PRO DEX INC

(UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Pro-Dex, Inc. (“we,” “us,” “our,” “Pro-Dex,” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-K. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These financial statements should be read in conjunction with the financial statements and footnotes thereto presented in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and consist of a normal recurring nature. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for the full year.

Recently Issued and Not Yet Adopted Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, Disaggregation of Income Statement Expenses. The ASU’s purpose is to improve disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general and administrative, and research and development). This ASU is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating these new expanded disclosure requirements, but this standard will not impact our results of operations or financial position.

NOTE 2. DESCRIPTION OF BUSINESS

We specialize 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 craniomaxillofacial (“CMF”) markets. We have patented adaptive torque-limiting technology and proprietary sealing 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”).

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.

In 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 the U.S. 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.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

** NOTE 3. NET SALES**

The following table presents the disaggregation of net sales by revenue recognition model (in thousands):

The timing of revenue recognition, billings, and cash collections results in billed accounts receivables, unbilled receivables (presented as deferred costs on our condensed consolidated balance sheets) and customer advances and deposits (presented as deferred revenue on our condensed consolidated balance sheets), where applicable. Amounts are generally billed as work progresses in accordance with agreed upon milestones. The over-time revenue recognition model consists of non-recurring engineering (“NRE”) and prototype services and typically relates to NRE services related to the evaluation, design or customization of a medical device and is typically recognized over time utilizing an input measure of progress based on costs incurred compared to the estimated total costs upon completion. During the three months ended September 30, 2026 and 2025, we recorded $2,000 and $80,000, respectively, of revenue that had been included in deferred revenue in the prior year. The revenue recognized from the contract liabilities consisted of satisfying our performance obligations during the normal course of business.

The following tables summarize our contract assets and liability balances (in thousands):

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

NOTE 4. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the use of various valuation methodologies, including market, income, and cost approaches is permissible. We consider the principal or most advantageous market in which it would transact and assumptions that market participants would use when pricing the asset or liability.

Fair Value Hierarchy. The accounting guidance for fair value measurements establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value based on the reliability of inputs. A financial instrument’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of a particular input to the fair value measurement requires judgment and may affect their placement within the fair value hierarchy levels.

We have categorized our cash equivalents and investments within the fair value hierarchy as follows:

Level 1 – applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. These Level 1 assets include our money market accounts, which are classified as cash equivalents. We have categorized our cash equivalents as Level 1 assets as there are quoted prices in active markets for identical assets or liabilities.

Level 2 – applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from or corroborated by observable market data. At September 30, 2026 and June 30, 2026, we have categorized our investments in marketable equity securities and our investment in the preferred stock of a privately held company as Level 2 assets. We utilized both a protective put option and a time-adjusted discount for lack of marketability valuation method to estimate fair value for our marketable equity securities. The purchase price paid for our investment in the preferred stock of a privately held company is considered fair value due to our participation in its most recent investment round.

Level 3 – applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. We held no Level 3 assets or liabilities at September 30, 2026 and June 30, 2026.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

Investments at September 30, 2026 and June 30, 2026 had an aggregate cost basis of$1.8 million. Both short-term and long-term marketable equity securities include equity securities of public companies that are thinly traded. We classified certain investments as long-term in nature because if we decide to sell these securities, we may not be able to sell our position within one year. At September 30, 2026, the investments included net unrealized losses of $24,000 (gross unrealized losses of $187,000 offset by gross unrealized gains of $163,000). At June 30, 2026, the investments included net unrealized losses of $97,000 (gross unrealized losses of $180,000 offset by gross unrealized gains of $83,000).

Of the total marketable equity securities at September 30, 2026 and June 30, 2026, $1,230,000 and $1,150,000, respectively, represent an investment in the common stock of Air T, Inc. Two of our Board members are also board members of Air T, Inc. and both either individually or through affiliates, own an equity interest in Air T, Inc. Our Chairman, one of the two Board members aforementioned, also serves as the Chief Executive Officer and Chairman of Air T, Inc. Another of our Board members is employed by Air T, Inc. as its Chief of Staff. The shares were purchased through 10b5-1 Plans, that were approved by our then three Board members that are not affiliated with Air T, Inc.

On October 7, 2025, Zimmer Biomet announced that it had completed its acquisition of Monogram Technologies, Inc., formerly Monogram Orthopaedics, Inc. (“Monogram”) and soon after the announcement we received $4.04 per share in cash for each of the 2,212,378 common shares we owned of Monogram prior to the close of the acquisition, for total proceeds of $8.9 million. In addition, we received 2,212,378 non-tradeable contingent value rights (“CVR’s”) payable in cash if Monogram completes five milestones related to proof-of concept, FDA 510(k) approval, and specific revenue milestones. The CVR payments, if made, range in value from $1.04 to $3.43 per CVR for a total amount of $12.37 per CVR should all milestones be attained. In the third quarter of fiscal 2026, Monogram achieved the first of five milestones and accordingly we received and recorded an additional gain in the amount of $2.3 million. There is no guarantee or assurance that any additional milestones will be achieved.

As disclosed previously, in conjunction with making our original investment in Monogram during fiscal 2017, we were granted the exclusive right to develop, engineer, manufacture and supply certain products on its behalf. Those rights were transferred to Zimmer Biomet and remain in effect post-acquisition. We made this investment in the hope that it could generate meaningful additional revenue which has yet to occur but we believe is more likely to occur because Zimmer Biomet has more financial resources to assist with commercialization of Monogram’s products. In this regard, we are currently working with the Monogram and Zimmer Biomet teams and expect to ship validation units in the second half of this fiscal year.

We invest surplus cash from time to time through our Investment Committee, which is comprised of one management director, Mr. Van Kirk, and two non-management directors, Mr. Cabillot and Mr. Swenson, who chairs the committee. Both Messrs. Cabillot and Swenson are active investors with extensive portfolio management expertise. We leverage the experience of these committee members to make investment decisions for our surplus operating capital or borrowed funds. Additionally, many of our securities holdings include stocks of public companies that either Messrs. Swenson or Cabillot or both may own from time to time either individually or through the investment funds that they manage, or other companies whose boards they sit on, such as Air T, Inc.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

NOTE 5. COMPOSITION OF CERTAIN FINANCIAL STATEMENT ITEMS

Inventory

Inventory is stated at the lower of cost (first-in, first-out) or net realizable value and consists of the following (in thousands):

Intangibles

Intangibles consist of the following (in thousands):

Patent-related costs consist of legal fees incurred in connection with both patent applications and patent issuances and were amortized over the estimated life of the product(s) that is utilizing the technology, and these costs were fully amortized in fiscal 2026.

Both the customer relationships and the tradename relate to our acquisition of APM and will be amortized on a straight-line basis over ten and seven years, respectively.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

As of September 30, 2026, the expected future amortization expense of our intangible assets is as follows (in thousands):

NOTE 6. WARRANTY

The warranty accrual is based on historical costs of warranty repairs and expected future identifiable warranty expenses and is included in accrued expenses in the accompanying condensed consolidated balance sheets. As of September 30, 2026 and June 30, 2026, the warranty reserve amounted to $267,000 and $260,000, respectively. Warranty expenses are included in cost of sales in the accompanying condensed consolidated statements of operations. Changes in estimates to previously established warranty accruals result from current period updates to assumptions regarding repair costs and warranty return rates and are included in current period warranty expense. Information regarding the accrual for warranty costs for the three months ended September 30, 2026 and 2025 are as follows (in thousands):

NOTE 7. NET INCOME PER SHARE

We calculate basic net income per share by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted income per share reflects the effects of potentially dilutive securities, which consist entirely of outstanding stock options, restricted shares and performance awards.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

The following table presents reconciliations of the numerators and denominators of the basic and diluted income per share computations. In the tables below, income amounts represent the numerator, and share amounts represent the denominator (in thousands, except per share amounts):

NOTE 8. INCOME TAXES

Deferred income taxes are provided on a liability method whereby deferred tax assets and liabilities are recognized for temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Significant management judgment is required in determining our provision for income taxes and the recoverability of our deferred tax assets. Such determination is based primarily on our historical taxable income or loss, with some consideration given to our estimates of future taxable income or loss by jurisdictions in which we operate and the period over which our deferred tax assets would be recoverable. We do not have a valuation allowance against our deferred tax assets as of September 30, 2026 or June 30, 2026.

Our effective tax rate for the three months ended September 30, 2026 and 2025, is 10% and 25%, respectively. The current year effective tax rate is less than the prior year rate due primarily to a tax benefit recognized as a result of the common stock awarded to our employees under previously granted performance awards (see Note 9). Additionally, during the first quarter of fiscal 2026, we have added Florida and Indiana to our income tax nexus and both of these states have a lower income tax rate than California, where the majority of our state income tax has been paid historically.

We are subject to U.S. federal income tax, as well as income tax of California, Colorado, Florida, Indiana, and Minnesota. We are currently open to audit under the statute of limitations by the Internal Revenue Service for the years ended June 30, 2023, and later. Additionally, we are currently open to audit under the statute of limitations for California for tax years from June 30, 2022 and later. We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

The One Big Beautiful Bill Act of 2025, or the 2025 Act, enacted on July 4, 2025, makes changes to U.S. corporate income taxes including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025, and immediate expensing of research and development costs, with retroactive application for tax years starting after December 31, 2025. Accordingly, the provisions of the 2025 Act impacting the Company were adopted in the fiscal year ended June 30, 2026.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

NOTE 9. SHARE-BASED COMPENSATION

In September 2016, our Board approved the establishment of the 2016 Equity Incentive Plan, which was approved by our shareholders at our 2016 Annual Meeting. The 2016 Equity Incentive Plan provides for the award of up to 1,500,000 shares of our common stock in the form of incentive stock options, nonstatutory stock options, stock appreciation rights, restricted shares, restricted stock units, performance awards, and other stock-based awards. As of September 30, 2026, performance awards for 200,000 shares of common stock, non-qualified stock options for 372,000 shares of common stock and 33,500 restricted shares of common stock have been granted under the 2016 Equity Incentive Plan.

Performance Awards

We have recorded share-based compensation expense of $0 and $7,000 for the three months ended September 30, 2026 and 2025, respectively, related to our outstanding unvested performance awards. On September 30, 2026, there wasno unrecognized compensation cost as the fifth and final tranche of awards vested on July 1, 2026.

On July 1, 2026, it was determined by the Compensation Committee that the vesting of the fifth and final tranche of performance awards for 40,000 shares of common stock had been achieved. Each participant elected a net issuance to cover their individual withholding taxes and, therefore, we issued participants 25,230 shares of common stock and paid $926,000 of participant-related payroll tax liabilities.

Non-Qualified Stock Options

In December 2020, the Compensation Committee of our Board of Directors granted 310,000 non-qualified stock options to our directors and certain employees under the 2016 Equity Incentive Plan. The vesting of these stock options was tied to the completion of service periods that ranged from 18 months to 10.5 years from inception and the achievement of our common stock trading at certain pre-determined prices. We recorded compensation expense of $62,000 and $104,000 for the three months ended September 30, 2026 and 2025, respectively, related to these stock options. The weighted-average fair value of the stock option awards granted was $16.72, calculated using a Monte Carlo simulation. As of September 30, 2026,78,750 of these stock options have vested,126,250 have been forfeited either due to termination or our stock price not attaining the pre-determined price, and 105,000 remain outstanding and unvested and there was approximately $667,000 of unrecognized compensation cost related to the non-vested stock options.

Restricted Shares

In November 2025, the Compensation Committee awarded 15,500 restricted shares of common stock to our directors and certain employees under the 2016 Equity Incentive Plan. The restricted shares vest ratably over five years from the date of grant. The fair value of the restricted shares on the date of grant was $478,000, based upon the closing price of our common stock on the date of grant. As of September 30, 2026,750 of these restricted shares have been forfeited.

In November 2024, the Compensation Committee awarded 18,000 restricted shares of common stock to our directors and certain employees under the 2016 Equity Incentive Plan. The restricted shares vest ratably over five years from the date of grant. The fair value of the restricted shares on the date of grant was $857,000, based upon the closing price of our common stock on the date of grant. During the second quarter of fiscal 2026,3,600 restricted shares vested and 872 restricted shares were forfeited by employees to pay their individual withholding taxes and therefore we issued 2,728 shares of common stock and paid $27,000 of participant-related payroll tax liabilities.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

During the three months ended September, 2026 and 2025, we recorded compensation expense of $63,000 and $43,000, respectively, related to these restricted shares. As of September 30, 2026, there was approximately $915,000 of unrecognized compensation cost related to these restricted shares.

Employee Stock Purchase Plan

In September 2014, our Board approved the establishment of an Employee Stock Purchase Plan (the “ESPP”). The ESPP conforms to the provisions of Section 423 of the Internal Revenue Code, has coterminous offering and purchase periods of six months, and bases the pricing to purchase shares of our common stock on a formula so as to result in a per-share purchase price that approximates a 15% discount from the market price of a share of our common stock at either the beginning or end of the purchase period, whichever is lower. Our Board of Directors also approved the provision that shares formerly reserved for issuance under former stock option plans in excess of shares issuable pursuant to outstanding options, aggregating 704,715 shares, be reserved for issuance pursuant to the ESPP. The ESPP was approved by our shareholders at our 2014 Annual Meeting.

In October 2023, our Board approved an amendment to the ESPP (the “ESPP Amendment”), which extended the term of the ESPP for an additional ten years from January 2025 to January 2035. The ESPP Amendment was approved by our shareholders at our 2023 Annual Meeting. In July 2025, the Compensation Committee of our Board of Directors amended the specific provisions of the ESPP to provide for a more favorable discount calculation for employees participating in the ESPP, as described above.

During the three months ended September 30, 2026 and 2025,1,704 and 961 shares were purchased, respectively, under the ESPP and allocated to employees based upon their contributions at discount prices of $33.25 and $42.34, respectively, per share. As of September 30, 2026, on a cumulative basis, since the inception of the ESPP, employees have purchased a total of 41,061 shares. During the three months ended September 30, 2026 and 2025, we recorded stock compensation expense in the amount of $10,000 and $7,000, respectively, relating to the ESPP.

NOTE 10. MAJOR CUSTOMERS & SUPPLIERS

Information with respect to customers that accounted for sales in excess of 10% of our total salesin either of thethree-month periods ended September 30, 2026 and 2025 is as follows (in thousands, except percentages):

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

Information with respect to accounts receivable from those customers at September 30, 2026 and June 30, 2026 that comprised more than 10% of our total revenue for either of the three-month periods ended September 30, 2026 and 2025 is as follows (in thousands, except percentages):

During the three months ended September 30, 2026 and 2025, we had two suppliers, respectively, that each accounted for more than 10% of total inventory purchases. Amounts owed to the fiscal 2027 significant suppliers at September 30, 2026 totaled $2.2 million, and $144,000, respectively, and at June 30, 2026 totaled $1.9 million and $141,000, respectively.

NOTE 11. NOTES PAYABLE AND FINANCING TRANSACTIONS

UMB Bank, N.A. (“UMB”)

We have several outstanding term loans as well as a revolving loan (the “Amended Revolving Loan”) with UMB (formerly Minnesota Bank & Trust or MBT). The Company entered into a Second Amended and Restated Credit and Security Agreement (the “Amended Credit Agreement”) with UMB Bank, N.A. on February 9, 2026, which among other things provided for financing to fund the cash portion of the purchase price of APM by issuing Term Loan D in the principal amount of $6,650,000. After giving effect to the Amended Credit Agreement, we have the following loans outstanding with UMB under the Amended Credit Agreement: Term Loan A, Term Loan B, Term Loan C, Term Loan D, the Property Loan, and the Amended Revolving Loan, the terms of which are described in further detail below.

The Amended Credit Agreement also extended the maturity date of the Amended Revolving Loan from December 29, 2026, to December 29, 2027, pursuant to a Third Amended and Restated Revolving Credit Note entered into by the Company and UMB on February 9, 2026. Loan origination fees in the amount of $31,625 were paid to UMB in connection with the Amended Credit Agreement.

Advanced Precision Machining (“APM”) Subordinated Promissory Note

On February 9, 2026, in connection with the acquisition of APM as described in Note 2, we issued the seller a promissory note in the amount of $2,000,000 which bears interest at 8% per annum and requires twenty-one equal quarterly payments of principal and accrued interest in the amount of approximately $118,000 each. The promissory note contains covenants and obligations of the Company customary for a subordinated promissory note of this type.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

The balance on our outstanding loans (in thousands) is as follows (exclusive of unamortized loan fees):

Term Loan A and Term Loan B both bear interest at a fixed rate of 3.84% per annum, the Property Loan bears interest at a fixed rate of 3.55% per annum and Term Loan C bears interest at an annual rate equal to the greater of (a)5%, or (b) SOFR for a one-month period from the website of the CME Group Benchmark Administration Limited plus 2.5% (the “Adjusted SOFR Rate”). Term Note D bears interest at the greater of (a)4.5% or (b) the Adjusted SOFR Rate. The Amended Revolving Loan bears interest at the greater of (a)4% or (b) the Adjusted SOFR Rate. Term Loan A and Term Loan B are both fully amortizing and mature on November 1, 2027, Term Loan C is fully amortizing and matures on August 1, 2029 and Term Note D is fully amortizing and matures on February 1, 2031. The Property Loan matures on November 1, 2030, at which time a balloon payment of $3.1 million is due, and the Amended Revolving Loan matures on December 29, 2027. As of September 30, 2026, we have $11.0 million, or 100%, of the Amended Revolving Loan available to us.

Any payment on Term Loan A, Term Loan B, Term Loan C, Term Loan D, the Property Loan, or the Amended Revolving Loan (collectively, the “Loans”) not made within seven days after the due date is subject to a late payment fee equal to 5% of the overdue amount. Upon the occurrence and during the continuance of an event of default, the interest rate of all Loans will be increased by 3% and UMB may, at its option, declare all of the Loans immediately due and payable in full. The Loans are secured by substantially all of the Company’s assets pursuant to a Security Agreement entered into on September 6, 2018, between the Company and UMB. The Property Loan is secured by the Franklin Property pursuant to a Deed of Trust with Assignment of Leases and Rents, Security Agreement and Fixture Filing in favor of UMB and by an assignment of Leases and Rents by PDEX Franklin in favor of UMB (collectively, the “Property Loan Security Agreements”).

The Amended Credit Agreement, Security Agreement, Property Loan Security Agreements, Term Note A, Term Note B, Term Note C, Term Note D, Property Loan, and Amended Revolving Loan contain representations and warranties, affirmative, negative and financial covenants, and events of default that are customary for loans of this type. We believe that we are in compliance with all of our debt covenants as of September 30, 2026, but there can be no assurance that we will remain in compliance for the duration of the term of the Loans.

NOTE 12. COMMON STOCK

Share Repurchase Program

In December 2019, our Board approved a new share repurchase program authorizing us to repurchase up to 1 million shares of our common stock, as the prior repurchase plan authorized by our Board in 2013 was nearing completion. In accordance with, and as part of, these share repurchase programs, our Board has approved the adoption of several prearranged share repurchase plans intended to qualify for the safe harbor under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (“10b5-1 Plan” or “Plan”). During the three months ended September 30, 2026, we repurchased 9,735 shares at an aggregate cost, inclusive of fees under the Plan, of $600,000. During the three months ended September 30, 2025, we didnot repurchase any shares. On a cumulative basis since 2013, we have repurchased a total of 1,601,130 shares under the share repurchase programs at an aggregate cost, inclusive of fees, of $28.2 million. All repurchases under the 10b5-1 Plans were administered through an independent broker.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

NOTE 13. LEASES

Our operating lease right-of-use asset and long-term liability are presented separately on our condensed consolidated balance sheet. The current portion of our operating lease liability as of September 30, 2026, in the amount of $453,000, is presented within accrued expenses on the condensed consolidated balance sheet. Additionally, we acquired some equipment leases in conjunction with our acquisition of APM in the third quarter of fiscal 2026.

During the first quarter of fiscal 2027, we executed the third amendment to the lease of our corporate office in Irvine, California. After giving effect to this third amendment, as of September 30, 2026, our operating lease has a remaining lease term of four years and an imputed interest rate of 6.15%. Cash paid for amounts included in the lease liability was $139,000 and $135,000 for the three months ended September 30, 2026 and 2025, respectively, excluding $19,000 and $15,000, respectively, paid for common area maintenance charges.

As of September 30, 2026, the maturity of our lease liabilities is as follows (in thousands):

NOTE 14. COMMITMENTS AND CONTINGENCIES

Legal Matters

In the ordinary course of our business or incidental to our business, we are periodically subject to legal or administrative proceedings. As of September 30, 2026, we were not involved in any material legal or administrative proceedings, that in the opinion of management, the ultimate disposition of which would have a material adverse effect on our consolidated financial position, results of operations, or liquidity. There can be no certainty, however, that we may not ultimately incur liability from such legal or administrative proceedings or that such liability will not be material or adverse.

PRO-DEX INC. AND SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(UNAUDITED)

NOTE 15. SUBSEQUENT EVENTS

We have evaluated subsequent events through the date of this filing. On October 26, 2026, our wholly owned subsidiary APM renewed its existing real property leases and on October 29, 2026, entered a new real property lease for an adjacent space for APM’s expected continued expansion. The new lease agreements terminate on September 30, 2030, consistent with the third amendment of our corporate office in Irvine, California. Additional information will be provided in a Current Report on Form 8-K to be filed timely with the Securities and Exchange Commission.