ProPhase Labs, Inc.

ProPhase Labs, Inc. is a growth-oriented and diversified next generation biotech, genomics and consumer products company that develops and commercializes novel drugs, dietary supplements, and compounds, and human genomic testing. The company operates through wholly-owned subsidiaries including Nebula Genomics, Inc. and DNA Complete, Inc. for whole genome sequencing and related services, and ProPhase BioPharma, Inc. for the licensing, development and commercialization of novel drugs, dietary supplements, and compounds. The company also develops and markets dietary supplements under the TK Supplements brand. Previously, the company offered COVID-19 related clinical diagnostic and testing services through ProPhase Diagnostics, Inc., which ceased providing diagnostic testing services since the fourth quarter of 2024. On September 22, 2025, the diagnostic subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code, and the company has deconsolidated the Debtors as of that date. The company owns exclusive rights to the BE-Smart Esophageal Pre-Cancer diagnostics screening test, which remains under development but has been tested on over 200 human samples. The company also holds exclusive worldwide rights to develop and commercialize LB-1 and LB-2 for the treatment of cancer, inflammatory diseases, and memory-related syndromes under a license agreement with Global BioLife, and exclusive worldwide rights to develop and commercialize Equivir and Equivir G under a separate license agreement with Global BioLife. Effective January 16, 2025, the company sold its Pharmaloz Contract Manufacturing business to JL Projects, Inc., receiving $2 million in cash as well as the extinguishment of approximately $11 million in debt and accrued interest.

Net revenue for the year ended December 31, 2025 decreased $2.4 million, or 35.8%, to $4.3 million compared to $6.8 million for the year ended December 31, 2024. The decrease in net revenue was the result of a $2.4 million decrease in consumer products as the company refines its focus with its genomics products and has reduced sales of its TK Supplements products. The company did not generate any revenues from diagnostic services for the years ended December 31, 2025 and 2024. Cost of revenues for the year ended December 31, 2025 was $3.0 million, comprised of $0.3 million for diagnostic services and $2.6 million for consumer products. The company realized a gross profit of $1.4 million for the year ended December 31, 2025, as compared to a gross margin loss of $0.2 million for the year ended December 31, 2024. For the years ended December 31, 2025 and 2024, the company realized an overall gross margin profit of 31.9% and gross margin loss of 2.2%, respectively. Gross margin for consumer products was 39.9% and 32.2% for the years ended December 31, 2025 and 2024, respectively.

General and administration expenses decreased $18.6 million for the year ended December 31, 2025 to $19.3 million, as compared to $37.9 million for the year ended December 31, 2024. Research and development costs for the years ended December 31, 2025 and 2024 were $107,000 and $594,000, respectively. Interest expense for the years ended December 31, 2025 and 2024 was $6.9 million and $3.4 million, respectively. Net loss for the year ended December 31, 2025 was $14.7 million, or $(1.74) per share, as compared to a net loss of $53.4 million, or $(26.68) per share, for the year ended December 31, 2024. Diluted net loss per share for the years ended December 31, 2025 and 2024 were $(1.74) and $(26.68), respectively.

The company's aggregate cash and cash equivalents as of December 31, 2025 were $90,000 as compared to $678,000 at December 31, 2024. The company's working capital deficit was $49.9 million and $1.5 million as of December 31, 2025 and 2024, respectively. The decrease of $588,000 in cash and cash equivalents for the year ended December 31, 2025 was primarily due to $8.3 million cash used in operating activities and $4.2 million repayment of notes payable, offset by proceeds from issuance of common stock, notes payable and convertible notes of $11.1 million and $0.9 million provided by investing activities. As of December 31, 2025 and through the date of the filing, the company has experienced significant liquidity constraints and operating challenges, with cash on hand of approximately $90.0 thousand.

The company's common stock is currently traded on The OTC Markets under the trading symbol PRPH. As of April 10, 2026, there were approximately 40 holders of record. The company has not paid dividends on its common stock in the foreseeable future and does not expect to pay any regular, quarterly cash dividend. The company's principal executive offices are located at 626 RXR Plaza, 6th Floor, Uniondale, New York, where it leases office space pursuant to a month-to-month shared office arrangement.

Management's discussion indicates that the company is taking steps to grow its genomics businesses while also continuing to explore the potential sale of Nebula. The company plans to commercialize the BE-Smart test as a Laboratory Developed Test, with steps towards commercialization planned for the first quarter of 2026 and broader insurance-backed commercialization targeted for the third quarter of 2026. The company estimates that the reimbursement rate for the BE-Smart test will range between $1,000 to $2,000 per test, giving it a total potential addressable market of $7 billion to $14 billion dollars per year. The company expects to review finalized results and statistics for the Equivir clinical trial in late 2026. The company anticipates that it will continue to incur losses for the foreseeable future and expects to continue to incur research and development costs and general and administrative expenses, as well as expenses related to potential commercialization of its product candidates. The company expects to generate greater revenues from its personal genomics business during the first quarter of its fiscal year due to seasonal holiday demand. Based on management's current business plans, the company estimates it will have enough cash and liquidity to finance its operating requirements for at least 12 months from the date of filing the audited consolidated financial statements. The company may use its cash to explore and/or acquire new product technologies, applications, product line extensions, new contract manufacturing applications and other new product opportunities. The company believes its access to existing and other financing sources, including its at-the-market facility, and established relationships with its investment banks will enable it to continue to meet its obligations and fund ongoing operations.

The company faces substantial doubt about its ability to continue as a going concern within one year after the date the financial statements are issued, as it had cash on hand of approximately $90.0 thousand as of December 31, 2025 and has experienced significant liquidity constraints and operating challenges ¹. The company's common stock is no longer listed on The Nasdaq Capital Market and is currently quoted on the OTC Markets, which may further limit access to capital. The diagnostic subsidiaries filed for Chapter 11 bankruptcy on September 22, 2025, and the outcome, timing, and amount of any recovery from the receivables collection program and operational reorganization are uncertain. The company faces a qui tam complaint filed under seal alleging violations of the federal False Claims Act relating to certain laboratory testing activities, and while the United States Department of Justice and relevant state authorities declined to intervene, the case remains pending. The company is also party to a pending arbitration proceeding commenced by Turnpoint Capital, LLC relating to a senior secured convertible note issued in July 2025, where Turnpoint alleges certain events of default and seeks monetary damages and other relief. A putative class action lawsuit, Portillo v. Nebula Genomics, Inc., was filed under Illinois's Genetic Information Privacy Act alleging that Nebula improperly shared customers' genetic information with third parties without written consent, and the complaint remains at the pleading stage. The company's diagnostic services revenues were subject to fluctuations in COVID-19 testing demand, and due to the significant decrease in demand and reimbursement rate, the company has not completed any diagnostic testing services since the fourth quarter of 2024. The company faces extensive governmental regulation by various federal, state, and local agencies, including the FDA, FTC, and CLIA, and noncompliance with applicable requirements can result in product recalls, seizure of products, injunctions, suspension of production and/or distribution, civil penalties and criminal fines.

Management's message to shareholders emphasizes the company's transformation into a next-generation biotech, genomics and consumer products company with a diversified portfolio. The forward-looking statements include plans to commercialize the BE-Smart test as a Laboratory Developed Test with steps towards commercialization planned for the first quarter of 2026 and broader insurance-backed commercialization targeted for the third quarter of 2026. Management also expects to review finalized results and statistics for the Equivir clinical trial in late 2026. The strategic priorities emphasized include growing the genomics businesses through DNA Complete and Nebula, advancing the development and commercialization of the BE-Smart esophageal pre-cancer diagnostic screening test, and continuing to develop the pharmaceutical pipeline including Linebacker LB-1 and LB-2 and Equivir. Management also notes the company is exploring the potential sale of Nebula and is actively evaluating various alternatives to improve liquidity and support ongoing operations, including raising additional capital through equity or debt financings, pursuing strategic partnerships, and reducing operating expenses.