Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | ||||
Mar. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | |
Common Stock | Class B Common Stock | Class C Common Stock | Preferred Stock Class A | ||
Entity Registrant Name | 'Fonar Corporation | ' | ' | ' | ' |
Entity Central Index Key | '0000355019 | ' | ' | ' | ' |
Document Type | '10-Q | ' | ' | ' | ' |
Document Period End Date | 31-Mar-14 | ' | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' | ' |
Current Fiscal Year End Date | '--06-30 | ' | ' | ' | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' | ' | ' | ' |
Is Entity a Voluntary Filer? | 'No | ' | ' | ' | ' |
Is Entity's Reporting Status Current? | 'Yes | ' | ' | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 6,025,075 | 146 | 382,513 | 313,438 |
Document Fiscal Period Focus | 'Q3 | ' | ' | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' | ' | ' |
Balance_Sheets
Balance Sheets (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current Assets: | ' | ' |
Cash and cash equivalents | $9,589 | $7,871 |
Accounts receivable - net | 4,444 | 4,444 |
Accounts receivable - related party | 30 | 0 |
Medical Receivables - net | 8,924 | 8,126 |
Management and other fees receivable - net | 12,675 | 11,466 |
Management and other fees receivable - related medical practices - net | 3,463 | 2,382 |
Inventories | 2,510 | 2,077 |
Prepaid expenses and other current assets | 1,708 | 1,500 |
Total Current Assets | 43,343 | 37,866 |
Property and equipment - net | 16,045 | 17,524 |
Goodwill | 1,767 | 1,767 |
Other intangible assets - net | 11,043 | 11,904 |
Deferred income tax asset | 2,936 | 2,936 |
Other assets | 1,013 | 1,154 |
Total Assets | 76,147 | 73,151 |
Current Liabilities: | ' | ' |
Current portion of long-term debt and capital leases | 2,967 | 2,886 |
Accounts payable | 2,863 | 2,752 |
Other current liabilities | 9,665 | 8,636 |
Unearned revenue on service contracts | 4,873 | 4,965 |
Unearned revenue on service contracts - related parties | 28 | ' |
Customer advances | 1,791 | 1,858 |
Income tax payable | ' | 20 |
Total Current Liabilities | 22,187 | 21,117 |
Long-Term Liabilities: | ' | ' |
Due to related medical practices | 231 | 231 |
Long-term debt and capital leases, less current portion | 9,404 | 12,887 |
Deferred income tax liability | 462 | 462 |
Other liabilities | 433 | 654 |
Total Long-Term Liabilities | 10,530 | 14,234 |
Total Liabilities | 32,717 | 35,351 |
STOCKHOLDERS' EQUITY: | ' | ' |
Common Stock | 1 | 1 |
Paid-in capital in excess of par value | 175,023 | 174,499 |
Accumulated deficit | -153,336 | -159,655 |
Notes receivable from employee stockholders | -41 | -55 |
Treasury stock, at cost - 12,000 shares of common stock at December 31, 2013 and June 30, 2013 | -675 | -675 |
Total Fonar Corporation Stockholder Equity | 20,972 | 14,115 |
Non controlling interests | 22,458 | 23,685 |
Total Stockholders' Equity | 43,430 | 37,800 |
Total Liabilities and Stockholders' Equity | $76,147 | $73,151 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
Class A NonVoting Preferred Stock | ' | ' |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Authorized | 453,000 | 453,000 |
Preferred Stock, Issued | 313,000 | 313,000 |
Preferred Stock, Outstanding | 313,000 | 313,000 |
Preferred Stock | ' | ' |
Preferred Stock, Par Value | $0.00 | $0.00 |
Preferred Stock, Authorized | 567,000 | 567,000 |
Preferred Stock, Issued | ' | ' |
Preferred Stock, Outstanding | ' | ' |
Common Stock | ' | ' |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 8,500,000 | 8,500,000 |
Common Stock, Issued | 6,037,000 | 5,981,000 |
Common Stock, Outstanding | 6,025,000 | 5,969,000 |
Class B Common Stock | ' | ' |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 227,000 | 227,000 |
Common Stock, Issued | 146 | 146 |
Common Stock, Outstanding | 146 | 146 |
Class C Common Stock | ' | ' |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Authorized | 567,000 | 567,000 |
Common Stock, Issued | 383,000 | 383,000 |
Common Stock, Outstanding | 383,000 | 383,000 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
REVENUES | ' | ' | ' | ' |
Product sales - net | $478 | $416 | $1,261 | $2,536 |
Service and repair fees - net | 2,518 | 2,867 | 7,578 | 8,341 |
Service and repair fees - related parties - net | 27 | 27 | 83 | 83 |
Patient Fee Revenue, net of Contractual Allowances and Discounts | 6,090 | 965 | 17,811 | 965 |
Provision for Bad Debts for patient fee | -2,868 | ' | -7,130 | ' |
Management and other fees - net | 8,538 | 5,402 | 24,955 | 12,946 |
Management and other fees - related medical practices - net | 2,257 | 1,965 | 6,923 | 5,895 |
Total Revenues - Net | 17,040 | 11,642 | 51,481 | 30,766 |
COSTS AND EXPENSES | ' | ' | ' | ' |
Costs related to product sales | 223 | 498 | 902 | 2,457 |
Costs related to service and repair fees | 623 | 819 | 1,755 | 2,579 |
Costs related to service and repair fees - related parties | 7 | 8 | 19 | 26 |
Costs related to patient fee revenue | 1,947 | 791 | 5,823 | 791 |
Costs related to management and other fees | 5,327 | 2,606 | 15,591 | 7,013 |
Costs related to management and other fees - related medical practices | 1,318 | 900 | 3,808 | 2,568 |
Research and development | 360 | 381 | 1,128 | 1,031 |
Selling, general and administrative | 3,935 | 3,774 | 12,024 | 8,338 |
Provision for bad debts | 981 | 235 | 763 | 735 |
Total Costs and Expenses | 14,721 | 10,012 | 41,813 | 25,538 |
Income From Operations | 2,319 | 1,630 | 9,668 | 5,228 |
Interest Expense | -203 | -79 | -682 | -258 |
Investment Income | 57 | 55 | 178 | 174 |
Other (Expense) Income | 39 | 0 | -113 | -13 |
Income Before Provision for Income Taxes | 2,212 | 1,606 | 9,051 | 5,131 |
Provision for Income Taxes | 65 | 25 | 235 | 152 |
Net Income | 2,147 | 1,581 | 8,816 | 4,979 |
Net Income - Non Controlling Interests | -408 | -505 | -2,497 | -1,103 |
Net Income - Controlling Interests | 1,739 | 1,076 | 6,319 | 3,876 |
Net Income Available to Common Stockholders | 1,625 | 1,005 | 5,907 | 3,621 |
Net Income Available to Class A Non-Voting Preferred Stockholders | 85 | 53 | 307 | 190 |
Net Income Available to Class C Common Stockholders | $29 | $18 | $105 | $65 |
Basic Net Income Per Common Share Available to Common Stockholders | $0.27 | $0.17 | $0.98 | $0.61 |
Diluted Net Income Per Common Share Available to Common Stockholders | $0.26 | $0.17 | $0.96 | $0.60 |
Basic and Diluted Income Per Share - Common C | $0.08 | $0.05 | $0.27 | $0.17 |
Weighted Average Basic Shares Outstanding | 6,022,000 | 5,937,000 | 6,002,000 | 5,921,000 |
Weighted Average Diluted Shares Outstanding | 6,150,000 | 6,065,000 | 6,130,000 | 6,049,000 |
Weighted Average Basic Shares Outstanding - Class C Common | 383,000 | 383,000 | 383,000 | 383,000 |
Weighted Average Diluted Shares Outstanding - Class C Common | 383,000 | 383,000 | 383,000 | 383,000 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash Flows from Operating Activities: | ' | ' |
Net income | $8,816 | $4,979 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 2,887 | 1,489 |
Provision for bad debts (for cash flow statement) | 7,894 | 735 |
Stock issued for costs and expenses | 407 | ' |
Compensatory element of stock issuances | 86 | 395 |
(Increase) decrease in operating assets, net: | ' | ' |
Accounts, management fee and medical receivables | -11,012 | -3,552 |
Notes receivable | 75 | 82 |
Costs and estimated earnings in excess of billings on uncompleted contracts | -236 | 640 |
Inventories | -433 | -89 |
Prepaid expenses and other current assets | 31 | -615 |
Other assets | 63 | -183 |
Increase (decrease) in operating liabilities, net: | ' | ' |
Accounts payable | 110 | 515 |
Other current liabilities | 964 | 1,214 |
Customer advances | -67 | 882 |
Other liabilities | -221 | -39 |
Due to related medical practices | 1 | 2 |
Income tax payable | -20 | -100 |
Net cash provided by operating activities | 9,345 | 6,355 |
Cash Flows from Investing Activities: | ' | ' |
Purchases of property and equipment | -375 | -568 |
Cost of HDM Acquisition | ' | -40,000 |
Cost of patents | -172 | -109 |
Proceeds from non controlling interests | ' | 19,800 |
Net cash used in investing activities | -547 | -20,877 |
Cash Flows from Financing Activities: | ' | ' |
Repayment of borrowings and capital lease obligations | -3,401 | -983 |
Stock option Exercised | 31 | ' |
Distributions to non controlling interests | -3,724 | -1,298 |
Proceeds from long-term debt | ' | 14,000 |
Repayment of notes receivable from employee Stockholders | 14 | 14 |
Net cash (used in) provided by financing activities | -7,080 | 11,733 |
Net (Decrease) Increase in Cash and Cash Equivalents | 1,718 | -2,789 |
Cash and Cash Equivalents - Beginning of Period | 7,871 | 12,032 |
Cash and Cash Equivalents - End of Period | $9,589 | $9,243 |
NOTE_1_BASIS_OF_PRESENTATION
NOTE 1 - BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2014 | |
Accounting Policies [Abstract] | ' |
BASIS OF PRESENTATION | ' |
FONAR CORPORATION AND SUBSIDIARIES | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
MARCH 31, 2014 and 2013 | |
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |
(UNAUDITED) | |
NOTE 1 - BASIS OF PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended March 31, 2014, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2014. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K filed on October 15, 2013 for the fiscal year ended June 30, 2013. | |
NOTE_2_SUMMARY_OF_SIGNIFICANT_
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||||||
The unaudited condensed consolidated financial statements include the accounts of FONAR Corporation, its majority and wholly-owned subsidiaries and partnerships (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||
Basic earnings per share (“EPS”) is computed based on weighted average number of shares common stock and stock equivalents outstanding, net of common stock. In accordance with ASC topic 260-10, “Participating Securities and the Two-Class method”, the Company used the Two-Class method for calculating basic earnings per share and applied the if converted method in calculating diluted earnings per share for the three and nine months ended March 31, 2014 and March 31, 2013. | |||||||||||||||||||||||||
Diluted EPS reflects the potential dilution from the exercise or conversion of all dilutive securities into common stock based on the average market price of common shares outstanding during the period. For the three and nine months ended March 31, 2014 and March 31, 2013, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common. | |||||||||||||||||||||||||
Three months ended | Three months ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Basic | Total | Common Stock | Class C Common Stock | Total | Common Stock | Class C Common Stock | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||||
Net income Available to common stockholders | $ | 1,739 | $ | 1,625 | $ | 29 | $ | 1,076 | $ | 1,005 | $ | 18 | |||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,022 | 6,022 | 383 | 5,937 | 5,937 | 383 | |||||||||||||||||||
Basic income per common share | $ | 0.29 | $ | 0.27 | $ | 0.08 | $ | 0.18 | $ | 0.17 | $ | 0.05 | |||||||||||||
Diluted | |||||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,022 | 383 | 5,937 | 383 | |||||||||||||||||||||
Stock options | — | — | — | — | |||||||||||||||||||||
Convertible Class C Stock | 128 | — | 128 | — | |||||||||||||||||||||
Total Denominator for diluted earnings per share | 6,150 | 383 | 6,065 | 383 | |||||||||||||||||||||
Diluted income per common share | $ | 0.26 | $ | 0.08 | $ | 0.17 | $ | 0.05 | |||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Basic | Total | Common Stock | Class C Common Stock | Total | Common Stock | Class C Common Stock | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||||
Net income Available to common stockholders | $ | 6,319 | $ | 5,907 | $ | 105 | $ | 3,876 | $ | 3,621 | $ | 65 | |||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,002 | 6,002 | 383 | 5,921 | 5,921 | 383 | |||||||||||||||||||
Basic income per common share | $ | 1.05 | $ | 0.98 | $ | 0.27 | $ | 0.65 | $ | 0.61 | $ | 0.17 | |||||||||||||
Diluted | |||||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,002 | 383 | 5,921 | 383 | |||||||||||||||||||||
Stock options | — | — | — | — | |||||||||||||||||||||
Convertible Class C Stock | 128 | — | 128 | — | |||||||||||||||||||||
Total Denominator for diluted earnings per share | 6,130 | 383 | 6,049 | 383 | |||||||||||||||||||||
Diluted income per common share | $ | 0.96 | $ | 0.27 | $ | 0.6 | $ | 0.17 | |||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||||||
In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies how entities test indefinite-lived intangible assets for impairment which improves consistency in impairment testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial position and results of operations. | |||||||||||||||||||||||||
The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial position and results of operations. | |||||||||||||||||||||||||
FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of March 31, 2014 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2014 or 2013, and it does not believe that any of those pronouncements will have a significant impact on our condensed consolidated financial statements at the time they become effective. | |||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on reported consolidated net income for any periods presented. |
NOTE_3_ACCOUNTS_RECEIVABLE_MED
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLES AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $) | 9 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Receivables [Abstract] | ' | ||||||||||||
NOTE 3 - ACCOUNTS RECEIVABLE. MEDICAL RECEIVABLES AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $) | ' | ||||||||||||
FONAR CORPORATION AND SUBSIDIARIES | |||||||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||||||
MARCH 31, 2014 and 2013 | |||||||||||||
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||||||
(UNAUDITED) | |||||||||||||
NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE | |||||||||||||
Receivables, net is comprised of the following at March 31, 2014: | |||||||||||||
Gross | Allowance for | Net | |||||||||||
Receivable | doubtful accounts | ||||||||||||
Receivables from equipment sales and service contracts | $ | 4,701 | $ | 257 | $ | 4,444 | |||||||
Receivables from equipment sales and service contracts - related party | $ | 30 | — | $ | 30 | ||||||||
Medical Receivable | $ | 18,639 | $ | 9,715 | $ | 8,924 | |||||||
Management and other fees receivables | $ | 22,534 | $ | 9,859 | $ | 12,675 | |||||||
Management and other fees receivables from related medical practices ("PC’s") | $ | 3,866 | $ | 403 | $ | 3,463 | |||||||
Receivables, net is comprised of the following at June 30, 2013: | |||||||||||||
Gross | Allowance for | Net | |||||||||||
Receivable | doubtful accounts | ||||||||||||
Receivables from equipment sales and service contracts | $ | 4,701 | $ | 257 | $ | 4,444 | |||||||
Receivables from equipment sales and service contracts - related party | $ | — | — | $ | — | ||||||||
Medical Receivable | $ | 10,711 | $ | 2,585 | $ | 8,126 | |||||||
Management and other fees receivables | $ | 20,561 | $ | 9,095 | $ | 11,466 | |||||||
Management and other fees receivables from related medical practices ("PC’s") | $ | 2,785 | $ | 403 | $ | 2,382 | |||||||
The Company's customers are concentrated in the healthcare industry. | |||||||||||||
Accounts Receivable | |||||||||||||
Credit risk with respect to the Company’s accounts receivable related to product sales and service and repair fees is limited due to the customer advances received prior to the commencement of work performed and the billing of amounts to customers as sub-assemblies are completed. Service and repair fees are billed on a monthly or quarterly basis and the Company does not continue providing these services if accounts receivable become past due. The Company controls credit risk with respect to accounts receivable from service and repair fees through its credit evaluation process, credit limits, monitoring procedures and reasonably short collection terms. The Company performs ongoing credit authorizations before a product sales contract is entered into or service and repair fees are provided. | |||||||||||||
Medical Receivable | |||||||||||||
Medical receivables are due under fee-for-service contracts from third party payors, such as hospitals, government sponsored healthcare programs, patient’s legal counsel and directly from patients. Substantially all the revenue relates to patients residing in Florida. The carrying amount of the medical receivable is reduced by an allowance that reflects management’s best estimate of the amounts that will not be collected. The Company continuously monitors collections from its clients and maintains an allowance for bad debts based upon the Company’s historical collection experience. The Company determines allowances for contractual adjustments and uncollectible accounts based on specific agings, specific payor collection issues that have been identified and based on payor classifications and historical experience at each site. | |||||||||||||
Management and Other Fees Receivable | |||||||||||||
The Company's receivables from the related and non-related professional corporations (PC's) substantially consist of fees outstanding under management agreements. Payment of the outstanding fees is dependent on collection by the PC's of fees from third party medical reimbursement organizations, principally insurance companies and health management organizations. | |||||||||||||
Payment of the management fee receivables from the PC’s may be impaired by the inability of the PC’s to collect in a timely manner their medical fees from the third party payors, particularly insurance carriers covering automobile no-fault and workers compensation claims due to longer payment cycles and rigorous informational requirements and certain other disallowed claims. Approximately 50% and 51% of the PCs’ net revenues for the three months ended March 31, 2014 and 2013, respectively, were derived from no-fault and personal injury protection claims. Approximately 50% and 47% of the PCs’ net revenues for the nine months ended March 31, 2014 and 2013, respectively, were derived from no-fault and personal injury protection claims. The Company considers the aging of its accounts receivable in determining the amount of allowance for doubtful accounts. The Company generally takes all legally available steps to collect its receivables. Credit losses associated with the receivables are provided for in the condensed consolidated financial statements and have historically been within management's expectations. | |||||||||||||
Net revenues from management and other fees charged to the related PCs accounted for approximately 13.2% and 16.9% of the consolidated net revenues for the three months ended March 31, 2014 and 2013, respectively. Net revenues from management and other fees charged to the related PCs accounted for approximately 13.4% and 19.2% of the consolidated net revenues for the nine months ended March 31, 2014 and 2013, respectively. | |||||||||||||
Tallahassee Magnetic Resonance Imaging, PA, Stand Up MRI of Boca Raton, PA and Stand Up MRI & Diagnostic Center, PA (all related medical practices) entered into a guaranty agreement, pursuant to which they cross guaranteed all management fees which are payable to the Company, which have arisen under each individual management agreement. | |||||||||||||
The Company’s patient fee revenue, net of contractual allowances and discounts less the provision for bad debts for the three and nine months ended March 31, 2014 and 2013 are summarized in the following tables. | |||||||||||||
For the Three Months Ended | |||||||||||||
March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Commercial Insurance/ Managed Care | $ | 1,033 | $ | 186 | |||||||||
Medicare/Medicaid | 343 | 81 | |||||||||||
Workers' Compensation/Personal Injury | 3,329 | 404 | |||||||||||
Other | 1,385 | 294 | |||||||||||
Patient Fee Revenue, net of contractual allowances and discounts | 6,090 | 965 | |||||||||||
Provision for Bad Debts | (2,868 | ) | — | ||||||||||
Net Patient Fee for Revenue | $ | 3,222 | $ | 965 | |||||||||
For the Nine Months Ended | |||||||||||||
March 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Commercial Insurance/ Managed Care | $ | 3,144 | $ | 186 | |||||||||
Medicare/Medicaid | 1,161 | 81 | |||||||||||
Workers' Compensation/Personal Injury | 9,679 | 404 | |||||||||||
Other | 3,827 | 294 | |||||||||||
Patient Fee Revenue, net of contractual allowances and discounts | 17,811 | 965 | |||||||||||
Provision for Bad Debts | (7,130 | ) | — | ||||||||||
Net Patient Fee for Revenue | $ | 10,681 | $ | 965 | |||||||||
NOTE_4_INVENTORIES
NOTE 4 - INVENTORIES | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
NOTE 4 - INVENTORIES | ' | ||||||||
FONAR CORPORATION AND SUBSIDIARIES | |||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||
MARCH 31, 2014 and 2013 | |||||||||
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||
(UNAUDITED) | |||||||||
NOTE 4 - INVENTORIES | |||||||||
Inventories included in the accompanying condensed consolidated balance sheet consist of the following: | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Purchased parts, components and supplies | $ | 2,120 | $ | 1,784 | |||||
Work-in-process | 390 | 293 | |||||||
Total Inventories | $ | 2,510 | $ | 2,077 | |||||
NOTE_5_CUSTOMER_ADVANCES
NOTE 5 - CUSTOMER ADVANCES | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 5 - CUSTOMER ADVANCES | ' | ||||||||
FONAR CORPORATION AND SUBSIDIARIES | |||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||
MARCH 31, 2014 and 2013 | |||||||||
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||
(UNAUDITED) | |||||||||
NOTE 5 – CUSTOMER ADVANCES | |||||||||
Customer advances consist of the following: | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Total Advances | $ | 4,484 | $ | 4,228 | |||||
Less: Advances on contracts under construction | 2,693 | 2,370 | |||||||
Total customer advances | $ | 1,791 | $ | 1,858 | |||||
NOTE_6_OTHER_INTANGIBLE_ASSETS
NOTE 6 - OTHER INTANGIBLE ASSETS | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
NOTE 6 - OTHER INTANGIBLE ASSETS | ' | ||||||||
FONAR CORPORATION AND SUBSIDIARIES | |||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||
MARCH 31, 2014 and 2013 | |||||||||
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||
(UNAUDITED) | |||||||||
NOTE 6 – OTHER INTANGIBLE ASSETS | |||||||||
Other intangible assets, net of accumulated amortization, in the accompanying condensed consolidated balance sheet consist of the following: | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Capitalized software development costs | $ | 7,669 | $ | 7,669 | |||||
Patents and copyrights | 4,365 | 4,194 | |||||||
Non-compete | 4,100 | 4,100 | |||||||
Customer relationships | 3,800 | 3,800 | |||||||
Gross Other intangible assets | 19,934 | 19,763 | |||||||
Less: Accumulated amortization | 8,891 | 7,859 | |||||||
Other Intangible Assets | $ | 11,043 | $ | 11,904 | |||||
Amortization of patents and copyrights for the three months ended March 31, 2014 and 2013 amounted to $44 and $42, respectively. | |||||||||
Amortization of capitalized software development costs for the three months ended March 31, 2014 and 2013 amounted to $104 and $76, respectively. | |||||||||
Amortization of non-compete for the three months ended March 31, 2014 and 2013 amounted to $146 and $49, respectively. | |||||||||
Amortization of customer relationships for the three months ended March 31, 2014 and 2013 amounted to $47 and $67, respectively. | |||||||||
Amortization of patents and copyrights for the nine months ended March 31, 2014 and 2013 amounted to $133 and $125, respectively. | |||||||||
Amortization of capitalized software development costs for the nine months ended March 31, 2014 and 2013 amounted to $321 and $226, respectively. | |||||||||
Amortization of non-compete for the nine months ended March 31, 2014 and 2013 amounted to $439 and $49, respectively. | |||||||||
Amortization of customer relationships for the nine months ended March 31, 2014 and 2013 amounted to $139 and $67, respectively. |
NOTE_7_OTHER_CURRENT_LIABILITI
NOTE 7 - OTHER CURRENT LIABILITIES | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Note 7 - OtherLiabilitiesCurrent | ' | ||||||||
FONAR CORPORATION AND SUBSIDIARIES | |||||||||
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |||||||||
MARCH 31, 2014 and 2013 | |||||||||
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||
(UNAUDITED | |||||||||
NOTE 7 – OTHER CURRENT LIABILITIES | |||||||||
Other current liabilities in the accompanying condensed consolidated balance sheet consist of the following: | |||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Accrued salaries, commissions | $ | 974 | $ | 711 | |||||
and payroll taxes | |||||||||
Accrued interest | 117 | 117 | |||||||
Litigation accruals | 702 | 809 | |||||||
Sales tax payable | 2,927 | 2,859 | |||||||
Legal and other professional fees | 491 | 569 | |||||||
Accounting fees | 221 | 305 | |||||||
Insurance premiums | 255 | 13 | |||||||
Interest and penalty - sales tax | 2,483 | 2,322 | |||||||
Penalty - 401k plan | 250 | 250 | |||||||
Purchase scanners | 450 | — | |||||||
Rent | 57 | 148 | |||||||
Other | 738 | 533 | |||||||
Total Other Current Liabilities | $ | 9,665 | $ | 8,636 | |||||
NOTE_8_STOCKHOLDERS_EQUITY
NOTE 8 - STOCKHOLDERS EQUITY | 9 Months Ended |
Mar. 31, 2014 | |
Equity [Abstract] | ' |
NOTE 8 - STOCKHOLDERS EQUITY | ' |
FONAR CORPORATION AND SUBSIDIARIES | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
MARCH 31, 2014 and 2013 | |
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |
(UNAUDITED | |
NOTE 8 – STOCKHOLDERS EQUITY | |
Common Stock | |
During the three months ended March 31, 2014: | |
a) The Company issued 15 shares of common stock for costs and expenses of $110. | |
During the nine months ended March 31, 2014: | |
a) The Company issued 11 shares of common stock to employees and consultants as compensation valued at $86 under a stock bonus plan. | |
b) The Company issued 35 shares of common stock for costs and expenses of $407. | |
c) Options for 10 shares of common stock pursuant to the 2005 Incentive Stock Option Plan were exercised for $31. |
NOTE_9_CONTROLLING_AND_NONCONT
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS | ' | ||||||||
NOTE 9 – CONTROLLING AND NONCONTROLLING INTERESTS | |||||||||
On February 13, 2013 the Company entered into an agreement with outside investors to acquire a 50.5% controlling interest in a newly formed limited liability company, Health Diagnostics Management LLC (HDM). According to the February 13, 2013 LLC operating agreement of HDM there are two classes of members; Class A members and one Class B member. The Class A members have an ownership interest of 49.5% of HDM. The Class B member (HMCA) has an ownership of 50.5% of HDM. On all matters on which members may vote every member is entitled to cast the percentage of votes equal to their percentage of ownership interest. Profits and losses an all items of income, gain or loss, deductions or other allocations of the Company will be allocated among the members in the same proportions as their membership interests in the Company bear to all the Class A and Class B membership interests of the Company in the aggregate outstanding. All of the depreciation and amortization of the assets of the Company will be allocated solely to the Class A members, unless and until their interests have been redeemed by the Company in full pursuant to the provisions of the operating agreement. During March 2013 the Company contributed $20,200 to HDM and the group of outside investors contributed $19,800 for its non-controlling membership interest. | |||||||||
To fund its capital contribution the Company borrowed a total of $14,000 from a bank in the form of a term loan aggregating $11,000 and a revolving credit loan aggregating $3,000. The term loan is payable in 60 consecutive monthly installments, commencing September 1, 2013. The term loan bears interest at 4.75% per annum and is payable monthly. The revolving credit loan is due March 5, 2016. The Company can prepay the loan in whole or in part in multiples of $100 at any time without penalty. The revolving credit note bears interest at a rate of 4% per annum and is payable monthly. All borrowings under the loan agreements are collateralized by substantially all of the Company’s assets. The loan agreements also contain certain financial covenants that must be met on a periodic basis. | |||||||||
On March 5, 2013 HDM purchased from Health Diagnostics, LLC (“HD”) and certain of its subsidiaries, a business managing twelve (12) Stand-Up® MRI Centers and two (2) other scanning centers located in the States of New York and Florida for a total purchase price (including consideration of $1,500 to outside investors) aggregating $35,900. Concurrently with the acquisition, HDM entered into several consulting and non-competition agreements for a consideration of $4,100. The acquisition was accounted for using the purchase method in accordance with ASC 805, “Business Combinations”. The accompanying consolidated financial statements include the operations of HDM from the date of acquisition. The Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. | |||||||||
The following table summarizes the estimated fair values of the assets and liabilities assumed at the acquisition date: | |||||||||
Management fee receivable | $ | 6,667 | |||||||
Medical receivables | 7,390 | ||||||||
Prepaid expenses and other current assets | 10 | ||||||||
Property and equipment | 14,913 | ||||||||
Intangible assets | 9,200 | ||||||||
Goodwill | 1,767 | ||||||||
Other assets | 333 | ||||||||
Other current liabilities | (6 | ) | |||||||
Long term debt | (274 | ) | |||||||
Net assets acquired | $ | 40,000 | |||||||
The purchase price was allocated to the tangible and intangible assets and liabilities assumed based on estimates of their respective fair values at the date of acquisition with the remaining unallocated purchase price recorded as goodwill. Management is responsible for the valuation of net assets acquired and considered a number of factors, including valuations and appraisals, when estimating the fair values and estimated useful lives of acquired assets and liabilities. The intangible assets, excluding goodwill, are being amortized on a straight-line basis over their weighted average lives as follows: | |||||||||
Fair Value | |||||||||
Non compete | $ | 4,100 | 7 years | ||||||
Customer relationships | 3,800 | 20 years | |||||||
Developed software | 1,300 | 5 years | |||||||
Total intangible assets | $ | 9,200 | |||||||
The HDM acquisition operating results have been included within the Company’s condensed consolidated financial statements since the date of acquisition. The following unaudited pro forma information assumes that the acquisition had been completed as of July 1, 2012: | |||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2013 | FOR THE NINE MONTHS ENDED MARCH 31, 2013 | ||||||||
Total Revenues - Net | $ | 15,115 | $ | 51,049 | |||||
Net Income - Controlling Interests | 1,446 | 5,356 | |||||||
Net Income Available to Common Stockholders | 1,351 | 5,003 | |||||||
Net Income Available to Class A Non-Voting Preferred Stockholders | 71 | 263 | |||||||
Net Income Available to Class C Common Stockholders | 24 | 90 | |||||||
Basic Net Income Per Common Share Available to Common Stockholders | $ | 0.23 | $ | 0.84 | |||||
Diluted Net Income Per Common Share Available to Common Stockholders | $ | 0.22 | $ | 0.83 | |||||
Basic and Diluted Income Per Share - Common C | $ | 0.06 | $ | 0.23 | |||||
Weighted Average Basic Shares Outstanding | 5,937 | 5,922 | |||||||
Weighted Average Diluted Shares Outstanding | 6,065 | 6,049 | |||||||
Weighted Average Basic and Diluted Shares Outstanding - Class C Common | 383 | 383 |
NOTE_10_SEGMENT_AND_RELATED_IN
NOTE 10 - SEGMENT AND RELATED INFORMATION | 9 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
NOTE 10 - SEGMENT AND RELATED INFORMATION | ' | ||||||||||||
NOTE 10 - SEGMENT AND RELATED INFORMATION | |||||||||||||
The Company operates in two industry segments - manufacturing and the servicing of medical equipment and management of diagnostic imaging centers. | |||||||||||||
The accounting policies of the segments are the same as those described in the summary of significant accounting policies as disclosed in the Company’s 10-K as of June 30, 2013. All inter-segment sales are market-based. The Company evaluates performance based on income or loss from operations. | |||||||||||||
Summarized financial information concerning the Company's reportable segments is shown in the following table: | |||||||||||||
Medical | Management | Totals | |||||||||||
Equipment | of | ||||||||||||
Diagnostic | |||||||||||||
Imaging | |||||||||||||
Centers | |||||||||||||
For the three months ended March 31, 2014 | |||||||||||||
Net revenues from external customers | $ | 3,023 | $ | 14,017 | $ | 17,040 | |||||||
Inter-segment net revenues | $ | 495 | $ | — | $ | 495 | |||||||
Income from operations | $ | 192 | $ | 2,127 | $ | 2,319 | |||||||
Depreciation and amortization | $ | 104 | $ | 829 | $ | 933 | |||||||
Capital expenditures | $ | 114 | $ | 98 | $ | 212 | |||||||
For the three months ended March 31, 2013 * | |||||||||||||
Net revenues from external customers | $ | 3,310 | $ | 8,332 | $ | 11,642 | |||||||
Inter-segment net revenues | $ | 300 | $ | 141 | $ | 441 | |||||||
(Loss) income from operations | $ | (286 | ) | $ | 1,916 | $ | 1,630 | ||||||
Depreciation and amortization | $ | 126 | $ | 553 | $ | 679 | |||||||
Capital expenditures | $ | 58 | $ | 281 | $ | 339 | |||||||
For the nine months ended March 31, 2014 | |||||||||||||
Net revenues from external customers | $ | 8,922 | $ | 42,559 | $ | 51,481 | |||||||
Inter-segment net revenues | $ | 1,485 | $ | — | $ | 1,485 | |||||||
Income from operations | $ | 323 | $ | 9,345 | $ | 9,668 | |||||||
Depreciation and amortization | $ | 322 | $ | 2,565 | $ | 2,887 | |||||||
Capital expenditures | $ | 187 | $ | 360 | $ | 547 | |||||||
For the nine months ended March 31, 2013 * | |||||||||||||
Net revenues from external customers | $ | 10,960 | $ | 19,806 | $ | 30,766 | |||||||
Inter-segment net revenues | $ | 705 | $ | 141 | $ | 846 | |||||||
Income from operations | $ | 182 | $ | 5,046 | $ | 5,228 | |||||||
Depreciation and amortization | $ | 421 | $ | 1,068 | $ | 1,489 | |||||||
Capital expenditures | $ | 166 | $ | 511 | $ | 677 | |||||||
*includes HDM transactions as of March 5,2013 |
NOTE_11_SUPPLEMENTAL_CASH_FLOW
NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Mar. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | ' |
NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION | ' |
FONAR CORPORATION AND SUBSIDIARIES | |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS | |
MARCH 31, 2014 and 2013 | |
(AMOUNTS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |
(UNAUDITED) | |
NOTE 11– SUPPLEMENTAL CASH FLOW INFORMATION | |
During the nine months ended March 31, 2014 and March 31, 2013, the Company paid $521 and $198 for interest, respectively. | |
During the nine months ended March 31, 2014 and March 31, 2013, the Company paid $255 and $252 for income taxes, respectively. |
NOTE_12_COMMITMENTS_AND_CONTIN
NOTE 12 - COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
NOTE 12 - COMMITMENTS AND CONTINGENCIES | ' |
NOTE 12 – COMMITMENTS AND CONTINGENCIES | |
Litigation | |
The Company is subject to legal proceedings and claims arising from the ordinary course of its business, including personal injury, customer contract and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such actions, will not have a material adverse effect on the consolidated financial position or results of operations of the Company. | |
There were no material changes in litigation from that reported in our Form 10-K for the fiscal year ended June 30, 2013 and our form 10-Q for the first and second quarters of fiscal 2014, except with respect to the following matters. | |
Bonutti Research v. Fonar Corporation, Health Management Corporation of America, Health Diagnostics, LLC et al, was commenced on December 2, 2011. Bonutti Research filed a patent infringement action in the U.S. District Court for the Eastern District Court of New York, alleging that Fonar’s UPRIGHTt® MRI scanners infringe plaintiff’s patent which relates to the moving of a patient into the scanner. Fonar believes plaintiff’s claims are without merit and further, that the patent is invalid. The parties have settled the case for $150 payable by Fonar in twelve installments and certain licenses and covenants not to sue. The $150 has been accrued as of March 31, 2014 in the Company’s condensed consolidated financial statements. | |
Bolt MRI Technologies v. Fonar Corporation, Health Management Corporation of America & Health Diagnostics, LLC, was commenced on July 22, 2013, when Bolt MRI Technologies filed an action against Fonar Corporation, Health Management Corporation of America and Health Diagnostics, LLC alleging infringement of the same patent which is the subject of the Bonutti case. Bolt alleged that the patent was assigned to Bolt. The settlement of the Bonutti case covers this case as well. | |
Other Matters | |
The Company is also delinquent in filing sales tax returns for certain states, for which the Company has transacted business. As of March 31, 2014, the Company has recorded tax obligations of approximately $2,717 plus interest and penalties of approximately $2,483. The Company is in the process of determining the regulatory requirements in order to become compliant. | |
On August 31, 2011 the Company submitted an application to the Internal Revenue Service to voluntarily correct required reporting and disclosure requirements regarding its 401(k) Employee Benefit Plan. On December 9, 2011, the Internal Revenue Service issued a favorable determination letter on the tax-qualified status of the 401K plan document and a favorable compliance statement. During December 2013, the Company submitted an application to the U.S. Department of Labor to voluntarily correct the late filing of prior Form 5500s (annual returns). The voluntary correction application is still pending. The Company, however, does not anticipate any additional penalties will be assessed by the U.S. Department of Labor. The Company has recorded provisions for any potential penalties totaling $250, which was the Company’s best estimate of its possible exposure for penalties at that time. Management still is unable to determine the outcome of this uncertainty, but is optimistic that the total penalties will be significantly less than the $250 reserve. The Company has engaged outside counsel to assist with the correction process and to obtain compliance with all reporting and disclosure requirements. |
NOTE_13_INCOME_TAXES
NOTE 13 - INCOME TAXES | 9 Months Ended |
Mar. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
NOTE 13 - INCOME TAXES | ' |
NOTE 13 - INCOME TAXES | |
Effective January 1, 2007, the Company adopted the provisions of ASC topic 740 (formerly FASB Interpretation No. 48/FASB Statement No. 109, “Accounting for Uncertainty in Income Taxes”). ASC topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a corporate tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized (or amount of net operating loss carryforward or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC topic 740. | |
In accordance with ASC topic 740, interest costs related to unrecognized tax benefits are required to be calculated (if applicable) and would be classified as “Interest expense, net”. Penalties if incurred would be recognized as a component of “Selling, general and administrative” expenses. | |
The Company files corporate income tax returns in the United States (federal) and in various state and local jurisdictions. In most instances, the Company is no longer subject to federal, state and local income tax examinations by tax authorities for years prior to 2008. | |
The Company netted a deferred tax asset of $2,936 and a deferred tax liability of $462 as of March 31, 2014, primarily relating to net operating loss carryforwards of approximately $142,788 available to offset future taxable income through 2030. The net operating losses begin to expire in 2019 for federal tax purposes and in 2013 for state income tax purposes. | |
The ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers projected future taxable income and tax planning strategies in making this assessment. At present, the Company does have a sufficient history of income and anticipates profitability in the coming years and has concluded that it is more-likely-than-not that the Company will be able to realize a portion of its tax benefits in the near future and therefore a valuation allowance was established for the partial value of the deferred tax asset. | |
A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of any portion or all of the valuation. Should the Company become profitable in future periods with supportable trends, the valuation allowance will be reversed accordingly. |
NOTE_14_SUBSEQUENT_EVENTS
NOTE 14 - SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
NOTE 14 - SUBSEQUENT EVENTS | ' |
NOTE 14- SUBSEQUENT EVENTS | |
On May 1, 2014, the Company repaid a portion of the Class A Stockholders capital contribution in the amount of $1.1 million. As a result, the Company’s subsidiary, HMCA, owns a 91% interest in Imperial Management Services. |
NOTE_2_SUMMARY_OF_SIGNIFICANT_1
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Note 2 - Summary Of Significant Accounting Policies Policies | ' | ||||||||||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||||||||||
Principles of Consolidation | |||||||||||||||||||||||||
The unaudited condensed consolidated financial statements include the accounts of FONAR Corporation, its majority and wholly-owned subsidiaries and partnerships (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation. | |||||||||||||||||||||||||
Earnings Per Share | ' | ||||||||||||||||||||||||
Earnings Per Share | |||||||||||||||||||||||||
Basic earnings per share (“EPS”) is computed based on weighted average number of shares common stock and stock equivalents outstanding, net of common stock. In accordance with ASC topic 260-10, “Participating Securities and the Two-Class method”, the Company used the Two-Class method for calculating basic earnings per share and applied the if converted method in calculating diluted earnings per share for the three and nine months ended March 31, 2014 and March 31, 2013. | |||||||||||||||||||||||||
Diluted EPS reflects the potential dilution from the exercise or conversion of all dilutive securities into common stock based on the average market price of common shares outstanding during the period. For the three and nine months ended March 31, 2014 and March 31, 2013, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common. | |||||||||||||||||||||||||
Three months ended | Three months ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Basic | Total | Common Stock | Class C Common Stock | Total | Common Stock | Class C Common Stock | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||||
Net income Available to common stockholders | $ | 1,739 | $ | 1,625 | $ | 29 | $ | 1,076 | $ | 1,005 | $ | 18 | |||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,022 | 6,022 | 383 | 5,937 | 5,937 | 383 | |||||||||||||||||||
Basic income per common share | $ | 0.29 | $ | 0.27 | $ | 0.08 | $ | 0.18 | $ | 0.17 | $ | 0.05 | |||||||||||||
Diluted | |||||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,022 | 383 | 5,937 | 383 | |||||||||||||||||||||
Stock options | — | — | — | — | |||||||||||||||||||||
Convertible Class C Stock | 128 | — | 128 | — | |||||||||||||||||||||
Total Denominator for diluted earnings per share | 6,150 | 383 | 6,065 | 383 | |||||||||||||||||||||
Diluted income per common share | $ | 0.26 | $ | 0.08 | $ | 0.17 | $ | 0.05 | |||||||||||||||||
Nine months ended | Nine months ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Basic | Total | Common Stock | Class C Common Stock | Total | Common Stock | Class C Common Stock | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||||
Net income Available to common stockholders | $ | 6,319 | $ | 5,907 | $ | 105 | $ | 3,876 | $ | 3,621 | $ | 65 | |||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,002 | 6,002 | 383 | 5,921 | 5,921 | 383 | |||||||||||||||||||
Basic income per common share | $ | 1.05 | $ | 0.98 | $ | 0.27 | $ | 0.65 | $ | 0.61 | $ | 0.17 | |||||||||||||
Diluted | |||||||||||||||||||||||||
Denominator: | |||||||||||||||||||||||||
Weighted average shares outstanding | 6,002 | 383 | 5,921 | 383 | |||||||||||||||||||||
Stock options | — | — | — | — | |||||||||||||||||||||
Convertible Class C Stock | 128 | — | 128 | — | |||||||||||||||||||||
Total Denominator for diluted earnings per share | 6,130 | 383 | 6,049 | 383 | |||||||||||||||||||||
Diluted income per common share | $ | 0.96 | $ | 0.27 | $ | 0.6 | $ | 0.17 | |||||||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||||||||||
In July 2012, the FASB issued ASU No. 2012-02, Intangibles-Goodwill and Other (Topic 350) Testing Indefinite-Lived Intangible Assets for Impairment. This ASU simplifies how entities test indefinite-lived intangible assets for impairment which improves consistency in impairment testing requirements among long-lived asset categories. These amended standards permit an assessment of qualitative factors to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value. For assets in which this assessment concludes it is more likely than not that the fair value is more than its carrying value, these amended standards eliminate the requirement to perform quantitative impairment testing as outlined in previously issued standards. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, early adoption is permitted. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial position and results of operations. | |||||||||||||||||||||||||
The FASB has issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date. Retrospective application is permitted. The adoption of this standard did not have a material impact on the Company’s condensed consolidated financial position and results of operations. | |||||||||||||||||||||||||
FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of March 31, 2014 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected our financial accounting measures or disclosures had they been in effect during 2014 or 2013, and it does not believe that any of those pronouncements will have a significant impact on our condensed consolidated financial statements at the time they become effective. | |||||||||||||||||||||||||
Reclassifications | ' | ||||||||||||||||||||||||
Reclassifications | |||||||||||||||||||||||||
Certain prior year amounts have been reclassified to conform to the current year presentation. The reclassifications did not have any effect on reported consolidated net income for any periods presented. |
NOTE_2_SUMMARY_OF_SIGNIFICANT_2
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Notes to Financial Statements | ' | ||||||||||||
Earnings Per Share | ' | ||||||||||||
Gross | Allowance for | Net | |||||||||||
Receivable | doubtful accounts | ||||||||||||
Receivables from equipment sales and service contracts | $ | 4,701 | $ | 257 | $ | 4,444 | |||||||
Receivables from equipment sales and service contracts - related party | $ | 30 | — | $ | 30 | ||||||||
Medical Receivable | $ | 18,639 | $ | 9,715 | $ | 8,924 | |||||||
Management and other fees receivables | $ | 22,534 | $ | 9,859 | $ | 12,675 | |||||||
Management and other fees receivables from related medical practices ("PC’s") | $ | 3,866 | $ | 403 | $ | 3,463 | |||||||
Gross | Allowance for | Net | |||||||||||
Receivable | doubtful accounts | ||||||||||||
Receivables from equipment sales and service contracts | $ | 4,701 | $ | 257 | $ | 4,444 | |||||||
Receivables from equipment sales and service contracts - related party | $ | — | — | $ | — | ||||||||
Medical Receivable | $ | 10,711 | $ | 2,585 | $ | 8,126 | |||||||
Management and other fees receivables | $ | 20,561 | $ | 9,095 | $ | 11,466 | |||||||
Management and other fees receivables from related medical practices ("PC’s") | $ | 2,785 | $ | 403 | $ | 2,382 | |||||||
NOTE_3_ACCOUNTS_RECEIVABLE_MED1
NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLES AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $) (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Receivables [Abstract] | ' | ||||||||
Receivables - net | ' | ||||||||
For the Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Commercial Insurance/ Managed Care | $ | 1,033 | $ | 186 | |||||
Medicare/Medicaid | 343 | 81 | |||||||
Workers' Compensation/Personal Injury | 3,329 | 404 | |||||||
Other | 1,385 | 294 | |||||||
Patient Fee Revenue, net of contractual allowances and discounts | 6,090 | 965 | |||||||
Provision for Bad Debts | (2,868 | ) | — | ||||||
Net Patient Fee for Revenue | $ | 3,222 | $ | 965 | |||||
Net patient fee for revenue | ' | ||||||||
For the Nine Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Commercial Insurance/ Managed Care | $ | 3,144 | $ | 186 | |||||
Medicare/Medicaid | 1,161 | 81 | |||||||
Workers' Compensation/Personal Injury | 9,679 | 404 | |||||||
Other | 3,827 | 294 | |||||||
Patient Fee Revenue, net of contractual allowances and discounts | 17,811 | 965 | |||||||
Provision for Bad Debts | (7,130 | ) | — | ||||||
Net Patient Fee for Revenue | $ | 10,681 | $ | 965 | |||||
NOTE_4_INVENTORIES_Tables
NOTE 4 - INVENTORIES (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Purchased parts, components and supplies | $ | 2,120 | $ | 1,784 | |||||
Work-in-process | 390 | 293 | |||||||
Total Inventories | $ | 2,510 | $ | 2,077 | |||||
NOTE_5_CUSTOMER_ADVANCES_Table
NOTE 5 - CUSTOMER ADVANCES (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Total Customer Advances - Net | ' | ||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Total Advances | $ | 4,484 | $ | 4,228 | |||||
Less: Advances on contracts under construction | 2,693 | 2,370 | |||||||
Total customer advances | $ | 1,791 | $ | 1,858 | |||||
NOTE_6_OTHER_INTANGIBLE_ASSETS1
NOTE 6 - OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ||||||||
Other intangible assets net of accumulated amortization | ' | ||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Capitalized software development costs | $ | 7,669 | $ | 7,669 | |||||
Patents and copyrights | 4,365 | 4,194 | |||||||
Non-compete | 4,100 | 4,100 | |||||||
Customer relationships | 3,800 | 3,800 | |||||||
Gross Other intangible assets | 19,934 | 19,763 | |||||||
Less: Accumulated amortization | 8,891 | 7,859 | |||||||
Other Intangible Assets | $ | 11,043 | $ | 11,904 | |||||
NOTE_7_OTHER_CURRENT_LIABILITI1
NOTE 7 - OTHER CURRENT LIABILITIES (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Total Other Current Liabilities | ' | ||||||||
March 31, | June 30, | ||||||||
2014 | 2013 | ||||||||
Accrued salaries, commissions | $ | 974 | $ | 711 | |||||
and payroll taxes | |||||||||
Accrued interest | 117 | 117 | |||||||
Litigation accruals | 702 | 809 | |||||||
Sales tax payable | 2,927 | 2,859 | |||||||
Legal and other professional fees | 491 | 569 | |||||||
Accounting fees | 221 | 305 | |||||||
Insurance premiums | 255 | 13 | |||||||
Interest and penalty - sales tax | 2,483 | 2,322 | |||||||
Penalty - 401k plan | 250 | 250 | |||||||
Purchase scanners | 450 | — | |||||||
Rent | 57 | 148 | |||||||
Other | 738 | 533 | |||||||
Total Other Current Liabilities | $ | 9,665 | $ | 8,636 | |||||
NOTE_9_CONTROLLING_AND_NONCONT1
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS (Tables) | 9 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
Estimated fair values of the assets and liabilities assumed at acquisition date | ' | ||||||||
Management fee receivable | $ | 6,667 | |||||||
Medical receivables | 7,390 | ||||||||
Prepaid expenses and other current assets | 10 | ||||||||
Property and equipment | 14,913 | ||||||||
Intangible assets | 9,200 | ||||||||
Goodwill | 1,767 | ||||||||
Other assets | 333 | ||||||||
Other current liabilities | (6 | ) | |||||||
Long term debt | (274 | ) | |||||||
Net assets acquired | $ | 40,000 | |||||||
Fair value of intangible assets excluding goodwill | ' | ||||||||
Fair Value | |||||||||
Non compete | $ | 4,100 | 7 years | ||||||
Customer relationships | 3,800 | 20 years | |||||||
Developed software | 1,300 | 5 years | |||||||
Total intangible assets | $ | 9,200 | |||||||
Unaudited pro forma information assuming HDM acquisition completed as of July 1, 2012 | ' | ||||||||
Fair Value | |||||||||
Non compete | $ | 4,100 | 7 years | ||||||
Customer relationships | 3,800 | 20 years | |||||||
Developed software | 1,300 | 5 years | |||||||
Total intangible assets | $ | 9,200 | |||||||
NOTE_10_SEGMENT_AND_RELATED_IN1
NOTE 10 - SEGMENT AND RELATED INFORMATION (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||
Segment And Related Information Table | ' | ||||||||||||
Medical | Management | Totals | |||||||||||
Equipment | of | ||||||||||||
Diagnostic | |||||||||||||
Imaging | |||||||||||||
Centers | |||||||||||||
For the three months ended March 31, 2014 | |||||||||||||
Net revenues from external customers | $ | 3,023 | $ | 14,017 | $ | 17,040 | |||||||
Inter-segment net revenues | $ | 495 | $ | — | $ | 495 | |||||||
Income from operations | $ | 192 | $ | 2,127 | $ | 2,319 | |||||||
Depreciation and amortization | $ | 104 | $ | 829 | $ | 933 | |||||||
Capital expenditures | $ | 114 | $ | 98 | $ | 212 | |||||||
For the three months ended March 31, 2013 * | |||||||||||||
Net revenues from external customers | $ | 3,310 | $ | 8,332 | $ | 11,642 | |||||||
Inter-segment net revenues | $ | 300 | $ | 141 | $ | 441 | |||||||
(Loss) income from operations | $ | (286 | ) | $ | 1,916 | $ | 1,630 | ||||||
Depreciation and amortization | $ | 126 | $ | 553 | $ | 679 | |||||||
Capital expenditures | $ | 58 | $ | 281 | $ | 339 | |||||||
For the nine months ended March 31, 2014 | |||||||||||||
Net revenues from external customers | $ | 8,922 | $ | 42,559 | $ | 51,481 | |||||||
Inter-segment net revenues | $ | 1,485 | $ | — | $ | 1,485 | |||||||
Income from operations | $ | 323 | $ | 9,345 | $ | 9,668 | |||||||
Depreciation and amortization | $ | 322 | $ | 2,565 | $ | 2,887 | |||||||
Capital expenditures | $ | 187 | $ | 360 | $ | 547 | |||||||
For the nine months ended March 31, 2013 * | |||||||||||||
Net revenues from external customers | $ | 10,960 | $ | 19,806 | $ | 30,766 | |||||||
Inter-segment net revenues | $ | 705 | $ | 141 | $ | 846 | |||||||
Income from operations | $ | 182 | $ | 5,046 | $ | 5,228 | |||||||
Depreciation and amortization | $ | 421 | $ | 1,068 | $ | 1,489 | |||||||
Capital expenditures | $ | 166 | $ | 511 | $ | 677 | |||||||
*includes HDM transactions as of March 5,2013 |
NOTE_2_SUMMARY_OF_SIGNIFICANT_3
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Basic and diluted - Numerator: Net income available to common stockholders | $1,739 | $1,076 | $6,319 | $3,876 |
Basic and diluted - Denominator: Weighted average shares outstanding | 6,022,000 | 5,937,000 | 6,002,000 | 5,921,000 |
Basic income per common share | $0.29 | $0.18 | $1.05 | $0.65 |
Common Stock | ' | ' | ' | ' |
Basic and diluted - Numerator: Net income available to common stockholders | 1,625 | 1,005 | 5,907 | 3,621 |
Basic and diluted - Denominator: Weighted average shares outstanding | 6,022,000 | 5,937,000 | 6,002,000 | 5,921,000 |
Basic income per common share | $0.27 | $0.17 | $0.98 | $0.61 |
Diluted - Denominator: Stock options | ' | ' | ' | ' |
Diluted - Denominator: Convertible Class C Stock | 128,000 | 128,000 | 128,000 | 128,000 |
Total diluted denominator: For diluted income per common share calculation | 6,150,000 | 6,065,000 | 6,130,000 | 6,049,000 |
Diluted income per common share | $0.26 | $0.17 | $0.96 | $0.60 |
Class C Common Stock | ' | ' | ' | ' |
Basic and diluted - Numerator: Net income available to common stockholders | $29 | $18 | $105 | $65 |
Basic and diluted - Denominator: Weighted average shares outstanding | 383,000 | 383,000 | 383,000 | 383,000 |
Basic income per common share | $0.08 | $0.05 | $0.27 | $0.17 |
Diluted - Denominator: Stock options | ' | ' | ' | ' |
Diluted - Denominator: Convertible Class C Stock | ' | ' | ' | ' |
Total diluted denominator: For diluted income per common share calculation | 383,000 | 383,000 | 383,000 | 383,000 |
Diluted income per common share | $0.08 | $0.05 | $0.27 | $0.17 |
NOTE_3_ACCOUNTS_RECEIVABLES_Re
NOTE 3 - ACCOUNTS RECEIVABLES - Receivables, Net - (Details) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Accounts receivable - related party | $30 | $0 |
Medical Receivables - net | 8,924 | 8,126 |
Management and other fees receivable - net | 12,675 | 11,466 |
Accounts receivable - net | 4,444 | 4,444 |
Management and other fees receivable - related medical practices - net | 3,463 | 2,382 |
Accounts Receivable, Gross | ' | ' |
Accounts receivable - related party | 30 | 0 |
Medical Receivables - net | 18,639 | 10,711 |
Management and other fees receivable - net | 22,534 | 20,561 |
Accounts receivable - net | 4,701 | 4,701 |
Management and other fees receivable - related medical practices - net | 3,866 | 2,785 |
Allowance for Doubtful Accounts, Current [Member] | ' | ' |
Accounts receivable - related party | 0 | 0 |
Medical Receivables - net | 9,715 | 2,585 |
Management and other fees receivable - net | 9,859 | 9,095 |
Accounts receivable - net | 257 | 257 |
Management and other fees receivable - related medical practices - net | $403 | $403 |
NOTE_3_ACCOUNTS_RECEIVABLE_Pat
NOTE 3 - ACCOUNTS RECEIVABLE - Patient Fee Revenue - (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Note 3 - Accounts Receivable - Patient Fee Revenue - Details | ' | ' | ' | ' |
Commercial Insurance/ Managed Care | $1,033 | $186 | $3,144 | $186 |
Medicare/Medicaid | 343 | 81 | 1,161 | 81 |
Workers' Compensation/ Personal Injury | 3,329 | 404 | 9,679 | 404 |
Other | 1,385 | 294 | 3,827 | 294 |
Patient Fee Revenue, net of Contractual Allowances and Discounts | 6,090 | 965 | 17,811 | 965 |
Provision for Bad Debts | -2,868 | ' | -7,130 | ' |
Net Patient Fee for Revenue | $3,222 | $965 | $10,681 | $965 |
NOTE_4_INVENTORIES_Details_Nar
NOTE 4 - INVENTORIES (Details Narrative) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Total inventories | $2,510 | $2,077 |
InventoriesMember | ' | ' |
Purchased parts, components and supplies | 2,120 | 1,784 |
Work-in-process | 390 | 293 |
Total inventories | $2,510 | $2,077 |
NOTE_5_CUSTOMER_ADVANCES_Detai
NOTE 5 - CUSTOMER ADVANCES - (Details) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Notes to Financial Statements | ' | ' |
Total advances | $4,484 | $4,228 |
Advances on contracts under construction | -2,693 | -2,370 |
Total customer advances | $1,791 | $1,858 |
NOTE_6_OTHER_INTANGIBLE_ASSETS2
NOTE 6 - OTHER INTANGIBLE ASSETS - Other intangible assets net of accumulated amortization (Details) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Accumulated Amortization | ($8,891) | ($7,859) |
Intangible asset value, net | 11,043 | 11,904 |
Software Development Costs | ' | ' |
Intangible asset value, gross | 7,669 | 7,669 |
Patents and copyrights | ' | ' |
Intangible asset value, gross | 4,365 | 4,194 |
Non-compete Agreements | ' | ' |
Intangible asset value, gross | 4,100 | 4,100 |
Customer Relationships | ' | ' |
Intangible asset value, gross | 3,800 | 3,800 |
Other Intangible Assets | ' | ' |
Intangible asset value, gross | $19,934 | $19,763 |
NOTE_7_OTHER_CURRENT_LIABILITI2
NOTE 7 - OTHER CURRENT LIABILITIES Other Current Liabilities - (Details) (USD $) | Mar. 31, 2014 | Jun. 30, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ' | ' |
Accrued salaries, commissions and payroll taxes | $974 | $711 |
Accrued interest | 117 | 117 |
Litigation accruals | 702 | 809 |
Sales tax payable | 2,927 | 2,859 |
Legal and other professional fees | 491 | 569 |
Accounting fees | 221 | 305 |
Insurance premiums | 255 | 13 |
Interest and penalty - sales tax | 2,483 | 2,322 |
Penalty - 401k plan | 250 | 250 |
Purchase scanners | 450 | ' |
Rent | 57 | 148 |
Other | 738 | 533 |
Total other current liabilities | $9,665 | $8,636 |
NOTE_9_CONTROLLING_AND_NONCONT2
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS - Estimated Fair Values at Acquisition Date - (Details) (USD $) | Mar. 05, 2013 |
In Thousands, unless otherwise specified | |
Business Combinations [Abstract] | ' |
Management fee receivable | $6,667 |
Medical receivables | 7,390 |
Prepaid expenses and other current assets | 10 |
Property and equipment | 14,913 |
Intangible assets | 9,200 |
Goodwill | 1,767 |
Other assets | 333 |
Other current liabilities | -6 |
Long term debt | -274 |
Net assets acquired | $40,000 |
NOTE_9_CONTROLLING_AND_NONCONT3
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS - Fair value of goodwill and estimated useful life - (Details) (USD $) | Mar. 05, 2013 |
In Thousands, unless otherwise specified | |
Fair value of intangible asset | $9,200 |
Non-compete Agreements | ' |
Fair value of intangible asset | 4,100 |
Useful life of intangible asset | '7 years |
Customer Relationships | ' |
Fair value of intangible asset | 3,800 |
Useful life of intangible asset | '20 years |
Developed Software | ' |
Fair value of intangible asset | $1,300 |
Useful life of intangible asset | '5 years |
NOTE_9_CONTROLLING_AND_NONCONT4
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS - Pro forma of HDM Operating Results - (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Total Revenues - Net | $17,040 | $11,642 | $51,481 | $30,766 |
Net Income - Controlling Interests | 1,739 | 1,076 | 6,319 | 3,876 |
Net Income Available to Common Stockholders | 1,625 | 1,005 | 5,907 | 3,621 |
Net Income Available to Class A Non-Voting Preferred Stockholders | 85 | 53 | 307 | 190 |
Net Income Available to Class C Common Stockholders | 29 | 18 | 105 | 65 |
Basic Net Income Per Common Share Available to Common Stockholders | $0.27 | $0.17 | $0.98 | $0.61 |
Diluted Net Income Per Common Share Available to Common Stockholders | $0.26 | $0.17 | $0.96 | $0.60 |
Basic and Diluted Income Per Share - Common C | $0.08 | $0.05 | $0.27 | $0.17 |
Weighted Average Basic Shares Outstanding | 6,022,000 | 5,937,000 | 6,002,000 | 5,921,000 |
Weighted Average Diluted Shares Outstanding | 6,150,000 | 6,065,000 | 6,130,000 | 6,049,000 |
Pro Forma [Member] | ' | ' | ' | ' |
Total Revenues - Net | ' | 15,115 | ' | 51,049 |
Net Income - Controlling Interests | ' | 1,446 | ' | 5,356 |
Net Income Available to Common Stockholders | ' | 1,351 | ' | 5,003 |
Net Income Available to Class A Non-Voting Preferred Stockholders | ' | 71 | ' | 263 |
Net Income Available to Class C Common Stockholders | ' | $24 | ' | $90 |
Basic Net Income Per Common Share Available to Common Stockholders | ' | $0.23 | ' | $0.84 |
Diluted Net Income Per Common Share Available to Common Stockholders | ' | $0.22 | ' | $0.83 |
Basic and Diluted Income Per Share - Common C | ' | $0.06 | ' | $0.23 |
Weighted Average Basic Shares Outstanding | ' | 5,937,000 | ' | 5,922,000 |
Weighted Average Diluted Shares Outstanding | ' | 6,065,000 | ' | 6,049,000 |
Weighted Average Basic and Diluted Shares Outstanding - Class C Common | ' | 383,000 | ' | 383,000 |
NOTE_10_SEGMENT_AND_RELATED_IN2
NOTE 10 - SEGMENT AND RELATED INFORMATION - Segment Information - (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Net revenues from external customers | $17,040 | $11,642 | $51,481 | $30,766 |
Inter-segment net revenues | 495 | 441 | 1,485 | 846 |
(Loss) income from operations | 2,319 | 1,630 | 9,668 | 5,228 |
Depreciation and amortization | 933 | 679 | 2,887 | 1,489 |
Capital expenditures | 212 | 339 | 547 | 677 |
Medical Equipment | ' | ' | ' | ' |
Net revenues from external customers | 3,023 | 3,310 | 8,922 | 10,960 |
Inter-segment net revenues | 495 | 300 | 1,485 | 705 |
(Loss) income from operations | 192 | -286 | 323 | 182 |
Depreciation and amortization | 104 | 126 | 322 | 421 |
Capital expenditures | 114 | 58 | 187 | 166 |
Management Of Diagnostic Imaging Centers | ' | ' | ' | ' |
Net revenues from external customers | 14,017 | 8,332 | 42,559 | 19,806 |
Inter-segment net revenues | 0 | 141 | 0 | 141 |
(Loss) income from operations | 2,127 | 1,916 | 9,345 | 5,046 |
Depreciation and amortization | 829 | 553 | 2,565 | 1,068 |
Capital expenditures | $98 | $281 | $360 | $511 |
NOTE_2_SUMMARY_OF_SIGNIFICANT_4
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details Narrative) | Mar. 31, 2014 | Jun. 30, 2013 |
Accounting Policies [Abstract] | ' | ' |
Shares included upon conversion of Class C Common to calculate a diluted EPS | 128,000 | 128,000 |
NOTE_3_ACCOUNTS_RECEIVABLE_Man
NOTE 3 - ACCOUNTS RECEIVABLE - Management and other Fees Receivable - (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | |
Note 3 - Accounts Receivable - Management And Other Fees Receivable - Details Narrative | ' | ' | ' | ' |
Net revenues derived from no-fault and personal injury protection claims | 50.00% | 51.00% | 50.00% | 47.00% |
Net revenues from management and other fees charged to related PCs | 13.20% | 16.90% | 13.40% | 19.20% |
NOTE_6_OTHER_INTANGIBLE_ASSETS3
NOTE 6 - OTHER INTANGIBLE ASSETS - (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 |
Patents and copyrights | ' | ' | ' | ' |
Amortization of intangible assets | $44 | $42 | $133 | $125 |
Software Development Costs | ' | ' | ' | ' |
Amortization of intangible assets | 104 | 76 | 321 | 226 |
Non-compete Agreements | ' | ' | ' | ' |
Amortization of intangible assets | 146 | 49 | 439 | 49 |
Customer Relationships | ' | ' | ' | ' |
Amortization of intangible assets | $47 | $67 | $139 | $67 |
NOTE_8_STOCKHOLDERS_EQUITY_Det
NOTE 8 - STOCKHOLDERS EQUITY - (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2014 |
Equity [Abstract] | ' | ' |
Common shares issued for costs & expenses (shares) | 15,000 | 35,000 |
Common shares issued for costs & expenses (value) | $110 | $407 |
Common shares issued for compensation (shares) | ' | 11,000 |
Common shares issued for compensation (value) | ' | 86 |
2005 Incentive Stock Option Plan exercised (shares) | ' | 10,000 |
2005 Incentive Stock Option Plan exercised (value) | ' | $31 |
NOTE_9_CONTROLLING_AND_NONCONT5
NOTE 9 - CONTROLLING AND NONCONTROLLING INTERESTS - (Details Narrative) (USD $) | Mar. 05, 2013 |
In Thousands, unless otherwise specified | |
Business Combinations [Abstract] | ' |
HMCA controlling interest | 50.50% |
HMCA contribution to HDM | $20,200 |
Outside investors contribution to HDM | 19,800 |
Capital contribution company borrowed from bank | 14,000 |
Term loan portion from bank | 11,000 |
Revolving credit portion from bank | 3,000 |
Term loan interest rate per annum | 4.75% |
Revolving credit note interest per annum | 4.00% |
Purchase price of scanning center business by HDM from HD | 35,900 |
Purchase price of non-compete agreements by HDM from HD | $4,100 |
NOTE_11_SUPPLEMENTAL_CASH_FLOW1
NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION - (Details Narrative) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Note 11 - Supplemental Cash Flow Information - Details Narrative | ' | ' |
Interest paid | $521 | $198 |
Income Taxes Paid | $255 | $252 |
NOTE_12_COMMITMENTS_AND_CONTIN1
NOTE 12 - COMMITMENTS AND CONTINGENCIES - (Details Narrative) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Lawsuit settlement payable and accrued | $150 |
Tax Obligations | 2,717 |
Tax Interest And Penalties | 2,483 |
Provisions ForTax Penalties | $250 |
NOTE_13_INCOME_TAXES_Details_N
NOTE 13 - INCOME TAXES - (Details Narrative) (USD $) | Mar. 31, 2014 |
In Thousands, unless otherwise specified | |
Income Tax Disclosure [Abstract] | ' |
Net Deferred Tax Asset | $2,936 |
Net Deferred Tax Liability | 462 |
Net Deferred Operating Loss Carryforwards | $142,788 |
NOTE_14_SUBSEQUENT_EVENTS_Deta
NOTE 14 - SUBSEQUENT EVENTS - (Details Narrative) (USD $) | 1-May-14 |
In Thousands, unless otherwise specified | |
Subsequent Events [Abstract] | ' |
Repayment of portion of Class A Stockholders Capital Contribution (value) | $1,100 |
HMCA ownership size of Imperial Management Services (percent) | 91.00% |