NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Earnings Per Share

FONAR CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2015 and 2014

(Amounts and shares in thousands, except per share amounts)

(UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Earnings Per Share

Basic earnings per share (“EPS”) is computed based on weighted average number of shares common stock and stock equivalents outstanding, net of common stock. In accordance with ASC topic 260-10, “Participating Securities and the Two-Class method”, the Company used the Two-Class method for calculating basic earnings per share and applied the if converted method in calculating diluted earnings per share for the three and six months ended December 31, 2015 and December 31, 2014.

Diluted EPS reflects the potential dilution from the exercise or conversion of all dilutive securities into common stock based on the average market price of common shares outstanding during the period. For the three and six months ended December 31, 2015 and December 31, 2014, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common.

	Three months ended December 31, 2015						Three months ended December 31, 2014
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic Numerator: Net income available to common stockholders	$	3,493	$	3,266	$	58	$	2,658	$	2,485	$	44
Denominator: Weighted average shares outstanding		6,051		6,051		383		6,051		6,051		383
Basic income per common  share	$	0.58	$	0.54	$	0.15	$	0.44	$	0.41	$	0.12
Diluted Denominator: Weighted average shares outstanding				6,051		383				6,051		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,179		383				6,179		383
Diluted income per common share			$	0.53	$	0.15			$	0.40	$	0.12

	Six months ended December 31, 2015						Six months ended December 31, 2014
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic Numerator: Net income available to common stockholders	$	6,355	$	5,942	$	105	$	5,193	$	4,856	$	86
Denominator: Weighted average shares outstanding		6,051		6,051		383		6,050		6,050		383
Basic income per common share	$	1.05	$	0.98	$	0.27	$	0.86	$	0.80	$	0.22
Diluted Denominator: Weighted average shares outstanding				6,051		383				6,050		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,179		383				6,178		383
Diluted income per common share			$	0.96	$	0.27			$	0.79	$	0.22