EX-99.1 2 ea164994ex99-1_rafaelhold.htm UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AS OF APRIL 30, 2022, AND UNAUDITED PRO FORMA CONSOLIDATED

Exhibit 99.1

 

RAFAEL HOLDINGS, INC.

PRO FORMA FINANCIAL INFORMATION

(Unaudited)

 

The following unaudited pro forma consolidated financial statements have been prepared to provide pro forma information with regard to a real estate disposition. The unaudited pro forma consolidated financial statements should be read in conjunction with Rafael Holdings, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended July 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on October 18, 2021, and Form 10-Q for the three months ended April 30, 2022 filed with the SEC on June 14, 2022.

 

On August 22, 2022, Broad Atlantic Associates, LLC (the “Seller”), a wholly-owned subsidiary of the Company, completed the sale of the building owned by the Seller located at 520 Broad Street in Newark, New Jersey, and an associated 800-car public garage (the “Property”) to 520 Broad Holdings LLC, 26 Lombardy Holdings LLC and 1073 McCarter Holdings LLC, entities owned by The Sinai Equity Group (the “Buyer”) for a purchase price of $49.4 million. The Property served as the Company’s headquarters and has several tenants.

 

The Property was encumbered by a mortgage securing a $15 million loan which was paid off in this transaction. After repaying the loan, commissions, taxes, and other related costs, the Company received a net cash amount of approximately $33 million at closing.

 

The accompanying unaudited pro forma consolidated balance sheet as of April 30, 2022 has been prepared to give effect to the disposition of certain assets and liabilities related to the Property as if it had been completed on April 30, 2022. The unaudited pro forma consolidated statements of operations for the nine months ended April 30, 2022 and for the year ended July 31, 2021 gives effect to the disposition as if it had been completed on August 1, 2020.

 

The unaudited pro forma consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information, as amended by the final rule, Amendments to Financial Disclosures about Acquired and Disposed Businesses, as adopted by the SEC in May 2020 (“Article 11”). These unaudited pro forma consolidated financial statements were prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved by the Company had the disposition of the Property been consummated as of the dates indicated.

 

 

 

 

RAFAEL HOLDINGS, INC.

PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF APRIL 30, 2022

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

 

   Historical As
Reported		   Transaction
Accounting
Adjustments		   Pro Forma 
ASSETS            
CURRENT ASSETS            
Cash and cash equivalents  $28,965   $33,032(a)  $61,997 
Restricted cash   —    —    — 
Available-for-sale securities   30,407    —    30,407 
Interest receivable   258    —    258 
Trade accounts receivable, net of allowance for doubtful accounts of $186 and $193 at April 30, 2022 and July 31, 2021, respectively   631    —    631 
Prepaid expenses and other current assets   2,251    (375)(b)   1,876 
Total current assets   62,512    32,657    95,169 
                
Property and equipment, net   42,183    (40,396)(c)   1,787 
Investments – Other Pharmaceuticals   477    —    477 
Investments – Hedge Funds   4,684    —    4,684 
In-process research and development and patents   1,575    —    1,575 
Other assets   1,351    —    1,351 
TOTAL ASSETS  $112,782   $(7,739)  $105,043 
                
LIABILITIES AND EQUITY               
                
CURRENT LIABILITIES               
Trade accounts payable  $873   $—   $873 
Accrued expenses   1,335    —    1,335 
Other current liabilities   611    (375)(b)   236 
Due to related parties   69    —    69 
Note payable, net of debt issuance costs   14,903    (14,903)(d)   — 
Total current liabilities   17,791    (15,278)   2,513 
                
Other liabilities   85    —    85 
TOTAL LIABILITIES   17,876    (15,278)   2,598 
                
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    —    200 
Additional paid-in capital   254,892         254,892 
Accumulated deficit   (160,673)   7,539(e)   (153,134)
Accumulated other comprehensive loss related to unrealized loss on available-for-sale securities   (48)   —    (48)
Accumulated other comprehensive income related to foreign currency translation adjustment   3,767    —    3,767 
Total equity attributable to Rafael Holdings, Inc.   98,146    7,539    105,685 
Noncontrolling interests   (3,240)   —    (3,240)
TOTAL EQUITY   94,906    7,539    102,445 
TOTAL LIABILITIES AND EQUITY  $112,782   $(7,739)  $105,043 

 

(a)Adjustment to reflect gross cash consideration of $49.4 million received in the transaction, net of repayment of the loan of $15 million, commissions, taxes, and transaction costs incurred in connection with the closing, for a total net proceeds of approximately $33 million.

(b)Adjustment to derecognize approximately $0.4 million deposit held in escrow in connection with the closing of the Property.

(c)Adjustment to reflect the disposition of the Property sold in the transaction

(d)Adjustment to derecognize liabilities, and payoff of a loan of $15 million secured by the Property.

(e)Adjustment to reflect the impact of the estimated gain on sale and transaction costs.

 

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RAFAEL HOLDINGS, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE NINE MONTHS ENDED APRIL 30, 2022

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

 

   Historical As
Reported		   Transaction
Accounting
Adjustments		   Pro Forma 
REVENUE            
Rental – Third Party  $624   $(487)(a)  $137 
Rental – Related Party   1,749    (1,665)(a)   84 
Parking   518    (518)(a)   — 
Other – Related Party   120    —    120 
Total revenue   3,011    (2,670)   341 
                
COSTS AND EXPENSES               
Selling, general and administrative   15,936    (2,006)(b)   13,930 
Research and development   6,901    —    6,901 
Depreciation and amortization   1,142    (1,088)(c)   54 
Provision for loss on receivable pursuant to line of credit   25,000    —    25,000 
Provision for losses on related party receivables   10,095    —    10,095 
Loss from operations   (56,063)   424    (55,639)
                
Interest (expense) income, net   (1,153)   1,289(d)   136 
Impairment of cost method investment - Cornerstone Pharmaceuticals (f/k/a Rafael Pharmaceuticals)   (79,141)   —    (79,141)
Loss on available-for-sale securities   (2)   —    (2)
Unrealized loss on investments - Hedge Funds   (584)   —    (584)
Loss before income taxes   (136,943)   1,713    (135,230)
Provision for income taxes   (6)   —    (6)
Equity in loss of RP Finance   (575)   —    (575)
Consolidated net loss   (137,524)   1,713    (135,811)
Net loss attributable to noncontrolling interests   (17,650)   —    (17,650)
Net loss attributable to Rafael Holdings, Inc.  $(119,874)  $1,713   $(118,161)
                
Loss per share               
Basic and diluted  $(6.16)       $(6.07)
                
Weighted average number of shares used in calculation of loss per share   —         — 
Basic and diluted   19,472,178         19,472,178 

 

(a)Adjustment to remove rental revenue received from tenants at the Property.

(b)Adjustment to selling, general and administrative expenses for operating costs on the Property.

(c)Adjustment to remove historical depreciation expense on the Property.

(d)Adjustment to remove interest expense incurred on the $15 million loan secured by the Property.

 

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RAFAEL HOLDINGS, INC.

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE YEAR ENDED JULY 31, 2021

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

 

   Historical As
Reported		   Transaction
Accounting
Adjustments		   Pro Forma 
REVENUES            
Rental – Third Party  $890   $(676)(a)  $214 
Rental – Related Party   2,099    (1,991)(a)   108 
Parking   502    (502)(a)   — 
Other – Related Party   480    —    480 
Total Revenue   3,971    (3,169)   802 
                
COSTS AND EXPENSES               
Selling, general and administrative   20,416    (3,391)(b)   17,025 
Research and development   4,907    —    4,907 
Depreciation and amortization   1,460    (1,390)(c)   70 
Impairment - Altira   7,000    —    7,000 
Loss from operations   (29,812)   1,612    (28,200)
                
Interest expense, net   (102)   92(d)   (10)
Gain on sale of building   749    —    749 
Impairment of investments - Other Pharmaceuticals   (724)   —    (724)
Unrealized gain on investments - Hedge Funds   4,758    —    4,758 
Loss before income taxes   (25,131)   1,704    (23,427)
Provision for income taxes   (18)   —    (18)
Equity in earnings of RP Finance   383    —    383 
Consolidated net loss   (24,766)   1,704    (23,062)
Net loss attributable to noncontrolling interests   (222)   —    (222)
Net loss attributable to Rafael Holdings, Inc.  $(24,544)  $1,704   $(22,840)
                
Loss per share               
Basic and Diluted  $(1.49)       $(1.38)
                
Weighted average number of shares used in calculation of loss per share               
Basic and Diluted   16,522,686         16,522,686 

 

(a)Adjustment to remove rental revenue received from tenants at the Property.

(b)Adjustment to selling, general and administrative expenses for operating costs on the Property.

(c)Adjustment to remove historical depreciation expense on the Property.

(d)Adjustment to remove interest expense incurred on the $15 million loan secured by the Property.

 

 

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