RadNet, Inc. 10-K

Item 8. Financial Statements and Supplementary Data 54 Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of RadNet, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of RadNet, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. 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, 2025, 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 2, 2026 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. 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. 55 Valuation of Accounts Receivable Description of the Matter For the year ended December 31, 2025, the Company’s accounts receivable was $200.3 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 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. How We 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 methodology, significant assumptions and inputs used in the determination of the estimated amount that would be collected for services rendered during the period. We also tested controls over the current and historical data used by management in determining this estimate, including the completeness and accuracy of the data. To test the estimated contractual allowances and implicit price concessions, we performed audit procedures that included, among others, assessing methodologies and evaluating the significant assumptions discussed above and testing the completeness and accuracy of the underlying data used by the Company in its estimates. We also assessed the historical accuracy of management’s estimates as a source of potential corroborative or contrary evidence. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2007. Los Angeles, California March 2, 2026 56 RADNET, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) As of December 31, 2025 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 767,215 $ 740,020 Accounts receivable, net 200,317 185,821 Due from affiliates 12,592 41,869 Prepaid expenses and other current assets 52,003 51,542 Total current assets 1,032,127 1,019,252 PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS Property and equipment, net 807,702 694,791 Operating lease right-of-use assets 690,250 639,740 Total property, equipment and right-of-use assets 1,497,952 1,334,531 OTHER ASSETS Goodwill 907,663 710,663 Other intangible assets 148,508 81,351 Deferred financing costs 1,684 2,265 Investment in joint ventures 130,340 104,057 Deposits and other 40,289 34,571 Total assets $ 3,758,563 $ 3,286,690 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable, accrued expenses and other $ 422,029 $ 351,464 Due to affiliates 70,104 43,650 Deferred revenue 7,272 3,288 Current portion of operating lease liability 61,934 56,618 Current portion of notes payable 25,424 24,692 Total current liabilities 586,763 479,712 LONG-TERM LIABILITIES Long-term operating lease liability 707,001 655,979 Notes payable, net of current portion 1,064,495 991,574 Deferred tax liability, net 21,903 22,230 Other non-current liabilities 22,515 3,785 Total liabilities 2,402,677 2,153,280 EQUITY RadNet, Inc. stockholders' equity: Common stock - $ .0001 par value, 200,000,000 shares authorized; 77,399,615 and 74,036,993 shares issued and outstanding at December 31, 2025 and 2024 respectively 8 7 Additional paid-in-capital 1,180,434 988,147 Accumulated other comprehensive income (loss) 4,885 ( 9,061 ) Accumulated deficit ( 95,437 ) ( 76,785 ) Total RadNet, Inc.'s stockholders' equity 1,089,890 902,308 Noncontrolling interests 265,996 231,102 Total equity 1,355,886 1,133,410 Total liabilities and equity $ 3,758,563 $ 3,286,690 The accompanying notes are an integral part of these financial statements. 57 RADNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) Years Ended December 31, 2025 2024 2023 REVENUE Service fee revenue $ 1,914,673 $ 1,693,089 1,463,197 Revenue under capitation arrangements 125,537 136,575 153,433 Total service revenue 2,040,210 1,829,664 1,616,630 OPERATING EXPENSES Cost of operations, excluding depreciation and amortization 1,804,725 1,580,549 1,395,239 Lease abandonment charges 8,563 2,478 5,146 Depreciation and amortization 152,127 137,838 128,391 Gain on contribution of imaging centers into joint venture — — ( 16,808 ) Loss on sale and disposal of equipment 9,658 2,276 2,187 Severance costs 3,145 1,902 3,778 Total operating expenses 1,978,218 1,725,043 1,517,933 INCOME FROM OPERATIONS 61,992 104,621 98,697 OTHER INCOME AND EXPENSES Interest expense 69,913 79,849 64,483 Equity in earnings of joint ventures ( 14,876 ) ( 14,472 ) ( 6,427 ) Non-cash change in fair value of interest rate swaps 7,112 8,006 8,185 Debt restructuring and extinguishment expenses — 11,292 — Other income ( 32,066 ) ( 24,916 ) ( 6,354 ) Total other expenses, net 30,083 59,759 59,887 INCOME BEFORE INCOME TAXES 31,909 44,862 38,810 Provision for income taxes ( 14,862 ) ( 6,026 ) ( 8,473 ) NET INCOME 17,047 38,836 30,337 Net income attributable to noncontrolling interest 35,699 36,043 27,293 NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS $ ( 18,652 ) $ 2,793 $ 3,044 BASIC NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS $ ( 0.25 ) $ 0.04 $ 0.05 DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS $ ( 0.25 ) $ 0.04 $ 0.05 WEIGHTED AVERAGE SHARES OUTSTANDING Basic 75,189,872 73,037,237 63,580,059 Diluted 75,189,872 74,762,332 64,658,299 The accompanying notes are an integral part of these financial statements. 58 RADNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (IN THOUSANDS) Years Ended December 31, 2025 2024 2023 NET INCOME $ 17,047 $ 38,836 $ 30,337 Currency translation adjustments 13,081 ( 5,929 ) 4,617 Change in fair value of cash flow hedge from prior periods reclassified to earnings 2,273 9,352 3,576 COMPREHENSIVE INCOME 32,401 42,259 38,530 Less comprehensive income attributable to noncontrolling interests 35,699 36,043 27,293 Less foreign currency translation adjustments 1,408 — — COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS $ ( 4,706 ) $ 6,216 $ 11,237 The accompanying notes are an integral part of these financial statements. 59 RADNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (IN THOUSANDS EXCEPT SHARE DATA) Common Stock Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total RadNet, Inc.'s Equity Noncontrolling Interests Total Equity BALANCE - December 31, 2022 57,723,125 $ 6 $ 436,288 $ ( 20,677 ) $ ( 82,622 ) $ 332,995 $ 158,457 $ 491,452 Issuance of common stock upon exercise of options 12,424 — 142 — — 142 — 142 Issuance of common stock under the equity compensation plan 1,166,362 — — — — — — — Stock-based compensation expense — — 26,785 — — 26,785 — 26,785 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 ) 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 common stock upon exercise of options 70,793 — 667 — — 667 — 667 Issuance of common stock under the equity compensation plan 730,189 — — — — — — — Stock-based compensation expense — — 29,986 — — 29,986 — 29,986 Issuance of common stock, net of issuance costs 5,232,500 — 218,385 — — 218,385 — 218,385 Forfeiture of restricted stock ( 47,826 ) — ( 153 ) — — ( 153 ) — ( 153 ) Distributions paid to noncontrolling interests — — — — — — ( 4,522 ) ( 4,522 ) 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 60 Issuance of common stock upon exercise of options 334,780 1 5,449 — — 5,450 — 5,450 Issuance of common stock under the equity compensation plan 1,101,879 — — — — — — — Stock-based compensation expense — — 54,834 — — 54,834 — 54,834 Forfeiture of restricted stock ( 9,306 ) — ( 233 ) — — ( 233 ) — ( 233 ) Distributions paid to noncontrolling interests — — — — — — ( 4,602 ) ( 4,602 ) Contributions from noncontrolling interests — — — — — — 2,389 2,389 Issuance of common stock in connection with acquisitions 1,935,269 — 132,237 — — 132,237 — 132,237 Change in cumulative currency translation adjustment — — — 11,673 — 11,673 1,408 13,081 Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes — — — 2,273 — 2,273 — 2,273 Net (loss) income — — — — ( 18,652 ) ( 18,652 ) 35,699 17,047 BALANCE - December 31, 2025 77,399,615 $ 8 $ 1,180,434 $ 4,885 $ ( 95,437 ) $ 1,089,890 $ 265,996 $ 1,355,886 The accompanying notes are an integral part of these financial statements. 61 RADNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) Years Ended December 31, 2025 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 17,047 $ 38,836 $ 30,337 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 152,127 137,838 128,391 Non-cash lease expense 59,867 60,552 61,102 Equity in earnings of joint ventures, net of dividend ( 5,803 ) ( 9,926 ) 9,176 Amortization of deferred financing costs and loan discount 3,014 3,093 2,987 Loss on sale and disposal of equipment 9,658 2,276 2,187 Loss on extinguishment of debt — 3,903 — Gain on contribution of imaging centers into joint venture — — ( 16,808 ) Lease abandonment charges 8,563 2,478 5,146 Amortization of cash flow hedge 2,273 9,352 3,576 Non-cash change in fair value of interest rate swaps 7,112 8,006 8,185 Stock-based compensation 54,601 29,833 26,785 Loss on impairment — 1,275 3,949 Change in fair value of contingent consideration 111 1,995 ( 3,880 ) Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions: Accounts receivable ( 9,560 ) ( 21,767 ) 2,650 Other current assets 2,279 ( 32,790 ) ( 8,441 ) Other assets ( 5,710 ) 10,723 ( 1,484 ) Deferred taxes 10,828 6,454 6,056 Operating lease liability ( 62,816 ) ( 54,866 ) ( 54,763 ) Deferred revenue 2,813 ( 1,359 ) 626 Accounts payable, accrued expenses and other 52,416 37,117 15,086 Net cash provided by operating activities 298,820 233,023 220,863 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of imaging facilities and other acquisitions, net of cash acquired ( 133,422 ) ( 43,661 ) ( 10,918 ) Purchase of property and equipment ( 213,251 ) ( 188,070 ) ( 176,600 ) Proceeds from sale of equipment 1,288 157 83 Equity contributions in existing and purchase of interest in joint ventures ( 4,147 ) ( 1,496 ) ( 14,035 ) Collection of notes receivable 5,667 — — Net cash used in investing activities ( 343,865 ) ( 233,070 ) ( 201,470 ) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes and leases payable ( 7,025 ) ( 5,989 ) ( 2,930 ) Payments on term loan debt ( 20,756 ) ( 692,437 ) ( 41,063 ) Proceeds from issuance of debt, net of issuance costs 99,001 863,757 — Sale of noncontrolling interests 2,389 22,357 5,121 Payments of contingent consideration and holdbacks ( 2,249 ) ( 4,268 ) ( 5,495 ) Distributions paid to noncontrolling interests ( 4,602 ) ( 4,522 ) ( 5,972 ) Proceeds from issuance of common stock — 218,385 245,832 Proceeds from issuance of common stock upon exercise of options 5,449 667 142 Net cash provided by financing activities 72,207 397,950 195,635 EFFECT OF EXCHANGE RATE CHANGES ON CASH 33 ( 453 ) ( 292 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 27,195 397,450 214,736 CASH AND CASH EQUIVALENTS, beginning of period 740,020 342,570 127,834 CASH AND CASH EQUIVALENTS, end of period $ 767,215 $ 740,020 $ 342,570 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid during the period for interest $ 72,266 $ 84,601 $ 64,695 The accompanying notes are an integral part of these financial statements. RADNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Supplemental Schedule of Non-Cash Investing and Financing Activities We acquired equipment and certain leasehold improvements for approximately $ 91.9 million, $ 65.6 million, and $ 67.7 million during the years ended December 31, 2025, 2024 and 2023, respectively, that we had not paid for as of December 31, 2025, 2024 and 2023, respectively. The accrual for such amounts is included in our consolidated balance sheets under accounts payable, accrued expenses and other. During the year ended 2025, we acquired certain assets from entities engaged in the practice of radiology or related businesses. These acquisitions included holdbacks and other liabilities totaling $ 36.0 million that we had not paid for as of December 31, 2025. The accrued amounts are reflected in our consolidated balance sheets under accrued expenses and other non-current liabilities. During the year ended 2025, we recognized equity consideration as non-cash investing activities in connection with certain business acquisitions. The aggregate fair value of the equity consideration recognized, including shares issued and shares to be issued and recorded in additional paid-in capital, was $ 132.2 million. During the year ended 2025, we made a deemed contribution to a joint venture of approximately $ 16.3 million, which resulted in a corresponding decrease in due from affiliates. On June 12, 2025, we entered into a $ 17.0 million promissory note with Dignity Health, a related party and joint venture member of Arizona Diagnostic Radiology Group, LLC, which formalized amounts previously recorded as due from affiliates. The issuance of the note was a noncash transaction and resulted in a reclassification of the outstanding balance. 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. The shares were ascribed a value of $ 2.3 million. On September 20, 2023, we issued 56,600 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 $ 1.6 million. On September 1, 2023, we made a contribution of a business with a fair value of $ 27.2 million to our Santa Monica Imaging Group, LLC joint venture. On July 7, 2023, we issued 113,303 shares of common stock to settle the stock holdback contingent liabilities as part of our purchase of Quantib B.V.. The shares were ascribed a value of $ 3.5 million. On April 13, 2023, we issued 144,227 shares of common stock to settle the general holdback contingent liabilities as part of our purchase of Aidence Holding B.V.. The shares were ascribed a value of $ 4.0 million. 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. 62 RADNET, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – NATURE OF BUSINESS We are a national provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States. At December 31, 2025, we operated directly or indirectly through hospital and health system joint ventures, 418 centers located in Arizona, California, Delaware, Florida, Maryland, Virginia, New Jersey, New York, and Texas. Our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders. Our services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures. The vast majority of our centers offer multi-modality imaging services. Our multi-modality strategy diversifies revenue streams, reduces exposure to reimbursement changes and provides patients and referring physicians one location to serve the needs of multiple procedures. In 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 Digital Health. For further financial information about these segments, see Note 5, Segment Reporting. 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. 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. The consolidated financial statements include the accounts of RadNet, Inc. as well as its subsidiaries in which RadNet has a controlling financial interest. The consolidated financial statements also include certain variable interest entities in which we are the primary beneficiary (as described in more detail below). All material intercompany transactions and balances have been eliminated upon consolidation. All of these affiliated entities are referred to collectively as “RadNet”, “we”, “us”, “our” or the “Company” in this report. 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 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. The variable interest holder who has both of the following has the controlling financial interest and is the primary beneficiary: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. In performing our analysis, we consider all relevant facts and circumstances, including: 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 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, Maryland, New Jersey 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 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 63 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 Consolidated Medical Group on a combined basis recognized $ 262.8 million, $ 221.1 million, and $ 205.6 million of revenue, net of management services fees to RadNet, for the years ended December 31, 2025, 2024, and 2023, respectively and $ 262.8 million, $ 221.1 million, and $ 205.6 million of operating expenses for the years ended December 31, 2025, 2024, and 2023, respectively. RadNet, Inc. recognized $ 925.0 million, $ 928.1 million, and $ 849.4 million of total billed net service fee revenue for the years ended December 31, 2025, 2024, and 2023, 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, 2025 and December 31, 2024, we have included approximately $ 137.5 million and $ 103.0 million, respectively, of accounts receivable and approximately $ 34.9 million and $ 22.7 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. 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. Through our management agreements, we make available to the medical groups the imaging centers, including all furniture, fixtures and medical equipment therein. The medical groups are compensated for their services from the professional component of the global net service fee revenue and after deducting management service fees paid to us, we have no economic controlling interest in these medical groups. As such, the financial results of these groups are not consolidated in our financial statements. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION – The operating activities of subsidiaries are included in the accompanying consolidated financial statements (“financial statements”) from the date of acquisition. Investments in companies in which we have the ability to exercise significant influence, but not control, are accounted for by the equity method. All intercompany transactions and balances have been eliminated in consolidation. 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. generally accepted accounting principles ("GAAP"), which requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters, including our reported amounts of assets and liabilities in our consolidated balance sheets at the dates of the financial statements; our disclosure of contingent assets and liabilities at the dates of the financial statements; and our reported amounts of revenues and expenses in our consolidated statements of operations during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates. REVENUES – Our revenues generally relate to net patient fees received from various payors and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period when our obligations to provide diagnostic services are satisfied. 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 ( 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 Consolidated Medical Group, this service fee revenue includes payments for both the professional medical interpretation revenue recognized by the Consolidated Medical Group as well as the payment for all other aspects related to our providing the imaging services, for which we earn management fees. As it relates to other centers, this service fee 64 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, digital health support services 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. Revenues related to uninsured patients and co-payment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect. Under capitation arrangements with various health plans, we earn a per-enrollee amount each month for making available diagnostic imaging services to all plan enrollees under the capitation arrangement. 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 revenues for the years ended December 31, 2025, 2024, and 2023 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 2025 2024 2023 Commercial insurance $ 1,130,114 $ 1,018,327 $ 879,792 Medicare 476,987 410,072 356,506 Medicaid 51,736 44,736 42,302 Workers' compensation/personal injury 44,700 43,666 46,406 Other payors 118,599 104,888 87,675 Management fee revenue 27,516 24,676 17,936 Other revenue 65,021 46,724 32,580 Revenue under capitation arrangements 125,537 136,575 153,433 Total revenue $ 2,040,210 $ 1,829,664 $ 1,616,630 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 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. These transactions are accounted for as a reduction in accounts receivable as the agreements transfer effective control over and risk related to the receivables to the buyers. Proceeds on factoring agreements 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 $ 3.5 million and $ 4.2 million at December 31, 2025 and 2024, 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. ACCOUNTS PAYABLE AND ACCRUED EXPENSES - Accounts payable and accrued expenses were comprised of the following (in thousands): 65 December 31, 2025 2024 Accounts payable $ 153,234 $ 96,450 Accrued expenses 154,991 153,252 Accrued salary and benefits 74,009 68,242 Accrued professional fees 39,795 33,520 Total $ 422,029 $ 351,464 SOFTWARE REVENUE RECOGNITION – We have developed and sell Picture Archiving Communications Systems (“PACS”) and related services. The PACS sales are made primarily through our sales force and generally include hardware, software, installation, training and first-year warranty support. Hardware, which is not unique or special purpose, is purchased from a third-party and resold to customers with a small mark-up. We have determined that our core software products, such as PACS, are essential to most of our arrangements as hardware, software and related services are sold as an integrated package. 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, 2025, 2024, and 2023, we recorded approximately $ 39.3 million, $ 27.8 million, and $ 20.2 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, 2025 we had deferred revenue of approximately $ 0.8 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 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. CONCENTRATION OF CREDIT RISKS – Financial instruments that potentially subject us to credit risk are primarily cash equivalents and accounts receivable. We have placed our cash and cash equivalents with one major financial institution. The cash in the financial institution is in excess of the amount insured by the Federal Deposit Insurance Corporation, or FDIC. 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 credit losses based upon our historical collection experience. In addition, we have notes receivable stemming from our factoring of accounts receivable as stated above. CASH AND CASH EQUIVALENTS – We consider all highly liquid investments that mature in three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates the fair market value. DEFERRED FINANCING COSTS – Costs of financing are deferred and amortized using the effective interest rate method. Deferred financing costs are related to our revolving credit facilities. Deferred financing costs, net of accumulated amortization, were $ 1.7 million and $ 2.3 million as of December 31, 2025 and 2024, 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 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. BUSINESS COMBINATIONS – When the qualifications for business combination accounting treatment are met, it requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. 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. 66 Acquisition-related costs are expensed as incurred and are included in Cost of operations, excluding depreciation and amortization, in the consolidated statements of operations. During the years ended 2025, 2024, and 2023, such cost totaled approximately $ 7.4 million, $ 0.9 million, and $ 0.2 million, respectively, GOODWILL AND INDEFINITE LIVED INTANGIBLES – Goodwill totaled $ 907.7 million and $ 710.7 million at December 31, 2025 and 2024, respectively. Indefinite lived intangible assets were $ 18.5 million at December 31, 2025 and $ 13.0 million at 2024 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. 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. If multiple valuation methodologies are used, the results are weighted appropriately. We tested goodwill, trade name and IPR&D for impairment on October 1, 2025. The estimated fair value of the IPR&D intangible asset was determined using the multi-period excess earnings method, while the estimated fair value of the tradename was determined using the relief-from-royalty method, each under the income approach. Our annual impairment test as of October 1, 2025 noted no impairment, and we have not identified any indicators of impairment through December 31, 2025. 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 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. For the years ended December 31, 2025, 2024 and 2023, we recorded lease abandonment of $ 1.9 million, $ 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. Other than this, we determined that there were no events or changes in circumstances that indicated our long-lived assets were impaired during any periods presented. INCOME TAXES – Income tax expense is computed using an asset and liability method and using expected annual effective tax rates. Under this method, deferred income tax assets and liabilities result from temporary differences in the financial reporting bases and the income tax reporting bases of assets and liabilities. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized. When it appears more likely than not that deferred taxes will not be realized, a valuation allowance is recorded to reduce the deferred tax asset to its estimated realizable value. For net deferred tax assets we consider estimates of future taxable income in determining whether our net deferred tax assets are more likely than not to be realized. See Note 10, Income Taxes, for more information. LEASES - We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long term operating lease liability in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. We include options to extend a lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For a contract in which we are a lessee that contains fixed payments for both lease and non-lease components, we have elected to account for the components as a single lease component, as permitted. ROU assets are tested for impairment if circumstances suggest that the carrying amount may not be recoverable. No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of December 31, 2025. 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. Our equipment leases are covered by warranty and service contracts which cover repairs and provide regular maintenance to keep the equipment in functioning order. 67 We closely monitor patient levels at our imaging centers and occasionally divest or shut down centers to maximize utilization rates. We may abandon low utilization leases and divert the patients to nearby centers. During the years ended 2025 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 $ 8.6 million, $ 2.5 million and $ 5.1 million for the year ended December 31, 2025, 2024 and 2023, respectively, in our Imaging Center segment. Of these amounts, $ 6.7 million, $ 1.8 million and $ 2.7 million were related to right-of-use assets impairment and $ 1.9 million, $ 0.7 million, and $ 2.5 million were related to the write-off of leasehold improvements for the years ending December 31, 2025, 2024 and 2023, respectively. UNINSURED RISKS – We maintain a high-deductible workers’ compensation insurance policy. We have recorded liabilities of $ 7.0 million and $ 5.6 million at December 31, 2025 and 2024, 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 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, 2025, 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. We have recorded liabilities as of December 31, 2025 and 2024 of $ 9.9 million and $ 7.8 million, respectively, for the estimated future cash obligations associated with the unpaid portion of the medical and dental claims incurred by our participants. Additionally, we entered into an agreement with Blue Shield for a stop loss policy that provides coverage for any claims that exceed $ 250,000 up to a maximum of $ 1.0 million in order for us to limit our exposure for unusual or catastrophic claims. EMPLOYEE BENEFIT PLAN – We adopted a profit-sharing/savings plan pursuant to Section 401(k) of the Internal Revenue Code that covers substantially all non-professional employees. Eligible employees may contribute on a tax-deferred basis a percentage of compensation, up to the maximum allowable under tax law. Employee contributions vest immediately. 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 $ 3.9 million and $ 3.6 million in matching for the years ended December 31, 2025 and 2024. 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”). The Restated Plan was most recently approved by our stockholders at our annual stockholders meeting on June 7, 2023. We have reserved 20,100,000 shares of common stock for issuance under the Restated Plan which can be issued in the form of incentive and/or nonstatutory stock options, restricted and/or unrestricted stock, stock units, and stock appreciation rights. Terms and conditions of awards can be direct grants or based on achieving a performance metric. We evaluate performance-based awards to determine if it is probable that the vesting conditions will be met. We also consider probability of achievement of performance conditions when determining expense recognition. For the awards where vesting is probable, equity-based compensation is recognized over the related vesting period. 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. Those models require that our management make certain estimates concerning risk free interest rates and volatility in the trading price of our common stock. The compensation expense recognized for all equity-based awards is recognized over the awards’ service periods. Equity-based compensation is classified in operating expenses within the same line item as the majority of the cash compensation paid to employees. In connection with our acquisition of DeepHealth Inc. on June 1, 2020, we assumed the DeepHealth, Inc. 2017 Equity Incentive Plan( the "DeepHealth" plan, including outstanding options awards that can be exercised for our common stock. No additional awards will be granted under the DeepHealth, Inc. 2017 Equity Incentive Plan. In connection with our acquisition of iCAD, Inc. on July 17, 2025, we assumed the iCAD, Inc. 2016 Stock Incentive Plan, as amended, and the iCAD, Inc. 2012 Stock Incentive Plan, as amended by Amendment No. 1 (collectively, the “iCAD Plans”), including outstanding option awards that became exercisable for shares of our common stock. No additional awards will be granted under the iCAD Plans. See Note 11, Stock-Based Compensation, for more information. 68 FOREIGN CURRENCY TRANSLATION – For our operations in Canada, Europe, Australia and the United Kingdom, the functional currency of our foreign subsidiaries is the local currency. Assets and liabilities denominated in foreign currencies are translated using the exchange rate at the balance sheet dates. 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 loss. Gains and losses related to the foreign currency portion of international transactions are included in the determination of net income. The following is a reconciliation of Foreign Currency Translation amounts for the years ended December 31, 2025, 2024 and 2023 is provided below (in thousands): Currency Translation Balance as of December 31, 2022 $ ( 4,385 ) Currency Translation Adjustments 4,617 Balance as of December 31, 2023 232 Currency Translation Adjustments ( 5,929 ) Balance as of December 31, 2024 ( 5,697 ) Currency Translation Adjustments 13,081 Balance as of December 31, 2025 $ 7,384 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, 2025, 2024, and 2023 are included in the consolidated statements of comprehensive income. INTEREST ON SECURITIES - We recognized income from interest on securities of approximately $ 31.9 million and $ 31.4 million for the year ended December 31, 2025 and 2024, 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. With respect to these matters, we evaluate the developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated. Based on current information, we do not believe that reasonably possible or probable losses associated with pending legal proceedings would either individually or in the aggregate, have a material adverse effect on our business and consolidated financial statements. However, the outcome of these matters is inherently uncertain. Therefore, if one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected. DERIVATIVE INSTRUMENTS 2019 swaps : In the second quarter of 2019, we entered into four forward interest rate agreements ("2019 swaps"). The 2019 swaps have total notional amounts of $ 500,000,000 , consisting of two agreements of $ 50,000,000 each and two agreements of $ 200,000,000 each. The 2019 swaps secured a constant interest rate associated with portions of our variable rate bank debt and had an effective date of October 13, 2020. They matured in October 2023 for the two smaller notional swaps and in October 2025 for the two larger notional swaps. 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. At inception, we designated our 2019 Swaps as cash flow hedges of floating-rate borrowings. In accordance with accounting guidance, derivatives that have been designated and qualify as cash flow hedging instruments are reported at fair value. 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 loss in the consolidated statement of equity. The remaining gain or loss, if any, is recognized in earnings. Effective July 1, 2020, it was determined that hedge accounting no longer applied and accordingly after that date all changes in the fair value of the swaps is recognized in earnings. 69 A tabular presentation of the effect of derivative instruments on our other comprehensive income of the 2019 Swaps which were ineffective is as follows (amounts in thousands): For the years ended Account Beginning Balance Amount of other 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, 2025 Accumulated Other Comprehensive Loss, net of taxes $ ( 2,273 ) $ — $ 2,273 $ — 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 ) *Net of taxes of $ 0.7 million, $ 3.0 million and $ 1.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps is as follows (amounts in thousands): 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, 2025 $ 7,112 Non-cash change in fair value of interest rate swaps $( 2,273 ) $ 7,932 Interest Expense 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 Net receipts (payments) associated with swap are reported as operating activities in the statement of cash flows. CONTINGENT CONSIDERATION 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 centered on lung cancer screening. 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 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. A new submission would be required; and therefore, the probability of the milestones being achieved became zero. 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. Quantib B.V. On January 20, 2022, we completed our acquisition of all the equity interests of Quantib B.V. ("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. In addition, there is a general holdback of $ 1.6 million to be 70 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. Montclair. 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 . 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 a cash holdback of $ 0.6 million to be issued 24 months after acquisition subject to adjustment for any indemnification claims. The contingent consideration is determined by the achievement of a specific number of physician reads. On September 20, 2023, we settled a milestone contingent liability by issuing 56,600 shares of our common stock at an ascribed value of $ 1.6 million and cash of $ 1.8 million. 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. See-Mode Technologies Pte. Ltd. On June 2, 2025, we, through our wholly owned subsidiary DH AI International Holdings, B.V., completed our acquisition of all the equity interests of See-Mode Technologies Pte. Ltd., a Singapore-based AI company specializing in medical imaging. As part of the purchase agreement, we agreed to pay up to $ 12.7 million in contingent consideration in RadNet common stock and cash, based on the achievement of three clinical and regulatory milestones: First Milestone ($ 4.3 million): Payable upon successful implementation of the company’s thyroid ultrasound detection product at four RadNet imaging centers, and execution of at least two new customer contracts totaling $ 150,000 in aggregate annual contract value by March 31, 2026. On November 3, 2025, we settled the first milestone by issuing 27,673 shares of our common stock at an ascribed value of $ 2.1 million and $ 2.2 million in cash. Second Milestone ($ 4.2 million): Payable upon FDA 510(k) clearance of the company’s breast ultrasound detection product, with submission required by March 31, 2026 and approval by December 31, 2026. Third Milestone ($ 4.2 million): Payable upon FDA 510(k) clearance of a new ultrasound product, with submission required by June 30, 2027 and approval by March 31, 2028. Each contingent amount is payable 50 % in cash and 50 % in RadNet common shares. As of December 31, 2025, the fair value of the contingent consideration is assessed quarterly based on the probability of milestone achievement, which as of the acquisition date was determined by management to be 80 % and 50 % for the Second and Third Milestone, respectively. Kolb Radiology P.C. On July 1, 2025, we completed the acquisition of substantially all the assets of Kolb Radiology P.C., a New York-based diagnostic imaging practice. As part of the purchase agreement, we agreed to pay up to $ 8.0 million in contingent consideration (“Earnout Consideration”) payable based on the financial performance of the acquired business over three consecutive twelve-month periods following the closing date. The fair value of the contingent consideration was estimated at $ 4.5 million at the acquisition date using a Monte Carlo simulation under a risk-neutral framework that modeled projected MRI revenues and discounted expected payments at term-matched U.S. Treasury rates plus RadNet’s credit spread. Key assumptions included a 2.3 % revenue risk premium, 15 % revenue volatility, 50 % operational leverage ratio, and 2.3 % credit spread. CIMAR UK Limited 71 On November 10, 2025, the Company completed the acquisition of CIMAR (UK) Limited. The purchase agreement includes contingent consideration payable based on the achievement of specified recurring revenue targets. The contingent consideration provides for aggregate payments of up to approximately $ 15.1 million and includes two performance-based milestones tied to recurring revenue generated during measurement periods between 2026 and 2028. Each milestone becomes payable only if at least 90 % of the applicable revenue target is achieved, with payments proportionately reduced for achievement between 90 % and 100 % of the target. Any contingent consideration earned is payable 50 % in cash and 50 % in RadNet common stock. At the acquisition date, the Company recorded a contingent consideration liability of approximately $ 5.7 million, which relates solely to the first performance-based milestone. The second milestone was assigned a fair value of zero at the acquisition date. The fair value of the contingent consideration was estimated at the acquisition date using a Monte Carlo simulation under a risk-neutral framework that projected revenue-based performance milestones, R&D Deferred Consideration, and discounted expected payments at term-matched U.S. Treasury rates plus RadNet's credit spread. Key assumptions included a 2.5 % revenue risk premium, 30 % revenue volatility, 60 % operational leverage ratio, and 2.6 % credit spread. The contingent consideration liability is remeasured at fair value each reporting period, with changes in fair value recognized in earnings. As of December 31, 2025, the contingent consideration liability related to the CIMAR acquisition was approximately $ 5.8 million. A tabular roll-forward of contingent consideration is as follows (amounts in thousands): For the year ended December 31, 2025 Entity Account January 1, 2025 Balance Additions Settlement of Contingent Consideration Change in Valuation of Contingent Consideration December 31, 2025 Balance See-Mode Technologies Pte. Ltd. Accrued expenses and other non-current liabilities $ — 8,966 ( 4,348 ) 711 $ 5,329 Kolb Radiology P.C. Accrued expenses and other non-current liabilities $ — 4,500 — ( 600 ) $ 3,900 CIMAR UK Limited Accrued expenses and other non-current liabilities $ — 5,753 — — $ 5,753 For the year ended December 31, 2024 Entity Account January 1, 2024 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 $ — 72 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 Aidence Other Long Term Liabilities $ 7,158 $ — $ ( 7,158 ) $ — $ — Quantib Accrued Expenses & Other Long Term Liabilities $ 2,134 $ ( 3,535 ) $ 1,401 $ — $ — Montclair Accrued Expenses $ 1,200 $ — $ ( 1,200 ) $ — $ — Heart & Lung Limited Accrued Expenses & Other Long Term Liabilities $ 11,053 $ ( 7,854 ) $ 2,476 $ 567 $ 6,242 FAIR VALUE MEASUREMENTS – Assets and liabilities subject to fair value measurements are required to be disclosed within a fair value hierarchy. The fair value hierarchy ranks the quality and reliability of inputs used to determine fair value. Accordingly, assets and liabilities carried at, or permitted to be carried at, fair value are classified within the fair value hierarchy in one of the following categories based on the lowest level input that is significant to a fair value measurement: Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for identical assets and liabilities. Level 2—Fair value is determined by using inputs other than Level 1 quoted prices that are directly or indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in valuation or other pricing models such as interest rates and yield curves that can be corroborated by observable market data. Level 3—Fair value is determined by using inputs that are unobservable and not corroborated by market data. Use of these inputs involves significant and subjective judgment. Derivatives: The table below summarizes the estimated fair values of certain of our financial assets that are subject to fair value measurements, and the classification of these assets in our consolidated balance sheets, as follows (in thousands): As of December 31, 2024 Level 1 Level 2 Level 3 Total Other Current Assets 2019 SWAPS - Interest Rate Contracts $ — $ 7,112 $ — $ 7,112 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 2024. respectively. The forward SOFR curve and forward LIBOR curve are readily available in the public markets or can be derived from information available in the public markets. Contingent Consideration: 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): 73 As of December 31, 2025 Level 1 Level 2 Level 3 Total Accrued expenses and other non-current liabilities See-Mode Technologies Pte. Ltd. $ — $ — $ 5,329 $ 5,329 Kolb Radiology P.C. — — 3,900 3,900 CIMAR UK Limited — — 5,753 5,753 Long Term Debt The table below summarizes the estimated fair value and carrying amount of our Barclays Term Loans and Truist Term Loan long-term debt as follows (in thousands): As of December 31, 2025 Level 1 Level 2 Level 3 Total Fair Value Total Face Value Barclays Term Loans and Truist Term Loan $ — $ 1,087,272 $ — $ 1,087,272 $ 1,084,869 As of December 31, 2024 Level 1 Level 2 Level 3 Total Fair Value Total Face Value Barclays Term Loans and Truist Term Loan $ — $ 1,006,713 $ — $ 1,006,713 $ 1,005,625 Our Barclays Revolving Credit Facility had no aggregate principal amount outstanding as of December 31, 2025 and 2024, respectively. Our Truist Revolving Credit Facility had no aggregate principal amount outstanding as of December 31, 2025 and 2024, 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. Level 2 inputs primarily relate to comparable market prices. 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 notes payable to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates. 74 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): Years Ended December 31, 2025 2024 2023 Net (loss) income attributable to RadNet, Inc. common stockholders $ ( 18,652 ) $ 2,793 $ 3,044 BASIC NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS Weighted average number of common shares outstanding during the period 75,189,872 73,037,237 63,580,059 Basic net (loss) income per share attributable to RadNet, Inc. common stockholders $ ( 0.25 ) $ 0.04 $ 0.05 DILUTED NET (LOSS) INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS Weighted average number of common shares outstanding during the period 75,189,872 73,037,237 63,580,059 Add nonvested restricted stock subject only to service vesting — 296,849 202,995 Add additional shares issuable upon exercise of stock options, warrants and holdback shares — 1,428,246 875,245 Weighted average number of common shares used in calculating diluted net income per share 75,189,872 74,762,332 64,658,299 Net (loss) income attributable to RadNet, Inc's common stockholders for diluted share calculation $ ( 18,652 ) $ 2,793 $ 3,044 Diluted net (loss) income per share attributable to RadNet, Inc. common stockholders $ ( 0.25 ) $ 0.04 $ 0.05 Stock options and non-vested restricted awards excluded from the computation of diluted per share amounts as their effect would be antidilutive: Nonvested restricted stock subject to service vesting 920,249 — — Shares issuable upon the exercise of stock options 849,518 — 754,131 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, 2025, we have five equity investments with an aggregate carry value of $ 10.8 million. No observable price changes or impairments in our investments were identified in the year ended December 31, 2025, 2024, and 2023, 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 75 centers. Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture. Our investment in these joint ventures is accounted for under the equity method, as we do not have a controlling financial interest in such ventures. We evaluate our investment in joint ventures, including cost in excess of book value (equity method goodwill) for impairment whenever indicators of impairment exist. No indicators of impairment existed as of December 31, 2025. The table below summarizes our ownership interest in these joint ventures as of December 31, 2025: 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 % Mt. 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, 2025 and 2024 (in thousands): Balance as of December 31, 2023 $ 92,710 Equity in earnings in these joint ventures 14,472 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 Equity in earnings in these joint ventures 14,876 Distribution of earnings ( 9,073 ) Equity contributions in existing and purchase of interest in joint ventures 20,480 Balance as of December 31, 2025 $ 130,340 We charged management service fees from the imaging centers underlying these joint ventures of approximately $ 26.0 million, $ 24.1 million, and $ 17.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. As we have the ability to exercise significant influence over our joint venture entities, we consider them related parties. Amounts transacted between ourselves and the entities in the ordinary course of business are disclosed on our balance sheet in the due from/to affiliate accounts. 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. 76 The following table is a summary of key financial data for these joint ventures as of December 31, 2025 and 2024, respectively, and for the years ended December 31, 2025, 2024 and 2023, respectively, (in thousands): December 31, Balance Sheet Data: 2025 2024 Current assets $ 79,220 $ 61,158 Noncurrent assets 227,447 232,750 Current liabilities ( 10,682 ) ( 53,182 ) Noncurrent liabilities ( 71,298 ) ( 70,241 ) Total net assets $ 224,687 $ 170,485 2025 2024 2023 Net revenue $ 286,667 $ 264,471 $ 184,194 Net income $ 31,992 $ 30,833 $ 12,968 During the years ended December 31, 2025 and 2024, we made additional equity contributions of $ 20.5 million and $ 1.4 million, respectively, to Arizona Diagnostic Radiology Group ("ADRG", our joint venture with Dignity Health). Promissory Note from Joint Venture Member On June 12, 2025, we executed a $ 17.0 million promissory note with Dignity Health, a related party and joint venture member of Arizona Diagnostic Radiology Group, LLC ("ADRG"). Monthly principal payments of $ 0.9 million begun July 1, 2025, with interest accruing at the Wall Street Journal Prime Rate plus 2 %. Future distributions from ADRG to Dignity will be applied to the note balance until fully repaid. The note is expected to mature on December 1, 2026. As of December 31, 2025, we recorded the note balance of $ 11.4 million in Due from Affiliates on our Consolidated Balance Sheet. Joint venture investment contribution Santa Monica Imaging Group, LLC On April 1, 2017, we formed in conjunction with Cedars-Sinai Medical Center 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 Cedars-Sinai Medical Center holding a 60 % economic interest. We account for our share of the venture under the equity method. On January 1, 2019, Cedars-Sinai Medical Center purchased an additional 5 % economic interest in SMIG from us and, as a result, our economic interest in SMIG was reduced to 35 %. On September 1, 2023, we 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, Cedars-Sinai Medical Center contributed five additional multi-modality imaging centers located in Santa Monica, California. As a result of the transaction, our economic interest in SMIG increased to 49 %. We recorded a gain of $ 16.8 million, within gain on contribution of imaging centers into joint venture in our consolidated statement of operations representing the difference between the fair value and carrying value of the business contributed. In determining the fair value of the imaging centers contributed to SMIG, we used an income approach which is considered a level 3 valuation technique. See Fair Value Measurements above for further detail on the valuation hierarchy. Key assumptions used in measuring the fair value are financial forecasts and a discount rate. We also utilized the cash paid for an additional interest in the joint venture to substantiate the fair value of the contributed assets. NOTE 3 - RECENT ACCOUNTING STANDARDS Recently Issued Accounting Pronouncements In November 2023, the FASB issued Accounting Standards Updates (ASUs) 2023-07 ("ASU 2023-07"), Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures . The guidance requires entities to provide enhanced disclosures about significant segment expenses. For entities that have adopted the amendments in ASU 2023-07, the updated guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after 77 December 15, 2024, and is applicable to the Company in fiscal 2024. Early adoption is permitted. 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. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024, and is applicable to the Company in fiscal 2025. The Company adopted ASU 2023-09 on a retrospective basis in fiscal 2025. The adoption impacted only the Company’s income tax disclosures and did not have an impact on its financial condition or 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. In July 2025, the FASB issued Accounting Standards Update (ASU) 2025-05 (“ASU 2025-05”), Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, to improve the consistency and operability of applying the current expected credit loss (“CECL”) model to accounts receivable and contract assets. The amendments clarify certain aspects of estimating expected credit losses, including guidance related to the consideration of credit enhancements, the assessment of collectability, and the presentation and disclosure of credit losses for these financial assets. The amendments are effective for annual periods beginning after December 15, 2025, with early adoption permitted. The amendments should be applied on a prospective basis, with retrospective application permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements. In September 2025, the FASB issued Accounting Standards Update (ASU) 2025-06 (“ASU 2025-06”), Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for software development costs and enhance the operability of the guidance for different development methods. The amendments remove the prescriptive “project-stage” model and require capitalization of software costs once management has authorized and committed to funding a project and it is probable that the software will be completed and used as intended. The Update also introduces the concept of “significant development uncertainty,” requires application of the property, plant and equipment disclosure requirements to capitalized internal-use software costs, and incorporates website development guidance into Subtopic 350-40. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements. NOTE 4 – BUSINESS COMBINATIONS AND RELATED ACTIVITY Acquisitions Imaging Center Segment During the years ended 2025, 2024 and 2023, 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, Virginia, New Jersey, Texas and New York markets. As of December 31, 2025, we made a preliminary fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands). The valuation of assets acquired and liabilities assumed has not yet been finalized and remains subject to change, primarily related to the completeness of accrued liabilities, the accuracy of fixed asset valuations, and other customary purchase accounting adjustments. The fair value determination is preliminary and may be updated as additional information becomes available. 2025: 78 Entity Date Acquired Total Consideration Property & Equipment Right of Use Assets Goodwill Intangible Assets Other Assets Right of Use Liabilities Finance lease HALO Centers LLC 1/2/2025 $ 4,200 587 3,238 3,563 50 — ( 3,238 ) — Hillcroft Medical Clinic 3/7/2025 $ 734 278 — 406 50 — — — North County Radiology Oceanside LLC 4/1/2025 $ 1,702 238 599 1,307 150 7 ( 599 ) — Faculty Physicians and Surgeons of LLUSM (Palm Imaging) 5/1/2025 $ 1,400 648 — 702 50 — — — California MSK MSO, LLC (OSS Burbank) 5/1/2025 $ 500 330 — 70 100 — — — HALO Centers LLC (Indian Wells) 5/1/2025 $ 7,850 1,714 2,439 6,072 50 15 ( 2,439 ) — Kolb Radiology P.C. 7/1/2025 $ 26,659 6,887 5,355 22,396 79 155 ( 6,125 ) ( 2,088 ) Schonholz and Drossman, LLP 9/1/2025 $ 30,101 2,921 5,566 26,790 295 95 ( 5,566 ) — Laser Assets, Inc.* 11/1/2025 $ 29,058 7,145 4,529 22,170 134 ( 32 ) ( 4,889 ) — Woodburn Nuclear Medicine, Ltd.* 11/1/2025 $ 29,705 1,658 4,292 27,902 1,105 — ( 5,252 ) — River Radiology, PLLC* 11/3/2025 $ 1,200 798 1,908 244 150 8 ( 1,908 ) — Total 133,109 23,204 27,925 111,622 2,213 248 ( 30,015 ) ( 2,088 ) *Fair Value Determination is preliminary and subject to change In connection with these 2025 Imaging Centers acquisitions, we have added $ 1.1 million of covenant not to compete and $ 1.1 million of definite-lived trade names, which are subject to amortization, to our intangible assets. In connection with these 2025 Imaging Centers acquisitions, the aggregate consideration transferred consisted of $ 117.2 million in cash, $ 15.9 million related to holdback and contingent consideration liabilities and in other liabilities. 2024: 79 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 ) U.S. 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 2024 imaging centers 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. 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 acquisitions. Digital Health Segment See-Mode Technologies On June 2, 2025, we, through or wholly owned subsidiary DH AI International Holdings, B.V., acquired all of the equity interest in See-Mode Technologies Pte. Ltd. (“See-Mode”), a medical technology company focused on using artificial intelligence to enhance ultrasound-based diagnostics. See-Mode’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 $ 28.9 million, including: (i) cash of $ 17.9 million, (ii) a holdback of $ 2.0 million cash to be released 18 months after acquisition, and (iii) contingent consideration with a fair value of $ 9.0 million related to three performance milestones payable 50 % in cash and 50 % in shares of our common stock. We recorded $ 0.2 million in other net assets, $ 5.5 million in developed technology, $ 5.4 million in IPR&D, $ 20.0 million in goodwill, and $ 2.2 million in deferred tax liabilities in connection with this transaction. In performing the purchase price allocation, we considered, among other factors, the intended future use of the acquired assets, the historical financial performance, and estimates of the future performance of the See-Mode business. iCAD, Inc. On July 17, 2025, we completed the acquisition of all of the outstanding equity interests of iCAD, Inc. (“iCAD”), a global leader in AI-powered breast health solutions. The acquisition integrates iCAD’s commercial, technology, and regulatory capabilities with those of DeepHealth, our wholly owned subsidiary within the Digital Health segment. The transaction strengthens DeepHealth’s position as an industry leader in AI-enabled breast cancer image interpretation and workflow optimization and expands its global market reach. The transaction was accounted for as the acquisition of a business and was completed through an all-stock exchange, with total purchase consideration of approximately $ 110.7 million based on the fair value of our common stock issued to iCAD shareholders and the fair value of our options issued in exchange for outstanding iCAD options. 80 We allocated the purchase price to the assets acquired and liabilities assumed based on their estimated fair values, which resulted in the recognition of goodwill of approximately $ 36.6 million, primarily reflecting expected synergies from integrating iCAD’s technology portfolio, established customer relationships, and assembled workforce. In addition, we recorded identifiable intangible assets related to backlog, developed technology, customer relationships, and trade name totaling approximately $ 38.3 million, consisting of $ 1.8 million, $ 0.7 million, $ 6.8 million, and $ 29.0 million, respectively, deferred tax asset, net of $ 20.6 million, Cash, deposits and others of $ 14.2 million, and property and equipment of $ 1.1 million. In connection with the iCAD acquisition, the Company identified and measured the fair values of acquired intangible assets, including backlog, trade names, developed technology, in-process research and development (“IPR&D”), and customer relationships. The valuations were performed using the income approach, consistent with market participant assumptions. The income approach incorporated assumptions such as projected revenues, estimated customer attrition, royalty rates, and discount rates reflecting market participant expectations. IPR&D projects were determined to have no material fair value as of the acquisition date. The identified intangible assets were assigned estimated useful lives as follows: backlog — approximately 4 years; trade names — approximately 1 year; developed technology — approximately 7 years; and customer relationships — approximately 15 years. In performing the purchase price allocation, we considered, among other factors, the intended future use of the acquired assets, the historical financial performance, and the expected future contributions of the iCAD business. As of December 31, 2025, the valuation of assets acquired and liabilities assumed is preliminary and subject to change, primarily with respect to the valuation of deferred taxes. The fair value determination will be updated as additional information becomes available during the measurement period. CIMAR UK Limited On November 10, 2025, the Company completed the acquisition of all outstanding shares of CIMAR (UK) Limited (“CIMAR”), a United Kingdom–based provider of medical image storage and cloud-based PACS solutions. The acquisition was accounted for as a business combination. The total purchase consideration was approximately $ 37.0 million, consisting of $ 13.2 million in cash, $ 14.8 million in RadNet common stock issued after year end, a holdback of $ 3.2 million, and contingent consideration with a fair value of approximately $ 5.8 million as of the acquisition date, payable upon the achievement of specified recurring revenue targets. The purchase consideration was preliminarily allocated to the assets acquired and liabilities assumed based on their estimated fair values, resulting in the recognition of goodwill of approximately $ 20.1 million, which is primarily attributable to expected synergies from integrating CIMAR’s technology and operations with the Company’s Digital Health platform. Identifiable intangible assets recognized totaled approximately $ 22.3 million, consisting primarily of customer relationships of approximately $ 19.6 million, NHS and ISO certifications of approximately $ 2.2 million, and trade names of approximately $ 0.5 million. In addition, the Company recorded current net assets of approximately $ 0.3 million. The Company also recognized deferred tax liabilities of approximately $ 5.7 million in connection with the acquisition.. The identifiable intangible assets were valued using income- and cost-based valuation methodologies in accordance with ASC 805. Customer relationships were valued using the multi-period excess earnings method, which considers projected revenues, customer attrition, contributory asset charges, and a market-based discount rate. Trade names were valued using the relief-from-royalty method, based on projected revenues, an estimated royalty rate, and a market-based discount rate. NHS and ISO certifications were valued using a cost approach based on estimated replacement cost. The estimated useful lives are approximately 21 years for customer relationships, 4 years for trade names, and 1 years for certifications. As of December 31, 2025, the purchase price allocation is preliminary and subject to change during the measurement period, primarily related to refinements in the valuation of intangible assets, contingent consideration, deferred taxes, and other customary purchase accounting adjustments. Kheiron Medical Technologies LTD On October 14, 2024, we acquired all of the equity interest in Kheiron Medical Technologies LTD (“Kheiron”), which uses deep learning AI to help radiologists detect breast cancer. 81 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, $ 2.6 million of IPR&D in intangible assets, and $ 1.5 million in current liabilities in connection with this transaction. 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 Kheiron business. Subsidiary activity Formation of majority owned subsidiary and sale of economic interest Pacific Diagnostic Imaging Group, LLC. On March 21, 2025, we formed Pacific Diagnostic Imaging Group, LLC (“PDRG”), a Delaware limited liability company. On April 1, 2025, we entered into a partnership with Tri-City Healthcare District (“Tri-City”) by selling a 20 % membership interest in PDRG for cash consideration of $ 0.3 million. We retained an 80 % controlling interest in PDRG. The joint venture operates outpatient imaging centers in Southern California. The transaction did not result in a change of control, and no gain or loss was recognized. 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. 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. As a result of the transaction, we recognized a gain of $ 7.9 million to additional paid in capital and retained a 52 % controlling economic interest in TVIG and PHS retains a $ 7.8 million or 48 % noncontrolling economic interest in TVIG. In determining the fair value of the imaging centers contributed to TVIG, we used an income approach which is considered a level 3 valuation technique. See Fair Value Measurements above for further detail on the valuation hierarchy. Key assumptions used in measuring the fair value are financial forecasts and a discount rate. We also utilized the cash paid for an additional interest in the joint venture to substantiate the fair value of the contributed assets. NOTE 5 – SEGMENT REPORTING 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. Our Imaging Center segment provides physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders. Services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures. The vast majority of our centers offer multi-modality imaging services, 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. 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. 82 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. The following tables reflect certain financial data for each reportable segment: Year Ended December 31, 2025 Imaging Center Digital health Total Revenues from external customers $ 1,988,193 $ 52,017 $ 2,040,210 Intersegment revenues — 40,674 40,674 $ 1,988,193 $ 92,691 $ 2,080,884 Reconciliation of revenue Elimination of intersegment revenues ( 40,674 ) Total consolidated revenues $ 2,040,210 Less: Other segment items* $ 1,745,989 $ 107,973 Segment profit (loss) 242,204 ( 15,282 ) 226,922 Reconciliation of segment profit Depreciation and amortization ( 152,127 ) Loss on sale and disposal of equipment and other ( 9,658 ) Severance costs ( 3,145 ) Interest expense ( 69,913 ) Equity in earnings of joint ventures 14,876 Non-cash change in fair value of interest rate swaps ( 7,112 ) Other income 32,066 Income before income taxes $ 31,909 *Other segment items include operating expenses, inclusive of cost of operations and lease abandonment charges. 83 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 Reconciliation of revenue Elimination of intersegment revenues ( 28,361 ) Total consolidated revenues $ 1,829,664 Less: Other segment items* $ 1,542,274 $ 69,114 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. 84 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 Less: Other segment items* $ 1,381,847 $ 42,048 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 Income before income taxes $ 38,810 *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, 2025 and 2024. Service revenue attributed to countries that represent a significant portion of consolidated service revenue are as follows (in thousands): 2025 2024 2023 United States $ 2,006,237 $ 1,802,422 $ 1,599,745 Other countries 33,973 27,242 16,885 Total $ 2,040,210 $ 1,829,664 $ 1,616,630 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, 2024 and December 31, 2025 (in thousands): 85 Imaging Center Digital Health Total Balance as of December 31, 2023 $ 594,257 $ 85,206 $ 679,463 Goodwill from acquisitions $ 34,697 $ — $ 34,697 Currency translation ( 417 ) ( 3,080 ) ( 3,497 ) Balance as of December 31, 2024 $ 628,537 $ 82,126 $ 710,663 Goodwill from acquisitions 111,622 76,617 188,239 Measurement period and other adjustments — 87 87 Currency translation 1,734 6,940 8,674 Balance as of December 31, 2025 $ 741,893 $ 165,770 $ 907,663 The amount of goodwill that is expected to be deductible for tax purposes as for 2025 is $ 232.8 million. Other intangible assets are primarily related to our business combinations and software development. They include the estimated fair values of such items as service agreements, customer lists, covenants not to compete, acquired technologies, and trade names. Total amortization expense was $ 16.1 million, $ 12.5 million, and $ 12.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Intangible assets are amortized using the straight-line method over their useful life determined at acquisition. Management service agreements are amortized over 25 years using the straight line method. Software development is capitalized and amortized over the useful life of the software when placed into service. Trade names are reviewed annually for impairment. 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): 2026 2027 2028 2029 2030 Thereafter Total Weighted average amortization period remaining in years Management Service Contracts $ 2,287 $ 2,287 $ 2,287 $ 2,287 $ 2,287 $ 2,096 $ 13,531 5.8 Covenant not to compete and other contracts 2,039 1,745 1,655 1,195 119 — 6,753 3.6 Customer Relationships 3,914 3,736 3,694 3,694 3,694 43,016 61,748 16.9 Patent and Trademarks 763 391 326 67 43 83 1,673 3.1 Developed Technology & Software 9,712 9,177 9,177 3,958 3,227 5,770 41,021 5.0 Trade Names amortized 394 394 359 252 127 336 1,862 5.6 Certifications 1867 — — — — — 1,867 0.8 Others 438 438 438 219 — — 1,533 3.4 Trade Names indefinite life — — — — — 8,500 8,500 IPR&D — — — — — 10,020 10,020 Total Annual Amortization $ 21,414 $ 18,168 $ 17,936 $ 11,672 $ 9,497 $ 69,821 $ 148,508 NOTE 7 - PROPERTY AND EQUIPMENT Property and equipment and accumulated depreciation and amortization are as follows (in thousands): 86 December 31, 2025 2024 Land $ 250 $ 250 Medical equipment 872,464 807,624 Computer and office equipment, furniture and fixtures 100,604 134,355 Software costs 63,373 56,261 Leasehold improvements 711,368 618,725 Equipment originally acquired under finance/capital lease 11,557 13,235 Total property and equipment cost 1,759,616 1,630,450 Accumulated depreciation ( 951,914 ) ( 935,659 ) Total property and equipment $ 807,702 $ 694,791 Included in our property and equipment at December 31, 2025 is approximately $ 48.0 million total of construction in process amounts consisting of $ 28.8 million in medical equipment, $ 3.2 million in computer and office equipment, and $ 15.8 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, 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, 2025, 2024 and 2023 was $ 136.1 million ($ 131.4 million in Imaging Center segment and $ 4.7 million in Digital Health segment), $ 125.3 million ($ 122.5 million in Imaging Center segment and $ 2.9 million in Digital Health segment) and $ 116.2 million ($ 115.0 million in Imaging Center segment and $ 1.2 million in Digital Health segment), respectively. NOTE 8 - CREDIT FACILITIES AND NOTES PAYABLE At December 31, 2025 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, 2025, 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. 87 On June 11, 2025, we entered into Incremental Amendment No. 2 to the Barclays Credit Agreement (the “Second Amendment”), pursuant to which Barclays Bank PLC, as lender, provided an additional $ 100.0 million, net of a $ 1.0 million discount, of incremental term loan borrowings under our existing senior secured term loan facility, all other terms remained the same. Amounts deferred will be amortized over the remaining terms of the respective credit facilities under the Barclays Credit Agreement. Pursuant to the Second Amendment, we are required to make quarterly principal payments of approximately $ 2.4 million, compared to $ 2.2 million prior to the amendment. The remaining outstanding principal will be due as a lump-sum payment on April 18, 2031, the maturity date of the term loan. 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 As of December 31, 2024 SOFR plus 2.25 % Prime Rate plus 1.25 % 6.77 % (credit spread adjustment of — % ) 8.8 % As of December 31, 2025 SOFR plus 2.25 % Prime Rate plus 1.25 % 6.07 % (credit spread adjustment of 0.00 % ) 8.0 % With the most 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 $ 1.3 million at December 31, 2025. 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, 2025, 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, 2025. After reserves of $ 9.0 million for certain letters of credit, $ 273.0 million was available to draw upon as of December 31, 2025. The Barclays Revolving Credit Facility terminates on April 18, 2029, unless otherwise accelerated under the terms of the Barclays Credit Agreement. 88 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. NJIN, and not the Company, is both the borrower and guarantor of the Truist Credit Agreement. 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, 2025 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 31, 2025. 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, 2025. With no letters of credit reserved against the facility, the full $ 50.0 million was available to draw upon as of December 31, 2025. 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. Debt Obligations As of December 31, 2025 and 2024 our term loan debt and other obligations are as follows (in thousands): December 31, 2025 December 31, 2024 Barclays Term Loans collateralized by RadNet's tangible and intangible assets $ 961,119 $ 870,625 Discount on Barclays Term Loans ( 11,759 ) ( 12,929 ) Truist Term Loan Agreement collateralized by NJIN's tangible and intangible assets 123,750 135,000 Discount on Truist Term Loan Agreement ( 462 ) ( 726 ) Revolving Credit Facilities — — Equipment notes payable at 3.6 % to 7.2 %, due through 2029, collateralized by medical equipment 17,271 24,296 Total debt obligations 1,089,919 1,016,266 Less: current portion ( 25,424 ) ( 24,692 ) Long term portion of debt obligations $ 1,064,495 $ 991,574 The following is a listing of annual principal maturities of notes payable exclusive of all related discounts and repayments on our revolving credit facilities for years ending December 31 (in thousands) 89 2026 $ 27,928 2027 129,447 2028 12,673 2029 10,003 2030 9,758 Thereafter 912,331 Total notes payable obligations $ 1,102,140 NOTE 9 – LEASES Our material lease contracts are for facilities and advanced radiology equipment. In regards to our imaging, administrative and warehouse facilities, the most common initial lease term varies in length from 5 to 15 years. Including renewal options negotiated with the landlord, we can have a total span of 10 to 35 years at these locations, and we do not enter into purchase options on the underlying property. We also lease smaller satellite X-Ray locations on mutually renewable terms, usually lasting one year. Leases for advanced radiology and office equipment have terms generally lasting from 5 to 8 years. 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. Operating lease costs are recognized as cost of operation in the Consolidated Statement of Operations. The components of lease expense were as follows: Years ended December 31, (In thousands) 2025 2024 2023 Operating lease cost (1) $ 122,721 $ 111,966 $ 106,954 Finance lease cost: Depreciation of leased equipment $ 87 $ 109 $ 1,204 Interest on lease liabilities — — — Total finance lease cost $ 87 $ 109 $ 1,204 (1) Operating lease cost above for the year ended December 31, 2025, 2024, and 2023 included $ 6.7 million, $ 1.8 million, and $ 2.7 million, respectively in lease abandonment charges. Please see our discussion in the Leases section of Note 2, Summary of Significant Accounting Policies. Supplemental cash flow information related to leases was as follows: Years ended December 31, (In thousands) 2025 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 105,312 $ 103,215 $ 101,516 Right-of-use & Equipment assets obtained in exchange for lease obligations: Operating leases 113,796 109,446 55,852 90 Supplemental balance sheet information related to leases was as follows: (In thousands, except lease term and discount rates) December 31, 2025 2024 Operating Leases Operating lease right-of-use assets $ 690,250 $ 639,740 Current portion of operating lease liability 61,934 56,618 Long-term operating lease liability 707,001 655,979 Total operating lease liabilities $ 768,935 $ 712,597 Finance Leases Equipment at cost $ 11,557 $ 13,235 Accumulated depreciation ( 11,156 ) ( 12,747 ) Equipment, net $ 401 $ 488 Weighted Average Remaining Lease Term Operating leases - years 10.6 10.6 Weighted Average Discount Rate Operating leases 7.2 % 6.9 % Maturities of lease liabilities were as follows: (In thousands) Operating Leases Year Ending December 31, 2026 $ 113,443 2027 112,258 2028 110,435 2029 100,428 2030 97,619 Thereafter 582,128 Total Lease Payments 1,116,310 Less imputed interest ( 347,375 ) Total $ 768,935 As of December 31, 2025, we have additional operating leases for facilities and medical equipment that have not yet commenced of approximately $ 12.2 million. These operating leases will commence in 2026 with lease terms of 1 to 15 years. NOTE 10 – INCOME TAXES For the years ended December 31, 2025, 2024 and 2023, we have the following income (loss) before income taxes (in thousands): 91 December 31, 2025 2024 2023 US Domestic $ 50,367 $ 60,704 $ 60,374 Foreign ( 18,458 ) ( 15,842 ) ( 21,564 ) Income before income taxes $ 31,909 $ 44,862 $ 38,810 For the years ended December 31, 2025, 2024 and 2023, we recognized income tax expense comprised of the following (in thousands): December 31, 2025 2024 2023 Federal current tax $ — $ — $ — State current tax 4,039 2,375 3,442 Foreign current tax 1,022 1,302 638 Other current tax — — — Total current expenses 5,061 3,677 4,080 Federal deferred tax 9,526 3,269 8,960 State deferred tax 1,990 ( 246 ) ( 2,724 ) Foreign deferred tax ( 1,715 ) ( 674 ) ( 1,843 ) Total deferred expenses 9,801 2,349 4,393 Income tax expense 14,862 6,026 8,473 A reconciliation of the statutory U.S. federal rate and effective rates is as follows: 92 Years Ended December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent U.S. Federal Statutory Tax Rate $ 6,701 21.00 % $ 9,416 20.99 % $ 8,150 21.00 % State and Local Income Taxes, Net of Federal Income Tax Effect 1 4,663 14.61 % 1,957 4.36 % 1,451 3.74 % Foreign Tax Effects Netherlands Statutory tax rate difference between Netherlands and U.S. ( 891 ) ( 2.79 ) % ( 866 ) ( 1.93 ) % ( 1,116 ) ( 2.88 ) % Change in valuation allowance 4,071 12.76 % 4,181 9.32 % 4,064 10.47 % Other 222 0.70 % — — % ( 23 ) ( 0.06 ) % Other foreign jurisdictions ( 220 ) ( 0.69 ) % 637 1.42 % 398 1.03 % Changes in Valuation Allowances 30 0.09 % 15 0.03 % — — % Nontaxable or Nondeductible Items (Income)/loss attributable to noncontrolling interests ( 7,497 ) ( 23.49 ) % ( 7,569 ) ( 16.87 ) % ( 5,752 ) ( 14.82 ) % Stock-based compensation 1,508 4.73 % ( 1,694 ) ( 3.78 ) % 62 0.16 % Nondeductible executive compensation 2,449 7.67 % 870 1.94 % 1,199 3.09 % Adjustments to fair market value — — % 418 0.93 % ( 563 ) ( 1.45 ) % Nondeductible split dollar insurance ( 351 ) ( 1.10 ) % ( 320 ) ( 0.71 ) % ( 248 ) ( 0.64 ) % Meals and Entertainment 427 1.34 % 416 0.93 % 636 1.64 % Nondeductible transaction costs 1,472 4.61 % — — % — — % Other 353 1.11 % 267 0.60 % 309 0.80 % Changes in Unrecognized Tax Benefits 72 0.23 % ( 274 ) ( 0.61 ) % ( 884 ) ( 2.28 ) % Other Adjustments Other basis adjustments to joint ventures 741 2.32 % 268 0.60 % ( 226 ) ( 0.58 ) % Other basis adjustments to other assets 1,112 3.48 % ( 1,696 ) ( 3.78 ) % 1,016 2.62 % Other Effective Tax Rate 14,862 46.58 % 6,026 13.44 % 8,473 21.84 % (1) State tax expense comprising the majority (greater than 50 percent) of the tax effect in this category for the years ended December 31, 2025, 2024 and 2023 is Maryland and New York, Maryland, and Maryland, respectively. A summary of income taxes paid, net of refunds received, for the years ended December 31, 2025, 2024 and 2023 is as follows: 93 Years Ended December 31, 2025 2024 2023 Federal income taxes paid, net of refunds received State income taxes paid, net of refunds received California $ 145 $ 317 $ 127 Delaware — — 181 Florida 510 329 186 Maryland 2,301 1,150 1,000 New Jersey 81 284 1 New York 337 10 38 Other State Jurisdictions 299 80 55 3,673 2,170 1,588 Foreign income taxes paid, net of refunds received United Kingdom 845 1,885 — Other Foreign Jurisdictions 43 113 — 888 1,998 — Total income taxes paid, net of refunds received 4,561 4,168 1,588 Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial and income tax reporting purposes and operating loss carryforwards. Our deferred tax assets and liabilities comprise the following (in thousands): December 31, Deferred tax assets: 2025 2024 Net operating losses $ 89,606 $ 46,868 Accrued expenses 3,720 5,087 Operating lease liability 152,768 138,842 Amortization of research and experimental expenditures 9,481 9,977 Equity compensation 5,796 3,813 Allowance for doubtful accounts 2,267 2,411 Limitation of business interest 9,075 16,083 Other 2,815 1,182 Valuation allowance ( 26,562 ) ( 13,797 ) Total deferred tax assets $ 248,966 $ 210,466 Deferred tax liabilities: Property and equipment ( 17,977 ) ( 20,383 ) Goodwill ( 51,576 ) ( 45,794 ) Intangibles ( 30,746 ) ( 13,206 ) Operating lease right-of-use asset ( 136,831 ) ( 124,427 ) Outside basis difference ( 33,271 ) ( 27,066 ) Other ( 468 ) ( 1,820 ) Total deferred tax liabilities $ ( 270,869 ) $ ( 232,696 ) Net deferred tax liability $ ( 21,903 ) $ ( 22,230 ) 94 As of December 31, 2025, we had federal net operating loss carryforwards of approximately $ 240.1 million, which is comprised of definite and indefinite net operating losses. We had federal net operating loss carryforwards of approximately $ 92.6 million, which expire at various intervals from the years 2026 to 2037, and had carryforwards of $ 147.4 million of net operating losses which do not expire. Federal net operating losses generated in tax years following December 31, 2017 carryover indefinitely and may be used to offset up to 80% of future taxable net income. We also had state net operating loss carryforwards of approximately $ 417.2 million, which expire at various intervals from the years 2026 through 2044. As of December 31, 2025, $ 196.6 million of our federal net operating loss carryforwards acquired in connection with the 2011 acquisition of Raven Holdings U.S., Inc., 2019 acquisition of Nulogix Health, Inc., and the 2025 acquisition of iCAD, Inc. are subject to limitations related to their utilization under Section 382 of the Internal Revenue Code. We also had foreign net operating loss carryforwards of approximately $ 106.0 million, which do not expire and are carried over indefinitely. We considered all evidence available when determining whether deferred tax assets are more likely-than-not to be realized, including projected future taxable income, scheduled reversals of deferred tax liabilities, prudent tax planning strategies, and recent financial operations. The evaluation of this evidence requires significant judgment about the forecasts of future taxable income, based on the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income. As of December 31, 2025, we have determined that deferred tax assets of $ 249.0 million are more likely-than-not to be realized. We have also determined deferred tax liabilities of $ 10.3 million are related to book basis in goodwill that has an indefinite life. We file consolidated income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. We continue to reinvest earnings of the non-US entities for the foreseeable future and therefore have not recognized any U.S. tax expense on these earnings. With limited exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2019. We do not anticipate the results of any open examinations would result in a material change to our financial position. A reconciliation of the total gross amounts of unrecognized tax benefits for the years ended are as follows (in thousands): December 31, 2025 2024 Balance at beginning of year $ 3,024 $ 3,082 Increases related to prior year tax positions 443 276 Increases related to current year tax positions — 45 Increases related to acquisitions 4,079 — Expiration of the statute of limitations for the assessment of taxes ( 367 ) ( 381 ) Increase related to change in rate ( 7 ) 2 Balance at end of year $ 7,172 $ 3,024 At December 31, 2025, we had unrecognized tax benefits of $ 7.2 million of which $ 6.6 million will affect the effective tax rate if recognized. We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the year ended December 31, 2025 the Company accrued approximately $ 14 thousand of interest and penalties. As of December 31, 2025, accrued interest and penalties amounted to approximately $ 0.4 million. We do not anticipate the uncertain tax position to change materially within the next 12 months. 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. On July 4, 2025, the U.S. President signed into law H.R.1, the legislation commonly known as the One Big Beautiful Bill Act (OBBBA). This legislation extended, modified, or made permanent many of the tax provisions which were initially enacted as part of the Tax Cuts and Jobs Act (TCJA) of 2017. The OBBBA contains a number of tax provisions including, but not limited to, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on 95 business interest, bonus depreciation modifications, as well as international tax provision modifications. These tax provisions apply to either tax years beginning after December 31, 2024 or December 31, 2025. The Company is still in the process of analyzing some of the tax elections available under the OBBBA. However, we do not expect these elections to have an impact on our effective rate for 2025. NOTE 11 – STOCK-BASED COMPENSATION Stock Incentive Plans Our stock-based compensation consists of various types of awards, each accounted for separately. There is no overlap between Options, Restricted stock awards (RSAs) and Restricted stock units (RSUs), performance stock units (PSUs). Options Certain options granted under the Restated Plan to employees are intended to qualify as incentive stock options under existing tax regulations. Options may also be issued in connection with acquisitions as replacement awards for acquiree employee stock options. Stock options generally vest over one to five years and expire five to ten years years from the date of grant. The following summarizes all of stock option transactions for the year ended December 31, 2025: Outstanding Options Shares Weighted Average Exercise price Per Common Share Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Balance, December 31, 2024 1,172,773 $ 16.77 Granted 163,838 30.96 Exercised ( 338,218 ) 16.11 Balance, Canceled, forfeited or expired ( 3,519 ) 79.90 Balance, December 31, 2025 994,874 19.11 5.42 $ 51,977 Exercisable at December 31, 2025 816,743 15.81 5.06 45,360 Aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between our closing stock price on December 31, 2025 and the exercise price, multiplied by the number of in-the-money options as applicable) that would have been received by the holder had all holders exercised their options on December 31, 2025. As of December 31, 2025, total unrecognized stock-based compensation expense related to non-vested employee awards was $ 0.5 million which is expected to be recognized over a weighted average period of approximately 0.66 years. 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, 2025: RSA's & RSU's Weighted-Average Remaining Contractual Term (Years) Weighted-Average Fair Value RSA's and RSU's unvested at December 31, 2024 687,655 $ 35.31 Changes during the period Granted 1,001,191 $ 70.39 Vested ( 770,849 ) $ 53.97 Forfeited ( 24,612 ) $ 45.68 RSA's and RSU's unvested at December 31, 2025 893,385 1.61 $ 58.23 96 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 with a fair value of $ 29.44 . 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 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. he PSUs vest in five equal annual installments on each anniversary of the grant date, subject to continued service and achievement of a performance condition established at the grant date. The performance condition will be measured over a performance period ending no later than the seventh anniversary of the grant date. The number of shares earned may range from 0 % to 100 % of the target award based on actual performance results. As of December 31, 2025, based on performance achieved to date, all 35,522 shares are expected to vest. Plan summary In summary, of the 20,100,000 shares of common stock reserved for issuance under the Restated Plan at December 31, 2025, there remain 2,188,284 shares available for future issuance. NOTE 12 – SUBSEQUENT EVENTS RRC Royal Management, LLC On January 6, 2026, we acquired RRC Royal Management, LLC ("RRC") for purchase consideration of approximately $ 65.0 million. RRC consists of 13 imaging centers located in Southwest Florida. Northwest Radiology Network, P.C. On January 30, 2026, we acquired Northwest Radiology Network, P.C. for purchase consideration of approximately $ 9.0 million. Northwest Radiology Network, P.C. consists of 6 imaging centers located in Indianapolis, Indiana. Gleamer SAS On March 2, 2026, the Company completed the acquisition of all of the outstanding shares of Gleamer SAS and its subsidiaries. The aggregate purchase consideration consists of € 215.0 million in upfront cash consideration, subject to customary adjustments for cash, indebtedness and working capital, as well as potential contingent consideration of up to € 15.0 million based on the achievement of specified performance targets. 97 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure None.