ProPhase Labs, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Subsequent Event

Subsequent Event	3 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]
Subsequent Event	Note 18 – Subsequent Event Appointment of Chief Financial Officer On May 9, 2022, the Company announced that has appointed Bill White as Chief Financial Officer of the Company, effective May 23, 2022 (the “Effective Date”), replacing Monica Brady, who is currently serving as Chief Financial Officer of the Company. Ms. Brady will remain with the Company and continue to serve as the Company’s Chief Accounting Officer, and Chief Financial Officer of the Company’s wholly-owned subsidiary, ProPhase Diagnostics, as of the Effective Date. As an inducement to his employment as Chief Financial Officer of the Company, the Compensation Committee granted Mr. White a stock option (the “Option Award”) to purchase up to 400,000 shares of the Company’s common stock. This award was made in accordance with the employment inducement award exemption provided by Nasdaq Rule 5635(c)(4) and was therefore not awarded under the Company’s stockholder approved equity plan. The option award will vest over a four year period, with 12.5% vesting every six months following the Effective Date, and contingent upon the commencement of his employment and continued service through each vesting date. The options have an exercise price of $6.74 per share, the closing price of the Company’s common stock on May 9, 2022, and will be exercisable for a period of seven years. Announcement of Cash Dividend On May 9, 2022, the board of directors of the Company declared a special cash dividend of $0.30 per share for stockholders of record as of May 25, 2022, which will approximate $4.6 million. On the same date, the Compensation Committee of the board of directors 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 Plan, as a consequence of the special cash dividend. The board of directors has adjusted the terms of the CEO Option, such that the exercise price of the CEO Option will be reduced from $0.90 per share to $0.60 per share, effective as of June 3, 2022, the date the special cash dividend is to be paid.

Subsequent Event

3 Months Ended

Mar. 31, 2022

Subsequent Events [Abstract]

Subsequent Event

Note 18 – Subsequent Event

Appointment of Chief Financial Officer

On May 9, 2022, the Company announced that has appointed Bill White as Chief Financial Officer of the Company, effective May 23, 2022 (the “Effective Date”), replacing Monica Brady, who is currently serving as Chief Financial Officer of the Company. Ms. Brady will remain with the Company and continue to serve as the Company’s Chief Accounting Officer, and Chief Financial Officer of the Company’s wholly-owned subsidiary, ProPhase Diagnostics, as of the Effective Date.

As an inducement to his employment as Chief Financial Officer of the Company, the Compensation Committee granted Mr. White a stock option (the “Option Award”) to purchase up to 400,000 shares of the Company’s common stock. This award was made in accordance with the employment inducement award exemption provided by Nasdaq Rule 5635(c)(4) and was therefore not awarded under the Company’s stockholder approved equity plan. The option award will vest over a four year period, with 12.5% vesting every six months following the Effective Date, and contingent upon the commencement of his employment and continued service through each vesting date. The options have an exercise price of $6.74 per share, the closing price of the Company’s common stock on May 9, 2022, and will be exercisable for a period of seven years.

Announcement of Cash Dividend

On May 9, 2022, the board of directors of the Company declared a special cash dividend of $0.30 per share for stockholders of record as of May 25, 2022, which will approximate $4.6 million. On the same date, the Compensation Committee of the board of directors 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 Plan, as a consequence of the special cash dividend. The board of directors has adjusted the terms of the CEO Option, such that the exercise price of the CEO Option will be reduced from $0.90 per share to $0.60 per share, effective as of June 3, 2022, the date the special cash dividend is to be paid.