Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 30, 2023

RAFAEL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		1-38411		82-2296593
(State or other jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

520 Broad Street

Newark, New Jersey

07102

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: 212 658-1450

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b)-2 of the Exchange Act:

Title of each class

Trading Symbol

Name of each exchange on

which registered

Class B common stock, par value $0.01 per share

RFL

New York Stock Exchange

Item 2.02. Results of Operations and Financial Condition.

On October 30, 2023, Rafael Holdings, Inc. (the “Company”) distributed over a wire service and posted an earnings release to the investors page of its website (www.rafaelholdings.com) announcing its results of operations for the fiscal quarter and fiscal year ended July 31, 2023. A copy of the earnings release concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The Company is furnishing the information contained in this Report, including Exhibit 99.1, pursuant to Item 2.02 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC unless otherwise expressly stated in such filing. In addition, this Report and the press release contain statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in the press release.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits.

Exhibit No.		Document
99.1		Press Release, dated October 30, 2023, reporting the results of operations for the fiscal quarter and fiscal year ended July 31, 2023.
104		Cover Page Interactive Data File, formatted in Inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

RAFAEL HOLDINGS, INC.

By:	/s/ William Conkling
	Name:	William Conkling
	Title:	Chief Executive Officer

Dated: October 30, 2023

EXHIBIT INDEX

Exhibit No.		Document
99.1		Press Release, dated October 30, 2023, reporting the results of operations for the fiscal quarter and fiscal year ended July 31, 2023.
104		Cover Page Interactive Data File, formatted in Inline XBRL document.

Exhibit 99.1

Rafael Holdings Reports Fourth Quarter and Full Year Fiscal 2023 Financial Results

Company positions itself to generate value for its stockholders by curtailing expenses while increasing investment in strategic opportunities

NEWARK, NJ – October 30, 2023 (GLOBE NEWSWIRE) - Rafael Holdings, Inc. (NYSE: RFL), today reported its financial results for the fourth quarter and full year of fiscal 2023 - the three and twelve months ended July 31, 2023.

“During fiscal 2023, we made meaningful progress toward expanding our portfolio through strategic investments in companies which have the potential to generate value for our stockholders. We greatly curtailed our expenses with the suspension of activities at Barer Institute while increasing our liquidity by selling our principal real estate holding for $33 million in net proceeds,” said Bill Conkling, CEO of Rafael Holdings. “We continue to believe that the current dislocation in the capital markets and in particular the biotech industry makes this a particularly opportune time for us. Notably, during this period we invested in Cyclo Therapeutics (Nasdaq: CYTH) in support of its Phase 3 registrational clinical trial for patients with Niemann-Pick Disease Type C and in in Day Three Laboratories, a company which reimagines existing cannabis offerings with pharmaceutical-grade technology and innovation.”

Rafael Holdings, Inc. Fourth Quarter Fiscal Year 2023 Financial Results

As of July 31, 2023, we had cash, cash equivalents and marketable securities of $79.2 million.

For the three months ended July 31, 2023, we incurred net income from continuing operations of $1.3 million, or $0.06 per share. For the same period in the prior year, we incurred a net loss from continuing operations of $4.6 million, or $0.24 per share.

Research and development expenses were $1.3 million for the quarter compared to $1.8 million in the year ago period. The year over year reduction in spending is due to the winding down of early-stage programs, including at Barer Institute.

Our general and administrative expenses from continuing operations were $1.4 million for the three months ended July 31, 2023, which includes $0.5 million in non-cash stock-based compensation expense. For the same period in the prior year, general and administrative expenses were $3.0 million which included $1.0 million in non-cash stock-based compensation expense.

Rafael Holdings, Inc. Full Year Fiscal Year 2023 Financial Results

For the twelve months ended July 31, 2023, we incurred a net loss from continuing operations of $8.7 million, or $0.36 per share. For the same period in the prior year, we incurred a net loss from continuing operations of $140.5 million, or $6.22 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 $6.3 million for the twelve months ended July 31, 2023, which includes $0.5 million in severance costs. For the same period in the prior year, research and development expenses were $8.7 million.

Our general and administrative expenses were $8.9 million for the twelve months ended July 31, 2023, which includes $0.4 million in severance costs as well as $2.1 million net of non-cash stock-based compensation expense. For the same period in the prior year, general and administrative expenses were $17.0 million which included $5.9 million in severance costs as well as a net, non-cash credit of $1.5 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, a majority equity interest in LipoMedix Pharmaceuticals Ltd., a clinical stage pharmaceutical company, the Barer Institute Inc., a wholly-owned preclinical cancer metabolism research operation, an investment in Cyclo Therapeutics Inc. (Nasdaq: CYTH), a clinical-stage biotechnology company dedicated to developing life-changing medicines for patients and families living with challenging diseases through its lead therapeutic asset, Trappsol^®Cyclo™, an investment in Day Three Labs, Inc., a company which reimagines existing cannabis offerings with pharmaceutical-grade technology and innovation like Unlokt™ to bring to market better, cleaner, more precise and predictable products in the cannabis industry, and a majority interest in Rafael Medical Devices, LLC, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics which address high unmet medical needs.

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, 2023, 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

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

	July 31, 2023			July 31, 2022

ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	21,498		$	26,537
Available-for-sale securities		57,714			36,698
Interest receivable		387			140
Convertible note receivable, related party		1,921			-
Trade accounts receivable, net of allowance for doubtful accounts of $245 and $197 at July 31, 2023 and July 31, 2022, respectively		213			157
Prepaid expenses and other current assets		914			4,621
Assets held for sale		-			40,194
Investment in equity securities		294			40,194
Total current assets		82,941			148,541

Property and equipment, net		1,695			1,770
Investments – Other Pharmaceuticals		65			477
Investments – Hedge Funds		4,984			4,764
Investments – Day Three Labs Inc.		2,797			-
Investments – Cyclo Therapeutics Inc.		4,763			-
In-process research and development and patents		1,575			1,575
Other assets		9			1,387

TOTAL ASSETS	$	98,829		$	158,514

LIABILITIES AND EQUITY

CURRENT LIABILITIES
Trade accounts payable	$	333		$	564
Accrued expenses		763			1,875
Other current liabilities		1,023			3,518
Due to related parties		26			69
Note payable, net of debt issuance costs		-			15,000
Total current liabilities		2,145			21,026

Other liabilities		55			88
TOTAL LIABILITIES	$	2,200		$	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 July 31, 2023 and July 31, 2022, respectively		8			8
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 23,635,709 issued and 23,490,527 outstanding as of July 31, 2022, and 23,712,449 issued and 23,687,964 outstanding as of July 31, 2022		236			237
Additional paid-in capital		264,010			262,023
Accumulated deficit		(167,333	)		(165,457	)
Accumulated other comprehensive loss related to unrealized loss on available-for-sale securities		(353	)		(63	)
Accumulated other comprehensive income related to foreign currency translation adjustment		3,725			3,767
Total equity attributable to Rafael Holdings, Inc.		100,293			100,515
Noncontrolling interests		(3,664	)		(3,309	)
TOTAL EQUITY	$	96,629		$	97,206

TOTAL LIABILITIES AND EQUITY	$	98,829		$	118,320

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

	(unaudited)						(audited)
	For the three months ended						For the the twelve months ended
	7/31/2023			7/31/2022			7/31/2023			7/31/2022
Revenues	$	68		$	69		$	279		$	410

SG&A Expenses		1,395			3,048			8,932			16,978
R&D Expenses		1,266			1,841			6,312			8,742
Depreciation and amortization		18			18			78			72
Provision for loss on receivable pursuant to line of credit		-			-			-			25,000
Provision for losses on related party receivables		-			-			-			10,095

Operating Loss		(2,611	)		(4,838	)		(15,043	)		(60,477	)
Impairment of cost method investment - Cornerstone Pharmaceuticals		-			-			-			(79,141	)
Unrealized (loss) gain on investments - Hedge Funds		100			80			220			(504	)
Impairment of investments - Other Pharmaceuticals		17			-			(334	)		-
Unrealized gain on investments - Cyclo Therapeutics Inc.		2,663			-			2,663			-
Other, net		1,294			113			3,749			150
Loss before Incomes Taxes		1,463			(4,645	)		(8,745	)		(139,972	)
Taxes		(4	)		6			255			-
Equity in loss of Day Three Labs Inc.		(203	)		-			(203	)		-
Equity loss in equity of RP Finance		-			-			-			(575	)
Consolidated net income (loss) from continuing operations		1,256			(4,639	)		(8,693	)		(140,547	)

Discontinued Operations
Loss from operations related to 520 Broad Street, net of tax		(65	)		(214	)		(306	)		(1,830	)
Gain on disposal of 520 Property		-			-			6,784			-
Income (loss) on discontinued operations		(65	)		(214	)		6,478			(1,830	)

Net (income) loss		1,191			(4,853	)		(2,215	)		(142,377	)
Net (loss) attributable to noncontrolling interests		(28	)		(69	)		(339	)		(17,719	)
Net income (loss) attributable to Rafael Holdings, Inc.	$	1,163		$	(4,784	)	$	(1,876	)	$	(124,658	)

Continuing operations loss per share
Net income (loss) from continuing operations		1,256			(4,639	)		(8,693	)		(140,547	)
Net loss attributable to noncontrolling interests		(28	)		(69	)		(339	)		(17,719	)
Numerator for loss per share from continuing operations	$	1,284		$	(4,570	)	$	(8,354	)	$	(122,828	)

Discontinued operations loss per share
Net income (loss) from discontinued operations	$	(65	)	$	(214	)	$	6,478		$	(1,830	)

Income (loss) per share
Continuing operations - basic and diluted		0.06			(0.24	)		(0.36	)		(6.22	)
Discontinued operations - basic and diluted		(0.00	)		(0.01	)		0.28			(0.09	)
Income (loss) per basic common share	$	0.06		$	(0.24	)	$	(0.08	)	$	(6.31	)

Weighted average shares in calculation		22,263,211			19,767,342			22,263,211			19,767,342

Cover	Oct. 30, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 30, 2023
Entity File Number	1-38411
Entity Registrant Name	RAFAEL HOLDINGS, INC.
Entity Central Index Key	0001713863
Entity Tax Identification Number	82-2296593
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	520 Broad Street
Entity Address, City or Town	Newark
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07102
City Area Code	212
Local Phone Number	658-1450
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class B common stock, par value $0.01 per share
Trading Symbol	RFL
Security Exchange Name	NYSE
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false