PROPHASE LABS, INC. ANNOUNCES COMPLETION OF IMPORTANT NEXT STEP FOR CROWN MEDICAL COLLECTIONS $50 MILLION A/R INITIATIVE

Core Viewpoint - ProPhase Labs, Inc. has announced that its three COVID-19 testing laboratory subsidiaries have filed for reorganization under Chapter 11 bankruptcy, aiming to recover tens of millions of dollars owed by insurance companies and to ensure long-term viability and growth of the laboratories [1][2][3]. Group 1: Bankruptcy Filing Details - The bankruptcy action is limited to the COVID-19 lab testing units, which are owed tens of millions of dollars by insurance companies [2]. - The company aims to streamline the recovery of funds that it believes are lawfully owed for approved testing services, with many claims previously approved but underpaid by insurance companies [2][3]. - The CEO stated that the Crown Medical Collections group will pursue litigation against insurance companies, estimating potential cash collections of $50 million or more, which could significantly exceed the company's current market capitalization [3]. Group 2: Impact on Company Operations - The bankruptcy process does not affect ProPhase Labs, Inc. as a parent company or its other initiatives, which include the development of a groundbreaking esophageal cancer test [3][4]. - The company continues to advance projects in health technology, including its Nebula Genomics and DNA Complete subsidiaries, which are making progress in genomic and DNA-based testing [3][4]. Group 3: Future Outlook - The company is focused on innovation and growth in health technology, with the bankruptcy filing seen as a necessary step to collect owed funds for reinvestment in ongoing projects [4]. - The exploration of a crypto treasury strategy by the parent company is unrelated to the bankruptcy proceedings involving the lab subsidiaries [4].