Law Firm Investigates FONAR Deal

The take-private offer for FONAR Corp. is being led by its own CEO, Timothy Damadian, in conjunction with other members of management, board members, and third-party investors. The group is offering to purchase all outstanding common stock at $19.00 per share, valuing the company at approximately $98.62 million. This $19.00 per share price represents a 31.5% premium over the closing price the day before the deal was announced. However, the offer followed an earlier, lower, non-binding proposal of $17.25 per share from the same CEO-led group, which was first presented in July 2025. A special committee composed of independent and disinterested directors was formed to review the proposal and unanimously recommended the $19.00 per share deal. The full board, with the members involved in the buyout recusing themselves, also approved the agreement. The investigation by Ademi LLP centers on whether this price is truly fair to public shareholders. For context, FONAR's net book value per common share was reported to be $25.69 as of December 31, 2025, a figure notably higher than the buyout offer. Financially, FONAR has shown mixed results. For the fiscal year ending June 30, 2025, the company reported a 1% increase in total revenues to $104.4 million, but a 24% decrease in net income to $10.7 million. More recently, for the quarter ending December 31, 2025, net income saw a 15% increase to $2.5 million on revenues of $25.5 million. The transaction is not subject to any financing conditions, with the buyer group securing $35 million in debt from OceanFirst Bank, alongside other debt and equity contributions. The deal requires approval from a majority of all voting shares and, crucially, a majority of the votes cast by disinterested shareholders. If completed, FONAR's stock will be delisted from the Nasdaq Stock Market.