Full Press Release Details
Rafael Holdings Reports Third Quarter
Fiscal Year 2020 Results
NEWARK, NJ - June 9, 2020: Rafael Holdings, Inc.,
(NYSE: RFL), reported revenue of $1.2 million and a loss per share of $0.14 for the fiscal quarter ended April 30, 2020.
Q3 FY 2020 Consolidated Highlights
Rafael Pharmaceuticals
At April 30, 2020, Rafael Holdings held 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.
Rafael Holdings increased its investment in pharmaceutical development
through its Barer Institute subsidiary. The Barer Institute is currently testing indications for lead compounds targeting cancer
metabolism and has initiated a preclinical in-licensing effort on selected compounds that target the unique mechanisms of cancer.
Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
"Rafael Holdings' key pharmaceutical investments,
Rafael Pharma and LipoMedix and our wholly owned Barer Institute, continue to execute on their development and clinical programs
despite the challenges posed by the worldwide Covid-19 pandemic. I am especially gratified that Rafael Pharma has surpassed the
80% enrollment milestone in its pivotal Phase 3 Avenger 500 study of patients with pancreatic cancer. The Barer Institute is evaluating
promising candidates for potential clinical development programs. And finally, we continue to work to monetize our New Jersey real
estate assets, while our asset in Israel is now fully leased."
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 a pipeline of 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 www.rafaelholdings.com.
Chief Financial Officer
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share
| April 30, | July 31, | |||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 8,430 | $ | 12,024 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts of $143 and $122 at April 30, 2020 and July 31, 2019, respectively | 261 | 450 | ||||||
| Due from Rafael Pharmaceuticals | 135 | 280 | ||||||
| Prepaid expenses and other current assets | 336 | 507 | ||||||
| Total current assets | 9,162 | 13,261 | ||||||
| Property and equipment, net | 47,811 | 48,733 | ||||||
| Investments - Rafael Pharmaceuticals | 70,018 | 70,018 | ||||||
| Investments - Other Pharmaceuticals | 1,705 | 2,000 | ||||||
| Investments - Hedge Funds | 5,617 | 5,125 | ||||||
| Equity investment - RP Finance | 53 | - | ||||||
| Deferred income tax assets, net | 6 | 19 | ||||||
| In-process research and development and patents | 1,575 | 1,575 | ||||||
| Other assets | 1,484 | 1,412 | ||||||
| TOTAL ASSETS | $ | 137,431 | $ | 142,143 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Trade accounts payable | $ | 700 | $ | 795 | ||||
| Accrued expenses | 728 | 605 | ||||||
| Other current liabilities | 57 | 27 | ||||||
| Total current liabilities | 1,485 | 1,427 | ||||||
| Due to Related Party | 27 | 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 | 1,604 | 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 April 30, 2020 and July 31, 2019 | 8 | 8 | ||||||
| Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,034,931 issued and 15,028,869 outstanding as of April 30, 2020 and 13,142,502 shares issued and outstanding as of July 31, 2019 | 149 | 131 | ||||||
| Additional paid-in capital | 128,998 | 112,898 | ||||||
| Accumulated deficit | (10,850 | ) | (5,840 | ) | ||||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,752 | 3,784 | ||||||
| Total equity attributable to Rafael Holdings, Inc. | 122,057 | 110,981 | ||||||
| Noncontrolling interests | 13,770 | 13,783 | ||||||
| TOTAL EQUITY | 135,827 | 124,764 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 137,431 | $ | 142,143 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
(unaudited, in thousands, except share
| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| REVENUE: | ||||||||||||||||
| Rental - Third Party | $ | 360 | $ | 588 | $ | 1,076 | $ | 1,277 | ||||||||
| Rental - Related Party | 523 | 521 | 1,570 | 1,564 | ||||||||||||
| Parking | 221 | 268 | 664 | 688 | ||||||||||||
| Other - Related Party | 120 | - | 360 | - | ||||||||||||
| Total Revenue | 1,224 | 1,377 | 3,670 | 3,529 | ||||||||||||
| COSTS AND EXPENSES | ||||||||||||||||
| Selling, general and administrative | 2,081 | 2,059 | 6,343 | 5,228 | ||||||||||||
| Research and development | 634 | 300 | 1,327 | 949 | ||||||||||||
| Depreciation and amortization | 474 | 436 | 1,413 | 1,296 | ||||||||||||
| Loss from Operations | (1,965 | ) | (1,418 | ) | (5,413 | ) | (3,944 | ) | ||||||||
| Interest (expense) income, net | - | (221 | ) | (31 | ) | 647 | ||||||||||
| Net gain (loss) resulting from foreign exchange transactions | - | 19 | (5 | ) | 19 | |||||||||||
| Gain on sales of marketable securities, net | - | - | - | 330 | ||||||||||||
| Impairment of investments - Other Pharmaceuticals | (295 | ) | - | (295 | ) | - | ||||||||||
| Unrealized (loss) gain on investments - Hedge Funds | (28 | ) | 466 | 492 | 414 | |||||||||||
| Loss Before Income Taxes | (2,288 | ) | (1,154 | ) | (5,252 | ) | (2,534 | ) | ||||||||
| (Provision for) benefit from income taxes | (8 | ) | 7 | (24 | ) | 21 | ||||||||||
| Equity in earnings of RP Finance | 53 | - | 53 | - | ||||||||||||
| Consolidated Net Loss | (2,243 | ) | (1,147 | ) | (5,223 | ) | (2,513 | ) | ||||||||
| Net loss attributable to noncontrolling interests | (84 | ) | (142 | ) | (213 | ) | (6 | ) | ||||||||
| Net Loss Attributable to Rafael Holdings, Inc. | $ | (2,159 | ) | $ | (1,005 | ) | $ | (5,010 | ) | $ | (2,507 | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||||||||||
| Net Loss | $ | (2,243 | ) | $ | (1,147 | ) | $ | (5,223 | ) | $ | (2,513 | ) | ||||
| Foreign currency translation adjustments | (4 | ) | (54 | ) | (32 | ) | (52 | ) | ||||||||
| Total Comprehensive Loss | (2,247 | ) | (1,201 | ) | (5,255 | ) | (2,565 | ) | ||||||||
| Comprehensive (loss) income attributable to noncontrolling interests | (3 | ) | (18 | ) | (19 | ) | 5 | |||||||||
| Total Comprehensive Loss attributable to Rafael Holdings, Inc. | $ | (2,244 | ) | $ | (1,183 | ) | $ | (5,236 | ) | $ | (2,570 | ) | ||||
| Loss Per Share: | ||||||||||||||||
| Basic and diluted | $ | (0.14 | ) | $ | (0.07 | ) | $ | (0.32 | ) | $ | (0.19 | ) | ||||
| Weighted average number of shares used in calculation of loss per share: | ||||||||||||||||
| Basic and diluted | 15,813,679 | 13,924,691 | 15,747,709 | 13,055,037 |
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| Nine Months Ended April 30, | ||||||||
| 2020 | 2019 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (5,223 | ) | $ | (2,513 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 1,413 | 1,296 | ||||||
| Deferred income taxes | 13 | (24 | ) | |||||
| Interest income on Series D Convertible Note | - | (848 | ) | |||||
| Net gain on sales of marketable securities | - | (330 | ) | |||||
| Impairment of investments - Other Pharmaceuticals | 295 | - | ||||||
| Unrealized gain on investments - Hedge Funds | (492 | ) | (414 | ) | ||||
| Equity in earnings of RP Finance | (53 | ) | - | |||||
| Provision for doubtful accounts | 48 | 86 | ||||||
| Non-cash compensation | 546 | 269 | ||||||
| Amortization of debt discount | 54 | 11 | ||||||
| Change in assets and liabilities: | ||||||||
| Trade accounts receivable | 141 | (471 | ) | |||||
| Prepaid expenses and other current assets | 171 | (419 | ) | |||||
| Other assets | (72 | ) | (180 | ) | ||||
| Accounts payable and accrued expenses | 28 | 91 | ||||||
| Due to/from related parties | 107 | 473 | ||||||
| Accrued interest - Related Party | 19 | 418 | ||||||
| Other current liabilities | - | (5 | ) | |||||
| Other liabilities | 30 | 22 | ||||||
| Net cash used in operating activities | (2,975 | ) | (2,538 | ) | ||||
| Investing activities | ||||||||
| Purchases of property and equipment | (491 | ) | (364 | ) | ||||
| Proceeds from sale and maturity of marketable securities, net | - | 25,031 | ||||||
| Investment in Rafael Pharmaceuticals | - | (55,870 | ) | |||||
| Net cash used in investing activities | (491 | ) | (31,203 | ) | ||||
| Financing activities | ||||||||
| Contribution from noncontrolling interest of consolidated entity | - | 4,587 | ||||||
| Repayment of Loan from Rafael Pharmaceuticals | - | 3,300 | ||||||
| Proceeds from exercise of options | 29 | 190 | ||||||
| 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 | (125 | ) | - | |||||
| Net cash (used in) provided by financing activities | (96 | ) | 30,854 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (32 | ) | 53 | |||||
| Net decrease in cash and cash equivalents | (3,594 | ) | (2,834 | ) | ||||
| Cash and cash equivalents at beginning of period | 12,024 | 15,803 | ||||||
| Cash and cash equivalents at end of period | $ | 8,430 | $ | 12,969 | ||||
| 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 | $ | - |