ProPhase Establishes 2.5 Million Share
DOYLESTOWN, PA--(Marketwire – November
27, 2012) - ProPhase Labs, Inc. (NASDAQ: PRPH) (www.ProPhaseLabs.com) announced today that
on November 26, 2012, it entered into an Investment Agreement (the “Investment Agreement”) with Dutchess Opportunity
Fund, II, LP, a Delaware limited partnership (“Dutchess”). Pursuant to the Investment Agreement, Dutchess committed
to purchase, subject to certain restrictions and conditions, up to 2,500,000 shares of the Company’s common stock, over a
period of 36 months from the first trading day following the effectiveness of the registration statement registering the resale
of shares purchased by Dutchess pursuant to the Investment Agreement.
The Company may in its discretion draw
on the facility from time to time, as and when the Company determines appropriate in accordance with the terms and conditions of
the Investment Agreement. The maximum number of shares that the Company is entitled to put to Dutchess in any one draw down notice
is the greater of: (i) 500% of the average daily volume of the Company’s common stock traded on the NASDAQ Global Market
for the one (1) trading day prior to the date of delivery of the applicable draw down notice, multiplied by the closing price for
such trading day, or (ii) $250,000. Additional details are available in the Company’s SEC filing on Form 8-K.
Ted Karkus, Chairman and Chief Executive
Officer of the Company, stated: “The availability of this equity line enables the Company to raise capital as needed in a
highly efficient manner and without incurring any debt. As previously reported, the Company’s balance sheet reflects Shareholder’s
Equity at a level slightly below the level required to maintain our current NASDAQ listing. The combination of ongoing litigation
expenses, new product development, enhanced marketing and brand building activities, and other corporate projects makes clear that
setting up this equity line is prudent. There are no options, warrants or convertible debt associated with the equity line. We
will seek to use the equity line, to the extent needed, at such times as are appropriate in view of market and other conditions.”
About ProPhase Labs
ProPhase Labs is a diversified natural
health medical science company. It is a leading marketer of the Cold-EEZE® Cold Remedy brand as well as other cold
relief products. Cold-EEZE® zinc gluconate lozenges are clinically proven to significantly reduce the severity and
duration of the common cold. Cold-EEZE® customers include leading national retailers, chain food, drug and mass
merchandise stores, wholesalers and distributors, as well as independent pharmacies. ProPhase Labs has several wholly owned subsidiaries
including a manufacturing unit, which consists of an FDA registered facility to manufacture Cold-EEZE® lozenges
and fulfill other contract manufacturing opportunities. ProPhase also owns 50% of Phusion Laboratories, LLC ("Phusion").
Phusion licenses a revolutionary proprietary technology that has the potential to improve the delivery and/or efficacy of many
active ingredients or compounds. Phusion will formulate and test products to exploit market opportunities within ProPhase's robust
over-the-counter distribution channels. For more information visit us at www.ProPhaseLabs.com.
Forward Looking Information
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. These statements involve a number of risks and uncertainties, including the difficulty of the acceptance and demand for our
products, the impact of competitive products and pricing, the timely development and launch of new products, and the risk factors
listed from time to time in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any subsequent SEC filings.
Press Only Contact
5W Public Relations
Tel: (212) 584-4295
Chairman and CEO
ProPhase Labs, Inc.
(215) 345-0919 x 0