# EDGAR Filing Document

**Accession Number:** 0001713863
**File Stem:** 0001213900-25-120897
**Filing Date:** 2025-12
**Character Count:** 193575
**Document Hash:** 195618e2e827817a5c7db5fbe8082a51
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-120897.hdr.sgml**: 20251212

**ACCESSION NUMBER**: 0001213900-25-120897

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 102

**CONFORMED PERIOD OF REPORT**: 20251031

**FILED AS OF DATE**: 20251212

**DATE AS OF CHANGE**: 20251211

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Rafael Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001713863
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 822296593
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0731

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38411
- **FILM NUMBER:** 251566427

**BUSINESS ADDRESS:**
- **STREET 1:** 520 BROAD STREET
- **CITY:** NEWARK
- **STATE:** NJ
- **ZIP:** 07120
- **BUSINESS PHONE:** 212-658-1450

**MAIL ADDRESS:**
- **STREET 1:** 520 BROAD STREET
- **CITY:** NEWARK
- **STATE:** NJ
- **ZIP:** 07120

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

☒ Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended October 31, 2025

or

☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.

Commission File Number: 000-55863

**RAFAEL HOLDINGS, INC.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Delaware** | **82-2296593** |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

**520 Broad Street, Newark, New Jersey 07102**

(Address of principal executive offices, zip code)

**(212) 658-1450**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Class B common stock, par value $0.01 per share | RFL | New York Stock Exchange |
| Warrants to purchase Class B common stock | RFL-W | NYSE American |

---

Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, based on the adjusted closing price on January 31, 2025 (the last business day of the registrant's most recently completed second fiscal quarter) of the Class B common stock of $2.03 per share, as reported on the New York Stock Exchange, was approximately $38.6 million.

The number of shares outstanding of the registrant's common stock as of December 10, 2025 was:

---

| | |
|:---|:---|
| Class A common stock, par value $0.01 per share: | 787,163 shares |
| Class B common stock, par value $0.01 per share: | 50,975,638 shares (excluding 101,487 treasury shares) |

---

**RAFAEL HOLDINGS, INC.**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| [Part I. FINANCIAL INFORMATION](#a_001) | [Part I. FINANCIAL INFORMATION](#a_001) | 1 |
| Item 1. | Financial Statements (Unaudited) |  |
|  | [Consolidated Balance Sheets as of October 31, 2025 and July 31, 2025](#a_002) | 1 |
|  | [Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended October 31, 2025 and 2024](#a_003) | 2 |
|  | [Consolidated Statements of Equity for the Three Months Ended October 31, 2025 and 2024](#a_004) | 3 |
|  | [Consolidated Statements of Cash Flows for the Three Months Ended October 31, 2025 and 2024](#a_005) | 4 |
|  | [Notes to the Consolidated Financial Statements](#a_006) | 5 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_007) | 39 |
| Item 3. | [Quantitative and Qualitative Disclosures about Market Risks](#a_008) | 46 |
| Item 4. | [Controls and Procedures](#a_009) | 46 |
| [Part II. OTHER INFORMATION](#a_010) | [Part II. OTHER INFORMATION](#a_010) | 47 |
| Item 1. | [Legal Proceeding](#a_011) | 47 |
| Item 1A. | [Risk Factors](#a_012) | 47 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_013) | 47 |
| Item 3. | [Defaults Upon Senior Securities](#a_014) | 47 |
| Item 4. | [Mine Safety Disclosures](#a_015) | 47 |
| Item 5. | [Other Information](#a_016) | 47 |
| Item 6. | [Exhibits](#a_017) | 48 |
| [SIGNATURES](#a_018) |  | 49 |

---

i

**PART I. FINANCIAL INFORMATION**

**RAFAEL HOLDINGS, INC.**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **October 31,<br> 2025** | **July 31,<br> 2025** |
|  | **(Unaudited)** | |
| **ASSETS** | | |
| **CURRENT ASSETS** |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $45539 | $52769 |
| &nbsp;&nbsp;&nbsp;Prepaid clinical costs | 1584 | 1045 |
| &nbsp;&nbsp;&nbsp;Other receivables |  | 1206 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit losses of $245 at October 31, 2025 and July 31, 2025 | 413 | 627 |
| &nbsp;&nbsp;&nbsp;Inventory | 272 | 281 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 513 | 786 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 48321 | 56714 |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 1562 | 1596 |
| &nbsp;&nbsp;&nbsp;Non-current prepaid clinical costs | 629 | 1399 |
| &nbsp;&nbsp;&nbsp;Convertible notes receivable classified as available-for-sale | 1858 | 1858 |
| &nbsp;&nbsp;&nbsp;Goodwill | 19939 | 19939 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 962 | 994 |
| &nbsp;&nbsp;&nbsp;In-process research and development | 31575 | 31575 |
| &nbsp;&nbsp;&nbsp;Investments | 500 |  |
| &nbsp;&nbsp;&nbsp;Other assets | 29 | 34 |
| **TOTAL ASSETS** | $105375 | $114109 |
| **LIABILITIES AND EQUITY** |  |  |
| **CURRENT LIABILITIES** |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $6794 | $6893 |
| &nbsp;&nbsp;&nbsp;Accrued expenses | 3860 | 3304 |
| &nbsp;&nbsp;&nbsp;Convertible notes payable | 608 | 614 |
| &nbsp;&nbsp;&nbsp;Due to related parties | 751 | 723 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 63 | 66 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 12076 | 11600 |
| &nbsp;&nbsp;&nbsp;Accrued expenses, noncurrent | 3898 | 3895 |
| &nbsp;&nbsp;&nbsp;Convertible notes payable, noncurrent | 56 | 78 |
| &nbsp;&nbsp;&nbsp;Deferred income tax liability | 138 | 138 |
| &nbsp;&nbsp;&nbsp;Other liabilities | 27 | 27 |
| **TOTAL LIABILITIES** | 16195 | 15738 |
| **COMMITMENTS AND CONTINGENCIES** |  |  |
| **EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Class A common stock, $0.01 par value; 35,000,000 shares authorized, 787,163 shares issued and outstanding as of October 31, 2025 and July 31, 2025 | 8 | 8 |
| &nbsp;&nbsp;&nbsp;Class B common stock, $0.01 par value; 200,000,000 shares authorized, 50,867,964 issued and outstanding (excluding treasury shares of 101,487) as of October 31, 2025, and 50,789,697 issued and outstanding (excluding treasury shares of 101,487) as of July 31, 2025 | 509 | 508 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 322730 | 322161 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (242079) | (232263) |
| &nbsp;&nbsp;&nbsp;Treasury stock, at cost; 101,487 Class B shares as of October 31, 2025 and July 31, 2025 | (168) | (168) |
| Accumulated other comprehensive income related to unrealized income on available-for-sale securities | 358 | 358 |
| Accumulated other comprehensive income related to foreign currency translation adjustment | 3823 | 3787 |
| Total equity attributable to Rafael Holdings, Inc. | 85181 | 94391 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interests | 3999 | 3980 |
| **TOTAL EQUITY** | 89180 | 98371 |
| **TOTAL LIABILITIES AND EQUITY** | $105375 | $114109 |

---

See accompanying notes to the unaudited consolidated financial statements.

**RAFAEL HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS**

**(unaudited, in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,** |
|  | **2025** | **2024** |
| **REVENUE** |  |  |
| &nbsp;&nbsp;&nbsp;Product revenue | $154 | $— |
| &nbsp;&nbsp;&nbsp;Infusion Technology |  | 51 |
| &nbsp;&nbsp;&nbsp;Rental – Third Party | 56 | 50 |
| &nbsp;&nbsp;&nbsp;Rental – Related Party | 30 | 27 |
| **Total revenue** | 240 | 128 |
| **COSTS AND EXPENSES** |  |  |
| &nbsp;&nbsp;&nbsp;Cost of Infusion Technology revenue |  | 37 |
| &nbsp;&nbsp;&nbsp;Cost of product revenue | 9 |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 2838 | 2523 |
| &nbsp;&nbsp;&nbsp;Research and development | 7484 | 1326 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 50 | 86 |
| **Loss from operations** | (10141) | (3844) |
| &nbsp;&nbsp;&nbsp;Interest income | 399 | 568 |
| &nbsp;&nbsp;&nbsp;Realized gain on available-for-sale securities |  | 194 |
| &nbsp;&nbsp;&nbsp;Unrealized loss on investment - Cyclo |  | (4365) |
| &nbsp;&nbsp;&nbsp;Unrealized loss on convertible notes receivable, due from Cyclo |  | (1588) |
| &nbsp;&nbsp;&nbsp;Interest expense | (160) | (162) |
| &nbsp;&nbsp;&nbsp;Other income (loss), net | 115 | (2) |
| **Loss before income taxes** | (9787) | (9199) |
| &nbsp;&nbsp;&nbsp;Provision for income taxes | (10) | (12) |
| **Consolidated net loss** | (9797) | (9211) |
| &nbsp;&nbsp;&nbsp;Net income (loss) attributable to noncontrolling interests | 19 | (205) |
| **Net loss attributable to Rafael Holdings, Inc.** | $(9816) | $(9006) |
| **OTHER COMPREHENSIVE LOSS** |  |  |
| **Consolidated net loss** | $(9797) | $(9211) |
| &nbsp;&nbsp;&nbsp;Unrealized gain on available-for-sale securities |  | 21 |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 36 | 5 |
| **Comprehensive loss** | (9761) | (9185) |
| &nbsp;&nbsp;&nbsp;Comprehensive income (loss) attributable to noncontrolling interests | 17 | (205) |
| **Comprehensive loss attributable to Rafael Holdings, Inc.** | $(9778) | $(8980) |
| **Loss per share attributable to common stockholders** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | $(0.19) | $(0.37) |
| **Weighted average number of shares used in calculation of loss per share** |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 51184407 | 24062854 |

---

See accompanying notes to the unaudited consolidated financial statements.

**RAFAEL HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF EQUITY**

 **(unaudited, in thousands, except share data)**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** | **Three Months Ended October 31, 2025** |
|  | **Common Stock, Series A** | **Common Stock, Series A** | **Common Stock, Series B** | **Common Stock, Series B** | | | | | **Treasury Stock** | **Treasury Stock** | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional paid-in**<br>**capital** | **Accumulated**<br>**deficit** | **Accumulated other comprehensive**<br>**income** | **Noncontrolling**<br>**interests** | **Class B Shares** | **Amount** | **Total**<br>**Equity** |
| **Balance at July 31, 2025** | **787163** | $**8** | **50789697** | $**508** | $**322161** | $**(232263)** | $**4145** | $**3980** | **101487** | $**(168)** | $**98371** |
| &nbsp;&nbsp;&nbsp;Net (income) loss |  |  |  |  |  | (9816) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | 19 | **—** | **—**  | **(9797)** |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  | 99429 | 1 | 597 |  |  |  | **—** | **—**  | **598** |
| &nbsp;&nbsp;&nbsp;Shares withheld for payroll taxes |  |  | (21162) |  | (28) |  |  |  | **—** | **—**  | **(28)** |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  |  |  |  |  |  | 36 |  | **—** | **—**  | **36** |
| **Balance at October 31, 2025** | 787163 | $8 | 50867964 | $509 | $322730 | $(242079) | $4181 | $3999 | 101487 | $(168) | $89180 |

---

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** | **Three Months Ended October 31, 2024** |
|  | **Common Stock, Series A** | **Common Stock, Series A** | **Common Stock, Series B** | **Common Stock, Series B** | | | | | **Treasury Stock** | **Treasury Stock** | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional paid-in**<br>**Capital** | **Accumulated**<br>**deficit** | **Accumulated other comprehensive**<br>**Income** | **Noncontrolling**<br>**Interests** | **Class B Shares** | **Amount** | **Total**<br>**Equity** |
| **Balance at July 31, 2024** | **787163** | $**8** | **23819948** | $**238** | $**280048** | $**(201743)** | $**3802** | $**4073** | **101487** | $**(168)** | $**86258** |
| &nbsp;&nbsp;&nbsp;Net loss |  | &nbsp;&nbsp;&nbsp;&nbsp; — |  |  |  | (9006) | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | (205) | **—** | **—**  | **(9211)** |
| &nbsp;&nbsp;&nbsp;Stock-based compensation |  |  |  |  | 359 |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; — | **—** | **—**  | **359** |
| &nbsp;&nbsp;&nbsp;Forfeiture of restricted stock |  |  | (7500) |  |  | **—**  |  |  | **—** | **—**  | **—**  |
| &nbsp;&nbsp;&nbsp;Shares withheld for payroll taxes |  |  | (27405) | **—**  | (48) |  |  |  | **—** | **—**  | **(48)** |
| &nbsp;&nbsp;&nbsp;Unrealized gain on available-for-sale securities | **—** | **—**  |  |  |  |  | 21 |  | **—** | **—**  | **21** |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  |  |  |  |  |  | 5 |  | **—** | **—**  | **5** |
| **Balance at October 31, 2024** | 787163 | $8 | 23785043 | $238 | $280359 | $(210749) | $3828 | $3868 | 101487 | $(168) | $77384 |

---

See accompanying notes to the unaudited consolidated financial statements.

**RAFAEL HOLDINGS, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(unaudited, in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,** |
|  | **2025** | **2024** |
| **Operating activities** |  |  |
| Consolidated net loss | $(9797) | $(9211) |
| Adjustments to reconcile consolidated net loss to net cash used in operating activities |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 50 | 86 |
| &nbsp;&nbsp;&nbsp;Gain on sale of property and equipment | (54) |  |
| &nbsp;&nbsp;&nbsp;Gain on settlement of convertible notes payable | (34) |  |
| &nbsp;&nbsp;&nbsp;Realized gain on available-for-sale securities |  | (194) |
| &nbsp;&nbsp;&nbsp;Amortization of discount on available-for-sale securities |  | (257) |
| &nbsp;&nbsp;&nbsp;Unrealized loss on equity investments - Cyclo |  | 4365 |
| &nbsp;&nbsp;&nbsp;Unrealized loss on Convertible Notes, due from Cyclo |  | 1588 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 598 | 359 |
| Change in assets and liabilities, net of effects from acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;Trade accounts receivable | 214 | 225 |
| &nbsp;&nbsp;&nbsp;Interest receivable |  | 77 |
| &nbsp;&nbsp;&nbsp;Inventory | 9 |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 273 | 35 |
| &nbsp;&nbsp;&nbsp;Prepaid clinical trial costs (current and non-current) | 231 |  |
| &nbsp;&nbsp;&nbsp;Other receivables | 1206 |  |
| &nbsp;&nbsp;&nbsp;Other assets | 5 | 8 |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 457 | (118) |
| &nbsp;&nbsp;&nbsp;Other current liabilities | (3) | (1) |
| &nbsp;&nbsp;&nbsp;Due to related parties | 28 | 1 |
| &nbsp;&nbsp;&nbsp;Accrued expenses, noncurrent | 3 |  |
| &nbsp;&nbsp;&nbsp;Convertible notes payable | 8 |  |
| &nbsp;&nbsp;&nbsp;Other liabilities |  | (5) |
| Net cash used in operating activities | (6806) | (3042) |
| **Investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment |  | (6) |
| &nbsp;&nbsp;&nbsp;Proceeds from sale of property and equipment | 70 |  |
| &nbsp;&nbsp;&nbsp;Purchases of available-for-sale securities |  | (15728) |
| &nbsp;&nbsp;&nbsp;Purchase of preferred shares and warrants from Nina Medical | (500) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from the sale and maturities of available-for-sale securities |  | 33318 |
| &nbsp;&nbsp;&nbsp;Purchase of intangible assets |  | (9) |
| &nbsp;&nbsp;&nbsp;Issuance of Convertible Notes, due from Cyclo |  | (9000) |
| Net cash (used in) provided by investing activities | (430) | 8575 |
| **Financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Payments for taxes related to shares withheld for employee taxes | (28) | (48) |
| &nbsp;&nbsp;&nbsp;Cash paid to settle convertible notes payable | (2) |  |
| Net cash used in financing activities | (30) | (48) |
| Effect of exchange rate changes on cash and cash equivalents | 36 | (1) |
| Net increase (decrease) in cash and cash equivalents | (7230) | 5484 |
| Cash and cash equivalents, beginning of period | 52769 | 2675 |
| Cash and cash equivalents, end of period | $45539 | $8159 |
| **Non-cash supplemental disclosure** |  |  |
| &nbsp;&nbsp;&nbsp;Withdrawal receivable from Hedge Funds included in other current assets | $— | $2547 |

---

See accompanying notes to the unaudited consolidated financial statements.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 1 – DESCRIPTION OF BUSINESS**

Rafael Holdings, Inc. ("Rafael Holdings", "Rafael", "we" or the "Company") is a biotechnology company that develops pharmaceuticals and holds interests in clinical and early-stage companies that develop pharmaceuticals and medical devices. The Company's lead candidate is Trappsol® Cyclo™, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 ("NPC1"), a rare, fatal and progressive genetic disorder. The Company also holds: (i) a majority equity interest in LipoMedix Pharmaceuticals Ltd. ("LipoMedix"), a clinical stage pharmaceutical company:; (ii) Barer Institute Inc. ("Barer"), a wholly-owned cancer research focused operation whose operations have been substantially streamlined; (iii) and a majority interest in Cornerstone Pharmaceuticals, Inc. ("Cornerstone"), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) a majority interest in Rafael Medical Devices, LLC ("Rafael Medical Devices"), an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries; and (v) a majority interest in Day Three Labs, Inc. ("Day Three"), a company which empowers third-party manufacturers to reimagine their existing product offerings enabling those third-party manufacturers to bring to market better, cleaner, more precise and predictable versions of their product by utilizing Day Three's technology. The Company's primary focus is to finish development of Trappsol® Cyclo™ through the completion of its ongoing pivotal Phase 3 clinical trial and bring that product to regulatory approval and market, and to expand its investment portfolio through opportunistic and strategic investments, including in therapeutics, that address high unmet medical needs. The Company is currently evaluating their other holdings to ensure the future focus of their resources on core assets and specifically the Trappsol® Cyclo™ clinical and development efforts.

Historically, the Company owned real estate assets. As of October 31, 2025, the Company holds a portion of a commercial building in Jerusalem, Israel as its sole remaining real estate asset.

In May 2023, the Company first invested in Cyclo, a clinical-stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo's lead drug candidate is Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1 is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In January 2017, the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017 and in May 2020, Cyclo announced Top Line data indicating Trappsol® Cyclo™ was well tolerated in this study. Cyclo is currently conducting a Phase 3 Clinical Trial evaluating Trappsol® Cyclo™ in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. On March 25, 2025, the Company consummated the Merger with Cyclo whereby Cyclo became a wholly-owned subsidiary of the Company. See Note 3 for more information on the Merger with Cyclo.

LipoMedix is a clinical stage Israeli company focused on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome delivery. As of October 31, 2025, the Company's ownership interest in LipoMedix was approximately 95%. As needed, the Company provides debt or equity funding to Lipomedix to support its development and clinical efforts. LipoMedix is currently exploring strategic options for its lead candidate, including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

In 2019, the Company established Barer, originally as a preclinical cancer metabolism research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to regulate cancer metabolism with potentially broader application in other indications beyond cancer. Barer was comprised of scientists and academic advisors that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions. Barer's majority owned subsidiary, Farber Partners, LLC ("Farber"), was formed around one such agreement with Princeton University's Office of Technology Licensing ("Princeton") for technology from the laboratory of Dr. Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program. In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer and has, since that date, ceased almost all of such activity. Since then, the Company has sought partners for Farber programs and has entered into a license agreement for one of its technologies that is in the pre-clinical research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another one of its technologies, SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing SHMT while seeking out external investment and partnerships. Going forward, the Company expects that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

On March 13, 2024, Cornerstone consummated a restructuring of its outstanding debt and equity interests (the "Cornerstone Restructuring"). As a result of the Cornerstone Restructuring, Rafael became a 67% owner of the issued and outstanding common stock of Cornerstone (the "Cornerstone Acquisition"), and Cornerstone became a consolidated subsidiary of Rafael. The Company is currently reviewing Cornerstone's current efforts, prospects and available resources to determine the optimal operational direction.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

In May 2021, the Company formed Rafael Medical Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023, Rafael Medical Devices sold an aggregate 31.6% equity interest to third parties for $925,000. In February 2025, the Company invested approximately $582,000 in cash, and Rafael Medical Devices raised approximately $45,000 from third parties in exchange for Rafael Medical Devices' Class A Units. The Company currently holds a 73% equity interest in Rafael Medical Devices. On December 11, 2024, Rafael Medical Devices received a substantial equivalence determination for the VECTR System from the Food and Drug Administration ("FDA") in response to Rafael Medical Devices' 510(k) premarket notification. The FDA's clearance of the VECTR System is for use in minimally invasive ligament or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has been classified into Class II and is subject to special controls (performance standards). Rafael Medical Devices' development of future products will depend upon the success of the VECTR System and the Company's ability to identify attractive opportunities in the marketplace.

In January 2024, the Company entered into a series of transactions with Day Three and certain of its shareholders, acquiring a controlling interest in Day Three and subsequently consolidating Day Three's results (the "Day Three Acquisition"). On March 14, 2025, Day Three Labs Manufacturing, a majority owned subsidiary of Day Three, entered into an Asset Purchase Agreement and Licensing Agreement, pursuant to which they sold assets and licensed certain applications of their Unlokt™ technology used in their cannabinoid ingredient manufacturing business.

The "Company" in these consolidated financial statements refers to Rafael Holdings and its subsidiaries on a consolidated basis.

All majority-owned subsidiaries and RP Finance, LLC are consolidated with all intercompany transactions and balances eliminated in consolidation. In addition to Rafael Holdings, Inc., the entities included in these consolidated financial statements are as follows:

---

| | | | |
|:---|:---|:---|:---|
| **Company** | **Country of Incorporation** | **Percentage<br> Owned** |  |
| Broad Atlantic Associates, 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 | %\* |
| Hillview Avenue Realty, JV | United States – Delaware | 100 | % |
| Hillview Avenue Realty, LLC | United States – Delaware | 100 | % |
| Rafael Medical Devices, LLC | United States – Delaware | 73 | % |
| Farber Partners, LLC | United States – Delaware | 93 | % |
| Pharma Holdings, LLC | United States – Delaware | 90 | %\*\* |
| LipoMedix Pharmaceuticals Ltd. | Israel | 95 | % |
| Altira Capital & Consulting, LLC | United States – Delaware | 67 | % |
| CS Pharma Holdings, LLC | United States – Delaware | 45 | %\*\* |
| Day Three Labs, Inc. | United States – Delaware | 84 | % |
| Cornerstone Pharmaceuticals, Inc. | United States – Delaware | 67 | % |
| RP Finance, LLC | United States – Delaware | 38 | % |
| Cyclo Therapeutics, LLC (Note 3) | United States – Nevada | 100 | % |

---

\* In November 2022, the Company resolved to curtail its early-stage development efforts, including pre-clinical research at Barer. The decision was taken to reduce spending as the Company focuses on exploring strategic opportunities.

\*\* 50% of CS Pharma Holdings, LLC is owned by Pharma Holdings, LLC. We have a 90% ownership interest in Pharma Holdings, LLC and, therefore, an effective 45% economic interest in CS Pharma Holdings, LLC. The Company, along with CS Pharma Holdings, LLC and Pharma Holdings LLC, collectively own securities representing 67% of the outstanding capital stock of Cornerstone.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

*Basis of Presentation*

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") for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. All adjustments, which include only normal recurring adjustments, considered necessary for a fair presentation have been included.

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 2025 refers to the fiscal year ended July 31, 2025).

Operating results for the three months ended October 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2026. The balance sheet at July 31, 2025 has been derived from the Company's audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended July 31, 2025 (the "2025 Form 10-K") as filed with the U.S. Securities and Exchange Commission (the "SEC") on October 29, 2025.

*Use of Estimates*

The preparation of consolidated 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 consolidated balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates.

 

*Liquidity*

 

As of October 31, 2025, the Company had cash and cash equivalents of approximately $45.5 million. The Company expects the balance of cash and cash equivalents to be sufficient to meet its obligations for at least the next 12 months from the issuance of these consolidated financial statements.

 

*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. As of October 31, 2025, one third-party customer and one related-party tenant represented 13% and 20% of the Company's accounts receivable balance, respectively. As of July 31, 2025, two third-party customers and one related-party tenant represented 26%, 11%, and 11% of the Company's accounts receivable balance, respectively.

For the three months ended October 31, 2025, three third-party customers, one third-party tenant, and one related-party tenant represented 24%, 21%, 12%, 23%, and 13% of the Company's total revenue, respectively.

For the three months ended October 31, 2024, one customer represented 28% of the Company's total revenue, and one tenant and one related party tenant represented 39% and 21% of the Company's total revenue, respectively.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*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.

*Reserve for Receivables* 

The allowance for credit losses reflects the Company's best estimate of lifetime credit 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 customers' payment histories, 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 Company did not recognize any credit loss expense during the three months ended October 31, 2025 and 2024.

*Inventory and Cost of Goods Sold*

 

Inventory consists of cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold. The Company records a specific reserve for inventory items that are determined to be obsolete. The Company determined no reserve for obsolete inventory was necessary as of October 31, 2025 and July 31, 2025.

*Prepaid Clinical Expenses*

 

Prepaid clinical expenses consist of the Company's active pharmaceutical ingredients and other raw materials for Trappsol® Cyclo™, that is expected to be used in its clinical trial program, recorded at cost. In addition, advance payments for goods or services for future research and development activities are included as prepaid clinical expenses. Prepaid clinical expenses are expensed as research and development costs as the goods are delivered or the related services are performed. Prepaid clinical expenses expected to be utilized beyond one year from the balance sheet date are classified as non-current assets.

 

*Convertible Notes Receivable*

The Company holds convertible notes receivable that are classified as available-for-sale as defined under Accounting Standards Codification ("ASC") 320, *Investments - Debt and Equity Securities* ("ASC 320"), and are recorded at fair value. Subsequent changes in fair value are recorded in accumulated other comprehensive income.

The fair value of these convertible notes receivable are estimated using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to the Company, including cash repayment, equity conversion, and collateral transfer scenarios. Estimating the fair value of the convertible note requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.

 

*Variable Interest Entities*

 

In accordance with ASC 810, *Consolidation* ("ASC 810"), the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities ("VIEs"). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE.

 

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

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.

*Investments*

 

The method of accounting applied to long-term investments in equity securities 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 include 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 equity securities may be accounted for using (i) the fair value option, if elected, (ii) fair value through earnings if fair value is readily determinable, or (iii) for equity investments without readily determinable fair values, the measurement alternative to measure at cost adjusted for any impairment and observable price changes, as applicable. The election to use the measurement alternative is made for each eligible investment.

Prior to the Merger, as defined in Note 3, the Company elected the fair value option to account for its investment in Cyclo, as the Company had significant influence over Cyclo's management. The fair value option is irrevocable once elected. The Company measured its initial investment in Cyclo at fair value and recorded all subsequent changes in fair value in earnings in the consolidated statements of operations and comprehensive loss. The Company believed the fair value option best reflected the underlying economics of the investment. Prior to the Merger, the Company had determined that Cyclo was a VIE, however, the Company had determined that it was not the primary beneficiary as the Company did not have the power to direct the activities of Cyclo that most significantly impact Cyclo's economic performance. See Note 4, "Investment in Cyclo Therapeutics, LLC".

Investments in which the Company does not have the ability to exercise significant influence over operating and financial matters are accounted for in accordance with ASC 321, *Investments – Equity Securities*. Investments without readily determinable fair values are accounted for using the measurement alternative which is at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company periodically evaluates its investments for impairment. If the Company determines that fair value is less than the investment's carrying value, then an impairment loss is recorded in the accompanying consolidated statements of operations and comprehensive loss.

At October 31, 2025, the Company held an investment of $0.5 million in preferred shares of Nina Medical Ltd. and warrants to purchase additional preferred shares (see Note 15). The preferred shares do not represent in-substance common stock as defined in ASC 323-10-15-13 through 15-19. Accordingly, the investment is not accounted for under the equity method. Instead, the preferred shares are measured in accordance with ASC 321 using the measurement alternative, as they do not have a readily determinable fair value. Under this approach, the investment is recorded at cost, adjusted for observable price changes in orderly transactions for the identical or a similar investment and for impairment.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Investments - Hedge Funds*

 

The Company accounted for its previously held investments in hedge funds in accordance with ASC 321, *Investments – Equity Securities*. Unrealized gains and losses resulting from the change in fair value of these securities are included in unrealized loss on investments - Hedge Funds in the consolidated statements of operations and comprehensive loss. During fiscal year 2025, the Company withdrew its remaining balance in Hedge Fund Investments.

*Corporate Bonds and US Treasury Bills* 

 

The Company's marketable securities are considered to be available-for-sale as defined under ASC 320, *Investments - Debt and Equity Securities*, and are recorded at fair value. Unrealized gains or losses are included in accumulated other comprehensive loss. Realized gains or losses are determined using the specific identification method and are released from accumulated other comprehensive loss and into earnings on the consolidated statements of operations and comprehensive loss. The Company did not hold any corporate bonds or US Treasury bills at October 31, 2025 and July 31, 2025.

*Long-Lived Assets* 

Equipment, buildings, leasehold improvements, and furniture and fixtures are recorded at cost less accumulated depreciation and amortization. The related depreciation and amortization are computed using the straight-line method over the estimated useful lives, which range as follows:

---

| | |
|:---|:---|
| **Classification** | **Years** |
| Building and improvements | 40 |
| Tenant improvements | 7-15 |
| Machinery and equipment | 3-5 |
| Other (primarily office equipment, furniture and fixtures) | 5 |

---

 

*Properties*

The Company owns a portion of the 6th floor of a building located at 5 Shlomo Halevi Street, in Jerusalem, Israel.

*Business Combinations*

The purchase price for acquisitions are allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The fair value of identifiable intangible assets is based on detailed valuations that use information and assumptions provided by management, including expected future cash flows. The Company allocates any excess purchase price over the fair value of the identifiable net assets and liabilities acquired to goodwill. Identifiable intangible assets with finite lives are amortized over their useful lives. Acquisition-related costs, including advisory, legal, accounting, valuation, and other costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

 

*Impairment of Long-Lived Assets*

 

In accordance with ASC 360, *Property, Plant, and Equipment*, the Company assesses the recoverability of long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If indicators of impairment exist, projected future undiscounted cash flows associated with the asset group are compared to its carrying amount to determine whether the asset group's carrying value is recoverable. Any resulting impairment is recorded as a reduction in the carrying value of the related asset in excess of fair value and a charge to operating results.

For the three months ended October 31, 2025 and 2024, the Company determined there was no impairment of its long-lived assets.

*Goodwill*

 

The Company assesses goodwill for impairment on an annual basis or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired. The Company regularly monitors current business conditions and other factors including, but not limited to, adverse industry or economic trends and lower projections of profitability that may impact future operating results. The process of evaluating the potential impairment of goodwill requires significant judgment. In performing the Company's annual goodwill impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of any of the Company's reporting units is less than its carrying amount, including goodwill. In performing the qualitative assessment, the Company considers certain events and circumstances specific to the reporting unit and the entity as a whole, such as macroeconomic conditions, industry and market considerations, overall financial performance and cost factors when evaluating whether it is more likely than not that the fair value of any of the reporting units is less than its carrying amount. The Company is also permitted to bypass the qualitative assessment and proceed directly to the quantitative test. If the Company chooses to undertake the qualitative assessment and concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then proceed to the quantitative impairment test. In the quantitative assessment, the Company compares the fair value of the reporting unit to its carrying amount, which includes goodwill. If the fair value exceeds the carrying value, no impairment loss exists. If the fair value is less than the carrying amount, a goodwill impairment loss is measured and recorded.

The Company assesses goodwill for impairment on an annual basis as of May 31, or more frequently when events and circumstances occur indicating that recorded goodwill may be impaired.

For the three months ended October 31, 2025 and 2024, the Company determined there was no impairment of goodwill.

*In-Process Research and Development*

The Company has acquired in-process research and development ("IPR&D") intangible assets pursuant to a business combination. These IPR&D assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. These IPR&D assets are not amortized but reviewed for impairment analysis on an annual basis on May 31, or when events or changes in the business environment indicate the carrying value may be impaired. The process of evaluating the potential impairment of IPR&D requires significant judgment. In performing the Company's annual IPR&D impairment test, the Company is permitted to first assess qualitative factors to determine whether it is more likely than not that the fair value of any of the Company's reporting units is less than its carrying amount, including IPR&D. In performing the qualitative assessment, the Company considers the results of clinical trials, among other factors, when evaluating whether the IPR&D is impaired.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

Acquired IPR&D pursuant to an asset acquisition that has no alternative future use is expensed immediately as a component of in-process research and development expense in the consolidated statements of operations and comprehensive loss.

For the three months ended October 31, 2025 and 2024, the Company determined there was no impairment of IPR&D.

*Clinical Trial Accruals*

 

The Company estimates the clinical trial accrual related to its obligations for services performed on their behalf by third-party vendors. The amount recorded for the clinical trial accrual represents the Company's evaluation of the progress to completion of specific tasks and the facts and circumstances known at the time of the estimate as it relates to clinical trial activities.

*Revenue Recognition*

The Company applies the five-step approach as described in ASC 606, *Revenue from Contracts with Customers*, which consists of the following: (i) identifying the contract with a customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations in the contract, and (v) recognizing revenue when (or as) the entity satisfies a performance obligation. The Company disaggregates its revenue by source within its consolidated statements of operations and comprehensive loss.

<u>Infusion Technology Revenue:</u> 

The Company's Infusion Technology revenue is derived from Day Three's Unlokt<sup>TM</sup> technology which is recognized in accordance with ASC 606. Day Three provides manufacturing services where it uses proprietary technology, equipment, and processes to manufacture water-soluble product for their customers at their customer facilities. Day Three is acting as a principal in the transaction, as it is primarily responsible for fulfillment and acceptability of the services. Infusion Technology revenue is recognized over time as the Company's performance obligation is satisfied, which is generally within a 30-day period. The criterion in ASC 606-10-25-27, that the entity's performance creates or enhances an asset that the customer controls as the asset is created or enhanced, is met given that the customer is controlling the product as Day Three is performing the service on the customer's premises. Revenue is recognized over the period of performance using an output method where the number of grams produced is the output, as such method best depicts the Company's efforts to satisfy the performance obligation. Customer billings in advance of revenue recognition result in contract liabilities. As of October 31, 2025 and July 31, 2025, there were no contract liabilities recognized on the consolidated balance sheets related to Infusion Technology revenue.

The cost of Infusion Technology revenue includes costs related to supplies, materials, production labor, and travel costs.

<u>Rental Revenue:</u>

As an owner and operator of real estate, the Company derives rental revenue from leasing office and parking space to tenants at its property. 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.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

<u>Product Revenue:</u>

The majority of the Company's product revenue is generated in North America from companies in the pharmaceutical industry that are manufacturing or conducting research. In other countries, the Company sells products primarily to wholesale distributors and other third-party distribution partners.

Revenues from product sales are recognized when the customer obtains control of the product, which occurs at a point in time, typically upon delivery to the customer. The Company expenses incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that the Company would have recognized is one year or less or the amount is immaterial. Shipping and handling costs performed after a customer obtains control of the product are treated as a fulfillment cost. The Company has identified one performance obligation in its contracts with customers which is the delivery of product. The transaction price is recognized in full when the product is delivered to the customer, which is the point at which the Company has satisfied its performance obligation.

 

*Research and Development Costs*

Research and development costs and expenses incurred by consolidated entities 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 recorded as research and development expense when there is no alternative future use associated with the intellectual property. There were no such payment expenses during the three months ended October 31, 2025 and 2024.

 

*Stock-Based Compensation*

The Company accounts for stock-based compensation using the provisions of ASC 718, *Stock-Based Compensation*, which requires the recognition of the fair value of stock-based compensation. Stock-based compensation is estimated at the grant date based on the fair value of the awards. The Company accounts for forfeitures of grants as they occur. Compensation cost for awards is recognized using the straight-line method over the vesting period. Stock-based compensation is included in general and administrative expense and research and development expense in the consolidated statements of operations and comprehensive loss.

 

*Income Taxes*

The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to temporary differences between the consolidated 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.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

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 consolidated 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 consolidated 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 consolidated financial statements indicates that it is probable that a liability had been incurred at the date of the consolidated 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 - quoted prices in active markets for identical assets or liabilities;

● Level 2 - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

● Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

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 subsidiaries operating outside of the United States is the New Israeli Shekel, or NIS, the currency of the primary economic environment in which such subsidiaries primarily expend cash. The Company translates those subsidiaries' 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 consolidated 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, which are not of a long-term investment nature, as part of other comprehensive loss.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Warrants*

 

The Company accounts for warrants to purchase its Class B common stock as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants considering the authoritative guidance in ASC 480, *Distinguishing Liabilities from Equity* ("ASC 480") and ASC 815, *Derivatives and Hedging* ("ASC 815"). The assessment considers whether the warrants meet the definition of a liability pursuant to ASC 480 and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common stock and satisfy additional conditions for equity classification. Equity classified warrants are measured at fair value at their issuance date in accordance with ASC 820, *Fair Value Measurement*. Warrants that are liability-classified are measured at fair value at each reporting date in accordance with the guidance in ASC 820, with any subsequent changes in fair value recognized in the statement of operations in the period of change.

 

*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 Adopted Accounting Pronouncements*

 

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, with the goal of enhancing segment disclosures under Topic 280, Segment Reporting, which requires public entities to disclose significant segment expenses regularly provided to the chief operating decision-maker. Public entities with a single reporting segment have to provide all disclosures required by ASC 280, including the significant segment expense disclosures. This update is applicable for all public entities. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted the provisions of ASU 2023-07 as of July 31, 2025 on a retrospective basis. Refer to Note 22, Business Segment Information for the related segment disclosures.

*Recently Issued Accounting Standards Not Yet Adopted*

 

In December 2023, the FASB issued ASU 2023-09, *Income Taxes* (Topic 740): I*mprovements to Income Tax Disclosures*, which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. The guidance is effective for the Company's annual period ending on July 31, 2026, with early adoption permitted. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

 

On November 4, 2024, the FASB issued ASU 2024-03, *Disaggregation of Income Statement Expenses* ("DISE"), which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the consolidated financial statements. ASU 2024-03 is effective for all public business entities for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential impact that this standard may have on its consolidated financial statements and related disclosures.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. The Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

**NOTE 3 - CYCLO MERGER**

On March 25, 2025, the Company, Cyclo, Tandem Therapeutics, Inc., a wholly-owned subsidiary of the Company ("First Merger Sub"), and Tandem Therapeutics, LLC, a wholly-owned subsidiary of the Company ("Second Merger Sub"), completed a business combination transaction pursuant to which: (i) First Merger Sub merged with and into Cyclo, with Cyclo being the surviving entity (the "First Merger"), and (ii) immediately following the First Merger, Cyclo merged with and into Second Merger Sub, with Second Merger Sub being the surviving entity (the "Surviving Entity") of the subsequent merger (the "Second Merger" and together with the First Merger, the "Merger"). As part of the Merger:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) The Company issued 7,132,228 shares of its Class B common stock in exchange for 20,234,468 shares of common stock of Cyclo ("Cyclo Common Stock") that were issued and outstanding immediately prior to March 25, 2025 (the "Closing Date"), based on an exchange ratio equal to 0.3525 (the "Exchange Ratio");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) All compensatory options (the "Historical Cyclo Options") to purchase Cyclo Common Stock that were outstanding immediately prior to the Merger were converted into options to acquire, on substantially similar terms and conditions, a number of shares, adjusted based on the Exchange Ratio, of the Company's Class B common stock (rounded down to the nearest whole share), at an adjusted exercise price per share based upon the Exchange Ratio (rounded up to the nearest whole cent) (the "Rollover Options");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Unless otherwise provided for in outstanding warrant agreements, all outstanding warrants to purchase Cyclo Common Stock (the "Cyclo Warrants"), other than those held by the Company (the "Rafael-Owned Cyclo Warrants", as defined in Note 4, which were cancelled), converted into warrants to purchase 1,087,100 shares of Rafael's Class B common stock, at an adjusted exercise price per share based upon the Exchange Ratio (the "Replacement Warrants"). Certain historical Cyclo Warrants provided the holder with the right to elect to receive cash payment in lieu of receiving warrants to purchase Rafael's Class B common stock and were settled through cash payments totaling $3.6 million; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) The outstanding principal and accrued interest on the Cyclo Convertible Notes, as defined in Note 5, were forgiven.

Upon consummation of, and as a result of the Merger, the Company became the primary beneficiary of Cyclo, a VIE that constitutes a business. In accordance with ASC 810, the initial consolidation of a VIE that is a business is a business combination and shall be accounted for in accordance with the provisions in ASC 805, *Business Combinations* ("ASC 805").

In accordance with the guidance for a step acquisition in ASC 805, Rafael recognized goodwill on the initial consolidation of Cyclo as of the Closing Date of the Merger, measured as the excess of (a) the sum of (i) the fair value of consideration transferred, (ii) the fair value of any noncontrolling interests in the acquiree, and (iii) the fair value of previously held equity interests, over (b) the net amount of the identifiable assets acquired and liabilities assumed measured in accordance with ASC 805.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The following table presents, in accordance with ASC 805, the sum of (i) the fair value of consideration transferred, (ii) the fair value of any noncontrolling interests in the acquiree, and (iii) the fair value of previously held equity interests (amounts in thousands):

---

| | |
|:---|:---|
| **Fair value of consideration** | |
| (i) Fair value of Rafael common shares issued<sup>1</sup> | $14692 |
| Fair value of Rollover Options<sup>2</sup> | 360 |
| Fair value of Replacement Warrants<sup>3</sup> | 472 |
| Cash paid to extinguish warrants<sup>4</sup> | 3586 |
| Fair value of the Cyclo Convertible Notes which were forgiven<sup>5</sup> | 21472 |
| **(ii) Fair value of noncontrolling interests** |  |
| **(iii) Fair value of previously held equity interests<sup>6</sup>** | 9367 |
| **Total consideration** | $**49949** |

---

<sup>(1)</sup> The fair value of the 7,132,228 shares of Rafael Class B common stock issued was measured utilizing the share price of Rafael's Class B common stock of $2.06, which was the closing share price on March 25, 2025.

<sup>(2)</sup> Represents the fair value-based measure of the Rollover Options issued by the Company that is attributable to pre-Merger vesting based on the fair-value-based measure of the Cyclo Options over the requisite service period. The fair value of the Rollover Options was measured utilizing a share price of Rafael Class B common stock of $2.06 and the pre-Merger fair value of the historical Cyclo Options was measured utilizing a share price of Cyclo Common Stock of approximately $0.72, which were their respective closing share prices on March 25, 2025.

<sup>(3)</sup> Represents the fair value of the Replacement Warrants that were measured utilizing a share price of Rafael's Class B common stock of $2.06, which was the closing share price on March 25, 2025.

<sup>(4)</sup> Represents the cash-settlement amount paid to the holders of certain Cyclo Warrants that exercised their rights under provisions within their warrant agreements that granted the holders an option to elect cash-settlement upon certain events. The Merger with Cyclo triggered the option to elect cash-settlement and certain holders of these certain warrants elected to receive cash payment in lieu of receiving warrants to purchase Rafael Class B common stock.

<sup>(5)</sup> Represents the outstanding principal and accrued interest on the Cyclo Convertible Notes which were forgiven as part of the Merger. At the Closing Date of the Merger, the fair value of the Cyclo Convertible Notes equaled the outstanding principal and accrued interest of $21.5 million.

<sup>(6)</sup> Rafael's Prior Investment in Cyclo, as defined in Note 4, represents previously held equity interests in Cyclo that were included in the purchase price at their fair values as of the closing of the Merger. Rafael's ownership of 12,998,194 shares of Cyclo Common Stock prior to the Merger was valued at $9.4 million based on the share price of Cyclo Common Stock of approximately $0.72, which was the closing share price on March 25, 2025. The Rafael-Owned Cyclo Warrants are ascribed a fair value of $0 in the measurement of previously held equity interests above as their exercise prices were greater than the share price of Cyclo Common Stock of approximately $0.72, which was the closing share price on March 25, 2025 and the Rafael-Owned Cyclo Warrants were cancelled at the consummation of the Merger.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The following table presents the preliminary fair values of the identifiable assets acquired and liabilities assumed and goodwill recognized, measured in accordance with ASC 805 (amounts in thousands):

---

| | |
|:---|:---|
| **Assets acquired and liabilities assumed** | |
| Cash | $877 |
| Accounts receivable | 112 |
| Inventory | 270 |
| Prepaid expenses and other current assets | 2690 |
| Property and equipment | 22 |
| Prepaid expenses, noncurrent | 1041 |
| Other assets | 27 |
| Other receivable | 933 |
| Intangible assets - customer relationships | 1040 |
| Acquired In Process Research & Development (IPR&D) | 30000 |
| Accounts payable | (5208) |
| Accrued expenses | (1464) |
| Other current liabilities | (20) |
| Deferred tax liabilities | (303) |
| Other liabilities | (7) |
| **Total identifiable net assets acquired** | $**30010** |
| **Goodwill** | $**19939** |

---

The preliminary fair values of the assets acquired and liabilities assumed in the Merger are subject to change as the Company performs additional reviews of the assumptions utilized. Further adjustments may be necessary as additional information related to the fair values of assets acquired, liabilities assumed, and tax implications thereon is assessed during the measurement period (up to one year from the acquisition date). The final purchase accounting will be completed within the one-year measurement period following the Closing Date of the Merger.

The Company incurred transaction costs of $0.1 million during the three months ended October 31, 2024 for consulting, legal, accounting, and other professional fees that have been expensed as general and administrative expenses, as incurred, in connection with the Merger.

To value the IPR&D and Customer Relationships, the Company utilized the Multi-Period Excess Earnings Method ("MPEEM"), under the Income Approach. The method considers the present value of excess earnings generated by Cyclo's IPR&D and customers after taking into account the cost to realize the revenue, charges for contributory assets and an appropriate discount rate to reflect the time value and risk associated with the invested capital. IPR&D acquired represents Cyclo's research and development activities related to its lead drug candidate Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for NPC1. The acquired Customer Relationships are related to Cyclo's Specialty Chemicals business. The identifiable intangible assets associated with Customer Relationships are being amortized on a straight-line basis over their preliminary estimated useful lives of eight years. IPR&D is considered an indefinite lived asset.

The Merger has been treated as a tax-free reorganization and therefore Cyclo's tax basis in the assets acquired and liabilities assumed will carry over. Accordingly, the Company recognized net deferred tax liabilities associated with the Merger of $0.3 million.

The goodwill acquired, which is not tax deductible, represents the excess of the purchase price over the fair values of the net identifiable assets of the business acquired.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Pro Forma Financial Information*

The following pro forma condensed combined financial information has been prepared to present the combination on a pro forma basis of the historical consolidated financial statements of Rafael and the historical financial statements of Cyclo, after giving effect to the Merger, as if the Merger had occurred on August 1, 2023.

The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the Merger with Cyclo had taken place on the date noted above, or of results that may occur in the future.

---

| | |
|:---|:---|
| ***(in thousands)*** | **Three months<br> ended<br> October 31, <br> 2024** |
| Revenue | $362 |
| Loss from operations | (13414) |
| Net loss attributable to common stockholders | (11699) |

---

The pro forma loss from operations for the three months ended October 31, 2024 includes $1.2 million of transaction costs related to the Merger, of which $0.7 million was incurred by Cyclo and $0.5 million was incurred by Rafael.

**NOTE 4 – INVESTMENT IN CYCLO THERAPEUTICS, LLC.**

On December 23, 2024, Rafael exercised its discretionary conversion option under the Cyclo Convertible Notes (refer to Note 5) converting $2.5 million in outstanding principal amount of the Cyclo Convertible Note III, issued on August 21, 2024, into 3,968,254 shares of Cyclo Common Stock. Following the Conversion, Rafael's ownership increased to 12,998,194 shares, representing ownership of 39.5% of the outstanding Cyclo Common Stock.

Prior to the Merger, William Conkling, who served as Rafael's CEO, was a member of Cyclo's Board of Directors.

Prior to the Merger, the Company had determined that Cyclo was a VIE; however, the Company determined that it was not the primary beneficiary as the Company did not have the power to direct the activities of Cyclo that most significantly impacted Cyclo's economic performance and, therefore, was not required to consolidate Cyclo.

Prior to the Merger, Rafael's ownership of 12,998,194 shares of outstanding Cyclo Common Stock and the Rafael-Owned Cyclo Warrants are collectively referred to herein as "Rafael's Prior Investment in Cyclo".

The Company elected to account for its investment in Cyclo under the fair value option, with subsequent changes in fair value recognized as Unrealized (gain) loss on investment - Cyclo in the consolidated statements of operations and comprehensive loss. During the three months ended October 31, 2024, the Company recognized an unrealized loss of $4.4 million related to its investment in Cyclo common stock and warrants.

On March 25, 2025, Rafael consummated the Merger with Cyclo. As part of the Merger, Rafael's Prior Investment in Cyclo represented previously held equity interests in Cyclo that were included in the purchase consideration at their fair values as of the closing of the Merger. See Note 3 for additional information regarding the Merger.

**NOTE 5 – CONVERTIBLE NOTES RECEIVABLE, DUE FROM CYCLO THERAPEUTICS, LLC.**

On June 11, 2024, the Company entered into a Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the "Cyclo Convertible Note I") to the Company for $2 million in cash. The Cyclo Convertible Note I was issued with a maturity date of November 11, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note I is convertible into shares of Cyclo Common Stock at the option of the Company unless converted automatically upon certain events, as defined in the Cyclo Convertible Note I Note Purchase Agreement.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

On July 16, 2024, the Company entered into a First Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the "Cyclo Convertible Note II") to the Company for $2 million in cash. The Cyclo Convertible Note II was issued with a maturity date of November 11, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note II is convertible into shares of Cyclo Common Stock at the option of the Company unless converted automatically upon certain events, as defined in the Cyclo Convertible Note II Note Purchase Agreement.

On August 21, 2024, Rafael entered into a Second Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million to Rafael for $3 million (the "Cyclo Convertible Note III") in cash. The Cyclo Convertible Note III was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note III is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo to Rafael in connection with previous loans if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On September 9, 2024, Rafael entered into a Third Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million (the "Cyclo Convertible Note IV") to Rafael for $3 million in cash. The Cyclo Convertible Note IV was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note IV is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo to Rafael in connection with previous loans if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On October 8, 2024, Rafael entered into a Fourth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million (the "Cyclo Convertible Note V") to Rafael for $3 million in cash. The Cyclo Convertible Note V was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note V is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo to Rafael in connection with previous loans if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

Also on October 8, 2024, Rafael entered into an Amendment to Convertible Promissory Notes whereby the maturity dates of the Cyclo Convertible Note I and the Cyclo Convertible Note II were amended to be December 21, 2024, such that each of the Cyclo Convertible Notes that were outstanding as of October 8, 2024 had a maturity date of December 21, 2024 as of the date of this amendment. The maturity date of the Cyclo Convertible Notes was subsequently amended, as discussed below.

On November 7, 2024, the Company entered into a Fifth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the "Cyclo Convertible Note VI") for $2 million in cash. The Cyclo Convertible Note VI was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note VI is convertible into shares of Cyclo Common Stock at the option of the Company (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo in connection with previous loans if, following such conversion, the Company will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

On December 5, 2024, the Company entered into a Sixth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $1 million (the "Cyclo Convertible Note VII") for $1 million in cash. The Cyclo Convertible Note VII was issued with a maturity date of December 21, 2024 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note VII is convertible into shares of Cyclo Common Stock at the option of the Company (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo in connection with previous loans if, following such conversion, the Company will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On December 21, 2024, Rafael entered into an Amendment to Convertible Promissory Notes whereby the maturity date of each of the Cyclo Convertible Notes was amended to be February 15, 2025. The maturity date of the Cyclo Convertible Notes was subsequently amended, as discussed below.

On December 23, 2024, Rafael exercised its discretionary conversion option under the Cyclo Convertible Notes, converting $2.5 million in outstanding principal amount of the Cyclo Convertible Note III into 3,968,254 shares of Cyclo Common Stock at a conversion price of $0.63 per share, which was the closing price of Cyclo Common Stock on The NASDAQ Capital Market on December 20, 2024, the trading date immediately preceding the date of the conversion.

On January 3, 2025, Rafael entered into a Seventh Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $3 million (the "Cyclo Convertible Note VIII") to Rafael for $3 million in cash. The Cyclo Convertible Note VIII was issued with a maturity date of February 15, 2025 and was amended to a maturity date of March 31, 2025 as described below, and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note VIII is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes issued by Cyclo to Rafael in connection with previous loans) if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

On February 4, 2025, Rafael entered into an Eighth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2 million (the "Cyclo Convertible Note IX") to Rafael for $2 million in cash. The Cyclo Convertible Note IX was issued with a maturity date of March 31, 2025 and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note IX is convertible into shares of Cyclo Common Stock at the option of Rafael (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes issued by Cyclo to Rafael in connection with previous loans) if, following such conversion, Rafael will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

Also on February 4, 2025, Rafael entered into an Amendment to Convertible Promissory Notes whereby the maturity date of each of the Cyclo Convertible Notes was amended to be March 31, 2025.

On March 6, 2025, the Company entered into a Ninth Amended and Restated Note Purchase Agreement with Cyclo, pursuant to which Cyclo issued and sold a convertible promissory note in the principal amount of $2.5 million (the "Cyclo Convertible Note X") for $2.5 million in cash. The Cyclo Convertible Note X matures on March 31, 2025 and bears interest at a rate of 5% per annum, payable upon maturity. The principal amount of the Cyclo Convertible Note X is convertible into shares of Cyclo Common Stock at the option of the Company (provided, however, that Rafael may not elect to convert the convertible note (or prior convertible notes) issued by Cyclo in connection with previous loans if, following such conversion, the Company will beneficially own more than 49.9% of Cyclo Common Stock); and automatically on certain other events.

The Cyclo Convertible Note I, the Cyclo Convertible Note II, the Cyclo Convertible Note III, the Cyclo Convertible Note IV, the Cyclo Convertible Note V, the Cyclo Convertible Note VI, the Cyclo Convertible Note VII, the Cyclo Convertible Note VIII, the Cyclo Convertible Note IX, and the Cyclo Convertible Note X are collectively referred to as the "Cyclo Convertible Notes".

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

Prior to the Merger with Cyclo, the Cyclo Convertible Notes were required to be accounted for at fair value pursuant to ASC 825, *Financial Instruments* ("ASC 825"), at their respective dates of issuance and in subsequent reporting periods, as the Company elected to account for its prior investment in Cyclo Common Stock under the fair value option. The Company had elected to present interest income from the Cyclo Convertible Notes, together with the changes in fair value of the Cyclo Convertible Notes in unrealized gain/loss on convertible notes due from Cyclo on the consolidated statements of operations and comprehensive loss.

On March 25, 2025, Rafael consummated the Merger with Cyclo. As part of the Merger, the outstanding principal and accrued interest on the Cyclo Convertible Notes were forgiven and their fair values as of the Closing Date of the Merger, which equaled the outstanding principal and accrued interest through that date, is included in the purchase consideration of the Merger. See Note 3 for additional information regarding the Merger.

**NOTE 6 – INTERCOMPANY LINE OF CREDIT**

On February 3, 2020, Cornerstone entered into a Line of Credit with RP Finance ("RPF Line of Credit") which provided a revolving commitment of up to $50,000,000 to fund clinical trials and other capital needs. In connection with entering into the RPF Line of Credit, Cornerstone issued to RP Finance 261,230 shares (post-Reverse Stock Split) of Cornerstone Common Stock representing 12% of the issued and outstanding shares of Cornerstone Common Stock, with such interest subject to anti-dilution protection as set forth in the RPF Line of Credit.

The Company owns 37.5% of the equity interests in RP Finance, an entity associated with members of the family of Howard Jonas owns 37.5% of the equity interests in RP Finance, and the remaining 25% equity interests in RP Finance are owned by other stockholders of Cornerstone.

RP Finance had funded a cumulative total of $21.9 million to Cornerstone under the RPF Line of Credit, of which the Company had funded a cumulative total of $9.375 million in accordance with its 37.5% ownership interests in RP Finance. During fiscal year 2022, the amounts funded had been fully reserved.

On March 13, 2024, Cornerstone and RP Finance amended the RPF Line of Credit agreement. to (i) extend the maturity date of the approximately $21.9 million in borrowings thereunder to May 31, 2028, (ii) limit the number of shares to be issued thereunder in respect of anti-dilution protection provided for therein in connection with the Cornerstone Restructuring and to provide RP Finance 3,658,368 shares of post-Reverse Stock Split Cornerstone Common Stock so that following the transaction, RP Finance holds six percent (6%) of the outstanding Common Stock of Cornerstone (the "RPF 6% Top Up Shares"), (iii) terminate any anti-dilution protection in respect of such ownership interest following consummation of the transaction, and (iv) terminate all future lending obligations of RP Finance under the RPF Line of Credit (as so amended, the "Amended RPF Line of Credit").

The Company assumed Cornerstone's liability to RP Finance under the Amended RPF Line of Credit at its fair value in the Cornerstone Acquisition and acquired RP Finance's receivable from Cornerstone under the Amended RPF Line of Credit at its fair value in the RP Finance Consolidation. These intercompany amounts are eliminated in consolidation. The Company will accrete the fair value of Cornerstone's liability and RP Finance's receivable under the Amended RPF Line of Credit to the amount due on May 31, 2028 as interest expense and interest income, respectively, in the consolidated statements of operations and comprehensive loss over the estimated term of the Amended RPF Line of Credit.

**NOTE 7 - CONVERTIBLE NOTES PAYABLE**

As of October 31, 2025, Cornerstone has $659 thousand in principal, and $256 thousand of accrued interest thereon, of Series C Convertible Notes outstanding (the "Series C Convertible Notes"). The Series C Convertible Notes accrue interest at a rate of 3.5% per annum and are due, together with accrued interest, one year (unless amended) from the date of issuance and automatically accelerate upon the sale of Cornerstone in its entirety or the sale or license of substantially all of Cornerstone's assets or intellectual property. The Series C Convertible Notes (including all accrued and unpaid interest thereon) automatically convert into the same class of securities (including stock warrants) sold in the Cornerstone's equity financing (i) where Cornerstone receives gross proceeds of at least $10,000,000 from Institutional Investors (a "Qualified Financing"), or (ii) from an underwritten initial public offering ("IPO"). The conversion price of the Series C Convertible Notes upon a Qualified Financing shall be the lesser of (i) 90% of the price per share (or unit) at which the securities in the Qualified Financing are sold, or (ii) $1.25 price per share (or unit) (whichever is less) at the holder's selection of (i) or (ii), and 90% of the share price per share (or unit) at which securities in an IPO are first sold.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The outstanding Series C Convertible Notes are convertible, at the option of the holders, in certain equity financings consummated by Cornerstone or into equity securities and warrants to purchase equity securities of Cornerstone.

In the event of a liquidation event of Cornerstone prior to the repayment or conversion of the Series C Convertible Notes, the holders are entitled to receive either (a) an amount equal to the outstanding principal and interest due, or (b) the pro rata per share amount of the proceeds of such liquidation the holders would be entitled to had they exercised their conversion right.

Of the Series C Convertible Notes outstanding as of October 31, 2025:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Series C Convertible Notes with an aggregate principal amount of $608 thousand were not amended in connection with the Cornerstone Restructuring. The interest accrued on these Series C Convertible Notes as of October 31, 2025 is $237 thousand and is recorded in accrued expenses on the consolidated balance sheet. In the Cornerstone Acquisition, Rafael recorded these Series C Convertible Notes as current liabilities at the value of their aggregate principal amount of $614 thousand, and $205 thousand of accrued interest thereon recorded in accrued expenses on the consolidated balance sheet as of the date of the Cornerstone Acquisition, as these values approximate their fair values. As of October 31, 2025, these Series C Convertible Notes are currently in default as they are beyond the maturity date; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Series C Convertible Notes with an aggregate principal amount of $52 thousand were amended in the Cornerstone Restructuring to (i) extend the maturity date thereof to May 31, 2028 and (ii) provide that, on conversion thereof, the converting holder will receive shares of Cornerstone Common Stock. The holders of these amended Series C Convertible Notes that remain outstanding waived such holders' rights in connection with the Cornerstone Restructuring. The interest accrued on these Series C Convertible Notes as of October 31, 2025 is $19 thousand. In the Cornerstone Acquisition, Rafael recorded these Series C Convertible Notes as noncurrent liabilities at their fair value of $70 thousand, which considers the aggregate principal plus accrued interest. The Company will accrete the fair value of these Series C Convertible Notes to the value of the principal plus accrued interest thereon as of the date of the Cornerstone Acquisition as interest expense in the consolidated statements of operations and comprehensive loss over the estimated term of these amended Series C Convertible Notes.

During the three months ended October 31, 2025, the Company entered into settlement agreements with three holders of Series C Convertible Notes. Under these agreements, the Company settled a combined principal and interest balance of $26 thousand and $10 thousand, respectively, for cash payments totaling approximately $2 thousand. The Company recognized a gain on settlement of convertible notes of $34 thousand, which is included in other income, net on the consolidated statements of operations and comprehensive loss.

During the three months ended October 31, 2025, the Company recorded $6 thousand of interest expense in relation to the Cornerstone Series C Convertible Notes to interest expense on the consolidated statements of operations and comprehensive loss.

During the three months ended October 31, 2024, the Company recorded $9 thousand of interest expense in relation to the Cornerstone Series C Convertible Notes, to interest expense on the consolidated statements of operations and comprehensive loss.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 8 - ACCRUED EXPENSES**

Accrued expenses consist of the following:

---

| | | |
|:---|:---|:---|
|  | **October 31,<br> 2025** | **July 31,<br> 2025** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| *Accrued expenses, current* |  |  |
| Accrued severance expenses | $1022 | $1179 |
| Accrued bonuses | 948 | 814 |
| Accrued professional fees | 549 | 407 |
| Accrued interest | 237 | 235 |
| Accrued clinical trial expense | 896 | 571 |
| Other accrued expenses | 208 | 98 |
| Total accrued expenses, current | 3860 | 3304 |
| Creditor payable, noncurrent | 3751 | 3602 |
| Accrued severance, noncurrent | 147 | 293 |
| Total accrued expenses, noncurrent | 3898 | 3895 |
| Total accrued expenses | $7758 | $7199 |

---

*Creditor Payable*

In the Cornerstone Acquisition, Rafael assumed a forbearance agreement, signed by Cornerstone on June 2, 2023, with a major creditor (the "Creditor") of Cornerstone to which Cornerstone owed approximately $10.5 million arising from unpaid amounts in connection with work performed and costs incurred by the Creditor under previous work orders. The outstanding balance does not bear interest. As part of Cornerstone's plan to seek new capitalization, it paid $2.0 million following the execution of a change order on July 21, 2023. Cornerstone also agreed to an additional payment of $2.0 million upon the issuance of an FDA authorization to market any product of Cornerstone (the "FDA Approval Payment"). In the event Cornerstone completes a capital transaction which results in an aggregate of $100 million in additional capital received after January 1, 2023, Cornerstone agrees to pay an additional $4.0 million to the Creditor within 15 days of such capital transaction (the "Capital Raise Payment"). In exchange for Cornerstone's agreement to make timely payments of the above-mentioned sums due in the Agreement, and after the payment of the FDA Approval Payment and the Capital Raise Payment, the Creditor will waive approximately $2.5 million of outstanding debt representing all remaining amounts due to the Creditor.

Following the payment of the initial $2.0 million, and pursuant to the terms of the agreement, the Creditor agreed to forbear from exercising any of its rights, remedies or claims in respect to the outstanding balance. The forbearance shall not be deemed to have otherwise waived, released, or adversely affected any of the Creditor's rights, remedies or claims in respect to the outstanding balance.

As part of the Cornerstone Acquisition, the creditor payable was recognized by the Company as an assumed liability and measured at its fair value of $2.7 million as of the date of the Cornerstone Acquisition. The Company will accrete the fair value of the creditor payable to the amount payable of $8.5 million owed to the Creditor as interest expense in the consolidated statements of operations and comprehensive loss over the estimated term of the forbearance agreement through July 31, 2033. The Company recorded $156 thousand of accretion in relation to the creditor payable recorded to interest expense in the consolidated statements of operations and comprehensive loss for both the three months ended October 31, 2025 and 2024.

The carrying value of the creditor payable was $3.8 million and $3.6 million as of October 31, 2025 and July 31, 2025, respectively, and is included in accrued expenses, noncurrent on the consolidated balance sheets.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 9 – CONVERTIBLE NOTES RECEIVABLE**

On March 8, 2024, Day Three entered into a convertible note subscription agreement with a third-party company, Steady State LLC. Steady State LLC promises to pay Day Three $1.0 million, together with interest, on October 16, 2026. The convertible note accumulates simple interest at an annual rate equal to the lesser of: (i) the Bank of England base rate (updated on the first business day of each quarter) plus eight (8) percentage points, or (ii) 15% (computed on the basis of 365 days per year). Upon the closing and funding of a bona fide offering of equity securities by Steady State, LLC in an aggregate amount of at least $5.0 million, the convertible note will automatically convert into the number of membership interests equal to the outstanding principal plus accrued and unpaid interest divided by eighty percent (80%) of the price per membership unit in the offering. If a qualifying bona fide offering has not occurred on or before the maturity date, the principal and unpaid accrued interest of the convertible note may be converted, at the option of Day Three, into membership units.

In March 2025, Day Three Labs Manufacturing received a convertible promissory note with a principal amount of $500 thousand from SoRSE Technology Corporation ("SoRSE"), a Delaware corporation, as part of the DTLM Sale Transactions. The note bears interest at an annual rate of 4%, commencing on the 91st day following the issuance date. The outstanding principal and accrued interest due under the note will automatically convert into shares of common stock of SoRSE upon the occurrence of a qualified sale or financing transaction, as defined in the note. If the note has not been fully converted prior to its September 2026 maturity date, Day Three Labs Manufacturing may convert all or any portion of the outstanding principal and accrued interest into the most senior class or series of capital stock of SoRSE.

The Company's convertible notes receivable are classified as available-for-sale and recorded at fair value (see Note 10).

**NOTE 10 – FAIR VALUE MEASUREMENTS**

Fair value is defined as 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. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

**●** **Level 1** - quoted prices in active markets for identical assets or liabilities;

**●** **Level 2** - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

**●** **Level 3** - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

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 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 October 31, 2025 and July 31, 2025 are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **October 31, 2025** | **October 31, 2025** | **October 31, 2025** | **October 31, 2025** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Assets: | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Convertible notes receivable classified as available-for-sale | $— | $— | $1858 | $1858 |
| Total | $— | $— | $1858 | $1858 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **July 31, 2025** | **July 31, 2025** | **July 31, 2025** | **July 31, 2025** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| Assets: | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Convertible notes receivable classified as available-for-sale |  |  | 1858 | 1858 |
| Total | $— | $— | $1858 | $1858 |

---

As of October 31, 2025 and July 31, 2025, the Company did not have any liabilities measured at fair value on a recurring basis.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,** |
|  | **2025** | **2024** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Balance, beginning of period | $1858 | $10148 |
| Withdrawal from Hedge Fund Investments |  | (2547) |
| Unrealized loss on Cyclo Warrants |  | (391) |
| Funding of Cyclo Convertible Notes |  | 9000 |
| Change in fair value of Cyclo Convertible Notes |  | (1588) |
| Change in fair value of Convertible note receivable |  | 15 |
| Balance, end of period | $1858 | $14637 |

---

Available-for-sale securities classified as Level 3 include convertible notes receivable which may not be based on readily observable data inputs. The availability of observable inputs can vary 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 using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to us, including cash repayment, equity conversion, and collateral transfer scenarios. Estimating the fair value of the convertible notes receivable requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Therefore, these assets are classified as Level 3.

*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.

The Company's financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amounts of accounts receivable, accounts payable and due to related parties approximate their fair value due to their short-term nature.

**NOTE 11 – ACCOUNTS RECEIVABLE**

Accounts receivable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **October 31,<br> 2025** | **July 31,<br> 2025** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Accounts receivable - third party | $522 | $777 |
| Accounts receivable - related party | 136 | 95 |
| Less allowance for credit losses | (245) | (245) |
| Accounts receivable, net | $413 | $627 |

---

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**NOTE 12 – PROPERTY AND EQUIPMENT**

Property and equipment consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **October 31,<br> 2025** | **July 31,<br> 2025** |
|  | ***(in thousands)*** | ***(in thousands)*** |
| Building and improvements | $2505 | $2505 |
| Machinery and equipment | 21 | 22 |
| Other | 63 | 81 |
|  | 2589 | 2608 |
| Less accumulated depreciation and amortization | (1027) | (1012) |
| Total | $1562 | $1596 |

---

Other property and equipment consist of other equipment and miscellaneous computer hardware.

Depreciation expense and amortization expense pertaining to property and equipment was approximately $18 thousand and $48 thousand for the three months ended October 31, 2025 and 2024, respectively.

**NOTE 13 - GOODWILL AND INTANGIBLE ASSETS**

*<u>Impairment</u>*

 

The Company assesses goodwill and indefinite-lived intangible assets, including IPR&D, for impairment at least annually at May 31, or more frequently if events or changes in the business environment indicate the carrying value may be impaired. The Company assesses the recoverability of long-lived assets, which include property and equipment and finite-lived intangible assets, whenever significant events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable.

 

*<u>Goodwill</u>*

 

The following is a summary of goodwill by reportable segment as of October 31, 2025 and July 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Healthcare** | **Real Estate** | **Infusion Technology** | **Consolidated** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| **Balance as of July 31, 2025** | $19939 | $— | $— | $19939 |
| **Balance as of October 31, 2025** | $19939 | $— | $— | $19939 |

---

*<u>IPR&D</u>*

 

The Company has acquired in-process research and development intangible assets pursuant to a business combination. These IPR&D assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts.

The following is a summary of in-process research and development as of October 31, 2025 and July 31, 2025:

---

| | |
|:---|:---|
|  | ***(in thousands)*** |
| **Balance as of July 31, 2025** | $31575 |
| **Balance as of October 31, 2025** | $31575 |

---

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

 

*<u>Intangible assets</u>*

 

The following is a summary of intangible assets at October 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Weighted average remaining useful life (years)** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** |
|  |  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Customer Relationships | 8 | $1040 | $&nbsp;&nbsp;&nbsp;&nbsp; (78) | $962 |
| **Total Intangible Assets** |  | $1040 | $(78) | $962 |

---

The following is a summary of intangible assets at July 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Weighted average remaining useful life (years)** | **Gross Carrying Amount** | **Accumulated Amortization** | **Net Carrying Amount** |
|  |  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Customer Relationships | 8 | $1040 | $&nbsp;&nbsp;&nbsp;&nbsp; (46) | $994 |
| **Total Intangible Assets** |  | $1040 | $(46) | $994 |

---

Amortization expense for the next five years and thereafter for intangible assets is estimated to be as follows for years ending:

---

| | |
|:---|:---|
| **Year Ending July 31,** | **(in thousands)** |
| 2026 | $&nbsp;&nbsp;&nbsp;&nbsp; 98 |
| 2027 | 130 |
| 2028 | 130 |
| 2029 | 130 |
| 2030 | 130 |
| Thereafter | 344 |
| Total | $962 |

---

Amortization of intangible assets totaled $32 thousand and $38 thousand for the three months ended October 31, 2025 and 2024, respectively, and is included in depreciation and amortization expense within the consolidated statements of operations and comprehensive loss.

**NOTE 14 – 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 includes potentially dilutive securities such as stock options, unvested restricted stock, warrants to purchase common stock, and other convertible instruments unless the result of inclusion would be anti-dilutive.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The following table summarizes the Company's potentially dilutive securities which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,** |
|  | **2025** | **2024** |
| Shares issuable upon exercise of stock options | 1676670 | 638409 |
| Shares issuable upon vesting of restricted stock | 455875 | 478553 |
| Shares issuable upon exercise of warrants | 1058119 |  |
|  | 3190664 | 1116962 |

---

The diluted loss per share computation equals basic loss per share for the three months ended October 31, 2025 and 2024, because the Company had a net loss in both such periods and the impact of the assumed vesting of restricted shares, exercise of stock options, and exercise of warrants would have been anti-dilutive.

The following table summarizes the basic and diluted loss per share calculations (in thousands, except for share and per share amounts):

---

| | | |
|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,** |
|  | **2025** | **2024** |
| **Numerator:** |  |  |
| &nbsp;&nbsp;&nbsp;Net loss | $(9797) | $(9211) |
| &nbsp;&nbsp;&nbsp;Net income (loss) attributable to noncontrolling interests | 19 | (205) |
| Net loss attributable to Rafael Holdings, Inc. | $(9816) | $(9006) |
| **Denominator:** |  |  |
| Weighted average diluted shares | 51184407 | 24062854 |
| **Loss per share attributable to common stockholders** |  |  |
| Basic and diluted | $(0.19) | $(0.37) |

---

**NOTE 15 – RELATED PARTY TRANSACTIONS**

*IDT Corporation*

IDT Corporation ("IDT"), a related party through common ownership and some common members of management, has historically maintained a due to/from balance 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 as the relevant persons were also providing services to IDT. IDT billed the Company approximately $88 thousand and $70 thousand for services during the three months ended October 31, 2025 and 2024, respectively, of which $88 thousand and $59 thousand is included in due to related parties as of October 31, 2025 and July 31, 2025, respectively.

IDT currently leases approximately 3,600 square feet of office space and parking space in our real estate asset. The Company invoiced IDT approximately $30 thousand and $27 thousand for the three months ended October 31, 2025 and 2024, respectively. As of October 31, 2025 and July 31, 2025, IDT owed the Company approximately $133 thousand and $93 thousand, respectively, for office rent and parking plus Israeli value added tax.

*Related Party Rental Income*

The Company leased space to related parties (including IDT Corporation *–* see above) which represented approximately 13% and 21% of the Company's total revenue for the three months ended October 31, 2025 and 2024, respectively.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Howard S. Jonas, Chairman of the Board, Former Chief Executive Officer* 

On May 6, 2025, the Company entered into a Standby Purchase Agreement with Howard S. Jonas. The agreement was entered into in connection with a $25.0 million rights offering of Class B common stock undertaken by the Company at a subscription price of $1.28 per share (the "Rights Offering"). Eligible stockholders received non-transferable rights to purchase shares. The agreement also provided that within 10 days after the closing of the Rights Offering, Mr. Jonas would purchase, or cause other parties to purchase, from the Company in a private placement, any shares of Class B common stock included in the Rights Offering that were not subscribed for and purchased by other eligible stockholders for the same subscription price of $1.28.

Following the expiration of the Rights Offering on June 4, 2025, certain related parties of Howard S. Jonas purchased 16,386,020 shares of Class B common stock in a private placement for approximately $21.0 million, representing the unsubscribed portion of the offering. No fees were paid to Mr. Jonas for his commitment nor did the Company reimburse Mr. Jonas for any expenses related thereto. As of October 31, 2025, Mr. Jonas has voting power over 787,163 shares of Class A common stock (which are convertible into shares of Class B common stock on a 1-for-1 basis) and 14,050,076 shares of Class B common stock, approximately 28% of the Company's Class B Common Stock, representing approximately 51% of the combined voting power of the Company's outstanding capital stock.

*NINA Medical Ltd.*

On September 21, 2025, the Company entered into the Second Series Seed Preferred Share Purchase Agreement with NINA Medical Ltd. ("NINA"), pursuant to which the Company invested $500,000 in exchange for 86,983 Series Seed Preferred Shares, representing 6.3% of NINA's outstanding shares. In connection with the investment, the Company also received a warrant to purchase an additional 173,965 Seed Preferred Shares at an exercise price per share equal to $5.75, with a term of five years from the date of issuance.

The Seed Preferred Shares are convertible at the holder's option into ordinary shares without additional consideration and will automatically convert into ordinary shares upon a qualified IPO or upon the affirmative vote or written consent of the majority of the holders of preferred shares. Howard S. Jonas holds an indirect investment in NINA. For so long as these combined investments (that of the Company and Howard S. Jonas) represent more than 10% of the NINA's issued share capital, the investors are collectively entitled to designate one director, who can serve as Chairman of the Board of Directors of NINA (the "Seed Director"). Howard S. Jonas is currently serving as the Seed Director.

**NOTE 16 – INCOME TAXES**

During the three months ended October 31, 2025 and 2024, the Company recognized a provision for income taxes of $10 thousand and $12 thousand on losses before income tax of $9.8 million and $9.2 million, respectively. The change in income tax expense in relation to the loss before income tax was primarily due to differences in the amount of taxable loss in the various taxing jurisdictions and the associated valuation allowances.

**NOTE 17 – BUSINESS SEGMENT INFORMATION**

The Company conducts business as three operating segments, Healthcare, Infusion Technology and Real Estate. The Company's reportable segments are distinguished by types of service, customers and methods used to provide their services. The operating results of these business segments are regularly reviewed by the Company's Chief Financial Officer who is the chief operating decision-maker ("CODM").

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 Healthcare segment based primarily on results of clinical trials and loss from operations, and the Infusion Technology and Real Estate segments based primarily on revenues and income (loss) from operations. The CODM uses these measures to allocate the Company's resources. The CODM does not review any measure of significant segment expenses which differ from the level of reporting reflected in the tables below. Currently, the CODM does not review assets in evaluating the results of the operating segments, and therefore, such information is not presented.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The Healthcare segment is comprised of a majority equity interest in LipoMedix, Barer, Cornerstone, Cyclo, and Rafael Medical Devices. Following the Cyclo Merger, the Healthcare segment generated $154 thousand of product revenue during the three months ended October 31, 2025.

The Real Estate segment consists of the Company's real estate holdings, which are currently comprised of a portion of one commercial building in Israel.

The Infusion Technology segment is comprised of a majority equity interest in Day Three. Revenues associated with the Infusion Technology segment include Infusion Technology revenue derived from Day Three's Unlokt<sup>TM</sup> technology.

Operating results for the business segments of the Company are as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***(in thousands)*** | **Healthcare** | **Infusion Technology** | **Real Estate** | **Total** |
| **Three Months Ended October 31, 2025** | | | | |
| Product revenue | $154 | $&nbsp;&nbsp;&nbsp;&nbsp; — | $— | $154 |
| Rental – Third Party |  |  | 56 | 56 |
| Rental – Related Party |  |  | 30 | 30 |
| **COSTS AND EXPENSES** |  |  |  |  |
| Cost of product revenue | (9) |  |  | (9) |
| General and administrative | (2752) | (29) | (57) | (2838) |
| Research and development | (7484) |  |  | (7484) |
| Depreciation and amortization | (33) |  | (17) | (50) |
| Income (loss) from operations | $(10124) | $(29) | $12 | $(10141) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| ***(in thousands)*** | **Healthcare** | **Infusion Technology** | **Real Estate** | **Total** |
| **Three Months Ended October 31, 2024** | | | | |
| Infusion technology revenue | $— | $51 | $— | $51 |
| Rental – Third Party |  | &nbsp;&nbsp;&nbsp;&nbsp;— | 50 | 50 |
| Rental – Related Party |  |  | 27 | 27 |
| **COSTS AND EXPENSES** |  |  |  |  |
| Cost of Infusion Technology revenue |  | (37) |  | (37) |
| General and administrative | (2290) | (112) | (121) | (2523) |
| Research and development | (1161) | (165) |  | (1326) |
| Depreciation and amortization | (71) |  | (15) | (86) |
| Income (loss) from operations | $(3522) | $(263) | $(59) | $(3844) |

---

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

A reconciliation between loss from operations by reportable segment to consolidated net loss before income taxes for the three months ended October 31, 2025 and 2024, is as follows:

---

| | | |
|:---|:---|:---|
| ***(in thousands)*** | **October 31,<br> 2025** | **October 31,<br> 2024** |
| (Loss) income from operations by segment |  |  |
| Healthcare | $(10124) | $(3522) |
| Infusion Technology | (29) | (263) |
| Real Estate | 12 | (59) |
| Total | (10141) | (3844) |
| *Reconciliation to loss before income taxes:* |  |  |
| &nbsp;&nbsp;&nbsp;Interest income | 399 | 568 |
| &nbsp;&nbsp;&nbsp;Realized gain on available-for-sale securities |  | 194 |
| &nbsp;&nbsp;&nbsp;Unrealized loss on investment - Cyclo |  | (4365) |
| &nbsp;&nbsp;&nbsp;Unrealized loss on convertible notes receivable, due from Cyclo |  | (1588) |
| &nbsp;&nbsp;&nbsp;Interest expense | (160) | (162) |
| &nbsp;&nbsp;&nbsp;Other income (loss), net | 115 | (2) |
| Loss before income taxes | $(9787) | $(9199) |

---

 

*Geographic Information* 

 

<u>Healthcare Segment</u>

Revenue from the Healthcare segment was generated primarily from customers located in the United States. During the three months ended October 31, 2025, product revenue from the Healthcare Segment generated from customers outside of the United States was nominal.

<u>Infusion Technology Segment</u>

Revenue from the Infusion Technology segment was generated entirely from customers located in the United States.

 

<u>Real Estate Segment</u>

Revenue from the Real Estate segment was generated entirely from tenants located in Israel.

<u>Assets</u>

Net property, plant and equipment and total assets summarized by geographic area are as follows:

---

| | | | |
|:---|:---|:---|:---|
| ***(in thousands)*** | **United States** | **Israel** | **Total** |
| **October 31, 2025** | | | |
| Property, plant and equipment, net | $305 | $1257 | $1562 |
| Total assets | $103093 | $2282 | $105375 |
| **July 31, 2025** |  |  |  |
| Property, plant and equipment, net | $321 | $1275 | $1596 |
| Total assets | $111954 | $2155 | $114109 |

---

**NOTE 18 – COMMITMENTS AND CONTINGENCIES**

*Legal Proceedings*

 ****

The Company may from time to time be subject to legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company's results of operations, cash flows or financial condition.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*License Agreements*

Cornerstone is a party to two license agreements in connection with certain technology being used for products under development and is required to make certain annual maintenance payments. In addition, royalty payments, calculated on a low single digit percentage of net sales, as defined in the respective agreements, will be required upon the commercialization of licensed technology. Sublicensing fees are calculated and due based upon a percentage of gross sublicense fees. Cornerstone expenses license obligation payments to research and development on the consolidated statements of operations and comprehensive loss.

One worldwide license agreement requires Cornerstone to reimburse the other party for costs associated with filing and defending various patents worldwide. Payment obligations under this license agreement remain in effect until the last underlying patents granted under the license agreement expire in their respective countries. The last patent expired in 2019. License maintenance fees are currently $20,000 per year and continue for the term of the agreement, which expires in 2026. The license maintenance fees are replaced by minimum royalties of $10,000 during the first year following governmental approval to market products and escalates to $1,000,000 during the term of the agreement. Cornerstone is also responsible to pay fees on any sub-licensing of the licensed patents. Cornerstone may credit each annual license maintenance fee in full against all royalties and sublicensing fees due during the same calendar year. Cornerstone may terminate the license agreement upon 90 days' notice. Either party may terminate the license agreement if the other party commits any material breach of any covenant or promise and does not cure such breach within 30 days of the receipt of written notice of such material breach. In May 2017, Cornerstone renegotiated the agreement referred to as the "second license" In exchange for a waiver of certain product development milestones, Cornerstone modified the agreement to pay a low single digit percentage royalty for a duration of five years on Net Sales of product sold after the expiration of the licensed patent and potentially up to eight years. As of October 31, 2025, there are no products being marketed which are covered by the patents under the license agreement.

The remaining minimum payments required under the license agreement, assuming the agreement is not terminated by Cornerstone, excluding any escalation for receiving government marketing approval subsequent to July 31, 2018, are $20,000 per year. The agreement may continue until January 1, 2029 (if not earlier terminated).

Cornerstone's second license continues until the termination of the later of the last to expire patent or royalty obligation under the agreement on a country-by-country basis (currently, or as otherwise provided in the license agreement). Fifty percent of the maintenance fee payments, up to $1.1 million, may be credited against the potential future royalty payments, calculated on a single digit percentage of net sales, as defined, that Cornerstone would have to make to the license holder should royalties be paid. The agreement may be terminated on 15 days' written notice after default by the other party if said default is not cured within 30 days of receipt of notice by the defaulting party. In addition, Cornerstone may terminate the agreement on 15 days' written notice to the license holder. Royalties are due based on Gross Sales, as defined, for products sold relating to patented and unpatented technology, and shall terminate on the 15<sup>th</sup> anniversary of the first commercial sale of the product in the corresponding country or territory. Sublicense payments are due in connection with any sublicense fees received relating to patented and non-patented products related to the patented technology and proprietary know-how, as provided in the agreement. As of October 31, 2025, there were no products being marketed which are covered by the patents under the license agreement. There were no additional annual license maintenance fees required beyond 2010.

As part of a royalty agreement, Cornerstone is obligated to pay royalties, based upon percentage (low single digit) of net sales, to Altira Capital and Consulting LLC ("Altira"), a consolidated subsidiary of the Company. The royalty obligations remain in effect, on a country-by-country basis, until the last to expire patent claims associated with such products and services expire or are no longer in force. No payments have been made in connection with a royalty pool. As of October 31, 2025, the last to expire patent claim is to remain in force until fiscal year 2034.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

 

*Release Agreements*

 

On August 4, 2025, John Goldberg resigned as the Chief Medical Officer of the Company effective July 31, 2025. In connection with Dr. Goldberg's departure, the Company entered into a general release agreement pursuant to which Dr. Goldberg will receive severance in the amount of $218,195 and, in lieu of any entitlement for a performance bonus for the Company's fiscal year 2025, the Company issued to Dr. Goldberg 99,429 shares of the Company's Class B common stock which vested on November 10, 2025. On August 12, 2025, in connection with the separation, Dr. Goldberg also entered into a consulting agreement with the Company providing for annual fees of $100,000 and the accelerated vesting on November 10, 2025, of all stock options and restricted stock in the Company previously granted to Dr. Goldberg. During the three months ended July 31, 2025, the Company recognized $218,195 of severance expense to be paid subsequent to year end and approximately $96,000 of expense related to the shares to be issued related to the general release agreement with Dr. Goldberg which was included in research and development expense. During the three months ended October 31, 2025, the Company recognized $250,700 of expense related to the accelerated vesting of outstanding stock options and restricted stock in the Company which is included in research and development expense in the consolidated statements of operations and comprehensive loss.

On July 31, 2025, N. Scott Fine resigned as the Chief Executive Officer of Cyclo Therapeutics. In connection with Fine's departure, the Company entered into a general release agreement pursuant to which Fine will receive severance in the amount of $852,168, which will be paid to Fine semi-monthly in thirty-six (36) equal installments of $23,671.34 (less applicable taxes and withholdings). Effective August 1, 2025, Fine was named Vice-Chairman of the Board of Directors of the Company. Fine's outstanding and unvested equity awards shall continue to vest, in accordance with the terms of the 2021 Equity Incentive Plan and Cyclo Therapeutics, Inc. 2021 Omnibus Equity Incentive Plan through the last day of Employee's service as Vice-Chairman of the Company. The Company recognized $852,168 of severance expense during the three months ended July 31, 2025 related to the general release agreement with Fine which was included in general and administrative expense.

 ****

**NOTE 19 – 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.

*Equity Incentive Plans*

In March 2018, the Company established its 2018 Equity Incentive Plan. On January 19, 2022, the Company's stockholders approved the Company's 2021 Equity Incentive Plan (the "2021 Plan"). The 2018 Equity Incentive Plan was suspended and replaced by the 2021 Plan and, following January 19, 2022, no new grants are to be awarded under the 2018 Equity Incentive Plan. Existing grants under the 2018 Equity Incentive Plan were not be impacted by the adoption of the 2021 Plan. Any of the Company's employees, directors, consultants, and other service providers, and those of the Company's affiliates, are eligible to participate in the 2021 Plan. In accordance with applicable tax rules, only employees (and the employees of parent or subsidiary corporations) are eligible to be granted incentive stock options. The 2021 Plan authorizes stock options (both incentive stock options or non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, and cash or other stock-based awards. On January 19, 2022, the Company filed a Registration Statement on Form S-8 registering 1,919,025 shares of Class B common stock reserved for issuance under the 2021 Plan. On November 28, 2022, the Company's Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company's Class B common stock available for the grant of awards thereunder by an additional 696,770, which the stockholders approved on January 23, 2023. On January 9, 2025, the Company's Board of Directors approved an amendment to the 2021 Plan that, among other things, increases the number of shares of the Company's Class B common stock available for the grant of awards thereunder by an additional 750,000, which the stockholders approved on January 13, 2025. The maximum number of shares of Class B common stock that may be issued under the 2021 Plan is 3,365,795 shares. As of October 31, 2025, there were 29,892 shares still available for issuance under the 2021 Plan.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

*Stock Options* 

A summary of stock option activity for the Company is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of Options** | **Weighted Average Exercise Price** | **Weighted Average Remaining Contractual Term (in years)** | **Aggregate Intrinsic Value (in thousands)** |
| Outstanding at July 31, 2025 | 1652112 | $6.65 | 8.26 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;— |
| Granted | 24558 | 1.38 | 2.00 |  |
| Expired |  |  |  |  |
| Cancelled / Forfeited |  |  |  |  |
| **Outstanding at October 31, 2025** | **1676670** | $**6.31** | **7.97** | $**—**  |
| **Exercisable at October 31, 2025** | **917485** | $**9.72** | **7.32** | $**—**  |

---

At October 31, 2025, there were unrecognized compensation costs related to non-vested stock options of $608 thousand, which are expected to be recognized over the next 3.4 years.

 

The determination of the fair value of options granted during the three months ended October 31, 2025 used the following assumptions and key inputs:

---

| | |
|:---|:---|
|  | **October 31,<br> 2025** |
| Risk-free interest rate | 3.74% |
| Expected term (in years) | 5.72 |
| Expected volatility | 88% |
| Expected dividend yield | —% |

---

The weighted average fair value per share of stock options granted for the three months ended October 31, 2025 was $1.02.

*Rafael Medical Devices Stock Options* 

 

The Rafael Medical Devices 2022 Equity Incentive Plan (the "RMD 2022 Plan") was created and adopted by Rafael Medical Devices in May 2022. The RMD 2022 Plan allows for the issuance of up to 10,000 shares of Class B common stock which may be awarded in the form of incentive stock options or restricted shares.

In connection with the conversion of Rafael Medical Devices from a Delaware corporation to a Delaware limited liability company, Rafael Medical Devices adopted the Rafael Medical Devices, LLC 2023 Equity Incentive Plan (the "RMD 2023 Plan") in August 2023. The RMD 2023 Plan allows for issuance of up to 46,125 Class A Units. There were 16,872 Units available for issuance under the RMD 2023 Plan as of October 31, 2025.

Rafael Medical Devices, LLC records compensation expense for stock-based awards based upon an assessment of the grant date fair value for options using the Black-Scholes model. The expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, characteristics from comparable companies are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The risk-free interest rate is determined by reference to the U.S. Treasury Constant Maturity Treasury rates with remaining maturities similar to the expected term of the options. Expected dividend yield is zero as Rafael Medical Devices, LLC has never paid cash dividends and does not expect to pay cash dividends in the foreseeable future.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

A summary of option activity for Rafael Medical Devices, LLC is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br> Options** | **Weighted Average Exercise Price** | **Weighted Average Remaining Contractual Term (in years)** | **Aggregate Intrinsic Value (in thousands)** |
| Outstanding at July 31, 2025 | 16228 | $10.00 | 8.01 | $— |
| Cancelled / Forfeited |  |  |  |  |
| **Outstanding at October 31, 2025** | **16228** | $**10.00** | **7.76** | $**—**  |
| **Exercisable at October 31, 2025** | **16228** | $**10.00** | **7.76** | $**—**  |

---

At October 31, 2025, the total unrecognized compensation related to stock option awards granted was $96 thousand, which the Company expects to recognize over a weighted average period of approximately 1.8 years.

*Cornerstone Stock Options*

 

Cornerstone has outstanding stock options and non-qualified options to purchase Cornerstone's common stock which were granted under Cornerstone's 2009 and 2018 Stock Incentive Plans (the "Cornerstone Plans"), as well as additional options issued during a prior capital raise.

At October 31, 2025, there were 1,004,341 options outstanding granted under the Cornerstone Plans that are vested with a weighted average exercise price of $24.17 per share and a weighted average remaining contractual term of 4.4 years. The fair value of outstanding options granted under the Cornerstone Plans assumed during the Cornerstone Acquisition were determined to be de minimis.

In connection with Cornerstone's 2003 common stock offerings, Cornerstone entered into an option agreement with an individual in connection with identifying investors. The option agreement grants the right to purchase an option (a "Purchase Option") to purchase 472,000 Class A Options ("Class A Options"), which allows the purchase of 0.25 shares of common stock for each Class A Option at $11.00 per share. In order to secure this Class A Option, a Purchase Option must initially be purchased for $.005 per potential share of Class A options. Upon exercise of each Class A Option, a right is granted to one Class B Option ("Class B Options"), which allow the purchase of 0.25 shares of common stock for each Class B Option at $12.50 per share. The expiration date of the Class A Options is the later of October 29, 2005 or six months from the date the Company's shares become publicly traded. The Class B Options expire 180 days from the exercise of the Class A Options. In 2003, 625,000 options (the "Cornerstone Common Options") were granted with an exercise price of $11.00 per share to a 2003 investor. These Cornerstone Common Options are set to expire 180 days following the closing of an IPO, or from the date Cornerstone's shares become publicly traded. The fair value of the Class A Options, Class B Options, and Cornerstone Common Options assumed during the Cornerstone Acquisition were determined to be de minimis.

As part of the Cornerstone Restructuring, Cornerstone increased the available reserve of Cornerstone Common Stock for grant to employees, consultants and other service providers to approximately 10% of Cornerstone's capital stock following the Cornerstone Restructuring, the Mandatory Common Conversion and the Reverse Stock Split (the "Reserve Increase") but prior to the issuance of the RPF 6% Top Up Shares or any shares to the holders of the Remaining Series C Convertible Notes after the Closing.

 

*Replacement Warrants*

 

As part of the Merger with Cyclo, all outstanding warrants to purchase Cyclo Common Stock (other than those held by Rafael, which were cancelled, and those which were settled in cash) were automatically converted into warrants to purchase 1,087,100 shares of Rafael Class B common stock, at an adjusted exercise price per share based upon the Exchange Ratio.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

The following table presents the number of common stock warrants outstanding:

Replacement Warrants issued as part of the Cyclo Merger on March 25, 2025 1,087,100 <br> Expired   <u>(28,981</u>) <br> Warrants outstanding, October 31, 2025   <u>1,058,119</u>

 

The following table presents the number of common stock warrants outstanding, their exercise price, and expiration dates as of October 31, 2025 (the names below refer to the related Cyclo transaction prior to the Merger):

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Warrants Issued** | **Exercise Price** | **Expiration Date** |
| December 2018 Units Offering Warrant | 12407 | $184.41 | 12/21/2025 |
| August 2020 PIPE Warrant | 64543 | $42.56 | 8/27/2027 |
| 2020 Public Offering | 380253 | $14.19 | 12/11/2025 |
| Placement Agent Warrants December 2020 Maxim | 20268 | $17.73 | 12/11/2025 |
| April 2023 PIPE Warrants | 253280 | $2.01 | 4/20/2030 |
| October 2023 Warrant Exchange | 327368 | $2.70 | 10/23/2027 |
|  | 1058119 |  |  |

---

*Restricted Stock*

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 to four years of service.

On January 6, 2025, the Company issued 84,918 shares of Class B restricted stock to certain members of its Board of Directors.

On January 13, 2025, the Company issued 270,000 shares of Class B restricted stock to employees and consultants of the Company.

On June 13, 2025, the Company issued 118,596 shares of Class B restricted stock to Howard S. Jonas.

On September 2, 2025, the Company issued 99,429 shares of Class B restricted stock to John Goldberg, a consultant of the Company.

A summary of the status of the Company's grants of restricted shares of Class B common stock is presented below:

---

| | | |
|:---|:---|:---|
|  | **Number of Non-vested Shares** | **Weighted Average Grant Date Fair Value** |
| Outstanding at July 31, 2025 | 416720 | $2.99 |
| Granted | 99429 | 1.50 |
| Cancelled / Forfeited |  |  |
| Vested | (60274) | 2.23 |
| **Non-vested shares at October 31, 2025** | 455875 | $1.85 |

---

At October 31, 2025, there was $476 thousand of total unrecognized compensation cost related to non-vested stock-based compensation arrangements, which is expected to be recognized over the next 3.2 years.

**RAFAEL HOLDINGS, INC.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

A summary of the stock-based compensation expense for the Company's equity incentive plans is presented below (in thousands):

---

| | | |
|:---|:---|:---|
|  | **For the Three Months<br> Ended October 31,** | **For the Three Months<br> Ended October 31,** |
|  | **2025** | **2024** |
| General and administrative | $170 | $320 |
| Research and development | 428 | 39 |
| Total stock-based compensation expense | $598 | $359 |

---

 

**NOTE 20 – LEASES**

The Company is the lessor of the Israeli property which is leased to tenants under net operating leases expiring in 2027. Lease income included on the consolidated statements of operations and comprehensive loss was $86 thousand and $77 thousand for the three months ended October 31, 2025 and 2024, respectively. During the three months ended October 31, 2025 and 2024, no real estate property taxes were included in rental income.

The future contractual minimum lease payments to be received (excluding operating expense reimbursements) by the Company as of October 31, 2025, under a non-cancellable operating lease are as follows (in thousands):

---

| | |
|:---|:---|
| **Years Ending July 31,** | **Total** |
| 2026 | $137 |
| 2027 | 188 |
| 2028 | 31 |
| Total Minimum Future Rental Income | $356 |

---

**NOTE 21 - EMPLOYEE RETENTION CREDITS**

During the year ended July 31, 2025, the Company recorded refunds as a result of Employee Retention Credits (ERC), which are refundable tax credits against certain employment taxes initially made available under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES" Act). In accordance with the Company's accounting policy, the ERC amounts have been recognized in other income, net as the Company determined that all relevant criteria for recognition had been met. The ERC represents a one-time benefit and does not constitute recurring operational income.

As of July 31, 2025, the Company accrued for the total $272 thousand as other receivables on the consolidated balance sheet. Additional ERC of $933 thousand was acquired in the Cyclo Merger and is included in other receivables on the consolidated balance sheet as of July 31, 2025. All ERC and accrued interest due to the Company was received in full in the three months ended October 31, 2025.

**NOTE 22 – SUBSEQUENT EVENTS** 

The Company has evaluated subsequent events for disclosure and or recognition in the financial statements through the date that the financial statements were issued.

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that contain the words "believes," "anticipates," "expects," "plans," "intends" and similar words and phrases. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the results projected in any forward-looking statement. In addition to the factors specifically noted in the forward-looking statements, other important factors, risks and uncertainties that could result in those differences include, but are not limited to, those discussed under Item 1A to Part I "Risk Factors" in this Quarterly Report. The forward-looking statements are made as of the date of this Quarterly Report, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Investors should consult all of the information set forth in this report and the other information set forth from time to time in our reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934, including our reports on Forms 10-Q and 8-K.

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in Item 1 of this Quarterly Report.

*Overview*

Rafael Holdings, Inc. ("Rafael Holdings", "Rafael", "we" or the "Company") is a biotechnology company that develops pharmaceuticals and holds interests in clinical and early-stage companies that develop pharmaceuticals and medical devices. The Company's lead candidate is Trappsol® Cyclo™, which is being evaluated in clinical trials for the potential treatment of Niemann-Pick Disease Type C1 ("NPC1"), a rare, fatal and progressive genetic disorder. We also hold: (i) a majority equity interest in LipoMedix Pharmaceuticals Ltd. ("LipoMedix"), a clinical stage pharmaceutical company:; (ii) Barer Institute Inc. ("Barer"), a wholly-owned cancer research focused operation whose operations have been substantially streamlined; (iii) and a majority interest in Cornerstone Pharmaceuticals, Inc. ("Cornerstone"), formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company; (iv) a majority interest in Rafael Medical Devices, LLC ("Rafael Medical Devices"), an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries; and (v) a majority interest in Day Three Labs, Inc. ("Day Three"), a company which empowers third-party manufacturers to reimagine their existing product offerings enabling those third-party manufacturers to bring to market better, cleaner, more precise and predictable versions of their product by utilizing Day Three's technology. Our primary focus is to finish development of Trappsol® Cyclo™ through the completion of its ongoing pivotal Phase 3 clinical trial and bring that product to regulatory approval and market, and to expand its investment portfolio through opportunistic and strategic investments, including in therapeutics, that address high unmet medical needs. We are currently evaluating our other holdings to ensure the future focus of our resources on core assets and specifically the Trappsol® Cyclo™ clinical and development efforts.

Historically, we owned real estate assets. As of October 31, 2025, we hold a portion of a commercial building in Jerusalem, Israel as our sole remaining real estate asset.

In May 2023, we first invested in Cyclo, a clinical-stage biotechnology company that develops cyclodextrin-based products for the potential treatment of neurodegenerative diseases. Cyclo's lead drug candidate is Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin), a treatment for NPC1. NPC1 is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In January 2017, the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC1. Initial patient enrollment in the U.S. Phase I study commenced in September 2017 and in May 2020, Cyclo announced Top Line data indicating Trappsol® Cyclo™ was well tolerated in this study. Cyclo is currently conducting a Phase 3 Clinical Trial evaluating Trappsol® Cyclo™ in Pediatric and Adult Patients with Niemann-Pick Disease, Type C1. On March 25, 2025, we consummated the Merger with Cyclo whereby Cyclo became a wholly-owned subsidiary of the Company. See Note 3 for more information on the Merger with Cyclo.

LipoMedix is a clinical stage Israeli company focused on the development of a product candidate that holds the potential to be an innovative, safe, and effective cancer therapy based on liposome delivery. As of October 31, 2025, our ownership interest in LipoMedix was approximately 95%. As needed, we provide debt or equity funding to Lipomedix to support its development and clinical efforts. LipoMedix is currently exploring strategic options for its lead candidate, including potential licensing opportunities, collaborations with industry partners, and investigator-initiated studies.

In 2019, we established Barer, originally as a preclinical cancer metabolism research operation, to focus on developing a pipeline of novel therapeutic compounds, including compounds designed to regulate cancer metabolism with potentially broader application in other indications beyond cancer. Barer was comprised of scientists and academic advisors that are experts in cancer metabolism, chemistry, and drug development. In addition to its own internal discovery efforts, Barer pursued collaborative research agreements and in-licensing opportunities with leading scientists from top academic institutions. Barer's majority owned subsidiary, Farber Partners, LLC ("Farber"), was formed around one such agreement with Princeton University's Office of Technology Licensing ("Princeton") for technology from the laboratory of Dr. Joshua Rabinowitz, in the Department of Chemistry, Princeton University, for an exclusive worldwide license to its SHMT (serine hydroxymethyltransferase) inhibitor program. In November 2022, we resolved to curtail its early-stage development efforts, including pre-clinical research at Barer and has, since that date, ceased almost all of such activity. Since then, we have sought partners for Farber programs and has entered into a license agreement for one of its technologies that is in the pre-clinical research stage with the Ludwig Institute of Cancer Research and has transferred majority ownership of another one of its technologies, SHMT, to a new company, Forme Therapeutics, that is being managed by Dr. Joshua Rabinowitz with the goal of developing SHMT while seeking out external investment and partnerships. Going forward, we expect that Barer will primarily operate as an entity holding interest in these two cancer-focused opportunities.

On March 13, 2024, Cornerstone consummated a restructuring of its outstanding debt and equity interests (the "Cornerstone Restructuring"). As a result of the Cornerstone Restructuring, Rafael became a 67% owner of the issued and outstanding common stock of Cornerstone (the "Cornerstone Acquisition"), and Cornerstone became a consolidated subsidiary of Rafael. We are currently reviewing Cornerstone's current efforts, prospects and available resources to determine the optimal operational direction.

In May 2021, we formed Rafael Medical Devices, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries. In August 2023, Rafael Medical Devices sold an aggregate 31.6% equity interest to third parties for $925,000. In February 2025, we invested approximately $582,000 in cash, and Rafael Medical Devices raised approximately $45,000 from third parties in exchange for Rafael Medical Devices' Class A Units. We currently hold a 73% equity interest in Rafael Medical Devices. On December 11, 2024, Rafael Medical Devices received a substantial equivalence determination for the VECTR System from the Food and Drug Administration ("FDA") in response to Rafael Medical Devices' 510(k) premarket notification. The FDA's clearance of the VECTR System is for use in minimally invasive ligament or fascia release surgeries, such as carpal tunnel release in the wrist and cubital tunnel release in the elbow. The VECTR System has been classified into Class II and is subject to special controls (performance standards). Rafael Medical Devices' development of future products will depend upon the success of the VECTR System and our Company's ability to identify attractive opportunities in the marketplace.

In January 2024, we entered into a series of transactions with Day Three and certain of its shareholders, acquiring a controlling interest in Day Three and subsequently consolidating Day Three's results (the "Day Three Acquisition"). On March 14, 2025, Day Three Labs Manufacturing, a majority owned subsidiary of Day Three, entered into an Asset Purchase Agreement and Licensing Agreement, pursuant to which they sold assets and licensed certain applications of their Unlokt™ technology used in their cannabinoid ingredient manufacturing business.

**Results of Operations**

Our business consists of three reportable segments - Healthcare, Infusion Technology, and Real Estate. We evaluate the performance of our Healthcare segment based primarily on results of clinical trials and loss from operations, and the Infusion Technology and Real Estate segments based primarily on revenues and income (loss) from operations. Accordingly, the income and expense line items below loss from operations are only included in the discussion of consolidated results of operations.

*<u>Healthcare segment</u>*

 

Results of operations for our Healthcare segment were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,****Change** | **Change** |
|  | **2025** | **2024** | **%** |
|  | ***(in thousands)*** | ***(in thousands)*** |  |
| Product revenue | $154 | $— | 100% |
| Cost of product revenue | (9) | —) | (100)% |
| General and administrative | (2752) | (2290) | (20)% |
| Research and development | (7484) | (1161) | (545)% |
| Depreciation and amortization | (33) | (71) | 54% |
| Loss from operations | $(10124) | $(3522) | (187)% |

---

 

The Healthcare segment is comprised of the activities of Barer, LipoMedix, Farber, Cornerstone, Cyclo, and Rafael Medical Devices. As of October 31, 2025, we held a 100% interest in Barer and Cyclo, a 95% interest in LipoMedix, a 93% interest in Farber, a 67% interest in Cornerstone, and a 73% interest in Rafael Medical Devices.

*Product revenue.* Total revenue for the Healthcare segment for the three months ended October 31, 2025, increased to approximately $0.2 million compared to $0 for the three months ended October 31, 2024. This increase is primarily due to the inclusion of product revenue generated by Cyclo following the Cyclo Merger in March 2025.

 

*General and administrative expenses*. General and administrative expenses consist mainly of payroll, stock-based compensation expense, benefits, facilities, consulting and professional fees. The increase in general and administrative expenses during the three months ended October 31, 2025 compared to the three months ended October 31, 2024 is primarily due to the consolidation of Cyclo's general and administrative expenses, amounting to $0.9 million, partially offset by a decrease of $0.3 million of payroll due to terminations, and a $0.1 million decrease in stock based compensation.

*Research and development expenses.* Research and development expenses increased for the three months ended October 31, 2025 compared to the three months ended October 31, 2024. Research and development expenses are derived from activity at Cyclo, Barer, LipoMedix, Farber, Cornerstone, and Rafael Medical Devices. The increase is primarily due to the consolidation of Cyclo's research and development expenses, amounting to $6.3 million, an increase in stock based compensation expense of $0.4 million, offset by a $0.2 million decrease in payroll due to terminations and a $0.2 million decrease in clinical trial and other expenses, excluding Cyclo.

*<u>Infusion Technology segment</u>*

 

Results of operations for our Infusion Technology segment were as follows:

 

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,****Change** | **Change** |
|  | **2025** | **2024** | **%** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Infusion Technology revenue | $— | $51) | (100)% |
| Cost of Infusion Technology revenue |  | (37) | 100% |
| General and administrative | (29) | (112) | 74% |
| Research and development |  | (165) | 100% |
| Loss from operations | $(29) | $(263) | 89% |

---

 

The Infusion Technology segment is comprised of our majority equity interest in Day Three, which was acquired in January 2024. Revenues associated with the Infusion Technology segment consist of Infusion Technology revenue derived from Day Three's Unlokt<sup>TM</sup> technology. Cost of Infusion Technology revenue includes supplies, materials, production labor, and travel costs. General and administrative expenses for the Infusion Technology segment consist mainly of payroll, insurance, software, and licenses. Research and development expenses for the Infusion Technology segment include costs related to the development of new products and services.

On March 14, 2025, Day Three Labs Manufacturing entered into the DTLM Sale Agreement, pursuant to which they sold assets and licensed certain applications of their Unlokt™ technology used in Infusion Technology services, causing an overall reduction in revenues and operating expenses during the three months ended October 31, 2025.

*<u>Real Estate segment</u>*

 

The Real Estate segment consists of a portion of a commercial building in Israel. Consolidated revenue, expenses and loss for our Real Estate segment were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,****Change** | **Change** |
|  | **2025** | **2024** | **%** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Rental – Third Party | $56 | $50 | 12% |
| Rental – Related Party | 30 | 27 | 11% |
| General and administrative | (57) | (121) | 53% |
| Depreciation and amortization | (17) | (15) | (13)% |
| Income (loss) from operations | $12 | $(59) | (120)% |

---

*General and administrative expenses.* General and administrative expenses consist mainly of real estate taxes, payroll, accounting and legal fees, as well as building operating and office expenses. The decrease in general and administrative expenses during the three months ended October 31, 2025 compared to the three months ended October 31, 2024 is primarily the result of a decrease in real estate taxes.

 

*<u>Consolidated Operations</u>*

Our consolidated income and expense line items below loss from operations were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,****Change** | **Change** |
|  | **2025** | **2024** | **%** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| **Loss from operations** | $(10141) | $(3844) | (164)% |
| &nbsp;&nbsp;&nbsp;Interest income | 399 | 568) | (30)% |
| &nbsp;&nbsp;&nbsp;Realized gain on available-for-sale securities |  | 194) | (100)% |
| &nbsp;&nbsp;&nbsp;Unrealized loss on investment - Cyclo |  | (4365) | 100% |
| &nbsp;&nbsp;&nbsp;Unrealized loss on convertible notes receivable, due from Cyclo |  | (1588) | (100)% |
| &nbsp;&nbsp;&nbsp;Interest expense | (160) | (162) | 1% |
| &nbsp;&nbsp;&nbsp;Other income (loss), net | 115 | (2) | (5850)% |
| **Loss before income taxes** | (9787) | (9199) | (6)% |
| Provision for income taxes | (10) | (12) | (17)% |
| **Consolidated net loss** | (9797) | (9211) | (6)% |
| Net income (loss) attributable to noncontrolling interests | 19 | (205) | 109% |
| **Net loss attributable to Rafael Holdings, Inc.** | $(9816) | $(9006) | (9)% |

---

*Interest income.* We recorded interest income of $0.4 million and $0.6 million for the three months ended October 31, 2025 and 2024, respectively. In November 2024, we sold our investments in available-for-sale securities and cash equivalents to reallocate assets to better align with our strategic goals. Accordingly, interest income has decreased due to a lower interest rate and decreased interest income earning balances.

*Realized gain on available-for-sale securities.* We recognized a realized gain on available-for-sale securities of $0.2 million for the three months ended October 31, 2024, related to sale and maturity activity.

*Unrealized loss on investment - Cyclo.* Unrealized gains and losses on investment - Cyclo are recognized as a result of changes in the fair value of our investments in Cyclo common stock and warrants which fluctuated due to the volatility of the market price of Cyclo common stock leading up to the Cyclo Merger. We recorded an unrealized loss of $4.4 million for the three months ended October 31, 2024.

*Unrealized loss on convertible notes receivable, due from Cyclo.* We recorded an unrealized loss of $1.6 million for the three months ended October 31, 2024 related to the change in fair value of our convertible notes receivable due from Cyclo, which were forgiven as part of the Cyclo merger and therefore not held during the three months ended October 31, 2025.

*Interest expense.* We recorded interest expense of $0.2 million and $0.2 million for the three months ended October 31, 2025 and 2024, respectively, related to Cornerstone's convertible notes and creditor payable.

*Other income, net.* Other income, net was $0.1 million for the three months ended October 31, 2025 primarily due to the gain on sale of Cornerstone's fixed assets of $0.1 million. Other income, net was $2 thousand for the three months ended October 31, 2024, related primarily to the dissolution of a majority owned subsidiary.

*Net income (loss) attributable to noncontrolling interests.* The change in the net income (loss) attributable to noncontrolling interests is primarily attributed to higher net losses at certain majority-owned subsidiaries during the three months ended October 31, 2024.

**Liquidity and Capital Resources**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | | **July 31,** | **July 31,****Change** | **Change** |
|  | **October 31,**<br>**2025** |  | **2025** | **%** |
| **Balance Sheet Data:** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |  |
| Cash and cash equivalents | $45539 |  | $52769) | (14)% |
| Convertible notes receivable classified as available-for-sale | 1858 |  | 1858 | —% |
| Working capital | 36245 |  | 45114) | (20)% |
| Total assets | 105375 |  | 114109) | (8)% |
| Total equity attributable to Rafael Holdings, Inc. | 85181 |  | 94391) | (10)% |
| Noncontrolling interests | 3999 |  | 3980 | —% |
| Total equity | $89180 |  | $98371) | (9)% |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended<br> October 31,** | **Three Months Ended<br> October 31,****Change** | **Change** |
|  | **2025** | **2024** | **%** |
| **Cash flows (used in) provided by:** | ***(in thousands)*** | ***(in thousands)*** |  |
| Operating activities | $(6806) | $(3042) | (124)% |
| Investing activities | (430) | 8575) | 105% |
| Financing activities | (30) | (48) | 38% |
| Effect of exchange rates on cash and cash equivalents | 36 | (1) | 3700% |
| **Increase (decrease) in cash and cash equivalents** | $(7230) | $5484) | (232)% |

---

**Capital Resources**

As of October 31, 2025, we held cash and cash equivalents of approximately $45.5 million. We expect the balance of cash and cash equivalents to be sufficient to meet our obligations for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.

**Operating Activities**

For the three months ended October 31, 2025, cash used in operating activities was $6.8 million, impacted by a net loss of $9.8 million adjusted for non-cash items totaling $0.6 million. Cash generated from operating assets and liabilities primarily included the collection of other receivables of $1.2 million and accounts receivable of $0.2 million, as well as an increase in accounts payable and accrued expenses of $0.5 and a decrease in prepaid clinical trial costs of $0.2 million.

For the three months ended October 31, 2024, cash used in operating activities was $3.0 million, impacted by a net loss of $9.2 million adjusted for non-cash items totaling $5.9 million. Cash used from operating assets and liabilities primarily included the collection of $0.2 million of accounts receivable and $0.1 million of interest receivables, offset by a decrease in accounts payable and accrued expenses of $0.1 million.

**Investing Activities**

Cash used in investing activities for the three months ended October 31, 2025 was primarily due to the purchase of preferred shares from Nina Medical for $0.5 million, offset by proceeds of $0.1 million from the sale of property and equipment.

Cash provided by investing activities for the three months ended October 31, 2024 was primarily due to proceeds of $33.3 million from sales and maturities of available-for-sale securities., offset by purchases of available-for-sale securities of approximately $15.7 million, and purchases of $9.0 million in convertible notes receivable, due from Cyclo.

**Financing Activities**

Cash used in financing activities for the three months ended October 31, 2025 was primarily related to $28 thousand of payments for taxes on shares withheld for employee taxes.

Cash used in financing activities for the three months ended October 31, 2024 was primarily related to the $48 thousand of payments for taxes on shares withheld for employee taxes.

We do not anticipate paying dividends on our common stock until we achieve sustainable profitability and retain certain minimum cash reserves. The payment of dividends in any specific period will be at the sole discretion of our Board of Directors.

**Critical Accounting Estimates**

We have chosen accounting policies that we believe are appropriate to accurately and fairly report our operating results and financial condition in conformity with U.S. GAAP. We apply these accounting policies in a consistent manner. Our significant accounting policies are discussed in Note 2, "Summary of Significant Accounting Policies", in our accompanying consolidated financial statements.

The application of critical accounting policies requires that we make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. These estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. We evaluate these estimates and assumptions on an ongoing basis and may retain outside consultants to assist in our evaluation. If actual results ultimately differ from previous estimates, the revisions are included in results of operations in the period in which the actual amounts become known. The critical accounting policies that involve the most significant management judgments and estimates used in preparation of our consolidated financial statements, or are the most sensitive to change from outside factors, are discussed in the Critical Accounting Estimates section in Item 7 of the Annual Report on Form 10-K for fiscal year 2025.

**Off-Balance Sheet Arrangements**

We do not have any "off-balance sheet arrangements", as defined in relevant SEC regulations, that are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

**Item 3. Quantitative and Qualitative Disclosures about Market Risks**

**FOREIGN CURRENCY RISK**

Revenue from tenants located in Israel represented 36% and 60% of our consolidated revenues for the three months ended October 31, 2025 and 2024, respectively. The entirety of these revenues is in currencies other than the U.S. Dollar. Our foreign currency exchange risk is somewhat mitigated by our ability to offset a portion of these non-U.S. Dollar-denominated revenues with operating expenses that are paid in the same currencies. While the impact from fluctuations in foreign exchange rates affects our revenues and expenses denominated in foreign currencies, the net amount of our exposure to foreign currency exchange rate changes at the end of each reporting period is generally not material.

**Item 4. Controls and Procedures**

*Evaluation of Disclosure Controls and Procedures*

 

An evaluation was performed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of October 31, 2025. On March 25, 2025, the Company acquired Cyclo Therapeutics, Inc. (Cyclo) in a business combination as described in Note 3 – Cyclo Merger to our audited Consolidated Financial Statements. Management has excluded the acquired business from its assessment of the effectiveness of the disclosure controls and procedures as of October 31, 2025. Based on that evaluation, the Company's management, including the President and Chief Executive Officer and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective.

 

*Material Weakness in the Acquired Business's Internal Control Over Financial Reporting*

 

As reported in Item 9A in the Company's annual financial statements on Form 10-K, filed on October 29, 2025, on March 25, 2025, the Company acquired Cyclo in a business combination and has excluded the acquired entity from the July 31, 2025 evaluation of the effectiveness of internal control over financial reporting and disclosure controls and procedures. However, management identified a material weakness in internal control over financial reporting related to the accruals and expenses recognized at Cyclo, a wholly-owned subsidiary.

A material weakness is a deficiency, or combination of deficiencies, in internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

The internal controls over financial reporting at Cyclo were not appropriately designed or operating effectively to ensure accruals and associated expenses were recorded completely and accurately, due to inadequately designed controls surrounding the month end accrual identification, measurement and recognition process, including in the area of clinical trial accruals;

The material weakness described above resulted in the identification of immaterial misstatements, which were corrected within the consolidated financial statements for the year ended July 31, 2025 included in the Form 10-K filed on October 29, 2025.

 

*Remediation Plan for Material Weakness in Internal Control Over Financial Reporting*

In response to the material weakness identified above, the Company developed a plan, which will be updated as deemed necessary, to remediate the material weakness at Cyclo, including enhancing the design of and implementing additional process-level control activities and ensuring they are properly evidenced and operating effectively. Such design and implementation control activities will include, but not be limited to:

● Integration of Cyclo's vendor and accounts payable management process into the Company's existing control process;

● Integration of Cyclo's accrual process into the Company's existing control process;

● Development of Cyclo's analytical review process; and

● Development of Cyclo's clinical trial accrual estimation process.

Because the reliability of the internal control process requires repeatable execution, the successful on-going remediation of the material weakness will require on-going review and evidence of effectiveness prior to concluding that the controls are effective. The Company's remediation efforts are underway; however, there is no assurance that the remediation efforts will be effective in the future or that additional material weaknesses will not develop or be identified.

*Changes in Internal Control Over Financial Reporting*

Except as described above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by the Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**Part II**

**Item 1. Legal Proceedings**

Legal proceedings disclosure is presented in Note 18 to our Consolidated Financial Statements included in Item 1 to Part I of this Quarterly Report on Form 10-Q.

**Item 1A. Risk Factors**

There were no material changes from the risk factors previously disclosed in Item 1A to Part I of the 2025 Form 10-K.

**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**

None.

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

None.

**Item 6. Exhibits, Financial Statement Schedules.**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 31.1\* | [Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea026869101ex31-1_rafael.htm) |
| 31.2\* | [Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ea026869101ex31-2_rafael.htm) |
| 32.1\* | [Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea026869101ex32-1_rafael.htm) |
| 32.2\* | [Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea026869101ex32-2_rafael.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\* Filed or furnished herewith.

**Signatures**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | | |
|:---|:---|:---|
| Date: December 11, 2025 | **Rafael Holdings, Inc.** | **Rafael Holdings, Inc.** |
|  | By: | /s/ Howard Jonas |
|  |  | **Howard Jonas** |
|  |  | **Chief Executive Officer** |
|  | By: | /s/ David Polinsky |
|  |  | **David Polinsky** |
|  |  | **Chief Financial Officer** |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)**

**AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Howard Jonas, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Rafael
Holdings, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other
financial information included in this Report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| Date: December 11, 2025 |
| /s/ Howard Jonas |
| Howard Jonas |
| Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)**

**AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, David Polinsky, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Rafael
Holdings, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other
financial information included in this Report, fairly present in all material respects the financial condition, results of operations
and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the
audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| |
|:---|
| Date: December 11, 2025 |
| /s/ David Polinsky |
| David Polinsky |
| Chief Financial Officer |

---

## Exhibit 32.1

**Exhibit 32.1**

**Certification Pursuant to**

**18 U.S.C. Section 1350**

**(as Adopted Pursuant to Section 906 of**

**the Sarbanes-Oxley Act Of 2002)**

In connection with the Quarterly Report of Rafael Holdings, Inc. (the "Company") on Form 10-Q for the year ended October 31, 2025 as filed with the Securities and Exchange Commission (the "Report"), I, Howard Jonas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

Date: December 11, 2025

---

| |
|:---|
| /s/ Howard Jonas |
| Howard Jonas |
| Chief Executive Officer |

---

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Rafael Holdings, Inc. and will be retained by Rafael Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

**Certification Pursuant to**

**18 U.S.C. Section 1350**

**(as Adopted Pursuant to Section 906 of**

**the Sarbanes-Oxley Act Of 2002)**

In connection with the Quarterly Report of Rafael Holdings, Inc. (the "Company") on Form 10-Q for the quarter ended October 31, 2025 as filed with the Securities and Exchange Commission (the "Report"), I, David Polinsky, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

Date: December 11, 2025

---

| |
|:---|
| /s/ David Polinsky |
| David Polinsky |
| Chief Financial Officer |

---

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Rafael Holdings, Inc. and will be retained by Rafael Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.