8-K
Rafael Holdings, Inc. (RFL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of Report (Date of earliest event reported): June 14, 2021
RAFAEL HOLDINGS, INC.
(Exact name of registrant as specified in itscharter)
| Delaware | 1-38411 | 82-2296593 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 520 Broad Street<br><br> <br>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 sincelast 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<br>Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange<br>Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under<br>the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under<br>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<br><br> <br>which registered |
|---|---|---|
| Class B common stock, par value $0.1 per share | RFL | New York Stock Exchange |
Item 2.02. Results of Operations and FinancialCondition.
On June 14, 2021, the Registrant posted an earnings release to the investors page of its website (www.rafaelholdings.com) announcing its results of operations for the fiscal quarter ended April 30, 2021. A copy of the earnings release concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The Registrant 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 5.02 Departure of Directors or CertainOfficers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(d) On June 14, 2021, the Nominating Committee of the Board of Directors (“Board”) of Rafael Holdings, Inc. (the “Company”) elected Ameet Mallik, the Company’s Chief Executive Officer, Shannon Klinger and Mark McCamish to the Company’s Board until the 2022 Annual Meeting, or until his or her successor is duly elected and qualified or until his or her earlier resignation or removal.
A copy of the June 14, 2021 press release relating to the above events is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Document |
|---|---|
| 99.1 | Press Release, dated June 14, 2021, reporting the results of operations for the fiscal quarter ended April 30, 2021. |
| 99.2 | Press Release, dated June 14, 2021. |
1
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/ David<br> Polinsky | |
| Name: | David Polinsky | |
| Title: | Chief Financial Officer |
Dated: June 14, 2021
2
EXHIBIT INDEX
| Exhibit Number | Document |
|---|---|
| 99.1 | Press Release, dated June 14, 2021, reporting the results of operations for the fiscal quarter ended April 30, 2021. |
| 99.2 | Press Release, dated June 14, 2021. |
3
Exhibit 99.1
Rafael Holdings Reports Third Quarter FiscalYear 2021 Results
NEWARK, NJ – June 14, 2021: Rafael Holdings, Inc., (NYSE: RFL), reported revenue of $1.0 million and a loss per share of $0.15 for the third quarter of its 2021 fiscal year, the three months ended April 30, 2021.
Q3 FY 2021 Operations and Consolidated Financial Highlights
| ● | Ameet Mallik became the Company’s Chief Executive Officer on May 1, 2021 and William “Bill” Conkling is now serving as the<br>Company’s first Chief Commercial Officer. |
|---|---|
| ● | On May 27, 2021, the Company filed a “shelf” registration statement covering sales of its Class B common stock in one<br>or more offerings up to an aggregate initial offering price of $250 million. |
| --- | --- |
| ● | Q3 FY 2021 revenue of $1.0 million decreased from $1.2 million in the year-ago quarter due primarily to the sale of the Company’s<br>building in Piscataway, NJ and reduced parking revenues resulting from the shift to work-from-home during the COVID pandemic. |
| --- | --- |
| ● | Q3 FY 2021 loss per share was $0.15 compared to a loss per share of $0.14 in the year ago quarter. |
| --- | --- |
Q3 FY 2021 – Pharmaceutical Holdings - Recent Developments
Rafael Pharmaceuticals
At April 30, 2021, the Company and its controlled subsidiaries collectively owned securities representing 51% of the issued and outstanding capital stock of Rafael Pharmaceuticals and approximately 41% on a fully diluted basis. Recent developments at Rafael Pharmaceuticals include:
| ● | Rafael Pharma expects to obtain a data readout from its pivotal Phase 3 clinical trial for metastatic pancreatic cancer in the fourth<br>quarter of 2021. |
|---|---|
| ● | Rafael Pharma presented two posters at the 2021 American Society of Clinical Oncology (ASCO) Annual Meeting summarizing the respective<br>enrollment status of ongoing trials studying devimistat in pancreatic cancer and biliary tract cancers. |
| --- | --- |
| ● | In March, enrollment surpassed 150 patients in Rafael Pharma’s pivotal Phase 3 clinical trial assessing the efficacy and safety<br>of its lead compound CPI-613® (devimistat) in combination with high dose cytarabine and mitoxantrone for patients with relapsed or<br>refractory acute myeloid leukemia (AML). |
| --- | --- |
LipoMedix
At April 30, 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. Recent developments announced by LipoMedix include:
| ● | LipoMedix announced that its lead compound, Promitil® (PL-MLP), will be manufactured in the United States by ForDoz Pharma, a<br>specialty pharmaceutical company. |
|---|
Remarks by Howard Jonas, Chairman of Rafael Holdings
“We continued to build out our leadership team and operating capabilities. We are focused on becoming an integrated oncology company dedicated to the clinical development of devimistat and a robust pipeline of therapies based on cellular metabolism. I’m very pleased that Ameet Mallik is now leading our organization, as our CEO, and already has begun to accelerate execution on our strategic priorities.”
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.
Contact:
David Polinsky
Chief Financial Officer, Rafael Holdings, Inc.
P: (212) 658-1450
E: invest@rafaelholdings.com
2
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| July 31,<br><br> <br>2020 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| CURRENT ASSETS | |||||
| Cash and cash equivalents | 4,679 | $ | 6,206 | ||
| Trade accounts receivable, net of allowance for doubtful accounts of 183 and 218 at April 30, 2021 and July 31, 2020, respectively | 248 | 267 | |||
| Due from Rafael Pharmaceuticals | 480 | 118 | |||
| Prepaid expenses and other current assets | 625 | 273 | |||
| Assets held for sale | — | 2,968 | |||
| Total current assets | 6,032 | 9,832 | |||
| Property and equipment, net | 43,591 | 44,433 | |||
| Equity investment – RP Finance LLC | 479 | 192 | |||
| Due from RP Finance LLC | 3,750 | — | |||
| Investments – Rafael Pharmaceuticals | 79,141 | 70,018 | |||
| Investments – Other Pharmaceuticals | 477 | 1,201 | |||
| Investments – Hedge Funds | 9,681 | 7,510 | |||
| Deferred income tax assets, net | — | 6 | |||
| In-process research and development and patents | 1,575 | 1,575 | |||
| Other assets | 1,482 | 1,580 | |||
| TOTAL ASSETS | 146,208 | $ | 136,347 | ||
| LIABILITIES AND EQUITY | |||||
| CURRENT LIABILITIES | |||||
| Trade accounts payable | 753 | $ | 921 | ||
| Accrued expenses | 861 | 1,191 | |||
| Amount due for purchase of membership interest | 3,000 | 3,500 | |||
| Other current liabilities | 235 | 115 | |||
| Due to related parties | 60 | — | |||
| Total current liabilities | 4,909 | 5,727 | |||
| Deferred income tax liabilities, net | 9 | — | |||
| Other liabilities | 33 | 92 | |||
| TOTAL LIABILITIES | 4,951 | 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 April 30, 2021 and July 31, 2020, respectively | 8 | 8 | |||
| Class B common stock, 0.01 par value; 200,000,000 shares authorized, 15,969,962 issued and 15,982,349 outstanding as of April 30, 2021, and 15,034,598 issued and 15,028,536 outstanding as of July 31, 2020 | 158 | 149 | |||
| Additional paid-in capital | 151,258 | 129,136 | |||
| Accumulated deficit | (28,419 | ) | (16,255 | ) | |
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,766 | 3,762 | |||
| Total equity attributable to Rafael Holdings, Inc. | 126,771 | 116,800 | |||
| Noncontrolling interests | 14,486 | 13,728 | |||
| TOTAL EQUITY | 141,257 | 130,528 | |||
| TOTAL LIABILITIES AND EQUITY | 146,208 | $ | 136,347 |
All values are in US Dollars.
3
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited, in thousands, except share and pershare data)
| Three Months Ended<br> April 30, | Nine Months Ended<br> April 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| REVENUE | ||||||||||||
| Rental – Third Party | $ | 228 | $ | 360 | $ | 654 | $ | 1,076 | ||||
| Rental – Related Party | 523 | 523 | 1,570 | 1,570 | ||||||||
| Parking | 119 | 221 | 418 | 664 | ||||||||
| Other – Related Party | 120 | 120 | 360 | 360 | ||||||||
| Total revenue | 990 | 1,224 | 3,002 | 3,670 | ||||||||
| COSTS AND EXPENSES | ||||||||||||
| Selling, general and administrative | 3,006 | 2,081 | 8,365 | 6,343 | ||||||||
| Research and development | 1,262 | 634 | 3,345 | 1,327 | ||||||||
| Depreciation and amortization | 201 | 474 | 1,079 | 1,413 | ||||||||
| Impairment – Altira | — | — | 7,000 | — | ||||||||
| Loss from operations | (3,479 | ) | (1,965 | ) | (16,787 | ) | (5,413 | ) | ||||
| Interest (expense) income, net | (1 | ) | — | (2 | ) | (31 | ) | |||||
| Net loss resulting from foreign exchange transactions | — | — | — | (5 | ) | |||||||
| Gain on sale of building | — | — | 749 | — | ||||||||
| Impairment of investments - Other Pharmaceuticals | — | (295 | ) | (724 | ) | (295 | ) | |||||
| Unrealized (loss) gain on investments - Hedge Funds | 738 | (28 | ) | 4,171 | 492 | |||||||
| Loss before income taxes | (2,742 | ) | (2,288 | ) | (12,593 | ) | (5,252 | ) | ||||
| Provision for income taxes | (4 | ) | (8 | ) | (13 | ) | (24 | ) | ||||
| Equity in earnings of RP Finance | 96 | 53 | 288 | 53 | ||||||||
| Consolidated net loss | (2,650 | ) | (2,243 | ) | (12,318 | ) | (5,223 | ) | ||||
| Net loss attributable to noncontrolling interests | (97 | ) | (84 | ) | (154 | ) | (213 | ) | ||||
| Net loss attributable to Rafael Holdings, Inc. | $ | (2,553 | ) | $ | (2,159 | ) | $ | (12,164 | ) | $ | (5,010 | ) |
| OTHER COMPREHENSIVE LOSS | ||||||||||||
| Net loss | $ | (2,650 | ) | $ | (2,243 | ) | $ | (12,318 | ) | $ | (5,223 | ) |
| Foreign currency translation adjustment | 5 | (4 | ) | 4 | (32 | ) | ||||||
| Total comprehensive loss | (2,645 | ) | (2,247 | ) | (12,314 | ) | (5,255 | ) | ||||
| Comprehensive loss attributable to noncontrolling interests | (28 | ) | (3 | ) | (39 | ) | (19 | ) | ||||
| Total comprehensive loss attributable to Rafael Holdings, Inc. | $ | (2,617 | ) | $ | (2,244 | ) | $ | (12,275 | ) | $ | (5,236 | ) |
| Loss per share | ||||||||||||
| Basic and diluted | $ | (0.15 | ) | $ | (0.14 | ) | $ | (0.75 | ) | $ | (0.32 | ) |
| Weighted average number of shares used in calculation of loss per share | ||||||||||||
| Basic and diluted | 16,668,624 | 15,813,679 | 16,216,969 | 15,747,709 |
4
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
| Nine Months Ended<br><br>April 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Operating activities | ||||||
| Net loss | $ | (12,318 | ) | $ | (5,223 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||
| Depreciation and amortization | 1,079 | 1,413 | ||||
| Deferred income taxes | 15 | 13 | ||||
| Net unrealized gain on investments - Hedge Funds | (4,171 | ) | (492 | ) | ||
| Impairment of investments - Other Pharmaceuticals | 724 | 295 | ||||
| Impairment – Altira | 7,000 | — | ||||
| Equity in earnings of RP Finance | (288 | ) | (53 | ) | ||
| (Recovery of) provision for doubtful accounts | (183 | ) | 48 | |||
| Stock-based compensation | 1,023 | 546 | ||||
| Amortization of debt discount | — | 54 | ||||
| Gain on sale of building | (749 | ) | — | |||
| Change in assets and liabilities: | ||||||
| Trade accounts receivable | 202 | 141 | ||||
| Prepaid expenses and other current assets | (352 | ) | 171 | |||
| Other assets | 98 | (72 | ) | |||
| Accounts payable and accrued expenses | (459 | ) | 28 | |||
| Other current liabilities | 120 | — | ||||
| Due to related parties | 60 | 107 | ||||
| Due from Rafael Pharmaceuticals | (362 | ) | — | |||
| Accrued interest - Related Party | — | 19 | ||||
| Other liabilities | (59 | ) | 30 | |||
| Net cash used in operating activities | (8,620 | ) | (2,975 | ) | ||
| Investing activities | ||||||
| Purchase of investment in Altira | (1,250 | ) | — | |||
| Purchases of property and equipment | (237 | ) | (491 | ) | ||
| Payments to fund RP Finance | (3,750 | ) | — | |||
| Proceeds from sale of building | 3,658 | — | ||||
| Proceeds related to distribution from Hedge Funds | 2,000 | — | ||||
| Investment in Rafael Pharmaceuticals | (9,123 | ) | — | |||
| Net cash used in investing activities | (8,702 | ) | (491 | ) | ||
| Financing activities | ||||||
| Contribution from noncontrolling interest of consolidated entity | 912 | — | ||||
| Proceeds from exercise of options | 43 | 29 | ||||
| Proceeds from exercise of warrants | 2,000 | — | ||||
| Proceeds from issuance of shares | 13,000 | — | ||||
| Payments for taxes related to shares withheld for employee taxes | (185 | ) | (125 | ) | ||
| Net cash provided by (used in) financing activities | 15,770 | (96 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 25 | (32 | ) | |||
| Net decrease in cash and cash equivalents | (1,527 | ) | (3,594 | ) | ||
| Cash and cash equivalents, beginning of period | 6,206 | 12,024 | ||||
| Cash and cash equivalents, end of period | $ | 4,679 | $ | 8,430 | ||
| Supplemental schedule of noncash investing and financing activities | ||||||
| Common shares issued for settlement of Altira liability | $ | 6,250 | $ | — | ||
| Conversion of LipoMedix bridge notes | $ | — | $ | 200 | ||
| Conversions of related party convertible notes payable and accrued interest | $ | — | $ | 15,668 |
# # #
5
Exhibit 99.2
Rafael Holdings Appoints Three Highly Experienced Biopharmaceutical Leaders to its Board of Directors
Ameet Mallik, Chief Executive Officer of Rafael Holdings, Shannon Thyme Klinger, Chief Legal Officer of Moderna, Inc., and Mark McCamish, M.D., Ph.D., President and Chief Executive Officer of IconOVir Bio, to Join Board of Directors
NEWARK, NJ – June 14, 2021: Rafael Holdings, Inc., (NYSE: RFL), a pharmaceutical company focused on developing novel cancer metabolism therapeutics, today announced the appointment of three senior biopharmaceutical leaders to its Board of Directors: Ameet Mallik, Chief Executive Officer of Rafael Holdings; Shannon Thyme Klinger, Chief Legal Officer of Moderna, Inc., (NASDAQ GS: MRNA); and Mark McCamish, M.D., Ph.D., President and Chief Executive Officer of IconOVir Bio.
“I am very pleased to have attracted three seasoned and accomplished executives of Ameet, Shannon and Mark’s caliber to the Rafael Holdings Board,” said Howard Jonas, Chairman of Rafael Holdings. “Each of them brings deep expertise from their remarkably successful careers to our Company. Their insights and guidance will prove tremendously valuable as we advance our pipeline of novel assets and continue to work toward building and evolving into a fully integrated commercial company.”
“Shannon and Mark are two of the best and brightest leaders within the industry, and I had the great fortune to work with both of them at Novartis,” said Ameet Mallik. “They will each bring invaluable experience and perspectives that will enable us to maximize the potential of our portfolio of novel therapeutics and progress toward our shared goal of improving and extending the lives of cancer patients.”
“Shannon and Mark are two of the best and brightest leaders within the industry, and I had the great fortune to work with both of them at Novartis,” said Ameet Mallik. “They will each bring invaluable experience and perspectives that will enable us to maximize the potential of our portfolio of novel therapeutics and progress toward our shared goal of improving and extending the lives of cancer patients.”
Ameet Mallik has over 16 years of experience at Novartis (NYSE: NVS), where he most recently served as Executive Vice President and Head, U.S. Oncology responsible for commercial and medical operations in the United States. Previously, Mr. Mallik served as the Global Head, Marketing, Value and Access and as Head, Latin America and Canada for Novartis Oncology. Mr. Mallik began his career at Novartis as Head of Strategic Planning and has held a number of commercial leadership roles at Novartis and Sandoz, a division of Novartis. At Sandoz, Mr. Mallik was Head of Biopharmaceuticals & Oncology Injectables.
Shannon Thyme Klinger serves as Chief Legal Officer of Moderna. Ms. Klinger also serves on Moderna’s Executive Committee and as Corporate Secretary. Before joining Moderna, Ms. Klinger served as Chief Legal Officer and a member of the Executive Committee at Novartis from 2018 to 2021. During Ms. Klinger’s ten-year tenure at Novartis, she held other roles of increasing responsibility, including as Novartis’ Chief Ethics, Risk & Compliance Officer and as the as Global Head Legal and General Counsel for Sandoz, a Novartis division. Shannon brings important global pharmaceutical experience across a wide range of strategically-important areas including legal, compliance, IP, business development, licensing, mergers and acquisitions, public/government affairs, communications, risk management, quality, and regulatory affairs.
“I am excited to be working again with Ameet and look forward to joining Howard Jonas and my colleagues on the board in partnering with the management team as the company continues its development of devimistat and focuses on further building out a pipeline focused on new approaches to fighting cancer,” Ms. Klinger stated.
Mark McCamish, MD, Ph.D., is President and Chief Executive Officer at IconOVir Bio, and previously served as the President and Chief Executive Officer of Forty Seven, Inc., where he led the company through critical phases of clinical development and its acquisition by Gilead (Nasdaq: GILD). Dr. McCamish is an international expert in biologic and biosimilars development and manufacturing and held senior executive roles at leading global pharmaceutical companies, including Abbott, Amgen, and Novartis/Sandoz. He led pioneering efforts in filing and launching biosimilars worldwide. Dr. McCamish is passionate about mentoring and developing people while focusing on meeting patient needs through efficient, commercially viable efforts.
“It is a true pleasure to be united again with Ameet to address patient’s needs through a unique metabolic approach to fighting cancer,” said Dr. McCamish. “I am impressed with how Howard Jonas and his team have advanced devimistat into the clinic with perseverance and urgency and I believe Ameet is the perfect leader to move the company forward to maximize patient benefit.”
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 www.rafaelholdings.com.
About Rafael Pharmaceuticals, Inc.:
Rafael Pharmaceuticals is a clinical-stage oncology company focused on selectively targeting cancer metabolic pathways while simultaneously harnessing the immune system to attack hard-to-treat cancers. The Company’s lead drug, CPI-613 (devimistat), is being evaluated in multiple clinical studies including two Phase 3 registrational clinical trials for metastatic pancreatic cancer and r/r acute myeloid leukemia. Multiple Phase 1/2 clinical trials are ongoing or planned in Biliary, r/r Burkitt, r/r Clear Cell Sarcoma, r/r T-cell lymphoma, r/r MDS, and Colorectal cancer.
The Company is continuing advance its internal cancer metabolism research programs and expects its Dual-SHMT Inhibitor to enter Phase 1 in late 2022. Raphael Pharmaceuticals’ investors include Rafael Holdings, Inc. (NYSE: RFL). For more information, please visit www.rafaelpharma.com.
Contact:
Rafael Holdings
David Polinsky
Chief Financial Officer
P: (212) 658-1450
E: invest@rafaelholdings.com