ProPhase Labs, Inc. reported a net revenue of $1.4 million for the first quarter of 2025, a decline from $2.4 million in the same period of 2024. The decrease was primarily attributed to a $1 million drop in consumer product sales, as the company did not generate any revenue from its diagnostic services during both periods. The cost of revenues also decreased to $0.9 million from $2.4 million year-over-year, leading to a gross profit of $0.5 million compared to a gross loss of $0.1 million in the prior year. The overall gross margin improved to 36.8% from a negative 2.5%, driven by better performance in consumer products.
Operating expenses for the quarter were $4.2 million, down from $7.6 million in the previous year, largely due to reduced general and administrative costs, which fell by $3.2 million. Research and development expenses also decreased to $97,000 from $272,000, reflecting a strategic shift in focus. The company reported a net loss from continuing operations of $4.7 million, or $(0.13) per share, an improvement from a loss of $5.5 million, or $(0.32) per share, in the first quarter of 2024.
In terms of strategic developments, ProPhase Labs completed the sale of its Pharmaloz Manufacturing Inc. and Pharmaloz Real Estate Holdings Inc. subsidiaries to JL Projects, Inc. on January 16, 2025. This transaction resulted in approximately $2 million in cash and the extinguishment of about $10 million in debt, contributing to a gain of $8.7 million recognized in the first quarter. The company continues to focus on its genomics and diagnostic testing services, having formed new subsidiaries such as DNA Complete, Inc. for whole genome sequencing.
Operationally, ProPhase Labs has not provided diagnostic testing services since 2024 due to decreased demand and reimbursement rates. The company is actively pursuing new product opportunities and acquisitions to enhance its portfolio. As of March 31, 2025, ProPhase had cash and cash equivalents of $88,000, down from $678,000 at the end of 2024, and a working capital deficit of $1.5 million. The company anticipates that it will have sufficient liquidity to meet its operational needs for at least the next 12 months, although it acknowledges the inherent uncertainties in its business model.
Looking ahead, ProPhase Labs aims to regain compliance with Nasdaq listing requirements, particularly concerning its stock price, which has fallen below the minimum bid price of $1.00. The company has until June 24, 2025, to meet this requirement and is exploring various strategies to enhance its market position and financial performance.
About ProPhase Labs, Inc.
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