8-K
ProPhase Labs, Inc. (PRPH)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 2025
PROPHASE
LABS, INC.
(Exact name of Company as specified in its charter)
| Delaware | 000-21617 | 23-2577138 |
|---|---|---|
| (State<br> or other jurisdiction<br><br> <br>of<br> incorporation) | (Commission<br><br> <br>File<br> Number) | (I.R.S.<br> Employer<br><br> <br>Identification<br> No.) |
| 626 RXR Plaza, 6th Floor<br><br> <br>Uniondale, New York | 11556 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
Registrant’s telephone number, including area code: (516) 989-0763
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities Registered Pursuant to Section 12(b) of the Exchange Act:
| Title<br> of Each Class | Trading<br> Symbol | Name<br> of Each Exchange on Which Registered |
|---|---|---|
| Common<br> Stock, par value $0.0005 | PRPH | Nasdaq<br> Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item2.02 Results of Operation and Financial Condition.
On August 13, 2025, ProPhase Labs, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2025. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item7.01 Regulation FD Disclosure.
As previously announced, the Company will conduct a conference call today, Wednesday, August 13, 2025, at 2:00 p.m. (Eastern Time) to discuss its financial results and provide an update on corporate developments.
The information contained in Items 2.02 and 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward-LookingStatements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements contained in this Current Report on Form 8-K other than statements of historical fact are forward-looking statements. Such forward-looking statements include, among other things, statements regarding the Company’s ability to regain compliance with Nasdaq listing standards or receive additional time from Nasdaq to regain compliance if necessary. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Words such as “believes,” “anticipates,” “plans,” “expects,” “intends,” “will,” “goal,” “potential” and the negative of such terms or other similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements are based on the Company’s current expectations and involve assumptions that may never materialize or may prove to be incorrect. Actual results could differ materially from those projected in any forward-looking statements due to numerous risks and uncertainties. Information regarding the foregoing and additional risks may be found in the section entitled “Risk Factors” in documents that the Company files from time to time with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this Current Report on Form 8-K, and the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits
| No. | Description |
|---|---|
| 99.1 | Press Release dated August 13, 2025, ProPhase Labs Announces Financial Results for the Three and Six Months Ended June 30, 2025 |
| 104 | Cover<br> Page Interactive Data File (embedded within the Inline XBRL document) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ProPhase Labs, Inc. | |
|---|---|
| By: | /s/ Ted Karkus |
| Ted<br> Karkus | |
| Chairman<br> of the Board and Chief Executive Officer |
Date: August 13, 2025
Exhibit 99.1
ProPhaseLabs Announces Financial Results for the Three and Six Months Ended June 30, 2025
ProPhaseDelivers Significant Operational and Financial Improvements, Advances Multiple Non-Dilutive Liquidity Initiatives, and Targets TransformationalGrowth Catalysts
Companygranted key U.S. patent on BE-Smart™ Esophageal Adenocarcinoma Risk Assessment test (August 2025)
Companyto hold a virtual conference call Wednesday, August 13, 2025, at 2:00 PM ET
UNIONDALE,NY, August 13, 2025 (GLOBE NEWSWIRE) – ProPhase Labs, Inc. (NASDAQ: PRPH), (the “Company” or “ProPhase”) a diversified diagnostics, genomics, and consumer healthcare company, today reported financial and operational results for the three and six months ended June 30, 2025.
Ted Karkus, CEO of ProPhase Labs, will present to shareholders today, Wednesday, August 13, 2025, at 2:00 p.m. ET during the live Virtual Non-Deal Roadshow Series. The details are available below.
SecondQuarter 2025 and Year-to-Date Highlights and Subsequent Events
| ● | Achieved<br> a clear earnings turnaround, including significant positive impacts from subsequent events. |
|---|---|
| ● | Strengthened<br> equity position – Stockholders’ equity increased to $11.5 million at June 30,<br> 2025, from $7.4 million at year-end 2024. |
| ● | Secured<br> final patent covering BE-Smart™, strengthening IP portfolio. Accelerated commercialization<br> pathway – BE-Smart™ positioned for faster market entry following favorable regulatory<br> shifts; development continues under CLIA framework. |
| ● | Streamlined<br> operations – Reduced operating expenses by over 35% YTD through disciplined portfolio<br> optimization and cost controls. |
| ● | Eliminated<br> high-cost debt – Majority of merchant cash advance debt repaid, lowering overhead and<br> increasing financial flexibility. |
| ● | Removed<br> largest monthly cash drain from subsidiaries in Q2 2025. |
| ● | Completed<br> strategic portfolio realignment – Sale of PMI and Pharmaloz Real Estate generated $8.7M<br> gain and eliminated $20M+ in debt/liabilities. |
| ● | Improved<br> margins and narrowed losses in Q2 2025 vs. Q2 2024. |
BE-Smart™Esophageal Pre-Cancer Diagnostic Test Continues Towards Commercialization
In August 2025, the United States Patent and Trademark Office granted a key U.S. patent on the Company’s BE-Smart™ Esophageal Adenocarcinoma Risk Assessment test. ProPhase Labs owns the full intellectual property portfolio behind BE-Smart™.
NebulaGenomics Operations Streamlined
Jason Karkus, President of Nebula Genomics stated: “Over the past year, we have successfully transformed Nebula Genomics into a leaner, stronger, and more scalable business. By streamlining operations, exiting our in-house lab, right-sizing our team, optimizing technology expenses, and focusing on high-ROI marketing, we have moved from consistent historical losses, including prior to our acquisition, to a break-even position today, with a clear path to sustained profitability as subscription renewals and cost efficiencies continue. With a stronger cost structure, enhanced sequencing partnerships, and improved customer economics, Nebula is well positioned for the next phase of growth, whether through a strategic sale that delivers immediate value or continued expansion over the next 9 to 12 months to significantly increase enterprise value.”
$50Million Opportunity with Crown Medical Collections progresses
Crown Medical Collections estimates the recovery of approximately $50 million in insurance payments, net of contingency fees, on behalf of ProPhase. After significant due diligence and preparation, this initiative has moved to important next steps. Due to the nature of litigation, the Company has been advised to be cautious in providing additional details at the current time. In conjunction, management is actively pursuing non-dilutive funding strategies, including Debtor-In-Possession (DIP), or similar financings.
The Company believes that Crown Medical’s efforts should start to generate significant cash flow within the next few months and in some cases, possibly sooner. If Crown’s efforts succeed, this could serve as a significant, non-dilutive financial influx in the second half of 2025 to support strategic development of ProPhase’s core businesses. Notably, the Company currently carries only $20 million dollars total accounts receivable, net, in its financials for this initiative (less than half of what Crown estimates the Company will net.)
NewCrypto Treasury Strategy Designed to Capture Upside Without Sacrificing Shareholder Value
The Board has approved a strategic treasury initiative involving the acquisition and long-term holding of select digital assets, including Bitcoin. This initiative is designed as an additional growth lever, complementing, not replacing, our core diagnostics and consumer health businesses. The Company is not pursuing a reverse merger but is seeking to partner with leading players in the crypto space while continuing to advance its core businesses, each with significant underlying value.
InConjunction with the Company’s Potential Crypto Treasury Strategy, Board Exploring Implementing Guardrails for Share Issuance
The Board is committed to protecting shareholder interests and is evaluating guardrails to avoid unnecessary dilution. The proposed increase in authorized shares to one billion is solely to ensure the flexibility to act quickly if the stock price rises significantly, enabling potential raises of hundreds of millions of dollars at premium valuations with minimal dilution. This disciplined approach mirrors our January 2021 raise of $37.5M at $12.50 per share, well above the $2 per share price months earlier.
Our objective is to generate substantial capital with minimal impact on existing shareholders, while leveraging other potential liquidity events, including the Crown Medical Collections initiative and a possible sale of Nebula Genomics, to fund the crypto treasury strategy without issuing new shares.
The Company will provide additional details regarding this important initiative next week.
CEOCommentary:
Ted Karkus, Chairman and CEO of ProPhase Labs, stated:
“The first half of 2025 was transformational for ProPhase. We divested non-core operations, reduced liabilities by more than ten million dollars, and recorded a significant gain, all while continuing to streamline our cost structure. These steps dramatically improved our balance sheet and sharpened our focus on our highest-potential opportunities in diagnostics and consumer health.
Operationally, we turned gross margins positive and cut our operating loss nearly in half year-over-year. The FDA’s recent non-enforcement stance on LDTs positions our BE-Smart™ test for a faster path to market, and we are executing our plan to bring this important innovation to patients sooner. Our team is committed to disciplined execution and advancing the commercial potential of our core pipeline while aggressively exploring the new crypto treasury initiative.”
CEOto present to Shareholders
ProPhase will also present to shareholders today, August 13, 2025, at 2:00 p.m. ET during the live Virtual Non-Deal Roadshow Series hosted by Renmark Financial Communications Inc. During this presentation, Ted Karkus will offer further insights into the Company’s trajectory and respond to investor questions.
Investors interested in participating in this live event will need to register using the link below. After the event, a replay will be available on The Company’s investor website.
REGISTERHERE:
https://www.renmarkfinancial.com/events/second-quarter-2025-results-virtual-conference-call-nasdaq-prph-wUOjCShxnL
| ● | To ensure smooth connectivity, please access this link using the latest version of Google Chrome. |
|---|
FinancialResults
For the three months ended June 30, 2025, net revenue was $1.2 million as compared to $1.5 million for the three months ended June 30, 2024. The Company did not generate any revenues from diagnostic services for the three months ended June 30, 2025 and 2024, respectively.
Cost of revenues for the three months ended June 30, 2025 were $0.5 million, comprised of $0.1 million for diagnostic services and $0.4 million for consumer products. Cost of revenues for the three months ended June 30, 2024 were $1.7 million, comprised of $0.7 million for diagnostic services and $1.0 million for consumer products.
We realized a gross margin profit of $0.7 million for the three months ended June 30, 2025 as compared to a gross margin loss of $0.2 million for the three months ended June 30, 2024. The increase of $0.9 million was a result of increased consumer products with better margin product mix. For the three months ended June 30, 2025 and 2024, we realized an overall gross margin of 58.9% and (10.3)%, respectively. Gross margin for diagnostic services was zero or not applicable due to no revenue in the 2025 and 2024 comparable periods, respectively. Gross margin for consumer products was 67.8% and 36.8% in the 2025 and 2024 comparable periods, respectively. Gross margin for consumer products have historically been influenced by fluctuations in quarter-to-quarter production volume, fixed production costs and related overhead absorption, raw ingredient costs, inventory mark to market write-downs and timing of shipments to customers.
General and administration expenses for the three months ended June 30, 2025 were $4.6 million as compared to $6.9 million for the three months ended June 30, 2024. The decrease in general and administration expenses of $2.3 million for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was principally related to a decrease in personnel expenses, overhead costs and professional fees and removal of costs related to the divestiture of PMI.
Research and development costs for the three months ended June 30, 2025 were $4,000 as compared to $140,000 for the three months ended June 30, 2024. The decrease in research and development costs of $136,000 for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024 was principally due to decreased activities related to product research and field testing as a result of refined focus and efforts.
As a result of the effects described above, net loss from the continuing operations for the three months ended June 30, 2025 was $4.5 million, or $(0.11) per share, as compared $5.5 million, or $(0.29) per share, for the three months ended June 30, 2024. Diluted loss per share related to the continuing operations for the three months ended June 30, 2025 and 2024 were $(0.11) per share and $(0.29) per share, respectively.
Our aggregate cash and cash equivalents as of June 30, 2025 were $169,000 as compared to $678,000 at December 31, 2024. Our working capital deficit was $1.1 million and $1.5 million as of June 30, 2025 and December 31, 2024, respectively. The decrease of approximately $0.5 million in our cash and cash equivalents for the six months ended June 30, 2025 was principally due to $4.2 million cash used in operating activities and repayment of notes payable for $2.5 million, offset by proceeds from issuance of common stock and notes payable of $4.7 million. We also received $800,000 from sale of PMI. Total stockholders’ equity increased to $11.4 million as of March 31, 2025 as compared to $7.4 million at December 31, 2024.
AboutProPhase Labs Inc.
ProPhase Labs Inc. (Nasdaq: PRPH) (“ProPhase”) is a next-generation biotech, genomics and consumer products company. Our mission is to build a healthier world through bold innovation and actionable insight. We’re revolutionizing healthcare with industry-leading Whole Genome Sequencing solutions, groundbreaking diagnostic development – such as our potentially life-saving test for the early detection of esophageal cancer – and a world class direct-to-consumer marketing platform for cutting edge OTC dietary supplements. We develop, manufacture, and commercialize health and wellness solutions to enable people to live their best lives. We are committed to executional excellence, smart diversification, and a synergistic, omni-channel approach. ProPhase Labs’ valuable subsidiaries, their synergies, and significant growth underscore our potential for long-term value. www.ProPhaseLabs.com In August 2025, the United States Patent and Trademark Office granted a key U.S. patent covering the Company’s BE-Smart™ Esophageal Adenocarcinoma Risk Assessment test.
Forward-LookingStatements
Except for the historical information contained herein, this document contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our strategy, plans, objectives and initiatives, including our expectations regarding the future revenue growth potential of each of our subsidiaries, our expected timeline for commercializing our BE-Smart Esophageal Cancer Test, our expectations regarding future liquidity events, the success of our efforts to collect accounts receivables and anticipated timeline for any payments relating thereto, and our ability to successfully transition into a consumer products company. Management believes that these forward-looking statements are reasonable as and when made. However, such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those projected in the forward-looking statements. These risks and uncertainties include but are not limited to our ability to obtain and maintain necessary regulatory approvals, general economic conditions, consumer demand for our products and services, challenges relating to entering into and growing new business lines, the competitive environment, and the risk factors listed from time to time in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and any other SEC filings. The Company undertakes no obligation to update forward-looking statements except as required by applicable securities laws. Readers are cautioned that forward-looking statements are not guarantees of future performance and are cautioned not to place undue reliance on any forward-looking statements.
MediaRelations and Institutional Investor Contact:
ProPhase Labs, Inc.
investorrelations@prophaselabs.com
RetailInvestor Relations Contact:
Renmark Financial Communications
John Boidman: jboidman@renmarkfinancial.com
Tel.: (416) 644-2020 or (212) 812-7680
www.renmarkfinancial.com
ProPhaseLabs, Inc. and Subsidiaries
CondensedConsolidated Balance Sheets
(inthousands, except share and per share amounts)
| December 31, 2024 | |||||
|---|---|---|---|---|---|
| (Unaudited) | |||||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | 169 | $ | 678 | ||
| Accounts receivable, net | 20,086 | 20,058 | |||
| Inventory, net | 830 | 1,143 | |||
| Prepaid expenses and other current assets | 3,484 | 2,615 | |||
| Current assets in discontinued operations | — | 6,143 | |||
| Total current assets | 24,571 | 30,637 | |||
| Property, plant and equipment, net | 3,581 | 7,501 | |||
| Prepaid expenses, net of current portion | 151 | 217 | |||
| Operating lease right-of-use asset, net | 45 | 4,115 | |||
| Intangible assets, net | 8,459 | 9,750 | |||
| Goodwill | 5,231 | 5,231 | |||
| Other assets | 3 | 310 | |||
| Non-current assets in discontinued operations | — | 5,439 | |||
| TOTAL ASSETS | 42,041 | $ | 63,200 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities | |||||
| Accounts payable | 15,032 | $ | 13,717 | ||
| Accrued diagnostic services | 75 | 31 | |||
| Accrued advertising and other allowances | 151 | 151 | |||
| Finance lease liabilities | 2,625 | 2,147 | |||
| Operating lease liabilities | 102 | 1,214 | |||
| Short-term loan payable, net of discount of 304 and 237 | 2,425 | 3,207 | |||
| Deferred revenue | 1,418 | 1,698 | |||
| Income tax payable | 1,374 | 1,987 | |||
| Other current liabilities | 1,765 | 2,115 | |||
| Current liabilities in discontinued operations | — | 5,867 | |||
| Total current liabilities | 25,626 | 32,134 | |||
| Non-current liabilities: | |||||
| Unsecured promissory notes, net of discount of 127 | — | 9,873 | |||
| Unsecured long-term debt, net of discount of 216 and 423 | 436 | 1,779 | |||
| Due to sellers (see Note 3) | 2,000 | 2,000 | |||
| Deferred revenue, net of current portion | 654 | 784 | |||
| Operating lease liabilities, net of current portion | — | 3,762 | |||
| Finance lease liabilities, net of current portion | 1,889 | 2,591 | |||
| Non-current liabilities in discontinued operations | — | 2,924 | |||
| Total non-current liabilities | 4,979 | 23,713 | |||
| Total liabilities | 30,605 | 55,847 | |||
| COMMITMENTS AND CONTINGENCIES | |||||
| Stockholders’ equity | |||||
| Preferred stock authorized 1,000,000, 0.0005 par value, no shares issued and outstanding | — | — | |||
| Common stock authorized 50,000,000, 0.0005 par value, 41,541,205 and 29,874,029 shares outstanding, respectively | 29 | 23 | |||
| Additional paid-in capital | 120,145 | 129,921 | |||
| Subscription receivable | — | — | |||
| Accumulated deficit | (58,899 | ) | (58,393 | ) | |
| Treasury stock, at cost, 8,692,005 and 12,940,967 shares (1), respectively | (49,643 | ) | (64,000 | ) | |
| Accumulated other comprehensive loss | (196 | ) | (198 | ) | |
| Total stockholders’ equity | 11,436 | 7,353 | |||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 42,041 | $ | 63,200 |
All values are in US Dollars.
(1) This is net of 6,000,000 collateral shares.
See accompanying notes to these condensed consolidated financial statements
ProPhaseLabs, Inc. and Subsidiaries
CondensedConsolidated Statements of Operations and Comprehensive Income (Loss)
(inthousands, except per share amounts)
(unaudited)
| For the three months ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | |||||
| Revenues, net | $ | 1,247 | $ | 1,504 | ||
| Cost of revenues | 513 | 1,659 | ||||
| Gross profit (loss) | 734 | (155 | ) | |||
| Operating expenses: | ||||||
| General and administration | 4,624 | 6,933 | ||||
| Research and development | 4 | 140 | ||||
| Total operating expenses | 4,628 | 7,073 | ||||
| Loss from operations | (3,894 | ) | (7,228 | ) | ||
| Debt extinguishment loss | (287 | ) | — | |||
| Interest expense | (587 | ) | (522 | ) | ||
| Loss from disposal of fixed assets | (823 | ) | — | |||
| Loss from operations before income taxes | (3,693 | ) | (7,750 | ) | ||
| Income tax (expense) benefit | (779 | ) | 2,287 | |||
| Loss from continuing operations after income taxes | (4,472 | ) | (5,463 | ) | ||
| Discontinued operations: | ||||||
| Loss from discontinued operations, net of tax | — | (690 | ) | |||
| Gain from disposal of discontinued operations | — | — | ||||
| Income (loss) from discontinued operations | — | (690 | ) | |||
| Net income (loss) | $ | (4,472 | ) | $ | (6,153 | ) |
| Other comprehensive income: | ||||||
| Unrealized gain on marketable securities | 2 | (58 | ) | |||
| Total comprehensive loss | $ | (4,470 | ) | $ | (6,211 | ) |
| Net earnings (loss) per share: | ||||||
| Loss from continuing operations, basic and diluted | $ | (0.11 | ) | $ | (0.29 | ) |
| Income (loss) from discontinued operations, basic and diluted | $ | — | $ | (0.04 | ) | |
| Net loss per share, basic and diluted | $ | (0.11 | ) | $ | (0.33 | ) |
| Weighted average common shares outstanding: | ||||||
| Basic | 41,541 | 18,888 | ||||
| Diluted | 41,541 | 18,888 |
See accompanying notes to these condensed consolidated financial statements
ProPhaseLabs, Inc. and Subsidiaries
CondensedConsolidated Statements of Cash Flows
(inthousands)
(unaudited)
| For the six months ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | |||||
| Cash flows from operating activities | ||||||
| Net loss | $ | (506 | ) | $ | (12,418 | ) |
| Less: Gain (loss) from discontinued operations, net of tax | 8,644 | (1,431 | ) | |||
| Net loss from continuing operations | (9,150 | ) | (10,987 | ) | ||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||
| Realized loss on marketable debt securities | — | 18 | ||||
| Depreciation and amortization | 2,831 | 3,141 | ||||
| Amortization of debt discount | 849 | 369 | ||||
| Amortization on operating lease right-of-use assets | 210 | 222 | ||||
| Stock-based compensation expense | 1,029 | 2,385 | ||||
| Inventory reserve | — | (63 | ) | |||
| Loss (gain) from disposal of fixed assets | 868 | (19 | ) | |||
| Debt extinguishment loss | 718 | — | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (28 | ) | 3,322 | |||
| Inventory | 313 | 394 | ||||
| Prepaid expenses and other current assets | (803 | ) | (777 | ) | ||
| Deferred tax asset | — | (4,900 | ) | |||
| Other assets | — | 847 | ||||
| Accounts payable and accrued expenses | 448 | 3,896 | ||||
| Accrued diagnostic services | 44 | (87 | ) | |||
| Accrued advertising and other allowances | — | (13 | ) | |||
| Deferred revenue | (410 | ) | (768 | ) | ||
| Deferred tax liability | — | — | ||||
| Lease liabilities | (29 | ) | (927 | ) | ||
| Income tax payable | (613 | ) | (618 | ) | ||
| Other liabilities | (350 | ) | (1,181 | ) | ||
| Net cash used in operating activities - continuing operations | (4,225 | ) | (5,746 | ) | ||
| Net cash provided by (used in) operating activities - discontinued operations | 597 | (4,236 | ) | |||
| Net cash used in operating activities | (3,628 | ) | (9,982 | ) | ||
| Cash flows from investing activities | ||||||
| Proceeds from sales of marketable securities | — | 3,374 | ||||
| Proceeds from sales of fixed assets | 120 | 150 | ||||
| Capital expenditures | — | (867 | ) | |||
| Net cash provided by investing activities - continuing operations | 120 | 2,657 | ||||
| Net cash provided by (used in) investing activities - discontinued operations | 800 | (98 | ) | |||
| Net cash provided by investing activities | 920 | 2,559 | ||||
| Cash flows from financing activities | ||||||
| Proceeds from issuance of note payable, net | 687 | 3,868 | ||||
| Proceeds from issuance of common shares, net | 3,558 | 4,624 | ||||
| Repayment of note payable | (2,511 | ) | (888 | ) | ||
| Net cash provided by financing activities - continuing operations | 2,234 | 7,604 | ||||
| Net cash used in financing activities - discontinued operations | (35 | ) | (10 | ) | ||
| Net cash provided by financing activities | 2,199 | 7,594 | ||||
| Decrease in cash and cash equivalents | (509 | ) | 171 | |||
| Cash and cash equivalents at the beginning of the period | 678 | 1,609 | ||||
| Cash and cash equivalents at the end of the period | $ | 169 | **** | $ | 1,780 | **** |
| Supplemental disclosures: | ||||||
| Cash paid for income taxes | $ | 347 | $ | 454 | ||
| Interest payments | $ | 672 | $ | 1,237 | ||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||
| Issuance of common stock as commitment fee for future financing | $ | 158 | $ | — |
See accompanying notes to these condensed consolidated financial statements
Non-GAAPFinancial Measures and Reconciliation
In an effort to provide investors with additional information regarding our results of operations as determined by accounting principles generally accepted in the United States of America (“GAAP”), we disclose certain non-GAAP financial measures. The primary non-GAAP financial measures we disclose are EBITDA and Adjusted EBITDA.
We define “EBITDA” as net income (loss) before net interest expense, income taxes, depreciation and amortization. Adjusted EBITDA further adjusts EBITDA by excluding acquisition costs, other non-cash items, and other unusual or non-recurring charges (as described in the table below).
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from the non-GAAP financial measures.
We use EBITDA and Adjusted EBITDA internally to evaluate and manage the Company’s operations because we believe they provide useful supplemental information regarding the Company’s ongoing economic performance. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our operating results primarily because they exclude amounts that are not considered part of ongoing operating results when planning and forecasting and when assessing the performance of the organization. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and in providing estimates of future performance and that failure to report these non-GAAP measures could result in confusion among analysts and others and create a misplaced perception that our results have underperformed or exceeded expectations.
The following table sets forth the reconciliations of EBITDA and Adjusted EBITDA excluding other costs to the most comparable GAAP financial measures (in thousands):
| For the three months ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2025 | June 30, 2024 | |||||
| GAAP loss from continuing operations ^(1)^ | $ | (4,472 | ) | $ | (5,463 | ) |
| Interest, net | 587 | 522 | ||||
| Income tax benefit | 779 | (2,287 | ) | |||
| Depreciation and amortization | 1,349 | 1,536 | ||||
| EBITDA | (1,757 | ) | (5,692 | ) | ||
| Share-based compensation expense | 508 | 796 | ||||
| Non-cash rent expense ^(2)^ | 442 | 67 | ||||
| Adjusted EBITDA from continuing operations | $ | (807 | ) | $ | (4,829 | ) |
| ^(1)^ | We<br> believe that net loss from continuing operations is the financial measure calculated and<br> presented in accordance with GAAP that is most directly comparable to EBITDA and Adjusted<br> EBITDA. EBITDA and Adjusted EBITDA measure the Company’s operating performance without<br> regard to certain expenses. EBITDA and Adjusted EBITDA are not presentations made in accordance<br> with GAAP and the Company’s computation of EBITDA and Adjusted EBITDA may vary from<br> others in the industry. EBITDA and Adjusted EBITDA have important limitations as analytical<br> tools and should not be considered in isolation or as substitutes for analysis of the Company’s<br> results as reported under GAAP. | |||||
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| ^(2)^ | The<br> non-cash portion of rent, which reflects the extent to which our GAAP rent expense recognized<br> exceeds (or is less than) our cash rent payments. For newer leases, our rent expense recognized<br> typically exceeds our cash rent payments, while for more mature leases, rent expense recognized<br> is typically less than our cash rent payments. |