Pro-Dex Inc. with operations in Santa Ana California Beaverton Oregon and Carson City Nevada specializes in bringing speed to market in the development and manufacture of technology-based solutions that incorporate embedded motion control miniature rotary drive systems and fractional horsepower DC motors serving the medical dental semi-conductor scientific research and aerospace markets. Pro-Dex's products are found in hospitals dental offices medical engineering labs scientific research facilities commercial and military aircraft and high tech manufacturing operations globally. Prodex Inc. has a market cap of $4.8 million; its shares were traded at around $0.5 with and P/S ratio of 0.2. Highlight of Business Operations: In fiscal year 2009, there was an $80,000 decrease in revenue from customer-funded research and development compared to fiscal year 2008 as engineering fee billings associated with customer projects have been completed and the capitalized expenses related to the projects were expensed. We recognized an $86,000 loss on our customer-funded research and development compared to last years $351,000 gain due to end-of project cost overruns.
At the present time, we are generally able to fill orders for recurring product within sixty (60) days from initial order receipt. At June 30, 2009, we had a backlog, including orders for delivery beyond 60 days, of $9.8 million compared with a backlog of $10.4 million at June 30, 2008. We expect to ship most of our backlog in fiscal year 2010 and the remainder in fiscal year 2011. The decrease from June 2008 is due to normal fluctuations in the timing of receipt and shipment of orders. We do not typically experience seasonal fluctuations in our new order bookings, but may experience variability in our new order bookings due to the timing of major new product launches. Similarly, we do not typically experience seasonal fluctuations in our shipments and revenues.
In the year ended June 30, 2009, $2,790,000 was expensed for company-funded research and development; an increase of $58,000 from the $2,732,000 expensed in the year ended June 30, 2008. The increase was attributable to small motor product development, improvement and validation.
The Wells Fargo forbearance was accompanied by a reduction by Wells Fargo in our line of credit from $4 million to $1 million during the forbearance period. A forbearance is not a waiver and Wells Fargo reserved its rights with respect to the default caused by the covenant violations during the forbearance period. During the forbearance period, Wells Fargo conducted a collateral audit and an analysis of our fixed assets to determine whether, and under what conditions, it might be willing to waive the then-existing covenant violations. All defaults under the credit facility for the quarter ended March 31, 2009 were ultimately waived and the credit facility was amended to maintain the availability of the line of credit at $1 million. The terms of the line of credit were amended to include converting the availability to a borrowing amount based on eligible accounts receivable and inventory if the amounts borrowed exceeded $500,000. Prior to the waiver, Wells Fargo had the right to exercise all of its rights and remedies under the credit facility, including its option to declare all amounts outstanding under the credit facility (which as of September 11, 2009 consists of approximately $1,667,000 under the term loan component of the facility) immediately due and payable and, if not timely paid in full, foreclosing on substantially all of our assets in such amounts to satisfy the amount owing to them. We did not believe that we possessed sufficient cash on hand that would enable us to pay all amounts outstanding under the Wells Fargo facility should it exercise its right to declare all such amounts immediately d
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