SKILLMAN, N.J., Oct. 9, 2012 /PRNewswire/ -- Matrixx Initiatives, Inc., the maker of the Zicam® cold, sinus and allergy line of products, today announced that it has filed a presentation with the Securities and Exchange Commission ("SEC") in connection with its revised offer to acquire ProPhase Labs, Inc. (NASDAQ: PRPH). Separately today, Matrixx announced it has increased its offer to acquire all of the outstanding shares of ProPhase by 14.3% to $1.60 per share, and has sent a letter to the ProPhase Board of Directors.
Matrixx believes that its revised all-cash offer, which is not contingent on financing, is highly attractive to ProPhase shareholders, as it provides them with compelling upfront and certain value relative to a difficult, uncertain and highly speculative multi-year turnaround program recently outlined by ProPhase's management. Matrixx's presentation outlines the significant challenges ProPhase faces by remaining a standalone entity, including:
- ProPhase is in a Vulnerable Market Position
- ProPhase lacks scale to effectively compete in the highly competitive Cough Shortening / Immune Boosting market.
- ProPhase's most comparable competitors generate 3.5x more in annual revenue and are backed by owners with substantial resources.
- ProPhase has an Unsustainable Financial Model
- ProPhase continues to experience substantial losses due to its financial model.
- Greater than 80% of ProPhase's net sales are spent on operating expenses.
- Cumulative losses from operations since 2009 amount to $12.9 million. ProPhase's stock price has declined 73.6% since June 2009, when current management assumed it role.
- ProPhase has Placed Shareholders in a Tenuous Position
- ProPhase has received a Non-Compliance notice from NASDAQ for failing to meet the minimum shareholders' equity requirement for continued listing on the Global Market.
- ProPhase received a notice of de-listing as recently as July 2011.
- The lack of analyst coverage limits any ongoing interest from the investor community.
The presentation is being filed with the SEC and will be available at www.sec.gov.
Kirkland & Ellis LLP is acting as legal counsel and Sawaya Segalas & Co., LLC is acting as financial advisor to Matrixx.This press release and Matrixx's proposal constitute a preliminary non-binding indication of interest to acquire all of the outstanding shares of ProPhase Labs, Inc., and are not intended to create any legally binding obligations.