Fonar(US:FONR)2021-10-12 22:54MRI Technology and Equipment - Fonar's Upright® MRI scanners accounted for approximately 0.8% of total revenues and 10.0% of medical equipment revenues in fiscal 2021, up from 0.1% and 1.0% respectively in fiscal 2020[43]. - The Upright® MRI allows for weight-bearing scans, which can be performed in various positions, enhancing diagnostic capabilities for conditions like Arnold-Chiari Syndrome and scoliosis[23][34]. - Fonar introduced the Upright® Multi-Position™ MRI scanner, which is designed to provide non-claustrophobic imaging experiences for patients[17][36]. - Fonar's scanners operate at a magnetic field strength of 0.6 Tesla, providing a broad range of clinical capabilities and imaging protocols[27]. - The Upright MRI technology offers a significant contrast advantage, with soft tissue contrasts for detecting cancers reaching up to 180%[69]. - Fonar's unique Upright MRI technology allows for weight-bearing imaging, which is critical for diagnosing position-dependent pathologies[75]. Business Operations and Expansion - As of June 30, 2021, HMCA manages a total of 39 MRI scanners, with 25 located in New York and 14 in Florida, contributing to patient volume during the COVID-19 pandemic[24]. - The company has opened a new facility in Pembroke Pines, Florida, and added four additional MRI scanners in New York[24]. - Fonar's forward-looking statements indicate plans for business expansion, although they acknowledge risks and uncertainties, including those related to the COVID-19 pandemic[21][22]. - HMCA's growth strategy includes plans to install three new facilities in fiscal 2022: one in New York and two in Florida[129]. - Fonar's installed base of MRI scanners continues to provide an additional source of income independent of direct sales[52]. Financial Performance - Fonar's service and maintenance revenues from the installed base were approximately $7.7 million in fiscal 2021, down from $8.2 million in fiscal 2020[53]. - Research and development expenditures for the fiscal year ended June 30, 2021, were $1,635,979, compared to $2,025,376 in the previous year[57]. - The backlog of unfilled orders as of September 15, 2021, was approximately $62,000, a significant decrease from $457,000 at the same time in 2020[61]. - HMCA managed a total of 39 MRI scanners as of June 30, 2021, with revenues increasing to $80.9 million from $77.2 million in fiscal 2020[127]. - In fiscal 2021, the aggregate amount of management fees was $4,897,720 per month, an increase from $4,530,422 per month in fiscal 2020, representing a growth of approximately 8.1%[141]. - Patient fees net of provision for bad debts were $23,307,389 in fiscal 2021, compared to $22,495,260 in fiscal 2020, indicating an increase of about 3.6%[145]. Regulatory Compliance and Challenges - Fonar received FDA clearance for the Upright® MRI scanners in the EU in May 2002, and was approved for ISO 13485 certification in April 2003[120]. - Fonar's products are classified as Class II devices, which are subject to general and special controls by the FDA[90]. - The Quality Management System is applicable to the design, manufacture, and servicing of MRI scanner systems, with FDA authority to conduct inspections[95]. - The company believes it is in compliance with current HIPAA requirements and anticipates future compliance costs, which could have a material adverse effect on its business[185]. - The healthcare fraud statute prohibits schemes to defraud any healthcare benefit program, with violations resulting in felony charges, fines, imprisonment, or exclusion from government programs[187]. Marketing and Client Relations - Fonar's marketing efforts are primarily focused on the Upright® MRI, which is unique as it is both open and allows for weight-bearing imaging[44]. - Fonar's marketing strategy targets neurosurgeons, orthopaedic surgeons, radiologists, and general physicians to increase awareness of the Upright MRI's diagnostic benefits[49]. - HMCA's marketing strategy aims to increase the number of managed facilities and improve patient volume and revenue for its clients[147]. - The outpatient diagnostic imaging industry is highly competitive, with HMCA focusing on attracting physician referrals and enhancing relationships with managed care organizations[163]. Impact of External Factors - The company has faced challenges in marketing efforts due to the COVID-19 pandemic and global economic conditions[51]. - The implementation of the Deficit Reduction Act has adversely affected reimbursement rates, but the company has countered this by increasing scan volumes through marketing efforts[178]. - The implementation of the Patient Protection and Affordable Care Act (PPACA) has significantly impacted the healthcare industry, although the full effects remain uncertain[191].