Rafael(RFL) - 2024 Q4 - Annual Report

Financial Performance - Rafael Holdings reported a consolidated loss from operations of $102.0 million for the year ended July 31, 2024, compared to a loss of$ 15.1 million for the previous year, representing a 575% increase in losses [561]. - Loss from operations significantly increased to $(102,627) thousand in 2024 from$ (15,043) thousand in 2023, representing a change of $(87,584) thousand or (582)% [573]. - Interest income decreased to$ 2.4 million in 2024 from $3.3 million in 2023, a decline of approximately 27% [573]. - Total equity attributable to Rafael Holdings, Inc. decreased by 18% to$ 82.2 million in 2024 from $100.3 million in 2023 [580]. - Cash and cash equivalents decreased by 88% to$ 2.7 million as of July 31, 2024, down from $21.5 million in 2023 [580]. Research and Development - Research and development expenses decreased by 42% to$ 3.7 million for the year ended July 31, 2024, down from $6.3 million in the prior year, reflecting the company's decision to curtail early-stage development efforts [561]. - Research and development expenses increased by$ 502 thousand in the year ended July 31, 2024, compared to the previous year, primarily due to the acquisition of Day Three [571]. - In-process research and development (IPR&D) expenses increased by $89.9 million due to the acquisition of Cornerstone, marking a 100% increase compared to the previous year [567]. - IPR&D acquired as part of the Cornerstone Acquisition was expensed immediately as it had no alternative future use [609]. Revenue Streams - Infusion Technology revenue was reported at$ 355,000 for the year ended July 31, 2024, a new revenue stream following the acquisition of Day Three [568]. - Revenue from tenants located in Israel represented 44% of consolidated revenues for the year ended July 31, 2024, down from 53% in 2023, with all revenues in currencies other than the U.S. Dollar [546]. Expenses - General and administrative expenses decreased by 5% to $8.3 million for the year ended July 31, 2024, down from$ 8.8 million in the previous year [561]. - Cash used in operating activities decreased by $2.4 million, from$ 10.2 million in 2023 to $7.8 million in 2024, a 24% improvement [583]. - Cash used in investing activities decreased by 60% to$ (10,820) thousand in 2024 from $(26,960) thousand in 2023 [583]. Investments and Securities - The company recorded a realized gain of$ 1.8 million on available-for-sale securities in 2024, up from $154 thousand in 2023, marking a 1051% increase [573]. - The fair value of marketable securities is recorded based on quoted prices in active markets, with unrealized gains or losses included in accumulated other comprehensive income [600]. - Hedge fund investments are classified as Level 3 assets, with fair value estimated based on information from fund managers, reflecting significant judgment [601]. - The Company recognizes the fair value of Cyclo Warrants using a Black-Scholes model, which incorporates significant assumptions such as expected volatility and risk-free interest rate [598]. Company Structure and Ownership - The company raised$ 925,000 in August 2023 for Rafael Medical Devices, resulting in a 68% ownership interest in the company [559]. - As of July 31, 2024, Rafael Holdings held a 67% interest in Cornerstone following its restructuring, which has been consolidated into the company's financial statements [558]. - The company holds a 95% interest in LipoMedix, which is nearing completion of a Phase 1B clinical trial for its cancer therapy product, Promitil® [555]. - Rafael Holdings plans to focus on Trappsol® Cyclo™ as its lead clinical program following the planned merger with Cyclo Therapeutics, which is currently conducting a Phase III clinical trial [554]. Financial Health and Projections - The company expects its cash and available-for-sale securities to be sufficient to meet obligations for at least the next 12 months [585]. - The Company did not record an impairment charge for goodwill during the year ended July 31, 2024 [605]. - The Company assesses goodwill for impairment annually or more frequently if events indicate potential impairment, considering macroeconomic conditions and industry trends [604]. - Stock-based compensation is recorded based on grant date fair value and is expensed on a straight-line basis over the requisite service period [606].