Fonar Corp (FONR)

[mstur29]

Diversified Lending Group, Inc. Issues Letter to the Board of Directors of FONAR Corporation
Friday November 14, 2:25 pm ET


SHERMAN OAKS, Calif.--(BUSINESS WIRE)--Diversified Lending Group, Inc. has issued the following letter to the Board of Directors of FONAR Corporation (NASDAQ:FONR - News):
VIA FEDERAL EXPRESS AND FAX

The Board of Directors of FONAR Corporation
110 Marcus Drive
Melville, New York 11747


Ladies and Gentlemen:

We believe that we are the largest shareholder of FONAR. By letter dated October 3, 2008, I submitted a proposal to acquire all of FONAR's capital stock at a significant premium of $5.00 per share and requested the courtesy of a response by October 10. To date, no response has been received. This is inexcusable. Indeed, the premium offered for the Company -- in cash and without any financing or diligence contingency -- is even more generous now based on the Company's closing stock price of $0.67 per share at the November l3 close.

This offer was made to build on Dr. Damadian's genius in the scientific field. Indeed, once we own all of FONAR's capital stock, we intend on infusing the Company with sufficient capital to move forward with developing its innovative MRI technology so it can be made available nationwide and, soon, worldwide.

It concerns me greatly that FONAR would simply ignore, without any inquiry or investigation, our significant offer. I am also deeply troubled by what I have been hearing and learning regarding the Board's lack of attention to the Company's welfare, its domination and control by one member, Dr. Damadian, and its willingness to tolerate not only waste and mismanagement but a series of related-party transactions that benefit insiders at the direct expense of shareholders. In fact, it seems that although Dr. Damadian is a scientific genius, he lacks any semblance of commercial acumen or principle.

I am now reiterating our offer to purchase all of FONAR's currently-existing capital stock at the cash price of $5.00 per share. This proposal would be effected through a reverse subsidiary merger, which our advisors can negotiate. If another structure is preferable to FONAR, please let me know.

We would be happy to work with the existing management team and to take Dr. Damadian's scientific guidance. To the extent that existing management is not interested in working with us after the transaction closes, we have an experienced management team that could operate the company going forward. Given the Company's silence to date and the upcoming shareholder meeting, we are now making this offer public so that the Company's shareholders are aware of it. This offer will remain open until the close of business on November 24,2008. If we do not have an acceptable response from FONAR by such time, we will consider all appropriate alternatives and I reserve all rights.

Sincerely,

Bruce Friedman
President
Diversified Lending Group, Inc.
15260 Ventura Boulevard, Suite 1240
Sherman Oaks, California 91403
Toll Free: 800.914.4441
Tel: [phone]
Fax: [phone]
www.dlglending.com





Contact:
Diversified Lending Group, Inc.
Bruce Friedman, 818-905-3337
President

--------------------------------------------------------------------------------
Source: Diversified Lending Group, Inc.