RadNet, Inc. 10-Q

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and notes thereto for the year ended December 31, 2020 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission (SEC) on March 15, 2021. . Forward-Looking Statements This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements reflect current views about future events and are based on our currently available financial, economic and competitive data and on current business plans. Actual events or results may differ materially depending on risks and uncertainties that may affect our operations, markets, services, prices and other factors. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “assumption” or the negative of these terms or other comparable terminology. Forward-looking statements in this current report include, among others, statements we make regarding • our ability to successfully integrate new operations, to our business and the anticipated benefits to be derived from our investments, acquisitions, and joint ventures; • anticipated trends in our revenues, operating expenses and liquidity and cash flows, including our financial guidance and anticipated effects of cost-savings efforts; • the ongoing impact of the COVID-19 pandemic on our business, suppliers, payors, customers, referral sources, partners, patients and employees, including (i) government’s unprecedented action regarding existing and potential restrictions and/or obligations related to citizen and business activity to contain the virus; (ii) the consequences of an economic downturn resulting from the impacts of COVID-19 and the possibility of a global economic recession; (iii) the impact of the volume of canceled or rescheduled procedures, whether as a result of government action or patient choice; (iv) measures we are taking to respond to the COVID-19 pandemic, including changes to business practices; (v) the impact of government and administrative regulation, guidance and appropriations; (vi) changes in our revenues due to declining patient procedure volumes, changes in payor mix; (vii) potential increased expenses or workforce disruptions related to our employees that could lead to unavailability of key personnel; (viii) workforce disruptions related to our key partners, suppliers, vendors and others we do business with; (ix) the impact of return to work orders in certain states in which we operate; and (x) increased credit and collectability risks; and 26 Table of Contents • our future liquidity and our continuing ability to service and remain in compliance with applicable debt covenants or refinance our current indebtedness. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, the factors included in “Risk Factors,” in our annual report on Form 10-K for the fiscal year ended December 31, 2020 or supplemented by the information in Part II– Item 1A below. You should consider the inherent limitations on, and risks associated with, forward-looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. These forward-looking statements speak only as of the date when they are made. We assume no obligation to revise or update any forward-looking statements for any reason, except as required by law. Overview We are a leading national provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States based on number of locations and annual imaging revenue. At September 30, 2021, we operated, directly or indirectly through joint ventures with hospitals, 350 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 and may reduce unnecessary invasive procedures, often reducing the cost and amount of care for patients. Our services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures. In addition to our imaging services, we own and operate a number of technology businesses that are complementary to our imaging business. Our subsidiary eRAD, Inc., develops and sells computerized systems for the diagnostic imaging industry, which provide the technology to distribute, display, store and retrieve digital images. We have made a number of investments in Artificial Intelligence (AI) with our purchases of Nulogix and DeepHealth, combined with our investment in Whiterabbit.ai and our collaborative arrangement with Hologic. Our current AI focus is to develop solutions in machine learning to assist radiologists and other clinicians in interpreting images and improving patient care, initially in the field of mammography. We derive substantially all of our revenue, directly or indirectly, from fees charged for the diagnostic imaging services performed at our facilities. The following table shows our facilities in operation and revenues for the nine months ended September 30, 2021 and September 30, 2020: Nine Months Ended September 30, 2021 2020 Facilities in operation 350 334 Net revenues (millions) $ 982 $ 764 Our revenue is derived from a diverse mix of payors, including private, managed care capitated and government payors. We believe our payor diversity mitigates our exposure to possible unfavorable reimbursement trends within any one payor class. In addition, our experience with capitation arrangements over the last several years has provided us with the expertise to manage utilization and pricing effectively, resulting in a predictable stream of revenue. Our total service revenue during the nine months ended September 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): 27 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Commercial insurance $ 185,723 $ 160,524 $ 555,355 $ 412,415 Medicare 73,163 62,704 207,977 154,847 Medicaid 8,707 7,098 26,198 18,072 Workers' compensation/personal injury 11,554 7,183 32,507 25,705 Other patient revenue 4,800 8,328 14,766 17,211 Management fee revenue 5,255 2,675 16,007 8,574 Teleradiology and Software revenue 2,564 2,349 7,611 8,319 Other 3,641 5,869 10,058 15,617 Service fee revenue 295,407 256,730 870,479 660,760 Revenue under capitation arrangements 37,283 35,046 111,449 103,145 Total service revenue $ 332,690 $ 291,776 $ 981,928 $ 763,905 Recent Developments The discussion of our results below centers on our performance through the third quarter ended September 30, 2021. During the same period in 2020, with the onset of the novel strain of the coronavirus ("COVID-19"), we began experiencing reduced procedure volumes at the end of the first quarter which intensified through mid year. In response to the pandemic, we adjusted our business operations, inclusive of concentrating patient traffic to larger imaging centers, negotiating payment terms with vendors and landlords, initiating employee furloughs, compensation reductions, and telecommuting. As 2021 comes to a close, our procedure volume has returned to pre-COVID-19 levels and our business has resumed normal operations. We expect that the cost saving measures implemented in 2020 will continue to be beneficial to our financial position in 2021. In addition, we have continued to invest and position for future growth. Year to date, we have acquired 19 new radiology centers in California, New Jersey and New York. Equity Investments, Acquisitions and Dispositions, and Joint Venture Activity We have developed our medical imaging business through a combination of organic growth, equity investments, acquisitions and joint venture formations. The information below updates our activity of such matters contained in our annual report on Form 10-K for the year ended December 31, 2020. Equity Investments As of September 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 September 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. On February 1, 2018, we purchased 2.1 million preferred shares in Turner Imaging Systems for $2.0 million. On January 1, 2019 we funded a convertible promissory note in the amount of $0.1 million that converted into an additional 80,000 shares effective December 21, 2019. No observable price changes or impairment in our investment was identified as of September 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 it operations. No observable price changes, impairment in our investment or impairment of the loan receivable was identified as of September 30, 2021. 28 Table of Contents Facility acquisitions During 2021, we completed the acquisition of certain assets of the following entities, which either engage directly in the practice of radiology or associated businesses. 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 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) ZP Elmont LLC* 2/1/2021 2,194 1,112 — 1,005 50 27 — ZP Freeport LLC* 2/1/2021 6,065 4,668 — 1,328 40 29 — Broadway Medical Imaging LLC* 2/1/2021 1,155 1,076 446 6 50 23 (446) 3235 Hempstead LLC* 2/1/2021 9,386 5,667 — 3,649 70 — — SLZM Realty LLC* 2/1/2021 13,671 4,617 — 8,974 80 — — 2012 Sunrise Merrick LLC* 2/1/2021 11,428 2,741 335 8,617 70 — (335) ZP Bayside LLC* 3/1/2021 3,545 3,385 2,191 40 50 70 (2,191) ZP Laurelton LLC* 3/1/2021 2,658 2,530 1,418 32 50 46 (1,418) 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) William M. 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) Tangent Associates LLC** 8/24/2021 2,025 10 — 379 1,636 — — Total 66,943 34,559 12,670 29,754 2,421 209 (12,670) *Fair Value Determination is Final ** All stock purchase through issuing 67,658 shares of our common stock 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. Sale of ownership interest in a majority owned subsidiary Effective September 1, 2021 we completed the sale of a 24.9% ownership interest in our majority owned subsidiary West Valley Imaging Group, LLC for $13.1 million to Tarzana Medical Center, LLC. After the sale, our ownership interest in the subsidiary has reduced from 75.0% to 50.1% and we retain a controlling financial interest in the subsidiary. We recognized in additional paid in capital on our condensed consolidated balance sheets, $4.2 million excess in consideration over the carrying value of the sold economic interest. Post the sale of our ownership interest we acquired from Tarzana Medical Center, LLC, certain intangible business assets for purchase consideration of approximately $5.2 million. 29 Table of Contents Joint Venture Activity The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2021 (in thousands): Balance as of December 31, 2020 $ 34,528 Equity in earnings in these joint ventures 8,259 Equity contributions in existing joint ventures 1,441 Balance as of September 30, 2021 $ 44,228 We charged management service fees from the centers underlying these joint ventures of approximately $5.3 million and $2.7 million for the three months ended September 30, 2021 and 2020 and $16.0 million and $8.6 million for the nine months ended September 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 September 30, 2021 and December 31, 2020 and income statement data for the nine months ended September 30, 2021 and 2020 (in thousands): Balance Sheet Data: September 30, 2021 December 31, 2020 Current assets $ 46,186 $ 27,085 Noncurrent assets 67,514 68,686 Current liabilities (12,182) (12,545) Noncurrent liabilities (20,914) (21,582) Total net assets $ 80,604 $ 61,644 Book value of RadNet joint venture interests $ 36,940 $ 28,079 Cost in excess of book value of acquired joint venture interests 7,288 6,449 Total value of RadNet joint venture interests $ 44,228 $ 34,528 Income statement data for the nine months ended September 30, 2021 2020 Net revenue $ 98,193 $ 78,988 Net income $ 16,007 $ 13,651 Critical Accounting Policies The Securities and Exchange Commission defines critical accounting estimates as those that are both most important to the portrayal of a company’s financial condition and results of operations and require management’s most difficult, subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. In Note 2 to our consolidated financial statements in this quarterly report and in our annual report on Form 10-K for the year ended December 31, 2020, we discuss our significant accounting policies, including those that do not require management to make difficult, subjective or complex judgments or estimates. The most significant areas involving management’s judgments and estimates are described below. Use of Estimates The financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP), which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters, including our reported amounts of assets and liabilities in our consolidated balance sheets at the dates of the financial statements; our disclosure of contingent assets and liabilities at the dates of the financial statements; and our reported amounts of revenues and expenses in our consolidated statements of operations during the reporting periods. These estimates involve judgments with respect to numerous factors that 30 Table of Contents are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates. Revenues Our revenues generally relate to net patient fees received from various payors and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payor (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payors. The payment arrangements with third-party payors for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations, changes in business and economic conditions, and the frequent changes in managed care contractual terms resulting from contract re-negotiations and renewals. 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. Our revenues are based upon our management's estimate of amounts we expect to be entitled to receive from patients and third-party payors. Estimates of contractual allowances under Medicare, Medicaid, managed care and commercial insurance plans are based upon historical collection experience of the payments received from such payors in accordance with the underlying contractual agreements. Revenues related to uninsured patients and uninsured copayment and deductible amounts for patients who have health care coverage may have price concessions applied. We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect. Under capitation arrangements with various health plans, we earn a per-enrollee amount each month for making available diagnostic imaging services to all plan enrollees under the capitation arrangement. 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 estimates and assumptions related to revenue recognition did not change materially for the quarter ended September 30, 2021. Provider Relief Fund (COVID-19 Stimulus Funding) The Provider Relief Fund offers government assistance to eligible providers throughout the healthcare system in support of certain expenses or lost revenue attributable to the coronavirus pandemic. We have recorded provider relief funding in our condensed Consolidated Statements of Operations in the amount of $6.3 million for the nine months ended September 30, 2021. Generally, the department of Health and Human Services ("HHS") does not intend to recoup funds as long as a provider's lost revenue and increased expenses exceed the amount of provider relief funding one has received. HHS reserves the right to audit Relief Fund recipients in the future to ensure that this requirement is met and collect any Relief Fund amounts that were made in error or exceed lost revenue or increased expenses due to the pandemic. Failure to comply with the terms and conditions may be grounds for recoupment. In recognizing revenue associated with provider relief funding our management is required to assess whether our operations have meet the applicable requirements for the funding received. During the quarter ended September 30, 2021, we continued to evaluate our operating results in light of the most recent government guidance and based on our assessment, the amount of revenue recognized is appropriate. 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. Services are generally provided pursuant to one-year contracts with healthcare providers. Receivables generally are collected within industry norms for third- 31 Table of Contents party payors. 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. Our estimates and assumptions for allowances on our account receivable did not change materially during the quarter ended September 30, 2021. Business Combination We evaluate all acquisitions under the framework Clarifying the Definition of a Business in the accounting guidance. Once a purchase has been determined to be the acquisition of a business, we are required to recognize the assets acquired and the liabilities assumed at their acquisition date fair values. Any portion of the purchase consideration transferred in excess of the net of the acquisition date fair values of the assets acquired and the liabilities assumed, is allocated to goodwill. The allocation requires our management to make estimates of the value of various assets acquired and liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. 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, 2021 totaled $502.7 million. Indefinite Lived Intangible Assets at September 30, 2021 were $7.1 million and are associated with the value of certain trade name intangibles. Our management reviews the fair value of our reporting units on an annual basis to determine if an event has occurred which suggest that the fair value of a reporting unit may be impaired. When we determine the carrying value of a reporting unit exceeds its fair value, an impairment charge would be recognized and should not exceed the total amount of goodwill allocated to that reporting unit. The review of fair value requires our management to make assessments of the business and financial prospects for a particular reporting unit. We tested goodwill for impairment on October 1, 2020. We also continue at regular intervals to consider the current and expected future economic and market conditions surrounding the COVID-19 pandemic and to date have not had an indication of goodwill impairment being more likely than not through September 30, 2021. Recent Accounting Standards See Note 3, Recent Accounting and Reporting Standards to the financial statements included in this report for further information. 32 Table of Contents Results of Operations The following table sets forth, for the three and nine months ended September 30, 2021 and 2020, the percentage that certain items in the statements of operations bears to total service revenue, inclusive of revenue under capitation contracts. RADNET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT SHARE DATA) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 REVENUE Service fee revenue 88.8 % 88.0 % 88.6 % 86.5 % Revenue under capitation arrangements 11.2 % 12.0 % 11.4 % 13.5 % Total service revenue 100.0 % 100.0 % 100.0 % 100.0 % Provider relief funding — % 0.1 % 0.6 % 3.4 % OPERATING EXPENSES Cost of operations, excluding depreciation and amortization 82.0 % 84.5 % 85.4 % 92.7 % Depreciation and amortization 7.4 % 7.3 % 7.3 % 8.4 % Loss (gain) on sale and disposal of equipment and other 0.8 % 0.1 % — % 0.1 % Severance costs — % 0.2 % 0.1 % 0.2 % Total operating expenses 90.2 % 92.1 % 92.7 % 101.4 % INCOME FROM OPERATIONS 9.8 % 8.0 % 7.9 % 1.9 % OTHER INCOME AND EXPENSES Interest expense 3.6 % 3.8 % 3.8 % 4.4 % Equity in earnings of joint ventures (0.9) % (0.8) % (0.8) % (0.7) % Non-cash change in fair value of interest rate hedge (0.9) % 0.2 % (1.4) % 0.6 % Debt restructuring and extinguishment expenses — % — % 0.6 % — % Other (income) expenses (0.1) % — % 0.2 % — % Total other expenses 1.8 % 3.2 % 2.3 % 4.3 % INCOME (LOSS) BEFORE INCOME TAXES 7.9 % 4.8 % 5.7 % (2.3) % (Provision for) benefit from income taxes (1.6) % (1.3) % (1.3) % 0.7 % NET INCOME (LOSS) 6.4 % 3.5 % 4.4 % (1.7) % Net income attributable to noncontrolling interests 1.5 % 1.4 % 1.5 % 1.1 % NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS 4.9 % 2.1 % 2.9 % (2.6) % We have developed our medical imaging business through a combination of organic growth, equity investments, acquisitions and joint venture formations. We have segregated some of our information to demonstrate which is attributable to centers that were in operation through the entirety of the comparison period, and which is attributable to those that were acquired or disposed of during the period. The discussion below shows a breakdown and analysis of revenue and expenses for the three and nine months ended September 30, 2021 and 2020 for our operations at a total company and same center level. Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020 Total Revenue inclusive of Provider Relief funding where applicable for 2021 and 2020 33 Table of Contents In Thousands Three Months Ended September 30, Revenue 2021 2020 $ Increase/(Decrease) % Change Total Revenue $332,691 $291,997 $40,694 13.9% Same Center Revenue $308,243 $287,274 $20,969 7.3% Upswing in revenue reflects an overall same center 10.0% growth in total procedure volumes over the same period in the prior year as business continues to return to pre-COVID-19 levels. On a same center basis, with Mammography procedures rising 6.4%, and advanced radiology procedures of MRI, PET and CT, expanding at a combined 23.6%, revenue increased over the same period in the prior year. This same center comparison excludes revenue contributions from centers that were acquired or divested subsequent to July 1, 2020. For the three months ended September 30, 2021, net service fee revenue from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $24.4 million. For the three months ended September 30, 2020, net service fee revenue from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $4.7 million. Operating Expenses Total operating expenses for the three months ended September 30, 2021 increased approximately $31.5 million, or 11.7%, from $268.6 million for the three months ended September 30, 2020 to $300.1 million for the three months ended September 30, 2021. The following table sets forth a breakdown of our cost of operations and total operating expenses for the three months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, 2021 2020 Salaries and professional reading fees, excluding stock-based compensation $ 164,462 $ 149,970 Stock-based compensation 4,422 2,067 Building and equipment rental 31,403 26,703 Medical supplies 14,008 12,498 Other operating expenses * 58,461 55,225 Cost of operations 272,756 246,463 Depreciation and amortization 24,606 21,247 Loss on sale and disposal of equipment 2,595 342 Severance costs 163 571 Total operating expenses $ 300,120 $ 268,623 * Includes billing fees, office supplies, repairs and maintenance, insurance, business tax and license, outside services, telecom, utilities, marketing, travel and other expenses. The discussion below provides additional information and analysis on changes in our various operating expenses for the three months ended September 30, 2021 and 2020 (in thousands): Salaries and professional reading fees, excluding stock-based compensation and severance In Thousands Three Months Ended September 30, Salaries and Professional Fees 2021 2020 $ Increase/(Decrease) % Change Total Salaries $164,462 $149,970 $14,492 9.7% Same Center Salaries $151,321 $146,307 $5,014 3.4% Stemming from the higher procedure volumes noted above, our staffing levels were adjusted to support the influx of patients seeking radiology procedures, resulting in a nominal increase in salaries and professional fee expense over the same period in the prior year. This same center comparison excludes expenses from centers that were acquired or divested subsequent to July 1, 2020. For the three months ended September 30, 2021, salaries and professional reading fees from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $13.1 million. For the 34 Table of Contents three months ended September 30, 2020, salaries and professional reading fees from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was approximately $3.7 million. Stock-based compensation Stock-based compensation increased $2.4 million, or 114.0% to approximately $4.4 million for the three months ended September 30, 2021 compared to $2.1 million for three months ended September 30, 2020. This increase was a combination of awards valued at $8.9 million in stock compensation expense for employee COVID-19 related bonuses and higher fair value of RSA’s awarded and vested in the first quarter of 2021 as compared to RSA’s awarded and vested in the prior year’s first quarter. Building and equipment rental In Thousands Three Months Ended September 30, Building & Equipment Rental 2021 2020 $ Increase/(Decrease) % Change Total $31,403 $26,703 $4,700 17.6% Same Center $25,056 $25,235 $(179) (0.7)% The overall increase in building and equipment rental expenses was related to centers acquired through our business combinations, as same center expense remained stable. This same center comparison excludes expenses from centers that were acquired or divested subsequent to July 1, 2020. For the three months ended September 30, 2021, building and equipment rental expenses from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $6.3 million. For the three months ended September 30, 2020, building and equipment rental expenses from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was approximately $1.5 million. Medical supplies In Thousands Three Months Ended September 30, Medical Supplies Expense 2021 2020 $ Increase/(Decrease) % Change Total $14,008 $12,498 $1,510 12.1% Same Center $13,059 $12,275 $784 6.4% Medical supplies expense increase relates to the growth in overall procedural volumes noted above compared to the same period in the prior year and is consistent with the percentage increase in revenue over the same period in the prior year. This same center comparison excludes expenses from centers that were acquired or divested subsequent to July 1, 2020. For the three months ended September 30, 2021, medical supplies expenses from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $0.9 million. For the three months ended September 30, 2020, medical supplies expense from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $0.2 million. Other operating expenses In Thousands Three Months Ended September 30, Other Operating Expenses 2021 2020 $ Increase/(Decrease) % Change Total $58,461 $55,225 $3,236 5.9% Same Center $53,337 $53,952 $(615) (1.1)% Other operating expenses remained flat due to the cumulative effect of successful contract re-negotiations in the prior year aimed to reduce charges across a range of vendors from repair and maintenance to professional services. This same center comparison excludes expenses from centers that were acquired or divested subsequent to July 1, 2020. For the three months ended September 30, 2021, other operating expense from centers that were acquired or divested subsequent July 1, 2020 and excluded from the above comparison was $5.1 million. For the three months ended September 30, 2020, other operating expense from centers that were acquired or divested subsequent to July 1, 2020 was $1.3 million. Depreciation and amortization 35 Table of Contents In Thousands Three Months Ended September 30, Depreciation & Amortization 2021 2020 $ Increase/(Decrease) % Change Total $24,606 $21,247 $3,359 15.8% Same Center $21,749 $20,443 $1,306 6.4% This same center comparison excludes expenses from centers that were acquired or divested subsequent to July 1, 2020. For the three months ended September 30, 2021, depreciation expense from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $2.9 million. For the three months ended September 30, 2020, depreciation and amortization from centers that were acquired or divested subsequent to July 1, 2020 and excluded from the above comparison was $0.8 million. Gain on sale and disposal of equipment and other We recorded losses on the disposal of equipment and other items of approximately $2.6 million for the three months ended September 30, 2021 and approximately $0.3 million for the three months ended September 30, 2020. Non-cash change in fair value of interest rate hedge We recorded a gain of $2.9 million for the ineffective portion of our 2019 Swaps for the three months ended September 30, 2021 and a expense of $0.7 million for three months ended September 30, 2020. Other income We recorded other income of approximately $0.2 million for the three months ended September 30, 2021 and $0.1 million for the corresponding period ending September 30, 2020. Severance costs We incurred severance expenses of $0.2 million for the three months ended September 30, 2021 and $0.6 million for the three months ended September 30, 2020. Interest expense In Thousands Three Months Ended September 30, Interest Expense 2021 2020 $ Increase/(Decrease) % Change Total Interest Expense $12,032 $11,061 $971 8.8 % Interest related to derivatives* $3,700 $1,603 Interest related to amortization** $647 $1,103 Adjusted Interest Expense*** $7,685 $8,355 $(670) (8.0) % * Includes interest on current and prior derivative instruments not related to debt obligations. ** Includes combined noncash amortization of deferred loan costs and discount on issuance of debt. ***Includes interest related to our term loans, revolving credit line,notes, finance leases and other. Excluding the effect of interest expense related to derivatives and amortization for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, interest expense decreased $0.7 million, or 8.0%. The reduction in interest expense corresponds to lowered variable LIBOR and Prime interest rates paid on our term loan and revolving debt based on market conditions. See “Liquidity and Capital Resources” below for more details on our credit facilities. To mitigate our future interest expense exposure we have entered into certain interest rate swap agreements. See the Derivative Instruments section of Note 2, Significant Accounting Policies, to the condensed consolidated financial statements included in this report for more details on our derivative transactions. Equity in earnings from unconsolidated joint ventures 36 Table of Contents For the three months ended September 30, 2021 we recognized equity in earnings from unconsolidated joint ventures in the amount of $2.9 million and for three months ended September 30, 2020 we recognized equity in earnings from unconsolidated joint ventures of $2.3 million, an increase of $0.6 million or 25.4%. The increase was mainly related to the equity in earnings received from our interest in the Arizona Diagnostic Radiology Group joint venture, which was formed in the fourth quarter of 2020. Income tax provision We recorded income tax expense of $5.3 million, or an effective tax rate of 20.0%, for the three months ended September 30, 2021 compared to income tax expense of $3.8 million, or an effective tax rate of 27.2% for the three months ended September 30, 2020. The income tax rates for the three and nine months ended September 30, 2021 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships; (ii) effects of state income taxes; and (iii) excess tax benefits attributable to share-based compensation. Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020 Total Revenue inclusive of Provider Relief funding for 2020 In Thousands Nine Months Ended September 30, Revenue 2021 2020 $ Increase/(Decrease) % Change Total Revenue $988,219 $789,601 $198,618 25.2% Same Center Revenue $913,503 $768,383 $145,120 18.9% Increased revenue reflects an overall same center 25.0% growth in total procedure volumes over the same period in the prior year as business returned to pre-COVID-19 levels. Total Provider Relief funding used to offset lost revenue due to the pandemic and included in the above amounts was $6.2 million for the nine months ended September 30, 2021 and $25.7 million for the nine months ended September 30, 2020. This comparison excludes revenue contributions from centers that were acquired or divested subsequent to January 1, 2020. For the nine months ended September 30, 2021, net service fee revenue from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $74.7 million. For the nine months ended September 30, 2020, net service fee revenue from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $21.2 million. Operating Expenses Total operating expenses for the nine months ended September 30, 2021 increased approximately $135.5 million, or 17.5%, from $774.8 million for the nine months ended September 30, 2021 to $910.3 million for the nine months ended September 30, 2020. The following table sets forth a breakdown of our cost of operations and total operating expenses for the nine months ended September 30, 2021 and 2020 (in thousands): 37 Table of Contents Nine Months Ended September 30, 2021 2020 Salaries and professional reading fees, excluding stock-based compensation $ 515,227 $ 429,292 Stock-based compensation 21,566 10,144 Building and equipment rental 91,253 80,148 Medical supplies 42,246 33,812 Other operating expenses * 168,316 154,700 Cost of operations 838,608 708,096 Depreciation and amortization 71,273 64,536 (Gain) loss on sale and disposal of equipment (279) 543 Severance costs 715 1,647 Total operating expenses $ 910,317 $ 774,822 * Includes billing fees, office supplies, repairs and maintenance, insurance, business tax and license, outside services, telecom, utilities, marketing, travel and other expenses. Salaries and professional reading fees, excluding stock-based compensation and severance In Thousands Nine Months Ended September 30, Salaries and Professional Fees 2021 2020 $ Increase/(Decrease) % Change Total Salaries $515,227 $429,292 $85,935 20.0% Same Center Salaries $478,215 $417,280 $60,935 14.6% The increase in salaries expense was a result of a return to normal pre-Covid19 levels of business. Staffing levels have been adjusted to support higher patient volumes with the corresponding rise in salaries and professional fee expense. This comparison excludes expenses from centers that were acquired or divested subsequent to January 1, 2020. For the nine months ended September 30, 2021, salaries and professional reading fees from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $37.0 million. For the nine months ended September 30, 2020, salaries and professional reading fees from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was approximately $12.0 million. Stock-based compensation Stock-based compensation increased $11.4 million, or 112.6% to approximately $21.6 million for the nine months ended September 30, 2021 compared to $10.1 million for nine months ended September 30, 2020. This increase was driven by the higher fair value of RSA’s awarded and vested in the nine months of 2021 as compared to RSA’s awarded and vested in the prior year’s same period. In addition, we granted awards valued at $8.9 million in compensation expense in employee COVID-19 related bonuses during the first nine months of 2021. Building and equipment rental In Thousands Nine Months Ended September 30, Building & Equipment Rental 2021 2020 $ Increase/(Decrease) % Change Total $91,253 $80,148 $11,105 13.9% Same Center $75,434 $74,877 $557 0.7% The increase in building and equipment rental expenses was related to centers acquired through our business combinations, as same center expense remained steady. This comparison excludes expenses from centers that were acquired or divested subsequent to January 1, 2020. For the nine months ended September 30, 2021, building and equipment rental expenses from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $15.8 million. For the nine months ended September 30, 2020, building and equipment rental expenses from centers that 38 Table of Contents were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was approximately $5.3 million. Medical supplies In Thousands Nine Months Ended September 30, Medical Supplies Expense 2021 2020 $ Increase/(Decrease) % Change Total $42,246 $33,812 $8,434 24.9% Same Center $39,752 $33,019 $6,733 20.4% Medical supplies expense increase stems from the overall procedural volumes noted above compared to the same period in the prior year and is consistent with the percentage increase in revenue. This comparison excludes expenses from centers that were acquired or divested subsequent to January 1, 2020. For the nine months ended September 30, 2021, medical supplies expenses from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $2.5 million. For the nine months ended September 30, 2020, medical supplies expense from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $0.8 million. Other operating expenses In Thousands Nine Months Ended September 30, Other Operating Expenses 2021 2020 $ Increase/(Decrease) % Change Total $168,316 $154,700 $13,616 8.8% Same Center $152,932 $148,840 $4,092 2.8% The minimal increase in other operating expenses were mitigated by the cumulative effect of successful contract re-negotiations in the prior year aimed to reduce charges across a range of vendors. This comparison excludes expenses from centers that were acquired or divested subsequent to January 1, 2020. For the nine months ended September 30, 2021, other operating expense from centers that were acquired or divested subsequent January 1, 2020 and excluded from the above comparison was $15.4 million. For the nine months ended September 30, 2020, other operating expense from centers that were acquired or divested subsequent to January 1, 2020 was $5.9 million. Depreciation and amortization In Thousands Nine Months Ended September 30, Depreciation & Amortization 2021 2020 $ Increase/(Decrease) % Change Total $71,273 $64,536 $6,737 10.4% Same Center $63,957 $62,267 $1,690 2.7% This comparison excludes expenses from centers that were acquired or divested subsequent to January 1, 2020. For the nine months ended September 30, 2021, depreciation expense from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $7.3 million. For the nine months ended September 30, 2020, depreciation and amortization from centers that were acquired or divested subsequent to January 1, 2020 and excluded from the above comparison was $2.3 million. Loss on sale and disposal of equipment and other We recorded a gain on the disposal of equipment and other items of approximately $0.3 million for the nine months ended September 30, 2021 and a loss on the disposal of equipment of approximately $0.5 million for the nine months ended September 30, 2020. Non-cash change in fair value of interest rate hedge We recorded a gain of $14.1 million for the ineffective portion of our 2019 Swaps for the nine months ended September 30, 2021 and an expense of $4.5 million for the nine months ended September 30, 2020. Other (income) expenses 39 Table of Contents We recorded other expense of approximately $7.7 million for the nine months ended September 30, 2021 mainly related to our refinancing of our term loan debt and the change in fair value of contingent consideration. We recorded other income of approximately $0.2 million for the nine months ended September 30, 2020 Severance Costs We incurred severance expenses of $0.7 million for the nine months ended September 30, 2021 and $1.6 million for the nine months ended September 30, 2020. Interest expense In Thousands Nine Months Ended September 30, Interest Expense 2021 2020 $ Increase/(Decrease) % Change Total Interest Expense $37,028 $33,443 $3,585 10.7 % Interest related to derivatives* $11,034 $3,152 Interest related to amortization*** $2,725 $3,266 Adjusted Interest Expense $23,269 $27,025 $(3,756) (13.9) % * Includes interest on derivatives not related to debt obligations. ** Includes interest related to our term loans, revolving credit line, notes, finance leases, and other ***Includes combined noncash amortization of deferred loan costs and discount on issuance of debt. Excluding interest expense for derivatives and amortization for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, interest expense decreased $3.8 million, or 13.9% and relates to lowered variable LIBOR and Prime interest rates paid on our term loan and revolving debt. See “Liquidity and Capital Resources” below for more details on our credit facilities. Equity in earnings from unconsolidated joint ventures For the nine months ended September 30, 2021 we recognized equity in earnings from unconsolidated joint ventures in the amount of $8.3 million and for the nine months ended September 30, 2020 we recognized equity in earnings from unconsolidated joint ventures of $5.2 million, an increase of $3.1 million or 59.6%. The increase was mainly related to the equity in earnings received from our interest in the Arizona Diagnostic Radiology Group joint venture, which was formed in the fourth quarter of 2020. Income tax expense We recorded a provision for income tax of $12.5 million, or an effective tax rate of 22.6%, for the nine months ended September 30, 2021 compared to a benefit for income tax of $5.0 million , or an effective tax rate of 28.3% for the nine months ended September 30, 2020. The income tax rates for the three and nine months ended September 30, 2021 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships; (ii) effects of state income taxes; and (iii) excess tax benefits attributable to share-based compensation. Adjusted EBITDA We use both GAAP and non-GAAP metrics to measure our financial results. We believe that, in addition to GAAP metrics, certain non-GAAP metrics, such as Adjusted EBITDA assist us in measuring our business performance, cash generated from operations, leverage capacity and ability to service our debt obligations. We believe this information is useful to investors and other interested parties because we are highly leveraged and our non-GAAP metrics remove non-cash and certain other charges that occur in the affected period and provide a basis for measuring the Company's financial condition against other quarters. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, each from continuing operations and excluding losses or gains on the disposal of equipment, other income or loss, loss on debt extinguishment, bargain purchase gains and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to noncontrolling interests in subsidiaries, and is adjusted for non-cash or 40 Table of Contents extraordinary and one-time events taking place during the period. We have not made specific adjustments to our calculation of Adjusted EBITDA in response to COVID 19. Our net income (loss) reflected below includes the effect of revenue received under the Provider Relief Fund of $6.2 million and $25.7 million for the nine months ended September 30, 2021 and 2020, respectively. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is most comparable to the GAAP financial measure, net income (loss) attributable to RadNet, Inc. common stockholders. The following is a reconciliation of GAAP net income (loss) attributable to RadNet, Inc. common stockholders to Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020, respectively. Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Net income (loss) attributable to RadNet, Inc. common stockholders $ 16,220 $ 6,156 $ 28,550 $ (20,797) Provision for (benefit from) income taxes 5,284 3,825 12,534 (5,029) Interest expense 12,032 11,061 37,028 33,443 Severance costs 163 571 715 1,647 Depreciation and amortization 24,606 21,247 71,272 64,536 Non-cash employee stock-based compensation 4,422 2,067 21,566 10,144 Loss (gain) on sale and disposal of equipment and other 2,595 342 (279) 543 Debt restructuring and loss on extinguishment expenses — — 6,044 — Non-cash change in fair value of interest rate hedge (2,870) 679 (14,149) 4,523 Other adjustment to joint venture investment — — (565) — Other expenses (167) (139) 1,699 (247) Adjusted EBITDA $ 62,285 $ 45,809 $ 164,415 $ 88,763 Liquidity and Capital Resources The following table summarizes key balance sheet data related to our liquidity as of September 30, 2021 and December 31, 2020 and income statement data for the nine months ended September 30, 2021 and 2020 (in thousands): Balance Sheet Data: September 30, 2021 December 31, 2020 Cash and cash equivalents $ 151,253 $ 102,018 Accounts receivable 152,409 129,585 Working capital (exclusive of current operating lease liabilities) 39,114 (61,896) Stockholders' equity 339,379 258,303 Income statement data for the nine months ended September 30, 2021 2020 Total net revenue $ 981,928 $ 763,905 Net income (loss) attributable to RadNet common stockholders 28,550 (20,797) We operate in a capital intensive, high fixed-cost industry that requires significant amounts of capital to fund operations. In addition to operations, we require a significant amount of capital for the initial start-up and development of new diagnostic imaging facilities, the acquisition of additional facilities and new diagnostic imaging equipment. Because our cash flows from operations have been insufficient to fund all of these capital requirements, we have depended on the availability of financing under credit arrangements with third parties. 41 Table of Contents During the nine months ended September 30, 2021 we had a substantial acceleration of procedure volumes compared to the prior year. Net income from the period, together with proceeds from the refinance of our credit facility has resulted in substantial improvement of our working capital position compared to December 31, 2020. However, as noted in our forward looking statements, we are uncertain of the duration and ultimate severity of the effects of the COVID 19 pandemic on our business. Although we have received government stimulus funding and are undertaking measures to reduce operating expenses, we may again experience operating losses as a result of the pandemic which can impact both the consumption and cost of our medical imaging services. We have credit available from our current credit facilities and borrowing under those facilities is subject to continued compliance with lending covenants. We currently meet those requirements, and expect that we will continue to do so for the foreseeable future, but substantial and sustained operating losses could impact our ability to borrow under those facilities. If we are not able to meet such requirements, we may be required to seek additional financing and there can be no assurance that we will be able to obtain financing from other sources on terms acceptable to us, if at all. On a continuing basis, we also consider various transactions to increase shareholder value and enhance our business results, including acquisitions, divestitures and joint ventures. These types of transactions may result in future cash proceeds or payments but the general timing, size or success of any acquisition, divestiture or joint venture effort and the related potential capital commitments cannot be predicted. We expect to fund any future acquisitions primarily with cash flow from operations and borrowings, including borrowing from amounts available under our senior secured credit facilities or through new equity or debt issuances. We and our subsidiaries or affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt or equity securities in privately negotiated or open market transactions, by tender offer or otherwise. Sources and Uses of Cash The following table summarizes key components of our sources and uses of cash for the nine months ended September 30, 2021 and 2020: Cash Flow Data September 30, 2021 September 30, 2020 Cash provided by operating activities $ 100,295 $ 170,343 Cash used in investing activities (159,506) (88,280) Cash provided by (used in) financing activities 108,478 (33,495) Cash provided by operating activities for the nine months ended September 30, 2021 was $100.3 million and $170.3 million for the nine months ended September 30, 2020. Our cash provided by operating activities for the period ended September 30, 2020 was benefited by the receipt of $39.5 million in CMS advances recorded as deferred revenue. Cash used in investing activities for the nine months ended September 30, 2021, included purchases of property and equipment for approximately $88.5 million and the acquisition of imaging business and other assets for $70.1 million. As part of our business operations we continually evaluate investment opportunities. Cash provided by financing activities of $108.5 million for the nine months ended September 30, 2021, was due to refinancing of our term loan obligations with the Second Amended and Restated First Lien Credit and Guaranty Agreement on April 23, 2021. Please see Note 5, Credit Facilities and Notes Payable in the notes to consolidated financials statements for more information. We have entered into factoring agreements with various institutions and sold certain accounts receivable under non-recourse agreements. 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. Payments on the associated notes receivables will be 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, 2021 we have $18.3 million, net of discount, remaining to be collected on these agreements. We do not utilize factoring arrangements as an integral part of our financing for working capital. Senior Secured Credit Facilities We maintain secured credit facilities with Barclays Bank PLC and with SunTrust Bank. The Barclays credit facilities are comprised of first lien term loans and a revolving credit facility of $195.0 million. The SunTrust credit facilities are 42 Table of Contents comprised of a term loan and a revolving credit facility of $30.0 million. As of September 30, 2021, we were in compliance with all covenants under our credit facilities. Deferred financing costs at September 30, 2021, net of accumulated amortization, was $2.3 million and is specifically related to our Barclays revolving credit facility. Included in our condensed consolidated balance sheets at September 30, 2021 are $771.2 million of total term loan debt (exclusive of unamortized discounts of $14.3 million) in thousands: Face Value Discount Total Carrying Value First Lien Term Loans $ 723,188 $ (13,735) $ 709,453 SunTrust Term Loan 48,000 — 48,000 Total Term Loans $ 771,188 $ (13,735) $ 757,453 At September 30, 2021, we had no borrowings under our Barclays or SunTrust revolving credit facilities. After reserves for outstanding letters of credit of $7.8 million on our Barclays Revolving Credit Facility, we have $187.2 million available for borrowing and $30.0 million available under our SunTrust Revolving Credit Facility. We expect our existing capital resources, anticipated cash from operations and our borrowing capacity under our credit facilities will be sufficient to sustain our operations for the next twelve months and the foreseeable future. Please see Note 5, Credit Facilities and Notes Payable in the notes to consolidated financials statements for more information on our secured credit facilities and refinancing activity of April 23, 2021.