Rafael Holdings, Inc. (NYSE: RFL), today reported its financial
results for the second quarter of fiscal 2024 – and the six months
ended January 31, 2024.
“During fiscal 2024, we will continue to focus
on advancing our existing portfolio and intend to leverage our
strong balance sheet with selective strategic investments in
companies with the potential to generate value for our
stockholders. We are extremely pleased to welcome Dr. John Goldberg
to the Rafael team as our Chief Medical Officer. John is a highly
respected senior executive with nearly two decades of experience in
drug development. John will be an integral member of our team, as
we advance our existing assets and evaluate additional
opportunities for investment,” said Bill Conkling, CEO of Rafael
Holdings. Bill added, “We are encouraged by the positive
developments for Cyclo Therapeutics’ (Nasdaq: CYTH) Phase 3
registrational clinical trial for patients with Niemann-Pick
Disease Type C and in the increasing momentum behind Day Three
Labs, which reimagines existing cannabis offerings with
pharmaceutical-grade technology to bring to market better, cleaner,
more precise and predictable products.”
Rafael Holdings, Inc. Second Quarter Fiscal Year 2024
Financial Results
As of January 31, 2024, we had cash, cash
equivalents and marketable securities of $71.7 million.
For the three months ended January 31, 2024, we
recorded net income from continuing operations of $5.9 million, or
$0.25 per fully diluted share versus a net loss from continuing
operations of $3.3 million, or $0.13 per share in the year ago
period. The net income reported during the second quarter was
driven by an unrealized gain of $9.7 million on our investments in
Cyclo Therapeutics, offset by a loss of $1.6 million on our initial
investment in Day Three Labs. During the second quarter of 2024, we
increased our investment in Day Three Labs and now hold a majority
interest in the company with 79% of the shares outstanding and
began consolidating its financial results in the second quarter of
2024.
For the three months ended January 31, 2024,
research and development expenses were $0.6 million compared to
$2.2 million in the year ago period. The year over year reduction
is due to the, previously disclosed, winding down of early-stage
programs, including at Barer Institute.
For the three months ended January 31, 2024,
general and administrative expenses from continuing operations were
$2.6 million. For the same period in the prior year, general and
administrative expenses were $2.1 million. The increase was
primarily related to increases in non-cash stock-based compensation
expenses and professional fees.
Rafael Holdings, Inc. First Half Fiscal Year 2024
Financial Results
For the six months ended January 31, 2024, we
recorded net income from continuing operations of $2.1 million, or
$0.10 per fully diluted share versus a net loss from continuing
operations of $8.5 million, or $0.36 per share in the year ago
period. The net income recorded during the first half of fiscal
2024 was driven by an unrealized gain of $7.6 million on our
investments in Cyclo Therapeutics, offset by a loss of $1.6 million
on our initial investment in Day Three Labs. During the second
quarter of 2024, we increased our investment in Day Three Labs and
now hold a majority interest in the company with 79% of the shares
outstanding and we began reporting consolidated its financial
results in January 2024.
For the six months ended January 31, 2024,
research and development expenses were $1.1 million compared to
$4.3 million in the year ago period. The year over year reduction
is due to the winding down of early-stage programs, including at
Barer Institute.
For the six months ended January 31, 2024,
general and administrative expenses from continuing operations were
$4.6 million. For the same period in the prior year, general and
administrative expenses were $5.2 million. The decrease was
primarily related to a decrease in non-cash stock-based
compensation and payroll expenses.
About Rafael Holdings, Inc.
Rafael Holdings is a holding company with
interests in clinical and early-stage pharmaceutical companies,
including a majority 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™, a majority 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, those disclosed 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. These factors 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 |
|
|
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
January 31, 2024 |
|
July 31, 2023 |
|
|
ASSETS |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
7,136 |
|
|
$ |
21,498 |
|
|
|
Available-for-sale securities |
|
|
64,587 |
|
|
|
57,714 |
|
|
|
Interest receivable |
|
|
560 |
|
|
|
387 |
|
|
|
Convertible note receivable, related party |
|
|
1,924 |
|
|
|
1,921 |
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $245
at January 31, 2024 and July 31, 2023 |
|
|
379 |
|
|
|
213 |
|
|
|
Prepaid expenses and other current assets |
|
|
487 |
|
|
|
914 |
|
|
|
Investment in equity securities |
|
|
— |
|
|
|
294 |
|
|
|
Total current assets |
|
|
75,073 |
|
|
|
82,941 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,064 |
|
|
|
1,695 |
|
|
|
Investments – Other Pharmaceuticals |
|
|
— |
|
|
|
65 |
|
|
|
Investments – Hedge Funds |
|
|
2,369 |
|
|
|
4,984 |
|
|
|
Investment – Day Three |
|
|
— |
|
|
|
2,797 |
|
|
|
Investments – Cyclo Therapeutics Inc. |
|
|
19,567 |
|
|
|
4,763 |
|
|
|
Goodwill |
|
|
3,571 |
|
|
|
— |
|
|
|
Intangible assets |
|
|
1,888 |
|
|
|
— |
|
|
|
In-process research and development |
|
|
1,575 |
|
|
|
1,575 |
|
|
|
Other assets |
|
|
42 |
|
|
|
9 |
|
|
|
TOTAL ASSETS |
|
$ |
106,149 |
|
|
$ |
98,829 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
Accounts payable |
|
$ |
509 |
|
|
$ |
333 |
|
|
|
Accrued expenses |
|
|
845 |
|
|
|
763 |
|
|
|
Other current liabilities |
|
|
140 |
|
|
|
1,023 |
|
|
|
Due to related parties |
|
|
69 |
|
|
|
26 |
|
|
|
Installment note payable |
|
|
1,700 |
|
|
|
— |
|
|
|
Total current liabilities |
|
|
3,263 |
|
|
|
2,145 |
|
|
|
|
|
|
|
|
|
|
Deferred income tax liabilities, net |
|
|
545 |
|
|
|
— |
|
|
|
Other liabilities |
|
|
87 |
|
|
|
55 |
|
|
|
TOTAL LIABILITIES |
|
$ |
3,895 |
|
|
$ |
2,200 |
|
|
|
|
|
|
|
|
|
|
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 January 31, 2024 and
July 31, 2023 |
|
|
8 |
|
|
|
8 |
|
|
|
Class B
common stock, $0.01 par value; 200,000,000 shares authorized,
23,882,117 issued and 23,695,332 outstanding (excluding treasury
shares of 101,487) as of January 31, 2024, and 23,708,365 shares
issued and 23,490,527 shares outstanding as of July 31, 2023 |
|
|
238 |
|
|
|
236 |
|
|
|
Additional paid-in capital |
|
|
266,159 |
|
|
|
264,010 |
|
|
|
Accumulated deficit |
|
|
(164,924 |
) |
|
|
(167,333 |
) |
|
|
Treasury
stock, at cost; 101,487 and 0 Class B shares as of January 31, 2024
and July 31, 2023, respectively |
|
|
(168 |
) |
|
|
— |
|
|
|
Accumulated
other comprehensive loss related to unrealized loss on
available-for-sale securities |
|
|
(88 |
) |
|
|
(353 |
) |
|
|
Accumulated
other comprehensive income related to foreign currency translation
adjustment |
|
|
3,714 |
|
|
|
3,725 |
|
|
|
Total
equity |
|
|
104,939 |
|
|
|
100,293 |
|
|
|
Noncontrolling interests |
|
|
(2,685 |
) |
|
|
(3,664 |
) |
|
|
TOTAL EQUITY ATTRIBUTABLE TO RAFAEL HOLDINGS,
INC. |
|
|
102,254 |
|
|
|
96,629 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
106,149 |
|
|
$ |
98,829 |
|
|
|
|
|
|
|
|
|
|
RAFAEL
HOLDINGS, INC. |
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) |
|
|
|
|
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
|
Three Months Ended January 31, |
|
Six Months Ended January 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
$ |
68 |
|
|
$ |
70 |
|
|
$ |
136 |
|
|
$ |
140 |
|
|
|
|
|
|
|
|
|
|
|
G&A
Expenses |
|
2,561 |
|
|
|
2,085 |
|
|
|
4,601 |
|
|
|
5,194 |
|
|
R&D
Expenses |
|
612 |
|
|
|
2,225 |
|
|
|
1,101 |
|
|
|
4,306 |
|
|
Depreciation
and amortization |
|
38 |
|
|
|
19 |
|
|
|
55 |
|
|
|
41 |
|
|
Operating
Loss |
|
(3,143 |
) |
|
|
(4,259 |
) |
|
|
(5,621 |
) |
|
|
(9,401 |
) |
|
Unrealized
gain (loss) on investments - Hedge Funds |
|
51 |
|
|
|
378 |
|
|
|
(115 |
) |
|
|
251 |
|
|
Impairment
of investments - Other Pharmaceuticals |
|
- |
|
|
|
(67 |
) |
|
|
- |
|
|
|
(223 |
) |
|
Loss on
initial investment in Day Three upon acquisition |
|
(1,633 |
) |
|
|
- |
|
|
|
(1,633 |
) |
|
|
- |
|
|
Unrealized
gain on investments - Cyclo Therapeutics Inc |
|
9,718 |
|
|
|
- |
|
|
|
7,594 |
|
|
|
|
Other,
net |
|
1,117 |
|
|
|
701 |
|
|
|
2,347 |
|
|
|
924 |
|
|
Income
(loss) before incomes taxes from continuing operations |
|
6,110 |
|
|
|
(3,247 |
) |
|
|
2,572 |
|
|
|
(8,449 |
) |
|
Benefit from
(provision for) taxes |
|
- |
|
|
|
(5 |
) |
|
|
(6 |
) |
|
|
(10 |
) |
|
Equity in
loss of Day Three |
|
(206 |
) |
|
|
- |
|
|
|
(422 |
) |
|
|
- |
|
|
Consolidated
net income (loss) from continuing operations |
|
5,904 |
|
|
|
(3,252 |
) |
|
|
2,144 |
|
|
|
(8,459 |
) |
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations |
|
|
|
|
|
|
|
|
Loss from
discontinued operations related to 520 Property |
|
- |
|
|
|
(157 |
) |
|
|
- |
|
|
|
(241 |
) |
|
Gain on
disposal of 520 Property |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,784 |
|
|
(Loss)
income from discontinued operations |
|
- |
|
|
|
(157 |
) |
|
|
- |
|
|
|
6,543 |
|
|
|
|
|
|
|
|
|
|
|
Consolidated
net income (loss) |
|
5,904 |
|
|
|
(3,409 |
) |
|
|
2,144 |
|
|
|
(1,916 |
) |
|
Net loss
attributable to noncontrolling interests |
|
(143 |
) |
|
|
(159 |
) |
|
|
(265 |
) |
|
|
(258 |
) |
|
Net income
(loss) attributable to Rafael Holdings, Inc. |
$ |
6,047 |
|
|
$ |
(3,250 |
) |
|
$ |
2,409 |
|
|
$ |
(1,658 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing
operations earnings (loss) per share |
|
|
|
|
|
|
|
|
Net income
(loss) from continuing operations |
$ |
5,904 |
|
|
$ |
(3,252 |
) |
|
$ |
2,144 |
|
|
$ |
(8,459 |
) |
|
Net loss
attributable to noncontrolling interests |
|
(143 |
) |
|
|
(159 |
) |
|
|
(265 |
) |
|
|
(258 |
) |
|
Numerator
for income (loss) per share from continuing operations |
$ |
6,047 |
|
|
$ |
(3,093 |
) |
|
$ |
2,409 |
|
|
$ |
(8,201 |
) |
|
|
|
|
|
|
|
|
|
|
Discontinued
operations earnings (loss) per share |
|
|
|
|
|
|
|
|
Net income
(loss) from discontinued operations |
$ |
- |
|
|
$ |
(157 |
) |
|
$ |
- |
|
|
$ |
6,543 |
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share - Basic |
|
|
|
|
|
|
|
|
Continuing
operations |
$ |
0.26 |
|
|
$ |
(0.13 |
) |
|
$ |
0.10 |
|
|
$ |
(0.36 |
) |
|
Discontinued
operations |
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
|
|
0.28 |
|
|
Total basic earnings (loss) per common share |
$ |
0.26 |
|
|
$ |
(0.14 |
) |
|
$ |
0.10 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per share - Diluted |
|
|
|
|
|
|
|
|
Continuing
operations |
$ |
0.25 |
|
|
$ |
(0.13 |
) |
|
$ |
0.10 |
|
|
$ |
(0.36 |
) |
|
Discontinued
operations |
|
- |
|
|
|
(0.01 |
) |
|
|
- |
|
|
|
0.28 |
|
|
Total diluted earnings (loss) per common share |
$ |
0.25 |
|
|
$ |
(0.14 |
) |
|
$ |
0.10 |
|
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares used in calculation of earnings (loss) per
share - basic |
|
23,642,421 |
|
|
|
23,155,018 |
|
|
|
23,643,660 |
|
|
|
23,085,612 |
|
|
Weighted
average number of shares used in calculation of earnings (loss) per
share - diluted |
|
24,402,069 |
|
|
|
23,155,018 |
|
|
|
24,403,308 |
|
|
|
23,085,612 |
|
|
|
|
|
|
|
|
|
|
|
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