SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2022

Accounting Policies [Abstract]

Schedule of Service Fee Revenue

Our total service revenues during the three months ended March 31, 2022 and 2021 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):

	Three Months Ended March 31,
	2022		2021
Commercial insurance	$	188,465	$	182,096
Medicare	70,999		63,589
Medicaid	9,087		8,451
Workers' compensation/personal injury	12,449		10,399
Other patient revenue	7,123		4,775
Management fee revenue	5,508		5,219
Software revenue	3,399		2,426
AI revenue	599		—
Other	5,647		2,622
Service fee revenue	303,276		279,577
Revenue under capitation arrangements	38,491		35,742
Total service revenue	$	341,767	$	315,319

Schedule of Goodwill and Other Intangible Assets

Activity in goodwill for the three months ended March 31, 2022 is provided below (in thousands):

Balance as of December 31, 2021	$	513,820
Goodwill from acquisitions	57,215
Valuation adjustment	(296)
Currency translation	(551)
Balance as of March 31, 2022	$	570,188

Goodwill balances at March 31, 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.

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 March 31, 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		March 31, 2022 Balance		Location
Accumulated Other Comprehensive Loss, net of taxes	$	(18,886)	$	—	$	923	$	(17,963)	Equity

For the twelve months ended December 31, 2021
Account	December 31, 2020 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		December 31, 2021 Balance		Location
Accumulated Other Comprehensive Loss, net of taxes	$	(22,581)	$	—	$	3,695	$	(18,886)	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 March 31, 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	$	20,819	Other income (expense)	$	(923)	Interest Expense

Schedule of Business Acquisitions by Acquisition, Contingent Consideration

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

For the three months ended March 31, 2022
Account	January 20, 2022 Balance		Amount of other non operating income recognized on contingent consideration		March 31, 2022 Balance		Location
Accrued Expenses	$	—	$	(501)	$	501	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 March 31, 2022
	Level 1		Level 2		Level 3		Total
Current and long term assets
2019 Swaps - Interest Rate Contracts	$	—	$	4,500	$	—	$	4,500

	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 certain of our shares of common stock issued in our Quantib B.V. acquisition on January 20, 2022, and held back for indemnification purposes 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 March 31, 2022
	Level 1		Level 2		Level 3		Total
Long term liabilities
113,303 shares of RadNet common stock	$	—	$	—	$	2,535	$	2,535

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

	As of March 31, 2022
	Level 1		Level 2		Level 3		Total Fair Value		Total Face Value
First Lien Term Loans and SunTrust Term Loan	$	—	$	753,769	$	—	$	753,769	$	764,563

	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 March 31,
	2022		2021
Net income attributable to RadNet, Inc.'s common stockholders	$	3,013	$	9,458
BASIC NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	55,303,007		51,951,506
Basic net income per share attributable to RadNet, Inc.'s common stockholders	$	0.05	$	0.18
DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC.'S COMMON STOCKHOLDERS
Weighted average number of common shares outstanding during the period	55,303,007		51,951,506
Add nonvested restricted stock subject only to service vesting	197,911		253,265
Add additional shares issuable upon exercise of stock options and contingently issuable shares	861,275		624,170
Weighted average number of common shares used in calculating diluted net income per share	56,362,193		52,828,941
Diluted net income per share attributable to RadNet, Inc.'s common stockholders	$	0.05	$	0.18
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:	46,912		82,595

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 three months ended March 31, 2022 (in thousands):

Balance as of December 31, 2021	$	42,229
Equity in earnings in these joint ventures	2,517
Balance as of March 31, 2022	$	44,746

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 March 31, 2022 and December 31, 2021 and income statement data for the three months ended March 31, 2022 and 2021 (in thousands):

Balance Sheet Data:	March 31, 2022		December 31, 2021
Current assets	$	37,119	$	37,186
Noncurrent assets	83,407		73,592
Current liabilities	(12,722)		(12,919)
Noncurrent liabilities	(27,298)		(22,370)
Total net assets	$	80,506	$	75,489
Book value of RadNet joint venture interests	$	37,214	$	34,930
Cost in excess of book value of acquired joint venture interests and other	7,532		7,299
Total value of RadNet joint venture interests	$	44,746	$	42,229

Income statement data for the three months ended March 31,	2022		2021
Net revenue	$	34,411	$	31,718
Net income	$	5,035	$	4,803