Item 1.01. Entry into a Material Definitive Agreement.
On January 14, 2021, ProPhase Labs, Inc. (the "Company") entered into an
Amendment and Termination Agreement (the "Agreement") with Predictive
Laboratories, Inc. ("Predictive"), pursuant to which the parties amended that
certain Amended and Restated Promissory Note and Security Agreement by and
between the parties, dated September 25, 2020. Pursuant to the terms of the
Agreement, the Company has loaned an additional $1 million to Predictive in
consideration for Predictive's agreement to cancel its existing consulting
agreement with the Company, dated September 25, 2020 (the "Consulting
Agreement"), and terminate the Company's obligation to pay Predictive additional
consulting fees beyond the $250,000 already earned by Predictive under the
Consulting Agreement. As a result, the initial principal amount due under the
Note was increased from $3 million to $3.75 million plus all accrued and unpaid
interest arising under the Note through and including January 14, 2021.
The Note, as amended, provides for certain prepayments on test fees collected by
Predictive to be paid by Predictive to the Company until the Note is repaid in
full. In addition, on each payment date commencing on or after September 1,
2021, in addition to the test fee prepayments, Predictive will also make
payments in an amount equal to the greater of (x) the test fee, or (y) 1/36th of
the then outstanding principal amount of the Note, together with interest
thereon and interest accruing on the Note, in accordance with the terms of the
Note.
The foregoing description of the material terms of the Amendment does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Amendment, a copy of which are filed herewith as Exhibits 10.1 and
is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 Amendment and Termination Agreement, dated and effective as of January 14,
2021
Pursuant 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/ Monica Brady
Monica Brady
Chief Financial Officer
Date: January 15, 2021
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