Patrick Johnson, President & CEO (714) 241-4411 Matthew Hayden, Investor Relations Hayden Communications, Inc. (858) 704 - 5065 For Immediate Release PRO-DEX

PRO-DEX, INC. ANNOUNCES THE COMPLETION OF KEY

STRATEGIC ACQUISITION

SANTA ANA, CA, January 5, 2006 - PRO-DEX,

INC. (NASDAQ: PDEX), an enabler of speed-to-market, through developing and

manufacturing embedded motion

control and miniature rotary drive systems, currently serving the medical, dental,

factory automation, and scientific research markets, today

announced that it has acquired substantially all assets related to the business

of Astromec Inc., a developer and manufacturer of a broad range of

custom fractional horsepower DC motors designed specifically for the adverse

environmental conditions found in the medical device, aerospace and military

Johnson, President and Chief Executive Officer commented, "We're excited to

have completed this acquisition as it represents the culmination of an almost three-year

search to acquire specialized motor manufacturing capability. Fully

autoclavable DC motors are one of the most critical components in rapidly

developing and manufacturing surgical systems, our largest and fastest-growing

market segment. The acquisition of Astromec not only expands our capabilities

as a medical device manufacturer, but more importantly, it allows us to more

rapidly develop new electric motor technology for the ever-changing medical

device market. We believe this added capability will make us more attractive to

existing and new customers alike as this increased scope in design and

manufacturing expertise will expand the breadth of our product offering and

core competencies. Additionally, with the completion of the acquisition, Astromec's

responsiveness will improve as historically it has been constrained by limited access

to short-run/quick-turn precision machined parts. Going forward, Pro-Dex will

be able to supply these components in a more cost-effective and expeditious

manner. This capability reduces a key bottleneck in Astromec's manufacturing

process and increases its flexibility to meet urgent customer requests.

paid approximately $2.6 million in cash to close the transaction with an additional

cash payment of $100,000 to be paid six months after closing, subject to any

adjustments made as a result of post-closing audits of the Astromec closing

financial statements. The Company used $1.6 million in cash on hand to fund the

acquisition and paid the remainder of the purchase price with cash borrowed

against a new $1.0 million four-year term loan. In conjunction with the asset

purchase, Pro-Dex has also entered into a real estate purchase agreement to

acquire the 20,000 square foot facility and the 4.4 acres of land occupied by

Astromec in Carson City, Nevada. At close of escrow, Pro-Dex will pay $2.2

million for the building and land, funding the transaction with a new $1.6

million 10-year first mortgage. The balance of the purchase price will be

funded by cash on hand. Escrow on the real estate transaction is scheduled to

close before July 1, 2006. In the meantime Pro-Dex will pay rent to the

current owner of the property.

facilities lease in Santa Ana, California expires in July of 2006. While Pro-Dex

expects to maintain its presence in central Orange County, the operating costs

of the Carson City facility are projected to be approximately half that of

Orange County and there are significant advantages to operating a business in

Nevada compared to California. As the Carson City facility is less than 50

percent utilized, the acquisition represents a substantially lower-cost

alternative to Orange County facilities for Pro-Dex to consolidate current

operations and expand future operations. Plans concerning the potential

expanded use of the Carson City facility have not been finalized.

Astromec acquisition will also allow Pro-Dex to cross-market current product

offerings to existing Astromec customers as these represent new market

opportunities for Pro-Dex to penetrate," continued Mr. Johnson. "While we

expect to substantially improve Astromec's presence in the medical device

industry, we believe the acquisition will help Pro-Dex penetrate Astromec's

existing customer base in the aerospace and military markets, where they have

been second and third-tier suppliers to Boeing, Airbus and NASA. Astromec's

market presence in these segments will boost Pro-Dex's visibility with these

customers and offer the opportunity to promote its 'speed-to-market' value

proposition by bundling its existing rotary drive systems and motion control

products with Astromec's custom motor technology. We are excited about this

acquisition as our core competency has increased and we are better equipped to

sell a broad range of products into both existing and new markets."

reported annual un-audited sales of approximately $2.7 million at the end of

calendar year 2005. Pro-Dex projects that its own consumption of DC motors

will increase Astromec's production volume by 20 to 30 percent during the 12

months following the close of the transaction. Entering the new calendar year,

Astromec had approximately $1.9 million in open orders scheduled for shipment

during 2007. As a result, the income from Astromec's legacy business combined

with the base-case assumptions for synergies highlighted above are estimated to

add $0.03 to $0.05 to Pro-Dex's earnings per share during the 12 months

following the close of the transaction. The acquired business will operate

under the name Pro-Dex/Astromec.

on the Company's performance during the just completed fiscal second quarter

and considering the acquisition, Mr. Johnson said, "New order bookings were

strong during the quarter, resulting in a total order backlog of approximately

$7.0 million at the end of the second quarter compared to $4.7 million last

year, a 49 percent year-over-year increase and compared to $7.6 million at the

end of the previous quarter. It is important to note however, that we

cancelled approximately $900,000 of backlog during the second quarter in

connection with our acquisition of the IntraFlow patents. Accordingly, total

open orders increased $300,000 quarter over quarter, when excluding this

acquisition related adjustment. A significant portion of second quarter

bookings were derived from a one-year blanket purchase order received from our

largest medical device customer, including orders for a new iterative product

design that will be delivered during the second half of this fiscal year. In

addition, this blanket purchase order alone will drive a 15 percent increase in

production volume for our newly acquired Pro-Dex/Astromec business unit during

the next 12 months, validating the synergistic value of the acquisition."

Pro-Dex Inc., with operations in

Santa Ana, California and Beaverton, Oregon, specializes in bringing speed to

market in the development and manufacture of technology-based

solutions that incorporate embedded motion control and miniature rotary drive

systems, serving the medical, dental, factory automation, and scientific

research markets. Pro-Dex's products are found in hospitals, dental offices,

medical engineering labs, scientific research facilities and high tech

manufacturing operations around the world. For more information, visit the Company's website at

herein concerning the Company's plans, growth and strategies may include