Rafael(RFL) - 2026 Q2 - Quarterly Report

Revenue and Financial Performance - Rafael Holdings reported a product revenue of $0.1 million for the three months ended January 31, 2026, and $0.3 million for the six months ended January 31, 2026, compared to $0 for the same periods in 2025, attributed to Cyclo's product revenue post-merger and sales from Rafael Medical Devices [289]. - The Healthcare segment incurred a loss from operations of $6.7 million for the three months ended January 31, 2026, which is an increase of 105% compared to a loss of $3.3 million for the same period in 2025 [288]. - Infusion Technology segment reported a revenue decrease of 100% to $0 for the three months ended January 31, 2026, compared to $51,000 in the same period of 2025 [293]. - Consolidated net loss attributable to Rafael Holdings, Inc. was $6.4 million for the three months ended January 31, 2026, a 38% increase from a net loss of $4.6 million in the same period of 2025 [298]. - Cash used in operating activities was $14.3 million for the six months ended January 31, 2026, significantly impacted by a net loss of $16.1 million [309]. - Total assets decreased by 13% to $99.3 million as of January 31, 2026, compared to $114.1 million as of July 31, 2025 [307]. - Interest income decreased by 30% to $0.7 million for the six months ended January 31, 2026, compared to $1.1 million in the same period of 2025 [299]. Expenses and Costs - Research and development expenses for the Healthcare segment increased to $4.0 million for the three months ended January 31, 2026, primarily due to Cyclo's expenses, compared to a significantly lower amount in the previous year [292]. - General and administrative expenses for the three months ended January 31, 2026, decreased by 7% to $2.2 million, mainly due to reductions in payroll and professional fees, despite the inclusion of Cyclo's expenses [291]. - General and administrative expenses in the Infusion Technology segment decreased by 89% to $29,000 for the six months ended January 31, 2026, compared to $255,000 in the same period of 2025 [293]. Investments and Strategic Initiatives - The company is focusing on completing the development of Trappsol® Cyclo™ and expanding its investment portfolio in therapeutics addressing high unmet medical needs [277]. - LipoMedix, with a 95% ownership interest, is exploring strategic options for its lead candidate, including potential licensing and collaborations [280]. - Rafael Medical Devices raised approximately $925,000 by selling a 31.6% equity interest to third parties in August 2023 [284]. Regulatory and Milestones - The FDA granted substantial equivalence determination for the VECTR System, which is intended for minimally invasive surgeries, marking a significant milestone for Rafael Medical Devices [284]. - The merger with Cyclo was completed on March 25, 2025, making Cyclo a wholly-owned subsidiary of Rafael Holdings [279]. Cash Flow and Financial Position - Cash and cash equivalents decreased by 28% to $37.8 million as of January 31, 2026, down from $52.8 million as of July 31, 2025 [307]. - Cash used in investing activities for the six months ended January 31, 2026 was primarily due to the purchase of investments in Nina Medical for $0.8 million [311]. - Revenue from tenants located in Israel represented 38% of consolidated revenues for the six months ended January 31, 2026, compared to 75% for the same period in 2025 [319]. Accounting and Financial Reporting - The company applies significant accounting policies consistently to report operating results and financial condition in conformity with U.S. GAAP [315]. - The company evaluates critical accounting estimates and assumptions on an ongoing basis, which may involve significant management judgments [316]. - The company does not anticipate paying dividends on common stock until achieving sustainable profitability and retaining certain minimum cash reserves [314]. - The company has no off-balance sheet arrangements that are likely to affect its financial condition or results of operations [317]. - The net amount of exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material [319].