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NOTE 13 - COMMITMENTS AND CONTINGENCIES - (Details Narrative) - USD ($) | 12 Months Ended | 120 Months Ended
--- | --- | ---
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2025
Rent Expense | $ 4,266,000 | $ 4,571,000 | $ 4,035,000 |
Early termination Expense rent |  |  | 690,000 |
Property Tax Abatement from Suffolk County IDA (dollars) |  |  |  | $ 440,000
Property Tax Abatement from Suffolk County IDA (%) |  |  |  | 50.00%
Employer Contributions to 401(k) Plan | 0 | 0 | 0 |
Average Monthly Payment for Stipulation Agreements | 19,552 |  |  |
Gain recorded to income statement as result of lawsuit |  |  | $ 755,500 |
Included in Company's Accrued Expenses As Result of Lawsuit | 300,000 | 300,000 |  |
Recorded sales tax obligations - principal | 2,538,000 |  |  |
Recorded sales tax obligations - interest and penalties | 2,509,000 |  |  |
Reserve for Self-Funded Health Insurance Program | 510,000 | $ 298,000 |  |
Stop-Loss Umbrella Policy with 3rd ParyInsurer to Limit Maximum Potential Liability for individual Claims | $ 100,000 |  |  |
2000 Employee Stock Purchase Plan |  |  |  |
2000 Employee Stock Purchase Plan (ESPP) | The stockholders of the Company approved the 2000 Employee Stock Purchase Plan (“ESPP”) at the Company’s annual stockholders’ meeting in April 2000. The ESPP provides for eligible employees to acquire common stock of the Company at a discount, not to exceed 15%. This plan has not been put into effect as of June 30, 2015. |  |  |
Golden Triangle |  |  |  |
Details of Case | Golden Triangle Company v. Fonar Corporation et al, CV10-2933. The Plaintiff contracted with the Company to purchase a scanner, and paid $1,455,500 in advance. The scanner was never delivered, but Plaintiff never designed a site for delivery either. Alleging other damages, fraud and deceptive trade practices, Plaintiff sought up to $5,000,000. The Company made a motion to dismiss the complaint, the outcome of which left Plaintiff with only a cause of action for breach of contract. The claims against the individual officers and employees of the Company were dismissed. The Company filed its answer, together with a counterclaim alleging that the Plaintiff, by attempting to overcharge the end-customer, had damaged the Company’s reputation and ability to sell in Kuwait. The case was settled in June 2013 for $480,000 in cash and 30,000 shares of the Company’s common stock payable in installments. The Company recorded a gain of $755,500 on the statements of income for the year ended June 30, 2013. |  |  |
Settlement of Case (value) | $ 480,000 |  |  |
Settlement of Case (shares) | 30,000 |  |  |
Matt Malek Madison |  |  |  |
Details of Case | Matt Malek Madison v. Fonar Corporation, United States District Court, Northern District of California, was commenced by plaintiff on August 27, 2007 to recover a down payment for a scanner in the amount of $300,000, with interest. The plaintiff sought costs of suit and attorney’s fees as well. The Company answered the complaint and sued the plaintiff for breach of contract in the amount of $450,000. Although down payments are usually expressly non-refundable in the Company’s quotations and agreements, in this case, the quotation contemplated the sale of four scanners, and provided that the deposit would be refundable with interest, if the customer were unable to find suitable locations in the San Francisco Bay area. The issue was whether the customer made a good faith effort to find locations; the Company’s position was that the customer did not. The case went to trial before a judge; the parties submitted post-trial briefs, and judgment was awarded to the plaintiff. The Company appealed the trial court’s decision, but on January 31, 2012, the U.S. Court of Appeals for the 9th Circuit affirmed the lower court’s decision awarding the plaintiff the $300,000 deposit with prejudgment interest from July 1, 2006. The Company sought to have the Court of Appeals reconsider the decision en banc, (by all or a larger number of the judges on the Circuit Court of Appeals), but this was not granted. Although the case has been concluded, the plaintiff has not taken any steps to collect the judgment. As of June 30, 2015 and 2014, $300,000 was included in the Company’s accrued expenses. |  |  |
Settlement of Case (value) | $ 300,000 |  |  |
Bonutti Research and Bolt MRI Technology |  |  |  |
Details of Case | Bonutti Research v. Fonar Corporation, Health Management Corporation of America, Health Diagnostics, LLC et al, was commenced on December 2, 2011. Bonutti Research filed a patent infringement action in the U.S. District Court for the Eastern District Court of New York, alleging that Fonar’s Upright® MRI scanners infringe plaintiff’s patent which relates to the moving of a patient into the scanner. Fonar believes plaintiff’s claims are without merit and further, that the patent is invalid. The parties have settled the case for $150,000 payable by Fonar in twelve installments and certain licenses and covenants not to sue. The $150,000 has been recorded in the Company’s consolidated statements of income for the year ended June 30, 2014. As of June 30, 2015, the Company has paid the $150,000. Bolt MRI Technologies v. Fonar Corporation, Health Management Corporation of America & Health Diagnostics, LLC, was commenced on July 22, 2013, when Bolt MRI Technologies filed an action against Fonar Corporation, Health Management Corporation of America and Health Diagnostics, LLC alleging infringement of the same patent which is the subject of the Bonutti case. Bolt alleged that the patent was assigned to Bolt. The settlement of the Bonutti case covers this case as well. |  |  |
Settlement of Case (value) | $ 150,000 |  |  |
Jack Shapiro |  |  |  |
Details of Case | Shapiro v. Fonar Corporation, New York Supreme Court, Suffolk County. Previously, The Company and Dr. Shapiro had settled an action commenced in Nassau County under the same name. The amount remaining payable under the settlement agreement according to The Company’s records is $258,400, but the payment and timing of the payment was dependent on obtaining an order for an Upright® MRI Scanner for the Company and the making of installment payments thereunder by the customer. Briefly stated, the balance of $258,400 was and is not yet due. Dr. Shapiro claims that the Company was in breach of the settlement agreement and seeks payment of no less than $307,000 plus interest and attorneys’ fees. The Company believes it has scrupulously observed the terms of the settlement agreement and that Dr. Shapiro’s claims are without merit. The Company answered the Complaint and the one is now in discovery. |  |  |
Settlement of Case (value) | $ 258,400 |  |  |

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