10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K/A

AMENDMENT NO. 1

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-33307

RadNet, Inc.

(Exact name of registrant as specified in charter)

Delaware	13-3326724
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1510 Cotner Avenue
Los Angeles, California	90025
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 478-7808

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of each exchange on which registered
Common Stock, $.0001 par value	NASDAQ Global Market

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes    ¨   No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) or the act.  Yes   ¨  No   x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x      No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x     No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer    ¨	Accelerated Filer   x
Non-Accelerated Filer    ¨   (Do not check if a smaller reporting company)	Smaller Reporting Company    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2) Yes   ¨ No x

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately $224,518,331 on June 30, 2016 (the last business day of the registrant’s most recently completed second quarter) based on the closing price for the common stock on the NASDAQ Global Market on June 30, 2016.

The number of shares of the registrant’s common stock outstanding on March 9, 2017, was 47,198,596.

DOCUMENTS INCORPORATED BY REFERENCE

The information required by Part III of the Form 10-K, to the extent not set forth herein or in the Annual Report on Form 10-K filed on March 16, 2017, is incorporated herein by reference from the registrant’s definitive proxy statement for the Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the close of the registrant’s fiscal year.

EXPLANATORY NOTE

We are filing this Form 10-K/A (Amendment No. 1) to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, originally filed with the U.S. Securities and Exchange Commission on March 16, 2017 (the "Original Filing"), solely for the purpose of including the financial statements of certain unconsolidated joint ventures in accordance with Rule 3-09 of Regulation S-X.  Rule 3-09 requires that we file financial statements of unconsolidated joint ventures to the extent that the unconsolidated joint ventures are individually significant.  Such statements are required to be audited only for the years in which such unconsolidated joint ventures met applicable significance tests. Under Rule 3-09 of Regulation S-X, we are permitted to file the financial statements for these unconsolidated joint ventures within 90 days of the end of our fiscal year.

We determined that as of and for the year ended December 31, 2014, four of our unconsolidated joint venture interests, including Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), were significant unconsolidated joint ventures under Rule 3-09, and the accompanying financial statements for that period are audited. The Group did not meet the applicable significance test for the years ended December 31, 2016 or 2015; therefore, the Group’s accompanying financial statements are required to be included for those years, but are not required to be audited. We are permitted to file combined financial statements for individually significant joint ventures which are in the same line of business.

In our Original Filing, we inadvertently indicated by check mark that no disclosure is being made pursuant to Item 405 of Regulation S-K. We have determined that there was a delinquent filer, which we will disclose in the definitive proxy statement and therefore, we have not checked the box in this Form 10-K/A.

Except as described above, this Form 10-K/A does not amend or change any other items or disclosures in the Original Filing.  The disclosure in this Form 10-K/A has not been updated to reflect events occurring after the Original Filing.  Accordingly, this Amendment should be read in conjunction with the Original Filing and our other filings with the SEC subsequent to the Original Filing.

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PART IV 

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

The following financial statements of RadNet, Inc. and consolidated subsidiaries were filed with the Original Filing on March 16, 2017:

Report of Independent Registered Public Accounting Firm	51
Consolidated Balance Sheets	52
Consolidated Statements of Operations	53
Consolidated Statements of Comprehensive Income	54
Consolidated Statements of Equity (Deficit)	55
Consolidated Statements of Cash Flows	56
Notes to Consolidated Financial Statements	58 to 81

(a)(2) Financial Statements Schedules    

Schedules – The following financial statement schedules of RadNet, Inc. and consolidated subsidiaries were filed with the Original Filing on March 16, 2017:

Schedule II – Valuation and Qualifying Accounts  

(a)(3) Exhibit Index

See the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K/A (Amendment No. 1).

(c) Financial Statement Schedules

The following combined financial statements of the Group are filed herewith pursuant to Rule 3-09 of Regulation S-X:

	Page No
Report of Independent Registered Public Accounting Firm	3
Combined Balance Sheets of Certain RadNet, Inc. Affiliates	4
Combined Statements of Income of Certain RadNet, Inc. Affiliates	5
Combined Statements of Partners’ Capital of Certain RadNet, Inc. Affiliates	6
Combined Statements of Cash Flows of Certain RadNet, Inc. Affiliates	7
Notes to Combined Financial Statements	8 to 12

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Report of Independent Registered Public Accounting Firm

To the partners of:

Franklin Imaging Joint Venture;

Carroll County Radiology, LLC;

MRI at St. Joseph Medical Center, LLC; and

Greater Baltimore Diagnostic Imaging Partnership

We have audited the accompanying combined statements of income, partners’ capital, and cash flows of certain RadNet, Inc. affiliates including Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), for the year ended December 31, 2014. These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Group’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the combined results of the Group’s operations and their cash flows for the year ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young, LLP

March 31, 2015

Los Angeles, California

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CERTAIN RADNET, INC. AFFILIATES

COMBINED BALANCE SHEETS

(IN THOUSANDS)

	December 31,		December 31,
	2016		2015
	(unaudited)		(unaudited)
ASSETS
CURRENT ASSETS
Accounts receivable, net	$	10,484	$	5,671
Due from affiliates		10,022		5,260
Prepaid expenses and other current assets		435		538
Total current assets		20,941		11,469
PROPERTY AND EQUIPMENT, NET		13,017		13,752
OTHER ASSETS
Goodwill		10,572		9,923
Other intangible assets		229		350
Other assets		4		–
Total assets	$	44,763	$	35,494
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,246	$	837
Current portion of deferred rent		282		274
Current portion of equipment notes payable		201		208
Current portion of obligations under capital leases		64		–
Total current liabilities		1,793		1,319
LONG-TERM LIABILITIES
Deferred rent, net of current portion		752		1,028
Equipment notes payable, net of current portion		156		357
Obligations under capital leases, net of current portion		157		–
Total liabilities		2,858		2,704
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL
RadNet, Inc.		19,284		15,123
Other partners		22,621		17,667
Total partners' capital		41,905		32,790
Total liabilities and partners' capital	$	44,763	$	35,494

The accompanying notes are an integral part of these financial statements.

4

CERTAIN RADNET, INC. AFFILIATES

COMBINED STATEMENTS OF INCOME

(IN THOUSANDS)

	Years Ended December 31,
	2016			2015			2014
	(unaudited)			(unaudited)
NET SERVICE FEE REVENUE
Service fee revenue, net of contractual allowances and discounts	$	58,295		$	55,008		$	55,058
Provision for bad debts		(2,796	)		(2,824	)		(2,832	)
Net service fee revenue		55,499			52,184			52,226
OPERATING EXPENSES
Cost of operations		37,620			34,802			36,767
Depreciation and amortization		4,285			4,139			4,718
Loss on sale and disposal of equipment		55			31			19
Severence		2			–			–
Total operating expenses		41,962			38,972			41,504
INCOME FROM OPERATIONS		13,537			13,212			10,722
Net interest expense		21			34			60
NET INCOME	$	13,516		$	13,178		$	10,662

The accompanying notes are an integral part of these financial statements.

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CERTAIN RADNET, INC. AFFILIATES

COMBINED STATEMENTS OF PARTNERS' CAPITAL

(IN THOUSANDS)

	RadNet, Inc.			Other Partners			Total
BALANCE - January 1, 2014	$	16,833		$	18,179		$	35,012
Net Income		4,949			5,713			10,662
Distributions		(6,443	)		(6,055	)		(12,498	)
BALANCE - December 31, 2014		15,339			17,837			33,176
Net Income (unaudited)		6,133			7,045			13,178
Distributions (unaudited)		(6,349	)		(7,215	)		(13,564	)
BALANCE - December 31, 2015 (unaudited)		15,123			17,667			32,790
Net Income (unaudited)		6,261			7,255			13,516
Distributions (unaudited)		(2,100	)		(2,301	)		(4,401	)
BALANCE - December 31, 2016 (unaudited)	$	19,284		$	22,621		$	41,905

The accompanying notes are an integral part of these financial statements.

6

CERTAIN RADNET, INC. AFFILIATES

COMBINED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

	Years Ended December 31,
	2016			2015			2014
	(unaudited)			(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	13,516		$	13,178		$	10,662
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,285			4,139			4,718
Provision for bad debts		2,796			2,824			2,832
Deferred rent amortization		(268	)		(98	)		(206	)
Loss on sale and disposal of equipment		55			31			19
Changes in operating assets and liabilities
Accounts receivable		(7,609	)		(1,056	)		(1,669	)
Prepaid expenses and other current assets		111			(409	)		537
Due from affiliates		(4,766	)		247			(2,718	)
Accounts payable and accrued expenses		409			(646	)		(459	)
Net cash provided by operating activities		8,529			18,210			13,716
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(3,435	)		(3,958	)		(669	)
Purchase of imaging facilities		(1,010	)		–			–
Proceeds from sale of equipment		545			1			1
Net cash used in investing activities		(3,900	)		(3,957	)		(668	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes and leases payable		(228	)		(692	)		(835	)
Distributions to partners		(4,401	)		(13,564	)		(12,498	)
Net cash used in financing activities		(4,629	)		(14,256	)		(13,333	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		–			(3	)		(285	)
CASH AND CASH EQUIVALENTS, beginning of period		–			3			288
CASH AND CASH EQUIVALENTS, end of period	$	–		$	–		$	3
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	21		$	34		$	60

The accompanying notes are an integral part of these financial statements.

7

CERTAIN RADNET, INC. AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS

(Unaudited as of and for the years ended December 31, 2016 and 2015)

NOTE 1 – DESCRIPTION OF BUSINESS

Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), are joint ventures between RadNet, Inc. and, as applicable, hospitals, health systems or radiology practices operating within the state of Maryland and were formed for the purpose of owning and operating diagnostic imaging centers. Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture. Each joint venture within the Group is an affiliate of RadNet, Inc. as follows:

	% owned by Radnet, Inc.
Franklin Imaging Joint Venture	49%
Carroll County Radiology, LLC	40%
MRI at St. Joseph Medical Center, LLC	49%
Greater Baltimore Diagnostic Imaging Partnership ("GBDIP")	50%

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION – Under Rule 3-09 of Regulation S-X, RadNet, Inc. is permitted to file combined financial statements for individually significant unconsolidated joint ventures which are in the same line of business. The combined financial statements include the assets, liabilities, and operations of each member of the Group. The operating activities of each of these joint ventures are completely separate from one another and are in no way affiliated with one another. Accordingly there are no intercompany transactions and balances to be eliminated when combining each together.

USE OF ESTIMATES - The preparation of these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters including the Group’s reported amounts of assets and liabilities in the combined balance sheets at the dates of the financial statements; disclosure of contingent assets and liabilities at the dates of the financial statements; and reported amounts of revenues and expenses in the combined statements of income during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates.

REVENUES – Combined service fee revenue, net of contractual allowances and discounts, consists of net patient fees received from various payors and patients themselves based mainly upon established contractual billing rates, less allowances for contractual adjustments and discounts. This service fee revenue is earned through providing the use of diagnostic imaging equipment and the provision of technical services as well as providing administrative services such as clerical and administrative personnel, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

The Group's combined service fee revenues are recorded during the period the services are provided based upon the estimated amounts due from patients and third-party payors. Third-party payors include federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies and employers. Estimates of contractual allowances are based on historical collection rates of pre-determined payment rates specified in the related contractual agreements. The Group also records a provision for doubtful accounts (based primarily on historical collection experience) related to patient financial responsibility including copayment and deductible amounts for patients who have health care coverage with third-party payors.

The Group’s service fee revenue, net of contractual allowances and discounts less the provision for bad debts for the years ended December 31, are summarized in the following table (in thousands):

8

	Years Ended December 31,
	2016			2015			2014
	(unaduited)			(unaduited)
Commercial Insurance	$	39,291		$	36,911		$	37,384
Medicare		13,233			12,322			12,003
Medicaid		1,807			1,980			1,872
Workers' Compensation/Personal Injury		2,390			2,805			2,643
Other		1,574			990			1,156
Service fee revenue, net of contractual allowances and discounts		58,295			55,008			55,058
Provision for bad debts		(2,796	)		(2,824	)		(2,832	)
Net service fee revenue	$	55,499		$	52,184		$	52,226

ACCOUNTS RECEIVABLE - Substantially all of the Group’s accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients.  Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from payors and maintains an allowance for bad debts based upon specific payor collection issues that have been identified as well as historical collection experience.

PROVISION FOR BAD DEBTS - Although outcomes vary, the Group’s policy is to attempt to collect amounts due from patients, including co-payments and deductibles due from patients with insurance, at the time of service. The Group provides for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. The Group estimates this allowance based on the aging of accounts receivable by each type of payor over a minimum 18-month look-back period, and other relevant factors. A significant portion of the provision for bad debt relates to co-payments and deductibles owed to the Group by patients with insurance. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on the increased burden of co-payments and deductibles to be made by patients with insurance. These factors continuously change and can have an impact on collection trends and the Group’s estimation process. The combined allowance for bad debts at December 31, 2016 and 2015 was $548,000 (unaudited) and $365,000 (unaudited), respectively.

CONCENTRATION OF CREDIT RISKS - Financial instruments that potentially subject the Group to credit risk are primarily cash equivalents and accounts receivable. Each joint venture places its cash and cash equivalents with a financial institution. At times, the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation, or FDIC. Substantially all accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from its clients and maintains an allowance for bad debts based upon any specific payor collection issues that are identified and historical experience.

CASH AND CASH EQUIVALENTS – The Group considers all highly liquid investments that mature in three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates their fair market value.

PROPERTY AND EQUIPMENT – Property, furniture and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization of property, furniture and equipment are provided using the straight-line method over the estimated useful lives, which range from 3 to 15 years. Leasehold improvements are amortized at the shorter of the related lease term or their estimated useful lives which range from 3 to 30 years.

GOODWILL – Combined goodwill of the Group at December 31, 2016 totaled $10.6 million (unaudited). Goodwill is recorded by each member of the Group as a result of business combinations. Management of each member of the Group evaluates goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable.   Each member of the Group evaluated its respective share of the combined goodwill at October 1, 2016 for signs of impairment under the provisions of ASU 2011-08. By utilizing certain qualitative measures outlined in the guidance, each member determined that its respective share of the combined goodwill was not impaired.

9

INCOME TAXES - Each member of the Group is treated as a partnership for federal and state income tax purposes where all taxable income is allocated to the partners in accordance with the respective partnership agreement and so accordingly federal and state taxes on income are the responsibility of the joint venture partners individually.  Accordingly, no income tax provision is recorded by any joint ventures in the Group.

Open tax years are those that are open for examination by taxing authorities, and include all returns for tax years ending on or after December 31, 2013, for federal returns and December 31, 2013, for Maryland returns. The Group has no examinations in process and has not been notified of any future examinations at this time. Management of each member of the Group has reviewed all open tax years and major jurisdictions, and has not recorded an unrecognized tax benefit relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Group has recognized no interest or penalties related to uncertain tax positions taken or expected to be taken.

FAIR VALUE MEASUREMENTS –The combined balance sheets include the following financial instruments: cash and cash equivalents, receivables, trade accounts payable, capital leases, equipment notes payable and other liabilities. The Group considers the carrying amounts of cash and cash equivalents, receivables, other current assets and current liabilities to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment. Additionally, the Group considers the carrying amount of its equipment notes payable and capital lease obligations to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates.

NOTE 3 – ACQUISITIONS

Franklin Imaging, LLC, acquired a single multi-modality imaging center located in Rosedale, Maryland for cash consideration of $1.0 million and the assumption of capital lease debt of $241,000. The acquisition closed on August 15, 2016. Franklin Imaging, LLC made a fair value determination of the acquired assets and approximately $600,000 of fixed assets, $30,000 of other assets and goodwill of $649,000 was recorded in respect to the transaction.

NOTE 4 – GOODWILL AND OTHER INTANGIBLE ASSETS

Combined goodwill of the Group at December 31, 2016 totaled $10.6 million (unaudited). Goodwill is recorded as a result of business combinations.  

Other intangible assets are related to the value of management service contracts on the books of MRI at St. Joseph Medical Center, LLC of $385,400 and a covenant not to compete contract acquired through a GBDIP acquisition that totaled $608,138 on the day the transaction closed. Accumulated amortization of the management service and covenant not to compete contracts through December 31, 2016 was $156,100 (unaudited) and $608,138 (unaudited), respectively. Total amortization expense for the year ended December 31, 2016 was $121,000 (unaudited). Management service contracts are amortized over 25 years. The value of the covenant not to compete contract was expensed using the straight-line method over five years and is now fully amortized as of December 31, 2016.

The following table (unaudited) shows annual amortization expense, by asset class that will be recorded over the next five years (in thousands):

	2017		2018		2019		2020		2021		Thereafter		Total		Weighted average amortization period remaining in years
Management service contracts	$	16	$	16	$	16	$	16	$	16	$	149	$	229		16.0

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NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment and accumulated depreciation and amortization are as follows (in thousands):

	December 31,
	2016			2015
	(unaudited)			(unaudited)
Medical equipment	$	40,306		$	39,841
Office equipment, furniture and fixtures		3,241			3,280
Leasehold improvements		16,257			14,440
Equipment under capital leases		221			–
		60,025			57,561
Accumulated depreciation and amortization		(47,008	)		(43,809	)
	$	13,017		$	13,752

Depreciation and amortization expense on property and equipment, including amortization of equipment under capital leases, for the years ended December 31, 2016, 2015 and 2014 totaled $4.2 million (unaudited), $4.0 million (unaudited) and $4.7 million, respectively.

NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses are as follows (in thousands):

	December 31,
	2016		2015
	(unaudited)		(unaudited)
Accounts payable	$	1	$	1
Accrued expenses		484		628
Accrued payroll and vacation		761		208
Total	$	1,246	$	837

NOTE 7 – EQUIPMENT NOTES PAYABLE AND CAPITAL LEASES

One member of the Group, Greater Baltimore Diagnostic Imaging Partnership is the maker of a promissory note for the purpose of acquiring imaging equipment. The note has an interest rate of 3.5% matures on October 1, 2018 and is collateralized by the acquired equipment. At December 31, 2016, there remains a balance of $357,000 (unaudited), payable as follows: $201,000 (unaudited) in 2017 and $156,000 (unaudited) in 2018.

As stated in Note 3 above, on August 8, Franklin Imaging LLC assumed capital lease debt as part of its acquisition of a facility in Rosedale, MD. Future minimum lease payments under the capital lease for years ending December 31 (in thousands) are as follows:

	(unaudited)
2017	$	74
2018		74
2019		74
2020		20
2021		–
Thereafter		–
Total minimum payments		242
Amount representing interest		(21	)
Present value of net minimum lease payments		221
Less current portion		(64	)
Long-term portion lease obligations	$	157

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NOTE 8 – COMMITMENTS AND CONTINGENCIES

Leases – The Group leases various imaging facilities with renewal options expiring through 2029. Certain leases contain renewal options from two to ten years and escalation clauses based either on the consumer price index or fixed rent escalators. Leases with fixed rent escalators are recorded on a straight-line basis. The Group records deferred rent for tenant leasehold improvement allowances received from a lessor and amortizes the deferred rent expense over the term of the lease agreement. In addition to facility leases, the Group has entered into operating leases for radiology and office equipment. Minimum annual payments under operating leases for future years ending December 31 (in thousands) are as follows:

	Facilities		Equipment		Total
	(unaudited)		(unaudited)		(unaudited)
2017	$	1,917	$	404	$	2,321
2018		1,475		400		1,875
2019		1,081		385		1,465
2020		593		367		960
2021		248		90		339
Thereafter		351		–		351
	$	5,665	$	1,646	$	7,311

Total rent expense, including equipment rentals, for the years ended December 31, 2016, 2015 and 2014 was $3.1 million (unaudited), $2.7 million (unaudited) and $3.5 million, respectively.

NOTE 9 – RELATED PARTY TRANSACTIONS

RadNet, Inc. contracts with each joint venture within the Group to provide certain administrative services including assistance with accounting, payroll and employee benefits processing, and billing and collection functions on behalf of these joint ventures. RadNet Inc. remits to the joint ventures all amounts collected through its administration of the billing and collection functions.

RadNet, Inc., as administrator over payroll and employee benefits, pays salary and benefit obligations on behalf of these joint ventures and then bills each joint venture for its respective portion.

RadNet, Inc. contracts with certain members of its contracted radiologist groups to perform professional services for the joint ventures. RadNet, Inc. assures that these radiologists are adequately covered under medical malpractice insurance policies. RadNet, Inc., on behalf of its contracted radiologist groups, bills each joint venture for its respective share of the professional fees incurred through its utilization of these contracted radiologists. RadNet, Inc. remits to its contracted radiologist groups all amounts collected from the joint ventures for the billed professional fees.

Amounts receivable from and payable to RadNet Inc. for the activities listed above are summarized in due from affiliates on the Group’s combined balance sheets and were $10.0 million (unaudited) and $5.3 million (unaudited) at December 31, 2016 and 2015, respectively. 

NOTE 10 – SUBSEQUENT EVENTS

The members of the Group evaluated subsequent events through March 31, 2017 and concluded that no additional disclosures were required.

12

Exhibit Index

The following exhibits are filed, or incorporated by reference into this Annual Report on Form 10-K/A (Amendment No. 1):

Exhibit No.	Description of Exhibit
2.1	Asset Purchase Agreement dated October 1, 2015 by and among Mid Rockland Imaging Partners, Inc., a Delaware corporation and a subsidiary of the registrant, Diagnostic Imaging Group LLC, a Delaware limited liability company, Diagnostic Imaging Group Holdings, LLC,, a Delaware limited liability company, New Primecare LLC, a Delaware limited liability company, and Flushing Medical Arts Building, Inc. (incorporated by reference to exhibit filed with Form 8-K on October 20, 2015).
3.1	Certificate of Incorporation of RadNet, Inc., a Delaware corporation (incorporated by reference to exhibit filed with Form 8-K on September 4, 2008).
3.2	Certificate of Amendment to Certificate of Incorporation of RadNet, Inc., a Delaware corporation, dated September 2, 2008 (incorporated by reference to exhibit filed with Form 8-K on September 4, 2008).
3.3	Bylaws of RadNet, Inc., a Delaware corporation (incorporated by reference to exhibit filed with Form 8-K on September 4, 2008).
10.1	Credit and Guaranty Agreement, dated October 10, 2012, by and among Radnet Management, Inc., RadNet, Inc., the guarantors thereunder, General Electric Capital Corporation, Deutsche Bank Securities, Inc., RBC Capital Markets and Barclays Bank PLC (incorporated by reference to exhibit filed with Form 8-K on October 12, 2012).
10.2	Pledge and Security Agreement, dated October 10, 2012, by and among Radnet Management, Inc., RadNet, Inc., the guarantors thereunder, and Barclays Bank PLC (incorporated by reference to exhibit filed with Form 8-K on October 12, 2012).
10.3	Form of Trademark Security Agreement by and among the guarantors thereunder and Barclays Bank PLC (filed as an exhibit to the Pledge and Security Agreement, dated October 10, 2012, by among the guarantors thereunder and Barclays Bank PLC, included as Exhibit 10.2).
10.4	First Amendment Agreement dated April 3, 2013 to the Credit and Guaranty Agreement dated October 10, 2012, by and among RadNet Management, Inc., RadNet, Inc., certain subsidiaries and affiliates of RadNet Management, Inc., certain lenders identified therein and Barclays Bank PLC, as administrative agent and collateral agent. (incorporated by reference to Exhibit 99.1 filed with Form 8-K on April 4, 2013).
10.5	Second Amendment Agreement dated March 25, 2014 to the Credit and Guaranty Agreement, dated as of October 10, 2012 (as amended, by the First Amendment Agreement, dated as of April 3, 2013), by and among RadNet, Inc., Radnet Management, Inc., certain subsidiaries and affiliates of Radnet Management, Inc., certain lenders identified therein, and Barclays Bank PLC, as administrative agent and collateral agent. (incorporated by reference to Exhibit 99.1 filed with Form 8-K on March 31, 2014).
10.6	Second Lien Credit and Guaranty Agreement, dated as of March 25, 2014, by and among Radnet Management, Inc., RadNet, Inc., certain subsidiaries and affiliates of Radnet Management, Inc., the lenders party thereto from time to time, certain other financial institutions and Barclays Bank PLC, as administrative agent and collateral agent. (incorporated by reference to Exhibit 99.2 filed with Form 8-K on March 31, 2014).
10.7	Second Lien Pledge and Security Agreement, dated as of March 25, 2014, by and among Radnet Management, Inc., the Grantors identified therein, and Barclays Bank PLC, as collateral agent. (incorporated by reference to Exhibit 99.3 filed with Form 8-K on March 31, 2014).
10.8	Joinder Agreement, dated as of April 30, 2015, among Barclays Bank Plc, Radnet Management, Inc., a California corporation, Radnet Inc., a Delaware corporation, and certain affiliates and subsidiaries of Radnet Management Inc. (incorporated by reference to exhibit filed with Form 8-K on May 1, 2015).

13

10.9	Amendment No. 3 to Credit and Guaranty Agreement, dated as of July 1, 2016 by and among Radnet Management, Inc., Radnet, Inc. certain subsidiaries and affiliates of Radnet Management, Inc., the lenders party thereto from time to time, certain other financial institutions and Barclays Bank PLC, as administrative agent and collateral agent. (incorporated by reference to filed with Form 8-K/A on December 2, 2016).
10.10	Amendment No. 4 to Credit and Guaranty Agreement, dated as of February 2, 2017 by and among Radnet Management, Inc., Radnet, Inc. certain subsidiaries and affiliates of Radnet Management, Inc., the lenders party thereto from time to time, certain other financial institutions and Barclays Bank PLC, as administrative agent and collateral agent. (incorporated by reference to filed with Form 8-K on February 2, 2017).
10.11	RadNet, Inc. 2006 Equity Incentive Plan (Amended and Restated as of April 20, 2015) (incorporated by reference to exhibit filed with Proxy Statement on April 30, 2015).*
10.12	Form of Stock Option Agreement for the 2006 Equity Incentive Plan (incorporated by reference to exhibit filed with Form S-8 registration statement on August 12, 2015).*
10.13	Form of Restricted Stock Award for the 2006 Equity Incentive Plan (incorporated by reference to exhibit filed with Form 10-Q for the quarter ended March 31, 2012).*
10.14	Form of Indemnification Agreement between the registrant and each of its officers and directors (incorporated by reference to exhibit filed with Form 10-Q for the quarter ended March 31, 2008).*

10.15	Employment Agreement dated as of June 12, 1992 with Howard G. Berger, M.D. (incorporated by reference to exhibit filed with an amendment to Form 8-K report for June 12, 1992).*
10.16	Amendment to Employment Agreement dated January 30, 2004 with Howard G. Berger, M.D. (incorporated by reference to exhibit filed with Form 10-Q for the quarter ended January 31, 2004).*
10.17	Second Amendment to Employment Agreement dated November 16, 2015 with Howard G. Berger, M.D. (incorporated by reference to exhibit filed with Form 10-K on March 15, 2016).
10.18	Employment Agreement dated as of April 16, 2001 with Jeffrey L. Linden (incorporated by reference to exhibit filed with Form 10-K for the year ended October 31, 2001).*
10.19	Amendment to Employment Agreement dated January 30, 2004 with Jeffrey L. Linden (incorporated by reference to exhibit filed with Form 10-Q for the quarter ended January 31, 2004).*
10.20	Second Amendment to Employment Agreement dated November 16, 2015 with Jeffrey L. Linden. (incorporated by reference to exhibit filed with Form 10-K on March 15, 2016).
10.21	Employment Agreement dated as of May 1, 2001 with Norman R. Hames (incorporated by reference to exhibit filed with Form 10-K for the year ended October 31, 2001).*
10.22	Amendment to Employment Agreement dated January 30, 2004 with Norman R. Hames (incorporated by reference to exhibit filed with Form 10-Q for the quarter ended January 31, 2004).*
10.23	Second Amendment to Employment Agreement dated November 16, 2015 with Norman R. Hames. (incorporated by reference to exhibit filed with Form 10-K on March 15, 2016).
10.24	Employment Agreement with Mark Stolper effective January 1, 2009 (incorporated by reference to exhibit filed with Form 10-K for the year ended December 31, 2009).*
10.25	First Amendment to Employment Agreement dated November 16, 2015 with Mark Stolper. (incorporated by reference to exhibit filed with Form 10-K on March 15, 2016).*
10.26	Retention Agreement with Stephen Forthuber dated November 15, 2006 (incorporated by reference to exhibit filed with Form 10-K/T for the year ended December 31, 2006).*
10.27	First Amendment to Retention Agreement dated November 16, 2015 with Stephen Forthuber. (incorporated by reference to exhibit filed with Form 10-K on March 15, 2016).*

14

10.28	Amended and Restated Management and Service Agreement between Radnet Management, Inc. and Beverly Radiology Medical Group III dated January 1, 2004 (incorporated by reference to exhibit filed with Form 10-K for the year ended October 31, 2003).
12.1	Computation of Ratios of Earnings to Fixed Charges (incorporated by reference to exhibit filed with the Original Filing).
21.1	List of Subsidiaries (incorporated by reference to exhibit filed with the Original Filing).
23.2	Consent of Independent Registered Public Accounting Firm.
24.1	Power of Attorney (included on signature page to the Original Filing).
31.1	CEO Certification pursuant to Section 302.
31.2	CFO Certification pursuant to Section 302.
32.1	CEO Certification pursuant to Section 906.
32.2	CFO Certification pursuant to Section 906.
101.INS	XBRL Instance Document
101.SCH	XBRL Schema Document
101.CAL	XBRL Calculation Linkbase Document
101.LAB	XBRL Label Linkbase Document
101.PRE	XBRL Presentation Linkbase Document
101.DEF	XBRL Definition Linkbase Document

* Indicates management contract or compensatory plan.

15

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RADNET, INC.
Date:  March 31, 2017		/ s/    HOWARD G . BERGER, M.D.
		Howard G. Berger, M.D., President,
		Chief Executive Officer and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of registrant in the capacities and on the dates indicated.

By	/ s/   HOWARD  G . BERGER, M.D.	Date:  March 31, 2017
Howard G. Berger, M.D., Director, Chief Executive Officer and President
By	/s/ MARVIN S. CADWELL *	Date:  March 31, 2017
Marvin S. Cadwell, Director
By	/s/ JOHN V. CRUES, III, M.D. *	Date:  March 31, 2017
John V. Crues, III, M.D., Director
By	/s/ NORMAN R. HAMES *	Date:  March 31, 2017
Norman R. Hames, Director
By	/s/ DAVID L. SWARTZ *	Date:  March 31, 2017
David L. Swartz, Director

By	/s/ LAWRENCE L. LEVITT *	Date:  March 31, 2017
Lawrence L. Levitt, Director
By	/s/ MICHAEL L. SHERMAN, M.D. *	Date:  March 31, 2017
Michael L. Sherman, M.D., Director
By	/s/ MARK D. STOLPER	Date:  March 31, 2017
Mark D. Stolper, Chief Financial Officer (Principal Accounting Officer)

* By Mark D. Stolper, as attorney- in-fact

16

EX-23.2

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

(1) Registration Statement (Form S-3 No. 333-201310) of RadNet, Inc.,

(2) Registration Statements (Form S-8 Nos. 333-176324, 333-160100, and 333-206311) pertaining to the 2006 Equity Incentive Plan, and

(3) Registration Statements (Form S-8 Nos. 333-61876, 333-143652, 333-153228) pertaining to the 2006 Equity Incentive Plan, 2000 Long-Term Incentive Plan and certain warrants;

of our report dated March 31, 2015 with respect to the combined financial statements of certain RadNet, Inc. affiliates including Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC and Greater Baltimore Diagnostic Imaging Partnership, included in this Annual Report (Form 10-K/A) for the year ended December 31, 2016.

                                                   /s/Ernst & Young LLP

Los Angeles, California

March 31, 2017

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Howard G. Berger, M.D., certify that:

1. I have reviewed this report on Form 10-K/A (Amendment No. 1) to the Annual Report of RadNet, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 31, 2017

/s/ Howard G. Berger, M.D.

Howard G. Berger, M.D.

President, Chief Executive Officer and
Chairman of the Board of Directors

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark D. Stolper, certify that:

1. I have reviewed this report on Form 10-K/A (Amendment No. 1) to the Annual Report of RadNet, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 31, 2017

/s/ Mark D. Stolper

Mark D. Stolper

Executive Vice President

And Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of RadNet, Inc. (the “Company”) on Form 10-K/A (Amendment No. 1) for the twelve month period ended December 31, 2016, as filed with the Securities and Exchange Commission on March 31, 2017 (the “Report”), I, Howard G. Berger, M.D., Chairman and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the periods presented in the Report.

/s/ Howard G. Berger, M.D.

Howard G. Berger, M.D.

Chairman, President and Chief Executive Officer

(Principal Executive Officer)

March 31, 2017

A signed original of this written statement required by Section 906 has been provided to the Company and will be furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of RadNet, Inc. (the “Company”) on Form 10-K/A (Amendment No. 1) for the twelve month period ended December 31, 2016, as filed with the Securities and Exchange Commission on March 31, 2017 (the “Report”), I, Mark D. Stolper, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the periods presented in the Report.

/s/ Mark D. Stolper

Mark D. Stolper

Chief Financial Officer

(Principal Financial Officer)

March 31, 2017

A signed original of this written statement required by Section 906 has been provided to the Company and will be furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - USD ($)

12 Months Ended

Dec. 31, 2016

Mar. 09, 2017

Jun. 30, 2016

Document And Entity Information

Entity Registrant Name

RadNet, Inc.

Entity Central Index Key

0000790526

Document Type

10-K/A

Document Period End Date

Dec. 31, 2016

Amendment Flag

true

Amendment Description

We are filing this Form 10-K/A (Amendment No. 1) to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, originally filed with the U.S. Securities and Exchange Commission on March 16, 2017 (the "Original Filing"), solely for the purpose of including the financial statements of certain unconsolidated joint ventures in accordance with Rule 3-09 of Regulation S-X.  Rule 3-09 requires that we file financial statements of unconsolidated joint ventures to the extent that the unconsolidated joint ventures are individually significant.  Such statements are required to be audited only for the years in which such unconsolidated joint ventures met applicable significance tests. Under Rule 3-09 of Regulation S-X, we are permitted to file the financial statements for these unconsolidated joint ventures within 90 days of the end of our fiscal year.

We determined that as of and for the year ended December 31, 2014, four of our unconsolidated joint venture interests, including Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), were significant unconsolidated joint ventures under Rule 3-09, and the accompanying financial statements for that period are audited. The Group did not meet the applicable significance test for the years ended December 31, 2016 or 2015; therefore, the Group’s accompanying financial statements are required to be included for those years, but are not required to be audited. We are permitted to file combined financial statements for individually significant joint ventures which are in the same line of business.

In our Original Filing, we inadvertently indicated by check mark that no disclosure is being made pursuant to Item 405 of Regulation S-K. We have determined that there was a delinquent filer, which we will disclose in the definitive proxy statement and therefore, we have not checked the box in this Form 10-K/A.

Except as described above, this Form 10-K/A does not amend or change any other items or disclosures in the Original Filing.  The disclosure in this Form 10-K/A has not been updated to reflect events occurring after the Original Filing.  Accordingly, this Amendment should be read in conjunction with the Original Filing and our other filings with the SEC subsequent to the Original Filing.

Current Fiscal Year End Date

--12-31

Is Entity a Well-known Seasoned Issuer?

No

Is Entity a Voluntary Filer?

No

Is Entity's Reporting Status Current?

Yes

Entity Filer Category

Accelerated Filer

Entity Public Float

$ 224,518,331

Entity Common Stock, Shares Outstanding

47,198,596

Document Fiscal Period Focus

FY

Document Fiscal Year Focus

2016

XML

COMBINED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
CURRENT ASSETS
Accounts receivable, net	$ 10,484	$ 5,671
Due from affiliates	10,022	5,260
Prepaid expenses and other current assets	435	538
Total current assets	20,941	11,469
PROPERTY AND EQUIPMENT, NET	13,017	13,752
OTHER ASSETS
Goodwill	10,572	9,923
Other intangible assets	229	350
Other assets	4	0
Total assets	44,763	35,494
CURRENT LIABILITIES
Accounts payable and accrued expenses	1,246	837
Current portion of deferred rent	282	274
Current portion of equipment notes payable	201	208
Current portion of obligations under capital leases	64	0
Total current liabilities	1,793	1,319
LONG-TERM LIABILITIES
Deferred rent, net of current portion	752	1,028
Equipment notes payable, net of current portion	156	357
Obligations under capital leases, net of current portion	157	0
Total liabilities	2,858	2,704
PARTNERS' CAPITAL
RadNet, Inc.	19,284	15,123
Other partners	22,621	17,667
Total partners' capital	41,905	32,790
Total liabilities and partners' capital	$ 44,763	$ 35,494

XML

COMBINED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
NET SERVICE FEE REVENUE
Service fee revenue, net of contractual allowances and discounts	$ 58,295	$ 55,008	$ 55,058
Provision for bad debts	(2,796)	(2,824)	(2,832)
Net service fee revenue	55,499	52,184	52,226
OPERATING EXPENSES
Cost of operations	37,620	34,802	36,767
Depreciation and amortization	4,285	4,139	4,718
Loss on sale and disposal of equipment	55	31	19
Severance	2	0	0
Total operating expenses	41,962	38,972	41,504
INCOME FROM OPERATIONS	13,537	13,212	10,722
Net interest expense	21	34	60
NET INCOME	$ 13,516	$ 13,178	$ 10,662

XML

COMBINED STATEMENTS OF PARTNERS' CAPITAL - USD ($) $ in Thousands	Radnet, Inc.	Other Partners	Total
Partners capital, beginning balance at Dec. 31, 2013	$ 16,833	$ 18,179	$ 35,012
Net income (unaudited)	4,949	5,713	10,662
Distributions (unaudited)	(6,443)	(6,055)	(12,498)
Partners capital, ending balance at Dec. 31, 2014	15,339	17,837	33,176
Net income (unaudited)	6,133	7,045	13,178
Distributions (unaudited)	(6,349)	(7,215)	(13,564)
Partners capital, ending balance at Dec. 31, 2015	15,123	17,667	32,790
Net income (unaudited)	6,261	7,255	13,516
Distributions (unaudited)	(2,100)	(2,301)	(4,401)
Partners capital, ending balance at Dec. 31, 2016	$ 19,284	$ 22,621	$ 41,905

XML

COMBINED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 13,516	$ 13,178	$ 10,662
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,285	4,139	4,718
Provision for bad debts	2,796	2,824	2,832
Deferred rent amortization	(268)	(98)	(206)
Loss on sale and disposal of equipment	55	31	19
Changes in operating assets and liabilities
Accounts receivable	(7,609)	(1,056)	(1,669)
Prepaid expenses and other current assets	111	(409)	537
Due from affiliates	(4,766)	247	(2,718)
Accounts payable and accrued expenses	409	(646)	(459)
Net cash provided by operating activities	8,529	18,210	13,716
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(3,435)	(3,958)	(669)
Purchase of imaging facilities	(1,010)	0	0
Proceeds from sale of equipment	545	1	1
Net cash used in investing activities	(3,900)	(3,957)	(668)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes and leases payable	(228)	(692)	(835)
Distributions to partners	(4,401)	(13,564)	(12,498)
Net cash used in financing activities	(4,629)	(14,256)	(13,333)
NET DECREASE IN CASH AND CASH EQUIVALENTS	0	(3)	(285)
CASH AND CASH EQUIVALENTS, beginning of period	0	3	288
CASH AND CASH EQUIVALENTS, end of period	0	0	3
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	$ 21	$ 34	$ 60

XML

1. DESCRIPTION OF BUSINESS

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS

Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), are joint ventures between RadNet, Inc. and, as applicable, hospitals, health systems or radiology practices operating within the state of Maryland and were formed for the purpose of owning and operating diagnostic imaging centers. Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture. Each joint venture within the Group is an affiliate of RadNet, Inc. as follows:

	% owned by Radnet, Inc.
Franklin Imaging Joint Venture	49%
Carroll County Radiology, LLC	40%
MRI at St. Joseph Medical Center, LLC	49%
Greater Baltimore Diagnostic Imaging Partnership ("GBDIP")	50%

XML

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION – Under Rule 3-09 of Regulation S-X, RadNet, Inc. is permitted to file combined financial statements for individually significant unconsolidated joint ventures which are in the same line of business. The combined financial statements include the assets, liabilities, and operations of each member of the Group. The operating activities of each of these joint ventures are completely separate from one another and are in no way affiliated with one another. Accordingly there are no intercompany transactions and balances to be eliminated when combining each together.

USE OF ESTIMATES - The preparation of these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters including the Group’s reported amounts of assets and liabilities in the combined balance sheets at the dates of the financial statements; disclosure of contingent assets and liabilities at the dates of the financial statements; and reported amounts of revenues and expenses in the combined statements of income during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates.

REVENUES – Combined service fee revenue, net of contractual allowances and discounts, consists of net patient fees received from various payors and patients themselves based mainly upon established contractual billing rates, less allowances for contractual adjustments and discounts. This service fee revenue is earned through providing the use of diagnostic imaging equipment and the provision of technical services as well as providing administrative services such as clerical and administrative personnel, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

The Group's combined service fee revenues are recorded during the period the services are provided based upon the estimated amounts due from patients and third-party payors. Third-party payors include federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies and employers. Estimates of contractual allowances are based on historical collection rates of pre-determined payment rates specified in the related contractual agreements. The Group also records a provision for doubtful accounts (based primarily on historical collection experience) related to patient financial responsibility including copayment and deductible amounts for patients who have health care coverage with third-party payors.

The Group’s service fee revenue, net of contractual allowances and discounts less the provision for bad debts for the years ended December 31, are summarized in the following table (in thousands):

	Years Ended December 31,
	2016			2015			2014
	(unaduited)			(unaduited)
Commercial Insurance	$	39,291		$	36,911		$	37,384
Medicare		13,233			12,322			12,003
Medicaid		1,807			1,980			1,872
Workers' Compensation/Personal Injury		2,390			2,805			2,643
Other		1,574			990			1,156
Service fee revenue, net of contractual allowances and discounts		58,295			55,008			55,058
Provision for bad debts		(2,796	)		(2,824	)		(2,832	)
Net service fee revenue	$	55,499		$	52,184		$	52,226

ACCOUNTS RECEIVABLE - Substantially all of the Group’s accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients.  Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from payors and maintains an allowance for bad debts based upon specific payor collection issues that have been identified as well as historical collection experience.

PROVISION FOR BAD DEBTS - Although outcomes vary, the Group’s policy is to attempt to collect amounts due from patients, including co-payments and deductibles due from patients with insurance, at the time of service. The Group provides for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. The Group estimates this allowance based on the aging of accounts receivable by each type of payor over a minimum 18-month look-back period, and other relevant factors. A significant portion of the provision for bad debt relates to co-payments and deductibles owed to the Group by patients with insurance. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on the increased burden of co-payments and deductibles to be made by patients with insurance. These factors continuously change and can have an impact on collection trends and the Group’s estimation process. The combined allowance for bad debts at December 31, 2016 and 2015 was $548,000 (unaudited) and $365,000 (unaudited), respectively.

CONCENTRATION OF CREDIT RISKS - Financial instruments that potentially subject the Group to credit risk are primarily cash equivalents and accounts receivable. Each joint venture places its cash and cash equivalents with a financial institution. At times, the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation, or FDIC. Substantially all accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from its clients and maintains an allowance for bad debts based upon any specific payor collection issues that are identified and historical experience.

CASH AND CASH EQUIVALENTS – The Group considers all highly liquid investments that mature in three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates their fair market value.

PROPERTY AND EQUIPMENT – Property, furniture and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization of property, furniture and equipment are provided using the straight-line method over the estimated useful lives, which range from 3 to 15 years. Leasehold improvements are amortized at the shorter of the related lease term or their estimated useful lives which range from 3 to 30 years.

GOODWILL – Combined goodwill of the Group at December 31, 2016 totaled $10.6 million (unaudited). Goodwill is recorded by each member of the Group as a result of business combinations. Management of each member of the Group evaluates goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable.   Each member of the Group evaluated its respective share of the combined goodwill at October 1, 2016 for signs of impairment under the provisions of ASU 2011-08. By utilizing certain qualitative measures outlined in the guidance, each member determined that its respective share of the combined goodwill was not impaired.

INCOME TAXES - Each member of the Group is treated as a partnership for federal and state income tax purposes where all taxable income is allocated to the partners in accordance with the respective partnership agreement and so accordingly federal and state taxes on income are the responsibility of the joint venture partners individually.  Accordingly, no income tax provision is recorded by any joint ventures in the Group.

Open tax years are those that are open for examination by taxing authorities, and include all returns for tax years ending on or after December 31, 2013, for federal returns and December 31, 2013, for Maryland returns. The Group has no examinations in process and has not been notified of any future examinations at this time. Management of each member of the Group has reviewed all open tax years and major jurisdictions, and has not recorded an unrecognized tax benefit relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Group has recognized no interest or penalties related to uncertain tax positions taken or expected to be taken.

FAIR VALUE MEASUREMENTS –The combined balance sheets include the following financial instruments: cash and cash equivalents, receivables, trade accounts payable, capital leases, equipment notes payable and other liabilities. The Group considers the carrying amounts of cash and cash equivalents, receivables, other current assets and current liabilities to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment. Additionally, the Group considers the carrying amount of its equipment notes payable and capital lease obligations to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates.

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3. ACQUISITIONS

12 Months Ended

Dec. 31, 2016

Business Combinations [Abstract]

ACQUISITIONS

Franklin Imaging, LLC, acquired a single multi-modality imaging center located in Rosedale, Maryland for cash consideration of $1.0 million and the assumption of capital lease debt of $241,000. The acquisition closed on August 15, 2016. Franklin Imaging, LLC made a fair value determination of the acquired assets and approximately $600,000 of fixed assets, $30,000 of other assets and goodwill of $649,000 was recorded in respect to the transaction.

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4. GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

Combined goodwill of the Group at December 31, 2016 totaled $10.6 million (unaudited). Goodwill is recorded as a result of business combinations.  

Other intangible assets are related to the value of management service contracts on the books of MRI at St. Joseph Medical Center, LLC of $385,400 and a covenant not to compete contract acquired through a GBDIP acquisition that totaled $608,138 on the day the transaction closed. Accumulated amortization of the management service and covenant not to compete contracts through December 31, 2016 was $156,100 (unaudited) and $608,138 (unaudited), respectively. Total amortization expense for the year ended December 31, 2016 was $121,000 (unaudited). Management service contracts are amortized over 25 years. The value of the covenant not to compete contract was expensed using the straight-line method over five years and is now fully amortized as of December 31, 2016.

The following table (unaudited) shows annual amortization expense, by asset class that will be recorded over the next five years (in thousands):

	2017		2018		2019		2020		2021		Thereafter		Total		Weighted average amortization period remaining in years
Management service contracts	$	16	$	16	$	16	$	16	$	16	$	149	$	229		16.0

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5. PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment and accumulated depreciation and amortization are as follows (in thousands):

	December 31,
	2016			2015
	(unaudited)			(unaudited)
Medical equipment	$	40,306		$	39,841
Office equipment, furniture and fixtures		3,241			3,280
Leasehold improvements		16,257			14,440
Equipment under capital leases		221			–
		60,025			57,561
Accumulated depreciation and amortization		(47,008	)		(43,809	)
	$	13,017		$	13,752

Depreciation and amortization expense on property and equipment, including amortization of equipment under capital leases, for the years ended December 31, 2016, 2015 and 2014 totaled $4.2 million (unaudited), $4.0 million (unaudited) and $4.7 million, respectively.

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6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2016

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses are as follows (in thousands):

	December 31,
	2016		2015
	(unaudited)		(unaudited)
Accounts payable	$	1	$	1
Accrued expenses		484		628
Accrued payroll and vacation		761		208
Total	$	1,246	$	837

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7. EQUIPMENT NOTES PAYABLE AND CAPITAL LEASES

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

EQUIPMENT NOTES PAYABLE AND CAPITAL LEASES

One member of the Group, Greater Baltimore Diagnostic Imaging Partnership is the maker of a promissory note for the purpose of acquiring imaging equipment. The note has an interest rate of 3.5% matures on October 1, 2018 and is collateralized by the acquired equipment. At December 31, 2016, there remains a balance of $357,000 (unaudited), payable as follows: $201,000 (unaudited) in 2017 and $156,000 (unaudited) in 2018.

As stated in Note 3 above, on August 8, Franklin Imaging LLC assumed capital lease debt as part of its acquisition of a facility in Rosedale, MD. Future minimum lease payments under the capital lease for years ending December 31 (in thousands) are as follows:

	(unaudited)
2017	$	74
2018		74
2019		74
2020		20
2021		–
Thereafter		–
Total minimum payments		242
Amount representing interest		(21	)
Present value of net minimum lease payments		221
Less current portion		(64	)
Long-term portion lease obligations	$	157

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8. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Leases – The Group leases various imaging facilities with renewal options expiring through 2029. Certain leases contain renewal options from two to ten years and escalation clauses based either on the consumer price index or fixed rent escalators. Leases with fixed rent escalators are recorded on a straight-line basis. The Group records deferred rent for tenant leasehold improvement allowances received from a lessor and amortizes the deferred rent expense over the term of the lease agreement. In addition to facility leases, the Group has entered into operating leases for radiology and office equipment. Minimum annual payments under operating leases for future years ending December 31 (in thousands) are as follows:

	Facilities		Equipment		Total
	(unaudited)		(unaudited)		(unaudited)
2017	$	1,917	$	404	$	2,321
2018		1,475		400		1,875
2019		1,081		385		1,465
2020		593		367		960
2021		248		90		339
Thereafter		351		–		351
	$	5,665	$	1,646	$	7,311

Total rent expense, including equipment rentals, for the years ended December 31, 2016, 2015 and 2014 was $3.1 million (unaudited), $2.7 million (unaudited) and $3.5 million, respectively.

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9. RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RadNet, Inc. contracts with each joint venture within the Group to provide certain administrative services including assistance with accounting, payroll and employee benefits processing, and billing and collection functions on behalf of these joint ventures. RadNet Inc. remits to the joint ventures all amounts collected through its administration of the billing and collection functions.

RadNet, Inc., as administrator over payroll and employee benefits, pays salary and benefit obligations on behalf of these joint ventures and then bills each joint venture for its respective portion.

RadNet, Inc. contracts with certain members of its contracted radiologist groups to perform professional services for the joint ventures. RadNet, Inc. assures that these radiologists are adequately covered under medical malpractice insurance policies. RadNet, Inc., on behalf of its contracted radiologist groups, bills each joint venture for its respective share of the professional fees incurred through its utilization of these contracted radiologists. RadNet, Inc. remits to its contracted radiologist groups all amounts collected from the joint ventures for the billed professional fees.

Amounts receivable from and payable to RadNet Inc. for the activities listed above are summarized in due from affiliates on the Group’s combined balance sheets and were $10.0 million (unaudited) and $5.3 million (unaudited) at December 31, 2016 and 2015, respectively.

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10. SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

The members of the Group evaluated subsequent events through March 31, 2017 and concluded that no additional disclosures were required.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2016

Summary Of Significant Accounting Policies Policies

PRINCIPLES OF COMBINATION

PRINCIPLES OF COMBINATION – Under Rule 3-09 of Regulation S-X, RadNet, Inc. is permitted to file combined financial statements for individually significant unconsolidated joint ventures which are in the same line of business. The combined financial statements include the assets, liabilities, and operations of each member of the Group. The operating activities of each of these joint ventures are completely separate from one another and are in no way affiliated with one another. Accordingly there are no intercompany transactions and balances to be eliminated when combining each together.

USE OF ESTIMATES

USE OF ESTIMATES - The preparation of these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters including the Group’s reported amounts of assets and liabilities in the combined balance sheets at the dates of the financial statements; disclosure of contingent assets and liabilities at the dates of the financial statements; and reported amounts of revenues and expenses in the combined statements of income during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates.

REVENUES

REVENUES – Combined service fee revenue, net of contractual allowances and discounts, consists of net patient fees received from various payors and patients themselves based mainly upon established contractual billing rates, less allowances for contractual adjustments and discounts. This service fee revenue is earned through providing the use of diagnostic imaging equipment and the provision of technical services as well as providing administrative services such as clerical and administrative personnel, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.

The Group's combined service fee revenues are recorded during the period the services are provided based upon the estimated amounts due from patients and third-party payors. Third-party payors include federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies and employers. Estimates of contractual allowances are based on historical collection rates of pre-determined payment rates specified in the related contractual agreements. The Group also records a provision for doubtful accounts (based primarily on historical collection experience) related to patient financial responsibility including copayment and deductible amounts for patients who have health care coverage with third-party payors.

The Group’s service fee revenue, net of contractual allowances and discounts less the provision for bad debts for the years ended December 31, are summarized in the following table (in thousands):

	Years Ended December 31,
	2016			2015			2014
	(unaduited)			(unaduited)
Commercial Insurance	$	39,291		$	36,911		$	37,384
Medicare		13,233			12,322			12,003
Medicaid		1,807			1,980			1,872
Workers' Compensation/Personal Injury		2,390			2,805			2,643
Other		1,574			990			1,156
Service fee revenue, net of contractual allowances and discounts		58,295			55,008			55,058
Provision for bad debts		(2,796	)		(2,824	)		(2,832	)
Net service fee revenue	$	55,499		$	52,184		$	52,226

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE - Substantially all of the Group’s accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients.  Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from payors and maintains an allowance for bad debts based upon specific payor collection issues that have been identified as well as historical collection experience.

PROVISION FOR BAD DEBTS

PROVISION FOR BAD DEBTS - Although outcomes vary, the Group’s policy is to attempt to collect amounts due from patients, including co-payments and deductibles due from patients with insurance, at the time of service. The Group provides for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. The Group estimates this allowance based on the aging of accounts receivable by each type of payor over a minimum 18-month look-back period, and other relevant factors. A significant portion of the provision for bad debt relates to co-payments and deductibles owed to the Group by patients with insurance. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on the increased burden of co-payments and deductibles to be made by patients with insurance. These factors continuously change and can have an impact on collection trends and the Group’s estimation process. The combined allowance for bad debts at December 31, 2016 and 2015 was $548,000 (unaudited) and $365,000 (unaudited), respectively.

CONCENTRATION OF CREDIT RISKS

CONCENTRATION OF CREDIT RISKS - Financial instruments that potentially subject the Group to credit risk are primarily cash equivalents and accounts receivable. Each joint venture places its cash and cash equivalents with a financial institution. At times, the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation, or FDIC. Substantially all accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from its clients and maintains an allowance for bad debts based upon any specific payor collection issues that are identified and historical experience.

CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS – The Group considers all highly liquid investments that mature in three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates their fair market value.

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT – Property, furniture and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization of property, furniture and equipment are provided using the straight-line method over the estimated useful lives, which range from 3 to 15 years. Leasehold improvements are amortized at the shorter of the related lease term or their estimated useful lives which range from 3 to 30 years.

GOODWILL

GOODWILL – Combined goodwill of the Group at December 31, 2016 totaled $10.6 million (unaudited). Goodwill is recorded by each member of the Group as a result of business combinations. Management of each member of the Group evaluates goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable.   Each member of the Group evaluated its respective share of the combined goodwill at October 1, 2016 for signs of impairment under the provisions of ASU 2011-08. By utilizing certain qualitative measures outlined in the guidance, each member determined that its respective share of the combined goodwill was not impaired.

INCOME TAXES

INCOME TAXES - Each member of the Group is treated as a partnership for federal and state income tax purposes where all taxable income is allocated to the partners in accordance with the respective partnership agreement and so accordingly federal and state taxes on income are the responsibility of the joint venture partners individually.  Accordingly, no income tax provision is recorded by any joint ventures in the Group.

Open tax years are those that are open for examination by taxing authorities, and include all returns for tax years ending on or after December 31, 2013, for federal returns and December 31, 2013, for Maryland returns. The Group has no examinations in process and has not been notified of any future examinations at this time. Management of each member of the Group has reviewed all open tax years and major jurisdictions, and has not recorded an unrecognized tax benefit relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Group has recognized no interest or penalties related to uncertain tax positions taken or expected to be taken.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS –The combined balance sheets include the following financial instruments: cash and cash equivalents, receivables, trade accounts payable, capital leases, equipment notes payable and other liabilities. The Group considers the carrying amounts of cash and cash equivalents, receivables, other current assets and current liabilities to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment. Additionally, the Group considers the carrying amount of its equipment notes payable and capital lease obligations to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates.

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1. DESCRIPTION OF BUSINESS (Tables)

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Affiliates of Radnet

	% owned by Radnet, Inc.
Franklin Imaging Joint Venture	49%
Carroll County Radiology, LLC	40%
MRI at St. Joseph Medical Center, LLC	49%
Greater Baltimore Diagnostic Imaging Partnership ("GBDIP")	50%

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2016

Health Care Organization Revenue and Expense [Abstract]

Service fee revenue

	Years Ended December 31,
	2016			2015			2014
	(unaduited)			(unaduited)
Commercial Insurance	$	39,291		$	36,911		$	37,384
Medicare		13,233			12,322			12,003
Medicaid		1,807			1,980			1,872
Workers' Compensation/Personal Injury		2,390			2,805			2,643
Other		1,574			990			1,156
Service fee revenue, net of contractual allowances and discounts		58,295			55,008			55,058
Provision for bad debts		(2,796	)		(2,824	)		(2,832	)
Net service fee revenue	$	55,499		$	52,184		$	52,226

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4. GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of amortization expense

	2017		2018		2019		2020		2021		Thereafter		Total		Weighted average amortization period remaining in years
Management service contracts	$	16	$	16	$	16	$	16	$	16	$	149	$	229		16.0

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5. PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	December 31,
	2016			2015
	(unaudited)			(unaudited)
Medical equipment	$	40,306		$	39,841
Office equipment, furniture and fixtures		3,241			3,280
Leasehold improvements		16,257			14,440
Equipment under capital leases		221			–
		60,025			57,561
Accumulated depreciation and amortization		(47,008	)		(43,809	)
	$	13,017		$	13,752

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6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (IN THOUSANDS) (Tables)

12 Months Ended

Dec. 31, 2016

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

	December 31,
	2016		2015
	(unaudited)		(unaudited)
Accounts payable	$	1	$	1
Accrued expenses		484		628
Accrued payroll and vacation		761		208
Total	$	1,246	$	837

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7. EQUIPMENT NOTES PAYABLE AND CAPITAL LEASES (Tables)

12 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

Maturities of notes payable

	(unaudited)
2017	$	74
2018		74
2019		74
2020		20
2021		–
Thereafter		–
Total minimum payments		242
Amount representing interest		(21	)
Present value of net minimum lease payments		221
Less current portion		(64	)
Long-term portion lease obligations	$	157

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8. COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Minimum annual payments under operating leases

	Facilities		Equipment		Total
	(unaudited)		(unaudited)		(unaudited)
2017	$	1,917	$	404	$	2,321
2018		1,475		400		1,875
2019		1,081		385		1,465
2020		593		367		960
2021		248		90		339
Thereafter		351		–		351
	$	5,665	$	1,646	$	7,311

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1. DESCRIPTION OF BUSINESS (Details)	Dec. 31, 2016
Franklin Imaging Joint Venture [Member]
Percent owned by Radnet, Inc.	49.00%
Carroll County Radiology, LLC [Member]
Percent owned by Radnet, Inc.	40.00%
MRI at St. Joseph Medical Center, LLC [Member]
Percent owned by Radnet, Inc.	49.00%
Greater Baltimore Diagnostic Imaging Partnership [Member]
Percent owned by Radnet, Inc.	50.00%

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Revenue
Commercial Insurance	$ 39,291	$ 36,911	$ 37,384
Medicare	13,233	12,322	12,003
Medicaid	1,807	1,980	1,872
Workers Compensation/Personal Injury	2,390	2,805	2,643
Other	1,574	990	1,156
Service fee revenue, net of contractual allowances and discounts	58,295	55,008	55,058
Provision for bad debts	(2,796)	(2,824)	(2,832)
Net service fee revenue	$ 55,499	$ 52,184	$ 52,226

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Allowance for bad debts	$ 548,000	$ 365,000
Goodwill	$ 10,572,000	$ 9,923,000
Property, furniture and equipment
Useful lives	3 to 15 years
Leasehold Improvements [Member]
Useful lives	3 to 30 years

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3. ACQUISITIONS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill	$ 10,572	$ 9,923
Franklin Imaging LLC [Member] | Rosedale, MD Imaging Center [Member]
Cash paid for acquisition	1,000,000
Fixed asset allocation	600,000
Goodwill	649,000
Assumption of debt	241,000
Other Assets	$ 30,000

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4. GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Total goodwill and other intangible assets	$ 229	$ 350
Management service contracts [Member]
2017	16
2018	16
2019	16
2020	16
2021	16
Thereafter	149
Total goodwill and other intangible assets	$ 229
Weighted average amortization period remaining in years	16 years

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4. GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Amortization expense	$ 121
Goodwill	10,572	$ 9,923
Management service contracts [Member]
Accumulated amortization	156
Other intangible assets	385
Noncompete Agreements [Member]
Accumulated amortization	608
Other intangible assets	$ 608

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5. PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property and equipment, gross	$ 60,025	$ 57,561
Accumulated depreciation and amortization	(47,008)	(43,809)
Property and equipment, net	13,017	13,752
Medical equipment [Member]
Property and equipment, gross	40,306	39,841
Office equipment, furniture and fixtures [Member]
Property and equipment, gross	3,241	3,280
Leasehold improvements [Member]
Property and equipment, gross	16,257	14,440
Equipment Under Capital Leases [Member]
Property and equipment, gross	$ 221	$ 0

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5. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 4,200	$ 4,000	$ 4,700

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6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accounts payable	$ 1	$ 1
Accrued expenses	484	628
Accrued payroll and vacation	761	208
Total	$ 1,246	$ 837

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7. EQUIPMENT NOTES PAYABLE AND CAPITAL LEASES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
2017	$ 74
2018	74
2019	74
2020	20
2021	0
Thereafter	0
Total minimum payments	242
Amount representing interest	(21)
Present value of net minimum lease payments	221
Less current portion	(64)	$ 0
Long-term portion lease obligations	$ 157	$ 0

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7. EQUIPMENT NOTES PAYABLE AND CAPITAL LEASES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Note payable interest rate	3.50%
Debt maturity date	Oct. 01, 2018
Note payable, current	$ 201	$ 208
Note payable, noncurrent	156	$ 357
Note payable, total	$ 357

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8. COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
2017	$ 2,321
2018	1,875
2019	1,465
2020	960
2021	339
Thereafter	351
Total minimum annual payments under operating leases	$ 7,311
Facilities
2017		$ 1,917
2018		1,475
2019		1,081
2020		593
2021		248
Thereafter		351
Total minimum annual payments under operating leases		5,665
Equipment
2017		404
2018		400
2019		385
2020		367
2021		90
Thereafter		0
Total minimum annual payments under operating leases		$ 1,646

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8. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 3,100	$ 2,700	$ 3,500

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9. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Related Party Transactions [Abstract]
Due from affiliates	$ 10,000	$ 5,300