Company: PDEX
Filing Date: 2025-01-30
Form Type: 10-Q
Source: 0001079973-25-000164
Chunk: 30

Company: PRO DEX INC
Filing Date: 2025-01-30
Form: 10-Q
Item: Item 2
Chunk 30
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 that we held on December 31, 2024.

ITEM 3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not
applicable.

ITEM
4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls
and Procedures

Our
Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our
principal financial officer and principal accounting officer) have concluded based on their evaluation as of December 31, 2024, that our
“disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,
as amended (“Exchange Act”)) are not effective due to a material weakness. The term “disclosure
controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act, means controls and other procedures of a company
that are designed to ensure that
information required to be disclosed by the
company in the reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified
in the SEC’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed
to ensure that information required to be disclosed by a company
in the reports that it files or submits under the Exchange Act
is accumulated and communicated to the company’s management, including its principal
executive officer and principal financial officer and principal accounting officer, or persons performing similar functions, as appropriate,
to allow timely decisions regarding required disclosure.

A
material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of a company’s annual and interim financial statements will not be detected
or prevented on a timely basis. A material weakness was discovered relating to controls related to the existence of inventory during fiscal
2024 and we are continuing to remediate this weakness. While we believe that our inventory exists and is accurately recorded and properly
valued at December 31, 2024, we are continuing to expand our internal controls over the existence of inventory and have hired a warehouse
manager in the second quarter of fiscal 2025 to ensure that we successfully implement effective standard operating procedures, provide
adequate training to stockroom personnel, and continue our cycle count procedures.

Internal
Control over Financial Reporting

During
the three