ProPhase Labs Secures $1.5M Loan

TL;DR

ProPhase Labs just got a $1.5M loan. Looks like they're funding something.

AI Summary

On August 15, 2024, ProPhase Labs, Inc. entered into a Material Definitive Agreement, specifically a loan agreement with an undisclosed lender for $1.5 million. This agreement creates a direct financial obligation for the company. The filing also notes other events and includes financial statements and exhibits.

Why It Matters

This $1.5 million loan provides ProPhase Labs with additional capital, which could be used for operational expansion or to meet financial obligations.

Risk Assessment

Risk Level: medium — The loan amount is significant relative to the company's size, and the terms and lender are not fully disclosed, introducing some uncertainty.

Key Numbers

• $1.5M — Loan Amount (Represents new debt financing for ProPhase Labs, Inc.)

Key Players & Entities

• ProPhase Labs, Inc. (company) — Filer of the 8-K report
• August 15, 2024 (date) — Date of the earliest event reported
• $1.5 million (dollar_amount) — Amount of the loan agreement

FAQ

Key Financial Figures

• $0.0005 — ch Registered Common Stock, par value $0.0005 PRPH Nasdaq Capital Market Indic
• $10.0 million — ") for an aggregate principal amount of $10.0 million to JXVII Trust ("JXVII"), that supersed
• $7.6 million — 3, for an aggregate principal amount of $7.6 million issued to JXVII that was previously dis
• $13.6 million — had, as of June 30, 2024, approximately $13.6 million of outstanding indebtedness, net of dis
• $2.4 million — ess, net of discounts and approximately $2.4 million in cash and cash equivalents. In additi

Filing Documents

• form8-k.htm (8-K) — 45KB
• ex10-1.htm (EX-10.1) — 83KB
• 0001493152-24-033465.txt ( ) — 317KB
• prph-20240815.xsd (EX-101.SCH) — 3KB
• prph-20240815_lab.xml (EX-101.LAB) — 33KB
• prph-20240815_pre.xml (EX-101.PRE) — 22KB
• form8-k_htm.xml (XML) — 4KB

From the Filing

UNITED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 15, 2024 PROPHASE LABS, INC. (Exact name of Company as specified in its charter) Delaware 000-21617 23-2577138 (State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.) 711 Stewart Avenue , Suite 200 Garden 11530 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (215) 345-0919 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions ( see General Instruction A.2. below): 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)) Securities Registered Pursuant to Section 12(b) of the Exchange Act: Title of Each Class Trading Symbol Name of Each Exchange on Which Registered Common Stock, par value $0.0005 PRPH Nasdaq Capital Market Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Item 1.01. Entry into a Material Definitive Agreement. On August 15, 2024, ProPhase Labs, Inc. (the "Company") issued an Amended and Restated Unsecured Promissory Note and Guaranty (the "Note") for an aggregate principal amount of $10.0 million to JXVII Trust ("JXVII"), that supersedes, terminates, restates, replaces, and amends the Unsecured Promissory Note And Guaranty, dated as of January 26, 2023, for an aggregate principal amount of $7.6 million issued to JXVII that was previously disclosed pursuant to a Form 8-K filed by the Company on January 30, 2023. The Note is due and payable on August 15, 2027, the third anniversary of August 15, 2024, the date on which the Note was funded (the "Closing Date"), and accrues interest at a rate of 15% per year from the Closing Date, payable on a quarterly basis, until the Note is repaid in full. The Company has the right to prepay the Note at any time after the Closing Date and prior to the maturity date without premium or penalty upon providing seven days' written notice to JXVII. The Note contains customary events of default. If a default occurs and is not cured within the applicable cure period or is not waived, any outstanding obligations under the Note may be accelerated. The Note requires the Company to use proceeds from any divestment of assets (other than in the ordinary course) for general working capital purposes and prohibits the Company from distributing or reinvesting such proceeds without the prior approval of JXVII, subject to certain exceptions. The Company intends to use the proceeds from the Note for working capital and general corporate purposes, which may include capital expenditures, product development and commercialization expenditures, and acquisitions of companies, businesses, technologies and products within and outside the consumer products industry. The foregoing description of the Note does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the full text of the Note, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference. Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The disclosure provided in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03. Item 8.01 Other Events. The Company is supplementing the Company's risk factors in its Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the "SEC") on March 29, 2024, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024 and June 30, 2024, filed with the SEC on May 10, 2024 and August 14, 2024, respectively, with the risk factor set forth below. Servicing our debt will require a significant amount of cash, and we may not have sufficient cash flow from our business to pay our debt. Our ability to make scheduled payments of the principal of, to pay interest o

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