0000355019
2012-07-01
2012-09-30
0000355019
us-gaap:CommonStockMember
2012-10-31
0000355019
us-gaap:CommonClassBMember
2012-10-31
0000355019
us-gaap:CommonClassCMember
2012-10-31
0000355019
FONR:PreferredStockClassAMember
2012-10-31
0000355019
2012-09-30
0000355019
2012-06-30
0000355019
FONR:ClassANonVotingPreferredStockMember
2012-09-30
0000355019
FONR:ClassANonVotingPreferredStockMember
2012-06-30
0000355019
us-gaap:PreferredStockMember
2012-09-30
0000355019
us-gaap:PreferredStockMember
2012-06-30
0000355019
us-gaap:CommonStockMember
2012-09-30
0000355019
us-gaap:CommonStockMember
2012-06-30
0000355019
us-gaap:CommonClassBMember
2012-09-30
0000355019
us-gaap:CommonClassBMember
2012-06-30
0000355019
us-gaap:CommonClassCMember
2012-09-30
0000355019
us-gaap:CommonClassCMember
2012-06-30
0000355019
2011-07-01
2011-09-30
0000355019
2011-09-30
0000355019
2011-06-30
0000355019
us-gaap:CommonStockMember
2012-07-01
2012-09-30
0000355019
us-gaap:CommonStockMember
2011-07-01
2011-09-30
0000355019
us-gaap:CommonClassCMember
2012-07-01
2012-09-30
0000355019
us-gaap:CommonClassCMember
2011-07-01
2011-09-30
0000355019
FONR:ReceivablesFromEquipmentSalesAndServiceContractsMember
2012-09-30
0000355019
FONR:ReceivablesFromEquipmentSalesAndServiceContractsRelatedPartyMember
2012-09-30
0000355019
FONR:ManagementAndOtherFeesReceivablesMember
2012-09-30
0000355019
FONR:ManagementAndOtherFeesReceivablesFromRelatedMedicalPracticesPCsMember
2012-09-30
0000355019
us-gaap:InventoriesMember
2012-09-30
0000355019
us-gaap:InventoriesMember
2012-06-30
0000355019
FONR:MedicalEquipmentMember
2012-07-01
2012-09-30
0000355019
FONR:MedicalEquipmentMember
2011-07-01
2011-09-30
0000355019
FONR:ManagementOfDiagnosticImagingCentersMember
2012-07-01
2012-09-30
0000355019
FONR:ManagementOfDiagnosticImagingCentersMember
2011-07-01
2011-09-30
0000355019
us-gaap:OtherExpenseMember
2012-07-01
2012-09-30
0000355019
us-gaap:OtherExpenseMember
2011-07-01
2011-09-30
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
Fonar Corporation
0000355019
10-Q
2012-09-30
true
--06-30
No
No
Yes
Smaller Reporting Company
Q1
2013
5931262
158
382513
313438
12905000
12032000
4910000
5095000
90000
4282000
3782000
1709000
1311000
1159000
1129000
2517000
2195000
2517000
2195000
117000
116000
202000
206000
27891000
25866000
3123000
3173000
242000
276000
3716000
3835000
490000
465000
35462000
33615000
1658000
1854000
2212000
2077000
8001000
7693000
5620000
5475000
3898000
3881000
25000
100000
21496000
21080000
231000
229000
706000
777000
390000
401000
1352000
1454000
22848000
22534000
174084000
174084000
6174000
6096000
12614000
11081000
35462000
33615000
1041000
1776000
2709000
2905000
27000
27000
3769000
3329000
1965000
1571000
9511000
9608000
3777000
4708000
5734000
4900000
1056000
1475000
865000
813000
9000
8000
2171000
2185000
817000
819000
330000
329000
2212000
2043000
175000
175000
7635000
7847000
1876000
1761000
76000
107000
-326000
-259000
1452000
1513000
72000
78000
25000
27000
0.23
0.25
0.06
0.07
5901262
5668762
1000
1000
82000
25000
47000
0.0001
0.0001
0.001
0.001
453000
453000
567000
567000
313438
313438
313438
313438
0.0001
0.0001
0.0001
0.0001
0.0001
0.0001
8500000
8500000
227000
227000
567000
567000
5912905
5912905
158
158
382513
382513
5901262
5901262
158
158
382513
382513
1451000
1508000
326000
259000
1777000
1767000
-1000
-5000
12905000
12032000
9512000
9251000
59000
62000
1778000
1772000
1850000
1772000
-382513
-382513
415000
525000
0
104000
-979000
66000
33000
14000
-30000
-387000
-322000
-1417000
6000
-73000
-24000
-14000
112000
-67000
536000
727000
16000
-1208000
0
813000
-10000
-4000
2000
2000
-75000
0
211000
116000
36000
39000
266000
326000
249000
288000
-2000
-2000
-513000
-612000
873000
261000
72000
-9000
56000
1633000
1028000
-247000
-155000
<p style="margin: 0"></p>
<p style="font: 16pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">NOTE 1 - BASIS OF PRESENTATION & LIQUIDITY & CAPITAL RESOURCES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Basis of Presentation</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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, 2012, are not necessarily indicative
of the results that may be expected for the fiscal year ending June 30, 2013. 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, 2012 for
the fiscal year ended June 30, 2012.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Liquidity </u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">At September 30, 2012, the Company
had working capital of $6.4 million as compared to working capital of $4.8 million at June 30, 2012, and stockholders’ equity
of $12.6 million at September 30, 2012 as compared to stockholders’ equity of $11.1 million at June 30, 2012. For the three
months ended September 30, 2012, we realized a net income of $1.8 million.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">The Company believes that its business
plan has been responsible for the past two consecutive fiscal years of profitability (fiscal 2012 and fiscal 2011) and that its
capital resources will be adequate to support operations at current levels through June 30, 2013. In fiscal 2010 and prior years,
however, the Company also experienced losses and periods of working capital deficits. The future effects on our business of healthcare
reform legislation, the Deficit Reduction Act, the tax on sales of medical equipment 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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">In order to promote sales, the Company
is continuing to focus on marketing campaigns to strengthen the demand for our products and services. Management anticipates that
the Company’s capital resources will continue to improve if the Company’s MRI scanner products gain wider market recognition
and acceptance resulting in both increased product sales and scan volumes. If the Company is not successful with our marketing
efforts to increase sales, the Company will experience a shortfall in cash, and it will be necessary to reduce operating expenses
or obtain funds through equity or debt financing.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">If the Company is unable to meet expenditures
with revenues or financing then it will be necessary to reduce expenses further, or seek other sources of funds through the issuance
of debt or equity financing in order to conduct operations as now conducted subsequent to fiscal 2013.</p>
<p style="margin: 0"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Principles of Consolidation</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Income Per Share</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">Basic income per share (“EPS”)
is computed based on weighted average shares outstanding and excludes any potential dilution. 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,
2012 and 2011.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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, 2012 and 2011, the number of common shares potentially
issuable upon the exercise of certain options of 13,000 and 20,000; respectively, have not been included in the computation of
diluted EPS since the effect would be antidilutive.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 9pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td> </td>
<td colspan="11" style="text-align: center">Three months ended</td><td> </td>
<td colspan="11" style="text-align: center">Three months ended</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2011</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td> </td>
<td colspan="23" style="text-align: center">(000's omitted, except per share data)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Class C Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Class C Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-decoration: none; text-align: left; padding-left: 5.4pt"><p style="font: 9pt Courier New, Courier, Monospace; margin: 0"><u>Basic</u></p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0">Numerator:</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 40%">Net income available to common
<br />
stockholders</td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,452</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,355</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">25</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,513</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,409</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">27</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5.4pt">Denominator:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Weighted average shares<br /> outstanding</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,901</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,901</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Basic income per common<br /> share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.25</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.06</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.27</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.25</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.07</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: none; text-align: left; padding-left: 0pt"><p style="font: 9pt Courier New, Courier, Monospace; margin: 0"><u>Diluted</u></p> <p style="font: 9pt Courier New, Courier, Monospace; margin: 0">Denominator:</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Weighted average shares <br /> outstanding</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,901</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">383</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,669</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">383</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Stock options</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; text-indent: -9pt; padding-left: 9.65pt">Convertible Class C<br /> Stock</td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">128</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—   </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">128</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—   </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Denominator for<br /> diluted earnings per<br /> share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"></td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6,029</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,797</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Diluted income per<br /> common share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.22</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.06</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.24</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.07</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0; text-align: center"> </p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Recent Accounting Pronouncements </u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">In December 2011, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-12, Deferral of the Effective
Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05.
ASU 2011-12 defers the requirement that companies present reclassification adjustments for each component of Accumulated Other
Comprehensive Income in both net income and Other Comprehensive Income on the face of the financial statements. All other requirements
in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial statements. The guidance provided by this update becomes
effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this standard
has not had a material impact on the Company’s condensed consolidated position and results of operations.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">In July 2012, the FASB issued ASU No.
2012-02, Intangibles-Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies
how entities test indefinite-lived intangible assets for impairment which improve consistency in impairment testing requirements
among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it
is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets
in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended
standards eliminate the requirement to perform quantitative impairment testing as outlined in previously issued standards. The
guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early
adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s condensed
consolidated financial position and results of operations.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">FASB, the Emerging Issues Task Force
and the SEC have issued certain other accounting standards, updates, and regulations as of June 30, 2012 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 2012 or 2011, and it does not believe that any of those pronouncements
will have a significant impact on our consolidated financial statements at the time they become effective.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Reclassifications</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">Certain prior year amounts have been reclassified
to conform to the current year presentation. The reclassifcations did not have any effect on reported consolidated net income
for any periods presented.</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 9pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td> </td>
<td colspan="11" style="text-align: center">Three months ended</td><td> </td>
<td colspan="11" style="text-align: center">Three months ended</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2011</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td> </td>
<td colspan="23" style="text-align: center">(000's omitted, except per share data)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Class C Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Class C Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-decoration: none; text-align: left; padding-left: 5.4pt"><p style="font: 9pt Courier New, Courier, Monospace; margin: 0"><u>Basic</u></p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0">Numerator:</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 40%">Net income available to common
<br />
stockholders</td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,452</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,355</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">25</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,513</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,409</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">27</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5.4pt">Denominator:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Weighted average shares<br /> outstanding</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,901</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,901</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Basic income per common<br /> share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.25</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.06</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.27</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.25</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.07</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: none; text-align: left; padding-left: 0pt"><p style="font: 9pt Courier New, Courier, Monospace; margin: 0"><u>Diluted</u></p> <p style="font: 9pt Courier New, Courier, Monospace; margin: 0">Denominator:</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Weighted average shares <br /> outstanding</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,901</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">383</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,669</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">383</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Stock options</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; text-indent: -9pt; padding-left: 9.65pt">Convertible Class C<br /> Stock</td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">128</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—   </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">128</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—   </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Denominator for<br /> diluted earnings per<br /> share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"></td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6,029</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,797</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Diluted income per<br /> common share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.22</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.06</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.24</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.07</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="margin: 0"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">NOTE 3 – ACCOUNTS RECEIVABLE AND MANAGEMENT AND OTHER FEES
RECEIVABLE</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Accounts Receivable and Management and Other Fees Receivable</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">Receivables, net is comprised of the
following at September 30, 2012:</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center">(000’s Omitted)</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Gross <br />Receivable</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Allowance for <br />doubtful accounts</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Net</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 46%">Receivables from equipment sales and service contracts</td><td style="width: 5%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 11%; border-bottom: Black 2.5pt double; text-align: right">6,763</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 5%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 11%; border-bottom: Black 2.5pt double; text-align: right">1,853</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 5%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 11%; border-bottom: Black 2.5pt double; text-align: right">4,910</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Receivables from equipment sales and service contracts - related party</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">90</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">—  </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">90</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Management and other fees receivables</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">11,915</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,633</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,282</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Management and other fees receivables from related medical practices ("PC’s")</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,112</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">403</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,709</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0">The Company's customers are concentrated in the healthcare
industry.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">The Company's receivables from the
related and non-related professional corporations (PC's) substantially consists 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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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 38% and 55% of the PCs’
net revenues for the three months ended September 30, 2012 and 2011, 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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">Net revenues from management and other
fees charged to the related PCs accounted for approximately 20.7% and 16.4% of the consolidated net revenues for the three months
ended September 30, 2012 and 2011, respectively.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">Tallahassee Magnetic Resonance Imaging,
PA, Stand Up MRI of Boca Raton, PA and Stand Up MRI & Diagnostic Center, PA (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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Gross <br />Receivable</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Allowance for <br />doubtful accounts</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Net</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 46%">Receivables from equipment sales and service contracts</td><td style="width: 5%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 11%; border-bottom: Black 2.5pt double; text-align: right">6,763</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 5%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 11%; border-bottom: Black 2.5pt double; text-align: right">1,853</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 5%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 11%; border-bottom: Black 2.5pt double; text-align: right">4,910</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Receivables from equipment sales and service contracts - related party</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">90</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">—  </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">90</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Management and other fees receivables</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">11,915</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,633</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,282</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Management and other fees receivables from related medical practices ("PC’s")</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,112</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">403</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,709</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
6763000
90000
11915000
2112000
1853000
7633000
403000
4910000
90000
4282000
1709000
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">September 30, <br />2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">June 30, <br />2012</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 56%">Purchased parts, components and supplies</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1,960</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1,673</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Work-in-process</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">557</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">522</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">TOTAL INVENTORIES</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,517</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,195</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
1960000
1673000
557000
522000
<p style="margin: 0">NOTE 4 - INVENTORIES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center">(000's omitted)</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 11pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">September 30, <br />2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">June 30, <br />2012</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 56%">Purchased parts, components and supplies</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1,960</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">1,673</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Work-in-process</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">557</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">522</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">TOTAL INVENTORIES</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,517</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,195</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="margin: 0"></p>
<p style="font: 16pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">NOTE 5 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS
AND CUSTOMER ADVANCES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt">1) Information
relating to uncompleted contracts as of September 30, 2012 is as follows:</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0 0 0 27pt; text-align: justify; text-indent: -27pt"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center">(000's omitted)</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 70%">Costs incurred on uncompleted contracts</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">2,684</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Estimated earnings</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,062</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Subtotal</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,746</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Less: Billings to date</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,587</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Costs and estimated earnings in excess of billings on uncompleted contracts</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,159</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0 0 0 27pt; text-align: justify">Included in the accompanying condensed
consolidated balance sheet at September 30, 2012 under the following captions:</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 70%">Costs and estimated earnings in excess of billings on uncompleted contracts</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,159</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Less: Billings in excess of costs and estimated earnings on uncompleted contracts</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Costs and estimated earnings in excess of billings on uncompleted contracts</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,159</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">2) Customer advances consist of the following as of September
30, 2012:</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left; padding-left: 5.4pt">Total advances</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">7,485</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; text-indent: -0.5in; padding-left: 36.6pt">Less: Advances on contracts under construction</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,587</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Total customer advances</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,898</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 70%">Costs incurred on uncompleted contracts</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">2,684</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Estimated earnings</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">2,062</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Subtotal</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">4,746</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Less: Billings to date</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,587</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Costs and estimated earnings in excess of billings on uncompleted contracts</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,159</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 70%">Costs and estimated earnings in excess of billings on uncompleted contracts</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">1,159</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Less: Billings in excess of costs and estimated earnings on uncompleted contracts</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—  </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Costs and estimated earnings in excess of billings on uncompleted contracts</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">1,159</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 70%; text-align: left; padding-left: 5.4pt">Total advances</td><td style="width: 10%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 18%; text-align: right">7,485</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; text-indent: -0.5in; padding-left: 36.6pt">Less: Advances on contracts under construction</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">3,587</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; padding-left: 5.4pt">Total customer advances</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,898</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
2684000
4746000
3587000
2062000
1159000
1159000
7485000
3587000
3898000
<p style="margin: 0">NOTE 6 – OTHER CURRENT LIABILITIES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0">Other current liabilities in the accompanying condensed
consolidated balance sheet consist of the following:</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center">(000’s omitted)</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2012</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 56%">Accrued salaries, commissions and payroll taxes</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">536</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">570</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Accrued interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">198</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">191</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Litigation accruals</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">493</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">493</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Sales tax payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,908</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,764</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Legal and other professional fees</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">544</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">577</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Accounting fees</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">115</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">345</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Insurance premiums</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">62</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Interest and penalty - sales tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,166</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,116</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Penalty  - 401k plan</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">250</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">250</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Purchase scanners</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">400</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Rent</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">178</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">208</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Other</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">151</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">166</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">TOTAL OTHER CURRENT LIABILITIES</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,001</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,693</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2012</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 56%">Accrued salaries, commissions and payroll taxes</td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">536</td><td style="width: 1%; text-align: left"> </td><td style="width: 8%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 12%; text-align: right">570</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Accrued interest</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">198</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">191</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Litigation accruals</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">493</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">493</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Sales tax payable</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,908</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,764</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Legal and other professional fees</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">544</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">577</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Accounting fees</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">115</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">345</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Insurance premiums</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">62</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">13</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Interest and penalty - sales tax</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,166</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">2,116</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Penalty  - 401k plan</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">250</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">250</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Purchase scanners</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">400</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—  </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Rent</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">178</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">208</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Other</td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">151</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">166</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">TOTAL OTHER CURRENT LIABILITIES</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">8,001</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">7,693</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
536000
570000
493000
493000
2908000
2764000
544000
577000
115000
345000
62000
13000
2166000
2116000
250000
250000
178000
208000
151000
166000
198000
191000
400000
<p style="margin: 0">NOTE 7 - SEGMENT AND RELATED INFORMATION</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">The Company operates in two industry
segments - manufacturing and the servicing of medical equipment and management of diagnostic imaging centers.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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, 2012. All inter-segment sales are market-based. The Company evaluates performance based on income or loss from operations.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0">Summarized financial information concerning the Company's
reportable segments is shown in the following table:</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center">(000's omitted)</p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Medical <br />Equipment</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Management <br />Of <br />Diagnostic <br />Imaging <br />Centers</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Totals</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; padding-left: 5.4pt">For the three months ended Sept. 30, 2012</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 52%; text-align: left; padding-left: 5.4pt">Net revenues from external customers</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">3,777</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">5,734</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">9,511</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Inter-segment net revenues</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Income from operations</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">227</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,649</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,876</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Depreciation and amortization</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">158</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">257</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">415</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Capital expenditures</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">71</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">176</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">247</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; padding-left: 5.4pt">For the three months ended Sept. 30, 2011</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Net revenues from external customers</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4,708</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4,900</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">9,608</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Inter-segment net revenues</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Income from operations</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">751</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,010</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,761</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Depreciation and amortization</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">175</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">350</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">525</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Capital expenditures</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">39</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">116</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">155</td><td style="text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Medical <br />Equipment</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Management <br />Of <br />Diagnostic <br />Imaging <br />Centers</td><td style="padding-bottom: 1pt"> </td>
<td colspan="3" style="text-align: center; border-bottom: Black 1pt solid">Totals</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; padding-left: 5.4pt">For the three months ended Sept. 30, 2012</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="width: 52%; text-align: left; padding-left: 5.4pt">Net revenues from external customers</td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">3,777</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 11%; text-align: right">5,734</td><td style="width: 1%; text-align: left"> </td><td style="width: 3%"> </td>
<td style="width: 1%; text-align: left">$</td><td style="width: 8%; text-align: right">9,511</td><td style="width: 1%; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Inter-segment net revenues</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Income from operations</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">227</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,649</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,876</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Depreciation and amortization</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">158</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">257</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">415</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Capital expenditures</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">71</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">176</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">247</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: underline; padding-left: 5.4pt">For the three months ended Sept. 30, 2011</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Net revenues from external customers</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4,708</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">4,900</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">9,608</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Inter-segment net revenues</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">—  </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">202</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Income from operations</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">751</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,010</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">1,761</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-left: 5.4pt">Depreciation and amortization</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">175</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">350</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">525</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-left: 5.4pt">Capital expenditures</td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">39</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">116</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left">$</td><td style="text-align: right">155</td><td style="text-align: left"> </td></tr>
</table>
202000
202000
202000
202000
0
0
1876000
1761000
227000
751000
1649000
1010000
415000
525000
158000
175000
257000
350000
<p style="margin: 0"></p>
<p style="font: 10pt/normal Courier New, Courier, Monospace; margin: 0">NOTE 10 - INCOME TAXES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">Effective January 1, 2007, the Company
adopted the provisions of ASC topic 740 (formerly FASB Interpretation No. 48/FASB Statement No. 109, “Accounting for Uncertainty
in Income Taxes”). 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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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 2006.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">The adoption of the provisions of ASC
topic 740 did not have a material impact on the Company’s consolidated financial position and results of operations. Upon
the adoption and as of September 30, 2012, no liability for unrecognized tax benefits was required to be recorded. The Company
does not expect its unrecognized tax benefit position to change during the next 12 months.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">The Company recognized a net deferred
tax asset of $461,858 and a deferred tax liability of $461,858 as of September 30, 2012, primarily relating to net operating loss
carryforwards of approximately $154,431,000 available to offset future taxable income through 2029. The net operating losses begin
to expire in 2012 for federal tax purposes and in 2012 for state income tax purposes.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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. The Company considers projected future taxable income and tax planning strategies in making this assessment. At present,
the Company does not have a sufficient history of income or knowledge of future effects on our business of healthcare reform legislation,
the Deficit Reduction Act, the tax on sales of medical equipment and the general economic and business climate to conclude that
it is more-likely-than-not that the Company will be able to realize all of its tax benefits in the near future and therefore a
valuation allowance was established for the full value of the deferred tax asset.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: center"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">A valuation allowance will be maintained
until sufficient positive evidence exists to support the reversal of any portion or all of the valuation. Should the Company become
profitable in future periods with supportable trends, the valuation allowance will be reversed accordingly.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="margin: 0"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">NOTE 11 – SUBSEQUENT EVENTS</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">During the period from October 1, 2012 through October 31, 2012,
the Company issued 30,000 shares of common stock to consultants as compensation valued at $146,700 under the 2010 Stock Bonus
Plan.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify"> </p>
461858
461858
154431000
146700
-675000
-675000
-69000
-71000
-166882000
-168334000
-19000
-20000
33000
64000
147000
0
2591000
2166000
250000
247000
155000
71000
39000
176000
116000
5901
5669
5901
5669
383
383
0
0
0
0
128
128
0
0
1355000
1409000
1452000
1513000
1355000
1409000
25000
27000
6028766
5796266
6029
5797
383
383
0.22
0.24
0.06
0.07
0.23
0.25
0.23
0.25
0.06
0.07
.22
.24
Adding XBRL files
<p style="margin: 0"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0">NOTE 8 – SUPPLEMENTAL CASH FLOW INFORMATION</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">During the three months ended September 30,
2012 and September 30, 2011, the Company paid $33,000 and $64,000 for interest, respectively.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">During the three months ended September
30, 2012 and September 30, 2011, the Company paid $147,000 and $0 for income taxes, respectively.</p>
<p style="margin: 0">NOTE 9 – COMMITMENTS AND CONTINGENCIES</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Litigation</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">There were no material changes in litigation
from that reported in our Form 10-K for the fiscal year ended June 30, 2012.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Other Matters</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">The Company is also delinquent in filing
sales tax returns for certain states, for which the Company has transacted business. As of September 30, 2012, the Company has
recorded tax obligations of approximately $2,591,000 plus interest and penalties of approximately $2,166,000. The Company is in
the process of determining the regulatory requirements in order to become compliant.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">The Company has determined they may not
be in compliance with the Department of Labor and Internal Revenue Service regulations concerning the requirements to file Form
5500 to report activity of its 401(k) Employee Benefit Plan. The filings do not require the Company to pay tax, however they may
be subject to penalty for non-compliance. The Company has recorded provisions for any potential penalties totaling $250,000. The
amount was the Company’s best estimate of potential penalties. Management is unable to determine the outcome of this uncertainty.
The Company has engaged outside counsel to handle such matters to determine the necessary requirements to ensure compliance. On
August 31, 2011, the Company submitted with the Internal Revenue Service a request for a compliance statement and a determination
letter for our 401K plan. On December 9, 2011, the Internal Revenue Service issued a favorable determination letter on our 401K
plan. The Company is still working with outside counsel to complete and file forms with the US Department of Labor.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Principles of Consolidation</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Income Per Share</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">Basic income per share (“EPS”)
is computed based on weighted average shares outstanding and excludes any potential dilution. 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,
2012 and 2011.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">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, 2012 and 2011, the number of common shares potentially
issuable upon the exercise of certain options of 13,000 and 20,000; respectively, have not been included in the computation of
diluted EPS since the effect would be antidilutive.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify"></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify"> </p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 9pt Courier New, Courier, Monospace">
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td> </td>
<td colspan="11" style="text-align: center">Three months ended</td><td> </td>
<td colspan="11" style="text-align: center">Three months ended</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2012</td><td style="padding-bottom: 1pt"> </td>
<td colspan="11" style="text-align: center; border-bottom: Black 1pt solid">September 30, 2011</td></tr>
<tr style="vertical-align: bottom">
<td style="text-align: center"> </td><td> </td>
<td colspan="23" style="text-align: center">(000's omitted, except per share data)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 1pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Class C Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Total</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td>
<td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom"> </td><td style="border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">Class C Common Stock</td><td style="padding-bottom: 1pt; text-align: center; vertical-align: bottom"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-decoration: none; text-align: left; padding-left: 5.4pt"><p style="font: 9pt Courier New, Courier, Monospace; margin: 0"><u>Basic</u></p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0"></p>
<p style="font: 9pt Courier New, Courier, Monospace; margin: 0">Numerator:</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt; width: 40%">Net income available to common
<br />
stockholders</td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,452</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,355</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">25</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,513</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">1,409</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td><td style="width: 2%; padding-bottom: 2.5pt"> </td>
<td style="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</td><td style="width: 6%; border-bottom: Black 2.5pt double; text-align: right">27</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5.4pt">Denominator:</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Weighted average shares<br /> outstanding</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,901</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,901</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,669</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Basic income per common<br /> share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.25</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.23</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.06</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.27</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.25</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.07</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-decoration: none; text-align: left; padding-left: 0pt"><p style="font: 9pt Courier New, Courier, Monospace; margin: 0"><u>Diluted</u></p> <p style="font: 9pt Courier New, Courier, Monospace; margin: 0">Denominator:</p></td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Weighted average shares <br /> outstanding</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,901</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">383</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">5,669</td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">383</td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Stock options</td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td><td> </td>
<td style="text-align: left"> </td><td style="text-align: right">—   </td><td style="text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left; padding-bottom: 1pt; text-indent: -9pt; padding-left: 9.65pt">Convertible Class C<br /> Stock</td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">128</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—   </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">128</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">—   </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="text-align: left; padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Total Denominator for<br /> diluted earnings per<br /> share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"></td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">6,029</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">5,797</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">383</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt; text-indent: -9.65pt; padding-left: 9.65pt">Diluted income per<br /> common share</td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.22</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.06</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="text-align: left"> </td><td style="text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.24</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.07</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr>
</table>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Recent Accounting Pronouncements </u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">In December 2011, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-12, Deferral of the Effective
Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05.
ASU 2011-12 defers the requirement that companies present reclassification adjustments for each component of Accumulated Other
Comprehensive Income in both net income and Other Comprehensive Income on the face of the financial statements. All other requirements
in ASU No. 2011-05 are not affected by ASU No. 2011-12, including the requirement to report comprehensive income either in a single
continuous financial statement or in two separate but consecutive financial statements. The guidance provided by this update becomes
effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this standard
has not had a material impact on the Company’s condensed consolidated position and results of operations.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">In July 2012, the FASB issued ASU No.
2012-02, Intangibles-Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies
how entities test indefinite-lived intangible assets for impairment which improve consistency in impairment testing requirements
among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it
is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets
in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended
standards eliminate the requirement to perform quantitative impairment testing as outlined in previously issued standards. The
guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early
adoption is permitted. The adoption of this standard is not expected to have a material impact on the Company’s condensed
consolidated financial position and results of operations.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 6pt 0 0; text-align: justify">FASB, the Emerging Issues Task Force
and the SEC have issued certain other accounting standards, updates, and regulations as of June 30, 2012 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 2012 or 2011, and it does not believe that any of those pronouncements
will have a significant impact on our consolidated financial statements at the time they become effective.</p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0"><u>Reclassifications</u></p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Courier New, Courier, Monospace; margin: 0; text-align: justify">Certain prior year amounts have been reclassified
to conform to the current year presentation. The reclassifcations did not have any effect on reported consolidated net income for
any periods presented.</p>