DYNATRONICS CORP. CODE OF BUSINESS ETHICS

To All Employees, Directors and Officers of Dynatronics:

Introduction

Dynatronics Corporation is founded on the vision of manufacturing the best available physical therapy, aesthetics and other medical products.  This vision is integral to the operations of the company at all levels. Dynatronics is committed to the highest ethical standards and to conducting its business with the highest level of integrity.

We must adhere to these standards and core values if Dynatronics is to continue to be a market leader.  Every Dynatronics employee is responsible for the consequences of his or her actions; in particular, executive management, directors and management level employees are the primary guardians of the company’s ethics. Management and members of the board of directors have the added responsibility of setting an example by their personal performance and an attitude that conveys our ethical values.  However, we expect all Dynatronics employees to adhere to these values if we are to be successful.

Any employee with concerns over violations of the Ethics as outlined herein may discuss them with an officer of the Company or follow the procedures outlined in this Code of Business Ethics.

Business Ethics

We expect each employee of Dynatronics, regardless of their position or location, to conduct his or her affairs with uncompromising honesty and integrity. All Dynatronics employees, officers and directors are required to adhere to the highest standard of conduct, honesty and integrity, regardless of local custom.  All Dynatronics employees, officers and directors are expected to be honest and ethical in dealing with each other and with customers, regulators, vendors and all other third parties.

Respect for the rights of fellow employees and third parties is essential. Actions must be free from illegal discrimination, libel, slander or harassment. Each person must be accorded equal opportunity, regardless of age, race, sex, sexual preference, color, creed, religion, national origin, marital status, veteran's status, handicap or disability.

Misconduct cannot be excused because it was directed or requested by another. In this regard, management should be alerted whenever an illegal, dishonest or unethical act is discovered or suspected. No employee will ever be penalized for reporting such discoveries or suspicions.

Dynatronics conducts its affairs consistent with the applicable laws and regulations of the countries where it does business. Business practices, customs and laws differ from country to country. When conflicts arise between the company’s ethical practices, and the practices, customs, and the laws of a country, we seek to resolve them consistent with our ethical beliefs. If the conflict cannot be resolved consistent with our company’s ethical beliefs, Dynatronics will not proceed with the proposed action giving rise to the conflict. These ethical standards reflect who we are and the standards by which we choose to be judged.

The following statements address frequently raised ethical concerns. A violation of the standards contained in this Code of Business Ethics will result in corrective action, including possible dismissal.  Other items related to ethical practices listed in the Company’s Employee Handbook also apply.

Public Reports

Dynatronics is a public company.  We file regular required reports with the Securities and Exchange Commission.  Our common stock is traded on the Nasdaq SmallCap Market and we file copies of our SEC reports with NASDAQ.  Our reports and other documents filed with the SEC and NASDAQ are made publicly available and are posted on our corporate website. In addition we make public announcements on a current basis of material developments at the company. Our policy and practice will be to ensure that all disclosure made in reports and documents and statements that Dynatronics files with, or submits to, the Securities and Exchange Commission and in other public communications are full, fair, accurate, timely, and understandable.

Any employee responsible for assisting in the preparation or review of any report filed under applicable state or federal securities laws or other regulatory standards must assure that the information contained in the report, particularly in the section or parts of the reports for which the employee is specifically responsible, are complete, accurate and true in every respect.  Furthermore these reports must not contain any misrepresentation of any fact or omit any fact that might be material to a complete understanding of the company’s results of operations or financial condition or in any other way be misleading to the public.  Any material misstatement or omission or any suspected fraud in connection with these reports should be reported to management without fear of reprisal or punishment.

Conflicts of Interest

Each employee must avoid any personal activity, investment or association that could appear to interfere with good judgment concerning the company’s best interests. The Audit Committee of the Board of Directors must review and approve all proposed transactions involving the company on the one hand, and any officer or director or significant shareholder of Dynatronics on the other.

No employee, officer or director of Dynatronics may exploit his or her position or relationship with Dynatronics for personal gain. You should avoid even the appearance of such a conflict. For example, there is a likely conflict of interest if an officer, director or employee of Dynatronics should:

• Cause Dynatronics to engage in business transactions with relatives or friends that would not redound to the benefit of Dynatronics or that would place you or your relatives or friends in a position of conflict with the interests of the company;
• Use nonpublic Dynatronics, customer, or vendor information for personal gain by you, your relatives or friends (including securities transactions based on such information);
• Have more than a modest financial interest in any vendor, customer or competitor;
• Receive a loan, or guarantee of obligations, from Dynatronics or a third party as a result of your position at the company; or
• Compete, or prepare to compete, with Dynatronics while still employed by the company.

There are other situations in which a conflict of interest may arise. If you have concerns about any situation, follow the steps outlined in the Section on "Reporting Ethical Violations."

Gifts, Bribes and Kickbacks

Other than modest gifts given or received in the normal course of business (including travel or entertainment), neither an employee or their relatives may give gifts to, or receive gifts from, the company’s customers, clients and vendors. Other gifts may be given or accepted only with prior approval of senior management. In no event should Dynatronics or the employee be put in a position that would be embarrassing if the gift was made public.

Dealing with government employees is often different legally than dealing with private persons. Many governmental bodies strictly prohibit the receipt of any gratuities by their employees, including meals and entertainment. You must be aware of and strictly follow these prohibitions.

Any employee, officer or director who pays or receives bribes or kickbacks will be immediately terminated and reported, as warranted, to the appropriate authorities. A kickback or bribe includes any item intended to improperly obtain favorable treatment, regardless of the appropriateness of such a practice in local custom or law.

Improper Use or Theft of Company Property

Every employee, officer and director is expected to safeguard company property from loss or theft, and no employee may take such property for personal use without permission of management. Dynatronics property includes confidential information, software, computers, office equipment, and supplies. You must appropriately secure all company property within your control to prevent its unauthorized use.

Covering Mistakes; Falsifying Records; Document Preservation

Mistakes should never be hidden, but should be immediately and fully disclosed and corrected. Falsification of any company, client or third party record is prohibited. The company’s policy for preservation of corporate documents must be followed.

Abuse of Company, Customer, or Vendor Information

You may not use or reveal company, customer, or vendor confidential or proprietary information to others. This includes business methods, pricing and marketing data, strategy, product information, computer code, screens, forms, experimental research, and information about the company’s current, former and prospective products, markets, or customers.

Sales: Defamation and Misrepresentation

Aggressive selling should not include misstatements, innuendo or rumors about our competition or their products and financial condition. Do not make unsupportable promises concerning our products.

Use of Company and Third Party Software

Dynatronics and third party software may be distributed and disclosed only to persons authorized to use it under applicable license agreements.

Dynatronics and third party software may not be copied without specific authorization and may only be used to perform assigned responsibilities.

All third-party software must be properly licensed. The license agreements for such third party software may place various restrictions on the disclosure, use and copying of software.

Developing Software and Other Products

Employees involved in the design, development, testing, modification or maintenance of software or other products must not tarnish or undermine the legitimacy and "cleanliness" of Dynatronics' products by copying or using unauthorized third party software or proprietary or confidential information. No employee may possess, use or discuss proprietary computer code, output, documentation or trade secrets of a non-Dynatronics party, unless authorized by such party.

Fair Dealing

No Dynatronics employee, officer or director should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice.

Fair Competition and Antitrust Laws

Dynatronics must comply with all applicable fair competition and antitrust laws. These laws attempt to ensure that businesses compete fairly and honestly and prohibit conduct seeking to reduce or restrain competition. If you are uncertain whether a contemplated action raises unfair competition or antitrust issues, the company’s outside legal counsel can assist you.

Securities Trading

It is illegal to buy or sell securities using material information not available to the public. Persons who give such undisclosed "inside" information to others might be as liable as persons who trade securities while possessing such information. Securities laws may be violated if an employee or relative trade in the company’s securities, or in the securities of any of our business partners or vendors, while possessing "inside" information. Employees are encouraged to consult with our legal counsel or senior management if they have any questions in this regard.  Corporate trading blackout periods must be adhered to and if you are a reporting person, you must file all reports under Section 16 of the Securities Exchange Act in a timely manner.

Political Contributions

No company funds may be given directly to political candidates without authorization. You may, however, engage in political activity with your own resources on your own time.

Waivers

This Code of Business Ethics applies to all Dynatronics employees and its Board of Directors. There shall be no waiver of any part of the Code, except by a vote of the Board of Directors or a designated committee, which will ascertain whether a waiver is appropriate and ensure that the waiver is accompanied by appropriate controls designed to protect the company.
 

Reporting Ethical Violations

Employee conduct can reinforce an ethical atmosphere and positively influence the conduct of fellow employees and directors. If an employee is powerless to stop suspected misconduct or discovers it after it has occurred, report it to a supervisor or to the appropriate level of management.

If such reporting does not adequately resolve the matter or if the matter is sufficiently sensitive that it is uncomfortable bringing the matter to the attention of management (for whatever reason), the employee may anonymously send a note, with relevant documents, to:

Dynatronics Corporation
c/o Howard Edwards
Chairman – Audit Committee
P.O. Box 680934
Park City, UT  84068

All information thusly sent will be dealt with anonymously and confidentially and the reporting employee protected from retaliation.

Conclusion

In the final analysis our Corporate Code of Ethics is only of value if adopted by each employee. While it is impossible to establish rules to cover every conceivable situation, when in doubt ask the following:

• Will my actions be ethical in every respect and fully comply with the law and with company policies?
• Will my actions have the appearance of impropriety?
• Will my supervisors, co-workers, and family or the general public, question my actions?
• Am I trying to fool anyone, including myself, as to the propriety of my actions?

If uncomfortable with the answers to any of the above, do not take the contemplated actions without first discussing them with local management. If still uncomfortable, please follow the steps outlined above in the Section on "Reporting Ethical Violations."

Any employee who ignores or violates these ethical standards, and any manager who penalizes a subordinate for trying to follow these ethical standards, will be subject to corrective action, including the possibility of immediate dismissal. However, it is not the threat of discipline that should govern actions. We hope each employee shares our belief that a dedicated commitment to ethical behavior is the right thing to do, is good business, and is the surest way to effectively promote the vision of Dynatronics.

Sincerely,

DYNATRONICS MANAGEMENT