ProPhase Labs(US:PRPH)2025-05-20 20:06Financial Performance - For the three months ended March 31, 2025, net revenue was $1.4 million, a decrease of 41.7% from $2.4 million for the same period in 2024[184]. - Gross margin profit for the three months ended March 31, 2025 was $0.5 million, compared to a gross margin loss of $0.1 million for the same period in 2024, resulting in an overall gross margin of 36.8%[186]. - Net loss from continuing operations for the three months ended March 31, 2025 was $4.7 million, or $(0.13) per share, compared to a net loss of $5.5 million, or $(0.32) per share, for the same period in 2024[190]. - Adjusted EBITDA from continuing operations for the three months ended March 31, 2025, was $(1,614,000), an improvement from $(4,286,000) in the prior year[196]. Revenue Generation - The company did not generate any revenues from diagnostic services for the three months ended March 31, 2025 and 2024, respectively[184]. - The company has not provided any diagnostic services since 2024 due to a significant decrease in demand and reimbursement rates[180]. - The company has not generated any diagnostic services revenue from the HRSA funding program for the three months ended March 31, 2025[213]. Expenses and Costs - General and administration expenses decreased by $3.2 million to $4.1 million for the three months ended March 31, 2025, compared to $7.3 million for the same period in 2024[187]. - Research and development costs decreased to $97,000 for the three months ended March 31, 2025, down from $272,000 for the same period in 2024, reflecting reduced activities related to product research[188]. - Interest expense increased to $539,000 for the three months ended March 31, 2025, compared to $441,000 for the same period in 2024, due to a higher balance of outstanding debt[189]. - The company incurred $4,000,000 in cash used in operating activities during the three months ended March 31, 2025[197]. - The Company anticipates that increased costs for retail operations due to inflation will be passed on to customers, while costs related to diagnostic services will be absorbed by the Company[219]. Cash and Capital - As of March 31, 2025, the company's cash and cash equivalents totaled $88,000, a significant decrease from $678,000 at December 31, 2024[197]. - The company anticipates continuing to incur losses and will require additional capital to fund operations, which may be raised through public or private equity or debt financings[202]. - The company sold 1,033,500 shares of common stock in April 2024, generating cash proceeds of $4,600,000 after offering costs[217]. - The Company closed a public offering selling 4,795,000 shares at $0.72 per share, raising gross proceeds of $3.5 million and net cash proceeds of $3.0 million after offering costs[218]. Obligations and Agreements - The company has a royalty obligation of 5.5% on sales of Equivir products following the first commercial sale[203]. - Under the Linebacker License Agreement, the company is required to pay $900,000 upon achieving a first Phase 3 study and an additional $1,000,000 upon receiving regulatory approval for the first product[204]. - The company has a term note agreement with an implicit interest rate of 15% for cash proceeds of $500,000, requiring monthly interest payments[212]. Market Conditions and Risks - Current economic conditions may lead to a decline in business and consumer spending, adversely affecting the Company's financial performance[225]. - The Company does not expect material losses in its investment portfolio or excessive exposure to market risks associated with interest rates[224]. - The Company has not experienced material changes in market risk exposures since December 31, 2024[226]. - There were no material changes in critical accounting estimates or accounting policies from December 31, 2024[221]. Strategic Initiatives - The company continues to actively pursue acquisition opportunities for other companies, technologies, and products within and outside the consumer products industry[182]. - The company acquired exclusive rights to the BE-Smart Esophageal Pre-Cancer Diagnostic Screening Test and related intellectual property assets in January 2023[175].