GARDEN CITY, NY - ProPhase Labs, Inc. (NASDAQ: PRPH), a company specializing in biotech, genomics, and diagnostics, announced Thursday its intention to conduct an underwritten public offering of its common stock and potentially pre-funded warrants. The exact terms and size of the offering are subject to market conditions, and the company has not guaranteed its completion or the timing.
ProPhase Labs also intends to provide underwriters a 45-day option to purchase up to an additional 15% of the shares or pre-funded warrants to cover any over-allotments. The net proceeds from this offering are earmarked for working capital and general corporate purposes. These may include capital expenditures, product development, commercialization efforts, and acquisitions within or outside the company's current industry focus.
The offering is being managed by ThinkEquity, acting as the sole book-running manager. It will be conducted in accordance with a shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC) on November 5, 2021, and declared effective on November 12, 2021. The securities will be offered by means of a prospectus, with a preliminary prospectus supplement filed with the SEC.
ProPhase Labs, through its subsidiaries, focuses on providing health and wellness solutions, developing diagnostic technologies, and working on potential cancer diagnostics and therapeutics. The company's efforts include a test for early detection of esophageal cancer and the development of novel cancer treatments.
The announcement clarifies that this press release does not constitute an offer to sell or a solicitation of an offer to buy the securities. Such an offer will only be made through the prospectus supplement and accompanying prospectus part of the effective registration statement.
Investors are advised to read the preliminary prospectus supplement and accompanying prospectus in full, as well as other documents filed with the SEC, to understand more about ProPhase Labs and the offering.
This news article is based on a press release statement from ProPhase Labs, Inc.
In other recent news, ProPhase Labs has projected a substantial growth in revenue and pre-tax earnings for the year 2025, expecting its subsidiary Pharmaloz Manufacturing Inc. to generate approximately $16-17 million in revenue and $6-7 million in pre-tax earnings. The company has also initiated strategic discussions with major cancer diagnostic companies for its BE-Smart Esophageal Cancer Test. ProPhase Labs has seen changes in its certifying accountant, with Morison Cogen LLP resigning and the company finalizing a new independent registered public accounting firm.
In addition, ProPhase Labs disclosed non-compliance with Nasdaq's audit committee requirements due to the resignation of director Eleanor McBrier, and is actively seeking a new director to regain compliance. The company secured $10M in an amended note agreement with JXVII Trust for working capital and other corporate purposes. ProPhase Labs continues to focus on growth, particularly in personalized precision medicine and genetic testing, with projected revenue of $14-16 million and profits of $5 million over the next 12 months. The company is exploring strategic alternatives that could lead to a significant liquidity event in the near future. These are recent developments in the company's operations.
InvestingPro Insights
ProPhase Labs' decision to conduct a public offering comes at a challenging time for the company, as revealed by recent financial data from InvestingPro. The company's market capitalization stands at a modest $27.57 million, reflecting its current position in the biotech and diagnostics sector.
InvestingPro data shows that ProPhase Labs has experienced significant financial headwinds. The company's revenue for the last twelve months as of Q2 2024 was $17.97 million, with a stark revenue decline of 77.12% over the same period. This substantial drop in revenue aligns with an InvestingPro Tip indicating that analysts anticipate a sales decline in the current year.
Another InvestingPro Tip highlights that ProPhase Labs is quickly burning through cash, which may explain the company's decision to pursue this public offering to bolster its working capital. This cash burn is further evidenced by the company's negative gross profit of $1.64 million and an operating income margin of -188.93% for the last twelve months.
The company's stock performance has also been concerning, with InvestingPro data showing a 61.66% price decline over the past six months. This aligns with another InvestingPro Tip noting that the stock has taken a significant hit over the last six months.
These insights provide context for ProPhase Labs' decision to seek additional funding through a public offering. Investors considering this opportunity may want to carefully evaluate the company's financial position and future prospects. For a more comprehensive analysis, InvestingPro offers 12 additional tips for PRPH, providing a deeper understanding of the company's current situation and potential outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.