EX-99.1 2 f8k100319ex99-1_rafaelhold.htm PRESS RELEASE, DATED OCTOBER 3, 2019, REPORTING THE RESULTS OF OPERATIONS FOR THE FISCAL QUARTER AND FISCAL YEAR ENDED JULY 31, 2019

Exhibit 99.1

 

 

 

Rafael Holdings Reports Fourth Quarter and Full Fiscal Year 2019 Results

 

NEWARK, NJ – October 3, 2019: Rafael Holdings, Inc., (NYSE American: RFL), reported revenue of $4.9 million and a loss per share of $0.35 for the fiscal year ended July 31, 2019. Fourth quarter revenue was $1.4 million and the loss per share was $0.16.

  

Recent Operational Highlights

 

● Rafael Pharmaceuticals, a clinical-stage pharmaceutical company in which the Company holds preferred equity and a warrant to increase ownership to 56% of the fully diluted equity interests, reached an out-licensing agreement with Ono Pharmaceutical Co., Ltd. of Japan. Ono gained exclusive rights to develop and commercialize Rafael Pharma’s lead drug candidate, CPI-613® (devimistat) and related compounds for all indications in certain Asia-Pacific region countries. Rafael Pharma received an upfront payment of $12.9 million, with the right to an additional $150.3 million contingent on attainment of certain developmental and commercial milestones. Rafael Pharma will also receive low-double digit royalties based on net sales.

 

● Rafael Pharma continued to expand its pivotal Phase 3 trial of CPI-613® (devimistat) for patients with relapsed or refractory acute myeloid leukemia (AML) adding clinical trial sites in France, Austria, South Korea and Spain.

 

● Rafael Pharma continued to expand its pivotal Phase 3 trial of CPI-613® (devimistat) in combination with modified FOLFIRINOX as a first-line treatment for patients with metastatic pancreatic cancer adding clinical trial sites in France, Korea and Israel.

 

● Future Oncology, a peer-reviewed medical journal, published two manuscripts about the details of ongoing Phase 2 and Phase 3 studies at Rafael Pharma.

 

● LipoMedix Pharmaceuticals, a clinical-stage company in which we hold a majority interest, was awarded a Horizon 2020 Phase 1 grant for the project: Promitil® - a new ‘smart’ nanomedicine for cancer chemo-radiotherapy. Horizon 2020 is a research and innovation program of the European Union.

 

Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings

 

“During the fourth quarter, our key pharma holding, Rafael Pharma, continued to advance its clinical development programs, including pivotal, multi-jurisdictional, Phase 3 trials of CPI-613® (devimistat). Rafael Pharma also reached an out-licensing agreement with Ono Pharmaceuticals reflecting the promise of Rafael Pharma’s lead drug candidate.

 

“In addition, we have established a wholly-owned venture to develop a pipeline of therapeutic compounds including compounds to regulate cancer metabolism.  The venture is pursuing collaborative research agreements with scientists from top academic institutions.

 

“We also continue our efforts to realize the value of our real estate holdings including our 20-story commercial property and associated garage in Newark, New Jersey.”

 

About Rafael Holdings, Inc.:

 

Rafael Holdings, Inc., (“Rafael Holdings” or “the Company”), a Delaware corporation, owns interests in commercial real estate assets and clinical-stage pharmaceutical companies. The commercial real estate holdings consist of properties in Newark, New Jersey, Piscataway, New Jersey and in Israel. The pharmaceutical holdings include interests in Rafael Pharmaceuticals, Inc., a clinical-stage, oncology-focused, pharmaceutical company and in LipoMedix Pharmaceuticals Ltd., a clinical-stage oncology-focused pharmaceutical company based in Israel.

 

Contact:
Rafael Holdings

David Polinsky

Chief Financial Officer

P: (212) 658-1450

E: invest@rafaelholdings.com

  

 

 

 

RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

   July 31, 
   2019   2018 
ASSETS        
         
CURRENT ASSETS        
Cash and cash equivalents  $12,024   $15,803 
Trade accounts receivable, net of allowance for doubtful accounts of $122 and $82 at July 31, 2019 and 2018, respectively   450    287 
Marketable securities   —    24,701 
Due from Rafael Pharmaceuticals   280    3,300 
Prepaid expenses and other current assets   507    421 
Total current assets   13,261    44,512 
           
Property and equipment, net   48,733    50,113 
Investments – Rafael Pharmaceuticals   70,018    13,300 
Investments – Other Pharmaceuticals   2,000    2,000 
Investments – Hedge Funds   5,125    4,218 
Deferred income tax assets, net   19    — 
In-process research and development and patents   1,575    1,651 
Other assets   1,412    1,126 
           
TOTAL ASSETS  $142,143   $116,920 
           
LIABILITIES AND EQUITY          
           
CURRENT LIABILITIES          
Trade accounts payable  $795   $367 
Accrued expenses   605    500 
Other current liabilities   27    24 
Total current liabilities   1,427    891 
           
Due to Related Parties   65    276 
Convertible debt, net of discount of $54 – Related Party   14,946    — 
Other liabilities   292    188 
Accrued interest on convertible note – Related Party   649    — 
TOTAL LIABILITIES   17,379    1,355 
           
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 July 31, 2019 and 2018, respectively   8    8 
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 13,142,502 and 11,762,346 shares issued and outstanding as of July 31, 2019 and 2018, respectively   131    118 
Additional paid-in capital   112,898    103,636 
Accumulated deficit   (5,840)   (1,108)
Accumulated other comprehensive income   3,784    4,043 
Total equity attributable to Rafael Holdings, Inc.   110,981    106,697 
Noncontrolling interests   13,783    8,868 
TOTAL EQUITY   124,764    115,565 
           
TOTAL LIABILITIES AND EQUITY  $142,143   $116,920 

  

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RAFAEL HOLDINGS, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share data)

  

   Year Ended July 31, 
   2019   2018 
REVENUES:        
Rental – Third Party  $1,452   $1,275 
Rental – Related Party   2,125    2,223 
Parking   874    873 
Other – Related Party   480    — 
Total Revenue   4,931    4,371 
           
COSTS AND EXPENSES:          
Selling, general and administrative   8,821    5,519 
Research and development   1,027    995 
Depreciation and amortization   1,779    1,698 
Loss from operations   (6,696)   (3,841)
           
Interest income, net   469    16 
Net gains resulting from foreign exchange transactions   47    32 
Net loss on equity investments   —    (104)
Gain on sales of marketable securities   330    12 
Unrealized gain on Investments – Hedge Funds   907    — 
Gain on disposal of bonus shares   —    246 
Loss before income taxes   (4,943)   (3,639)
Benefit from (provision for) income taxes   19    (8,437)
Net Loss   (4,924)   (12,076)
Net loss attributable to noncontrolling interests   (231)   (427)
Net loss attributable to Rafael Holdings, Inc.  $(4,693)  $(11,649)
           
OTHER COMPREHENSIVE LOSS          
Net Loss  $(4,924)  $(12,076)
Unrealized loss on marketable securities   —    (308)
Unrealized gain on available-for-sale securities   —    1,869 
Foreign currency translation adjustments   298    166 
Total Comprehensive Loss   (4,626)   (10,349)
Comprehensive income (loss) attributable to noncontrolling interests   173    (107)
Total Comprehensive Loss attributable to Rafael Holdings, Inc.  $(4,453)  $(10,456)
           
Loss per share attributable to Rafael Holdings, Inc. common stockholders:          
Basic and diluted  $(0.35)  $(0.93)
           
Weighted average number of shares used in calculation of loss per share:          
Basic and diluted   13,275,239    12,485,000 

   

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RAFAEL HOLDINGS, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(in thousands, except share data)

 

   Year Ended July 31, 
   2019   2018 
Operating activities        
Net loss  $(4,924)  $(12,076)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization   1,779    1,698 
Deferred income taxes   (19)   8,859 
Interest income on Rafael Pharmaceuticals Series D Convertible Note   (848)   — 
Interest income   (37)   — 
Net realized and unrealized gain on sale of marketable securities   (330)   — 
Net realized and unrealized gain on Investments - Hedge Funds   (907)   — 
Provision for doubtful accounts   122    — 
Non-cash compensation   372    104 
Amortization of debt discount   17    657 
Realized gain on disposal of bonus shares   —    (246)
Loss on disposal of fixed assets   —    13 
Net gain resulting from foreign exchange transactions   —    (32)
           
Change in assets and liabilities:          
Trade accounts receivable   (285)   (23)
Other current assets and prepaid expenses   (86)   (258)
Write off of patents   76    — 
Other assets   275    (586)
Accounts payable and accrued expenses   533    (35)
Other current liabilities   3    (10)
Due to Related Party   654    2 
Due from Related Party   (280)   — 
Accrued Interest - Related Party   649    — 
Other liabilities   104    118 
Net cash used in operating activities   (3,132)   (1,815)
           
Investing activities          
Purchases of property and equipment   (399)   (710)
Proceeds from sale and maturity of marketable securities   25,031    6,670 
Purchase of investments   —    (151)
Cash advances to IDT Corporation, net of repayments   —    (1,700)
Investment in Rafael Pharmaceuticals   (55,870)   — 
Net cash (used in) provided by investing activities   (31,238)   4,109 
           
Financing activities          
Contribution from noncontrolling interest of consolidated entity   4,587    — 
Repayment of loan by Rafael Pharmaceuticals, including interest   3,335    — 
Proceeds from sale of shares   7,777    — 
Proceeds from exercise of options   190    864 
Cash advances from IDT Corporation, net of repayments   —    886 
Proceeds from issuance of convertible note   15,000    — 
Net cash provided by financing activities   30,889    1,750 
Effect of exchange rate changes on cash and cash equivalents   (298)   3 
Net (decrease) increase in cash and cash equivalents   (3,779)   4,047 
Cash and cash equivalents at beginning of year   15,803    11,756 
Cash and cash equivalents at end of year  $12,024   $15,803 
           
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   $— 
Series D Convertible Note and accrued interest converted to Series D Preferred Stock  $10,848   $— 
Related Party deposit utilized to purchase Class B Common Stock  $864   $— 
Cash payments made for taxes  $—   $— 
Cash payments made for interest  $—   $— 

 

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