FONAR CORP Segments Disclosure

NOTE 15 - SEGMENT AND RELATED INFORMATION

 

The Company provides segment data in accordance with the provisions of ASC 280, “Disclosures about Segments of an Enterprise and Related Information” which was adopted during our fiscal ending June 30, 2025.

 

Our chief operating decision maker (“CODM”), who is also our CEO, evaluates the financial performance of our segments based upon their respective revenue and segmented internal profit and loss statements prepared on a basis not consistent with GAAP. The CODM considers actual to budget and current year actual to prior year actual for revenue and other profit and loss measures on a monthly basis for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

 

The Company operates in two industry segments - manufacturing and the servicing of medical equipment and management of diagnostic imaging centers.

 

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. All intersegment sales are market-based. The Company evaluates performance based on income or loss from operations.

 

Summarized financial information concerning the Company’s reportable segments is shown in the following table:

 

Summarized Segment Financial Information 

Schedule of Segment Financial Information
		Manufacturing and Servicing of Medical				Management of Diagnostic Imaging
Fiscal 2025:		Equipment				Centers				Totals
Net revenues from external customers		$	8,977,349			$	95,373,969			$	104,351,318
Cost of Sales
Salaries and wages			2,905,311				19,384,410				22,289,721
Rent expense			—				4,822,044				4,822,044
Other Cost of sales expenses**			2,944,740				31,385,807				34,330,547
Total Cost of sales		$	5,850,051			$	55,592,261			$	61,442,312
Research and development
Salaries and wages			766,963				—				766,963
Other research and development costs**			809,123				—				809,123
Total Research and development costs		$	1,576,086			$	—				1,576,086
Selling, general and administrative expenses
Salaries and wages			4,934,716				10,983,643				15,918,359
Rent expense			1,251,924				36,528				1,288,452
Other selling, general and administrative expenses**			2,970,693				9,556,659				12,527,352
Total Selling, general and administrative expenses		$	9,157,333			$	20,576,830			$	29,734,163
Total costs and expenses		$	16,619,740			$	76,133,091			$	92,752,561
(Loss) Income from operations		$	(7,606,121	)		$	19,204,878			$	11,598,757
Investment income			107,777				2,011,203				2,118,980
Other income			52,508				9,993				62,501
(Loss) Income before provision for income taxes		$	(7,445,836	)		$	21,226,074			$	13,780,238
Provision for income taxes			(2,885,852	)			(220,953	)			(3,106,805	)
Net (Loss) income		$	(10,331,688	)		$	21,005,121			$	10,673,433
Intersegment net revenues *			1,189,130				—				1,189,130
Depreciation and amortization			209,325				4,488,996				4,698,321
Total identifiable assets		$	34,401,915			$	182,646,336			$	217,048,251
Capital expenditures			375,599				3,441,307				3,816,906

 

Fiscal 2024:
Net revenues from external customers		$	8,329,106			$	94,554,983			$	102,884,089
Cost of Sales
Salaries and wages			2,684,218				18,913,412				21,597,630
Rent expense			—				4,532,535				4,532,535
Other Cost of sales expenses**			2,089,924				29,523,955				31,613,879
Total Cost of sales		$	4,774,142			$	52,969,902			$	57,744,044
Research and development
Salaries and wages			781,012				—				781,012
Other research and development costs**			954,937				—				954,937
Total Research and development costs		$	1,735,949			$	—			$	1,735,949
Selling, general and administrative expenses
Salaries and wages			4,794,512				10,156,520				14,951,032
Rent expense			1,076,069				73,676				1,149,745
Other selling, general and administrative expenses**			2,906,446				7,861,509				10,767,955
Selling, general and administrative expenses		$	8,777,027			$	18,091,705			$	26,868,732
Total costs and expenses		$	15,287,118			$	71,061,607			$	86,348,725
(Loss) Income from operations		$	(6,958,012	)		$	23,493,376			$	16,535,364
Investment income			120,387				2,006,052				2,126,439
Other income (expenses)			640,952				(36,370	)			604,582
(Loss) Income before provision for income taxes		$	(6,196,673	)		$	25,463,058			$	19,266,385
Provision for income taxes			(4,788,028	)			(380,940	)			(5,168,968	)
Net (Loss) income		$	(10,984,701	)		$	25,082,118			$	14,097,417
Intersegment net revenues *			1,073,333				—				1,073,333
Depreciation and amortization			238,802				4,357,619				4,596,421
Total identifiable assets		$	30,360,188			$	183,885,781			$	214,245,969
Capital expenditures			32,885				789,961				822,846

 

*	Amounts eliminated in consolidation
**	Other segment costs include supplies, professional fees, marketing expenses, repairs and maintenance and other operational costs.

 

Export Product Sales

 

The Company’s areas of operations are principally in the United States. The Company had export sales of medical equipment amounting to 1.4% and 0.2% of product sales revenues to third parties for the years ended June 30, 2025 and 2024, respectively.

 

The foreign product sales, as a percentage of product sales to unrelated parties, were made to customers in the following countries:

 

Schedule of export product sales
		For the Years Ended June 30
		2025				2024
Canada			—				0.2	%
Puerto Rico			1.4	%			—
			1.4	%			0.2	%

 

Foreign Service and Repair Fees

 

The Company’s areas of service and repair are principally in the United States. The Company had foreign revenues of service and repair of medical equipment amounting to 7.7% and 7.4% of consolidated net service and repair fees for the years ended June 30, 2025 and 2024, respectively. Foreign service and repair fees, as a percentage of total service and repair fees, were provided principally to the following countries:

 

 Foreign Service and Repair Fees

 

Schedule of Foreign Service and Repair Fees
		For the Years Ended June 30,
		2025				2024
Puerto Rico			1.3	%			1.9	%
Switzerland			0.3				0.3
Germany			3.0				2.0
England			1.3				0.7
United Arab Emirates			0.1				0.3
Dominican Republic			1.2				1.2
Canada			0.1				—
Greece			0.4				0.3
Australia			—				0.7
			7.7	%			7.4.4	%

 

 The Company does not have any material assets outside of the United States.