DEF: Fonar Corporation Announces Notice of Annual Meeting and Proxy for May 19, 2025

Sentiment:

Notice of Annual Meeting and Proxy Statement 7 April 2025 3:03 PM

Fonar Corporation will hold its annual meeting of stockholders on May 19, 2025, to elect directors, approve executive compensation, and ratify the selection of auditors.

Better than expectedThe company recognized net income of $14.1 million on revenues of $102.9 million, as compared to net income of $12.1 million on revenues of $98.6 million for fiscal 2023.Consolidated operating results increased by 11.8% to an operating income of $16.5 million for fiscal 2024 as compared to operating income of $14.8 million for fiscal 2023.Revenues attributable to the Companys physician and diagnostic services management segment, HMCA, increased to $94.6 million in fiscal 2024 as compared to $90.4 million in fiscal 2023.

Summary

Fonar Corporation will hold its annual meeting of stockholders on May 19, 2025, at the Hilton Long Island Huntington Hotel in Melville, New York.
The purposes of the meeting include electing five directors to the Board of Directors, approving executive compensation on an advisory basis, and ratifying the selection of CohnReznick LLP as the company's auditors for the fiscal year ending June 30, 2025.
Stockholders of record as of March 24, 2025, are entitled to notice of and to vote at the meeting.
As of March 24, 2025, there were 6,211,191 shares of Common Stock, 146 shares of Class B Common Stock, and 382,513 shares of Class C Common Stock issued and outstanding.
The 313,438 shares of Class A Nonvoting Preferred Stock are not entitled to vote.
The proxy statement is first being made available to shareholders on or about April 7, 2025, on the internet.
The Board of Directors recommends voting for all nominees for directors, the advisory vote on executive compensation, and the ratification of the selection of CohnReznick LLP as auditors.
Timothy Damadian, as trustee, controls more than 50% of the voting power of the company's outstanding stock.
In fiscal year 2024, the scan volume at HMCA-managed sites was 209,346, an 11% increase over that in Fiscal 2023.
FONAR posted 59 consecutive quarters of positive net income and positive income from operations as of June 30, 2024.
FONAR is the exclusive distributor of SwiftMR to FONAR customers for use on their FONAR MRIs or on any other MRI scanner they own.
The Raymond V. Damadian, M.D. Memorial Museum opened at FONAR headquarters in Melville, New York.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook for Fonar, highlighting increased revenues, net income, and scan volumes. The management's comments express gratitude and pride in the company's history and achievements. However, the document also acknowledges risks related to reimbursement rates, competition, and economic conditions, preventing a higher sentiment score.

Positives

Scan volume at HMCA-managed sites increased by 11% in Fiscal 2024, reaching 209,346 scans.
FONAR has posted 59 consecutive quarters of positive net income and positive income from operations as of June 30, 2024.
FONAR is the exclusive distributor of SwiftMR, an AI-powered image enhancement product.
The Raymond V. Damadian, M.D. Memorial Museum is open at FONAR headquarters.

Negatives

The document does not explicitly state any negatives.

Risks

The document mentions risks related to reduced reimbursement rates, inflation, cybersecurity threats, dependence on referrals, pressure to control healthcare costs, scanning facility competition, eligibility changes to insurance programs, federal and state privacy and information security laws, current and future changes in Florida Insurance Law, demand for MRI scanners, manufacturing competition, and other changes in domestic and worldwide economic conditions.

Future Outlook

By the end of Fiscal 2025 (June 30, 2025), FONAR will have added high-field MRIs to two existing Stand-Up MRI centers on Long Island. The company expects HMCA to be a major contributor to FONAR's continuing success. The company believes that its capital resources will be adequate to support operations at current levels through September 30, 2025.

Management Comments

Timothy R. Damadian: 'Every MRI picture ever made, every MRI exam ever conducted, and every life ever helped or even saved by the treatment of maladies based on diagnostic information derived from an MRI exam are the fruits of the seminal discovery made by my father, Raymond V. Damadian, M.D.'
Timothy R. Damadian: 'All of us at FONAR are very proud of our history, proud to be part of fulfilling Dr. Damadian's dream of making a diagnostic machine to help people.'
Timothy R. Damadian: 'I am grateful to friends, family, investors and employees for the parts they have played in making FONAR a success.'

Industry Context

The global MRI market was valued at $6.64 billion in 2023, with 100-150 million MRI scans performed worldwide each year. The company faces competition from companies such as Siemens, General Electric, Hitachi, Philips, Canon, and United Imaging.

Comparison to Industry Standards

Most commercially available MRI scanners range in magnetic field strength from about 0.2 T (Tesla) to 7.0 T, and open MRI scanners range from about 0.2 T to 1.2 T.
The Upright MRI operates at a mid-field strength of 0.6 T and enjoys wide acceptance in the radiological community.
Competitors have marketing and financial resources more substantial than those available to FONAR, including General Electric, Siemens, Hitachi and Phillips.

Related Party Transactions

Timothy Damadian currently owns three HMCA-managed MRI facilities in Florida.
The fees for these three sites are flat monthly fees which are subject to adjustment by mutual agreement on an annual basis.
On December 31, 2023, the Company entered into an agreement with Magnetic Resonance Management, LLC (MRM) for the sale of a MRI scanner. MRM is owned by the CEO and President of the Company.
Bensonhurst MRI Limited Partnership (Bensonhurst), in which the CEO and President of the Company holds an interest, is party to an agreement with the Company for the service and maintenance of its Upright MRI Scanner.
Radian Healthcare Management, LLC (Radian), which is owned by the son-in-law of the CEO and President of the Company provided the Company with personnel recruitment.

Stakeholder Impact

Shareholders are encouraged to participate in the annual meeting and vote on key proposals.
Employees are recognized for their contributions to the company's success.
The company aims to provide high-quality diagnostic imaging services to patients and support referring physicians.

Next Steps

Stockholders are urged to vote their shares at their earliest convenience by internet, phone, or mail.
The company will add high-field MRIs to two existing Stand-Up MRI centers on Long Island by the end of Fiscal 2025.

Key Dates

Date	Description
September 17, 1969	Dr. Damadian requested funds to pursue a Nuclear Magnetic Resonance (NMR) body scanner to detect malignant tumors.
1970	Dr. Damadian discovered that the relaxation times of NMR signals from normal and cancerous tissues of the same type were markedly different.
1974	Dr. Damadian was granted a patent for the machine that he envisioned: U.S. Patent #3,789,832, the world's first MRI patent.
July 2 and 3, 1977	The world's first MRI image was made on the world's first MRI scanner, Indomitable, at the Downstate Medical Center in Brooklyn, New York.
July 17, 1978	FONAR Corporation was incorporated.
1978	FONAR, the world's first MRI Company, was launched.
1980	FONAR introduced the world's first commercial MRI.
1980	FONAR introduced the first open MRI.
1981	FONARs initial public offering.
1983	FONAR had 13 competitors.
October 1987	Claudette J.V. Chan became a Director of FONAR.
1989	Luciano B. Bonanni had served the Company as Vice President.
1992-1997	Claudette J.V. Chan was employed by Raymond V. Damadian, M.D. MR Scanning Centers Management Company.
April 3, 1995	The stockholders ratified a proposal consisting of the creation of a new class of Class A non-voting preferred stock.
October 20, 1995	The stock dividend was payable to holders of common stock.
1997	FONAR created its diagnostic management subsidiary, Health Management Company of America (HMCA).
1997	Claudette J.V. Chan was employed by HMCA.
1998-2000	Ronald G. Lehman worked at Deutsche Bank.
2000-2008	Ronald G. Lehman worked for various Bruderman entities.
October 3, 2000	FONAR received FDA clearance for the Upright MRI under the name Indomitable.
June 2001	The Board of Directors adopted a written charter for the audit committee.
2001	Timothy Damadian left FONAR to form Integrity Healthcare Management, Inc.
January 1, 2003	The audit committee adopted policies and procedures for pre-approving all non-audit work performed by its auditors.
November 17, 2004	The Board of Directors revised the written charter for the audit committee.
2007	Integrity Healthcare Management, Inc. was sold to Health Diagnostics, LLC.
2008	Ronald G. Lehman joined Health Diagnostics, LLC.
January 2008	Claudette J.V. Chan became Secretary of FONAR.
2009	HMCA was managing nine MRI facilities.
2010	Timothy Damadian returned to Fonar as a consultant.
2010	HMCA assembled a new and very experienced management team.
2010	Ronald G. Lehman returned to Bruderman.
April 2012	Ronald G. Lehman became a Director of FONAR.
February 13, 2013	FONAR entered into an agreement with outside investors to acquire a 50.5% controlling interest in Health Diagnostics Management LLC (HDM).
March 5, 2013	HDM purchased a business managing twelve (12) Stand-Up MRI Centers and two (2) other scanning centers from Health Diagnostics, LLC (HD) and certain of its subsidiaries.
January 8, 2015	FONAR purchased 20% of the Class A members ownership interest in HDM.
July 1, 2015	FONAR restructured the corporate organization of the management of diagnostic imaging centers segment of its business.
February 11, 2016	Timothy Damadian was appointed as FONARs Chief Executive Officer and President.
February 29, 2016	The Company received approval from the Suffolk County Industrial Development Agency of a 50% property tax abatement.
June 27, 2016	Luciano B. Bonanni has served as Chief Operating Officer (COO) and Executive Vice President (EVP) for FONAR Corporation.
May 25, 2021	The European Unions new medical device regulation, EU 2017/745 went into effect.
August 3, 2022	Dr. Raymond V. Damadian passed away.
September 7, 2022	Timothy Damadian has been the Chairman of the Board and Treasurer of FONAR.
September 13, 2022	The Company adopted a stock repurchase plan.
September 26, 2022	The Board of Directors has approved up to $9 million to be repurchased under the stock repurchase plan.
March 24, 2023	Florida Governor Ron DeSantis signed into law House Bill 837.
March 2023	Jessica Maher has been a Director of FONAR.
January 2024	The Company renewed their revolving credit agreement.
May 20, 2024	Registrants Report on Form 8-K: Item 5.07, Submission of Matters to a Vote of Security Holders, at the annual meeting of stockholders, reported on May 20, 2024.
June 30, 2024	FONAR posted 59 consecutive quarters of positive net income and positive income from operations.
April 7, 2025	This proxy statement, which is first being made available to shareholders on or about April 7, 2025 on the internet.
April 29, 2025	To facilitate timely delivery please make the request as instructed on or before April 29, 2025.
May 19, 2025	The Annual Meeting of the stockholders of Fonar Corporation will be held on Monday, May 19, 2025.
June 30, 2025	By the end of Fiscal 2025 (June 30,2025), we will have added high-field MRIs to two existing Stand-Up MRI centers on Long Island.
January 16, 2026	Proposals of stockholders intended to be presented at next years annual meeting of stockholders must be received by the Company no later than January 16, 2026.

Keywords

Fonar, Annual Meeting, Proxy Statement, Directors, Executive Compensation, Auditors, MRI, HMCA, SwiftMR, Raymond V. Damadian

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