# Fonar Corp > Clarifo company profile — qualitative business description generated from > the company's filings. Financial statements, charts and ratios are > available on Clarifo (https://www.clarifo.com/en/companies/Fonar Corp). ## Overview FONAR Corp designs, manufactures, sells, and services MRI scanners, with a distinctive focus on its Upright® MRI system that can image patients in weight-bearing positions. Through its HMCA subsidiary, the company also manages and operates diagnostic imaging centers, mainly in Florida, creating a combined equipment-and-services model around MRI utilization. ## Products & services • Upright® MRI scanners and related MRI systems • MRI scanner service, maintenance, and repair • Software improvements and hardware upgrades • Diagnostic imaging center management services through HMCA • Billing, collections, credentialing, and administrative support • Owned and managed MRI facilities in Florida - **MRI equipment** (15%) — Design, manufacture, and sale of Upright® and other MRI scanners. - **Service and maintenance** (8%) — Repair, maintenance, and remote monitoring for installed MRI systems. - **Upgrades and software enhancements** (2%) — Hardware and software upgrades that extend scanner capability and life. - **Physician management and diagnostic services** (75%) — Management, billing, and operating services for imaging centers under HMCA. - Upright® MRI scanners - MRI service and maintenance contracts - Software and hardware upgrades for installed scanners - Diagnostic imaging center management services - Billing, collections, credentialing, and admin support - Owned and managed Florida imaging facilities ## Customers FONAR sells MRI equipment primarily to private diagnostic imaging centers and hospital outpatient imaging facilities. Its service and upgrade revenue comes from the installed scanner base, while HMCA’s management business serves imaging centers and related professional corporations that need outsourced operations, billing, and administrative support. The company also targets physicians who influence scanner purchasing decisions, especially neurosurgeons, orthopedic surgeons, radiologists, and general physicians. - **Private diagnostic imaging centers** (primary) — Buy Upright® MRI scanners and service contracts to differentiate imaging offerings and attract referrals. - **Hospital outpatient imaging facilities** (secondary) — Purchase MRI equipment for outpatient diagnostic capacity and clinical workflow. - **Managed imaging centers and professional corporations** (primary) — Use HMCA for management, billing, collections, staffing, and office support. - **Installed-base scanner owners** (secondary) — Buy maintenance, repairs, and upgrades to keep scanners operational and competitive. - **Physician referral influencers** (emerging) — Neurosurgeons, orthopedists, radiologists, and general physicians influence adoption of Upright® MRI. - Private diagnostic imaging centers buying MRI scanners - Hospital outpatient imaging facilities - Imaging centers needing outsourced management and billing - Physicians influencing scanner choice and referral patterns - Installed-base customers buying service and upgrades ## Geography FONAR is headquartered in Melville, New York and operates primarily in the United States. Its HMCA subsidiary owns and manages six diagnostic imaging facilities in Florida, while the company also reports modest foreign revenue. Geography matters because the business is tied to U.S. reimbursement, FDA regulation, and local imaging-center economics, with Florida and New York being operationally important. - **United States** (99.7%) — Derived from disclosed foreign revenue of about $314k on $51.6m six-month revenue, implying nearly all revenue is U.S.-based. - **Foreign** (0.3%) — Management disclosed approximately $314k in foreign revenues for the first six months of fiscal 2026 and fiscal 2025. - Headquartered in Melville, New York - Six HMCA imaging facilities are located in Florida - Most revenue is generated in the United States - Foreign revenue is small relative to total revenue - U.S. reimbursement and regulation drive demand and pricing ## Strategy FONAR’s strategy is to expand MRI utilization by improving and adding managed imaging facilities, increasing scan volume, and supporting the installed base with service and upgrades. It also seeks to widen recognition of the Upright® MRI through physician-focused marketing and product enhancements such as SwiftMR™, while maintaining a differentiated niche against larger scanner manufacturers. - **Expand HMCA imaging capacity and scan volume** (short-term) — Higher utilization drives recurring diagnostic-services revenue and improves fixed-cost absorption. - **Grow installed-base service revenue** (medium-term) — Service and maintenance provide recurring income and deepen customer retention. - **Differentiate Upright® MRI in niche clinical use cases** (medium-term) — Unique weight-bearing imaging supports a premium positioning versus standard MRI systems. - Increase scan volume at HMCA-managed and owned facilities - Expand and improve MRI facilities, including new scanner placements - Grow service and maintenance revenue from the installed base - Promote Upright® MRI awareness among physicians and patients - Use software upgrades like SwiftMR™ to improve image quality and throughput ## Risks FONAR faces demand pressure from reimbursement cuts, intense competition from larger MRI manufacturers, and dependence on utilization at its managed imaging centers. The company also disclosed cybersecurity threats and a material weakness in IT controls, which could disrupt operations or increase remediation costs. Because a large share of revenue is tied to U.S. healthcare economics and third-party payer collections, changes in reimbursement, credit conditions, or payer mix can quickly affect margins and cash flow. - **MRI reimbursement pressure** [high] — Lower reimbursement can reduce customer willingness to buy scanners and pressure pricing. - **Competition from larger MRI manufacturers** [high] — GE, Siemens, Hitachi, and Philips have greater resources and scale. - **Cybersecurity and IT control weakness** [critical] — Breaches or ransomware could disrupt operations, billing, and compliance; management disclosed a material weakness. - **Third-party payer collection risk** [high] — HMCA and related PCs depend on collections from insurers, government programs, and patients. - Lower reimbursement rates can reduce scanner demand and pricing - Larger competitors have more resources and production capacity - Cybersecurity incidents could disrupt imaging operations and billing - Material weakness in IT controls raises operational and reporting risk - Collections depend on third-party payers and patient payments - Utilization risk at managed centers affects diagnostic-services revenue ## Accounting FONAR recognizes scanner and major-upgrade revenue using percentage-of-completion accounting, so timing of production milestones affects reported revenue. Its diagnostic-services business depends on receivables from third-party payers and related professional corporations, making allowances, CECL estimates, and contractual discounts important to earnings quality. The company also uses valuation allowances for deferred tax assets and may face judgment around collectability, customer advances, and non-controlling interests in HMCA-related entities. - **Percentage-of-completion revenue recognition** — Can shift revenue and margin recognition between periods - **Receivable allowances and CECL** — Affects reported revenue realizability and bad-debt expense - **Contractual allowances and discounts** — Impacts net revenue and balance-sheet receivables - **Deferred tax asset valuation allowance** — Can materially affect tax expense and net income - **Non-controlling interests in HMCA/HDM** — Changes net income attributable to FONAR shareholders - Percentage-of-completion revenue affects timing of scanner sales - Customer advances can defer revenue until production begins - CECL and receivable allowances affect HMCA and PC collections - Contractual allowances and discounts reduce medical receivables - Deferred tax asset valuation allowance reflects uncertain utilization --- *Last updated: 2026-04-28T20:07:13.597661+00:00*