What changed in this filing

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Item 1A. Risk Factors

2022-03-01 compared with 2021-03-16 · 140 added, 126 removed, 224 unchanged (54% of the section changed)

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If our contracted radiology practices terminate their agreements with us, our business could substantially diminish.

Our relationship with professional corporations contracted to provide medical services is an integral part of our business.

These professional corporations must use their best efforts to provide medical services at any new facilities that we open or acquire in their areas of operation.

In addition, these professional corporation's strong relationships with referring physicians are largely responsible for the revenue generated at the facilities they service.

Our business is substantially dependent on the radiology groups that we contract with to provide medical services.

The radiology groups are party to substantially all of the managed care contracts from which we derive revenue.

Under the terms of our management agreements, these radiology groups must use their best efforts to provide medical services at our centers as

well as any new centers that we open or acquire in their areas of operation.

Although our management agreements are for multiple years, the radiology groups have the right to terminate the agreements if we default on our obligations and fail to cure the default.

Also, the various radiology groups’ ability to continue performing under the management agreements may be curtailed or eliminated due to the groups’ financial difficulties, loss of physicians or other circumstances.

If the radiology groups cannot perform their obligations to us, we would need to contract with one or more other radiology groups to provide the professional medical services at the facilities serviced by the group.

Also, the various radiology groups’ ability to continue performing under the management agreements may be curtailed or eliminated due to the radiology groups’ own financial difficulties, loss of physicians or other circumstances.

If any of our contracted radiology groups cannot perform their obligations to us, we would need to contract with one or more other radiology groups to provide the professional medical services.

We may not be able to locate radiology groups willing to provide those services on terms acceptable to us, if at all.

Even if we were able to do so, any replacement radiology group’s relationships with referring physicians may not be as extensive as those of the terminated group.

In any such event, our business could be seriously harmed.

In addition, the radiology groups are party to substantially all of the managed care contracts from which we derive revenue.

If we were unable to readily replace these contracts, our revenue would be negatively affected.

Our ability to generate revenue depends in large part on referrals from physicians.

We derive substantially all of our net revenue, directly or indirectly, from fees charged for the diagnostic imaging services performed at our facilities.

We depend on referrals of patients from unaffiliated physicians and other third parties who have no contractual obligations to refer patients to us for a substantial portion of the services we perform.

If a sufficiently large number of these physicians and other third parties were to discontinue referring patients to us, our scan volume could decrease, which would reduce our net revenue and operating margins.

Further, commercial third-party payors have implemented programs that could limit the ability of physicians to refer patients to us.

For example, prepaid healthcare plans, such as health maintenance organizations, sometimes contract directly with providers and require their enrollees to obtain these services exclusively from those providers.

Some insurance companies and self-insured employers also limit these services to contracted providers.

These “closed panel” systems are now common in the managed care environment.

Other systems create an economic disincentive for referrals to providers outside the system’s designated panel of providers.

If we are unable to compete successfully for these managed care contracts, our results and prospects for growth could be adversely affected.

In addition, the radiology group’s relationships with referring physicians are largely responsible for the revenue generated at the centers they service.

Any replacement radiology group’s relationships with referring physicians may not be as extensive as those of the terminated group.

The termination of a management agreement with a radiology group could result in both short and long-term loss of revenue and adversely affect our performance and competitive position in the markets served by the departing radiology group.

If our contracted radiology practices, including the Group, lose a significant number of their radiologists, our financial results could be adversely affected.

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In addition, competition in recruiting radiologists may make it difficult for our contracted radiology practices to maintain adequate levels of radiologists.

If a significant number of radiologists terminate their relationships with our contracted radiology practices and those radiology practices cannot recruit sufficient qualified radiologists to fulfill their obligations under our agreements with them, our ability to maximize the use of our diagnostic imaging facilities and our financial results could be adversely affected.

If a significant number of radiologists terminate their relationships with our contracted radiology practices and those radiology practices cannot recruit sufficient qualified radiologists to fulfill their obligations under our agreements with them, our ability to maximize the use of our diagnostic imaging centers and our financial results could be adversely affected.

Increased expenses for the Group will impact our financial results because the management fee we receive from them, which is based on a percentage of their collections, is adjusted annually to take into account their expenses as applicable.

Neither we, nor our contracted radiology practices, maintain insurance on the lives of any affiliated physicians.

We may become subject to professional malpractice liability, which could be costly and negatively impact our business.

The physicians employed by our contracted radiology practices are from time to time subject to malpractice claims.

We structure our relationships with the practices under our management agreements in a manner that we believe does not constitute the practice of medicine by us or subject us to professional malpractice claims for acts or omissions of physicians employed by the contracted radiology practices.

Nevertheless, claims, suits or complaints relating to services provided by the contracted radiology practices have been asserted against us in the past and may be asserted against us in the future.

In addition, we may be subject to professional liability claims, including, without limitation, for improper use or malfunction of our diagnostic imaging equipment or for accidental contamination or injury from exposure to radiation.

We may not be able to maintain adequate liability insurance to protect us against those claims at acceptable costs or at all.

Historically, we have sought to manage this risk of loss by, among other things, purchasing professional liability insurance.

However, the insurer from which we purchased such insurance for the period ending July 15, 2017, Fairway Physicians Insurance Company, A Risk Retention Group (“Fairway”), experienced financial hardship.

As a result, on August 29, 2017, the District of Columbia Department of Insurance, Securities and Banking (“DISB”) found that Fairway was statutorily insolvent and that its continued operation would be hazardous to its policyholders, creditors and the general public.

On October 25, 2017, the Superior Court for the District of Columbia issued an order authorizing the DISB Commissioner to liquidate Fairway.

Fairway’s liquidation is currently pending, and it is presently unknown whether the Fairway liquidation estate will be able to pay covered policyholder claims, including claims asserted against us.

Our ability to generate revenue depends in large part on referrals from physicians.

We depend on unaffiliated physicians and other third parties who have no contractual obligations to refer patients to us for a substantial portion of the services we perform.

Further, commercial third-party payors have implemented managed care programs that could limit the ability of physicians to refer patients to us.

For example, health maintenance organizations sometimes contract directly with providers and require their enrollees to obtain these services exclusively from those contracted providers.

Some insurance companies and self-insured employers also limit these services to contracted providers.

These “closed panel” systems are now common in the managed care environment.

Other systems such as preferred physician organizations create an economic disincentive for referrals to providers outside the system’s designated panel of providers.

We seek to be the designated provider under these systems.

If we are unable to compete successfully for these managed care contracts, our net revenues and our prospects for growth could be adversely affected.

We may become subject to professional malpractice liability, which could be costly and negatively impact our reputation and business.

The physicians employed by our contracted radiology groups are from time to time subject to malpractice claims.

We structure our relationships with the radiology groups under our management agreements in a manner that we believe does not constitute the practice of medicine by us, or subject us to professional malpractice claims for acts or omissions of physicians employed by the contracted radiology practices.

Nevertheless, claims relating to services provided by the contracted radiology practices have been asserted against us in the past and may be asserted against us in the future.

In addition, we may be subject to other professional liability claims, including for improper use or malfunction of our diagnostic imaging equipment, or for accidental contamination, or injury from exposure to radiation.

We seek to manage this risk through the purchase of professional liability insurance.

Any claim made against us that is not fully covered by insurance could be costly to defend, result in a substantial damage award against us and divert the attention of our management from our operations, all of which could have an adverse effect on our financial performance.

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Although California places a $250,000 limit on non-economic damages for medical malpractice cases, no limit applies to economic damages and no such limits exist in the other states in which we provide services.

Even if we purchase professional liability insurance we are dependent on the creditworthiness of the insurance provider.

For a period of time ending in July 2017 we purchased professional liability insurance from Fairway Physicians

Insurance Company, A Risk Retention Group (“Fairway”).

Fairway experienced financial hardship.

On October 25, 2017, the Superior Court for the District of Columbia issued an order authorizing the DISB Commissioner to liquidate Fairway.

Fairway’s liquidation is currently pending, and it is presently unknown whether the Fairway liquidation estate will be able to pay covered policyholder claims, including claims asserted against us.

We may not receive payment from some of our healthcare provider customers because of their financial circumstances.

We contract with commercial insurance and managed care providers to provide diagnostic images services to their members.

Some of our healthcare provider customers do not have significant financial resources, liquidity or access to capital.

If these customers experience financial difficulties they may be unable to pay us for the equipment and services that we provide.

If these customers experience financial difficulties they may be unable to pay us for the services that we provide.

A significant deterioration in general or local economic conditions could have a material adverse effect on the financial health of certain of our healthcare provider customers.

As a result, we may have to increase the amounts of accounts receivables that we write-off, which would adversely affect our financial condition and results of operations.

If our health care provider customers suffer financial hardship they could delay or default on their payment obligations to us, reducing our accounts receivable and negatively impacting our results of operations.

Capitation fee arrangements could reduce our operating margins.

For the year ended December 31, 2020, we derived approximately 13% of our total net revenue from capitation arrangements, and we intend to increase the revenue we derive from capitation arrangements in the future.

Under capitation arrangements, the payor pays a pre-determined amount per-patient per-month in exchange for us providing all necessary covered services to the patients covered under the arrangement.

These contracts pass much of the financial risk of providing diagnostic imaging services, including the risk of over-use, from the payor to the provider.

Our success depends in part on our ability to negotiate effectively, on behalf of the contracted radiology practices and our diagnostic imaging facilities, contracts with health maintenance organizations, employer groups and other third-party payors for services to be provided on a capitated basis and to efficiently manage the utilization of those services.

If we are not successful in managing the utilization of services under these capitation arrangements or if patients or enrollees covered by these contracts require more frequent or extensive care than anticipated, we would incur unanticipated costs not offset by additional revenue, which would reduce operating margins.

For the year ended December 31, 2021, we derived approximately 11% of our total net revenue from capitation arrangements, and we expect to continue to derive a significant portion of our revenue from capitation arrangements in the future.

Under capitation arrangements, the payor pays us a pre-determined amount per-patient per-month, and in exchange we are required to provide all necessary covered services to the patients covered under the arrangement.

These contracts pass much of the financial risk of providing diagnostic imaging services, including the risk of over-use, from the payor to us as the provider.

Our ability to generate profit from these arrangements is dependent on our ability to correctly forecast demand for services for the patient base, negotiate appropriate pre-determined amounts with the payor and efficiently manage the utilization of those services.

If we are not successful in forecasting demand patients or enrollees covered by these contracts require more frequent or extensive care than anticipated, or if we are not efficient in managing the utilization of services under these capitation arrangements, we would incur unanticipated costs not offset by additional revenue, which would reduce operating margins.

Changes in the method or rates of third-party reimbursement could have a negative impact on our results

From time to time, changes designed to contain healthcare costs have been implemented, some of which have resulted in decreased reimbursement rates for diagnostic imaging services that impact our business.

On August 4, 2020, CMS released the 2021 Medicare Physician Fee Schedule proposed rules, which proposed significant payment reductions effective January 1, 2021 for radiology services as a result of a proposed new coding structure for the office/outpatient evaluation and management (E/M) and statutorily mandated budget neutrality rules.

While the Consolidated Appropriations Acct, 2021 (H.R.

133), enacted on December 27, 2020, mitigated the reimbursement cuts for 2021, H.R.

133 does not completely eliminate the cuts and only reduces their impact for 2021.

Moreover, absent further and more permanent intervention from Congress, CMS could propose and impose similar or more significant reimbursement cuts in the years ahead, thus negatively impacting our revenue.

From time to time, federal and state reimbursement programs such as Medicare or Medicaid implement changes designed to contain healthcare costs, some of which have resulted in decreased reimbursement rates for diagnostic imaging services that impact our business.

On July 13, 2021, Centers for Medicare and Medicaid Services (“CMS”) released the 2022 Medicare Physician Fee Schedule proposed rules, which proposed significant payment reductions effective January 1, 2022 for radiology services as a result of changes to relative value units (RVUs), redistributive effects of the CMS proposed clinical labor pricing update, phase-in implementation of the previously finalized updates to supply and equipment pricing, and statutorily mandated budget neutrality rules.

The Protecting Medicare and American Farmers from Sequester Cuts Act, enacted on December 10, 2021, mitigated the reimbursement cuts, reducing their impact in certain respects and delaying implementation of certain portions of the cuts, but the act does not completely eliminate the cuts.

Furthermore, absent further and more permanent intervention from Congress, CMS could propose and impose similar or more significant reimbursement cuts in the months and years ahead.

One of the principal objectives of health maintenance organizations and preferred provider organizations is to control the cost of healthcare services.

Managed care contracting has become very competitive, and reimbursement schedules are at or below Medicare reimbursement levels.

The expansion of health maintenance organizations, preferred provider organizations and other managed care organizations within the geographic areas covered by our network could have a negative impact on the utilization and pricing of our services, because these organizations will exert greater control over patients’ access to diagnostic imaging services, the selections of the provider of such services and reimbursement rates for those services.

Relatedly, reimbursement rate cuts may be pursued as a cost-saving measure by third party payors resulting from the implementation of the federal No Surprises Act (H.R.

133) and similar insurer-provider payment dispute laws, which also may negatively impact our revenue.

Any reduction in the rate that we can charge for our imaging services under these programs will reduce our net revenues and our operating margins per procedure.

Unless we can secure additional procedure volumes, increase utilization of our equipment, or change the overall mix of service procedures that we provide, a decline in reimbursement rates will reduce our net revenues and results of operations.

Disruption or malfunction in our information systems could adversely affect our business.

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• computer viruses, penetration by hackers seeking to disrupt operations or misappropriate information and other breaches of security.

We have technology security initiatives and disaster recovery plans in place to mitigate our risk to these vulnerabilities, but these measures may not be adequate or implemented properly to ensure that our operations are not disrupted or that data security breaches do not occur.

We maintain multiple layers of security measures and are continuously enhance our security technologies to address new threats.

Our defenses are monitored and routinely tested internally and by external parties.

Despite these efforts, our facilities and systems have been, and may in the future be, vulnerable to privacy and security incidents;

security attacks and breaches;

acts of vandalism or theft;

computer viruses;

coordinated attacks by activist entities;

emerging cybersecurity risks;

misplaced or lost data;

programming and/or human errors;

or other similar events.

In addition, these threats are constantly changing, thereby increasing the difficulty of successfully defending against them or implementing adequate preventive measures.

Emerging and advanced security threats, including coordinated attacks, require additional layers of security which may disrupt or impact efficiency of operations.

We suffered an unauthorized access to our network and could again face attempts by others to gain unauthorized access through the Internet or to introduce malicious software to our information technology systems.

If a malicious hacker gained unauthorized access to our systems and network, it could have a material adverse impact on our business or operations.

If a malicious hacker gains unauthorized access to our systems and network, it could have a material adverse impact on our business or operations.

Such incidents, whether or not successful, could result in our incurring significant costs related to, for example, rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages, or taking other remedial steps with respect to third parties.

In addition, these threats are constantly changing, thereby increasing the difficulty of successfully defending against them or implementing adequate preventive measures.

Accordingly, an extended interruption in our information technology system’s function could significantly curtail, directly and indirectly, our ability to conduct our business and generate revenue.

An extended interruption in our information technology system’s function could significantly curtail, directly and indirectly, our ability to conduct our business and generate revenue.

If our network was compromised, it could give rise to unwanted media attention, materially damage our payor and physician relationships, harm our business, reputation, results of operations, cash flows and financial condition, result in fines or lawsuits, and may increase the costs we incur to protect against such information security breaches, such as increased investment in technology, the costs of compliance with consumer protection laws and costs resulting from consumer fraud.

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Competition among manufacturers for a greater share of the diagnostic imaging equipment market may result in technological advances in the speed and imaging capacity of new equipment.

This may accelerate the obsolescence of our equipment, and we may not have the financial ability to acquire the new or improved equipment and may not be able to maintain a competitive equipment base.

In addition, advances in technology may enable physicians and others to perform diagnostic imaging procedures without us.

If we are unable to deliver our services in the efficient and effective manner that payors, physicians and patients expect our revenue could substantially decrease.

Our scale in both the number of our locations and the number and types of imaging equipment we offer is one of our competitive advantages.

If the development of new technologies accelerates the obsolescence of our current equipment, we may lose some of our competitive advantage.

We may also be required to accelerate the depreciation on existing equipment and incur significant capital expenditures to acquire the new technologies.

We may not have the financial ability to acquire the new or improved equipment and may not be able to maintain a competitive equipment base.

Risks Related to Our Ability to Grow Our Business

We face various risks related to health epidemics and other outbreaks, which may have a material adverse effect on our business, financial condition, results of operations and cash flows.

We face various risks related to health epidemics and other outbreaks, including the global outbreak of COVID-19.

the COVID-19 pandemic, changes in patient behavior related to illness, pandemic fears and market downturns, and restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have led to disruption of our business and volatility in the global capital markets.

The United States government has taken steps to attempt to mitigate some of the more severe anticipated effects of the COVID-19 pandemic, including the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Additionally, we have received some funding from the U.S.

We face various risks related to health epidemics and other outbreaks, including the global outbreak of COVID-19 (including the virus' variants that have emerged and could emerge in the future):

• Restrictions intended to slow the spread of COVID-19, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have led and may in the future lead to periods where procedure volumes drop significantly;

• Disruptions in supply chains can affect the cost and availability of reagents and other materials needed for certain procedures;

• Significant portions of our workforce may be unable to work illness, quarantines, facility closures, ineffective remote work arrangements or technology failures or limitations;

• General economic downturns as a result of COVID-19 may affect demand or pricing for our services;

• Volatility in the global capital markets may result in a decrease in the price of our common stock, or an increase in our cost of capital.

We received some funding from the U.S.

Department of Health & Human Services under the CARES Act’s Public Health and Social Services Emergency Fund (PHSSEF), which is geared towards supporting healthcare related expenses or lost revenue attributable to COVID-19.

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Moreover, while we believe we are in compliance with the applicable terms and conditions of funding under PHSSEF, compliance-related guidance for the program remains in process, and we may face enforcement risk if we are found to have failed to comply with such terms and conditions.

If significant portions of our workforce are unable to work effectively as a result of the COVID-19 pandemic, including because of illness, quarantines, facility closures, ineffective remote work arrangements or technology failures or limitations, our operations would be adversely impacted.

We currently believe our results of operations will continue to be negatively impacted by these developments.

Our results of operations have recovered from the initial outbreak of COVID-19, but a further outbreak or similar pandemic event would negatively impact our results of operations.

In addition, changes to statutes, regulations or regulatory policies or practices as a result of, or in response to COVID-19, could affect us in substantial and unpredictable ways.

Given the many uncertainties and far-reaching consequences of potential developments, we cannot assure that the COVID-19 outbreak and the many related impacts will not require extended or additional diagnostic center closures and other disruptions to our business or will not materially and adversely affect our business, results of operations and financial condition for significant periods of time moving forward.

Pressure to control healthcare costs could have a negative impact on our results.

One of the principal objectives of health maintenance organizations and preferred provider organizations is to control the cost of healthcare services.

Healthcare providers participating in managed care plans may be required to refer diagnostic imaging tests to certain providers depending on the plan in which a covered patient is enrolled.

In addition, managed care contracting has become very competitive, and reimbursement schedules are at or below Medicare reimbursement levels.

We experience competition from other diagnostic imaging companies and hospitals, and this competition could adversely affect our revenue and business.

The market for diagnostic imaging services is highly competitive.

We compete for patients principally on the basis of our reputation, our ability to provide multiple modalities at many of our facilities, the location of our facilities and the quality of our diagnostic imaging services.

We compete locally with groups of radiologists, established hospitals, clinics and other independent organizations that own and operate imaging equipment.

Our competitors include independent imaging operators, such as Alliance Healthcare and smaller regional operators, as well as hospitals and hospital groups that operate their own imaging services.

Some of our competitors may now or in the future have access to greater financial resources than we do and may have access to newer, more advanced equipment.

In addition, some physician practices have established their own diagnostic imaging facilities within their group practices and compete with us.

We compete for patients principally on the basis of our reputation, our ability to provide multiple modalities at many of our centers, the location of our centers and the quality of our diagnostic imaging services.

Our competitors include independent imaging operators, such as Alliance Healthcare Services and smaller regional operators, as well as hospitals, clinics and radiology groups that operate their own imaging equipment.

Some of our competitors may have, now or in the future, access to greater financial resources than we do and may have access to newer, more advanced equipment.

We are experiencing increased competition as a result of such activities, and if we are unable to successfully compete, our business and financial condition would be adversely affected.

Our success depends in part on our key personnel and loss of key executives could adversely affect our operations.

In addition, former employees and radiology practices we have previously contracted with could use the experience and relationships developed while employed or under contract with us to compete with us.

Our success depends in part on our ability to attract and retain qualified senior and executive management, and managerial and technical personnel.

Competition in recruiting these personnel may make it difficult for us to continue our growth and success.

The loss of their services or our inability in the future to attract and retain management and other key personnel could hinder the implementation of our business strategy.

The loss of the services of Dr.

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Hames or Stephen M.

Forthuber, our Chief Operating Officers, West Coast and East Coast, respectively, could have a significant negative impact on our operations.

We believe that they could not easily be replaced with executives of equal experience and capabilities.

Additionally, if we lose the services of Dr.

Berger, our relationship with BRMG could deteriorate, which would materially adversely affect our business.

Forthuber, our Chief Operating Officers, West Coast and East Coast, respectively, could hinder our ability to execute our business strategy and have a significant negative impact on our operations.

We believe that they could not easily be replaced with executives of equal experience and capabilities, which would adversely affect our business.

Former employees and radiology practices we have previously contracted with could use the experience and relationships developed while employed or under contract with us to compete with us.

The agreements with most of our radiology practices contain non-compete provisions;

however the enforceability of these provisions is determined by a court based on the facts and circumstances of the specific case at the time enforcement is

Our inability to enforce radiologists’ non-compete provisions could result in increased competition from individuals who are knowledgeable about our business strategies and operations.

Many of the states in which we operate do not enforce agreements that prohibit a former employee from competing with a former employer.

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A former executive, manager or other key employee who joins one of our competitors could use the relationships he or she established with third party payors, radiologists or referring physicians while our employee and the industry knowledge he or she acquired during that tenure to enhance the new employer’s ability to compete with us.

The agreements with most of our radiology practices contain non-compete provisions;

however the enforceability of these provisions is determined by a court based on all the facts and circumstances of the specific case at the time enforcement is sought.

Our inability to enforce radiologists’ non-compete provisions could result in increased competition from individuals who are knowledgeable about our business strategies and operations.

Our failure to successfully, and in a timely manner, integrate acquired businesses and/or new lines of businesses could reduce our profitability.

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In addition, there can be no assurance that our new lines of business will ultimately be successful.

The failure to successfully manage these risks in the development and implementation of new lines of business could have a material, adverse effect on the Company’s business, financial condition, and results of operations.

The failure to successfully manage these risks in the development and implementation of new lines of business could have a material, adverse effect on our business, financial condition, and results of operations.

We may not generate the expected benefits from our recent investment in AI technologies.

We believe that technology advancements including AI will significantly impact diagnostic images services in the future.

As part of our growth strategy we have acquired or invested in in a number of AI companies and technologies, including DeepHealth, Inc., NeuroLogix, Inc., WhiteRabbit.ai, and recently Aidence Holding B.V.

and Quantib B.V.

Our focus in AI technologies is aimed at developing solutions that improve the quality of diagnostic imaging, reduce operating costs, and correspondingly improve our competitive position.

The success of our AI investments will depend upon a number of factors, some of which are out of our control, such as:

• our ability to effectively integrate the operations of the acquired companies, including retaining key personnel;

• whether any of our existing or future AI products will receive European CE or U.S.

FDA 510(k) clearance or other clearances and or regulatory approvals necessary for commercialization;

• whether our AI solutions will prove effective for improving health care quality, patient services or business procedures;

• our ability to successfully commercialize and secure market acceptance of our AI solutions from patients and health care providers;

• the development of competing technologies by other companies, and the relative efficacy, cost and ease of use of those technologies.

There is no guarantee that we will receive the anticipated benefits from the investments we have made and may continue to make in the area of AI.

Any failure would result in reduced operating profits and the potential impairment of goodwill related to those investments, which would further impact our profitability.

We may not be able to successfully grow our business, which would adversely affect our financial condition and results of operations.

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These acquisitions have added 19 centers to our fixed-site outpatient diagnostic imaging services.

Our ability to successfully expand through acquiring facilities, developing new facilities, adding equipment at existing facilities, and directly or indirectly entering into contractual relationships with high-quality radiology practices depends upon many factors, including our ability to:

Our ability to successfully expand through acquiring centers,

developing new centers, adding equipment at existing centers, and directly or indirectly entering into contractual relationships with high-quality radiology practices depends upon many factors, including our ability to:

• identify attractive and willing candidates for acquisitions;

• identify locations in existing or new markets for development of new facilities;

• identify locations in existing or new markets for development of new centers;

• comply with legal requirements affecting our arrangements with contracted radiology practices;

• obtain regulatory approvals where necessary and comply with licensing and certification requirements applicable to our diagnostic imaging facilities, the contracted radiology practices and their associated physicians;

• obtain regulatory approvals where necessary and comply with licensing and certification requirements applicable to our diagnostic imaging centers, the contracted radiology practices and their associated physicians;

• recruit a sufficient number of qualified radiology technologists and other non-medical personnel;

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• compete for opportunities.

We may not be able to compete effectively for the acquisition of diagnostic imaging facilities.

We may not be able to compete effectively for the acquisition of diagnostic imaging centers.

Our competitors may have more established operating histories and greater resources than we do.

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A restriction in our ability to make capital expenditures would restrict our growth and could adversely affect our business.

We operate in a capital intensive, high fixed-cost industry that requires significant amounts of capital to fund operations, particularly the initial start-up and development expenses of new diagnostic imaging facilities and the acquisition of additional facilities and new diagnostic imaging equipment.

We incur capital expenditures to, among other things, upgrade and replace equipment for existing facilities and expand within our existing markets and enter new markets.

If we open or acquire additional imaging facilities, we may have to incur material capital lease obligations.

To the extent we are unable to generate sufficient cash from our operations, funds are not available from our lenders or we are unable to structure or obtain financing through operating leases, finance leases or long-term installment notes, we may be unable to meet our capital expenditure requirements to support the maintenance and continued growth of our operations.

We operate in a capital intensive, high fixed-cost industry that requires significant amounts of capital to fund operations, particularly the initial start-up and development expenses of new diagnostic imaging centers and the acquisition of additional centers and new diagnostic imaging equipment.

We incur capital expenditures to, among other things, upgrade and replace equipment for existing centers and expand within our existing markets and enter new markets.

If we open or acquire additional imaging centers, we may have to incur material capital lease obligations.

To the extent we are unable to generate sufficient cash from our operations, funds are not available under our credit facilities or we are unable to structure or obtain financing through operating leases, finance leases or long-term installment notes, we may be unable to meet the capital expenditure requirements necessary to support the maintenance and continued growth of our operations.

Risks Related to Healthcare Laws and Regulations

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Even for those patients who remain in private insurance plans, changes to those plans could increase patient financial responsibility, resulting in a greater risk of uncollectible receivables.

Furthermore, additional changes to, or repeal of, the PPACA, whether through legislation or judicial action, may also affect reimbursement and coverage in ways that are currently unpredictable.

Furthermore, additional changes to, or repeal of, the PPACA, whether through legislation or judicial action, may also affect reimbursement

and coverage in ways that are currently unpredictable.

These factors and events could have a material adverse effect on our business, financial condition, and results of operations.

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Adoption of new false claims statutes in states where we operate may impose additional burdens on us.

Federal and state privacy and information security laws are complex, and if we fail to comply with applicable laws, regulations and standards, or if we fail to properly maintain the integrity of our data, protect our proprietary rights to our systems, or defend against cybersecurity attacks, we may be subject to government or private actions due to privacy and security breaches, and our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected.

Our operations rely on the secure processing, transmission and storage of confidential, proprietary and other information in our computer systems and networks.

We must comply with numerous federal and state laws and regulations governing the collection, dissemination, access, use, security and privacy of PHI, including HIPAA and its implementing privacy and security regulations, as amended by the federal HITECH Act and collectively referred to as HIPAA.

Information security risks have significantly increased in recent years in part because of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct our operations, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign state agents.

If we fail to comply with applicable privacy and security laws, regulations and standards, properly maintain the integrity of our data, protect our proprietary rights to our systems, or defend against cybersecurity attacks, our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected.

We are continuously implementing multiple layers of security measures.

We utilize current security technologies and our defenses are monitored and routinely tested internally and by external parties.

Despite these efforts, our facilities and systems may be vulnerable to privacy and security incidents;

security attacks and breaches;

acts of vandalism or theft;

computer viruses;

coordinated attacks by activist entities;

emerging cybersecurity risks;

misplaced or lost data;

programming and/or

human errors;

or other similar events.

Emerging and advanced security threats, including coordinated attacks, require additional layers of security which may disrupt or impact efficiency of operations.

Any security breach involving the misappropriation, loss or other unauthorized disclosure or use of confidential information, including protected health information, financial data, competitively sensitive information, or other proprietary data, whether by us or a third party, could have a material adverse effect on our business, reputation, financial condition, cash flows, or results of operations.

The occurrence of any of these events could result in interruptions, delays, the loss or corruption of data, cessations in the availability of systems or liability under privacy and security laws, all of which could have a material adverse effect on our financial position and results of operations and harm our business reputation.

If we are unable to protect the physical and electronic security and privacy of our databases and transactions, we could be subject to potential liability and regulatory action, our reputation and relationships with our patients and vendors would be harmed, and our business, operations, and financial results may be materially adversely affected.

Failure to adequately protect and maintain the integrity of our information systems (including our networks) and data, or to defend against cybersecurity attacks, could subject us to monetary fines, civil suits, civil penalties or criminal sanctions and requirements to disclose the breach publicly, and may further result in a material adverse effect on our results of operations, financial position, and cash flows.

If we fail to comply with federal and state privacy and information security laws mandating protection of certain confidential data against disclosure, including cybersecurity attacks, we may be subject to government or private actions.

Information security risks have significantly increased in recent years in part because of the proliferation of new technologies, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign state agents.

We could also be required to disclose the breach publicly, which may damage our business reputation with our patients and vendors and cause a further material adverse effect on our results of operations, financial position, and cash flows.

Complying with federal and state regulations is an expensive and time-consuming process, and any failure to comply could result in substantial penalties.

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• state laws governing reimbursement for diagnostic services related to services compensable under workers' compensation rules.

If our operations are found to be in violation of any of the laws and regulations to which we or the radiology practices with which we contract are subject, we may be subject to penalties, including civil and criminal penalties, damages, fines and the curtailment of our operations.

the curtailment of our operations.

Any penalties, damages, fines or curtailment of our operations, individually or in the aggregate, could adversely affect our ability to operate our business and our financial results.

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If we fail to comply with various licensure, certification and accreditation standards, we may be subject to loss of licensure, certification or accreditation, which would adversely affect our operations.

Ownership, construction, operation, expansion and acquisition of our diagnostic imaging facilities are subject to various federal and state laws, regulations and approvals concerning licensing of personnel, other required certificates for certain types of healthcare facilities and certain medical equipment.

In addition, freestanding diagnostic imaging facilities that provide services independent of a physician’s office must be enrolled by Medicare as an independent diagnostic treatment facility, or IDTF, to bill the Medicare program.

Ownership, construction, operation, expansion and acquisition of our diagnostic imaging centers are subject to various federal and state laws, regulations and approvals concerning licensing of personnel, other required certificates for certain types of healthcare facilities and certain medical equipment.

In addition, freestanding diagnostic imaging centers that provide services independent of a physician’s office must be enrolled by Medicare as an independent diagnostic treatment facility, or IDTF, to bill the Medicare program.

Medicare carriers have discretion in applying the IDTF requirements and therefore the application of these requirements may vary from jurisdiction to jurisdiction.

In addition, federal legislation requires all suppliers that provide the technical component of diagnostic MRI, PET/CT, CT, and nuclear medicine to be accredited by an accreditation organization designated by CMS (which currently include the American College of Radiology (ACR), the Intersocietal Accreditation Commission (IAC) and the Joint Commission).

Our MRI, CT, nuclear medicine, ultrasound and mammography facilities are currently accredited by the American College of Radiology.

Our MRI, CT, nuclear medicine, ultrasound and mammography centers are currently accredited by the American College of Radiology.

We may not be able to receive the required regulatory approvals or accreditation for any future acquisitions, expansions or replacements, and the failure to obtain these approvals could limit the opportunity to expand our services.

Our facilities are subject to periodic inspection by governmental and other authorities to assure continued compliance with the various standards necessary for licensure and certification.

Our centers are subject to periodic inspection by governmental and other authorities to assure continued compliance with the various standards necessary for licensure and certification.

If any facility loses its certification under the Medicare program, then the facility will be ineligible to receive reimbursement from the Medicare and Medicaid programs.

For the year ended December 31, 2021, approximately 21% and 3% of our net service fee revenue came from Medicare and various state Medicaid programs, respectively.

A change in the applicable certification status of one of our facilities could adversely affect our other facilities and in turn us as a whole.

A change in the applicable certification status of one of our centers could adversely affect our other centers and in turn us as a whole.

Credentialing of physicians is required by our payors prior to commencing payment.

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We provide management, administrative, technical and other non-medical services to the radiology practices in exchange for a service fee typically based on a percentage of the practice’s revenue.

We structure our relationships with the radiology practices, including the purchase of diagnostic imaging facilities, in a manner that we believe keeps us from engaging in the practice of medicine or exercising control over the medical judgments or decisions of the radiology practices or their physicians, or violating the prohibitions against fee-splitting.

There can be no assurance that our present arrangements with the Group or the physicians providing medical services and medical supervision at our imaging facilities will not be challenged, and, if challenged, that they will not be found to violate the corporate practice of medicine or fee splitting prohibitions, thus subjecting us to potential damages, injunction and/or civil and criminal penalties or require us to restructure our arrangements in a way that would affect the control or quality of our services and/or change the amounts we receive under our management agreements.

We structure our relationships with the radiology practices, including the purchase of diagnostic imaging centers, in a manner that we believe keeps us from engaging in the practice of medicine or exercising control over the medical judgments or decisions of the radiology practices or their physicians, or violating the prohibitions against fee-splitting.

State laws and enforcement efforts regarding corporate practice of medicine and fee-splitting are often subject to change.

As a consequence, there can be no assurance that our present arrangements with the Group or the physicians providing medical services and medical supervision at our imaging centers will not be challenged, and, if challenged, that they will not be found to violate the corporate practice of medicine or fee splitting prohibitions, thus subjecting us to potential damages, injunction and/or civil and criminal penalties or require us to restructure our arrangements in a way that would affect the control or quality of our services and/or change the amounts we receive under our management agreements.

Any of these results could jeopardize our business.

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We could incur significant costs and the diversion of our management’s attention in order to comply with current or future environmental and health and safety laws and regulations.

Also, we cannot completely eliminate the risk of accidental contamination or injury from these hazardous materials.

Also, we cannot completely eliminate the risk of accidental contamination or injury from these hazardous

Although we maintain professional liability insurance coverage in amounts we believe is consistent with industry practice in the event of an accident, we could be held liable for any resulting damages, and any liability could exceed the limits of or fall outside the coverage of our professional liability insurance.

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Our corporate headquarters and over 100 of our radiology centers are located in California, which is subject to wildfires, blackouts, and potentially damaging earthquakes.

In addition, several of our facilities located in parts of the east coast have suffered from weather events that caused us to temporarily close facilities.

In addition, several of our centers located in parts of the east coast have suffered from weather events that caused us to temporarily close centers.

More recently, the novel coronavirus outbreak has impacted our business.

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In addition, the U.S.

securities markets have experienced significant price and volume fluctuations.

securities markets periodically experience significant price and volume fluctuations.

These fluctuations often have been unrelated to the operating performance of companies in these markets.

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In the past, following periods of volatility in the market price of an individual company’s securities, securities class action litigation often has been instituted against that company.

The institution of similar litigation against us could result in substantial costs and a diversion of management’s attention and resources, which could negatively affect our business, results of operations or financial condition.

The institution of similar litigation against us could result in

substantial costs and a diversion of management’s attention and resources, which could negatively affect our business, results of operations or financial condition.

Our substantial debt could adversely affect our financial condition and prevent us from fulfilling our obligations under our outstanding indebtedness.

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We are highly leveraged.

As of December 31, 2020, our total combined indebtedness of term loans, capital leases and notes payable, excluding discount on term loan debt, was $662.4 million.

Term loan indebtedness, excluding related discount, was $662.4 million, of which the Barclays first lien term loans were $611.0 million and the SunTrust term loan was $51.4 million.

As of December 31, 2021 term loan indebtedness, excluding related discount, was $767.9 million, of which the Barclays first lien term loans were $721.4 million and the SunTrust term loan was $46.5 million.

Our substantial indebtedness could also:

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Our determination of our tax liability is subject to review by applicable tax authorities.

Any audits or challenges of such determinations may adversely affect our effective tax rate, tax payments or financial condition.

Any audits or challenges of such

determinations may adversely affect our effective tax rate, tax payments or financial condition.

Recently enacted U.S.

tax legislation, the most significant of which is the Tax Cuts and Jobs Act of 2017 (the "Tax Act") , made significant changes to federal tax law, including the taxation of corporations, by, among other things, reducing the corporate income tax rate, disallowing certain deductions that had previously been allowed, and altering the expensing of capital expenditures.

tax legislation, the most significant of which is the Tax Act, made significant changes to federal tax law, including the taxation of corporations, by, among other things, reducing the corporate income tax rate, disallowing certain deductions that had previously been allowed, and altering the expensing of capital expenditures.

The ultimate impact of the Tax Act may differ from our estimates due to changes in interpretations and assumptions made by us as well as potential amendments, technical corrections, and additional regulatory guidance that may be issued, and any such changes could have an adverse effect on our business, results of operations, financial condition and cash flow.

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We may be required to recognize an impairment of our goodwill or other indefinite-lived intangible assets, which could have an adverse effect on our financial position and results of operations.

We recognized an impairment of goodwill and trade name in our Imaging On Call reporting unit in the amount of $3.9 million for the year ended December 31, 2018.

During the current year of 2020 we ceased employing certain indefinite lived trade names with a total value of $4.2 million and they were written off in full.

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.

We are required to perform impairment tests for goodwill and other indefinite-lived intangible assets annually and whenever events or circumstances indicate that it is more likely than not that impairment exists or that the carrying amounts of the assets may not be recoverable, we recognize an impairment.

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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-K

Item 1A. Risk Factors