What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-09 · 170 added, 133 removed, 687 unchanged (31% of the section changed)

3 unchanged sentences

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

September 30,

2022 December 31,

30 unchanged sentences

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

57,303,565 and 53,548,227 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

57,290,756 and 53,548,227 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in-capital 424,369 342,592

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Depreciation and amortization 29,229 24,606 85,209 71,272

Loss (gain) on sale and disposal of equipment and other 81 ( 1,567 ) 1,209 ( 2,874 )

(Gain) loss on sale and disposal of equipment and other ( 247 ) 2,595 962 ( 279 )

Severance costs 195 163 496 715

6 unchanged sentences

Debt restructuring and extinguishment expenses — — — 6,044

Other (income) expenses ( 7 ) 1,658 158 1,867

Total other expenses (income) 2,324 16,717 ( 9,255 ) 16,222

Other expenses (income) 1,405 ( 167 ) 1,562 1,699

Total other (income) expenses ( 1,711 ) 6,142 ( 10,966 ) 22,363

INCOME BEFORE INCOME TAXES 8,635 26,428 35,727 55,539

13 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(IN THOUSANDS)

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

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

2022 2021 2022 2021

4 unchanged sentences

Less comprehensive income attributable to noncontrolling interests 5,779 4,924 17,055 14,455

COMPREHENSIVE INCOME ATTRIBUTABLE TO

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO

COMMON STOCKHOLDERS $ ( 4,408 ) $ 17,129 $ 2,325 $ 31,283

3 unchanged sentences

(IN THOUSANDS EXCEPT SHARE DATA)

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended June 30, 2022 and June 30, 2021.

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended September 30, 2022 and September 30, 2021.

Common Stock Additional Paid-In

7 unchanged sentences

Shares Amount

BALANCE - MARCH 31, 2022 56,197,826 $ 5 $ 409,863 $ ( 20,761 ) $ ( 90,260 ) $ 298,847 $ 122,603 $ 421,450

BALANCE - JUNE 30, 2022 57,303,565 $ 5 $ 419,136 $ ( 24,603 ) $ ( 82,355 ) $ 312,183 $ 139,202 $ 451,385

Issuance of common stock under the equity compensation plan 2,500 — — — — — — —

1 unchanged sentence

Stock-based compensation expense — — 3,362 — — 3,362 — 3,362

Adjustment for shares returned/forfeited ( 22,484 ) — ( 45 ) — — ( 45 ) — ( 45 )

Sale of economic interests in majority owned subsidiary, net of taxes — — 1,916 — — 1,916 — 1,916

4 unchanged sentences

Net income — — — — 668 668 5,779 6,447

BALANCE-SEPTEMBER 30, 2022 57,290,756 $ 5 $ 424,369 $ ( 29,680 ) $ ( 81,688 ) $ 313,006 $ 145,384 $ 458,390

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

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

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

Issuance of common stock under the equity compensation plan 94,638 — — — — — — —

1 unchanged sentence

Stock-based compensation expense — — 4,463 — — 4,463 — 4,463

Issuance of common stock for sale of unregistered securities for acquisition 67,658 — 2,025 — — 2,025 — 2,025

Forfeiture of restricted stock ( 3,365 ) — ( 42 ) — — ( 42 ) — ( 42 )

Sale of noncontrolling interests, net of taxes — — 4,198 — — 4,198 7,404 11,602

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

2 unchanged sentences

Net income — — — — 16,220 16,220 4,924 21,144

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

BALANCE-SEPTEMBER 30, 2021 53,301,816 $ 5 $ 335,599 $ ( 21,317 ) $ ( 89,450 ) $ 224,837 $ 114,542 $ 339,379

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

2 unchanged sentences

(IN THOUSANDS EXCEPT SHARE DATA)

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the six months ended June 30, 2022 and June 30, 2021.

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the nine months ended September 30, 2022 and September 30, 2021

Common Stock Additional Paid-In

12 unchanged sentences

Issuance of common stock for sale of unregistered securities for acquisition 2,106,292 — 56,470 — — 56,470 — 56,470

Adjustment for shares returned/forfeited ( 22,484 ) — ( 45 ) — — ( 45 ) — ( 45 )

Contribution from noncontrolling partner — — — — — — 11,077 11,077

4 unchanged sentences

Net income — — — — 11,585 11,585 17,055 28,640

BALANCE-JUNE 30, 2022 57,303,565 $ 5 $ 419,136 $ ( 24,603 ) $ ( 82,355 ) $ 312,183 $ 139,202 $ 451,385

BALANCE-SEPTEMBER 30, 2022 57,290,756 $ 5 $ 424,369 $ ( 29,680 ) $ ( 81,688 ) $ 313,006 $ 145,384 $ 458,390

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

3 unchanged sentences

Stock-based compensation expense — — 21,608 — — 21,608 — 21,608

Issuance of common stock for sale of unregistered securities for acquisition 67,658 — 2,025 — — 2,025 — 2,025

Adjustment for shares returned/forfeited ( 3,365 ) — ( 42 ) — — ( 42 ) — ( 42 )

Sale of noncontrolling interests, net of taxes — — 4,198 — — 4,198 7,404 11,602

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

3 unchanged sentences

Other — — — 1 ( 1 ) — — —

Net (loss) income — — — — 12,331 12,331 9,531 21,862

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

Net income — — — — 28,550 28,550 14,455 43,005

BALANCE-SEPTEMBER 30, 2021 53,301,816 $ 5 $ 335,599 $ ( 21,317 ) $ ( 89,450 ) $ 224,837 $ 114,542 $ 339,379

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

2 unchanged sentences

(IN THOUSANDS)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

11 unchanged sentences

Change in fair value of contingent consideration

( 1,287 ) 1,292

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

17 unchanged sentences

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

Proceeds from sale of economic interest in majority owned subsidiary, net of taxes — 11,602

Proceeds from revolving credit facility — 128,300

13 unchanged sentences

Supplemental Schedule of Non-Cash Investing and Financing Activities

We acquired equipment and certain leasehold improvements for approximately $ 60.8 million and $ 42.1 million during the six months ended June 30, 2022 and 2021, respectively, which were not paid for as of June 30, 2022 and 2021 , respectively.

We acquired equipment and certain leasehold improvements for approximately $ 61.0 million and $ 50.5 million during the nine months ended September 30, 2022 and 2021, respectively, which were not paid for as of September 30, 2022 and 2021 , respectively.

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

1 unchanged sentence

See Note 4, Facility Acquisitions contained herein.

On January 20, 2022, we issued 1,141,234 shares of our common stock to complete our purchase of Aidence Holding B.V..The shares were ascribed a value of $ 30.6 million.

On January 20, 2022, we issued 1,141,234 shares of our common stock to complete our purchase of Aidence Holding B.V.

The shares were ascribed a value of $ 30.6 million.

On January 20, 2022, we issued 965,058 shares to complete our purchase of Quantib B.V.

The shares were ascribed a value of $ 25.9 million.

On August 24, 2021, we completed our stock purchase of Tangent Associates LLC by issuing 67,658 shares of our common stock to complete the transaction.

The shares were ascribed a value of $ 2.0 million.

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

4 unchanged sentences

We are a national provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States.

At June 30, 2022, we operated directly or indirectly through joint ventures with hospitals, 353 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

At September 30, 2022, we operated directly or indirectly through joint ventures with hospitals, 349 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

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

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VIEs that we consolidate as the primary beneficiary consist of professional corporations which are owned or controlled by individuals within our senior management and provide professional medical services for centers in Arizona, California, Delaware, Maryland, New Jersey and New York.

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

These VIEs are collectively referred to as the Group.

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

5 unchanged sentences

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

The Group on a combined basis recognized $ 46.8 million and $ 45.1 million of revenue, net of management services fees to RadNet, for the three months ended June 30, 2022 and 2021, respectively and $ 46.8 million and $ 45.1 million of operating expenses for the three months ended June 30, 2022 and 2021, respectively.

RadNet recognized $ 202.4 million and $ 190.6 million of total billed net service fee revenue for the three months ended June 30, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 92.5 million and $ 91.2 million of revenue, net of management services fees to RadNet, for the six months ended June 30, 2022 and 2021, respectively and $ 92.5 million and $ 91.2 million of operating expenses for the six months ended June 30, 2022 and 2021, respectively.

RadNet recognized $ 393.4 million and $ 369.5 million of total billed net service fee revenue for the six months ended June 30, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 48.9 million and $ 43.8 million of revenue, net of management services fees to RadNet, for the three months ended September 30, 2022 and 2021, respectively and $ 48.9 million and $ 43.8 million of operating expenses for the three months ended September 30, 2022 and 2021, respectively.

RadNet recognized $ 190.6 million and $ 186.8 million of total billed net service fee revenue for the three months ended September 30, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 141.4 million and $ 135.0 million of revenue, net of management services fees to RadNet, for the nine months ended September 30, 2022 and 2021, respectively and $ 141.4 million and $ 135.0 million of operating expenses for the nine months ended September 30, 2022 and 2021, respectively.

RadNet recognized $ 584.0 million and $ 556.4 million of total billed net service fee revenue for the nine months ended September 30, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

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

All intercompany balances and transactions have been eliminated in consolidation.

In our condensed consolidated balance sheets at June 30, 2022 and December 31, 2021, we have included approximately $ 100.6 million and $ 89.2 million, respectively, of accounts receivable and approximately $ 17.7 million and $ 14.4 million of accounts payable and accrued liabilities related to the Group, respectively.

In our condensed consolidated balance sheets at September 30, 2022 and December 31, 2021, we have included approximately $ 102.1 million and $ 89.2 million, respectively, of accounts receivable and approximately $ 14.8 million and $ 14.4 million of accounts payable and accrued liabilities related to the Group, respectively.

At all of our centers not serviced by the Group we have entered into long-term contracts with medical groups to provide professional services at those centers, including supervision and interpretation of diagnostic imaging procedures.

8 unchanged sentences

Maximum exposure to loss is the loss that we would absorb in the event that all of the assets of ScriptSender are deemed worthless.

We paid operating expenses for the venture of $ 0.6 million in each of the three months ended June 30, 2022, and June 30, 2021, respectively and $ 1.0 million and $ 1.2 million for the six months ended June 30, 2022 and June 30, 2021, respectively.

We paid operating expenses for the venture of $ 0.5 million and $ 0.6 million for the three months ended September 30, 2022 and September 30, 2021, respectively and $ 1.5 million and $ 1.8 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and, therefore, do not include all information and footnotes necessary for conformity with U.S.

generally accepted accounting principles for complete financial statements;

however, in the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods ended June 30, 2022 and 2021 have been made.

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

10 unchanged sentences

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

As it relates to others centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and

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

As it relates to other centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as

clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

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

4 unchanged sentences

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

Our total service fee revenues during the three and six months ended June 30, 2022 and 2021 are presented in the table below.

Our imaging review is based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage.

Our total service fee revenues during the three and nine months ended September 30, 2022 and 2021 are presented in the table below.

Our imaging center revenue is displayed as the estimated service fee, broken down by classification of insurance coverage type.

Additional revenues are earned from our management services provided to joint ventures and our software and AI subsidiaries.

In Thousands Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

13 unchanged sentences

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

Beginning in the second quarter of 2020 and through the six months ended June 30, 2022, we received funding from the various programs established by the CARES Act as follows:

Beginning in the second quarter of 2020, we received funding from the various programs established by the CARES Act as follows:

• $ 39.6 million total of accelerated Medicare payments received, $ 39.5 million in the twelve months ended December 31, 2020 and $ 0.1 million in the twelve months ended December 31, 2021.

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

• $ 35.4 million total Provider Relief Funding, $ 26.3 million received for the twelve months ended December 31, 2020 and $ 9.1 million received for the twelve months ended December 31, 2021, with $ 43.0 thousand received for the three months ended June 30, 2021 and $ 6.3 million received during the six months ended June 30, 2021.

• $ 35.4 million total Provider Relief Funding, $ 26.3 million received for the twelve months ended December 31, 2020 and $ 9.1 million received for the twelve months ended December 31, 2021, with no funds received for the three months ended September 30, 2021 and $ 6.3 million received during the nine months ended September 30, 2021.

The accelerated Medicare payments were recorded to Deferred Revenue in our consolidated balance sheet and are being applied to revenue as services are performed beginning in 2021.

Through June 30, 2022, $ 38.6 million of the accelerated Medicare payments has been applied to revenue.

Through September 30, 2022, $ 38.6 million of the accelerated Medicare payments has been applied to revenue.

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

4 unchanged sentences

In 2021 we qualified for a portion of the credit and recorded a benefit of $ 7.7 million through a reduction of payroll tax expense.

Our remaining payroll tax liability balance of approximately $ 8.1 million at June 30, 2022, will be paid by December 31, 2022.

Our remaining deferred payroll tax liability balance of approximately $ 8.1 million at September 30, 2022, will be paid by December 31, 2022.

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

4 unchanged sentences

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

Amounts remaining to be collected on these agreement were $ 17.0 million and $ 17.7 million at June 30, 2022 and December 31, 2021, respectively.

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

Amounts remaining to be collected on these agreements were $ 15.5 million and $ 17.7 million at September 30, 2022 and December 31, 2021, respectively.

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

Deferred financing costs, net of accumulated amortization, were $ 1.9 million and $ 2.1 million, as of June 30, 2022 and December 31, 2021, respectively and related to our Barclays Revolving Credit Facility.

Deferred financing costs, net of accumulated amortization, were $ 1.8 million and $ 2.1 million, as of September 30, 2022 and December 31, 2021, respectively and related to our Barclays Revolving Credit Facility.

See Note 6, Credit Facilities and Notes Payable for more information.

1 unchanged sentence

Depreciation of property and equipment is performed using the straight-line method over the estimated useful lives of the assets acquired, which range from 3 to 15 years.

Leasehold improvements are amortized at the lesser of lease term or their estimated useful lives, which range from 3 to 15 years.

Leasehold improvements are amortized at the lesser of the lease term or their estimated useful lives, which range from 3 to 15 years.

Maintenance and repairs are charged to expense as incurred.

4 unchanged sentences

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

GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at June 30, 2022 totaled $ 577.8 million.

Indefinite lived intangible assets at June 30, 2022 were $ 12.7 million.

GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at September 30, 2022 totaled $ 575.1 million.

Indefinite lived intangible assets at September 30, 2022 were $ 12.7 million.

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

When we determine the carrying value of 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.

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.

We tested goodwill and indefinite lived intangibles for impairment on October 1, 2021, noting no impairment.

We considered the current and expected future economic and market conditions including those resulting from the COVID-19 pandemic and did not identify an indication of goodwill impairment being more likely than not through June 30, 2022 .

Activity in goodwill for the six months ended June 30, 2022 is provided below (in thousands):

We considered the current and expected future economic and market conditions including those resulting from the COVID-19 pandemic and

did not identify an indication of goodwill impairment being more likely than not through September 30, 2022 .

Activity in goodwill for the nine months ended September 30, 2022 is provided below (in thousands):

Balance as of December 31, 2021 $ 513,820

2 unchanged sentences

Currency translation ( 6,369 )

Balance as of June 30, 2022 $ 577,781

Goodwill balances at June 30, 2022 reflect additional goodwill arising from deferred tax liabilities recorded on our acquisitions of Aidence Holding B.V.

Balance as of September 30, 2022 $ 575,092

Goodwill balances at September 30, 2022 reflect additional goodwill arising from deferred tax liabilities recorded on our acquisitions of Aidence Holding B.V.

and Quantib B.V.

6 unchanged sentences

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

We recorded income tax expense of $ 3.4 million, or an effective tax rate of 19.7 %, for the three months ended June 30, 2022 compared to income tax expense of $ 2.9 million, or an effective tax rate of 26.2 % for the three months ended June 30, 2021.

The income tax rates for the three and six months ended June 30, 2022 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships;

We recorded income tax expense of $ 2.2 million, or an effective tax rate of 25.3 %, for the three months ended September 30, 2022 compared to income tax expense of $ 5.3 million, or an effective tax rate of 20.0 % for the three months ended September 30, 2021.

We recorded income tax expense of $ 7.1 million, or an effective tax rate of 19.8 %, for the nine months ended September 30, 2022 compared to income tax expense of $ 12.5 million or an effective tax rate of 22.6 % for the nine months ended September 31, 2021.

The income tax rates for the three and nine months ended September 30, 2022 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships;

(ii) effects of state income taxes (iii) effects of foreign income taxes;

14 unchanged sentences

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

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of June 30, 2022.

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of September 30, 2022.

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

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See Note 7, Stock-Based Compensation, for more information.

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

Our unrealized gains or losses on foreign currency translation adjustments and swap agreements are included in comprehensive income and are included in the consolidated statements of comprehensive income for the three and six months ended June 30, 2022 and 2021 .

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

Our unrealized gains or losses on foreign currency translation adjustments and swap agreements are included in comprehensive (loss) income and are included in the consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2022 and 2021 .

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

8 unchanged sentences

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

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

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

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

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

For the three months ended June 30, 2022

Account March 31, 2022 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes June 30, 2022 Balance Location

For the three months ended September 30, 2022

Account June 30, 2022 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes September 30, 2022 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $ ( 17,039 ) $ — $ 924 $ ( 16,115 ) Equity

For the six months ended June 30, 2022

Account December 31, 2021 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes June 30, 2022 Balance Location

For the nine months ended September 30, 2022

Accumulated Other Comprehensive Loss, net of taxes $ ( 18,886 ) $ — $ 2,771 $ ( 16,115 ) Equity

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

For the three months ended June 30, 2022

For the three months ended September 30, 2022

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

Interest rate contracts $ 6,306 Other income (expense) $ ( 1,245 ) Interest Expense

For the the six months ended June 30, 2022

Interest rate contracts $ 12,451 Non-cash change in fair value of interest rate swaps $ ( 1,245 ) Interest Expense

For the nine months ended September 30, 2022

Interest rate contracts $ 27,125 Other income (expense) $ ( 2,490 ) Interest Expense

See Fair Value Measurements section below for the fair value of the 2019 Swaps at June 30, 2022.

Interest rate contracts $ 39,576 Non-cash change in fair value of interest rate swaps $ ( 3,735 ) Interest Expense

See Fair Value Measurements section below for the fair value of the 2019 Swaps at September 30, 2022.

CONTINGENT CONSIDERATION -

3 unchanged sentences

As part of the purchase agreement, we will pay up to $ 10.0 million consideration upon the completion of two identified milestones in RadNet common shares.

This contingency had a third party valuation of approximately $ 6.7 million on June 30, 2022.

The amount is reviewed quarterly and adjusted to fair

value based on the yield rate of S&P B-rated corporate bonds and the probability of FDA approval, which has been currently determined by management to be 80 %.

This contingency had a value of approximately $ 7.9 million on September 30, 2022.

The amount is reviewed quarterly and adjusted to fair value based

on the yield rate of S&P B-rated corporate bonds and the probability of FDA approval, which has been currently determined by management to be 90 % for milestone one and 80 % for milestone two.

On January 20, 2022, we completed our acquisition of all the equity interests of Quantib B.V.

3 unchanged sentences

A tabular presentation of the effect of the combined Aidence and Quantib contingent consideration on our condensed consolidated balance sheet is as follows (amounts in thousands):

For the three months ended June 30, 2022

Account March 31, 2022 Balance Amount of other non operating income recognized on contingent consideration Currency Translation June 30, 2022 Balance Location

For the three months ended September 30, 2022

Account June 30, 2022 Balance Amount of other non operating income recognized on contingent consideration Currency Translation September 30, 2022 Balance Location

Other Long Term Liabilities $ 8,437 $ 958 $ 833 $ 10,228 Liabilities and Non Operating Income

For the six months ended June 30, 2022

Account January 20, 2022 Balance Amount of other non operating income recognized on contingent consideration Currency Translation June 30, 2022 Balance Location

For the nine months ended September 30, 2022

Account January 1, 2022 Balance Issuance of contingent consideration Amount of other non operating income recognized on contingent consideration Currency Translation September 30, 2022 Balance Location

Other Long Term Liabilities $ — $ 10,459 $ ( 329 ) $ 98 $ 10,228 Liabilities and Non Operating Income

See Fair Value Measurements section below for the fair value of contingent consideration at June 30, 2022.

See Fair Value Measurements section below for the fair value of contingent consideration at September 30, 2022.

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

8 unchanged sentences

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

As of June 30, 2022

As of September 30, 2022

Level 1 Level 2 Level 3 Total

9 unchanged sentences

Contingent Consideration:

The table below summarize the estimated fair values of contingencies and holdback relating to our Aidence Holding B.V.

The table below summarizes the estimated fair values of contingencies and holdback relating to our Aidence Holding B.V.

and Quantib B.V.

acquisitions on January 20, 2022, that are subject to fair value measurements and the classification of these liabilities on our condensed consolidated balance sheets, as follows (in thousands):

As of June 30, 2022

As of September 30, 2022

Level 1 Level 2 Level 3 Total

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For Aidence Holding B.V., the milestone contingent liability was adjusted to fair value based on the yield rate of S&P B-rated corporate bonds and the probability of FDA approval.

For the Quantib B.V holdback shares, the fair value was determined by calculating the value estimated shares issuable as of the reporting date (which was $ 17.28 ) translated at the current exchange rate at June 30, 2022, the time period related to the contractual settlement term, and the probability of issuing the shares.

For the Quantib B.V holdback shares, the fair value was determined by calculating the value estimated shares issuable as of the reporting date (which was $ 20.35 ) translated at the current exchange rate at September 30, 2022, the time period related to the contractual settlement term, and the probability of issuing the shares.

As all the inputs for the contingent consideration of both Aidence Holding B.V and Quantib B.V.

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

As of June 30, 2022

As of September 30, 2022

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

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First Lien Term Loans and SunTrust Term Loan $ — $ 766,973 $ — $ 766,973 $ 767,875

At June 30, 2022 and at December 31, 2021 our Barclays revolving credit facility had no balance outstanding.

Our SunTrust revolving credit facility relating to our consolidated subsidiary The New Jersey Imaging Network ("NJIN"), had no principal amount outstanding at June 30, 2022 and at December 31, 2021.

At September 30, 2022 and at December 31, 2021 our Barclays revolving credit facility had no balance outstanding.

Our SunTrust revolving credit facility relating to our consolidated subsidiary The New Jersey Imaging Network ("NJIN"), had no principal amount outstanding at September 30, 2022 and at December 31, 2021.

The estimated fair value of our long-term debt, which is discussed in Note 6, Credit Facilities and Notes Payable, was determined using Level 2 inputs primarily related to comparable market prices.

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

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

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

2022 2021 2022 2021

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Diluted net income per share attributable to RadNet, Inc.'s common stockholders $ 0.01 $ 0.30 $ 0.19 $ 0.54

Stock options and non vested restricted awards excluded from the computation of diluted per share amounts as their effect would be antidilutive:

Fair value change for contingently available shares excluded from the computation of diluted per share amounts as its effect would be antidilutive $ 278 $ — $ — $ —

Stock options and other non vested shares excluded from the computation of diluted per share amounts as their effect would be antidilutive:

Shares issuable subject to satisfaction of certain contingencies

113,303 — — —

Shares issuable upon the exercise of stock options:

84,885 — 67,289 —

Weighted average shares for which the exercise price exceeds average market price of common stock 83,972 — 73,094 —

EQUITY INVESTMENTS AT FAIR VALUE–Accounting guidance requires entities to measure equity investments at fair value, with any changes in fair value recognized in net income.

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

As of June 30, 2022, we have three equity investments for which a fair value is not readily determinable and therefore the total amounts invested are recognized at cost as follows:

As of September 30, 2022, 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 during the three and six months ended June 30,2022.

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 during the three and nine months ended September 30, 2022.

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

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

No observable price changes or impairment in our investment was identified during the three and six months ended June 30,2022.

No observable price changes or impairment in our investment was identified during the three and nine months ended September 30, 2022.

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

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

No observable price changes, impairment in our investment or impairment of the loan receivable was identified during the three and six months ended June 30,2022.

No observable price changes, impairment in our investment or impairment of the loan receivable was identified during the three and nine months ended September 30, 2022.

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

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

No indicators of impairment existed as of June 30, 2022.

No indicators of impairment existed as of September 30, 2022.

Acquisition by Equity Method Investee

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Joint venture investment and financial information

The following table is a summary of our investment in joint ventures during the six months ended June 30, 2022 (in thousands):

The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2022 (in thousands):

Balance as of December 31, 2021 $ 42,229

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Equity contributions in existing joint ventures 1,441

Balance as of June 30, 2022 $ 48,936

We charged management service fees from the centers underlying these joint ventures of approximately $ 5.6 million and $ 5.5 million for the three months ended June 30, 2022 and 2021 and $ 11.1 million and $ 10.8 million for the six months ended June 30, 2022 and 2021, respectively.

Balance as of September 30, 2022 $ 52,020

We charged management service fees from the centers underlying these joint ventures of approximately $ 6.1 million and $ 5.3 million for the three months ended September 30, 2022 and 2021 and $ 17.2 million and $ 16.0 million for the nine months ended September 30, 2022 and 2021, respectively.

On June 24, 2022, we made an additional equity contribution to our joint venture in Arizona of $ 1.4 million.

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

The following table is a summary of key balance sheet data for these joint ventures as of June 30, 2022 and December 31, 2021 and income statement data for the six months ended June 30, 2022 and 2021 (in thousands):

The following table is a summary of key balance sheet data for these joint ventures as of September 30, 2022 and December 31, 2021 and income statement data for the nine months ended September 30, 2022 and 2021 (in thousands):

Balance Sheet Data:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets $ 48,154 $ 37,186

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Total value of RadNet joint venture interests $ 52,020 $ 42,229

Income statement data for the six months ended June 30,

Income statement data for the nine months ended September 30,

Net revenue $ 107,241 $ 98,193

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In addition we paid certain seller closing costs through the issuance of 23,362 shares at a fair value of $ 0.6 million.

We preliminarily recorded $ 1.0 million in current assets, $ 0.2 million in property plant and equipment, $ 27.7 million in intangible assets, $ 3.2 million in liabilities and $ 19.0 million in goodwill.

We recorded $ 1.0 million in current assets, $ 0.2 million in property plant and equipment, $ 27.7 million in intangible assets, $ 3.2 million in liabilities and $ 19.0 million in goodwill.

On January 20, 2022, we completed our acquisition of all the equity interests of Quantib B.V.

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Quantib is reported as part of our artificial intelligence segment, and was acquired to enhance our AI capabilities.

The transaction was accounted for as an acquisition of a business and total purchase consideration was determined to be approximately $ 42.3 million including i) 965,058 shares issued at $ 26.80 per share with a fair value of $ 25.9 million ii) cash of $ 11.8 million and iii) 113,303 shares with a fair value at the date of close of $ 3.0 million and cash holdback of $ 1.6 million to be issued 18 months after acquisition subject to adjustment for any indemnification claims and will be marked to market in subsequent periods.

We preliminarily recorded $ 2.4 million in current assets, $ 0.1 million in property plant and equipment, $ 21.3 million in intangible assets, $ 3.7 million in liabilities and $ 22.2 million in goodwill.

As noted above, our acquisitions of Aidence and Quantib are preliminary.

As we finalize our estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months).

The initial accounting is preliminary as of June 30, 2022 for the acquired assets and liabilities as we are currently in the process of completing the assessment of valuation inputs and assumptions as well as completing the assessment of the tax attributes of the business combination.

The finalization of the acquisition accounting valuation assessment may result in a change in the valuation of the deferred tax assets and liabilities and intangible assets, along with the opening working capital accounts, which could have a material impact on our results of operations and financial position.

The transaction was accounted for as an acquisition of a business and total purchase consideration was determined to be approximately $ 42.3 million including i) 965,058 shares issued at $ 26.80 per share with a fair value of $ 25.9 million ii) cash of $ 11.8 million and iii) 113,303 shares with a fair value at the date of close of $ 3.0 million and cash holdback of $ 1.6 million to be released 18 months after acquisition subject to adjustment for any indemnification claims and will be marked to market in subsequent periods.

We recorded $ 2.4 million in current assets, $ 0.1 million in property plant and equipment, $ 21.3 million in intangible assets, $ 3.7 million in liabilities and $ 22.2 million in goodwill.

Formation of majority owned subsidiary

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The operation offers multi-modality services out of six locations in Frederick, Maryland.

We contributed the operations of 4 centers to the enterprise and Hospital contributed $ 5.5 million in fixed assets, $ 3.0 million in equipment, $ 10.8 million in goodwill.

We contributed the operations of 4 centers to the enterprise and Hospital contributed $ 5.4 million in fixed assets, $ 3.0 million in equipment, and $ 10.8 million in goodwill.

As a result of the the transaction, we retain a 65 % controlling economic interest in FCR and Hospital retains a preliminary $ 11.1 million or 35 % noncontrolling economic interest in FCR.

The initial accounting is preliminary as of September 30, 2022 for the acquired assets and liabilities as we are currently in the process of completing the assessment of valuation inputs and assumptions as well as completing the assessment of the tax attributes of the business

Advanced Radiology at Capital Region, LLC

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The table below present segment information reconciled to our financial results, with segment operating income or loss including revenue less cost of operations, depreciation and amortization, and other operating expenses to the extent specifically identified by segment (in thousands):

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

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

2022 2021 2022 2021

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Total income from operations $ 6,924 $ 32,570 $ 24,761 $ 71,611

For proper comparative purposes, Imaging Center segment revenue in 2021 excludes Provider Relief Funding of $ 43.0 thousand for the three months ended June 30, 2021 and $ 6.3 million for the six months ended June 30, 2021, as it represents a form of direct Government stimulus.

For proper comparative purposes, Imaging Center segment revenue in 2021 excludes Provider Relief Funding of $ 6.3 million for the nine months ended September 30, 2021, as it represents a form of direct Government stimulus.

No such funds were received for the three months ended September 30, 2021.

NOTE 6 – CREDIT FACILITIES AND NOTES PAYABLE

As of June 30, 2022 and December 31, 2021 our term loan debt obligations are as follows (in thousands):

As of September 30, 2022 and December 31, 2021 our term loan debt obligations are as follows (in thousands):

September 30,

2022 December 31,

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Long term portion debt obligations $ 735,500 $ 743,498

We had no outstanding balance under our $ 195.0 million Barclays Revolving Credit Facility at June 30, 2022 and have reserved $ 7.6 million for certain letters of credit.

The remaining $ 187.4 million of our Barclays Revolving Credit Facility was available to draw upon as of June 30, 2022.

We had no outstanding balance under our $ 30.0 million SunTrust Revolving Credit Facility at June 30, 2022.

As of June 30, 2022, we were in compliance with all covenants under our credit facilities.

We had no outstanding balance under our $ 195.0 million Barclays Revolving Credit Facility at September 30, 2022 and have reserved $ 7.6 million for certain letters of credit.

The remaining $ 187.4 million of our Barclays Revolving Credit Facility was available to draw upon as of September 30, 2022.

We had no outstanding balance under our $ 30.0 million SunTrust Revolving Credit Facility at September 30, 2022.

As of September 30, 2022, we were in compliance with all covenants under our credit facilities.

Second Amended and Restated First Lien Credit and Guaranty Agreement

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

At June 30, 2022 the effective Eurodollar Rate and the Alternate Base Rate for the First Lien Term Loans under the Restated Credit Agreement was 1.62 % and 4.75 %, respectively and the applicable margin for the Eurodollar Rate and Alternate Base Rate First Lien Term Loans under the Restated Credit Agreement was 3.00 % and 2.00 %, respectively.

At September 30, 2022 the effective Eurodollar Rate and the Alternate Base Rate for the First Lien Term Loans under the Restated Credit Agreement was 2.49 % and 6.25 %, respectively and the applicable margin for the Eurodollar Rate and Alternate Base Rate First Lien Term Loans under the Restated Credit Agreement was 3.00 % and 2.00 %, respectively.

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

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SunTrust Credit Facilities:

At June 30, 2022, our SunTrust credit facilities, which relate to our consolidated subsidiary The New Jersey Imaging Network, L.L.C.("NJIN"), were comprised of one term loan in the principal amount described in the table above (the "SunTrust Term Loan") and a revolving credit facility of $ 30.0 million (the "SunTrust Revolving Credit Facility") both of which are provided pursuant to the Amended and Restated Revolving Credit and Term Loan Agreement dated August 31, 2018, among NJIN, as borrower, with SunTrust Bank, as administrative agent, and the lenders identified therein (as amended, the "SunTrust Credit Agreement").

At September 30, 2022, our SunTrust credit facilities, which relate to our consolidated subsidiary The New Jersey Imaging Network, L.L.C.("NJIN"), were comprised of one term loan in the principal amount described in the table above (the "SunTrust Term Loan") and a revolving credit facility of $ 30.0 million (the "SunTrust Revolving Credit Facility") both of which are provided pursuant to the Amended and Restated Revolving Credit and Term Loan Agreement dated August 31, 2018, among NJIN, as borrower, with SunTrust Bank, as administrative agent, and the lenders identified therein (as amended, the "SunTrust Credit Agreement").

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

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

Associated with the Barclays Revolving Credit Facility are deferred financing costs, net of accumulated amortization, of $ 1.9 million at June 30, 2022.

Associated with the Barclays Revolving Credit Facility are deferred financing costs, net of accumulated amortization, of $ 1.8 million at September 30, 2022.

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

4 unchanged sentences

2.75 % 1.75 %

As of June 30, 2022, the effective interest rate payable on revolving loans under the Barclays Revolving Credit Facility was 6.75 %.

As of September 30, 2022, the effective interest rate payable on revolving loans under the Barclays Revolving Credit Facility was 8.25 %.

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

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

As of June 30, 2022, NJIN had no borrowings under the SunTrust Revolving Credit Facility.

As of September 30, 2022, NJIN had no borrowings under the SunTrust Revolving Credit Facility.

NOTE 7 – STOCK-BASED COMPENSATION

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Under the Restated Plan, stock options may not be granted at a per share exercise price below the fair market value of a share of our common stock on the date of grant, may not be repriced or exchanged without stockholder approval, and the maximum exercisable term of the option may not exceed 10 years.

As of June 30, 2022, we had outstanding options to acquire 703,914 shares of our common stock, of which options to acquire 508,969 shares were exercisable.

The following summarizes all of our option transactions for the six months ended June 30, 2022:

As of September 30, 2022, we had outstanding options to acquire 703,914 shares of our common stock, of which options to acquire 508,969 shares were exercisable.

The following summarizes all of our option transactions for the nine months ended September 30, 2022:

Outstanding Options

6 unchanged sentences

Granted 229,975 28.36

Balance, June 30, 2022 703,914 15.58 6.35 $ 3,904,038

Exercisable at June 30, 2022 508,969 11.05 5.18 3,899,706

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on June 30, 2022 and the exercise price, multiplied by the number of in-the-money options as applicable) that would have been received by the holder had all holders exercised their options on June 30, 2022.

As of June 30, 2022, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 2.7 million, which is expected to be recognized over a weighted average period of approximately 2.39 years.

Balance, September 30, 2022 703,914 15.58 6.10 $ 5,270,161

Exercisable at September 30, 2022 508,969 11.05 4.93 5,204,446

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on September 30, 2022 and the exercise price, multiplied by the number of in-the-money options as applicable) that would have been received by the holder had all holders exercised their options on September 30, 2022.

As of September 30, 2022, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 1.4 million, which is expected to be recognized over a weighted average period of approximately 2.20 years.

DeepHealth Options

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

As of June 30, 2022, total unrecognized stock based compensation expense related to non-vested DeepHealth options was approximately $ 1.2 million, which is expected to be recognized over a weighted average period of approximately 1.06 years

As of September 30, 2022, total unrecognized stock based compensation expense related to non-vested DeepHealth options was approximately $ 0.9 million, which is expected to be recognized over a weighted average period of approximately 0.89 years

Outstanding Options

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Exercised ( 191,085 ) —

Balance, June 30, 2022 136,750 — 7.28 $ 2,363,040

Exercisable at June 30, 2022 70,070 — 7.28 1,210,803

Balance, September 30, 2022 129,575 — 7.03 $ 2,636,851

Exercisable at September 30, 2022 84,885 — 7.03 1,727,406

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

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

As of June 30, 2022, we have issued a total of 7,890,430 RSA’s of which 560,660 were unvested at June 30, 2022.

The following summarizes all unvested RSA’s activities during the six months ended June 30, 2022:

As of September 30, 2022, we have issued a total of 7,892,930 RSA’s of which 554,476 were unvested at September 30, 2022.

The following summarizes all unvested RSA’s activities during the nine months ended September 30, 2022:

RSA's Weighted-Average

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Vested ( 550,248 ) $ 21.95

RSA's unvested at June 30, 2022 560,660 1.56 $ 23.81

Forfeited or Canceled ( 1,252 ) $ 28.53

RSA's unvested at September 30, 2022 554,476 1.29 $ 23.84

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

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

During the six months ended June 30, 2022, awards totalling 1,000 shares with a value of approximately $ 19.0 thousand were granted.

During the nine months ended September 30, 2022, awards totaling 1,000 shares with a value of approximately $ 19.0 thousand were granted.

Performance based stock units ("PSUs")

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Performance based stock options ("PSOs")

In January 2022, we granted certain employees PSOs with a potential to option to purchase a maximum of 111,925 shares of our common stock.

The PSOs will vest in three equal parts, starting three years from the grant date based on continuous service, with the number of shares earned ( 0 shares to 111,925 shares) depending upon the extent to which we achieve a performance condition as determined the board of directors over the period from January 1, 2022 through December 31, 2022.

In January 2022, we granted certain employees PSOs to purchase a maximum of 111,925 shares of our common stock.

The PSOs will vest in three equal parts, starting three years from the grant date based on continuous service, with the number of shares earned ( 0 shares to 111,925 shares) depending upon the extent to which we achieve a performance condition as determined by the board of directors over the period from January 1, 2022 through December 31, 2022.

Long Term Incentive Plan shares ("LTIPs")

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common stock on the award date.

The following summarizes all unvested LTIPs activities during the six months ended June 30, 2022:

The following summarizes all unvested LTIPs activities during the nine months ended September 30, 2022:

LTIPs Weighted-Average

3 unchanged sentences

Granted 178,748 $ 19.56

RSA's unvested at June 30, 2022 172,622 3.22 $ 19.52

Forfeited or Canceled ( 5,479 ) $ 19.50

RSA's unvested at September 30, 2022 173,269 2.98 $ 19.56

Restated Plan summary

In summary, of the 16,500,000 shares of common stock reserved for issuance under the Restated Plan, at June 30, 2022, there remain 2,039,963 shares available under the Restated Plan for future issuance.

In summary, of the 16,500,000 shares of common stock reserved for issuance under the Restated Plan, at September 30, 2022, there remain 2,037,463 shares available under the Restated Plan for future issuance.

NOTE 8 – SUBSEQUENT EVENTS

Refinancing of SunTrust (Now Truist) Credit Facilities:

On October 7, 2022, our subsidiary, NJIN, entered into a Second Amended and Restated Credit and Term Loan Agreement which provides for a single term loan of $ 150.0 million and a $ 50.0 million revolving credit facility.

The proceeds of the term loan were used to partially fund the acquisition of Montclair Radiological Associates, refinance the outstanding $ 42.0 million term loan and pay fees and expenses associated with the refinancing transaction.

The key terms of the Restated Credit and Term Loan Agreement are:

• Interest Rates:

Borrowings bear interest at either the SOFR or Base Rate as defined in the agreement, plus an applicable margin.

• Maturity Dates:

The maturity date for both the term loan and revolving loans is October 7, 2027, unless accelerated in accordance with the terms of the agreement.

Beginning March 31, 2023, we will be required to make quarterly principal amortization payments on the term loan in the amount of $ 1.9 million, which will increase to $ 3.8 million, with the balance paid at maturity.

Acquisitions:

On October 1, 2022, through our NJIN subsidiary, we acquired Montclair Radiological Associates for purchase consideration of approximately $ 112.6 million.

Montclair consists of six multi modality radiology centers located in New Jersey.

On November 1, 2022, we acquired a 75 % controlling share interest in London-based Heart & Lung Imaging Limited ("HLH").

HLH was founded to improve lung cancer outcomes through early detection and accurate diagnosis.

HLH will be integrated into our AI operations.

Total combined purchase consideration, including contingencies, consists of RadNet common stock and cash up to a potential $ 27.6 million.

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

What changed 10-Q

Item 1. Financial Statements