<PAGE>
Registration No. 33-10183
__________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1 TO
FORM S-4
ON
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FONAR CORPORATION
__________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 3845 11-2464137
-------- ---- ----------
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Class- Identification No.)
incorporation or ification Code
organization) Number)
110 Marcus Drive
Melville, New York 11747
(516) 694-2929
__________________________________________________________________
(Address, including zip code, and telephone
number of registrant's principal executive offices)
Raymond V. Damadian, M.D.
FONAR CORPORATION
110 Marcus Drive
Melville, New York 11747
(516) 694-2929
__________________________________________________________________
Name, address, including zip code, and telephone
number, including area code, of agent for service)
Please send copies of all communications to:
Henry T. Meyer, Esq.
FONAR Corporation
110 Marcus Drive
Melville, New York 11747
(516) 694-2929
_________________________
<PAGE>
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this
Registration Statement
If the only securities being registered on this Form
are being offered pursuant to dividend or interest reinvestment
plans, please check the following box: [ ]
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which
specifically states that this registration statement shall
thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall
become effective on such date as the Commission acting pursuant to
said Section 8(a), may determine.
<PAGE>
FONAR CORPORATION
Cross Reference Sheet
Registration Statement Location or
Item and Heading Prospectus Heading
---------------- ------------------
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus ........... Facing Page of
Registration Statement;
Cross Reference Sheet
Outside Front Cover
Page
2. Inside Front and Outside
Back Cover Pages of
Prospectus ........................ Inside Front Cover Page
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges and other Information ..... SUMMARY INFORMATION; RISK
FACTORS
4. Use of Proceeds *
5. Determination of Offering Price .... DETERMINATION OF
OFFERING PRICE
6. Dilution ........................... DILUTION
7. Selling Security Holders ........... SELLING STOCKHOLDER
8. Plan of Distribution ............... PLAN OF DISTRIBUTION
9. Description of Securities to
be Registered ......................DESCRIPTION OF SECURITIES
TO BE REGISTERED
10. Interests of Named Experts and
Counsel ........................... VALIDITY OF ISSUANCE;
EXPERTS
11. Material Changes *
12. Incorporation of Certain Information
by Reference ..................... INCORPORATION BY
REFERENCE
13. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities ....................... INDEMNIFICATION
____________________________
* Not applicable
<PAGE>
PROSPECTUS
- ----------
117,000 Shares
FONAR CORPORATION
Common Stock
One Hundred Seventeen Thousand (117,000) shares of
Common Stock of Fonar Corporation (the "Company") are being
offered by one of the Company's stockholders, FINOVA Technology
Finance, Inc. ("FINOVA" or the "Selling Stockholder"). The
Company will not receive any proceeds from the sale of the shares
by the Selling Stockholder.
The Selling Stockholder intends to sell the shares
from time to time at market prices through a broker-dealer of its
own selection. The price of the shares will vary and will depend
on the market price of the Company's Common Stock at the time or
times such shares are sold.
FOR A DISCUSSION OF CERTAIN RISK FACTORS WHICH
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The Company expects to pay expenses of this offering
of approximately $5,000.00.
On January 17, 1997, the closing price for the
Common Stock of the Company (Symbol: FONR) was $2.16 per share,
as reported by NASDAQ.
The date of this Prospectus is January 21, 1997.
No person has been authorized by the Company to give
any information or to make any representations other than those
contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having
been authorized by the Company. This Prospectus does not
constitute an offer or solicitation to any person in any
jurisdiction where such offer or solicitation would be unlawful.
Neither delivery of this Prospectus nor any sale hereunder shall,
under any circumstances, create an implication that there has been
no change in the affairs of the Company since the date hereof.
AVAILABLE INFORMATION
FONAR Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange
Act") and in accordance therewith files reports, proxy statements
and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other
information filed by FONAR Corporation can be inspected and copies
obtained at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and
the Regional Offices of the Commission at 7 World Trade Center,
New York, New York 10048 and at the Northwestern Atrium Center,
500 West Madison Street, Chicago, Illinois 60661-2511. Copies of
such material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549
at prescribed rates.
FONAR Corporation has filed with the Commission in
Washington, D.C. a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, with respect to the securities
to which this Prospectus relates. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain
all the information set forth in the Registration Statement,
including the exhibits thereto. For further information with
respect to the Company and the securities offered hereby,
reference is made to the Registration Statement and the exhibits
thereto. Copies of the Registration Statement may be obtained
from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. Statements contained in this
Prospectus concerning the provisions of documents included as
exhibits to the Registration Statement are necessarily summaries
of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed
with the Commission.
Where any document or part thereof is incorporated
by reference in this Prospectus, the Company will provide without
charge to each person to whom this Prospectus is delivered, upon
the written or oral request of such person, a copy of any and all
of the information that has been incorporated by reference in this
Prospectus (not including exhibits unless the exhibits are
specifically incorporated by reference). Requests for copies
should be directed to the Company at 110 Marcus Drive, Melville,
New York 11747, Attention Stockholder Relations Department. The
telephone number is (516) 694-2929.
<PAGE>
TABLE OF CONTENTS
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . .
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . .
DETERMINATION OF OFFERING PRICE . . . . . . . . . . . . . .
TERMS OF THE ACQUISITION . . . . . . . . . . . . . . . . .
DESCRIPTION OF FONAR'S SECURITIES . . . . . . . . . . . . .
SELLING STOCKHOLDER . . . . . . . . . . . . . . . . . . . .
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . .
VALIDITY OF ISSUANCE . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . .
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . .
INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . .
<PAGE>
SUMMARY INFORMATION
FONAR Corporation (the "Company" or "FONAR")
designs, manufactures and markets magnetic resonance imaging
("MRI") scanners which utilize non-superconductive magnet
technology for the detection and diagnosis of human disease. The
Company's address is 110 Marcus Drive, Melville, New York 11747
and its telephone number at that location is (516) 694-2929
The One Hundred Seventeen Thousand (117,000) shares
of Common Stock of FONAR Corporation covered by this Prospectus
were issued to FINOVA Technology Finance, Inc. ("FINOVA" or the
"Selling Stockholder") in exchange for all of the issued and
outstanding shares of stock of Melville Holding Co., Inc. The
number of shares issued to FINOVA is subject to adjustment in the
event that the market price of the Company's Common Stock does not
reach $3.00 per share for a total of ten trading days during the
period from the closing of the transaction to May 15, 1997. See
"TERMS OF THE ACQUISITION."
Melville Holding Co., Inc. ("Melville Holding"), was
formed as a wholly-owned subsidiary of FINOVA and was acquired by
FONAR as of the Effective Date of the Registration Statement of
which this Prospectus is a part. Melville Holding owns three used
MRI scanners manufactured by FONAR and is essentially inactive.
Prior to the closing of this transaction, Melville Holding's
address was 10 Waterside Drive, Farmington, Connecticut 06032-3065
and its telephone number there was (860) 676-1818. Subsequent to
the closing, its address and telephone number have been the same
as FONAR's.
NASDAQ Symbol . . . . . . . FONR
Risk Factors . . . . . . . Certain risk factors concerning the
Company should be considered carefully
before deciding whether to purchase
the shares offered. See "RISK
FACTORS."
This summary is qualified in its entirety by the
more detailed information appearing elsewhere in this Prospectus.
<PAGE>
RISK FACTORS
Investment in the Company is highly speculative and
subject to numerous and substantial risks. Therefore, prospective
purchasers should carefully consider the risks associated with the
business of the Company and the purchase of the Shares, including
the risk factors discussed below.
1. Financial Risks; Qualified Accountants' Reports.
------------------------------------------------
For the fiscal years ended June 30, 1996 and June 30, 1995, the
Company experienced net losses of $3.38 million and $1.76 million
respectively. The Company's working capital deficiency at June
30, 1996 was approximately $2.4 million, as compared to a working
capital deficiency of approximately $5.0 million as at June 30,
1995. The independent auditor's reports of Tabb, Conigliaro &
McGann, P.C., independent certified public accountants, issued
with the Company's certified financial statements for fiscal 1996
and 1995, are qualified subject to the Company meeting its
business objectives. For the three months ended September 30,
1996, the Company experienced a net loss of $2.0 million and as at
September 30, 1996 had a working capital deficiency of $2.4
million. The Company is optimistic that it will be able to return
to profitability and achieve its objectives with the introduction
into the marketplace of its new Quad 7000 and Quad 12000 MRI
scanners, continuation of its cost containment programs,
restructuring and liquidation of its interest bearing debt and
sales of upgrades and service to its existing customer base. In
addition, the Company was awarded a judgment of $61,950,000 plus
interest against General Electric Company for patent infringement,
which is presently under appeal. Nevertheless the risk that the
Company will not be able to resolve its financial problems is one
investors in the Common Stock will face. The Company's financial
statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be
necessary should the Company be unable to continue operations.
2. Reliance on New Products.
-------------------------
The Company's principal products are its new "Quad" series of
MRI scanners, which recently have been approved for sale by the
United States Food and Drug Administration (the "FDA"). The Quad
7000 MRI scanner received FDA approval in April, 1995, and the
Quad 12000 received FDA approval in November, 1995. The Quad
scanners are unique in that four sides are open, thus allowing
access to the scanning area from four vantage points. With the
Quad 12000, the Company has introduced the first open high field
MRI scanner in the industry. Although the Company believes its
new produces are responsive to the demands of the market place,
there can be no assurance as to the future market acceptance of
the Quad scanners.
3. Dependence Upon Services of Dr. Damadian.
-----------------------------------------
The Company's success is greatly dependent upon the continued
participation of Dr. Raymond V. Damadian, its founder, Chairman of
the Board and President. Loss of the services of Dr. Damadian
would have a material adverse effect upon the development of the
Company's business. The Company does not currently carry "key
man" life insurance on Dr. Damadian.
4. Competition and Obsolescence.
-----------------------------
The medical equipment industry is highly competitive and
characterized by rapidly changing technology and extensive
research. Numerous companies, many of which have substantially
greater financial resources than those available to the Company,
engage in the marketing of magnetic resonance imaging scanners
which compete with the Company's scanners. Competitors include
large, multinational companies or their affiliates such as General
Electric Company, Siemens A.G., Picker International, Elscint
Ltd., Philips N.V., Toshiba Corporation, Hitachi Corporation and
Shimadzu Corporation. In addition, there can be no assurance that
the Company's products will not be rendered obsolete by future
products employing technologies superior to those utilized by the
Company.
5. Dilution.
---------
The purchasers of the shares of Common Stock being offered
hereby will sustain an immediate and substantial dilution in that
the net tangible book value of the shares will be significantly
lower than the offering price, based on the current market price
($2.16 as of January 17, 1997) of the Common Stock (see
"Dilution"). In the event that all of the shares offered hereby
are sold, the pro-forma net tangible book value of the Common
Stock (retroactively adjusted to September 30, 1996), would be
approximately $0.80 per share, or approximately $1.36 less than
the offering price (market price as of January 17, 1997) of $2.16
per share. The actual dilution experienced by purchasers of the
shares will depend on the actual sales prices and the Company's
net tangible assets at the time of the sale.
6. Control of the Company.
-----------------------
The Company's Certificate of Incorporation does not provide
for cumulative voting in the election of directors. The present
stockholders of the Company will continue to be in control of the
Company and be in a position to elect all of the directors of the
Company.
<PAGE>
DILUTION
The net tangible book value of the Company's Common
Stock at September 30, 1996 was $0.8005 per share. "Net tangible
book value per share" represents the amount of the Company's
tangible assets less the amount of its liabilities, divided by the
number of shares outstanding. Assuming that all of the 117,000
shares of Common Stock offered hereby are sold, the pro-forma net
tangible book value will be increased to $0.8033 per share. For
the purposes hereof, the pro-forma net tangible book value of the
Company's Common Stock immediately after the completion of this
offering has been retroactively adjusted to September 30, 1996 and
further adjusted to give effect to the purchase of Melville
Holding from FINOVA by the Company and the expenses expected to be
incurred in connection with this offering.
Purchasers of the Common Stock in this offering will
experience an immediate dilution of approximately $1.36 per share,
assuming a sales price equal to the closing price of the Common
Stock on January 17, 1997 ($2.16 per share). "Dilution per share"
represents the difference between the price per share of Common
Stock paid by the purchasers less the pro-forma net tangible book
value per share of the Common Stock immediately after the
completion of the offering. No increase in the net tangible book
value of the Company's Common Stock would be attributable to the
cash payments made by purchasers of the Common Stock in this
offering, but an increase in the pro-forma net tangible book value
of approximately $0.0028 per share will result from the
acquisition by the Company of Melville Holding (utilizing the
closing price on January 17, 1997 to value the shares issued to
the Selling Stockholder).
The following table illustrates the above described
per share dilution:
Public Net Tangible Net Tangible Dilution Gain For
Offering Book Value Book Value For New Existing
Price Before Offering After Offering Investors Shareholders
- ------------------------------------------------------------------
$2.16 $0.8005 $0.8033 $1.3595 $0.0028
- ------------------------------------------------------------------
The shares of Common Stock offered hereby will be
sold from time to time at market prices. For the purpose of
illustration, the closing price for the Company's Common Stock on
January 17, 1997, as reported on the NASDAQ System, is being
utilized. The actual dilution experienced by purchasers of the
Common Stock offered hereby will vary depending on the actual
sales prices and the Company's net tangible assets at the time of
the sale.
DETERMINATION OF OFFERING PRICE
FINOVA, the Selling Stockholder, will offer up to
117,000 shares of Common Stock from time to time at market prices,
and as such, the prices will fluctuate.
TERMS OF THE ACQUISITION
Pursuant to a Purchase Agreement between the Company
and FINOVA, the Company is acquiring all of the issued and
outstanding shares of Melville Holding Co., Inc. ("Melville
Holding") in exchange for the 117,000 shares of the Common Stock
of FONAR Corporation covered by this Prospectus. The number of
shares to be issued to FINOVA, however, is subject to adjustment,
as discussed below.
Melville Holding was formed by FINOVA as a wholly
owned subsidiary on March 28, 1996 for the purpose of holding,
operating and otherwise utilizing three FONAR MRI scanning
systems. FINOVA had reacquired the scanning systems from certain
of its borrowers and equipment lessees. FINOVA is engaged
principally in the business of financing and sought to divest
itself of the MRI scanning systems. FONAR sought to acquire the
MRI scanning systems through the acquisition of Melville Holding,
with the objective of selling or leasing the scanning systems.
For accounting purposes, the transaction will be
treated under the purchase method.
Melville Holding will not be a significant
subsidiary of the Company.
The Purchase Agreement provided for the stock being
exchanged to be held in escrow pending the closing. A condition
to FINOVA's obligation to close was the registration of the
117,000 shares of FONAR Common Stock under the Securities Act of
1933, as amended.
The number of shares of FONAR's Common Stock issued
in consideration for the stock of Melville Holding will be subject
to adjustment in the event that the market price (bid price where
a bid and ask price are quoted) of FONAR's Common Stock does not
reach a closing price (bid closing price where bid and asked
prices are quoted) of $3.00 per share or more for at least ten
(10) trading days during the period from the closing to May 15,
1997 (the "Waiting Period"). In such case, the Company will issue
additional shares of Common Stock to FINOVA (the "Additional FONAR
Shares") to provide FINOVA price protection with respect to any of
the 117,000 shares of Common Stock issued under the Purchase
Agreement which are still owned by FINOVA on the last day of the
Waiting Period (the "Retained FONAR Shares"). The Company will
issue such number of Additional FONAR shares as is necessary for
the aggregate market value of the Additional FONAR Shares and the
Retained FONAR Shares to be equal to $3.00 multiplied by the
number of Retained FONAR Shares. The Company has the option of
paying cash in lieu of issuing additional shares.
Neither proxies, consents or any other
authorizations from stockholders are being solicited in connection
with this transaction. Following the consummation of the
acquisition, the assets of Melville Holding will represent less
than 1% of the combined assets of the two companies.
No changes in FONAR's management will be required or
are contemplated as a result of the acquisition of Melville
Holding.
DESCRIPTION OF FONAR'S SECURITIES
The following table shows the shares of FONAR's
securities authorized and outstanding as of September 30, 1996:
CLASS AUTHORIZED ISSUED AND OUTSTANDING
- ----------------- ---------- ----------------------
Common Stock,
par value $.0001
per share 60,000,000 44,089,251
Class B Common Stock,
par value $.0001
per share 4,000,000 5,411
Class C Common Stock,
par value $.0001
per share 10,000,000 9,562,824
Class A Non-voting
Preferred Stock, par
value $.0001 per share 8,000,000 7,855,627
Preferred Stock, par
value $.001 per share 10,000,000 0
Voting Rights
The Class C Common Stock has 25 votes per share, the
Class B Common Stock has 10 votes per share and the Common Stock
has one vote per share in the election of directors and on all
other matters upon which stockholders are entitled to vote. All
three classes will vote together except where otherwise required
by law. The Class A Non-voting Preferred Stock does not have
voting rights except as required under the Delaware General
Corporation Law.
Cash Dividends
With respect to any discretionary cash dividends which
may be declared by the Board of Directors on the Company's stock,
a share of the Common Stock is entitled to a cash dividend 20%
higher than the cash dividend on a share of the Class B Common
Stock, as and when any cash dividends may be declared. A share of
the Class C Common Stock is entitled to one-third (1/3) of the
dividend declared on a share of the Class B Common Stock. The
Class A Non-voting Preferred is entitled to the same discretionary
cash dividends as the Common Stock.
Special Dividend on Common Stock
The Common Stock, but not the Class B Common Stock, the
Class C Common Stock, or the Class A Non-voting Preferred Stock,
is entitled to a dividend equal to 3% of the amount of any cash
awards (in the form of damages, royalties or otherwise) rendered
in connection with enforcement by the Company of United States
Patent No. 3,789,832. This patent, which was issued to the Presi
dent of the Company, Dr. Raymond V. Damadian, in 1974 and sub
sequently exclusively licensed by him to the Company, expired in
February 1992. Damages for infringements occurring before its
expiration, however, are still recoverable.
Special Dividends on Class A Non-voting Preferred Stock
The Class A Non-voting Preferred Stock is entitled to a
dividend equal, in the aggregate, to three percent (3%) of any
award or settlement received by the Company in connection with the
enforcement of five of its patents in its patent lawsuit,
FONAR Corporation and Dr. Raymond V. Damadian v. Hitachi et al.,
- ---------------------------------------------------------------
less the special dividend payable on the Common Stock with respect
to U.S. Patent No. 3,789,832. (See "LITIGATION".) The five
patents are as follows: Apparatus and Method for Detecting Cancer
in Tissue, 2/5/74 U.S. Patent No. 3,789,832; Apparatus Including
Permanent Magnet Configuration, 6/23/87, U.S. Patent No.
4,675,609; Apparatus and Method for Multiple Angle Oblique MRI,
10/3/89, U.S. Patent No. 4,871,966; Solenoidal Surface Coils for
Magnetic Resonance Imaging, 12/12/89, U.S. Patent No. 4,887,038;
and Eddy Current Control in Magnetic Resonance Imaging, 10/29/91,
U.S. Patent No. 5061897.
The Board of Directors has reserved the right (but would
not be obligated) to expand the dividend to which the Class A
Non-voting Preferred Stock is entitled, to cover additional
patents, additional lawsuits, or both and to increase the per
centage of any awards or settlements received in any lawsuits
which would be payable as a dividend.
In addition, the Board of Directors is authorized, in its
discretion, to declare cash dividends from time to time solely on
the Class A Non-voting Preferred Stock or to fix such further
dividend rights for the Class A Non-voting Preferred Stock as it
may determine, in its sole discretion.
Other Dividends and Distributions
With respect to dividends and distributions other than
cash dividends and all other rights (other than voting rights),
shares of the Common Stock, the Class B Common Stock and Class A
Non-voting Preferred Stock rank equally and have the same rights,
including rights in liquidation. A share of the Class C Common
Stock has one-third (1/3) of such rights.
Conversion
Shares of Class B Common Stock are convertible into
Common Stock on a share for share basis. Shares of Class C Common
Stock are convertible into Common Stock on a three for one basis.
Shares of Class A Non-voting Preferred Stock and shares of Common
Stock are not convertible.
Preemptive Rights and Cumulative Voting
Under the Company's Certificate of Incorporation, stock
holders have no preemptive rights to subscribe for new shares on a
proportionate basis. The Company's Certificate of Incorporation
does not provide for cumulative voting.
Preferred Stock
No shares of the Company's $.001 par value Preferred
Stock have been issued or are presently planned to be issued.
Shares of the $.001 par value Preferred Stock would have such
voting powers and other designations, preferences, rights and
qualifications as the Board of Directors would establish.
Transfer Agent and Registrar
American Securities Transfer & Trust, Inc., 938
Quail Street, Suite 101, Lakewood, Colorado 80215 is the transfer
agent and registrar for the Company's Common Stock, Class B Common
Stock, Class C Common Stock and Class A Non-voting Preferred
Stock.
SELLING STOCKHOLDER
FINOVA Technology Finance, Inc., formerly named
Financing for Science International, Inc. ("FINOVA" or the
"Selling Stockholder") may resell the 117,000 shares of FONAR
Common Stock received by it for Melville Holding for its own
account at any time from and after the date of this Prospectus.
The Company will not receive any proceeds from the sale of said
shares by FINOVA. The shares may be sold by FINOVA at market
prices at such time or times as may be determined by FINOVA
through such broker-dealers as may be selected by FINOVA. The
percentage of the outstanding Common Stock of the Company owned by
FINOVA immediately before and after the sale of the shares
(assuming the sale of all the shares) is in both cases less than
one (1%) percent.
Melville Holding is leasing one of its three FONAR
MRI scanning systems to West Palm Beach MRI, P.A., a Florida
professional association which is owned by Dr. Raymond V.
Damadian, the President and principal stockholder of FONAR. The
original parties to lease, dated March 1, 1993, were FINOVA and
West Palm Beach MRI, P.A. FINOVA assigned the lease to Melville
Holding at the time the subject MRI scanning system was
transferred to Melville Holding.
Previously, prior to 1990, FINOVA had provided FONAR
with financing on one of FONAR's MRI scanning systems. On several
occasions, independently of FONAR, FINOVA provided financing to
several of FONAR's customers for the purchase of FONAR MRI
scanning systems.
PLAN OF DISTRIBUTION
FINOVA may sell the 117,000 shares of the Company's
Common Stock covered by this Prospectus at market prices at such
time or times as may be determined by FINOVA through such
broker-dealer or broker-dealers as may be selected by FINOVA. The
Company has been informed by FINOVA that no agreement, arrangement
or understanding has been entered into between FINOVA and any
broker or dealer. The Company will not receive any proceeds from
any sales of the Common Stock by FINOVA.
VALIDITY OF ISSUANCE
The validity of the shares being offered hereby will
be passed upon by Henry T. Meyer, Esq., 110 Marcus Drive,
Melville, New York 11747. Mr. Meyer is the Company's General
Counsel.
EXPERTS
The financial statements and supplemental schedules
contained in the Company's latest annual report on Form 10-K ,
incorporated by reference into this Prospectus, has been examined
by Tabb Conigliaro & McGann, to the extent set forth in their
report. Such financial statements and schedules were included
therein in reliance upon their reports, given on their authority
as experts in accounting and auditing.
INDEMNIFICATION
The Delaware General Corporation Law and the
Company's by-laws provide for the indemnification of an officer or
director under certain circumstances against reasonable expenses
incurred in connection with the defense of any action brought
against him by reason of his being a director or officer. Insofar
as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act") may be permitted to directors,
officers or persons controlling the Company pursuant to the
foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
INCORPORATION BY REFERENCE
The following documents are incorporated by
reference into this Prospectus:
1. The Company's latest annual report on Form 10-K,
for the fiscal year ended June 30, 1996.
2. The Company's latest quarterly report on Form
10-Q, for the fiscal quarter ended September 30, 1996.
3. The description of the Company's Common Stock
contained in its registration statement on Form 8-a under Section
12 of the Securities Exchange Act of 1934, as amended.
4. All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the termination of this
offering.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
-------------------------------------------
The following statement sets forth all expenses in
connection with the issuance and distribution of the securities
being registered, other than broker/dealer commissions.
SEC registration filing fee $94.01
NASD filing fee $1,170.00
Blue Sky fees and expenses $1,500.00*
Printing and Engraving $1,500.00*
Miscellaneous $735.99*
TOTAL $5,000.00
* Estimated
Item 14. Indemnification of Directors and Officers
-----------------------------------------
Article Eighth of the Certificate of Incorporation,
as amended, of FONAR Corporation provides as follows:
The personal liability of directors to the
Corporation or its stockholders for monetary damages for breach of
their fiduciary duties as directors is eliminated, provided
however, that this provision shall not eliminate the liability of
a director (i) for any breach of the director's duty of loyalty to
the Corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or
knowing violation of the law, (iii) under Section 174 of the
Delaware General Corporation Law, or (iv) for any transaction from
which the director derived an improper personal benefit.
Article V of the By-Laws of FONAR Corporation
generally provides for indemnification of its officers and
directors to the full extent permitted by Delaware Corporation
Law.
Section 145 of the Delaware General Corporation Law
permits indemnification of officers, directors and employees of
the Company under certain conditions and subject to certain
limitations.
Item 15. Recent Sales of Unregistered Securities
---------------------------------------
None.
Item 16. Exhibits and Financial Statement Schedules
------------------------------------------
Exhibits
- --------
4.1 Specimen Common Stock Certificate incorporated herein by
reference to Exhibit 4.1 to the Registrant's registration
statement on Form S-1, Commission File No. 33-13365.
4.2 Article Fourth of the Certificate of Incorporation, as
amended, of the Company incorporated by reference to Exhibit 4.1
to the Registrant's registration statement on Form S-8, Commission
File No. 33-62099.
5. Opinion of Counsel re: Legality. See Exhibits.
23.1 Consent of Tabb, Conigliaro & McGann, P.C., Certified
Public Accountants. See Exhibits.
23.2 (Consent of Counsel is included in Exhibit 5).
Financial Statement Schedules
- -----------------------------
None.
Item 17. Undertakings
------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) That for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
the purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly
authorized.
FONAR CORPORATION
Dated: January 21, 1997
By: /s/ Raymond V. Damadian
-----------------------
Raymond V. Damadian,
President
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
/s/ Raymond V. Damadian Chairman of the January 21, 1997
- -----------------------
Raymond V. Damadian Board of Directors,
President and a
Director (Principal
Executive Officer)
/s/ Claudette J.V. Chan Director January 21, 1997
- -----------------------
Claudette J.V. Chan
/s/ Robert J. Janoff Director January 21, 1997
- --------------------
Robert J. Janoff
/s/ Herbert Maisel Director January 21, 1997
- ------------------
Herbert Maisel
EXHIBIT NO. 5
OPINION OF COUNSEL RE LEGALITY
January 21, 1997
Fonar Corporation
110 Marcus Drive
Melville, NY 11747
Dear Sirs:
I refer to the Amendment on Form S-3 to the Registration
Statement to which this opinion is an Exhibit being filed by Fonar
Corporation, a Delaware corporation (the "Company"), with the
Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to 117,000 shares (the "Shares") of the
Company's Common Stock to be issued to FINOVA Technology Finance,
Inc. ("FINOVA") pursuant to a Purchase Agreement dated May 15,
1996 between the Company and FINOVA (the "Purchase Agreement").
As counsel for the Company, I have examined the originals
or photostatic or certified copies of such records, certificates
and instruments of the Company, certificates of officers of the
Company and of public officials and such other instruments and
documents as I have deemed relevant and necessary for the purposes
of rendering the opinions set forth below. In such examination, I
have assumed the genuineness of all signatures, the authenticity
of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as certified
or photostatic copies and the authenticity of the originals of
such copies and the correctness of all statements of fact
contained therein.
Based upon the foregoing, I am of the opinion that the
Shares have been duly and validly authorized, and when issued and
delivered to FINOVA in accordance with the terms of the Purchase
Agreement, will be legally issued, fully paid and non-assessable.
I consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to me in Item 5 of
the Registration Statement.
Very truly yours,
/s/ Henry T. Meyer, Esq.
------------------------
Henry T. Meyer, Esq.
General Counsel
EXHIBIT NO. 23.1
CONSENT OF TABB, CONIGLIARO & MCGANN, P.C.,
CERTIFIED PUBLIC ACCOUNTANTS
Consent of Certified Public Accountants
---------------------------------------
We consent to the use in this registration statement on Form S-3
of our reports dated October 7, 1996 on the Consolidated Financial
Statements of Fonar Corporation and Subsidiaries for the fiscal
year ended June 30, 1996 and the Supplemental Schedules included
in FONAR Corporation's Form 10-K for the fiscal year ended June
30, 1996, which reports are incorporated in this registration
statement by reference.
The Consolidated Financial Statements consist of the Consolidated
Balance Sheets as at June 30, 1996 and June 30, 1995 and the
related Consolidated Statements of Operations, Stockholders'
Equity and Cash Flows for the years ended June 30, 1996, 1995 and
1994 with related notes.
The Supplemental Schedules consist of Schedule II - Accounts
Receivable From Related Parties and Underwriters and Schedule VIII
- - Valuation and Qualifying Accounts.
/s/ Tabb, Conigliaro & McGann, P.C.
-----------------------------------
Tabb, Conigliaro & McGann, P.C.
New York, New York
January 21, 1997
EXHIBIT 23.2
(CONSENT OF COUNSEL IS INCLUDED IN EXHIBIT 5)
CONSENT OF COUNSEL
The consent of Henry T. Meyer, Esq. is included in his
opinion filed as Exhibit 5 to this Registration Statement.
