# EDGAR Filing Document

**Accession Number:** 0000788920
**File Stem:** 0001553350-23-000063
**Filing Date:** 2023-2
**Character Count:** 14512
**Document Hash:** f408efd577b4b93630134dd16775f1b2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001553350-23-000063.hdr.sgml**: 20230202

**ACCESSION NUMBER**: 0001553350-23-000063

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230202

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230202

**DATE AS OF CHANGE**: 20230202

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PRO DEX INC
- **CENTRAL INDEX KEY:** 0000788920
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
- **IRS NUMBER:** 841261240
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-14942
- **FILM NUMBER:** 23580826

**BUSINESS ADDRESS:**
- **STREET 1:** 2361 MCGAW AVENUE
- **CITY:** IRVINE
- **STATE:** CA
- **ZIP:** 92614
- **BUSINESS PHONE:** 949-769-3231

**MAIL ADDRESS:**
- **STREET 1:** 2361 MCGAW AVENUE
- **CITY:** IRVINE
- **STATE:** CA
- **ZIP:** 92614

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRO-DEX, INC.
- **DATE OF NAME CHANGE:** 20151110

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CONTEXT CAPITAL FUNDS
- **DATE OF NAME CHANGE:** 20151104

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** PRO DEX INC
- **DATE OF NAME CHANGE:** 19920703

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of Report (Date of earliest event reported): **February 2, 2023**

**PRO-DEX, INC.**

*(Exact name of registrant as specified in charter)*

---

| | | |
|:---|:---|:---|
| **Colorado** | **0-14942** | **84-1261240** |
| *(State or other jurisdiction of incorporation)* | *(Commission File Number)* | *(IRS Employer Identification Number)* |

---

**2361 McGaw Avenue**

**Irvine, California 92614**

*(Address of principal executive offices, zip code)*

**(949) 769-3200**

*(Registrant's telephone number including area code)*

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol(s)** | **Name of each exchange on which registered** |
| Common Stock, no par value | PDEX | NASDAQ Capital Market |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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| | |
|:---|:---|
| **Item 2.02.** | **Results of Operations and Financial Condition.** |

---

The information in this Item 2.02 of this Form 8-K, as well as Exhibit 99.1 attached hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On February 2, 2023, Pro-Dex, Inc. (the "Company") is issuing a press release announcing its financial performance for the second quarter and six months ended December 31, 2022. A copy of the press release is attached to this Form 8-K as Exhibit 99.1, which is incorporated herein by this reference.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Exhibits

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 99.1 | [Press Release dated February 2, 2023.](pdex_ex99z1.htm) |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: February 2, 2023 | **Pro-Dex, Inc.** | **Pro-Dex, Inc.** |
|  | By: | /s/ Alisha K. Charlton |
|  |  | Alisha K. Charlton |
|  |  | Chief Financial Officer |

---

**INDEX TO EXHIBITS**

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| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 99.1 | [Press Release dated February 2, 2023.](pdex_ex99z1.htm) |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |

---

## Exhibit 99.1

**EXHIBIT 99.1**

Contact: Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200

***For Immediate Release***

**PRO-DEX, INC. ANNOUNCES FISCAL 2023 SECOND QUARTER**

**AND SIX-MONTH RESULTS**

**IRVINE, CA,** February 2, 2023 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2023 second quarter ended December 31, 2022. The Company also filed its Quarterly Report on Form 10-Q for the second quarter of fiscal year 2023 with the Securities and Exchange Commission today.

**<u>Quarter Ended December 31, 2022</u>**

Net sales for the three months ended December 31, 2022 increased $1.1 million, or 11%, to $11.3 million from $10.2 million for the three months ended December 31, 2021, due primarily to sales of the orthopedic surgical handpiece that we sell to our largest customer coupled with increased repair revenue of that same handpiece.

Gross profit for the three months ended December 31, 2022 decreased $781,000, or 23%, to $2.6 million from $3.4 million for the same period in fiscal 2022, due to continuing price increases for components, especially chips for our printed circuit board assemblies, as well higher repair costs for the surgical handpiece that we sell to our largest customer. As previously disclosed, beginning in fiscal 2023 and continuing through the end of the second quarter of fiscal 2023, we began implementing a customer upgrade request for our largest customer. We have proceeded in good faith to upgrade all units returned for repair to the newest release of the handpiece while we continue to negotiate with this customer to obtain additional compensation for these more costly upgraded repairs.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended December 31, 2022 decreased $316,000, or 18%, to $1.5 million compared to $1.8 million in the prior fiscal year's corresponding quarter, reflecting in part the higher number of billable engineering projects in the current fiscal quarter compared to the same period in the prior fiscal year and reduced general and administrative expenses mostly due to declining non-cash stock compensation expense.

Net income for the quarter ended December 31, 2022 was $879,000, or $0.24 per diluted share, compared to $925,000, or $0.25 per diluted share, for the corresponding quarter in fiscal 2022.

**<u>Six Months Ended December 31, 2022</u>**

Net sales for the six months ended December 31, 2022 increased $2.2 million, or 11%, to $22.4 million from $20.2 million for the six months ended December 31, 2021, due primarily to increased repair revenue from the orthopedic surgical handpiece that we sell to our largest customer and increased non-recurring engineering and proto-type revenue.

Gross profit for the six months ended December 31, 2022 decreased $1.3 million, or 18%, compared to the same period in fiscal 2022 due to the increased costs incurred in the repairs of the surgical handpiece we sell to our largest customer as described above, continuing component price increases, and higher cost structures in our machine shop, assembly, materials, and quality departments.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the six months ended December 31, 2022 decreased $420,000, or 11%, to $3.5 million compared to $3.9 million in the prior fiscal year's corresponding period.

Net income for the six months ended December 31, 2022 and 2021 remained flat at $2.0 million, or $0.53 per diluted share.

**<u>CEO Comments</u>**

Richard L. ("Rick") Van Kirk, the Company's President and Chief Executive Officer, commented, "We are pleased with our second quarter and year-to-date results especially considering the challenging environment facing businesses today." Mr. Van Kirk continued, "We are excited to begin operations in the Franklin facility this fiscal quarter and we remain positive that the building will allow for our continued expected growth."

**<u>About Pro-Dex, Inc.:</u>**

Pro-Dex, Inc. specializes in the design, development, and manufacture of autoclavable, battery-powered and electric, multi-function surgical drivers and shavers used primarily in the orthopedic, thoracic, and maxocranial facial markets. We have patented adoptive torque-limiting software and proprietary sealing solutions which appeal to our customers, primarily medical device distributors. Pro-Dex, Inc. also sells rotary air motors to a wide range of industries. Pro-Dex's products are found in hospitals and medical engineering labs around the world. For more information, visit the Company's website at www.pro-dex.com.

Statements herein concerning the Company's plans, growth, and strategies may include 'forward-looking statements' within the context of the federal securities laws. Statements regarding the Company's future events, developments, and future performance (including, but not limited to, the anticipated commencement of operations in the Franklin facility and expected future growth), as well as management's expectations, beliefs, plans, estimates, or projections relating to the future, are forward-looking statements within the meaning of these laws. The Company's actual results may differ materially from those suggested as a result of various factors. Interested parties should refer to the disclosure concerning the operational and business concerns of the Company set forth in the Company's filings with the Securities and Exchange Commission.

(tables follow)

**PRO-DEX, INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**(Unaudited)**

**(In thousands, except share amounts)**

---

| | | |
|:---|:---|:---|
|  | **December 31, <br> 2022** | **June 30, <br>2022** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $382 | $849 |
| Investments | 1134 | 755 |
| Accounts receivable, net of allowance for doubtful accounts of $2 and $0 at December 31, 2022 and at June 30, 2022, respectively | 12195 | 15384 |
| Deferred costs | 877 | 710 |
| Inventory | 15135 | 12678 |
| Prepaid expenses and other current assets | 1664 | 790 |
| Total current assets | 31387 | 31166 |
| Land and building, net | 6296 | 6343 |
| Equipment and leasehold improvements, net | 5203 | 4833 |
| Right-of-use asset, net | 2063 | 2248 |
| Intangibles, net | 98 | 118 |
| Deferred income taxes, net | 764 | 797 |
| Investments | 1726 | 1779 |
| Other assets | 42 | 42 |
| Total assets | $47579 | $47326 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |
| Current liabilities: |  |  |
| Accounts payable | $3364 | $3761 |
| Accrued expenses | 3314 | 2751 |
| Income taxes payable | 1026 | 544 |
| Deferred revenue | 851 | 1013 |
| Notes payable | 3110 | 3285 |
| Total current liabilities | 11665 | 11354 |
| Lease liability, net of current portion | 1850 | 2054 |
| Notes payable, net of current portion | 9590 | 10250 |
| Total non-current liabilities | 11440 | 12304 |
| Total liabilities | 23105 | 23658 |
| Shareholders' equity: |  |  |
| Common shares; no par value; 50,000,000 shares authorized; 3,553,929 and 3,596,131 shares issued and outstanding at December 31, 2022 and June 30, 2022, respectively | 6533 | 7682 |
| Retained earnings | 17941 | 15986 |
| Total shareholders' equity | 24474 | 23668 |
| Total liabilities and shareholders' equity | $47579 | $47326 |

---

**PRO-DEX, INC. AND SUBSIDIARIES**

**CONDENSED CONSOLIDATED STATEMENTS OF INCOME**

**(Unaudited)**

**(In thousands, except per share amounts)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br> December 31,** | **Three Months Ended<br> December 31,** | **Six Months Ended<br> December 31,** | **Six Months Ended<br> December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Net sales | $11282 | $10173 | $22369 | $20161 |
| Cost of sales | 8659 | 6769 | 16791 | 13329 |
| Gross profit | 2623 | 3404 | 5578 | 6832 |
| Operating expenses: |  |  |  |  |
| Selling expenses | 68 | 22 | 122 | 59 |
| General and administrative expenses | 951 | 1165 | 1975 | 2257 |
| Research and development costs | 467 | 615 | 1395 | 1596 |
| Total operating expenses | 1486 | 1802 | 3492 | 3912 |
| Operating income | 1137 | 1602 | 2086 | 2920 |
| Interest expense | (128) | (117) | (258) | (237) |
| Unrealized gain (loss) on marketable equity investments | 158 | (300) | 408 | (152) |
| Interest and other income | 7 | 25 | 225 | 49 |
| Gain on sale of investments |  |  | 7 |  |
| Income before income taxes | 1174 | 1210 | 2468 | 2580 |
| Income tax expense | (295) | (285) | (513) | (592) |
| Net income | $879 | $925 | $1955 | $1988 |
| Basic net income per share: |  |  |  |  |
| Net income | $0.25 | $0.25 | $0.54 | $0.54 |
| Diluted net income per share: |  |  |  |  |
| Net income | $0.24 | $0.25 | $0.53 | $0.53 |
| Weighted average common shares outstanding: |  |  |  |  |
| Basic | 3574 | 3657 | 3595 | 3654 |
| Diluted | 3652 | 3767 | 3672 | 3774 |
| Common shares outstanding | 3554 | 3642 | 3554 | 3642 |

---