FONAR Corporation (FONR): Business Model Canvas [Dec-2025 Updated]

You're trying to map out FONAR Corporation's strategy, and frankly, the business model isn't a single road; it's a dual highway built on proprietary tech and service volume. After two decades analyzing firms, I see their $104.4 million total revenue for fiscal 2025 clearly split: the HMCA diagnostic centers drove $95.4 million from patient fees, while the specialized UPRIGHT MRI equipment sales contributed $9.0 million. That unique, weight-bearing imaging is the core value, but you can't ignore the operational reality, like the $2.3 million reserve they had to set aside for insurance risk last year. Keep reading below to see the full nine blocks of how FONAR Corporation actually makes and spends its money.

FONAR Corporation (FONR) - Canvas Business Model: Key Partnerships

You're looking at the critical relationships that keep FONAR Corporation's unique MRI technology moving from the lab to the patient bedside. These partnerships are essential for technology adoption, service delivery, and corporate valuation, so let's break down the key players as of late 2025.

AIRS Medical for AI-powered MRI image enhancement (SwiftMR™)

The collaboration with AIRS Medical centers on integrating SwiftMR™, an AI software product, to improve the efficiency and quality of MRI scans. This technology is FDA 510(k)-cleared for use across all body parts and scanner models ranging from 0.25T to 3.0T. The stated benefit is the potential to reduce MRI scan times by up to 50% while using AI-driven denoising and sharpening to enhance image clarity. FONAR Corporation sees this as a way to boost the profitability of practices using SwiftMR™.

Third-party medical practices utilizing the UPRIGHT® MRI technology

The core of FONAR Corporation's operational revenue comes from its wholly-owned subsidiary, Health Management Company of America (HMCA), which manages diagnostic imaging centers. These centers are the primary venue for the UPRIGHT® MRI, the only scanner licensed under FONAR Corporation's patents for imaging in weight-bearing positions. The performance of this segment is a direct measure of this partnership's success. For the fiscal year ended June 30, 2025, HMCA managed 44 MRI scanners across New York and Florida. The total scan volume for that fiscal year reached a record 216,317 scans, marking a 3.3% increase over the prior fiscal year's 209,346 scans. For the first quarter of fiscal 2026, ending September 30, 2025, total revenues were $26.0 million, up 4% year-over-year.

The UPRIGHT® MRI's patient-friendly design is a key selling point, with approximately 85% of patients scanned in the sitting position, contributing to a near-zero patient claustrophobic rejection rate. The unique ability to perform Position™ Imaging (pMRI™) in various weight-bearing postures is what differentiates this technology.

Insurance carriers and government payers for diagnostic service reimbursement

FONAR Corporation relies on agreements with insurance carriers and government payers to secure reimbursement for the diagnostic services provided by HMCA centers. These third-party payors represent the necessary channel for monetizing the scans performed on the UPRIGHT® MRI systems. The company's total revenues for the fiscal year ended June 30, 2025, were $104.4 million. While the specific reimbursement rates or contracts aren't public detail, the continued growth in scan volume suggests ongoing, albeit perhaps pressured, access to these payment streams.

• The UPRIGHT® MRI often detects problems other scanners miss, which supports medical necessity claims.
• The company's total assets stood at $216.9 million as of June 30, 2025.
• Working Capital increased to $127.5 million at June 30, 2025.

Proposed Acquisition Group for the non-binding 'Take Private' transaction

A significant recent development involves a Proposed Acquisition Group, led by Timothy Damadian, which submitted a preliminary, non-binding proposal to acquire all outstanding capital stock not already owned by the group. This group, which included management and board members, initially held approximately 5.01% of FONAR Corporation stock. The initial proposal, dated July 7, 2025, suggested a price at a premium of no less than 10% over the 90-day average closing market price preceding July 1, 2025. A supplemental proposal on July 17, 2025, specified a cash price of $17.25 per share, representing a premium of approximately 27% over the 90-day average ending June 30, 2025. As of July 1, 2025, the stock price was $15.46, equating to a market capitalization of $97.34 million.

The Board established a special committee of independent directors to review this indication of interest. This transaction, if pursued, would fundamentally alter the ownership structure and potentially the strategic direction of FONAR Corporation.

Here's the quick math on the proposal's premium:

FONAR Corporation (FONR) - Canvas Business Model: Key Activities

You're looking at the core actions FONAR Corporation takes to keep its unique business running, which is a blend of high-tech manufacturing and hands-on medical service management. It's not just about selling the scanner; it's about running the clinics that use them.

The first major activity is the operational management of the diagnostic imaging footprint through its subsidiary, Health Management Company of America (HMCA). This involves the day-to-day running of the facilities, ensuring patient flow, and managing the equipment.

• HMCA managed a total of 44 MRI scanners as of June 30, 2025.
• This total included 26 scanners in New York and 18 scanners in Florida.
• Two additional MRI scanners were added to the managed fleet during fiscal year 2025.

Next, FONAR Corporation is deeply involved in the engineering and maintenance side of its proprietary technology. This activity supports the specialized value proposition of the UPRIGHT® MRI.

A critical, ongoing activity is the management of the revenue stream generated by these centers, which is the company's primary income engine. This covers everything from patient billing to collecting fees from referring physicians.

• Revenues from the diagnostic imaging center segment (HMCA) for the full fiscal year ended June 30, 2025, were $95.4 million.
• This represented a 1% increase from $94.6 million in fiscal year 2024.
• The aggregate amount of active management fees paid to HMCA by related parties in fiscal 2025 was $5,160,735 per month.
• Patient fees net of contractual allowances and discounts recognized by HMCA in fiscal 2025 totaled $33,179,446.

Finally, the company dedicates resources to improving its core technology. You want to see this investment continue to keep the UPRIGHT® MRI competitive.

Research and Development (R&D) expenses for the fiscal year ended June 30, 2025, totaled $1.6 million. That was a 9% decrease compared to the $1.7 million spent in fiscal year 2024. So, the quick math shows they spent $100,000 less on R&D this year, even as they added two new scanners to the managed fleet.

Finance: draft 13-week cash view by Friday.

FONAR Corporation (FONR) - Canvas Business Model: Key Resources

You're looking at the core assets that power FONAR Corporation's business right now, heading into late 2025. These aren't just line items on a balance sheet; they are the unique things FONAR Corporation owns or controls that let it compete.

Proprietary Technology and Intellectual Property

The foundation of FONAR Corporation's value proposition rests heavily on its intellectual property, specifically around its unique scanning method. The company holds a substantial list of patents protecting its technology, which enables full weight-bearing MRI imaging across gravity-sensitive areas like the brain, extremities, and spine. This includes newer technology focused on measuring the Upright cerebral hydraulics of the cerebrospinal fluid (CSF) in the central nervous system. Honestly, the UPRIGHT® Multi-Position™ MRI is the only scanner licensed under these specific patents, which is a significant moat. For example, a patent for a Hydrodynamic encephalopathy detection method and system was granted as recently as February 11, 2025.

These patents build upon the original invention of MRI scanning, giving FONAR Corporation the exclusive right to make, use, and sell many features now common in the industry.

Wholly-Owned Diagnostic Imaging Management Subsidiary: HMCA

The primary engine for FONAR Corporation's revenue and profit is its wholly-owned subsidiary, Health Management Company of America (HMCA). HMCA specializes in providing non-medical management services to diagnostic imaging centers, which helps drive patient volume and revenue at those sites. The growth here is clear when you look at the scanner count over time.

Here's a quick look at the scale of HMCA's operations as of the fiscal year ended June 30, 2025:

HMCA also owns and operates six diagnostic imaging facilities directly in Florida. The management fees charged under agreements were quite specific in fiscal 2025, ranging from $70,358 to $459,544 per month per site.

Financial Strength

You want to see a company that can weather a storm, and FONAR Corporation maintained a solid liquidity position at the end of its last fiscal year. You noted the cash position, and the filings confirm that strength.

The balance sheet as of June 30, 2025, showed:

• Cash and Cash Equivalents: $56.3 million (or $56,334 thousand).
• Total Cash and Cash Equivalents and Short Term Investments: $56.5 million.
• Working Capital: Increased by 4% to $127.5 million compared to the previous fiscal year.
• Book Value per Share: Increased to $25.26 per share.

To be fair, cash and equivalents dipped slightly to $54.3 million by September 30, 2025, the end of the first quarter of fiscal 2026, but that still represents significant on-hand liquidity.

Installed Base and Operational Footprint

The physical network of scanners managed by HMCA represents a tangible, revenue-generating asset base. This installed base is concentrated in two key states.

The total installed base managed by HMCA as of June 30, 2025, was 44 MRI scanners, split between New York and Florida. This is a significant increase from 2009 when HMCA managed only 9 MRI scanners.

The breakdown of the 44 managed scanners is:

• New York locations: 26 scanners.
• Florida locations: 18 scanners.

Two new HMCA-managed MRI scanners were added during fiscal 2025, one in Melville, NY, and one in Naples, FL.

FONAR Corporation (FONR) - Canvas Business Model: Value Propositions

You're looking at the core differentiators for FONAR Corporation (FONR) as of late 2025. The value here isn't just in the hardware; it's in the unique way they capture diagnostic data and the recurring revenue stream that supports it all.

Unique weight-bearing MRI imaging for spine and joint pathology detection

FONAR Corporation's signature product, the FONAR UPRIGHT® Multi-Position™ MRI, offers Position Imaging (pMRI™), which scans patients in numerous weight-bearing positions, like standing or sitting. This capability is critical because it often detects patient problems, especially in the spine and joints, that conventional lie-down, "weightless-only" scanners cannot see. This specialized view provides diagnostic insights directly related to conditions exacerbated by gravity.

Near-zero patient claustrophobic rejection rate with the open UPRIGHT® MRI

The open design of the UPRIGHT® MRI directly addresses a major impediment in the industry: patient claustrophobia. The patient-friendly UPRIGHT® MRI has a stated near-zero patient claustrophobic rejection rate. To illustrate the patient experience, one customer noted, "If the patient is claustrophobic in this scanner, they'll be claustrophobic in my parking lot." Furthermore, approximately 85% of patients are scanned sitting while watching television, making the experience significantly more tolerable.

Comprehensive non-medical management services for physician practices (HMCA)

The Health Management Corporation of America (HMCA) segment is the Company's primary source of income and profit, providing a stable, recurring revenue base. As of the end of Fiscal 2025, HMCA managed a network of 44 MRI scanners across New York and Florida, up from 9 scanners managed in 2009. For the fiscal year ended June 30, 2025, this segment generated revenues of $95.4 million. The most recent reported quarter, Q1 of Fiscal 2026 (ended September 30, 2025), saw HMCA revenues reach $23.5 million, a 3% increase year-over-year for that quarter.

Diagnostic insights from scanning patients in dynamic, functional positions

The ability to scan patients in dynamic positions-standing, sitting, in flexion and extension-is what drives utilization. This is evident in the record scan volume achieved by the HMCA segment. For the fiscal year ended June 30, 2025, total scan volume at HMCA-managed sites hit a record of 216,317 scans, representing a 3.3% increase over the prior year. This consistent volume growth shows the market values the functional data provided by the technology.

Here's a quick look at how the two main revenue streams contributed to the total top line for the fiscal year ended June 30, 2025:

The core value proposition is clearly the specialized imaging technology, but the business model's strength is cemented by the recurring revenue from the 44 managed centers.

You should note the financial trade-off: while Total Revenues increased 1% to $104.4 million in FY2025, Income from Operations decreased 30% to $11.6 million, showing the pressure on margins despite the unique value offered.

• Unique capability: Scans under full body weight.
• Patient comfort: Near-zero claustrophobic rejection rate.
• Operational scale: 44 HMCA-managed MRI scanners as of June 30, 2025.
• Volume validation: Record 216,317 scans in FY2025.
• Financial stability: Cash and cash equivalents of $56.3 million at June 30, 2025.

Finance: draft 13-week cash view by Friday.

FONAR Corporation (FONR) - Canvas Business Model: Customer Relationships

The customer relationship strategy for FONAR Corporation centers on a dual approach, heavily weighted toward long-term service and management contracts rather than transactional equipment sales. This is driven by the performance of its subsidiary, Health Management Company of America (HMCA).

High-touch, direct service management model through HMCA for medical practices.

The relationship with medical practices is managed directly by HMCA, which provides comprehensive non-medical management services. This creates a sticky, high-touch relationship based on operational support, not just technology provision. As of June 30, 2025, HMCA managed a total of 44 MRI scanners across New York and Florida, with 26 sites in New York and 18 in Florida. This segment is the core revenue engine, bringing in $95.4 million in fiscal 2025 revenue. The relationship is sustained by high utilization, evidenced by a record scan volume of 216,317 scans in Fiscal 2025, representing a 3.3% increase over the prior year.

The specific nature of the patient fee relationship within these managed centers is quantified as follows:

Direct sales and service contracts for MRI equipment buyers.

For direct equipment buyers, the relationship extends beyond the initial sale through service and upgrade contracts, which provide recurring revenue. The Medical Equipment and Service segment, which covers these contracts, generated $9.0 million in revenue for the fiscal year ended June 30, 2025. This revenue stream shows a clear focus on installed base retention, as service revenue specifically increased by 10.8% to reach $8.4 million in fiscal 2025. Conversely, new product sales are a smaller, more volatile component; product sales alone decreased by 23.6% to $563,000 in fiscal 2025.

Key aspects of the equipment and service relationship include:

• Service revenue growth in FY2025: 10.8%.
• Total Medical Equipment and Service segment revenue in FY2025: $9.0 million.
• Product sales decrease in FY2025: 23.6%.
• Unearned revenue on service contracts (as of June 30, 2024): $3,870,229, all recognized in fiscal year 2025.

Long-term patient relationships through managed diagnostic imaging centers.

The patient relationship is inherently long-term because it is facilitated by the HMCA-managed centers, which leverage the unique Upright MRI technology. The centers seek to improve patient volume and revenue through ongoing marketing and facility enhancement. The total scan volume at HMCA-managed sites has increased every fiscal year since Fiscal 2020. The company is actively expanding this relationship footprint, adding two HMCA-managed MRI scanners in fiscal 2025, bringing the total to 44. Furthermore, management is seeking to increase the number of locations where market conditions are promising.

The relationship is characterized by volume growth:

• Total HMCA scan volume in Q3 FY2025: 54,612 scans.
• Total HMCA scan volume in first nine months of FY2025: 160,780 scans.
• New scanner additions in FY2025: 2.

You need to track the growth in scanner count against the dip in net income, which fell 24% to $10.7 million in FY2025, despite the volume growth. Finance: draft 13-week cash view by Friday.

FONAR Corporation (FONR) - Canvas Business Model: Channels

You're looking at how FONAR Corporation moves its value propositions-primarily specialized diagnostic imaging and unique MRI technology-to its customers. The channels are clearly split between direct service delivery via owned centers and direct sales of capital equipment.

Wholly-owned diagnostic imaging centers in New York and Florida

The primary channel for revenue generation is the diagnostic imaging management subsidiary, Health Management Company of America (HMCA). This segment operates the physical centers where patients receive scans, which is the core income engine for FONAR Corporation. As of the end of fiscal year 2025, HMCA managed a network of 44 MRI scanners located across New York and Florida. This represents growth, as the company added two new scanners during fiscal year 2025 to enhance its network. To give you context on the scale, HMCA managed only 9 MRI scanners back in 2009.

The volume through this channel is significant, showing persistent demand for the specialized weight-bearing imaging. In fiscal year 2025, the scan volume at HMCA-managed sites hit a record of 216,317 scans, marking a 3.3% increase over the prior year. Specifically, the New York locations contributed substantially, with their scan volume growing 4.4% to reach 133,663 scans for the full fiscal year 2025. This channel drove the vast majority of the company's top line, with HMCA segment revenues increasing 1% to $95.4 million in fiscal year 2025.

For the most recent snapshot, the first quarter of fiscal 2026 (ended September 30, 2025), the HMCA segment revenue was $23.5 million, a 3% increase over the same quarter last year. That quarter's volume was noted as the second highest quarterly scan volume in HMCA history.

Direct sales force for UPRIGHT® MRI scanner sales to hospitals and centers

The second channel involves the direct sale and servicing of the unique UPRIGHT® MRI scanners to external hospitals and medical centers. This is part of the Medical Equipment and Service segment. While the overall segment revenue was $9.0 million in fiscal year 2025, the actual sales of new product units were soft for the year. Product sales alone saw a significant contraction, decreasing by 23.6% to only $563,000 in fiscal year 2025. This suggests the direct sales force is currently focused more on upgrades and service contracts than on selling new core units, though there are signs of a rebound in the latest quarter.

Looking at the first quarter of fiscal 2026, this equipment channel showed a strong uptick. Revenues from Product Sales, Upgrades, and Service Fees for related and non-related parties increased 14% to $2.5 million compared to the first quarter of fiscal 2025. Product sales specifically jumped from $120,000 in Q1 FY2025 to $316,000 in Q1 FY2026. This indicates the direct sales force is gaining traction with new equipment placements or significant upgrade activity recently.

Here is a quick comparison of the two main revenue-generating channels for FONAR Corporation based on fiscal year 2025 results:

Online presence and direct communication for patient education on UPRIGHT MRI benefits

While not a direct revenue channel, the online presence supports both the service centers and equipment sales by educating patients and potential customers about the unique value proposition of the UPRIGHT® MRI. This communication focuses on differentiating the technology from conventional scanners.

The educational messaging emphasizes patient comfort and superior diagnostics, which directly impacts utilization at the HMCA centers. Key points communicated include:

• The UPRIGHT® MRI detects pathologies missed on conventional supine (lying down) scans.
• The scanner has a near-zero patient claustrophobic rejection rate.
• Approximately 85% of patients are scanned sitting while watching TV.
• The patient experience often includes watching a 42" TV during the procedure.

The company maintains its corporate presence at www.fonar.com and its imaging center operations at www.hmca.com. The focus here is on driving patient volume to the 44 managed centers and convincing external buyers of the technology's clinical superiority.

FONAR Corporation (FONR) - Canvas Business Model: Customer Segments

You're looking at the core groups FONAR Corporation (FONR) serves, primarily through its Health Management Company of America (HMCA) subsidiary. This is where the bulk of the revenue comes from, so understanding these segments is key to valuation.

Patients requiring specialized weight-bearing or dynamic MRI scans are the end-users benefiting from the unique technology. A key operational statistic shows that approximately 85% of these patients are scanned sitting while watching TV, which speaks directly to the patient-friendly nature of the UPRIGHT® Multi-Position™ MRI technology.

The next segments are the direct business partners and referrers. The scale of the diagnostic imaging network is a crucial metric here. As of the fiscal year ended June 30, 2025, HMCA managed a total of 44 MRI scanners across its network in New York and Florida, up from 43 scanners at December 31, 2024. This network generated a record scan volume of 216,317 scans in Fiscal 2025. For the first quarter of Fiscal 2026 (ended September 30, 2025), the scan volume was 55,106, representing a 3.9% increase year-over-year.

Referring physicians, such as those specializing in orthopedics and neurology, rely on the specialized diagnostic capabilities offered in New York and Florida. The success of these referring relationships is tied directly to the operational capacity of the HMCA centers.

Finally, medical practices seeking non-medical management and billing services are the core clients of the HMCA segment. This segment is the company's primary income engine. For the fiscal year ended June 30, 2025, the revenue from the diagnostic imaging management segment (HMCA) was $95.4 million, out of total consolidated net revenues of $104.4 million. This shows that the practices utilizing HMCA for management and billing represent the vast majority of FONAR Corporation's top line.

Here's a quick look at the HMCA operational footprint as of the latest reported periods:

The geographic distribution of these scanners is concentrated in two states, which is a concentration risk you should note. As of the end of Fiscal 2024, the split was 25 in New York and 17 in Florida, totaling 42 scanners, before the two additions in Fiscal 2025.

The customer base can be further broken down by the services they utilize:

• Patients whose conditions require weight-bearing or dynamic imaging.
• Private diagnostic imaging centers and hospital outpatient facilities hosting the scanners.
• Referring physicians in New York and Florida driving patient volume.
• Medical practices that contract with HMCA for management and billing services.

The growth in scanner count, adding two in Fiscal 2025 to reach 44, shows a direct action to serve these segments better in Melville, NY, and Naples, FL. Finance: draft 13-week cash view by Friday.

FONAR Corporation (FONR) - Canvas Business Model: Cost Structure

You're looking at the cost side of the FONAR Corporation (FONR) business, which is heavily weighted toward running its diagnostic imaging centers through the Health Management Company of America (HMCA) subsidiary. Honestly, understanding where the money goes is key to seeing the margin pressure, especially with those big, one-time hits.

The overall cost base for the full fiscal year ended June 30, 2025, saw Total Costs and Expenses rise 7% to $92.8 million, up from $86.3 million in the prior fiscal year. This increase outpaced the 1.4% growth in Total Revenues-Net, which landed at $104.4 million for FY2025.

The largest component of these costs relates directly to the diagnostic imaging services.

Cost of Revenues for Diagnostic Imaging Services

• Cost of revenues for the physician and diagnostic services management segment reached $55.6 million for the year ended June 30, 2025.
• This represented 58.3% of the related revenues for that segment, up from 56.0% in fiscal 2024.
• Facility and personnel costs are the core drivers here, reflecting the ongoing operational expenses for the 44 HMCA-managed MRI scanners across New York and Florida.

Selling, General, and Administrative (SG&A) Expenses

SG&A expenses showed a notable increase for the full fiscal year 2025. You need to factor in that Selling, General and Administrative (SG&A) expenses climbed to $29.7 million for the fiscal year ended June 30, 2025. That's an 11% increase from the $26.9 million reported in Fiscal 2024.

This increase in SG&A is partly explained by specific, non-recurring charges related to risk exposure.

Significant Reserve for Insurance Carrier Risk Exposure

A major factor impacting profitability was the need for the Company to take an additional $2.3 million reserve. This was due to risk exposure related to a New York-based motor vehicle insurer focused on for-hire automotive insurance, like the taxi industry, which was ordered by the New York State Department of Financial Services to increase its reserves due to a reported $650 million shortfall at the end of 2024. This specific charge is a clear near-term risk mapped directly to the cost structure.

Equipment Manufacturing and Service Costs

For the Medical Equipment segment, which includes product sales, upgrades, and service/repair fees, the revenue side gives us a proxy for activity levels. Revenues from this segment were $9.0 million for the fiscal year ended June 30, 2025, an increase from $8.3 million in fiscal 2024. The actual cost of manufacturing and servicing is embedded within the total costs, but the segment's cost of goods sold is not broken out separately from the other operating expenses in the top-line summary.

Here's a quick look at the major cost buckets for the full fiscal year 2025:

The insurance reserve is a key variable here; if you strip that out, the underlying cost structure change looks different. Finance: draft 13-week cash view by Friday.

FONAR Corporation (FONR) - Canvas Business Model: Revenue Streams

You're looking at how FONAR Corporation brings in its money, which is a mix of services and equipment sales, though the service side clearly dominates the top line. Honestly, for a company focused on pioneering MRI technology, the revenue mix shows a heavy reliance on its imaging center management subsidiary, HMCA. That's where the bulk of the cash flow originates.

The primary driver is the diagnostic imaging center segment, managed through Health Management Company of America (HMCA). This segment generated $95.4 million in revenue for the fiscal year ended June 30, 2025. This figure represents the combined income from two key sources within that segment.

Here's a quick look at the revenue segmentation for fiscal 2025:

The $95.4 million from the HMCA segment is not just one thing; it's a composite stream derived from the operations of the 44 MRI scanners HMCA managed across New York and Florida as of June 30, 2025. This revenue is composed of:

• Patient fee revenue net of allowances.
• Management and other fees from related and non-related medical practices.

The second, smaller revenue stream comes from the FONAR equipment segment. This covers the direct sales of FONAR equipment, revenue from system upgrades, and fees collected for service and repairs on those systems. For fiscal 2025, this segment contributed $9.0 million to the total revenue picture. It's important to note that the total consolidated revenue for FONAR Corporation for fiscal 2025 landed at $104.4 million. So, the imaging services make up about 91.4% of the total revenue ($95.4M / $104.4M).

The growth in the service side is supported by operational expansion; HMCA added two MRI scanners during fiscal 2025, increasing the total managed fleet to 44 units. This scale is what helps keep that $95.4 million stream flowing. Finance: draft 13-week cash view by Friday.