Filed Pursuant to Rule
424(b)(5)
Registration Statement No.
333-256280
PROSPECTUS SUPPLEMENT
(To
Prospectus Dated July 1, 2021)
DYNATRONICS CORPORATION
Up to $2,677,997
Common Stock
We are
Dynatronics Corporation, a corporation incorporated under the laws
of the State of Utah. We have entered into an equity distribution
agreement with Canaccord Genuity LLC and Roth Capital Partners, LLC
relating to shares of our common stock that may be offered pursuant
to this prospectus supplement and the accompanying prospectus. In
accordance with the terms of the equity distribution agreement, as
amended, we may offer and sell common stock having an aggregate
offering price of up to $10,000,000 from time to time through
Canaccord Genuity LLC and Roth Capital Partners, LLC, acting as our
sales agents. This prospectus supplement is offering up to an
aggregate of $2,677,997 in shares of our common stock. We will be
required to file another prospectus supplement in the event we want
to offer more than $2,677,997 in shares of our common stock in
accordance with the equity distribution agreement. Our common stock
is listed on The Nasdaq Capital Market under the symbol
“DYNT.” On May 17, 2021, the last reported sale price
of our common stock on The Nasdaq Capital Market was $1.11 per
share.
Upon
delivery of a placement notice, and subject to our instructions in
that notice and the terms and conditions of the equity distribution
agreement generally, Canaccord Genuity LLC and Roth Capital
Partners, LLC may sell shares of our common stock by any method
permitted by law deemed to be an “at-the-market
offering” as defined by Rule 415(a)(4) promulgated under the
Securities Act of 1933, as amended, or the Securities Act. The
shares of common stock will be distributed at the market prices
prevailing on The Nasdaq Capital Market at the time of the sale of
such shares. Canaccord Genuity LLC and Roth Capital Partners, LLC
are not required to sell any specific number or dollar amount of
securities, but will act as sales agents using commercially
reasonable efforts consistent with their normal trading and sales
practices, on mutually agreed terms among Canaccord Genuity LLC,
Roth Capital Partners, LLC, and us, to sell on our behalf all of
the shares of common stock requested to be sold by us. There is no
arrangement for funds to be received in any escrow, trust or
similar arrangement.
Canaccord
Genuity LLC and Roth Capital Partners, LLC will be entitled to
compensation at a fixed commission rate equal to 3.0% of the gross
sale price per share of common stock sold. In connection with the
sale of our common stock on our behalf, Canaccord Genuity LLC and
Roth Capital Partners, LLC will be deemed to be
“underwriters” within the meaning of the Securities Act
and the compensation of Canaccord Genuity LLC and Roth Capital
Partners, LLC will be deemed to be underwriting commissions or
discounts. See “Plan of Distribution” on page S-9 for
additional information regarding the compensation to be paid to
Canaccord Genuity LLC and Roth Capital Partners, LLC. None of
Canaccord Genuity LLC and Roth Capital Partners, LLC or any of
their respective affiliates or any person or entity acting jointly
or in concert with them, has over-allotted, or will over-allot,
shares of common stock in connection with the offering or effect
any other transactions that are intended to stabilize or maintain
the market price of the common stock.
As of
May 17, 2021, the aggregate market value of our outstanding common
stock held by non-affiliates was approximately $15,600,649, based
on 14,054,639 shares of outstanding common stock held by
non-affiliates and a price per share of $1.11, the closing price of
our common stock on May 17, 2021. Pursuant to General Instruction
I.B.6 of Form S-3, in no event will we sell securities in a public
primary offering with a value exceeding more than one-third of our
public float in any 12-month period so long as our public float
remains below $75.0 million. We have sold approximately $3,599,997
in securities pursuant to General Instruction I.B.6 of Form S-3
during the prior 12-calendar-month period that ends on, and
includes, the date of this prospectus supplement.
Investing in our securities involves risk. See “Risk
Factors” beginning on page S-6 of this prospectus supplement and the
accompanying prospectus, and in the documents incorporated by
reference, to read about factors to consider before purchasing our
securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
Canaccord Genuity
Roth Capital Partners
The date of this prospectus supplement is September 17, 2021.
TABLE OF CONTENTS
Prospectus Supplement
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ABOUT
THIS PROSPECTUS SUPPLEMENT
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S-2
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DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
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S-3
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PROSPECTUS
SUPPLEMENT SUMMARY
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S-4
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RISK
FACTORS
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S-6
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USE OF
PROCEEDS
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S-8
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DILUTION
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S-8
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PLAN OF
DISTRIBUTION
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S-9
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LEGAL
MATTERS
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S-9
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EXPERTS
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S-10
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WHERE
YOU CAN FIND MORE INFORMATION
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S-10
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INFORMATION
INCORPORATED BY REFERENCE
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S-10
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Prospectus
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ABOUT
THIS PROSPECTUS
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1
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RISK
FACTORS
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1
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FORWARD-LOOKING
STATEMENTS
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1
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OUR
COMPANY
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2
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THE
SECURITIES WE MAY OFFER
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2
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THIS
PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES
UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
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4
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DILUTION
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4
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USE OF
PROCEEDS
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4
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DESCRIPTION
OF CAPITAL STOCK
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4
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Description of
Common Stock
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4
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Description of
Preferred Stock
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5
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Description of
Warrants
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9
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Description of Debt
Securities
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11
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Description of
Units
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16
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PLAN OF
DISTRIBUTION
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17
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LEGAL
MATTERS
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17
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EXPERTS
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18
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WHERE
YOU CAN FIND MORE INFORMATION
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18
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
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18
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ABOUT THIS PROSPECTUS SUPPLEMENT
This
document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of this offering.
The second part, including the documents incorporated by reference,
provides more general information. This prospectus supplement also
adds to, updates and changes information contained in the
accompanying prospectus. The prospectus and prospectus supplement
are part of a registration statement that we filed with the
Securities and Exchange Commission, or the SEC, utilizing a
“shelf” registration process. Under this shelf
registration process, using this prospectus supplement and the
accompanying prospectus, we may from time to time sell shares of
our common stock preferred stock, debt securities, warrants, units
or any combination thereof, in one or more offerings having an
aggregate offering price of up to $50,000,000 on terms to be
determined by market conditions at the time of the offering.
Generally, when we refer to this prospectus, we are referring to
both parts of this document combined. To the extent there is a
conflict between the information contained in this prospectus
supplement, on the one hand, and the information contained in the
accompanying prospectus or in any document incorporated by
reference that was filed with the Securities and Exchange
Commission, or SEC, before the date of this prospectus supplement,
on the other hand, you should rely on the information in this
prospectus supplement. If any statement in one of these documents
is inconsistent with a statement in another document having a later
date—for example, a document incorporated by reference in the
accompanying prospectus – the statement in the document
having the later date modifies or supersedes the earlier
statement.
It is
important that you read and consider all of the information
contained in this prospectus supplement and the accompanying
prospectus in making your investment decision. You should also read
and consider the information in the documents to which we have
referred you in “Information Incorporated by Reference”
and “Where You Can Find More Information” on page S-10
of this prospectus supplement.
If the
description of the offering varies between this prospectus
supplement and the accompanying prospectus, you should rely on the
information in this prospectus supplement. We have not, and
Canaccord Genuity LLC and Roth Capital Partners, LLC have not,
authorized anyone to provide you with different or additional
information. You should assume that the information appearing in
this prospectus supplement, the accompanying prospectus, the
documents incorporated by reference in this prospectus supplement
and the accompanying prospectus, and in any free writing prospectus
that we have authorized for use in connection with this offering is
accurate only as of the respective dates of those documents. Our
business, financial condition, results of operations and prospects
may have changed since those dates.
We
further note that the representations, warranties and covenants
made by us in any agreement that is filed as an exhibit to any
document that is incorporated by reference in this prospectus
supplement and/or the accompanying prospectus were made solely for
the benefit of the parties to such agreement, including, in some
cases, for the purpose of allocating risk among the parties to such
agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when
made. Accordingly, such representations, warranties and covenants
should not be relied on as accurately representing the current
state of our affairs.
The
distribution of this prospectus supplement and the accompanying
prospectus and the offering of our securities in certain
jurisdictions may be restricted by law. This prospectus supplement
and the accompanying prospectus do not constitute, and may not be
used in connection with, an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not
qualified to do so to any person to whom it is unlawful to make
such offer or solicitation. See the “Plan of
Distribution” section of this prospectus supplement beginning
on page S-9.
References
to “our Company,” “Dynatronics,”
“we,” “our” and “us” in this
prospectus supplement and the accompanying prospectus are to
Dynatronics Corporation and its consolidated subsidiaries, unless
the context otherwise requires. This document includes trade names
and trademarks of other companies. All such trade names and
trademarks appearing in this document are the property of their
respective holders. References herein to “$” and
“dollars” are to the currency of the United
States.
You
should rely only on the information contained in this prospectus
supplement, the accompanying prospectus or any related free writing
prospectus we may authorize to be delivered to you. Neither we, nor
the sales agents have authorized anyone to provide you with
information different from, or in addition to, that contained or
incorporated by reference in this prospectus supplement, the
accompanying prospectus and any related free writing prospectus.
Neither we, nor the sales agents take any responsibility for, and
can provide no assurances as to the reliability of, any information
that others may give you. This prospectus is not an offer to sell,
nor is it seeking an offer to buy, these securities in any
jurisdiction where the offer or sale is not permitted. The
information contained or incorporated by reference in this
prospectus is only accurate as of the date of this prospectus,
regardless of the time or delivery of this prospectus and any sale
of our securities.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying prospectus and the
documents we have incorporated by reference contain forward-looking
statements. All statements contained or incorporated by reference
in this prospectus supplement other than statements of historical
fact are forward-looking statements. When used in this prospectus
supplement, the accompanying prospectus or any document
incorporated by reference in this prospectus supplement, the words
“believe,” “anticipate,”
“intend,” “plan,” “estimate,”
“expect,” “may,” “will,”
“should,” “seeks” and similar expressions
are forward-looking statements. Such forward-looking statements are
based on current expectations, but the absence of these words does
not necessarily mean that a statement is not forward-looking.
Forward-looking statements are based on assumptions and assessments
made in light of our experience and perception of historical
trends, current conditions, expected future developments and other
factors believed to be appropriate.
All
statements contained or incorporated in this prospectus which
address operating performance, events or developments that we
expect or anticipate may occur in the future, including statements
related to statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance, are
forward-looking statements. Important factors, risks and
uncertainties that may cause actual results to differ from those
expressed in our forward-looking statements include, but are not
limited to:
●
our
ability to continue to design, develop and market new and updated
products;
continued
financial viability of our largest customers;
timely
and adequate supply from third party suppliers;
uncertainties
associated with obtaining and enforcing our intellectual property
rights;
our
estimates for future performance;
the
impact on our sales and operations of public health crises in the
United States or internationally, including the current COVID-19 or
coronavirus pandemic; and
●
our
estimates regarding our capital requirements and our need for, and
ability to obtain, additional financing.
Forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties. Actual events or results may differ
materially from those discussed in the forward-looking statements
as a result of various factors. For a more detailed discussion of
such forward-looking statements and the potential risks and
uncertainties that may impact upon their accuracy, see the
“Risk Factors” section of our most recent Annual Report
on Form 10-K and of our other reports filed with the SEC (including
any amendments thereto), which are incorporated by reference into
this prospectus supplement, as the same may be updated from time to
time by our future periodic reports filed with the SEC under the
Exchange Act. These forward-looking statements reflect our view
only as of the date of this prospectus supplement.
You
should read this prospectus supplement, the accompanying prospectus
and the documents we have incorporated by reference in this
prospectus supplement and the accompanying prospectus, and that we
have filed as exhibits to the registration statement of which this
prospectus supplement is a part, completely and with the
understanding that our actual future results may be materially
different from what we expect. Except as required by law, we
undertake no obligations to update any forward-looking statements.
Accordingly, you should also carefully consider the factors set
forth in reports or documents that we file from time to time with
the SEC.
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PROSPECTUS
SUPPLEMENT SUMMARY
This summary highlights information contained in this prospectus
supplement and the accompanying prospectus, or incorporated by
reference in this prospectus supplement. This summary does not
contain all the information you should consider before investing in
our securities. You should read the following summary together with
the more detailed information appearing in this prospectus
supplement, the accompanying prospectus and the information
incorporated by reference before making an investment
decision.
Company
Overview
We
are a medical device company committed to providing high quality
restorative products designed to accelerate optimal health. We
design, manufacture, and sell a broad range of restorative products
for clinical use in physical therapy, rehabilitation, orthopedics,
pain management, and athletic training. Through our distribution
channels, we market and sell to orthopedists, physical therapists,
chiropractors, athletic trainers, sports medicine practitioners,
clinics, hospitals, and consumers.
We
conduct our business out of our current headquarters facility in
Eagan, Minnesota, and subsidiary locations in Northvale, New Jersey
and Cottonwood Heights, Utah. We were founded on a technology
platform to treat patients non-invasively using
microprocessor-based therapeutic devices. For more than 35 years,
we have grown our business and product offerings by building upon
these core therapeutic technologies, acquiring businesses in
related medical fields, and developing products and distribution to
meet the needs of our target customers.
We
were founded as “Dynatronics Laser Corporation” in Utah
on April 29, 1983. Our predecessor company, Dynatronics Research
Company, was formed in 1979 as a Utah corporation. We significantly
increased our business reach in recent years with the acquisition
of Hausmann Industries, Inc. (now, Hausmann Enterprises, LLC) in
2017, and Bird & Cronin, Inc. (now, Bird & Cronin, LLC), in
2018. Our website address is www.dynatronics.com. The contents of
our website are not part of this prospectus supplement and the
references in this prospectus supplement, the accompanying
prospectus and the documents we have incorporated by reference to
our website do not constitute incorporation by reference into this
prospectus supplement or the accompanying prospectus of the
information contained therein. Our principal executive offices are
located at 1200 Trapp Road, Eagan, Minnesota 55121 and our
telephone number is (801) 568-7000.
For additional
information regarding our business, properties and financial
condition, please refer to the documents cited in “Where You
Can Find More Information” on page S-10.
Implications
of Being a Smaller Reporting Company
We are
a “smaller reporting company,” meaning that the market
value of our common stock held by non-affiliates is less than $700
million and our annual revenue was less than $100 million during
our most recently completed fiscal year. We may continue to be a
smaller reporting company if either (i) the market value of our
stock held by non-affiliates is less than $250 million or (ii) our
annual revenue was less than $100 million during the most recently
completed fiscal year and the market value of our common stock held
by non-affiliates is less than $700 million. For so long as we
remain a smaller reporting company, we are permitted and intend to
rely on exemptions from certain disclosure and other requirements
that are applicable to other public companies that are not smaller
reporting companies.
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The Offering
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Issuer
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Dynatronics Corporation, a Utah corporation.
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Shares of common stock offered by us
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Shares of common stock with an aggregate offering price of up to
$2,677,997.
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Shares of common stock to be outstanding after this
offering
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Up to 19,755,723 shares of common stock(1),
assuming sales of 2,391,069 shares of our common stock in this
offering at a price of $1.11 per share, which was the closing price
on The Nasdaq Capital Market on May 17, 2021. The actual number of shares issued will
vary depending on the sales price under this
offering.(2)
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Manner of offering
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“At-the-market offering” that may be made from time to
time through our sales agents Canaccord Genuity LLC and Roth
Capital Partners, LLC. See “Plan of Distribution” on
page S-10.
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Use of proceeds
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We intend to use the net proceeds from this offering to enhance
liquidity, working capital and for general corporate purposes,
including line of credit pay-down, and pursuing long-term growth
opportunities. See “Use of Proceeds” on page
S-8.
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Nasdaq listing and symbol
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Our common stock is listed on The Nasdaq Capital Market under the
symbol “DYNT.”
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Transfer Agent
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Our transfer agent is Issuer Direct Corporation, 1981 Murray
Holladay Road, Suite 100, Salt Lake City, Utah, 84117, Telephone
801.272.9294, www.issuerdirect.com
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Risk factors
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An investment in our common stock involves risks, and prospective
investors should carefully consider the matters discussed under
“Risk Factors” beginning on page S-6.
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(1)
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The number of shares of common stock to be outstanding after this
offering is based on 17,364,654 shares of common stock issued and outstanding as
of the date of this prospectus supplement and excludes the
following:
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140,000
shares of common stock issuable upon
the exercise of stock options outstanding as of May
17, 2021, with a weighted average
exercise price of $2.00 per share;
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6,738,500
shares of common stock issuable upon
the exercise of stock purchase warrants outstanding as of May 17,
2021 at an exercise price of $2.75 per share;
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3,351,000
shares of common stock underlying
conversion of convertible preferred stock outstanding as of
May 17, 2021;
and
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1,290,656
shares of common stock reserved for
future issuance under our equity incentive
plans.
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(2)
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Except as otherwise indicated, the information contained in this
prospectus supplement assumes the sale of all of the shares offered
hereby.
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RISK FACTORS
Before deciding whether to invest in our common stock, you should
consider carefully the risks described below and discussed under
the sections captioned “Risk Factors” contained in Part
I—Item 1A of our most recent Annual Report on Form 10-K and
in our Quarterly Reports on Form 10-Q, which are incorporated by
reference herein in their entirety, together with other information
in this prospectus supplement and the accompanying prospectus, and
the information and documents incorporated by reference in this
prospectus supplement and the accompanying prospectus, and in any
free writing prospectus that we have authorized for use in
connection with this offering. If any of these risks actually
occurs, our business, financial condition, results of operations or
cash flow could be seriously harmed. This could cause the trading
price of our common stock to decline, resulting in a loss of all or
part of your investment.
Additional Risks Related to this Offering
The share price of our common stock has been and will likely
continue to be volatile. The price for our common stock has
been, and is likely to continue to be, volatile for the foreseeable
future. For example, in the 12 months ended May 17, 2021, our
common stock’s sales price on The Nasdaq Capital Market
ranged from a low of $0.52 to a high of $2.56 per share. Broad
market and industry factors may seriously affect the market price
of our common stock, regardless of our actual operating
performance. The market price of our common stock may fluctuate
significantly in response to a number of factors, most of which we
cannot control, including, among others, the factors discussed in
these risk factors and elsewhere in our reports and other documents
filed with the SEC. Other factors that may cause volatility in our
share price include:
●
our
ability to meet our working capital needs;
anticipated
near-term reductions in revenue estimated to be as much as
$11,000,000 resulting from our phasing out of distributed products
in favor of manufactured products, as announced in the quarter
ended March 31, 2021;
quarterly
variations in operating results;
changes
in financial estimates by us or securities analysts who may cover
our stock or by our failure to meet the estimates made by
securities analysts;
changes
in market valuations of other similar companies;
announcements
by us or our competitors of new products or of significant
technical innovations, contracts, acquisitions, divestitures,
strategic relationships or joint ventures;
additions
or departures of key personnel;
public
response and investor reaction to rumors or factual reports of
global events, terrorism, outbreaks of disease and other natural
disasters, such as the recent COVID-19 or coronavirus
pandemic;
continued
challenges experienced by us and our customers due to reduced
capacity and operating hours, supply chain disruptions, and
extended handling and shipping time due to the ongoing COVID-19
pandemic;
the
realization of any of the risk factors presented in this prospectus
supplement or the accompanying prospectus; and
●
future
sales of common stock.
Furthermore,
from time to time the stock markets have experienced extreme price
and volume fluctuations that have affected and continue to affect
the market prices of equity securities of many companies. These
fluctuations often have been unrelated or disproportionate to the
operating performance of those companies. These broad market and
industry fluctuations, as well as general economic, political and
market conditions such as recessions, interest rate changes,
international currency fluctuations or political unrest, may
negatively impact the market price of our common stock. In the
past, companies that have experienced volatility in the market
price of their stock have been subject to securities class action
litigation. Like any publicly traded company, we too may be the
target of this type of litigation in the future. Securities
litigation against us could result in substantial costs and divert
our management’s attention.
Management will have immediate and broad discretion as to the use
of the proceeds from this offering and may invest or spend the
proceeds of this offering in ways in which you may not agree and in
ways that may not yield returns to shareholders. We will
retain broad discretion over the use of proceeds from this
offering. We intend to use the net proceeds principally as
described under “Use of Proceeds.” You may not agree
with the manner in which our management chooses to allocate and
spend the net proceeds. Moreover, it is possible that the net
proceeds may be used in a way that does not improve our operating
results or enhance the value of our common stock.
The sale of our common stock in this offering and any future sales
of our common stock may depress our stock price and our ability to
raise fund in new stock offerings. We may issue common stock
from time to time in connection with this offering. This issuance
from time to time of these new shares of our common stock, or our
ability to issue these shares of common stock in this offering,
could result in resales of our common stock by our current
shareholders concerned about the potential dilution of their
holdings. In addition, sales of our common stock in the public
market following this offering could lower the market price of our
common stock. Sales may also make it more difficult for us to sell
equity securities or equity-related securities in the future at a
time and price that our management deems acceptable, or at all. We
cannot predict the number of these shares that might be resold or
the effect that future sales of our shares of common stock would
have on the market price of our shares of common
stock.
Purchasers will experience immediate dilution in the book value per
share of the common stock you purchase. If you purchase
shares of our common stock in this offering, you will suffer
substantial dilution in the net tangible book value of the common
stock you purchase because the price you pay per share exceeds the
book value per share of our tangible assets as of March 31, 2021.
As a result, investors purchasing common stock in this offering
will incur immediate dilution of $0.46 per share, based on the
difference between the assumed public offering price of $1.11 per
share, which was the last reported sale price of our common stock
on The Nasdaq Capital Market on May 17, 2021, and the as adjusted
net tangible book value per share of our outstanding common stock
as of March 31, 2021. These future issuances of common stock or
common stock equivalents and any additional shares issued in
connection with acquisitions, if any, may result in further
dilution. For a further description of the dilution that you will
experience immediately after this offering, see
“Dilution.”
In addition to potential dilution associated with this offering and
with future fundraising transactions, we currently have significant
numbers of securities outstanding that are exercisable for or
convertible into shares of our common stock, which could result in
significant additional dilution and downward pressure on our stock
price. As of May 17, 2021, there were 17,364,654 shares of
our common stock outstanding. In addition, we had outstanding stock
options representing the potential issuance of an additional
140,000 shares of our common stock, 6,738,500 shares of common
stock issuable upon exercise of common stock purchase warrants, and
3,351,000 shares of common stock underlying the conversion of
3,351,000 shares of our preferred stock. The issuance of these
shares of common stock in the future would result in significant
dilution to our current shareholders and could adversely affect the
price of our common stock and the terms on which we could raise
additional capital. In addition, the issuance and subsequent
trading of shares could cause the supply of our common stock
available for purchase in the market to exceed the purchase demand
for our common stock. Such supply in excess of demand could cause
the market price of our common stock to decline.
We plan to sell shares of our common stock in “at-the-market
offerings”, and investors who buy shares of our common stock
at different times will likely pay different prices.
Investors who purchase shares of our common stock in the offering
described in this prospectus supplement at different times will
likely pay different prices and may experience different outcomes
in their investment results. We will have discretion, subject to
the effect of market conditions, to vary the timing, prices, and
numbers of shares sold in this offering. Investors may experience a
decline in the value of their shares of our common stock. The
trading price of our common stock may be volatile and subject to
wide fluctuations. Many factors could have an impact on the market
price of our common stock, including the factors described above
and those disclosed under “Risk Factors” in our Annual
Report on Form 10-K for the fiscal year ended June 30, 2020 and our
Quarterly Reports on Form 10-Q for the quarters ended September 30,
2020, December 31, 2020 and March 31, 2021.
We do not intend to pay dividends on our common stock in the
foreseeable future. We have never declared or paid
any dividends on our common stock. We intend, for the foreseeable
future, to retain our future earnings, if any, to finance our
business operations and to pursue our business model. As a result,
the return on an investment in our common stock will likely depend
upon any future appreciation in value, if any, and on your ability
to sell your shares of common stock. The payment of future
dividends, if any, will be reviewed periodically by our board of
directors and will depend upon, among other things, conditions then
existing including earnings, financial conditions, cash on hand,
financial requirements to fund our commercial activities,
development and growth, our obligations to pay dividends on our
preferred stock, and other factors that our board of directors may
consider appropriate in the circumstances.
Any current or future outbreak of a health epidemic or other
adverse public health developments, such as the outbreak of the
Novel Coronavirus Disease 2019 (“COVID-19”) and ensuing
pandemic, could disrupt our manufacturing and supply chain, and
adversely affect our business and operating results. Our
business could be adversely affected by the effects of health
epidemics. For example, our materials suppliers could be disrupted
by conditions related to COVID-19, or other epidemics, possibly
resulting in disruption to our supply chain. If our suppliers are
unable or fail to fulfill their obligations to us for any reason,
we may not be able to manufacture our products and satisfy customer
demand or our obligations under sales agreements in a timely
manner, and our business could be harmed as a result. Our business
has been adversely affected by the COVID-19 pandemic. Furthermore,
there continues to be uncertainty on the continuing impact of the
pandemic on our business. Infections may become more widespread and
should that limit our ability to timely sell and distribute our
products or cause supply disruptions it would have a negative
impact on our business, financial condition and operating results.
In addition, a significant health epidemic could adversely affect
the economies and financial markets of many countries, resulting in
an economic downturn that could affect demand for our products,
which could have a material adverse effect on our business,
operating results and financial condition.
Although certain of our products are used by healthcare
professionals in settings where patients are treated, we do not
make claims that our products are effective in the treatment,
prevention or cure of disease, including COVID-19. If sales
representatives, retailers or online resellers make unauthorized
representations concerning the use of our products in the
prevention, treatment or mitigation of COVID-19, the response to
such statements may adversely affect our business and results of
operations and the market price of our common stock. The
manufacture, marketing and sale of our products are regulated by
the governmental agencies, including the U.S. Food and Drug
Administration or FDA, or FDA, and the Federal Trade Commission, or
FTC. The FDA and the FTC have issued warning letters to seven
companies for selling fraudulent COVID-19 products, as part of
these agencies’ response in protecting Americans during the
global COVID-19 pandemic. The FDA is warning against the sale of
unapproved products claiming to prevent or treat COVID-19. In a
public announcement regarding the warning letters, the FDA
Commissioner announced that the agency is particularly concerned
that products that claim to cure, treat or prevent serious diseases
like COVID-19 may cause consumers to delay or stop appropriate
medical treatment, leading to serious and life-threatening harm.
Companies that sell products that fraudulently claim to prevent,
treat or cure COVID-19 may be subject to legal action, including
but not limited to seizure or injunction. The FDA and FTC have
indicated that they will continue to monitor social media, online
marketplaces and incoming complaints to help ensure that the
companies do not sell fraudulent products, and an FDA cross-agency
task force has been established and dedicated to monitor closely
for fraudulent products related to COVID-19.
Changes in the method pursuant to which the LIBOR rates are
determined and potential phasing out of LIBOR after 2021 may affect
our financial results. Borrowings under our line of credit
facility bear interest at variable rates based on LIBOR or Prime.
The LIBOR or Prime rates and certain other interest
“benchmarks” may be subject to regulatory guidance
and/or reform that could cause interest rates under our current or
future debt agreements to perform differently than in the past or
cause other unanticipated consequences. The United Kingdom’s
Financial Conduct Authority, which regulates LIBOR, has announced
that it intends to stop encouraging or requiring banks to submit
rates for the calculation of LIBOR rates after December 31, 2021,
and it is unclear if LIBOR will cease to exist or if new methods of
calculating LIBOR will evolve. If LIBOR ceases to exist or if the
methods of calculating LIBOR change from their current form,
interest rates on our current or future debt obligations may be
adversely affected.
USE OF PROCEEDS
We
intend to use the net proceeds, if any, from the sale of the common
stock under this prospectus supplement 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.
As of
the date of this prospectus supplement, we cannot specify with
certainty all of the particular uses of the proceeds from this
offering. Accordingly, our management will retain broad discretion
over the use of such proceeds. Pending the use of the net proceeds
from this offering, we intend to invest the net proceeds in
investment-grade, interest-bearing instruments.
DILUTION
If you
invest in our securities in this offering, your ownership interest
will be diluted to the extent of the difference between the public
offering price per share of our common stock and the net tangible
book value per share of our common stock immediately after this
offering.
Our net
tangible book value as of March 31, 2021 was approximately
$10,297,789, or approximately $0.59 per share of common stock. Net
tangible book value represents total assets less intangible assets
and total liabilities. Net tangible book value per share represents
net tangible book value divided by the total number of shares of
common stock outstanding.
Dilution
in net tangible book value per share represents the difference
between the public offering price per share of our common stock and
the adjusted net tangible book value per share of our common stock
after giving effect to this offering. After giving effect to the
sale of the assumed 2,391,069 shares of our common stock in this
offering at an assumed public offering price of $1.11 per share,
the last reported sale price of our common stock on The Nasdaq
Capital Market on May 17, 2021, and after deducting estimated
offering commission and estimated offering expenses payable by us,
our adjusted net tangible book value per share of our common stock
at March 31, 2021, would have been approximately $12,766,253, or
$0.65 per share of common stock. This represents an immediate
increase in net tangible book value per share of our common stock
of approximately $0.05 per share to existing shareholders and an
immediate dilution of approximately $0.46 per share to purchasers
in this offering.
The
following table illustrates this dilution on a per share
basis:
Assumed
public offering price per share
|
|
$1.11
|
|
|
Net
tangible book value per share as of March 31, 2021
|
$0.59
|
|
Increase
per share attributable to this offering
|
$0.05
|
|
|
|
|
As
adjusted net tangible book value per share attributable to this
offering
|
|
$0.65
|
|
|
|
Dilution
per share to investors purchasing common stock in this
offering
|
|
$0.46
|
|
|
|
The
foregoing table is based on 17,364,654 shares of common stock
outstanding at March 31, 2021, which excludes, as of that
date:
●
140,000
shares of common stock issuable upon the exercise of stock options
outstanding, with a weighted average exercise price of $1.91 per
share;
6,728,500
shares of common stock issuable upon the exercise of outstanding
warrants to purchase common stock at an exercise price of $2.75 per
share;
3,351,000 shares of common stock underlying
conversion of 3,351,000 outstanding shares of preferred stock as
follows: (i) $ 4,980,000 in
stated value of Series A 8% Convertible Preferred Stock
outstanding, convertible into shares of common stock at a
conversion price of $2.50 per share; and (ii) $3,397,500 in stated
value of shares of Series B Convertible Preferred Stock
outstanding, convertible into shares of common stock at a
conversion price of $2.50 per share; and
●
1,290,656
shares of common stock not subject to
stock options and reserved for future issuance under our equity
incentive plans.
To the
extent any of the options or warrants are exercised, or the
preferred stock is converted to common stock, there will be further
dilution to new investors. In addition, we may choose to raise
additional capital due to market conditions or strategic
considerations even if we believe we have sufficient funds for our
current or future operating plans. To the extent that additional
capital is raised through the sale of equity or convertible debt
securities, the issuance of these securities may result in further
dilution to our shareholders.
PLAN OF DISTRIBUTION
We have
entered into an equity distribution agreement with Canaccord
Genuity LLC and Roth Capital Partners, LLC pursuant to which we may
offer and sell our common stock from time to time through Canaccord
Genuity LLC and Roth Capital Partners, LLC acting as sales agents,
including sales having an aggregate gross sales price of up to
$10,000,000. This prospectus supplement is offering up to an
aggregate of $2,677,997 in shares of our common stock. We will be
required to file another prospectus supplement in the event we want
to offer more than $2,677,997 in shares of our common stock in
accordance with the equity distribution agreement. This summary of
the material provisions of the equity distribution agreement does
not purport to be a complete statement of its terms and conditions.
The equity distribution agreement has been filed with the SEC as an
exhibit to a report filed under the Exchange Act and incorporated
by reference in this prospectus supplement.
Upon
delivery of a placement notice, and subject to the Company’s
instructions in that notice, and the terms and conditions of the
equity distribution agreement generally, Canaccord Genuity LLC and
Roth Capital Partners, LLC may sell our common stock by any method
permitted by law deemed to be an “at the market
offering” as defined by Rule 415(a)(4) promulgated under the
Securities Act. The common stock will be distributed at the market
prices prevailing on The Nasdaq Capital Market at the time of the
sale of such common stock.
We will
pay Canaccord Genuity LLC and Roth Capital Partners, LLC in cash,
upon each sale of our common stock pursuant to the equity
distribution agreement, a commission in an amount equal to 3.0% of
the aggregate gross sales price from each sale of our common stock.
Because there is no minimum offering amount required as a condition
to this offering, the actual total public offering amount,
commissions and proceeds to us, if any, are not determinable at
this time. We have agreed to reimburse a portion of Canaccord
Genuity LLC and Roth Capital Partners, LLC’s expenses,
including legal fees, in connection with this offering up to a
maximum of $40,000. In accordance with FINRA Rule 5110, these
reimbursed fees and expenses are deemed sales compensation to
Canaccord Genuity LLC and Roth Capital Partners, LLC in connection
with this offering. We estimate that the total expenses for the
offering, excluding compensation and expense reimbursement payable
to Canaccord Genuity LLC and Roth Capital Partners, LLC under the
terms of the equity distribution agreement, will be approximately
$150,000.00.
Settlement
for sales of common stock will occur on the second full business
day following the date on which any sales are made, or on some
other date that is agreed upon by us and Canaccord Genuity LLC and
Roth Capital Partners, LLC in connection with a particular
transaction, in return for payment of the net proceeds to us. There
is no arrangement for funds to be received in an escrow, trust or
similar arrangement. Sales of our common stock as contemplated in
this prospectus supplement will be settled through the facilities
of The Depository Trust Company or by such other means as we and
Canaccord Genuity LLC and Roth Capital Partners, LLC may
agree.
Canaccord
Genuity LLC and Roth Capital Partners, LLC will act as sales agents
on a commercially reasonable efforts basis consistent with their
normal trading and sales practices and applicable state and federal
laws, rules and regulations and the rules of The Nasdaq Capital
Market. In connection with the sale of common stock on our behalf,
Canaccord Genuity LLC and Roth Capital Partners, LLC will each be
deemed to be an “underwriter” within the meaning of the
Securities Act and the compensation of Canaccord Genuity LLC and
Roth Capital Partners, LLC will be deemed to be underwriting
commissions or discounts. We have agreed to provide indemnification
and contribution to Canaccord Genuity LLC and Roth Capital
Partners, LLC against certain civil liabilities, including
liabilities under the Securities Act.
None of
Canaccord Genuity LLC, Roth Capital Partners, LLC, or any of their
respective affiliates or any person or entity acting jointly or in
concert with them, has over-allotted, or will over-allot, common
stock in connection with the offering or effect any other
transactions that are intended to stabilize or maintain the market
price of the common stock.
The
offering of our common stock pursuant to the equity distribution
agreement will terminate as permitted therein. We, Canaccord
Genuity LLC or Roth Capital Partners LLC may terminate the equity
distribution agreement at any time upon ten days’ prior
notice.
Canaccord
Genuity LLC and Roth Capital Partners, LLC and their affiliates may
in the future provide various investment banking, commercial
banking and other financial services for us and our affiliates, for
which services they may in the future receive customary
fees.
This
prospectus supplement and the accompanying prospectus in electronic
format may be made available on a website maintained by Canaccord
Genuity LLC and Roth Capital Partners, LLC and Canaccord Genuity
LLC and Roth Capital Partners, LLC may distribute this prospectus
supplement and the accompanying prospectus
electronically.
LEGAL MATTERS
Certain
legal matters relating to the offering under this prospectus
supplement will be passed upon on behalf of the Company by Dentons
Durham Jones Pinegar P.C., Salt Lake City, Utah. In addition,
certain legal matters in connection with the offering under this
prospectus supplement will be passed upon on behalf of the sales
agents by Goodwin Procter LLP, New York, New York.
EXPERTS
Our
consolidated financial statements as of June 30, 2020 and June 30,
2019 and for each of the years in the two-year period ended June
30, 2020, have been audited by Tanner LLC as set forth in their
reports thereon and incorporated herein by reference. Such
consolidated financial statements have been incorporated by
reference herein in reliance upon the report of Tanner LLC, and
upon the authority of said firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are
subject to the reporting requirements of the Exchange Act, and file
annual, quarterly and current reports, proxy statements and other
information with the SEC. Our SEC filings are also available on the
SEC’s website at http://www.sec.gov. Copies of certain
information filed by us with the SEC are also available on our
website at http://www.dynatronics.com. We have not incorporated by
reference into this prospectus the information on our website, and
you should not consider it to be a part of this
document.
This
prospectus supplement and the accompanying base prospectus are only
part of a registration statement on Form S-3 that we have filed
with the SEC under the Securities Act, and therefore omit certain
information contained in the registration statement. We have also
filed exhibits and schedules with the registration statement that
are excluded from this prospectus supplement and the accompanying
base prospectus, and you should refer to the applicable exhibit or
schedule for a complete description of any statement referring to
any contract or other document.
INFORMATION INCORPORATED BY REFERENCE
We have
elected to “incorporate by reference” certain
information into this prospectus supplement. By incorporating by
reference, we can disclose important information to you by
referring you to another document we have filed with the SEC. The
following information incorporated by reference is deemed to be
part of this prospectus supplement:
●
our
Annual Report on Form 10-K for the year ended June 30, 2020,
filed with the SEC on September 24, 2020;
●
our
Definitive Proxy Statement on Schedule 14A, filed with the SEC
on October 29, 2020, relating to our Annual Meeting of Shareholders
held December 10, 2020;
●
our Quarterly
Reports on Form 10-Q for the quarter ended
September 30, 2020, filed with the SEC on November 12, 2020,
for the quarter ended
December 31, 2020, filed with the SEC on February 11, 2021, and
for the quarter ended
March 31, 2021, filed with the SEC on May 13,
2021;
●
our Current Reports
on Form 8-K as filed with the SEC during 2020 and 2021 on each of
November 5, 2020,
November 9, 2020,
November 12, 2020,
December 11, 2020,
December 16, 2020,
December 31, 2020,
January 29, 2021,
February 1, 2021,
February 11, 2021,
April 6, 2021,
April 22, 2021,
April 29, 2021,
May 13, 2021, and
May 17, 2021 (other than any portions thereof deemed furnished
and not filed as indicated below);
●
the description of
our common stock contained in our Registrant’s Registration
Statement on Form 8-A (File No. 00-012697) filed on July 26, 1984,
including any amendments or reports filed for the purpose of
updating such description.
In
addition, all documents subsequently filed by us (including all
documents subsequently filed by us after the date of this
registration statement and prior to the effectiveness of this
registration statement) pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act prior to the termination of the offering,
will be deemed to be incorporated herein by reference and to be a
part of this registration statement from the date of filing of such
documents.
This
prospectus does not, however, incorporate by reference any
documents or portions thereof, whether specifically listed above or
furnished by us in the future, that are not deemed
“filed” with the SEC, including information
“furnished” pursuant to Items 2.02, 7.01 and 9.01 of
Form 8-K.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained herein or in any subsequently filed document
that is also incorporated by reference herein modifies or replaces
such statement. Any statements so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this prospectus supplement.
We will
provide, without charge, to each person to whom a copy of this
prospectus supplement has been delivered, including any beneficial
owner, a copy of any and all of the documents referred to herein
that are summarized in this prospectus supplement, if such person
makes a written or oral request directed to:
Director,
Investor Relations
Dynatronics
Corporation
1200
Trapp Road
Eagan,
Minnesota, 55121
(801)
568-7000
PROSPECTUS
DYNATRONICS CORPORATION
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
————————————————————
We are Dynatronics
Corporation, a corporation incorporated under the laws of the State
of Utah. This prospectus relates to the public offer and sale of
common stock, preferred stock, debt securities, warrants, and units
(collectively, the shelf securities or the securities) that we may
offer and sell from time to time, in one or more series or
issuances and on terms that we will determine at the time of the
offering, any combination of the securities described in this
prospectus, up to an aggregate amount of $50,000,000. We may also
offer common stock or preferred stock upon conversion of debt
securities, common stock upon conversion of preferred stock, or
common stock, preferred stock or debt securities upon the exercise
of warrants.
This prospectus
provides you with a general description of the securities we may
offer and sell. We will provide specific terms of any offering in a
supplement to this prospectus. Any prospectus supplement may also
add, update, or change information contained in this prospectus.
You should carefully read this prospectus and the applicable
prospectus supplement, as well as the documents incorporated by
reference in this prospectus, before you invest in any of our
securities.
We may offer the
securities from time to time through public or private
transactions, and in the case of our common stock, on or off the
Nasdaq Capital Market, at prevailing market prices or at privately
negotiated prices. These securities may be offered and sold in the
same offering or in separate offerings, to or through underwriters,
dealers and agents, or directly to purchasers. The names of any
underwriters, dealers, or agents involved in the sale of our
securities registered hereunder and any applicable fees,
commissions, or discounts will be described in the applicable
prospectus supplement. Our net proceeds from the sale of securities
will also be set forth in the applicable prospectus
supplement.
This prospectus may not be used to consummate a sale of our
securities unless accompanied by the applicable prospectus
supplement.
Our common stock is
listed on the Nasdaq Capital Market under the symbol “DYNT.” As of May 17, 2021, the aggregate
market value of our outstanding common stock held by non-affiliates
was approximately $15,600,649, which was calculated based on
14,054,639 shares of outstanding common stock held by
non-affiliates and on a price per share of $1.11, the closing price
of our common stock on May 17, 2021. Pursuant to General
Instruction I.B.6 of Form S-3, in no event will we sell the shelf
securities in a public primary offering with a value exceeding more
than one-third of the aggregate market value of our common stock
held by non-affiliates in any 12-month period so long as the
aggregate market value of our outstanding common stock held by
non-affiliates remains below $75 million. During the 12 calendar
months prior to and including the date of this prospectus, we have
offered and sold $3,599,742 in value of shares of our common stock
pursuant to General Instruction I.B.6 of Form S-3.
Investing in our securities involves a high degree of risk.
See “Risk Factors” on
page 1 of this prospectus for a discussion of information that
should be considered in connection with an investment in our
securities.
————————————————————
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is July 1, 2021.
TABLE OF CONTENTS
|
|
|
Page
|
|
|
ABOUT THIS
PROSPECTUS
|
1
|
RISK
FACTORS
|
1
|
FORWARD-LOOKING
STATEMENTS
|
1
|
OUR
COMPANY
|
2
|
THE SECURITIES WE
MAY OFFER
|
2
|
DILUTION
|
4
|
USE OF
PROCEEDS
|
4
|
DESCRIPTION OF
CAPITAL STOCK
|
4
|
Description of
Common Stock
|
4
|
Description of
Preferred Stock
|
5
|
DESCRIPTION OF
WARRANTS
|
9
|
DESCRIPTION OF DEBT
SECURITIES
|
11
|
DESCRIPTION OF
UNITS
|
16
|
PLAN OF
DISTRIBUTION
|
17
|
LEGAL
MATTERS
|
17
|
EXPERTS
|
18
|
WHERE YOU CAN FIND
MORE INFORMATION
|
18
|
INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
|
18
|
ABOUT THIS PROSPECTUS
This prospectus is
part of a registration statement that we filed with the Securities
and Exchange Commission, or the SEC, utilizing a “shelf” registration process. Under this
shelf registration process, from time to time, we may sell any one
or more or a combination of the securities described in this
prospectus in one or more offerings, up to a total dollar amount of
$50,000,000. This prospectus provides you with general information
regarding the securities we may offer. Each time we sell securities
under this shelf registration process, we will provide a prospectus
supplement that will contain specific information about the terms
of the offering. We may also add, update or change in the
applicable prospectus supplement any of the information contained
in this prospectus. You should read both this prospectus and the
prospectus supplement related to any offering as well as additional
information described under the headings “Where You Can Find More
Information” and
“Incorporation of Certain
Information by Reference.”
We are offering to
sell, and seeking offers to buy, securities only in jurisdictions
where offers and sales are permitted. The information contained in
this prospectus and in any accompanying prospectus supplement is
accurate only as of the dates set forth on their respective covers,
regardless of the time of delivery of this prospectus or any
prospectus supplement or of any sale of our securities. Our
business, financial condition, results of operations, and prospects
may have changed since those dates. We have not authorized anyone
to provide you with information different from that contained or
incorporated by reference in this prospectus or any accompanying
prospectus supplement or any “free writing prospectus.” You should rely only on the
information contained or incorporated by reference in this
prospectus or any accompanying prospectus supplement or related
“free writing
prospectus.” To the
extent there is a conflict between the information contained in
this prospectus and the prospectus supplement, you should rely on
the information in the prospectus supplement, provided, that, if any statement in one of these
documents is inconsistent with a statement in another document
having a later date — for
example, a document incorporated by reference into this prospectus
or any prospectus supplement — the statement in the document
having the later date modifies or supersedes the earlier
statement.
THIS
PROSPECTUS MAY NOT BE USED TO OFFER AND SELL SECURITIES UNLESS IT
IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
Unless the context
otherwise requires, the terms “Company,” “we,” “us,” or “our” refer to Dynatronics Corporation, a
Utah corporation, and its consolidated
subsidiaries.
RISK FACTORS
An investment in
our securities involves a high degree of risk. The prospectus
supplement applicable to each offering of securities will contain a
discussion of the risks applicable to an investment in our
securities. Prior to making a decision about investing in our
securities, you should carefully consider the specific factors
discussed under the heading “Risk Factors” in the
applicable prospectus supplement and any free writing prospectus,
together with all of the other information contained or
incorporated by reference in the applicable prospectus supplement
or appearing or incorporated by reference in this prospectus. You
should also consider the risks, uncertainties and assumptions
discussed under Part II, Item 1A, “Risk Factors,” in
our Annual Report on Form 10-K for the fiscal year ended June 30,
2020, and in our Quarterly Report on Form 10-Q for the quarterly
periods ended September 30, 2020, December 31, 2020 and March 31,
2021. These reports are incorporated herein by reference, and may
be amended, supplemented or superseded from time to time by other
reports we file with the Securities and Exchange Commission, or
SEC, in the future.
See the sections
entitled “Where You Can
Find More Information”
and “Incorporation of
Certain Information by Reference” in this prospectus. The risks and
uncertainties we discuss in the documents incorporated by reference
in this prospectus are those we currently believe may materially
affect us. Additional risks and uncertainties not presently known
to us or that we currently believe are immaterial may also
materially and adversely affect our business, financial condition
and results of operations.
FORWARD-LOOKING STATEMENTS
This prospectus,
any applicable prospectus supplement and the documents and
information incorporated by reference herein and therein may
contain “forward-looking
statements.”
Forward-looking statements may include, but are not limited to,
statements relating to our objectives, plans and strategies as well
as statements, other than historical facts, that address
activities, events, or developments that we intend, expect,
project, believe or anticipate will or may occur in the future.
These statements are often characterized by terminology such as
“may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal” or “continue” or the negative of these terms or
other similar expressions.
Forward-looking
statements are based on assumptions and assessments made in light
of our experience and perception of historical trends, current
conditions, expected future developments and other factors believed
to be appropriate. Forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties, many
of which are outside of our control. You should not place undue
reliance on these forward-looking statements, which reflect our
view only as of the date of this prospectus, and we undertake no
obligation to update these forward-looking statements in the
future, except as required by applicable law.
Moreover, we
operate in a very competitive and rapidly changing environment. New
risks emerge from time to time. It is not possible for our
management to predict all risks, nor can we assess the impact of
all factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. In light of these risks, uncertainties and
assumptions, the future events and trends discussed in this
prospectus and the documents incorporated by reference herein may
not occur and actual results could differ materially and adversely
from those anticipated or implied in the forward-looking
statements.
You should not rely
upon forward-looking statements as predictions of future events.
The events and circumstances reflected in the forward-looking
statements may not be achieved or occur. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity,
performance or achievements. We undertake no obligation to update
any of these forward-looking statements for any reason after the
date of this prospectus, or in the case of documents referred to or
incorporated by reference, the date of those documents, or to
conform such statements to actual results or revised expectations.
If we do update one or more forward-looking statements, no
inference should be drawn that we will make additional updates with
respect to those or other forward-looking statements.
Factors that could
cause actual results to differ materially from those indicated by
the forward-looking statements include those factors described
under the caption “Risk
Factors” in our Annual
Report on Form 10-K for the fiscal year ended June 30, 2020, which
is incorporated by reference in this prospectus, and under similar
headings in our subsequently filed quarterly reports on Form 10-Q
and annual reports on Form 10-K, as well as the other risks and
uncertainties described in any applicable prospectus supplement or
free writing prospectus and in the other documents incorporated by
reference in this prospectus.
You should read
this prospectus, the documents incorporated by reference herein,
the applicable prospectus supplement and any free writing
prospectus, and the documents that we have filed with the SEC as
exhibits to the registration statement of which this prospectus is
a part with the understanding that our actual future results,
levels of activity, performance and events and circumstances may be
materially different from what we expect.
OUR COMPANY
Overview
We design,
manufacture, and sell a broad range of restorative products
for clinical use in physical therapy, rehabilitation, orthopedics,
pain management, and athletic training. Through our distribution
channels, we market and sell to orthopedists, physical therapists,
chiropractors, athletic trainers, sports medicine practitioners,
clinics, and hospitals.
We conduct our
operations at our headquarters in Eagan, Minnesota, and in other
facilities located in Northvale, New
Jersey; and Cottonwood Heights, Utah. Organized in 1983,
Dynatronics has grown by adding manufactured and branded product
offerings, developing best-in-class distribution to meet the needs
of our target customers, and acquiring complementary medical device
businesses in related fields.
Background
We are a Utah
corporation founded as “Dynatronics Laser Corporation”
on April 29, 1983. Our predecessor company, Dynatronics Research
Company, was formed in 1979 as a Utah corporation.
We operate on a
fiscal year ending June 30. For example, reference to fiscal year
2020 refers to the fiscal year ended June 30, 2020. All references
to financial statements in this prospectus refer to the
consolidated financial statements of our parent company,
Dynatronics Corporation, and our wholly-owned subsidiaries, Bird
& Cronin, LLC, Hausmann Enterprises, LLC, and Dynatronics
Distribution Company, LLC.
Our principal
offices are located at 1200 Trapp Road, Eagan, Minnesota, 55121,
and our telephone number is (801) 568-7000. Our website
address is www.dynatronics.com. Neither our
website nor any information contained on, or accessible through,
our website is part of this prospectus.
THE SECURITIES WE
MAY OFFER
We may offer shares
of our common stock and preferred stock, various series of debt
securities and/or warrants to purchase any of such securities,
either individually or in combination, and common stock, preferred
stock and/or debt securities upon the exercise of the warrants,
with a total value of up to $50,000,000, from time to time under
this prospectus, together with any applicable prospectus supplement
and any related free writing prospectus, at prices and on terms to
be determined by market conditions at the time of any offering.
This prospectus provides you with a general description of the
securities we may offer. Each time we offer a type or series of
securities under this prospectus, we will provide a prospectus
supplement that will describe the specific amounts, prices and
other important terms of the securities, including, to the extent
applicable:
●
designation or
classification;
●
aggregate principal
amount or aggregate offering price;
●
maturity date, if
applicable;
●
original issue
discount, if any;
●
rates and times of
payment of interest or dividends, if any;
●
redemption,
conversion, exercise, exchange or sinking fund terms, if
any;
●
restrictive
covenants, if any;
●
voting or other
rights, if any;
●
conversion or
exchange prices or rates, if any, and, if applicable, any
provisions for changes to or adjustments in the conversion or
exchange prices or rates and in the securities or other property
receivable upon conversion or exchange; and
●
material or special
U.S. federal income tax considerations, if any.
The applicable
prospectus supplement and any related free writing prospectus that
we may authorize to be provided to you may also add, update or
change any of the information contained in this prospectus or in
documents we have incorporated by reference. However, no prospectus
supplement or free writing prospectus will offer a security that is
not registered and described generally in this prospectus at the
time of the effectiveness of the registration statement of which
this prospectus is a part.
We may sell the
securities directly to investors or to or through agents,
underwriters or dealers. We, and our agents or underwriters,
reserve the right to accept or reject all or part of any proposed
purchase of securities. If we do offer securities to or through
agents or underwriters, we will include in the applicable
prospectus supplement:
●
the names of those
agents or underwriters;
●
applicable fees,
discounts and commissions to be paid to them;
●
details regarding
over-allotment options, if any; and
●
the net proceeds to
us.
Common Stock. We may
issue shares of our common stock from time to time. The holders of
our common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of shareholders. Subject
to preferences that may be applicable to any outstanding shares of
preferred stock, the holders of common stock are entitled to
receive ratably such dividends as may be declared by our board of
directors out of legally available funds. Upon our liquidation,
dissolution or winding up, holders of our common stock are entitled
to share ratably in all assets remaining after payment of
liabilities and the liquidation preferences of any outstanding
shares of preferred stock. Holders of common stock have no
preemptive rights and no right to convert their common stock into
any other securities. There are no redemption or sinking fund
provisions applicable to our common stock. When we issue shares of
common stock under this prospectus, the shares will be fully paid
and non-assessable. The rights, preferences and privileges of the
holders of common stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of
preferred stock, which we may designate in the future. In this
prospectus, we have summarized certain general features of the
common stock under “Description of Capital Stock
— Description of Common
Stock.” We urge you,
however, to read the applicable prospectus supplement (and any
related free writing prospectus that we may authorize to be
provided to you) related to any common stock being
offered.
Preferred Stock. We may
issue shares of our preferred stock from time to time, in one or
more series. Under our certificate of incorporation, our board of
directors, or Board, has the authority to designate up to
50,000,000 shares of preferred stock in one or more series and to
fix the privileges, preferences and rights of each series of
preferred stock, any or all of which may be greater than the rights
of the common stock. If we sell any new series of preferred stock
under this prospectus and any applicable prospectus supplement, our
Board will determine the designations, voting powers, preferences
and rights of the preferred stock, as well as the qualifications,
limitations or restrictions thereof, including dividend rights,
conversion rights, preemptive rights, terms of redemption or
repurchase, liquidation preferences, sinking fund terms and the
number of shares constituting any series or the designation of any
series. Convertible preferred stock will be convertible into our
common stock or exchangeable for other securities. Conversion may
be mandatory or at your option and would be at prescribed
conversion rates.
We will file as an
exhibit to the registration statement of which this prospectus is a
part, or will incorporate by reference from reports that we file
with the SEC, the form of any certificate of designation that
contains the terms of the series of preferred stock we are
offering. In this prospectus, we have summarized certain general
features of the preferred stock under “Description of Capital Stock
— Description of
Preferred Stock.” We urge
you, however, to read the applicable prospectus supplement (and any
related free writing prospectus that we may authorize to be
provided to you) related to the series of preferred stock being
offered, as well as the complete certificate of designation that
contains the terms of the applicable series of preferred
stock.
Debt Securities. We may
issue debt securities from time to time, in one or more series, as
either senior or subordinated debt or as senior or subordinated
convertible debt. The senior debt securities will rank equally with
any other unsecured and unsubordinated debt. The subordinated debt
securities will be subordinate and junior in right of payment, to
the extent and in the manner described in the instrument governing
the debt, to all of our senior indebtedness. Convertible debt
securities will be convertible into or exchangeable for our common
stock or other securities. Conversion may be mandatory or at your
option and would be at prescribed conversion rates.
Any debt securities
issued under this prospectus will be issued under one or more
documents called indentures, which are contracts between us and a
national banking association or other eligible party, as trustee.
In this prospectus, we have summarized certain general features of
the debt securities under “Description of Debt
Securities.” We urge you,
however, to read the applicable prospectus supplement (and any free
writing prospectus that we may authorize to be provided to you)
related to the series of debt securities being offered, as well as
the complete indentures that contain the terms of the debt
securities. Indentures and forms of debt securities containing the
terms of the debt securities being offered will be filed as
exhibits to the registration statement of which this prospectus is
a part or will be incorporated by reference from reports that we
file with the SEC.
Warrants. We may issue
warrants for the purchase of common stock, preferred stock and/or
debt securities in one or more series. We may issue warrants
independently or in combination with common stock, preferred stock
and/or debt securities. In this prospectus, we have summarized
certain general features of the warrants under “Description of Warrants.” We urge you, however, to read the
applicable prospectus supplement (and any related free writing
prospectus that we may authorize to be provided to you) related to
the particular series of warrants being offered, as well as any
warrant agreements and warrant certificates that contain the terms
of the warrants. We have filed forms of the warrant agreements and
forms of warrant certificates containing the terms of the warrants
that may be offered as exhibits to the registration statement of
which this prospectus is a part. We will file as exhibits to the
registration statement of which this prospectus is a part, or will
incorporate by reference from reports that we file with the SEC,
the form of warrant and/or the warrant agreement and warrant
certificate, as applicable, that contain the terms of the
particular series of warrants we are offering, and any supplemental
agreements, before the issuance of such warrants.
Any warrants issued
under this prospectus may be evidenced by warrant certificates.
Warrants also may be issued under an applicable warrant agreement
that we enter into with a warrant agent. We will indicate the name
and address of the warrant agent, if applicable, in the prospectus
supplement relating to the particular series of warrants being
offered.
Units. We may offer units consisting of
some or all of the securities described above, in any combination,
including common stock, preferred stock, warrants and/or debt
securities. The terms of these units will be set forth in a
prospectus supplement. The description of the terms of these units
in the related prospectus supplement will not necessarily be
complete. You should refer to the applicable form of unit and unit
agreement for complete information with respect to these
units.
DILUTION
We will set forth
in a prospectus supplement the following information regarding any
material dilution of the equity interests of investors purchasing
securities in an offering under this prospectus and the related
prospectus supplement:
●
the net tangible
book value per share of our equity securities before and after the
offering;
●
the amount of the
increase in such net tangible book value per share attributable to
the cash payments made by purchasers in the offering;
and
●
the amount of the
immediate dilution from the public offering price, which will be
absorbed by such purchasers.
USE OF PROCEEDS
Except as may be
otherwise set forth in any prospectus supplement accompanying this
prospectus, we will use the net proceeds we receive from sales of
securities offered hereby for general corporate purposes, which may
include the repayment of indebtedness outstanding from time to time
and for working capital, capital expenditures, acquisitions and
repurchases of our common stock or other securities. When specific
securities are offered, the prospectus supplement relating thereto
will set forth our intended use of the net proceeds that we receive
from the sale of such securities.
DESCRIPTION OF CAPITAL STOCK
As of the date of
this prospectus, our amended and restated articles of
incorporation, as amended (our “Articles of
Incorporation”), authorize us to issue 100,000,000 shares of
common stock, no par value per share, and 50,000,000 shares of
preferred stock, no par value per share. This section describes the
general terms of our capital stock. A prospectus supplement may
provide information that is different from this prospectus. If the
information in the prospectus supplement with respect to our
securities being offered differs from this prospectus, you should
rely on the information in the prospectus supplement. A copy of our
Articles of Incorporation has been incorporated by reference from
our filings with the SEC as an exhibit to the registration
statement of which this prospectus forms a part.
Our capital stock
and the rights of the holders of our capital stock are subject to
the applicable provisions of the Utah Revised Business Corporation
Act, which we sometimes refer to in this section as “Utah law,” our Articles of Incorporation, our
bylaws, as amended (or “Bylaws”), and the agreements
described below. The following description of our capital stock,
and any description of our capital stock in a prospectus
supplement, may not be complete and is subject to, and qualified in
its entirety by reference to, Utah law and the actual terms and
provisions contained in our Articles of Incorporation and our
Bylaws, each as amended from time to time. For more information on
how to obtain copies of our Articles of Incorporation and Bylaws
which are incorporated by reference as exhibits into the
registration statement of which this prospectus is a part, please
see the section captioned “Where You Can Find More
Information” in this prospectus.
Description
of Common Stock
Voting Rights
The holders of our
common stock are generally entitled to one vote for each share held
on all matters submitted to a vote of the shareholders and do not
have any cumulative voting rights. Unless otherwise required by
Utah law, once a quorum is present, matters presented to
shareholders, except for the election of directors, will be
approved by a majority of the votes cast. The election of directors
is determined by a plurality of the votes cast. Shareholders are
not entitled to cumulative voting. Cumulative voting is a system
for electing directors whereby a shareholder is entitled to
multiply the number of securities held by the number of directors
to be elected and cast the total number of votes for a single
candidate or a select few candidates.
Dividends
Holders of our
common stock are entitled to receive dividends if, as and when
declared by the Board out of funds legally available for that
purpose, subject to preferences that may apply to any preferred
stock that we issue.
Liquidation Rights
In the event of our
dissolution or liquidation, after satisfaction of all our debts and
liabilities and distributions to the holders of any preferred stock
that we issued, or may issue in the future, of amounts to which
they are preferentially entitled, the holders of common stock will
be entitled to share ratably in the distribution of assets to the
shareholders.
Other Provisions
There are no
cumulative, subscription or preemptive rights to subscribe for any
additional securities, which we may issue, and there are no
redemption provisions, conversion provisions or sinking fund
provisions applicable to the common stock. The rights of holders of
common stock are subject to the rights, privileges, preferences and
priorities of any class or series of preferred stock. In addition,
we are restricted from making distributions, paying dividends and
redeeming the common stock and making similar payments with respect
to junior securities at any time that we are not in compliance with
our obligations under the applicable designations of the rights,
preferences and limitations of any outstanding series of preferred
stock.
Our Articles of
Incorporation and Bylaws do not restrict the ability of a holder of
our common stock to transfer his or her shares of our common
stock.
Shares of Common Stock Reserved for Issuance
As of May 17, 2021,
we had reserved for issuance:
●
6,738,500 shares of
common stock issuable upon the exercise of outstanding
warrants;
●
1,992,000 shares of
common stock issuable upon the conversion of outstanding shares of
our Series A 8% Convertible Preferred Stock, or Series A
Preferred. For a description of the conditions upon which the
Series A Preferred is convertible, see “Series A 8% Convertible
Preferred Stock”
below;
●
1,359,000 shares of
common stock issuable upon the conversion of outstanding shares of
our Series B Convertible Preferred Stock, or Series B
Preferred. For a description of the conditions upon which the
Series B Preferred is convertible, see “Series B Convertible Preferred
Stock” below;
and
●
140,000 shares of
common stock issuable upon the exercise of options granted under
our stock option plans, with a weighted average exercise price of
$1.91 per share, 46,250 of which are currently exercisable, and
93,750 of which are subject to vesting requirements.
Description of Preferred Stock
Under our Articles
of Incorporation, we are authorized to issue up to 50,000,000
shares of preferred stock, no par value per share, in one or more
series with such designation, rights and preferences as may be
determined from time to time by our Board. Accordingly, the Board
is empowered, without shareholder approval, to issue preferred
stock with dividend, liquidation, conversion, voting or other
rights, which could adversely affect the voting power or other
rights of the holders of our common stock and, in certain
instances, could adversely affect the market price of our common
stock.
Our Board has
designated 2,000,000 of the authorized shares of preferred stock as
Series A 8% Convertible Preferred Stock, 1,800,000 of the
authorized shares of preferred stock as Series B Convertible
Preferred Stock, 2,800,000 of the authorized shares of preferred
stock as Series C Non-voting Convertible Preferred Stock, and
1,581,935 of the authorized shares of preferred stock as
Series D Non-voting Convertible Preferred Stock.
As of May 17, 2021,
there were:
●
1,992,000 shares of
Series A Preferred issued and outstanding, convertible into
1,992,000 shares of common stock, and no shares of Series A
Preferred available for future issuances;
●
1,359,000 shares of
Series B Preferred issued and outstanding, convertible into
1,359,000 shares of common stock, and no shares of Series B
Preferred available for future issuances;
●
No shares of Series
C Preferred issued and outstanding, and no shares of Series C
Preferred available for future issuance; and
●
No shares of Series
D Preferred issued and outstanding, and no shares of Series D
Preferred available for future issuance.
In this section of
the prospectus, we describe the rights of the holders of these
securities and additional details related to the Series A Preferred
and Series B Preferred.
Series A 8% Convertible Preferred Stock
In this section, we
summarize the terms of the Series A Preferred as contained in
the Series A Certificate of Designations, Preferences and
Rights (the “Series A Certificate of Designation”)
that we filed with the Utah Division of Corporations and Commercial
Code, or Utah Division, in June 2015. This summary is not complete
and is qualified in its entirety by the full text of the
Series A Certificate of Designation, a copy of which has been
incorporated by reference from our filings with the SEC as an
exhibit to the registration statement of which this prospectus
forms a part. We issued the Series A Preferred in two private
placements in June 2015 and in December 2016. As of May 17, 2021,
there were 1,992,000 shares of Series A Preferred issued and
outstanding, convertible into 1,992,000 shares of common stock, and
no shares of Series A Preferred available for future
issuances.
Voting. The Series A Preferred
votes on an as-converted basis, one vote for each share of common
stock issuable upon conversion of the Series A
Preferred, provided, however, that no holder of
Series A Preferred issued prior to December 28,
2016, may cast votes equivalent to the number of shares of common
stock issuable upon conversion of Series A Preferred held by
such holder that exceeds the quotient of (x) the aggregate purchase
price paid by such holder of Series A Preferred for its Series
A Preferred, divided by (y) the greater of (i) $2.50 and (ii) the
market price of the common stock (this adjustment is defined as the
“Voting Cutback”). The purchase price per share of
Series A Preferred we issued in December 2016 was greater than
the market price of the common stock on the date of issuance.
Therefore, no Voting Cutback applies to the shares of Series A
Preferred we issued in our offering in December 2016.
Certain Changes and
Amendments. Without the consent of holders of at least
a majority of the then outstanding shares of Series A
Preferred, we may not: (i) amend or repeal the Series A
Certificate of Designation or our Articles of Incorporation or
Bylaws in any manner that adversely affects the rights,
preferences, privileges or the restrictions provided for the
benefit of the Series A Preferred; (ii) reclassify or amend
any of our securities in a manner that adversely affects the
designations, preferences, powers and/or the relative
participating, optional or other special rights, or the
restrictions provided for the benefit of the Series A
Preferred; (iii) authorize, issue or sell any (A) class or series
of capital stock (including shares of treasury stock) that would be
classified as senior to or pari passu with the Series A
Preferred or (B) rights, options, warrants or other securities
(including debt securities) convertible into or exercisable or
exchangeable for capital stock or any equity security or having any
other equity feature, in each case, that would be classified as
either senior to or pari
passu with the Series A Preferred; (iv) purchase
or redeem or pay or declare any dividend on any shares of our
capital stock, other than redemptions of or dividends on the
Series A Preferred; (v) increase the number of authorized
shares of Series A Preferred; or (vi) enter into any agreement
to do any of the foregoing that is not expressly made conditional
on obtaining the consent of the holders of at least a majority of
the then outstanding shares of Series A Preferred. The holders
of a majority of the Series A Preferred consented to the offer
and sale of the Series B Convertible Preferred Stock.
Dividends. Prior to conversion,
each share of Series A Preferred carries an annual cumulative
dividend, or Series A Dividend, at a rate of 8.0% of $2.50,
plus all accrued but unpaid dividends thereon. Series A
Dividends may be paid at our discretion in cash or in shares of
common stock. If our Board declares a dividend payable upon our
common stock, whether in cash, in kind or in other securities or
property, the holders of outstanding shares of Series A
Preferred would be entitled to the amount of such dividends that
would be payable in respect of the number of shares of common stock
into which their shares of Series A Preferred could be
converted, which may result in shares of common stock being issued
at less than market prices.
Liquidation. The Series A
Preferred ranks senior to the common stock and to the other series
of preferred stock with respect to distributions upon a deemed
dissolution, liquidation or winding-up, and has a per share
liquidation preference equal to $2.50 plus all accrued but unpaid
dividends thereon.
Conversion. Each share of Series A
Preferred is convertible into common stock at a price of $2.50 per
share. A holder of Series A Preferred may elect to have its
shares of Series A Preferred subject to a limitation that
restricts or limits conversion of its shares of Series A
Preferred (Beneficial Ownership Limitation).
As used in the
Series A Certificate of Designation and in this prospectus,
the Beneficial Ownership Limitation refers to an ownership
limitation affecting the conversion of preferred stock to the
extent that such conversion would result in the holder of the
preferred stock beneficially owning in excess of 4.99% (or, if
permitted or provided otherwise in the applicable certificate of
designation, in excess of 9.99%) of the total number of shares of
our common stock outstanding immediately after giving effect to the
conversion.
Forced Conversion. We may force
the conversion of one-half of the outstanding Series A
Preferred into common stock on a 1:1 basis if certain conditions
have been met, including: (1) the common stock has a bid price of
at least $7.50 per share on each of the 40 trading days prior to
the conversion date; (2) the daily trading volume for the prior 90
trading days exceeds 30,000 shares; and (3) we are listed in good
compliance on the Nasdaq Capital Market (or another national
exchange) at the time of conversion. Thereafter, we would have the
further right to require the conversion of the remaining
outstanding Series A Preferred into common stock on a 1:1
basis if: (1) the common stock has a bid price of at least $10.00
per share on each of the 40 trading days prior to the forced
conversion date; (2) the daily trading volume for the prior 90
trading days exceeds 50,000 shares; (3) we are listed in good
compliance on the Nasdaq Capital Market (or another national
exchange) at the time of conversion, and (4) certain other
conditions have been met as detailed in the Series A
Certificate of Designation.
Redemption. Upon certain
“Triggering Events” as defined in Section 9 of the
Series A Certificate of Designation, which events generally
refer to a failure to meet our obligations to the holders of the
Series A Preferred under their registration rights agreement
with us or to comply with material provisions of the Series A
Certificate of Designation, including without limitation, the
conversion, dividend, and liquidation rights of the Series A
Preferred, a holder of Series A Preferred, at the
holder’s sole option, may require us to redeem all of such
holder’s shares of Series A Preferred. Under certain of
the Triggering Events, at its sole option, the holder may require
that the redemption price be paid in cash or in shares of common
stock. If the holder elects to receive the redemption price paid in
shares of common stock, then the redemption price is to be a number
of shares of common stock equal to the applicable redemption amount
divided by 75% of the average of the volume weighted average price
(“VWAP”) of the common stock for the 10 trading days
immediately prior to the date of the holder’s election. In
the alternative, the holder may elect to require that we increase
the dividend rate on all of the holder’s outstanding
Series A Preferred to 18% per annum thereafter. If a holder
elects redemption and we fail to pay in full the redemption price
on the date such amount is due (whether in cash or shares of common
stock as elected by the shareholder), we will be required to pay
interest on the redemption amount at a rate equal to the lesser of
18% per annum or the maximum rate permitted by applicable law,
accruing daily from such date until the redemption amount, plus all
such interest thereon, is paid in full.
Director Rights and Registration
Rights. We also granted the holders of the
Series A Preferred certain “Director Rights,”
described below. Under these rights, we increased the size of our
Board of Directors to up to seven members and granted the holders
of the Series A Preferred (the “Preferred
Investors”) the right (“Director Rights”) to
appoint up to three members (each a “Preferred
Director”) of our Board for so long as they own or would
beneficially own at least 28.6% of our common stock, either
directly, or indirectly, through ownership of common stock or
Series A Preferred convertible into common stock, but
excluding any related warrants exercisable for common stock (the
“Threshold Ownership Percentage”). In compliance with
Nasdaq Listing Rule 5640, the number of Preferred Directors is to
be reduced pro rata with any reduction in ownership by the
Preferred Investors below the Threshold Ownership Percentage, so
that the number of Preferred Directors is approximately equal to
the Preferred Investors’ direct or indirect ownership of our
common stock. The Director Rights may be exercised at the
discretion of certain affiliates of Prettybrook Partners LLC
(“Prettybrook”) for so long as Prettybrook and/or its
affiliates own at least 50% of the outstanding Series A
Preferred.
Notwithstanding
anything set forth above, the holders of the Series A
Preferred do not have any rights to elect any Preferred Directors
unless they own or would beneficially own at least 10% of our
common stock either directly, or indirectly, through ownership of
common stock or Series A Preferred convertible into common
stock, but excluding any warrants exercisable for common stock
acquired at the time they acquired the Series A Preferred (the
“Director Rights Period”). The holders of common stock
have no voting, nomination, election or other rights with respect
to the Preferred Directors.
We also granted to
the Preferred Investors certain registration rights, obligating us
to register the resale by those investors of all shares of common
stock issuable upon conversion of the Series A Preferred or in
payment of Series A Dividends with respect to the shares of
Series A Preferred, as well as shares of common stock
underlying the exercise of certain warrants issued the Preferred
Investors. We filed two registration statements pursuant to and in
fulfillment of our obligations under our agreement with these
investors: Registration Statements No. 333-205934 (effective August
13, 2015) and No. 333-215800 (effective February 10,
2017).
Series B Convertible Preferred Stock
On March 29, 2017,
we filed the Certificate of Designations, Preferences and Rights of
the Series B Convertible Preferred Stock (the
“Series B Certificate of Designation”) with the
Utah Division. In this section of the prospectus, we summarize the
terms of the Series B Preferred contained in the Series B
Certificate of Designation. Our summary below is qualified in its
entirety by the full terms contained in the Series B
Certificate of Designation, a copy of which has been incorporated
by reference from our filings with the SEC as an exhibit to the
registration statement of which this prospectus forms a part.
Following the designation of the Series B Preferred, we conducted a
private placement of the Series B Preferred. We closed the offering
having sold 1,559,000 shares to accredited investors. We will not
issue any shares of Series B Preferred in the future. As of
May 17, 2021, there were 1,359,000 shares of Series B
Preferred issued and outstanding, convertible into 1,359,000 shares
of common stock.
Voting. The Series B Preferred is
also subject to the Voting Cutback and votes on an as-converted
basis, one vote for each share of common stock issuable upon
conversion of such Series B Preferred held by such holder;
provided, however, that no holder of Series B
Preferred may cast votes equivalent to the number of shares of
common stock issuable upon conversion of Series B Preferred held by
such holder that exceeds the quotient of (x) the aggregate
purchase price paid by such holder of Series B Preferred for
its Series B Preferred, divided by (y) the greater of (i)
$2.50 and (ii) the closing bid price of the common stock on the
trading day immediately prior to the date of issuance of such
holder’s Series B Preferred.
Certain Amendments and
Changes. Without the consent of holders of at least a
majority of the then outstanding shares of Series B Preferred,
we may not: (i) alter or change adversely the powers, preferences
or rights given to the Series B Preferred or alter or amend
the Series B Certificate of Designation, (ii) authorize or
create any class of stock ranking as to dividends, redemption or
distribution of assets upon a liquidation senior to, or
otherwise pari
passu with, the Series B Preferred, (iii) amend
the Articles of Incorporation in any manner that adversely affects
any rights of the holders of the Series B Preferred, or (iv)
enter into any agreement with respect to any of the foregoing. In
addition, without the consent of all of the holders of the
Series B Preferred, we may not increase the number of
authorized shares of Series B Preferred.
Dividends. Prior to conversion, each
share of Series B Preferred carries an annual dividend, or
Series B Dividend, at a rate of 8% of $2.50, plus all accrued
but unpaid dividends thereon. At our discretion, we may pay
Series B Dividends in cash or in shares of common stock. If
the Board declares a dividend payable upon our common stock,
whether in cash, in kind or in other securities or property, the
holders of the outstanding shares of Series B Preferred are
entitled to the amount of such dividend that otherwise would be
payable in respect of the number of shares of common stock into
which their shares of Series B Preferred could be
converted.
Liquidation. The Series B
Preferred ranks senior to the common stock, and is subject to the
preferences of the Series A Preferred, with respect to
distributions upon a deemed dissolution, liquidation or winding-up.
The Series B Preferred per share liquidation preference is
equal to $2.50 plus all accrued but unpaid dividends
thereon.
Conversion. Each share of Series B
Preferred is convertible into common stock at a conversion price of
$2.50 per share, subject to a Beneficial Ownership Limitation, as
described below.
Beneficial Ownership
Limitation. Unless a holder elected at the time of
issuance of the Series B Preferred to the holder that it shall
not apply, the Series B Certificate of Designation provides
that we shall not effect any conversion of any shares of
Series B Preferred, and a holder shall not have the right to
convert any portion of the Series B Preferred, to the extent
that, after giving effect to such conversion the holder (together
with the 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 the Beneficial
Ownership Limitation.
Forced Conversion. We have the
right to convert one-half of the outstanding Series B
Preferred into common stock on a 1:1 basis if certain conditions
have been met, including: (1) the common stock has a daily VWAP as
defined in the Series B Certificate of Designation of at least
$7.50 per share on each of the 40 trading days prior to the
conversion date; and (2) we are listed in good compliance on the
Nasdaq Capital Market (or another national exchange) at the time of
conversion. We will have the right to convert the remaining
outstanding Series B Preferred into common stock on a 1:1
basis if: (1) the common stock has a VWAP price of at least $10.00
per share on each of the 40 trading days prior to the date in
question; (2) we are listed in good compliance on the Nasdaq
Capital Market (or another national exchange) at the time of
conversion and (3) certain other conditions have been
met.
Redemption. Upon certain
“Triggering Events” as defined in Section 9 of the
Series B Certificate of Designation, which generally refer to
a failure to meet our obligations to the holders of the
Series B Preferred under their registration rights agreement
with us or to comply with material provisions of the Series B
Certificate of Designation, including without limitation, the
conversion, dividend, and liquidation rights of the Series B
Preferred, a holder of Series B Preferred, at the holder’s
sole option, may require us to redeem all of such holder’s
shares of Series B Preferred. Under certain of the Triggering
Events, the holder may require, again at the holder’s sole
option, that the redemption price be paid in cash or in shares of
common stock. If the holder elects to receive the redemption price
paid in shares of common stock, then the redemption price is to be
a number of shares of common stock equal to the applicable
redemption amount divided by 75% of the average of the VWAP of the
common stock for the 10 trading days immediately prior to the date
of the holder’s election. In the alternative, the holder may
elect to require that we increase the dividend rate on all of the
holder’s outstanding Series B Preferred to 18% per annum
thereafter. If a holder elects redemption and we fail to pay in
full the redemption price on the date such amount is due (whether
in cash or shares of common stock as elected by the shareholder),
we will be required to pay interest on the redemption amount at a
rate equal to the lesser of 18% per annum or the maximum rate
permitted by applicable law, accruing daily from such date until
the redemption amount, plus all such interest thereon, is paid in
full.
We also granted to
the investors of the Series B Preferred registration rights
pursuant to a registration rights agreement, obligating us to
register all shares of common stock issuable upon conversion of the
Series B Preferred or in payment of Series B Dividends, as
well as common stock underlying the exercise of certain warrants
issued these investors. We filed a registration statement pursuant
to our agreement with these investors (Registration Statement No.
333-217322, effective April 14, 2017).
Anti-takeover Effects of our Amended and Restated Articles of
Incorporation and Bylaws
As described above,
our Articles of Incorporation provide that our Board may issue
preferred stock with such designation, rights and preferences as
may be determined from time to time by our Board. Our preferred
stock could be issued quickly and utilized, under certain
circumstances, as a method of discouraging, delaying or preventing
a change in control of the Company or making removal of management
more difficult.
Indemnification
Both our Articles
of Incorporation and our Bylaws provide for indemnification of our
directors and officers to the fullest extent permitted by Utah
law.
Listing
Our common stock is
listed on the Nasdaq Capital Market under the symbol “DYNT.”
Transfer Agent and Registrar
The transfer agent
and registrar for our common stock is Issuer Direct Corporation,
with a mailing address of 1981 East Murray Holladay Road, Suite
100, Salt Lake City, Utah 84117, Telephone (801)
272-9294.
DESCRIPTION OF WARRANTS
General
We may issue
warrants to purchase shares of common stock, preferred stock and/or
debt securities. The warrants may be issued independently or
together with shares of common stock or preferred stock offered by
this prospectus and may be attached to or separate from those
shares of common stock or preferred stock, as the case may
be.
While the terms we
have summarized below will generally apply to any future warrants
we may offer under this prospectus, we will describe the particular
terms of any warrants that we may offer in more detail in the
applicable prospectus supplement. The terms of any warrants we
offer under a prospectus supplement may differ from the terms we
describe below. We have filed forms of the warrant agreements and
forms of warrant certificates containing the terms of the warrants
that may be offered as exhibits to the registration statement of
which this prospectus is a part. We will file as exhibits to the
registration statement of which this prospectus is a part, or will
incorporate by reference from reports that we file with the SEC,
the form of warrant and/or the warrant agreement and warrant
certificate, as applicable, that describe the terms of the
particular series of warrants we are offering, and any supplemental
agreements, before the issuance of such warrants. The following
summaries of material terms and provisions of the warrants are
subject to, and qualified in their entirety by reference to, all
the provisions of the form of warrant and/or the warrant agreement
and warrant certificate, as applicable, and any supplemental
agreements applicable to a particular series of warrants that we
may offer under this prospectus. We urge you to read the applicable
prospectus supplement related to the particular series of warrants
that we may offer under this prospectus, and the complete form of
warrant and/or the warrant agreement and warrant certificate, as
applicable, and any supplemental agreements, that contain the terms
of the warrants.
We may also issue
warrants under a warrant agreement with a warrant agent to be
selected by us. Each warrant agent will act solely as our agent
under the applicable warrant agreement and will not assume any
obligation or relationship of agency or trust with any holder of
any warrant. A single bank or trust company may act as warrant
agent for more than one issue of warrants. A warrant agent will
have no duty or responsibility in case of any default by us under
the applicable warrant agreement or warrant, including any duty or
responsibility to initiate any proceedings at law or otherwise, or
to make any demand upon us. Any holder of a warrant may, without
the consent of the related warrant agent or the holder of any other
warrant, enforce by appropriate legal action its right to exercise,
and receive the common stock purchasable upon exercise of, its
warrants.
General
We will set forth
in the applicable prospectus supplement the terms of the warrants
in respect of which this prospectus is being delivered, including,
when applicable, the following:
●
the title of the
warrants;
●
the aggregate
number of the warrants;
●
the price or prices
at which the warrants will be issued;
●
in the case of
warrants to purchase common stock or preferred stock, the number of
shares of common stock or preferred stock, as the case may be,
purchasable upon the exercise of one warrant and the price at which
these shares may be purchased upon such exercise;
●
the date, if any,
on and after which the warrants and the related common stock will
be separately transferable;
●
the price at which
each share of common stock purchasable upon exercise of the
warrants may be purchased;
●
the date on which
the right to exercise the warrants will commence and the date on
which such right will expire;
●
the minimum or
maximum amount of the warrants that may be exercised at any one
time;
●
any information
with respect to book-entry procedures;
●
the effect of any
merger, consolidation, sale, or other disposition of our business
on the warrant agreement and the warrants;
●
any other terms of
the warrants, including terms, procedures, and limitations relating
to the transferability, exchange, and exercise of such
warrants;
●
the terms of any
rights to redeem or call, or accelerate the expiration of, the
warrants;
●
the material U.S.
federal income tax consequences of holding or exercising the
warrants;
●
in the case of
warrants to purchase debt securities, the principal amount of debt
securities purchasable upon exercise of one warrant and the price
at, and currency in which, this principal amount of debt securities
may be purchased upon such exercise; and
●
any other specific
terms, preferences, rights, or limitations of, or restrictions on,
the warrants.
Unless specified in
an applicable prospectus supplement, warrants will be in registered
form only.
A holder of warrant
certificates may exchange them for new certificates of different
denominations, present them for registration of transfer, and
exercise them at the corporate trust office of the warrant agent or
any other office indicated in the applicable prospectus supplement.
Until any warrants are exercised, except to the extent set forth
under the heading “Warrant Adjustments” below, holders of the warrants will
not have any rights of holders of the underlying securities,
including in the case of warrants to purchase debt securities, the
right to receive payments of principal of, or premium, if any, or
interest on, the debt securities purchasable upon exercise or to
enforce covenants in the applicable indenture; or in the case of
warrants to purchase common stock or preferred stock, the right to
receive dividends, if any, or payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if
any.
Exercise of Warrants
Each warrant will
entitle the holder to purchase the securities that we specify in
the applicable prospectus supplement at the exercise price that we
describe in the applicable prospectus supplement. The warrants may
be exercised as set forth in the prospectus supplement relating to
the warrants offered. Unless we otherwise specify in the applicable
prospectus supplement, warrants may be exercised at any time up to
the close of business on the expiration date set forth in the
prospectus supplement relating to the warrants offered thereby.
After the close of business on the expiration date, unexercised
warrants will become void.
Upon receipt of
payment and the warrant or warrant certificate, as applicable,
properly completed and duly executed at the corporate trust office
of the warrant agent, if any, or any other office, including ours,
indicated in the prospectus supplement, we will, as soon as
practicable, issue and deliver the securities purchasable upon such
exercise. If less than all of the warrants (or the warrants
represented by such warrant certificate) are exercised, a new
warrant or a new warrant certificate, as applicable, will be issued
for the remaining warrants.
Governing Law
Unless
we otherwise specify in the applicable prospectus supplement, the
warrants and any warrant agreements will be governed by and
construed in accordance with the laws of the State of
Utah.
Amendments and Supplements to the Warrant Agreements
We may amend or
supplement a warrant agreement without the consent of the holders
of the applicable warrants to cure ambiguities in the warrant
agreement, to cure or correct a defective provision in the warrant
agreement, or to provide for other matters under the warrant
agreement that we and the warrant agent deem necessary or
desirable, so long as, in each case, such amendments or supplements
do not materially and adversely affect the interests of the holders
of the warrants.
Warrant Adjustments
Unless the
applicable prospectus supplement states otherwise, the exercise
price of, and the number of securities covered by a warrant will be
adjusted proportionately if we subdivide or combine our common
stock. In addition, unless the prospectus supplement states
otherwise, if we, without payment:
●
issue capital stock
or other securities convertible into or exchangeable for common
stock, or any rights to subscribe for, purchase, or otherwise
acquire common stock, as a dividend or distribution to holders of
our common stock;
●
pay any cash to
holders of our common stock other than a cash dividend paid out of
our current or retained earnings;
●
issue any evidence
of our indebtedness or rights to subscribe for or purchase our
indebtedness to holders of our common stock; or
●
issue common stock
or additional stock or other securities or property to holders of
our common stock by way of spinoff, split-up, reclassification,
combination of shares, or similar corporate
rearrangement,
then the holders of
warrants will be entitled to receive upon exercise of the warrants,
in addition to the shares of common stock or securities otherwise
receivable upon exercise of the warrants and without paying any
additional consideration, the amount of stock and other securities
and property such holders would have been entitled to receive had
they held the common stock issuable under the warrants on the dates
on which holders of those securities received or became entitled to
receive such additional stock and other securities and
property.
Except as stated
above, the exercise price and number of securities covered by a
warrant, and the amounts of other securities or property to be
received, if any, upon exercise of those warrants, will not be
adjusted or provided for if we issue those securities or any
securities convertible into or exchangeable for those securities,
or securities carrying the right to purchase those securities or
securities convertible into or exchangeable for those
securities.
Holders of warrants
may have additional rights under the following
circumstances:
●
certain
reclassifications, capital reorganizations, or changes of the
common stock;
●
certain share
exchanges, mergers, or similar transactions involving us and which
result in changes of the common stock; or
●
certain sales or
dispositions to another entity of all or substantially all of our
property and assets.
If one of the above
transactions occurs and holders of our common stock are entitled to
receive stock, securities, or other property with respect to or in
exchange for their shares of common stock, the holders of the
warrants then outstanding, as applicable, will be entitled to
receive upon exercise of their warrants the kind and amount of
shares of stock and other securities or property that they would
have received upon the applicable transaction if they had exercised
their warrants immediately before the transaction.
Outstanding Warrants
As of May 17, 2021,
we had outstanding:
●
warrants for the
purchase of 3,000,000 shares of common stock with expiration dates
ranging from June 30, 2021 to December 28, 2022, issued to the
original purchasers of the Series A Preferred, divided equally into
“A Warrants” and “B Warrants” – each
A Warrant entitles the holder thereof to purchase one share of
common stock for cash at an exercise price of $2.75 per share,
subject to customary anti-dilution adjustments, and each B Warrant
entitles the holder thereof to purchase one share of common stock
at $2.75 per share;
●
warrants for the
purchase of 2,338,500 shares of common stock for cash at an
exercise price of $2.75 per share with an expiration date of April
3, 2023, issued to the original purchasers of the Series B
Preferred; and
●
warrants for the
purchase of 1,400,000 shares of common stock for cash at an
exercise price of $2.75 per share, with an expiration date of
October 2, 2023, issued to the original purchasers of the Series C
Preferred.
DESCRIPTION OF DEBT SECURITIES
We may issue debt
securities from time to time, in one or more series, as either
senior or subordinated debt or as senior or subordinated
convertible debt. While the terms we have summarized below will
apply generally to any debt securities that we may offer under this
prospectus, we will describe the particular terms of any debt
securities that we may offer in more detail in the applicable
prospectus supplement. The terms of any debt securities offered
under a prospectus supplement may differ from the terms described
below. Unless the context requires otherwise, whenever we refer to
the indenture, we also are referring to any supplemental indentures
that specify the terms of a particular series of debt
securities.
We will issue the
debt securities under an indenture that we will enter into with the
trustee named in the indenture. The indenture will be qualified
under the Trust Indenture Act of 1939, as amended, or the Trust
Indenture Act. Indentures and forms of debt securities containing
the terms of the debt securities being offered will be filed as
exhibits to the registration statement of which this prospectus is
a part or will be incorporated by reference from reports that we
file with the SEC.
The following
summary of material provisions of the debt securities and the
indenture is subject to, and qualified in its entirety by reference
to, all of the provisions of the indenture applicable to a
particular series of debt securities. We urge you to read the
applicable prospectus supplements and any related free writing
prospectuses related to the debt securities that we may offer under
this prospectus, as well as the complete indenture that contains
the terms of the debt securities.
General
The indenture does
not limit the amount of debt securities that we may issue. It
provides that we may issue debt securities up to the principal
amount that we may authorize and may be in any currency or currency
unit that we may designate. Except for the limitations on
consolidation, merger and sale of all or substantially all of our
assets contained in the indenture, the terms of the indenture do
not contain any covenants or other provisions designed to give
holders of any debt securities protection against changes in our
operations, financial condition or transactions involving
us.
We may issue the
debt securities issued under the indenture as “discount securities,” which means they may be sold at a
discount below their stated principal amount. These debt
securities, as well as other debt securities that are not issued at
a discount, may be issued with “original issue discount,” or OID, for U.S. federal income tax
purposes because of interest payment and other characteristics or
terms of the debt securities. Material U.S. federal income tax
considerations applicable to debt securities issued with OID will
be described in more detail in any applicable prospectus
supplement.
We will describe in
the applicable prospectus supplement the terms of the series of
debt securities being offered, including:
●
the title of the
series of debt securities;
●
any limit upon the
aggregate principal amount that may be issued;
●
the maturity date
or dates;
●
the form of the
debt securities of the series;
●
the applicability
of any guarantees;
●
whether or not the
debt securities will be secured or unsecured, and the terms of any
secured debt;
●
whether the debt
securities rank as senior debt, senior subordinated debt,
subordinated debt or any combination thereof, and the terms of any
subordination;
●
if the price
(expressed as a percentage of the aggregate principal amount
thereof) at which such debt securities will be issued is a price
other than the principal amount thereof, the portion of the
principal amount thereof payable upon declaration of acceleration
of the maturity thereof, or if applicable, the portion of the
principal amount of such debt securities that is convertible into
another security or the method by which any such portion shall be
determined;
●
the interest rate
or rates, which may be fixed or variable, or the method for
determining the rate and the date interest will begin to accrue,
the dates interest will be payable and the regular record dates for
interest payment dates or the method for determining such
dates;
●
our right, if any,
to defer payment of interest and the maximum length of any such
deferral period;
●
if applicable, the
date or dates after which, or the period or periods during which,
and the price or prices at which, we may, at our option, redeem the
series of debt securities pursuant to any optional or provisional
redemption provisions and the terms of those redemption
provisions;
●
the date or dates,
if any, on which, and the price or prices at which we are
obligated, pursuant to any mandatory sinking fund or analogous fund
provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of
debt securities and the currency or currency unit in which the debt
securities are payable;
●
the denominations
in which we will issue the series of debt securities, if other than
denominations of $1,000 and any integral multiple
thereof;
●
any and all terms,
if applicable, relating to any auction or remarketing of the debt
securities of that series and any security for our obligations with
respect to such debt securities and any other terms which may be
advisable in connection with the marketing of debt securities of
that series;
●
whether the debt
securities of the series shall be issued in whole or in part in the
form of a global security or securities;
●
the terms and
conditions, if any, upon which such global security or securities
may be exchanged in whole or in part for other individual
securities; and the depositary for such global security or
securities;
●
if applicable, the
provisions relating to conversion or exchange of any debt
securities of the series and the terms and conditions upon which
such debt securities will be so convertible or exchangeable,
including the conversion or exchange price, as applicable, or how
it will be calculated and may be adjusted, any mandatory or
optional (at our option or the holders’ option) conversion or exchange
features, the applicable conversion or exchange period and the
manner of settlement for any conversion or exchange;
●
if other than the
full principal amount thereof, the portion of the principal amount
of debt securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
●
additions to or
changes in the covenants applicable to the particular debt
securities being issued, including, among others, the
consolidation, merger or sale covenant;
●
additions to or
changes in or deletions of the provisions relating to covenant
defeasance and legal defeasance;
●
additions to or
changes in the provisions relating to satisfaction and discharge of
the indenture;
●
additions to or
changes in the provisions relating to the modification of the
indenture both with and without the consent of holders of debt
securities issued under the indenture;
●
the currency of
payment of debt securities if other than U.S. dollars and the
manner of determining the equivalent amount in U.S.
dollars;
●
whether interest
will be payable in cash or additional debt securities at our or the
holders’ option and the
terms and conditions upon which the election may be
made;
●
the terms and
conditions, if any, upon which we will pay amounts in addition to
the stated interest, premium, if any and principal amounts of the
debt securities of the series to any holder that is not a
“United States
person” for federal tax
purposes;
●
any restrictions on
transfer, sale or assignment of the debt securities of the series;
and
●
any other specific
terms, preferences, rights or limitations of, or restrictions on,
the debt securities, any other additions or changes in the
provisions of the indenture, and any terms that may be required by
us or advisable under applicable laws or regulations.
Conversion or Exchange Rights
We will set forth
in the applicable prospectus supplement the terms on which a series
of debt securities may be convertible into or exchangeable for our
common stock or our other securities. We will include provisions as
to settlement upon conversion or exchange and whether conversion or
exchange is mandatory, at the option of the holder or at our
option. We may include provisions pursuant to which the number of
shares of our common stock or our other securities that the holders
of the series of debt securities receive would be subject to
adjustment.
Consolidation, Merger or Sale
Unless we provide
otherwise in the prospectus supplement applicable to a particular
series of debt securities, the indenture will not contain any
covenant that restricts our ability to merge or consolidate, or
sell, convey, transfer or otherwise dispose of our assets as an
entirety or substantially as an entirety. However, any successor to
or acquirer of such assets (other than a subsidiary of ours) must
assume all of our obligations under the indenture or the debt
securities, as appropriate.
Events of Default under the Indenture
Unless we provide
otherwise in the prospectus supplement applicable to a particular
series of debt securities, the following are events of default
under the indenture with respect to any series of debt securities
that we may issue:
●
if we fail to pay
any installment of interest on any series of debt securities, as
and when the same shall become due and payable, and such default
continues for a period of 90 days; provided, however, that a valid extension of an
interest payment period by us in accordance with the terms of any
indenture supplemental thereto shall not constitute a default in
the payment of interest for this purpose;
●
if we fail to pay
the principal of, or premium, if any, on any series of debt
securities as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or otherwise,
or in any payment required by any sinking or analogous fund
established with respect to such series; provided, however, that a valid extension of the
maturity of such debt securities in accordance with the terms of
any indenture supplemental thereto shall not constitute a default
in the payment of principal or premium, if any;
●
if we fail to
observe or perform any other covenant or agreement contained in the
debt securities or the indenture, other than a covenant
specifically relating to another series of debt securities, and our
failure continues for 90 days after we receive written notice of
such failure, requiring the same to be remedied and stating that
such is a notice of default thereunder, from the trustee or holders
of at least 25% in aggregate principal amount of the outstanding
debt securities of the applicable series; and
●
if specified events
of bankruptcy, insolvency or reorganization occur.
If an event of
default with respect to debt securities of any series occurs and is
continuing, other than an event of default specified in the last
bullet point above, the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding debt securities of
that series, by notice to us in writing, and to the trustee if
notice is given by such holders, may declare the unpaid principal
of, premium, if any, and accrued interest, if any, due and payable
immediately. If an event of default specified in the last bullet
point above occurs with respect to us, the principal amount of and
accrued interest, if any, of each issue of debt securities then
outstanding shall be due and payable without any notice or other
action on the part of the trustee or any holder.
The holders of a
majority in principal amount of the outstanding debt securities of
an affected series may waive any default or event of default with
respect to the series and its consequences, except defaults or
events of default regarding payment of principal, premium, if any,
or interest, unless we have cured the default or event of default
in accordance with the indenture. Any waiver shall cure the default
or event of default.
Subject to the
terms of the indenture, if an event of default under an indenture
shall occur and be continuing, the trustee will be under no
obligation to exercise any of its rights or powers under such
indenture at the request or direction of any of the holders of the
applicable series of debt securities, unless such holders have
offered the trustee reasonable indemnity. The holders of a majority
in principal amount of the outstanding debt securities of any
series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee,
or exercising any trust or power conferred on the trustee, with
respect to the debt securities of that series, provided that:
●
the direction so
given by the holder is not in conflict with any law or the
applicable indenture; and
●
subject to its
duties under the Trust Indenture Act, the trustee need not take any
action that might involve it in personal liability or might be
unduly prejudicial to the holders not involved in the
proceeding.
A holder of the
debt securities of any series will have the right to institute a
proceeding under the indenture or to appoint a receiver or trustee,
or to seek other remedies only if:
●
the holder has
given written notice to the trustee of a continuing event of
default with respect to that series;
●
the holders of at
least 25% in aggregate principal amount of the outstanding debt
securities of that series have made written request;
●
such holders have
offered to the trustee indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred by the trustee in
compliance with the request; and
●
the trustee does
not institute the proceeding, and does not receive from the holders
of a majority in aggregate principal amount of the outstanding debt
securities of that series other conflicting directions within 90
days after the notice, request and offer.
These limitations
do not apply to a suit instituted by a holder of debt securities if
we default in the payment of the principal, premium, if any, or
interest on, the debt securities.
We will
periodically file statements with the trustee regarding our
compliance with specified covenants in the indenture.
Modification of Indenture; Waiver
We and the trustee
may change an indenture without the consent of any holders with
respect to specific matters:
●
to cure any
ambiguity, defect or inconsistency in the indenture or in the debt
securities of any series;
●
to comply with the
provisions described above under “Description of Debt
Securities—Consolidation,
Merger or Sale;”
●
to provide for
uncertificated debt securities in addition to or in place of
certificated debt securities;
●
to add to our
covenants, restrictions, conditions or provisions such new
covenants, restrictions, conditions or provisions for the benefit
of the holders of all or any series of debt securities, to make the
occurrence, or the occurrence and the continuance, of a default in
any such additional covenants, restrictions, conditions or
provisions an event of default or to surrender any right or power
conferred upon us in the indenture;
●
to add to, delete
from or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication and
delivery of debt securities, as set forth in the
indenture;
●
to make any change
that does not adversely affect the interests of any holder of debt
securities of any series in any material respect;
●
to provide for the
issuance of and establish the form and terms and conditions of the
debt securities of any series as provided above under “Description of Debt
Securities—General” to establish the form of any
certifications required to be furnished pursuant to the terms of
the indenture or any series of debt securities, or to add to the
rights of the holders of any series of debt
securities;
●
to evidence and
provide for the acceptance of appointment under any indenture by a
successor trustee; or
●
to comply with any
requirements of the SEC in connection with the qualification of any
indenture under the Trust Indenture Act.
In addition, under
the indenture, the rights of holders of a series of debt securities
may be changed by us and the trustee with the written consent of
the holders of at least a majority in aggregate principal amount of
the outstanding debt securities of each series that is affected.
However, unless we provide otherwise in the prospectus supplement
applicable to a particular series of debt securities, we and the
trustee may make the following changes only with the consent of
each holder of any outstanding debt securities
affected:
●
extending the fixed
maturity of any debt securities of any series;
●
reducing the
principal amount, reducing the rate of or extending the time of
payment of interest, or reducing any premium payable upon the
redemption of any series of any debt securities; or
●
reducing the
percentage of debt securities, the holders of which are required to
consent to any amendment, supplement, modification or
waiver.
Discharge
Each indenture will
provide that we can elect to be discharged from our obligations
with respect to one or more series of debt securities, except for
specified obligations, including obligations to:
●
register the
transfer or exchange of debt securities of the series;
●
replace stolen,
lost or mutilated debt securities of the series;
●
pay principal of
and premium and interest on any debt securities of the
series;
●
maintain paying
agencies;
●
hold monies for
payment in trust;
●
recover excess
money held by the trustee;
●
compensate and
indemnify the trustee; and
●
appoint any
successor trustee.
In order to
exercise our rights to be discharged, we must deposit with the
trustee money or government obligations sufficient to pay all the
principal of, any premium, if any, and interest on, the debt
securities of the series on the dates payments are
due.
Form, Exchange and Transfer
We will issue the
debt securities of each series only in fully registered form
without coupons and, unless we provide otherwise in the applicable
prospectus supplement, in denominations of $1,000 and any integral
multiple thereof. The indenture provides that we may issue debt
securities of a series in temporary or permanent global form and as
book-entry securities that will be deposited with, or on behalf of,
The Depository Trust Company, or DTC, or another depositary named
by us and identified in the applicable prospectus supplement with
respect to that series. To the extent the debt securities of a
series are issued in global form and as book-entry, a description
of terms relating to any book entry securities will be set forth in
the applicable prospectus supplement.
At the option of
the holder, subject to the terms of the indenture and the
limitations applicable to global securities described in the
applicable prospectus supplement, the holder of the debt securities
of any series can exchange the debt securities for other debt
securities of the same series, in any authorized denomination and
of like tenor and aggregate principal amount.
Subject to the
terms of the indenture and the limitations applicable to global
securities set forth in the applicable prospectus supplement,
holders of the debt securities may present the debt securities for
exchange or for registration of transfer, duly endorsed or with the
form of transfer endorsed thereon duly executed if so required by
us or the security registrar, at the office of the security
registrar or at the office of any transfer agent designated by us
for this purpose. Unless otherwise provided in the debt securities
that the holder presents for transfer or exchange, we will impose
no service charge for any registration of transfer or exchange, but
we may require payment of any taxes or other governmental
charges.
We will name in the
applicable prospectus supplement the security registrar, and any
transfer agent in addition to the security registrar, that we
initially designate for any debt securities. We may at any time
designate additional transfer agents or rescind the designation of
any transfer agent or approve a change in the office through which
any transfer agent acts, except that we will be required to
maintain a transfer agent in each place of payment for the debt
securities of each series.
If we elect to
redeem the debt securities of any series, we will not be required
to:
●
issue, register the
transfer of, or exchange any debt securities of that series during
a period beginning at the opening of business 15 days before the
day of mailing of a notice of redemption of any debt securities
that may be selected for redemption and ending at the close of
business on the day of the mailing; or
●
register the
transfer of or exchange any debt securities so selected for
redemption, in whole or in part, except the unredeemed portion of
any debt securities we are redeeming in part.
Information Concerning the Trustee
The trustee, other
than during the occurrence and continuance of an event of default
under an indenture, undertakes to perform only those duties as are
specifically set forth in the applicable indenture. Upon an event
of default under an indenture, the trustee must use the same degree
of care as a prudent person would exercise or use in the conduct of
his or her own affairs. Subject to this provision, the trustee is
under no obligation to exercise any of the powers given it by the
indenture at the request of any holder of debt securities unless it
is offered reasonable security and indemnity against the costs,
expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise
indicate in the applicable prospectus supplement, we will make
payment of the interest on any debt securities on any interest
payment date to the person in whose name the debt securities, or
one or more predecessor securities, are registered at the close of
business on the regular record date for the interest.
We will pay
principal of and any premium and interest on the debt securities of
a particular Series At the office of the paying agents designated
by us, except that unless we otherwise indicate in the applicable
prospectus supplement, we will make interest payments by check that
we will mail to the holder or by wire transfer to certain holders.
Unless we otherwise indicate in the applicable prospectus
supplement, we will designate the corporate trust office of the
trustee as our sole paying agent for payments with respect to debt
securities of each series. We will name in the applicable
prospectus supplement any other paying agents that we initially
designate for the debt securities of a particular series. We will
maintain a paying agent in each place of payment for the debt
securities of a particular series.
All money we pay to
a paying agent or the trustee for the payment of the principal of
or any premium or interest on any debt securities that remains
unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to us, and the
holder of the debt security thereafter may look only to us for
payment thereof.
Governing Law
The indenture and
the debt securities will be governed by and construed in accordance
with the internal laws of the State of New York, except to the
extent that the Trust Indenture Act is applicable.
DESCRIPTION OF UNITS
The following
description, together with the additional information we include in
any applicable prospectus supplement, summarizes the material terms
and provisions of the units that we may offer under this
prospectus. Units may be offered independently or together with the
securities and warrants offered by any prospectus supplement, and
may be attached to or separate from those securities. While the
terms we have summarized below will generally apply to any future
units that we may offer under this prospectus, we will describe the
particular terms of any series of units that we may offer in more
detail in the applicable prospectus supplement. The terms of any
units offered under a prospectus supplement may differ from the
terms described below.
We will incorporate
by reference into the registration statement of which this
prospectus forms a part the form of unit agreement, including a
form of unit certificate, if any that describes the terms of the
series of units we are offering before the issuance of the related
series of units. The following summaries of material provisions of
the units and the unit agreements are subject to, and qualified in
their entirety by reference to, all the provisions of the unit
agreement applicable to a particular series of units. We urge you
to read the applicable prospectus supplements related to the units
that we sell under this prospectus, as well as the complete unit
agreements that contain the terms of the units.
General
We may issue units
consisting of securities and warrants. Each unit will be issued so
that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the
rights and obligations of a holder of each included security. The
unit agreement under which a unit is issued may provide that the
securities included in the unit may not be held or transferred
separately, at any time, or at any time before a specified
date.
We will describe in
the applicable prospectus supplement the terms of the series of
units, including the following:
●
the designation and
terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may
be held or transferred separately;
●
any provisions of
the governing unit agreement that differ from those described
below; and
●
any provisions for
the issuance, payment, settlement, transfer, or exchange of the
units or of the securities comprising the units.
The provisions
described in this section, as well as those described under
“Description of Common
Stock,”
“Description of Preferred Stock,” “Description of
Debt Securities,” and “Description of Warrants,” will apply to each unit and to any
common stock, preferred stock, debt securities, or warrants
included in each unit, respectively.
Issuance in Series
We may issue units
in such amounts and in such numerous distinct series as we
determine.
Enforceability of Rights by Holders of Units
Each unit agent, if
any, will act solely as our agent under the applicable unit
agreement and will not assume any obligation or relationship of
agency or trust with any holder of any unit. A single bank or trust
company may act as unit agent for more than one series of units. A
unit agent will have no duty or responsibility in case of any
default by us under the applicable unit agreement or unit,
including any duty or responsibility to initiate any proceedings at
law or otherwise, or to make any demand upon us. Any holder of a
unit, without the consent of the related unit agent or the holder
of any other unit, may enforce by appropriate legal action its
rights as holder under any security included in the
unit.
Title
We, the unit agent,
if any, and any of their agents may treat the registered holder of
any unit certificate as an absolute owner of the units evidenced by
that certificate for any purposes and as the person entitled to
exercise the rights attaching to the units so requested, despite
any notice to the contrary.
PLAN OF DISTRIBUTION
We may sell
securities to one or more underwriters or dealers for public
offering and sale by them, or we may sell the securities to
investors directly or through agents. The applicable prospectus
supplement will set forth the terms of the particular offering and
the method of distribution and will identify any firms acting as
underwriters, dealers or agents in connection with the offering,
including:
●
the name or names
of any underwriters;
●
the respective
amounts underwritten;
●
the nature of any
material relationship between us and any underwriter;
●
the nature of the
obligation of the underwriter(s) to take the
securities;
●
the purchase price
of the securities;
●
any underwriting
discounts and other items constituting underwriters’ compensation;
●
any initial public
offering price and the net proceeds we will receive from such
sale;
●
any discounts or
concessions allowed or reallowed or paid to dealers;
and
●
any securities
exchange or market on which the securities offered in the
prospectus supplement may be listed.
We may distribute
our securities from time to time in one or more transactions at a
fixed price or prices, which may be changed, or at prices
determined as the prospectus supplement specifies, including in
“at-the-market”
offerings.
Any underwriting
discounts or other compensation which we pay to underwriters or
agents in connection with the offering of our securities, and any
discounts, concessions or commissions which underwriters allow to
dealers, will be set forth in the prospectus supplement.
Underwriters may sell our securities to or through dealers, and
such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and commissions
from the purchasers for whom they may act as agents. Underwriters,
dealers and agents that participate in the distribution of our
securities may be deemed to be underwriters under the Securities
Act and any discounts or commissions they receive from us and any
profit on the resale of our securities they realize may be deemed
to be underwriting discounts and commissions under the Securities
Act. Any such underwriter or agent will be identified, and any such
compensation received from us, will be described in the applicable
supplement to this prospectus. Unless otherwise set forth in the
supplement to this prospectus relating thereto, the obligations of
the underwriters or agents to purchase our securities will be
subject to conditions precedent and the underwriters will be
obligated to purchase all our offered securities if any are
purchased. The public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed
from time to time.
Any common stock
sold pursuant to this prospectus and applicable prospectus
supplement will be approved for trading, upon notice of issuance,
on the Nasdaq Capital Market.
Underwriters and
their controlling persons, dealers and agents may be entitled,
under agreements entered into with us, to indemnification against
and contribution toward specific civil liabilities, including
liabilities under the Securities Act.
The securities
being offered under this prospectus, other than our common stock,
will be new issues of securities with no established trading market
unless otherwise specified in the applicable prospectus supplement.
It has not presently been established whether the underwriters, if
any, as identified in a prospectus supplement, will make a market
in the securities. If the underwriters make a market in the
securities, the market making may be discontinued at any time
without notice. We cannot provide any assurance as to the liquidity
of the trading market for the securities.
An underwriter may
engage in over-allotment, stabilizing transactions, short covering
transactions and penalty bids in accordance with securities laws.
Over-allotment involves sales in excess of the offering size, which
creates a short position. Stabilizing transactions permit bidders
to purchase the underlying security so long as the stabilizing bids
do not exceed a specified maximum. Short covering transactions
involve purchases of the securities in the open market after the
distribution is completed to cover short positions. Penalty bids
permit the underwriters to reclaim a selling concession from a
dealer when the securities originally sold by the dealer are
purchased in a covering transaction to cover short positions. Those
activities may cause the price of the securities to be higher than
it would otherwise be. The underwriters may engage in these
activities on any exchange or other market in which the securities
may be traded. If commenced, the underwriters may discontinue these
activities at any time.
Certain of the
underwriters and their affiliates may be customers of, engage in
transactions with, and perform services for, us and our
subsidiaries in the ordinary course of business.
LEGAL MATTERS
The validity of the
securities offered hereby will be passed upon by Dentons Durham
Jones Pinegar P.C., Salt Lake City, Utah.
EXPERTS
Our consolidated
financial statements as of June 30, 2020 and June 30, 2019 and for
each of the years in the two-year period ended June 30, 2020, have
been audited by Tanner LLC as set forth in their reports thereon
and incorporated herein by reference. Such consolidated financial
statements have been incorporated by reference herein in reliance
upon the report of Tanner LLC, and upon the authority of said firm
as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual,
quarterly and current reports, proxy statements and other
information with the SEC. Through our website at www.dynatronics.com,
you may access, free of charge, our filings, as soon as reasonably
practical after we electronically file them with or furnish them to
the SEC. The information contained on, or accessible through, our
website is not incorporated by reference in, and is not a part of
this prospectus or any accompanying prospectus supplement. You also
may read and copy any document we file with the SEC at the
SEC’s public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public
reference room. Our SEC filings are also available to the public
from the SEC’s website at
www.sec.gov.
This prospectus is
part of a registration statement on Form S-3 that we filed with the
SEC to register the securities to be offered hereby. This
prospectus does not contain all of the information included in the
registration statement, including certain exhibits and schedules.
You may obtain the registration statement and exhibits to the
registration statement from the SEC at the address listed above or
from the SEC’s website
listed above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us
to incorporate by reference the information we file with the SEC,
which means that we can disclose important information to you by
referring you to those documents. The information that we
incorporate by reference is considered to be part of this
prospectus. Information that we file with the SEC in the future and
incorporate by reference in this prospectus automatically updates
and supersedes previously filed information as
applicable.
We incorporate by
reference into this prospectus the following documents filed by us
with the SEC, other than any portion of any such documents that is
not deemed “filed” under the Exchange Act in
accordance with the Exchange Act and applicable SEC
rules:
●
our
Annual Report on Form 10-K for the year ended June 30, 2020,
filed with the SEC on September 24, 2020;
●
our
Definitive Proxy Statement on Schedule 14A, filed with the SEC
on October 29, 2020, relating to our Annual Meeting of Shareholders
held December 10, 2020;
●
our Quarterly
Reports on Form 10-Q for the quarter ended
September 30, 2020, filed with the SEC on November 12, 2020,
for the quarter ended
December 31, 2020, filed with the SEC on February 11, 2021, and
for the quarter ended
March 31, 2021, filed with the SEC on May 13,
2021;
●
our Current Reports
on Form 8-K as filed with the SEC during 2020 and 2021 on each of
November 5, 2020,
November 9, 2020,
November 12, 2020,
December 11, 2020,
December 16, 2020,
December 31, 2020,
January 29, 2021,
February 1, 2021,
February 11, 2021,
April 6, 2021,
April 22, 2021,
April 29, 2021,
May 13, 2021, and
May 17, 2021 (other than any portions thereof deemed
furnished and not filed as indicated below);
●
the description of
our common stock contained in our Registrant’s Registration
Statement on Form 8-A (File No. 00-012697) filed on July 26, 1984,
including any amendments or reports filed for the purpose of
updating such description.
In addition, all
documents subsequently filed by us (including all documents
subsequently filed by us after the date of this registration
statement and prior to the effectiveness of this registration
statement) pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act prior to the termination of the offering, will be
deemed to be incorporated herein by reference and to be a part of
this registration statement from the date of filing of such
documents.
This prospectus
does not, however, incorporate by reference any documents or
portions thereof, whether specifically listed above or furnished by
us in the future, that are not deemed “filed” with the SEC, including information
“furnished” pursuant to Items 2.02, 7.01 and
9.01 of Form 8-K.
Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement
contained herein or in any subsequently filed document that is also
incorporated by reference herein modifies or replaces such
statement. Any statements so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this prospectus.
Any information
incorporated by reference herein is available to you without charge
upon written or oral request. If you would like a copy of any of
this information, please submit your request to us at the following
address:
Dynatronics
Corporation
Attention:
General
Counsel
1200 Trapp
Road
Eagan, Minnesota
55121
(801)
568-7000
Up
to $2,677,997
Common Stock
PROSPECTUS
SUPPLEMENT
Canaccord Genuity
Roth Capital Partners
September 17, 2021