v3.26.1
Stockholders’ Equity
 3 Months Ended
Mar. 31, 2026
Equity [Abstract]  
Stockholders’ Equity

Note 6 - Stockholders’ Equity

 

Preferred Stock

 

The preferred stock authorized under our certificate of incorporation may be issued from time to time in one or more series. As of March 31, 2026 and December 31, 2025, no shares of preferred stock had been issued.

 

Common Stock Dividends

 

No dividends were declared during the three ended March 31, 2026 and 2025.

 

Common Stock

 

Common ATM Offering

 

On December 19, 2025, the Company entered into an Sales Agreement (the “2025 Sales Agreement”) with WestPark Capital, Inc. (the “WestPark”), pursuant to which the Company may offer and sell, from time to time through WestPark, shares of our common stock having an aggregate offering price of up to $5.3 million, subject to the terms and conditions of the Sales Agreement. WestPark is entitled to a commission equal to 3% of the gross sales price per share for all shares sold through it as our agent, and the Company will receive the net proceeds after deducting this commission and any offering expenses.

 

During the three months ended March 31, 2026, the Company issued 163,900 shares of common stock pursuant to the 2025 Sales Agreement. The Company received cash proceeds of $40,000, which was net of issuance cost of $30,000.

 

2026 Equity Line of Credit – Generating Alpha

 

On January 16, 2026, the Company entered into a Stock Purchase Agreement (“the Agreement”) with Generating Alpha Ltd. (“the Investor”), pursuant to which the Investor committed to provide the Company with up to ten million dollars ($10,000,000) of equity capital over time, at the Company’s election and subject to the terms and conditions set forth in the Agreement.

 

The Agreement establishes an equity line facility that provides the Company with the right, but not the obligation, to sell shares of common stock to the Investor from time to time. The Company retains full discretion over its access to the facility and there is no requirement that the Company access the facility at any time.

 

In connection with entering into the Agreement, the Company issued 549,105 shares of common stock and a prefunded common stock purchase warrant to acquire up to 240,369 shares of common stock as a commitment fee. The warrant has an exercise price of $0.00 per share and is exercisable on a cashless basis, subject to customary ownership limitations.

 

During the three months ended March 31, 2026, the Company did not issue any shares of common stock pursuant to the Agreement.

 

The 2025 Directors’ Equity Compensation Plan

 

On September 9, 2025, the stockholders of the Company approved the 2025 Directors’ Equity Compensation Plan (the “2025 Directors’ Plan”) at the 2025 Special Meeting. The 2025 Directors’ Plan amended and restated the Company’s Amended and Restated 2022 Directors’ Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 50,000 shares.

 

During the three months ended March 31, 2026, no stock options were issued under the 2025 Directors’ Plan.

 

As of March 31, 2026, the number of shares authorized for issuance under the 2025 Directors Plan was 60,000, which included the number of shares available under the 2022 Directors Plan immediately prior the stockholder approval of the 2025 Directors’ Plan as described below.

 

The 2022 Directors’ Equity Compensation Plan

 

On May 19, 2022, the stockholders of the Company approved the 2022 Directors’ Equity Compensation Plan (the “2022 Directors’ Plan”) at the 2022 Annual Meeting of Stockholders of the Company (the “2022 Annual Meeting”). The 2022 Directors’ Plan amended and restated the Company’s Amended and Restated 2010 Directors’ Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 30,000 shares and for the adjustment of the per share exercise price of stock options granted under the 2022 Plan in the event of any change in the outstanding shares of common stock of the Company as a result of, among other things, any distribution or special dividend to stockholders of shares, cash or other property (other than regular cash dividends).

 

 

ProPhase Labs, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

On June 16, 2023 the stockholders of the Company approved the Amended and Restated 2022 Directors’ Equity Compensation Plan (the “Amended 2022 Directors’ Plan”) at the 2023 Annual Meeting of Stockholders of the Company. The Amended 2022 Directors’ Plan provides for an increase in the number of shares reserved for issuance under such plan by 15,000 shares.

 

During the three months ended March 31, 2026, no stock options were issued under the 2025 Directors’ Plan.

 

There were 10,000 shares of common stock available to be issued under the 2022 Directors’ Plan immediately prior the stockholder approval of the 2025 Directors’ Plan.

 

The 2025 Equity Compensation Plan

 

On September 9, 2025, the stockholders of the Company approved the 2025 Equity Compensation Plan (the “2025 Plan”) at the 2025 Special Meeting. The 2025 Plan amended and restated the Company’s Amended and Restated 2022 Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 300,000 shares.

 

During the three months ended March 31, 2026, no stock options issued under the 2025 Plan.

 

As of March 31, 2026, the number of shares authorized for issuance under the 2025 Plan was 233,203, which included the number of shares available under the 2022 Plan immediately prior the stockholder approval of the 2025 Plan as described below.

 

The 2022 Equity Compensation Plan

 

On May 9, 2022, the stockholders of the Company approved the 2022 Equity Compensation Plan (the “2022 Plan”) at the 2022 Annual Meeting. The 2022 Plan amended and restated the Company’s Amended and Restated 2010 Equity Compensation Plan and provided for an increase in the number of shares reserved for issuance under the plan by 1,00,000 shares and for the adjustment of the per share exercise price of stock options granted under the 2022 Plan in the event of any change in the outstanding shares of common stock of the Company as a result of, among other things, any distribution or special dividend to stockholders of shares, cash or other property (other than regular cash dividends).

 

During the three months ended March 31, 2026, no stock options issued under the 2025 Plan.

 

There were 3,375 shares of common stock available to be issued under the 2022 Plan immediately prior the stockholder approval of the 2025 Plan.

 

Summary of all option grants

 

The following table summarizes stock option activity during the three months ended March 31, 2026, (in thousands, except per share data).

 

   Number of Shares   Weighted Average Exercise Price  

Weighted Average Remaining Contractual Life

(in years)

   Total Intrinsic Value 
Outstanding as of January 1, 2026   478   $48.60    4.6   $- 
Granted   -    -           
Forfeited/exprired   -    -           
Outstanding as of March 31, 2026   478   $48.60    4.3   $- 
Options vested and exercisable   340   $53.72    3.9   $- 

 

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the closing stock price of $0.09 for the Company’s common stock on March 31, 2026.

 

 

ProPhase Labs, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

Stock Warrants

 

The following table summarizes warrant activity during the three months ended March 31, 2026 (in thousands, except per share data):

 

  

Number of

Shares

  

Weighted Average
Exercise Price

  

Weighted Average

Remaining Contractual Life

(in years)

 
Outstanding as of January 1, 2026   757   $9.58    4.4 
Granted   240    -    5.3 
Outstanding as of March 31, 2026   997    7.27    4.4 
Warrants vested and exercisable   997   $7.27    4.4 

 

During the three months ended March 31, 2026, the Company granted warrants to purchase 240,369 shares of the Company’s common stock in connection with entering into the 2026 Equity Line of Credit agreement as a commitment fee. The warrant has an exercise price of $0.00 per share and is exercisable on a cashless basis, subject to customary ownership limitations. The fair value of the warrants was $0.16 per share which was equal to the stock price on the issuance date.

 

The Company recognized approximately $438,000 and $372,000 of share-based compensation expense during the three months ended March 31, 2026 and 2025, respectively. The Company will recognize an aggregate of approximately $2.1 million of remaining share-based compensation expense related to outstanding stock options over a weighted average period of 2.5 years.