Blueprint
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As filed with the Securities and
Exchange Commission on May 15,
2018
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Registration
No. 333-___________
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
——————————
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
——————————
DYNATRONICS CORPORATION
(Exact name of registrant as specified in its charter)
——————————
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Utah
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7030 Park Centre Dr.
Cottonwood Heights, Utah 84121
(801) 568-7000
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87-0398434
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(State or other jurisdiction of
incorporation or organization)
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(Address, including zip code, and telephone number, including area
code, of registrant’s principal executive
offices)
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(I.R.S. Employer
Identification No.)
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——————————
Kelvyn H. Cullimore, Jr.
Chief Executive Officer
7030 Park Centre Dr.
Cottonwood Heights, Utah 84121
(801) 568-7000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
——————————
Copy to:
Kevin R. Pinegar, Esq.
Wayne D. Swan, Esq.
Durham Jones & Pinegar, P.C.
111 South Main, Suite 2400
Salt Lake City, Utah 84111
(801) 297-1100 (Telephone)
(801) 415-3500 (Fax)
Approximate
date of commencement of proposed sale to the public: From time to
time after the effective date of this registration
statement.
If the
only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check
the following box. ☐
If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the “Securities Act”), other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. ☑
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If this
Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e)
under the Securities Act, check the following
box. ☐
If this
Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant
to Rule 413(b) under the Securities Act, check the following box.
☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See definition of
“accelerated
filer,” “large accelerated filer,” “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act
(Check One).
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Large
accelerated filer ☐
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Accelerated
filer ☐
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Non-accelerated
filer ☐ (Do not
check if smaller reporting company)
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Smaller
reporting company ☑
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Emerging
growth company ☐
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If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided to
Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of each class of securities to be registered
(1)
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Amount to be
Registered (1)
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Proposed maximum
offeringprice per unit (2)
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Proposed maximum
aggregate offering
price (2)
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Amount of
registration fee (3)
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Common Stock, no
par value per share
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—
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—
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—
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—
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Preferred Stock, no
par value per share
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—
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—
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—
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—
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Debt
Securities
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—
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—
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—
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—
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Warrants
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—
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—
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—
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—
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Units
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—
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—
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—
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—
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Total:
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$50,000,000.00
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$50,000,000.00
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$6,225.00
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(1)
There are being
registered under this registration statement such indeterminate
number of shares of common stock and preferred stock, such
indeterminate principal amount of debt securities and such
indeterminate number of warrants to purchase common stock,
preferred stock and/or debt securities to be sold by the
Registrant, as will have an aggregate initial offering price not to
exceed $50,000,000.00. Pursuant to Rule 457(i) under the Securities
Act of 1933, as amended (the “Securities Act”), the securities registered
hereunder also include such indeterminate number of shares of
common stock and preferred stock and amount of debt securities as
may be issued upon conversion of or exchange for preferred stock or
debt securities that provide for conversion or exchange, upon
exercise of warrants or pursuant to the anti-dilution provisions of
any such securities. Separate consideration may or may not be
received for shares of common stock or preferred stock that are
issuable upon the exercise of warrants. Any securities registered
hereunder may be sold separately or in combination with the other
securities registered hereunder. Pursuant to Rule 416 of the
Securities Act, this registration statement also registers such
additional securities as may become issuable to prevent dilution as
a result of stock splits, stock dividends or similar
transactions.
(2)
Not specified as to
each class of securities to be registered pursuant to General
Instruction II.D of Form S-3 under the Securities Act. The proposed
maximum offering price per unit and proposed maximum aggregate
offering price per class of security will be determined from time
to time by the registrant in connection with the issuance by the
registrant of the securities registered under this registration
statement.
(3)
Calculated pursuant
to Rule 457(o) under the Securities Act.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act or
until the registration statement shall become effective on such
date as the Securities and Exchange Commission, acting pursuant to
said Section 8(a), may determine.
The information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities, and it is not soliciting an offer to buy these
securities, in any jurisdiction where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED MAY 15, 2018
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 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 10, 2018, the aggregate
market value of our outstanding common stock held by non-affiliates
was approximately $4,467,474, which was calculated based on
4,474,932 shares of outstanding common stock held by non-affiliates
and on a price per share of $2.995, the closing price of our common
stock on May 10, 2018. 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 not offered or sold any securities
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 May [●], 2018.
TABLE OF CONTENTS
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Page
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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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3
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DILUTION
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5
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USE OF
PROCEEDS
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5
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DESCRIPTION
OF CAPITAL STOCK
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5
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Description of
Common Stock
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5
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Description of
Preferred Stock
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6
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DESCRIPTION
OF WARRANTS
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13
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DESCRIPTION
OF DEBT SECURITIES
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16
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DESCRIPTION
OF UNITS
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21
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PLAN OF
DISTRIBUTION
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22
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LEGAL
MATTERS
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23
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EXPERTS
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23
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WHERE
YOU CAN FIND MORE INFORMATION
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24
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INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
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24
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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, 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. We will provide a prospectus supplement
that contains specific information about any offering by us with
respect to the securities registered hereunder.
The
prospectus supplement also may add, update, or change information
contained in the 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.
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
Investing in our
securities involves a high degree of risk. Before making an
investment decision, you should carefully consider the discussion
of risks and uncertainties under the heading “Risk Factors” contained in our Annual Report on
Form 10-K for the fiscal year ended June 30, 2017, 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. 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.
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, 2017, 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.
OUR COMPANY
Overview
Through
our Therapy Products, Hausmann Industries, and Bird & Cronin
Divisions, we design, manufacture, market, and distribute
advanced-technology medical devices, therapeutic and medical
treatment tables, rehabilitation equipment, custom athletic
training treatment tables and equipment, institutional cabinetry,
orthopedic soft goods, as well as other specialty patient
rehabilitation and therapy products and supplies. We market and
sell our products through various distribution channels, both
corporate and independent, to physical therapists, chiropractors,
athletic trainers, sports medicine practitioners, orthopedists,
hospitals, clinics, and other medical professionals, and
institutions. We offer our customers a one-stop shop for their
medical equipment and supply needs.
We
conduct our business out of our headquarters facility in Cottonwood
Heights, Utah, in the Salt Lake City metropolitan area, and
subsidiary locations in Northvale, New Jersey and Minneapolis,
Minnesota. We also have manufacturing operations in Chattanooga,
Tennessee. 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 further meet the needs of
our target customers. Our legacy operations were recently
restructured and are operated as our Therapy Products Division in
Cottonwood Heights, Utah and Chattanooga, Tennessee. We
significantly increased our business reach during 2017 with the
acquisition of Hausmann Industries, Inc. (“HII”) during
the fourth quarter of the fiscal year ended June 30, 2017, and Bird
& Cronin, Inc. (“B&C”) during the second
quarter of our fiscal year ending June 30, 2018.
Now
operated as our Hausmann Industries Division, HII was founded as a
New Jersey corporation in 1955 as a privately held manufacturer of
medical, therapy, and athletic training equipment. We acquired HII
in April 2017 to expand our capital equipment product offerings and
manufacturing capacity. The transaction also added approximately
$15 million in annual sales to our operations.
In
October 2017, we acquired B&C, a closely-held Minnesota
corporation, founded in 1968. Now operating as our Bird &
Cronin Division, this unit designs and manufactures orthopedic soft
goods and medical supplies sold and distributed in the United
States and internationally under Bird & Cronin brands and under
private-label manufacturing agreements. This transaction expanded
our brand offerings and distribution channels and also added
approximately $24 million in annual sales to our
operations.
Background
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. Our principal
offices are located at 7030 Park Centre Drive, Cottonwood Heights,
Utah 84121, 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.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES
UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT
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. We have filed the form of indenture as an exhibit to
the registration statement of which this prospectus is a part, and
supplemental 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.
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 10, 2018, we had reserved for issuance:
●
6,738,500 shares of
common stock issuable upon the exercise of outstanding
warrants;
●
2,000,000 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;
●
1,459,000 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;
●
1,440,000 shares of
common stock issuable upon the conversion of outstanding shares of
our Series C Non-Voting Convertible Preferred Stock, or
Series C Preferred. For a description of the conditions upon
which the Series C Preferred is convertible, see “Series C Non-Voting Convertible
Preferred Stock”
below;
●
147,612 shares of
common stock issuable upon the exercise of options granted under
our stock option plans, with a weighted average exercise price of
$3.09 per share, 62,062 of which are currently exercisable, and
85,550 of which are subject to vesting requirements;
and
●
184,560 shares of
common stock issuable to the seller in the B&C acquisition, to
be released in two tranches over an 18-month period from the
closing date of the acquisition, which are part of the holdback
amount under the purchase agreement.
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. In this section of the prospectus, we describe the
rights of the holders of these securities and additional details
related to each series.
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 10, 2018, there were 2,000,000 shares of Series A
Preferred issued and outstanding, convertible into 2,000,000 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 10, 2018, there were 1,459,000 shares of
Series B Preferred issued and outstanding, convertible into
1,459,000 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 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).
Series C Non-Voting Convertible Preferred Stock
In this
section, we summarize the terms of the Certificate of Designations,
Preferences and Rights of Series C Non-Voting Convertible
Preferred Stock (the “Series C Designation”) that
we filed with the Utah Division on September 29, 2017. The
following summary is qualified in its entirety by the terms
contained in the Series C 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. As of May 10, 2018, there were 1,440,000 shares of
Series C Preferred issued and outstanding, convertible into
1,440,000 shares of common stock, and no shares of Series C
Preferred available for future issuance.
Each
share of Series C Preferred has no par value per share and a
stated value equal to $2.50, with the aggregate stated value of all
shares of Series C Preferred being $7.0 million. The
Series C Preferred is non-voting.
Except
as discussed below, the Series C Preferred was converted
automatically into shares of common stock, at a conversion price of
$2.50 per share, upon receipt of shareholder approval at the time
of our Annual Meeting of Shareholders held November 29, 2017.
Certain holders of the Series C Preferred elected to continue
to hold their shares following the mandatory conversion date as
permitted by the Series C Designation, subject to beneficial
ownership and conversion restrictions such that we may not effect
conversion of any such holder’s shares of Series C
Preferred, and the holder may not convert any portion of the
Series C Preferred, to the extent that, after giving effect to
such conversion the holder or any of such holder's affiliates would
beneficially own in excess of the Beneficial Ownership Limitation.
Subject to this limitation, shares of Series C Preferred are
convertible automatically into shares of common stock, at the
conversion price of $2.50 per share.
Outstanding shares
of Series C Preferred have no dividend, liquidation preference
or redemption rights, and remain subject to the Beneficial
Ownership Limitation elected by the holder.
At any
time, in the event of a fundamental transaction defined in the
Series C Designation (such as a merger, consolidation, sale of
all or substantially all of our assets, etc.), we may force the
conversion of the outstanding Series C Preferred by delivering
a written notice to all holders thereof at least 10 trading days
prior to the date of consummation of the fundamental
transaction; provided,
however, that, if such forced conversion would result in the
issuance of shares of common stock (or common stock of the
successor or acquiring corporation in such fundamental transaction)
to such holder in violation of the Beneficial Ownership Limitation,
such forced conversion shall apply to the extent that, and only to
the extent that, such issuance of shares of common stock (or common
stock of the successor or acquiring corporation in such fundamental
transaction) to the holder would not violate the Beneficial
Ownership Limitation.
In
connection with the issuance of the Series C Preferred, we
entered into a registration rights agreement with the Series C
Preferred investors. Pursuant to the registration rights agreement,
we filed a registration statement to register the resale of all
shares of common stock issuable upon conversion of the
Series C Preferred (Registration Statement File No.
333-220959, effective October 26, 2017).
Series D Non-Voting Convertible Preferred Stock
In
connection with the acquisition of B&C, we issued 1,581,935
shares of newly designated Series D Non-Voting Convertible
Preferred Stock (the “Series D Preferred”). The
rights and preferences of the Series D Preferred are defined
by the “Certificate of Designations, Preferences, and Rights
of the Series D Non-Voting Convertible Preferred Stock” (the
“Series D Designation”) filed by us on September
29, 2017 with the Utah Division. We encourage you to read the
Series D Designation thoroughly. The following summary is
qualified in its entirety by the Series D 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.
Each
share of Series D Preferred has no par value per share and a
stated value equal to $2.52855, with the aggregate stated value of
all shares of Series D Preferred being $4.0 million. The
Series D Preferred is non-voting. The Series D Preferred
originally accrued an annual dividend at a rate of 6.0% to be paid
in cash. Upon receipt of shareholder approval at our Annual Meeting
of Shareholders held November 29, 2017, all issued and outstanding
shares of Series D Preferred were automatically converted into
shares of our common stock, on a one-for-one basis. As of May 10,
2018, there were no shares of Series D Preferred issued and
outstanding, and no shares of Series D Preferred available for
future issuance.
Under
our agreement with the seller of B&C, we registered the resale
of all shares of common stock issuable upon conversion of the
Series D Preferred as part of the same registration of shares
with the registration statement filed to register the resale of the
shares of common stock issuable upon conversion of the
Series C Preferred (Registration Statement File No.
333-220959, effective October 26, 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.
Anti-Takeover Provisions of Utah Law
We are
subject to the Utah Control Shares Acquisition Act, as set forth in
Section 61-6-1, et seq., of the Utah Code (the “Control
Shares Act”). The Control Shares Act provides that any person
or entity that acquires “control shares” of an
“issuing public corporation” in a “control share
acquisition” is denied voting rights with respect to the
acquired shares, unless a majority of the disinterested
shareholders of the issuing public corporation elects to restore
such voting rights. The Control Shares Act provides that a person
or entity acquires “control shares” whenever it
acquires shares that, but for the operation for the Control Shares
Act, would bring its voting power following such acquisition within
any of the following three ranges of all voting power of the
issuing public corporation: (i) between 1/5 and 1/3; (ii) between
1/3 and a majority; or (iii) a majority or more.
For
purposes of the Control Shares Act, an “issuing public
corporation” is any corporation other than a depository
institution, that is organized under the laws of the state of Utah
and that has:
●
100 or more
shareholders;
●
its principal place
of business, principal office or substantial assets within the
state; and either:
■
more than 10% of
its shareholders resident in the state;
■
more than 10% of
its shares owned by Utah residents; or
■
10,000 shareholders
resident in the state.
A
“control share acquisition” is generally defined as the
direct or indirect acquisition (including through a series of
acquisitions) of either ownership or voting power associated with
issued and outstanding control shares. The acquisition of any
shares of an issuing public corporation does not constitute a
control share acquisition if the acquisition is consummated, among
others, in any of the following circumstances:
●
pursuant to the
laws of descent and distribution;
●
pursuant to the
satisfaction of a pledge or other security interest created in good
faith and not for the purpose of circumventing the
statute;
●
pursuant to a
direct issue by or transfer from the issuing public corporation of
its own shares, except that shares issued or transferred upon the
conversion of a convertible security or upon exercising an option,
warrant, or other right to purchase shares constitutes a control
share acquisition unless the convertible security, option, warrant,
or other right was acquired directly from the issuing public
corporation by the acquiring person; or
●
pursuant to a
merger or plan of share exchange effected in compliance with a
merger, share exchange or sale of all or substantially all of the
assets of the corporation under applicable provisions of Utah law,
if the issuing public corporation is a party to the agreement of
merger or plan of share exchange.
Under
the Control Shares Act, a person or entity that acquires control
shares pursuant to a control share acquisition acquires voting
rights with respect to those shares only to the extent granted by a
majority of the disinterested shareholders of each class of capital
stock outstanding prior to the acquisition. The acquiring person
may file an “acquiring person statement” with the
issuing public corporation setting forth the number of shares
acquired and certain other specified information. Upon delivering
the statement together with an undertaking to pay the issuing
public corporation’s expenses of a special
shareholders’ meeting, the issuing public corporation is
required to call a special shareholders’ meeting for the
purpose of considering the voting rights to be accorded the shares
acquired or to be acquired in the control shares acquisition. If no
request for a special meeting is made, the voting rights to be
accorded the control shares are to be presented at the issuing
public corporation’s next special or annual meeting of
shareholders.
If
either (i) the acquiring person does not file an acquiring person
statement with the issuing public corporation or (ii) the
shareholders do not vote to restore voting rights to the control
shares, the issuing public corporation may, if its articles of
incorporation or bylaws so provide, redeem the control shares from
the acquiring person at fair market value. Our Articles and Bylaws
do not currently provide for such a redemption right. Unless
otherwise provided in the articles of incorporation or bylaws of an
issuing public corporation, all shareholders are entitled to
dissenters’ rights if the control shares are accorded full
voting rights and the acquiring person has obtained majority or
more control shares. Our Articles of Incorporation and Bylaws do
not currently deny such dissenters’ rights.
The
directors or shareholders of a corporation may elect to exempt the
stock of the corporation from the provisions of the Control Shares
Act through adoption of a provision to that effect in the
corporation’s articles of incorporation or bylaws. To be
effective, such an exemption must be adopted prior to the control
shares acquisition. Our shareholders have not yet taken any such
action.
We
expect the Control Shares Act to have an anti-takeover effect with
respect to transactions our Board does not approve in advance. The
Control Shares Act may also discourage takeover attempts that might
result in a premium over the market price for the shares of common
stock held by our shareholders.
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 Interwest
Transfer Co, Inc., with a mailing address of 1981 East Murray
Holladay Road, Salt Lake City, Utah 84117.
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, which we will enter
into 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 10, 2018, 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, exercisable by means of a “cashless
exercise”;
●
warrants for the
purchase of 1,559,000 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 the 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. We have filed the form of indenture as an
exhibit to the registration statement of which this prospectus is a
part, and supplemental 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 provides 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
Durham Jones & Pinegar, P.C., Salt Lake City,
Utah.
EXPERTS
The
consolidated financial statements of Dynatronics Corporation as of
June 30, 2017 and for the year then ended, incorporated by
reference in this prospectus and in the registration statement,
have been so incorporated in reliance on the report of Tanner LLC,
an independent registered public accounting firm, incorporated
herein by reference, given on the authority of said firm as experts
in auditing and accounting.
The
consolidated financial statements of Dynatronics Corporation as of
June 30, 2016 and for the year then ended, incorporated by
reference in this prospectus and in the registration statement,
have been so incorporated in reliance on the report of BDO USA,
LLP, an independent registered public accounting firm, incorporated
herein by reference, given on the authority of said firm as experts
in auditing and accounting.
The
financial statements of Bird & Cronin, Inc. as of and for the
years ended September 30, 2016 and 2015, incorporated by reference
in this prospectus and in the registration statement, have been so
incorporated in reliance on the report of Cummings, Keegan &
Co., P.L.L.P., independent auditors, given on the authority of that
firm as experts in auditing and accounting.
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, 2017, filed with the SEC
on September 27, 2017;
●
our Definitive
Proxy Statement on Schedule 14A, filed with the SEC on October 23,
2017, relating to our Annual Meeting of Shareholders held November
29, 2017;
●
our Quarterly
Reports on Form 10-Q for quarters ended September 30, 2017,
December 31, 2017, and May 15, 2018, filed with the SEC on November
14, 2017 and February 13, 2018, respectively;
●
our Current Reports
on Form 8-K filed on September 27, 2017, October 2, 2017, October
6, 2017, November 30, 2017, and February 21, 2018;
and;
●
the description of
our common stock contained in our registration statement on Form
S-1, as amended, initially filed with the SEC and effective
November 2, 1984 (No. 2-85045), including any amendment to that
form that we may have filed in the past, or may file in the future,
for the purpose of updating that 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:
Vice President of Business Development
7030
Park Centre Dr.
Cottonwood
Heights, Utah 84121
(801)
568-7000
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The
following table sets forth the costs and expenses payable by the
registrant in connection with the offerings described in this
registration statement. In addition to the costs and expenses set
forth below, the registrant will pay any selling commissions and
brokerage fees and any applicable taxes, fees and disbursements
with respect to securities registered hereby sold by the
registrant. All of the amounts shown are estimates, except for the
SEC registration fee:
|
|
|
|
|
|
|
SEC Registration
Fee
|
$6,225
|
|
Accountants’
Fees and Expenses
|
*
|
|
Legal Fees and
Expenses
|
*
|
|
Printing and
Engraving Expenses
|
*
|
|
Transfer Agent
Fees
|
*
|
|
Miscellaneous
Fees
|
*
|
|
Total
|
$*
|
* These fees are calculated based on the securities offered and the
number of issuances and accordingly cannot be estimated at this
time. The foregoing table sets forth general categories of expenses
(other than underwriting discounts and commissions) that we
anticipate we may incur in connection with the offering of
securities under this registration statement. An estimate of the
aggregate expenses in connection with the issuance and distribution
of the securities being offered will be included in the applicable
prospectus supplement.
Item 15. Indemnification of Directors and Officers.
Section
16-10a-841 of the Utah Revised Business Corporation Act (the
“Revised
Act”) allows a Utah corporation to provide, in its
articles of incorporation, bylaws or by shareholder resolution, for
the elimination or limitation of personal liability of a director
to the corporation or to its shareholders for monetary damages for
any action or omission, as a director, except (i) liability for a
financial benefit received by a director to which he was not
entitled, (ii) intentional infliction of harm on the corporation or
the shareholders, (iii) an unlawful distribution to shareholders in
violation of the Revised Act, and (iv) intentional violation of
criminal law.
Section
16-10a-902 of the Revised Act provides that a Utah corporation may
indemnify any individual made a party to a proceeding because he or
she is or was a director, against liability incurred in the
proceeding, if: (a) the director’s conduct was in good faith,
(b) the director reasonably believed that his or her conduct was
in, or not opposed to, the corporation’s best interests; and
(c) in the case of any criminal proceeding, the director had no
reasonable cause to believe such conduct was unlawful; provided, however, that a corporation
may not indemnify a director under Section 16-10a-902 if the
director was adjudged liable to the corporation in a proceeding by
or in the right of the corporation or adjudged liable for deriving
an improper personal benefit. All indemnification is limited to
reasonable expenses only.
Section
16-10a-903 of the Revised Act provides that, unless limited by its
articles of incorporation, a Utah corporation shall indemnify a
director who was successful, on the merits or otherwise, in the
defense of any proceeding, or in the defense of any claim, issue or
matter in the proceeding, to which the director was a party because
he or she is or was a director of the corporation, against
reasonable expenses incurred in connection with the proceeding or
claim with respect to which the director has been
successful.
In
addition to the indemnification provided by Sections 16-10a-902 and
16-10a-903, Section 6-10a-905 of the Revised Act provides that,
unless otherwise limited by a corporation’s articles of
incorporation, a director may apply for indemnification to the
court conducting the proceeding or to another court of competent
jurisdiction.
Under
Section 16-10a-904 of the Revised Act, a Utah corporation may pay
for or reimburse the reasonable expenses incurred by a director in
advance of final disposition of the proceeding if the director
furnishes the corporation a written affirmation of his or her good
faith belief that the director has met the applicable standard of
conduct, provides a written undertaking personally binding the
director to pay the advance if it is ultimately determined that he
or she did not meet the standard of conduct, and a determination is
made that the facts then known to those making a determination
would not preclude indemnification. The director’s
undertaking need not be secured and may be accepted without
reference to financial ability to make repayment. Section
16-10a-906 of the Revised Act prohibits a corporation from making
any discretionary indemnification, payment or reimbursement of
expenses unless a determination has been made that the director has
met the applicable standard of conduct.
The
determination required under Sections 16-10a-904 and 16-10a-906 of
the Revised Act must be made as follows: (1) by a majority vote of
a quorum of the board of directors who are not parties to the
proceeding; (2) if a quorum cannot be obtained as contemplated by
(1), above, by a majority vote of a committee of two or more
members of the board of directors who are not parties to the
proceeding and are designated by the board of directors; (3) by
special legal counsel selected by a quorum of the board of
directors or its committee composed of persons determined in the
manner prescribed in (1) or (2), above, or if a disinterested
quorum of the board of directors or committee is not possible, then
selected by a majority vote of the full board of directors, or (4)
by a majority of the shareholders entitled to vote by person or
proxy at a meeting.
Section
16-10a-907 of the Revised Act provides that, unless a
corporation’s articles of incorporation provide otherwise,
(i) an officer of the corporation is entitled to mandatory
indemnification under Section 16-10a-903 of the Revised Act and is
entitled to apply for court-ordered indemnification under Section
16-10a-905 of the Revised Act, in each case to the same extent as a
director, (ii) a corporation may indemnify and advance expenses to
an officer, employee, fiduciary or agent of the corporation to the
same extent as a director, and (iii) a corporation may also
indemnify and advance expenses to an officer, employee, fiduciary
or agent who is not a director to a greater extent, if not
inconsistent with public policy, and if provided for by its
articles of incorporation, bylaws, general or specific action of
its board of directors, or contract.
Section
16-10a-908 of the Revised Act provides that a corporation may
purchase and maintain liability insurance on behalf of a person who
is or was a director, officer, employee, fiduciary, or agent of the
corporation or who, while serving as a director, officer, employee,
fiduciary, or agent of the corporation, is or was serving at the
request of the corporation as a director, officer, partner,
trustee, employee, fiduciary, or agent of another foreign or
domestic corporation or other person, or of an employee benefit
plan against liability asserted against or incurred by the
individual in that capacity or arising from his status as such,
whether or not the corporation would have the power to indemnify
him or her against the same liability under Sections 16-10a-902,
16-10a-903 or 16-10a-907 of the Revised Act.
Section
16-10a-909 of the Revised Act provides that a provision treating a
corporation’s indemnification of or advance for expenses to,
directors that is contained in its articles of incorporation or
bylaws, in a resolution of its shareholders or board of directors
or in a contract, (except an insurance policy), or otherwise, is
valid only if and to the extent the provision is not inconsistent
with Sections 16-10a-901 through 16-10a-909 of the Revised Act. If
the articles of incorporation limit indemnification or advancement
of expenses, indemnification and advancement of expenses are valid
only to the extent not inconsistent with the articles.
The
registrant’s Articles of Incorporation, as amended, provide
that, to the fullest extent permitted by the Revised Act or any
other applicable law, a director of the registrant will not be
personally liable to the registrant or its shareholders for
monetary damages for any action taken or failure to take any action
as a director, except liability for (a) the amount of a financial
benefit received by a director to which he is not entitled, (b) an
intentional infliction of harm on the registrant or its
shareholders, (c) a violation of Section 16-10a-842 of the Revised
Act (regarding unlawful distributions) or (d) an intentional
violation of criminal law.
The
Articles of Incorporation also provide that, to the fullest extent
permitted by the Revised Act or other applicable law, (a) the
registrant will indemnify a person made or threatened to be made a
party to any action for all liabilities and expenses incurred by
such person in connection with such action because such person is
or was a director or officer of the registrant or served at the
request of the registrant as a director, officer, partner, trustee,
employee, fiduciary or agent of another entity and (b) the
registrant will advance expenses to such person in advance of a
final disposition of such action.
The
Articles of Incorporation further provide that neither an amendment
nor repeal of such provisions of the registrant’s Articles of
Incorporation, nor the adoption of a provision of the
registrant’s Articles of Incorporation that is inconsistent
with such provisions, will eliminate or reduce the effect of such
provisions with respect to any matter that occurs or action or
proceeding that accrues or arises prior to such amendment or repeal
of such provisions or the adoption of a provision that is
inconsistent with such provisions.
The
registrant’s Bylaws require the Registrant to indemnify any
individual made a party to a proceeding because the individual is
or was a director of the Registrant, against liability incurred in
the proceeding, but only if the Registrant has authorized the
payment in accordance with Section 16-10a-906(4) of the Revised Act
and a determination has been made in accordance with the procedures
set forth in Section 16-10a-906(2) of the Revised Act that the
individual has met the standards of conduct set forth in items (a),
(b), and (c) below.
(a) Standard
of Conduct. The Registrant is required to indemnify the individual
if the Registrant determines that:
(1) the
individual’s conduct was in good faith; and
(2) the
individual reasonably believed that the individual’s conduct
was in, or not opposed to, the Registrant’s best interests;
and
(3) in
the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual’s conduct was
unlawful.
(b) The
Registrant may not indemnify an individual:
(1) in
connection with a proceeding by or in the right of the Registrant
in which the individual was adjudged liable to the Registrant;
or
(2) in
connection with any other proceeding charging that the individual
derived an improper personal benefit, whether or not involving
action in the individual’s official capacity, in which
proceeding he or she was adjudged liable on the basis that he or
she derived an improper personal benefit.
(c) Indemnification
permitted under the Bylaws in connection with a proceeding by or in
the right of the Registrant is limited to reasonable expenses
incurred in connection with the proceeding.
The
Bylaws also provide that if a determination is made following the
procedures of Section 16-10a-906(2) of the Revised Act that the
individual has met the following requirements; and if an
authorization of payment is made, following the procedures and
standards set forth in Section 16-10a-906(4) of the Revised Act,
then unless otherwise provided in the Articles of Incorporation,
the Registrant shall pay for or reimburse the reasonable expenses
incurred by an individual who is a party to a proceeding because he
is or was a director of the Registrant in advance of final
disposition of the proceeding, if:
(a) the
individual furnishes to the Registrant a written affirmation of the
individual’s good faith belief that the individual has met
the standard of conduct described above;
(b) the
individual furnishes to the Registrant a written undertaking,
executed personally or on the individual’s behalf, to repay
the advance if it is ultimately determined that the individual did
not meet the standard of conduct (which undertaking must be an
unlimited general obligation of the individual but need not be
secured and may be accepted without reference to financial ability
to make repayment); and
(c) a
determination is made that the facts then known to those making the
determination would not preclude indemnification under the Bylaws
or Part 9 of the Revised Act.
Unless
otherwise provided in the Articles of Incorporation, the Bylaws
require the Registrant to indemnify and advance expenses to any
individual made a party to a proceeding because the individual is
or was an officer, employee, fiduciary or agent of the Registrant
to the same extent as to an individual made a party to a proceeding
because the individual is or was a director of the Registrant, or
to a greater extent, if not inconsistent with public policy, if
provided for by general or specific action of the Board of
Directors.
The
foregoing description is necessarily general and does not describe
all details regarding the indemnification of officers, directors or
controlling persons of the registrant.
Item 16. Exhibits.
The
exhibits required to be filed as a part of this Registration
Statement are listed in the Exhibit Index attached hereto and
incorporated herein by reference.
Item 17. Undertakings.
(a) The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
(i) To
include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth
in the “Calculation of
Registration Fee” table
in the effective registration statement;
(iii) To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii),
and (a)(1)(iii) of this section do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is part of
the registration statement.
(2) That,
for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(4) That,
for the purpose of determining liability under the Securities Act
of 1933 to any purchaser:
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall
be deemed to be part of the registration statement as of the date
the filed prospectus was deemed part of and included in the
registration statement; and
(B) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) as part of a registration statement in reliance on Rule
430B relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii), or (x) for the purpose of providing the information required
by section 10(a) of the Securities Act of 1933 shall be deemed to
be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to
be a new effective date of the registration statement relating to
the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such effective
date.
(5) That,
for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant
undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities
to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will
be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
(ii) Any
free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
(iii) The
portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(b) The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant’s annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering
thereof.
(c) The
undersigned registrant hereby undertakes to supplement the
prospectus, after the expiration of the subscription period, to set
forth the results of the subscription offer, the transactions by
the underwriters during the subscription period, the amount of
unsubscribed securities to be purchased by the underwriters, and
the terms of any subsequent reoffering thereof. If any public
offering by the underwriters is to be made on terms differing from
those set forth on the cover page of the prospectus, a
post-effective amendment will be filed to set forth the terms of
such offering.
(d) The
undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act
under subsection (a) of section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the
Commission under section 305(b)(2) of the Trust Indenture
Act.
(e) Insofar
as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Cottonwood
Heights, State of Utah, on the 15th day of May,
2018.
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DYNATRONICS CORPORATION
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By:
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/s/ Kelvyn H.
Cullimore, Jr.
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Kelvyn
H. Cullimore, Jr.
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Chief
Executive Officer
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POWER OF ATTORNEY
Each
person whose signature appears below hereby constitutes and
appoints Kelvyn H. Cullimore, Jr. and David A. Wirthlin, and each
one of them acting alone, as his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for
him and in his name, place, and stead, in any and all capacities,
to sign any and all amendments (including post-effective
amendments) to this registration statement, and to sign any
registration statement for the same offering covered by this
registration statement that is to be effective upon filing pursuant
to Rule 462(b) under the Securities Act, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them acting alone, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or his or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the
requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the
capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/
Kelvyn H. Cullimore, Jr.
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Chief
Executive Officer and Director
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May 15,
2018
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Kelvyn
H. Cullimore, Jr.
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(Principal
Executive Officer)
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/s/
David A. Wirthlin
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Chief
Financial Officer
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May 15,
2018
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David
A. Wirthlin
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(Principal
Financial and Accounting Officer)
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/s/
Erin S. Enright
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Chairperson
of the Board of Directors
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May 15,
2018
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Erin S.
Enright
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/s/
David B. Holtz
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Director
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May 15,
2018
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David
B. Holtz
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/s/
Brian M. Larkin
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Director
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May 15,
2018
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Brian
M. Larkin
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/s/
Scott A. Klosterman
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Director
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May 15,
2018
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Scott
A. Klosterman
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/s/ R.
Scott Ward
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Director
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May 15,
2018
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R.
Scott Ward
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EXHIBIT INDEX
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Incorporated
By Reference
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Exhibit Number
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Exhibit Description
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Form
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File No.
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Exhibit
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Filing Date
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Filed Herewith
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1.1*
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Form of Underwriting Agreement.
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Amended and Restated Articles of Incorporation of the
Registrant
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S-3
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333-215800
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3.1
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1/27/2017
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Amended and Restated Bylaws of the Registrant
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8-K
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000-12697
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3.2
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7/22/2015
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Certificate Designating the Preferences, Rights and Limitations of
the Series A 8% Convertible Preferred Stock of the Registrant
(Corrected)
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8-K
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000-12697
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3.1
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7/1/2015
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Certificate of Designations, Preferences and Rights of Series B
Convertible Preferred Stock of the Registrant
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8-K
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000-12697
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3.1
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4/4/2017
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Certificate of Designations, Preferences and Rights of the Series C
Non-voting Convertible of the Registrant
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8-K
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000-12697
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3.1
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10/6/2017
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Certificate of Designations, Preferences and Rights of the Series D
Non-voting Convertible of the Registrant
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8-K
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000-12697
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3.2
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10/6/2017
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4.1
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Reference is made to Exhibits 3.1, 3.2, 3.3, 3.4, 3.5, and 3.6
above.
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4.2
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Specimen Common Stock Certificate of the Registrant
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S-1
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00-285045
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4.1
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7/11/1983
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Specimen Series A Preferred Stock Certificate of the
Registrant
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S-3
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333-205934
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4.2
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7/29/2015
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Specimen Series B Preferred Stock Certificate of the
Registrant
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S-3
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333-217322
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4.2
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4/14/2017
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Form of Common Stock Purchase Warrant (A Warrant)
2015
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8-K
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000-12697
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4.1
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7/1/2015
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Form of Common Stock Purchase Warrant (B Warrant)
2015
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8-K
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000-12697
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4.2
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7/1/2015
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Form of Common Stock Purchase Warrant 2017
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8-K
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000-12697
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4.2
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3/22/2017
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Form of Common Stock Purchase Warrant (September
2017)
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8-K
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000-12697
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4.1
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9/27/2017
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4.9*
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Specimen Preferred Stock Certificate and Form of Certificate of
Designation of Preferred Stock.
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Form of Common Stock Warrant Agreement and Warrant
Certificate.
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x
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Form of Preferred Stock Warrant Agreement and Warrant
Certificate
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x
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Form of Debt Securities Warrant Agreement and Warrant
Certificate
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x
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4.13*
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Form of Debt Securities
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Form of Debt Indenture
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x
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Opinion of Legal Counsel
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x
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12.1*
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Statement Regarding Computation of Ratio of Earnings to Fixed
Charges
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Consent of Independent Registered Public Accounting Firm (Tanner
LLC)
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x
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Consent of Independent Registered Public Accounting Firm (BDO USA,
LLP)
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x
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Consent of Independent Auditors (Cummings, Keegan & Co.,
PLLP)
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x
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23.4
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Consent of Legal Counsel (included in Exhibit 5.1)
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24.1
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Power of Attorney (included on signature page)
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25.1+
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Statement of Eligibility of Trustee under the Debt
Indenture
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*
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To
be filed by amendment or as an exhibit to a Current Report on Form
8-K and incorporated herein by reference, if
applicable.
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+
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To
be filed separately under the electronic form type 305B2, if
applicable.
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