0001213900-20-042808.txt : 20201215 0001213900-20-042808.hdr.sgml : 20201215 20201215170043 ACCESSION NUMBER: 0001213900-20-042808 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 75 CONFORMED PERIOD OF REPORT: 20201031 FILED AS OF DATE: 20201215 DATE AS OF CHANGE: 20201215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Rafael Holdings, Inc. CENTRAL INDEX KEY: 0001713863 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 822296593 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-38411 FILM NUMBER: 201390209 BUSINESS ADDRESS: STREET 1: 520 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07120 BUSINESS PHONE: 973-438-1000 MAIL ADDRESS: STREET 1: 520 BROAD STREET CITY: NEWARK STATE: NJ ZIP: 07120 10-Q 1 f10q1020_rafaelholding.htm QUARTERLY REPORT

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended October 31, 2020.

 

or

 

☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.

 

Commission File Number: 000-55863

 

RAFAEL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

  82-2296593
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

520 Broad Street, Newark, New Jersey 07102

(Address of principal executive offices, zip code)

 

(212) 658-1450

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the 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

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
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. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

 

The number of shares outstanding of the registrant’s common stock as of December 14, 2020 was:

 

Class A common stock, par value $0.01 per share:

787,163 shares
Class B common stock, par value $0.01 per share: 15,044,547 shares

 

 

 

 

RAFAEL HOLDINGS, INC.

TABLE OF CONTENTS

 

Part I. FINANCIAL INFORMATION  
     
  Item 1. Financial Statements (Unaudited) 1
    Consolidated Balance Sheets as of October 31, 2020 and July 31, 2020 1
    Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended October 31, 2020 and 2019 2
    Consolidated Statements of Equity for the Three Months Ended October 31, 2020 and 2019 3
    Consolidated Statements of Cash Flows for the Three Months Ended October 31, 2020 and 2019 4
    Notes to Consolidated Financial Statements 5
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22
  Item 3. Quantitative and Qualitative Disclosures about Market Risks 27
  Item 4. Controls and Procedures 27
     
Part II. OTHER INFORMATION  
     
  Item 1. Legal Proceedings 28
  Item 1A. Risk Factors 28
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 28
  Item 3. Defaults Upon Senior Securities 28
  Item 4. Mine Safety Disclosures 28
  Item 5. Other Information 28
  Item 6. Exhibits 29
     
SIGNATURES 30

 

i

 

PART 1. FINANCIAL INFORMATION

 

ITEM 1. Financial Statements

 

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share data)

 

   October 31,
2020
   July 31,
2020
 
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents  $7,231   $6,206 
Trade accounts receivable, net of allowance for doubtful accounts of $256 and $218 at October 31, 2020 and July 31, 2020, respectively   309    267 
Due from Rafael Pharmaceuticals   240    118 
Prepaid expenses and other current assets   460    273 
Assets held for sale       2,968 
Total current assets   8,240    9,832 
           
Property and equipment, net   44,141    44,433 
Equity investment – RP Finance   288    192 
Due from RP Finance LLC   1,875     
Investments – Rafael Pharmaceuticals   70,018    70,018 
Investments – Other Pharmaceuticals   477    1,201 
Investments – Hedge Funds   6,454    7,510 
Deferred income tax assets, net       6 
In-process research and development and patents   1,575    1,575 
Other assets   1,550    1,580 
TOTAL ASSETS  $134,618   $136,347 
LIABILITIES AND EQUITY          
CURRENT LIABILITIES          
Trade accounts payable  $1,155   $921 
Accrued expenses   443    1,191 
Amount due for purchase of membership interest   3,500    3,500 
Other current liabilities   141    115 
Due to related parties   30     
Total current liabilities   5,269    5,727 
           
Other liabilities   33    92 
TOTAL LIABILITIES   5,302    5,819 
           
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, 2020 and July 31, 2020, respectively   8    8 
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 15,050,609 issued and 15,044,547 outstanding as of October 31, 2020, and 15,034,598 issued and 15,028,536 outstanding as of July 31, 2020   149    149 
Additional paid-in capital   129,393    129,136 
Accumulated deficit   (17,701)   (16,255)
Accumulated other comprehensive income related to foreign currency translation adjustment   3,724    3,762 
Total equity attributable to Rafael Holdings, Inc.   115,573    116,800 
Noncontrolling interests   13,743    13,728 
TOTAL EQUITY   129,316    130,528 
TOTAL LIABILITIES AND EQUITY  $134,618   $136,347 

 

See accompanying notes to consolidated financial statements.

   

1

 

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited, in thousands, except share and per share data) 

 

   Three Months Ended
October 31,
 
   2020   2019 
REVENUE        
Rental – Third Party  $236   $346 
Rental – Related Party   520    520 
Parking   177    224 
Other – Related Party   120    120 
Total revenue   1,053    1,210 
           
COSTS AND EXPENSES          
Selling, general and administrative   2,592    2,041 
Research and development   515    245 
Depreciation and amortization   437    466 
Loss from operations   (2,491)   (1,542)
           
Interest expense, net       (64)
Net loss resulting from foreign exchange transactions       (5)
Gain on sale of building   749     
Impairment of investments - Other Pharmaceuticals   (724)    
Unrealized gain (loss) on investments - Hedge Funds   944    (37)
Loss before income taxes   (1,522)   (1,648)
Provision for income taxes   (5)   (4)
Equity in earnings of RP Finance   96     
Consolidated net loss   (1,431)   (1,652)
Net loss (income) attributable to noncontrolling interests   15    (54)
Net loss attributable to Rafael Holdings, Inc.  $(1,446)  $(1,598)
           
OTHER COMPREHENSIVE LOSS          
Net loss  $(1,431)  $(1,652)
Foreign currency translation adjustment   (38)   6 
Total comprehensive loss   (1,469)   (1,646)
Comprehensive loss attributable to noncontrolling interests   (21)   (2)
Total comprehensive loss attributable to Rafael Holdings, Inc.  $(1,490)  $(1,648)
           
Loss per share          
Basic and diluted  $(0.09)  $(0.10)
           
Weighted average number of shares used in calculation of loss per share          
Basic and diluted   15,822,722    15,640,683 

 

See accompanying notes to consolidated financial statements.

 

2

 

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

 (unaudited, in thousands, except share and per share data)

  

   Three Months Ended October 31, 2020 
   Common Stock,
Series A
   Common Stock,
Series B
   Additional
Paid - in
   Accumulated   Accumulated
other
comprehensive
   Noncontrolling   Total 
   Shares   Amount   Shares   Amount   Capital   Deficit   income   interests   Equity 
Balance at July 31, 2020   787,163   $8    15,028,536   $149   $129,136   $(16,255)  $3,762   $13,728   $130,528 
Net loss for the three months ended October 31, 2020                       (1,446)       15    (1,431)
Stock-based compensation           7,261        214                214 
Stock options exercised           8,750        43                43 
Foreign currency translation adjustment                           (38)       (38)
Balance at October 31, 2020   787,163   $8    15,044,547   $149   $129,393   $(17,701)  $3,724   $13,743   $129,316 

  

   Three Months Ended October 31, 2019 
   Common Stock,
Series A
   Common Stock,
Series B
   Additional
Paid - in
   Accumulated   Accumulated
other
comprehensive
   Noncontrolling   Total 
   Shares   Amount   Shares   Amount   Capital   Deficit   income   interests   Equity 
Balance at July 31, 2019   787,163   $8    13,142,502   $131   $112,898   $(5,840)  $3,784   $13,783   $124,764 
Net loss for the three months ended October 31, 2019                       (1,598)       (54)   (1,652)
Stock-based compensation           5,000        94                94 
Shares issued for convertible note           1,849,749    18    15,650                15,668 
Conversion of LipoMedix bridge notes                               82    82 
Foreign currency translation adjustment                           6        6 
Balance at October 31, 2019   787,163   $8    14,997,251   $149   $128,642   $(7,438)  $3,790   $13,811   $138,962 

 

See accompanying notes to consolidated financial statements.

 

3

 

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

   Three Months Ended
October 31,
 
   2020   2019 
Operating activities        
Net loss  $(1,431)  $(1,652)
Adjustments to reconcile net loss to net cash used in operating activities          
Depreciation and amortization   437    466 
Deferred income taxes   6    1 
Net unrealized (gain) loss on investments - Hedge Funds   (944)   37 
Impairment of investments - Other Pharmaceuticals   724     
Equity in earnings of RP Finance   (96)    
Provision for doubtful accounts   38    48 
Stock-based compensation   214    94 
Amortization of debt discount       54 
Gain on sale of building   (749)    
           
Change in assets and liabilities:          
Trade accounts receivable   (80)   173 
Prepaid expenses and other current assets   (187)   217 
Other assets   30    (289)
Accounts payable and accrued expenses   (490)   (196)
Due from Rafael Pharmaceuticals   (122)    
Other current liabilities   26    (12)
Due to related parties   30    (37)
Due from Rafael Pharmaceuticals       160 
Other liabilities   (59)    
Net cash used in operating activities   (2,653)   (936)
           
Investing activities          
Purchases of property and equipment   (145)   (321)
Payment to fund RP Finance   (1,875)    
Proceeds from sale of building   3,658     
Proceeds related to distribution of Hedge Funds   2,000     
Net cash provided by (used in) investing activities   3,638    (321)
           
Financing activities          
Proceeds from exercise of options   43     
Net cash provided by financing activities   43     
Effect of exchange rate changes on cash and cash equivalents   (3)   4 
Net increase (decrease) in cash and cash equivalents   1,025    (1,253)
Cash and cash equivalents, beginning of period   6,206    12,024 
Cash and cash equivalents, end of period  $7,231   $10,771 
           
Supplemental schedule of noncash investing and financing activities          
Conversion of LipoMedix bridge notes  $   $82 
Conversions of related party convertible notes payable and accrued interest  $   $15,668 

 

See accompanying notes to consolidated financial statements.

 

4

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 1 – DESCRIPTION OF BUSINESS

 

Rafael Holdings, Inc. (“Rafael Holdings” or the “Company”), a Delaware corporation, owns interests in pre-clinical and clinical stage pharmaceutical companies and commercial real estate assets. The assets are operated as two separate lines of business.

 

The pharmaceutical holdings include preferred and common equity interests and a warrant to purchase additional equity interests in Rafael Pharmaceuticals, Inc., or Rafael Pharmaceuticals, which is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells; and, a majority equity interest in LipoMedix Pharmaceuticals Ltd., or LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, in 2019, we established the Barer Institute (“Barer”), a wholly-owned early stage venture focused on developing a pipeline of therapeutic compounds, including compounds to regulate cancer metabolism. The venture is pursuing collaborative research agreements with leading scientists from top academic institutions to develop other early stage ventures. In addition, we have recently initiated efforts to develop other early stage pharmaceutical ventures.

 

The commercial real estate holdings consist of a building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and certain other entities and hosts other tenants and an associated 800-car public garage, and a portion of a building in Israel. In August 2020, the Company sold an office/data center building in Piscataway, New Jersey, which was classified as held for sale at July 31, 2020.

 

The “Company” in these consolidated financial statements refers to Rafael Holdings on a consolidated basis. All significant intercompany accounts and transactions have been eliminated in consolidation.

 

All majority-owned subsidiaries are consolidated with all intercompany transactions and balances being eliminated in consolidation or combination. The entities included in these consolidated financial statements are as follows:

 

Company   Country of Incorporation   Percentage
Owned
 
Rafael Holdings, Inc.   United States – Delaware     100 %
Broad Atlantic Associates, LLC   United States – Delaware     100 %
IDT 225 Old NB Road, LLC   United States – Delaware     100 %
IDT R.E. Holdings Ltd.   Israel     100 %
Rafael Holdings Realty, Inc.   United States – Delaware     100 %
Barer Institute, Inc.   United States – Delaware     100 %
The Barer Institute, LLC   United States – Delaware     100 %
Hillview Avenue Realty, JV   United States – Delaware     100 %
Hillview Avenue Realty, LLC   United States – Delaware     100 %
Levco Pharmaceuticals Ltd.   Israel     95 %
Farber Partners, LLC   United States – Delaware     93 %
Pharma Holdings, LLC   United States – Delaware     90 %
LipoMedix Pharmaceuticals Ltd.   Israel     68 %
CS Pharma Holdings, LLC   United States – Delaware     45 %*

 

*50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC.

 

5

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.

 

The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2020 refers to the fiscal year ended July 31, 2020).

 

Operating results for the three months ended October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021. The balance sheet at July 31, 2020 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2020, or the 2020 Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”).

 

Use of Estimates    

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates.

 

Risks and Uncertainties - COVID-19

 

In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and has since spread around the globe. The Company actively monitors the outbreak and its potential impact on its operations and those of the Company’s holdings.

 

The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible from the pandemic, including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies.

 

The Company has one tenant that has not paid rent for August 2020 due to the New Jersey state gym closures; however, the tenant subsequently resumed rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of the Company’s real estate portfolio as well as efforts to monetize those assets.

 

The Company has implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings.

 

Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of the Company’s holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic’s impact on the U.S. and global economies, changes in our customers’ behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, the Company may incur expenses or delays relating to such events outside of the Company’s control, which could have a material adverse impact on the Company’s business.

 

6

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Investments

 

The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated.

 

Investments in businesses that the Company does not control, but in which the Company has the ability to exercise significant influence over operating and financial matters, are accounted for using the equity method. Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. The Company periodically evaluates its investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established.

 

Variable Interest Entities

 

In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities (“VIEs”). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.

 

If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company – that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary.

 

Cost Method Investments - Rafael Pharmaceuticals (see Note 3) is a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance. Cost method investments are presented as “Investments - Rafael Pharmaceuticals.”

 

Equity Method Investments - RP Finance, LLC (“RP Finance”), (see Note 5), has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance’s economic performance and, therefore, is not required to consolidate RP Finance. The Company accounts for its investment in RP Finance using the equity method of accounting.

 

Revenue Recognition

 

The Company applies the five-step approach as described in ASC 606, Revenue from Contracts with Customers, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the entity satisfies a performance obligation.

 

The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss. As an owner and operator of real estate, the Company derives the majority of its revenue from leasing office and parking space to tenants at its properties. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842, Leases.

 

Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.

 

The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company’s performance obligation is satisfied, consistent with the Company’s previous accounting.

 

The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due.

 

7

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Research and Development Costs

 

Research and development costs and expenses incurred by consolidated entities consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended.

 

Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property.

 

Recently Issued Accounting Standards Not Yet Adopted

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of the pending adoption of the new standard on its consolidated financial statements and intends to adopt the standard on August 1, 2023. 

 

NOTE 3 – INVESTMENT IN RAFAEL PHARMACEUTICALS

 

Rafael Pharmaceuticals is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells.

 

The Company owns equity interests and rights in Rafael Pharmaceuticals through a 90%-owned non-operating subsidiary, Pharma Holdings, LLC, or Pharma Holdings.

 

Pharma Holdings owns 50% of CS Pharma Holdings, LLC, or CS Pharma, a non-operating entity that owns equity interests in Rafael Pharmaceuticals. Accordingly, the Company holds an effective 45% indirect interest in the assets held by CS Pharma.

 

Howard Jonas, Chairman of the Board and Chief Executive Officer of the Company, and Chairman of the Board of Rafael Pharmaceuticals, owns 10% of Pharma Holdings.

 

Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the “Warrant”). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments, and will expire upon the earlier of June 30, 2021, a qualified initial public offering, or liquidation event of Rafael Pharmaceuticals.

 

On March 25, 2020, the Board of Directors of Rafael Pharmaceuticals extended the expiration date of the Warrant held by Pharma Holdings to purchase shares of the Warrant from December 31, 2020 to June 30, 2021 and on August 31, 2020 the Board of Directors of Rafael Pharmaceuticals further extended the expiration date of the Warrant held by Pharma Holdings, LLC to purchase shares of the Warrant to August 15, 2021.

 

8

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Pharma Holdings also holds certain governance rights in Rafael Pharmaceuticals including appointment of directors.

 

CS Pharma holds 16.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock. CS Pharma owned a $10 million Series D Convertible Note, with 3.5% interest, in Rafael Pharmaceuticals which was converted in January 2019.

 

The Company and its subsidiaries collectively own securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and 37% of the capital stock on a fully diluted basis (excluding the remainder of the Warrant).

 

The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class.

 

The Company serves as the managing member of Pharma Holdings, and Pharma Holdings serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their respective holdings. Any distributions that are made to CS Pharma from Rafael Pharmaceuticals that are in turn distributed by CS Pharma, will need to be made pro rata to all members, which would entitle Pharma Holdings to 50% (based on current ownership) of such distributions. Similarly, if Pharma Holdings were to distribute proceeds it receives from CS Pharma, it would do so on a pro rata basis, entitling the Company to 90% (based on current ownership) of such distributions.

 

The Company evaluated its investments in Rafael Pharmaceuticals in accordance with ASC 323, Investments - Equity Method and Joint Ventures, to establish the appropriate accounting treatment for its investment and has concluded that its investment did not meet the criteria for the equity method of accounting or consolidation and is carried at cost.

 

Rafael Pharmaceuticals is a VIE; however, the Company has determined that it is not the primary beneficiary as it does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance. In addition, the interests held in Rafael Pharmaceuticals are Series D Convertible Preferred Stock and do not represent in-substance common stock.

 

Howard Jonas has additional contractual rights to receive additional Rafael Pharmaceuticals shares (“Bonus Shares”) for an additional 10% of the fully diluted capital stock of Rafael Pharmaceuticals upon the achievement of certain milestones. The additional 10% is based on the fully diluted capital stock of Rafael Pharmaceuticals, excluding the remainder for the Warrant, at the time of issuance. If any of the milestones are met, the Bonus Shares are to be issued without any additional payment. Howard Jonas has the right to transfer the Bonus Shares, in his discretion, to others, including those who are instrumental to the future success of Rafael Pharmaceuticals.

 

The Company holds a Warrant to purchase a significant stake in Rafael Pharmaceuticals, as well as other equity and governance rights in Rafael Pharmaceuticals. As of October 31, 2020, the Company owned 51% of the issued and outstanding equity in Rafael Pharmaceuticals. At that date, approximately 8% of the issued and outstanding equity was owned by the Company’s subsidiary CS Pharma and 42% was held by the Company’s subsidiary Pharma Holdings. The Company’s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company’s total ownership to 56%. Based on the shares issued and outstanding of Rafael Pharmaceuticals as of October 31, 2020, the Company, and the Company’s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company’s affiliates would need to pay approximately $104 million to exercise the Warrant in full. including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any additional portion of the Warrant. Following any exercise, a portion of the Company’s interest in Rafael Pharmaceuticals would continue to be held for the benefit of the other equity holders in Pharma Holdings and CS Pharma. Given the Company’s anticipated available cash, the Company would not be able to exercise the Warrant in its entirety and the Company may never be able to exercise the Warrant in full. Rafael Pharmaceuticals may also issue additional equity interests, such as stock options, which will require the Company to pay additional cash to maintain the Company’s ownership percentage or exercise the Warrant in full.

 

9

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 4 – INVESTMENT IN ALTIRA

 

The Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) on May 13, 2020 with a member (the “Seller”) of Altira Capital & Consulting, LLC (“Altira”). Pursuant to the Purchase Agreement, on May 13, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceutical) on sales of certain Rafael Pharmaceuticals’ products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of interim data analysis in Rafael Pharmaceuticals’ Phase 3 pivotal trial (AVENGER 500®) of CPI-613® (devimistat); and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. The post-closing payments are to be made, at the Company’s discretion, in cash or shares of the Company’s Class B common stock based on the ten days average share price of the Company’s Class B common stock prior to the date of payment or any combination thereof.

 

The Company has accounted for the purchase of the 33.333% membership interest in Altira as an equity method investment in accordance with the guidance in ASC 323, Investments – Equity Method and Joint Ventures. The Company determined that a 33.333% membership interest in Altira indicates that the Company is able to exercise significant influence over Altira, and the Company’s membership interest is considered to be “more than minor” in accordance with the guidance. The cost of the investment was determined to be $4,000,000 pursuant to the terms of the Purchase Agreement. The contingent consideration, as described within the Purchase Agreement, in the amount of $6,000,000, will be recognized when the payments are considered probable.

 

For the year ended July 31, 2020, the Company determined that the investment in Altira was fully impaired and recorded an impairment charge of $4,000,000, which was the total amount of the investment in Altira.

 

During the three months ended October 31, 2020, the Company did not make any payments to the Seller, and the remaining payments due to the Seller of $3,500,000 are recorded as a current liability. The assets and operations of Altira are not significant, and the Company has identified the equity investment in Altira as a related party transaction (see Note 11).

 

NOTE 5 – INVESTMENT IN RP FINANCE, LLC

 

On February 3, 2020, Rafael Pharmaceuticals entered into a Line of Credit Loan Agreement (“Line of Credit Agreement”) with RP Finance which provides a revolving commitment of up to $50,000,000 to fund clinical trials and other capital needs.

 

The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals.

 

Under the Line of Credit Agreement, all funds borrowed will bear interest at the mid-term Applicable Federal Rate published by the U.S. Internal Revenue Service. The maturity date is the earlier of February 3, 2025, upon a change of control of Rafael Pharmaceuticals or a sale of Rafael Pharmaceuticals or its assets. Rafael Pharmaceuticals can draw on the facility on 60 days’ notice. The funds borrowed under the Line of Credit Agreement must be repaid out of certain proceeds from equity sales by Rafael Pharmaceuticals.

 

In connection with entering into the Line of Credit Agreement, Rafael Pharmaceuticals agreed to issue to RP Finance shares of its common stock representing 12% of the issued and outstanding shares of Rafael Pharmaceuticals common stock, with such interest subject to anti-dilution protection as set forth in the Line of Credit Agreement.

 

RP Finance has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance’s economic performance and, therefore, is not required to consolidate RP Finance. Therefore, we will use the equity method of accounting to record our investment in RP Finance. The Company has recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively. The assets and operations of RP Finance are not significant and the Company has identified the equity investment in RP Finance as a related party transaction (see Note 11).

 

In August 2020, Rafael Pharmaceuticals called for a $5,000,000 draw on the line of credit facility and the facility was funded by RP Finance LLC in the amount $5 million, in August 2020 and September 2020. For the three months ended October 31, 2020, the Company funded $1,875,000 in accordance with its 37.5% ownership interests in RP Finance.

10

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 6 – INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD.

 

LipoMedix is a development-stage, privately held Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery.

 

As of October 31, 2020, the Company held 68% of the issued and outstanding ordinary shares of LipoMedix and has consolidated this investment from the second quarter of fiscal 2018.

 

In November 2019, the Company provided bridge financing in the principal amount of $100,000 to LipoMedix with a maturity date of May 3, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.

 

In January 2020, the Company provided bridge financing in the principal amount of $125,000 to LipoMedix with a maturity date of May 3, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.

 

In March 2020, the Company provided bridge financing in the principal amount of $75,000 to LipoMedix with a maturity date of April 20, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.

 

On May 20, 2020, the Company entered into a Share Purchase Agreement with LipoMedix to purchase 4,000,000 ordinary shares of LipoMedix for an aggregate purchase price of $1,000,000. The purchase consideration consisted of the outstanding Promissory Notes between the Company and LipoMedix dated November 13, 2019, January 21, 2020 and March 27, 2020 in the total principal amount of $300,000 plus accrued interest, for an aggregate amount of $306,737, and $693,263 of cash, thereby increasing the Company’s ownership in Lipomedix from 58% to 68%.

 

NOTE 7 – FAIR VALUE MEASUREMENTS

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

 

Level 1 - quoted prices in active markets for identical assets or liabilities;

 

Level 2 - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

 

Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

 

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

 

11

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

The following is a listing of the Company’s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of October 31, 2020 and July 31, 2020:

 

   Fair value at October 31, 2020 
   Level 1   Level 2   Level 3   Total 
   (unaudited, in thousands) 
Assets:    
Hedge Funds  $   $   $6,454   $6,454 
Total  $   $   $6,454   $6,454 

 

   Fair value at July 31, 2020 
   Level 1   Level 2   Level 3   Total 
   (in thousands) 
Assets:    
Hedge Funds  $   $   $7,510   $7,510 
Total  $   $   $7,510   $7,510 

 

At October 31, 2020 and July 31, 2020, the Company did not have any liabilities measured at fair value on a recurring basis.

 

The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

   October 31,
2020
   October 31,
2019
 
   (unaudited, in thousands) 
Balance, beginning of period  $7,510   $5,125 
Liquidation of Hedge Fund Investments   (2,000)    
Total gain (loss) included in earnings   944    (37)
Balance, end of period  $6,454   $5,088 

 

Hedge funds classified as Level 3 include investments and securities which may not be based on readily observable data inputs. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. In October 2020, the Company received a $2 million distribution of the Company’s investments in Hedge Funds.

 

The Company holds $2.0 million in investments in securities in another entity that are not liquid, which were included in Investments - Other Pharmaceuticals in the accompanying consolidated balance sheets. The investment is accounted for under ASC 321, Investments - Equity Securities, using the measurement alternative as defined within the guidance, and the Company recorded an impairment loss of $0.7 million and $0 for the three months ended October 31, 2020 and 2019, respectively.

 

12

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Fair Value of Other Financial Instruments

 

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

 

Cash and cash equivalents, prepaid expense and other current assets, and accounts payable. At October 31, 2020 and July 31, 2020, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash and cash equivalents were classified as Level 1 and other current assets, and other current liabilities were classified as Level 2 of the fair value hierarchy.

 

Other assets and other liabilities. At October 31, 2020 and July 31, 2020, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.

 

The Company’s financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amounts of trade accounts receivable, trade accounts payable and due from related parties approximate their fair value due to their short-term nature. Other than noted above, the Company did not have any other assets or liabilities that were measured at fair value on a recurring basis as of October 31, 2020 or July 31, 2020.

 

NOTE 8 – TRADE ACCOUNTS RECEIVABLE

 

Trade Accounts Receivable consisted of the following:

 

   October 31,
2020
   July 31,
2020
 
   (unaudited, in thousands)   (in thousands) 
Trade Accounts Receivable  $415   $364 
Accounts Receivable - Related Party   150    121 
Less Allowance for Doubtful Accounts   (256)   (218)
Trade Accounts Receivable, net  $309   $267 

 

The current portion of deferred rental income included in prepaid expenses and other current assets was approximately $77 thousand and $11 thousand as of October 31, 2020 and July 31, 2020, respectively.

 

The noncurrent portion of deferred rental income included in Other Assets was approximately $1.5 million as of October 31, 2020 and July 31, 2020.

 

13

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 9 – PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following:

 

   October 31,
2020
   July 31,
2020
 
   (unaudited, in thousands)   (in thousands) 
Building and Improvements  $47,736   $47,591 
Land   10,412    10,412 
Furniture and Fixtures   1,145    1,145 
Other   256    256 
    59,549    59,404 
Less Accumulated Depreciation   (15,408)   (14,971)
Total  $44,141   $44,433 

 

Other property and equipment consist of other equipment and miscellaneous computer hardware. 

 

Depreciation expense pertaining to property and equipment was approximately $0.4 million and $0.5 million for the three months ended October 31, 2020 and 2019, respectively. 

 

The Company’s headquarters are located at 520 Broad Street in Newark, New Jersey where it occupies office space in the building owned by its subsidiary.

 

In August 2020, the Company sold an office/data center building in Piscataway, New Jersey, which was classified as held for sale at July 31, 2020.

 

NOTE 10 – LOSS PER SHARE

 

Basic net loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per shares includes potentially dilutive securities such as stock options and other convertible instruments. These securities have been excluded from the calculation of diluted net loss per shares for the three months ended October 31, 2020 and 2019 because all such securities are anti-dilutive for all periods presented.

 

The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

 

   Three months ended
October 31,
 
   2020   2019 
Stock Options   571,800    586,874 
Total   571,800    586,874 

 

The diluted loss per share computation equals basic loss per share for the three months ended October 31, 2020 and 2019 because the Company had a net loss and the impact of the assumed exercise of stock options would have been anti-dilutive.

 

14

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 11 – RELATED PARTY TRANSACTIONS

 

The Company has historically maintained an intercompany balance due to/from related parties that relates to cash advances for investments, loan repayments, charges for services provided to the Company by IDT Corporation, or IDT, and payroll costs for the Company’s personnel that were paid by IDT. The Company also receives rental income from various companies under common control to IDT. The Company recorded expense of approximately $66 thousand in related party services to IDT, of which approximately $30 thousand is included in due to related parties at October 31, 2020.

 

IDT leases approximately 80,000 square feet of office space plus parking occupied by IDT at 520 Broad Street, Newark, NJ and approximately 3,600 square feet of office space in Jerusalem, Israel. IDT paid the Company approximately $459 thousand for office rent and parking during the three months ended October 31, 2020 and 2019.  As of October 31, 2020 and 2019, IDT owed the Company approximately $69 thousand and $0, respectively, for office rent and parking.

 

The Company leases space to related parties which represented approximately 56% and 43% of the Company’s total revenue for the three months ended October 31, 2020 and 2019, respectively. See Note 16 for future minimum rent payments from related parties and other tenants.

 

The Company provides Rafael Pharmaceuticals with administrative, finance, accounting, tax and legal services. Howard S. Jonas serves as a Chairman of the Board of Rafael Pharmaceuticals and owns an equity interest in Rafael Pharmaceuticals. The Company billed Rafael Pharmaceuticals $120,000 for the three months ended October 31, 2020 and 2019, respectively. As of October 31, 2020 and July 31, 2020, Rafael Pharmaceuticals owed the Company $240,000 and $120,000, respectively, included in due from Rafael Pharmaceuticals.

 

In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8 million shares of Rafael Pharmaceuticals’ Series D Convertible Preferred Stock for $10 million representing approximately 8% of the equity on a fully-diluted basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10 million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee director of the Company. The remainder of the Warrant is held by Pharma Holdings.

 

On November 5, 2018, Pharma Holdings, LLC partially exercised a warrant to purchase 4 million shares of Rafael Pharmaceuticals’ Series D Convertible Preferred Stock for $5 million, of which $500,000 was contributed by Howard Jonas.

 

On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2020 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the three months ended October 31, 2020 and 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock.

 

On January 10, 2019, Pharma Holdings partially exercised a warrant to purchase 5.1 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $6.4 million, of which $640,000 was contributed by Howard Jonas.

 

15

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

On January 23, 2019, Pharma Holdings partially exercised a warrant to purchase 36.3 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $34.4 million, of which $3.4 million was contributed by Howard Jonas.

 

On January 29, 2020, in connection with the vesting of certain restricted shares of Class B common stock held by an officer of the Company, the Company withheld 5,238 shares to pay for the payroll taxes on the officer’s behalf, totaling approximately $116,000.

 

The Company acquired membership interest in Altira, a related party in fiscal 2020 and fiscal 2021 (see Note 4 and Note 17).

 

The Company recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively (see Note 5).

 

NOTE 12 – INCOME TAXES

 

The Company has completed its accounting for the income tax effects of the enactment of the Tax Act and Care Act. At October 31, 2020, the Company has federal net operating loss (“NOL”) carryforwards from domestic operations of approximately $34.4 million, to offset future taxable income. The Company has state NOLs of $15.3 million. The Company has NOLs from foreign operations of $2.3 million. As part of the Tax Act, federal NOLs generated in 2018 and later are not subject to an expiration period and are available to offset 80% of taxable income in the year in which they are utilized. The federal NOL carryforwards generated prior to 2018 will begin to expire in 2026. The state NOLs will begin to expire in 2038 and foreign NOLs do not expire.

 

The Company anticipates that its assumptions and estimates may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB, and various other taxing jurisdictions. In particular, the Company anticipates that the U.S. state jurisdictions will continue to determine and announce their conformity with or decoupling from the Tax Act, either in its entirety or with respect to specific provisions. Legislative and interpretive actions could result in adjustments to the Company’s balances.

 

16

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 13 – BUSINESS SEGMENT INFORMATION

 

The Company conducts business as two operating segments, Pharmaceuticals and Real Estate. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s CEO and chief operating decision-maker.

 

The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its Pharmaceuticals segment based primarily on research and development efforts and results of clinical trials and the Real Estate segment based primarily on results of operations. All investments in Rafael Pharmaceuticals and assets and expenses associated with LipoMedix and Barer are tracked separately in the Pharmaceuticals segment. All corporate costs are allocated to the Real Estate segment.

 

The Pharmaceuticals segment is comprised of preferred and common equity interests and the Warrant to purchase equity interests in Rafael Pharmaceuticals, a majority equity interest in LipoMedix and Barer. To date, the Pharmaceuticals segment has not generated any revenues.

 

The Real Estate segment consists of the Company’s real estate holdings, including a building at 520 Broad Street in Newark, New Jersey that houses headquarters for the Company and certain affiliates and its associated public garage and a portion of an office building in Israel.

 

In August 2020, the Company sold a 3-story, 65,253 square foot office building located at 225 Old New Brunswick Road in Piscataway, New Jersey to 225 ONBR, LLC, an entity unaffiliated with the Company. The purchase price was $3,875,000 and, after transfer taxes and broker’s commission, the Company received $3,675,638 in cash. As of July 31, 2020, the building was classified as held for sale on the consolidated balance sheet.

 

Operating results for the business segments of the Company are as follows:

 

(unaudited, in thousands)  Pharmaceuticals   Real
Estate
   Total 
Three Months Ended October 31, 2020            
Revenues  $   $1,053   $1,053 
Loss from operations   (533)   (1,958)   (2,491)
                
Three Months Ended October 31, 2019               
Revenues  $   $1,210   $1,210 
Loss from operations   (266)   (1,276)   (1,542)

 

Geographic Information

 

Revenues from tenants located outside of the United States were generated entirely from related parties located in Israel. Revenues from these non-United States customers as a percentage of total revenues were as follows (revenues by country are determined based on the location of the related facility):

 

Three Months Ended October 31, (unaudited)  2020   2019 
Revenue from tenants located in Israel   6%   5%

 

Net long-lived assets and total assets held outside of the United States, which are located in Israel, were as follows:

 

(unaudited, in thousands)  United
States
   Israel   Total 
October 31, 2020            
Long-lived assets, net  $42,564   $1,577   $44,141 
Total assets   130,744    3,874    134,618 
                
July 31, 2020               
Long-lived assets, net  $42,840   $1,593   $44,433 
Total assets   132,286    4,061    136,347 

 

17

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 14 – COMMITMENTS AND CONTINGENCIES

 

Legal Proceedings

  

On September 17, 2018, LipoMedix was notified of a claim initiated by one of its founders seeking payment of consulting fees in the amount of approximately $377,000 and seeking to place restrictions on LipoMedix’s bank accounts and other assets to protect his claim. LipoMedix did not believe that the individual had the right to receive any payment at that time. LipoMedix responded to the demand for the placement of restrictions on its assets. In May 2019, LipoMedix received a letter from the other founder requesting payment of his consulting fees. On July 15, 2019, the parties settled the matters and the two founders will be paid a percentage of future investments and certain other proceeds.

 

On July 12, 2019, the Company received a Citation and Notification of Penalty from the Occupational Safety and Health Administration of the U.S. Department of Labor, or OSHA, related to an OSHA inspection of 520 Broad Street, Newark, New Jersey. The citation seeks to impose penalties related to alleged violations of the Occupation Safety and Health Act of 1970 at 520 Broad Street. On July 31, 2019, the Company filed a Notice of Contest with OSHA contesting the citation in its entirety. On February 14, 2020, the Company entered into a Settlement Agreement with OSHA, as related to the citation received on July 12, 2019. As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021.

 

The Company accounts for contingencies when a loss is considered probable and can be reasonably estimated. For the matters disclosed above, a legal accrual for approximately $64,000 has been recorded for legal fees and losses believed to be both probable and reasonably estimable, but an exposure to additional loss may exist in excess of the amount accrued.

 

On December 31, 2019, an employee of the Company filed a complaint in connection with the incident that led to the OSHA inspection noted above for personal injuries against the Company and other parties in the New Jersey Supreme Court for an incident that took place on January 31, 2019 at 520 Broad Street, Newark, New Jersey. The Company intends to vigorously defend this matter. The loss is considered remote and no accrual has been recorded.

 

The Company may from time to time be subject to legal proceedings that may arise in the ordinary course of business. Although there can be no assurance in this regard, other than noted above, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

 

18

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 15 – EQUITY

 

On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million that was convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly.

 

In August 2019, the note, including interest of approximately $667,000 was converted into 1,849,749 shares of Class B common stock.

 

Pursuant to the Company’s 2018 Equity Incentive Plan, each of our three non-employee directors of the Company was granted 4,203 restricted shares of our Class B common stock in January 2020 which fully vested on the date of the grant. The fair value of the awards on the date of the grant was approximately $208,000 which was included in selling, general and administrative expense.

 

During the three months ended October 31, 2020, 8,750 options were exercised. At October 31, 2020, there was no unrecognized compensation cost related to non-vested stock options.

 

Stock Options

 

A summary of stock option activity for the Company is as follows:

 

   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
(in years)
   Aggregate
Intrinsic Value
(in thousands)
 
Outstanding at July 31, 2020   580,874   $4.90    2.65   $2,846 
Granted                  
Exercised   (8,750)   4.90           
Cancelled / Forfeited   (324)              
Outstanding at October 31, 2020   571,800   $4.90    2.40   $2,802 
Exercisable at October 31, 2020   571,800   $4.90    2.40   $2,802 

 

Restricted Stock

 

The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.

 

A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:

 

   Number of
Non-vested
Shares
   Weighted
Average
Grant Date
Fair Value
 
Outstanding at July 31, 2020   123,104   $10.80 
Granted   9,360    16.58 
Vested   (7,027)   (16.91)
Cancelled / Forfeited   (2,099)   (13.54)
Non-vested shares at October 31, 2020   123,338   $13.79 

 

At October 31, 2020, there was $1.4 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 2.18 years.

 

19

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 16 – LEASES

 

The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029. Lease income included on the consolidated statements of operations and comprehensive loss for the three months ended October 31, 2020 and 2019 was $634 thousand and $866 thousand, respectively.

 

The future contractual minimum lease payments to be received (excluding operating expense reimbursements) by the Company as of October 31, 2020, under non-cancellable operating leases which expire on various dates through 2028 are as follows:

 

Year ending July 31,  Related
Parties
   Other   Total 
   (in thousands) 
2021 (remaining)  $1,532   $603   $2,135 
2022   2,078    776    2,854 
2023   2,117    592    2,709 
2024   2,155    538    2,693 
2025   1,659    550    2,209 
Thereafter       1,948    1,948 
Total Minimum Future Rental Income  $9,541   $5,007   $14,548 

 

The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel. The annual rent is approximately $2.0 million in the aggregate. The related parties have the right to terminate the domestic leases upon four months’ notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. A related party has the right to terminate the Israeli lease upon four months’ notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years.

 

20

 

RAFAEL HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

NOTE 17 – SUBSEQUENT EVENTS

 

In November 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount of $5 million. The Company funded $1.875 million of the $5 million draw in accordance with its 37.5% ownership interests in RP Finance.

 

The Company entered into a Membership Interest Purchase Agreement (the “Second Altira Agreement”) on December 7, 2020 with a member (the “Seller”) of Altira. Pursuant to the Second Altira Agreement, on December 7, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceuticals) on sales of certain Rafael Pharmaceuticals’ products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each, commencing on January 4, 2021; 2) $3,000,000 due on January 4, 2021; 3) $3,000,000 due within fifteen (15) days of the earlier to occur of either the completion of Rafael Pharmaceuticals’ Phase III pivotal trial (AVENGER 500®) of CPI-613® (devimistat) or May 31, 2021 and not before January 4, 2021; and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. Certain of the post-closing payments may be made, at the Company’s discretion, in cash or shares of the Company’s Class B common stock based on the ten day average share price of the Company’s Class B common stock prior to the date of payment or any combination thereof.

 

On December 7, 2020, Rafael Holdings entered into a Securities Purchase Agreement (the “SPA”) for the sale of 567,437 shares of the Company’s Class B common stock at a price per share of $22.91 (which was the closing price for the Class B common stock on the New York Stock Exchange on December 4, 2020 the trading day immediately preceding the date of the SPA) for an aggregate purchase price of $13 million. In connection with the purchases, each purchaser was granted warrants to purchase twenty percent (20%) of the shares of Class B common stock purchased by such purchaser. The warrants have an exercise price of $22.91 per share and expire on June 6, 2022. The Company issued warrants to purchase an aggregate of 113,487 shares of Class B common stock. A majority of the proceeds received pursuant to the SPA are expected to be used by the Company to exercise an additional portion of the warrant held by the Company’s subsidiary to purchase equity securities of Rafael Pharmaceuticals, Inc. in order to maintain the Company’s relative position as a percentage of shares outstanding as well as the fully-diluted equity of Rafael Pharmaceuticals in light of issuances of Rafael Pharmaceuticals equity securities to third-party shareholders of Rafael Pharmaceuticals, including due to warrant exercises by these shareholders. The Company intends to use additional proceeds to fund the operations of its drug development programs including its Barer Institute subsidiary, and for general corporate purposes. Under the SPA, two entities, on whose Boards of Directors Howard Jonas, the Registrant’s Chief Executive Officer and Chairman of the Board serves, each purchased 218,245 shares of Class B common stock for consideration of $10 million. The shares and warrants were issued in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended.

 

On December 10, 2020, a controlled subsidiary of the Company, Farber Partners LLC, or Farber, reached an agreement with Princeton University to in-license certain patents and related information related to the serine hydroxymethyltransferase (SHMT) inhibitor program developed by the laboratory of Dr. Joshua D. Rabinowitz at Princeton. Farber will pay Princeton a minimum annual royalty payment of $50 thousand, in addition to percentage royalties and a percentage of any sublicense revenue. Additionally, there are development milestone payments which Farber will pay Princeton for the first three products developed by Farber, or any sublicensees or affiliates.

 

21

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

Rafael Holdings, Inc., (“Rafael Holdings” or the “Company”), a Delaware corporation, owns interests in pre-clinical and clinical stage pharmaceutical companies and commercial real estate assets. The assets are operated as two separate lines of business.

 

The pharmaceutical holdings include preferred and common equity interests and a warrant to purchase additional equity interests in Rafael Pharmaceuticals, Inc., or Rafael Pharmaceuticals, which is a clinical stage, oncology-focused, pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells, and a majority equity interest in LipoMedix Pharmaceuticals Ltd., or LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, in 2019, we established the Barer Institute (“Barer”), a wholly-owned early stage venture focused on developing a pipeline of therapeutic compounds, including compounds to regulate cancer metabolism. The venture is pursuing collaborative research agreements with leading scientists from top academic institutions. In addition, we have recently initiated efforts to develop other early stage pharmaceutical ventures.

 

The commercial real estate holdings consist of a building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and certain other entities and hosts other tenants and an associated 800-car public garage, and a portion of a building in Israel. In August 2020, the Company sold an office/data center building in Piscataway, New Jersey, which was classified as held for sale at July 31, 2020.

 

Business Update - COVID-19

 

In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and since has spread around the globe. We actively monitor the outbreak and its potential impact on our operations and those of our holdings.

 

The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible from the pandemic, including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies.

 

We have one tenant that has not paid rent for August 2020 due to the New Jersey state gym closures; however, the tenant subsequently resumed rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of our real estate portfolio as well as efforts to monetize those assets.

 

We have implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings.

 

Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of our holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic’s impact on the U.S. and global economies, changes in our customers’ behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, we may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business.

 

22

 

Results of Operations

 

Our business consists of two reportable segments - Pharmaceuticals and Real Estate. We evaluate the performance of our Pharmaceuticals segment based primarily on research and development efforts and results of clinical trials and our Real Estate segment based primarily on results of operations. Accordingly, the income and expense line items below loss from operations are only included in the discussion of consolidated results of operations.

 

Three Months Ended October 31, 2020 Compared to Three Months Ended October 31, 2019

 

Pharmaceuticals Segment

 

Our consolidated expenses for our Pharmaceuticals segment were as follows:

 

   Three Months Ended
October 31,
   Change 
   2020   2019   $   % 
   (unaudited, in thousands) 
Selling, general and administrative  $(18)  $(21)  $3    (14)%
Research and development   (515)   (245)   (270)   110%
Depreciation               —% 
Loss from operations  $(533)  $(266)  $(267)   100%

 

To date, the Pharmaceuticals segment has not generated any revenues. The entirety of the expenses in the Pharmaceuticals segment relate to the activities of LipoMedix and Barer. Research and development increased for the three months ended October 31, 2020 compared to the three months ended October 31, 2019 due to Barer commencing operations in fiscal 2020. As of October 31, 2020 and 2019, we held a 68% and 52% interest, respectively, in LipoMedix and consolidated our majority interest in LipoMedix.

 

Real Estate Segment

 

Our consolidated income and expenses for our Real Estate segment were as follows:

 

   Three Months Ended
October 31,
   Change 
   2020   2019   $   % 
   (unaudited, in thousands) 
Rental – Third Party  $236   $346   $(110)   (32)%
Rental – Related Party   520    520        —% 
Parking   177    224    (47)   (21)%
Other   120    120        —% 
Selling, general and administrative   (2,574)   (2,020)   (554)   27%
Depreciation   (437)   (466)   29    (6)%
Loss from operations  $(1,958)  $(1,276)  $(682)   53%

 

Revenues. Rental and Parking revenues decreased by approximately $157,000 for the three months ended October 31, 2020, compared to the three months ended October 31, 2019, primarily due to the sale of the building in Piscataway and the related reduced rental income, in addition to the decrease in parking as the majority of the customers who were utilizing the parking garage are now working from home due to COVID-19.

 

23

 

Selling, general and administrative expenses.  Selling, general and administrative expenses consists mainly of payroll, benefits, facilities, consulting and professional fees. The increase in selling, general and administrative expenses for the three months ended October 31, 2020, compared to the three months ended October 31, 2019 is primarily due to increased insurance and real estate tax costs.

 

Depreciation expenses. Depreciation expenses decreased for the three months ended October 31, 2020, compared to the three months ended October 31, 2019 due to the sale of the building in Piscataway, New Jersey.

 

Consolidated Operations

 

Our consolidated income and expense line items below income from operations were as follows:

 

   Three Months Ended
October 31,
   Change 
   2020   2019   $   % 
   (unaudited, in thousands) 
Loss from operations  $(2,491)  $(1,542)  $(949)   62%
Interest expense, net       (64)   64    (100)%
Net loss resulting from foreign exchange transactions       (5)   5    (100)%
Gain on sale of building   749        749    100%
Impairment of investments - Other Pharmaceuticals   (724)       (724)   (100)%
Unrealized gain (loss) on investments - Hedge Funds   944    (37)   981    (2651)%
Loss before income taxes   (1,522)   (1,648)   126    8%
Provision for income taxes   (5)   (4)   (1)   25%
Equity in earnings of RP Finance   96        96    100%
Consolidated net loss   (1,431)   (1,652)   221    (13)%
Net loss (income) attributable to noncontrolling interests   15    (54)   69    (128)%
Net loss attributable to Rafael Holdings, Inc.  $(1,446)  $(1,598)  $152    (10)%

 

Interest expense, net. Interest expense, net was $0 for the three months ended October 31, 2020 and $64 thousand for the year months ended October 31, 2019. The reduction is due to the decrease in interest expense related to the conversion of the convertible note in January 2019.

 

Net loss resulting from foreign exchange transactions.  Net loss resulting from foreign exchange transactions is composed entirely from changes in movements in New Israeli Shekels relative to the U.S. Dollar.

 

Impairment of investments - Other Pharmaceuticals. The Company recorded an impairment loss of $724 thousand related to the Company’s investment using the measurement alternative for the three months ended October 31, 2020.

 

Unrealized gain (loss) on investments - Hedge Funds. The Company recorded unrealized gains of approximately $944 thousand and unrealized losses of $37 thousand for the three months ended October 31, 2020 and 2019, respectively.

 

Gain on sale of building. In August 2020, the Company sold a building located in Piscataway, New Jersey, and recognized a gain on the sale of approximately $749 thousand.

 

24

 

Equity in earnings of RP Finance. The Company recognized approximately $96 thousand in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020.

 

Net loss (income) attributable to noncontrolling interests. The change in the net loss (income) attributable to noncontrolling interests was due to LipoMedix for the three months ended October 31, 2020 and 2019, respectively.

 

Liquidity and Capital Resources

 

General

 

As of October 31, 2020, we had cash and cash equivalents of $7.2 million. We expect our cash from operations in the next 12 months and the balance of cash and cash equivalents that we held as of October 31, 2020 in addition to the subsequent $13 million obtained in December 2020 from Share Purchase Agreements related to the sale of the Company’s Class B common stock (see Note 17) to be sufficient to meet our currently anticipated working capital, research and development, and capital expenditure requirements during the next 12 months from the issuance of these consolidated financial statements.

 

   Three Months Ended
October, 31
 
   2020   2019 
  

(unaudited, in thousands)

 
Cash flows (used in) provided by        
Operating activities  $(2,653)  $(936)
Investing activities   3,638    (321)
Financing activities   43     
Effect of exchange rates on cash and cash equivalents   (3)   4 
Decrease in cash and cash equivalents  $1,025   $(1,253)

 

Operating Activities

 

The increase in cash used in operating activities for the three months ended October 31, 2020 as compared to for the three months ended October 31, 2019 was primarily related to the net loss, and different impact from non-cash items, primarily the unrealized gain on investments - Hedge Funds and the gain on the sale of the Piscataway building.

  

Investing Activities

 

Cash provided by investing activities for the three months ended October 31, 2020 was primarily related to the proceeds from the sale of the building in Piscataway, New Jersey in August 2020 and proceeds from hedge funds, offset by the payment to fund the RP Finance line of credit.

 

Cash used in investing activities for the three months ended October 31, 2019 related to building improvements made to our real estate holdings.

 

Financing Activities

 

Cash provided by financing activities for the three months ended October 31, 2020 was related to proceeds from the exercise of options to purchase Class B common stock of the Company.

 

There was no cash provided by or used in financing activities for the three months ended October 31, 2019.

 

We do not anticipate paying dividends on our common stock until we achieve sustainable profitability and retain certain minimum cash reserves. The payment of dividends in any specific period will be at the sole discretion of our Board of Directors.

 

25

 

Trends and Uncertainties – COVID-19

 

We actively monitor the COVID-19 pandemic and its potential impact on our operations and those of our holdings. Although our operations are mainly in the United States, we have assets outside of the United States, and some of our pharmaceutical holdings conduct operations, manufacturing and clinical trial activities in Europe and Asia.

 

The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible from the pandemic, including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies.

 

We had one tenant that has not paid rent for August 2020 due to the New Jersey state gym closures; however, the tenant subsequently resumed rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of our real estate portfolio as well as efforts to monetize those assets.

 

We have implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings.

 

Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of our holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic’s impact on the U.S. and global economies, changes in our customers’ behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, we may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business.

 

Critical Accounting Policies and Estimates

 

We have chosen accounting policies that we believe are appropriate to accurately and fairly report our operating results and financial condition in conformity with U.S. GAAP. We apply these accounting policies in a consistent manner. Our significant accounting policies are discussed in Note 1, “Description of Business and Summary of Significant Accounting Policies,” to our consolidated financial statements included in our 2020 Form 10-K.

 

26

 

The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis and may retain outside consultants to assist in our evaluation. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for fiscal 2020 (“2020 Form 10-K”). There have been no material changes in our critical accounting policies and procedures during the three months ended October 31, 2020.

 

Off-Balance Sheet Arrangements

 

We do not have any “off-balance sheet arrangements,” as defined in relevant SEC regulations that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

 

IDT is generally responsible for our federal, state, local and foreign income taxes for periods before and including the Spin-Off. We are generally responsible for all other taxes relating to our business. We and IDT will each generally be responsible for managing those disputes that relate to the taxes for which each of us is responsible and, under certain circumstances, may jointly control any dispute relating to taxes for which both of us are responsible.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risks.

 

There have been no significant changes in our market risk exposures from those described in Item 7A of our 2020 Form 10-K.

 

We are monitoring the potential impacts of the COVID-19 pandemic on our business. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact on the global financial markets may reduce our ability to access capital, which could negatively impact our long-term liquidity.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of October 31, 2020.

 

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended October 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

27

 

Part II. OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

Legal proceedings in which we are involved are more fully described in Note 14 to the Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

 

Item 1A. Risk Factors

 

Item 1A Risk Factors contained in our 2020 Form 10-K includes a discussion of risk factors related to investment in our common stock which is incorporated herein. There were no material changes from the risk factors associated with our business previously disclosed in Part I, Item 1A “Risk Factors” of our 2020 Form 10-K.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5.  Other Information

 

None.

 

28

 

Item 6.  Exhibits

 

Exhibit

Number

  Description
     
31.1*   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
31.2*   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
     
32.1*   Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
32.2*   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
     
101.INS*   XBRL Instance Document
     
101.SCH*   XBRL Taxonomy Extension Schema Document
     
101.CAL*   XBRL Taxonomy Extension Calculation Linkbase Document
     
101.LAB*   XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE*   XBRL Taxonomy Extension Presentation Linkbase Document
     
101.DEF*   XBRL Taxonomy Extension Definition Linkbase Document

 

*Filed or furnished herewith.

 

29

 

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 thereunto duly authorized.

 

Date: December 15, 2020 Rafael Holdings, Inc.
     
  By: /s/ Howard S. Jonas
    Howard S. Jonas
Chief Executive Officer
     
  By: /s/ David Polinsky
    David Polinsky
Chief Financial Officer

 

 

30

 

 

EX-31.1 2 f10q1020ex31-1_rafaelholding.htm CERTIFICATION

EXHIBIT 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER 

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Howard S. Jonas, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Rafael Holdings, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: December 15, 2020

 

/s/ Howard S. Jonas  
Howard S. Jonas  
Chief Executive Officer  
EX-31.2 3 f10q1020ex31-2_rafaelholding.htm CERTIFICATION

EXHIBIT 31.2

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER 

PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, David Polinsky, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of Rafael Holdings, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: December 15, 2020

 

/s/ David Polinsky  
David Polinsky  
Chief Financial Officer  

 

EX-32.1 4 f10q1020ex32-1_rafaelholding.htm CERTIFICATION

EXHIBIT 32.1

 

Certification Pursuant to
18 U.S.C. Section 1350
(as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act Of 2002)

 

In connection with the Quarterly Report of Rafael Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended October 31, 2020 as filed with the Securities and Exchange Commission (the “Report”), I, Howard S. Jonas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 15, 2020  
   
/s/ Howard S. Jonas  
Howard S. Jonas  
Chief Executive Officer  

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Rafael Holdings, Inc. and will be retained by Rafael Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

EX-32.2 5 f10q1020ex32-2_rafaelholding.htm CERTIFICATION

EXHIBIT 32.2

 

Certification Pursuant to
18 U.S.C. Section 1350
(as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act Of 2002)

 

In connection with the Quarterly Report of Rafael Holdings, Inc. (the “Company”) on Form 10-Q for the quarter ended October 31, 2020 as filed with the Securities and Exchange Commission (the “Report”), I, David Polinsky, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: December 15, 2020

 

/s/ David Polinsky  
David Polinsky  
Chief Financial Officer  

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Rafael Holdings, Inc. and will be retained by Rafael Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

 

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(&#x201c;Rafael Holdings&#x201d; or the &#x201c;Company&#x201d;), a Delaware corporation, owns interests in pre-clinical and clinical stage pharmaceutical companies and commercial real estate assets. The assets are operated as two separate lines of business.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The pharmaceutical holdings include preferred and common equity interests and a warrant to purchase additional equity interests in Rafael Pharmaceuticals, Inc., or Rafael Pharmaceuticals, which is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells; and, a majority equity interest in LipoMedix Pharmaceuticals Ltd., or LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, in 2019, we established the Barer Institute (&#x201c;Barer&#x201d;), a wholly-owned early stage venture focused on developing a pipeline of therapeutic compounds, including compounds to regulate cancer metabolism. The venture is pursuing collaborative research agreements with leading scientists from top academic institutions to develop other early stage ventures. In addition, we have recently initiated efforts to develop other early stage pharmaceutical ventures.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The commercial real estate holdings consist of a building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and certain other entities and hosts other tenants and an associated 800-car public garage, and a portion of a building in Israel. 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"> <td style="padding-left: 2.65pt"><font style="font-size: 10pt">CS Pharma Holdings, LLC</font></td> <td>&#xa0;</td> <td style="padding-left: 2.65pt"><font style="font-size: 10pt">United States &#x2013; Delaware</font></td> <td>&#xa0;</td> <td>&#xa0;</td> <td style="text-align: right"><font style="font-size: 10pt">45</font></td> <td style="white-space: nowrap"><font style="font-size: 10pt">%*</font></td></tr> </table><table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><tr style="vertical-align: top; text-align: justify"> <td style="width: 0in"></td><td style="width: 0.25in; text-align: left"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</font></td><td style="text-align: justify"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt">50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. 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Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company&#x2019;s fiscal year ends on July 31 of each calendar year. 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Therefore, these financial statements should be read in conjunction with the Company&#x2019;s audited financial statements and notes thereto included in the Company&#x2019;s Annual Report on Form 10-K for the year ended July 31, 2020, or the 2020 Form 10-K, as filed with the U.S. Securities and Exchange Commission (&#x201c;SEC&#x201d;).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Use of Estimates&#xa0;&#xa0;&#xa0;&#xa0;</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. 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Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic&#x2019;s impact on the U.S. and global economies, changes in our customers&#x2019; behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. 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Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company&#x2019;s performance obligation is satisfied, consistent with the Company&#x2019;s previous accounting.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Research and Development Costs</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Research and development costs and expenses incurred by consolidated entities consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Recently Issued Accounting Standards Not Yet Adopted</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In June 2016, the FASB issued ASU 2016-13, <i>Financial Instruments &#x2013; Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i>, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking &#x201c;expected loss&#x201d; model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of the pending adoption of the new standard on its consolidated financial statements and intends to adopt the standard on August 1, 2023.<i>&#xa0;</i></font></p><br/> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Basis of Presentation</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (&#x201c;U.S. GAAP&#x201d;) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company&#x2019;s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2020 refers to the fiscal year ended July 31, 2020).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Operating results for the three months ended October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021. The balance sheet at July 31, 2020 has been derived from the Company&#x2019;s audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company&#x2019;s audited financial statements and notes thereto included in the Company&#x2019;s Annual Report on Form 10-K for the year ended July 31, 2020, or the 2020 Form 10-K, as filed with the U.S. Securities and Exchange Commission (&#x201c;SEC&#x201d;).</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Use of Estimates&#xa0;&#xa0;&#xa0;&#xa0;</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><i>Risks and Uncertainties - COVID-19</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and has since spread around the globe. The Company actively monitors the outbreak and its potential impact on its operations and those of the Company&#x2019;s holdings.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible from the pandemic, including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company has one tenant that has not paid rent for August 2020 due to the New Jersey state gym closures; however, the tenant subsequently resumed rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of the Company&#x2019;s real estate portfolio as well as efforts to monetize those assets.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company has implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of the Company&#x2019;s holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic&#x2019;s impact on the U.S. and global economies, changes in our customers&#x2019; behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, the Company may incur expenses or delays relating to such events outside of the Company&#x2019;s control, which could have a material adverse impact on the Company&#x2019;s business.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Investments</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company&#x2019;s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Investments in businesses that the Company does not control, but in which the Company has the ability to exercise significant influence over operating and financial matters, are accounted for using the equity method. Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. The Company periodically evaluates its investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Variable Interest Entities</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In accordance with Accounting Standards Codification (&#x201c;ASC&#x201d;) 810, <i>Consolidation</i>, the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities (&#x201c;VIEs&#x201d;). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company &#x2013; that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE&#x2019;s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Cost Method Investments </i>- Rafael Pharmaceuticals (see Note 3) is a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals&#x2019; economic performance. Cost method investments are presented as &#x201c;Investments - Rafael Pharmaceuticals.&#x201d;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Equity Method Investments </i>- RP Finance, LLC (&#x201c;RP Finance&#x201d;), (see Note 5), has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance&#x2019;s economic performance and, therefore, is not required to consolidate RP Finance. The Company accounts for its investment in RP Finance using the equity method of accounting.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Revenue Recognition</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company applies the five-step approach as described in ASC 606, <i>Revenue from Contracts with Customers</i>, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the entity satisfies a performance obligation.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss. As an owner and operator of real estate, the Company derives the majority of its revenue from leasing office and parking space to tenants at its properties. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842, <i>Leases</i>.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company&#x2019;s performance obligation is satisfied, consistent with the Company&#x2019;s previous accounting.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Research and Development Costs</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Research and development costs and expenses incurred by consolidated entities consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Recently Issued Accounting Standards Not Yet Adopted</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In June 2016, the FASB issued ASU 2016-13, <i>Financial Instruments &#x2013; Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</i>, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking &#x201c;expected loss&#x201d; model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of the pending adoption of the new standard on its consolidated financial statements and intends to adopt the standard on August 1, 2023.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 3 &#x2013; INVESTMENT IN RAFAEL PHARMACEUTICALS</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Rafael Pharmaceuticals is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company owns equity interests and rights in Rafael Pharmaceuticals through a 90%-owned non-operating subsidiary, Pharma Holdings, LLC, or Pharma Holdings.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Pharma Holdings owns 50% of CS Pharma Holdings, LLC, or CS Pharma, a non-operating entity that owns equity interests in Rafael Pharmaceuticals. Accordingly, the Company holds an effective 45% indirect interest in the assets held by CS Pharma.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Howard Jonas, Chairman of the Board and Chief Executive Officer of the Company, and Chairman of the Board of Rafael Pharmaceuticals, owns 10% of Pharma Holdings.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the &#x201c;Warrant&#x201d;). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments, and will expire upon the earlier of June 30, 2021, a qualified initial public offering, or liquidation event of Rafael Pharmaceuticals.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On March 25, 2020, the Board of Directors of Rafael Pharmaceuticals extended the expiration date of the Warrant held by Pharma Holdings to purchase shares of the Warrant from December 31, 2020 to June 30, 2021 and on August 31, 2020 the Board of Directors of Rafael Pharmaceuticals further extended the expiration date of the Warrant held by Pharma Holdings, LLC to purchase shares of the Warrant to August 15, 2021.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">Pharma Holdings also holds certain governance rights in Rafael Pharmaceuticals including appointment of directors.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">CS Pharma holds 16.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock. CS Pharma owned a $10 million Series D Convertible Note, with 3.5% interest, in Rafael Pharmaceuticals which was converted in January 2019.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company and its subsidiaries collectively own securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and 37% of the capital stock on a fully diluted basis (excluding the remainder of the Warrant).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company serves as the managing member of Pharma Holdings, and Pharma Holdings serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their respective holdings. Any distributions that are made to CS Pharma from Rafael Pharmaceuticals that are in turn distributed by CS Pharma, will need to be made pro rata to all members, which would entitle Pharma Holdings to 50% (based on current ownership) of such distributions. Similarly, if Pharma Holdings were to distribute proceeds it receives from CS Pharma, it would do so on a pro rata basis, entitling the Company to 90% (based on current ownership) of such distributions.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company evaluated its investments in Rafael Pharmaceuticals in accordance with ASC 323, <i>Investments - Equity Method and Joint Ventures,</i> to establish the appropriate accounting treatment for its investment and has concluded that its investment did not meet the criteria for the equity method of accounting or consolidation and is carried at cost.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Rafael Pharmaceuticals is a VIE; however, the Company has determined that it is not the primary beneficiary as it does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals&#x2019; economic performance. In addition, the interests held in Rafael Pharmaceuticals are Series D Convertible Preferred Stock and do not represent in-substance common stock.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Howard Jonas has additional contractual rights to receive additional Rafael Pharmaceuticals shares (&#x201c;Bonus Shares&#x201d;) for an additional 10% of the fully diluted capital stock of Rafael Pharmaceuticals upon the achievement of certain milestones. The additional 10% is based on the fully diluted capital stock of Rafael Pharmaceuticals, excluding the remainder for the Warrant, at the time of issuance. If any of the milestones are met, the Bonus Shares are to be issued without any additional payment. Howard Jonas has the right to transfer the Bonus Shares, in his discretion, to others, including those who are instrumental to the future success of Rafael Pharmaceuticals.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company holds a Warrant to purchase a significant stake in Rafael Pharmaceuticals, as well as other equity and governance rights in Rafael Pharmaceuticals. As of October 31, 2020, the Company owned 51% of the issued and outstanding equity in Rafael Pharmaceuticals. At that date, approximately 8% of the issued and outstanding equity was owned by the Company&#x2019;s subsidiary CS Pharma and 42% was held by the Company&#x2019;s subsidiary Pharma Holdings. The Company&#x2019;s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company&#x2019;s total ownership to 56%. Based on the shares issued and outstanding of Rafael Pharmaceuticals as of October 31, 2020, the Company, and the Company&#x2019;s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company&#x2019;s affiliates would need to pay approximately $104 million to exercise the Warrant in full. including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any additional portion of the Warrant. Following any exercise, a portion of the Company&#x2019;s interest in Rafael Pharmaceuticals would continue to be held for the benefit of the other equity holders in Pharma Holdings and CS Pharma. Given the Company&#x2019;s anticipated available cash, the Company would not be able to exercise the Warrant in its entirety and the Company may never be able to exercise the Warrant in full. Rafael Pharmaceuticals may also issue additional equity interests, such as stock options, which will require the Company to pay additional cash to maintain the Company&#x2019;s ownership percentage or exercise the Warrant in full.</p><br/> 0.90 0.50 0.45 0.10 Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the &#x201c;Warrant&#x201d;). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share 16700000 10000000 0.035 0.51 0.37 The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class. 0.50 0.90 0.10 0.10 the Company owned 51% of the issued and outstanding equity in Rafael Pharmaceuticals. At that date, approximately 8% of the issued and outstanding equity was owned by the Company&#x2019;s subsidiary CS Pharma and 42% was held by the Company&#x2019;s subsidiary Pharma Holdings. The Company&#x2019;s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company&#x2019;s total ownership to 56%. Based on the shares issued and outstanding of Rafael Pharmaceuticals as of October 31, 2020, the Company, and the Company&#x2019;s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company&#x2019;s affiliates would need to pay approximately $104 million to exercise the Warrant in full. including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any additional portion of the Warrant. <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 4 &#x2013; INVESTMENT IN ALTIRA</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company entered into a Membership Interest Purchase Agreement (the &#x201c;Purchase Agreement&#x201d;) on May 13, 2020 with a member (the &#x201c;Seller&#x201d;) of Altira Capital &amp; Consulting, LLC (&#x201c;Altira&#x201d;). Pursuant to the Purchase Agreement, on May 13, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceutical) on sales of certain Rafael Pharmaceuticals&#x2019; products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of interim data analysis in Rafael Pharmaceuticals&#x2019; Phase 3 pivotal trial (AVENGER 500&#xae;) of CPI-613&#xae; (devimistat); and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. The post-closing payments are to be made, at the Company&#x2019;s discretion, in cash or shares of the Company&#x2019;s Class B common stock based on the ten days average share price of the Company&#x2019;s Class B common stock prior to the date of payment or any combination thereof.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company has accounted for the purchase of the 33.333% membership interest in Altira as an equity method investment in accordance with the guidance in ASC 323, <i>Investments &#x2013; Equity Method and Joint Ventures.</i> The Company determined that a 33.333% membership interest in Altira indicates that the Company is able to exercise significant influence over Altira, and the Company&#x2019;s membership interest is considered to be &#x201c;more than minor&#x201d; in accordance with the guidance. The cost of the investment was determined to be $4,000,000 pursuant to the terms of the Purchase Agreement. The contingent consideration, as described within the Purchase Agreement, in the amount of $6,000,000, will be recognized when the payments are considered probable.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">For the year ended July 31, 2020, the Company determined that the investment in Altira was fully impaired and recorded an impairment charge of $4,000,000, which was the total amount of the investment in Altira.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">During the three months ended October 31, 2020, the Company did not make any payments to the Seller, and the remaining payments due to the Seller of $3,500,000 are recorded as a current liability. The assets and operations of Altira are not significant, and the Company has identified the equity investment in Altira as a related party transaction (see Note 11).</font></p><br/> the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceutical) on sales of certain Rafael Pharmaceuticals&#x2019; products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of interim data analysis in Rafael Pharmaceuticals&#x2019; Phase 3 pivotal trial (AVENGER 500&#xae;) of CPI-613&#xae; (devimistat); and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. The post-closing payments are to be made, at the Company&#x2019;s discretion, in cash or shares of the Company&#x2019;s Class B common stock based on the ten days average share price of the Company&#x2019;s Class B common stock prior to the date of payment or any combination thereof. 0.33333 4000000 6000000 4000000 3500000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 5 &#x2013; INVESTMENT IN RP FINANCE, LLC</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On February 3, 2020, Rafael Pharmaceuticals entered into a Line of Credit Loan Agreement (&#x201c;Line of Credit Agreement&#x201d;) with RP Finance which provides a revolving commitment of up to $50,000,000 to fund clinical trials and other capital needs.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Under the Line of Credit Agreement, all funds borrowed will bear interest at the mid-term Applicable Federal Rate published by the U.S. Internal Revenue Service. The maturity date is the earlier of February 3, 2025, upon a change of control of Rafael Pharmaceuticals or a sale of Rafael Pharmaceuticals or its assets. Rafael Pharmaceuticals can draw on the facility on 60 days&#x2019; notice. The funds borrowed under the Line of Credit Agreement must be repaid out of certain proceeds from equity sales by Rafael Pharmaceuticals.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In connection with entering into the Line of Credit Agreement, Rafael Pharmaceuticals agreed to issue to RP Finance shares of its common stock representing 12% of the issued and outstanding shares of Rafael Pharmaceuticals common stock, with such interest subject to anti-dilution protection as set forth in the Line of Credit Agreement.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">RP Finance has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance&#x2019;s economic performance and, therefore, is not required to consolidate RP Finance. Therefore, we will use the equity method of accounting to record our investment in RP Finance. The Company has recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively. The assets and operations of RP Finance are not significant and the Company has identified the equity investment in RP Finance as a related party transaction (see Note 11).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In August 2020, Rafael Pharmaceuticals called for a $5,000,000 draw on the line of credit facility and the facility was funded by RP Finance LLC in the amount $5 million, in August 2020 and September 2020. For the three months ended October 31, 2020, the Company funded $1,875,000 in accordance with its 37.5% ownership interests in RP Finance.</font></p><br/> 50000000 The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals. 0.12 96000 0 0.375 0.375 Rafael Pharmaceuticals called for a $5,000,000 draw on the line of credit facility 5000000 5000000 1875000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 6 &#x2013; INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD.</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">LipoMedix is a development-stage, privately held Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of October 31, 2020, the Company held 68% of the issued and outstanding ordinary shares of LipoMedix and has consolidated this investment from the second quarter of fiscal 2018.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In November 2019, the Company provided bridge financing in the principal amount of $100,000 to LipoMedix with a maturity date of May 3, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In January 2020, the Company provided bridge financing in the principal amount of $125,000 to LipoMedix with a maturity date of May 3, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In March 2020, the Company provided bridge financing in the principal amount of $75,000 to LipoMedix with a maturity date of April 20, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On May 20, 2020, the Company entered into a Share Purchase Agreement with LipoMedix to purchase 4,000,000 ordinary shares of LipoMedix for an aggregate purchase price of $1,000,000. The purchase consideration consisted of the outstanding Promissory Notes between the Company and LipoMedix dated November 13, 2019, January 21, 2020 and March 27, 2020 in the total principal amount of $300,000 plus accrued interest, for an aggregate amount of $306,737, and $693,263 of cash, thereby increasing the Company&#x2019;s ownership in Lipomedix from 58% to 68%.</font></p><br/> 0.68 100000 125000 75000 4000000 1000000 300000 306737 693263 0.58 0.68 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 7 &#x2013; FAIR VALUE MEASUREMENTS</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:</font></p><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top"> <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"></td><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><font style="font-family: Times New Roman, Times, Serif"><b>&#x25cf;</b></font></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>Level 1</b> - quoted prices in active markets for identical assets or liabilities;</font></td></tr></table><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top"> <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"></td><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><font style="font-family: Times New Roman, Times, Serif"><b>&#x25cf;</b></font></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>Level 2</b> - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or</font></td></tr></table><br/><table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="font-family: Times New Roman, Times, Serif; vertical-align: top"> <td style="font-family: Times New Roman, Times, Serif; width: 0.25in"></td><td style="font-family: Times New Roman, Times, Serif; width: 0.25in"><font style="font-family: Times New Roman, Times, Serif"><b>&#x25cf;</b></font></td><td style="font-family: Times New Roman, Times, Serif; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>Level 3</b> - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.</font></td></tr></table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The following is a listing of the Company&#x2019;s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of&#xa0;October&#xa0;31, 2020 and July&#xa0;31, 2020:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fair value at October 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Assets:</td><td style="font-style: italic">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center">&#xa0;</td><td style="font-style: italic">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 1.5pt">Hedge Funds</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">6,454</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">6,454</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,454</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,454</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fair value at July 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Assets:</td><td style="font-style: italic">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center">&#xa0;</td><td style="font-style: italic">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 1.5pt">Hedge Funds</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,510</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,510</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,510</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,510</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">At October&#xa0;31, 2020 and July&#xa0;31, 2020, the Company did not have any liabilities measured at fair value on a recurring basis.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="6" style="white-space: nowrap; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Balance, beginning of period</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,510</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,125</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Liquidation of Hedge Fund Investments</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(2,000</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total gain (loss) included in earnings</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">944</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(37</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Balance, end of period</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,454</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,088</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Hedge funds classified as Level 3 include investments and securities which may not be based on readily observable data inputs. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. In October 2020, the Company received a $2 million distribution of the Company&#x2019;s investments in Hedge Funds.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company holds $2.0 million in investments in securities in another entity that are not liquid, which were included in Investments - Other Pharmaceuticals in the accompanying consolidated balance sheets. The investment is accounted for under ASC 321, <i>Investments - Equity Securities</i>, using the measurement alternative as defined within the guidance, and the Company recorded an impairment loss of $0.7 million and $0 for the three months ended October 31, 2020 and 2019, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Fair Value of Other Financial Instruments</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The estimated fair value of the Company&#x2019;s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Cash and cash equivalents, prepaid expense and other current assets, and accounts payable.&#xa0;</i>At October&#xa0;31, 2020 and July&#xa0;31, 2020, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash and cash equivalents were classified as Level 1 and other current assets, and other current liabilities were classified as Level 2 of the fair value hierarchy.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Other assets and other liabilities.&#xa0;</i>At October&#xa0;31, 2020 and July&#xa0;31, 2020, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company&#x2019;s assumptions, which were classified as Level 3 of the fair value hierarchy.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company&#x2019;s financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amounts of trade accounts receivable, trade accounts payable and due from related parties approximate their fair value due to their short-term nature. Other than noted above, the Company did not have any other assets or liabilities that were measured at fair value on a recurring basis as of October&#xa0;31, 2020 or July&#xa0;31, 2020.</font></p><br/> 2000000 2000000 700000 0 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fair value at October 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Assets:</td><td style="font-style: italic">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center">&#xa0;</td><td style="font-style: italic">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 1.5pt">Hedge Funds</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">6,454</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">6,454</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,454</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,454</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Fair value at July 31, 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 1</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 2</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Level 3</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">Assets:</td><td style="font-style: italic">&#xa0;</td> <td colspan="14" style="white-space: nowrap; font-style: italic; text-align: center">&#xa0;</td><td style="font-style: italic">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%; text-align: left; padding-bottom: 1.5pt">Hedge Funds</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,510</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">7,510</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">&#x2014;</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,510</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">7,510</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 6454000 6454000 6454000 6454000 7510000 7510000 7510000 7510000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="6" style="white-space: nowrap; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Balance, beginning of period</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">7,510</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">5,125</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Liquidation of Hedge Fund Investments</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(2,000</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total gain (loss) included in earnings</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">944</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(37</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt">Balance, end of period</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">6,454</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">5,088</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 7510000 5125000 -2000000 944000 -37000 6454000 5088000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 8 &#x2013; TRADE ACCOUNTS RECEIVABLE</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Trade Accounts Receivable consisted of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">July 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Trade Accounts Receivable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">415</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">364</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Accounts Receivable - Related Party</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">150</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">121</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less Allowance for Doubtful Accounts</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(256</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(218</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Trade Accounts Receivable, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">309</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">267</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The current portion of deferred rental income included in prepaid expenses and other current assets was approximately $77 thousand and $11 thousand as of October&#xa0;31, 2020 and July&#xa0;31, 2020, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The noncurrent portion of deferred rental income included in Other Assets was approximately $1.5 million as of October&#xa0;31, 2020 and July&#xa0;31, 2020.</font></p><br/> 77000 11000 1500000 1500000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">July 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Trade Accounts Receivable</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">415</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">364</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Accounts Receivable - Related Party</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">150</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">121</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Less Allowance for Doubtful Accounts</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(256</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(218</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 4pt">Trade Accounts Receivable, net</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">309</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">267</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 415000 364000 150000 121000 256000 218000 309000 267000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 9 &#x2013; PROPERTY AND EQUIPMENT</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">Property and equipment consisted of the following:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">July 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Building and Improvements</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">47,736</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">47,591</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Land</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,412</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,412</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Furniture and Fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,145</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,145</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Other</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">256</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">256</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">59,549</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">59,404</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less Accumulated Depreciation</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(15,408</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,971</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">44,141</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">44,433</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Other property and equipment consist of other equipment and miscellaneous computer hardware.&#xa0;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Depreciation expense pertaining to property and equipment was approximately $0.4 million and $0.5 million for the three months ended October 31, 2020 and 2019, respectively.&#xa0;</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company&#x2019;s headquarters are located at 520 Broad Street in Newark, New Jersey where it occupies office space in the building owned by its subsidiary.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In August 2020, the Company sold an office/data center building in Piscataway, New Jersey, which was classified as held for sale at July 31, 2020.</font></p><br/> 400000 500000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">October 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">July 31,<br/> 2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(unaudited, in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="2" style="font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Building and Improvements</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">47,736</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">47,591</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Land</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,412</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">10,412</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Furniture and Fixtures</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,145</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,145</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 1.5pt">Other</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">256</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">256</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">59,549</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">59,404</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Less Accumulated Depreciation</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(15,408</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(14,971</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">44,141</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">44,433</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 47736000 47591000 10412000 10412000 1145000 1145000 256000 256000 59549000 59404000 15408000 14971000 44141000 44433000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 10 &#x2013; LOSS PER SHARE</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Basic net loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per shares includes potentially dilutive securities such as stock options and other convertible instruments. These securities have been excluded from the calculation of diluted net loss per shares for the three months ended October 31, 2020 and 2019 because all such securities are anti-dilutive for all periods presented.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The following table summarizes the Company&#x2019;s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months ended<br/> October 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; padding-bottom: 1.5pt; padding-left: 2.65pt">Stock Options</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">571,800</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">586,874</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt; padding-left: 2.65pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">571,800</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">586,874</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The diluted loss per share computation equals basic loss per share for the three months ended October 31, 2020 and 2019 because the Company had a net loss and the impact of the assumed exercise of stock options would have been anti-dilutive.</font></p><br/> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="6" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Three months ended<br/> October 31,</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left; padding-bottom: 1.5pt; padding-left: 2.65pt">Stock Options</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">571,800</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="width: 1%; padding-bottom: 1.5pt">&#xa0;</td> <td style="width: 1%; border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="width: 9%; border-bottom: Black 1.5pt solid; text-align: right">586,874</td><td style="width: 1%; padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="padding-bottom: 4pt; padding-left: 2.65pt">Total</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">571,800</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">586,874</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 571800 586874 571800 586874 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 11 &#x2013; RELATED PARTY TRANSACTIONS</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company has historically maintained an intercompany balance due to/from related parties that relates to cash advances for investments, loan repayments, charges for services provided to the Company by IDT Corporation, or IDT, and payroll costs for the Company&#x2019;s personnel that were paid by IDT. The Company also receives rental income from various companies under common control to IDT. The Company recorded expense of approximately $66 thousand in related party services to IDT, of which approximately $30 thousand is included in due to related parties at October 31, 2020.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">IDT leases approximately 80,000 square feet of office space plus parking occupied by IDT at 520 Broad Street, Newark, NJ and approximately 3,600 square feet of office space in Jerusalem, Israel. IDT paid the Company approximately $459 thousand for office rent and parking during the three months ended October 31, 2020 and 2019.&#xa0; As of October 31, 2020 and 2019, IDT owed the Company approximately $69 thousand and $0, respectively, for office rent and parking.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company leases space to related parties which represented approximately 56% and 43% of the Company&#x2019;s total revenue for the three months ended October 31, 2020 and 2019, respectively. See Note 16 for future minimum rent payments from related parties and other tenants.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company provides Rafael Pharmaceuticals with administrative, finance, accounting, tax and legal services. Howard S. Jonas serves as a Chairman of the Board of Rafael Pharmaceuticals and owns an equity interest in Rafael Pharmaceuticals. The Company billed Rafael Pharmaceuticals $120,000 for the three months ended October 31, 2020 and 2019, respectively. As of October&#xa0;31, 2020 and July&#xa0;31, 2020, Rafael Pharmaceuticals owed the Company $240,000 and $120,000, respectively, included in due from Rafael Pharmaceuticals.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8&#xa0;million shares of Rafael Pharmaceuticals&#x2019; Series D Convertible Preferred Stock for $10&#xa0;million representing approximately 8% of the equity on a fully-diluted&#xa0;basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10&#xa0;million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee&#xa0;director of the Company. The remainder of the Warrant is held by Pharma Holdings.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On November&#xa0;5, 2018, Pharma Holdings, LLC partially exercised a warrant to purchase 4&#xa0;million shares of Rafael Pharmaceuticals&#x2019; Series D Convertible Preferred Stock for $5&#xa0;million, of which $500,000 was contributed by Howard Jonas.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2020 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the three months ended October 31, 2020 and 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On January 10, 2019, Pharma Holdings partially exercised a warrant to purchase 5.1 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $6.4 million, of which $640,000 was contributed by Howard Jonas.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On January 23, 2019, Pharma Holdings partially exercised a warrant to purchase 36.3 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $34.4&#xa0;million, of which $3.4 million was contributed by Howard Jonas.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On January 29, 2020, in connection with the vesting of certain restricted shares of Class B common stock held by an officer of the Company, the Company withheld 5,238 shares to pay for the payroll taxes on the officer&#x2019;s behalf, totaling approximately $116,000.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company acquired membership interest in Altira, a related party in fiscal 2020 and fiscal 2021 (see Note 4 and Note 17).</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively (see Note 5).</font></p><br/> 66000 30000 80000 3600 459000 459000 69000 0 0.56 0.43 120000 120000 240000 120000 In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8 million shares of Rafael Pharmaceuticals&#x2019; Series D Convertible Preferred Stock for $10 million representing approximately 8% of the equity on a fully-diluted basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10 million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee director of the Company. The remainder of the Warrant is held by Pharma Holdings. 4000000 5000000 500000 the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2020 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the three months ended October 31, 2020 and 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock. 5100000 6400000 640000 36300000 34400000 3400000 5238 116000 The Company recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively (see Note 5). <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 12 &#x2013; INCOME TAXES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company has completed its accounting for the income tax effects of the enactment of the Tax Act and Care Act. At October 31, 2020, the Company has federal net operating loss (&#x201c;NOL&#x201d;) carryforwards from domestic operations of approximately $34.4 million, to offset future taxable income. The Company has state NOLs of $15.3 million. The Company has NOLs from foreign operations of $2.3 million. As part of the Tax Act, federal NOLs generated in 2018 and later are not subject to an expiration period and are available to offset 80% of taxable income in the year in which they are utilized. The federal NOL carryforwards generated prior to 2018 will begin to expire in 2026. The state NOLs will begin to expire in 2038 and foreign NOLs do not expire.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company anticipates that its assumptions and estimates may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB, and various other taxing jurisdictions. In particular, the Company anticipates that the U.S. state jurisdictions will continue to determine and announce their conformity with or decoupling from the Tax Act, either in its entirety or with respect to specific provisions. Legislative and interpretive actions could result in adjustments to the Company&#x2019;s balances.</font></p><br/> 34400000 15300000 2300000 0.80 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 13 &#x2013; BUSINESS SEGMENT INFORMATION</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company conducts business as two operating segments, Pharmaceuticals and Real Estate. The Company&#x2019;s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company&#x2019;s CEO and chief operating decision-maker.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its Pharmaceuticals segment based primarily on research and development efforts and results of clinical trials and the Real Estate segment based primarily on results of operations. All investments in Rafael Pharmaceuticals and assets and expenses associated with LipoMedix and Barer are tracked separately in the Pharmaceuticals segment. All corporate costs are allocated to the Real Estate segment.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Pharmaceuticals segment is comprised of preferred and common equity interests and the Warrant to purchase equity interests in Rafael Pharmaceuticals, a majority equity interest in LipoMedix and Barer. To date, the Pharmaceuticals segment has not generated any revenues.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Real Estate segment consists of the Company&#x2019;s real estate holdings, including a building at 520 Broad Street in Newark, New Jersey that houses headquarters for the Company and certain affiliates and its associated public garage and a portion of an office building in Israel.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In August 2020, the Company sold a 3-story, 65,253 square foot office building located at 225 Old New Brunswick Road in Piscataway, New Jersey to 225 ONBR, LLC, an entity unaffiliated with the Company. The purchase price was $3,875,000 and, after transfer taxes and broker&#x2019;s commission, the Company received $3,675,638 in cash. As of July 31, 2020, the building was classified as held for sale on the consolidated balance sheet.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Operating results for the business segments of the Company are as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; border-bottom: Black 1.5pt solid"><b>(unaudited, in thousands)</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#xa0;</b></td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><b>Pharmaceuticals</b></td><td style="padding-bottom: 1.5pt; font-weight: bold"><b>&#xa0;</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#xa0;</b></td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><b>Real <br/> Estate</b></td><td style="padding-bottom: 1.5pt; font-weight: bold"><b>&#xa0;</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#xa0;</b></td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><b>Total</b></td><td style="padding-bottom: 1.5pt; font-weight: bold"><b>&#xa0;</b></td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold">Three Months Ended October 31, 2020</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Revenues</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#x2014;</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,053</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,053</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Loss from operations</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(533</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,958</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(2,491</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold">Three Months Ended October 31, 2019</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Revenues</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1,210</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1,210</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Loss from operations</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(266</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,276</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,542</td><td style="text-align: left">)</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><i>Geographic Information</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Revenues from tenants located outside of the United States were generated entirely from related parties located in Israel. Revenues from these non-United States customers as a percentage of total revenues were as follows (revenues by country are determined based on the location of the related facility):</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; border-bottom: Black 1.5pt solid">Three Months Ended October 31, (unaudited)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Revenue from tenants located in Israel</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">6</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">5</td><td style="width: 1%; text-align: left">%</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif">Net long-lived assets and total assets held outside of the United States, which are located in Israel, were as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; font-style: italic; border-bottom: Black 1.5pt solid">(unaudited, in thousands)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">United <br/> States</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Israel</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold">October 31, 2020</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Long-lived assets, net</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">42,564</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,577</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">44,141</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Total assets</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">130,744</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,874</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">134,618</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold">July 31, 2020</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Long-lived assets, net</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">42,840</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1,593</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">44,433</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Total assets</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">132,286</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4,061</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">136,347</td><td style="text-align: left">&#xa0;</td></tr> </table><br/> 2 the Company sold a 3-story, 65,253 square foot office building located at 225 Old New Brunswick Road in Piscataway, New Jersey to 225 ONBR, LLC, an entity unaffiliated with the Company. The purchase price was $3,875,000 and, after transfer taxes and broker&#x2019;s commission, the Company received $3,675,638 in cash. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-style: italic; border-bottom: Black 1.5pt solid"><b>(unaudited, in thousands)</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#xa0;</b></td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><b>Pharmaceuticals</b></td><td style="padding-bottom: 1.5pt; font-weight: bold"><b>&#xa0;</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#xa0;</b></td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><b>Real <br/> Estate</b></td><td style="padding-bottom: 1.5pt; font-weight: bold"><b>&#xa0;</b></td><td style="font-weight: bold; padding-bottom: 1.5pt"><b>&#xa0;</b></td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid"><b>Total</b></td><td style="padding-bottom: 1.5pt; font-weight: bold"><b>&#xa0;</b></td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold">Three Months Ended October 31, 2020</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%">Revenues</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">&#x2014;</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,053</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,053</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Loss from operations</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(533</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,958</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(2,491</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold">Three Months Ended October 31, 2019</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Revenues</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1,210</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1,210</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Loss from operations</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(266</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,276</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(1,542</td><td style="text-align: left">)</td></tr> </table> 1053000 -533000 -1958000 -2491000 1210000 -266000 -1276000 -1542000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; border-bottom: Black 1.5pt solid">Three Months Ended October 31, (unaudited)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2020</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2019</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%; text-align: left">Revenue from tenants located in Israel</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">6</td><td style="width: 1%; text-align: left">%</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">5</td><td style="width: 1%; text-align: left">%</td></tr> </table> 0.06 0.05 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold; font-style: italic; border-bottom: Black 1.5pt solid">(unaudited, in thousands)</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">United <br/> States</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Israel</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; font-weight: bold">October 31, 2020</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td><td>&#xa0;</td> <td colspan="2" style="white-space: nowrap">&#xa0;</td><td>&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: left">Long-lived assets, net</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">42,564</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,577</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">44,141</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Total assets</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">130,744</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">3,874</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">134,618</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold">July 31, 2020</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">Long-lived assets, net</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">42,840</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">1,593</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">$</td><td style="text-align: right">44,433</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">Total assets</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">132,286</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4,061</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">136,347</td><td style="text-align: left">&#xa0;</td></tr> </table> 42564000 1577000 44141000 130744000 3874000 134618000 42840000 1593000 44433000 132286000 4061000 136347000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 14 &#x2013; COMMITMENTS AND CONTINGENCIES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><i>Legal Proceedings</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On September 17, 2018, LipoMedix was notified of a claim initiated by one of its founders seeking payment of consulting fees in the amount of approximately $377,000 and seeking to place restrictions on LipoMedix&#x2019;s bank accounts and other assets to protect his claim. LipoMedix did not believe that the individual had the right to receive any payment at that time. LipoMedix responded to the demand for the placement of restrictions on its assets. In May 2019, LipoMedix received a letter from the other founder requesting payment of his consulting fees. On July 15, 2019, the parties settled the matters and the two founders will be paid a percentage of future investments and certain other proceeds.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On July 12, 2019, the Company received a Citation and Notification of Penalty from the Occupational Safety and Health Administration of the U.S. Department of Labor, or OSHA, related to an OSHA inspection of 520 Broad Street, Newark, New Jersey. The citation seeks to impose penalties related to alleged violations of the Occupation Safety and Health Act of 1970 at 520 Broad Street. On July 31, 2019, the Company filed a Notice of Contest with OSHA contesting the citation in its entirety. On February 14, 2020, the Company entered into a Settlement Agreement with OSHA, as related to the citation received on July 12, 2019. As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company accounts for contingencies when a loss is considered probable and can be reasonably estimated. For the matters disclosed above, a legal accrual for approximately $64,000 has been recorded for legal fees and losses believed to be both probable and reasonably estimable, but an exposure to additional loss may exist in excess of the amount accrued.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On December 31, 2019, an employee of the Company filed a complaint in connection with the incident that led to the OSHA inspection noted above for personal injuries against the Company and other parties in the New Jersey Supreme Court for an incident that took place on January 31, 2019 at 520 Broad Street, Newark, New Jersey. The Company intends to vigorously defend this matter. The loss is considered remote and no accrual has been recorded.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company may from time to time be subject to legal proceedings that may arise in the ordinary course of business. Although there can be no assurance in this regard, other than noted above, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company&#x2019;s results of operations, cash flows or financial condition.</font></p><br/> 377000 As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021. 64000 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 15 &#x2013; EQUITY</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million that was convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">In August 2019, the note, including interest of approximately $667,000 was converted into 1,849,749 shares of Class B common stock.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">Pursuant to the Company&#x2019;s 2018 Equity Incentive Plan, each of our three non-employee directors of the Company was granted 4,203 restricted shares of our Class B common stock in January 2020 which fully vested on the date of the grant. The fair value of the awards on the date of the grant was approximately $208,000 which was included in selling, general and administrative expense.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">During the three months ended October 31, 2020, 8,750 options were exercised. At October 31, 2020, there was no unrecognized compensation cost related to non-vested stock options.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Stock Options </i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">A summary of stock option activity for the Company is as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term<br/> (in years)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Aggregate<br/> Intrinsic Value<br/> (in thousands)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Outstanding at July 31, 2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">580,874</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4.90</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">2.65</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,846</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(8,750</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4.90</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cancelled / Forfeited</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(324</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 1.5pt">Outstanding at October 31, 2020</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">571,800</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.90</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2.40</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,802</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold; padding-bottom: 1.5pt">Exercisable at October 31, 2020</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">571,800</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.90</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2.40</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">2,802</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif"><i>Restricted Stock</i></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The fair value of restricted shares of the Company&#x2019;s Class B common stock is determined based on the closing price of the Company&#x2019;s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">A summary of the status of the Company&#x2019;s grants of restricted shares of Class B common stock is presented below:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Non-vested<br/> Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Grant Date<br/> Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Outstanding at July 31, 2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">123,104</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10.80</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">9,360</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">16.58</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Vested</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(7,027</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(16.91</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cancelled / Forfeited</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,099</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13.54</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 4pt">Non-vested shares at October 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">123,338</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13.79</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">At October&#xa0;31, 2020, there was $1.4 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 2.18 years.</font></p><br/> 15000000 8.47 P3Y 0.06 667000 1849749 3 4203 208000 8750 P3Y 1400000 P2Y65D <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap; text-align: center">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Options</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Exercise<br/> Price</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Remaining<br/> Contractual<br/> Term<br/> (in years)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Aggregate<br/> Intrinsic Value<br/> (in thousands)</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 52%">Outstanding at July 31, 2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">580,874</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">4.90</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">2.65</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,846</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#x2014;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Exercised</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(8,750</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">4.90</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">&#xa0;</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cancelled / Forfeited</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(324</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#xa0;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 1.5pt">Outstanding at October 31, 2020</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">571,800</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.90</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2.40</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2,802</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="font-weight: bold; padding-bottom: 1.5pt">Exercisable at October 31, 2020</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">571,800</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">4.90</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">2.40</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; font-weight: bold; text-align: right">2,802</td><td style="padding-bottom: 1.5pt; font-weight: bold; text-align: left">&#xa0;</td></tr> </table> 580874 4.90 P2Y237D 2846000 4.90 324 571800 4.90 P2Y146D 2802000 571800 4.90 P2Y146D 2802000 <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="white-space: nowrap">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Number of<br/> Non-vested<br/> Shares</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Weighted<br/> Average<br/> Grant Date<br/> Fair Value</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 76%">Outstanding at July 31, 2020</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 9%; text-align: right">123,104</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">10.80</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td>Granted</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">9,360</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">16.58</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td>Vested</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(7,027</td><td style="text-align: left">)</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">(16.91</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Cancelled / Forfeited</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(2,099</td><td style="padding-bottom: 1.5pt; text-align: left">)</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">(13.54</td><td style="padding-bottom: 1.5pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-bottom: 4pt">Non-vested shares at October 31, 2020</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">&#xa0;</td><td style="border-bottom: Black 4pt double; text-align: right">123,338</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td><td style="padding-bottom: 4pt">&#xa0;</td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">13.79</td><td style="padding-bottom: 4pt; text-align: left">&#xa0;</td></tr> </table> 123104 10.80 9360 16.58 7027 -16.91 2099 13.54 123338 13.79 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 16 &#x2013; LEASES</b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029. Lease income included on the consolidated statements of operations and comprehensive loss for the three months ended October 31, 2020 and 2019 was $634 thousand and $866 thousand, respectively.</font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The future contractual minimum lease payments to be received (excluding operating expense reimbursements) by the Company as of October&#xa0;31, 2020, under non-cancellable operating leases which expire on various dates through 2028 are as follows:</font></p><br/><table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: left; white-space: nowrap; font-weight: bold; border-bottom: Black 1.5pt solid">Year ending July 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Related <br/> Parties</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Other</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="10" style="white-space: nowrap; font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; width: 64%">2021 (remaining)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,532</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">603</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,135</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,078</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">776</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,854</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,117</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">592</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,709</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2024</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,155</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">538</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,693</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2025</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,659</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">550</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,209</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,948</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,948</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total Minimum Future Rental Income</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,541</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,007</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,548</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font-family: Times New Roman, Times, Serif">The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel. The annual rent is approximately $2.0 million in the aggregate. The related parties have the right to terminate the domestic leases upon four months&#x2019; notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. A related party has the right to terminate the Israeli lease upon four months&#x2019; notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years.</font></p><br/> The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029. 634000 866000 The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel. 2000000 The related parties have the right to terminate the domestic leases upon four months&#x2019; notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. A related party has the right to terminate the Israeli lease upon four months&#x2019; notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: left; white-space: nowrap; font-weight: bold; border-bottom: Black 1.5pt solid">Year ending July 31,</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Related <br/> Parties</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Other</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td><td style="font-weight: bold; padding-bottom: 1.5pt">&#xa0;</td> <td colspan="2" style="white-space: nowrap; font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">Total</td><td style="padding-bottom: 1.5pt; font-weight: bold">&#xa0;</td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left; white-space: nowrap"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td> <td colspan="10" style="white-space: nowrap; font-style: italic; text-align: center"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>(in thousands)</i></b></font></td><td style="font-style: italic"><font style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b><i>&#xa0;</i></b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; width: 64%">2021 (remaining)</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">1,532</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">603</td><td style="width: 1%; text-align: left">&#xa0;</td><td style="width: 1%">&#xa0;</td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">2,135</td><td style="width: 1%; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2022</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,078</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">776</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,854</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2023</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,117</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">592</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,709</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left">2024</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,155</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">538</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,693</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left">2025</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">1,659</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">550</td><td style="text-align: left">&#xa0;</td><td>&#xa0;</td> <td style="text-align: left">&#xa0;</td><td style="text-align: right">2,209</td><td style="text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; "> <td style="text-align: left; padding-bottom: 1.5pt">Thereafter</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">&#x2014;</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,948</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">&#xa0;</td><td style="border-bottom: Black 1.5pt solid; text-align: right">1,948</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-bottom: 1.5pt">Total Minimum Future Rental Income</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">9,541</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">5,007</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td><td style="padding-bottom: 1.5pt">&#xa0;</td> <td style="border-bottom: Black 1.5pt solid; text-align: left">$</td><td style="border-bottom: Black 1.5pt solid; text-align: right">14,548</td><td style="padding-bottom: 1.5pt; text-align: left">&#xa0;</td></tr> </table> 1532 603 2135 2078 776 2854 2117 592 2709 2155 538 2693 1659 550 2209 1948 1948 9541 5007 14548 <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-family: Times New Roman, Times, Serif"><b>NOTE 17 &#x2013; SUBSEQUENT EVENTS </b></font></p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In November 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount of $5 million. The Company funded $1.875 million of the $5 million draw in accordance with its 37.5% ownership interests in RP Finance.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company entered into a Membership Interest Purchase Agreement (the &#x201c;Second Altira Agreement&#x201d;) on December 7, 2020 with a member (the &#x201c;Seller&#x201d;) of Altira. Pursuant to the Second Altira Agreement, on December 7, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceuticals) on sales of certain Rafael Pharmaceuticals&#x2019; products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each, commencing on January 4, 2021; 2) $3,000,000 due on January 4, 2021; 3) $3,000,000 due within fifteen (15) days of the earlier to occur of either the completion of Rafael Pharmaceuticals&#x2019; Phase III pivotal trial (AVENGER 500&#xae;) of CPI-613&#xae; (devimistat) or May 31, 2021 and not before January 4, 2021; and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. Certain of the post-closing payments may be made, at the Company&#x2019;s discretion, in cash or shares of the Company&#x2019;s Class B common stock based on the ten day average share price of the Company&#x2019;s Class B common stock prior to the date of payment or any combination thereof.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 7, 2020, Rafael Holdings entered into a Securities Purchase Agreement (the &#x201c;SPA&#x201d;) for the sale of 567,437 shares of the Company&#x2019;s Class B common stock at a price per share of $22.91 (which was the closing price for the Class B common stock on the New York Stock Exchange on December 4, 2020 the trading day immediately preceding the date of the SPA) for an aggregate purchase price of $13 million. In connection with the purchases, each purchaser was granted warrants to purchase twenty percent (20%) of the shares of Class B common stock purchased by such purchaser. The warrants have an exercise price of $22.91 per share and expire on June 6, 2022. The Company issued warrants to purchase an aggregate of 113,487 shares of Class B common stock. A majority of the proceeds received pursuant to the SPA are expected to be used by the Company to exercise an additional portion of the warrant held by the Company&#x2019;s subsidiary to purchase equity securities of Rafael Pharmaceuticals, Inc. in order to maintain the Company&#x2019;s relative position as a percentage of shares outstanding as well as the fully-diluted equity of Rafael Pharmaceuticals in light of issuances of Rafael Pharmaceuticals equity securities to third-party shareholders of Rafael Pharmaceuticals, including due to warrant exercises by these shareholders. The Company intends to use additional proceeds to fund the operations of its drug development programs including its Barer Institute subsidiary, and for general corporate purposes. Under the SPA, two entities, on whose Boards of Directors Howard Jonas, the Registrant&#x2019;s Chief Executive Officer and Chairman of the Board serves, each purchased 218,245 shares of Class B common stock for consideration of $10 million. The shares and warrants were issued in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended.</p><br/><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On December 10, 2020, a controlled subsidiary of the Company, Farber Partners LLC, or Farber, reached an agreement with Princeton University to in-license certain patents and related information related to the serine hydroxymethyltransferase (SHMT) inhibitor program developed by the laboratory of Dr. Joshua D. Rabinowitz at Princeton. Farber will pay Princeton a minimum annual royalty payment of $50 thousand, in addition to percentage royalties and a percentage of any sublicense revenue. Additionally, there are development milestone payments which Farber will pay Princeton for the first three products developed by Farber, or any sublicensees or affiliates.</p><br/> In November 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount of $5 million. The Company funded $1.875 million of the $5 million draw in accordance with its 37.5% ownership interests in RP Finance. the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceuticals) on sales of certain Rafael Pharmaceuticals&#x2019; products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each, commencing on January 4, 2021; 2) $3,000,000 due on January 4, 2021; 3) $3,000,000 due within fifteen (15) days of the earlier to occur of either the completion of Rafael Pharmaceuticals&#x2019; Phase III pivotal trial (AVENGER 500&#xae;) of CPI-613&#xae; (devimistat) or May 31, 2021 and not before January 4, 2021; and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. 567437 22.91 13000000 0.20 22.91 113487 218245 10000000 50000 EX-101.SCH 7 rfl-20201031.xsd XBRL SCHEMA FILE 001 - Statement - Consolidated Balance Sheets (Unaudited) link:presentationLink link:definitionLink link:calculationLink 002 - 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Document And Entity Information - shares
3 Months Ended
Oct. 31, 2020
Dec. 14, 2020
Document Information Line Items    
Entity Registrant Name Rafael Holdings, Inc.  
Document Type 10-Q  
Current Fiscal Year End Date --07-31  
Amendment Flag false  
Entity Central Index Key 0001713863  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Oct. 31, 2020  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company false  
Entity Ex Transition Period false  
Entity File Number 000-55863  
Entity Incorporation, State or Country Code DE  
Entity Interactive Data Current Yes  
Class A common stock    
Document Information Line Items    
Entity Common Stock, Shares Outstanding   787,163
Class B common stock    
Document Information Line Items    
Entity Common Stock, Shares Outstanding   15,044,547
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Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
CURRENT ASSETS    
Cash and cash equivalents $ 7,231 $ 6,206
Trade accounts receivable, net of allowance for doubtful accounts of $256 and $218 at October 31, 2020 and July 31, 2020, respectively 309 267
Due from Rafael Pharmaceuticals 240 118
Prepaid expenses and other current assets 460 273
Assets held for sale   2,968
Total current assets 8,240 9,832
Property and equipment, net 44,141 44,433
Equity investment – RP Finance 288 192
Due from RP Finance LLC 1,875  
Investments – Rafael Pharmaceuticals 70,018 70,018
Investments – Other Pharmaceuticals 477 1,201
Investments – Hedge Funds 6,454 7,510
Deferred income tax assets, net   6
In-process research and development and patents 1,575 1,575
Other assets 1,550 1,580
TOTAL ASSETS 134,618 136,347
CURRENT LIABILITIES    
Trade accounts payable 1,155 921
Accrued expenses 443 1,191
Amount due for purchase of membership interest 3,500 3,500
Other current liabilities 141 115
Due to related parties 30  
Total current liabilities 5,269 5,727
Other liabilities 33 92
TOTAL LIABILITIES 5,302 5,819
COMMITMENTS AND CONTINGENCIES
EQUITY    
Additional paid-in capital 129,393 129,136
Accumulated deficit (17,701) (16,255)
Accumulated other comprehensive income related to foreign currency translation adjustment 3,724 3,762
Total equity attributable to Rafael Holdings, Inc. 115,573 116,800
Noncontrolling interests 13,743 13,728
TOTAL EQUITY 129,316 130,528
TOTAL LIABILITIES AND EQUITY 134,618 136,347
Class A common stock    
EQUITY    
Common stock value 8 8
TOTAL EQUITY 8 8
Class B common stock    
EQUITY    
Common stock value 149 149
TOTAL EQUITY $ 149 $ 149
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Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
Allowance for doubtful accounts (in Dollars) $ 256 $ 218
Class A common stock    
Common stock, par value (in Dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 35,000,000 35,000,000
Common stock, shares issued 787,163 787,163
Common stock, shares outstanding 787,163 787,163
Class B common stock    
Common stock, par value (in Dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 15,050,609 15,034,598
Common stock, shares outstanding 15,044,547 15,028,536
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Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
REVENUE    
Rental – Third Party $ 236 $ 346
Rental – Related Party 520 520
Parking 177 224
Other – Related Party 120 120
Total revenue 1,053 1,210
COSTS AND EXPENSES    
Selling, general and administrative 2,592 2,041
Research and development 515 245
Depreciation and amortization 437 466
Loss from operations (2,491) (1,542)
Interest expense, net   (64)
Net loss resulting from foreign exchange transactions   (5)
Gain on sale of building 749  
Impairment of investments - Other Pharmaceuticals (724)
Unrealized gain (loss) on investments - Hedge Funds 944 (37)
Loss before income taxes (1,522) (1,648)
Provision for income taxes (5) (4)
Equity in earnings of RP Finance 96
Consolidated net loss (1,431) (1,652)
Net loss (income) attributable to noncontrolling interests 15 (54)
Net loss attributable to Rafael Holdings, Inc. (1,446) (1,598)
OTHER COMPREHENSIVE LOSS    
Net loss (1,431) (1,652)
Foreign currency translation adjustment (38) 6
Total comprehensive loss (1,469) (1,646)
Comprehensive loss attributable to noncontrolling interests (21) (2)
Total comprehensive loss attributable to Rafael Holdings, Inc. $ (1,490) $ (1,648)
Loss per share    
Basic and diluted (in Dollars per share) $ (0.09) $ (0.10)
Weighted average number of shares used in calculation of loss per share    
Basic and diluted (in Shares) 15,822,722 15,640,683
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Consolidated Statements of Equity (Unaudited) - USD ($)
$ in Thousands
Total
Additional Paid - in Capital
Accumulated Deficit
Accumulated other comprehensive income
Noncontrolling interests
Common Stock, Series A
Common Stock, Series B
Balance at Jul. 31, 2019 $ 124,764 $ 112,898 $ (5,840) $ 3,784 $ 13,783 $ 8 $ 131
Balance (in Shares) at Jul. 31, 2019           787,163 13,142,502
Net loss (1,652) (1,598) (54)
Stock-based compensation 94 94
Stock-based compensation (in Shares)           5,000
Shares issued for convertible note 15,668 15,650 $ 18
Shares issued for convertible note (in Shares)           1,849,749
Conversion of LipoMedix bridge notes 82 82
Foreign currency translation adjustment 6 6
Balance at Oct. 31, 2019 138,962 128,642 (7,438) 3,790 13,811 $ 8 $ 149
Balance (in Shares) at Oct. 31, 2019           787,163 14,997,251
Balance at Jul. 31, 2020 130,528 129,136 (16,255) 3,762 13,728 $ 8 $ 149
Balance (in Shares) at Jul. 31, 2020           787,163 15,028,536
Net loss (1,431) (1,446) 15
Stock-based compensation 214 214
Stock-based compensation (in Shares)           7,261
Stock options exercised 43 43
Stock options exercised (in Shares)           8,750
Foreign currency translation adjustment (38) (38)
Balance at Oct. 31, 2020 $ 129,316 $ 129,393 $ (17,701) $ 3,724 $ 13,743 $ 8 $ 149
Balance (in Shares) at Oct. 31, 2020           787,163 15,044,547
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Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Operating activities    
Net loss $ (1,431) $ (1,652)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 437 466
Deferred income taxes 6 1
Net unrealized (gain) loss on investments - Hedge Funds (944) 37
Impairment of investments - Other Pharmaceuticals 724
Equity in earnings of RP Finance (96)
Provision for doubtful accounts 38 48
Stock-based compensation 214 94
Amortization of debt discount 54
Gain on sale of building (749)
Change in assets and liabilities:    
Trade accounts receivable (80) 173
Prepaid expenses and other current assets (187) 217
Other assets 30 (289)
Accounts payable and accrued expenses (490) (196)
Due from Rafael Pharmaceuticals (122)
Other current liabilities 26 (12)
Due to related parties 30 (37)
Due from Rafael Pharmaceuticals 160
Other liabilities (59)
Net cash used in operating activities (2,653) (936)
Investing activities    
Purchases of property and equipment (145) (321)
Payment to fund RP Finance (1,875)
Proceeds from sale of building 3,658
Proceeds related to distribution of Hedge Funds 2,000
Net cash provided by (used in) investing activities 3,638 (321)
Financing activities    
Proceeds from exercise of options 43
Net cash provided by financing activities 43
Effect of exchange rate changes on cash and cash equivalents (3) 4
Net increase (decrease) in cash and cash equivalents 1,025 (1,253)
Cash and cash equivalents, beginning of period 6,206 12,024
Cash and cash equivalents, end of period 7,231 10,771
Supplemental schedule of noncash investing and financing activities    
Conversion of LipoMedix bridge notes 82
Conversions of related party convertible notes payable and accrued interest $ 15,668
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Description of Business
3 Months Ended
Oct. 31, 2020
Accounting Policies [Abstract]  
DESCRIPTION OF BUSINESS

NOTE 1 – DESCRIPTION OF BUSINESS


Rafael Holdings, Inc. (“Rafael Holdings” or the “Company”), a Delaware corporation, owns interests in pre-clinical and clinical stage pharmaceutical companies and commercial real estate assets. The assets are operated as two separate lines of business.


The pharmaceutical holdings include preferred and common equity interests and a warrant to purchase additional equity interests in Rafael Pharmaceuticals, Inc., or Rafael Pharmaceuticals, which is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells; and, a majority equity interest in LipoMedix Pharmaceuticals Ltd., or LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, in 2019, we established the Barer Institute (“Barer”), a wholly-owned early stage venture focused on developing a pipeline of therapeutic compounds, including compounds to regulate cancer metabolism. The venture is pursuing collaborative research agreements with leading scientists from top academic institutions to develop other early stage ventures. In addition, we have recently initiated efforts to develop other early stage pharmaceutical ventures.


The commercial real estate holdings consist of a building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and certain other entities and hosts other tenants and an associated 800-car public garage, and a portion of a building in Israel. In August 2020, the Company sold an office/data center building in Piscataway, New Jersey, which was classified as held for sale at July 31, 2020.


The “Company” in these consolidated financial statements refers to Rafael Holdings on a consolidated basis. All significant intercompany accounts and transactions have been eliminated in consolidation.


All majority-owned subsidiaries are consolidated with all intercompany transactions and balances being eliminated in consolidation or combination. The entities included in these consolidated financial statements are as follows:


Company   Country of Incorporation   Percentage
Owned
 
Rafael Holdings, Inc.   United States – Delaware     100 %
Broad Atlantic Associates, LLC   United States – Delaware     100 %
IDT 225 Old NB Road, LLC   United States – Delaware     100 %
IDT R.E. Holdings Ltd.   Israel     100 %
Rafael Holdings Realty, Inc.   United States – Delaware     100 %
Barer Institute, Inc.   United States – Delaware     100 %
The Barer Institute, LLC   United States – Delaware     100 %
Hillview Avenue Realty, JV   United States – Delaware     100 %
Hillview Avenue Realty, LLC   United States – Delaware     100 %
Levco Pharmaceuticals Ltd.   Israel     95 %
Farber Partners, LLC   United States – Delaware     93 %
Pharma Holdings, LLC   United States – Delaware     90 %
LipoMedix Pharmaceuticals Ltd.   Israel     68 %
CS Pharma Holdings, LLC   United States – Delaware     45 %*

*50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.20.4
Summary of Significant Accounting Policies
3 Months Ended
Oct. 31, 2020
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basis of Presentation


The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.


The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2020 refers to the fiscal year ended July 31, 2020).


Operating results for the three months ended October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021. The balance sheet at July 31, 2020 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2020, or the 2020 Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”).


Use of Estimates    


The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates.


Risks and Uncertainties - COVID-19


In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and has since spread around the globe. The Company actively monitors the outbreak and its potential impact on its operations and those of the Company’s holdings.


The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible from the pandemic, including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies.


The Company has one tenant that has not paid rent for August 2020 due to the New Jersey state gym closures; however, the tenant subsequently resumed rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of the Company’s real estate portfolio as well as efforts to monetize those assets.


The Company has implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings.


Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of the Company’s holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic’s impact on the U.S. and global economies, changes in our customers’ behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, the Company may incur expenses or delays relating to such events outside of the Company’s control, which could have a material adverse impact on the Company’s business.


Investments


The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated.


Investments in businesses that the Company does not control, but in which the Company has the ability to exercise significant influence over operating and financial matters, are accounted for using the equity method. Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. The Company periodically evaluates its investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established.


Variable Interest Entities


In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities (“VIEs”). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.


If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company – that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary.


Cost Method Investments - Rafael Pharmaceuticals (see Note 3) is a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance. Cost method investments are presented as “Investments - Rafael Pharmaceuticals.”


Equity Method Investments - RP Finance, LLC (“RP Finance”), (see Note 5), has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance’s economic performance and, therefore, is not required to consolidate RP Finance. The Company accounts for its investment in RP Finance using the equity method of accounting.


Revenue Recognition


The Company applies the five-step approach as described in ASC 606, Revenue from Contracts with Customers, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the entity satisfies a performance obligation.


The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss. As an owner and operator of real estate, the Company derives the majority of its revenue from leasing office and parking space to tenants at its properties. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842, Leases.


Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.


The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company’s performance obligation is satisfied, consistent with the Company’s previous accounting.


The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due.


Research and Development Costs


Research and development costs and expenses incurred by consolidated entities consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended.


Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property.


Recently Issued Accounting Standards Not Yet Adopted


In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of the pending adoption of the new standard on its consolidated financial statements and intends to adopt the standard on August 1, 2023. 


XML 20 R9.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in Rafael Pharmaceuticals
3 Months Ended
Oct. 31, 2020
Schedule of Investments [Abstract]  
INVESTMENT IN RAFAEL PHARMACEUTICALS

NOTE 3 – INVESTMENT IN RAFAEL PHARMACEUTICALS


Rafael Pharmaceuticals is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells.


The Company owns equity interests and rights in Rafael Pharmaceuticals through a 90%-owned non-operating subsidiary, Pharma Holdings, LLC, or Pharma Holdings.


Pharma Holdings owns 50% of CS Pharma Holdings, LLC, or CS Pharma, a non-operating entity that owns equity interests in Rafael Pharmaceuticals. Accordingly, the Company holds an effective 45% indirect interest in the assets held by CS Pharma.


Howard Jonas, Chairman of the Board and Chief Executive Officer of the Company, and Chairman of the Board of Rafael Pharmaceuticals, owns 10% of Pharma Holdings.


Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the “Warrant”). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments, and will expire upon the earlier of June 30, 2021, a qualified initial public offering, or liquidation event of Rafael Pharmaceuticals.


On March 25, 2020, the Board of Directors of Rafael Pharmaceuticals extended the expiration date of the Warrant held by Pharma Holdings to purchase shares of the Warrant from December 31, 2020 to June 30, 2021 and on August 31, 2020 the Board of Directors of Rafael Pharmaceuticals further extended the expiration date of the Warrant held by Pharma Holdings, LLC to purchase shares of the Warrant to August 15, 2021.


Pharma Holdings also holds certain governance rights in Rafael Pharmaceuticals including appointment of directors.


CS Pharma holds 16.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock. CS Pharma owned a $10 million Series D Convertible Note, with 3.5% interest, in Rafael Pharmaceuticals which was converted in January 2019.


The Company and its subsidiaries collectively own securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and 37% of the capital stock on a fully diluted basis (excluding the remainder of the Warrant).


The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class.


The Company serves as the managing member of Pharma Holdings, and Pharma Holdings serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their respective holdings. Any distributions that are made to CS Pharma from Rafael Pharmaceuticals that are in turn distributed by CS Pharma, will need to be made pro rata to all members, which would entitle Pharma Holdings to 50% (based on current ownership) of such distributions. Similarly, if Pharma Holdings were to distribute proceeds it receives from CS Pharma, it would do so on a pro rata basis, entitling the Company to 90% (based on current ownership) of such distributions.


The Company evaluated its investments in Rafael Pharmaceuticals in accordance with ASC 323, Investments - Equity Method and Joint Ventures, to establish the appropriate accounting treatment for its investment and has concluded that its investment did not meet the criteria for the equity method of accounting or consolidation and is carried at cost.


Rafael Pharmaceuticals is a VIE; however, the Company has determined that it is not the primary beneficiary as it does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance. In addition, the interests held in Rafael Pharmaceuticals are Series D Convertible Preferred Stock and do not represent in-substance common stock.


Howard Jonas has additional contractual rights to receive additional Rafael Pharmaceuticals shares (“Bonus Shares”) for an additional 10% of the fully diluted capital stock of Rafael Pharmaceuticals upon the achievement of certain milestones. The additional 10% is based on the fully diluted capital stock of Rafael Pharmaceuticals, excluding the remainder for the Warrant, at the time of issuance. If any of the milestones are met, the Bonus Shares are to be issued without any additional payment. Howard Jonas has the right to transfer the Bonus Shares, in his discretion, to others, including those who are instrumental to the future success of Rafael Pharmaceuticals.


The Company holds a Warrant to purchase a significant stake in Rafael Pharmaceuticals, as well as other equity and governance rights in Rafael Pharmaceuticals. As of October 31, 2020, the Company owned 51% of the issued and outstanding equity in Rafael Pharmaceuticals. At that date, approximately 8% of the issued and outstanding equity was owned by the Company’s subsidiary CS Pharma and 42% was held by the Company’s subsidiary Pharma Holdings. The Company’s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company’s total ownership to 56%. Based on the shares issued and outstanding of Rafael Pharmaceuticals as of October 31, 2020, the Company, and the Company’s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company’s affiliates would need to pay approximately $104 million to exercise the Warrant in full. including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any additional portion of the Warrant. Following any exercise, a portion of the Company’s interest in Rafael Pharmaceuticals would continue to be held for the benefit of the other equity holders in Pharma Holdings and CS Pharma. Given the Company’s anticipated available cash, the Company would not be able to exercise the Warrant in its entirety and the Company may never be able to exercise the Warrant in full. Rafael Pharmaceuticals may also issue additional equity interests, such as stock options, which will require the Company to pay additional cash to maintain the Company’s ownership percentage or exercise the Warrant in full.


XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in Altira
3 Months Ended
Oct. 31, 2020
Investment In Acquired Royalty Rights [Abstract]  
INVESTMENT IN ALTIRA

NOTE 4 – INVESTMENT IN ALTIRA


The Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) on May 13, 2020 with a member (the “Seller”) of Altira Capital & Consulting, LLC (“Altira”). Pursuant to the Purchase Agreement, on May 13, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceutical) on sales of certain Rafael Pharmaceuticals’ products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of interim data analysis in Rafael Pharmaceuticals’ Phase 3 pivotal trial (AVENGER 500®) of CPI-613® (devimistat); and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. The post-closing payments are to be made, at the Company’s discretion, in cash or shares of the Company’s Class B common stock based on the ten days average share price of the Company’s Class B common stock prior to the date of payment or any combination thereof.


The Company has accounted for the purchase of the 33.333% membership interest in Altira as an equity method investment in accordance with the guidance in ASC 323, Investments – Equity Method and Joint Ventures. The Company determined that a 33.333% membership interest in Altira indicates that the Company is able to exercise significant influence over Altira, and the Company’s membership interest is considered to be “more than minor” in accordance with the guidance. The cost of the investment was determined to be $4,000,000 pursuant to the terms of the Purchase Agreement. The contingent consideration, as described within the Purchase Agreement, in the amount of $6,000,000, will be recognized when the payments are considered probable.


For the year ended July 31, 2020, the Company determined that the investment in Altira was fully impaired and recorded an impairment charge of $4,000,000, which was the total amount of the investment in Altira.


During the three months ended October 31, 2020, the Company did not make any payments to the Seller, and the remaining payments due to the Seller of $3,500,000 are recorded as a current liability. The assets and operations of Altira are not significant, and the Company has identified the equity investment in Altira as a related party transaction (see Note 11).


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Investment in RP Finance, LLC
3 Months Ended
Oct. 31, 2020
Investment In RP Finance LLC [Abstract]  
INVESTMENT IN RP FINANCE, LLC

NOTE 5 – INVESTMENT IN RP FINANCE, LLC


On February 3, 2020, Rafael Pharmaceuticals entered into a Line of Credit Loan Agreement (“Line of Credit Agreement”) with RP Finance which provides a revolving commitment of up to $50,000,000 to fund clinical trials and other capital needs.


The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals.


Under the Line of Credit Agreement, all funds borrowed will bear interest at the mid-term Applicable Federal Rate published by the U.S. Internal Revenue Service. The maturity date is the earlier of February 3, 2025, upon a change of control of Rafael Pharmaceuticals or a sale of Rafael Pharmaceuticals or its assets. Rafael Pharmaceuticals can draw on the facility on 60 days’ notice. The funds borrowed under the Line of Credit Agreement must be repaid out of certain proceeds from equity sales by Rafael Pharmaceuticals.


In connection with entering into the Line of Credit Agreement, Rafael Pharmaceuticals agreed to issue to RP Finance shares of its common stock representing 12% of the issued and outstanding shares of Rafael Pharmaceuticals common stock, with such interest subject to anti-dilution protection as set forth in the Line of Credit Agreement.


RP Finance has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance’s economic performance and, therefore, is not required to consolidate RP Finance. Therefore, we will use the equity method of accounting to record our investment in RP Finance. The Company has recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively. The assets and operations of RP Finance are not significant and the Company has identified the equity investment in RP Finance as a related party transaction (see Note 11).


In August 2020, Rafael Pharmaceuticals called for a $5,000,000 draw on the line of credit facility and the facility was funded by RP Finance LLC in the amount $5 million, in August 2020 and September 2020. For the three months ended October 31, 2020, the Company funded $1,875,000 in accordance with its 37.5% ownership interests in RP Finance.


XML 23 R12.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in LipoMedix Pharmaceuticals Ltd.
3 Months Ended
Oct. 31, 2020
Business Combinations [Abstract]  
INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD.

NOTE 6 – INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD.


LipoMedix is a development-stage, privately held Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery.


As of October 31, 2020, the Company held 68% of the issued and outstanding ordinary shares of LipoMedix and has consolidated this investment from the second quarter of fiscal 2018.


In November 2019, the Company provided bridge financing in the principal amount of $100,000 to LipoMedix with a maturity date of May 3, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.


In January 2020, the Company provided bridge financing in the principal amount of $125,000 to LipoMedix with a maturity date of May 3, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.


In March 2020, the Company provided bridge financing in the principal amount of $75,000 to LipoMedix with a maturity date of April 20, 2020. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets.


On May 20, 2020, the Company entered into a Share Purchase Agreement with LipoMedix to purchase 4,000,000 ordinary shares of LipoMedix for an aggregate purchase price of $1,000,000. The purchase consideration consisted of the outstanding Promissory Notes between the Company and LipoMedix dated November 13, 2019, January 21, 2020 and March 27, 2020 in the total principal amount of $300,000 plus accrued interest, for an aggregate amount of $306,737, and $693,263 of cash, thereby increasing the Company’s ownership in Lipomedix from 58% to 68%.


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Fair Value Measurements
3 Months Ended
Oct. 31, 2020
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 7 – FAIR VALUE MEASUREMENTS


Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:


Level 1 - quoted prices in active markets for identical assets or liabilities;

Level 2 - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.


The following is a listing of the Company’s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of October 31, 2020 and July 31, 2020:


   Fair value at October 31, 2020 
   Level 1   Level 2   Level 3   Total 
   (unaudited, in thousands) 
Assets:    
Hedge Funds  $   $   $6,454   $6,454 
Total  $   $   $6,454   $6,454 

   Fair value at July 31, 2020 
   Level 1   Level 2   Level 3   Total 
   (in thousands) 
Assets:    
Hedge Funds  $   $   $7,510   $7,510 
Total  $   $   $7,510   $7,510 

At October 31, 2020 and July 31, 2020, the Company did not have any liabilities measured at fair value on a recurring basis.


The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):


   October 31,
2020
   October 31,
2019
 
   (unaudited, in thousands) 
Balance, beginning of period  $7,510   $5,125 
Liquidation of Hedge Fund Investments   (2,000)    
Total gain (loss) included in earnings   944    (37)
Balance, end of period  $6,454   $5,088 

Hedge funds classified as Level 3 include investments and securities which may not be based on readily observable data inputs. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. In October 2020, the Company received a $2 million distribution of the Company’s investments in Hedge Funds.


The Company holds $2.0 million in investments in securities in another entity that are not liquid, which were included in Investments - Other Pharmaceuticals in the accompanying consolidated balance sheets. The investment is accounted for under ASC 321, Investments - Equity Securities, using the measurement alternative as defined within the guidance, and the Company recorded an impairment loss of $0.7 million and $0 for the three months ended October 31, 2020 and 2019, respectively.


Fair Value of Other Financial Instruments


The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.


Cash and cash equivalents, prepaid expense and other current assets, and accounts payable. At October 31, 2020 and July 31, 2020, the carrying amount of these assets and liabilities approximated fair value because of the short period of time to maturity. The fair value estimates for cash and cash equivalents were classified as Level 1 and other current assets, and other current liabilities were classified as Level 2 of the fair value hierarchy.


Other assets and other liabilities. At October 31, 2020 and July 31, 2020, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.


The Company’s financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amounts of trade accounts receivable, trade accounts payable and due from related parties approximate their fair value due to their short-term nature. Other than noted above, the Company did not have any other assets or liabilities that were measured at fair value on a recurring basis as of October 31, 2020 or July 31, 2020.


XML 25 R14.htm IDEA: XBRL DOCUMENT v3.20.4
Trade Accounts Receivable
3 Months Ended
Oct. 31, 2020
Receivables [Abstract]  
TRADE ACCOUNTS RECEIVABLE

NOTE 8 – TRADE ACCOUNTS RECEIVABLE


Trade Accounts Receivable consisted of the following:


   October 31,
2020
   July 31,
2020
 
   (unaudited, in thousands)   (in thousands) 
Trade Accounts Receivable  $415   $364 
Accounts Receivable - Related Party   150    121 
Less Allowance for Doubtful Accounts   (256)   (218)
Trade Accounts Receivable, net  $309   $267 

The current portion of deferred rental income included in prepaid expenses and other current assets was approximately $77 thousand and $11 thousand as of October 31, 2020 and July 31, 2020, respectively.


The noncurrent portion of deferred rental income included in Other Assets was approximately $1.5 million as of October 31, 2020 and July 31, 2020.


XML 26 R15.htm IDEA: XBRL DOCUMENT v3.20.4
Property and Equipment
3 Months Ended
Oct. 31, 2020
Property, Plant and Equipment [Abstract]  
PROPERTY AND EQUIPMENT

NOTE 9 – PROPERTY AND EQUIPMENT


Property and equipment consisted of the following:


   October 31,
2020
   July 31,
2020
 
   (unaudited, in thousands)   (in thousands) 
Building and Improvements  $47,736   $47,591 
Land   10,412    10,412 
Furniture and Fixtures   1,145    1,145 
Other   256    256 
    59,549    59,404 
Less Accumulated Depreciation   (15,408)   (14,971)
Total  $44,141   $44,433 

Other property and equipment consist of other equipment and miscellaneous computer hardware. 


Depreciation expense pertaining to property and equipment was approximately $0.4 million and $0.5 million for the three months ended October 31, 2020 and 2019, respectively. 


The Company’s headquarters are located at 520 Broad Street in Newark, New Jersey where it occupies office space in the building owned by its subsidiary.


In August 2020, the Company sold an office/data center building in Piscataway, New Jersey, which was classified as held for sale at July 31, 2020.


XML 27 R16.htm IDEA: XBRL DOCUMENT v3.20.4
Loss per Share
3 Months Ended
Oct. 31, 2020
Earnings Per Share [Abstract]  
LOSS PER SHARE

NOTE 10 – LOSS PER SHARE


Basic net loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per shares includes potentially dilutive securities such as stock options and other convertible instruments. These securities have been excluded from the calculation of diluted net loss per shares for the three months ended October 31, 2020 and 2019 because all such securities are anti-dilutive for all periods presented.


The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:


   Three months ended
October 31,
 
   2020   2019 
Stock Options   571,800    586,874 
Total   571,800    586,874 

The diluted loss per share computation equals basic loss per share for the three months ended October 31, 2020 and 2019 because the Company had a net loss and the impact of the assumed exercise of stock options would have been anti-dilutive.


XML 28 R17.htm IDEA: XBRL DOCUMENT v3.20.4
Related Party Transactions
3 Months Ended
Oct. 31, 2020
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 11 – RELATED PARTY TRANSACTIONS


The Company has historically maintained an intercompany balance due to/from related parties that relates to cash advances for investments, loan repayments, charges for services provided to the Company by IDT Corporation, or IDT, and payroll costs for the Company’s personnel that were paid by IDT. The Company also receives rental income from various companies under common control to IDT. The Company recorded expense of approximately $66 thousand in related party services to IDT, of which approximately $30 thousand is included in due to related parties at October 31, 2020.


IDT leases approximately 80,000 square feet of office space plus parking occupied by IDT at 520 Broad Street, Newark, NJ and approximately 3,600 square feet of office space in Jerusalem, Israel. IDT paid the Company approximately $459 thousand for office rent and parking during the three months ended October 31, 2020 and 2019.  As of October 31, 2020 and 2019, IDT owed the Company approximately $69 thousand and $0, respectively, for office rent and parking.


The Company leases space to related parties which represented approximately 56% and 43% of the Company’s total revenue for the three months ended October 31, 2020 and 2019, respectively. See Note 16 for future minimum rent payments from related parties and other tenants.


The Company provides Rafael Pharmaceuticals with administrative, finance, accounting, tax and legal services. Howard S. Jonas serves as a Chairman of the Board of Rafael Pharmaceuticals and owns an equity interest in Rafael Pharmaceuticals. The Company billed Rafael Pharmaceuticals $120,000 for the three months ended October 31, 2020 and 2019, respectively. As of October 31, 2020 and July 31, 2020, Rafael Pharmaceuticals owed the Company $240,000 and $120,000, respectively, included in due from Rafael Pharmaceuticals.


In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8 million shares of Rafael Pharmaceuticals’ Series D Convertible Preferred Stock for $10 million representing approximately 8% of the equity on a fully-diluted basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10 million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee director of the Company. The remainder of the Warrant is held by Pharma Holdings.


On November 5, 2018, Pharma Holdings, LLC partially exercised a warrant to purchase 4 million shares of Rafael Pharmaceuticals’ Series D Convertible Preferred Stock for $5 million, of which $500,000 was contributed by Howard Jonas.


On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2020 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the three months ended October 31, 2020 and 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock.


On January 10, 2019, Pharma Holdings partially exercised a warrant to purchase 5.1 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $6.4 million, of which $640,000 was contributed by Howard Jonas.


On January 23, 2019, Pharma Holdings partially exercised a warrant to purchase 36.3 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $34.4 million, of which $3.4 million was contributed by Howard Jonas.


On January 29, 2020, in connection with the vesting of certain restricted shares of Class B common stock held by an officer of the Company, the Company withheld 5,238 shares to pay for the payroll taxes on the officer’s behalf, totaling approximately $116,000.


The Company acquired membership interest in Altira, a related party in fiscal 2020 and fiscal 2021 (see Note 4 and Note 17).


The Company recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively (see Note 5).


XML 29 R18.htm IDEA: XBRL DOCUMENT v3.20.4
Income Taxes
3 Months Ended
Oct. 31, 2020
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 12 – INCOME TAXES


The Company has completed its accounting for the income tax effects of the enactment of the Tax Act and Care Act. At October 31, 2020, the Company has federal net operating loss (“NOL”) carryforwards from domestic operations of approximately $34.4 million, to offset future taxable income. The Company has state NOLs of $15.3 million. The Company has NOLs from foreign operations of $2.3 million. As part of the Tax Act, federal NOLs generated in 2018 and later are not subject to an expiration period and are available to offset 80% of taxable income in the year in which they are utilized. The federal NOL carryforwards generated prior to 2018 will begin to expire in 2026. The state NOLs will begin to expire in 2038 and foreign NOLs do not expire.


The Company anticipates that its assumptions and estimates may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB, and various other taxing jurisdictions. In particular, the Company anticipates that the U.S. state jurisdictions will continue to determine and announce their conformity with or decoupling from the Tax Act, either in its entirety or with respect to specific provisions. Legislative and interpretive actions could result in adjustments to the Company’s balances.


XML 30 R19.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segment Information
3 Months Ended
Oct. 31, 2020
Segment Reporting [Abstract]  
BUSINESS SEGMENT INFORMATION

NOTE 13 – BUSINESS SEGMENT INFORMATION


The Company conducts business as two operating segments, Pharmaceuticals and Real Estate. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s CEO and chief operating decision-maker.


The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its Pharmaceuticals segment based primarily on research and development efforts and results of clinical trials and the Real Estate segment based primarily on results of operations. All investments in Rafael Pharmaceuticals and assets and expenses associated with LipoMedix and Barer are tracked separately in the Pharmaceuticals segment. All corporate costs are allocated to the Real Estate segment.


The Pharmaceuticals segment is comprised of preferred and common equity interests and the Warrant to purchase equity interests in Rafael Pharmaceuticals, a majority equity interest in LipoMedix and Barer. To date, the Pharmaceuticals segment has not generated any revenues.


The Real Estate segment consists of the Company’s real estate holdings, including a building at 520 Broad Street in Newark, New Jersey that houses headquarters for the Company and certain affiliates and its associated public garage and a portion of an office building in Israel.


In August 2020, the Company sold a 3-story, 65,253 square foot office building located at 225 Old New Brunswick Road in Piscataway, New Jersey to 225 ONBR, LLC, an entity unaffiliated with the Company. The purchase price was $3,875,000 and, after transfer taxes and broker’s commission, the Company received $3,675,638 in cash. As of July 31, 2020, the building was classified as held for sale on the consolidated balance sheet.


Operating results for the business segments of the Company are as follows:


(unaudited, in thousands)  Pharmaceuticals   Real
Estate
   Total 
Three Months Ended October 31, 2020            
Revenues  $   $1,053   $1,053 
Loss from operations   (533)   (1,958)   (2,491)
                
Three Months Ended October 31, 2019               
Revenues  $   $1,210   $1,210 
Loss from operations   (266)   (1,276)   (1,542)

Geographic Information


Revenues from tenants located outside of the United States were generated entirely from related parties located in Israel. Revenues from these non-United States customers as a percentage of total revenues were as follows (revenues by country are determined based on the location of the related facility):


Three Months Ended October 31, (unaudited)  2020   2019 
Revenue from tenants located in Israel   6%   5%

Net long-lived assets and total assets held outside of the United States, which are located in Israel, were as follows:


(unaudited, in thousands)  United
States
   Israel   Total 
October 31, 2020            
Long-lived assets, net  $42,564   $1,577   $44,141 
Total assets   130,744    3,874    134,618 
                
July 31, 2020               
Long-lived assets, net  $42,840   $1,593   $44,433 
Total assets   132,286    4,061    136,347 

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.20.4
Commitments and Contingencies
3 Months Ended
Oct. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 14 – COMMITMENTS AND CONTINGENCIES


Legal Proceedings


On September 17, 2018, LipoMedix was notified of a claim initiated by one of its founders seeking payment of consulting fees in the amount of approximately $377,000 and seeking to place restrictions on LipoMedix’s bank accounts and other assets to protect his claim. LipoMedix did not believe that the individual had the right to receive any payment at that time. LipoMedix responded to the demand for the placement of restrictions on its assets. In May 2019, LipoMedix received a letter from the other founder requesting payment of his consulting fees. On July 15, 2019, the parties settled the matters and the two founders will be paid a percentage of future investments and certain other proceeds.


On July 12, 2019, the Company received a Citation and Notification of Penalty from the Occupational Safety and Health Administration of the U.S. Department of Labor, or OSHA, related to an OSHA inspection of 520 Broad Street, Newark, New Jersey. The citation seeks to impose penalties related to alleged violations of the Occupation Safety and Health Act of 1970 at 520 Broad Street. On July 31, 2019, the Company filed a Notice of Contest with OSHA contesting the citation in its entirety. On February 14, 2020, the Company entered into a Settlement Agreement with OSHA, as related to the citation received on July 12, 2019. As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021.


The Company accounts for contingencies when a loss is considered probable and can be reasonably estimated. For the matters disclosed above, a legal accrual for approximately $64,000 has been recorded for legal fees and losses believed to be both probable and reasonably estimable, but an exposure to additional loss may exist in excess of the amount accrued.


On December 31, 2019, an employee of the Company filed a complaint in connection with the incident that led to the OSHA inspection noted above for personal injuries against the Company and other parties in the New Jersey Supreme Court for an incident that took place on January 31, 2019 at 520 Broad Street, Newark, New Jersey. The Company intends to vigorously defend this matter. The loss is considered remote and no accrual has been recorded.


The Company may from time to time be subject to legal proceedings that may arise in the ordinary course of business. Although there can be no assurance in this regard, other than noted above, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.


XML 32 R21.htm IDEA: XBRL DOCUMENT v3.20.4
Equity
3 Months Ended
Oct. 31, 2020
Stockholders' Equity Note [Abstract]  
EQUITY

NOTE 15 – EQUITY


On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million that was convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly.


In August 2019, the note, including interest of approximately $667,000 was converted into 1,849,749 shares of Class B common stock.


Pursuant to the Company’s 2018 Equity Incentive Plan, each of our three non-employee directors of the Company was granted 4,203 restricted shares of our Class B common stock in January 2020 which fully vested on the date of the grant. The fair value of the awards on the date of the grant was approximately $208,000 which was included in selling, general and administrative expense.


During the three months ended October 31, 2020, 8,750 options were exercised. At October 31, 2020, there was no unrecognized compensation cost related to non-vested stock options.


Stock Options


A summary of stock option activity for the Company is as follows:


   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
(in years)
   Aggregate
Intrinsic Value
(in thousands)
 
Outstanding at July 31, 2020   580,874   $4.90    2.65   $2,846 
Granted                  
Exercised   (8,750)   4.90           
Cancelled / Forfeited   (324)              
Outstanding at October 31, 2020   571,800   $4.90    2.40   $2,802 
Exercisable at October 31, 2020   571,800   $4.90    2.40   $2,802 

Restricted Stock


The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service.


A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below:


   Number of
Non-vested
Shares
   Weighted
Average
Grant Date
Fair Value
 
Outstanding at July 31, 2020   123,104   $10.80 
Granted   9,360    16.58 
Vested   (7,027)   (16.91)
Cancelled / Forfeited   (2,099)   (13.54)
Non-vested shares at October 31, 2020   123,338   $13.79 

At October 31, 2020, there was $1.4 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 2.18 years.


XML 33 R22.htm IDEA: XBRL DOCUMENT v3.20.4
Leases
3 Months Ended
Oct. 31, 2020
Leases [Abstract]  
LEASES

NOTE 16 – LEASES


The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029. Lease income included on the consolidated statements of operations and comprehensive loss for the three months ended October 31, 2020 and 2019 was $634 thousand and $866 thousand, respectively.


The future contractual minimum lease payments to be received (excluding operating expense reimbursements) by the Company as of October 31, 2020, under non-cancellable operating leases which expire on various dates through 2028 are as follows:


Year ending July 31,  Related
Parties
   Other   Total 
   (in thousands) 
2021 (remaining)  $1,532   $603   $2,135 
2022   2,078    776    2,854 
2023   2,117    592    2,709 
2024   2,155    538    2,693 
2025   1,659    550    2,209 
Thereafter       1,948    1,948 
Total Minimum Future Rental Income  $9,541   $5,007   $14,548 

The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel. The annual rent is approximately $2.0 million in the aggregate. The related parties have the right to terminate the domestic leases upon four months’ notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. A related party has the right to terminate the Israeli lease upon four months’ notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years.


XML 34 R23.htm IDEA: XBRL DOCUMENT v3.20.4
Subsequent Events
3 Months Ended
Oct. 31, 2020
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 17 – SUBSEQUENT EVENTS


In November 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount of $5 million. The Company funded $1.875 million of the $5 million draw in accordance with its 37.5% ownership interests in RP Finance.


The Company entered into a Membership Interest Purchase Agreement (the “Second Altira Agreement”) on December 7, 2020 with a member (the “Seller”) of Altira. Pursuant to the Second Altira Agreement, on December 7, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceuticals) on sales of certain Rafael Pharmaceuticals’ products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each, commencing on January 4, 2021; 2) $3,000,000 due on January 4, 2021; 3) $3,000,000 due within fifteen (15) days of the earlier to occur of either the completion of Rafael Pharmaceuticals’ Phase III pivotal trial (AVENGER 500®) of CPI-613® (devimistat) or May 31, 2021 and not before January 4, 2021; and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. Certain of the post-closing payments may be made, at the Company’s discretion, in cash or shares of the Company’s Class B common stock based on the ten day average share price of the Company’s Class B common stock prior to the date of payment or any combination thereof.


On December 7, 2020, Rafael Holdings entered into a Securities Purchase Agreement (the “SPA”) for the sale of 567,437 shares of the Company’s Class B common stock at a price per share of $22.91 (which was the closing price for the Class B common stock on the New York Stock Exchange on December 4, 2020 the trading day immediately preceding the date of the SPA) for an aggregate purchase price of $13 million. In connection with the purchases, each purchaser was granted warrants to purchase twenty percent (20%) of the shares of Class B common stock purchased by such purchaser. The warrants have an exercise price of $22.91 per share and expire on June 6, 2022. The Company issued warrants to purchase an aggregate of 113,487 shares of Class B common stock. A majority of the proceeds received pursuant to the SPA are expected to be used by the Company to exercise an additional portion of the warrant held by the Company’s subsidiary to purchase equity securities of Rafael Pharmaceuticals, Inc. in order to maintain the Company’s relative position as a percentage of shares outstanding as well as the fully-diluted equity of Rafael Pharmaceuticals in light of issuances of Rafael Pharmaceuticals equity securities to third-party shareholders of Rafael Pharmaceuticals, including due to warrant exercises by these shareholders. The Company intends to use additional proceeds to fund the operations of its drug development programs including its Barer Institute subsidiary, and for general corporate purposes. Under the SPA, two entities, on whose Boards of Directors Howard Jonas, the Registrant’s Chief Executive Officer and Chairman of the Board serves, each purchased 218,245 shares of Class B common stock for consideration of $10 million. The shares and warrants were issued in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended.


On December 10, 2020, a controlled subsidiary of the Company, Farber Partners LLC, or Farber, reached an agreement with Princeton University to in-license certain patents and related information related to the serine hydroxymethyltransferase (SHMT) inhibitor program developed by the laboratory of Dr. Joshua D. Rabinowitz at Princeton. Farber will pay Princeton a minimum annual royalty payment of $50 thousand, in addition to percentage royalties and a percentage of any sublicense revenue. Additionally, there are development milestone payments which Farber will pay Princeton for the first three products developed by Farber, or any sublicensees or affiliates.


XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.4
Accounting Policies, by Policy (Policies)
3 Months Ended
Oct. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation


The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.


The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2020 refers to the fiscal year ended July 31, 2020).


Operating results for the three months ended October 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2021. The balance sheet at July 31, 2020 has been derived from the Company’s audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended July 31, 2020, or the 2020 Form 10-K, as filed with the U.S. Securities and Exchange Commission (“SEC”).

Use of Estimates

Use of Estimates    


The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates.

Risks and Uncertainties - COVID-19

Risks and Uncertainties - COVID-19


In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and has since spread around the globe. The Company actively monitors the outbreak and its potential impact on its operations and those of the Company’s holdings.


The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible from the pandemic, including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies.


The Company has one tenant that has not paid rent for August 2020 due to the New Jersey state gym closures; however, the tenant subsequently resumed rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of the Company’s real estate portfolio as well as efforts to monetize those assets.


The Company has implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings.


Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of the Company’s holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic’s impact on the U.S. and global economies, changes in our customers’ behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, the Company may incur expenses or delays relating to such events outside of the Company’s control, which could have a material adverse impact on the Company’s business.

Investments

Investments


The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated.


Investments in businesses that the Company does not control, but in which the Company has the ability to exercise significant influence over operating and financial matters, are accounted for using the equity method. Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. The Company periodically evaluates its investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established.

Variable Interest Entities

Variable Interest Entities


In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation, the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities (“VIEs”). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.


If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company – that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary.


Cost Method Investments - Rafael Pharmaceuticals (see Note 3) is a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance. Cost method investments are presented as “Investments - Rafael Pharmaceuticals.”


Equity Method Investments - RP Finance, LLC (“RP Finance”), (see Note 5), has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance’s economic performance and, therefore, is not required to consolidate RP Finance. The Company accounts for its investment in RP Finance using the equity method of accounting.

Revenue Recognition

Revenue Recognition


The Company applies the five-step approach as described in ASC 606, Revenue from Contracts with Customers, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract and (v) recognizing revenue when (or as) the entity satisfies a performance obligation.


The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss. As an owner and operator of real estate, the Company derives the majority of its revenue from leasing office and parking space to tenants at its properties. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842, Leases.


Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements.


The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company’s performance obligation is satisfied, consistent with the Company’s previous accounting.


The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due.

Research and Development Costs

Research and Development Costs


Research and development costs and expenses incurred by consolidated entities consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended.


Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property.

Recently Issued Accounting Standards Not Yet Adopted

Recently Issued Accounting Standards Not Yet Adopted


In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and will be applied as a cumulative-effect adjustment to retained earnings. The Company is currently evaluating the impact of the pending adoption of the new standard on its consolidated financial statements and intends to adopt the standard on August 1, 2023.

XML 36 R25.htm IDEA: XBRL DOCUMENT v3.20.4
Description of Business (Tables)
3 Months Ended
Oct. 31, 2020
Accounting Policies [Abstract]  
Schedule of entities majority-owned subsidiaries
Company   Country of Incorporation   Percentage
Owned
 
Rafael Holdings, Inc.   United States – Delaware     100 %
Broad Atlantic Associates, LLC   United States – Delaware     100 %
IDT 225 Old NB Road, LLC   United States – Delaware     100 %
IDT R.E. Holdings Ltd.   Israel     100 %
Rafael Holdings Realty, Inc.   United States – Delaware     100 %
Barer Institute, Inc.   United States – Delaware     100 %
The Barer Institute, LLC   United States – Delaware     100 %
Hillview Avenue Realty, JV   United States – Delaware     100 %
Hillview Avenue Realty, LLC   United States – Delaware     100 %
Levco Pharmaceuticals Ltd.   Israel     95 %
Farber Partners, LLC   United States – Delaware     93 %
Pharma Holdings, LLC   United States – Delaware     90 %
LipoMedix Pharmaceuticals Ltd.   Israel     68 %
CS Pharma Holdings, LLC   United States – Delaware     45 %*
*50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC.
XML 37 R26.htm IDEA: XBRL DOCUMENT v3.20.4
Fair Value Measurements (Tables)
3 Months Ended
Oct. 31, 2020
Fair Value Disclosures [Abstract]  
Schedule of fair value on a recurring basis and where they are classified within the fair value hierarchy
   Fair value at October 31, 2020 
   Level 1   Level 2   Level 3   Total 
   (unaudited, in thousands) 
Assets:    
Hedge Funds  $   $   $6,454   $6,454 
Total  $   $   $6,454   $6,454 
   Fair value at July 31, 2020 
   Level 1   Level 2   Level 3   Total 
   (in thousands) 
Assets:    
Hedge Funds  $   $   $7,510   $7,510 
Total  $   $   $7,510   $7,510 
Schedule of assets measured at fair value on a recurring basis using significant unobservable inputs
   October 31,
2020
   October 31,
2019
 
   (unaudited, in thousands) 
Balance, beginning of period  $7,510   $5,125 
Liquidation of Hedge Fund Investments   (2,000)    
Total gain (loss) included in earnings   944    (37)
Balance, end of period  $6,454   $5,088 
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.20.4
Trade Accounts Receivable (Tables)
3 Months Ended
Oct. 31, 2020
Receivables [Abstract]  
Schedule of trade accounts receivable
   October 31,
2020
   July 31,
2020
 
   (unaudited, in thousands)   (in thousands) 
Trade Accounts Receivable  $415   $364 
Accounts Receivable - Related Party   150    121 
Less Allowance for Doubtful Accounts   (256)   (218)
Trade Accounts Receivable, net  $309   $267 
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.20.4
Property and Equipment (Tables)
3 Months Ended
Oct. 31, 2020
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment
   October 31,
2020
   July 31,
2020
 
   (unaudited, in thousands)   (in thousands) 
Building and Improvements  $47,736   $47,591 
Land   10,412    10,412 
Furniture and Fixtures   1,145    1,145 
Other   256    256 
    59,549    59,404 
Less Accumulated Depreciation   (15,408)   (14,971)
Total  $44,141   $44,433 
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.20.4
Loss per Share (Tables)
3 Months Ended
Oct. 31, 2020
Earnings Per Share [Abstract]  
Schedule of earning per share
   Three months ended
October 31,
 
   2020   2019 
Stock Options   571,800    586,874 
Total   571,800    586,874 
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segment Information (Tables)
3 Months Ended
Oct. 31, 2020
Segment Reporting [Abstract]  
Schedule of operating results for the business segments
(unaudited, in thousands)  Pharmaceuticals   Real
Estate
   Total 
Three Months Ended October 31, 2020            
Revenues  $   $1,053   $1,053 
Loss from operations   (533)   (1,958)   (2,491)
                
Three Months Ended October 31, 2019               
Revenues  $   $1,210   $1,210 
Loss from operations   (266)   (1,276)   (1,542)
Schedule of revenue from tenants by geographic areas
Three Months Ended October 31, (unaudited)  2020   2019 
Revenue from tenants located in Israel   6%   5%
Schedule of net long-lived assets and total assets by geographic areas
(unaudited, in thousands)  United
States
   Israel   Total 
October 31, 2020            
Long-lived assets, net  $42,564   $1,577   $44,141 
Total assets   130,744    3,874    134,618 
                
July 31, 2020               
Long-lived assets, net  $42,840   $1,593   $44,433 
Total assets   132,286    4,061    136,347 
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.20.4
Equity (Tables)
3 Months Ended
Oct. 31, 2020
Stockholders' Equity Note [Abstract]  
Schedule of stock option activity
   Number of
Options
   Weighted
Average
Exercise
Price
   Weighted
Average
Remaining
Contractual
Term
(in years)
   Aggregate
Intrinsic Value
(in thousands)
 
Outstanding at July 31, 2020   580,874   $4.90    2.65   $2,846 
Granted                  
Exercised   (8,750)   4.90           
Cancelled / Forfeited   (324)              
Outstanding at October 31, 2020   571,800   $4.90    2.40   $2,802 
Exercisable at October 31, 2020   571,800   $4.90    2.40   $2,802 
Schedule of grants of restricted shares of Class B common stock
   Number of
Non-vested
Shares
   Weighted
Average
Grant Date
Fair Value
 
Outstanding at July 31, 2020   123,104   $10.80 
Granted   9,360    16.58 
Vested   (7,027)   (16.91)
Cancelled / Forfeited   (2,099)   (13.54)
Non-vested shares at October 31, 2020   123,338   $13.79 
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.20.4
Leases (Tables)
3 Months Ended
Oct. 31, 2020
Leases [Abstract]  
Schedule of future contractual minimum lease payments
Year ending July 31,  Related
Parties
   Other   Total 
   (in thousands) 
2021 (remaining)  $1,532   $603   $2,135 
2022   2,078    776    2,854 
2023   2,117    592    2,709 
2024   2,155    538    2,693 
2025   1,659    550    2,209 
Thereafter       1,948    1,948 
Total Minimum Future Rental Income  $9,541   $5,007   $14,548 
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.20.4
Description of Business (Details)
3 Months Ended
Oct. 31, 2020
Description of Business (Details) [Line Items]  
Percentage owned 50.00%
Interest percentage 45.00%
Pharma Holdings, LLC [Member]  
Description of Business (Details) [Line Items]  
Percentage owned 90.00%
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.20.4
Description of Business (Details) - Schedule of entities majority-owned subsidiaries
3 Months Ended
Oct. 31, 2020
Rafael Holdings, Inc. [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
Broad Atlantic Associates, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
IDT 225 Old NB Road, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
IDT R.E. Holdings Ltd. [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation Israel
Percentage Owned 100.00%
Rafael Holdings Realty, Inc. [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
Barer Institute, Inc. [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
The Barer Institute, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
Hillview Avenue Realty, JV [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
Hillview Avenue Realty, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 100.00%
Levco Pharmaceuticals Ltd. [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation Israel
Percentage Owned 95.00%
Farber Partners, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 93.00%
Pharma Holdings, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 90.00%
LipoMedix Pharmaceuticals Ltd. [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation Israel
Percentage Owned 68.00%
CS Pharma Holdings, LLC [Member]  
Description of Business (Details) - Schedule of entities majority-owned subsidiaries [Line Items]  
Country of Incorporation United States - Delaware
Percentage Owned 45.00% [1]
[1] 50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC.
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in Rafael Pharmaceuticals (Details) - USD ($)
shares in Millions, $ in Millions
1 Months Ended 3 Months Ended
Jan. 31, 2019
Oct. 31, 2020
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Ownership percentage in non-operating subsidiary   50.00%
Fully diluted   10.00%
Principal amount (in Dollars) $ 10  
Convertible promissory note, rate of interest 3.50%  
Rafael Pharmaceuticals [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Ownership percentage in non-operating subsidiary   90.00%
Pharma Holdings [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Ownership percentage in non-operating subsidiary   90.00%
Howard Jonas [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Fully diluted   10.00%
Howard Jonas [Member] | Rafael Pharmaceuticals [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Fully diluted   10.00%
Series D Convertible Preferred Stock [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Exercise of warrants purchases, description   The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class.
Rafael Pharmaceuticals [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Ownership percentage in subsidiary and holds percentage of interest   50.00%
Indirect interest in assets held, percentage   45.00%
Percentage of outstanding capital stock   51.00%
Percentage of outstanding capital stock on fully diluted basis   37.00%
CS Pharma Holdings, LLC [Member] | Series D Convertible Preferred Stock [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Exercise price of warrants or rights, description   Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the “Warrant”). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share
Purchase of exercise the warrant, shares (in Shares)   16.7
Pharma Holdings [Member]    
Investment in Rafael Pharmaceuticals (Details) [Line Items]    
Exercise price of warrants or rights, description   the Company owned 51% of the issued and outstanding equity in Rafael Pharmaceuticals. At that date, approximately 8% of the issued and outstanding equity was owned by the Company’s subsidiary CS Pharma and 42% was held by the Company’s subsidiary Pharma Holdings. The Company’s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company’s total ownership to 56%. Based on the shares issued and outstanding of Rafael Pharmaceuticals as of October 31, 2020, the Company, and the Company’s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company’s affiliates would need to pay approximately $104 million to exercise the Warrant in full. including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any additional portion of the Warrant.
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in Altira (Details) - USD ($)
3 Months Ended 12 Months Ended
May 13, 2020
Oct. 31, 2020
Oct. 31, 2019
Jul. 31, 2020
Investment in Altira (Details) [Line Items]        
Impairment charge   $ 724,000  
Due to the seller   $ 3,500,000    
Altira [Member]        
Investment in Altira (Details) [Line Items]        
Percentage of membership interest   33.333%    
Cost of investments   $ 4,000,000    
Contingent consideration   $ 6,000,000    
Impairment charge       $ 4,000,000
Purchase Agreement [Member]        
Investment in Altira (Details) [Line Items]        
Purchase agreement, description the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceutical) on sales of certain Rafael Pharmaceuticals’ products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of interim data analysis in Rafael Pharmaceuticals’ Phase 3 pivotal trial (AVENGER 500®) of CPI-613® (devimistat); and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement. The post-closing payments are to be made, at the Company’s discretion, in cash or shares of the Company’s Class B common stock based on the ten days average share price of the Company’s Class B common stock prior to the date of payment or any combination thereof.      
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in RP Finance, LLC (Details) - USD ($)
1 Months Ended 3 Months Ended
Feb. 03, 2020
Aug. 31, 2020
Oct. 31, 2020
Oct. 31, 2019
Sep. 30, 2020
Investment in RP Finance, LLC (Details) [Line Items]          
Income from interest     $ 96,000 $ 0  
Percentage of ownership interest     37.50% 37.50%  
Line of Credit Facility, Description   Rafael Pharmaceuticals called for a $5,000,000 draw on the line of credit facility      
Capital fund invested     $ 1,875,000    
Rafael Pharmaceuticals [Member]          
Investment in RP Finance, LLC (Details) [Line Items]          
Amount of revolving commitment to funds   $ 5,000,000     $ 5,000,000
Percentage of issued and outstanding shares     12.00%    
Line of Credit Agreement [Member]          
Investment in RP Finance, LLC (Details) [Line Items]          
Amount of revolving commitment to funds $ 50,000,000        
Description line of credit facility The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals.        
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.20.4
Investment in LipoMedix Pharmaceuticals Ltd. (Details) - USD ($)
1 Months Ended
Mar. 27, 2020
Oct. 31, 2020
May 20, 2020
Jan. 21, 2020
Mar. 31, 2020
Jan. 31, 2020
Nov. 30, 2019
Nov. 13, 2019
Investment in LipoMedix Pharmaceuticals Ltd. (Details) [Line Items]                
Issued and outstanding ordinary shares, percentage   68.00%            
Bridge finance         $ 75,000 $ 125,000 $ 100,000  
Ordinary shares (in Shares)     4,000,000          
Purchase price     $ 1,000,000          
Total principal amount               $ 300,000
Interest, for an aggregate amount $ 693,263     $ 306,737        
Minimum [Member] | LipoMedix [Member]                
Investment in LipoMedix Pharmaceuticals Ltd. (Details) [Line Items]                
Ownership percentage     58.00%          
Maximum [Member] | LipoMedix [Member]                
Investment in LipoMedix Pharmaceuticals Ltd. (Details) [Line Items]                
Ownership percentage     68.00%          
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.20.4
Fair Value Measurements (Details) - USD ($)
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Fair Value Disclosures [Abstract]    
Spin-Off, IDT contribution investment amount $ 2,000,000  
Investments in securities 2,000,000  
Unrealized loss $ 700,000 $ 0
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.20.4
Fair Value Measurements (Details) - Schedule of fair value on a recurring basis and where they are classified within the fair value hierarchy - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
Fair Value Measurements (Details) - Schedule of fair value on a recurring basis and where they are classified within the fair value hierarchy [Line Items]    
Hedge Funds $ 6,454 $ 7,510
Total 6,454 7,510
Level 1 [Member]    
Fair Value Measurements (Details) - Schedule of fair value on a recurring basis and where they are classified within the fair value hierarchy [Line Items]    
Hedge Funds
Total
Level 2 [Member]    
Fair Value Measurements (Details) - Schedule of fair value on a recurring basis and where they are classified within the fair value hierarchy [Line Items]    
Hedge Funds
Total
Level 3 [Member]    
Fair Value Measurements (Details) - Schedule of fair value on a recurring basis and where they are classified within the fair value hierarchy [Line Items]    
Hedge Funds 6,454 7,510
Total $ 6,454 $ 7,510
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.20.4
Fair Value Measurements (Details) - Schedule of assets measured at fair value on a recurring basis using significant unobservable inputs - USD ($)
$ in Thousands
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Defined Benefit Plan Disclosure [Line Items]    
Balance, beginning of period $ 7,510 $ 5,125
Liquidation of Hedge Fund Investments (2,000)
Total gain (loss) included in earnings 944 (37)
Balance, end of period $ 6,454 $ 5,088
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.20.4
Trade Accounts Receivable (Details) - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
Current Portion of Deferred Rental Income [Member]    
Trade Accounts Receivable (Details) [Line Items]    
Prepaid expenses and other current assets $ 77 $ 11
Noncurrent Portion of Deferred Rental Income [Member]    
Trade Accounts Receivable (Details) [Line Items]    
Other assets $ 1,500 $ 1,500
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.20.4
Trade Accounts Receivable (Details) - Schedule of trade accounts receivable - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
Schedule of trade accounts receivable [Abstract]    
Trade Accounts Receivable $ 415 $ 364
Accounts Receivable - Related Party 150 121
Less Allowance for Doubtful Accounts (256) (218)
Trade Accounts Receivable, net $ 309 $ 267
XML 55 R44.htm IDEA: XBRL DOCUMENT v3.20.4
Property and Equipment (Details) - USD ($)
$ in Millions
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Property and Equipment [Member]    
Property and Equipment (Details) [Line Items]    
Depreciation expense $ 0.4 $ 0.5
XML 56 R45.htm IDEA: XBRL DOCUMENT v3.20.4
Property and Equipment (Details) - Schedule of property and equipment - Property and Equipment [Member] - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
Property, Plant and Equipment [Line Items]    
Building and Improvements $ 47,736 $ 47,591
Land 10,412 10,412
Furniture and Fixtures 1,145 1,145
Other 256 256
Property and equipment, gross 59,549 59,404
Less Accumulated Depreciation (15,408) (14,971)
Total $ 44,141 $ 44,433
XML 57 R46.htm IDEA: XBRL DOCUMENT v3.20.4
Loss per Share (Details) - Schedule of earning per share - shares
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Schedule of earning per share [Abstract]    
Stock Options 571,800 586,874
Total 571,800 586,874
XML 58 R47.htm IDEA: XBRL DOCUMENT v3.20.4
Related Party Transactions (Details)
1 Months Ended 3 Months Ended
Jan. 10, 2019
USD ($)
shares
Nov. 15, 2018
Nov. 05, 2018
USD ($)
shares
Jan. 29, 2020
USD ($)
shares
Jan. 23, 2019
USD ($)
shares
Sep. 30, 2018
Oct. 31, 2020
USD ($)
Oct. 31, 2019
USD ($)
Jul. 31, 2020
USD ($)
Related Party Transactions (Details) [Line Items]                  
Area of land (in Square Meters) | m²             3,600    
Office rent and parking             $ 459,000 $ 459,000  
Percentage of total revenue             56.00% 43.00%  
Ownership percentage, description             The Company recognized approximately $96 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the three months ended October 31, 2020 and 2019, respectively (see Note 5).    
Related party transaction, description   the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2020 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the three months ended October 31, 2020 and 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock.              
IDT Rafael Holdings, LLC [Member]                  
Related Party Transactions (Details) [Line Items]                  
Area of land (in Square Meters) | m²             80,000    
IDT [Member]                  
Related Party Transactions (Details) [Line Items]                  
Related party expenses             $ 66,000    
Due to related parties             30,000    
Office rent and parking             69,000 $ 0  
Rafael Pharmaceuticals [Member]                  
Related Party Transactions (Details) [Line Items]                  
Due from related parties             120,000 $ 120,000  
Due from related parties             $ 240,000   $ 120,000
IDT Rafael Holdings, LLC [Member]                  
Related Party Transactions (Details) [Line Items]                  
Warrant exercised (in Shares) | shares 5,100,000   4,000,000   36,300,000        
Proceeds from warrant exercises $ 6,400,000   $ 5,000,000   $ 34,400,000        
Howard S. Jonas [Member]                  
Related Party Transactions (Details) [Line Items]                  
Due to related parties $ 640,000   $ 500,000   $ 3,400,000        
Class B Common Stock [Member] | Officer's [Member]                  
Related Party Transactions (Details) [Line Items]                  
Restricted shares vested (in Shares) | shares       5,238          
Payroll Taxes       $ 116,000          
Cs Pharma Holdings [Member]                  
Related Party Transactions (Details) [Line Items]                  
Ownership percentage, description           In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8 million shares of Rafael Pharmaceuticals’ Series D Convertible Preferred Stock for $10 million representing approximately 8% of the equity on a fully-diluted basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10 million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee director of the Company. The remainder of the Warrant is held by Pharma Holdings.      
XML 59 R48.htm IDEA: XBRL DOCUMENT v3.20.4
Income Taxes (Details)
$ in Millions
3 Months Ended
Oct. 31, 2020
USD ($)
Income Tax Disclosure [Abstract]  
Carryforwards of domestic operations $ 34.4
State of operations 15.3
Foreign of operations $ 2.3
Taxable income 80.00%
XML 60 R49.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segment Information (Details)
1 Months Ended 12 Months Ended
Aug. 31, 2020
Jul. 31, 2020
Segment Reporting [Abstract]    
Number of operating segments   2
Sale of building, description the Company sold a 3-story, 65,253 square foot office building located at 225 Old New Brunswick Road in Piscataway, New Jersey to 225 ONBR, LLC, an entity unaffiliated with the Company. The purchase price was $3,875,000 and, after transfer taxes and broker’s commission, the Company received $3,675,638 in cash.  
XML 61 R50.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segment Information (Details) - Schedule of operating results for the business segments - USD ($)
$ in Thousands
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Segment Reporting Information [Line Items]    
Revenues $ 1,053 $ 1,210
Loss from operations (2,491) (1,542)
Pharmaceuticals [Member]    
Segment Reporting Information [Line Items]    
Revenues
Loss from operations (533) (266)
Real Estate [Member]    
Segment Reporting Information [Line Items]    
Revenues 1,053 1,210
Loss from operations $ (1,958) $ (1,276)
XML 62 R51.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segment Information (Details) - Schedule of revenue from tenants by geographic areas
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Segment Reporting Information [Line Items]    
Revenue from tenants located in Israel 6.00% 5.00%
XML 63 R52.htm IDEA: XBRL DOCUMENT v3.20.4
Business Segment Information (Details) - Schedule of net long-lived assets and total assets by geographic areas - USD ($)
$ in Thousands
Oct. 31, 2020
Jul. 31, 2020
Segment Reporting Information [Line Items]    
Total assets $ 134,618 $ 136,347
Business Segment [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets, net 44,141 44,433
Total assets 134,618 136,347
United States [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets, net 42,564 42,840
Total assets 130,744 132,286
Israel [Member]    
Segment Reporting Information [Line Items]    
Long-lived assets, net 1,577 1,593
Total assets $ 3,874 $ 4,061
XML 64 R53.htm IDEA: XBRL DOCUMENT v3.20.4
Commitments and Contingencies (Details) - USD ($)
1 Months Ended 3 Months Ended
Sep. 17, 2018
Oct. 31, 2020
Commitments and Contingencies Disclosure [Abstract]    
Payment of consulting fees $ 377,000  
Settlement agreement, description   As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021.
Legal fees   $ 64,000
XML 65 R54.htm IDEA: XBRL DOCUMENT v3.20.4
Equity (Details)
1 Months Ended 3 Months Ended
Aug. 31, 2019
USD ($)
Nov. 15, 2018
USD ($)
$ / shares
Oct. 31, 2020
USD ($)
shares
Equity (Details) [Line Items]      
Note term   3 years  
Interest rate   6.00%  
Number of options exercised (in Shares) | shares     8,750
Unrecognized compensation cost over next period     2 years 65 days
Total unrecognized compensation cost     $ 1,400,000
Restricted Stock [Member]      
Equity (Details) [Line Items]      
Unrecognized compensation cost over next period     3 years
2018 Equity Incentive Plan [Member]      
Equity (Details) [Line Items]      
Number of non-employee directors     3
Restricted shares granted (in Shares) | shares     4,203
Fair value of grants     $ 208,000
Class B Common Stock [Member]      
Equity (Details) [Line Items]      
Convertible note $ 667,000 $ 15,000,000  
Conversion of common stock price per share (in Dollars per share) | $ / shares   $ 8.47  
Convertible into shares of common stock 1,849,749    
XML 66 R55.htm IDEA: XBRL DOCUMENT v3.20.4
Equity (Details) - Schedule of stock option activity
$ / shares in Units, $ in Thousands
3 Months Ended
Oct. 31, 2020
USD ($)
$ / shares
shares
Schedule of stock option activity [Abstract]  
Number of Options, Outstanding, Beginning balance | shares 580,874
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares $ 4.90
Weighted Average Remaining Contractual Term (in years), Outstanding, Beginning 2 years 237 days
Aggregate Intrinsic Value, Outstanding, Beginning balance | $ $ 2,846
Number of Options, Granted | shares
Weighted Average Exercise Price, Granted | $ / shares
Number of Options, Exercised | shares (8,750)
Weighted Average Exercise Price, Exercised | $ / shares $ 4.90
Number of Options, Cancelled / Forfeited | shares (324)
Weighted Average Exercise Price, Cancelled / Forfeited | $ / shares
Number of Options, Outstanding, Ending balance | shares 571,800
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares $ 4.90
Weighted Average Remaining Contractual Term (in years), Outstanding, Ending balance 2 years 146 days
Aggregate Intrinsic Value, Outstanding, Ending balance | $ $ 2,802
Number of Options, Exercisable | shares 571,800
Weighted Average Exercise Price, Exercisable | $ / shares $ 4.90
Weighted Average Remaining Contractual Term (in years) Exercisable 2 years 146 days
Aggregate Intrinsic Value, Outstanding, Exercisable | $ $ 2,802
XML 67 R56.htm IDEA: XBRL DOCUMENT v3.20.4
Equity (Details) - Schedule of grants of restricted shares of Class B common stock
3 Months Ended
Oct. 31, 2020
$ / shares
shares
Schedule of grants of restricted shares of Class B common stock [Abstract]  
Number of Non-vested Shares, Beginning Balance | shares 123,104
Weighted Average Grant Date Fair Value, Beginning balance | $ / shares $ 10.80
Number of Non-vested Shares, Granted | shares 9,360
Weighted Average Grant Date Fair Value, Granted | $ / shares $ 16.58
Number of Non-vested Shares, Vested | shares (7,027)
Weighted Average Grant Date Fair Value, Vested | $ / shares $ (16.91)
Number of Non-vested Shares, Cancelled / Forfeited | shares (2,099)
Weighted Average Grant Date Fair Value, Cancelled / Forfeited | $ / shares $ (13.54)
Number of Non-vested Shares, Ending Balance | shares 123,338
Weighted Average Grant Date Fair Value, Ending balance | $ / shares $ 13.79
XML 68 R57.htm IDEA: XBRL DOCUMENT v3.20.4
Leases (Details) - USD ($)
$ in Thousands
3 Months Ended
Oct. 31, 2020
Oct. 31, 2019
Disclosure Text Block [Abstract]    
Net operating leases with initial term expiration dates The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029.  
Other income $ 634 $ 866
Related party leases expire, description The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel.  
Annual rent $ 2,000  
Related parties terminate leases, description The related parties have the right to terminate the domestic leases upon four months’ notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. A related party has the right to terminate the Israeli lease upon four months’ notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years.  
XML 69 R58.htm IDEA: XBRL DOCUMENT v3.20.4
Leases (Details) - Schedule of future contractual minimum lease payments
Jul. 31, 2020
USD ($)
Leases (Details) - Schedule of future contractual minimum lease payments [Line Items]  
2021 (remaining) $ 2,135
2022 2,854
2023 2,709
2024 2,693
2025 2,209
Thereafter 1,948
Total Minimum Future Rental Income 14,548
Related Parties [Member]  
Leases (Details) - Schedule of future contractual minimum lease payments [Line Items]  
2021 (remaining) 1,532
2022 2,078
2023 2,117
2024 2,155
2025 1,659
Total Minimum Future Rental Income 9,541
Other [Member]  
Leases (Details) - Schedule of future contractual minimum lease payments [Line Items]  
2021 (remaining) 603
2022 776
2023 592
2024 538
2025 550
Thereafter 1,948
Total Minimum Future Rental Income $ 5,007
XML 70 R59.htm IDEA: XBRL DOCUMENT v3.20.4
Subsequent Events (Details) - USD ($)
3 Months Ended
Dec. 10, 2020
Dec. 07, 2020
Oct. 31, 2020
Subsequent Events (Details) [Line Items]      
Description of Purchase Agreement Periodic Payments     In November 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount of $5 million. The Company funded $1.875 million of the $5 million draw in accordance with its 37.5% ownership interests in RP Finance.
Subsequent Event [Member]      
Subsequent Events (Details) [Line Items]      
Purchase agreement, description   the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Royalty Agreement between Altira and Rafael Pharmaceuticals) on sales of certain Rafael Pharmaceuticals’ products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each, commencing on January 4, 2021; 2) $3,000,000 due on January 4, 2021; 3) $3,000,000 due within fifteen (15) days of the earlier to occur of either the completion of Rafael Pharmaceuticals’ Phase III pivotal trial (AVENGER 500®) of CPI-613® (devimistat) or May 31, 2021 and not before January 4, 2021; and 4) $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined in the Purchase Agreement.  
Sale of stock (in Shares)   567,437  
Stock price per share (in Dollars per share)   $ 22.91  
Aggregate purchase price   $ 13,000,000  
Percentage of warrants to purchase   20.00%  
Warrant exercise price (in Dollars per share)   $ 22.91  
Purchase an aggregate of shares (in Shares)   113,487  
Purchased of common stock   $ 218,245  
Cash consideration   $ 10,000,000  
Annual royalty payment $ 50,000    
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