ProPhase Labs Announces Closing of $23.6 Million Sale of Pharmaloz Manufacturing to Houston-Based Private Equity Firm

Core Viewpoint - ProPhase Labs, Inc. has successfully closed the sale of its subsidiaries, Pharmaloz Manufacturing Inc. and Pharmaloz Real Estate Holdings, Inc., to a private equity group, significantly improving its financial position by eliminating over $20 million in debt and enhancing liquidity with $2 million in cash [1][2][6]. Financial Impact - The transaction has an aggregate deal value of approximately $23.6 million, which includes the retirement of more than $10 million in debt and the assumption of nearly $2 million in capital leases and close to $3 million in current and accrued payables [1][2][7]. - The private equity group will also assume a $3.3 million mortgage on the manufacturing facility, further alleviating financial burdens on ProPhase [3][7]. Operational Changes - The sale allows ProPhase to reduce overhead by transferring several employees to Pharmaloz, enabling the company to focus on its core businesses [3][7]. - The transaction avoids approximately $3 million in planned near-term capital expenditures, which will now be the responsibility of the buyer [5][7]. Strategic Focus - The CEO of ProPhase Labs emphasized that this sale is part of a broader strategy to reduce overhead and improve the balance sheet, positioning the company closer to sustainable profitability [6][8]. - The company aims to concentrate on its core growth opportunities, including the BE-Smart Esophageal Cancer Test and the upcoming launch of Equivir [6][8].