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SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended
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Sep. 30, 2022
Accounting Policies [Abstract] |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES During the period covered in this report, there have been no material changes to the significant accounting policies we use and have explained, in our annual report on Form 10-K for the fiscal year ended December 31, 2021. The information below is intended only to supplement the disclosure in our annual report on Form 10-K for the fiscal year ended December 31, 2021. 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 (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by Medicare and Medicaid, or negotiated with managed care health plans and commercial insurance companies. The payment arrangements with third-party payors for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. As it relates to the Group, this service fee revenue includes payments for both the professional medical interpretation revenue recognized by them as well as the payment for all other aspects related to our providing the imaging services, for which we earn management fees. As it relates to other centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities. Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payors. Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). 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 service fee revenues during the three and nine months ended September 30, 2022 and 2021 are presented in the table below. Our imaging center revenue is displayed as the estimated service fee, broken down by classification of insurance coverage type. Additional revenues are earned from our management services provided to joint ventures and our software and AI subsidiaries.
In Thousands | Three Months Ended September 30, |  | Nine Months Ended September 30,
2022 |  | 2021 |  | 2022 |  | 2021
Commercial insurance | $ | 189,634 |  |  | $ | 185,723 |  |  | $ | 573,259 |  |  | $ | 555,355 |
Medicare | 78,034 |  |  | 73,163 |  |  | 226,827 |  |  | 207,977 |
Medicaid | 9,669 |  |  | 8,707 |  |  | 28,456 |  |  | 26,198 |
Workers' compensation/personal injury | 13,200 |  |  | 11,554 |  |  | 38,785 |  |  | 32,507 |
Other patient revenue | 7,646 |  |  | 4,800 |  |  | 22,334 |  |  | 14,766 |
Management fee revenue | 6,099 |  |  | 5,255 |  |  | 17,199 |  |  | 16,007 |
Software revenue | 3,430 |  |  | 2,068 |  |  | 9,849 |  |  | 7,115 |
Other | 3,431 |  |  | 3,641 |  |  | 12,054 |  |  | 10,058 |
Revenue under capitation arrangements | 38,001 |  |  | 37,283 |  |  | 114,366 |  |  | 111,449 |
Imaging Center Segment Revenue | 349,144 |  |  | 332,194 |  |  | 1,043,129 |  |  | 981,432 |
AI Segment Revenue | 900 |  |  | 496 |  |  | 3,056 |  |  | 496 |
Total service revenue | $ | 350,044 |  |  | $ | 332,690 |  |  | $ | 1,046,185 |  |  | $ | 981,928 |
COVID-19 PANDEMIC AND CARES ACT FUNDING - On March 11, 2020 the World Health Organization (WHO) designated COVID-19 as a global pandemic. To aid businesses and stimulate the national economy, Congress passed The Coronavirus Aid, Relief, and Economic Security ("CARES") Act, which was signed in to law on March 27, 2020. Beginning in the second quarter of 2020, we received funding from the various programs established by the CARES Act as follows: •$39.6 million total of accelerated Medicare payments received, $39.5 million in the twelve months ended December 31, 2020 and $0.1 million in the twelve months ended December 31, 2021. •$4.0 million from the Paycheck Protection Program through the twelve months ended December 31, 2020. •$35.4 million total Provider Relief Funding, $26.3 million received for the twelve months ended December 31, 2020 and $9.1 million received for the twelve months ended December 31, 2021, with no funds received for the three months ended September 30, 2021 and $6.3 million received during the nine months ended September 30, 2021. The accelerated Medicare payments were recorded to Deferred Revenue in our consolidated balance sheet and are being applied to revenue as services are performed beginning in 2021. Through September 30, 2022, $38.6 million of the accelerated Medicare payments has been applied to revenue. The $4.0 million secured from the Paycheck Protection Program was accounted for as debt and in December 2020 we met the eligibility requirements under the government guidelines for forgiveness and the loans were written off to gain on extinguishment of debt. The Provider Relief Funding from 2021 is displayed as such on our condensed consolidated statements of operations. The CARES Act also provides for the deferral of the employer-paid portion of the social security payroll tax with 50% due by December 31, 2021 and 50% due December 31, 2022. We elected to defer $16.3 million of this tax through December 31, 2020. Additionally, The CARES Act provided a refundable employer tax credit equal to 50% of qualified wages, including certain health insurance costs, that can be used to offset payroll tax liabilities. In 2021 we qualified for a portion of the credit and recorded a benefit of $7.7 million through a reduction of payroll tax expense. Our remaining deferred payroll tax liability balance of approximately $8.1 million at September 30, 2022, will be paid by December 31, 2022. ACCOUNTS RECEIVABLE - Substantially all of our accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. We continuously monitor collections from our payors and maintain an allowance for bad debts based upon specific payor collection issues that we have identified and our historical experience. We 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 notes receivables are reflected as operating activities on our statement of cash flows and on our balance sheet as prepaid expenses and other current assets for the current portion and deposits and other for the long term portion. Amounts remaining to be collected on these agreements were $15.5 million and $17.7 million at September 30, 2022 and December 31, 2021, 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 reassess any insolvency risk on a periodic basis. DEFERRED FINANCING COSTS - Costs of financing are deferred and amortized using the effective interest rate method. Deferred financing costs, net of accumulated amortization, were $1.8 million and $2.1 million, as of September 30, 2022 and December 31, 2021, respectively and related to our Barclays Revolving Credit Facility. See Note 6, Credit Facilities and Notes Payable for more information. PROPERTY AND EQUIPMENT - Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is performed using the straight-line method over the estimated useful lives of the assets acquired, 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 COMBINATION - When the qualifications for business combination accounting treatment are met, it requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. 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. GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at September 30, 2022 totaled $575.1 million. Indefinite lived intangible assets at September 30, 2022 were $12.7 million. Goodwill and Indefinite Lived Intangibles are recorded as a result of business combinations. When we determine the carrying value of a reporting unit exceeds its fair value an impairment charge would be recognized and should not exceed the total amount of goodwill allocated to that reporting unit. We tested goodwill and indefinite lived intangibles for impairment on October 1, 2021, noting no impairment. We considered the current and expected future economic and market conditions including those resulting from the COVID-19 pandemic and did not identify an indication of goodwill impairment being more likely than not through September 30, 2022. Activity in goodwill for the nine months ended September 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 | (6,369) |
Balance as of September 30, 2022 | $ | 575,092 |
Goodwill balances at September 30, 2022 reflect additional goodwill arising from deferred tax liabilities recorded on our acquisitions of Aidence Holding B.V. and Quantib B.V. of $7.3 million. See Note 4, Business Combinations and Related Activity for more information. 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. We recorded income tax expense of $2.2 million, or an effective tax rate of 25.3%, for the three months ended September 30, 2022 compared to income tax expense of $5.3 million, or an effective tax rate of 20.0% for the three months ended September 30, 2021. We recorded income tax expense of $7.1 million, or an effective tax rate of 19.8%, for the nine months ended September 30, 2022 compared to income tax expense of $12.5 million or an effective tax rate of 22.6% for the nine months ended September 31, 2021. The income tax rates for the three and nine months ended September 30, 2022 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships; (ii) effects of state income taxes (iii) effects of foreign income taxes; and (iv) excess tax benefits attributable to share-based compensation. We believe no significant changes in the unrecognized tax benefits will occur within the next 12 months. LEASES - We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long term operating lease liability in our consolidated balance sheets. Finance leases are included in property and equipment, current finance lease liability, and long-term finance lease liability in our consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating 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. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. ROU assets are tested for impairment if circumstances suggest that the carrying amount may not be recoverable. Our ROU assets consist of facility and equipment assets on operating leases. No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets as of September 30, 2022. 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. EQUITY BASED COMPENSATION – We have one long-term incentive plan that we adopted in 2006 and which we have amended and restated at various points in time: first on April 20, 2015, second on March 9, 2017, and currently as of April 15, 2021 (the “Restated Plan”). The Restated Plan was approved by our stockholders at our annual stockholders meeting on June 10, 2021. We have reserved 16,500,000 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 three years to five years and expire five years to ten years from date of grant. We determine the compensation expense for each stock option award using the Black Scholes, or similar, valuation model. Those models require that our management make certain estimates concerning risk free interest rates and volatility in the trading price of our common stock. 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, 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. See Note 7, Stock-Based Compensation, for more information. COMPREHENSIVE (LOSS) INCOME - Accounting guidance establishes rules for reporting and displaying comprehensive income or loss and its components. Our unrealized gains or losses on foreign currency translation adjustments and swap agreements are included in comprehensive (loss) income and are included in the consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2022 and 2021. 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 - 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 will secure a constant interest rate associated with portions of our variable rate bank debt and have an effective date of October 13, 2020. They will mature in October 2023 for the smaller notional and October 2025 for the larger notional. Under these arrangements, we arranged the 2019 Swaps with locked in 1 month LIBOR rates at 1.96% for the $100,000,000 notional and at 2.05% for the $400,000,000 notional. As of the effective date, we are liable for premium payments if interest rates decline below the arranged rates, but will receive interest payments if rates are above the arranged rates. 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 comprehensive loss in the consolidated statement of equity. The remaining gain or loss, if any, is recognized currently in earnings. The cash flows for both our $400,000,000 notional interest rate swap contract locked in at 2.05% due October 2025 and our $100,000,000 notional interest rate swap contract locked in at 1.96% do not match the cash flows for our First Lien Term Loans and so we have determined that they are not currently effective as cash flow hedges. Accordingly, all changes in their fair value after April 1, 2020 for the $400,000,000 notional and after July 1, 2020 for the $100,000,000 notional are being recognized in earnings. As of July 1, 2020, the total change in fair value relating to swaps included in other comprehensive income was approximately $24.4 million, net of taxes. This amount will be amortized to interest expense through October 2023 at approximately $0.4 million per month and continuing at approximately $0.3 million through October 2025. A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):
For the three months ended September 30, 2022
Account |  | June 30, 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 |  | September 30, 2022 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $ | (17,039) |  |  | $ | — |  |  | $ | 924 |  |  | $ | (16,115) |  |  | Equity
For the nine months ended September 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 |  | September 30, 2022 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $ | (18,886) |  |  | $ | — |  |  | $ | 2,771 |  |  | $ | (16,115) |  |  | 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 September 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 |  | $ | 12,451 |  |  | Non-cash change in fair value of interest rate swaps |  | $ | (1,245) |  |  | Interest Expense
For the nine months ended September 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 |  | $ | 39,576 |  |  | Non-cash change in fair value of interest rate swaps |  | $ | (3,735) |  |  | Interest Expense
See Fair Value Measurements section below for the fair value of the 2019 Swaps at September 30, 2022. 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 will pay up to $10.0 million consideration upon the completion of two identified milestones in RadNet common shares. This contingency had a value of approximately $7.9 million on September 30, 2022. The amount is reviewed quarterly and adjusted to fair value based on the yield rate of S&P B-rated corporate bonds and the probability of FDA approval, which has been currently determined by management to be 90% for milestone one and 80% for milestone two. 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 will issue 18 months after acquisition, 113,303 shares with an initial fair value at the date of close of $3.0 million subject to adjustment for any indemnification claims and will be marked to market in subsequent periods. See Note 4, Business Combinations and Related Activity for more information on the Quantib acquisition. 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 September 30, 2022
Account |  | June 30, 2022 Balance |  | Amount of other non operating income recognized on contingent consideration | Currency Translation | September 30, 2022 Balance |  | Location
Other Long Term Liabilities |  | $ | 8,437 |  |  | $ | 958 |  | $ | 833 |  | $ | 10,228 |  |  | Liabilities and Non Operating Income
For the nine months ended September 30, 2022
Account |  | January 1, 2022 Balance |  | Issuance of contingent consideration |  | Amount of other non operating income recognized on contingent consideration | Currency Translation | September 30, 2022 Balance |  | Location
Other Long Term Liabilities |  | $ | — |  |  | $ | 10,459 |  |  | $ | (329) |  | $ | 98 |  | $ | 10,228 |  |  | Liabilities and Non Operating Income
See Fair Value Measurements section below for the fair value of contingent consideration at September 30, 2022. 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 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 September 30, 2022
Level 1 |  | Level 2 |  | Level 3 |  | Total
Current and long term assets |  |  |  |  |  |  |
2019 Swaps - Interest Rate Contracts | $ | — |  |  | $ | 23,258 |  |  | $ | — |  |  | $ | 23,258 |
| 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 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 LIBOR curve. The forward LIBOR curve is readily available in the public markets or can be derived from information available in the public markets. Contingent Consideration: The table below summarizes 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 September 30, 2022
Level 1 |  | Level 2 |  | Level 3 |  | Total
Long term liabilities |  |  |  |  |  |  |
Aidence Holding B.V. milestone consideration | $ | — |  |  | $ | — |  |  | $ | 7,922 |  |  | $ | 7,922 |
Quantib B.V. holdback of 113,303 shares of RadNet common stock | $ | — |  |  | $ | — |  |  | $ | 2,306 |  |  | $ | 2,306 |
The estimated fair value of these liabilities was determined using Level 3 inputs. For Aidence Holding B.V., the milestone contingent liability was adjusted to fair value based on the yield rate of S&P B-rated corporate bonds and the probability of FDA approval. For the Quantib B.V holdback shares, the fair value was determined by calculating the value estimated shares issuable as of the reporting date (which was $20.35) translated at the current exchange rate at September 30, 2022, the time period related to the contractual settlement term, and the probability of issuing the shares. As all the inputs for the contingent consideration of both Aidence Holding B.V and Quantib B.V. are not observable (excluding our closing share price) and cannot be corroborated by observable market data, we employ a Level 3 category. Long Term Debt: The table below summarizes the estimated fair value compared to our face value of our long-term debt as follows (in thousands):
| As of September 30, 2022
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
First Lien Term Loans and SunTrust Term Loan | $ | — |  |  | $ | 727,510 |  |  | $ | — |  |  | $ | 727,510 |  |  | $ | 757,938 |
| 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 |
At September 30, 2022 and at December 31, 2021 our Barclays revolving credit facility had no balance outstanding. Our SunTrust revolving credit facility relating to our consolidated subsidiary The New Jersey Imaging Network ("NJIN"), had no principal amount outstanding at September 30, 2022 and at December 31, 2021. The estimated fair value of our long-term debt, which is discussed in Note 6, Credit Facilities and Notes Payable, was determined using Level 2 inputs primarily related to comparable market prices. We consider the carrying amounts of cash and cash equivalents, receivables, other current assets, current liabilities and other notes payables 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. 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 September 30, |  | Nine Months Ended September 30,
2022 |  | 2021 |  | 2022 |  | 2021
Net income attributable to RadNet, Inc.'s common stockholders | $ | 668 |  |  | $ | 16,220 |  |  | $ | 11,585 |  |  | $ | 28,550 |
BASIC NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 56,744,419 |  |  | 52,810,644 |  |  | 56,041,017 |  |  | 52,323,360 |
Basic net income per share attributable to RadNet, Inc.'s common stockholders | $ | 0.01 |  |  | $ | 0.31 |  |  | $ | 0.21 |  |  | $ | 0.55 |
DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 56,744,419 |  |  | 52,810,644 |  |  | 56,041,017 |  |  | 52,323,360 |
Add nonvested restricted stock subject only to service vesting | 179,268 |  |  | 271,964 |  |  | 141,492 |  |  | 242,523 |
Add additional shares issuable upon exercise of stock options and contingently issuable shares | 728,074 |  |  | 735,232 |  |  | 853,908 |  |  | 683,815 |
Weighted average number of common shares used in calculating diluted net income per share | 57,651,761 |  |  | 53,817,840 |  |  | 57,036,417 |  |  | 53,249,698 |
Changes in FV associated with contingently issuable shares | $ | — |  |  | $ | — |  |  | $ | (586) |  |  | $ | — |
Net income attributable to RadNet, Inc's common stockholders for diluted share calculation | $ | 668 |  |  | $ | — |  |  | $ | 10,999 |  |  | $ | — |
Diluted net income per share attributable to RadNet, Inc.'s common stockholders | $ | 0.01 |  |  | $ | 0.30 |  |  | $ | 0.19 |  |  | $ | 0.54 |
Fair value change for contingently available shares excluded from the computation of diluted per share amounts as its effect would be antidilutive | $ | 278 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Stock options and other non vested shares excluded from the computation of diluted per share amounts as their effect would be antidilutive: |  |  |  |  |  |  |
Shares issuable subject to satisfaction of certain contingencies | 113,303 |  |  | — |  |  | — |  |  | — |
Shares issuable upon the exercise of stock options: | 84,885 |  |  | — |  |  | 67,289 |  |  | — |
Weighted average shares for which the exercise price exceeds average market price of common stock | 83,972 |  |  | — |  |  | 73,094 |  |  | — |
EQUITY INVESTMENTS AT FAIR VALUE–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 September 30, 2022, we have three equity investments for which a fair value is not readily determinable and therefore the total amounts invested are recognized at cost as follows: Medic Vision Imaging Solutions Ltd., based in Israel, specializes in software packages that provide compliant radiation dose structured reporting and enhanced images from reduced dose CT scans. Our investment of $1.2 million represents a 14.21% equity interest in the company. No observable price changes or impairment in our investment was identified during the three and nine months ended September 30, 2022. Turner Imaging Systems, based in Utah, develops and markets portable X-ray imaging systems that provide a user the ability to acquire X-ray images wherever and whenever they are needed. On February 1, 2018, we purchased 2.1 million preferred shares in Turner Imaging Systems for $2.0 million. On January 1, 2019 we funded a convertible promissory note in the amount of $0.1 million that converted into an additional 80,000 shares effective December 21, 2019. No observable price changes or impairment in our investment was identified during the three and nine months ended September 30, 2022. WhiteRabbit.ai Inc., based in California, is currently developing an artificial intelligence suite which aims to improve the speed and accuracy of cancer detection in radiology and improve patient care. On November 5, 2019 we acquired an equity interest in the company for $1.0 million and also loaned the company $2.5 million in support of its operations. No observable price changes, impairment in our investment or impairment of the loan receivable was identified during the three and nine months ended September 30, 2022. INVESTMENT IN JOINT VENTURES – We have 13 unconsolidated joint ventures with ownership interests ranging from 35% to 55%. These joint ventures represent partnerships with hospitals, health systems or radiology practices and were formed for the purpose of owning and operating diagnostic imaging centers. Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture. Our investment in these joint ventures is accounted for under the equity method, since RadNet does not have a controlling financial interest in such ventures. 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 September 30, 2022. Acquisition by Equity Method Investee During the first quarter of 2022, our joint venture with Calvert Medical Imaging Center, LLC, completed the acquisition of certain assets to strengthen its presence in the Maryland market. 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. Joint venture investment and financial information The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2022 (in thousands):
Balance as of December 31, 2021 | $ | 42,229 |
Equity in earnings in these joint ventures | 8,350 |
Equity contributions in existing joint ventures | 1,441 |
Balance as of September 30, 2022 | $ | 52,020 |
We charged management service fees from the centers underlying these joint ventures of approximately $6.1 million and $5.3 million for the three months ended September 30, 2022 and 2021 and $17.2 million and $16.0 million for the nine months ended September 30, 2022 and 2021, respectively. On June 24, 2022, we made an additional equity contribution to our joint venture in Arizona of $1.4 million. Our equity ownership interest percentage in the venture did not change. The following table is a summary of key balance sheet data for these joint ventures as of September 30, 2022 and December 31, 2021 and income statement data for the nine months ended September 30, 2022 and 2021 (in thousands):
Balance Sheet Data: | September 30, 2022 |  | December 31, 2021
Current assets | $ | 48,154 |  |  | $ | 37,186 |
Noncurrent assets | 86,123 |  |  | 73,592 |
Current liabilities | (12,211) |  |  | (12,919) |
Noncurrent liabilities | (26,619) |  |  | (22,370) |
Total net assets | $ | 95,447 |  |  | $ | 75,489 |
Book value of RadNet joint venture interests | $ | 43,947 |  |  | $ | 34,930 |
Cost in excess of book value of acquired joint venture interests and other | 8,073 |  |  | 7,299 |
Total value of RadNet joint venture interests | $ | 52,020 |  |  | $ | 42,229 |
Income statement data for the nine months ended September 30, | 2022 |  | 2021
Net revenue | $ | 107,241 |  |  | $ | 98,193 |
Net income | $ | 17,034 |  |  | $ | 16,007 |

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