FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED) ASSETS December 31, June 30, 2010 2010 (UNAUDITED) Current Assets: --------- --------- Cash and cash equivalents $ 1,961 $ 1,299 Marketable securities 33 28 Accounts receivable - net 5,390 4,821 Accounts receivable - related parties - net 118 - Medical receivables - net 4 25 Management fee receivable - net 2,428 2,569 Management fee receivable - related medical practices - net 1,751 1,922 Costs and estimated earnings in excess of billings on uncompleted contracts 273 277 Inventories 2,757 2,826 Advances and notes to related medical practices - net - 83 Current portion of notes receivable 190 272 Prepaid expenses and other current assets 294 553 --------- --------- Total Current Assets 15,199 14,675 --------- --------- Property and equipment - net 3,827 2,109 Notes receivable - net 238 - Other intangible assets - net 4,137 4,291 Other assets 673 554 --------- --------- Total Assets $ 24,074 $ 21,629 ========= ========= FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED) December 31, June 30, LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2010 2010 (UNAUDITED) Current Liabilities: ----------- --------- Current portion of long-term debt and capital leases $ 2,231 $ 579 Current portion of long-term debt-related party - 88 Accounts payable 2,425 3,192 Other current liabilities 8,683 8,065 Unearned revenue on service contracts 5,834 5,220 Unearned revenue on service contracts - related parties 110 - Customer advances 4,450 4,813 Billings in excess of costs and estimated earnings on uncompleted contracts 1,132 2,743 --------- --------- Total Current Liabilities 24,865 24,700 Long-Term Liabilities: Accounts payable 135 63 Due to related medical practices 231 528 Long-term debt and capital leases, less current portion 1,906 1,567 Long-term debt less current portion-related party - 72 Other liabilities 494 475 --------- --------- Total Long-Term Liabilities 2,766 2,705 --------- --------- Total Liabilities 27,631 27,405 --------- --------- FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED, except share data) December 31, June 30, LIABILITIES AND STOCKHOLDERS' DEFICIENCY 2010 2010 (continued) (UNAUDITED) ----------- -------- STOCKHOLDERS' DEFICIENCY: Class A non-voting preferred stock $.0001 par value; 453,000 and 1,600,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; 313,451 issued and outstanding at December 31, 2010 and June 30, 2010 - - Preferred stock $.001 par value; 567,000 and 2,000,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; issued and outstanding - none - - Common Stock $.0001 par value; 8,500,000 and 30,000,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; 5,241,358 and 4,985,850 issued at December 31, 2010 and June 30, 2010, respectively; 5,229,715 and 4,974,207 outstanding at December 31, 2010 and June 30, 2010, respectively 1 1 Class B Common Stock $ .0001 par value; 227,000 and 800,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; (10 votes per share), 158 issued and outstanding at December 31, 2010 and June 30, 2010 - - Class C Common Stock $.0001 par value; 567,000 and 2,000,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; (25 votes per share), 382,513 issued and outstanding at December 31, 2010 and June 30, 2010 - - Paid-in capital in excess of par value 172,773 172,379 Accumulated other comprehensive loss (14) (19) Accumulated deficit (175,523) (177,271) Notes receivable from employee stockholders (119) (191) Treasury stock, at cost - 11,643 shares of common stock At December 31, 2010 and June 30, 2010 (675) (675) --------- -------- Total Stockholders' Deficiency (3,557) (5,776) --------- -------- Total Liabilities and Stockholders' Deficiency $ 24,074 $ 21,629 ========= ======== FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data) FOR THE THREE MONTHS ENDED DECEMBER 31, -------------------- 2010 2009 REVENUES --------- --------- Product sales - net $ 1,789 $ 2,961 Service and repair fees - net 2,653 2,629 Service and repair fees - related parties - net 55 55 Management and other fees - net 2,380 1,738 Management and other fees - related medical practices - net 1,142 830 --------- --------- Total Revenues - Net 8,019 8,213 --------- --------- COSTS AND EXPENSES Costs related to product sales 1,368 2,279 Costs related to service and repair fees 700 978 Costs related to service and repair fees - related parties 15 20 Costs related to management and other fees 1,707 1,384 Costs related to management and other fees - related medical practices 633 745 Research and development 153 777 Selling, general and administrative 1,745 3,100 Provision for bad debts 255 197 --------- --------- Total Costs and Expenses 6,576 9,480 --------- --------- Income (Loss) From Operations 1,443 (1,267) Interest Expense (137) (90) Interest Expense - Related Party - (5) Investment Income 58 66 Interest Income - Related Party - 3 Other (Expense) Income (1) 1 --------- --------- NET INCOME (LOSS) $ 1,363 $ (1,292) ========= ========= NET INCOME AVAILABLE TO CLASS C COMMON STOCKHOLDERS $ 25 $ N/A ========= ========= Net Income (Loss) Available to Common Stockholders $ 1,261 $ (1,292) ========= ========= Basic Net Income (Loss) Per Common Share $ 0.25 $ (0.26) ========= ========= Diluted Net Income (Loss) Per Common Share $ 0.24 $ (0.26) ========= ========= Basic and Diluted Income Per Share-Common C $ 0.06 N/A ========= ========= Weighted Average Basis Shares Outstanding 5,149,499 4,916,275 ========= ========= Weighted Average Diluted Shares Outstanding 5,277,003 4,916,275 ========= ========= FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data) FOR THE SIX MONTHS ENDED DECEMBER 31, -------------------- 2010 2009 REVENUES --------- --------- Product sales - net $ 4,448 $ 4,524 Service and repair fees - net 5,342 5,386 Service and repair fees - related parties - net 110 110 Management and other fees - net 4,469 3,473 Management and other fees - related medical practices - net 2,335 1,625 License fees and royalties - 585 --------- --------- Total Revenues - Net 16,704 15,703 --------- --------- COSTS AND EXPENSES Costs related to product sales 3,873 3,936 Costs related to service and repair fees 1,366 1,919 Costs related to service and repair fees - related parties 28 39 Costs related to management and other fees 3,021 2,651 Costs related to management and other fees - related medical practices 1,372 1,505 Research and development 607 1,631 Selling, general and administrative 4,128 6,333 Provision for bad debts 431 377 --------- --------- Total Costs and Expenses 14,826 18,391 --------- --------- Income (Loss) From Operations 1,878 (2,688) Interest Expense (231) (169) Interest Expense - Related Party (4) (19) Investment Income 96 153 Interest Income - Related Party 1 6 Other Income 8 34 Loss on Note Receivable - (350) --------- --------- NET INCOME (LOSS) $ 1,748 $ (3,033) ========= ========= NET INCOME AVAILABLE TO CLASS C COMMON STOCKHOLDERS $ 32 $ N/A ========= ========= Net Income (Loss) Available to Common Stockholders $ 1,618 $ (3,033) ========= ========= Basic Net Income (Loss) Per Common Share $ 0.32 $ (0.62) ========= ========= Diluted Net Income (Loss) Per Common Share $ 0.31 $ (0.62) ========= ========= Basic and Diluted Income Per Share-Common C $ 0.08 N/A ========= ========= Weighted Average Basic Shares Outstanding 5,080,872 4,912,108 ========= ========= Weighted Average Diluted Shares Outstanding 5,208,376 4,912,108 ========= =========For investor and other information visit: www.fonar.com. UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, pMRI™, Dynamic™, Multi- Position™, True Flow™, The Proof is in the Picture™, Spondylography™ Spondylometry™ and Upright Radiology™ are trademarks of FONAR Corporation. 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.
Contact Information: Contact: Daniel Culver FONAR Corporation Tel: 631-694-2929 Fax: 631-390-1709 http://www.fonar.com