Rafael Holdings, Inc. Announces Revised Subscription Rights in Connection With its Previously Announced $25 Million Rights Offering to Support Its Commitment to the Development and Potential Launch of Trappsol® Cyclo™
- Executive Chairman Howard Jonas provides backstop support through Standby Purchase Agreement
- Rights offering will support development and launch of Trappsol® Cyclo™
- Company has secured SEC registration approval for the offering
- Dilutive effect on existing shareholders who don't participate in the rights offering
- Complex subscription process may deter some eligible shareholders
- Fractional shares will not be issued, potentially limiting full participation
Insights
Rafael Holdings is raising $25M through a rights offering that lets shareholders buy 0.603 shares at $1.28 each, with the Chairman guaranteeing full subscription.
Rafael Holdings has announced a $25 million rights offering to fund the development and potential launch of Trappsol® Cyclo™. The structure provides existing shareholders the opportunity to maintain their proportional ownership while raising needed capital.
Under the terms, shareholders of record as of May 9, 2025, will receive one non-transferable subscription right for each share held. Each right allows the purchase of 0.603 shares of Class B common stock at $1.28 per share. This fractional allocation is unusual and likely calibrated precisely to reach the $25 million target.
The most significant aspect of this offering is the standby purchase agreement with Howard Jonas, the company's Executive Chairman. This arrangement guarantees that any unsubscribed shares will be purchased by Jonas at the same price, effectively ensuring the full $25 million will be raised regardless of other shareholders' participation rates. This backstop provides certainty for the company while potentially signaling insider confidence.
The subscription period runs from May 13 to May 29, 2025, giving shareholders a relatively short window to decide whether to participate. Those who choose not to exercise their rights will experience proportional dilution.
The release also includes specific instructions for former Cyclo Therapeutics shareholders who haven't yet converted their shares, highlighting the company's recent corporate activity.
Rights offerings are a common capital raising mechanism that balances the need for funding while providing existing shareholders the first opportunity to maintain their ownership stake. The company has explicitly stated that neither Rafael Holdings nor its Board has made any recommendation on whether shareholders should exercise their rights, leaving this decision to individual investors and their advisors.
NEWARK, N.J., May 05, 2025 (GLOBE NEWSWIRE) -- Rafael Holdings, Inc. (NYSE: RFL; NYSE American: RFL-WT) today announced revised subscription rights in connection with its previously announced rights offering.
Holders of record as of May 9, 2025 (the “Record Date”) will be eligible to participate in the rights offering. To be considered a Holder of record on the Record Date, prospective Holders must complete open market purchases by May 8, 2025.
Former holders of Cyclo Therapeutics, Inc. who did not hold shares in street name and have not submitted their letter of transmittal to Equiniti Trust Company LLC (the Company’s transfer agent), and wish to participate in the rights offering, should send their letter of transmittal to Equiniti and complete the steps to exchange their Cyclo common stock for Class B common stock of the Company as soon as possible, as they must be record holders of Class B common stock prior to the Record Date in order to participate in the rights offering.
Rights Offering Details
Under the proposed rights offering, Rafael Holdings intends to distribute one (1) non-transferable subscription right for each share of Class B Common Stock or Class A Common Stock or share of Class B Common Stock purchasable on exercise of Public Warrants, in each case, held as of the Record Date. Each subscription right will entitle the Holder to purchase 0.603 of a share of Class B Common Stock at a subscription price of
Howard Jonas, the Company’s Executive Chairman and Chairman of the Board will enter into a Standby Purchase Agreement with the Company pursuant to which he will purchase from the Company, in a private placement, any shares of Class B Common Stock not subscribed for in the proposed rights offering for the same subscription price payable by holders electing to exercise the subscription rights in the proposed rights offering.
The rights offering will be subject to certain conditions, and Rafael Holdings reserves the right to terminate the rights offering at any time prior to its expiration date.
The subscription rights are non-transferable and may only be exercised during the subscription period, from May 13, 2025, through 5:00 PM ET on May 29, 2025, unless extended or terminated earlier by Rafael Holdings.
The expected calendar for the rights offering is as follows:
- May 8, 2025 Ownership Day — Shares and/or Public Warrants must be acquired by this date to be considered a holder of record on May 9, 2025.
- May 9, 2025: Record Date.
- May 13, 2025: Subscription Period Begins.
- May 29, 2025: Subscription Period Ends at 5:00 PM ET (unless extended at Rafael Holdings’ discretion).
Rafael Holdings has engaged D.F. King & Co., Inc. as the Information Agent for the rights offering. For questions or to request copies of the prospectus supplement, please contact D.F. King at (800) 992-3086 or via email at rfl@dfking.com.
Neither Rafael Holdings nor its Board of Directors has made any recommendation regarding whether Holders should exercise their subscription rights. Holders are encouraged to carefully review the subscription materials provided by Rafael Holdings and consult with their legal and financial advisors before making a decision.
SEC Registration
A registration statement relating to the Class B Common Stock has been filed with the SEC on April 18, 2025, and was declared effective on April 29, 2025. The rights offering will be made solely by means of a written prospectus supplement describing the terms of the rights offering and how Holders may exercise their subscription rights in the proposed rights offering and will be available on the SEC’s website at https://www.sec.gov when filed. Copies of the prospectus supplement, when available, will be mailed to Holders as of the Record Date and may be obtained from D.F. King & Co., email: rfl@dfking.com, or telephone: (800) 992-3086.
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor will there be any sale of these securities in any state or jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
About Rafael Holdings, Inc.
Rafael Holdings, Inc. holds interests in clinical and early-stage pharmaceutical and certain other companies, including our wholly-owned subsidiary, Cyclo Therapeutics, LLC, a clinical stage biotechnology company dedicated to developing Rafael’s lead clinical candidate, 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. Rafael also holds majority equity interests in LipoMedix Pharmaceuticals Ltd., a clinical stage pharmaceutical company, Cornerstone Pharmaceuticals, Inc., formerly known as Rafael Pharmaceuticals Inc., a cancer metabolism-based therapeutics company, Rafael Medical Devices, LLC, an orthopedic-focused medical device company developing instruments to advance minimally invasive surgeries, and Day Three Labs, Inc., a company which empowers third-party manufacturers to reimagine their existing cannabis offerings.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding our expectations surrounding the potential, safety, efficacy, and regulatory and clinical progress of our product candidates; plans regarding the further evaluation of clinical data; and the potential of our pipeline, including our internal cancer metabolism research programs. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended July 31, 2024, and our other filings with the SEC. These factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change.
For further information, please contact:
D.F. King & Co., Inc. (Information Agent)
Toll-Free Number: (800) 992-3086
Email: rfl@dfking.com
Investor Contact:
Rafael Holdings, Inc.
Barbara Ryan
Barbara.ryan@rafaelholdings.com
(203) 274-2825
FAQ
What is the subscription price for RFL's rights offering in May 2025?
When is the record date for Rafael Holdings' rights offering?
How long is the subscription period for RFL's rights offering?
What is the purpose of Rafael Holdings' $25 million rights offering?
Who is providing the standby purchase agreement for RFL's rights offering?
