ProPhase Labs Signs Non-Binding LOI for Proposed Reverse Merger with Advanced Biological Laboratories

Rhea-AI Summary

ProPhase Labs (NASDAQ: PRPH) and Advanced Biological Laboratories entered a non-binding LOI on Dec 19, 2025 proposing a reverse merger that would make ABL majority owner (~76%) of the combined company.

The LOI is preliminary and subject to due diligence, definitive agreements, regulatory and Nasdaq approvals, and other conditions. A preliminary valuation framework implies a legacy ProPhase enterprise value of up to $30 million. ProPhase may declare a special cash dividend up to $10 million to shareholders of record (separate from the merged company). Crown Medical Collections receivables are expected to be carved out for current shareholders with anticipated collections of ≈$50 million net. The combined company would assume only agreed liabilities, currently contemplated to include $5 million of ProPhase indebtedness.

Positive

• ABL ownership of ~76% at closing
• Legacy ProPhase enterprise value up to $30M (preliminary)
• Special cash dividend potential up to $10M for current shareholders
• Crown Medical Collections carve-out with ~$50M net anticipated
• Combined structure preserves Nebula Genomics and BE-Smart under U.S. subsidiary

Negative

• Transaction is non-binding and subject to due diligence and approvals
• Expected collections of Crown receivables are uncertain and timing is variable
• Combined company would assume only specified liabilities; other legacy liabilities remain with ProPhase
• Assumed indebtedness of $5M may reduce net proceeds to shareholders

Key Figures

Legacy business valuation up to $30 million enterprise value Preliminary non-binding framework for ProPhase legacy business

Special cash dividend up to $10 million Potential dividend to ProPhase shareholders of record

Crown receivables approximately $50 million net Expected Crown Medical Collections carve-out for current shareholders

Debt assumed approximately $5 million Existing ProPhase indebtedness to be assumed by combined company

ABL ownership stake approximately 76% ABL shareholders’ ownership of combined company at closing

Execution timeline approximately 60 to 90 days Target period to work toward definitive documentation

Conference time 10:00 a.m. ET Virtual conference call with shareholders on December 19, 2025

Market Reality Check

$0.1051 Last Close

Volume Volume 3,643,152 is slightly below the 20-day average of 3,994,348 (relative volume 0.91x). normal

Technical Shares trade below the 200-day MA of 0.35 at a price of 0.1051, sitting close to the 52-week low of 0.1026 and far below the 52-week high of 0.9349.

Peers on Argus

Peer moves are mixed: PRPO up 2.16%, NOTV up 1.03%, ISPC up 1.2%, while ADVB down 3.83% and BIAF down 4.69%, suggesting this LOI is company-specific rather than a sector-wide move.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 26	Investor webinar	Positive	+0.7%	Announcement of investor webinar reviewing portfolio and milestones.
Nov 19	Earnings update	Negative	-9.5%	Q3 2025 results with lower revenue, losses, and tight cash.
Nov 17	Proxy reminder	Positive	-5.4%	Reminder to vote on proposals supporting strategic flexibility and listing.
Oct 29	Clinical validation	Positive	-2.1%	Peer‑reviewed study validating BE‑Smart esophageal cancer assay.
Oct 28	IR engagement	Positive	+2.6%	Engagement of RedChip to support commercialization and collections.

Pattern Detected

Recent history shows several positive strategic or clinical updates followed by muted or negative price reactions, especially around the BE‑Smart program and governance actions.

Recent Company History

Over the last few months, ProPhase Labs highlighted commercialization plans for BE‑Smart and Nebula Genomics, engaged RedChip for investor relations, and promoted an investor webinar on December 1, 2025. Financially, Q3 2025 results showed lower revenue and continued losses with tight liquidity. Governance actions focused on proxy approvals to support strategic flexibility and Nasdaq compliance. Today’s reverse merger LOI and proposed value carve‑outs build on prior messaging around M&A, Crown Medical collections, and repositioning the business.

Market Pulse Summary

The stock is surging +78.4% following this news. A strong positive reaction aligns with a heavily discounted share price near the 52-week low and a proposal that includes a potential $10 million special dividend plus an expected $50 million receivables carve-out. Historical data show mixed responses to positive news, so past divergences and the non-binding, conditional nature of this LOI could still pose risks to the durability of any sharp advance.

Key Terms

reverse merger financial

"entered into a non-binding Letter of Intent ("LOI") regarding a proposed reverse merger"

A reverse merger is when a private company becomes publicly traded by combining with an already listed public shell company, allowing the private business to gain a stock market listing without going through a traditional IPO. Investors care because this shortcut can be faster and cheaper than an IPO but often comes with less regulatory vetting and market visibility, so it can mean higher uncertainty about valuation, financial transparency, and future liquidity.

enterprise value financial

"valuation framework for the legacy ProPhase business that may imply an enterprise value of up to"

Enterprise value is the total worth of a company, reflecting what it would cost to buy the entire business. It includes the company's market value plus any debts, minus its cash holdings, offering a comprehensive picture of its true value. Investors use it to compare companies regardless of their capital structures, helping them assess how much they would need to pay to acquire the business.

special cash dividend financial

"ProPhase Labs may declare a special cash dividend of up to $10 million payable"

A special cash dividend is a one-time, extra cash payment a company gives to its shareholders in addition to its regular dividends, like a bonus check sent out when a business has more cash than usual. It matters to investors because it delivers immediate cash value, can signal that the company has strong short-term cash or limited opportunities to reinvest, and typically reduces the company’s cash reserves and may affect the stock price and tax treatment for recipients.

regulatory approvals regulatory

"subject to completion of due diligence, negotiation and execution of definitive agreements, regulatory approvals, Nasdaq listing requirements"

Regulatory approvals are official permissions from government agencies that a company needs before launching a new product, service, or business activity. They matter because without this approval, the company might not be allowed to operate legally or sell its products, similar to how a driver needs a license to legally drive a car.

Nasdaq listing requirements regulatory

"execution of definitive agreements, regulatory approvals, Nasdaq listing requirements, and other customary closing"

NASDAQ listing requirements are the financial, governance and disclosure rules a company must meet to have its shares traded on the NASDAQ stock exchange. Think of them as the standards a business must pass to join an exclusive marketplace — they affect whether a stock can be bought easily, how much public information the company must provide, and how investors judge its credibility and risk. Meeting these rules can boost liquidity and investor confidence.

due diligence technical

"The Proposed Transaction remains subject to completion of due diligence, negotiation and execution"

Due diligence is the careful investigation and analysis someone conducts before making a decision, such as investing money or entering into an agreement. It’s like researching thoroughly before buying a used car to ensure it’s in good condition; this helps prevent surprises and makes informed choices. For investors, due diligence reduces risk by verifying details and understanding what they’re getting into.

AI-generated analysis. Not financial advice.

Proposed transaction aims to deliver near-term value for ProPhase shareholders, long-term growth for ABL, and create a global, innovation-driven company.

Company to hold a virtual conference call today at 10:00 a.m. ET

UNIONDALE, NY, Dec. 19, 2025 (GLOBE NEWSWIRE) -- ProPhase Labs, Inc. (NASDAQ: PRPH) ("ProPhase") and Advanced Biological Laboratories S.A. ("ABL"), a European biotechnology and MedTech group, today announced that they have entered into a non-binding Letter of Intent ("LOI") regarding a proposed reverse merger transaction pursuant to which ABL would become the majority owner of the combined entity (the “Proposed Transaction”).

The LOI reflects preliminary understandings only and does not create any obligation to consummate a transaction, except with respect to customary confidentiality and expense provisions. The Proposed Transaction remains subject to completion of due diligence, negotiation and execution of definitive agreements, regulatory approvals, Nasdaq listing requirements, and other customary closing conditions.

While subject to finalization in definitive agreements, the parties have discussed a preliminary, non-binding valuation framework for the legacy ProPhase business that may imply an enterprise value of up to approximately $30 million. Under the terms contemplated in the LOI, subject to applicable law, board approvals, and definitive documentation, ProPhase Labs may declare a special cash dividend of up to $10 million payable to shareholders of ProPhase Labs common stock as of a record date to be determined. Any such cash distribution would be separate from and not part of the merged operating company. Additionally, as described below, all Crown Medical Collections receivables are expected to be carved out for the exclusive benefit of current ProPhase shareholders.

This framework represents the preliminary structure, subject to definitive documentation, for the transaction, expressly excludes certain cash distributions, asset carve-outs, and retained liabilities described below, and is subject to change based on due diligence, capitalization adjustments, financing activity, market conditions and final transaction terms. The parties currently anticipate working toward execution of definitive documentation within approximately 60 to 90 days.

Strategic Rationale and Leadership Commentary
“This LOI represents what we believe is one of the most important strategic developments in ProPhase Labs’ history,” said Ted Karkus, Chief Executive Officer of ProPhase Labs. “The proposed transaction structure is designed to deliver meaningful near-term value to our existing shareholders, while aligning ProPhase within the ABL Group, a global leader in molecular analysis, clinical research, and healthcare innovation that can accelerate the development and long-term potential of our genomics and diagnostic programs.”

Transaction Structure and Operating Focus
The Proposed Transaction envisions that ABL shareholders would own approximately 76% of the combined company at closing. Following completion of the merger, a newly established U.S. subsidiary would hold and operate ProPhase’s Nebula Genomics platform, BE-Smart Esophageal Cancer Test program, and select consumer health businesses, enabling focused capital allocation and strategic execution.

ABL would contribute its global infrastructure, including advanced data processing systems, cloud computing for health data, and financing capabilities. The ABL Group operates successful businesses:

• ABL Diagnostics (Euronext: ABLD, FR001400AHX6) delivers cutting-edge molecular testing solutions.
• CDL Pharma provides clinical trial logistics and sample management services.
• Humedics commercializes the LiMAx^® liver function capacity test, a real-time breath test supporting liver surgery and transplantation.
  

These companies would become sister entities to the new U.S. subsidiary, which is expected to remain under ProPhase’s current management team.

“This proposed transaction represents a highly strategic opportunity for the ABL Group,” said Dr. Chalom B. Sayada, CEO of ABL. “By combining with a Nasdaq-listed U.S. platform, ABL will gain enhanced access to U.S. capital markets and accelerate commercialization of its portfolio in the United States. At the same time, ABL’s international distribution network and regulatory expertise will support global expansion of ProPhase’s BE-Smart Esophageal Cancer Test, Nebula Genomics, and consumer health businesses. This combination is intended to create meaningful, two-way strategic value and reinforces our commitment to innovation, global reach, and sustainable growth.”

Significant Value Carve-Outs for Current ProPhase Shareholders
Under the LOI, ProPhase Labs may declare a special cash dividend of up to $10 million payable to shareholders of record as of a date to be determined. This distribution would be separate from the merged operating company.

Additionally, all Crown Medical Collections receivables are expected to be carved out for the exclusive benefit of current ProPhase shareholders, with anticipated collections of approximately $50 million net. These estimates are forward-looking and subject to significant uncertainty, including collection risk and timing variability.

Together, these elements provide current ProPhase shareholders with a differentiated value pathway independent of the future performance of the combined company.

Allocation of Assets and Liabilities
The combined operating company would assume only those liabilities expressly agreed in definitive documentation, currently contemplated to include approximately $5 million of ProPhase Labs’ existing indebtedness. All other legacy liabilities would remain with ProPhase Labs and would not be obligations of the post-merger entity.

Transaction Status
The proposed transaction remains subject to due diligence, negotiation and execution of definitive agreements, regulatory approvals, Nasdaq listing requirements, and other customary closing conditions. There can be no assurance that a definitive agreement will be reached or that the transaction will be consummated.

CEO to Present to Shareholders
ProPhase will present to shareholders today, December 19, 2025 at 10:00 a.m. ET during the Virtual Non-Deal Roadshow Series hosted by Renmark Financial Communications Inc.

REGISTER HERE:
https://www.renmarkfinancial.com/live-registration/renmark-virtual-non-deal-roadshow-nasdaq-prph-GftGB-XDWX

About Advanced Biological Laboratories S.A.
Advanced Biological Laboratories S.A. (ABL) is a European MedTech and biotechnology group providing integrated solutions for molecular diagnostics, clinical research, and healthcare innovation. ABL operates globally through subsidiaries including ABL Diagnostics, CDL Pharma, and Humedics, delivering advanced testing technologies, clinical trial logistics, and liver function diagnostics to support precision medicine and improve patient outcomes.

About ProPhase Labs, Inc.
ProPhase Labs, Inc. (NASDAQ: PRPH) is a diversified diagnostics and genomics company focused on developing and commercializing innovative solutions for consumer health and precision medicine. Its portfolio includes Nebula Genomics, BE-Smart Esophageal Cancer Test, and other diagnostic programs aimed at improving early detection and personalized care.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Proposed Transaction, anticipated valuations, potential cash distributions, and expected benefits to shareholders. These statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may affect future results include completion of due diligence, negotiation of definitive agreements, regulatory approvals, market conditions, and other risks detailed in ProPhase Labs’ filings with the SEC. Neither ABL nor ProPhase undertakes any obligation to update forward-looking statements except as required by law.

Media Relations Contact:
ProPhase Labs, Inc.
investorrelations@prophaselabs.com

Investor Relations Contact:
Dave Gentry, CEO
RedChip Companies, Inc.
1-800-REDCHIP (733-2447)
1-407-644-4256
PRPH@redchip.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 does the ProPhase (PRPH) LOI with ABL mean for shareholders on Dec 19, 2025?

The LOI proposes a reverse merger where ABL would own ~76% and ProPhase shareholders may receive a special cash dividend up to $10M, subject to definitive agreements and approvals.

How much is ProPhase's preliminary enterprise value under the proposed transaction (PRPH)?

A preliminary, non-binding valuation framework referenced an enterprise value for legacy ProPhase of up to $30 million.

Will ProPhase shareholders get access to Crown Medical Collections proceeds in the PRPH merger?

Yes; the LOI anticipates a carve-out of Crown Medical Collections receivables for current ProPhase shareholders with anticipated collections of ≈$50M net, subject to collection risk and timing uncertainty.

What liabilities would the combined company assume under the proposed ABL-PRPH merger?

The combined operating company would assume only liabilities agreed in definitive documents, currently contemplated to include approximately $5M of ProPhase indebtedness.

What approvals and conditions must the PRPH-ABL proposed transaction clear?

The LOI states the transaction is subject to due diligence, negotiation of definitive agreements, regulatory approvals, and Nasdaq listing requirements.