ProPhase Labs Says Aware That Civil Action Pending In The U.S. District Court For The Eastern District Of New York Has Been Unsealed; Denies Wrongdoing, Maintains That Its Laboratory And Diagnostic Operations Follow Compliance Standards; Expects No Impact On Operations From Unsealed Matter; Co To Vigorously Defend Matter Once Formally Served

On November 21, 2025, ProPhase Labs, Inc. (the "Company") became aware that a previously sealed civil action styled United States of America, State of New York, and State of New Jersey ex rel. Kenneth Hennrick v. ProPhase Labs, Inc., et al., pending in the United States District Court for the Eastern District of New York, had been unsealed by court order dated November 4, 2025. The unsealing of a previously sealed filing is a standard procedural step under the False Claims Act and does not reflect any finding or conclusion by the court or by any governmental authority. Although the matter was unsealed on November 4, the Company did not receive notice of the unsealing or the filing until November 19, 2025, and had no prior knowledge of the sealed action, which was filed in 2023 without the Company's awareness. The Company is making this disclosure promptly upon becoming aware of the unsealed filing.

Under the sealing provisions of 31 U.S.C. Section 3730(b), the parties to a sealed qui tam action are prohibited from providing notice of the filing while the matter remains under seal. Because the Company had not been served and no notice was provided following the entry of the November 4 unsealing order, the Company first learned of the action upon receipt of the unsealed filing on November 21, 2025.

According to the unsealing order, to date the United States and the Plaintiff States have declined to intervene. The Company has received no indication from any governmental authority that intervention is anticipated. The Company also has not been served with the unsealed complaint as of the date of this filing and therefore has not had the opportunity to review or assess the filing in full. The Company has received no indication from the relator or from any governmental entity regarding if or when service may occur. The Company has not received any inquiries or requests for information from the United States, the Plaintiff States, or any regulatory agency in connection with the unsealed filing.

The Company categorically denies any wrongdoing and maintains that its laboratory and diagnostic operations follow rigorous regulatory, quality, and compliance standards. The Company remains committed to maintaining the highest standards of regulatory compliance and transparency across all of its operations. The Company intends to vigorously defend the matter once formally served. As with any qui tam action, any dismissal or resolution of the case would require written consent from the United States and the Plaintiff States.

The Company further notes that all private disputes with Dr. Hennrick were fully resolved and dismissed with prejudice in April 2024 through a mutually executed settlement agreement and general release in the New York State Supreme Court, Nassau County (Index No. 612578/2023). That private matter was concluded more than a year before the federal seal was lifted and is entirely separate from the qui tam action.

Based on the information currently available, the Company does not expect the unsealed matter to have any material impact on its ongoing operations or its ability to continue providing services without interruption. The Company will continue to monitor developments and will make additional disclosures as required under applicable securities laws. The Company's operations continue without interruption.