PR Newswire | Oct 29, 2020 04:31PM EDT

10/29 15:30 CDT

Rafael Holdings Reports Fourth Quarter and Full Fiscal Year 2020 Results NEWARK, N.J., Oct. 29, 2020

NEWARK, N.J., Oct. 29, 2020 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $4.9 million and a loss per share of $0.66 for the fiscal year ended July 31, 2020. Fourth quarter revenue was $1.2 million with a loss per share of $0.34.

Q4 FY 2020 Consolidated Highlights

* Revenue of $1.2 million in Q4 FY2020, generated by Rafael Holdings' real estate portfolio, was unchanged from the year-ago quarter. The loss per share of $0.34 increased from $0.16 in the year ago quarter largely due to additional investment in the Company's wholly owned pharmaceutical research venture, the Barer Institute. * In August after the quarter close, the company sold its commercial real estate property in Piscataway, New Jersey for $3.9 million

Rafael Pharmaceuticals

At July 31, 2020, the Company and its subsidiaries collectively owned securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and approximately 37% on a fully diluted basis.

* The U.S. Food and Drug Administration (FDA) granted Orphan Drug Designation for Rafael Pharma's lead compound, CPI-613(r) (devimistat), for the treatment of soft tissue sarcoma. Rafael's clinical trial will focus on the treatment of relapsed or refractory clear cell sarcoma. * Ono Pharmaceutical Co., has begun a multicenter, open-label Phase 1 study in Japan for patients with pancreatic cancer. The study is evaluating the efficacy and safety of CPI-613(r)? (devimistat) in combination with modified FOLFIRINOX (mFFX). * Rafael Pharma reached its target enrollment of 500 patients in its pivotal Phase 3 clinical trial for metastatic pancreatic cancer (AVENGER 500). The trial is evaluating the efficacy and safety of CPI-613(r)? (devimistat) in combination with modified FOLFIRINOX (mFFX) as first-line therapy. Efficacy data for this trial could be available for analysis as early as the second quarter of calendar year 2021. * Rafael Pharma has crossed the midpoint to its first interim analysis in enrollment for its pivotal Phase 3 clinical trial (ARMADA 2000) of CPI-613(r) (devimistat) for relapsed or refractory acute myeloid leukemia (AML). The multicenter, open-label, randomized pivotal trial is evaluating the efficacy and safety of its lead compound devimistat in combination with high dose cytarabine and mitoxantrone (CHAM) in older patients. The efficacy data for this trial couuld be available for interim analysis as early as the second quarter of calendar year 2021. * Rafael Pharma expanded its Phase 2 clinical trial of CPI-613(r) (devimistat) for patients with relapsed or refractory Burkitt's lymphoma/leukemia. * Rafael Pharma entered into a research collaboration with Roswell Park Comprehensive Cancer Center to evaluate the effects of CPI-613(r) (devimistat) with or without chemotherapy agents, including oxaliplatin/cisplatin/5-FU/carboplatin/taxol, on esophageal cancer cells.

LipoMedixAt July 31, 2020, Rafael Holdings held 67% of the issued and outstanding ordinary shares of LipoMedix, a development-stage Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery. This stake is inclusive of 4 million shares of LipoMedix purchased in May 2020 for $1 million including conversion of outstanding bridge notes.

Barer InstituteThe Barer Institute has identified and begun to evaluate new therapeutic compounds, including compounds to regulate cancer metabolism, through internal development and in-licensing. It is working to validate newly discovered biomarkers for resistance and sensitivity within its portfolio compounds and to identify certain novel targetable mechanisms of action. In addition, the Barer Institute has identified several potential lead compounds for clinical development and found combinations that may meaningfully increase the efficacy of certain clinical compounds.

Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings"Rafael Holdings' continued to execute on our strategic vision in the fourth quarter, selling our Piscataway property and further increasing our majority stake in LipoMedix. In August, Rafael Pharma announced a major milestone - fully enrolling its pivotal Phase 3 Avenger 500 study for patients with metastatic pancreatic cancer. Results could be available as early as the second quarter of 2021. The Barer Institute has multiple compounds under development and collaboration programs in process with some of the premier academic centers in the country."

About Rafael Holdings, Inc.:Rafael Holdings is focused on development of novel cancer therapies. The company is a significant investor in two clinical stage oncology companies, Rafael Pharmaceuticals, Inc. and LipoMedix Pharmaceuticals Ltd. Through its wholly owned Barer Institute subsidiary, the company is developing compounds focused on the regulation of cancer metabolism. The company also holds commercial real estate assets in New Jersey and Jerusalem. For more information, visit our website at rafaelholdings.com.

Rafael Holdings, Inc.

Consolidated Balance Sheet

(in thousands except for share and per share data)

July 31,

2020 2019

ASSETS

CURRENT ASSETS

Cash and cash equivalents $ 6,206 $ 12,024

Trade accounts receivable, net of allowance for doubtful accounts of $218 and$122 at July 31, 267 450 2020 and 2019, respectively

Due from Rafael Pharmaceuticals 118 280

Prepaid expenses and other current assets 273 507

Assets held for sale 2,968 -

Total current assets 9,832 13,261

Property and equipment, net 44,433 48,733

Equity investment - RP Finance 192 -

Investments - Rafael Pharmaceuticals 70,018 70,018

Investments - Other Pharmaceuticals 1,201 2,000

Investments - Hedge Funds 7,510 5,125

Deferred income tax assets, net 6 19

In-process research and development and patents 1,575 1,575

Other assets 1,580 1,412

TOTAL ASSETS $ 136,347 $ 142,143

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Trade accounts payable $ 921 $ 795

Accrued expenses 1,191 605

Amount due for purchase of membership interest 3,500 -

Other current liabilities 115 27

Total current liabilities 5,727 1,427

Due to related parties - 65

Convertible debt, net of discount of $0 and $54 - Related Party - 14,946

Other liabilities 92 292

Accrued interest on convertible debt - Related Party - 649

TOTAL LIABILITIES 5,819 17,379

COMMITMENTS AND CONTINGENCIES

EQUITY

Class A common stock, $0.01 par value; 35,000,000 shares authorized, 787,163shares issued and 8 8 outstanding as of July 31, 2020 and July 31, 2019, respectively

Class B common stock, $0.01 par value; 200,000,000 shares authorized,15,034,598 issued and 15,028,536 outstanding as of July 31, 2020, and 13,142,502 shares issued and 149 131outstanding as of July 31, 2019

Additional paid-in capital 129,136 112,898

Accumulated deficit (16,255) (5,840)

Accumulated other comprehensive income related to foreign currency translation 3,762 3,784adjustment

Total equity attributable to Rafael Holdings, Inc. 116,800 110,981

Noncontrolling interests 13,728 13,783

TOTAL EQUITY 130,528 124,764

TOTAL LIABILITIES AND EQUITY $ 136,347 $ 142,143

Rafael Holdings, Inc.

Consolidated Statement of Operations

(in thousands except for share and per share data)

Year Ended July 31,

2020 2019

REVENUES

Rental - Third Party $ 1,516 $ 1,452

Rental - Related Party 2,082 2,125

Parking 832 874

Other - Related Party 480 480

Total Revenue 4,910 4,931

COSTS AND EXPENSES

Selling, general and administrative 9,118 8,821

Research and development 2,391 1,027

Depreciation 1,866 1,779

Loss from operations (8,465) (6,696)

Interest (expense) income, net (32) 469

Net (loss) gain resulting from foreign exchange transactions (5) 47

Gain on sale of marketable securities - 330

Impairment of investments - Other Pharmaceuticals (799) -

Unrealized gain on investments - Hedge Funds 2,385 907

Loss before income taxes (6,916) (4,943)

(Provision for) benefit from income taxes (29) 19

Impairment of equity method investment of Altira (4,000) -

Equity in earnings of RP Finance 192 -

Consolidated net loss (10,753) (4,924)

Net loss attributable to noncontrolling interests (338) (231)

Net loss attributable to Rafael Holdings, Inc. $ (10,415) $ (4,693)

OTHER COMPREHENSIVE LOSS

Net Loss $ (10,753) $ (4,924)

Foreign Currency Translation Adjustment (22) 298

Total Comprehensive Loss (10,775) (4,626)

Comprehensive (loss) income attributable to noncontrolling interests (9) 173

Total Comprehensive loss attributable to Rafael Holdings, Inc. $ (10,784) $ (4,453)

Loss per share

Basic and Diluted $ (0.66) $ (0.35)

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

Basic and Diluted 15,764,829 13,275,239

Rafael Holdings, Inc.

Consolidated Statement of Cash Flows

(in thousands)

Year Ended July 31,

2020 2019

Operating activities

Net loss $ (10,753) $ (4,924)

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

Depreciation 1,866 1,779

Deferred income taxes 13 (19)

Interest income on Rafael Pharmaceuticals Series D Convertible Note - (848)

Interest income - (37)

Net gain on sale of marketable securities - (330)

Net unrealized gain on investments - Hedge Funds (2,385) (907)

Impairment of investments - Other Pharmaceuticals 799 -

Impairment of equity method investment of Altira 4,000 -

Equity in earnings of RP Finance (192) -

Provision for doubtful accounts 96 122

Noncash compensation 684 372

Amortization of debt discount 54 17

Write-off of patents - 76

Change in assets and liabilities:

Trade accounts receivable 87 (285)

Prepaid expenses and other current assets 234 (86)

Other assets (168) 275

Accounts payable and accrued expenses 713 533

Other current liabilities 88 3

Due to related parties (65) 654

Due from related parties 162 (280)

Accrued interest - Related Party 19 649

Other liabilities 82 104

Net cash used in operating activities (4,666) (3,132)

Investing activities

Purchase of investment in Altira (500) -

Purchases of property and equipment (534) (399)

Proceeds from sale and maturity of marketable securities - 25,031

Investment in Rafael Pharmaceuticals - (55,870)

Net cash used in investing activities (1,034) (31,238)

Financing activities

Contribution from noncontrolling interest of consolidated entity - 4,587

Repayment of loan from Rafael Pharmaceuticals, including interest - 3,335

Proceeds from exercise of options 29 190

Proceed from sale of shares - 7,777

Proceeds from issuance of convertible note - 15,000

Payments for taxes related to shares withheld for employee taxes (125) -

Net cash (used in) provided by financing activities (96) 30,889

Effect of exchange rate changes on cash and cash equivalents (22) (298)

Net decrease in cash and cash equivalents (5,818) (3,779)

Cash and cash equivalents, beginning of year 12,024 15,803

Cash and cash equivalents, end of year $ 6,206 $ 12,024

Supplemental Schedule of Noncash Investing and Financing Activities

Adoption effect of ASU 2016-01 $ - $ 39

Beneficial conversion feature of convertible debt - Related Party $ - $ 71

Debt and accrued interest converted to Series D Preferred Stock $ - $ 10,848

Related Party deposit utilized to purchase Class B Common Stock $ - $ 864

Amount due for purchase of membership interest $ 3,500 $ -

Transfer of asset held for sale $ 2,968 $ -

Conversion of LipoMedix Bridge Notes $ 283 $ -

Conversions of related party convertible notes payable and accrued interest $ 15,668 $ -

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SOURCE Rafael Holdings, Inc.