ProPhase Labs Announces Closing of $3 Million Senior Secured Convertible Notes Financing
ProPhase Labs (NASDAQ: PRPH) has closed a $3 million private placement financing through senior secured convertible notes with accompanying warrants. The notes were issued with a 20% original issue discount and are secured by company assets. Key features include:
The warrants are exercisable at $0.50 per share, and the notes cannot be converted for the first four months. An additional $3 million in notes may be purchased by investors. The company plans to use proceeds for working capital, corporate purposes, and debt repayment.
CEO Ted Karkus indicated this financing serves as bridge capital while pursuing potential liquidity events, including collection of up to $50 million in Covid accounts receivable, potential sale of Nebula Genomics, and exploration of crypto treasury strategies.
ProPhase Labs (NASDAQ: PRPH) ha completato un finanziamento privato da 3 milioni di dollari tramite note convertibili senior garantite con warrant annessi. Le note sono state emesse con un sconto originale del 20% e sono garantite dagli asset dell'azienda. Le caratteristiche principali includono:
I warrant sono esercitabili a 0,50 dollari per azione e le note non possono essere convertite nei primi quattro mesi. Gli investitori possono acquistare ulteriori note per 3 milioni di dollari. La società prevede di utilizzare i proventi per capitale circolante, scopi aziendali e rimborso del debito.
Il CEO Ted Karkus ha indicato che questo finanziamento funge da capitale ponte mentre si esplorano potenziali eventi di liquidità, inclusa la riscossione fino a 50 milioni di dollari di crediti Covid, la possibile vendita di Nebula Genomics e l'esplorazione di strategie di tesoreria in criptovalute.
ProPhase Labs (NASDAQ: PRPH) ha cerrado una financiación privada de 3 millones de dólares mediante notas convertibles senior garantizadas con warrants adjuntos. Las notas se emitieron con un descuento original del 20% y están garantizadas por los activos de la empresa. Las características clave incluyen:
Los warrants pueden ejercerse a 0,50 dólares por acción y las notas no pueden convertirse durante los primeros cuatro meses. Los inversores pueden adquirir notas adicionales por 3 millones de dólares. La compañía planea usar los fondos para capital de trabajo, fines corporativos y pago de deudas.
El CEO Ted Karkus indicó que esta financiación sirve como capital puente mientras se buscan posibles eventos de liquidez, incluyendo la cobranza de hasta 50 millones de dólares en cuentas por cobrar Covid, la posible venta de Nebula Genomics y la exploración de estrategias de tesorería en criptomonedas.
ProPhase Labs (NASDAQ: PRPH)는 보증서가 포함된 선순위 담보 전환 사채를 통해 300만 달러 규모의 사모 펀딩을 완료했습니다. 사채는 20%의 최초 발행 할인율로 발행되었으며 회사 자산으로 담보되어 있습니다. 주요 특징은 다음과 같습니다:
워런트는 주당 0.50달러에 행사할 수 있으며, 사채는 최초 4개월 동안 전환이 불가능합니다. 투자자는 추가로 300만 달러 상당의 사채를 구매할 수 있습니다. 회사는 자금을 운영 자본, 기업 목적 및 부채 상환에 사용할 계획입니다.
CEO 테드 카커스는 이번 자금 조달이 잠재적 유동성 이벤트를 추진하는 동안 다리 자본 역할을 하며, 5000만 달러 규모의 코로나 관련 미수금 회수, Nebula Genomics의 잠재적 매각, 암호화폐 재무 전략 탐색 등을 포함한다고 밝혔습니다.
ProPhase Labs (NASDAQ: PRPH) a finalisé un financement privé de 3 millions de dollars via des billets convertibles senior garantis accompagnés de bons de souscription. Les billets ont été émis avec une décote initiale de 20% et sont garantis par les actifs de l'entreprise. Les caractéristiques principales incluent :
Les bons de souscription sont exerçables à 0,50 $ par action, et les billets ne peuvent pas être convertis pendant les quatre premiers mois. Un montant supplémentaire de 3 millions de dollars en billets peut être acheté par les investisseurs. La société prévoit d’utiliser les fonds pour le fonds de roulement, des besoins corporatifs et le remboursement de dettes.
Le PDG Ted Karkus a indiqué que ce financement sert de capital relais en attendant des événements potentiels de liquidité, incluant la collecte pouvant atteindre 50 millions de dollars de créances Covid, la vente potentielle de Nebula Genomics, et l’exploration de stratégies de trésorerie en cryptomonnaies.
ProPhase Labs (NASDAQ: PRPH) hat eine privat platzierte Finanzierung in Höhe von 3 Millionen US-Dollar durch vorrangige besicherte Wandelanleihen mit begleitenden Warrants abgeschlossen. Die Anleihen wurden mit einem 20%igen ursprünglichen Ausgabediscount ausgegeben und sind durch Unternehmensvermögen besichert. Wichtige Merkmale sind:
Die Warrants sind zu 0,50 US-Dollar pro Aktie ausübbar, und die Anleihen können in den ersten vier Monaten nicht gewandelt werden. Investoren können zusätzliche 3 Millionen US-Dollar an Anleihen erwerben. Das Unternehmen plant, die Erlöse für Betriebskapital, Unternehmenszwecke und Schuldentilgung zu verwenden.
CEO Ted Karkus erklärte, dass diese Finanzierung als Brückenkapital dient, während potenzielle Liquiditätsereignisse verfolgt werden, darunter die Einziehung von bis zu 50 Millionen US-Dollar an Covid-Forderungen, ein möglicher Verkauf von Nebula Genomics und die Erkundung von Krypto-Treasury-Strategien.
- Secured $3 million in immediate financing with potential for additional $3 million
- Potential collection of up to $50 million in Covid accounts receivable
- Strategic flexibility with prepayment option without penalties
- Notes include 4-month conversion restriction, protecting against immediate dilution
- 20% original issue discount increases effective cost of capital
- Dilutive potential through convertible notes and warrants at $0.50 per share
- Additional share authorization required as per agreement
- Secured against company and subsidiary assets, increasing risk to existing assets
Insights
ProPhase secured $3M bridge financing with unfavorable terms while pursuing larger liquidity events and crypto strategies.
ProPhase Labs has closed a
This financing appears to be a short-term bridge to address immediate capital needs while the company pursues several larger potential liquidity events. Management indicates they're working to collect up to
The structure of this deal raises several red flags. The security of the notes against company assets, the warrant pricing, and the requirement to authorize additional shares all point to a relatively desperate financing situation. The ability to prepay without penalty is the one favorable term, suggesting management hopes to replace this expensive financing quickly if their other liquidity events materialize. The provision allowing investors to purchase up to an additional
Financing provides bridge to multiple potentially significant liquidity events and crypto strategies
UNIONDALE, NY, July 23, 2025 (GLOBE NEWSWIRE) -- ProPhase Labs, Inc. (NASDAQ: PRPH), (the "Company" or "ProPhase") today announced the closing of a private placement financing with two investors for
The notes were issued with a
The proceeds from the financing will be used for working capital and general corporate purposes and to repay certain existing debt.
The definitive transaction documents related to the financing will be filed as exhibits to a Current Report on Form 8-K with the Securities and Exchange Commission within four business days, as required.
Ted Karkus, Chief Executive Officer of ProPhase Labs, stated: "This financing provides ProPhase with important bridge capital as we pursue several potential near-term liquidity events, including the collection of up to
The notes and warrants described above were offered in a private placement pursuant to Regulation D under the Securities Act of 1933, as amended (the “Securities Act”). The securities have not been registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
About ProPhase Labs Inc.
ProPhase Labs Inc. (Nasdaq: PRPH) (“ProPhase”) is a next-generation biotech, genomics and consumer products company. Our mission is to build a healthier world through bold innovation and actionable insight. We’re revolutionizing healthcare with industry-leading Whole Genome Sequencing solutions, groundbreaking diagnostic development – such as our potentially life-saving test for the early detection of esophageal cancer – and a world class direct-to-consumer marketing platform for cutting edge OTC dietary supplements. We develop, manufacture, and commercialize health and wellness solutions to enable people to live their best lives. We are committed to executional excellence, smart diversification, and a synergistic, omni-channel approach. ProPhase Labs’ valuable subsidiaries, their synergies, and significant growth underscore our potential for long-term value. www.ProPhaseLabs.com
Forward-Looking Statements
Except for the historical information contained herein, this document contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our strategy, plans, objectives and initiatives, including our expectations regarding the future revenue growth potential of each of our subsidiaries, our expected timeline for commercializing our BE-Smart Esophageal Cancer Test, our expectations regarding future liquidity events, the success of our efforts to collect accounts receivables and anticipated timeline for any payments relating thereto, and our ability to successfully transition into a consumer products company. Management believes that these forward-looking statements are reasonable as and when made. However, such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include but are not limited to our ability to obtain and maintain necessary regulatory approvals, general economic conditions, consumer demand for our products and services, challenges relating to entering into and growing new business lines, the competitive environment, and the risk factors listed from time to time in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and any other SEC filings. The Company undertakes no obligation to update forward-looking statements except as required by applicable securities laws. Readers are cautioned that forward-looking statements are not guarantees of future performance and are cautioned not to place undue reliance on any forward-looking statements.
Media Relations and Institutional Investor Contact:
ProPhase Labs, Inc.
investorrelations@prophaselabs.com
Retail Investor Relations Contact:
Renmark Financial Communications
John Boidman: jboidman@renmarkfinancial.com
Tel.: (416) 644-2020 or (212) 812-7680
www.renmarkfinancial.com
FAQ
What is the size of ProPhase Labs' (PRPH) recent convertible notes financing?
What are the key terms of PRPH's July 2023 convertible notes?
How will ProPhase Labs use the proceeds from the $3M financing?
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