COTTONWOOD HEIGHTS, Utah,
May 4, 2015 /PRNewswire/ --
Dynatronics Corporation (the "Company") (NASDAQ: DYNT), a
manufacturer and marketer of rehabilitation and physical therapy
products, announced today that it has entered into definitive
agreements to raise approximately $4,000,000 in a private placement financing led
by Prettybrook Partners LLC and certain of its affiliates (together
with its affiliates, "Prettybrook"), a strategic private equity
investor focused on the healthcare industry. The financing will
provide Dynatronics with additional capital to promote organic
growth and pursue potential strategic acquisitions.
"Dynatronics has been a leading manufacturer and distributor of
high-quality products for the physical therapy and rehabilitation
markets for over 30 years," said Kelvyn
Cullimore, Jr., Dynatronics' Chairman and CEO. "We have
chosen to join forces with Prettybrook because we believe that the
new equity and the industry expertise the firm brings to
Dynatronics positions us to capitalize on current trends in the
healthcare marketplace. Our industry is changing and
Dynatronics' management is convinced that with the right partner
there are transformative opportunities that would benefit the
company and its shareholders. We are very enthusiastic about
the synergies of a partnership with Prettybrook."
Prettybrook, based in Princeton,
NJ, invests in premier micro-cap healthcare companies.
Founded by Stuart M. Essig,
Ph.D. and Erin S. Enright, the firm
works independently as well as with private equity and venture
capital firms to invest in public and private companies with
significant internal growth or acquisition opportunities. The
principals have notable backgrounds as executives in the healthcare
field and seek situations where they can invest their capital and
contribute operational and financial expertise. Dr. Essig is the
Chairman and former Chief Executive Officer of Integra Lifesciences
Holdings Corporation, the Executive Chairman of Breg Corporation, a
privately held orthopedic bracing company, and a member of the
Board of Directors of St. Jude Medical and Owens & Minor. He
previously served on the Board of Directors of Zimmer Holdings,
Inc. Prior to joining Integra Lifesciences in 1997, Dr. Essig was a
Managing Director in the Mergers & Acquisitions group at
Goldman, Sachs & Co. Ms. Enright has held numerous positions in
the healthcare industry, including as CEO of Lee Medical, a
privately-held medical device company, CFO of InfuSystem, Holdings
Inc. and a former board member of Biolase, Inc. Previously, she was
a Managing Director in the Equity Capital Markets group at
Citibank, where she worked for over a decade. Visit the Prettybrook
website at: www.prettybrookpartners.com.
Dr. Essig, co-founder of Prettybrook, stated that, "I have spent
the last 18 years building medical device companies through
internal growth and strategic acquisitions. I believe that
Dynatronics today represents a company with high quality products,
a strong distribution channel and interesting opportunities in a
changing healthcare landscape. We look forward to working with
Kelvyn and his team to capitalize on these trends and accelerate
the company's growth. We believe there are potentially interesting
add-on opportunities that might be a fit for our model and enhance
Dynatronics' growth potential."
In conjunction with the funding, the Dynatronics Board of
Directors will be expanded to seven members, with up to three
directors to be appointed by the investor group led by Prettybrook.
Erin Enright will be appointed to
the Board at the closing, with two other appointees yet to be
named.
"Prettybrook Partners is excited to lead our first transaction
and to partner with the management team at Dynatronics. The company
has a long history of innovative products and excellent customer
service in their industry. I believe that the addition of
incremental capital and board resources will enable Dynatronics to
take advantage of exciting strategic opportunities for significant
growth," noted Ms. Enright.
Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg
Thalmann Financial Services Inc. (NYSE MKT: LTS), acted as
exclusive placement agent in connection with the offering. FMV
Capital Markets acted as a financial advisor to Dynatronics in
connection with this offering.
The transaction is structured as a sale of 1.6 million shares of
Series A 8% Convertible Preferred Stock and warrants to purchase
2.4 million shares. Each share of preferred stock is
convertible into one share of the Company's common stock and will
accrue a 8% cash or common equity dividend, compounded
annually. The warrants have an exercise price of $2.75 and a term of six years. Additionally, the
Company has agreed to register the sale of the shares of common
stock underlying the Preferred Stock and the warrants. The
closing is subject to shareholder approval of the transaction terms
and other customary closing conditions and is expected to close on
or about June 30, 2015.
About Dynatronics
Dynatronics manufactures, markets and distributes
advanced-technology medical devices, orthopedic soft goods and
supplies, treatment tables and rehabilitation equipment for the
physical therapy, sports medicine, chiropractic, podiatry, plastic
surgery, dermatology and other related medical, cosmetic and
aesthetic markets. More information regarding Dynatronics is
available at www.dynatronics.com.
Cautionary Note on Forward-Looking Statements
This press release contains forward-looking statements. Those
statements include references to the company's expectations and
similar statements. Actual results may vary from the views
expressed in the forward-looking statements contained in this
release. The development and sale of the company's products are
subject to a number of risks and uncertainties, including, but not
limited to, changes in the regulatory environment, competitive
factors, inventory risks due to shifts in market demand, market
demand for the company's products, availability of financing at
cost-effective rates, and the risk factors listed from time to time
in the company's SEC reports.
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SOURCE Dynatronics Corporation