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<SEC-DOCUMENT>0000355019-02-000026.txt : 20021023
<SEC-HEADER>0000355019-02-000026.hdr.sgml : 20021023
<ACCEPTANCE-DATETIME>20021022175322
ACCESSION NUMBER:		0000355019-02-000026
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20021023

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FONAR CORP
		CENTRAL INDEX KEY:			0000355019
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-SPECIALTY OUTPATIENT FACILITIES, NEC [8093]
		IRS NUMBER:				112464137
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-100677
		FILM NUMBER:		02795426

	BUSINESS ADDRESS:	
		STREET 1:		110 MARCUS DR
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
		BUSINESS PHONE:		5166942929

	MAIL ADDRESS:	
		STREET 1:		110 MARCUS DRIVE
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>s3.txt
<TEXT>
              As filed with the Securities and Exchange Commission
                               On October 22, 2002
                                Registration No.

                       SECURITIES AND EXCHANGE COMMISSION

                                    FORM S-3

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                FONAR CORPORATION

             (Exact name of registrant as specified in its charter)


     Delaware                           3845                        11-2464137
- ----------------                 ----------------                --------------
(State or  other                 Primary Standard                    (I.R.S.
jurisdiction  of                    Industrial                      Employer
incorporation or                  Classification                 Identification
organization)                       Code Number                        No.)


                                110 Marcus Drive
                            Melville, New York 11747
                                 (631) 694-2929
              -----------------------------------------------------
              (Address, including zip code, and telephone number of
                   registrant's principal executive offices)

                            Raymond V. Damadian, M.D.
                                FONAR CORPORATION
                                110 Marcus Drive
                            Melville, New York 11747
                                 (631) 694-2929

- --------------------------------------------------------------------------------
(Name, address,  including zip code, and telephone number,  including area code,
of agent for service) Please send copies of all communications to:

                              Henry T. Meyer, Esq.
                                FONAR Corporation
                                110 Marcus Drive
                            Melville, New York 11747
                                 (631) 694-2929
                            ------------------------

     Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement

     If the only  securities  being  registered  on this Form are being  offered
pursuant to dividend or interest  reinvestment plans, please check the following
box. [ ]

     If any of the securities being registered on this Form are to be offered on
a delayed or continuous  basis  pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [ X ]

     If this Form is filed to  register  additional  securities  for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering: [ ]

     If this Form is a  post-effective  amendment  filed pursuant to Rule 462(c)
under the  Securities  Act,  check the following box and list the Securities Act
registration  statement number of the earlier effective  registration  statement
for the same offering: [ ]

     If delivery of the  prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]

                         CALCULATION OF REGISTRATION FEE

                                      Proposed      Proposed
Title of each                         maximum       maximum         Amount
class of               Amount         offering      aggregate       of
securities to          to be          price         offering        registration
be registered          registered     per unit      price           fee
- -----------------      ----------     --------      ----------      ------------
Common Stock (1)       2,000,000       $1.09        $2,180,000      $ 200.56
Par value $0.0001
per share
- -----------------      ----------     --------      ----------      ------------

1) Pursuant to Rule 457,  subsections (c) and (g):  Specified date:  October 21,
2002

The registrant hereby amends this  registration  statement on such date or dates
as may be necessary to delay its effective date until the registrant  shall file
a further amendment which specifically  states that this registration  statement
shall  thereafter  become  effective  in  accordance  with  Section 8 (a) of the
Securities  Act of  1933  or  until  the  registration  statement  shall  become
effective on such date as the Commission  acting pursuant to said Section 8 (a),
may determine.


<PAGE>


PROSPECTUS

                                2,000,000 Shares

                                FONAR CORPORATION

                                  Common Stock

     This is a prospectus for the resale,  from time to time, of up to 2,000,000
shares of our  common  stock  which may be  issued to the  selling  stockholders
listed  in  this  prospectus,  or by the  pledgees  or  donees  of  the  selling
stockholders or by other  transferees who may receive the shares of common stock
in transfers  other than public  sales.  We will not receive any of the proceeds
from the sale of these shares.

     The selling  stockholders  may sell the shares in open market  transactions
from time to time at market prices through brokers, dealers or agents. See "PLAN
OF DISTRIBUTION" at page 15 of this prospectus for a more detailed discussion of
the manner in which the shares may be sold.

     Our common  stock is traded on the Nasdaq Small Cap Market under the symbol
"FONR." On October 21, 2002,  the last reported sales price for our common stock
was $1.09 per share.

     Investing  in our common stock  involves a high degree of risk.  You should
consider carefully the risk factors described in this prospectus before making a
decision to purchase our stock. See "RISK FACTORS" at page 7 of this prospectus.

     NEITHER THE  SECURITIES AND EXCHANGE  COMMISSION  NOR ANY STATE  SECURITIES
COMMISSION HAS APPROVED OR  DISAPPROVED  OF THESE  SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                The Date of this Prospectus is October __, 2002.

     You may rely only on the information contained in this prospectus.  We have
not  authorized  anyone to provide  information or to make  representations  not
contained in this prospectus.  This prospectus is neither an offer to sell nor a
solicitation  of an offer to buy any securities  other than those  registered by
this prospectus, nor is it an offer to sell or a solicitation of an offer to buy
securities  where an offer  or  solicitation  would  be  unlawful.  Neither  the
delivery of this prospectus, nor any sale made under this prospectus, means that
the information contained in this prospectus is correct as of any time after the
date of this prospectus.

<PAGE>

                                TABLE OF CONTENTS

ABOUT THIS PROSPECTUS.......................................................4
ABOUT FONAR.................................................................4
ABOUT THIS OFFERING.........................................................6
RISK FACTORS................................................................7
FORWARD LOOKING STATEMENTS.................................................12
USE OF PROCEEDS............................................................12
SELLING STOCKHOLDERS.......................................................12
PLAN OF DISTRIBUTION ......................................................15
LEGAL MATTERS..............................................................18
EXPERTS....................................................................18
INDEMNIFICATION ...........................................................18
WHERE YOU CAN FIND MORE INFORMATION........................................18
INCORPORATION OF INFORMATION WE FILE WITH THE SEC..........................18

                              ABOUT THIS PROSPECTUS

     This prospectus is part of a registration  statement that we filed with the
Securities  and  Exchange  Commission.  Under this  registration  statement  the
selling stockholders may sell from time to time up to 2,000,000 shares of common
stock issuable upon the exercise of our callable warrants.

     Periodically,  we expect to provide a prospectus  supplement that will add,
update or change information contained in this prospectus.  You should read both
this  prospectus  and any  prospectus  supplement  together with the  additional
information  described  below  under  the  heading  "Where  You  Can  Find  More
Information."

     The  registration  statement that contains this  prospectus,  including the
exhibits to the  registration  statement  and the  information  incorporated  by
reference,  contains additional information about the common stock offered under
this prospectus.  The  registration  statement can be read at the Securities and
Exchange  Commission's  web site or at the  Securities  and Exchange  Commission
offices mentioned below under the heading "Where You Can Find More Information."

                             ABOUT FONAR CORPORATION

     At Fonar we design, manufacture and market magnetic resonance imaging (MRI)
scanners.  MRI scanners use magnetic fields to generate images of organs,  bones
and tissue  inside the human body.  The MRI scanner uses a magnetic  field which
causes  the  hydrogen  atoms in  tissue  to align.  When the  magnetic  force is
withdrawn,  the atoms fall out of alignment  emitting  radio signals as they do.
The speed at which the atoms fall out of  alignment,  or  "relaxation  time" and
radio signals vary  depending on the type of tissue and whether any pathology is
present.  The radio signals provide the data from which the scanner's  computers
generate an image of the body part being scanned.

     Our address is 110 Marcus Drive,  Melville,  New York 11747,  our telephone
number there is (631) 694-2929 and our Internet address is http://www.fonar.com.

     Fonar offers the  following  MRI scanners:  the  Stand-Up(TM),  also called
Indomitable(TM) , QUAD(TM),  Fonar-360(TM)  and Echo(TM).  The QUAD-S(TM) MRI, a
work-in-progress, also has received FDA clearance to market.

     The  Stand-Up  allows  patients to be scanned  while  standing,  sitting or
reclining.  This means that an  abnormality  or injury,  such as a slipped disc,
will be able to be scanned under full weight-bearing  conditions, or, more often
than not, in the  position in which the patient  experiences  pain.  An elevator
built into the floor brings the patient to the desired height in the scanner. An
adjustable bed allows the patients to stand, sit or lie on their backs, sides or
stomachs,  at any angle. In the future,  the Stand-Up may also be useful for MRI
directed surgical procedures.

     The Fonar 360 is an enlarged room sized magnet in which the floor,  ceiling
and walls of the room are part of the magnet frame.  Consequently,  this scanner
allows 360 degree access to the patient.  The Fonar 360 is presently marketed as
a diagnostic scanner and is sometimes referred to as the Open Sky MRI.

     In the future,  we may also further develop the Fonar 360 to function as an
operating room. We sometimes refer to this contemplated version of the Fonar 360
as the OR-360.

     The QUAD  scanner is  supported  by four  posts and is open on four  sides,
thereby allowing access to the scanning area from four sides.

     The QUAD-S is a superconductive version of our open iron frame magnet.

     Fonar also offers a low cost, low field open MRI scanner, the Echo.

     In addition to manufacturing MRI scanning  systems,  we formed a subsidiary
in 1997, Health Management Corporation of America, which we sometimes call HMCA,
to engage in the  business  of  managing  MRI  imaging  facilities  and  medical
practices.  HMCA  provides and  supervises  the  non-medical  personnel  for the
clients at their sites. At HMCA we also provide our clients centralized billing,
collection, marketing,  advertising,  accounting and financial services. We also
provide office equipment and furnishing,  consumable  supplies and in some cases
the office space used by our clients.  Almost all of HMCA's client  professional
corporations are owned by Fonar's founder,  President and Chairman of the Board,
Dr. Raymond V. Damadian.

     HMCA  currently  manages 13 MRI  facilities,  seven  physical  therapy  and
rehabilitation  practices and four primary care medical practices.  For the 2002
fiscal  year,  the  revenues  HMCA  recognized  from  the  MRI  facilities  were
$15,514,294,   the   revenues   recognized   from  the   physical   therapy  and
rehabilitation  practices were $11,493,680 and the revenues  recognized from the
primary care medical practices were $1,517,465.

     HMCA's address is at 6 Corporate  Center Drive,  Melville,  New York 11747,
its  telephone  number  there is (631)  694-2816  and its  internet  address  is
www.hmca.com.

     Approximately  64% of our  consolidated  revenues for the fiscal year ended
June 30,  2002 and 75% for the fiscal  year ended June 30, 2001 were from HMCA's
management services.

     Approximately  99% of HMCA's revenues and 64% of our consolidated  revenues
for the fiscal  year ended June 30, 2002 and 98% of HMCA's  revenues  and 75% of
our  consolidated  revenues for the fiscal year ended June 30, 2001 were derived
from professional corporations owned by Dr. Raymond V. Damadian.

                               ABOUT THIS OFFERING

     The selling  stockholders  will act independently of us in making decisions
with  respect to the timing,  manner and size of sales of the  shares.  They may
sell them in the open  market at  market  prices  through  brokers,  dealers  or
agents,   or  in  private   transactions  on  negotiated  terms.  See  "PLAN  OF
DISTRIBUTION"  for a more  detailed  discussion of the ways in which the selling
stockholders might sell their shares.

     Our common stock is traded on the Nasdaq Small Cap Market.

NASDAQ Symbol..............FONR
                                  RISK FACTORS

An investment in our stock is high risk. You should carefully  consider the risk
factors  in this  prospectus  before  deciding  whether to  purchase  the shares
offered. See "RISK FACTORS."

<PAGE>

                                  RISK FACTORS

     An investment in Fonar is highly  speculative  and subject to a high degree
of risk. Therefore,  you should carefully consider the risks discussed below and
other  information  contained in this  prospectus  before  deciding to invest in
shares of our common stock.

1.   We have and continue to experience significant losses.

     For the fiscal years ended June 30, 2002 and June 30, 2001, we  experienced
net losses of $22.9  million and $15.2  million  respectively  and net operating
losses of $19.7 million and $16.2  million,  respectively.  We have been able to
fund our losses to date from the  $7,125,000  in funding  received from The Tail
Wind Fund  Ltd.  between  May,  2001 and  August,  2002 and the  $128.7  million
judgment,  net $77.2  million  after  attorney's  fees,  received  from  General
Electric  Company in 1997 for patent  infringement  and the settlement  proceeds
from other patent litigation  settlements with other  competitors.  The terms of
these settlement agreements are required to be kept confidential. As of June 30,
2002,  however,  our balance sheet reflected  approximately $7.5 million in cash
and cash  equivalents  and $5.6 million in  marketable  securities  out of total
current  assets of $41.5 million as compared to  approximately  $14.0 million in
cash or cash equivalents and $6.1 million in marketable  securities out of total
current  assets of $40.9 million as at June 30, 2001. We believe that we will be
able to reverse our operating losses with the introduction  into the marketplace
of our new MRI  scanners,  particularly  our  Stand-Up(TM)  MRI  scanners.  HMCA
operating  income has declined however from $2.5 million in fiscal 2000, to $1.0
million  for fiscal  2001 and to an  operating  loss of $4.3  million for fiscal
2002.  Of the  HMCA and  consolidated  operating  losses,  $4.7  million  was an
impairment loss taken with respect to management agreements for the primary care
medical  practices as a result of losses  recognized  by that division of HMCA's
business.  Contributing  to the net loss was an additional  non-cash  expense of
$2.4  million in  financing  costs  incurred in  connection  with the  discounts
received on the stock issued to The Tail Wind Fund.  There can be no  assurance,
however, that we can reverse our operating losses.

2.   Fonar is dependant on the success of its new products to become profitable.

     Our ability to generate future operating profits will depend on our ability
to market and sell our new lines of MRI products.  The Stand-Up  MRI,  Fonar 360
and Echo scanners have all been recently introduced into the market. Although we
are optimistic that these scanners'  features will make them competitive,  there
can be no  assurance  as to the degree or timing of market  acceptance  of these
products.  Nevertheless,  we  received  orders for 20 Stand-Up  MRI  scanners in
fiscal 2002.  Revenues from the sales of QUAD scanners,  introduced in 1995, had
not been sufficient to date to generate  operating  profits.  The product we now
are  currently  promoting  most  vigorously  is the Stand-Up MRI. We believe the
Stand-Up MRI is the most  promising  because it enables scans to be performed on
patients in weight bearing positions,  such as sitting,  standing or lying at an
angle.  The market for the Stand-Up  MRI,  shows  strong  initial  promise.  The
following chart shows the revenues attributable to each model during fiscal 2001
and fiscal 2002. Please note that we recognize the revenue on scanner sales on a
percentage  of  completion  basis.  This  means we book  revenue  not as cash is
received  or sales are made,  but as the  scanner  is built.  Consequently,  the
revenues for a fiscal period do not  necessarily  relate to the orders placed in
that period.


         Model                                       Revenues Recognized
                                        2001                       2002

         Stand-Up                   $ 1,625,615               $ 11,089,675
         Fonar 360                            0                          0
         QUAD                       $ 3,043,308                          0
         Echo                       $ 1,052,182                          0
         Beta (used)                          0                    361,000

3.   We must compete in a highly  competitive  market against  competitors  with
     greater financial resources than we have.

     The medical equipment  industry is highly  competitive and characterized by
rapidly changing  technology and extensive research and development.  The market
demand for a continuing  supply of new and improved products requires that we be
engaged  continuously  in research and  development.  New products  also require
continuous retooling or at least modifications to our manufacturing  facilities,
and our sales and marketing force must  continuously  adjust to new products and
product  features.  This is highly  expensive and companies  with  substantially
greater  financial  resources  than we have engage in the  marketing of magnetic
resonance   imaging   scanners  which  compete  with  the  Company's   scanners.
Competitors include large,  multinational  companies or their affiliates such as
General Electric Company,  Siemens A.G.,  Marconi  International,  Philips N.V.,
Toshiba  Corporation  and Hitachi  Corporation.  There can be no assurance  that
Fonar's  products  will be able to  successfully  compete  with  products of its
competitors.

4.   The  success of some of the  businesses  purchased  by HMCA  depends on the
     continued employment of the former owners of those businesses.

     The businesses acquired by HMCA are essentially service organizations whose
continued  success  depends  on  retaining  and  developing   existing  business
relationships.  These  relationships are often heavily dependent on the personal
efforts of key persons in the acquired company or medical  practices  managed by
the  acquired  company.  HMCA has retained  certain of these key people  through
employment agreements which include both noncompetition  covenants and financial
incentives.  Nevertheless,  there can be no assurance that these key people will
remain as employees or produce results sufficient to make the acquired companies
profitable.

5.   The decline in profitability of the primary care medical  practices managed
     by HMCA resulted in an impairment loss of $4.7 million in fiscal 2002.

     HMCA manages 13 MRI facilities,  seven physical therapy and  rehabilitation
practices and four primary care medical practices.  During 2002 fiscal year, the
primary care medical  practices,  which are managed by the Company's  subsidiary
A&A Services,  Inc.  experienced a significant overall decline in patient volume
and  related  operating  cash flows  which led to the  inability  of the medical
practices  to fully and timely pay  management  fees.  The  business of managing
these  practices  had been  acquired by HMCA in fiscal 1998.  As a result of the
continued  negative  trend,  HMCA incurred an impairment loss of $4.7 million in
fiscal 2002 related to those  management  agreements  which reduced the carrying
value of such  agreements  to  approximately  $3.5 million at June 30, 2002.  We
presently  do not expect any further  impairment,  but there can be no assurance
that we will be able to prevent further declines in the management fees received
from the primary care medical practices.


6.   HMCA'S profitability depends on its ability to successfully perform billing
     and collection services for its clients.

     HMCA performs billing and collection services for the medical practices and
MRI facilities it manages.  The viability of HMCA's clients and their ability to
remit  management fees to HMCA depends on HMCA's ability to collect the clients'
receivables.  Collectibility of these  receivables can be adversely  affected by
the  longer  payment  cycles and  rigorous  informational  requirements  of some
insurance  companies  or  other  third  party  payors.  Proper   authorizations,
referrals  and  confirmation  of  coverage  for  patients,  as well as issues of
medical  necessity,  need to be addressed  prior to the  rendering of service to
assure prompt payment of claims. HMCA believes it is properly addressing billing
and collection  requirements  and issues for its clients and that its collection
rates are good.  Nevertheless,  the regulations and  requirements  applicable to
medical billing and collections could change in the future and result in reduced
or  delayed  collections.  Approximately  99%  of  the  receivables  billed  and
collected  by HMCA are  from  professional  corporations  owned  by  Raymond  V.
Damadian.

7.   Capitated  insurance  programs  could  adversely  affect HMCA's  clients by
     shifting a part of the  financial  responsibility  for patient  care to the
     medical providers.

     Certain HMO's and insurers have instituted  managed care programs where the
physician or physician  group is paid on a capitated  basis.  Under these plans,
the  physician is not paid  according to the  services  provided,  but is paid a
fixed  monthly fee per patient,  which in HMCA's  experience is based on age and
gender.  In fiscal 2002 and fiscal 2001,  respectively,  2.5% and 2.2% of HMCA's
clients' revenues were from capitated  programs.  All of these were attributable
to primary medical care practices  managed by A&A Services,  Inc.,  representing
46% and 26% of their  revenues  in fiscal  2002 and fiscal  2001,  respectively.
Under  capitated  insurance  programs,  the  physician or physician  practice in
effect  bears  some  of the  risk  in the  event a  patient  requires  extensive
treatment.  In the event that HMCA's client primary care practices  experience a
shortfall between the capitated payments and the cost of providing services, the
ability of those practices to pay for HMCA's services may be impaired.


8.   The profitability of HMCA could be adversely  affected if medical insurance
     reimbursement rates change.

     HMCA receives  substantially  all of its revenue from medical practices and
providers of MRI services.  Consequently,  HMCA would be indirectly  affected by
changes in medical  insurance  reimbursement  policies,  HMO policies,  referral
patterns,  no-fault  and  workers  compensation  reimbursement  levels and other
factors affecting the  profitability of a medical practice or MRI facility.  The
types of medical  providers  served by HMCA are (a) MRI facilities,  (b) primary
care practices and (c) physical therapy and rehabilitation practices.  There are
approximately 13 MRI facilities served by HMCA located in New York,  Florida and
Georgia.  The primary care  practices  served by HMCA consist of four offices in
New York and the physical therapy and rehabilitation  practices consist of seven
offices located in New York.  Approximately  52% of HMCA's clients'  revenues in
fiscal 2002 as compared to  approximately  56% of HMCA's clients' in fiscal 2001
were generated from the no-fault and personal injury protection claims. Although
we do not know of any  pending  adverse  development  affecting  these  types of
facilities,  future changes in the  reimbursement  levels for MRI, primary care,
workers  compensation  or no fault  reimbursement,  or  changes  in  utilization
policies for MRI or physical  rehabilitation  therapy could adversely affect the
ability of HMCA's  clients to pay HMCA's fees. In addition,  HMCA depends on the
ability of the medical  practices and providers to attract and retain physicians
and other professional staff.

9.   The  amortization  of the  management  agreements on our balance sheet will
     reduce future profits.

     HMCA acquired  businesses  which were  essentially  service  businesses for
purchase prices based on earnings  multiples rather than net tangible assets. As
the fair value of the tangible  assets was small relative to the purchase price,
the  consolidated  balance  sheet  of Fonar  and its  subsidiaries  reflects  an
allocation  of the  purchase  price in excess of the fair value of the  tangible
assets  exclusively  to management  agreements,  an intangible  asset with a net
carrying value of approximately $20.4 million at June 30, 2001 and $14.5 million
as at June 30,  2002.  The initial  amount  allocated to  management  agreements
attributable to the acquisitions,  was approximately $23.4 million. Prior to the
write  down of the  value of the  management  agreements  for the  primary  care
medical  practices of $4.7 million in fiscal 2002,  amortization  of  management
agreements,  which is over a period of twenty (20) years, reduced net profits by
approximately $1.2 million annually.  This is a non-cash expense. It is expected
that the  amortization  of management  agreements  after the  write-down for the
impairment loss will be $983,700 annually.

10.  Professional  liability  claims  against  HMCA or its  clients  may  exceed
     insurance coverage levels.

     Although  HMCA does not provide  medical  services,  it is possible  that a
patient suing one of HMCA's client  medical  practices or MRI  facilities  would
also  sue  HMCA.  Neither  HMCA nor its  clients  carry  professional  liability
insurance but physicians  working for HMCA's clients or for HMCA's  subsidiaries
are required to maintain professional  liability insurance in the minimum amount
of  $1,000,000/$3,000,000.  Such  insurance  would  not  cover  HMCA or a client
professional corporation,  however, in the event a claim were made which was not
covered by the  physician's  insurance.  Claims in excess of insurance  coverage
might  also have to be  satisfied  by HMCA or its  clients if they were named as
defendants.

11.  We do not carry  product  liability  insurance  and  would  have to pay any
     claims from our revenues and capital resources.

     Fonar  does not carry  product  liability  insurance  but is  self-insured.
Consequently,  Fonar would have to pay from its own resources any valid products
liability claim. To date, Fonar has not had to pay any such claims.

12.  We are dependent upon the services of Dr. Damadian.

     Our success is greatly  dependent upon the continued  participation  of Dr.
Raymond V. Damadian,  Fonar's founder,  Chairman of the Board and President. Dr.
Damadian  has acted as our CEO  since  1978 and will  continue  to do so for the
foreseeable  future. In addition to providing general supervision and direction,
he provides active direction, supervision and management of our sales, marketing
and research and  development  efforts.  In  connection  with the  physician and
diagnostic  management  services  business  conducted by HMCA, Dr. Damadian owns
most of the professional corporations which are HMCA clients. With the exception
of four  professional  corporations  which provided  management  fees to HMCA of
approximately $422,500 in the aggregate for fiscal 2002, all of the professional
corporations  are owned by Dr.  Damadian.  Loss of the services of Dr.  Damadian
would  have a  material  adverse  effect  on our  business.  We do not  have  an
employment or  noncompetition  agreement with Dr. Damadian.  We do not currently
carry "key man" life insurance on Dr. Damadian.

13.  Dr. Raymond V. Damadian has voting control of Fonar; the management  cannot
     be changed or the company sold without his agreement.

     Dr. Raymond V. Damadian, the President, Chairman of the Board and principal
stockholder  of Fonar is and will  continue  to be in  control of Fonar and in a
position to elect all of the directors of Fonar. As of September 19, 2002, there
were outstanding  73,569,791 shares of common stock,  having one vote per share,
4,211 shares of Class B common  stock,  having ten votes per share and 9,562,824
shares of Class C common stock,  having 25 votes per share.  Of these totals Dr.
Damadian owned 2,488,274  shares of common stock and 9,561,174 shares of Class C
common stock,  giving him over 80% of the voting power of Fonar's  voting stock.
This  means that the  holders  of the  common  stock will not be able to control
decisions  concerning any merger or sale of Fonar,  the election of directors or
the determination of business and management policy.

14.  The provisions of our warrants provide for reductions in the exercise price
     if we issue  common  stock at prices  below  market  or below  the  warrant
     exercise prices.

     In addition to provisions  providing for  proportionate  adjustments in the
event of stock splits, stock dividends, reverse stock splits and similar events,
the  warrants  provide for a reduction  of the  exercise  price if Fonar  issues
shares of common stock at prices lower than the exercise price or lower than the
then prevailing  market price.  The number of shares issuable under the warrants
would change in this case in inverse  proportion,  but we would receive the same
amount of proceeds if the warrants were subsequently exercised in full.

                           FORWARD-LOOKING STATEMENTS

     We make  statements in this  prospectus and the documents  incorporated  by
reference that are considered  forward-looking  statements within the meaning of
the Securities Act of 1933 and the Securities  Exchange Act of 1934. The Private
Securities  Litigation  Reform Act of 1995  contains the safe harbor  provisions
that cover these forward-looking statements. We are including this statement for
purposes  of  complying  with  these  safe  harbor  provisions.  We  base  these
forward-looking  statements on our current  expectations  and projections  about
future  events.  These  forward-looking  statements are not guarantees of future
performance and are subject to risks,  uncertainties and assumptions  including,
among other things:

     -    continued losses and cash flow deficits;

     -    the continued  availability of financing in the amounts,  at the times
          and on the terms required to support our future business;

     -    uncertain market acceptance of our products; and

     -    reliance on key personnel.

     Words  such  as  "expect,"   "anticipate,"   "intend,"  "plan,"  "believe,"
"estimate" and variations of such words and similar  expressions are intended to
identify such forward-looking statements. We undertake no obligation to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information,  future events or otherwise.  Because of these risks, uncertainties
and  assumptions,  the  forward-looking  events  discussed  or  incorporated  by
reference in this document may not occur.

                                 USE OF PROCEEDS

     We will not receive any proceeds from the sale by the selling  stockholders
of the common  stock they  receive  upon the  exercise of the  warrants.  If the
warrants are  exercised,  however,  we will  receive the  exercise  price of the
underlying  shares purchased.  We can not, however,  guarantee the amount of the
proceeds we may receive from the exercise of warrants.

     We intend to use the net  proceeds,  if any,  from the exercise of warrants
for general  corporate  purposes,  including  working  capital to fund operating
losses, expenses and capital expenditures. As of the date of this prospectus, we
cannot specify with  certainty the  particular  uses for any net proceeds we may
receive upon the exercise of the warrants. Accordingly, our management will have
broad discretion in the application of any net proceeds  received.  Pending such
uses,  we intend to invest the net  proceeds,  if any,  from the exercise of the
warrants in short-term, interest-bearing, investment grade securities.


                              SELLING STOCKHOLDERS

     Pursuant to a securities  purchase  agreement dated May 24, 2001 between us
and The Tail Wind Fund Ltd.  stockholders,  we issued and sold, for an aggregate
purchase price of $4.5 million:

     4%  convertible  debentures  due June 30, 2002 in the  aggregate  principal
     amount of $4.5  million,  convertible  into shares of our common stock at a
     conversion price of $2.047 per share, subject to adjustment;

     purchase  warrants to purchase an  aggregate of 959,501  (includes  300,000
     issuable to the  placement  agent) shares of our common stock at an initial
     exercise price of $1.801 per share, subject to adjustment; and

     callable  warrants to  purchase an  aggregate  of  2,000,000  shares of our
     common stock at a fluctuating  exercise  price which will vary depending on
     the market price for our common stock

     In connection  with the issuance of the debentures,  purchase  warrants and
callable purchase warrants to The Tail Wind Fund Ltd. we paid a placement fee to
Roan Meyers,  Inc. in the amount of $157,500.  The 300,000 purchase  warrants to
have been  issued to Roan  Meyers,  Inc.  will be  issued to  designees  of Roan
Meyers, Inc. instead.

     The debentures  were  convertible at the option of the holder at a price of
$2.047 per share. The Tail Wind Fund Ltd did not elect to convert,  but we still
had the right to pay the  debentures  in shares of our common  stock and did so.
The stock was valued,  in accordance  with the terms of the  debentures,  at the
lesser of a) 90% of the average of the four lowest closing bid prices during the
preceding  month or b) the average of the four lowest  closing bid prices during
the  preceding  calendar  month less  $0.125.  We issued a  aggregate  amount of
4,931,576 shares to pay the debentures (with interest of $132,022) in full.

     The  purchase  warrants  cover  959,501  shares of common stock and have an
exercise price of $1.801 per share,  subject to adjustment.  The exercise period
extends to May 24, 2006.  If all of the purchase  warrants are exercised at such
price, we would receive proceeds in the approximate amount of $1.7 million.  The
Tail Wind Fund Ltd. has not exercised any of the purchase  warrants.  All of the
purchase warrants are still outstanding.

     The original callable warrants covered 2,000,000 shares of common stock and
had a variable exercise price. Subject to a maximum price of $6.00 per share and
a minimum price of $2.00 per share, which was subject to adjustment  pursuant to
the terms of the warrants,  the exercise  price was to be calculated to be equal
to the average  closing bid price of Fonar's  common stock for the full calendar
month  preceding the date of exercise.  The exercise  period extended to May 24,
2004.

     In order to  induce  The Tail  Wind  Fund Ltd.  to  exercise  the  callable
warrants we agreed to lower the exercise price to $1.50 per share for the period
from June 24,  2002  through  July 31,  2002.  At the same time we agreed not to
exercise  our right to redeem any callable  warrants  during the months of July,
2002 and August,  2002.  Prior to June 30,  2002,  The Tail Wind Fund Ltd.  then
exercised  callable  warrants  for  1,000,000  shares  of  common  stock  for an
aggregate  exercise  price of  $1,500,000.  On  August  16,  2002 we agreed to a
further reduction of the exercise price to $1.125 per share for the period ended
on August 22, 2002.  The Tail Wind Fund Ltd. then  exercised on the same day the
remaining  callable  warrants  for a total of  1,000,000  shares at an aggregate
exercise price of $1,125,000.

     As part of the agreement  under which we reduced the exercise  price of the
original  callable  warrants,  we have now  issued  to The Tail  Wind  Fund Ltd.
replacement  callable  warrants for 2,000,000  shares of our common stock on the
same terms as the original callable  warrants.  Since the exercise price varies,
the amount of proceeds, if any, which we may receive cannot be predicted. At the
minimum  exercise  price of $2.00  per  share we would  receive  proceeds  of $4
million.  At the  maximum  exercise  price of $6.00 per  share we would  receive
proceeds of $12 million.  The replacement  callable warrants will be exercisable
until August 30, 2005.

     We do have  the  option,  however,  of  redeeming  up to  200,000  callable
warrants  per month at a price of $0.01 per  underlying  warrant  share,  if the
average  closing bid price of Fonar's  common  stock is greater than 115% of the
warrant price in effect for five consecutive trading days in any calendar month.
We also have the  option of  reducing  the  exercise  price  under the  callable
warrants to any lower exercise price that was previously in effect.

     No  proceeds  can be  expected  to be  received  from the  exercise  of the
warrants  unless  the  market  price  of our  common  stock is  higher  than the
applicable exercise prices since otherwise the holders are unlikely to exercise.

     The warrants  provide for  proportionate  adjustments in the event of stock
splits,  stock  dividends and reverse stock  splits.  In addition,  the exercise
prices will be reduced, with certain specified exceptions, if we issue shares at
lower prices then the warrant exercise prices, or less than market price for our
common stock.

     The  shares  now  being  registered  are  the  shares  underlying  the  new
replacement  callable warrants.  The shares underlying the outstanding  purchase
warrants were previously registered.

     The table below presents information regarding the selling stockholders and
the shares that they may offer and sell from time to time under this prospectus.
The table  assumes  that the  selling  stockholders  sell all of the shares they
receive upon the exercise of the warrants.  However,  no assurances can be given
as to the actual number of shares that will be sold by the selling  stockholders
or that will be held by the selling  stockholders after completion of the sales.
Information concerning the selling stockholders may change from time to time and
any changed  information will be presented in a supplement to this prospectus if
and when necessary and required.

     Beneficial  ownership is  determined  in  accordance  with the rules of the
Securities and Exchange  Commission that deem shares to be beneficially owned by
any person who has voting or investment power with respect to the shares. Common
stock  issuable upon  conversion of the  debentures or exercise of warrants that
are  currently  convertible,  exercisable  or  exercisable  within  60 days  are
considered to be outstanding and to be beneficially  owned by the person holding
the debentures and warrants for the purpose of computing beneficiary  ownership.
Assuming that the selling stockholders sell all of the shares offered under this
prospectus, the selling stockholders will beneficially own less than one percent
of our outstanding shares of common stock after the completion of this offering.

                               Shares            Shares               Shares
                            Beneficially         Offered           Beneficially
                            Owned  Prior         By This           Owned  After
Selling Stockholders        to  Offering        Prospectus           Offering
- --------------------        ------------        ----------         ------------
The Tail Wind Fund,           3,832,461          2,000,000           1,832,461
Ltd. or assigns (1)


(1)  Includes  1,172,960  shares of common stock held by The Tail Wind Fund Ltd.
     as at August 31, 2002 and  2,659,501  shares of common stock  issuable upon
     the exercise of the purchase warrants and replacement callable warrants.

     Neither the selling  stockholders  nor any of their  affiliates,  officers,
directors or principal equity holders has held any position or office or has had
any material relationship with us within the past three years.

                              PLAN OF DISTRIBUTION

     We will not receive any of the proceeds of the sales of these shares.

     WHO MAY SELL AND  APPLICABLE  RESTRICTIONS.  Shares may be offered and sold
directly  by the  selling  stockholders  and those  persons'  pledgees,  donees,
transferees  or other  successors  in  interest  from time to time.  The selling
stockholders  could transfer,  devise or gift shares by other means. The selling
stockholders  may also  resell all or a portion of their  shares in open  market
transactions  in reliance upon available  exemptions  under the Securities  Act,
such as Rule 144, provided they meet the requirements of these exemptions.

     Alternatively,  the selling stockholders may from time to time offer shares
through brokers,  dealers or agents.  Brokers,  dealers,  agents or underwriters
participating in transactions may receive compensation in the form of discounts,
concessions or commissions  from the selling  stockholders  (and, if they act as
agent for the  purchaser of the shares,  from that  purchaser).  The  discounts,
concessions or commissions  might be in excess of those customary in the type of
transaction involved.

     The selling  stockholders will purchase their shares in the ordinary course
of business upon the exercise of warrants.  The selling stockholders do not have
any agreements or  understandings,  directly or  indirectly,  with any person to
distribute the securities.

     Nevertheless,  the selling stockholders and any brokers,  dealers or agents
who  participate  in  the  distribution  of  the  shares  may  be  deemed  to be
underwriters,  and any profits on the sale of shares by them and any  discounts,
commissions  or  concessions  received by any  broker,  dealer or agent might be
deemed to be underwriting discounts and commissions under the Securities Act. To
the extent a selling stockholder may be deemed to be an underwriter, the selling
stockholder may be subject to statutory liabilities,  including, but not limited
to,  Sections  11,  12 and 17 of the  Securities  Act and Rule  10b-5  under the
Securities  Exchange Act. These  provisions of the securities  laws provide,  in
general  terms,  for  liability  for fraud,  untrue  statements  contained  in a
prospectus or otherwise made in connection with the sale of securities,  and the
failure  to  disclose  significant  information  which is  necessary  to prevent
information disclosed from being misleading.

     To comply with certain states'  securities laws, if applicable,  the shares
will be sold in such  jurisdictions  only through registered or licensed brokers
or dealers. In addition, in certain states the shares may not be sold unless the
shares have been  registered or qualified for sale in that state or an exemption
from registration or qualification is available and is complied with.

     MANNER OF SALES. The selling  stockholders  will act independently of us in
making  decisions with respect to the timing,  manner and size of each sale. The
shares  may be sold at then  prevailing  market  prices,  at prices  related  to
prevailing  market prices,  at fixed prices or at other negotiated  prices.  The
shares may be sold according to one or more of the following methods.

o    A block trade in which the broker or dealer so engaged will attempt to sell
     the shares as agent but may  position  and resell a portion of the block as
     principal to facilitate the transaction.

o    Purchases  by a broker or dealer as  principal  and resale by the broker or
     dealer for its account as allowed under this prospectus.

o    Ordinary  brokerage  transactions  and  transactions  in which  the  broker
     solicits purchasers.

o    Pledges of shares to a broker-dealer or other person, who may, in the event
     of default, purchase or sell the pledged shares.

o    An exchange distribution under the rules of the exchange.

o    In  private   transactions   between  sellers  and  purchasers   without  a
     broker-dealer.

o    By writing options.

o    Any  combination of the foregoing,  or any other  available means allowable
     under law.

     HEDGING OR SHORT TRANSACTIONS.  In addition,  the selling  stockholders may
enter into option, derivative, hedging or short transactions with respect to the
shares,  and any  related  offers  or sales of  shares  may be made  under  this
prospectus. For example, the selling stockholders may:

o    enter  into   transactions   involving   short   sales  of  the  shares  by
     broker-dealers  in the course of hedging the positions they assume with the
     selling stockholders;

o    sell shares short itself and deliver the shares registered hereby to settle
     such short sales or to close out stock loans  incurred in  connection  with
     its short positions;

o    write call options, put options or other derivative  instruments (including
     exchange-traded  options or privately  negotiated  options) with respect to
     the shares, or which it settles through delivery of the shares;

o    enter into option  transactions or other types of transactions that require
     the  selling  stockholder  to deliver  shares to a broker,  dealer or other
     financial  institution,  who may then resell or transfer  the shares  under
     this prospectus; or

o    loan the shares to a broker, dealer or other financial institution, who may
     sell the loaned shares.

     These option,  derivative,  hedging and short  transactions may require the
delivery to a broker,  dealer or other  financial  institution of shares offered
under this prospectus,  and that broker,  dealer or other financial  institution
may resell those shares under this prospectus.

     EXPENSES  ASSOCIATED WITH REGISTRATION.  We have agreed to pay the expenses
of registering the shares under the Securities Act,  including  registration and
filing  fees,  printing  expenses,   administrative  expenses,  legal  fees  and
accounting fees. If the shares are sold through  underwriters or broker-dealers,
the  selling  stockholders  will  be  responsible  for  underwriting  discounts,
underwriting commissions and agent commissions.

     INDEMNIFICATION AND CONTRIBUTION. In the registration rights agreement that
we entered into with the selling  stockholders,  we and the selling stockholders
agreed to indemnify or provide  contribution  to each other and specified  other
persons against some  liabilities in connection with the offering of the shares,
including liabilities arising under the Securities Act. The selling stockholders
may also agree to indemnify  any  broker-dealer  or agent that  participates  in
transactions  involving sales of the shares against some liabilities,  including
liabilities arising under the Securities Act.

     SUSPENSION OF THIS OFFERING.  We may suspend the use of this  prospectus if
we learn of any event that causes this prospectus to include an untrue statement
of material  fact or omit to state a material  fact required to be stated in the
prospectus or necessary to make the  statements in the prospectus not misleading
in light of the  circumstances  then existing.  If this type of event occurs,  a
prospectus  supplement  or  post-effective   amendment,  if  required,  will  be
distributed  to the selling  stockholder.  Any material  changes in this plan of
distribution will be reflected in a post-effective amendment.

     Computershare  Trust Company,  Inc.,  formerly called  American  Securities
Transfer  & Trust,  Inc.,  located at 350  Indiana  Street,  Suite 800,  Golden,
Colorado, 80401 is the transfer agent and registrar for our common stock.


                                  LEGAL MATTERS

     Certain  legal  matters  with  respect to the  validity of the shares being
offered by the  prospectus  will be passed  upon by Henry T.  Meyer,  Esq.,  110
Marcus Drive, Melville, New York 11747. Mr. Meyer is Fonar's General Counsel.

                                     Experts

     The consolidated  financial statements and supplemental financial schedules
contained  in  Fonar's  latest  annual  report  on Form  10-K,  incorporated  by
reference into this prospectus,  have been audited by Marcum & Kliegman, LLP, to
the extent set forth in their report. Such consolidated financial statements and
schedules were included  therein in reliance upon their reports,  given on their
authority as experts in accounting and auditing.

                                 INDEMNIFICATION

     The Delaware  General  Corporation  Law and Fonar's by-laws provide for the
indemnification  of an officer or director under certain  circumstances  against
reasonable  expenses  incurred  in  connection  with the  defense  of any action
brought  against him by reason of his being a director  or  officer.  Insofar as
indemnification  for  liabilities  arising  under  the  Securities  Act  may  be
permitted to directors,  officers or other persons under Fonar's  by-laws or the
Delaware General Corporation Law, Fonar has been informed that in the opinion of
the Securities and Exchange  Commission such  indemnification  is against public
policy as expressed in the Securities Act and is therefore unenforceable.

                       WHERE YOU CAN FIND MORE INFORMATION

     We file reports, proxy statements and other information with the Securities
and Exchange Commission. Our Securities and Exchange Commission filings are also
available over the Internet at the Securities and Exchange Commission's web site
at  http://www.sec.gov.  You may also read and copy any  document we file at the
Securities and Exchange Commission's public reference rooms in Washington, D.C.,
New  York,  New York and  Chicago,  Illinois.  Please  call the  Securities  and
Exchange  Commission  at  1-800-SEC-0330  for  more  information  on the  public
reference rooms. Our Commission File No. is 0-10248.

                INCORPORATION OF INFORMATION WE FILE WITH THE SEC

     The  Securities  and  Exchange  Commission  allows  us to  "incorporate  by
reference" the information we file with them, which means:

     - incorporated documents are considered part of this prospectus;

     - we can disclose  important  information  to you by referring you to those
documents; and

     - information that we file with the Securities and Exchange Commission will
automatically update and supersede this prospectus.

     We are  incorporating  by reference the  documents  listed below which were
filed with the Securities and Exchange  Commission under the Securities Exchange
Act of 1934:

     - Annual  Report on Form 10-K for the year ended June 30,  2002,  which was
filed on October 7, 2002;

     We also  incorporate by reference  each of the following  documents that we
will file with the  Securities  and Exchange  Commission  after the date of this
prospectus but before the end of the offering:

     - Reports filed under Sections 13(a) and (c) of the Securities Exchange Act
of 1934;

     - Definitive proxy or information  statements filed under Section 14 of the
Securities Exchange Act of 1934 in connection with any subsequent  stockholders'
meeting; and

     - Any reports filed under Section 15(d) of the  Securities  Exchange Act of
1934.

     You may request a copy of these  filings,  at no cost,  by contacting us at
the following address or phone number:

                                Fonar Corporation
                                110 Marcus Drive
                                Melville, New York  11747
                                Attention: Investor Relations

<PAGE>

                                     PArt II
                     Information Not Required in prospectus

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

     The  following  table  sets  forth  the  costs  and  expenses,  other  than
     underwriting  discounts  and  commissions,  payable  by the  Registrant  in
     connection with the sale of the common stock being registered.  All amounts
     are estimates except the registration fee.

                                AMOUNT TO BE PAID

SEC Registration Fee                                            $    200.56
Printing                                                           1,000.00
Legal Fees and Expenses                                            1,000.00
Accounting Fees and Expenses                                       5,000.00
Blue Sky Fees and Expenses                                         5,000.00
Transfer Agent and Registrar Fees                                  5,000.00
Miscellaneous                                                      1,000.00
                                                                -----------
  Total.........................................................$ 18,200.56
                                                                ===========

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

     Section  102(b)(7) of the General  Corporation Law of the State of Delaware
(the  "Delaware  Law") grants  corporations  the right to limit or eliminate the
personal  liability of their  directors in certain  circumstances  in accordance
with provisions  therein set forth. Our Certificate of Incorporation  contains a
provision eliminating director liability to us and our stockholders for monetary
damages for breach of  fiduciary  duty as a director.  The  provision  does not,
however,  eliminate or limit the personal  liability of a director:  (i) for any
breach of such  director's duty of loyalty to us or our  stockholders;  (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing  violation of law; (iii) under the Delaware  statutory  provision making
directors personally liable, for improper payment of dividends or improper stock
purchases or redemptions;  or (iv) for any  transaction  from which the director
derived an improper personal benefit. This provision offers persons who serve on
our Board of Directors  protection  against awards of monetary damages resulting
from breaches of their duty of care (except as indicated  above). As a result of
this provision, our ability or a stockholder's ability to successfully prosecute
an  action  against  a  director  for a breach  of his duty of care is  limited.
However,  the provision does not affect the  availability of equitable  remedies
such as an injunction or rescission  based upon a director's  breach of his duty
of care.  The SEC has taken the position that the provision  will have no effect
on claims arising under federal securities laws.

     Section 145 of the Delaware Law grants  corporations the right to indemnify
their  directors,   officers,  employees  and  agents  in  accordance  with  the
provisions  therein set forth.  Our By-laws provide that the corporation  shall,
subject to limited exceptions, indemnify its directors and executive officers to
the fullest  extent not  prohibited  by the Delaware  Law.  Our By-laws  provide
further  that the  corporation  shall  have the  power to  indemnify  its  other
officers,  employees  and her  agents as set  forth in the  Delaware  Law.  Such
indemnification  rights  permit  reimbursement  for  expenses  incurred  by such
director,  executive officer, other officer, employee or agent in advance of the
final   disposition  of  such  proceeding  in  accordance  with  the  applicable
provisions of the Delaware Law.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and  controlling  persons of us
pursuant to these  provisions,  or otherwise,  we have been advised that, in the
opinion of the  Securities  and Exchange  Commission,  such  indemnification  is
against  public  policy  as  expressed  in the  Securities  Act of 1933  and is,
therefore, unenforceable.

       Item   16. Exhibits and Financial Statement Schedules

       Exhibits

       4.1    *  Specimen  Common  Stock  Certificate   incorporated  herein  by
              reference  to  Exhibit  4.1  to  the   Registrant's   registration
              statement on Form S-1, Commission File No. 33-13365.

       4.2    * Article Fourth of the Certificate of Incorporation,  as amended,
              of the Registrant  incorporated by reference to Exhibit 4.1 to the
              Registrant's  registration  statement on Form S-8, Commission File
              No. 33-62099.

       4.3    * Section A of Article FOURTH of the Certificate of Incorporation,
              as amended, of the Registrant incorporated by reference to Exhibit
              4.3  to the  Registrant's  registration  statement  on  Form  S-3,
              Commission File No. 333-63782.

       4.4    * Form of 4% Convertible Debentures due June 30, 2002 incorporated
              herein by  reference  to Exhibit 4.1 of the  Registrant's  current
              report on Form 8-K  filed on June 11,  2001.  Commission  File No.
              0-10248.

       4.5    * Form of Purchase  Warrants  incorporated  herein by reference to
              Exhibit 4.2 of the  Registrant's  current report on Form 8-K filed
              on June 11, 2001. Commission File No. 0-10248.

       4.6    * Form of Callable  Warrants  incorporated  herein by reference to
              Exhibit 4.3 of the Registrant's  current reports on Form 8-K filed
              on June 11, 2001. Commission File No. 0-10248.

       4.7    Form of Replacement Callable Warrants. See Exhibits.

       5      Opinion of Counsel re: Legality. See Exhibits.

       10.1*  License   Agreement   between   Fonar  and  Raymond  V.   Damadian
              incorporated  herein by  reference  to Exhibit 10 (e) to Form 10-K
              for the  fiscal  year  ended June 30,  1983,  Commission  File No.
              0-10248

       10.2*  1993 Incentive Stock Option Plan incorporated  herein by reference
              to Exhibit 28.1 to the Registrant's registration statement on Form
              S-8, Commission File No. 33-60154.

       10.3*  1997  Non-Statutory  Stock  Option  Plan  incorporated  herein  by
              reference  to  Exhibit  28.1  to  the  Registrant's   registration
              statement on Form S-8, Commission File No. 333-27411.

       10.4*  1997 Stock Bonus Plan incorporated  herein by reference to Exhibit
              28.2 to the  Registrant's  registration  statement  on  Form  S-8,
              Commission File No. 333-27411

       10.5*  2000 Stock Bonus Plan incorporated  herein by reference to Exhibit
              99.1 to the  Registrant's  registration  statement  on  Form  S-8,
              Commission File No. 333- 66760.

       10.6*  2002 Stock Bonus Plan incorporated  herein by reference to Exhibit
              99.1 to the  Registrant's  registration  statement  on  Form  S-8,
              Commission File No. 333-89578.

       10.7*  2002 Incentive Stock Option Plan incorporated  herein by reference
              to Exhibit 99.1 to the Registrant's registration statement on Form
              S-8, Commission File No. 333-96557.

       10.8*  Stock Purchase Agreement,  dated July 31, 1997 by and between U.S.
              Health  Management  Corporation  , Raymond V.  Damadian,  M.D.  MR
              Scanning  Centers  Management  Company  and  Raymond V.  Damadian,
              incorporated   herein  by   reference   to  Exhibit   2.1  to  the
              Registrant's Form 8-K, July 31, 1997, Commission File No: 0-10248.

       10.9*  Merger  Agreement and  Supplemental  Agreement dated June 17, 1997
              and  Letter of  Amendment  dated  June 27,  1997 by and among U.S.
              Health Management  Corporation and Affordable  Diagnostics Inc. et
              al.,  incorporated  herein  by  reference  to  Exhibit  2.1 to the
              Registrant's 8-K, June 30, 1997, Commission File No: 0-10248.

       10.10* Stock Purchase  Agreement dated March 20, 1998 by and among Health
              Management  Corporation of America,  Fonar  Corporation,  Giovanni
              Marciano, Glenn Muraca et al., incorporated herein by reference to
              Exhibit 2.1 to the  Registrant's  8-K, March 20, 1998,  Commission
              File No: 0-10248.

       10.11* Stock Purchase Agreement dated August 20, 1998 by and among Health
              Management  Corporation  of  America,  Fonar  Corporation,  Stuart
              Blumberg  and Steven  Jonas,  incorporated  herein by reference to
              Exhibit 2 to the Registrant's 8-K,  September 3, 1998,  Commission
              File No. 0-10248.

       10.12* Purchase Agreement dated May 24, 2001 by and between Fonar and The
              Tail Wind Fund Ltd.  incorporated  herein by  reference to Exhibit
              10.1 to the Registrant's current report on Form 8-K filed June 11,
              2001. Commission File No. 0-10248.

       10.13* Registration  Rights  Agreement  dated  May 24,  2001 by and among
              Fonar, The Tail Wind Fund Ltd. and Roan Meyers, Inc.  incorporated
              herein by reference to Exhibit  10.2 to the  Registrant's  current
              report  on Form 8-K  filed  June  11,  2001.  Commission  File No.
              0-10248.

       10.14* Callable Purchase Warrant.

       23.1   Consent of Marcum & Kliegman LLP,  Certified  Public  Accountants.
              (See Exhibits).

       23.2   (Consent of Counsel is included in Exhibit 5).


       *      Exhibits incorporated by reference.

       Financial Statement Schedules

       None

       Item 17. Undertakings

         The undersigned registrant hereby undertakes:

     (a)  To file,  during any period in which offers or sales are being made, a
          post-effective amendment to this registration statement:

          (i)  To include any  prospectus  required  by section  10(a)(3) of the
               Securities Act of 1933;

          (ii) To reflect in the  prospectus  any facts or events  arising after
               the  effective  date of the  registration  statement (or the most
               recent post-effective  amendment thereof) which,  individually or
               in  the  aggregate,   represent  a  fundamental   change  in  the
               information   set   forth   in   the   registration    statement.
               Notwithstanding the foregoing, any increase or decrease in volume
               of  securities  offered (if the total dollar value of  securities
               offered  would not  exceed  that  which was  registered)  and any
               deviation  from  the low or  high  end of the  estimated  maximum
               offering  range may be reflected in the form of prospectus  filed
               with the Commission pursuant to Rule 424(b) if, in the aggregate,
               the  changes  in volume  and price  represent  no more than a 20%
               change in the maximum  aggregate  offering price set forth in the
               "Calculation  of   Registration   Fee"  table  in  the  effective
               registration statement. (iii) To include any material information
               with respect to the plan of distribution not previously disclosed
               in the  registration  statement  or any  material  change to such
               information in the registration statement.

     (b)  That for the purpose of determining any liability under the Securities
          Act of 1933, each such post-effective  amendment shall be deemed to be
          a new  registration  statement  relating  to  the  securities  offered
          therein,  and the  offering of such  securities  at that time shall be
          deemed to be the initial bona fide offering thereof.

     (c)  To remove from registration by means of a post-effective amendment any
          of  the  securities  being  registered  which  remain  unsold  at  the
          termination of the offering.

     The  undersigned  registrant  hereby  undertakes  that, for the purposes of
determining  any liability  under the Securities Act of 1933, each filing of the
registrant's  annual report  pursuant to section 13 (a) or section 15 (d) of the
Securities  Exchange  Act of  1934  that is  incorporated  by  reference  in the
registration  statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and controlling  persons of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

<PAGE>
                                   SIGNATURES

     Pursuant to the  requirements of the Securities Act of 1933, the registrant
certifies  that it has  reasonable  grounds to believe  that it meets all of the
requirements  for  filing  on Form S-3 and has  duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, on October 22, 2002.

Dated:  October 22, 2002
                                FONAR CORPORATION

                                By:  /s/ Raymond V. Damadian
                                     Raymond V. Damadian,
                                     President, Acting Chief  Financial  Officer
                                     and Acting Principal Accounting Officer
                                     Signing in his capacities as Principal
                                     Executive Officer, Principal Financial
                                     Officer and Principal Accounting Officer

     Pursuant to the requirements of the Securities Act of 1933, this report has
been signed below by the following  persons on behalf of the  registrant  and in
the capacities and on the dates indicated.

Signature                       Title                           Date
/s/ Raymond V. Damadian         Chairman of the Board
- ------------------------        of Directors, President
Raymond V. Damadian             and a Director (Principal       October 22, 2002
                                Executive Officer,
                                Principal Financial
                                Officer and Principal
                                Accounting Officer)

/s/ Claudette J.V. Chan         Director                        October 22, 2002
- ------------------------
Claudette J.V. Chan

/s/ Robert J. Janoff            Director                        October 22, 2002
- --------------------
Robert J. Janoff

/s/ Charles N. O'Data           Director                        October 22, 2002
- ----------------------
Charles N. O'Data

/s/ Robert Djerejian            Director                        October 22, 2002
Robert Djerejian


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4
<SEQUENCE>3
<FILENAME>x047.txt
<TEXT>
Exhibit 4.7

     THIS SECURITY HAS NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS
AMENDED  (THE  "ACT"),  OR UNDER ANY STATE  SECURITIES  LAWS,  IN RELIANCE  UPON
EXEMPTIONS FROM REGISTRATION FOR NON-PUBLIC OFFERINGS.  THIS SECURITY MAY NOT BE
SOLD OR TRANSFERRED  UNLESS IT IS REGISTERED  UNDER THE ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR UNLESS FONAR RECEIVES AN OPINION OF COUNSEL  REASONABLY
SATISFACTORY  TO IT THAT AN EXEMPTION  FROM  REGISTRATION  IS AVAILABLE  (UNLESS
WAIVED).

     VOID AFTER 5:00 P.M. EASTERN TIME ON AUGUST 30, 2005 ("EXPIRATION DATE").

                                FONAR CORPORATION

                                CALLABLE WARRANT

                    WARRANT ("WARRANT") TO PURCHASE SHARES OF
                    COMMON STOCK, $0.0001 PAR VALUE PER SHARE

     This is to certify  that,  for VALUE  RECEIVED,  The Tail Wind  Fund,  Ltd.
("Warrantholder"),  is entitled to purchase,  subject to the  provisions of this
Warrant,  from Fonar  Corporation,  a  corporation  organized  under the laws of
Delaware ("Company"),  at any time after the issuance hereof, but not later than
5:00 P.M.,  Eastern time, on the third (3rd)  anniversary  of such issuance date
("Expiration  Date"),  2,000,000  shares  ("Warrant  Shares")  of Common  Stock,
$0.0001 par value  ("Common  Stock"),  of the Company,  at an exercise price per
share  equal  to the  average  closing  bid  price  of the  Common  Stock on the
Principal Market for the full calendar month  immediately  preceding the date of
exercise,  provided that such exercise  price shall be no less than $2.00 and no
more than $6.00 (as such figures,  shall be appropriately and equitably adjusted
as provided  herein) (the exercise  price in effect from time to time  hereafter
being  herein  called  the  "Warrant  Price").  The  number  of  Warrant  Shares
purchasable upon exercise of this Warrant and the Warrant Price shall be subject
to adjustment from time to time as described herein.

     This Warrant has been issued  pursuant to the terms of the First  Amendment
to  Callable  Warrant  ("Amendment")  dated as of June 21,  2002 and the  Second
Amendment  to Callable  Warrant  dated as of August 15,  2002,  each between the
Company and  Warrantholder.  Capitalized terms used herein and not defined shall
have the meaning  specified in the  Purchase  Agreement  ("Purchase  Agreement")
dated as of May 24, 2002 between the Company and the Warrantholder.

     Section 1. Registration.  The Company shall maintain books for the transfer
and registration of the Warrant.  Upon the initial issuance of the Warrant,  the
Company shall issue and register the Warrant in the name of the Warrantholder.

     Section 2. Transfers.  As provided herein,  this Warrant may be transferred
only pursuant to a  registration  statement  filed under the  Securities  Act of
1933,  as  amended   ("Securities   Act")  or  an  exemption  from  registration
thereunder.  Subject to such  restrictions,  the  Company  shall  transfer  this
Warrant from time to time,  upon the books to be  maintained  by the Company for
that  purpose,   upon  surrender  thereof  for  transfer  properly  endorsed  or
accompanied by appropriate instructions for transfer upon any such transfer, and
a new Warrant  shall be issued to the  transferee  and the  surrendered  Warrant
shall be canceled by the Company.

     Section 3.

     (a)  Exercise  of  Warrant.   Subject  to  the   provisions   hereof,   the
Warrantholder  may exercise  this  Warrant in whole or in part,  at any time and
from time to time after the issuance hereof,  upon delivery of the duly executed
Warrant exercise form attached hereto (the "Exercise  Agreement") to the Company
during  normal  business  hours on any business day at the  Company's  principal
executive  offices  (or such  other  office or agency of the  Company  as it may
designate  by notice to the holder  hereof),  and upon payment to the Company in
cash, by certified or official bank check or by wire transfer for the account of
the  Company  of the  Warrant  Price for the  Warrant  Shares  specified  in the
Exercise Agreement. The Warrant Shares so purchased shall be deemed to be issued
to the holder  hereof or such  holder's  designee,  as the record  owner of such
shares,  as of the  close of  business  on the date on which  this  Warrant  (or
evidence of loss, theft or destruction thereof) shall have been surrendered, the
completed  Exercise  Agreement shall have been delivered.  Certificates  for the
Warrant  Shares  so  purchased,  representing  the  aggregate  number  of shares
specified in the  Exercise  Agreement,  shall be delivered to the holder  hereof
within a reasonable  time,  not exceeding  three (3) business  days,  after this
Warrant shall have been so exercised.  The certificates so delivered shall be in
such  denominations  as may be  requested  by the  holder  hereof  and  shall be
registered  in the name of such holder or such other name as shall be designated
by such holder.  If this Warrant shall have been exercised  only in part,  then,
unless this Warrant has expired,  the Company shall, at its expense, at the time
of  delivery  of  such  certificates,  deliver  to  the  holder  a  new  Warrant
representing  the number of shares with respect to which this Warrant  shall not
then have been exercised.

     Book-Entry. Notwithstanding anything to the contrary set forth herein, upon
exercise or  redemption  of any portion of this Warrant in  accordance  with the
terms hereof,  the Warrantholder  shall not be required to physically  surrender
this Warrant to the Company  unless such holder is purchasing the full amount of
Warrant Shares  represented by this Warrant.  The  Warrantholder and the Company
shall  maintain  records  showing the number of Warrant  Shares so  purchased or
redeemed  hereunder  and the dates of such  purchases  or shall  use such  other
method,  reasonably satisfactory to the Warrantholder and the Company, so as not
to  require  physical  surrender  of this  Warrant  upon each such  exercise  or
redemption. The Warrantholder and any assignee, by acceptance of this Warrant or
a new Warrant,  acknowledge  and agree that, by reason of the provisions of this
paragraph,  following  exercise  of any portion of this  Warrant,  the number of
Warrant  Shares which may be purchased upon exercise of this Warrant may be less
than the number of Warrant Shares set forth on the face hereof.

     (b) Redemption of Warrant.  Subject to the Purchase Agreement, in the event
that the average closing bid price of the Company's Common Stock (as reported by
the Nasdaq  Stock  Market) is greater than 115% of the then  applicable  Warrant
Price  hereunder for a five (5)  consecutive  trading day period in any calendar
month (i.e.,  June 1 to June 30, July 1 to July 31, etc.)  ("Pre-Call  Period"),
the Company  shall have the right,  upon at least five (5)  trading  days' prior
written  notice  to the  Warrantholder  ("Redemption  Notice"),  to redeem up to
200,000  shares  underlying  this  Warrant  (not  previously  exercised),  at  a
redemption  price equal to $.01 per Warrant  Share  issuable  hereunder  for the
portion  hereof being  redeemed,  provided that (1) the Company may not exercise
such redemption  right more than once in any calendar month, and (2) the Company
may  reduce  the then  applicable  Warrant  Price  to any  lower  Warrant  Price
hereunder  which  was  previously  in effect  hereunder,  by  delivering  to the
Warrantholder an irrevocable  written notice ("Reduction  Notice") at least five
(5) days prior to any such reduction.  Any such Reduction Notice shall specify a
reduction  date which is on or prior to the twentieth day of such calendar month
(but at least 5 days  after  such  notice)  and shall  specify  the new  reduced
Warrant Price hereunder. For clarification purposes, (a) the Pre-Call Period (or
the new Pre-Call  Period if there was a prior  redemption  during such  calendar
month) shall commence as of the date of such reduction, (b) the aggregate number
of shares that may be redeemed in any  calendar  month shall not exceed  200,000
shares regardless of any such reduction, (c) any Warrant Price so reduced by the
Company  shall remain at such reduced  Warrant  Price for the  remainder of such
calendar  month for all purposes  hereunder,  including  without  limitation for
purchases of shares of Common Stock hereunder by the Warrantholder upon exercise
hereof,  and (d) the Company may deliver a Redemption Notice following a Warrant
Price reduction  hereunder only after the applicable Pre-Call Period has expired
with the  average  closing  bid  price of the  Company's  Common  Stock for such
Pre-Call Period exceeding 115% of the new reduced Warrant Price.

     Any  redemption  hereunder  shall  occur  on  the  date  specified  in  the
Redemption Notice  ("Redemption  Date"),  provided that such Redemption Date may
not occur until at least five (5) trading days  following  the date on which the
Warrantholder received the Redemption Notice (the "Redemption Notice Date"). The
Company  may not  deliver  the  Redemption  Notice  unless and until the average
closing bid price of the Company's Common Stock (as reported by the Nasdaq Stock
Market) is greater than 115% of the applicable  Warrant Price (as may be reduced
hereunder) over a five (5) consecutive  trading day period  occurring in any one
calendar  month.  The period from the  Redemption  Notice Date to the Redemption
Date shall be referred to herein as the "Post-Call  Period".  The  Warrantholder
may exercise this Warrant, including any portion subject to a Redemption Notice,
at any time and from time to time during the period from the  Redemption  Notice
Date through the date on which the redemption price for such Warrants is paid by
the Company  (and  thereafter  if such  redemption  price is not paid),  and the
Company shall honor all tendered  Exercise  Agreements  during such period.  Any
Redemption  Notice  under this  Section  shall be  irrevocable.  If the  Company
intends (or is only  permitted) to redeem less than all of the then  outstanding
Warrants issued to Purchasers under the Purchase Agreement,  it shall do so on a
pro rata basis among such holders in accordance  with this  Section.  Failure by
the  Company  to redeem  this  Warrant  on a timely  basis  after  delivering  a
Redemption  Notice shall result in the Company being  prohibited from exercising
such right pursuant to this Section again.

     Notwithstanding  anything to the  contrary  herein,  the  Company  shall be
prohibited  from  exercising  its right to redeem this Warrant  pursuant to this
Section unless at all times during the Pre-Call Period and Post-Call  Period (i)
all the Warrant  Shares with respect to this Warrant are covered by an effective
registration  statement  under the Securities Act and a deliverable  prospectus,
(ii) the Warrant  Shares with  respect to this  Warrant are listed and traded on
the Nasdaq Stock Market, (iii) the Company is not in breach of any provisions of
this Warrant or the other Agreements,  and (iv) the average closing bid price of
the  Company's  Common Stock (as reported by the Nasdaq Stock Market) is greater
than 115% of the applicable Warrant Price (as may be reduced hereunder).

     Section 4. Compliance with the Securities Act of 1933. Neither this Warrant
nor the Common Stock issued upon exercise  hereof nor any other security  issued
or  issuable  upon  exercise  of this  Warrant  may be offered or sold except as
provided in this agreement and in conformity with the Securities Act of 1933, as
amended,  and then only  against  receipt of an agreement of such person to whom
such offer of sale is made to comply with the  provisions of this Section 4 with
respect to any resale or other  disposition  of such  security.  The Company may
cause the legend set forth on the first page of this  Warrant to be set forth on
each Warrant or similar legend on any security  issued or issuable upon exercise
of this Warrant until the Warrant  Shares have been  registered for resale under
the Registration Rights Agreement or until Rule 144 is available, unless counsel
for the  Company is of the opinion as to any such  security  that such legend is
unnecessary.

     Section 5.  Payment of Taxes.  The Company will pay any  documentary  stamp
taxes  attributable to the initial  issuance of Warrant Shares issuable upon the
exercise  of the  Warrant;  provided,  however,  that the  Company  shall not be
required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for Warrant Shares in a
name  other  than that of the  registered  holder of this  Warrant in respect of
which  such  shares  are  issued,  and in such case,  the  Company  shall not be
required to issue or deliver any  certificate  for Warrant Shares or any Warrant
until the person  requesting the same has paid to the Company the amount of such
tax or has  established  to the  Company's  satisfaction  that such tax has been
paid.  The holder shall be  responsible  for income  taxes due under  federal or
state law, if any such tax is due.

     Section 6.  Mutilated or Missing  Warrants.  In case this Warrant  shall be
mutilated,  lost, stolen, or destroyed,  the Company shall issue in exchange and
substitution of and upon  cancellation of the mutilated  Warrant,  or in lieu of
and  substitution  for the Warrant lost,  stolen or destroyed,  a new Warrant of
like tenor and for the  purchase  of a like number of Warrant  Shares,  but only
upon receipt of evidence  reasonably  satisfactory  to the Company of such loss,
theft or  destruction  of the  Warrant,  and with  respect to a lost,  stolen or
destroyed  Warrant,  reasonable  indemnity  or bond  with  respect  thereto,  if
requested by the Company.

     Section 7. Reservation of Common Stock.  The Company hereby  represents and
warrants that there have been reserved,  and the Company shall at all applicable
times keep reserved,  out of the authorized and unissued  Common Stock, a number
of shares  sufficient  to provide  for the  exercise  of the rights of  purchase
represented  by the  Warrant,  and  the  transfer  agent  for the  Common  Stock
("Transfer Agent"),  and every subsequent transfer agent for the Common Stock or
other shares of the Company's capital stock issuable upon the exercise of any of
the right of purchase aforesaid, shall be irrevocably authorized and directed at
all times to reserve such number of  authorized  and  unissued  shares of Common
Stock as shall be  requisite  for such  purpose.  The  Company  agrees  that all
Warrant  Shares  issued upon  exercise  of the Warrant  shall be, at the time of
delivery of the certificates for such Warrant Shares,  duly authorized,  validly
issued, fully paid and non-assessable shares of Common Stock of the Company. The
Company  will keep a conformed  copy of this  Warrant on file with the  Transfer
Agent and with every  subsequent  transfer  agent for the Common  Stock or other
shares of the Company's  capital stock  issuable upon the exercise of the rights
of purchase  represented  by the  Warrant.  The Company will supply from time to
time the Transfer Agent with duly executed stock certificates  required to honor
the outstanding Warrant.

     Section 8. Warrant  Price.  The Warrant  Price,  subject to  adjustment  as
provided in Section 9, shall, if payment is made in cash or by certified  check,
be payable in lawful money of the United States of America.

     Section 9.  Adjustments.  Subject and  pursuant to the  provisions  of this
Section  9, the  Warrant  Price and  number of  Warrant  Shares  subject to this
Warrant  shall  be  subject  to  adjustment  from  time  to  time  as set  forth
hereinafter. For purposes hereof, the term Warrant Price shall include the $2.00
minimum  and $6.00  maximum  exercise  prices and the closing bid prices used in
determining the Warrant Price which occurred prior to the applicable event.

     (a) If the Company shall at any time or from time to time while the Warrant
is  outstanding,  pay a dividend or make a  distribution  on its Common Stock in
shares of Common Stock,  subdivide its outstanding shares of Common Stock into a
greater number of shares or combine its outstanding shares into a smaller number
of shares or issue by reclassification of its outstanding shares of Common Stock
any  shares  of its  capital  stock  (including  any  such  reclassification  in
connection with a consolidation or merger in which the Company is the continuing
corporation), then the number of Warrant Shares purchasable upon exercise of the
Warrant and the Warrant Price in effect immediately prior to the date upon which
such change shall become effective, shall be adjusted by the Company so that the
Warrantholder thereafter exercising the Warrant shall be entitled to receive the
number of shares of Common Stock or other capital stock which the  Warrantholder
would have received if the Warrant had been exercised  immediately prior to such
event.  Such  adjustment  shall be made  successively  whenever any event listed
above shall occur.

     (b) If any capital reorganization, reclassification of the capital stock of
the Company, consolidation or merger of the Company with another corporation, or
sale, transfer or other disposition of all or substantially all of the Company's
assets to another  corporation  shall be effected,  then, as a condition of such
reorganization, reclassification, consolidation, merger, sale, transfer or other
disposition,   lawful  and  adequate   provision  shall  be  made  whereby  each
Warrantholder  shall  thereafter have the right to purchase and receive upon the
basis and upon the  terms and  conditions  herein  specified  and in lieu of the
Warrant Shares  immediately  theretofore  issuable upon exercise of the Warrant,
such  shares of stock,  securities  or assets  as would  have been  issuable  or
payable with  respect to or in exchange for a number of Warrant  Shares equal to
the number of Warrant Shares immediately  theretofore  issuable upon exercise of
the Warrant, had such reorganization,  reclassification,  consolidation, merger,
sale,  transfer  or other  disposition  not  taken  place,  and in any such case
appropriate  provision shall be made with respect to the rights and interests of
each  Warrantholder to the end that the provisions  hereof  (including,  without
limitations,  provision for adjustment of the Warrant Price) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any shares
of stock,  securities or  properties  thereafter  deliverable  upon the exercise
hereof.  The  Company  shall not effect any such  consolidation,  merger,  sale,
transfer  or  other  disposition  unless  prior  to or  simultaneously  with the
consummation  thereof  the  successor  corporation  (if other than the  Company)
resulting from such  consolidation or merger,  or the corporation  purchasing or
otherwise acquiring such assets or other appropriate corporation or entity shall
assume,  by written  instrument  executed  and  delivered  to the  Company,  the
obligation  to  deliver  to the  holder  of the  Warrant  such  shares of stock,
securities  or assets as, in  accordance  with the  foregoing  provisions,  such
holder may be entitled to purchase and the other obligations under this Warrant.
The  provisions  of this  paragraph  (b)  shall  similarly  apply to  successive
reorganizations, reclassifications, consolidations, mergers, sales, transfers or
other dispositions.

     (c) In case the  Company  shall  fix a  record  date  for the  making  of a
distribution  to all holders of Common Stock  (including  any such  distribution
made in connection  with a  consolidation  or merger in which the Company is the
continuing  corporation) of evidences of indebtedness or assets (other than cash
dividends or cash distributions  payable out of consolidated  earnings or earned
surplus  or  dividends  or  distributions  referred  to  in  Section  9(a)),  or
subscription  rights or warrants,  the Warrant  Price to be in effect after such
record date shall be  determined  by  multiplying  the  Warrant  Price in effect
immediately  prior to such  record date by a fraction,  the  numerator  of which
shall be the total number of shares of Common Stock  outstanding  multiplied  by
the Fair Market  Value per share of Common  Stock (as defined  below),  less the
fair market value (as  determined  by the  Company's  Board of Directors in good
faith) of said assets or evidences of indebtedness  so  distributed,  or of such
subscription rights or warrants, and the denominator of which shall be the total
number of shares of Common  Stock  outstanding  multiplied  by such current Fair
Market  Value  per  share  of  Common  Stock.  Such  adjustment  shall  be  made
successively  whenever such a record date is fixed. For this purpose,  the "Fair
Market Value" of the Common Stock shall be the closing price of the Common Stock
as  reported  by the  Nasdaq  Stock  Market  for the thirty  (30)  trading  days
immediately preceding the date of the Exercise Agreement.

     (d) For the duration of the term of this  Warrant,  if the Company shall at
any time or from time to time issue or sell  securities  for a Per Share Selling
Price (as such term is defined in the  Debentures)  less than the Warrant  Price
(other than issuances of Underlying  Shares  pursuant to Debentures and Warrants
under the Purchase Agreement, issuances described in and permitted under Section
7.2(b)(iii)  of the Purchase  Agreement and other than issuances of Common Stock
under the Company's  duly adopted stock option and bonus plans for employees and
directors),  then the Warrant  Price shall be  automatically  reset (if it would
result in a reduction of such price) to a price equal to such Per Share  Selling
Price.  For  clarification   purposes,  the  foregoing  reset  only  applies  to
adjustment  of the $2.00 minimum  Warrant  Price and the $6.00  maximum  Warrant
Price (as such figures may have been previously adjusted hereunder).  The number
of  Warrant  Shares  shall  be  proportionally  increased  in the  event  of any
adjustments  pursuant  to  this  paragraph.   Such  adjustments  shall  be  made
successively  whenever such sales are made. If an adjustment (the  "Adjustment")
of the Warrant Price is required  pursuant hereto,  the Company shall deliver to
the Warrantholder,  within eight business days of the closing of the transaction
giving rise to the Adjustment  ("Delivery Date"), a notice ("Adjustment Notice")
stating  that such  Warrant  Price  has been  automatically  adjusted  as of the
Delivery Date, and such notice shall constitute an amendment to this Warrant. In
the event the Company fails to deliver the  Adjustment  Notice by the applicable
Delivery  Date,  the Company  shall be liable to the  Warrantholder  for a delay
payment, as liquidated damages,  equal to 2% of (x) the number of Warrant Shares
issuable  hereunder times (y) the Fair Market Value per share, per month payable
in Common Stock or cash, at the Warrantholder's  election  (provided,  that such
failure to notify shall not affect  automatic  adjustment of the Warrant Price).
The Company shall give to the  Warrantholder  written notice of any such sale of
Common  Stock  within 24 hours of the closing of any such sale and shall  within
such 24 hour period issue a press release announcing such sale.

     (e) An adjustment shall become effective  immediately after the record date
in the case of each dividend or distribution and immediately after the effective
date of each other event which requires an adjustment.

     (f) In the  event  that,  as a result of an  adjustment  made  pursuant  to
Section 9, the holder of this  Warrant  shall  become  entitled  to receive  any
shares of capital stock of the Company  other than shares of Common  Stock,  the
number of such other shares so receivable upon exercise of this Warrant shall be
subject  thereafter to adjustment  from time to time in a manner and on terms as
nearly  equivalent as practicable to the provisions  with respect to the Warrant
Shares contained in this Warrant.

     (g) In the event of any adjustment in the number of Warrant Shares issuable
hereunder  upon exercise,  the Warrant Price shall be inversely  proportionately
increased or  decreased,  as the case may be, such that the  aggregate  purchase
price for Warrant  Shares upon full  exercise of this  Warrant  shall remain the
same. Similarly, in the event of any adjustment in the Warrant Price, the number
of  Warrant  Shares   issuable   hereunder  upon  exercise  shall  be  inversely
proportionately  increased  or  decreased,  as the  case may be,  such  that the
aggregate  purchase  price for Warrant Shares upon full exercise of this Warrant
shall remain the same.

     Section 10. Fractional Interest. The Company shall not be required to issue
fractions of Warrant Shares upon the exercise of the Warrant. If any fraction of
a Warrant Share would,  except for the  provisions of this Section,  be issuable
upon the exercise of the Warrant (or specified  portions  thereof),  the Company
shall round such  calculation  to the nearest  whole  number and  disregard  the
fraction.

     Section 11.  Benefits.  Nothing in this Warrant  shall be construed to give
any person,  firm or corporation  (other than the Company and the Warrantholder)
any legal or equitable right, remedy or claim, it being agreed that this Warrant
shall  be  for  the  sole  and   exclusive   benefit  of  the  Company  and  the
Warrantholder.

     Section  12.  Notices to  Warrantholder.  Upon the  happening  of any event
requiring an adjustment of the Warrant Price,  the Company shall  forthwith give
written  notice  thereof to the  Warrantholder  at the address  appearing in the
records of the  Company,  stating the  adjusted  Warrant  Price and the adjusted
number of  Warrant  Shares  resulting  from  such  event  and  setting  forth in
reasonable  detail  the  method of  calculation  and the facts  upon  which such
calculation  is  based.  In the  event of a  dispute  with  respect  to any such
calculation,  the  certificate  of the Company's  independent  certified  public
accountants  shall be conclusive  evidence of the correctness of any computation
made, absent manifest error. Failure to give such notice to the Warrantholder or
any defect  therein  shall not affect the  legality  or  validity of the subject
adjustment.  At the  Warrantholder's  request,  the Company shall deliver to the
Warrantholder  as of a requested date a notice  specifying the Warrant Price and
the number of Warrant  Shares into which this Warrant is  exercisable as of such
date.

     Section 13. Identity of Transfer  Agent.  The Transfer Agent for the Common
Stock is:

     Computershare (f/k/a Securities Transfer Trust, Inc.)
     12039 W. Alameda Parkway
     Lakewood, Colorado 80228

     Forthwith upon the  appointment  of any  subsequent  transfer agent for the
Common Stock or other shares of the Company's  capital  stock  issuable upon the
exercise of the rights of purchase  represented by the Warrant, the Company will
fax to the  Warrantholder a statement setting forth the name and address of such
transfer agent.

     Section 14. Notices.  Any notice pursuant hereto to be given or made by the
Warrantholder  to  or on  the  Company  shall  be  sufficiently  given  or  made
personally or if sent by an  internationally  recognized  courier by next day or
two day delivery service, addressed as follows:

     Fonar Corporation
     110 Marcus Drive
     Melville, New York 11747
     Telephone:        (631) 694-2929
     Fax:              (631) 249-3734
     Attention:        President

or such other  address as the  Company  may  specify in writing by notice to the
Warrantholder complying as to delivery with the terms of this Section 14.

     Any notice  pursuant hereto to be given or made by the Company to or on the
Warrantholder shall be sufficiently given or made if personally  delivered or if
sent by an  internationally  recognized  courier service by overnight or two-day
service,  to the address set forth on the books of the Company or, as to each of
the Company and the Warrantholder,  at such other address as shall be designated
by such party by written notice to the other party complying as to delivery with
the terms of this Section 14.

     All such notices,  requests,  demands,  directions and other communications
shall,  when sent by courier,  be effective two (2) days after  delivery to such
courier as provided and addressed as aforesaid.

     Section 15.  Registration  Rights.  The initial  holder of this  Warrant is
entitled to the benefit of certain registration rights in respect of the Warrant
Shares as provided in the Amendment,  which references the  Registration  Rights
Agreement.

     Section 16.  Successors.  All the covenants and provisions hereof by or for
the  benefit of the  Warrantholder  shall  bind and inure to the  benefit of its
respective successors and assigns hereunder.

     Section 17.  Governing  Law.  This Warrant shall be deemed to be a contract
made  under  the laws of the  State of New York,  without  giving  effect to its
conflict  of law  principles,  and  for  all  purposes  shall  be  construed  in
accordance with the laws of said State.

     Section 18. 9.9% and 19.9% Limitations.

     (a)  Notwithstanding  anything to the contrary contained herein, the number
of shares of Common  Stock  that may be  acquired  by the holder  upon  exercise
pursuant to the terms hereof  shall not exceed a number that,  when added to the
total number of shares of Common Stock deemed  beneficially owned by such holder
(other  than by virtue  of the  ownership  of  securities  or rights to  acquire
securities  (including the Warrant Shares) that have limitations on the holder's
right to  convert,  exercise  or purchase  similar to the  limitation  set forth
herein),  together  with all shares of Common  Stock deemed  beneficially  owned
(other  than by virtue  of the  ownership  of  securities  or rights to  acquire
securities that have  limitations on the right to convert,  exercise or purchase
similar to the  limitation  set forth herein) by the holder's  "affiliates"  (as
defined in Rule 144 of the Act) ("Aggregation Parties") that would be aggregated
for  purposes  of  determining  whether  a  group  under  Section  13(d)  of the
Securities  Exchange  Act of 1934 as amended,  exists,  would exceed 9.9% of the
total  issued  and  outstanding  shares of the  Common  Stock  (the  "Restricted
Ownership  Percentage").  Each  holder  shall have the right (w) at any time and
from time to time to reduce its Restricted Ownership Percentage immediately upon
notice to the  Corporation and (x) (subject to waiver) at any time and from time
to time, to increase its  Restricted  Ownership  Percentage  immediately  in the
event  of the  announcement  as  pending  or  planned,  of a change  of  control
transaction  (including  without limitation a transaction that would result in a
transfer  of more  than  50% of the  Company's  voting  power  or  equity,  or a
transaction that would result in a person or "group" being deemed the beneficial
owner of 50% or more of the Company's voting power or equity).

     (b)  Notwithstanding  anything  contained  herein,  in the  event  that the
Warrantholder  has timely  exercised  this  Warrant and the issuance of all or a
portion of the  Warrant  Shares to be issued  pursuant  to such  exercise  would
constitute a breach of the Company's  obligations under the rules or regulations
of the Nasdaq Stock Market as they apply to the Company,  or any other principal
securities  exchange or market ("Principal  Market") upon which the Common Stock
is or becomes  traded (the "Cap  Regulations"),  then the  Company  shall not be
obligated  to issue any such  Warrant  Shares to the extent  such  shares are in
excess of the maximum  permissible  amount under such Cap  Regulations  ("Excess
Shares").  Within five (5) days following any  occurrence of Excess Shares,  the
Company shall promptly pay to the Purchaser, in lieu of the Purchaser's right to
receive such Excess Shares,  an amount equal to 120% of the  difference  between
(a) the number of Excess  Shares  multiplied by the closing sale price per share
of Common Stock on the Principal Market on the trading day immediately preceding
the date of the exercise of this Warrant,  and (b) the aggregate  exercise price
for such Excess Shares.  Only shares of Common Stock  acquired  pursuant to this
Warrant and the  Purchase  Agreement  (including  Underlying  Shares and Warrant
Shares  as  defined  therein)  will  be  included  in  determining  whether  the
limitation  contained  herein  would be exceeded  for  purposes of this  Section
18(b).

     Section 19. Replacement  Warrants.  The Company agrees that within ten (10)
business days after any request from time to time of the Warrantholder, it shall
deliver to such holder a new Warrant in  substitution  of this Warrant  which is
identical  in  all  respects  except  that  the  then  Warrant  Price  shall  be
appropriately  specified in the Warrant, and the Warrant shall specify the fixed
number of Warrant  Shares into which the  Warrants  are then  exercisable.  Such
changes are intended not as amendments to the Warrant but only as  clarification
of the foregoing  numbers for convenience  purposes,  and such changes shall not
affect any provisions  concerning  adjustments to the Warrant Price or number of
Warrant Shares contained herein.

     Section 20.  Absolute  Obligation  to Issue Warrant  Shares.  The Company's
obligations  to issue and deliver  Warrant  Shares in accordance  with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by
the holder hereof to enforce the same, any waiver or consent with respect to any
provision hereof,  the recovery of any judgment against any Person or any action
to enforce the same,  or any setoff,  counterclaim,  recoupment,  limitation  or
termination,  or any breach or alleged  breach by the holder hereof or any other
Person of any obligation to the Company or any violation or alleged violation of
law  by  the  holder  or  any  other  Person,  and  irrespective  of  any  other
circumstance  which might  otherwise limit such obligation of the Company to the
holder hereof in  connection  with the issuance of Warrant  Shares.  The Company
will at no time close its  shareholder  books or  records  in any  manner  which
interferes with the timely exercise of this Warrant.

     Section 21. Assignment,  Etc. The Warrantholder may assign or transfer this
Warrant to any  transferee  only with the prior written  consent of the Company,
which  may  not  be  unreasonably   withheld  or  delayed,   provided  that  the
Warrantholder may assign or transfer this Warrant to any of such Warrantholder's
affiliates  without the consent of the Company.  The Warrantholder  shall notify
the Company of any such assignment or transfer  promptly.  This Warrant shall be
binding  upon the Company and its  successors  and shall inure to the benefit of
the Warrantholder and its successors and permitted assigns.

                            [Signature Page Follows]

<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
as of August 30, 2002.


                                        FONAR CORPORATION

                                        By:/s/Raymond V. Damadian
                                        Name: Raymond V. Damadian
                                        Title: President

Attest:

Sign: /s/ Henry T. Meyer

Print Name: Henry T. Meyer

<PAGE>

                                FONAR CORPORATION
                              WARRANT EXERCISE FORM

Fonar Corporation
110 Marcus Drive
Melville, New York 11747
Telephone:        (631) 694-2929
Fax:              (631) 249-3734
Attention:        President

     This  undersigned  hereby  irrevocably  elects  to  exercise  the  right of
purchase  represented  by the within  Warrant  ("Warrant")  for, and to purchase
thereunder  payment by cash, wire transfer or certified  check,  _______________
shares of Common Stock* ("Warrant  Shares")  provided for therein,  and requests
that certificates for the Warrant Shares be issued as follows:

                           -------------------------------
                           Name

                           -------------------------------
                           Address

                           ===============================

and,  if the  number  of  Warrant  Shares  shall not be all the  Warrant  Shares
purchasable upon exercise of the Warrant,  that a new Warrant for the balance of
the Warrant Shares (subject to book-entry).

     In lieu of delivering physical certificates representing the Warrant Shares
purchasable upon exercise of this Warrant, provided the Company's transfer agent
is  participating  in  the  Depository  Trust  Company  ("DTC")  Fast  Automated
Securities  Transfer ("FAST") program,  upon request of the Holder,  the Company
shall  use its  best  efforts  to cause  its  transfer  agent to  electronically
transmit  the  Warrant  Shares  issuable  upon  conversion  or  exercise  to the
undersigned, by crediting the account of the undersigned's prime broker with DTC
through its Deposit Withdrawal Agent Commission ("DWAC") system.

Dated:_______________________           Signature:

                                                 -------------------------------
                                                 Name (please print)

                                                 -------------------------------
                                                 Address


*    NOTE:  If exercise of the Warrant is made by  surrender  of the Warrant and
     the number of shares  indicated  exceeds  the  maximum  number of shares to
     which a holder is entitled,  the Company will issue such maximum  number of
     shares  purchasable upon exercise of the Warrant  registered in the name of
     the  undersigned  Warrantholder  or the  undersigned's  Assignee  as  below
     indicated and deliver same to the address stated below.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>4
<FILENAME>x051.txt
<TEXT>
                                   EXHIBIT 5.1

                                October 22, 2002

Fonar Corporation
110 Marcus Drive
Melville, New York  11747

     Re:  Fonar Corporation
          Registration Statement on Form S-3

Gentlemen:

     I  have  represented  Fonar  Corporation,   a  Delaware   corporation  (the
"Company"),  in connection  with the preparation of the  registration  statement
filed with the Securities and Exchange Commission on Form S-3 (the "Registration
Statement")  relating to the proposed  issuance of up to  2,000,000  shares (the
"Shares") of the Company's common stock, par value $.0001 per share (the "Common
Stock") upon the exercise of the Callable Warrants.  In this connection,  I have
examined  originals or copies of the Callable  Warrants dated August 30, 2002. I
have  also  examined  originals  or copies of such  other  documents,  corporate
records,  certificates  of  public  officials  and other  documents  as I deemed
necessary to examine for purposes of this opinion.

     I am of the  opinion  that when the shares of Common  Stock  covered by the
Registration  Statement  have been  issued in  accordance  with the terms of the
Warrants,  such shares of Common Stock will be duly authorized,  validly issued,
fully paid and nonassessable.

     I hereby  consent  to the  filing  of this  Opinion  as an  Exhibit  to the
Registration Statement.

                                                            Very truly yours,

                                                            /s/  Henry T. Meyer
                                                            Henry T. Meyer, Esq.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>5
<FILENAME>x231.txt
<TEXT>
                                  EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement on Form S-3 of our report dated  September 30, 2002,  which appears on
page 38 of the annual report on Form 10-K of Fonar  Corporation and Subsidiaries
for the year  ended  June 30,  2002 and to the  reference  to our Firm under the
caption  "Experts"  in the  Prospectus,  which  is  part  of  this  Registration
Statement.

/s/Marcum & Kliegman LLP
Marcum & Kliegman LLP

New York, New York
October 22, 2002

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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