What changed in this filing

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Item 1. Financial Statements

2021-08-09 compared with 2021-05-10 · 223 added, 168 removed, 497 unchanged (44% of the section changed)

37 unchanged sentences

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

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

52,678,030 and 51,640,537 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in-capital 324,954 307,788

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Service fee revenue $ 295,494 $ 155,698 $ 575,071 $ 404,031

13 unchanged sentences

Non-cash change in fair value of interest rate hedge ( 35 ) 3,843 ( 11,280 ) 3,843

Other expenses 206 6

Debt restructuring and extinguishment expenses 6,044 — 6,044 —

Other expenses (income) 1,658 ( 115 ) 1,867 ( 108 )

Total other (income) expenses 16,717 13,614 16,222 23,217

16 unchanged sentences

(IN THOUSANDS)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

NET INCOME (LOSS) $ 8,087 $ ( 8,960 ) $ 21,862 $ ( 22,958 )

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 March 31, 2021 and March 31, 2020.

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended June 30, 2021 and June 30, 2020.

Common Stock Additional Paid-In

1 unchanged sentence

Comprehensive

Income (Loss) Accumulated

Loss Accumulated

Deficit Total

3 unchanged sentences

Shares Amount

BALANCE - January 1, 2021 51,640,537 $ 5 $ 307,788 $ ( 24,051 ) $ ( 117,999 ) $ 165,743 $ 92,560 $ 258,303

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

Issuance of common stock upon exercise of options 2,500 — 26 — — 26 — 26

Issuance of common stock under the equity compensation plan 333,533 — — — — — — —

1 unchanged sentence

Stock-based compensation expense — — 8,897 — — 8,897 — 8,897

Change in cumulative foreign currency translation adjustment — — — ( 9 ) — ( 9 ) — ( 9 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 920 — 920 — 920

Other — — ( 1 ) — ( 1 ) 1 —

Net income — — — — 2,873 2,873 5,214 8,087

BALANCE-JUNE 30, 2021 52,678,030 $ 5 $ 324,954 $ ( 22,227 ) $ ( 105,668 ) $ 197,064 $ 102,215 $ 299,279

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

Issuance of common stock under the equity compensation plan 36,770 — — — — — — —

Stock-based compensation expense — — 1,540 — — 1,540 — 1,540

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

Change in cumulative foreign currency translation adjustment — — — ( 7 ) — ( 7 ) — ( 7 )

Change in fair value cash flow hedge, net of taxes — — — ( 409 ) — ( 409 ) — ( 409 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 892 — 892 892

Net (loss) income — — — — ( 10,594 ) ( 10,594 ) 1,634 ( 8,960 )

BALANCE-JUNE 30, 2020 51,554,760 $ 5 $ 304,012 $ ( 26,098 ) $ ( 130,111 ) $ 147,808 $ 85,448 $ 233,256

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 six months ended June 30, 2021 and June 30, 2020.

Common Stock Additional Paid-In

Capital Accumulated Other

Comprehensive

Loss Accumulated

Deficit Total

Radnet, Inc.'s

Equity Noncontrolling

Interests Total

Shares Amount

BALANCE - December 31, 2020 51,640,537 $ 5 $ 307,788 $ ( 24,051 ) $ ( 117,999 ) $ 165,743 $ 92,560 $ 258,303

Issuance of common stock upon exercise of options 2,500 — 26 — — 26 — 26

Issuance of common stock under the equity compensation plan 1,033,358 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 1,635 — — — — — — —

Stock-based compensation expense — — 17,145 — — 17,145 — 17,145

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

2 unchanged sentences

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 1,845 — 1,845 — 1,845

Other — — ( 1 ) — — ( 1 ) 1 —

Net income — — — — 12,331 12,331 9,531 21,862

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

BALANCE-JUNE 30, 2021 52,678,030 $ 5 $ 324,954 $ ( 22,227 ) $ ( 105,668 ) $ 197,064 $ 102,215 $ 299,279

BALANCE - December 31, 2019 50,314,328 $ 5 $ 262,865 $ ( 8,026 ) $ ( 103,159 ) $ 151,685 $ 81,454 $ 233,139

Issuance of common stock under the equity compensation plan 416,817 — — — — — — —

Stock-based compensation expense — — 8,136 — — 8,136 — 8,136

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

Change in cumulative foreign currency translation adjustment — — — ( 6 ) — ( 6 ) — ( 6 )

Change in fair value cash flow hedge, net of taxes — — — ( 18,958 ) — ( 18,958 ) — ( 18,958 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes 892 892 892

Net (loss) income — — — — ( 26,952 ) ( 26,952 ) 3,994 ( 22,958 )

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

BALANCE-JUNE 30, 2020 51,554,760 $ 5 $ 304,012 $ ( 26,098 ) $ ( 130,111 ) $ 147,808 $ 85,448 $ 233,256

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

2 unchanged sentences

(IN THOUSANDS)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

(Gain) loss on sale and disposal of equipment and other ( 2,874 ) 202

Amortization of cash flow hedge 925 —

Loss on extinguishment of debt 1,496 —

Amortization of cash flow hedge, net of taxes 1,845 892

Non-cash change in fair value of interest rate hedge ( 11,280 ) 3,843

14 unchanged sentences

Proceeds from sale of equipment 500 779

Equity contributions in existing and purchase of interest in joint ventures ( 1,441 ) —

Net cash used in investing activities ( 119,658 ) ( 67,602 )

2 unchanged sentences

Payments on term loan debt ( 613,279 ) ( 21,648 )

Proceeds from debt refinancing, net of issuing costs 716,369 —

Proceeds from paycheck protection program loans — 4,023

Proceeds from revolving credit facility 128,300 250,900

Payments on revolving credit facility ( 128,300 ) ( 250,900 )

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

Proceeds from issuance of common stock upon exercise of options 26 —

Net cash provided by (used in) financing activities 99,812 ( 19,439 )

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 21 ) ( 6 )

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Supplemental Schedule of Non-Cash Investing and Financing Activities

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.

We acquired equipment and certain leasehold improvements for approximately $ 42.1 million and $ 31.8 million during the six months ended June 30, 2021 and 2020, respectively, which were not paid for as of June 30, 2021 and 2020 , respectively.

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

1 unchanged sentence

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

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 Deep Health's shares and share equivalents.

The shares were ascribed a value of $ 13.9 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 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.

At June 30, 2021, we operated, directly or indirectly through joint ventures with hospitals, 353 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.

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VIEs that we consolidate as the primary beneficiary consist of professional corporations which are owned or controlled by individuals within our senior management, namely Howard G.

Berger, M.D., our President and Chief Executive Officer, and John V.

Crues, III, M.D., RadNet's Medical Director, both of whom are members of our Board of Directors.

Berger, M.D., our President and Chief Executive Officer and a member of our Board of Directors, and John V.

Crues, III, M.D., RadNet's Medical Director.

Berger owns, indirectly, 99 % of the equity interests in Beverly Radiology Medical Group III (BRMG) and a controlling interest in two professional corporations in New York City.

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Crues is a 1 % owner of BRMG.

These VIEs are collectively referred to as the consolidated medical group ("the Group").

These VIEs are collectively referred to as the Group.

RadNet provides non-medical, technical and administrative services to the Group for which it receives a management fee, pursuant to the related management agreements.

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

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 Group on a combined basis recognized $ 45.1 million and $ 26.9 million of revenue, net of management services fees to RadNet, for the three months ended June 30, 2021 and 2020, respectively and $ 45.1 million and $ 26.9 million of operating expenses for the three months ended June 30, 2021 and 2020, respectively.

RadNet recognized $ 190.6 million and $ 116.4 million of total billed net service fee revenue for the three months ended June 30, 2021, and 2020, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 91.2 million and $ 66.4 million of revenue, net of management services fees to RadNet, for the six months ended June 30, 2021 and 2020, respectively and $ 91.2 million and $ 66.4 million of operating expenses for the six months ended June 30, 2021 and 2020, respectively.

RadNet recognized $ 369.5 million and $ 264.3 million

of total billed net service fee revenue for the six months ended June 30, 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 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.

In our condensed consolidated balance sheets at June 30, 2021 and December 31, 2020, we have included approximately $ 102.4 million and $ 82.3 million, respectively, of accounts receivable and approximately $ 21.8 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.

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generally accepted accounting principles for complete financial statements;

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.

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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.

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

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.

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

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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 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):

Our total service revenues during the three and six months ended June 30, 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

June 30, Six Months Ended

2021 2020 2021 2020

Commercial insurance $ 187,354 $ 96,349 $ 369,566 $ 251,711

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.

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.

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

Beginning in the second quarter of 2020 and through the six months ended June 30, 2021, we received funding from the various programs established by the CARES Act as follows:

• $ 39.5 million of accelerated Medicare payments through the twelve months ended December 31, 2020

• $ 4.0 million from the Paycheck Protection Program through the twelve months ended December 31, 2020

• $ 32.6 million total Provider Relief Funding, $ 26.3 million received for the 12 months ended December 31, 2020 and $ 6.3 million for the 6 months ended June 30, 2021

In addition, we have received for the 12 months ended December 31, 2020, $ 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 are being applied to revenue as services are performed beginning in 2021.

For the six months ended June 30, 2021, $ 10.3 million of the accelerated Medicare and $ 3.8 million of the Blue Shield funds have been applied to revenue.

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 Provider Relief Funding is displayed as such on our condensed consolidated statements of operations.

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.

At December 31, 2020 and at June 30, 2021, the Company had in total $ 16.3 million of deferred Social Security taxes.

The current portion of payment deferrals are recorded as payroll tax liability under the caption “Accounts payable, accrued expenses and other”, while the long term portion is recorded to Other Long Term Liabilities 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.

4 unchanged sentences

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

Amounts remaining to be collected on these agreement were $ 19.8 million and $ 20.5 million at June 30, 2021 and December 31, 2020, respectively.

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 $ 1.6 million and $ 1.8 million, as of March 31, 2021 and December 31, 2020, respectively and related to our Barclays Revolving Credit Facility.

Deferred financing costs, net of accumulated amortization, were $ 2.4 million and $ 1.8 million, as of June 30, 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 March 31, 2021 totaled $ 502.6 million.

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

GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at June 30, 2021 totaled $ 502.3 million.

Indefinite lived intangible assets at June 30, 2021 were $ 7.1 million.

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

1 unchanged sentence

We tested goodwill and indefinite lived intangibles for impairment on October 1, 2020, noting no impairment.

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 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):

However, during 2020 we ceased employing certain indefinite lived trade names with a total value of $ 4.2 million and they were written off in full.

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

Activity in goodwill for the six months ended June 30, 2021 is provided below (in thousands):

Balance as of December 31, 2020 $ 472,879

2 unchanged sentences

Other Adjustments ( 28 )

Balance as of March 31, 2021 $ 502,566

Balance as of June 30, 2021 $ 502,331

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 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;

We recorded income tax expense of $ 2.9 million, or an effective tax rate of 26.2 %, for the three months ended June 30, 2021 compared to a benefit from income taxes of $ 4.5 million, or an effective tax rate of 33.3 % for the three months ended June 30, 2020.

We recorded income tax expense of $ 7.2 million, or an effective tax rate of 24.9 %, for the six months ended June 30, 2021 compared to a benefit from income taxes of $ 8.9 million, or an effective tax rate of 27.8 % for the six months ended June 30, 2020.

The income tax rates for the three and six months ended June 30, 2021 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships;

(ii) effects of state income taxes;

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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 as of March 31, 2021.

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of June 30, 2021.

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

1 unchanged sentence

Our equipment leases are covered by warranty and service contracts which cover repairs and provide regular maintenance to keep the equipment in functioning order.

EQUITY BASED COMPENSATION – We have one long-term incentive plan that we adopted in 2006 and which we first amended and restated as of April 20, 2015, and again on March 9, 2017 (the “Restated Plan”).

EQUITY BASED COMPENSATION – We have one long-term incentive plan that we adopted in 2006 and which we have amended and restated at various points in time:

first on April 20, 2015, second on March 9, 2017, and currently as of April 15, 2021 (the “Restated Plan”).

The Restated Plan was approved by our stockholders at our annual stockholders meeting on June 10, 2021.

We have reserved 14,000,000 shares of common stock for issuance under the Restated Plan which can be issued in the form of options, stock awards, stock appreciation rights, stock units, and cash awards.

Stock options generally vest over three to five years and expire five to ten years from date of grant.

We have reserved 16,500,000 shares of common stock for issuance under the Restated Plan which can be issued in the form of incentive and/or nonstatutory stock options, restricted and/or unrestricted stock, stock units, and stock appreciation rights.

Stock options generally vest over three years to five years and expire five years to ten years from date of grant.

We determine the compensation expense for each stock option award using the Black Scholes, or similar valuation model.

8 unchanged sentences

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 months ended March 31, 2021 and 2020 .

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

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.

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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.

DERIVATIVE INSTRUMENTS

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

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

The 2019 Swaps have total notional amounts of $ 500,000,000 , consisting of two agreements of $ 50,000,000 each and two agreements of $ 200,000,000 each.

2 unchanged sentences

Under these arrangements, we arranged the 2019 Swaps with locked in 1 month LIBOR rates at 1.96 % for the $ 100,000,000 notional and at 2.05 % for the $ 400,000,000 notional.

As of the effective date, we will be liable for premium payments if interest rates decline below arranged rates, but will receive interest payments if rates remain above the arranged rates.

As of the effective date, we will be liable for premium payments if interest rates decline below arranged rates, but will receive interest payments if rates are above the arranged rates.

At inception, we designated our 2019 Swaps as cash flow hedges of floating-rate borrowings.

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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.

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 are being 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.

1 unchanged sentence

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 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

For the three months ended June 30, 2021

Account March 31, 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 June 30, 2021 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $ ( 21,656 ) $ — $ 920 $ ( 20,736 ) Equity

For the twelve months ended December 31, 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 December 31, 2020 Location

For the six months ended June 30, 2021

Account December 31, 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 June 30, 2021 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $ ( 22,581 ) $ — $ 1,845 $ ( 20,736 ) 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)

For the three months ended June 30, 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) Gross 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 $ 35 Other income (expense) $ ( 1,245 ) Interest Expense

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

For the six months ended June 30, 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) Gross 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 $ 11,280 Other income (expense) $ ( 2,169 ) Interest Expense

See Fair Value Measurements section below for the fair value of the 2019 Swaps at June 30, 2021.

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

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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 March 31, 2021

As of June 30, 2021

Level 1 Level 2 Level 3 Total

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

As of March 31, 2021

As of June 30, 2021

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

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

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.

As of June 30, 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 June 30, 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.

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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 March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Net income (loss) attributable to RadNet, Inc.'s common stockholders $ 2,873 $ ( 10,594 ) $ 12,331 $ ( 26,952 )

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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 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:

As of June 30, 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.

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.

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

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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 or impairment in our investment was identified as of March 31, 2021.

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

No observable price changes, impairment in our investment or impairment of the loan receivable was identified as of June 30, 2021.

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

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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 March 31, 2021.

No indicators of impairment existed as of June 30, 2021.

Joint venture investment and financial information

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

The following table is a summary of our investment in joint ventures during the six months ended June 30, 2021 (in thousands):

Balance as of December 31, 2020 $ 34,528

Equity in earnings in these joint ventures 5,406

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):

Equity contributions in existing joint ventures 1,441

Balance as of June 30, 2021 $ 41,375

We charged management service fees from the centers underlying these joint ventures of approximately $ 5.5 million and $ 3.3 million for the three months ended June 30, 2021 and 2020 and $ 10.8 million and $ 5.9 million for the six months ended June 30, 2021 and 2020, respectively.

On June 23, 2021, we made an additional equity contribution to our joint venture in Arizona of $ 1.4 million.

Our equity ownership interest percentage in the venture did not change.

The following table is a summary of key balance sheet data for these joint ventures as of June 30, 2021 and December 31, 2020 and income statement data for the six months ended June 30, 2021 and 2020 (in thousands):

Balance Sheet Data:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Current assets $ 39,925 $ 27,085

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Total value of RadNet joint venture interests $ 41,375 $ 34,528

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

Income statement data for the six months ended June 30, 2021 2020

Net revenue $ 64,636 $ 43,849

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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.

ASU 2021-01 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.

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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

During the first and second quarters of 2021, we completed the acquisition of certain assets of the following entities, all of which engage in the practice of radiology.

The primary reason for these acquisitions was to strengthen our presence in the New York City, New Jersey and California markets.

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

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

Personal Health Imaging PLLC* 2/1/2021 2,995 576 608 2,355 50 14 ( 608 )

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ZP Smith LLC* 3/1/2021 3,978 3,581 2,214 347 50 — ( 2,214 )

ZP 907 Northern LLC 4/1/2021 562 507 1,817 5 50 — ( 1,817 )

Kelly MD, Inc.

5/1/2021 3,750 990 1,379 2,710 50 — ( 1,379 )

60th Street MRI, LLC 5/1/2021 400 85 — 290 25 — —

ZP Parkchester LLC 5/1/2021 263 213 311 — 50 — ( 311 )

ZP Eastern LLC 6/1/2021 2,868 2,801 1,951 17 50 — ( 1,951 )

Total 64,918 34,549 12,670 29,375 785 209 ( 12,670 )

*Fair Value Determination is Final

Formation of majority owned subsidiary

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NOTE 5 – CREDIT FACILITIES AND NOTES PAYABLE

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

As of June 30, 2021 and December 31, 2020 our term loan debt obligations are as follows (in thousands):

2021 December 31,

First Lien Term Loans collateralized by RadNet's tangible and intangible assets $ 725,000 $ 611,028

Discounts on First Lien Term Loans ( 8,730 ) ( 9,699 )

Discount on First Lien Term Loans ( 14,257 ) ( 9,699 )

SunTrust Term Loan Agreement collateralized by NJIN's tangible and intangible assets 49,125 51,375

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Long term portion debt obligations $ 749,079 $ 612,913

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

First Lien Term Loans $ 601,330 $ ( 8,730 ) $ 592,600

SunTrust Term Loan 50,250 — 50,250

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

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.

We had no outstanding balance under our $ 195.0 million Barclays Revolving Credit Facility at June 30, 2021 and have reserved $ 7.8 million for certain letters of credit.

The remaining $ 187.2 million of our Barclays Revolving Credit Facility was available to draw upon as of June 30, 2021.

We had no outstanding balance under our $ 30.0 million SunTrust Revolving Credit Facility at June 30, 2021.

As of June 30, 2021, we were in compliance with all covenants under our credit facilities.

Second Amended and Restated First Lien Credit and Guaranty Agreement

On April 23, 2021, we entered into the Second Amended and Restated First Lien Credit and Guaranty Agreement (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 "Barclays Revolving Credit Facility").

The proceeds of the First Lien Term Loans were used to refinance loans outstanding under our prior first lien credit agreement and provide funding for current and future operations.

Total costs of the Restated Credit Agreement amounted to approximately $ 14.9 million segregated as follows:

$ 8.8 million capitalized to discount and deferred finance cost, $ 4.5 million expensed to debt restructuring costs, $ 1.5 million charged to loss on early extinguishment of debt and $ 0.1 million written off to interest expense.

Amounts capitalized will be amortized over the remaining terms of the respective credit facilities under the Restated Credit Agreement.

Senior Secured Credit Facilities

Barclays Credit Facilities:

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

4.50 % 3.50 %

> 4.00 x but ≤ 5.50 x

3.75 % 2.75 %

> 3.50 x but ≤ 4.00 x

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.

The First Lien Term Loans will mature on July 1, 2023 unless otherwise accelerated under the terms of the First Lien Credit Agreement.

First Lien Term Loans:

The First Lien Term Loans under the Restated Credit Agreement bear interest at either a Eurodollar Rate or an Alternate Base Rate (in each case, as defined in the Restated Credit Agreement), plus an applicable margin.

The applicable margin for Eurodollar Rate term loans under the Restated Credit Agreement is 3.25 % per annum, which a reduction to 3.00 % per annum upon delivery by us of financial statements for the period ending March 31, 2021 evidencing a first lien net leverage ratio of 3.00 to 1.00 or less.

Such statements were delivered by us on May 27, 2021.

At June 30, 2021 the effective Eurodollar Rate and the Alternate Base Rate for the First Lien Term Loans under the Restated Agreement was 0.75 % and 3.25 %, respectively and the applicable margin for the Eurodollar Rate and Alternate Base Rate borrowings was 3.00 % and 2.00 %, respectively.

The Restated Credit Agreement provides for quarterly payments of principal for the First Lien Term Loan in the amount of approximately $ 1.8 million.

The First Lien Term Loan will mature on April 23, 2028 unless otherwise accelerated under the terms of the Restated Credit Agreement.

SunTrust Credit Facilities:

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").

At June 30, 2021, our SunTrust credit facilities, which relate to our consolidated subsidiary The New Jersey Imaging Network, L.L.C.("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:

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At scheduled intervals, the quarterly amortization increases by $ 0.4 million, with the remaining balance to be paid at maturity.

The SunTrust Term Loan will mature on August 31, 2023 unless otherwise accelerated under the terms of the SunTrust Credit Facility.

The SunTrust Term Loan will mature on August 31, 2023 unless otherwise accelerated under the terms of the SunTrust Credit Agreement.

Revolving Credit Facilities

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 (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.

The Barclays Revolving Credit Facility under the Restated Credit Agreement is a $ 195.0 million senior secured revolving credit facility.

Associated with the Barclays Revolving Credit Facility are deferred financing costs, net of accumulated amortization, of $ 2.4 million at June 30, 2021.

Revolving loans borrowed under the Barclays Revolving Credit Facility bear interest at either a Eurodollar Rate or an Alternate Base Rate (in each case, as defined in the Restated Credit Agreement) plus an applicable margin which adjusts depending on our first lien net leverage ratio, according to the following schedule:

First Lien Net Leverage Ratio Eurodollar Rate Spread Alternate Base Rate Spread

3.25 % 2.25 %

> 3.00 x but ≤ 3.50 x

3.00 % 2.00 %

2.75 % 1.75 %

As of June 30, 2021, the effective interest rate payable on revolving loans under the Barclays Revolving Credit Facility was 5.25 %.

For letters of credit issued under the Barclays Revolving Credit Facility, letter of credit fees accrue at the applicable margin of the Eurodollar Rate, currently 3.00 %, and fronting fees accrue at 0.125 % per annum, in each case on the average aggregate daily maximum amount available to be drawn under all letters of credit issued under the Restated 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.

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 First Lien Credit Agreement.

The Barclays Revolving Credit Facility will terminate on April 23, 2026 unless otherwise accelerated in accordance with the terms of the Restated Credit Agreement.

SunTrust Revolving Credit Facility

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:

As of June 30, 2021, NJIN had no borrowings under the SunTrust Revolving Credit Facility.

Recent prior amendments to prior credit facilities:

Barclays Credit Facilities:

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.

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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 increasing 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 First Lien Credit Agreement.

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

The Eighth Amendment amended the prior first lien credit agreement to add $ 57.5 million of revolving commitments to the prior Barclays revolving credit facility increasing the maximum borrowing capacity under the prior Barclays 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 prior first lien credit agreement:

(i) Amendment No.

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

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.

Total issue costs added in relation to the Sixth and Seventh Amendments in 2019 amounted to approximately $ 4.4 million.

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 First Lien Credit Agreement.

Among other things, the Sixth Amendment amended the prior 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 prior Barclays revolving credit facility.

The Seventh Amendment amended the prior first lien credit agreement to extend the maturity date of the prior Barclays revolving credit facility by an additional two years to July 1, 2023, unless sooner terminated in accordance with the terms of the prior first lien credit agreement.

The prior first lien credit agreement was amended and restated by the Restated Credit Agreement described above, and the prior first lien term loans and prior Barclays revolving credit facility under the prior first lien credit agreement were refinanced and replaced by the First Lien Term Loans and the Barclays Revolving Credit Facility provided under the Restated Credit Agreement described above.

NOTE 6 – STOCK-BASED COMPENSATION

Stock Incentive Plans

We have one long-term equity incentive plan which we refer to as the 2006 Equity Incentive Plan, which we first amended and restated as of April 20, 2015 and again on March 9, 2017 (the "Restated Plan”).

We have one long-term equity incentive plan, the RadNet, Inc.

Equity Incentive Plan, which we first amended and restated April 20, 2015, again on March 9, 2017 and currently as of April 15, 2021 (the "Restated Plan”).

The Restated Plan was approved by our stockholders at our annual stockholders meeting on June 10, 2021.

We have reserved for issuance under the Restated Plan 16,500,000 shares of common stock.

We can issue options (incentive and non-qualified), stock awards, stock appreciation rights, stock units and cash awards under the Restated Plan.

Certain options granted under the Restated Plan to employees are intended to qualify as incentive stock options under existing tax regulations.

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

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:

We can issue options (incentive and nonstatutory), stock awards (restricted or unrestricted), stock units, and stock appreciation rights under the Restated Plan.

Stock option grants, whether incentive or nonstatutory, generally vest over 3 to 5 years and expire 5 to 10 years from the date of grant.

Under the Restated Plan, stock options may not be granted at a per share exercise price below the fair market value of a share of our common stock on the date of grant, may not be repriced or exchanged without stockholder approval, and the maximum exercisable term of the option may not exceed ten years.

As of June 30, 2021, we had outstanding options to acquire 525,399 shares of our common stock, of which options to acquire 430,702 shares were exercisable.

The following summarizes all of our option transactions for the six months ended June 30, 2021:

Outstanding Options

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Balance, December 31, 2020 527,899 $ 9.34

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.

Exercised ( 2,500 ) 10.10

Balance, June 30, 2021 525,399 9.34 5.86 $ 12,793,992

Exercisable at June 30, 2021 430,702 8.34 5.50 10,920,256

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on June 30, 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 June 30, 2021.

Options for 2,500 shares of our common stock were exercised during the six months ended June 30, 2021.

As of June 30, 2021, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 0.4 million, which is expected to be recognized over a weighted average period of approximately 1.11 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 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.

During the second quarter of fiscal 2020, in connection with the completion of the DeepHealth acquisition, we granted options to acquire 412,434 shares 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 June 30, 2021, total unrecognized stock based compensation expense related to non-vested DeepHealth options was approximately $ 3.0 million, which is expected to be recognized over a weighted average period of approximately 1.84 years.

Outstanding Options

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Exercised ( 1,141 ) —

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

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

Balance, June 30, 2021 399,398 — 7.91 $ 13,455,719

Exercisable at June 30, 2021 37,713 — 7.91 1,270,551

Restricted Stock Awards

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

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:

As of June 30, 2021, we have issued a total of 7,699,439 RSA’s of which 427,688 were unvested at June 30, 2021.

The following summarizes all unvested RSA’s activities during the six months ended June 30, 2021:

RSA's Weighted-Average

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Vested ( 542,017 ) $ 17.57

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

RSA's unvested at June 30, 2021 427,688 1.12 $ 18.75

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

Other stock bonus awards

The Restated Plan also permits the award of stock bonuses not subject to any future service period.

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

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.

The Restated Plan also permits share awards not subject to any future service period.

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

During the six months ended June 30, 2021, awards amounting to 294,048 shares valued at $ 6.5 million in compensation expense were issued in employee COVID-19 related bonuses.

In summary, of the 16,500,000 shares of common stock reserved for issuance under the Restated Plan, at June 30, 2021, we had issued 16,419,296 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 3,423,447 shares available under the Restated Plan for future issuance.

The DeepHealth options were issued outside of the Restated Plan and are a direct result of our acquisition and not included in the share count of the Restated Plan.

Options issued in replacement of original DeepHealth options as a result of our acquisition are not included in the share count under the Restated Plan.

NOTE 7 – SUBSEQUENT EVENTS

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.

Business Combinations/Dispositions:

On July 30, 2021, we completed the sale of a 24.9 % portion of our 75.0 % ownership interest in one of our majority owned subsidiaries for $ 13.1 million.

After the sale, we retain a 50.1 % ownership interest in this subsidiary.

On July 30, 2021, we acquired certain business assets for purchase consideration of approximately $ 5.2 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