0000790526false12/31Q32020P3YP5Y00007905262020-01-012020-09-30xbrli:shares00007905262020-11-05iso4217:USD00007905262020-09-3000007905262019-12-31iso4217:USDxbrli:shares0000790526us-gaap:HealthCarePatientServiceMember2020-07-012020-09-300000790526us-gaap:HealthCarePatientServiceMember2019-07-012019-09-300000790526us-gaap:HealthCarePatientServiceMember2020-01-012020-09-300000790526us-gaap:HealthCarePatientServiceMember2019-01-012019-09-300000790526rdnt:CapitationArrangementsMember2020-07-012020-09-300000790526rdnt:CapitationArrangementsMember2019-07-012019-09-300000790526rdnt:CapitationArrangementsMember2020-01-012020-09-300000790526rdnt:CapitationArrangementsMember2019-01-012019-09-3000007905262020-07-012020-09-3000007905262019-07-012019-09-3000007905262019-01-012019-09-300000790526us-gaap:CommonStockMember2020-06-300000790526us-gaap:AdditionalPaidInCapitalMember2020-06-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-300000790526us-gaap:RetainedEarningsMember2020-06-300000790526rdnt:StockholdersEquityDeficitMember2020-06-300000790526us-gaap:NoncontrollingInterestMember2020-06-3000007905262020-06-300000790526us-gaap:CommonStockMember2020-07-012020-09-300000790526us-gaap:CommonStockMemberrdnt:DeepHealthInc.Member2020-07-012020-09-300000790526rdnt:DeepHealthInc.Member2020-07-012020-09-300000790526us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300000790526rdnt:StockholdersEquityDeficitMember2020-07-012020-09-300000790526us-gaap:NoncontrollingInterestMember2020-07-012020-09-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300000790526us-gaap:RetainedEarningsMember2020-07-012020-09-300000790526us-gaap:CommonStockMember2020-09-300000790526us-gaap:AdditionalPaidInCapitalMember2020-09-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300000790526us-gaap:RetainedEarningsMember2020-09-300000790526rdnt:StockholdersEquityDeficitMember2020-09-300000790526us-gaap:NoncontrollingInterestMember2020-09-300000790526us-gaap:CommonStockMember2019-06-300000790526us-gaap:AdditionalPaidInCapitalMember2019-06-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-06-300000790526us-gaap:RetainedEarningsMember2019-06-300000790526rdnt:StockholdersEquityDeficitMember2019-06-300000790526us-gaap:NoncontrollingInterestMember2019-06-3000007905262019-06-300000790526us-gaap:CommonStockMember2019-07-012019-09-300000790526us-gaap:AdditionalPaidInCapitalMember2019-07-012019-09-300000790526rdnt:StockholdersEquityDeficitMember2019-07-012019-09-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-07-012019-09-300000790526us-gaap:RetainedEarningsMember2019-07-012019-09-300000790526us-gaap:NoncontrollingInterestMember2019-07-012019-09-300000790526us-gaap:CommonStockMember2019-09-300000790526us-gaap:AdditionalPaidInCapitalMember2019-09-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-09-300000790526us-gaap:RetainedEarningsMember2019-09-300000790526rdnt:StockholdersEquityDeficitMember2019-09-300000790526us-gaap:NoncontrollingInterestMember2019-09-3000007905262019-09-300000790526us-gaap:CommonStockMember2019-12-310000790526us-gaap:AdditionalPaidInCapitalMember2019-12-310000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310000790526us-gaap:RetainedEarningsMember2019-12-310000790526rdnt:StockholdersEquityDeficitMember2019-12-310000790526us-gaap:NoncontrollingInterestMember2019-12-310000790526us-gaap:CommonStockMember2020-01-012020-09-300000790526us-gaap:CommonStockMemberrdnt:DeepHealthInc.Member2020-01-012020-09-300000790526rdnt:DeepHealthInc.Member2020-01-012020-09-300000790526us-gaap:AdditionalPaidInCapitalMember2020-01-012020-09-300000790526rdnt:StockholdersEquityDeficitMember2020-01-012020-09-300000790526us-gaap:NoncontrollingInterestMember2020-01-012020-09-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-09-300000790526us-gaap:RetainedEarningsMember2020-01-012020-09-300000790526us-gaap:CommonStockMember2018-12-310000790526us-gaap:AdditionalPaidInCapitalMember2018-12-310000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2018-12-310000790526us-gaap:RetainedEarningsMember2018-12-310000790526rdnt:StockholdersEquityDeficitMember2018-12-310000790526us-gaap:NoncontrollingInterestMember2018-12-3100007905262018-12-310000790526us-gaap:CommonStockMember2019-01-012019-09-300000790526us-gaap:AdditionalPaidInCapitalMember2019-01-012019-09-300000790526rdnt:StockholdersEquityDeficitMember2019-01-012019-09-300000790526us-gaap:NoncontrollingInterestMember2019-01-012019-09-300000790526us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-01-012019-09-300000790526us-gaap:RetainedEarningsMember2019-01-012019-09-300000790526rdnt:DeepHealthInc.Member2020-06-012020-06-010000790526rdnt:DeepHealthInc.Member2020-06-010000790526rdnt:NulogixMember2019-08-012019-08-01xbrli:pure0000790526rdnt:NulogixMember2019-08-0100007905262018-04-120000790526rdnt:VenturaCountyImagingGroupLLCMember2019-03-010000790526us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberrdnt:HudsonValleyRadiologyAssociatesMember2019-02-272019-02-270000790526us-gaap:VariableInterestEntityNotPrimaryBeneficiaryMemberrdnt:HudsonValleyRadiologyAssociatesMember2019-02-27rdnt:Center0000790526rdnt:BeverlyRadiologyMedicalGroupIIIMembersrt:ChiefExecutiveOfficerMember2020-09-300000790526rdnt:BeverlyRadiologyMedicalGroupIIIMemberrdnt:BoardMemberMember2020-09-300000790526us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2020-09-300000790526us-gaap:VariableInterestEntityPrimaryBeneficiaryMember2019-12-310000790526rdnt:ScriptSenderLlcMember2020-09-300000790526rdnt:CommercialInsurance1Member2020-07-012020-09-300000790526rdnt:CommercialInsurance1Member2019-07-012019-09-300000790526rdnt:CommercialInsurance1Member2020-01-012020-09-300000790526rdnt:CommercialInsurance1Member2019-01-012019-09-300000790526rdnt:Medicare1Member2020-07-012020-09-300000790526rdnt:Medicare1Member2019-07-012019-09-300000790526rdnt:Medicare1Member2020-01-012020-09-300000790526rdnt:Medicare1Member2019-01-012019-09-300000790526rdnt:Medicaid1Member2020-07-012020-09-300000790526rdnt:Medicaid1Member2019-07-012019-09-300000790526rdnt:Medicaid1Member2020-01-012020-09-300000790526rdnt:Medicaid1Member2019-01-012019-09-300000790526rdnt:WorkersCompensationPersonalInjury1Member2020-07-012020-09-300000790526rdnt:WorkersCompensationPersonalInjury1Member2019-07-012019-09-300000790526rdnt:WorkersCompensationPersonalInjury1Member2020-01-012020-09-300000790526rdnt:WorkersCompensationPersonalInjury1Member2019-01-012019-09-300000790526rdnt:HealthCarePatientServiceOtherMember2020-07-012020-09-300000790526rdnt:HealthCarePatientServiceOtherMember2019-07-012019-09-300000790526rdnt:HealthCarePatientServiceOtherMember2020-01-012020-09-300000790526rdnt:HealthCarePatientServiceOtherMember2019-01-012019-09-300000790526rdnt:HealthCareManagementServiceMember2020-07-012020-09-300000790526rdnt:HealthCareManagementServiceMember2019-07-012019-09-300000790526rdnt:HealthCareManagementServiceMember2020-01-012020-09-300000790526rdnt:HealthCareManagementServiceMember2019-01-012019-09-300000790526rdnt:TeleradiologyandSoftwareMember2020-07-012020-09-300000790526rdnt:TeleradiologyandSoftwareMember2019-07-012019-09-300000790526rdnt:TeleradiologyandSoftwareMember2020-01-012020-09-300000790526rdnt:TeleradiologyandSoftwareMember2019-01-012019-09-300000790526us-gaap:HealthCareOtherMember2020-07-012020-09-300000790526us-gaap:HealthCareOtherMember2019-07-012019-09-300000790526us-gaap:HealthCareOtherMember2020-01-012020-09-300000790526us-gaap:HealthCareOtherMember2019-01-012019-09-300000790526rdnt:COVID19PandemicMember2020-04-012020-04-300000790526rdnt:COVID19PandemicMember2020-05-012020-05-310000790526rdnt:PaycheckProtectionProgramLoansMemberrdnt:COVID19PandemicMember2020-09-300000790526rdnt:COVID19PandemicMember2020-09-300000790526rdnt:PropertyAndEquipmentMembersrt:MinimumMember2020-01-012020-09-300000790526srt:MaximumMemberrdnt:PropertyAndEquipmentMember2020-01-012020-09-300000790526us-gaap:LeaseholdImprovementsMembersrt:MinimumMember2020-01-012020-09-300000790526srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2020-01-012020-09-300000790526rdnt:OlneyOpenMRILLCMember2020-01-012020-09-300000790526rdnt:MRIatWoodbridgeLLCMember2020-01-012020-09-300000790526rdnt:AZTechMember2020-01-012020-09-300000790526rdnt:RestatedPlanMember2020-09-300000790526srt:MinimumMember2020-01-012020-09-300000790526srt:MaximumMember2020-01-012020-09-30rdnt:numberOfAgreement0000790526rdnt:Caps2016Member2020-09-300000790526rdnt:September2020CapMemberrdnt:Caps2016Member2020-09-300000790526rdnt:October2020CapMemberrdnt:Caps2016Member2020-09-300000790526us-gaap:LondonInterbankOfferedRateLIBORMemberrdnt:Caps2016Member2020-09-300000790526us-gaap:InterestRateCapMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-06-300000790526us-gaap:InterestRateCapMember2020-07-012020-09-300000790526us-gaap:InterestRateCapMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-09-300000790526us-gaap:InterestRateCapMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310000790526us-gaap:InterestRateCapMember2020-01-012020-09-300000790526rdnt:A2019SWAPSMember2020-09-300000790526rdnt:A2019SWAPSMember2019-06-300000790526rdnt:October2023Memberrdnt:A2019SWAPSMember2019-06-300000790526rdnt:October2025Memberrdnt:A2019SWAPSMember2019-06-300000790526us-gaap:LondonInterbankOfferedRateLIBORMemberrdnt:A2019SWAPSMemberus-gaap:InterestRateSwapMember2019-06-300000790526rdnt:A2019SWAPSMemberus-gaap:InterestRateSwapMember2019-06-300000790526us-gaap:LondonInterbankOfferedRateLIBORMemberrdnt:A2019SWAPS1Memberus-gaap:InterestRateSwapMember2019-06-300000790526rdnt:A2019SWAPS1Memberus-gaap:InterestRateSwapMember2019-06-300000790526us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMember2020-06-300000790526us-gaap:InterestRateSwapMember2020-07-012020-09-300000790526us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMember2020-09-300000790526us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMemberus-gaap:InterestRateSwapMember2019-12-310000790526us-gaap:InterestRateSwapMember2020-01-012020-09-300000790526us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateSwapMember2020-07-012020-09-300000790526us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2020-07-012020-09-300000790526us-gaap:OtherNonoperatingIncomeExpenseMemberus-gaap:InterestRateSwapMember2020-01-012020-09-300000790526us-gaap:InterestRateSwapMemberus-gaap:InterestExpenseMember2020-01-012020-09-300000790526us-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel1Member2020-09-300000790526us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateCapMember2020-09-300000790526us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMember2020-09-300000790526us-gaap:InterestRateCapMember2020-09-300000790526us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Member2020-09-300000790526us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2020-09-300000790526us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMember2020-09-300000790526us-gaap:InterestRateSwapMember2020-09-300000790526us-gaap:InterestRateCapMemberus-gaap:FairValueInputsLevel1Member2019-12-310000790526us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateCapMember2019-12-310000790526us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateCapMember2019-12-310000790526us-gaap:InterestRateCapMember2019-12-310000790526us-gaap:InterestRateSwapMemberus-gaap:FairValueInputsLevel1Member2019-12-310000790526us-gaap:FairValueInputsLevel2Memberus-gaap:InterestRateSwapMember2019-12-310000790526us-gaap:FairValueInputsLevel3Memberus-gaap:InterestRateSwapMember2019-12-310000790526us-gaap:InterestRateSwapMember2019-12-310000790526us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2020-09-300000790526us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300000790526us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300000790526us-gaap:EstimateOfFairValueFairValueDisclosureMember2020-09-300000790526us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueInputsLevel1Member2019-12-310000790526us-gaap:FairValueInputsLevel2Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310000790526us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310000790526us-gaap:EstimateOfFairValueFairValueDisclosureMember2019-12-310000790526us-gaap:LineOfCreditMemberrdnt:BarclaysMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2020-09-300000790526us-gaap:LineOfCreditMemberrdnt:BarclaysMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2019-12-310000790526us-gaap:RestrictedStockMember2020-07-012020-09-300000790526us-gaap:RestrictedStockMember2019-07-012019-09-300000790526us-gaap:RestrictedStockMember2020-01-012020-09-300000790526us-gaap:RestrictedStockMember2019-01-012019-09-300000790526rdnt:MedicVisionMember2017-03-240000790526rdnt:MedicVisionMember2017-03-242017-03-240000790526rdnt:MedicVisionMember2018-03-012018-03-010000790526rdnt:MedicVisionMember2018-03-010000790526rdnt:MedicVisionMember2020-09-300000790526rdnt:TurnerImagingMember2018-02-012018-02-010000790526rdnt:TurnerImagingMemberus-gaap:CommercialPaperMember2019-01-010000790526rdnt:TurnerImagingMember2019-10-110000790526rdnt:WhiteRabbit.aiInc.Member2019-11-052019-11-050000790526rdnt:WhiteRabbit.aiInc.Member2020-09-30rdnt:joint_venture0000790526rdnt:GlendaleAdvancedImagingMemberrdnt:JointVentureMemberrdnt:DignityHealthMembersrt:MinimumMember2019-01-012019-03-310000790526rdnt:GlendaleAdvancedImagingMemberrdnt:JointVentureMemberrdnt:DignityHealthMembersrt:MaximumMember2019-01-012019-03-310000790526rdnt:SantaMonicaImagingGroupLLCMember2020-08-012020-08-310000790526rdnt:SantaMonicaImagingGroupLLCMember2020-08-310000790526rdnt:AZTechMember2020-08-312020-08-310000790526rdnt:AZTechMember2020-08-310000790526rdnt:DeepHealthIncMember2020-06-012020-06-010000790526rdnt:DeepHealthIncMember2020-06-010000790526rdnt:MRIatWoodbridgeLLCMember2020-03-022020-03-020000790526rdnt:MRIatWoodbridgeLLCMember2020-03-020000790526rdnt:OlneyOpenMRILLCMember2020-01-022020-01-020000790526rdnt:OlneyOpenMRILLCMember2020-01-020000790526rdnt:ImagingOnCallMember2020-06-012020-06-010000790526rdnt:TermLoanMemberrdnt:FirstLienTermLoanMember2020-09-300000790526rdnt:TermLoanMemberrdnt:FirstLienTermLoanMember2019-12-310000790526rdnt:TermLoanMemberrdnt:RestatedAgreementMember2020-09-300000790526rdnt:TermLoanMemberrdnt:RestatedAgreementMember2019-12-310000790526rdnt:PaycheckProtectionProgramLoansMember2020-09-300000790526rdnt:PaycheckProtectionProgramLoansMemberrdnt:TermLoanMember2020-09-300000790526us-gaap:NotesPayableOtherPayablesMember2020-09-300000790526rdnt:TermLoanMember2020-09-300000790526rdnt:FirstLienTermLoansAMember2020-09-300000790526rdnt:FirstLienCreditAgreementEighthAmendmentMemberus-gaap:LineOfCreditMemberrdnt:BarclaysMemberus-gaap:RevolvingCreditFacilityMember2020-09-300000790526us-gaap:RevolvingCreditFacilityMember2020-09-300000790526rdnt:BarclaysMemberus-gaap:RevolvingCreditFacilityMember2020-09-300000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberrdnt:SunTrustMemberus-gaap:RevolvingCreditFacilityMember2020-09-300000790526us-gaap:LineOfCreditMemberrdnt:SunTrustMemberus-gaap:RevolvingCreditFacilityMember2020-09-300000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberrdnt:LeverageRatioOneMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberrdnt:LeverageRatioOneMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMemberrdnt:LeverageRatioTwoMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMemberrdnt:LeverageRatioTwoMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMemberrdnt:LeverageRatioThreeMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMemberrdnt:LeverageRatioThreeMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:LeverageRatioFourMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberrdnt:LeverageRatioFourMemberrdnt:FirstLienCreditAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2016-07-012016-07-010000790526us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberrdnt:FirstLienCreditAgreementSixthAmendmentMemberus-gaap:EurodollarMember2020-09-300000790526us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberrdnt:FirstLienCreditAgreementSixthAmendmentMemberus-gaap:BaseRateMember2020-09-300000790526us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberrdnt:FirstLienCreditAgreementSixthAmendmentMemberus-gaap:EurodollarMemberrdnt:LeverageRatioThreeMember2020-01-012020-09-300000790526us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberrdnt:FirstLienCreditAgreementSixthAmendmentMemberus-gaap:BaseRateMemberrdnt:LeverageRatioThreeMember2020-01-012020-09-300000790526rdnt:BarclaysMemberrdnt:TermLoanMemberrdnt:FirstLienTermLoanMember2020-01-012020-09-300000790526rdnt:PricingLevelIMemberrdnt:RestatedAgreementMember2018-08-310000790526rdnt:PricingLevelIMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2018-08-312018-08-310000790526rdnt:PricingLevelIMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2018-08-312018-08-310000790526rdnt:PricingLevelIMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMember2018-08-312018-08-310000790526rdnt:PricingLevelIIMemberrdnt:RestatedAgreementMember2018-08-310000790526rdnt:PricingLevelIIMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2018-08-312018-08-310000790526rdnt:PricingLevelIIMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2018-08-312018-08-310000790526rdnt:PricingLevelIIMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMember2018-08-312018-08-310000790526rdnt:RestatedAgreementMemberrdnt:PricingLevelIIIMember2018-08-310000790526rdnt:RestatedAgreementMemberrdnt:PricingLevelIIIMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2018-08-312018-08-310000790526rdnt:RestatedAgreementMemberrdnt:PricingLevelIIIMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2018-08-312018-08-310000790526rdnt:RestatedAgreementMemberrdnt:PricingLevelIIIMemberus-gaap:RevolvingCreditFacilityMember2018-08-312018-08-310000790526rdnt:PricingLevelIVMemberrdnt:RestatedAgreementMember2018-08-310000790526rdnt:PricingLevelIVMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2018-08-312018-08-310000790526rdnt:PricingLevelIVMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2018-08-312018-08-310000790526rdnt:PricingLevelIVMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMember2018-08-312018-08-310000790526rdnt:PricingLevelVMemberrdnt:RestatedAgreementMember2018-08-310000790526rdnt:PricingLevelVMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2018-08-312018-08-310000790526rdnt:PricingLevelVMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2018-08-312018-08-310000790526rdnt:PricingLevelVMemberrdnt:RestatedAgreementMemberus-gaap:RevolvingCreditFacilityMember2018-08-312018-08-310000790526rdnt:RestatedAgreementMemberrdnt:PricingLevelIIIMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:EurodollarMember2020-01-012020-09-300000790526rdnt:TermLoanMemberrdnt:SunTrustMember2018-01-012018-12-310000790526rdnt:TermLoanMemberrdnt:SunTrustMember2018-12-310000790526rdnt:BarclaysMemberus-gaap:LetterOfCreditMemberus-gaap:RevolvingCreditFacilityMember2020-01-012020-09-300000790526rdnt:FirstLienCreditAgreementSixthAmendmentMemberus-gaap:MediumTermNotesMember2017-08-220000790526us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMemberrdnt:FirstLienCreditAgreementSixthAmendmentMember2019-04-180000790526rdnt:FirstLienCreditAgreementSeventhAmendmentMember2019-04-180000790526rdnt:FirstLienCreditAgreementSeventhAmendmentMember2019-04-182019-04-180000790526rdnt:PaycheckProtectionProgramLoansMemberrdnt:COVID19PandemicMember2020-01-012020-09-30rdnt:loan0000790526srt:MinimumMemberrdnt:RestatedPlanMember2020-01-012020-09-300000790526srt:MaximumMemberrdnt:RestatedPlanMember2020-01-012020-09-300000790526us-gaap:StockOptionMember2020-09-300000790526us-gaap:StockOptionMember2019-12-310000790526us-gaap:StockOptionMember2020-01-012020-09-300000790526us-gaap:StockOptionMemberrdnt:DeepHealthIncMember2020-07-012020-09-300000790526rdnt:DeepHealthIncMember2020-07-012020-09-300000790526rdnt:DeepHealthIncMember2020-09-300000790526rdnt:DeepHealthIncMember2020-01-012020-09-300000790526us-gaap:StockOptionMemberrdnt:DeepHealthInc.Member2019-12-310000790526us-gaap:StockOptionMemberrdnt:DeepHealthInc.Member2020-01-012020-09-300000790526us-gaap:StockOptionMemberrdnt:DeepHealthInc.Member2020-09-300000790526us-gaap:RestrictedStockMember2020-09-300000790526us-gaap:RestrictedStockMember2019-12-310000790526us-gaap:RestrictedStockMember2020-01-012020-09-300000790526rdnt:FutureServiceMember2020-01-012020-09-300000790526rdnt:RestatedPlanMember2020-01-012020-09-300000790526us-gaap:SubsequentEventMemberus-gaap:InvestmentsInMajorityOwnedSubsidiariesMember2020-11-010000790526rdnt:SimiValleyHospitalAndHealthServicesMemberus-gaap:SubsequentEventMemberus-gaap:InvestmentsInMajorityOwnedSubsidiariesMember2020-11-01
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-Q
(Mark One)
     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 001-33307
RadNet, Inc.
(Exact name of registrant as specified in charter)
Delaware13-3326724
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
1510 Cotner Avenue 
Los Angeles,California90025
(Address of principal executive offices)(Zip Code)
(310) 478-7808
(Registrant’s telephone number, including area code)
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  No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes   No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes No
Securities registered pursuant to Section 12(b) of the Act:
Class TitleTrading SymbolRegistered Exchange
Common StockRDNTNASDAQ
The number of shares of the registrant’s common stock outstanding on November 5, 2020 was 51,636,099 shares.


Table of Contents
RADNET, INC.
TABLE OF CONTENTS
Page

ITEM 6.  Exhibits

i

Table of Contents
PART I - FINANCIAL INFORMATION
Item 1 – Financial Statements
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
September 30,
2020
December 31,
2019
(unaudited) 
ASSETS  
CURRENT ASSETS  
   Cash and cash equivalents$89,739 $40,165 
   Accounts receivable137,411 154,763 
   Due from affiliates424 1,242 
   Prepaid expenses and other current assets31,482 45,004 
      Total current assets 259,056 241,174 
PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS
   Property and equipment, net361,950 367,795 
   Operating lease right-of-use assets451,613 445,477 
      Total property, equipment and right-of-use assets813,563 813,272 
OTHER ASSETS
   Goodwill470,685 441,973 
   Other intangible assets57,152 42,994 
   Deferred financing costs1,944 1,559 
   Investment in joint ventures35,571 34,470 
   Deferred tax assets, net of current portion42,188 34,548 
   Deposits and other37,707 36,996 
       Total assets$1,717,866 $1,646,986 
LIABILITIES AND EQUITY
CURRENT LIABILITIES
    Accounts payable, accrued expenses and other$205,701 $207,585 
    Due to affiliates12,287 14,347 
    Deferred revenue45,846 1,316 
    Current finance lease liability3,041 3,283 
    Current operating lease liability67,449 61,206 
    Current portion of notes payable39,463 39,691 
        Total current liabilities373,787 327,428 
LONG-TERM LIABILITIES
    Long-term finance lease liability1,108 3,264 
    Long-term operating lease liability428,233 420,922 
    Notes payable, net of current portion627,179 652,704 
    Other non-current liabilities41,438 9,529 
        Total liabilities1,471,745 1,413,847 
EQUITY
Common stock - $0.0001 par value, 200,000,000 shares authorized; 51,596,098 and 50,314,328 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
5 5 
    Additional paid-in-capital306,079 262,865 
    Accumulated other comprehensive loss(24,923)(8,026)
    Accumulated deficit(123,956)(103,159)
        Total RadNet, Inc.'s stockholders' equity157,205 151,685 
Noncontrolling interests88,916 81,454 
       Total equity246,121 233,139 
       Total liabilities and equity$1,717,866 $1,646,986 

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

1

Table of Contents


RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
(unaudited)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
REVENUE    
     Service fee revenue$256,730 $261,908 $660,760 $762,751 
     Revenue under capitation arrangements35,046 30,784 103,145 90,587 
Total service revenue291,776 292,692 763,905 853,338 
     Provider relief funding221  25,696  
OPERATING EXPENSES
     Cost of operations, excluding depreciation and amortization246,462 254,383 708,095 743,997 
     Depreciation and amortization21,247 20,490 64,536 60,193 
     Loss on sale and disposal of equipment and other342 917 543 1,990 
     Severance costs571 52 1,647 1,054 
Total operating expenses268,622 275,842 774,821 807,234 
INCOME FROM OPERATIONS23,375 16,850 14,780 46,104 
OTHER INCOME AND EXPENSES
     Interest expense11,061 11,895 33,443 36,589 
     Equity in earnings of joint ventures(2,276)(1,955)(5,176)(6,072)
     Non-cash change in fair value of interest rate hedge679  4,523  
     Other (income) expenses(139)2 (247)1,271 
Total other expenses9,325 9,942 32,543 31,788 
INCOME (LOSS) BEFORE INCOME TAXES14,050 6,908 (17,763)14,316 
     (Provision for) benefit from income taxes(3,825)(1,816)5,029 (3,556)
NET INCOME (LOSS)10,225 5,092 (12,734)10,760 
     Net income attributable to noncontrolling interests4,069 1,897 8,063 6,400 
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$6,156 $3,195 $(20,797)$4,360 
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.12 $0.06 $(0.41)$0.09 
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.12 $0.06 $(0.41)$0.09 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic51,358,603 49,807,460 50,746,380 49,597,138 
Diluted51,955,815 50,360,360 50,746,380 50,113,306 
The accompanying notes are an integral part of these financial statements.
2

Table of Contents
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(IN THOUSANDS)
(unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
NET INCOME (LOSS)$10,225 $5,092 $(12,734)$10,760 
     Foreign currency translation adjustments11 (23)6 (28)
     Change in fair value of cash flow hedge, net of taxes195 (5,283)(18,764)(14,481)
     Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes969  1,861  
COMPREHENSIVE INCOME (LOSS)11,400 (214)(29,631)(3,749)
     Less comprehensive income attributable to noncontrolling interests4,069 1,897 8,063 6,400 
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO
RADNET, INC. COMMON STOCKHOLDERS$7,331 $(2,111)$(37,694)$(10,149)
The accompanying notes are an integral part of these financial statements.

3

Table of Contents
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the three months ended September 30, 2020 and September 30, 2019.
Common StockAdditional Paid-In
Capital
Accumulated Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Radnet, Inc.'s
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
BALANCE - July 1, 202051,554,760 $5 $304,012 $(26,098)$(130,111)$147,808 $85,448 $233,256 
Issuance of common stock under the equity compensation plan37,000 — — — — — —  
Issuance of common stock under the DeepHealth equity compensation plan4,338 — — — — — —  
Stock-based compensation expense— — 2,067 — — 2,067 — 2,067 
Distributions paid to noncontrolling interests— — — — — — (601)(601)
Change in cumulative foreign currency translation adjustment— — — 11 — 11 — 11 
Change in fair value of cash flow hedge, net of taxes— — — 195 — 195 — 195 
Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes— — — 969 — 969 — 969 
Other— — — — (1)(1)— (1)
Net income— — — — 6,156 6,156 4,069 10,225 
BALANCE-SEPTEMBER 30, 202051,596,098 $5 $306,079 $(24,923)$(123,956)$157,205 $88,916 $246,121 
BALANCE - July 1, 201950,127,234 $5 $257,607 $(6,942)$(116,752)$133,918 $78,512 $212,430 
Issuance of common stock under the equity compensation plan25,000 — — — — — —  
Stock-based compensation expense— — 1,356 — — 1,356 — 1,356 
Issuance of common stock for purchase of membership interest in HVRA101,902 — 1,500 — — 1,500 — 1,500 
Change in cumulative foreign currency translation adjustment— — — (23)— (23)— (23)
Change in fair value cash flow hedge, net of taxes— — — (5,283)— (5,283)— (5,283)
Other— — — (2)2 — —  
Net income— — — — 3,195 3,195 1,897 5,092 
BALANCE-SEPTEMBER 30, 201950,254,136 $5 $260,463 $(12,250)$(113,555)$134,663 $80,409 $215,072 
The accompanying notes are an integral part of these financial statements.
4

Table of Contents
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
The following table summarizes changes in the Company’s consolidated stockholders' equity, including noncontrolling interest, during the nine months ended September 30, 2020 and September 30, 2019.
5

Table of Contents
Common StockAdditional Paid-In
Capital
Accumulated Other
Comprehensive
Income (Loss)
Accumulated
Deficit
Total
Radnet, Inc.'s
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
BALANCE - January 1, 202050,314,328 $5 $262,865 $(8,026)$(103,159)$151,685 $81,454 $233,139 
Issuance of common stock under the equity compensation plan453,817 — — — — — —  
Issuance of common stock under the DeepHealth equity compensation plan4,338 — — — — — —  
Stock-based compensation expense— — 10,203 — — 10,203 — 10,203 
Issuance of common stock for sale of unregistered securities for the DeepHealth acquisition823,615 — 33,011 — — 33,011 — 33,011 
Distributions paid to noncontrolling interests— — — — — — (601)(601)
Change in cumulative foreign currency translation adjustment— — — 6 — 6 — 6 
Change in fair value cash flow hedge, net of taxes— — — (18,764)— (18,764)— (18,764)
Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes— — — 1,861 — 1,861 — 1,861 
Net loss— — — — (20,797)(20,797)8,063 (12,734)
BALANCE-SEPTEMBER 30, 202051,596,098 $5 $306,079 $(24,923)$(123,956)$157,205 $88,916 $246,121 
BALANCE - January 1, 201948,977,485 $5 $242,835 $2,259 $(117,915)$127,184 $73,069 $200,253 
Issuance of common stock upon exercise of options10,000 — 50 — — 50 — 50 
Issuance of common stock under the equity compensation plan726,042 — — — — — —  
Stock-based compensation expense— — 6,993 — — 6,993 — 6,993 
Issuance of common stock for purchase of membership interest in HVRA440,207 — 6,000 — — 6,000 — 6,000 
Forfeiture of restricted stock(1,500)— (5)— — (5)— (5)
Sale of noncontrolling interests, net of taxes— — 3,090 — — 3,090 2,008 5,098 
Purchase of noncontrolling interests— — — — — — (1,818)(1,818)
Contribution from noncontrolling partner— — — — — — 750 750 
Issuance of common stock for purchase of Nulogix101,902 — 1,500 — — 1,500 — 1,500 
Change in cumulative foreign currency translation adjustment— — — (28)— (28)— (28)
Change in fair value cash flow hedge, net of taxes— — — (14,481)— (14,481)— (14,481)
Net income— — — — 4,360 4,360 6,400 10,760 
BALANCE-SEPTEMBER 30, 201950,254,136 $5 $260,463 $(12,250)$(113,555)$134,663 $80,409 $215,072 
The accompanying notes are an integral part of these financial statements.

6

Table of Contents
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(unaudited)
Nine Months Ended September 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES  
Net (loss) income$(12,734)$10,760 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization64,536 60,193 
Amortization of operating lease right-of-use assets50,769 49,948 
Equity in earnings of joint ventures, net of dividends530 (2,148)
Amortization of deferred financing costs and loan discount3,266 3,103 
Loss on sale and disposal of equipment and other543 1,990 
Amortization of cash flow hedge2,204  
Non-cash change in fair value of interest rate hedge4,523  
Stock-based compensation10,144 6,963 
Other non-cash items included in cost of operations (559)
Change in fair value of contingent consideration
(145)(1,749)
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions:
Accounts receivable17,380 (3,467)
Other current assets13,522 (1,569)
Other assets(700)(5,770)
Deferred taxes(7,640)(4,230)
Operating lease liability(43,351)(49,721)
Deferred revenue44,530 (490)
Accounts payable, accrued expenses and other22,966 19,349 
Net cash provided by operating activities170,343 82,603 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of imaging facilities and other acquisitions(10,125)(27,150)
Equity investments at fair value (143)
Purchase of property and equipment(77,303)(68,269)
Proceeds from sale of equipment779 760 
Proceeds from the sale of equity interests in a joint venture 132 
Nulogix return of capital 792 
Equity contributions in existing and purchase of interest in joint ventures(1,631)(103)
Net cash used in investing activities(88,280)(93,981)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes and leases payable(2,704)(4,778)
Payments on term loan debt(32,472)(29,918)
Additional deferred finance costs on revolving loan amendment(741) 
Proceeds from debt issuance, net of issuing costs 97,144 
Proceeds from Payment Protection Program4,023  
Distributions paid to noncontrolling interests(601)(1,818)
Proceeds from sale of noncontrolling interest 5,275 
Contribution from noncontrolling partner 750 
Proceeds from revolving credit facility250,900 251,200 
Payments on revolving credit facility(250,900)(279,200)
Proceeds from issuance of common stock upon exercise of options 50 
Net cash (used in) provided by financing activities(32,495)38,705 
EFFECT OF EXCHANGE RATE CHANGES ON CASH6 (28)
NET INCREASE IN CASH AND CASH EQUIVALENTS49,574 27,299 
CASH AND CASH EQUIVALENTS, beginning of period40,165 10,389 
CASH AND CASH EQUIVALENTS, end of period$89,739 $37,688 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest$31,210 $36,058 
7

Table of Contents
The accompanying notes are an integral part of these financial statements.
8

Table of Contents
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(unaudited)
Supplemental Schedule of Non-Cash Investing and Financing Activities
We acquired equipment and certain leasehold improvements for approximately $28.1 million and $14.1 million during the nine months ended September 30, 2020 and 2019, respectively, which were not paid for as of September 30, 2020 and 2019, respectively. The offsetting amounts due were recorded in our condensed consolidated balance sheet under accounts payable, accrued expenses and other.
On June 1, 2020, we completed our stock purchase of DeepHealth, Inc. by issuing 823,615 shares of our common stock to purchase all of DeepHealth's shares and share equivalents. The shares were ascribed a value of $13.9 million.
On August 1, 2019 we issued RadNet common stock in the amount of $1.5 million to acquire 75% controlling interest in our formerly 25% owned joint venture Nulogix. See Note 2, Significant Accounting Policies, for further information.
We transferred approximately $4.3 million in net assets to our new joint venture, Ventura County Imaging Group, LLC in March 2019.
On February 27, 2019, we issued 440,207 shares of our common stock to the sellers of Hudson Valley Radiology Associates, P.L.L.C. ("HVRA") which permitted our variable interest entity, Lenox Hill Radiology and Medical Imaging Associates, P.C., to complete its purchase of the membership interest of HVRA. The shares were ascribed a value of $6.0 million.



9

Table of Contents
RADNET, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
We are a national provider of freestanding, fixed-site outpatient diagnostic imaging services with operations in seven U.S. states. At September 30, 2020, we operated, directly or indirectly through joint ventures with hospitals, 334 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York. Our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders. Our services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures. The vast majority of our centers offer multi-modality imaging services. Our multi-modality strategy diversifies revenue streams, reduces exposure to reimbursement changes and provides patients and referring physicians the convenience of a single location to serve the needs of multiple procedures. In addition to our imaging services, we design and develop software applications, Artificial Intelligence tools and other computerized systems for the diagnostic imaging industry. Our operations comprise a single segment for financial reporting purposes.

The consolidated financial statements include the accounts of RadNet, Inc as well as its subsidiaries in which RadNet has a controlling financial interest. The consolidated financial statements also include certain variable interest entities in which we are the primary beneficiary (as described in more detail below). All material intercompany transactions and balances have been eliminated upon consolidation. All of these affiliated entities are referred to collectively as “RadNet”, “we”, “us”, “our” or the “Company” in this report.
Accounting regulations stipulate that generally any entity with a) insufficient equity to finance its activities without additional subordinated financial support provided by any parties, or b) equity holders that, as a group, lack the characteristics which evidence a controlling financial interest, is considered a Variable Interest Entity (“VIE”). We consolidate all VIEs in which we are the primary beneficiary. We determine whether we are the primary beneficiary of a VIE through a qualitative analysis that identifies which variable interest holder has the controlling financial interest in the VIE. The variable interest holder who has both of the following has the controlling financial interest and is the primary beneficiary: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. In performing our analysis, we consider all relevant facts and circumstances, including: the design and activities of the VIE, the terms of the contracts the VIE has entered into, the nature of the VIE’s variable interests issued and how they were negotiated with or marketed to potential investors, and which parties participated significantly in the design or redesign of the entity.

VIEs that we consolidate as the primary beneficiary consist of professional corporations which are owned or controlled by individuals within our senior management, namely Howard G. Berger, M.D., our President and Chief Executive Officer, and John V. Crues, III, M.D., RadNet's Medical Director, both of whom are members of our Board of Directors. Dr. Berger owns, indirectly, 99% of the equity interests in Beverly Radiology Medical Group III (BRMG) and a controlling interest in two professional corporations in New York City. BRMG is responsible for the professional medical services at nearly all of our facilities located in California. Dr. Crues owns six professional corporations which provide medical services in Delaware, Maryland, New Jersey and New York. Additionally, Dr. Crues is a 1% owner of BRMG. These VIEs are collectively referred to as the consolidated medical group ("the Group").
RadNet provides non-medical, technical and administrative services to the Group for which it receives a management fee, pursuant to the related management agreements. Through the management agreements we have exclusive authority over all non-medical decision making related to the ongoing business operations and we determine the annual budget. The Group has insignificant operating assets and liabilities, and de minimis equity. Through management agreements with us, substantially all cash flows of the Group after expenses, including professional salaries, are transferred to us. We consolidate the revenue and expenses, assets and liabilities of the Group.

The Group on a combined basis recognized $38.3 million and $40.6 million of revenue, net of management services fees to RadNet, for the three months ended September 30, 2020 and 2019, respectively and $38.3 million and $40.6 million of operating expenses for the three months ended September 30, 2020 and 2019, respectively. RadNet recognized $169.0 million and $154.5 million of total billed net service fee revenue for the three months ended September 30, 2020, and 2019, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $104.8 million and $116.9 million of revenue, net of management services fees to RadNet, for the nine months ended September 30, 2020 and 2019, respectively and $104.8 million and $116.9 million of operating expenses for the nine months ended September 30, 2020 and 2019, respectively. RadNet recognized $433.3 million
10

Table of Contents
and $456.1 million of total billed net service fee revenue for the nine months ended September 30, 2020, and 2019, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The cash flows of the Group are included in the accompanying condensed consolidated statements of cash flows. All intercompany balances and transactions have been eliminated in consolidation. In our condensed consolidated balance sheets at September 30, 2020 and December 31, 2019, we have included approximately $84.5 million and $100.3 million, respectively, of accounts receivable and approximately $10.7 million and $7.0 million of accounts payable and accrued liabilities related to the Group, respectively.

The creditors of the Group do not have recourse to our general credit and there are no other arrangements that could expose us to losses on their behalf. However, RadNet may be required to provide financial support to cover any operating expenses in excess of operating revenues.

We also own a 49% economic interest in ScriptSender, LLC, which provides secure data transmission services of medical information. Through a management agreement, RadNet provides management and accounting services and receives an agreed upon fee. ScriptSender, LLC is dependent on the Company to finance its own activities, and as such we determined that it is a VIE but we are not a primary beneficiary since we do not have the power to direct the activities of the entity that most significantly impact the entity’s economic performance.

At all of our centers not serviced by the Group we have entered into long-term contracts (typically up to 40 years) with independent radiology groups to provide physician services at those centers. These radiology practices provide professional services, including supervision and interpretation of diagnostic imaging procedures, in our diagnostic imaging centers. The radiology practices maintain full control over the provision of professional services. Under these arrangements, in addition to obtaining technical fees for the use of our diagnostic imaging equipment and the provision of technical services, we provide management services and receive a fee based on the value of the services we provide. We own the diagnostic imaging equipment and, therefore, receive 100% of the technical reimbursements associated with imaging procedures. The radiology practice groups retain the professional reimbursements associated with imaging procedures after deducting management service fees paid to us and we have no economic controlling interest in these radiology practices as such, the financial results of these practices are not consolidated in our financial statements.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and, therefore, do not include all information and footnotes necessary for conformity with U.S. generally accepted accounting principles for complete financial statements; however, in the opinion of our management, all adjustments consisting of normal recurring adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods ended September 30, 2020 and 2019 have been made. The results of operations for any interim period are not necessarily indicative of the results for a full year. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto contained in our annual report on Form 10-K for the year ended December 31, 2019.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
During the period covered in this report, there have been no material changes to the significant accounting policies we use and have explained, in our annual report on Form 10-K for the fiscal year ended December 31, 2019. The information below is intended only to supplement the disclosure in our annual report on Form 10-K for the fiscal year ended December 31, 2019.
REVENUES - Our revenues generally relate to net patient fees received from various payors and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period when our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payor (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payors. The payment arrangements with third-party payors for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.
11

Table of Contents
As it relates to the Group, this service fee revenue includes payments for both the professional medical interpretation revenue recognized by them as well as the payment for all other aspects related to our providing the imaging services, for which we earn management fees. As it relates to others centers, this service fee revenue is earned through providing the use of our diagnostic imaging equipment and the provision of technical services as well as providing administration services such as clerical and administrative personnel, bookkeeping and accounting services, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities.
Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payors. Estimates of contractual allowances under managed care and commercial insurance plans are based upon the payment terms specified in the related contractual agreements. Revenues related to uninsured patients and copayment and deductible amounts for patients who have health care coverage may have discounts applied (uninsured discounts and contractual discounts). We also record estimated implicit price concessions (based primarily on historical collection experience) related to uninsured accounts to record self-pay revenues at the estimated amounts we expect to collect.
Under capitation arrangements with various health plans, we earn a per-enrollee amount each month for making available diagnostic imaging services to all plan enrollees under the capitation arrangement. Revenue under capitation arrangements is recognized in the period in which we are obligated to provide services to plan enrollees under contracts with various health plans.
Our total service revenues during the three and nine months ended September 30, 2020 and 2019 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):
 Three Months Ended
September 30,
Nine Months Ended
September 30,
2020201920202019
Commercial insurance$160,524 $163,152 $412,415 $475,064 
Medicare62,704 61,599 154,847 175,825 
Medicaid7,098 7,128 18,072 21,564 
Workers' compensation/personal injury7,183 10,865 25,705 32,950 
Other patient revenue8,328 6,085 17,211 17,947 
Management fee revenue2,675 1,792 8,574 5,662 
Teleradiology and Software revenue2,349 4,412 8,319 12,861 
Other5,869 6,875 15,617 20,878 
Service fee revenue256,730 261,908 660,760 762,751 
Revenue under capitation arrangements35,046 30,784 103,145 90,587 
Total service revenue$291,776 $292,692 $763,905 $853,338 

COVID-19 PANDEMIC AND CARES ACT FUNDING - On March 11, 2020 the World Health Organization (WHO) designated COVID-19 as a global pandemic. Patient volumes and the related revenues for our services were significantly impacted during the latter portion of the first quarter through the middle of the third quarter of 2020 as a result of federal, state and local government mandated restrictions requiring many people to remain at home and forced the closure of or limitations on certain businesses, as well as suspended elective procedures by health care facilities. Many of these restrictions have been eased or completely lifted across the states the Company operates in however, we are unable to predict the future impact of the pandemic on our operations.

During the nine months ended September 30, 2020, we received $39.4 million of accelerated Medicare payments, $5.0 million from Blue Cross, $25.7 million from the general distribution and $4.0 million from the Paycheck Protection Program established through the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The accelerated Medicare payments are recorded under the caption “ Deferred Revenue“ in our condensed consolidated balance sheet and will be repaid beginning in 2021. The general distribution funds were accounted for as government grants and recognized as other revenue, once reasonable assurance that the applicable terms and conditions required to retain the funds were met, under the caption “Provider relief funding” in our condensed Consolidated Statements of Operations

During the three months ended September 30, 2020, the Department of Health and Human Services significantly changed the measurement of Provider Relief Funds that providers are able to retain. We received approximately $0.2 million in
12

Table of Contents
funding and based on our assessment of the likelihood of meeting the applicable terms and conditions of the general distribution we continue to recognized the funds received as other revenue.

The CARES Act also providers for a payment deferral of the employer portion of Social Security tax incurred during the pandemic, allowing half of such payroll taxes to be deferred until December 2021 and the remaining half until December 2022. At September 30, 2020, the Company had deferred $10.8 million of Social Security taxes. These payment deferrals are recorded as payroll tax liability under the caption “Accounts payable, accrued expenses and other” in our condensed consolidated balance sheet.

We believe the extent of the COVID-19 pandemic’s impact on our operating results and financial condition has been and will continue to be driven by many factors, most of which are beyond our control and ability to forecast. Such factors include, but are not limited to, the scope and duration of stay-at-home practices, business closures and restrictions, suspensions of elective procedures and continued decline in procedure volumes for an indeterminable length of time and incremental expenses required for supplies and personal protective equipment. Because of these uncertainties, we cannot estimate the length or impact of the pandemic on our business. If we incur declines in cash flows and results of operations, such declines could have an impact on the inputs and assumptions used in significant accounting estimates, including implicit prices concessions related to uninsured patient accounts, and potential impairment of goodwill and long-lived assets. During the third quarter of 2020, procedure volumes increased and have had a positive impact on our patient revenue. However, the impact of COVID-19 in future periods may vary and could adversely impact our results of operations.

RECLASSIFICATION –We have reclassified certain amounts previously classified as held for sale related to property and equipment and goodwill to conform to our 2020 presentation.
ACCOUNTS RECEIVABLE - Substantially all of our accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. We continuously monitor collections from our payors and maintain an allowance for bad debts based upon specific payor collection issues that we have identified and our historical experience. In regards to the credit loss standard, we have concluded that the historical credit loss experienced across our receivable portfolio is materially similar to any current expected credit losses estimated under the Current Expected Credit Loss ("CECL") model.

In 2018 and 2019 we entered into factoring agreements with various institutions and sold certain accounts receivable under non-recourse agreements in exchange for notes receivables from the buyers. These transactions are accounted for as a reduction in accounts receivable as the agreements transfer effective control over and risk related to the receivables to the buyers. Proceeds on notes receivables are reflected as operating activities on our statement of cash flows and on our balance sheet as prepaid expenses and other current assets for the current portion and deposits and other for the long term portion. At September 30, 2020 we have $20.4 million remaining to be collected on these agreements. We do not utilize factoring arrangements as an integral part of our financing for working capital. To employ the CECL model for the notes receivable, we assess the party's ability to pay upfront at the inception of the notes receivable and subsequently by reviewing their financial statements annually and reassessing any insolvency risk on a periodic basis. In the event of a significant past due balance, as the sold receivables were already revalued and recorded at net realizable value, we can mitigate the expected credit loss by offsetting any collections from the underlying factored receivables and not remitting that to the counter party.
DEFERRED REVENUE - As noted above, in April of 2020, we received approximately $39.4 million in advanced Medicare payments from the Centers for Medicare and Medicaid Services ("CMS") as part of the expanded Accelerated and Advance Payment Program under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. As these payments are required to be repaid to CMS beginning 120 days after their receipt through offsets from new Medicare claims over a three month period, we have recorded amounts received to deferred revenue which will be amortized as Medicare reimbursements are earned. In addition, in May of 2020 we received $5.0 million in advance payments from an insurance carrier with similar repayment terms as the CMS.
DEFERRED FINANCING COSTS - Costs of financing are deferred and amortized using the effective interest rate method. Deferred financing costs, net of accumulated amortization, were $1.9 million and $1.6 million, as of September 30, 2020 and December 31, 2019, respectively and related to our Barclays line of credit. See Note 5, Credit Facilities and Notes Payable for more information.
PROPERTY AND EQUIPMENT - Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is performed using the straight-line method over the estimated useful lives of the assets acquired, which range from 3 to 15 years. Leasehold improvements are amortized at the lesser of lease term or their estimated useful lives, which range from 3 to 15 years. Maintenance and repairs are charged to expense as incurred.
13

Table of Contents
BUSINESS COMBINATION - When the qualifications for business combination accounting treatment are met, it requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.
GOODWILL AND INDEFINITE LIVED INTANGIBLES - Goodwill at September 30, 2020 totaled $470.7 million. Indefinite lived intangible assets at September 30, 2020 were $11.3 million. Goodwill and Indefinite Lived Intangibles are recorded as a result of business combinations. When we determine the carrying value of reporting unit exceeds its fair value an impairment charge would be recognized and should not exceed the total amount of goodwill allocated to that reporting unit. We tested goodwill and indefinite lived intangibles for impairment on October 1, 2019, noting no impairment. In addition to the annual impairment test, we regularly assess if an event has occurred which would require interim impairment testing. We considered the current and expected future economic and market conditions surrounding the novel strain of coronavirus ("COVID-19") pandemic and did not identify an indication of goodwill impairment being more likely than not through September 30, 2020. Activity in goodwill for the nine months ended September 30, 2020 is provided below (in thousands):
Balance as of December 31, 2019$441,973 
Goodwill acquired through the acquisition of Olney Open MRI, LLC601 
Goodwill acquired through the acquisition of MRI at Woodbridge, LLC1,833 
Goodwill acquired through the acquisition of DeepHealth, Inc.23,396 
Goodwill acquired through the acquisition of AZ-Tech Radiology & Open MRI, LLC2,882 
Balance as of September 30, 2020$470,685 
INCOME TAXES - Income tax expense is computed using an asset and liability method and using expected annual effective tax rates. Under this method, deferred income tax assets and liabilities result from temporary differences in the financial reporting bases and the income tax reporting bases of assets and liabilities. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized. When it appears more likely than not that deferred taxes will not be realized, a valuation allowance is recorded to reduce the deferred tax asset to its estimated realizable value. For net deferred tax assets we consider estimates of future taxable income in determining whether our net deferred tax assets are more likely than not to be realized.
We recorded an income tax expense of $3.8 million, or an effective tax rate of 27.2%, for the three months ended September 30, 2020 compared to an income tax expense of $1.8 million, or an effective tax rate of 26.3% for the three months ended September 30, 2019. We recorded an income tax benefit of $5.0 million, or an effective tax rate of 28.3%, for the nine months ended September 30, 2020 compared to an income tax expense of $3.6 million , or an effective tax rate of 24.8% for the nine months ended September 30, 2019.The income tax rates for the three and nine months ended September 30, 2020 diverge from the federal statutory rate due to (i) noncontrolling interests due to the controlled partnerships; (ii) effects of state income taxes; and (iii) excess tax benefits attributable to share-based compensation.
We believe no significant changes in the unrecognized tax benefits will occur within the next 12 months.
On March 27, 2020, the President of the United States signed into law the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The CARES Act, among other things, includes certain income tax provisions for individuals and corporations; however, these benefits do not impact the Company’s current tax provision.
LEASES - We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and long term operating lease liability in our consolidated balance sheets. Finance leases are included in property and equipment, current finance lease liability, and long-term finance lease liability in our consolidated balance sheets.  ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. We include options to extend a lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. For a contract in which we are a lessee that contains fixed
14

Table of Contents
payments for both lease and non-lease components, we have elected to account for the components as a single lease component, as permitted. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. ROU assets are tested for impairment if circumstances suggest that the carrying amount may not be recoverable. Our ROU assets consist of facility and equipment assets on operating leases. No events have occurred such as fire, flood, or other acts which have impaired the integrity of our ROU assets in 2020. Our facility leases require us to maintain insurance policies which would cover major damage to our facilities. We maintain business interruption insurance to cover loss of business due to a facility becoming non-operational under certain circumstances. Our equipment leases are covered by warranty and service contracts which cover repairs and provide regular maintenance to keep the equipment in functioning order.
EQUITY BASED COMPENSATION – We have one long-term incentive plan that we adopted in 2006 and which we first amended and restated as of April 20, 2015, and again on March 9, 2017 (the “Restated Plan”). The Restated Plan was approved by our stockholders at our annual stockholders meeting on June 8, 2017. We have reserved 14,000,000 shares of common stock for issuance under the Restated Plan which can be issued in the form of options, stock awards, stock appreciation rights, stock units, and cash awards. Stock options generally vest over three to five years and expire five to ten years from date of grant. We determine the compensation expense for each stock option award using the Black Scholes, or similar valuation model. Those models require that our management make certain estimates concerning risk free interest rates and volatility in the trading price of our common stock. The compensation expense recognized for all equity-based awards is recognized over the awards’ service periods. Equity-based compensation is classified in operating expenses within the same line item as the majority of the cash compensation paid to employees. In connection with our acquisition of DeepHealth Inc. on June 1, 2020, we assumed the DeepHealth, Inc. 2017 Stock Incentive Plan, including outstanding options awards that can be exercised for our common stock. No additional awards will be granted under the DeepHealth, Inc. 2017 Equity Incentive Plan. See Note 4, Facility Acquisitions and Note 6, Stock-Based Compensation, for more information.
COMPREHENSIVE INCOME (LOSS) - ASC 220 establishes rules for reporting and displaying comprehensive income or loss and its components. Our unrealized gains or losses on foreign currency translation adjustments, interest rate cap and swap agreements are included in comprehensive loss and are included in the consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020 and 2019.
COMMITMENTS AND CONTINGENCIES - We are party to various legal proceedings, claims, and regulatory, tax or government inquiries and investigations that arise in the ordinary course of business. With respect to these matters, we evaluate the developments on a regular basis and accrue a liability when we believe a loss is probable and the amount can be reasonably estimated. Based on current information, we do not believe that reasonably possible or probable losses associated with pending legal proceedings would either individually or in the aggregate, have a material adverse effect on our business and consolidated financial statements. However, the outcome of these matters is inherently uncertain. Therefore, if one or more of these matters were resolved against us for amounts in excess of management's expectations, our results of operations and financial condition, including in a particular reporting period in which any such outcome becomes probable and estimable, could be materially adversely affected.
DERIVATIVE INSTRUMENTS
2016 CAPS
In the fourth quarter of 2016, we entered into two forward interest rate cap agreements ("2016 Caps"). The 2016 Caps will mature in September and October 2020. The 2016 Caps had notional amounts of $150,000,000 and $350,000,000, respectively. Under these arrangements, the Company purchased a cap on 3 month LIBOR at 2.0%. We incurred a $5.3 million premium to enter into the 2016 Caps which is being accrued over the life of the agreements.
At inception, we designated our 2016 Caps as cash flow hedges of floating-rate borrowings. In accordance with accounting guidance, derivatives that have been designated and qualify as cash flow hedging instruments are reported at fair value. The gain or loss of the hedge (i.e. change in fair value) is reported as a component of comprehensive loss in the consolidated statement of equity since such hedge has been determined to be effective. See Fair Value Measurements section below for the fair value of the 2016 Caps at September 30, 2020.
A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive loss of the 2016 Caps is as follows (amounts in thousands):
15

Table of Contents
For the three months ended September 30, 2020
AccountJuly 1, 2020 BalanceAmount of comprehensive gain recognized on derivative net of taxesSeptember 30, 2020 BalanceLocation
Accumulated Other Comprehensive Loss, net of taxes(1,409)195 (1,214)Liabilities and Equity
For the nine months ended September 30, 2020
AccountJanuary 1, 2020 BalanceAmount of comprehensive gain recognized on derivative net of taxesSeptember 30, 2020 BalanceLocation
Accumulated Other Comprehensive Loss, net of taxes(1,877)663 (