ProPhase Labs Enters Stock Purchase Agreement with JL Projects, Inc.

ProPhase Labs, Inc. (NASDAQ:PRPH) recently announced that on January 16, 2025, the company entered into a Stock Purchase Agreement with JL Projects, Inc., a Delaware corporation. According to the agreement, JL Projects acquired all issued and outstanding shares of capital stock of two wholly-owned subsidiaries of ProPhase Labs, namely Pharmaloz Manufacturing, Inc. (PMI) and Pharmaloz Real Estate Holdings, Inc. (PREH). The transaction was finalized concurrently with the execution of the agreement on the aforementioned date.

PMI, a subsidiary of ProPhase Labs, is engaged in the development, manufacturing, packaging, and warehousing of non-prescription drug and dietary supplement products, which include organic and natural cough drops and lozenges. The facility is situated at 500 North 15th Avenue, Lebanon, Pennsylvania 17046. Additionally, PREH was the former owner of the facility before the sale as per the agreement.

As part of the agreement, JL Projects made approximately $2 million in cash payments to ProPhase Labs and settled around $10 million of the company’s debt. Furthermore, JL Projects took on responsibilities such as assuming the existing $3.3 million mortgage on PMI’s manufacturing facility, capital leases of nearly $2 million, and about $3 million in current and accrued payables. They also paid down $200,000 on a loan from affiliates of JL Projects. In addition, the deal led to the cancellation of roughly $300,000 in accrued interest related to the retired debt. Notably, the transaction resulted in ProPhase Labs avoiding approximately $3 million in upcoming capital expenditures as those will now be the responsibility of JL Projects. Moreover, over $600,000 in employee annual overhead was transferred from ProPhase Labs to PMI.

The agreement contains standard representations, warranties, and covenants by both ProPhase Labs and JL Projects. This summary is not exhaustive, and for a comprehensive understanding, readers are encouraged to refer to the full copy of the Agreement filed as Exhibit 2.1 in the Form 8-K report.

Incorporating the details from Item 1.01, the completion of the asset acquisition or disposition is under Item 2.01 of the report. Regarding financial statements and exhibits, the Stock Purchase Agreement dated January 16, 2025, between ProPhase Labs, Inc. and JL Projects, Inc. has been filed as Exhibit 2.1.

ProPhase Labs, Inc. ensured the signing of this report on January 23, 2025, by the Chairman of the Board and Chief Executive Officer, Ted Karkus, in compliance with the Securities Exchange Act of 1934.

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.