ProPhase Labs, Inc. (NASDAQ:PRPH), a pharmaceutical company with a market capitalization of $15.11 million, disclosed on Thursday that it has received a notification from Nasdaq regarding non-compliance with the exchange’s minimum bid price rule.
The company’s stock, currently trading at $0.64, has been below the required $1.00 threshold for the past 30 consecutive business days. According to InvestingPro data, the stock has declined by 86% over the past year and is trading near its 52-week low of $0.61.
The Nasdaq Listing Rule 5550(a)(2) mandates that listed securities maintain a minimum bid price of $1.00 per share, and the company’s failure to meet this standard has triggered a notice from the Listing Qualifications Staff of Nasdaq. ProPhase Labs has been afforded a 180-day grace period, ending on June 24, 2025, to regain compliance with the minimum bid price requirement.
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To achieve compliance, the company must maintain a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days within this 180-day period. If ProPhase Labs fulfills this condition, it will satisfy the continued listing criteria.
However, if the company is unable to meet the requirement by the end of the grace period, it may be considered for an additional extension provided it meets all other initial listing standards, except for the minimum bid price. The company’s overall financial health score from InvestingPro is currently rated as WEAK, with negative EBITDA and concerning profitability metrics.
As of now, ProPhase Labs meets the necessary criteria for an extension, given its stockholders’ equity exceeds $5 million. Nonetheless, there is no certainty that the company will achieve compliance within the given timeframe or that Nasdaq will grant an additional grace period if needed.
The company is actively seeking ways to meet the minimum bid price requirement to maintain its listing on the Nasdaq exchange. Failure to do so may lead to delisting of its common stock from the market. This news is based on a recent statement from the company’s SEC filing.
In other recent news, Prophase Labs has revealed key growth strategies in their Q3 2024 earnings call. The company announced plans to launch DNA Complete and DNA Expand, scale up operations at PMI, and implement cost reduction plans. CEO Ted Karkus also emphasized the potential of their esophageal cancer test and the growth prospects of their manufacturing facility and supplement businesses, Equivir and Legends XL.
Prophase Labs aims to reduce overhead costs by $6 million, potentially leading to an $11 million positive cash flow swing. The company also reported significant accounts receivable of $70 million related to COVID testing. Karkus projected revenue of $15 million from the first manufacturing line, with potential growth to $40 million through additional partnerships.
The company is preparing for an upcoming capital raise to support these initiatives. The esophageal cancer test could be commercialized by late 2025 or early 2026, targeting a market worth $7 to $14 billion.
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