8-K

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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            -----------------------

                                    FORM 8-K

                                 CURRENT REPORT
     PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                          Date of Report: May 12, 2008

                 (Date of Earliest Event Reported: May 12, 2008)

                            -----------------------

                                  RADNET, Inc.
             (Exact name of registrant as specified in its Charter)

          New York                     0-19019                 13-3326724
(State or Other Jurisdiction      (Commission File           (IRS Employer
      of Incorporation)                Number)             Identification No.)

                               1510 Cotner Avenue
                          Los Angeles, California 90025
               (Address of Principal Executive Offices) (Zip Code)

                                 (310) 478-7808
              (Registrant's Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b) )

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c) )

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                                       -1-



ITEM 8.01.  OTHER EVENTS

      Attached hereto as Exhibit 99.1 and incorporated herein by reference is
the text of a conference call and series of questions recently posed to the
Registrant by certain of its investors and other members of the investment
community, and the Registrant's responses thereto.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

      (c) Exhibits

      Exhibit Number           Description of Exhibit
      --------------           ----------------------

          99.1                 Discussion, Questions and Answers.



- --------------------------------------------------------------------------------

                                    SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: May 12, 2008                            RADNET, INC.


                                              By: /s/ Howard G. Berger, M.D.
                                                 -----------------------------
                                                 Howard G. Berger, M.D.
                                                 President and Chief Executive
                                                 Officer


                                      -2-



                                  EXHIBIT INDEX


99.1         Discussion, Questions and Answers







                                      -3-

EX-99.1

EXHIBIT 99.1

RADNET, INC.
FOURTH QUARTER AND FULL YEAR 2007 EARNINGS CONFERENCE CALL
MARCH 31, 2008


OPERATOR:              Please stand by; we are about to begin.

                       Good day, ladies and gentlemen. Welcome to RadNet, Inc.
Fourth Quarter and Full Year 2007 Earnings Conference Call. At this time, all
participants are in a listen-only mode. Following the presentation, we will
conduct a question-and-answer session. Instructions will be provided at that
time for you to queue up for questions. I would like to remind everyone that
today's conference is being recorded.

                       I'll now turn the conference over to Mr. John Mills (sp?)
of ICR.  Please go ahead, sir.

JOHN MILLS:            Thank you. Good morning, ladies and gentlemen, and thank
you for joining us today to discuss RadNet's fourth quarter 2007 earnings
results. On the call today from the Company are Dr. Howard Berger, Chairman and
Chief Executive Officer of RadNet; and Mark Stolper, Executive Vice President
and Chief Financial Officer of RadNet.

                       Before we begin today, we'd like to remind everyone of
the safe harbor statement under the Private Securities Litigation Reform Act of
1995. The following prepared remarks contain forward-looking statements, and
management may make additional forward-looking statements in response to your
questions. These statements do not guarantee future performance, and therefore,
undue reliance should not be placed upon them. For a more detailed discussion of
the factors that could cause actual results to differ materially from those
projected in any forward-looking statements, we refer you to RadNet's recent 10K
for the 12-month period ended October 31, 2006; Form 10K/T for the two-month
transition period ended December 31, 2006; Form 10K for the 12- month period
ended December 31, 2007, to be filed; and the 10Qs for the three-month periods
ended March 31, June 30, and September 30, 2007, filed with the SEC.

                       And with that, I'd like to turn the call over to Dr.
Howard Berger.

DR. HOWARD BERGER:     Thank you John. And good morning everyone, and thank you
for joining us today. On today's call, Mark Stolper and I plan to provide a
brief review of our first full year since the acquisition of Radiologics, which
occurred in November of 2006. We will also provide you with highlights from our
annual and fourth quarter 2007 results, issue financial guidance for 2008,
discuss in more detail some of our recently-announced initiatives, and talk
about why we think we are positioned for further growth and success. I'd like to
thank all of you for your interest in our Company and for dedicating a portion
of your day to participate in our conference call this morning.

                                      -1-


                       I'd like to start off today's call by saying that we are
extremely proud of what we have accomplished since acquiring Radiologics almost
15 months ago. As Mark and I were preparing our remarks for this call, we began
to reflect on all that our Company has achieved in this short time. Much of what
we have achieved has contributed to our better-than-projected performance in
2007, while some of our more recent accomplishments have yet to be realized in
our financial statements. Though some of you on this call have tracked our
progress throughout the last 15 months, I believe that it is worthwhile to
reflect on many of our accomplishments, some of which were probably announced
subsequent to our last conference call. After I discuss these accomplishments, I
will turn the call over to Mark, who will review our 2007 annual and fourth
quarter performance. I will conclude the prepared portion of the call this
morning by discussing the future opportunities for RadNet and why I believe we
are well positioned to remain a leader in the outpatient diagnostic imaging
industry.

                       The principle reason for discussing our accomplishments
is that I believe that these accomplishments when viewed as a whole contain
several themes regarding our strategy that I believe cannot be emphasized
enough. As I list these accomplishments and describe them in more detail, they
illustrate the following elements of what we believe is essential to our
success, including 1) our focus on operating dense geographic network of
centers; 2) our emphasis on a multimodality approach, which includes the
digitization of routine imaging exams such as x-ray and mammography; our
enthusiasm regarding opportunities within women's imaging such as digital
mammography and related procedures; 4) our willingness to more broadly define
what investors had traditionally thought regarding what imaging can include, as
illustrated by our recent entry into interventional radiology and more recently
breast disease management; and 5) our requirement for partnering with a limited
number of large, entrenched, and highly regarded regional radiology groups with
whom we share a united vision for building our business.

                       To the extent that I can, I will list our accomplishments
in chronological order, starting with the beginning of 2007 and ending with some
of our most recent announcements subsequent to year end. The accomplishments are
as follows: Throughout 2007, we fully integrated the Radiologics business into
that of RadNet's. We recognized early in this process that there were elements
of each Company that were superior to those elements of the other. We attempted
to take a best-of-breed approach. Furthermore, we have benefitted from the many
talented people within Radiologics, several of whom have become key members of
our senior management team. During the integration of Radiologics, we were able
to achieve the $11 million of targeted cost savings which we committed to
achieving upon the announcement of the transaction back in July of 2006.

                       Throughout 2007, we successfully absorbed reimbursement
cuts of approximately $16 million caused by the Deficit Reduction Act. In
contrast, the vast majority of participants in our industry have recorded lower
revenues and EBITDA in 2007 when compared with the 2006 year, the year prior to
the DRA cuts.

                       Throughout 2007 and subsequent to year end, we invested
significantly in our centers. Because equipment sales to outpatient centers for
the large equipment manufacturers have been weak, we have been able to drive
equipment purchases at very favorable prices. As an example of our investment in
2007, we installed 10 PET/CT scanners and completed the full digitization of all
centers in the New York and Maryland markets, including the conversion to
digital mammography.

                                      -2-


                       During 2007 we successfully exited our core...non-core
markets of Minnesota and Colorado through the sale of our imaging centers in
those areas. We have been consistent in our strategy of operating only in
markets where we have regional clusters and a strong competitive position.

                       In February 2007, we successfully listed RadNet for
trading on the NASDAQ global market under RDNT. This event was the catalyst for
our effort to make the Company more visible within our industry and the capital
markets. Today, we have several astute and well-respected analysts who have
written equity research about RadNet, and we are called upon by many of the
large investment banks to participate as speakers at healthcare and investor
conferences.

                       In June 2007, we engaged Ernst & Young as RadNet's new
auditing firm.

                       In July of 2007, we acquired the Borg Imaging Group, our
largest outpatient competitor, in Rochester New York. We successfully merged the
two largest outpatient operators and radiology groups, making our subsidiary in
Rochester the largest non-hospital outpatient provider in that market.

                       In August 2007, we contracted to provide certain
management service to a group of 20 imaging centers formerly known as Nydic Open
MRI. Nydic's lender had recently foreclosed on the assets of Nydic. We entered
into a contract whereby we provide various management services and other
operating metrics. In return, we receive monthly management fees.

                       In August 2007 and again in February of 2008, we
increased our GE Credit Facilities by an aggregate of $60 million of term debt
and up to $50 million of additional revolver capacity. We were able to raise
additional debt during a time when the credit markets were and still are in
turmoil. In a very uncertain economic environment, we are grateful that GE and
the other members of our credit facility have continued to support our growth
and success.

                       In September of 2007, we acquired three facilities in
Victorville, California, making us the largest operator in a fast-growing market
of San Bernardino County. Victorville's population has doubled since the year
2000, and combined with our pre-existing center in that market, we are now the
clear leader in outpatient imaging in that region.

                       In October 2007, we acquired Liberty Pacific Imaging in
Encino, California, providing RadNet with unique consolidation opportunities in
one of its strongest markets of the San Fernando Valley of Los Angeles.

                       During the third and fourth quarters of 2007, we expanded
four women's imaging centers to accommodate greater demand in New City, New
York, and in the California markets of Beverly Hills, Orange County, and San
Jose County. As I will discuss shortly in more detail, we continue to believe
that women's imaging is vastly underserved.

                                      -3-


                       During the fourth quarter of 2007, we began construction
to substantially replace three older radiologic centers in Pleasanton and San
Jose, California, and Tuckahoe, New York. These facilities required expansion
and/or rebuilding in order to remain competitive in their respective markets.
These replacement facilities will commence operations in the second quarter of
2008 and should contribute meaningful to our performance this year.

                       During 2007, we migrated onto one Company-wide backend
billing system and general ledger accounting system. Although we experienced
some short-term issues with the conversion process, we are substantially
complete with the process at this time and believe that the upgraded systems are
necessary to scale our business in the future.

                       During the fourth quarter of 2007, we successfully
restructured and expanded two of our largest and most successful hospital joint
ventures in Maryland. In one case, we increased our ownership percentage. In the
other, we allowed our joint venture partner to purchase a greater share. Both
restructurings will result in higher management fees for RadNet and significant
operational expansion.

                       During the fourth quarter of 2007, we constructed our
second California interventional radiology center. The center in Rancho Mirage,
California in the Palm Springs area, will commence operation during the second
quarter of 2008.

                       In February of 2008, we acquired Rolling Oaks Radiology
Imaging Centers in West Lake Thousand Oaks market of Los Angeles. Rolling Oaks
was our largest outpatient competitor in that market, and with the acquisition
of certain centers from InSight Health Systems which we announced earlier this
month, we will be the only non-hospital outpatient imaging provider in this
market. West Lake Thousand Oaks is an affluent suburb of Los Angeles that has
attractive payer dynamics and growth opportunities.

                       In February 2008, we announced the acquisition of six
Southern California imaging centers from InSight Health Systems, which will
provide further consolidation opportunities with existing RadNet centers in West
Lake Thousand Oaks and the San Fernando Valley. We anticipate closing this
transaction some time in April. The transaction will result in cost savings and
will provide us with what we call in-market consolidation opportunities. Two of
the InSight centers will close, and their business will be moved to existing
RadNet facilities. We will also move certain equipment acquired in this
transaction and redistribute them, or relocate them, to existing RadNet centers,
allowing us to optimize our capabilities and better service our patients.

                       In March 2008, we completed the acquisition of
Papastavros Imaging, a 12-center operator in Delaware, expanding our mid
Atlantic presence beyond the Maryland border. Papastavros will become a platform
for growth in that new market. We are excited about the potential expansion
opportunities that may exist for us in Delaware.

                                      -4-


                       And most recently in March 2008, we announced our entry
into breast disease management through the acquisition of breast oncology and
breast surgery practices in Southern California. Initially, we are operating at
four locations in concert with our largest women's imaging center in Orange
County, California. The opportunity for us to provide a continuum of care to
women with breast cancer all the way from diagnostic through treatment allows us
to capture a larger revenue stream and increase our service capabilities.

                       As the list of accomplishments illustrates, we had a very
busy 15 months. We continue to believe that 2008 will present us with
opportunities which we hope and anticipate will provide shareholder value. The
DRA continues to have a dramatic impact on the health and landscape of our
industry and believe that we are well positioned to continue on the path we
paved in 2007.

                       At this time, I would like to turn the call over to Mark
Stolper, our Executive Vice President and Chief Financial Officer, to discuss
some of the highlights of our full and fourth quarter performances. When he is
finished, I will conclude our prepared remarks and some of my thoughts about
what 2008 may have in store for RadNet.

MARK STOLPER:          Thank you, Howard. And thank you all for participating in
our fourth quarter and full year 2007 conference call. I'm now going to briefly
review our full year 2007 and fourth quarter performance and attempt to
highlight what I believe to be some material items. I will also attempt to give
some further explanation of certain items in our financial statement, as well as
provide some insight into some of the metrics that drove our fourth quarter and
full year 2007 performance.

                       In my discussion, I will use the term EBITDA, which is a
non-GAAP financial measure. The Company defines EBITDA as earnings before
interest, taxes, depreciation, and amortization, each from continuing operations
and adjusted for losses or gains on the disposal of equipment, debt
extinguishments, and non-cash equity compensation. EBITDA includes equity
earnings and unconsolidated operations and subtracts minority interest in
subsidiaries and is adjusted for non-cash extraordinary and one-time events
taken place during the period.

                       As many of you may be aware, we delayed our 10K filing by
approximately two weeks from our intended filing date of March 17 to give us and
our auditing firm, Ernst & Young, additional time to complete the audit of our
financial statements. As some of you have read in our press release this
morning, the additional time was necessary to identify, analyze, and adjust for
two accounting issues; one pertaining to our medical malpractice insurance and
the other relating to the collectability of old accounts receivable. Before I
begin reviewing the 2007 full year and fourth quarter performance, I'd like to
take a few moments to explain the two issues in greater detail which required us
to take certain non-cash accrual adjustments to our 2007 financial statements.

                                      -5-


                       The first issue, regarding our malpractice policy,
resulted in our addition of a $1.7 million liability at December 31, 2007,
relating to incurred but not reported, otherwise known as IBNR, malpractice
claims. We have what's called a claims-made policy, and we determined we were
not adequately reserved for IBNR exposure. We engaged a third-party actuarial
firm to calculate our accurate IBNR exposure, which approximates the cost of
tail coverage should our malpractice insurer go out of business or should we
stop paying premiums as of December 31, 2007. Also related to this issue, we
recorded a non-cash expense of $170,000 for the year ended December 31, 2007,
for medical malpractice, the portion of the liability we booked associated with
2007. In order to avoid this issue in the future, we will get an actuarial
update every quarter and true-up our liability to the updated IBNR calculation.

                       The second issue involved a revision to our estimated
collectability of accounts receivable on our balance sheet related to dates of
service prior to December 31, 2006. Following an in-depth analysis performed by
us and audited by Ernst & Young, including the analysis of historical collection
statistics by payor and by aging, we determined to record an $8.5 million
non-cash allowance related to these 2006 and prior accounts. In May of 2007, we
converted certain accounts receivable balances, including those for which the
additional reserve is being recorded, to the Radiologics billing system and
changed the personnel responsible for collecting these accounts. We believe this
conversion materially contributed to slower-than-anticipated collections on
these accounts in question, resulting in our decision to revise our estimate of
their future collectability. Although it is possible that we may still collect a
portion of that which we are reserving, we believe at this time that the
adjustment is prudent and appropriate.

                       I cannot emphasize the following point enough. This issue
regarding collectability of 2006 and earlier accounts receivable had no impact
on our accounts receivable or our revenue recognition related to fiscal 2007. As
part of the exhaustive study that we performed with Ernst & Young, we analyzed
the revenue that we recorded in 2007 and its future collectability. Both we and
Ernst & Young deemed our collectability estimate as of December 31, 2007, for
2007 dates of service, to be appropriate. As a practical matter, cash
collections have been strong. Through March of 2008, we have already collected
approximately 90% of the revenue that we accrued for in 2007.

                       From an accounting perspective, the $8.5 non-cash
adjustment is what is termed a change in accounting estimate related to a prior
period. As such, the proper accounting procedure is to book the non-cash
adjustment in the current accounting period, i.e. the fourth quarter, even
though the adjustment is to correct a prior-period estimate. Thus, the result of
this accounting adjustment in the fourth quarter distorts the quarter's and the
full year's performance by decreasing our net accounts receivable at year end by
$8.5 million and more notably, lowering our revenue by $8.5 million. Thus for
the purpose of this call, I will talk about adjusted revenue, defined as revenue
adjusted by backing out this $8.5 million accounting entry.

                       With all that said, I'd like to now review our full year
2007 and fourth quarter results. For the year ended December 31, 2007, RadNet
reported adjusted revenue of $434 million. Adjusted revenue increased 4.3% from
$416.3 million, which would have been the revenue in 2006 if the
RadNet/Radiologics combination had occurred prior to January 1, 2006. For 2007,
we reported EBITDA of $85.3 million. EBITDA increased 9.5% from $77.9 million
over the prior pro forma 2006.

                                      -6-


                       It's important to note that adjusted revenue and EBITDA
for 2007 is reflective of the full impact of the Deficit Reduction Act Medicare
reimbursement cuts, whereas 2006 pro forma results to which I am comparing them
do not include these reimbursement cuts. The negative impact from the DRA was
approximately $16 million of both adjusted revenue and EBITDA for RadNet in
2007. I mention the DRA to highlight the following point. When compared with
2006, a period not subject to the DRA, our 2007 results of increased adjusted
revenue and EBITDA illustrate that we have substantially improved operational
performance. This has been achieved through increasing scan volumes at our
centers and lowering our operating costs. Overall, we performed 2,709,502
procedures in 2007 as compared to 2,540,945 total procedures in pro forma 2006.
This is an overall increase of 6.6%. MRI procedures increased 5.6%; CT
procedures increased 3.5%; PET CT procedures increased 22.2%; and routine
imaging procedures--this includes x-ray, ultrasound, mammography, and all other
exams--increased 7.1% in fiscal 2007.

                       Net loss for the year, not backing out the $8.5 million
accounts receivable allowance accrual, was a negative 18.1 million, or $0.52 per
share, compared to a net loss of 6.9 million, or $0.33 per share, reported for
the fiscal year ended October 31, 2006.

                       Affecting 2007 net income were certain non-cash expenses
and one-time nonrecurring items, including the following: The $8.5 million
reduction of 2007 revenue related to the increase in allowance for accounts
receivable from dates of service prior to 2006, which we've discussed in detail
earlier; $3.3 million of non-cash employee stock compensation expense resulting
from the vesting of certain options and warrants; a $1.9 million gain on the
sale of a joint venture interest; $1.6 million of non-cash deferred financing
expense related to amortization of financing fees paid as part of the $405
million credit facilities drawn-down in November of 2006 in connection with the
Radiologics acquisition and the incremental $25 million term loan and revolving
credit facility arranged for us by GE in August, 2007; $1 million of severance
pay associated with the termination of certain employees related to achieving
the previously-announced cost savings during the Radiologics integration and a
payment to an employee to settle an employment-related dispute; $934,000 of
retention payments to key Radiologics employees for certain agreements entered
into at the closing of the Radiologics acquisition; $820,000 of non-cash loss on
the fair value of interest rate hedges related to the Company's credit
facilities; and a $600,000 non-cash accrual for a stock compensation-related
bonus.

                       With regards to some specific income statement accounts,
interest expense for 2007 was approximately $44.3 million. This was negatively
impacted by $1.6 million of non-cash amortization of financing fees and $820,000
from a non-cash loss related to a mark-to-market of an interest rate hedge both
of which I touched on earlier.

                       For 2007 bad debt expense was 6.3% of adjusted revenue.
This was inline with our expectations as we had a structural increase in bad
debt as a percentage of our adjusted revenue because of the addition of a
Radiologics subsidiary. As we discussed on our last quarter's call, the bad debt

                                      -7-


percentage of our Radiologics subsidiary is higher than the rest of RadNet
because it performs on behalf of its physician partners substantial billings
from hospital operations for which it receives a management fee. Hospital
settings regularly have bad debt expense that far exceeds that of free standing
imaging centers. It is important to note that the bad debt percentage of
Radiologics and RadNet excluding the Radiologics subsidiary did not change
materially as compared with itself over the same period last year.

                       With regards to our balance sheet, as of December 31,
2007 we had $421.8 million of debt and we were drawn down $4.2 million on our
$55 million revolving line of credit. Since December 31, 2006 accounts
receivable increased approximately $16.5 million resulting from increased
business, acquisitions, and the credentialing of new physicians staffing several
of our Northern California facilities and recently acquired centers. We have
working capital of $23.2 million at December 31, 2007. During the year we
entered into capital leases of $19.6 million and repaid $10.4 million of notes
and leases payable and net payments of $3.8 million on our line of credit. We
had cash capital expenditures net of asset dispositions of $22.5 million during
2007.

                       I will now discuss our 2008 guidance. As some of you saw
this morning in our press release we issued guidance ranges for our 2008
expected performance. The metrics are as follows: for revenue, our guidance
range for 2008 is 470 to $500 million. For adjusted EBITDA our guidance range
for 2008 is 100 to 115 million. For capital expenditures our guidance range is
15 to $20 million of maintenance capital expenditures plus growth expenditures
of up to $25 million. And for 2008 our cash interest expense guidance is between
46 and $52 million. Although we have not formally broken out our guidance by
quarter we expect revenue and adjusted EBITDA will increase as the year
progresses. This should be the result of the contributions from acquired
operations and initiatives in progress that will come on line throughout 2008.

                       I'd now like to briefly discuss the performance of the
fourth quarter of 2007. For the fourth quarter of 2007 we reported adjusted
revenue of $110.9 million and EBITDA of 20.4 million. Adjusted revenue increased
8.4% and EBITDA increased 18.7% respectively over the prior period's pro forma
quarter. The results reflect improved volume in margin performance from existing
imaging centers as well as cost savings measures, the combination of which
helped to offset the negative reimbursement effects of the Federal Deficit
Reduction Act.

                       For the fourth quarter of 2007 as compared to the prior
year's pro forma quarter MRI volume increased 3%, CT volume increased 2.5%, PET
CT volume increased 31% and routine imaging procedures which includes x-ray,
ultrasound, mammography and all other exams increased 11.2%. On a same center
basis which measures sites only if they were open for the full period in both
2007 and 2006 MRI procedures increased 2.7%, CT procedures increased 1.1%, PET
CT procedures increased 31%, and routine imaging procedures including x-ray,
ultrasound, mammography and all other exams increased 8.6%.

                       Net loss for the fourth quarter was $11.7 million or
$0.33 per share which is inclusive of the $8.5 million non-cash allowance
adjustment which compares to a net loss of $11 million or $0.35 per share
reported for the two month period ended December 31, 2006. Affecting net income

                                      -8-


in the fourth quarter of 2007 were certain non-cash expenses and one time
nonrecurring items including: the $8.5 million non-cash allowance adjustment to
AR and revenue, $1.9 million gain on the sale of joint venture interests,
$500,000 non-cash loss on the fair value of interest rate hedges related to the
company's credit facilities, $400,000 non-cash employee stock compensation
expense resulting from adjusting of certain options and warrants and
approximately $400,000 of non-cash deferred financing expense related to the
amortization of financing fees paid as part of our $405 million credit
facilities drawn down in November 2006 and in conjunction with the incremental
$25 million term loan and revolving credit facility arranged by GE in August of
2007.

                       With regards to our liquidity and capital resources, in
February 2008 GE arranged for us an incremental $75 million as part of our
existing credit facilities. The incremental facility consists of an additional
$35 million as part of our second lien term loan and $40 million of additional
capacity under our existing revolving line of credit. The incremental facility
was used to fund the acquisition of Papastavros Imaging and a portion of our
digital mammography initiative and will be used to fund future acquisitions such
as Insight Health Systems acquisition and to fund working capital. With the
recent increased size in our credit facilities which we completed in one of the
most challenging credit markets in recent history we believe that our current
capital structure provides us sufficient financial flexibility to effectively
execute our growth plans. Additionally, the difficult credit market has
significantly impacted the access to capital of our competitors, especially
small operators. We believe this will result in further opportunities for us in
the future.

                       I'd now like to turn the call back to Dr. Berger who will
discuss his views with respect to 2008 and make some closing remarks.

DR. HOWARD BERGER:     Thank you Mark. I'll make my comments brief as the call
is running a little bit late here. In short, the opportunities that we
encountered and pursued in 2007 has built a foundation for what I believe is a
very exciting opportunity for 2008. For my earlier review of our accomplishments
over the last 15 months it is obvious that we have been aggressive in our
approach to expanding the business. In the aftermath of DRA I believe that the
types of opportunities we saw in 2007 will continue. There will be further
consolidation in the industry, smaller operators will probably continue to go
out of business, and there will be opportunities to buy new and used equipment
at favorable prices. We also believe very strongly there will be further
pressure on those who abuse imaging through self-referral and block leasing
arrangements. Our industry will continue to grow like it has for each of the
last 20 years. What we do is essential to how medicine is practiced today.
Technological advances will continue to drive further applications. That being
said, 2008 will be a year of digestion. What I mean by this is that we are
extremely focused on optimizing the many initiatives to which we have dedicated
our time and efforts in 2007. We have worked very hard to pursue these
initiatives and we are determined to ensure that they will reap their full
benefit. We have grown rapidly and absorbing that growth in a way which
optimizes our operations will be a priority in 2008.

                       I will close by reiterating what I touched on during the
last conference call by saying that I can't remember a time in which I've seen
more and been more excited about the future growth prospects and the
opportunities that lay ahead for our company. Particularly included in that are

                                      -9-


the opportunities that we see in a comprehensive breast disease management
initiative that will be kicked off in the second quarter of 2008. With the
momentum we take into 2008 we see a bright future for the company, a future that
will transform not only our company but perhaps will have a hand in bringing
change to the outpatient imaging industry itself.

                       Operator, we are now ready for the question and answer
portion of the call.

OPERATOR:              The question and answer session will be conducted
electronically. To ask a question please press the star key followed by the
digit one on your touchtone telephone. If you are using a speaker phone please
make sure your mute function is turned off to allow your signal to reach our
equipment. Again, that's star one for questions.

                       We'll have our first question from Art Henderson,
Jeffries & Company.

ART HENDERSON:         Good morning, thanks for all of the detail. A couple of
questions for you: first in terms of your guidance could you sort of describe
what sort of assumptions that you're getting to get to the low end versus the
high end of the EBITDA guidance for '08?

DR. HOWARD BERGER:     Sure Art. The lower end of the guidance would anticipate
the current operations along with the addition of the already announced
initiatives that we have publicly disclosed. For example, the Rolling Oaks
transaction, the Insight transaction that we're about to close, and
incorporating with that the acquisitions that occurred in the fourth quarter of
last year that will become fully implemented in 2008.

                       The higher end of the range would really include some
contribution from the expansion that I talked about of some existing centers,
replacement of the three centers that we talked about in the Radiologics markets
that needed replacement, as well as contribution from breast disease,
management, and the other new center that we built in Rancho Mirage. We're at
this point not able to as accurately quantitate the amount of that impact, but
the successful operation of those would get us to the higher end of those
ranges.

                       The range does not talk about any further acquisitions or
other activities other than what we've already talked about in the prior
remarks.

ART HENDERSON:         Okay. That's helpful. I know just to sort of touch on
something you just said then. Should we expect that '08 is going to have--that
you're going to be doing fewer acquisitions this year that you're going to spend
more time integrating or are you going to try and keep a balance of looking for
certain things?

DR. HOWARD BERGER:     Well, I think the last comment the balance is probably
the way we'll approach this. The main focus as I mentioned is to make sure that
all of the initiatives in 2007 as well as the first quarter get the full
opportunity for contribution to the company's performance. We will look at
acquisitions, which we find attractive in terms of consolidation opportunities,
but that will be something that we'll probably be less aggressive about in the
first two or three quarters of this year.

                                      -10-


                       One of the other things that we again will be putting a
lot of emphasis on is the breast disease management, which will essentially get
us into oncology and other exciting opportunities.

ART HENDERSON:         Yes, and I'm glad you mentioned that. Can you talk about
that a little bit more in detail as to what you're thinking and how that gets
rolled out and what the opportunities are in breast disease management?

DR. HOWARD BERGER:     Yes. It is pretty well accepted throughout the industry
that the entire process for a woman who has an abnormal mammogram and then
ultimately perhaps gets diagnosed with breast cancer can be a lengthy and very
anxious period of time for a woman. Statistically speaking, about one out of
every eight women will develop breast cancer at some time in their life. And
generally the process by which a woman goes through this is the first have a
mammogram, have to come back if it's suspicious or abnormal. Once the
abnormality is further defined, there may be biopsies necessary, which generally
can be performed in our imaging centers either stereopathic ultra sound and now
even MRI guided biopsies. Once the diagnosis is more fully established there has
to be a referral to a surgeon, the surgeon then perhaps does some of their own
diagnostic work up, including other more definitive surgery and biopsies. And
then the patient then gets referred to an oncologist. That process is not
uncommonly taking women six, eight weeks, sometimes three months during which,
as you can well imagine it completely puts them out of commission, as well as
the anxiety for their family.

                       What we are doing is incorporating that entire process
into one center or groups of centers that will allow women to have the
mammogram, the diagnosis, being immediately referred to one of our surgeons, and
then ultimately in concert with our oncologist and streamline the procedure. One
of the things that makes this exciting and effective is that we will be able to
capture in an integrated manner all of the imaging, which has become so critical
for the diagnosis and treatment of breast cancer.

                       The newer applications that have been developed really in
the last couple of years including PET CT, breast MRI scanning, newer types of
diagnostic mammography, biopsy procedures, and other specialty imaging has
transformed the way breast oncology--breast cancer is practiced. And by having
this in an integrated model it will allow us to both streamline the process
through which a woman gets the diagnosis and ultimately starts treatment. And
will allow us to include within that the ability to capture all of the imaging
and perform it we believe at a much higher level.

                       The potential implications of that for our centers is
that based on this model and with the large number of women's health centers
that we have--imaging centers in particularly Southern California and starting
now in Northern California will allow us I think to integrate all of these
processes and make this a far better outcome for the patients and a better
business opportunity for us.

                                      -11-


                       To initiate this we have purchased the practices of three
of the most prominent surgeons and oncologists in all of Southern California.
The entity is known as Breast Link, which is a trademark name and can be looked
up on the internet. And it involves people who have worked at the highest
academic levels here in California and who have established a reputation and
only handle breast cancer as part of their practice.

                       So, we see this as an opportunity different from the way
perhaps others have begun to approach oncology through radiation therapy and
have focused our attention really on the medical oncology side starting first
with breast cancer. And perhaps looking for opportunities to expand that and,
again, be able to capture the imaging and other specialty procedures associated
with this very serious disease.

ART HENDERSON:         Okay. Great. That's very helpful. Thanks very much.

OPERATOR:              We'll go next to Ann Hynes, Leerink Swann.

ANN HYNES:             Thank you. Getting back to guidance, can you give us your
assumptions for organic growth of the new model when it comes to volume,
pricing, bad debt?

MARK STOLPER:          Sure. With respect to volumes, we're assuming a 3%
increase in our volumes.

ANN HYNES:             Overall?

MARK STOLPER:          Overall, correct. We would expect, you know, at a blended
basis we expect the PET CT obviously to continue to grow, you know, faster than
that. But, you know, we're taking a conservative approach with respect to our
base business. With respect to bad debt, we assume between a 6% and 7%
percentage of net revenue, which is where it is today. Which is reflective of
the higher bad debt percentage that Radiologics has because of its hospital
based billing contracts.

ANN HYNES:             Okay.

MARK STOLPER:          And what was the third part of your question?

ANN HYNES:             Pricing.

MARK STOLPER:          Pricing we assume--my model assumes a 1% decrease in
overall private pay or pricing.

ANN HYNES:             Okay.  And when you said you have taken a conservative
approach to your base business, is that economy driven or do you think you're
just being conservative and leaving room for upside?

MARK STOLPER:          Well, I've said this a number of times to folks is that,
you know, we've been growing faster than 3% as evidenced in our, you know, press
releases or the last few quarters. But, you know, at some point you run into
capacity issues. At some point, you know, pace in care can deteriorate. You

                                      -12-


can't always continue to grow your business at the types of, you know, same
store sales levels that, you know, we have today. So, my long-term model has a
3% same store sales growth rate to it and that's what we're comfortable in, you
know, in incorporating in our guidance.

ANN HYNES:             And does your guidance include any other markets that you
would input some of the digital mammography? Don't you have some capacity in
California to upgrade that technology or your recent acquisition in Delaware?

DR. HOWARD BERGER:     Yes, Ann, Delaware has no digital mammography currently
and that is in our plans to implement that just like we have now done and almost
completely finished in Maryland. And there are some additional digital
mammography expansion opportunities here in California, although we've been
working really on that program now for the last six months.

ANN HYNES:             Okay. And just one last question. Are you providing any
kind of free cash flow guidance?

MARK STOLPER:          Not explicitly, but if you were to take the EBIDTA range
that we gave, we also gave a maintenance level cap ex number as well as a
expected cash interest.

ANN HYNES:             Yes. Okay.

MARK STOLPER:          Or actually total interest expense number. So, we, I
believe, gave you enough information to back into, you know, kind of a steady
state (sp?) free cash flow number.

ANN HYNES:             Okay. Great. Thank you.

MARK STOLPER:          You're welcome.

OPERATOR:              We'll go next to Rob Maine, Morgan Keegan.

ROB MAINE:             Good morning. One follow-up to the question on the same
store growth. I might have missed it, Mark, but did you give a same store fourth
quarter growth in overall procedures? I have the specialties.

MARK STOLPER:          I believe I did. Let me go back to my own notes here.
Yes, the routine procedures, which includes the x-ray ultra sound and
mammography, Rob.

ROB MAINE:             Right.

MARK STOLPER:          The same store sales growth was 8.6%.

ROB MAINE:             Right. No, my question is if you look at all procedures,
routine, plus PET, plus CT, plus (cross talk)?

                                      -13-


MARK STOLPER:          Oh, no I did not do that as an average. But I can--but
off line I'm happy to do that for you. It's not a difficult calculation.

ROB MAINE:             Okay. I would imagine that on a weighted basis it could
be closer to that routine number than where you were for MRI and CT, right?

MARK STOLPER:          It weights closer to that because, you know, almost 77%
of our business on a volume basis, on a scan basis is routine.

ROB MAINS:             Okay, fair enough. When, if I look at the guidance for
EBITDA and, you know, kind of back into where the margins are it's obviously
above where you were in the fourth quarter on, you know, kind of a steady state
basis. Is that a reflection of seasonality that we should be building into the
fourth quarter because you mentioned that you had, you know, some timing issues
that happen in Q4 or is there some pretty significant improvements that you're
expecting on an operating EBITDA basis as well?

DR. HOWARD BERGER:     Rob, I think there is some seasonality that we saw last
quarter, the fourth quarter related both I think to some adverse weather
conditions on the east coast as probably most of you who are on the call are
from the east coast know that December, January and even into February was a
rather severe winter and it did affect a number of our centers, even those that
are used to some of the harshest conditions perhaps like in Rochester but that
being said, the other part of that was the way the holidays fell out this year.
Both December 25th and January 1st were on Tuesday, I believe and had a
substantial impact on lower volumes during those two weeks than we might
experience in a year where the holidays fall out either on a Monday or a Friday.
I believe that, you know, based on the experience that we had in the fourth
quarter we will project some seasonality and impact and see some impact this
year in the fourth quarter again as I think that the holidays flipped from
Tuesday to Thursday which doesn't necessarily make it better for us but we
nonetheless having had that experience of last year we will certainly I think
reflect to do a little bit less. That being said, the fourth quarter though
should be benefited by all of the initiatives that we described being fully
operational by the fourth quarter, by the third and fourth quarter actually. And
so it will make it a little bit more of a challenge for us to compare the fourth
quarter of this year to the fourth quarter of last year as we outline a lot of
the changes that occurred to the company based on acquisitions, expansion of
centers and the implementation of basically four or five new centers.

ROB MAINS:             Okay so, on a margin basis then with what you experience
in the second and third quarter we should view as kind of more normal than what
happened in the fourth?

DR. HOWARD BERGER:     I would say it's on the low side.

ROB MAINS:             Okay.

DR. HOWARD BERGER:     The low side. I would expect it to be a little bit
better. Remember by the, certainly by the end of next year all of the, all of
the integration opportunities, you know, for Radiologics will have been
completely realized so that there will be some other benefits I believe, you
know, in each of the quarters of this year and particularly in the second, third
and fourth.

                                      -14-


MARK STOLPER:          Yes, I mean our EBITDA margin is running, you know, close
to 20%, maybe a hair higher than 20% now and we believe that there is an
opportunity to increase that by, you know, two to 300 basis points.

ROB MAINS:             Okay, great. Apropos to that, it's been about four months
since, you know, you first talked about Papastavros. Anything changed there in
terms of the profile of the whole operation, you know, revenues, margins,
anything like that improved?

DR. HOWARD BERGER:     No, not that we've seen. We're very comfortable with the
practice. We think there is a lot of growth opportunity. There has been
underinvestment in both systems and equipment in that market, particularly as I
mentioned earlier we will be implementing a full digital mammography there
which, you know, given their volumes will have a substantial impact on their
revenue along with some other initiatives that we have. So we view the
Papastavros acquisition every bit with as much enthusiasm as we did when we
first announced it. And we have been keeping very close to the operations there
ever since we announced the acquisition.

ROB MAINS:             Right and then just to clarify, the full digital
conversion, full digital mammo conversion there that is embedded in your cap ex
and revenue EBITDA guidance?

DR. HOWARD BERGER:     Yes it is.

ROB MAINS:             Papastavros, okay. Then last question, the cash interest
expense guidance for '08 - you talked about the items that made GAAP interest
expense different from cash in '07, do those go away for the most part in '08?

MARK STOLPER:          No, those will continue. The deferred financing costs
which is related to the GE credit facilities is being amortized over the life of
the credit facility so those have another five years before they run off and
it's being amortized on a straight line debt basis. The swap is a little more
difficult to predict because essentially that one swap which goes through our
P&L is mark-to-market every month and to the extent that we have a loss on the
mark-to-market that it's a non-cash hit to our interest expense to the extent
that that month is a gain, it's a benefit to the interest expense so, you know,
what that swap is doing is providing more volatility in our income statement.
But it's and it's obviously very difficult to predict. That one particular swap
however, does expire in April of next year so at least it will be off our P&L at
that point.

ROB MAINS:             Okay, so for modeling purposes we've got to add at least
an extra 1.6 million.

MARK STOLPER:          Well I mean...

ROB MAINS:             There's no deposit benefit from the swap.

                                      -15-


MALE SPEAKER:          The interest expense - I'm sorry Rob I misunderstood your
original question. The interest expense number that that's there is a total
interest expense not a cash interest expense.

ROB MAINS:             Okay.

MARK STOLPER:          So it compares to the interest expense that you see on
our income statement this year which was, you know, a hair more than 44 million.

ROB MAINS:             Right. Okay, that's very helpful. Thanks a lot.

MALE SPEAKER:          You're welcome.

OPERATOR:              That concludes our question and answer session. I'll turn
the conference over to Dr. Berger for additional or closing remarks.

DR. HOWARD BERGER:     I want to thank you all for joining us this morning and
taking the time out of your busy day. I hope that the conference has been useful
in giving you some insight to the company's performance and initiatives and we
look forward to talking to you again when we have our earnings call for the
first quarter which would be in May, late May. But thank you all and have a good
day.

OPERATOR:              That concludes today's conference. You may disconnect at
this time.




                                      -16-


RADNET, INC.
FIRST QUARTER 2008 EARNINGS CONFERENCE CALL
MAY 12, 2008

OPERATOR:              Please stand by; we're about to begin. Good day, ladies
and gentlemen. Welcome to the RadNet Incorporated First Quarter 2008 Earnings
conference call. At this time all participants are in a listen-only mode.
Following the presentation, we will conduct a question and answer session.
Instructions will be provided at that time for you to queue up for questions.

                       I would like to remind everyone that today's conference
is being recorded and would now like to turn the conference over to Mr. John
Mills of ICR. Please go ahead, sir.

JOHN MILLS:            Thank you. Good morning, ladies and gentlemen, and thank
you for joining us today to discuss RadNet's first quarter 2008 earnings
results. On the call today from the Company are Dr. Howard Berger, Chairman and
Chief Executive Officer of RadNet, and Mark Stolper, Executive Vice President
and Chief Financial Officer.

                       Before we begin today, we'd like to remind everyone of
the Safe Harbor statement under the Private Securities Litigation Reform Act of
1995. The following prepared remarks contain forward-looking statements and
management may make additional forward-looking statements in response to your
questions. These statements do not guarantee future performance and, therefore,
undue reliance should not be placed upon them. For a more detailed discussion of
the factors that could cause actual results to differ materially from those
projected in any forward-looking statements, we refer you to RadNet's recent
10-K for the 12-month period ended October 31st, 2006; Form 10-KT for the
two-month transition period ended December 31st, 2006; Form 10-K for the
12-month period ended December 31st, 2007; and 10-Qs for the three months period
ended March 31st, 2007; June 30th, 2007; and September 30th, 2007, filed with
the SEC.

                       And with that, I would like to turn the call over to Dr.
Howard Berger.

DR. HOWARD BERGER:     Thank you, John. Good morning everyone and thank you for
joining us today. On today's call Mark Stolper and I plan to provide you with
highlights from our first quarter 2008 results, reaffirm our financial guidance
for full year 2008 and discuss in more detail some of our recently announced
initiatives and discuss their future contributions to our Company's growth.
After our prepared remarks, we will open the call for your questions. I'd like
to thank all of you for your interest in our Company and for dedicating a
portion of your day to participate in our conference call this morning.

                       We are pleased with our progress in the first quarter of
2008, not only because the financial results reflect increasing volumes, revenue
and EBITDA from the prior year's quarter, but also because of our completion of
a number of key operational accomplishments. I believe our operational
accomplishments will set the stage for a significant improvement in our
financial performance during the rest of the 2008 fiscal year.

                                      -17-


                       During this quarter, among other things, we substantially
completed the installation and transition of our Maryland operations to full
digital imaging and particularly digital mammography. We completed the
construction of our second interventional radiology and imaging center, this
facility located in Rancho Mirage, California. Open for business during the
first week in May, it complements our portfolio of multi-modality services in
the Palm Springs/Palm Desert market, a market where we already have six other
imaging centers and where we have substantial backlogs in all modalities.

                       We replaced two centers that we acquired as part of
Radiologix acquisition in Yonkers, New York, and Pleasanton in California. These
centers opened for business in April and May, and we are encouraged by the
opportunities we are seeing in these markets. We completed the acquisition of
the Papastavros Group of imaging centers in the middle of March. We also
invested in Papastavros during a transition to digital mammography, which will
be completed prior to the end of this quarter.

                       We acquired the Rolling Oaks imaging centers in
Westlake/Thousand Oaks, California in February. We expanded two newly
restructured joint ventures with Carroll County and St. Joseph's hospitals in
Maryland, and we have installed five additional MR systems with, in our existing
network of centers on the east coast.

                       We have a dynamic business, and we believe the
accomplishments which I have just listed have brought us to what I would like to
call an inflection point. I believe these initiatives will create a catalyst for
future growth similar to that which was created through our acquisition of
Radiologix in October of 2006. I use the term "inflection point" because I
believe we have reached a moment in time when we are poised for significant
financial growth and improvement. Why do I say this? I say this for two reasons.
First, we have yet to see the financial contributions from many of the endeavors
I have just described. All of these acquisitions and initiatives should
contribute materially to our second quarter and subsequent quarters.

                       Second, during this quarter, and even going back to the
fourth quarter of last year, many of these investments were associated with, not
merely investments in capital equipment, but also took the form of additional
expenses we incurred related to operating personnel, modifying field level
operations and protocols and reshaping the regional operations. We believe these
additional expenses, although impacting our profitability and margins in the
fourth quarter of last year and the first quarter this year, are expenditures
which will drive the Company's performance in the coming months. These expenses
include: expenses incurred in the training of our operations personnel and
radiologist partners and through creating new operating protocols related to our
digital mammography transition; additional legal and other accounting expenses
and consulting expenses related to the completion of our acquisitions and
business expansion; and expenses that we were unable to capitalize relating to
our building the new interventional centers in Rancho Mirage and the replacement
centers in Yonkers and Pleasanton in California.

                                      -18-


                       Thus, the inflection point is a point when our financial
results should reflect both the contribution of our recent initiatives and the
elimination of the associated up-front expenses of completing these initiatives.
In addition to absorbing some of these expenses associated with our growth
initiatives, the first quarter results also reflected some seasonality we felt
in January. Our January results were negatively impacted by both the undesirable
timing of the New Year's holiday this year and several days of bad weather on
the east coast. We observed, we have observed significant improvement in our
volumes in February and March, the momentum of which has continued rather
dramatically into the second quarter.

                       Furthermore, we are seeing more opportunities than ever
to continue to grow the Company. We are being contacted almost daily about new
acquisition opportunities and continue to see many of the smaller "mom-and-pop"
operators struggling to compete. The DRA continues to have a dramatic impact on
the health and landscape of our industry. We believe that we are well positioned
for the remainder of 2008 to take advantage of this changing landscape.

                       At this time I'd like to turn the call over to Mark
Stolper, our Executive Vice President and Chief Financial Officer, to discuss
some of the highlights of our first quarter performance. When he is finished I
will conclude our prepared remarks with some of my thoughts about what the
remainder of 2008 may have in store for RadNet.

MARK STOLPER:          Thank you, Howard, and thank you all for participating in
our first quarter conference call. I'm now going to briefly review our first
quarter performance and attempt to highlight what I believe to be some material
items. I will also attempt to give some further explanation of certain items in
our financial statements, as well as provide some insights into some of the
metrics that drove our first quarter performance.

                       In my discussion, I will use the term adjusted EBITDA,
which is a non-GAAP financial measure. The Company defines adjusted EBITDA as
earnings before interest, taxes, depreciation and amortization, each from
continuing operations and adjusted for losses or gains on the disposal of
equipment, debt extinguishments and non-cash equity compensation. Adjusted
EBITDA includes equity and earnings in unconsolidated operations and subtracts
minority interest in subsidiaries and is adjusted for non-cash extraordinary and
one-time events taking place during the period.

                       With that said, I'd now like to review our first quarter
2008 results. For the quarter ended March 31st, 2008, RadNet reported revenue of
$114.7 million. Revenue increased 8.4% from $105.8 million from the same quarter
in 2007. Adjusted EBITDA during the first quarter of 2008 was $22.1 million.
Adjusted EBITDA increased 8.5% from $20.3 million from the same quarter in 2007.

                       Overall, we performed 699,742 total procedures in the
first quarter of 2008 as compared to 671,652 total procedures for the same
period in 2007. This is an overall increase of 4.2%. MRI procedures increased
3.3%; CT procedures decreased 1.6%; PET/CT procedures increased 33.1%; and
routine imaging procedures, which includes x-ray, ultrasound, mammography and
all other exams, increased 4.8%. On a same-center basis, which measures sites

                                      -19-


only if they were open for the full period in both 2008 and 2007, MRI procedures
increased 3.4%; CT procedures decreased 4.1%; PET/CT procedures increased 32.7%;
and routine imaging procedures; this includes x-ray, ultrasound, mammography and
all other exams, increased 2.4%.

                       Net loss for the first quarter of 2008 was $5.5 million
or $0.15 per share compared to a net loss of $5.6 million or $0.16 per share
reported for the same quarter of 2007. Affecting 2008 net income were certain
non-cash and one-time non-recurring items, including the following: $951,000 of
non-cash loss on the fair value of interest rate hedges related to the Company's
current credit facilities; $700,000 one-time expense related to a payment to
settle a business dispute; $532,000 of non-cash deferred financing expense
related to the amortization of financing fees paid as part of our $405 million
credit facilities drawn down in November of 2006 in connection with the
Radiologix acquisition, and the incremental term loans and revolving credit
facility arranged in both August, 2007, and February, 2008; $454,000 of non-cash
employee stock compensation expense related from the vesting of certain options
and warrants; and approximately $400,000 bonus compensation paid to some of our
physician groups as assistance in our transition to digital mammography.

                       With regards to some specific income statement accounts,
interest expense for the first quarter of 2008 was approximately $13.6 million.
This, again, was negatively impacted by the $532,000 of non-cash amortization of
fees and $951,000 from the non-cash loss related to the mark-to-market of the
interest rate hedge, both of which I touched upon earlier. Interest expense was
higher in general as compared to the same period last year due to increased
debt, predominantly from the two GE incremental term loans closed in August,
2007, and February, 2008, which we have substantially used to fund several
recent acquisitions, including the Papastavros and Insight as well as fund our
digital mammography program and certain center expansions.

                       For the first quarter of 2008, bad debt expense was $6.5
million or 5.6% of revenue. This is down from $7.6 million or 7.1% of revenue
for the same quarter last year. Bad debt expenses decreased as a percentage of
revenue, partly as a result of the growing of our imaging center revenue. This
growth dilutes the contribution of the billings from hospital procedures
interpreted by certain of our physician partners for which we receive a
management fee. Hospital settings, as we discussed on the last call, regularly
have bad debt expense that far exceeds that of free-standing imaging centers.

                       With regards to our balance sheet, as of March 31st,
2008, we had $468.2 million of net debt, which was net of approximately $8
million cash balance. At March 31st, 2008, we had a balance of $12.4 million
drawn down on our $55 million revolving line of credit. Since December 31st,
2007, accounts receivables increased approximately $9.7 million resulting from
increased business, acquisitions and the credentialing of new physicians
staffing. We had working capital of $25.2 million at March 31st, 2008, as
compared to $23.2 million as of March 31st, 2007. During the first quarter, we
entered into capital leases of $12.1 million and repaid $4.4 million of notes
and leases payable. We had cash capital expenditures net of asset dispositions
of $9.5 million during the first quarter of 2008.

                                      -20-


                       We are reaffirming our 2008 guidance as follows: revenue,
our guidance range is, for 2008, $470 million to $500 million; for adjusted
EBITDA, our guidance is $100 million to $115 million; for capital expenditures,
our guidance range is from $15 million to $20 million of maintenance capital
expenditures plus growth capital expenditures of up to an additional $25
million; our guidance range for cash interest expense is 46 to $52 million for
2008. Although we did not break out our guidance by quarter, as we said on the
last conference call and also reflective of our first quarter 2008 revenue and
EBITDA, we expect revenue and EBITDA will increase as the year progresses. This
should be the result of the contributions from acquired operations and
initiatives in progress that will come online throughout 2008.

                       With regards to our liquidity and capital resources, in
February, 2008, GE arranged for us an incremental $75 million as part of our
existing credit facilities. The incremental facility consisted of an additional
$35 million as part of our second lien term loan and $40 of additional capacity
under our existing revolving line of credit. The incremental facility was used
to fund the acquisitions of Papastavros Imaging, a portion of our digital
mammography initiative, our Insight acquisitions and for working capital.

                       With the recent increase size of our credit facilities,
which we completed in one of the most challenging credit markets in recent
history, we believe that our capital structure provides us sufficient
flexibility to effectively execute our growth plans in the near term.
Additionally, the difficult credit market has significantly impacted the access
to capital of our competitors, especially the smaller operators. We believe this
will result in further opportunities for us in the future.

                       During the quarter we substantially improved our controls
over two areas of accounting that resulted in our making non-cash accrual
adjustments to our 2007 financial statements and caused us to file our 2007 10-K
during the extension SEC filing period. With respect to ensuring the
collectability of accounts receivable, we formed a revenue committee which
includes the participation of Dr. Berger, myself, our Director of Reimbursement
Operations and other financial personnel. The committee meets every month to
review the collection statistics applied to monthly and year-to-date gross
charges, as well as review the collectability of the outstanding accounts
receivable balances as of the end of each month. The committee reviewed and
analyzed collection run-out statistics and compared cash collections to
historical data and trends during the three months ended March 31st, 2008. We
believe that the implementation of our revenue committee enhanced our controls
and improved our ability to accurately value our accounts receivable balances.

                       With respect to the valuation of our incurred but not
reported reserve associated with medical malpractice policy, we established the
practice of engaging a third party actuary to assist us in determining our IBNR
as of the end of each quarter. We used this consultant in determining our IBNR
reserve as of March 31st, 2008.

                       I'd like now to turn the call back to Dr. Berger, who
will discuss his views with respect to 2008 and make some closing remarks.

                                      -21-


DR. HOWARD BERGER:     Thank you, Mark. We remain very optimistic and
enthusiastic about RadNet's future. We have accomplished a great deal in a short
period of time. Our focus in the second quarter will be on maximizing the
benefits from our recent initiatives and investments. In an industry which
requires further consolidation, RadNet will continue to evaluate other
opportunities which are available to further our growth during the latter half
of 2008.

                       During 2008 we will look to expand our breast oncology
operation, Breastlink, to other markets outside of Orange County, California. We
remain convinced that providing an efficient and comprehensive continuum of care
to women with breast cancer ranging from diagnosis to treatment is a model that
can and should be replicated in other markets. In the very brief time since we
announced Breastlink we have received an outpouring of support within the Orange
County, California community and neighboring areas. We think that Breastlink
might be one of the most important initiatives we have within RadNet at this
time.

                       Additionally, as the year progresses, we will continue to
look for ways to optimize our capital structure. We have noted significant
improvements in the credit markets over recent weeks. We remain interested in
ways in which we can lower our cost of capital, provide capital for expansion
and increase our operating and financial flexibility. We continue to dialogue
with GE and other financial advisors regarding capital opportunities.

                       Operator, we are now ready for the question and answer
portion of the call.

OPERATOR:              Thank you. The question and answer session will be
conducted electronically. If you'd like to ask a question, please do so by
pressing the star key, followed by the digit one on your touchtone telephone.
Also please deactivate any mute function before signaling to be sure your signal
will reach our equipment. Once again, that's star, one for questions. We'll
pause for a moment to assemble our roster.

                       And we'll take our first question from Brian Tanquilut
with Jefferies & Company. Please go ahead.

BRIAN TANQUILUT:       Thank you. Good morning, guys.

DR. HOWARD BERGER:     Morning, Brian.

BRIAN TANQUILUT:       Hey, Howard, I guess the first question, it seems like
you're very excited about all of these initiatives that you did in Q1. If, have
you, if you can just walk us through maybe more, or give us more details on
Breastlink and what that will entail to roll it out and, you know, the
investments required to do that? As well as, you know, the digital mammo, now
that it's complete in Maryland, if you can give us just sort of a description on
what that entailed in terms of, you know, operation, on an operational level?

DR. HOWARD BERGER:     Okay, well let me discuss the Breastlink portion of that
first. The Breastlink initiative is, was primarily conceived of a need within,
you know, women's healthcare and management of breast cancer whereby the process

                                      -22-


of both diagnosing and then ultimately defining the treatment for breast cancer
can often be a very lengthy and exhausting process for women. What we have done
with our first initiative of this in Orange County is to bring together the
three primary professionals that are responsible for bringing this disease under
proper diagnosis and treatment, namely imaging, surgical and oncologic
professional services.

                       By doing this all under one roof, literally and
figuratively, we believe we can dramatically shorten the amount of time that,
from screening mammography to the determination of the actual treatment,
condensing that into perhaps as little as a one-week period. This will both help
from a mental, as well as a treatment standpoint, to provide the best possible
outcome. But the primary driver of this is the ability to incorporate all of
this in a continuum of services that starts with imaging and then relies on
imaging to best diagnose and determine the most appropriate treatment.

                       In the last several years, it has been rather obvious to
people in the treatment of breast cancer that imaging is essential to that
process. The development of sophisticated breast MRI procedures, PET/CT
scanning, biopsy capabilities under ultrasound, MRI and stereotactic guidance,
the ability to do digital mammography itself, which has better resolution and
detail, all have helped to provide earlier and earlier diagnosis. It shouldn't,
it should also not be overlooked that there now are specific June (sp?) typings
that have been identified that put certain women with breast cancer, or who will
ultimately get breast cancer, at very high risk and the effectiveness of being
able to diagnose this early on through breast MRI scanning and PET/CT scanning
is critical to the best possible outcome.

                       So in our primary center in Orange County, this was
driven because of the relationship with the individuals in the surgical and the
oncology areas who have now become part of our professional group, all both
desirous and willing to work together to create this effective outcome. Our goal
is to try to leverage this same model, primarily at those centers where we have
extensive mammography capabilities already. There is an additional five regions
in southern California plus at least two or three regions that we've already
identified on the east coast where we think that this model could be very
effective and necessary for continuing the benefits primarily to the breast
cancer patients.

                       So once we've incorporated this particular first
initiative in Orange County in a way that gives us, not only the ability to do
this under one roof, but effectively transition us into the management of
oncology services itself, which is something new to the Company but which we
feel we can, and are rapidly getting our hands around in dealing with issues of
chemotherapy and other forms of diagnosis and treatment, we will be able to roll
this out. And we have some early plans for this, which will primarily focus
initially in our Palm Springs market and in the Ventura and San Fernando
markets, where we have very extensive resources for doing mammography, MRI and
the full spectrum of services here.

                       Going back to digital mammography, the first quarter and
end of the fourth quarter of 2007 were challenging for the Company because of
the rapidity and expediency which, with which we felt the need to implement

                                      -23-


digital mammography, primarily on the east coast. That initiative wound up
having us put into operation almost 40 digital mammography systems. As I've
mentioned before on previous calls, the reimbursement increase for this is
approximately 60% of what we would get paid for analog mammography, plus it
gives us additional throughput and volume resources, which we are beginning to
already tap into because of backlogs that we have in many of our markets and
which should also increase revenue disproportion to what the growth in
mammography has been prior to the implementation of digital mammography.

                       So the first quarter in particular was challenging, given
the fact that when you introduce digital mammography you have to go ahead and
train all of the personnel, not only the technologists, but the physicians, to
learn the new protocols and methods in which you now go from film screened
handling of the images to the monitor and computer handling of images. This
generally results in a slowdown of our business because of the need to make it
very effective in the educational process, but which once it's finished, then
allows us to accelerate our volumes, both to normal levels as well as the
increasing levels that we've seen.

                       In the Maryland market where we did, or will do I should
say, this year about 250,000 mammograms, the response from the community, our
referring physicians and our radiologists has been overwhelmingly positive. The
market is very rapidly adopting digital mammography as a state-of-the-art
requirement for people that are going to continue to involve themselves in this
part of their radiology and imaging practices, and perhaps most importantly, it
is a way for us to access the one modality where we have less competition and
the greatest demand.

                       So the overall process of going to digital mammography
and then ultimately ratcheting up the leverage that we get with that to get into
breast cancer disease management, not only as we've done it in Orange County but
potentially in other relationships that we might want to pursue with some of our
current and future hospital partners, represents what we believe to be a very
dynamic opportunity for enhancing revenues growth in RadNet for the long-term
future.

BRIAN TANQUILUT:       Thanks for that great answer, Howard. Mark, just a
question, you know, there's been concern about Medi-Cal and obviously they're
looking to cut physician payment rates by about 10%. What's your exposure there?

MARK STOLPER:          Sure. Sure, Brian. Medi-Cal, which is, for everyone on
the call, the California portion of our Medicaid book of business, is roughly
about 1% of the overall net revenue of the Company. The early discussions I've
heard about, the cut is somewhere in the 10% reimbursement range, Brian. Is that
consistent with what you've heard?

BRIAN TANQUILUT:       That's about right, yes.

MARK STOLPER:          Yes, so the cut for us in exposure that we have to
Medi-Cal and to this cut is fairly  nominal for the Company to absorb.

BRIAN TANQUILUT:       And then the cut that they're proposing, that's only
going to be in the professional reimbursement rate?

                                      -24-


MARK STOLPER:          I'm not entirely clear on that, Brian.

BRIAN TANQUILUT:       Okay.

MARK STOLPER:          I mean if it were, if that were true, then the cut would
be about 20% of what I just said, meaning that the physician component on
average relative to the overall reimbursement, the physician component as
opposed to the technical book component, you know, average is roughly 20%.

BRIAN TANQUILUT:       Okay. And then, you know, we've had, we've heard a lot of
chatter about the RBMs being active in Rochester. If you can just give us some
comment on that one?

DR. HOWARD BERGER:     Yes, back in October of 2007 the largest carrier in the
Rochester market, or insurer I should say, Accelus (sp?), which is the Blue
Cross provider, I believe, maybe Blue Cross and Blue Shield, up in that market
engaged CareCore in a pilot project to implement radiology utilization
management. That did have an impact going into late `07's fourth quarter and the
beginning of the first quarter in terms of reduction of our MR and CT volumes.
We, being the largest outpatient provider in the Rochester market, along with
other hospital organizations as well as the physician community, expressed our
displeasure and concern about the quality of care that was being impacted by the
pilot project initiated with CareCore.

                       And at this point I'm happy to report that we believe
that the project has essentially been curtailed at this point in time and may be
eliminated altogether. I think this is an example wherein a very, in a small but
significant market to us, the providers of all levels, not only imaging but
physicians, recognize that there was not the need for this kind of introduction
of oversight management. One of the things that distinguishes Rochester perhaps
from some of the other markets is that we don't believe that the overutilization
that is seen in other markets is part of the Rochester landscape because there
is not the physician self-referral issue. Rochester somewhat uniquely has
regulations in place that prevent individual physicians or other imaging
providers from putting equipment in without getting approval of the various
local agencies there to ensure reimbursement.

                       Therefore, we don't see in the Rochester market very much
in the way of imaging equipment into private physician imaging offices, which we
believe has been the primary driver of the overutilization that is now generally
recognized in our community, or in our industry I should say, over the past
perhaps five to 10 years. So this had more of an unintended impact in the
quality and the expediency with which the physicians in that community and the
providers, principally us and a couple of the larger hospitals, were capable of
delivering to the community and there was a substantial pushback, which we
believe has been successfully challenged at this point in time.

BRIAN TANQUILUT:       Okay. Last question, Howard, what are we seeing in terms,
you know, the equipment market? I know GE has talked about how we, that business
has been for them. What are you seeing out there right now?

                                      -25-


DR. HOWARD BERGER:     Well what we see for ourselves is diametrically opposite
from what we hear and see elsewhere. To the extent that you could get
information from the major equipment vendors about what their sales are into the
outpatient, non-hospital affiliated imaging providers, it would not at all
surprise us to see that the drop-off in purchasing is well beyond 50% from the
same time last year. It is clear, as we survey the landscape and field the
numerous requests that we get about acquisition opportunities, that the
outpatient market has substantially pulled back in their purchasing and which I
believe represents further opportunity for consolidation in this market.

                       We have been aggressive in this first quarter with our
digital mammography initiative, as well as some new MRI scanners and PET/CT
scanners that have gone into place, so I don't think anybody can look at our
activity and feel that it is a benchmark for the rest of the industry. The rest
of the industry, I think, is in even greater chaos and turmoil now than it was
earlier this year and at the end of last year, and I think GE's results, as well
as results that have been reported from Siemens and other manufacturers, amplify
this, and I don't see this changing dramatically here for at least another two
quarters or maybe even two to three years.

BRIAN TANQUILUT:       So is it safe that prices for these machines have come
down or that there's a secondary  market out there?

DR. HOWARD BERGER:     I think there's a very aggressive secondary market, which
we are taking advantage of, and I think that the pricing in general for what,
for people who are in the market to purchase equipment, has substantially
softened, and we are taking advantage of this. Also, the larger we get in
RadNet, the better that we can move assets around within our organization and
maximize the useful life of this equipment. So we're not always buying new
equipment or any equipment at all; sometimes it's just moving equipment from
some centers that we look to upgrade and then utilizing that equipment in other
operations. We will talk, perhaps, more about that after our second quarter
results with initiatives, for example, that we're current, that are currently
under way in our New Delaware market.

BRIAN TANQUILUT:       Okay. Thank you.

OPERATOR:              Thank you. And we'll take our next question from Rob
Mains with Morgan Keegan.  Please go ahead.

ROB MAINS:             Good morning. Mark, thanks for the same-store numbers. Do
you have the overall same-store procedure growth?

MARK STOLPER:          Yes. Overall same-store procedures, which includes both
the advanced imaging and the routine imaging, was 2.4%.

ROB MAINS:             Okay. Any particular reason for the slowdown in CT?

DR. HOWARD BERGER:     Rob, I'll take that question. I think the slowdown in CT
was the result of perhaps two or three events. First off, many of you have seen
some of the information that had come out in a couple of articles in the medical
literature about x-ray dose exposure from CT scanning. I think that that did
have a bit of a chilling effect on a number of referrers and patients. While I
believe that article is overstating the issue, nonetheless I believe that there

                                      -26-


were a number of people who began to question the need for CT scanning as a, as
extensively as it's being done. We, of course, don't feel that way, but we did
feel I think some initial impact from that, number one.

                       Number two, at least in the Rochester market where we do
a lot of CT scanning, the CareCore impact in the end of the fourth quarter and
into the first quarter did have some impact in that market, which is a very high
volume one for us. And thirdly, I think just in general the beginning of the
year given that CT scanning is a little bit more used for acute medical problems
versus MRI scanning, which tends to be used more as an elective procedure for
less acute, tends to be a little bit less at the beginning of the year given
issues surrounding deductibles and just people perhaps putting off some of that
a little longer than they have. I expect our volumes in the second quarter will
be more consistent with the growth rates that we're seeing with the other
modalities.

ROB MAINS:             Got you. And then also, Mark, if I look at the same-store
numbers, if you (sp?), kind of similar to the overall even though you added some
equipment. Are, like Yonkers and Pleasanton, are those included in same-stores?

MARK STOLPER:          We did keep Yonkers and Pleasanton in the same-store
results, which I, which essentially hurts us a little bit because they were
fully obviously operational in Q1 of 2007 and because of the replacement of
those centers in 2008, the contribution of those centers in the Q1 2008 were
much less.

ROB MAINS:             Could you describe the replacement? Are they, you know,
bigger or smaller, you know, better equipment? What's sort of the rationale
behind them and what you've accomplished?

DR. HOWARD BERGER:     Yes, I'll take that one, Rob. Both of these centers were
centers that had long suffered from under-investing and that in order to keep
competitive in those markets, really needed to have substantial upgrades. It was
determined by the Company that in both instances, we were unable to do the
upgrading of those centers in their current facilities, so we aggressively
looked for new locations in those same markets that I'm talking about,
relatively close distances, a mile or two away, where we could begin the process
of transitioning, not just the upgraded equipment but essentially building up
brand new centers.

                       So in both cases, the centers were probably doubled in
size and virtually every piece of equipment was replaced to accommodate what we
anticipate would be substantially greater volumes that we are likely to be the
beneficiaries of, both because we're, we have newer equipment and better
facilities and that there was business, we believe, not necessarily being
directed to both of those centers due to the equipment, as well as the
facilities themselves being less attractive. So we would expect in the
subsequent quarters here to benefit significantly in volume in both of these
locations.

ROB MAINS:             Got you. When do the new locations open, please?

                                      -27-


DR. HOWARD BERGER:     The new location in Yonkers opened up at the end of
April, the last week of April. The new location in Pleasanton is opening up, I
believe, very close to the end of May here.

ROB MAINS:             Okay. And then just a couple of others. First of all,
digital mammography, did I hear right that you get a 60% higher payment?

MARK STOLPER:          Yes, digital mammography using film screen averages about
$80 in a, for reimbursement right now. That jumps up to about $130 when you
implement digital mammography.

ROB MAINS:             Okay. And last question, just generally, you touched on
this situation in Rochester. Could you describe sort of where managed care and
private insurance pricing is in general for you?

DR. HOWARD BERGER:     Yes, we're very comfortable with our pricing. We have not
seen any significant efforts on the part of providers to, excuse me, payers to
lower reimbursement. It's really I think more of an effort like we saw in
Rochester to control utilization. And several of them, which have made public
announcements that they have attempted to implement some management for
radiology utilization will probably be more of their focus, I believe, rather
than that associated with trying to lower reimbursement.

                       That being said, again, I would like to remind everybody
that part of the RadNet strategy of being multi-modality and in, you know,
trying to be in geographic markets where we have dense assets, should be
providing us opportunities to meet with our larger payors and have a better
voice in determining what the reimbursement will be going into the future. So,
while we're not seeing any pressure today of any consequence on the downside on
reimbursement, we hope that that trend may actually turn positive for us, which
it already has begun in a couple of smaller situations in other markets that,
where we have that kind of density and negotiating leverage.

ROB MAINS:             So in aggregate you're seeing pricing as kind of flattish
right now?

DR. HOWARD BERGER:     Yes.

ROB MAINS:             Great. That's all I needed, thanks.

DR. HOWARD BERGER:     Okay.

OPERATOR:              Thank you. And we'll take our next question from Darren
Lehrich with Deutsche Bank. Please go ahead.

DARREN LEHRICH:        Thanks, good morning. I just wanted to follow-up on the
last question regarding pricing. Can you, Mark, give us the same-store revenue?
I think you gave us the scan numbers on a same-store basis, but do you have
anything to say about same-store revenue?

                                      -28-


MARK STOLPER:          Yes, Darren, because pricing was essentially flat
year-over-year, the same-store sales revenue is appreciably the same as the
same-store sales volumes.

DARREN LEHRICH:        Okay, so about 2.5%?

MARK STOLPER:          Correct.

DARREN LEHRICH:        Okay. And can you talk a little bit about the Baltimore
market? I know you, you know, you've announced a restructuring of one of the
joint ventures there and just remind us in the second quarter and going forward
what kind of impact that may have to consolidated revenue? I just want to make
sure we're thinking about that situation in the context of the revenue you'll be
reporting on a consolidated basis.

DR. HOWARD BERGER:     Darren, I'll take that one. Both, the two, two of the
three largest joint ventures that we have in the Maryland market, one with St.
Joseph's Hospital in Townsend (sp?) and Carroll County Hospital in Carroll
County, were restructured in the December period of 2007. In the case of Carroll
County, we actually owned 25% of the joint venture, and we bought up our
interest of 40%. That center was already unconsolidated in the way we've
reported our results, so we, in the EBITDA and in the income section there is no
contribution from a revenue standpoint for that center.

                       The opposite is true really of St. Joseph's in Townsend
where we owned 50, excuse me, 75% of that joint venture and the hospital bought
up to a 51% ownership, and we now own 49%. However, through that process we
increased our management contract, actually we increased our management contract
in both ventures. In the case of St. Joseph it went from a consolidated, so
revenues in 19, in 2007 included the revenues from the joint venture, and then
we showed the minority interest participation to an unconsolidated. So prior to
2008, we were generating about $5 million of revenue, which is no longer there.
So that would be about a million and a quarter, roughly speaking.

                       In both joint ventures, though, while we either increased
or lowered our percentage and we're now a minority partner in both, we increased
our management contract substantially, generally from about 5% to, in one case,
to close to 11% all in and in the other from about 9% to 12. But more
importantly, in the case of St. Joseph's, we dramatically expanded the
operations to include not only MRI and CT, which is what existed prior to 2008,
but now the hospitals PET/CT scanning, which had just gotten into expansion of
their routine imaging and particularly digital mammography, which has almost
doubled the amount of mammography we're now doing there, as well as having
ultrasound and all routine imaging as part of the joint venture.

                       So what will be happening in that case, while we have
eliminated $5 million approximately of revenue prior to the, prior to it moving
to an unconsolidated, the revenue from that center is now dramatically
increasing, and we expect the results from both of these joint ventures to have
significant impacts in the 2008 results, which we began to see in the first
quarter and which should accelerate dramatically through the remainder of the
year.

                                      -29-


DARREN LEHRICH:        Okay, that's helpful refreshing me there. And then just
stepping back and thinking about just management fees overall, Mark, can you
just give us an idea of what they were in the first quarter here? I know there's
other, you know, elements to that besides management fees from ventures like
this, but just help us understand what that management fee stream is right now
on a quarterly basis?

DR. HOWARD BERGER:     On a quarterly basis, if we eliminate the management fees
from the joint venture, Darren, is that what you're talking about?

DARREN LEHRICH:        Yes, I mean, you know, including those, however you want
to discuss it, but you know, I know you've got the RadNet management subsidiary
as well, but I just want to get a sense for what, you know, what those fees are.

DR. HOWARD BERGER:     Yes, the management fees for the Company, besides those
that come from a management fee related to the joint ventures, generally run
about $1.5 million a quarter. That's what we call our corporate revenue outside
of the joint venture management fee. Of that, about half of it comes from RadNet
managed imaging services, approximately 250,000, excuse me, $750,000 a quarter
for the oversight of the, currently the old Nidick (sp?) imaging centers, as
well as some other smaller opportunities that we have.

DARREN LEHRICH:        Okay, that's great. And then, Howard, you know, I guess
we heard you comment here about, you know, the expectation that you would return
to some acquisitions in the second half. I guess, just in the interim, can you
give us some commentary about how you are thinking about, you know, maybe
waiting on some deals that might look attractive at this point while you
continue to absorb the things that you've acquired over the last 12 months, you
know, that probably is a little bit of a balancing act? But give us a sense for
how we ought to be thinking about, you know, you basically delaying some
acquisitions perhaps as you absorb some of these things?

DR. HOWARD BERGER:     Yes, I don't know if we're delaying the acquisitions that
we are evaluating as much as just trying to determine appropriate timing and
pricing for them. I believe that, you know, once we get past the second quarter
here, some of the numerous, there's probably at least a dozen different
transactions that are in various stages of valuation here. And just given the
timing that we need to complete our due diligence, to try to negotiate these
deals and ultimately absorb them, pushes them into the third or fourth quarter
of this year.

                       But all of these are opportunities that we're looking at
in our current markets. And I believe, consistent with information that I've
talked about before in terms of acquisition, multiples of three to five are
still very much consistent with what we see those opportunities to be. If
anything, we see perhaps those multiples in many of these cases being driven
down more towards the lower end of that range rather than the higher. But we
will continue to be diligent and look for these opportunistic ways of growing
the Company's revenue and also, and perhaps more importantly, helping to
solidify our presence in these markets to enable us to better push back on
reimbursement opportunities.

DARREN LEHRICH:        Okay, great. And just last thing for me here, Mark, I
know you alluded to this in your prepared remarks, but just in terms of thinking
about a more optimal capital structure, can you help us at least just frame
what, you know, what kinds of things you're looking at at the moment?

                                      -30-


MARK STOLPER:          Sure. I mean, I think everything is on the table at this
point. I mean we're having dialogue with both GE, as well as other advisors, as
to opportunities to potentially lower the cost of capital on the credit side.
And that could be anything from similar types of structures that we have today,
meaning in the private credit markets, to looking at, you know, public debt such
as high yield bonds which, and that market has come back very favorably
recently. So I think we're looking at all, you know, at all alternatives at this
point. And, you know, we're going to be evaluating them over the next couple of
quarters, and you probably will hear more from us in the coming months.

DARREN LEHRICH:        Great. Thanks, guys.

MARK STOLPER:          Thank you.

OPERATOR:              Thank you. And we'll take our next question from Gary
Goldstein with Mithra Research. Please go ahead.

GARY GOLDSTEIN:        First of all, guys, congratulations on the quarter. That
was a good quarter. We've been getting some questions and I wanted to, I guess,
continue just a little bit on the breast disease management initiative. When you
guys find a center, what are you guys looking at as far as replication goes? How
easily will you be able to replicate this and are you guys pursuing further
acquisitions in this area?

DR. HOWARD BERGER:     I'll answer that question, Gary. The way that you
replicate this is to really base the opportunity around the imaging portion of
this; I can't emphasize that enough. When you look at surgeons that specialize
in breast cancer, and when you look at oncologists that special in this, they
are both very challenged today because of reimbursement issues, particularly on
the oncology side, which has had a dramatic effect on their practices due to the
changes in reimbursement on chemotherapy.

                       As a result, many of these practitioners are having
challenges trying to manage their practices and optimize their income in ways
that they never had the need to before. But what really drives the process is
for us to look at areas where we either currently have substantial imaging
resources, particularly with mammography, and then compliment those either with
the existing practitioners that, whose practices that we've already absorbed or
adding to those practices by keeping this under one roof, if you will, or one
professional group.

                       So we first would look at where do we have the
substantial imaging resources and volumes that will continue to drive the
detection and treatment, or the diagnosis and treatment of breast cancer rather
than look at it in how do we, do we have an oncology practice that we'd like to
acquire but where we don't have the imaging resources to benefit from
incorporating that practice there. So to the extent that if you went to our
website and you saw those centers where we more aggressively market mammography
and women's health services, of which there's as I've mentioned before about a
half a dozen just in southern California, those are the places where we would
look to try to incorporate the other professional activities underneath the
banner of Breastlink that we have now done for this first project.

                                      -31-


                       So I really want to emphasize that the driver for us in
this is not to get into, you know, practice management for cancer specialists
and practice management for surgeons. It's to really bring their practices into
the realm of our very, of our larger and more substantial imaging centers and
those that are driven very much by mammography into this comprehensive model. So
I think, I'm glad you've asked the question because I think it's important for
people to recognize that imaging is, like it is in so many other of the
specialties out there, whether you talk about orthopedics, neurology,
cardiology, even kidney, are very much becoming more and more dependent on
imaging. It just so happens that breast cancer is now very paramount with its
need to have imaging closely related to it and where we believe we can leverage
up at those centers by incorporating these other specialties into our existing
operations.

GARY GOLDSTEIN:        Right. So taking a look from 20,000 feet, this represents
a gigantic opportunity; am I wrong in that?

DR. HOWARD BERGER:     Well, I don't think you're wrong in that. The extent to
which we go into it, I will give you some statistics which are, you know, fairly
well publicized in the oncology literature.

GARY GOLDSTEIN:        I would appreciate (inaudible).

DR. HOWARD BERGER:     But approximately one out of every eight women will
develop breast cancer, and approximately five out of every 100 screening
mammograms that we do will ultimately get detected to have breast cancer. Well
if, for example, I were to take Maryland where we will do, you know, 250,000
mammograms, that means that if you multiply five times 250 that operation
currently will detect somewhere between 1,200 and maybe 1,500 breast cancers by
itself. Putting it in perspective, we believe that we do in Maryland
approximately a third to maybe as much as 40% of all the mammography in the
State of Maryland. So by being able to perhaps carry this initiative into a more
comprehensive approach to breast cancer, you can begin to see the opportunities
that this represents for us in somewhat of a unique way. While oncology in
general does have imaging as a critical part of it, it's nowhere near the level
that is now required when you deal with breast cancer.

GARY GOLDSTEIN:        And I appreciate that. And approximately how many other
centers are being upgraded, just if we could stick with mammography for a
second? How many other centers are being upgraded to digital mammography? And as
a second part, did I understand correctly that you guys expect to have all the
Papastavros Centers upgraded by the end of June?

DR. HOWARD BERGER:     Yes. The answer to the second question, we already I
believe have half of the systems already transitioned from analog to digital
mammography in the four major Papastavros Centers. The other two will be done
before the end of this quarter. And just in general, Gary, to answer your
question, we expect that 100% of all the mammography done in RadNet Centers will
be digital by the end of this year. We're currently probably at 75 or 80% of
that number now.

GARY GOLDSTEIN:        Okay. And I'm sorry, did I miss cap ex for the Q?
(Unintelligible).

MARK STOLPER:          Yes, let me just get you the numbers here.

                                      -32-


GARY GOLDSTEIN:        Well thanks, Howard.

DR. HOWARD BERGER:     While Mark's looking for that, Gary, let me amplify on
one perspective here. In this particular initiative in Orange County the group
on the oncology side whose practice we absorb, is seeing 600 to 700 cancers,
breast, new breast cancers a year. All of those patients will ultimately get
their imaging and follow-up examinations within the RadNet network as we begin
to transition their practice. We were seeing very little, if any, of that prior
to the acquisition.

                       More importantly, the surgeon whose practice we brought
underneath our professional umbrella was, sees approximately 200 to 250 new
breast cancers a year and the breast wing (sp?) practice was not seeing any of
those cancers from that surgeon. So we now have a comprehensive approach to this
where all of the imaging, all the new breast cancers and all the required, you
know, surgical procedures will be done for approximately 1,000 new cancers that
will be detected over the next 12 months from the integration of these three
practices and...

GARY GOLDSTEIN:        Ouch, so this really could be huge.

DR. HOWARD BERGER:     Well, I, we're very excited about this, to say the least,
and I think, I can't emphasize enough how important this initiative is to
develop other revenue lines and to incorporate, I think, opportunities within
imaging that didn't exist prior to us getting this initiative off the ground.
And I think you'll be hearing a lot more about this, both with the current
initiative, as well as other things that we're doing to expand this opportunity
through the upcoming quarters.

GARY GOLDSTEIN:        That's great. And what kind of backlogs were you guys
experiencing in Maryland? And has it been similar in Delaware, the mammography
I'm talking about?

DR. HOWARD BERGER:     Yes. In Maryland it was more prominent than it is in
Delaware, but it wasn't unusual for us to have centers with two and three-month
backlogs. Not all of them, so I don't want that to be necessarily taken beyond.
But right now we're able to access those backlogs and that's one of the reasons
why part of our model, at least in certain of the centers in Maryland, we
believe we can triple our, what had been our standard growth in mammography.
Mammography had been growing at about 5% annually in the Maryland market. We
believe in many of our centers, not necessarily all of them, but in many of
those centers that growth may be as much as 15% this year.

MARK STOLPER:          Gary, to answer your question on cap ex during the
quarter, our net cash cap ex for the quarter was $9.5 million. We also entered
into capital leases meeting finance cap ex of $12.1 million during the quarter.
A substantial portion of which, you know, were the, of the cash cap ex were for
the Hologic digital mammography machines.

GARY GOLDSTEIN:        Appreciate it very much. Great quarter, guys.

MARK STOLPER:          Thank you.

OPERATOR:              Thank you. And we'll take our final question from Gary
Lieberman with Stanford Group. Please go ahead.

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RYAN HALSTEAD:         Thank you. This is Ryan Halstead in for Gary Lieberman.
Just one question, I was hoping you could maybe give some detail on your
operating expenses? If I exclude the employee stock compensation, it looks like
it increased year-over-year as a percent of revenue. Any detail or any
commentary on that would be helpful. Thanks.

MARK STOLPER:          Sure. It did increase and when we file our Q later today
you'll see a table in there that breaks out the portion of the increases. The
majority of the increase in the operating expenses is a result of a, you know, a
larger base of business, meaning the salaries of employees related to the
additional centers that we acquired. G&A did go up a little bit as we continue
to build our infrastructure to manage a greater portion, a larger book of
business. However, I don't see that continuing to increase substantially as we
add additional revenue to the Company. So you'll get a pretty detailed table in
the Q today.

RYAN HALSTEAD:         Great, thanks.

OPERATOR:              Thank you. That concludes our question and answer
session. At this time, I'd like to turn the call back over to Dr. Howard Berger
for any additional or closing remarks. Please go ahead.

DR. HOWARD BERGER:     Again, thank you all for spending a portion of your day
listening to the RadNet earnings call. I hope we've been able to impart
information about not only this quarter, but more importantly, the future
quarters that are ahead of us. As I said before, we remain very enthusiastic
about the Company's opportunity, and we eagerly look forward to the next
earnings call we'll have, which we'll be able to talk about the second quarter
results and give you perhaps even greater insight into all the investments and
initiatives which the Company has undertaken here over the last six months.

MARK STOLPER:          Thank you.

OPERATOR:              Thank you. That concludes today's conference. We
appreciate your participation. You may now disconnect.



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