PROPHASE LABS, INC. (NASDAQ:PRPH) Files An 8-K Entry into a Material Definitive Agreement

PROPHASE LABS, INC. (NASDAQ:PRPH) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement.

The information disclosed in Item 2.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 1.01.

Item 1.02. Termination of a Material Definitive
Agreement.

On March 29, 2017, in connection with the Asset Sale described in
Item 2.01 below, ProPhase Labs, Inc., a Delaware corporation (the
Company), paid in full the remaining principal and accrued
interest, in the total amount of $1,552,676.14, due under the
Companys 12% Secured Promissory Notes Series A (the Notes) issued
in favor of John E. Ligums, Jr. and Justin J. Leonard (the
Noteholders), each dated as of December 11, 2015. Of the
$1,552,667.14 paid to the Noteholders, $68,850.00 was netted
against the aggregate exercise price of warrants simultaneously
being exercised by the Noteholders.

The Notes bore interest at a rate of 12% per annum, payable
semi-annually, and were scheduled to mature on June 15, 2017. The
Notes could be pre-paid at any time prior to maturity without
penalty.

In connection with the issuance of the Notes, the Company entered
into a security agreement with John E. Ligums, Jr., as collateral
agent for the Noteholders (the Security Agreement) to secure the
timely payment and performance in full of the Companys
obligations under the Notes. Under the Security Agreement, the
Company granted to the collateral agent, for the benefit of the
Noteholders a lien upon and security interest in the property and
assets listed as collateral in the Security Agreement, including
without limitation, all of the Companys personal property,
inventory, equipment, general intangibles, cash and cash
equivalents, and proceeds. In connection with the payoff of the
Notes, the Security Agreement was terminated.

Item 2.01. Completion of Acquisition or Disposition of
Assets.

As previously disclosed on a Current Report on Form 8-K filed on
January 9, 2017, the Company entered into an Asset Purchase
Agreement (the Asset Purchase Agreement) with a wholly-owned
subsidiary of Mylan N.V. (Mylan), on January 6, 2017, to which
the Company agreed to sell substantially all of the assets of the
Company, which are comprised of the intellectual property and
other assets related to the Companys Cold-EEZE brand and product
line, to Mylan for $50,000,000 (the Asset Sale). As described in
Item 5.07 of this Current Report, the Companys stockholders
approved the Asset Sale on March 29, 2017 at the special meeting
of stockholders. Following its receipt of the requisite
stockholder approval on March 29, 2017, the Company completed the
Asset Sale.

The foregoing description of the Asset Purchase Agreement does
not purport to be complete and is qualified in its entirety by
reference to the full text of the agreement filed as Exhibit 2.1
to this Current Report on Form 8-K. The Asset Purchase Agreement
contains representations and warranties made by the parties as of
specific dates and solely for their benefit. The representations
and warranties reflect negotiations between the parties and are
not intended as statements of fact to be relied upon by the
Companys stockholders or any other person or entity other than
the parties to the Asset Purchase Agreement and, in certain
cases, represent allocation decisions among the parties and are
modified or qualified by correspondence or confidential
disclosures made between the parties in connection with the
negotiation of the Asset Purchase Agreement (which disclosures
are not reflected in the Asset Purchase Agreement itself, may not
be true as of any date other than the date made, or may apply
standards of materiality in a way that is different from what may
be viewed as material by stockholders). Accordingly, the
representations and warranties may not describe the actual state
of affairs at the date they were made or at any other time, and
stockholders should not rely on them as statements of fact.
Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the
Asset Purchase Agreement.

In connection with the closing of the transactions contemplated
by the Asset Purchase Agreement, the Company and its wholly-owned
subsidiary, Pharmaloz Manufacturing, Inc. (PMI), entered into a
Manufacturing Agreement (the Manufacturing Agreement) with Mylan.
to the terms of the Manufacturing Agreement, Mylan (or an
affiliate or designee) will purchase the current inventory of the
Companys Cold-EEZE brand and product line and PMI will
manufacture certain products for Mylan, as described in the
Manufacturing Agreement. Unless terminated sooner by the parties,
the Manufacturing Agreement will remain in effect until March 29,
2022. Thereafter, the Manufacturing Agreement may be renewed by
Mylan for up to five successive one year periods by providing
notice of its intent to renew not less than 90 days prior to the
expiration of the then-current term.

The foregoing description of the Manufacturing Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the agreement filed as Exhibit 2.2
to this Current Report on Form 8-K and is incorporated by
reference herein.

On March 29, 2017, the Company issued a press release announcing
the completion of the Asset Sale. The press release is filed as
Exhibit 99.1 to this Current Report and is incorporated herein by
reference.

Item 5.07. Submission of Matters to a Vote of Security
Holders.

A special meeting of the stockholders of the Company was held on
March 29, 2017 (the Special Meeting). As of the record date, the
Company had 17,080,776 shares of common stock, par value $0.0005
per share, outstanding and entitled to vote at the Special
Meeting. The following is a description of the votes cast for and
against, as well as abstentions and broker non-votes, with
respect to each matter voted upon at the Special Meeting. At the
Special Meeting, the Companys stockholders (i) approved the Asset
Sale and the transactions contemplated by the Asset Purchase
Agreement (Proposal No. 1), and (ii) granted the persons named as
proxies discretionary authority to vote to adjourn the special
meeting, if necessary, to solicit additional proxies to vote in
favor of Proposal No. 1 (Proposal No. 2).

Proposal No. 1 To consider and act upon a
proposal to sell substantially all of the assets of the Company,
which are comprised of the intellectual property and other assets
relating to its Cold-EEZE brand and product line, to Mylan, for
cash, to the Asset Purchase Agreement, and the other transactions
contemplated thereby.

For		Against		Abstentions		Broker Non-Votes
11,375,970		167,390		700		N/A

Proposal No. 2 To consider and act upon a
proposal to grant the persons named as proxies discretionary
authority to vote to adjourn the special meeting, if necessary,
to solicit additional proxies to vote in favor of Proposal No. 1.

For		Against		Abstentions		Broker Non-Votes
11,335,744		206,515		1,801		N/A

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

No.		Description
2.1		Asset Purchase Agreement, dated January 6, 2017, by and between ProPhase Labs, Inc., Meda Consumer Healthcare Inc. and Mylan Inc., as Buyer Guarantor.
2.2		Manufacturing Agreement, dated March 29, 2017, by and between Meda Consumer Healthcare Inc., Pharmaloz Manufacturing, Inc. and Prophase Labs, Inc.
99.1		Press Release, dated March 29, 2017, entitled ProPhase Labs, Inc. Completes Sale Of Cold-EEZE Business To Mylan.

	Confidential treatment granted as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
	Certain schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request.

to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

	ProPhase Labs, Inc.
	By:	/s/ Robert V. Cuddihy, Jr.
		Robert V. Cuddihy, Jr.
		Chief Operating Officer and
		Chief Financial Officer

Date: March 29, 2017

Exhibits Index

No.		Description
2.1		Asset Purchase Agreement, dated January 6, 2017, by and between ProPhase Labs, Inc., Meda Consumer Healthcare Inc. and Mylan Inc., as Buyer Guarantor.
2.2		Manufacturing Agreement, dated March 29, 2017, by and between Meda Consumer Healthcare Inc., Pharmaloz Manufacturing, Inc. and Prophase Labs, Inc.
99.1		Press Release, dated March 29, 2017, entitled ProPhase Labs, Inc. Completes Sale Of Cold-EEZE Business To Mylan.

	Confidential treatment granted as to portions of the exhibit. Confidential materials omitted and filed separately with the Securities and Exchange Commission.
	Certain schedules and exhibits have been omitted

About PROPHASE LABS, INC. (NASDAQ:PRPH)
ProPhase Labs, Inc. is a manufacturer, marketer and distributor of a range of homeopathic and health products. The Company is also engaged in the research and development of over-the-counter (OTC) drugs, natural base health products along with supplements, personal care and cosmeceutical products. It is engaged in manufacturing, distributing, marketing and sale of OTC cold remedy products to consumers through national chain, regional, specialty and local retail stores. It also manufactures, markets and distributes an organic cough drop and a Vitamin C supplement, Organix, and performs contract manufacturing services of cough drop, dietary supplements, and other OTC cold remedy products for third parties. Its product pipeline includes Cold-EEZE Cold Remedy QuickMelts and Cold-EEZE Cold Remedy Oral Spray. It also produces Legendz XL for sexual health, Triple Edge XL, which is a daily energy booster plus testosterone support, and Super ProstaFlow Plus for prostate and urinary health. PROPHASE LABS, INC. (NASDAQ:PRPH) Recent Trading Information
PROPHASE LABS, INC. (NASDAQ:PRPH) closed its last trading session up +0.02 at 2.05 with 1,208 shares trading hands.