ProPhase Labs, Inc. (NASDAQ:PRPH) has disclosed non-compliance with Nasdaq's audit committee requirements following the resignation of director Eleanor McBrier. The pharmaceutical company, headquartered in Garden City, New York, reported the compliance issue to Nasdaq on Monday, resulting from a vacancy on its audit committee.
The departure of Ms. McBrier, who resigned on September 20, 2024, was not due to any disagreement with the company or its board, but rather a conflict with the policies of her current employer. ProPhase Labs has expressed appreciation for her contributions during her tenure.
In response to the non-compliance notice received on Thursday, ProPhase Labs is actively seeking a new director with expertise in gastroenterology to aid in the development of its BE-Smart esophageal cancer test. The company aims to regain compliance before the cure period expires, which is set for the earlier of their next annual stockholders' meeting or September 20, 2025.
This information is based on a press release statement. ProPhase Labs has not provided any forward-looking statements regarding the impact of these events on its operations or financial performance. The company's efforts to address the audit committee vacancy are ongoing, and any further updates will be in accordance with SEC regulations and filings.
In other recent news, ProPhase Labs has secured $10M in an amended note agreement with JXVII Trust, increasing the principal from $7.6M to $10M and extending the maturity date to August 15, 2027. The funds are slated for working capital and general corporate purposes, including potential acquisitions. The company's debt, as of June 30, 2024, was approximately $13.6 million, against cash and cash equivalents of about $2.4 million.
On the growth front, ProPhase Labs is implementing measures to counterbalance the seasonality impacts on its Pharmaloz business, projecting revenue of $14-16 million and profits of $5 million over the next 12 months. The company is also bolstering its subsidiary, Nebula Genomics, with a new marketing strategy for its 1x whole genome sequencing product.
In addition, ProPhase Labs is exploring strategic alternatives that could lead to a significant liquidity event in the first quarter of the following year. The company sees potential in the BE-Smart Esophageal Cancer test's market, targeting an industry with limited competition.
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