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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt">As filed with the
Securities and Exchange Commission on August&nbsp;6, 2004.



<P align="right" style="font-size: 10pt">Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



<HR size="4" noshade color="#000000" style="margin-top: -5px">
<HR size="1" noshade color="#000000" style="margin-top: -10px">





<P align="center" style="font-size: 14pt">UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION

<DIV align="center" style="font-size: 12pt">Washington, D.C. 20549
</DIV>

<P align="center" style="font-size: 18pt"><b>FORM S-8</b>


<P align="center" style="font-size: 10pt">REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933


<P align="center" style="font-size: 24pt"><B>Radiologix, Inc.</B>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="65%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75-2648089</B></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">(State or other jurisdiction of
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(I.R.S. Employer Identification No.)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top">incorporation or organization)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="55%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>3600 JP Morgan Chase Tower</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>2200 Ross Avenue</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><B>Dallas, Texas</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>75201-2776</B></TD>
</TR>

<TR valign="bottom">
    <TD align="center" nowrap valign="top">(Address of Principal Executive Offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">(Zip Code)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><HR align="center" size="1" noshade width="40%">



<P align="center" style="font-size: 10pt"><B>RADIOLOGIX, INC.<BR>
2004 LONG-TERM INCENTIVE COMPENSATION PLAN</B><BR>
(Full title of the Plan)



<P align="center" style="font-size: 10pt"><HR align="center" size="1" noshade width="40%">



<P align="center" style="font-size: 10pt"><B>Michael L. Silhol<BR>
General Counsel<BR>
3600 JP Morgan Chase Tower<BR>
2200 Ross Avenue<BR>
Dallas, Texas 75201-2776</B><BR>
(Name and address of agent for service)



<P align="center" style="font-size: 10pt"><B>(214)&nbsp;303-2776</B><BR>
(Telephone number, including area code, of agent for service)



<P align="center" style="font-size: 10pt"><HR align="center" size="1" noshade width="40%">



<P align="center" style="font-size: 10pt">CALCULATION OF REGISTRATION FEE


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="25%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Title of Each Class</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>of Securities</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed Maximum</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>To Be Registered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>To Be Registered<SUP>(1)</SUP></B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Price Per Unit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Aggregate Offering Price</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Registration Fee</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Common Stock
<BR>
$.0001 par value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$4.05</TD>
    <TD align="left"><SUP>(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">12,150,000</TD>
    <TD nowrap><SUP>(2)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,539</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Common Stock
<BR>
$.0001 par value</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">205,833</TD>
    <TD nowrap><SUP>(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$2.60</TD>
    <TD align="left"><SUP>(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">$</TD>
    <TD align="right">535,165</TD>
    <TD nowrap><SUP>(3)</SUP></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">68</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:20px; text-indent:-10px">TOTAL:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,205,833</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$6.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">12,685,765</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">1,607</TD>
    <TD>&nbsp;</TD>
</TR>

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</TABLE>
</DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount to be registered includes an indeterminate number of shares
that may be issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions in accordance with Rule&nbsp;416 promulgated
under the Securities Act of 1933.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The offering price per share, the aggregate offering price and the
registration fee are calculated in accordance with paragraphs (c)&nbsp;and
(h)(1) of Rule&nbsp;457 promulgated under the Securities Act of 1933 based on
the average of the high and low sale prices for the Common Stock reported
on the American Stock Exchange on August 5, 2004. ($4.05 per share).</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Represents shares issuable upon the exercise of outstanding stock options
previously granted in private placements at the weighted average exercise
price for the outstanding options pursuant to Rule&nbsp;457(h)(1).</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities
Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. <FONT face="Wingdings">&#120;</FONT></TD>
</TR>

</TABLE>


<P>
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<HR size="4" noshade color="#000000" style="margin-top: -10px">













<P align="center" style="font-size: 10pt">
</DIV>


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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>RADIOLOGIX, INC.<BR>
3600 JP Morgan Chase Tower<BR>
2200 Ross Avenue<BR>
Dallas, TX 75201-2776<BR>
214.303.2776</B>



<P align="center" style="font-size: 10pt"><B>PROSPECTUS</B>



<P align="center" style="font-size: 10pt"><B>205,833 Shares of Common Stock<BR>
$.0001 Par Value</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to shares of common stock of Radiologix, Inc. that
are currently not outstanding, but may be issued upon exercise of employee
stock options held by the selling stockholders named in this prospectus and
sold from time to time by the selling stockholders. We will not receive any
proceeds from the sale of these shares.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may offer their shares from time to time in open
market transactions on the American Stock Exchange or in private transactions,
at prevailing market prices or at privately negotiated prices. The selling
stockholders may sell shares to or through broker-dealers. These
broker-dealers, if used, may receive discounts, concessions or commissions from
the selling stockholders or from the purchaser of the shares. The selling
stockholders will receive the purchase price of the shares that they sell less
any such discounts, concessions or commissions. The selling stockholders will
be responsible for paying any discounts, concessions or commissions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is traded on the American Stock Exchange under the symbol
&#147;RGX.&#148; On August&nbsp;5, 2004, the sale price for one share of our common stock as
last reported on the American Stock Exchange was $3.99 per share.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>You should read the Section entitled &#147;Risk Factors&#148; beginning on page 2
for a discussion of certain factors that you should consider before buying our
common stock.</B>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.</B>


<P align="center" style="font-size: 10pt">The date of this prospectus is August&nbsp;6, 2004.



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
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</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#101">RISK FACTORS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#102">ABOUT
OUR COMPANY</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#103">A
WARNING ABOUT FORWARD-LOOKING STATEMENTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#104">USE OF PROCEEDS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#105">SELLING STOCKHOLDERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#106">PLAN OF DISTRIBUTION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#107">LEGAL MATTERS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#108">EXPERTS</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#109">WHERE YOU CAN FIND MORE INFORMATION</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#110">INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d17381exv5w1.htm">Opinion/Consent of Michael L. Silhol</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d17381exv23w1.htm">Consent of Ernst & Young LLP</A></FONT></TD></TR>
</TABLE>
</DIV>


<DIV align="left">
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</DIV>
<DIV align="left">
<A name="101"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>RISK FACTORS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before you invest in our common stock, you should consider the information
in this prospectus and the additional information in our other reports on file
with the Securities and Exchange Commission and in the other documents

incorporated by reference into this prospectus. See &#147;Where You Can Find More
Information&#148; and &#147;Incorporation of Certain Documents by Reference&#148; on page 21.


<P align="left" style="font-size: 10pt"><B>Risks Related to Our Company and Our Industry</B>



<P align="left" style="font-size: 10pt"><B><I>Our revenue is dependent on referrals.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We generate most of our revenue from fees charged for the use of our
diagnostic imaging equipment at our centers. This revenue depends on referrals
from third parties, many of which are made by physicians who have no
contractual relationship with us. We also generate revenue from service fees
that we receive from the contracted radiology practices. If a sufficiently
large number of physicians discontinues referring patients to us, our procedure
volume could decrease, which would reduce our revenue and operating margins.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Further, commercial third-party payors have implemented programs to
control costs that could limit the ability of physicians to refer patients to
us. For example, prepaid healthcare plans, such as health maintenance
organizations, in certain instances provide diagnostic imaging services
directly and contract directly with providers and require their enrollees to
obtain these services from only these providers. Some insurance companies and
self-insured employers also limit these services to contracted providers. These
&#147;closed panel&#148; systems are now common in the managed care environment. Other
systems create an economic disincentive for referrals to providers outside of
the system&#146;s designated panel of providers. We may not be able to compete
successfully for managed care contracts against entities with greater resources
within a market area.

<P align="left" style="font-size: 10pt"><B><I>Changes in third-party payment rates or methods for diagnostic imaging services
could create downward pricing pressure, which would result in a decline in our
revenue and harm our financial position.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our revenue is derived through our ownership, operation and management of
diagnostic imaging centers and from service fees paid to us by contracted
radiology practices. Substantially all of the revenue of our diagnostic imaging
centers and the contracted radiology practices is currently derived from commercial third-party payors,
government sponsored healthcare programs (principally, Medicare and Medicaid)
and private and other payors. For the


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">first six months of 2004, revenue
generated at our diagnostic imaging centers consisted of 64% from commercial
third-party payors, 9% from Medicare and Medicaid, and 27% from private and
other payors.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rates paid by commercial third-party payors are based on established
physician and hospital charges and are generally higher than Medicare payment
rates. Any decrease in the relative number of patients covered by commercial
third-party payors could decrease our revenue.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any change in the rates of or conditions for reimbursement from commercial
third-party payors, Medicare or Medicaid could substantially reduce the amounts
reimbursed to us or our contracted radiology practices for services provided.
These reductions could have a significant adverse effect on our revenue and
financial results by creating downward pricing pressure.

<P align="left" style="font-size: 10pt"><B><I>We could be harmed if the contracted radiology practices terminate their
agreements with us or lose a significant number of radiologists.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our diagnostic imaging services include a professional component that must
be provided by radiologists who are not directly employed by us. We do not
control the radiologists who perform professional services for us. Instead,
these radiologists are employed by the contracted radiology practices that
maintain agreements with us. These agreements typically have terms of between
10 and 40&nbsp;years, but may be terminated by either party under certain limited
conditions. Depending on the termination event, the radiology practice may have
the right to require us to sell, assign and transfer to it, the assets and
related liabilities and obligations associated with the professional and
technical radiology services provided by the radiology practice immediately
prior to the termination. The termination or material modification of any of
them could reduce our revenue.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a significant number of radiologists terminate their relationships with
the contracted radiology practices and the radiology practices cannot recruit
sufficient qualified radiologists to fulfill practice obligations under our
agreements with them, our ability to maximize the use of our diagnostic imaging
centers could be adversely affected, thereby decreasing our revenue.
Competition in recruiting radiologists and a shortage of qualified radiologists
has made it difficult for some contracted radiology practices to maintain
adequate levels of radiologists. Neither we nor the contracted radiology
practices maintain insurance on the lives of any affiliated physicians.

<P align="left" style="font-size: 10pt"><B><I>We may not be able to successfully complete our market development plans.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to increase our presence in existing markets through
acquisitions of centers, developing de novo centers and adding additional
equipment at existing centers, establishing additional joint venture and
outsourcing relationships and selectively entering into contractual
relationships with high-quality, profitable radiology practices. We may not be
able to expand either within our existing markets or in new markets. In
addition, any expansion may not be beneficial to our overall strategy, and any
such expansion may not ultimately produce returns that justify our investment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to expand is dependent upon many factors, including our
ability to:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>identify attractive and willing candidates for acquisitions, joint
ventures or outsourcing relationships;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adapt our structure to comply with federal and state legal
requirements affecting our arrangements with contracted radiology
practices, including state prohibitions on fee-splitting, corporate
practice of medicine and self-referrals;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obtain regulatory approvals and certificates of need, where necessary,
and comply with licensing and certification requirements applicable to
our diagnostic imaging centers, the contracted radiology practices and
the physicians associated with the contracted radiology practices;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>recruit a sufficient number of qualified radiology technologists;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expand our infrastructure and management; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>obtain adequate financing.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to expand is also dependent on our ability to compete for
opportunities. We may not be able to compete effectively for the acquisition of
diagnostic imaging centers, joint venture opportunities or other outsourcing
relationships. Our competitors may have better established operating histories
and greater resources than we do. Competitors may make it more difficult to
complete acquisitions or joint ventures on terms beneficial to us.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions involve a number of special risks, including the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>possible adverse effects on our operating results;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>diversion of management&#146;s attention and resources;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>failure to retain key personnel;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in integrating new operations into our existing management infrastructure;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>amortization or write-offs of acquired intangible assets; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks associated with unanticipated events or liabilities.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additionally, although we will continue to structure our operations in an
effort to comply with applicable antitrust laws, federal or state governmental
authorities may view us as being dominant in a particular market and,
therefore, cause us to divest ourselves of relationships or assets.

<P align="left" style="font-size: 10pt"><B><I>We and the contracted radiology practices may become subject to burdensome
lawsuits.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may be subject to professional liability claims, including, without
limitation, for improper use or malfunction of our diagnostic imaging
equipment. Our operations, as well as the services we provide on behalf of the
contracted radiology practices, also may be subject to lawsuits for
inappropriate use or disclosure of individually-identifiable patient health
information. We maintain insurance policies with coverages that we believe are
appropriate in light of the risks attendant to our business and consistent with
industry practice. We also require the contracted radiology practices to
maintain professional liability insurance consistent with industry practice.
However, adequate liability insurance may not be available to us and the
contracted radiology practices in the future at acceptable costs or at all.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Providing medical services entails the risk of professional malpractice
and other similar claims. The physicians employed by the contracted radiology
practices are from time to time subject to malpractice claims. We structure our
relationships with the practices under our agreements with them in a manner
that we believe does not constitute the practice of medicine by us or subject
us to professional malpractice claims for acts or
omissions of physicians in the contracted radiology practices. Nevertheless,
claims, suits or complaints relating to services


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<P align="left" style="font-size: 10pt">provided by the contracted
radiology practices may be asserted against us in the future, including
malpractice.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any claim made against us not fully covered by insurance could be costly
to defend against, result in a substantial damage award against us and divert
the attention of our management from our operations, which could have an
adverse effect on our financial performance. In addition, claims might
adversely affect our business or reputation.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have assumed substantially all of the obligations of
some of the operations that we have acquired. Therefore, claims may be asserted
against us for events that occurred prior to these acquisitions. In connection
with our acquisitions, the sellers of the operations that we have acquired have
agreed to indemnify us for certain claims. However, we may not be able to
collect payment under these indemnity agreements, which could affect us
adversely.

<P align="left" style="font-size: 10pt"><B><I>Most of our imaging modalities require the utilization of radiation, and
certain imaging modalities utilize radioactive materials. These operations
generate regulated waste and could subject us to regulation, related costs and
delays and potential liabilities for injuries or violations of environmental,
health and safety laws.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of our imaging modalities utilize radiation, and certain imaging
modalities utilize radioactive material. These operations generate medical and
other regulated wastes. Storage, use and disposal of these materials and waste
products present the risk of accidental environmental contamination and
physical injury. We are subject to federal, state and local regulations
governing storage, handling and disposal of these materials. We cannot
completely eliminate the risk of accidental contamination or injury from these
hazardous materials. In the event of an accident, we would be held liable for
any resulting damages, and any liability could exceed the limits of or fall
outside the coverage of our insurance. We may not be able to maintain insurance
on acceptable terms, or at all. We could incur significant costs and the
diversion of our management&#146;s attention to comply with current or future
environmental, health and safety laws and regulations.

<P align="left" style="font-size: 10pt"><B><I>We may experience competition from other diagnostic imaging companies. This
competition could adversely affect our revenue and our business.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market for diagnostic imaging services is competitive. We compete
principally on the basis of our reputation for providing multiple modalities,
our conveniently located centers and our cost-effective, high-quality
diagnostic imaging services. We compete locally with groups of radiologists and
some non-radiologist physician practices, established hospitals, clinics and
certain other independent organizations that own and operate imaging equipment.
Our major national competitors include Alliance Imaging, Inc., InSight Health
Services Corp., Medical Resources, Inc., and Syncor International Corporation.
Some of our local or national competitors that provide diagnostic imaging
services may now or in the future have access to greater financial resources
than we do and may have access to newer, more advanced equipment.

<P align="left" style="font-size: 10pt"><B><I>Technological change in our industry could reduce the demand for our services
and require us to incur significant costs to upgrade our equipment.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technological change in the diagnostic imaging industry has been gradual.
In the future, however, the development of new technologies or refinements
of existing modalities may make our existing equipment technologically or
economically obsolete, or cause a reduction in the


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<P align="left" style="font-size: 10pt">value of, or reduce the need for, our services. Diagnostic imaging equipment is
currently manufactured by numerous companies. Competition among manufacturers
for a greater share of the diagnostic imaging equipment market may result in
technological advances in the speed and imaging capacity of new equipment.
Consequently, the obsolescence of our equipment may be accelerated. We may not
have the financial ability to acquire the new or improved equipment.


<P align="left" style="font-size: 10pt"><B><I>A failure to meet our capital expenditure requirements could adversely affect
our business.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We operate in a capital intensive, high fixed-cost industry that requires
significant amounts of capital to fund operations, particularly the initial
start-up and development expenses of new diagnostic imaging centers and the
acquisition of additional centers and new diagnostic imaging equipment. We
incur capital expenditures to, among other things:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>upgrade and replace existing equipment;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchase new diagnostic imaging equipment; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>expand within our existing markets and enter new markets.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent we are unable to generate sufficient cash from our
operations, funds are not available under our credit facility or we are unable
to structure or obtain operating leases, we may be unable to meet our capital
expenditure requirements. Furthermore, we may not be able to raise any
necessary additional funds through bank financing or the issuance of equity or
debt securities on terms acceptable to us, if at all.

<P align="left" style="font-size: 10pt"><B><I>Our success depends in part on our key personnel and we may not be able to
retain sufficient qualified personnel.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our success depends in part on our ability to attract and retain qualified
senior and executive management, managerial and technical personnel.
Competition in recruiting these personnel may make it difficult for us to
continue our growth and success. The loss of their services or our inability in
the future to attract and retain management and other key personnel could
hinder the implementation of our business strategy. We do not maintain key
person insurance for any of our executive officers. Recently, there has been a
shortage in certain of our markets of qualified radiology technologists, the
personnel who operate our equipment. If we are unable to recruit and retain a
sufficient number of qualified technologists, we will be unable to operate our
centers at maximum capacity or we will be forced to staff our diagnostic
imaging centers with temporary personnel, thereby increasing our operating
costs and reducing our operating margin profitability.

<P align="left" style="font-size: 10pt"><B><I>Our inability to enforce non-compete agreements with the radiologists may
increase competition.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of the contracted radiology practices under our comprehensive
services model has entered into agreements with its physician shareholders and
full-time employed radiologists that generally prohibit those shareholders and
radiologists from competing for a period of two years within defined geographic
regions after they cease to be owners or employees, as applicable. In most
states, a covenant not to compete will be enforced only:


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>to the extent it is necessary to protect a legitimate business interest of the party
seeking enforcement;</TD>
</TR>

</TABLE>

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<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if it does not unreasonably restrain the party against whom enforcement is sought; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>if it is not contrary to public interest.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enforceability of a non-compete covenant is determined by a court based on
all of the facts and circumstances of the specific case at the time enforcement
is sought. For this reason, it is not possible to predict whether, or to what
extent, a court will enforce the contracted radiology practices&#146; covenants. The
inability of the contracted radiology practices or us to enforce radiologists&#146;
non-compete covenants could result in increased competition from individuals
who are knowledgeable about our business strategies and operations.

<P align="left" style="font-size: 10pt"><B><I>It is difficult to estimate our uncollectible accounts receivable and
contractual allowances for billed charges, which may impact our earnings.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the complex nature of billing for healthcare services, it is
difficult for us to estimate our uncollectible accounts receivable and our
contractual allowances for billed charges. If we have to revise our estimates
and our existing reserves are not adequate, this may impact our earnings.

<P align="left" style="font-size: 10pt"><B><I>Our ability to maximize the use of our diagnostic imaging equipment may be
subject to seasonality.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the summer months of 2002, our average daily diagnostic imaging
procedures decreased, which adversely affected our service fee revenues during
those months. The decrease in average daily diagnostic imaging procedures may
have resulted from referring physicians or their patients taking vacation. We
cannot give any assurance that our future procedure volume and service fee
revenues will not be adversely affected by similar circumstances during the
summer months or other traditional vacation times of the year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, harsh weather conditions on the east coast during January and
February and a hurricane in September adversely affected our service fee
revenues during those months. We cannot give any assurance that our future
procedure volume and service fee revenues will not be adversely affected by
similar circumstances during the year.

<P align="left" style="font-size: 10pt"><B><I>Managed care contracts and capitated fee arrangements could reduce our
operating margins.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the six months ended June&nbsp;30, 2004, approximately 95% of revenue
generated at our diagnostic imaging centers was derived from payments made on a
fee-for-service basis and approximately 5% was derived from capitated
arrangements. Under capitated or other risk-sharing arrangements, the
healthcare provider typically is paid a pre-determined amount per-patient
per-month from the payor in exchange for providing all necessary covered
services to patients covered under the arrangement. These contracts pass much
of the financial risk of providing outpatient diagnostic imaging services,
including the risk of over-use, from the payor to the provider. Our success
will depend in part on our ability to negotiate effectively, on behalf of the
contracted radiology practices and the diagnostic imaging centers that we own,
operate or manage, contracts with HMOs, employer groups and other third-party
payors for services to be provided on a risk-sharing or capitated basis by some
or all of the radiology practices and/or diagnostic imaging centers.
Risk-sharing arrangements result in better revenue predictability, but more
unpredictability of expenses and, consequently, profitability. We may not be
able to negotiate satisfactory arrangements on a capitated or other
risk-sharing basis, on behalf of our
diagnostic imaging centers or the contracted radiology practices. In
addition, to the extent that patients or enrollees covered by these contracts
require more frequent or extensive care than


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<P align="left" style="font-size: 10pt">anticipated, we would incur
unanticipated costs not offset by additional revenue, which would reduce
operating margins.


<P align="left" style="font-size: 10pt"><B><I>We may be unable to generate revenue when our equipment is not operational.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Timely, effective service is essential to maintaining our reputation and
high utilization rates on our imaging equipment. Our warranties and maintenance
contracts do not compensate us for loss of revenue when our systems are not
fully operational. Equipment manufacturers may not be able to perform repairs
or supply needed parts in a timely manner. Thus, if we experience more
equipment malfunctions than anticipated or if we are unable to promptly obtain
the service necessary to keep our equipment functioning effectively, our
revenue could decline and our ability to provide services would be harmed.

<P align="left" style="font-size: 10pt"><B><I>Our corporate organizational documents could discourage acquisition proposals
and make difficult a change of control.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain provisions of Radiologix&#146;s Restated Certificate of Incorporation,
as amended, Radiologix&#146;s Amended and Restated Bylaws and Delaware law could
discourage potential acquisition proposals, delay or prevent a change in
control of Radiologix and, consequently, limit the price that investors might
be willing to pay in the future for shares of our common stock. These
provisions include the inability to remove directors except for cause and our
ability to issue, without further stockholder approval, shares of preferred
stock with rights and privileges senior to the common stock. We are also
subject to Section&nbsp;203 of the Delaware General Corporation Law which, subject
to certain exceptions, prohibits a Delaware corporation from engaging in any of
a broad range of business combinations with an &#147;interested stockholder&#148; for
three years after the stockholder became an interested stockholder.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have also entered into employment agreements with our executive
officers, which contain provisions that require us to pay certain amounts to
the executives upon their termination following a change of control. These
agreements may delay or prevent a change of control of Radiologix.


<P align="left" style="font-size: 10pt"><B>Risks Relating to Government Regulation of Our Business</B>


<P align="left" style="font-size: 10pt"><B><I>State and federal anti-kickback and anti-self-referral laws may adversely
affect our income.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Various federal and state laws govern financial arrangements among
healthcare providers. The federal anti-kickback law prohibits the knowing and
willful offer, payment, solicitation or receipt of any form of remuneration in
return for, or to induce, the referral of Medicare, Medicaid, or other federal
healthcare program patients, or in return for, or to induce, the purchase,
lease or order of items or services that are covered by Medicare, Medicaid, or
other federal healthcare programs. Similarly, many state laws prohibit the
solicitation, payment or receipt of remuneration in return for, or to induce
the referral of patients in private as well as government programs. Violation
of these anti-kickback laws may result in substantial civil or criminal
penalties for individuals or entities and/or exclusion from federal or state
healthcare programs. We believe that we are operating in compliance with
applicable law and believe that our arrangements with providers would not be
found to violate the anti-kickback laws. However, these laws could be
interpreted in a manner inconsistent with our operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal law prohibiting physician self-referrals (the &#147;Stark Law&#148;)
prohibits a physician from referring Medicare or Medicaid patients to an entity
for certain &#147;designated health services&#148; if the


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<P align="left" style="font-size: 10pt">physician has a prohibited
financial relationship with that entity, unless an exception applies. Certain
radiology services are considered &#147;designated health services&#148; under the Stark
Law. Although we believe that our operations do not violate the Stark Law, our
activities may be challenged. If a challenge to our activities is successful,
it could have an adverse effect on our operations. In addition, legislation may
be enacted in the future that further addresses Medicare and Medicaid fraud and
abuse or that imposes additional requirements or burdens on us.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the states in which our diagnostic imaging centers are located have
adopted a form of anti-kickback law and almost all of those states have also
adopted a form of Stark Law. The scope of these laws and the interpretations of
them vary from state to state and are enforced by state courts and regulatory
authorities, each with broad discretion. A determination of liability under the
laws described in this risk factor could result in fines and penalties and
restrictions on our ability to operate in these jurisdictions.

<P align="left" style="font-size: 10pt"><B><I>Enforcement of federal and state privacy and associated laws may adversely
affect our income.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;How providers and their business associates use and disclose certain
healthcare information has come under increasing public sensitivity and
scrutiny. Additional risks for healthcare providers and their business
associates are posed by the new HIPAA federal standards, which set forth
guidelines concerning how individually-identifiable health information may be
used and disclosed. Historically, state law has governed confidentiality
issues. But as a result of the enactment of HIPAA, some states are considering
revisions to their existing laws and regulations. These changes may or may not
be consistent with the federal HIPAA provisions. As a provider of healthcare
services, we must conform to all applicable laws, both federal and state. We
believe that our operations are compliant with these legal standards.
Nevertheless, these laws and regulations are new and few have been interpreted
by government regulators or courts. Consequently, our interpretations and
activities may be challenged. If a challenge to our activities is successful,
it could have an adverse effect on our operations.

<P align="left" style="font-size: 10pt"><B><I>Federal False Claims Act violations could affect our participation in
government programs.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal False Claims Act provides, in part, that the federal
government may bring a lawsuit against any person whom it believes has
knowingly presented, or caused to be presented, a false or fraudulent request
for payment from the federal government, or who has made a false statement or
used a false record to get a claim approved. The Federal False Claims Act
further provides that a lawsuit thereunder may be initiated in the name of the
United States by an individual who is an original source of the allegations.
The government has taken the position that claims presented in violation of the
federal anti-kickback law or Stark Law may be considered a violation of the
Federal False Claims Act. Penalties include fines ranging from $5,500 to 11,000
for each false claim, plus three times the amount of damages that the federal
government sustained because of the act of that person. We believe that we are
in compliance with the rules and regulations that apply to the Federal False
Claims Act. However, we could be found to have violated certain rules and
regulations resulting in sanctions under the Federal False Claims Act. If we
are found in violation, any sanctions imposed could result in fines and
penalties and restrictions on and exclusions from participation in federal and
state healthcare programs that are integral to our business.


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<P align="left" style="font-size: 10pt"><B><I>Our agreements with the contracted radiology practices must be structured to
avoid the corporate practice of medicine and fee-splitting.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The laws of many states, including many of the states in which the
contracted radiology practices are located, prohibit us from exercising control
over the medical judgments or decisions of physicians and from engaging in
certain financial arrangements, such as splitting professional fees with
physicians. These laws and their interpretations vary from state to state and
are enforced by state courts and regulatory authorities, each with broad
discretion. A component of our business has been to enter into service
agreements with
radiology practices. We provide management, administrative, technical and
other non-medical services to the radiology practices in exchange for a service
fee. We structure our relationships with the radiology practices, including the
purchase of diagnostic imaging centers, in a manner that we believe keeps us
from engaging in the practice of medicine or exercising control over the
medical judgments or decisions of the radiology practices or their physicians
or violating the prohibitions against fee-splitting. State regulatory
authorities or other parties may assert that we are engaged in the corporate
practice of medicine or that the payment of service fees to us by the radiology
practices constitutes fee-splitting. If such a claim were successfully
asserted, we could be subject to civil and criminal penalties and could be
required to restructure or terminate the applicable contractual arrangements.
This result, or our inability to successfully restructure our relationships to
comply with these statutes, could jeopardize our business strategy.

<P align="left" style="font-size: 10pt"><B><I>Licensing and certification laws may limit our ability to expand.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ownership, construction, operation, expansion and acquisition of
diagnostic imaging centers are subject to various federal and state laws,
regulations and approvals concerning licensing of centers, personnel,
certificates of need and other required certificates for certain types of
healthcare centers and major medical equipment. The laws of some of the states
in which we operate limit our ability to acquire new diagnostic imaging
equipment or expand or replace our existing equipment at diagnostic imaging
centers in those states. In addition, free-standing diagnostic imaging centers
that provide services that are not performed as part of a physician office must
meet Medicare requirements to be certified as an independent diagnostic testing
facility to bill the Medicare and Medicaid programs. We may not be able to
receive the required regulatory approvals for any future acquisitions,
expansions or replacements, and the failure to obtain these approvals could
limit the market for our services.

<P align="left" style="font-size: 10pt"><B><I>The regulatory framework is uncertain and evolving.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Healthcare laws and regulations may change significantly in the future. We
continuously monitor these developments and modify our operations from time to
time as the regulatory environment changes. We cannot assure you, however, that
we will be able to adapt our operations to address new regulations or that new
regulations will not adversely affect our business. In addition, although we
believe that we are operating in compliance with applicable federal and state
laws, neither our current or anticipated business operations nor the operations
of the contracted radiology practices have been the subject of judicial or
regulatory interpretation. We cannot assure you that a review of our business
by courts or regulatory authorities will not result in a determination that
could adversely affect our operations or that the healthcare regulatory
environment will not change in a way that restricts our operations.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain states have enacted statutes or adopted regulations affecting risk
assumption in the healthcare industry, including statutes and regulations that
subject any physician or physician network engaged in risk-based managed care
contracting to applicable insurance laws and regulations. These laws and
regulations may require physicians and physician
networks to meet minimum capital requirements and other safety and
soundness requirements. Implementing additional regulations or compliance
requirements could result in substantial costs


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<P align="left" style="font-size: 10pt">to us and the contracted
radiology practices and limits our ability to enter into capitated or other
risk sharing managed care arrangements.


<P align="left" style="font-size: 10pt"><B><I>We could be harmed if we are unable to timely continue to comply with HIPAA
Standard Transaction and Code Set Requirements.</I></B>




<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The administrative provisions of HIPAA direct the federal government to
adopt national electronic standards for automated transfer of certain
healthcare data between healthcare payors, plans and providers. HIPAA is
designed to enable the entire healthcare industry to communicate electronic
data using a single set of standards, thus eliminating all nonstandard formats
currently in use. Our contracted radiology practices and diagnostic imaging
centers are &#147;covered entities&#148; under HIPAA, and as such, had to comply with the
HIPAA electronic data interchange mandates by the October&nbsp;16, 2003 deadline. We
are able to produce compliant transactions and we continue to test with our
trading partners to ensure that there are no unexpected claim or payment
delays. We believe we will continue to experience some cash flow disruption once CMS
and other payor contingency plans for noncompliant transactions are no longer
in effect. A failure in our continued ability to comply with HIPAA Standards or
the discontinuance of CMS or payor contingency plans could cause us to
experience a delay in our claims processing by our payors or lead to a large
number of rejected or denied claims. Either of these results may slow our cash
collections and increase our accounts receivable days sales outstanding.

<P align="left" style="font-size: 10pt"><B><I>We could be harmed if we experience delayed payments from third-party payors
who have not complied with HIPAA EDI requirements.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In September&nbsp;2003, CMS announced that it would implement a contingency
plan to accept noncompliant electronic transactions after the October&nbsp;16, 2003
compliance deadline to ensure processing of claims from providers who could not
meet the deadline and otherwise would have had their Medicare claims rejected.
CMS will regularly reassess provider readiness and determine how long the
contingency plan will be in effect. We may continue to experience a delay in claims
processing by our payors or experience a large number of rejected or denied
claims. Either of these results may slow our cash collections and increase our
accounts receivable days sales outstanding.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While we have taken steps to mitigate this risk by meeting with our payors
to assess their HIPAA EDI readiness and discussing payment contingency plans,
there can be no assurance that we will be able to maintain sufficient cash on
hand and capacity under our existing credit facility to supplement the expected
cash-flow shortfalls. If our cash reserves or credit lines prove to be
insufficient for our cash flow needs, our business and operations could be
adversely affected. This, in turn, may limit our access to capital for growth.


<P align="left" style="font-size: 10pt"><B>Risks Related to Notes</B>


<P align="left" style="font-size: 10pt"><B><I>Our substantial level of indebtedness could adversely affect our financial
condition and prevent us from fulfilling our obligations on our notes or notes
issued to replace them.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At June&nbsp;30, 2004, we had approximately $171.0&nbsp;million of indebtedness. In
addition, we have the ability to borrow up to $35&nbsp;million under our credit
facility and up to $60&nbsp;million under our master lease credit agreement. Also,
subject to restrictions in the indenture and the credit facility, we may incur
additional indebtedness.


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our high level of indebtedness could have important consequences,
including the following:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to obtain additional financing for working capital,
capital expenditures, acquisitions or general corporate purposes may
be impaired;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we must use a substantial portion of our cash flow from operations to
pay interest on our notes and our other indebtedness, which will
reduce the funds available to us for other purposes;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>all of the indebtedness outstanding under the credit facility is
secured by substantially all of our assets and will mature prior to
any notes;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our high level of indebtedness could place us at a competitive
disadvantage to our competitors that have less debt;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our high level of indebtedness makes us more vulnerable to economic
downturns and adverse developments in our business.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We expect to obtain the money to pay our expenses and to pay the amounts
due under our notes and other debt from our operations and from borrowings
under our credit facility and master lease credit facility. Our ability to meet
our expenses thus depends on our future performance, which will be affected by
financial, business, economic and other factors. We will not be able to control
many of these factors, such as economic conditions in the markets where we
operate and pressure from competitors. Our business may not generate sufficient
cash flow from operations in the future, our currently anticipated growth in
revenue and cash flow may not be realized on schedule and future borrowings may
not be available to us under our credit facility in an amount sufficient to
enable us to repay indebtedness, including our notes, or to fund other
liquidity needs. If we do not have enough money, we may be required to
refinance all or part of our then existing debt (including our notes), sell
assets or borrow more money. We cannot guarantee that we will be able to do so
on terms acceptable to us, or at all. In addition, the terms of existing or
future debt agreements, including our credit facility and any indenture, may
restrict us from adopting any of these alternatives. The failure to generate
sufficient cash flow or to achieve these alternatives could significantly
adversely affect the value of our notes and our ability to pay the amounts due
under them.

<P align="left" style="font-size: 10pt"><B><I>Because our notes are unsecured, the right to enforce remedies is limited by
the rights of holders of secured debt.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our notes are not secured. Our credit facility is secured by substantially
all of our assets and a pledge of the capital stock of all of our wholly owned
subsidiaries. If we become insolvent or are liquidated, or if any payment under
the credit facility is accelerated, our lenders will be entitled to exercise
the remedies available to a secured lender under applicable law and will have a
claim on those assets before the holders of any notes. The liquidation value of
our assets may not be sufficient to repay in full any indebtedness under the
credit facility, as well as our other indebtedness, including our notes.

<P align="left" style="font-size: 10pt"><B><I>Our ability to repay our notes and our other debt depends on cash flow from our
subsidiaries, some of which are not obligated to make funds available to make
payments on notes.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a holding company. Our only material assets are our ownership
interests in our subsidiaries. Consequently, we depend on distributions or
other intercompany transfers of funds
from our subsidiaries to meet our debt service and other obligations,
including with respect to


<P align="center" style="font-size: 10pt">12
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<P align="left" style="font-size: 10pt">our notes. Our non-guarantor subsidiaries are not
obligated to make funds available for payment on our notes. Only our
subsidiaries that are not unrestricted subsidiaries will guarantee our notes.
The financial statements included in this report are presented on a
consolidated basis, including all of our subsidiaries. The aggregate total
assets at June&nbsp;30, 2004, of our subsidiaries that are not guarantors of our
notes were $3.2&nbsp;million, or 1.2% of our total assets at June&nbsp;30, 2004. The
operating results of our guarantor subsidiaries may not be sufficient to enable
us to make payments on our notes. In addition, our rights and the rights of our
creditors, including holders of our notes, to participate in the assets of any
of our non-guarantor subsidiaries upon their liquidation or recapitalization
will generally be subject to the prior claims of those subsidiaries&#146; creditors.
As a result, our notes are effectively subordinated to the indebtedness of the
non-guarantor subsidiaries. As of June&nbsp;30, 2004, the total liabilities of our
non-guarantor subsidiaries, excluding intercompany liabilities, were $1.7
million.


<P align="left" style="font-size: 10pt"><B><I>The indenture for our notes and our credit facility impose significant
operating and financial restrictions, which may prevent us from pursuing
certain business opportunities and taking certain actions.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indenture for our notes and our credit facilities impose significant
operating and financial restrictions on us. These restrictions limit our
ability to, among other things:


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>borrow money;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pay dividends on or redeem or repurchase our stock;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>make investments;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>create liens;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sell certain assets or merge with or into other companies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enter into certain transaction with affiliates;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sell stock in our subsidiaries; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>restrict dividends, distributions or other payments from our subsidiaries.</TD>
</TR>

</TABLE>

<P align="left" style="font-size: 10pt"><B><I>If we are unable to access the full $35&nbsp;million under our credit facility, our
ability to meet our capital expenditure requirements may be restricted.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our borrowing availability under our $35&nbsp;million credit facility is
determined through a formula, which allows us to borrow up to 85% of eligible
accounts receivable, as defined under the credit facility. If we are unable to
generate sufficient eligible accounts receivable, then we may not be able to
borrow the full $35&nbsp;million. To the extent that financing under the credit
facility, or other financing sources is not available to us or we are not able
to generate sufficient cash through operations, we may be restricted in our
ability to meet capital expenditure requirements.

<P align="left" style="font-size: 10pt"><B><I>A court could cancel the guarantees under certain circumstances.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of our subsidiaries that is not an unrestricted subsidiary guarantees
our notes. If, however, a guarantor becomes a debtor in a case under the United
States Bankruptcy Code or encounters other financial difficulty, under federal
or state fraudulent conveyance laws a court might avoid (that is, cancel) its
guarantee. The court might do so if it found that, when the guarantor entered
into its guarantee or, in some states, when payments became due under its
guarantee, it (i)&nbsp;received less than reasonably equivalent value or fair
consideration for the
guarantee and (ii)&nbsp;either (a)&nbsp;was or was rendered insolvent, (b)&nbsp;was left
with inadequate capital


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<P align="left" style="font-size: 10pt">to conduct its business, or (c)&nbsp;believed or should have
believed that it would incur debts beyond its ability to pay. The court might
also avoid a guarantee, without regard to the above factors, if it found that
the guarantor entered into its guarantee with actual intent to hinder, delay,
or defraud its creditors.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A court would likely find that a guarantor did not receive reasonably
equivalent value or fair consideration for its guarantee unless it benefited
directly or indirectly from the issuance of our notes. If a court avoided a
guarantee, a note holder would no longer have a claim against the guarantor. In
addition, the court might direct a note holder to repay any amounts already
received from the guarantor. If the court were to avoid any guarantor&#146;s
guarantee, we cannot assure a note holder that funds would be available to pay
our notes from another guarantor or from any other source.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The test for determining solvency for purposes of the foregoing will
depend on the law of the jurisdiction being applied. In general, a court would
consider an entity insolvent either if the sum of its existing debts exceeds
the fair value of all its property, or if the present fair saleable value of
its assets is less than the amount required to pay the probable liability on
its existing debts as they become due. For this analysis, &#147;debts&#148; includes
contingent and unliquidated debts.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The indenture states that the liability of each guarantor on its guarantee
is limited to the maximum amount that the subsidiary can incur without risk
that the guarantee will be subject to avoidance as a fraudulent conveyance.
This limitation may not protect the guarantees from a fraudulent conveyance
attack or, if it does, that the guarantees will be in amounts sufficient, if
necessary, to pay obligations under our notes when due.

<P align="left" style="font-size: 10pt"><B><I>We may not be able to satisfy our obligations to holders of our notes upon a
change of control.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of a &#147;change of control,&#148; as defined in our indenture,
a note holder will have the right to require us to purchase our notes at a
price equal to 101% of the principal amount, together with any accrued and
unpaid interest and liquidated damages, if any, to the date of purchase. Our
failure to purchase, or give notice of purchase of, our notes would be a
default under the indenture, which would in turn be a default under our senior
credit facility. Moreover, our failure to repay all amounts outstanding under
our senior credit facility upon a default would also be a default under the
indenture.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, a change of control may constitute an event of default under
our credit facility. A default under our credit facility will result in an
event of default under the indenture if the lenders accelerate the debt under
our senior credit facility.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a change of control occurs, we may not have enough assets to satisfy
all obligations under our credit facility and the indenture related to our
notes. Upon the occurrence of a change of control, we could seek to refinance
the indebtedness under our credit facility and our notes or obtain a waiver
from the lenders or the note holders. We may not be able to obtain a waiver or
refinance our indebtedness on commercially reasonable terms, if at all.

<P align="left" style="font-size: 10pt"><B><I>No established trading market exists for our notes, and note holders may not be
able to sell them quickly or at the price that note holders paid.</I></B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We do not intend to list our notes on any securities exchange or to
arrange for quotation on any automated dealer quotation system. Jefferies &#038;
Company, Inc. and Deutsche Banc Alex


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<P align="left" style="font-size: 10pt">Brown make a market in the notes, but they
are not obligated to do so. They may discontinue any market making at any time,
in their sole discretion. As a result, we cannot assure you as to the liquidity
of any trading market for the notes.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note holders may not be able to sell notes at a particular time or at
favorable prices. We also cannot assure note holders as to the level of
liquidity of the trading market for the notes. As a result, note holders may be
required to bear the financial risk of their investment in the notes
indefinitely. Future trading prices of the notes may be volatile and will
depend on many factors, including:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our operating performance and financial condition;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the interest of securities dealers in making a market for our notes; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the market for similar securities.</TD>
</TR>

</TABLE>

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<DIV align="left">
<A name="102"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>ABOUT OUR COMPANY</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this prospectus, &#147;we&#148; or &#147;Radiologix&#148; refers to Radiologix,
Inc., a Delaware corporation, and all of its subsidiaries, unless the context
indicates otherwise. Our common stock is listed on the American Stock Exchange
under the symbol &#147;RGX.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a leading national provider of diagnostic imaging services through
our ownership and operation of free-standing, outpatient diagnostic imaging
centers. We utilize sophisticated technology and technical expertise to perform
a broad range of imaging procedures, such as magnetic resonance imaging (MRI),
computed tomography (CT), positron emission tomography (PET), nuclear medicine,
ultrasound, mammography, bone densitometry (DEXA), general radiography (X-ray)
and fluoroscopy. For the six months ended June&nbsp;30, 2004, we derived 82% of our
service fee revenue from the ownership, management and operation of our imaging
center network and 18% of our service fee revenue from administrative,
management and information services provided to contracted radiology practices.
As of June&nbsp;30, 2004, we owned, operated or maintained an ownership interest in
imaging equipment at 94 locations. As of June&nbsp;30, 2004, our imaging centers
were located in 13 states, including markets in California, Florida, Kansas,
Maryland and New York. Effective April&nbsp;30, 2004, we sold our operations in San
Antonio, Texas, to Vanguard Health Systems, Inc.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We focus on providing quality patient care and service to ensure patient
and referring physician satisfaction. We develop comprehensive radiology
networks by investing in technologically advanced imaging equipment, and in
high quality service. Our consolidation of diagnostic imaging centers in
certain markets improves response time, increases overall patient
accessibility, permits us to standardize procedures and aids us in developing
best practices. We seek the input and participation of the contracted radiology
practices to which we provide administrative, management and information
services to improve productivity and the quality of services. By focusing on
further improving and standardizing the operations of our diagnostic imaging
centers, we believe that we can increase patient and referring physician
satisfaction, reduce our costs and increase utilization at our diagnostic
imaging centers.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We contract with radiology practices to provide professional services,
including the supervision and interpretation of imaging procedures performed in
our centers. We do not engage in the practice of medicine nor do we employ
physicians. Our radiologists maintain full control over the provision of
professional radiological services. We believe the contracted radiology
practices generally have outstanding physician and practice credentials and
reputations; strong competitive market positions; a broad sub-specialty mix of
physicians; a history of past growth and potential for future growth; and a
willingness to continually improve the delivery of diagnostic imaging services.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Service fee revenue is comprised of billed charges for both the technical
and professional components of service, reduced by estimated contractual
adjustments and by amounts retained by contracted radiology group practices for
their professional services, as outlined in our service agreements. Revenue is
recognized when services are rendered by contracted radiology practices, the
imaging centers, or both. Contractual adjustments and bad debt expense are
estimated based on historical collection experience, including payor mix,
managed care contract pricing and contract revenue and the aging of patient
accounts receivable balances. As these factors change, revisions are made as
appropriate in the period known.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s service fee revenue is dependent upon the operating results
of the contracted radiology practices and diagnostic imaging centers. Where
state law allows, service


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<P align="left" style="font-size: 10pt">fees due under the service agreements for the contracted radiology
practices are derived from two distinct revenue streams: (1)&nbsp;a negotiated
percentage (typically 20% to 30%) of the professional revenues, reduced by
certain expenses, as defined in the service agreements; and (2)&nbsp;100% of the
adjusted technical revenues as defined in the service agreements. In states
where the law requires a flat fee structure, the Company has negotiated a base
service fee, which approximates the estimated fair market value of the services
provided under the service agreements and which is renegotiated each year.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our diagnostic imaging centers are also principally dependent on our
ability to attract referrals from primary care physicians, specialists and
other healthcare providers. The referral often depends on the existence of a
contractual arrangement with the referred patient&#146;s health benefit plan. The
Company has contracts with health benefit plans representing many of the
patients in the markets we serve.
<DIV align="left">
<A name="103"></A>
</DIV>


<P align="center" style="font-size: 10pt"><B>A WARNING ABOUT FORWARD-LOOKING STATEMENTS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Throughout this prospectus we make &#147;forward-looking statements&#148; within the
meaning of Section&nbsp;27A of the Securities Act and Section&nbsp;21E of the Securities
Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;). Forward-looking
statements include words such as &#147;may,&#148; &#147;will,&#148; &#147;would,&#148; &#147;could,&#148; &#147;likely,&#148;
&#147;estimate,&#148; &#147;intend,&#148; &#147;plan,&#148; &#147;continue,&#148; &#147;believe,&#148; &#147;expect&#148; or &#147;anticipate&#148;
and other similar words and include all discussions about our acquisition and
development plans. We do not guarantee that the transactions and events
described in this report will happen as described or that any positive trends
noted in this report will continue. The forward-looking statements contained in
this report are generally located in the material set forth under the heading
&#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of
Operations&#148;, but may be found in other locations as well. These forward-looking
statements generally relate to our plans, objectives and expectations for
future operations and are based upon management&#146;s reasonable estimates of
future results or trends. Although we believe that our plans and objectives
reflected in or suggested by such forward-looking statements are reasonable, we
may not achieve such plans or objectives. You are cautioned not to unduly rely
on such forward-looking statements when evaluating the information presented in
this report. You should read this report completely and with the understanding
that actual future results may be materially different from what we expect. We
will not update forward-looking statements even though our situation may change
in the future.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Specific factors that might cause actual results to differ from our
expectations include, but are not limited to:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>economic, demographic, business and other conditions in our markets;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the highly competitive nature of the healthcare business;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a decline in patient referrals;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in the rates or methods of third-party reimbursement for
diagnostic imaging services;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the termination of our contracts with radiology practices;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the loss of a high percent of radiologists operating in our contracted radiology practices;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability to recruit and retain technologists;</TD>
</TR>



<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the availability of additional capital to fund capital expenditure requirements;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>burdensome lawsuits against our contracted radiology practices and us;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>reduced operating margins due to our managed care contracts and
capitated fee arrangements;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any failure by us to comply with state and federal anti-kickback
and anti-self referral laws or any other applicable healthcare
regulations;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in business strategy and development plans;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>changes in federal, state or local regulations affecting the healthcare industry;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our substantial indebtedness, debt service requirements and liquidity constraints;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>interruption of operations due to severe weather or other extraordinary events; and</TD>
</TR>


<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>risks related to our senior notes and healthcare securities generally.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A more comprehensive list of such factors is set forth in the Section
entitled &#147;Risk Factors&#148; beginning on page 2.

<DIV align="left">
<A name="104"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>USE OF PROCEEDS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any proceeds from any sale of shares of common stock
by the selling stockholders.

<DIV align="left">
<A name="105"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SELLING STOCKHOLDERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus covers offers and sales from time to time by the selling
stockholders named below. The maximum number of shares that each selling
stockholder may sell is set forth next to his or her name.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="75%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="34%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Relationships with Radiologix</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Maximum No. of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name of Selling Stockholder</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Since 2001</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Derace L. Schaffer, M.D.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director from 1996 to 2003, Consultant</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">100,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Sharon Tolliver</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">100,000</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Greg Samberson</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President, Finance</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">5,833</TD>
    <TD valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders do not currently own the shares included in the
table above. In 2003 each of the selling stockholders received an employee
stock option upon commencement of employment or other service with the Company.
These options were granted on substantially the same terms as options issued
under the Radiologix, Inc. 1996 Stock Option Plan. These options were granted
outside of the 1996 plan because an insufficient number of options remained
available for new grants at the time the selling stockholders&#146; options were
granted. The selling stockholders may acquire the shares included in the table
from Radiologix by exercising their employee stock options and offer them for
resale pursuant to this prospectus.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the date of this prospectus, only Dr.&nbsp;Schaffer owns shares of
Radiologix&#146;s common stock other than the shares being offered by this
prospectus. He owns 573,242 shares directly and 170,000 options to purchase
shares of our common stock, including the shares covered by this prospectus.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot state the number of our shares that the selling stockholders
will own beneficially after this offering terminates because we do not know how
many shares the selling stockholders will actually sell.


<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Rule&nbsp;416 of the Securities Act of 1933, the selling
stockholders may also offer and sell shares of common stock issued as a result
of stock splits, stock dividends and similar events.

<DIV align="left">
<A name="106"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PLAN OF DISTRIBUTION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is intended to be used to comply with the prospectus
delivery requirements of the Securities Act of 1933 in connection with any
offers or resales. The selling stockholders, their pledgees, donees,
transferees or other successors-in-interest, may, from time to time, sell all
or a portion of their shares of common stock in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to market prices or at
negotiated prices. The selling stockholders may sell their shares by any of the
following methods:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which a broker or dealer will attempt to sell
the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker or dealer acting as principal for its
own account who resells pursuant to this prospectus;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>an exchange distribution in accordance with the rules of the
American Stock Exchange;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the
broker solicits purchasers;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>short sales;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>writing options on or other contractual agreements relating to the shares;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a combination of any such methods of sale; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other method permitted pursuant to applicable law.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time the selling stockholders may enter into hedging
transactions with broker-dealers or otherwise, may engage in short sales, short
sales against the box, puts, calls and other transactions in Radiologix
securities, and may sell and deliver shares of common stock in connection with
these transactions or to settle securities loans. From time to time the
selling stockholders may pledge their shares of common stock pursuant to the
margin provisions of their customer agreements with their brokers. Upon a
default by the selling stockholders, their brokers may offer and sell the
pledged shares of common stock from time to time.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if a broker-dealer acts as
agent for a purchaser of such shares, from the purchaser) in amounts to be
negotiated that are not expected to exceed those customary in the types of
transactions involved. Broker-dealers may agree with the selling stockholders
to sell a specified number of such shares at a stipulated price per share, and,
to the extent the broker-dealer is unable to do so acting as agent for the
selling stockholders, to purchase as principal any unsold shares at the price
required to fulfill the broker-dealer commitment to the selling stockholders.
Broker-dealers who acquire shares of common stock as principal may resell the
shares from time to time in transactions (that may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above) in the over-


<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">the-counter market or otherwise at prices and on terms then prevailing at
the time of sale, at prices then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may pay to or
receive from the purchasers of such shares commissions as described above. The
selling stockholders may also sell the shares of common stock in open market
transactions in accordance with Rule&nbsp;144 under the Securities Act of 1933,
rather than pursuant to this prospectus.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders and any broker-dealers or agents that participate
in sales of common stock may be deemed to be &#147;underwriters&#148; within the meaning
of the Securities Act of 1933 in connection with the sales. In such event, any
commissions received by the broker-dealers or agents and any profit on resale
of the shares that they purchased may be deemed to be underwriting commissions
or discounts under the Securities Act of 1933.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time a particular offer of shares of common stock is made, if and
to the extent required, this prospectus will be accompanied by a prospectus
supplement setting forth the specific number of shares offered, the name of the
selling stockholder making the offer, the offering price, and the other terms
of the offering, including the names of any underwriters, agents, dealers and
brokers involved and their compensation, if any. Unless this prospectus is
accompanied by a prospectus supplement stating otherwise, offers and sales may
be made pursuant to this prospectus only in ordinary broker&#146;s transactions made
on the American Stock Exchange in transactions involving ordinary and customary
brokerage commissions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may enter into agreements (to which we may also
be a party) with underwriters, brokers, dealers and agents who participate in
distributing the shares, that require the selling stockholders and/or us to
indemnify them against certain liabilities, including under the Securities Act
of 1933, or to contribute to related payments that they may be required to
make. The underwriters, brokers, dealers and agents may engage in transactions
with, or perform services for, the selling stockholders and Radiologix in the
ordinary course of business.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To comply with certain state securities laws, the common stock will be
sold in those states only through registered or licensed broker-dealers. In
some other states the common stock may not be sold unless it has been
registered or qualified for sale in these states or a
registration/qualification exemption is available.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Radiologix will pay all fees and expenses of registering the common stock
other than fees and expenses of the selling stockholders.

<DIV align="left">
<A name="107"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>LEGAL MATTERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the shares of common stock offered by the selling
stockholders have been passed upon for Radiologix by its General Counsel,
Michael L. Silhol.

<DIV align="left">
<A name="108"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>EXPERTS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ernst &#038; Young LLP, independent registered public accounting firm, have
audited our consolidated financial statements and schedule included in our
Annual Report on Form 10-K, as amended, for the year ended December&nbsp;31, 2003,
as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial
statements (and schedule) are incorporated by reference in reliance on Ernst &#038;
Young LLP&#146;s report, given on their authority as experts in accounting and
auditing.


<P align="center" style="font-size: 10pt">20
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="109"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC filings are
available to the public over the Internet at the SEC&#146;s Web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC&#146;s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1(800) SEC-0330 for further information on the public
reference room.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus is part of a registration statement that we filed with the
SEC utilizing a &#147;shelf&#148; registration process. This prospectus provides you
with information about the various alternative methods by which the selling
stockholders may sell. In some cases the selling stockholders may be required
to provide additional information about the method by which they intend to
sell. We will provide a prospectus supplement containing specific information
about the terms of any such offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with additional
information described under this heading &#147;Where You Can Find More Information.&#148;

<DIV align="left">
<A name="110"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Securities and Exchange Commission allows us to &#147;incorporate by
reference&#148; the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus,
and information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections&nbsp;13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until the selling
stockholders&#146; offering is complete:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual Report on Form 10-K for the year ended December&nbsp;31,
2003, and the amendments to that report;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All other reports that we filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 after the end of the
year covered by our 2003 annual report; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Description of our common stock under the caption
&#147;Description of Radiologix Capital Stock&#148; contained in Radiologix&#146;s
Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on May&nbsp;9, 2000, and any amendment or report
filed to update that description.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide these filings to any person, including any beneficial
owner, to whom this prospectus is delivered, at no cost, upon written or oral
request to Radiologix as follows:


<P align="center" style="font-size: 10pt">3600 JP Morgan Chase Tower<BR>
2200 Ross Avenue<BR>
Dallas, Texas 75201-2776<BR>
Attn: Investor Relations<BR>
Telephone: (214)&nbsp;303-2776



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information incorporated by reference or
provided in this
prospectus or a prospectus supplement. We have not authorized anyone else
to provide you with different information. The selling stockholder is not
offering these securities in any state where an offer is not permitted. You
should not assume that the information in this prospectus or a prospectus
supplement is accurate as of any date other than the date on the front of those
documents.


<P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>Until August&nbsp;6, 2006, all dealers that effect transactions in these securities, whether or not<BR>
participating in this offering, may be required to deliver a prospectus. This is in addition<BR>
to the dealers&#146; obligation to deliver a prospectus when acting as underwriters and with<BR>
respect to their unsold allotments or subscriptions.</B>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>RADIOLOGIX, INC.</B>



<P align="center" style="font-size: 10pt"><B>3,205,833 Shares of Common Stock</B>



<P align="center" style="font-size: 10pt"><B>PART II</B>



<P align="center" style="font-size: 10pt"><B>INFORMATION REQUESTED IN THE REGISTRATION STATEMENT</B>



<P align="left" style="font-size: 10pt"><B>Item&nbsp;3. Incorporation of Documents by Reference</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Radiologix, Inc. (the &#147;Company&#148;) incorporates by reference the following
documents filed with the Securities and Exchange Commission (the &#147;Commission&#148;):


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company&#146;s latest Annual Report on Form 10-K filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the &#147;Exchange Act&#148;);</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by the Company&#146;s latest Annual Report on Form 10-K; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of the Company&#146;s Common Stock contained in
the Company&#146;s Registration Statement on Form 8-A filed with the
Commission on November&nbsp;3, 1997, pursuant to Section&nbsp;12 of the
Exchange Act, together with an Amendment filed on November&nbsp;3, 1997.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt"><B>Item&nbsp;4. Description of Securities</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.


<P align="left" style="font-size: 10pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.


<P align="left" style="font-size: 10pt"><B>Item&nbsp;6. Indemnification of Directors and Officers</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Section&nbsp;145 of the Delaware General Corporation Law, the Company can
indemnify its directors and officers against liabilities they may incur in such
capacities, including under the Securities Act of 1933. The Company&#146;s bylaws
provide that the Company will indemnify its directors and officers to the
fullest extent permitted by law. The bylaws require the Company to advance
litigation expenses to a director or officer who has delivered to the Company a
written agreement to repay the advances to the Company in the event that the
director or officer is later found not to be entitled to indemnification. The
bylaws do not exclude any other right such persons may have or acquire under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s restated certificate of incorporation, as amended, provides
that, pursuant to Delaware law, its directors will not be liable for monetary
damages for breach of the directors&#146; fiduciary duty of care to the Company and
its stockholders. This provision does not eliminate the duty of care, and in
appropriate circumstances, equitable remedies under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director&#146;s duty of loyalty to the Company or its stockholders, for acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director&#146;s responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws.


<P align="center" style="font-size: 10pt">II-1
</DIV>




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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has entered into agreements to indemnify its directors and
certain of its officers in addition to the indemnification provided for in the
certificate of incorporation and bylaws. These agreements, among other things,
indemnify the Company&#146;s directors and certain of its officers for certain
expenses (including attorneys&#146; fees), judgments, fines and settlement amounts
that they incur in any action or proceeding, including any action by or in the
right of the Company, on account of services as a director or officer of the
Company, or as a director or officer of any other company or enterprise to
which the person provides services at the request of the Company. The Company
maintains insurance against liabilities incurred by its officers and directors
in defense of actions to which they are made parties by reason of their
positions as officers and directors.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities
Act of 1933 is permitted for directors, officers, or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable. For this undertaking with respect to indemnification, see Item
9 herein.


<P align="left" style="font-size: 10pt"><B>Item&nbsp;7. Exemption from Registration Claimed</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2003, the Company granted employee and consultant stock options to
three individuals in private placements. The stock underlying those options is
being registered pursuant to this registration statement for reoffer or resale.
These grants were exempt from registration pursuant to Section&nbsp;4(2) of the
Securities Act of 1933.


<P align="left" style="font-size: 10pt"><B>Item&nbsp;8. Exhibits</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit No.</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Exhibits</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of Incorporation, as amended.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws, as amended (Incorporated by reference
to Exhibit&nbsp;3.2 to the registrant&#146;s report on Form&nbsp;10-Q for the quarter
ended June&nbsp;30, 2004).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Restated Certificate of Incorporation (Incorporated by
reference to Exhibit&nbsp;3.4 to the registrant&#146;s report on Form&nbsp;10-Q for
the quarter ended June&nbsp;30, 1999).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Amendment to the Restated Certificate of
Incorporation dated July&nbsp;14, 2003 (Incorporated by reference to Exhibit
3.5 to the registrant&#146;s report on Form&nbsp;10-Q for the quarter ended June
30, 2003).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Stock Certificate for the Common Stock of the Company filed as Exhibit&nbsp;4.1 to Form&nbsp;S-1 (333-30205) and
incorporated here by reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Radiologix, Inc. 2004 Long-Term Incentive Compensation Plan, filed as Appendix&nbsp;C to the Company&#146;s definitive
2004 proxy statement and incorporated here by reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Michael L. Silhol, General Counsel.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ernst &#038; Young LLP.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Michael L. Silhol (included in Exhibit&nbsp;5.1).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of attorney (included on the signature page of the registration statement).</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Filed herewith.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">II-2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<P align="left" style="font-size: 10pt"><B>Item&nbsp;9. Undertakings</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The undersigned registrant hereby undertakes:



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
&#147;Calculation of Registration Fee&#148; table in the effective
registration statement; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 4%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><I>provided</I>, <I>however</I>, that paragraphs (a)(1)(i) and (a)(1)(ii) will not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section&nbsp;13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial <I>bona fide </I>offering thereof; and



<P align="left" style="margin-left:3%; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant&#146;s annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan&#146;s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial <I>bona fide </I>offering thereof.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses


<P align="center" style="font-size: 10pt">II-3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will , unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.



<P align="center" style="font-size: 10pt">II-4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="111"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES AND POWER OF ATTORNEY</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 6th day of August,
2004.


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top">&nbsp;</TD>
    <TD colspan="3"><B>RADIOLOGIX , INC.</B><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000"><I>/s/ Stephen D. Linehan</I>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>

    <TD>Stephen D. Linehan&nbsp;</TD>

    <TD>&nbsp;</TD>
</TR><TR>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>President and Chief Executive Officer&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints each of Stephen D. Linehan and Michael L. Silhol, the
person&#146;s true and lawful attorneys-in-fact and agents, with full power of
substitution, for and in the person&#146;s name, place and stead, in any and all
capacities, to sign, execute and file with the Securities and Exchange
Commission and any state securities regulatory board or commission any
documents relating to the proposed issuance and registration of the securities
offered pursuant to this Registration Statement on Form S-8 under the
Securities Act of 1933, including any amendment or amendments (and any
additional related Registration Statement permitted by Rule 462(b) promulgated
under the Securities Act of 1933, including any amendment(s)), with all
exhibits and any and all documents required to be filed with any regulatory
authority, granting unto the attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to effectuate the
same as fully to all intents and purposes as the person could do if personally
present.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 6th day of August, 2004.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Stephen D. Linehan</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">and Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Stephen D. Linehan</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Richard J. Sabolik</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President and Chief Financial Officer</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Financial Officer)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Richard J. Sabolik</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Clete D. Madden</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Vice President and Corporate Controller</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">(Principal Accounting Officer)</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Clete D. Madden</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Marvin S. Cadwell</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Marvin S. Cadwell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Paul D. Farrell</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Paul D. Farrell</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/ Joseph C. Mello</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Joseph C. Mello</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><I>/s/
Michael L. Sherman, M.D.</I>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR align="left" size="1" noshade width="85%"></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael L. Sherman, M.D.</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">II-5
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="112"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>EXHIBIT INDEX</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit No.</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description of Exhibits</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Restated Certificate of Incorporation, as amended.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws, as amended (Incorporated
by reference to Exhibit&nbsp;3.2 to the registrant&#146;s report
on Form&nbsp;10-Q for the quarter ended June&nbsp;30, 2004).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amendment to Restated Certificate of Incorporation (Incorporated by
reference to Exhibit&nbsp;3.4 to the registrant&#146;s report on Form&nbsp;10-Q for
the quarter ended June&nbsp;30, 1999).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Amendment to the Restated Certificate of
Incorporation dated July&nbsp;14, 2003 (Incorporated by reference to Exhibit
3.5 to the registrant&#146;s report on Form&nbsp;10-Q for the quarter ended June
30, 2003).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Specimen Stock Certificate for the Common Stock of the Company
filed as Exhibit&nbsp;4.1 to Form&nbsp;S-1 (333-30205) and incorporated here by
reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Radiologix, Inc. 2004 Long-Term Incentive Compensation Plan, filed
as Appendix&nbsp;C to the Company&#146;s definitive 2004 proxy statement and
incorporated here by reference.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Michael L. Silhol, General Counsel.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Ernst &#038; Young LLP.</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Michael L. Silhol (included in Exhibit&nbsp;5.1).</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24.1*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of attorney (included on the signature page of the registration statement).</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Filed herewith.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

</BODY>
</HTML>
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sv8
Table of Contents
As filed with the
Securities and Exchange Commission on August 6, 2004.
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Radiologix, Inc.
(Exact name of registrant as specified in its charter)
Delaware
75-2648089
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
3600 JP Morgan Chase Tower
2200 Ross Avenue
Dallas, Texas
75201-2776
(Address of Principal Executive Offices)
(Zip Code)
RADIOLOGIX, INC.
2004 LONG-TERM INCENTIVE COMPENSATION PLAN
(Full title of the Plan)
Michael L. Silhol
General Counsel
3600 JP Morgan Chase Tower
2200 Ross Avenue
Dallas, Texas 75201-2776
(Name and address of agent for service)
(214) 303-2776
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Each Class
Proposed Maximum
of Securities
Amount
Offering
Proposed Maximum
Amount of
To Be Registered
To Be Registered
(1)
Price Per Unit
Aggregate Offering Price
Registration Fee
Common Stock
$.0001 par value
3,000,000
$4.05
(2)
$
12,150,000
(2)
$
1,539
Common Stock
$.0001 par value
205,833
(3)
$2.60
(3)
$
535,165
(3)
$
68
TOTAL:
3,205,833
$6.65
$
12,685,765
$
1,607
(1)
The amount to be registered includes an indeterminate number of shares
that may be issued to prevent dilution resulting from stock splits, stock
dividends or similar transactions in accordance with Rule 416 promulgated
under the Securities Act of 1933.
(2)
The offering price per share, the aggregate offering price and the
registration fee are calculated in accordance with paragraphs (c) and
(h)(1) of Rule 457 promulgated under the Securities Act of 1933 based on
the average of the high and low sale prices for the Common Stock reported
on the American Stock Exchange on August 5, 2004. ($4.05 per share).
(3)
Represents shares issuable upon the exercise of outstanding stock options
previously granted in private placements at the weighted average exercise
price for the outstanding options pursuant to Rule 457(h)(1).
(4)
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box.
x
Table of Contents
RADIOLOGIX, INC.
3600 JP Morgan Chase Tower
2200 Ross Avenue
Dallas, TX 75201-2776
214.303.2776
PROSPECTUS
205,833 Shares of Common Stock
$.0001 Par Value
This prospectus relates to shares of common stock of Radiologix, Inc. that
are currently not outstanding, but may be issued upon exercise of employee
stock options held by the selling stockholders named in this prospectus and
sold from time to time by the selling stockholders. We will not receive any
proceeds from the sale of these shares.
The selling stockholders may offer their shares from time to time in open
market transactions on the American Stock Exchange or in private transactions,
at prevailing market prices or at privately negotiated prices. The selling
stockholders may sell shares to or through broker-dealers. These
broker-dealers, if used, may receive discounts, concessions or commissions from
the selling stockholders or from the purchaser of the shares. The selling
stockholders will receive the purchase price of the shares that they sell less
any such discounts, concessions or commissions. The selling stockholders will
be responsible for paying any discounts, concessions or commissions.
Our common stock is traded on the American Stock Exchange under the symbol
"RGX." On August 5, 2004, the sale price for one share of our common stock as
last reported on the American Stock Exchange was $3.99 per share.
You should read the Section entitled "Risk Factors" beginning on page 2
for a discussion of certain factors that you should consider before buying our
common stock.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
The date of this prospectus is August 6, 2004.
TABLE OF CONTENTS
RISK FACTORS
2
ABOUT
OUR COMPANY
16
A
WARNING ABOUT FORWARD-LOOKING STATEMENTS
17
USE OF PROCEEDS
18
SELLING STOCKHOLDERS
18
PLAN OF DISTRIBUTION
19
LEGAL MATTERS
20
EXPERTS
20
WHERE YOU CAN FIND MORE INFORMATION
21
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
21
Opinion/Consent of Michael L. Silhol
Consent of Ernst & Young LLP
RISK FACTORS
Before you invest in our common stock, you should consider the information
in this prospectus and the additional information in our other reports on file
with the Securities and Exchange Commission and in the other documents

incorporated by reference into this prospectus. See "Where You Can Find More
Information" and "Incorporation of Certain Documents by Reference" on page 21.
Risks Related to Our Company and Our Industry
Our revenue is dependent on referrals.
We generate most of our revenue from fees charged for the use of our
diagnostic imaging equipment at our centers. This revenue depends on referrals
from third parties, many of which are made by physicians who have no
contractual relationship with us. We also generate revenue from service fees
that we receive from the contracted radiology practices. If a sufficiently
large number of physicians discontinues referring patients to us, our procedure
volume could decrease, which would reduce our revenue and operating margins.
Further, commercial third-party payors have implemented programs to
control costs that could limit the ability of physicians to refer patients to
us. For example, prepaid healthcare plans, such as health maintenance
organizations, in certain instances provide diagnostic imaging services
directly and contract directly with providers and require their enrollees to
obtain these services from only these providers. Some insurance companies and
self-insured employers also limit these services to contracted providers. These
"closed panel" systems are now common in the managed care environment. Other
systems create an economic disincentive for referrals to providers outside of
the system's designated panel of providers. We may not be able to compete
successfully for managed care contracts against entities with greater resources
within a market area.
Changes in third-party payment rates or methods for diagnostic imaging services
could create downward pricing pressure, which would result in a decline in our
revenue and harm our financial position.
Our revenue is derived through our ownership, operation and management of
diagnostic imaging centers and from service fees paid to us by contracted
radiology practices. Substantially all of the revenue of our diagnostic imaging
centers and the contracted radiology practices is currently derived from commercial third-party payors,
government sponsored healthcare programs (principally, Medicare and Medicaid)
and private and other payors. For the
2
Table of Contents
first six months of 2004, revenue
generated at our diagnostic imaging centers consisted of 64% from commercial
third-party payors, 9% from Medicare and Medicaid, and 27% from private and
other payors.
Rates paid by commercial third-party payors are based on established
physician and hospital charges and are generally higher than Medicare payment
rates. Any decrease in the relative number of patients covered by commercial
third-party payors could decrease our revenue.
Any change in the rates of or conditions for reimbursement from commercial
third-party payors, Medicare or Medicaid could substantially reduce the amounts
reimbursed to us or our contracted radiology practices for services provided.
These reductions could have a significant adverse effect on our revenue and
financial results by creating downward pricing pressure.
We could be harmed if the contracted radiology practices terminate their
agreements with us or lose a significant number of radiologists.
Our diagnostic imaging services include a professional component that must
be provided by radiologists who are not directly employed by us. We do not
control the radiologists who perform professional services for us. Instead,
these radiologists are employed by the contracted radiology practices that
maintain agreements with us. These agreements typically have terms of between
10 and 40 years, but may be terminated by either party under certain limited
conditions. Depending on the termination event, the radiology practice may have
the right to require us to sell, assign and transfer to it, the assets and
related liabilities and obligations associated with the professional and
technical radiology services provided by the radiology practice immediately
prior to the termination. The termination or material modification of any of
them could reduce our revenue.
If a significant number of radiologists terminate their relationships with
the contracted radiology practices and the radiology practices cannot recruit
sufficient qualified radiologists to fulfill practice obligations under our
agreements with them, our ability to maximize the use of our diagnostic imaging
centers could be adversely affected, thereby decreasing our revenue.
Competition in recruiting radiologists and a shortage of qualified radiologists
has made it difficult for some contracted radiology practices to maintain
adequate levels of radiologists. Neither we nor the contracted radiology
practices maintain insurance on the lives of any affiliated physicians.
We may not be able to successfully complete our market development plans.
We intend to increase our presence in existing markets through
acquisitions of centers, developing de novo centers and adding additional
equipment at existing centers, establishing additional joint venture and
outsourcing relationships and selectively entering into contractual
relationships with high-quality, profitable radiology practices. We may not be
able to expand either within our existing markets or in new markets. In
addition, any expansion may not be beneficial to our overall strategy, and any
such expansion may not ultimately produce returns that justify our investment.
Our ability to expand is dependent upon many factors, including our
ability to:
•
identify attractive and willing candidates for acquisitions, joint
ventures or outsourcing relationships;
3
Table of Contents
•
adapt our structure to comply with federal and state legal
requirements affecting our arrangements with contracted radiology
practices, including state prohibitions on fee-splitting, corporate
practice of medicine and self-referrals;
•
obtain regulatory approvals and certificates of need, where necessary,
and comply with licensing and certification requirements applicable to
our diagnostic imaging centers, the contracted radiology practices and
the physicians associated with the contracted radiology practices;
•
recruit a sufficient number of qualified radiology technologists;
•
expand our infrastructure and management; and
•
obtain adequate financing.
Our ability to expand is also dependent on our ability to compete for
opportunities. We may not be able to compete effectively for the acquisition of
diagnostic imaging centers, joint venture opportunities or other outsourcing
relationships. Our competitors may have better established operating histories
and greater resources than we do. Competitors may make it more difficult to
complete acquisitions or joint ventures on terms beneficial to us.
Acquisitions involve a number of special risks, including the following:
•
possible adverse effects on our operating results;
•
diversion of management's attention and resources;
•
failure to retain key personnel;
•
difficulties in integrating new operations into our existing management infrastructure;
•
amortization or write-offs of acquired intangible assets; and
•
risks associated with unanticipated events or liabilities.
Additionally, although we will continue to structure our operations in an
effort to comply with applicable antitrust laws, federal or state governmental
authorities may view us as being dominant in a particular market and,
therefore, cause us to divest ourselves of relationships or assets.
We and the contracted radiology practices may become subject to burdensome
lawsuits.
We may be subject to professional liability claims, including, without
limitation, for improper use or malfunction of our diagnostic imaging
equipment. Our operations, as well as the services we provide on behalf of the
contracted radiology practices, also may be subject to lawsuits for
inappropriate use or disclosure of individually-identifiable patient health
information. We maintain insurance policies with coverages that we believe are
appropriate in light of the risks attendant to our business and consistent with
industry practice. We also require the contracted radiology practices to
maintain professional liability insurance consistent with industry practice.
However, adequate liability insurance may not be available to us and the
contracted radiology practices in the future at acceptable costs or at all.
Providing medical services entails the risk of professional malpractice
and other similar claims. The physicians employed by the contracted radiology
practices are from time to time subject to malpractice claims. We structure our
relationships with the practices under our agreements with them in a manner
that we believe does not constitute the practice of medicine by us or subject
us to professional malpractice claims for acts or
omissions of physicians in the contracted radiology practices. Nevertheless,
claims, suits or complaints relating to services
4
Table of Contents
provided by the contracted
radiology practices may be asserted against us in the future, including
malpractice.
Any claim made against us not fully covered by insurance could be costly
to defend against, result in a substantial damage award against us and divert
the attention of our management from our operations, which could have an
adverse effect on our financial performance. In addition, claims might
adversely affect our business or reputation.
We
have assumed substantially all of the obligations of
some of the operations that we have acquired. Therefore, claims may be asserted
against us for events that occurred prior to these acquisitions. In connection
with our acquisitions, the sellers of the operations that we have acquired have
agreed to indemnify us for certain claims. However, we may not be able to
collect payment under these indemnity agreements, which could affect us
adversely.
Most of our imaging modalities require the utilization of radiation, and
certain imaging modalities utilize radioactive materials. These operations
generate regulated waste and could subject us to regulation, related costs and
delays and potential liabilities for injuries or violations of environmental,
health and safety laws.
Most of our imaging modalities utilize radiation, and certain imaging
modalities utilize radioactive material. These operations generate medical and
other regulated wastes. Storage, use and disposal of these materials and waste
products present the risk of accidental environmental contamination and
physical injury. We are subject to federal, state and local regulations
governing storage, handling and disposal of these materials. We cannot
completely eliminate the risk of accidental contamination or injury from these
hazardous materials. In the event of an accident, we would be held liable for
any resulting damages, and any liability could exceed the limits of or fall
outside the coverage of our insurance. We may not be able to maintain insurance
on acceptable terms, or at all. We could incur significant costs and the
diversion of our management's attention to comply with current or future
environmental, health and safety laws and regulations.
We may experience competition from other diagnostic imaging companies. This
competition could adversely affect our revenue and our business.
The market for diagnostic imaging services is competitive. We compete
principally on the basis of our reputation for providing multiple modalities,
our conveniently located centers and our cost-effective, high-quality
diagnostic imaging services. We compete locally with groups of radiologists and
some non-radiologist physician practices, established hospitals, clinics and
certain other independent organizations that own and operate imaging equipment.
Our major national competitors include Alliance Imaging, Inc., InSight Health
Services Corp., Medical Resources, Inc., and Syncor International Corporation.
Some of our local or national competitors that provide diagnostic imaging
services may now or in the future have access to greater financial resources
than we do and may have access to newer, more advanced equipment.
Technological change in our industry could reduce the demand for our services
and require us to incur significant costs to upgrade our equipment.
Technological change in the diagnostic imaging industry has been gradual.
In the future, however, the development of new technologies or refinements
of existing modalities may make our existing equipment technologically or
economically obsolete, or cause a reduction in the
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value of, or reduce the need for, our services. Diagnostic imaging equipment is
currently manufactured by numerous companies. Competition among manufacturers
for a greater share of the diagnostic imaging equipment market may result in
technological advances in the speed and imaging capacity of new equipment.
Consequently, the obsolescence of our equipment may be accelerated. We may not
have the financial ability to acquire the new or improved equipment.
A failure to meet our capital expenditure requirements could adversely affect
our business.
We operate in a capital intensive, high fixed-cost industry that requires
significant amounts of capital to fund operations, particularly the initial
start-up and development expenses of new diagnostic imaging centers and the
acquisition of additional centers and new diagnostic imaging equipment. We
incur capital expenditures to, among other things:
•
upgrade and replace existing equipment;
•
purchase new diagnostic imaging equipment; and
•
expand within our existing markets and enter new markets.
To the extent we are unable to generate sufficient cash from our
operations, funds are not available under our credit facility or we are unable
to structure or obtain operating leases, we may be unable to meet our capital
expenditure requirements. Furthermore, we may not be able to raise any
necessary additional funds through bank financing or the issuance of equity or
debt securities on terms acceptable to us, if at all.
Our success depends in part on our key personnel and we may not be able to
retain sufficient qualified personnel.
Our success depends in part on our ability to attract and retain qualified
senior and executive management, managerial and technical personnel.
Competition in recruiting these personnel may make it difficult for us to
continue our growth and success. The loss of their services or our inability in
the future to attract and retain management and other key personnel could
hinder the implementation of our business strategy. We do not maintain key
person insurance for any of our executive officers. Recently, there has been a
shortage in certain of our markets of qualified radiology technologists, the
personnel who operate our equipment. If we are unable to recruit and retain a
sufficient number of qualified technologists, we will be unable to operate our
centers at maximum capacity or we will be forced to staff our diagnostic
imaging centers with temporary personnel, thereby increasing our operating
costs and reducing our operating margin profitability.
Our inability to enforce non-compete agreements with the radiologists may
increase competition.
Each of the contracted radiology practices under our comprehensive
services model has entered into agreements with its physician shareholders and
full-time employed radiologists that generally prohibit those shareholders and
radiologists from competing for a period of two years within defined geographic
regions after they cease to be owners or employees, as applicable. In most
states, a covenant not to compete will be enforced only:
•
to the extent it is necessary to protect a legitimate business interest of the party
seeking enforcement;
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•
if it does not unreasonably restrain the party against whom enforcement is sought; and
•
if it is not contrary to public interest.
Enforceability of a non-compete covenant is determined by a court based on
all of the facts and circumstances of the specific case at the time enforcement
is sought. For this reason, it is not possible to predict whether, or to what
extent, a court will enforce the contracted radiology practices' covenants. The
inability of the contracted radiology practices or us to enforce radiologists'
non-compete covenants could result in increased competition from individuals
who are knowledgeable about our business strategies and operations.
It is difficult to estimate our uncollectible accounts receivable and
contractual allowances for billed charges, which may impact our earnings.
Due to the complex nature of billing for healthcare services, it is
difficult for us to estimate our uncollectible accounts receivable and our
contractual allowances for billed charges. If we have to revise our estimates
and our existing reserves are not adequate, this may impact our earnings.
Our ability to maximize the use of our diagnostic imaging equipment may be
subject to seasonality.
During the summer months of 2002, our average daily diagnostic imaging
procedures decreased, which adversely affected our service fee revenues during
those months. The decrease in average daily diagnostic imaging procedures may
have resulted from referring physicians or their patients taking vacation. We
cannot give any assurance that our future procedure volume and service fee
revenues will not be adversely affected by similar circumstances during the
summer months or other traditional vacation times of the year.
In 2003, harsh weather conditions on the east coast during January and
February and a hurricane in September adversely affected our service fee
revenues during those months. We cannot give any assurance that our future
procedure volume and service fee revenues will not be adversely affected by
similar circumstances during the year.
Managed care contracts and capitated fee arrangements could reduce our
operating margins.
For the six months ended June 30, 2004, approximately 95% of revenue
generated at our diagnostic imaging centers was derived from payments made on a
fee-for-service basis and approximately 5% was derived from capitated
arrangements. Under capitated or other risk-sharing arrangements, the
healthcare provider typically is paid a pre-determined amount per-patient
per-month from the payor in exchange for providing all necessary covered
services to patients covered under the arrangement. These contracts pass much
of the financial risk of providing outpatient diagnostic imaging services,
including the risk of over-use, from the payor to the provider. Our success
will depend in part on our ability to negotiate effectively, on behalf of the
contracted radiology practices and the diagnostic imaging centers that we own,
operate or manage, contracts with HMOs, employer groups and other third-party
payors for services to be provided on a risk-sharing or capitated basis by some
or all of the radiology practices and/or diagnostic imaging centers.
Risk-sharing arrangements result in better revenue predictability, but more
unpredictability of expenses and, consequently, profitability. We may not be
able to negotiate satisfactory arrangements on a capitated or other
risk-sharing basis, on behalf of our
diagnostic imaging centers or the contracted radiology practices. In
addition, to the extent that patients or enrollees covered by these contracts
require more frequent or extensive care than
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anticipated, we would incur
unanticipated costs not offset by additional revenue, which would reduce
operating margins.
We may be unable to generate revenue when our equipment is not operational.
Timely, effective service is essential to maintaining our reputation and
high utilization rates on our imaging equipment. Our warranties and maintenance
contracts do not compensate us for loss of revenue when our systems are not
fully operational. Equipment manufacturers may not be able to perform repairs
or supply needed parts in a timely manner. Thus, if we experience more
equipment malfunctions than anticipated or if we are unable to promptly obtain
the service necessary to keep our equipment functioning effectively, our
revenue could decline and our ability to provide services would be harmed.
Our corporate organizational documents could discourage acquisition proposals
and make difficult a change of control.
Certain provisions of Radiologix's Restated Certificate of Incorporation,
as amended, Radiologix's Amended and Restated Bylaws and Delaware law could
discourage potential acquisition proposals, delay or prevent a change in
control of Radiologix and, consequently, limit the price that investors might
be willing to pay in the future for shares of our common stock. These
provisions include the inability to remove directors except for cause and our
ability to issue, without further stockholder approval, shares of preferred
stock with rights and privileges senior to the common stock. We are also
subject to Section 203 of the Delaware General Corporation Law which, subject
to certain exceptions, prohibits a Delaware corporation from engaging in any of
a broad range of business combinations with an "interested stockholder" for
three years after the stockholder became an interested stockholder.
We have also entered into employment agreements with our executive
officers, which contain provisions that require us to pay certain amounts to
the executives upon their termination following a change of control. These
agreements may delay or prevent a change of control of Radiologix.
Risks Relating to Government Regulation of Our Business
State and federal anti-kickback and anti-self-referral laws may adversely
affect our income.
Various federal and state laws govern financial arrangements among
healthcare providers. The federal anti-kickback law prohibits the knowing and
willful offer, payment, solicitation or receipt of any form of remuneration in
return for, or to induce, the referral of Medicare, Medicaid, or other federal
healthcare program patients, or in return for, or to induce, the purchase,
lease or order of items or services that are covered by Medicare, Medicaid, or
other federal healthcare programs. Similarly, many state laws prohibit the
solicitation, payment or receipt of remuneration in return for, or to induce
the referral of patients in private as well as government programs. Violation
of these anti-kickback laws may result in substantial civil or criminal
penalties for individuals or entities and/or exclusion from federal or state
healthcare programs. We believe that we are operating in compliance with
applicable law and believe that our arrangements with providers would not be
found to violate the anti-kickback laws. However, these laws could be
interpreted in a manner inconsistent with our operations.
Federal law prohibiting physician self-referrals (the "Stark Law")
prohibits a physician from referring Medicare or Medicaid patients to an entity
for certain "designated health services" if the
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physician has a prohibited
financial relationship with that entity, unless an exception applies. Certain
radiology services are considered "designated health services" under the Stark
Law. Although we believe that our operations do not violate the Stark Law, our
activities may be challenged. If a challenge to our activities is successful,
it could have an adverse effect on our operations. In addition, legislation may
be enacted in the future that further addresses Medicare and Medicaid fraud and
abuse or that imposes additional requirements or burdens on us.
All of the states in which our diagnostic imaging centers are located have
adopted a form of anti-kickback law and almost all of those states have also
adopted a form of Stark Law. The scope of these laws and the interpretations of
them vary from state to state and are enforced by state courts and regulatory
authorities, each with broad discretion. A determination of liability under the
laws described in this risk factor could result in fines and penalties and
restrictions on our ability to operate in these jurisdictions.
Enforcement of federal and state privacy and associated laws may adversely
affect our income.
How providers and their business associates use and disclose certain
healthcare information has come under increasing public sensitivity and
scrutiny. Additional risks for healthcare providers and their business
associates are posed by the new HIPAA federal standards, which set forth
guidelines concerning how individually-identifiable health information may be
used and disclosed. Historically, state law has governed confidentiality
issues. But as a result of the enactment of HIPAA, some states are considering
revisions to their existing laws and regulations. These changes may or may not
be consistent with the federal HIPAA provisions. As a provider of healthcare
services, we must conform to all applicable laws, both federal and state. We
believe that our operations are compliant with these legal standards.
Nevertheless, these laws and regulations are new and few have been interpreted
by government regulators or courts. Consequently, our interpretations and
activities may be challenged. If a challenge to our activities is successful,
it could have an adverse effect on our operations.
Federal False Claims Act violations could affect our participation in
government programs.
The Federal False Claims Act provides, in part, that the federal
government may bring a lawsuit against any person whom it believes has
knowingly presented, or caused to be presented, a false or fraudulent request
for payment from the federal government, or who has made a false statement or
used a false record to get a claim approved. The Federal False Claims Act
further provides that a lawsuit thereunder may be initiated in the name of the
United States by an individual who is an original source of the allegations.
The government has taken the position that claims presented in violation of the
federal anti-kickback law or Stark Law may be considered a violation of the
Federal False Claims Act. Penalties include fines ranging from $5,500 to 11,000
for each false claim, plus three times the amount of damages that the federal
government sustained because of the act of that person. We believe that we are
in compliance with the rules and regulations that apply to the Federal False
Claims Act. However, we could be found to have violated certain rules and
regulations resulting in sanctions under the Federal False Claims Act. If we
are found in violation, any sanctions imposed could result in fines and
penalties and restrictions on and exclusions from participation in federal and
state healthcare programs that are integral to our business.
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Our agreements with the contracted radiology practices must be structured to
avoid the corporate practice of medicine and fee-splitting.
The laws of many states, including many of the states in which the
contracted radiology practices are located, prohibit us from exercising control
over the medical judgments or decisions of physicians and from engaging in
certain financial arrangements, such as splitting professional fees with
physicians. These laws and their interpretations vary from state to state and
are enforced by state courts and regulatory authorities, each with broad
discretion. A component of our business has been to enter into service
agreements with
radiology practices. We provide management, administrative, technical and
other non-medical services to the radiology practices in exchange for a service
fee. We structure our relationships with the radiology practices, including the
purchase of diagnostic imaging centers, in a manner that we believe keeps us
from engaging in the practice of medicine or exercising control over the
medical judgments or decisions of the radiology practices or their physicians
or violating the prohibitions against fee-splitting. State regulatory
authorities or other parties may assert that we are engaged in the corporate
practice of medicine or that the payment of service fees to us by the radiology
practices constitutes fee-splitting. If such a claim were successfully
asserted, we could be subject to civil and criminal penalties and could be
required to restructure or terminate the applicable contractual arrangements.
This result, or our inability to successfully restructure our relationships to
comply with these statutes, could jeopardize our business strategy.
Licensing and certification laws may limit our ability to expand.
Ownership, construction, operation, expansion and acquisition of
diagnostic imaging centers are subject to various federal and state laws,
regulations and approvals concerning licensing of centers, personnel,
certificates of need and other required certificates for certain types of
healthcare centers and major medical equipment. The laws of some of the states
in which we operate limit our ability to acquire new diagnostic imaging
equipment or expand or replace our existing equipment at diagnostic imaging
centers in those states. In addition, free-standing diagnostic imaging centers
that provide services that are not performed as part of a physician office must
meet Medicare requirements to be certified as an independent diagnostic testing
facility to bill the Medicare and Medicaid programs. We may not be able to
receive the required regulatory approvals for any future acquisitions,
expansions or replacements, and the failure to obtain these approvals could
limit the market for our services.
The regulatory framework is uncertain and evolving.
Healthcare laws and regulations may change significantly in the future. We
continuously monitor these developments and modify our operations from time to
time as the regulatory environment changes. We cannot assure you, however, that
we will be able to adapt our operations to address new regulations or that new
regulations will not adversely affect our business. In addition, although we
believe that we are operating in compliance with applicable federal and state
laws, neither our current or anticipated business operations nor the operations
of the contracted radiology practices have been the subject of judicial or
regulatory interpretation. We cannot assure you that a review of our business
by courts or regulatory authorities will not result in a determination that
could adversely affect our operations or that the healthcare regulatory
environment will not change in a way that restricts our operations.
Certain states have enacted statutes or adopted regulations affecting risk
assumption in the healthcare industry, including statutes and regulations that
subject any physician or physician network engaged in risk-based managed care
contracting to applicable insurance laws and regulations. These laws and
regulations may require physicians and physician
networks to meet minimum capital requirements and other safety and
soundness requirements. Implementing additional regulations or compliance
requirements could result in substantial costs
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to us and the contracted
radiology practices and limits our ability to enter into capitated or other
risk sharing managed care arrangements.
We could be harmed if we are unable to timely continue to comply with HIPAA
Standard Transaction and Code Set Requirements.
The administrative provisions of HIPAA direct the federal government to
adopt national electronic standards for automated transfer of certain
healthcare data between healthcare payors, plans and providers. HIPAA is
designed to enable the entire healthcare industry to communicate electronic
data using a single set of standards, thus eliminating all nonstandard formats
currently in use. Our contracted radiology practices and diagnostic imaging
centers are "covered entities" under HIPAA, and as such, had to comply with the
HIPAA electronic data interchange mandates by the October 16, 2003 deadline. We
are able to produce compliant transactions and we continue to test with our
trading partners to ensure that there are no unexpected claim or payment
delays. We believe we will continue to experience some cash flow disruption once CMS
and other payor contingency plans for noncompliant transactions are no longer
in effect. A failure in our continued ability to comply with HIPAA Standards or
the discontinuance of CMS or payor contingency plans could cause us to
experience a delay in our claims processing by our payors or lead to a large
number of rejected or denied claims. Either of these results may slow our cash
collections and increase our accounts receivable days sales outstanding.
We could be harmed if we experience delayed payments from third-party payors
who have not complied with HIPAA EDI requirements.
In September 2003, CMS announced that it would implement a contingency
plan to accept noncompliant electronic transactions after the October 16, 2003
compliance deadline to ensure processing of claims from providers who could not
meet the deadline and otherwise would have had their Medicare claims rejected.
CMS will regularly reassess provider readiness and determine how long the
contingency plan will be in effect. We may continue to experience a delay in claims
processing by our payors or experience a large number of rejected or denied
claims. Either of these results may slow our cash collections and increase our
accounts receivable days sales outstanding.
While we have taken steps to mitigate this risk by meeting with our payors
to assess their HIPAA EDI readiness and discussing payment contingency plans,
there can be no assurance that we will be able to maintain sufficient cash on
hand and capacity under our existing credit facility to supplement the expected
cash-flow shortfalls. If our cash reserves or credit lines prove to be
insufficient for our cash flow needs, our business and operations could be
adversely affected. This, in turn, may limit our access to capital for growth.
Risks Related to Notes
Our substantial level of indebtedness could adversely affect our financial
condition and prevent us from fulfilling our obligations on our notes or notes
issued to replace them.
At June 30, 2004, we had approximately $171.0 million of indebtedness. In
addition, we have the ability to borrow up to $35 million under our credit
facility and up to $60 million under our master lease credit agreement. Also,
subject to restrictions in the indenture and the credit facility, we may incur
additional indebtedness.
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Our high level of indebtedness could have important consequences,
including the following:
•
our ability to obtain additional financing for working capital,
capital expenditures, acquisitions or general corporate purposes may
be impaired;
•
we must use a substantial portion of our cash flow from operations to
pay interest on our notes and our other indebtedness, which will
reduce the funds available to us for other purposes;
•
all of the indebtedness outstanding under the credit facility is
secured by substantially all of our assets and will mature prior to
any notes;
•
our high level of indebtedness could place us at a competitive
disadvantage to our competitors that have less debt;
•
our high level of indebtedness makes us more vulnerable to economic
downturns and adverse developments in our business.
We expect to obtain the money to pay our expenses and to pay the amounts
due under our notes and other debt from our operations and from borrowings
under our credit facility and master lease credit facility. Our ability to meet
our expenses thus depends on our future performance, which will be affected by
financial, business, economic and other factors. We will not be able to control
many of these factors, such as economic conditions in the markets where we
operate and pressure from competitors. Our business may not generate sufficient
cash flow from operations in the future, our currently anticipated growth in
revenue and cash flow may not be realized on schedule and future borrowings may
not be available to us under our credit facility in an amount sufficient to
enable us to repay indebtedness, including our notes, or to fund other
liquidity needs. If we do not have enough money, we may be required to
refinance all or part of our then existing debt (including our notes), sell
assets or borrow more money. We cannot guarantee that we will be able to do so
on terms acceptable to us, or at all. In addition, the terms of existing or
future debt agreements, including our credit facility and any indenture, may
restrict us from adopting any of these alternatives. The failure to generate
sufficient cash flow or to achieve these alternatives could significantly
adversely affect the value of our notes and our ability to pay the amounts due
under them.
Because our notes are unsecured, the right to enforce remedies is limited by
the rights of holders of secured debt.
Our notes are not secured. Our credit facility is secured by substantially
all of our assets and a pledge of the capital stock of all of our wholly owned
subsidiaries. If we become insolvent or are liquidated, or if any payment under
the credit facility is accelerated, our lenders will be entitled to exercise
the remedies available to a secured lender under applicable law and will have a
claim on those assets before the holders of any notes. The liquidation value of
our assets may not be sufficient to repay in full any indebtedness under the
credit facility, as well as our other indebtedness, including our notes.
Our ability to repay our notes and our other debt depends on cash flow from our
subsidiaries, some of which are not obligated to make funds available to make
payments on notes.
We are a holding company. Our only material assets are our ownership
interests in our subsidiaries. Consequently, we depend on distributions or
other intercompany transfers of funds
from our subsidiaries to meet our debt service and other obligations,
including with respect to
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our notes. Our non-guarantor subsidiaries are not
obligated to make funds available for payment on our notes. Only our
subsidiaries that are not unrestricted subsidiaries will guarantee our notes.
The financial statements included in this report are presented on a
consolidated basis, including all of our subsidiaries. The aggregate total
assets at June 30, 2004, of our subsidiaries that are not guarantors of our
notes were $3.2 million, or 1.2% of our total assets at June 30, 2004. The
operating results of our guarantor subsidiaries may not be sufficient to enable
us to make payments on our notes. In addition, our rights and the rights of our
creditors, including holders of our notes, to participate in the assets of any
of our non-guarantor subsidiaries upon their liquidation or recapitalization
will generally be subject to the prior claims of those subsidiaries' creditors.
As a result, our notes are effectively subordinated to the indebtedness of the
non-guarantor subsidiaries. As of June 30, 2004, the total liabilities of our
non-guarantor subsidiaries, excluding intercompany liabilities, were $1.7
million.
The indenture for our notes and our credit facility impose significant
operating and financial restrictions, which may prevent us from pursuing
certain business opportunities and taking certain actions.
The indenture for our notes and our credit facilities impose significant
operating and financial restrictions on us. These restrictions limit our
ability to, among other things:
•
borrow money;
•
pay dividends on or redeem or repurchase our stock;
•
make investments;
•
create liens;
•
sell certain assets or merge with or into other companies;
•
enter into certain transaction with affiliates;
•
sell stock in our subsidiaries; and
•
restrict dividends, distributions or other payments from our subsidiaries.
If we are unable to access the full $35 million under our credit facility, our
ability to meet our capital expenditure requirements may be restricted.
Our borrowing availability under our $35 million credit facility is
determined through a formula, which allows us to borrow up to 85% of eligible
accounts receivable, as defined under the credit facility. If we are unable to
generate sufficient eligible accounts receivable, then we may not be able to
borrow the full $35 million. To the extent that financing under the credit
facility, or other financing sources is not available to us or we are not able
to generate sufficient cash through operations, we may be restricted in our
ability to meet capital expenditure requirements.
A court could cancel the guarantees under certain circumstances.
Each of our subsidiaries that is not an unrestricted subsidiary guarantees
our notes. If, however, a guarantor becomes a debtor in a case under the United
States Bankruptcy Code or encounters other financial difficulty, under federal
or state fraudulent conveyance laws a court might avoid (that is, cancel) its
guarantee. The court might do so if it found that, when the guarantor entered
into its guarantee or, in some states, when payments became due under its
guarantee, it (i) received less than reasonably equivalent value or fair
consideration for the
guarantee and (ii) either (a) was or was rendered insolvent, (b) was left
with inadequate capital
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to conduct its business, or (c) believed or should have
believed that it would incur debts beyond its ability to pay. The court might
also avoid a guarantee, without regard to the above factors, if it found that
the guarantor entered into its guarantee with actual intent to hinder, delay,
or defraud its creditors.
A court would likely find that a guarantor did not receive reasonably
equivalent value or fair consideration for its guarantee unless it benefited
directly or indirectly from the issuance of our notes. If a court avoided a
guarantee, a note holder would no longer have a claim against the guarantor. In
addition, the court might direct a note holder to repay any amounts already
received from the guarantor. If the court were to avoid any guarantor's
guarantee, we cannot assure a note holder that funds would be available to pay
our notes from another guarantor or from any other source.
The test for determining solvency for purposes of the foregoing will
depend on the law of the jurisdiction being applied. In general, a court would
consider an entity insolvent either if the sum of its existing debts exceeds
the fair value of all its property, or if the present fair saleable value of
its assets is less than the amount required to pay the probable liability on
its existing debts as they become due. For this analysis, "debts" includes
contingent and unliquidated debts.
The indenture states that the liability of each guarantor on its guarantee
is limited to the maximum amount that the subsidiary can incur without risk
that the guarantee will be subject to avoidance as a fraudulent conveyance.
This limitation may not protect the guarantees from a fraudulent conveyance
attack or, if it does, that the guarantees will be in amounts sufficient, if
necessary, to pay obligations under our notes when due.
We may not be able to satisfy our obligations to holders of our notes upon a
change of control.
Upon the occurrence of a "change of control," as defined in our indenture,
a note holder will have the right to require us to purchase our notes at a
price equal to 101% of the principal amount, together with any accrued and
unpaid interest and liquidated damages, if any, to the date of purchase. Our
failure to purchase, or give notice of purchase of, our notes would be a
default under the indenture, which would in turn be a default under our senior
credit facility. Moreover, our failure to repay all amounts outstanding under
our senior credit facility upon a default would also be a default under the
indenture.
In addition, a change of control may constitute an event of default under
our credit facility. A default under our credit facility will result in an
event of default under the indenture if the lenders accelerate the debt under
our senior credit facility.
If a change of control occurs, we may not have enough assets to satisfy
all obligations under our credit facility and the indenture related to our
notes. Upon the occurrence of a change of control, we could seek to refinance
the indebtedness under our credit facility and our notes or obtain a waiver
from the lenders or the note holders. We may not be able to obtain a waiver or
refinance our indebtedness on commercially reasonable terms, if at all.
No established trading market exists for our notes, and note holders may not be
able to sell them quickly or at the price that note holders paid.
We do not intend to list our notes on any securities exchange or to
arrange for quotation on any automated dealer quotation system. Jefferies &
Company, Inc. and Deutsche Banc Alex
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Brown make a market in the notes, but they
are not obligated to do so. They may discontinue any market making at any time,
in their sole discretion. As a result, we cannot assure you as to the liquidity
of any trading market for the notes.
Note holders may not be able to sell notes at a particular time or at
favorable prices. We also cannot assure note holders as to the level of
liquidity of the trading market for the notes. As a result, note holders may be
required to bear the financial risk of their investment in the notes
indefinitely. Future trading prices of the notes may be volatile and will
depend on many factors, including:
•
our operating performance and financial condition;
•
the interest of securities dealers in making a market for our notes; and
•
the market for similar securities.
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ABOUT OUR COMPANY
As used in this prospectus, "we" or "Radiologix" refers to Radiologix,
Inc., a Delaware corporation, and all of its subsidiaries, unless the context
indicates otherwise. Our common stock is listed on the American Stock Exchange
under the symbol "RGX."
We are a leading national provider of diagnostic imaging services through
our ownership and operation of free-standing, outpatient diagnostic imaging
centers. We utilize sophisticated technology and technical expertise to perform
a broad range of imaging procedures, such as magnetic resonance imaging (MRI),
computed tomography (CT), positron emission tomography (PET), nuclear medicine,
ultrasound, mammography, bone densitometry (DEXA), general radiography (X-ray)
and fluoroscopy. For the six months ended June 30, 2004, we derived 82% of our
service fee revenue from the ownership, management and operation of our imaging
center network and 18% of our service fee revenue from administrative,
management and information services provided to contracted radiology practices.
As of June 30, 2004, we owned, operated or maintained an ownership interest in
imaging equipment at 94 locations. As of June 30, 2004, our imaging centers
were located in 13 states, including markets in California, Florida, Kansas,
Maryland and New York. Effective April 30, 2004, we sold our operations in San
Antonio, Texas, to Vanguard Health Systems, Inc.
We focus on providing quality patient care and service to ensure patient
and referring physician satisfaction. We develop comprehensive radiology
networks by investing in technologically advanced imaging equipment, and in
high quality service. Our consolidation of diagnostic imaging centers in
certain markets improves response time, increases overall patient
accessibility, permits us to standardize procedures and aids us in developing
best practices. We seek the input and participation of the contracted radiology
practices to which we provide administrative, management and information
services to improve productivity and the quality of services. By focusing on
further improving and standardizing the operations of our diagnostic imaging
centers, we believe that we can increase patient and referring physician
satisfaction, reduce our costs and increase utilization at our diagnostic
imaging centers.
We contract with radiology practices to provide professional services,
including the supervision and interpretation of imaging procedures performed in
our centers. We do not engage in the practice of medicine nor do we employ
physicians. Our radiologists maintain full control over the provision of
professional radiological services. We believe the contracted radiology
practices generally have outstanding physician and practice credentials and
reputations; strong competitive market positions; a broad sub-specialty mix of
physicians; a history of past growth and potential for future growth; and a
willingness to continually improve the delivery of diagnostic imaging services.
Service fee revenue is comprised of billed charges for both the technical
and professional components of service, reduced by estimated contractual
adjustments and by amounts retained by contracted radiology group practices for
their professional services, as outlined in our service agreements. Revenue is
recognized when services are rendered by contracted radiology practices, the
imaging centers, or both. Contractual adjustments and bad debt expense are
estimated based on historical collection experience, including payor mix,
managed care contract pricing and contract revenue and the aging of patient
accounts receivable balances. As these factors change, revisions are made as
appropriate in the period known.
The Company's service fee revenue is dependent upon the operating results
of the contracted radiology practices and diagnostic imaging centers. Where
state law allows, service
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fees due under the service agreements for the contracted radiology
practices are derived from two distinct revenue streams: (1) a negotiated
percentage (typically 20% to 30%) of the professional revenues, reduced by
certain expenses, as defined in the service agreements; and (2) 100% of the
adjusted technical revenues as defined in the service agreements. In states
where the law requires a flat fee structure, the Company has negotiated a base
service fee, which approximates the estimated fair market value of the services
provided under the service agreements and which is renegotiated each year.
Our diagnostic imaging centers are also principally dependent on our
ability to attract referrals from primary care physicians, specialists and
other healthcare providers. The referral often depends on the existence of a
contractual arrangement with the referred patient's health benefit plan. The
Company has contracts with health benefit plans representing many of the
patients in the markets we serve.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
Throughout this prospectus we make "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking
statements include words such as "may," "will," "would," "could," "likely,"
"estimate," "intend," "plan," "continue," "believe," "expect" or "anticipate"
and other similar words and include all discussions about our acquisition and
development plans. We do not guarantee that the transactions and events
described in this report will happen as described or that any positive trends
noted in this report will continue. The forward-looking statements contained in
this report are generally located in the material set forth under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", but may be found in other locations as well. These forward-looking
statements generally relate to our plans, objectives and expectations for
future operations and are based upon management's reasonable estimates of
future results or trends. Although we believe that our plans and objectives
reflected in or suggested by such forward-looking statements are reasonable, we
may not achieve such plans or objectives. You are cautioned not to unduly rely
on such forward-looking statements when evaluating the information presented in
this report. You should read this report completely and with the understanding
that actual future results may be materially different from what we expect. We
will not update forward-looking statements even though our situation may change
in the future.
Specific factors that might cause actual results to differ from our
expectations include, but are not limited to:
•
economic, demographic, business and other conditions in our markets;
•
the highly competitive nature of the healthcare business;
•
a decline in patient referrals;
•
changes in the rates or methods of third-party reimbursement for
diagnostic imaging services;
•
the termination of our contracts with radiology practices;
•
the loss of a high percent of radiologists operating in our contracted radiology practices;
•
the ability to recruit and retain technologists;
•
the availability of additional capital to fund capital expenditure requirements;
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•
burdensome lawsuits against our contracted radiology practices and us;
•
reduced operating margins due to our managed care contracts and
capitated fee arrangements;
•
any failure by us to comply with state and federal anti-kickback
and anti-self referral laws or any other applicable healthcare
regulations;
•
changes in business strategy and development plans;
•
changes in federal, state or local regulations affecting the healthcare industry;
•
our substantial indebtedness, debt service requirements and liquidity constraints;
•
interruption of operations due to severe weather or other extraordinary events; and
•
risks related to our senior notes and healthcare securities generally.
A more comprehensive list of such factors is set forth in the Section
entitled "Risk Factors" beginning on page 2.
USE OF PROCEEDS
We will not receive any proceeds from any sale of shares of common stock
by the selling stockholders.
SELLING STOCKHOLDERS
This prospectus covers offers and sales from time to time by the selling
stockholders named below. The maximum number of shares that each selling
stockholder may sell is set forth next to his or her name.
Relationships with Radiologix
Maximum No. of
Name of Selling Stockholder
Since 2001
Shares
Derace L. Schaffer, M.D.
Director from 1996 to 2003, Consultant
100,000
Sharon Tolliver
Senior Vice President
100,000
Greg Samberson
Vice President, Finance
5,833
The selling stockholders do not currently own the shares included in the
table above. In 2003 each of the selling stockholders received an employee
stock option upon commencement of employment or other service with the Company.
These options were granted on substantially the same terms as options issued
under the Radiologix, Inc. 1996 Stock Option Plan. These options were granted
outside of the 1996 plan because an insufficient number of options remained
available for new grants at the time the selling stockholders' options were
granted. The selling stockholders may acquire the shares included in the table
from Radiologix by exercising their employee stock options and offer them for
resale pursuant to this prospectus.
As of the date of this prospectus, only Dr. Schaffer owns shares of
Radiologix's common stock other than the shares being offered by this
prospectus. He owns 573,242 shares directly and 170,000 options to purchase
shares of our common stock, including the shares covered by this prospectus.
We cannot state the number of our shares that the selling stockholders
will own beneficially after this offering terminates because we do not know how
many shares the selling stockholders will actually sell.
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Pursuant to Rule 416 of the Securities Act of 1933, the selling
stockholders may also offer and sell shares of common stock issued as a result
of stock splits, stock dividends and similar events.
PLAN OF DISTRIBUTION
This prospectus is intended to be used to comply with the prospectus
delivery requirements of the Securities Act of 1933 in connection with any
offers or resales. The selling stockholders, their pledgees, donees,
transferees or other successors-in-interest, may, from time to time, sell all
or a portion of their shares of common stock in privately negotiated
transactions or otherwise, at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to market prices or at
negotiated prices. The selling stockholders may sell their shares by any of the
following methods:
•
block trades in which a broker or dealer will attempt to sell
the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
•
purchases by a broker or dealer acting as principal for its
own account who resells pursuant to this prospectus;
•
an exchange distribution in accordance with the rules of the
American Stock Exchange;
•
ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
•
privately negotiated transactions;
•
short sales;
•
writing options on or other contractual agreements relating to the shares;
•
a combination of any such methods of sale; and
•
any other method permitted pursuant to applicable law.
From time to time the selling stockholders may enter into hedging
transactions with broker-dealers or otherwise, may engage in short sales, short
sales against the box, puts, calls and other transactions in Radiologix
securities, and may sell and deliver shares of common stock in connection with
these transactions or to settle securities loans. From time to time the
selling stockholders may pledge their shares of common stock pursuant to the
margin provisions of their customer agreements with their brokers. Upon a
default by the selling stockholders, their brokers may offer and sell the
pledged shares of common stock from time to time.
Broker-dealers engaged by the selling stockholders may arrange for other
broker-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if a broker-dealer acts as
agent for a purchaser of such shares, from the purchaser) in amounts to be
negotiated that are not expected to exceed those customary in the types of
transactions involved. Broker-dealers may agree with the selling stockholders
to sell a specified number of such shares at a stipulated price per share, and,
to the extent the broker-dealer is unable to do so acting as agent for the
selling stockholders, to purchase as principal any unsold shares at the price
required to fulfill the broker-dealer commitment to the selling stockholders.
Broker-dealers who acquire shares of common stock as principal may resell the
shares from time to time in transactions (that may involve block transactions
and sales to and through other broker-dealers, including transactions of the
nature described above) in the over-
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the-counter market or otherwise at prices and on terms then prevailing at
the time of sale, at prices then related to the then-current market price or in
negotiated transactions and, in connection with such resales, may pay to or
receive from the purchasers of such shares commissions as described above. The
selling stockholders may also sell the shares of common stock in open market
transactions in accordance with Rule 144 under the Securities Act of 1933,
rather than pursuant to this prospectus.
The selling stockholders and any broker-dealers or agents that participate
in sales of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933 in connection with the sales. In such event, any
commissions received by the broker-dealers or agents and any profit on resale
of the shares that they purchased may be deemed to be underwriting commissions
or discounts under the Securities Act of 1933.
At the time a particular offer of shares of common stock is made, if and
to the extent required, this prospectus will be accompanied by a prospectus
supplement setting forth the specific number of shares offered, the name of the
selling stockholder making the offer, the offering price, and the other terms
of the offering, including the names of any underwriters, agents, dealers and
brokers involved and their compensation, if any. Unless this prospectus is
accompanied by a prospectus supplement stating otherwise, offers and sales may
be made pursuant to this prospectus only in ordinary broker's transactions made
on the American Stock Exchange in transactions involving ordinary and customary
brokerage commissions.
The selling stockholders may enter into agreements (to which we may also
be a party) with underwriters, brokers, dealers and agents who participate in
distributing the shares, that require the selling stockholders and/or us to
indemnify them against certain liabilities, including under the Securities Act
of 1933, or to contribute to related payments that they may be required to
make. The underwriters, brokers, dealers and agents may engage in transactions
with, or perform services for, the selling stockholders and Radiologix in the
ordinary course of business.
To comply with certain state securities laws, the common stock will be
sold in those states only through registered or licensed broker-dealers. In
some other states the common stock may not be sold unless it has been
registered or qualified for sale in these states or a
registration/qualification exemption is available.
Radiologix will pay all fees and expenses of registering the common stock
other than fees and expenses of the selling stockholders.
LEGAL MATTERS
The validity of the shares of common stock offered by the selling
stockholders have been passed upon for Radiologix by its General Counsel,
Michael L. Silhol.
EXPERTS
Ernst & Young LLP, independent registered public accounting firm, have
audited our consolidated financial statements and schedule included in our
Annual Report on Form 10-K, as amended, for the year ended December 31, 2003,
as set forth in their report, which is incorporated by reference in this
prospectus and elsewhere in the registration statement. Our financial
statements (and schedule) are incorporated by reference in reliance on Ernst &
Young LLP's report, given on their authority as experts in accounting and
auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. Our SEC filings are
available to the public over the Internet at the SEC's Web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1(800) SEC-0330 for further information on the public
reference room.
This prospectus is part of a registration statement that we filed with the
SEC utilizing a "shelf" registration process. This prospectus provides you
with information about the various alternative methods by which the selling
stockholders may sell. In some cases the selling stockholders may be required
to provide additional information about the method by which they intend to
sell. We will provide a prospectus supplement containing specific information
about the terms of any such offering. The prospectus supplement may also add,
update or change information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with additional
information described under this heading "Where You Can Find More Information."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is an important part of this prospectus,
and information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until the selling
stockholders' offering is complete:
•
Annual Report on Form 10-K for the year ended December 31,
2003, and the amendments to that report;
•
All other reports that we filed pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934 after the end of the
year covered by our 2003 annual report; and
•
Description of our common stock under the caption
"Description of Radiologix Capital Stock" contained in Radiologix's
Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on May 9, 2000, and any amendment or report
filed to update that description.
We will provide these filings to any person, including any beneficial
owner, to whom this prospectus is delivered, at no cost, upon written or oral
request to Radiologix as follows:
3600 JP Morgan Chase Tower
2200 Ross Avenue
Dallas, Texas 75201-2776
Attn: Investor Relations
Telephone: (214) 303-2776
You should rely only on the information incorporated by reference or
provided in this
prospectus or a prospectus supplement. We have not authorized anyone else
to provide you with different information. The selling stockholder is not
offering these securities in any state where an offer is not permitted. You
should not assume that the information in this prospectus or a prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
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Until August 6, 2006, all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is in addition
to the dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
Table of Contents
RADIOLOGIX, INC.
3,205,833 Shares of Common Stock
PART II
INFORMATION REQUESTED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Radiologix, Inc. (the "Company") incorporates by reference the following
documents filed with the Securities and Exchange Commission (the "Commission"):
a)
The Company's latest Annual Report on Form 10-K filed
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act");
b)
All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year
covered by the Company's latest Annual Report on Form 10-K; and
c)
The description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed with the
Commission on November 3, 1997, pursuant to Section 12 of the
Exchange Act, together with an Amendment filed on November 3, 1997.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Under Section 145 of the Delaware General Corporation Law, the Company can
indemnify its directors and officers against liabilities they may incur in such
capacities, including under the Securities Act of 1933. The Company's bylaws
provide that the Company will indemnify its directors and officers to the
fullest extent permitted by law. The bylaws require the Company to advance
litigation expenses to a director or officer who has delivered to the Company a
written agreement to repay the advances to the Company in the event that the
director or officer is later found not to be entitled to indemnification. The
bylaws do not exclude any other right such persons may have or acquire under
any bylaw, agreement, vote of stockholders or disinterested directors or
otherwise.
The Company's restated certificate of incorporation, as amended, provides
that, pursuant to Delaware law, its directors will not be liable for monetary
damages for breach of the directors' fiduciary duty of care to the Company and
its stockholders. This provision does not eliminate the duty of care, and in
appropriate circumstances, equitable remedies under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to the Company or its stockholders, for acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws.
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The Company has entered into agreements to indemnify its directors and
certain of its officers in addition to the indemnification provided for in the
certificate of incorporation and bylaws. These agreements, among other things,
indemnify the Company's directors and certain of its officers for certain
expenses (including attorneys' fees), judgments, fines and settlement amounts
that they incur in any action or proceeding, including any action by or in the
right of the Company, on account of services as a director or officer of the
Company, or as a director or officer of any other company or enterprise to
which the person provides services at the request of the Company. The Company
maintains insurance against liabilities incurred by its officers and directors
in defense of actions to which they are made parties by reason of their
positions as officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 is permitted for directors, officers, or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
that, in the opinion of the Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is therefore
unenforceable. For this undertaking with respect to indemnification, see Item
9 herein.
Item 7. Exemption from Registration Claimed
In 2003, the Company granted employee and consultant stock options to
three individuals in private placements. The stock underlying those options is
being registered pursuant to this registration statement for reoffer or resale.
These grants were exempt from registration pursuant to Section 4(2) of the
Securities Act of 1933.
Item 8. Exhibits
Exhibit No.
Description of Exhibits
3.1
Restated Certificate of Incorporation, as amended.
3.2
Amended and Restated Bylaws, as amended (Incorporated by reference
to Exhibit 3.2 to the registrant's report on Form 10-Q for the quarter
ended June 30, 2004).
3.3
Amendment to Restated Certificate of Incorporation (Incorporated by
reference to Exhibit 3.4 to the registrant's report on Form 10-Q for
the quarter ended June 30, 1999).
3.5
Certificate of Amendment to the Restated Certificate of
Incorporation dated July 14, 2003 (Incorporated by reference to Exhibit
3.5 to the registrant's report on Form 10-Q for the quarter ended June
30, 2003).
4.1
Specimen Stock Certificate for the Common Stock of the Company filed as Exhibit 4.1 to Form S-1 (333-30205) and
incorporated here by reference.
4.2
Radiologix, Inc. 2004 Long-Term Incentive Compensation Plan, filed as Appendix C to the Company's definitive
2004 proxy statement and incorporated here by reference.
5.1*
Opinion of Michael L. Silhol, General Counsel.
23.1*
Consent of Ernst & Young LLP.
23.2*
Consent of Michael L. Silhol (included in Exhibit 5.1).
24.1*
Power of attorney (included on the signature page of the registration statement).
*
Filed herewith.
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Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i)
To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii)
To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided
,
however
, that paragraphs (a)(1)(i) and (a)(1)(ii) will not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial
bona fide
offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial
bona fide
offering thereof.
c. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses
II-3
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incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will , unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
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SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 6th day of August,
2004.
RADIOLOGIX , INC.
By:
/s/ Stephen D. Linehan
Name:
Stephen D. Linehan
Title:
President and Chief Executive Officer
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints each of Stephen D. Linehan and Michael L. Silhol, the
person's true and lawful attorneys-in-fact and agents, with full power of
substitution, for and in the person's name, place and stead, in any and all
capacities, to sign, execute and file with the Securities and Exchange
Commission and any state securities regulatory board or commission any
documents relating to the proposed issuance and registration of the securities
offered pursuant to this Registration Statement on Form S-8 under the
Securities Act of 1933, including any amendment or amendments (and any
additional related Registration Statement permitted by Rule 462(b) promulgated
under the Securities Act of 1933, including any amendment(s)), with all
exhibits and any and all documents required to be filed with any regulatory
authority, granting unto the attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises to effectuate the
same as fully to all intents and purposes as the person could do if personally
present.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on the 6th day of August, 2004.
Signature
Title
/s/ Stephen D. Linehan
President, Chief Executive Officer
and Director
Stephen D. Linehan
/s/ Richard J. Sabolik
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
Richard J. Sabolik
/s/ Clete D. Madden
Vice President and Corporate Controller
(Principal Accounting Officer)
Clete D. Madden
/s/ Marvin S. Cadwell
Director
Marvin S. Cadwell
/s/ Paul D. Farrell
Director
Paul D. Farrell
/s/ Joseph C. Mello
Director
Joseph C. Mello
/s/
Michael L. Sherman, M.D.
Director
Michael L. Sherman, M.D.
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EXHIBIT INDEX
Exhibit No.
Description of Exhibits
3.1
Restated Certificate of Incorporation, as amended.
3.2
Amended and Restated Bylaws, as amended (Incorporated
by reference to Exhibit 3.2 to the registrant's report
on Form 10-Q for the quarter ended June 30, 2004).
3.3
Amendment to Restated Certificate of Incorporation (Incorporated by
reference to Exhibit 3.4 to the registrant's report on Form 10-Q for
the quarter ended June 30, 1999).
3.5
Certificate of Amendment to the Restated Certificate of
Incorporation dated July 14, 2003 (Incorporated by reference to Exhibit
3.5 to the registrant's report on Form 10-Q for the quarter ended June
30, 2003).
4.1
Specimen Stock Certificate for the Common Stock of the Company
filed as Exhibit 4.1 to Form S-1 (333-30205) and incorporated here by
reference.
4.2
Radiologix, Inc. 2004 Long-Term Incentive Compensation Plan, filed
as Appendix C to the Company's definitive 2004 proxy statement and
incorporated here by reference.
5.1*
Opinion of Michael L. Silhol, General Counsel.
23.1*
Consent of Ernst & Young LLP.
23.2*
Consent of Michael L. Silhol (included in Exhibit 5.1).
24.1*
Power of attorney (included on the signature page of the registration statement).
*
Filed herewith.