Rafael Holdings Reports Third Quarter Fiscal 2024 Financial Results
Rafael Holdings (NYSE: RFL) has announced its financial results for the third quarter and first nine months of fiscal 2024, ending April 30, 2024. The company reported a net loss from continuing operations of $32.4 million for the quarter, or $1.36 per diluted share, compared to a net loss of $1.4 million in the same period last year. This loss was primarily driven by an $89.9 million in-process R&D expense, partially offset by a $31.3 million recovery of receivables from Cornerstone. For the nine months ending April 30, 2024, the net loss was $29.9 million, or $1.26 per diluted share, compared to $9.6 million in the previous year. The company highlighted positive developments, including the completion of enrollment in Cyclo Therapeutics' Phase 3 study and revenue generation at Day Three Labs. Cash and cash equivalents stood at $72.4 million as of April 30, 2024. General and administrative expenses decreased to $1.9 million for the quarter, down from $2.3 million last year.
- Completion of enrollment in Cyclo Therapeutics' Phase 3 study for Trappsol® Cyclo™.
- Day Three Labs began generating revenue with pharmaceutical-grade cannabis products.
- Recovery of $31.3 million in receivables from Cornerstone.
- Decrease in general and administrative expenses to $1.9 million from $2.3 million for the quarter.
- Cash and cash equivalents of $72.4 million as of April 30, 2024.
- Net loss of $32.4 million for Q3 2024, or $1.36 per diluted share.
- In-process R&D expense of $89.9 million.
- Unrealized loss of $4.4 million on investment in Cyclo Therapeutics for the quarter.
- Increased R&D expenses to $1.5 million from $0.7 million year-over-year for the quarter.
- Net loss of $29.9 million for the first nine months of fiscal 2024, or $1.26 per diluted share.
- Loss of $1.6 million on initial investment in Day Three Labs for the first nine months.
Insights
Rafael Holdings' financial results for the third quarter of fiscal 2024 show a significant net loss of
While the company has a solid cash position of
On the positive side, the report indicated a decrease in general and administrative expenses from
Retail investors should consider the long-term vision Rafael Holdings is aiming for versus the short-term financial strain. Their focus on strategic investments and portfolio growth might pay off, but it's a high-risk strategy.
The company's investment in Cyclo Therapeutics and Day Three Labs is noteworthy. Cyclo Therapeutics' completion of enrollment in its Phase 3 trial for Trappsol® Cyclo™ could lead to substantial future revenue if the treatment proves effective for Niemann-Pick Disease Type C1. This is important as the treatment targets a rare and fatal genetic disorder and successful trials could significantly boost market confidence and stock prices.
Day Three Labs' revenue generation through reimagining cannabis products with pharmaceutical-grade technology is another promising avenue. The cannabis market is growing and innovation in product offerings could help Rafael Holdings capture a substantial market share. However, investors should be aware of regulatory risks and market competition in this sector.
The reduction in general and administrative expenses also highlights an efficient cost management approach. This strategic focus on reducing operational costs can improve profitability margins in the long run, reinforcing investor confidence.
In summary, while the ongoing investments and innovations are promising, they come with inherent risks. Retail investors should consider the potential for long-term gains against short-term volatility.
Strategically focused on generating shareholder value by advancing our portfolio and identifying attractive investment opportunities with substantive upside potential
NEWARK, N.J., June 14, 2024 (GLOBE NEWSWIRE) -- Rafael Holdings, Inc. (NYSE: RFL), today reported its financial results for the third quarter and the first nine months of fiscal 2024 ended April 30, 2024.
“During fiscal 2024, we have continued to develop our existing portfolio while actively evaluating opportunities for strategic investment,” said Bill Conkling, CEO of Rafael Holdings. Bill added, “We are particularly pleased that Cyclo Therapeutics (Nasdaq:CYTH) announced the completion of enrollment in its pivotal Phase 3 study evaluating Trappsol® Cyclo™ for the treatment of Niemann-Pick Disease Type C1, a rare and fatal genetic disease. We are also encouraged by the execution at Day Three Labs, as it began generating revenue by reimagining existing cannabis offerings with pharmaceutical-grade technology to bring to market better, cleaner, more precise, and predictable products.”
Rafael Holdings, Inc. Third Quarter Fiscal Year 2024 Financial Results
As of April 30, 2024, we had cash, cash equivalents and marketable securities of
For the three months ended April 30, 2024, we recorded a net loss from continuing operations attributable to Rafael Holdings of
For the three months ended April 30, 2024, research and development expenses were
For the three months ended April 30, 2024, general and administrative expenses were
Rafael Holdings, Inc. First Nine Months Fiscal Year 2024 Financial Results
For the nine months ended April 30, 2024, we recorded a net loss from continuing operations attributable to Rafael Holdings of
For the nine months ended April 30, 2024, research and development expenses were
For the nine months ended April 30, 2024, general and administrative expenses were
About Rafael Holdings, Inc.
Rafael Holdings is a holding company with interests in clinical and early-stage pharmaceutical companies, including a majority investment in Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, a majority equity interest in LipoMedix Pharmaceuticals Ltd., a clinical stage pharmaceutical company, the Barer Institute Inc., a wholly-owned preclinical cancer metabolism research operation, an investment in Cyclo Therapeutics Inc. (Nasdaq: CYTH), a clinical-stage biotechnology company dedicated to developing life-changing medicines for patients and families living with challenging diseases through its lead therapeutic asset, Trappsol® Cyclo™, a majority investment in Day Three Labs, Inc., a company which reimagines existing cannabis offerings with pharmaceutical-grade technology and innovation like Unlokt™ to bring to market better, cleaner, more precise and predictable products in the cannabis industry, and a majority interest in Rafael Medical Devices, LLC, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. The Company’s primary focus is to expand our investment portfolio through opportunistic and strategic investments including therapeutics which address high unmet medical needs.
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, 2023, and our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
Contact:
Barbara Ryan
Barbara.ryan@rafaelholdings.com
(203) 274-2825
| RAFAEL HOLDINGS, INC. | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except share and per share data) | ||||||||
| April 30, 2024 | July 31, 2023 | |||||||
| ASSETS | (Unaudited) | |||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 7,436 | $ | 21,498 | ||||
| Available-for-sale securities | 64,941 | 57,714 | ||||||
| Interest receivable | 541 | 387 | ||||||
| Convertible note receivable, related party | — | 1,921 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of | 443 | 213 | ||||||
| Prepaid expenses and other current assets | 445 | 914 | ||||||
| Investment in equity securities | — | 294 | ||||||
| Total current assets | 73,806 | 82,941 | ||||||
| Property and equipment, net | 2,156 | 1,695 | ||||||
| Investments – Other Pharmaceuticals | — | 65 | ||||||
| Investments – Hedge Funds | 2,366 | 4,984 | ||||||
| Investment – Day Three | — | 2,797 | ||||||
| Investments – Cyclo Therapeutics Inc. | 15,172 | 4,763 | ||||||
| Convertible note receivable | 1,053 | — | ||||||
| Goodwill | 3,571 | — | ||||||
| Intangible assets, net | 1,851 | — | ||||||
| In-process research and development | 1,575 | 1,575 | ||||||
| Other assets | 73 | 9 | ||||||
| TOTAL ASSETS | $ | 101,623 | $ | 98,829 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 2,571 | $ | 333 | ||||
| Accrued expenses | 1,745 | 763 | ||||||
| Convertible notes | 614 | — | ||||||
| Other current liabilities | 168 | 1,023 | ||||||
| Due to related parties | 743 | 26 | ||||||
| Installment note payable | 1,700 | — | ||||||
| Total current liabilities | 7,541 | 2,145 | ||||||
| Accrued expenses, noncurrent | 2,826 | — | ||||||
| Convertible notes, noncurrent | 71 | — | ||||||
| Deferred income tax liabilities, net | 613 | — | ||||||
| Other liabilities | 13 | 55 | ||||||
| TOTAL LIABILITIES | $ | 11,064 | $ | 2,200 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| EQUITY | ||||||||
| Class A common stock, | 8 | 8 | ||||||
| Class B common stock, | 238 | 236 | ||||||
| Additional paid-in capital | 279,636 | 264,010 | ||||||
| Accumulated deficit | (197,275 | ) | (167,333 | ) | ||||
| Treasury stock, at cost; 101,487 and 0 Class B shares as of April 30, 2024 and July 31, 2023, respectively | (168 | ) | — | |||||
| Accumulated other comprehensive loss related to unrealized loss on available-for-sale securities | (38 | ) | (353 | ) | ||||
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3,699 | 3,725 | ||||||
| Total equity attributable to Rafael Holdings, Inc. | 86,100 | 100,293 | ||||||
| Noncontrolling interests | 4,459 | (3,664 | ) | |||||
| TOTAL EQUITY | 90,559 | 96,629 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 101,623 | $ | 98,829 | ||||
| RAFAEL HOLDINGS, INC. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues | $ | 336 | $ | 71 | $ | 472 | $ | 211 | |||||||
| Cost of infusion technology revenue | 85 | - | 85 | - | |||||||||||
| G&A Expenses | 1,923 | 2,343 | 6,524 | 7,537 | |||||||||||
| R&D Expenses | 1,526 | 740 | 2,627 | 5,046 | |||||||||||
| In-process research and development expense | 89,861 | - | 89,861 | - | |||||||||||
| Depreciation and amortization | 102 | 19 | 157 | 60 | |||||||||||
| Operating Loss | (93,161 | ) | (3,031 | ) | (98,782 | ) | (12,432 | ) | |||||||
| Interest income | 502 | 1,531 | 1,777 | 2,301 | |||||||||||
| Impairment of investments - Other Pharmaceuticals | - | (128 | ) | - | (351 | ) | |||||||||
| Loss on initial investment in Day Three upon acquisition | - | - | (1,633 | ) | - | ||||||||||
| Realized gain on available-for-sale securities | 945 | - | 1,521 | 154 | |||||||||||
| Realized loss on investment in equity securities | - | - | (46 | ) | - | ||||||||||
| Realized gain on investment - Cyclo Therapeutics Inc. | - | - | 424 | - | |||||||||||
| Unrealized (loss) gain on investment - Cyclo Therapeutics Inc. | (4,395 | ) | - | 3,199 | - | ||||||||||
| Unrealized (loss) gain on investment - Hedge Funds | (3 | ) | (131 | ) | (118 | ) | 120 | ||||||||
| Recovery of receivables from Cornerstone Pharmaceuticals | 31,305 | - | 31,305 | - | |||||||||||
| Interest expense | (85 | ) | - | (85 | ) | - | |||||||||
| Other income | - | - | 118 | - | |||||||||||
| Loss before incomes taxes from continuing operations | (64,892 | ) | (1,759 | ) | (62,320 | ) | (10,208 | ) | |||||||
| Benefit from income taxes | 2,599 | 269 | 2,593 | 259 | |||||||||||
| Equity in loss of Day Three | - | - | (422 | ) | - | ||||||||||
| Consolidated net loss from continuing operations | (62,293 | ) | (1,490 | ) | (60,149 | ) | (9,949 | ) | |||||||
| Discontinued Operations | |||||||||||||||
| Loss from discontinued operations related to 520 Property | - | - | - | (241 | ) | ||||||||||
| Gain on disposal of 520 Property | - | - | - | 6,784 | |||||||||||
| Income from discontinued operations | - | - | - | 6,543 | |||||||||||
| Consolidated net loss | (62,293 | ) | (1,490 | ) | (60,149 | ) | (3,406 | ) | |||||||
| Net loss attributable to noncontrolling interests | (29,942 | ) | (53 | ) | (30,207 | ) | (311 | ) | |||||||
| Net loss attributable to Rafael Holdings, Inc. | $ | (32,351 | ) | $ | (1,437 | ) | $ | (29,942 | ) | $ | (3,095 | ) | |||
| Continuing operations loss per share | |||||||||||||||
| Net loss from continuing operations | $ | (62,293 | ) | $ | (1,490 | ) | $ | (60,149 | ) | $ | (9,949 | ) | |||
| Net loss attributable to noncontrolling interests | (29,942 | ) | (53 | ) | (30,207 | ) | (311 | ) | |||||||
| Numerator for loss per share from continuing operations | $ | (32,351 | ) | $ | (1,437 | ) | $ | (29,942 | ) | $ | (9,638 | ) | |||
| Discontinued operations earnings income per share | |||||||||||||||
| Numerator for income from discontinued operations | $ | - | $ | - | $ | - | $ | 6,543 | |||||||
| Earnings (loss) per share - Basic and Diluted | |||||||||||||||
| Continuing operations | $ | (1.36 | ) | $ | (0.06 | ) | $ | (1.26 | ) | $ | (0.42 | ) | |||
| Discontinued operations | - | - | - | 0.28 | |||||||||||
| Total basic loss per common share | $ | (1.36 | ) | $ | (0.06 | ) | $ | (1.26 | ) | $ | (0.14 | ) | |||
| Weighted average number of shares used in calculation of earnings (loss) per share - basic and diluted | 23,777,493 | 23,372,136 | 23,687,781 | 23,179,364 | |||||||||||
FAQ
What were Rafael Holdings' financial results for Q3 2024?
What is the financial status of Rafael Holdings as of April 30, 2024?
What caused the net loss for Rafael Holdings in Q3 2024?
How did the general and administrative expenses change for Rafael Holdings?
What were the research and development expenses for Rafael Holdings in Q3 2024?
What is the impact of Cyclo Therapeutics' Phase 3 study on Rafael Holdings?
What were the financial results for Rafael Holdings for the first nine months of fiscal 2024?
