What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-03 compared with 2024-02-29 · 455 added, 509 removed, 770 unchanged (56% of the section changed)

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generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 3, 2025 expressed an unqualified opinion thereon.

Basis for Opinion

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The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for Revenue Recognition

Valuation of Accounts Receivable

Description of

For the year ended December 31, 2023, the Company’s service fee revenue was $1,463 million.

As discussed in Note 2 to the consolidated financial statements, service fee revenue is based upon the estimated amounts the Company expects to be entitled to receive from patients and third-party payors (Medicare, Medicaid, managed care health plans and commercial insurance companies).

For the year ended December 31, 2024, the Company’s accounts receivable was $185.8 million.

As discussed in Note 2 to the consolidated financial statements, substantially all of accounts receivable is due under fee-for-service contracts from third-party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients.

The valuation of accounts receivable is determined based upon the estimated amounts the Company expects to be entitled to receive from patients and third-party payors.

Estimates of contractual allowances and implicit price concessions associated with third-party payors and any amounts due directly from patients are based upon historical collection experience from such payors.

The contractual allowance estimation process is periodically reviewed to consider and incorporate updates to the laws and regulations, changes in business and economic conditions and contractual terms resulting from contract negotiations and renewals.

The Company also records estimated implicit price concessions (based primarily on historical collection experience) related to amounts due directly from patients to record these revenues and accounts receivable at the estimated amounts the Company expects to collect.

The contractual allowance estimation process is periodically reviewed to consider and incorporate updates to the laws and regulations, and contractual terms resulting from contract negotiations and renewals.

The estimated implicit price concessions (based primarily on historical collection experience) are related to amounts due directly from patients to record accounts receivable at the estimated amounts the Company expects to collect.

Auditing management’s estimates of contractual allowances and implicit price concessions was complex and judgmental due to the significant data inputs and subjective assumptions utilized in determining related amounts.

Addressed the

Matter in Our

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the measurement of service fee revenue.

Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls that address the risks of material misstatement relating to the valuation of accounts receivable.

This included testing controls related to management’s review of the significant assumptions and inputs used in the determination of the estimated amount that would be collected for services rendered during the period.

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Los Angeles, California

February 29, 2024

March 3, 2025

AND SUBSIDIARIES

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Cash and cash equivalents $ 740,020 $ 342,570

Accounts receivable 163,707 166,357

Accounts receivable, net 185,821 163,707

Due from affiliates 41,869 25,342

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Revenue under capitation arrangements 136,575 153,433 152,045

Total revenue 1,616,630 1,430,061 1,315,077

Provider relief funding — — 9,110

Total service revenue 1,829,664 1,616,630 1,430,061

OPERATING EXPENSES

Cost of operations, excluding depreciation and amortization 1,580,549 1,395,239 1,264,346

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

Lease abandonment charges 2,478 5,146 —

Depreciation and amortization 137,838 128,391 115,877

Loss on sale and disposal of equipment and other 2,187 2,529 1,246

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

Loss on sale and disposal of equipment 2,276 2,187 2,529

Severance costs 1,902 3,778 946

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Non-cash change in fair value of interest rate swaps 8,006 8,185 ( 39,621 )

Loss on extinguishment of debt and related expenses — 731 6,044

Other (income) expenses ( 6,354 ) 1,833 1,438

Total other expenses 59,887 3,394 23,675

Debt restructuring and extinguishment expenses 11,292 — 731

Other income ( 24,916 ) ( 6,354 ) 1,833

Total other expenses, net 59,759 59,887 3,394

INCOME BEFORE INCOME TAXES 44,862 38,810 42,969

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NET INCOME 38,836 30,337 33,608

Net income attributable to noncontrolling interests 27,293 22,958 19,592

Net income attributable to noncontrolling interest 36,043 27,293 22,958

NET INCOME ATTRIBUTABLE TO RADNET, INC.

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(IN THOUSANDS EXCEPT SHARE DATA)

Additional Accumulated Other Radnet, Inc.

Common Stock Paid-in Comprehensive Accumulated Stockholders' Noncontrolling Total

Shares Amount Capital (Loss) Income Deficit Equity Interests Equity

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

BALANCE - December 31, 2021 53,548,227 $ 5 $ 342,592 $ ( 20,421 ) $ ( 93,272 ) $ 228,904 $ 117,253 $ 346,157

Issuance of stock upon exercise of options 53,960 — 488 — — 488 — 488

Shares issued under the equity compensation plan 1,212,758 — — — — — — —

Issuance of common stock upon exercise of options 25,000 1 294 — — 295 — 295

Issuance of common stock under the equity compensation plan 725,577 — — — — — — —

Issuance of common stock to settle DeepHealth contingent consideration 781,577 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 204,160 — — — — — — —

Stock-based compensation expense — — 23,543 — — 23,543 — 23,543

Issuance of common stock for acquisitions and asset purchases 82,658 — 2,498 — — 2,498 — 2,498

Release of holdback shares from the purchase of DeepHealth 91,517 — 2,413 — — 2,413 — 2,413

Forfeiture of restricted stock ( 26,710 ) — ( 75 ) — — ( 75 ) — ( 75 )

Gain on contribution of assets to majority owned subsidiary — — ( 4 ) — — ( 4 ) — ( 4 )

Contribution from noncontrolling partner — — — — — — 123 123

Sale of economic interests in majority owned subsidiary, net of taxes — — 4,206 — — 4,206 7,404 11,610

Distributions paid to noncontrolling interests — — — — — — ( 893 ) ( 893 )

Change in cumulative foreign currency translation adjustment — — — ( 65 ) — ( 65 ) — ( 65 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 3,695 — 3,695 — 3,695

Net income (loss) — — — — 24,727 24,727 19,592 44,319

Contributions from noncontrolling interests — — — — — — 19,139 19,139

Sale of economic interests in controlled subsidiary, net of taxes — — 6,623 — — 6,623 — 6,623

Issuance of common stock in connection with acquisitions 2,465,294 — 63,311 — — 63,311 — 63,311

Change in cumulative currency translation adjustment — — — ( 3,943 ) — ( 3,943 ) — ( 3,943 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 3,687 — 3,687 — 3,687

Net income — — — — 10,650 10,650 22,958 33,608

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

Issuance of stock upon exercise of options 25,000 1 294 — — 295 — 295

Shares issued under the equity compensation plan 725,577 — — — — — — —

Issuance of common stock to settle DeepHealth contingent consideration 781,577 — — — — — — —

Issuance of common stock upon exercise of options 12,424 — 142 — — 142 — 142

Issuance of common stock under the equity compensation plan 1,128,453 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 37,909 — — — — — — —

Stock-based compensation expense — — 26,785 — — 26,785 — 26,785

Issuance of common stock for acquisitions 2,465,294 — 63,311 — — 63,311 — 63,311

Forfeiture of restricted stock and share cancellation ( 26,710 ) — ( 75 ) — — ( 75 ) — ( 75 )

Contribution from noncontrolling partner — — — — — — 19,139 19,139

Sale of economic interests in majority owned subsidiary, net of taxes — — 6,623 — — 6,623 — 6,623

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

Forfeiture of restricted stock ( 35,542 ) — — — — — — —

Distributions paid to noncontrolling interests — — — — — — ( 5,972 ) ( 5,972 )

Change in cumulative foreign currency translation adjustment — — — ( 3,943 ) — ( 3,943 ) — ( 3,943 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 3,687 — 3,687 — 3,687

Net income (loss) — — — — 10,650 10,650 22,958 33,608

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

Sale of economic interests in controlled subsidiary, net of taxes — — 2,236 — — 2,236 — 2,236

Issuance of common stock in connection with acquisitions 378,699 — 11,470 — — 11,470 — 11,470

Change in cumulative currency translation adjustment — — — 4,617 — 4,617 — 4,617

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 3,576 — 3,576 — 3,576

Other — — ( 2 ) — — ( 2 ) 1 ( 1 )

Net income — — — — 3,044 3,044 27,293 30,337

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

Issuance of stock upon exercise of options 12,424 — 142 — — 142 — 142

Shares issued under the equity compensation plan 1,128,453 — — — — — — —

Issuance of common stock upon exercise of options 70,793 — 667 — — 667 — 667

Issuance of common stock under the equity compensation plan 719,762 — — — — — — —

Issuance of common stock under the DeepHealth equity compensation plan 10,427 — — — — — — —

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Issuance of common stock, net of issuance costs 5,232,500 — 218,385 — — 218,385 — 218,385

Issuance of common stock in connection with acquisitions 378,699 — 11,470 — — 11,470 — 11,470

Forfeiture of restricted stock ( 47,826 ) — ( 153 ) — — ( 153 ) — ( 153 )

Sale of economic interests in majority owned subsidiary, net of taxes — — 2,236 — — 2,236 — 2,236

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

Distributions paid to noncontrolling interests — — — — — — ( 4,522 ) ( 4,522 )

Change in cumulative foreign currency translation adjustment — — — 4,617 — 4,617 — 4,617

Change in fair value of cash flow hedge from prior periods reclassified to earnings — — — 3,576 — 3,576 — 3,576

Other — — ( 2 ) — — ( 2 ) 1 ( 1 )

Net income (loss) — — — — 3,044 3,044 27,293 30,337

Sale of economic interests in controlled subsidiary, net of taxes — — 11,905 — — 11,905 16,917 28,822

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

Change in cumulative currency translation adjustment — — — ( 5,929 ) — ( 5,929 ) — ( 5,929 )

Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 9,352 — 9,352 — 9,352

Net income — — — — 2,793 2,793 36,043 38,836

BALANCE - December 31, 2024 74,036,993 $ 7 $ 988,147 $ ( 9,061 ) $ ( 76,785 ) $ 902,308 $ 231,102 $ 1,133,410

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Depreciation and amortization 137,838 128,391 115,877

Amortization of operating lease right-of-use assets 61,102 68,847 73,967

Lease abandonment charges 5,146 — 19,675

Equity in earnings of joint ventures, net of dividends 9,176 ( 5,952 ) ( 6,260 )

Amortization and write off of deferred financing costs and loan discount 2,987 2,693 3,254

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

Loss on sale and disposal of equipment and other 2,187 2,529 1,246

Non-cash lease expense 60,552 61,102 68,847

Equity in earnings of joint ventures, net of dividend ( 9,926 ) 9,176 ( 5,952 )

Amortization of deferred financing costs and loan discount 3,093 2,987 2,693

Loss on sale and disposal of equipment 2,276 2,187 2,529

Loss on extinguishment of debt 3,903 — —

Loss on impairment 3,949 — —

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

Lease abandonment charges 2,478 5,146 —

Amortization of cash flow hedge 9,352 3,576 3,687

Non-cash change in fair value of interest rate swap 8,185 ( 39,621 ) ( 21,670 )

Non-cash change in fair value of interest rate swaps 8,006 8,185 ( 39,621 )

Stock-based compensation 29,833 26,785 23,770

Change in value of contingent consideration ( 3,880 ) ( 325 ) —

Loss on impairment 1,275 3,949 —

Change in fair value of contingent consideration 1,995 ( 3,880 ) ( 325 )

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

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Deferred revenue ( 1,359 ) 626 ( 7,316 )

Accounts payable, accrued expenses and other liabilities 15,086 49,778 9,915

Accounts payable, accrued expenses and other 37,117 15,086 49,778

Net cash provided by operating activities 233,023 220,863 146,417

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of imaging centers and other operations ( 10,918 ) ( 129,961 ) ( 77,691 )

Purchase of imaging facilities and other acquisitions ( 43,661 ) ( 10,918 ) ( 129,961 )

Purchase of property and equipment ( 188,070 ) ( 176,600 ) ( 119,451 )

Purchase of intangible assets — — ( 5,130 )

Proceeds from sale of equipment 157 83 3,904

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CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments on notes and leases payable ( 5,989 ) ( 2,930 ) —

Payments on term loan debt ( 692,437 ) ( 41,063 ) ( 53,750 )

Principal payments on notes and leases payable other than term loan debt ( 2,930 ) — ( 3,302 )

Additional deferred finance costs on revolving loan amendment — — ( 938 )

Proceeds from debt issuance, net of issuance costs — 147,996 717,307

Distributions paid to noncontrolling interests ( 5,972 ) ( 893 ) ( 2,426 )

Proceeds from sale of economic interest in majority owned subsidiary — — 13,073

Proceeds from revolving credit facility — — 128,300

Payments on revolving credit facility — — ( 128,300 )

Proceeds from issuance of debt, net of issuance costs 863,757 — 147,996

Sale of noncontrolling interests 22,357 5,121 —

Payments on contingent consideration ( 5,495 ) — —

Proceeds from issuance of common stock, net of issuance costs 245,832 — —

Payments of contingent consideration and holdbacks ( 4,268 ) ( 5,495 ) —

Distributions paid to noncontrolling interests ( 4,522 ) ( 5,972 ) ( 893 )

Proceeds from issuance of common stock 218,385 245,832 —

Proceeds from issuance of common stock upon exercise of options 667 142 294

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We acquired equipment and certain leasehold improvements for approximately $ 65.6 million, $ 67.7 million, and $ 111.8 million during the years ended December 31, 2024, 2023 and 2022, respectively, that we had not paid for as of December 31, 2024, 2023 and 2022, respectively.

The offsetting amount due was recorded in our consolidated balance sheets under accounts payable, accrued expenses and other.

The accrual for such amounts is included in our consolidated balance sheets under accounts payable, accrued expenses and other.

During the year ended 2024, we acquired certain assets from entities engaged in the practice of radiology or related businesses.

These acquisitions included holdbacks and other liabilities totaling $ 10.4 million that we had not paid for as of December 31, 2024.

The accrued amounts are reflected in our consolidated balance sheets under accrued expenses and other non-current liabilities.

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.

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.

The shares were ascribed a value of $ 4.6 million.

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

On December 12, 2023, we issued 64,569 shares of common stock to settle the stock contingent liabilities as part of our purchase of Heart & Lung Imaging Limited.

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The shares were ascribed a value of $ 25.9 million.

On October 22, 2021 we completed our purchase of specific technology assets of DRT LLC in part by issuing 15,000 shares of our common stock to complete the transaction.

The shares were ascribed a value of $ 0.4 million.

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

The shares were ascribed a value of $ 2.0 million.

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

Of the total combined assets of $ 0.4 million, we transferred $ 0.3 million and Simi Valley Hospital and Health Services contributed the remaining $ 0.1 million.

AND SUBSIDIARIES

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

At December 31, 2023, we operated directly or indirectly through joint ventures with hospitals, 366 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

At December 31, 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 addition to our center operations, we have certain other subsidiaries that develop Artificial Intelligence ("AI") products and solutions that are designed to enhance interpretation of radiographic images.

Our operations comprise two segments for financial reporting purposes for this reporting period, Imaging Centers and Artificial Intelligence.

Our operations comprise two segments for financial reporting purposes for this reporting period, Imaging Centers and Digital Health.

For further financial information about these segments, see Note 5, Segment Reporting.

In June 2023, we completed a public offering of 8,711,250 shares of our common stock at a price to the public of $ 29.75 per share.

The gross proceeds as a result of this public offering was $ 259.2 million before underwriting discounts, commissions, and expenses totaling $ 13.4 million.

In the first quarter of 2024, we revised our reportable segments to combine our eRad, Inc.

("eRad") business, which was previously included in the Imaging Center segment, with our former AI segment to form a new Digital Health reportable segment.

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

For further financial information about these segments, see Note 5, Segment Reporting.

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 were $ 230.2 million before underwriting discounts, commissions, and costs totaling $ 11.8 million.

The consolidated financial statements include the accounts of RadNet, Inc.

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Accounting regulations stipulate that generally any entity with a) insufficient equity to finance its activities without additional subordinated financial support provided by any parties, or b) equity holders that, as a group, lack the characteristics which evidence a controlling financial interest, is considered a Variable Interest Entity (“VIE”).

We consolidate all VIEs in which we are the primary beneficiary.

We consolidate all VIEs in which we are the primary beneficiary and in which we have a variable interest.

We determine whether we are the primary beneficiary of a VIE through a qualitative analysis that identifies which variable interest holder has the controlling financial interest in the VIE.

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the design and activities of the VIE, the terms of the contracts the VIE has entered into, the nature of the VIE’s variable interests issued and how they were negotiated with or marketed to potential investors, and which parties participated significantly in the design or redesign of the entity.

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

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

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

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

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 $ 205.6 million, $ 189.1 million, and $ 179.6 million of revenue, net of management services fees to RadNet, for the years ended December 31, 2023, 2022, and 2021, respectively and $ 205.6 million, $ 189.1 million, and $ 179.6 million of operating expenses for the years ended December 31, 2023, 2022, and 2021, respectively.

recognized $ 849.4 million, $ 786.5 million, and $ 749.2 million of total billed net service fee revenue for the years ended December 31, 2023, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

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

The Consolidated Medical Group on a combined basis recognized $ 221.1 million, $ 205.6 million, and $ 189.1 million of revenue, net of management services fees to RadNet, for the years ended December 31, 2024, 2023, and 2022, respectively and $ 221.1 million, $ 205.6 million, and $ 189.1 million of operating expenses for the years ended December 31, 2024, 2023, and 2022, respectively.

recognized $ 928.1 million, $ 849.4 million, and $ 786.5 million of total billed net service fee revenue for the years ended December 31, 2024, 2023, and 2022, respectively, for management services provided to the Consolidated Medical Group relating primarily to the technical portion of billed revenue.

In our consolidated balance sheets at December 31, 2024 and December 31, 2023, we have included approximately $ 103.0 million and $ 94.1 million, respectively, of accounts receivable and approximately $ 22.7 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 consolidated statements of cash flows.

All intercompany balances and transactions have been eliminated in consolidation.

In our consolidated balance sheets at December

31, 2023 and December 31, 2022, we have included approximately $ 94.1 million and $ 110.3 million, respectively, of accounts receivable and approximately $ 16.7 million and $ 16.2 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.

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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All intercompany transactions and balances, with our consolidated entities and the unsettled amount of intercompany transactions with our equity method investees, have been eliminated in consolidation.

As stated in Note 1 above, the Group consists of VIEs and we consolidate the operating activities and balance sheets of each.

As stated in Note 1 above, the Consolidated Medical Group consists of VIEs and we consolidate the operating activities and balance sheets of each.

USE OF ESTIMATES - The financial statements have been prepared in accordance with U.S.

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Our performance obligations for diagnostic services are generally satisfied over a period of less than one day.

The contractual relationships with patients, in most cases, also involve a third-party payor (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the fees for the services provided are dependent upon the terms provided by Medicare and Medicaid, or negotiated with managed care health plans and commercial insurance companies.

The contractual relationships with patients, in most cases, also involve a third-party payor ( e.g., Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the fees for the services provided are dependent upon the terms provided by Medicare and Medicaid, or negotiated with managed care health plans and commercial insurance companies.

The payment arrangements with third-party payors for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates.

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

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

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.

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

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

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

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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 fee revenues for the years ended December 31, 2023, 2022, and 2021 are presented in the table below.

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

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

Our total revenues for the years ended December 31, 2024, 2023, and 2022 are presented in the table below.

Our patient service revenue is displayed as the estimated service fee, broken down by classification of insurance coverage type, along with revenue generated from our management services and other sources such as software and AI..

In Thousands 2024 2023 2022

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Workers' compensation/personal injury 43,666 46,406 50,333

Other patient revenue 42,249 31,849 19,398

Other payors 104,888 87,675 65,911

Management fee revenue 24,676 17,936 22,235

Software and teleradiology 18,082 14,238 10,525

Other 20,111 19,428 12,436

Other revenue 46,724 32,580 27,223

Revenue under capitation arrangements 136,575 153,433 152,045

Imaging center segment revenue 1,604,161 1,425,665 1,313,662

AI segment revenue 12,469 4,396 1,415

Total revenue $ 1,829,664 $ 1,616,630 $ 1,430,061

GOVERNMENT ASSISTANCE:

COVID-19 PANDEMIC AND CARES ACT FUNDING - On March 11, 2020 the World Health Organization (WHO) designated COVID-19 as a global pandemic.

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

As part of the CARES act, we received $ 39.6 million total of accelerated Medicare payments which were recorded to deferred revenue in our consolidated balance sheet and are being applied to revenue as services are performed.

Through December 31, 2023, all of the accelerated Medicare payments have been applied to revenue.

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

Services are generally provided pursuant to one-year contracts with healthcare providers.

We continuously monitor collections from our payors and maintain an allowance for bad debts based upon specific payor collection issues that we have identified and our historical experience.

We continuously monitor collections from our payors and maintain an allowance for credit losses based upon specific payor collection issues that we have identified and our historical experience.

We have entered into factoring agreements with various institutions and sold certain accounts receivable under non-recourse agreements in exchange for notes receivables from the buyers.

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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 $ 14.3 million and $ 15.4 million at December 31, 2023 and December 31, 2022, respectively.

Amounts remaining to be collected on these agreements were $ 4.2 million and $ 14.3 million at December 31, 2024 and 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.

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Revenue is recognized when a performance obligation is satisfied by transferring a promised good or service to a customer.

For the years ended December 31, 2023, 2022 and 2021, we recorded approximately $ 20.2 million, $ 13.2 million, and $ 10.5 million, respectively, in revenue related to our software business which is included in net service fee revenue in our consolidated statements of operations.

For the years ended December 31, 2024, 2023, and 2022, we recorded approximately $ 27.8 million, $ 20.2 million, and $ 13.2 million, respectively, in revenue related to our software business which is included in service fee revenue in our consolidated statements of operations.

At December 31, 2024 we had deferred revenue of approximately $ 1.2 million associated with these sales which we expect to recognize into revenue over the next 12 months.

SOFTWARE DEVELOPMENT COSTS – When we develop our own software and artificial intelligence solutions we capitalize and amortize those costs over their useful life.

SOFTWARE DEVELOPMENT COSTS – When we develop our own software and artificial intelligence solutions we capitalize and amortize those costs over their useful life of 1 to 12 years.

Costs related to the research and development of new software products and enhancements to existing software intended for resale to our customers are expensed as incurred.

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

We continuously monitor collections and maintain an allowance for bad debts based upon our historical collection experience.

We continuously monitor collections and maintain an allowance for credit losses based upon our historical collection experience.

In addition, we have notes receivable stemming from our factoring of accounts receivable as stated above.

Companies with which we factor our receivables are well known established buyers of such instruments, have agreed to assume the full risk of their collection.

CASH AND CASH EQUIVALENTS – We consider all highly liquid investments that mature in three months or less when purchased to be cash equivalents.

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Deferred financing costs are related to our revolving credit facilities.

Deferred financing costs, net of accumulated amortization, were $ 1.6 million and $ 2.3 million for the twelve months ended at December 31, 2023 and 2022, respectively.

Deferred financing costs, net of accumulated amortization, were $ 2.3 million and $ 1.6 million as of December 31, 2024 and 2023, respectively.

See Note 8, Credit Facilities and Notes Payable for more information on our revolving lines of credit.

PROPERTY AND EQUIPMENT – Property and equipment are stated at cost, less accumulated depreciation and amortization.

Depreciation and amortization of property and equipment are provided using the straight-line method over the estimated useful lives, which range from 3 to 15 years.

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

Depreciation and amortization of property and equipment are provided using the straight-line method over their estimated useful lives, which range from 3 to 15 years.

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

Maintenance and repairs are charged to expense as incurred.

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

GOODWILL AND INDEFINITE LIVED INTANGIBLES – Goodwill totaled $ 679.5 million and $ 677.7 million at December 31, 2023 and December 31, 2022, respectively.

Indefinite lived intangible assets were $ 9.0 million at December 31, 2023 and $ 24.1 million at December 31, 2022 and are associated with the value of certain trade name intangibles and in process research and development ("IPR&D").

GOODWILL AND INDEFINITE LIVED INTANGIBLES – Goodwill totaled $ 710.7 million and $ 679.5 million at December 31, 2024 and 2023, respectively.

Indefinite lived intangible assets were $ 13.0 million at December 31, 2024 and $ 9.0 million at 2023 and are associated with the value of certain trade name intangibles and in process research and development ("IPR&D").

Goodwill, trade name intangibles and IPR&D are recorded as a result of business combinations.

When we determine the carrying value of goodwill exceeds its fair value, an impairment charge would be recognized which should not exceed the total amount of goodwill allocated to that reporting unit.

We determined fair values for each of the reporting units using the market approach, when available and appropriate, or the income approach, or a combination of both.

If we determine that the carrying value of a reporting unit exceeds its fair value, an impairment charge equal to such excess, not to exceed the total amount of goodwill allocated to that reporting unit, is recognized.

We determine fair values for each of the reporting units using the market approach, when available and appropriate, or the income approach, or a combination of both.

We assess the valuation methodology based upon the relevance and availability of the data at the time we perform the valuation.

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We tested goodwill, trade name and IPR&D for impairment on October 1, 2024.

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

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

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

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LONG-LIVED ASSETS – We evaluate our long-lived assets (property and equipment) and intangibles, other than goodwill and indefinite lived intangible assets, for impairment when events or changes indicate the carrying amount of an asset may not be recoverable.

Accounting standards requires that if the sum of the undiscounted expected future cash flows from a long-lived asset or definite-lived intangible is less than the carrying value of that asset, an asset impairment charge must be recognized.

Accounting standards require that if the sum of the undiscounted expected future cash flows from a long-lived asset or definite-lived intangible is less than the carrying value of that asset, an asset impairment charge must be recognized.

The amount of the impairment charge is calculated as the excess of the asset’s carrying value over its fair value, which generally represents the discounted future cash flows from that asset or in the case of assets we expect to sell, at fair value less costs to sell.

At December 31, 2023 and December 31, 2021 we recorded lease abandonment of $ 2.5 million and $ 7.1 million, respectively in leasehold improvements for facilities that we abandoned.

For the years ended December 31, 2024 and 2023, we recorded lease abandonment of $ 0.7 million and $ 2.5 million, respectively pertaining to leasehold improvements at facilities that we shut down.

See the Leases discussion below for more information.

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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.

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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, as permitted.

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.

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

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

We maintain business interruption insurance to cover loss of business due to a facility becoming non-operational under certain

circumstances.

We maintain business interruption insurance to cover loss of business due to a facility becoming non-operational under certain circumstances.

Our equipment leases are covered by warranty and service contracts which cover repairs and provide regular maintenance to keep the equipment in functioning order.

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We may abandon low utilization leases and divert the patients to nearby centers.

During 2023, we experienced lower utilization at two imaging centers.

To complete the closure of these locations, we took a lease abandonment charge of approximately $ 5.1 million and $ 19.7 million at December 31, 2023 and December 31, 2021, respectively.

Of these amounts, $ 2.7 million and $ 12.6 million were related to right-of-use assets impairment and $ 2.5 million and $ 7.1 million were related to the write-off of leasehold improvements for the years ending December 31, 2023 and December 31, 2021.

During the years ended 2024

and 2023, we experienced lower utilization at various imaging centers which resulted in the closure of these locations and the recognition of lease abandonment charges of approximately $ 2.5 million and $ 5.1 million at December 31, 2024 and 2023, respectively in our Imaging Center segment.

Of these amounts, $ 1.8 million and $ 2.7 million were related to right-of-use assets impairment and $ 0.7 million and $ 2.5 million were related to the write-off of leasehold improvements for the years ending December 31, 2024 and 2023, respectively.

UNINSURED RISKS – We maintain a high-deductible workers’ compensation insurance policy.

We have recorded liabilities of $ 3.4 million and $ 3.9 million at December 31, 2023 and December 31, 2022, respectively, for the estimated future cash obligations associated with the unpaid portion of the workers compensation claims incurred.

We have recorded liabilities of $ 5.6 million and $ 3.4 million at December 31, 2024 and 2023, respectively, for the estimated future cash obligations associated with the unpaid portion of the workers compensation claims incurred.

We and our affiliated physicians carry an annual medical malpractice insurance policy that protects us for claims that are filed during the policy year and that fall within policy limits.

The policy has a deductible which is $ 10,000 per incidence for all years covered by this report.

In December 2008, in order to eliminate the exposure for claims not reported during the regular malpractice policy period, we purchased a medical malpractice claims made tail policy, which provides coverage for any claims reported in the event that our medical malpractice policy expires.

As of December 31, 2023, this policy remains in effect.

In order to eliminate the exposure for claims not reported during the regular malpractice policy period, we have purchased a medical malpractice claims made tail policy, which provides coverage for any claims reported in the event that our medical malpractice policy expires.

As of December 31, 2024, this policy remained in effect.

We have entered into an arrangement with Blue Shield to administer and process claims under a self-insured plan that provides health insurance coverage for our employees and dependents.

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We can elect to provide a matching contribution in the amount to a maximum of 1.0 % per 4.0 % of employee contributions.

We contributed $ 0.0 million and $ 3.0 million in matching for each of the twelve months ended December 31, 2023 and December 31, 2022.

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

We contributed $ 3.6 million and $ 3.3 million in matching for the years ended December 31, 2024 and 2023.

EQUITY BASED COMPENSATION – We have one long-term incentive plan that we adopted in 2006 and which we 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”).

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For the awards where vesting is probable, equity-based compensation is recognized over the related vesting period.

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

Stock options generally vest over 3 years to five years and expire 5 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.

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Revenues and expenses are translated using average exchange rates prevailing during the reporting period.

Any translation adjustments resulting from this process are shown separately as a

component of accumulated other comprehensive income (loss).

Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive loss.

Gains and losses related to the foreign currency portion of international transactions are included in the determination of net income.

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Currency Translation

Balance as of December 31, 2020 ( 377 )

Balance as of Balance as of December 31, 2021 $ ( 442 )

Currency Translation Adjustments ( 3,943 )

Balance as of December 31, 2021 ( 442 )

Balance as of Balance as of December 31, 2022 ( 4,385 )

Currency Translation Adjustments 4,617

Balance as of December 31, 2022 ( 4,385 )

Balance as of Balance as of December 31, 2023 232

Currency Translation Adjustments ( 5,929 )

Balance as of December 31, 2023 232

OTHER COMPREHENSIVE INCOME (LOSS) – Accounting guidance establishes rules for reporting and displaying other comprehensive income (loss) and its components.

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 twelve month periods ended December 31, 2023, December 31, 2022, and December 31, 2021 are included in the consolidated statements of comprehensive income.

Balance as of Balance as of December 31, 2024 $ ( 5,697 )

OTHER COMPREHENSIVE INCOME (LOSS) – Accounting guidance establishes rules for reporting and displaying other comprehensive income (loss) ("OCI") and its components.

Our foreign currency translation adjustments and the amortization of balances associated with derivatives previously classified as cash flow hedges are included in OCI.

The components of OCI for the years ended December 31, 2024, 2023, and 2022 are included in the consolidated statements of comprehensive income.

INTEREST ON SECURITIES - We recognized income from interest on securities of approximately $ 31.4 million and $ 10.9 million for the year ended December 31, 2024 and 2023, respectively.

This income is recorded within Other non-operating income in our 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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They matured in October 2023 for the two smaller notional and will mature in October 2025 for the two larger notional.

Under these arrangements, we arranged the 2019 swaps with locked in 1 month Term SOFR rates at 1.89 % for the $ 100,000,000 notional and at 1.98 % for the $ 400,000,000 notional.

Under these arrangements, we arranged the 2019 swaps with locked in 1 month Term Secured Overnight Financing Rate ("SOFR") rates at 1.89 % for the $ 100,000,000 notional and at 1.98 % for the $ 400,000,000 notional.

In October of 2023, the two agreements of $ 50,000,000 each matured and the remaining 2019 swaps have a total notional amount of $ 400,000,000 as of December 31, 2024.

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

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

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

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The gain or loss on the effective portion of the hedge (i.e.

change in fair value) is reported as a component of other accumulated comprehensive income (loss) in the consolidated statement of equity.

change in fair value) is reported as a component of other accumulated comprehensive loss in the consolidated statement of equity.

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

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This amount will be 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.

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

For the years ended Account Beginning 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* Ending Balance

December 31, 2024 Accumulated Other Comprehensive Loss, net of taxes $ ( 11,625 ) $ — $ 9,352 $ ( 2,273 )

December 31, 2023 Accumulated Other Comprehensive Loss, net of taxes $ ( 15,201 ) $ — $ 3,576 $ ( 11,625 )

December 31, 2022 Accumulated Other Comprehensive Loss, net of taxes $ ( 18,888 ) $ — $ 3,687 $ ( 15,201 )

*Net of taxes of $ 3.0 million, $ 1.4 million and $ 1.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.

A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps for the Swaps that became ineffective in 2020 is as follows (amounts in thousands):

Interest Rate Contracts - Ineffective Portion

For the twelve months ended Amount of gain (loss) recognized in income on derivative (current period ineffective portion) Location of gain (loss) recognized in Income on derivative (current period ineffective portion) Amount of loss reclassified from accumulated other comprehensive income (loss) into income (prior period effective portion) Location of loss reclassified from accumulated other comprehensive income (loss) into income (prior period effective portion)

December 31, 2023 $( 8,185 ) Other Income (Expense) $( 3,576 ) Interest Expense

December 31, 2022 $ 39,621 Other Income (Expense) $( 3,687 ) Interest Expense

December 31, 2021 $ 21,670 Other Income (Expense) $( 3,695 ) Interest Expense

For the year ended Amount of gain (loss) recognized in income on derivative (current period ineffective portion) Location of gain (loss) recognized in Income on derivative (current period ineffective portion) Amount of loss reclassified from accumulated other comprehensive income (loss) into income (prior period effective portion) Net receipts (payments) associated with swap Location of loss reclassified from accumulated other comprehensive income (loss) into income (prior period effective portion) and net receipts (payments) associated with swap

December 31, 2024 $( 8,006 ) Non-cash change in fair value of interest rate swaps $( 9,352 ) $ 13,126 Interest Expense

December 31, 2023 $( 8,185 ) Non-cash change in fair value of interest rate swaps $( 3,576 ) $ 14,541 Interest Expense

December 31, 2022 $ 39,621 Non-cash change in fair value of interest rate swaps $( 3,687 ) $( 2,826 ) Interest Expense

Net receipts (payments) associated with swap are reported as operating activities in the statement of cash flows.

Contingent Consideration :

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As part of the purchase agreement, we agreed to pay up to $ 10.0 million consideration upon the completion of two identified milestones in RadNet common shares or cash at our election.

The contingency had a fair value of approximately $ 7.2 million on December 31, 2022.

The fair value is based on the yield rate of S&P B-rated corporate bonds and the probability of meeting the milestones which were tied to FDA approval of artificial intelligence screening solutions.

The fair value is based on the yield rate of S&P B-rated corporate bonds and the probability of meeting the milestones which were tied to FDA authorizations of artificial intelligence screening solutions.

In September 2023, we determined that the milestones could not be achieved under the contractual terms of the stock purchase agreement because the original submissions of artificial intelligence screening solutions did not receive regulatory clearance.

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and therefore, the probability of the milestones being achieved became zero.

Accordingly, management recognized a gain of $ 7.2 million in 2023 representing the change in fair value of contingent consideration within Cost of operations in our Consolidated Statements of Operations .

Accordingly, we recognized a gain of $ 7.2 million in 2023 representing the change in fair value of contingent consideration within Cost of operations in our Consolidated Statements of Operations .

In addition, there was a general holdback of $ 4.0 million for any indemnification claims, which was settled on April 30, 2023 by the issuance of 144,227 shares of our common stock.

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("Quantib"), an artificial intelligence enterprise centered on prostate cancer screening.

As part of the purchase agreement, we agreed to issue 18 months after acquisition, 113,303 shares of our common stock with an initial fair value at the date of close of $ 3.0 million subject to adjustment for any indemnification claims and will be adjusted to fair value in subsequent periods.

In addition, there is a general holdback of $ 1.6 million to be issued in cash subject to adjustment for any indemnification claims.

In addition, there is a general holdback of $ 1.6 million to be

issued in cash subject to adjustment for any indemnification claims.

On July 7, 2023, we settled the stock holdback contingent liabilities by issuing 113,303 shares of our common stock at an ascribed value of $ 3.5 million and also settled the general holdback for $ 1.6 million in cash.

On October 1, 2022, we completed our acquisition of Montclair Radiological Associates.

On October 1, 2022, we completed our acquisition of Montclair Radiological Associates ("Montclair").

As part of the purchase agreement, we recorded $ 1.2 million in contingent consideration which was based on the anticipated achievement of specific EBITDA targets within a defined time frame.

In June 2023, we determined that the contingent consideration thresholds were not achieved and, as such, we recognized a gain of $ 1.2 million representing the change in fair value of the contingent consideration within Cost of operations in our Consolidated Statements of Operations .

Heart & 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 & Lung Imaging Limited.

The purchase included $ 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 contingencies had a value of approximately $ 6.2 million and $ 11.1 million as of December 31, 2023 and 2022, respectively.

The purchase included $ 10.2 million in contingent milestone consideration and a cash holdback of $ 0.6 million to be issued 24 months after acquisition subject to adjustment for any indemnification claims.

The milestone contingencies had a value of approximately $ 0 and $ 6.2 million as of December 31, 2024 and 2023, respectively.

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

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On December 12, 2023, we settled a milestone contingent liability by issuing 64,569 shares of our common stock at an ascribed value of $ 2.3 million and cash of $ 2.1 million.

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.

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

On November 6, 2024, we settled the remaining holdback in cash of $ 0.6 million.

We recognized a loss of $ 1.1 million and $ 2.5 million for the year ended December 31, 2024 and 2023, respectively, representing the change in fair value of the contingent consideration within Cost of operations in our Consolidated Statements of Operations .

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

For the twelve months ended December 31, 2023

Entity Account January 1, 2023 Balance Settlement of Contingent Consideration Change in Valuation of Contingent Consideration Currency Translation December 31, 2023 Balance

Aidence Other Long Term Liabilities $ 11,158 $ ( 4,000 ) $ ( 7,158 ) $ — $ —

Quantib Accrued Expenses & Other Long Term Liabilities $ 3,709 $ ( 5,110 ) $ 1,401 $ — $ —

Montclair Accrued Expenses $ 1,200 $ ( 1,200 ) $ — $ —

For the year ended December 31, 2024

Entity Account December 31, 2023 Balance Settlement of Contingent Consideration Change in Valuation of Contingent Consideration Currency Translation December 31, 2024 Balance

Heart & Lung Limited Accrued Expenses & Other Long Term Liabilities $ 6,242 $ ( 8,221 ) $ 1,060 $ 919 $ —

For the twelve months ended December 31, 2022

For the year ended December 31, 2023

Entity Account January 1, 2023 Balance Settlement of Contingent Consideration Change in Valuation of Contingent Consideration Currency Translation December 31, 2023 Balance

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Heart & Lung Limited Accrued Expenses & Other Long Term Liabilities $ 11,053 $ ( 7,854 ) $ 2,476 $ 567 $ 6,242

See Fair Value Measurements section below for the fair value of contingent consideration at December 31, 2023 and 2022.

For the year ended December 31, 2022

Entity January 1, 2022 Balance Addition Change in Valuation of Contingent Consideration Currency Translation December 31, 2022 Balance

Aidence $ — $ 7,477 $ ( 362 ) $ 43 $ 7,158

Quantib $ — $ 3,019 $ ( 903 ) $ 18 $ 2,134

Montclair $ — $ 1,200 $ — $ — $ 1,200

Heart & Lung Limited $ — $ 10,225 $ 566 $ 262 $ 11,053

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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Level 1 Level 2 Level 3 Total

Other Current Assets and Deposits and Other

Other Current Assets

2019 SWAPS - Interest Rate Contracts $ — $ 7,112 $ — $ 7,112

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Level 1 Level 2 Level 3 Total

Other Current Assets and Deposits and Other

Deposits and Other

2019 SWAPS - Interest Rate Contracts $ — $ 15,118 $ — $ 15,118

The estimated fair value of these contracts was determined using Level 2 inputs.

More specifically, the fair value was determined by calculating the value of the difference between the fixed interest rate of the interest rate swaps and the counterparty’s forward SOFR curve in 2023 and forward LIBOR curve in 2022.

respectively.

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Contingent Consideration:

The tables below summarize the estimated fair values of contingencies and holdback relating to our acquisitions that are subject to fair value measurements and the classification of these liabilities on our consolidated balance sheets, as follows (in thousands):

The tables below summarize the estimated fair values of contingencies and holdbacks relating to our acquisitions that are subject to fair value measurements and the classification of these liabilities on our consolidated balance sheets, as follows (in thousands):

As of December 31, 2024

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

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.

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.

As of December 31, 2023

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Accrued expenses and other non-current liabilities

Aidence Holding B.V.

milestone consideration $ — $ — $ 11,158 $ 11,158

Holdback of 113,303 shares of RadNet common stock

$ — $ — $ 3,709 $ 3,709

Montclair Radiological Associates $ — $ — $ 1,200 $ 1,200

Heart & Lung Imaging Limited $ — $ — $ 6,242 $ 6,242

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

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

For the Quantib B.V holdback shares, the fair value was determined by calculating the value of estimated shares issuable as of the reporting date (which was $ 18.83 ) translated at the current exchange rate at December 31, 2022, the time period related to the contractual settlement term, and the probability of issuing the shares.

For Montclair Radiological Associates the contingent consideration is determined by obtaining specific EBITDA targets within a defined time frame.

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

As significant inputs for the contingent consideration of Aidence B.V., Quantib B.V., Montclair Radiological Associates and Heart & Lung Imaging Limited are not observable and cannot be corroborated by observable market data, they are classified as Level 3.

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.

Long Term Debt

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

Our Barclays revolving credit facility had no aggregate principal amount outstanding as of December 31, 2023 and December 31, 2022, respectively.

Our Truist revolving credit facility had no aggregate principal amount outstanding as of December 31, 2023 and December 31, 2022, respectively.

Our Barclays revolving credit facility had no aggregate principal amount outstanding as of December 31, 2024 and 2023, respectively.

Our Truist revolving credit facility had no aggregate principal amount outstanding as of December 31, 2024 and 2023, respectively.

The estimated fair values of our long-term debt, which is discussed in Note 8, was determined using Level 2 inputs for the Barclays and Truist term loans.

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We consider the carrying amounts of cash and cash equivalents, receivables, other current assets, and current liabilities to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment.

Additionally, we consider the carrying amount of our finance lease obligations and other notes payable to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates.

Additionally, we consider the carrying amount of our and other notes payable to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates.

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):

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Shares issuable upon the exercise of stock options — 754,131 152,723

Weight average shares for which the exercise price exceeds the average market price of common stock 70,760 — —

Weighted average shares for which the exercise price exceeds the average market price of common stock — 70,760 —

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 December 31, 2023, we have three equity investments for which a fair value is not readily determinable and we do not have significant influence and therefore the total amounts invested are recognized at cost as follows:

Medic Vision, based in Israel, specializes in software packages that provide compliant radiation dose structured reporting and enhanced images from reduced dose CT scans.

Our investment of $ 1.2 million, represents a 14.21 % equity interest in the company.

No observable price changes or impairment in our investment was identified as of December 31, 2023.

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

On February 1, 2018, we purchased 2.1 million preferred shares in Turner Imaging Systems for $ 2.0 million.

On January 1, 2019 we funded a convertible promissory note in the amount of $ 0.1 million that converted to an additional 80,000 preferred shares on October 11, 2019.

No observable price changes or impairment in our investment was identified as of December 31, 2023.

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

On November 5, 2019 we acquired 2,315,350 shares of Series A Preferred Stock interest at a cost of $ 1.0 million and also loaned the company $ 2.5 million in support of its operations.

On October 6, 2023, WhiteRabbit.ai Inc.

commenced another offering of preferred shares and the Company converted its note receivable outstanding principal and accrued interest in exchange for 20,325,203 shares of Series C-1 Preferred Stock at an exchange rate of $ 0.123 per share.

No observable price changes or impairment in our investment was identified as of December 31, 2023.

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

These joint ventures represent partnerships with hospitals, health systems or radiology practices and were formed for the purpose of owning and operating diagnostic imaging centers.

As of December 31, 2024, we have three equity investments with an aggregate carry value of $ 8.0 million.

No observable price changes or impairments in our investments were identified as of December 31, 2024, 2023, and 2022, except as disclosed below.

During the year ended December 31, 2024, we recognized a $ 1.2 million impairment loss on our investment in Israel-based Medic Vision in our Imaging Center segment.

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 Consolidated Statements of Operations.

INVESTMENT IN JOINT VENTURES – We have 12 unconsolidated joint ventures that represent partnerships with hospitals, health systems or radiology practices and were formed for the purpose of owning and operating diagnostic imaging

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.

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

The table below summarizes our ownership interest in these joint ventures as of December 31, 2024:

Joint Venture Percentage Ownership

Franklin Imaging, LLC 49 %

Greater Baltimore Diagnostic Imaging 50 %

Advanced Imaging at St.

Joseph Medical Center, LLC 49 %

Carroll County Radiology, LLC 40 %

Baltimore Washington Imaging Center, LLC 35 %

Calvert Medical Imaging Centers, LLC 50 %

Montgomery Community Magnetic Imaging Ctr LP 49 %

Airy Imaging Center, LLC 40 %

Orange County Radiation Oncology, LLC 40 %

Arizona Diagnostic Radiology Group LLC 49 %

Glendale Advanced Imaging Center, LLC 55 %

Santa Monica Imaging Group LLC 49 %

Joint venture investment and financial information

The following table is a summary of our investment in joint ventures during the years ended December 31, 2023 and December 31, 2022 (in thousands):

The following table is a summary of our investment in joint ventures during the years ended December 31, 2024 and 2023 (in thousands):

Balance as of December 31, 2022 $ 57,893

Equity contributions in existing and purchase of interest in joint ventures 9,712

Equity in earnings in these joint ventures 6,427

Distribution of earnings ( 15,603 )

Equity contributions in existing and purchase of interest in joint ventures 43,993

Balance as of December 31, 2023 $ 92,710

Equity in earnings in these joint ventures 14,472

Equity contributions in existing and purchase of interest in joint ventures 43,993

Distribution of earnings ( 4,546 )

Equity contributions in existing and purchase of interest in joint ventures 1,496

Impairment loss ( 75 )

Balance as of December 31, 2024 $ 104,057

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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.

During the year ended December 31, 2024, we have identified an other than temporary impairment in certain of our investments in joint ventures.

As a result, we have recognized a $ 0.1 million impairment loss on certain of our joint venture investment in our Imaging Center segment, which has been recorded within "Other income " in our Consolidated Statements of Operations.

The following table is a summary of key financial data for these joint ventures as of December 31, 2024 and 2023, respectively, and for the years ended December 31, 2024, 2023 and 2022, respectively, (in thousands):

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To maintain our 49 % economic interest in ADRG, we received a distribution from the partnership of $ 4.5 million to reduce our overall investment to $ 8.3 million.

Formation of majority owned subsidiary and sale of economic interest

Los Angeles Imaging Group, LLC.

On September 1, 2023, we formed a wholly-owned subsidiary, Los Angeles Imaging Group, LLC ("LAIG").

The operation offers multi-modality imaging services out of three locations in Los Angeles, California.

We contributed the operations of 3 centers to the subsidiary.

Cedars-Sinai Medical Center ("CSMC") purchased from us a 35 % noncontrolling interest in LAIG for a cash payment of $ 5.9 million.

As a result of the transaction, we retain a 65 % controlling economic interest in LAIG.

Joint venture investment contribution

Santa Monica Imaging Group, LLC.

On April 1, 2017, we formed, in conjunction with Cedars-Sinai Medical Center ("CSMC") the Santa Monica Imaging Group, LLC ("SMIG"), consisting of two multi-modality imaging centers located in Santa Monica, California with RadNet holding a 40 % economic interest and CSMC holding a 60 % economic interest.

RadNet accounted for its share of the venture under the equity method.

On January 1, 2019, CSMC purchased an additional 5 % economic interest in SMIG from us and, as a result, of our economic interest in SMIG was reduced to 35 %.

On September 1, 2023, RadNet contributed an additional multi-modality imaging center and a newly constructed imaging center located in Beverly Hills, California valued at $ 27.2 million and purchased an additional economic interest in SMIG for cash payment of $ 11.3 million.

Simultaneously, CSMC contributed five additional multi-modality imaging centers located in Santa Monica, California.

As a result of the transaction, our economic interest in SMIG has been increased to 49 %.

We recorded a gain of $ 16.8 million, within (Gain) on contribution of imaging centers into joint venture in our Consolidated Statements of Operations , representing the difference between the fair value and carrying value of the business contributed.

Santa Monica Imaging Group, LLC ("SMIG") is a joint venture between RadNet ( 49 % economic interest) and Cedars-Sinai Medical Center ("CSMC") ( 51 % economic interest), consisting of multiple multi-modality imaging centers in Santa Monica and Beverly Hills, California.

RadNet initially held a 40 % economic interest, which was later reduced to 35 % in 2019.

In September 2023, RadNet increased its economic to 35 % by contributing two imaging centers (one newly constructed in Beverly Hills) valued at $ 27.2 million and purchasing an additional interest for cash payment of $ 11.3 million.

Simultaneously, CSMC contributed five additional imaging centers in Santa Monica.

As a result of this transaction, RadNet recognized a $ 16.8 million gain, recorded under (Gain) on contribution of imaging centers into joint venture in the Consolidated Statements of Operations, reflecting the difference between the fair value and carrying value of the contributed businesses.

The related gain on disposal of business was calculated as the difference between the fair value and carrying value of such imaging centers which included equipment, other assets, accrued liabilities, and an allocation of goodwill to such imaging centers.

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Early adoption is permitted.

The Company is currently evaluating the impact of the adoption of ASU 2023-07 on its consolidated financial position and results of operations.

We adopted this ASU for the

year ended December 31, 2024, and applied the amendments retrospectively to all prior periods presented in our consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Updates (ASUs) 2023-09 ("ASU 2023-09"), Income Tax (Topic 740) Improvements to Income Tax Disclosures primarily related to the rate reconciliation and income taxes paid information.

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Early adoption is permitted.

Company is currently evaluating the impact of the adoption of ASU 2023-09 on its consolidated financial position and results of operations.

We will adopt this ASU prospectively for the period ending December 31, 2025, and it will impact only our disclosures with no impacts to our financial condition and results of operations.

In November 2024, the FASB issued Accounting Standards Update (ASU) 2024-03 (“ASU 2024-03”), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, to enhance the transparency of certain expense disclosures.

The amendments in this Update require disclosure of specific expense categories in the notes to the financial statements for both interim and annual reporting periods.

The Update also requires disaggregated information about certain prescribed expense categories underlying any relevant income statement expense caption.

The amendments in this Update are effective for public entities for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted, and the amendments may be adopted either prospectively or retrospectively.

We are currently evaluating the impact of this ASU on our consolidated financial statements.

NOTE 4 – BUSINESS COMBINATIONS AND RELATED ACTIVITY

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During the years ended 2024, 2023 and 2022, 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, Delaware, Maryland, New Jersey and New York markets.

The primary reason for these acquisitions was to strengthen our presence in the California, Delaware, Maryland, New Jersey, Texas and New York markets.

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

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

Antelope Valley Outpatient Imaging* 2/1/2024 3,530 2,793 563 687 50 — ( 563 ) —

Grossman Imaging Center of CMH, LLC* 3/31/2024 10,343 1,717 6,304 8,500 280 56 ( 6,514 ) —

Providence Health System - Southern California* 3/31/2024 7,369 1,378 3,441 5,991 — — ( 3,441 ) —

Houston Medical Imaging, LLC* 4/1/2024 22,703 15,826 7,929 11,584 1,660 90 ( 8,089 ) ( 6,297 )

Imaging, Inc.* 6/1/2024 4,200 4,025 5,597 — 175 — ( 5,597 ) —

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

Stanislaus Surgical Hospital, LLC* 9/16/2024 3,000 503 1,468 2,382 100 15 ( 1,468 ) —

Pink Perception, LLC* 10/7/2024 4,000 494 407 3,306 200 — ( 407 ) —

AV Imaging PLLC* 11/1/2024 1,000 287 — 663 50 — — —

Total $ 59,045 $ 28,289 $ 25,709 $ 34,697 $ 2,565 $ 161 $ ( 26,079 ) $ ( 6,297 )

In connection with these acquisitions, we have added $ 1.2 million of covenant not to compete, which is subject to amortization, and $ 1.4 million of indefinite-lived trade names to our intangible assets.

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

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*Fair Value Determination is Final

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

IFRC LLC*^

1/1/2022 8,200 2,910 1,703 5,271 — 19 ( 1,703 )

IFRC LLC*^

1/1/2022 4,800 2,103 857 2,697 — — ( 857 )

Montclair Radiological Associates, P.A.*# 10/1/2022 94,877 16,414 4,665 79,690 400 ( 2,168 ) ( 4,124 )

Heart & Lung Imaging Limited+ 11/1/2022 32,000 — — 16,200 15,800 — —

Chelsea Diagnostic Radiology, P.C.* 12/1/2022 2,800 568 — 2,132 100 — —

North Jersey Imaging Center, LLC* 12/9/2022 104 20 — 55 25 4 —

Total $ 142,781 $ 22,015 $ 7,225 $ 106,045 $ 16,325 $( 2,145 ) $( 6,684 )

*Fair Value Determination is Final

IFRC LLC acquisitions consisted of three subsidiaries of IFRC, one of which was purchased separately by a joint venture with Calvert Medical Imaging Centers, LLC.

# Montclair Radiological Associates includes a liability for $ 1.2 million in contingent consideration.

+See detailed description of the Heart & Lung Imaging Limited acquisition below.

Heart & Lung Imaging Limited.

On November 1, 2022, we acquired a 75 % controlling interest in Heart & Lung Imaging Limited (“HLI”).

HLI is a teleradiology concern which operates in the United Kingdom with the National Healthcare Service to screen high risk populations for cardiac and lung conditions.

HLI’s operations are included in our imaging center segment for reporting purposes.

The transaction was accounted for as the acquisition of a business with a total purchase consideration of approximately $ 31.9 million, including:

i) shares with a fair value of $ 6.8 million ( 359,002 shares issued at $ 19.06 per share), ii) cash of $ 6.3 million, iii) contingent consideration of $ 10.8 million ($ 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) and iv) noncontrolling interest of $ 8.0 million.

We recorded $ 0.6 million in current assets, $ 15.8 million in intangible assets, $ 0.6 million current liabilities and $ 16.2 million in goodwill in connection with this transaction.

As part of the purchase price allocation, we determined the identifiable intangible assets are customer relationships and trade names.

The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using a rate of 19.0 %.

The cash flows were based on estimated earnings from existing customers, and the discount rate applied was benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

Artificial Intelligence Segment

Aidence Holding B.V.

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

("Aidence") an artificial intelligence enterprise focused on lung cancer screening.

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

The transaction was accounted for as an acquisition of a business and total purchase consideration was determined to be approximately $ 45.2 million including i) 1,117,872 shares issued at $ 26.80 per share with a fair value of $ 30.0 million, ii) cash of $ 1.8 million, iii) contingent consideration of $ 11.9 million ($ 7.4 million in milestones to be settled in shares or cash at our election and a share holdback of $ 4.5 million), and iv) a settlement of a loan from RadNet of $ 1.5 million.

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

As a result of this transaction, we recorded $ 1.0 million in current assets, $ 0.2 million in property and equipment, $ 27.7 million in intangible assets (including developed technology of

$ 21.1 million and IPR&D of $ 5.5 million), $ 3.2 million in current liabilities, a deferred tax liability of $ 3.5 million, and $ 22.9 million in goodwill.

In performing the purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of the Aidence business.

As part of the purchase price allocation, we determined the identifiable intangible assets are developed technology, IPR&D, trade names, and customer relationships.

The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using rates ranging from 15 % to 17 %.

The cash flows were based on estimates used to price the transaction, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model and the weighted average cost of capital.

The developed technology consists of artificial intelligence powered applications for lung nodule management and early lung cancer diagnosis and reporting.

The IPR&D asset relates primarily to an in-process project for a customer relationship management offering to manage patients that are found with Incidental Pulmonary Nodules and has not reached technological feasibility as of the acquisition date.

The asset recorded relates to one project, and the Company originally expected to complete the project following twelve months of acquisition.

Subsequently, in September 2023, we determined that the In-process Research and Development ("IPR&D") related to Aidence's Ai Veye Lung and Veye Clinic would not achieve FDA approval for sale in the US without a new submission and additional expenditures for rework.

The additional expenditures, delay, and reduction of US sales affected the estimated fair value of the associated IPR&D intangible asset and resulted in impairment charges of $ 3.9 million within Cost of operations in our Consolidated Statements of Operations .

The useful lives for the developed technology asset was set at 7 years, for customer relationships 5.4 years, and trade names was 7 years.

The calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill.

Factors contributing to the recognition of the amount of goodwill were primarily based on anticipated strategic and synergistic benefits that are expected to be realized from the acquisition.

These benefits include expanding the Company's AI capabilities to drive revenue growth.

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

("Quantib") an artificial intelligence enterprise focused on prostate cancer screening.

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

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

As a result of this transaction, we recorded $ 2.4 million in current assets, $ 0.1 million in property and equipment, $ 21.3 million in intangible assets (including developed technology of $ 19.6 million and IPR&D of $ 0.7 million), $ 0.7 million in current liabilities, $ 6.7 million in long-term debt and deferred tax liabilities, and $ 26.4 million in goodwill.

As part of the purchase price allocation, we determined the identifiable intangible assets are developed technology, IPR&D, trade names, and customer relationships.

The fair value of the intangible assets was estimated using the income approach, and the cash flow projections were discounted using rates ranging from 50 % to 55 %.

The developed technology consists of artificial intelligence powered applications for neurological and prostate imaging scans and reporting.

The useful lives for the developed technology asset was set at seven years , customer relationships three years , and trade names seven years .

The calculation of the excess of the purchase price over the estimated fair value of the tangible net assets and intangible assets acquired was recorded to goodwill.

Factors contributing to the recognition of the amount of goodwill were primarily based on anticipated strategic and synergistic benefits that are expected to be realized from the acquisition.

These benefits include expanding the Company's AI capabilities to drive revenue growth.

As disclosed above, for the acquisitions of Aidence and Quantib, the Company uses the income approach to determine the fair value of developed technology and IPR&D acquired in business combinations.

This approach determines fair value by estimating the after-tax cash flows attributable to the respective assets over their useful lives and then discounting these after-tax cash flows back to a present value.

The Company bases its revenue assumptions on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected product introductions by competitors.

The value of the in-process projects is based on the project's stage of completion, the complexity of the work completed as of the acquisition date, the projected costs to complete, the expected introduction date, the estimated cash flows to be generated upon commercial release and the estimated useful life of the technology.

The Company believes that the estimated developed technology and IPR&D amounts represent the fair value at the date of acquisition and do not exceed the amount a third-party would pay for the assets.

The significant assumptions used to estimate the fair value of intangible assets include discount rates and certain assumptions that form the basis of the forecasted results, specifically, revenue growth rates, EBITDA margins and obsolescence factors.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

Digital Health Segment

Kheiron Medical Technologies LTD

On October 14, 2024, we acquired a all of the equity interest in Kheiron Medical Technologies LTD (“Kheiron”), which uses deep learning AI to help radiologists detect breast cancer.

Kheiron’s operations are included in our Digital Health segment for reporting purposes.

The transaction was accounted for as the acquisition of a business with a total purchase consideration of approximately $ 2.3 million, including:

i) cash of $ 0.4 million, ii) cash holdback of $ 0.5 million to be issued 18 months after acquisition, (iii) acquisition costs incurred by the seller of $ 0.4 million and (iv) a settlement of a loan from RadNet of $ 1.0 million.

We recorded $ 1.2 million in current assets, $ 2.7 million of IPR&D in intangible assets, and $ 1.5 million in current liabilities in connection with this transaction.

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

Subsidiary activity

Formation of majority owned subsidiaries

Frederick County Radiology, LLC.

On April 1, 2022 we formed Frederick County Radiology, LLC ("FCR"), a partnership with Frederick Health Hospital, Inc.

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

We contributed the operations of four centers to the enterprise and Frederick Health Hospital, Inc.

contributed $ 5.4 million in fixed assets, $ 3.0 million in equipment, and $ 11.0 million in goodwill.

As a result of the transaction, we recognized a gain of $ 6.6 million to additional paid in capital and retained a 65 % controlling economic interest in FCR and Frederick Health Hospital, Inc.

retains an $ 11.1 million or 35 % noncontrolling economic interest in FCR.

Formation of majority owned subsidiary and sale of ownership interest

Formation of majority owned subsidiary and sale of economic interest

Tri Valley Imaging Group, LLC.

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 $ 1.4 million of fixed assets and $ 6.0 million in goodwill.

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

result of the transaction, we recognized a gain of $ 0.0 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.

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.

Ventura County Imaging Group.

On March 31, 2024, Community Memorial Health System purchased an economic interest of Ventura County Imaging Group ("VGIC") for a consideration of $ 5.1 million.

As a result of the transaction, we retained 47.5 % controlling economic interest in VGIC.

Los Angeles Imaging Group, LLC.

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As a result of the transaction, we retain a 65 % controlling economic interest in LAIG.

Sale of ownership interest in a majority owned subsidiary

Tarzana Medical Center, LLC.

Effective September 1, 2021 we completed the sale of a 24.9 % ownership interest in our majority owned subsidiary West Valley Imaging Group, LLC for $ 13.1 million to Tarzana Medical Center, LLC.

After the sale, our ownership interest in the subsidiary has reduced from 75.0 % to 50.1 % and we retain a controlling financial interest in the subsidiary.

We recognized in additional paid in capital on our consolidated balance sheets, $ 4.2 million excess in consideration over the carrying value of the sold economic interest.

Post the sale of our ownership interest we acquired from Tarzana Medical Center, LLC, certain tangible and intangible business assets for purchase consideration of approximately $ 5.2 million.

NOTE 5 – SEGMENT REPORTING

Our reportable segments are described below:

Imaging Center

Our chief operating decision maker ("CODM"), who is also our CEO, evaluates the financial performance of our segments based upon their respective revenue and segmented internal profit and loss statements prepared on a basis not consistent with GAAP.

The CODM considers actual to budget and current year actual to prior year actual for revenue and other profit and loss measures on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

We do not report balance sheet information by segment since it is not reviewed by our CODM to evaluate segment performance or to make resource allocation decisions.

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 former AI segment to form a new Digital Health reportable segment.

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

Accordingly, our reportable segments currently are 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.

We also provide teleradiology services in the United Kingdom though our majority-owned Heart & Lung Imaging Limited subsidiary.

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.

Included in the segment is our eRad subsidiary, which designs the underlying critical scheduling, data storage and retrieval systems necessary for imaging center operation.

Artificial Intelligence ("AI")

Our AI 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.

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.

Twelve Months Ended December 31, 2023

Imaging Centers AI Intersegment Elimination Consolidated Total

Third Party $ 1,610,707 $ 5,923 $ — $ 1,616,630

Intersegment — 6,546 ( 6,546 ) —

Total revenue $ 1,610,707 $ 12,469 $ ( 6,546 ) $ 1,616,630

Twelve Months Ended December 31, 2022

Imaging Centers AI Intersegment Elimination Consolidated Total

Third Party $ 1,425,665 $ 4,396 $ — $ 1,430,061

Intersegment — — — —

Total revenue $ 1,425,665 $ 4,396 $ — $ 1,430,061

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

Twelve Months Ended December 31,

The following tables reflect certain financial data for each reportable segment:

Year Ended December 31, 2024

Imaging Center Digital health Total

Revenues from external customers $ 1,792,319 $ 37,345 $ 1,829,664

Intersegment revenues — 28,361 28,361

$ 1,792,319 $ 65,706 $ 1,858,025

Imaging Centers $ 1,604,161 $ 1,425,665 $ 1,313,662

AI 12,469 4,396 1,415

Total revenue $ 1,616,630 $ 1,430,061 $ 1,315,077

Cost of Operations

Imaging Centers $ 1,371,036 $ 1,240,593 $ 1,117,941

AI 24,203 23,753 5,333

Total cost of operations $ 1,395,239 $ 1,264,346 $ 1,123,274

Reconciliation of revenue

Elimination of intersegment revenues ( 28,361 )

Total consolidated revenues $ 1,829,664

Other segment items* $ 1,542,274 $ 40,753 $ 1,583,027

Segment profit (loss) 250,045 ( 3,408 ) 246,637

Reconciliation of segment profit

Depreciation and amortization ( 137,838 )

Loss on sale and disposal of equipment and other ( 2,276 )

Severance costs ( 1,902 )

Interest expense ( 79,849 )

Equity in earnings of joint ventures 14,472

Non-cash change in fair value of interest rate swaps ( 8,006 )

Debt restructuring and extinguishment expenses ( 11,292 )

Other income 24,916

Income before income taxes $ 44,862

*Other segment items include operating expenses, inclusive of cost of operations and lease abandonment charges.

Year Ended December 31, 2023

Imaging Center Digital health Total

Revenues from external customers $ 1,590,564 $ 26,066 $ 1,616,630

Intersegment revenues — 23,510 23,510

1,590,564 49,576 1,640,140

Reconciliation of revenue

Elimination of intersegment revenues ( 23,510 )

Total consolidated revenues $ 1,616,630

Other segment items* $ 1,381,847 $ 18,538 $ 1,400,385

Segment profit (loss) 208,717 7,528 216,245

Reconciliation of segment profit

Depreciation and amortization ( 128,391 )

Loss on sale and disposal of equipment and other ( 2,187 )

Severance costs ( 3,778 )

Interest expense ( 64,483 )

Equity in earnings of joint ventures 6,427

Non-cash change in fair value of interest rate swaps ( 8,185 )

Debt restructuring and extinguishment expenses —

Other income 6,354

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

Imaging Centers $ ( 16,808 ) $ — $ —

Total cost of operations $ ( 16,808 ) $ — $ —

Lease abandonment charges

Imaging Centers $ 5,146 $ — $ 19,675

Total depreciation and amortization $ 5,146 $ — $ 19,675

Income before income taxes $ 38,810

*Other segment items include operating expenses, inclusive of cost of operations and lease abandonment charges.

Year Ended December 31, 2022

Imaging Center Digital health Total

Revenues from external customers $ 1,413,419 $ 16,642 $ 1,430,061

Intersegment revenues — 21,416 21,416

1,413,419 38,058 1,451,477

Reconciliation of revenue

Elimination of intersegment revenues ( 21,416 )

Total consolidated revenues $ 1,430,061

Other segment items* $ 1,246,701 $ 17,645 $ 1,264,346

Segment profit (loss) 166,718 ( 1,003 ) 165,715

Reconciliation of segment profit

Depreciation and amortization ( 115,877 )

Imaging Centers $ 120,776 $ 109,524 $ 96,174

AI 7,615 6,353 520

Total depreciation and amortization $ 128,391 $ 115,877 $ 96,694

Loss on Disposal of Equipment

Imaging Centers $ 2,191 $ 2,506 $ 1,246

AI ( 4 ) 23 —

Total loss (gain) $ 2,187 $ 2,529 $ 1,246

Imaging Centers $ 1,973 $ 926 $ 744

AI 1,805 20 —

Total severance $ 3,778 $ 946 $ 744

Income from Operations

Imaging Centers $ 119,847 $ 72,116 $ 77,882

AI ( 21,150 ) ( 25,753 ) ( 4,438 )

Total income from operations $ 98,697 $ 46,363 $ 73,444

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.

As a result of the change, beginning with our Quarterly Report on Form 10-Q for the quarter ending March 31, 2024, we will report our results in these two reportable segments.

The change in reportable segments will be reflected retrospectively.

Loss on sale and disposal of equipment and other ( 2,529 )

Severance costs ( 946 )

Interest expense ( 50,841 )

Equity in earnings of joint ventures 10,390

Non-cash change in fair value of interest rate swaps 39,621

Debt restructuring and extinguishment expenses ( 731 )

Other income ( 1,833 )

Income before income taxes $ 42,969

*Other segment items include operating expenses, inclusive of cost of operations and lease abandonment charges.

Substantially all of our property, equipment and right-of-use assets were located in the United States as of December 31, 2024 and 2023.

Service revenue attributed to countries that represent a significant portion of consolidated service revenue are as follows (in thousands):

2024 2023 2022

United States $ 1,802,422 $ 1,599,745 $ 1,423,232

United Kingdom 24,359 14,245 4,432

Other countries 2,883 2,640 2,397

Total $ 1,829,664 $ 1,616,630 $ 1,430,061

NOTE 6 – GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill is recorded as a result of business combinations.

The following is a reconciliation of Goodwill by business segment for the years ended December 31, 2022 and December 31, 2023 is provided below (in thousands):

Imaging Center Artificial Intelligence Total

The following is a reconciliation of Goodwill by business segment for the years ended December 31, 2023 and December 31, 2024 (in thousands):

Imaging Center Digital Health Total

Balance as of December 31, 2022 $ 594,183 $ 83,482 $ 677,665

Additions 120,551 48,697 169,248

Goodwill from acquisitions 6,473 — 6,473

Disposals ( 9,235 ) — ( 9,235 )

2 unchanged sentences

Balance as of December 31, 2023 $ 594,257 $ 85,206 $ 679,463

Additions 6,473 — 6,473

Disposals ( 9,235 ) — ( 9,235 )

Measurement period and other adjustments 1,603 — 1,603

Goodwill from acquisitions $ 34,697 $ — $ 34,697

Currency translation ( 417 ) ( 3,080 ) ( 3,497 )

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

The amount of goodwill from these acquisitions that is deductible for tax purposes as of December 31, 2023 is $ 142.7 million.

Balance as of December 31, 2024 $ 628,537 $ 82,126 v $ 710,663

The amount of goodwill that is expected to be deductible for tax purposes as for 2024 is $ 152.9 million.

Other intangible assets are primarily related to our business combinations and software development.

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Trade names are reviewed annually for impairment.

The following tables shows annual amortization expense, by asset classes that will be recorded over the next five years (in thousands):

The following table shows annual amortization expense, by asset classes that will be recorded over each of the next five years and thereafter (in thousands):

2025 2026 2027 2028 2029 Thereafter Total Weighted average amortization period remaining in years

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Total property and equipment $ 694,791 $ 604,401

Included in our property and equipment at December 31, 2023 is approximately $ 42.7 million total of construction in process amounts consisting of $ 12.2 million in medical equipment, $ 1.9 million in computer and office equipment, $ 6.0 million in software costs and $ 22.6 million in leasehold improvements.

Included in our property and equipment at December 31, 2024 is approximately $ 56.6 million total of construction in process amounts consisting of $ 31.3 million in medical equipment, $ 0.9 million in computer and office equipment, none in software costs and $ 24.4 million in leasehold improvements.

Depreciation and amortization expense of property and equipment, including amortization of equipment under finance leases, for the years ended December 31, 2023, 2022 and 2021 was $ 116.2 million, $ 105.6 million, and $ 92.3 million, respectively.

Depreciation and amortization expense of property and equipment, including amortization of equipment under finance leases, for the years ended December 31, 2024, 2023 and 2022 was $ 125.3 million ($ 122.5 million in Imaging Center segment and $ 2.9 million in Digital Health segment), $ 116.2 million ($ 115.0 million in Imaging Center segment and $ 1.2 million in Digital Health segment) and $ 105.6 million ($ 104.9 million in Imaging Center segment and $ 0.7 million in Digital Health segment), respectively.

NOTE 8 - CREDIT FACILITIES AND NOTES PAYABLE

As of December 31, 2023 and December 31, 2022 our term loan debt and other obligations consisted of the following (in thousands):

At December 31, 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 December 31, 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 (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.

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.

On November 26, 2024, we entered into Amendment No.

1 to the Barclays Credit Agreement (the “First Amendment”) with the Barclays Bank Plc and the lenders and financial institutions named therein.

Pursuant to the First Amendment, the interest rates on the term loans and revolving credit facility provided under the Restated Credit Agreement have been reduced by 0.25 %.

Total costs incurred in connection with the first amendment amounted to approximately $ 2.4 million segregated as follows:

$ 0.6 million recognized as discount, $ 1.8 million charged to loss on early extinguishment of debt and $ 0.1 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 to November 26, 2024 SOFR plus 2.5 %

Prime Rate plus 1.5 %

7.13 % (credit spread adjustment of 0.00 % )

After November 26, 2024 SOFR plus 2.25 %

Prime Rate plus 1.25 %

6.77 % (credit spread adjustment of 0.00 % )

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 $ 1.9 million at December 31, 2024.

After we entered the first amendment on November 26, 2024, amounts borrowed under the Barclays Revolving Credit Facility bear interest at either SOFR plus 2.75 % or the Prime Rate plus 1.8 % (with step-downs based on attainment of certain first lien net leverage ratio benchmarks).

As of December 31, 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 December 31, 2024.

After reserves of $ 7.6 million for certain letters of credit, $ 274.4 million was available to draw upon as of December 31, 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 (the "Truist Term Loan") and a $ 50.0 million revolving credit facility (the “Truist 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 SOFR or a Base Rate plus an applicable margin and fees which step down based on a leverage ratio.

At December 31, 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.

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 December

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 December 31, 2024.

With no letters of credit reserved against the facility, the full $ 50.0 million was available to draw upon as of December 31, 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 December 31, 2024 and 2023 our term loan debt and other obligations are as follows (in thousands):

December 31, 2024 December 31, 2023

1 unchanged sentence

Discount on Barclays Term Loans ( 12,929 ) ( 9,041 )

Truist Term Loan collateralized by NJIN's tangible and intangible assets 144,375 150,000

Discount on Truist Term Loan ( 990 ) ( 1,254 )

Equipment notes payable at 6.0 %, due 2028, collateralized by medical equipment

Truist Term Loan Agreement collateralized by NJIN's tangible and intangible assets 135,000 144,375

Discount on Truist Term Loan Agreement ( 726 ) ( 990 )

Revolving Credit Facilities — —

Equipment notes payable at 3.6 % to 7.2 %, due through 2029, collateralized by medical equipment

24,296 17,011

Total debt obligations 1,016,266 830,042

Less current portion ( 17,974 ) ( 12,400 )

current portion ( 24,692 ) ( 17,974 )

Long term portion of debt obligations $ 991,574 $ 812,068

1 unchanged sentence

2025 $ 27,025

Thereafter 826,875

Total notes payable obligations $ 1,029,921

We had no outstanding balance under our $ 195.0 million Barclays Revolving Credit Facility at December 31, 2023 and had reserved an additional $ 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 December 31, 2023.

We also had no balance under our $ 50.0 million Truist Revolving Credit Facility, related to our consolidated subsidiary NJIN, at December 31, 2023, and with no letters of credit reserved against the facility, the full amount was available to draw upon.

At December 31, 2023 we were in compliance with all covenants under our credit facilities.

On February 1, 2023, we issued a promissory note in the amount of $ 19.8 million to acquire radiology equipment previously leased under operating leases.

Amendments to Credit Facilities

First Amendment to Second Amended and Restated First Lien Credit and Guaranty Agreement

On March 27, 2023, we entered into the First Amendment to Second Amended and Restated First Lien Credit and Guaranty Agreement related to our Barclays credit facility (the "Barclays Amendment"), which replaces the interest rate benchmark, from the London Interbank Offered Rate ("LIBOR") to the Secured Overnight Financing Rate ("SOFR") and includes applicable credit spread adjustments of 0.11448 %, 0.26161 %, and 0.42826 % for interest periods of one month, three months, and six months, respectively.

The replacement of LIBOR with SOFR and the credit spread adjustments were effective as of March 31, 2023, which was the last day of the last-ending existing interest period of currently outstanding loan bearing interest at LIBOR.

Other than the foregoing, the material terms of the Barclays credit facility remained unchanged.

Second Amended and Restated First Lien Credit and Guaranty Agreement

On April 23, 2021, we entered into the Second Amended and Restated First Lien Credit and Guaranty Agreement (the "Barclays Restated Credit Agreement") which provides for $ 725.0 million of senior secured first lien term loans (the "Barclays Term Loans") and a $ 195.0 million senior secured revolving credit facility (the "Barclays Revolving Credit Facility").

The proceeds of the Barclays Term Loans were used to refinance loans outstanding under our prior Barclays credit agreement and provide funding for current and future operations.

Total costs of the Barclays Restated Credit Agreement amounted to approximately $ 14.9 million segregated as follows:

$ 8.8 million capitalized to discount and deferred finance cost, $ 4.5 million expensed to debt restructuring costs, $ 1.5 million charged to loss on early extinguishment of debt and $ 0.1 million written off to interest expense.

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

Second Amended and Restated Revolving Credit and Term Loan Agreement

On October 7, 2022, we entered into the Second Amended and Restated Revolving Credit and Term Loan Agreement (the "Truist Restated Credit Agreement") which provides for a $ 150.0 million of a secured term loan (the "Truist Term Loan") and a $ 50.0 million secured revolving credit facility (the "Truist Revolving Credit Facility").

Both loans were secured by our simultaneous entry into the Second Amended and Restated Guaranty and Security Agreement on the same date.

The proceeds were were used to refinance the outstanding balance under our prior Truist term loan agreement and provide funding for current and future operations.

Total costs of the Truist Restated Credit Agreement amounted to approximately $ 2.7 million segregated as follows:

$ 2.0 million capitalized to discount and deferred finance cost and $ 0.7 million expensed to loss on extinguishment of debt and related expenses in other expense.

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

All obligations under the Truist Restated Credit Agreement bear interest at either a SOFR or a Base Rate (each as defined in the Truist Restated Credit Agreement), plus an applicable margin according to the following schedule:

Pricing Level Leverage Ratio Applicable Margin for SOFR Loans Applicable Margin for Base Rate Loans Applicable Margin for Letter of Credit Fees Applicable Percentage for Commitment Fee

I Greater than or equal to 3.00 :1.00

II Less than 3.00 :1.00 but greater than or equal to 2.50 :1.00

III Less than 2.50 :1.00 but greater than or equal to

IV Less than 2.00 :1.00 but greater than or equal to 1.50 :1.00

V Less than 1.50 :1.00

Senior Credit Facilities:

Barclays Term Loans:

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

The applicable margin for Eurodollar Rate and Alternative Base Rate was 3 % and 2 %, respectively, with an effective Eurodollar Rate and the Alternative Base Rate of 4.63 % and 8.00 %, respectively.

Under the Barclays Amendment, effective March 31, 2023, the Barclays Term Loans bear interest either at a SOFR or Alternative Base Rate (in each such case, as defined in the Restated Barclays Credit Agreement) plus an applicable margin.

The applicable margin for Eurodollar Rate and Alternative Base Rate was 3 % and 2 %, respectively.

At December 31, 2023, we have an effective SOFR of 8.38 %, with an applicable credit spread adjustment of 0.26161 %, and an Alternative 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.

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 Pricing Level V described above.

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 Truist Restated Credit Agreement.

Revolving Credit Facilities:

Barclays Revolving Credit Facility:

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

Associated with the Barclays Revolving Credit Facility are deferred financing costs, net of accumulated amortization, of $ 1.1 million at December 31, 2023.

Revolving loans 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 Restated Credit Agreement) plus an applicable margin which adjusts depending on our net leverage ratio, according to the following schedule:

Net Leverage Ratio Term SOFR Loans Alternative Base Rate Spread

> 3.00 x but ≤ 3.50 x

As of December 31, 2023, the effective interest rate for borrowings on revolving loans under the Barclays Revolving Credit Facility was 10.3 %.

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 Restated 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 Revolving Credit Facility will terminate on April 23, 2026 unless otherwise accelerated in accordance with the terms of the Barclays Restated Credit Agreement.

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 December 31, 2023.

As of December 31, 2023, NJIN had no borrowings under the Truist Revolving Credit Facility.

The Truist Revolving Credit Facility bears interest with different margins based on types of borrowings at a Pricing Level V as noted in the pricing grid above.

The Truist Revolving Credit Facility terminates on the earliest of (i) October 7, 2027, (ii) the date on which the Revolving Commitments are terminated pursuant to Section 2.8 of the Truist Restated Credit Agreement, or (iii) the date on which all amounts outstanding under the Truist Restated Credit Agreement have been declared or have automatically become due and payable (whether by acceleration or otherwise).

Recent Amendments to prior Credit Facilities

Truist Credit Facilities:

On August 31, 2018, under an Amended and Restated Revolving Credit and Term Loan Agreement, our NJIN subsidiary secured a term loan commitment of $ 60.0 million and established revolving credit facility of $ 30.0 million.

The agreement had a maturity date of August 31, 2023 and was refinanced on October 10, 2022 by the Truist Restated Credit Agreement.

NOTE 9 – LEASES

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All leases are classified as operating or finance for accounting purposes, depending on the terms of the agreement.

Our incremental borrowing rate used to discount the stream of lease payments is closely related to the interest rates charged on our collateralized debt obligations and our incremental borrowing rate is adjusted when those rates experience a substantial change.

During 2021, we satisfied all liabilities classified as finance leases, and only operating leases remain.

Our incremental borrowing rate used to discount the stream of lease payments is closely related to the interest rates charged on our

collateralized debt obligations and our incremental borrowing rate is adjusted when those rates experience a substantial change.

Operating lease costs are recognized as cost of operation in the Consolidated Statement of Operations.

The components of lease expense were as follows:

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Operating cash flows from operating leases $ 103,215 $ 101,516 $ 108,004

Operating cash flows from financing leases — — 46

Financing cash flows from financing leases — — 3,304

Right-of-use & Equipment assets obtained in exchange for lease obligations:

20 unchanged sentences

2025 $ 102,111

2025 $ 92,092

Thereafter 536,087

6 unchanged sentences

For the years ended December 31, 2024, 2023 and 2022, we have the following income (loss) before income taxes (in thousands):

2023 2022 2021

US Domestic $ 60,704 $ 60,374

Foreign ( 15,842 ) ( 21,564 )

Income (loss) before income taxes $ 38,810 $ 42,969 $ 58,879

Income before income taxes $ 44,862 $ 38,810

For the years ended December 31, 2024, 2023 and 2022, we recognized income tax expense comprised of the following (in thousands):

2023 2022 2021

Federal current tax $ — $ —

5 unchanged sentences

Foreign deferred tax ( 674 ) ( 1,843 )

Currency translation — — —

Income tax expense 6,026 8,473

2 unchanged sentences

Years Ended December 31,

2023 2022 2021

Federal tax $ 9,416 $ 8,150

1 unchanged sentence

Other non deductible expenses 781 133

Stock-based compensation ( 2,367 ) 63

Officer compensation 1,435 1,199

14 unchanged sentences

Operating lease liability 138,842 136,097

Amortization of research and experimental expenditures 9,977 5,243

Equity compensation 3,813 4,179

Allowance for doubtful accounts 2,411 2,198

Limitation of business interest 16,083 9,515

Other 1,182 997

32 unchanged sentences

A reconciliation of the total gross amounts of unrecognized tax benefits for the years ended are as follows (in thousands):

2023 2022 2021

Balance at beginning of year $ 3,082 $ 4,144

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We do not anticipate the uncertain tax position to change materially within the next 12 months.

In 2021, the Organization for Economic Co-operation and Development ("OECD") announced an inclusive framework on base erosion and profit shifting including Pillar Two Model Rules defining the global minimum tax, which calls for taxation of large multinational corporations at a minimum rate of 15%.

Subsequently multiple sets of administrative guidance have been issued.

Many non-US tax jurisdictions have either recently enacted legislation to adopt certain components of Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years.

We are continuing to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the jurisdictions that we operate in outside of the US.

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act of 2022 was signed into law on August 9, 2022 to boost domestic semiconductor manufacturing and encourage US research activities.

The act provided a 25% investment credit intended to promote domestic production of semiconductors.

This act is not expected to have a material impact for us.

The Organization for Economic Co-operation and Development issued Pillar Two model rules for a global minimum tax of 15% effective January 1, 2024.

While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two.

Pillar Two had no impact on our 2024 ETR, and we do not currently expect Pillar Two to significantly impact our ETR going forward.

NOTE 11 – STOCK-BASED COMPENSATION

Stock Incentive Plans

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”).

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

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

We can issue options (incentive and nonstatutory), performance based options, stock awards (restricted or unrestricted), stock units, performance based stock units, and stock appreciation rights under the Restated Plan.

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

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.

Our stock-based compensation consists of various types of awards, each accounted for separately.

There is no overlap between Options, DeepHealth options, Restricted stock awards (RSAs) and Restricted stock units (RSUs), performance stock units (PSUs), and performance stock options (PSOs).

Certain options granted under the Restated Plan to employees are intended to qualify as incentive stock options under existing tax regulations.

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

The following summarizes all of our option transactions for the twelve months ended December 31, 2023:

The following summarizes all of our incentive stock option transactions for the year ended December 31, 2024:

Outstanding Options

4 unchanged sentences

Balance, December 31, 2023 911,411 $ 16.60

Granted 261,220 18.64

Exercised ( 70,494 ) 9.52

Canceled, forfeited or expired ( 16,000 ) 17.06

Balance, December 31, 2024 840,917 17.19 5.42 $ 44,272,405

4 unchanged sentences

During the second quarter of fiscal 2020, in connection with the completion of the DeepHealth acquisition, we granted 412,434 options 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 December 31, 2023, total unrecognized stock based compensation expense related to non-vested DeepHealth options was insignificant.

Outstanding Options

9 unchanged sentences

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.

Restricted Stock Awards (“RSA’s”)

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

As of December 31, 2023, we have issued a total of 8,718,185 RSA’s of which 537,358 were unvested at December 31, 2023.

The following summarizes all unvested RSA’s activities during the twelve months ended December 31, 2023:

RSA's Weighted-Average

Restricted Stock Awards (“RSA’s”) and Restricted Stock Units ("RSUs")

The Restated Plan permits the award of RSAs and RSUs.

The following summarizes all unvested RSA and RSU activities during for the year ended December 31, 2024:

RSA's & RSU's Weighted-Average

Term (Years) Weighted-Average

RSA's unvested at December 31, 2022 536,767 $ 23.84

RSA's and RSU's unvested at December 31, 2023 762,083 $ 22.13

Changes during the period

2 unchanged sentences

Forfeited ( 39,473 ) $ 25.28

RSA's unvested at December 31, 2023 537,358 0.90 $ 22.99

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

Other stock bonus awards

The Restated Plan also permits the award of stock bonuses not subject to any future service period.

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

During the twelve months ended December 31, 2023 we issued 50,765 shares relating to these awards, amounting to approximately $ 1.3 million of compensation expense.

RSA's and RSU's unvested at December 31, 2024 687,655 1.72 $ 35.31

We determine the fair value of all RSA’s and RSU's based on the closing price of our common stock on the grant date.

Performance based stock units ("PSUs")

In January 2022, we granted certain employees PSUs with a target award of 25,683 shares of our common stock.

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, 2022 through December 31, 2022.

In January of 2023, based on the performance condition achieved, the board of directors issued 12,843 units with a fair value of $ 29.44 per unit.

In January 2023, we granted certain employees PSUs with a target award of 60,685 shares of our common stock.

In January 2022, we granted certain employees PSUs with a target award of 25,683 shares of our common stock with a fair value of $ 29.44 .

As of December 31, 2023, 121,370 shares are expected to vest.

In January of 2023, based on the performance condition achieved, the board of directors issued 12,843 shares.

In January 2023, we granted certain employees PSUs with a target award of 60,685 shares of our common stock with a fair value of $ 18.64 .

The PSUs will vest in five 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 being achieved, the board of directors issued 121,370 shares.

In October 2024, we granted certain employees PSUs with a target award of 35,522 shares of our common stock.

The PSUs will vest in five equal parts, on each anniversary of 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 determined by the management no later than the seventh anniversary of the grant date.

As of December 31, 2024, based on the performance to date, all 35,522 shares are expected to vest.

Performance based stock options ("PSOs")

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

In January 2022, we granted certain employees PSOs to purchase a maximum of 111,925 shares of our common stock with a strike price of $ 29.44 .

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

In January of 2023, based on the performance condition achieved, the board of directors issued 27,981 options with a strike price of $ 29.44 per share.

In January 2023, we granted certain employees PSOs with a potential to purchase a maximum of 235,227 shares of our common stock.

In January of 2023, based on the performance condition achieved, the board of directors issued 27,981 options.

In January 2023, we granted certain employees PSOs with a potential to purchase a maximum of 235,227 shares of our common stock with a strike price of $ 18.64 .

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 by the board of directors over the period January 1, 2023 through December 31, 2023.

As of December 31, 2023, all 235,227 shares are expected to vest.

AI Long Term Incentive Plan shares ("AI LTIPs")

In addition, we issue stock-based compensation to certain employees in our AI segment in the form of Stock Units and Restricted Stock Awards, subject to certain restrictions.

The awards represent a form of long term incentive and are reflective of a general practice within the software industry.

The units and shares vest ratably over a two to four year period, conditioned on continued employment through the vesting periods.

We determine the fair value of all AI LTIPs based on the closing price of our common stock on the award date.

The following summarizes all unvested AI LTIPs activities during the twelve months ended December 31, 2023:

LTIPs Weighted-Average

Term (Years) Weighted-Average

LTIPs unvested at December 31, 2022 169,471 $ 19.56

Changes during the period

Granted 216,460 $ 20.24

Vested ( 66,309 ) $ 19.62

Forfeited or Canceled ( 94,897 ) $ 19.82

LTIPs unvested at December 31, 2023 224,725 2.73 $ 20.08

In March 2024, based on the performance condition being achieved, the board of directors issued 235,227 options.

In summary, of the 20,100,000 shares of common stock reserved for issuance under the Restated Plan at December 31, 2024, there remain 3,172,578 shares available for future issuance.

NOTE 12 – SUBSEQUENT EVENTS

Proposed acquisitions of imaging centers

On February 16, 2023, we acquired 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.

On February 1, 2024, we acquired Antelope Valley Outpatient Imaging Center, LLC for a purchase consideration of approximately $ 3.5 million.

Antelope Valley Outpatient Imaging consists of four multi modality imaging centers located in Palmdale, California.

On January 1, 2025, we acquired HALO Centers, LLC for a purchase consideration of approximately $ 4.2 million.

HALO Centers, LLC consists of one multi-modality imaging center located in California.

Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data