DYNATRONICS CORPORATION (NASDAQ:DYNT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
The information set forth below in Item 3.02 of this
Current Report on Form 8-K is incorporated herein by reference in
its entirety.
Current Report on Form 8-K is incorporated herein by reference in
its entirety.
Item 3.02 Unregistered Sales of Equity Securities.
Effective December 28, 2016, Dynatronics Corporation, a Utah
corporation (“Company”) entered into and closed a Securities
Purchase Agreement (the “Purchase Agreement”) with a select
group of accredited investors, including lead investor
Prettybrook Partners LLC and its affiliates as well as existing
and new investors (the “Investors”). At the closing, the
Company issued to the Investors a total of 390,000 shares of the
Company’s Series A 8% Convertible Preferred Stock (“Series A
Preferred”) at a per share price of $2.50 per share and warrants
for the purchase of a total of 585,000 shares of the Company’s
common stock (“Common Stock”) at a purchase price of $2.75 per
share, as follows: (i) A-Warrants, exercisable by cash exercise
only, to purchase a total of 292,500 shares of Common Stock (the
“A-Warrants”) and (ii) B-Warrants, exercisable by “cashless
exercise”, to purchase a total of 292,500 shares of Common Stock
(the “B-Warrants,” together with the “A-Warrants,” the
“Warrants”). The rights, preferences and limitations of the
Series A Preferred are more particularly described in an
amendment to the Company’s Articles of Incorporation Designating
the Preferences, Rights and Limitations of the Series A 8%
Convertible Preferred Stock filed with the State of Utah in June
2015.
corporation (“Company”) entered into and closed a Securities
Purchase Agreement (the “Purchase Agreement”) with a select
group of accredited investors, including lead investor
Prettybrook Partners LLC and its affiliates as well as existing
and new investors (the “Investors”). At the closing, the
Company issued to the Investors a total of 390,000 shares of the
Company’s Series A 8% Convertible Preferred Stock (“Series A
Preferred”) at a per share price of $2.50 per share and warrants
for the purchase of a total of 585,000 shares of the Company’s
common stock (“Common Stock”) at a purchase price of $2.75 per
share, as follows: (i) A-Warrants, exercisable by cash exercise
only, to purchase a total of 292,500 shares of Common Stock (the
“A-Warrants”) and (ii) B-Warrants, exercisable by “cashless
exercise”, to purchase a total of 292,500 shares of Common Stock
(the “B-Warrants,” together with the “A-Warrants,” the
“Warrants”). The rights, preferences and limitations of the
Series A Preferred are more particularly described in an
amendment to the Company’s Articles of Incorporation Designating
the Preferences, Rights and Limitations of the Series A 8%
Convertible Preferred Stock filed with the State of Utah in June
2015.
The Company also granted the Investors registration rights on the
same terms as rights granted previously to purchasers of shares
of the Series A Preferred in June 2015 (the “Registration Rights
Agreement”). Those rights require the Company to register the
resale of the shares of the Common Stock underlying the Series A
Preferred and the Warrants.
same terms as rights granted previously to purchasers of shares
of the Series A Preferred in June 2015 (the “Registration Rights
Agreement”). Those rights require the Company to register the
resale of the shares of the Common Stock underlying the Series A
Preferred and the Warrants.
The shares of Series A Preferred and the Warrants were offered
and issued in reliance upon the exemption from the registration
requirements of the Securities Act of 1933, as amended (the
“Securities Act”), set forth under Section 4(a)(2) of the
Securities Act relating to sales by an issuer not involving any
public offering and in reliance on similar exemptions under
applicable state laws. Each Investor represented that it is an
accredited investor and that it is acquiring the securities for
investment purposes only and not with a view to any resale,
distribution or other disposition of such securities in violation
of the United States federal securities laws. Neither this
Current Report on Form 8-K, nor the exhibits attached hereto is
an offer to sell or the solicitation of an offer to buy the
securities described herein.
and issued in reliance upon the exemption from the registration
requirements of the Securities Act of 1933, as amended (the
“Securities Act”), set forth under Section 4(a)(2) of the
Securities Act relating to sales by an issuer not involving any
public offering and in reliance on similar exemptions under
applicable state laws. Each Investor represented that it is an
accredited investor and that it is acquiring the securities for
investment purposes only and not with a view to any resale,
distribution or other disposition of such securities in violation
of the United States federal securities laws. Neither this
Current Report on Form 8-K, nor the exhibits attached hereto is
an offer to sell or the solicitation of an offer to buy the
securities described herein.
The Series A Preferred entitles the holder to vote on an
as-converted basis, one vote for each share of Common Stock
issuable upon conversion of the Series A Preferred. Each share of
Series A Preferred is convertible (subject to the Conversion Cap,
described below) into one share of Common Stock and will accrue
an annual dividend at a rate of 8.0% (“Series A Dividends”).
Prior to receipt of Shareholder Approval, as described below, the
Series A Preferred issued to the Investors shall not be
convertible into more than 19.99% of the number of shares of
Common Stock outstanding as of the closing date (the “Conversion
Cap”). The Series A Dividends may be paid at the discretion of
the Company in cash or in shares of the Company’s Common Stock,
subject to Shareholder Approval. The Warrants have an exercise
price of $2.75 and a term of six years. The Warrants do not
become exercisable until receipt of Shareholder Approval. The
B-Warrants may not be exercised until all A-Warrants have been
exercised.
as-converted basis, one vote for each share of Common Stock
issuable upon conversion of the Series A Preferred. Each share of
Series A Preferred is convertible (subject to the Conversion Cap,
described below) into one share of Common Stock and will accrue
an annual dividend at a rate of 8.0% (“Series A Dividends”).
Prior to receipt of Shareholder Approval, as described below, the
Series A Preferred issued to the Investors shall not be
convertible into more than 19.99% of the number of shares of
Common Stock outstanding as of the closing date (the “Conversion
Cap”). The Series A Dividends may be paid at the discretion of
the Company in cash or in shares of the Company’s Common Stock,
subject to Shareholder Approval. The Warrants have an exercise
price of $2.75 and a term of six years. The Warrants do not
become exercisable until receipt of Shareholder Approval. The
B-Warrants may not be exercised until all A-Warrants have been
exercised.
to the Warrants, upon the election by any particular Warrant
holder, the Company will not effect any exercise of the Warrants,
and such holder will not have the right to exercise any portion
of the Warrants, to the extent that, after giving effect to the
conversion, such holder (together with such holder’s affiliates,
and any persons acting as a group together with such holder or
any of such holder’s affiliates) would beneficially own in
excess of 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the exercise.
holder, the Company will not effect any exercise of the Warrants,
and such holder will not have the right to exercise any portion
of the Warrants, to the extent that, after giving effect to the
conversion, such holder (together with such holder’s affiliates,
and any persons acting as a group together with such holder or
any of such holder’s affiliates) would beneficially own in
excess of 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the exercise.
Shareholder Approval is required by the Nasdaq Marketplace Rules
in order for the Company to retain its listing on The Nasdaq
Stock Market because the number of shares of Common Stock that
could be issued in connection with the transactions described
above would represent more than 20% of the voting power of the
Company’s outstanding Common Stock prior to the transaction and
in the case of a redemption of Series A Preferred or the payment
of Series A Dividends to insiders of the Company using Common
Stock in lieu of cash if the Common Stock is issued at less than
market value.
in order for the Company to retain its listing on The Nasdaq
Stock Market because the number of shares of Common Stock that
could be issued in connection with the transactions described
above would represent more than 20% of the voting power of the
Company’s outstanding Common Stock prior to the transaction and
in the case of a redemption of Series A Preferred or the payment
of Series A Dividends to insiders of the Company using Common
Stock in lieu of cash if the Common Stock is issued at less than
market value.
Proceeds to the Company from this offering were $975,000. There
were no placement agents, brokers or other agents used by the
Company in connection with the offering and no compensation,
fees, or discounts were paid or given to any person in
connection with the offer and sale of the securities.
were no placement agents, brokers or other agents used by the
Company in connection with the offering and no compensation,
fees, or discounts were paid or given to any person in
connection with the offer and sale of the securities.
The Purchase Agreement, Registration Rights Agreement and the
Form of the Warrants have been filed and are incorporated as
exhibits to this Form 8-K by reference.
Form of the Warrants have been filed and are incorporated as
exhibits to this Form 8-K by reference.
On December 30, 2016, the Company issued a press release
announcing the closing of the offering, a copy of which is
filed as an exhibit hereto.
announcing the closing of the offering, a copy of which is
filed as an exhibit hereto.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit Number
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Description
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4.1
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Specimen Series A 8% Convertible Preferred Stock
Certificate (incorporated by reference to Exhibit 4-2 to Registration Statement filed July 29, 2015) |
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4.2
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Specimen A-Warrant (incorporated by reference to Exhibit
4.1 of Current Report on Form 8-K filed July 1, 2015) |
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4.3
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Specimen B-Warrant (incorporated by reference to Exhibit
4.2 of Current Report on Form 8-K filed July 1, 2015) |
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10.1
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Securities Purchase Agreement dated effective December
28, 2016 |
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10.2
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Registration Rights Agreement dated effective June 30,
2015 (incorporated by reference to appendix of Company’s Definitive Proxy Statement filed May 18, 2015) |
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99.1
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Press release of the Company dated December 30, 2016.
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