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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, 2022
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 its 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)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Class TitleTrading SymbolRegistered Exchange
Common StockRDNTNASDAQ
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 every Interactive Data File required to be submitted 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   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.
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
The number of shares of the registrant’s common stock outstanding on November 4, 2022 was 57,360,850 shares.


RADNET, INC.
TABLE OF CONTENTS
Page

ITEM 6.  Exhibits

i

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,
2022
December 31,
2021
(unaudited) 
ASSETS  
CURRENT ASSETS  
   Cash and cash equivalents$95,006 $134,606 
   Accounts receivable172,507 135,062 
   Due from affiliates3,648 5,384 
   Prepaid expenses and other current assets53,344 49,212 
      Total current assets 324,505 324,264 
PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS
   Property and equipment, net515,569 484,247 
   Operating lease right-of-use assets631,338 584,291 
      Total property, equipment and right-of-use assets1,146,907 1,068,538 
OTHER ASSETS
   Goodwill575,092 513,820 
   Other intangible assets88,640 56,603 
   Deferred financing costs1,758 2,135 
   Investment in joint ventures52,020 42,229 
   Deferred tax assets3,512 14,853 
   Deposits and other54,730 36,032 
       Total assets$2,247,164 $2,058,474 
LIABILITIES AND EQUITY
CURRENT LIABILITIES
    Accounts payable, accrued expenses and other$296,333 $263,937 
    Due to affiliates31,664 23,530 
    Deferred revenue3,565 10,701 
    Current operating lease liability66,872 65,452 
    Current portion of notes payable10,789 11,164 
        Total current liabilities409,223 374,784 
LONG-TERM LIABILITIES
    Long-term operating lease liability625,278 577,675 
    Notes payable, net of current portion735,500 743,498 
    Other non-current liabilities18,773 16,360 
        Total liabilities1,788,774 1,712,317 
EQUITY
Common stock - $0.0001 par value, 200,000,000 shares authorized; 57,290,756 and 53,548,227 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively
5 5 
    Additional paid-in-capital424,369 342,592 
    Accumulated other comprehensive loss(29,680)(20,421)
    Accumulated deficit(81,688)(93,272)
        Total RadNet, Inc.'s stockholders' equity313,006 228,904 
Noncontrolling interests145,384 117,253 
       Total equity458,390 346,157 
       Total liabilities and equity$2,247,164 $2,058,474 

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



1

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,
2022202120222021
REVENUE    
     Service fee revenue$312,043 $295,407 $931,819 $870,479 
     Revenue under capitation arrangements38,001 37,283 114,366 111,449 
Total service revenue350,044 332,690 1,046,185 981,928 
     Provider relief funding   6,291 
OPERATING EXPENSES
     Cost of operations, excluding depreciation and amortization313,943 272,756 934,757 838,609 
     Depreciation and amortization29,229 24,606 85,209 71,272 
     (Gain) loss on sale and disposal of equipment and other(247)2,595 962 (279)
     Severance costs195 163 496 715 
Total operating expenses343,120 300,120 1,021,424 910,317 
INCOME FROM OPERATIONS6,924 32,570 24,761 77,902 
OTHER INCOME AND EXPENSES
     Interest expense12,420 12,032 35,398 37,028 
     Equity in earnings of joint ventures(3,085)(2,853)(8,350)(8,259)
     Non-cash change in fair value of interest rate swaps(12,451)(2,870)(39,576)(14,149)
     Debt restructuring and extinguishment expenses   6,044 
     Other expenses (income)1,405 (167)1,562 1,699 
Total other (income) expenses(1,711)6,142 (10,966)22,363 
INCOME BEFORE INCOME TAXES8,635 26,428 35,727 55,539 
     Provision for income taxes(2,188)(5,284)(7,087)(12,534)
NET INCOME6,447 21,144 28,640 43,005 
     Net income attributable to noncontrolling interests5,779 4,924 17,055 14,455 
NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$668 $16,220 $11,585 $28,550 
BASIC NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.01 $0.31 $0.21 $0.55 
DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS$0.01 $0.30 $0.19 $0.54 
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic56,744,419 52,810,644 56,041,017 52,323,360 
Diluted57,651,761 53,817,840 57,036,417 53,249,698 
The accompanying notes are an integral part of these financial statements.
2

RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(IN THOUSANDS)
(unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
NET INCOME$6,447 $21,144 $28,640 $43,005 
     Foreign currency translation adjustments(6,000)(11)(12,031)(32)
     Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes924 920 2,771 2,765 
COMPREHENSIVE INCOME1,371 22,053 19,380 45,738 
     Less comprehensive income attributable to noncontrolling interests5,779 4,924 17,055 14,455 
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO
RADNET, INC. COMMON STOCKHOLDERS$(4,408)$17,129 $2,325 $31,283 
The accompanying notes are an integral part of these financial statements.

3

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, 2022 and September 30, 2021.
Common StockAdditional Paid-In
Capital
Accumulated Other
Comprehensive
 Loss
Accumulated
Deficit
Total
Radnet, Inc.'s
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
BALANCE - JUNE 30, 202257,303,565 $5 $419,136 $(24,603)$(82,355)$312,183 $139,202 $451,385 
Issuance of common stock under the equity compensation plan2,500 — — — — — — — 
Issuance of common stock under the DeepHealth equity compensation plan7,175 — — — — — — — 
Stock-based compensation expense— — 3,362 — — 3,362 — 3,362 
Adjustment for shares returned/forfeited(22,484)— (45)— — (45)— (45)
Sale of economic interests in majority owned subsidiary, net of taxes— — 1,916 — — 1,916 — 1,916 
Contribution from noncontrolling partner— — — — — — 404 404 
Change in cumulative foreign currency translation adjustment— — — (6,000)— (6,000)— (6,000)
Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes— — — 924 — 924 — 924 
Other— — — (1)(1)(2)(1)(3)
Net income— — — — 668 668 5,779 6,447 
BALANCE-SEPTEMBER 30, 202257,290,756 $5 $424,369 $(29,680)$(81,688)$313,006 $145,384 $458,390 
BALANCE - JUNE 30, 202152,678,030 $5 $324,954 $(22,227)$(105,668)$197,064 $102,215 $299,279 
Issuance of common stock under the equity compensation plan94,638 — — — — — — — 
Issuance of common stock under the DeepHealth equity compensation plan464,855 — — — — — — — 
Stock-based compensation expense— — 4,463 — — 4,463 — 4,463 
Issuance of common stock for sale of unregistered securities for acquisition67,658 — 2,025 — — 2,025 — 2,025 
Forfeiture of restricted stock(3,365)— (42)— — (42)— (42)
Sale of noncontrolling interests, net of taxes— — 4,198 — — 4,198 7,404 11,602 
Change in cumulative foreign currency translation adjustment— — — (11)— (11)— (11)
Change in fair value of cash flow hedge from prior periods reclassified to earnings— — — 920 — 920 — 920 
Other— — 1 1 (2) (1)(1)
Net income— — — — 16,220 16,220 4,924 21,144 
BALANCE-SEPTEMBER 30, 202153,301,816 $5 $335,599 $(21,317)$(89,450)$224,837 $114,542 $339,379 
The accompanying notes are an integral part of these financial statements.
4

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, 2022 and September 30, 2021
Common StockAdditional Paid-In
Capital
Accumulated Other
Comprehensive
Loss
Accumulated
Deficit
Total
Radnet, Inc.'s
Equity
Noncontrolling
Interests
Total
Equity
SharesAmount
BALANCE - DECEMBER 31, 202153,548,227 $5 $342,592 $(20,421)$(93,272)$228,904 $117,253 $346,157 
Issuance of common stock under the equity compensation plan685,577 — — — — — — — 
Issuance of common stock under the DeepHealth equity compensation plan973,144 — — — — — — — 
Stock-based compensation expense— — 18,856 — — 18,856 — 18,856 
Issuance of common stock for sale of unregistered securities for acquisition2,106,292 — 56,470 — — 56,470 — 56,470 
Adjustment for shares returned/forfeited(22,484)— (45)— — (45)— (45)
Contribution from noncontrolling partner— — — — — — 11,077 11,077 
Sale of economic interests in majority owned subsidiary, net of taxes— — 6,498 — — 6,498  6,498 
Change in cumulative foreign currency translation adjustment— — — (12,031)— (12,031)— (12,031)
Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes— — — 2,771 — 2,771 — 2,771 
Other— — (2)1 (1)(2)(1)(3)
Net income— — — — 11,585 11,585 17,055 28,640 
BALANCE-SEPTEMBER 30, 202257,290,756 $5 $424,369 $(29,680)$(81,688)$313,006 $145,384 $458,390 
BALANCE - DECEMBER 31, 202051,640,537 $5 $307,788 $(24,051)$(117,999)$165,743 $92,560 $258,303 
Issuance of common stock upon exercise of options2,500 — 26 — — 26 — 26 
Issuance of common stock under the equity compensation plan1,127,996 — — — — — — — 
Issuance of common stock under the DeepHealth equity compensation plan466,490 — — — — — — — 
Stock-based compensation expense— — 21,608 — — 21,608 — 21,608 
Issuance of common stock for sale of unregistered securities for acquisition67,658 — 2,025 — — 2,025 — 2,025 
Adjustment for shares returned/forfeited(3,365)— (42)— — (42)— (42)
Sale of noncontrolling interests, net of taxes— — 4,198 — — 4,198 7,404 11,602 
Purchase of noncontrolling interests— — (4)— — (4)— (4)
Contribution from noncontrolling partner— — — — — — 123 123 
Change in cumulative foreign currency translation adjustment— — — (32)— (32)— (32)
Change in fair value of cash flow hedge from prior periods reclassified to earnings, net of taxes2,765 2,765 — 2,765 
Other— — — 1 (1)— —  
Net income— — — — 28,550 28,550 14,455 43,005 
BALANCE-SEPTEMBER 30, 202153,301,816 $5 $335,599 $(21,317)$(89,450)$224,837 $114,542 $339,379 
The accompanying notes are an integral part of these financial statements.
5

RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(unaudited)
Nine Months Ended September 30,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES  
Net income$28,640 $43,005 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization85,209 71,272 
Amortization of operating lease right-of-use assets51,573 55,880 
Equity in earnings of joint ventures, net of dividends(8,350)(8,259)
Amortization of deferred financing costs and loan discount1,943 2,608 
Loss (gain) on sale and disposal of equipment and other962 (279)
Loss on extinguishment of debt 1,496 
Amortization of cash flow hedge, net of taxes2,771 2,765 
Non-cash change in fair value of interest rate swaps(39,576)(14,149)
Stock-based compensation19,112 21,566 
Change in fair value of contingent consideration
(329)891 
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions:
Accounts receivable(36,686)(23,237)
Other current assets(4,934)3,358 
Other assets3,738 (4,998)
Deferred taxes8,955 10,124 
Operating lease liability(49,597)(55,035)
Deferred revenue(7,809)(19,438)
Accounts payable, accrued expenses and other37,148 12,725 
Net cash provided by operating activities92,770 100,295 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of imaging centers and other acquisitions(26,009)(70,108)
Purchase of property and equipment(98,606)(88,478)
Proceeds from sale of equipment3,008 521 
Equity contributions in existing and purchase of interest in joint ventures(1,441)(1,441)
Net cash used in investing activities(123,048)(159,506)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes and leases payable (3,302)
Payments on term loan debt(9,938)(616,217)
Proceeds from debt refinancing, net of issuing costs 716,369 
Proceeds from sale of economic interest in majority owned subsidiary, net of taxes 11,602 
Proceeds from revolving credit facility 128,300 
Payments on revolving credit facility (128,300)
Proceeds from issuance of common stock upon exercise of options 26 
Net cash (used in) provided by financing activities(9,938)108,478 
EFFECT OF EXCHANGE RATE CHANGES ON CASH616 (32)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(39,600)49,235 
CASH AND CASH EQUIVALENTS, beginning of period134,606 102,018 
CASH AND CASH EQUIVALENTS, end of period$95,006 $151,253 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest$30,251 $21,408 
Cash paid during the period for income taxes$560 $1,913 
The accompanying notes are an integral part of these financial statements.
6

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 $61.0 million and $50.5 million during the nine months ended September 30, 2022 and 2021, respectively, which were not paid for as of September 30, 2022 and 2021, respectively. The offsetting amounts due were recorded in our condensed consolidated balance sheet under accounts payable, accrued expenses and other.
On April 1, 2022 we received $8.4 million in fixed assets and equipment from our partner in Frederick County Radiology, LLC. See Note 4, Facility Acquisitions contained herein.
On January 20, 2022, we issued 1,141,234 shares of our common stock to complete our purchase of Aidence Holding B.V. The shares were ascribed a value of $30.6 million.
On January 20, 2022, we issued 965,058 shares to complete our purchase of Quantib B.V. The shares were ascribed a value of $25.9 million.
On August 24, 2021, we completed our stock purchase of Tangent Associates LLC by issuing 67,658 shares of our common stock to complete the transaction. The shares were ascribed a value of $2.0 million.
On January 1, 2021 we entered into the Simi Valley Imaging Group, LLC, partnership agreement with Simi Valley Hospital and Health Services ("Simi Adventist"). Of the total combined assets of $0.4 million, RadNet transferred $0.3 million and Simi Adventist contributed the remaining $0.1 million.
7

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 in the United States. At September 30, 2022, we operated directly or indirectly through joint ventures with hospitals, 349 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 one location to serve the needs of multiple procedures. In addition to our center operations, we have certain other subsidiaries that develop Artificial Intelligence ("AI") products and solutions that are designed to enhance interpretation of radiographic images. Our operations comprise two segments for financial reporting purposes for this reporting period, Imaging Centers and Artificial Intelligence. For further financial information about these segments, see Note 5, Segment Reporting.
 
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 and provide professional medical services for centers in Arizona, California, Delaware, Maryland, New Jersey and New York. These VIEs are collectively referred to as 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. 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 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 behalf of the Group. However, RadNet may be required to provide financial support to cover any operating expenses in excess of operating revenues.

The Group on a combined basis recognized $48.9 million and $43.8 million of revenue, net of management services fees to RadNet, for the three months ended September 30, 2022 and 2021, respectively and $48.9 million and $43.8 million of operating expenses for the three months ended September 30, 2022 and 2021, respectively. RadNet recognized $190.6 million and $186.8 million of total billed net service fee revenue for the three months ended September 30, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.

The Group on a combined basis recognized $141.4 million and $135.0 million of revenue, net of management services fees to RadNet, for the nine months ended September 30, 2022 and 2021, respectively and $141.4 million and $135.0 million of operating expenses for the nine months ended September 30, 2022 and 2021, respectively. RadNet recognized $584.0 million and $556.4 million of total billed net service fee revenue for the nine months ended September 30, 2022, and 2021, respectively, for management services provided to the Group relating primarily to the technical portion of billed revenue.
8


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, 2022 and December 31, 2021, we have included approximately $102.1 million and $89.2 million, respectively, of accounts receivable and approximately $14.8 million and $14.4 million of accounts payable and accrued liabilities related to the Group, respectively.

At all of our centers not serviced by the Group we have entered into long-term contracts with medical groups to provide professional services at those centers, including supervision and interpretation of diagnostic imaging procedures. The medical groups maintain full control over the physicians they employ. Through our management agreements, we make available to the medical groups the imaging centers, including all furniture, fixtures and medical equipment therein. The medical groups are compensated for their services from the professional component of the global net service fee revenue and after deducting management service fees paid to us, we have no economic controlling interest in these medical groups. As such, the financial results of these groups are not consolidated in our financial statements.

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 RadNet 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. We have continued to finance ScriptSender during it's development phase and our maximum exposure to loss is $3.5 million, which represents our receivable balance from the entity. Maximum exposure to loss is the loss that we would absorb in the event that all of the assets of ScriptSender are deemed worthless. We paid operating expenses for the venture of $0.5 million and $0.6 million for the three months ended September 30, 2022 and September 30, 2021, respectively and $1.5 million and $1.8 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.
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 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, 2022 and 2021 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, 2021.
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, 2021. 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, 2021.
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 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.
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 other 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
9

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 fee revenues during the three and nine months ended September 30, 2022 and 2021 are presented in the table below. Our imaging center revenue is displayed as the estimated service fee, broken down by classification of insurance coverage type. Additional revenues are earned from our management services provided to joint ventures and our software and AI subsidiaries.
In ThousandsThree Months Ended
September 30,
Nine Months Ended
September 30,
2022202120222021
Commercial insurance$189,634 $185,723 $573,259 $555,355 
Medicare78,034 73,163 226,827 207,977 
Medicaid9,669 8,707 28,456 26,198 
Workers' compensation/personal injury13,200 11,554 38,785 32,507 
Other patient revenue7,646 4,800 22,334 14,766 
Management fee revenue6,099 5,255 17,199 16,007 
Software revenue3,430 2,068 9,849 7,115 
Other3,431 3,641 12,054 10,058 
Revenue under capitation arrangements38,001 37,283 114,366 111,449 
Imaging Center Segment Revenue349,144