ProPhase Labs announces closing of $3M senior secured convertible notes

ProPhase Labs (PRPH) announced the closing of a private placement financing with two investors for $3 million in senior secured convertible notes with accompanying warrants to purchase shares of common stock. The notes were issued with a 20% original issue discount, are secured by the Company and subsidiary assets, and may be prepaid at any time without penalty. The notes are not convertible for the first four months after issuance. The warrants are exercisable at $0.50 per share. The transaction has been completed in accordance with the terms of a Securities Purchase Agreement, which contains such requirements for the Company as to authorize additional shares of common stock and take steps to obtain an effective registration statement. Up to an additional $3,000,000 in notes may be purchased by the investors as outlined in the Securities Purchase Agreement. The proceeds from the financing will be used for working capital and general corporate purposes and to repay certain existing debt.