SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of FONAR Corporation, its majority and wholly-owned subsidiaries and partnerships (collectively the “Company”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Revenues

The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgements employed in the determination of revenue.

Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide diagnostic services to the patients. Revenues are recorded during the period our obligations to provide diagnostic services are satisfied. Our performance obligations for diagnostic services are generally satisfied over a period of less than one day. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates per diagnostic services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. In accordance with ASC Topic 260-10, “Participating Securities and the Two-Class method”, the Company uses the Two-Class method for calculating basic income per share and applied the if converted method in calculating diluted income per share for the three and nine months ended March 31, 2023 and 2022.

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 nine months ended March 31, 2023 and 2022, diluted EPS for common shareholders includes 128 shares upon conversion of Class C Common.

Earnings Per Share

	Three months ended March 31, 2023						Three months ended March 31, 2022
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic
Numerator:  Net income available to common stockholders	$	3,860	$	3,627	$	59	$	2,291	$	2,153	$	35
Denominator:
Weighted average shares outstanding		6,481		6,481		383		6,554		6,554		383
Basic income per common share	$	0.60	$	0.56	$	0.16	$	0.35	$	0.33	$	0.09
Diluted
Denominator: Weighted average shares outstanding				6,481		383				6,554		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,609		383				6,682		383
Diluted income per common share			$	0.55	$	0.16			$	0.32	$	0.09

	Nine months ended March 31, 2023						Nine months ended March 31, 2022
	Total		Common Stock		Class C Common Stock		Total		Common Stock		Class C Common Stock
Basic
Numerator:  Net income available to common stockholders	$	8,139	$	7,647	$	125	$	10,198	$	9,583	$	157
Denominator:
Weighted average shares outstanding		6,487		6,487		383		6,554		6,554		383
Basic income per common share	$	1.25	$	1.18	$	0.33	$	1.56	$	1.46	$	0.41
Diluted
Denominator: Weighted average shares outstanding				6,487		383				6,554		383
Convertible Class C Stock				128		—				128		—
Total Denominator for diluted earnings per share				6,615		383				6,682		383
Diluted income per common share			$	1.16	$	0.33			$	1.43	$	0.41

Recent Accounting Standards

FASB, the Emerging Issues Task Force and the SEC have issued certain other accounting standards, updates, and regulations as of March 31, 2023 that will become effective in subsequent periods; however, management does not believe that any of those updates would have significantly affected the Company’s financial accounting measures or disclosures had they been in effect during 2023 or 2022, and it does not believe that any of those standards will have a significant impact on our consolidated condensed financial statements at the time they become effective.