Rafael Holdings Reports Second Quarter Fiscal Year 2020 Results
5 March 2020
NEWARK, N.J., March 5, 2020 /PRNewswire/ -- 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
- Subsequent to the quarter close, Rafael Holdings and other shareholders in Rafael Pharmaceuticals, a leader in cancer metabolism-based therapeutics, entered into an agreement to provide up to $50 million to finance Rafael Pharmaceuticals' operations and clinical development program. Please see Rafael Holdings' Form 8-K filed with the U.S. Securities and Exchange Commission on February 3, 2020 for additional information.
- On November 21, 2019, Rafael Holdings up-listed its Class B common stock to the New York Stock Exchange from the NYSE American exchange. The Company retained its ticker symbol, 'RFL'.
- The Barer Institute successfully synthesized novel chemical entities that have shown efficacy at inhibiting cancer metabolism, with ongoing studies in syngeneic animal models.
- Revenue of $1.2 million in Q2 FY2020, generated through Rafael Holdings' real estate portfolio, increased from $1.0 million in the year-ago quarter. The loss per share of $0.08 was unchanged from Q2 FY2019.
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.
- On March 3, 2020, Rafael Pharmaceuticals announced the appointment of Sanjay Sehgal, Ph.D., to Chief Regulatory Affairs and Quality Assurance Officer. Dr. Sehgal formerly served as the Senior Vice President of Regulatory Affairs and Conformance at Celularity, Inc. and was Chair of Regulatory Sciences for the American Association of Pharmaceutical Scientists (AAPS) from 2007-2008.
- On January 21, 2020, Rafael Pharmaceuticals announced a collaboration with Michigan Medicine on a Phase 1b/2 clinical trial of CPI-613® (devimistat) in combination with gemcitabine and cisplatin for patients with biliary tract cancer.
- On January 14, 2020, Rafael Pharmaceuticals announced that it had enrolled 250 patients – half of its enrollment goal – in its Phase 3 clinical trial (AVENGER 500) of CPI-613® for patients with metastatic pancreatic cancer. The study is being conducted at multiple sites in the United States, France, Israel and South Korea.
LipoMedix
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.
- On January 23, 2020, LipoMedix announced that a Phase 1 study of Promitil® (PL-MLP) in 53 patients with advanced, treatment-refractory colorectal cancer treated with Promitil either as a single agent or in combination with capecitabine and/or bevacizumab was well tolerated and resulted in a substantial rate of disease stabilization. Prolonged survival of stable disease patients was also observed.
Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
"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
RAFAEL HOLDINGS, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(unaudited, in thousands, except share and per share data) | ||||||||
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 | 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 | 8 | 8 | ||||||
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,020,485 and | 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 COMPREHENSIVE LOSS | ||||||||||||||||
(unaudited, in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
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 | (18) | 15 | (16) | 23 | ||||||||||||
Total Comprehensive Loss attributable to Rafael Holdings, | $ | (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 | ||||||||||||||||
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 | ||||||||
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 | $ | — | ||||
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SOURCE Rafael Holdings, Inc.
