Prophase Labs (PRPH) investor relations material

Overview and Strategic Initiatives

• Entered a non-binding LOI for a reverse merger with ABL, a profitable European biotech, with ABL to own approximately 76% of the combined entity and a preliminary valuation of up to $30 million for the legacy business.

• The merger aims to create significant synergies by combining U.S. and European distribution, expertise, and leveraging ABL’s global infrastructure.

• The deal structure includes both equity and debt financing, with current shareholders retaining some debt and benefiting from future Crown Medical collections.

• No breakup fees or penalties are included if the transaction is abandoned; each party bears its own costs.

• Transaction is subject to due diligence, definitive agreements, regulatory approvals, and Nasdaq requirements, with documentation expected within 60 to 90 days.

Value Distribution and Carve-Outs

• Current shareholders may receive a special cash dividend of up to $10 million, funded by capital raised in the merger.

• Crown Medical collections, estimated at $50 million net, will be carved out for current shareholders, with litigation against insurance companies for underpaid COVID testing claims progressing and settlements anticipated soon.

• Combined company to assume only about $5 million of existing indebtedness; other legacy liabilities remain with ProPhase.

Business Verticals and Asset Value

• The BE-Smart esophageal cancer test targets a $7–14 billion market, with full USPTO patent approval, >95% technical success rate, and ongoing commercialization and validation efforts.

• Nebula Genomics, with a 16-petabyte DNA dataset, is break-even to profitable, has a new subscription model, and is positioned as a compelling acquisition candidate.

• DNA Complete and DNA Expand products offer advanced consumer genomics services with strong privacy controls and high margins.

• The supplements business may be developed further depending on available capital.