ProPhase Labs Signs Non-Binding LOI for Proposed Reverse Merger with Advanced Biological Laboratories

Core Viewpoint - The proposed reverse merger between ProPhase Labs, Inc. and Advanced Biological Laboratories S.A. aims to create a global, innovation-driven company that delivers near-term value for ProPhase shareholders and long-term growth for ABL [1][5]. Transaction Overview - A non-binding Letter of Intent (LOI) has been signed, indicating preliminary understandings without obligations to complete the transaction, pending due diligence and regulatory approvals [2][12]. - The proposed transaction may imply an enterprise value of up to approximately $30 million for ProPhase Labs, with a potential special cash dividend of up to $10 million for ProPhase shareholders [3][9]. Strategic Rationale - The merger is viewed as a significant strategic development for ProPhase, aligning it with ABL, a leader in molecular analysis and healthcare innovation, which can enhance the development of ProPhase's genomics and diagnostic programs [5][8]. - ABL shareholders are expected to own approximately 76% of the combined company post-merger, with a focus on operating ProPhase's Nebula Genomics platform and other health programs [6][10]. Asset and Liability Allocation - The combined entity will assume only specific liabilities, currently estimated at approximately $5 million, while other legacy liabilities will remain with ProPhase Labs [11]. - Current ProPhase shareholders will benefit from significant value carve-outs, including anticipated collections of approximately $50 million from Crown Medical Collections receivables [10]. Future Steps - The parties aim to finalize definitive agreements within approximately 60 to 90 days, with the transaction subject to customary closing conditions [4][12]. - A virtual conference call is scheduled for December 19, 2025, to present the proposed transaction to shareholders [13].