FONAR NEWS-051710

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED)
ASSETS	March 31, 2010 (UNAUDITED)	June 30, 2009
Current Assets:
Cash and cash equivalents	570	$ 1,226
Marketable securities	32	23
Accounts receivable - net	5,731	5,392
Accounts receivable - related parties - net	59	-
Medical receivables - net	127	374
Management fee receivable - net	2,952	3,274
Management fee receivable - related medical practices - net	1,814	2,196
Costs and estimated earnings in excess of billings on uncompleted contracts	1,012	1,476
Inventories	2,931	3,172
Current portion of advances and notes to related medical practices	130	165
Current portion of notes receivable	86	518
Prepaid expenses and other current assets	266 ----------------	472 ----------------
Total Current Assets	15,710	18,288
	----------------	----------------
Property and equipment - net	2,299	2,892
Advances and notes to related medical practices - net	-	89
Notes receivable - net	119	1,779
Other intangible assets - net	4,707	4,920
Other assets	392	391
	----------------	----------------
Total Assets	$ 23,227	$ 28,359
	===========	===========

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (000's OMITTED)
LIABILITIES AND STOCKHOLDERS' DEFICIENCY	March 31, 2010 (UNAUDITED)	June 30, 2009
Current Liabilities:
Current portion of long-term debt and capital leases	418	$ 277
Current portion of long-term debt-related party	86	80
Accounts payable	3,340	3,519
Other current liabilities	7,695	8,460
Unearned revenue on service contracts	5,761	5,526
Unearned revenue on service contracts - related parties	55	-
Customer advances	6,089	9,238
Billings in excess of costs and estimated earnings on uncompleted contracts	3,047	2,026
	----------------	----------------
Total Current Liabilities	26,491	29,126

Long-Term Liabilities: Accounts payable	124	184
Due to related medical practices	632	643
Long-term debt and capital leases, less current portion	1,219	759
Long-term debt less current portion-related party	95	160
Other liabilities	467 ----------------	428 ----------------
Total Long-Term Liabilities	2,537 ----------------	2,174 ----------------
Total Liabilities	29,028	31,300
	----------------	----------------

STOCKHOLDERS' DEFICIENCY: Class A non-voting preferred stock $.0001 par value; 1,600,000 authorized, 313,451 issued and outstanding at March 31, 2010 and June 30, 2009	-	-
Preferred stock $.001 par value; 2,000,000 shares authorized, issued and outstanding - none	-	-
Common Stock $.0001 par value; 30,000,000 shares authorized, 4,985,850 and 4,917,918 issued at March 31, 2010 and June 30, 2009, respectively; 4,974,207 and 4,906,275 outstanding at March 31, 2010 and June 30, 2009, respectively	1	1
Class B Common Stock $ .0001 par value; 800,000 shares authorized, (10 votes per share), 158 issued and outstanding at March 31, 2009 and June 30, 2009	-	-
Class C Common Stock $.0001 par value; 2,000,000 shares authorized, (25 votes per share), 382,513 issued and outstanding at March 31, 2009 and June 30, 2009	-	-
Paid-in capital in excess of par value	172,379	172,280
Accumulated other comprehensive loss	( 13)	(21)
Accumulated deficit	(177,300)	(174,259)
Notes receivable from employee stockholders	( 193)	(267)
Treasury stock, at cost - 11,643 shares of common stock at March 31, 2009 and June 30, 2009	(675)	(675)
	----------------	----------------
Total Stockholders' Deficiency	(5,801)	(2,941)
	----------------	----------------
Total Liabilities and Stockholders' Deficiency	$ 23,227	$ 28,359
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FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data)
	FOR THE THREE MONTHS ENDED MARCH 31,
	---------------- 2010 ----------------	---------------- 2009 ----------------
REVENUES Product sales - net	$ 1,955	$ 6,156
Service and repair fees - net	2,778	2,567
Service and repair fees - related parties - net	55	55
Management and other fees - net	1,738	1,736
Management and other fees - related medical practices-net	988	742
	----------------	----------------
Total Revenues - Net	7,514 ----------------	11,256 ----------------
COSTS AND EXPENSES Costs related to product sales	1,353	3,325
Costs related to service and repair fees	566	969
Costs related to service and repair fees - related parties	11	21
Costs related to management and other fees	1,338	1,039
Costs related to management and other fees - related medical practices	703	686
Research and development	528	872
Selling, general and administrative	2,708	3,219
Provision for bad debts	282	363
	----------------	----------------
Total Costs and Expenses	7,489	10,494
	----------------	----------------
Loss From Operations	25	762

Interest Expense	(66 )	(75 )
Interest Expense - Related Party	( 21)	-
Investment Income	51	91
Interest Income - Related Party	2	5
Other Income	1	( 17)
	----------------	----------------
NET (LOSS) INCOME	$ (8 )	$730
	===========	===========
Basic Net (Loss) Income Per Common Share	$ (0.00)	$ 0.14
	===========	===========
Diluted Net (Loss) Income Per Common Share	$ ( 0.00)	$0.13
	===========	===========
Basic and Diluted Income Per Share – Common C	$ N/A	0.04
	===========	===========
Weighted Average Basic Shares Outstanding	4,929,752	4,904,275
	===========	===========
Weighted Average Diluted Shares Outstanding	4,929,752	5,031,779
	===========	===========

FONAR CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (000's OMITTED, except per share data)
	FOR THE NINE MONTHS ENDED MARCH 31,
	---------------- 2010 ----------------	---------------- 2009 ----------------
REVENUES Product sales - net	$ 6,479	$ 11,975
Service and repair fees - net	8,163	7,737
Service and repair fees - related parties - net	165	165
Management and other fees - net	5,212	5,518
Management and other fees - related medical practices-net	2,613	2,181
License fees and royalties	585	1,755
	----------------	----------------
Total Revenues - Net	23,217 ----------------	29,331 ----------------
COSTS AND EXPENSES Costs related to product sales	5,289	7,590
Costs related to service and repair fees	2,485	3,008
Costs related to service and repair fees - related parties	50	64
Costs related to management and other fees	3,989	3,316
Costs related to management and other fees - related medical practices	2,208	2,040
Research and development	2,159	2,681
Selling, general and administrative	9,042	9,955
Provision for bad debts	659	1,063
	----------------	----------------
Total Costs and Expenses	25,881	29,717
	----------------	----------------
Loss From Operations	( 2,664)	( 386)

Interest Expense	( 235)	( 193)
Interest Expense - Related Party	( 40)	-
Investment Income	203	236
Interest Income - Related Party	9	17
Other Income (Expense)	35	( 15)
Minority Interest in Income of Partnerships	-	( 11)
Gain on Sale of Consolidated Subsidiary	-	1,448
Loss on Note Receivable	( 350)	-
Provision for Income Taxes	- ----------------	( 36) -----------------
NET (LOSS) INCOME	$( 3,042)	$ 1,060
	===========	===========
Net (Loss) Income Available to Common Stockholders	$( 3,042)	$ 997
	===========	===========
Basic Net (Loss) Income Per Common Share	$ (0.62)	$ 0.20
	===========	===========
Diluted Net (Loss) Income Per Common Share	$ (0.62)	$ 0.19
	===========	===========
Basic and Diluted Income per share – Common C	$ N/A	$ 0.05
	===========	===========
Weighted Average Basic Common Shares Outstanding	4,917,990	4,904,275
	===========	===========
Weighted Average Diluted Common Shares Outstanding	4,917,990	5,031,779
	===========	===========

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.