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Item 1. Financial Statements

2024-08-09 compared with 2024-05-10 · 314 added, 221 removed, 496 unchanged (52% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

(IN THOUSANDS EXCEPT SHARE DATA)

2024 December 31,

30 unchanged sentences

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

73,901,654 and 67,956,318 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

73,968,042 and 67,956,318 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in-capital 974,355 722,750

2 unchanged sentences

Total RadNet, Inc.'s Stockholders' equity:

880,966 630,695

Noncontrolling interests 211,874 182,664

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Service fee revenue $ 422,745 $ 363,918 $ 819,934 $ 716,338

4 unchanged sentences

Depreciation and amortization 34,475 32,180 66,843 63,495

Loss (gain) on sale and disposal of equipment and other 186 579

Loss on sale and disposal of equipment and other 401 77 587 656

Severance costs 268 1,870 493 2,004

5 unchanged sentences

Non-cash change in fair value of interest rate hedge 1,890 ( 4,159 ) 674 ( 66 )

Other (income) expense ( 2,934 ) 1,432

Debt restructuring and extinguishment expenses 8,762 — 8,762 —

Other (income) expenses ( 7,900 ) 40 ( 10,834 ) 1,472

Total other expense 25,445 10,497 33,238 30,316

INCOME (LOSS) BEFORE INCOME TAXES 3,546 ( 13,148 )

Benefit from (provision for) income taxes 1,864 ( 1,135 )

NET INCOME (LOSS) 5,410 ( 14,283 )

Net income attributable to noncontrolling interests 8,189 6,722

NET LOSS ATTRIBUTABLE TO RADNET, INC.

INCOME BEFORE INCOME TAXES 9,401 13,944 12,947 796

(Provision for) benefit from for income taxes ( 2,456 ) 614 ( 592 ) ( 521 )

NET INCOME 6,945 14,558 12,355 275

Net income attributable to noncontrolling interest 9,927 6,189 18,116 12,911

NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ ( 2,982 ) $ 8,369 $ ( 5,761 ) $ ( 12,636 )

BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO RADNET, INC.

BASIC NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ ( 0.04 ) $ 0.14 $ ( 0.08 ) $ ( 0.21 )

DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ ( 0.04 ) $ 0.12 $ ( 0.08 ) $ ( 0.21 )

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic and Diluted 69,307,078 57,701,439

Basic 73,419,124 59,880,803 71,795,080 59,221,453

Diluted 73,419,124 60,916,985 71,795,080 59,221,453

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

2 unchanged sentences

(IN THOUSANDS)

Three Months Ended March 31,

NET INCOME (LOSS) $ 5,410 $ ( 14,283 )

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

2024 2023 2024 2023

NET INCOME $ 6,945 $ 14,558 $ 12,355 $ 275

Foreign currency translation adjustments ( 631 ) 873 ( 2,829 ) 3,650

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes 6,517 922 7,256 1,844

COMPREHENSIVE INCOME (LOSS) 3,951 ( 10,584 )

COMPREHENSIVE INCOME 12,831 16,353 16,782 5,769

Less comprehensive income attributable to noncontrolling interests 9,927 6,189 18,116 12,911

COMPREHENSIVE LOSS ATTRIBUTABLE TO RADNET, INC.

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ 2,904 $ 10,164 $ ( 1,334 ) $ ( 7,142 )

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 March 31, 2024 and March 31, 2023.

Common Stock Additional Paid-In

Capital Accumulated Other

Comprehensive

Loss Accumulated

Deficit Total

Radnet, Inc.'s

Equity Noncontrolling

Interests Total

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended June 30, 2024 and June 30, 2023.

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Radnet, Inc.'s Equity Noncontrolling Interests Total Equity

Shares Amount

BALANCE - DECEMBER 31, 2023 67,956,318 $ 7 $ 722,750 $ ( 12,484 ) $ ( 79,578 ) $ 630,695 $ 182,664 $ 813,359

BALANCE - MARCH 31, 2024 73,901,654 $ 7 $ 969,248 $ ( 13,943 ) $ ( 82,357 ) $ 872,955 $ 204,370 $ 1,077,325

Issuance of common stock upon exercise of options 59,306 — 359 — — 359 — 359

Shares issued under the equity compensation plan 41,120 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 4,984 — — — — — — —

Stock-based compensation expense — — 4,773 — — 4,773 — 4,773

Forfeiture of restricted stock and share cancellation ( 39,022 ) — ( 25 ) — — ( 25 ) — ( 25 )

Distributions paid to noncontrolling interests — — — — — — ( 2,423 ) ( 2,423 )

Change in cumulative foreign currency translation adjustment — — — ( 631 ) — ( 631 ) — ( 631 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 6,517 — 6,517 — 6,517

Net (loss) income — — — — ( 2,982 ) ( 2,982 ) 9,927 6,945

BALANCE - JUNE 30, 2024 73,968,042 $ 7 $ 974,355 $ ( 8,057 ) $ ( 85,339 ) $ 880,966 $ 211,874 $ 1,092,840

BALANCE - MARCH 31, 2023 58,270,290 $ 6 $ 448,522 $ ( 16,978 ) $ ( 103,628 ) $ 327,922 $ 165,179 $ 493,101

Issuance of common stock under the equity compensation plan 538,185 — — — — — — —

2 unchanged sentences

Issuance of common stock, net of issuance costs 8,711,250 1 246,201 — — 246,202 — 246,202

Issuance of common stock for sale of unregistered securities for acquisition 144,227 — 4,000 — — 4,000 — 4,000

Distributions paid to noncontrolling interests — — — — — — ( 3,523 ) ( 3,523 )

Change in cumulative foreign currency translation adjustment — — — 873 — 873 — 873

Change in fair value of cash flow hedge from prior periods reclassifed to earnings — — — 922 — 922 — 922

Other — — — — 1 1 — 1

Net income — — — — 8,369 8,369 6,189 14,558

BALANCE - JUNE 30, 2023 67,669,564 $ 7 $ 703,593 $ ( 15,183 ) $ ( 95,258 ) $ 593,159 $ 167,845 $ 761,004

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

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(IN THOUSANDS EXCEPT SHARE DATA)

The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the six months ended June 30, 2024 and June 30, 2023.

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Radnet, Inc.'s Equity Noncontrolling Interests Total Equity

Shares Amount

BALANCE - DECEMBER 31, 2023 67,956,318 $ 7 $ 722,750 $ ( 12,484 ) $ ( 79,578 ) $ 630,695 $ 182,664 $ 813,359

Issuance of common stock upon exercise of options 60,605 — 367 — — 367 — 367

Issuance of common stock under the equity compensation plan 657,887 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 9,377 — — — — — — —

Stock-based compensation expense — — 16,679 — — 16,679 — 16,679

Issuance of common stock 5,232,500 — 218,385 — — 218,385 — 218,385

Issuance of common stock in connection with acquisitions 95,019 — 4,607 — — 4,607 — 4,607

Forfeiture of restricted stock ( 4,642 ) — ( 9 ) — — ( 9 ) — ( 9 )

Forfeiture of restricted stock and share cancellation ( 43,664 ) — ( 34 ) — — ( 34 ) — ( 34 )

Distributions paid to noncontrolling interests — — — — — — ( 2,423 ) ( 2,423 )

Contributions from noncontrolling interests — — 11,601 — — 11,601 — 11,601

Sale of economic interests in majority owned subsidiary, net of taxes — — — — — — 13,517 13,517

Contribution from noncontrolling partner — — — — — — 3,927 3,927

Change in cumulative foreign currency translation adjustment — — — ( 2,829 ) — ( 2,829 ) — ( 2,829 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 739 — 739 — 739

Net income (loss) — — — — ( 2,779 ) ( 2,779 ) 8,189 5,410

BALANCE-MARCH 31, 2024 73,901,654 $ 7 $ 969,248 $ ( 13,943 ) $ ( 82,357 ) $ 872,955 $ 204,370 $ 1,077,325

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 7,256 — 7,256 — 7,256

Net (loss) income — — — — ( 5,761 ) ( 5,761 ) 18,116 12,355

BALANCE-JUNE 30, 2024 73,968,042 $ 7 $ 974,355 $ ( 8,057 ) $ ( 85,339 ) $ 880,966 $ 211,874 $ 1,092,840

BALANCE - DECEMBER 31, 2022 57,723,125 $ 6 $ 436,288 $ ( 20,677 ) $ ( 82,622 ) $ 332,995 $ 158,457 $ 491,452

3 unchanged sentences

Stock-based compensation expense — — 17,055 — — 17,055 — 17,055

Issuance of common stock 8,711,250 1 246,201 — — 246,202 — 246,202

Issuance of common stock for sale of unregistered securities 144,227 — 4,000 — — 4,000 — 4,000

Distributions paid to noncontrolling interests — — — — — — ( 3,523 ) ( 3,523 )

Change in cumulative foreign currency translation adjustment — — — 3,650 — 3,650 — 3,650

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

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 922 — 922 — 922

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 1,844 — 1,844 — 1,844

Other — — ( 2 ) — — ( 2 ) — ( 2 )

Net income (loss) — — — — ( 21,005 ) ( 21,005 ) 6,722 ( 14,283 )

BALANCE-MARCH 31, 2023 58,270,290 $ 6 $ 448,522 $ ( 16,978 ) $ ( 103,628 ) $ 327,922 $ 165,179 $ 493,101

Net (loss) income — — — — ( 12,636 ) ( 12,636 ) 12,911 275

BALANCE-JUNE 30, 2023 67,669,564 $ 7 $ 703,593 $ ( 15,183 ) $ ( 95,258 ) $ 593,159 $ 167,845 $ 761,004

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

2 unchanged sentences

(IN THOUSANDS)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) $ 5,410 $ ( 14,283 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net Income $ 12,355 $ 275

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 66,843 63,495

Amortization of operating lease right-of-use assets 14,711 15,699

Noncash operating lease expense 30,006 31,601

Equity in earnings of joint ventures, net of dividends ( 6,713 ) 6,096

Amortization of deferred financing costs and loan discount 1,541 1,494

Loss on sale and disposal of equipment and other 186 579

Loss on sale and disposal of equipment 587 656

Loss on extinguishment of debt 2,080 —

Amortization of cash flow hedge, net of taxes 7,256 1,844

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Deferred taxes 1,791 ( 2,249 )

Operating lease liability ( 12,883 ) ( 15,080 )

Operating leases ( 27,707 ) ( 28,582 )

Deferred revenue ( 185 ) 1,033

2 unchanged sentences

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of imaging centers and other acquisitions ( 3,530 ) ( 9,644 )

Purchase of property and equipment ( 57,409 ) ( 55,915 )

Purchase of imaging facilities and other acquisitions ( 32,771 ) ( 10,315 )

Purchase of property and equipment and other ( 104,095 ) ( 95,380 )

Proceeds from sale of equipment 9 73

Equity contributions in existing and purchase of interest in joint ventures ( 1,421 ) ( 288 )

Net cash used in investing activities ( 138,278 ) ( 105,910 )

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments on notes payable ( 1,102 ) ( 184 )

Principal payments on notes and leases payable ( 2,624 ) ( 1,052 )

Payments on Term Loan Debt ( 682,438 ) ( 7,376 )

Contributions from noncontrolling interests 4,169 —

Proceeds from sale of economic interest of majority owned subsidiary 8,713 —

Proceeds from issuance of common stock, net of issuance costs 218,385 —

Proceeds from debt refinancing, net of issuing costs 863,869 —

Contribution from noncontrolling partners 4,169 —

Payments on contingent consideration ( 3,614 ) —

Distributions paid to noncontrolling interests ( 2,423 ) ( 3,523 )

Proceeds from sale of economic interests in majority owned subsidiary, net of taxes 8,713 —

Proceeds from issuance of common stock 218,385 246,202

Proceeds from issuance of common stock upon exercise of options 367 51

Net cash provided by (used in) financing activities 228,298 ( 3,821 )

Net cash provided by financing activities 404,404 234,302

EFFECT OF EXCHANGE RATE CHANGES ON CASH ( 107 ) ( 266 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 184,410 ( 36,990 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 399,109 228,817

CASH AND CASH EQUIVALENTS, beginning of period 342,570 127,834

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Supplemental Schedule of Non-Cash Investing and Financing Activities

We acquired equipment and certain leasehold improvements for approximately $ 44.1 million and $ 40.8 million during the three months ended March 31, 2024 and 2023, respectively, which were not paid for as of March 31, 2024 and 2023 , respectively.

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

We acquired Grossman Imaging Center of CMH, LLC for approximately $ 10.5 million during the three months ended March 31, 2024 which was not paid for as of March 31, 2024.

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

On March 31, 2024, we issued an additional 12.5 % in noncontrolling interest in our Ventura County Imaging Group, LLC joint venture in exchange for $ 5.1 million which was not paid for as of March 31, 2024.

We acquired equipment and certain leasehold improvements for approximately $ 45.4 million and $ 61.3 million during the six months ended June 30, 2024 and 2023, respectively, which were not paid for as of June 30, 2024 and 2023 , respectively.

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

On April 1, 2024, we issued promissory notes in the amount of $ 6.3 million to acquire radiology equipment previously leased under operating leases.

On March 29, 2024, we received $ 0.6 million in fixed assets, imaging equipment, and $ 6.5 million in goodwill from our partner in Tri Valley Imaging Group, LLC.

See Note 4, Business combinations and related activity contained herein.

See Note 4, Business Combinations and Related Activity.

On March 27, 2024, we issued 95,019 shares of common stock to settle the stock contingent liabilities as part of our purchase of Heart & Lung Imaging Limited.

5 unchanged sentences

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

At March 31, 2024, we operated directly or indirectly through joint ventures with hospitals, 375 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

At June 30, 2024, we operated directly or indirectly through joint ventures with hospitals, 398 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas.

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

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In March 2024, we closed on a public offering of 5,232,500 shares of our common stock, including 682,500 shares sold pursuant to the exercise of an underwriter's overallotment option, at a price to the public of $ 44.00 per share.

The gross proceeds as a result of this public offering was $ 230.2 million before underwriting discounts, commissions, and expenses totaling $ 11.8 million.

The gross proceeds as a result of this public offering was $ 230.2 million before underwriting discounts, commissions, and costs totaling $ 11.8 million.

The consolidated financial statements include the accounts of RadNet, Inc as well as its subsidiaries in which RadNet has a controlling financial interest.

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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 $ 52.3 million and $ 48.8 million of revenue, net of management services fees to RadNet, for the three months ended March 31, 2024 and 2023, respectively and $ 52.3 million and $ 48.8 million of operating expenses for the three months ended March 31, 2024 and 2023, respectively.

RadNet recognized $ 234.8 million and $ 207.4 million of total billed net service fee revenue for the three months ended March 31, 2024, and 2023, 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.

The Group on a combined basis recognized $ 54.9 million and $ 51.4 million of revenue, net of management services fees to RadNet, for the three months ended June 30, 2024 and 2023, respectively and $ 54.9 million and $ 51.4 million of operating expenses for the three months ended June 30, 2024 and 2023, respectively.

RadNet recognized $ 231.1 million and $ 216.2 million of total billed net service fee revenue for the three months ended June 30, 2024, and 2023, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $ 107.2 million and $ 100.2 million of revenue, net of management services fees to RadNet, for the six months ended June 30, 2024 and 2023, respectively and $ 107.2 million and $ 100.2 million of operating expenses for the six months ended June 30, 2024 and 2023, respectively.

RadNet recognized $ 465.9 million and

Table of Contents six months ended June 30, 2024

$ 423.6 million of total billed net service fee revenue for the six months ended June 30, 2024, and 2023, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

In our condensed consolidated balance sheets at June 30, 2024 and December 31, 2023, we have included approximately $ 113.4 million and $ 94.1 million, respectively, of accounts receivable and approximately $ 22.5 million and $ 16.7 million of accounts payable and accrued liabilities related to the Group, respectively.The cash flows of the Group are included in the accompanying condensed consolidated statements of cash flows.

All intercompany balances and transactions have been eliminated in consolidation.

In our condensed consolidated balance sheets at March 31, 2024 and December 31, 2023, we have included approximately $ 108.9 million and $ 94.1 million, respectively, of

accounts receivable and approximately $ 16.0 million and $ 16.7 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.

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generally accepted accounting principles for complete financial statements;

however, in the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods ended March 31, 2024 and 2023 have been made.

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

1 unchanged sentence

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

During the period covered in this report, there have been no material changes to the significant accounting policies we use and have explained, in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

There have been no material changes to the significant accounting policies we use and have explained in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

The information below is intended only to supplement the disclosure in our annual report on Form 10-K for the fiscal year ended December 31, 2023.

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

Our total service revenues during the three months ended March 31, 2024 and 2023 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):

Our total service revenues during the three and six months ended June 30, 2024 and 2023 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Commercial insurance $ 256,517 $ 220,618 $ 497,145 $ 433,673

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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 agreements were $ 12.1 million and $ 14.3 million at March 31, 2024 and December 31, 2023, respectively.

Amounts remaining to be collected on these agreements were $ 4.9 million and $ 14.3 million at June 30, 2024 and December 31, 2023, respectively.

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

DEFERRED FINANCING COSTS - Costs of financing are deferred and amortized using the effective interest rate method and are related to our revolving credit facilities.

Deferred financing costs, net of accumulated amortization, were $ 1.5 million and $ 1.6 million, as of March 31, 2024 and December 31, 2023, respectively.

Deferred financing costs, net of accumulated amortization, were $ 2.5 million and $ 1.6 million, as of June 30, 2024 and December 31, 2023, respectively.

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

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While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

As a result, during the measurement period, which may be up to one year from the acquisition date, we

record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

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

GOODWILL - Goodwill at March 31, 2024 totaled $ 694.3 million.

GOODWILL - Goodwill at June 30, 2024 totaled $ 709.0 million.

Goodwill is recorded as a result of business combinations.

If 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, 2023, noting no impairment.

Activity in goodwill for the three months ended March 31, 2024 is provided below (in thousands):

We tested goodwill and indefinite lived intangibles for impairment on October 1, 2023 noting no impairment, and we have not identified any indicators of impairment through June 30, 2024.

Activity in goodwill for the six months ended June 30, 2024 is provided below (in thousands):

Imaging Center Digital Health

1 unchanged sentence

Goodwill from acquisitions 31,549 — 31,549

Valuation adjustment ( 358 ) — ( 358 )

Currency translation ( 184 ) ( 1,490 ) ( 1,674 )

Segment reorganization ( 12,300 ) 12,300 —

Balance as of March 31, 2024 $ 610,413 $ 83,879 $ 694,292

Balance as of June 30, 2024 $ 625,264 $ 83,716 $ 708,980

INTANGIBLE ASSETS - Intangible assets are primarily related to our business combinations and software development.

They include the estimated fair values of such items as service agreements, customer lists, covenants not to compete, acquired technologies, and trade names.

The components of intangible assets, both finite and indefinite, along with annual amortization expense that will be recorded over the next five years at March 31, 2024 and December 31, 2023 are as follows (in thousands):

As of March 31, 2024:

The components of intangible assets, both finite and indefinite, along with annual amortization expense that will be recorded over the next five years at June 30, 2024 and December 31, 2023 are as follows (in thousands):

As of June 30, 2024:

2024* 2025 2026 2027 2028 Thereafter Total Weighted average amortization period remaining in years

1 unchanged sentence

Covenant not to compete and other contracts 517 865 578 283 193 48 2,484 3.2

Customer Relationships 918 1,093 971 794 757 10,470 15,003 17.6

Customer lists 612 1,093 971 795 758 10,481 14,710 17.5

Patent and trademarks 150 301 301 301 301 180 1,534 5.5

Developed Technology & Software 5,651 7,534 7,494 6,960 6,960 6,551 41,150 6.4

Developed technology 3,738 7,476 7,436 6,902 6,902 6,620 39,074 6.0

Trade names amortized 39 77 77 77 63 27 360 4.8

2 unchanged sentences

Total annual amortization $ 6,200 $ 12,099 $ 11,650 $ 10,645 $ 10,504 $ 32,951 $ 84,049

*Excluding the three months ended March 31, 2024

*Excluding the six months ended June 30, 2024

As of December 31, 2023:

2 unchanged sentences

Covenant not to compete and other contracts 946 714 427 132 45 6 2,270 3.4

Customer Relationships 1,234 1,104 981 797 764 10,564 15,444 17.7

Customer lists 1,234 1,104 981 797 764 10,564 15,444 17.7

Patent and trademarks 316 316 316 315 300 164 1,727 5.8

Developed Technology & Software 7,785 7,785 7,745 7,210 7,046 6,117 43,688 5.7

Developed technology 7,785 7,785 7,745 7,210 7,046 6,117 43,688 5.7

Trade names amortized 77 77 77 77 63 27 398 5.3

2 unchanged sentences

Total annual amortization $ 12,645 $ 12,283 $ 11,833 $ 10,818 $ 10,505 $ 32,531 $ 90,615

Total intangible asset amortization expense was $ 3.2 million and $ 3.0 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

Total intangible asset amortization expense was $ 3.1 million and $ 6.2 million for the three and six months ended June 30, 2024, respectively.

Total amortization expense was $ 3.0 million and $ 6.0 million for the three and six months ended June 30, 2023, respectively.

Intangible assets are amortized using the straight-line method over their useful life determined at acquisition.

Management service agreements are amortized over 25 years using the straight line method.

Software development is capitalized and amortized over the useful life of the software when placed into service.

Management service contracts are amortized over 25 years using the straight line method.

Developed technology is capitalized and amortized over the useful life of the software when placed into service.

Trade names are reviewed annually for impairment.

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For 2024, we expect that we will meet one or more transactional safe harbor rules, and as such, we do not believe Pillar Two model will have an impact on our annual effective tax rate for the year ending December 31, 2024.

We recorded an income tax expense (benefit) of $( 1.9 ) million, or an effective tax rate of ( 52.6 )%, for the three months ended March 31, 2024 and $ 1.1 million, or an effective tax rate of ( 8.6 )% for the three months ended March 31, 2023.

The income tax rates for the three months ended March 31, 2024 diverge from the federal statutory rate due to (i) effects of state income taxes ;

We recorded an income tax expense of $ 2.5 million, or an effective tax rate of 26.1 %, for the three months ended June 30, 2024 and a benefit of $ 0.6 million, or an effective tax rate of ( 4.4 )% for the three months ended June 30, 2023.

We recorded income tax expense of $ 0.6 million, or an effective tax rate of 4.6 %, for the six months ended June 30, 2024 and $ 0.5 million, or an effective tax rate of 65.5 % for the six months ended June 30, 2023.

The income tax rates for the three and six months ended June 30, 2024 diverge from the federal statutory rate due to (i) effects of state income taxes ;

(ii) officer's compensation limitations;

2 unchanged sentences

LEASES - We determine if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long term operating lease liability in our consolidated balance sheets.

Finance leases are included in property and equipment, current finance lease liability, and long-term finance lease liability in our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long term operating lease liability in our condensed consolidated balance sheets.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

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Lease expense for lease payments is recognized on a straight-line basis over the lease term.

For a contract in which we are a lessee that contains fixed

payments for both lease and non-lease components, we have elected to account for the components as a single lease component.

For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.

For a contract in which we are a lessee that contains fixed payments for both lease and non-lease components, we have

elected to account for the components as a single lease component.

ROU assets are tested for impairment if circumstances suggest that the carrying amount may not be recoverable.

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

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of March 31, 2024.

No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of June 30, 2024.

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

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

first on April 20, 2015, second on March 9, 2017, third on April 15, 2021 and currently as of April 27, 2023 (the “Restated Plan”).

first on April 20, 2015, second on March 9, 2017, third on April 15, 2021 and fourth on April 27, 2023 (the “Restated Plan”).

The Restated Plan was approved by our stockholders at our annual stockholders meeting on June 7, 2023.

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

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

Those models require that our management make certain estimates concerning risk free interest rates and volatility in the trading price of our common stock.

We determine the compensation expense for each stock option award using the Black Scholes model.

This model requires that our management make certain estimates concerning risk free interest rates and volatility in the trading price of our common stock.

The compensation expense recognized for all equity-based awards is recognized over the awards’ service periods.

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Our foreign currency translation adjustments and the amortization of balances associated with derivatives previously classified as cash flow hedges are included in other comprehensive income (loss).

The components of other comprehensive income (loss) for the three months ended March 31, 2024 and March 31, 2023 are included in the consolidated statements of comprehensive income (loss).

The components of other comprehensive income (loss) for the three and six months ended June 30, 2024 and June 30, 2023 are included in the consolidated statements of comprehensive income (loss).

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

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The remaining gain or loss, if any, is recognized currently in earnings.

Loans (the “Barclays Term Loans”) under our Second Amended and Restated First Lien Credit and Guaranty Agreement with Barclays (the “Restated Credit Agreement”), and so we have determined that they are not currently effective as cash flow hedges.

The cash flows for both our $ 400.0 million notional interest rate swap contract locked in at 1.98 % due October 2025 and our $ 100.0 million notional interest rate swap contract locked in at 1.89 % do not match the cash flows for our Term Loans (the “Barclays Term Loans”) under our Second Amended and Restated First Lien Credit and Guaranty Agreement with Barclays (the “Barclays Credit Agreement”), and so we have determined that they are not currently effective as cash flow

Accordingly, all changes in their fair value after April 1, 2020 for the $ 400.0 million notional and after July 1, 2020 for the $ 100.0 million notional are being recognized in earnings.

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This amount was amortized to interest expense through October 2023 at approximately $ 0.4 million per month and continuing at approximately $ 0.3 million through October 2025.

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

For the three months ended March 31, 2024

Account December 31, 2023 Balance Amount of comprehensive loss recognized on derivative net of taxes Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes March 31, 2024 Balance Location

The effect for the release of the taxes from other comprehensive income is based on current tax rate.

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

For the three months ended June 30, 2024

Account March 31, 2024 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, 2024 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $( 10,886 ) $ — $ 6,517 $( 4,369 ) Equity

*Net of taxes of $ 2.2 million for the three months ended June 30, 2024.

For the six months ended June 30, 2024

Accumulated Other Comprehensive Loss, net of taxes $( 11,625 ) $ — $ 7,256 $( 4,369 ) Equity

*Net of taxes of $ 2.4 million for the six months ended June 30, 2024.

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

For the three months ended March 31, 2024

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

For the three months ended June 30, 2024

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

Interest rate contracts $ ( 1,890 ) Other income (expense) $ 6,517 Interest Expense

See Fair Value Measurements section below for the fair value of the 2019 Swaps at March 31, 2024.

For the six months ended June 30, 2024

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

Interest rate contracts $ ( 674 ) Other income (expense) $ 7,256 Interest Expense

See Fair Value Measurements section below for the fair value of the 2019 Swaps at June 30, 2024.

CONTINGENT CONSIDERATION -

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The purchase included up to $ 10.2 million in contingent milestone consideration and cash holdback of $ 0.6 million to be issued 24 months after acquisition subject to adjustment for any indemnification claims, which will be adjusted to fair value in subsequent periods.

The milestone contingency had a value of approximately $ 4.2 million as of March 31, 2024.

The holdback had a value of approximately $ 0.6 million as of June 30, 2024.

The contingent consideration is determined by the achievement of a specific number of physician reads.

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On March 27, 2024, we partially settled a milestone contingent liability by issuing 95,019 shares of our common stock at an ascribed value of $ 4.6 million.

Subsequently on April 1, 2024, we settled the remaining milestone contingent liability in cash of $ 3.6 million.

On April 1, 2024, we settled the remaining milestone contingent liability in cash of $ 3.6 million.

A tabular rollforward of contingent consideration is as follows (amounts in thousands):

For the three months ended March 31, 2024

Entity Account December 31, 2023 Balance Settlement of contingent consideration Change in valuation of Contingent Consideration Currency Translation March 31, 2024 Balance

Heart and Lung Limited Accrued Expenses 6,879 $ ( 4,607 ) $ 1,060 $ 914 $ 4,246

See Fair Value Measurements section below for the fair value of contingent consideration at March 31, 2024.

For the three months ended June 30, 2024

Entity Account March 31, 2024 Balance Settlement of contingent consideration Change in valuation of contingent consideration Currency translation June 30, 2024 Balance

Heart and Lung Accrued expenses 4,246 $ ( 3,614 ) $ — $ — $ 632

For the three months ended June 30, 2023

Entity Account March 31, 2023 Balance Settlement of contingent consideration Change in valuation of contingent consideration Currency translation June 30, 2023 Balance

Heart and Lung Accrued Expenses & Other Long Term Liabilities 13,130 $ — $ 867 $ 361 $ 14,358

For the six months ended June 30, 2024

Entity Account January 1, 2024 Balance Settlement of contingent consideration Change in valuation of contingent consideration Currency translation June 30, 2024 Balance

Heart and Lung Accrued expenses 6,879 $ ( 8,221 ) $ 1,060 $ 914 $ 632

For the six months ended June 30, 2023

Entity Account January 1, 2023 Balance Settlement of contingent consideration Change in valuation of contingent consideration Currency translation June 30, 2023 Balance

Heart and Lung Accrued Expenses & Other Long Term Liabilities 11,656 $ — $ 1,991 $ 711 $ 14,358

See Fair Value Measurements section below for the fair value of contingent consideration at June 30, 2024.

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

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

As of March 31, 2024

As of June 30, 2024

Level 1 Level 2 Level 3 Total

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Contingent Consideration:

The table below summarizes the estimated fair values of contingencies and holdback relating to our Heart and Lung Imaging Limited acquisition on November 1, 2022 that are subject to fair value measurements and the classification of these liabilities on our consolidated balance sheets, as follows (in thousands):

As of March 31, 2024

The table below summarizes the estimated fair values of holdback relating to our Heart and Lung Imaging Limited acquisition on November 1, 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, 2024

Level 1 Level 2 Level 3 Total

Accrued expenses:liabilities

Heart and Lung Imaging Limited $ — $ — $ 4,246 $ 4,246

Accrued expenses

Heart and Lung $ — $ — $ 632 $ 632

As of December 31, 2023

Level 1 Level 2 Level 3 Total

Accrued expenses

Heart & Lung Imaging Limited $ — $ — $ 6,879 $ 6,879

The estimated fair value of these liabilities was determined using Level 3 inputs.

For Heart Lung Imaging Limited the contingent consideration is determined by the achievement of a specific number of physician reads.

The fair value is measured based upon the probability adjusted amount expected to be paid.

As significant inputs for the contingent consideration of Heart Lung Imaging Limited are not observable and cannot be corroborated by observable market data they are classified as Level 3.

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

As of March 31, 2024

As of June 30, 2024

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

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

Three Months Ended March 31,

Net loss attributable to RadNet, Inc.'s common stockholders

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

2024 2023 2024 2023

BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS

NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ ( 2,982 ) $ 8,369 $ ( 5,761 ) $ ( 12,636 )

BASIC NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS

Weighted average number of common shares outstanding during the period 73,419,124 59,880,803 71,795,080 59,221,453

Basic and diluted net loss per share attributable to RadNet, Inc.'s common stockholders $ ( 0.04 ) $ 0.14 $ ( 0.08 ) $ ( 0.21 )

DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS

Weighted average number of common shares outstanding during the period 73,419,124 59,880,803 71,795,080 59,221,453

Add non-vested restricted stock subject only to service vesting — 205,413 — —

Add additional shares issuable upon exercise of stock options and contingently issuable shares — 830,769 — —

Weighted average number of common shares used in calculating diluted net income per share 73,419,124 60,916,985 71,795,080 59,221,453

Changes in FV associated with contingently issuable shares $ — $ ( 934 ) $ — $ —

Net (loss) income attributable to RadNet, Inc's common stockholders for diluted share calculation $ ( 2,982 ) $ 7,435 $ ( 5,761 ) $ — $ ( 12,636 )

Diluted net (loss) income per share attributable to RadNet, Inc.'s common stockholders $ ( 0.04 ) $ 0.12 $ ( 0.08 ) $ ( 0.21 )

Earnings per share disclosures:

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Shares issuable upon the exercise of stock options 799,502 82,775 831,647 759,313

Weighted average shares for which the exercise price exceeds average market price of common stock — 273,111

Contingently issuable shares — — — 193,207

INVESTMENTS IN EQUITY SECURITIES–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 March 31, 2024, we have four equity investments for an aggregate of $ 9.2 million.

No observable price changes or impairments in our investments were identified as of March 31, 2024.

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, 2024, we have four equity investments for an aggregate of $ 9.2 million.

No observable price changes or impairments in our investments were identified as of June 30, 2024.

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

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

No indicators of impairment existed as of March 31, 2024.

No indicators of impairment existed as of June 30, 2024.

Joint venture investment and financial information

The following table is a summary of our investment in joint ventures during the three months ended March 31, 2024 (in thousands):

The following table is a summary of our investment in joint ventures during the six months ended June 30, 2024 (in thousands):

Balance as of December 31, 2023 $ 92,710

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Distribution of earnings ( 1,000 )

Balance as of March 31, 2024 $ 97,034

We charged management service fees to the centers underlying these joint ventures of approximately $ 5.9 million and $ 4.2 million for the three months ended March 31, 2024 and 2023.

The following table is a summary of key balance sheet data for these joint ventures as of March 31, 2024 and December 31, 2023 and income statement data for the three months ended March 31, 2024 and 2023 (in thousands):

Equity contributions in existing joint ventures 1,421

Balance as of June 30, 2024 $ 100,844

We charged management service fees from the centers underlying these joint ventures of approximately $ 6.1 million and $ 4.0 million for the three months ended June 30, 2024 and 2023 and $ 12.0 million and $ 8.2 million for the six months ended June 30, 2024 and 2023, respectively.

We eliminate any unrealized portion of our management service fees with our equity in earnings of joint ventures.

As we have the ability to exercise significant influence over our joint venture entities, we consider them related parties.

Amounts transacted between ourselves and the entities in the ordinary course of business are disclosed on our balance sheet in the due from/to affiliate accounts.

The following table is a summary of key balance sheet data for these joint ventures as of June 30, 2024 and December 31, 2023 and income statement data for the six months ended June 30, 2024 and 2023 (in thousands):

Balance Sheet Data:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets $ 55,812 $ 39,819

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Total net assets $ 153,108 $ 147,334

Income statement data for the three months ended March 31,

Income statement data for the six months ended June 30,

Net revenue $ 130,546 $ 84,699

Net income $ 14,657 $ 5,827

Formation of majority owned subsidiary and sale of economic interest

On February 23, 2024, we formed Tri Valley Imaging Group, LLC ("TVIG"), a partnership with Providence Health System - Southern California ("PHS").

The operation offers multi-modality services out of seven locations in Southern California.

On March 29, 2024, we contributed the operations of four centers to the enterprise and PHS contributed a business comprising three centers included $ 0.5 million fixed assets, $ 0.1 million in equipment and $ 6.5 million in goodwill.

Simultaneously, PHS purchased from us an additional economic interest in TVIG for cash payment of $ 9.6 million.

As a result of the transaction, we recognized a gain of $ 7.6 million to additional paid in capital and retained a 52 % controlling economic interest in TVIG and PHS retains and $ 7.8 million or 48 % noncontrolling economic interest in TVIG.

Joint venture investment contribution

In determining the fair value of the imaging centers contributed to TVIG, we used an income approach which is considered a level 3 valuation technique.

See Fair Value Measurements above for further detail on the valuation hierarchy.

Key assumptions used in measuring the fair value are financial forecasts and a discount rate.

We also utilized the cash paid for an additional interest in the joint venture to substantiate the fair value of the contributed assets.

NOTE 3 – RECENT ACCOUNTING AND REPORTING STANDARDS

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Imaging Center Segment

During the three months ended March 31, 2024, we completed the acquisition of certain assets of the following entities, which either engage directly in the practice of radiology or associated businesses.

The primary reason for these acquisitions was to strengthen our presence in the California market.

During the six months ended June 30, 2024, we completed the acquisition of certain assets of the following entities, which either engage directly in the practice of radiology or associated businesses.

The primary reason for these acquisitions was to strengthen our presence in the California and Texas market.

These acquisitions are reported as part of our Imaging Center segment.

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

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

As of June 30, 2024, we made a preliminary fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands).

The valuation of assets acquired and liabilities assumed has not yet been finalized as of June 30, 2024, fair value determination is preliminary and subject to change.

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

Imaging, Inc.

6/1/2024 4,200 4,025 5,597 — 175 — ( 5,597 ) —

Houston Medical Imaging, LLC 4/1/2024 22,703 13,267 5,461 15,394 250 90 ( 5,461 ) ( 6,297 )

Grossman Imaging Center of CMH, LLC 3/31/2024 10,500 1,717 6,194 8,657 280 56 ( 6,404 ) —

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Total 48,029 22,445 21,256 31,191 755 146 ( 21,466 ) ( 6,297 )

*The valuation of assets acquired and liabilities assumed has not yet been finalized as of March 31, 2024, fair value determination is preliminary and subject to change.

Formation of majority owned subsidiary and sale of economic interest

On February 23, 2024, we formed Tri Valley Imaging Group, LLC ("TVIG"), a partnership with Providence Health System - Southern California ("PHS").

The operation offers multi-modality services out of seven locations in Southern California.

On March 29, 2024, we contributed the operations of four centers to the enterprise and PHS contributed a business comprising three centers including $ 0.6 million of fixed assets and $ 6.5 million in goodwill.

Simultaneously, PHS purchased from us an additional economic interest in TVIG for cash payment of $ 9.6 million.

In determining the fair value of the imaging centers contributed to TVIG, we used an income approach which is considered a level 3 valuation technique.

See Fair Value Measurements above for further detail on the valuation hierarchy.

Key assumptions used in measuring the fair value are financial forecasts and a discount rate.

We also utilized the cash paid for an additional interest in the joint venture to substantiate the fair value of the contributed assets.

NOTE 5 – SEGMENT REPORTING

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While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues recognized by a segment and expenses incurred by the counterparty are eliminated in consolidation and do not affect consolidated results.

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Imaging Centers Digital Health

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Total revenue $ 450,248 $ 15,828 $ ( 6,362 ) $ 459,714

Three months ended March 31, 2023

Three months ended June 30, 2023

Imaging Centers Digital Health Intersegment Elimination Consolidated Total

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Total revenue $ 398,010 398010 $ 11,603 $ ( 5,898 ) $ 403,715

Six Months Ended June 30, 2024

Imaging Centers Digital Health

Intersegment Elimination Consolidated Total

Third Party $ 873,458 $ 17,963 $ — $ 891,421

Intersegment — 12,525 ( 12,525 ) —

Total revenue $ 873,458 873458000 $ 30,488 $ ( 12,525 ) $ 891,421

Six Months Ended June 30, 2023

Imaging Centers Digital Health Intersegment Elimination Consolidated Total

Third Party $ 783,261 $ 11,018 $ — $ 794,279

Intersegment — 11,662 ( 11,662 ) —

Total revenue $ 783,261 783261 $ 22,680 $ ( 11,662 ) $ 794,279

The table below presents 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 March 31,

Three months ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Imaging Centers 443,886 392,112 $ 860,933 $ 771,599

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Total depreciation and amortization $ 34,475 $ 32,180 $ 66,843 $ 63,495

(Gain) Loss on Disposal of Equipment:

Loss (gain) on Disposal of Equipment:

Imaging Centers $ 398 $ 84 $ 586 $ 661

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NOTE 6 – CREDIT FACILITIES AND NOTES PAYABLE

As of March 31, 2024 and December 31, 2023 our term loan debt and other obligations are as follows (in thousands):

At June 30, 2024 we had two principal secured credit facilities consisting of our Barclays credit facility and our Truist credit facility.

Each facility includes a term loan component and a revolving credit facility.

At June 30, 2024, we were in compliance with all covenants under our credit facilities.

Barclays Credit Facility

On April 18, 2024, we entered into a Third Amended and Restated First Lien Credit and Guaranty Agreement (the “Barclays Credit Agreement”), with Barclays Bank Plc and the lenders and financial institutions named therein, which provides for $ 875.0 million of senior secured term loans and a $ 282.0 million senior secured revolving credit facility.

Our borrowing under the Barclays credit facility is secured by a lien on all of our assets.

The proceeds from the April 18, 2024 restatement of the Barclays Credit Agreement were used to refinance the $ 678.7 million of term loans outstanding under the prior credit facility, to pay accrued interest through the date of closing, and to pay fees and expenses associated with the refinancing transaction.

Total costs incurred in connection with the restatement amounted to approximately $ 19.9 million segregated as follows:

$ 11.1 million recognized as discount and deferred finance cost, $ 2.1 million charged to loss on early extinguishment of debt and $ 6.7 million to related expenses.

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

Barclays Term Loan:

The Barclays term loan provides for interest payments based on a base rate, plus an applicable margin.

During the periods covered by this report, the base rates, margins and effective interest rates (without giving effect to our 2019 Swaps) were as follows for the periods indicated:

Period Base Rate plus Margin Effective Rate

Through March 31, 2023 Eurodollar plus 2.50 %

Alternative Base Rate plus 2.00 %

April 1, 2023 to April 18, 2024 SOFR plus 3.00 %

Alternative Base Rate plus 2.00 %

8.33 % (credit spread adjustment of 0.11 %)

After April 18, 2024 SOFR plus 2.5 %

Prime Rate plus 1.5 %

7.83 % (credit spread adjustment of 0.26 % )

With the recent restatement, we are required to make quarterly principal payments of $ 2.2 million (up from $ 1.8 million under the prior credit agreement).

The Barclays term loan will mature on April 18, 2031 unless otherwise accelerated under the terms of the Barclays Credit Agreement.

Barclays Revolving Credit Facility:

The Barclays revolving credit facility is a $ 282.0 million senior secured revolving credit facility.

Associated with the Barclays revolving credit facility is deferred financing costs, net of accumulated amortization, of $ 2.1 million at June 30, 2024.

Amounts borrowed under the Barclays revolving credit facility bear interest at either SOFR plus 3.00 % or the Prime Rate plus 2 % (with step-downs based on attainment of certain first lien net leverage ratio benchmarks).

As of June 30, 2024, the effective interest rate payable on revolving loans under the Barclays revolving credit facility was 10.50 %.

In addition, a commitment fee of 0.50 % per annum accrues on the unused revolver commitments under the Barclays revolving credit facility.

We had no outstanding balance under our $ 282.0 million Barclays Revolving Credit Facility at June 30, 2024.

After reserves of $ 7.6 million for certain letters of credit, $ 274.4 million was available to draw upon as of June 30, 2024.

The Barclays revolving credit facility terminates on April 18, 2029, unless otherwise accelerated under the terms of the Barclays Credit Agreement.

Truist Credit Facility

On October 7, 2022 our subsidiary New Jersey Imaging Network, Inc.("NJIN") entered into Second Amended and Restated Revolving Credit and Term Loan Agreement (the “Truist Credit Agreement”), with Truist Bank and the lenders and financial institutions named therein, which provides for a $ 150.0 million term loan and a $ 50.0 million revolving credit facility.

The Truist Credit agreement is secured by the assets of NJIN.

Truist Term Loan:

The Truist Term Loan currently bears interest at a SOFR Bate or a Base Rate plus an applicable margin and fees which step down based on a leverage ratio.

At June 30, 2024 the applicable margin for the SOFR Rate was 1.5 %.

We are required to make quarterly principal payments of $ 1.9 million, which increases by $ 0.9 million at scheduled intervals, with the remaining balance to be paid at maturity.

The Truist term loan will mature on October 10, 2027 unless otherwise accelerated under the terms of the Truist Credit Agreement.

Truist Revolving Credit Facility:

The Truist revolving credit facility is a $ 50.0 million secured revolving credit facility.

Associated with the Truist revolving credit facility are deferred financing costs, net of accumulated amortization, of $ 0.4 million at June 30, 2024.

Amounts borrowed under the Truist revolving credit facility bear interest at either a SOFR Bate or a Base Rate plus an applicable margin and fees which step down based on a leverage ratio.

In addition, a commitment fee of 0.40 % per annum accrues on the unused revolver commitments under the Truist revolving credit facility.

We had no balance under our $ 50.0 million Truist revolving credit facility at June 30, 2024.

With no letters of credit reserved against the facility, the full $ 50.0 million was available to draw upon as of June 30, 2024.

The Truist revolving credit facility terminates on October 7, 2027, unless otherwise accelerated under the terms of the Truist Credit Agreement.

Notes Payable

We have issued certain notes payable in connection with the purchase of equipment previously leased under operating leases.

On April 1, 2024, January 15, 2024, and February 1, 2023 we issued promissory notes in the amount of $ 6.3 million, $ 6.9 million and $ 19.8 million, respectively, to purchase previously leased equipment.

Debt Obligations

As of June 30, 2024 and December 31, 2023 our term loan debt and other obligations are as follows (in thousands):

2024 December 31,

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Long term portion of debt obligations $ 1,002,392 $ 812,068

We had no outstanding balance under our $ 195.0 million Barclays Revolving Credit Facility at March 31, 2024 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 March 31, 2024.

We also had no balance under our $ 50.0 million Truist Revolving Credit Facility related to our consolidated subsidiary NJIN at March 31, 2024, with no letters of credit reserved against the facility, the full amount was available to draw upon.

At March 31, 2024, we were in compliance with all covenants under our credit facilities.

On January 15, 2024 and February 1, 2023, we issued promissory notes in the amount of $ 6.9 million and $ 19.8 million, respectively, to acquire radiology equipment previously leased under operating leases.

Secured Credit Facilities

Barclays Term Loans:

Through March 31, 2023, the Barclays Term Loans bore interest at either a Eurodollar Rate or an Alternate Base Rate (in each case, as defined in the Restated Credit Agreement), plus an applicable margin.

The applicable margin for Eurodollar Rate and Alternate Base Rate First Lien Term Loans under the Restated Credit Agreement was 3.00 % and 2.00 %, respectively, with an effective Eurodollar Rate and the Alternate Base Rate of 4.63 % and 8.00 %, respectively.

Effective March 31, 2023, the Barclays credit agreement was amended so that the term loan bears interest either at a SOFR or Alternative Base Rate (in each such case, as defined in the Barclays credit agreement) plus an applicable margin.The applicable margin for the SOFR and Alternate Base Rate is 3.00 % and 2.00 %, respectively.

At March 31, 2024, we have an effective SOFR of 8.33 %, with an applicable credit spread adjustment of 0.11448 %, and an Alternate Base Rate of 10.5 %, respectively.

The Barclays Restated Credit Agreement provides for quarterly payments of principal for the Barclays Term Loans in the amount of approximately $ 1.8 million.

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

The Barclays credit agreement was amended after the period covered by this report.

See Note 8, Subsequent Events, below.

Truist Term Loan:

The Truist Term Loan currently bears interest at a three month SOFR election of 5.33 % plus an applicable margin and fees based on based a leverage ratio.

At March 31, 2024 the applicable margin was 1.75 %.

The scheduled amortization of the Truist Term Loan began March 31, 2023 with quarterly payments of $ 1.9 million, representing 1.00 % of the original principal balance.

At scheduled intervals, the quarterly amortization increases by $ 0.9 million, with the remaining balance to be paid at maturity.

The Truist Term Loan will mature on October 10, 2027 unless otherwise accelerated under the terms of the Restated Credit and Term Loan Agreement.

Barclays Revolving Credit Facility

The Barclays revolving credit facility is a $ 195.0 million senior secured revolving credit facility.

At March 31, 2024, we had no borrowings under the Barclays revolving credit facility.

Associated with the Barclays revolving credit facility is deferred financing costs, net of accumulated amortization, of $ 1.0 million at March 31, 2024.

Amounts borrowed under the Barclays revolving credit facility bear interest at either a SOFR or an Alternate Base Rate (in each case, as defined in the Barclays credit agreement) plus an applicable margin which adjusts depending on our first lien net leverage ratio.

As of March 31, 2024, the effective interest rate payable on revolving loans under the Barclays revolving credit facility was 10.50 %.

For letters of credit issued under the Barclays revolving credit facility, letter of credit fees accrue at the applicable margin for SOFR 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 Barclays credit agreement.

In addition, a commitment fee of 0.50 % per annum accrues on the unused revolver commitments under the Barclays revolving credit facility.

The Barclays credit agreement was amended after the period covered by this report.

See Note 8, Subsequent Events, below.

Truist Revolving Credit Facility:

Associated with the Truist Revolving Credit Facility of $ 50.0 million are deferred financing costs, net of accumulated amortization, of $ 0.5 million at March 31, 2024.

As of March 31, 2024, NJIN had no borrowings under the Truist Revolving Credit Facility.

Amounts borrowed under the Truist revolving credit facility bear interest at either a base rate plus an applicable margin which adjusts depending on our leverage ratio.

The Truist Revolving Credit Facility bears interest with different margins based on types of borrowings and pricing level.

The Truist revolving credit facility terminates on October 7, 2027, unless otherwise accelerated under the terms of the Truist credit agreement.

NOTE 7 – STOCK-BASED COMPENSATION

1 unchanged sentence

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

Equity Incentive Plan, which we first amended and restated April 20, 2015, second on March 9, 2017, third on April 15, 2021, and currently as of April 27, 2023 (the "Restated Plan”).

Equity Incentive Plan, which we first amended and restated April 20, 2015, second on March 9, 2017, third on April 15, 2021, and fourth on April 27, 2023 (the "Restated Plan”).

The Restated Plan was most recently approved by our stockholders at our annual stockholders meeting on June 7, 2023.

3 unchanged sentences

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

The following summarizes all of our option transactions for the three months ended March 31, 2024:

The following summarizes all of our option transactions for the six months ended June 30, 2024:

Outstanding Options

4 unchanged sentences

(in years) Aggregate

(in thousands)

Balance, December 31, 2023 911,411 $ 16.60

Exercised ( 60,306 ) 6.15

Balance, March 31, 2024 910,411 16.61 5.93 $ 29,178,798

Exercisable at March 31, 2024 789,112 15.83 5.53 25,907,138

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on March 31, 2024 and the exercise price, multiplied by the number of in-the-money options as applicable) that would have been received by the holder had all holders exercised their options on March 31, 2024.

As of March 31, 2024, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 1.1 million, which is expected to be recognized over a weighted average period of approximately 0.88 years.

Balance, June 30, 2024 851,105 17.34 5.94 $ 35,390

Exercisable at June 30, 2024 729,806 16.62 5.56 30,874

Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on June 30, 2024 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, 2024.

As of June 30, 2024, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 0.8 million, which is expected to be recognized over a weighted average period of approximately 0.63 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 March 31, 2024, total unrecognized stock based compensation expense related to non-vested DeepHealth options was insignificant.

As of June 30, 2024, total unrecognized stock based compensation expense related to non-vested DeepHealth options was insignificant.

Outstanding Options

4 unchanged sentences

(in years) Aggregate

(in thousands)

Balance December 31, 2023 79,073 $ —

Exercised ( 9,377 ) —

Balance, March 31, 2024 74,680 — 5.5 $ 3,633,929

Exercisable at March 31, 2024 74,680 — 5.5 3,633,929

Balance, June 30, 2024 69,696 — 5.3 $ 4,106

Exercisable at June 30, 2024 69,696 — 5.3 4,106

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.

1 unchanged sentence

The Restated Plan permits the award of RSAs and RSUs.

The following summarizes all unvested RSA's and RSU's activities during the three months ended March 31, 2024:

The following summarizes all unvested RSA's and RSU's activities during the six months ended June 30, 2024:

RSAs and RSUs Weighted-Average

6 unchanged sentences

Forfeited or Canceled ( 11,328 ) $ 27.36

RSAs and RSUs unvested at March 31, 2024 699,721 2.09 $ 29.96

RSAs and RSUs unvested at June 30, 2024 670,486 2.0 $ 31.67

We determine the fair value of all RSAs and RSUs based on the closing price of our common stock on the award date.

Other stock bonus awards

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

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

During the six months ended June 30, 2024, 1,852 shares were issued with a value of $ 0.1 million.

Performance based stock units ("PSUs")

1 unchanged sentence

The PSUs will vest in two equal parts, starting three years from the grant date based on continuous service, with the number of shares earned ( 0 % to 200 % of the target award) depending upon the extent to which we achieve a performance condition as determined by the board of directors over the period from January 1, 2023 through December 31, 2023.

In March of 2024, based on the performance condition achieved, the board of directors issued 121,370 units with a fair value of $ 18.64 per unit.

In March of 2024, based on the performance condition being achieved, the board of directors issued 121,370 units with a fair value of $ 18.64 per unit.

Performance based stock options ("PSOs")

In January 2023, we granted certain employees PSOs with a potential to option a maximum of 235,227 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 235,227 shares) depending upon the extent to which we achieve a performance condition as determined the board of directors over the period from January 1, 2023 through December 31, 2023.

2024, based on the performance condition achieved, the board of directors issued 235,227 options with a strike price of $ 18.64 per share.

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 % to 100 % of the target award) depending upon the extent to which we achieve a performance condition as determined the board of directors over the period from January 1, 2023 through December 31, 2023.

In March 2024, based on the performance condition being achieved, the board of directors issued 235,227 options with a strike price of $ 18.64 per share.

Restated Plan summary

In summary, of the 20,100,000 shares of common stock reserved for issuance under the Restated Plan, at March 31, 2024, there remain approximately 3,323,670 shares available under the Restated Plan for future issuance.

NOTE 8 – SUBSEQUENT EVENTS

Houston Medical Imaging, LLC

On February 16, 2024, we entered into an agreement to acquire Houston Medical Imaging, LLC for a purchase consideration of approximately $ 29.0 million.

Houston Medical Imaging consists of seven multi-modality imaging centers located in Houston, Texas.

We expect to close the acquisition in the second quarter of 2024.

Imaging, Inc.

On February 26, 2024 we entered into an agreement to acquire U.S.

Imaging, Inc.

for a purchase consideration of approximately $ 4.2 million.

Imaging, Inc consists of eight multi-modality imaging centers located in Texas.

We expect to close the acquisition in the second quarter of 2024.

Refinancing of Barclays Credit Facilities:

On April 18, 2024, we entered into a Third Amended and Restated First Lien Credit and Guaranty Agreement (the “Third Restated Credit Agreement”), with Barclays Bank Plc and the lenders and financial institutions named therein, which provides for $ 875.0 million of senior secured term loans and a $ 282.0 million senior secured revolving credit facility.

The proceeds of the loans are being used to refinance the outstanding $ 678.7 million of term loans outstanding under the prior credit facility along with accrued interest through the date of closing, to pay fees and expenses associated with the refinancing transaction.

The key terms of the Third Restated Credit Agreement are:

• Interest Rates.

The interest rate on the term loan is either, at our election, (i) Term SOFR plus 2.5 % or (ii) the prime rate plus 1.5 %.

The interest rate on the revolving credit facility is either (i) Term SOFR plus 3 % or (ii) the prime rate plus 2 % (with step-downs based on attainment of certain first lien net leverage ratio benchmarks).

The maturity date for the term loan is April 18, 2031 and the maturity date is April 18, 2029 for the revolving credit facility.

Under the Restated Credit Agreement, we are required to make quarterly payments of principal on the term loan in the amount of approximately $ 2.2 million.

In summary, of the 20,100,000 shares of common stock reserved for issuance under the Restated Plan, at June 30, 2024, there remain approximately 3,292,443 shares available under the Restated Plan for future issuance.

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