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, 2024.

☐ 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 9, 2024 was:

Class A common stock, par value $0.01 per share:	787,163 shares
Class B common stock, par value $0.01 per share:	23,886,987 shares

RAFAEL HOLDINGS, INC.

TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION			1
	Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets as of October 31, 2024 and July 31, 2024	1
		Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended October 31, 2024 and 2023	2
		Consolidated Statements of Equity for the Three Months Ended October 31, 2024 and 2023	3
		Consolidated Statements of Cash Flows for the Three Months Ended October 31, 2024 and 2023	5
		Notes to the Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	48
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	54
	Item 4.	Controls and Procedures	54

Part II. OTHER INFORMATION			55
	Item 1.	Legal Proceeding	55
	Item 1A.	Risk Factors	55
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
	Item 3.	Defaults Upon Senior Securities	55
	Item 4.	Mine Safety Disclosures	55
	Item 5.	Other Information	55
	Item 6.	Exhibits	55

SIGNATURES			56

PART I. FINANCIAL INFORMATION

RAFAEL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	October 31, 2024			July 31, 2024
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,159		$	2,675
Available-for-sale securities		46,138			63,265
Interest receivable		438			515
Convertible note receivables, due from Cyclo		12,603			5,191
Accounts receivable, net of allowance for credit losses of $245 at October 31, 2024 and July 31, 2024		201			426
Prepaid expenses and other current assets		2,942			430
Total current assets		70,481			72,502

Property and equipment, net		2,078			2,120
Investments – Cyclo		7,645			12,010
Investments – Hedge Funds		—			2,547
Convertible note receivable classified as available-for-sale		1,161			1,146
Goodwill		3,050			3,050
Intangible assets, net		1,818			1,847
In-process research and development		1,575			1,575
Other assets		27			35
TOTAL ASSETS	$	87,835		$	96,832

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,700		$	2,556
Accrued expenses		1,379			1,798
Convertible notes payable		614			614
Other current liabilities		112			113
Due to related parties		734			733
Installment note payable		1,700			1,700
Total current liabilities		7,239			7,514

Accrued expenses, noncurrent		3,138			2,982
Convertible notes payable, noncurrent		74			73
Other liabilities		—			5
TOTAL LIABILITIES		10,451			10,574

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, 2024 and July 31, 2024		8			8
Class B common stock, $0.01 par value; 200,000,000 shares authorized, 24,135,035 issued and 23,785,043 outstanding (excluding treasury shares of 101,487) as of October 31, 2024, and 24,142,535 issued and 23,819,948 outstanding (excluding treasury shares of 101,487) as of July 31, 2024		238			238
Additional paid-in capital		280,359			280,048
Accumulated deficit		(210,749	)		(201,743	)
Treasury stock, at cost; 101,487 Class B shares as of October 31, 2024 and July 31, 2024		(168	)		(168	)
Accumulated other comprehensive income related to unrealized income on available-for-sale securities		132			111
Accumulated other comprehensive income related to foreign currency translation adjustment		3,696			3,691
Total equity attributable to Rafael Holdings, Inc.		73,516			82,185
Noncontrolling interests		3,868			4,073
TOTAL EQUITY		77,384			86,258
TOTAL LIABILITIES AND EQUITY	$	87,835		$	96,832

See accompanying notes to the unaudited consolidated interim financial statements.

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

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

	Three Months Ended October 31,
	2024			2023
REVENUE
Infusion Technology	$	51		$	—
Rental – Third Party		50			41
Rental – Related Party		27			27
Total revenue		128			68

COSTS AND EXPENSES
Cost of Infusion Technology revenue		37			—
General and administrative		2,523			2,040
Research and development		1,326			489
Depreciation and amortization		86			17
Loss from operations		(3,844	)		(2,478	)

Interest income		568			582
Realized gain on available-for-sale securities		194			177
Realized loss on investment in equity securities		—			(46	)
Realized gain on investment - Cyclo		—			424
Unrealized loss on investment - Cyclo		(4,365	)		(2,124	)
Unrealized loss on convertible notes receivable, due from Cyclo		(1,588	)		—
Unrealized loss on investment - Hedge Funds		—			(166	)
Interest expense		(162	)		—
Other income		(2	)		93
Loss before income taxes		(9,199	)		(3,538	)
Provision for income taxes		(12	)		(6	)
Equity in loss of Day Three		—			(216	)

Consolidated net loss		(9,211	)		(3,760	)
Net loss attributable to noncontrolling interests		(205	)		(122	)
Net loss attributable to Rafael Holdings, Inc.	$	(9,006	)	$	(3,638	)

OTHER COMPREHENSIVE LOSS
Consolidated net loss	$	(9,211	)	$	(3,760	)
Unrealized gain on available-for-sale securities		21			207
Foreign currency translation adjustment		5			(76	)
Comprehensive loss		(9,185	)		(3,629	)
Comprehensive loss attributable to noncontrolling interests		(205	)		(119	)
Comprehensive loss attributable to Rafael Holdings, Inc.	$	(8,980	)	$	(3,510	)

Loss per share attributable to common stockholders
Basic and diluted	$	(0.37	)	$	(0.15	)

Weighted average number of shares used in calculation of loss per share
Basic and diluted		24,062,854			23,644,647

See accompanying notes to the unaudited consolidated interim financial statements.

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except share data)

	Three Months Ended October 31, 2024
	Common Stock,				Common Stock,					Additional						Accumulated other					Treasury Stock
	Series A				Series B					paid-in			Accumulated			comprehensive		Noncontrolling			Class B					Total
	Shares		Amount		Shares			Amount		capital			deficit			income		interests			Shares		Amount			Equity
Balance at July 31, 2024		787,163	$	8		23,819,948		$	238	$	280,048		$	(201,743	)	$	3,802	$	4,073			101,487	$	(168	)	$	86,258
Net loss		—		—		—			—		—			(9,006	)		—		(205	)		—		—			(9,211	)
Stock-based compensation		—		—		—			—		359			—			—		—			—		—			359
Forfeiture of restricted stock		—		—		(7,500	)		—		—			—			—		—					—			—
Shares withheld for payroll taxes		—		—		(27,405	)		—		(48	)		—			—		—			—		—			(48	)
Unrealized gain on available-for-sale securities		—		—		—			—		—			—			21		—			—		—			21
Foreign currency translation adjustment		—		—		—			—		—			—			5		—			—		—			5
Balance at October 31, 2024		787,163	$	8		23,785,043		$	238	$	280,359		$	(210,749	)	$	3,828	$	3,868			101,487	$	(168	)	$	77,384

See accompanying notes to the unaudited consolidated interim financial statements.

RAFAEL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except share data)

Three Months Ended October 31, 2023

Common Stock,

Additional

SEC Form 10-Q filed by Rafael Holdings Inc.