Item 1.01Item 1.01 - Entry into Material Agreement
Item 1.01 Entry into a Material Definitive
Agreement.
Merger Agreement
On October 26, 2026, RadNet,
Inc., a Delaware corporation (the “Company,” “RadNet,” “we,”
and “us”), and Radnet Management, Inc., a California corporation and direct wholly owned subsidiary of the Company
(“Purchaser”), entered into an Agreement and Plan of Merger (the “Merger Agreement”)
with OnRad, Inc., a Delaware corporation (“OnRad”), Red Rover Merger Sub, LLC, a Delaware limited liability
company and direct wholly owned subsidiary of Purchaser (the “Surviving Merger Sub”), Javelin Merger Sub, Inc.,
a Delaware corporation and direct wholly owned subsidiary of the Surviving Merger Sub (the “First Merger Sub,”
and together with Surviving Merger Sub, the “Merger Subs”), and, solely for purposes of the specified provisions
therein, Housatonic IV CF, L.P., a Delaware limited partnership, solely in its capacity as the securityholder representative (“Securityholder
Representative”).
Pursuant to the Merger Agreement,
and subject to the terms and conditions set forth therein, (a) First Merger Sub will merge with and into OnRad, with OnRad surviving the
First Merger as a direct wholly owned subsidiary of Surviving Merger Sub (the “First Merger”), and (b) immediately
thereafter, OnRad will merge with and into Surviving Merger Sub, with Surviving Merger Sub surviving the Second Merger as a direct wholly
owned subsidiary of Purchaser (the “Second Merger,” and, together with the First Merger, the “Mergers”).
At the closing of the Mergers
(the “Closing”), the holders (the “OnRad Holders”) of OnRad’s common stock,
par value $0.0001 per share (the “OnRad Common Stock”) (including any then outstanding shares of OnRad Common
Stock into which the holders of OnRad’s outstanding preferred stock and warrants have converted in accordance with the Merger Agreement,
but in all cases excluding Dissenting Shares (as defined in the Merger Agreement)) and the holders of Vested Company Options (as defined
in the Merger Agreement) will receive an aggregate of (i) $350,000,000 in cash, subject to customary adjustments for cash, indebtedness,
net working capital and transaction expenses and subject to certain escrow holdbacks, and (ii) 5,000,000 shares (the “Closing
Shares”) of common stock of the Company, par value $0.0001 per share (the “RadNet Common Stock”).
In addition, the OnRad Holders
may also be entitled to an earn-out payment of up to $210,000,000 (the “Earn-Out Amount”) if OnRad achieves
a certain target Post-Closing Annual Adjusted EBITDA (as defined in the Merger Agreement) for the fiscal year ending December 31, 2027.
The Earn-Out Amount may be paid in cash, shares of RadNet Common Stock (the “Earn-Out Shares”) or a combination
thereof subject to certain tax-related requirements.
2
Pursuant to the Merger Agreement,
the Company has agreed to file prospectus supplements to its automatic shelf registration statement on Form S-3 (Registration No. 333-291945)
(the “Registration Statement”) to register the resale of the Closing Shares and, if any, the Earn-Out Shares,
within three (3) business days following the Closing and the Earn-Out Amount Determination Date (as defined in the Merger Agreement),
respectively.
The Mergers are expected
to close in early 2027, subject to customary closing conditions, including, but not limited to, (i) the making or receipt of certain state
healthcare regulatory filings and approvals; (ii) the absence of any law or order prohibiting the Mergers; (iii) the delivery of the written
consent of OnRad’s stockholders approving the Merger Agreement and the transactions contemplated thereunder (the “Required
Stockholder Approval”); (iv) David M. Engert, who is currently serving as OnRad’s President and Chief Executive Officer,
remaining employed by OnRad through the Closing and not having revoked, rescinded or repudiated that certain Employment Agreement entered
into between OnRad and Mr. Engert on October 26, 2026, which will become effective at, and is contingent upon, the Closing; (v) the conveyance
of all ownership interests in each of OnRad’s contracted professional entities to a physician designated by Purchaser; and (vi)
the effectiveness of the Registration Statement. The Merger Agreement may be terminated under certain circumstances, including by either
party if the Mergers have not been consummated by February 23, 2027 (which date automatically extends to June 1, 2027 if the only unsatisfied
closing condition is the receipt of the required governmental and regulatory filings and approvals), and by Purchaser if the Required
Stockholder Approval is not timely delivered. The parties previously filed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the waiting period has expired.
The parties to the Merger
Agreement have made customary representations and warranties in the Merger Agreement. The Merger Agreement also contains certain other
customary covenants and agreements.
The foregoing description
of the Merger Agreement is not complete and is qualified in its entirety by reference to the Merger Agreement, which is attached as