FONAR (FONR) 10-Q 12 Nov 20 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Sep. 30, 2020	Nov. 06, 2020
Entity Registrant Name	FONAR CORP
Entity Central Index Key	0000355019
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2021
Current Fiscal Year End Date	--06-30
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity File Number	0-10248
Entity Incorporation State Country Code	DE
Is Entity Interactive Data Current	Yes
Is Entity's Reporting Status Current?	Yes
Is Entity a Small Business	true
Entity Filer Category	Non-accelerated Filer
Is Entity an Emerging Growth Company	false
Trading Symbol	FONR
Security Exchange Name	NASDAQ
Security 12B Title	Common Stock
Entity Shell Company	false
Common Stock
Entity Common Stock, Shares Outstanding		6,447,463
Class B Common Stock
Entity Common Stock, Shares Outstanding		146
Class C Common Stock
Entity Common Stock, Shares Outstanding		382,513
Class A Non-Voting Preferred Stock
Entity Common Stock, Shares Outstanding		313,438

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Current Assets:
Cash and cash equivalents	$ 38,763	$ 36,802
Short term investments	32	32
Accounts receivable - net	4,191	4,313
Account receivable - related parties	102	6
Medical receivables -net	16,293	16,172
Management and other fees receivable -net	29,011	27,438
Management and other fees receivable - related medical practices -net	7,002	6,896
Inventories	1,698	1,649
Costs and estimated earnings in excess of billings on uncompleted contracts	153	153
Income taxes receivable		671
Prepaid expenses and other current assets	1,879	1,758
Total Current Assets	99,124	95,890
Accounts receivable - long term	2,839	2,730
Deferred income tax asset	17,961	18,810
Property and equipment - net	20,904	21,364
Right-of-use Asset - operating lease	30,489	31,392
Right-of-use-asset - financing lease	1,276	1,326
Goodwill	3,985	3,985
Other intangible assets - net	4,036	4,109
Other assets	642	653
Total Assets	181,256	180,259
Current Liabilities:
Current portion of long-term debt and capital leases	169	108
Accounts payable	1,848	1,965
Other current liabilities	7,864	8,185
Unearned revenue on service contracts	4,203	4,105
Unearned revenue on service contracts - related parties	83
Operating lease liability - current portion	3,433	3,370
Financing lease liability - current portion	136	75
Customer deposits	912	855
Total Current Liabilities	18,648	18,663
Long-Term Liabilities:
Unearned revenue on service contracts	2,761	2,656
Deferred Income Tax Liability	234	234
Due to related party medical practices	93	93
Operating lease liability - net of current portion	29,246	30,105
Financing lease liability - net of current portion	1,201	1,251
Long-term debt and capital leases, less current portion	859	865
Other liabilities	161	150
Total Long-Term Liabilities	34,555	35,354
Total Liabilities	53,203	54,017
STOCKHOLDERS' EQUITY:
Paid-in capital in excess of par value	183,076	183,076
Accumulated deficit	(53,707)	(56,215)
Treasury stock, at cost	(675)	(675)
Total Fonar Corporation Stockholder Equity	128,695	126,187
Noncontrolling interests	(642)	55
Total Stockholders' Equity	128,053	126,242
Total Liabilities and Stockholders' Equity	181,256	180,259
Class A Non-Voting Preferred Stock
STOCKHOLDERS' EQUITY:
Preferred stock value
Preferred Stock
STOCKHOLDERS' EQUITY:
Preferred stock value
Common Stock
STOCKHOLDERS' EQUITY:
Common stock value	1	1
Class B Common Stock
STOCKHOLDERS' EQUITY:
Common stock value
Class C Common Stock
STOCKHOLDERS' EQUITY:
Common stock value

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Sep. 30, 2020	Jun. 30, 2020
Class A Non-Voting Preferred Stock
Preferred Stock, Par Value	$ 0.0001	$ 0.0001
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	$ 0.001	$ 0.001
Preferred Stock, Authorized	567,000	567,000
Preferred Stock, Issued
Preferred Stock, Outstanding
Common Stock
Common Stock, Par Value	$ 0.0001	$ 0.0001
Common Stock, Authorized	8,500,000	8,500,000
Common Stock, Issued	6,459,000	6,459,000
Common Stock, Outstanding	6,447,000	6,447,000
Class B Common Stock
Common Stock, Par Value	$ 0.0001	$ 0.0001
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	$ 0.0001	$ 0.0001
Common Stock, Authorized	567,000	567,000
Common Stock, Issued	383,000	383,000
Common Stock, Outstanding	383,000	383,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
REVENUES
Patient fee revenue, net of contractual allowances and discounts	$ 5,091	$ 6,045
Product sales - net	28	192
Service and repair fees - net	1,925	2,064
Service and repair fees - related parties - net	28	28
Management and other fees - net	11,214	11,028
Management and other fees - related medical practices - net	2,693	2,390
Total Revenues - net	20,979	21,747
COSTS AND EXPENSES
Costs related to patient fee revenue	2,521	2,863
Costs related to product sales	132	330
Costs related to service and repair fees	626	750
Costs related to service and repair fees - related parties	9	10
Costs related to management and other fees	5,550	6,005
Costs related to management and other fees - related medical practices	1,428	1,537
Research and development	400	472
Selling, general and administrative	6,163	4,294
Total Costs and Expenses	16,829	16,261
INCOME
Income From Operations	4,150	5,486
Other Income	(140)
Interest Expense	(22)	(21)
Investment Income	112	148
Income Before Provision for Income Taxes and Noncontrolling Interests	4,100	5,613
Provision for Income Taxes	(849)	(1,107)
Net Income	3,251	4,506
Net Income - Noncontrolling Interests	(743)	(1,207)
Net Income - Attributable to FONAR	$ 2,508	$ 3,299
Basic Net Income Per Share	$ 0.39	$ 0.51
Weighted Average Basic Shares Outstanding	6,447	6,432
Common Stock
INCOME
Net Income - Attributable to FONAR	$ 2,355	$ 3,097
Basic Net Income Per Share	$ 0.37	$ 0.48
Diluted Net Income Per Share	$ 0.36	$ 0.47
Weighted Average Basic Shares Outstanding	6,447	6,432
Weighted Average Diluted Shares Outstanding	6,575	6,560
Class A Non-Voting Preferred Stock
INCOME
Net Income - Attributable to FONAR	$ 114	$ 151
Class C Common Stock
INCOME
Net Income - Attributable to FONAR	$ 39	$ 51
Basic Net Income Per Share	$ 0.10	$ 0.13
Diluted Net Income Per Share	0.10	0.13
Basic and Diluted Income Per Share	$ 0.10	$ 0.13
Weighted Average Basic Shares Outstanding	383	383
Weighted Average Diluted Shares Outstanding	383	383
Weighted Average Basic and Diluted Shares Outstanding	383	383

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock	Paid in capital in excess of par value	Accumulated Deficit	Treasury Stock	Noncontrolling Interest	Total
Balance - Beginning, Value at Jun. 30, 2019	$ 1	$ 181,086	$ (64,456)	$ (675)	$ 2,156	$ 118,112
Issuance of common stock (value)		1,990				1,990
Net Income			3,299			3,299
Distributions - noncontrolling					(1,755)	(1,755)
Income - Noncontrolling interests					1,207	1,207
Balance - Ending, Value at Sep. 30, 2019	1	183,076	(61,157)	(675)	1,608	122,854
Balance - Beginning, Value at Jun. 30, 2020	1	183,076	(56,215)	(675)	55	126,242
Issuance of common stock (value)
Net Income			2,508			2,508
Distributions - noncontrolling					(1,440)	(1,440)
Income - Noncontrolling interests					743	743
Balance - Ending, Value at Sep. 30, 2020	$ 1	$ 183,076	$ (53,707)	$ (675)	$ (642)	$ 128,053

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash Flows from Operating Activities:
Net income	$ 3,251	$ 4,506
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	968	995
Amortization on right-of-use assets	953	819
Provision (Recovery) for bad debts	2,227	(239)
Stock issued for costs and expense		1,991
Deferred income tax - net	849	1,004
Abandoned patents	1
(Increase) decrease in operating assets, net:
Accounts, medical and management fee receivable(s)	(4,109)	(1,188)
Notes receivable	14
Costs and estimated earnings in excess of billings on uncompleted contracts		218
Inventories	(49)	7
Income tax receivable	671
Prepaid expenses and other current assets	(125)	233
Other assets		(44)
Increase (decrease) in operating liabilities, net:
Accounts payable	(117)	(345)
Other current liabilities	(36)	(2,889)
Operating lease liabilities	(796)	(750)
Financing lease liability	12
Customer advances	58	(62)
Other liabilities	10	(13)
Net cash provided by operating activities	3,782	4,243
Cash Flows from Investing Activities:
Purchases of property and equipment	(415)	(2,411)
Purchase of short term investment		(119)
Cost of patents	(20)	(38)
Net cash used in investing activities	(435)	(2,568)
Cash Flows from Financing Activities:
Repayment of borrowings and capital lease obligations	(9)	(8)
Proceeds from debt	63
Distributions to noncontrolling interests	(1,440)	(1,755)
Net cash used in financing activities	(1,386)	(1,763)
Net Increase (decrease) in Cash and Cash Equivalents	1,961	(88)
Cash and Cash Equivalents - Beginning of Period	36,802	13,882
Cash and Cash Equivalents - End of Period	$ 38,763	$ 13,794

NOTE 1 - DESCRIPTION OF BUSINES

NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	3 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Effective July 1, 2015, the Company restructured the corporate organization of the management of diagnostic imaging centers segment of our business. The reorganization was structured to more completely integrate the operations of Health Management Corporation of America and HDM. Imperial contributed all of its assets (which were utilized in the business of Health Management Corporation of America) to HDM and received a 24.2% interest in HDM. Health Management Corporation of America retained a direct ownership interest of 45.8% in HDM, and the original investors in HDM retained a 30.0% ownership interest in the newly expanded HDM. The entire management of diagnostic imaging centers business segment is now being conducted by HDM, operating under the name “Health Management Company of America”. 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 months ended September 30, 2020, are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021. 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 1, 2020 for the fiscal year ended June 30, 2020. During March 2020 the global pandemic of COVID-19 has caused turbulence and uncertainty in the United States and international markets and economies which has adversely effected our workforce, liquidity, financial conditions, revenues, profitability and business operations. Generally COVID-19 had caused us to require that much of our workforce work from home and has restricted the ability of our personnel to travel for marketing purposes or to service our customers. The Company experienced a sudden drop in scan volume for a short term period and while the Company is not back to pre-COVID-19 levels, the volume has risen. At the end of fiscal year ending June 30, 2020, the Company was able to enact certain decisions to allow the Company to survive during the global pandemic and from further losses or additional decreases in scan volume. The Company immediately enacted wide scale furloughs, deferment of up to 50% of management salaries, halted variable compensation plans and rent deferrals we negotiated with the majority of all landlords. The Company also received some government stimulus funds from the Paycheck Protection Program (“PPP”) and Medicare advances/stimulus payments. Although we are unable to predict if there will be additional consequences on our operations from the continuing global pandemic of COVID-19, the Company believes with positive cash flows, low debt and cash on hand, it will be able to continue operations going forward.

NOTE 2 - SUMMARY OF SIGNIFICANT

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
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. Revenues On July 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as topic 606 (“ASC 606”). The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgments employed in the determination of revenue. Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals. Earnings Per Share Basic earnings per share (“EPS”) is computed based upon the weighted average number of shares of 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 income per share and applied the if converted method in calculating diluted income per share for the three months ended September 30, 2020 and 2019. 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 months ended September 30, 2020 and 2019, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common. Earnings Per Share Three months ended Three months ended Total Common Stock Class C Common Total Common Stock Class C Common Basic Numerator: $ 2,508 $ 2,355 $ 39 $ 3,299 $ 3,097 $ 51 Denominator: Weighted average shares outstanding 6,447 6,447 383 6,432 6,432 383 Basic income per common share $ 0.39 $ 0.37 $ 0.10 $ 0.51 $ 0.48 $ 0.13 Diluted Denominator: 6,447 383 6,432 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,575 383 6,560 383 Diluted income per common share $ 0.36 $ 0.10 $ 0.47 $ 0.13 Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company adopted the Standard on July 1, 2020 and the impact of adopting this guidance will have no material impact on our Consolidated Financial Statements. FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of September 30, 2020 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 2020 or 2019, and it does not believe that any of those pronouncements will have a significant impact on our consolidated condensed 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, M

NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE	3 Months Ended
	Sep. 30, 2020
Receivables [Abstract]
NOTE 3 - ACCOUNTS RECEIVABLE. MEDICAL RECEIVABLES AND MANAGEMENT AND OTHER FEES RECEIVABLE (USD $)	NOTE 3 – ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE Receivables, net is comprised of the following at September 30, 2020, and June 30, 2020: September 30, 2020 Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 4,706 $ 515 $ 4,191 Accounts receivable - related party $ 102 — $ 102 Medical receivable $ 16,293 $ — $ 16,293 Management and other fees receivable $ 41,844 $ 12,833 $ 29,011 Management and other fees receivable from related medical practices (“PC’s”) $ 10,782 $ 3,780 $ 7,002 June 30, 2020 Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 4,828 $ 515 $ 4,313 Accounts receivable - related party $ 6 — $ 6 Notes receivable $ 16,172 $ — $ 16,172 Medical receivable $ 16,172 $ — $ 16,172 Management and other fees receivable $ 38,501 $ 11,063 $ 27,438 Management and other fees receivable from related medical practices (“PC’s”) $ 10,218 $ 3,322 $ 6,896 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. Long Term Accounts Receivable The Company will generate revenue from long-term, non-cancellable contracts to provide service and repair services. Future revenue to be recognized over the following four years at September 30, 2020 are as follows: 2022 $ 879 2023 827 2024 827 2025 228 Total $ 2,761 Medical Receivables 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 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 66% and 67% of the PCs’ net revenues for the three months ended September 30, 2020 and 2019, 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 12.8% and 11.0% of the consolidated net revenues for the three months ended September 30, 2020 and 2019, 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. Additional Company managed entities also operate under a guaranty agreement, pursuant to which management fees are payable to the Company. The Company’s patient fee revenue, net of contractual allowances and discounts for the three months ended September 30, 2020 and 2019 are summarized in the following table. For the Three Months Ended 2020 2019 Commercial Insurance/ Managed Care $ 946 $ 1,354 Medicare/Medicaid 197 266 Workers’ Compensation/Personal Injury 3,387 4,294 Other 561 131 Patient Fee Revenue, net of contractual allowances and discounts $ 5,091 $ 6,045

NOTE 4 - OPERATING & FINANCING

NOTE 4 - OPERATING & FINANCING LEASES	3 Months Ended
	Sep. 30, 2020
Leases [Abstract]
NOTE 4 - OPERATING & FINANCING LEASES	NOTE 4 – OPERATING & FINANCING LEASES During February 2016, FAS issued ASU 2016-02, Leases (Topic 842). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based upon the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Lease with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The standard was effective for us beginning July 1, 2019. We have elected the optional transition method to apply the standard as of the effective date and therefore, we will not apply the standard to the comparative periods presented in the consolidated financial statements. We have also elected the transition package of the practical expedients permitted within the standard which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and indirect costs. The adoption of this guidance had a material impact on the Company’s balance sheet by virtue of including the present value of its future operating lease payments as a liability of $33.3 million and related right-to-use lease assets as of July 1, 2019. At the time of adoption of this guidance we had no significant financing leases. The Company accounts for its various operating leases in accordance with Accounting Standards Codification (‘ASC’) 842 – Lease, as updated by ASU 2016-02. At the inception of a lease, the Company recognizes right-of-use lease assets and related lease liabilities measured at present value of future lease payments on its balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. Our most common initial term varies in length from 2 to 10 years. Including renewal options negotiated with the landlord, we have a total span of 2 to 16 years at the facilities we lease. The Company reviewed its contracts with vendors and customers, determining that its right-to-use lease assets consisted of only office space operating leases. In determining the right-to-use lease assets and liabilities, the Company did recognize lease extension options which the Company feels would be reasonably exercised. Also included in other current assets is a $202,268 receivable from a landlord for tenant improvements. Our incremental borrowing rate (“IBR”) used to discount the stream of operating lease payments is closely related to the interest rates available to the Company. A reconciliation of operating and financing lease payments undiscounted cash flows to lease liabilities recognized as of September 30, 2020 is as follows: Year Ending Operating Lease Financing Lease Payments 2021 $ 5,045 $ 122 2022 4,847 244 2023 4,698 244 2024 4,485 244 2025 4,390 244 Thereafter 18,545 408 Present value discount (9,331 ) (169 ) Total lease liability $ 32,679 $ 1,337

NOTE 5 - INVENTORIES

NOTE 5 - INVENTORIES	3 Months Ended
	Sep. 30, 2020
Inventory Disclosure [Abstract]
NOTE 5 - INVENTORIES	NOTE 5 - INVENTORIES Inventories included in the accompanying condensed consolidated balance sheets consist of the following: September 30, 2020 June 30, 2020 Purchased parts, components and supplies $ 1,537 $ 1,544 Work-in-process 161 105 TOTAL INVENTORIES $ 1,698 $ 1,649

NOTE 6 - COSTS AND ESTIMATED EA

NOTE 6 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS	3 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
NOTE 6 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS	NOTE 6 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS Information relating to uncompleted contracts is as follows: September 30, June 30, Costs incurred on uncompleted contracts $ 448 $ 448 Estimated earnings 309 309 Subtotal 757 757 Less: Billings to date 604 604 Total Costs and estimated earnings in excess of billings on uncompleted contracts $ 153 $ 153

NOTE 7 - OTHER INTANGIBLE ASSET

NOTE 7 - OTHER INTANGIBLE ASSETS	3 Months Ended
	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
NOTE 7 - OTHER INTANGIBLE ASSETS	NOTE 7 – OTHER INTANGIBLE ASSETS Other intangible assets, net of accumulated amortization, in the accompanying condensed consolidated balance sheets consist of the following: September 30, June 30, Capitalized software development costs $ 7,005 $ 7,005 Patents and copyrights 5,101 5,082 Non-compete 4,100 4,100 Customer relationships 3,800 3,800 Gross Other intangible assets 20,006 19,987 Less: Accumulated amortization 15,970 15,878 Other Intangible Assets $ 4,036 $ 4,109 Amortization of patents and copyrights for the three months ended September 30, 2020 and 2019 amounted to $45 and $47, respectively. Amortization of non-compete for the three months ended September 30, 2020 and 2019 amounted to $0 and $146, respectively. Amortization of customer relationships for the three months ended September 30, 2020 and 2019 amounted to $48 and $48, respectively.

NOTE 8 - OTHER CURRENT LIABILIT

NOTE 8 - OTHER CURRENT LIABILITIES	3 Months Ended
	Sep. 30, 2020
Other Liabilities, Current [Abstract]
NOTE 8 - OTHER CURRENT LIABILITIES	NOTE 8 – OTHER CURRENT LIABILITIES Other current liabilities in the accompanying condensed consolidated balance sheets consist of the following: September 30, June 30, Accrued salaries, commissions and payroll taxes $ 4,755 $ 4,492 Litigation accruals 115 443 Sales tax payable 1,362 1,353 Legal and other professional fees 105 113 Accounting fees 150 120 Self-funded health insurance reserve 4 87 Accrued interest and penalty 880 877 Other 493 700 Other Current Liabilities $ 7,864 $ 8,185

NOTE 9 - SEGMENT AND RELATED IN

NOTE 9 - SEGMENT AND RELATED INFORMATION	3 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
NOTE 9 - SEGMENT AND RELATED INFORMATION	NOTE 9 - 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, 2020. 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 For the three months ended Sept. 30, 2020 Net revenues from external customers $ 1,981 $ 18,998 $ 20,979 Inter-segment net revenues $ 219 $ — $ 219 (Loss) Income from operations $ (561 ) $ 4,711 $ 4,150 Depreciation and amortization $ 67 $ 901 $ 968 Capital expenditures $ 20 $ 415 $ 435 For the three months ended Sept. 30, 2019 Net revenues from external customers $ 2,284 $ 19,463 $ 21,747 Inter-segment net revenues $ 219 $ — $ 219 (Loss) Income from operations $ (736 ) $ 6,222 $ 5,486 Depreciation and amortization $ 91 $ 904 $ 995 Capital expenditures $ 1,601 $ 848 $ 2,449

NOTE 10 - SUPPLEMENTAL CASH FLO

NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION	3 Months Ended
	Sep. 30, 2020
Supplemental Cash Flow Elements [Abstract]
NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION	NOTE 10 – SUPPLEMENTAL CASH FLOW INFORMATION During the three months ended September 30, 2020 and September 30, 2019, the Company paid $19 and $8 for interest, respectively. During the three months ended September 30, 2020 and September 30, 2019, the Company paid $145 and $228 for income taxes, respectively.

NOTE 11 - COMMITMENTS AND CONTI

NOTE 11 - COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
NOTE 11 - COMMITMENTS AND CONTINGENCIES	NOTE 11 – 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, 2020. Other Matters In September 2020, the Company entered into a settlement agreement with an unrelated third party for a claim made during March 2018 which was scheduled for arbitration. The settlement was for $1.2 million of which $900 was paid by the Company’s insurance in September 2020. The Company paid the remaining balance of $315 in September 2020. The Company is also delinquent in filing sales tax returns for certain states, for which the Company has transacted business. As of September 30, 2020, the Company has recorded tax obligations of approximately $1,362 plus interest and penalties of approximately $835. The Company is in the process of determining the regulatory requirements in order to become compliant. The Company maintains a self-funded health insurance program with a stop-loss umbrella policy with a third party insurer to limit the maximum potential liability for individual claims to $110 per person and for a maximum potential claim liability based on member enrollment. With respect to this program, the Company considers historical and projected medical utilization data when estimating its health insurance program liability and related expense. As of September 30, 2020 and June 30, 2020, the Company had approximately $4 and $87, respectively, in reserve for its self-funded health insurance programs. The reserves are included in “Other current liabilities” in the condensed consolidated balance sheets. The Company regularly analyzes its reserves for incurred but not reported claims, and for reported but not paid claims related to its reinsurance and self-funded insurance programs. The Company believes its reserves are adequate. However, significant judgment is involved in assessing these reserves such as assessing historical paid claims, average lags between the claims’ incurred date, reported dates and paid dates, and the frequency and severity of claims. There may be differences between actual settlement amounts and recorded reserves and any resulting adjustments are included in expense once a probable amount is known. There were no significant adjustments recorded in the periods covered by this report.

NOTE 12 - INCOME TAXES

NOTE 12 - INCOME TAXES	3 Months Ended
	Sep. 30, 2020
Income Tax Disclosure [Abstract]
NOTE 12 - INCOME TAXES	NOTE 12 - INCOME TAXES In accordance with ASC 740-270, Income Taxes – Interim Reporting, the Company is required at the end of each interim period to determine the best estimate of its annual effective tax rate and apply that rate to year-to-date ordinary income or loss. The resulting tax expense (or benefit) is adjusted for the tax effect of specific events, if any, required to be discretely recognized in the interim period as they occur. For the three months ended September 30, 2020 and 2019, the Company recorded income tax expense of $849 in 2020 as compared to $1,107 in 2019. The 2020 provision is comprised of a current income tax component of $0 and a deferred income tax component of $849. Obligations for any liability associated with the current income tax provision, has been reduced, primarily resulting from the benefits and utilization of net operating loss carryforwards. 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. The Company believes there are no uncertain tax positions in prior years tax filings and therefore it has not recorded a liability for unrecognized tax benefits. 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 2016. The Company recorded a deferred tax asset of $17,961 and a deferred tax liability of $234 as of September 30, 2020, primarily relating to net operating loss carryforwards of approximately $49,925 available to offset future taxable income through 2031. The net operating losses begin to expire in 2023 for federal tax and state income tax purposes. On March 27, 2020 Congress enacted the CARES Act (Coronavirus Aid, Relief and Economic Security Act). The Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding prior and future operation losses, temporary changes to prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections to prior tax legislation for tax depreciation of certain qualified improvement property and enhanced recoverability of AMT tax credits. At the present time, the only impact of the CARES Act to the Company is allowing a full reimbursement of $1,342 of tax credits relating to the alternative minimum tax credits. The Company received the first half payment in June 2020. The balance of alternative minimum tax credits of $671 was received in July 2020. Previously, these credits were to be refunded over a 3 year period. As we continue to monitor tax implications of the CARES Act and other state and federal stimulus tax legislation, we may make adjustments to our estimates and record additional amounts for tax assets and liabilities. Future ownership changes as determined under Section 382 of the Internal Revenue code could further limit the utilization of net operating loss carryforwards. As of September 30, 2020, no such changes in ownership have occurred. 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 or when such net operating losses can be utilized. The Company considers projected future taxable income, the regulatory environment of the industry and tax planning strategies in making this assessment. At present, the Company believes that it is more likely than not that the benefits from certain deferred tax asset carryforwards, will not all be fully realized. In recognition of this inherent risk, a valuation allowance was established for the partial value of the deferred tax asset, which principally related to research and development tax credits. A valuation allowance will be maintained until sufficient positive evidence exists to support the reversal of the remainder of the valuation.

NOTE 13 - SUBSEQUENT EVENTS

NOTE 13 - SUBSEQUENT EVENTS	3 Months Ended
	Sep. 30, 2020
Subsequent Events [Abstract]
NOTE 13 - SUBSEQUENT EVENTS	NOTE 13 – SUBSEQUENT EVENTS The Company has evaluated events that occurred subsequent to September 30, 2020 and through the date the condensed consolidated financial statements were issued.

NOTE 2 - SUMMARY OF SIGNIFICA_2

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
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.
Revenue	Revenues On July 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as topic 606 (“ASC 606”). The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgments employed in the determination of revenue. Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.
Earnings Per Share	Earnings Per Share Basic earnings per share (“EPS”) is computed based upon the weighted average number of shares of 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 income per share and applied the if converted method in calculating diluted income per share for the three months ended September 30, 2020 and 2019. 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 months ended September 30, 2020 and 2019, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common. Earnings Per Share Three months ended Three months ended Total Common Stock Class C Common Total Common Stock Class C Common Basic Numerator: $ 2,508 $ 2,355 $ 39 $ 3,299 $ 3,097 $ 51 Denominator: Weighted average shares outstanding 6,447 6,447 383 6,432 6,432 383 Basic income per common share $ 0.39 $ 0.37 $ 0.10 $ 0.51 $ 0.48 $ 0.13 Diluted Denominator: 6,447 383 6,432 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,575 383 6,560 383 Diluted income per common share $ 0.36 $ 0.10 $ 0.47 $ 0.13
Recent Accounting Pronouncements	Recent Accounting Pronouncements In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350). The amendments in this update simplify the test for goodwill impairment by eliminating Step 2 from the impairment test, which required the entity to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities following the procedure that would be required in determining fair value of assets acquired and liabilities assumed in a business combination. The amendments in this update are effective for public companies for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company adopted the Standard on July 1, 2020 and the impact of adopting this guidance will have no material impact on our Consolidated Financial Statements. FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of September 30, 2020 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 2020 or 2019, and it does not believe that any of those pronouncements will have a significant impact on our consolidated condensed 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 SIGNIFICA_3

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Sep. 30, 2020
Accounting Policies [Abstract]
Earnings Per Share	Earnings Per Share Three months ended Three months ended Total Common Stock Class C Common Total Common Stock Class C Common Basic Numerator: $ 2,508 $ 2,355 $ 39 $ 3,299 $ 3,097 $ 51 Denominator: Weighted average shares outstanding 6,447 6,447 383 6,432 6,432 383 Basic income per common share $ 0.39 $ 0.37 $ 0.10 $ 0.51 $ 0.48 $ 0.13 Diluted Denominator: 6,447 383 6,432 383 Convertible Class C Stock 128 — 128 — Total Denominator for diluted earnings per share 6,575 383 6,560 383 Diluted income per common share $ 0.36 $ 0.10 $ 0.47 $ 0.13

NOTE 3 - ACCOUNTS RECEIVABLE,_2

NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE (Tables)	3 Months Ended
	Sep. 30, 2020
Receivables [Abstract]
Summary of Allowance For Doubtful Accounts	Receivables, net is comprised of the following at September 30, 2020, and June 30, 2020: September 30, 2020 Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 4,706 $ 515 $ 4,191 Accounts receivable - related party $ 102 — $ 102 Medical receivable $ 16,293 $ — $ 16,293 Management and other fees receivable $ 41,844 $ 12,833 $ 29,011 Management and other fees receivable from related medical practices (“PC’s”) $ 10,782 $ 3,780 $ 7,002 June 30, 2020 Gross Receivable Allowance for doubtful accounts Net Accounts receivable $ 4,828 $ 515 $ 4,313 Accounts receivable - related party $ 6 — $ 6 Notes receivable $ 16,172 $ — $ 16,172 Medical receivable $ 16,172 $ — $ 16,172 Management and other fees receivable $ 38,501 $ 11,063 $ 27,438 Management and other fees receivable from related medical practices (“PC’s”) $ 10,218 $ 3,322 $ 6,896
Receivables - Non Current - net	Future revenue to be recognized over the following four years at September 30, 2020 are as follows: 2022 $ 879 2023 827 2024 827 2025 228 Total $ 2,761
Patient fee revenue - net	The Company’s patient fee revenue, net of contractual allowances and discounts for the three months ended September 30, 2020 and 2019 are summarized in the following table. For the Three Months Ended 2020 2019 Commercial Insurance/ Managed Care $ 946 $ 1,354 Medicare/Medicaid 197 266 Workers’ Compensation/Personal Injury 3,387 4,294 Other 561 131 Patient Fee Revenue, net of contractual allowances and discounts $ 5,091 $ 6,045

NOTE 4 - OPERATING & FINANCIN_2

NOTE 4 - OPERATING & FINANCING LEASES (Tables)	3 Months Ended
	Sep. 30, 2020
Leases [Abstract]
Lease, Liability, Maturity	A reconciliation of operating and financing lease payments undiscounted cash flows to lease liabilities recognized as of September 30, 2020 is as follows: Year Ending Operating Lease Financing Lease Payments 2021 $ 5,045 $ 122 2022 4,847 244 2023 4,698 244 2024 4,485 244 2025 4,390 244 Thereafter 18,545 408 Present value discount (9,331 ) (169 ) Total lease liability $ 32,679 $ 1,337

NOTE 5 - INVENTORIES (Tables)

NOTE 5 - INVENTORIES (Tables)	3 Months Ended
	Sep. 30, 2020
Inventory Disclosure [Abstract]
Inventories	Inventories included in the accompanying condensed consolidated balance sheets consist of the following: September 30, 2020 June 30, 2020 Purchased parts, components and supplies $ 1,537 $ 1,544 Work-in-process 161 105 TOTAL INVENTORIES $ 1,698 $ 1,649

NOTE 6 - COSTS AND ESTIMATED _2

NOTE 6 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS (Tables)	3 Months Ended
	Sep. 30, 2020
Notes to Financial Statements
Information relating to uncompleted contracts	Information relating to uncompleted contracts is as follows: September 30, June 30, Costs incurred on uncompleted contracts $ 448 $ 448 Estimated earnings 309 309 Subtotal 757 757 Less: Billings to date 604 604 Total Costs and estimated earnings in excess of billings on uncompleted contracts $ 153 $ 153

NOTE 7 - OTHER INTANGIBLE ASS_2

NOTE 7 - OTHER INTANGIBLE ASSETS (Tables)	3 Months Ended
	Sep. 30, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Other intangible assets - net	Other intangible assets, net of accumulated amortization, in the accompanying condensed consolidated balance sheets consist of the following: September 30, June 30, Capitalized software development costs $ 7,005 $ 7,005 Patents and copyrights 5,101 5,082 Non-compete 4,100 4,100 Customer relationships 3,800 3,800 Gross Other intangible assets 20,006 19,987 Less: Accumulated amortization 15,970 15,878 Other Intangible Assets $ 4,036 $ 4,109

NOTE 8 - OTHER CURRENT LIABIL_2

NOTE 8 - OTHER CURRENT LIABILITIES (Tables)	3 Months Ended
	Sep. 30, 2020
Other Liabilities, Current [Abstract]
Other current liabilities	Other current liabilities in the accompanying condensed consolidated balance sheets consist of the following: September 30, June 30, Accrued salaries, commissions and payroll taxes $ 4,755 $ 4,492 Litigation accruals 115 443 Sales tax payable 1,362 1,353 Legal and other professional fees 105 113 Accounting fees 150 120 Self-funded health insurance reserve 4 87 Accrued interest and penalty 880 877 Other 493 700 Other Current Liabilities $ 7,864 $ 8,185

NOTE 9 - SEGMENT AND RELATED _2

NOTE 9 - SEGMENT AND RELATED INFORMATION (Tables)	3 Months Ended
	Sep. 30, 2020
Segment Reporting [Abstract]
Segment information	Summarized financial information concerning the Company’s reportable segments is shown in the following table: Medical Management Totals For the three months ended Sept. 30, 2020 Net revenues from external customers $ 1,981 $ 18,998 $ 20,979 Inter-segment net revenues $ 219 $ — $ 219 (Loss) Income from operations $ (561 ) $ 4,711 $ 4,150 Depreciation and amortization $ 67 $ 901 $ 968 Capital expenditures $ 20 $ 415 $ 435 For the three months ended Sept. 30, 2019 Net revenues from external customers $ 2,284 $ 19,463 $ 21,747 Inter-segment net revenues $ 219 $ — $ 219 (Loss) Income from operations $ (736 ) $ 6,222 $ 5,486 Depreciation and amortization $ 91 $ 904 $ 995 Capital expenditures $ 1,601 $ 848 $ 2,449

NOTE 1 - DESCRIPTION OF BUSIN_2

NOTE 1 - DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) - Health Diagnostics Management LLC (HDM)	Jul. 01, 2015
The ownership interest of Imperial Management Services after reorganization of newly expanded HDM (percent).	24.20%
The ownership interest of Health Management Corporation of America after reorganization of newly expanded HDM (percent).	45.80%
The ownership interest of the original investors of HDM after reorganization of newly expanded HDM (percent).	30.00%

NOTE 2 - SUMMARY OF SIGNIFICA_4

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Basic Numerator: Net income available to common stockholders	$ 2,508	$ 3,299
Basic Denominator: Weighted average shares outstanding	6,447	6,432
Basic income per common share	$ 0.39	$ 0.51
Shares included upon conversion of Class C Common to calculate a diluted EPS	128	128
Common Stock
Basic Numerator: Net income available to common stockholders	$ 2,355	$ 3,097
Basic Denominator: Weighted average shares outstanding	6,447	6,432
Basic income per common share	$ 0.37	$ 0.48
Shares included upon conversion of Class C Common to calculate a diluted EPS	128	128
Total Denominator for diluted earnings per share	6,575	6,560
Diluted income per common share	$ 0.36	$ 0.47
Class C Common Stock
Basic Numerator: Net income available to common stockholders	$ 39	$ 51
Basic Denominator: Weighted average shares outstanding	383	383
Basic income per common share	$ 0.10	$ 0.13
Shares included upon conversion of Class C Common to calculate a diluted EPS
Total Denominator for diluted earnings per share	383	383
Diluted income per common share	$ 0.10	$ 0.13

NOTE 2 - SUMMARY OF SIGNIFICA_5

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - shares shares in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Accounting Policies [Abstract]
Shares included upon conversion of Class C Common to calculate a diluted EPS.	128	128

NOTE 3 - ACCOUNTS RECEIVABLE,_3

NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - Receivables, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Accounts receivable	$ 4,191	$ 4,313
Accounts receivable - Related party	102	6
Medical Receivables	16,293	16,172
Notes receivable		16,172
Management and other fees receivable	29,011	27,438
Management and other fees receivable from related medical practices ("PC's")	7,002	6,896
Gross Receivable
Accounts receivable	4,706	4,828
Accounts receivable - Related party	102	6
Medical Receivables	16,293	16,172
Notes receivable		16,172
Management and other fees receivable	41,844	38,501
Management and other fees receivable from related medical practices ("PC's")	10,782	10,218
Allowance for Doubtful Accounts
Accounts receivable	515	515
Accounts receivable - Related party	0	0
Medical Receivables	0	0
Notes receivable		0
Management and other fees receivable	12,833	11,063
Management and other fees receivable from related medical practices ("PC's")	$ 3,780	$ 3,322

NOTE 3 - ACCOUNTS RECEIVABLE,_4

NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE & MANAGEMENT & OTHER FEES RECEIVABLE - Long Term Accounts Receivable (Details) $ in Thousands	Sep. 30, 2020USD ($)
Receivables, Long-term Contracts or Programs [Abstract]
2022	$ 879
2023	827
2024	827
2025	228
Total	$ 2,761

NOTE 3 - ACCOUNTS RECEIVABLE,_5

NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - Patient Fees Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Patient fee revenue, net of contractual allowances and discounts	$ 5,091	$ 6,045
Commercial Insurance / Managed Care
Patient fee revenue, net of contractual allowances and discounts	946	1,354
Medicare/Medicaid
Patient fee revenue, net of contractual allowances and discounts	197	266
Workers Compensation/Personal Injury
Patient fee revenue, net of contractual allowances and discounts	3,387	4,294
Other
Patient fee revenue, net of contractual allowances and discounts	$ 561	$ 131

NOTE 3 - ACCOUNTS RECEIVABLE,_6

NOTE 3 - ACCOUNTS RECEIVABLE, MEDICAL RECEIVABLE AND MANAGEMENT AND OTHER FEES RECEIVABLE - (Details Narrative)	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Note 3 - Accounts Receivable Medical Receivable And Management And Other Fees Receivable -
Percentage of PC's net revenue derived from no-fault and personal injury protection claims	66.00%	67.00%
Percentage of consolidated net revenue from management fees charged to related party medical practices	12.80%	11.00%

NOTE 4 - OPERATING & FINANCIN_3

NOTE 4 - OPERATING & FINANCING LEASES (Details) $ in Thousands	Sep. 30, 2020USD ($)
Operating Lease
2021	$ 5,045
2022	4,847
2023	4,698
2024	4,485
2025	4,390
Thereafter	18,545
Present Value discount	(9,331)
Total lease liability	32,679
Financing Lease
2021	122
2022	244
2023	244
2024	244
2025	244
Thereafter	408
Present Value discount, Financing Lease	(169)
Total lease liability	$ 1,337

NOTE 4 - OPERATING & FINANCIN_4

NOTE 4 - OPERATING & FINANCING LEASES (Details Narrative)	3 Months Ended
	Sep. 30, 2020USD ($)
Leases [Abstract]
Receivable from landlord for tenant improvements	$ 202,268,000
Operating lease payments	$ 33,300,000

NOTE 5 - INVENTORIES (Details)

NOTE 5 - INVENTORIES (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Inventory Disclosure [Abstract]
Purchased parts, components and supplies	$ 1,537	$ 1,544
Work-in-process	161	105
Total inventories	$ 1,698	$ 1,649

NOTE 6 - COSTS AND ESTIMATED _3

NOTE 6 - COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS - Information relating to uncompleted contracts (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Notes to Financial Statements
Costs incurred on uncompleted contracts	$ 448	$ 448
Estimated earnings	309	309
Costs and estimated earnings on uncompleted contracts	757	757
Less: Billings to date	604	604
Total costs and estimated earnings in excess of billings on uncompleted contracts	$ 153	$ 153

NOTE 7 - OTHER INTANGIBLE ASS_3

NOTE 7 - OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Gross other intangible assets	$ 20,006	$ 19,987
Less: Accumulated amortization	15,970	15,878
Other intangible assets-net	4,036	4,109
Capitalized software development costs
Gross other intangible assets	7,005	7,005
Patents and copyrights
Gross other intangible assets	5,101	5,082
Non-compete
Gross other intangible assets	4,100	4,100
Customer relationships
Gross other intangible assets	$ 3,800	$ 3,800

NOTE 7 - OTHER INTANGIBLE ASS_4

NOTE 7 - OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Patents and copyrights
Amortization of intangible assets	$ 45	$ 47
Non-compete
Amortization of intangible assets	0	146
Customer relationships
Amortization of intangible assets	$ 48	$ 48

NOTE 8 - OTHER CURRENT LIABIL_3

NOTE 8 - OTHER CURRENT LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Other Liabilities, Current [Abstract]
Accrued salaries, commissions and payroll taxes	$ 4,755	$ 4,492
Litigation accruals	115	443
Sales tax payable	1,362	1,353
Legal and other professional fees	105	113
Accounting fees	150	120
Self-funded health insurance reserve	4	87
Accrued interest and penalty	880	877
Other	493	700
Other current liabilities	$ 7,864	$ 8,185

NOTE 9 - SEGMENT AND RELATED _3

NOTE 9 - SEGMENT AND RELATED INFORMATION - Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Net revenues from external customers	$ 20,979	$ 21,747
Inter-segment net revenues	219	219
(Loss) Income from operations	4,150	5,486
Depreciation and amortization	968	995
Capital expenditures	435	2,449
Medical Equipment
Net revenues from external customers	1,981	2,284
Inter-segment net revenues	219	219
(Loss) Income from operations	(561)	(736)
Depreciation and amortization	67	91
Capital expenditures	20	1,601
Management Of Diagnostic Imaging Centers
Net revenues from external customers	18,998	19,463
Inter-segment net revenues
(Loss) Income from operations	4,711	6,222
Depreciation and amortization	901	904
Capital expenditures	$ 415	$ 848

NOTE 10 - SUPPLEMENTAL CASH F_2

NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION ($) (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Supplemental Cash Flow Elements [Abstract]
Interest paid	$ 19	$ 8
Income taxes paid	$ 145	$ 228

NOTE 11 - COMMITMENTS AND CON_2

NOTE 11 - COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Recorded tax obligations	$ 1,362
Tax interest and penalties	835
Maximum limit for individual claims under stop-loss umbrella policy for health insurance	110
Self-funded health insurance reserve	$ 4	$ 87
Litigation settelement description	In September 2020, the Company entered into a settlement agreement with an unrelated third party for a claim made during March 2018 which was scheduled for arbitration. The settlement was for $1.2 million of which $900 was paid by the Company’s insurance in September 2020. The Company paid the remaining balance of $315 in September 2020.

NOTE 12 - INCOME TAXES (Details

NOTE 12 - INCOME TAXES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income tax expense	$ 849	$ 1,107
Income tax component - current	0
Income tax component - deferred	849
Deferred tax assets	17,961
Deferred tax liability	234
Net operating loss (NOL) carryforwards available to offset future taxable income	$ 49,925
Reimbursement of alternative minimum tax credits description	Company is allowing a full reimbursement of $1,342 of tax credits relating to the alternative minimum tax credits. The Company received the first half payment in June 2020. The balance of alternative minimum tax credits of $671 was received in July 2020. Previously, these credits were to be refunded over a 3 year period.