top of page

FONAR Sells Machine to CEO Who May Never Actually Pay For It

Medical device firm silent on whether revenue was booked on transaction with CEO on last day of quarter.

February 19, 2024

On the final day of 2023— a Sunday— FONAR Corporation (FONR), a maker of magnetic resonance imaging (MRI) scanners, sold a machine to Magnetic Resonance Management, LLC (MRM) which is owned by FONAR’s CEO Timothy Damadian.

Instead of receiving cash, FONAR generously extended its CEO credit for the $577,000 machine, accepting a promissory note that isn’t payable in full for five years.

Notably, Damadian may never have to actually pay for the MRI scanner as FOMAR disclosed in its latest quarterly report:

“The Company has the option but not the obligation to re-take possession of the scanner in lieu of payment upon maturity of the note.”

FONAR did not immediately respond when DuDil asked whether the purchase was immediately recognized as revenue or ratably over the duration of the promissory note which isn’t due until December 2028.

If the sale was recognized as revenue in FONAR’s FY24 Q2, it accounted for:

—2.27% of Sales
—11.81% of Operating Income
—12.48% of Net Income

It’s not the first time a Damadian-owned company has transacted with FONAR.

Previously, Damadian left FONAR to start his own diagnostic imaging management company, sold it to a subsidiary of FONAR, and later returned to become FONAR’s Chief Executive.

Become a DuDil Insider

Get our due diligence alerts before they're released publicly & be first to know.

bottom of page