8-K
PURE BIOSCIENCE, INC. (PURE)
UNITEDSTATES
SECURITIESAND EXCHANGE COMMISSION
WASHINGTON,D.C. 20549
FORM8-K
CURRENTREPORT
Pursuantto Section 13 or 15(d)
ofthe Securities Exchange Act of 1934
Dateof Report (Date of earliest event reported): June 11, 2020
PUREBIOSCIENCE, INC.
(Exactname of registrant as specified in its charter)
| Delaware | 001-14468 | 33-0530289 |
|---|---|---|
| (State or other jurisdiction<br><br> of incorporation) | (Commission<br><br> File Number) | (IRS Employer<br><br> Identification No.) |
| 9669 Hermosa Avenue<br><br> Rancho Cucamonga, California | 91730 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’stelephone number, including area code: (619) 596-8600
Notapplicable
(Formername or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications<br> pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [ ] | Soliciting material<br> pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). 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. [ ]
Item2.02. Results of Operations and Financial Condition.
On June 11, 2020, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal quarter ended April 30, 2020 and related information. A copy of the press release is attached as Exhibit 99.1.
The information in this Item 2.02 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits
| 99.1 | Press Release, dated June 11, 2020. |
|---|---|
| * | Exhibit 99.1 is<br> being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act<br> of 1934 or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into any registration<br> statement or other document filed with the Securities and Exchange Commission. |
| --- | --- |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PURE BIOSCIENCE, INC. | ||
|---|---|---|
| Dated: June 11, 2020 | By: | /s/ Tom Y. Lee |
| Tom Y. Lee | ||
| Chief Executive Officer |
EXHIBITINDEX
| Exhibit<br><br> Number | Description |
|---|---|
| 99.1 | Press Release, dated June 11 2020. |
Exhibit99.1
PUREBioscience Reports Fiscal 2020 Third Quarter
andNine-Month Financial Results
AchievesQuarterly Profit for First Time in Company’s History
RANCHO CUCAMONGA, CA (June 11, 2020) – PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal third quarter ended April 30, 2020 and the nine-month period ended the same date.
Q3:Summary of Results of Operations
| ● | Revenues<br> for the fiscal third quarter in 2020 increased 612% to $2,221,000, compared to revenues of $312,000 for the fiscal third quarter<br> in 2019. The increase was attributable to increased sales across our distribution and end-user network servicing the food<br> processing and transportation industry. |
|---|---|
| ● | Net<br> income for the fiscal third quarter in 2020 was $473,000, compared to a net loss of ($1.9 million) for the fiscal third quarter<br> in 2019. Net income, excluding share-based compensation, for the fiscal third quarter in 2020 was $519,000, compared to a<br> net loss of ($1.7 million) for the fiscal third quarter in 2019. |
| ● | Net<br> income per share was $0.01 for the fiscal third quarter in 2020, compared to a net loss of ($0.03) for the fiscal third quarter<br> in 2019. |
| ● | Gross<br> margin was 56% for the three months ended April 30, 2020, compared to 63% for the three months ended April 30, 2019. The decrease<br> in gross margin percentage was primarily attributable to the sale of higher margin formulations and packaging configurations<br> of our products during the three months ended April 30, 2019. |
NineMonths: Summary of Results of Operations
| ● | Revenues<br> for the nine months ended April 30, 2020 increased 129% to $2,968,000, compared to revenues of $1,296,000 for the nine months<br> ended April 30, 2019. The increase was attributable to increased sales across our distribution and end-user network servicing<br> the food processing and transportation industry. |
|---|---|
| ● | Net<br> loss for the nine months ended April 30, 2020 was ($1.3 million), compared to ($5.7 million) for the nine months ended April<br> 30, 2019. Net loss, excluding share-based compensation, for the nine months ended April 30, 2020 was $725,000, compared to<br> ($3.4 million) for the nine months ended April 30, 2019. |
| ● | Net<br> loss per share was ($0.02) for the nine months ended April 30, 2020, compared to ($0.08) for the nine months ended April 30,<br> 2019. |
| ● | Gross<br> margin was 57% for the nine months ended April 30, 2020, compared to 63% for the nine months ended April 30, 2019. The decrease<br> in gross margin percentage was primarily attributable to the sale of higher margin formulations and packaging configurations<br> of our products during the nine months ended April 30, 2019. |
BusinessUpdate
| ● | PURE^®^Hard Surface | ||
|---|---|---|---|
| ○ | Food<br> Processing and Manufacturing: PURE Hard Surface is now available for use in over a thousand protein, produce, bakery, and<br> dairy facilities across the United States. By partnering with our distributors, who employ thousands of individuals, we have<br> continued to expand the use and application of PURE Hard Surface to meet specific customer needs. Use of PURE Hard Surface<br> has been adopted by multiple new food processors and current customers are expanding use to all their locations. | ||
| ○ | Transportation<br> Sanitization: PURE’s Transport Sanitation Solution, designed to meet the FDA Food Safety Modernization Act (FSMA) requirements,<br> is now being used by three of the nation’s largest food transportation companies servicing restaurant chains, food processors<br> and grocery store chains. In partnership with the industry leader, our efficacious application is being adopted across all<br> transit channels as a sanitation solution for equipment, driver and passenger safety. | ||
| ○ | Using<br> a newly-designed and implemented national distribution network, PURE has been able to showcase and promote adoption of PURE’s<br> Transport Sanitation Solution across multiple channels, including prisons/jails, hospitality, education and more. This distribution<br> team is national and will continue to provide PURE with trained sales professionals. | ||
| ● | PURE<br> Control^®^ | ||
| --- | --- | --- | --- |
| ○ | SmartWash^®^Boost: Travel delays and economic impacts related to COVID-19 have impacted final third-party validation of SmartWash^®^Boost. Nonetheless, SmartWash remains committed to bringing the revolutionary Boost product to market to treat pre-cut<br> lettuce as a further intervention step to protect America’s food chain. A senior executive of Taylor Farms was recently<br> quoted saying, “Clearly, there is a path forward for Boost to play an integral part in ensuring the safety of the United<br> States produce supply.” | ||
| ○ | While<br> five facilities are operating using PURE Control, the planned rollout at a multinational produce processor was slowed by the<br> events of the first calendar quarter of 2020. All plans remain in place and are expected to move forward to additional locations<br> for berry and tomato processing. The same multinational corporation adopted PURE’s Environmental Solution for all 21<br> of its locations, including corporate offices for facility and employee safety. | ||
| ○ | To<br> date, work is ongoing with multiple additional processors for treatment of herbs, tomatoes, onions, broccoli, cabbage, berries,<br> processed grapes, leafy greens and cut lettuce. |
Tom Y. Lee, Chief Executive Officer, said that, “For the first time in the company’s history, PURE is profitable. During the third quarter, sales to our distribution network significantly increased due, in part, to our recently announced partnership with Packers Sanitation Services, Inc. (PSSI) and our alliances with Whiting Systems, Inc. and Marathon Group, LLC. We look forward to expanding our relationships with PSSI, Whiting and Marathon, all respective leaders in their industries with national and global reach.
“Due to increased and continued demand, we have expanded our production capacity. Our primary contract manufacturer has invested significant amounts to improve lead-times and volume, allowing us to manufacture bulk product in two Midwest locations with further expansion underway.
“With the achievement of profitability, I’m pleased to note that revenue for our fiscal fourth quarter is expected to meet or exceed our fiscal third quarter revenue.”
AboutPURE Bioscience, Inc.
PURE Bioscience, Inc. is focused on developing and commercializing our proprietary antimicrobial products primarily in the food safety arena. We provide solutions to combat the health and environmental challenges of pathogen and hygienic control. Our technology platform is based on patented, stabilized ionic silver, and our initial products contain silver dihydrogen citrate, better known as SDC. This is a broad-spectrum, non-toxic antimicrobial agent, which offers 24-hour residual protection and formulates well with other compounds. As a platform technology, SDC is distinguished from existing products in the marketplace because of its superior efficacy, reduced toxicity and mitigation of bacterial resistance. PURE is headquartered in Rancho Cucamonga, California (San Bernardino metropolitan area). Additional information on PURE is available at www.purebio.com
Forward-lookingStatements: Any statements contained in this press release that do not describe historical facts may constitute forward-lookingstatements as that term is defined in the Private Securities Litigation Reform Act of 1995. Statements in this press release concerningthe Company’s expectations (including with respect to arrangements with Marathon Group, LLC, Whiting Systems, Inc., PSSI,and Taylor Farms), plans, business outlook or future performance, and any other statements concerning assumptions made or expectationsas to any future events, conditions, performance or other matters, are “forward-looking statements.” Forward-lookingstatements inherently involve risks and uncertainties that could cause our actual results to differ materially from any forward-lookingstatements. Factors that could cause or contribute to such differences include, but are not limited to, the Company’s failureto implement or otherwise achieve the benefits of its proposed business initiatives and plans; economic and other disruptionsresulting from COVID-19; acceptance of the Company’s current and future products and services in the marketplace, includingthe Company’s ability to convert successful evaluations and tests for PURE Control and PURE Hard Surface into customer ordersand customers continuing to place product orders as expected and to expand their use of the Company’s products; the Company’sability to maintain relationships with its partners and other counterparties; the Company’s ability to generate sufficientrevenues and reduce its operating expenses in order to reach profitability; the Company’s ability to raise the funding requiredto support its continued operations and the implementation of its business plan; the ability of the Company to develop effectivenew products and receive required regulatory approvals for such products, including the required data and regulatory approvalsrequired to use its SDC-based technology as a direct food contact processing aid in raw meat processing and to expand its usein OLR poultry processing; competitive factors, including customer acceptance of the Company’s SDC-based products that aretypically more expensive than existing treatment chemicals; dependence upon third-party vendors, including to manufacture itsproducts; and other risks detailed in the Company’s periodic report filings with the Securities and Exchange Commission(the SEC), including its Form 10-K for the fiscal year ended July 31, 2019 and Form 10-Q for the third fiscal quarter ended April30, 2020. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this pressrelease. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisionsor changes after the date of this release.
Contact:
Mark Elliott, VP Finance
PURE Bioscience, Inc.
Ph: 619-596-8600 ext: 116
PUREBioscience, Inc.
CondensedConsolidated Balance Sheets
| July 31, 2019 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 2,022,000 | $ | 398,000 | ||
| Accounts receivable | 1,607,000 | 373,000 | |||
| Inventories, net | 282,000 | 177,000 | |||
| Restricted cash | 75,000 | 75,000 | |||
| Prepaid expenses | 10,000 | 18,000 | |||
| Total current assets | 3,996,000 | 1,041,000 | |||
| Property, plant and equipment, net | 328,000 | 362,000 | |||
| Patents, net | 462,000 | 529,000 | |||
| Total assets | 4,786,000 | $ | 1,932,000 | ||
| Liabilities and stockholders’ equity | |||||
| Current liabilities | |||||
| Accounts payable | 1,286,000 | $ | 553,000 | ||
| Accrued liabilities | 205,000 | 185,000 | |||
| Total current liabilities | 1,491,000 | 738,000 | |||
| Deferred rent | — | 4,000 | |||
| Total liabilities | 1,491,000 | 742,000 | |||
| Commitments and contingencies | |||||
| Stockholders’ equity | |||||
| Preferred stock, 0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding | — | — | |||
| Common stock, 0.01 par value: 100,000,000 shares authorized, 86,890,953 shares issued and outstanding at April 30, 2020, and 76,732,334 shares issued and outstanding at July 31, 2019 | 869,000 | 768,000 | |||
| Additional paid-in capital | 127,222,000 | 123,900,000 | |||
| Accumulated deficit | (124,796,000 | ) | (123,478,000 | ) | |
| Total stockholders’ equity | 3,295,000 | 1,190,000 | |||
| Total liabilities and stockholders’ equity | 4,786,000 | $ | 1,932,000 |
All values are in US Dollars.
PUREBioscience, Inc.
CondensedConsolidated Statements of Operations
(Unaudited)
| Nine Months Ended | Three months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, | April 30, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net product sales (including related party sales of $124,000 in the three and nine months ended April 30,2020) | $ | 2,968,000 | $ | 1,296,000 | $ | 2,221,000 | $ | 312,000 | ||||
| Operating costs and expenses | ||||||||||||
| Cost of goods sold | 1,270,000 | 480,000 | 972,000 | 117,000 | ||||||||
| Selling, general and administrative | 2,790,000 | 5,334,000 | 690,000 | 1,022,000 | ||||||||
| Research and development | 227,000 | 249,000 | 85,000 | 85,000 | ||||||||
| Total operating costs and expenses | 4,287,000 | 6,063,000 | 1,747,000 | 1,224,000 | ||||||||
| Income (loss) from operations | (1,319,000 | ) | (4,767,000 | ) | 474,000 | (912,000 | ) | |||||
| Other income (expense) | ||||||||||||
| Inducement expense | — | (960,000 | ) | — | (960,000 | ) | ||||||
| Interest expense, net | (4,000 | ) | (5,000 | ) | (1,000 | ) | (1,000 | ) | ||||
| Other income (expense), net | 5,000 | (3,000 | ) | — | — | |||||||
| Total other income (expense) | 1,000 | (968,000 | ) | (1,000 | ) | (961,000 | ) | |||||
| Net income (loss) | $ | (1,318,000 | ) | $ | (5,735,000 | ) | $ | 473,000 | $ | (1,873,000 | ) | |
| Net income (loss) per common share-basic | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.01 | $ | (0.03 | ) | |
| Net income (loss) per common share-diluted | $ | (0.02 | ) | $ | (0.08 | ) | $ | 0.01 | $ | (0.03 | ) | |
| Weighted average shares-basic | 80,634,951 | 72,058,840 | 83,979,076 | 76,601,012 | ||||||||
| Weighted average shares-diluted | 80,634,951 | 72,058,840 | 85,702,650 | 76,601,012 |
PUREBioscience, Inc.
CondensedConsolidated Statement of Stockholders’ Equity
(Unaudited)
| Nine<br> Months Ended April 30, 2020 | Nine<br> Months Ended April 30, 2019 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common<br> Stock | Additional<br> Paid-In | Accumulated | Total<br> Stockholders’ | Common<br> Stock | Additional<br> Paid-In | Accumulated | Total<br> Stockholders’ | |||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||
| Balances at beginning of period | 76,732,334 | $ | 768,000 | $ | 123,900,000 | $ | (123,478,000 | ) | $ | 1,190,000 | 68,248,158 | $ | 683,000 | $ | 117,522,000 | $ | (116,924,000 | ) | $ | 1,281,000 | ||||||
| Issuance of common stock<br> in private placements, net | 9,758,619 | 97,000 | 2,733,000 | — | 2,830,000 | 3,333,964 | 33,000 | 1,464,000 | — | 1,497,000 | ||||||||||||||||
| Share-based compensation<br> expense - stock options | — | — | 382,000 | — | 382,000 | — | — | 1,330,000 | — | 1,330,000 | ||||||||||||||||
| Share-based compensation<br> expense - restricted stock units | — | — | 211,000 | — | 211,000 | — | — | 1,007,000 | — | 1,007,000 | ||||||||||||||||
| Issuance of common stock<br> for vested restricted stock units | 400,000 | 4,000 | (4,000 | ) | — | — | 131,250 | 1,000 | (1,000 | ) | — | — | ||||||||||||||
| Issuance of common stock<br> upon the exercise of warrants | — | — | — | — | — | 2,399,999 | 24,000 | 816,000 | — | 840,000 | ||||||||||||||||
| Warrant inducement | — | — | — | — | — | — | — | 960,000 | — | 960,000 | ||||||||||||||||
| Net<br> loss | — | — | — | (1,318,000 | ) | (1,318,000 | ) | — | — | — | (5,735,000 | ) | (5,735,000 | ) | ||||||||||||
| Balances<br> at end of period (Unaudited) | 86,890,953 | $ | 869,000 | $ | 127,222,000 | $ | (124,796,000 | ) | $ | 3,295,000 | 74,113,371 | $ | 741,000 | $ | 123,098,000 | $ | (122,659,000 | ) | $ | 1,180,000 | ||||||
| Three Months Ended April 30, 2020 | Three Months Ended April 30, 2019 | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||
| Balances at beginning of period (Unaudited) | 79,994,402 | $ | 800,000 | $ | 125,245,000 | $ | (125,269,000 | ) | $ | 776,000 | 71,713,372 | $ | 717,000 | $ | 121,186,000 | $ | (120,786,000 | ) | $ | 1,117,000 | ||||||
| Issuance of common stock in private placements, net | 6,896,551 | 69,000 | 1,931,000 | — | 2,000,000 | — | — | — | — | — | ||||||||||||||||
| Share-based compensation expense - stock options | — | — | 46,000 | — | 46,000 | — | — | 83,000 | — | 83,000 | ||||||||||||||||
| Share-based compensation expense - restricted stock units | — | — | — | — | — | — | — | 53,000 | — | 53,000 | ||||||||||||||||
| Issuance of common stock upon the exercise of warrants | — | — | — | — | — | 2,399,999 | 24,000 | 816,000 | — | 840,000 | ||||||||||||||||
| Warrant inducement | — | — | — | — | — | — | — | 960,000 | — | 960,000 | ||||||||||||||||
| Net income (loss | — | — | — | 473,000 | 473,000 | — | — | — | (1,873,000 | ) | (1,873,000 | ) | ||||||||||||||
| Balances at end of period (Unaudited) | 86,890,953 | $ | 869,000 | $ | 127,222,000 | $ | (124,796,000 | ) | $ | 3,295,000 | 74,113,371 | $ | 741,000 | $ | 123,098,000 | $ | (122,659,000 | ) | $ | 1,180,000 |
PUREBioscience, Inc.
CondensedConsolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | |||||
|---|---|---|---|---|---|
| April 30, | |||||
| 2020 | 2019 | ||||
| Operating activities | |||||
| Net loss | $ | (1,318,000 | ) | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||
| Share-based compensation | 593,000 | ||||
| Amortization of stock issued for services | 4,000 | ||||
| Depreciation and amortization | 145,000 | ||||
| Interest expense on promissory note | — | ||||
| Inducement to exercise warrants | — | ||||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | (1,234,000 | ) | |||
| Inventories | (105,000 | ) | |||
| Prepaid expenses | 4,000 | ) | |||
| Accounts payable and accrued liabilities | 753,000 | ) | |||
| Deferred rent | (4,000 | ) | ) | ||
| Net cash used in operating activities | (1,162,000 | ) | ) | ||
| Investing activities | |||||
| Investment in patents | — | ) | |||
| Purchases of property, plant and equipment | (44,000 | ) | ) | ||
| Net cash used in investing activities | (44,000 | ) | ) | ||
| Financing activities | |||||
| Net proceeds from the sale of common stock | 2,830,000 | ||||
| Net proceeds from the exercise of warrants | — | ||||
| Net cash provided by financing activities | 2,830,000 | ||||
| Net increase and decrease in cash, cash equivalents, and restricted cash | 1,624,000 | ) | |||
| Cash, cash equivalents, and restricted cash at beginning of period | 473,000 | ||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 2,097,000 | |||
| Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | |||||
| Cash and cash equivalents | $ | 2,022,000 | |||
| Restricted cash | $ | 75,000 | |||
| Total cash, cash equivalents and restricted cash | $ | 2,097,000 | |||
| Supplemental disclosure of non-cash financing activities | |||||
| Cash paid for taxes | $ | 2,000 | |||
| Conversion of promissory note and accrued interest from a related party to common stock | $ | — |
All values are in US Dollars.