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
    --  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

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.


         (unaudited, in thousands, except share and per share data)

                                                                 October 31,                                        July 31,
                                                                        2020                                             2020


              CURRENT ASSETS

      Cash and cash equivalents                                                  $
            7,231                                      $

      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                                    $



     Trade accounts payable                                                     $
            1,155                                        $

     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



      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                                    $

                RAFAEL HOLDINGS, INC.


                (unaudited, in thousands, except share and per share data)

                                                                                                                         Three Months Ended
                                                                                                                 October 31,

                                                                                                    2020                                    2019


     Rental - Third Party                                                                                     $
              236                            $

     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)                        $


                Net loss                                                                                $
              (1,431)                        $

     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)                        $

                Loss per share

     Basic and diluted                                                                                     $
              (0.09)                         $

                   Weighted average number of shares used in calculation of loss per share

     Basic and diluted                                                                                           15,822,722                                 15,640,683

             RAFAEL HOLDINGS, INC.


             (unaudited, in thousands)

                                                                                                                                                       Three Months Ended
                                                                                                                                               October 31,

                                                                                                                                         2020                             2019

                Operating activities

     Net loss                                                                                                                                $
              (1,431)                  $

     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                    $

                Supplemental schedule of noncash investing and financing activities

     Conversion of LipoMedix bridge notes                                                                                             
        $                                           $

     Conversions of related party convertible notes payable and accrued interest                                                      
        $                                       $

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SOURCE Rafael Holdings, Inc.