PROPHASE LABS, INC. (NASDAQ:PRPH) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On December 24, 2018, ProPhase Labs, Inc. (the “Company”) notified Nasdaq that as a result of Mark Burnett’s resignation from the Company’s Board of Directors (the “Board”) and all committees of the Board including the Audit Committee, effective December 21, 2018, as described in Item 5.02 of this Current Report on Form 8-K, the Company was no longer in compliance with Nasdaq Listing Rule 5605(c)(2)(A), which requires the Company’s Audit Committee to be composed of at least three independent directors. The resignation of Mr. Burnett has left the Audit Committee with only two independent directors.
to Nasdaq Listing Rule 5605(c)(4)(B), the Company is entitled to a cure period to regain compliance with Listing Rule 5605(c)(2)(A), which cure period will expire upon (1) the earlier of the Company’s next annual stockholders’ meeting or December 21, 2019; or (2) if the next annual stockholders meeting is held on or before June 19, 2019, then the Company must evidence compliance no later than June 19, 2019.
On December 26, 2018, Nasdaq issued a letter to the Company confirming the Company’s noncompliance with the audit committee requirements of Nasdaq Listing Rule 5605(c)(2)(A) as a result of Mr. Burnett’s resignation and the cure period by which the Company must regain compliance under Nasdaq Listing Rule 5605(c)(4)(B).
The Board intends to conduct a director search process and expects to be compliant with the Audit Committee composition requirements of Nasdaq Listing Rule 5605(c)(2)(A) by or before the end of the cure period.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Mark Burnett from the Board of Directors
As described in Item 3.01 of this Current Report on Form 8-K, on December 21, 2018, Mark Burnett informed the Company of his decision to resign from the Board and all committees of the Board effective immediately. Mr. Burnett did not resign due to any disagreement with the Company or its management.
Adjustment to Stock Option Granted to Ted Karkus on February 23, 2018 in Connection with Special Cash Dividend
As described below in Item 8.01 of this Current Report on Form 8-K, on December 24, 2018, the Board declared a special cash dividend of $0.25 per share on the Company’s common stock, payable on January 24, 2019 to holders of record of the Company’s common stock on January 10, 2019. On the same date, the Compensation Committee of the Board approved an adjustment to the stock option granted to Mr. Karkus on February 23, 2018 (the “CEO Option”) as required under the Company’s 2018 Stock Incentive Plan (the “2018 Plan”) as a consequence of the special cash dividend.
The 2018 Plan provides for certain proportionate adjustments to be made to stock options granted under the 2018 Plan upon the occurrence of certain events, including a special distribution (whether in the form of cash, shares, other securities, or other property). Accordingly, the Compensation Committee has adjusted the terms of the CEO Option, such that the exercise price of the CEO Option will be reduced from $2.00 per share to $1.75 per share, effective as of January 24, 2019, the date the special cash dividend is to be paid and subject to such dividend payment being made.
Item 8.01 Other Events.
On December 24, 2018, the Board declared a special cash dividend of $0.25 per share on the Company’s common stock, payable on January 24, 2019 to holders of record of the Company’s common stock on January 10, 2019.
On December 26, 2018, the Company issued a press release announcing the special cash dividend. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| No. | Description |
| 99.1 | Press Release dated December 26, 2018 |
ProPhase Labs, Inc. Exhibit
EX-99.1 2 ex99-1.htm Exhibit 99.1 PROPHASE LABS,…
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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.
