PURE 8-K
Pure Bioscience, Inc. (PURE)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.02. | Results of Operations and Financial Condition. |
On October 28, 2022, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal year ended July 31, 2022 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.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| 99.1 | Press Release, dated October 28 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Exhibit 99.1 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, nor shall it be incorporated by reference into any registration 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: October 28, 2022 | By: | /s/ Tom Y. Lee |
| Tom Y. Lee | ||
| Chief Executive Officer | ||
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Press Release, dated October 28, 2022. |
Exhibit 99.1
PURE Bioscience Reports Fiscal 2022
Financial Results
Update on Business and PURE’s SDC-Based Antimicrobial Food Safety Solutions
RANCHO CUCAMONGA, CA (October 28, 2022) – PURE Bioscience, Inc. (OTCQB: PURE) (“PURE,” the “Company” or “we”), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal year ended July 31, 2022.
Summary of Results – Year-End Operations
| ● | Net product sales were $1,813,000 and $3,698,000 for the fiscal years ended July 31, 2022 and 2021, respectively. The decrease of $1,885,000 was attributable to decreased sales across our distribution and end-user network servicing the food processing, transportation, and janitorial industries. In addition, during the fiscal year ended July 31, 2022, we recognized $40,000 in royalties, compared to $229,000 in royalties for the fiscal year ended July 31, 2021. | |
| ● | Net loss for the fiscal year ended July 31, 2022 was ($3.5 million), compared to ($2.3 million) for the fiscal year ended July 31, 2021. | |
| ● | Net loss, excluding share-based compensation, for the fiscal year ended July 31, 2022 was ($2.9 million), compared to ($1.3 million) for the fiscal year ended July 31, 2021. | |
| ● | Net loss per share was ($0.04) for the fiscal year ended July 31, 2022, compared to ($0.03) per share for the fiscal year ended July 31, 2021. | |
| ● | Net cash used in operations for the fiscal year ended July 31, 2022 was ($2.5 million), compared to ($1.2 million) for the fiscal year ended July 31, 2021. |
Business Update
John Kasperski, Vice President of Sales, immediately began building a seasoned sales team after joining PURE to execute PURE’s sales plan. PURE’s sales team is now made up of three street sales executives, a Midwest regional manager, and two assistant vice presidents of corporate accounts. Additionally, as part of the sales plan, a premier Customer Resource Management (CRM) software license was purchased and implemented to allow the daily tracking of sales activity and related transactions.
Under John’s direction, PURE has implemented a two-team sales approach to support our existing food safety clients and our new street sales team assigned to janitorial and sanitation accounts. Both teams have sales quotas and are expected to develop new business. Our street sales team has a combined total of over 25 years of experience in selling cleaners, sanitizers, and disinfectants. Their focus will be on food preparation, food service, long-term care facilities, schools, and day care centers. Having previously relied on distributors to make breakthroughs in these segments, PURE is seizing an opportunity to secure more of the janitorial and sanitation market share with its own in-house sales team.
Dr. Zhinong Yan, Executive Vice President of Science and Business Development, has been active in supporting PURE’s corporate account efforts with his contacts in the industry. He also led the Company’s efforts at the Food Science Association, one of the leading groups of the International Association of Food Protection. Additionally, Dr. Yan is slated to chair two sessions at the 2023 China International Food Safety and Quality Conference.
Tom Y. Lee, Chief Executive Officer, said, “The hiring of a technical sales team with proven experience has been accomplished in the Midwest region of the country. We will continue to expand regionally, as we expect increased revenue to emerge over the next two quarters as we ramp up sales efforts in food service, education, and long-term care segments. In addition, I’m pleased with the number of quality new distributors and end users that have committed to our unique SDC solution during the recent fiscal year,” concluded Lee.
About PURE Bioscience, Inc.
PURE 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, 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-looking Statements: Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Statements in this press release, including quotes from management, concerning the Company’s expectations, plans, business outlook, future performance, future potential revenues, expected results of the Company’s marketing efforts, the execution of contracts under negotiation and any other statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements.” Forward-looking statements inherently involve risks and uncertainties that could cause our actual results to differ materially from any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the Company’s failure to implement or otherwise achieve the benefits of its proposed business initiatives and plans; economic and other disruptions resulting from COVID-19; acceptance of the Company’s current and future products and services in the marketplace, including the Company’s ability to convert successful evaluations and tests for PURE Control and PURE Hard Surface into customer orders and customers continuing to place product orders as expected and to expand their use of the Company’s products; the Company’s ability to maintain relationships with its partners and other counterparties; the Company’s ability to generate sufficient revenues and reduce its operating expenses in order to reach profitability; the Company’s ability to raise the funding required to support its continued operations and the implementation of its business plan; the ability of the Company to develop effective new products and receive required regulatory approvals for such products, including the required data and regulatory approvals required to use its SDC-based technology as a direct food contact processing aid in raw meat processing and to expand its use in OLR poultry processing; competitive factors, including customer acceptance of the Company’s SDC-based products that are typically more expensive than existing treatment chemicals; dependence upon third-party vendors, including to manufacture its products; 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, 2022. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
Contact:
Mark Elliott, VP Finance
PURE Bioscience, Inc.
Phone: 619-596-8600 ext.: 116
Consolidated Balance Sheets
| July 31, 2022 | July 31, 2021 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 3,391,000 | $ | 2,390,000 | ||||
| Accounts receivable | 201,000 | 368,000 | ||||||
| Inventories, net | 179,000 | 332,000 | ||||||
| Restricted cash | 75,000 | 75,000 | ||||||
| Prepaid expenses | 18,000 | 32,000 | ||||||
| Total current assets | 3,864,000 | 3,197,000 | ||||||
| Property, plant and equipment, net | 620,000 | 740,000 | ||||||
| Patents, net | — | 366,000 | ||||||
| Total assets | $ | 4,484,000 | $ | 4,303,000 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 488,000 | $ | 593,000 | ||||
| Accrued liabilities | 87,000 | 138,000 | ||||||
| Loan payable | — | 239,000 | ||||||
| Total current liabilities | 575,000 | 970,000 | ||||||
| Total liabilities | 575,000 | 970,000 | ||||||
| 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: 150,000,000 shares authorized, 111,356,473 shares issued and outstanding at July 31, 2022, and 87,223,141 shares issued and outstanding at July 31, 2021 | 1,114,000 | 873,000 | ||||||
| Additional paid-in capital | 132,079,000 | 128,253,000 | ||||||
| Accumulated deficit | (129,284,000 | ) | (125,793,000 | ) | ||||
| Total stockholders’ equity | 3,909,000 | 3,333,000 | ||||||
PURE Bioscience, Inc.
Consolidated Statements of Operations
| Year ended | ||||||||
| July 31, | ||||||||
| 2022 | 2021 | |||||||
| Net product sales | $ | 1,813,000 | $ | 3,698,000 | ||||
| Royalty revenue | 40,000 | 229,000 | ||||||
| Total revenue | 1,853,000 | 3,927,000 | ||||||
| Cost of goods sold | 853,000 | 1,852,000 | ||||||
| Gross Profit | 1,000,000 | 2,075,000 | ||||||
| Operating costs and expenses | ||||||||
| Selling, general and administrative | 4,106,000 | 4,047,000 | ||||||
| Research and development | 319,000 | 339,000 | ||||||
| Impairment of intangibles | 299,000 | — | ||||||
| Total operating costs and expenses | 4,724,000 | 4,386,000 | ||||||
| Loss from operations | (3,724,000 | ) | (2,311,000 | ) | ||||
| Other income (expense) | ||||||||
| Interest expense, net | (6,000 | ) | (4,000 | ) | ||||
| Other income (expense), net | — | (4,000 | ) | |||||
| Gain on extinguishment of indebtedness, net | 239,000 | — | ||||||
| Total other income (expense) | 233,000 | (8,000 | ) | |||||
| Net loss | $ | (3,491,000 | ) | $ | (2,319,000 | ) | ||
| Basic and diluted net loss per share | $ | (0.04 | ) | $ | (0.03 | ) | ||
| Shares used in computing basic and diluted net loss per share | 88,835,424 | 87,174,312 | ||||||
PURE Bioscience, Inc.
Consolidated Statements of Stockholders’ Equity
| Common Stock | Additional Paid-In | Accumulated | Total Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance July 31, 2020 | 87,072,951 | $ | 871,000 | $ | 127,414,000 | $ | (123,474,000 | ) | $ | 4,811,000 | ||||||||||
| Share-based compensation expense - stock options | — | — | 758,000 | — | 758,000 | |||||||||||||||
| Share-based compensation expense - restricted stock units | — | — | 83,000 | — | 83,000 | |||||||||||||||
| Issuance of common stock upon the exercise of stock options | 150,190 | 2,000 | (2,000 | ) | — | — | ||||||||||||||
| Net loss | — | — | — | (2,319,000 | ) | (2,319,000 | ) | |||||||||||||
| Balance July 31, 2021 | 87,223,141 | 873,000 | 128,253,000 | (125,793,000 | ) | 3,333,000 | ||||||||||||||
| Issuance of common stock in private placements to related parties, net | 23,333,332 | 233,000 | 3,267,000 | 3,500,000 | ||||||||||||||||
| Share-based compensation expense - stock options | — | — | 465,000 | — | 465,000 | |||||||||||||||
| Share-based compensation expense - restricted stock units | — | — | 102,000 | — | 102,000 | |||||||||||||||
| Issuance of common stock for vested restricted stock units | 800,000 | 8,000 | (8,000 | ) | — | — | ||||||||||||||
| Net loss | — | — | — | (3,491,000 | ) | (3,491,000 | ) | |||||||||||||
| Balance July 31, 2022 | 111,356,473 | $ | 1,114,000 | $ | 132,079,000 | $ | (129,284,000 | ) | $ | 3,909,000 | ||||||||||
PURE Bioscience, Inc.
Consolidated Statements of Cash Flows
| Year Ended | ||||||||
| July 31, | ||||||||
| 2022 | 2021 | |||||||
| Operating activities | ||||||||
| Net loss | $ | (3,491,000 | ) | $ | (2,319,000 | ) | ||
| Adjustments to reconcile loss to net cash used in operating activities: | ||||||||
| Share-based compensation | 567,000 | 841,000 | ||||||
| Fixed assets write-off | 55,000 | — | ||||||
| Depreciation and amortization | 213,000 | 172,000 | ||||||
| Reserve for inventory obsolescence | 75,000 | 150,000 | ||||||
| Impairment of intangibles | 299,000 | — | ||||||
| Gain on extinguishment of indebtedness | (239,000 | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 167,000 | 721,000 | ||||||
| Inventories | 78,000 | 65,000 | ||||||
| Prepaid expenses | 14,000 | (16,000 | ) | |||||
| Accounts payable and accrued liabilities | (156,000 | ) | (781,000 | ) | ||||
| Net cash used in operating activities | (2,418,000 | ) | (1,167,000 | ) | ||||
| Investing activities | ||||||||
| Purchases of property, plant and equipment | (81,000 | ) | (521,000 | ) | ||||
| Net cash used in investing activities | (81,000 | ) | (521,000 | ) | ||||
| Financing activities | ||||||||
| Net proceeds from the sale of common stock | 3,500,000 | — | ||||||
| Net proceeds from paycheck protection program loan | — | 239,000 | ||||||
| Net cash provided by financing activities | 3,500,000 | 239,000 | ||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 1,001,000 | (1,449,000 | ) | |||||
| Cash, cash equivalents, and restricted cash at beginning of year | 2,465,000 | 3,914,000 | ||||||
| Cash, cash equivalents, and restricted cash at end of year | $ | 3,466,000 | $ | 2,465,000 | ||||
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets | ||||||||
| Cash and cash equivalents | $ | 3,391,000 | $ | 2,390,000 | ||||
| Restricted cash | 75,000 | 75,000 | ||||||
| Total cash, cash equivalents and restricted cash | $ | 3,466,000 | $ | 2,465,000 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for taxes | $ | 2,000 | $ | 4,000 | ||||