Full Press Release Details
Rafael Holdings Reports Fourth Quarter and Full
Year Fiscal 2024 Financial Results
Our proposed merger with Cyclo Therapeutics
advances our strategy to invest in, develop and commercialize clinical stage assets which address areas of high unmet medical need
NEWARK, NJ - November 6, 2024 (GLOBE
NEWSWIRE) - Rafael Holdings, Inc. (NYSE: RFL), today reported its financial results for the fourth quarter and the full fiscal year
ended July 31, 2024.
"During fiscal 2024, we made significant
progress on our strategy to advance our existing portfolio and to invest in, develop and commercialize clinical stage assets in areas
of high unmet medical need. Specifically, we are extremely pleased to have entered into a merger agreement with Cyclo Therapeutics (Nasdaq:
CYTH), said Bill Conkling, CEO of Rafael Holdings. Bill added, "We are encouraged that Cyclo
Therapeutics has fully enrolled its pivotal Phase 3 study evaluating Trappsol Cyclo for
the treatment of Niemann-Pick Disease Type C1, a rare and fatal genetic disease, and results from the 48-week interim analysis are expected
in the middle of 2025. Despite recent FDA approvals, we believe that Trappsol Cyclo
has the potential to be a market leader. We anticipate a shareholder vote and closing the merger with Cyclo Therapeutics in the coming
Rafael Holdings, Inc. Fourth Quarter Fiscal Year 2024 Financial
As of July 31, 2024, we had cash, cash equivalents
and marketable securities of $65.9 million.
For the three months ended July 31, 2024, we recorded
a net loss from continuing operations attributable to Rafael Holdings of $4.5 million, or $0.19 per diluted share, versus a net gain from
continuing operations of $1.3 million, or $0.06 per diluted share, in the year ago period.
Research and development expenses were $1.5 million
for the three months ended July 31, 2024, compared to $1.3 million in the year ago period. The year over year increase relates to activity
at Cornerstone and Day Three Labs, which were consolidated with Rafael Holdings during fiscal 2024.
For the three months ended July 31, 2024, general
and administrative expenses were $2.3 million. For the same period in the prior year, general and administrative expenses were $1.4 million.
The increase was primarily due to additional expenses from Cornerstone and Day Three Labs, which were consolidated with Rafael Holdings
during fiscal 2024, as well as increased professional fees related to the Cornerstone and Day Three Labs acquisitions.
Rafael Holdings, Inc. Full Fiscal Year 2024 Financial Results
For the twelve months ended July 31, 2024, we
recorded a net loss from continuing operations attributable to Rafael Holdings of $34.4 million, or $1.45 per diluted share, versus a
net loss from continuing operations of $8.4 million, or $0.36 per diluted share, in the year ago period. The net loss recorded during
fiscal year 2024 was driven by an in-process research and development expense of $89.9 million related to the Cornerstone acquisition,
a loss of $1.6 million on our initial investment in Day Three Labs, offset by a recovery of receivables from Cornerstone of $31.3 million
and realized and unrealized gains on our investment in Cyclo Therapeutics. During the second quarter of 2024, we increased our investment
in Day Three Labs and now hold a majority interest in the company with 84% of the shares outstanding. We began reporting consolidated
financial results for Day Three Labs in January 2024 and Cornerstone Pharmaceuticals in March 2024.
Research and development expenses were $4.2 million
for the fiscal year ended July 31, 2024, compared to $6.3 million in the year ago period. The year over year reduction is due to the winding
down of early-stage programs, including at Barer Institute.
For the fiscal year ended July 31, 2024, general
and administrative expenses were $8.9 million versus $8.9 million in the same period in the prior year. The decrease in general and administrative
expenses at Rafael Holdings was offset by additional G&A expenses from Cornerstone and Day Three Labs as well as increased professional
fees related to the two acquisitions in Fiscal 2024.
About Rafael Holdings, Inc.
Rafael Holdings, Inc. is a holding company with
interests in clinical and early-stage pharmaceutical companies including an investment in (and planned merger with) Cyclo Therapeutics
Inc. (Nasdaq: CYTH), a biotechnology company dedicated to developing Trappsol Cyclo , which is being evaluated in clinical
trials, including an ongoing Phase 3 trial for the potential treatment of Niemann-Pick Disease Type C1 ("NPC1"), a rare,
fatal, and progressive genetic disorder. Rafael also holds a majority equity interest in LipoMedix Pharmaceuticals Ltd. a clinical
stage pharmaceutical company, Barer Institute Inc., a wholly owned preclinical cancer metabolism research operation, and a majority interest
in Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company. Rafael
also holds a majority interest in Rafael Medical Devices, LLC., an orthopedic-focused medical device company developing instruments to
advance minimally invasive surgeries, and a majority interest in Day Three Labs, Inc., a company which empowers third-party manufacturers
to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions
by utilizing Day Three's pharmaceutical-grade technology and innovation like Unlokt . The Company's primary focus
is to expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet
medical needs. Upon closing of the planned merger with Cyclo, the Company intends to focus its efforts on making Trappsol Cyclo
its lead clinical program.
Forward Looking Statements
This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding
our expectations surrounding the potential, safety, efficacy, and regulatory and clinical progress of our product candidates; plans regarding
the further evaluation of clinical data; and the potential of our pipeline, including our internal cancer metabolism research programs.
These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that
may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements, including, but not limited to, those disclosed under the caption "Risk Factors"
in our Annual Report on Form 10-K for the year ended July 31, 2024, and our other filings with the SEC. These factors could cause actual
results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking
statements represent management's estimates as of the date of this press release. While we may elect to update such forward-looking
statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per
| July 31, 2024 | July 31, 2023 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 2,675 | $ | 21,498 | ||||
| Available-for-sale securities | 63,265 | 57,714 | ||||||
| Interest receivable | 515 | 387 | ||||||
| Convertible note receivable, related party | 5,191 | - | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $245 at July 31, 2024 and July 31, 2023 | 426 | 213 | ||||||
| Prepaid expenses and other current assets | 430 | 914 | ||||||
| Convertible note receivable, related party | 0 | 1,921 | ||||||
| Investment in equity securities | - | 294 | ||||||
| Total current assets | 72,502 | 82,941 | ||||||
| Property and equipment, net | 2,120 | 1,695 | ||||||
| Investments - Cyclo | 12,010 | 4,763 | ||||||
| Investments - Hedge Funds | 2,547 | 4,984 | ||||||
| Investment - Day Three | - | 2,797 | ||||||
| Investments - Other Pharmaceuticals | - | 65 | ||||||
| Convertible note receivable | 1,146 | - | ||||||
| Goodwill | 3,050 | - | ||||||
| Intangible assets, net | 1,847 | - | ||||||
| In-process research and development | 1,575 | 1,575 | ||||||
| Other assets | 35 | 9 | ||||||
| TOTAL ASSETS | $ | 96,832 | $ | 98,829 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 2,556 | $ | 333 | ||||
| Accrued expenses | 1,798 | 763 | ||||||
| Convertible notes payable | 614 | - | ||||||
| Other current liabilities | 113 | 1,023 | ||||||
| Due to related parties | 733 | 26 | ||||||
| Installment note payable | 1,700 | - | ||||||
| Total current liabilities | 7,514 | 2,145 | ||||||
| Accrued expenses, noncurrent | 2,982 | - | ||||||
| Convertible notes payable, noncurrent | 73 | - | ||||||
| Other liabilities | 5 | 55 | ||||||
| TOTAL LIABILITIES | 10,574 | 2,200 | ||||||
| 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, 2024 and July 31, 2023 | 8 | 8 | ||||||
| Class B common stock, $0.01 par value; 200,000,000 shares authorized, 24,142,535 issued and 23,819,948 outstanding (excluding treasury shares of 101,487) as of July 31, 2024, and 23,635,709 shares issued and 23,490,527 shares outstanding as of July 31, 2023 | 238 | 236 | ||||||
| Additional paid-in capital | 280,048 | 264,010 | ||||||
| Accumulated deficit | (201,743 | ) | (167,333 | ) | ||||
| Treasury stock, at cost; 101,487 and 0 Class B shares as of July 31, 2024 and July 31, 2023, respectively | (168 | ) | - | |||||
| Accumulated other comprehensive income (loss) related to unrealized income on available-for-sale securities | 111 | (353 | ) | |||||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,691 | 3,725 | ||||||
| Total equity attributable to Rafael Holdings, Inc. | 82,185 | 100,293 | ||||||
| Noncontrolling interests | 4,073 | (3,664 | ) | |||||
| TOTAL EQUITY | 86,258 | 96,629 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 96,832 | $ | 98,829 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and per
| Three Months Ended July 31, | Year Ended July 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | 165 | $ | 68 | $ | 637 | $ | 279 | ||||||||
| Cost of infusion Technology revenue | 69 | - | 154 | - | ||||||||||||
| G&A Expenses | 2,330 | 1,395 | 8,854 | 8,932 | ||||||||||||
| R&D Expenses | 1,543 | 1,266 | 4,170 | 6,312 | ||||||||||||
| In-process research and development expense | - | 0 | 89,861 | - | ||||||||||||
| Depreciation and amortization | 68 | 18 | 225 | 78 | ||||||||||||
| Operating Loss | (3,845 | ) | (2,611 | ) | (102,627 | ) | (15,043 | ) | ||||||||
| Interest income | 606 | - | 2,383 | 3,253 | ||||||||||||
| Impairment of investments - Other Pharmaceuticals | - | 17 | - | (334 | ) | |||||||||||
| Loss on initial investment in Day Three upon acquisition | - | - | (1,633 | ) | - | |||||||||||
| Realized gain on available-for-sale securities | 251 | - | 1,772 | 154 | ||||||||||||
| Realized gain (loss) on investment in equity securities | - | - | (46 | ) | 309 | |||||||||||
| Unrealized gain on investment in equity securities | - | - | - | 33 | ||||||||||||
| Realized gain on investment - Cyclo | - | - | 424 | - | ||||||||||||
| Unrealized gain on investment - Cyclo | (3,162 | ) | 2,663 | 37 | 2,663 | |||||||||||
| Unrealized gain on convertible notes receivable, due from Cyclo | 1,191 | - | 1,191 | - | ||||||||||||
| Unrealized (loss) gain on investment - Hedge Funds | 181 | 100 | 63 | 220 | ||||||||||||
| Recovery of receivables from Cornerstone | - | - | 31,305 | - | ||||||||||||
| Interest expense | (163 | ) | - | (248 | ) | - | ||||||||||
| Other income | - | 1,294 | 118 | - | ||||||||||||
| Income (loss) before incomes taxes from continuing operations | (4,941 | ) | 1,463 | (67,261 | ) | (8,745 | ) | |||||||||
| Benefit from taxes | 87 | (4 | ) | 2,680 | 255 | |||||||||||
| Equity in loss of Day Three | - | (203 | ) | (422 | ) | (203 | ) | |||||||||
| Consolidated net loss from continuing operations | (4,854 | ) | 1,256 | (65,003 | ) | (8,693 | ) | |||||||||
| Discontinued Operations | ||||||||||||||||
| Loss from discontinued operations related to 520 Property | (65 | ) | - | (306 | ) | |||||||||||
| Gain on disposal of 520 Property | - | - | 6,784 | |||||||||||||
| Income from discontinued operations | - | (65 | ) | - | 6,478 | |||||||||||
| Consolidated net loss | (4,854 | ) | 1,191 | (65,003 | ) | (2,215 | ) | |||||||||
| Net loss attributable to noncontrolling interests | (386 | ) | (28 | ) | (30,593 | ) | (339 | ) | ||||||||
| Net loss attributable to Rafael Holdings, Inc. | $ | (4,468 | ) | $ | 1,163 | $ | (34,410 | ) | $ | (1,876 | ) | |||||
| Continuing operations earnings (loss) per share | ||||||||||||||||
| Net loss from continuing operations | $ | (4,854 | ) | $ | 1,256 | $ | (65,003 | ) | $ | (8,693 | ) | |||||
| Net loss attributable to noncontrolling interests | (386 | ) | (28 | ) | (30,593 | ) | (339 | ) | ||||||||
| Numerator for loss per share from continuing operations | $ | (4,468 | ) | $ | 1,284 | $ | (34,410 | ) | $ | (8,354 | ) | |||||
| Discontinued operations earnings income per share | ||||||||||||||||
| Numerator for income from discontinued operations | $ | - | $ | (65 | ) | $ | - | $ | 6,478 | |||||||
| Earnings (loss) per share - Basic and Diluted | ||||||||||||||||
| Continuing operations | $ | (0.19 | ) | $ | 0.06 | $ | (1.45 | ) | $ | (0.36 | ) | |||||
| Discontinued operations | - | - | - | 0.28 | ||||||||||||
| Total basic earnings (loss) per common share | $ | (0.19 | ) | $ | 0.06 | $ | (1.45 | ) | $ | (0.08 | ) | |||||
| Weighted average number of shares used in calculation of earnings (loss) per share - basic and diluted | 23,916,839 | 22,263,211 | 23,745,516 | 23,263,211 |