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SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended
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Jun. 30, 2025
Accounting Policies [Abstract] |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES 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, 2024. 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, 2024. 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 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 others centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities. 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 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 revenues for the three and six months ended June 30, 2025 and 2024 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 | Three Months Ended June 30, |  | Six Months Ended June 30,
2025 |  | 2024 |  | 2025 |  | 2024
Commercial insurance | $ | 278,902 |  |  | $ | 256,517 |  |  | $ | 541,410 |  |  | $ | 497,145 |
Medicare | 116,331 |  |  | 101,719 |  |  | 224,499 |  |  | 195,186 |
Medicaid | 12,597 |  |  | 11,001 |  |  | 24,283 |  |  | 21,906 |
Workers' compensation/personal injury | 10,642 |  |  | 10,997 |  |  | 21,114 |  |  | 22,837 |
Other payors | 29,394 |  |  | 26,568 |  |  | 57,087 |  |  | 51,948 |
Management fee revenue | 6,688 |  |  | 6,106 |  |  | 12,967 |  |  | 12,014 |
Other revenue | 13,509 |  |  | 9,837 |  |  | 26,052 |  |  | 18,898 |
Revenue under capitation arrangements | 30,167 |  |  | 36,969 |  |  | 62,217 |  |  | 71,487 |
Total service revenue | $ | 498,230 |  |  | $ | 459,714 |  |  | $ | 969,629 |  |  | $ | 891,421 |
EQUITY BASED COMPENSATION – We have one long-term incentive plan, which has been amended and restated on April 20, 2015, March 9, 2017, April 15, 2021, April 27, 2023, and most recently following approval by our stockholders at our annual stockholders meeting on June 7, 2023 (the “Restated Plan”). We have reserved 20,100,000 shares of common stock for issuance under the Restated Plan which can be issued in the form of incentive and/or nonstatutory stock options, restricted and/or unrestricted stock, stock units, and stock appreciation rights. Terms and conditions of awards can be direct grants or based on achieving a performance metric. We evaluate performance-based awards to determine if it is probable that the vesting conditions will be met. We also consider probability of achievement of performance conditions when determining expense recognition. 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. 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 payors. 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 $4.1 million and $4.2 million at June 30, 2025 and December 31, 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. DEFERRED FINANCING COSTS - Costs of financing are deferred and amortized using the effective interest rate method and are related to our revolving credit facilities. Deferred financing costs, net of accumulated amortization, were $2.0 million and $2.3 million as of June 30, 2025 and December 31, 2024, respectively. 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 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. Acquisition-related costs are expensed as incurred and are included in Cost of operations, excluding depreciation and amortization, in the consolidated statements of operations. For the three and six ended June 30, 2025, such costs totaled approximately $2.3 million and $3.0 million, respectively. GOODWILL - Goodwill at June 30, 2025 totaled $751.5 million. Goodwill is recorded as a result of business combinations. If we determine the carrying value of a reporting unit exceeds its fair value an impairment charge would be recognized and should not exceed the total amount of goodwill allocated to that reporting unit. We tested goodwill and indefinite lived intangibles for impairment on October 1, 2024 noting no impairment, and we have not identified any indicators of impairment through June 30, 2025. Activity in goodwill for the six months ended June 30, 2025 is provided below (in thousands):
| Imaging Center segment |  | Digital Health segment |  | Total
Balance as of December 31, 2024 | 628,537 |  |  | $ | 82,126 |  |  | $ | 710,663 |
Goodwill from acquisitions | 12,120 |  |  | 19,843 |  |  | 31,963 |
Measurement period and other adjustments | — |  |  | 87 |  |  | 87 |
Currency translation | 2,221 |  |  | 6,579 |  |  | 8,800 |
Balance as of June 30, 2025 | $ | 642,878 |  |  | $ | 108,636 |  |  | $ | 751,514 |
The amount of goodwill that is expected to be deductible for tax purposes as of June 30, 2025 is $135.2 million. INTANGIBLE ASSETS - Intangible assets are primarily related to our business combinations and software development. They include the estimated fair values of such items as service agreements, customer lists, covenants not to compete, acquired technologies, and trade names. The components of intangible assets, both finite and indefinite lived, along with annual amortization expense that will be recorded over the next five years at June 30, 2025 and December 31, 2024 are as follows (in thousands): As of June 30, 2025:
| 2025* |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | Thereafter |  | Total |  | Weighted average amortization period remaining in years
Management service contracts | $ | 1,144 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 4,384 |  |  | $ | 14,676 |  |  | 6.7
Covenant not to compete and other contracts | 501 |  |  | 749 |  |  | 455 |  |  | 365 |  |  | 197 |  |  | 23 |  |  | 2,290 |  |  | 3.1
Customer lists | 562 |  |  | 1,041 |  |  | 866 |  |  | 822 |  |  | 822 |  |  | 10,545 |  |  | 14,658 |  |  | 17.0
Patent and trademarks | 205 |  |  | 410 |  |  | 388 |  |  | 322 |  |  | 88 |  |  | 128 |  |  | 1,541 |  |  | 4.2
Developed technology | 4,399 |  |  | 8,625 |  |  | 8,091 |  |  | 8,091 |  |  | 3,396 |  |  | 6,539 |  |  | 39,141 |  |  | 6.2
Trade names amortized | 39 |  |  | 77 |  |  | 77 |  |  | 63 |  |  | 18 |  |  | 8 |  |  | 282 |  |  | 4.0
Trade names indefinite life | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,500 |  |  | 8,500 |  |  |
IPR&D | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 9,990 |  |  | 9,990 |  |  |
Total annual amortization | $ | 6,850 |  |  | $ | 13,189 |  |  | $ | 12,164 |  |  | $ | 11,950 |  |  | $ | 6,808 |  |  | $ | 40,117 |  |  | $ | 91,078 |  |  |
*Excluding the six months ended June 30, 2025 As of December 31, 2024:
| 2025 |  | 2026 |  | 2027 |  | 2028 |  | 2029 |  | Thereafter |  | Total |  | Weighted average amortization period remaining in years
Management service contracts | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,291 |  |  | $ | 4,384 |  |  | $ | 15,823 |  |  | 6.9
Covenant not to compete and other contracts | 947 |  |  | 660 |  |  | 365 |  |  | 275 |  |  | 106 |  |  | — |  |  | 2,353 |  |  | 3.2
Customer lists | 1,084 |  |  | 962 |  |  | 786 |  |  | 750 |  |  | 750 |  |  | 9,628 |  |  | 13,960 |  |  | 17.2
Patent and trademarks | 293 |  |  | 293 |  |  | 293 |  |  | 293 |  |  | 51 |  |  | 121 |  |  | 1,344 |  |  | 5.0
Developed technology | 7,329 |  |  | 7,289 |  |  | 6,755 |  |  | 6,755 |  |  | 1,848 |  |  | 4,610 |  |  | 34,586 |  |  | 5.4
Trade names amortized | 77 |  |  | 77 |  |  | 77 |  |  | 63 |  |  | 19 |  |  | 8 |  |  | 321 |  |  | 4.3
Trade names indefinite life | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,500 |  |  | 8,500 |  |  |
IPR&D | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,464 |  |  | 4,464 |  |  |
Total annual amortization | $ | 12,017 |  |  | $ | 11,568 |  |  | $ | 10,563 |  |  | $ | 10,423 |  |  | $ | 5,065 |  |  | $ | 31,715 |  |  | $ | 81,351 |  |  |
Total intangible asset amortization expense was $3.2 million and $6.3 million for the three and six months ended June 30, 2025, respectively. Total amortization expense was $3.1 million and $6.2 million for the three and six months ended June 30, 2024, respectively. Intangible assets are amortized using the straight-line method over their useful life determined at acquisition. Management services agreements are amortized over 25 years using the straight-line method. Developed technology is capitalized and amortized over the useful life of the software when placed into service. Trade names and IPR&D are reviewed annually for impairment, or when indicators of impairment are 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. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law, which enacts significant changes to the U.S. Tax and related laws. Some of the provisions of the new tax law that affect corporations include but are not limited to expensing of domestic specified research or experimental expenditures, increasing the limit of the deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. The Company is currently evaluating the impact that the new tax law will have on its financial condition and results of operations. The impact of the tax law changes from the OBBBA will be included in the Company's financial statements beginning in the nine months ending September 30, 2025, and applied prospectively based on the effective dates of the tax law. In 2021, the Organization for Economic Co-operation and Development ("OECD") announced an inclusive framework on base erosion and profit shifting including Pillar Two Model Rules defining the global minimum tax, which calls for taxation of large multinational corporations at a minimum rate of 15%. Subsequently, multiple sets of administrative guidance have been issued. Many non-US tax jurisdictions have either recently enacted legislation to support certain components of Pillar Two Model Rules beginning 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. The model rules provide a framework for applying the minimum tax, countries may enact Pillar Two Model Rules slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two Model Rules. On a long-term basis, we will continue to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in all countries applicable to us. For 2025, we expect that we will meet one or more transactional safe harbor rules, and as such, we do not believe Pillar Two model will have an impact on our annual effective tax rate for the year ending December 31, 2025. We recorded an income tax provision of $0.8 million, or an effective tax rate of 3.4%, for the three months ended June 30, 2025, compared to $2.5 million, or an effective tax rate of 26.1% for the three months ended June 30, 2024. We recorded an income tax benefit of $2.6 million, or an effective tax rate of 27.8%, for the six months ended June 30, 2025 compared to an income tax provision of $0.6 million, or an effective tax rate of 4.6% for the six months ended June 30, 2024. The income tax rates for the three and six months ended June 30, 2025 diverge from the federal statutory rate due to (i) officer's compensation limitations; (ii) nondeductible stock compensation expense; (iii) partial valuation allowance on losses in foreign jurisdictions, partially offset by (iv) noncontrolling interests from controlled partnerships. 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 condensed consolidated balance sheets. 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. 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 June 30, 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. 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 six months ended June 30, 2025, we closed several imaging centers with lower utilization and recognized lease abandonment charges of approximately $5.5 million in our Imaging Center segment. Of these amounts, $4.8 million were related to right-of-use assets impairment and $0.7 million were related to the write-off of leasehold improvements for the six months ended June 30, 2025. COMPREHENSIVE 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 three and six months ended June 30, 2025 and 2024 are included in the Consolidated Statements of Comprehensive Loss. The following is a reconciliation of Foreign Currency Translation amounts for the three and six months ended June 30, 2025 and 2024 is provided below (in thousands):
For the three months ended June 30, 2025
|  | March 31, 2025 Balance |  | Currency Translation Adjustments Balance |  | June 30, 2025 Balance
Currency Translation Adjustments |  | $(1,588) |  | $9,523 |  | $7,935
For the six months ended June 30, 2025
|  | December 31, 2024 Balance |  | Currency Translation Adjustments Balance |  | June 30, 2025 Balance
Currency Translation Adjustments |  | $(5,697) |  | $13,632 |  | $7,935
INTEREST ON SECURITIES - We recognized income from interest on securities of approximately $7.8 million and $8.7 million for the three months ended June 30, 2025 and 2024, respectively, and $15.5 million and $13.1 million for the six months ended June 30, 2025 and 2024. 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. If one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected. DERIVATIVE INSTRUMENTS - In the second quarter of 2019, we entered into four forward interest rate agreements ("2019 Swaps"). The 2019 Swaps have total notional amounts of $500.0 million, consisting of two agreements of $50.0 million each and two agreements of $200.0 million each. The 2019 Swaps secure a constant interest rate associated with portions of our variable rate bank debt and have an effective date of October 13, 2020. They matured in October 2023 for the smaller notional and will mature in October 2025 for the larger notional. Under these arrangements, we arranged the 2019 Swaps with locked in 1 month Term Secured Overnight Financing Rate ("SOFR") rates at 1.89% for the $100.0 million notional and at 1.98% for the $400.0 million notional. In October of 2023, the two agreements of $50,000,000 each matured. As of the effective date, we are liable for premium payments if interest rates decline below arranged rates, but will receive interest payments if rates are above the arranged rates. 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. The amount included in accumulated other comprehensive income as of that date was approximately $24.4 million, net of taxes which was amortized to interest expense through October 2023 at approximately $0.4 million per month and then at approximately $0.3 million per month through October 2025. A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2019 Swaps is as follows (amounts in thousands):
For the three months ended June 30, 2025
Account |  | March 31, 2025 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, 2025 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $(1,240) |  | $— |  | $1,023 |  | $(217) |  | Equity
*Net of taxes of $0.3 million for the three months ended June 30, 2025.
For the six months ended June 30, 2025
Account |  | December 31, 2024 Balance |  | Amount of comprehensive loss recognized on derivative net of taxes |  | Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes* |  | June 30, 2025 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $(2,273) |  | $— |  | $2,056 |  | $(217) |  | Equity
*Net of taxes of $0.7 million for the six months ended June 30, 2025. 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 three months ended June 30, 2025
Ineffective interest rate swap |  | Amount recognized (current period ineffective portion) |  | Location recognized in profit and loss (current period ineffective portion) |  | Amount reclassified from accumulated OCI (prior period effective portion) |  | Location reclassified from accumulated OCI into profit and loss (prior period effective portion)
Interest rate contracts |  | $ | 1,956 |  |  | Other income (expense) |  | $ | 1,023 |  |  | Interest Expense
For the six months ended June 30, 2025 |  |
Ineffective interest rate swap |  | Amount recognized (current period ineffective portion) |  | Location recognized in profit and loss (current period ineffective portion) |  | Amount reclassified from accumulated OCI (prior period effective portion) |  | Location reclassified from accumulated OCI into profit and loss (prior period effective portion) |  |
Interest rate contracts |  | $ | 4,062 |  |  | Other income (expense) |  | $ | 2,056 |  |  | Interest Expense |  |
See Fair Value Measurements below for the fair value of the 2019 Swaps at June 30, 2025. CONTINGENT CONSIDERATION - See-Mode Technologies Pte. Ltd. On June 2, 2025, we 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. 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. The fair value of the contingent consideration will be assessed quarterly based on the probability of milestone achievement, which has been currently determined by management to be 97.5%, 70% and 40% for the First, Second and Third Milestone, respectively. A tabular roll forward of contingent consideration is as follows (amounts in thousands):
For the three months ended June 30, 2025
Entity |  | Account |  | March 31, 2025 Balance |  | Additions |  | Settlement of contingent consideration |  | Change in valuation of contingent consideration |  |  |  | June 30, 2025 Balance
See-Mode Technologies Pte. Ltd. |  | Accrued expenses |  | — |  |  | $ | 2,114 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 2,114 |
See-Mode Technologies Pte. Ltd. |  | Other non-current liabilities |  | — |  |  | $ | 6,652 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 6,652 |
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 June 30, 2025
Level 1 |  | Level 2 |  | Level 3 |  | Total
Current assets |  |  |  |  |  |  |
2019 Swaps - Interest Rate Contracts | $ | — |  |  | $ | 3,050 |  |  | $ | — |  |  | $ | 3,050 |
| As of December 31, 2024
Level 1 |  | Level 2 |  | Level 3 |  | Total
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. The forward SOFR 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 contingent consideration relating to our See-Mode Technologies acquisition on June 2, 2025 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, 2025
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Accrued expenses and other non-current liabilities |  |  |  |  |  |  |
See-Mode Technologies | $ | — |  |  | $ | — |  |  | $ | 8,766 |  |  | $ | 8,766 |
Long Term Debt: The table below summarizes the estimated fair value compared to the face value of our long-term debt as follows (in thousands):
| As of June 30, 2025
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
Barclays Term Loan and Truist Term Loan | $ | — |  |  | $ | 1,096,581 |  |  | $ | — |  |  | $ | 1,096,581 |  |  | $ | 1,095,373 |
| As of December 31, 2024
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
Barclays Term Loan and Truist Term Loan | $ | — |  |  | $ | 1,006,713 |  |  | $ | — |  |  | $ | 1,006,713 |  |  | $ | 1,005,625 |
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. Additionally, we consider the carrying amount of our other notes payable to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates. EARNINGS PER SHARE - Earnings per share is based upon the weighted average number of shares of common stock and common stock equivalents outstanding, net of common stock held in treasury, as follows (in thousands except share and per share data):
| Three Months Ended June 30, |  | Six Months Ended June 30,
2025 |  | 2024 |  | 2025 |  | 2024
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $ | 14,454 |  |  | $ | (2,982) |  |  | $ | (23,472) |  |  | $ | (5,761) |
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 74,352,498 |  |  | 73,419,124 |  |  | 74,070,438 |  |  | 71,795,080 |
Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders | $ | 0.19 |  |  | $ | (0.04) |  |  | $ | (0.32) |  |  | $ | (0.08) |
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 74,352,498 |  |  | 73,419,124 |  |  | 74,070,438 |  |  | 71,795,080 |
Add non-vested restricted stock subject only to service vesting | 65,276 |  |  | — |  |  | — |  |  | — |
Add additional shares issuable upon exercise of stock options and contingently issuable shares | 1,113,969 |  |  | — |  |  | — |  |  | — |
Weighted average number of common shares used in calculating diluted net income per share | 75,531,743 |  |  | 73,419,124 |  |  | 74,070,438 |  |  | 71,795,080 |
Net income (loss) attributable to RadNet, Inc's common stockholders for diluted share calculation | $ | 14,454 |  |  | $ | (2,982) |  |  | $ | (23,472) |  |  | $ | (5,761) |
Diluted net income (loss) income per share attributable to RadNet, Inc.'s common stockholders | $ | 0.19 |  |  | $ | (0.04) |  |  | $ | (0.32) |  |  | $ | (0.08) |
Stock options and non-vested restricted awards excluded from the computation of diluted per share amounts as their effect would be antidilutive: |  |  |  |  |  |  |
Non-vested restricted stock subject to service vesting | — |  |  | 670,486 |  |  | 924,045 |  |  | 685,104 |
Shares issuable upon the exercise of stock options | — |  |  | 799,502 |  |  | 868,999 |  |  | 831,647 |
INVESTMENTS IN EQUITY SECURITIES–Accounting guidance requires entities to measure equity investments at fair value, with any changes in fair value recognized in net income. If there is no readily determinable fair value, the guidance allows entities the ability to measure investments at cost, adjusted for observable price changes and impairments, with changes recognized in net income. As of June 30, 2025, we have three equity investments with an aggregate carrying value of $8.3 million. No other observable price changes or impairments in our investments were identified as of June 30, 2025. INVESTMENT IN JOINT VENTURES – We have 12 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 interest in such ventures. We evaluate our investment in joint ventures, including cost in excess of book value (equity method goodwill) for impairment whenever indicators of impairment exist. No indicators of impairment existed as of June 30, 2025. Joint venture investment and financial information The following table is a summary of our investment in joint ventures during the six months ended June 30, 2025 (in thousands):
Balance as of December 31, 2024 | $ | 104,057 |
Equity in earnings in joint ventures | 6,955 |
Distribution of earnings | (5,688) |
Equity contributions in existing joint ventures | 20,480 |
Balance as of June 30, 2025 | $ | 125,804 |
We charged management service fees from the centers underlying these joint ventures of approximately $6.5 million and $6.1 million for the three months ended June 30, 2025 and 2024 and $12.6 million and $12.0 million for the six months ended June 30, 2025 and 2024, respectively. These joint ventures are considered related parties. Amounts transacted between ourselves and the entities are in the ordinary course of business and are disclosed on our balance sheet in the due from/to affiliate accounts. The following table is a summary of key balance sheet data for these joint ventures as of June 30, 2025 and December 31, 2024 and income statement data for the six months ended June 30, 2025 and 2024 (in thousands):
Balance Sheet Data: | June 30, 2025 |  | December 31, 2024
Current assets | $ | 66,995 |  |  | $ | 61,158 |
Noncurrent assets | 231,281 |  |  | 232,750 |
Current liabilities | (11,949) |  |  | (53,182) |
Noncurrent liabilities | (71,524) |  |  | (70,241) |
Total net assets | $ | 214,803 |  |  | $ | 170,485 |
Income statement data for the six months ended June 30, | 2025 |  | 2024
Net revenue | $ | 138,711 |  |  | $ | 130,546 |
Net income | $ | 14,908 |  |  | $ | 14,657 |
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 begin 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 June 30, 2025, we recorded $11.3 million of the current portion of the notes in Due from Affiliates and $5.7 million of the non-current portion in Deposits and Other on our Condensed Consolidated Balance Sheet.

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