ProPhase Labs Enters into Common Stock Purchase Agreement with Equity Line Investor

On January 29, 2025, ProPhase Labs, Inc. (NASDAQ: PRPH) finalized a common stock purchase agreement with an equity line investor, allowing the company to offer and sell up to $7,730,973 of its common stock. The agreement, known as the Purchase Agreement, permits ProPhase Labs to sell shares at its discretion, with the Investor committed to purchasing shares subject to specified conditions and limitations.

Following the satisfaction of conditions precedent, ProPhase Labs may direct the Investor to purchase shares at a price determined by the lowest traded price of the common stock on specified purchase dates or the daily volume-weighted average price for the stock on the NASDAQ for a designated period. The Investor’s obligations under the Purchase Agreement are capped at certain limits to manage the purchase of shares effectively.

To further solidify the agreement, ProPhase Labs issued 352,176 shares of Common Stock to the Investor as commitment fee shares.

Under the terms of the agreement, sales of Purchase Shares will be based on various factors, including market conditions and the company’s assessment of funding sources. The proceeds generated from these stock sales are intended to support ProPhase Labs’ working capital and general corporate purposes, with a commitment to allocate a portion towards redeeming any preferred stock issued during the Investment Period.

The Company and the Investor are subject to standard representations, warranties, and obligations outlined in the Purchase Agreement, which also restrict certain activities such as short sales of common stock by the Investor during the agreement term.

The Purchase Agreement will automatically terminate under specific circumstances, including completion of the purchase of shares by the Investor or Company, or if the common stock fails to meet listing requirements.

ProPhase Labs affirmed that the offering of Common Stock is duly registered and compliant with the Securities Act of 1933 under the Company’s shelf registration statement.

The full details and legalities of the Purchase Agreement and accompanying transactions can be found in the official filing with the Securities and Exchange Commission.

ProPhase Labs has issued a legal opinion letter from Reed Smith LLP, providing assurance on the validity of the shares issued as part of the Purchase Agreement.

This arrangement underscores ProPhase Labs’ strategic approach to capitalization and financial management, positioning the company for potential growth and operational enhancement.

The Purchase Agreement’s disclosure and related documents are provided in the official filing with the SEC for public reference and transparency within the investment community.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read ProPhase Labs’s 8K filing here.

About ProPhase Labs

ProPhase Labs, Inc develops and commercializes novel drugs, dietary supplements, and compounds in the United States. It operates through two segments: Diagnostic Services and Consumer Products. The company provides a range of TK supplements, including Legendz XL for male sexual health; and Triple Edge XL, an energy and stamina booster.