FORM 4
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940
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(Print or Type Responses)
1. Name and Address of Reporting Person *
QUIGLEY GUY J
   2. Issuer Name and Ticker or Trading Symbol
ProPhase Labs, Inc. [PRPH] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
_____ Director __X__ 10% Owner
_____ Officer (give title below) _____ Other (specify below)
(Last)
(First)
(Middle)
3720 FOUNTAIN CIRCLE		 3. Date of Earliest Transaction (Month/Day/Year)
09/04/2012
(Street)

FOUNTAINVILLE, PA 18923		 4. If Amendment, Date Original Filed(Month/Day/Year)
 6. Individual or Joint/Group Filing(Check Applicable Line)
_X_ Form filed by One Reporting Person
___ Form filed by More than One Reporting Person
(City)
(State)
(Zip)
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3)		 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8)		 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security
(Instr. 3)		 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code
(Instr. 8)		 5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		 6. Date Exercisable and Expiration Date
(Month/Day/Year)		 7. Title and Amount of Underlying Securities
(Instr. 3 and 4)		 8. Price of Derivative Security
(Instr. 5)		 9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		 10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)		 11. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Option (obligation to sell) (1) $ 1.4 09/04/2012   S     1 09/04/2012   (2) Common Stock, $.0005 par value per share 1,453,427 (3) $ 200,000 1 D  

Reporting Owners

Reporting Owner Name / Address Relationships
 Director  10% Owner  Officer  Other
QUIGLEY GUY J
3720 FOUNTAIN CIRCLE
FOUNTAINVILLE, PA 18923		     X    

Signatures

 /s/ Guy J. Quigley   09/06/2012
**Signature of Reporting Person Date

Explanation of Responses:

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1) On September 4, 2012, the Reporting Person entered into a Stock Option Agreement with Matrixx Initiatives, Inc. ("Matrixx") pursuant to which the Reporting Person sold to Matrixx an option (the "Option") to acquire 1,453,427 shares of Common Stock owned by the Reporting Person, representing approximately 9.8% of the Issuer's outstanding shares of Common Stock (the "Option Shares"), for an exercise price of $1.40 per share or $2,034,797.80 in the aggregate (the "Option Price"), pursuant to the terms and conditions contained therein.
(2) The Option expires on the earliest to occur of (i) Matrixx's failure to deliver written notice to Mr. Quigley of its intent to exercise the Option within thirty (30) calendar days after the date of the Stock Option Agreement, (ii) Matrixx's failure to pay the Option Price and (iii) the date that is three (3) years from the date of the Stock Option Agreement (the "Expiration Date").
(3) The Option may be exercised in whole, but not in part, by Matrixx at any time prior to the Expiration Date.

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