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                                FONAR CORPORATION

     FonarMRInews                                            The  MRI Specialist
For    Immediate   Release                                   An ISO 9001 Company

Contact:    Daniel Culver,                                   110  Marcus   Drive
Director of Communications                                   Melville, NY  11742
David Terry, VP, Secretary                                   Tel:   631/694-2929
FONARinvestor @ fonar. com                                   Fax:   631/390-9540
================================================================================

        FONAR IMPROVES CASH POSITION 16% AND REVENUES 23% IN FISCAL 2003;
     First Managed Stand-Up MRI Center Nets $1.1 Million in Operating Income

MELVILLE,   NEW  YORK,   September  29,  2003  -  FONAR  Corporation,   The  MRI
Specialist(TM),  reported today a net loss of $15.0 million on revenues of $52.9
million for fiscal 2003,  as compared to a net loss of $22.9 million on revenues
of $43.2 million for fiscal 2002. This represents an increase of 23% in revenues
and a decrease in the net loss of 35% from fiscal 2002 to fiscal 2003.

Most  significantly,  revenues  attributable to the Company's  medical equipment
segment  increased by 85% to $30.0  million in fiscal 2003 from $16.2 million in
fiscal 2002.  Revenues from product sales more than doubled,  increasing by 115%
from $11.6 million in fiscal 2002 to $24.9 million in fiscal 2003,  attributable
primarily  to  the  increase  in  scanner  sales   revenues  for  the  Company's
Stand-Up(TM) MRI from $11.1 million to $24.3 million. In addition, the Company's
gross profit on product sales improved  significantly from 28% in fiscal 2002 to
35.6% in fiscal 2003. The Company's  backlog of unfilled  orders at July 1, 2003
was approximately $26.8 million, as compared to $25.5 million at July 1, 2002.

Confirming  the  Company's  expectations  of increased  demand for its scanners,
product  sales to unrelated  parties more than  tripled,  increasing  by 228% in
fiscal 2003 from $5.4  million in fiscal 2002 to $17.7  million in fiscal  2003.
Product  sales to  related  parties  increased  17.7% in  fiscal  2003 from $6.2
million in fiscal 2002 to $7.3 million in fiscal 2003.

Revenues  attributable  to  the  Company's  physician  and  diagnostic  services
management segment, Health Management Corporation of America, ("HMCA"), however,
decreased by 15.1% to $22.9  million in fiscal 2003 from $27.0 million in fiscal
2002,  reflecting the closing of certain MRI facilities and other facilities and
a decline in MRI scan volume at certain MRI facilities prior to the installation
of  Stand-Up(TM)  MRI's.  HMCA had an operating  loss of $3.8 million for fiscal
2003.  However,  HMCA now manages three MRI  facilities  with  Stand-Up(TM)  MRI
scanners,  one of which, located in Islandia, New York, produced $1.1 million in
operating  income  for HMCA,  for the year ended  June 30,  2003.  HMCA plans to
upgrade  additional  site  locations  as well,  and has leased  premises in Boca
Raton,  Florida for a  Stand-Up(TM)  MRI to replace the existing MRI facility in
Deerfield Beach, Florida.

The Company's consolidated  operating loss increased,  however, by 5.3% to $15.1
million for fiscal 2003 as compared to an  operating  loss of $14.4  million for
fiscal 2002. Of the operating loss,  however,  approximately  $800,000  resulted
from the writing down of the value (impairment) of the management agreement with
an unprofitable  physical  rehabilitation and therapy facility which HMCA closed
in fiscal 2003.

In addition,  HMCA  discontinued its operation of primary medical care practices
in fiscal 2003 when it sold A&A Services,  Inc.,  its  subsidiary  which managed
these practices. As a result of the sale, the Company recognized a net gain from
discontinued  operations  of $194,000 in fiscal 2003,  as compared to a net loss
from discontinued operations of $5.9 million in fiscal 2002.

The Company's cash, cash equivalents and marketable  securities increased by 16%
to $15.2 million at June 30, 2003 from $13.1 at June 30, 2002.

Raymond  Damadian,  president and chairman of FONAR,  said,  "The Company showed
several  important  developments in Fiscal 2003:  Revenues from our Stand-Up(TM)
MRI  more  than  doubled  and  cash  increased.   We  disposed  of  unprofitable
HMCA-managed physician practices,  and now have three HMCA-managed  Stand-Up(TM)
MRI sites in operation,  positioning  HMCA for a much improved  year.  Given the
marketplace  acceptance of the FONAR Stand-Up(TM) MRI, we expect next year to be
a very good one."

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                                                Fiscal 2003   Fiscal 2002
                                                -----------   ------------
      Revenues                                  $52,892,000    $43,161,000
      Net Loss From
        Continuing Operations                   (15,201,000)  (16,956,000)
      Net Gain (Loss) -
        Discontinued Operations                     195,000    (5,926,000)
                                                 ----------    ----------
      Net Loss                                 $(15,006,000) $(22,882,000)
                                                 ==========    ==========
      Basic & Diluted Net Loss/Share
        Continuing Operations                         (0.20)        (0.27)
      Basic & Diluted Net Loss/Share
        Discontinued Operations                                     (0.09)
                                                 ----------    ----------
      Basic & Diluted Net Loss/Share                  (0.20)        (0.36)
                                                 ==========    ==========
--------------------------------------------------------------------------------
            MRI Specialist, Stand-Up, Upright, Position Imaging and
                    PMRI are trademarks of FONAR Corporation.

              Be sure to visit Fonar's Web site for Company product
                            and investor information:
                                  www.fonar.com

This release may include forward-looking statements from the company that may or
may not materialize.  Additional  information on factors that could  potentially
affect the company's  financial  results may be found in the  company's  filings
with the Securities and Exchange Commission.

                           ###

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