Full Press Release Details
Rafael Holdings Reports Second Quarter
Fiscal Year 2020 Results
NEWARK, NJ - March 5, 2020: Rafael Holdings, Inc.,
(NYSE: RFL), reported revenue of $1.2 million and a loss per diluted share of $0.08 for the fiscal quarter ended January 31, 2020.
Recent Rafael Holdings Highlights
Rafael Pharmaceuticals
Following the equity issued in connection with the financing arrangement
referenced above, Rafael Holdings and its subsidiaries held 50.7% (38.7% exclusive of minority interests) of the capital stock
of Rafael Pharmaceuticals.
Rafael Holdings owns 57.9% 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.
Remarks by Howard Jonas, Chairman and CEO of Rafael
"Rafael Holdings' key pharmaceutical investments, Rafael
Pharmaceuticals and LipoMedix, both achieved important milestones in their respective clinical development programs this quarter.
We also entered into an agreement to finance Rafael Pharmaceuticals' expanding clinical development program and put in place
key Barer Institute research programs. Finally, we continue to work to monetize some of our real estate portfolio including our
office building in Newark, New Jersey."
About Rafael Holdings, Inc.:
Rafael Holdings holds commercial real estate assets and interests
in clinical stage pharmaceutical companies. The real estate holdings consist of properties in Newark and Piscataway, New Jersey
and Jerusalem, Israel. The pharmaceutical holdings include interests in two companies focused on the development and commercialization
of oncology drugs: Rafael Pharmaceuticals, Inc. and LipoMedix Pharmaceuticals Ltd. In addition, Rafael Holdings, through its wholly
owned subsidiary, the Barer Institute, Inc., is developing a pipeline of therapeutic compounds including compounds to regulate
cancer metabolism. For more information, visit rafaelholdings.com
Chief Financial Officer
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and
| January 31, | July 31, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 9,522 | $ | 12,024 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts of $170 and $122 at January 31, 2020 and July 31, 2019, respectively | 325 | 450 | ||||||
| Due from Rafael Pharmaceuticals | 118 | 280 | ||||||
| Prepaid expenses and other current assets | 326 | 507 | ||||||
| Total current assets | 10,291 | 13,261 | ||||||
| Property and equipment, net | 48,250 | 48,733 | ||||||
| Investments - Rafael Pharmaceuticals | 70,018 | 70,018 | ||||||
| Investments - Other Pharmaceuticals | 2,000 | 2,000 | ||||||
| Investments - Hedge Funds | 5,645 | 5,125 | ||||||
| Deferred income tax assets, net | 7 | 19 | ||||||
| In-process research and development and patents | 1,575 | 1,575 | ||||||
| Other assets | 1,450 | 1,412 | ||||||
| TOTAL ASSETS | $ | 139,236 | $ | 142,143 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Trade accounts payable | $ | 569 | $ | 795 | ||||
| Accrued expenses | 579 | 605 | ||||||
| Other current liabilities | 48 | 27 | ||||||
| Total current liabilities | 1,196 | 1,427 | ||||||
| Due to Related Party | 29 | 65 | ||||||
| Convertible note, net of discount of $0 and $54 - Related Party | - | 14,946 | ||||||
| Other liabilities | 92 | 292 | ||||||
| Accrued interest on convertible note - Related Party | - | 649 | ||||||
| TOTAL LIABILITIES | 1,317 | 17,379 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY | ||||||||
| Class A common stock, $0.01 par value; 50,000,000 shares authorized, 787,163 shares issued and outstanding as of January 31, 2020 and July 31, 2019 | 8 | 8 | ||||||
| Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,020,485 and 13,142,502 shares issued and outstanding as of January 31, 2020 and July 31, 2019, respectively | 149 | 131 | ||||||
| Additional paid-in capital | 128,843 | 112,898 | ||||||
| Accumulated deficit | (8,691 | ) | (5,840 | ) | ||||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,756 | 3,784 | ||||||
| Total equity attributable to Rafael Holdings, Inc. | 124,065 | 110,981 | ||||||
| Noncontrolling interests | 13,854 | 13,783 | ||||||
| TOTAL EQUITY | 137,919 | 124,764 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 139,236 | $ | 142,143 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND
(unaudited, in thousands, except share and
| Three Months Ended January 31, | Six Months Ended January 31, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| REVENUE: | ||||||||||||||||
| Rental - Third Party | $ | 370 | $ | 306 | $ | 716 | $ | 689 | ||||||||
| Rental - Related Party | 527 | 522 | 1,047 | 1,043 | ||||||||||||
| Parking | 219 | 189 | 443 | 420 | ||||||||||||
| Other - Related Party | 120 | - | 240 | - | ||||||||||||
| Total Revenue | 1,236 | 1,017 | 2,446 | 2,152 | ||||||||||||
| COSTS AND EXPENSES | ||||||||||||||||
| Selling, general and administrative | 2,221 | 1,716 | 4,262 | 3,169 | ||||||||||||
| Research and development | 448 | 276 | 693 | 649 | ||||||||||||
| Depreciation and amortization | 473 | 431 | 939 | 860 | ||||||||||||
| Loss from Operations | (1,906 | ) | (1,406 | ) | (3,448 | ) | (2,526 | ) | ||||||||
| Interest income (expense), net | 33 | 767 | (31 | ) | 868 | |||||||||||
| Net loss resulting from foreign exchange transactions | - | - | (5 | ) | - | |||||||||||
| Gain on sales of marketable securities, net | - | 103 | - | 330 | ||||||||||||
| Unrealized gain (loss) on Investments - Hedge Funds | 557 | (148 | ) | 520 | (52 | ) | ||||||||||
| Loss Before Income Taxes | (1,316 | ) | (684 | ) | (2,964 | ) | (1,380 | ) | ||||||||
| (Provision for) benefit from income taxes | (12 | ) | (17 | ) | (16 | ) | 14 | |||||||||
| Net Loss | (1,328 | ) | (701 | ) | (2,980 | ) | (1,366 | ) | ||||||||
| Net (loss) income attributable to noncontrolling interests | (75 | ) | 320 | (129 | ) | 136 | ||||||||||
| Net Loss attributable to Rafael Holdings, Inc. | $ | (1,253 | ) | $ | (1,021 | ) | $ | (2,851 | ) | $ | (1,502 | ) | ||||
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
| Net Loss | $ | (1,328 | ) | $ | (701 | ) | $ | (2,980 | ) | $ | (1,366 | ) | ||||
| Foreign currency translation adjustments | (34 | ) | 80 | (28 | ) | 2 | ||||||||||
| Total Comprehensive Loss | (1,362 | ) | (621 | ) | (3,008 | ) | (1,364 | ) | ||||||||
| Comprehensive (loss) income attributable to noncontrolling interests | (18 | ) | 15 | (16 | ) | 23 | ||||||||||
| Total Comprehensive Loss attributable to Rafael Holdings, Inc. | $ | (1,344 | ) | $ | (636 | ) | $ | (2,992 | ) | $ | (1,387 | ) | ||||
| Loss Per Share: | ||||||||||||||||
| Basic and diluted | $ | (0.08 | ) | $ | (0.08 | ) | $ | (0.18 | ) | $ | (0.12 | ) | ||||
| Weighted average number of shared used in calculation of loss per share: | ||||||||||||||||
| Basic and diluted | 15,790,400 | 13,489,583 | 15,715,442 | 12,634,389 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| Six Months Ended January 31, | ||||||||
| 2020 | 2019 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (2,980 | ) | $ | (1,366 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 939 | 860 | ||||||
| Deferred income taxes | 12 | (15 | ) | |||||
| Interest income on Series D Convertible Note | - | (848 | ) | |||||
| Net gain on sales of marketable securities | - | (330 | ) | |||||
| Unrealized (gain) loss on investments - Hedge Funds | (520 | ) | 52 | |||||
| Provision for doubtful accounts | 48 | 9 | ||||||
| Non-cash compensation | 411 | 172 | ||||||
| Amortization of debt discount | 54 | 5 | ||||||
| Change in assets and liabilities: | ||||||||
| Trade accounts receivable | 77 | (78 | ) | |||||
| Prepaid expenses and other current assets | 181 | (186 | ) | |||||
| Other assets | (38 | ) | (82 | ) | ||||
| Accounts payable and accrued expenses | (252 | ) | 296 | |||||
| Due to/from related parties | 126 | 588 | ||||||
| Other current liabilities | - | 39 | ||||||
| Other liabilities | 42 | (15 | ) | |||||
| Net cash used in operating activities | (1,900 | ) | (899 | ) | ||||
| Investing activities | ||||||||
| Purchases of property and equipment | (456 | ) | (58 | ) | ||||
| Proceeds from sale and maturity of marketable securities, net | - | 25,031 | ||||||
| Investment in Rafael Pharmaceuticals | - | (55,870 | ) | |||||
| Net cash used in investing activities | (456 | ) | (30,897 | ) | ||||
| Financing activities | ||||||||
| Contribution from noncontrolling interest of consolidated entity | - | 4,587 | ||||||
| Repayment of Loan from Rafael Pharmaceuticals | - | 3,300 | ||||||
| Proceeds from exercise of options | - | 163 | ||||||
| Proceed from sale of shares | - | 7,777 | ||||||
| Proceeds from convertible notes payable - Related Party | - | 15,000 | ||||||
| Payments for taxes related to shares withheld for employee taxes | (116 | ) | - | |||||
| Net cash (used in) provided by financing activities | (116 | ) | 30,827 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (30 | ) | (65 | ) | ||||
| Net decrease in cash and cash equivalents | (2,502 | ) | (1,034 | ) | ||||
| Cash and cash equivalents at beginning of period | 12,024 | 15,803 | ||||||
| Cash and cash equivalents at end of period | $ | 9,522 | $ | 14,769 | ||||
| Supplemental Schedule of Non-Cash 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 | ||||
| Conversion of LipoMedix Bridge Note | $ | 200 | $ | - | ||||
| Conversions of related party convertible notes payable and accrued interest | $ | 15,668 | $ | - |