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Welcome to
Investor Relations

May 2020

Dear Shareholders:

As you know, we are in the midst of one of the most formidable crises our country has ever known. It is certainly the most challenging our Company has ever faced. Sadly, the COVID-19 (coronavirus) pandemic has caused sickness and death across the globe, and every day its accompanying uncertainty continues to generate fear, stress, and anxiety for all of us. We hope that you and your loved ones are safe and that its impact on your lives has been minimal.

The Company is feeling it as well. In the current quarter, the pandemic is having a negative effect on HMCA Management Fee revenue as well as FONAR Service revenue. The financial impact of the COVID-19 on the Company will be fully accessed over the coming months. But be assured that FONAR is doing everything in its power in order to survive the COVID-19 pandemic and continue on its path of steady growth and profitability

  • History of Growth

As of December 31, 2019, FONAR posted 39 consecutive quarters of positive net income and positive income from operations.

Fonar History of growth-5-2020

  • HMCA

FONAR’s diagnostic imaging management subsidiary, Health Management Company of America (HMCA), continues as FONAR’s primary source of income and growth. HMCA currently manages eighteen (18) facilities in New York and seven (7) in Florida.

HMCA was formed in 1997 in order for FONAR to expand into the MRI practice management business. At the time, FONAR was seeking a steady and reliable source of revenue, which for years had been difficult to attain in the fluctuating MRI equipment sales arena. The expansion was quite natural. After all, FONAR was the inventor of MR scanning, a leader in MRI innovation, and having worked with hundreds of its customers for nearly 20 years, was very familiar with the management of independent MRI scanning centers. Having observed and evaluated their methods, strategies, and practices, we were able to develop a well-designed business plan that eventually resulted in HMCA becoming the company’s leading source of
revenue and profit.

HMCA’s continuing success is primarily attributable to leadership of my son, President and CEO Timothy R. Damadian, his highly experienced and competent management team, and the ever-increasing appeal of the UPRIGHT® MRI, also known as the STAND-UP® MRI, among patients and their physicians. Since Tim and his team took the reins in 2010, Total Revenues-Net has grown from $38.1 million to $87.2 million, representing an effective annual growth rate of 8.6%. In calendar year 2009, the total MRI scan volume at HMCA-managed facilities was 29,000. The MRI scan volume in calendar 2019 was 189,000.

The importance of the FONAR UPRIGHT® MRI to the success of HMCA cannot be overstated. Physicians are seeing how the diagnostic information obtained from having their patients scanned in weight-bearing positions, when appropriate, such as sitting, bending or standing, can lead to treatment plans that result in better patient outcomes. Scanning patients in these positions is possible only on the patent-protected UPRIGHT® MRI. It is well known that most MRI studies are of the spine, and it is widely reported that about 80% of adults experience low back pain at some point in their lifetimes. This explains why the UPRIGHT® MRI has gained traction in the medical community.

Additionally, there has been, and will no doubt continue to be, a significant portion of the patient population that seek to avoid or flatly refuse to have their MRI exams in a claustrophobia-inducing “tunnel” or “tube” MRI, which is typical of most MRIs. To their relief, the UPRIGHT® MRI allows most patients to be scanned while sitting and watching a wide-screen TV. We have, for years, benefitted substantially from this unique and highly-prized feature and, since the design of the UPRIGHT® MRI remains patent-protected by FONAR, we will continue to enjoy this competitive advantage in the future.

HMCA’s growth strategy has three components. First, we continually strive to increase scan volume by applying proven marketing techniques and providing outstanding service to patients and their physicians. Second, we install additional MRI scanners at sites in need of reducing patient backlog and/or sites that would benefit from expanded MRI services to their referral bases. Multi-MRI facilities are very cost effective. Aside from the expense of the added equipment, the only other major costs are those associated with the additional space needed to house the equipment and a few more staff members to accommodate the increase in patient volume. Third, we acquire or establish de novo sites in locations that would enhance or expand our existing networks. We find such locations by conducting thorough demographic studies, identifying the primary major medical insurance carriers in the region, and evaluating the
competitive landscape.

Prior to the disruption due to the COVID-19 pandemic, the Company had planned to invest between four and six million dollars in four HMCA projects in Fiscal 2020. We installed a second MRI scanner at the Ormond Beach, Florida facility in October, 2019. The installation of the first MRI scanner in what will be a two-MRI facility in Pembroke Pines, Florida is still expected to be completed by the end of the fiscal year. However, the installations of a second MRI in Westchester County, New York and a second MRI in Suffolk County, New York have been delayed and are now expected to be completed in the early part of the first quarter of Fiscal 2021. At that point, we will have a total of 38 MRI scanners and 26 locations under our management.


FONAR, the Inventor of MR Scanning™, introduced the world’s first commercial MRI in 1980. We went public in 1981 and have installed over 400 MRIs all over the world. Located in Melville, New York, we continue to manufacture, sell, service and upgrade FONAR scanners.

Our 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 UPRIGHT® MRI has detected problems that were underestimated or missed entirely on “weightless-only” MRI scanners, particularly scans of the spine. With its ability to “see it all,” the UPRIGHT® MRI provides referring physicians the means to achieve better outcomes for their patients. The scanner is unique in another way as well: its comfort and openness make it the Patient-Friendly™ MRI. The claustrophobic rejection rate by patients is close to zero, which makes the UPRIGHT® MRI very appealing not only to patients, but to referring physicians who need to accommodate patients who are fearful of or cannot tolerate the confining ‘tubes” or “tunnels” of conventional MRI scanners.

  • FONAR’s Ongoing Research

Over the past few years we have been making cines (movies) of the cerebrospinal fluid (CSF) as it flows up and down the neck and around the brain. Thanks to the UPRIGHT® MRI’s ability to scan patients in weight-bearing positions as well as in the recumbent, non-weight-bearing position, we are finding significant postural differences in CSF flow. These differences may provide clues which will enable physicians to find solutions to a variety of unsolved medical problems and the power to quantify the degree to which the impaired CSF flow responsible for the patient’s symptoms have been rectified by the patient’s surgical and non-surgical CCJ
(Cranio-Cervical Junction) treatment. Currently, our research is focused on quantifying CSF flow and the velocity at which it navigates through the neck and head. We’ve been able to use this quantitative CSF data collected from asymptomatic patients to identify the degree to which CSF flow impairment is responsible for the patient’s symptoms and the degree to which the patient’s surgical or non-surgical CCJ treatment has restored the patient’s critical brain and central nervous symptom’s physiology to normal. We are also hopeful that our research may lead to a new understanding of the role of CSF on neurologic diseases, such as MS.

MRI has brought a new dimension to medical treatment: the power to visualize anatomic detail in the bod's vital soft issues (brain, heart, kidney, liver, spleen, lungs, pancreas, and intestines) plus MRI's new power to non-invasively quantify (e.g. measure T1, T2, diffusion, chemical spectra) the response of these vital tissues to treatment.

Research and Development remains a priority at FONAR. R&D expenses have increased by 7% to $1.0 M for the 6 months ending December 31, 2019 as compared to the same period in 2018, with most of the increases directed to developing various upgrades for the UPRIGHT® MRI.


FONAR celebrated a special anniversary on September 17, 2019: It was 50 years ago that I first thought about developing a device using magnetic resonance to scan the human body to detect cancer. On September 17, 1969, I sent a letter to Dr. George Mirick of the Health Research Council of the City of New York requesting financial support for equipment to follow up his promising line of research. In that letter, I wrote, “I will make every effort myself and through collaborators, to establish that all tumors can be recognized by their potassium relaxation times or H2O-proton spectra and proceed with the development of instrumentation and probes that can be used to scan the human body externally for early signs of malignancy. Detection of internal tumors during the earliest stages of their genesis should bring us very close to the total eradication of this disease,” marking the origination of the MRI scanner.

It was during the following year, on June 18, 1970, that I performed the first experiments whereby I discovered the distinctly elongated time-lapsed signal marking differences between normal and cancerous tissue, as well as differences among various normal organs themselves that make the MRI image. That was my ‘Eureka!’ moment. The results of my experiments were subsequently published in the journal Science on March 19, 1971.

According to Magnetic Resonance in Medicine, A Critical Introduction (2018), there are approximately 50,000 MRIs in the world.

Perhaps Professor Donlin Long, M.D., former Chairman of Neurosurgery, Johns Hopkins University, says it best: MRI is “The Single Most Important Diagnostic Discovery in the History of All of Medicine.” Professor Long made this statement on November 10, 2018, when I was awarded the Excellence in Medicine Medal of Honor from the Chiari & Syringomyelia Foundation at Brooks’s in London, England. He was joined by Fraser Henderson, M.D., a neurosurgeon and member of the steering committee for the Chiari & Syringomyelia Foundation, who said, “Raymond Damadian revolutionized medicine with the discovery and development of MRI.”

  • Conclusion

FONAR’s unique MRI technology and its well-managed subsidiary, HMCA, have given us 39 consecutive quarters of positive net income and positive income from operations. I am confident that we will weather the COVID-19 storm and continue to be successful for years to come.

As always, I remain grateful to our stockholders, customers and employees for their loyal support.

Raymond V. Damadian


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