LMRI 10-K & 10-Q changes, risk factors and insider trading

We are one of the largest national providers of diagnostic imaging services. Our platform is integrated, scalable and has a proven track record of creating value for our stakeholders. As of MarchJune 31,30, 2026, we operated the second largest outpatient imaging center footprint in the United States. It spans 189192 centers in 1314 states and includes eightnine joint venture partnerships with health systems.

Our primary source of income is fees paid by patients, insurance companies or other payors in exchange for our centers providing imaging studies and radiologists’ interpretations of those studies. We also earn revenue from payors when our radiologists interpret an imaging study performed in another facility, often the imaging department of a hospital. In addition, we earn a monthly fee from centers that we operate, but do not consolidate for accounting purposes, in exchange for managing their operations. We also earn fees from third-party hospitals for providing radiology and administrative support. How these income streams affect our consolidated financial statements depends on whether we consolidate the center generating the fee for accounting purposes. Because our ownership levels and rights vary from center to center, as of MarchJune 31,30, 2026, we consolidated 103104 of the 189192 centers that we operated and accounted for our investments in the remaining 8688 centers under the equity method of accounting. As of MarchJune 31,30, 2025, we consolidated 99 of the 182184 centers that we operated and accounted for our investments in the remaining 8385 centers under the equity method of accounting.

Demand for advanced imaging in our geographies. Our operations and profitability depend in part on our ability to increase the amount of patient volume from advanced imaging scans. According to industry estimates, demand for advanced imaging continues to grow and outpaces routine imaging growth. MRI and CT accounted for 31% of our consolidated imaging volumes and 37% of our system-wide imaging volumes, and 52% of our consolidated revenue and 63% of our system-wide revenues during the three months ended March 31, 2026. MRI and CT accounted for 29% of our consolidated imaging volumes and 36% of our system-wide imaging volumes, and 52% of our consolidated revenue and 62% of our system-wide revenue during the three months ended March 31, 2025. We believe that our centers, equipment, personnel and strategy will enable advanced imaging to continue to increase as a percentage of our imaging volumes and revenues over time. The following tables show our consolidated and system-wide outpatient MRI and CT volumes as a percentage of our total outpatient consolidated imaging revenue and total outpatient system-wide imaging revenue for the periods indicated:

While each of these factors presentpresents significant opportunities for us, they are not the only factors that may adversely affect our revenues and they also pose significant risks and challenges that we must address. See the section titled “Risk Factors” for more information.

We operate outpatient imaging centers, some of which we wholly own and others that we own in partnership with health system joint ventures. As of MarchJune 31,30, 2026, we managed 8385 of our 8688 outpatient imaging centers owned by joint ventures on a day-to-day basis through management services contracts. As of MarchJune 31,30, 2025, we managed 8082 of our 8385 outpatient imaging centers owned by joint ventures on a day-to-day basis through management services contracts. Our role as an owner and day-to-day manager provides us with significant influence over those centers’ operations. This influence does not represent control of the center, so we account for our investment in each such center under the equity method of accounting as an unconsolidated affiliate. We controlled the other 103104 and 99 centers at MarchJune 31,30, 2026 and 2025, respectively, and accounted for these investments as consolidated subsidiaries. For consolidated subsidiaries, our condensed consolidated statements of operations and comprehensive income (loss) reflect, within each revenue and expense line item, 100% of the revenues and expenses of each such subsidiary, after the elimination of intercompany amounts. Our condensed consolidated statements of operations and comprehensive income (loss) reflect our earnings from our unconsolidated affiliates in only two line items:

Our business model of partnering with health system joint venture partners results in our accounting for 8688 (as of MarchJune 31,30, 2026) and 8385 (as of MarchJune 31,30, 2025) of our outpatient imaging centers under the equity method of accounting rather than consolidating their results.

As described above, our earnings from an outpatient imaging center, whether consolidated or accounted for using the equity method of accounting, are driven by the same factors: the center’s underlying profits and revenue and our ownership percentage in that center. Accordingly, to assess our overall operating results, we often utilize system-wide and same-center measures, which include both consolidated centers and unconsolidated affiliates. Our consolidated revenue growth and system-wide revenue growth were 3.1%5.1% and 4.0%,6.0%, respectively, between the three months ended MarchJune 31,30, 2026 and the three months ended MarchJune 31,30, 2025. Our system-wide revenue includes all centers and physician practices that we operate; our GAAP revenue (or consolidated revenue) only includes consolidated centers, which represented 54% of our centers as of both MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, and all physician practices that we operate.

Net patient service revenue increased by $4.8$5.6 million, or 2.6%,2.9%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase was largely due to an increase in consolidated same-center revenues of 2.8%,2.2%, which was driven by volume growth of 0.5%1.6% and an increase in net revenue per scan of 2.3%.0.6%. Net patient service revenue also increased $2.5$1.5 million related to ten11 consolidated de novo centers added during 20242024, 2025 and 2025.2026.

Management fee and other revenue increased by $0.4$3.9 million, or 6.7%,80.6%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to an increase in stipend revenue.revenue due to new and renegotiated contracts.

Management fee and other revenue, related party increased by $2.2$3.3 million, or 4.6%,6.9%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to increased pass-through costs at BTDIthe joint ventures we manage related to information technology and leased employees and growth in the business.

Cost of operations, excluding depreciation and amortization, is comprised of costs incurred to operate outpatient imaging centers and physician practices, primarily salaries, wages and benefits for clinicians and direct patient support personnel, occupancy costs, such as rent and utilities, medical supplies and other operating expenses. Cost of operations, excluding depreciation and amortization increased by $9.4$13.0 million, or 4.5%,6.1%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, driven by increased volumes. The increase was primarily due to a $5.1$3.5 million increase in salaries and wages, a $1.0$1.3 million increase in medical supplies and a $3.0$5.1 million increase in physician compensation.

General and administrative expenses include salaries, wages and benefits of executive leadership, finance and accounting, human resources, legal, information technology, professional fees, transaction costs, severance and other overhead and corporate expenses. General and administrative expenses increased by $2.8$5.7 million, or 16.3%,30.5%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase is primarily due to an increase in stock-based compensation as a result of resetting some of our legacy stock-based compensation plans after our IPO, offset by reductions in transaction related costs.IPO. We expect general and administrative expenses to increase in the near term as a result of operating as a public company. That increase in expenses will be associated with compliance with the rules and regulations of the SEC, and an increase in legal, audit, insurance, investor relations, professional services and other administrative expenses.

Depreciation and amortization expense consists of depreciation of property and equipment assets (medical office equipment, computer and software, and furniture and fixtures) and amortization of acquired intangible assets, such as facility contracts and trade names. Depreciation and amortization expense increased by $0.9$0.8 million, or 9.6%,8.7%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase is primarily driven by additions to property and equipment during the period.

Other (income) expenses

Interest expense decreased by $13.5$13.9 million, or 45.3%,46.1%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, primarily due to our refinancing of our Existing Credit Agreement (as further described below) in December 2025.

We recorded an income tax provision of $1.4$3.0 million and $3.4$4.8 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Despite having a pretax loss in 2025, the impact of non-deductible stock-based compensation and the increase in the valuation allowance recorded against certain of our deferred tax assets resulted in tax expense for the period. The primary items impacting tax expense in 2026 are non-deductible compensation and the change in the valuation allowance.

Our outpatient imaging center segment generates revenue by performing imaging studies and providing radiologists’ interpretations of those studies. The following tabletables showsshow our outpatient imaging center segment’s revenue and Adjusted EBITDA for the periods indicated (in thousands):

The following table shows the outpatient imaging center segment’s system-wide same-center growth rates for the following metrics for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025 and six months ended June 30, 2026, as compared to the six months ended June 30, 2025:

Our outpatient imaging center segment’s operating results for the three months ended MarchJune 31,30, 2026 and six months ended June 30, 2026 reflect a 2.8%4.4% and 3.6% system-wide same-center revenue growth.growth, respectively. The segment’s consolidated GAAP revenue growth for the three months ended MarchJune 31,30, 2026 and six months ended June 30, 2026 was 3.9%.4.8% and 4.4%, respectively.

Net patient service revenue for the outpatient imaging center segment increased by $4.7$4.8 million, or 3.5%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025, primarily driven by an increase in consolidated same-center revenues of 2.8%,2.2%, which was comprised of volume growth of 0.5%1.6% and an increase in net revenue per scan of 2.3%.0.6%. Net patient service revenue for the outpatient imaging center segment also increased $2.5$1.5 million related to ten11 consolidated de novo centers added during 20242024, 2025 and 2025.2026.

Management fee and other revenue for the outpatient imaging center segment increased by $2.4$4.2 million, or 5.1%,8.6%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase was primarily due to increased pass-through costs at BTDI related to information technology and leased employees and improved financial performance. Our management fees are usually quantified as a percentage of the unconsolidated affiliate’s net revenue.

As further discussed below, Adjusted EBITDA removes non-cash and non-recurring charges that occur in the affected period and provides a basis for management to measure our core financial performance against other periods. Adjusted EBITDA for the outpatient imaging center segment decreased by $3.4$4.1 million, or 8.2%,4.6%, for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. The decrease in Adjusted EBITDA was driven by an increase in salaries and wages and medical supplies.

The following table shows the professional services segment’s consolidated same-practice growth rates for the following metrics for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025 and six months ended June 30, 2026, as compared to the six months ended June 30, 2025:

Our professional services segment’s operating results for the three months ended MarchJune 31,30, 2026, reflectreflects ana 4.4%5.1% consolidated professional same-practice revenue growth. The segment’s consolidated GAAP revenue growth for the three months ended MarchJune 31,30, 2026 was 3.4%.8.9%.

Net patient service revenue for the professional services segment increased by $2.2$2.9 million, or 3.6%,4.7%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025 due to year-over-year increase in volumes.

AsNet furtherpatient discussedservice below, Adjusted EBITDA removes non-cash and non-recurring charges that occur in the affected period and provides a basis for management to measure our core financial performance against other periods. Adjusted EBITDArevenue for the professional services segment increased by $3.6$5.1 million, or 39.8%,4.2%, for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025.2025 due to year-over-year increase in volumes.

The following tables summarize our key operating metrics for both the three months ended Marchand 31,the six months ended June 30, 2026, as compared to the three months ended Marchand 31,six months ended June 30, 2025:

Adjusted EBITDA removes non-cash and non-recurring charges that occur in the affected period and provides a basis for measuring our core financial performance against other periods. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted to exclude loss or gain on the disposal of property and equipment, other income or losses, loss on debt extinguishment,extinguishment and modification, gain on sale of outpatient imaging centers and non-cash equitystock compensation. Adjusted EBITDA includes equity in earnings of unconsolidated affiliates (and adds back our proportional share of depreciation and amortization, interest expense and losses on the disposal of assets at unconsolidated affiliates) and is adjusted for non-cash or non-recurring events that take place during the period that, in our judgement,judgment, significantly impact the period-over-period assessment of performance and operating results.

Includes third-party consulting, implementation, and integration expenses incurred as part of our strategic transformation and optimization initiatives, specifically related to the deployment of a new technology system and labor model,system, as well as the development, customization, and integration of a new enterprise resource planning system. For the three months ended MarchJune 31,30, 2026 and 2025, $0.7$2.7 million and $0.4$0.6 million of these costs, respectively, are included in general and administrative expense in our condensed consolidated statements of operations and comprehensive income (loss). For the three months ended March2025, 31,$0.4 million of these costs are included in cost of operations, excluding depreciation and amortization expense in our condensed consolidated statements of operations and comprehensive income (loss). For the six months ended June 30, 2026 and 2025, $3.4 million and $1.1 million of these costs, respectively, are included in general and administrative expense in our condensed consolidated statements of operations and comprehensive income (loss). For the six months ended June 30, 2026 and 2025, $0.1 million and $0.5$0.8 million of these costs, respectively, are included in cost of operations, excluding depreciation and amortization expense in our condensed consolidated statements of operations and comprehensive income (loss).

Includes costs for third party non-recurring IPO costs, buy-side and sell-side due diligence activities to evaluate and execute potential mergers and acquisitions, integrate acquired businesses and one-time employee retention bonuses related to potential mergers and acquisitions. For the three months ended MarchJune 31,30, 2026 and 2025, $2.6$0.7 million and $3.5$3.8 million of these costs, respectively, are included in general and administrative expense in our condensed consolidated statements of operations and comprehensive income (loss). For the three months ended MarchJune 31,30, 2025, $0.1 million of these costs are included in cost of operations, excluding depreciation and amortization expense in our condensed consolidated statements of operations and comprehensive income (loss). For the six months ended June 30, 2026 and 2025, $3.3 million and $7.2 million of these costs, respectively, are included in general and administrative expense in our condensed consolidated statements of operations and comprehensive income (loss). For the six months ended June 30, 2025, $0.3 million of these costs was included in cost of operations, excluding depreciation and amortization expense in our condensed consolidated statements of operations and comprehensive income (loss).

We finance our operations through cash provided by operating activities along with long term debt, including senior secured credit facilities and equipment promissory notes. Our principal uses of cash and cash equivalents in recent periods have been to fund our operations. During the threesix months ended MarchJune 31,30, 2026, we earned net income of $1.7$4.5 million and net cash provided by operations was $2.9$35.7 million. During the threesix months ended MarchJune 31,30, 2025, we incurred a net loss of $7.7$14.9 million and net cash used in operations was $14.0$11.9 million. We expect our existing capital resources, anticipated cash from operations and our borrowing capacity under the Amended Revolving Credit Facility will be sufficient to sustain our operations for the next twelve months and the foreseeable future.