Rafael Holdings Reports Third Quarter Fiscal Year 2019 Results

NEWARK, N.J., June 5, 2019 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE American: RFL), reported revenue of $1.4 million and a loss per share of $0.07 for the third quarter of its 2019 fiscal year, the three months ended April 30, 2019.

3Q19 Highlights

    --  Rafael Pharma announced that its lead compound, CPI-613® (devimistat),
        will be explored in a new combination for the treatment of T-cell
        lymphoma as a part of Stand Up To Cancer's T-Cell Lymphoma Dream Team
        Research Grant.
    --  Rafael Pharma's Phase 2 trial of CPI-613 (devimistat) for patients with
        relapsed or refractory Burkitt lymphoma opened in multiple sites. The US
        FDA has designated devimistat orphan drug status for the treatment of
        Burkitt lymphoma.
    --  Rafael Pharma's Phase 3 pivotal trials of CPI-613 (devimistat)
        devimistat for patients with metastatic pancreatic cancer and relapsed
        or refractory acute myeloid leukemia was ongoing in multiple sites.
    --  Rafael Pharma completed its Phase 1 study of CPI-613 (devimistat) in
        combination with bendamustine in patients with relapsed or refractory
        T-cell lymphoma.
    --  To meet the growing demands of its expanded clinical trial program,
        Rafael Pharma added a second qualified CPI-613 (devimistat) manufacturer
        and continued to build out its management team.

Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
"Rafael Holdings is supporting Rafael Pharma and Lipomedix as they pursue their clinical development programs including Rafael Pharma's Phase 3 global trials of CPI-613. We are also continuing to make progress in our effort to realize the full value of our real estate holdings and particularly our 20-story commercial property and associated garage in Newark, New Jersey."

About Rafael Holdings, Inc.:
Holdings holds commercial real estate assets and interests in two clinical stage, oncology focused pharmaceutical companies. The real estate holdings comprise properties in Newark and Piscataway, New Jersey and Jerusalem, Israel. The pharmaceutical holdings consist of equity interests in Rafael Pharmaceuticals, Inc. and a majority stake in Lipomedix Pharmaceuticals Ltd., both of which are focused on development and commercialization of drugs in the oncology space.

RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share data)


                                               April 30,                July 31,


                                                    2019                     2018




     
              ASSETS




                 CURRENT ASSETS:


      Cash and cash equivalents                           $
         12,969            $
          15,803


      Trade accounts receivable, net
       of allowance for doubtful
       accounts of $86 and $82 at
       April 30, 2019 and July 31,
       2018                                                         672                       287



     Marketable securities                                                               24,701


      Due from Rafael Pharmaceuticals                               160                     3,300


      Prepaid expenses and other
       current assets                                               840                       421




     Total current assets                                       14,641                    44,512




      Property and equipment, net                                49,181                    50,113


      Investments - Rafael
       Pharmaceuticals                                           70,018                    13,300


      Investments - Other
       Pharmaceuticals                                            2,000                     2,000


      Investments - Hedge Funds                                   4,632                     4,218


      Deferred income tax assets, net                                24



     Patents                                                       407                       324


      In-process research and
       development                                                1,327                     1,327



     Other assets                                                1,223                     1,126




     
              Total assets                            $
         143,453           $
          116,920





                 LIABILITIES AND STOCKHOLDERS'
                  EQUITY


                 CURRENT LIABILITIES:



     Trade accounts payable                                 $
         755               $
          367



     Accrued expenses                                              203                       500


      Other current liabilities                                      19                        24



      Total current liabilities                                     977                       891




      Due to/from related parties                                    44                       276


      Convertible note, net of $60
       discount - Related Party                                  14,940


      Accrued interest on convertible
       note - Related Party                                         418



     Other liabilities                                             210                       188



                 Total liabilities                               16,589                     1,355





                 Commitments and contingencies




                 STOCKHOLDERS' EQUITY


      Class A common stock, $0.01 par
       value; 35,000,000 shares
       authorized, 787,163 shares
       issued and outstanding as of
       April 30, 2019 and July 31,
       2018                                                           8                         8


      Class B common stock, $0.01 par
       value; 200,000,000 shares
       authorized, 13,139,333 and
       11,762,346 shares issued and
       outstanding as of April 30,
       2019 and July 31, 2018,
       respectively                                                 131                       118


      Additional paid in capital                                117,383                   103,636



     Accumulated deficit                                       (3,654)                  (1,108)


      Accumulated other comprehensive
       income                                                     4,134                     4,043



      Total Rafael Holdings, Inc.
       stockholders' equity                                     118,002                   106,697


      Noncontrolling interests                                    8,862                     8,868




     
              Total equity                                   126,864                   115,565





                 Total liabilities and
                  STOCKHOLDERS' equity                   $
         143,453           $
          116,920

RAFAEL HOLDINGS, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited, in thousands, except share data)


                                                                     Three Months Ended                          Nine Months Ended
                                                             April 30,                                 April 30,



                                                     2019                               2018                            2019                     2018




     
                Revenues:



     Rental - Third Party                                    $
              588                     $
            400                        $
          1,277       $
           1,085



     Rental - Related Party                                              521                               447                                1,564                1,442



     Parking                                                             268                               246                                  688                  630



                   Total Revenue                                        1,377                             1,093                                3,529                3,157




                   Costs and expenses:


      Selling, general and
       administrative                                                   2,059                             1,402                                5,228                4,481


      Research and development                                            300                                                                   949


      Depreciation and amortization                                       436                               422                                1,296                1,276



                   Loss from operations                               (1,418)                            (731)                             (3,944)             (2,600)




      Interest (expense) income, net                                    (221)                               71                                  647                   75


      Net gain (loss) resulting from
       foreign exchange transactions                                       19                              (28)                                  19                   90


      Net loss on equity investments                                                                                                                             (104)


      Gain on sales of marketable
       securities, net                                                                                      24                                  330                   24


      Unrealized gain on investments -
       Hedge Funds                                                        466                                                                   414


      Gain on disposal of bonus shares                                                                                                                             246



                   Loss before income taxes                           (1,154)                            (664)                             (2,534)             (2,269)


      Benefit from (provision for)
       income taxes                                                         7                                 5                                   21              (8,438)




     
                Net Loss                                           (1,147)                            (659)                             (2,513)            (10,707)


      Net loss attributable to
       noncontrolling interests                                         (142)                            (128)                                 (6)               (304)



                   Net loss attributable to Rafael
                    Holdings, Inc.                        $
              (1,005)                  $
            (531)                     $
          (2,507)    $
          (10,403)




                   OTHER COMPREHENSIVE LOSS



     
                Net Loss                               $
              (1,147)                  $
            (659)                     $
          (2,513)    $
          (10,707)


      Unrealized loss on marketable
       securities                                                                                        (311)                                                   (311)


      Foreign currency translation
       adjustments                                                       (54)                             (85)                                (52)                (10)



                   Total Comprehensive Loss                           (1,201)                          (1,055)                             (2,565)            (11,028)


      Comprehensive (loss) income
       attributable to noncontrolling
       interests                                                         (18)                             (29)                                   5                 (29)



                   Total Comprehensive Loss
                    attributable to Rafael Holdings,
                    Inc.                                  $
              (1,183)                $
            (1,026)                     $
          (2,570)    $
          (10,999)





                   Loss Per Share attributable to
                    Rafael Holdings Inc. common
                    shareholders:



     Basic and diluted                                    $
              (0.07)                 $
            (0.04)                      $
          (0.19)      $
          (0.83)




                   Weighted average number of shared
                    used in calculation of loss per
                    share:



     Basic and diluted                                            13,924,691                        12,541,998                           13,055,037           12,541,998

RAFAEL HOLDINGS, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(unaudited, in thousands, except share data)


                                                                                                        Nine Months Ended
                                                                                                 April 30,



                                                                                          2019                            2018






     
                Operating activities



     Net loss                                                                                 $
              (2,513)                   $
        (10,403)


      Adjustments to reconcile net loss to net cash used in operating
       activities:



     Depreciation and amortization                                                                          1,296                             1,276



     Deferred income taxes                                                                                   (24)                            8,851


      Interest income on Rafael Pharmaceuticals Series D Convertible Note                                    (848)



     Net gain on sale of marketable securities                                                              (330)                             (24)



     Unrealized gain on investments - Hedge Funds                                                           (414)



     Provision for doubtful accounts                                                                           86



     Realized gain on disposal of bonus shares                                                                                               (246)



     Non-cash compensation                                                                                    269                               616



     Amortization of debt discount                                                                             11



     Interest in the equity of investments                                                                                                    (80)



     Change in assets and liabilities:



     Trade accounts receivable                                                                              (471)                            (142)



     Other current assets and prepaid expenses                                                              (419)                            (392)



     Other assets                                                                                           (180)                            (355)



     Accounts payable and accrued expenses                                                                     91                               223



     Other current liabilities                                                                                (5)                              (8)



     Due to/from related parties                                                                              473                             (386)



     Accrued interest - Related Party                                                                         418



     Other liabilities                                                                                         22




     Net cash used in operating activities                                                                (2,538)                          (1,070)





     
                Investing activities



     Purchases of property and equipment                                                                    (364)                            (572)



     Proceeds from sale and maturity of marketable securities, net                                         25,031                               436



     Investment in Rafael Pharmaceuticals                                                                (55,870)




     Net cash used in investing activities                                                               (31,203)                            (136)





     
                Financing activities


      Contribution from noncontrolling interest of consolidated entity                                       4,587



     Repayment of Due from Rafael Pharmaceuticals                                                           3,300



     Proceeds from exercise of options                                                                        190



     Proceed from sale of Class B Common shares to Related Party                                            7,777


      Proceeds from issuance of convertible note payable -Related Party                                     15,000




     Net cash provided by financing activities                                                             30,854



     Effect of exchange rate changes on cash and cash equivalents                                              53                                55




     Net decrease in cash and cash equivalents                                                            (2,834)                          (1,151)



     Cash and cash equivalents at beginning of period                                                      15,803                            11,756




     Cash and cash equivalents at end of period                                                $
              12,969                      $
        10,605





                   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              
      $



      Series D Convertible Note and accrued interest converted to Series D
       Preferred Stock                                                                          $
              10,848              
      $




     Related Party deposit utilized to purchase Class B Common Stock                              $
              864              
      $




     Cash payments made for interest & taxes                                           
        $                                 
      $

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SOURCE Rafael Holdings, Inc.