FONAR NEWS-022211

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED) ------
ASSETS	December 31, 2010 (UNAUDITED) ------------	June 30, 2010 ------------
Current Assets:
Cash and cash equivalents	$ 1,961	$ 1,299
Marketable securities	33	28
Accounts receivable - net	5,390	4,821
Accounts receivable - related parties - net	118	-
Medical receivables – net	4	25
Management fee receivable – net	2,428	2,569
Management fee receivable - related medical practices - net	1,751	1,922
Costs and estimated earnings in excess of billings on uncompleted contracts	273	277
Inventories	2,757	2,826
Advances and notes to related medical practices - net	-	83
Current portion of notes receivable	190	272
Prepaid expenses and other current assets	294 -------	553 -------
Total Current Assets	15,199 -------	14,675 -------
Property and equipment - net	3,827	2,109
Notes receivable - net	238	-
Other intangible assets - net	4,137	4,291
Other assets	673 ----------------	554 ----------------
Total Assets	$ 24,074 ===========	$ 21,629 ===========

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED)
LIABILITIES AND STOCKHOLDERS' DEFICIENCY	December 31, 2010 (UNAUDITED) ------------	June 30, 2010 ------------
Current Liabilities:
Current portion of long-term debt and capital leases	$ 2,231	$ 579
Current portion of long-term debt – related party	-	88
Accounts payable	2,425	3,192
Other current liabilities	8,683	8,065
Unearned revenue on service contracts	5,834	5,220
Unearned revenue on service contracts - related parties	110	-
Customer advances	4,450	4,813
Billings in excess of costs and estimated earnings on uncompleted contracts	1,132 -------	2,743 -------
Total Current Liabilities	24,865	24,700
Long-Term Liabilities:
Accounts payable	135	63
Due to related medical practices	231	528
Long-term debt and capital leases, less current portion	1,906	1,567
Long-term debt, less current portion - related party	-	72
Other liabilities	494 ----------------	475 ----------------
Total Long-Term Liabilities	2,766 ----------------	2,705 ----------------
Total Liabilities	27,631 ----------------	27,405 ----------------

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED, except share data)
LIABILITIES AND STOCKHOLDERS' DEFICIENCY (continued)	December 31, 2010 (UNAUDITED) ------------	June 30, 2010 ------------
Class A non-voting preferred stock $.0001 par value; 453,000 and 1,600,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; 313,451 issued and outstanding at December 31, 2010 and June 30, 2010	-	-
Preferred stock $.001 par value; 567,000 and 2,000,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; issued and outstanding - none	-	-
Common Stock $.0001 par value; 8,500,000 and 30,000,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; 5,241,358 and 4,985,850 issued at December 31, 2010 and June 30, 2010, respectively; 5,229,715 and 4,974,207 outstanding at December 31, 2010 and June 30, 2010, respectively	1	1
Class B Common Stock $ .0001 par value; 227,000 and 800,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; (10 votes per share), 158 issued and outstanding at December 31, 2010 and June 30, 2010	-	-
Class C Common Stock $.0001 par value; 567,000 and 2,000,000 shares authorized at December 31, 2010 and June 30, 2010, respectively; (25 votes per share), 382,513 issued and outstanding at December 31, 2010 and June 30, 2010	-	-
Paid-in capital in excess of par value	172,773	172,379
Accumulated other comprehensive loss	( 14)	( 19)
Accumulated deficit	(175,523)	(177,271)
Notes receivable from employee stockholders	( 119)	( 191)
Treasury stock, at cost - 11,643 shares of common stock at December 31, 2010 and June 30, 2010	(675 ) ----------------	( 675) ----------------
Total Stockholders' Deficiency	(3,557) ----------------	( 5,776) ----------------
Total Liabilities and Stockholders' Deficiency	$ 24,074 ===========	$ 21,629 ===========

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data)
	FOR THE THREE MONTHS ENDED DECEMBER 31, ---------------------------
	2010 ----------------	2009 ----------------
REVENUES Product sales - net	$ 1,789	$ 2,961
Service and repair fees - net	2,653	2,629
Service and repair fees - related parties - net	55	55
Management and other fees - net	2,380	1,738
Management and other fees - related medical practices - net	1,142	830
Total Revenues - Net	8,019 ----------------	8,213 ----------------
COSTS AND EXPENSES Costs related to product sales	1,368	2,279
Costs related to service and repair fees	700	978
Costs related to service and repair fees - related parties	15	20
Costs related to management and other fees	1,707	1,384
Costs related to management and other fees - related medical practices	633	745
Research and development	153	777
Selling, general and administrative	1,745	3,100
Provision for bad debts	255 ----------------	197 ----------------
Total Costs and Expenses	6,576 ----------------	9,480 ----------------
Income (Loss) from Operations	1,443	(1,267)
Interest Expense	(137)	(90)
Interest Expense – Related Parties	-	(5)
Investment Income	58	66
Interest Income - Related Party	-	3
Other (Expense) Income	(1)	1
NET INCOME (LOSS)	$ 1,363 ===========	$ ( 1,292) ===========
Net Income Available to Class C Common Stockholders	$ 25 ===========	N/A ===========
Net Income (Loss) Available to Common Stockholders	$ 1,261 ===========	$ (1,292) ===========
Basic Net Income (Loss) Per Common Share	$ 0.25 ===========	$ (0.26) ===========
Diluted Net Income (Loss) Per Common Share	$ 0.24 ===========	$ (0.26) ===========
Basic and Diluted Income Per Share-Common C	$ 0.06 ===========	N/A ===========
Weighted Average Basis Shares Outstanding	5,149,499 ===========	4,916,275 ===========
Weighted Average Diluted Shares Outstanding	5,277,003 ===========	4,916,275 ===========

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data)
	FOR THE SIX MONTHS ENDED DECEMBER 31, ---------------------------
	2010 ----------------	2009 ----------------
REVENUES Product sales - net	$ 4,448	$ 4,524
Service and repair fees - net	5,342	5,386
Service and repair fees - related parties - net	110	110
Management and other fees - net	4,469	3,473
Management and other fees - related medical practices - net	2,335	1,625
Total Revenues - Net	16,704 ----------------	15,703 ----------------
COSTS AND EXPENSES Costs related to product sales	3,873	3,936
Costs related to service and repair fees	1,366	1,919
Costs related to service and repair fees - related parties	28	39
Costs related to management and other fees	3,021	2,651
Costs related to management and other fees - related medical practices	1,372	1,505
Research and development	607	1,631
Selling, general and administrative	4,128	6,333
Provision for bad debts	431 ----------------	377 ----------------
Total Costs and Expenses	14,826 ----------------	18,391 ----------------
Income (Loss) from Operations	1,878	( 2,688)
Interest Expense	( 231)	( 169)
Interest Expense – Related Parties	( 4)	( 19)
Investment Income	96	153
Interest Income - Related Party	1	6
Other (Expense) Income	8	34
Loss on Note Receivable	-	( 350)
NET INCOME (LOSS)	$ 1,748 ===========	$ ( 3,033) ===========
Net Income Available to Class C Common Stockholders	$ 32 ===========	N/A ===========
Net Income (Loss) Available to Common Stockholders	1,618 ===========	$ ( 3,033) ===========
Basic Net Income (Loss) Per Common Share	$ 0.32 ===========	$ (0.62) ===========
Diluted Net Income (Loss) Per Common Share	$ 0.31 ===========	$ (0.62) ===========
Basic and Diluted Income Per Share-Common C	$ 0.08 ===========	N/A ===========
Weighted Average Basis Shares Outstanding	5,080,872 ===========	4,912,108 ===========
Weighted Average Diluted Shares Outstanding	5,208,376 ===========	4,912,108 ===========

For investor and other information visit: www.fonar.com.

UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, pMRI™, Dynamic™, Multi-Position™, True Flow™, The Proof is in the Picture™, Spondylography™ Spondylometry™ and Upright Radiology™ are trademarks of FONAR Corporation.

This release may include forward-looking statements from the company that may or may not materialize. Additional information on factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.

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