Rafael(RFL) - 2025 Q2 - Quarterly Report

Financial Performance - As of January 31, 2025, the healthcare segment reported a loss from operations of $3,259,000 for the three months ended January 31, 2025, compared to a loss of $3,148,000 for the same period in 2024, reflecting a 4% increase in losses [378]. - Consolidated loss from operations was $6.6 million for the three months ended January 31, 2025, an increase of 111% compared to a loss of $3.1 million in 2024 [386]. - Net loss attributable to Rafael Holdings, Inc. was $4.6 million for the three months ended January 31, 2025, compared to net income of $6.0 million in 2024, marking a 177% decline [386]. - Cash used in operating activities increased from $4.7 million for the six months ended January 31, 2024, to $5.4 million for the six months ended January 31, 2025, reflecting a shift from net income to net loss [399]. Revenue and Expenses - Research and development expenses for the healthcare segment increased by 40% to $857,000 for the three months ended January 31, 2025, compared to $612,000 for the same period in 2024 [378]. - General and administrative expenses decreased by 4% to $2,402,000 for the three months ended January 31, 2025, compared to $2,514,000 for the same period in 2024 [378][379]. - Infusion Technology segment reported revenue of $51,000 for the six months ended January 31, 2025, a 100% increase compared to no revenue in the same period of 2024 [383]. - Real Estate segment rental revenue from third parties increased by 17% to $48,000 for the three months ended January 31, 2025, compared to $41,000 in 2024 [385]. Cash Flow and Assets - Cash and cash equivalents increased to $48.3 million as of January 31, 2025, a 1,706% increase from $2.7 million in July 2024 [397]. - Total assets decreased by 14% to $83.0 million as of January 31, 2025, down from $96.8 million in July 2024 [397]. - Operating activities generated a cash outflow of $5.4 million for the six months ended January 31, 2025, a 15% increase in outflow compared to $4.7 million in 2024 [398]. - Cash provided by investing activities for the six months ended January 31, 2025, was $80.7 million from sales and maturities of available-for-sale securities, offset by purchases of approximately $16.9 million [400]. Impairments and Losses - The Infusion Technology segment incurred a goodwill impairment charge of $3.1 million during the three months ended January 31, 2025 [384]. - The company recorded a goodwill impairment charge of $3.1 million related to the Infusion Technology segment during the three months ended January 31, 2025 [413]. - The company recognized an unrealized loss of $3.8 million on investment in Cyclo for the six months ended January 31, 2025 [390]. Strategic Focus and Developments - Rafael Holdings plans to focus on Trappsol® Cyclo™ as its lead clinical program following the planned merger with Cyclo Therapeutics, which is expected to close in mid-2025 [365][369]. - The company has entered into a license agreement for one of its technologies that is in the pre-clinical research stage, as part of its strategic focus on core assets [365]. - Day Three, in which Rafael Holdings acquired a controlling interest, is currently evaluating its technology offerings amid reduced operations [376]. - Following the acquisition of Cornerstone in March 2024, Rafael Holdings now holds a 67% interest in Cornerstone, which has become a consolidated subsidiary [373]. Funding and Investments - The company raised $925,000 in August 2023 for Rafael Medical Devices, which is developing the VECTR System for minimally invasive surgeries [374]. - Cash used in financing activities for the six months ended January 31, 2025, included a payment for taxes related to shares withheld for employee taxes of $75 thousand [403]. - The company does not anticipate paying dividends until achieving sustainable profitability and retaining certain minimum cash reserves [404]. Currency and Revenue Sources - Revenue from tenants located in Israel represented 75% of consolidated revenues for the six months ended January 31, 2025, with all revenues in currencies other than the U.S. Dollar [415].