<SEC-DOCUMENT>0000355019-12-000005.txt : 20120215
<SEC-HEADER>0000355019-12-000005.hdr.sgml : 20120215
<ACCEPTANCE-DATETIME>20120215172448
ACCESSION NUMBER:		0000355019-12-000005
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20111231
ITEM INFORMATION:		Results of Operations and Financial Condition
FILED AS OF DATE:		20120215
DATE AS OF CHANGE:		20120215

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:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-10248
		FILM NUMBER:		12616895

	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>8-K
<SEQUENCE>1
<FILENAME>fonar8k-2012_0215.htm
<DESCRIPTION>FONAR CORPORATION 8-K
<TEXT>
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<P STYLE="margin: 0"></P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">Washington, D.C. 20549</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">FORM 8-K</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">CURRENT REPORT</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">Pursuant to Section 13 or 15(d) of the Securities Act of 1934</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">Date of Report (Date of earliest event reported): February 14,
2012</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center"><U>FONAR CORPORATION</U></P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Courier New, Courier, Monospace; margin-left: 3.9pt; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 31%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">DELAWARE</TD>
    <TD STYLE="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 37%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">0-10248</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 27%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">11-2464137</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: top">(State or other jurisdiction of Incorporation or organization)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Commission File Number)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(I.R.S. Employer Identification No.)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">110 Marcus Drive&nbsp; Melville, New York 11747 (631) 694-2929</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Address, including zip code, and telephone number of registrant's principal executive office)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c)</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">Item 2.02(a) Results of Operations and Financial Condition.</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">We reported our results of operations and financial condition
for the fiscal quarter ended December 31, 2011 in a press release dated February 14, 2012.</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">Exhibits</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-indent: 0.5in">99.1 Press Release dated February 14, 2012</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">SIGNATURES</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">FONAR CORPORATION</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">(Registrant)</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">By: /s/ Raymond Damadian</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">Raymond Damadian</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">President and Chairman</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 12pt Courier New, Courier, Monospace; margin: 0">Dated: February 15, 2012</P>



<P STYLE="margin: 0"></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>x99_20120215.htm
<DESCRIPTION>FONAR CORPORATION PRESS RELEASE
<TEXT>
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<P STYLE="margin: 0"><FONT STYLE="font-size: 11pt"><U>Exhibit 99.1</U></FONT></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 12pt Courier New, Courier, Monospace; margin-left: 3.9pt; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">NEWS</FONT></TD>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 46%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">FONAR
    Corporation</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">For Immediate
    Release</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">The
    Inventor of MR Scanning&trade;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">Contact: Daniel
    Culver</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">An
    ISO 9001 Company</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">Director of Communications</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">Melville,
    New York 11747</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">E-mail: inveswtor@fonar.com</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">Phone:
    (631) 694-2929</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">www.fonar.com</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 14pt Times New Roman, Times, Serif">Fax:
    (631) 390-1709</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 14pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 16pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FONAR Reports 33% Increase in Net Income
to $1.8 Million </B></P>

<P STYLE="font: 16pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>for 2nd Quarter of Fiscal Year 2012 </B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">MELVILLE, NEW YORK, February 14, 2012 &ndash; FONAR Corporation
(NASDAQ-FONR), The Inventor of MR Scanning&trade;, reported today its financial results for the second quarter of fiscal year 2012.
For the three months ended December 31, 2011, net income increased 33% to $1.8 million, income from operations increased 31% to
$1.9 million while total revenues increased 16% to $9.3 million, as compared to the corresponding fiscal quarter one year earlier.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B><U>Results from the Second Quarter Fiscal 2012 Financial Statement:</U></B></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">The basic income per common share increased 56% to $0.50 for the
six months ended December 31, 2011 as compared to $0.32 for the same period one year earlier. For the quarter ended December 31,
2011 and 2010, the basic net income per common share was $0.25.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">In addition, the diluted income per common share increased 58% to
$0.49 for the six months ended December 31, 2011 as compared to $0.31 for the same period one year earlier. For the quarter ended
December 31, 2011 and 2010, the diluted net income per common share was $0.24.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Net income for the six month period ended December 31, 2011 rose
105% to $3.6 million as compared to $1.7 million for the six month period ended December 31, 2010. For the quarter ended December
31, 2011, net income climbed 33% to $1.8 million as compared to $1.4 million for the quarter ended December 31, 2010.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Income from operations for the six month period ended December 31,
2011 rose 95% to $3.7 million as compared to $1.9 million for the six month period ended December 31, 2010. For the quarter ended
December 31, 2011, income from operations climbed 31% to $1.9 million as compared to $1.4 million for the quarter ended December
31, 2010.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Total revenues for the six month period ended December 31, 2011
rose 13% to $18.9 million as compared to $16.7 million for the six month period ended December 31, 2010. For the quarter ended
December 31, 2011, total revenue climbed 16% to $9.3 million as compared to $8.0 million for the quarter ended December 31, 2010.</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 38%; font: 12pt Courier New, Courier, Monospace; padding-right: 5.4pt; padding-left: 5.4pt"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">Page
    2</FONT></TD>
    <TD STYLE="width: 16%; font: 12pt Courier New, Courier, Monospace; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 12pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 46%; font: 12pt Courier New, Courier, Monospace; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><B>FONAR
    Corporation</B></FONT></TD></TR>
</TABLE>


<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Total operating costs and expenses increased 3% to $15.3 million
for the six months ended December 31, 2011 from $14.8 million for the six months ended December 31, 2010. For the quarter ended
December 31, 2011, total operating costs and expenses increased 13% to $7.4 million as compared to $6.6 million for the quarter
ended December 31, 2011.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Revenues from product sales were $1.6 million for the fiscal quarter
ended December 31, 2011 as compared to $1.8 million for the corresponding quarter ended December 31, 2010. Revenues from service
and repair fees were $2.8 million for the fiscal quarter ended December 31, 2011 as compared to $2.7 million for the fiscal quarter
ended December 31, 2010.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Revenues from the management and other fees segment (management
of the FONAR UPRIGHT&reg; Multi-Position&trade; MRI diagnostic imaging centers segment) increased 39% to $4.9 million for the fiscal
quarter ended December 31, 2011, from $3.5 million for the fiscal quarter ended December 31, 2010.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">As of December 31, 2011 total current assets were $25.1 million
and total current liabilities were $21.9 million. Total assets were $33.5 million and total liabilities were $24.3 million. Total
long-term liabilities were $2.4 million. Total stockholders&rsquo; equity was $9.2 million. Total cash and cash equivalents and
marketable securities were $9.9 million.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"><B><U>Significant Highlights during the October &ndash; December
Quarter:</U></B><U> </U></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">On October 5, 2011, the Company reported a diagnostic breakthrough
in the understanding of the genesis of multiple sclerosis (MS) based on observations made possible by the company&rsquo;s unique
FONAR UPRIGHT&reg; Multi-Position&trade; MRI. The press release indicated that the cause of multiple sclerosis may be biomechanical
and related to earlier trauma to the neck, which can result in the obstruction of the flow of cerebrospinal fluid (CSF), which
is produced and stored in the central anatomic structures of the brain known as the ventricles. Since the ventricles produce a
large volume of CSF each day (500 cc), an obstruction can result in a build-up of pressure within the ventricles, resulting in
leakage of the CSF into the surrounding brain tissue. This leakage could be responsible for generating the brain lesions of multiple
sclerosis.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">The research was published in the journal Physiological Chemistry
and Physics and Medical NMR (Sept. 20, 2011, 41: 1-17), titled &ldquo;The Possible Role of Cranio-Cervical Trauma and Abnormal
CSF Hydrodynamics in the Genesis of Multiple Sclerosis.&quot; It was co-authored by FONAR MRI researchers Raymond V. Damadian,
M.D., president and chairman of FONAR and FONAR scientist David Chu, PhD. The complete study can be viewed at www.fonar.com/pdf/PCP41_damadian.pdf.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">Dr. Damadian said. &ldquo;We used the UPRIGHT&reg; Multi-Position&trade;
MRI to view the flow of cerebrospinal fluid in and out of the brain with the patients scanned Upright and scanned lying down. The
UPRIGHT&reg; MRI also revealed that these obstructions were the result of structural deformities of the cervical spine, induced
by trauma earlier in life. The findings are based on viewing the real-time flow of cerebrospinal fluid in a series of eight randomly
chosen patients with multiple sclerosis. These invaluable dual observations have only been possible since the invention by FONAR
of an MRI capable of imaging the patient Upright.&rdquo; For more information visit: www.fonar.com.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center">&nbsp;</P>

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    3</FONT></TD>
    <TD STYLE="width: 16%; font: 12pt Courier New, Courier, Monospace; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="width: 46%; font: 12pt Courier New, Courier, Monospace; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><FONT STYLE="font: 12pt Times New Roman, Times, Serif"><B>FONAR
    Corporation</B></FONT></TD></TR>
</TABLE>


<P STYLE="font: 12pt Arial, Helvetica, Sans-Serif; margin: 0"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">On October 4, 2011, Dr. Damadian announced the study at a Radiology
Department Grand Rounds at the University of California San Diego Medical Center. William G. Bradley, Jr., M.D., Ph.D., F.A.C.R.,
Chairman of the Department of Radiology, and a Professor of Radiology at UCSD School of Medicine, introduced Dr. Damadian to his
colleagues at grand rounds. Dr. Bradley said, &ldquo;Dr. Damadian has shown that 8 patients with MS had degenerative changes in
their cervical spines which impinged on the spinal canal and limited the pulsatile, to-and-fro flow of cervical CSF over the cardiac
cycle, as demonstrated on UPRIGHT&reg; MRI. His hypothesis that increased resistance to outflow of CSF is linked to the etiology
of MS has some similarities to Dr. P. Zamboni&rsquo;s hypothesis that MS is due to the impeded outflow of venous blood from the
brain due to dural sinus stenoses. In both theories, increased resistance to outflow of either CSF or venous blood would be expected
to modify the intracranial pressure wave over the cardiac cycle. While both theories need to be further tested with larger controlled
studies, it is intriguing that they seem to invoke similar pathologic changes. Whether these changes are etiologic in all cases
of MS remains to be tested.&rdquo;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">On November 2, 2011, FONAR reported on a 41-year-old female patient
with MS that had been one of the eight patients in the original study. The FONAR UPRIGHT&reg; MRI had found cervical malrotations
at the cranio-cervical junction and alterations of CSF flow dynamics which gave rise to CSF fluid leakages into surrounding brain
tissue. The CSF leakages visualized were directly connected to the MS lesions visualized on the UPRIGHT&reg; MRI. Dr. Damadian
stated, &ldquo;These new observations have uncovered biomechanical barriers that appear to lead to multiple sclerosis. It is significant
that these barriers may be therapeutically addressable.&rdquo;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">The MS patient was treated by Dr. Scott Rosa, with a proprietary
protocol using an Atlas Orthogonal (AO) instrument and the FONAR UPRIGHT&reg; Multi-Position&trade; MRI. The patient has experienced
a significant reduction in symptoms which correlate directly to 28.6% reduction of her CSF pressure on post MRI evaluation. At
this time the patient continues to be free of MS symptoms as well as vertigo and vomiting on recumbency. The patient&rsquo;s care
continues being administered by Dr. Rosa.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">On November 30, 2011, the Company reported a sale of its UPRIGHT&reg;
Multi-Position&trade; MRI to a radiology practice in the western USA. This becomes the 29th state to have a customer purchase the
FONAR UPRIGHT&reg; MRI. The FONAR UPRIGHT&reg; Multi-Position&trade; MRI has also been sold to Puerto Rico and has been installed
in eleven other nations around the world.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">The board certified radiologist purchasing the FONAR UPRIGHT&reg;
Multi-Position&trade; MRI for his practice said he was buying the scanner in order to meet the expressed needs of his sending physicians,
principally neurosurgeons and orthopedic surgeons. They are eager, he said, to achieve the best possible surgical outcomes for
their spine surgery patients. Failure to see the full picture could result in the administration of a wrong or insufficient surgical
procedure. They consider imaging the spine fully loaded with its normal weight, and in all the upright positions that the spine
normally occupies, fundamental to a good surgical outcome for the patient.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace"><B>FONAR
CORPORATION AND SUBSIDIARIES</B></FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">CONDENSED
CONSOLIDATED BALANCE SHEETS</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">(000's
OMITTED)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">ASSETS</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; vertical-align: middle"><FONT STYLE="font-family: Courier New, Courier, Monospace">Current
    Assets:&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">December
    31, 2011 <BR>(UNAUDITED)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top"><FONT STYLE="font-family: Courier New, Courier, Monospace">June
    30, 2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Cash and cash equivalents</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">9,911</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">9,251</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Marketable securities</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">30</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">33</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Accounts receivable &ndash; net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,823</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,264</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Accounts receivable - related party</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">60</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Management and other fees receivable
    - net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,635</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,309</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 22pt; padding-right: 11pt; text-indent: -15pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Management
    and other fees receivable &ndash; related medical practices &ndash; net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,307</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,669</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 22pt; text-indent: -16pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs and estimated
    earnings in excess of billings on uncompleted contracts</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,152</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">169</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Inventories</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,806</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,400</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Current portion of notes receivable
    - net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">115</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">114</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Prepaid expenses
    and other current assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">270</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">352</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Total Current
    Assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">25,109</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">22,561</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Property and equipment &ndash;
    net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,374</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,769</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Notes receivable</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">315</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">359</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Other intangible assets &ndash;
    net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,120</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,318</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Other assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">535</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">574</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">Total Assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">33,453</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">31,581</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; text-align: center; margin-bottom: 0"> <FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; text-align: center; margin-bottom: 0">Page 4</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace"><B>FONAR
CORPORATION AND SUBSIDIARIES</B></FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">CONDENSED
CONSOLIDATED BALANCE SHEETS</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">(000's
OMITTED)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">LIABILITIES
AND STOCKHOLDERS' EQUITY</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="text-align: center; vertical-align: top">
    <TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">December
    31, 2011 <BR>(UNAUDITED)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">June 30,
    2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Current Liabilities:</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 11pt; text-indent: -8pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Current
    portion of long-term debt and capital Leases</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,636</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,026</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Accounts payable</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,959</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,187</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Other current liabilities</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">8,956</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">8,236</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Unearned revenue on service
    contracts</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,275</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,762</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Unearned revenue
    on service contracts - related Parties</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">55</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Customer advances</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,303</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,846</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Billings in excess
    of costs and estimated earnings on uncompleted contracts</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">736</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt; text-indent: -7pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Income
    tax payable</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">75</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Current Liabilities</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">21,920</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">23,136</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Long-Term Liabilities:</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Accounts payable</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">141</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">102</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Due to related medical practices</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">229</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">228</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -7pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Long-term debt
    and capital leases, less current Portion</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,490</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,746</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Other liabilities</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">494</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">502</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Long-Term Liabilities</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,354</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,578</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Liabilities</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">24,274</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">25,714</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;<FONT STYLE="font-size: 10pt">Page
5</FONT></FONT></P>

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<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace"><B>FONAR
CORPORATION AND SUBSIDIARIES</B></FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">CONDENSED
CONSOLIDATED BALANCE SHEETS</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">(000's
OMITTED)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">LIABILITIES
AND STOCKHOLDERS' EQUITY (Continued)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">December
    31, <BR>2011 <BR>(UNAUDITED)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: top"><FONT STYLE="font-family: Courier New, Courier, Monospace">June
    30, 2011</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">STOCKHOLDERS' EQUITY:</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Class A non-voting preferred stock
    $.0001 par value; 453,000 shares authorized at December 31, 2011 and June 30, 2011, 313,451 issued and outstanding at December
    31, 2011 and June 30, 2011</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;
                                            &nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;
                                            &nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Preferred stock $.001 par value;
    567,000 shares authorized at December 31, 2011 and June 30, 2011, issued and outstanding &ndash; none</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;
                                            &nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;
                                            &nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Common Stock $.0001
    par value; 8,500,000 shares authorized at December 31, 2011 and June 30, 2011, 5,774,371 and 5,636,571 issued at December
    31, 2011 and June 30, 2011, respectively; 5,762,728 and 5,624,928 outstanding at December 31, 2011 and June 30, 2011, respectively</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Class B Common Stock (10 votes
    per share) $ .0001 par value; 227,000 shares authorized at December 31, 2011 and June 30, 2011, 158 issued and outstanding
    at December 31, 2011 and June 30, 2011</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;
                                            &nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;
                                            &nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Class C Common Stock (25 votes
    per share) $.0001 par value; 567,000 shares authorized at December 31, 2011 and June 30, 2011, 382,513 issued and outstanding
    at December 31, 2011 and June 30, 2011</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;
                                            &nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;
                                            &nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Paid-in capital in excess of par
    value</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">173,729</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">173,476</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Accumulated other comprehensive
    loss</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(20</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(16</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Accumulated deficit</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(171,061</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(174,110</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Notes receivable from employee
    stockholders</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(74</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(115</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Treasury stock, at cost - 11,643
    shares of common stock at December 31, 2011 and June 30, 2011</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(675</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(675</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Non controlling
    interests</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">7,279</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">7,306</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Total Stockholders'
    Equity</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">9,179</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,867</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Total Liabilities
    and Stockholders' Equity</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">33,453</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">31,581</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font: 10pt Courier New, Courier, Monospace">Page
6</FONT>&nbsp;</P>

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<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace"><B>FONAR
CORPORATION AND SUBSIDIARIES</B></FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; margin-bottom: 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">(000's
OMITTED, except per share data)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">FOR
    THE THREE MONTHS ENDED <BR>DECEMBER 31,</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">REVENUES</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">2011</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Product sales &ndash;
    net</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,615</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,789</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Service and repair fees &ndash;
    net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,807</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,653</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Service and repair
    fees &ndash; related parties - net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">27</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">55</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Management and other fees &ndash;
    net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,308</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,380</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Management
    and other fees &ndash; related medical <BR>practices &ndash; net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,571</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,142</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Revenues &ndash; Net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">9,328</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">8,019</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt; text-indent: -5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">COSTS AND EXPENSES</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Costs related to product
    sales</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,171</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,368</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Costs related to service
    and repair fees</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">868</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 22pt; text-indent: -11pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related
    to service and repair fees &ndash; <BR>related parties</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">9</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Costs related to management
    and other fees</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,887</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,707</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 22pt; text-indent: -10pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related
    to management and other fees &ndash; <BR>related medical practices</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">901</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">633</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Research and development</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">293</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">153</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Selling, general and administrative</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,995</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,745</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Provision
    for bad debts</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">310</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">255</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Costs and Expenses</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">7,434</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">6,576</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Income From Operations</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,894</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,443</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Interest Expense</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(124</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(137</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Investment Income</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">64</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">58</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Other Expense</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Provision
    for Income Taxes</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(21</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,812</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,363</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    - Non Controlling Interests</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">276</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    - Controlling Interests</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,536</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,363</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    Available to Common Stockholders</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,432</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,262</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net
    Income Available to Class A Non-Voting <BR>Preferred Stockholders</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">78</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">75</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net
    Income Available to Class C Common <BR>Stockholders</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">26</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">26</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Basic Net
    Income Per Common Share</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.25</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.25</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Diluted
    Net Income Per Common Share</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.24</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.24</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Basic and
    Diluted Income Per Share-Common C</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.07</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.07</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Weighted
    Average Basis Shares Outstanding</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,728,528</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,149,499</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Weighted
    Average Diluted Shares Outstanding</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,856,032</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,277,003</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="font: 10pt Courier New, Courier, Monospace">&nbsp;</FONT>Page
7</P>

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<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace"><B>FONAR
CORPORATION AND SUBSIDIARIES</B></FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">(000's
OMITTED, except per share data)</FONT></P>

<P STYLE="font: 10pt Courier New, Courier, Monospace; margin: 0 21.1pt 0 0; text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Courier New, Courier, Monospace">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="7" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">FOR
    THE SIX MONTHS ENDED <BR>DECEMBER 31,</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">2011</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Courier New, Courier, Monospace">2010</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt; text-indent: -5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">REVENUES</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 56%; padding-left: 5.4pt; text-indent: -5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Product
    sales &ndash; net</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,391</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="width: 8%"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,448</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5pt; text-indent: -5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Service
    and repair fees &ndash; net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,712</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,342</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -11pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Service
    and repair fees &ndash; related parties - net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">55</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">110</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;Management
    and other fees &ndash; net</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">6,637</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,469</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Management
    and other fees &ndash; related medical <BR>practices &ndash; net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,141</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,335</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Revenues &ndash; Net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">18,936</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">16,704</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">COSTS AND EXPENSES</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related to product sales</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,646</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,873</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related to service and repair
    fees</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,682</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,366</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related
    to service and repair fees &ndash; <BR>related parties</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">16</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">28</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related to management and
    other fees</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,072</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,021</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 11pt; text-indent: -6pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Costs related
    to management and other fees &ndash; <BR>related medical practices</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,720</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,372</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Research and development</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">622</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">607</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Selling, general and administrative</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,037</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">4,128</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Provision
    for bad debts</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">485</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">431</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
    Costs and Expenses</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">15,280</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">14,826</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Income From Operations</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,656</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,878</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Interest Expense</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(231</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(231</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Interest Expense &ndash; Related
    Party</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Investment Income</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">126</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">96</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Interest Income - Related Party</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Other Income</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">55</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">8</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Provision
    for Income Taxes</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">(21</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,585</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,748</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    - Non Controlling Interests</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">535</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">&mdash;&nbsp;&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    - Controlling Interests</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">3,050</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,748</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    Available to Common Stockholders</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">2,842</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">1,618</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    Available to Class A Non-voting <BR>Preferred Stockholders</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">155</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">97</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Net Income
    Available to Class C Common <BR>Stockholders</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">53</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">33</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Basic Net
    Income Per Common Share</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.50</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.32</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Diluted
    Net Income Per Common Share</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.49</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.31</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Basic and
    Diluted Income Per Share-Common C</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.14</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">0.09</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Weighted
    Average Basic Shares Outstanding</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,698,645</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,080,872</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 5.4pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">Weighted
    Average Diluted Shares Outstanding</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,826,149</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Courier New, Courier, Monospace">5,208,376</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Courier New, Courier, Monospace">&nbsp;</FONT></TD></TR>
</TABLE>

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