What changed in this filing

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Item 9A. Controls and Procedures

2023-10-13 compared with 2022-09-08 · 217 added, 99 removed, 79 unchanged (80% of the section changed)

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 June 30, 2022, that the design and operation of 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 effective

at a reasonable assurance level to ensure that information required to be disclosed by us in the reports filed or submitted by us under

the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms,

including to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated

and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely

decisions regarding required disclosure.

Our management is responsible for

establishing and maintaining adequate “internal control over financial reporting” (as defined in Rule 13a-15(f) under the

Exchange Act).

Under the supervision and with the participation of our management, including our principal executive officer, principal

financial officer, and principal accounting officer, we conducted an evaluation of the effectiveness of our internal control over financial

reporting based on the framework set forth in the 2013 Internal Control – Integrated Framework issued by the Committee of

Sponsoring Organizations of the Treadway Commission in May 2013.

Based on this evaluation, our management concluded that our internal

control over financial reporting was effective as of June 30, 2022.

Our internal control over financial

reporting is supported by written policies and procedures that:

(1) pertain to the maintenance of

records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(2) provide reasonable assurance

that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting

principles, and that receipts and expenditures of our Company are being made only in accordance with authorizations of our management

and directors;

(3) provide reasonable assurance

regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect

on the financial statements.

Because of its inherent limitations,

internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of

compliance with the policies or procedures may deteriorate.

This annual report does not include

an attestation report of our registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that apply to certain smaller

reporting companies that permit us to provide only management’s attestation in this annual report.

During the quarter ended June 30,

2022, there were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange

Act) that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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 June 30, 2023, that the design and operation of 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”)) were not effective at a reasonable assurance level to ensure that information required to be disclosed by us in the reports

filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in

the SEC’s rules and forms, including to ensure that information required to be disclosed by us in the reports we file or submit

under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer,

as appropriate to allow timely decisions regarding required disclosure.

management is responsible for establishing and maintaining adequate “internal control over financial reporting” (as defined

in Rule 13a-15(f) under the Exchange Act).

Under the supervision and with the participation of our management, including our principal

executive officer, principal financial officer, and principal accounting officer, we conducted an evaluation of the effectiveness of

our internal control over financial reporting based on the framework set forth in the 2013 Internal Control – Integrated Framework

issued by the Committee of Sponsoring Organizations of the Treadway Commission in May 2013.

Based on this evaluation, and as a result

of the material weakness described below, our management concluded that our internal control over financial reporting was not effective

as of June 30, 2023.

internal control over financial reporting is supported by written policies and procedures that:

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

with generally accepted accounting principles, and that receipts and expenditures of our Company are being made only in accordance with

authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that

could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that apply

to certain smaller reporting companies that permit us to provide only management’s attestation in this annual report.

Material Weakness

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.

In connection with preparing

our financial statements for the year ended June 30, 2023, and evaluating the fair value of one of our investments, we re-evaluated the

guidance in ASC Topic 815, Derivatives and Hedging and determined upon reassessment that the historical de minimis values we assigned

to the Monogram Warrant were incorrect.

We have determined that there is a deficiency in the design of the Company’s internal control

relating to the valuation and disclosure of level 3 financial instruments, including the valuation of warrant derivative instruments.

As a result, we have concluded that the Company’s internal control over financial reporting was not effective as of the end of each

of the periods covered by the restatement.

In connection with the restatement, the Company has identified a material weakness in internal

control over financial reporting related to its investment in the Monogram Warrant.

Remediation Measures

Management is committed

to implementing changes to our internal control over financial reporting to ensure our material weakness is remediated.

To remediate this

material weakness, we are in the process of improving the design of our control related to to the valuation and disclosure of level 3

financial instruments.

Management believes the control will prevent the conditions that led to the material weakness described above.

While the foregoing measures

are intended to effectively remediate the material weakness described in Item 9A, and these procedures will be applied to any future warrant,

derivative or other level 3 instrument we receive, it is possible that additional remediation steps will be necessary.

As such, as we

continue to evaluate and implement our plan to remediate the material weakness, our management may decide to take additional measures

to address the material weakness.

The material weakness cannot be considered remediated until the applicable controls operate for a period

of time and management has concluded, through testing, that these controls are operating effectively.

We plan to continue to perform additional

analyses and other procedures to help ensure that our consolidated financial statements are prepared in accordance with GAAP.

Internal Control Over Financial Reporting

as discussed above, during the quarter ended June 30, 2023, there were no changes in our internal controls over financial reporting (as

defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially

affect, our internal controls over financial reporting.

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this Item is incorporated herein by reference

to our definitive Proxy Statement, which will be filed within 120 days of June 30, 2022, and delivered to shareholders in connection

with our 2022 annual meeting of shareholders.

The information required

by this Item is incorporated herein by reference to our definitive Proxy Statement, which will be filed within 120 days of June 30,

2023, and delivered to shareholders in connection with our 2023 annual meeting of shareholders.

EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference

to our definitive Proxy Statement, which will be filed within 120 days of June 30, 2022, and delivered to shareholders in connection

with our 2022 annual meeting of shareholders.

The information required

by this Item is incorporated herein by reference to our definitive Proxy Statement, which will be filed within 120 days of June 30,

2023, and delivered to shareholders in connection with our 2023 annual meeting of shareholders.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated herein by reference

to our definitive Proxy Statement, which will be filed within 120 days of June 30, 2022, and delivered to shareholders in connection

with our 2022 annual meeting of shareholders.

The information required

by this Item is incorporated herein by reference to our definitive Proxy Statement, which will be filed within 120 days of June 30,

2023, and delivered to shareholders in connection with our 2023 annual meeting of shareholders.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated herein by reference

to our definitive Proxy Statement, which will be filed within 120 days of June 30, 2022, and delivered to shareholders in connection

with our 2022 annual meeting of shareholders.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by this Item is incorporated herein by reference

to our definitive Proxy Statement, which will be filed within 120 days of June 30, 2022, and delivered to shareholders in connection

with our 2022 annual meeting of shareholders.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)(3) Exhibits

Reference is made to the Exhibit Index beginning

on page 56 of this report.

The information required

by this Item is incorporated herein by reference to our definitive Proxy Statement, which will be filed within 120 days of June 30,

2023, and delivered to shareholders in connection with our 2023 annual meeting of shareholders.

PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required

by this Item is incorporated herein by reference to our definitive Proxy Statement, which will be filed within 120 days of June 30,

2023, and delivered to shareholders in connection with our 2023 annual meeting of shareholders.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements and Financial Statement Schedules

(1) Financial Statements are listed in the index included under Item 8 of this Report.

Articles of Incorporation

Articles of Amendment to Articles of Incorporation

Amended and Restated Bylaws, dated January 31, 2011

Description of Company's Common Stock Registered Pursuant to Section 12 of the Securities Act of 1934

Second Amended and restated 2004 Stock Option Plan

Amended and Restated 2004 Directors Stock Option Plan

Pro-Dex, Inc.

2016 Equity Incentive Plan

Form of Indemnification Agreement for directors and certain officers

Lease agreement with Irvine Business Properties, dated August 3, 2007

First Amendment to Lease - July 2013 by and between Irvine Business Properties and Pro-Dex, Inc.

dated effective July 1, 2013

Pro-Dex, Inc.

Amended and Restated Employee Severance Policy effective as of September 16, 2016

Second Amended to Standard Industrial/Commercial Multi-Tenant Lease - Net by and between Irvine

Business Properties and Pro-Dex, Inc., dated September 19, 2017

Form of Performance Award Agreement for Employees of Pro-Dex, Inc.

- 2016 Equity Incentive Plan

Credit Agreement, dated September 6, 2018 between Pro-Dex, Inc.

and Minnesota Bank & Trust

Security Agreement, dated September 6, 2018 by Pro-Dex, Inc.

in favor of Minnesota Bank & Trust

Term Note A, dated September 6, 2018 by Pro-Dex, Inc.

in favor of Minnesota Bank & Trust

Revolving Credit Note, dated September 6, 2018 by Pro-Dex, Inc.

in favor of Minnesota Bank &

Change in Terms Agreement dated September 6, 2018 by Pro-Dex, Inc.

in favor of Minnesota Bank &

Standard Offer, Agreement and Escrow Instructions for Purchase of Real Estate by and between Pro-Dex,

and 14401 Franklin, LLC

Loan Agreement dated November 6, 2020 made by and between PDEX Franklin LLC and Minnesota Bank

Term Note dated November 6, 2020 made by PDEX Franklin LLC in favor of Minnesota Bank & Trust

Deed of trust with Assignment of Leases and Rents, Security Agreement and Fixture Filing dated

November 6, 2020 by and between PDEX Franklin LLC and Minnesota Bank & Trust

Assignment of Leases and Rents dated November 6, 2020 by and between PDEX Franklin LLC and Minnesota

Amended and Restated Credit Agreement dated November 6, 2020 by and between Pro-Dex, Inc.

and Minnesota

Amended and Restated Term Note A dated November 6, 2020 made by Pro-Dex, Inc.

in favor of Minnesota

Term Note B dated November 6, 2020 made by Pro-Dex, Inc.

in favor of Minnesota Bank & Trust

Amended and Restated Revolving Credit Agreement dated November 6, 2020 made by Pro-Dex, Inc.

favor of Minnesota Bank & Trust

Form of Stock Option Agreement for Directors and Employees of Pro-Dex, Inc.

- 2016 Equity Incentive

At the Market Offering Agreement dated December 31, 2020, by and between Pro-Dex, Inc.

and Ascendiant

Capital Markets, LLC

Amendment No.

1 to Amended and Restated Credit Agreement dated November 5, 2021 by and between

Pro-Dex, Inc.

and Minnesota Bank & Trust

Amended and Restated Revolving Credit Note dated November 5, 2021 made by Pro-Dex, Inc.

of Minnesota Bank & Trust

Amendment No.

2 to Amended and Restated Credit Agreement dated December 29,2022 by and between

Pro-Dex, Inc.

and Minnesota Bank & Trust, a division of HTLF Bank

Amended and Restated Revolving Credit Note dated December 29, 2022made by Pro-Dex, Inc.

of Minnesota Bank & Trust, a division of HTLF Bank

Supplemental Revolving Credit Note dated December 29, 2022 made by Pro-Dex, Inc.

in favor of Minnesota

Bank & Trust, a division of HTLF Bank

Warrant to Purchase Stock dated December 20, 2018 made by Monogram Orthopaedics Inc.

in favor of Pro-Dex, Inc.

Warrant Exercise Side Letter Dated October 2, 2023 by and between Monogram Orthopaedics Inc.

and Pro-Dex, Inc.

Consent of Independent Registered Public Accounting Firm

Certification of the Chief Executive Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Chief Financial Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.

Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Denotes management contract or compensatory arrangement.

FORM 10-K SUMMARY

1 unchanged sentence

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by

the undersigned, thereunto duly authorized, on September 8, 2022.

the undersigned, thereunto duly authorized, on October 13, 2023.

PRO-DEX, INC.

/s/ Richard L.

President, Chief Executive Officer and Director

1 unchanged sentence

POWER OF ATTORNEY

We, the undersigned directors and

officers of Pro-Dex, Inc., do hereby constitute and appoint Richard L.

Van Kirk, as our true and lawful attorney-in-fact and agent with

power of substitution, to do any and all acts and things in our name and behalf in our capacities as directors and officers and to execute

any and all instruments for us and in our names in the capacities indicated below, which such attorney-in-fact and agent may deem necessary

or advisable to enable said corporation to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and

requirements of the Securities and Exchange Commission, in connection with this Annual Report on Form 10-K, including specifically but

without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below, any and all amendments

We, the undersigned directors

and officers of Pro-Dex, Inc., do hereby constitute and appoint Richard L.

Van Kirk, as our true and lawful attorney-in-fact and agent

with power of substitution, to do any and all acts and things in our name and behalf in our capacities as directors and officers and to

execute any and all instruments for us and in our names in the capacities indicated below, which such attorney-in-fact and agent may deem

necessary or advisable to enable said corporation to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations

and requirements of the Securities and Exchange Commission, in connection with this Annual Report on Form 10-K, including specifically

but without limitation, power and authority to sign for us or any of us in our names in the capacities indicated below, any and all amendments

and we do hereby ratify and confirm all that said attorney-in-fact and agent shall do or cause to be done by virtue hereof.

Pursuant to the requirements of

the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the

capacities and on the dates indicated.

Pursuant to the requirements

of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in

the capacities and on the dates indicated.

/s/ Richard L.

President, Chief Executive Officer, and Director

(Principal Executive Officer)

September 8, 2022

President, Chief Executive Officer, and Director (Principal Executive Officer)

October 13, 2023

/s/ Alisha K.

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

September 8, 2022

Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

October 13, 2023

/s/ Nicholas J.

Chairman of the Board, Director

September 8, 2022

October 13, 2023

/s/ Raymond E.

September 8, 2022

October 13, 2023

/s/ Angelita R.

September 8, 2022

October 13, 2023

/s/ William J.

September 8, 2022

October 13, 2023

/s/ Katrina M.K.

September 8, 2022

October 13, 2023

INDEX TO EXHIBITS

46 unchanged sentences

Amendment No.

1 to Amended and Restated Credit Agreement dated November

5, 2021 by and between Pro-Dex, Inc.

and Minnesota Bank & Trust (incorporated herein by reference to Exhibit 10.1 to the Company’s

Form 8-K filed November 9, 2021).

Amended and Restated Revolving Credit Note dated November 5, 2021 made

by Pro-Dex, Inc.

1 to Amended and Restated Credit Agreement dated November 5, 2021 by and between Pro-Dex, Inc.

and Minnesota Bank & Trust (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed November 9, 2021).

Amended and Restated Revolving Credit Note dated November 5, 2021

made by Pro-Dex, Inc.

in favor of Minnesota Bank & Trust (incorporated herein by reference to Exhibit 10.2 to the Company’s

Form 8-K filed November 9, 2021).

Amendment No.

2 to Amended and Restated Credit Agreement dated December

29, 2022 by and between Pro-Dex, Inc.

and Minnesota Bank & Trust, a division of HTLF Bank (incorporated herein by reference to Exhibit 10.1

to the Company’s Form 8-K filed January 5, 2023).

Amendment and Restated Revolving Credit Note dated December 29, 2022 made

by Pro-Dex, Inc.

in favor of Minnesota Bank & Trust, a division of HTLF Bank (incorporated herein by reference to Exhibit 10.2

to the Company’s Form 8-K filed January 5, 2023).

Supplemental Revolving Credit Note dated December 29, 2022 made by

Pro-Dex, Inc.

in favor of Minnesota Bank & Trust, a division of HTLF Bank (incorporated herein by reference to Exhibit 10.3

to the Company’s Form 8-K filed January 5, 2023.

Warrant to Purchase Stock dated December 20, 2018 made by Monogram Orthopaedics

in favor of Pro-Dex, Inc.

Warrant Exercise Side Letter Dated October 2, 2023 by and between Monogram Orthopaedics Inc.

and Pro-Dex, Inc.

Consent of Independent Registered Public Accounting Firm.

3 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures