UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number 000-21617 ProPhase Labs, Inc. (Exact name of registrant as specified in its charter) | Delaware | 23-2577138 | | --- | --- | | (Sta ...

Prophase Labs (PRPH) Q1 2025 Earnings Call May 20, 2025 10:00 AM ET Speaker0 Start to show up in the second quarter. We also have major liquidity events, which we think are coming very soon. So we're basically bridging the company. But before we get into all of that, I'm excited to talk to you about all that. We really should do the forward looking statement first. And, since this is a quarterly conference call and not simply a, virtual non deal roadshow, I'm actually going to read it. Except for the histor ...

Financial Performance - For Q1 2025, net revenue was $1.4 million, down from $2.4 million in Q1 2024, primarily due to a $1.0 million decrease in consumer products revenue[18]. - Revenues for the three months ended March 31, 2025, were $1,431 million, down 39.2% from $2,356 million for the same period in 2024[32]. - The company reported a net income of $3,966 million for the three months ended March 31, 2025, compared to a net loss of $6,265 million in the same period of 2024[32]. - Net loss from continuing operations for Q1 2025 was $4.7 million, or $(0.13) per share, compared to a net loss of $5.5 million, or $(0.32) per share, in Q1 2024[23]. - Adjusted EBITDA from continuing operations improved to a loss of $1,614 million for Q1 2025, compared to a loss of $4,286 million in Q1 2024[40]. Cost Management - General and administration expenses decreased to $4.1 million in Q1 2025 from $7.3 million in Q1 2024, reflecting a reduction of $3.2 million[21]. - Research and development costs were $97,000 in Q1 2025, down from $272,000 in Q1 2024, a decrease of $175,000[22]. - The company has significantly reduced its workforce from 96 employees in December 2024 to 25 full-time employees currently, aiming to streamline operations and reduce overhead costs[4]. Asset and Equity Changes - Total stockholders' equity increased to $15.1 million as of March 31, 2025, up from $7.4 million at December 31, 2024[24]. - Total assets decreased from $63,200 million as of December 31, 2024, to $50,111 million as of March 31, 2025, representing a decline of approximately 20.7%[30]. - Total current liabilities decreased from $32,134 million as of December 31, 2024, to $24,052 million as of March 31, 2025, a reduction of about 25.3%[30]. Cash Flow and Debt - Cash and cash equivalents decreased from $1,175 million at the end of Q1 2024 to $88 million at the end of Q1 2025, a decline of approximately 92.5%[34]. - The company incurred a debt extinguishment loss of $431 million in Q1 2025, which was not present in Q1 2024[32]. - The company reported cash paid for income taxes of $256 million in Q1 2025, compared to $318 million in Q1 2024, indicating a decrease of approximately 19.5%[35]. Future Prospects - The company anticipates a potential recovery of approximately $50 million in insurance payments through Crown Medical Collections, which could provide significant cash flow in the second half of 2025[9][10]. - ProPhase is pursuing the sale of its subsidiary Nebula Genomics, with expectations of receiving letters of intent in the coming weeks and a potential sale within 3-4 months[7]. - The BE-Smart Esophageal Cancer Test is nearing commercialization, with a recent submission for peer review highlighting its potential to improve clinical testing for esophageal disease[11][13]. Profitability Metrics - Gross margin profit for Q1 2025 was $0.5 million, compared to a gross margin loss of $0.1 million in Q1 2024, resulting in an overall gross margin of 36.8% versus (2.5)%[20]. - Gross profit for the first quarter of 2025 was $526 million, compared to a gross loss of $60 million in the same quarter of 2024, indicating a significant improvement[32]. - Weighted average common shares outstanding increased from 17,207 million in Q1 2024 to 35,233 million in Q1 2025, reflecting a significant increase in share issuance[32].

Highlights Multiple Significant Potential Liquidity Events Anticipated Within the Next Few Months Completes Significant Reductions in Overhead and Expenses BE-Smart Esophageal Cancer Test Study has been Submitted in the Journal of Clinical Gastrointestinal Hepatology Company to hold a virtual conference call Tuesday, May 20, 2025, at 10:00 AM ET GARDEN CITY, NY, May 20, 2025 (GLOBE NEWSWIRE) -- ProPhase Labs Inc. (NASDAQ: PRPH), (the "Company" or "ProPhase") a next generation biotech, genomics and consumer ...

Operator Chat box. The top right-hand corner of your screen. That being said, I will now hand over to Ted. Ted Karkus Thank you so much, Noella, and thank you to everyone that's joining the call today. I am Ted Karkus, CEO of ProPhase Labs, Inc. I'm actually excited for this call. I have a lot to cover. I think that there are some misconceptions out there, and hopefully, I can clarify some of them. So for beginners, the forward-looking statements normally, I just say I'll assume you read it, but for the yea ...

Financial Data and Key Metrics Changes - The company has approximately $20 million in accounts receivable from COVID testing, with expectations to collect around $50 million through a collection agency [34][36] - The company sold the Cold-Eeze brand for $50 million and formalized manufacturing for $23 million, which helped clean up the balance sheet [20][21] - The management believes the current market cap is significantly lower than the potential value of the accounts receivable and other assets [37] Business Line Data and Key Metrics Changes - The company transitioned from Cold-Eeze to COVID testing, generating hundreds of millions in revenue during the pandemic [13][14] - The esophageal cancer test, B Smart, is highlighted as a key asset with potential for commercialization without significant upfront costs [58][60] - Nebula Genomics has been restructured, and the company is exploring its sale as a potential liquidity event [45][46] Market Data and Key Metrics Changes - The company has built a significant database with over 60,000 whole genome sequencing tests, which is considered a hidden value [127][128] - The management is optimistic about the potential for partnerships with larger diagnostic companies for the B Smart test, which could enhance market presence [67][105] Company Strategy and Development Direction - The company aims to streamline operations and focus on profitability after significant restructuring, including cutting overhead and headcount [56][54] - Future strategies include exploring partnerships for the B Smart test and potentially selling Nebula Genomics to improve cash flow [45][126] - The management emphasizes a cautious approach to spending on new initiatives to avoid diluting shareholder value [64][66] Management's Comments on Operating Environment and Future Outlook - The management acknowledges the challenges faced in the past year but expresses confidence in the company's ability to execute and generate revenue moving forward [14][56] - There is a focus on building revenues and achieving profitability, with expectations for significant liquidity events in the near future [49][134] - The management believes the current stock price does not reflect the company's underlying value and is optimistic about future performance [37][133] Other Important Information - The company has shut down its Nebula Genomics laboratory due to high overhead costs and is now focusing on a direct-to-consumer model [90][51] - The management is exploring the acquisition of telehealth companies to leverage marketing expertise and expand business reach [97][95] Q&A Session Questions and Answers Question: What is the projected timeline for securing CPT coding approval for the B Smart test? - The timeline can vary, but the company plans to explore multiple avenues for approval without significant spending [101][102] Question: Do you expect the cash pay diagnostic model for the B Smart test to generate significant revenue in the interim period before CPT approval? - It is viewed more as a trial period to get the product into GI offices and raise awareness [115][116] Question: You purchased Nebula and the rights to B Smart for just a few million dollars each. What is the potential you see in these assets that the sellers/marketplace do not? - The company invested significantly more than initially paid and believes both assets have substantial intrinsic value [120][122] Question: What is the possibility of a reverse split? - The management is optimistic about avoiding a reverse split and believes liquidity events will help the stock price recover [132][134]

Financial Performance - As of December 31, 2024, the company incurred net losses of approximately $53.4 million and anticipates continued significant operating and capital expenditures [133]. - Year-to-date cash used by operating activities was approximately $17.5 million, with cash and cash equivalents at approximately $0.7 million as of December 31, 2024 [136]. - The net revenue from diagnostic services for the year ended December 31, 2024, was zero, compared to $24.8 million in 2023, representing a decline from 54.9% to 0% of total net revenue [189]. - The company faces significant risks related to collection from uninsured patients and complexities in billing, which could adversely affect revenue [192]. - The company may require additional capital to support its growing personal genomics business, but funding may not be available on acceptable terms [166]. Cash Flow and Capital Needs - The company expects limited cash flow for the foreseeable future due to a significant reduction in diagnostic services and reliance on genomics business revenues [135]. - The company may need to incur indebtedness or issue common stock to finance operations if unable to raise sufficient capital [140]. - Adverse credit market conditions could significantly affect the company's access to capital and liquidity needs, potentially increasing interest expenses [168]. - The company has approximately $14.9 million in outstanding indebtedness and $0.7 million in cash and cash equivalents as of December 31, 2024 [187]. Business Strategy and Development - The company has plans to continue its current research programs and expand its clinical development of product candidates, which will require substantial funding [137]. - The company has actively pursued new product technologies and business opportunities since the sale of the Cold-EEZE™ business in March 2017 [147]. - The company plans to continue identifying and acquiring complementary products and technologies, including diagnostic tests and product candidates [174]. - The company announced intentions to develop business units in the MENA region, which may strain resources and require effective management coordination [182]. Market and Competitive Environment - The company faces significant competitive pressures in the personal genomics market, with many competitors having greater resources and established market positions [151]. - The growth of the genomics business will strain management and operational resources, requiring effective management of multiple relationships [197]. - The company’s estimates of the total addressable market for personal genomic services may prove to be inaccurate, negatively impacting financial performance [198]. Regulatory and Compliance Risks - The regulatory approval process is expensive, time-consuming, and uncertain, which may impair the company's ability to generate revenues from product candidates [238]. - The company may face delays in obtaining marketing approval for product candidates, which could result in lost competitive lead time [238]. - The company is subject to product liability claims, which could adversely affect its reputation and financial condition if claims exceed insurance coverage [165]. - Dietary supplement businesses are subject to extensive governmental regulations, which can be time-consuming and expensive to comply with [209]. Operational Risks - System failures could adversely affect the company's operations and financial condition, highlighting the importance of IT infrastructure [169]. - The company may face supply chain disruptions impacting access to essential materials and equipment, which could materially affect operations [156]. - Increased costs for testing supplies and raw materials could adversely impact the company's financial condition if these costs cannot be passed on to customers [160]. Legal and Governance Issues - Nasdaq notified the company of non-compliance with audit committee requirements due to a vacancy, with a cure period until September 20, 2025 [288]. - The company received a notice indicating that its common stock bid price fell below the minimum $1.00 per share required for continued listing, with a grace period until June 24, 2025 [290]. - Non-compliance with Nasdaq listing standards could lead to delisting, adversely affecting the company's ability to raise financing and investor confidence [287]. - The company is subject to various laws and regulations regarding direct selling, which may require changes to its business model in certain markets [271]. Intellectual Property and Market Position - The patent position of the company is uncertain, and failure to maintain effective patents could hinder competitive ability in the market [259]. - The potential for third-party claims of intellectual property infringement poses a risk to the company's development and commercialization efforts [264]. - The effectiveness of sales and marketing efforts is crucial for the success of product candidates, as competition in the market is intense [1]. Consumer and Market Trends - The personal genomics business experiences seasonal fluctuations, with greater revenues expected in the first quarter due to holiday demand [205]. - The successful commercialization of dietary supplements, such as Equivir, is subject to consumer trends, regulatory factors, and overall market conditions [212].

Financial Performance - For the year ended December 31, 2024, net revenue decreased by $28.2 million, or 80.6%, to $6.8 million compared to $35.0 million for the year ended December 31, 2023, primarily due to a $24.8 million decrease in diagnostic services[16] - The company reported a gross loss of $0.2 million for the year ended December 31, 2024, compared to a gross profit of $15.6 million for the year ended December 31, 2023, resulting in an overall gross margin of (2.2)%[18] - The company reported a net loss of $53,364 million for 2024, compared to a net loss of $16,782 million in 2023, indicating a significant increase in losses[34] - Adjusted EBITDA from continuing operations was $(17,897) million in 2024, worsening from $(11,416) million in 2023[40] - The company reported a significant credit loss expense of $11,018 million in 2024, compared to only $91 million in 2023[34] Cash and Assets - The company’s cash and cash equivalents as of December 31, 2024, were $0.7 million, down from $1.6 million at December 31, 2023, with working capital decreasing to $(1.5) million[23] - Cash and cash equivalents decreased from $1,609 million at the end of 2023 to $678 million at the end of 2024, a drop of approximately 58%[34] - Total assets decreased from $91,927 million in 2023 to $63,200 million in 2024, a decline of approximately 31%[29] - Current assets fell from $47,585 million in 2023 to $30,637 million in 2024, representing a decrease of about 36%[29] - Accounts receivable decreased from $35,814 million in 2023 to $20,058 million in 2024, a decline of approximately 44%[29] - Inventory decreased from $2,291 million in 2023 to $1,143 million in 2024, a reduction of about 50%[29] Expenses - General and administration expenses increased by $4.4 million to $37.9 million for the year ended December 31, 2024, compared to $33.4 million for the year ended December 31, 2023[20] - Research and development costs decreased to $0.6 million for the year ended December 31, 2024, down from $1.4 million in 2023[21] Strategic Initiatives - ProPhase sold its manufacturing division for approximately $23 million in January 2025, enhancing financial flexibility and significantly reducing debt[5] - The company is exploring a potential sale of its subsidiary Nebula Genomics while evaluating strategic options[12] - ProPhase has entered into a new revenue initiative with Crown Medical Collections, estimating the recovery of approximately $50 million in insurance payments[14] - The company aims to launch an integrated telehealth initiative to leverage partnerships across its health and genomic services[15] Market Potential - The BE-Smart diagnostic platform is expected to target a market of approximately 7 million endoscopies annually in the U.S., equating to a potential annual market size of $7 - $14 billion[10] Liabilities - Total liabilities increased from $42,544 million in 2023 to $55,847 million in 2024, an increase of about 31%[31]

Company to Accelerate BE-Smart Commercialization as a Cash-Pay Diagnostic Significantly reduces overhead, improves margins heading into Q2 2025 Company to hold a conference call Monday, March 31, 2025, at 11:00 AM EST GARDEN CITY, NY, March 31, 2025 (GLOBE NEWSWIRE) -- ProPhase Labs, Inc. (NASDAQ: PRPH), (the "Company" or "ProPhase"), a next generation biotech, genomics and consumer products company, today reported its financial and operational results for the full-year ended December 31, 2024 and outlined ...

Core Insights - ProPhase Labs Inc. will present its full year 2024 financial results and current company strategy on a virtual conference call on March 31, 2025 [1] - Stakeholders, investors, and followers are invited to register for the live event, which will also be available for replay on the company's investor website [2] Company Overview - ProPhase Labs Inc. is a next-generation biotech, genomics, and consumer products company focused on revolutionizing healthcare through Whole Genome Sequencing solutions and developing diagnostics and therapeutics for cancer [3] - The company aims to create a healthier world by providing innovative health and wellness solutions, emphasizing executional excellence and smart diversification [3]