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<SEC-DOCUMENT>0000355019-05-000004.txt : 20050216
<SEC-HEADER>0000355019-05-000004.hdr.sgml : 20050216
<ACCEPTANCE-DATETIME>20050216164849
ACCESSION NUMBER:		0000355019-05-000004
CONFORMED SUBMISSION TYPE:	S-8
PUBLIC DOCUMENT COUNT:		6
FILED AS OF DATE:		20050216
DATE AS OF CHANGE:		20050216
EFFECTIVENESS DATE:		20050216

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			FONAR CORP
		CENTRAL INDEX KEY:			0000355019
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				112464137
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		S-8
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-122859
		FILM NUMBER:		05621491

	BUSINESS ADDRESS:	
		STREET 1:		110 MARCUS DR
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
		BUSINESS PHONE:		6316942929

	MAIL ADDRESS:	
		STREET 1:		110 MARCUS DRIVE
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-8
<SEQUENCE>1
<FILENAME>s8-body.txt
<TEXT>
    As filed with the Securities and Exchange Commission on February 16, 2005
                                                  Registration No. ____________
   __________________________________________________________________________
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                FONAR CORPORATION
................................................................................
             (Exact name of registrant as specified in its charter)

          Delaware                                             11-2464137
................................................................................
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                              Identification No.)

110 Marcus Drive, Melville, New York                                    11747
................................................................................
(Address of Principal Executive Office)                              (Zip Code)

                             2005 Stock Bonus Plan
                        2005 Incentive Stock Option Plan
................................................................................
                           (Full Title of the plans)

        Raymond V. Damadian, 110 Marcus Drive, Melville, New York 11747
................................................................................
                     (Name and address of agent for service)

                                 (631) 694-2929
................................................................................
         (Telephone number, including area code, of agent for service)

                        CALCULATION OF REGISTRATION FEE
_______________________________________________________________________________
Title of  securities     Amt. to be     Proposed      Proposed      Amount of
to be registered         registered     maximum       maximum       registration
                                        offering      aggregate     fee
                                        price per     offering
                                        share         price
- -------------------------------------------------------------------------------
Common Stock
par value $.0001         3,000,000      $1.59         $4,770,000    $561.43
_______________________________________________________________________________
Common Stock
par value $.0001
underlying incentive     2,000,000      $1.59         $3,180,000    $374.29
stock options
- -------------------------------------------------------------------------------
Total                    5,000,000      $1.59         $7,950,000    $935.72

                 * Pursuant to Rule 457, subsections (h) and (c)
                       Specified Date: February 15, 2005
<PAGE>
                                     PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


Item 3. Incorporation of Documents by Reference.

     The following  documents,  filed with, or furnished to, the  Commission are
incorporated in this registration statement by reference:

     (a)  The  registrant's  latest annual report on Form 10-K filed pursuant to
          Section  13(a) or 15(d) of the  Securities  Exchange  Act of 1934,  as
          amended (the "Exchange Act").

     (b)  All other reports filed by the registrant pursuant to Section 13(a) or
          15(d) of the  Exchange Act since the end of the fiscal year covered by
          the annual report on Form 10-K referred to in (a) above.

     (c)  The description of securities  which is contained in Form 8-A filed by
          the  registrant  pursuant to Section 12 of the Exchange Act  including
          any  amendment  or  report  filed for the  purpose  of  updating  such
          description.

     All  documents  subsequently  filed by the  registrant  pursuant to Section
13(a),  13(c),  14 and  15(d) of the  Exchange  Act,  prior to the  filing  of a
post-effective amendment which either indicates that all securities offered have
been sold or deregisters all securities then remaining  unsold,  shall be deemed
to be incorporated by reference in this registration  statement and to be a part
hereof from the date of filing such documents.


Item 4. Description of Securities.

     The class of securities to be offered is registered under Section 12 of the
Exchange Act.


Item 5. Interests of Named Experts and Counsel.

     The  validity of the  securities  being  registered  will be passed upon by
Henry T. Meyer,  Esq.,  General  Counsel to the  registrant,  110 Marcus  Drive,
Melville,  New York  11747.  Mr.  Meyer is an  employee  of the  registrant  and
eligible to receive, in the discretion of the appropriate Committee or the Board
of  Directors,  awards of shares  under the 2005 Stock  Bonus Plan or  incentive
stock options under the 2005 Incentive Stock Option Plan.


Item 6. Indemnification of Directors and Officers.

     Article Eighth of the  Certificate  of  Incorporation,  as amended,  of the
registrant  provides as follows:  The  personal  liability  of  directors to the
Corporation  or its  stockholders  for  monetary  damages  for  breach  of their
fiduciary  duties  as  directors  is  eliminated,  provided  however,  that this
provision  shall not eliminate the liability of a director (i) for any breach of
the director's duty of loyalty to the Corporation or its stockholders,  (ii) for
acts or omissions not in good faith or which involve  intentional  misconduct or
knowing  violation of the law,  (iii) under Section 174 of the Delaware  General
Corporation  law, or (iv) for any transaction from which the director derived an
improper personal benefit.

Article  V  of  the   By-Laws  of  the   registrant   generally   provides   for
indemnification  of its officers and  directors to the full extent  permitted by
Delaware Corporation Law.

Section 145 of the Delaware General  Corporation Law permits  indemnification of
officers,  directors and employees of the Company under certain  conditions  and
subject to certain limitations.


Item 7. Exemption From Registration Claimed.

     Not  applicable.  No  restricted  securities  are to be reoffered or resold
pursuant to this registration statement.


Item 8. Exhibits.

5    Opinion of Counsel re Legality.

23.1 Consent of Independent Registered Public Accounting Firm.

23.2 Consent of Counsel is included in Exhibit 5.

99.1 2005 Stock Bonus Plan.

99.2 2005 Incentive Stock Option Plan


Item 9. Undertakings.

     The undersigned registrant hereby undertakes:

          (1) 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;

          (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.Provided,  however, that 1 (i) and 1(ii) do not apply if the
          information  required  to be included  in a  post-effective  amendment
          thereby is  contained  in  periodic  reports  filed by the  registrant
          pursuant to Section 13(a) or Section 15(d) of the Securities  Exchange
          Act of 1934 that are  incorporated  by reference  in the  registration
          statement.

     (2) 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.

     (3) To remove from registration by means of 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  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  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  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 that time shall be deemed to be the initial bona fide offering thereof.

     The  Certificate of  Incorporation  and By-Laws of the  registrant  contain
various  provisions for limitation of liability and  indemnification of officers
and  directors,  as described  in Item 6.  Section 145 of the  Delaware  General
Corporation  law permits  indemnification  of officers,  directors and employees
under certain conditions.

     Insofar as  indemnification  for liability 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-8 and has  duly  caused  this  registration
statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the Village of Melville, State of New York, on February 16, 2005.


                                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
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.

Signature                       Title                          Date


/s/ Raymond V. Damadian         Chairman of the Board          February 16, 2005
- -----------------------         of Directors, President
Raymond V. Damadian             and a Director
                                (Principal Executive Officer,
                                Principal Financial Officer and
                                Principal Accounting Officer)

/s/ Claudette J.V. Chan         Director                       February 16, 2005
- -----------------------
Claudette J.V. Chan

/s/ Robert J. Janoff            Director                       February 16, 2005
- -----------------------
Robert J. Janoff

/s/ Charles N. O'Data           Director                       February 16, 2005
- -----------------------
Charles N. O'Data

/s/ Robert Djerejian            Director                       February 16, 2005
- -----------------------
Robert Djerejian
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5
<SEQUENCE>2
<FILENAME>s8-x05.txt
<TEXT>
                                    EXHIBIT 5

                         OPINION OF COUNSEL RE: LEGALITY

                                                              February 16, 2005

Fonar Corporation
110 Marcus Drive
Melville, NY  11747

Dear Sirs:

     I refer to the Registration  Statement on Form S-8 to which this opinion is
an Exhibit (the "Registration  Statement"),  being filed by Fonar Corporation, a
Delaware   corporation  (the  "Company"),   with  the  Securities  and  Exchange
Commission under the Securities Act of 1933, as amended,  relating to: 3,000,000
shares  of the  Company's  Common  Stock  which may be  issued  pursuant  to the
Company's 2005 Stock Bonus Plan ("Bonus  Common Stock") and 2,000,000  shares of
the Company's  Common Stock which may be issued  pursuant to the Company's  2005
Incentive Stock Option Plan ("Incentive Option Plan Common Stock").

     As counsel for the Company, I have examined the originals or photostatic or
certified  copies of such records,  certificates and instruments of the Company,
certificates  of officers of the Company and of public  officials and such other
instruments  and  documents  as I have deemed  relevant  and  necessary  for the
purposes of rendering the opinions set forth below. In such examination,  I have
assumed the  genuineness of all  signatures,  the  authenticity of all documents
submitted  to me as  originals,  the  conformity  to original  documents  of all
documents   submitted  to  me  as  certified  or  photostatic   copies  and  the
authenticity  of the  originals  of  such  copies  and  the  correctness  of all
statements of fact contained therein.

     Based upon the foregoing, I am of the opinion that:

     (1) The Bonus Common Stock has been duly and validly  authorized,  and when
issued in accordance  with the terms of the Company's  2005 Stock Bonus Plan and
any applicable bonus stock awards made thereunder will be legally issued,  fully
paid and nonassessable.

     (2) The  Incentive  Option  Plan  Common  Stock has been  duly and  validly
authorized  and when issued in accordance  with the terms of the Company's  2005
Incentive Stock Option Plan and the applicable options granted  hereunder,  will
be legally issued, fully paid and non-assessable.

     I consent to the filing of this  opinion as an exhibit to the  Registration
Statement and to the reference to me in Item 5 of the Registration Statement.

                                                     Very truly yours,

                                                     /s/ Henry T. Meyer
                                                     Henry T. Meyer, Esq.
                                                     General Counsel
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>3
<FILENAME>s8-x231.txt
<TEXT>
EXHIBIT 23.1


Independent Registered Public Accounting Firm's Consent


We consent to the incorporation by reference in this  Registration  Statement on
Form  S-8  of  our  report  dated  September  14,  2004  on  our  audits  of the
consolidated  financial  statements of FONAR  Corporation and Subsidiaries as of
June 30, 2004 and 2003 and for each of the three years in the period  ended June
30, 2004.

                                                     /s/ Marcum & Kliegman LLP
                                                     Marcum & Kliegman LLP


New York, New York
February 15, 2005


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>4
<FILENAME>s8-x232.txt
<TEXT>
EXHIBIT 23.2

(CONSENT OF COUNSEL IS INCLUDED IN EXHIBIT 5)


Consent of Counsel

The consent of Henry T. Meyer,  Esq. is included in his opinion filed as Exhibit
5 to this Registration Statement.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>s8-x991.txt
<TEXT>
                                  EXHIBIT 99.1

                              2005 STOCK BONUS PLAN


1. Purposes of the Plan.

     The  purpose of this  Stock  Bonus  Plan (the  "Plan")  is to assist  FONAR
Corporation,  a Delaware corporation (the  "Corporation"),  and its subsidiaries
(as  hereinafter  defined)  in  attracting  and  retaining  the  services of key
employees,  non-employee directors,  officers, advisors and consultants,  and to
secure for the  Corporation and its  subsidiaries  the benefits of the incentive
inherent in ownership of the Corporation's  equity securities by parties who are
responsible  for the continuing  growth and success of the  Corporation  and its
subsidiaries.

     For the purposes of this plan, the term "subsidiary" and/or  "subsidiaries"
shall mean any corporation of which the majority of the outstanding voting stock
is owned directly or indirectly by the Corporation.

2. Shares Subject to the Plan.

     Subject  to the  provisions  of  Section 7 of the  Plan,  an  aggregate  of
3,000,000 shares of Common Stock, par value $.0001 per share, of the Corporation
("Common Stock"),  are available for the issuance under the Plan as compensation
for services to the Corporation ("Bonus Stock").

     The shares to be issued as Bonus Stock under the Plan may be authorized but
unissued  shares of Common Stock or issued shares of Common Stock which are held
in the treasury of the Corporation.

3. Term of the Plan.

     Subject to the  provisions  of  Section 8 and 10,  the Plan shall  commence
effective as of February 15, 2005,  and Bonus Stock  awarded under the Plan must
be issued no later than February 14, 2015.

4. Administration of the Plan.

     The Plan shall be administered by a committee which shall consist of two or
such  greater  or  lesser  number  of  members,  as  determined  by the Board of
Directors from time to time, who shall be appointed by the Board of Directors of
the Corporation (the "Committee") or, in the absence of such a Committee, by the
Board of Directors of the  Corporation.  Directors  of the  Corporation  who are
either eligible to receive Bonus Stock, or to whom Bonus Stock has been granted,
may vote on any matters affecting the administration of the plan or the granting
of Bonus Stock  under the Plan.  Any action of the  Committee  may be taken by a
written  instrument signed by a majority of the members of the Committee then in
office. Members of the Committee need not be members of the Board of Directors.

     Subject to the express  provisions of the Plan,  the Committee or the Board
or Directors,  as the case may be, shall have the authority,  in its discretion:
(i) to determine the parties to receive  Bonus Stock,  the times when they shall
receive such awards,  the number of shares to be issued, and the time, terms and
conditions  of the issuance of any such shares;  (ii) to construe and  interpret
the  terms  of the  Plan;  (iii) to  establish,  amend  and  rescind  rules  and
regulations  for the  administration  of the  Plan;  and (iv) to make all  other
determinations   necessary  or  advisable  for   administering   the  Plan.  The
determinations  of the Committee or the Board of Directors,  as the case may be,
on the matters referred to in this Section 4 shall be final and conclusive.

5. Eligibility and Selection.

     The  Committee  or the Board of  Directors,  as the case may be, shall have
sole and  absolute  discretion  to issue  Bonus  Stock  under the Plan to reward
employees,   non-employee  directors,  advisors  and  consultants  for  services
rendered or to be rendered to or for the benefit of the  Corporation,  or any of
its subsidiaries  (the grant of Bonus Stock under this Plan shall be referred to
as a "Bonus Stock Award"). In determining the parties to whom Bonus Stock Awards
shall be granted  under the Plan and the number of shares of Common  Stock which
may be granted to such persons, the Committee or the Board of Directors,  as the
case may be,  shall  consider  the  duties of the  parties,  their  present  and
potential  contributions  to the  success  of the  Corporation,  and such  other
factors as the Committee or the Board of Directors  deems relevant in furthering
the  purposes  of the  granting  of such Bonus  Stock and the  interests  of the
Corporation. A party may receive more than one Bonus Stock Award under the Plan.

6. Bonus Stock Awards.

     (a) The  Committee  or the Board of  Directors,  as the case may be,  shall
determine for each party chosen to participate in the Plan  ("Participant")  the
number of shares of Common Stock to be covered by each Bonus Stock Award and the
installments, if any, in which the Bonus Stock will be granted.

     (b) The  Committee or the Board of  Directors  shall  determine  the terms,
conditions and  restrictions,  if any, to which such Bonus Stock or its issuance
will be  subject.  Any  restrictions  imposed  shall be  evidenced  by a written
agreement  executed by the  Participant.  Such agreement  shall also include any
terms and conditions required by applicable securities laws.

     (c) The Corporation shall deliver to the Participant on the date specified,
or as soon  thereafter as is  practicable,  the number of shares of Common Stock
specified in such Participant's Bonus Stock Award,  subject to and in accordance
with the Bonus Stock Award.

     (d) Bonus Stock  Awards  shall not be  transferable  other than by the last
will and testament of the holder of the Bonus Stock Award or the applicable laws
of descent and  distribution.  Bonus  Stock  Awards may not be  assigned,  sold,
transferred,  pledged,  hypothecated  or  disposed  of in any  way  (whether  by
operation of law or otherwise)  except to the extent  expressly  provided for in
the Plan and shall not be subject to execution, attachment or similar process.

7. Dilution and Other Adjustments.

     In the event of any change in the  outstanding  Common  Shares by reason of
any  stock   dividend  or  split,   recapitalization,   merger,   consolidation,
reorganization,  combination  or  exchange of shares of Common  Stock,  or other
similar corporate change,  the Committee or the Board of Directors,  as the case
may be, shall make such  adjustments  as it, in its absolute  discretion,  deems
equitable in the number of kind of shares of Common Stock authorized by the Plan
and, with respect to  outstanding  shares of Common Stock covered by Stock Bonus
Awards but not yet issued, in the number of kind of stock covered by Stock Bonus
Awards made under the Plan.

8. Termination and Amendment of the Plan.

     Unless  sooner  terminated,   as  hereinafter  provided,  this  Plan  shall
terminate  at 11:59 p.m.  on  February  14,  2015,  and no Bonus  Stock shall be
granted hereunder after that date. The Board of Directors may terminate or amend
this Plan at any time without notice, or make such modifications of this Plan as
it shall deem advisable.  No termination,  amendment or modification of the Plan
may  adversely  affect the rights of any party to whom a Bonus  Stock  Award has
been made without such party's consent.

9. Indemnification.

     In addition  to such other  rights of  indemnification  as they may have as
directors or as members of the  Committee,  the members of the Committee and the
Board  of  Directors  shall  be  indemnified  by  the  Corporation  against  the
reasonable expenses, including attorney's fees actually and necessarily incurred
in  connection  with  the  defense  of any  action,  suit or  proceeding,  or in
connection with any appeal therein,  to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection  with the
Plan or any Bonus Stock Award granted  thereunder,  and against all amounts paid
by them in settlement  thereof (provided that such settlement is approved by the
Corporation)  or paid by them in  satisfaction of a judgment in any such action,
suit or  proceeding,  except  in  relation  to  matters  as to which it shall be
adjudicated in such action,  suit or proceeding  that such  Committee  member or
director,  as the case may be, is liable for  negligence  or  misconduct  in the
performance of his duties; provided that within 10 days after institution of any
such action, suit, or proceeding a Committee member or director, as the case may
be, shall offer the Corporation in writing the opportunity,  at its own expense,
to handle and defend the same.

10. Effectiveness of the Plan.

     The Plan shall become  effective on February  15, 2005,  provided  that the
Plan shall be submitted for approval by the  stockholders  of the Corporation no
later  than  twelve  months  after  the  adoption  of the  Plan by the  Board of
Directors.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>6
<FILENAME>s8-x992.txt
<TEXT>
                                  EXHIBIT 99.2


                        2005 INCENTIVE STOCK OPTION PLAN

                                2,000,000 SHARES

                                FONAR CORPORATION


1. Purposes of the Plan.

     The purpose of this Plan (the  "Plan"),  which is designed to qualify as an
"incentive stock option plan" under section 422A of the Internal Revenue Code of
1954,  as amended  (the  "Code"),  is to assist  Fonar  Corporation,  a Delaware
corporation (the  "Corporation"),  and its subsidiaries (as hereinafter defined)
in attracting and retaining key employees and to secure for the  Corporation and
its  subsidiaries  the  benefits of the  incentive  inherent in ownership of the
Corporation's  equity  securities  by  employees  who  are  responsible  for the
continuing growth and success of the Corporation and its subsidiaries.  The Plan
provides  a means by which such  employees  may be given an  opportunity,  as an
incentive to service or continued  service with the Corporation or a subsidiary,
to purchase shares of the Common Stock of the  Corporation  upon the exercise of
options  designed to qualify as "incentive  stock options" under Section 422A of
the Code.

     For the purposes of this Plan, the term "subsidiary" and/or  "subsidiaries"
shall have the same  meaning  as the term  "subsidiary  corporation"  defined in
section 425 (f) of the Code,  as from time to time  amended,  and shall  include
specifically Health Management Corporation of America.

2. Shares Subject to the Plan.

     Subject  to the  provisions  of  Section 13 of the Plan,  an  aggregate  of
2,000,000 shares of Common Stock, par value $.0001 per share, of the Corporation
("Common  Stock"),  are  available for the issuance upon the exercise of options
under the Plan.

     The shares to be issued upon the exercise of options  under the Plan may be
authorized but unissued  shares of Common Stock or issued shares of Common Stock
which are held in the treasury of the Corporation.  If an option shall expire or
terminate  for  any  reason   without   having  been   exercised  in  full,  the
unpurchasable  shares which were subject  thereto  shall,  unless the Plan shall
have been  terminated,  be added to the shares  otherwise  available for options
under the Plan.

3. Term of the Plan.

     Subject to the  provisions  of  Section 14 and 15, the Plan shall  commence
effective as of February 15, 2005,  and options  granted  under the Plan must be
granted no later than February 14, 2015.

4.  Administration  of the Plan. The Plan shall be  administered  by a committee
which shall consist of one or more members, as the Board of Directors shall from
time to time determine,  who shall be appointed by the Board of Directors of the
Corporation  (the  "Committee")  or, in the absence of such a Committee,  by the
Board of Directors of the  Corporation.  Directors  of the  Corporation  who are
either eligible to receive  options,  or to whom options have been granted,  may
vote on any matters affecting the  administration of the Plan or the granting of
options under the Plan; provided,  however, that no Director shall vote upon the
granting  of an option to  himself,  but any such  Director  may be  counted  in
determining  the  existence of a quorum at any meeting of the Board of Directors
at which  the Plan is  administered  or  action  is taken  with  respect  to the
granting of an option. Any action of the Committee or the Board of Directors may
be taken by a written  instrument  signed by all of the members of the Committee
or the  Board  of  Directors,  as the case may be,  and any  action  so taken by
written  consent  shall  be as  fully  effective  as if it had  been  taken by a
majority of the members at a meeting duly held and called.

     Subject to the express  provisions of the Plan,  the Committee or the Board
or Directors,  as the case may be, shall have the authority,  in its discretion:
(i) to determine the individuals to receive  options,  the times when they shall
receive  them,  the number of shares to be subject to each option,  the exercise
price for  shares of  Common  Stock  subject  to each  option,  the term of each
option,  the date each option shall become  exercisable in whole,  in part or in
installments,  and,  if in  installments,  the number of shares to be subject to
each  installment,  the date each installment  shall become  exercisable and the
term of each installment: to accelerate the date of exercise of any installment;
to determine  whether  shares may be issued upon exercise of an option as partly
paid and, if so, the date when future  installments  of the exercise price shall
become due and the  amounts of such  installments,  and to  determine  the other
terms and provisions of each option granted under the Plan; (ii) to construe and
interpret the terms of the respective option certificates and the Plan; (iii) to
establish, amend and rescind rules and regulations for the administration of the
Plan; and (iv) to make all other  determinations  deemed  necessary or advisable
for administering the Plan. The  determinations of the Committee or the Board of
Directors,  as the case may be, on the  matters  referred  to in this  Section 4
shall be final and conclusive.

5. Eligibility and Selection.

     Only key employees  (including employees who are officers and directors) of
the  Corporation or of any of its  subsidiaries  are eligible to receive options
under the Plan.  For the purposes of the Plan,  the term "key  employees"  shall
mean and include all employees of the Corporation or any of its subsidiaries who
render substantial services to the Corporation in the management, administration
or  supervision  of the  business  or affairs of the  Corporation  or any of its
subsidiaries  or are engaged in the  research,  development,  production,  sale,
marketing, or promotion of the products or services of the Corporation or any of
its  subsidiaries.  Directors of the  Corporation  who are not  employees of the
Corporation or a subsidiary are not eligible to receive  options under the Plan.
In determining the employees to whom options shall be granted under the Plan and
the number of shares of Common Stock as to which  options may be granted to such
an employee, the Committee or the Board of Directors,  as the case may be, shall
consider the duties of the employees,  their present and potential contributions
to the success of the business of the Corporation, and such other factors as the
Committee or the Board of Directors deems relevant in furthering the purposes of
the granting of such options and the interests of the  Corporation.  An employee
may receive more than one option under the Plan.

6. Incentive Stock Options.

     (a) Each option  ("Option") may be evidenced by a written  Incentive  Stock
Option Certificate (the "Certificate"); provided that to the extent permitted by
law and consistent with the terms and conditions of the Plan and the Option, the
Board of Directors may make such  modifications  in the terms and  conditions of
the Option as the Board shall deem necessary or advisable, or as may be required
in order that the Option  evidenced by the  Certificate  be an "incentive  stock
option".

     (b) Each Option  under the Plan (i) shall  specify the  exercise  price per
share of Common Stock, which shall not be less than the fair market value of the
Common  Stock of the  Company  on the  date on which  such  Option  is  granted,
provided  that  the  exercise  price  per  share  of any  Option  granted  to an
individual  who,  at the time  such  option  is  granted,  is the owner of stock
possessing more than ten percent (10%) of the total combined voting power of all
classes  of stock of the  Corporation  shall  not be less  than 110% of the fair
market  value of a share of the Common Stock of the  Corporation  on the date on
which such Option is granted; (ii) shall be exercisable during a period no later
than ten (10) years after the date on which it is granted,  as determined by the
Committee  or the Board of  Directors  at the time of grant;  provided  that any
Option  granted to any person who,  at the time such  Option is granted,  is the
owner of stock  possessing  more than ten  percent  (10%) of the total  combined
voting  power of all classes of stock of the  Corporation,  must expire no later
than  five (5)  years  after  the date of grant of the  Option;  (iii)  shall be
exercisable  at such time or times as may be  determined by the Committee or the
Board of  Directors at the time of grant,  provided  that an Option shall become
immediately exercisable as to all shares subject to the Option upon the death or
"disability" (as defined in Section 13) of the holder of the Option;  (iv) shall
not be  transferable by the holder of the Option (other than by will or the laws
of descent and  distribution),  and shall be exercisable  during the lifetime of
the holder of the Option only by such holder;  and (v) shall  contain such other
terms  and  conditions  or be in such  other  form as may be  determined  by the
Committee  or the Board of Directors  at the time of grant,  provided  that such
other terms and conditions  shall be permitted by law, shall not be inconsistent
with the Plan and shall not prevent the Option from  qualifying as an "incentive
stock option"  under  Section 422A of the Code. To the extent  permitted by law,
and without  limitation to the  foregoing,  the Board of Directors may make such
modifications  in the provisions of any  particular  Option under the Plan as it
shall deem  advisable or as may be required in order that the Option may qualify
as an "incentive stock option" under section 422A of the Code.

7. Exercise Price.

     The  exercise  price  for each  share of  Common  Stock  issuable  upon the
exercise  of an Option  granted  under the Plan  shall not be less than the fair
market  value (or,  in the case of an Option  granted to any person  who, at the
time of the grant of such Option, is the owner of more than ten percent (10%) of
the total  combined  voting power of all classes of stock of the  Corporation or
any of its subsidiaries, not less than 110% of the fair market value) of a share
of Common  Stock at the time of  granting of the Option,  as  determined  by the
Committee or the Board of Directors,  provided that the method of  determination
shall not be inconsistent  with any regulations  applicable to "incentive  stock
options"  which  may be  promulgated  by the  Internal  Revenue  Service  or the
Secretary of the Treasury.

8. Term of  Options.  Options  under the Plan shall be  exercisable  as shall be
determined by the  Committee or the Board of  Directors,  as the case may be, at
the time of grant;  provided that Options granted hereunder shall be exercisable
for a period not  exceeding ten (10) years from the date such Option is granted,
and provided that any Option  granted to any person who, at the time such Option
is granted,  is the owner of stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Corporation or any of
its subsidiaries  shall be exercisable for a period not exceeding five (5) years
from the date such  Option is  granted.  Options  shall be  subject  to  earlier
termination as hereinafter provided.

9. Exercise of Options.

     Each Option shall be  exercised,  in whole or in part, as to such number of
shares of Common  Stock and at such time or times as the  Committee or the Board
of Directors shall have  determined at the time of grant.  Except as provided in
Sections 10 and 11 hereof,  an Option may only be  exercised if the holder is at
the time of exercise in the employ of the  Corporation  or a  subsidiary  of the
Corporation.  Options shall be exercised only by the holder at the Corporation's
principal  office,  or at  such  other  office  as  may  be  designated  by  the
Corporation,  specifying  the  number of shares  purchased  and  accompanied  by
payment in full by certified or bank cashier's check,  shares of Common Stock of
the Corporation owned by the holder of the Option (or by any other property,  or
in any other form, acceptable to the Committee or the Board of Directors, as the
case may be.)  Certificates  representing  the  shares of stock  purchased  upon
exercise shall be issued as promptly as practicable thereafter. The holder of an
Option shall not have any of the rights of a stockholder of the Corporation with
respect to the shares of Common Stock issuable upon exercise of the Option until
one or more certificates  evidencing such shares of Common Stock shall have been
issued to the holder of the  Option.  In no event may a  fraction  of a share be
purchased or issued under the Plan.

     Options issued under the Plan (and any other plans of the  Corporation)  to
any  individual  will not be treated as "incentive  stock options" under Section
422A of the Code to the extent that the aggregate fair market value of the stock
underlying any such options (determined as at the time the options are granted),
which  become  exercisable  for the first  time in any  calendar  year,  exceeds
$100,000.

10. Termination of Employment.

     Except as provided in Section 11, any Option  granted  under the Plan to an
employee who voluntarily  terminates his employment with the Corporation without
the  written  consent of the  Corporation  shall  expire  immediately  upon such
termination of employment.  Any Option granted under the Plan to an employee who
voluntarily terminates his employment with written consent of the Corporation or
whose employment is involuntarily terminated,  shall be exercisable for a period
which shall expire on the day 3 months after the cessation of employment, but in
no event after  expiration of the term of the Option and only to the extent such
Option is  otherwise  exercisable.  Except as  provided  in Section 11, upon the
expiration of any such Options,  all rights thereunder,  to the extent that such
rights  shall not have been  exercised,  shall  terminate  immediately.  Options
granted under the Plan shall not be affected by any change of employment as long
as  the  holder  continues  to be an  employee  of  the  Corporation  or of  any
subsidiary of the Corporation.

11. Exercise Upon Death, Disability or Retirement of the Employee.

     (a) If the holder of an Option dies while  employed by the  Corporation  or
any of its subsidiaries, the Option may be exercised as to all shares subject to
the Option by the executor or administrator of such deceased employee or by such
other person at the time entitled by law to the rights of such deceased employee
under the Option, at any time within six (6) months after death, but in no event
after the expiration of the term of the Option.

     (b) In the event  that the  employment  of the  holder of any Option by the
Corporation  or a subsidiary of the  Corporation  is terminated by reason of the
"disability" of the holder of the Option,  the Option may be exercised as to all
shares  subject to the Option by the holder  thereof at any time  within one (1)
year after the date of such termination of employment, but in no event after the
expiration  of the  term of the  Option.  For  purposes  of the  Plan  the  term
"disability"  shall mean a physical or mental  disability  as defined in Section
105 of the Code.

     (c) In the event  that the  employment  of the  holder of any Option by the
Corporation  or a subsidiary of the  Corporation  is terminated by reason of the
retirement  of the holder of the  Option,  the Option may be  exercised  (to the
extent otherwise  exercisable on the date of the retirement of the holder of the
Option) by the holder thereof at any time within three (3) months after the date
of such  retirement,  but in no event  after the  expiration  of the term of the
Option. 12.  Non-Transferability  of Options.  Options shall not be transferable
otherwise than by the last will and testament of the holder of the Option or the
applicable  laws of descent  and  distribution,  and during the  lifetime of the
holder, Options may be exercised only by the holder thereof.  Options may not be
assigned, transferred,  pledged, hypothecated or disposed of in any way (whether
by operation of law or otherwise) except to the extent expressly provided for in
the Plan, and shall not be subject to execution, attached or similar process.

     Any assignment, transfer, pledge, hypothecation or other disposition of any
Option  attempted  contrary  to the  provisions  of this  Plan,  or any  levy or
execution,  attachment or other process  attempted upon an Option,  will be null
and void and without effect. Any attempt to make any such assignment,  transfer,
pledge,  hypothecation or other  disposition of an Option or any attempt to make
any such levy or execution, attachment or other process will cause the Option to
be  terminated  immediately  upon  the  happening  of  any  such  event  if  the
Corporation, at any time, should, in the sole discretion of the Committee or the
Board of Directors, so elect, by written notice to the employee or to the person
then entitled to exercise the Option under the  provisions of Section 11 hereof;
provided that any such termination of the Option under the foregoing  provisions
of this  Section  12 will  not  prejudice  any  rights  or  remedies  which  the
Corporation  or any  subsidiary  may have under the Plan,  any  Incentive  Stock
Option Certificate or otherwise.

13. Adjustments.

     If (a) the  Corporation  shall at any time be involved in a transaction  to
which  subsection  (a) of  Section  425 of  the  Code  is  applicable,  (b)  the
Corporation  shall declare a dividend  payable in, or shall subdivide or combine
its Common Stock,  or (c) any other event shall occur which,  in the judgment of
the Committee or the Board of Directors, necessitates action by way of adjusting
the terms of the outstanding  Options,  the Committee or the Board of Directors,
as the case may be,  shall  take any such  action  as in its  judgment  shall be
necessary   to  preserve  to  the  holders  of  Options   rights   substantially
proportionate  to the rights  existing  prior to such event.  To the extent that
such  action  shall  include an  increase or decrease in the number of shares of
Common Stock subject to Options outstanding under the Plan, the aggregate number
of shares of Common  Stock  available  under  Section 2 of the Plan for issuance
upon exercise of such outstanding Options and of additional Options which may be
granted shall be increased or decreased, as the case may be, proportionately. No
action shall be taken by the  Committee  or by the Board of Directors  under the
provisions  of this  Section  13 which,  in its  judgment,  would  constitute  a
modification,  extension or renewal of the Option (within the meaning of Section
425(h)  of the  Code),  or  would  prevent  the  Option  from  qualifying  as an
"incentive  stock option" (within the meaning of Section 422A of the Code).  The
determination  of the Committee or the Board of  Directors,  as the case may be,
with respect to any matter  referred to in this  Section 13 shall be  conclusive
and binding upon each holder of an Option under the Plan.

14. Termination and Amendment of the Plan.

     (a) Unless sooner  terminated,  as  hereinafter  provided,  this Plan shall
terminate at 11:59 p.m. on February 14,  2015,  and no options  shall be granted
hereunder after that date. The Board of Directors may,  without further approval
by the stockholders at any time terminate or amend this Plan without notice,  or
make such  modifications of this Plan as it shall deem advisable;  provided that
the Board of Directors may not,  without prior approval by the  stockholders  of
the Corporation, (i) increase the maximum number of shares of Common Stock as to
which  Options  may be granted  under the Plan  (except as  contemplated  by the
provisions of Section 13 hereof),  (ii) extend the term during which options may
be granted under the Plan, (iii) permit the exercise of an Option after the date
which such Option would otherwise  terminate  pursuant to the terms thereof;  or
(iv) reduce the exercise price per share to less than the fair market value of a
share of Common Stock on the date the Option is granted,  or, in the case of any
Option granted to an individual who, on the date of the grant of the Option,  is
the owner of more than ten percent (10%) of the total  combined  voting power of
all  classes of stock of the  Corporation  or any  subsidiary,  110% of the fair
market value of a share of Common stock (except,  in both cases, as contemplated
by  the  provisions  of  section  13  hereof).  No  termination,   amendment  or
modification  of the Plan may,  without  the  consent  of the person to whom any
Option has been granted,  adversely  affect the rights of such person under such
Option or any unexercised portion thereof.

     (b)  Notwithstanding  the  limitation  set forth in  Paragraph  (a) of this
Section  14,  the Plan and any  Option  and the number of shares as to which any
Option under the Plan shall have been granted may be reduced,  retroactively  at
any  time,  to  conform  to the  provisions  of the  Code  and  the  regulations
promulgated  thereunder,  in order that  Options  under the Plan may  qualify as
"incentive stock options" within the meaning of Section 422A of the Code, and no
such amendment shall be considered prejudicial to the rights of any holder of an
Option.

15.   Substitutions   and   Assumptions   of  Options  of  Certain   Constituent
Corporations.

     Anything  in this  Plan  to the  contrary  notwithstanding,  the  Board  of
Directors may,  without  further  approval by the  stockholders,  substitute new
Options for prior options of a constituent  corporation (as hereinafter defined)
or  assume  the  prior  options  of  such  constituent  corporation.   The  term
"constituent  corporation" shall mean any corporation which has been merged into
or  consolidated  with the  Corporation,  or whose  assets  or stock  have  been
purchased or acquired by or liquidated into the Corporation or by or into one or
more  subsidiaries  of the  Corporation,  or any parent or any subsidiary of any
such corporation.

16. Indemnification of Committee.

     In addition  to such other  rights of  indemnification  as they may have as
Directors or as members of the  Committee,  the members of the  Committee or the
Directors,  as the case may be, shall be indemnified by the Corporation  against
the reasonable  expenses,  including  attorneys'  fees actually and  necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein,  to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection  with the
Plan or any Option granted  thereunder,  and against all amounts paid by them in
settlement  thereof (provided such settlement is approved by the Corporation) or
paid  by  them  in  satisfaction  of a  judgment  in any  such  action,  suit or
proceeding, except in relation to matters as to which it shall be adjudicated in
such action, suit or proceeding that such Committee member or Director is liable
for  negligence or misconduct in the  performance  of his duties;  provided that
within 10 days  after  institution  of any such  action,  suit or  proceeding  a
Committee member shall in writing offer the Corporation the opportunity,  at its
own expense, to handle and defend the same.

17.  Effectiveness  of the Plan. The Plan shall become effective on February 15,
2005 provided that the Plan shall be submitted for approval by the  stockholders
of the  Corporation  no later than twelve (12) months after the date of adoption
of the Plan by the Board of Directors.

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