PART I — FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) For the nine months ended March 31, 2023, Pro-Dex, Inc. reported a 20.5% increase in net sales to $35.4 million and a 33.4% increase in net income to $3.3 million compared to the prior year period [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2023, total assets were $47.0 million, a slight decrease from $47.3 million at June 30, 2022, primarily due to a reduction in accounts receivable offset by increases in cash and inventory Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | June 30, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | $31,145 | $31,166 | ($21) | | Cash and cash equivalents | $2,088 | $849 | $1,239 | | Accounts receivable, net | $10,565 | $15,384 | ($4,819) | | Inventory | $15,145 | $12,678 | $2,467 | | **Total Assets** | **$46,975** | **$47,326** | **($351)** | | **Total Current Liabilities** | $10,144 | $11,354 | ($1,210) | | **Total Liabilities** | **$21,136** | **$23,658** | **($2,522)** | | **Total Shareholders' Equity** | **$25,839** | **$23,668** | **$2,171** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the third quarter of fiscal 2023, net sales grew 41.2% year-over-year to $13.1 million, driving net income up 184.2% to $1.3 million, while nine-month net sales increased 20.5% to $35.4 million and net income rose 33.4% to $3.3 million Financial Performance (in thousands, except per share amounts) | Metric | Q3 2023 | Q3 2022 | YoY Change | Nine Months 2023 | Nine Months 2022 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $13,079 | $9,265 | +41.2% | $35,448 | $29,426 | +20.5% | | **Gross Profit** | $3,811 | $2,858 | +33.3% | $9,390 | $9,689 | -3.1% | | **Operating Income** | $2,065 | $1,021 | +102.3% | $4,152 | $3,940 | +5.4% | | **Net Income** | $1,313 | $462 | +184.2% | $3,268 | $2,450 | +33.4% | | **Diluted EPS** | $0.36 | $0.12 | +200.0% | $0.89 | $0.65 | +36.9% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2023, net cash provided by operating activities was $4.8 million, a slight increase from $4.4 million in the prior year period, primarily driven by net income and strong accounts receivable collections Cash Flow Summary for the Nine Months Ended March 31 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $4,835 | $4,432 | | Net cash used in investing activities | ($733) | ($1,636) | | Net cash used in financing activities | ($2,863) | ($1,756) | | **Net increase in cash and cash equivalents** | **$1,239** | **$1,040** | | **Cash and cash equivalents, end of period** | **$2,088** | **$4,761** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business, which specializes in surgical drivers and shavers, highlighting high customer concentration, ongoing share repurchases, and significant debt with Minnesota Bank & Trust, with the company in compliance with all covenants - The company specializes in the design, development, and manufacture of autoclavable, battery-powered, and electric multi-function surgical drivers and shavers for various medical markets[24](index=24&type=chunk) Customer Concentration (Nine Months Ended March 31, 2023) | Metric | Customer 1 | Customer 2 | Total | | :--- | :--- | :--- | :--- | | **Net Sales** | $23,578 (66%) | $5,912 (17%) | $29,490 (83%) | | **Accounts Receivable** | $7,861 (74%) | $2,100 (20%) | $9,961 (94%) | - During the nine months ended March 31, 2023, the company repurchased **86,422 shares** of its common stock for an aggregate cost of **$1.5 million** under its share repurchase program[77](index=77&type=chunk) - As of March 31, 2023, the company had several loans outstanding with **Minnesota Bank & Trust (MBT)**, including a **Property Loan**, **Term Loan A**, **Term Loan B**, and an **Amended Revolving Loan**, and believes it is in compliance with all debt covenants[66](index=66&type=chunk)[68](index=68&type=chunk)[76](index=76&type=chunk) [Management's Discussion and Analysis (MD&A)](index=21&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the 41% Q3 revenue growth primarily to a 189% increase in repair revenue from its largest customer, related to a handpiece upgrade program, while gross margin for the nine-month period decreased by 7 percentage points to 26% [Business Strategy and Future Plans](index=22&type=section&id=Business%20Strategy%20and%20Future%20Plans) The company's strategy centers on its medical device business, focusing on maintaining customer relationships, expanding manufacturing capacity via the new Franklin Property, investing in R&D for new Pro-Dex branded drivers, and pursuing new product development proposals - The company's largest customer executed an amendment to their supply agreement, extending the supply of surgical handpieces through **calendar 2025**[93](index=93&type=chunk) - The company acquired the 'Franklin Property' to expand manufacturing capacity and expects to begin operations in the new facility during the **fourth quarter of the current fiscal year**[94](index=94&type=chunk) - Strategic objectives include investing in R&D for branded drivers leveraging proprietary torque-limiting software and promoting development proposals for new medical devices to new and existing customers[95](index=95&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) For Q3 2023, revenue increased 41% YoY, driven by a $3.2 million (189%) surge in repair revenue and a 7% rise in medical device product sales, while gross margin declined from 33% to 26% for the nine-month period due to higher costs and under-absorbed manufacturing expenses Revenue Breakdown (in thousands) | Revenue Type | Q3 2023 | Q3 2022 | Nine Months 2023 | Nine Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Medical device products | $6,990 | $6,527 | $23,631 | $23,199 | | NRE & Proto-type | $970 | $549 | $2,361 | $859 | | Repairs and other | $4,816 | $1,665 | $8,583 | $4,245 | | **Total Net Sales** | **$13,079** | **$9,265** | **$35,448** | **$29,426** | - Repair revenue increased by **$3.2 million (189%)** for the third quarter and **$4.3 million (102%)** for the nine months, driven by an upgrade and enhanced repair program for the orthopedic handpiece sold to its largest customer[103](index=103&type=chunk) Gross Margin Performance | Period | 2023 | 2022 | YoY Change (ppt) | | :--- | :--- | :--- | :--- | | **Three Months Ended March 31** | 29% | 31% | (2) | | **Nine Months Ended March 31** | 26% | 33% | (7) | - General and administrative (G&A) expenses decreased by **$419,000** for the nine months ended March 31, 2023, primarily due to reduced legal/settlement expenses and lower non-cash stock compensation[112](index=112&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2023, the company had $2.1 million in cash and $21.0 million in working capital, with operating activities generating $4.8 million in cash for the nine-month period, and believes existing cash, cash flows, and available credit are sufficient to fund operations for the next 12 months Key Liquidity Metrics (as of March 31, 2023, in thousands) | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $2,088 | | Working capital | $21,001 | - Net cash used in financing activities for the nine months ended March 31, 2023, was **$2.9 million**, primarily for **$1.5 million** in common stock repurchases and **$4.8 million** in debt payments, offset by **$3.6 million** in new borrowings[131](index=131&type=chunk) - The company has an Amended Revolving Loan with MBT, with an availability of **$5.2 million** as of March 31, 2023, which can be used for liquidity needs[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company has indicated that this section is not applicable - The company states that this item is not applicable[136](index=136&type=chunk) [Controls and Procedures](index=30&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Based on an evaluation as of March 31, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective, with no material changes in internal controls over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2023, the company's disclosure controls and procedures were effective[139](index=139&type=chunk) - No changes in internal controls over financial reporting occurred during the three months ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, these controls[140](index=140&type=chunk) PART II — OTHER INFORMATION [Legal Proceedings](index=31&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company states that it may be involved in various legal proceedings from time to time in the ordinary course of business, but does not disclose any specific material proceedings - The company may be involved in various legal proceedings arising in the ordinary course of business, but there is no certainty of material adverse liability[82](index=82&type=chunk)[144](index=144&type=chunk) [Risk Factors](index=31&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2022 - No material changes have been made to the risk factors as disclosed in the Annual Report on Form 10-K for the fiscal year ended June 30, 2022[146](index=146&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During the third quarter ended March 31, 2023, the company repurchased a total of 11,576 shares of its common stock at an average price of $17.13 per share under its publicly announced repurchase program Common Stock Repurchases (Quarter Ended March 31, 2023) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2023 | 6,047 | $17.17 | | February 2023 | 5,529 | $17.09 | | March 2023 | 0 | $0.00 | | **Total** | **11,576** | **$17.13** | [Exhibits](index=32&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including officer certifications and XBRL data files - The report includes a list of filed exhibits, such as CEO/CFO certifications (Exhibits 31.1, 31.2, 32) and XBRL interactive data files (Exhibit 101 series)[149](index=149&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 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: 0-14942 PRO-DEX, INC. (Exact name of registrant as specified in its charter) ——————— (State or other jurisdic ...

Financial Performance - Net sales for the three months ended September 30, 2022, were $11,087,000, an increase of 11% from $9,988,000 in the same period of 2021[89]. - Gross profit decreased to $2,956,000 (27% of net sales) in Q1 FY2023 from $3,428,000 (34% of net sales) in Q1 FY2022[89]. - Medical device sales accounted for 71% of total net sales in Q1 FY2023, down from 83% in Q1 FY2022, reflecting a 5% decrease in revenue[90]. - Cost of sales increased by $1.6 million, or 24%, for the three months ended September 30, 2022, compared to the same period in the prior fiscal year, driven by a 15% increase in product costs[95]. - Gross profit decreased by approximately $472,000, or 14%, for the three months ended September 30, 2022, with gross margin declining by seven percentage points due to higher component and repair costs[96]. - Operating expenses totaled $2.006 million, representing 18% of net sales, a decrease of 5% compared to the prior year[98]. Research and Development - Research and development costs were $929,000 (8% of net sales) in Q1 FY2023, compared to $980,000 (10% of net sales) in Q1 FY2022[89]. - Research and development costs decreased by $51,000, or 5%, for the quarter ended September 30, 2022, with a focus on sustaining activities and customer-funded projects[100]. Cash Flow and Working Capital - Cash and cash equivalents increased by $1.9 million to $2.8 million as of September 30, 2022, compared to $0.9 million at June 30, 2022[111]. - Net cash provided by operating activities was $2.9 million for the three months ended September 30, 2022, primarily due to a decrease in accounts receivable[113]. - Net cash used in investing activities was $90,000, primarily for equipment purchases at the Franklin Property[115]. - Net cash used in financing activities included $318,000 in principal payments on loans and $354,000 for common stock repurchase[118]. - Working capital as of September 30, 2022, was $20.2 million, with sufficient funds expected to meet cash requirements for at least the next 12 months[120]. Sales and Marketing - Selling expenses rose to $53,000 in Q1 FY2023 from $37,000 in Q1 FY2022[89]. - Selling expenses increased by $16,000, or 43%, primarily due to higher sales commissions[98]. - The company continues to focus on maintaining relationships with existing customers while actively proposing new medical device products[84]. Backlog and Future Operations - The backlog at September 30, 2022, was approximately $26.6 million, with $18.6 million scheduled for delivery during the remainder of FY2023[94]. - The company expects to begin operations in a new facility in Tustin, California, during the third quarter of FY2023, enhancing manufacturing capacity[83]. Revenue Streams - Repair revenue increased by $793,000 in Q1 FY2023, attributed to an increased number of repairs for orthopedic handpieces[92]. - Non-recurring engineering (NRE) and prototype revenue surged by 363% to $907,000 in Q1 FY2023, driven by an increase in billable contracts[90].

Financial Performance - Net sales for fiscal 2022 were $42.041 million, an increase of $4.012 million or 11% compared to $38.029 million in fiscal 2021[133] - Gross profit margin decreased to 31% in fiscal 2022 from 36% in fiscal 2021, with cost of sales rising to $28.909 million, representing 69% of net sales[133] - Operating income for fiscal 2022 was $5.123 million, maintaining a consistent 12% of net sales compared to fiscal 2021[133] - Net income for fiscal 2022 was $3.855 million, a decrease of 34% from $5.821 million in fiscal 2021[133] - Total cost of sales increased by $4.5 million, or 18%, in fiscal 2022, driven by higher product costs and material expenses[140] Sales Breakdown - Medical device sales accounted for 81% of total net sales in fiscal 2022, with orthopedic sales increasing by 21% to $21.877 million[135] - The proportion of total sales from repairs increased by 33% to $6.610 million in fiscal 2022[135] - Sales of industrial and scientific products increased by $65,000, or 8%, in fiscal 2022 compared to fiscal 2021[136] - Dental products sales rose by $304,000, or 189%, in fiscal 2022, primarily due to excess inventory sales[137] - Repair revenue increased by approximately $1.7 million, or 33%, to $6.6 million in fiscal 2022[138] Research and Development - Research and development costs decreased to $2.980 million, representing 7% of net sales, down from 11% in fiscal 2021[133] - Research and development costs decreased by $1.4 million, or 32%, from fiscal 2021 to 2022, due to a shift towards billable customer projects[143] Revenue Growth - The company experienced a significant increase in non-recurring engineering (NRE) and prototype services revenue, which rose by 213% to $1.014 million[135] - Revenue from NRE & prototype services surged by $690,000, or 213%, compared to fiscal 2021[136] Operational Challenges - The company faced supply chain challenges due to the COVID-19 pandemic, but managed to mitigate anticipated declines in sales by sourcing replacement components[115] - The company has experienced negative operating cash flow in the past due to long-lead time materials procurement[161] Cash Management - Cash used in operating activities totaled $847,000 in fiscal 2022, with a net income of $3.9 million[154] - As of June 30, 2022, working capital was $19.8 million, indicating sufficient funds to meet cash requirements for the next 12 months[160] - The company is focused on preserving cash balances by monitoring expenses and identifying cost savings, while potentially requiring debt or equity capital for working capital needs[161] - As of June 30, 2022, the company held $2.5 million in marketable public equity securities, which included unrealized holding losses of $262,000[162] Share Repurchase Program - A new share repurchase program was approved in December 2019, allowing the repurchase of up to one million shares of common stock[163] - During the fiscal year ended June 30, 2022, the company repurchased 75,250 shares at an aggregate cost of $1.6 million[165] - Cumulatively, the company has repurchased a total of 1,110,746 shares at an aggregate cost of $15.7 million under the share repurchase programs[165] - The previous share repurchase plan authorized the repurchase of 750,000 shares, which was nearing completion[163] - All repurchases under the 10b5-1 Plans were administered through an independent broker[165] Future Outlook - The company continues to focus on long-term growth despite short-term challenges, with positive long-term prospects expected[115] - Backlog at June 30, 2022, was $16.5 million, up from $9.7 million at June 30, 2021[139] - The Investment Committee is responsible for implementing the Surplus Capital Investment Policy, which was approved by the Board[164] - The company may reinstate its ATM Agreement to sell additional shares if needed[161]

Sales Performance - Medical device product sales decreased by $4.1 million, or 39%, for the three months ended March 31, 2022, compared to the same period in the prior fiscal year [100]. - Total net sales for the three months ended March 31, 2022, were $9.265 million, down from $11.739 million in the same period of 2021 [99]. - Revenue from orthopedic medical devices was $3.233 million, representing 50% of total medical device sales for the three months ended March 31, 2022 [100]. - The proportion of medical device products in total sales was 70% for the three months ended March 31, 2022, down from 91% in the same period of 2021 [99]. - Sales of compact pneumatic air motors increased by $113,000, or 54%, for the three months ended March 31, 2022, compared to the same period in the prior fiscal year [101]. - Dental products and components sales increased by $179,000, or 746%, and $250,000, or 255%, for the three and nine months ended March 31, 2022, respectively, compared to the prior fiscal year [102]. - Repair revenue rose by $858,000, or 106%, and $284,000, or 7%, for the three and nine months ended March 31, 2022, respectively, due to increased repairs of orthopedic handpieces [103]. Financial Outlook - The company anticipates continued revenue growth, although it may not be consistent, with periods of incremental growth expected [95]. - As of March 31, 2022, the company had a backlog of approximately $21.2 million, with $7.9 million scheduled for delivery in the fourth quarter of fiscal 2022 [104]. Cost and Expenses - Total cost of sales for the three months ended March 31, 2022, decreased by $947,000, or 13%, compared to the prior fiscal year, driven by a 21% decrease in revenue [106]. - Gross profit decreased by approximately $1.5 million, or 35%, for the three months ended March 31, 2022, consistent with the overall decrease in revenue [107]. - Operating expenses for the three months ended March 31, 2022, decreased by $697,000, or 28%, compared to the corresponding period of the prior fiscal year [110]. - Research and development costs for the three months ended March 31, 2022, decreased by $446,000, primarily due to increased spending on billable development projects [112]. - The company has a product roadmap to develop future products, with research and development costs representing between 36% and 49% of total operating expenses [113]. Cash Flow and Liquidity - Cash and cash equivalents increased by $1.0 million to $4.8 million as of March 31, 2022, compared to $3.7 million at June 30, 2021 [122]. - Net cash provided by operating activities was $4.4 million for the nine months ended March 31, 2022, primarily due to net income of $2.4 million and a decrease in accounts receivable of $2.3 million [124]. - Net cash used in investing activities was $1.6 million for the nine months ended March 31, 2022, primarily for equipment purchases of $1.3 million related to the Franklin Property [126]. - Net cash used in financing activities totaled $1.8 million for the nine months ended March 31, 2022, primarily due to the repurchase of 52,718 shares of common stock for $1.3 million [128]. - Working capital as of March 31, 2022, was $20.4 million, indicating sufficient funds to meet cash requirements for at least the next 12 months [130]. - The company may liquidate investments or borrow against a $2.0 million Revolving Loan to enhance liquidity [130]. - The company experienced negative operating cash flow in the past due to long-lead time materials procurement [131]. Investment Activities - The Investment Committee approved investments totaling $2.9 million in marketable public equity securities as of March 31, 2022 [132].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended DECEMBER 31, 2021 OR Commission file number: 0-14942 PRO-DEX, INC. (Exact name of registrant as specified in its charter) ——————— (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) COLORADO 84-1261240 2361 McGaw Avenue, Irvine, California 92614 (Addres ...

Financial Performance - Net sales for the three months ended September 30, 2021, were $9,988,000, a 16% increase from $8,590,000 in the same period of 2020[92] - Gross profit decreased to $3,428,000 (34% of net sales) in Q1 2022 from $3,475,000 (40% of net sales) in Q1 2021[92] - Medical device sales increased by $1,544,000 (23%) to $8,284,000 in Q1 2022 compared to $6,740,000 in Q1 2021[94] - Orthopedic sales rose by $2,017,000 (55%) to $5,706,000, while CMF sales increased by $862,000 (57%) to $2,387,000[94] - For the three months ended September 30, 2021, total cost of sales increased by $1.4 million, or 28%, compared to the same period in the prior fiscal year, while gross profit decreased by approximately $47,000, or 1%[99][100] Research and Development - Research and development costs were $980,000 (10% of net sales) in Q1 2022, down from $1,091,000 (13% of net sales) in Q1 2021[92] - Research and development costs for the quarter ended September 30, 2021, totaled $980,000, a decrease of $111,000, or 10%, compared to the prior year[104][107] - The company expects to launch the ENT Shaver and VITAL Ventilator in Q4 2021 and Q1 2022, respectively, with estimated annual revenues of $1 million and $1.5 million[107] Customer and Revenue Agreements - The largest customer has extended the supply agreement for surgical handpieces through calendar 2025, ensuring continued revenue[84] - Non-recurring engineering and prototype revenue surged by 1,860% to $196,000 in Q1 2022, compared to $10,000 in Q1 2021[94] - Repair revenue decreased by $168,000 due to fewer repairs of the orthopedic handpiece sold to the largest customer[96] - Discounts and other increased by $216,000 due to volume rebates negotiated with the largest customer[97] Operational Capacity and Backlog - The company expects to begin operations in a new facility in Tustin, California, during the second quarter, aimed at expanding manufacturing capacity[86] - As of September 30, 2021, the company had a backlog of approximately $12.8 million, with $12.6 million scheduled for delivery during the remainder of fiscal 2022[98] Cash Flow and Financial Position - Cash and cash equivalents increased by $1.5 million to $5.2 million as of September 30, 2021, compared to $3.7 million at June 30, 2021[113] - Net cash provided by operating activities for the three months ended September 30, 2021, totaled $2.7 million, primarily driven by a net income of $1.1 million[115] - The company’s working capital as of September 30, 2021, was $19.8 million, indicating sufficient funds to meet cash requirements for at least the next 12 months[120] Expenses - Selling expenses decreased by $93,000, or 72%, for the three months ended September 30, 2021, primarily due to reduced personnel-related expenses[102] - General and administrative expenses increased by $388,000, or 55%, for the three months ended September 30, 2021, mainly due to non-cash compensation expenses[103] Taxation - The effective tax rate for the three months ended September 30, 2021, was 22%, compared to 20% for the same period in 2020[111]

Financial Performance - Net sales for the fiscal year ended June 30, 2021, increased by $3.2 million, or 9%, to $38.0 million compared to $34.8 million in fiscal 2020[134] - Medical device sales accounted for 85% of total net sales in fiscal 2021, with a 21% increase from $26.6 million in fiscal 2020 to $32.1 million[135] - Sales to the second largest customer increased by $4.2 million to $10.1 million, primarily due to increased sales of the thoracic driver[136] - The company reported a gross profit of $13.6 million, representing 36% of net sales, down from 38% in the previous year[134] - Operating income decreased to $4.5 million, or 12% of net sales, from $7.1 million, or 20% of net sales, in the prior year[134] Research and Development - Research and development costs rose to $4.4 million, or 11% of net sales, compared to $2.3 million, or 7% of net sales, in fiscal 2020[134] - Research and development costs surged by $2.1 million, or 89%, from fiscal 2020 to 2021, totaling $4.38 million[144] - The company recognized an expected loss on product development services of $71,000 in fiscal 2021, compared to $370,000 in fiscal 2020[121] - The proportion of NRE and Prototype services revenue decreased by 61% from $834,000 in fiscal 2020 to $324,000 in fiscal 2021[135] Operating Expenses - Total operating expenses rose to $9.05 million in fiscal 2021, a 49% increase from $6.08 million in fiscal 2020[142] - Cost of sales increased by $2.8 million, or 13%, from fiscal 2020 to 2021, primarily due to a 9% increase in net sales[141] - Repair revenue decreased by approximately $1.4 million, or 22%, to $5.0 million due to reduced repairs of orthopedic handpieces[138] Cash Flow and Financing - Cash used in operating activities during fiscal 2021 was $2.08 million, with a net income of $4.5 million[155] - Cash provided by financing activities totaled $3.1 million in fiscal 2021, including $9.1 million in loans from Minnesota Bank and Trust[159] - The company repurchased 216,171 shares at a cost of $5.5 million during fiscal 2021, compared to 231,274 shares for $3.4 million in fiscal 2020[165] Assets and Liabilities - The company had a backlog of $9.7 million at June 30, 2021, up from $7.0 million at June 30, 2020[139] - As of June 30, 2021, working capital was $19.1 million, indicating sufficient funds for operations for at least the next 12 months[161] - Inventory and warranty charges increased by $372,000 in fiscal 2021 compared to fiscal 2020, reflecting higher volume sales and product development activity[141] - Adoption of ASU 2016-02 (Topic 842) resulted in an increase of approximately $3.3 million in long-term assets and total liabilities as of July 1, 2019[166] Tax and Investment - The effective tax rate decreased from 23% in fiscal 2020 to 21% in fiscal 2021 due to increased research and development credits[153] - The company generated $4.6 million from the sale of marketable equity securities in fiscal 2021, recording a gain of $1.3 million[151] - No new accounting pronouncements are expected to have a material impact on the consolidated financial statements during the fiscal year[167] - The company has established an Investment Committee responsible for implementing investment policies[167]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2021 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: 0-14942 PRO-DEX, INC. (Exact name of registrant as specified in its charter) ——————— COLORADO 84-1261240 (State ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ——————— FORM 10-Q (Exact name of registrant as specified in its charter) ——————— COLORADO 84-1261240 þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended DECEMBER 31, 2020 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: 0-14942 PRO-DEX, INC. (Sta ...