Financial Performance - Net sales for the three months ended September 30, 2025, were $7,024,027, a decrease of 7.57% compared to $7,602,249 for the same period in 2024[13] - Gross profit for the same period was $1,731,629, down from $1,980,807, reflecting a decrease of 12.54%[13] - The operating loss narrowed to $(88,463) for the three months ended September 30, 2025, compared to $(250,996) for the same period in 2024, indicating improved operational efficiency[13] - Net loss attributable to common stockholders was $(385,407) for the three months ended September 30, 2025, compared to $(534,386) in the prior year, a reduction of 28%[13] - Net loss for the quarter ended September 30, 2025, was $202,000 compared to a net loss of $367,000 for the same quarter in 2024, a decrease of $165,000[73] - Net loss attributable to common stockholders decreased by $149,000 to $385,000 for the quarter ended September 30, 2025[74] Cash and Liquidity - Cash and cash equivalents increased to $761,748 as of September 30, 2025, from $326,344 at June 30, 2025, representing a growth of 133.33%[10] - As of September 30, 2025, the company had $762,000 in cash and cash equivalents, an increase from $326,000 as of June 30, 2025[75] - Cash and cash equivalents increased by $435,000 to $812,000 as of September 30, 2025, compared to $377,000 as of June 30, 2025, with $607,000 provided from the line of credit[86] - Net working capital decreased from $718,110 as of June 30, 2025, to $592,564 as of September 30, 2025, reflecting ongoing liquidity challenges[30] - Working capital was $593,000 as of September 30, 2025, compared to $718,000 as of June 30, 2025[76] Assets and Liabilities - Total current assets rose to $9,018,155 as of September 30, 2025, compared to $8,954,185 at June 30, 2025, an increase of 0.71%[10] - Total liabilities decreased to $11,943,554 as of September 30, 2025, down from $12,176,738 at June 30, 2025, a reduction of 1.92%[10] - Trade accounts receivable decreased by approximately $80,000 or 2.9%, to $2,721,000 as of September 30, 2025, driven by reduced overall revenue and timing of collections[87] - Inventories decreased by $250,000 or 4.9%, to $4,824,000 as of September 30, 2025, due to adjustments in inventory management in response to the uncertain operating environment[88] - Accounts payable decreased by approximately $236,000 or 6.9%, to $3,168,000 as of September 30, 2025, primarily due to timing of payments[89] - The outstanding balance of the line of credit was $2,604,000 as of September 30, 2025, compared to $1,997,000 as of June 30, 2025[90] - Finance lease liability totaled approximately $1,350,000 as of September 30, 2025, with lease payments currently around $33,000 per month[91] - Operating lease liability decreased to approximately $2,948,000 as of September 30, 2025, from $3,205,000 as of June 30, 2025[92] Operational Changes and Strategies - The Company is transitioning production from a contract manufacturer to internal operations to reduce costs and improve quality control[31] - The Company is actively working to mitigate potential tariff-related costs by stocking adequate inventory of key products[33] - The Company is evaluating strategic actions to improve performance, including cost reduction initiatives and pursuing new revenue streams through product diversification[31] - The company is implementing a comprehensive plan to address challenges, including cost reduction initiatives and transitioning production in-house[77] - The company believes that successful implementation of strategic actions may mitigate substantial doubt regarding its ability to continue as a going concern[77] Dividends and Stock - Preferred stock dividends issued or to be issued amounted to $183,550 for the three months ended September 30, 2025, compared to $167,738 in the prior year, reflecting an increase of 9.99%[18] - The Company paid $183,550 in preferred stock dividends by issuing 2,557,952 shares of common stock during the three months ended September 30, 2025[45] - The Company has a stock repurchase plan with approximately $449,000 remaining as of September 30, 2025, with no purchases made since September 2011[95] Tax and Valuation - The Company recorded a full valuation allowance against its net deferred income tax assets as of September 30, 2025, indicating uncertainty in realizability[94]

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Dynatronics Corporation designs, manufactures, and sells restorative medical devices for physical therapy, rehabilitation, and pain management, operating under multiple brands and subject to extensive regulations - Dynatronics Corporation is a leading medical device company providing high-quality products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training[16](index=16&type=chunk) - The company markets products under well-known industry brands including Bird & Cronin, Solaris, Hausmann, PROTEAM, and Mammoth[16](index=16&type=chunk) - The business strategy prioritizes stable revenue streams, steady business operations, and ensuring continued value for clinicians, investors, and all stakeholders through consistent operational excellence and core strength maintenance[18](index=18&type=chunk) [Company Background](index=4&type=section&id=Company%20Background) Dynatronics Corporation, founded in 1983 in Utah, is a medical device company operating through subsidiaries Bird & Cronin, LLC and Hausmann Enterprises, LLC - Dynatronics Corporation was founded in **1983** and is a Utah corporation[19](index=19&type=chunk) - The company's principal executive offices are located at 1200 Trapp Road, Eagan, Minnesota[19](index=19&type=chunk) - The company operates on a fiscal year ending June 30 and includes wholly-owned subsidiaries Bird & Cronin, LLC and Hausmann Enterprises, LLC[21](index=21&type=chunk) [Business Strategy](index=4&type=section&id=Business%20Strategy) Dynatronics aims to maintain its market position by focusing on operational excellence, on-time delivery, and superior customer care to ensure stable revenue and stakeholder value - Dynatronics is committed to maintaining its position as a leading manufacturer of restorative products through consistent operational excellence and a focus on sustaining core strengths[18](index=18&type=chunk) - The company's strategy prioritizes stable revenue streams, steady business operations, and ensuring continued value for clinicians, investors, and all stakeholders[18](index=18&type=chunk) [Corporate Information](index=4&type=section&id=Corporate%20Information) Dynatronics Corporation, founded in 1983, provides investor information including SEC filings and corporate governance documents via its website and investor portal - Dynatronics Corporation was founded in **1983** and its principal executive offices are in Eagan, Minnesota[19](index=19&type=chunk) - The company's website (www.dynatronics.com) and investor portal provide access to SEC filings, investor conference announcements, press releases, and corporate governance information[19](index=19&type=chunk)[20](index=20&type=chunk)[23](index=23&type=chunk) [Our Products](index=6&type=section&id=Our%20Products) Dynatronics offers a diverse range of restorative products for physical therapy, rehabilitation, orthopedics, pain management, and athletic training, with no single product exceeding 10% of total revenues and manufactured products comprising approximately 98% of sales - Dynatronics sells a broad range of restorative products for clinical use in physical therapy, rehabilitation, orthopedics, pain management, and athletic training[24](index=24&type=chunk) - Product offerings include orthopedic soft bracing and supports, patient care products, treatment tables, rehabilitation equipment, therapeutic modalities, and related supplies[24](index=24&type=chunk) - No single product accounted for more than **10% of total revenues** in fiscal years 2025 or 2024, and manufactured products represented approximately **98% of total product sales**[31](index=31&type=chunk) [Orthopedic Soft Bracing Products](index=6&type=section&id=Orthopedic%20Soft%20Bracing%20Products) The company's orthopedic soft bracing products, marketed under brands like Bird & Cronin, are designed for pre- and post-surgical intervention, fracture recovery, and joint stabilization - Orthopedic soft bracing products are designed to accelerate health for patients pre- and post-surgical intervention, during fracture recovery, joint stabilization, and ligament injury[26](index=26&type=chunk) - Bird & Cronin products include cervical collars, shoulder immobilizers, arm slings, wrist and elbow supports, abdominal and lumbosacral supports, maternity supports, knee immobilizers and supports, ankle walkers and supports, plantar fasciitis splints, and cold therapy[27](index=27&type=chunk) [Physical Therapy and Rehabilitation Products](index=6&type=section&id=Physical%20Therapy%20and%20Rehabilitation%20Products) Dynatronics offers physical therapy and rehabilitation products under brands such as Solaris, Hausmann, and PROTEAM, including treatment tables, rehabilitation equipment, and therapeutic modalities - Physical therapy and rehabilitation products are designed for use in physical therapy, rehabilitation, pain management, and athletic training[28](index=28&type=chunk) - Brands like Solaris, Hausmann, and PROTEAM include treatment tables, rehabilitation equipment, and therapeutic modalities such as electrotherapy, ultrasound, and phototherapy[28](index=28&type=chunk)[29](index=29&type=chunk) [Sales Mix among Key Products](index=6&type=section&id=Sales%20Mix%20among%20Key%20Products) In fiscal years 2025 and 2024, no single product accounted for more than 10% of total revenues, with manufactured products representing approximately 98% of total product sales - No single product accounted for more than **10% of total revenues** in fiscal years 2025 or 2024[31](index=31&type=chunk) - Sales of products manufactured by Dynatronics or its contract manufacturers represented approximately **98% of total product sales** in both fiscal years 2025 and 2024[31](index=31&type=chunk) [Patents and Trademarks](index=6&type=section&id=Patents%20and%20Trademarks) Dynatronics holds U.S. patents for thermoelectric and combination traction/phototherapy technologies, along with significant trademarks like Dynatron® and Bird & Cronin®, actively protecting its intellectual property - Dynatronics owns a U.S. patent on thermoelectric technology (effective until **February 2033**) and another on combination traction/phototherapy technology (effective until **December 2026**)[32](index=32&type=chunk) - Significant U.S. trademark registrations include Dynatron®, Dynatron Solaris®, Bird & Cronin®, Hausmann®, and PROTEAM™[33](index=33&type=chunk) - The company protects trade secrets through confidentiality agreements with key employees and partners, and intends to defend its intellectual property rights through legal action[36](index=36&type=chunk)[38](index=38&type=chunk) [Warranty Service](index=8&type=section&id=Warranty%20Service) Dynatronics provides warranties on all manufactured products, typically ranging from 90 days to fifteen years, with claims serviced at its Utah, New Jersey, and Minnesota facilities - The company provides a warranty on all manufactured products for periods generally ranging from **90 days to fifteen years**[39](index=39&type=chunk) - Warranty claims are serviced at Utah, New Jersey, and Minnesota sites and are not material[39](index=39&type=chunk) [Customers and Markets](index=8&type=section&id=Customers%20and%20Markets) Dynatronics sells products to licensed practitioners, hospitals, and clinics through a network of over 100 independent dealers and direct sales representatives, with two to three major customers accounting for significant net sales - Customers include orthopedists, physical therapists, chiropractors, athletic trainers, professional sports teams, universities, hospitals, clinics, retail distributors, and OEM partners[40](index=40&type=chunk) - The company uses a network of over **100 core independent dealers** and a combination of independent and targeted direct sales representatives[40](index=40&type=chunk) Major Customers' Contribution to Net Sales | Fiscal Year | Customer 1 (% of Net Sales) | Customer 2 (% of Net Sales) | Customer 3 (% of Net Sales) | | :---------- | :-------------------------- | :-------------------------- | :-------------------------- | | 2025 | 14.5% | 12.0% | N/A | | 2024 | 13.0% | 12.7% | 12.7% | [Competition](index=8&type=section&id=Competition) Dynatronics operates in a highly fragmented and competitive medical device industry, competing on trusted brands, on-time delivery, superior customer care, and advanced technology like infrared phototherapy integration - The industry is highly fragmented with numerous competitors, including larger and more established companies with greater resources[42](index=42&type=chunk)[43](index=43&type=chunk) - Dynatronics competes on trusted high-quality brands, on-time product delivery, and superior customer care[45](index=45&type=chunk) - The company believes its integration of advanced technology, such as being the first to integrate infrared phototherapy in a combination therapy device, provides a competitive edge[44](index=44&type=chunk) [Manufacturing and Quality Assurance](index=8&type=section&id=Manufacturing%20and%20Quality%20Assurance) Dynatronics manufactures products at facilities in New Jersey, Minnesota, and Utah, ensuring quality through internal component fashioning, third-party sourcing, and trained staff performing assembly and quality assurance testing - Products are manufactured at facilities in Northvale, New Jersey, Eagan, Minnesota, and Cottonwood Heights, Utah[46](index=46&type=chunk) - The manufacturing process involves custom components fashioned internally and purchased from third-party suppliers, all meeting established specifications[46](index=46&type=chunk) - Trained staff perform sub-assembly, final assembly, and quality assurance testing following established procedures to ensure products meet design requirements[46](index=46&type=chunk) [Regulatory Matters](index=8&type=section&id=Regulatory%20Matters) Dynatronics' products are extensively regulated by the FDA and FTC, requiring compliance with Quality Systems Regulations and medical device reporting, with most therapeutic devices cleared under section 510(k) or exempt - The manufacture, packaging, labeling, advertising, promotion, distribution, and sale of Dynatronics' products are subject to regulation by the FDA and FTC in the United States[47](index=47&type=chunk) - As a medical device manufacturer, Dynatronics must register with the FDA, comply with Quality Systems Regulations, and adhere to medical device reporting requirements[48](index=48&type=chunk) - Most therapeutic treatment devices are cleared for marketing under section 510(k) of the FD&C Act or are considered 510(k) exempt; certain Class II phototherapy devices were exempted from 510(k) in 2017, which is viewed positively for leveraging existing technology but also lowers competitive barriers[49](index=49&type=chunk)[51](index=51&type=chunk) [Foreign Government Regulation](index=10&type=section&id=Foreign%20Government%20Regulation) Future international expansion would subject Dynatronics' products to diverse foreign governmental regulations, including product standards, packaging, labeling, and import restrictions, with non-compliance risking severe penalties - Future expansion into international markets would subject products to diverse foreign governmental regulations, including product standards, packaging, labeling, and import restrictions[58](index=58&type=chunk)[59](index=59&type=chunk) - Failure to comply with foreign regulations could lead to fines, suspension of approvals, product recalls, and criminal sanctions[59](index=59&type=chunk) [Environment](index=11&type=section&id=Environment) Environmental regulations and compliance costs are not material to Dynatronics' business, and the company believes it complies with relevant laws like California's Proposition 65 - Environmental regulations and compliance costs are not material to the company's business[60](index=60&type=chunk) - Dynatronics believes it is compliant with laws like California's Proposition 65, which regulates products containing certain identified ingredients[60](index=60&type=chunk) [Seasonality](index=11&type=section&id=Seasonality) Dynatronics' business experiences seasonality, with sales typically higher in the first and fourth fiscal quarters (summer and spring) and lower in the second and third fiscal quarters (fall and winter) - The company's business is affected by seasonality, leading to fluctuations in operating results[61](index=61&type=chunk) - Sales are typically higher in the first and fourth fiscal quarters (summer and spring months) and lower in the second and third fiscal quarters (fall and winter months)[61](index=61&type=chunk) [Employees](index=11&type=section&id=Employees) As of June 30, 2025, Dynatronics employed 88 full-time individuals, with approximately 40% covered by a collective bargaining agreement expiring in February 2028, and reports satisfactory labor relations - As of June 30, 2025, Dynatronics employed **88 full-time employees**[62](index=62&type=chunk) - **35 employees** (approximately **40% of the workforce**) are subject to a collective bargaining agreement expiring in **February 2028**[62](index=62&type=chunk) - The company believes its labor relations with both union and non-union employees are satisfactory[62](index=62&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) Dynatronics faces significant risks including substantial doubt about its going concern ability, reliance on third-party manufacturers, supply chain disruptions, inflation, and potential future losses, alongside regulatory, market, and stock-related challenges - The company has incurred significant recurring operating losses, negative cash flows, and reduced liquidity, raising substantial doubt about its ability to continue as a going concern[64](index=64&type=chunk) - Key business risks include reliance on third-party manufacturers, supply chain disruptions, inflation, geopolitical instability, and the potential for future non-cash impairment charges[65](index=65&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk)[78](index=78&type=chunk) - Risks related to common stock include price volatility, substantial dilution from preferred stock conversions and future issuances, and the challenges associated with trading on the OTCQB Venture Market[110](index=110&type=chunk)[112](index=112&type=chunk)[120](index=120&type=chunk) [Substantial Doubt About Our Ability to Continue as a Going Concern](index=12&type=section&id=Substantial%20Doubt%20About%20Our%20Ability%20to%20Continue%20as%20a%20Going%20Concern) Dynatronics faces substantial doubt about its ability to continue as a going concern due to recurring operating losses, negative cash flows, and reduced liquidity, despite implementing strategic improvement actions - The company has incurred significant recurring operating losses, recurring negative cash flows, and continued reduction in liquidity[64](index=64&type=chunk) - These factors have caused the company to determine there is substantial doubt about its ability to continue as a going concern[64](index=64&type=chunk) - Strategic actions are being implemented to improve liquidity, increase operating efficiency and revenues, and ensure business continuity, but success is not assured[64](index=64&type=chunk) [Risks Related to Our Business and Industry](index=12&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) Dynatronics faces business and industry risks including reliance on third-party manufacturers, supply chain disruptions, inflation, a history of net losses, extensive government regulations, and market access limitations from GPOs - Reliance on third-party manufacturers for electrotherapy products poses risks related to quality, effectiveness, and supply interruptions[65](index=65&type=chunk)[66](index=66&type=chunk) - Supply chain disruptions due to weather, natural disasters, pandemics, government action, or geopolitical instability (e.g., Russia-Ukraine conflict, Middle East tensions) could impair manufacturing and sales[68](index=68&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - The company has a history of net losses (**13 out of 14 previous fiscal years**) and may not sustain profitability, potentially requiring additional funding[77](index=77&type=chunk)[79](index=79&type=chunk) - Extensive government regulations (FDA, FTC, anti-kickback, FCPA) and evolving data privacy laws (GDPR, CCPA, CSL) impose compliance burdens and risks of penalties[85](index=85&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk) - Market access is limited by Group Purchasing Organizations (GPOs), with which the company has been relatively unsuccessful in securing significant contracts[95](index=95&type=chunk) [Risks Related to Our Common Stock](index=22&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) Dynatronics' common stock faces volatility, substantial dilution risks from preferred stock conversions and future issuances, and reduced liquidity due to its transition to the OTCQB Venture Market - The company's stock price has been volatile, ranging from **$0.06 to $0.29** during the year ended June 30, 2025, and is expected to continue fluctuating due to various factors[111](index=111&type=chunk) - Investors may experience substantial dilution from the conversion of Series A and Series B Preferred Stock (convertible into **670,200 common shares**) and future issuances of stock, options, or restricted stock[112](index=112&type=chunk) - The common stock ceased trading on NASDAQ and moved to the OTCQB Venture Market on **July 9, 2024**, which could lead to reduced liquidity, delayed transactions, and potential 'penny stock' designation[120](index=120&type=chunk)[121](index=121&type=chunk) - The company is considering strategies that may result in deregistration under the Exchange Act, which would decrease disclosure and potentially negatively affect liquidity and trading prices[123](index=123&type=chunk) [Item 1B. Unresolved Staff Comments](index=25&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that there are no unresolved staff comments [Item 1C. Cybersecurity](index=26&type=section&id=Item%201C.%20Cybersecurity) Dynatronics relies on IT systems, making it vulnerable to cyber-attacks; it manages these risks through a program based on CIS Critical Security Controls, overseen by the Audit Committee - Failures, damage, or interruptions in information technology systems, including cyber-attacks, could materially affect business operations and results[125](index=125&type=chunk) - The company has a cybersecurity risk management program utilizing the CIS Critical Security Controls framework to protect critical systems and information[126](index=126&type=chunk) - Cybersecurity risk oversight is delegated to the Audit Committee, which receives reports from the Chief Information Officer[128](index=128&type=chunk) [Cybersecurity Risk Management and Strategy](index=26&type=section&id=Cybersecurity%20Risk%20Management%20and%20Strategy) Dynatronics' cybersecurity risk management program includes assessments, a dedicated IT security team, external providers, training, and an incident response plan, with no material threats identified to date - The cybersecurity risk management program includes risk assessments, a dedicated IT security team, external service providers, awareness training, and an incident response plan[130](index=130&type=chunk) - The company has not identified risks from known cybersecurity threats that have materially affected its operations, business strategy, results of operations, or financial condition[127](index=127&type=chunk) [Cybersecurity Governance](index=26&type=section&id=Cybersecurity%20Governance) The Board of Directors delegates cybersecurity risk oversight to the Audit Committee, which monitors management's program and receives reports from the Chief Information Officer - The Board considers cybersecurity risk critical and delegates oversight to the Audit Committee[128](index=128&type=chunk) - The Audit Committee oversees management's cybersecurity risk management program and receives reports from the Chief Information Officer[128](index=128&type=chunk) [Item 2. Properties](index=26&type=section&id=Item%202.%20Properties) Dynatronics leases three primary facilities in Minnesota, New Jersey, and Utah for manufacturing, warehousing, and offices, which are deemed adequate for current and future growth - Dynatronics leases a **57,000 square-foot** manufacturing, warehouse, and office facility in Eagan, Minnesota, with a new lease commencing **April 2025**[129](index=129&type=chunk) - The company leases a **60,000 square-foot** manufacturing and office facility in Northvale, New Jersey, with the lease extended through **March 2028**[130](index=130&type=chunk)[131](index=131&type=chunk) - A **36,000 square-foot** manufacturing, warehouse, and office facility in Cottonwood Heights, Utah, is leased back after being sold in 2014, with the lease terminating in **2029**[132](index=132&type=chunk) [Item 3. Legal Proceedings](index=28&type=section&id=Item%203.%20Legal%20Proceedings) Dynatronics reports no pending legal proceedings of a material nature - There are no pending legal proceedings of a material nature to which Dynatronics is a party or subject[135](index=135&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to Dynatronics PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=29&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Dynatronics' common stock moved to the OTCQB Venture Market on July 9, 2024, experiencing volatility, with 16 million shares outstanding and no cash dividends paid, while preferred stock dividends are paid in common stock - Dynatronics' common stock began trading on the OTCQB Venture Market (symbol: DYNT) on **July 9, 2024**, after ceasing trading on the NASDAQ Capital Market[138](index=138&type=chunk) Common Stock Price Range (High/Low) by Quarter | Fiscal Year Ended June 30, | Quarter | High ($) | Low ($) | | :------------------------- | :------ | :------- | :------ | | 2025 | 1st | 0.29 | 0.11 | | 2025 | 2nd | 0.20 | 0.08 | | 2025 | 3rd | 0.19 | 0.10 | | 2025 | 4th | 0.17 | 0.06 | | 2024 | 1st | 0.91 | 0.69 | | 2024 | 2nd | 0.78 | 0.47 | | 2024 | 3rd | 0.73 | 0.42 | | 2024 | 4th | 0.65 | 0.25 | - As of **October 6, 2025**, there were **16,001,331 shares** of common stock outstanding and approximately **387 shareholders** of record[139](index=139&type=chunk) - The company has never paid cash dividends on common stock and intends to retain earnings to finance business development[140](index=140&type=chunk) - Dividends on Series A and Series B Preferred Stock accrue at **8% annually** and are typically paid in common stock, which can result in significant dilution to common shareholders[141](index=141&type=chunk) [Item 6. [Reserved]](index=29&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Dynatronics' financial condition, highlighting a 15.8% net sales decrease, substantial net loss increase due to impairment charges, and ongoing going concern doubts, alongside strategic plans and critical accounting policies - Net sales decreased by **$5,141,000 (15.8%)** to **$27,393,000** in fiscal year 2025, primarily due to reduced OEM customer volume and lower demand for orthopedic soft bracing products[148](index=148&type=chunk) - Gross profit decreased by **$1,624,000 (21.3%)** to **$6,011,000** in fiscal year 2025, with the gross profit margin falling from **23.5% to 21.9%**[149](index=149&type=chunk) - The company recorded significant impairment charges in fiscal year 2025: **$950,000** for intangible assets and **$7,117,000** for goodwill, contributing to a net loss of **$10,902,000**[152](index=152&type=chunk)[153](index=153&type=chunk)[156](index=156&type=chunk) - Dynatronics faces substantial doubt about its ability to continue as a going concern due to recurring operating losses, negative cash flows, and reduced liquidity, with working capital decreasing from **$2,853,000** in FY2024 to **$718,000** in FY2025[159](index=159&type=chunk)[160](index=160&type=chunk) - The business plan for fiscal 2026 focuses on driving profitability through business optimization, new product launches, enhancing strategic partnerships, disciplined product portfolio management, and pursuing merger and acquisition opportunities[194](index=194&type=chunk)[197](index=197&type=chunk) [Overview](index=29&type=section&id=Overview) Dynatronics designs, manufactures, and sells a wide array of restorative products for physical therapy, rehabilitation, orthopedics, pain management, and athletic training to various licensed practitioners and hospitals - Dynatronics designs, manufactures, and sells restorative products for physical therapy, rehabilitation, orthopedics, pain management, and athletic training[146](index=146&type=chunk) - Products are marketed and sold to orthopedists, physical therapists, chiropractors, athletic trainers, sports medicine practitioners, clinics, and hospitals[146](index=146&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Dynatronics' fiscal year 2025 saw a 15.8% net sales decrease and 21.3% gross profit decline, leading to a substantial net loss increase, primarily due to $8.07 million in impairment charges Key Financial Performance Indicators (FY2025 vs. FY2024) | Metric | FY2025 ($000) | FY2024 ($000) | Change ($000) | Change (%) | | :-------------------------------------- | :------------ | :------------ | :------------ | :--------- | | Net Sales | 27,393 | 32,534 | (5,141) | (15.8%) | | Gross Profit | 6,011 | 7,635 | (1,624) | (21.3%) | | Gross Profit (% of Net Sales) | 21.9% | 23.5% | (1.6 pp) | | | Selling, General, & Administrative Expenses | 8,464 | 9,908 | (1,444) | (14.6%) | | Interest Expense, net | 410 | 418 | (8) | (1.9%) | | Intangible Assets Impairment | 950 | 0 | 950 | N/A | | Goodwill Impairment | 7,117 | 0 | 7,117 | N/A | | Loss Before Income Taxes | (10,889) | (2,698) | (8,191) | (303.6%) | | Net Loss | (10,902) | (2,698) | (8,204) | (304.0%) | | Net Loss Attributable to Common Stockholders | (11,604) | (3,429) | (8,175) | (238.4%) | | Basic and Diluted EPS | (1.43) | (1.00) | (0.43) | (43.0%) | [Fiscal Year 2025 Compared to Fiscal Year 2024](index=30&type=section&id=Fiscal%20Year%202025%20Compared%20to%20Fiscal%20Year%202024) Fiscal year 2025 saw a significant deterioration in financial results compared to 2024, primarily driven by a 15.8% decrease in net sales and substantial impairment charges, leading to a net loss of $10.9 million [Liquidity, Going Concern and Capital Resources](index=31&type=section&id=Liquidity%2C%20Going%20Concern%20and%20Capital%20Resources) Dynatronics' liquidity significantly deteriorated, with cash and working capital decreasing, raising substantial doubt about its going concern ability, prompting a comprehensive plan to improve performance and liquidity Liquidity and Working Capital (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :---------------------- | :------------------- | :------------------- | :------------ | :--------- | | Cash and Cash Equivalents | 326 | 484 | (158) | (32.6%) | | Working Capital | 718 | 2,853 | (2,135) | (74.8%) | | Current Ratio | 1.1:1 | 1.4:1 | (0.3) | | | Operating Losses | (2,453) | (2,273) | (180) | 7.9% | - The company's declining revenues, recurring operating losses, and negative cash flows raise substantial doubt about its ability to continue as a going concern[160](index=160&type=chunk) - A comprehensive plan is being implemented to address challenges, including cost reduction, operational streamlining, product diversification, and transitioning therapeutic modality production to internal operations[161](index=161&type=chunk) - Potential universal tariffs announced in **April 2025** are expected to significantly increase the company's cost of goods sold, impacting future results of operations[162](index=162&type=chunk) [Intangible Assets and Goodwill Impairment](index=33&type=section&id=Intangible%20Assets%20and%20Goodwill%20Impairment) In fiscal year 2025, Dynatronics recorded approximately $950,000 in intangible asset impairment and $7,117,000 in goodwill impairment due to declining gross margins, sales, and negative EBITDA - Impairment charges of approximately **$950,000** for intangible assets and **$7,117,000** for goodwill were recorded in fiscal year 2025[165](index=165&type=chunk) - The impairment assessment was triggered by indicators such as declining gross margins, sales, and negative enterprise-wide EBITDA[164](index=164&type=chunk) - Fair value was measured using discounted cash flows, corroborated by other methods, and is sensitive to assumptions like discount rates, margins, and growth[164](index=164&type=chunk)[165](index=165&type=chunk) [Line of Credit](index=33&type=section&id=Line%20of%20Credit) Dynatronics secured an asset-based financing agreement with Gibraltar Business Capital, LLC on August 1, 2023, for up to $7,500,000, bearing interest at SOFR plus 5.00% and secured by company assets - On **August 1, 2023**, Dynatronics entered a Loan and Security Agreement with Gibraltar Business Capital, LLC for asset-based financing[166](index=166&type=chunk) - The revolving loans are subject to a borrowing base calculation, with a maximum availability of **$7,500,000**, and bear interest at **SOFR plus 5.00%**[166](index=166&type=chunk) - The obligations are secured by a first-priority security interest in substantially all of the company's assets and include various affirmative, negative, and financial covenants[168](index=168&type=chunk)[169](index=169&type=chunk) [Cash, Cash Equivalents and Restricted Cash](index=33&type=section&id=Cash%2C%20Cash%20Equivalents%20and%20Restricted%20Cash) Dynatronics' cash, cash equivalents, and restricted cash decreased by $157,000 to $377,000 as of June 30, 2025, primarily due to finance lease payments and line of credit repayments Cash, Cash Equivalents and Restricted Cash (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :---------------------------------------- | :------------------- | :------------------- | :------------ | :--------- | | Cash, Cash Equivalents and Restricted Cash | 377 | 534 | (157) | (29.4%) | - Primary uses of cash in FY2024 included **$303,000** for finance lease principal payments and **$125,000** for line of credit repayments[171](index=171&type=chunk) - Net cash provided by operations was **$301,000** in FY2024[171](index=171&type=chunk) [Trade Accounts Receivable, net](index=34&type=section&id=Trade%20Accounts%20Receivable%2C%20net) Trade accounts receivable, net, decreased by $644,000 (18.7%) to $2,801,000 as of June 30, 2025, primarily due to reduced revenue and timing differences in collections, with receivables generally collected within 40 days Trade Accounts Receivable, net (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :---------------------------------------- | :------------------- | :------------------- | :------------ | :--------- | | Trade Accounts Receivable, net | 2,801 | 3,445 | (644) | (18.7%) | | Allowance for Credit Losses | 60 | 49 | 11 | 22.4% | - The decrease was driven primarily by a reduction in overall revenue and differences in the timing of collections[172](index=172&type=chunk) - Accounts receivable are generally collected within approximately **40 days** of invoicing[172](index=172&type=chunk) [Inventories, net](index=34&type=section&id=Inventories%2C%20net) Inventories, net of reserves, decreased by $520,000 (9.3%) to $5,074,000 as of June 30, 2025, aligning with sales trends, with an adequate allowance for obsolescence maintained Inventories, net (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :---------------------- | :------------------- | :------------------- | :------------ | :--------- | | Inventories, net | 5,074 | 5,594 | (520) | (9.3%) | | Inventory Valuation Reserve | 553 | 590 | (37) | (6.3%) | - The decrease in inventories was in line with sales trends as safety stock levels for key items are adjusted[173](index=173&type=chunk) [Accounts Payable](index=35&type=section&id=Accounts%20Payable) Accounts payable increased by $692,000 (25.5%) to $3,404,000 as of June 30, 2025, primarily due to the timing of payments Accounts Payable (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :-------------- | :------------------- | :------------------- | :------------ | :--------- | | Accounts Payable | 3,404 | 2,712 | 692 | 25.5% | - The increase was primarily driven by the timing of payments[175](index=175&type=chunk) [Line of Credit](index=35&type=section&id=Line%20of%20Credit) The outstanding balance on the line of credit decreased by $124,711 to $1,997,000 as of June 30, 2025, compared to $2,122,000 in the prior year Line of Credit Outstanding Balance (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :-------------- | :------------------- | :------------------- | :------------ | :--------- | | Line of Credit | 1,997 | 2,122 | (125) | (5.9%) | [Finance Lease Liability](index=35&type=section&id=Finance%20Lease%20Liability) Finance lease liability decreased to $1,429,000 as of June 30, 2025, primarily related to the Utah building lease, with future minimum gross lease payments totaling $1,772,300 through 2030 Finance Lease Liability (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :---------------------- | :------------------- | :------------------- | :------------ | :--------- | | Finance Lease Liability | 1,429 | 1,732 | (303) | (17.5%) | - The finance lease obligations primarily consist of the Utah building lease, a **15-year sale-leaseback agreement**[177](index=177&type=chunk) Future Minimum Gross Finance Lease Payments | Year | Amount ($) | | :--- | :--------- | | 2026 | 420,188 | | 2027 | 428,200 | | 2028 | 428,080 | | 2029 | 424,800 | | 2030 | 71,032 | | Total| 1,772,300 | [Operating Lease Liability](index=35&type=section&id=Operating%20Lease%20Liability) Operating lease liability increased to $3,205,000 as of June 30, 2025, primarily due to building leases for office, manufacturing, and warehouse space Operating Lease Liability (FY2025 vs. FY2024) | Metric | June 30, 2025 ($000) | June 30, 2024 ($000) | Change ($000) | Change (%) | | :----------------------- | :------------------- | :------------------- | :------------ | :--------- | | Operating Lease Liability | 3,205 | 2,834 | 371 | 13.1% | - The liability consists primarily of building leases for office, manufacturing, and warehouse space[178](index=178&type=chunk) [Inflation](index=35&type=section&id=Inflation) Cost inflation, including increases in ocean container rates, raw material prices, labor rates, and domestic transportation, has negatively impacted Dynatronics' profitability, with price adjustments potentially lagging - Cost inflation (ocean container rates, raw material prices, labor rates, domestic transportation costs) has impacted profitability[179](index=179&type=chunk) - The ability to recover increased costs through price increases may lag, resulting in downward pressure on margins[179](index=179&type=chunk) [Stock Repurchase Plan](index=35&type=section&id=Stock%20Repurchase%20Plan) Dynatronics' Board adopted a stock repurchase plan in 2011, with approximately $449,000 remaining available as of June 30, 2025, though no purchases have been made since its inception - A stock repurchase plan was adopted in **2011**, with approximately **$449,000** remaining available as of June 30, 2025[180](index=180&type=chunk) - No purchases have been made under this plan since **2011**[180](index=180&type=chunk) [Critical Accounting Policies](index=35&type=section&id=Critical%20Accounting%20Policies) Dynatronics' critical accounting policies involve significant management estimates for inventory, revenue, credit losses, deferred taxes, and asset impairment, requiring subjective judgments that can materially impact financial statements - Critical accounting policies require management's difficult, subjective, or complex judgments and estimates, particularly for inventory valuation, revenue recognition, allowance for credit losses, deferred income taxes, and impairment of goodwill and long-lived assets[181](index=181&type=chunk) - The company maintains inventory valuation reserves for estimated impairment due to slow-moving, excess, or obsolete inventory[182](index=182&type=chunk) - Revenue is recognized when performance obligations are satisfied upon transfer of product control, with estimates for variable consideration like rebates and discounts[184](index=184&type=chunk) - A full valuation allowance is recorded against net deferred income tax assets due to significant uncertainty about their realizability, given the company's history of losses[190](index=190&type=chunk) [Recent Accounting Pronouncements](index=39&type=section&id=Recent%20Accounting%20Pronouncements) Dynatronics adopted ASU 2020-06 and ASU 2023-07 in fiscal year 2025 with no material impact, and is evaluating several upcoming ASUs for future periods - ASU 2020-06 (Accounting for Convertible Instruments) and ASU 2023-07 (Segment Reporting) were adopted in fiscal year 2025 with no material impact[246](index=246&type=chunk)[247](index=247&type=chunk) - The company is evaluating the impact of several upcoming ASUs, including 2023-09 (Income Tax Disclosures), 2024-03 (Disaggregation of Income Statement Expenses), 2024-04 (Induced Conversions of Convertible Debt), and 2025-05 (Credit Losses for Accounts Receivable and Contract Assets)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk) [Off-Balance Sheet Financing](index=39&type=section&id=Off-Balance%20Sheet%20Financing) Dynatronics has no off-balance sheet debt, similar obligations, undisclosed related-party transactions, or third-party debt guarantees - The company has no off-balance sheet debt or similar obligations[193](index=193&type=chunk) - There are no undisclosed related-party transactions or guarantees of third-party debt[193](index=193&type=chunk) [Business Plan and Outlook](index=39&type=section&id=Business%20Plan%20and%20Outlook) Dynatronics' past year focused on profitability through optimization and new products, while fiscal year 2026 plans include enhancing partnerships, managing its portfolio, and pursuing M&A in core markets - The past year's focus was on driving profitability through business optimization initiatives and new product launches[194](index=194&type=chunk) - For fiscal year 2026, strategies include enhancing key strategic accounts, disciplined product portfolio management, and pursuing M&A opportunities in core markets (physical therapy, rehabilitation, orthopedics, pain management, and athletic training)[194](index=194&type=chunk)[197](index=197&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not applicable [Item 8. Financial Statements and Supplementary Data](index=39&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Dynatronics' audited consolidated financial statements for fiscal years 2025 and 2024, including the auditor's report highlighting going concern doubt and critical audit matters regarding goodwill and intangible asset impairment - The Report of Independent Registered Public Accounting Firm highlights substantial doubt about the company's ability to continue as a going concern[199](index=199&type=chunk) - A critical audit matter involved the complex and highly judgmental estimation of the fair value of goodwill and intangible assets, which resulted in significant impairment charges in fiscal year 2025[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) Consolidated Financial Statements Included | Document | Page | | :------------------------------------------------------------------------ | :--- | | Report of Independent Registered Public Accounting Firm | 21 | | Consolidated Balance Sheets as of June 30, 2025 and 2024 | 22 | | Consolidated Statements of Operations for the years ended June 2025 and 2024 | 23 | | Consolidated Statements of Stockholders' Equity for the years ended June 30, 2025 and 2024 | 24 | | Consolidated Statements of Cash Flows for the years ended June 30, 2025 and 2024 | 25 | | Notes to Consolidated Financial Statements | 26 | [Report of Independent Registered Public Accounting Firm](index=40&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Tanner LLC issued an unqualified opinion on Dynatronics' financial statements but emphasized substantial doubt about the company's going concern ability and identified goodwill and intangible asset fair value estimation as a critical audit matter - Tanner LLC issued an unqualified opinion on the consolidated financial statements for June 30, 2025 and 2024[198](index=198&type=chunk) - The report highlights substantial doubt about the company's ability to continue as a going concern due to its financial situation[199](index=199&type=chunk) - A critical audit matter involved the complex and highly judgmental estimation of the fair value of goodwill and intangible assets, which resulted in impairment charges in fiscal year 2025[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) [Consolidated Balance Sheets](index=41&type=section&id=Consolidated%20Balance%20Sheets) Dynatronics' consolidated balance sheets show total assets decreased from $25.9 million in 2024 to $15.4 million in 2025, primarily due to goodwill impairment, leading to a substantial decrease in total stockholders' equity Consolidated Balance Sheet Summary | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :-------------------------- | :---------------- | :---------------- | | Total Assets | 15,438,942 | 25,940,559 | | Total Liabilities | 12,176,738 | 11,780,115 | | Total Stockholders' Equity | 3,262,204 | 14,160,444 | - Goodwill decreased from **$7,116,614** in 2024 to **$0** in 2025 due to impairment[208](index=208&type=chunk) - Accumulated deficit increased from **$(28,908,169)** in 2024 to **$(40,512,001)** in 2025[208](index=208&type=chunk) [Consolidated Statements of Operations](index=42&type=section&id=Consolidated%20Statements%20of%20Operations) Dynatronics reported a net loss of $10.9 million in fiscal year 2025, a significant increase from $2.7 million in 2024, driven by decreased net sales, lower gross profit, and substantial impairment charges Consolidated Statements of Operations Summary | Metric | 2025 ($) | 2024 ($) | | :-------------------------------------- | :------------ | :------------ | | Net sales | 27,393,163 | 32,533,965 | | Gross profit | 6,011,119 | 7,634,978 | | Selling, general, and administrative expenses | 8,464,424 | 9,908,026 | | Operating loss | (2,453,305) | (2,273,048) | | Intangible assets impairment | (950,293) | - | | Goodwill impairment | (7,116,614) | - | | Net loss | (10,901,609) | (2,697,719) | | Net loss attributable to common stockholders | (11,603,832) | (3,428,592) | | Basic and diluted net loss per common share | (1.43) | (1.00) | [Consolidated Statements of Stockholders' Equity](index=43&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Dynatronics' total stockholders' equity significantly decreased from $14.2 million in 2024 to $3.3 million in 2025, primarily due to a $10.9 million net loss and common stock issuance for preferred dividends Consolidated Statements of Stockholders' Equity Summary | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :-------------------------- | :---------------- | :---------------- | | Common Stock Shares Outstanding | 10,619,543 | 5,308,519 | | Common Stock Amount | 35,793,417 | 35,087,825 | | Preferred Stock Amount | 7,980,788 | 7,980,788 | | Accumulated Deficit | (40,512,001) | (28,908,169) | | Total Stockholders' Equity | 3,262,204 | 14,160,444 | - Net loss of **$10,901,609** was the primary driver for the decrease in total stockholders' equity[212](index=212&type=chunk) - Preferred stock dividends paid in common stock amounted to **$702,223** in 2025 and **$730,873** in 2024[212](index=212&type=chunk) [Consolidated Statements of Cash Flows](index=44&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Dynatronics generated $300,583 in net cash from operating activities in fiscal year 2025, a significant improvement from a net cash use in 2024, largely due to non-cash impairment adjustments Consolidated Statements of Cash Flows Summary | Metric | 2025 ($) | 2024 ($) | | :---------------------------------------- | :------------ | :------------ | | Net cash provided by (used in) operating activities | 300,583 | (1,610,400) | | Net cash used in investing activities | (30,448) | (243,287) | | Net cash (used in) provided by financing activities | (427,709) | 1,835,145 | | Net change in cash, cash equivalents and restricted cash | (157,574) | (18,542) | | Cash, cash equivalents and restricted cash at end of period | 376,754 | 534,328 | - Operating cash flow improved significantly in 2025, turning positive due to large non-cash impairment adjustments[215](index=215&type=chunk) - Cash paid for interest was **$253,014** in 2025, down from **$276,742** in 2024[215](index=215&type=chunk) [Notes to Consolidated Financial Statements](index=45&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The Notes provide detailed information on Dynatronics' accounting policies, financial statement line items, and significant events, including impairment details, going concern doubt, and subsequent events - Note 1 details significant accounting policies, including inventory valuation, trade accounts receivable, property and equipment, goodwill, intangible assets, leases, and revenue recognition[217](index=217&type=chunk)[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[229](index=229&type=chunk)[232](index=232&type=chunk) - Note 4 details intangible asset impairment of **$950,293** and goodwill impairment of **$7,116,614** in fiscal year 2025[258](index=258&type=chunk)[260](index=260&type=chunk) - Note 13 reiterates substantial doubt about the company's ability to continue as a going concern due to recurring operating losses, negative cash flows, and reduced liquidity[288](index=288&type=chunk)[289](index=289&type=chunk)[290](index=290&type=chunk) - Note 16 discloses a subsequent event where the company received a notice of default from its lender for failing to comply with the fixed charge coverage ratio[299](index=299&type=chunk) [Item 9. Changes in Disagreements with Accountants on Accounting and Financial Disclosure](index=64&type=section&id=Item%209.%20Changes%20in%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) This section states that there have been no changes in or disagreements with accountants on accounting and financial disclosure - There are no changes in or disagreements with accountants on accounting and financial disclosure[300](index=300&type=chunk) [Item 9A. Controls and Procedures](index=64&type=section&id=Item%209A.%20Controls%20and%20Procedures) Dynatronics' management concluded that disclosure controls and internal control over financial reporting were effective at a reasonable assurance level as of June 30, 2025, with no material changes during the year - Management concluded that disclosure controls and procedures were effective at a reasonable assurance level as of **June 30, 2025**[302](index=302&type=chunk) - Management assessed and concluded that internal control over financial reporting was effective as of **June 30, 2025**, based on the COSO framework[304](index=304&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control over financial reporting during the year ended **June 30, 2025**[306](index=306&type=chunk) [Item 9B. Other Information](index=64&type=section&id=Item%209B.%20Other%20Information) During the fiscal quarter ended June 30, 2025, no directors or officers informed the company of the adoption, modification, or termination of any Rule 10b-5 trading arrangements - No directors or officers informed the company of changes to Rule 10b-5 trading arrangements during the fiscal quarter ended **June 30, 2025**[307](index=307&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=64&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section states that disclosure regarding foreign jurisdictions that prevent inspections is not applicable PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=65&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information for this item is incorporated by reference to the definitive proxy statement for the **2025 Annual Meeting of Shareholders**[310](index=310&type=chunk) [Item 11. Executive Compensation](index=65&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information for this item is incorporated by reference to the definitive proxy statement for the **2025 Annual Meeting of Shareholders**[311](index=311&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=65&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information for this item is incorporated by reference to the definitive proxy statement for the **2025 Annual Meeting of Shareholders**[312](index=312&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=65&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information for this item is incorporated by reference to the definitive proxy statement for the **2025 Annual Meeting of Shareholders**[313](index=313&type=chunk) [Item 14. Principal Accounting Fees and Services](index=65&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the definitive proxy statement for the 2025 Annual Meeting of Shareholders - Information for this item is incorporated by reference to the definitive proxy statement for the **2025 Annual Meeting of Shareholders**[314](index=314&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=66&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements included in Item 8 and provides an index of exhibits incorporated by reference or filed with the Annual Report on Form 10-K, including corporate documents and agreements - Financial statements required by Item 8 are included in this Annual Report on Form 10-K[316](index=316&type=chunk) - An index of exhibits incorporated by reference or filed with the report is provided[319](index=319&type=chunk) - Exhibits include Amended and Restated Articles of Incorporation, Certificate Designating Preferred Stock, Equity Incentive Plans, Lease Agreements, Loan and Security Agreement, and various certifications[320](index=320&type=chunk)[321](index=321&type=chunk) [Item 16. Form 10-K Summary](index=69&type=section&id=Item%2016.%20Form%2010-K%20Summary) This section indicates that no Form 10-K Summary is provided SIGNATURES [SIGNATURES](index=70&type=section&id=SIGNATURES) The Annual Report on Form 10-K is duly signed on behalf of Dynatronics Corporation by Brian D. Baker, President, CEO, and CFO, along with other directors, all dated October 14, 2025 - The report is signed by Brian D. Baker, President, CEO, and CFO (Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer)[325](index=325&type=chunk)[326](index=326&type=chunk) - Additional signatures include David B. Holtz, Andrew Hulett, Erin S. Enright (Director Chairperson), and R. Scott Ward, Ph.D., all dated **October 14, 2025**[326](index=326&type=chunk)

Washington, D.C. 20549 UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to _______ Commission File Number: 0-12697 Dynatronics Corporation (Exact name of registrant as specified in its charter) Utah 87-0398434 (State or ot ...

Financial Performance - Total net sales for the three months ended December 31, 2024, were $7,300,225, a decrease of 10.5% compared to $8,151,351 for the same period in 2023[12] - Gross profit for the six months ended December 31, 2024, was $3,625,330, down 12.1% from $4,125,921 in the same period of 2023[12] - Net loss attributable to common stockholders for the three months ended December 31, 2024, was $(960,439), compared to $(1,202,660) for the same period in 2023, showing a reduction of 20.2%[12] - Basic and diluted net loss per common share for the three months ended December 31, 2024, was $(0.13), an improvement from $(0.27) in the same period of 2023[12] - For the six months ended December 31, 2024, the net loss was $1,141,475, an improvement from a net loss of $1,342,070 in the same period of 2023, representing a decrease of approximately 15%[18] - Net loss for the quarter ended December 31, 2024, was $775,000, a decrease of $236,000 compared to a net loss of $1,011,000 for the same quarter in 2023[65] Assets and Liabilities - Total current assets increased to $11,100,204 as of December 31, 2024, compared to $10,557,635 as of June 30, 2024, reflecting a growth of 5.2%[9] - Total liabilities rose to $12,743,947 as of December 31, 2024, compared to $11,780,115 as of June 30, 2024, indicating an increase of 8.2%[10] - The accumulated deficit increased to $(30,402,994) as of December 31, 2024, from $(28,908,169) as of June 30, 2024[10] - The net working capital decreased from $2,853,000 as of June 30, 2024, to $1,890,000 as of December 31, 2024, raising concerns about the company's ability to continue as a going concern[27] - Total stockholders' equity decreased to $13,021,369 as of December 31, 2024, down from $14,160,444 as of June 30, 2024, a decline of 8.1%[10] Cash Flow and Liquidity - Cash and cash equivalents increased to $791,010 as of December 31, 2024, from $483,918 as of June 30, 2024, representing a growth of 63.5%[9] - Cash flows from operating activities provided $234,713, a significant recovery compared to a cash outflow of $1,523,339 in the prior year[18] - Cash and cash equivalents at the end of the period increased to $841,420 from $555,180 at the end of the previous year[18] - The company forecasts sufficient liquidity to meet its obligations for the next twelve months from the date of the financial statements' issuance[72] Inventory and Receivables - The company reported an increase in inventories to $6,537,981 as of December 31, 2024, up from $5,593,974 as of June 30, 2024[39] - Trade accounts receivable decreased by approximately $621,000 or 18.0%, to $2,824,000 as of December 31, 2024, driven by reduced overall revenue[81] - Inventories increased by $944,000 or 16.9%, to $6,538,000 as of December 31, 2024, due to increased inventory purchases for safety stock[82] Expenses and Cost Management - Selling, general and administrative (SG&A) expenses decreased by $411,000, or 15.1%, to $2,311,000 for the quarter ended December 31, 2024[60] - The company reduced expenses by approximately $400,000 for fiscal year 2025 and aims for an annualized reduction of $1,000,000 to improve liquidity[27] - The company expects to realize approximately $400,000 in expense reductions for fiscal year 2025 due to cost-control initiatives[71] - The company plans to optimize its operational footprint, potentially yielding cost savings of approximately $600,000 annually[27] Financing and Capital Structure - The Company entered into a Loan Agreement providing asset-based financing with a maximum availability of $7,500,000, bearing interest at SOFR plus 5.00%[75] - The line of credit increased to $2,354,509 as of December 31, 2024, compared to $2,121,667 as of June 30, 2024[40] - The outstanding balance of the line of credit was $2,355,000 as of December 31, 2024, compared to $2,122,000 as of June 30, 2024[84] - Finance lease liability totaled approximately $1,582,000 as of December 31, 2024, down from $1,732,000 as of June 30, 2024[85] - Operating lease liability was approximately $2,741,000 as of December 31, 2024, compared to $2,834,000 as of June 30, 2024[86] Stock and Dividends - Preferred stock dividends paid in common stock amounted to $185,612 during the three months ended December 31, 2024[38] - The company has 1,992,000 shares of Series A 8% Convertible Preferred Stock and 1,359,000 shares of Series B Convertible Preferred Stock outstanding as of December 31, 2024[37] - The Company has a stock repurchase plan with approximately $449,000 remaining as of December 31, 2024, with no purchases made since September 2011[88] Market Conditions - The year-over-year decrease in net sales is attributed to a reduction in overall volume for OEM customers and a general reduction in demand for the orthopedic soft bracing product category[58] - Gross profit for the quarter ended December 31, 2024, decreased by $175,000, or 9.6%, to $1,645,000, representing 22.5% of net sales[59] - The current ratio was 1.2 to 1 as of December 31, 2024, compared to 1.4 to 1 as of June 30, 2024[70]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to _______ Commission File Number: 0-12697 Dynatronics Corporation (Exact name of registrant as specified in its charter) Utah 87-0398434 (State o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2024 . or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ____________. Commission file number 0-12697 Dynatronics Corporation (Exact name of registrant as specified in its charter) Utah 87-0398434 (State or o ...

Core Viewpoint - Dynatronics Corporation is transitioning from Nasdaq to OTC Markets Group due to noncompliance with Nasdaq's minimum bid price requirement, with trading on Nasdaq set to be suspended on July 9, 2024 [3][4]. Company Update - Dynatronics received a written notice from Nasdaq regarding the potential delisting of its common stock if it did not regain compliance by June 24, 2024 [3]. - The company has decided that transitioning to OTCQB is the best course of action, and its common stock will be quoted on OTCQB immediately after the suspension from Nasdaq [4]. - The ticker symbol and CUSIP for the company's common stock are expected to remain unchanged during the transition [4]. - Shareholders are not required to take any action regarding this transition [4]. Business Operations - The transition to OTCQB is not expected to affect the company's business operations, and it will continue to remain a reporting company under the Securities Exchange Act of 1934 [5]. - Dynatronics is a leading manufacturer of athletic training, physical therapy, and rehabilitation products, marketing a broad range of products to various healthcare professionals [6]. - The company operates under well-known industry brands, including Bird & Cronin®, Solaris™, Hausmann®, and PROTEAM™ [6].

Financial Performance - Total net sales for Q3 fiscal year 2024 were $7.7 million, a decrease from $9.2 million in Q3 fiscal year 2023, representing a decline of approximately 16.0%[5] - Gross profit margin for the quarter was 23.7%, down from 23.9% in the same quarter last year[5] - Net loss attributable to common stockholders was $0.9 million, an improvement from a net loss of $1.4 million in Q3 fiscal year 2023[5] - The company estimates net revenue for fiscal year 2024 to be between $32.5 million and $34 million, reflecting slower demand in the rehabilitation space[4] Expenses and Financial Position - Selling, general and administrative expenses (SG&A) are anticipated to be in the range of 30% to 32% of net sales for the fiscal year[6] - As of March 31, 2024, the company had $2.4 million drawn from a working capital asset-based line of credit, with an additional $1.9 million available[5] - Total assets decreased to $27.8 million as of March 31, 2024, down from $30.1 million as of June 30, 2023[16] - Cash and cash equivalents at the end of the period were $0.6 million, slightly up from $0.6 million as of June 30, 2023[5] Product Development - The company introduced three new product lines: Timber, Titan Premier, and Forged, aimed at enhancing the existing sales base[2] Market Outlook - The company expects ongoing volatility due to broader economic challenges, including competitive pressures and supply chain disruptions[7]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Address of principal executive offices, Zip Code) For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________to _______ Commission File Number: 0-12697 Dynatronics Corporation (Exact name of registrant as spe ...

Financial Data and Key Metrics Changes - Net sales for Q2 fiscal year 2024 were $8.2 million, down from $10.9 million in the same period of fiscal year 2023, primarily due to a competitor acquisition by a major customer and reduced demand in the orthopedic soft bracing category [11] - Gross profit for the quarter was $1.8 million, representing 22.3% of net sales, compared to $3.1 million or 28.1% of net sales in the prior year, driven by lower sales and product margins [12] - Net loss for Q2 fiscal year 2024 was $1.0 million, compared to a net loss of $0.8 million in the same period of fiscal year 2023 [14] Business Line Data and Key Metrics Changes - The company is focusing on new product development based on customer feedback, with plans for a limited launch in Q3 and a full launch in Q4 of fiscal year 2024 [7] - The operations team has improved stock manufacturing and reduced lead times, leading to a decrease in backorders and faster revenue recognition [8] Market Data and Key Metrics Changes - There has been a slowdown in new facility openings among larger groups, impacting demand for physical therapy services [21] - Ongoing demand for replacement equipment in the rehabilitation space continues to be observed [27] Company Strategy and Development Direction - The company aims to strengthen customer relationships while improving operating profitability and financial flexibility [19] - The focus for fiscal year 2024 includes managing inventory effectively to maintain high service levels [26] Management Comments on Operating Environment and Future Outlook - Management has adjusted revenue guidance for fiscal year 2024 to the lower end of the range, estimating net revenue between $34 million and $37 million due to slower demand in the rehabilitation space [17] - There is no current guidance on gross margins as the company seeks stabilization before providing new forecasts [18] Other Important Information - Selling, general and administrative expenses decreased by $1.1 million or 29% to $2.7 million for the quarter, primarily due to reduced salaries and benefits [13] - The net cash balance remained unchanged at approximately $0.6 million as of December 31, 2023 [14] Q&A Session Summary Question: Market Demand for Physical Therapy Services - Management noted a slowdown in new facility openings among larger groups, which is affecting demand for physical therapy services [21][23] Question: Inventory Position - Management expressed satisfaction with the current inventory levels, indicating they are optimized to meet customer demand [26] Question: New Product Opportunities - Management highlighted that customers are identifying gaps in the product portfolio, which will lead to incremental revenue as new products are developed [28]