PRPH News & Events

ProPhase Labs provided a business update regarding its Crown Medical Collections initiative and related strategic activities. The Company reported that its Crown Medical Collections effort continues to advance, with engagement now underway with more than 250 insurance payors. Of these matters, approximately 100 are currently in active settlement discussions, with a number of cases progressing into more advanced stages of negotiation. Based on the level of engagement and progression of discussions, the Company believes current activity is trending in line with its previously communicated recovery framework and internal estimates, and is encouraged by the ongoing development of these discussions. In parallel, the Company is engaged in discussions with institutional capital providers regarding potential financing alternatives, including structures that are expected to be secured by the Company's receivables platform, without recourse to the parent company. These discussions follow extensive third-party diligence conducted on the receivables and related recovery processes. While no assurances can be given that any transaction will be completed, the Company believes the level of diligence completed and the nature of these discussions reflect growing external validation of the underlying asset and may enhance its financial flexibility. Management continues to focus on stabilizing near term liquidity, managing liabilities and vendor relationships, and preserving and advancing key assets, including Nebula Genomics/DNA Complete and the BE-Smart esophageal cancer diagnostic. The Company believes it is beginning to see tangible indicators of progress driven by advancing settlement activity and continued strategic engagement, with current developments tracking in line with Crown Medical's prior guidance to the Company. ProPhase Labs remains focused on execution and expects to provide additional updates in the near future as developments occur.

ProPhase Labs announced that it has initiated a potential sale or strategic partnership process for BE-Smart, its clinically validated esophageal cancer risk stratification test, and is advancing its Crown Medical Collections initiative. "We believe BE-Smart represents a differentiated, clinically validated diagnostic that is ready for commercial deployment as an LDT," said Ted Karkus, Chairman and Chief Executive Officer of ProPhase Labs. "By pursuing a sale or strategic partnership, we aim to unlock immediate liquidity, significantly reduce internal development and commercialization costs, and potentially participate in long-term royalty or revenue-sharing streams as adoption expands through a partner's established distribution network."

ProPhase Labs provided an operational update on the progress of its Crown Medical Collections initiative relating to legacy COVID-19 testing receivables held by its laboratory subsidiaries currently in Chapter 11 proceedings. According to Crown Medical: "Crown Medical Collections, in its capacity as special counsel for the collection of accounts receivable, is actively engaged in settlement negotiations with more than 250 insurance payors relating to outstanding ProPhase receivables. Approximately 50 of these matters are presently in advanced settlement posture, with anticipated resolutions expected to close within the next 30 to 90 days. These recoveries are expected to generate substantial proceeds and materially enhance near-term liquidity in support of ongoing operations and an orderly court-supervised restructuring process."