FONAR Enters Into Agreement With Subsidiary To Lease MRI Scanners; New Strategy Expected To Enhance Profitability

Business Wire, Sept 16, 1999

MELVILLE, N.Y.--(BUSINESS WIRE)--Sept. 16, 1999--

FONAR Corporation (NASDAQ:FONR), The Open MRI Company(TM), announced today that FONAR will sell MRI scanners to its wholly-owned physician and diagnostic imaging management subsidiary, Health Management Corporation of America (HMCA), and provide financing under a finance lease arrangement.

Installing state-of-the-art FONAR MRI equipment at select high-revenue HMCA-managed MRI facilities will improve HMCA's operating profits and will enable the MRI facilities to be more productive. Dr. Damadian, president and chairman of FONAR, said, "Our return on investment by installing FONAR equipment in a HMCA-managed MRI facility will be substantially greater than the one-time profit we realize on the sale of an MRI scanner."

Since HMCA is a wholly-owned subsidiary, the anticipated increased productivity at existing centers and the addition of new MRI centers made possible by this program will substantially increase FONAR revenues and net income. HMCA presently manages 12 primary care and multi-specialty physician practices, and 25 diagnostic imaging centers, in Pennsylvania, Florida, New York, and Georgia.

Be sure to visit FONAR's Web site for Company product and investor information. www.fonar.com

This release may include forward-looking statements from the company that may or may not materialize. Additional information on factors that could potentially affect the company's financial results may be found in the company's filings with the Securities and Exchange Commission.