Item 1.02 Termination of a Material Definitive Agreement.

Effective October 6, 2021, Dynatronics Corporation (the "Company") provided notice of termination for its Master Service Agreement ("Agreement") with Millstone Medical Outsourcing, LLC ("Millstone") under which Millstone provided fulfillment and distribution services. The Company will exit Millstone's facility by December 31, 2021, after which, the Agreement will be terminated. The Company agreed to pay Millstone the contractual monthly fees up through December, 2021.

Management believes this action is consistent with the Company's objective of improving gross margins and profitability following the completion of previously announced strategic actions to optimize the business by eliminating approximately 1,600 SKUs of low-margin, third-party distributed products.

The foregoing summary of the terms and conditions of the Agreement is qualified in its entirety by reference to the Agreement, which will be filed as an exhibit to the Company's Form 10-Q for the quarter ended September 30, 2021.

Cautionary Note Regarding Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that describe future outcomes or expectations that are usually identified by words such as "will," "should," "could," "plan," "intend," "expect," "continue," "forecast," "objective," "believe," and "anticipate" and include, for example, any statement made regarding the Company's future results. Actual results may differ materially as a result of various risks and uncertainties, including circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current business initiatives, including the outsourcing of manufacturing and assembly functions and any related reduction in workforce; and those other risks and uncertainties expressed in the cautionary statements and risk factors in the Company's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. The Company may not be able to predict and may have little or no control over many factors or events that may influence its future results and, except as required by law, shall have no obligation to update any forward-looking statements.

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