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 Companys 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 Companys 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 partys 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 Companys Registration Statement on Form S-3 (File No. 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 Form 8-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.