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Fonar Press Releases

For Immediate Release

The Inventor of MR Scanning™

An ISO 9001 Company

Contact: Daniel Culver

110 Marcus Drive

Director of Communications

Melville, NY 11747-4292

Web site: www.fonar.com

Phone: (631) 694-2929

Email: investor @ fonar. com

Fax: (631) 390-1709

FONAR Set to Join Russell 3000 Index

MELVILLE, NEW YORK, June 23, 2017 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, reported today that it is set to join the broad-market Russell 3000® Index at the conclusion of the Russell indexes annual reconstitution, effective after the US market opens on June 26, according to a preliminary list of additions posted June 9 and today, June 23.

The annual Russell indexes reconstitution captures the 4,000 largest US stocks as of the end of May, ranking them by total market capitalization. Membership in the US all-cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the large-cap Russell 1000® Index or small-cap Russell 2000® Index as well as in appropriate growth and value style indexes. FTSE (Financial Times and Stock Exchange) Russell determines membership for its Russell indexes primarily by objective, market-capitalization rankings and style attributes.

Raymond Damadian, founder and Chairman of FONAR said, “I am proud of this remarkable milestone for our Company. It is based on our Company’s share price and is an indication that we have been delivering shareholder value. It is a result of the successful strategy we have put in place in recent years that has allowed the Company to be profitable for 28 consecutive quarters.”

Timothy R. Damadian, President and CEO of FONAR said, “FONAR’s inclusion in the Russell 3000 is important because it gives institutions, mutual funds and the investing community greater visibility of our Company. They’re all looking for successful value stocks, and we’ve shown that FONAR can deliver.”

Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. Approximately $8.4 trillion in assets are benchmarked against Russell’s US indexes. Russell indexes are part of FTSE Russell, a leading global index provider. For more information on the Russell 3000® Index and the Russell indexes reconstitution, go to the “Russell Reconstitution” section on the FTSE Russell website.

About FTSE Russell:

FTSE Russell is a leading global index provider creating and managing a wide range of indexes, data and analytic solutions to meet client needs across asset classes, style and strategies. Covering 98% of the investable market, FTSE Russell indexes offer a true picture of global markets, combined with the specialist knowledge gained from developing local benchmarks around the world.

FTSE Russell index expertise and products are used extensively by institutional and retail investors globally. Approximately $12.5 trillion is currently benchmarked to FTSE Russell indexes. For over 30 years, leading asset owners, asset managers, ETF providers and investment banks have chosen FTSE Russell indexes to benchmark their investment performance and create investment funds, ETFs, structured products and index-based derivatives. FTSE Russell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.

A core set of universal principles guides FTSE Russell index design and management: a transparent rules-based methodology is informed by independent committees of leading market participants. FTSE Russell is focused on index innovation and customer partnership applying the highest industry standards and embracing the IOSCO Principles. FTSE Russell is wholly owned by London Stock Exchange Group.

For more information, visit www.ftserussell.com

About FONAR

FONAR, The Inventor of MR Scanning™, is located in Melville, NY, was incorporated in 1978, and is the first, oldest and most experienced MRI company in the industry. FONAR introduced the world’s first commercial MRI in 1980, and went public in 1981. FONAR’s signature product is the FONAR UPRIGHT® Multi-Position™ MRI (also known as the Stand-Up® MRI), the only whole-body MRI that performs Position™ Imaging (pMRI™) and scans patients in numerous weight-bearing positions, i.e. standing, sitting, in flexion and extension, as well as the conventional lie-down position. The FONAR UPRIGHT® MRI often detects patient problems that other MRI scanners cannot because they are lie-down and ”weightless” only scanners. The patient-friendly UPRIGHT® MRI has a near-zero patient claustrophobic rejection rate. As a FONAR customer states, “If the patient is claustrophobic in this scanner, they’ll be claustrophobic in my parking lot.” Approximately 85% of patients are scanned sitting while watching TV.

FONAR has new works-in-progress technology for visualizing and quantifying the flow of cerebrospinal fluid (CSF) which circulates throughout the brain and vertebral column at the rate of 32 quarts per day. This imaging and quantifying of the dynamics of this vital life-sustaining physiology of the body’s neurologic system has been made possible first by FONAR’s introduction of the MRI and now by this latest works-in-progress method for quantifying CSF flow in all the normal positions of the body, particularly in its upright flow against gravity. Patients with whiplash or other neck injuries are among those who will benefit from this new understanding.

FONAR’s substantial list of patents includes recent patents for its technology enabling full weight-bearing MRI imaging of all the gravity sensitive regions of the human anatomy, especially the brain, extremities and spine. FONAR’s UPRIGHT® Multi-Position™ MRI is the only scanner licensed under these patents.

UPRIGHT® and STAND-UP® are registered trademarks and The Inventor of MR Scanning™, Full Range of Motion™, Multi-Position™, Upright Radiology™, The Proof is in the Picture™, True Flow™, pMRI™, Spondylography™, Dynamic™, Spondylometry™, CSP™, and Landscape™, 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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FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

ASSETS

 
December 31,
2016
June 30,
2016
Cash and cash equivalents      
$ 7,692
$ 8,528
Accounts receivable – net
4,325
4,370
Accounts receivable - related party
60
Medical receivable – net
10,824
10,127
Management and other fees receivable - net
17,420
15,638
Management and other fees receivable – related medical practices – net
4,464
4,064
Inventories
2,735
2,074
Prepaid expenses and other current assets
926
759
Total Current Assets

48,446

45,560

Deferred income tax asset
13,842
13,042
Property and equipment – net
14,914
14,513
Goodwill
3,322
3,322
Other intangible assets – net
7,202
7,719
Other assets
560
732
Total Assets
$ 88,286
================
$ 84,888
================

 

FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS’ EQUITY

 
December 31,
2016
June 30,
2016
Current Liabilities:
Current portion of long-term debt and capital leases
$ 1,674
$ 2,448
Accounts payable
1,470
1,254
Other current liabilities
8,109
10,827
Unearned revenue on service contracts
4,752
4,679
Unearned revenue on service contracts – related party
55
Customer advances
1,036
1,199
Billings in excess of costs and estimated earnings on uncompleted contracts
176
207
Total Current Liabilities
17,272
20,614
Long-Term Liabilities:
Deferred income tax liability
482
482
Due to related medical practices
228
245
Long-term debt and capital leases, less current portion
411
2,059
Other liabilities
883
712
Total Long-Term Liabilities
2,004
3,498
Total Liabilities
19,276
24,112

 

FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

LIABILITIES AND STOCKHOLDERS’ EQUITY (Continued)

Stockholders' Equity:
December 31,
2016
June 30,
2016 *
 
   
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2016 and June 30, 2016, 313 issued and outstanding at December 31, 2016 and June 30, 2016
$ —
$ —
Preferred stock $.001 par value; 567 shares authorized at December 31, 2016 and June 30, 2016, issued and outstanding – none
Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2016 and June 30, 2016, 6,171 and 6,062 issued at December 31, 2016 and June 30, 2016; 6,159 and 6,051 outstanding at December 31, 2016 and June 30, 2016
1
1
Class B Common Stock (10 votes per share) $ .0001 par value; 227 shares authorized at December 31, 2016 and June 30, 2016, .146 issued and outstanding at December 31, 2016 and June 30, 2016
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2016 and June 30, 2016, 383 issued and outstanding at December 31, 2016 and June 30, 2016




Paid-in capital in excess of par value
175,970
173,702
Accumulated deficit
(112,812)
(120,624)
Notes receivable from employee stockholders
(22)
(24)
Treasury stock, at cost - 12 shares of common stock at December 31, 2016 and June 30, 2016
(675)
(675)
Total Fonar Corporation Stockholder Equity
62,464
52,380
Noncontrolling interests
6,546
8,396
Total Stockholders' Equity
69,010
60,776

Total Liabilities and Stockholders' Equity

$ 88,286
================
$ 84,888
================

FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

 
FOR THE THREE MONTHS ENDED DECEMBER 31,
REVENUES
2016
2015
Product sales – net
$ 93
$ 742
Service and repair fees – net
2,356
2,280
Service and repair fees - related parties – net
28
28
Patient fee revenue, net of contractual allowances and discounts
8,657
7,786
Provision for bad debts for patient fee
(4,002)
(3,270)
Management and other fees – net
9,364
8,958
Management and other fees - related medical practices – net
1,907
1,845
Total Revenues - Net
18,403
18,369
COSTS AND EXPENSES
Costs related to product sales
(34)
564
Costs related to service and repair fees
683
447
Costs related to service and repair fees - related parties
8
5
Costs related to patient fee revenue
2,323
2,238
Costs related to management and other fees
5,257
5,597
Costs related to management and other fees – related medical practices
1,127
1,012
Research and development
361
412
Selling, general and administrative
4,069
3,869
Total Costs and Expenses
13,794
14,144
Income From Operations
4,609
4,225
Interest Expense
(77)
(139)
Investment Income
49
58
Income Before Benefit/(Provision) for Income Taxes and Non Controlling Interests
4,581
4,144
Benefit/(Provision) for Income Taxes
353
( 40)
Net Income
4,934
4,104
Net Income - Non Controlling Interests
(692)
(611)
Net Income - Controlling Interests
$ 4,242
===============
$ 3,493
===============
Net Income Available to Common Stockholders
$ 3,971
===============
$ 3,266
===============
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 202
===============
$ 169
================
Net Income Available to Class C Common Stockholders
$ 69
===============
$ 58
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 0.64
===============
$ 0.54
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 0.63
===============
$ 0.53
================
Basic and Diluted Income Per Share – Class C Common
$ 0.18
===============
$ 0.15
================
Weighted Average Basis Shares Outstanding-Common Stockholders
6,158
===============
6,051
================
Weighted Average Diluted Shares Outstanding-Common Stockholders
6,286
===============
6,179
================
Weighted Average Basic Shares Outstanding – Class C Common
383
===============
383
================
Weighted Average Diluted Shares Outstanding – Class C Common
383
===============
383
================

 

FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Amounts and shares in thousands, except per share amounts)
(UNAUDITED)

 
FOR THE SIX MONTHS ENDED DECEMBER 31,
REVENUES
2016
2015
Product sales – net
$ 335
$ 760
Service and repair fees – net
4,708
4,564
Service and repair fees - related parties – net
55
55
Patient fee revenue, net of contractual allowances and discounts
17,481
15,901
Provision for bad debts for patient fee
(7,880)
(6,778)
Management and other fees – net
18,625
17,786
Management and other fees - related medical practices – net
3,814
3,691
Total Revenues - Net
37,138
35,979
COSTS AND EXPENSES
Costs related to product sales
179
676
Costs related to service and repair fees
1,339
990
Costs related to service and repair fees - related parties
16
12
Costs related to patient fee revenue
4,737
4,466
Costs related to management and other fees
10,518
11,015
Costs related to management and other fees – related medical practices
2,080
2,070
Research and development
773
849
Selling, general and administrative
8,135
8,061
Total Costs and Expenses
27,777
28,139
Income From Operations
9,361
7,840
Interest Expense
(174)
(289)
Investment Income
97
107
Other (Expense) Income
(3)
1
Income Before Benefit/(Provision) for Income Taxes and Non Controlling Interests
9, 281
7,659
Benefit/(Provision) for Income Taxes
153
( 90)
Net Income
9,434
7,569
Net Income - Non Controlling Interests
(1,622)
(1,214)
Net Income - Controlling Interests
$ 7,812
===============
$ 6,355
===============
Net Income Available to Common Stockholders
$ 7,313
===============
$ 5,942
===============
Net Income Available to Class A Non-Voting Preferred Stockholders
$ 372
===============
$ 308
================
Net Income Available to Class C Common Stockholders
$ 127
===============
$ 105
================
Basic Net Income Per Common Share Available to Common Stockholders
$ 1.19
===============
$ 0.98
================
Diluted Net Income Per Common Share Available to Common Stockholders
$ 1.17
===============
$ 0.96
================
Basic and Diluted Income Per Share – Class C Common
$ 0.33
===============
$ 0.27
================
Weighted Average Basis Shares Outstanding-Common Stockholders
6,131
===============
6,051
================
Weighted Average Diluted Shares Outstanding-Common Stockholders
6,259
===============
6,179
================
Weighted Average Basic Shares Outstanding – Class C Common
383
===============
383
================
Weighted Average Diluted Shares Outstanding – Class C Common
383
===============
383
================

 

FONAR™ Corporation
110 Marcus Drive
Melville, N.Y. 11747
Tel. 631-694-2929
Fax. 631-390-9540
Email sales@FONAR.com
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