{"url_path":"/sec/prph/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 Legal Proceedings","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-01","source_url":"https://www.sec.gov/Archives/edgar/data/868278/0000868278-26-000005-index.html","accession_number":"0000868278-26-000005","cik":"0000868278","ticker":"PRPH","issuer_name":"ProPhase Labs, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/868278/0000868278-26-000005-index.html","primary_entity_key":"0000868278","primary_entity_name":"ProPhase Labs, Inc."},"word_count":349,"has_tables":true,"body_markdown":"Item 3.    Legal Proceedings\n\nA qui tam complaint was filed under seal in the United States District Court alleging violations of the federal False Claims Act relating to certain laboratory testing activities of the Company’s diagnostic subsidiaries. Under the False Claims Act, the United States Department of Justice and relevant state authorities are afforded an opportunity to investigate the allegations and determine whether to intervene and take over prosecution of the action.\n\n18\n\n[Table of Contents](#i488b31e4b35d426dbc5f2bf20556ba36_7)\n\nAfter reviewing the allegations and conducting their investigation, the United States Department of Justice and the relevant state authorities declined to intervene in the action. The matter was thereafter unsealed and the case remains pending. The named defendant diagnostic subsidiaries are the same entities that, on September 22, 2025, filed voluntary petitions under Chapter 11 of the Bankruptcy Code (see Note 18).\n\nThe Company believes the allegations are without merit and intends to defend the matter vigorously. The Company is not aware of any ongoing government investigation related to the allegations described above.The Company and the Debtors believe the allegations are without merit and intend to defend the matter vigorously. The Company is not aware of any ongoing government investigation relating to the allegations described above.\n\nThe Company is a party to a pending arbitration proceeding commenced by Turnpoint Capital, LLC (\"Turnpoint\") relating to a senior secured convertible note issued in July 2025. Turnpoint alleges certain events of default under the note and seeks monetary damages and other relief. The Company disputes the allegations, believes it has substantial defenses and affirmative claims relating to the matter, and intends to vigorously defend and prosecute the proceeding. The arbitration is in its early stages, and the Company cannot currently estimate the outcome, timing, or amount of any potential loss or recovery associated with the matter.\n\nSeparately, a private employment-related dispute previously brought by Dr. Kenneth Hennrick against the Company in the Supreme Court of the State of New York, Nassau County, was resolved and dismissed with prejudice in April 2024. The Company believes this private matter is unrelated to the qui tam action described above."}