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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): June 26, 2018
DYNATRONICS CORPORATION
(Exact
name of registrant as specified in its charter)
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Utah
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0-12697
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87-0398434
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(State
or Other Jurisdiction of Incorporation)
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Commission
File Number
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(IRS
Employer Identification Number)
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7030 Park Centre Dr., Cottonwood Heights, Utah
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84121
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code: (801)
568-7000
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging
growth company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02
Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
Termination of Principal Executive Officer and Appointment of New
Principal Executive Officer, Appointment of New
Director
On June
26, 2018 (the “Transition Date”), Christopher Richard
von Jako, Ph.D. was appointed as the Chief Executive Officer of
Dynatronics Corporation, a Utah corporation (the
“Company”), effective immediately. In addition,
effective as of the Transition Date, the size of the Board of
Directors (the “Board”) was increased from six to seven
members and Dr. von Jako was appointed to serve as a member of the
Board, filling the newly created vacancy with a term expiring at
the 2018 annual meeting of shareholders. As an employee director,
Dr. von Jako will not be compensated for service on the Board apart
from his regular employee compensation.
In
connection with the appointment of Dr. von Jako as CEO, effective
as of the Transition Date, as previously announced, Kelvyn H.
Cullimore, Jr. will step down from his position as the
Company’s CEO, a position he had held for 25 years. Mr.
Cullimore will continue to serve as a non-employee director and
member of the Board.
Dr. von
Jako, served as President and CEO of NinePoint Medical, Inc. from
November 2014 to June 2018. NinePoint Medical is a privately-held
medical device company that designs, manufactures, and sells an
Optical Coherence Tomography (OCT) imaging platform for clinical
use in gastroenterology, pulmonology, urology, gynecology, and ENT,
for the evaluation of human tissue microstructure. He successfully
secured a significant strategic investment and long-term
partnership with Merit Medical Systems, Inc in April 2018. From May
2013 to November 2014, he was the President and CEO of NeuroTherm,
Inc., a medical device company that develops, manufactures, and
markets state-of-the-art image-guided solutions for pain management
until its acquisition by St. Jude Medical Corporation (now Abbott).
Prior to joining NeuroTherm, from 2010 to 2013, he served as
President of ActiViews, Inc., a privately held medical device
company which developed and marketed minimally invasive tools for
Interventional Radiology. In his nearly 25 years in the medical
device industry, he also has worked in senior management positions
at Radionics, a division of Covidien plc (now Medtronic plc), which
he later sold to Integra LifeSciences Holdings Corporation, and
Medtronic plc. Dr. von Jako holds a Ph.D. degree in Biomedical
Sciences from the University of Pécs Medical School
(Pécs, Hungary), a M.S. degree in Radiological Sciences and
Technology from the department of Nuclear Engineering at the
Massachusetts Institute of Technology (Cambridge, MA), and a double
B.S. degree in Physics and Mathematics from Bates College
(Lewiston, ME).
Dr. von
Jako is an investor in the Company, having participated in the
Company’s private placements of Series A 8% Convertible
Preferred Stock and warrants and in its private offering of units
of its common stock and shares of Series B Convertible Preferred
Stock and warrants.
There
are no arrangements or understandings between Dr. von Jako and any
other persons pursuant to which he was selected as an officer or
director. He has no direct or indirect material interest in any
transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K.
In
connection with his appointment as CEO, the Company entered into a
letter agreement with Dr. von Jako (the “Employment
Agreement”) on May 24, 2018 to be effective upon approval by
the Board and establishment of the Transition Date, which provides
for the following: (i) an annual base salary of $275,000; (ii) a
target annual cash bonus up to a maximum of 30% of base salary
(provided that quantitative and qualitative objectives established
by the Compensation Committee of the Board have been met); (iii) a
grant of a number stock options and restricted stock awards, as
part of a new-hire grant, each for 50,000 shares, vesting in four
annual installments of 25% each commencing on the first anniversary
date of the Transition Date; and (iv) annual grants of stock
options and restricted stock awards having an aggregate fair market
value on date of grant of between $150,000 and $200,000 at the
discretion of the Compensation Committee, with such fair market
values determined with reference to a Black-Scholes model as to the
options and the trading prices of the Company’s common stock
as of the grant date as to the restricted stock awards. Fifty
percent of the new hire stock option grant and restricted stock
award will vest in the event of a termination of Dr. von
Jako’s employment by the Company without cause during the
first twelve months of his employment. In the event of a
termination of his employment upon a change of control, all
previously issued equity grants held by Dr. von Jako at the time of
termination will vest in full, notwithstanding the terms of any
equity incentive plan or applicable award agreements. Acceleration
of vesting in any event will be subject to the execution of a
general release of known and unknown claims in a form satisfactory
to the Company.
Dr. von
Jako also has entered into the Company’s standard form of
indemnification agreement for executives and directors and an
Agreement Regarding Confidential Information, Ownership of
Inventions, Non-Competition, Customer Non-Solicitation and Employee
Non-Solicitation Covenants, and Acknowledgment of At-Will
Employment, which are part of his Employment Agreement. Among other
things, these agreements impose certain restrictions on Dr. von
Jako, including compliance with post-employment covenants to (i)
protect the Company’s confidential information; (ii) not
accept employment with or provide services to a competitor for one
year after termination; (iii) not solicit the Company’s
employees or customers for two years after termination; and (iv)
not disparage or otherwise impair the Company’s reputation or
goodwill.
The
foregoing description of the Employment Agreement is a summary only
and does not purport to be complete. A copy of such agreement is
attached hereto as Exhibit 10.1 and incorporated herein by
reference.
ITEM
7.01 REGULATION FD DISCLOSURE
In accordance
with General Instruction B.2. to Form 8-K, the following
information shall not be deemed “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, nor
shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such a
filing.
After
market closing on June 26, 2018, the Company issued a press release
announcing the appointment of Christopher Richard von Jako as Chief
Executive Officer and director of the Company and the termination
of Kelvyn H. Cullimore, Jr. as Chief Executive Officer of the
Company. A copy of the press release is attached hereto as Exhibit
99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
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Exhibit No.
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Description
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Employment
Agreement between Dynatronics Corporation and Christopher Richard
von Jako effective June 26, 2018
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Press
Release – June 26, 2018**
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**
Furnished herewith
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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DYNATRONICS CORPORATION
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By: /s/
David A.
Wirthlin
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David A. Wirthlin
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Chief Financial Officer (Principal Financial
Officer)
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Date:
June 26, 2018