Rafael Holdings Reports First Quarter Fiscal Year 2021 Results
NEWARK, N.J., Dec. 15, 2020 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $1.1 million and a loss per share of $0.09 for the first quarter of its 2021 fiscal year, the three months ended October 31, 2020.
Q1 FY 2021 Consolidated Financial Highlights
-- Revenue of $1.1 million in Q1 FY 2021, generated by Rafael Holdings'
real estate portfolio, decreased from $1.2 million in the year-ago
quarter.
-- Loss per share of $0.09, a decrease from $0.10 in the year ago quarter
largely due to a gains on the sale of the Company's commercial real
estate property in Piscataway, New Jersey and other investments which
more than offset the increased research and development expense.
-- On December 7, 2020, the Company acquired the economic rights related to
an additional 33.33% membership interest in Altira, a company which owns
the rights to a receive a royalty on sales of certain Rafael
Pharmaceuticals products. The acquisition added to the 33.33% interest
purchased in fiscal 2020 As in the first such agreement, the Company
purchased the potential right to receive a 1% royalty on Net Sales on
these products.
-- On December 7, 2020, Rafael Holdings entered into a Securities Purchase
Agreement for the sale of 567,437 shares of the Company's Class B common
stock at a price per share of $22.91 (the closing price of Class B
common stock on the prior trading day) for an aggregate purchase price
of $13 million. In connection with the purchases, each purchaser was
granted warrants to purchase 20% of the shares of Class B common stock
purchased by such purchaser exercisable at $22.91. A majority of the
proceeds received are expected to be used by the Company to exercise an
additional portion of the warrant held by the Company's subsidiary to
purchase equity securities of Rafael Pharmaceuticals. The remaining
proceeds are expected to be used to fund the operations of Rafael
Holdings' drug development programs including its Barer Institute
subsidiary and for general corporate purposes.
Rafael Pharmaceuticals
At October 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 basis. Recent developments announced by Rafael Pharmaceuticals include:
-- The U.S. Food and Drug Administration (FDA) has granted Fast Track
designation for the Company's lead compound, CPI-613® (devimistat), for
the treatment of both metastatic pancreatic cancer and acute myeloid
leukemia (AML).
-- Rafael Pharmaceuticals announced that it will initiate a Phase 2
clinical trial of CPI-613®(devimistat) in combination with
hydroxychloroquine in patients with clear cell sarcoma of soft tissue.
The Company will begin enrolling patients in partnership with Sara's
Cure and Sarcoma Alliance for Research through Collaboration (SARC).
-- The FDA has granted Orphan Drug Designation for CPI-613® (devimistat)
for the treatment of soft tissue sarcoma. Rafael Pharmaceuticals'
clinical trial will focus on the treatment of relapsed or refractory
clear cell sarcoma.
-- Rafael Pharmaceuticals announced that it had crossed the enrollment of
100 patients in its Phase 3 clinical trial (Armada 2000) for patients
with relapsed or refractory acute myeloid leukemia (AML). The
multi-center, open-label, randomized pivotal trial is assessing the
efficacy and safety of Rafael's lead compound CPI-613® (devimistat) in
combination with high dose cytarabine and mitoxantrone (CHAM) compared
to high dose cytarabine and mitoxantrone (HAM) therapy in older
patients.
LipoMedix
At October 31, 2020, Rafael Holdings held 68% 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.
Barer Institute
The Barer Institute has identified and begun to develop 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.
Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
"Rafael Holdings'continued to pursue the strategic goal of creating value in the pharmaceutical field including through its investments in Rafael Pharmaceuticals and its wholly owned Barer Institute. In that regard, I am pleased that, among other milestones achieved, Rafael Pharmaceuticals' lead compound, CPI-613® (devimistat), received U.S. Food and Drug Administration granted Fast Track designation for the treatment of metastatic pancreatic cancer and, as Rafael Pharmaceuticals announced earlier today, for acute myeloid leukemia (AML). The Barer Institute continues to make meaningful progress on its drug development programs."
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.
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share data)
October 31, July 31,
2020 2020
ASSETS
CURRENT ASSETS
Cash and cash equivalents $
7,231 $
6,206
Trade accounts receivable, net of
allowance for doubtful accounts of $256
and $218 at October 31, 2020 and July 31,
2020, respectively 309 267
Due from Rafael Pharmaceuticals 240 118
Prepaid expenses and other current assets 460 273
Assets held for sale 2,968
Total current assets 8,240 9,832
Property and equipment, net 44,141 44,433
Equity investment - RP Finance 288 192
Due from RP Finance LLC 1,875
Investments - Rafael Pharmaceuticals 70,018 70,018
Investments - Other Pharmaceuticals 477 1,201
Investments - Hedge Funds 6,454 7,510
Deferred income tax assets, net 6
In-process research and development and
patents 1,575 1,575
Other assets 1,550 1,580
TOTAL ASSETS $
134,618 $
136,347
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade accounts payable $
1,155 $
921
Accrued expenses 443 1,191
Amount due for purchase of membership
interest 3,500 3,500
Other current liabilities 141 115
Due to related parties 30
Total current liabilities 5,269 5,727
Other liabilities 33 92
TOTAL LIABILITIES 5,302 5,819
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
October 31, 2020 and July 31, 2020,
respectively 8 8
Class B common stock, $0.01 par value;
200,000,000 shares authorized, 15,050,609
issued and 15,044,547 outstanding as of
October 31, 2020, and 15,034,598 issued
and 15,028,536 outstanding as of July 31,
2020 149 149
Additional paid-in capital 129,393 129,136
Accumulated deficit (17,701) (16,255)
Accumulated other comprehensive income
related to foreign currency translation
adjustment 3,724 3,762
Total equity attributable to Rafael
Holdings, Inc. 115,573 116,800
Noncontrolling interests 13,743 13,728
TOTAL EQUITY 129,316 130,528
TOTAL LIABILITIES AND EQUITY $
134,618 $
136,347
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited, in thousands, except share and per share data)
Three Months Ended
October 31,
2020 2019
REVENUE
Rental - Third Party $
236 $
346
Rental - Related Party 520 520
Parking 177 224
Other - Related Party 120 120
Total revenue 1,053 1,210
COSTS AND EXPENSES
Selling, general and administrative 2,592 2,041
Research and development 515 245
Depreciation and amortization 437 466
Loss from operations (2,491) (1,542)
Interest expense, net (64)
Net loss resulting from foreign exchange transactions (5)
Gain on sale of building 749
Impairment of investments - Other Pharmaceuticals (724)
Unrealized gain (loss) on investments - Hedge Funds 944 (37)
Loss before income taxes (1,522) (1,648)
Provision for income taxes (5) (4)
Equity in earnings of RP Finance 96
Consolidated net loss (1,431) (1,652)
Net loss (income) attributable to noncontrolling interests 15 (54)
Net loss attributable to Rafael Holdings, Inc. $
(1,446) $
(1,598)
OTHER COMPREHENSIVE LOSS
Net loss $
(1,431) $
(1,652)
Foreign currency translation adjustment (38) 6
Total comprehensive loss (1,469) (1,646)
Comprehensive loss attributable to noncontrolling interests (21) (2)
Total comprehensive loss attributable to Rafael Holdings, Inc. $
(1,490) $
(1,648)
Loss per share
Basic and diluted $
(0.09) $
(0.10)
Weighted average number of shares used in calculation of loss per share
Basic and diluted 15,822,722 15,640,683
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited, in thousands)
Three Months Ended
October 31,
2020 2019
Operating activities
Net loss $
(1,431) $
(1,652)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization 437 466
Deferred income taxes 6 1
Net unrealized (gain) loss on investments - Hedge Funds (944) 37
Impairment of investments - Other Pharmaceuticals 724
Equity in earnings of RP Finance (96)
Provision for doubtful accounts 38 48
Stock-based compensation 214 94
Amortization of debt discount 54
Gain on sale of building (749)
Change in assets and liabilities:
Trade accounts receivable (80) 173
Prepaid expenses and other current assets (187) 217
Other assets 30 (289)
Accounts payable and accrued expenses (490) (196)
Due from Rafael Pharmaceuticals (122)
Other current liabilities 26 (12)
Due to related parties 30 (37)
Due from Rafael Pharmaceuticals 160
Other liabilities (59)
Net cash used in operating activities (2,653) (936)
Investing activities
Purchases of property and equipment (145) (321)
Payment to fund RP Finance (1,875)
Proceeds from sale of building 3,658
Proceeds related to distribution of Hedge Funds 2,000
Net cash provided by (used in) investing activities 3,638 (321)
Financing activities
Proceeds from exercise of options 43
Net cash provided by financing activities 43
Effect of exchange rate changes on cash and cash equivalents (3) 4
Net increase (decrease) in cash and cash equivalents 1,025 (1,253)
Cash and cash equivalents, beginning of period 6,206 12,024
Cash and cash equivalents, end of period $
7,231 $
10,771
Supplemental schedule of noncash investing and financing activities
Conversion of LipoMedix bridge notes
$ $
82
Conversions of related party convertible notes payable and accrued interest
$ $
15,668
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SOURCE Rafael Holdings, Inc.
