What changed in this filing

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Item 1. Business

2026-09-03 compared with 2025-09-04 · 81 added, 75 removed, 178 unchanged (47% of the section changed)

5 unchanged sentences

We have patented adaptive torque-limiting technology and proprietary sealing

solutions which appeal to our customers, primarily medical device distributors.

We also manufacture and sell rotary air motors to a wide

range of industries;

however, these motors comprise a de minimis portion of our business.

Our patented adaptive torque-limiting

software has been very well received in the CMF and thoracic markets and we have continued investment in this area with research and development

focused on applying this technology to other surgical applications.

In November 2020, we purchased

an approximate 25,000 square foot industrial building in Tustin, California (the “Franklin

This building is located approximately four miles from our Irvine, California headquarters and was acquired to provide

us additional capacity for our expected continued future growth.

We substantially completed the build-out of the property during fiscal

2022 and concluded various verification and validation activities during fiscal 2023.

We moved our entire assembly and repairs operations

to the new facility in the fourth quarter of fiscal 2023 and we are now fully operational in the new facility.

We believe the new facility

will create additional capacity for our expected continued growth over the next several years.

solutions that appeal to our customers, primarily medical device distributors.

Additionally, we provide engineering, quality and regulatory

consulting services to our customers.

We also manufacture and sell rotary air motors to a wide range of industries;

however, these motors

comprise a de minimis portion of our business.

Beginning in fiscal 2026, we began selling precision machined parts and assemblies for

the aerospace and defense industries through our newly acquired subsidiary, Advanced Precision Machining, LLC (“APM”).

We were incorporated in Colorado

In August 2020, we formed a wholly owned subsidiary, PDEX Franklin, LLC (“PDEX Franklin”),

to hold title for an approximate 25,000 square foot industrial building in Tustin, California (the “Franklin Property”) that

we acquired on November 6, 2020, in order to allow for the continued growth of our business.

This subsidiary has no separate operations.

February 2026, we acquired APM, a manufacturer located in Costa Mesa, California.

APM manufactures several of our machined sub-assemblies

and also manufactures parts and assemblies for the aerospace and defense industries.

In addition, it serves as a Prime Contractor for

Government and therefore maintains registrations under the International Traffic in Arms Regulations (“ITAR”) as

well as a Joint Certification Program (“JCP”) certification.

The consolidated financial statements include the accounts of

the Company, PDEX Franklin and APM and all significant inter-company accounts and transactions have been eliminated.

principal headquarters are located at 2361 McGaw Avenue, Irvine, California 92614 and our phone number is 949-769-3200.

Our Internet address

is www.pro-dex.com .

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, amendments to

those reports, and certain other Securities and Exchange Commission (“SEC”) filings, are available free of charge through

our website as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.

Our corporate

Internet address is www.pro-dex.com .

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,

amendments to those reports, and certain other Securities and Exchange Commission (“SEC”) filings, are available free of charge

through our website as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.

our Code of Ethics and other corporate governance documents may be found on our website at the Internet address set forth above.

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NRE & Prototypes

Dental and component

Discounts & Other

Our medical device products

utilize proprietary designs developed by us primarily under exclusive development and supply agreements and are currently machined in

our Irvine, California facility, and assembled in our Tustin, California facility, as are our rotary air motors.

Our medical device products

are sold primarily to original equipment manufacturers and our air motors are sold to a wide range of distributors and end users.

utilize proprietary designs, are developed by us primarily under exclusive development and supply agreements and are currently machined

in our Irvine, California facility, and assembled in our Tustin, California facility, as are our rotary air motors.

Our medical device

products are sold primarily to original equipment manufacturers and our air motors are sold to a wide range of distributors and end users.

We also manufacture and sell precision machined parts and assemblies for the aerospace and defense

industries through our newly acquired subsidiary APM.

In fiscal 2026, our top three

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percentage of our time and resources on providing outstanding products and service to our valued principal customers.

During the first

quarter of fiscal 2021, our largest customer executed an amendment to our existing supply agreement such that we will continue to supply

their surgical handpieces to them through calendar 2025 and, during the fourth quarter of fiscal 2021, they executed a product development

agreement and related statement of work for our assistance with the next generation of this handpiece.

During fiscal 2025, they launched

their next generation handpiece.

During the fourth quarter of fiscal 2025, the customer released the hold that it had placed on shipments

of the next generation handpiece in the third quarter of fiscal 2025, and we resumed production and shipments of the next generation handpiece

late in the fourth quarter of fiscal 2025.

Additionally, we continue to invest in property and equipment as well as personnel to expand

our capacity to achieve higher sales volumes.

To that end, we purchased

the Franklin Property in November 2020.

This building is located approximately four miles from our Irvine, California headquarters and

was acquired to provide us additional capacity for our expected continued future growth.

We began operations in the new facility during

the fourth quarter of fiscal 2023.

While we believe that the efforts we completed to bring the facility operational will allow us ample

capacity to increase revenues significantly in future years, there can be no assurance that we will increase revenue.

During the second

quarter of fiscal 2026, our largest customer executed an amendment to our existing supply agreement such that we shall continue to supply

their surgical handpieces to them through calendar 2028.

During the third quarter of fiscal 2026, we completed the acquisition of APM,

one of our significant suppliers, to help meet the increased demand as a result of this contract extension.

Our acquisition of APM provides

us with a second machine shop located in Costa Mesa, California that not only provides machined assemblies to service our largest customer

but also provides machining to other customers primarily in the defense and aerospace industries.

Simultaneously, we are working

to build top-line sales through active proposals of new medical device products with new and existing customers.

Our patented adaptive

torque-limiting software has been very well received in the CMF and thoracic markets.

to build top-line sales through active proposals of new medical device products with new and existing customers and/or acquisitions of

other businesses.

Our patented adaptive torque-limiting software has been very well received in the CMF and thoracic markets.

The majority of the raw materials

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in the supply chain.

We consider our relationships with our suppliers and manufacturers to be good, however, since fiscal 2022 and continuing

through fiscal 2025, many of our suppliers have increased lead times, experienced delays in shipments and raised prices or temporarily

added surcharges.

Additionally, beginning in fiscal 2025, some of our suppliers have begun passing along tariff charges.

While we intend

to pass on these charges to our customers, we do not know if we will be successful in these endeavors.

We do not intend to terminate any

such relationship at this time, nor does management have knowledge that any supplier or manufacturer intends to terminate its relationship

We consider our relationships with our suppliers and manufacturers to be good, however, beginning in fiscal 2025,

some of our suppliers began passing along tariff charges and we have passed these tariffs on to some of our customers.

We do not intend

to terminate any such relationship at this time, nor does management have knowledge that any supplier or manufacturer intends to terminate

its relationship with us.

Our commitment to product

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both facilities produce products that are certified to ISO 13485:2016, Medical Device Directive 93/42/EEC – Annex II.

At June 30, 2025,

we had a backlog of $50.4 million compared with a backlog of $19.8 million at June 30, 2024.

products that are certified to AS9100D & ISO 9001:2015.

At June 30, 2026, we had

a backlog of $32.9 million compared with a backlog of $50.4 million at June 30, 2025.

Our backlog represents firm purchase orders

received and acknowledged from our customers and does not include all revenue expected to be generated from existing customer contracts.

Substantially all of our backlog at June 30, 2025, as well as certain purchase orders received subsequent to June 30, 2025, are expected

to be delivered during fiscal 2026.

We have experienced, and may continue to experience, variability in our new order bookings due to,

among other reasons, the launch of new products, the timing of customer orders based on end-user demand, and customer inventory levels.

received and acknowledged from our customers and does not include all revenue expected to be generated from existing customer

Substantially all of our backlog at June 30, 2026, as well as certain purchase orders received subsequent to June 30,

2026, are expected to be delivered during fiscal 2027.

We have experienced, and may continue to experience, variability in our new

order bookings due to, among other reasons, the launch of new products, the timing of customer orders based on end-user demand, and

customer inventory levels.

We do not typically experience seasonal fluctuations in our shipments and revenues.

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We primarily design, sell, and repair handheld medical devices and accessories.

We provide medical devices, NRE and proto-type services, as well as repairs to all our customers and we utilize one machine shop and purchasing

team to procure and manufacture all the products that we sell.

The CEO utilizes consolidated operating income to analyze our business

We provide medical devices, NRE and proto-type services, as well as repairs to all our customers.

The CEO utilizes consolidated operating

income to analyze our business operations.

The markets for products in

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for under development portions of certain contracts.

Revenue recognized for NRE services represented 1% of our revenue in both fiscal

2025 and 2024.

Revenue recognized for NRE services represented 2% and 1% of our revenue, respectively,

during fiscal 2026 and 2025.

During the fiscal years ended

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the effectiveness of our programs and to assist in developing new programs.

At June 30, 2025 and 2024,

we had 181 and 148 employees, respectively, two of whom were part time, and all were working at one or both of our facilities in Irvine,

California and Tustin, California.

None of our employees are a party to any collective bargaining agreements with us.

We consider our

relationships with our employees to be good.

At June 30, 2026 we had 206

employees, five of whom were part time, and all but four were working at our facilities in California.

At June 30, 2025 we had 181 employees,

two of whom were part time, and all were working at one or both of our facilities in Irvine, California and Tustin, California.

our employees are a party to any collective bargaining agreements with us.

We consider our relationships with our employees to be good.

Government Regulations

25 unchanged sentences

care costs could result in reduced pricing or demand for our products.

APM operates a manufacturing

facility located in Costa Mesa, California and manufactures precision machined components and assemblies for the medical, aerospace and

defense industries, including parts and assemblies for aerospace and defense systems.

In addition, APM serves as a Prime Contractor for

Government and, as such, maintains registrations under ITAR and a JCP certification.

The regulatory requirements may include

export control and sanctions regimes, including ITAR and the Export Administration Regulations (“EAR”), as well as other

laws and regulations that apply to the performance of U.S.

government contracts.

A change in such laws or regulations at any time may

have an adverse effect on our operations.

We believe that our business

8 unchanged sentences

promulgated by the FDA and are compliant with applicable ISO standards set forth by the International Organization for Standardization.

We similarly believe that our Costa Mesa, California facility is compliant with applicable ISO standards set forth by the International

Organization for Standardization.

Patents, Trademarks, and Licensing Agreements

18 unchanged sentences

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 1. Business