Exhibit 99.1
RAFAEL HOLDINGS, INC.
PRO FORMA FINANCIAL INFORMATION
(Unaudited)
The following unaudited pro forma consolidated financial statements have been prepared to provide pro forma information with regard to a real estate disposition. The unaudited pro forma consolidated financial statements should be read in conjunction with Rafael Holdings, Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended July 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on October 18, 2021, and Form 10-Q for the three months ended April 30, 2022 filed with the SEC on June 14, 2022.
On August 22, 2022, Broad Atlantic Associates, LLC (the “Seller”), a wholly-owned subsidiary of the Company, completed the sale of the building owned by the Seller located at 520 Broad Street in Newark, New Jersey, and an associated 800-car public garage (the “Property”) to 520 Broad Holdings LLC, 26 Lombardy Holdings LLC and 1073 McCarter Holdings LLC, entities owned by The Sinai Equity Group (the “Buyer”) for a purchase price of $49.4 million. The Property served as the Company’s headquarters and has several tenants.
The Property was encumbered by a mortgage securing a $15 million loan which was paid off in this transaction. After repaying the loan, commissions, taxes, and other related costs, the Company received a net cash amount of approximately $33 million at closing.
The accompanying unaudited pro forma consolidated balance sheet as of April 30, 2022 has been prepared to give effect to the disposition of certain assets and liabilities related to the Property as if it had been completed on April 30, 2022. The unaudited pro forma consolidated statements of operations for the nine months ended April 30, 2022 and for the year ended July 31, 2021 gives effect to the disposition as if it had been completed on August 1, 2020.
The unaudited pro forma consolidated financial statements have been prepared in accordance with Regulation S-X Article 11, Pro Forma Financial Information, as amended by the final rule, Amendments to Financial Disclosures about Acquired and Disposed Businesses, as adopted by the SEC in May 2020 (“Article 11”). These unaudited pro forma consolidated financial statements were prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved by the Company had the disposition of the Property been consummated as of the dates indicated.
RAFAEL HOLDINGS, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF APRIL 30, 2022
(Unaudited, in thousands, except share and per share data)
| | | Historical As
Reported | | | Transaction
Accounting
Adjustments | | | Pro Forma | |
| ASSETS | | | | | | | | | |
| CURRENT ASSETS | | | | | | | | | |
| Cash and cash equivalents | | $ | 28,965 | | | $ | 33,032 | (a) | | $ | 61,997 | |
| Restricted cash | | | — | | | | — | | | | — | |
| Available-for-sale securities | | | 30,407 | | | | — | | | | 30,407 | |
| Interest receivable | | | 258 | | | | — | | | | 258 | |
| Trade accounts receivable, net of allowance for doubtful accounts of $186 and $193 at April 30, 2022 and July 31, 2021, respectively | | | 631 | | | | — | | | | 631 | |
| Prepaid expenses and other current assets | | | 2,251 | | | | (375 | )(b) | | | 1,876 | |
| Total current assets | | | 62,512 | | | | 32,657 | | | | 95,169 | |
| | | | | | | | | | | | | |
| Property and equipment, net | | | 42,183 | | | | (40,396 | )(c) | | | 1,787 | |
| Investments – Other Pharmaceuticals | | | 477 | | | | — | | | | 477 | |
| Investments – Hedge Funds | | | 4,684 | | | | — | | | | 4,684 | |
| In-process research and development and patents | | | 1,575 | | | | — | | | | 1,575 | |
| Other assets | | | 1,351 | | | | — | | | | 1,351 | |
| TOTAL ASSETS | | $ | 112,782 | | | $ | (7,739 | ) | | $ | 105,043 | |
| | | | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | | | | | |
| Trade accounts payable | | $ | 873 | | | $ | — | | | $ | 873 | |
| Accrued expenses | | | 1,335 | | | | — | | | | 1,335 | |
| Other current liabilities | | | 611 | | | | (375 | )(b) | | | 236 | |
| Due to related parties | | | 69 | | | | — | | | | 69 | |
| Note payable, net of debt issuance costs | | | 14,903 | | | | (14,903 | )(d) | | | — | |
| Total current liabilities | | | 17,791 | | | | (15,278 | ) | | | 2,513 | |
| | | | | | | | | | | | | |
| Other liabilities | | | 85 | | | | — | | | | 85 | |
| TOTAL LIABILITIES | | | 17,876 | | | | (15,278 | ) | | | 2,598 | |
| | | | | | | | | | | | | |
| 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 April 30, 2022 and July 31, 2021, respectively | | | 8 | | | | — | | | | 8 | |
| Class B common stock, $0.01 par value; 200,000,000 shares authorized, 20,004,234 issued and 19,981,157 outstanding as of April 30, 2022, and 16,947,066 issued and 16,936,864 outstanding as of July 31, 2021 | | | 200 | | | | — | | | | 200 | |
| Additional paid-in capital | | | 254,892 | | | | | | | | 254,892 | |
| Accumulated deficit | | | (160,673 | ) | | | 7,539 | (e) | | | (153,134 | ) |
| Accumulated other comprehensive loss related to unrealized loss on available-for-sale securities | | | (48 | ) | | | — | | | | (48 | ) |
| Accumulated other comprehensive income related to foreign currency translation adjustment | | | 3,767 | | | | — | | | | 3,767 | |
| Total equity attributable to Rafael Holdings, Inc. | | | 98,146 | | | | 7,539 | | | | 105,685 | |
| Noncontrolling interests | | | (3,240 | ) | | | — | | | | (3,240 | ) |
| TOTAL EQUITY | | | 94,906 | | | | 7,539 | | | | 102,445 | |
| TOTAL LIABILITIES AND EQUITY | | $ | 112,782 | | | $ | (7,739 | ) | | $ | 105,043 | |
| (a) | Adjustment to reflect gross cash consideration of $49.4 million received in the transaction, net of repayment of the loan of $15 million, commissions, taxes, and transaction costs incurred in connection with the closing, for a total net proceeds of approximately $33 million. |
| (b) | Adjustment to derecognize approximately $0.4 million deposit held in escrow in connection with the closing of the Property. |
| (c) | Adjustment to reflect the disposition of the Property sold in the transaction |
| (d) | Adjustment to derecognize liabilities, and payoff of a loan of $15 million secured by the Property. |
| (e) | Adjustment to reflect the impact of the estimated gain on sale and transaction costs. |
RAFAEL HOLDINGS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Unaudited, in thousands, except share and per share data)
| | | Historical As
Reported | | | Transaction
Accounting
Adjustments | | | Pro Forma | |
| REVENUE | | | | | | | | | |
| Rental – Third Party | | $ | 624 | | | $ | (487 | )(a) | | $ | 137 | |
| Rental – Related Party | | | 1,749 | | | | (1,665 | )(a) | | | 84 | |
| Parking | | | 518 | | | | (518 | )(a) | | | — | |
| Other – Related Party | | | 120 | | | | — | | | | 120 | |
| Total revenue | | | 3,011 | | | | (2,670 | ) | | | 341 | |
| | | | | | | | | | | | | |
| COSTS AND EXPENSES | | | | | | | | | | | | |
| Selling, general and administrative | | | 15,936 | | | | (2,006 | )(b) | | | 13,930 | |
| Research and development | | | 6,901 | | | | — | | | | 6,901 | |
| Depreciation and amortization | | | 1,142 | | | | (1,088 | )(c) | | | 54 | |
| Provision for loss on receivable pursuant to line of credit | | | 25,000 | | | | — | | | | 25,000 | |
| Provision for losses on related party receivables | | | 10,095 | | | | — | | | | 10,095 | |
| Loss from operations | | | (56,063 | ) | | | 424 | | | | (55,639 | ) |
| | | | | | | | | | | | | |
| Interest (expense) income, net | | | (1,153 | ) | | | 1,289 | (d) | | | 136 | |
| Impairment of cost method investment - Cornerstone Pharmaceuticals (f/k/a Rafael Pharmaceuticals) | | | (79,141 | ) | | | — | | | | (79,141 | ) |
| Loss on available-for-sale securities | | | (2 | ) | | | — | | | | (2 | ) |
| Unrealized loss on investments - Hedge Funds | | | (584 | ) | | | — | | | | (584 | ) |
| Loss before income taxes | | | (136,943 | ) | | | 1,713 | | | | (135,230 | ) |
| Provision for income taxes | | | (6 | ) | | | — | | | | (6 | ) |
| Equity in loss of RP Finance | | | (575 | ) | | | — | | | | (575 | ) |
| Consolidated net loss | | | (137,524 | ) | | | 1,713 | | | | (135,811 | ) |
| Net loss attributable to noncontrolling interests | | | (17,650 | ) | | | — | | | | (17,650 | ) |
| Net loss attributable to Rafael Holdings, Inc. | | $ | (119,874 | ) | | $ | 1,713 | | | $ | (118,161 | ) |
| | | | | | | | | | | | | |
| Loss per share | | | | | | | | | | | | |
| Basic and diluted | | $ | (6.16 | ) | | | | | | $ | (6.07 | ) |
| | | | | | | | | | | | | |
| Weighted average number of shares used in calculation of loss per share | | | — | | | | | | | | — | |
| Basic and diluted | | | 19,472,178 | | | | | | | | 19,472,178 | |
| (a) | Adjustment to remove rental revenue received from tenants at the Property. |
| (b) | Adjustment to selling, general and administrative expenses for operating costs on the Property. |
| (c) | Adjustment to remove historical depreciation expense on the Property. |
| (d) | Adjustment to remove interest expense incurred on the $15 million loan secured by the Property. |
RAFAEL HOLDINGS, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEAR ENDED JULY 31, 2021
(Unaudited, in thousands, except share and per share data)
| | | Historical As
Reported | | | Transaction
Accounting
Adjustments | | | Pro Forma | |
| REVENUES | | | | | | | | | |
| Rental – Third Party | | $ | 890 | | | $ | (676 | )(a) | | $ | 214 | |
| Rental – Related Party | | | 2,099 | | | | (1,991 | )(a) | | | 108 | |
| Parking | | | 502 | | | | (502 | )(a) | | | — | |
| Other – Related Party | | | 480 | | | | — | | | | 480 | |
| Total Revenue | | | 3,971 | | | | (3,169 | ) | | | 802 | |
| | | | | | | | | | | | | |
| COSTS AND EXPENSES | | | | | | | | | | | | |
| Selling, general and administrative | | | 20,416 | | | | (3,391 | )(b) | | | 17,025 | |
| Research and development | | | 4,907 | | | | — | | | | 4,907 | |
| Depreciation and amortization | | | 1,460 | | | | (1,390 | )(c) | | | 70 | |
| Impairment - Altira | | | 7,000 | | | | — | | | | 7,000 | |
| Loss from operations | | | (29,812 | ) | | | 1,612 | | | | (28,200 | ) |
| | | | | | | | | | | | | |
| Interest expense, net | | | (102 | ) | | | 92 | (d) | | | (10 | ) |
| Gain on sale of building | | | 749 | | | | — | | | | 749 | |
| Impairment of investments - Other Pharmaceuticals | | | (724 | ) | | | — | | | | (724 | ) |
| Unrealized gain on investments - Hedge Funds | | | 4,758 | | | | — | | | | 4,758 | |
| Loss before income taxes | | | (25,131 | ) | | | 1,704 | | | | (23,427 | ) |
| Provision for income taxes | | | (18 | ) | | | — | | | | (18 | ) |
| Equity in earnings of RP Finance | | | 383 | | | | — | | | | 383 | |
| Consolidated net loss | | | (24,766 | ) | | | 1,704 | | | | (23,062 | ) |
| Net loss attributable to noncontrolling interests | | | (222 | ) | | | — | | | | (222 | ) |
| Net loss attributable to Rafael Holdings, Inc. | | $ | (24,544 | ) | | $ | 1,704 | | | $ | (22,840 | ) |
| | | | | | | | | | | | | |
| Loss per share | | | | | | | | | | | | |
| Basic and Diluted | | $ | (1.49 | ) | | | | | | $ | (1.38 | ) |
| | | | | | | | | | | | | |
| Weighted average number of shares used in calculation of loss per share | | | | | | | | | | | | |
| Basic and Diluted | | | 16,522,686 | | | | | | | | 16,522,686 | |
| (a) | Adjustment to remove rental revenue received from tenants at the Property. |
| (b) | Adjustment to selling, general and administrative expenses for operating costs on the Property. |
| (c) | Adjustment to remove historical depreciation expense on the Property. |
| (d) | Adjustment to remove interest expense incurred on the $15 million loan secured by the Property. |
4
