Rafael (RFL) 10-Q 12 Mar 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jan. 31, 2018	Mar. 12, 2018
Entity Registrant Name	Rafael Holdings, Inc.
Entity Central Index Key	1,713,863
Amendment Flag	false
Current Fiscal Year End Date	--07-31
Document Type	10-Q
Document Period End Date	Jan. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		100

Combined Balance Sheets

Combined Balance Sheets - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
Current assets:
Cash and cash equivalents	$ 12,008	$ 11,756
Trade accounts receivable, net of allowance for doubtful accounts of $82 at January 31, 2018 and July 31, 2017	226	264
Prepaid expenses and other current assets	191	147
Total current assets	12,425	12,167
Property and equipment, net	50,967	51,160
Investments	11,700	13,478
Deferred income tax assets, net	22	8,859
Patents	155
In Process Research and Development	1,588
Other assets	787	540
Total assets	77,644	86,204
Current liabilities:
Trade accounts payable	89	115
Accrued expenses	423	213
Other current liabilities	20	35
Total current liabilities	532	363
Due to IDT Corporation	24,391	23,693
Other liabilities	95	70
Total liabilities	25,018	24,126
Commitments and contingencies
Rafael Holdings, Inc. members' equity:
Group equity	40,554	50,427
Accumulated other comprehensive income	2,394	2,316
Total Rafael Holdings, Inc. members' equity	42,948	52,743
Noncontrolling interests	9,678	9,335
Total equity	52,626	62,078
Total liabilities and equity	$ 77,644	$ 86,204

Combined Balance Sheets (Parent

Combined Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 82	$ 82

Combined Statements of Comprehe

Combined Statements of Comprehensive Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Revenues:
Rental - Third Party	$ 298	$ 396	$ 685	$ 585
Rental - Related Party	489	770	994	1,682
Parking	169	171	384	469
Total revenues	956	1,337	2,063	2,736
Costs and expenses:
Selling, general and administrative	1,343	776	3,079	1,629
Depreciation and amortization	429	434	853	822
(Loss) income from operations	(816)	127	(1,869)	285
Interest income	(2)	(2)	(4)	(7)
Net gains resulting from foreign exchange transactions	(107)	(51)	(118)	(32)
Net loss on equity investments			439
Gain on disposal of bonus shares			(246)
(Loss) income before income taxes	(707)	180	(1,608)	324
(Benefit from) provision for income taxes	15	14	8,443	30
Net (loss) income	(722)	166	(10,051)	294
Net loss attributable to noncontrolling interests	176		176
Net (loss) income attributable to Rafael Holdings, Inc.	$ (546)	$ 166	$ (9,875)	$ 294

Combined Statements of Compreh5

Combined Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (722)	$ 166	$ (10,051)	$ 294
Other comprehensive income:
Foreign currency translation adjustments	68	8	78	8
Comprehensive income	(654)	174	(9,973)	302
Comprehensive loss attributable to noncontrolling interests	19		19
Comprehensive (loss) income attributable to Rafael Holdings, Inc.	$ (673)	$ 174	$ (9,992)	$ 302

Combined Statements of Cash Flo

Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Operating activities
Net (loss) income	$ (10,051)	$ 294
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	853	822
Deferred income taxes	8,837	7
Realized gain on disposal of bonus shares	(246)
Non-cash compensation	606
Net loss on equity investments	439
Change in assets and liabilities:
Accounts and rents receivable	38	(79)
Other current assets and prepaid expenses	(60)	(252)
Other assets	(260)	7
Accounts payable and accrued expenses	77	29
Other current liabilities	(15)
Due to IDT Corporation	(202)	(1,211)
Other liabilities	25	15
Net cash provided by (used in) operating activities	41	(368)
Investing activities
Purchases of property and equipment	(728)	(1,146)
Purchase of investments		(8,300)
Net cash used in investing activities	(728)	(9,446)
Financing activities
Proceeds from sale of member interests in CS Pharma Holdings, LLC		10,000
Cash advances from IDT Corporation, net of repayments	900	9,326
Net cash used in financing activities	900	19,326
Effect of exchange rate changes on cash and cash equivalents	39	10
Net increase in cash and cash equivalents	252	9,522
Cash and cash equivalents at beginning of period	11,756	2,339
Cash and cash equivalents at end of period	12,008	11,861
Supplemental Schedule of Non-Cash Financing and Investing Activities
Cash payments made for taxes
Cash payments made for interest

Description of Business and Bas

Description of Business and Basis of Presentation	6 Months Ended
	Jan. 31, 2018
Description of Business and Basis of Presentation [Abstract]
Description of Business and Basis of Presentation	Note 1 — Description of Business and Basis of Presentation Description of Business Rafael Holdings, Inc. (“Rafael Holdings”), a Delaware corporation, is a wholly-owned subsidiary of IDT Corporation (“IDT” or the “Parent”). On or about March 26, 2018, IDT expects to complete a tax-free spinoff (the “Spin-Off”) of our capital stock, through a pro rata distribution of our common stock to its stockholders of record as of the close of business on March 13, 2018 (the “Spin-Off record date”). As a result of the Spin-Off, each of IDT’s stockholders will receive: (i) one share of our Class A common stock for every two shares of IDT’s Class A common stock held on the Spin-Off record date; (ii) one share of our Class B common stock for every two shares of IDT’s Class B common stock held on the Spin-Off record date; and (iv) cash in lieu of a fractional share of all classes of our common stock. The “Company” in these financial statements refers to Rafael Holdings on this combined basis as if Rafael Holdings existed and owned the above interests in these entities in all periods presented. All significant intercompany accounts and transactions have been eliminated in combination. Properties The Company owns commercial real estate located at 520 Broad Street, Newark, New Jersey, which serves as headquarters for IDT, Genie Energy Ltd. and the Company, and a related 800-car public parking garage across the street, as well as a building located at 225 Old New Brunswick Road in Piscataway, New Jersey that is used partially by IDT Telecom, Inc. for certain of its operations. Additionally, the Company owns a portion of the 6 th Basis of Presentation The accompanying unaudited combined financial statements the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended January 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2018. The balance sheet at July 31, 2017 has been derived from the Company’s audited financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the combined financial statements and footnotes thereto included elsewhere in the Registration Statement on Form 10-12G filed on February 19, 2018. The Company’s fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal year 2017 refers to the fiscal year ending July 31, 2017).

Acquisition of Lipomedix Pharma

Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix")	6 Months Ended
	Jan. 31, 2018
Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") [Abstract]
Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix")	Note 2 — Acquisition of Lipomedix Pharmaceuticals Ltd. (“Lipomedix”) Lipomedix is a development-stage, privately held Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery. As a result of its initial $100,000 investment, the Company received approximately 3.2% of the common shares outstanding. During the second quarter of fiscal year 2017, the Company made an additional $300,000 investment in Lipomedix, increasing its ownership to 13.95% of the issued and outstanding ordinary shares, as well as providing Lipomedix with an advance of $200,000. During the fourth quarter of fiscal year 2017, the Company made an additional $1.1 million investment, inclusive of the $200,000 advance, in Lipomedix, increasing its ownership to 38.86% of the issued share capital of the issued and outstanding ordinary shares. As such, the Company began accounting for this investment under the equity method as of and for the fourth quarter of fiscal year 2017. During the fourth quarter of fiscal year 2017, the Company recognized approximately $113,000 as its proportionate share of Lipomedix's loss. As of July 31, 2017, Lipomedix had assets totaling $1.2 million and liabilities totaling $77,000. On November 16, 2017, the Company exercised its option to purchase additional shares in Lipomedix for $900,000, which increased its ownership to 50.6% of the issued and outstanding ordinary shares. As such, the Company began consolidating this investment as of and for the second quarter of fiscal year 2018. The impact of the acquisition’s purchase price allocations on the Company’s combined balance sheet and the acquisition date fair value of the total consideration transferred were as follows: (in thousands) November 16, 2017 Other current assets $ 16 Property and equipment, net 8 In Process Research and Development 1,575 Patents 155 Accounts payable (85 ) Accrued expenses (22 ) Net assets, excluding cash acquired and noncontrolling interest $ 1,647 Supplemental information: $ 2,400 Cash acquired 1,060 Cash paid, net of cash acquired 1,340 Historical loss on investment (252 ) Noncontrolling interest 559 Total consideration, net of cash acquired and noncontrolling interest $ 1,647

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jan. 31, 2018
Fair Value Measurements [Abstract]
Fair Value Measurements	Note 3 — Fair Value Measurements The following table presents the balance of assets measured at fair value on a recurring basis: (in thousands) Level 1 Level 2 Level 3 Total January 31, 2018 Available-for-sale securities: Rafael Pharmaceuticals convertible promissory notes $ — $ — $ 6,300 $ 6,300 Total $ — $ — $ 6,300 $ 6,300 July 31, 2017 Available-for-sale securities: Rafael Pharmaceuticals convertible promissory notes $ — $ — $ 6,300 $ 6,300 Total $ — $ — $ 6,300 $ 6,300 At January 31, 2018 and July 31, 2017, the Company did not have any liabilities measured at fair value on a recurring basis. At January 31, 2018 and July 31, 2017, the fair value of the Rafael convertible promissory notes, which were classified as Level 3, was estimated based on a valuation of Rafael Pharmaceuticals by reference to recent transactions in its securities, the September 2016 Series D Convertible Note investment, as well as utilizing a discounted cash flow technique under the Income Approach and other factors that could not be corroborated by the market. The following tables summarize the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3). There were no liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) in the six months ended January 31, 2018 or the year ended July 31, 2017. Six Months Ended, (in thousands) 2018 2017 Balance, beginning of period $ 6,300 $ 2,000 Total gains included in other comprehensive income — 2,200 Purchases — — Balance, end of period $ 6,300 $ 4,200 Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period $ — $ — The Company’s financial instruments include accounts and rents receivable, accounts payable, and due to IDT Corporation. The recorded carrying amount of accounts and rents receivable, accounts payable and due to IDT Corporation approximates their fair value due to their short-term nature. Other than noted above, the Company did not have any other assets or liabilities that were measured at fair value on a recurring basis as of January 31, 2018 or July 31, 2017.

Establishment of Valuation Allo

Establishment of Valuation Allowance for Deferred Tax Asset	6 Months Ended
	Jan. 31, 2018
Establishment of Valuation Allowance for Deferred Tax Asset [Abstract]
Establishment of Valuation Allowance for Deferred Tax Asset	Note 4 — Establishment of Valuation Allowance for Deferred Tax Asset Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the amendments to related party leases effective August 1, 2017, which, in comparison to fiscal year 2017, will reduce revenues by approximately $1.7 million annually through 2025. Such objective evidence limits the ability to consider other subjective evidence, such as the Company’s projections for future growth. On the basis of this evaluation, a valuation allowance of $8.4 million was recorded to reserve for the entirety of the Company’s domestic deferred tax asset during the first quarter of fiscal 2018. The amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income during the carryforward period are increased, or if additional weight is given to subjective evidence, such as the Company’s projections for growth.

Investment in Rafael Pharmaceut

Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals")	6 Months Ended
	Jan. 31, 2018
Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals") [Abstract]
Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals")	Note 5 — Investment in Rafael Pharmaceuticals, Inc. (“Rafael Pharmaceuticals”) Rafael Pharmaceuticals is a clinical stage, oncology-focused pharmaceutical company committed to the development and commercialization of therapies that exploit the metabolic differences between normal cells and cancer cells. On December 7, 2015, IDT approved an investment of up to $10 million in Rafael Pharmaceuticals. $2 million of this investment was funded as of July 31, 2016, as follows: $500,000 funded upon signing the Subscription and Loan Agreement during the second quarter of fiscal year 2016; and $1.5 million funded during the third quarter of fiscal year 2016. The initial $2 million investment was in exchange for Rafael Pharmaceuticals' 3.5% convertible promissory notes due in fiscal year 2018. To date, the Company has not accrued interest on this note, as collection cannot be reasonably assured; however, the Company has received an independent appraisal indicating the fair value of its investment in Rafael Pharmaceuticals exceeds the carrying value. On September 16, 2016, the Company made an additional $8 million investment in exchange for Rafael Pharmaceuticals' 3.5% convertible promissory notes due in fiscal year 2018. Upon Spin-Off, the Company will own, subsequent to January 31, 2018, its interests/rights in Rafael Pharmaceuticals through a 90%-owned non-operating subsidiary, IDT-Rafael Holdings, LLC. (“IDT-Rafael Holdings”). IDT-Rafael Holdings holds warrants to purchase a significant stake in Rafael Pharmaceuticals, as well as other equity and governance rights in Rafael Pharmaceuticals, and owns 50% of CS Pharma Holdings, LLC (“CS Pharma”), a non-operating entity which holds the convertible debt and other rights to purchase equity interests in Rafael Pharmaceuticals. Those interests/rights include: 1. $10,000,000 of Series D Convertible Notes of Rafael Pharmaceuticals held by CS Pharma. 2. A warrant to purchase 56% of the capital stock of Rafael Pharmaceuticals — the right to exercise the first $10,000,000 worth of the warrant is held by CS Pharma; and the remainder is held directly by IDT-Rafael Holdings. 3. Certain governance rights, including appointment of directors. On March 2, 2017, Howard Jonas, IDT’s Chairman of the Board, and Chairman of the Board of Rafael Pharmaceuticals, purchased 10% of IDT-Rafael Holdings for a purchase price of $1 million, which represented 10% of the Company’s cost basis in IDT-Rafael Holdings. Accordingly, we will hold an effective 45% indirect interest in the assets held by CS Pharma, including its cash. Separately, Howard Jonas and Deborah Jonas jointly own $525,000 of Series C Convertible Notes of Rafael Pharmaceuticals, and The Howard S. and Deborah Jonas Foundation owns $525,000 of Series C Notes of Rafael Pharmaceuticals. Additionally, the Company previously owned the contractual right to receive "Bonus Shares" for an additional 10% of the outstanding capital stock of Rafael Pharmaceuticals that are issued only upon achieving certain milestones. If the milestones are met, Bonus Shares are to be issued without any additional payment. On September 12, 2017, IDT’s Compensation Committee, Corporate Governance Committee and Board of Directors approved a compensatory arrangement with Howard S. Jonas related to this right to receive additional Rafael Pharmaceutical shares. In connection with this arrangement, IDT-Rafael Holdings distributed this right to its members such that the Company received the right to 9% of the outstanding capital stock of Rafael Pharmaceuticals and Mr. Jonas received the right to 1% of the outstanding capital stock of Rafael Pharmaceuticals. In addition, as compensation for assuming the role of Chairman of the Board of the Company, and to create additional incentive to contribute to its success, on September 19, 2017, the Company assigned its right to receive 9% of the outstanding capital stock of Rafael Pharmaceuticals to Mr. Jonas. The right is further transferable by Mr. Jonas, in his discretion. The Rafael Pharmaceuticals Series D Note earns interest at 3.5% per annum, with principal and accrued interest due and payable on September 16, 2018. The Series D Note is convertible at the holder’s option into shares of Rafael Pharmaceuticals’ Series D Preferred Stock. The Series D Note also includes a mandatory conversion into Rafael Pharmaceuticals common stock upon a qualified initial public offering, and conversion at the holder’s option upon an unqualified financing event. In all cases, the Series D Note conversion price is based on the applicable financing purchase price. IDT-Rafael Holdings and CS Pharma were issued warrants to purchase shares of capital stock of Rafael Pharmaceuticals representing up to 56% of the then issued and outstanding capital stock of Rafael Pharmaceuticals, on an as-converted and fully diluted basis. The right to exercise warrants as to the first $10 million thereof is held by CS Pharma and the remainder is owned by IDT-Rafael Holdings. The warrant expires on December 31, 2020. Currently, if the Company desires to raise additional financing from unaffiliated parties in connection with its exercise of its warrant or other current rights to invest in Rafael Pharmaceuticals (but not including the Rafael Pharmaceuticals rights held by CS Pharma), it first must give the other CS Pharma holders the opportunity to provide such financing on a pro rata basis. The exercise price of the warrant is the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments. The minimum initial and subsequent exercises of the warrant shall be for such number of shares that will result in at least $5 million of gross proceeds to Rafael Pharmaceuticals, or such lesser amount as represents 5% of the outstanding capital stock of Rafael Pharmaceuticals, or such lesser amount as may then remain unexercised. The warrant will expire upon the earlier of December 31, 2020 or a qualified initial public offering or liquidation event of Rafael Pharmaceuticals. As of January 31, 2018, and based on current shares issued and outstanding of Rafael Pharmaceuticals, the Company would need to pay approximately $71 million to exercise the warrant in full and approximately $56 million to purchase a 51% controlling stake. On an as-converted and fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company would need approximately $122 million to exercise the warrant in full and approximately $98 million to purchase a 51% controlling stake in Rafael Pharmaceuticals. Given the Company’s anticipated available cash upon the Spin-Off, the Company would not be able to exercise the warrant in its entirety and the Company may never be able to exercise the warrant in full. The Company serves as the managing member of IDT-Rafael Holdings and IDT-Rafael Holdings serves as the managing member of CS Pharma, with broad authority to make all key decisions regarding their respective holdings. Any distributions that are made to CS Pharma from Rafael Pharmaceuticals that are in turn distributed by CS Pharma, will need to be made pro rata to all members, which would entitle IDT-Rafael Holdings to 50% (based on current ownership) of such distributions. Similarly, if IDT-Rafael Holdings were to distribute proceeds it receives from CS Pharma, it would do so on a pro rata basis, entitled the Company to 90% (based on current ownership) of such distributions. The Company’s investment in Rafael Pharmaceuticals, which was included in “Investments” in the accompanying combined balance sheets, consists of the following: (in thousands) (Unaudited) July 31, Convertible promissory note (at fair value) $ 6,300 $ 6,300 Warrants (at cost) 5,400 5,400 Right to receive additional shares (at cost) — 400 Total investment in Rafael Pharmaceuticals $ 11,700 $ 12,100 Rafael Pharmaceuticals is a variable interest entity; however, the Company has determined that it is not the primary beneficiary as is does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jan. 31, 2018
Related Party Transactions [Abstract]
Related Party Transactions	Note 6 — Related Party Transactions The Company continues to maintain an intercompany balance Due to IDT that relates to loan repayments, charges for services provided to the Company by IDT and payroll costs for the Company's personnel that are paid by IDT, partially offset by rental income paid by various companies under common control to IDT to the Company. Historically, this also related to cash advances for investments. IDT advanced $9.4 million to the Company during fiscal year 2017 to invest in Rafael Pharmaceuticals and Lipomedix. IDT charges the Company for certain transactions and allocates routine expenses for, among other things: (1) the allocation between the Company and IDT of employee benefits, taxes and other liabilities and obligations; (2) services to be provided by IDT relating to human resources and employee benefits administration; (3) the allocation of responsibilities relating to employee compensation and benefit plans and programs and other related matters; and (4) finance, accounting, tax and legal services to be provided by IDT to the Company. In the six months ended January 31, 2018 and January 31, 2017, IDT allocated to the Company an aggregate of approximately $436,000 and $471,000, respectively, for payroll, benefits, insurance and other expenses, which were included in “Selling, general and administrative expense” in the combined statements of comprehensive income (loss). In all periods presented, the Company was included in IDT's combined federal income tax return. The change in the Company’s liability to IDT was as follows: Six Months Ended (in thousands) 2018 (unaudited) 2017 (unaudited) Balance at beginning of period $ 23,693 $ 15,145 Payments by IDT on behalf of the Company 436 471 Rental revenue earned from IDT (994 ) (1,682 ) Cash repayments, net of advances 1,256 9,326 Balance at end of period $ 24,391 $ 23,260 The Company amended all of its related party leases as of August 1, 2017. The related party leases expire in April 2025 and are for 88,631 square feet and include two parking spots per thousand square feet of space leased at 520 Broad Street and for 12,400 square feet in Israel. The annual rent will be approximately $2.0 million. The related parties have the right to terminate theses leases upon four months’ notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. Related parties will have the right to lease an additional 25,000 square feet in the building located at 520 Broad Street on the same terms as the base lease, and other rights to a further 25,000 square feet should all available space be leased to other tenants. Upon expiration of the lease, these related parties have the right to renew the leases for another 5 years.

Business Segment Information

Business Segment Information	6 Months Ended
	Jan. 31, 2018
Business Segment Information [Abstract]
Business Segment Information	Note 7 — Business Segment Information The Company conducts business as two operating segments, Pharmaceuticals and Real Estate. The Company’s reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company’s chief operating decision maker. Beginning in the second quarter of fiscal 2018, the Pharmaceuticals segment is comprised of debt interests and warrants in Rafael Pharmaceuticals and a majority equity interest in Lipomedix Pharmaceuticals. Comparative results have been reclassified and restated as if the Pharmaceuticals segment existed for all periods presented. To date, the Pharmaceuticals segment has not generated any revenues. The Real Estate segment includes the Company’s real estate holdings, including the building at 520 Broad Street in Newark, New Jersey that houses IDT’s headquarters and its associated public garage, an office/data center building in Piscataway, New Jersey and a portion of a building in Israel that hosts offices for IDT and certain affiliates. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its Real Estate segment based primarily on income (loss) from operations and its Pharmaceuticals segment based primarily on research and development efforts and results of clinical trials. All investments in Rafael Pharmaceuticals and assets, expenses and expenses associated with Lipomedix are tracked separately in the Pharmaceuticals segment. All corporate costs are allocated to the Real Estate segment. Operating results for the business segments of the Company are as follows: (in thousands) Pharmaceuticals Real Estate Total Three Months Ended January 31, 2018 Revenues $ — $ 956 $ 956 (Loss) income from operations (357 ) (459 ) (816 ) Three Months Ended January 31, 2017 Revenues $ — $ 1,337 $ 1,337 Income (loss) from operations — 127 127 Six Months Ended January 31, 2018 Revenues $ — $ 2,063 $ 2,063 (Loss) income from operations (357 ) (1,512 ) (1,869 ) Six Months Ended January 31, 2017 Revenues $ — $ 2,736 $ 2,736 Income (loss) from operations — 285 285 Geographic Information Revenues from customers located outside of the United States were generated entirely from related parties located in Israel. Revenues from these non-United States customers as a percentage of total revenues were as follows (revenues by country are determined based on the location of the related facility): Six months ended January 31, 2018 (unaudited) January 31, 2017 (unaudited) Revenue from customers located in Israel 2 % 5 % Net long-lived assets and total assets held by the Company were located as follows: (in thousands) United States Foreign Total January 31, 2018 (unaudited) Long-lived Assets, net $ 61,449 $ 3,728 $ 65,177 Total Assets 73,034 4,610 77,644 July 31, 2017 Long-lived Assets, net $ 71,674 $ 2,363 $ 74,037 Total Assets 83,675 2,529 86,204

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jan. 31, 2018
Commitments and Contingencies [Abstract]
Commitments and Contingencies	Note 8 — Commitments and Contingencies Legal Proceedings The Company may from time to time be subject to legal proceedings that may arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company’s results of operations, cash flows or financial condition.

Acquisition of Lipomedix Phar15

Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") (Tables)	6 Months Ended
	Jan. 31, 2018
Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") [Abstract]
Schedule of acquisition date fair value of total consideration transferred	(in thousands) November 16, 2017 Other current assets $ 16 Property and equipment, net 8 In Process Research and Development 1,575 Patents 155 Accounts payable (85 ) Accrued expenses (22 ) Net assets, excluding cash acquired and noncontrolling interest $ 1,647 Supplemental information: $ 2,400 Cash acquired 1,060 Cash paid, net of cash acquired 1,340 Historical loss on investment (252 ) Noncontrolling interest 559 Total consideration, net of cash acquired and noncontrolling interest $ 1,647

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jan. 31, 2018
Fair Value Measurements [Abstract]
Summary of balance of assets measured at fair value on a recurring basis	(in thousands) Level 1 Level 2 Level 3 Total January 31, 2018 Available-for-sale securities: Rafael Pharmaceuticals convertible promissory notes $ — $ — $ 6,300 $ 6,300 Total $ — $ — $ 6,300 $ 6,300 July 31, 2017 Available-for-sale securities: Rafael Pharmaceuticals convertible promissory notes $ — $ — $ 6,300 $ 6,300 Total $ — $ — $ 6,300 $ 6,300
Summary of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3)	Six Months Ended, (in thousands) 2018 2017 Balance, beginning of period $ 6,300 $ 2,000 Total gains included in other comprehensive income — 2,200 Purchases — — Balance, end of period $ 6,300 $ 4,200 Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period $ — $ —

Investment in Rafael Pharmace17

Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals") (Tables)	6 Months Ended
	Jan. 31, 2018
Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals") [Abstract]
Schedule of consolidated balance sheets	(in thousands) (Unaudited) July 31, Convertible promissory note (at fair value) $ 6,300 $ 6,300 Warrants (at cost) 5,400 5,400 Right to receive additional shares (at cost) — 400 Total investment in Rafael Pharmaceuticals $ 11,700 $ 12,100

Related Party Transactions (Tab

Related Party Transactions (Tables)	6 Months Ended
	Jan. 31, 2018
Related Party Transactions [Abstract]
Schedule of change in Company's liability to IDT	Six Months Ended (in thousands) 2018 (unaudited) 2017 (unaudited) Balance at beginning of period $ 23,693 $ 15,145 Payments by IDT on behalf of the Company 436 471 Rental revenue earned from IDT (994 ) (1,682 ) Cash repayments, net of advances 1,256 9,326 Balance at end of period $ 24,391 $ 23,260

Business Segment Information (T

Business Segment Information (Tables)	6 Months Ended
	Jan. 31, 2018
Business Segment Information [Abstract]
Schedule of operating results for the business segments	(in thousands) Pharmaceuticals Real Estate Total Three Months Ended January 31, 2018 Revenues $ — $ 956 $ 956 (Loss) income from operations (357 ) (459 ) (816 ) Three Months Ended January 31, 2017 Revenues $ — $ 1,337 $ 1,337 Income (loss) from operations — 127 127 Six Months Ended January 31, 2018 Revenues $ — $ 2,063 $ 2,063 (Loss) income from operations (357 ) (1,512 ) (1,869 ) Six Months Ended January 31, 2017 Revenues $ — $ 2,736 $ 2,736 Income (loss) from operations — 285 285
Schedule of revenue from external customers by geographic areas	Six months ended January 31, 2018 (unaudited) January 31, 2017 (unaudited) Revenue from customers located in Israel 2 % 5 %
Schedule of net long-lived assets and total assets by geographic areas	(in thousands) United States Foreign Total January 31, 2018 (unaudited) Long-lived Assets, net $ 61,449 $ 3,728 $ 65,177 Total Assets 73,034 4,610 77,644 July 31, 2017 Long-lived Assets, net $ 71,674 $ 2,363 $ 74,037 Total Assets 83,675 2,529 86,204

Acquisition of Lipomedix Phar20

Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") (Details) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Nov. 16, 2017	Jan. 31, 2018
Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") [Abstract]
Other current assets	$ 16
Property and equipment, net	8
In Process Research and Development	1,575
Patents	155
Accounts payable	(85)
Accrued expenses	(22)
Net assets, excluding cash acquired and noncontrolling interest	1,647
Supplemental information:
Cash paid	2,400
Cash acquired	1,060
Cash paid, net of cash acquired	1,340
Historical loss on investment	(252)	$ (439)
Noncontrolling interest	559
Total consideration, net of cash acquired and noncontrolling interest	$ 1,647

Acquisition of Lipomedix Phar21

Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Nov. 16, 2017	Jul. 31, 2017	Jan. 31, 2017	Jan. 31, 2018
Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") (Textual)
Initial investment		$ 12,100,000		$ 11,700,000
Lipomedix [Member]
Acquisition of Lipomedix Pharmaceuticals Ltd. ("Lipomedix") (Textual)
Additional amount of investment funded	$ 900,000		$ 200,000
Ownership percentage in subsidiary and holds percentage of interest	50.60%	38.86%
Recognizes loss amount		$ 113,000
Advance amount of additional investment		1,100,000
Total assets value		1,200,000
Total liabilities value		$ 77,000
Cost method investments ownership percentage			13.95%	3.20%

Fair Value Measurements (Detail

Fair Value Measurements (Details) - Fair Value Measurements, Recurring basis [Member] - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
Available-for-sale securities:
Rafael Pharmaceuticals convertible promissory notes	$ 6,300	$ 6,300
Total	6,300	6,300
Level 1 [Member]
Available-for-sale securities:
Rafael Pharmaceuticals convertible promissory notes
Total
Level 2 [Member]
Available-for-sale securities:
Rafael Pharmaceuticals convertible promissory notes
Total
Level 3 [Member]
Available-for-sale securities:
Rafael Pharmaceuticals convertible promissory notes	6,300	6,300
Total	$ 6,300	$ 6,300

Fair Value Measurements (Deta23

Fair Value Measurements (Details 1) - USD ($) $ in Thousands	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Fair Value Measurements [Abstract]
Balance, beginning of period	$ 6,300	$ 2,000
Total gains included in other comprehensive income		2,200
Purchases
Balance, end of period	6,300	4,200
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the period

Establishment of Valuation Al24

Establishment of Valuation Allowance for Deferred Tax Asset (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2018
Establishment of Valuation Allowance for Deferred Tax Asset (Textual)
Deferred revenue, description		A significant piece of objective negative evidence evaluated was the amendments to related party leases effective August 1, 2017, which, in comparison to fiscal year 2017, will reduce revenues by approximately $1.7 million annually through 2025.
Valuation allowance	$ 8.4

Investment in Rafael Pharmace25

Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals") (Details) - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
Schedule of consolidated balance sheets
Convertible promissory note (at fair value)	$ 6,300	$ 6,300
Warrants (at cost)	5,400	5,400
Right to receive additional shares (at cost)		400
Total investment in Rafael Pharmaceuticals	$ 11,700	$ 12,100

Investment in Rafael Pharmace26

Investment in Rafael Pharmaceuticals, Inc. ("Rafael Pharmaceuticals") (Details Textual) - USD ($) $ in Thousands	Dec. 07, 2015	Mar. 02, 2017	Sep. 16, 2016	Jan. 31, 2018	Jan. 31, 2017	Jul. 31, 2016	Sep. 19, 2017	Sep. 12, 2017	Jul. 31, 2017	Apr. 30, 2016	Jan. 31, 2016
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Warrants expiry date				Dec. 31, 2020
Principal amount
Additional amount of investment funded				$ 11,700					$ 12,100
Exercise price of warrants or rights, description				The exercise price of the warrant is the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments. The minimum initial and subsequent exercises of the warrant shall be for such number of shares that will result in at least $5 million of gross proceeds to Rafael Pharmaceuticals, or such lesser amount as represents 5% of the outstanding capital stock of Rafael Pharmaceuticals, or such lesser amount as may then remain unexercised.
CS Pharma Holdings, LLC [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership percentage in non-operating subsidiary		45.00%		50.00%
Exercise warrants value				$ 10,000
Percentage of exercise warrants value				56.00%
IDT-Rafael Holdings [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership percentage in non-operating subsidiary				50.00%
Percentage of capital stock		10.00%
Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership percentage in non-operating subsidiary				90.00%
Ownership percentage in subsidiary and holds percentage of interest				51.00%
Additional amount of investment funded				$ 56,000		$ 2,000				$ 1,500	$ 500
Exercise warrants value	$ 10,000
Percentage of bonus shares received				10.00%				9.00%
Payments for exercise of warrants				$ 71,000
Convertible Debt Securities [Member] | Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Exercise warrants value				$ 122,000
Convertible promissory note (Series D Note) [Member] | Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Convertible promissory note, rate of interest				3.50%
Convertible promissory note, maturity date				Sep. 16, 2018
Exercise warrants value				$ 10,000
Purchase of exercise the warrant				$ 98,000
Convertible Notes Payable [Member] | Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Convertible promissory note, rate of interest			3.50%			3.50%
Convertible promissory note, maturity date			Jul. 31, 2018			Jul. 31, 2018
Amount of investment			$ 8,000			$ 2,000
Howard Jonas [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Percentage of bonus shares issued							9.00%
Howard Jonas [Member] | IDT-Rafael Holdings [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Purchase price		$ 1,000
Howard Jonas [Member] | Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Percentage of bonus shares received								1.00%
The Howard S. and Deborah Jonas Foundation [Member] | Series C Convertible Notes [Member] | Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Principal amount		525
Howard Jonas and Deborah Jonas [Member] | Series C Convertible Notes [Member] | Rafael Pharmaceuticals [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Principal amount		$ 525

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Related Party Transactions [Abstract]
Balance at beginning of period	$ 23,693	$ 15,145
Payments by IDT on behalf of the Company	436	471
Rental revenues earned from IDT	(994)	(1,682)
Cash repayments, net of advances	1,256	9,326
Balance at end of period	$ 24,391	$ 23,260

Related Party Transactions (D28

Related Party Transactions (Details Textual) - USD ($)	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Related Party Transactions (Textual)
Other expenses of related party	$ 436,000	$ 471,000
Rafael Pharmaceuticals and Lipomedix [Member]
Related Party Transactions (Textual)
Advances to invest in Rafael Pharmaceuticals and Lipomedix	$ 900,000	$ 9,400,000
August 1, 2017 [Member]
Related Party Transactions (Textual)
Lease expiration date	Apr. 30, 2025
Description of Leasing arrangements	The related party leases expire in April 2025 and are for 88,631 square feet and include two parking spots per thousand square feet of space leased at 520 Broad Street and for 12,400 square feet in Israel. The annual rent will be approximately $2.0 million. The related parties have the right to terminate theses leases upon four months' notice, and upon early termination will pay a termination penalty equal to 25% of the portion of the rent due over the course of the remaining term. Related parties will have the right to lease an additional 25,000 square feet in the building located at 520 Broad Street on the same terms as the base lease, and other rights to a further 25,000 square feet should all available space be leased to other tenants.
Renewal term of lease	5 years
Description of annual rent	The annual rent will be approximately $2.0 million.

Business Segment Information (D

Business Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017	Jan. 31, 2018	Jan. 31, 2017
Segment Reporting Information [Line Items]
Revenues	$ 956	$ 1,337	$ 2,063	$ 2,736
(Loss) income from operations	(816)	127	(1,869)	285
Pharmaceuticals [Member]
Segment Reporting Information [Line Items]
Revenues
(Loss) income from operations	(357)		(357)
Real Estate [Member]
Segment Reporting Information [Line Items]
Revenues	956	1,337	2,063	2,736
(Loss) income from operations	$ (459)	$ 127	$ (1,512)	$ 285

Business Segment Information 30

Business Segment Information (Details1)	6 Months Ended
	Jan. 31, 2018	Jan. 31, 2017
Geographic Concentration Risk [Member]
Segment Reporting Information [Line Items]
Revenue from customers located in Israel	2.00%	5.00%

Business Segment Information 31

Business Segment Information (Details 2) - USD ($) $ in Thousands	Jan. 31, 2018	Jul. 31, 2017
Segment Reporting Information [Line Items]
Long-lived Assets, net	$ 65,177	$ 74,037
Total Assets	77,644	86,204
United States [Member]
Segment Reporting Information [Line Items]
Long-lived Assets, net	61,449	71,674
Total Assets	73,034	83,675
Foreign [Member]
Segment Reporting Information [Line Items]
Long-lived Assets, net	3,728	2,363
Total Assets	$ 4,610	$ 2,529