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UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
Washington,D.C. 20549
FORM
8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d) of the Securities Act of 1934
Dateof Report (Date of earliest event reported):
December 31, 2022
FONARCORPORATION
______________________________________________________
(Exactname of registrant as specified in its charter)
Delaware 0-10248 11-2464137
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
110 Marcus Drive
,
Melville
,
New York
11747
(
631
)
694-2929
(Address, including zip code, and telephone number
of registrant's principal executive office)
Checkthe appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant underany of the
following provisions (see General Instruction A.2. below):
[]
Writtencommunications pursuant to Rule 425 under the Securities Act 17 CFR
230.425)
[]
Solicitingmaterial pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[]
Pre-commencementcommunications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[]
Pre-commencementcommunications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c)
Securitiesregistered pursuant to Section 12(b) of the Act.
Title of each class Trading symbol(s) Name of each exchange on which registered
Common Stock, $.0001 par value FONR Nasdaq
Stock Exchange
Indicateby check mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 ((s)230.405of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 ((s)240.12b-2 of this
chapter). [ ]
Ifan emerging growth company, indicate by check mark if the registrant has
elected not to use the extended transition period for complyingwith any new or
revised financial accounting standards provided pursuant to Section 13(a) of
the Exchange Act.
[
]
Item2.02(a) Results of Operations and Financial Condition.
Wereported the results of operations and financial condition of the Company
for the second Fiscal Quarter of Fiscal 2023 which endedDecember 31, 2022 in a
press release dated February 14, 2023.
Exhibits:
99.1 Press Release dated February 14, 2023.
SIGNATURES
Pursuantto the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalfby the
undersigned hereunto duly authorized.
FONARCORPORATION
(Registrant)
-------------------------------------------
By/s/ Timothy R. Damadian
TimothyR. Damadian
Presidentand CEO
Dated:February 15, 2023
NEWS
For Immediate Release The Inventor of MR ScanningTM
Contact: Daniel Culver An ISO 9001 Company
Director of Communications Melville, New York 11747
E-mail: investor@fonar.com Phone: (631) 694-2929
www.fonar.com Fax: (631) 390-1772
FONARANNOUNCES SIX MONTHS AND 2ND QUARTER FINANCIAL RESULTS FOR FISCAL 2023
. Total MRI scan volume at the HMCA-managed sites decreased 5% to 89,888 scans for the
six months ending December 31, 2022 versus the corresponding period one year earlier.
. Cash and cash equivalents and short-term investments increased 2% to $49.5
million at December 31, 2022, versus the fiscal year ended June 30, 2022.
. Total Revenues-Net for the six month period ended December 31, 2022 decreased by 2% to $47.4 million, and for the
quarter ended December 31, 2022 decreased by 1% to $24.3 million, versus corresponding periods one year earlier.
. Income from Operations for the six month period ended December 31, 2022 decreased 33% to $8.1 million, and for the
quarter ended December 31, 2022 decreased 35% to $4.2 million, versus the corresponding periods one year earlier.
. Net Income for the six months ended December 31, 2022 decreased 47% to $5.5 million, and for the quarter
ended December 31, 2022 decreased 45% to $2.8 million, versus corresponding periods one year earlier.
. Diluted Net Income per Common Share for the six month period ended December 31, 2022 decreased 46% to $0.60, and
for the quarter ended December 31, 2022 decreased 44% to $0.32, versus the corresponding periods one year earlier.
. Net Book Value Per Common Share increased by 4% to $22.25 per share at
December 31, 2022, versus the corresponding period one year earlier.
MELVILLE,NEW YORK, February 14, 2023 - FONAR Corporation (NASDAQ-FONR), The
Inventor of MR ScanningTM, reported today its financial resultsfor the fiscal
2023 six month period and quarter ended December 31, 2022. FONAR's primary
source of income and growth is attributableto its diagnostic imaging
management subsidiary, Health Management Company of America (HMCA). In 2009,
HMCA managed 9 MRI scanners. Currently,HMCA manages 40 MRI scanners.
FinancialResults
TotalRevenues-Net for the six months ended December 31, 2022 decreased 2% to
$47.4 million, as compared to $48.2 million for the correspondingsix month
period ended December 31, 2021.
Page
1
TotalRevenues-Net for the quarter ended December 31, 2022 decreased 1% to
$24.3 million as compared to $24.4 million for the quarter endedDecember 31,
2021.
Incomefrom Operations for the six months ended December 31, 2022 decreased 33%
to $8.1 million as compared to $12.2 million for the correspondingsix month
period ended December 31, 2021.
Incomefrom Operations for the quarter ended December 31, 2022 decreased 35% to
$4.2 million as compared to $6.5 million for the correspondingquarter ended
December 31, 2021.
NetIncome for the six months ended December 31, 2022 decreased 47% to $5.5
million as compared to $10.3 million for the corresponding sixmonth period
ended December 31, 2021.
NetIncome for the quarter ended December 31, 2022 decreased 45% to $2.8
million as compared to $5.1 million for the corresponding quarterended
December 31, 2021.
DilutedNet Income per Common Share Available to Common Stockholders for the
six months ended December 31, 2022 decreased 46% to $0.60 as comparedto $1.11
for the corresponding six month period ended December 31, 2021.
DilutedNet Income per Common Share Available to Common Stockholders for the
quarter ended December 31, 2022 decreased 44% to $0.32 as comparedto $0.57 for
the corresponding quarter ended December 31, 2021.
Selling,general & administrative expenses (SG&A) for the six months ended
December 31, 2022 increased 31% to $12.9 million as comparedto $9.9 million
for the corresponding six months ended December 31, 2021.
SG&Afor the quarter ended December 31, 2022 increased 38% to $6.6 million, as
compared to $4.8 million for the corresponding quarter endedDecember 31, 2021.
Theincrease in SG&A was almost exclusively due to more reserves being placed
on management contracts and management fees and other receivablesthat had
resulted from the COVID-19 pandemic. In addition,
workforce shortages among both MRI technologistsand administrative staff
prevented the company from meeting patient demand at many of our sites. This
problem with hiring of skilledpersonnel is not unique to HMCA, as the problem
exists throughout the entire healthcare industry. The ever-increasing demand
for MRIstudies further exacerbates the situation. HMCA-managed sites have
always competed with other MRI providers for patient referrals. Nowthe company
is competing for employees as well. Also, at the end of September, hurricane
Ian had a negative impact on scan volume inFlorida although to a much lesser
degree.
OperatingCash Flow at December 31, 2022 was $5.9 million, compared with $5.8
million for the six-month period ended December 31, 2021.
Cashand cash equivalents and short term investments were $49.5 million at
December 31, 2022 as compared to $48.7 million at June 30, 2022.
Page
2
TotalCurrent Assets at December 31, 2022 were $120.7 million as compared to
$118.7 million at June 30, 2022.
TotalAssets were $197.5 million at December 31, 2022 as compared to $199.3
million at June 30, 2022.
TotalCurrent Liabilities were $13.7 million at December 31, 2022 as compared
to $16.7 million at June 30, 2022.
TotalLiabilities at December 31, 2022 were $49.4 million, as compared to $53.1
million at June 30, 2022.
TotalStockholders' Equity at December 31, 2022 was $148.1 million, as compared
to $146.2 million at June 30, 2022.
Theratio of Total Assets / Total Liabilities at December 31, 2022 was 4.0 as
compared to 3.8 at June 30, 2022.
WorkingCapital increased 3% to $107.0 million at December 31, 2022 as compared
to $101.9 million at June 30, 2022.
NetBook Value per
CommonShare increased 4% to $22.25 at December 31, 2022 as compared to $21.32
at December 31, 2021, one year ago.
ManagementDiscussion
TimothyDamadian, Chairman, President and CEO of FONAR, said: "Scan volume at
the HMCA-managed sites for the 6-month period ending on December31, 2022 was
89,888, which was 5% lower than the scan volume in the corresponding period
ending December 31, 2021 (94,460). However,scan volume improved by 2% in the
last three months in comparison to the first three months of that 6-month
period, from 44,476 to 45,412."
"Althoughit's been challenging returning to previous rates of scan volume
growth, we are now making progress. I am pleased to report thatthe
HMCA-managed sites have recently added 19 MRI technologists, which allows for
expanded business hours and therefore higher scan volume."
"Staffingshortages continue to be problematic across the entire nation.
According to Healthcare Finance News (Jan 5, 2022), h
ealthcarehas been the second largest industry sector hit by the "Great
Resignation," with tens of thousands of workers abandoningtheir posts or the
field altogether in the wake of the COVID-19 pandemic. On top of that, U.S.
Bureau of Labor Statistics data pointto a trend that more technologists will
be needed to meet growing demand for imaging services.
Accordingly, we have successfullydeveloped and implemented innovative
strategies for recruiting MRI technologists, as mentioned previously."
Page
3
"Asof December 31, 2022, HMCA was managing 40 MRI scanners, 25 in New York and
15 in Florida. We will add a new location in Casselberry,Florida in the third
fiscal quarter, followed shortly thereafter by another location in the
southern part of Bronx, New York. Both brandnew facilities, they are ideal
extensions of the existing HMCA networks in their respective regions and are
expected to contribute significantlyto the growth of our Company."
"Iam grateful to our management team and all the HMCA employees who have
admirably met the COVID and now the post-COVID challenges of thepast few years
and kept the Company profitable throughout."
"Iwould also like to report that pursuant to our September 13, 2022
announcement of a FONAR stock repurchase plan of up to $9 million,we have to
date repurchased 53,607 shares at a cost of $922,593."
CompanyEvent
OnAugust 3, 2022, FONAR founder and The Father of MRI, Raymond V. Damadian,
died at 86. Dr. Damadian was the Chairman of the Board at thetime of his
passing. Timothy R. Damadian, President and CEO of Fonar Corporation,
succeeded his father as Chairman of the Board.
Dr.Damadian is sorely missed for his leadership and scientific achievement.
Besides the discovery of the basis of MRI (1970) and the buildingof the
world's first MRI scanner (1977), FONAR's founder Raymond V. Damadian had
continued important research. On October 5, 2011,he and FONAR scientist David
Chu, Ph.D.
publisheda study on multiple sclerosis (MS), based on observations made
possible by the Company's unique FONAR UPRIGHT(R) Multi-PositionTMMRI.
Drs.Damadian and Chu co-authored a paper titled "The Possible Role of
Cranio-Cervical Trauma and Abnormal CSF Hydrodynamics in theGenesis of
Multiple Sclerosis." The paper has been published in the journal Physiological
Chemistry and Physics and Medical NMR(Sept. 20, 2011, 41: 1-17).
Usingthe FONAR UPRIGHT(R) Multi-PositionTM MRI, Drs. Damadian and Chu imaged
and measured cerebrospinal fluid flow of eight MS patients.Their findings
revealed that the cause of multiple sclerosis may be biomechanical and related
to earlier trauma to the neck, which canresult in obstruction of the flow of
cerebrospinal fluid (CSF), which is produced and stored in the central
anatomic structures of thebrain known as the ventricles. Since the ventricles
produce a large volume of CSF each day (500 cc), the obstruction can result in
abuild-up of pressure within the ventricles, resulting in leakage of the CSF
into the surrounding brain tissue. The scientists concludedthat the leakage
could be responsible for generating the brain lesions of multiple sclerosis.
The researchers believe that the uniqueability of the FONAR MRI to scan
patients in an upright position is what enabled them to arrive at this result.
Thecomplete study on multiple sclerosis can be accessed at the company website
at: www.fonar.com/pdf/PCP41_damadian.pdf. A press releasecan be found at FONAR
NEWS-100511.
Page
4
Whilerecumbent based MRI is a common tool in research medicine, more research
needs to be done using Upright MRI. Nevertheless, a paper usingFONAR
technology titled: Upright versus supine MRI: effects of body position on
craniocervical CSF flow was published on December 24,2021 in collaboration
with Doctors Marco Muccio and Yulin Ge at the Bernard and Irene Schwartz
Center for Biomedical Imaging, Departmentof Radiology, NYU Grossman School of
Medicine, New York, NY.
Thestudy consisted of 30 asymptomatic volunteers who were scanned in the
UPRIGHT(R) Multi-PositionTM MRI scanner designed and manufacturedby FONAR. The
objective of the study was to understand how CSF is driven by cardiovascular
brain pulsation and how it is affected bybody orientation, supine or upright.
Insummary, body position has significant effects on CSF flow in and out of the
cranium, with more CSF oscillating in supine compared toupright position. Such
difference was driven by an increased caudo-cranial diastolic CSF velocity and
an increased systolic phase durationwhen moving from upright to supine
position. Extrapolation to a 24-hour timeframe suggests that more time spent
in supine position increasestotal amount of CSF exchange between cranial and
spinal CSF space, which may play a beneficial role in waste clearance in the
brain.
The study is published in Fluids and Barriers of the CNS. This is an open
access, peer-reviewed journal that considers manuscripts onall CNS fluids and
barrier systems in health and disease. Its Web address is fluidsbarrierscns.biom
edcentral.com. It may also be foundat Upright versus supine MRI: effects of
body position on craniocervical CSF flow - PubMed (nih.gov).
Dr.Damadian had believed at the time that research using the UPRIGHT(R)
Multi-PositionTM MRI might have profound implications formany neurodegenerative
disorders including Chiari malformation, syringomyelia and Multiple Sclerosis
(MS).
Page
5
AboutFONAR
FonarCorporation, the Inventor of MR ScanningTM, located in Melville, NY, was
incorporated in 1978, and is the first, oldest and mostexperienced MRI company
in the industry. Fonar introduced the world's first commercial MRI in 1980,
and went public in 1981. Fonar'ssignature product is the FONAR UPRIGHT(R)
Multi-PositionTM MRI (also known as the STAND-UP(R) MRI), the only whole-body
MRIthat performs PositionTM Imaging (pMRITM) and scans patients in numerous
weight-bearing positions, i.e. standing, sitting,in flexion and extension, as
well as the conventional lie-down position. The FONAR UPRIGHT(R) MRI often
detects patient problems thatother MRI scanners cannot because they are
lie-down,"weightless-only" scanners. The patient-friendly UPRIGHT(R) MRI has
anear-zero patient claustrophobic rejection rate. As a Fonar customer states,
"If the patient is claustrophobic in this scanner,they'll be claustrophobic in
my parking lot." Approximately 85% of patients are scanned sitting while
watching TV.
Fonarhas new works-in-progress technology for visualizing and quantifying the
cerebral hydraulics of the central nervous system, the flowof cerebrospinal
fluid (CSF), which circulates throughout the brain and vertebral column at the
rate of 32 quarts per day. This imagingand quantifying of the dynamics of this
vital life-sustaining physiology of the body's neurologic system has been made
possible firstby Fonar's introduction of the MRI and now by this latest
works-in-progress method for quantifying CSF in all the normal positions ofthe
body, particularly in its upright flow against gravity. Patients with whiplash
or other neck injuries are among those who will benefitfrom this new
understanding.
Fonar'sprimary source of income and growth is attributable to its wholly-owned
diagnostic imaging management subsidiary, Health Management Companyof America
(HMCA)
www.hmca.com
.
Fonar'ssubstantial list of patents includes recent patents for its technology
enabling full weight-bearing MRI imaging of all the gravity sensitiveregions
of the human anatomy, especially the brain, extremities and spine. It includes
its newest technology for measuring the Uprightcerebral hydraulics of the
cerebrospinal fluid (CSF) of the central nervous system. FONAR UPRIGHT(R)
Multi-PositionTM MRI is theonly scanner licensed under these patents.
#
Thisrelease may include forward-looking statements from the company that may
or may not materialize. Additional information on factors thatcould
potentially affect the company's financial results may be found in the
company's filings with the Securities and Exchange Commission.
Page
6
CONDENSEDCONSOLIDATED BALANCE SHEETS
(Amountsand shares in thousands, except per share amounts)
(UNAUDITED)
ASSETS
December 31, June 30,
2022 2022
Current Assets:
Cash and cash equivalents $ 49,505 $ 48,723
Short term investments 32 32
Accounts receivable - net 3,949 4,336
Accounts receivable - related party 60 -
Medical receivable - net 19,685 20,109
Management and other fees receivable - net 34,910 33,419
Management and other fees receivable - related medical practices - net 8,941 8,603
Inventories 2,634 2,360
Prepaid expenses and other current assets 1,033 1,104
Total Current Assets 120,749 118,686
Accounts receivable - long term 1,278 1,872
Deferred income tax asset - net 10,536 12,843
Property and equipment - net 21,627 22,282
Right-of-use Asset - operating lease 34,107 34,232
Right-of-use Asset - financing lease 829 928
Goodwill 4,269 4,269
Other intangible assets - net 3,577 3,704
Other assets 526 526
Total Assets $ 197,498 $ 199,342
Page
7
CONDENSEDCONSOLIDATED BALANCE SHEETS
(Amountsand shares in thousands, except per share amounts)
(UNAUDITED)
LIABILITIESAND STOCKHOLDERS' EQUITY
December 31, June 30,
2022 2022
Current Liabilities:
Current portion of long-term debt and capital leases $ 42 $ 40
Accounts payable 866 1,552
Other current liabilities 4,137 6,417
Unearned revenue on service contracts 3,847 4,289
Unearned revenue on service contracts - related party 55 -
Operating lease liability - current portion 3,952 3,880
Financing lease liability - current portion 214 210
Customer deposits 632 361
Total Current Liabilities 13,745 16,749
Long-Term Liabilities:
Unearned revenue on service contracts 1,296 1,857
Deferred income tax liability 216 216
Due to related medical practices 93 93
Operating lease liability - net of current portion 33,158 33,091
Financing lease liability - net of current portion 709 838
Long-term debt and capital leases, less current portion 137 155
Other liabilities 74 107
Total Long-Term Liabilities 35,683 36,357
Total Liabilities 49,428 53,106
Page
8
CONDENSEDCONSOLIDATED BALANCE SHEETS
(Amountsand shares in thousands, except per share amounts)
(UNAUDITED)
LIABILITIESAND STOCKHOLDERS' EQUITY (Continued)
STOCKHOLDERS' EQUITY: December 31, 2022 June 30,
2022*
Class A non-voting preferred stock $.0001 par $ - $ -
value; 453 shares authorized at December 31,
2022 and June 30, 2022, 313 issued and outstanding
at December 31, 2022 and June 30, 2022
Preferred stock $.001 par value; - -
567 shares authorized at December
31, 2022 and June 30, 2022,
issued and outstanding - none
Common Stock $.0001 par value; 8,500 shares authorized at December 1 1
31, 2022 and June 30, 2022, 6,563 and 6,566 issued at December
31, 2022 and June 30, 2022, respectively 6,538 and 6,554
outstanding at December 31, 2022 and June 30, 2022 respectively
Class B Common Stock (10 votes per share) $.0001 - -
par value; 227 shares authorized at December
31, 2022 and June 30, 2022; .146 issued and
outstanding at December 31, 2022 and June 30, 2022
Class C Common Stock (25 votes per share) $.0001 - -
par value; 567 shares authorized at December
31, 2022 and June 30, 2022, 383 issued and
outstanding at December 31, 2022 and June 30, 2022
Paid-in 184,130 184,531
capital in
excess of
par value
Accumulated (29,288 ) (33,567 )
deficit
Treasury stock, at cost - 25 (751 ) (675 )
shares of common stock at December
31, 2022 and 12 shares of
common stock at June 30, 2022
Total Fonar 154,092 150,290
Corporation's
Stockholders'
Equity
Noncontrolling (6,022 ) (4,054 )
interests
Total 148,070 146,236
Stockholders'
Equity
Total $ 197,498 $ 199,342
Liabilities and
Stockholders'
Equity
Page
9
CONDENSEDCONSOLIDATED STATEMENTS OF INCOME
(Amountsand shares in thousands, except per share amounts)
(UNAUDITED)
FOR THE THREE MONTHS
ENDED DECEMBER 31,
REVENUES 2022 2021
Patient fee revenue - net of contractual allowances and discounts $ 7,129 $ 7,443
Product sales - net 170 198
Service and repair fees - net 1,838 1,907
Service and repair fees - related parties - net 28 28
Management and other fees - net 12,092 12,108
Management and other fees - related medical practices - net 2,999 2,795
Total Revenues - Net 24,256 24,479
COSTS AND EXPENSES
Costs related to patient fee revenue 4,023 3,323
Costs related to product sales 214 190
Costs related to service and repair fees 722 719
Costs related to service and repair fees - related parties 11 10
Costs related to management and other fees 6,622 6,924
Costs related to management and other fees - related medical practices 1,492 1,690
Research and development 342 370
Selling, general and administrative 6,598 4,770
Total Costs and Expenses 20,024 17,996
Income From Operations 4,232 6,483
Other (Expense) Income (208 ) 47
Interest Expense (12 ) (23 )
Investment Income 263 60
Income Before Provision for Income Taxes and Noncontrolling Interests 4,275 6,567
Provision for Income Taxes (1,463 ) (1,430 )
Net Income 2,812 5,137
Net Income - Noncontrolling Interests (580 ) (1,117 )
Net Income - Attributable to FONAR $ 2,232 $ 4,020
Net Income Available to Common Stockholders $ 2,097 $ 3,777
Net Income Available to Class A Non-Voting Preferred Stockholders $ 101 $ 181
Net Income Available to Class C Common Stockholders $ 34 $ 62
Basic Net Income Per Common Share Available to Common Stockholders $ 0.32 $ 0.58
Diluted Net Income Per Common Share Available to Common Stockholders $ 0.32 $ 0.57
Basic and Diluted Income Per Share - Class C Common $ 0.09 $ 0.16
Weighted Average Basic Shares Outstanding - Common Stockholders 6,527 6,554
Weighted Average Diluted Shares Outstanding - Common Stockholders 6,655 6,682
Weighted Average Basic and Diluted Shares Outstanding - Class C Common 383 383
Page
10
CONDENSEDCONSOLIDATED STATEMENTS OF INCOME
(Amountsand shares in thousands, except per share amounts)
(UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31,
REVENUES 2022 2021
Patient fee revenue - net of contractual allowances and discounts $ 13,205 $ 14,294
Product sales - net 200 346
Service and repair fees - net 3,658 3,844
Service and repair fees - related parties - net 55 55
Management and other fees - net 24,342 24,081
Management and other fees - related medical practices - net 5,987 5,589
Total Revenues - Net 47,447 48,209
COSTS AND EXPENSES
Costs related to patient fee revenue 7,822 6,479
Costs related to product sales 383 299
Costs related to service and repair fees 1,440 1,443
Costs related to service and repair fees - related parties 22 21
Costs related to management and other fees 13,124 13,801
Costs related to management and other fees - related medical practices 2,890 3,326
Research and development 691 755
Selling, general and administrative 12,932 9,860
Total Costs and Expenses 39,304 35,984
Income From Operations 8,143 12,225
Other (Expense) Income (197 ) 858
Interest Expense (27 ) (40 )
Investment Income 414 122
Income Before Provision for Income Taxes and Noncontrolling Interests 8,333 13,165
Provision for Income Taxes (2,871 ) (2,846 )
Net Income 5,462 10,319
Net Income - Noncontrolling Interests (1,183 ) (2,412 )
Net Income - Attributable to FONAR $ 4,279 $ 7,907
Net Income Available to Common Stockholders $ 4,020 $ 7,430
Net Income Available to Class A Non-Voting Preferred Stockholders $ 193 $ 355
Net Income Available to Class C Common Stockholders $ 66 $ 122
Basic Net Income Per Common Share Available to Common Stockholders $ 0.62 $ 1.13
Diluted Net Income Per Common Share Available to Common Stockholders $ 0.60 $ 1.11
Basic and Diluted Income Per Share - Class C Common $ 0.17 $ 0.32
Weighted Average Basic Shares Outstanding - Common Stockholders 6,534 6,554
Weighted Average Diluted Shares Outstanding - Common Stockholders 6,662 6,682
Weighted Average Basic and Diluted Shares Outstanding - Class C Common 383 383
Page
11
CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS
(Amountsand shares in thousands, except per share amounts)
(UNAUDITED)
FOR THE SIX MONTHS
ENDED DECEMBER 31,
2022 2021
Cash Flows from Operating Activities:
Net income $ 5,462 $ 10,319
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 2,218 2,358
Amortization on right-of-use assets 2,238 1,644
Provision for bad debts 2,891 822
Deferred income tax - net 2,306 2,437
Gain on forgiveness of PPP loan - (701 )
(Increase) decrease in operating assets, net:
Accounts, medical and management fee receivable(s) (3,375 ) (2,429 )
Notes receivable 11 22
Inventories (274 ) (436 )
Prepaid expenses and other current assets 60 (33 )
Other assets - 102
Increase (decrease) in operating liabilities, net:
Accounts payable (685 ) (1,090 )
Other current liabilities (3,228 ) (5,395 )
Operating lease liabilities (1,874 ) (1,414 )
Financing lease liabilities (126 ) (101 )
Customer deposits 271 (277 )
Other liabilities (33 ) (33 )
Net cash provided by operating activities 5,862 5,795
Cash Flows from Investing Activities:
Purchases of property and equipment (1,362 ) (2,106 )
Purchase of noncontrolling interests - (546 )
Cost of patents (74 ) (38 )
Net cash used in investing activities (1,436 ) (2,690 )
Cash Flows from Financing Activities:
Repayment of borrowings and capital lease obligations (15 ) (13 )
Purchase of treasury stock (478 ) -
Distributions to noncontrolling interests (3,151 ) (2,701 )
Net cash used in financing activities (3,644 ) (2,714 )
Net Increase in Cash and Cash Equivalents 782 391
Cash and Cash Equivalents - Beginning of Period 48,723 44,460
Cash and Cash Equivalents - End of Period $ 49,505 $ 44,851
Page
12
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