EX-99.1 2 ea119348ex99-1_rafaelhold.htm PRESS RELEASE, DATED MARCH 5, 2020, REPORTING THE RESULTS OF OPERATIONS FOR THE FISCAL QUARTER ENDED JANUARY 31, 2020.

Exhibit 99.1

 

 

 

Rafael Holdings Reports Second Quarter Fiscal Year 2020 Results

 

NEWARK, NJ – March 5, 2020: 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.

 

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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

 

Contact:
Rafael Holdings

David Polinsky

Chief Financial Officer

P: (212) 658-1450

E: invest@rafaelholdings.com

 

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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 January 31, 2020 and July 31, 2019, respectively   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 issued and outstanding as of January 31, 2020 and July 31, 2019   8    8 
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,020,485 and 13,142,502 shares issued and outstanding as of January 31, 2020 and July 31, 2019, respectively   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 

 

 

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RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited, in thousands, except share and per share data)

 

   Three Months Ended
January 31,
   Six Months Ended
January 31,
 
   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 interests   (18)   15    (16)   23 
Total Comprehensive Loss attributable to Rafael Holdings, Inc.  $(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 loss per share:                    
Basic and diluted   15,790,400    13,489,583    15,715,442    12,634,389 

 

 

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RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands) 

 

   Six Months Ended
January 31,
 
   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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