Rafael Holdings Reports First Quarter Fiscal 2025 Financial Results

About this update from Rafael Holdings, Inc.

Upon completion of our proposed merger with Cyclo Therapeutics the Company intends to focus its efforts on Cyclo’s lead clinical program Trappsol® Cyclo™ NEWARK, N.J., Dec. 11, 2024 (GLOBE NEWSWIRE) -- Rafael Holdings, Inc. (NYSE: RFL), today reported its financial results for the first quarter of fiscal year 2025 ended October 31, 2024. “We anticipate proceeding to a shareholder vote on our pending merger agreement with Cyclo Therapeutics, Inc. (Nasdaq: CYTH) in the first calendar quarter of 2025 and closing promptly post shareholder approvals. Upon closing of the merger, the Company intends to focus its strategic efforts and resources on what will then be the Company’s lead clinical program and core asset, Trappsol ®  Cyclo™. Accordingly, we are currently evaluating our other operating entities and portfolio of assets,” 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 of other treatments for NPC Type C1, we believe that Trappsol ® Cyclo™ has the potential to be a market leader.” Rafael Holdings, Inc. First Quarter Fiscal Year 2025 Financial Results As of October 31, 2024, we had cash, cash equivalents and marketable securities of $54.3 million. For the three months ended October 31, 2024, we recorded a net loss attributable to Rafael Holdings of $9.0 million, or $0.37 per share, versus a net loss of $3.6 million, or $0.15 per share in the year ago period. The year over year increase in losses was attributable to the combined unrealized losses of $6.0 on the Company’s investment in Cyclo as well as in the convertible notes receivable from Cyclo, versus $2.1 million in unrealized losses on the Company’s investment in Cyclo in the year ago period. Research and development expenses were $1.3 million for the three months ended October 31, 2024, compared to $0.5 million in the year ago period. The year over year increase relates to activity at Cornerstone and Day Three, which were consolidated with Rafael Holdings during fiscal 2024. For the three months ended October 31, 2024, general and administrative expenses were $2.5 million. For the same period in the prior year, general and administrative expenses were $2.0 million. The increase was primarily due to additional expenses from Cornerstone and Day Three, as well as increased professional fees related to the proposed Cyclo merger. 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, a majority interest in Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, 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 Therapeutics, 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 [email protected] (203) 274-2825   RAFAEL HOLDINGS, INC.         CONSOLIDATED BALANCE SHEETS          (in thousands, except share and per share data)                         October 31, 2024   July 31, 2024           (audited)   ASSETS                       CURRENT ASSETS           Cash and cash equivalents   $ 8,159     $ 2,675     Available-for-sale securities     46,138       63,265     Interest receivable     438       515     Convertible note receivables, due from Cyclo     12,603       5,191     Accounts receivable, net of allowance for credit losses of $245 at October 31, 2024 and July 31, 2024     201       426     Prepaid expenses and other current assets     2,942       430     Total current assets     70,481       72,502                 Property and equipment, net     2,078       2,120     Investments - Hedge Funds     -       2,547     Investments – Cyclo     7,645       12,010     Convertible note receivable classified as available-for-sale     1,161       1,146     Goodwill     3,050       3,050     Intangible assets, net     1,818       1,847     In-process research and development     1,575       1,575     Other assets     27       35     TOTAL ASSETS   $ 87,835     $ 96,832                 LIABILITIES AND EQUITY           CURRENT LIABILITIES           Accounts payable   $ 2,700     $ 2,556     Accrued expenses     1,379       1,798     Convertible notes payable     614       614     Other current liabilities     112       113     Due to related parties     734       733     Installment note payable     1,700       1,700     Total current liabilities     7,239       7,514                 Accrued expenses, noncurrent     3,138       2,982     Convertible notes payable, noncurrent     74       73     Other liabilities     —       5     TOTAL LIABILITIES     10,451       10,574                 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 October 31, 2024 and July 31, 2024     8       8     Class B common stock, $0.01 par value; 200,000,000 shares authorized, 24,135,035 issued and 23,785,043 outstanding (excluding treasury shares of 101,487) as of October 31, 2024, and 24,142,535 issued and 23,819,948 outstanding (excluding treasury shares of 101,487) as of July 31, 2024     238       238     Additional paid-in capital     280,359       280,048     Accumulated deficit     (210,749 )     (201,743 )   Treasury stock, at cost; 101,487 Class B shares as of October 31, 2024 and July 31, 2024     (168 )     (168 )   Accumulated other comprehensive income related to unrealized income on available-for-sale securities     132       111     Accumulated other comprehensive income related to foreign currency translation adjustment     3,696       3,691     Total equity attributable to Rafael Holdings, Inc.     73,516       82,185     Noncontrolling interests     3,868       4,073     TOTAL EQUITY     77,384       86,258                 TOTAL LIABILITIES AND EQUITY   $ 87,835     $ 96,832               RAFAEL HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS  (unaudited, in thousands, except share and per share data)                   Three Months Ended October 31,     2024       2023   Revenues $ 128     $ 68           Cost of infusion technology revenue   37       -   SG&A Expenses   2,523       2,040   R&D Expenses   1,326       489   Depreciation and amortization   86       17   Operating Loss   (3,844 )     (2,478 )         Interest income   568       582   Realized gain on available-for-sale securities   194       177   Realized loss on investment in equity securities   -       (46 ) Realized gain on investments - Cyclo   -       424   Unrealized loss on investments - Cyclo   (4,365 )     (2,124 ) Unrealized loss on convertible notes receivable, due from Cyclo   (1,588 )     -   Unrealized loss on investments - Hedge Funds   -       (166 ) Interest expense   (162 )     -   Other income   (2 )     93   Loss before Incomes Taxes   (9,199 )     (3,538 ) Taxes   (12 )     (6 ) Equity in loss of Day Three Labs Inc.   -       (216 )         Consolidated net loss   (9,211 )     (3,760 ) Net loss attributable to noncontrolling interests   (205 )     (122 ) Net loss attributable to Rafael Holdings, Inc. $ (9,006 )   $ (3,638 )                 Loss per share       Basic and diluted   (0.37 )     (0.15 )    Loss per basic common share $ (0.37 )   $ (0.15 )         Weighted average shares in calculation   25,062,854       23,644,647          

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