What changed in this filing

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Item 1. Financial Statements

2024-11-12 compared with 2024-08-09 · 232 added, 200 removed, 610 unchanged (41% of the section changed)

3 unchanged sentences

(IN THOUSANDS EXCEPT SHARE DATA)

September 30,

2024 December 31,

30 unchanged sentences

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

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

73,976,284 and 67,956,318 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in-capital 979,279 722,750

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Depreciation and amortization 34,979 32,210 101,822 95,705

Gain on contribution of imaging centers into joint venture — ( 16,808 ) — ( 16,808 )

Loss on sale and disposal of equipment and other 148 527 735 1,183

7 unchanged sentences

Debt restructuring and extinguishment expenses 147 — 8,909 —

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

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

Other income ( 5,414 ) ( 4,081 ) ( 16,248 ) ( 2,609 )

Total other expenses 17,320 11,965 50,558 42,281

INCOME BEFORE INCOME TAXES 16,591 31,286 29,538 32,082

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

Provision for income taxes ( 4,335 ) ( 7,220 ) ( 4,927 ) ( 7,741 )

NET INCOME 12,256 24,066 24,611 24,341

Net income attributable to noncontrolling interest 9,047 6,526 27,163 19,437

NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC.

NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ 3,209 $ 17,540 $ ( 2,552 ) $ 4,904

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

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

COMMON STOCKHOLDERS $ 0.04 $ 0.26 $ ( 0.04 ) $ 0.08

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

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

COMMON STOCKHOLDERS $ 0.04 $ 0.25 $ ( 0.04 ) $ 0.08

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS)

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

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

2024 2023 2024 2023

4 unchanged sentences

Less comprehensive income attributable to noncontrolling interests 9,047 6,526 27,163 19,437

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.

COMPREHENSIVE INCOME ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ 9,423 $ 14,426 $ 8,089 $ 7,284

3 unchanged sentences

(IN THOUSANDS EXCEPT SHARE DATA)

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

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

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

Issuance of common stock under the equity compensation plan 9,075 — — — — — — —

Stock-based compensation expense — — 4,727 — — 4,727 — 4,727

Forfeiture of restricted stock and share cancellation ( 833 ) — ( 4 ) — — ( 4 ) — ( 4 )

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

Contributions from noncontrolling interests — — 201 — — 201 — 201

Sale of economic interests in majority owned subsidiary, net of taxes — — — — — — 3,400 3,400

Change in cumulative foreign currency translation adjustment — — — 5,228 — 5,228 — 5,228

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 986 — 986 — 986

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

Net income — — — — 3,209 3,209 9,047 12,256

BALANCE - SEPTEMBER 30, 2024 73,976,284 $ 7 $ 979,279 $ ( 1,843 ) $ ( 82,130 ) $ 895,313 $ 224,321 $ 1,119,634

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

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

Issuance of common stock upon exercise of options 3,424 — 21 — — 21 — 21

Issuance of common stock under the equity compensation plan 3,447 — — — — — — —

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Issuance of common stock, net of issuance costs — — ( 370 ) — — ( 370 ) — ( 370 )

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 )

Issuance of common stock in connection with acquisitions 169,903 — 5,123 — — 5,123 — 5,123

Contribution from noncontrolling partner — — — — — — 2,885 2,885

Sale of economic interests in majority owned subsidiary, net of taxes — — 2,217 — — 2,217 — 2,217

Change in cumulative foreign currency translation adjustment — — — ( 4,035 ) — ( 4,035 ) — ( 4,035 )

2 unchanged sentences

Net income — — — — 17,540 17,540 6,526 24,066

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

BALANCE - SEPTEMBER 30, 2023 67,848,209 $ 7 $ 714,910 $ ( 18,297 ) $ ( 77,719 ) $ 618,901 $ 177,257 $ 796,158

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

2 unchanged sentences

(IN THOUSANDS EXCEPT SHARE DATA)

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

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

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

12 unchanged sentences

Change in cumulative foreign currency translation adjustment — — — 2,399 — 2,399 — 2,399

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

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 8,242 — 8,242 — 8,242

Net (loss) income — — — — ( 2,552 ) ( 2,552 ) 27,163 24,611

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

BALANCE-BALANCE - SEPTEMBER 30, 2024 73,976,284 $ 7 $ 979,279 $ ( 1,843 ) $ ( 82,130 ) $ 895,313 $ 224,321 $ 1,119,634

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 — — 21,381 — — 21,381 — 21,381

Sale of economic interests in majority owned subsidiary, net of taxes — — 2,217 — — 2,217 — 2,217

Issuance of common stock 8,711,250 1 245,831 — — 245,832 — 245,832

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

Issuance of common stock in connection with acquisitions 314,130 — 9,123 — — 9,123 — 9,123

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

Contributions from noncontrolling interests — — — — — — 2,885 2,885

Change in cumulative foreign currency translation adjustment — — — ( 385 ) — ( 385 ) — ( 385 )

1 unchanged sentence

Other — — ( 2 ) — ( 1 ) ( 3 ) 1 ( 2 )

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.

Net income — — — — 4,904 4,904 19,437 24,341

BALANCE-SEPTEMBER 30, 2023 67,848,209 $ 7 $ 714,910 $ ( 18,297 ) $ ( 77,719 ) $ 618,901 $ 177,257 $ 796,158

The accompanying notes are an in

tegral part of these financial statements.

AND SUBSIDIARIES

1 unchanged sentence

(IN THOUSANDS)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

Loss on extinguishment of debt 2,080 —

Gain on contribution of imaging centers into joint venture — ( 16,808 )

Amortization of cash flow hedge, net of taxes 8,242 2,765

1 unchanged sentence

Stock-based compensation 21,368 21,380

Loss on impairment 1,200 3,949

Change in fair value of contingent consideration 1,974 ( 4,112 )

36 unchanged sentences

Supplemental Schedule of Non-Cash Investing and Financing Activities

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.

We acquired equipment and certain leasehold improvements for approximately $ 43.2 million and $ 50.2 million during the nine months ended September 30, 2024 and 2023, respectively, which were not paid for as of September 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 April 1, 2024, we issued promissory notes in the amount of $ 6.3 million to acquire radiology equipment previously leased under operating leases, related to the acquisition of Houston Medical Imaging, LLC.

On March 29, 2024, we received $ 1.4 million in fixed assets, imaging equipment, and $ 6.0 million in goodwill from our partner in Tri Valley Imaging Group, LLC.

3 unchanged sentences

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

Table of Contents nine months ended September 30, 2024

AND SUBSIDIARIES

2 unchanged sentences

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

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.

At September 30, 2024, we operated directly or indirectly through joint ventures with hospitals, 399 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.

Our services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures.

The vast majority of our centers offer multi-modality imaging services.

Our multi-modality strategy diversifies revenue streams, reduces exposure to reimbursement changes and provides patients and referring physicians one location to serve the needs of multiple procedures.

In the first quarter of 2024, we revised our reportable segments to combine our eRad business, which was included in the Imaging Center segment, with our AI segment to form a new Digital Health reportable segment.

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

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

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

These VIEs are collectively referred to as the “Consolidated Medical Group".

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

Through the management agreements we have exclusive authority over all non-medical decision making related to the ongoing business operations and we determine the annual budget.

The Group has insignificant operating assets and liabilities, and de minimis equity.

Substantially all cash flows of the Group after expenses, including professional salaries, are transferred to us.

We consolidate the revenue and expenses, assets and liabilities of the Group.

The creditors of the Group do not have recourse to our general credit and there are no other arrangements that could expose us to losses on behalf of the Group.

The Consolidated Medical Group has insignificant operating assets and liabilities, and de minimis equity.

Substantially all cash flows of the Consolidated Medical Group after expenses, including professional salaries, are transferred to us.

We consolidate the revenue and expenses, assets and liabilities of the Consolidated Medical Group.

The creditors of the Consolidated Medical Group do not have recourse to our general credit and there are no other arrangements that could expose us to losses on behalf of the Consolidated Medical Group.

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 $ 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.

The Consolidated Medical Group on a combined basis recognized $ 55.3 million and $ 51.3 million of revenue, net of management services fees to RadNet, for the three months ended September 30, 2024 and 2023, respectively and $ 55.3 million and $ 51.3 million of operating expenses for the three months ended September 30, 2024 and 2023, respectively.

RadNet recognized $ 207.4 million and $ 214.7 million of total billed net service fee revenue for the three months ended September 30, 2024, and 2023, respectively, for management services provided to the Consolidated Medical Group relating primarily to the technical portion of billed revenue.

The Consolidated Medical Group on a combined basis recognized $ 162.5 million and $ 151.5 million of revenue, net of management services fees to RadNet, for the nine months ended September 30, 2024 and 2023, respectively and $ 162.5 million

and $ 151.5 million of operating expenses for the nine months ended September 30, 2024 and 2023, respectively.

RadNet recognized $ 673.3 million and $ 638.3 million of total billed net service fee revenue for the nine months ended September 30, 2024, and 2023, respectively, for management services provided to the Consolidated Medical Group relating primarily to the technical portion of billed revenue.

In our condensed consolidated balance sheets at September 30, 2024 and December 31, 2023, we have included approximately $ 118.0 million and $ 94.1 million, respectively, of accounts receivable and approximately $ 21.7 million and $ 16.7 million of accounts payable and accrued liabilities related to the Consolidated Medical Group, respectively.

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

All intercompany balances and transactions have been eliminated in consolidation.

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.

At all of our centers not serviced by the Consolidated Medical 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.

The medical groups maintain full control over the physicians they employ.

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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 June 30, 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.

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Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

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

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

As it relates to others centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

1 unchanged sentence

Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements.

Revenues related to uninsured patients and copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts).

Revenues related to uninsured patients and copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual

We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect.

1 unchanged sentence

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 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):

Our total service revenues during the three and nine months ended September 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

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

18 unchanged sentences

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

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

Amounts remaining to be collected on these agreements were $ 5.9 million and $ 14.3 million at September 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 $ 2.5 million and $ 1.6 million, as of June 30, 2024 and December 31, 2023, respectively.

Deferred financing costs, net of accumulated amortization, were $ 2.4 million and $ 1.6 million, as of September 30, 2024 and December 31, 2023, respectively.

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

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Maintenance and repairs are charged to expense as incurred.

BUSINESS COMBINATION - When the qualifications for business combination accounting treatment are met, it requires us to recognize, separately from goodwill, the assets acquired and the liabilities assumed at their acquisition date fair values.

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed.

BUSINESS COMBINATIONS - When the qualifications for business combination accounting treatment are met, it requires us to recognize, separately from goodwill, the assets acquired and the liabilities assumed at their acquisition date fair values.

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition

date fair values of the assets acquired and the liabilities assumed.

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

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

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

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 June 30, 2024 totaled $ 709.0 million.

GOODWILL - Goodwill at September 30, 2024 totaled $ 711.8 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, 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

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 September 30, 2024.

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

Imaging Center segment Digital Health segment

Balance as of December 31, 2023 606,557 $ 72,906 $ 679,463

Goodwill from acquisitions 30,729 — 30,729

Valuation adjustment ( 358 ) — ( 358 )

Currency translation 1,223 426 1,649

Segment reorganization ( 12,300 ) 12,300 —

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

Balance as of September 30, 2024 $ 626,209 $ 85,632 $ 711,841

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 June 30, 2024 and December 31, 2023 are as follows (in thousands):

As of June 30, 2024:

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

As of September 30, 2024:

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

8 unchanged sentences

Total annual amortization $ 3,161 $ 12,364 $ 11,915 $ 10,911 $ 10,766 $ 35,324 $ 84,441

*Excluding the six months ended June 30, 2024

*Excluding the nine months ended September 30, 2024

As of December 31, 2023:

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

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.

Total intangible asset amortization expense was $ 3.1 million and $ 9.4 million for the three and nine months ended September 30, 2024, respectively.

Total amortization expense was $ 3.0 million and $ 8.9 million for the three and nine months ended September 30, 2023, respectively.

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

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

Trade names are reviewed annually for impairment.

In process research and development (" IPR&D") and Trade names are reviewed annually for impairment.

INCOME TAXES - Income tax expense is computed using an asset and liability method and using expected annual effective tax rates.

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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 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 ;

We recorded an income tax expense of $ 4.3 million, or an effective tax rate of 26.1 %, for the three months ended September 30, 2024 and $ 7.2 million, or an effective tax rate of 23.1 % for the three months ended September 30, 2023.

We recorded income tax expense of $ 4.9 million, or an effective tax rate of 16.7 %, for the nine months ended September 30, 2024 and $ 7.7 million, or an effective tax rate of 24.1 % for the nine months ended September 30, 2023.

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

(ii) officer's compensation limitations;

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

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

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

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

2 unchanged sentences

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 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.

April 20, 2015, March 9, 2017, April 15, 2021 April 27, 2023, and most recently by our stockholders at our annual stockholders meeting on June 7, 2023 (the “Restated Plan”).

We have reserved 20,100,000 shares of common stock for issuance under the Restated Plan which can be issued in the form of incentive and/or nonstatutory stock options, restricted and/or unrestricted stock, stock units, and stock appreciation rights.

Terms and conditions of awards can be direct grants or based on achieving a performance metric.

We evaluate performance-based awards to determine if it is probable that the vesting conditions will be met.

We also consider probability of achievement of performance conditions when determining expense recognition.

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

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

INTEREST INCOME - We recognized interest income of approximately $ 9.6 million and $ 3.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 22.7 million and $ 6.3 million for the nine months ended September 30, 2024 and 2023, respectively.

Interest income is recorded within Other non-operating income in our Condensed Consolidated Statements of Operations.

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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However, the outcome of these matters is inherently uncertain.

Therefore, if one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

If one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.

DERIVATIVE INSTRUMENTS - In the second quarter of 2019, we entered into four forward interest rate agreements ("2019 Swaps").

The 2019 Swaps have total notional amounts of $ 500.0 million, consisting of two agreements of $ 50.0 million each and two agreements of $ 200.0 million each.

The 2019 Swaps will secure a constant interest rate associated with portions of our variable rate bank debt and have an effective date of October 13, 2020.

The 2019 Swaps secure a constant interest rate associated with portions of our variable rate bank debt and have an effective date of October 13, 2020.

They matured in October 2023 for the smaller notional and will mature in October 2025 for the larger notional.

Under these arrangements, we arranged the 2019 Swaps with locked in 1 month Term SOFR rates at 1.89 % for the $ 100.0 million notional and at 1.98 % for the $ 400.0 million notional.

We arranged the 2019 Swaps with locked in 1 month Term SOFR rates at 1.89 % for the $ 100.0 million notional and at 1.98 % for the $ 400.0 million notional.

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

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

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

loans under our Barclays Credit Facility, so we determined that they are not effective as cash flow hedges.

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.

As of July 1, 2020, the total change in fair value relating to swaps included in other comprehensive income was approximately $ 24.4 million, net of taxes.

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.

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

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

The effect for the release of the taxes from other comprehensive income is based on the 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

For the three months ended September 30, 2024

Account June 30, 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* September 30, 2024 Balance Location

Accumulated Other Comprehensive Loss, net of taxes $( 4,369 ) $ — $ 986 $( 3,383 ) Equity

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

For the six months ended June 30, 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* June 30, 2024 Balance Location

*Net of taxes of $ 0.4 million for the three months ended September 30, 2024.

For the nine months ended September 30, 2024

Accumulated Other Comprehensive Loss, net of taxes $( 11,625 ) $ — $ 8,242 $( 3,383 ) Equity

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

*Net of taxes of $ 2.8 million for the nine months ended September 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 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)

For the three months ended September 30, 2024

Ineffective interest rate swap Amount recognized (current period ineffective portion) Location recognized in profit and loss (current period ineffective portion) Amount reclassified from accumulated OCI (prior period effective portion) Location reclassified from accumulated OCI into profit and loss (prior period effective portion)

Interest rate contracts $ 6,755 Other income (expense) $ 986 Interest Expense

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)

For the nine months ended September 30, 2024

Interest rate contracts $ 7,429 Other income (expense) $ 8,242 Interest Expense

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

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

CONTINGENT CONSIDERATION -

Heart and Lung Imaging Limited

The HLH Imaging Group Limited fka Heart and Lung Imaging Limited

On November 1, 2022, we completed our acquisition of 75 % of the equity interests of Heart and Lung Imaging Limited.

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

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

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

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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 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

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

For the three months ended September 30, 2024

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

Heart and Lung Accrued expenses 632 $ — $ — $ — $ 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

For the three months ended September 30, 2023

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

Heart and Lung Accrued Expenses & Other Long Term Liabilities 14,358 $ ( 3,402 ) $ 915 $ ( 772 ) $ 11,099

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

For the nine months ended September 30, 2024

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

For the nine months ended September 30, 2023

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

Heart and Lung Accrued Expenses & Other Long Term Liabilities 11,656 $ ( 3,402 ) $ 2,906 $ ( 61 ) $ 11,099

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

Gain or loss from change in valuation of contingent consideration are recorded within Cost of operations in our Consolidated Statements of Operations .

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

As of September 30, 2024

Level 1 Level 2 Level 3 Total

Current and long term assets

Long term assets

2019 Swaps - Interest Rate Contracts $ — $ 7,689 $ — $ 7,689

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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

As of September 30, 2024

Level 1 Level 2 Level 3 Total

Accrued expenses

Heart and Lung $ — $ — $ 632 $ 632

Heart & Lung Imaging Limited $ — $ — $ 632 $ 632

As of December 31, 2023

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Long Term Debt:

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

As of June 30, 2024

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

As of September 30, 2024

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

Barclays Term Loans and Truist Term Loan $ — $ 1,017,813 $ — $ 1,017,813 $ 1,015,625

Barclays Term Loan and Truist Term Loan $ — $ 1,010,778 $ — $ 1,010,778 $ 1,009,687

As of December 31, 2023

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

Barclays Term Loans and Truist Term Loan $ — $ 824,759 $ — $ 824,759 $ 823,063

Barclays Term Loan and Truist Term Loan $ — $ 824,759 $ — $ 824,759 $ 823,063

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

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

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

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

2024 2023 2024 2023

NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC.

NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.

COMMON STOCKHOLDERS $ 3,209 $ 17,540 $ ( 2,552 ) $ 4,904

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

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

COMMON STOCKHOLDERS

Weighted average number of common shares outstanding during the period 73,494,709 67,793,404 72,587,321 62,113,707

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

Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders

$ 0.04 $ 0.26 $ ( 0.04 ) $ 0.08

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

COMMON STOCKHOLDERS

Weighted average number of common shares outstanding during the period 73,494,709 67,793,404 72,587,321 62,113,707

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Weighted average number of common shares used in calculating diluted net income per share 75,165,435 68,809,818 72,587,321 63,221,251

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:

Fair value change for contingently issuable shares excluded from the computation of diluted per share amounts as its effect would be antidilutive $ — $ — $ — $ 1,696,000

Diluted net income (loss) income per share attributable to RadNet, Inc.'s common stockholders

$ 0.04 $ 0.25 $ ( 0.04 ) $ 0.08

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

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Shares issuable upon the exercise of stock options — 88,600 820,932 761,708

Contingently issuable shares — — — 193,207

Shares issuable subject to satisfaction of certain contingencies — — — 193,207

Weighted average shares for which the exercise price exceeds average market price of common stock — — — 94,346

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 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.

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 September 30, 2024, we have four equity investments with an aggregate carrying value of $ 8.0 million.

During the three months ended September 30, 2024, we recognized a $ 1.2 million impairment loss on our investment in Israel-based Medic Vision.

This was driven by the escalating geopolitical tensions in Israel, which adversely affected market conditions, along with a bona fide offer we received for a similar investment.

The offer, which was below the carrying value of our investment, provided a reliable indication of the current fair value of our Medic Vision investment.

As a result, we

determined that the carrying amount of the investment exceeded its fair value, and the impairment loss has been recorded within "Other income " in our Condensed Consolidated Statements of Operations.

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

INVESTMENT IN JOINT VENTURES – We have 13 unconsolidated joint ventures with ownership interests ranging from 33 % to 55 %.

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Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture.

Our investment in these joint ventures is accounted for under the equity method, since RadNet does not have a controlling financial interest in such ventures.

Our investment in these joint ventures is accounted for under the equity method, since RadNet does not have a controlling interest in such ventures.

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

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

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

Joint venture investment and financial information

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

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

Balance as of December 31, 2023 $ 92,710

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Equity contributions in existing joint ventures 1,496

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.

Balance as of September 30, 2024 $ 104,514

We charged management service fees from the centers underlying these joint ventures of approximately $ 5.9 million and $ 3.9 million for the three months ended September 30, 2024 and 2023 and $ 17.8 million and $ 12.2 million for the nine months ended September 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):

Amounts transacted between ourselves and the entities are in the ordinary course of business and 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 September 30, 2024 and December 31, 2023 and income statement data for the nine months ended September 30, 2024 and 2023 (in thousands):

Balance Sheet Data:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets $ 64,175 $ 39,819

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Total net assets $ 171,496 $ 147,334

Income statement data for the six months ended June 30,

Income statement data for the nine months ended September 30,

Net revenue $ 195,905 $ 129,020

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Recently Issued Accounting Pronouncements

We monitor new accounting pronouncements issued by the Financial Accounting Standards Board ("FASB") and do not believe any accounting pronouncements issued through the date of this report will have a material impact on our financial statements.

In November 2023, the FASB issued Accounting Standards Updates (ASUs) 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures .

The guidance requires entities to provide enhanced disclosures about significant segment expenses.

For entities that have adopted the amendments in ASU 2023-07, the updated

guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and is applicable to the Company in fiscal 2025.

Early adoption is permitted.

This ASU will likely result in us including the additional required disclosures when adopted.

We are currently evaluating the provisions of this ASU and expect to adopt them for the year ending December 31, 2024.

NOTE 4 – BUSINESS COMBINATIONS AND RELATED ACTIVITY

Imaging Center Segment

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.

During the nine months ended September 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.

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.

As of September 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 September 30, 2024;

and the fair value determination is preliminary and may be 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

Stanislaus Surgical Hospital, LLC 9/16/2024 3,000 504 1,468 2,382 100 15 ( 1,468 ) —

Global Imaging LLP 9/1/2024 $ 2,900 1,266 — 1,584 50 — — —

Imaging, Inc.

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Total 54,046 27,509 25,302 30,729 2,315 160 ( 25,672 ) ( 6,297 )

During the three months ended September 30, 2024, the Company revised the fair value of certain assets acquired and liabilities assumed of Houston Medical Imaging, LLC’s, Grossman Imaging Center of CMH, LLC, and Providence Health System - Southern California, resulting in an increase of $ 4.4 million in the net fair value of these assets and liabilities and a corresponding decrease in goodwill.

These adjustments did not have an impact on the Company’s condensed consolidated statement of operations for the nine months ended September 30, 2024.

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.

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

On March 29, 2024, we contributed the operations of four centers to the enterprise and PHS contributed a business comprising three centers including $ 1.4 million of fixed assets and $ 6.0 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.

As a result of the transaction, we recognized a gain of $ 7.9 million to additional paid in capital and retained a 52 % controlling economic interest in TVIG and PHS retains a $ 7.8 million or 48 % noncontrolling economic interest in TVIG.

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.

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Prior period amounts were adjusted retrospectively to reflect the change in reportable segment.

Our reportable segments are described below:

Imaging Center

Accordingly, our reportable segments currently include our Imaging Center segment and our Digital Health segment.

Our Imaging Center segment provides physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders.

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The vast majority of our centers offer multi-modality imaging services, a strategy that diversifies revenue streams, reduces exposure to reimbursement changes and provides patients and referring physicians one location to serve the needs of multiple procedures.

Digital Health

Our Digital Health segment develops and deploys clinical applications to enhance interpretation of medical images and improve patient outcomes with an emphasis on brain, breast, prostate, and pulmonary diagnostics.

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We do not report balance sheet information by segment since it is not reviewed by our CODM.

In the normal course of business, our reportable segments enter into transactions with each other.

In the normal course of business, our Imaging Center and Digital Health segments enter into transactions with each other.

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 June 30, 2024

Imaging Centers Digital Health

Three Months Ended September 30, 2024

Imaging Center Digital Health

Intersegment Elimination Consolidated Total

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Total revenue $ 452,368 $ 16,367 $ ( 7,593 ) $ 461,142

Three months ended June 30, 2023

Imaging Centers Digital Health Intersegment Elimination Consolidated Total

Three months ended September 30, 2023

Imaging Center Digital Health Intersegment Elimination Consolidated Total

Third Party $ 395,613 $ 6,355 $ — $ 401,968

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Total revenue $ 395,613 $ 12,185 $ ( 5,830 ) $ 401,968

Six Months Ended June 30, 2024

Imaging Centers Digital Health

Nine Months Ended September 30, 2024

Imaging Center Digital Health

Intersegment Elimination Consolidated Total

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Total revenue $ 1,325,825 1325825000 $ 46,856 $ ( 20,118 ) $ 1,352,563

Six Months Ended June 30, 2023

Imaging Centers Digital Health Intersegment Elimination Consolidated Total

Nine Months Ended September 30, 2023

Imaging Center Digital Health Intersegment Elimination Consolidated Total

Third Party $ 1,178,873 $ 17,374 $ — $ 1,196,247

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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 June 30, Six Months Ended June 30,

Three months ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

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

Imaging Center 444,775 389,783 $ 1,305,707 $ 1,161,381

Digital Health 16,367 12,185 46,856 34,866

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Cost of Operations

Imaging Centers $ 373,449 $ 334,082 $ 745,755 $ 674,233

Imaging Center $ 374,789 $ 334,580 $ 1,120,542 $ 1,008,814

Digital Health 17,011 7,055 48,571 29,833

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Depreciation and Amortization:

Imaging Centers $ 32,089 $ 30,074 $ 62,063 $ 59,522

Imaging Center $ 32,032 $ 30,221 $ 94,095 $ 89,743

Digital Health 2,947 1,989 7,727 5,962

Total depreciation and amortization $ 34,979 $ 32,210 $ 101,822 $ 95,705

Gain on contribution of imaging centers into joint venture:

Imaging Center $ — $ ( 16,808 ) $ — $ ( 16,808 )

Digital Health — — — —

Total (gain) loss on contribution of imaging centers into joint venture $ — $ ( 16,808 ) $ — $ ( 16,808 )

Loss (gain) on Disposal of Equipment:

Imaging Centers $ 398 $ 84 $ 586 $ 661

Imaging Center $ 153 $ 524 $ 739 $ 1,185

Digital Health ( 5 ) 3 ( 4 ) ( 2 )

Total loss on disposal of equipment $ 148 $ 527 $ 735 $ 1,183

Imaging Centers $ 225 $ 154 $ 450 $ 276

Imaging Center $ 271 $ 1,141 $ 720 $ 1,417

Digital Health 33 12 77 1,740

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Income (Loss) from Operations

Imaging Centers $ 37,725 $ 27,718 $ 52,079 $ 36,907

Imaging Center $ 37,530 $ 40,125 $ 89,611 $ 77,030

Digital Health ( 3,619 ) 3,126 ( 9,515 ) ( 2,667 )

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NOTE 6 – CREDIT FACILITIES AND NOTES PAYABLE

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

At September 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.

At September 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.

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 (the “Barclays Term Loan”) and a $ 282.0 million senior secured revolving credit facility (the “Barclays Revolving Credit Facility”).

Our borrowing under the Barclays Revolving 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.

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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.

Associated with the Barclays Revolving Credit Facility is deferred financing costs, net of accumulated amortization, of $ 2.0 million at September 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 %.

As of September 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.

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

After reserves of $ 8.3 million for certain letters of credit, $ 273.7 million was available to draw upon as of September 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 %.

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

At September 30, 2024 the applicable margin for SOFR 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.

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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.

Associated with the Truist Revolving Credit Facility are deferred financing costs, net of accumulated amortization, of $ 0.4 million at September 30, 2024.

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

In addition, a commitment fee of 0.30 % 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.

We had no balance under our $ 50.0 million Truist Revolving Credit Facility at September 30, 2024.

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

The Truist Revolving Credit Facility terminates on October 7, 2027, unless otherwise accelerated under the terms of the Truist Credit Agreement.

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Debt Obligations

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

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

September 30,

2024 December 31,

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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 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.

Equity Incentive Plan, which has been amended and restated on April 20, 2015, March 9, 2017, April 15, 2021, April 27, 2023, and most recently following approved by our stockholders at our annual stockholders meeting on June 7, 2023 (the “Restated Plan”).

We have reserved for issuance under the Restated Plan 20,100,000 shares of common stock.

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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 six months ended June 30, 2024:

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

Outstanding Options

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Exercised ( 60,306 ) 6.15

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.

Balance, September 30, 2024 851,105 17.34 5.69 $ 44,301

Exercisable at September 30, 2024 729,806 16.62 5.31 38,515

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

As of September 30, 2024, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 0.5 million, which is expected to be recognized over a weighted average period of approximately 0.39 years.

DeepHealth Options

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

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

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

Outstanding Options

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Exercised ( 9,377 ) —

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

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

Balance, September 30, 2024 69,696 — 5.0 $ 4,836

Exercisable at September 30, 2024 69,696 — 5.0 4,836

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

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The Restated Plan permits the award of RSAs and RSUs.

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

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

RSAs and RSUs Weighted-Average

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Forfeited or Canceled ( 13,460 ) $ 27.74

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

RSAs and RSUs unvested at September 30, 2024 670,747 1.74 $ 32.33

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")

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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 June 30, 2024, there remain approximately 3,292,443 shares available under the Restated Plan for future issuance.

Shares available

Of the 20,100,000 shares of common stock reserved for issuance under the Restated Plan, at September 30, 2024, there remain approximately 3,285,500 shares available under the Restated Plan for future issuance.

NOTE 8 – SUBSEQUENT EVENTS

Pink Perception LLC

On October 1, 2024, we entered into an agreement to acquire Pink Perception LLC for a purchase consideration of approximately $ 4.0 million.

Pink Perception LLC consists of two multi-modality imaging centers located in New York.

The acquisition closed in the fourth quarter of 2024.

Kheiron Medical Technologies Limited

On October 22, 2024, we acquired Kheiron Medical Technologies Limited for a purchase consideration of approximately $ 1.0 million.

Kheiron Medical Technologies Limited is a UK-based AI cancer diagnostic company focused on developing deep learning solutions to support radiologists improve breast cancer detection.

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