Rafael Holdings, Inc. Announces Proposed Terms of a $25 Million Rights Offering to Support Its Commitment to the Development and Potential Launch of Trappsol® Cyclo™

Rhea-AI Summary

Rafael Holdings has announced a $25 million rights offering for its Class B common stock, priced at $1.28 per share. The offering aims to support the potential launch of Trappsol® Cyclo™, pending positive interim results from the TransportNPC™ Phase 3 clinical trial in Niemann-Pick Disease Type C1.

Key details of the rights offering:

• Record Date: May 9, 2025
• Subscription Period: May 13-29, 2025
• Eligible participants receive one non-transferable subscription right per share
• Each right allows purchase of 0.526 shares of Class B Common Stock

Howard Jonas, Executive Chairman, will enter a Standby Purchase Agreement to acquire any unsubscribed shares. The offering is subject to SEC registration, which was declared effective on April 29, 2025. D.F. King & Co. serves as the Information Agent for inquiries.

Positive

• Secured $25 million potential funding through rights offering
• Executive Chairman Howard Jonas committed to purchase any unsubscribed shares
• Strategic timing aligned with potential Trappsol Cyclo launch pending Phase 3 trial results

Negative

• Dilutive effect on existing shareholders through new share issuance
• Share price set at $1.28, indicating current market weakness
• Rights offering success dependent on interim trial results
• Non-transferable subscription rights limit shareholder flexibility

Insights

Financial Analyst

Rafael's $25M rights offering provides launch capital for potential NPC1 drug, with full subscription guaranteed by Chairman.

Rafael Holdings has announced a $25 million rights offering with a strategic purpose: funding the potential commercial launch of Trappsol® Cyclo™ if their Phase 3 clinical trial for Niemann-Pick Disease Type C1 shows positive interim results. The offering's structure gives existing stockholders and warrant holders the opportunity to maintain their proportional ownership by receiving one subscription right per share held, with each right allowing purchase of 0.526 additional shares at $1.28 per share.

The non-transferability of these rights creates a use-it-or-lose-it scenario for current investors. Importantly, Executive Chairman Howard Jonas has committed to a standby purchase agreement, guaranteeing he'll acquire any unsubscribed shares at the same price. This backstop ensures Rafael will secure the full funding amount regardless of participation rates from other shareholders, though it could potentially increase insider ownership concentration if general participation is low.

This targeted capital raise demonstrates management's forward planning by specifically earmarking funds for a contingent commercial opportunity rather than general working capital. The timing suggests the company is positioning itself financially to move quickly if the 48-week interim analysis yields positive results, though no specific timeline for these results was provided in the release.

Biotech Industry Specialist

Rafael secures pre-launch funding for rare disease drug Trappsol® Cyclo™, contingent on pivotal trial results.

Rafael Holdings' $25 million rights offering represents a strategic pre-commercial financial preparation for Trappsol® Cyclo™ in Niemann-Pick Disease Type C1 (NPC1). This rare genetic lysosomal storage disorder affects approximately 1 in 100,000 births and has extremely limited treatment options, representing a significant unmet medical need with catastrophic consequences for patients.

The company is specifically raising capital for launch preparations contingent on positive results from the 48-week interim analysis of their Phase 3 TransportNPC™ clinical trial. This proactive approach is typical in biotech development, where companies must begin commercial preparations months before potential regulatory approvals to ensure smooth market entry.

For rare diseases like NPC1, commercial preparation is particularly complex and resource-intensive. Companies must establish specialized distribution networks, patient identification programs, and reimbursement pathways while scaling up manufacturing for therapies that often have complex production requirements.

While this financing signals Rafael's commitment to bringing Trappsol® Cyclo™ to market if the data supports it, investors should recognize that the actual value inflection point remains the pending clinical trial results, which will determine whether this preparation capital becomes actionable or not. The rights offering itself doesn't change the fundamental risk/reward proposition of the company's lead program.

NEWARK, N.J., April 29, 2025 (GLOBE NEWSWIRE) -- Rafael Holdings, Inc. (NYSE: RFL; NYSE American: RFL-WT) today announced a rights offering, including key dates and terms. The planned offering is designed to provide existing stockholders and holders of our public warrants (“Holders”) the opportunity to purchase additional shares of Rafael Holdings’ Class B common stock, par value $0.01 per share (“Class B Common Stock”), subject to the terms outlined below for an aggregate offering of $25 million. The funds provide the Company additional capital for the potential launch of Trappsol^® Cyclo™ in the event of a positive interim result from the 48-week interim analysis of the TransportNPC™ Phase 3 clinical trial in Niemann-Pick Disease Type C1 (“NPC1”).

Holders of record as of May 9, 2025 (the “Record Date”) will be eligible to participate in the rights offering. To be considered a Holder of record on the Record Date, prospective Holders must complete open market purchases by May 8, 2025.

Rights Offering Details

Under the proposed rights offering, Rafael Holdings intends to distribute one (1) non-transferable subscription right for each share of Class B Common Stock or Class A common stock or share of Class B Common Stock purchasable on exercise of Public Warrants, in each case, held as of the Record Date. Each subscription right will entitle the Holder to purchase 0.526 of a share of Class B Common Stock at a subscription price of $1.28 per share. Subscription rights may only be exercised in whole numbers, and fractional shares will not be issued. The number of shares that may be purchased by each holder of subscription rights will be rounded down to the nearest whole number.

Howard Jonas, the Company’s Executive Chairman and Chairman of the Board will enter into a Standby Purchase Agreement with the Company pursuant to which he will purchase from the Company, in a private placement, any shares of Class B Common Stock not subscribed for in the proposed rights offering for the same subscription price payable by holders electing to exercise the subscription rights in the proposed rights offering.

The rights offering will be subject to certain conditions, and Rafael Holdings reserves the right to terminate the rights offering at any time prior to its expiration date.

The subscription rights are non-transferable and may only be exercised during the subscription period, from May 13, 2025, through 5:00 PM ET on May 29, 2025, unless extended or terminated earlier by Rafael Holdings.

The expected calendar for the rights offering is as follows:

• May 8, 2025 Ownership Day — Shares and/or Public Warrants must be acquired by this date to be considered a holder of record on May 9, 2025.
• May 9, 2025: Record Date.
• May 13, 2025: Subscription Period Begins.
• May 29, 2025: Subscription Period Ends at 5:00 PM ET (unless extended at Rafael Holdings’ discretion).

Rafael Holdings has engaged D.F. King & Co., Inc. as the Information Agent for the rights offering. For questions or to request copies of the prospectus supplement, please contact D.F. King at (800) 992-3086 or via email atrfl@dfking.com.

Neither Rafael Holdings nor its Board of Directors has made any recommendation regarding whether Holders should exercise their subscription rights. Holders are encouraged to carefully review the subscription materials provided by Rafael Holdings and consult with their legal and financial advisors before making a decision.

SEC Registration

A registration statement relating to the Class B Common Stock has been filed with the SEC on April 18, 2025, and was declared effective on April 29, 2025. The rights offering will be made solely by means of a written prospectus supplement describing the terms of the rights offering and how Holders may exercise their subscription rights in the proposed rights offering and will be available on the SEC’s website at https://www.sec.gov when filed. Copies of the prospectus supplement, when available, will be mailed to Holders as of the Record Date and may be obtained from D.F. King & Co., email: rfl@dfking.com, or telephone: (800) 992-3086.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor will there be any sale of these securities in any state or jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About Rafael Holdings, Inc.

Rafael Holdings, Inc. holds interests in clinical and early-stage pharmaceutical and certain other companies, including our wholly-owned subsidiary, Cyclo Therapeutics, LLC, a clinical stage biotechnology company dedicated to developing Rafael’s lead clinical candidate, Trappsol^® Cyclo™, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 (“NPC1”), a rare, fatal, and progressive genetic disorder.  Rafael also holds majority equity interests in LipoMedix Pharmaceuticals Ltd., a clinical stage pharmaceutical company, Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, Rafael Medical Devices, LLC, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and Day Three Labs, Inc., a company which empowers third-party manufacturers to reimagine their existing cannabis offerings. 

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our expectations surrounding the potential, safety, efficacy, and regulatory and clinical progress of our product candidates; plans regarding the further evaluation of clinical data; and the potential of our pipeline, including our internal cancer metabolism research programs. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended July 31, 2024, and our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.

For further information, please contact:
D.F. King & Co., Inc. (Information Agent)
Toll-Free Number: (800) 992-3086
Email: rfl@dfking.com

Investor Contact:

Rafael Holdings, Inc.
Barbara Ryan
Barbara.ryan@rafaelholdings.com
(203) 274-2825

FAQ

What is the price per share for Rafael Holdings (RFL) rights offering in May 2025?

Rafael Holdings (RFL) is offering rights at $1.28 per share of Class B Common Stock, with each subscription right allowing holders to purchase 0.526 of a share.

When is the deadline to participate in RFL's $25 million rights offering?

The subscription period for RFL's rights offering runs from May 13, 2025, through 5:00 PM ET on May 29, 2025, unless extended or terminated earlier by the company.

How will RFL use the $25 million from the rights offering?

The $25 million will provide additional capital for the potential launch of Trappsol® Cyclo™, pending positive interim results from the 48-week TransportNPC™ Phase 3 clinical trial in Niemann-Pick Disease Type C1.

Who is eligible for Rafael Holdings rights offering in May 2025?

Stockholders and public warrant holders of record as of May 9, 2025 (Record Date) are eligible. To qualify, investors must complete open market purchases by May 8, 2025.

What happens to unsubscribed shares in RFL's rights offering?

Howard Jonas, RFL's Executive Chairman, will purchase any unsubscribed shares through a Standby Purchase Agreement at the same subscription price offered in the rights offering.