# EDGAR Filing Document

**Accession Number:** 0000355019
**File Stem:** 0000355019-23-000009
**Filing Date:** 2023-2
**Character Count:** 34305
**Document Hash:** 0e502ce3c4389085b71d6e23d33a84ca
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000355019-23-000009.hdr.sgml**: 20230215

**ACCESSION NUMBER**: 0000355019-23-000009

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20221231

**ITEM INFORMATION**: Results of Operations and Financial Condition

**FILED AS OF DATE**: 20230215

**DATE AS OF CHANGE**: 20230215

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** FONAR CORP
- **CENTRAL INDEX KEY:** 0000355019
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
- **IRS NUMBER:** 112464137
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-10248
- **FILM NUMBER:** 23634917

**BUSINESS ADDRESS:**
- **STREET 1:** 110 MARCUS DR
- **CITY:** MELVILLE
- **STATE:** NY
- **ZIP:** 11747
- **BUSINESS PHONE:** 6316942929

**MAIL ADDRESS:**
- **STREET 1:** 110 MARCUS DRIVE
- **CITY:** MELVILLE
- **STATE:** NY
- **ZIP:** 11747

?xml version="1.0" encoding="utf-8"?

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Act of 1934

Date of Report (Date of earliest event reported): December 31, 2022

FONAR CORPORATION

______________________________________________________

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Delaware | &nbsp;&nbsp;0-10248 | &nbsp;&nbsp;11-2464137 |
| &nbsp;&nbsp;(State or other jurisdiction of incorporation) | &nbsp;&nbsp;(Commission File Number) | &nbsp;&nbsp;(I.R.S. Employer Identification No.) |
|  | &nbsp;&nbsp;110 Marcus Drive, Melville, New York 11747 <br>(631) 694-2929 |  |
|  | &nbsp;&nbsp;(Address, including zip code, and telephone number of registrant's principal executive office) |  |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communications pursuant to Rule 425 under the Securities Act 17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

Securities registered pursuant to Section 12(b) of the Act.

---

| | | |
|:---|:---|:---|
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
| Common Stock, $.0001 par value | FONR | Nasdaq Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Item 2.02(a) Results of Operations and Financial Condition.

We reported the results of operations and financial condition of the Company for the second Fiscal Quarter of Fiscal 2023 which ended December 31, 2022 in a press release dated February 14, 2023.

Exhibits:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [99.1 Press Release dated February 14, 2023.](fonar_exhibit-99.htm)

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FONAR CORPORATION

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)

-------------------------------------------

By /s/ Timothy R. Damadian

Timothy R. Damadian

President and CEO

Dated: February 15, 2023

## Ex-99

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;NEWS | &nbsp;&nbsp; ![](fonar_logo.jpg) |  |
| For Immediate Release |  | &nbsp;&nbsp;The Inventor of MR Scanning™ |
| Contact: Daniel Culver |  | &nbsp;&nbsp;An ISO 9001 Company |
| Director of Communications |  | &nbsp;&nbsp;Melville, New York 11747 |
| E-mail: investor@fonar.com |  | &nbsp;&nbsp;Phone: (631) 694-2929 |
| www.fonar.com |  | &nbsp;&nbsp;Fax: (631) 390-1772 |

---

**FONAR ANNOUNCES SIX MONTHS AND 2ND QUARTER FINANCIAL RESULTS FOR FISCAL 2023**

· Total
 MRI scan volume at the HMCA-managed sites decreased 5% to 89,888 scans for the six months
 ending December 31, 2022 versus the corresponding period one year earlier.

· Cash
 and cash equivalents and short-term investments increased 2% to $49.5 million at December
 31, 2022, versus the fiscal year ended June 30, 2022.

· Total
 Revenues-Net for the six month period ended December 31, 2022 decreased by 2% to $47.4 million,
 and for the quarter ended December 31, 2022 decreased by 1% to $24.3 million, versus corresponding
 periods one year earlier.

· Income
 from Operations for the six month period ended December 31, 2022 decreased 33% to $8.1 million,
 and for the quarter ended December 31, 2022 decreased 35% to $4.2 million, versus the corresponding
 periods one year earlier.

· Net
 Income for the six months ended December 31, 2022 decreased 47% to $5.5 million, and for
 the quarter ended December 31, 2022 decreased 45% to $2.8 million, versus corresponding periods
 one year earlier.

· Diluted
 Net Income per Common Share for the six month period ended December 31, 2022 decreased 46%
 to $0.60, and for the quarter ended December 31, 2022 decreased 44% to $0.32, versus the
 corresponding periods one year earlier.

· Net
 Book Value Per Common Share increased by 4% to $22.25 per share at December 31, 2022, versus
 the corresponding period one year earlier.

MELVILLE, NEW YORK, February 14, 2023 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported today its financial results for the fiscal 2023 six month period and quarter ended December 31, 2022. FONAR's primary source of income and growth is attributable to its diagnostic imaging management subsidiary, Health Management Company of America (HMCA). In 2009, HMCA managed 9 MRI scanners. Currently, HMCA manages 40 MRI scanners.

Financial Results

Total Revenues-Net for the six months ended December 31, 2022 decreased 2% to $47.4 million, as compared to $48.2 million for the corresponding six month period ended December 31, 2021.

![](fonar_logo.jpg)

Total Revenues-Net for the quarter ended December 31, 2022 decreased 1% to $24.3 million as compared to $24.4 million for the quarter ended December 31, 2021.

Income from Operations for the six months ended December 31, 2022 decreased 33% to $8.1 million as compared to $12.2 million for the corresponding six month period ended December 31, 2021.

Income from Operations for the quarter ended December 31, 2022 decreased 35% to $4.2 million as compared to $6.5 million for the corresponding quarter ended December 31, 2021.

Net Income for the six months ended December 31, 2022 decreased 47% to $5.5 million as compared to $10.3 million for the corresponding six month period ended December 31, 2021.

Net Income for the quarter ended December 31, 2022 decreased 45% to $2.8 million as compared to $5.1 million for the corresponding quarter ended December 31, 2021.

Diluted Net Income per Common Share Available to Common Stockholders for the six months ended December 31, 2022 decreased 46% to $0.60 as compared to $1.11 for the corresponding six month period ended December 31, 2021.

Diluted Net Income per Common Share Available to Common Stockholders for the quarter ended December 31, 2022 decreased 44% to $0.32 as compared to $0.57 for the corresponding quarter ended December 31, 2021.

Selling, general & administrative expenses (SG&A) for the six months ended December 31, 2022 increased 31% to $12.9 million as compared to $9.9 million for the corresponding six months ended December 31, 2021.

SG&A for the quarter ended December 31, 2022 increased 38% to $6.6 million, as compared to $4.8 million for the corresponding quarter ended December 31, 2021.

The increase in SG&A was almost exclusively due to more reserves being placed on management contracts and management fees and other receivables that had resulted from the COVID-19 pandemic. In addition, workforce shortages among both MRI technologists and administrative staff prevented the company from meeting patient demand at many of our sites. This problem with hiring of skilled personnel is not unique to HMCA, as the problem exists throughout the entire healthcare industry. The ever-increasing demand for MRI studies further exacerbates the situation. HMCA-managed sites have always competed with other MRI providers for patient referrals. Now the company is competing for employees as well. Also, at the end of September, hurricane Ian had a negative impact on scan volume in Florida although to a much lesser degree.

Operating Cash Flow at December 31, 2022 was $5.9 million, compared with $5.8 million for the six-month period ended December 31, 2021.

Cash and cash equivalents and short term investments were $49.5 million at December 31, 2022 as compared to $48.7 million at June 30, 2022.

![](fonar_logo.jpg)

Total Current Assets at December 31, 2022 were $120.7 million as compared to $118.7 million at June 30, 2022.

Total Assets were $197.5 million at December 31, 2022 as compared to $199.3 million at June 30, 2022.

Total Current Liabilities were $13.7 million at December 31, 2022 as compared to $16.7 million at June 30, 2022.

Total Liabilities at December 31, 2022 were $49.4 million, as compared to $53.1 million at June 30, 2022.

Total Stockholders' Equity at December 31, 2022 was $148.1 million, as compared to $146.2 million at June 30, 2022.

The ratio of Total Assets / Total Liabilities at December 31, 2022 was 4.0 as compared to 3.8 at June 30, 2022.

Working Capital increased 3% to $107.0 million at December 31, 2022 as compared to $101.9 million at June 30, 2022.

Net Book Value per Common Share increased 4% to $22.25 at December 31, 2022 as compared to $21.32 at December 31, 2021, one year ago.

Management Discussion

Timothy Damadian, Chairman, President and CEO of FONAR, said: "Scan volume at the HMCA-managed sites for the 6-month period ending on December 31, 2022 was 89,888, which was 5% lower than the scan volume in the corresponding period ending December 31, 2021 (94,460). However, scan volume improved by 2% in the last three months in comparison to the first three months of that 6-month period, from 44,476 to 45,412."

"Although it's been challenging returning to previous rates of scan volume growth, we are now making progress. I am pleased to report that the HMCA-managed sites have recently added 19 MRI technologists, which allows for expanded business hours and therefore higher scan volume."

"Staffing shortages continue to be problematic across the entire nation. According to Healthcare Finance News (Jan 5, 2022), healthcare has been the second largest industry sector hit by the "Great Resignation," with tens of thousands of workers abandoning their posts or the field altogether in the wake of the COVID-19 pandemic. On top of that, U.S. Bureau of Labor Statistics data point to a trend that more technologists will be needed to meet growing demand for imaging services. Accordingly, we have successfully developed and implemented innovative strategies for recruiting MRI technologists, as mentioned previously."

![](fonar_logo.jpg)

"As of December 31, 2022, HMCA was managing 40 MRI scanners, 25 in New York and 15 in Florida. We will add a new location in Casselberry, Florida in the third fiscal quarter, followed shortly thereafter by another location in the southern part of Bronx, New York. Both brand new facilities, they are ideal extensions of the existing HMCA networks in their respective regions and are expected to contribute significantly to the growth of our Company."

"I am grateful to our management team and all the HMCA employees who have admirably met the COVID and now the post-COVID challenges of the past few years and kept the Company profitable throughout."

"I would also like to report that pursuant to our September 13, 2022 announcement of a FONAR stock repurchase plan of up to $9 million, we have to date repurchased 53,607 shares at a cost of $922,593."

Company Event

On August 3, 2022, FONAR founder and The Father of MRI, Raymond V. Damadian, died at 86. Dr. Damadian was the Chairman of the Board at the time of his passing. Timothy R. Damadian, President and CEO of Fonar Corporation, succeeded his father as Chairman of the Board.

Dr. Damadian is sorely missed for his leadership and scientific achievement. Besides the discovery of the basis of MRI (1970) and the building of the world's first MRI scanner (1977), FONAR's founder Raymond V. Damadian had continued important research. On October 5, 2011, he and FONAR scientist David Chu, Ph.D. published a study on multiple sclerosis (MS), based on observations made possible by the Company's unique FONAR UPRIGHT® Multi-Position™ MRI.

Drs. Damadian and Chu co-authored a paper titled "The Possible Role of Cranio-Cervical Trauma and Abnormal CSF Hydrodynamics in the Genesis of Multiple Sclerosis." The paper has been published in the journal Physiological Chemistry and Physics and Medical NMR (Sept. 20, 2011, 41: 1-17).

Using the FONAR UPRIGHT® Multi-Position™ MRI, Drs. Damadian and Chu imaged and measured cerebrospinal fluid flow of eight MS patients. Their findings revealed that the cause of multiple sclerosis may be biomechanical and related to earlier trauma to the neck, which can result in obstruction of the flow of cerebrospinal fluid (CSF), which is produced and stored in the central anatomic structures of the brain known as the ventricles. Since the ventricles produce a large volume of CSF each day (500 cc), the obstruction can result in a build-up of pressure within the ventricles, resulting in leakage of the CSF into the surrounding brain tissue. The scientists concluded that the leakage could be responsible for generating the brain lesions of multiple sclerosis. The researchers believe that the unique ability of the FONAR MRI to scan patients in an upright position is what enabled them to arrive at this result.

The complete study on multiple sclerosis can be accessed at the company website at: www.fonar.com/pdf/PCP41_damadian.pdf. A press release can be found at FONAR NEWS-100511.

![](fonar_logo.jpg)

While recumbent based MRI is a common tool in research medicine, more research needs to be done using Upright MRI. Nevertheless, a paper using FONAR technology titled: Upright versus supine MRI: effects of body position on craniocervical CSF flow was published on December 24, 2021 in collaboration with Doctors Marco Muccio and Yulin Ge at the Bernard and Irene Schwartz Center for Biomedical Imaging, Department of Radiology, NYU Grossman School of Medicine, New York, NY.

The study consisted of 30 asymptomatic volunteers who were scanned in the UPRIGHT® Multi-Position™ MRI scanner designed and manufactured by FONAR. The objective of the study was to understand how CSF is driven by cardiovascular brain pulsation and how it is affected by body orientation, supine or upright.

In summary, body position has significant effects on CSF flow in and out of the cranium, with more CSF oscillating in supine compared to upright position. Such difference was driven by an increased caudo-cranial diastolic CSF velocity and an increased systolic phase duration when moving from upright to supine position. Extrapolation to a 24-hour timeframe suggests that more time spent in supine position increases total amount of CSF exchange between cranial and spinal CSF space, which may play a beneficial role in waste clearance in the brain.

The study is published in Fluids and Barriers of the CNS. This is an open access, peer-reviewed journal that considers manuscripts on all CNS fluids and barrier systems in health and disease. Its Web address is fluidsbarrierscns.biomedcentral.com. It may also be found at Upright versus supine MRI: effects of body position on craniocervical CSF flow - PubMed (nih.gov).

Dr. Damadian had believed at the time that research using the UPRIGHT® Multi-Position™ MRI might have profound implications for many neurodegenerative disorders including Chiari malformation, syringomyelia and Multiple Sclerosis (MS).

![](fonar_logo.jpg)

About FONAR

Fonar Corporation, the Inventor of MR Scanning™, located in Melville, NY, was incorporated in 1978, and is the first, oldest and most experienced MRI company in the industry. Fonar introduced the world's first commercial MRI in 1980, and went public in 1981. Fonar's signature product is the FONAR UPRIGHT® Multi-Position™ MRI (also known as the STAND-UP® MRI), the only whole-body MRI that performs Position™ Imaging (pMRI™) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. The FONAR UPRIGHT® MRI often detects patient problems that other MRI scanners cannot because they are lie-down,"weightless-only" scanners. The patient-friendly UPRIGHT® MRI has a near-zero patient claustrophobic rejection rate. As a Fonar customer states, "If the patient is claustrophobic in this scanner, they'll be claustrophobic in my parking lot." Approximately 85% of patients are scanned sitting while watching TV.

Fonar has new works-in-progress technology for visualizing and quantifying the cerebral hydraulics of the central nervous system, the flow of cerebrospinal fluid (CSF), which circulates throughout the brain and vertebral column at the rate of 32 quarts per day. This imaging and quantifying of the dynamics of this vital life-sustaining physiology of the body's neurologic system has been made possible first by Fonar's introduction of the MRI and now by this latest works-in-progress method for quantifying CSF in all the normal positions of the body, particularly in its upright flow against gravity. Patients with whiplash or other neck injuries are among those who will benefit from this new understanding.

Fonar's primary source of income and growth is attributable to its wholly-owned diagnostic imaging management subsidiary, Health Management Company of America (HMCA) www.hmca.com.

Fonar's substantial list of patents includes recent patents for its technology enabling full weight-bearing MRI imaging of all the gravity sensitive regions of the human anatomy, especially the brain, extremities and spine. It includes its newest technology for measuring the Upright cerebral hydraulics of the cerebrospinal fluid (CSF) of the central nervous system. FONAR UPRIGHT® Multi-Position™ MRI is the only scanner licensed under these patents.

#

This release may include forward-looking statements from the company that may or may not materialize. Additional information on factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.

![](fonar_logo.jpg)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

ASSETS

---

| | | |
|:---|:---|:---|
|  | December 31, <br> 2022 | June 30, <br> 2022 |
| Current Assets: |  |  |
| &nbsp;&nbsp; Cash and cash equivalents | $49505 | $48723 |
| &nbsp;&nbsp; Short term investments | 32 | 32 |
| &nbsp;&nbsp; Accounts receivable – net | 3949 | 4336 |
| &nbsp;&nbsp; Accounts receivable – related party | 60 |  |
| &nbsp;&nbsp; Medical receivable – net | 19685 | 20109 |
| &nbsp;&nbsp; Management and other fees receivable – net | 34910 | 33419 |
| &nbsp;&nbsp;&nbsp;Management and other fees receivable – related medical practices – net | 8941 | 8603 |
| &nbsp;&nbsp; Inventories | 2634 | 2360 |
| &nbsp;&nbsp; Prepaid expenses and other current assets | 1033 | 1104 |
| &nbsp;&nbsp; Total Current Assets | 120749 | 118686 |
| &nbsp;&nbsp;&nbsp;Accounts receivable – long term | 1278 | 1872 |
| &nbsp;&nbsp; Deferred income tax asset - net | 10536 | 12843 |
| &nbsp;&nbsp; Property and equipment – net | 21627 | 22282 |
| &nbsp;&nbsp; Right-of-use Asset – operating lease | 34107 | 34232 |
| &nbsp;&nbsp; Right-of-use Asset – financing lease | 829 | 928 |
| &nbsp;&nbsp; Goodwill | 4269 | 4269 |
| &nbsp;&nbsp; Other intangible assets – net | 3577 | 3704 |
| &nbsp;&nbsp; Other assets | 526 | 526 |
| &nbsp;&nbsp; Total Assets | $197498 | $199342 |

---

![](fonar_logo.jpg)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY

---

| | | |
|:---|:---|:---|
|  | December 31, <br> 2022 | June 30, <br> 2022 |
| Current Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Current portion of long-term debt and capital leases | $42 | $40 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 866 | 1552 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 4137 | 6417 |
| &nbsp;&nbsp; Unearned revenue on service contracts | 3847 | 4289 |
| &nbsp;&nbsp; Unearned revenue on service contracts – related party | 55 |  |
| &nbsp;&nbsp; Operating lease liability – current portion | 3952 | 3880 |
| &nbsp;&nbsp; Financing lease liability – current portion | 214 | 210 |
| &nbsp;&nbsp;&nbsp;Customer deposits | 632 | 361 |
| Total Current Liabilities | 13745 | 16749 |
| Long-Term Liabilities: |  |  |
| &nbsp;&nbsp; Unearned revenue on service contracts | 1296 | 1857 |
| &nbsp;&nbsp; Deferred income tax liability | 216 | 216 |
| &nbsp;&nbsp; Due to related medical practices | 93 | 93 |
| &nbsp;&nbsp; Operating lease liability – net of current portion | 33158 | 33091 |
| &nbsp;&nbsp; Financing lease liability – net of current portion | 709 | 838 |
| &nbsp;&nbsp; Long-term debt and capital leases, less current portion | 137 | 155 |
| &nbsp;&nbsp; Other liabilities | 74 | 107 |
| Total Long-Term Liabilities | 35683 | 36357 |
| &nbsp;&nbsp; Total Liabilities | 49428 | 53106 |

---

![](fonar_logo.jpg)

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

LIABILITIES AND STOCKHOLDERS' EQUITY (Continued)

---

| | | |
|:---|:---|:---|
| STOCKHOLDERS' EQUITY: | December 31, 2022 | June 30, <br> 2022\* |
| &nbsp;&nbsp;&nbsp;Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2022 and June 30, 2022, 313 issued and outstanding at December 31, 2022 and June 30, 2022 | $— | $— |
| &nbsp;&nbsp;&nbsp;Preferred stock $.001 par value; 567 shares authorized at December 31, 2022 and June 30, 2022, issued and outstanding – none |  |  |
| &nbsp;&nbsp;&nbsp;Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2022 and June 30, 2022, 6,563 and 6,566 issued at December 31, 2022 and June 30, 2022, respectively 6,538 and 6,554 outstanding at December 31, 2022 and June 30, 2022 respectively | 1 | 1 |
| &nbsp;&nbsp;&nbsp;Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at December 31, 2022 and June 30, 2022; .146 issued and outstanding at December 31, 2022 and June 30, 2022 |  |  |
| &nbsp;&nbsp;&nbsp; Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2022 and June 30, 2022, 383 issued and outstanding at December 31, 2022 and June 30, 2022 |  |  |
| &nbsp;&nbsp;&nbsp; Paid-in capital in excess of par value | 184130 | 184531 |
| &nbsp;&nbsp;&nbsp; Accumulated deficit | (29288) | (33567) |
| &nbsp;&nbsp;&nbsp;Treasury stock, at cost – 25 shares of common stock at December 31, 2022 and 12 shares of common stock at June 30, 2022 | (751) | (675) |
| &nbsp;&nbsp;&nbsp;Total Fonar Corporation's Stockholders' Equity | 154092 | 150290 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interests | (6022) | (4054) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Stockholders' Equity | 148070 | 146236 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities and Stockholders' Equity | $197498 | $199342 |

---

![](fonar_logo.jpg)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

---

| | | |
|:---|:---|:---|
|  | FOR THE THREE MONTHS<br> ENDED DECEMBER 31, | FOR THE THREE MONTHS<br> ENDED DECEMBER 31, |
| REVENUES | 2022 | 2021 |
| &nbsp;&nbsp;&nbsp;Patient fee revenue – net of contractual allowances and discounts | $7129 | $7443 |
| &nbsp;&nbsp;&nbsp;Product sales – net | 170 | 198 |
| &nbsp;&nbsp;&nbsp;Service and repair fees – net | 1838 | 1907 |
| &nbsp;&nbsp;&nbsp;Service and repair fees - related parties – net | 28 | 28 |
| &nbsp;&nbsp;&nbsp;Management and other fees – net | 12092 | 12108 |
| &nbsp;&nbsp;&nbsp;Management and other fees - related medical practices – net | 2999 | 2795 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Revenues – Net | 24256 | 24479 |
| COSTS AND EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;Costs related to patient fee revenue | 4023 | 3323 |
| &nbsp;&nbsp;&nbsp;Costs related to product sales | 214 | 190 |
| &nbsp;&nbsp;&nbsp;Costs related to service and repair fees | 722 | 719 |
| &nbsp;&nbsp;&nbsp;Costs related to service and repair fees - related parties | 11 | 10 |
| &nbsp;&nbsp;&nbsp;Costs related to management and other fees | 6622 | 6924 |
| &nbsp;&nbsp;&nbsp;Costs related to management and other fees – related medical practices | 1492 | 1690 |
| &nbsp;&nbsp;&nbsp;Research and development | 342 | 370 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 6598 | 4770 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Costs and Expenses | 20024 | 17996 |
| &nbsp;&nbsp;&nbsp;Income From Operations | 4232 | 6483 |
| &nbsp;&nbsp;&nbsp;Other (Expense) Income | (208) | 47 |
| &nbsp;&nbsp;&nbsp;Interest Expense | (12) | (23) |
| &nbsp;&nbsp;&nbsp;Investment Income | 263 | 60 |
| &nbsp;&nbsp;&nbsp;Income Before Provision for Income Taxes and Noncontrolling Interests | 4275 | 6567 |
| &nbsp;&nbsp;&nbsp;Provision for Income Taxes | (1463) | (1430) |
| &nbsp;&nbsp;&nbsp;Net Income | 2812 | 5137 |
| &nbsp;&nbsp;&nbsp;Net Income - Noncontrolling Interests | (580) | (1117) |
| &nbsp;&nbsp;&nbsp;Net Income – Attributable to FONAR | $2232 | $4020 |
| &nbsp;&nbsp;&nbsp;Net Income Available to Common Stockholders | $2097 | $3777 |
| &nbsp;&nbsp;&nbsp;Net Income Available to Class A Non-Voting Preferred Stockholders | $101 | $181 |
| &nbsp;&nbsp;&nbsp;Net Income Available to Class C Common Stockholders | $34 | $62 |
| &nbsp;&nbsp;&nbsp;Basic Net Income Per Common Share Available to Common Stockholders | $0.32 | $0.58 |
| &nbsp;&nbsp;&nbsp;Diluted Net Income Per Common Share Available to Common Stockholders | $0.32 | $0.57 |
| &nbsp;&nbsp;&nbsp;Basic and Diluted Income Per Share – Class C Common | $0.09 | $0.16 |
| &nbsp;&nbsp;&nbsp;Weighted Average Basic Shares Outstanding – Common Stockholders | 6527 | 6554 |
| &nbsp;&nbsp;&nbsp;Weighted Average Diluted Shares Outstanding – Common Stockholders | 6655 | 6682 |
| &nbsp;&nbsp;&nbsp;Weighted Average Basic and Diluted Shares Outstanding – Class C Common | 383 | 383 |

---

![](fonar_logo.jpg)

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

---

| | | |
|:---|:---|:---|
|  | FOR THE SIX MONTHS ENDED DECEMBER 31, | FOR THE SIX MONTHS ENDED DECEMBER 31, |
| REVENUES | 2022 | 2021 |
| &nbsp;&nbsp;&nbsp;Patient fee revenue – net of contractual allowances and discounts | $13205 | $14294 |
| &nbsp;&nbsp;&nbsp;Product sales – net | 200 | 346 |
| &nbsp;&nbsp;&nbsp;Service and repair fees – net | 3658 | 3844 |
| &nbsp;&nbsp;&nbsp;Service and repair fees - related parties – net | 55 | 55 |
| &nbsp;&nbsp;&nbsp;Management and other fees – net | 24342 | 24081 |
| &nbsp;&nbsp;&nbsp;Management and other fees - related medical practices – net | 5987 | 5589 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Revenues – Net | 47447 | 48209 |
| COSTS AND EXPENSES |  |  |
| &nbsp;&nbsp;&nbsp;Costs related to patient fee revenue | 7822 | 6479 |
| &nbsp;&nbsp;&nbsp;Costs related to product sales | 383 | 299 |
| &nbsp;&nbsp;&nbsp;Costs related to service and repair fees | 1440 | 1443 |
| &nbsp;&nbsp;&nbsp;Costs related to service and repair fees – related parties | 22 | 21 |
| &nbsp;&nbsp;&nbsp;Costs related to management and other fees | 13124 | 13801 |
| &nbsp;&nbsp;&nbsp;Costs related to management and other fees – related medical practices | 2890 | 3326 |
| &nbsp;&nbsp;&nbsp;Research and development | 691 | 755 |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 12932 | 9860 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Costs and Expenses | 39304 | 35984 |
| &nbsp;&nbsp;&nbsp;Income From Operations | 8143 | 12225 |
| &nbsp;&nbsp;&nbsp;Other (Expense) Income | (197) | 858 |
| &nbsp;&nbsp;&nbsp;Interest Expense | (27) | (40) |
| &nbsp;&nbsp;&nbsp;Investment Income | 414 | 122 |
| &nbsp;&nbsp;&nbsp;Income Before Provision for Income Taxes and Noncontrolling Interests | 8333 | 13165 |
| &nbsp;&nbsp;&nbsp;Provision for Income Taxes | (2871) | (2846) |
| &nbsp;&nbsp;&nbsp;Net Income | 5462 | 10319 |
| &nbsp;&nbsp;&nbsp;Net Income – Noncontrolling Interests | (1183) | (2412) |
| &nbsp;&nbsp;&nbsp;Net Income – Attributable to FONAR | $4279 | $7907 |
| &nbsp;&nbsp;&nbsp;Net Income Available to Common Stockholders | $4020 | $7430 |
| &nbsp;&nbsp;&nbsp;Net Income Available to Class A Non-Voting Preferred Stockholders | $193 | $355 |
| &nbsp;&nbsp;&nbsp;Net Income Available to Class C Common Stockholders | $66 | $122 |
| &nbsp;&nbsp;&nbsp;Basic Net Income Per Common Share Available to Common Stockholders | $0.62 | $1.13 |
| &nbsp;&nbsp;&nbsp;Diluted Net Income Per Common Share Available to Common Stockholders | $0.60 | $1.11 |
| &nbsp;&nbsp;&nbsp;Basic and Diluted Income Per Share – Class C Common | $0.17 | $0.32 |
| &nbsp;&nbsp;&nbsp;Weighted Average Basic Shares Outstanding – Common Stockholders | 6534 | 6554 |
| &nbsp;&nbsp;&nbsp;Weighted Average Diluted Shares Outstanding – Common Stockholders | 6662 | 6682 |
| &nbsp;&nbsp;&nbsp;Weighted Average Basic and Diluted Shares Outstanding – Class C Common | 383 | 383 |

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

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| | | |
|:---|:---|:---|
|  | FOR THE SIX MONTHS <br> ENDED DECEMBER 31, | FOR THE SIX MONTHS <br> ENDED DECEMBER 31, |
|  | 2022 | 2021 |
| Cash Flows from Operating Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income | $5462 | $10319 |
| &nbsp;&nbsp;&nbsp; Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 2218 | 2358 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization on right-of-use assets | 2238 | 1644 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for bad debts | 2891 | 822 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income tax – net | 2306 | 2437 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on forgiveness of PPP loan |  | (701) |
| &nbsp;&nbsp;&nbsp;(Increase) decrease in operating assets, net: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts, medical and management fee receivable(s) | (3375) | (2429) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes receivable | 11 | 22 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (274) | (436) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 60 | (33) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets |  | 102 |
| Increase (decrease) in operating liabilities, net: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (685) | (1090) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current liabilities | (3228) | (5395) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (1874) | (1414) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financing lease liabilities | (126) | (101) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Customer deposits | 271 | (277) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (33) | (33) |
| Net cash provided by operating activities | 5862 | 5795 |
| &nbsp;&nbsp; Cash Flows from Investing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchases of property and equipment | (1362) | (2106) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase of noncontrolling interests |  | (546) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cost of patents | (74) | (38) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (1436) | (2690) |
| &nbsp;&nbsp; Cash Flows from Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Repayment of borrowings and capital lease obligations | (15) | (13) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchase of treasury stock | (478) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Distributions to noncontrolling interests | (3151) | (2701) |
| &nbsp;&nbsp;&nbsp;Net cash used in financing activities | (3644) | (2714) |
| &nbsp;&nbsp; Net Increase in Cash and Cash Equivalents | 782 | 391 |
| &nbsp;&nbsp;&nbsp;Cash and Cash Equivalents – Beginning of Period | 48723 | 44460 |
| &nbsp;&nbsp;&nbsp;Cash and Cash Equivalents – End of Period | $49505 | $44851 |

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