Full Press Release Details
Rafael Holdings Reports First Quarter
Fiscal Year 2021 Results
NEWARK, NJ - December 15, 2020: Rafael Holdings, Inc.,
(NYSE: RFL), reported revenue of $1.1 million and a loss per share of $0.09 for the first quarter of its 2021 fiscal year, the
three months ended October 31, 2020.
Q1 FY 2021 Consolidated Financial Highlights
Revenue of $1.1 million in Q1 FY 2021, generated by Rafael Holdings' real estate portfolio, decreased
from $1.2 million in the year-ago quarter.
Loss per share of $0.09, a decrease from $0.10 in the year ago quarter largely due to a gains on the
sale of the Company's commercial real estate property in Piscataway, New Jersey and other investments which more than offset
the increased research and development expense.
On December 7, 2020, the Company acquired the economic rights related to an additional 33.33% membership
interest in Altira, a company which owns the rights to a receive a royalty on sales of certain Rafael Pharmaceuticals products.
The acquisition added to the 33.33% interest purchased in fiscal 2020 As in the first such agreement, the Company purchased the
potential right to receive a 1% royalty on Net Sales on these products.
On December 7, 2020, Rafael Holdings entered into a Securities Purchase Agreement for the sale of 567,437
shares of the Company's Class B common stock at a price per share of $22.91 (the closing price of Class B common stock on
the prior trading day) for an aggregate purchase price of $13 million. In connection with the purchases, each purchaser was granted
warrants to purchase 20% of the shares of Class B common stock purchased by such purchaser exercisable at $22.91. A majority of
the proceeds received are expected to be used by the Company to exercise an additional portion of the warrant held by the Company's
subsidiary to purchase equity securities of Rafael Pharmaceuticals. The remaining proceeds are expected to be used to fund the
operations of Rafael Holdings' drug development programs including its Barer Institute subsidiary and for general corporate
Rafael Pharmaceuticals
At October 31, 2020, the Company and its subsidiaries collectively
owned securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and approximately 37% on a fully diluted
basis. Recent developments announced by Rafael Pharmaceuticals include:
The U.S. Food and Drug Administration (FDA) has granted Fast Track designation for the Company's
lead compound, CPI-613 (devimistat), for the treatment of both metastatic pancreatic cancer and acute myeloid leukemia (AML).
Rafael Pharmaceuticals announced that it will initiate a Phase 2 clinical trial of CPI-613 (devimistat)
in combination with hydroxychloroquine in patients with clear cell sarcoma of soft tissue. The Company will begin enrolling patients
in partnership with Sara's Cure and Sarcoma Alliance for Research through Collaboration (SARC).
The FDA has granted Orphan Drug Designation for CPI-613 (devimistat) for the treatment of soft
tissue sarcoma. Rafael Pharmaceuticals' clinical trial will focus on the treatment of relapsed or refractory clear cell sarcoma.
Rafael Pharmaceuticals announced that it had crossed the enrollment of 100 patients in its Phase 3
clinical trial (Armada 2000) for patients with relapsed or refractory acute myeloid leukemia (AML). The multi-center, open-label,
randomized pivotal trial is assessing the efficacy and safety of Rafael's lead compound CPI-613 (devimistat) in combination
with high dose cytarabine and mitoxantrone (CHAM) compared to high dose cytarabine and mitoxantrone (HAM) therapy in older patients.
At October 31, 2020, Rafael Holdings held 68% of the issued
and outstanding ordinary shares of LipoMedix, a development-stage Israeli company focused on the development of an innovative,
safe and effective cancer therapy based on liposome delivery.
The Barer Institute has identified and begun to develop new
therapeutic compounds, including compounds to regulate cancer metabolism, through internal development and in-licensing. It is
working to validate newly discovered biomarkers for resistance and sensitivity within its portfolio compounds and to identify
certain novel targetable mechanisms of action.
Remarks by Howard Jonas, Chairman and CEO of Rafael
"Rafael Holdings'continued to pursue the strategic goal
of creating value in the pharmaceutical field including through its investments in Rafael Pharmaceuticals and its wholly owned
Barer Institute. In that regard, I am pleased that, among other milestones achieved, Rafael Pharmaceuticals' lead compound,
CPI-613 (devimistat), received U.S. Food and Drug Administration granted Fast Track designation for the treatment of metastatic
pancreatic cancer and, as Rafael Pharmaceuticals announced earlier today, for acute myeloid leukemia (AML). The Barer Institute
continues to make meaningful progress on its drug development programs."
About Rafael Holdings, Inc.:
Rafael Holdings is focused on development of novel cancer therapies.
The company is a significant investor in two clinical stage oncology companies, Rafael Pharmaceuticals, Inc. and LipoMedix Pharmaceuticals
Ltd. Through its wholly owned Barer Institute subsidiary, the company is developing compounds focused on the regulation of cancer
metabolism. The company also holds commercial real estate assets in New Jersey and Jerusalem. For more information, visit our website
at rafaelholdings.com.
Chief Financial Officer
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and
| October 31, 2020 | July 31, 2020 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 7,231 | $ | 6,206 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts of $256 and $218 at October 31, 2020 and July 31, 2020, respectively | 309 | 267 | ||||||
| Due from Rafael Pharmaceuticals | 240 | 118 | ||||||
| Prepaid expenses and other current assets | 460 | 273 | ||||||
| Assets held for sale | - | 2,968 | ||||||
| Total current assets | 8,240 | 9,832 | ||||||
| Property and equipment, net | 44,141 | 44,433 | ||||||
| Equity investment - RP Finance | 288 | 192 | ||||||
| Due from RP Finance LLC | 1,875 | - | ||||||
| Investments - Rafael Pharmaceuticals | 70,018 | 70,018 | ||||||
| Investments - Other Pharmaceuticals | 477 | 1,201 | ||||||
| Investments - Hedge Funds | 6,454 | 7,510 | ||||||
| Deferred income tax assets, net | - | 6 | ||||||
| In-process research and development and patents | 1,575 | 1,575 | ||||||
| Other assets | 1,550 | 1,580 | ||||||
| TOTAL ASSETS | $ | 134,618 | $ | 136,347 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Trade accounts payable | $ | 1,155 | $ | 921 | ||||
| Accrued expenses | 443 | 1,191 | ||||||
| Amount due for purchase of membership interest | 3,500 | 3,500 | ||||||
| Other current liabilities | 141 | 115 | ||||||
| Due to related parties | 30 | - | ||||||
| Total current liabilities | 5,269 | 5,727 | ||||||
| Other liabilities | 33 | 92 | ||||||
| TOTAL LIABILITIES | 5,302 | 5,819 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY | ||||||||
| Class A common stock, $0.01 par value; 35,000,000 shares authorized, 787,163 shares issued and outstanding as of October 31, 2020 and July 31, 2020, respectively | 8 | 8 | ||||||
| Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,050,609 issued and 15,044,547 outstanding as of October 31, 2020, and 15,034,598 issued and 15,028,536 outstanding as of July 31, 2020 | 149 | 149 | ||||||
| Additional paid-in capital | 129,393 | 129,136 | ||||||
| Accumulated deficit | (17,701 | ) | (16,255 | ) | ||||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,724 | 3,762 | ||||||
| Total equity attributable to Rafael Holdings, Inc. | 115,573 | 116,800 | ||||||
| Noncontrolling interests | 13,743 | 13,728 | ||||||
| TOTAL EQUITY | 129,316 | 130,528 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 134,618 | $ | 136,347 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND
(unaudited, in thousands, except share and
| Three Months Ended October 31, | ||||||||
| 2020 | 2019 | |||||||
| REVENUE | ||||||||
| Rental - Third Party | $ | 236 | $ | 346 | ||||
| Rental - Related Party | 520 | 520 | ||||||
| Parking | 177 | 224 | ||||||
| Other - Related Party | 120 | 120 | ||||||
| Total revenue | 1,053 | 1,210 | ||||||
| COSTS AND EXPENSES | ||||||||
| Selling, general and administrative | 2,592 | 2,041 | ||||||
| Research and development | 515 | 245 | ||||||
| Depreciation and amortization | 437 | 466 | ||||||
| Loss from operations | (2,491 | ) | (1,542 | ) | ||||
| Interest expense, net | - | (64 | ) | |||||
| Net loss resulting from foreign exchange transactions | - | (5 | ) | |||||
| Gain on sale of building | 749 | - | ||||||
| Impairment of investments - Other Pharmaceuticals | (724 | ) | - | |||||
| Unrealized gain (loss) on investments - Hedge Funds | 944 | (37 | ) | |||||
| Loss before income taxes | (1,522 | ) | (1,648 | ) | ||||
| Provision for income taxes | (5 | ) | (4 | ) | ||||
| Equity in earnings of RP Finance | 96 | - | ||||||
| Consolidated net loss | (1,431 | ) | (1,652 | ) | ||||
| Net loss (income) attributable to noncontrolling interests | 15 | (54 | ) | |||||
| Net loss attributable to Rafael Holdings, Inc. | $ | (1,446 | ) | $ | (1,598 | ) | ||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Net loss | $ | (1,431 | ) | $ | (1,652 | ) | ||
| Foreign currency translation adjustment | (38 | ) | 6 | |||||
| Total comprehensive loss | (1,469 | ) | (1,646 | ) | ||||
| Comprehensive loss attributable to noncontrolling interests | (21 | ) | (2 | ) | ||||
| Total comprehensive loss attributable to Rafael Holdings, Inc. | $ | (1,490 | ) | $ | (1,648 | ) | ||
| Loss per share | ||||||||
| Basic and diluted | $ | (0.09 | ) | $ | (0.10 | ) | ||
| Weighted average number of shares used in calculation of loss per share | ||||||||
| Basic and diluted | 15,822,722 | 15,640,683 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
| Three Months Ended October 31, | ||||||||
| 2020 | 2019 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (1,431 | ) | $ | (1,652 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation and amortization | 437 | 466 | ||||||
| Deferred income taxes | 6 | 1 | ||||||
| Net unrealized (gain) loss on investments - Hedge Funds | (944 | ) | 37 | |||||
| Impairment of investments - Other Pharmaceuticals | 724 | - | ||||||
| Equity in earnings of RP Finance | (96 | ) | - | |||||
| Provision for doubtful accounts | 38 | 48 | ||||||
| Stock-based compensation | 214 | 94 | ||||||
| Amortization of debt discount | - | 54 | ||||||
| Gain on sale of building | (749 | ) | - | |||||
| Change in assets and liabilities: | ||||||||
| Trade accounts receivable | (80 | ) | 173 | |||||
| Prepaid expenses and other current assets | (187 | ) | 217 | |||||
| Other assets | 30 | (289 | ) | |||||
| Accounts payable and accrued expenses | (490 | ) | (196 | ) | ||||
| Due from Rafael Pharmaceuticals | (122 | ) | - | |||||
| Other current liabilities | 26 | (12 | ) | |||||
| Due to related parties | 30 | (37 | ) | |||||
| Due from Rafael Pharmaceuticals | - | 160 | ||||||
| Other liabilities | (59 | ) | - | |||||
| Net cash used in operating activities | (2,653 | ) | (936 | ) | ||||
| Investing activities | ||||||||
| Purchases of property and equipment | (145 | ) | (321 | ) | ||||
| Payment to fund RP Finance | (1,875 | ) | - | |||||
| Proceeds from sale of building | 3,658 | - | ||||||
| Proceeds related to distribution of Hedge Funds | 2,000 | - | ||||||
| Net cash provided by (used in) investing activities | 3,638 | (321 | ) | |||||
| Financing activities | ||||||||
| Proceeds from exercise of options | 43 | - | ||||||
| Net cash provided by financing activities | 43 | - | ||||||
| Effect of exchange rate changes on cash and cash equivalents | (3 | ) | 4 | |||||
| Net increase (decrease) in cash and cash equivalents | 1,025 | (1,253 | ) | |||||
| Cash and cash equivalents, beginning of period | 6,206 | 12,024 | ||||||
| Cash and cash equivalents, end of period | $ | 7,231 | $ | 10,771 | ||||
| Supplemental schedule of noncash investing and financing activities | ||||||||
| Conversion of LipoMedix bridge notes | $ | - | $ | 82 | ||||
| Conversions of related party convertible notes payable and accrued interest | $ | - | $ | 15,668 |