Item 1.01 Entry into a Material Definitive Agreement.
On March 12, 2020, Dynatronics Corporation (the “Company”) entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Canaccord Genuity LLC and Roth Capital Partners, LLC as the Company’s sales agents (the “Agents”), pursuant to which the Company may, from time to time, sell shares of its common stock, no par value per share, having an aggregate offering price of up to $10,000,000 (the “Shares”) through the Agents. The Company intends to use the net proceeds, if any, from the offering for general corporate purposes, including working capital, payments on our line of credit, general and administrative expenses, manufacturing expenses and potential acquisitions of companies and technologies that complement our business.
The Equity Distribution Agreement contains customary representations, warranties and covenants of the parties, including obligations of the Company to indemnify the Agents for certain liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Subject to the terms and conditions of the Equity Distribution Agreement, the Agents will use their commercially reasonable efforts to sell the Shares from time to time, based upon the Company’s instructions. The Company will pay the Agents a fixed commission at the rate of 3.0% of the gross proceeds from the Shares sold. In addition, the Company has agreed to pay certain expenses incurred by the Agents in connection with the offering. The Company and the Agents each have the right, by giving written notice as specified in the Equity Distribution Agreement, to terminate the Equity Distribution Agreement and cease the offering of Shares in each party’s sole discretion at any time.
Sales of the Shares may be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act, including sales made directly on or through The Nasdaq Capital Market or any other existing public trading market for the Shares, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or any other method permitted by law.
The Shares have been registered under the Securities Act pursuant to the Company’s Registration Statement on FormS-3 (FileNo. 333-224930), declared effective by the Securities and Exchange Commission on May 23, 2018, containing a prospectus, which consists of a base prospectus, dated May 23, 2018, and a prospectus supplement, dated March 12, 2020.
The foregoing description of the Equity Distribution Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Equity Distribution Agreement, which is attached hereto as Exhibit 1.1 and is incorporated by reference herein.
This Current Report on Form8-K does not constitute an offer to sell or a solicitation of an offer to buy the Shares, nor shall there be any sale of the Shares in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state or jurisdiction.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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