Fonar Corporation (Fonar), a diagnostic imaging company, has reported total revenues of $11.3 million, for the second quarter of fiscal 2009, compared with the total revenues of $10.7 million in the year-ago quarter. It also reported net income of $0.78 million, or $0.16 per share, second quarter of fiscal 2009, compared with the net loss of $3.8 million, or $0.78 per share, in the year-ago quarter.
Net income for the six months period ending December 31, 2008 was $331,000 as compared to the six month period one year earlier when it had a loss of $4.0 million.
Raymond Damadian, president and chairman of FONAR said, “In this era of jobs being exported to other countries, 82% of the components that create The FONAR UPRIGHT® Multi-Position™ MRI are purchased from 26 American States. So FONAR can truly say, ‘Made in America’.
“We understand that American innovation is an important answer to America’s financial woes and FONAR hopes to provide that technical innovation with several new MRI products that we are working on,” continued Damadian.
For the six months ending December 31, 2008, the net income per common share (basic and diluted) was $0.07 as compared to a loss of ($0.83) per common share (basic and diluted) for the same period one year earlier.
For the six months ended December 31, 2008 total revenues were $18.1 million versus $19.4 million one year earlier.
At the end of the second fiscal quarter of fiscal 2009, total current assets were $20.5 million, total assets were $32.9 million, total current liabilities were $35.3 million and total long-term liabilities were $1.3 million. Total cash and cash equivalents, and marketable securities were $2.6 million on December 31, 2008, a modest increase as compared to $2.4 million on June 30, 2008.
On November 17, 2008, the company held its annual shareholder meeting for the combined fiscal years ending June 30, 2009 and 2008. All votes before shareholders passed. The company had previously been non-compliant with NASDAQ’s proxy solicitation and annual meeting requirements, as set forth in Marketplace Rules 4350(g) and 4350(e), respectively, and this annual shareholder meeting satisfied those requirements.
On October 9, 2008, the company received a notice of non-compliance from The NASDAQ Stock Market based upon the company’s non-compliance with the minimum stockholders’ equity requirement of $2.5 million at June 30, 2008, for continued listing on The NASDAQ Capital Market, as set forth in NASDAQ Marketplace Rule 4310(c)(3) (the “Stockholders’ Equity Requirement”). They said it could serve as a basis for delisting of the company’s securities from The NASDAQ Capital Market.
On February 3, 2009, The company announced that the NASDAQ Listing Qualifications Panel (“NASDAQ Panel”) has granted the company’s request for continued listing on The NASDAQ Capital Market, subject to the condition that, on or before April 6, 2009, the company file a Current Report on Form 8-K with the Securities and Exchange Commission, evidencing the company’s compliance with the NASDAQ shareholders’ equity requirement of $2.5 million, or demonstrating its compliance with one of the alternative listing criteria. While the company is taking steps to comply with the terms of the NASDAQ Panel decision, there can be no assurance that the company will be able to do so.
A company spokesman said, “The NASDAQ Capital Market Continued Listing Requirements require one of three standards for a company to meet, one being a shareholders’ equity requirement of $2.5 million. One alternative standard would be a $35 million market cap and curiously the company had easily topped that level during most of its nearly 30-year history as a public company. Recent times are the exception. (www.fonar.com/market_cap.htm).”
“Another alternative standard,” continued The company spokesman, “would be to have a minimum of $500,000 net income for a fiscal year. Since our net income at six months is $331,000, we are two-thirds of the way there. In normal times, this would probably not be significant enough to persuade the NASDAQ Panel to grant FONAR’s continued listing in the Capital Market. However, given the present state of the economy, these are not normal times and we are hopeful.”
Damadian said, “FONAR has achieved its goal of becoming profitable again. The current quarter results were the result of careful cost-cutting of R&D, and selling, general and administrative costs (S, G & A). Subsequently, we have decreased S, G & A, the bulk of FONAR’s overhead, by 40% for the six month period ending December 31, 2008 as compared to the same six month period one year earlier, from $11.2 million to $6.7 million.”
Damadian continued, “Our R&D expenditures have also declined 27% to $1.8 million during the past six month time period from $2.5 million one year earlier. Despite the decline, The company is working on various new innovative projects which will be very meaningful in the MRI world. Notwithstanding the present nationwide financial pressures, FONAR looks forward only with optimism and enthusiasm as FONAR’s patented UPRIGHT® weight-bearing MRI technology ultimately becomes a mandatory new standard of care in spine medicine, particularly for those facing surgery. In addition we are developing new applications for the UPRIGHT® MRI such as radiation-free monitoring of scoliosis patients. Another exciting project is the non-invasive diagnosis of pelvic floor dysfunction (PFD) and urinary incontinence that affects 10 million women. As the U.S. economy improves, and medical equipment sales improve, we expect a pent-up demand for the benefits of UPRIGHT® Multi-Position MRI technology to emerge.”