ProPhase Labs files definitive proxy statement for special meeting

ProPhase Labs (PRPH) filed a definitive proxy statement with the U.S. Securities and Exchange Commission on Friday, August 15, 2025 and received a “no further comments” letter from the SEC’s Division of Corporation Finance Office of Life Sciences, indicating that the Staff had completed the review of the Preliminary Proxy Statement of Schedule 14A, on Monday, August 18, 2025. The Special Meeting of Shareholders that was scheduled for August 29, 2025 will now be held on Tuesday, September 9, 2025, at 4:00 p.m. The Board of Directors has unanimously recommended shareholders vote ‘FOR’ all proposals at the upcoming Special Meeting and believes that the proposals to be voted on are primarily intended to position the Company for innovative growth by supporting initiatives such as advancing the crypto treasury strategy that management is exploring. Investment in bitcoin can generate a yield which could be used to support the commercialization of the BE-Smart Esophageal Cancer test and grow the Nebula Genomics subsidiary now that the genomics business has been restructured and is projected to be profitable on a pro forma basis. If approved, these proposals are expected to provide ProPhase with the financial flexibility and strategic resources necessary to pursue its opportunities in the biotech, genomics, and digital asset sectors, which the Board believes may increase long-term value and growth potential for all shareholders. Some key proposals include increasing shares available under equity compensation plans, raising the authorized shares of common stock from 50M to 1B, and authorizing a $15M share repurchase program. The proposed increase in authorized shares is primarily intended to provide the flexibility and capital structure necessary to pursue the Company’s crypto treasury strategy, which potentially involves the acquisition and long-term holding of digital assets including Bitcoin. Note that increasing the authorized shares simply provides additional financial flexibility and does not necessarily mean that additional shares will be issued. One of the primary goals of the proposal to increase the authorized common shares is to attract large and powerful players in the crypto industry, including major trading partners, a preeminent investment bank, and other important industry partners. The proposal to increase the authorized shares is in part to attract these players and set up the Company to build its current verticals and add one or more crypto-related verticals over time that could ultimately be substantially accretive to shareholders. The management team has been working to explore and develop the potential crypto treasury strategy. The Company recognizes the significant underlying value of its subsidiaries and assets and has therefore determined not to explore a reverse merger at this time. To the contrary, the Company’s goal is to build a crypto treasury strategy that takes advantage of several potential liquidity events in the Company’s future, including the potential $50M from the Crown Medical Collections initiative as well as a possible sale of Nebula Genomics. A portion of either of these potential liquidity events, as well as a potential partnership for the BE- Smart Esophageal Cancer test, could be used to invest in a crypto treasury strategy by purchasing Bitcoin that would then generate a yield and earnings for shareholders. It is a conservative way to grow the value of the Company for its shareholders. Any of these potential liquidity events could be structured to provide capital to the Company that is accretive and not dilutive.