Back pain is the second most common neurological ailment in the United States - only headache is more common. Lower back pain is the most prevalent cause of disability in people under age 45. Of the $27 billion spent on all musculo-skeletal trauma, $16 billion is spent on the management of lower back pain, more than half of that $16 billion being spent on surgical treatment.

Patients with musculo-skeletal diagnoses are usually categorized as acute or chronic and have received their injury through an accident at work or in the community at large (slip and fall or automobile accident). A small portion of the population has chronic pain based on a congenital diagnosis. In either situation, the patients are treated similarly. The services they routinely require are the evaluation (Physician), diagnostic (MRI), therapeutic (Surgery, Physical Therapy, Occupational Therapy, or Chiropractic) and, if necessary, pain management.

Patients suffering with any of these symptoms enter the treatment system through referral from medical doctors, Chiropractors and attorneys.

The Fonar Upright MRI system uses a custom-built adjustable bed that allows patients to be scanned while sitting, lying on their back, side or stomach or at any other angle. Dynamic full ranges of motion studies of the joints in virtually any direction are now possible. These capabilities are creating sweeping changes in both the traditional healthcare markets and medical-legal professions.

In the medical-legal profession, the technology is now being used by both plaintiff and defense sides of medical cases (such as worker's compensation and personal injury attorneys) because of the technology's unique ability to prove or disprove a patient's pain sensation in a certain position or series of positions and/or while in motion. Led by Mr. Mansker and Mr. Solodko, this strategy is being promoted by the Company and marketed to both sides of a medical legal case. The company expects strong revenue growth as both plaintiff and defense advocates take advantage of the technology to better advance their case.

Traditional Healthcare Insurers (Traditional Insurers) are also recognizing the utility and usefulness of the Upright MRI Technology for their subscribers, including those who are obese or claustrophobic and greatly prefer the comfort and openness of the Upright MRI. The Company recognizes the added stability and predictable payment schedule of the Traditional Insurer and has contracts in place with several providers and is in negotiations with several others. Patient traffic from the Traditional Insurers is already increasing at the San Bernardino and La Quinta locations.

Many injuries are not perceptible or sensed except when the body moves a certain way or is placed in certain positions. These positions are often weight-bearing and pain awakening which distinguishes the Upright MRI from the traditional non-weight-bearing, possibly desensitizing tube MRIs. Positioning the patient in the weight-bearing, pain awakening position has the desired effect of allowing the patient to be scanned in the position where the pain is reproduced, with the increased chance of the pathology becoming more apparent and distinguishable on the scanned image.

The produced images are clear, interpretable and permit radiologists to diagnose the patient often after viewing multiple series of scans performed from a series of positions only available with the Upright MRI technology. The recumbent, flexion and extension positioning and series of scans oftentimes offers differentials in the images of such proportion that the injury is readily identified by the radiologist by comparing, in the case of a lumbar injury, the size of the pathology across images.

The Upright MRI is overwhelmingly preferred by the average consumer in part because it is open which distinguishes it from the claustrophobia and uneasiness experienced in the cramped horizontal MRI units. Traditional MRIs also create problems for people that are heavy or obese as well for those that are frightened by the enclosed space and attendant noise of the MRI unit. Significantly, the Company has only needed to sedate one (1) patient in its history.

The openness of an Upright MRI eliminates the discomfort found in traditional, cramped, tube type MRIs. The true weight-bearing position is in stark contrast to the axial loading techniques used in the tube MRIs wherein the weight-bearing position is simulated by a crushing and condensing of the body at great discomfort to the patient.

ASC differentiates itself due to its state-of-the-art Upright MRI equipment and quality patient service. The Company focuses on building relationships with physicians, chiropractors, and attorneys. The Company prides itself on providing punctual, reliable and efficient service with professionally trained personnel.