Rafael Holdings Reports Second Quarter Fiscal Year 2021 Results

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

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

January 31,
2021

July 31,
2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

6,086

$

6,206

Trade accounts receivable, net of allowance for doubtful accounts of $117 and $218 at January 31, 2021 and July 31, 2020, respectively

124

267

Due from Rafael Pharmaceuticals

360

118

Prepaid expenses and other current assets

116

273

Assets held for sale

—

2,968

Total current assets

6,686

9,832

Property and equipment, net

43,760

44,433

Equity investment – RP Finance LLC

383

192

Due from RP Finance LLC

3,750

—

Investments – Rafael Pharmaceuticals

79,141

70,018

Investments – Other Pharmaceuticals

477

1,201

Investments – Hedge Funds

8,943

7,510

Deferred income tax assets, net

—

6

In-process research and development and patents

1,575

1,575

Other assets

1,534

1,580

TOTAL ASSETS

$

146,249

$

136,347

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Trade accounts payable

$

495

$

921

Accrued expenses

643

1,191

Amount due for purchase of membership interest

9,500

3,500

Other current liabilities

162

115

Due to related parties

29

—

Total current liabilities

10,829

5,727

Other liabilities

33

92

TOTAL LIABILITIES

10,862

5,819

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 January 31, 2021 and July 31, 2020, respectively

8

8

Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,664,476 issued and 15,652,120 outstanding as of January 31, 2021, and 15,034,598 issued and 15,028,536 outstanding as of July 31, 2020

155

149

Additional paid-in capital

142,746

129,136

Accumulated deficit

(25,866)

(16,255)

Accumulated other comprehensive income related to foreign currency translation adjustment

3,761

3,762

Total equity attributable to Rafael Holdings, Inc.

120,804

116,800

Noncontrolling interests

14,583

13,728

TOTAL EQUITY

135,387

130,528

TOTAL LIABILITIES AND EQUITY

$

146,249

$

136,347

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three Months Ended
January 31,

Six Months Ended
January 31,

2021

2020

2021

2020

REVENUE

Rental – Third Party

$

190

$

370

$

426

716

Rental – Related Party

527

527

1,047

1,047

Parking

122

219

299

443

Other – Related Party

120

120

240

240

Total revenue

959

1,236

2,012

2,446

COSTS AND EXPENSES

Selling, general and administrative

2,767

2,221

5,359

4,262

Research and development

1,568

448

2,083

693

Depreciation and amortization

441

473

878

939

Impairment – Altira

7,000

—

7,000

—

Loss from operations

(10,817)

(1,906)

(13,308)

(3,448)

Interest (expense) income, net

(1)

33

(1)

(31)

Net loss resulting from foreign exchange transactions

—

—

—

(5)

Gain on sale of building

—

—

749

—

Impairment of investments – Other Pharmaceuticals

—

—

(724)

—

Unrealized gain on investments – Hedge Funds

2,489

557

3,433

520

Loss before income taxes

(8,329)

(1,316)

(9,851)

(2,964)

Provision for income taxes

(4)

(12)

(9)

(16)

Equity in earnings of RP Finance

96

—

192

—

Consolidated net loss

(8,237)

(1,328)

(9,668)

(2,980)

Net loss attributable to noncontrolling interests

(72)

(75)

(57)

(129)

Net loss attributable to Rafael Holdings, Inc.

$

(8,165)

$

(1,253)

$

(9,611)

$

(2,851)

OTHER COMPREHENSIVE LOSS

Net loss

$

(8,237)

$

(1,328)

$

(9,668)

$

(2,980)

Foreign currency translation adjustment

37

(34)

(1)

(28)

Total comprehensive loss

(8,200)

(1,362)

(9,669)

(3,008)

Comprehensive loss attributable to noncontrolling interests

10

(18)

(11)

(16)

Total comprehensive loss attributable to Rafael Holdings, Inc.

$

(8,210)

$

(1,344)

$

(9,658)

$

(2,992)

Loss per share

Basic and diluted

$

(0.50)

$

(0.08)

$

(0.60)

$

(0.18)

Weighted average number of shares used in calculation of loss per share

Basic and diluted

16,172,421

15,790,400

15,997,571

15,715,442

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited, in thousands)

Six Months Ended
January 31,

2021

2020

Operating activities

Net loss

$

(9,668)

$

(2,980)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

878

939

Deferred income taxes

6

12

Net unrealized gain on investments – Hedge Funds

(3,433)

(520)

Impairment of investments – Other Pharmaceuticals

724

—

Impairment – Altira

7,000

—

Equity in earnings of RP Finance

(192)

—

Provision for doubtful accounts

104

48

Stock-based compensation

719

411

Amortization of debt discount

—

54

Gain on sale of building

(749)

—

Change in assets and liabilities:

Trade accounts receivable

39

77

Prepaid expenses and other current assets

157

181

Other assets

46

(38)

Accounts payable and accrued expenses

(933)

(252)

Due from Rafael Pharmaceuticals

(242)

—

Other current liabilities

47

Due to related parties

29

126

Other liabilities

(59)

42

Net cash used in operating activities

(5,527)

(1,900)

Investing activities

Purchase of investment in Altira

(1,000)

—

Purchases of property and equipment

(205)

(456)

Payments to fund RP Finance

(3,750)

—

Proceeds from sale of building

3,658

—

Proceeds related to distribution of Hedge Funds

2,000

—

Investment in Rafael Pharmaceuticals

(9,123)

—

Net cash used in investing activities

(8,420)

(456)

Financing activities

Contribution from noncontrolling interest of consolidated entity

912

—

Proceeds from exercise of options

43

—

Proceeds from issuance of shares

13,000

—

Payments for taxes related to shares withheld for employee taxes

(146)

(116)

Net cash provided by (used in) financing activities

13,809

(116)

Effect of exchange rate changes on cash and cash equivalents

18

(30)

Net decrease in cash and cash equivalents

(120)

(2,502)

Cash and cash equivalents, beginning of period

6,206

12,024

Cash and cash equivalents, end of period

$

6,086

$

9,522

Supplemental schedule of noncash investing and financing activities

Conversion of LipoMedix bridge notes

$

—

$

200

Conversions of related party convertible notes payable and accrued interest

$

—

$

15,668