Cover	May 09, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 09, 2024
Entity File Number	000-21617
Entity Registrant Name	PROPHASE LABS, INC.
Entity Central Index Key	0000868278
Entity Tax Identification Number	23-2577138
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	711 Stewart Avenue
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Garden City
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11530
City Area Code	(215)
Local Phone Number	345-0919
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0005
Trading Symbol	PRPH
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

Cover

May 09, 2024

Cover [Abstract]

Document Type

8-K

Amendment Flag

false

Document Period End Date

May 09, 2024

Entity File Number

000-21617

Entity Registrant Name

PROPHASE LABS, INC.

Entity Central Index Key

0000868278

Entity Tax Identification Number

23-2577138

Entity Incorporation, State or Country Code

Entity Address, Address Line One

711 Stewart Avenue

Entity Address, Address Line Two

Suite 200

Entity Address, City or Town

Garden City

Entity Address, State or Province

Entity Address, Postal Zip Code

11530

City Area Code

(215)

Local Phone Number

345-0919

Written Communications

false

Soliciting Material

false

Pre-commencement Tender Offer

false

Pre-commencement Issuer Tender Offer

false

Title of 12(b) Security

Common Stock, par value $0.0005

Trading Symbol

PRPH

Security Exchange Name

NASDAQ

Entity Emerging Growth Company

false

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

No.		Description

99.1		Press Release dated May 9, 2024

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

	ProPhase Labs, Inc.

	By:	/s/ Ted Karkus
		Ted Karkus
		Chairman of the Board and Chief Executive Officer

	●	The Company is currently engaged in late-stage negotiations to potentially either sell the plant or pre-book some or all of the future capacity of its second manufacturing line.

	●	Anticipate $40 - $45 million of potential revenue capacity once line two is fully operational in Q3. $80 - $100 million of potential revenue capacity if an additional two lines are installed in 2025.

	●	There is a significant shortage of lozenge manufacturing capacity in both the U.S. and globally.

	●	The Company estimates that to build a new manufacturing facility from scratch with the capacity that Pharmaloz could have next year might cost approximately $100 million and take 5 years to complete with FDA approvals. And of course, any such new facility would not include the customers that the Company already has.

	●	Pharmaloz recently signed two significant deals representing over $5 million in additional revenues per year. Manufacturing has already begun for the first of these deals. Both deals could expand significantly in the future. Importantly, the second customer is not seasonal.

	●	The Company is working on several more non-seasonal customers that were sourced at the largest annual health and wellness expo.

	●	Engineering completed the design of phase 1 and phase 2 plans. This could potentially take the plant from 1 lozenge line to a potential of up to 7 operational lines within the next four years and a potential of over $250 million in annual revenue capacity.

	●	New liquid fill equipment is ahead of schedule and already enroute to the factory with manufacturing anticipated to begin by the end of May.

	●	Existing customers accepted an average price increase of 15.2% for production in 2024.

	●	Passed the 3-year FDA audit with no citations.

	●	Recently passed the 4-Day UL Audit.

Title of Each Class		Trading Symbol		Name of Each Exchange on Which Registered
Common Stock, par value $0.0005		PRPH		Nasdaq Capital Market

	●	Expanded its business development team to increase global outreach and access to advanced genetic testing.

	●	Automated workflows and added key technicians in the New York lab have significantly improved throughput and reduced turnaround times.

	●	Nebula has built a massive database over the last six years, from whole genome sequencing tests across more than 130 countries, equivalent to roughly 150 million ancestry SNP-based tests.

	●	Data is safeguarded by world-class cyber security measures to protect sensitive genetic information.

	●	Nebula’s whole genome sequencing technology analyzes greater than 99% of human DNA, providing a deeper insight compared to typical ancestry tests that analyze less than 1%.

	●	Nebula’s proprietary bioinformatics platform delivers in-depth genetic health information, identifies rare genetic mutations, and traces ancestry at highly competitive prices.

	●	Signed key international business-to-business agreement with MenaDNA, Inc., a well-established global distribution company, enabling significant global growth opportunities.

	●	Additional significant agreements are currently under negotiation.

	●	Completed additional samples which are currently being analyzed by Stat King, a division of Genesis Drug Discovery and Development, to further validate the 90%+ sensitivity and specificity of the BE-Smart Esophageal Cancer test.

	●	Company on track to commercialize BE-Smart in the second half of 2024. Working with multiple consultants to secure CPT codes by the second half of 2024.

	●	Discussions for commercialization continue with a potential global partner.

	●	Working in conjunction with multiple groups to fully develop the ‘advanced traffic light’ approach of green, yellow, orange, and red to assess distinct levels of cancer risk, leading to optimized treatment approaches. This approach could lead to insurance companies mandating the use of the BE-Smart test for endoscopies performed on Barrett’s Esophagus patients.

	●	Working with Mayo Clinic to assess additional potential areas of interest within a panel of 55 additional markers. These patterns could help in conjunction with ZenQ-AI to develop potential targeted oncology therapies.

	●	The launch of Project ZenQ-AI marks a significant leap forward in cancer treatment research, utilizing the Company’s massive global genomics database and analyzing patented discoveries from its BE-Smart Esophageal Cancer diagnostic test.

	●	This initiative deploys state-of-the-art AI algorithms to discover potential new cancer therapies, specifically focusing on antibody drug conjugates.

	●	Anticipate that by the end of May, the 300^th patient will have reached the 180-day mark thereby completing the original target of enrolling 300 or more patients and monitoring such patients over a 180-day period.

	●	Currently have over 329 active patients in the study.

	●	Released impressive interim preliminary results from 152 patients at the 90-day mark.

	●	Remain on target for full data unlocking by the end of the second quarter.

	●	The Company is planning to increase production of the Equivir capsules with a second half 2024 launch timeframe.

	●	Currently working with the Company’s distribution partner to potentially leverage distribution longer term in over 40,000 food, drug and mass retail stores.

	●	Ended April with over $4.6 million in cash on the balance sheet.

	●	Realized over $3.6 million on the partial sale of an investment.

	●	Raised over $2.5 million by securitizing a small portion of outstanding receivables.

	●	Increased monthly accounts receivable collections with current collection partner.

	●	Started to receive payment from a key insurance company representing a receivable of close to $4.2 million.

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	1,175		$	1,609
Restricted cash		561			540
Marketable debt securities, available for sale		58			3,127
Accounts receivable, net		35,116			36,313
Inventory, net		3,758			3,841
Prepaid expenses and other current assets		4,377			2,155
Total current assets		45,045			47,585

Property, plant and equipment, net		12,797			12,898
Prepaid expenses, net of current portion		732			832
Operating lease right-of-use asset, net		4,462			4,572
Intangible assets, net		11,687			12,333
Goodwill		5,231			5,231
Deferred tax asset		9,762			7,313
Other assets		316			1,163
TOTAL ASSETS	$	90,032		$	91,927

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	11,759		$	9,383
Accrued diagnostic services		268			314
Accrued advertising and other allowances		8			24
Finance lease liabilities		1,840			1,840
Operating lease liabilities		959			953
Short-term loan payable, net of discount of $396		2,381			—
Deferred revenue		1,630			2,382
Income tax payable		3,005			3,278
Other current liabilities		2,057			2,683
Total current liabilities		23,907			20,857

Non-current liabilities:
Secured long-term debt, net of discount of $334 and $340		2,926			2,924
Unsecured promissory notes, net of discount of $232 and $266		7,368			7,334
Due to sellers (see Note 3)		2,000			2,000
Deferred revenue, net of current portion		1,100			1,100
Operating lease liabilities, net of current portion		4,122			4,237
Finance lease liabilities, net of current portion		3,742			4,092
Total non-current liabilities		21,258			21,687
Total liabilities		45,165			42,544

COMMITMENTS AND CONTINGENCIES

Stockholders’ equity
Preferred stock authorized 1,000,000, $0.0005 par value, no shares issued and outstanding		—			—
Common stock authorized 50,000,000, $0.0005 par value, 18,045,029 and 18,045,029 shares outstanding, respectively		18			18
Additional paid-in capital		120,283			118,694
Accumulated deficit		(11,294	)		(5,029	)
Treasury stock, at cost, 18,940,967 and 18,940,967 shares, respectively		(64,000	)		(64,000	)
Accumulated other comprehensive loss		(140	)		(300	)
Total stockholders’ equity		44,867			49,383
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	90,032		$	91,927

	For the three months ended
	March 31, 2024			March 31, 2023
Revenues, net	$	3,634		$	19,303
Cost of revenues		4,067			8,783
Gross (loss) profit		(433	)		10,520

Operating expenses:
Diagnostic expenses		—			1,203
General and administration		7,593			8,298
Research and development		272			144
Total operating expenses		7,865			9,645
(Loss) Income from operations		(8,298	)		875

Interest income, net		—			11
Interest expense		(515	)		(215	)
Other expense		(18	)		(107	)
(Loss) Income from operations before income taxes		(8,831	)		564
Income tax benefit (expense)		2,566			(14	)
(Loss) income from operations after income taxes		(6,265	)		550
Net (loss) income	$	(6,265	)	$	550

Other comprehensive income (loss):
Unrealized gain (loss) on marketable debt securities		160			(665	)
Total comprehensive loss	$	(6,105	)	$	(115	)

Earnings (loss) per share:
Basic	$	(0.07	)	$	0.03
Diluted	$	(0.07	)	$	0.03

Weighted average common shares outstanding:
Basic		90,423			16,748
Diluted		90,423			18,061

⁽¹⁾	We believe that net income (loss) is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA measure the Company’s operating performance without regard to certain expenses. EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP and the Company’s computation of EBITDA and Adjusted EBITDA may vary from others in the industry. EBITDA and Adjusted EBITDA have important limitations as analytical tools and should not be considered in isolation or as substitutes for analysis of the Company’s results as reported under GAAP.

⁽²⁾	The non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized exceeds (or is less than) our cash rent payments. For newer leases, our rent expense recognized typically exceeds our cash rent payments, while for more mature leases, rent expense recognized is typically less than our cash rent payments.