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ACQUISITIONS, DISPOSITIONS AND BUSINESS VENTURE ACTIVITY
 12 Months Ended
Dec. 31, 2021
Business Combination and Asset Acquisition [Abstract]  
ACQUISITIONS, DISPOSITIONS AND BUSINESS VENTURE ACTIVITY ACQUISITIONS, DISPOSITIONS AND BUSINESS VENTURE ACTIVITY
 
Acquisitions
 
Radiology Practice Acquisitions

During 2021 and 2020, we completed the acquisition of certain assets of the following entities, which either engage directly in the practice of radiology or associated businesses. The primary reason for these acquisitions was to strengthen our presence in the Arizona, California, New Jersey, and New York City markets. We made a fair value determination of the acquired assets and assumed liabilities and the following were recorded (in thousands):
2021:
Entity Date AcquiredTotal ConsiderationProperty & EquipmentRight of Use AssetsGoodwillIntangible AssetsOther AssetsRight of Use Liabilities
Personal Health Imaging PLLC*2/1/20212,9955766082,3555014(608)
ZP Elmont LLC*2/1/20212,1941,112—1,0055027—
ZP Freeport LLC*2/1/20216,0654,668—1,3284029—
Broadway Medical Imaging LLC*2/1/20211,1551,07644665023(446)
3235 Hempstead LLC*2/1/20219,3865,667—3,64970——
SLZM Realty LLC*2/1/202113,6714,617—8,97480——
2012 Sunrise Merrick LLC*2/1/202111,4282,7413358,61770—(335)
ZP Bayside LLC*3/1/20213,5453,3852,191405070(2,191)
ZP Laurelton LLC*3/1/20212,6582,5301,418325046(1,418)
ZP Smith LLC*3/1/20213,9783,5812,21434750—(2,214)
ZP 907 Northern LLC*4/1/20215625071,817550—(1,817)
William M. Kelly MD, Inc.* ^5/1/20213,7509901,3792,71050—(1,379)
60th Street MRI, LLC*5/1/202140085—29025——
ZP Parkchester LLC*5/1/2021263213311—50—(311)
ZP Eastern LLC*6/1/20212,8682,8011,9511750—(1,951)
Tangent Associates LLC**8/24/20212,02510—3791,636——
Mid Delaware Imaging P.A.12/1/20216,023590—5,26015023—
William M. Kelly MD, Inc.* ^12/6/20214,404701—3,65350——
William M. Kelly MD, Inc.* ^12/31/20212,346993232,19750—(323)
79,71635,94912,99340,8642,671232(12,993)
*Fair Value Determination is Final
** All stock purchase through issuing 67,658 shares of our common stock.
^ William M. Kelly MD acquisitions consisted of various subsidiaries purchased separately.
2020:
Entity Date AcquiredTotal ConsiderationProperty & EquipmentRight of Use AssetsGoodwillIntangible AssetsOther AssetsRight of Use Liabilities
Olney Open MRI, LLC*1/2/20201,7518491,300602300—(1,300)
MRI of Woodbridge LLC*3/2/20202,6084641,0811,83330011(1,081)
AZ-Tech Radiology and Open MRI, LLC*8/31/20205,4622,5327,5522,882—48(7,552)
ZP Atlantic LLC*11/1/20208,8717,9316,1818285062(6,181)
ZP Elmhurst LLC*11/1/202012,26910,68112,5711,4635075(12,571)
30,96122,45728,6857,608700196(28,685)
*Fair Value Determination is Final

Software Company Acquisitions

On June 1, 2020, we completed our acquisition of all the equity interests of DeepHealth Inc., ("DeepHealth") an artificial intelligence and machine learning company in an all stock purchase. As initial purchase consideration, we issued 915,132 shares at $16.93 per share (823,615 issued at execution, with up to 91,517 shares to be issued 18 months after acquisition subject to adjustment for any indemnification claims). The transaction was accounted for as an acquisition of a business and total purchase consideration determined to be approximately $34.6 million including i) 823,615 shares issued on the date of closing with fair value of $13.9 million, ii) a liability of 91,517 shares with a fair value of $1.5 million to be issued 18 months after acquisition subject to adjustment for any indemnification claims and will be marked to market in subsequent periods, iii) replacement awards attributable to pre-combination service issued to DeepHealth option holders with allocated fair value of $2.0 million, iv) acquisition date fair value of contingent consideration of $17.0 million and v) $0.1 million in closing costs reimbursed to the seller. The fair values of replacement awards attributable to pre-combination service and contingent consideration are recorded in additional paid in capital upon closing of the transaction. For the contingent consideration, there are three arrangements that will be settled in a fixed number of shares upon achievement of three individual specific milestones which are mutually exclusive of each other, with 390,789, 586,184, and 195,393 shares, respectively, issuable for each milestone arrangement. The fair value of the contingent consideration was estimated at the date of acquisition based on our share price and estimated probability of the achievement of the respective milestones. We recorded $0.1 million in current assets, $3.5 million in deferred tax liabilities, $14.8 million in intangible assets, primarily in-process research and development ("IPR&D'), and $23.3 million in goodwill. The goodwill is primarily attributable to expected post-acquisition synergies from integrating DeepHealth’s assembled workforce and IPR&D technologies. The fair values of the identifiable intangible assets related to IPR&D were determined by the income method and the assets will not be amortized until regulatory approval is obtained, but will be assessed for impairment annually, or more frequently if indicators of impairment become present.

On July 2, 2021, management determined DeepHealth had achieved its first specific milestone per the purchase contract and we issued the related fixed shares. In addition, we released the shares retained for any indemnification adjustments in full on December 1, 2021.

Dispositions
On June 1, 2020 we completed our sale of certain assets of our Imaging On Call subsidiary to RadVantage P.C. (an unrelated corporation) for approximately $1.0 thousand. With this transaction, we have exited the teleradiology business.
Subsidiary activity
Formation of majority owned subsidiary
On January 1, 2021 we entered into the Simi Valley Imaging Group, LLC, a partnership with Simi Valley Hospital and Health Services ("Simi Adventist"). The operation will offer multi-modality imaging services out of two locations in Ventura County, California. Total investment in the venture is $0.4 million. RadNet contributed $0.3 million in assets for a 60.0% economic interest and Simi Adventist contributed assets totaling $0.1 million for a 40.0% economic interest.
Sale of ownership interest in a majority owned subsidiary
Effective September 1, 2021 we completed the sale of a 24.9% ownership interest in our majority owned subsidiary West Valley Imaging Group, LLC for $13.1 million to Tarzana Medical Center, LLC. After the sale, our ownership interest in the subsidiary has reduced from 75.0% to 50.1% and we retain a controlling financial interest in the subsidiary. We recognized in additional paid in capital on our consolidated balance sheets, $4.2 million excess in consideration over the carrying value of the sold economic interest. Post the sale of our ownership interest we acquired from Tarzana Medical Center, LLC, certain tangible and intangible business assets for purchase consideration of approximately $5.2 million.