Form 8-K/A - Current report: [Amend]
August 22 2024 - 6:07AM
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0000868278
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2024-08-15
2024-08-15
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment No. 1)
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
City, New York |
|
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. ☐
Explanatory
Note
ProPhase
Labs, Inc. (the “Company”) is filing this Amendment No. 1 on Form 8-K/A (the “Amendment”) solely to include
the disclosure of $16.1 million in working capital as of June 30, 2024 to the risk factor disclosed under Item 8.01 of its Current
Report on Form 8-K as filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 21, 2024 (the “Original
Report”). Item 8.01 of the Original Report is amended and restated in its entirety as set out below. No other items or disclosures
in the Original Report are being amended; however, this Amendment hereby restates and supersedes in its entirety the disclosures included
in the Original Report.
Item
1.01. Entry into a Material Definitive Agreement.
On
August 15, 2024, 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 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 on or to refinance our indebtedness depends on our future performance,
which is subject to economic, financial, competitive and other factors beyond our control. We had, as of June 30, 2024, approximately
(i) $16.1 million in working capital, (ii) $2.4 million in cash and cash equivalents, and (iii) $13.6 million of outstanding indebtedness,
net of discounts. In addition, on August 15, 2024, we amended and restated the unsecured promissory note and guaranty previously
issued to JXVII Trust that increased the principal amount from $7.6 million to $10.0 million. Our business may not generate cash flow
from operations in the future sufficient to service our debt obligations and make necessary capital expenditures. If we are unable to
generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining
additional equity capital on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the
capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these
activities on desirable terms, which could result in a default on our debt obligations.
Item
9.01. Financial Statements and Exhibits.
* |
Certain portions of this Exhibit have been omitted pursuant to Regulation S-K Item 601(a)(6) promulgated under the Exchange Act of
1934, as amended. The Company agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. |
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
ProPhase
Labs, Inc. |
|
|
|
|
By: |
/s/
Ted Karkus |
|
|
Ted
Karkus |
|
|
Chief
Executive Officer |
|
|
|
Date:
August 22, 2024 |
|
|
v3.24.2.u1
Cover
|
Aug. 15, 2024 |
Cover [Abstract] |
|
Document Type |
8-K/A
|
Amendment Flag |
true
|
Amendment Description |
ProPhase
Labs, Inc. (the “Company”) is filing this Amendment No. 1 on Form 8-K/A (the “Amendment”) solely to include
the disclosure of $16.1 million in working capital as of June 30, 2024 to the risk factor disclosed under Item 8.01 of its Current
Report on Form 8-K as filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 21, 2024 (the “Original
Report”). Item 8.01 of the Original Report is amended and restated in its entirety as set out below. No other items or disclosures
in the Original Report are being amended; however, this Amendment hereby restates and supersedes in its entirety the disclosures included
in the Original Report.
|
Document Period End Date |
Aug. 15, 2024
|
Entity File Number |
000-21617
|
Entity Registrant Name |
PROPHASE
LABS, INC.
|
Entity Central Index Key |
0000868278
|
Entity Tax Identification Number |
23-2577138
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
711
Stewart Avenue
|
Entity Address, Address Line Two |
Suite 200
|
Entity Address, City or Town |
Garden
City
|
Entity Address, State or Province |
NY
|
Entity Address, Postal Zip Code |
11530
|
City Area Code |
(215)
|
Local Phone Number |
345-0919
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Title of 12(b) Security |
Common
Stock, par value $0.0005
|
Trading Symbol |
PRPH
|
Security Exchange Name |
NASDAQ
|
Entity Emerging Growth Company |
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