Fonar Corporation (Fonar) operates in two business segments: medical equipment segment, and physician management and diagnostic services segment. Fonar is engaged in the business of designing, manufacturing, selling and servicing magnetic resonance imaging (MRI) scanners, which utilize MRI technology for the detection and diagnosis of human disease. The product Fonar is promoting is its Upright MRI. Health Management Corporation (HMCA) was established as a wholly owned subsidiary to enable the Company to expand into the business of providing management services to medical providers. HMCA provides management services, administrative services, office space, equipment, repair, maintenance service and clerical and other non-medical personnel to medical providers. Since July 28, 2005, following the sale of HMCA's physical therapy and rehabilitation business, HMCA has elected to provide its services solely to diagnostic imaging centers.