Rafael Holdings Reports Second Quarter Fiscal Year 2019 Results

USA - English

• USA - English

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

January 31,

July 31,

2019

2018

(unaudited)

(audited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

14,769

$

15,803

Trade accounts receivable, net of allowance for doubtful accounts of $91 and $82 at January 31, 2019 and July 31, 2018, respectively

356

287

Marketable securities

—

24,701

Due from Rafael Pharmaceuticals

—

3,300

Prepaid expenses and other current assets

588

421

Total current assets

15,713

44,512

Property and equipment, net

49,378

50,113

Investments – Rafael Pharmaceuticals

70,018

13,300

Investments – Other Pharmaceuticals

2,000

2,000

Investments – Hedge Funds

4,166

4,218

Deferred income tax assets, net

15

—

Patents

324

324

In-process research and development

1,327

1,327

Other assets

1,225

1,126

TOTAL ASSETS

$

144,166

$

116,920

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Trade accounts payable

$

535

$

367

Accrued expenses

650

500

Other current liabilities

20

24

Total current liabilities

1,205

891

Due to/from related parties

—

276

Convertible debt, net of discount - Related Party

14,934

—

Other liabilities

195

188

TOTAL LIABILITIES

16,334

1,355

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Class A common stock, $0.01 par value; 35,000,000 shares authorized, 787,163 shares issued and outstanding as of January 31, 2019 and July 31, 2018

8

8

Class B common stock, $0.01 par value; 200,000,000 shares authorized, 13,133,069 and 11,762,346 shares issued and outstanding as of January 31, 2019 and July 31, 2018, respectively

119

118

Additional paid in capital

117,269

103,636

Accumulated deficit

(2,649)

(1,108)

Accumulated other comprehensive income

4,080

4,043

Total stockholders' equity

118,827

106,697

Noncontrolling interests

9,005

8,868

TOTAL EQUITY

127,832

115,565

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

144,166

$

116,920

RAFAEL HOLDINGS, INC.

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(unaudited, in thousands, except share data)

Three Months Ended
January 31,

Six Months Ended
January 31,

2019

2018

2019

2018

REVENUE:

Rental – Third Party

$

306

$

298

$

689

$

685

Rental – Related Party

522

489

1,043

994

Parking

189

169

420

384

Total Revenue

1,017

956

2,152

2,063

COSTS AND EXPENSES

Selling, general and administrative

1,716

1,343

3,169

3,079

Research and development

276

—

649

—

Depreciation and amortization

431

429

860

853

Loss from Operations

(1,406)

(816)

(2,526)

(1,869)

Interest income, net

767

2

868

4

Net gain resulting from foreign exchange transactions

—

107

—

118

Net loss on equity investments

—

—

—

(107)

Gains on sales of marketable securities, net

103

—

330

—

Unrealized loss on Investments – Hedge Funds

(148)

—

(52)

—

Gain on disposal of bonus shares

—

—

—

246

Loss Before Income Taxes

(684)

(707)

(1,380)

(1,608)

(Provision for) benefit from income taxes

(17)

(15)

14

(8,443)

Net Loss

(701)

(722)

(1,366)

(10,051)

Net income (loss) attributable to noncontrolling interests

320

(176)

136

(176)

Net Loss attributable to Rafael Holdings, Inc.

$

(1,021)

$

(546)

$

(1,502)

$

(9,875)

OTHER COMPREHENSIVE INCOME

Foreign currency translation adjustments

$

80

$

68

$

2

$

78

Total Comprehensive Loss

(621)

(654)

(1,364)

(9,973)

Comprehensive income attributable to noncontrolling interests

15

19

23

19

Total Comprehensive Loss attributable to Rafael Holdings, Inc.

$

(636)

$

(673)

$

(1,387)

$

(9,992)

Loss Per Share:

Basic and diluted

$

(0.08)

$

(0.04)

$

(0.12)

$

(0.79)

Weighted average number of shared used in calculation of loss per share:

Basic and diluted

13,489,583

12,541,998

12,634,389

12,541,998

RAFAEL HOLDINGS, INC.

 CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

(unaudited, in thousands, except share data)

Six Months Ended
January 31,

2019

2018

Operating activities

Net loss

$

(1,366)

$

(10,051)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

860

853

Deferred income taxes

(15)

8,837

Interest income on Series D Convertible Note

(848)

—

Net gain on sale of marketable securities

(330)

—

Unrealized loss on investments – Hedge Funds

52

—

Provision for doubtful accounts

9

—

Realized gain on disposal of bonus shares

—

(246)

Non-cash compensation

172

606

Amortization of debt discount

5

—

Interest in the equity of investments

—

439

Change in assets and liabilities:

Trade accounts receivable

(78)

38

Other current assets and prepaid expenses

(186)

(60)

Other assets

(82)

(260)

Accounts payable and accrued expenses

296

77

Other current liabilities

39

(15)

Due to/from related parties

588

(202)

Other liabilities

(15)

25

Net cash (used in) provided by operating activities

(899)

41

Investing activities

Purchases of property and equipment

(58)

(728)

Proceeds from sale and maturity of marketable securities, net

25,031

—

Investment in Rafael Pharmaceuticals

(55,870)

—

Net cash used in investing activities

(30,897)

(728)

Financing activities

Contribution from noncontrolling interest of consolidated entity

4,587

—

Repayment of Loan from Rafael Pharmaceuticals

3,300

—

Proceeds from exercise of options

163

—

Proceed from sale of shares

7,777

—

Proceeds from convertible notes payable - Related Party

15,000

—

Cash advances from IDT Corporation, net of repayments

—

900

Net cash provided by financing activities

30,827

900

Effect of exchange rate changes on cash and cash equivalents

(65)

39

Net (decrease) increase in cash and cash equivalents

(1,034)

252

Cash and cash equivalents at beginning of period

15,803

11,756

Cash and cash equivalents at end of period

$

14,769

$

12,008

Supplemental Schedule of Non-Cash Financing and Investing 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

—

Cash payments made for interest & taxes

—

—