Form 8-K - Current report

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): November 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. ☐

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 November 2, 2023, Pro-Dex, Inc. (the “Company”) is issuing a press release announcing its financial performance for the first quarter and three months ended September 30, 2023. 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.

(d) Exhibits.

Exhibit Number

Description

99.1

Press Release dated November 2, 2023.

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: November 2, 2023	Pro-Dex, Inc.


	By:	/s/ Alisha K. Charlton
		Alisha K. Charlton
		Chief Financial Officer

Exhibit 99.1

Contact: Richard L. Van Kirk, Chief Executive Officer

(949) 769-3200

For Immediate Release

PRO-DEX, INC. ANNOUNCES FISCAL 2024 FIRST QUARTER RESULTS

IRVINE, CA, November 2, 2023 - PRO-DEX, INC. (NasdaqCM: PDEX) today announced financial results for its fiscal 2024 first quarter ended September 30, 2023. The Company also filed its Quarterly Report on Form 10-Q for the first quarter of fiscal year 2024 with the Securities and Exchange Commission today.

Net sales for the three months ended September 30, 2023, increased $851,000, or 8%, to $11.9 million from $11.1 million for the three months ended September 30, 2022. The increase is driven primarily by $1.8 million in increased repairs of the surgical handpiece we sell to our largest customer offset primarily by a decrease of $0.7 million in sales of our NRE & proto-type offerings.

Gross profit for the three months ended September 30, 2023, increased $702,000, or 24%, compared to the year-ago period. Gross margin increased by 4 percentage points to 31% during the three months ended September 30, 2023, compared to 27% during the corresponding year-ago period, due primarily to the prior year cost of sales including approximately $450,000 in repair costs to upgrade the handpiece we sell our largest customer at no additional costs. We had no similar expenses in the current fiscal year.

Operating expenses (which include selling, general and administrative, and research and development expenses) for the quarter ended September 30, 2023, decreased $181,000 from the corresponding year-ago period. The decrease resulted from decreased research and development expenses as we have fewer expenses related to internal development projects in the first quarter of fiscal 2024 compared to the corresponding period of the prior fiscal year.

Net loss for the quarter ended September 30, 2023, was $615,000, or $0.17 per diluted share, compared to net income of $1.2 million, or $0.33 per diluted share, for the quarter ended September 30, 2022. Our net loss includes non-operating expense of $2.7 million for the quarter ended September 30, 2023, consisting primarily of unrealized losses on investments of $2.6 million. Most of the unrealized loss on investments relates to our Warrant to purchase common stock of Monogram Orthopaedics Inc. (NasdaqCM: MGRM), which had a $2.5 million reduction in estimated fair value for the first quarter ended September 30, 2023, but still has an estimated fair value of $3.7 million as of September 30, 2023. Our investments are recorded at estimated fair value, and the valuation can be highly volatile.

CEO Comments

Richard L. (“Rick”) Van Kirk, the Company’s President and Chief Executive Officer, commented, “We are pleased with our first quarter results and excited to share that sales for the first quarter ended September 30, 2023, includes approximately $1.1 million related to the launch of a new product in our Thoracic driver product line.” Mr. Van Kirk concluded, “We are confident that with our assembly and repairs operations fully transitioned to the Franklin facility we are poised for continued long-term growth.”

About Pro-Dex, Inc.:

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 that appeal to our customers, primarily medical device distributors. Pro-Dex also sells compact pneumatic air motors for a variety of industrial applications. 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, 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 risk factors and other disclosures 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 SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share amounts)

	September 30, 2023		June 30, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	1,904	$	2,936
Investments		1,010		1,134
Accounts receivable, net of allowance for credit losses of $0 at September 30, 2023 and at June 30, 2023, respectively		11,034		9,952
Deferred costs		591		494
Income taxes receivable		420		—
Inventory		16,264		16,167
Prepaid expenses and other current assets		201		296
Total current assets		31,424		30,979
Land and building, net		6,226		6,249
Equipment and leasehold improvements, net		4,952		5,079
Right-of-use asset, net		1,774		1,872
Intangibles, net		75		81
Investments		5,092		7,521
Other assets		42		42
Total assets	$	49,585	$	51,823

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	2,740	$	2,261
Accrued liabilities		2,701		3,135
Income taxes payable		—		453
Notes payable		2,840		3,827
Total current liabilities		8,281		9,676
Lease liability, net of current portion		1,529		1,638
Deferred income taxes, net		8		8
Notes payable, net of current portion		8,572		8,911
Total non-current liabilities		10,109		10,557
Total liabilities		18,390		20,233

Shareholders’ Equity:
Common stock; no par value; 50,000,000 shares authorized; 3,547,330 and 3,545,309 shares issued and outstanding at September 30, 2023 and June 30, 2023, respectively		6,987		6,767
Retained earnings		24,208		24,823
Total shareholders’ equity		31,195		31,590
Total liabilities and shareholders’ equity	$	49,585	$	51,823

PRO-DEX, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended September 30,
	2023			2022
				(as restated)

Net sales	$	11,938		$	11,087
Cost of sales		8,280			8,131
Gross profit		3,658			2,956

Operating expenses:
Selling expenses		25			53
General and administrative expenses		995			1,024
Research and development costs		805			929
Total operating expenses		1,825			2,006
Operating income		1,833			950
Other income (expense):
Interest and dividend income		24			218
Realized gain on sale of marketable equity investments		—			6
Unrealized gain on marketable equity investments		(2,553	)		425
Interest expense		(133	)		(130	)
Total other income		(2,662	)		519

Income before income taxes		(829	)		1,469
Provision for income taxes		(214	)		266
Net income	$	(615	)	$	1,203

Basic and diluted net income per share:
Basic net income per share	$	(0.17	)	$	0.33
Diluted net income per share	$	(0.17	)	$	0.33

Weighted average common shares outstanding:
Basic		3,546,737			3,616,392
Diluted		3,546,737			3,694,959
Common shares outstanding		3,547,330			3,606,422

Cover	Nov. 02, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 02, 2023
Entity File Number	0-14942
Entity Registrant Name	PRO-DEX, INC.
Entity Central Index Key	0000788920
Entity Tax Identification Number	84-1261240
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	2361 McGaw Avenue
Entity Address, City or Town	Irvine
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92614
City Area Code	(949)
Local Phone Number	769-3200
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value
Trading Symbol	PDEX
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false