Rafael Holdings, Inc. (NYSE: RFL), today reported its financial
results for the fourth quarter and full year of fiscal 2023 - the
three and twelve months ended July 31, 2023.
“During fiscal 2023, we made meaningful progress
toward expanding our portfolio through strategic investments in
companies which have the potential to generate value for our
stockholders. We greatly curtailed our expenses with the suspension
of activities at Barer Institute while increasing our liquidity by
selling our principal real estate holding for $33 million in net
proceeds,” said Bill Conkling, CEO of Rafael Holdings. “We continue
to believe that the current dislocation in the capital markets and
in particular the biotech industry makes this a particularly
opportune time for us. Notably, during this period we invested in
Cyclo Therapeutics (Nasdaq: CYTH) in support of its Phase 3
registrational clinical trial for patients with Niemann-Pick
Disease Type C and in in Day Three Laboratories, a company which
reimagines existing cannabis offerings with pharmaceutical-grade
technology and innovation.”
Rafael Holdings, Inc. Fourth Quarter Fiscal Year 2023
Financial Results
As of July 31, 2023, we had cash, cash
equivalents and marketable securities of $79.2 million.
For the three months ended July 31, 2023, we incurred net income
from continuing operations of $1.3 million, or $0.06 per share. For
the same period in the prior year, we incurred a net loss from
continuing operations of $4.6 million, or $0.24 per share.
Research and development expenses were $1.3 million for the
quarter compared to $1.8 million in the year ago period. The year
over year reduction in spending is due to the winding down of
early-stage programs, including at Barer Institute.
Our general and administrative expenses from
continuing operations were $1.4 million for the three months ended
July 31, 2023, which includes $0.5 million in non-cash stock-based
compensation expense. For the same period in the prior year,
general and administrative expenses were $3.0 million which
included $1.0 million in non-cash stock-based compensation
expense.
Rafael Holdings, Inc. Full Year Fiscal Year 2023
Financial Results
For the twelve months ended July 31, 2023, we incurred a net
loss from continuing operations of $8.7 million, or $0.36 per
share. For the same period in the prior year, we incurred a net
loss from continuing operations of $140.5 million, or $6.22 per
share, which included a $25 million loss on the write-off of a
receivable pursuant to a line of credit, a loss of $10.1 million on
the write-off of a related party receivable and a $79.1 million
charge for the impairment of our investment in Cornerstone
Pharmaceuticals, Inc.
Research and development expenses were $6.3 million for the
twelve months ended July 31, 2023, which includes $0.5 million in
severance costs. For the same period in the prior year, research
and development expenses were $8.7 million.
Our general and administrative expenses were $8.9 million for
the twelve months ended July 31, 2023, which includes $0.4 million
in severance costs as well as $2.1 million net of non-cash
stock-based compensation expense. For the same period in the prior
year, general and administrative expenses were $17.0 million which
included $5.9 million in severance costs as well as a net, non-cash
credit of $1.5 million of stock-based compensation expense.
About Rafael Holdings, Inc.
Rafael Holdings is a holding company with
interests in clinical and early-stage pharmaceutical companies,
including an investment in Cornerstone Pharmaceuticals, Inc.,
formerly known as Rafael Pharmaceuticals Inc., a cancer
metabolism-based therapeutics company, a majority equity interest
in LipoMedix Pharmaceuticals Ltd., a clinical stage pharmaceutical
company, the Barer Institute Inc., a wholly-owned preclinical
cancer metabolism research operation, an investment in Cyclo
Therapeutics Inc. (Nasdaq: CYTH), a clinical-stage biotechnology
company dedicated to developing life-changing medicines for
patients and families living with challenging diseases through its
lead therapeutic asset, Trappsol® Cyclo™, an investment in Day
Three Labs, Inc., a company which reimagines existing cannabis
offerings with pharmaceutical-grade technology and innovation like
Unlokt™ to bring to market better, cleaner, more precise and
predictable products in the cannabis industry, and a majority
interest in Rafael Medical Devices, LLC, an orthopedic-focused
medical device company developing instruments to advance minimally
invasive surgeries. The Company’s primary focus is to expand our
investment portfolio through opportunistic and strategic
investments including therapeutics which address high unmet medical
needs.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including without limitation statements
regarding our expectations surrounding the potential, safety,
efficacy, and regulatory and clinical progress of our product
candidates; plans regarding the further evaluation of clinical
data; and the potential of our pipeline, including our internal
cancer metabolism research programs. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by the forward-looking statements, including, but not
limited to, the following: the impact of public health threats,
including COVID-19, on our business and operations; clinical trials
of product candidates may not be successful; our pharmaceutical
companies may not be able to develop any medicines of commercial
value; our pharmaceutical companies may not be successful in their
efforts to identify or discover potential product candidates; the
manufacturing and manufacturing development of our products and
product candidates present technological, logistical and regulatory
risks, each of which may adversely affect our potential revenue;
potential unforeseen events during clinical trials could cause
delays or other adverse consequences; risks relating to the
regulatory approval process; interim, topline and preliminary data
may change as more patient data become available, and are subject
to audit and verification procedures that could result in material
changes in the final data; our product candidates may cause serious
adverse side effects; ongoing regulatory obligations; effects of
significant competition; unfavorable pricing regulations,
third-party reimbursement practices or healthcare reform
initiatives; product liability lawsuits; failure to attract, retain
and motivate qualified personnel; the possibility of system
failures or security breaches; risks relating to intellectual
property and significant costs as a result of operating as a public
company. These and other important factors discussed under the
caption “Risk Factors” in our Annual Report on Form 10-K for the
year ended July 31, 2023, and our other filings with the SEC could
cause actual results to differ materially from those indicated by
the forward-looking statements made in this press release. Any such
forward-looking statements represent management’s estimates as of
the date of this press release. While we may elect to update such
forward-looking statements at some point in the future, we disclaim
any obligation to do so, even if subsequent events cause our views
to change.
Contact:Barbara
RyanBarbara.ryan@rafaelholdings.com (203) 274-2825
|
RAFAEL
HOLDINGS, INC. |
|
|
CONSOLIDATED
BALANCE SHEETS |
|
|
(audited, in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
July 31, 2023 |
|
July 31, 2022 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
21,498 |
|
|
$ |
26,537 |
|
|
|
Available-for-sale securities |
|
|
57,714 |
|
|
|
36,698 |
|
|
|
Interest receivable |
|
|
387 |
|
|
|
140 |
|
|
|
Convertible note receivable, related party |
|
|
1,921 |
|
|
|
- |
|
|
|
Trade accounts receivable, net of allowance for doubtful accounts
of $245 and $197 at July 31, 2023 and July 31, 2022,
respectively |
|
|
213 |
|
|
|
157 |
|
|
|
Prepaid expenses and other current assets |
|
|
914 |
|
|
|
4,621 |
|
|
|
Assets held for sale |
|
|
|
|
40,194 |
|
|
|
Investment in equity securities |
|
|
294 |
|
|
|
40,194 |
|
|
|
Total current assets |
|
|
82,941 |
|
|
|
148,541 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
1,695 |
|
|
|
1,770 |
|
|
|
Investments – Other Pharmaceuticals |
|
|
65 |
|
|
|
477 |
|
|
|
Investments – Hedge Funds |
|
|
4,984 |
|
|
|
4,764 |
|
|
|
Investments – Day Three Labs Inc. |
|
|
2,797 |
|
|
|
- |
|
|
|
Investments – Cyclo Therapeutics Inc. |
|
|
4,763 |
|
|
|
- |
|
|
|
In-process research and development and patents |
|
|
1,575 |
|
|
|
1,575 |
|
|
|
Other assets |
|
|
9 |
|
|
|
1,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
98,829 |
|
|
$ |
158,514 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Trade accounts payable |
|
$ |
333 |
|
|
$ |
564 |
|
|
|
Accrued expenses |
|
|
763 |
|
|
|
1,875 |
|
|
|
Other current liabilities |
|
|
1,023 |
|
|
|
3,518 |
|
|
|
Due to related parties |
|
|
26 |
|
|
|
69 |
|
|
|
Note payable, net of debt issuance costs |
|
|
- |
|
|
|
15,000 |
|
|
|
Total current liabilities |
|
|
2,145 |
|
|
|
21,026 |
|
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
55 |
|
|
|
88 |
|
|
|
TOTAL LIABILITIES |
|
$ |
2,200 |
|
|
$ |
21,114 |
|
|
|
|
|
|
|
|
|
|
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 July 31,
2023 and July 31, 2022, respectively |
|
|
8 |
|
|
|
8 |
|
|
|
Class B common stock, $0.01 par value; 200,000,000 shares
authorized, 23,635,709 issued and 23,490,527 outstanding as of July
31, 2022, and 23,712,449 issued and 23,687,964 outstanding as of
July 31, 2022 |
|
|
236 |
|
|
|
237 |
|
|
|
Additional paid-in capital |
|
|
264,010 |
|
|
|
262,023 |
|
|
|
Accumulated deficit |
|
|
(167,333 |
) |
|
|
(165,457 |
) |
|
|
Accumulated other comprehensive loss related to unrealized loss on
available-for-sale securities |
|
|
(353 |
) |
|
|
(63 |
) |
|
|
Accumulated
other comprehensive income related to foreign currency translation
adjustment |
|
|
3,725 |
|
|
|
3,767 |
|
|
|
Total equity
attributable to Rafael Holdings, Inc. |
|
|
100,293 |
|
|
|
100,515 |
|
|
|
Noncontrolling interests |
|
|
(3,664 |
) |
|
|
(3,309 |
) |
|
|
TOTAL EQUITY |
|
$ |
96,629 |
|
|
$ |
97,206 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
98,829 |
|
|
$ |
118,320 |
|
|
|
|
|
|
|
|
|
RAFAEL
HOLDINGS, INC. |
|
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS |
|
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(audited) |
|
|
For the three months ended |
|
For the the twelve months ended |
|
|
7/31/2023 |
|
7/31/2022 |
|
7/31/2023 |
|
7/31/2022 |
|
Revenues |
$ |
68 |
|
|
$ |
69 |
|
|
$ |
279 |
|
|
$ |
410 |
|
|
|
|
|
|
|
|
|
|
|
SG&A
Expenses |
|
1,395 |
|
|
|
3,048 |
|
|
|
8,932 |
|
|
|
16,978 |
|
|
R&D
Expenses |
|
1,266 |
|
|
|
1,841 |
|
|
|
6,312 |
|
|
|
8,742 |
|
|
Depreciation
and amortization |
|
18 |
|
|
|
18 |
|
|
|
78 |
|
|
|
72 |
|
|
Provision
for loss on receivable pursuant to line of credit |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
25,000 |
|
|
Provision
for losses on related party receivables |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,095 |
|
|
|
|
|
|
|
|
|
|
|
Operating
Loss |
|
(2,611 |
) |
|
|
(4,838 |
) |
|
|
(15,043 |
) |
|
|
(60,477 |
) |
|
Impairment
of cost method investment - Cornerstone Pharmaceuticals |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(79,141 |
) |
|
Unrealized
(loss) gain on investments - Hedge Funds |
|
100 |
|
|
|
80 |
|
|
|
220 |
|
|
|
(504 |
) |
|
Impairment
of investments - Other Pharmaceuticals |
|
17 |
|
|
|
- |
|
|
|
(334 |
) |
|
|
- |
|
|
Unrealized
gain on investments - Cyclo Therapeutics Inc. |
|
2,663 |
|
|
|
- |
|
|
|
2,663 |
|
|
|
- |
|
|
Other,
net |
|
1,294 |
|
|
|
113 |
|
|
|
3,749 |
|
|
|
150 |
|
|
Loss before
Incomes Taxes |
|
1,463 |
|
|
|
(4,645 |
) |
|
|
(8,745 |
) |
|
|
(139,972 |
) |
|
Taxes |
|
(4 |
) |
|
|
6 |
|
|
|
255 |
|
|
|
- |
|
|
Equity in
loss of Day Three Labs Inc. |
|
(203 |
) |
|
|
- |
|
|
|
(203 |
) |
|
|
- |
|
|
Equity in
earnings (loss) in equity of RP Finance |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(575 |
) |
|
Consolidated
net income (loss) from continuing operations |
|
1,256 |
|
|
|
(4,639 |
) |
|
|
(8,693 |
) |
|
|
(140,547 |
) |
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations |
|
|
|
|
|
|
|
|
Loss from
operations related to 520 Broad Street, net of tax |
|
(65 |
) |
|
|
(214 |
) |
|
|
(306 |
) |
|
|
(1,830 |
) |
|
Gain on
disposal of 520 Property |
|
- |
|
|
|
|
|
6,784 |
|
|
|
|
Loss on
discontinued operations |
|
(65 |
) |
|
|
(214 |
) |
|
|
6,478 |
|
|
|
(1,830 |
) |
|
|
|
|
|
|
|
|
|
|
Net (income)
loss |
|
1,191 |
|
|
|
(4,853 |
) |
|
|
(2,215 |
) |
|
|
(142,377 |
) |
|
Net (loss)
attributable to noncontrolling interests |
|
(28 |
) |
|
|
(69 |
) |
|
|
(339 |
) |
|
|
(17,719 |
) |
|
Net income
(loss) attributable to Rafael Holdings, Inc. |
$ |
1,163 |
|
|
$ |
(4,784 |
) |
|
$ |
(1,876 |
) |
|
$ |
(124,658 |
) |
|
|
|
|
|
|
|
|
|
|
Continuing
operations loss per share |
|
|
|
|
|
|
|
|
Net income
(loss) from continuing operations |
|
1,256 |
|
|
|
(4,639 |
) |
|
|
(8,693 |
) |
|
|
(140,547 |
) |
|
Net loss
attributable to noncontrolling interests |
|
(28 |
) |
|
|
(69 |
) |
|
|
(339 |
) |
|
|
(17,719 |
) |
|
Numerator
for loss per share from continuing operations |
$ |
1,284 |
|
|
$ |
(4,570 |
) |
|
$ |
(8,354 |
) |
|
$ |
(122,828 |
) |
|
|
|
|
|
|
|
|
|
|
Discontinued
operations loss per share |
|
|
|
|
|
|
|
|
Net income
(loss) from discontinued operations |
$ |
(65 |
) |
|
$ |
(214 |
) |
|
$ |
6,478 |
|
|
$ |
(1,830 |
) |
|
|
|
|
|
|
|
|
|
|
Income
(loss) per share |
|
|
|
|
|
|
|
|
Continuing
operations - basic and diluted |
|
0.06 |
|
|
|
(0.24 |
) |
|
|
(0.36 |
) |
|
|
(6.22 |
) |
|
Discontinued
operations - basic and diluted |
|
(0.00 |
) |
|
|
(0.01 |
) |
|
|
0.28 |
|
|
|
(0.09 |
) |
|
Loss per basic common share |
$ |
0.06 |
|
|
$ |
(0.24 |
) |
|
$ |
(0.08 |
) |
|
$ |
(6.31 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares in calculation |
|
22,263,211 |
|
|
|
19,767,342 |
|
|
|
22,263,211 |
|
|
|
19,767,342 |
|
|
|
|
|
|
|
|
|
|
|
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