Rafael Holdings Reports $9.2 Million Net Loss and Revenue Increase to $128,000

Rafael Holdings, Inc. reported a consolidated net loss of $9.2 million for the three months ended October 31, 2024, compared to a net loss of $3.8 million for the same period in 2023. The company's total revenue increased to $128,000, up from $68,000 in the prior year, primarily driven by $51,000 in revenue from its Infusion Technology segment, which was newly established following the acquisition of Day Three Labs, Inc. The increase in losses was attributed to higher general and administrative expenses, research and development costs, and significant unrealized losses on investments, particularly related to its stake in Cyclo Therapeutics.

The company's total assets decreased to $87.8 million as of October 31, 2024, down from $96.8 million at the end of the previous fiscal period. This decline was largely due to a reduction in available-for-sale securities, which fell from $63.3 million to $46.1 million. Rafael Holdings' cash and cash equivalents, however, increased significantly to $8.2 million from $2.7 million, reflecting a net increase of $5.5 million during the quarter. The company also reported a working capital of $63.2 million, slightly down from $65.0 million.

Strategically, Rafael Holdings has been focusing on its investments in clinical-stage pharmaceutical companies. The company entered into a merger agreement with Cyclo Therapeutics on August 21, 2024, which, if completed, will position Trappsol® Cyclo™ as its lead clinical program. The merger is expected to close in the first quarter of 2025, pending necessary approvals. Additionally, Rafael Holdings consolidated its investment in Cornerstone Pharmaceuticals following a restructuring that increased its ownership stake to 67%. This consolidation is anticipated to enhance the company's operational focus and financial performance.

Operationally, Rafael Holdings has seen a significant increase in its research and development expenses, which rose to $1.3 million from $489,000 year-over-year, reflecting the costs associated with ongoing clinical trials and the integration of Cornerstone. The company also reported a loss from operations of $3.8 million, compared to a loss of $2.5 million in the prior year. The increase in operational losses was primarily driven by the costs associated with the newly consolidated entities and the ongoing development efforts in its healthcare segment.

Looking ahead, Rafael Holdings expects its current cash and cash equivalents, along with available-for-sale securities, to be sufficient to meet its obligations for at least the next 12 months. The company is actively evaluating its portfolio to ensure alignment with its strategic focus on high unmet medical needs, particularly in the areas of oncology and rare diseases. The anticipated merger with Cyclo Therapeutics is expected to further solidify Rafael's position in the biotechnology sector, potentially leading to improved financial outcomes in the future.