What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-02-29 compared with 2023-03-01 · 99 added, 102 removed, 248 unchanged (45% of the section changed)

3 unchanged sentences

Concerns about the systemic impact of potential long-term and wide-spread recession, inflation, energy costs, geopolitical issues, the availability and cost of credit have contributed to increased market volatility and diminished expectations for near-term growth in the United States and many global economies.

Continued turbulence in domestic and international markets and economies may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our patients.

Continued turbulence in domestic and international markets and economies may adversely affect our liquidity and financial condition.

Patients may transition work, leaving insurance programs, or defer non-emergency procedures, which could reduce overall demand for our services.

A decline in global economic conditions could also have a significant impact on the financial condition and operations of our third party payors, contracting radiology groups, equipment manufacturers and other suppliers.

A downturn in the economic environment can also lead to increased risk of collection on our accounts receivable and impairment of goodwill, possible reductions in liquidity, as well as the risk of failure of derivative counterparties and other

financial institutions.

These and other economic factors can materially adversely affect our business, results of operations, financial condition and stock price.

A downturn in the economic environment can also lead to increased risk of collection on our accounts receivable, impairment of goodwill, and increased risk of failure of financial institutions including insurance companies and derivatives counterparties.

These and other economic events could materially adversely affect our business, results of operations, financial condition and stock price.

Increasing interest rates or disruption of credit markets could adversely affect our financial condition and liquidity.

In response to recent macroeconomic concerns, the United States and other western countries have implemented monetary policies focused on suppressing inflation, including increasing interest rates.

We operate in an 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 operate in an industry that requires significant amounts of capital to fund operations, particularly in the development or acquisition of diagnostic imaging centers and the acquisition of diagnostic imaging equipment.

To meet these capital requirements, we have incurred various indebtedness including senior secured credit facilities and equipment leases.

Most of our indebtedness is borrowed under terms with variable interest rates.

We have purchased, and may in the future purchase, forward swaps or other derivative instruments designed to hedge the risk of changes in interest rates.

We have purchased, and may in the future purchase, forward swaps or other derivative instruments designed to mitigate the risk of changes in interest rates.

The use of such hedging activities may not be effective to offset any, or more than a portion, of the adverse financial effects of unfavorable movements in interest rates over the limited time the hedges are in place.

If these market conditions continue, we may experience increased expenses associated with borrowing and resulting decreases in profitability.

Moreover, continued disruption in credit markets could render it more difficult for us to timely replacing maturing liabilities or to expand credit facilities, which would adversely affect our liquidity and financial condition.

Moreover, continued disruption in credit markets could render it more difficult for us to timely replace maturing liabilities or to expand credit facilities, which would adversely affect our liquidity and financial condition.

Our labor costs have been, and we expect will continue to be, adversely affected by competition for staffing, the shortage of experienced healthcare professionals, and regulatory activity including changes in minimum wage laws.

Our operations are dependent on the availability, efforts, abilities and experience of management and medical support personnel.

We compete with other healthcare providers in recruiting and retaining qualified employees;

however, over the past several years, the healthcare industry has faced considerable workforce challenges, including shortages of skilled personnel and increased wage competition.

In some of the regions in which we operate, state or municipalities increased the applicable minimum wage, which has created more competition and, in some cases, higher labor costs.

If prevailing wages continue to be driven higher, we could suffer increased employee turnover and increased costs, adversely affecting our business.

We have a substantial number of employees who are paid on a part-time or per diem basis.

In 2023, California mandated minimum wage increases for certain industries, including ours.

As a result, we will experience increased compensation costs for certain of our employees and vendors beginning in 2024.

As minimum wage rates increase, related laws and regulations change, and/or inflationary or other pressures increase wage rates, we and our partners may need to increase not only the wage rates of minimum wage employees, but also the wages paid to other hourly or salaried employees.

If other states adopt similar minimum wage increases, the effect on our cost of operations would be compounded.

In addition, we expect that inflationary pressures will continue to impact our salaries, wages, benefits and other costs.

Because the majority of our services are performed under multi-year contracted rates with commercial insurance companies or through government programs such as Medicare and Medicaid, we may be unable to offset these increased labor costs.

Any such increase in costs, without an attendant increase in revenues or offsetting increase in operating efficiency, would reduce profitability and cash flows.

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 (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;

We face various risks related to health epidemics and other outbreaks, that have emerged and could emerge in the future, including:

• restrictions intended to slow the spread of outbreaks, including quarantines, government-mandated actions, stay-at-home orders and other restrictions, have led and may in the future lead to periods where our imaging 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;

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

• general economic downturns as a result of outbreaks 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.

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, in response to or otherwise relating to COVID-19, including the wind-down of the COVID-19 Public Health Emergency (PHE) and similar federal and state regulatory measures, 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 or similar event 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.

Business interruptions due to natural disasters or other external events beyond our control can adversely affect our business, financial condition or results of operations.

Our operations can be subject to external events beyond our control, such as the effects of earthquakes, fires, floods, severe weather, public health issues, power failures, telecommunication loss, and other natural and man-made events, some of which may be intensified by the effects of climate change and changing weather patterns.

Our operations can be impacted by external events beyond our control, such as the effects of earthquakes, fires, floods, severe weather, public health issues, power failures, telecommunication loss, and other natural and man-made events, some of which may be intensified by the effects of climate change and changing weather patterns.

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

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

These or other similar events could cause disruption or interruption to our operations and significantly impact our employees.

Any disruption to our services may result in decreases in revenues or increased operating and capital expenses.

Historically, when we have experienced a reduction in business due to inclement weather or external events for a period of

time, our operations have returned to a normalized level, but we have not experience a significant increase of procedures that would fully compensate for the revenues lost during the slower periods.

Historically, when we have experienced a reduction in business due to inclement weather or external events for a period of time, our operations have returned to a normalized level, but we have not experienced a significant increase of procedures that would fully compensate for the revenues lost during the slower periods.

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

1 unchanged sentence

From time to time those programs 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 November 22, 2022, Centers for Medicare and Medicaid Services (“CMS”) released the 2022 Medicare Physician Fee Schedule final rule, which contained significant payment reductions effective January 1, 2023 for radiology services as a result of changes to relative value units, redistributive effects of the CMS proposed clinical labor pricing update and statutorily mandated budget neutrality rules.

The Consolidated Appropriations Act of 2023, enacted on December 29, 2022, mitigated to a certain extent the reimbursement cuts, but did not completely eliminate them.

On November 16, 2023, Centers for Medicare and Medicaid Services (“CMS”) released the 2023 Medicare Physician Fee Schedule final rule, which contained significant payment reductions for radiology services, effective January 1, 2024, largely as a result of changes to relative value units, redistributive effects of the CMS proposed clinical labor pricing update and statutorily mandated budget neutrality rules.

The January 18, 2024 continuing resolution passed by Congress and signed into law by President Biden did not contain provisions to stop or mitigate these reimbursement 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 .

9 unchanged sentences

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 Akumin, Inc., which recently acquired Alliance Healthcare Services, and smaller regional operators, as well as hospitals, clinics and radiology groups that operate their own imaging equipment.

Our competitors include independent imaging operators, such as Akumin, Inc., 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.

11 unchanged sentences

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

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

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

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.

Under the terms of our management agreements, the radiology groups are required 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.

5 unchanged sentences

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.

Each of the Group and our third party contracted radiology practices has entered into agreements with its physician shareholders and full-time employed radiologists that generally prohibit those shareholders and radiologists from competing for a period of two to five years within defined geographic regions after they cease to be owners or employees, as applicable.

In certain states, like California, a covenant not to compete is enforced in limited circumstances involving the sale of a business.

In other states, a covenant not to compete will be enforced only:

• to the extent it is necessary to protect a legitimate business interest of the party seeking enforcement;

• if it does not unreasonably restrain the party against whom enforcement is sought;

• if it is not contrary to public interest.

Enforceability of a non-compete covenant is determined by a court based on all of the facts and circumstances of the specific case at the time enforcement is sought.

For this reason, it is not possible to predict whether or to what extent a court will enforce the contracted radiology practices’ covenants.

The inability of the contracted radiology practices or us to enforce a radiologist’s non-compete covenants could result in increased competition from individuals who are knowledgeable about our business strategies and operations.

We are dependent on the ability of our contracted radiology practices, including the Group, to hire and retain qualified radiologists.

7 unchanged sentences

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.

A significant portion of the services that we perform are derived from patient referrals from unaffiliated physicians and other third parties.

Those physicians and other third parties do not have any contractual obligation to refer patients to us.

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

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.

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.

5 unchanged sentences

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.

Under the terms of our management agreements with those radiology groups, we structure the relationship in a manner that we believe does not constitute our practice of medicine, 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.

We seek to mitigate 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.

successful claims against us may adversely affect our business or reputation.

In addition, successful claims against us may adversely affect our business or reputation.

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.

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.

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

10 unchanged sentences

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.

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

We rely on information technology systems to process, transmit and store electronic information.

A significant portion of the communication between personnel, customers, business partners, and suppliers depends on information technology.

Cybersecurity threats and other disruption or malfunction in our information technology systems could adversely affect our business.

We rely on information technology systems to process, transmit and store electronic information including legally-protected personal information, such as diagnostic image results and other patient health information, credit card and other financial information, insurance information, and personally identifiable information.

A significant portion of the communication between our personnel, patients, business partners, and suppliers depends on information technology.

We rely on our information systems to perform functions critical to our ability to operate, including patient scheduling, billing, collections, image storage and image transmission.

We also use information technology systems and networks in our operations and supporting departments such as marketing, accounting, finance, and human resources.

We also use information technology systems and networks in our operations and supporting departments such as research and development, marketing, accounting, finance, and human resources.

The future success and growth of our business depends on streamlined processes made available through information systems, global communications, internet activity and other network processes.

Our information technology system is vulnerable to damage or interruption from:

• earthquakes, fires, floods and other natural disasters;

• Cybersecurity attacks and breaches, ransomware and computer viruses, coordinated attacks by hackers, activist entities, organized criminal threat actors, and nation-state sponsored actors, seeking to disrupt operations or misappropriate information;

• technology service provider outages and technology supply chain cyber-security weaknesses;

• power losses, computer systems failures, internet and telecommunications or data network failures, operator negligence, improper operation by or supervision of employees, physical and electronic losses of data and similar events;

• computer viruses, security attacks and breaches, coordinated attacks by hackers or activist entities seeking to disrupt operations or misappropriate information and other breaches of security;

• earthquakes, fires, floods and other natural disasters;

• acts of vandalism or theft, misplaced or lost data, programming or human errors and similar events.

These threats are constantly changing, increasing the difficulty of successfully defending against them or implementing adequate preventive measures.

We maintain multiple layers of security measures and are continuously enhancing

our security technologies to address new threats.

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

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

Cybersecurity threats are constantly changing, increasing the difficulty of successfully defending against them or implementing adequate preventive measures.

While we maintain multiple layers of security measures and are continuously enhancing our security technologies to address new threats, emerging and advanced cybersecurity threats, including coordinated attacks, require additional layers of security which may disrupt or impact efficiency of operations.

We have in the past experienced unauthorized access to our network and could again face attempts by others to gain unauthorized access to information or to introduce malicious software to disrupt the operation of our information technology systems.

Any unauthorized access to our information technology systems could have a material adverse impact on our business or operations.

While management is not aware of a cybersecurity incident that has had a material effect on our operations, there can be no assurances that a cybersecurity incident that could have a material impact on us will not occur in the future.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.

A successful ransomware or similar attack could disrupt or limit our ability to operate and generate revenue for an extended period of time including our ability to retrieve patient records, schedule imaging procedures, store and transmit diagnostic images, bill payors or patients, provide customer assistance services, conduct research and development activities, collect, process and prepare company financial information, and manage the administrative aspects of our business, any of which could materially adversely affect our business.

Extortion payments may alleviate the negative impact of a ransomware attack, but there is the risk that the threat actor may not destroy the stolen information and we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

Any such interruption in access, improper access, disclosure, modification, or other loss of information could result in legal claims or proceedings, liability or penalties under laws and regulations that protect the privacy of personal information, such as HIPAA, European data privacy regulations, such as the General Data Protection Regulation, or GDPR, or state privacy regulations, such as the California Consumer Privacy Act.

We may be required to comply with state breach notification laws or become subject to mandatory corrective action.

Responding to such incidents could require us to incur significant costs related to rebuilding internal systems, defending against litigation, responding to regulatory inquiries or actions, paying damages, complying with consumer protection laws or taking other remedial steps with respect to third parties.

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

If our data storage system was compromised, it could also give rise to unwanted media attention, materially damage our payor and physician relationships, and harm our business reputation.

5 unchanged sentences

Hames or Stephen M.

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.

Forthuber, our Presidents and 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.

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 generally subject to a “reasonableness” standard determined by a court based on the facts and circumstances of the specific case at the time enforcement is sought.

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

As a result, many of our employees whose employment is terminated are free to compete with us, subject to prohibitions on the use of trade secret information and, depending on the terms of the employee’s employment agreement, on solicitation of existing employees and customers (if enforceable).

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

The future growth of our imaging business is partially dependent on our ability to continue to identify, complete and successfully integrate acquired businesses.

Historically, we have experienced substantial growth through acquisitions that have increased our size, scope and geographic distribution.

During the past two fiscal years, we have completed 24 acquisitions.

These acquisitions have added 35 centers to our fixed-site outpatient diagnostic imaging services.

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 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 centers, the contracted radiology practices and their associated physicians;

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

• expand our infrastructure and management;

• compete for opportunities.

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.

Competition may also make any acquisitions more

If we are unable to successfully grow our business through acquisitions it could have an adverse effect on our financial condition and results of operations.

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

The future growth of our imaging business is partially dependent on our ability to continue to successfully integrate acquired businesses.

Historically, we have experienced substantial growth through acquisitions that have increased our size, scope and geographic distribution of our imaging center business.

During the past three fiscal years, we have completed acquisitions that have added 45 centers to our fixed-site outpatient diagnostic imaging services.

We may never realize expected synergies or capitalize on expected business opportunities in connection with an acquisition.

1 unchanged sentence

Integrating operations requires significant efforts and expense on our part.

Our management may have its attention diverted while trying to integrate an acquisition.

management may have its attention diverted while trying to integrate an acquisition.

Personnel may leave or be terminated because of an acquisition.

If these factors limit our ability to integrate the operations of an acquisition successfully or on a timely basis, our expectations of future results of operations, including certain cost savings and synergies as a result of the acquisition, may not be met.

In the past we have acquired, and may again in the future acquire, companies that create a new line of business.

The process of integrating the acquired business, technology, service and research and development component into our business and operations and entry into a new line of business in which we are inexperienced may result in unforeseen operating difficulties and expenditures.

In developing a new line of business, we may invest significant time and resources that take away the attention of management that would otherwise be available for ongoing development of our business.

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 our business, financial condition, and results of operations.

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

We may not generate the expected benefits from our investment in AI technologies or other new lines of business.

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

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

As part of our growth strategy we have acquired or invested in a number of AI companies and technologies, including DeepHealth, Inc., NuLogix Health, Inc., WhiteRabbit.ai, 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:

with the expectation that these AI technologies can be developed into solutions that enhance the quality of outcomes for patients via improved diagnostic imaging, reduce operating costs, and correspondingly improve our competitive position.

However, 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;

7 unchanged sentences

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

In the future we may acquire companies that create a new line of business.

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

Healthcare and Regulatory Risks

The regulatory framework in which we operate is uncertain and evolving.

The regulatory framework in which we operate is continually evolving.

Although we believe that we are operating in compliance with applicable federal and state laws, neither our current or anticipated business operations nor the operations of our contracted radiology practices have been the subject of judicial or regulatory interpretation.

3 unchanged sentences

We cannot assure you, however, that we will be able to adapt our operations to address new regulations or that new regulations will not adversely affect our business.

Certain states have enacted statutes or adopted regulations affecting risk assumption in the healthcare industry, including statutes and regulations that subject any physician or physician network engaged in risk-based managed care

contracting to comply with applicable insurance laws.

These laws, if adopted in the states in which we operate, may require physicians and physician networks to meet minimum capital requirements and other safety and soundness requirements.

6 unchanged sentences

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 rollback of, the Patient Protection and Affordable Care Act, whether through legislation or judicial action, may also affect reimbursement and coverage in ways that are currently unpredictable.

Furthermore, additional changes to, or rollback 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.

7 unchanged sentences

• state laws that prohibit the corporate practice of medicine and prohibit similar fee-splitting arrangements;

• state laws governing the approval of healthcare transactions and complying with cost targets, including the California Health Care Quality and Affordability Act and its implementing regulations.

• federal and state laws governing the diagnostic imaging and therapeutic equipment we use in our business concerning patient safety, equipment operating specifications and radiation exposure levels;

15 unchanged sentences

Although we believe our operations do not violate the Stark Law, our activities may be challenged.

If a challenge is successful, it could have an adverse effect on our operations.

challenge is successful, it could have an adverse effect on our operations.

In addition, legislation may be enacted in the future that further addresses Medicare and Medicaid fraud and abuse or imposes additional regulatory burdens on us.

5 unchanged sentences

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).

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, the Intersocietal Accreditation Commission and the Joint Commission).

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.

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

Our payors required that the physicians providing imaging services are credentialed, before the payor will commence payment.

We have experienced a slowdown in the credentialing of our physicians over the last several years which has lengthened our billing and collection cycle, and could negatively impact our ability to collect revenue from patients covered by Medicare.

10 unchanged sentences

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 violation would subject 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.

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.

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 (collectively, “HIPAA”).

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.

10 unchanged sentences

Financial Risks

Because we have high fixed costs, lower scan volumes and revenues could adversely affect our business.

The principal components of our expenses are debt service, capital lease payments, depreciation, compensation paid to technologists, salaries, real estate lease expenses and equipment maintenance costs.

Because we have high fixed costs, lower scan volumes or other decreases revenues could adversely affect the profitability of our business.

The principal components of our expenses are debt service, depreciation, compensation paid to technologists, salaries, real estate lease expenses and equipment maintenance costs.

Because a majority of these expenses are fixed, a relatively small change in our revenue could have a disproportionate effect on our operating and financial results depending on the source of our revenue.

Thus, decreased revenue as a result of lower scan volumes per system could result in lower margins, which would materially adversely affect the profitability our business.

Thus, decreased revenue as a result of lower scan volumes, product mix, or reductions in reimbursement rates could result in lower margins, which would materially adversely affect the profitability of our business.

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

5 unchanged sentences

• require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes;

• expose us to the risk of interest rate increases on our variable rate borrowings, including borrowings under our new senior secured credit facilities;

• expose us to the risk of interest rate increases on our variable rate borrowings, including borrowings under our Barclays and Truist credit facilities;

• increase our vulnerability to adverse general economic and industry conditions;

3 unchanged sentences

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 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.

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.

1 unchanged sentence

When we acquire businesses we are generally required to allocate the purchase price to various assets including goodwill and other intangible assets.

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.

We are also required to perform an impairment test of definite lived intangible or other long-lived assets when indicators of impairment are present.

A decline in the Company's operating results, future estimated cash flows and other assumptions could impact our estimated fair values, potentially leading to a material impairment of goodwill, other intangible assets, or other long-lived assets, which could adversely affect our financial position and results of operations.

We have been required to recognize impairment charges in the past, and may again.

In September 2023, we determined that an In-process Research and Development ("IPR&D") indefinite-lived intangible asset related to Aidence Holding B.V.'s Ai Veye Lung Nodule and Veye Clinic would not receive FDA approval for sale in the US without a new submission and additional expenditures for rework in the original projected timeline.

The additional expenditures, delay and reduction of US sales affected the estimated fair value of the related IPR&D intangible asset and resulted in impairment charges of $3.9 million.

A future decline in our operating results, future estimated cash flows and other assumptions could impact our estimated fair values, potentially leading to a material impairment of goodwill, other intangible assets, or other long-lived assets, which could adversely affect our financial position and results of operations.

Our credit facilities and instruments governing our other indebtedness restrict certain operations of our business.

29 unchanged sentences

Although an unsolicited takeover could be in the best interests of our stockholders, our organizational documents and the General Corporation Law of the State of Delaware both contain provisions that will impede the removal of directors and may discourage a third-party from making a proposal to acquire us.

For example, the provisions:

For example, provisions in our organizational documents:

• permit the board of directors to increase its own size, within the maximum limitations set forth in the bylaws, and fill the resulting vacancies;

3 unchanged sentences

We are subject to Section 203 of the Delaware General Corporation Law, which could have the effect of delaying or preventing a change in control.

Unresolved Staff Comments

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