Full Press Release Details
Rafael Holdings Reports Fourth Quarter
and Full Fiscal Year 2020 Results
NEWARK, NJ - October 29, 2020: Rafael Holdings, Inc.,
(NYSE: RFL), reported revenue of $4.9 million and a loss per share of $0.66 for the fiscal year ended July 31, 2020. Fourth quarter
revenue was $1.2 million with a loss per share of $0.34.
Q4 FY 2020 Consolidated Highlights
Rafael Pharmaceuticals
At July 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
At July 31, 2020, Rafael Holdings held 67% 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. This stake is inclusive of 4 million shares of LipoMedix purchased in
May 2020 for $1 million including conversion of outstanding bridge notes.
The Barer Institute has identified and begun to evaluate 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. In addition, the Barer Institute has identified several potential lead compounds for clinical
development and found combinations that may meaningfully increase the efficacy of certain clinical compounds.
Remarks by Howard Jonas, Chairman and CEO of Rafael
"Rafael Holdings' continued to execute on our strategic
vision in the fourth quarter, selling our Piscataway property and further increasing our majority stake in LipoMedix. In August,
Rafael Pharma announced a major milestone - fully enrolling its pivotal Phase 3 Avenger 500 study for patients with metastatic
pancreatic cancer. Results could be available as early as the second quarter of 2021. The Barer Institute has multiple compounds
under development and collaboration programs in process with some of the premier academic centers in the country."
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 Sheet
(in thousands except for share and per share
| July 31, | ||||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 6,206 | $ | 12,024 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts of $218 and $122 at July 31, 2020 and 2019, respectively | 267 | 450 | ||||||
| Due from Rafael Pharmaceuticals | 118 | 280 | ||||||
| Prepaid expenses and other current assets | 273 | 507 | ||||||
| Assets held for sale | 2,968 | - | ||||||
| Total current assets | 9,832 | 13,261 | ||||||
| Property and equipment, net | 44,433 | 48,733 | ||||||
| Equity investment - RP Finance | 192 | - | ||||||
| Investments - Rafael Pharmaceuticals | 70,018 | 70,018 | ||||||
| Investments - Other Pharmaceuticals | 1,201 | 2,000 | ||||||
| Investments - Hedge Funds | 7,510 | 5,125 | ||||||
| Deferred income tax assets, net | 6 | 19 | ||||||
| In-process research and development and patents | 1,575 | 1,575 | ||||||
| Other assets | 1,580 | 1,412 | ||||||
| TOTAL ASSETS | $ | 136,347 | $ | 142,143 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Trade accounts payable | $ | 921 | $ | 795 | ||||
| Accrued expenses | 1,191 | 605 | ||||||
| Amount due for purchase of membership interest | 3,500 | - | ||||||
| Other current liabilities | 115 | 27 | ||||||
| Total current liabilities | 5,727 | 1,427 | ||||||
| Due to related parties | - | 65 | ||||||
| Convertible debt, net of discount of $0 and $54 - Related Party | - | 14,946 | ||||||
| Other liabilities | 92 | 292 | ||||||
| Accrued interest on convertible debt - Related Party | - | 649 | ||||||
| TOTAL LIABILITIES | 5,819 | 17,379 | ||||||
| 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 July 31, 2020 and July 31, 2019, respectively | 8 | 8 | ||||||
| Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,034,598 issued and 15,028,536 outstanding as of July 31, 2020, and 13,142,502 shares issued and outstanding as of July 31, 2019 | 149 | 131 | ||||||
| Additional paid-in capital | 129,136 | 112,898 | ||||||
| Accumulated deficit | (16,255 | ) | (5,840 | ) | ||||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,762 | 3,784 | ||||||
| Total equity attributable to Rafael Holdings, Inc. | 116,800 | 110,981 | ||||||
| Noncontrolling interests | 13,728 | 13,783 | ||||||
| TOTAL EQUITY | 130,528 | 124,764 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 136,347 | $ | 142,143 |
Rafael Holdings, Inc.
Consolidated Statement of Operations
(in thousands except for share and per share
| Year Ended July 31, | ||||||||
| 2020 | 2019 | |||||||
| REVENUES | ||||||||
| Rental - Third Party | $ | 1,516 | $ | 1,452 | ||||
| Rental - Related Party | 2,082 | 2,125 | ||||||
| Parking | 832 | 874 | ||||||
| Other - Related Party | 480 | 480 | ||||||
| Total Revenue | 4,910 | 4,931 | ||||||
| COSTS AND EXPENSES | ||||||||
| Selling, general and administrative | 9,118 | 8,821 | ||||||
| Research and development | 2,391 | 1,027 | ||||||
| Depreciation | 1,866 | 1,779 | ||||||
| Loss from operations | (8,465 | ) | (6,696 | ) | ||||
| Interest (expense) income, net | (32 | ) | 469 | |||||
| Net (loss) gain resulting from foreign exchange transactions | (5 | ) | 47 | |||||
| Gain on sale of marketable securities | - | 330 | ||||||
| Impairment of investments - Other Pharmaceuticals | (799 | ) | - | |||||
| Unrealized gain on investments - Hedge Funds | 2,385 | 907 | ||||||
| Loss before income taxes | (6,916 | ) | (4,943 | ) | ||||
| (Provision for) benefit from income taxes | (29 | ) | 19 | |||||
| Impairment of equity method investment of Altira | (4,000 | ) | - | |||||
| Equity in earnings of RP Finance | 192 | - | ||||||
| Consolidated net loss | (10,753 | ) | (4,924 | ) | ||||
| Net loss attributable to noncontrolling interests | (338 | ) | (231 | ) | ||||
| Net loss attributable to Rafael Holdings, Inc. | $ | (10,415 | ) | $ | (4,693 | ) | ||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Net Loss | $ | (10,753 | ) | $ | (4,924 | ) | ||
| Foreign Currency Translation Adjustment | (22 | ) | 298 | |||||
| Total Comprehensive Loss | (10,775 | ) | (4,626 | ) | ||||
| Comprehensive (loss) income attributable to noncontrolling interests | (9 | ) | 173 | |||||
| Total Comprehensive loss attributable to Rafael Holdings, Inc. | $ | (10,784 | ) | $ | (4,453 | ) | ||
| Loss per share | ||||||||
| Basic and Diluted | $ | (0.66 | ) | $ | (0.35 | ) | ||
| Weighted average number of shares used in calculation of loss per share | ||||||||
| Basic and Diluted | 15,764,829 | 13,275,239 |
Rafael Holdings, Inc.
Consolidated Statement of Cash Flows
| Year Ended July 31, | ||||||||
| 2020 | 2019 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (10,753 | ) | $ | (4,924 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation | 1,866 | 1,779 | ||||||
| Deferred income taxes | 13 | (19 | ) | |||||
| Interest income on Rafael Pharmaceuticals Series D Convertible Note | - | (848 | ) | |||||
| Interest income | - | (37 | ) | |||||
| Net gain on sale of marketable securities | - | (330 | ) | |||||
| Net unrealized gain on investments - Hedge Funds | (2,385 | ) | (907 | ) | ||||
| Impairment of investments - Other Pharmaceuticals | 799 | - | ||||||
| Impairment of equity method investment of Altira | 4,000 | - | ||||||
| Equity in earnings of RP Finance | (192 | ) | - | |||||
| Provision for doubtful accounts | 96 | 122 | ||||||
| Noncash compensation | 684 | 372 | ||||||
| Amortization of debt discount | 54 | 17 | ||||||
| Write-off of patents | - | 76 | ||||||
| Change in assets and liabilities: | ||||||||
| Trade accounts receivable | 87 | (285 | ) | |||||
| Prepaid expenses and other current assets | 234 | (86 | ) | |||||
| Other assets | (168 | ) | 275 | |||||
| Accounts payable and accrued expenses | 713 | 533 | ||||||
| Other current liabilities | 88 | 3 | ||||||
| Due to related parties | (65 | ) | 654 | |||||
| Due from related parties | 162 | (280 | ) | |||||
| Accrued interest - Related Party | 19 | 649 | ||||||
| Other liabilities | 82 | 104 | ||||||
| Net cash used in operating activities | (4,666 | ) | (3,132 | ) | ||||
| Investing activities | ||||||||
| Purchase of investment in Altira | (500 | ) | - | |||||
| Purchases of property and equipment | (534 | ) | (399 | ) | ||||
| Proceeds from sale and maturity of marketable securities | - | 25,031 | ||||||
| Investment in Rafael Pharmaceuticals | - | (55,870 | ) | |||||
| Net cash used in investing activities | (1,034 | ) | (31,238 | ) | ||||
| Financing activities | ||||||||
| Contribution from noncontrolling interest of consolidated entity | - | 4,587 | ||||||
| Repayment of loan from Rafael Pharmaceuticals, including interest | - | 3,335 | ||||||
| Proceeds from exercise of options | 29 | 190 | ||||||
| Proceed from sale of shares | - | 7,777 | ||||||
| Proceeds from issuance of convertible note | - | 15,000 | ||||||
| Payments for taxes related to shares withheld for employee taxes | (125 | ) | - | |||||
| Net cash (used in) provided by financing activities | (96 | ) | 30,889 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (22 | ) | (298 | ) | ||||
| Net decrease in cash and cash equivalents | (5,818 | ) | (3,779 | ) | ||||
| Cash and cash equivalents, beginning of year | 12,024 | 15,803 | ||||||
| Cash and cash equivalents, end of year | $ | 6,206 | $ | 12,024 | ||||
| Supplemental Schedule of Noncash Investing and Financing Activities | ||||||||
| Adoption effect of ASU 2016-01 | $ | - | $ | 39 | ||||
| Beneficial conversion feature of convertible debt - Related Party | $ | - | $ | 71 | ||||
| Debt and accrued interest converted to Series D Preferred Stock | $ | - | $ | 10,848 | ||||
| Related Party deposit utilized to purchase Class B Common Stock | $ | - | $ | 864 | ||||
| Amount due for purchase of membership interest | $ | 3,500 | $ | - | ||||
| Transfer of asset held for sale | $ | 2,968 | $ | - | ||||
| Conversion of LipoMedix Bridge Notes | $ | 283 | $ | - | ||||
| Conversions of related party convertible notes payable and accrued interest | $ | 15,668 | $ | - |