UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of
the Securities exchange act of 1934
Date of Report (Date of earliest event reported): March 26, 1997
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Dynatronics Corporation
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(Exact name of registrant as specified in its charter)
Utah
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(State or other jurisdiction of incorporation or organization)
0-12697 87-0398434
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(Commission file number) (I.R.S. Employer Identification No.)
7030 Park Centre Drive
Salt Lake City, Utah 84121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 568-7000
Not Applicable
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On March 26, 1997, Dynatronics Corporation ("Dynatronics" or the
"Company") closed on the sale of approximately two acres of undeveloped
real estate located adjacent to the Company's headquarters building in
Salt Lake City, Utah (the "Utah Property"). A copy of the Company's
press release announcing the transaction and dated March 31, 1997, is
attached to this Report. The purchaser of the Utah Property is
Candlewood Ft. Union, UT, L.L.C., a Delaware limited liability company
that is an affiliate of Candlewood Hotels, Inc., Wichita, Kansas. The
purchase price for the Utah Property is $1,000,000 cash, which sum was
paid in full at closing of the transaction. The purchaser is not
affiliated with the Company or any of its directors or officers or any
associate of any officer or director of the Company.
The transaction was structured as a three-party, like-kind
exchange, allowing the Company to pursue the acquisition of
approximately 3.5 acres of land and two buildings in Chattanooga,
Tennessee (the "Tennessee Property")as part of the same transaction.
Terms of the acquisition of the Tennessee Property are not final and
negotiations are on-going. The purchase price for the Tennessee
Property is expected to be no greater than $575,000. Presently the
Company leases the two buildings totaling approximately 23,000 square
feet located on the Tennessee Property. These buildings house the
Company's medical supplies and soft goods business, acquired one year
ago from Superior Orthopaedics Supplies, Inc. ("Superior"). If the
purchase is consummated, the Company intends to construct additional
facilities on approximately 2 acres of undeveloped land included in the
Tennessee Property. The owner and seller of the Tennessee Property is
H&K Holdings, a Tennessee partnership, controlled by Allen and Tom
Hughes (collectively, "Hughes"). Hughes and their family are the former
owners of Superior and Hughes are the principal managers of the
Company's Tennessee-based operations. Collectively, Hughes own
approximately 53% of H&K Holdings and each of them is the beneficial
owner of approximately 2% of the Company's issued and outstanding common
stock, all of which was acquired in the transaction by which the Company
acquired Superior. While the provisions of a like kind exchange
(Section 1031 of the Internal Revenue Code, as amended) allow for up to
180 days to close the purchase of the Tennessee Property, the Company
expects to close the purchase within 45 days. Funds for the purchase of
the Tennessee Property would come from the sale of the Utah Property, as
described above.
Assuming the transaction, including the acquisition of the
Tennessee Property, can be structured as intended by the Company as
described above, the Company will receive net cash proceeds of
approximately $25,000, after paying $100,000 in taxes on the
transaction, and will be the owner of the Tennessee Property. The
Company will have used approximately $239,000 to reduce its indebtedness
on its Salt Lake County facility and the Company would book
approximately $150,000 in income or approximately $.02 per share in
earnings as a result of the completed transaction.
1.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Dynatronics Corporation
By: /s/ Kelvyn H. Cullimore, Jr.
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Kelvyn H. Cullimore, Jr.
President
(Principal Executive Officer)
Date: April 9, 1997
3
Attachment: Press Release of 3/31/97:
NEWS RELEASE
For Immediate Release
Contact: Bob Cardon, Dynatronics Corporate Secretary
800-874-6251, or 801-568-7000
Dynatronics Reports $1 Million Land Sale to Candlewood Hotels
Salt Lake City, Utah (March 31, 1997) - Dynatronics Corporation
(NASDAQ: DYNT) today announced the sale of over two acres of undeveloped
land adjacent to its Salt Lake County facility to Candlewood Hotels,
Inc. The Wichita, Kansas-based hotelier has targeted the property for
the construction of an extended-stay hotel that will cater to the
business traveler. The property's sale price was $1 million.
Dynatronics plans to use a portion of the sale proceeds to effect
a tax-free exchange for a 22,500 sq. ft. building near Chattanooga,
Tennessee, which Dynatronics currently leases, plus approximately two
acres of adjacent land. Dynatronics anticipates saving over $50,000
annually by eliminating the lease payments, and plans to construct
manufacturing facilities on the adjacent two acres for its expanding
line of medical supplies and soft goods.
"We're very pleased with this transaction with Candlewood Hotels,"
stated Dynatronics' President Kelvyn H. Cullimore Jr., "and we look
forward to having them as neighbors.
"We originally purchased the extra acreage adjacent to our Salt
Lake County facility for future expansion," explained Cullimore. "But
the land has appreciated so much since we bought it that it's now
impractical to use it for manufacturing. Plus, with Dynatronics'
expansion in Tennessee and South Carolina this past year, the land sale
and accompanying tax-free exchange set the stage for our expansion in
Tennessee, where we now have our most pressing demand for space."
Dynatronics anticipates reporting an extra $.02 per-share earnings
as a result of the sale of the property.
Dynatronics is a leading domestic manufacturer and marketer of
advanced technology medical devices, orthopedic soft goods and supplies,
therapy tables, and rehabilitation equipment for the physical medicine
market.
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