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Corporate Governance



TO: All Employees of Fonar Corporation, Health Management Corporation of America and Health Diagnostics Management, LLC

FROM: The Audit Committee of Fonar Corporation and Subsidiaries

Introduction: Briefly stated, this is a program established to provide any and all employees a confidential method to report any incidents which they believe may be illegal or improper financial, auditing or accounting conduct, any violation of the Company’s Code of Conduct or other unethical behavior.

Purpose of Program: Under the Sarbanes-Oxley Act, the audit committee of a company covered by the Act is required to established procedures for (1) receiving and retaining information about, and treating alleged incidents involving the company regarding accounting, internal accounting controls or auditing matter and (2) the confidential, anonymous submission of concerns by employees about questionable accounting or auditing matters.

The Audit Committee: Our Audit Committee consists only of independent directors who, among other things, oversee auditing, accounting and financial matters and the maintenance of honesty, integrity and appropriate controls and procedures in order to assure that the financial statements of the Company are accurate and properly prepared. The Audit Committee has the final authority in selecting our auditors. The Audit Committee presently consists of Charles O’Data, Robert Janoff and Ronald Lehman.

Person to Contact: Charles O’Data, the Chairman of Audit Committee is designated as the person to contact. You can contact him by mail, fax or e-mail:

347 Lincoln Avenue
Beaver, PA 15009
Fax: 724-775-6455


January through March he can be reached at:

9230 Clove Ct.
Ft. Myers, Florida 33919

If Mr. O’Data is unavailable, you may contact Mr. Janoff by mail:

Robert Janoff
32 Osage Drive
Huntington Station, NY 11746-2036

Your Right to Report: If you know or believe that any person in the Company is doing anything which is illegal or improper with respect to financial, accounting, auditing or following proper procedures, you are encouraged to report the matter to the parties designated below. The misconduct in question could range from stealing, embezzlement, bribing or taking bribes, to improper recording or reporting, or the improper withholding of information. If you are in doubt as to whether or not to report an incident, report it.

In addition to reporting matters of the type indicated above, you have the right to report or communicate concerns, about actual or potential violations of the Company’s Code of Conduct, including unethical behavior and actual or suspected fraud.

You also have the right to write obtain advice before making decisions in the course of your work that appear to have significant legal or ethical implications.

Confidentiality: Your name will be kept confidential by the person you contact. You also have the right to make reports anonymously. No retribution will be taken against an employee making a report under this program.

Follow-Up: If you do not believe appropriate remedial action has been taken, you have the option to report directly to our external auditor, Marcum LLP at 655 Third Avenue, 16th Floor, New York, New York 10017, Attention: Kevin McGann or such other person Marcum LLP may designate.

Non-exclusive: This program is designed to give you a special protected way to discuss matters of concern confidentially or anonymously. You may still discuss concerns you have with supervisors, management, or the personnel department, as you think is most appropriate.


The undersigned employee acknowledges that he or she has received the Company’s Ethics Hotline/Whistleblower Program.

______________________________                     ____________________
Name                                                                 Date

Please sign and return to Personnel

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