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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 1996
DYNATRONICS CORPORATION
(Exact name of registrant as specified in its charter)
Utah 0-12697 87-0398434
(State or other (Commission File (IRS Employer
jurisdiction Number) Identification
of incorporation) No.)
7030 Park Centre Drive
Salt Lake City, Utah 84121
(801) 568-7000
(Address of principal executive offices and Zip Code
Registrant's telephone number with area code)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Former name, former address & former fiscal year,
if changed since last report)
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This Amendment No. 1 supplements the Company's current report
on Form 8-K dated as of May 1, 1996 and filed with the
Securities and Exchange Commission on May 16, 1996 to submit
the pro forma financial information required by Article 11 of
Regulation S-X.
Item 7. Financial Statements and Exhibits.
(b) Pro Forma Financial Information. The Company
submits the following pro forma financial information:
Unaudited Pro Forma Combined Balance Sheets of
Dynatronics Corporation and Superior Orthopaedic
Supplies, Inc. as of March 31, 1996.
Unaudited Pro Forma Combined Income Statements of
Dynatronics Corporation and Superior Orthopaedic
Supplies, Inc. for the nine-month period ended March 31,
1996.
Unaudited Pro Forma Combined Income Statements of
Dynatronics Corporation and Superior Orthopaedic
Supplies, Inc. for the year ended June 30, 1995.
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INTRODUCTION
On May 1, 1996, Dynatronics Corporation purchased most of
the assets and assumed some of the liabilities of Superior
Orthopaedic Supplies, Inc. The total purchase price was
approximately $1,725,000 which included $550,000 in cash, a
$550,000 promissory note, 440,000 shares of Dynatronics common
stock, and approximately $340,000 in assumed debts of
Superior. The assets purchased included accounts receivable,
inventory, fixed assets, goodwill, and certain rights in the
continuation of the business established by Superior.
The Pro Forma Statements herein filed illustrate what
effect the purchase transaction would have had on Dynatronics
assuming the transaction took place on March 31, 1996 for the
balance sheet presentation, and at the beginning of the period
for the income statement presentations for the nine months
ended March 31, 1996 and the fiscal year ended June 30, 1995.
The presentations show Dynatronics' and Superior's historical
results individually for the periods indicated, and then
adjustments are shown allowing for the purchase transaction to
arrive at a combined balance sheet or income statement.
Adjustments in the pro forma income statements include
expenses for amortization, depreciation, interest etc.
Explanatory notes are attached.
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[CAPTION]
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DYNATRONICS CORPORATION and SUPERIOR ORTHOPAEDIC SUPPLIES, INC.
Unaudited Pro Forma Condensed Combined Balance Sheets
March 31, 1996
Historical Pro Forma
---------------------- ----------------------
ASSETS Dynatronics Superior Adjustments Combined
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $1,137,075 - (699,823)n 437,252
Trade accounts receivable, less allowance for
doubtful accounts 1,360,911 289,071 - 1,649,982
Income tax refund receivable - - - -
Related party and other receivables 12,369 54,077 - 66,446
Inventories 1,476,752 275,029 - 1,751,781
Prepaid expenses and other current assets 49,866 1,414 (1,414)b 49,866
Deferred tax asset-current 135,310 - - 135,310
---------- -------- ---------- ----------
Total current assets 4,172,283 619,591 (701,237) 4,090,637
Net property and equipment 2,568,682 6,696 69,865 c 2,645,243
Excess of cost over book value of assets
acquired, net of accumulated amortization 151,430 - 1,166,778 i 1,318,208
Deferred tax asset-noncurrent 196,415 - - 196,415
Other assets 423,948 - - 423,948
---------- -------- --------- ----------
$7,512,758 626,287 535,406 8,674,451
========== ======== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 107,153 3,999 35,380 d 146,532
Current installments of capital lease obligations 25,499 - - 25,499
Notes payable to bank - 57,000 (57,000)e -
Notes payable to related parties - 82,505 (82,505)f -
Accounts payable 121,656 225,693 100,000 g 447,349
Accrued expenses 333,290 3,873 (3,873)b 333,290
Income taxes payable 40,966 4,900 (4,900)b 40,966
----------- -------- ---------- ---------
Total current liabilities 628,564 377,970 (12,898) 993,636
Long-term debt, excluding current installments 2,005,331 6,319 504,302 d 2,515,952
Capital lease obligations, excluding current installments 6,748 - - 6,748
Deferred compensation 347,700 - - 347,700
----------- -------- ---------- ---------
Total long-term liabilities, excluding current
installments 2,359,779 6,319 504,302 2,870,400
----------- -------- ---------- ---------
Total liabilities 2,988,343 384,289 491,404 3,864,036
Stockholders' equity:
Common stock, no par value 1,695,204 2,058 283,942 h 1,981,204
Retained earnings 2,829,211 239,940 (239,940)b 2,829,211
----------- -------- ---------- ---------
Total stockholders' equity 4,524,415 241,998 44,002 4,810,415
----------- -------- ---------- ---------
$ 7,512,758 626,287 535,406 8,674,451
=========== ======== ========== =========
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[CAPTION]
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DYNATRONICS CORPORATION and SUPERIOR ORTHOPAEDIC SUPPLIES, INC.
Unaudited Pro Forma Condensed Combined Income Statements
Nine months ended March 31, 1996
Historical Pro Forma
----------------------- -------------------------
Dynatronics Superior Adjustments Combined
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 4,958,410 1,561,690 - 6,520,100
Cost of sales 2,638,708 1,095,273 - 3,733,981
----------- ----------- ----------- -----------
Gross profit 2,319,702 466,417 - 2,786,119
Selling, general, and administrative expenses 1,454,019 392,407 - 1,846,426
Amortization of goodwill from acquisition - - 58,339 i 58,339
Depreciation on assets acquired from Superior - - 11,484 j 11,484
Research and development expenses 426,515 - - 426,515
----------- ----------- ----------- -----------
Operating income $ 439,168 74,010 (69,823) 443,355
Other income (expense):
Interest income 29,111 - - 29,111
Interest expense (116,949) (7,405) (26,082)k (150,436)
Other income, net 125,864 2,828 - 128,692
Write-off of ITEC note receivable (228,824) - - (228,824)
----------- ----------- ----------- -----------
Total other income (expense) (190,798) (4,577) (26,082) (221,457)
Income before income taxes 248,370 69,433 (95,905) 221,898
Income tax expense (benefit) 29,047 4,100 (14,563)l 18,584
----------- ----------- ----------- -----------
Net income $ 219,323 65,333 (81,342) 203,314
=========== =========== =========== ===========
Net income per common share and common
share equivalents: $ 0.03 0.02
=========== ===========
Weighted average number of common shares
and common share equivalents outstanding 7,964,438 m 8,404,438
</TABLE>
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[CAPTION]
<TABLE>
DYNATRONICS CORPORATION and SUPERIOR ORTHOPAEDIC SUPPLIES, INC.
Unaudited Pro Forma Condensed Combined Income Statements
Year ended June 30, 1995
Historical Pro Forma
----------------------- -------------------------
Dynatronics Superior Adjustments Combined
----------- -------- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 6,112,241 2,021,189 - 8,133,430
Cost of sales 3,518,076 1,504,705 - 5,022,781
----------- ----------- ----------- -----------
Gross profit 2,594,165 516,484 - 3,110,649
Selling, general, and administrative expenses 1,704,723 469,624 - 2,174,347
Amortization of goodwill from acquisition - - 77,785 i 77,785
Depreciation on assets acquired from Superior - - 15,312 j 15,312
Research and development expenses 566,891 - - 566,891
----------- ----------- ----------- -----------
Operating income 322,551 46,860 (93,097) 276,314
Other income (expense):
Interest income 17,566 - - 17,566
Interest expense (164,925) (6,237) (37,252)k (208,414)
Other income, net 184,378 2,958 - 187,336
----------- ----------- ----------- -----------
Total other income (expense) 37,019 (3,279) (37,252) (3,512)
Income before income taxes 359,570 43,581 (130,349) 272,802
Income tax expense (benefit) 142,487 2,500 (37,061)l 107,926
----------- ----------- ----------- -----------
Net income $ 217,083 41,081 (93,288) 164,876
=========== =========== =========== ===========
Net income per common share and common
share equivalents: $ 0.03 0.02
=========== ===========
Weighted average number of common shares
and common share equivalents outstanding 7,928,818 m 8,368,818
</TABLE>
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DYNATRONICS CORPORATION and SUPERIOR ORTHOPAEDIC SUPPLIES, INC.
Notes and Assumptions to Pro Forma Statements
(a) Pro Forma Statements are based on the assumption that
the asset acquisition was consummated at the beginning
of the period in the income statements and assumes the
acquisition was consummated at the end of the period in
the balance sheet.
(b) Elimination entries, items were not included as assets
purchased or liabilities assumed.
(c) Fixed assets valued at $76,561 were acquired in the
transaction.
(d) A $550,000 note was given to Superior Shareholders, of
which $39,379 is a current liability, and $510,621 is a
long term liability. The $10,318 note payable to the
bank ($3,999 current and $6,319 long-term), was assumed
and paid off.
(e) $57,000 note payable to the bank was assumed and paid
off in the acquisition transaction.
(f) Notes payable to Allen Hughes, Tom Hughes and H & K
assumed and paid off.
(g) Pro Forma statements assume that all accounts payable
were assumed in the acquisition. The pro forma balance
sheet is adjusted for accounts payable in the amount of
$100,000 for estimated capital acquisition costs.
(h) Dynatronics issued 440,000 shares of its common stock
valued at $286,000 to Superior Shareholders. The
common stock of Superior was eliminated.
(i) Goodwill of $1,166,778 which includes $100,000 of
capitalized acquisition costs is amortized over 15
years.
(j) An estimated average 5 year straight line life is
assumed on all assets acquired.
(k) The interest expense on the $550,000 note given to
Superior Shareholders, is calculated at an interest
rate of 7% and amortized over 10 years with a balloon
payment at April 30, 1999.
(l) Superior was a sub-chapter S Corporation taxed at the
owners level for federal income taxes, under
Dynatronics ownership, federal income taxes are payable
at the corporation level.
(m) 1,000 shares of Superior stock were eliminated.
440,000 shares of Dynatronics stock were issued in the
asset purchase.
(n) Cash payments include $550,000 to Superior Shareholders
at closing, $10,318 paid to bank (see note d), $57,000
paid to bank (see note e), and $82,505 paid to note
holders (see note f).
(o) The above proforma statements do not purport to be
indicative of the financial position or results which
actually would have occurred had the acquisition been
made on July 1, 1995 or subsequent to that date.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
Dynatronics Corporation
By: /s/ Kelvyn H. Cullimore, Jr.
---------------------------------
Kelvyn H. Cullimore, Jr.,
President and CEO
Dated: July 15, 1996
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