Form 10-Q - Quarterly report [Sections 13 or 15(d)]

MFORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[ ]

For the quarterly period ended SEPTEMBER 30, 2023

Commission file number 000-10248

FONAR CORPORATION

(Exact name of registrant as specified in its charter)

delaware		11-2464137
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

110 Marcus Drive Melville, New York		11747
Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (631) 694-2929

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes _X_ No ___.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit such files Yes _X_ No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of accelerated filer, large accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer___ Accelerated filer ___ Non-accelerated filer _X_, Smaller reporting company _X_ Emerging growth company ___☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ___ No _X_

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

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock, $.0001 par value		FONR		NASDAQ Capital Market

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date.

Class		Outstanding at November 7, 2023
Common Stock, par value $.0001		6,450,882
Class B Common Stock, par value $.0001		146
Class C Common Stock, par value $.0001		382,513
Class A Preferred Stock, par value $.0001		313,438

FONAR CORPORATION AND SUBSIDIARIES

INDEX

PART I - FINANCIAL INFORMATION		PAGE
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - September 30, 2023 (Unaudited) and June 30, 2023		3
Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2023 and September 30, 2022 (Unaudited)		6
Condensed Consolidated Statements of Changes in Equity for the Three Months Ended September 30, 2023 and September 30, 2022 (Unaudited)		7
Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2023 and September 30, 2022 (Unaudited)		8
Notes to Condensed Consolidated Financial Statements (Unaudited)		9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		20
Item 3. Quantitative and Qualitative Disclosures About Market Risk		26
Item 4. Controls and Procedures		26
PART II - OTHER INFORMATION		26
Item 1. Legal Proceedings		26
Item 1A. Risk Factors		26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3. Defaults Upon Senior Securities		29
Item 4. Mine Safety Disclosures		29
Item 5. Other Information		29
Item 6. Exhibits		29
Signatures		29

Page 2

FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(UNAUDITED)

ASSETS


	September 30,		June 30,
	2023		2023*
Current Assets:
Cash and cash equivalents	$	51,693	$	51,280
Short-term investments		33		33
Accounts receivable - net		4,092		3,861
Accounts receivable - related party		90		—
Medical receivable - net		21,924		21,259
Management and other fees receivable - net		38,118		35,888
Management and other fees receivable - related medical practices - net		9,063		9,162
Inventories		2,824		2,570
Prepaid expenses and other current assets		1,310		1,608

Total Current Assets		129,147		125,661

Accounts receivable - long term		500		710
Deferred income tax asset		8,800		10,042
Property and equipment - net		21,107		22,146
Right-of-use Asset - operating lease		33,203		33,069
Right-of-use Asset - financing lease		680		729
Goodwill		4,269		4,269
Other intangible assets - net		3,355		3,432
Other assets		495		524

Total Assets	$	201,556	$	200,582

*Condensed from audited financial statements.

See accompanying notes to condensed consolidated financial statements.

Page 3

FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(UNAUDITED)

LIABILITIES AND STOCKHOLDERS’ EQUITY

	September 30,		June 30,
	2023		2023*
Current Liabilities:
Current portion of long-term debt	$	45	$	44
Accounts payable		1,040		1,579
Other current liabilities		3,984		5,444
Unearned revenue on service contracts		3,944		3,832
Unearned revenue on service contracts – related party		82		—
Operating lease liability - current portion		4,295		3,905
Financing lease liability - current portion		219		218
Customer deposits		623		602
Total Current Liabilities		14,232		15,624

Long-Term Liabilities:
Unearned revenue on service contracts		562		760
Deferred income tax liability		395		395
Due to related medical practices		93		93
Operating lease liability – net of current portion		31,503		32,105
Financing lease liability – net of current portion		565		620
Long-term debt, less current portion		104		115
Other liabilities		29		42
Total Long-Term Liabilities		33,251		34,130

Total Liabilities		47,483		49,754

*Condensed from audited financial statements.

See accompanying notes to condensed consolidated financial statements.

Page 4

FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(UNAUDITED)

LIABILITIES AND STOCKHOLDERS’ EQUITY (Continued)

STOCKHOLDERS' EQUITY:	September 30, 2023			June 30, 2023 *
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at September 30, 2023 and June 30, 2023, 313 issued and outstanding at September 30, 2023 and June 30, 2023	$	—		$	—
Preferred stock $.001 par value; 567 shares authorized at September 30, 2023 and June 30, 2023, issued and outstanding – none		—			—
Common Stock $.0001 par value; 8,500 shares authorized at September 30, 2023 and June 30, 2023, 6,506 and 6,462 issued at September 30, 2023 and June 30, 2023, respectively, 6,451 and 6,451 outstanding at September 30, 2023 and June 30, 2023 respectively		1			1
Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at September 30, 2023 and June 30, 2023; .146 issued and outstanding at September 30, 2023 and June 30, 2023		—			—
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at September 30, 2023 and June 30, 2023, 383 issued and outstanding at September 30, 2023 and June 30, 2023		—			—
Paid-in capital in excess of par value		182,613			182,613
Accumulated deficit		(20,085	)		(24,191	)
Treasury stock, at cost – 55 shares of common stock at September 30, 2023 and 11 shares of common stock at June 30, 2023		(1,230	)		(516	)
Total Fonar Corporation’s Stockholders’ Equity		161,299			157,907
Noncontrolling interests		(7,226	)		(7,079	)
Total Stockholders' Equity		154,073			150,828
Total Liabilities and Stockholders' Equity	$	201,556		$	200,582

*Condensed from audited financial statements.

See accompanying notes to condensed consolidated financial statements.

Page 5

FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

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

(UNAUDITED)


	FOR THE THREE MONTHS ENDED SEPTEMBER 30,
REVENUES	2023			2022
Patient fee revenue – net of contractual allowances and discounts	$	8,676		$	6,076
Product sales – net		164			30
Service and repair fees – net		1,864			1,820
Service and repair fees - related parties – net		28			28
Management and other fees – net		12,119			12,250
Management and other fees - related medical practices – net		2,987			2,987
Total Revenues – Net		25,838			23,191
COSTS AND EXPENSES
Costs related to patient fee revenue		4,427			3,800
Costs related to product sales		103			169
Costs related to service and repair fees		848			718
Costs related to service and repair fees - related parties		13			11
Costs related to management and other fees		7,024			6,501
Costs related to management and other fees – related medical practices		1,519			1,398
Research and development		467			349
Selling, general and administrative		4,866			6,334
Total Costs and Expenses		19,267			19,280
Income From Operations		6,571			3,911
Other Income		—			11
Interest Expense		(48	)		(14	)
Investment Income		507			151
Income Before Provision for Income Taxes and Noncontrolling Interests		7,030			4,059
Provision for Income Taxes		(1,670	)		(1,409	)
Net Income		5,360			2,650
Net Income - Noncontrolling Interests		(1,254	)		(603	)
Net Income – Attributable to FONAR	$	4,106		$	2,047
Net Income Available to Common Stockholders	$	3,855		$	1,923
Supplemental Income Statement Elements
Net Income Available to Class A Non-Voting Preferred Stockholders	$	187		$	92
Net Income Available to Class C Common Stockholders	$	64		$	32
Basic Net Income Per Common Share Available to Common Stockholders	$	0.60		$	0.29
Diluted Net Income Per Common Share Available to Common Stockholders	$	0.59		$	0.29
Basic and Diluted Income Per Share – Class C Common	$	0.17		$	0.08
Weighted Average Basic Shares Outstanding – Common Stockholders		6,408			6,545
Weighted Average Diluted Shares Outstanding - Common Stockholders		6,536			6,673
Weighted Average Basic and Diluted Shares Outstanding – Class C Common		383			383

See accompanying notes to condensed consolidated financial statements.

Page 6

FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

(UNAUDITED)

For the Three Months Ending September 30, 2023


	Common Stock		Paid in capital in excess of par value		Accumulated Deficit			Treasury Stock			Non Controlling Interests			Total
Balance – June 30, 2023	$	1	$	182,613	$	(24,191	)	$	(516	)	$	(7,079	)	$	150,828
Net income		—		—		4,106			—			—			4,106
Purchase of Treasury stock		—		—		—			(714	)		—			(714	)
Distributions - Non controlling		—		—		—			—			(1,401	)		(1,401	)
Income - Non controlling interests		—		—		—			—			1,254			1,254
Balance – September 30, 2023	$	1	$	182,613	$	(20,085	)	$	(1,230	)	$	(7,226	)	$	154,073

For the Three Months Ending September 30, 2022

	Common Stock		Paid in capital in excess of par value		Accumulated Deficit			Treasury Stock			Non Controlling Interests			Total
Balance - June 30, 2022	$	1	$	184,531	$	(33,567	)	$	(675	)	$	(4,054	)	$	146,236
Net income		—		—		2,047			—			—			2,047
Purchase of Treasury Stock		—		—		—			(122	)		—			(122	)
Distributions - Non controlling		—		—		—			—			(1,634	)		(1,634	)
Income - Non controlling interests		—		—		—			—			603			603
Balance – September 30, 2022	$	1	$	184,531	$	(31,520	)	$	(797	)	$	(5,085	)	$	147,130

See accompanying notes to condensed consolidated financial statements.

Page 7

FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

(UNAUDITED)


	FOR THE THREE MONTHS ENDED SEPTEMBER 30,
	2023			2022
Cash Flows from Operating Activities:
Net income	$	5,360		$	2,650
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,195			1,118
Amortization of right-of-use assets		1,024			1,061
(Recovery) Provision for bad debts		(68	)		1,398
Deferred income tax – net		1,242			1,146
(Increase) decrease in operating assets, net:
Accounts, medical and management fee receivable(s)		(2,837	)		(1,407	)
Notes receivable		5			11
Inventories		(255	)		(98	)
Prepaid expenses and other current assets		293			(14	)
Other assets		29			—
Increase (decrease) in operating liabilities, net:
Accounts payable		(539	)		(779	)
Other current liabilities		(1,463	)		(1,580	)
Operating lease liabilities		(1,322	)		(912	)
Financing lease liabilities		(54	)		(52	)
Customer deposits		20			171
Other liabilities		(12	)		(16	)
Net cash provided by operating activities		2,618			2,697
Cash Flows from Investing Activities:
Purchases of property and equipment		(63	)		(939	)
Cost of patents		(16	)		(24	)
Net cash used in investing activities		(79	)		(963	)
Cash Flows from Financing Activities:
Repayment of borrowings and capital lease obligations		(11	)		(5	)
Purchase of treasury stock		(714	)		(122	)
Distributions to noncontrolling interests		(1,401	)		(1,634	)
Net cash used in financing activities		(2,126	)		(1,761	)
Net Increase (Decrease) in Cash and Cash Equivalents		413			(27	)
Cash and Cash Equivalents - Beginning of Period		51,280			48,723
Cash and Cash Equivalents - End of Period	$	51,693		$	48,696

See accompanying notes to condensed consolidated financial statements.

Page 8

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Effective July 1, 2015, the Company restructured the corporate organization of the management of diagnostic imaging centers segment of our business. The reorganization was structured to more completely integrate the operations of Health Management Corporation of America and HDM. Imperial contributed all of its assets (which were utilized in the business of Health Management Corporation of America) to HDM and received a 24.2% interest in HDM. Health Management Corporation of America retained a direct ownership interest of 45.8% in HDM, and the original investors in HDM retained a 30.0% ownership interest in the newly expanded HDM. During the fiscal year ended June 30, 2022, the Company purchased non-controlling interests from the minority shareholders for $546,000. Currently the Company has a direct ownership interest of 70.8% and the investors’ have a 29.2% ownership interest. The entire management of diagnostic imaging centers business segment is now being conducted by HDM, operating under the name “Health Management Company of America”.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2023, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K filed on September 28, 2023 for the fiscal year ended June 30, 2023.

The global pandemic of COVID-19 has caused turbulence and uncertainty in the United States and international markets and economies which has adversely affected our workforce, liquidity, financial conditions, revenues, profitability and business operations. The Company was able to enact certain decisions to allow the Company to navigate the global pandemic and from further losses, additional decreases in scan volume and avoid any significant disruption of the business. The Company must now take into account the severity, duration and recurrence of new strains of the COVID-19 virus which adds a new dimension to the challenges and uncertainty facing our business and the world economy in general. Although we are unable to predict if there will be additional consequences on our operations from the continuing global pandemic of COVID-19, the Company believes with positive cash flows, low debt and cash on hand, it will be able to continue operations going forward.

Page 9

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of FONAR Corporation, its majority and wholly-owned subsidiaries and partnerships (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Revenues

The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgements employed in the determination of revenue.

Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

BUSINESS COMBINATION

When the qualifications for business combination accounting treatment are met, it requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed. While the Company uses their best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period of final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.

Page 10

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Earnings Per Share

Basic earnings per share (“EPS”) is computed based upon the weighted average number of shares of common stock and stock equivalents outstanding, net of common stock. In accordance with ASC topic 260-10, “Participating Securities and the Two-Class method”, the Company used the Two-Class method for calculating basic income per share and applied the if converted method in calculating diluted income per share for the three months ended September 30, 2023 and 2022.

Diluted EPS reflects the potential dilution from the exercise or conversion of all dilutive securities into common stock based on the average market price of common shares outstanding during the period. For the three months ended September 30, 2023 and 2022, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common.

Earnings Per Share

Schedule of earning per share
	Three months ended September 30, 2023						Three months ended September 30, 2022
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic
Numerator: Net income available to common stockholders	$	4,106	$	3,855	$	64	$	2,047	$	1,923	$	32
Denominator:
Weighted average shares outstanding		6,408		6,408		383		6,545		6,545		383
Basic income per common share	$	0.64	$	0.60	$	0.17	$	0.31	$	0.29	$	0.08
Diluted
Denominator: Weighted average shares outstanding				6,408		383				6,545		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,536		383				6,673		383
Diluted income per common share			$	0.59	$	0.17			$	0.29	$	0.08

Recent Accounting Standards

FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of September 30, 2023 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2023 or 2022, and it does not believe that any of those standards will have a significant impact on our consolidated condensed financial statements at the time they become effective.

Page 11

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

Receivables, net is comprised of the following at September 30, 2023, and June 30, 2023:


	September 30, 2023
	Gross Receivable		Allowance for doubtful accounts		Net
Accounts receivable	$	4,291	$	199	$	4,092
Accounts receivable - related party	$	90		—	$	90
Medical receivable	$	21,924	$	—	$	21,924
Management and other fees receivable	$	49,882	$	11,764	$	38,118
Management and other fees receivable from related medical practices ("PC’s")	$	13,829	$	4,766	$	9,063

	June 30, 2023
	Gross Receivable		Allowance for doubtful accounts		Net
Accounts receivable	$	4,060	$	199	$	3,861
Medical receivable	$	21,259	$	—	$	21,259
Management and other fees receivable	$	48,497	$	12,609	$	35,888
Management and other fees receivable from related medical practices ("PC’s")	$	13,152	$	3,990	$	9,162

The Company's customers are concentrated in the healthcare industry.

Accounts Receivable

Credit risk with respect to the Company’s accounts receivable related to product sales and service and repair fees is limited due to the customer advances received prior to the commencement of work performed and the billing of amounts to customers as sub-assemblies are completed. Service and repair fees are billed on a monthly or quarterly basis and the Company does not continue providing these services if accounts receivable become past due. The Company controls credit risk with respect to accounts receivable from service and repair fees through its credit evaluation process, credit limits, monitoring procedures and reasonably short collection terms. The Company performs ongoing credit authorizations before a product sales contract is entered into or service and repair fees are provided.

Page 12

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (CONTINUED)

Long Term Accounts Receivable

Long term accounts receivable balances at September 30, 2023 and June 30, 2023 amounted to approximately $500 and $710, respectively. The Company will generate revenue from long-term, non-cancellable contracts to provide service and repair services. Future revenue to be recognized over the following two years as of September 30, 2023 is as follows:

Schedule of facilities owned or managed
2025	$	450
2026		112
Total	$	562

Medical Receivables

Medical receivables are due under fee-for-service contracts from third party payors, such as hospitals, government sponsored healthcare programs, patient’s legal counsel and directly from patients. Substantially all the revenue relates to patients residing in Florida. The carrying amount of the medical receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company determines allowances for contractual adjustments and uncollectible accounts based on specific agings, specific payor collection issues that have been identified and based on payor classifications and historical experience at each site.

Management and Other Fees Receivable

The Company's receivables from the related and non-related professional corporations (PC's) substantially consist of fees outstanding under management agreements. Payment of the outstanding fees is dependent on collection by the PC's of fees from third party medical reimbursement organizations, principally insurance companies and health management organizations.

Payment of the management fee receivables from the PC’s may be impaired by the inability of the PC’s to collect in a timely manner their medical fees from the third-party payors, particularly insurance carriers covering automobile no-fault and workers compensation claims due to longer payment cycles and rigorous informational requirements and certain other disallowed claims. Approximately 67.8% and 69.0% of the PCs’ net revenues for the three months ended September 30, 2023 and 2022, respectively, were derived from no-fault and personal injury protection claims. The Company considers the aging of its accounts receivable in determining the amount of allowance for doubtful accounts. The Company generally takes all legally available steps to collect its receivables. Credit losses associated with the receivables are provided for in the condensed consolidated financial statements and have historically been within management's expectations.

Net revenues from management and other fees charged to the related PCs accounted for approximately 11.6% and 12.9% of the consolidated net revenues for the three months ended September 30, 2023 and 2022, respectively.

Page 13

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (CONTINUED)

Management and Other Fees Receivable (Continued)

Tallahassee Magnetic Resonance Imaging, Inc., Stand Up MRI of Boca Raton, Inc., and Stand Up MRI & Diagnostic Center, Inc. (all related medical practices) entered into a guaranty agreement, pursuant to which they cross guaranteed all management fees which are payable to the Company, which have arisen under each individual management agreement. Additional Company managed entities also operate under a guaranty agreement, pursuant to which management fees are payable to the Company.

The Company’s patient fee revenue, net of contractual allowances and discounts for the three months ended September 30, 2023 and 2022 are summarized in the following table.

Schedule of patient fee revenue
	For the Three Months Ended September 30,
	2023		2022
Commercial Insurance/ Managed Care	$	1,173	$	911
Medicare/Medicaid		271		238
Workers' Compensation/Personal Injury		5,138		4,235
Other		2,094		692
Patient Fee Revenue, net of contractual allowances and discounts	$	8,676	$	6,076

NOTE 4 – OPERATING & FINANCING LEASES

In July 2019, the Company adopted ASU 2016-02, “Leases” (Topic 842). This standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based upon the principle of whether or not the lease is effectively a financed purchase by the lessee. We have elected the optional transition method to apply the standard as of the effective date, and therefore, we will not apply the standard to the comparative periods presented in the consolidated financial statements. We have also elected the transition package of the practical expedients permitted within the standard which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and indirect costs.

The Company accounts for its various operating leases in accordance with Accounting Standards Codification (ASC) 842 – “Leases,” as updated by ASU 2016-02. At the inception of a lease, the Company recognizes right-of-use lease assets and related lease liabilities measured at present value of future lease payments on its balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. Our most common initial term varies in length from 2 to 10 years. Including renewal options negotiated with the landlord, we have a total span of 2 to 16 years at the facilities we lease. The Company reviewed its contracts with vendors and customers, determining that its right-to-use lease assets consisted of only office space operating leases. In determining the right-to-use lease assets and liabilities, the Company did recognize lease extension options which the Company feels would be reasonably exercised. Our incremental borrowing rate (“IBR”) used to discount the stream of operating lease payments is closely related to the interest rates available to the Company.

Page 14

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 4 – OPERATING & FINANCING LEASES (CONTINUED)

A reconciliation of operating and financing lease payments undiscounted cash flows to lease liabilities recognized as of September 30, 2023 is as follows:


Twelve Months Ending September 30,	Operating Lease Payments			Financing Lease Payments
2024	$	6,009		$	244
2025		5,768			244
2026		5,320			244
2027		3,865			102
2028		3,526			—
Thereafter		21,471			—
Present value discount		(10,161	)		(50	)
Total lease liability	$	35,798		$	784

NOTE 5 - INVENTORIES

Inventories included in the accompanying condensed consolidated balance sheets consist of the following:

Schedule of inventories
	September 30, 2023		June 30, 2023
Purchased parts, components and supplies	$	2,531	$	2,346
Work-in-process		293		224
Total Inventories	$	2,824	$	2,570

NOTE 6 – OTHER INTANGIBLE ASSETS

Other intangible assets, net of accumulated amortization, in the accompanying condensed consolidated balance sheets consist of the following:

Schedule of other intangible assets
	September 30, 2023		June 30, 2023
Capitalized software development costs	$	7,005	$	7,005
Patents and copyrights		5,468		5,452
Non-compete		4,150		4,150
Customer relationships		3,900		3,900
Gross Other intangible assets		20,523		20,507
Less: Accumulated amortization		17,168		17,075
Other Intangible Assets	$	3,355	$	3,432

Page 15

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 6 – OTHER INTANGIBLE ASSETS (CONTINUED)

Amortization of patents and copyrights for the three months ended September 30, 2023 and 2022 amounted to $43 and $54, respectively.

Amortization of customer relationships for the three months ended September 30, 2023 and 2022 amounted to $50 and $50, respectively.

NOTE 7 – OTHER CURRENT LIABILITIES

Other current liabilities in the accompanying condensed consolidated balance sheets consist of the following:

Schedule of other current liabilities
	September 30, 2023		June 30, 2023
Accrued salaries, commissions and payroll taxes	$	2,827	$	4,413
Sales tax payable		225		193
State income taxes payable		—		48
Legal and other professional fees		11		11
Accounting fees		47		100
Self-funded health insurance reserve		176		101
Accrued interest and penalty		4		4
Other general and administrative expenses		694		574
Other Current Liabilities	$	3,984	$	5,444

NOTE 8 - SEGMENT AND RELATED INFORMATION

The Company operates in two industry segments - manufacturing and the servicing of medical equipment and management of diagnostic imaging centers. The accounting policies of the segments are the same as those described in the summary of significant accounting policies as disclosed in the Company’s 10-K as of June 30, 2023. All inter-segment sales are market-based. The Company evaluates performance based on income or loss from operations.

Page 16

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 8 - SEGMENT AND RELATED INFORMATION (CONTINUED)

Summarized financial information concerning the Company's reportable segments is shown in the following table:


	Medical Equipment			Management of Diagnostic Imaging Centers		Totals
For the three months ended September 30, 2023
Net revenues from external customers	$	2,056		$	23,782	$	25,838
Inter-segment net revenues	$	254		$	—	$	254
(Loss) Income from operations	$	(738	)	$	7,309	$	6,571
Depreciation and amortization	$	61		$	1,134	$	1,195
Capital expenditures	$	16		$	63	$	79

For the three months ended September 30, 2022
Net revenues from external customers	$	1,878		$	21,313	$	23,191
Inter-segment net revenues	$	245		$	—	$	245
(Loss) Income from operations	$	(802	)	$	4,713	$	3,911
Depreciation and amortization	$	72		$	1,046	$	1,118
Capital expenditures	$	24		$	939	$	963

NOTE 9 – SUPPLEMENTAL CASH FLOW INFORMATION

During the three months ended September 30, 2023 and September 30, 2022, the Company paid $48 and $15 for interest, respectively.

During the three months ended September 30, 2023 and September 30, 2022, the Company paid $150 and $395 for income taxes, respectively.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigation

The Company is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such actions, will not have a material adverse effect on the consolidated financial position or results of operations of the Company.

There were no material changes in litigation from that reported in our Form 10-K for the fiscal year ended June 30, 2023.

Page 17

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 10 – COMMITMENTS AND CONTINGENCIES (CONTINUED)

Other Matters

On September 13, 2022, the Company adopted a stock repurchase plan. The plan has no expiration date and cannot determine the number of shares which will be repurchased. On September 26, 2022, the Board of Directors has approved up to $9 million to be repurchased under the plan which will be purchased on the publicly traded open market at prevailing prices. During the three months ended September 30, 2023 and 2022, the Company repurchased 43 and 9 shares at a cost of $714 and $122, respectively.

The Company maintains a self-funded health insurance program with a stop-loss umbrella policy with a third-party insurer to limit the maximum potential liability for individual claims to $150 per person and for a maximum potential claim liability based on member enrollment. With respect to this program, the Company considers historical and projected medical utilization data when estimating its health insurance program liability and related expense. As of September 30, 2023 and June 30, 2023, the Company had approximately $176 and $101, respectively, in reserve for its self-funded health insurance programs. The reserves are included in “Other current liabilities” in the condensed consolidated balance sheets.

The Company regularly analyzes its reserves for incurred but not reported claims, and for reported but not paid claims related to its reinsurance and self-funded insurance programs. The Company believes its reserves are adequate. However, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known. There were no significant adjustments recorded in the periods covered by this report.

NOTE 11 - INCOME TAXES

In accordance with ASC 740-270, “Income Taxes – Interim Reporting,” the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and apply that rate to year-to-date ordinary income or loss. The resulting tax expense (or benefit) is adjusted for the tax effect of specific events, if any, required to be discretely recognized in the interim period as they occur. For the three months ended September 30, 2023 and 2022, the Company recorded income tax expense of $1,670 in 2023 as compared to $1,409 in 2022. The 2023 provision is comprised of a current income tax component of $428 and a deferred income tax component of $1,242. Obligations for any liability associated with the current income tax provision has been reduced, primarily resulting from the benefits and utilization of net operating loss carryforwards.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a corporate tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as unrecognized benefits. A liability is recognized (or amount of net operating loss carryforward or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC Topic 740. The Company believes there are no uncertain tax positions in prior year tax filings and therefore it has not recorded a liability for unrecognized tax benefits.

Page 18

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2023 and 2022

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

(UNAUDITED)

NOTE 11 - INCOME TAXES (CONTINUED)

In accordance with ASC Topic 740, interest costs related to unrecognized tax benefits are required to be calculated (if applicable) and would be classified as “Interest expense, net”. Penalties if incurred would be recognized as a component of “Selling, general and administrative” expenses.

The Company files corporate income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2018.

The Company recorded a deferred tax asset of $8,800 and a deferred tax liability of $395 as of September 30, 2023, primarily relating to Federal operating loss carryforwards, allowance for doubtful accounts and tax credits. There is approximately $3,198 of Federal operating losses available to offset future taxable income through 2031. The net operating losses begin to expire in 2028 for federal tax and state income tax purposes.

Future ownership changes as determined under Section 382 of the Internal Revenue code could further limit the utilization of net operating loss carryforwards. As of September, 2023, no such changes in ownership have occurred.

The Inflation Reduction Act (“IRA”) was enacted on August 16, 2022. The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income. The CAMT will be effective for tax years beginning after December 31, 2022. Currently, the Company is expecting the IRA not to have a material impact to the Company’s financial statements.

The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible or when such net operating losses can be utilized. The Company considers projected future taxable income, the regulatory environment of the industry and tax planning strategies in making this assessment. At present, the Company believes that it is more likely than not that the benefits from certain deferred tax asset carryforwards, will not all be fully realized. In recognition of this inherent risk, a valuation allowance was established for the partial value of the deferred tax asset, which principally related to research and development tax credits. A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of the remainder of the valuation.

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated events that occurred subsequent to September 30, 2023 and through the date the condensed consolidated financial statements were issued.

As of October 31, 2023, the Company repurchased 33 shares of common stock at a cost of $471 which was authorized under the stock repurchase plan adopted in September 2022.

Page 19

FONAR CORPORATION AND SUBSIDIARIES

Item 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and notes thereto included in Part I, item 1 of the Quarterly Report on Form 10-Q and with our audited consolidated financial statements and notes thereto for the year ended June 30, 2023 included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 filed with the U.S. Securities and Exchange Commission (SEC) on September 28, 2023.

For the three month period ended September 30, 2023, we reported a net income of $5.4 million on revenues of $25.8 million as compared to net income of $2.7 million on revenues of $23.2 million for the three month period ended September 30, 2022. Operating income increased from $3.9 million for the three month period ended September 30, 2022 to $6.6 million for the three month period ended September 30, 2024.

The revenue increase, from $23.2 million for the first three months of fiscal 2023 to $25.8 million for the first three months of fiscal 2024, was primarily due to increases in patient fee revenue of $2.6 million, from $6.1 million for the first three months of fiscal 2023 to $8.7 million for the first three months of fiscal 2024. Revenues from product sales and service and repair fees increased by 9.5% from $1.9 million for the first three months of fiscal 2023 to $2.1 million for the first three months of fiscal 2024.

While our revenues increased, our costs and expenses remained constant resulting in our operating income increasing to $6.6 million for the three months ended September 30, 2023 as compared to $3.9 million for the three months ended September 30, 2022. In terms of percentages, costs and expenses remained constant at $19.3 million for the first three months of fiscal 2023 and for the first three months of fiscal 2024, while revenues increased 11.4%, from $23.2 million for the first three months of fiscal 2023 to $25.8 million for the first three months of fiscal 2024.

Fonar’s wholly owned subsidiary, Health Management Corporation of America (“HMCA”), has the controlling interest in Health Diagnostics Management, LLC (“HDM”). HMCA presently has a direct ownership interest of 70.8% in HDM, and the investors in HDM have a 29.2% ownership interest. The management of the diagnostic imaging centers business segment is being conducted by HDM, operating under the name “Health Management Company of America”. For the sake of simplicity, HMCA, and HDM are referred to as “HMCA”, unless otherwise indicated.

The most significant adverse impact on our Company in fiscal 2023 and the first quarter of fiscal 2024 has been the lingering COVID-19 pandemic. Although it had seemed the worst had passed, subsequent events have shown a spike in new cases and the emergence of new strains of the virus. This is by no means a problem confined to our Company, but despite our best efforts and improved ability to cope with the pandemic and the availability of new vaccines, the impact on our results of operations and financial condition is potentially volatile and severe.

The global pandemic of COVID-19 has caused turbulence and uncertainty in the United States and international markets and economies which have adversely affected our workforce, liquidity, financial condition, revenues, profitability and business operations The Company was able to enact certain decisions to allow the Company to navigate the global pandemic and from further losses, additional decreases in scan volume and avoid any significant disruption of the business. Although we are unable to predict if there will be additional consequences on our operations from the continuing global pandemic of COVID-19, the Company believes with its positive cash flows, low debt and cash on hand, it will be able to continue operations going forward.

Page 20

FONAR CORPORATION AND SUBSIDIARIES

During the first quarter of fiscal 2024, the aggregate number of scans performed by the sites we manage or own increased to 50,744 scans from 44,471 scans in the first quarter of fiscal 2023. This increase was due to the opening of new stand-alone facility in Florida along with our return to a full operating schedule after addressing our technologist staffing shortfall.

Forward Looking Statements

Certain statements made in this Quarterly Report on Form 10-Q are "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995) regarding the plans and objectives of Management for future operations. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements included herein are based on current expectations that involve numerous risks and uncertainties. Our plans and objectives are based, in part, on assumptions involving the expansion of business. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that our assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Report will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statement included herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved.

Results of Operations

We operate in two industry segments: the manufacture and servicing of medical (MRI) equipment, which is conducted by Fonar, and diagnostic facilities management services, which is conducted through HMCA.

Manufacturing and Service of MRI Equipment

Revenues from MRI product sales increased to $164,000 for the first three months of fiscal 2024 from $30,000 for the first three months of fiscal 2023. Costs related to product sales decreased from $169,000 for the three month period ended September 30, 2022 to $103,000 for the three month period ended September 30, 2023. Economic uncertainty and lower reimbursement rates for MRI scans, have depressed the market for our MRI scanner products, notwithstanding our scanners’ unique technological capabilities (e.g. multi positional scanning). Due to the low sales volumes of our MRI product, period to period comparisons are not necessarily indicative of any trends.

Service revenues increased to $1.9 million for the three month period ended September 30, 2023 as compared to $1.8 million for the three month period ended September 30, 2022.

Costs relating to providing service were $729,000 in the first three months of fiscal 2023 and $861,000 in the first three months of fiscal 2024. Because of our ability to monitor the performance of customers’ scanners from our facilities in Melville, New York on a daily basis and to detect and repair any irregularities before more serious and costly problems develop, we have been able to contain our costs of providing service.

There were approximately $138,000 in foreign revenues for the first three months of fiscal 2024 as compared to approximately $99,000 in foreign revenues for the first three months of fiscal 2023, representing an increase in foreign revenues of 39.4%. We do not regard this as a material trend, but as part of a normal although sometimes volatile variation resulting from low volumes of foreign sales.

Page 21

FONAR CORPORATION AND SUBSIDIARIES

We recognize MRI scanner sales revenues on the “percentage of completion” basis, which means the revenues are recognized as the scanner is manufactured. Revenues recognized in a particular quarter do not necessarily reflect new orders or progress payments made by customers in that quarter. We build the scanner as the customer meets certain benchmarks in site preparation and our installation of the scanner, in order to minimize the time lag between incurring costs of manufacturing and our receipt of the cash progress payments from the customer which are due upon delivery. Consequently, there can be a disparity between the revenues recognized in a fiscal period and the number of product sales. Generally, the revenues from a scanner sale are recognized in a fiscal quarter or quarters following the quarter in which the sale was made.

Revenues for the medical equipment segment increased to $2.1 million for the first three months of fiscal 2024 from $1.9 million for the first three months of fiscal 2023. Operating losses for our medical equipment segment decreased to an operating loss of $738,000, for the first three months of fiscal 2024 as compared to an operating loss of $802,000 for the first three months of fiscal 2023.

Diagnostic Facilities Management Services

HMCA revenues increased in the first three months of fiscal 2024 by 11.6% to $23.8 million from $21.3 million for the first three months of fiscal 2023. The percentage of our revenues derived from our diagnostic facilities management segment relative to the percentage of our total revenues increased slightly to 92.0% for the first three months of fiscal 2024, from 91.9% for the first three months of fiscal 2023.

HMCA’s current strategy is to counter the effects of lower reimbursement rates by increasing the scan volume of the facilities it owns or manages by adding additional scanners at current centers and increasing our marketing efforts. As a result of the COVID-19 virus, however, the Company had seen decreases in its scan volume. Nevertheless, the Company continued its program of adding additional scanners and due to this the scan volume increased in the first quarter of 2024.

The number of scans performed at our centers and at our clients’ centers has recovered to pre-COVID-19 levels and has increased from approximately 44,000 in the first three months of fiscal 2023 to approximately 51,000 in the first three months of fiscal 2024. The increase in scans was due to the addition of two new stand-alone facilities which opened in Florida and another one in New York

We now manage or own a total of 42 MRI scanners. Twenty-five (25) MRI scanners are located in New York and seventeen (17) are located in Florida. HMCA experienced an operating income of $7.3 million for the first three months of fiscal 2024 compared to operating income of $4.7 million for the first three months of fiscal 2023.

The ability of HMCA to maintain its profitability is principally due to HMCA’s success in marketing the scanning services of the facilities managed or owned by HMCA, notwithstanding the decrease in reimbursement rates paid for MRI scans by insurers, Medicare and other government. The reductions in reimbursement rates are not unique to HMCA or HMCA’s clients but are being experienced by the industry in general.

HMCA’s cost of revenues for the first three months of fiscal 2024 increased to $12.9 million as compared to $11.7 million for the first three months of fiscal 2023.

Page 22

FONAR CORPORATION AND SUBSIDIARIES

Consolidated

For the first three months of fiscal 2024, our consolidated net revenues increased by 11.4% to $25.8 million from $23.2 million for the first three months of fiscal 2023, and total costs and expenses remained constant at $19.3 million for the first three months of fiscal 2024 and for the first three months of fiscal 2023 respectively. As a result, our operating income increased to $6.6 million in the first three months of fiscal 2024 as compared to $3.9 million in the first three months of fiscal 2023. A decrease in selling, general and other administrative costs in particular resulted in costs and expenses remaining constant as compared to the increase in net revenues.

Selling, general and administrative expenses decreased to $4.9 million in the first three months of fiscal 2024 from $6.3 million in the first three months of fiscal 2023. This decrease in selling, general and administrative expenses was due mainly to less reserves taken on management fees. Some of these reserves had been taken in the ordinary course of business and some in connection with the impact of the COVID-19 virus.

Research and development expenses increased by 33.8% to $467,000 for the first three months of fiscal 2024 from $349,000 for the first three months of fiscal 2023.

Interest expense in the first three months of fiscal 2024 increased by 242.9% to $48,000 from $14,000 in the first three months of fiscal 2023.

Inventories increased to $2.8 million at September 30, 2023 as compared to $2.6 million at June 30, 2023.

Net management fee and medical receivables increased by 4.2% to $69.1 million at September 30, 2023 from $66.3 million at June 30, 2023 as a result of slower collections and increased scan volume. The slower collections were primarily due to an increase in no-fault and workers’ compensation revenue, which typically takes longer to collect.

The results of operations for the first three months of fiscal 2024 reflect a increase in revenues from management, patient and other fees, as compared to the first three months of fiscal 2023 ($23.8 million for the first three months of fiscal 2024 as compared to $21.3 million for the first three months of fiscal 2023), and an increase in the MRI equipment segment revenues ($2.1 million for the first three months of fiscal 2024 as compared to $1.9 million for the first three months of fiscal 2023). Revenues were 8.0% from the MRI equipment segment and 92.0% from HMCA, for the first three months of fiscal 2024, as compared to 8.1% from the MRI equipment segment and 91.9% from HMCA for the first three months of fiscal 2023.

As a result of the Patient Protection and Affordable Care Act (PPACA) we have experienced a reduction of reimbursement rates and less interest in our MRI equipment. Any changes to the PPACA may result in further changes in the healthcare industry and our business.

We are committed to improving our operating results and dealing with the challenges posed by legislative and regulatory requirements. Nevertheless, factors beyond our control, such as the COVID-19 virus, the timing and rate of market growth, economic conditions, the availability of credit and payor reimbursement rates, or unexpected expenditures and the timing of such expenditures, make it difficult to forecast future operating results.

As mentioned, one of the effects of the PPACA on our business has been the reduction in Medicare reimbursement rates for MRI scans. This also has resulted in a reduction in the reimbursement rates by commercial insurers and government programs which tie their reimbursement rates to the Medicare rates. Nevertheless, the patient volume of the scanning centers we manage or own has enabled us to maintain healthy operating results in spite of these challenges. We believe we are pursuing the correct policies to cope with these problems and to improve the Company’s operating results.

Page 23

FONAR CORPORATION AND SUBSIDIARIES

Our Upright® MRI (also referred to as the Stand-Up® MRI), together with our works-in-progress, are intended to significantly improve our competitive position.

The Upright® MRI scanner, which operates at 6000 gauss (.6 Tesla) field strength, allows patients to be scanned while standing, sitting, reclining and in multiple flexion and extension positions. It is common in visualizing the spine that abnormalities are visualized in some positions and not others. This enables surgical corrections that heretofore would not have been addressable for lack of visualizing the symptom causing the pathology and therefore, in general enables the treating physician to achieve a better treatment outcome for his patient. A floor-recessed elevator brings the patient to the height appropriate for the targeted image region. A custom-built multi-position adjustable bed will allow patients to sit or lie on their backs, sides or stomachs at any angle. This allows the MRI technologist to ask the patient to position himself/herself in the exact position that generates his/her pain so that images of the patient in the position that explicitly generates the patient’s pain can be nailed down. Full-range-of-motion studies of the joints in virtually any direction are possible, a particularly promising feature for sports injuries.

Liquidity and Capital Resources

Cash and cash equivalents, and short term investments increased from $51.3 million at June 30, 2023 to $51.7 million at September 30, 2023.

Cash provided by operating activities for the first three months of fiscal 2024 was $2.6 million. Cash provided by operating activities was attributable principally to net income of $5.4 million, depreciation and amortization of $1.2 million, amortization on right-to-use assets of $1.0 million, and deferred income tax of $1.2 million, offset by an increase in accounts, management fee receivables and medical receivables of $2.8 million, a decrease of operating lease liabilities of $1.3 million and a decrease in other current liabilities of $1.5 million.

Cash used in investing activities for the first three months of fiscal 2024 was $79,000. Cash used in investing activities during the first three months of fiscal 2024 consisted of patent costs of $16,000 and the purchase of property and equipment of $63,000.

Cash used in financing activities for the first three months of fiscal 2024 was $2.1 million. The principal uses of cash in financing activities during the first three months of fiscal 2024 were the repayment of principal on long-term debt and capital lease obligations of $11,000, the purchase of treasury stock of $714,000 and distributions to non-controlling interests of $1.4 million.

Total liabilities decreased by 4.6% to $47.5 million at September 30, 2023 from $49.8 million at June 30, 2023. “Other” current liabilities decreased by 26.8% to $4.0 million at September 30, 2023 from $5.4 million at June 30, 2023. The current portion of our service contract liabilities increased by 5.0% to $4.0 million at September 30, 2023 as compared to $3.8 million at June 30, 2023. Customer deposits increased from $602,000 at June 30, 2023 to $623,000 at September 30, 2023.

As of September 30, 2023, the total of $4.0 million in “other” current liabilities included accrued salaries and payroll taxes of $2.8 million, sales taxes payable of $225,000 and other general and administrative expenses of 694,000.

Our working capital increased to $114.9 million at September 30, 2023 from $110.0 million at June 30, 2023. This resulted from an increase in current assets ($125.7 million at June 30, 2023 as compared to $129.1 million at September 30, 2023), and a decrease in current liabilities from $15.6 million at June 30, 2023 to $14.2 million at September 30, 2023.

Page 24

FONAR CORPORATION AND SUBSIDIARIES

The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible or when such net operating losses can be utilized. The Company considers projected future taxable income, the regulatory environment of the industry, and tax planning strategies in making this assessment. At the present, the Company believes that it is more likely than not that the benefits from certain deferred tax asset carryforwards, will not all be fully realized. In recognition of this inherent risk, a valuation allowance was established for the partial value of the deferred tax asset, (principally related to research and development tax credits and allowance for doubtful accounts). A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion or all of the valuation allowance.

The Company’s effective income tax rate is based on expected income, statutory rates and tax planning opportunities available in the various jurisdictions in which it operates. For interim financial reporting, the Company estimates the annual income tax rate based on projected taxable income for the full year and records a quarterly income tax provision or benefit in accordance with the anticipated annual rate. The Company refines the estimates of the year’s taxable income on a periodic basis as new information becomes available, including actual year-to-date financial results. This continual estimation process often results in a change to the expected effective income tax rate for the year. When this occurs, the Company adjusts the income tax provision during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the expected income tax rate. Significant judgment is required in determining the effective tax rate and in evaluating tax positions.

Fonar is not committed to making any significant capital expenditures for the remainder of the 2024 fiscal year.

Critical to our business plan are the improvement and expansion of the MRI facilities managed or owned by HMCA, and increasing the number of scans performed at those facilities. In addition, our business plan calls for a continuing commitment to providing our customers with enhanced equipment service and maintenance capabilities and delivering state-of-the-art, innovative and high quality equipment and upgrades at competitive prices.

In pursuit of those goals, Fonar has entered into an agreement with AIRS Medical to install its SwiftMR™ product on all Fonar Upright® scanners operating at the facilities HMCA owns or manages. Fonar will also make the AIRS SwiftMR™ product available to the installed base of Fonar scanners operating in the United States. The AIRS SwiftMR™ product enhances image quality using AI-powered denoising and sharpening. Management believes this product will improve the quality of the images produced by Fonar equipment, including the scanners operated by HMCA facilities.

Management is seeking to promote wider market recognition of Fonar’s scanner products, and to increase demand for Upright® scanning at the facilities HMCA owns or manages. Given the liquidity and credit constraints in the markets, the uncertainty resulting from the Patient Protection and Affordable Care Act or its repeal or modification, and the impact of the COVID-19 virus on the economy in general, the sale of medical equipment has and may continue to suffer.

The Company believes that its business plan has been responsible for its profitability in the past nine consecutive fiscal years and first fiscal quarter of fiscal 2024, and that its capital resources will be adequate to support operations through at least November 14, 2024. The future effects on our business of healthcare legislation, the 2.3% excise tax on sales of medical equipment, reimbursement rates, public health conditions and the general economic and business climate are not known at the present time. Nevertheless, there is a possibility of adverse consequences to our business operations from these causes. Although the Company cannot predict the full effect of COVID-19 for the first fiscal quarter or any later period, the Company believes that it has adequate revenues, cash reserves and other assets that will enable it to continue to operate until at least November 14, 2024.

Page 25

FONAR CORPORATION AND SUBSIDIARIES

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company maintains its funds in liquid accounts. None of our investments are in fixed rate instruments.

All of our revenue, expense and capital purchasing activities are transacted in United States dollars.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We carried out an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon our evaluation, our chief executive officer and chief financial officer have concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2023, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the same time periods specified in the Securities and Exchange Commission rules and forms.

Changes in Internal Control over Financial Reporting

There were no changes in our system of internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings: There were no material changes in litigation from that reported in our Form 10-K for the fiscal year ended June 30, 2023 and Form 10-Q for the fiscal quarter ended September 30, 2023.

Item 1A – Risk Factors: An investment in the securities of the Company is subject to various risks, the most significant of which are summarized below.

1. Reduced Reimbursement Rates. Most of our revenues are derived from our scanning center business conducted by HMCA. Our scanning center clients and the Florida facilities owned by HMCA are experiencing lower reimbursement rates from Medicare, other government programs and private insurance companies. To the extent possible, we counter these reductions by increasing scanning volume and controlling operating expenses. Inflation in the cost of both materials and labor have limited our ability to control our costs, negatively impacting our ability to maintain profitability in this business segment.

Page 26

FONAR CORPORATION AND SUBSIDIARIES

2. Inflation and Increasing Interest Rates. Inflation has drastically increased our costs for both materials and labor. The Federal Reserve has increased interest rates substantially in an attempt to control inflation, which in turn has increased the coast of capital. Diagnostic imaging facilities require significant amounts of capital to operate, particularly in the context of opening new diagnostic imaging centers. These increased costs make it more difficult to achieve organic growth and extend the time that a new center takes to achieve profitability. Continued costs increases, coupled with reduced reimbursement rates may threaten the profitability of our current operations and cause the cost of expansion to become prohibitively high.

3. Demand for MRI Scanners. The reduced reimbursement rates have a negative effect on our sales of MRI scanners. With lower revenue projections, prospective customers would demand lower prices for scanners. Although the reduced reimbursements may not affect foreign demand, a lower number of sales in the aggregate could reduce economies of scale and consequently, profit margins.

4. Manufacturing Competition. Many if not most of our competing scanner manufacturers have significantly greater financial resources, production capacity, and other resources than we do. Such competitors would include General Electric, Siemens, Hitachi and Phillips. Although Fonar is the only company which can manufacture and sell the unique Stand-Up® (Upright®) MRI scanner, potential customers must be convinced that the purchase of a Fonar scanner is their best choice. We believe that with time, that objective will be reached, particularly with customers scanning patients having neck, back, knee and various orthopedic issues who would benefit from being scanned in weight-bearing positions.

5. Dependence on Referrals. HMCA derives substantially all of its revenue, directly or indirectly, from fees charged for the diagnostic imaging services performed at the facilities. We depend on referrals of patients from unaffiliated physicians and other third parties to the facilities we manage or own for the services we perform. If these physicians and other third parties were to reduce the number of patients they refer or discontinue referring patients, scan volumes could decrease, which would reduce our net revenue and operating margins.

6. Pressure to Control Healthcare Costs. One of the principal objectives of health maintenance organizations and preferred provider organizations is to control the cost of healthcare services. Healthcare providers participating in managed care plans may be required to refer diagnostic imaging tests to certain providers depending on the plan in which a covered patient is enrolled. In addition, managed care contracting has become very competitive. The expansion of health maintenance organizations, preferred provider organizations and other managed care organizations in New York or Florida could have a negative impact on the utilization and pricing of services performed at the facilities HMCA manages or owns to the extent these organizations exert control over patients’ access to diagnostic imaging services, selections of the provider of such services and reimbursement rates for those services.

7. Scanning Facility Competition. The market for diagnostic imaging services is highly competitive. The facilities we manage or own compete for patients on the basis of reputation, location and the quality of diagnostic imaging services. Groups of radiologists, established hospitals, clinics and other independent organizations that own and operate imaging equipment are the principal competitors.

Page 27

FONAR CORPORATION AND SUBSIDIARIES

8. Eligibility Changes to Insurance Programs. Due to potential decreased availability of healthcare through private employers, the number of patients who are uninsured or participate in governmental programs may increase. Healthcare reform legislation will continue to increase the participation of individuals in the Medicaid program in states that elect to participate in the expanded Medicaid coverage. A shift in payor mix from managed care and other private payors to government payors or an increase in the number of uninsured patients may result in a reduction in the rates of reimbursement or an increase in uncollectible receivables or uncompensated care, with a corresponding decrease in net revenue. Policies now being offered under various insurance plans are expected to reduce demand for MRI scans as they become less affordable. Changes in the eligibility requirements for governmental programs such as the Medicaid program and state decisions on whether to participate in the expansion of such programs also could increase the number of patients who participate in such programs and the number of uninsured patients. Even for those patients who remain in private insurance plans, changes to those plans could increase patient financial responsibility, resulting in a greater risk of uncollectible receivables. These factors and events could have a material adverse effect on our business, financial condition, and results of operations.

9. Current and future changes in Florida Insurance Law. On March 24, 2023, Florida Governor Ron DeSantis signed into law House Bill 837. Dubbed the Tort Reform Act, the bill makes sweeping changes to Florida’s negligence laws, including reducing the statute of limitations, barring recovery for plaintiffs who are found to be 50% or greater at fault, and changing the rule of evidence regarding admissibility of the costs of prior and future medical treatment. The bill is viewed as a boon to insurance companies, and is largely aimed at reducing the cost of personal injury lawsuits to insurers operating in Florida’s motor vehicle and general liability markets. The full impact of the bill remains to be seen. Certain provisions of the bill are expected to negatively impact our reimbursement percentage and/or reimbursement rates. We expect that some percentage of our patients who are seeking treatment following motor vehicle accidents will not meet the new 51% threshold, and as a result we expect an increase in the percentage of uncollectible billings from those patients. We are unable to estimate what that percentage might be.

Further, changes to the evidentiary admissibility rules may lead to a higher percentage of our billings being paid at commercial rates instead of at the presently prevailing PIP schedule, a reduction in reimbursement of approximately 60%. These changes will negatively impact our Florida diagnostic imaging facilities (both those we own and those we manage) with more unpaid bills, and lower reimbursement rates. The full extent of those reductions are unclear at this time.

10. Federal and state privacy and information security laws. We must comply with numerous federal and state laws and regulations governing the collection, dissemination, access, use, security and privacy of PHI, including HIPAA and its implementing privacy and security regulations, as amended by the federal HITECH Act. If we fail to comply with applicable privacy and security laws, regulations and standards, properly maintain the integrity of our data, protect our proprietary rights to our systems, or defend against cybersecurity attacks, our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected.

Information security risks have significantly increased in recent years because of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct our operations, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties, including foreign state agents. Our operations rely on the secure processing, transmission and storage of confidential, proprietary and other information in our computer systems and networks.

11. Other changes in Domestic and Worldwide Economic Conditions. We are subject to risk arising from adverse changes in general domestic and global economic and other conditions, including recessions or economic slowdowns, disruptions of credit markets and military conflicts. Turbulence and uncertainty in the United States and international markets and economies may adversely affect our workforce, liquidity, financial condition, revenues, profitability and business operations generally.

Page 28

FONAR CORPORATION AND SUBSIDIARIES

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds: None

Item 3 - Defaults Upon Senior Securities: None

Item 4 - Mine Safety Disclosure: Not Applicable

Item 5 - Other Information: None

Item 6 - Exhibits and Reports on Form 8-K:

a)		Exhibit 31.1 Certification. See Exhibits

b)		Exhibit 32.1 Certification. See Exhibits

c)		Report on Form 8-K filed on September 29, 2022, Item 2.02: Results of Operations and Financial Condition for the fiscal year ended June 30, 2023.

SIGNATURES

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

FONAR CORPORATION

(Registrant)

____________________

By: /s/ Timothy Damadian

Timothy Damadian

Chairman of the Board of Directors, President, Principal Executive Officer and Treasurer

____________________

/s/ Luciano Bonanni

Luciano Bonanni

Executive Vice President, Chief Operating Officer, Acting Principal Financial Officer

Dated: November 14, 2023

Page 29

Exhibit 31.1

CERTIFICATION

Timothy Damadian and Luciano Bonanni each certify that:

I have reviewed this report on Form 10-Q of Fonar Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f) for the registrant and have:

designed such disclosure controls and procedures or caused such disclosure controls over procedures to be designed under my supervision to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	November 14, 2023

	/s/ Timothy Damadian
	________________________________
	Timothy Damadian
	Principal Executive Officer

	/s/ Luciano Bonanni
	________________________________
	Luciano Bonanni, Acting Principal Financial Officer

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of FONAR Corporation and Subsidiaries (the “Company”) on Form 10-Q for the fiscal quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy Damadian, Principal Executive Officer, and I, Luciano Bonanni, Acting Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/Timothy Damadian
	________________________________
	Timothy Damadian
	Principal Executive Officer

	/s/ Luciano Bonanni
	________________________________
	Luciano Bonanni Acting Principal Financial Officer

November 14, 2023

A signed original of this written statement required by Section 906 has been provided to Fonar Corporation and will be retained by Fonar Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

Cover - shares	3 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 07, 2023
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--06-30
Entity File Number	000-10248
Entity Registrant Name	FONAR CORPORATION
Entity Central Index Key	0000355019
Entity Tax Identification Number	11-2464137
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	110 Marcus Drive
Entity Address, City or Town	Melville
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11747
City Area Code	(631)
Local Phone Number	694-2929
Title of 12(b) Security	Common Stock, $.0001 par value
Trading Symbol	FONR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Common Class B [Member]
Entity Common Stock, Shares Outstanding		146
Common Class C [Member]
Entity Common Stock, Shares Outstanding		382,513
Class A Non Voting Preferred Stock [Member]
Entity Common Stock, Shares Outstanding		313,438
Common Stock [Member]
Entity Common Stock, Shares Outstanding		6,450,882

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023
Current Assets:
Cash and cash equivalents	$ 51,693	$ 51,280
Short-term investments	33	33
Accounts receivable - net	4,092	3,861
Accounts receivable - related party	90
Medical receivable - net	21,924	21,259
Management and other fees receivable - net	38,118	35,888
Management and other fees receivable - related medical practices - net	9,063	9,162
Inventories	2,824	2,570
Prepaid expenses and other current assets	1,310	1,608
Total Current Assets	129,147	125,661
Accounts receivable - long term	500	710
Deferred income tax asset	8,800	10,042
Property and equipment - net	21,107	22,146
Right-of-use Asset - operating lease	33,203	33,069
Right-of-use Asset - financing lease	680	729
Goodwill	4,269	4,269
Other intangible assets - net	3,355	3,432
Other assets	495	524
Total Assets	201,556	200,582
Current Liabilities:
Current portion of long-term debt	45	44
Accounts payable	1,040	1,579
Other current liabilities	3,984	5,444
Unearned revenue on service contracts	3,944	3,832
Unearned revenue on service contracts – related party	82
Operating lease liability - current portion	4,295	3,905
Financing lease liability - current portion	219	218
Customer deposits	623	602
Total Current Liabilities	14,232	15,624
Long-Term Liabilities:
Unearned revenue on service contracts	562	760
Deferred income tax liability	395	395
Due to related medical practices	93	93
Operating lease liability – net of current portion	31,503	32,105
Financing lease liability – net of current portion	565	620
Long-term debt, less current portion	104	115
Other liabilities	29	42
Total Long-Term Liabilities	33,251	34,130
Total Liabilities	47,483	49,754
Paid-in capital in excess of par value	182,613	182,613
Accumulated deficit	(20,085)	(24,191)
Treasury stock, at cost – 55 shares of common stock at September 30, 2023 and 11 shares of common stock at June 30, 2023	(1,230)	(516)
Total Fonar Corporation’s Stockholders’ Equity	161,299	157,907
Noncontrolling interests	(7,226)	(7,079)
Total Stockholders' Equity	154,073	150,828
Total Liabilities and Stockholders' Equity	201,556	200,582
Class A Non Voting Preferred Stock [Member]
Long-Term Liabilities:
Preferred stock value
Preferred Stock [Member]
Long-Term Liabilities:
Preferred stock value
Common Stock [Member]
Long-Term Liabilities:
Common stock value	1	1
Common Class B [Member]
Long-Term Liabilities:
Common stock value
Common Class C [Member]
Long-Term Liabilities:
Common stock value

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Sep. 30, 2023	Jun. 30, 2023
Treasury stock, shares	55,000	11,000
Class A Non Voting Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	453,000	453,000
Preferred stock, shares issued	313,000	313,000
Preferred stock, shares outstanding	313,000	313,000
Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	567,000	567,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Stock [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	8,500,000	8,500,000
Common stock, shares issued	6,506,000	6,462,000
Common stock, shares outstanding	6,451,000	6,451,000
Common Class B [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	227,000	227,000
Common stock, shares issued	146	146
Common stock, shares outstanding	146	146
Common Class C [Member]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	567,000	567,000
Common stock, shares issued	383,000	383,000
Common stock, shares outstanding	383,000	383,000

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
REVENUES
Patient fee revenue – net of contractual allowances and discounts	$ 8,676	$ 6,076
Product sales – net	164	30
Service and repair fees – net	1,864	1,820
Service and repair fees - related parties – net	28	28
Management and other fees – net	12,119	12,250
Management and other fees - related medical practices – net	2,987	2,987
Total Revenues – Net	25,838	23,191
COSTS AND EXPENSES
Costs related to patient fee revenue	4,427	3,800
Costs related to product sales	103	169
Costs related to service and repair fees	848	718
Costs related to service and repair fees - related parties	13	11
Costs related to management and other fees	7,024	6,501
Costs related to management and other fees – related medical practices	1,519	1,398
Research and development	467	349
Selling, general and administrative	4,866	6,334
Total Costs and Expenses	19,267	19,280
Income From Operations	6,571	3,911
Other Income		11
Interest Expense	(48)	(14)
Investment Income	507	151
Income Before Provision for Income Taxes and Noncontrolling Interests	7,030	4,059
Provision for Income Taxes	(1,670)	(1,409)
Net Income	5,360	2,650
Net Income - Noncontrolling Interests	(1,254)	(603)
Net Income – Attributable to FONAR	$ 4,106	$ 2,047

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Net Income (Loss) Attributable to Parent	$ 4,106	$ 2,047
Weighted Average Basic Shares Outstanding	6,408	6,545
Common Stockholders [Member]
Net Income (Loss) Attributable to Parent	$ 3,855	$ 1,923
Basic Net Income Per Common Share Available to Common Stockholders	$ 0.60	$ 0.29
Diluted Net Income Per Common Share Available to Common Stockholders	$ 0.59	$ 0.29
Weighted Average Basic Shares Outstanding	6,408	6,545
Weighted Average Diluted Shares Outstanding - Common Stockholders	6,536	6,673
Class A Non Voting Preferred Stockholders [Member]
Net Income (Loss) Attributable to Parent	$ 187	$ 92
Common Class C [Member]
Net Income (Loss) Attributable to Parent	$ 64	$ 32
Basic Net Income Per Common Share Available to Common Stockholders	$ 0.17	$ 0.08
Diluted Net Income Per Common Share Available to Common Stockholders	$ 0.17	$ 0.08
Weighted Average Basic Shares Outstanding	383	383
Weighted Average Diluted Shares Outstanding - Common Stockholders	383	383

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock, Common [Member]	Noncontrolling Interest [Member]	Total
Balance - June 30, 2022 at Jun. 30, 2022	$ 1	$ 184,531	$ (33,567)	$ (675)	$ (4,054)	$ 146,236
Net income			2,047			2,047
Purchase of Treasury Stock				(122)		(122)
Distributions - Non controlling					(1,634)	(1,634)
Income - Non controlling interests					603	603
Balance – September 30, 2022 at Sep. 30, 2022	1	184,531	(31,520)	(797)	(5,085)	147,130
Balance - June 30, 2022 at Jun. 30, 2023	1	182,613	(24,191)	(516)	(7,079)	150,828
Net income			4,106			4,106
Purchase of Treasury Stock				(714)		(714)
Distributions - Non controlling					(1,401)	(1,401)
Income - Non controlling interests					1,254	1,254
Balance – September 30, 2022 at Sep. 30, 2023	$ 1	$ 182,613	$ (20,085)	$ (1,230)	$ (7,226)	$ 154,073

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows from Operating Activities:
Net income	$ 5,360	$ 2,650
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,195	1,118
Amortization of right-of-use assets	1,024	1,061
(Recovery) Provision for bad debts	(68)	1,398
Deferred income tax – net	1,242	1,146
(Increase) decrease in operating assets, net:
Accounts, medical and management fee receivable(s)	(2,837)	(1,407)
Notes receivable	5	11
Inventories	(255)	(98)
Prepaid expenses and other current assets	293	(14)
Other assets	29
Increase (decrease) in operating liabilities, net:
Accounts payable	(539)	(779)
Other current liabilities	(1,463)	(1,580)
Operating lease liabilities	(1,322)	(912)
Financing lease liabilities	(54)	(52)
Customer deposits	20	171
Other liabilities	(12)	(16)
Net cash provided by operating activities	2,618	2,697
Cash Flows from Investing Activities:
Purchases of property and equipment	(63)	(939)
Cost of patents	(16)	(24)
Net cash used in investing activities	(79)	(963)
Cash Flows from Financing Activities:
Repayment of borrowings and capital lease obligations	(11)	(5)
Purchase of treasury stock	(714)	(122)
Distributions to noncontrolling interests	(1,401)	(1,634)
Net cash used in financing activities	(2,126)	(1,761)
Net Increase (Decrease) in Cash and Cash Equivalents	413	(27)
Cash and Cash Equivalents - Beginning of Period	51,280	48,723
Cash and Cash Equivalents - End of Period	$ 51,693	$ 48,696

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

3 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Basis of Presentation

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Revenues

BUSINESS COMBINATION

Earnings Per Share

Schedule of earning per share
	Three months ended September 30, 2023						Three months ended September 30, 2022
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic
Numerator: Net income available to common stockholders	$	4,106	$	3,855	$	64	$	2,047	$	1,923	$	32
Denominator:
Weighted average shares outstanding		6,408		6,408		383		6,545		6,545		383
Basic income per common share	$	0.64	$	0.60	$	0.17	$	0.31	$	0.29	$	0.08
Diluted
Denominator: Weighted average shares outstanding				6,408		383				6,545		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,536		383				6,673		383
Diluted income per common share			$	0.59	$	0.17			$	0.29	$	0.08

Recent Accounting Standards

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

3 Months Ended

Sep. 30, 2023

Receivables [Abstract]

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE

Receivables, net is comprised of the following at September 30, 2023, and June 30, 2023:


	September 30, 2023
	Gross Receivable		Allowance for doubtful accounts		Net
Accounts receivable	$	4,291	$	199	$	4,092
Accounts receivable - related party	$	90		—	$	90
Medical receivable	$	21,924	$	—	$	21,924
Management and other fees receivable	$	49,882	$	11,764	$	38,118
Management and other fees receivable from related medical practices ("PC’s")	$	13,829	$	4,766	$	9,063

	June 30, 2023
	Gross Receivable		Allowance for doubtful accounts		Net
Accounts receivable	$	4,060	$	199	$	3,861
Medical receivable	$	21,259	$	—	$	21,259
Management and other fees receivable	$	48,497	$	12,609	$	35,888
Management and other fees receivable from related medical practices ("PC’s")	$	13,152	$	3,990	$	9,162

The Company's customers are concentrated in the healthcare industry.

Accounts Receivable

Long Term Accounts Receivable

Schedule of facilities owned or managed
2025	$	450
2026		112
Total	$	562

Medical Receivables

Management and Other Fees Receivable

The Company’s patient fee revenue, net of contractual allowances and discounts for the three months ended September 30, 2023 and 2022 are summarized in the following table.

Schedule of patient fee revenue
	For the Three Months Ended September 30,
	2023		2022
Commercial Insurance/ Managed Care	$	1,173	$	911
Medicare/Medicaid		271		238
Workers' Compensation/Personal Injury		5,138		4,235
Other		2,094		692
Patient Fee Revenue, net of contractual allowances and discounts	$	8,676	$	6,076

OPERATING & FINANCING LEASES

3 Months Ended

Sep. 30, 2023

Operating Financing Leases

OPERATING & FINANCING LEASES

NOTE 4 – OPERATING & FINANCING LEASES

A reconciliation of operating and financing lease payments undiscounted cash flows to lease liabilities recognized as of September 30, 2023 is as follows:


Twelve Months Ending September 30,	Operating Lease Payments			Financing Lease Payments
2024	$	6,009		$	244
2025		5,768			244
2026		5,320			244
2027		3,865			102
2028		3,526			—
Thereafter		21,471			—
Present value discount		(10,161	)		(50	)
Total lease liability	$	35,798		$	784

INVENTORIES

3 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

INVENTORIES

NOTE 5 - INVENTORIES

Inventories included in the accompanying condensed consolidated balance sheets consist of the following:

Schedule of inventories
	September 30, 2023		June 30, 2023
Purchased parts, components and supplies	$	2,531	$	2,346
Work-in-process		293		224
Total Inventories	$	2,824	$	2,570

OTHER INTANGIBLE ASSETS

3 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

OTHER INTANGIBLE ASSETS

NOTE 6 – OTHER INTANGIBLE ASSETS

Other intangible assets, net of accumulated amortization, in the accompanying condensed consolidated balance sheets consist of the following:

Schedule of other intangible assets
	September 30, 2023		June 30, 2023
Capitalized software development costs	$	7,005	$	7,005
Patents and copyrights		5,468		5,452
Non-compete		4,150		4,150
Customer relationships		3,900		3,900
Gross Other intangible assets		20,523		20,507
Less: Accumulated amortization		17,168		17,075
Other Intangible Assets	$	3,355	$	3,432

Amortization of patents and copyrights for the three months ended September 30, 2023 and 2022 amounted to $43 and $54, respectively.

Amortization of customer relationships for the three months ended September 30, 2023 and 2022 amounted to $50 and $50, respectively.

OTHER CURRENT LIABILITIES

3 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

OTHER CURRENT LIABILITIES

NOTE 7 – OTHER CURRENT LIABILITIES

Other current liabilities in the accompanying condensed consolidated balance sheets consist of the following:

Schedule of other current liabilities
	September 30, 2023		June 30, 2023
Accrued salaries, commissions and payroll taxes	$	2,827	$	4,413
Sales tax payable		225		193
State income taxes payable		—		48
Legal and other professional fees		11		11
Accounting fees		47		100
Self-funded health insurance reserve		176		101
Accrued interest and penalty		4		4
Other general and administrative expenses		694		574
Other Current Liabilities	$	3,984	$	5,444

SEGMENT AND RELATED INFORMATION

3 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

SEGMENT AND RELATED INFORMATION

NOTE 8 - SEGMENT AND RELATED INFORMATION

Summarized financial information concerning the Company's reportable segments is shown in the following table:


	Medical Equipment			Management of Diagnostic Imaging Centers		Totals
For the three months ended September 30, 2023
Net revenues from external customers	$	2,056		$	23,782	$	25,838
Inter-segment net revenues	$	254		$	—	$	254
(Loss) Income from operations	$	(738	)	$	7,309	$	6,571
Depreciation and amortization	$	61		$	1,134	$	1,195
Capital expenditures	$	16		$	63	$	79

For the three months ended September 30, 2022
Net revenues from external customers	$	1,878		$	21,313	$	23,191
Inter-segment net revenues	$	245		$	—	$	245
(Loss) Income from operations	$	(802	)	$	4,713	$	3,911
Depreciation and amortization	$	72		$	1,046	$	1,118
Capital expenditures	$	24		$	939	$	963

SUPPLEMENTAL CASH FLOW INFORMATION

3 Months Ended

Sep. 30, 2023

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

NOTE 9 – SUPPLEMENTAL CASH FLOW INFORMATION

During the three months ended September 30, 2023 and September 30, 2022, the Company paid $48 and $15 for interest, respectively.

During the three months ended September 30, 2023 and September 30, 2022, the Company paid $150 and $395 for income taxes, respectively.

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10 – COMMITMENTS AND CONTINGENCIES

Litigation

There were no material changes in litigation from that reported in our Form 10-K for the fiscal year ended June 30, 2023.

Other Matters

INCOME TAXES

3 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11 - INCOME TAXES

SUBSEQUENT EVENTS

3 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 12 – SUBSEQUENT EVENTS

The Company has evaluated events that occurred subsequent to September 30, 2023 and through the date the condensed consolidated financial statements were issued.

As of October 31, 2023, the Company repurchased 33 shares of common stock at a cost of $471 which was authorized under the stock repurchase plan adopted in September 2022.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Principles of Consolidation

Revenues

BUSINESS COMBINATION

Earnings Per Share

Schedule of earning per share
	Three months ended September 30, 2023						Three months ended September 30, 2022
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic
Numerator: Net income available to common stockholders	$	4,106	$	3,855	$	64	$	2,047	$	1,923	$	32
Denominator:
Weighted average shares outstanding		6,408		6,408		383		6,545		6,545		383
Basic income per common share	$	0.64	$	0.60	$	0.17	$	0.31	$	0.29	$	0.08
Diluted
Denominator: Weighted average shares outstanding				6,408		383				6,545		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,536		383				6,673		383
Diluted income per common share			$	0.59	$	0.17			$	0.29	$	0.08

Recent Accounting Standards

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of earning per share

Schedule of earning per share
	Three months ended September 30, 2023						Three months ended September 30, 2022
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic
Numerator: Net income available to common stockholders	$	4,106	$	3,855	$	64	$	2,047	$	1,923	$	32
Denominator:
Weighted average shares outstanding		6,408		6,408		383		6,545		6,545		383
Basic income per common share	$	0.64	$	0.60	$	0.17	$	0.31	$	0.29	$	0.08
Diluted
Denominator: Weighted average shares outstanding				6,408		383				6,545		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,536		383				6,673		383
Diluted income per common share			$	0.59	$	0.17			$	0.29	$	0.08

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (Tables)

3 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Financing receivable noncurrent allowance for credit loss


	September 30, 2023
	Gross Receivable		Allowance for doubtful accounts		Net
Accounts receivable	$	4,291	$	199	$	4,092
Accounts receivable - related party	$	90		—	$	90
Medical receivable	$	21,924	$	—	$	21,924
Management and other fees receivable	$	49,882	$	11,764	$	38,118
Management and other fees receivable from related medical practices ("PC’s")	$	13,829	$	4,766	$	9,063

	June 30, 2023
	Gross Receivable		Allowance for doubtful accounts		Net
Accounts receivable	$	4,060	$	199	$	3,861
Medical receivable	$	21,259	$	—	$	21,259
Management and other fees receivable	$	48,497	$	12,609	$	35,888
Management and other fees receivable from related medical practices ("PC’s")	$	13,152	$	3,990	$	9,162

Schedule of facilities owned or managed

Schedule of facilities owned or managed
2025	$	450
2026		112
Total	$	562

Schedule of patient fee revenue

Schedule of patient fee revenue
	For the Three Months Ended September 30,
	2023		2022
Commercial Insurance/ Managed Care	$	1,173	$	911
Medicare/Medicaid		271		238
Workers' Compensation/Personal Injury		5,138		4,235
Other		2,094		692
Patient Fee Revenue, net of contractual allowances and discounts	$	8,676	$	6,076

OPERATING & FINANCING LEASES (Tables)

3 Months Ended

Sep. 30, 2023

Operating Financing Leases

Lessee operating leases liability maturity


Twelve Months Ending September 30,	Operating Lease Payments			Financing Lease Payments
2024	$	6,009		$	244
2025		5,768			244
2026		5,320			244
2027		3,865			102
2028		3,526			—
Thereafter		21,471			—
Present value discount		(10,161	)		(50	)
Total lease liability	$	35,798		$	784

INVENTORIES (Tables)

3 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Schedule of inventories

Schedule of inventories
	September 30, 2023		June 30, 2023
Purchased parts, components and supplies	$	2,531	$	2,346
Work-in-process		293		224
Total Inventories	$	2,824	$	2,570

OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of other intangible assets

Schedule of other intangible assets
	September 30, 2023		June 30, 2023
Capitalized software development costs	$	7,005	$	7,005
Patents and copyrights		5,468		5,452
Non-compete		4,150		4,150
Customer relationships		3,900		3,900
Gross Other intangible assets		20,523		20,507
Less: Accumulated amortization		17,168		17,075
Other Intangible Assets	$	3,355	$	3,432

OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of other current liabilities

Schedule of other current liabilities
	September 30, 2023		June 30, 2023
Accrued salaries, commissions and payroll taxes	$	2,827	$	4,413
Sales tax payable		225		193
State income taxes payable		—		48
Legal and other professional fees		11		11
Accounting fees		47		100
Self-funded health insurance reserve		176		101
Accrued interest and penalty		4		4
Other general and administrative expenses		694		574
Other Current Liabilities	$	3,984	$	5,444

SEGMENT AND RELATED INFORMATION (Tables)

3 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of summarized segment financial information


	Medical Equipment			Management of Diagnostic Imaging Centers		Totals
For the three months ended September 30, 2023
Net revenues from external customers	$	2,056		$	23,782	$	25,838
Inter-segment net revenues	$	254		$	—	$	254
(Loss) Income from operations	$	(738	)	$	7,309	$	6,571
Depreciation and amortization	$	61		$	1,134	$	1,195
Capital expenditures	$	16		$	63	$	79

For the three months ended September 30, 2022
Net revenues from external customers	$	1,878		$	21,313	$	23,191
Inter-segment net revenues	$	245		$	—	$	245
(Loss) Income from operations	$	(802	)	$	4,713	$	3,911
Depreciation and amortization	$	72		$	1,046	$	1,118
Capital expenditures	$	24		$	939	$	963

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2022	Jul. 01, 2015
Noncontrolling Interest [Member]
The ownership interest of the original investors of HDM		30.00%
Investors ownership interest percentage	29.20%
Controlling Interest [Member]
The ownership interest of Imperial Management Services after reorganization of newly expanded HDM		24.20%
The ownership interest of Health Management Corporation of America after reorganization of newly expanded HDM		45.80%
Direct purchase of Noncontrolling Interests	$ 546,000
Direct ownership interest percentage	70.80%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share - (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Basic Numerator: Net income available to common stockholders	$ 4,106	$ 2,047
Basic Denominator: Weighted average shares outstanding	6,408	6,545
Basic income per common share	$ 0.64	$ 0.31
Common Class C [Member]
Basic Numerator: Net income available to common stockholders	$ 64	$ 32
Basic Denominator: Weighted average shares outstanding	383	383
Basic income per common share	$ 0.17	$ 0.08
Diluted Denominator: Weighted average shares outstanding	383	383
Convertible Class C Stock
Total Denominator for Diluted Earnings Per Share	383	383
Diluted Income per Common Share	$ 0.17	$ 0.08
Common Stock [Member]
Basic Numerator: Net income available to common stockholders	$ 3,855	$ 1,923
Basic Denominator: Weighted average shares outstanding	6,408	6,545
Basic income per common share	$ 0.60	$ 0.29
Diluted Denominator: Weighted average shares outstanding	6,408	6,545
Convertible Class C Stock	128	128
Total Denominator for Diluted Earnings Per Share	6,536	6,673
Diluted Income per Common Share	$ 0.59	$ 0.29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares shares in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Accounting Policies [Abstract]
Shares included upon conversion of Class C Common	128	128

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - Long Term Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 4,092	$ 3,861
Accounts receivable - Related party	90
Medical Receivables	21,924	21,259
Management and other fees receivable	38,118	35,888
Management and other fees receivable from related medical practices ("PC's")	9,063	9,162
Accounts Receivable [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	4,291	4,060
Accounts receivable - Related party	90
Medical Receivables	21,924	21,259
Management and other fees receivable	49,882	48,497
Management and other fees receivable from related medical practices ("PC's")	13,829	13,152
Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	199	199
Accounts receivable - Related party
Medical Receivables
Management and other fees receivable	11,764	12,609
Management and other fees receivable from related medical practices ("PC's")	$ 4,766	$ 3,990

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - Long Term Accounts Receivable (Details 1) $ in Thousands	Sep. 30, 2023 USD ($)
Receivables [Abstract]
2025	$ 450
2026	112
Total	$ 562

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
[custom:PatientFeeRevenueNetOfContractualAllowancesAndDiscount]	$ 8,676	$ 6,076
Commercial Insurance Managed Care [Member]
Disaggregation of Revenue [Line Items]
[custom:PatientFeeRevenueNetOfContractualAllowancesAndDiscount]	1,173	911
Medicare Medicaid [Member]
Disaggregation of Revenue [Line Items]
[custom:PatientFeeRevenueNetOfContractualAllowancesAndDiscount]	271	238
Workers Compensation Personal Injury [Member]
Disaggregation of Revenue [Line Items]
[custom:PatientFeeRevenueNetOfContractualAllowancesAndDiscount]	5,138	4,235
Other [Member]
Disaggregation of Revenue [Line Items]
[custom:PatientFeeRevenueNetOfContractualAllowancesAndDiscount]	$ 2,094	$ 692

ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023
Receivables [Abstract]
Accounts receivable - long term	$ 500		$ 710
Percentage of net revenue derived from no-fault and personal injury protection claim	67.80%	69.00%
Percentage of consolidated net revenue from management fees charged to related party medical practices	11.60%	12.90%

OPERATING & FINANCING LEASES - Lease Payments (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Operating Lease Payments [Member]
Lessee, Operating Lease, Liability, to be Paid, Year One	$ 6,009
Lessee, Operating Lease, Liability, to be Paid, Year Two	5,768
Lessee, Operating Lease, Liability, to be Paid, Year Three	5,320
Lessee, Operating Lease, Liability, to be Paid, Year Four	3,865
Lessee, Operating Lease, Liability, to be Paid, Year Five	3,526
Lessee, Operating Lease, Liability, to be Paid, after Year Five	21,471
[custom:PresentValueDiscount-0]	(10,161)
Operating Lease, Liability	35,798
Financing Lease Payments [Member]
Finance Lease, Liability, to be Paid, Year One	244
Finance Lease, Liability, to be Paid, Year Two	244
Finance Lease, Liability, to be Paid, Year Three	244
Finance Lease, Liability, to be Paid, Year Four	102
Finance Lease, Liability, to be Paid, Year Five
Finance Lease, Liability, to be Paid, after Year Five
[custom:PresentValueDiscountFinancingLease-0]	(50)
Finance Lease, Liability	$ 784

INVENTORIES - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023
Inventory Disclosure [Abstract]
Purchased parts, components and supplies	$ 2,531	$ 2,346
Work-in-process	293	224
Total Inventories	$ 2,824	$ 2,570

OTHER INTANGIBLE ASSETS - Other intagible assets net of amoritization (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023
Finite-Lived Intangible Assets [Line Items]
Gross other intangible assets	$ 20,523	$ 20,507
Less: Accumulated amortization	17,168	17,075
Other intangible assets-net	3,355	3,432
Software and Software Development Costs [Member]
Finite-Lived Intangible Assets [Line Items]
Gross other intangible assets	7,005	7,005
Patents and copyrights
Finite-Lived Intangible Assets [Line Items]
Gross other intangible assets	5,468	5,452
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross other intangible assets	4,150	4,150
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross other intangible assets	$ 3,900	$ 3,900

OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Patents and copyrights
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 43	$ 54
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 50	$ 50

OTHER CURRENT LIABILITIES - Other Current Liabilities - (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Jun. 30, 2023
Payables and Accruals [Abstract]
Accrued salaries, commissions and payroll taxes	$ 2,827	$ 4,413
Sales tax payable	225	193
State income taxes payable		48
Legal and other professional fees	11	11
Accounting fees	47	100
Self-funded health insurance reserve	176	101
Accrued interest and penalty	4	4
Other general and administrative expenses	694	574
Other Current Liabilities	$ 3,984	$ 5,444

SEGMENT AND RELATED INFORMATION - Sumarized Segments - (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Net revenues from external customers	$ 25,838	$ 23,191
Inter-segment net revenues	254	245
(Loss) Income from operations	6,571	3,911
Depreciation and amortization	1,195	1,118
Capital expenditures	79	963
Medical Equipment [Member]
Net revenues from external customers	2,056	1,878
Inter-segment net revenues	254	245
(Loss) Income from operations	(738)	(802)
Depreciation and amortization	61	72
Capital expenditures	16	24
Management Of Diagnostic Imaging Centers [Member]
Net revenues from external customers	23,782	21,313
Inter-segment net revenues
(Loss) Income from operations	7,309	4,713
Depreciation and amortization	1,134	1,046
Capital expenditures	$ 63	$ 939

SUPPLEMENTAL CASH FLOW INFORMATION (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Supplemental Cash Flow Elements [Abstract]
Interest paid	$ 48	$ 15
Income taxes paid	$ 150	$ 395

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Sep. 26, 2022
Commitments and Contingencies Disclosure [Abstract]
Stock purchase plan				$ 9,000
Number of shares repurchased	43	9
Number of shares repurchased, value	$ 714	$ 122
Liability for individual claims	150
Reserve for self-funded	$ 176		$ 101

INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense	$ 1,670	$ 1,409
Income tax component - current	428
Income tax component - deferred	1,242
Deferred tax asset	8,800
Deferred tax liability	395
Federal operating loss carryforwards	3,198
Federal operating losses	$ 3,198

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] shares in Thousands, $ in Thousands	Oct. 31, 2023 USD ($) shares
Subsequent Event [Line Items]
Stock repurchase plan, shares \| shares	33
Stock repurchase plan \| $	$ 471

Fonar (NASDAQ:FONR)
Historical Stock Chart
From Oct 2024 to Nov 2024

Fonar (NASDAQ:FONR)
Historical Stock Chart
From Nov 2023 to Nov 2024

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

FONR Fonar Corporation

Fonar Corporation News

Your Recent History

Company

Business

Popular

Get The App

Trending Now

Toplists

Market Data

News

Trading Tools

Markets

Discover

Hot Features

Follow Feed

Options Flow

Monitor

FONR Fonar Corporation

Fonar Corporation News

Your Recent History

Company

Business

Popular

Get The App