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): April 30, 2020
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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 Number)
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1200 Trapp Rd, Eagan, Minnesota
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55121
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(Address
of principal executive offices)
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(Zip
Code)
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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 14(d)-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(s)
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Name of each exchange on which registered
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Common
stock, no par value
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DYNT
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The
NASDAQ Capital Market
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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
On April 29, 2020, Dynatronics
Corporation (the “Company”) entered into a promissory
note (the “Note”)
with Bank of the West, N.A. to evidence a loan to the Company in
the amount of $3,477,412 under the Paycheck Protection Program (the
“PPP”)
established under the Coronavirus Aid, Relief, and Economic
Security Act (the “CARES
Act”),
administered by the U.S. Small Business Administration
(“SBA”).
In accordance with the requirements of the CARES Act, the Company
expects to use the proceeds from the loan exclusively for qualified
expenses under the PPP, including payroll costs, mortgage interest,
rent and utility costs, as further detailed in the CARES Act and
applicable guidance issued by the SBA. Interest will accrue on the
outstanding balance of the Note at a rate of 1.00% per annum.
However, the Company expects to apply for forgiveness of up to all
amounts due under the Note, in an amount equal to the sum of
qualified expenses under the PPP incurred during the eight weeks
following initial disbursement. Notwithstanding the Company’s
eligibility to apply for forgiveness, no assurance can be given
that the Company will obtain forgiveness of all or any portion of
amounts due under the Note.
Subject to any forgiveness granted under the PPP, the Note is
scheduled to mature two years from the date of initial disbursement
under the Note and requires 18 equal monthly payments of principal
and interest beginning six months from the date of initial
disbursement. The Note may be prepaid at any time prior to maturity
with no prepayment penalties. The Note provides for customary
events of default, including, among others, those relating to
failure to make payments, bankruptcy, breaches of representations,
significant changes in ownership, and material adverse effects. The
occurrence of an event of default may result in the repayment of
all amounts outstanding, collection of all amounts owing from the
Company, and/or filing suit and obtaining judgment against the
Company. The Company’s obligations under the Note are not
secured by any collateral or personal guarantees.
The amount of forgiveness under the Note is calculated in
accordance with the requirements of the PPP, including the
provisions of Section 1106 of the CARES Act, subject to limitations
and ongoing rulemaking by the SBA and the maintenance of employee
and compensation levels, although no more than 25% of the amount
forgiven can be attributable to non-payroll costs.
Item 2.03 Creation of a Direct Financial Obligation
or an Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information under Item 1.01 of this Current Report on Form 8-K
is incorporated herein by reference.
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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: April 30,
2020
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By:
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/s/ Brian Baker
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Name: Brian Baker
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Title:
Chief
Executive Officer
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