Under the terms of the Merger Agreement, FONAR stockholders received $19.00 in cash per share of common stock and Class B common stock, $6.34 per share of Class C common stock, and $10.50 per share of Class A non-voting preferred stock. According to the Company's press release, the $19.00 common stock price represented a 31.5% premium to the closing share price on the last trading day before the transaction's announcement, a 21.9% premium to the closing price on July 8, 2025 (the last trading day before the Acquisition Group's initial non-binding proposal was announced), and a 39.7% premium to the average closing price over the 90 trading days ended June 30, 2025. A stockholder class action complaint attached as an exhibit to the definitive proxy statement alleged the all-cash merger valued FONAR at approximately $123.5 million; this figure originates from plaintiffs' pleading rather than from a valuation disclosed by the Company or its financial advisor.
The Special Committee's independent financial advisor, Marshall & Stevens Transaction Advisory Services LLC, rendered a fairness opinion dated December 23, 2025 concluding that the per-share merger consideration was fair, from a financial point of view, to FONAR's unaffiliated public stockholders. Marshall & Stevens' discounted cash flow analysis, using a weighted average cost of capital of 14.5% (cost of equity of approximately 16.2%, after-tax cost of debt of approximately 4.6%) applied to 10-year management projections, produced an indicated fair market value of FONAR's common equity on a controlling basis of approximately $97.6 million to $104.0 million, implying a per-share value of approximately $14.48 to $15.52 for the common stock, Class B common stock and Class C common stock (on an as-converted basis) -- below the $19.00 per share ultimately paid.
According to the DEFM14A's "Background of the Merger" section, Damadian and Chief Operating Officer Luciano Bonanni began considering a going-private transaction as early as December 2021, motivated by the view that the costs of being a Nasdaq-listed public company, including compliance, audit and legal expenses, had become a significant drag on net profits. The Acquisition Group's first non-binding proposal, delivered around July 7, 2025, offered $17.25 per share of common stock (about a 27% premium to the 90-trading-day average price through June 30, 2025); the Special Committee, advised by Marshall & Stevens and its legal counsel Meister Seelig & Fein PLLC, initially countered that this price was inadequate and proposed $22.50 per share. The Acquisition Group subsequently raised its offer to $18.00 per share and then to a final $19.00 per share before the Special Committee agreed to support the deal on December 11, 2025, conditioned on receipt of the Marshall & Stevens fairness opinion. During the negotiation period, an unidentified institutional stockholder referred to in the proxy as "Stockholder 4" sent letters in October and November 2025 expressing non-binding interest in acquiring FONAR for $24.00 per share, calling the Acquisition Group's then-current offer price "inadequate" relative to the Company's reported tangible book value; the Special Committee requested supporting information and documentation from Stockholder 4, which the proxy states was not provided, and no competing transaction materialized.
The merger was financed through a combination of new debt, new equity and rollover of existing FONAR securities by Acquisition Group members. Per the announcement 8-K, Parent obtained a committed debt financing facility of $35,000,000 from OceanFirst Bank, N.A., debt subscription commitments of not less than $10,000,000 from other financing sources, and equity subscription commitments (comprising cash and rollover securities) of not less than $45,000,000; the Transaction was not contingent on obtaining this financing. At the closing on June 3, 2026, Parent and the Company (as successor to Merger Sub) entered into a new Credit Agreement with OceanFirst Bank providing a $20 million term loan facility and a $15 million revolving credit facility, secured by substantially all assets of the borrowers and guarantors.
Approval required (i) the affirmative vote of a majority of FONAR's capital stock outstanding and entitled to vote, (ii) the affirmative vote of a majority of votes cast by disinterested stockholders, and, out of caution, (iii) satisfaction of the 66 2/3% supermajority threshold under Section 203 of the Delaware General Corporation Law, even though the Company maintained the transaction was not subject to that statute. At a special meeting held May 28, 2026 (record date April 13, 2026, with 15,737,293 total votes and 9,114,425 votes held by non-affiliated holders outstanding and entitled to vote), the Merger Proposal was approved: the Company Stockholder Approval passed 13,124,769 for to 551,079 against; the Disinterested Stockholder Approval passed 3,279,090 for to 551,079 against; and the Section 203 vote passed 6,502,501 for to 551,079 against, as disclosed in a Form 8-K filed May 29, 2026. Upon the Merger Agreement's termination under specified circumstances, FONAR would have owed Parent a termination fee of $450,000, which also covers Parent's documented out-of-pocket deal expenses. Following the closing, FONAR's common stock was suspended from Nasdaq trading, the Company filed to deregister its common stock under the Exchange Act, and four non-employee directors (Ronald G. Lehman II, Richard E. Turk, Jessica Maher and Robert M. Carrino) resigned from the board effective at the effective time of the merger.
Legal advisors in the transaction were DLA Piper LLP (US), which represented the Company; Meister Seelig & Fein PLLC, which represented the Special Committee; and Moritt Hock & Hamroff LLP, which represented the Acquisition Group/Buyer entities. Marshall & Stevens Transaction Advisory Services LLC served as financial advisor and independent valuation consultant to the Special Committee; no financial advisor to the Acquisition Group/Buyer side was identified in the filings reviewed.