Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Jul. 31, 2020 | Oct. 26, 2020 | Jan. 31, 2020 | |
Document Information Line Items | |||
Entity Registrant Name | Rafael Holdings, Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --07-31 | ||
Entity Public Float | $ 183,500,000 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001713863 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Jul. 31, 2020 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Shell Company | false | ||
Entity Ex Transition Period | false | ||
Entity File Number | 000-55863 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Interactive Data Current | Yes | ||
Class A common stock | |||
Document Information Line Items | |||
Entity Common Stock, Shares Outstanding | 787,163 | ||
Class B common stock | |||
Document Information Line Items | |||
Entity Common Stock, Shares Outstanding | 15,041,661 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 6,206 | $ 12,024 |
Trade accounts receivable, net of allowance for doubtful accounts of $218 and $122 at July 31, 2020 and 2019, respectively | 267 | 450 |
Due from Rafael Pharmaceuticals | 118 | 280 |
Prepaid expenses and other current assets | 273 | 507 |
Assets held for sale | 2,968 | |
Total current assets | 9,832 | 13,261 |
Property and equipment, net | 44,433 | 48,733 |
Equity investment – RP Finance | 192 | |
Investments – Rafael Pharmaceuticals | 70,018 | 70,018 |
Investments – Other Pharmaceuticals | 1,201 | 2,000 |
Investments – Hedge Funds | 7,510 | 5,125 |
Deferred income tax assets, net | 6 | 19 |
In-process research and development and patents | 1,575 | 1,575 |
Other assets | 1,580 | 1,412 |
TOTAL ASSETS | 136,347 | 142,143 |
CURRENT LIABILITIES | ||
Trade accounts payable | 921 | 795 |
Accrued expenses | 1,191 | 605 |
Amount due for purchase of membership interest | 3,500 | |
Other current liabilities | 115 | 27 |
Total current liabilities | 5,727 | 1,427 |
Due to related parties | 65 | |
Convertible debt, net of discount of $0 and $54 - Related Party | 14,946 | |
Other liabilities | 92 | 292 |
Accrued interest on convertible debt - Related Party | 649 | |
TOTAL LIABILITIES | 5,819 | 17,379 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Additional paid-in capital | 129,136 | 112,898 |
Accumulated deficit | (16,255) | (5,840) |
Accumulated other comprehensive income related to foreign currency translation adjustment | 3,762 | 3,784 |
Total equity attributable to Rafael Holdings, Inc. | 116,800 | 110,981 |
Noncontrolling interests | 13,728 | 13,783 |
TOTAL EQUITY | 130,528 | 124,764 |
TOTAL LIABILITIES AND EQUITY | 136,347 | 142,143 |
Class A common stock | ||
EQUITY | ||
Common stock value | 8 | 8 |
TOTAL EQUITY | 8 | 8 |
Class B common stock | ||
EQUITY | ||
Common stock value | 149 | 131 |
TOTAL EQUITY | $ 149 | $ 131 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Allowance for doubtful accounts (in Dollars) | $ 218 | $ 122 |
Convertible debt, net of discount (in Dollars) | $ 0 | $ 54 |
Class A common stock | ||
Common stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 787,163 | 787,163 |
Common stock, shares outstanding | 787,163 | 787,163 |
Class B common stock | ||
Common stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 15,034,598 | 13,142,502 |
Common stock, shares outstanding | 15,028,536 | 13,142,502 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
REVENUES | ||
Rental – Third Party | $ 1,516 | $ 1,452 |
Rental – Related Party | 2,082 | 2,125 |
Parking | 832 | 874 |
Other – Related Party | 480 | 480 |
Total Revenue | 4,910 | 4,931 |
COSTS AND EXPENSES | ||
Selling, general and administrative | 9,118 | 8,821 |
Research and development | 2,391 | 1,027 |
Depreciation | 1,866 | 1,779 |
Loss from operations | (8,465) | (6,696) |
Interest (expense) income, net | (32) | 469 |
Net (loss) gain resulting from foreign exchange transactions | (5) | 47 |
Gain on sale of marketable securities | 330 | |
Impairment of investments - Other Pharmaceuticals | (799) | |
Unrealized gain on investments - Hedge Funds | 2,385 | 907 |
Loss before income taxes | (6,916) | (4,943) |
(Provision for) benefit from income taxes | (29) | 19 |
Impairment of equity method investment of Altira | (4,000) | |
Equity in earnings of RP Finance | 192 | |
Consolidated net loss | (10,753) | (4,924) |
Net loss attributable to noncontrolling interests | (338) | (231) |
Net loss attributable to Rafael Holdings, Inc. | (10,415) | (4,693) |
OTHER COMPREHENSIVE LOSS | ||
Net Loss | (10,753) | (4,924) |
Foreign Currency Translation Adjustment | (22) | 298 |
Total Comprehensive Loss | (10,775) | (4,626) |
Comprehensive (loss) income attributable to noncontrolling interests | (9) | 173 |
Total Comprehensive loss attributable to Rafael Holdings, Inc. | $ (10,784) | $ (4,453) |
Loss per share | ||
Basic and Diluted (in Dollars per share) | $ (0.66) | $ (0.35) |
Weighted average number of shares used in calculation of loss per share | ||
Basic and Diluted (in Shares) | 15,764,829 | 13,275,239 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock, Series A | Common Stock, Series B | Additional Paid - in Capital | Accumulated Deficit | Accumulated other comprehensive income | Noncontrolling interests |
Balance at Jul. 31, 2018 | $ 116,124 | $ 8 | $ 118 | $ 103,636 | $ (1,108) | $ 4,043 | $ 9,427 |
Balance (in Shares) at Jul. 31, 2018 | 787,163 | 11,762,346 | |||||
Net loss | (4,924) | (4,693) | (231) | ||||
Adoption effect of ASU 2016-01 | (39) | 39 | |||||
Sale of Class B Common Shares | 8,642 | $ 12 | 8,630 | ||||
Sale of Class B Common Shares (in Shares) | 1,254,200 | ||||||
Stock-based compensation | 265 | $ 1 | 264 | ||||
Stock-based compensation (in Shares) | 74,637 | ||||||
Stock-based compensation to Board of Directors | 107 | 107 | |||||
Stock-based compensation to Board of Directors (in Shares) | 12,609 | ||||||
Stock options exercised | 190 | 190 | |||||
Stock options exercised (in Shares) | 38,710 | ||||||
Restricted stock units issued | |||||||
Debt discount on convertible debt | 71 | 71 | |||||
Capital contribution for noncontrolling interest | 4,587 | 4,587 | |||||
Foreign currency translation adjustment | (298) | (298) | |||||
Balance at Jul. 31, 2019 | 124,764 | $ 8 | $ 131 | 112,898 | (5,840) | 3,784 | 13,783 |
Balance (in Shares) at Jul. 31, 2019 | 787,163 | 13,142,502 | |||||
Net loss | (10,753) | (10,415) | (338) | ||||
Stock-based compensation | 476 | 476 | |||||
Stock-based compensation (in Shares) | 23,738 | ||||||
Stock-based compensation to Board of Directors | 208 | 208 | |||||
Stock-based compensation to Board of Directors (in Shares) | 12,609 | ||||||
Shares issued for convertible debt | 15,668 | $ 18 | 15,650 | ||||
Shares issued for convertible debt (in Shares) | 1,849,749 | ||||||
Shares withheld for payroll taxes | (125) | (125) | |||||
Shares withheld for payroll taxes (in Shares) | (6,062) | ||||||
Stock options exercised | 29 | 29 | |||||
Stock options exercised (in Shares) | 6,000 | ||||||
Conversion of LipoMedix Bridge Notes | 283 | 283 | |||||
Foreign currency translation adjustment | (22) | (22) | |||||
Balance at Jul. 31, 2020 | $ 130,528 | $ 8 | $ 149 | $ 129,136 | $ (16,255) | $ 3,762 | $ 13,728 |
Balance (in Shares) at Jul. 31, 2020 | 787,163 | 15,028,536 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Operating activities | ||
Net loss | $ (10,753) | $ (4,924) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 1,866 | 1,779 |
Deferred income taxes | 13 | (19) |
Interest income on Rafael Pharmaceuticals Series D Convertible Note | (848) | |
Interest income | (37) | |
Net gain on sale of marketable securities | (330) | |
Net unrealized gain on investments - Hedge Funds | (2,385) | (907) |
Impairment of investments - Other Pharmaceuticals | 799 | |
Impairment of equity method investment of Altira | 4,000 | |
Equity in earnings of RP Finance | (192) | |
Provision for doubtful accounts | 96 | 122 |
Noncash compensation | 684 | 372 |
Amortization of debt discount | 54 | 17 |
Write-off of patents | 76 | |
Change in assets and liabilities: | ||
Trade accounts receivable | 87 | (285) |
Prepaid expenses and other current assets | 234 | (86) |
Other assets | (168) | 275 |
Accounts payable and accrued expenses | 713 | 533 |
Other current liabilities | 88 | 3 |
Due to related parties | (65) | 654 |
Due from related parties | 162 | (280) |
Accrued interest - Related Party | 19 | 649 |
Other liabilities | 82 | 104 |
Net cash used in operating activities | (4,666) | (3,132) |
Investing activities | ||
Purchase of investment in Altira | (500) | |
Purchases of property and equipment | (534) | (399) |
Proceeds from sale and maturity of marketable securities | 25,031 | |
Investment in Rafael Pharmaceuticals | (55,870) | |
Net cash used in investing activities | (1,034) | (31,238) |
Financing activities | ||
Contribution from noncontrolling interest of consolidated entity | 4,587 | |
Repayment of loan from Rafael Pharmaceuticals, including interest | 3,335 | |
Proceeds from exercise of options | 29 | 190 |
Proceed from sale of shares | 7,777 | |
Proceeds from issuance of convertible note | 15,000 | |
Payments for taxes related to shares withheld for employee taxes | (125) | |
Net cash (used in) provided by financing activities | (96) | 30,889 |
Effect of exchange rate changes on cash and cash equivalents | (22) | (298) |
Net decrease in cash and cash equivalents | (5,818) | (3,779) |
Cash and cash equivalents, beginning of year | 12,024 | 15,803 |
Cash and cash equivalents, end of year | 6,206 | 12,024 |
Supplemental Schedule of Noncash Investing and Financing Activities | ||
Adoption effect of ASU 2016-01 | 39 | |
Beneficial conversion feature of convertible debt - Related Party | 71 | |
Debt and accrued interest converted to Series D Preferred Stock | 10,848 | |
Related Party deposit utilized to purchase Class B Common Stock | 864 | |
Amount due for purchase of membership interest | 3,500 | |
Transfer of asset held for sale | 2,968 | |
Conversion of LipoMedix Bridge Notes | 283 | |
Conversions of related party convertible notes payable and accrued interest | $ 15,668 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Rafael Holdings, Inc. (“Rafael Holdings” or the “Company”), a Delaware corporation, owns interests in pre-clinical and clinical stage pharmaceutical companies and commercial real estate assets. The assets are operated as two separate lines of business. The pharmaceutical holdings include preferred and common equity interests and a warrant to purchase additional equity interests in Rafael Pharmaceuticals, Inc., or Rafael Pharmaceuticals, which 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; and, a majority equity interest in LipoMedix Pharmaceuticals Ltd., or LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, in 2019, we established the Barer Institute (“Barer”), a wholly-owned early stage venture focused on developing a pipeline of therapeutic compounds, including compounds to regulate cancer metabolism. The venture is pursuing collaborative research agreements with leading scientists from top academic institutions to develop other early stage ventures. In addition, we have recently initiated efforts to develop other early stage pharmaceutical ventures. The commercial real estate holdings consist of a building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and certain other entities and hosts other tenants and an associated 800-car public garage, an office/data center building in Piscataway, New Jersey (see Note 18 for subsequent event) and a portion of a building in Israel. On March 26, 2018, IDT Corporation, or IDT, the former parent corporation of the Company, completed a tax-free spinoff (the “Spin-Off”) of the Company’s capital stock, through a pro rata distribution of common stock to its stockholders of record as of the close of business on March 13, 2018. (See Note 13 for additional information on related party transactions.) Basis of Presentation The “Company” in these consolidated financial statements refers to Rafael Holdings on a consolidated basis. All significant intercompany accounts and transactions have been eliminated in consolidation. 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 2020 refers to the fiscal year ended July 31, 2020). The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All majority-owned subsidiaries are consolidated with all intercompany transactions and balances being eliminated in consolidation or combination. The entities included in these consolidated financial statements are as follows: Company Country of Incorporation Percentage Rafael Holdings, Inc. United States – Delaware 100 % Broad Atlantic Associates, LLC United States – Delaware 100 % IDT 225 Old NB Road, LLC United States – Delaware 100 % IDT R.E. Holdings Ltd. Israel 100 % Rafael Holdings Realty, Inc. United States – Delaware 100 % Barer Institute, Inc. United States – Delaware 100 % The Barer Institute, LLC United States – Delaware 100 % Hillview Avenue Realty, JV United States – Delaware 100 % Hillview Avenue Realty, LLC United States – Delaware 100 % Pharma Holdings, LLC United States – Delaware 90 % CS Pharma Holdings, LLC United States – Delaware 45 %* LipoMedix Pharmaceuticals Ltd. Israel 67 % * 50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. Risks and Uncertainties - COVID-19 In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and has since spread around the globe. The Company actively monitors the outbreak and its potential impact on its operations and those of the Company’s holdings. Although the Company’s operations are mainly in the United States, the Company has assets outside of the United States, and some of the Company’s pharmaceutical holdings conduct operations, manufacturing and clinical trial activities in Europe and Asia. The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies. The Company has granted a rent concession to two of its retail tenants during the month of April. Additionally, one tenant has not paid rent in June and July 2020 due to the New Jersey state gym closures; however, the Company does not believe this is recurring and believes that the rental revenues will materially continue as the tenant has resumed paying original contractual rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of our real estate portfolio. The Company has implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings. Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of the Company’s holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic's impact on the U.S. and global economies, changes in our customers' behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, the Company may incur expenses or delays relating to such events outside of the Company’s control, which could have a material adverse impact on the Company’s business. Cash and Cash Equivalents The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Concentration of Credit Risk and Significant Customers The Company routinely assesses the financial strength of its customers. As a result, the Company believes that its accounts receivable credit risk exposure is limited. For the year ended July 31, 2020, related parties represented 52% of the Company’s revenue, respectively, and as of July 31, 2020, five customers represented 11%, 10%, 10%, 5%, and 4% of the Company’s accounts receivable balance, respectively. For the year ended July 31, 2019, related parties and one other customer represented 53%, and 10% of the Company’s revenue, respectively, and as of July 31, 2019, five customers represented 38%, 17%, 16%, 12%, and 7% of the Company’s accounts receivable balance, respectively. Allowance for Doubtful Accounts The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The allowance is determined based on known troubled accounts, historical experience and other currently available evidence. Doubtful accounts are written off upon final determination that the trade accounts will not be collected. The computation of this allowance is based on the tenants’ or parking customers’ payment histories and current credit statuses, as well as certain industry or geographic specific credit considerations. If the Company’s estimates of collectability differ from the cash received, then the timing and amount of the Company’s reported revenue could be impacted. The credit risk is mitigated by the high quality of the Company’s existing tenant base, inclusive of related parties, which represented 52% and 53% of the Company’s total revenue for the years ended July 31, 2020 and 2019, respectively. The Company recorded bad debt expense of approximately $96,000 and $40,000 for the years ended July 31, 2020 and 2019, respectively. Investments The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated. Investments in businesses that the Company does not control, but in which the Company has the ability to exercise significant influence over operating and financial matters, are accounted for using the equity method. Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. The Company periodically evaluates its investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. Variable Interest Entities In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company – that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary. Cost Method Investments Equity Method Investments Long-Lived Assets Equipment, buildings, leasehold improvements, and furniture and fixtures are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives, which range as follows: Classification Years Building and improvements 40 Tenant improvements 7-15 Other (primarily equipment and furniture and fixtures) 5 The Company tests the recoverability of its long-lived assets with finite useful lives whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company tests for recoverability based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, the Company will record an impairment loss, if any, based on the difference between the estimated fair value and the carrying value of the asset. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record impairments in future periods and such impairments could be material. Properties The Company owns commercial real estate located at 520 Broad Street in Newark, New Jersey, 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 (see Note 18 for subsequent event). Additionally, the Company owns a portion of the 6th floor of a building located at 5 Shlomo Halevi Street, Har Hotzvim, in Jerusalem, Israel. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss. As an owner and operator of real estate, the Company derives the majority of its revenue from leasing office and parking space to tenants at its properties. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842, Leases Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements. The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company’s performance obligation is satisfied, consistent with the Company’s previous accounting. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due. Research and Development Costs Research and development costs and expenses consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended. Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property. Repairs and Maintenance The Company charges the cost of repairs and maintenance, including the cost of replacing minor items not constituting substantial betterment, to selling, general and administrative expenses as these costs are incurred. Stock-Based Compensation The Company accounts for stock-based compensation using the provisions of ASC 718, Stock Based Compensation Income Taxes The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change. The Company uses a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. The Company determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of tax benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability. The Company classifies interest and penalties on income taxes as a component of income tax expense, if any. Contingencies The Company accrues for loss contingencies when both (a) information available prior to issuance of the financial statements indicates that it is probable that a liability had been incurred at the date of the financial statements and (b) the amount of loss can reasonably be estimated. When the Company accrues for loss contingencies and the reasonable estimate of the loss is within a range, the Company records its best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company discloses an estimated possible loss or a range of loss when it is at least reasonably possible that a loss may have been incurred. Fair Value Measurements Fair value of financial and non-financial assets and liabilities is defined as an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs to valuation techniques used to measure fair value, is as follows: Level 1 Level 2 Level 3 A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. Functional Currency The U.S. Dollar is the functional currency of our entities operating in the United States. The functional currency for our subsidiary operating outside of the United States is the New Israeli Shekel, the currency of the primary economic environment in which the subsidiary primarily expends cash. The Company translates that subsidiary’s financial statements into U.S. Dollars. The Company translates assets and liabilities at the exchange rate in effect as of the consolidated financial statement date, and translates accounts from the statements of operations and comprehensive loss using the weighted average exchange rate for the period. The Company reports gains and losses from currency exchange rate changes related to intercompany receivables and payables, currently in non-operating expenses. Loss Per Share Basic loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per share is determined in the same manner as basic loss per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase would be anti-dilutive. Recently Issued Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Recently Adopted Accounting Pronouncements The FASB issued ASU 2016-02, Leases The Company initially adopted the new lease accounting standard as of August 1, 2019 and elected the optional transition method to apply the new standard prospectively. The Company elected the package of transition practical expedients and, therefore, did not reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) initial direct costs for any existing leases. Further, as of July 31, 2020, the Company was not a lessee under any leasing arrangements, which had, and will have, the following impacts on the Company: Topic 842 changed certain requirements regarding the classification of leases that could result in the Company recognizing certain long-term leases entered into or modified after August 1, 2019 as sales-type leases, as opposed to operating leases. The Company did not have a cumulative-effect adjustment as of the adoption date. The Company elected the practical expedient to not separate certain non-lease components from the lease component to which they relate because the timing and pattern of transfer for the lease components and non-lease components are the same and the related lease component is classified as an operating lease. As a result, the Company continues to present all rentals and reimbursements from tenants as a single line item rental income within the consolidated statements of operations and comprehensive loss. No reclassifications to prior periods for comparability were required. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Accumulated Accumulated (in thousands) Balance at July 31, 2018 $ 4,043 $ (1,108 ) Impact from adoption of ASU 2016-01 39 (39 ) Balance at August 1, 2018 $ 4,082 $ (1,147 ) |
Investment in Rafael Pharmaceut
Investment in Rafael Pharmaceuticals | 12 Months Ended |
Jul. 31, 2020 | |
Schedule of Investments [Abstract] | |
INVESTMENT IN RAFAEL PHARMACEUTICALS | NOTE 2 – INVESTMENT IN 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. The Company owns equity interests and rights in Rafael Pharmaceuticals through a 90%-owned non-operating subsidiary, Pharma Holdings, LLC, or Pharma Holdings. Pharma Holdings owns 50% of CS Pharma Holdings, LLC (“CS Pharma”), a non-operating entity that owns equity interests in Rafael Pharmaceuticals. Accordingly, the Company holds an effective 45% indirect interest in the assets held by CS Pharma. Howard Jonas, Chairman of the Board and Chief Executive Officer of the Company, and Chairman of the Board of Rafael Pharmaceuticals, owns 10% of Pharma Holdings. Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the “Warrant”). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share, subject to certain adjustments, and will expire upon the earlier of June 30, 2021, a qualified initial public offering, or liquidation event of Rafael Pharmaceuticals. On March 25, 2020, the Board of Directors of Rafael Pharmaceuticals extended the expiration date of the Warrant held by Pharma Holdings to purchase shares of the Warrant from December 31, 2020 to June 30, 2021 and on August 31, 2020 the Board of Directors of Rafael Pharmaceuticals further extended the expiration date of the Warrant held by Pharma Holdings, LLC to purchase shares of the Warrant to August 15, 2021. Pharma Holdings also holds certain governance rights in Rafael Pharmaceuticals including appointment of directors. CS Pharma holds 16.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock. CS Pharma owned a $10 million Series D Convertible Note, with 3.5% interest, in Rafael Pharmaceuticals which was converted in January 2019. The Company and its subsidiaries collectively own securities representing 51% of the outstanding capital stock of Rafael Pharmaceuticals and 37% of the capital stock on a fully diluted basis (excluding the remainder of the Warrant). The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class. The Company serves as the managing member of Pharma Holdings, and Pharma 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 Pharma Holdings to 50% (based on current ownership) of such distributions. Similarly, if Pharma Holdings were to distribute proceeds it receives from CS Pharma, it would do so on a pro rata basis, entitling the Company to 90% (based on current ownership) of such distributions. The Company evaluated its investments in Rafael Pharmaceuticals in accordance with ASC 323, Investments - Equity Method and Joint Ventures, Rafael Pharmaceuticals is a VIE; however, the Company has determined that it is not the primary beneficiary as it does not have the power to direct the activities of Rafael Pharmaceuticals that most significantly impact Rafael Pharmaceuticals’ economic performance. In addition, the interests held in Rafael Pharmaceuticals are Series D Convertible Preferred Stock and do not represent in-substance common stock. Howard Jonas has additional contractual rights to receive additional Rafael Pharmaceutical shares (“Bonus Shares”) for an additional 10% of the fully diluted capital stock of Rafael Pharmaceuticals upon the achievement of certain milestones. The additional 10% is based on the fully diluted capital stock of Rafael Pharmaceuticals, excluding the remainder for the Warrant, at the time of issuance. If any of the milestones are met, the Bonus Shares are to be issued without any additional payment. Howard Jonas has the right to transfer the Bonus Shares, in his discretion, to others, including those who are instrumental to the future success of Rafael Pharmaceuticals. The Company holds a Warrant to purchase a significant stake in Rafael Pharmaceuticals, as well as other equity and governance rights in Rafael Pharmaceuticals, which the Company can’t exercise, in full, at this time and may never be able to exercise. The Company currently own 51% of the issued and outstanding equity in Rafael Pharmaceuticals. Approximately 8% of the issued and outstanding equity is owned by the Company’s subsidiary CS Pharma and 42% is held by the Company’s subsidiary Pharma Holdings. The Company’s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company’s total ownership to 56%. Based on the current shares issued and outstanding of Rafael Pharmaceuticals as of July 31, 2020, the Company, and the Company’s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company’s affiliates would need to pay approximately $104 million to exercise the Warrant in full including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any portion of the Warrant. Following any exercise, a portion of the Company’s interest in Rafael Pharmaceuticals would continue to be held for the benefit of the other equity holders in Pharma Holdings and CS Pharma. Given the Company’s anticipated available cash, 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. Rafael Pharmaceuticals may also issue additional equity interests, such as stock options, which will require the Company to pay additional cash to maintain the Company’s ownership percentage or exercise the Warrant in full. |
Investment in Altira
Investment in Altira | 12 Months Ended |
Jul. 31, 2020 | |
Investment In Acquired Royalty Rights [Abstract] | |
INVESTMENT IN ALTIRA | NOTE 3 – INVESTMENT IN ALTIRA The Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) on May 13, 2020 with a member (the “Seller”) of Altira Capital & Consulting, LLC (“Altira”). Pursuant to the Purchase Agreement, on May 13, 2020, the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Altira Royalty Agreement) on sales of certain Rafael Pharmaceutical products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) payment of $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of the interim data analysis in Rafael Pharmaceutical’s Phase 3 pivotal trial (AVENGER 500 ® ® The Company has accounted for the purchase of the 33.333% membership interest in Altira as an equity method investment in accordance with the guidance in ASC 323, Investments – Equity Method and Joint Ventures. The Company determined that a 33.333% membership interest in Altira indicates that the Company is able to exercise significant influence over Altira, and the Company's membership interest is considered to be "more than minor" in accordance with the guidance. The cost of the investment was determined to be $4,000,000 pursuant to the terms of the Purchase Agreement. The contingent consideration, as described within the Purchase Agreement, in the amount of $6,000,000, will be recognized when the payments are considered probable. During the year ended July 31, 2020, the Company paid the Seller $500,000 in cash, and has recorded the remaining payments due to the Seller of $3,500,000 as a current liability. Furthermore, the Company has identified an other than temporary impairment (“OTTI”) of the equity method investment based on the guidance at ASC 323, and has determined that the investment is fully impaired and has recorded an impairment charge of $4,000,000, which is the total amount of the investment in Altira. The assets and operations of Altira are not significant, and the Company has identified the equity investment in Altira as a related party transaction (see Note 13). |
Investment in RP Finance, LLC
Investment in RP Finance, LLC | 12 Months Ended |
Jul. 31, 2020 | |
Investment In RP Finance LLC [Abstract] | |
INVESTMENT IN RP FINANCE, LLC | NOTE 4 – INVESTMENT IN RP FINANCE, LLC On February 3, 2020, Rafael Pharmaceuticals entered into a Line of Credit Loan Agreement (“Line of Credit Agreement”) with RP Finance which provides a revolving commitment of up to $50,000,000 to fund clinical trials and other capital needs. The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals. Under the Line of Credit Agreement, all funds borrowed will bear interest at the mid-term Applicable Federal Rate published by the U.S. Internal Revenue Service. The maturity date is the earlier of February 3, 2025, upon a change of control of Rafael Pharmaceuticals or a sale of Rafael Pharmaceuticals or its assets. Rafael Pharmaceuticals can draw on the facility on 60 days’ notice. The funds borrowed under the Line of Credit Agreement must be repaid out of certain proceeds from equity sales by Rafael Pharmaceuticals. In connection with entering into the Line of Credit Agreement, Rafael Pharmaceuticals agreed to issue to RP Finance shares of its common stock representing 12% of the issued and outstanding shares of Rafael Pharmaceuticals common stock, with such interest subject to anti-dilution protection as set forth in the Line of Credit Agreement. RP Finance has been identified as a VIE; however, the Company has determined that it is not the primary beneficiary as the Company does not have the power to direct the activities of RP Finance that most significantly impact RP Finance’s economic performance and, therefore, is not required to consolidate RP Finance. Therefore, we will use the equity method of accounting to record our investment in RP Finance. The Company has recognized approximately $192 thousand and $0 in income from its ownership interests of 37.5% in RP Finance for the years ended July 31, 2020 and 2019, respectively. The assets and operations of RP Finance are not significant, and the Company has identified the equity investment in RP Finance as a related party transaction (see Note 13). |
Investment in LipoMedix Pharmac
Investment in LipoMedix Pharmaceuticals Ltd | 12 Months Ended |
Jul. 31, 2020 | |
Business Combinations [Abstract] | |
INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD. | NOTE 5 – INVESTMENT IN LIPOMEDIX PHARMACEUTICALS LTD. LipoMedix is a clinical-stage, privately held Israeli company focused on the development of an innovative, safe and effective cancer therapy based on liposome delivery. The Company holds 67% of the issued and outstanding ordinary shares of LipoMedix and has consolidated this investment from the second quarter of fiscal 2018. In July 2018, the Company provided no-interest bridge financing of $875,000 to LipoMedix (the “2018 Bridge Note”), which was converted into 1,650,943 shares of LipoMedix on January 20, 2020 in accordance with its terms, thereby increasing the Company’s ownership from 52% to 58%. In April 2019, the Company provided no-interest bridge financing of $250,000 to LipoMedix (the “2019 Bridge Note”). The 2019 Bridge Note is automatically convertible into shares of LipoMedix as follows: (i) upon an issuance of an aggregate $2.0 million of additional equity securities (excluding the conversion of the Bridge Notes); or (ii) upon a liquidation or dissolution of LipoMedix or a sale of LipoMedix or its assets. If converted, the 2019 Bridge Note will be converted into shares of the most senior class of equity of LipoMedix then issued. If converted upon an equity financing, the 2019 Bridge Note will be converted at a conversion price per share that is equal to 75% of the price paid in the equity offering. If converted upon a liquidation or sale event, the 2019 Bridge Note will be converted at a conversion price per share that is equal to 75% of the per share distribution received by LipoMedix equity holders in connection with the event or if greater the Company will receive a payment equal to the 2019 Bridge Note ($250,000). If none of such events occurs prior to September 28, 2019, the 2019 Bridge Note will be converted into the most senior class of shares LipoMedix has then issued at a conversion price per share equal to $0.53 (calculated on the basis of LipoMedix’s pre-money valuation of $5.0 million). The 2019 Bridge Note converted into 471,698 shares of LipoMedix on September 28, 2019. In November 2019, the Company provided bridge financing in the principal amount of $100,000 to LipoMedix with a maturity date of May 3, 2020 and an interest rate of 6%. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets. In January 2020, the Company provided bridge financing in the principal amount of $125,000 to LipoMedix with a maturity date of May 3, 2020 and an interest rate of 6%. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets. In March 2020, the Company provided bridge financing in the principal amount of $75,000 to LipoMedix with a maturity date of April 20, 2020 and an interest rate of 10%. Under the terms of the note, as long as it remains outstanding, LipoMedix may not incur any additional debt, make any shareholder distributions, or assume any liens on property or assets. On May 20, 2020, the Company entered into a Share Purchase Agreement with LipoMedix to purchase 4,000,000 ordinary shares of LipoMedix for an aggregate purchase price of $1,000,000. The purchase consideration consists of the outstanding Promissory Notes between the Company and LipoMedix dated November 13, 2019, January 21, 2020 and March 27, 2020 in the total principal amount of $300,000 plus accrued interest, for an aggregate amount of $306,737, and $693,263 of cash, thereby increasing the Company’s ownership from 58% to 67%. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Jul. 31, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
MARKETABLE SECURITIES | NOTE 6 – MARKETABLE SECURITIES During fiscal 2019, all marketable securities held by the Company were liquidated in connection with the partial exercise of the Rafael Pharmaceuticals Warrant. There were no marketable securities held by the Company as of July 31, 2020 and 2019. Proceeds from maturities and sales of available-for-sale securities were $25.0 million in fiscal year 2019. The gross realized gains that were included in earnings as a result of sales totaled $330,000 in fiscal year 2019. There were no gross realized losses that were included in earnings as a result of sales in fiscal year 2019. The Company uses the specific identification method in computing the gross realized gains and gross realized losses on the sales of marketable securities. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jul. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 7 – FAIR VALUE MEASUREMENTS The Fair Value Measurements and Disclosures topic of the FASB ASC requires disclosures about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows: Level 1 Level 2 Level 3 The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a listing of the Company’s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of July 31, 2020 and July 31, 2019: At July 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets: Hedge Funds $ — $ — $ 7,510 $ 7,510 Total $ — $ — $ 7,510 $ 7,510 July 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Hedge Funds $ — $ — $ 5,125 $ 5,125 Total $ — $ — $ 5,125 $ 5,125 At July 31, 2020 and July 31, 2019, the Company did not have any liabilities measured at fair value on a recurring basis. The following table summarizes the change in the balance of the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3): At July 31, 2020 2019 (in thousands) Balance, beginning of period $ 5,125 $ 12,118 Conversion of Series D Convertible Note — (7,900 ) Total gain included in earnings 2,385 907 Balance, end of period $ 7,510 $ 5,125 The September 2016 Series D Convertible Note was converted into shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals in January 2019. Prior to the Spin-Off, IDT contributed $2.0 million in investments in securities in another entity that are not liquid, which were included in Investments - Other Pharmaceuticals in the accompanying consolidated balance sheets. The investment is accounted for under ASC 321, Investments - Equity Securities Fair Value of Other Financial Instruments The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. Cash and cash equivalents, prepaid expense and other current assets, and accounts payable. Other assets and other liabilities. Hedge funds classified as Level 3 include investments and securities which may not be based on readily observable data inputs. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. The Company’s financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amounts of trade accounts receivable, trade accounts payable and due from related parties approximate 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 July 31, 2020 or July 31, 2019. |
Trade Accounts Receivable
Trade Accounts Receivable | 12 Months Ended |
Jul. 31, 2020 | |
Receivables [Abstract] | |
TRADE ACCOUNTS RECEIVABLE | NOTE 8 – TRADE ACCOUNTS RECEIVABLE Trade Accounts Receivable consisted of the following: July 31, 2020 2019 (in thousands) Trade Accounts Receivable $ 364 $ 561 Accounts Receivable - Related Party 121 11 Less Allowance for Doubtful Accounts (218 ) (122 ) Trade Accounts Receivable, net $ 267 $ 450 The current portion of deferred rental income included in prepaid expenses and other current assets was approximately $11 thousand and $34 thousand as of July 31, 2020 and July 31, 2019, respectively. The noncurrent portion of deferred rental income included in Other Assets was approximately $1.5 million and $1.4 million as of July 31, 2020 and July 31, 2019, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 9 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following: At July 31, 2020 2019 (in thousands) Building and Improvements $ 47,591 $ 54,241 Land 10,412 10,412 Furniture and Fixtures 1,145 1,145 Other 256 255 59,404 66,053 Less Accumulated Depreciation (14,971 ) (17,320 ) Total $ 44,433 $ 48,733 Other property and equipment consist of other equipment and miscellaneous computer hardware. Depreciation expense pertaining to property and equipment was approximately $1.9 million and $1.8 million for the years ended July 31, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES On December 22, 2017, the U.S. government enacted “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for fiscal Year 2018”, which is commonly referred to as “The Tax Cuts and Jobs Act” (the “Tax Act”). The Tax Act provides for comprehensive tax legislation that, among other things, reduces the U.S. federal statutory corporate tax rate from 35.0% to 21.0% effective January 1, 2018, broadens the U.S. federal income tax base, requires companies to pay a one-time repatriation tax on earnings of certain foreign subsidiaries that were previously tax deferred (“transition tax”), and creates new taxes on certain foreign sourced earnings. The Company has completed its accounting for the income tax effects of the enactment of the Tax Act. At July 31, 2019, the Company did not have any undistributed earnings of its foreign subsidiaries. As a result, no additional income or withholding taxes were provided for, for the undistributed earnings or any additional outside basis differences inherent in the foreign entities. The Company reviewed the global intangible low taxed income (“GILTI”) and base erosion anti-abuse tax (“BEAT”) that became effective August 1, 2018 and has not recorded any impact associated with either. At July 31, 2020, the Company has federal net operating loss (“NOL”) carryforwards from domestic operations of approximately $32.7 million, to offset future taxable income. The Company has state NOLs of $13.6 million. The Company has NOLs from foreign operations of $2.4 million. As part of the Tax Act, federal NOLs generated in 2018 and later are not subject to an expiration period and are available to offset 80% of taxable income in the year in which they are utilized. The federal NOL carryforwards generated prior to 2018 will begin to expire in 2026. The state NOLs will begin to expire in 2038 and foreign NOLs do not expire. The Company anticipates that its assumptions and estimates may change as a result of future guidance and interpretation from the Internal Revenue Service, the SEC, the FASB, and various other taxing jurisdictions. In particular, the Company anticipates that the U.S. state jurisdictions will continue to determine and announce their conformity with or decoupling from the Tax Act, either in its entirety or with respect to specific provisions. Legislative and interpretive actions could result in adjustments to the Company’s provisional estimates when the accounting for the income tax effects of the Tax Act is completed. The components of loss before income taxes are as follows: For the Year Ended July 31, 2020 2019 (in thousands) Domestic $ (10,239 ) $ (3,410 ) Foreign (704 ) (1,533 ) Loss before income taxes $ (10,943 ) $ (4,943 ) (Provision for) benefit from income taxes as presented in the consolidated statements of operations and comprehensive loss consisted of the following: For the Year Ended July 31, 2020 2019 (in thousands) Current: Foreign $ (2 ) $ — Federal (9 ) — State — — Total current expense (11 ) — Deferred: Foreign (18 ) 19 Federal — — State — — Total deferred expense (18 ) 19 (Provision for) benefit from income taxes $ (29 ) $ 19 The differences between income taxes expected at the U.S. federal statutory income tax rate and income taxes are reported as follows: At July 31, 2020 2019 (in thousands) U.S. federal income tax at statutory rate $ 2,298 $ 908 State income tax 662 172 Valuation allowance (3,007 ) 30 Foreign tax rate differential 11 24 Tax law change — — Permanent differences (2 ) (102 ) Rate Change — (1,030 ) Other 9 17 (Provision for) benefit from income taxes $ (29 ) $ 19 The Company has not recorded U.S. income tax expense for foreign earnings because it has not recorded any post spin-off from IDT. Significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows: At July 31, 2020 2019 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 8,395 $ 5,316 AMT carryforwards 2,660 2,692 Reserves and accruals 61 34 Stock-based compensation 312 119 Gross deferred tax assets 11,428 8,161 Less valuation allowance (11,422 ) (8,142 ) Total deferred tax assets 6 19 Total deferred tax liabilities — — Deferred tax assets, net $ 6 $ 19 Net deferred tax assets are included in deferred income tax assets, net in the consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jul. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 – COMMITMENTS AND CONTINGENCIES Legal Proceedings On September 17, 2018, LipoMedix was notified of a claim initiated by one of its founders seeking payment of consulting fees in the amount of approximately $377,000 and seeking to place restrictions on LipoMedix’ bank accounts and other assets to protect his claim. LipoMedix did not believe that the individual had the right to receive any payment at the current time. LipoMedix responded to the demand for the placement of restrictions on its assets. In May 2019, LipoMedix received a letter from the other founder requesting payment of his consulting fees. On July 15, 2019, the parties settled the matters and the two founders will be paid a percentage of future investments and certain other proceeds. On July 12, 2019, the Company received a Citation and Notification of Penalty from the Occupational Safety and Health Administration of the U.S. Department of Labor, or OSHA, related to an OSHA inspection of 520 Broad Street, Newark, New Jersey. The citation seeks to impose penalties related to alleged violations of the Occupation Safety and Health Act of 1970 at 520 Broad Street. On July 31, 2019, the Company filed a Notice of Contest with OSHA contesting the citation in its entirety. On February 14, 2020, the Company entered into a Settlement Agreement with OSHA, as related to the citation received on July 12, 2019. As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021. The Company accounts for contingencies when a loss is considered probable and can be reasonably estimated. For the matters disclosed above, a legal accrual for approximately $225,000 has been recorded for legal fees and losses believed to be both probable and reasonably estimable, but an exposure to additional loss may exist in excess of the amount accrued. On December 31, 2019, an employee of the Company filed a complaint in connection with the incident that led to the OSHA inspection noted above for personal injuries against the Company and other parties in the New Jersey Supreme Court for an incident that took place on January 31, 2019 at 520 Broad Street, Newark, New Jersey. The Company intends to vigorously defend this matter. The loss is considered remote and no accrual has been recorded. 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, other than noted above, 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. |
Convertible Note
Convertible Note | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTE | NOTE 12 – CONVERTIBLE NOTE On November 15, 2018, Howard Jonas, the Company’s Chairman, CEO, and controlling stockholder entered into an agreement to purchase a convertible note from the Company for $15.0 million. The term of the note was three years with interest accruing on the principal amount at a rate of 6% per annum, compounded quarterly. The note was subsequently assigned by Mr. Jonas to the Howard S. Jonas 2017 Annuity Trust. At the option of the Company, interest on the note can be capitalized and added to principal or payable in cash. The note was convertible at the option of the holder into shares of Class B common stock at a conversion price of $8.47 per share, the closing price of the Company’s Class B common stock on the trading day before the date of the investment agreement. The initial principal amount of the note was convertible into 1,770,956 shares of Class B common stock, and if all interest for the three-year term of the note is capitalized, the note would have been convertible into 2,117,388 shares of Class B common stock. If the closing price of the Company’s Class B common stock on the NYSE American is 200% of the conversion price for at least thirty (30) consecutive days, the Company had the right to cause conversion of the note. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2020 which was included in interest expense. In addition, the Company recorded approximately $0 and $650,000 of interest expense for the years ended July 31, 2020 and 2019, respectively, that is included in accrued expenses in the accompanying consolidated balance sheets. At 2019 (in thousands) Convertible Note: Principal value of 6% convertible note at July 31, 2019, due November 15, 2021 $ 15,000 Debt discount (54 ) Total long-term carrying value of convertible note $ 14,946 In August 2019, the note including interest of approximately $667,000 was converted into 1,849,749 shares of common stock. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jul. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS The Company has historically maintained an intercompany balance due to/from related parties that relates to cash advances for investments, loan repayments, charges for services provided to the Company by IDT and payroll costs for the Company’s personnel that were paid by IDT. This is partially offset by rental income paid to the Company by various companies under common control to IDT. The Company recorded expense of approximately $309,000 in related party services to IDT, of which approximately $29,000 is included in accounts payable at June 31, 2020. IDT leases approximately 80,000 square feet of office space plus parking occupied by IDT at 520 Broad Street, Newark, NJ and approximately 3,600 square feet of office space in Jerusalem, Israel. IDT paid the Company approximately $1.8 million for office rent and parking during fiscal 2020 and 2019. As of July 31, 2020 and 2019, IDT owed the Company approximately $0 and $9,000, respectively, for office rent and parking. The Company provides Rafael Pharmaceuticals with administrative, finance, accounting, tax and legal services. Howard S. Jonas serves as a Chairman of the Board of Rafael Pharmaceuticals and owns an equity interest in Rafael Pharmaceuticals. The Company billed Rafael Pharmaceuticals $480,000 during fiscal 2020 and 2019. As of July 31, 2020 and 2019, Rafael Pharmaceuticals owed the Company $120,000 and $280,000, respectively, included in due from related parties. In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8 million shares of Rafael Pharmaceutical’s Series D Convertible Preferred Stock for $10 million representing approximately 8% of the equity on a fully-diluted basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10 million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee director of the Company. The remainder of the Warrant is held by Pharma Holdings. On November 5, 2018, Pharma Holdings, LLC partially exercised a warrant to purchase 4 million shares of Rafael Pharmaceutical’s Series D Convertible Preferred Stock for $5 million, of which $500,000 was contributed by Howard Jonas. On November 15, 2018, Howard Jonas entered into an agreement to purchase a convertible note from the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2019 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the year ended July 31, 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock. On January 10, 2019, Pharma Holdings partially exercised a warrant to purchase 5.1 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $6.4 million, of which $640,000 was contributed by Howard Jonas. On January 23, 2019, Pharma Holdings partially exercised a warrant to purchase 36.3 million shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals for $34.4 million, of which $3.4 million was contributed by Howard Jonas. On January 29, 2020, in connection with the vesting of certain restricted shares of Class B common stock held by an officer of the Company, the Company withheld 5,238 shares to pay for the payroll taxes on the officer’s behalf, totaling approximately $116,000. The Company leases space to related parties which represented approximately 52% and 53% of the Company’s total revenue for the years ended July 31, 2020 and 2019, respectively. See Note 14 for future minimum rent payments from related parties and other tenants. On April 6, 2020, the Howard S. Jonas 2017 Annuity Trust transferred 787,163 shares of Class A common stock of the Company (representing all of the issued and outstanding shares of the Class A common stock) and 4,306,738 shares of the Company’s Class B common stock to trusts for the benefit of eight of Howard Jonas’ children, with independent trustees, which shares were beneficially owned by Mr. Jonas, the Company’s Chairman and then controlling stockholder of the Company. Following the transfer, Mr. Jonas is no longer a controlling stockholder of the Company and the Company is no longer a controlled company as defined in Section 303A of the New York Stock Exchange Listed Company Manual. The Company acquired membership interest in Altira, a related party (see Note 3). The Company has recognized approximately $192 thousand and $0 in income from it’s ownership interests of 37.5% in RP Finance for the years ended July 31, 2020 and 2019, respectively (see Note 4). |
Leases
Leases | 12 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
LEASES | NOTE 14 – LEASES The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029. Lease income included on the consolidated statements of operations and comprehensive loss for the years ended July 31, 2020 and 2019 was $3.6 million. The future contractual minimum lease payments to be received (excluding operating expense reimbursements) by the Company as of July 31, 2020, under non-cancellable operating leases which expire on various dates through 2028 are as follows: Year ending July 31, Related Parties Other Total (in thousands) 2021 $ 2,041 $ 816 $ 2,857 2022 2,078 777 2,855 2023 2,117 592 2,709 2024 2,155 538 2,693 2025 1,659 550 2,209 Thereafter — 1,948 1,948 Total Minimum Future Rental Income $ 10,050 $ 5,221 $ 15,271 Related parties represented approximately 52% and 53% of the Company’s total revenue for the years ended July 31, 2020 and 2019, respectively. The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel. The annual rent is approximately $2.0 million in the aggregate. The related parties have the right to terminate the domestic 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. A related party has the right to terminate the Israeli lease upon four months’ notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | NOTE 15 – 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 CEO and chief operating decision-maker. 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 Pharmaceuticals segment based primarily on research and development efforts and results of clinical trials and the Real Estate segment based primarily on results of operations. All investments in Rafael Pharmaceuticals and assets and expenses associated with LipoMedix and Barer are tracked separately in the Pharmaceuticals segment. All corporate costs are allocated to the Real Estate segment. The Pharmaceuticals segment is comprised of preferred and common equity interests and the Warrant to purchase equity interests in Rafael Pharmaceuticals, a majority equity interest in LipoMedix and Barer. To date, the Pharmaceuticals segment has not generated any revenues. The Real Estate segment consists of the Company’s real estate holdings, including a building at 520 Broad Street in Newark, New Jersey that houses headquarters for the Company and certain affiliates and its associated public garage, an office/data center building in Piscataway, New Jersey (See Note 18) and a portion of an office building in Israel. Operating results for the business segments of the Company are as follows: (in thousands) Pharmaceuticals Real Estate Total At Year Ended July 31, 2020 Revenues $ — $ 4,910 $ 4,910 Loss from operations (2,811 ) (5,654 ) (8,465 ) At Year Ended July 31, 2019 Revenues $ — $ 4,931 $ 4,931 Loss from operations (1,613 ) (5,083 ) (6,696 ) Geographic Information Revenues from tenants 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): Year Ended July 31, 2020 2019 Revenue from tenants located in Israel 6 % 3 % Net long-lived assets and total assets held outside of the United States, which are located in Israel, were as follows: (in thousands) United States Israel Total July 31, 2020 Long-lived assets, net $ 42,840 $ 1,593 $ 44,433 Total assets 132,286 4,061 136,347 July 31, 2019 Long-lived assets, net $ 47,096 $ 1,637 $ 48,733 Total assets 138,535 3,608 142,143 |
Equity
Equity | 12 Months Ended |
Jul. 31, 2020 | |
Equity [Abstract] | |
EQUITY | NOTE 16 – EQUITY Class A Common Stock and Class B Common Stock The rights of holders of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. The holders of Class A common stock and Class B common stock receive identical dividends per share when and if declared by the Company’s Board of Directors. In addition, the holders of Class A common stock and Class B common stock have identical and equal priority rights per share in liquidation. The Class A common stock and Class B common stock do not have any other contractual participation rights. The holders of Class A common stock are entitled to three votes per share and the holders of Class B common stock are entitled to one-tenth of a vote per share. Each share of Class A common stock may be converted into one share of Class B common stock, at any time, at the option of the holder. Shares of Class A common stock are subject to certain limitations on transferability that do not apply to shares of Class B common stock. Stock-Based Compensation The Rafael Holdings, Inc. 2018 Equity Incentive Plan (the “Plan”) was created and adopted by the Company in March 2018. The Plan allows for the issuance of up to 1,064,048 shares which may be awarded in the form of incentive stock options or restricted shares. In connection with the Spin-Off, options to purchase 626,662 shares of Class B common stock options were issued to IDT employees and service providers related to options to purchase IDT stock held by those individuals. The options have an exercise price of $4.90 per share, which was equal to the closing price of the Company’s Class B common stock on the first trading day following the consummation of the Spin-Off. The expiration date of the options is equal to the later of (i) the expiration of the IDT option held by such option holder and (ii) a date on or about the first anniversary of the Spin-Off when the Company’s insiders will be free to trade in shares of the Company under the Company’s insider trading policy. The options to purchase shares of the Company were issued under the Plan. Option awards to Company employees under the Plan are generally granted with an exercise price equal to the market price of the Company’s stock on the date of grant. Option awards generally vest on a graded basis over five years of service and have 10-year contractual terms. No options were granted in fiscal 2020. In fiscal 2020, options to purchase 6,000 shares of Class B common stock were exercised and 259 options were cancelled. In fiscal 2019, options to purchase 38,710 shares of Class B common stock were exercised and 819 options were cancelled. At July 31, 2020 and 2019, there was no unrecognized compensation cost related to non-vested stock options. A summary of stock option activity for the Company is as follows: Number of Weighted Weighted Aggregate Outstanding at July 31, 2018 626,662 $ 4.90 4.72 $ 3,071 Granted — — Exercised (38,710 ) 4.90 Cancelled / Forfeited (819 ) 4.90 Outstanding at July 31, 2019 587,133 $ 4.90 3.66 $ 2,877 Granted — — Exercised (6,000 ) 4.90 Cancelled / Forfeited (259 ) 4.90 OUTSTANDING AT JULY 31, 2020 580,874 $ 4.90 2.65 $ 2,846 EXERCISABLE AT JULY 31, 2020 580,874 $ 4.90 2.65 $ 2,846 Restricted Stock Units The fair value of restricted shares of the Company’s Class B common stock is determined based on the closing price of the Company’s Class B common stock on the grant date. Share awards generally vest on a graded basis over three years of service. As part of the Spin-Off, holders of restricted Class B common stock of IDT received, in respect of those restricted shares, one restricted share of the Company’s Class B common stock for every two restricted shares of IDT that they held as of the record date for the Spin-Off. The Company issued an aggregate of 92,690 restricted shares of its Class B common stock to the holders of restricted Class B common stock of IDT. Such shares of the Company’s Class B common stock are restricted under the same terms as the IDT restricted stock in respect of which they were issued. The restricted shares of the Company’s Class B common stock received in the Spin-Off are subject to forfeiture on the same terms, and their restrictions will lapse at the same time, as the corresponding IDT shares. On March 28, 2018, the Company granted employees and consultants 76,445 restricted shares of Class B Common Stock, which vested or will vest as to one-third of the granted shares on each of March 28, 2019, 2020 and 2021, unless otherwise determined by the Compensation Committee of the Company’s Board of Directors. The aggregate fair value of the grant was approximately $375,000, which is being charged to expense on a straight-line basis as the shares vest. During fiscal 2020 and 2019, the Company granted employees and consultants 24,071 and 74,637 restricted shares of Class B Common Stock, respectively, which will vest over approximately three years. The aggregate fair value of the grants in fiscal 2020 and 2019 was approximately $478 thousand and $1.3 million, respectively, which is being charged to expense on a straight-line basis as the shares vest. A summary of the status of the Company’s grants of restricted shares of Class B common stock is presented below: Number of Weighted Outstanding at July 31, 2018 141,799 $ 4.90 Granted 74,637 16.49 Vested (60,010 ) 4.96 Cancelled / Forfeited — — Outstanding at July 31, 2019 156,426 $ 10.41 Granted 24,071 19.87 Vested (57,060 ) (8.17 ) Cancelled / Forfeited (333 ) (4.90 ) NON-VESTED SHARES AT JULY 31, 2020 123,104 $ 10.80 At July 31, 2020, there was $1.3 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 2.35 years. The total grant date fair value of shares vested in fiscal 2020 and fiscal 2019 was approximately $466,000 and $298,000, respectively. Approval of Sale of Shares of Class B Common Stock to Howard S. Jonas On April 26, 2018, the Corporate Governance Committee authorized, approved and confirmed an underlying Related Person Transaction involving Howard Jonas with respect to the Company’s proposed sale to Mr. Jonas of 1,254,200 shares of the Company’s Class B common stock at a price per share of $6.89, which was the closing price for the Class B common stock on the NYSE on April 26, 2018 (the last closing price before approval of the arrangement) for an aggregate purchase price of $8,641,438, the purchase price of which would be reduced by the amount of any dividends whose record date is between the date hereof and the issuance of the shares (the “Sale”). The Sale took place on January 18, 2019, following stockholder approval on January 10, 2019. Grant to Board of Directors Pursuant to the Company’s 2018 Equity Incentive Plan, each of our three non-employee directors of the Company was granted 4,203 restricted shares of our Class B common stock in January 2019 which fully vested on the date of the grant. The fair value of the awards on the date of the grant was approximately $107,000, which was included in selling, general and administrative expense. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | NOTE 17 – LOSS PER SHARE Basic net loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per shares includes potentially dilutive securities such as stock options and other convertible instruments. For the years ended July 31, 2020 and 2019, these securities have been excluded from the calculation of diluted net loss per shares because all such securities are anti-dilutive for all periods presented. The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: At July 31, 2020 2019 Stock Options 580,874 587,133 Convertible Note — 1,847,594 Total 580,874 2,434,727 In the years ended July 31, 2020 and 2019, the diluted loss per share computation equals basic loss per share because the Company had a net loss and the impact of the assumed exercise of stock options and conversion of the convertible note would have been anti-dilutive. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jul. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS Farber Partners, a Delaware LLC, was formed on August 18, 2020 to partner with Drs. Josh Rabinowitz and Hahn Kim, renowned scientists from a top institution to develop inhibitors of cancer and disease metabolism. Levco Pharmaceuticals Ltd, an Israeli company, was formed on August 27, 2020 and established to partner with Dr. Alberto Gabizon and a top institution in Israel on the development of novel compounds for cancer. On August 28, 2020, pursuant to an agreement entered into on July 6, 2020, a subsidiary of the Company sold a 3-story, 65,253 square foot office building located at 225 Old New Brunswick Road in Piscataway, New Jersey to 225 ONBR, LLC, an entity unaffiliated with the Company. The purchase price was $3,875,000 and, after transfer taxes and broker’s commission, the Company received $3,675,638 in cash. As of July 31, 2020, the building was presented as held for sale on the consolidated balance sheet. In August 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount $5 million, in August 2020 and September 2020. The Company funded $1,875,000 in accordance with its 37.5% ownership interests in RP Finance. In October 2020, the Company liquidated $2,000,000 of the Company’s investments in Hedge Funds. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Rafael Holdings, Inc. (“Rafael Holdings” or the “Company”), a Delaware corporation, owns interests in pre-clinical and clinical stage pharmaceutical companies and commercial real estate assets. The assets are operated as two separate lines of business. The pharmaceutical holdings include preferred and common equity interests and a warrant to purchase additional equity interests in Rafael Pharmaceuticals, Inc., or Rafael Pharmaceuticals, which 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; and, a majority equity interest in LipoMedix Pharmaceuticals Ltd., or LipoMedix, a clinical stage oncological pharmaceutical company based in Israel. In addition, in 2019, we established the Barer Institute (“Barer”), a wholly-owned early stage venture focused on developing a pipeline of therapeutic compounds, including compounds to regulate cancer metabolism. The venture is pursuing collaborative research agreements with leading scientists from top academic institutions to develop other early stage ventures. In addition, we have recently initiated efforts to develop other early stage pharmaceutical ventures. The commercial real estate holdings consist of a building at 520 Broad Street in Newark, New Jersey that serves as headquarters for the Company and certain other entities and hosts other tenants and an associated 800-car public garage, an office/data center building in Piscataway, New Jersey (see Note 18 for subsequent event) and a portion of a building in Israel. On March 26, 2018, IDT Corporation, or IDT, the former parent corporation of the Company, completed a tax-free spinoff (the “Spin-Off”) of the Company’s capital stock, through a pro rata distribution of common stock to its stockholders of record as of the close of business on March 13, 2018. (See Note 13 for additional information on related party transactions.) |
Basis of Presentation | Basis of Presentation The “Company” in these consolidated financial statements refers to Rafael Holdings on a consolidated basis. All significant intercompany accounts and transactions have been eliminated in consolidation. 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 2020 refers to the fiscal year ended July 31, 2020). The accompanying consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All majority-owned subsidiaries are consolidated with all intercompany transactions and balances being eliminated in consolidation or combination. The entities included in these consolidated financial statements are as follows: Company Country of Incorporation Percentage Rafael Holdings, Inc. United States – Delaware 100 % Broad Atlantic Associates, LLC United States – Delaware 100 % IDT 225 Old NB Road, LLC United States – Delaware 100 % IDT R.E. Holdings Ltd. Israel 100 % Rafael Holdings Realty, Inc. United States – Delaware 100 % Barer Institute, Inc. United States – Delaware 100 % The Barer Institute, LLC United States – Delaware 100 % Hillview Avenue Realty, JV United States – Delaware 100 % Hillview Avenue Realty, LLC United States – Delaware 100 % Pharma Holdings, LLC United States – Delaware 90 % CS Pharma Holdings, LLC United States – Delaware 45 %* LipoMedix Pharmaceuticals Ltd. Israel 67 % * 50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. |
Risks and Uncertainties - COVID-19 | Risks and Uncertainties - COVID-19 In December 2019, a new coronavirus, now known as COVID-19, which has proved to be highly contagious, emerged in Wuhan, China and has since spread around the globe. The Company actively monitors the outbreak and its potential impact on its operations and those of the Company’s holdings. Although the Company’s operations are mainly in the United States, the Company has assets outside of the United States, and some of the Company’s pharmaceutical holdings conduct operations, manufacturing and clinical trial activities in Europe and Asia. The impacts on the operations and specifically the ongoing clinical trials of our pharmaceutical holdings have been actively managed by respective pharmaceutical management teams who have worked closely with the appropriate regulatory agencies to continue clinical trial activities with as minimal impact as possible including receiving waivers for certain clinical trial activities from the respective regulatory agencies to continue the studies. The Company has granted a rent concession to two of its retail tenants during the month of April. Additionally, one tenant has not paid rent in June and July 2020 due to the New Jersey state gym closures; however, the Company does not believe this is recurring and believes that the rental revenues will materially continue as the tenant has resumed paying original contractual rent payments. There is a general degree of uncertainty in the national commercial real estate market based on the COVID-19 pandemic and as a result there is a potential impact to the value of our real estate portfolio. The Company has implemented a number of measures to protect the health and safety of our workforce including a mandatory work-from-home policy for our workforce who can perform their jobs from home as well as restrictions on business travel and workplace and in-person meetings. Due to both known and unknown risks, including quarantines, closures and other restrictions resulting from the outbreak, operations and those of the Company’s holdings may be adversely impacted. Additionally, as there is an evolving nature to the COVID-19 situation, we cannot reasonably assess or predict at this time the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The impact will depend on future developments such as the ultimate duration and the severity of the spread of the COVID-19 pandemic in the U.S. and globally, the effectiveness of federal, state, local and foreign government actions on mitigation and spread of COVID-19, the pandemic's impact on the U.S. and global economies, changes in our customers' behavior emanating from the pandemic and how quickly we can resume our normal operations, among others. For all these reasons, the Company may incur expenses or delays relating to such events outside of the Company’s control, which could have a material adverse impact on the Company’s business. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
Concentration of Credit Risk and Significant Customers | Concentration of Credit Risk and Significant Customers The Company routinely assesses the financial strength of its customers. As a result, the Company believes that its accounts receivable credit risk exposure is limited. For the year ended July 31, 2020, related parties represented 52% of the Company’s revenue, respectively, and as of July 31, 2020, five customers represented 11%, 10%, 10%, 5%, and 4% of the Company’s accounts receivable balance, respectively. For the year ended July 31, 2019, related parties and one other customer represented 53%, and 10% of the Company’s revenue, respectively, and as of July 31, 2019, five customers represented 38%, 17%, 16%, 12%, and 7% of the Company’s accounts receivable balance, respectively. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The allowance is determined based on known troubled accounts, historical experience and other currently available evidence. Doubtful accounts are written off upon final determination that the trade accounts will not be collected. The computation of this allowance is based on the tenants’ or parking customers’ payment histories and current credit statuses, as well as certain industry or geographic specific credit considerations. If the Company’s estimates of collectability differ from the cash received, then the timing and amount of the Company’s reported revenue could be impacted. The credit risk is mitigated by the high quality of the Company’s existing tenant base, inclusive of related parties, which represented 52% and 53% of the Company’s total revenue for the years ended July 31, 2020 and 2019, respectively. The Company recorded bad debt expense of approximately $96,000 and $40,000 for the years ended July 31, 2020 and 2019, respectively. |
Investments | Investments The method of accounting applied to long-term investments, whether consolidated, equity or cost, involves an evaluation of the significant terms of each investment that explicitly grant or suggest evidence of control or influence over the operations of the investee and also includes the identification of any variable interests in which the Company is the primary beneficiary. The consolidated financial statements include the Company’s controlled affiliates. All significant intercompany accounts and transactions between the consolidated affiliates are eliminated. Investments in businesses that the Company does not control, but in which the Company has the ability to exercise significant influence over operating and financial matters, are accounted for using the equity method. Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for using the cost method. The Company periodically evaluates its investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded in the accompanying consolidated statements of operations and comprehensive loss, and a new basis in the investment is established. |
Variable Interest Entities | Variable Interest Entities In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation If an entity is determined to be a VIE, the Company evaluates whether the Company is the primary beneficiary. The primary beneficiary analysis is a qualitative analysis based on power and economics. The Company consolidates a VIE if both power and benefits belong to the Company – that is, the Company (i) has the power to direct the activities of a VIE that most significantly influence the VIE’s economic performance (power), and (ii) has the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE (benefits). The Company consolidates VIEs whenever it is determined that the Company is the primary beneficiary. Cost Method Investments Equity Method Investments |
Long-Lived Assets | Long-Lived Assets Equipment, buildings, leasehold improvements, and furniture and fixtures are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives, which range as follows: Classification Years Building and improvements 40 Tenant improvements 7-15 Other (primarily equipment and furniture and fixtures) 5 The Company tests the recoverability of its long-lived assets with finite useful lives whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. The Company tests for recoverability based on the projected undiscounted cash flows to be derived from such asset. If the projected undiscounted future cash flows are less than the carrying value of the asset, the Company will record an impairment loss, if any, based on the difference between the estimated fair value and the carrying value of the asset. The Company generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Cash flow projections and fair value estimates require significant estimates and assumptions by management. Should the estimates and assumptions prove to be incorrect, the Company may be required to record impairments in future periods and such impairments could be material. |
Properties | Properties The Company owns commercial real estate located at 520 Broad Street in Newark, New Jersey, 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 (see Note 18 for subsequent event). Additionally, the Company owns a portion of the 6th floor of a building located at 5 Shlomo Halevi Street, Har Hotzvim, in Jerusalem, Israel. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss. As an owner and operator of real estate, the Company derives the majority of its revenue from leasing office and parking space to tenants at its properties. In addition, the Company earns revenue from recoveries from tenants, consisting of amounts due from tenants for common area maintenance, real estate taxes and other recoverable costs. Revenue from recoveries from tenants is recorded together with rental income on the consolidated statements of operations and comprehensive loss which is also consistent with the guidance under ASC 842, Leases Contractual rental revenue is reported on a straight-line basis over the terms of the respective leases. Accrued rental income, included within other assets on the consolidated balance sheets, represents cumulative rental income earned in excess of rent payments received pursuant to the terms of the individual lease agreements. The Company also earns revenue from parking which is derived primarily from monthly and transient daily parking. The monthly and transient daily parking revenue falls within the scope of ASC 606 and is accounted for at the point in time when control of the goods or services transfers to the customer and the Company’s performance obligation is satisfied, consistent with the Company’s previous accounting. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of tenants to make required rent payments or parking customers to pay amounts due. |
Research and Development Costs | Research and Development Costs Research and development costs and expenses consist primarily of salaries and related personnel expenses, stock-based compensation, fees paid to external service providers, laboratory supplies, costs for facilities and equipment, license costs, and other costs for research and development activities. Research and development expenses are recorded in operating expenses in the period in which they are incurred. Estimates have been used in determining the liability for certain costs where services have been performed but not yet invoiced. The Company monitors levels of performance under each significant contract for external service providers, including the extent of patient enrollment and other activities through communications with the service providers to reflect the actual amount expended. Contingent milestone payments associated with acquiring rights to intellectual property are recognized when probable and estimable. These amounts are expensed to research and development when there is no alternative future use associated with the intellectual property. |
Repairs and Maintenance | Repairs and Maintenance The Company charges the cost of repairs and maintenance, including the cost of replacing minor items not constituting substantial betterment, to selling, general and administrative expenses as these costs are incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation using the provisions of ASC 718, Stock Based Compensation |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the period in which related temporary differences become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in its assessment of a valuation allowance. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date of such change. The Company uses a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return. The Company determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the Company presumes that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. Tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of tax benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Differences between tax positions taken in a tax return and amounts recognized in the financial statements will generally result in one or more of the following: an increase in a liability for income taxes payable, a reduction of an income tax refund receivable, a reduction in a deferred tax asset, or an increase in a deferred tax liability. The Company classifies interest and penalties on income taxes as a component of income tax expense, if any. |
Contingencies | Contingencies The Company accrues for loss contingencies when both (a) information available prior to issuance of the financial statements indicates that it is probable that a liability had been incurred at the date of the financial statements and (b) the amount of loss can reasonably be estimated. When the Company accrues for loss contingencies and the reasonable estimate of the loss is within a range, the Company records its best estimate within the range. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company discloses an estimated possible loss or a range of loss when it is at least reasonably possible that a loss may have been incurred. |
Fair Value Measurements | Fair Value Measurements Fair value of financial and non-financial assets and liabilities is defined as an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs to valuation techniques used to measure fair value, is as follows: Level 1 Level 2 Level 3 A financial asset’s or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. |
Functional Currency | Functional Currency The U.S. Dollar is the functional currency of our entities operating in the United States. The functional currency for our subsidiary operating outside of the United States is the New Israeli Shekel, the currency of the primary economic environment in which the subsidiary primarily expends cash. The Company translates that subsidiary’s financial statements into U.S. Dollars. The Company translates assets and liabilities at the exchange rate in effect as of the consolidated financial statement date, and translates accounts from the statements of operations and comprehensive loss using the weighted average exchange rate for the period. The Company reports gains and losses from currency exchange rate changes related to intercompany receivables and payables, currently in non-operating expenses. |
Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted loss per share is determined in the same manner as basic loss per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase would be anti-dilutive. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements The FASB issued ASU 2016-02, Leases The Company initially adopted the new lease accounting standard as of August 1, 2019 and elected the optional transition method to apply the new standard prospectively. The Company elected the package of transition practical expedients and, therefore, did not reassess: (1) whether any expired or existing contracts are or contain leases; (2) lease classification for any expired or existing leases; and (3) initial direct costs for any existing leases. Further, as of July 31, 2020, the Company was not a lessee under any leasing arrangements, which had, and will have, the following impacts on the Company: Topic 842 changed certain requirements regarding the classification of leases that could result in the Company recognizing certain long-term leases entered into or modified after August 1, 2019 as sales-type leases, as opposed to operating leases. The Company did not have a cumulative-effect adjustment as of the adoption date. The Company elected the practical expedient to not separate certain non-lease components from the lease component to which they relate because the timing and pattern of transfer for the lease components and non-lease components are the same and the related lease component is classified as an operating lease. As a result, the Company continues to present all rentals and reimbursements from tenants as a single line item rental income within the consolidated statements of operations and comprehensive loss. No reclassifications to prior periods for comparability were required. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities Accumulated Accumulated (in thousands) Balance at July 31, 2018 $ 4,043 $ (1,108 ) Impact from adoption of ASU 2016-01 39 (39 ) Balance at August 1, 2018 $ 4,082 $ (1,147 ) |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of entities majority-owned subsidiaries | Company Country of Incorporation Percentage Rafael Holdings, Inc. United States – Delaware 100 % Broad Atlantic Associates, LLC United States – Delaware 100 % IDT 225 Old NB Road, LLC United States – Delaware 100 % IDT R.E. Holdings Ltd. Israel 100 % Rafael Holdings Realty, Inc. United States – Delaware 100 % Barer Institute, Inc. United States – Delaware 100 % The Barer Institute, LLC United States – Delaware 100 % Hillview Avenue Realty, JV United States – Delaware 100 % Hillview Avenue Realty, LLC United States – Delaware 100 % Pharma Holdings, LLC United States – Delaware 90 % CS Pharma Holdings, LLC United States – Delaware 45 %* LipoMedix Pharmaceuticals Ltd. Israel 67 % |
Schedule of estimated usefull lives | Classification Years Building and improvements 40 Tenant improvements 7-15 Other (primarily equipment and furniture and fixtures) 5 |
Schedule of accumulated other comprehensive income | Accumulated Accumulated (in thousands) Balance at July 31, 2018 $ 4,043 $ (1,108 ) Impact from adoption of ASU 2016-01 39 (39 ) Balance at August 1, 2018 $ 4,082 $ (1,147 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of balance of assets measured at fair value on a recurring basis | At July 31, 2020 Level 1 Level 2 Level 3 Total (in thousands) Assets: Hedge Funds $ — $ — $ 7,510 $ 7,510 Total $ — $ — $ 7,510 $ 7,510 July 31, 2019 Level 1 Level 2 Level 3 Total (in thousands) Assets: Hedge Funds $ — $ — $ 5,125 $ 5,125 Total $ — $ — $ 5,125 $ 5,125 |
Schedule of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | At July 31, 2020 2019 (in thousands) Balance, beginning of period $ 5,125 $ 12,118 Conversion of Series D Convertible Note — (7,900 ) Total gain included in earnings 2,385 907 Balance, end of period $ 7,510 $ 5,125 |
Trade Accounts Receivable (Tabl
Trade Accounts Receivable (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Receivables [Abstract] | |
Schedule of trade accounts receivable | July 31, 2020 2019 (in thousands) Trade Accounts Receivable $ 364 $ 561 Accounts Receivable - Related Party 121 11 Less Allowance for Doubtful Accounts (218 ) (122 ) Trade Accounts Receivable, net $ 267 $ 450 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | At July 31, 2020 2019 (in thousands) Building and Improvements $ 47,591 $ 54,241 Land 10,412 10,412 Furniture and Fixtures 1,145 1,145 Other 256 255 59,404 66,053 Less Accumulated Depreciation (14,971 ) (17,320 ) Total $ 44,433 $ 48,733 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (loss) before income taxes | For the Year Ended July 31, 2020 2019 (in thousands) Domestic $ (10,239 ) $ (3,410 ) Foreign (704 ) (1,533 ) Loss before income taxes $ (10,943 ) $ (4,943 ) |
Schedule of provision for income taxes | For the Year Ended July 31, 2020 2019 (in thousands) Current: Foreign $ (2 ) $ — Federal (9 ) — State — — Total current expense (11 ) — Deferred: Foreign (18 ) 19 Federal — — State — — Total deferred expense (18 ) 19 (Provision for) benefit from income taxes $ (29 ) $ 19 |
Schedule of differences between income taxes | At July 31, 2020 2019 (in thousands) U.S. federal income tax at statutory rate $ 2,298 $ 908 State income tax 662 172 Valuation allowance (3,007 ) 30 Foreign tax rate differential 11 24 Tax law change — — Permanent differences (2 ) (102 ) Rate Change — (1,030 ) Other 9 17 (Provision for) benefit from income taxes $ (29 ) $ 19 |
Schedule of deferred tax assets and deferred tax liabilities | At July 31, 2020 2019 (in thousands) Deferred tax assets: Net operating loss carryforwards $ 8,395 $ 5,316 AMT carryforwards 2,660 2,692 Reserves and accruals 61 34 Stock-based compensation 312 119 Gross deferred tax assets 11,428 8,161 Less valuation allowance (11,422 ) (8,142 ) Total deferred tax assets 6 19 Total deferred tax liabilities — — Deferred tax assets, net $ 6 $ 19 |
Convertible Note (Tables)
Convertible Note (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term carrying value of convertible note | At 2019 (in thousands) Convertible Note: Principal value of 6% convertible note at July 31, 2019, due November 15, 2021 $ 15,000 Debt discount (54 ) Total long-term carrying value of convertible note $ 14,946 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Leases [Abstract] | |
Schedule of contractual minimum lease payments | Year ending July 31, Related Parties Other Total (in thousands) 2021 $ 2,041 $ 816 $ 2,857 2022 2,078 777 2,855 2023 2,117 592 2,709 2024 2,155 538 2,693 2025 1,659 550 2,209 Thereafter — 1,948 1,948 Total Minimum Future Rental Income $ 10,050 $ 5,221 $ 15,271 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of operating results for the business segments | (in thousands) Pharmaceuticals Real Estate Total At Year Ended July 31, 2020 Revenues $ — $ 4,910 $ 4,910 Loss from operations (2,811 ) (5,654 ) (8,465 ) At Year Ended July 31, 2019 Revenues $ — $ 4,931 $ 4,931 Loss from operations (1,613 ) (5,083 ) (6,696 ) |
Schedule of revenue from tenants by geographic areas | Year Ended July 31, 2020 2019 Revenue from tenants located in Israel 6 % 3 % |
Schedule of net long-lived assets and total assets by geographic areas | (in thousands) United States Israel Total July 31, 2020 Long-lived assets, net $ 42,840 $ 1,593 $ 44,433 Total assets 132,286 4,061 136,347 July 31, 2019 Long-lived assets, net $ 47,096 $ 1,637 $ 48,733 Total assets 138,535 3,608 142,143 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Equity [Abstract] | |
Schedule of stock option activity | Number of Weighted Weighted Aggregate Outstanding at July 31, 2018 626,662 $ 4.90 4.72 $ 3,071 Granted — — Exercised (38,710 ) 4.90 Cancelled / Forfeited (819 ) 4.90 Outstanding at July 31, 2019 587,133 $ 4.90 3.66 $ 2,877 Granted — — Exercised (6,000 ) 4.90 Cancelled / Forfeited (259 ) 4.90 OUTSTANDING AT JULY 31, 2020 580,874 $ 4.90 2.65 $ 2,846 EXERCISABLE AT JULY 31, 2020 580,874 $ 4.90 2.65 $ 2,846 |
Schedule of grants of restricted shares of Class B common stock | Number of Weighted Outstanding at July 31, 2018 141,799 $ 4.90 Granted 74,637 16.49 Vested (60,010 ) 4.96 Cancelled / Forfeited — — Outstanding at July 31, 2019 156,426 $ 10.41 Granted 24,071 19.87 Vested (57,060 ) (8.17 ) Cancelled / Forfeited (333 ) (4.90 ) NON-VESTED SHARES AT JULY 31, 2020 123,104 $ 10.80 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Jul. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of common share equivalents, basic and dilutive loss per share | At July 31, 2020 2019 Stock Options 580,874 587,133 Convertible Note — 1,847,594 Total 580,874 2,434,727 |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Jul. 31, 2020 | Jul. 31, 2019 | Aug. 01, 2018 | |
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Percentage owned | 50.00% | ||
Interest percentage | 45.00% | ||
Concentration description | As a result, the Company believes that its accounts receivable credit risk exposure is limited. For the year ended July 31, 2020, related parties represented 52% of the Company’s revenue, respectively, and as of July 31, 2020, five customers represented 11%, 10%, 10%, 5%, and 4% of the Company’s accounts receivable balance, respectively. For the year ended July 31, 2019, related parties and one other customer represented 53%, and 10% of the Company’s revenue, respectively, and as of July 31, 2019, five customers represented 38%, 17%, 16%, 12%, and 7% of the Company’s accounts receivable balance, respectively. | ||
Concentration risk percentage | 6.00% | 3.00% | |
Debt expenses (in Dollars) | $ 96,000 | $ 40,000 | |
Unrealized loss on equity (in Dollars) | $ 39,000 | ||
Revenue [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Deferred Tax Asset [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 50.00% | ||
Pharma Holdings, LLC [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Percentage owned | 90.00% | ||
Related Parties [Member] | Revenue [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 52.00% | 53.00% | |
Customer One [Member] | Accounts Receivable [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 11.00% | 38.00% | |
Customer Two [Member] | Accounts Receivable [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 10.00% | 17.00% | |
Customer Three [Member] | Accounts Receivable [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 10.00% | 16.00% | |
Customer four [Member] | Accounts Receivable [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 5.00% | 12.00% | |
Customer five [Member] | Accounts Receivable [Member] | |||
Description of Business and Summary of Significant Accounting Policies (Details) [Line Items] | |||
Concentration risk percentage | 4.00% | 7.00% |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries | 12 Months Ended | |
Jul. 31, 2020 | ||
Rafael Holdings, Inc. [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
Broad Atlantic Associates, LLC [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
IDT 225 Old NB Road, LLC [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
IDT R.E. Holdings Ltd. [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | Israel | |
Percentage Owned | 100.00% | |
Rafael Holdings Realty, Inc. [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
Barer Institute, Inc. [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
The Barer Institute, LLC [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
Hillview Avenue Realty, JV [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
Hillview Avenue Realty, LLC [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 100.00% | |
Pharma Holdings, LLC [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 90.00% | |
CS Pharma Holdings, LLC [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | United States - Delaware | |
Percentage Owned | 45.00% | [1] |
LipoMedix Pharmaceuticals Ltd. [Member] | ||
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of entities majority-owned subsidiaries [Line Items] | ||
Country of Incorporation | Israel | |
Percentage Owned | 67.00% | |
[1] | 50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership in Pharma Holdings, LLC and, therefore, an effective 45% interest in CS Pharma Holdings, LLC. |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of estimated useful lives | 12 Months Ended |
Jul. 31, 2020 | |
Building and improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 40 years |
Tenant improvements [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 7 years |
Tenant improvements [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 15 years |
Other (primarily equipment and furniture and fixtures) [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies (Details) - Schedule of accumulated other comprehensive income $ in Thousands | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Accumulated Other Comprehensive Income [Member] | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |
Beginning Balance | $ 4,043 |
Impact from adoption of ASU 2016-01 | 39 |
Ending Balance | 4,082 |
Accumulated Deficit [Member] | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |
Beginning Balance | (1,108) |
Impact from adoption of ASU 2016-01 | (39) |
Ending Balance | $ (1,147) |
Investment in Rafael Pharmace_2
Investment in Rafael Pharmaceuticals (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 12 Months Ended |
Jan. 31, 2019 | Jul. 31, 2020 | |
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Ownership percentage in non-operating subsidiary | 50.00% | |
Principal amount (in Dollars) | $ 10 | |
Convertible promissory note, rate of interest | 3.50% | |
Pharma Holdings [Member] | ||
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Ownership percentage in non-operating subsidiary | 90.00% | |
Howard Jonas [Member] | ||
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Fully diluted | 10.00% | |
Howard Jonas [Member] | Rafael Pharmaceuticals [Member] | ||
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Fully diluted | 10.00% | |
Rafael Pharmaceuticals [Member] | ||
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Ownership percentage in non-operating subsidiary | 90.00% | |
Ownership percentage in subsidiary and holds percentage of interest | 50.00% | |
Indirect interest in assets held, percentage | 45.00% | |
IDT-Rafael Holdings, LLC. [Member] | ||
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Exercise price of warrants or rights, description | The Company currently own 51% of the issued and outstanding equity in Rafael Pharmaceuticals. Approximately 8% of the issued and outstanding equity is owned by the Company’s subsidiary CS Pharma and 42% is held by the Company’s subsidiary Pharma Holdings. The Company’s subsidiary Pharma Holdings holds a non-dilutive option to increase the Company’s total ownership to 56%. Based on the current shares issued and outstanding of Rafael Pharmaceuticals as of July 31, 2020, the Company, and the Company’s affiliates, would need to pay approximately $16 million to exercise the Warrant in full. On an as-converted fully diluted basis (for all convertible securities of Rafael Pharmaceuticals outstanding), the Company, and the Company’s affiliates would need to pay approximately $104 million to exercise the Warrant in full including additional issuances under the Line of Credit. Howard Jonas holds 10% of the interest in Pharma Holdings and would need to contribute 10% of any cash necessary to exercise any portion of the Warrant. | |
Fully diluted | 51.00% | |
Bonus shares | 37.00% | |
Series D Convertible Preferred Stock [Member] | IDT-Rafael Holdings, LLC. [Member] | ||
Investment in Rafael Pharmaceuticals (Details) [Line Items] | ||
Exercise price of warrants or rights, description | Pharma Holdings holds 36.7 million shares of Rafael Pharmaceuticals Series D Convertible Preferred Stock and a warrant to increase ownership to up to 56% of the fully diluted equity interests in Rafael Pharmaceuticals (the “Warrant”). The Warrant is exercisable at the lower of 70% of the price sold in an equity financing, or $1.25 per share | |
Purchase of exercise the warrant, shares (in Shares) | 16.7 | |
Exercise of warrants purchases, description | The Series D Convertible Preferred Stock has a stated value of $1.25 per share (subject to appropriate adjustment to reflect any stock split, combination, reclassification or reorganization of the Series D Preferred Stock or any dilutive issuances, as described below). Holders of Series D Stock are entitled to receive non-cumulative dividends when, as and if declared by the board of Rafael Pharmaceuticals, prior to any dividends to any other class of capital stock of Rafael Pharmaceuticals. In the event of any liquidation, dissolution or winding up of the Company, or in the event of any deemed liquidation, proceeds from such liquidation, dissolution or winding up shall be distributed first to the holders of Series D Stock. Except with respect to certain major decisions, or as required by law, holders of Series D Stock vote together with the holders of the other preferred stock and common stock and not as a separate class. |
Investment in Altira (Details)
Investment in Altira (Details) - Acquired Royalty Rights [Member] - USD ($) | May 13, 2020 | Jul. 31, 2020 |
Investment in Altira (Details) [Line Items] | ||
Investment in acquired description | the Seller sold the economic rights related to a 33.333% membership interest in Altira to the Company and in effect the Company purchased the potential right to receive a 1% royalty on Net Sales (as defined in the Altira Royalty Agreement) on sales of certain Rafael Pharmaceutical products. The purchase consideration for the purchase of the membership interest consists of 1) $1,000,000 payable monthly in four equal installments of $250,000 each; 2) payment of $3,000,000 due on January 3, 2021; 3) $3,000,000 due within fifteen (15) days of the interim data analysis in Rafael Pharmaceutical’s Phase 3 pivotal trial (AVENGER 500®) of CPI-613® (devimistat) which is currently estimated to be on or about October 31, 2020; and 4) payment of $3,000,000 which is due within one-hundred and twenty (120) days from the date that Rafael Pharmaceuticals files a new drug application with the U.S. Food and Drug Administration for approval of devimistat (CPI-613) as a first in-line therapy for pancreatic cancer, as defined within the Purchase Agreement. The post-closing payments are to be made, at the Company’s discretion, in cash or shares of the Company’s Class B common stock based on the ten days average share price of the Company’s Class B common stock prior to the date of payment or any combination thereof. | |
Cost of investments | $ 4,000,000 | |
Contingent consideration | 6,000,000 | |
Investments | 500,000 | |
Investment liability | 3,500,000 | |
Impairment charge | $ 4,000,000 |
Investment in RP Finance, LLC (
Investment in RP Finance, LLC (Details) - USD ($) | Feb. 03, 2020 | Jul. 31, 2020 | Jul. 31, 2019 |
Investment in RP Finance, LLC (Details) [Line Items] | |||
Income from interest | $ 192,000 | $ 0 | |
Percentage of ownership interest | 37.50% | 37.50% | |
Rafael Pharmaceuticals [Member] | |||
Investment in RP Finance, LLC (Details) [Line Items] | |||
Percentage of issued and outstanding shares | 12.00% | ||
Line of Credit Agreement [Member] | |||
Investment in RP Finance, LLC (Details) [Line Items] | |||
Amount of revolving commitment to funds | $ 50,000,000 | ||
Description line of credit facility | The Company owns 37.5% of the equity interests in RP Finance and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. Howard Jonas owns 37.5% of the equity interests in RP Finance, and is required to fund 37.5% of funding requests from Rafael Pharmaceuticals under the Line of Credit Agreement. The remaining 25% equity interests in RP Finance is owned by other shareholders of Rafael Pharmaceuticals. |
Investment in LipoMedix Pharm_2
Investment in LipoMedix Pharmaceuticals Ltd (Details) - USD ($) | Mar. 27, 2020 | May 20, 2020 | Jan. 21, 2020 | Jan. 20, 2020 | Nov. 30, 2019 | Sep. 28, 2019 | Aug. 31, 2019 | Apr. 30, 2019 | Jan. 31, 2018 | Nov. 13, 2019 | Jul. 31, 2018 |
Investment in LipoMedix Pharmaceuticals Ltd (Details) [Line Items] | |||||||||||
Bridge note converted (in Shares) | 1,849,749 | ||||||||||
Interest bridge financing description | the Company provided no-interest bridge financing of $250,000 to LipoMedix (the “2019 Bridge Note”). The 2019 Bridge Note is automatically convertible into shares of LipoMedix as follows: (i) upon an issuance of an aggregate $2.0 million of additional equity securities (excluding the conversion of the Bridge Notes); or (ii) upon a liquidation or dissolution of LipoMedix or a sale of LipoMedix or its assets. If converted, the 2019 Bridge Note will be converted into shares of the most senior class of equity of LipoMedix then issued. If converted upon an equity financing, the 2019 Bridge Note will be converted at a conversion price per share that is equal to 75% of the price paid in the equity offering. If converted upon a liquidation or sale event, the 2019 Bridge Note will be converted at a conversion price per share that is equal to 75% of the per share distribution received by LipoMedix equity holders in connection with the event or if greater the Company will receive a payment equal to the 2019 Bridge Note ($250,000). If none of such events occurs prior to September 28, 2019, the 2019 Bridge Note will be converted into the most senior class of shares LipoMedix has then issued at a conversion price per share equal to $0.53 (calculated on the basis of LipoMedix’s pre-money valuation of $5.0 million). The 2019 Bridge Note converted into 471,698 shares of LipoMedix on September 28, 2019. | ||||||||||
Ordinary shares (in Shares) | 4,000,000 | ||||||||||
Purchase price | $ 1,000,000 | ||||||||||
Total principal amount | $ 300,000 | ||||||||||
Interest, for an aggregate amount | $ 693,263 | $ 306,737 | |||||||||
Minimum [Member] | |||||||||||
Investment in LipoMedix Pharmaceuticals Ltd (Details) [Line Items] | |||||||||||
Principal percentage | 58.00% | ||||||||||
Minimum [Member] | LipoMedix [Member] | |||||||||||
Investment in LipoMedix Pharmaceuticals Ltd (Details) [Line Items] | |||||||||||
Ownership percentage | 52.00% | ||||||||||
Maximum [Member] | |||||||||||
Investment in LipoMedix Pharmaceuticals Ltd (Details) [Line Items] | |||||||||||
Principal percentage | 67.00% | ||||||||||
Maximum [Member] | LipoMedix [Member] | |||||||||||
Investment in LipoMedix Pharmaceuticals Ltd (Details) [Line Items] | |||||||||||
Ownership percentage | 58.00% | ||||||||||
LipoMedix [Member] | |||||||||||
Investment in LipoMedix Pharmaceuticals Ltd (Details) [Line Items] | |||||||||||
Issued and outstanding ordinary shares, percentage | 67.00% | ||||||||||
No-interest bridge financing | $ 250,000 | $ 875,000 | |||||||||
Bridge note converted (in Shares) | 1,650,943 | 471,698 | |||||||||
Description of acquisition entity | In November 2019, the Company provided bridge financing in the principal amount of $100,000 to LipoMedix with a maturity date of May 3, 2020 and an interest rate of 6%. |
Marketable Securities (Details)
Marketable Securities (Details) | 12 Months Ended |
Jul. 31, 2019USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Available for sale securities | $ 25,000,000 |
Gross realized gains | $ 330,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Spin-Off, IDT contribution investment amount | $ 2,000,000 | |
Unrealized loss | $ 800,000 | $ 0 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of balance of assets measured at fair value on a recurring basis - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Fair Value Measurements (Details) - Schedule of balance of assets measured at fair value on a recurring basis [Line Items] | ||
Investments – Hedge Funds | $ 7,510 | $ 5,125 |
Total | 7,510 | 5,125 |
Level 1 [Member] | ||
Fair Value Measurements (Details) - Schedule of balance of assets measured at fair value on a recurring basis [Line Items] | ||
Investments – Hedge Funds | ||
Total | ||
Level 2 [Member] | ||
Fair Value Measurements (Details) - Schedule of balance of assets measured at fair value on a recurring basis [Line Items] | ||
Investments – Hedge Funds | ||
Total | ||
Level 3 [Member] | ||
Fair Value Measurements (Details) - Schedule of balance of assets measured at fair value on a recurring basis [Line Items] | ||
Investments – Hedge Funds | 7,510 | 5,125 |
Total | $ 7,510 | $ 5,125 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details) - Schedule of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Balance, beginning of period | $ 5,125 | $ 12,118 |
Conversion of Series D Convertible Note | (7,900) | |
Total gain included in earnings | 2,385 | 907 |
Balance, end of period | $ 7,510 | $ 5,125 |
Trade Accounts Receivable (Deta
Trade Accounts Receivable (Details) - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Current Portion of Deferred Rental Income [Member] | ||
Trade Accounts Receivable (Details) [Line Items] | ||
Prepaid expenses and other current assets | $ 11 | $ 34 |
Noncurrent Portion of Deferred Rental Income [Member] | ||
Trade Accounts Receivable (Details) [Line Items] | ||
Other assets | $ 1,500 | $ 1,400 |
Trade Accounts Receivable (De_2
Trade Accounts Receivable (Details) - Schedule of trade accounts receivable - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Schedule of trade accounts receivable [Abstract] | ||
Trade Accounts Receivable | $ 364 | $ 561 |
Accounts Receivable - Related Party | 121 | 11 |
Less Allowance for Doubtful Accounts | (218) | (122) |
Trade Accounts Receivable, net | $ 267 | $ 450 |
Property and Equipment (Details
Property and Equipment (Details) - Property and Equipment [Member] - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Property and Equipment (Details) [Line Items] | ||
Depreciation expense | $ 1.9 | |
Depreciation expense | $ 1.8 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment - Property, Plant and Equipment [Member] - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Building and Improvements | $ 47,591 | $ 54,241 |
Land | 10,412 | 10,412 |
Furniture and Fixtures | 1,145 | 1,145 |
Other | 256 | 255 |
Property and equipment, gross | 59,404 | 66,053 |
Less Accumulated Depreciation | (14,971) | (17,320) |
Total | $ 44,433 | $ 48,733 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 12 Months Ended |
Jul. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Federal statutory corporate tax, description | The Tax Act provides for comprehensive tax legislation that, among other things, reduces the U.S. federal statutory corporate tax rate from 35.0% to 21.0% effective January 1, 2018, broadens the U.S. federal income tax base, requires companies to pay a one-time repatriation tax on earnings of certain foreign subsidiaries that were previously tax deferred (“transition tax”), and creates new taxes on certain foreign sourced earnings. |
Federal net operating loss | $ 32.7 |
State net operating loss | 13.6 |
Net operating loss foreign operations | $ 2.4 |
U.S. federal statutory corporate tax rate | 80.00% |
Description of net operating loss | The federal NOL carryforwards generated prior to 2018 will begin to expire in 2026. The state NOLs will begin to expire in 2038 and foreign NOLs do not expire. |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income (loss) before income taxes - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Schedule of income (loss) before income taxes [Abstract] | ||
Domestic | $ (10,239) | $ (3,410) |
Foreign | (704) | (1,533) |
Loss before income taxes | $ (10,943) | $ (4,943) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of provision for income taxes - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Current: | ||
Foreign | $ (2) | |
Federal | (9) | |
State | ||
Total current expense | (11) | |
Deferred: | ||
Foreign | (18) | 19 |
Federal | ||
State | ||
Total deferred expense | (18) | 19 |
(Provision for) benefit from income taxes | $ (29) | $ 19 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of differences between income taxes - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Schedule of differences between income taxes [Abstract] | ||
U.S. federal income tax at statutory rate | $ 2,298 | $ 908 |
State income tax | 662 | 172 |
Valuation allowance | (3,007) | 30 |
Foreign tax rate differential | 11 | 24 |
Tax law change | ||
Permanent differences | (2) | (102) |
Rate Change | (1,030) | |
Other | 9 | 17 |
(Provision for) benefit from income taxes | $ (29) | $ 19 |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of deferred tax assets and deferred tax liabilities - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Schedule of deferred tax assets and deferred tax liabilities [Abstract] | ||
Net operating loss carryforwards | $ 8,395 | $ 5,316 |
AMT carryforwards | 2,660 | 2,692 |
Reserves and accruals | 61 | 34 |
Stock-based compensation | 312 | 119 |
Gross deferred tax assets | 11,428 | 8,161 |
Less valuation allowance | (11,422) | (8,142) |
Total deferred tax assets | 6 | 19 |
Total deferred tax liabilities | ||
Deferred tax assets, net | $ 6 | $ 19 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jul. 12, 2019 | Sep. 17, 2018 | Jul. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | |||
Payment of consulting fees | $ 377,000 | ||
Settlement agreement, Description | As part of the Settlement Agreement, the Company agreed to pay a penalty of $127,294 in eight quarterly installment payments through November 2021. | ||
Legal fees | $ 225,000 |
Convertible Note (Details)
Convertible Note (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2019 | Jul. 31, 2020 | Jul. 31, 2019 | |
Convertible Note (Details) [Line Items] | |||
Interest expense on note | $ 667,000 | ||
Debt conversion converted, shares (in Shares) | 1,849,749 | ||
Board of Directors Chairman [Member] | |||
Convertible Note (Details) [Line Items] | |||
Convertible note, description | On November 15, 2018, Howard Jonas, the Company’s Chairman, CEO, and controlling stockholder entered into an agreement to purchase a convertible note from the Company for $15.0 million. The term of the note was three years with interest accruing on the principal amount at a rate of 6% per annum, compounded quarterly. The note was subsequently assigned by Mr. Jonas to the Howard S. Jonas 2017 Annuity Trust. At the option of the Company, interest on the note can be capitalized and added to principal or payable in cash. The note was convertible at the option of the holder into shares of Class B common stock at a conversion price of $8.47 per share, the closing price of the Company’s Class B common stock on the trading day before the date of the investment agreement. The initial principal amount of the note was convertible into 1,770,956 shares of Class B common stock, and if all interest for the three-year term of the note is capitalized, the note would have been convertible into 2,117,388 shares of Class B common stock. If the closing price of the Company’s Class B common stock on the NYSE American is 200% of the conversion price for at least thirty (30) consecutive days, the Company had the right to cause conversion of the note. | ||
At issuance [Member] | |||
Convertible Note (Details) [Line Items] | |||
Debt discount to the beneficial conversion feature | $ 70,000 | ||
Amortized discount | 16,000 | ||
Interest expense on note | $ 0 | $ 650,000 |
Convertible Note (Details) - Sc
Convertible Note (Details) - Schedule of long-term carrying value of convertible note - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Convertible Note: | ||
Principal value of 6% convertible note at July 31, 2019, due November 15, 2021 | $ 15,000 | |
Debt discount | (54) | |
Total long-term carrying value of convertible note | $ 14,946 |
Convertible Note (Details) - _2
Convertible Note (Details) - Schedule of long-term carrying value of convertible note (Parentheticals) | Jul. 31, 2019 |
Schedule of long-term carrying value of convertible note [Abstract] | |
Percentage of convertible note | 6.00% |
Related Party Transactions (Det
Related Party Transactions (Details) | Jan. 10, 2019USD ($)shares | Nov. 15, 2018 | Nov. 05, 2018USD ($)shares | Jan. 29, 2020USD ($)shares | Jan. 31, 2019shares | Jan. 23, 2019USD ($)shares | Sep. 30, 2018 | Jul. 31, 2020USD ($)m² | Jul. 31, 2019USD ($) | Apr. 06, 2020shares |
Related Party Transactions (Details) [Line Items] | ||||||||||
Area of land (in Square Meters) | m² | 3,600 | |||||||||
Office rent and parking | $ 1,800,000 | |||||||||
Ownership percentage, description | The Company has recognized approximately $192 thousand and $0 in income from it’s ownership interests of 37.5% in RP Finance for the years ended July 31, 2020 and 2019, respectively (see Note 4). | |||||||||
Related party transaction, description | the Company for $15.0 million convertible into shares of Class B common stock at $8.47 per share. The term of the note was three years with interest on the principal amount at a rate of 6% per annum, compounded quarterly. At issuance, the Company recorded a debt discount of approximately $70,000 related to the beneficial conversion feature of the note and amortized approximately $16,000 of the discount in fiscal 2019 which was recorded as interest expense. In addition, the Company recorded approximately $650,000 of interest expense for the year ended July 31, 2019. In August 2019, the note including accrued interest of approximately $667,000 was converted into 1,849,749 shares of common stock. | |||||||||
Percentage of total revenue | 52.00% | 53.00% | ||||||||
IDT Rafael Holdings, LLC [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Area of land (in Square Meters) | m² | 80,000 | |||||||||
IDT [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Due to related parties | $ 309,000 | |||||||||
Due from related parties | 29,000 | |||||||||
Office rent and parking | 0 | $ 9,000 | ||||||||
Rafael Pharmaceuticals [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Due from related parties | 480,000 | 480,000 | ||||||||
Due from related parties | $ 120,000 | $ 280,000 | ||||||||
IDT Rafael Holdings, LLC [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Warrant exercised (in Shares) | shares | 5,100,000 | 4,000,000 | 36,300,000 | |||||||
Proceeds from warrant exercises | $ 6,400,000 | $ 5,000,000 | $ 34,400,000 | |||||||
Howard S. Jonas [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Due to related parties | $ 640,000 | $ 500,000 | $ 3,400,000 | |||||||
Cs Pharma Holdings [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Ownership percentage, description | In September 2018, CS Pharma, in which the Company owns an effective 45% interest, exercised a warrant to purchase 8 million shares of Rafael Pharmaceutical’s Series D Convertible Preferred Stock for $10 million representing approximately 8% of the equity on a fully-diluted basis (excluding the remainder of the Warrant) of Rafael Pharmaceuticals. The Warrant in full is exercisable for up to 56% of the fully diluted equity of Rafael Pharmaceuticals. The right to exercise the first $10 million of the Warrant was held by CS Pharma. CS Pharma is owned by 0.25% by Michael Weiss, a non-employee director of the Company. The remainder of the Warrant is held by Pharma Holdings. | |||||||||
Class B common stock [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Restricted shares vested (in Shares) | shares | 4,203 | |||||||||
Annuity trust transferred shares (in Shares) | shares | 4,306,738 | |||||||||
Class B common stock [Member] | Officer's [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Restricted shares vested (in Shares) | shares | 5,238 | |||||||||
Payroll Taxes | $ 116,000 | |||||||||
Class A common stock [Member] | ||||||||||
Related Party Transactions (Details) [Line Items] | ||||||||||
Annuity trust transferred shares (in Shares) | shares | 787,163 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Leases [Abstract] | ||
Net operating leases with initial term expiration dates | The Company is the lessor of certain properties which are leased to tenants under net operating leases with initial term expiration dates ranging from 2021 to 2029. | |
Other income | $ 3.6 | $ 3.6 |
Percentage of related parties | 52.00% | 53.00% |
Related party leases expire, description | The Company has related party leases that expire in April 2025 for (i) an aggregate of 88,631 square feet, which includes two parking spots per thousand square feet of space leased at 520 Broad Street, Newark, New Jersey, and (ii) 3,595 square feet in Israel. | |
Annual rent | $ 2 | |
Related parties terminate leases, description | The related parties have the right to terminate the domestic 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. A related party has the right to terminate the Israeli lease upon four months’ notice. IDT has the right to lease an additional 50,000 square feet, in 25,000-foot increments, in the building located at 520 Broad Street, Newark, New Jersey on the same terms as their base lease, and other rights should 25,000 square feet or less remain available to lessees in the building. Upon expiration of the lease, related parties have the right to renew the leases for another five years. |
Leases (Details) - Schedule of
Leases (Details) - Schedule of contractual minimum lease payments $ in Thousands | Jul. 31, 2020USD ($) |
Leases (Details) - Schedule of contractual minimum lease payments [Line Items] | |
2021 | $ 2,857 |
2022 | 2,855 |
2023 | 2,709 |
2024 | 2,693 |
2025 | 2,209 |
Thereafter | 1,948 |
Total Minimum Future Rental Income | 15,271 |
Related Parties [Member] | |
Leases (Details) - Schedule of contractual minimum lease payments [Line Items] | |
2021 | 2,041 |
2022 | 2,078 |
2023 | 2,117 |
2024 | 2,155 |
2025 | 1,659 |
Thereafter | |
Total Minimum Future Rental Income | 10,050 |
Other [Member] | |
Leases (Details) - Schedule of contractual minimum lease payments [Line Items] | |
2021 | 816 |
2022 | 777 |
2023 | 592 |
2024 | 538 |
2025 | 550 |
Thereafter | 1,948 |
Total Minimum Future Rental Income | $ 5,221 |
Business Segment Information (D
Business Segment Information (Details) | 12 Months Ended |
Jul. 31, 2020 | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Business Segment Information _2
Business Segment Information (Details) - Schedule of operating results for the business segments - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 4,910 | $ 4,931 |
Loss from operations | (8,465) | (6,696) |
Pharmaceuticals [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Loss from operations | (2,811) | (1,613) |
Real Estate [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,910 | 4,931 |
Loss from operations | $ (5,654) | $ (5,083) |
Business Segment Information _3
Business Segment Information (Details) - Schedule of revenue from tenants by geographic areas | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue from tenants located in Israel | 6.00% | 3.00% |
Business Segment Information _4
Business Segment Information (Details) - Schedule of net long-lived assets and total assets by geographic areas - USD ($) $ in Thousands | Jul. 31, 2020 | Jul. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 136,347 | $ 142,143 |
Business Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 44,433 | 48,733 |
Total assets | 136,347 | 142,143 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 42,840 | 47,096 |
Total assets | 132,286 | 138,535 |
Israel [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 1,593 | 1,637 |
Total assets | $ 4,061 | $ 3,608 |
Equity (Details)
Equity (Details) | Mar. 28, 2018USD ($)shares | Jan. 31, 2019shares | Apr. 26, 2018USD ($)$ / sharesshares | Jul. 31, 2020USD ($)$ / sharesshares | Jul. 31, 2019USD ($)shares |
Equity (Details) [Line Items] | |||||
Number of non-employee directors | 3 | ||||
Option term, description | Option awards generally vest on a graded basis over five years of service and have 10-year contractual terms. | ||||
Number of options exercised | (6,000) | (38,710) | |||
Number of options, cancelled shares | 259 | 819 | |||
Number of shares granted | |||||
Fair value of restricted shares granted | 24,071 | 74,637 | |||
Unrecognized compensation cost over next period | 2 years 127 days | ||||
Total unrecognized compensation cost (in Dollars) | $ | $ 1,300,000 | ||||
Total grant date fair value of shares vested (in Dollars) | $ | $ 466,000 | $ 298,000 | |||
2018 Equity Incentive Plan [Member] | |||||
Equity (Details) [Line Items] | |||||
Share-based payment award, number of shares authorized | 1,064,048 | ||||
Options exercise price (in Dollars per share) | $ / shares | $ 4.90 | ||||
Officer [Member] | |||||
Equity (Details) [Line Items] | |||||
Fair value of restricted shares granted | 478,000 | 1,300,000 | |||
Class B common stock [Member] | |||||
Equity (Details) [Line Items] | |||||
Number of non-employee directors | 3,000,000 | ||||
Number of options exercised | 6,000 | 38,710 | |||
Number of options, cancelled shares | 259 | 819 | |||
Fair value of restricted shares granted | 107,000 | ||||
Unrecognized compensation cost over next period | 3 years | ||||
Purchase of Class B common stock shares | 1,254,200 | ||||
Conversion of common stock price per share (in Dollars per share) | $ / shares | $ 6.89 | ||||
Aggregate purchase price (in Dollars) | $ | $ 8,641,438 | ||||
Restricted shares granted | 4,203 | ||||
Class B common stock [Member] | IDT [Member] | |||||
Equity (Details) [Line Items] | |||||
Aggregate restricted shares issued | 92,690 | ||||
Class B common stock [Member] | Employee Stock [Member] | |||||
Equity (Details) [Line Items] | |||||
Number of shares granted | 76,445 | ||||
Fair value of grants (in Dollars) | $ | $ 375,000 | ||||
Class B common stock [Member] | 2018 Equity Incentive Plan [Member] | |||||
Equity (Details) [Line Items] | |||||
Options issued | 626,662 |
Equity (Details) - Schedule of
Equity (Details) - Schedule of stock option activity - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Equity [Abstract] | ||
Number of Options, Outstanding, Beginning balance | 587,133 | 626,662 |
Weighted-Average Exercise Price, Outstanding, Beginning balance | $ 4.90 | $ 4.90 |
Weighted-Average Remaining Contractual Term, Outstanding, Beginning | 4 years 262 days | |
Aggregate Intrinsic Value, Outstanding, Beginning balance | $ 2,877 | $ 3,071 |
Number of Options, Granted | ||
Weighted-Average Exercise Price, Granted | ||
Number of Options, Exercised | (6,000) | (38,710) |
Weighted-Average Exercise Price, Exercised | $ 4.90 | $ 4.90 |
Number of Options, Cancelled / Forfeited | (259) | (819) |
Weighted-Average Exercise Price, Cancelled / Forfeited | $ 4.90 | $ 4.90 |
Number of Options, Outstanding, Ending balance | 580,874 | 587,133 |
Weighted-Average Exercise Price, Outstanding, Ending balance | $ 4.90 | $ 4.90 |
Weighted-Average Remaining Contractual Term, Outstanding, Ending balance | 2 years 237 days | 3 years 240 days |
Aggregate Intrinsic Value, Outstanding, Ending balance | $ 2,846 | $ 2,877 |
Number of Options, Exercisable | 580,874 | |
Weighted-Average Exercise Price, Exercisable | $ 4.90 | |
Weighted-Average Remaining Contractual Term, Outstanding, Exercisable | 2 years 237 days | |
Aggregate Intrinsic Value, Outstanding, Exercisable | $ 2,846 |
Equity (Details) - Schedule o_2
Equity (Details) - Schedule of grants of restricted shares of Class B common stock - $ / shares | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Equity [Abstract] | ||
Number of Non-vested Shares, Beginning Balance | 156,426 | 141,799 |
Weighted- Average Grant- Date Fair Value, Beginning balance | $ 10.41 | $ 4.90 |
Number of Non-vested Shares, Granted | 24,071 | 74,637 |
Weighted- Average Grant- Date Fair Value, Granted | $ 19.87 | $ 16.49 |
Number of Non-vested Shares, Vested | (57,060) | (60,010) |
Weighted- Average Grant- Date Fair Value, Vested | $ (8.17) | $ 4.96 |
Number of Non-vested Shares, Cancelled / Forfeited | (333) | |
Weighted- Average Grant- Date Fair Value, Cancelled / Forfeited | $ (4.90) | |
Number of Non-vested Shares, Ending Balance | 123,104 | 156,426 |
Weighted- Average Grant- Date Fair Value, Ending balance | $ 10.80 | $ 10.41 |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of common share equivalents, basic and dilutive loss per share - USD ($) | 12 Months Ended | |
Jul. 31, 2020 | Jul. 31, 2019 | |
Loss Per Share (Details) - Schedule of common share equivalents, basic and dilutive loss per share [Line Items] | ||
Total | $ 580,874 | $ 2,434,727 |
Stock Options [Member] | ||
Loss Per Share (Details) - Schedule of common share equivalents, basic and dilutive loss per share [Line Items] | ||
Total | $ 580,874 | 587,133 |
Convertible Note [Member] | ||
Loss Per Share (Details) - Schedule of common share equivalents, basic and dilutive loss per share [Line Items] | ||
Total | $ 1,847,594 |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2020USD ($) | Aug. 28, 2020USD ($)m² | May 20, 2020USD ($) | Jul. 31, 2020m² | |
Subsequent Events (Details) [Line Items] | ||||
Office building (in Square Meters) | m² | 3,600 | |||
Purchase price | $ 1,000,000 | |||
Purchase agreement periodic payments, description | In August 2020, Rafael Pharmaceuticals called for a $5 million draw on the line of credit facility and the facility was funded by RP Finance in the amount $5 million, in August 2020 and September 2020. The Company funded $1,875,000 in accordance with its 37.5% ownership interests in RP Finance. | |||
Subsequent Event [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Office building (in Square Meters) | m² | 65,253 | |||
Purchase price | $ 3,875,000 | |||
Cash received | $ 3,675,638 | |||
Liquidity investment | $ 2,000,000 |