8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 1, 2010

RadNet, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-19019	13-3326724
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

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 (see General Instruction A.2. below): 

¨ 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))

EXPLANATORY NOTE

This Form 8-K/A amends the Form 8-K/A filed by RadNet, Inc. (“RadNet”) with the Securities and Exchange Commission (the “Commission”) on December 17, 2010 (the “Initial 8-K/A”), relating to RadNet’s acquisition of Image Medical Corporation, parent of eRAD, Inc. (the “Acquisition”). RadNet is filing this amendment to provide revised unaudited pro forma financial information required to be filed under Item 9.01 of Form 8-K in connection with the Acquisition, and which is consistent with the unaudited pro forma financial information included in Amendment No. 1 to RadNet’s Registration Statement on Form S-4 (File No. 333-169107) filed with the Commission on January 10, 2011.

ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

This Form 8-K/A amends the Initial 8-K/A in order to supersede in its entirety the unaudited pro forma financial information included therein with the revised unaudited pro forma financial information set forth in Item 9.01 below pertaining to the Acquisition. The information previously reported in the Initial 8-K/A, other than the unaudited pro forma financial information, is hereby incorporated by reference into this Form 8-K/A.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(b) Pro Forma Financial Information

The following unaudited pro forma condensed consolidated financial information is being filed with this report as Exhibit 99.2:

· Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2010;

· Unaudited Pro Forma Condensed Consolidated Statements of Operation for the nine months ended September 30, 2010;

· Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2009; and

· Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.

The unaudited pro forma condensed consolidated financial information is presented for informational purposes only. The pro forma data is not necessarily indicative of what RadNet’s financial position or results of operations actually would have been had RadNet completed the acquisition as of the dates indicated. In addition, the unaudited pro forma condensed consolidated financial information does not purport to project the future financial position or operating results of the consolidated company.

(d) Exhibits

Exhibit 99.2 – Unaudited pro forma condensed consolidated financial information.

-2-

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.

	RadNet, Inc.
Dated: January 13, 2011	By:	/s/ JEFFREY L. LINDEN
		Jeffrey L. Linden
		Executive Vice President and General Counsel

-3-

EX-99.2

Exhibit 99.2

Unaudited Pro Forma Condensed Consolidated Financial Statements

On October 1, 2010, Radnet, Inc. (“RadNet”) completed its acquisition of Image Medical Corporation, parent of eRAD Inc. (“eRAD”). The following unaudited pro forma condensed consolidated financial statements have been prepared to give effect to the completed acquisition, which was accounted for as an acquisition.

The unaudited pro forma condensed consolidated balance sheet as of September 30, 2010, and the unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2010 and the year ended December 31, 2009, are presented herein. The unaudited pro forma condensed consolidated balance sheet was prepared using the historical balance sheets of RadNet and eRAD as of September 30, 2010. The unaudited pro forma condensed consolidated statements of operations were prepared using the historical statements of operations of RadNet and eRAD for the nine months ended September 30, 2010 and for the year ended December 31, 2009.

The unaudited pro forma condensed consolidated balance sheet gives effect to the acquisition as if it had been completed on September 30, 2010, and consolidates the unaudited condensed balance sheet of RadNet and eRAD. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2010 and for the year ended December 31, 2009 give effect to the acquisition as if it had occurred on January 1, 2009.

The unaudited pro forma condensed consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes and do not purport to represent what the financial position or results of operations actually would have been if the events described above occurred as of the dates indicated or what such financial position or results would be for any future periods. The unaudited pro forma condensed consolidated financial statements, and the accompanying notes, are based upon the respective historical consolidated financial statements of RadNet and eRAD, and should be read in conjunction with RadNet’s historical financial statements and related notes, RadNet’s “Management’s Discussion and Analysis of Financial Condition and Results of Operation” contained in RadNet’s Annual Report on Form 10-K for the year ended December 31, 2009, and eRAD’s financial statements presented herein.

RADNET, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

(IN THOUSANDS)

As of September 30, 2010

							Pro forma			Pro forma
	RadNet			eRAD			adjustments			combined
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	24,462		$	51		$	(8,500	)(a)	$	16,013
Accounts receivable, net		94,604			733			-			95,337
Prepaid expenses and other current assets		16,472			57			-			16,529
Total current assets		135,538			841			(8,500	)		127,879
PROPERTY AND EQUIPMENT, NET		190,031			291			-	(i)		190,322
OTHER ASSETS
Goodwill		125,011			-			7,287	(b)		132,298
Other intangible assets		52,569			-			4,343	(b)		56,912
Deferred financing costs, net		16,003			-			-			16,003
Investment in joint ventures		16,020			-			-			16,020
Deposits and other		2,478			6			-			2,484
Total assets	$	537,650		$	1,138		$	3,130		$	541,919
LIABILITIES AND EQUITY DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	84,640		$	628		$	-		$	85,268
Deferred compensation payable		-			2,031			(2,031	)(c)		-
Deferred revenue		-			1,361			-			1,361
Due to affiliates		2,382			-			-			2,382
Current portion of notes payable		8,043			6,118			(6,118	)(d)		8,043
Current portion of deferred rent		717			4			-			721
Obligations under capital leases, current portion		10,227			9			-			10,236
Total current liabilities		106,009			10,150			(8,148	)		108,010
LONG-TERM LIABILITIES
Deferred rent, net of current portion		10,638			10			-			10,648
Deferred taxes		277			-			-			277
Notes payable, net of current portion		480,684			-			-			480,684
Notes payable to eRAD shareholders		-			-			2,250	(e)		2,250
Obligations under capital leases, net of current portion		6,565			7			-			6,572
Other non-current liabilities		21,004			-			-			21,004
Total liabilities		625,177			10,167			(5,898	)		629,446
COMMITMENTS AND CONTINGENCIES
EQUITY DEFICIT
Common stock		4			-			-			4
Paid-in-capital		161,018			4,460			(4,460	)(f)		161,018
Accumulated other comprehensive loss		(2,453	)		-			-			(2,453	)
Accumulated deficit		(246,141	)		(13,489	)		13,489	(g)		(246,141	)
Total Radnet, Inc.'s equity deficit		(87,572	)		(9,029	)		9,029			(87,572	)
Noncontrolling interests		45			-			-			45
Total equity deficit		(87,527	)		(9,029	)		9,029			(87,527	)
Total liabilities and equity deficit	$	537,650		$	1,138		$	3,130		$	541,919

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

RADNET, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE DATA)

For the nine months ended September 30, 2010

						Pro forma			Pro forma
	RadNet			eRAD		adjustments			combined
NET REVENUE	$	403,222		$	3,761	$	-		$	406,983
OPERATING EXPENSES
Cost of operations		311,478			3,576		-			315,054
Depreciation and amortization		40,153			57		693	(i)		40,903
Provision for bad debts		24,603			-		-			24,603
Loss on sale of equipment		606			-		-			606
Severance costs		731			-		-			731
Total operating expenses		377,571			3,633		693			381,897
INCOME FROM OPERATIONS		25,651			128		(693	)		25,086
OTHER EXPENSES
Interest expense		35,477			48		386	(h)		35,911
Loss on extinguishment of debt		9,871			-		-			9,871
Other expenses		1,971			6		-			1,977
Total other expenses		47,319			54		386			47,759
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY
IN EARNINGS OF JOINT VENTURES		(21,668	)		74		(1,079	)		(22,673	)
Benefit from (provision for) income taxes		(523	)		2		-			(521	)
Equity in earnings of joint ventures		6,114					-			6,114
NET INCOME (LOSS)		(16,077	)		76		(1,079	)		(17,080	)
Net income attributable to noncontrolling interests		75			-		-			75
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(16,152	)	$	76	$	(1,079	)	$	(17,155	)
BASIC AND DILUTED NET LOSS PER SHARE
ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(0.44	)						$	(0.47	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		36,755,781								36,755,781

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

RADNET, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE DATA)

For the year ended December 31, 2009

							Pro forma			Pro forma
	RadNet			eRAD			adjustments			combined
NET REVENUE	$	524,368		$	4,771		$	-		$	529,139
OPERATING EXPENSES
Cost of operations		397,753			5,220			-			402,973
Depreciation and amortization		53,800			62			924	(i)		54,786
Provision for bad debts		32,704			-			-			32,704
Loss on sale of equipment		523			-			-			523
Severance costs		731			-			-			731
Total operating expenses		485,511			5,282			924			491,717
INCOME (LOSS) FROM OPERATIONS		38,857			(511	)		(924	)		37,422
OTHER EXPENSES
Interest expense		49,193			197			505	(h)		49,895
Gain on bargain purchase		(1,387	)		-			-			(1,387	)
Other expenses (income)		1,239			(4	)		-			1,235
Total other expenses		49,045			193			505			49,743
LOSS BEFORE INCOME TAXES AND EQUITY
IN EARNINGS OF JOINT VENTURES		(10,188	)		(704	)		(1,429	)		(12,321	)
Provision for income taxes		(443	)		(12	)		-			(455	)
Equity in earnings of joint ventures		8,456						-			8,456
NET LOSS		(2,175	)		(716	)		(1,429	)		(4,320	)
Net income attributable to noncontrolling interests		92						-			92
NET LOSS ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(2,267	)	$	(716	)	$	(1,429	)	$	(4,412	)
BASIC AND DILUTED NET LOSS PER SHARE
ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(0.06	)							$	(0.12	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		36,047,033									36,047,033

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

RadNet, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1.                      Basis of Presentation

The unaudited pro forma condensed consolidated statements of operations of RadNet, Inc. (“RadNet”) for the nine months ended September 30, 2010 and the year ended December 31, 2009 give effect to the acquisition of Image Medical Corporation, parent of eRAD, Inc. (“eRAD”) as if it had been completed on January 1, 2009. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2010 gives effect to the acquisition of eRAD as if it had occurred on September 30, 2010.

The unaudited pro forma condensed consolidated statements of operations and unaudited pro forma condensed consolidated balance sheet were derived by adjusting RadNet’s historical financial statements for the acquisition of eRAD. The unaudited pro forma condensed consolidated balance sheet and unaudited pro forma condensed consolidated statement of operations are provided for informational purposes only and should not be construed to be indicative of RadNet’s financial position or results of operations had the transaction been consummated on the dates indicated and do not project RadNet’s financial position or results of operations for any future period or date.

The unaudited pro forma condensed consolidated balance sheet and unaudited condensed consolidated statements of operations and accompanying notes should be read in conjunction with RadNet’s historical financial statements and related notes, RadNet’s “Management’s Discussion and Analysis of Financial Condition and Results of Operation” contained in RadNet’s Annual Report on Form 10-K for the year ended December 31, 2009, and eRAD’s financial statements presented herein.

Note 2.                      Preliminary Purchase Price

The unaudited pro forma condensed consolidated financial statements reflect a purchase price of $10,750,000. RadNet paid $8,500,000 of the purchase price in cash, and paid the remainder of the purchase price through the issuance of promissory notes to the shareholders of eRAD totaling $2,250,000.

The preliminary purchase price allocation as of September 30, 2010, subject to change pending completion of the final valuation and analysis, is as follows (in thousands):

Tangible assets	$	1,138
Goodwill		7,287
Developed technology and in-process R&D		2,688
Trade name and customer relationships		1,655
Total assets acquired		12,768
Liabilities assumed		(2,018	)
Net assets acquired	$	10,750

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. Developed technology is being amortized on a straight-line basis over five years.

Note 3.                      Pro Forma Adjustments

The following pro forma adjustments are based upon management’s preliminary estimates of the value of the tangible and intangible assets acquired. These estimates are subject to finalization.

(a) Represents the funds used for the acquisition.

(b) Represents $7,287,000 of goodwill and $4,343,000 of other intangible assets resulting from the transaction, as if the acquisition had been completed on October 1, 2010. The final valuation of the purchase price allocation between goodwill and identifiable intangible assets has not yet been completed. These amounts represent RadNet’s best estimates and are subject to change pending completion of the final valuation and analysis.

(c) Represents obligations under a deferred compensation policy that were settled using part of the $10,750,000 purchase price.

(d) Represents loans payable to certain shareholders of eRAD that were settled using part of the $10,750,000 purchase price.

(e) Represents promissory notes issued to the shareholders of eRAD as explained in Note 2 above.

(f) Represents the elimination of the capital stock of eRAD upon RadNet’s purchase of eRAD.

(g) Represents the elimination of eRAD’s accumulated deficit upon RadNet’s purchase of eRAD.