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): October 28, 2021
PUREBIOSCIENCE, INC.
(Exactname of registrant as specified in its charter)
| Delaware | 001-14468 | 33-0530289 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission<br><br> <br>File Number) | (IRS Employer<br><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<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material 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)) |
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 October 28, 2021, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal year ended July 31, 2021 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 October 28 2021. |
|---|---|
| * | Exhibit<br> 99.1 is 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:<br> October 28, 2021 | By: | /s/ Tom Y. Lee |
| Tom<br> Y. Lee | ||
| Chief<br> Executive Officer |
EXHIBITINDEX
| Exhibit Number | Description |
|---|---|
| 99.1 | Press Release, dated October 28, 2021. |
Exhibit99.1
PUREBioscience Reports Fiscal 2021
FinancialResults
Updateon Business and PURE’s SDC-Based Antimicrobial Food Safety Solutions
RANCHO CUCAMONGA, CA (October 28, 2021) – PURE Bioscience, Inc. (OTCQB: PURE) (the “Company,” “PURE” or “we”), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal year ended July 31, 2021.
Summaryof Results – Year-End Operations
| ● | Net<br> product sales were $3,698,000 and $6,917,000 for the fiscal years ended July 31, 2021 and 2020, respectively. The decrease of $3,219,000<br> was attributable to decreased sales across our distribution and end-user network servicing the food processing, transportation and<br> janitorial industry. In addition, during the fiscal year ended July 31, 2021, we recognized $229,000 in royalties from a nonexclusive<br> third-party distributor. |
|---|---|
| ● | Net<br> loss for the fiscal year ended July 31, 2021 was ($2.3 million), compared to net income of $4,000 for the fiscal year ended July<br> 31, 2020. |
| ● | Net<br> loss, excluding interest expense, depreciation and amortization and share-based compensation, for the fiscal year ended July 31,<br> 2021 was ($1.3 million), compared to net income of $982,000 for the fiscal year ended July 31, 2020. |
| ● | Net<br> loss per share was ($0.03) for the fiscal year ended July 31, 2021, compared to zero net income per share for the fiscal year ended<br> July 31, 2020. |
| ● | Gross<br> margin, as a percentage of net product sales, was 50% and 58% for the fiscal years ended July 31, 2021 and 2020, respectively. The<br> decrease in gross margin percentage was primarily attributable to the sale of higher-margin formulations and packaging configurations<br> of our products during the fiscal year ended July 31, 2020, compared to the fiscal year ended July 31, 2021. |
| ● | Net<br> cash used in operations for the fiscal year ended July 31, 2020 was ($1.2 million), compared to net cash provided by operations of<br> $669,000 for the fiscal year ended July 31, 2020. |
BusinessUpdate
| ● | PURE<br> continues to work closely with the fresh produce processing industry as it recovers from the global pandemic sales slump in food<br> service and packaged retail products. PURE is working with Taylor Farms to successfully implement new use cases to enhance Taylor<br> Farms’ food safety program. |
|---|---|
| ● | PURE’s<br> environmental solutions have now been adopted by a state-of-the-art national citrus packing company with twenty-four locations. The<br> initial rollout included approximately 25% of its locations with the remainder to be scheduled for training and adoption. PURE’s<br> environmental solutions were the only disinfectants chosen by this citrus packing company. |
| ● | PURE’s<br> technology is also providing a new direction in growing produce with a farming innovation company with deep expertise in plant science,<br> robotics and artificial intelligence with operations in their new, 535,000-square-foot indoor facility in Texas. |
| ● | PURE<br> has added Tim Steffensmeier to our sales team. He has twenty years of experience in the food industry and has held key leadership<br> roles in production, sanitation and food safety departments. Mr. Steffensmeier began his career at Kraft Foods and for the past ten<br> years has worked at Commercial Food Sanitation (CFS), where he was one of the founding members. CFS is an industry-leading food safety<br> training, inspection, and consulting service. Mr. Steffensmeier brings broad field experience and contacts to our sales efforts. |
| ● | PURE<br> has also grown our relationship with Factor IV Solutions, a food-processing solutions provider with seven years of success in supporting<br> the produce industry. PURE’s environmental solution is being adopted by their customers from farm through processing. |
| --- | --- |
| ● | As<br> the fresh produce industry ramps back up, two of the fresh produce industry’s top four processors are evaluating PURE’s<br> technology for adoption. PURE is providing training and solutions in multiple locations to support the potential adoption of PURE’s<br> technology. We have seen the dairy, bakery and restaurant segments continue to increase their use of our solutions. |
| ● | Our<br> partners in the janitorial and sanitation industries have promoted the adoption of PURE’s solutions in schools reopening from<br> the pandemic. PURE Hard Surface has been adopted and is being used daily in public and private school districts in multiple states,<br> including Texas, Oklahoma, Alabama, Tennessee, Arkansas, Maryland, Florida, North Carolina, Washington, Oregon, and California. Marathon<br> Specialty Chemicals and its distribution partners are working with trade publications to provide information on our solutions. |
| ● | LightHouse<br> for the Blind and Visually Impaired (LightHouse) is finalizing the production of PURE Hard Surface on its new bottling lines. LightHouse<br> has become one of our top three customers as its sales have increased under the General Services Administration’s (GSA) AbilityOne<br> program, the program in which federal agencies procure goods and services from companies that provide employment opportunities to<br> individuals with disabilities. We expect LightHouse to start producing our product on site using blind and visually-impaired personnel<br> within the next six weeks. In recognition of our partnership with Lighthouse, PURE received the Vendor Partner of the Year award<br> from the National Industries for the Blind (NIB) at its Fall 2021 National Convention (canceled due to the COVID-19 Delta variant).<br> Notification of the award was sent to all NIB customers and distributors. |
| ● | With<br> the help of Board Member Kristin Taylor, PURE is establishing and developing a formal marketing function. After reviewing a number<br> of partners and models, PURE has chosen an outside partner to build and co-manage a marketing function. Marketing efforts will drive<br> more leads, generate additional revenue, build global brand delineation and recognition, and support product development. The project<br> includes revamping PURE’s website, creating a digital presence, driving key segment branding, content creation, consistent<br> ad campaigns, and more, all with the goal of revenue generation and brand building. We expect to roll out our initial marketing campaign<br> during the first calendar quarter of 2022. |
Tom Y. Lee, Chief Executive Officer, said that, “As noted in our fiscal third quarter press release, the uncertainty related to chemistry supply during the initial phase of the pandemic caused a significant increase in revenues during the late third and fourth quarter of last year. This over-supply took many of our large end-users and distributors months to work through and sell into the market. During the latter stage of fiscal 2021, the reorder process began to normalize as our fiscal fourth quarter product revenue was $857,000. We are continuing to work alongside our customers as the industries we are focused on return to normalcy,” concluded Lee.
AboutPURE 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.
Useof Non-GAAP Financial Measures
To supplement PURE’s financial statements presented on a GAAP basis, PURE provides Modified EBITDA as supplemental measures of its performance.
To supplement PURE’s financial statements presented on a GAAP basis, PURE provides Adjusted EBITDA and free cash flow as supplemental measures of its performance. However, Modified EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity. We define Modified EBITDA as net income (loss), plus interest expense, depreciation and amortization and stock-based compensation expense. We present Modified EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Modified EBITDA in developing our internal budgets, forecasts and strategic plan; in analyzing the effectiveness of our business strategies in evaluating potential acquisitions; making compensation decisions; and in communications with our board of directors concerning our financial performance.
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, plans, business outlook or future performance, and any other statements concerning assumptions madeor expectations as 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 failure toimplement or otherwise achieve the benefits of its proposed business initiatives and plans; economic and other disruptions resultingfrom COVID-19; acceptance of the Company’s current and future products and services in the marketplace, including the Company’sability to convert successful evaluations and tests for PURE Control and PURE Hard Surface into customer orders and customers continuingto place product orders as expected and to expand their use of the Company’s products; the Company’s ability to maintainrelationships with its partners and other counterparties; the Company’s ability to generate sufficient revenues and reduce itsoperating expenses in order to reach profitability; the Company’s ability to raise the funding required to support its continuedoperations and the implementation of its business plan; the ability of the Company to develop effective new products and receive requiredregulatory approvals for such products, including the required data and regulatory approvals required to use its SDC-based technologyas 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 periodicreport filings with the Securities and Exchange Commission (the SEC), including its Form 10-K for the fiscal year ended July 31, 2021.You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. By makingthese forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after thedate of this release.
Contact:
Mark Elliott, VP Finance
PURE Bioscience, Inc.
Ph: 619-596-8600 ext: 116
PUREBioscience, Inc.
ConsolidatedBalance Sheets
| July<br> 31, 2020 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current<br> assets | |||||
| Cash<br> and cash equivalents | 2,390,000 | $ | 3,839,000 | ||
| Accounts<br> receivable | 368,000 | 1,089,000 | |||
| Inventories | 332,000 | 547,000 | |||
| Restricted<br> cash | 75,000 | 75,000 | |||
| Prepaid<br> expenses | 32,000 | 16,000 | |||
| Total<br> current assets | 3,197,000 | 5,566,000 | |||
| Property,<br> plant and equipment, net | 740,000 | 316,000 | |||
| Patents,<br> net | 366,000 | 441,000 | |||
| Total<br> assets | 4,303,000 | $ | 6,323,000 | ||
| Liabilities<br> and stockholders’ equity | |||||
| Current<br> liabilities | |||||
| Accounts<br> payable | 593,000 | $ | 1,344,000 | ||
| Accrued<br> liabilities | 138,000 | 168,000 | |||
| Loan<br> payable | 239,000 | — | |||
| Total<br> current liabilities | 970,000 | 1,512,000 | |||
| Total<br> liabilities | 970,000 | 1,512,000 | |||
| Commitments<br> and contingencies | |||||
| Stockholders’<br> equity | |||||
| Preferred<br> stock, 0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding | — | — | |||
| Common<br> stock, 0.01 par value: 150,000,000 shares authorized, 87,223,141 shares issued and outstanding at July 31, 2021, and 87,072,951<br> shares issued and outstanding at July 31, 2020 | 873,000 | 871,000 | |||
| Additional<br> paid-in capital | 128,253,000 | 127,414,000 | |||
| Accumulated<br> deficit | (125,793,000 | ) | (123,474,000 | ) | |
| Total<br> stockholders’ equity | 3,333,000 | 4,811,000 | |||
| Total<br> liabilities and stockholders’ equity | 4,303,000 | $ | 6,323,000 |
All values are in US Dollars.
PUREBioscience, Inc.
ConsolidatedStatements of Operations
| Year<br> ended | ||||||
|---|---|---|---|---|---|---|
| July<br> 31, | ||||||
| 2021 | 2020 | |||||
| Net<br> product sales (including related party sales of $124,000 for the fiscal year ended July 31, 2020) | $ | 3,698,000 | $ | 6,917,000 | ||
| Royalty<br> revenue | 229,000 | — | ||||
| Total<br> revenue | 3,927,000 | 6,917,000 | ||||
| Cost<br> of goods sold | 1,852,000 | 2,896,000 | ||||
| Gross<br> Profit | 2,075,000 | 4,021,000 | ||||
| Operating<br> costs and expenses | ||||||
| Selling,<br> general and administrative | 4,047,000 | 3,695,000 | ||||
| Research<br> and development | 339,000 | 322,000 | ||||
| Total<br> operating costs and expenses | 4,386,000 | 4,017,000 | ||||
| Income<br> (loss) from operations | (2,311,000 | ) | 4,000 | |||
| Other<br> income (expense) | ||||||
| Interest<br> expense, net | (4,000 | ) | (5,000 | ) | ||
| Other<br> income, net | (4,000 | ) | 5,000 | |||
| Total<br> other expense | (8,000 | ) | — | |||
| Net<br> income (loss) | $ | (2,319,000 | ) | $ | 4,000 | |
| Net<br> income (loss) per common share - basic | $ | (0.03 | ) | $ | 0.00 | |
| Net<br> income (loss) per common share - diluted | (0.03 | ) | 0.00 | |||
| Weighted<br> average shares - basic | 87,174,312 | 82,209,487 | ||||
| Weighted<br> average shares - diluted | 87,174,312 | 84,611,822 |
PUREBioscience, Inc.
ConsolidatedStatements of Stockholders’ Equity
| Common<br> Stock | Additional<br><br> Paid-In | Accumulated | Total<br><br> Stockholders’ | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Shares | Amount | Capital | Deficit | Equity | |||||||||
| Balance<br> July 31, 2019 | 76,732,334 | $ | 768,000 | $ | 123,900,000 | $ | (123,478,000 | ) | $ | 1,190,000 | |||
| Issuance<br> of common stock in private placements, net | 9,758,619 | 97,000 | 2,733,000 | 2,830,000 | |||||||||
| Share-based<br> compensation expense - stock options | — | — | 555,000 | — | 555,000 | ||||||||
| Share-based<br> compensation expense - restricted stock units | — | — | 232,000 | — | 232,000 | ||||||||
| Issuance<br> of common stock upon the vesting of restricted stock units | 400,000 | 4,000 | (4,000 | ) | — | — | |||||||
| Issuance<br> of common stock upon the exercise of stock options | 181,998 | 2,000 | (2,000 | ) | — | — | |||||||
| Net<br> income | — | — | — | 4,000 | 4,000 | ||||||||
| Balance<br> July 31, 2020 | 87,072,951 | 871,000 | 127,414,000 | (123,474,000 | ) | 4,811,000 | |||||||
| Share-based<br> compensation expense - stock options | — | — | 758,000 | — | 758,000 | ||||||||
| Share-based<br> compensation expense - restricted stock units | — | — | 83,000 | — | 83,000 | ||||||||
| Issuance<br> of common stock upon exercise of stock options | 150,190 | 2,000 | (2,000 | ) | — | — | |||||||
| Net<br> loss | — | — | — | (2,319,000 | ) | (2,319,000 | ) | ||||||
| Balance<br> July 31, 2021 | 87,223,141 | $ | 873,000 | $ | 128,253,000 | $ | (125,793,000 | ) | $ | 3,333,000 |
PUREBioscience, Inc.
ConsolidatedStatements of Cash Flows
| Year<br> Ended | ||||||
|---|---|---|---|---|---|---|
| July<br> 31, | ||||||
| 2021 | 2020 | |||||
| Operating<br> activities | ||||||
| Net<br> income (loss) | $ | (2,319,000 | ) | $ | 4,000 | |
| Adjustments<br> to reconcile net income (loss) to net cash used in operating activities: | ||||||
| Share-based<br> compensation | 841,000 | 787,000 | ||||
| Amortization<br> of stock issued for services | — | 4,000 | ||||
| Depreciation<br> and amortization | 172,000 | 192,000 | ||||
| Reserve<br> for inventory obsolescence | 150,000 | — | ||||
| Changes<br> in operating assets and liabilities: | ||||||
| Accounts<br> receivable | 721,000 | (716,000 | ) | |||
| Inventories | 65,000 | (370,000 | ) | |||
| Prepaid<br> expenses | (16,000 | ) | (2,000 | ) | ||
| Accounts<br> payable and accrued liabilities | (781,000 | ) | 774,000 | |||
| Deferred<br> rent | — | (4,000 | ) | |||
| Net<br> cash provided by (used) in operating activities | (1,167,000 | ) | 669,000 | |||
| Investing<br> activities | ||||||
| Purchases<br> of property, plant and equipment | (521,000 | ) | (58,000 | ) | ||
| Net<br> cash used in investing activities | (521,000 | ) | (58,000 | ) | ||
| Financing<br> activities | ||||||
| Net<br> proceeds from the sale of common stock | — | 2,830,000 | ||||
| Net<br> proceeds from payroll protection program loan | 239,000 | — | ||||
| Net<br> cash provided by financing activities | 239,000 | 2,830,000 | ||||
| Net<br> increase (decrease) in cash, cash equivalents, and restricted cash | (1,449,000 | ) | 3,441,000 | |||
| Cash,<br> cash equivalents, and restricted cash at beginning of year | 3,914,000 | 473,000 | ||||
| Cash,<br> cash equivalents, and restricted cash at end of year | $ | 2,465,000 | $ | 3,914,000 | ||
| Reconciliation<br> of cash, cash equivalents, and restricted cash to the consolidated balance sheets | ||||||
| Cash<br> and cash equivalents | $ | 2,390,000 | $ | 3,839,000 | ||
| Restricted<br> cash | 75,000 | 75,000 | ||||
| Total<br> cash, cash equivalents and restricted cash | $ | 2,465,000 | $ | 3,914,000 | ||
| Supplemental<br> disclosure of cash flow information | ||||||
| Cash<br> paid for taxes | $ | 4,000 | $ | 4,000 |
Set forth below is a reconciliation of net loss to Modified EBITDA for the fiscal years ended July 31, 2021 and 2020:
| July<br> 31, | |||||
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| Net<br> income (loss) | $ | (2,319,000 | ) | $ | 4,000 |
| Add<br> (deduct) | |||||
| Other<br> (income) expense | 4,000 | — | |||
| Depreciation<br> and amortization | 172,000 | 192,000 | |||
| Stock-based<br> compensation | 841,000 | 787,000 | |||
| Modified<br> EBITDA | $ | (1,302,000 | ) | $ | 983,000 |