RadNet (RDNT) 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.2

Unaudited Pro Forma Condensed Consolidated Financial Statements of RadNet, Inc.

On December 2, 2010, Radnet, Inc. ("RadNet") completed its acquisition of five imaging centers in Northern New Jersey and a 50% equity interest in a sixth center from Progressive Health, LLC and certain affiliates and related entities (“Progressive”). The following unaudited pro forma condensed consolidated financial statements of RadNet, Inc. ("RadNet") have been prepared to give effect to the completed acquisition, which was accounted for using the purchase method of accounting.

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

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

The unaudited pro forma condensed consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes and do not purport to represent what the financial position or results of operations actually would have been if the events described above occurred as of the dates indicated or what such financial position or results would be for any future periods. The unaudited pro forma condensed consolidated financial statements, and the accompanying notes, are based upon the respective historical consolidated financial statements of RadNet and Progressive, and should be read in conjunction with RadNet’s historical financial statements and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operation" contained in RadNet’s Annual Report on Form 10-K for the year ended December 31, 2009 and its Quarterly Report on Form 10-Q for the period ended September 30, 2010, as well as Progressive’s financial statements presented herein.

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RADNET, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS)

As of September 30 ,2010

						Elimination of
						excluded				Pro forma				Pro forma
	RadNet			Progressive		imaging centers				adjustments				combined
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	24,462		$	1,172	$	(114	)	(a)	$	(18,194	)	(b)		7,326
Accounts receivable, net		94,604			7,525		(556	)	(a)		(5,910	)	(c)		95,664
Prepaid expenses and other current assets		16,472			170		(12	)	(a)		(62	)	(d)		16,568
Total current assets		135,538			8,868		(682	)			(24,166	)			119,558
PROPERTY AND EQUIPMENT, NET		190,031			3,214		(32	)	(a)						193,213
OTHER ASSETS
Goodwill		125,011			208		-				14,352		(e)		139,571
Other intangible assets		52,569			-		-								52,569
Deferred financing costs, net		16,003			-		-				-				16,003
Investment in joint ventures		16,020			-		-				-				16,020
Deposits and other		2,478			452		(84	)	(a)		(292	)	(f)		2,555
Total assets	$	537,650		$	12,743	$	(798	)		$	(10,106	)		$	539,489
LIABILITIES AND EQUITY DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	84,640		$	3,067	$	(229	)	(a)	$	(2,635	)	(g)	$	84,842
Due to affiliates		2,382			-		794		(a)		(794	)	(h)		2,382
Current portion of notes payable		8,043									-				8,043
Current portion of deferred rent		717			-		-				-				717
Obligations under capital leases, current portion		10,227			666		-				(258	)	(i)		10,635
Total current liabilities		106,009			3,733		565				(3,687	)			106,619
LONG-TERM LIABILITIES
Deferred rent, net of current portion		10,638			-		-				-				10,638
Deferred taxes		277			-		-				-				277
Notes payable, net of current portion		480,684			-		-				-				480,684
Obligations under capital leases, net of current portion		6,565			2,033		-				(1,211	)	(i)		7,387
Other non-current liabilities		21,004			-		-				-				21,004
Total liabilities		625,177			5,765		565				(4,898	)			626,609
COMMITMENTS AND CONTINGENCIES
EQUITY DEFICIT
Common stock		4			-		-				-				4
Paid-in-capital		161,018			-		-				-				161,018
Accumulated other comprehensive loss		(2,453	)		-		-				-				(2,453	)
Accumulated deficit		(246,141	)		5,807		(806	)	(a)		(5,001	)	(j)		(246,141	)
Total Radnet, Inc.'s equity deficit		(87,572	)		5,807		(806	)			(5,001	)			(87,572	)
Noncontrolling interests		45			1,170		(557	)	(a)		(207	)	(l)		452
Total equity deficit		(87,527	)		6,978		(1,363	)			(5,208	)			(87,120	)
Total liabilities and equity deficit	$	537,650		$	12,743	$	(798	)		$	(10,106	)		$	539,489

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

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RADNET, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE DATA)

For the nine months ended September 30, 2010

							Elimination of
							excluded			Pro forma			Pro forma
	RadNet			Progressive			imaging centers			adjustments			combined
NET REVENUE	$	403,222		$	14,398		$	(1,093	)(a)	$	-		$	416,527
OPERATING EXPENSES
Cost of operations		311,478			10,897			(890	)(a)		-			321,484
Depreciation and amortization		40,153			1,051			(7	)(a)		-			41,196
Provision for bad debts		24,603			581			(54	)(a)		-			25,130
Loss on sale of equipment		606			-			-			-			606
Severance costs		731			-			-			-			731
Total operating expenses		377,571			12,529			(952	)		-			389,147
INCOME FROM OPERATIONS		25,651			1,869			(140	)		-			27,380
OTHER EXPENSES
Interest expense		35,477			144			-			663	(k)		36,284
Loss on extinguishment of debt		9,871			-			-			-			9,871
Other expenses (income)		1,971			(29	)		(398	)(a)		-			1,544
Total other expenses		47,319			115			(398	)		663			47,699
LOSS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES		(21,668	)		1,754			258			(663	)		(20,319	)
Provision for income taxes		(523	)		-			-			-			(523	)
Equity in earnings of joint ventures		6,114						-			-			6,114
NET LOSS		(16,077	)		1,754			258			(663	)		(14,728	)
Net income attributable to noncontrolling interests		75			213			-			-			288
NET LOSS ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(16,152	)	$	1,541		$	258		$	(663	)	$	(15,016	)
BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(0.44	)										$	(0.41	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		36,755,781												36,755,781

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

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RADNET, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(IN THOUSANDS EXCEPT SHARE DATA)

For the year ended December 31, 2009

							Elimination of
							excluded			Pro forma			Pro forma
	RadNet			Progressive			imaging centers			adjustments			combined
NET REVENUE	$	524,368		$	18,448		$	(1,693	)(a)	$	-		$	541,122
OPERATING EXPENSES
Cost of operations		397,753			13,680			(1,136	)(a)		-			410,298
Depreciation and amortization		53,800			1,320			(10	)(a)					55,110
Provision for bad debts		32,704			1,246			(63	)(a)		-			33,886
Loss on sale of equipment		523			-			-			-			523
Severance costs		731			-			-			-			731
Total operating expenses		485,511			16,246			(1,209	)		-			500,548
INCOME FROM OPERATIONS		38,857			2,202			(485	)		-			40,575
OTHER EXPENSES
Interest expense		49,193			225			-			857	(k)		50,275
Gain on bargain purchase		(1,387	)		-			-			-			(1,387	)
Other expenses (income)		1,239			(33	)		114	(a)		-			1,319
Total other expenses		49,045			192			114			857			50,208
LOSS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES		(10,188	)		2,010			(598	)		(857	)		(9,633	)
Provision for income taxes		(443	)		-			-			-			(443	)
Equity in earnings of joint ventures		8,456						-			-			8,456
NET INCOME (LOSS)		(2,175	)		2,010			(598	)		(857	)		(1,620	)
Net income attributable to noncontrolling interests		92			361			-			-			453
NET INCOME (LOSS) ATTRIBUTABLE TO
RADNET, INC.COMMON STOCKHOLDERS	$	(2,267	)	$	1,649		$	(598	)	$	(857	)	$	(2,073	)
BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO RADNET, INC.
COMMON STOCKHOLDERS	$	(0.06	)										$	(0.06	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		36,047,033												36,047,033

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

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RadNet, Inc.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

Note 1.                      Basis of Presentation

The unaudited pro forma condensed consolidated statement of operations of RadNet, Inc. (“RadNet”) for the nine months ended September 30, 2010 and the year ended December 31, 2009 give effect to the acquisition of five imaging centers in Northern New Jersey and a 50% equity interest in a sixth center from Progressive Health, LLC and certain affiliates and related entities (“Progressive”) as if the acquisition had been completed on January 1, 2009. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2010 gives effect to the acquisition as if it had occurred on September 30, 2010.

The unaudited pro forma condensed consolidated statement of operations and unaudited pro forma condensed consolidated balance sheet were derived by adjusting RadNet’s historical financial statements for the acquisition of Progressive.  Certain imaging centers were excluded from the Progressive acquisition, thus the net assets and activities of the excluded centers have been eliminated in the pro forma condensed consolidated financial statements.  The unaudited pro forma condensed consolidated balance sheet and unaudited pro forma condensed consolidated statement of operations are provided for informational purposes only and should not be construed to be indicative of RadNet’s financial position or results of operations had the transaction been consummated on the dates indicated and do not project RadNet’s financial position or results of operations for any future period or date.

The unaudited pro forma condensed consolidated balance sheet and unaudited condensed consolidated statement of operations and accompanying notes should be read in conjunction with RadNet’s historical financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operation” contained in RadNet’s Annual Report on Form 10-K for the year ended December 31, 2009 and Quarterly Report on Form 10-Q for the period ended September 30, 2010, as well as Progressive’s financial statements presented herein.

Note 2.                      Preliminary Purchase Price Allocation

The unaudited pro forma condensed consolidated financial statements reflect a purchase price of $17,150,000 in cash.

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

Tangible assets	$	4,429
Goodwill		14,560
Total assets acquired		18,989
Liabilities assumed		(1,839	)
Net assets acquired	$	17,150

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired.

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Note 3.                      Pro Forma Adjustments

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

(a) Represents the financial statements of those imaging centers not acquired by RadNet from Progressive.

(b) Represents $17,150,000 used to cover the total purchase price, and the elimination of $1,044,341 of cash from the acquired imaging centers retained by Progressive.

(c) Represents accounts receivable from the acquired imaging centers retained by Progressive.

(d) Represents certain other receivables from the acquired imaging centers retained by Progressive.

(e) Represents goodwill resulting from the transaction.

(f) Represents certain other assets from the acquired imaging centers retained by Progressive.

(g) Represents certain vendor obligations settled at acquisition.

(h) Represents certain obligations of the acquired imaging center group payable to other groups owned by Progressive that were settled at acquisition.

(i) Represents certain capital lease obligations of the acquired imaging centers settled at acquisition.

(j) Represents the elimination of the acquired imaging centers retained earnings upon acquisition.

(k) Represents the interest expense incurred by RadNet to fund the acquisition.

(l) Represents the elimination of certain non-controlling interests settled at acquisition.

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