Rafael Holdings Files Q1 2024 10-Q

TL;DR

Rafael Holdings (RFL) filed its 10-Q for Q1 2024, showing operational updates.

AI Summary

Rafael Holdings, Inc. filed its 10-Q for the quarterly period ended April 30, 2024. The company, incorporated in Delaware, is primarily involved in real estate. Its principal executive offices are located at 520 Broad Street, Newark, New Jersey. The filing indicates that its Class B common stock trades under the symbol RFL on the New York Stock Exchange.

Why It Matters

This filing provides investors with an update on Rafael Holdings' financial performance and operational status for the first quarter of fiscal year 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial and operational information.

Key Players & Entities

• Rafael Holdings, Inc. (company) — Registrant
• April 30, 2024 (date) — Quarterly period end date
• 520 Broad Street, Newark, New Jersey (location) — Principal executive offices
• RFL (ticker) — Trading symbol for Class B common stock
• New York Stock Exchange (company) — Exchange where Class B common stock is registered

FAQ

Key Financial Figures

• $0.01 — stered Class B common stock, par value $0.01 per share RFL New York Stock Exchange

Filing Documents

• ea0207775-10q_rafael.htm (10-Q) — 1708KB
• ea020777501ex31-1_rafael.htm (EX-31.1) — 8KB
• ea020777501ex31-2_rafael.htm (EX-31.2) — 8KB
• ea020777501ex32-1_rafael.htm (EX-32.1) — 4KB
• ea020777501ex32-2_rafael.htm (EX-32.2) — 4KB
• 0001213900-24-052918.txt ( ) — 11318KB
• rfl-20240430.xsd (EX-101.SCH) — 130KB
• rfl-20240430_cal.xml (EX-101.CAL) — 81KB
• rfl-20240430_def.xml (EX-101.DEF) — 611KB
• rfl-20240430_lab.xml (EX-101.LAB) — 1071KB
• rfl-20240430_pre.xml (EX-101.PRE) — 622KB
• ea0207775-10q_rafael_htm.xml (XML) — 1315KB

FINANCIAL INFORMATION

Part I. FINANCIAL INFORMATION 1 Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited) Consolidated Balance Sheets as of April 30, 2024 and July 31, 2023 1 Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended April 30, 2024 and 2023 2 Consolidated Statements of Equity for the Three and Nine Months Ended April 30, 2024 and 2023 3 Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 2024 and 2023 7 Notes to the Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 50 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 58 Item 4.

Controls and Procedures

Controls and Procedures 58

OTHER INFORMATION

Part II. OTHER INFORMATION 59 Item 1. Legal Proceeding 59 Item 1A.

Risk Factors

Risk Factors 59 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 59 Item 3. Defaults Upon Senior Securities 59 Item 4. Mine Safety Disclosures 59 Item 5. Other Information 59 Item 6. Exhibits 59

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION RAFAEL HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) April 30, 2024 July 31, 2023 (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 7,436 $ 21,498 Available-for-sale securities 64,941 57,714 Interest receivable 541 387 Convertible note receivable, related party — 1,921 Accounts receivable, net of allowance for doubtful accounts of $ 245 at April 30, 2024 and July 31, 2023 443 213 Prepaid expenses and other current assets 445 914 Investment in equity securities — 294 Total current assets 73,806 82,941 Property and equipment, net 2,156 1,695 Investments – Other Pharmaceuticals — 65 Investments – Hedge Funds 2,366 4,984 Investment – Day Three — 2,797 Investments – Cyclo Therapeutics Inc. 15,172 4,763 Convertible note receivable 1,053 — Goodwill 3,571 — Intangible assets, net 1,851 — In-process research and development 1,575 1,575 Other assets 73 9 TOTAL ASSETS $ 101,623 $ 98,829 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable $ 2,571 $ 333 Accrued expenses 1,745 763 Convertible notes 614 — Other current liabilities 168 1,023 Due to related parties 743 26 Installment note payable 1,700 — Total current liabilities 7,541 2,145 Accrued expenses, noncurrent 2,826 — Convertible notes, noncurrent 71 — Deferred income tax liabilities, net 613 — Other liabilities 13 55 TOTAL LIABILITIES 11,064 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 April 30, 2024 and July 31, 2023 8 8 Class B common stock, $ 0.01 par value; 200,000,000 shares authorized, 23,983,519 issued and 23,677,559 outstanding (excluding treasury shares of 101,487) as of April 30, 2024, and 23,635,709 shares issued and 23,490,527 shares outstanding as of July 31, 20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – DESCRIPTION OF BUSINESS Description of Business Rafael Holdings, Inc. ("Rafael Holdings", "Rafael", "we" or the "Company") is a holding company with interests in clinical and early-stage pharmaceutical companies (the "Pharmaceutical Companies"), including a majority interest in Cornerstone Pharmaceuticals, Inc. ("Cornerstone"), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, a majority equity interest in LipoMedix Pharmaceuticals Ltd. ("LipoMedix"), a clinical stage pharmaceutical company, Barer Institute Inc. ("Barer"), a wholly-owned preclinical cancer metabolism research operation, and an investment in Cyclo Therapeutics Inc. (Nasdaq: CYTH), ("Cyclo Therapeutics" or "Cyclo"), a clinical-stage biotechnology company dedicated to developing Trappsol Cyclo, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 (NPC), a rare, fatal and progressive genetic disorder . We also hold a majority interest in Day Three Labs, Inc. ("Day Three"), a company which reimagines existing cannabis offerings with pharmaceutical-grade technology and innovation like Unlokt to bring to market better, cleaner, more precise and predictable products , and a majority interest in Rafael Medical Devices, LLC, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries ("Rafael Medical Devices" and Day Three together with the Pharmaceutical Companies, represent our "Investment Companies"). In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities. The Company's primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics, which address high unmet medic

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) In May 2023, the Company first invested in Cyclo Therapeutics. Cyclo is a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. Cyclo's lead drug candidate is Trappsol Cyclo (hydroxypropyl beta cyclodextrin), a treatment for Niemann-Pick Type C disease ("NPC"). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In January 2017, the FDA granted Fast Track designation to Trappsol Cyclo for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020, Cyclo announced Top Line data showing a favorable safety and tolerability profile for Trappsol Cyclo in this study. Cyclo is currently conducting a Phase 3 Clinical Trial Evaluating Trappsol Cyclo in Pediatric and Adult Patients with Niemann-Pick Disease Type C1. See Note 11 for more information on the Company's investments in Cyclo. In 2019, the Company established Barer, a preclinical cancer metabolism research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds to regulate cancer metabolism with potentially broader application in other indications beyond cancer. Barer has been comprised of scientists and academic advisors that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions. Barer's majority owned subsidiary, Farber Partners, LLC ("Farber"), was formed around one such agreement with Princeton University's Office of Technology Licensing ("Princeton") for technology from the laboratory of Professor Joshua Rabinowitz, in the Department of Chemistry, Princeton University,

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View this 10-Q filing on SEC EDGAR