Current Report Filing (8-k)
June 26 2019 - 5:02PM
Edgar (US Regulatory)
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): June 21,
2019
Dynatronics Corporation
(Exact name of registrant as specified in its charter)
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Utah
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0-12697
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87-0398434
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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7030 Park Centre Dr., Cottonwood Heights, Utah
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84121
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(801) 568-7000
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(Address of principal executive offices)
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(Zip Code)
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(Registrant’s telephone number, including area
code)
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Not
Applicable
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(Former name or former address, if changed since last
report.)
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Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written communications pursuant to Rule 425 under
the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under
the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading
Symbol
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Name
of each exchange on which registered
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Common Stock, no par value per share
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DYNT
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The NASDAQ Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
☐
Emerging
growth company
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the
Exchange Act.
☐
Item 1.01
Entry into a
Material Definitive Agreement
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On
June 21, 2019, Dynatronics Corporation and its subsidiaries
(“Dynatronics” or the “Company”) entered
into a fifth modification agreement (the
“Modification”) to its existing Loan and Security
Agreement (as amended, the “Credit Agreement”) with
Bank of the West. The Modification was executed on June 21, 2019,
effective as of May 31, 2019. The Company also modified its
Commercial Card Agreement with Bank of the West.
The Modification includes, among other things, an
amendment to certain provisions of the Credit Agreement, including
the definitions of “Adjusted EBITDA,” “Borrowing
Base,” “Liabilities,” and “Permitted
Acquisition.” The Modification changes the financial
covenants of the Credit Agreement, eliminating the consolidated
leverage ratio and amending the
minimum consolidated
fixed charge coverage ratio. As modified, at any time that the
excess availability amount under the Credit Agreement is less than
the greater of $1,000,000 or 10% of the borrowing base for five
consecutive business days, the Credit Agreement does not permit the
consolidated fixed charge coverage ratio for the twelve month
period then ended to be less than 1.10 to 1.00, until the excess
availability amount is at least the greater of $1,000,000 or 10% of
the borrowing base for thirty consecutive days, after which the
ratio will cease to apply until triggered again as indicated above.
The Modification also adjusts upward the permissible limits of
senior funded indebtedness and capital expenditures. Capital
expenditures are now capped at $1,000,000 annually, an increase
from the prior limit of $450,000. Senior indebtedness, in addition
to certain existing indebtedness, is limited to an aggregate of
$750,000 from the date of the agreement. The Modification adds a
restricted payments covenant, restricting the Company from making
any dividend or other distribution to its shareholders, except for
dividend payments with respect to the outstanding Dynatronics
Series A 8% Convertible Preferred Stock and Series B Convertible
Preferred Stock and to certain repurchases in connection with the
exercise of stock options and restricted stock awards. In
conjunction with the modification of the Commercial Card Agreement,
the bank also increased the Company’s credit card limit from
$800,000 to $1,500,000, providing additional working capital
flexibility.
The
foregoing is not a complete description of the Amendment and is
qualified in its entirety by reference to the full text of the
Amendment, a copy of which is filed as Exhibit 10.1 hereto and is
incorporated by reference herein. In addition, the information set
forth in this Item 1.01, including the Modification, should be read
together with the information included in the Company’s other
filings with the SEC, including the Company’s Annual Report
on Form 10-K for the fiscal year ended June 30, 2018.
Item 9.01
Financial Statements and
Exhibits.
(d)
Exhibits
Exhibit
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Description
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Fifth Modification Agreement, dated June 21, 2019.
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Signature
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 hereunto duly authorized.
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Dynatronics Corporation
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Date:
June
26, 2019
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By:
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/s/
David
Wirthlin
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David
Wirthlin
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Chief
Financial Officer
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