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): June 11, 2018
RAFAEL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 1-38411 | 82-2296593 | ||
(State or other jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
520 Broad Street Newark, New Jersey |
07102 | |
(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (973) 438-1000
Not Applicable
(Former name 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 communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement 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. ☐
Item 2.02. | Results of Operations and Financial Condition. |
On June 11, 2018, the Registrant posted an earnings release to the investors page of its website (www.rafaelholdings.com) announcing its results of operations for the quarter ended April 30, 2018. 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 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. | Document | |
99.1 |
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 Polinsky | |
Name: David Polinsky | ||
Title: Chief Financial Officer |
Dated: June 11, 2018
2 |
EXHIBIT INDEX
Exhibit |
Document | |
99.1 |
3
Exhibit 99.1
Rafael Holdings Reports Third Quarter Fiscal Year 2018 Results
NEWARK, NJ – June 11, 2018: Rafael Holdings, Inc., (NYSE American: RFL), reported revenue of $1.1 million and a loss per share of $0.04 for the third quarter of its 2018 fiscal year.
Financial Highlights
(Results are for 3Q FY2018 compared to 3Q FY2017)
● | Revenue of $1.1 million compared to $1.3 million | |
● | Loss from operations of $731 thousand compared to $164 thousand | |
● | Loss attributable to Rafael Holdings of $531 thousand compared to $65 thousand | |
● | Loss per share of $0.04 compared to $0.01 |
Remarks by Howard Jonas, Chairman and CEO of Rafael Holdings
“We are pleased to report Rafael Holding’s first quarterly results as an independent public company following completion of our spin-off from IDT Corporation on March 26th. Financial results for the third quarter were in line with our expectations and reflected the added expense of being a public company. Our balance sheet remains very strong, with $44.0 million in working capital – current assets less current liabilities -- and no debt.
“With a successful spin-off in our rear-view mirror, we are focused on both of our operating segments to maximize value for our stockholders.
“On the real estate side, we are working to optimize our property portfolio. In Newark, New Jersey, where we hold a 20-story commercial property and an associated garage property, we are seeking experienced real estate development partners to take full advantage of the buoyant local market.
“On the pharma side of our business, we are encouraged by Rafael Pharmaceuticals’ recently reported results from its Phase II clinical trial of its lead drug, CPI-613 in Acute Myeloid leukemia (AML) and look forward to its planned launch of its global, randomized Phase III trials of CPI-613 for patients with Stage IV metastatic pancreatic cancer and relapsed/refractory AML.”
“LipoMedix is making good progress on the development and study of its flagship prodrug, Promitil and was recently awarded a patent for the use of Promitil in conjunction with radiotherapy.”
About Rafael Holdings, Inc.:
Rafael Holdings holds commercial real estate assets and interests in two clinical stage, oncology focused pharmaceutical companies. The real estate holdings include properties in Newark and Piscataway, New Jersey and Jerusalem, Israel. The pharmaceutical holdings consist of interests in Rafael Pharmaceuticals, Inc. and a majority stake in Lipomedix Pharmaceuticals Ltd., both of which are focused on development and commercialization of drugs in the oncology space.
Contact:
Rafael Holdings
David Polinsky
Chief Financial Officer
P: (212) 658-1450
E: invest@rafaelholdings.com
RAFAEL HOLDINGS, INC.
CONSOLIDATED AND COMBINED BALANCE SHEETS
April 30, 2018 | July 31, 2017 | |||||||
(Unaudited) | ||||||||
(in thousands) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,605 | $ | 11,756 | ||||
Trade accounts receivable, net of allowance for doubtful accounts of $82 at April 30, 2018 and July 31, 2017 | 406 | 264 | ||||||
Marketable securities | 30,942 | — | ||||||
Due from Rafael Pharmaceuticals | 1,600 | — | ||||||
Prepaid expenses and other current assets | 645 | 147 | ||||||
Total current assets | 44,198 | 12,167 | ||||||
Property and equipment, net | 50,554 | 51,160 | ||||||
Investments - Rafael Pharmaceuticals | 11,700 | 13,478 | ||||||
Investments - Other | 5,949 | — | ||||||
Deferred income tax assets, net | 8 | 8,859 | ||||||
Patents | 180 | — | ||||||
In-process research and development | 1,575 | — | ||||||
Other assets | 920 | 540 | ||||||
Total assets | $ | 115,084 | $ | 86,204 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Trade accounts payable | $ | 362 | $ | 115 | ||||
Accrued expenses | 296 | 213 | ||||||
Other current liabilities | 27 | 35 | ||||||
Total current liabilities | 685 | 363 | ||||||
(Due from) due to related parties | (621 | ) | 23,693 | |||||
Other liabilities | 70 | 70 | ||||||
Total liabilities | 134 | 24,126 | ||||||
Commitments and contingencies | ||||||||
Equity: | ||||||||
Rafael Holdings, Inc. stockholders’/members’ equity: | ||||||||
Group equity | — | 50,427 | ||||||
Class A common stock, $0.01 par value; authorized shares – 50,000,000; 787,163 and nil shares issued and outstanding as of April 30, 2018 and July 31, 2017, respectively | 8 | — | ||||||
Class B common stock, $0.01 par value; authorized shares – 200,000,000; 11,754,835 and nil shares issued and outstanding as of April 30, 2018 and July 31, 2017, respectively | 118 | — | ||||||
Additional paid in capital | 103,509 | — | ||||||
Accumulated deficit | (192 | ) | — | |||||
Accumulated other comprehensive income | 1,998 | 2,316 | ||||||
Total Rafael Holdings, Inc. stockholders’/members’ equity | 105,441 | 52,743 | ||||||
Noncontrolling interests | 9,509 | 9,335 | ||||||
Total equity | 114,950 | 62,078 | ||||||
Total liabilities and equity | $ | 115,084 | $ | 86,204 |
See accompanying notes to consolidated and combined financial statements.
2
RAFAEL HOLDINGS, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
(in thousands, except per share data) | ||||||||||||||||
Revenues: | ||||||||||||||||
Rental – Third Party | $ | 400 | $ | 219 | $ | 1,085 | $ | 661 | ||||||||
Rental – Related Party | 447 | 854 | 1,442 | 2,680 | ||||||||||||
Parking | 246 | 209 | 630 | 677 | ||||||||||||
Total revenues | 1,093 | 1,282 | 3,157 | 4,018 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Selling, general and administrative | 1,402 | 1,035 | 4,481 | 2,667 | ||||||||||||
Depreciation and amortization | 422 | 411 | 1,276 | 1,233 | ||||||||||||
(Loss) income from operations | (731 | ) | (164 | ) | (2,600 | ) | 118 | |||||||||
Interest income | (71 | ) | (1 | ) | (75 | ) | (8 | ) | ||||||||
Net losses (gains) resulting from foreign exchange transactions | 28 | (136 | ) | (90 | ) | (167 | ) | |||||||||
Net gains on sales of marketable securities | (24 | ) | — | (24 | ) | (167 | ) | |||||||||
Net loss on equity investments | — | — | 104 | — | ||||||||||||
Gain on disposal of bonus shares | — | — | (246 | ) | — | |||||||||||
(Loss) income before income taxes | (664 | ) | (27 | ) | (2,269 | ) | 293 | |||||||||
(Benefit from) provision for income taxes | (5 | ) | 38 | 8,438 | 68 | |||||||||||
Net (loss) income | (659 | ) | (65 | ) | (10,707 | ) | 225 | |||||||||
Net loss attributable to noncontrolling interests | 128 | — | 304 | — | ||||||||||||
Net (loss) income attributable to Rafael Holdings, Inc. | $ | (531 | ) | $ | (65 | ) | $ | (10,403 | ) | $ | 225 | |||||
(Loss) earnings per share attributable to Rafael Holdings, Inc. common stockholders: | ||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.83 | ) | $ | 0.02 | |||||
Diluted | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.83 | ) | $ | 0.02 | |||||
Weighted average number of shares used in calculation of (loss) earnings per share: | ||||||||||||||||
Basic | 12,542 | 12,542 | 12,542 | 12,542 | ||||||||||||
Diluted | 12,542 | 12,542 | 12,542 | 12,542 |
See accompanying notes to consolidated and combined financial statements.
3
RAFAEL HOLDINGS, INC.
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended April 30, | ||||||||
2018 | 2017 | |||||||
(in thousands) | ||||||||
Operating activities | ||||||||
Net (loss) income | $ | (10,403 | ) | $ | 225 | |||
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
Depreciation and amortization | 1,276 | 1,256 | ||||||
Deferred income taxes | 8,851 | (72 | ) | |||||
Realized gain on disposal of bonus shares | (246 | ) | — | |||||
Realized gain on marketable securities | (24 | ) | — | |||||
Non-cash compensation | 616 | — | ||||||
Interest in the equity of investments | (80 | ) | — | |||||
Change in assets and liabilities: | ||||||||
Accounts and rents receivable | (142 | ) | (40 | ) | ||||
Other current assets and prepaid expenses | (392 | ) | (117 | ) | ||||
Other assets | (355 | ) | (298 | ) | ||||
Accounts payable and accrued expenses | 223 | 155 | ||||||
Other current liabilities | (8 | ) | (7 | ) | ||||
Due from related parties | (386 | ) | (1,758 | ) | ||||
Other liabilities | — | 178 | ||||||
Net cash used in operating activities | (1,070 | ) | (478 | ) | ||||
Investing activities | ||||||||
Purchases of property and equipment | (572 | ) | (1,590 | ) | ||||
Proceeds from sale and maturity of marketable securities | 436 | — | ||||||
Purchase of investments | — | (8,300 | ) | |||||
Net cash used in investing activities | (136 | ) | (9,890 | ) | ||||
Financing activities | ||||||||
Proceeds from sale of member interests in CS Pharma Holdings, LLC | — | 10,000 | ||||||
Cash advances from related parties, net of repayments | — | 9,767 | ||||||
Net cash used in financing activities | — | 19,767 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 55 | (9 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (1,151 | ) | 9,390 | |||||
Cash and cash equivalents at beginning of period | 11,756 | 2,339 | ||||||
Cash and cash equivalents at end of period | $ | 10,605 | $ | 11,729 | ||||
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||||||||
Cash payments made for taxes | $ | — | $ | — | ||||
Cash payments made for interest | $ | — | $ | — |
See accompanying notes to consolidated and combined financial statements.
4
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