FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐

For the quarterly period ended DECEMBER 31, 2024

Commission file number 0-10248

FONAR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		11-2464137
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

110 Marcus Drive Melville, New York		11747
Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (631) 694-2929

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was required to submit such files Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of accelerated filer, large accelerated filer, smaller reporting company and emerging growth company in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐, Smaller reporting company ☒ Emerging growth company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol		Name of each exchange on which registered
Common Stock, $.0001 par value		FONR		NASDAQ Capital Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the close of the latest practicable date.

Class	Outstanding at February 3, 2025
Common Stock, par value $.0001		6,203,465
Class B Common Stock, par value $.0001		146
Class C Common Stock, par value $.0001		382,513
Class A Preferred Stock, par value $.0001		313,438

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FONAR CORPORATION AND SUBSIDIARIES

INDEX

PART I - FINANCIAL INFORMATION		PAGE
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets – as of December 31, 2024 and June 30, 2024		4
Condensed Consolidated Statements of Operations for the Three Months Ended December 31, 2024 and December 31, 2023		7
Condensed Consolidated Statements of Operations for the Six Months Ended December 31, 2024 and December 31, 2023		8
Condensed Consolidated Statements of Changes in Equity for the Three Months Ended December 31, 2024 and December 31, 2023		9
Condensed Consolidated Statements of Changes in Equity for the Six Months Ended December 31, 2024 and December 31, 2023		11
Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2024 and December 31, 2023		13
Notes to Condensed Consolidated Financial Statements		14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		31
Item 3. Quantitative and Qualitative Disclosures About Market Risk		37
Item 4. Controls and Procedures		38
PART II - OTHER INFORMATION		38
Item 1. Legal Proceedings		38
Item 1A. Risk Factors		38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		40
Item 3. Defaults Upon Senior Securities		41
Item 4. Mine Safety Disclosures		41
Item 5. Other Information		41
Item 6. Exhibits		41
Signatures		42

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FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts and shares in thousands, except per share amounts)

ASSETS


	December 31, 2024 (Unaudited)		June 30, 2024 (Note 1)
Current Assets:
Cash and cash equivalents	$	53,583	$	56,341
Short-term investments		121		136
Accounts receivable – net of allowance for credit losses of $273 and $166 at December 31, 2024 and June 30, 2024, respectively		3,390		4,035
Accounts receivable _ related party		60		—
Medical receivable – net		23,496		23,992
Management and other fees receivable – net of allowance for credit losses of $12,663 and $12,370 at December 31, 2024 and June 30, 2024, respectively		42,485		41,954
Management and other fees receivable – related medical practices – net of allowance for credit losses of $6,989 and $6,110 at December 31, 2024 and June 30, 2024, respectively		9,677		9,865
Inventories		2,858		2,715
Prepaid expenses and other current assets		1,962		1,286
Total Current Assets		137,632		140,324

Accounts receivable – long term		724		830
Deferred income tax asset		6,113		7,223
Property and equipment – net		19,270		18,709
Note receivable – related party		607		581
Right-of-use-asset – operating leases		34,946		38,428
Right-of-use-asset – financing lease		496		531
Goodwill		4,269		4,269
Other intangible assets – net		3,407		2,870
Other assets		493		481
Total Assets	$	207,957	$	214,246

See accompanying notes to the unaudited condensed consolidated financial statements.

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FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Amounts and shares in thousands, except per share amounts)

LIABILITIES AND EQUITY

	December 31, 2024 (Unaudited)		June 30, 2024 (Note 1)
Current Liabilities:
Current portion of long-term debt	$	49	$	47
Accounts payable		953		1,856
Other current liabilities		3,912		7,941
Unearned revenue on service contracts		3,413		3,870
Unearned revenue on service contracts – related party		55		—
Operating lease liabilities _ current portion		3,259		3,474
Financing lease liability _ current portion		244		226
Customer deposits		357		443
Total Current Liabilities		12,242		17,857

Long-Term Liabilities:
Unearned revenue on service contracts		1,050		1,175
Deferred income tax liability		371		371
Due to related party medical practices		93		93
Operating lease liabilities – net of current portion		34,927		37,468
Financing lease liability – net of current portion		290		395
Long-term debt, less current portion		7		67
Other liabilities		26		32

Total Long-Term Liabilities		36,764		39,601
Total Liabilities		49,006		57,458

See accompanying notes to the unaudited condensed consolidated financial statements.

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FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Amounts and shares in thousands, except per share amounts)

LIABILITIES AND EQUITY (Continued)

EQUITY:	December 31, 2024 (Unaudited)			June 30, 2024 (Note 1)
Class A non-voting preferred stock $.0001 par value; 453 shares authorized at December 31, 2024 and June 30, 2024, 313 issued and outstanding at December 31, 2024 and June 30, 2024	$	—		$	—
Preferred stock $.001 par value; 567 shares authorized at December 31, 2024 and June 30, 2024, issued and outstanding – none		—			—
Common Stock $.0001 par value; 8,500 shares authorized at December 31, 2024 and June 30, 2024, 6,207 and 6,373 issued at December 31, 2024 and June 30, 2024, respectively, 6,203 and 6,328 outstanding at December 31, 2024 and June 30, 2024, respectively		1			1
Class B Common Stock (10 votes per share) $.0001 par value; 227 shares authorized at December 31, 2024 and June 30, 2024, 0.146 issued and outstanding at December 31, 2024 and June 30, 2024		—			—
Class C Common Stock (25 votes per share) $.0001 par value; 567 shares authorized at December 31, 2024 and June 30, 2024, 383 issued and outstanding at December 31, 2024 and June 30, 2024		—			—
Paid-in capital in excess of par value		178,758			180,608
Accumulated deficit		(8,525	)		(13,624	)
Treasury stock, at cost – 4 shares of common stock at December 31, 2024 and 45 shares of common stock at June 30, 2024		(395	)		(1,017	)
Total FONAR Corporation’s Stockholders’ Equity		169,839			165,968
Noncontrolling interests		(10,888	)		(9,180	)
Total Equity		158,951			156,788
Total Liabilities and Equity	$	207,957		$	214,246

See accompanying notes to the unaudited condensed consolidated financial statements.

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FONAR CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts and shares in thousands, except per share amounts)


	FOR THE THREE MONTHS ENDED DECEMBER 31, (Unaudited)
REVENUES	2024		2023
Patient fee revenue – net of contractual allowances and discounts	$	7,944	$	8,221
Product sales		25		55
Service and repair fees		1,759		1,778
Service and repair fees _ related parties		45		28
Management and other fees		12,189		12,316
Management and other fees _ related medical practices		2,988		2,988
Total Revenues – Net		24,950		25,386
COSTS AND EXPENSES

SEC Form 10-Q filed by Fonar Corporation