0000355019-11-000026.txt : 20111115
0000355019-11-000026.hdr.sgml : 20111115
20111115164119
ACCESSION NUMBER: 0000355019-11-000026
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 2
CONFORMED PERIOD OF REPORT: 20110930
ITEM INFORMATION: Results of Operations and Financial Condition
FILED AS OF DATE: 20111115
DATE AS OF CHANGE: 20111115
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: FONAR CORP
CENTRAL INDEX KEY: 0000355019
STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
IRS NUMBER: 112464137
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0630
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-10248
FILM NUMBER: 111207646
BUSINESS ADDRESS:
STREET 1: 110 MARCUS DR
CITY: MELVILLE
STATE: NY
ZIP: 11747
BUSINESS PHONE: 6316942929
MAIL ADDRESS:
STREET 1: 110 MARCUS DRIVE
CITY: MELVILLE
STATE: NY
ZIP: 11747
8-K
1
fonr8k.TXT
FONAR FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): November 15, 2011
FONAR CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-10248 11-2464137
--------------- ---------------- -------------------
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
110 Marcus Drive
Melville, New York 11747
(631) 694-2929
---------------------------------------------------
(Address, including zip code, and telephone number
of registrant's principal executive office)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)
Item 2.02(a) Results of Operations and Financial Condition.
We reported our results of operations and financial condition for the fiscal
quarter ended September 30, 2011 in a press release dated November 15, 2011
Exhibits
99.1 Press Release dated November 15, 2011
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
FONAR CORPORATION
(Registrant)
By: /s/ Raymond Damadian
Raymond Damadian
President and Chairman
Dated: November 15, 2011
EX-99
2
fonar99.TXT
FONAR EXHIBIT 99
exhibit 99.1
================================================================================
================================================================================
FONAR CORPORATION
For Immediate Release FONAR Corporation NASDAQ-FONR
Contact: Daniel Culver 110 Marcus Drive
Director of Communications Melville, New York 11747
Web site: www.fonar.com Telephone: (631) 694-2929
Email: investor@fonar.com Fax Number: (631) 390-1709
================================================================================
FONAR ANNOUNCES 1ST QUARTER FISCAL 2012 FINANCIAL RESULTS AS NET INCOME
INCREASES 360% TO $1.8 MILLION
MELVILLE, NEW YORK, November 14, 2011 - FONAR Corporation (NASDAQ-FONR), The
Inventor of MR Scanning(TM), reported today its first quarter of fiscal 2012.
The Company reports net income has risen 360% to $1.8 million for the first
fiscal 2012 quarter ended September 30, 2011 from $363 thousand one year earlier
for the fiscal quarter ended September 30, 2010. The Company has net income for
the past six quarters and income from operations for the past seven quarters.
Statement of Operations Items
Total revenues increased 11% to $9.6 million for the quarter ended September 30,
2011, from $8.7 million for the corresponding quarter which ended one year
earlier on September 30, 2010.
The basic earnings per common share increased 257% to $0.25 per share during the
first fiscal quarter of fiscal 2012 as compared to $0.07 per common share for
the first fiscal 2011 quarter ended September 30, 2010. In addition, the diluted
earnings per common share increased 243% to $0.24 per share during the first
fiscal quarter of fiscal 2012 as compared to $0.07 per common share for the
first fiscal 2011 quarter ended September 30, 2010.
For the quarter ended September 30, 2011, income from operations was $1.8
million. This is compared to the same period ended September 30, 2010, when the
income from operations was $435 thousand.
Total operating costs and expenses decreased 5% to $7.8 million for the quarter
ended September 30, 2011 from $8.3 million for the quarter ended September 30,
2010.
Revenues from product sales were $1.8 million for the fiscal quarter ended
September 30, 2011 as compared to $2.7 million for the corresponding quarter
ended September 30, 2010. Revenues from service and repair fees were $2.9
million for the fiscal quarter ended September 30, 2011 as compared to $2.7
million for the fiscal quarter ended September 30, 2010.
Revenues from the management and other fees segment (management of the ten FONAR
UPRIGHT(R) Multi-Position(TM) MRI diagnostic imaging centers segment) increased
to $4.9 million for the fiscal quarter ended September 30, 2011, from $3.3
million for the fiscal quarter ended September 30, 2010.
Balance Sheet Items
As of September 30, 2011 total current assets were $24.5 million, total assets
were $33.1 million, total current liabilities were $23.1 million, and total
long-term liabilities were $2.5 million.
As of September 30, 2011, total cash and cash equivalents and marketable
securities were $9.5 million as compared to $9.3 million as of June 30, 2011. In
addition, this compares to $1.3 million for the fiscal quarter one year earlier
ended September 30, 2010.
As of September 30, 2011, the total stockholder's equity improved to $7.5
million, as compared to a total stockholder's equity of $5.9 million as of June
30, 2011.
Significant Quarter Highlight:
Breakthrough in the Diagnoses of Multiple Sclerosis
On September 20, 2011, a paper, titled "The Possible Role of Cranio-Cervical
Trauma and Abnormal CSF Hydrodynamics in the Genesis of Multiple Sclerosis," was
published in the journal Physiological Chemistry and Physics and Medical NMR
(Sept. 20, 2011, 41: 1-17). It was co-authored by FONAR MRI researchers Raymond
V. Damadian, M.D., president and founder of FONAR and FONAR scientist David Chu,
PhD.
The journal article reported a diagnostic breakthrough in multiple sclerosis
(MS) based on observations made possible by the company's unique FONAR
UPRIGHT(R) Multi-Position(TM) MRI. The findings reveal that the cause of
multiple sclerosis may be biomechanical and related to earlier trauma to the
neck, which can result in the obstruction of the flow of cerebrospinal fluid
(CSF), which is produced and stored in the central anatomic structures of the
brain known as the ventricles. Since the ventricles produce a large volume of
CSF each day (500 cc), an obstruction can result in a build up of pressure
within the ventricles, resulting in leakage of the CSF into the surrounding
brain tissue. This leakage could be responsible for generating the brain lesions
of multiple sclerosis. The complete study in which the diagnostic breakthrough
was reported can be viewed at http://www.fonar.com/pdf/PCP41_damadian.pdf.
Dr. Damadian said. "We used the UPRIGHT(R) Multi- Position(TM) MRI to view the
flow of cerebrospinal fluid in and out of the brain with the patients scanned
UPRIGHT(R) and scanned lying down. The UPRIGHT(R) MRI also revealed that these
obstructions were the result of structural deformities of the cervical spine,
induced by trauma earlier in life. The findings are based on viewing the
real-time flow of cerebrospinal fluid in a series of eight randomly chosen
patients with multiple sclerosis. These invaluable dual observations have only
been possible since the invention by FONAR of an MRI capable of imaging the
patient UPRIGHT(R)."
The "Major Diagnostic Breakthrough in Multiple Sclerosis Achieved With Advanced
UPRIGHT(R) MRI" was announced by Dr. Damadian on October 4, 2011, at a Radiology
Department Grand Rounds at the University of California San Diego Medical
Center.
William G. Bradley, Jr., M.D., Ph.D., F.A.C.R., Chairman of the Department of
Radiology, and a Professor of Radiology at UCSD School of Medicine introduced
Dr. Damadian to his colleagues at grand rounds. Dr. Bradley said, "Dr. Damadian
has shown that 8 patients with MS had degenerative changes in their cervical
spines which impinged on the spinal canal and limited the pulsatile, to-and-fro
flow of cervical CSF over the cardiac cycle, as demonstrated on UPRIGHT(R) MRI.
His hypothesis that increased resistance to outflow of CSF is linked to the
etiology of MS has some similarities to Dr. P. Zamboni's hypothesis that MS is
due to the impeded outflow of venous blood from the brain due to dural sinus
stenoses. In both theories, increased resistance to outflow of either CSF or
venous blood would be expected to modify the intracranial pressure wave over the
cardiac cycle. While both theories need to be further tested with larger
controlled studies, it is intriguing that they seem to invoke similar pathologic
changes. Whether these changes are etiologic in all cases of MS remains to be
tested."
Dr. Damadian stated, "These new observations have uncovered biomechanical
barriers that appear to give rise to multiple sclerosis, and, even more
excitingly, these barriers may be therapeutically addressable. One of the eight
patients in the study, a 41-year-old female patient with MS was treated when her
symptoms subsided upon treatment."
FONAR reported on the case study on November 2, 2011. The FONAR UPRIGHT(R) MRI
found cervical malrotations at the cranio-cervical junction, which resulted in
alterations of CSF flow dynamics and gave rise to CSF fluid leakages into
surrounding brain tissue. The CSF leakages visualized were directly connected to
MS lesions visualized on the UPRIGHT(R) MRI. Following an Atlas Orthogonal (AO)
Correction by Dr. Scott Rosa, the patient experienced a significant reduction in
symptoms which correlate directly to 28.6% reduction of her CSF pressure on post
MRI evaluation. The patient is currently being maintained free of MS symptoms
(vertigo and vomiting on recumbency) by weekly treatments with the AO
instrument.
Other Quarter Highlights
As of September 30, 2011, FONAR had installed 152 FONAR UPRIGHT(R)
Multi-Position(TM) MRIs. The 152nd was installed at the Diagnostic Radiology
Center of the Treasure Coast in Port St. Lucie, Florida.
A new California customer purchased the FONAR UPRIGHT(R) Multi-Position(TM) MRI
saying it was because of their dedication to being a `center of excellence for
the spine'. One of the physicians, Hoorman M. Melamed, MD, FAOOS, a board
certified orthopaedic spine surgeon, and a principal at the Bakersfield
UPRIGHT(R) MRI Center, said, "Selection of the FONAR UPRIGHT(R)
Multi-Position(TM) MRI for our group was a very careful and deliberate decision.
We recognize that the UPRIGHT(R) MRI offers capabilities beyond that of a
recumbent-only MRI. The UPRIGHT(R) MRI allows for scanning patients weight-
bearing and in the dynamic positions of flexion and extension. This allows us to
see and evaluate the patient's spine pathology under load and thus enabling us
to avoid underestimating a patient's pathology and therefore obtaining a better
diagnosis."
Another new customer for the FONAR UPRIGHT(R) Multi-Position(TM) MRI was a
physician practice of radiologists and neurosurgeons located in the Northeast
section of the U.S. It will be part of a newly-constructed 75,000 sq. ft.
state-of-the-art neuroscience spine institute where it will be the hallmark of
their goal of becoming a center of excellence in spine care.
Management Commentary
Dr. Damadian said, "Over the last six quarters we have a net profit of $4.9
million. This is due to changes that we have had to make including a focus on
the management of our ten UPRIGHT(R) MRI imaging centers and some difficult cost
reductions. While sales are not as robust as in prior years, we believe sales of
the UPRIGHT(R) Multi-Position(TM) MRI will increase as the U.S. economy
continues its recovery. This is because the UPRIGHT(R) MRI has huge value in
medicine when it comes to diagnosing the spine. As time goes on, more and more
physicians and patients recognize this. The discovery that an interrupted CSF
flow causes MS is a valuable discovery and one that will immensely help those
poor souls afflicted with the symptoms of MS as well as FONAR tremendously."
About FONAR
FONAR (NASDAQ:FONR), Melville, NY, The Inventor of MR Scanning(TM), 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. Since its inception, nearly 300 recumbent-OPEN MRIs and 150
UPRIGHT(R) Multi-Position(TM) MRI scanners have been installed worldwide.
FONAR's stellar product is the UPRIGHT(R) MRI (also known as the Stand-Up(R)
MRI), the only whole-body MRI that performs Position(TM) imaging (pMRI(TM)) 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(R) MRI often sees the patient's problem that other scanners cannot
because they are lie-down only. The patient- friendly UPRIGHT(R) MRI has a
near-zero claustrophobic rejection rate by patients. 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 they
watch a 42" flat screen TV. FONAR is headquartered on Long Island, New York.
#
UPRIGHT(R) and STAND-UP(R) are registered trademarks and The Inventor of MR
Scanning(TM), Full Range of Motion(TM), Multi-Position(TM), Upright
Radiology(TM), The Proof is in the Picture(TM), True Flow(TM), pMRI(TM),
Spondylography(TM), Dynamic(TM), Spondylometry(TM), CSP(TM), and Landscape(TM),
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.
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
ASSETS September 30, June 30,
2011 2011
(UNAUDITED)
Current Assets: ----------- --------
Cash and cash equivalents $ 9,512 $ 9,251
Marketable securities 28 33
Accounts receivable - net 4,701 5,264
Accounts receivable - related party 90 -
Management and other fees receivable - net 3,496 3,309
Management and other fees receivable - related
medical practices - net 1,714 1,669
Costs and estimated earnings in excess of
billings on uncompleted contracts 557 169
Inventories 3,817 2,400
Current portion of notes receivable - net 114 114
Prepaid expenses and other current assets 425 352
------- -------
Total Current Assets 24,454 22,561
------- -------
Property and equipment - net 3,499 3,769
Notes receivable 344 359
Other intangible assets - net 4,219 4,318
Other assets 587 574
-------- --------
Total Assets $33,103 $31,581
======== ========
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED)
September 30, June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 2011 2011
(UNAUDITED)
Current Liabilities: ----------- --------
Current portion of long-term debt and capital leases $ 1,818 $ 2,026
Accounts payable 2,074 2,187
Other current liabilities 9,264 8,236
Unearned revenue on service contracts 5,379 5,762
Unearned revenue on service contracts - related party 82 -
Customer advances 3,638 4,846
Billings in excess of costs and estimated
earnings on uncompleted contracts 817 4
Income tax payable 75 75
------ ------
Total Current Liabilities 23,147 23,136
Long-Term Liabilities:
Accounts payable 148 102
Due to related medical practices 230 228
Long-term debt and capital leases,
less current portion 1,628 1,746
Other liabilities 498 502
------ ------
Total Long-Term Liabilities 2,504 2,578
------ ------
Total Liabilities 25,651 25,714
------ ------
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(000's OMITTED, except share data)
September 30, June 30,
LIABILITIES AND STOCKHOLDERS' EQUITY 2011 2011
(continued) (UNAUDITED)
---------- --------
STOCKHOLDERS' EQUITY:
Class A non-voting preferred stock $.0001 par value;
453,000 shares authorized at
September 30, 2011 and June 30, 2011,
313,451 issued and outstanding
at September 30, 2011 and June 30, 2011 - -
Preferred stock $.001 par value; 567,000
shares authorized at September 30, 2011
and June 30, 2011,
issued and outstanding - none - -
Common Stock $.0001 par value; 8,500,000 shares
authorized at September 30, 2011 and June 30, 2011,
5,689,171 and 5,636,571 issued at
September 30, 2011 and June 30, 2011, respectively;
5,677,528 and 5,624,928 outstanding at September 30, 2011
and June 30, 2011, respectively 1 1
Class B Common Stock (10 votes per share)
$ .0001 par value; 227,000 shares
authorized at September 30, 2011 and
June 30, 2011; 158 issued and
outstanding at September 30, 2011 and June 30, 2011 - -
Class C Common Stock (25 votes per share)
$.0001 par value; 567,000 shares
authorized at September 30, 2011 and June 30, 2011,
382,513 issued and outstanding
at September 30, 2011 and June 30, 2011 - -
Paid-in capital in excess of par value 173,580 173,476
Accumulated other comprehensive loss (22) (16)
Accumulated deficit (172,597) (174,110)
Notes receivable from employee stockholders (113) (115)
Treasury stock, at cost - 11,643 shares of common stock
at September 30, 2011 and June 30, 2011 (675) (675)
Non controlling interests 7,278 7,306
-------- --------
Total Stockholders' Equity 7,452 5,867
-------- --------
Total Liabilities and Stockholders' Equity $33,103 $31,581
======== ========
FONAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(000's OMITTED, except per share data)
FOR THE THREE MONTHS ENDED
SEPTEMBER 30,
------------------
2011 2010
REVENUES -------- --------
Product sales - net $ 1,776 $ 2,660
Service and repair fees - net 2,905 2,689
Service and repair fees - related parties - net 27 55
Management and other fees - net 3,329 2,088
Management and other fees - related medical
practices - net 1,571 1,193
-------- --------
Total Revenues - Net 9,608 8,685
-------- --------
COSTS AND EXPENSES
Costs related to product sales 1,475 2,506
Costs related to service and repair fees 813 665
Costs related to service and repair
fees - related parties 8 14
Costs related to management and other fees 2,185 1,313
Costs related to management and other
fees - related medical practices 819 739
Research and development 329 454
Selling, general and administrative 2,043 2,383
Provision for bad debts 175 176
-------- --------
Total Costs and Expenses 7,847 8,250
-------- --------
Income From Operations 1,761 435
Interest Expense (107) (94)
Interest Expense - Related Parties - (4)
Investment Income 62 38
Interest Income - Related Party - 1
Other Income 56 9
-------- --------
Net Income 1,772 385
Net Income - Non Controlling Interests (259) -
-------- --------
Net Income - Controlling Interests $ 1,513 $ 385
======== ========
Net Income Available to Common Stockholders $ 1,409 $ 363
======== ========
Net Income Available to Class A Non-Voting
Preferred Stockholders $ 78 $ 22
======== ========
Net Income Available to Class C Common Stockholders $ 27 $ 7
======== ========
Basic Net Income Per Common Share Available
to Common Stockholders $ 0.25 $ 0.07
======== ========
Diluted Net Income Per Common Share Available
to Common Stockholders $ 0.24 $ 0.07
======== ========
Basic and Diluted Income Per Share - Common C $ 0.07 $ 0.02
======== ========
Weighted Average Basic Shares Outstanding 5,668,762 5,012,245
========= =========
Weighted Average Diluted Shares Outstanding 5,796,266 5,139,749
========= =========