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SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Schedule of Service Fee Revenue

Our total service fee revenues during the three and six months ended June 30, 2022 and 2021 are presented in the table below. Our imaging review is based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage. Additional revenues are earned from our management services provided to joint ventures and our software and AI subsidiaries.

In Thousands			Three Months Ended June 30,												Six Months Ended June 30,
			2022						2021						2022						2021
Commercial insurance			$	195,066					$	187,354					$	383,615					$	369,566
Medicare			77,879						71,407						148,800						134,877
Medicaid			9,704						9,039						18,788						17,486
Workers' compensation/personal injury			13,138						10,556						25,586						20,966
Other patient revenue			7,567						5,189						14,689						9,961
Management fee revenue			5,592						5,533						11,100						10,752
Software revenue			2,421						2,628						6,419						5,054
Other			3,577						3,788						8,623						6,409
Revenue under capitation arrangements			37,874						38,424						76,365						74,166
Imaging Center Segment Revenue			352,818						333,918						693,985						649,237
AI Segment Revenue			1,557						—						2,156						—
Total service revenue			$	354,375					$	333,918					$	696,141					$	649,237

Schedule of Goodwill and Other Intangible Assets

Activity in goodwill for the six months ended June 30, 2022 is provided below (in thousands):

Balance as of December 31, 2021			$	513,820
Goodwill from acquisitions			67,979
Valuation adjustment			(338)
Currency translation			(3,680)
Balance as of June 30, 2022			$	577,781

Schedule of Effect of Derivative Instruments on Comprehensive Loss

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

For the three months ended June 30, 2022
Account						March 31, 2022 Balance						Amount of comprehensive loss recognized on derivative net of taxes						Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes						June 30, 2022 Balance						Location
Accumulated Other Comprehensive Loss, net of taxes						$	(17,963)					$	—					$	924					$	(17,039)					Equity

For the six months ended June 30, 2022
Account						December 31, 2021 Balance						Amount of comprehensive loss recognized on derivative net of taxes						Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes						June 30, 2022 Balance						Location
Accumulated Other Comprehensive Loss, net of taxes						$	(18,886)					$	—					$	1,847					$	(17,039)					Equity

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

For the three months ended June 30, 2022

Ineffective interest rate swap

Amount of gain recognized in income on derivative (current period ineffective portion)

Location of gain recognized in Income on derivative (current period ineffective portion)

Gross amount of loss reclassified from accumulated OCI into income (prior period effective portion)

Location of loss reclassified from accumulated OCI into income (prior period effective portion)

Interest rate contracts

$

6,306

Other income (expense)

$

(1,245)

Interest Expense

For the the six months ended June 30, 2022

Ineffective interest rate swap

Amount of gain recognized in income on derivative (current period ineffective portion)

Location of gain recognized in Income on derivative (current period ineffective portion)

Gross amount of loss reclassified from accumulated OCI into income (prior period effective portion)

Location of loss reclassified from accumulated OCI into income (prior period effective portion)

Interest rate contracts

$

27,125

Other income (expense)

$

(2,490)

Interest Expense

Schedule of Business Acquisitions by Acquisition, Contingent Consideration

A tabular presentation of the effect of the combined Aidence and Quantib contingent consideration on our condensed consolidated balance sheet is as follows (amounts in thousands):

For the three months ended June 30, 2022
Account						March 31, 2022 Balance						Amount of other non operating income recognized on contingent consideration			Currency Translation			June 30, 2022 Balance						Location
Other Long Term Liabilities						$	10,268					$	(786)		$	(1,045)		$	8,437					Liabilities and Non Operating Income

For the six months ended June 30, 2022
Account						January 20, 2022 Balance						Amount of other non operating income recognized on contingent consideration			Currency Translation			June 30, 2022 Balance						Location
Other Long Term Liabilities						$	10,459					$	(1,287)		$	(735)		$	8,437					Liabilities and Non Operating Income

Schedule of Fair Value of Assets and Liabilities

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

			As of June 30, 2022
			Level 1						Level 2						Level 3						Total
Current and long term assets
2019 Swaps - Interest Rate Contracts			$	—					$	10,806					$	—					$	10,806

			As of December 31, 2021
			Level 1						Level 2						Level 3						Total
Current and long term liabilities
2019 Swaps - Interest Rate Contracts			$	—					$	16,319					$	—					$	16,319

The table below summarize the estimated fair values of contingencies and holdback relating to our Aidence Holding B.V. and Quantib B.V. acquisitions on January 20, 2022, that are subject to fair value measurements and the classification of these liabilities on our condensed consolidated balance sheets, as follows (in thousands):

			As of June 30, 2022
			Level 1						Level 2						Level 3						Total
Long term liabilities
Aidence Holding B.V. milestone consideration			$	—					$	—					$	6,686					$	6,686
Quantib B.V. holdback of 113,303 shares of RadNet common stock			$	—					$	—					$	1,751					$	1,751

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

			As of June 30, 2022
			Level 1						Level 2						Level 3						Total Fair Value						Total Face Value
First Lien Term Loans and SunTrust Term Loan			$	—					$	721,774					$	—					$	721,774					$	761,250

			As of December 31, 2021
			Level 1						Level 2						Level 3						Total Fair Value						Total Face Value
First Lien Term Loans and SunTrust Term Loan			$	—					$	766,973					$	—					$	766,973					$	767,875

Schedule of Earnings Per Share

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

			Three Months Ended June 30,												Six Months Ended June 30,
			2022						2021						2022						2021
Net income attributable to RadNet, Inc.'s common stockholders			$	7,905					$	2,873					$	10,918					$	12,331
BASIC NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period			56,059,824						52,238,709						55,683,335						52,004,653
Basic net income per share attributable to RadNet, Inc.'s common stockholders			$	0.14					$	0.05					$	0.20					$	0.24
DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period			56,059,824						52,238,709						55,683,335						52,004,653
Add nonvested restricted stock subject only to service vesting			47,652						202,341						122,781						227,803
Add additional shares issuable upon exercise of stock options and contingently issuable shares			859,072						692,041						860,174						658,105
Weighted average number of common shares used in calculating diluted net income per share			56,966,548						53,133,091						56,666,290						52,890,561
Changes in FV associated with contingently issuable shares			$	(468)					$	—					$	(863)					$	—
Net income attributable to RadNet, Inc's common stockholders for diluted share calculation			$	7,437					$	—					$	10,055					$	—
Diluted net income per share attributable to RadNet, Inc.'s common stockholders			$	0.13					$	0.05					$	0.18					$	0.23
Stock options and non vested restricted awards excluded from the computation of diluted per share amounts as their effect would be antidilutive:
Shares issuable upon the exercise of stock options:			70,070						—						58,491						—

Schedule of Business Acquisitions

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

Entity

Date Acquired

Total Consideration

Property & Equipment

Right of Use Assets

Goodwill

Right of Use Liabilities

IFRC LLC *^

1/1/2022

3,922

2,121

1,295

1,801

(1,295)

*Fair Value Determination is Final

^ IFRC LLC acquisitions consisted of three subsidiaries of IFRC, two of which were purchased separately by wholly owned RadNet subsidiaries.

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

Entity			Date Acquired			Total Consideration			Property & Equipment			Right of Use Assets			Goodwill						Other Assets			Right of Use Liabilities
IFRC LLC*^			1/1/2022			4,800			2,103			857			2,697						—			(857)
IFRC LLC*^			1/1/2022			8,200			2,910			1,703			5,271						19			(1,703)
Total						13,000			5,013			2,560			7,968						19			(2,560)

*Fair Value Determination is Final

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

Schedule of Investment in Joint Ventures

The following table is a summary of our investment in joint ventures during the six months ended June 30, 2022 (in thousands):

Balance as of December 31, 2021			$	42,229
Equity in earnings in these joint ventures			5,266
Equity contributions in existing joint ventures			1,441
Balance as of June 30, 2022			$	48,936

Schedule of Joint Venture Investment and Financial Information

The following table is a summary of key balance sheet data for these joint ventures as of June 30, 2022 and December 31, 2021 and income statement data for the six months ended June 30, 2022 and 2021 (in thousands):

Balance Sheet Data:			June 30, 2022						December 31, 2021
Current assets			$	39,840					$	37,186
Noncurrent assets			88,754						73,592
Current liabilities			(12,322)						(12,919)
Noncurrent liabilities			(27,363)						(22,370)
Total net assets			$	88,909					$	75,489
Book value of RadNet joint venture interests			$	41,099					$	34,930
Cost in excess of book value of acquired joint venture interests and other			7,837						7,299
Total value of RadNet joint venture interests			$	48,936					$	42,229

Income statement data for the six months ended June 30,			2022						2021
Net revenue			$	69,757					$	64,636
Net income			$	10,497					$	10,258

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