectively.

The First Lien Credit Agreement provides for quarterly payments of principal under the First Lien Term Loans in the amount of approximately $ 9.7 million.

1 unchanged sentence

SunTrust Credit Facilities:

Our SunTrust Term Loan bears interest at either an Adjusted Eurodollar Rate or a Base Rate, plus an applicable margin according to the following schedule:

At March 31, 2021, our SunTrust credit facilities, which relate to our consolidated subsidiary NJIN, were comprised of one term loan in the principal amount described in the table above (the "SunTrust Term Loan") and a revolving credit facility of $ 30.0 million (the "SunTrust Revolving Credit Facility") both of which are provided pursuant to the Amended and Restated Revolving Credit and Term Loan Agreement dated August 31, 2018, among NJIN, as borrower, with SunTrust Bank, as administrative agent, and the lenders identified therein (as amended, the "SunTrust Credit Agreement").

Our SunTrust Term Loan bears interest at either an Adjusted LIBOR or a Base Rate (each as defined in the SunTrust Credit Agreement), plus an applicable margin according to the following schedule:

Pricing Level Leverage Ratio Applicable Margin for Eurodollar Loans Applicable Margin for Base Rate Loans Applicable Margin for Letter of Credit Fees Applicable Percentage for Commitment Fee

4 unchanged sentences

V Less than 1.50 :1.00

The loans and other obligations outstanding under the SunTrust Restated Credit Agreement currently bear applicable margin and fees based on Pricing Level III described above.

The loans outstanding under the SunTrust Restated Credit Agreement currently bear interest based on a three month Eurodollar election of 2.00 %, plus the applicable margin.

The loans and other obligations outstanding under the SunTrust Credit Agreement currently bear interest at a three month LIBOR election at 0.25 % plus an applicable margin and fees based on Pricing Level III described above.

The scheduled amortization of the SunTrust Term Loan began December 31, 2018 with quarterly payments of $ 0.8 million, representing annual amortization equal to 5.0 % of the original principal amount of the SunTrust Term Loan.

3 unchanged sentences

Barclays Revolving Credit Facility

Revolving loans borrowed under the Barclays Revolving Credit Facility bear interest at either an Adjusted Eurodollar Rate or a Base Rate plus an applicable margin.

Rates of the applicable margin for borrowing under the Revolving Credit Facility also change depending on our leverage ratio and are the same rates as noted in the schedule above for First Lien Term Loans.

As of September 30, 2020, the effective interest rate payable on revolving loans was 6.00 %.

Letters of credit issued under the Barclays Revolving Credit Facility, letter of credit fees accrue at the applicable margin of Adjusted Eurodollar Rate, currently 3.75 % , and fronting fees accrue at 0.25 % per annum, in each case on the average aggregate daily maximum amount available to be drawn under all letters of credit issued under the First Lien Credit Agreement.

In addition, a commitment fee of 0.50 % per annum accrues on the unused revolver commitments under the Revolving Credit Facility.

The Barclays Revolving Credit Facility will terminate on the earliest to occur of July 1, 2023 or its earlier termination to specific events of default pursuant to the First Lien Credit Agreement.

Our Barclays Revolving Credit Facility was amended in August 2020 to add $ 57.5 million of revolving commitments and extend the maximum borrowing capacity to $ 195.0 million.

Total issue costs added in relation to the eighth amendment amounted to approximately $ 0.7 million and was capitalized as deferred financing costs and will be amortized over the remaining term of the agreement.

Revolving loans borrowed under the Barclays Revolving Credit Facility bear interest at either an Adjusted Eurodollar Rate or a Base Rate (in each case, as more fully defined in the First Lien Credit Agreement) plus an applicable margin.

The applicable margin for borrowing under the Barclays Revolving Credit Facility varies based on our leverage ratio in accordance with the same schedule set forth above for First Lien Term Loans.

As of March 31, 2021, the effective interest rate payable on revolving loans under the Barclays Revolving Credit Facility was 5.75 %.

For letters of credit issued under the Barclays Revolving Credit Facility, letter of credit fees accrue at the applicable margin for Adjusted Eurodollar Rate, currently 3.50 % , and fronting fees accrue at 0.25 % per annum, in each case on the average aggregate daily maximum amount available to be drawn under all letters of credit issued under the First Lien Credit Agreement.

In addition, a commitment fee of 0.50 % per annum accrues on the unused revolver commitments under the Barclays Revolving Credit Facility.

The Barclays Revolving Credit Facility will terminate on the earlier of July 1, 2023 or termination due to specific events of default pursuant to the First Lien Credit Agreement.

Our Barclays Revolving Credit Facility was amended in August 2020 to add $ 57.5 million of revolving commitments, which additional commitments increased the maximum borrowing capacity to $ 195.0 million.

SunTrust Revolving Credit Facility

Our SunTrust Revolving Credit Facility is available to NJIN for funding requirements, with an available borrowing limit of $ 30.0 million.

Revolving loan borrowed under the SunTrust Revolving Credit Facility bear interest at either an Adjusted Eurodollar Rate or a Base Rate plus an applicable margin.

Rates of the applicable margin for borrowing under the Revolving Credit Facility also change depending on our leverage ration and are the same rates noted in the schedule above for the SunTrust Term Loan.

The SunTrust Revolving Credit Facility terminates on August 31, 2023 unless all amounts outstanding otherwise have been declared or have automatically become due and payable (whether by acceleration or otherwise).

NJIN has not borrowed against the revolving credit line.

The SunTrust Credit Agreement established a $ 30.0 million revolving credit facility available to NJIN for funding requirements.

The SunTrust Revolving Credit Facility terminates on the earliest of (i) August 31, 2023, (ii) the voluntary termination thereof by NJIN pursuant to Section 2.8 of the SunTrust Credit Agreement, or (iii) the date on which all amounts outstanding under the SunTrust Credit Agreement have been declared or have automatically become due and payable (whether

by acceleration or otherwise).

As of March 31, 2021, NJIN had no borrowings under the SunTrust Revolving Credit Facility.

Recent Amendments to credit facilities:

Barclays Credit Facilities:

On August 28, 2020, RadNet, Inc.

On April 23, 2021, after the period covered by this report, we entered into the Second Amended and Restated First Lien Credit and Guaranty Agreement which provides for $ 725.0 million of senior secured first lien term loans and a $ 195.0 million senior secured revolving credit facility.

See Note 7, Subsequent Events, for more information.

On August 28, 2020, RadNet Management, Inc.

and RadNet, Inc.

entered into Amendment No.

8, Consent and Incremental Joinder Agreement to Credit and Guaranty Agreement (the "Eighth Amendment").

The Eighth Amendment amends the First Lien Credit Agreement to add $ 57.5 million of revolving commitments to the Barclays Revolving Credit Facility extending the maximum borrowing capacity under the revolving credit facility to $ 195.0 million while leaving the maturity date of July 1, 2023 unchanged.

Total issue costs added in relation to the Eighth Amendment amounted to approximately $ 0.7 million and was capitalized as deferred financing costs and will be amortized over the remaining term of the agreement.

The Eighth Amendment amends the First Lien Credit Agreement to add $ 57.5 million of revolving commitments to the Barclays Revolving Credit Facility increasing the maximum borrowing capacity under the revolving credit facility to $ 195.0 million while leaving the maturity date of July 1, 2023 unchanged.

On April 18, 2019 we entered into the following two amendments to the First Lien Credit Agreement:

3 unchanged sentences

7 to Credit and Guaranty Agreement (the “Seventh Amendment”).

The Sixth Amendment amended the First Lien Credit Agreement to issue $ 100.0 million in incremental First Lien Term Loans and to add an additional $ 20.0 million of revolving commitments to the Barclay's Revolving Credit Facility.

Among other things, The Sixth Amendment amended the First Lien Credit Agreement to issue $ 100.0 million in incremental First Lien Term Loans and to add an additional $ 20.0 million of revolving commitments to the Barclays Revolving Credit Facility.

The Seventh Amendment amended the First Lien Credit Agreement to extend the maturity date of the Barclays Revolving Credit Facility by an additional two years to July 1, 2023, unless sooner terminated in accordance with the terms of the First Lien Credit Agreement.

1 unchanged sentence

Of this amount, $ 2.1 million was identified and capitalized as discount on debt, $ 0.7 million was capitalized as deferred financing costs, and $ 1.6 million was expensed.

Amounts capitalized will be amortized over the remaining term of the agreement.

Paycheck Protection Program

The Paycheck Protection Program (PPP) includes funds available for loans to small business and Medicare providers to support operations during the COVID-19 pandemic.

The funds are administered by the Small Business Administration (SBA), through approved lenders and do not require collateral or personal guarantees.

We received our loans based on being a Medicare provider.

The terms and conditions for participation require entities to certify that economic uncertainty related to the COVID-19 pandemic makes the loan necessary to support their current operations, and that they will use the funds to retain workers (e.g., by paying salaries, providing paid sick/medical leave and health insurance benefits) and pay certain debts (mortgage obligations) and expenses (e.g.

rent, utilities, telephone).

The loans have a 1.0 % fixed interest rate and are due in 2 years.

Initial repayments have been deferred for six months.

The loans are eligible for forgiveness subject to salary limitations and employee retention levels.

Certain of our consolidated subsidiaries received four loans totaling $ 4.0 million.

We have accounted for the funds received as debt and recorded a liability for the full amount of proceeds received.

Interest will be accrued over the term of the loans.

If we meet the eligibility requirements for forgiveness the amounts forgiven will be recognized in the income statement as a gain on loan extinguishment in accordance with accounting guidance.

Amounts capitalized will be amortized over the remaining term of the First Lien Credit Agreement.

NOTE 6 – STOCK-BASED COMPENSATION

6 unchanged sentences

Stock options generally vest over 3 to 5 years and expire 5 to 10 years from the date of grant.

As of September 30, 2020, we had outstanding options to acquire 527,899 shares of our common stock, of which options to acquire 298,863 shares were exercisable.

The following summarizes all of our option transactions for the nine months ended September 30, 2020:

As of March 31, 2021, we had outstanding options to acquire 527,899 shares of our common stock, of which options to acquire 433,202 shares were exercisable.

The following summarizes all of our option transactions for the three months ended March 31, 2021:

Outstanding Options

5 unchanged sentences

Balance, December 31, 2020 527,899 $ 9.34

Granted 48,948 20.43

Balance, September 30, 2020 527,899 9.34 6.59 $ 3,419,956

Exercisable at September 30, 2020 298,863 7.48 5.85 2,353,438

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on September 30, 2020 and the exercise price, multiplied by the number of in-the-money options as applicable) that would have been received by the holder had all holders exercised their options on September 30, 2020.

No options were exercised during the nine months ended September 30, 2020.

As of September 30, 2020, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 0.7 million which is expected to be recognized over a weighted average period of approximately 1.68 years.

Balance, March 31, 2021 527,899 9.34 6.09 $ 6,549,853

Exercisable at March 31, 2021 433,202 8.35 5.72 5,806,804

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on March 31, 2021 and the exercise price, multiplied by the number of in-the-money options as applicable) that would have been received by the holder had all holders exercised their options on March 31, 2021.

No options were exercised during the three months ended March 31, 2021.

As of March 31, 2021, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 0.5 million which is expected to be recognized over a weighted average period of approximately 1.30 years.

DeepHealth Options

During the second quarter of fiscal 2020, in connection with the completion of the DeepHealth acquisition, we granted 412,434 options at a grant date fair value of $ 16.93 per share unit to DeepHealth employees in replacement of their stock options that were outstanding as of the closing date.

As of September 30, 2020, total unrecognized stock based compensation expense related to non-vested DeepHealth options was approximately $ 4.3 million which is expected to be recognized over a weighted average period of approximately 2.53 years.

As of March 31, 2021, total unrecognized stock based compensation expense related to non-vested DeepHealth options was approximately $ 3.4 million which is expected to be recognized over a weighted average period of approximately 2.07 years.

Outstanding Options

5 unchanged sentences

Balance December 31, 2020 400,539 $ —

Granted, June 1, 2020 412,434 $ —

Exercised — —

Balance, September 30, 2020 405,471 — 8.65 $ 6,223,980

Exercisable at September 30, 2020 24,211 — 8.65 371,639

Balance, March 31, 2021 400,539 — 8.16 $ 8,711,723

Exercisable at March 31, 2021 33,647 — 8.16 731,822

Restricted Stock Awards

The Restated Plan permits the award of restricted stock awards (“RSA’s”).

As of September 30, 2020, we have issued a total of 6,551,872 RSA’s of which 331,659 were unvested at September 30, 2020.

The following summarizes all unvested RSA’s activities during the nine months ended September 30, 2020:

As of March 31, 2021, we have issued a total of 7,152,934 RSA’s of which 410,352 were unvested at March 31, 2021.

The following summarizes all unvested RSA’s activities during the three months ended March 31, 2021:

RSA's Weighted-Average

4 unchanged sentences

Vested ( 519,868 ) $ 17.59

RSA's unvested at September 30, 2020 331,659 1.11 $ 16.67

RSA's unvested at March 31, 2021 410,352 1.20 $ 17.71

We determine the fair value of all RSA’s based on the closing price of our common stock on the award date.

2 unchanged sentences

These awards are valued and expensed based on the closing price of our common stock on the date of award.

During the nine months ended September 30, 2020 awards totaling 26,078 shares were granted.

In summary, of the 14,000,000 shares of common stock reserved for issuance under the Restated Plan, at September 30, 2020, we had issued 15,384,316 total shares between options, RSA’s and other stock awards.

During the three months ended March 31, 2021 no such shares were granted.

In summary, of the 14,000,000 shares of common stock reserved for issuance under the Restated Plan, at March 31, 2021, we had issued 16,109,252 total shares between options, RSA’s and other stock awards.

With options canceled and RSA’s forfeited amounting to 3,281,040 and 61,703 shares, respectively, there remain 1,233,491 shares available under the Restated Plan for future issuance.

1 unchanged sentence

NOTE 7 – SUBSEQUENT EVENTS

Formation of majority owned subsidiary

On November 1, 2020 we formed in conjunction with Simi Valley Hospital and Health Services ("Simi Adventist") the Simi Valley Imaging Group, LLC (“SVIG”), consisting of three multi-modality imaging centers located in Simi Valley, CA.

RadNet will hold a 60 % economic interest in SVIG and Simi Adventist will have the remaining 40 % interest.

Refinancing of Barclays Credit Facilities:

The Second Amended and Restated First Lien Credit and Guaranty Agreement (the "Restated Credit Agreement"):

On April 23, 2021, we entered into the Restated Credit Agreement which provides for $ 725.0 million of senior secured first lien term loans and a $ 195.0 million senior secured revolving credit facility.

The proceeds of the loans are being used to refinance the outstanding $ 611.0 million term and revolving loans, to pay fees and expenses associated with the refinancing transaction, to pay accrued interest on the previously existing facilities through the date of closing and to fund approximately $ 102.0 million to our balance sheet.

The key terms of the Restated Credit Agreement are:

• Interest Rates:

Borrowings under the Restated Credit Agreement bear interest at either the Eurodollar Rate or the Alternate Base Rate and the floor for the term loans bearing interest at the Eurodollar Rate was reduced from a minimum of 1.00 % to a minimum of 0.75 %.

• Maturity Dates:

The maturity date for the term loans is April 23, 2028, and the maturity date for the revolving credit facility is April 23, 2026, in each case unless accelerated in accordance with the terms of the Restated Credit Agreement.

We will be required to make quarterly payments of principal on the terms loans in the amount of approximately $ 1.8 million compared to approximately $ 9.7 million under the prior credit agreement.

Acquisitions:

In the months of April and May, 2021 we acquired certain business assets for purchase consideration of approximately $ 5.0 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements