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,
2020
|
|
|
July 31,
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.