PR Newswire | Mar 17, 2021 04:30PM EDT

03/17 15:30 CDT

Rafael Holdings Reports Second Quarter Fiscal Year 2021 Results NEWARK, N.J., March 17, 2021

NEWARK, N.J., March 17, 2021 /PRNewswire/ -- Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $1.0 million and a loss per share of $0.50 for the second quarter of its 2021 fiscal year, the three months ended January 31, 2021.

Q2 FY 2021 Consolidated Financial and Operational Highlights

* Revenue of $1.0 million, generated by Rafael Holdings' real estate portfolio, decreased from $1.2 million in the year-ago quarter due, in part, to the sale of its building in Piscataway, NJ. * Loss per share of $0.50 compared to a loss per share of $0.08 in the year ago quarter primarily due to a $7.0 million impairment of the company's interest in Altira, as described below. * Rafael Holdings' Board of Directors has appointed Ameet Mallik to become the Company's Chief Executive Office effective May 1, 2021. Howard Jonas, who has served as the company's Chairman and CEO since its inception, will continue as Chairman of the Board and remain an active member of the management team. * William "Bill" Conkling has been named Rafael Holdings' Chief Commercial Officer. * On December 7, 2020, the Company acquired the economic rights related to a 33.33% membership interest in Altira, adding to the 33.33% interest purchased in fiscal 2020. As in the first such agreement, the purchase gives the Company an indirect right to receive a 1% royalty on potential net sales of certain Rafael Pharmaceuticals' products. * On December 7, 2020, Rafael Holdings sold 567,437 shares of the Company's Class B common stock and warrants to purchase an additional 113,487 shares of the Company's Class B common stock for an aggregate sale price of $13 million.

Q2 FY 2021 - Pharmaceutical Holdings - Recent Developments

Rafael Pharmaceuticals

At January 31, 2021, the Company and its affiliates collectively owned securities representing 51% of the issued and outstanding capital stock of Rafael Pharmaceuticals and approximately 41% on a fully diluted basis including shares beneficially held through its interest in RP Finance, LLC., a funding vehicle. Recent developments announced by Rafael Pharmaceuticals include:

* The U.S. Food and Drug Administration (FDA) has granted Fast Track designation for Rafael Pharmaceuticals' lead compound, CPI-613(r) (devimistat), for the treatment of both metastatic pancreatic cancer and acute myeloid leukemia (AML). * Rafael Pharmaceuticals announced that it will initiate a Phase 2 clinical trial of CPI-613(r)(devimistat) in combination with hydroxychloroquine in patients with clear cell sarcoma of soft tissue. Rafael Pharmaceuticals will begin enrolling patients in partnership with Sara's Cure and Sarcoma Alliance for Research through Collaboration (SARC).

The FDA has granted Orphan Drug Designation for CPI-613(r) (devimistat) for the treatment of soft tissue sarcoma. Rafael Pharmaceuticals' clinical trial will focus on the treatment of relapsed or refractory clear cell sarcoma.

LipoMedix

At January 31, 2021, Rafael Holdings held 68% 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.

LipoMedix announced that its lead compound, Promitil(r) (PL-MLP), will be manufactured in the United States by ForDoz Pharma (ForDoz), a specialty pharmaceutical company focused on the development, manufacturing, and commercialization of value-added sterile and complex injectable products.

Barer Institute

The Barer Institute, a wholly owned subsidiary of Rafael Holdings, has identified and begun to develop 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.

The Barer Institute announced that it had reached an agreement with Princeton University's Office of Technology Licensing for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program and related intellectual property from the laboratory of Professor Joshua Rabinowitz, Department of Chemistry.

Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings

"The progress being made by our pharma partners is highlighted by our Board's selection of Ameet Mallik to join as CEO of Rafael Holdings beginning on May 1, 2021. Ameet is an extraordinarily capable and accomplished pharma executive with deep knowledge of oncological drug development and commercialization. Together with Bill Conkling, who has joined our team as Chief Commerical Officer, Ameet will lead our effort to realize the potential of Rafael Holdings including its investments in Rafael Pharmaceuticals, LipoMedix, and the Barer Institute."

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 a pipeline of compounds focused on the regulation of cancer metabolism. For more information, visit rafaelholdings.com.

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

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

January 31, July 31, 2021 2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents $ 6,086 $ 6,206

Trade accounts receivable, net of allowance fordoubtful accounts of $117 and $218 at January 31, 124 2672021 and July 31, 2020, respectively

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; 35,000,000shares authorized, 787,163 shares issued and 8 8outstanding as of January 31, 2021 and July 31, 2020,respectively

Class B common stock, $0.01 par value; 200,000,000shares authorized, 15,664,476 issued and 15,652,120 155 149outstanding as of January 31, 2021, and 15,034,598issued and 15,028,536 outstanding as of July 31, 2020

Additional paid-in capital 142,746 129,136

Accumulated deficit (25,866) (16,255)

Accumulated other comprehensive income related to 3,761 3,762foreign currency translation adjustment

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 Six Months Ended January 31, January 31,

2021 2020 2021 2020

REVENUE

Rental - Third Party $ 190 $ 370 $ 426 716

Rental - Related 527 527 1,047 1,047Party

Parking 122 219 299 443

Other - Related 120 120 240 240Party

Total revenue 959 1,236 2,012 2,446

COSTS AND EXPENSES

Selling, general and 2,767 2,221 5,359 4,262administrative

Research and 1,568 448 2,083 693development

Depreciation and 441 473 878 939amortization

Impairment - Altira 7,000 - 7,000 -

Loss from operations (10,817) (1,906) (13,308) (3,448)

Interest (expense) (1) 33 (1) (31)income, net

Net loss resultingfrom foreign - - - (5)exchangetransactions

Gain on sale of - - 749 -building

Impairment ofinvestments - Other - - (724) -Pharmaceuticals

Unrealized gain oninvestments - Hedge 2,489 557 3,433 520Funds

Loss before income (8,329) (1,316) (9,851) (2,964)taxes

Provision for income (4) (12) (9) (16)taxes

Equity in earnings 96 - 192 -of RP Finance

Consolidated net (8,237) (1,328) (9,668) (2,980)loss

Net lossattributable to (72) (75) (57) (129)noncontrollinginterests

Net lossattributable to $ (8,165) $ (1,253) $ (9,611) $ (2,851)Rafael Holdings,Inc.

OTHER COMPREHENSIVELOSS

Net loss $ (8,237) $ (1,328) $ (9,668) $ (2,980)

Foreign currencytranslation 37 (34) (1) (28)adjustment

Total comprehensive (8,200) (1,362) (9,669) (3,008)loss

Comprehensive lossattributable to 10 (18) (11) (16)noncontrollinginterests

Total comprehensiveloss attributable to $ (8,210) $ (1,344) $ (9,658) $ (2,992)Rafael Holdings,Inc.

Loss per share

Basic and diluted $ (0.50) $ (0.08) $ (0.60) $ (0.18)

Weighted averagenumber of sharesused in calculationof 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 inoperating 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 912 -entity

Proceeds from exercise of options 43 -

Proceeds from issuance of shares 13,000 -

Payments for taxes related to shares withheld for (146) (116)employee taxes

Net cash provided by (used in) financing activities 13,809 (116)

Effect of exchange rate changes on cash and cash 18 (30)equivalents

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 financingactivities

Conversion of LipoMedix bridge notes $ - $ 200

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

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SOURCE Rafael Holdings, Inc.