FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED) ASSETS December 31, June 30, 2008 2008 Current Assets: (UNAUDITED) --------- -------- Cash and cash equivalents $ 2,583 $ 1,326 Marketable securities 19 1,068 Accounts receivable - net 5,642 4,689 Accounts receivable - related parties - net 817 469 Medical receivables - net 606 1,228 Management fee receivable - net 3,855 5,040 Management fee receivable - related medical practices - net 1,325 1,372 Costs and estimated earnings in excess of Billings on uncompleted contracts 218 6 Inventories 3,856 3,256 Current portion of advances and notes to related medical practices 176 214 Current portion of notes receivable less discount for below market interest 499 2,508 Prepaid expenses and other current assets 921 811 --------- -------- Total Current Assets 20,517 21,987 Property and equipment - net 3,408 3,933 Advances and notes to related medical practices - net 176 263 Notes receivable less discount for below market interest 2,042 2,297 Other intangible assets - net 4,869 4,810 Other assets 1,919 1,936 --------- -------- Total Assets $ 32,931 $ 35,226 ========= ======== FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED) LIABILITIES AND STOCKHOLDERS' DEFICIENCY December 31, June 30, 2008 2008 (UNAUDITED) --------- --------- Current portion of long-term debt and capital leases $ 144 $ 373 Accounts payable 4,260 4,020 Other current liabilities 7,992 8,316 Unearned revenue on service contracts 5,375 4,732 Unearned revenue on service contracts - related parties 780 462 Customer advances 11,793 12,804 Customer advance - related party 1,041 1,472 Billings in excess of costs and estimated earnings on uncompleted contracts 3,924 5,773 --------- --------- Total Current Liabilities 35,309 37,952 Long-Term Liabilities: Due to related medical practices 95 98 Long-term debt and capital leases, less current portion 780 757 Other liabilities 425 497 --------- --------- Total Long-Term Liabilities 1,300 1,352 --------- --------- Total Liabilities 36,609 39,304 --------- --------- Minority interest 64 167 --------- --------- STOCKHOLDERS' DEFICIENCY: Class A non-voting preferred stock $.0001 par value; 1,600,000 authorized, 313,451 issued and outstanding at December 31, 2008 and June 30, 2008 - - Common Stock $.0001 par value; 30,000,000 shares authorized at December 31, 2008 and June 30, 2008, 4,915,918 issued at December 31, 2008 and June 30, 2008 4,904,275 outstanding at December 31, 2008 and June 30, 2008 1 1 Class B Common Stock $.0001 par value; 800,000 shares authorized, (10 votes per share), 158 issued and outstanding at December 31, 2008 and June 30, 2008 - - Class C Common Stock $.0001 par value; 2,000,000 shares authorized, (25 votes per share), 382,513 issued and outstanding at December 31, 2008 and June 30, 2008 - - Paid-in capital in excess of par value 172,276 172,276 Accumulated other comprehensive loss (24) (73) Accumulated deficit (175,049) (175,380) Notes receivable from employee stockholders (271) (394) Treasury stock, at cost - 11,643 shares of common stock at December 31, 2008 and June 30, 2008 (675) (675) --------- --------- Total Stockholders' Deficiency (3,742) (4,245) --------- --------- Total Liabilities and Stockholders' Deficiency $ 32,931 $ 35,226 ========= ========= FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data) FOR THE THREE MONTHS ENDED DECEMBER 31, --------------------- REVENUES 2008 2007 --------- --------- Product sales - net $ 4,407 $ 4,003 Service and repair fees - net 2,314 2,463 Service and repair fees - related parties - net 365 262 Management and other fees - net 1,735 2,047 Management and other fees - related medical practices - net 714 747 License fees and royalties 1,755 1,158 --------- --------- Total Revenues - Net 11,290 10,680 --------- --------- COSTS AND EXPENSES Costs related to product sales 2,824 3,518 Costs related to service and repair fees 906 1,208 Costs related to service and repair fees - related parties 143 129 Costs related to management and other fees 1,074 1,466 Costs related to management and other fees - related medical practices 698 543 Research and development 928 1,323 Selling, general and administrative 3,471 5,945 Provision for bad debts 545 424 --------- --------- Total Costs and Expenses 10,589 14,556 --------- --------- Income (Loss) From Operations 701 (3,876) Interest Expense (40) (156) Investment Income 113 195 Interest Income - Related Parties 6 10 Other Income 1 1 Minority Interest in Income of Partnerships (-) (12) --------- --------- NET INCOME (LOSS) $ 781 $ (3,838) ========= ========= Basic Net Income (Loss) Per Common Share $ 0.16 $ (0.78) ========= ========= Diluted Net Income (Loss) Per Common Share $ 0.16 $ (0.78) ========= ========= Weighted Average Basic Shares Outstanding 4,904,275 4,899,252 ========= ========= Weighted Average Diluted Shares Outstanding 4,904,275 4,899,252 ========= ========= FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data) FOR THE SIX MONTHS ENDED DECEMBER 31, --------------------- REVENUES 2008 2007 --------- --------- Product sales - net $ 5,819 $ 6,592 Service and repair fees - net 4,645 4,928 Service and repair fees - related parties - net 635 516 Management and other fees - net 3,782 4,244 Management and other fees - related medical practices - net 1,439 1,912 License fees and royalties 1,755 1,158 --------- --------- Total Revenues - Net 18,075 19,350 --------- --------- COSTS AND EXPENSES Costs related to product sales 4,265 6,330 Costs related to service and repair fees 1,831 2,398 Costs related to service and repair fees - related parties 250 251 Costs related to management and other fees 2,277 2,556 Costs related to management and other fees - related medical practices 1,354 1,490 Research and development 1,809 2,486 Selling, general and administrative 6,735 11,232 Provision for bad debts 700 589 --------- --------- Total Costs and Expenses 19,221 27,332 --------- --------- Loss From Operations (1,146) (7,982) Interest Expense (119) (258) Investment Income 145 375 Interest Income - Related Parties 12 19 Other Income 2 7 Minority Interest in Income of Partnerships (11) (174) Gain on Sale of Investment - 571 Gain on Sale of Consolidated Subsidiary 1,448 3,395 --------- --------- NET INCOME (LOSS) $ 331 $ (4,047) ========= ========= Basic Net Income (Loss) Per Common Share $ 0.07 $ (0.83) ========= ========= Diluted Net Income (Loss) Per Common Share $ 0.07 $ (0.83) ========= ========= Weighted Average Basic Shares Outstanding 4,904,275 4,891,730 ========= ========= Weighted Average Diluted Shares Outstanding 4,904,275 4,891,730 ========= =========UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, pMRI™, Dynamic™, Multi-Position™, True Flow™, The Proof is in the Picture™, Spondylography™ and Spondylometry™ are trademarks of FONAR Corporation. This release may include forward-looking statements from the company that may or may not materialize. Additional information on factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.
Contact Information: Contact: Daniel Culver FONAR Corporation Tel: 631-694-2929 www.fonar.com