In a dramatic turn, ProPhase Labs Inc. placed three of its affiliates into Chapter 11 bankruptcy protection Monday in New Jersey, listing combined liabilities topping $13 million. The move comes as the biotech company simultaneously flirts with an unusual escape route—betting on cryptocurrency accumulation instead of traditional financing.
The filings show that ProPhase Diagnostics Inc. and two sister affiliates in New York and New Jersey disclosed liabilities of $2.3 million, $11 million, and $465,000, respectively. The petitions offered little detail on the rationale behind the bankruptcies.
From DNA Sequencing to Digital Coins
According to its website, ProPhase develops genome sequencing tools, diagnostics, and dietary supplement platforms. But instead of leaning on fresh capital raises, the company is eyeing crypto as a long-term play.
“We believe there’s significant underlying value in ProPhase, potentially multiples of our current market cap,” CEO Ted Karkus said in a statement. “That’s why we canceled our equity line of credit—we have no interest in diluted financing. Instead, our crypto treasury strategy should be accretive for shareholders.”
