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Rafael Holdings Reports Third Quarter Fiscal 2022 Financial Results

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Rafael Holdings, Inc.
Rafael Holdings, Inc.

NEWARK, N.J., June 14, 2022 (GLOBE NEWSWIRE) -- Rafael Holdings, Inc. (NYSE: RFL), an early-stage novel cancer and immune metabolism therapeutics company, today reported its financial results for the three and nine months ended April 30, 2022. The Company is focused on accelerating the development of its novel cancer and immune metabolism pipeline while exploring strategic opportunities to further enhance value.

“We are excited by the continuing progress our internal research and development team is making to advance our pipeline and our evolution into a focused drug company,” said Bill Conkling, CEO of Rafael Holdings. “We are fortunate that our research programs are being supported by a strong internal development team along with our highly regarded and engaged group of world class scientific advisors. We believe we are well positioned to advance our early-stage pipeline through meaningful value inflection points and to opportunistically pursue strategic business development opportunities.”

Rafael Holdings, Inc. Third Quarter Fiscal Year 2022 Financial Results

As of April 30, 2022, we had cash, cash equivalents and marketable securities of $59.4 million.

For the three months ended April 30, 2022, we incurred a net loss of $5.5 million, or $0.28 per share, which includes $1.0 million in non-cash stock-based compensation expense. For the same period in the prior year, we incurred a net loss of $2.6 million, or $0.15 per share, which includes $0.3 million in non-cash stock-based compensation expense.

Our revenues for the three months ended April 30, 2022, amounted to $0.9 million, compared to revenues of $1.0 million for the same period in the prior year.

Research and development expenses were $1.4 million for the three months ended April 30, 2022. For the same period in the prior year, R&D expenses were $1.3 million.

Our selling, general and administrative expenses were $3.9 million for the three months ended April 30, 2022. For the same period in the prior year, selling, general and administrative expenses were $3.0 million. The increase was primarily related to an increase of approximately $0.6 million in non-cash stock-based compensation as well as higher personnel costs.

Rafael Holdings, Inc. First Nine Months Fiscal Year 2022 Financial Results

For the nine months ended April 30, 2022, we incurred a net loss of $119.9 million or $6.16 per share, which includes a net, non-cash credit of $2.1 million in stock-based compensation expense and an impairment of cost method investment and losses from loans and receivables from Cornerstone Pharmaceuticals, Inc. (formerly Rafael Pharmaceuticals, Inc.) totaling $114.2 million. For the same period in the prior year, we incurred a net loss of $12.2 million, or $0.75 per share which included $1.0 million in non-cash stock-based compensation expense.

Our revenues for the nine months ended April 30, 2022, amounted to $3.0 million flat when compared to the same period in the prior year.

Research and development expenses were $6.9 million for the nine months ended April 30, 2022. For the same period in the prior year, R&D expenses were $3.3 million. The increase reflects the activities related to the advancement of our early-stage pipeline.

Our selling, general and administrative expenses were $15.9 million for the nine months ended April 30, 2022, which includes $5.9 million in severance costs as well as a net, non-cash credit of $2.5 million of stock-based compensation expense. For the same period in the prior year, selling, general and administrative expenses were $8.4 million. The increase was primarily driven by increased severance costs as well as increased personnel costs and professional fees.

About Rafael Holdings, Inc.

Rafael Holdings is focused on the discovery of novel cancer and immune metabolism therapeutics. The Company owns the Barer Institute, Inc. and has a significant investment in two clinical stage oncology companies, Cornerstone Pharmaceuticals (formerly Rafael Pharmaceuticals) and LipoMedix Pharmaceuticals. For more information, visit www.rafaelholdings.com.

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, 2021, 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 Ryan
Barbara.ryan@rafaelholdings.com
(203) 274-2825

 

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

April 30, 2022

 

July 31, 2021

 

 

(unaudited)

 

(audited)

ASSETS

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

Cash and cash equivalents

 

$

28,965

 

 

$

7,854

 

Restricted cash

 

 

-

 

 

 

5,000

 

Available-for-sale securities

 

 

30,407

 

 

 

-

 

Interest receivable

 

 

258

 

 

 

-

 

Trade accounts receivable, net of allowance for doubtful accounts of $186 and $193 at April 30, 2022
and July 31, 2021, respectively

 

 

631

 

 

 

235

 

Due from Rafael Pharmaceuticals, net of allowance for losses on related party receivables of $720 and $0
at April 30, 2022 and July 31, 2021, respectively

 

 

-

 

 

 

600

 

Prepaid expenses and other current assets

 

 

2,251

 

 

 

1,075

 

Total current assets

 

 

62,512

 

 

 

14,764

 

 

 

 

 

 

Property and equipment, net

 

 

42,183

 

 

 

43,238

 

Equity investment – RP Finance LLC

 

 

-

 

 

 

575

 

Due from RP Finance LLC, net of allowance for losses on related party receivables of $9,375 and $0 at
January 31, 2022 and July 31, 2021, respectively

 

 

-

 

 

 

7,500

 

Investments – Rafael Pharmaceuticals

 

 

-

 

 

 

79,141

 

Investments – Other Pharmaceuticals

 

 

477

 

 

 

477

 

Investments – Hedge Funds

 

 

4,684

 

 

 

5,268

 

In-process research and development and patents

 

 

1,575

 

 

 

1,575

 

Other assets

 

 

1,351

 

 

 

1,517

 

 

 

 

 

 

TOTAL ASSETS

 

$

112,782

 

 

$

154,055

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

Trade accounts payable

 

$

873

 

 

$

1,160

 

Accrued expenses

 

 

1,335

 

 

 

1,227

 

Amount due for purchase of membership interest

 

 

-

 

 

 

-

 

Other current liabilities

 

 

611

 

 

 

252

 

Due to related parties

 

 

69

 

 

 

136

 

Note payable, net of debt issuance costs

 

 

14,903

 

 

 

14,528

 

Total current liabilities

 

 

17,791

 

 

 

17,303

 

 

 

 

 

 

Deferred income tax liabilities, net

 

 

-

 

 

 

-

 

Other liabilities

 

 

85

 

 

 

48

 

TOTAL LIABILITIES

 

$

17,876

 

 

$

17,351

 

 

 

 

 

 

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 April 30, 2022 and July 31, 2021, respectively

 

 

8

 

 

 

8

 

Class B common stock, $0.01 par value; 200,000,000 shares authorized, 20,004,234 issued and
19,981,157 outstanding as of April 30, 2022, and 16,947,066 issued and 16,936,864 outstanding as of
July 31, 2021

 

 

200

 

 

 

169

 

Additional paid-in capital

 

 

254,892

 

 

 

159,136

 

Accumulated deficit

 

 

(160,673

)

 

 

(40,799

)

Accumulated other comprehensive loss related to unrealized loss on available-for-sale securities

 

 

(48

)

 

 

Accumulated other comprehensive income related to foreign currency translation adjustment

 

 

3,767

 

 

 

3,772

 

Total equity attributable to Rafael Holdings, Inc.

 

 

98,146

 

 

 

122,286

 

Noncontrolling interests

 

 

(3,240

)

 

 

14,418

 

TOTAL EQUITY

 

$

94,906

 

 

$

136,704

 

 

 

 

 

 

TOTAL LIABILITIES AND EQUITY

 

$

112,782

 

 

$

154,055

 

 

 

 

 

 


RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

(unaudited)

 

 

For the three months ended

 

For the nine months ended

 

 

4/30/2022

 

4/30/2021

 

4/30/2022

 

4/30/2021

Revenues

 

$

875

 

 

$

990

 

 

$

3,011

 

 

$

3,002

 

 

 

 

 

 

 

 

 

 

SG&A Expenses

 

 

3,940

 

 

 

3,006

 

 

 

15,936

 

 

 

8,365

 

R&D Expenses

 

 

1,413

 

 

 

1,262

 

 

 

6,901

 

 

 

3,345

 

Depreciation and amortization

 

 

379

 

 

 

201

 

 

 

1,142

 

 

 

1,079

 

Provision for loss on receivable pursuant to line of credit

 

 

-

 

 

 

-

 

 

 

25,000

 

 

 

-

 

Provision for losses on related party receivables

 

 

-

 

 

 

-

 

 

 

10,095

 

 

 

-

 

Impairment - Altira

 

 

-

 

 

 

-

 

 

 

-

 

 

 

7,000

 

Operating Loss

 

 

(4,857

)

 

 

(3,479

)

 

 

(56,063

)

 

 

(16,787

)

Impairment of cost method investment - Rafael Pharmaceuticals

 

 

-

 

 

 

-

 

 

 

(79,141

)

 

 

-

 

Unrealized gain on investments

 

 

(341

)

 

 

738

 

 

 

(584

)

 

 

4,171

 

Gain on sale of building

 

 

-

 

 

 

-

 

 

 

-

 

 

 

749

 

Impairment of investments - Other Pharmaceuticals

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(724

)

Other, net

 

 

(348

)

 

 

(1

)

 

 

(1,155

)

 

 

(2

)

Loss before Incomes Taxes

 

 

(5,546

)

 

 

(2,742

)

 

 

(136,943

)

 

 

(12,593

)

Taxes

 

 

(2

)

 

 

(4

)

 

 

(6

)

 

 

(13

)

Equity in earnings (loss) in equity of RP Finance

 

 

-

 

 

 

96

 

 

 

(575

)

 

 

288

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(5,548

)

 

 

(2,650

)

 

 

(137,524

)

 

 

(12,318

)

Net (loss) income attributable to noncontrolling interests

 

 

(19

)

 

 

(97

)

 

 

(17,650

)

 

 

(154

)

Net loss attributable to Rafael Holdings, Inc.

 

$

(5,529

)

 

$

(2,553

)

 

$

(119,874

)

 

$

(12,164

)

 

 

 

 

 

 

 

 

 

Loss Per Share

 

$

(0.28

)

 

$

(0.15

)

 

$

(6.16

)

 

$

(0.75

)

 

 

 

 

 

 

 

 

 

Weighted average shares in calculation

 

 

19,759,114

 

 

 

16,668,624

 

 

 

19,472,178

 

 

 

16,216,969