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 Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2024
RAFAEL
HOLDINGS, INC.
(Exactname of registrant as specified in its charter)
| 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 StreetNewark, New Jersey | 07102 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s
telephone number, including area code: 212 658-1450
Not
Applicable
(Formername 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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br>material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement<br>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 |
Item2.02. Results of Operations and Financial Condition.
On November 6, 2024, 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, 2024. 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 9.01Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Document |
|---|---|
| 99.1 | Press Release, dated November 6, 2024, reporting the results of operations for the fiscal quarter and fiscal year ended July 31, 2024. |
| 104 | Cover Page Interactive Data File, formatted in Inline XBRL document. |
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/ William Conkling | ||
| Name: | William Conkling | ||
| Title: | Chief Executive Officer | ||
| Dated:<br>November 6, 2024 |
2
EXHIBIT INDEX
| ExhibitNumber | Document |
|---|---|
| 99.1 | Press Release, dated November 6, 2024, reporting the results of operations for the fiscal quarter and fiscal year ended July 31, 2024. |
| 104 | Cover Page Interactive Data File, formatted in Inline XBRL document. |
3
Exhibit 99.1
Rafael Holdings Reports Fourth Quarter and FullYear Fiscal 2024 Financial Results
Our proposed merger with Cyclo Therapeuticsadvances our strategy to invest in, develop and commercialize clinical stage assets which address areas of high unmet medical need
NEWARK, NJ – November 6, 2024 (GLOBENEWSWIRE) - Rafael Holdings, Inc. (NYSE: RFL), today reported its financial results for the fourth quarter and the full fiscal year ended July 31, 2024.
“During fiscal 2024, we made significant progress on our strategy to advance our existing portfolio and to invest in, develop and commercialize clinical stage assets in areas of high unmet medical need. Specifically, we are extremely pleased to have entered into a merger agreement with Cyclo Therapeutics (Nasdaq: CYTH), said Bill Conkling, CEO of Rafael Holdings. Bill added, “We are encouraged that Cyclo Therapeutics has fully enrolled its pivotal Phase 3 study evaluating Trappsol^®^ Cyclo™ for the treatment of Niemann-Pick Disease Type C1, a rare and fatal genetic disease, and results from the 48-week interim analysis are expected in the middle of 2025. Despite recent FDA approvals, we believe that Trappsol^®^ Cyclo™ has the potential to be a market leader. We anticipate a shareholder vote and closing the merger with Cyclo Therapeutics in the coming months.”
Rafael Holdings, Inc. Fourth Quarter Fiscal Year 2024 FinancialResults
As of July 31, 2024, we had cash, cash equivalents and marketable securities of $65.9 million.
For the three months ended July 31, 2024, we recorded a net loss from continuing operations attributable to Rafael Holdings of $4.5 million, or $0.19 per diluted share, versus a net gain from continuing operations of $1.3 million, or $0.06 per diluted share, in the year ago period.
Research and development expenses were $1.5 million for the three months ended July 31, 2024, compared to $1.3 million in the year ago period. The year over year increase relates to activity at Cornerstone and Day Three Labs, which were consolidated with Rafael Holdings during fiscal 2024.
For the three months ended July 31, 2024, general and administrative expenses were $2.3 million. For the same period in the prior year, general and administrative expenses were $1.4 million. The increase was primarily due to additional expenses from Cornerstone and Day Three Labs, which were consolidated with Rafael Holdings during fiscal 2024, as well as increased professional fees related to the Cornerstone and Day Three Labs acquisitions.
Rafael Holdings, Inc. Full Fiscal Year 2024 Financial Results
For the twelve months ended July 31, 2024, we recorded a net loss from continuing operations attributable to Rafael Holdings of $34.4 million, or $1.45 per diluted share, versus a net loss from continuing operations of $8.4 million, or $0.36 per diluted share, in the year ago period. The net loss recorded during fiscal year 2024 was driven by an in-process research and development expense of $89.9 million related to the Cornerstone acquisition, a loss of $1.6 million on our initial investment in Day Three Labs, offset by a recovery of receivables from Cornerstone of $31.3 million and realized and unrealized gains on our investment in Cyclo Therapeutics. During the second quarter of 2024, we increased our investment in Day Three Labs and now hold a majority interest in the company with 84% of the shares outstanding. We began reporting consolidated financial results for Day Three Labs in January 2024 and Cornerstone Pharmaceuticals in March 2024.
Research and development expenses were $4.2 million for the fiscal year ended July 31, 2024, compared to $6.3 million in the year ago period. The year over year reduction is due to the winding down of early-stage programs, including at Barer Institute.
For the fiscal year ended July 31, 2024, general and administrative expenses were $8.9 million versus $8.9 million in the same period in the prior year. The decrease in general and administrative expenses at Rafael Holdings was offset by additional G&A expenses from Cornerstone and Day Three Labs as well as increased professional fees related to the two acquisitions in Fiscal 2024.
About Rafael Holdings, Inc.
Rafael Holdings, Inc. is a holding company with interests in clinical and early-stage pharmaceutical companies including an investment in (and planned merger with) Cyclo Therapeutics Inc. (Nasdaq: CYTH), a biotechnology company dedicated to developing Trappsol® Cyclo™, which is being evaluated in clinical trials, including an ongoing Phase 3 trial for the potential treatment of Niemann-Pick Disease Type C1 (“NPC1”), a rare, fatal, and progressive genetic disorder. Rafael also holds a majority equity interest in LipoMedix Pharmaceuticals Ltd. a clinical stage pharmaceutical company, Barer Institute Inc., a wholly owned preclinical cancer metabolism research operation, and a majority interest in Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company. Rafael also holds a majority interest in Rafael Medical Devices, LLC., an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and a majority interest in Day Three Labs, Inc., a company which empowers third-party manufacturers to reimagine their existing cannabis offerings enabling them to bring to market better, cleaner, more precise and predictable versions by utilizing Day Three’s pharmaceutical-grade technology and innovation like Unlokt™. The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet medical needs. Upon closing of the planned merger with Cyclo, the Company intends to focus its efforts on making Trappsol^®^Cyclo™ its lead clinical program.
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, those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended July 31, 2024, and our other filings with the SEC. These factors 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
#
2
RAFAEL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and pershare data)
| July 31,<br><br> 2023 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| CURRENT ASSETS | |||||
| Cash and cash equivalents | 2,675 | $ | 21,498 | ||
| Available-for-sale securities | 63,265 | 57,714 | |||
| Interest receivable | 515 | 387 | |||
| Convertible note receivable, related party | 5,191 | — | |||
| Accounts receivable, net of allowance for doubtful accounts of 245 at July 31, 2024 and July 31, 2023 | 426 | 213 | |||
| Prepaid expenses and other current assets | 430 | 914 | |||
| Convertible note receivable, related party | 0 | 1,921 | |||
| Investment in equity securities | — | 294 | |||
| Total current assets | 72,502 | 82,941 | |||
| Property and equipment, net | 2,120 | 1,695 | |||
| Investments – Cyclo | 12,010 | 4,763 | |||
| Investments – Hedge Funds | 2,547 | 4,984 | |||
| Investment – Day Three | — | 2,797 | |||
| Investments – Other Pharmaceuticals | — | 65 | |||
| Convertible note receivable | 1,146 | — | |||
| Goodwill | 3,050 | — | |||
| Intangible assets, net | 1,847 | — | |||
| In-process research and development | 1,575 | 1,575 | |||
| Other assets | 35 | 9 | |||
| TOTAL ASSETS | 96,832 | $ | 98,829 | ||
| LIABILITIES AND EQUITY | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable | 2,556 | $ | 333 | ||
| Accrued expenses | 1,798 | 763 | |||
| Convertible notes payable | 614 | — | |||
| Other current liabilities | 113 | 1,023 | |||
| Due to related parties | 733 | 26 | |||
| Installment note payable | 1,700 | — | |||
| Total current liabilities | 7,514 | 2,145 | |||
| Accrued expenses, noncurrent | 2,982 | — | |||
| Convertible notes payable, noncurrent | 73 | — | |||
| Other liabilities | 5 | 55 | |||
| TOTAL LIABILITIES | 10,574 | 2,200 | |||
| 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, 2024 and July 31, 2023 | 8 | 8 | |||
| Class B common stock, 0.01 par value; 200,000,000 shares authorized, 24,142,535 issued and 23,819,948 outstanding (excluding treasury shares of 101,487) as of July 31, 2024, and 23,635,709 shares issued and 23,490,527 shares outstanding as of July 31, 2023 | 238 | 236 | |||
| Additional paid-in capital | 280,048 | 264,010 | |||
| Accumulated deficit | (201,743 | ) | (167,333 | ) | |
| Treasury stock, at cost; 101,487 and 0 Class B shares as of July 31, 2024 and July 31, 2023, respectively | (168 | ) | — | ||
| Accumulated other comprehensive income (loss) related to unrealized income on available-for-sale securities | 111 | (353 | ) | ||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,691 | 3,725 | |||
| Total equity attributable to Rafael Holdings, Inc. | 82,185 | 100,293 | |||
| Noncontrolling interests | 4,073 | (3,664 | ) | ||
| TOTAL EQUITY | 86,258 | 96,629 | |||
| TOTAL LIABILITIES AND EQUITY | 96,832 | $ | 98,829 |
All values are in US Dollars.
3
RAFAEL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONSAND COMPREHENSIVE INCOME (LOSS)
(in thousands, except share and pershare data)
| Three Months Ended <br><br>July 31, | Year Ended<br><br> July 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Revenues | $ | 165 | $ | 68 | $ | 637 | $ | 279 | ||||
| Cost of infusion Technology revenue | 69 | - | 154 | - | ||||||||
| G&A Expenses | 2,330 | 1,395 | 8,854 | 8,932 | ||||||||
| R&D Expenses | 1,543 | 1,266 | 4,170 | 6,312 | ||||||||
| In-process research and development expense | - | 0 | 89,861 | - | ||||||||
| Depreciation and amortization | 68 | 18 | 225 | 78 | ||||||||
| Operating Loss | (3,845 | ) | (2,611 | ) | (102,627 | ) | (15,043 | ) | ||||
| Interest income | 606 | - | 2,383 | 3,253 | ||||||||
| Impairment of investments - Other Pharmaceuticals | - | 17 | - | (334 | ) | |||||||
| Loss on initial investment in Day Three upon acquisition | - | - | (1,633 | ) | - | |||||||
| Realized gain on available-for-sale securities | 251 | - | 1,772 | 154 | ||||||||
| Realized gain (loss) on investment in equity securities | - | - | (46 | ) | 309 | |||||||
| Unrealized gain on investment in equity securities | - | - | - | 33 | ||||||||
| Realized gain on investment - Cyclo | - | - | 424 | - | ||||||||
| Unrealized gain on investment - Cyclo | (3,162 | ) | 2,663 | 37 | 2,663 | |||||||
| Unrealized gain on convertible notes receivable, due from Cyclo | 1,191 | - | 1,191 | - | ||||||||
| Unrealized (loss) gain on investment - Hedge Funds | 181 | 100 | 63 | 220 | ||||||||
| Recovery of receivables from Cornerstone | - | - | 31,305 | - | ||||||||
| Interest expense | (163 | ) | - | (248 | ) | - | ||||||
| Other income | - | 1,294 | 118 | - | ||||||||
| Income (loss) before incomes taxes from continuing operations | (4,941 | ) | 1,463 | (67,261 | ) | (8,745 | ) | |||||
| Benefit from taxes | 87 | (4 | ) | 2,680 | 255 | |||||||
| Equity in loss of Day Three | - | (203 | ) | (422 | ) | (203 | ) | |||||
| Consolidated net loss from continuing operations | (4,854 | ) | 1,256 | (65,003 | ) | (8,693 | ) | |||||
| Discontinued Operations | ||||||||||||
| Loss from discontinued operations related to 520 Property | (65 | ) | - | (306 | ) | |||||||
| Gain on disposal of 520 Property | - | - | 6,784 | |||||||||
| Income from discontinued operations | - | (65 | ) | - | 6,478 | |||||||
| Consolidated net loss | (4,854 | ) | 1,191 | (65,003 | ) | (2,215 | ) | |||||
| Net loss attributable to noncontrolling interests | (386 | ) | (28 | ) | (30,593 | ) | (339 | ) | ||||
| Net loss attributable to Rafael Holdings, Inc. | $ | (4,468 | ) | $ | 1,163 | $ | (34,410 | ) | $ | (1,876 | ) | |
| Continuing operations earnings (loss) per share | ||||||||||||
| Net loss from continuing operations | $ | (4,854 | ) | $ | 1,256 | $ | (65,003 | ) | $ | (8,693 | ) | |
| Net loss attributable to noncontrolling interests | (386 | ) | (28 | ) | (30,593 | ) | (339 | ) | ||||
| Numerator for loss per share from continuing operations | $ | (4,468 | ) | $ | 1,284 | $ | (34,410 | ) | $ | (8,354 | ) | |
| Discontinued operations earnings income per share | ||||||||||||
| Numerator for income from discontinued operations | $ | - | $ | (65 | ) | $ | - | $ | 6,478 | |||
| Earnings (loss) per share - Basic and Diluted | ||||||||||||
| Continuing operations | $ | (0.19 | ) | $ | 0.06 | $ | (1.45 | ) | $ | (0.36 | ) | |
| Discontinued operations | - | - | - | 0.28 | ||||||||
| Total basic earnings (loss) per common share | $ | (0.19 | ) | $ | 0.06 | $ | (1.45 | ) | $ | (0.08 | ) | |
| Weighted average number of shares used in calculation of earnings (loss) per share - basic and diluted | 23,916,839 | 22,263,211 | 23,745,516 | 23,263,211 |
4