ProPhase Labs has filed a second amendment to its quarterly report for the period ending March 31, 2026, restating key financial figures after discovering errors in its original filing. The amended report, known as a 10-Q/A, replaces the company's initial report from June 30 and a first amendment from July 7, which had noted the financials were not reviewed by its auditor.
What the Restatement Corrects
The company restated its condensed consolidated financial statements to fix mistakes in its revenue, cost of goods sold, and deferred revenue. These corrections also led to adjustments in prepaid expenses, accounts payable, and deferred costs. The net effect is a change to the company's gross margin and overall loss for the quarter.
The restated figures show a net loss from continuing operations of $5.2 million, or $0.42 per share, for the first quarter. This compares to a loss from continuing operations of $4.7 million in the same period last year, when the company still had income from a discontinued operation.
A Deeper Look at the Financials
The restatement paints a picture of a company under financial strain. Key restated figures as of March 31, 2026, include:
- Cash and cash equivalents: Just $31,000, down from $90,000 at the end of 2025.
- Total current assets: $2.9 million.
- Total current liabilities: $55.7 million, which includes $42.1 million in accounts payable, nearly $27.6 million of which is owed to unconsolidated affiliates.
- Total stockholders' equity (deficit): A deficit of $435,000, a sharp reversal from the $3.5 million in positive equity reported at the end of 2025.
The company's accumulated deficit grew to $78.3 million. Revenue for the quarter was $1.2 million, with a gross profit of just $295,000. Operating expenses of $2.7 million, dominated by general and administrative costs, led to a loss from operations of $2.4 million.
Internal Control Weaknesses
Alongside the restatement, the company updated its assessment of internal controls over financial reporting and its disclosure controls and procedures. While the full details are in the filing, the need for a restatement itself is a strong indicator that the company identified material weaknesses in its ability to accurately report financial results. The filing notes that the original report was not reviewed by its independent auditor, a point first disclosed in the July 7 amendment.
The company's common stock trades on the OTC Markets under the ticker PRPH.