MELVILLE, NEW YORK, May 19, 2009 - FONAR Corporation (NASDAQ-FONR), The Inventor of MR Scanning™, today announced its earnings for the third quarter of fiscal 2009 ending March 31, 2009. Net income for the nine month period ending March 31, 2009 was $1.1 million as compared to the nine month period one year earlier when there was a net loss of $6.7 million. For the third fiscal quarter ending March 31, 2009, the Company reported net income of $730,000 as compared to the same period one year earlier when it had a loss of $2.7 million.

Revenues increased 7.0% to $29.3 million for the nine month period ending March 31, 2009 as compared to $27.4 million for the nine month period ending March 31, 2008. For the quarter ending March 31, 2009, revenues increased 39.5% to $11.3 million as compared to $8.1 million for the quarter ending March 31, 2008.

Raymond Damadian, M.D., president and chairman of FONAR Corporation said, “We are delighted that the Company has once again become profitable. In fact we now have two straight quarters of income greater than $700,000. There are several reasons for this. While 2008 was a difficult year, we initiated an aggressive cost-cutting program. Costs and expenses have been reduced in most categories but most significantly in our selling, general and administrative expenses (S, G & A). Overall, S, G & A was reduced 36.0% from $15.5 million for the nine months ending March 31, 2008 to $10.0 million for the most current nine month period.”

Dr. Damadian continued, “Another reason is a refreshed focus on ‘selling scans’ through our UPRIGHT® Multi-Position™ MRI managed sites. We currently have nine UPRIGHT® MRIs and one older FONAR QUAD™ MRI being managed by HMCA (Health Management Corporation of America), FONAR’s wholly-owned subsidiary (www.hmca.com). There are UPRIGHT® MRI centers that scan more than 500 patients per month and we would like that to happen pervasively within the HMCA network.”

“We often find that the busier UPRIGHT® Multi-Position MRI centers are in an area with many single-position, recumbent-only competitor MRIs around them,” continued Dr. Damadian. “They will energize the local imaging market. When claustrophobic patients find out about the UPRIGHT® MRI, they will demand it from their referring physicians. Patients and the referring physicians seeking spine care will also seek out the best diagnostic device for their condition. Add advantages of scanning overweight patients, patients who can’t lie down, weight-bearing imaging of men and women with pelvic floor dysfunction, patients with scoliosis and the ability to perform high quality routine imaging of other body parts, and you have the opportunity for a very busy MRI site.”

As of March 31, 2009, there were 133 FONAR UPRIGHT® Multi-Position™ MRI units installed worldwide. During the third quarter of fiscal 2009 total product sales increased dramatically by 162.2 % to $6.2 million from $2.3 million over the corresponding quarter one year earlier.

During the third fiscal quarter of 2009, FONAR announced it has sold two UPRIGHT® Multi-Position™ MRI scanners to Doshi Diagnostic Imaging Services, P.C., which is among the country’s largest privately held multi-modality imaging companies, as well as the largest radiology group in New York. Doshi Diagnostic is headquartered in Bethpage, Long Island, and operates approximately 40 centers in Florida, New Jersey, Long Island, and New York City.

Another sale of an UPRIGHT® Multi-Position™ MRI was to the Tripoli Medical Center, a leading state-of-the-art medical center in Libya with approximately 1450 beds, 1000 physicians, and 3000 employees. This is an especially significant sale for FONAR, because it marks the entrance of the company’s UPRIGHT® imaging technology into the markets of Africa and the Middle East.

Also during the third fiscal quarter of 2009 Raymond Damadian, M.D. became the recipient of the 2009 AIMBE (American Institute for Medical and Biological Engineering) Honorary Fellow Award for his discovery of MRI. Dr. Damadian is the originator of the concept of magnetic resonance (MR) scanning of the human body (1969). The AIMBE Award was presented at the annual meeting of AIMBE, held February 11-13 in Washington, D.C.

The award says: “In 1970, Raymond Damadian, M.D., made the discovery that is the basis for magnetic resonance (MR) scanning that there is a marked difference in relaxation times between normal and abnormal tissues of the same type, as well as between different types of normal tissues. This seminal discovery, which remains the basis for the making of every MRI image ever produced, is the foundation of the MRI industry. Dr. Damadian published his discovery in his milestone 1971 paper in the journal Science (Science 171:1151, 1971) and filed the pioneer patent for the practical use of his discovery in 1972.” (www.fonar.com/news/022409.htm).

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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™ and Spondylometry™ are trademarks of FONAR Corporation.

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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