SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
                                  June 7, 2005

VIA EDGAR &
UNITED PARCEL DELIVERY

Ms. Angela Crane
Reviewing Accountant
Mail Stop 0306
Securities and Exchange Commission
Washington, D.C.  20549

Re:      Fonar Corporation
         Form 10-K for the fiscal year ended
         June 30, 2004
         Form 10-Q for the quarter ended
         December 31, 2004
         File No. 0-10248

Dear Ms. Crane:

     I am writing in response to the Commission's comment letter dated March 31,
2005 addressed to the attention of Dr.  Raymond V. Damadian,  President of Fonar
Corporation.  As requested,  the responses contained in our letter are presented
in the same order as in the  Commission's  letter.  Amendments to the applicable
Exchange Act reports are being filed concurrently herewith.

Form 10-K for Fiscal Year Ended June 30, 2004

Management's Discussion and Analysis

Comment No. 1. The costs of closing  underperforming  facilities  in fiscal 2004
incurred by our  subsidiary,  Health  Management  Corporation  of America,  also
referred  to as HMCA,  was  $37,370.  The costs  consisted  of the  removal  and
transportation of the magnetic  resonance  imaging,  or MRI,  equipment from the
site in the  amount of  $15,500,  repairs  and  reconstruction  to the  premises
following  removal in the amount of $4,400  and  additional  rent for the period
during  which we were  removing  the  equipment  of  $17,470.  These  costs were
accounted for in our consolidated financial statements under costs of revenues.

     We will revise future  filings to quantify  known or expected  savings that
have  resulted  from  the  closing  of  these  facilities  as  requested  by the
Commission in Comment No. 1.

Liquidity and Capital Resources

Comment No. 2. As  requested  by the  Commission,  we have  expanded in our most
recent filing, and will do so in all future filings, our discussions to describe
the reasons for the increases and decreases in the various components of working
capital impacting cash flow from operations.

Comment No. 3. As requested by the  Commission,  we have revised our most recent
filing, and will do so in all future filings, for the disclosure of liquidity to
describe more fully our overall financial  structure with a particular  emphasis
on agreements between Fonar and related parties. Transactions,  arrangements and
relationships with unconsolidated  entities that are reasonably likely to affect
liquidity will be fully disclosed.

     Please note,  however,  we do not see any part of our financial  structure,
inclusive of our  agreements  with related  entities,  that is not already fully
disclosed.  With respect to our management agreements with related entities, the
fees HMCA  charges are  renegotiated  on an annual  basis.  The  management  fee
receivables  have  remained  fairly  consistent  over the last few years and for
sales of products to related parties,  we receive  progress  payments during the
construction  period and are paid in full prior to the delivery and installation
of the product.

Comment No. 4. As requested by the Commission,  we will revise future filings to
discuss the financial  terms of the  management  contracts and provide  detailed
disclosure of the financial terms of any individually material agreements.

Consolidated Statement of Cash Flows

Comment No. 5. As requested by the  Commission,  we have revised our most recent
filing, and will do so in future filings,  to separately present cash flows from
purchases,  sales and  maturities of  available-for-sale  securities as separate
line items in the  consolidated  statement  of cash flows,  as  contemplated  in
Paragraph 18 of SFAS 115.

Note. 2. Summary of Significant Accounting Policies

Revenue Recognition

Comment No. 6. As noted by the  Commission,  the management  agreements  between
HMCA and each of the MRI  facilities  are for one  year  terms  and the fees are
reviewed on an annual basis and adjusted by mutual  agreement.  HMCA reviews the
fees and  negotiates a  modification  of the fee based upon the change in direct
operating  expenses incurred by HMCA for each individual  management  agreement.
HMCA is not obligated to make up any losses of the MRI facilities.

Comment No. 7. We recognize  revenue for equipment and services to related party
entities the same way we recognize  revenue for unrelated  parties.  On sales of
equipment we recognize  revenues on a percentage  of completion  basis.  Payment
terms require a down payment upon signing,  a second payment 60 days afterwards,
a payment  prior to the  delivery of the magnet  subsystem of the MRI, a payment
prior to the  delivery of the  electronics  system and a final  payment upon the
acceptance  by and  delivery of the MRI system to the  customer.  On our service
agreements,  which are mostly for one-year  periods,  we recognize  revenue on a
monthly basis as services are  provided.  Payment by the customer is required in
advance,  however,  usually on a quarterly  basis.  Sales to related parties are
made on terms  which  are  within  the  same  parameters  as sales to  unrelated
parties.  We have recognized gross profit on sales to related parties which have
been at similar margins to those of unrelated parties.  Due to our net losses in
the last three years,  we did not  recognize  any net profit on sales to related
parties in each of the last three years. We believe these accounting  procedures
comply with GAAP.

Comment  No.  8. We do not  sell  new  products  on terms  for  which  financial
reimbursement  is not guaranteed as payment in full is required  before delivery
and  installation  of the  product.  There  are no third  party  reimbursements,
estimates or adjustments in connection  with new product sales.  Please note our
response  to Comment No. 7 where we discuss  revenue  recognition  and  customer
payment terms.

Note 3 Management Agreements

Comment No. 9. The Company  evaluates the  recoverability  of its intangibles in
accordance  with the Statement of Financial  Accounting  Standards  ("SFAS") No.
144,  "Accounting for Impairment or Disposal of Long-Lived  Assets". At June 30,
2004, the Company  determined there were no triggering events indicating that an
impairment had occurred.  The associated facilities have consistently  generated
operating profits since the Company consummated the acquisitions  (during fiscal
1997  and  1998)  and  allocated  amounts  to  the  management  agreements.  The
facilities  generated operating profits of approximately  $4,000,000 for each of
the years ended June 30, 2004 and 2003, respectively.

The Company  continues to amortize the  management  agreements  over the 20 year
term of the  agreements  as there are no changes to the terms of the  agreements
and no indicators of impairment as discussed above.

Note 11. Capital Stock

Comment  No.  10. We  account  for common  stock  utilized  to pay for goods and
services to  non-employees  based on the fair market value of the stock  issued,
for which stock  certificates  are issued after the goods have been delivered to
us or the services  performed.  As requested by the  Commission,  we will revise
future  filings to provide more  detailed  disclosures  required by SFAS 123 and
EITF 96-18.

Note 16. Commitments and Contingencies

Comment No. 11. As requested by the  Commission we will revise future filings to
disclose any material  commitments and guarantees of the management companies to
the medical  practices  and any  material  amounts  that may be paid under those
arrangements.  Please note,  however,  that we do not  guarantee  any  financial
obligations of the medical practices.

Note 21. Quarterly Financial Data

Comment No. 12. The  $344,000 in selling,  general and  administrative  expenses
consisted  of  royalties  on scanner  sales which had not been  accrued in prior
quarters  under a patent  license  which  we pay on an  annual  basis.  This was
corrected and the royalties are now being accrued as the liabilities arise. This
item was  disclosed  in Item 9A of our Form  10-K.  The  $215,000  consisted  of
various smaller items which also are now being accrued as the liabilities arise.
These amounts were deemed to be immaterial to the previously  reported  quarters
in fiscal 2004.

     During the second quarter of fiscal 2003, we closed one of our  facilities.
At that time,  we did not record any  impairment  loss due to our belief that we
would be successful in transferring the business to our nearby facility.  During
the fourth quarter of fiscal 2003, we determined  that we were  unsuccessful  in
retaining the revenue from our closed facility, and accordingly,  we recorded an
impairment  loss during the fourth  quarter  ended June 30, 2003. We believe the
impairment loss was recorded in the proper period.

Item 9A. Controls and Procedures

Comment No. 13. We believe that our  disclosure  controls and procedures are now
effective because we have taken the necessary steps to correct the issues raised
in Comment No. 12.

     We will amend Item 9A of our Form 10-K to address the Commission's comments
contained  in  Comment  13. We expect to file the  document  with the  following
language:

ITEM 9A. CONTROLS AND PROCEDURES

     As of the end of the period  covered by this annual report on Form 10-K, we
carried out an evaluation of the design and operation of our disclosure controls
and procedures. Based upon that evaluation and the weakness described below, our
principal  executive and acting principal financial officer concluded that as of
the end of the period  covered by the annual report on Form 10-K our  disclosure
controls and procedures were not effective.

     In performing their audit of our consolidated  financial statements for the
year ended June 30, 2004, our  independent  registered  public  accounting  firm
noted that certain  royalties  under a patent license and certain other expenses
had not been accrued during the first three quarters. This was corrected through
appropriate   adjustments   and  our  internal   procedures  and  controls  were
subsequently  modified to assure that such  accruals  will be made on an ongoing
basis.

     Except  as  described  above,  there  were no  significant  changes  in our
internal  controls over financial  reporting that occurred during the year ended
June 30,  2004  that  have  materially  affected,  or are  reasonably  likely to
materially affect, our internal control over financial reporting.

Comment No. 14. There were no such  changes.  We will amend Items 9A to our Form
10-K to reflect this,  consistent  with the language used in amended Item 308(c)
of Regulation S-K. We expect to file the document with the language  included in
the Comment 13 response above.

Form 10-Q for the Quarterly Period ended December 31, 2004

Item 4. Controls and Procedures

Comment  No.  15. We will  amend  Part I, Item 4 of our Form 10-Q for the period
ended December 31, 2004 in accordance with Comment No. 15. We expect to file the
document with the following language:

Item 4. Controls and Procedures

(a)  Evaluation of disclosure controls and procedures.

     The  Company  maintains  controls  and  procedures  designed to ensure that
information  required to be  disclosed  in the reports  that it files or submits
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported  within  the time  periods  specified  in the  rules  and  forms of the
Securities  and  Exchange  Commission.  Based  upon  their  evaluation  of those
controls and  procedures  performed as of the end of the period  covered by this
report,  the principal  executive and acting principal  financial officer of the
Company  concluded that disclosure  controls and procedures were effective as of
the end of the period covered by the report.

(b)  Change in internal controls.

     The Company  made no  significant  changes in its  internal  controls or in
other factors that could  significantly  affect these controls subsequent to the
date of the evaluation of those  controls by the principal  executive and acting
principal financial officer.

Comment  No.  16. We will  amend  Part I, Item 4 of our Form 10-Q for the period
ended December 31, 2004 in accordance with Comment No. 16. We expect to file the
document with the language included in the Comment 15 response above.

     Please  feel  free to call me at (631)  694-2929  in  connection  with your
comments and our responses.

                                                               Very truly yours,

                                                               /s/Henry T. Meyer
                                                                  Henry T. Meyer
                                                                 General Counsel

HTM/jr
M-11515Dear

</TEXT>
</DOCUMENT>