Rafael Holdings Reports Third Quarter Fiscal 2023 Financial Results and Provides Business Update
June 13 2023 - 4:01PM
Rafael Holdings, Inc. (NYSE: RFL) today reported its financial
results for the third quarter of fiscal 2023 for the three months
ended April 30, 2023, as well as the nine months ended April 30,
2023.
“We continue to seek to expand our portfolio
through strategic investments in companies with near term value
inflection points which have the potential to generate value for
our stockholders. We believe that the current dislocation in the
capital markets makes this a particularly opportune time,” said
Bill Conkling, CEO of Rafael Holdings. “In May and June, we made an
initial investment and entered into an agreement to make a
follow-on strategic investment in Cyclo Therapeutics in support of
a Phase 3 registrational clinical trial for patients with
Niemann-Pick Disease Type C.”
Rafael Holdings, Inc. Third Quarter Fiscal Year 2023
Financial Results
As of April 30, 2023, we had cash, cash
equivalents and marketable securities of $82.4 million.
For the three months ended April 30, 2023, we incurred a net
loss from continuing operations of $1.5 million, or $0.06 per
share. For the same period in the prior year, we incurred a net
loss from continuing operations of $5.0 million, or $0.25 per
share.
Research and development expenses were $0.7 million for the
three months ended April 30, 2023. For the same period in the prior
year, research and development expenses were $1.4 million. The year
over year reduction in spending is due to the winding down of the
early-stage programs, including at Barer Institute.
Our general and administrative expenses from
continuing operations were $2.3 million for the three months ended
April 30, 2023, which includes $0.6 million in non-cash stock-based
compensation expense. For the same period in the prior year,
general and administrative expenses were $3.3 million which
included $1.0 in non-cash stock-based compensation expense.
Rafael Holdings, Inc. Nine Month Fiscal Year 2023
Financial Results
For the nine months ended April 30, 2023, we incurred a net loss
from continuing operations of $9.9 million, or $0.42 per share. For
the same period in the prior year, we incurred a net loss from
continuing operations of $135.9 million, or $6.07 per share, which
included a $25 million loss on the write-off of a receivable
pursuant to a line of credit, a loss of $10.1 million on the
write-off of a related party receivable and a $79.1 million charge
for the impairment of our investment in Cornerstone
Pharmaceuticals, Inc.
Research and development expenses were $5.0 million for the nine
months ended April 30, 2023, which includes $0.5 million in
severance costs. For the same period in the prior year, research
and development expenses were $6.9 million.
Our general and administrative expenses were $7.5 million for
the nine months ended April 30, 2023, which includes $0.4 million
in severance costs as well as $1.6 million net, of non-cash
stock-based compensation expense. For the same period in the prior
year, general and administrative expenses were $13.9 million which
included $5.9 million in severance costs as well as a net, non-cash
credit of $2.1 million of stock-based compensation expense.
About Rafael Holdings, Inc.
Rafael Holdings is a holding company with
interests in clinical and early-stage pharmaceutical companies,
including an investment in Cornerstone Pharmaceuticals, Inc.,
formerly known as Rafael Pharmaceuticals Inc., a cancer
metabolism-based therapeutics company. The Company’s primary focus
is to invest in, fund, and develop novel cancer therapies. We
further seek to expand our portfolio through opportunistic
investments in therapeutics which address high unmet medical needs
including through acquisitions and strategic investments.
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, 2022, 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
RyanBarbara.ryan@rafaelholdings.com(203) 274-2825
RAFAEL
HOLDINGS, INC. |
CONSOLIDATED
BALANCE SHEETS |
(in
thousands, except share and per share data) |
|
|
|
|
|
|
|
April 30, 2023 |
|
July 31, 2022 |
|
|
(unaudited) |
|
(audited) |
ASSETS |
|
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
15,441 |
|
|
$ |
26,537 |
|
Available-for-sale securities |
|
|
66,962 |
|
|
|
36,698 |
|
Interest receivable |
|
|
352 |
|
|
|
140 |
|
Convertible note `receivable, related party |
|
|
1,898 |
|
|
|
- |
|
Accounts receivable, net of allowance for doubtful accounts of $180
and $197 at April 30, 2023 and July 31, 2022, respectively |
|
|
249 |
|
|
|
157 |
|
Prepaid expenses and other current assets |
|
|
146 |
|
|
|
4,621 |
|
Assets held-for-sale |
|
|
- |
|
|
|
40,194 |
|
Total current assets |
|
|
85,048 |
|
|
|
108,347 |
|
|
|
|
|
|
Property and equipment, net |
|
|
1,713 |
|
|
|
1,770 |
|
Investments – Other Pharmaceuticals |
|
|
126 |
|
|
|
477 |
|
Investments – Hedge Funds |
|
|
4,884 |
|
|
|
4,764 |
|
Investment - Day Three |
|
|
3,000 |
|
|
|
- |
|
In-process research and development and patents |
|
|
1,575 |
|
|
|
1,575 |
|
Other assets |
|
|
9 |
|
|
|
1,387 |
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
96,355 |
|
|
$ |
118,320 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Accounts payable |
|
$ |
616 |
|
|
$ |
564 |
|
Accrued expenses |
|
|
592 |
|
|
|
1,875 |
|
Other current liabilities |
|
|
174 |
|
|
|
3,518 |
|
Due to related parties |
|
|
29 |
|
|
|
69 |
|
Note payable, net of debt issuance costs, held-for-sale |
|
|
- |
|
|
|
15,000 |
|
Total current liabilities |
|
|
1,411 |
|
|
|
21,026 |
|
|
|
|
|
|
Other liabilities |
|
|
52 |
|
|
|
88 |
|
TOTAL LIABILITIES |
|
|
1,463 |
|
|
|
21,114 |
|
|
|
|
|
|
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,
2023 and July 31, 2022, respectively |
|
|
8 |
|
|
|
8 |
|
Class B common stock, $0.01 par value; 200,000,000 shares
authorized, 23,636,084 issued and 23,507,108 outstanding as of
April 30, 2023, and 23,712,449 issued and 23,687,964 outstanding as
of July 31, 2022, respectively |
|
|
236 |
|
|
|
237 |
|
Additional paid-in capital |
|
|
263,505 |
|
|
|
262,023 |
|
Accumulated deficit |
|
|
(168,552 |
) |
|
|
(165,457 |
) |
Accumulated other comprehensive loss related to unrealized loss on
available-for-sale securities |
|
|
(389 |
) |
|
|
(63 |
) |
Accumulated
other comprehensive income related to foreign currency translation
adjustment |
|
|
3,720 |
|
|
|
3,767 |
|
Total equity
attributable to Rafael Holdings, Inc. |
|
|
98,528 |
|
|
|
100,515 |
|
Noncontrolling interests |
|
|
(3,636 |
) |
|
|
(3,309 |
) |
TOTAL EQUITY |
|
|
94,892 |
|
|
|
97,206 |
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
96,355 |
|
|
$ |
118,320 |
|
|
|
|
|
|
|
RAFAEL HOLDINGS, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS) |
(in thousands, except share and per share
data) |
|
|
(unaudited) |
|
(unaudited) |
|
Three Months Ended April 30, |
|
Nine Months Ended April 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
$ |
71 |
|
|
$ |
76 |
|
|
$ |
211 |
|
|
$ |
341 |
|
|
|
|
|
|
|
|
|
G&A Expenses |
|
2,343 |
|
|
|
3,336 |
|
|
|
7,537 |
|
|
|
13,930 |
|
R&D Expenses |
|
740 |
|
|
|
1,413 |
|
|
|
5,046 |
|
|
|
6,901 |
|
Depreciation and amortization |
|
19 |
|
|
|
17 |
|
|
|
60 |
|
|
|
54 |
|
Provision for loss on receivable pursuant to line of credit |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
25,000 |
|
Provision for losses on related party receivables |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,095 |
|
Operating Loss |
|
(3,031 |
) |
|
|
(4,690 |
) |
|
|
(12,432 |
) |
|
|
(55,639 |
) |
Impairment of cost method investment - Cornerstone
Pharmaceuticals |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(79,141 |
) |
Unrealized (loss) gain on investments - Hedge Funds |
|
(131 |
) |
|
|
(341 |
) |
|
|
120 |
|
|
|
(584 |
) |
Impairment of investments - Other Pharmaceuticals |
|
(128 |
) |
|
|
- |
|
|
|
(351 |
) |
|
|
- |
|
Other, net |
|
1,531 |
|
|
|
50 |
|
|
|
2,455 |
|
|
|
37 |
|
Loss before Incomes Taxes from continuing operations |
|
(1,759 |
) |
|
|
(4,981 |
) |
|
|
(10,208 |
) |
|
|
(135,327 |
) |
Benefit from (provision for) taxes |
|
269 |
|
|
|
(2 |
) |
|
|
259 |
|
|
|
(6 |
) |
Equity in loss of RP Finance |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(575 |
) |
Consolidated net loss from continuing operations |
|
(1,490 |
) |
|
|
(4,983 |
) |
|
|
(9,949 |
) |
|
|
(135,908 |
) |
|
|
|
|
|
|
|
|
Discontinued Operations |
|
|
|
|
|
|
|
Loss from discontinued operations related to 520 Property |
|
- |
|
|
|
(565 |
) |
|
|
(241 |
) |
|
|
(1,616 |
) |
Gain on disposal of 520 Property |
|
- |
|
|
|
- |
|
|
|
6,784 |
|
|
|
- |
|
(Loss) income from discontinued operations |
|
- |
|
|
|
(565 |
) |
|
|
6,543 |
|
|
|
(1,616 |
) |
|
|
|
|
|
|
|
|
Consolidated net loss |
|
(1,490 |
) |
|
|
(5,548 |
) |
|
|
(3,406 |
) |
|
|
(137,524 |
) |
Net loss attributable to noncontrolling interests |
|
(53 |
) |
|
|
(19 |
) |
|
|
(311 |
) |
|
|
(17,650 |
) |
Net loss attributable to Rafael Holdings, Inc. |
$ |
(1,437 |
) |
|
$ |
(5,529 |
) |
|
$ |
(3,095 |
) |
|
$ |
(119,874 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations loss per share |
|
|
|
|
|
|
|
Net loss from continuing operations |
$ |
(1,490 |
) |
|
$ |
(4,983 |
) |
|
$ |
(9,949 |
) |
|
$ |
(135,908 |
) |
Net loss attributable to noncontrolling interests |
|
(53 |
) |
|
|
(19 |
) |
|
|
(311 |
) |
|
|
(17,650 |
) |
Numerator for loss per share from continuing operations |
$ |
(1,437 |
) |
|
$ |
(4,964 |
) |
|
$ |
(9,638 |
) |
|
$ |
(118,258 |
) |
|
|
|
|
|
|
|
|
Discontinued operations earnings (loss) per share |
|
|
|
|
|
|
|
Net income (loss) from discontinued operations |
$ |
- |
|
|
$ |
(565 |
) |
|
$ |
6,543 |
|
|
$ |
(1,616 |
) |
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
|
|
|
|
Continuing operations - basic and diluted |
$ |
(0.06 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.42 |
) |
|
$ |
(6.07 |
) |
Discontinued operations - basic and diluted |
|
- |
|
|
|
(0.03 |
) |
|
|
0.28 |
|
|
|
(0.09 |
) |
Total basic and diluted earnings (loss) per
common share |
$ |
(0.06 |
) |
|
$ |
(0.28 |
) |
|
$ |
(0.14 |
) |
|
$ |
(6.16 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in calculation of earnings
(loss) per share, basic and diluted |
|
23,372,136 |
|
|
|
19,759,114 |
|
|
|
23,179,364 |
|
|
|
19,472,178 |
|
|
|
|
|
|
|
|
|
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