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 15, 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 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)) |
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 15, 2021, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal quarter ended April 30, 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 June 15, 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> June 15, 2021 | By: | /s/ Tom Y. Lee |
| Tom<br> Y. Lee | ||
| Chief<br> Executive Officer |
PUREBioscience Reports Fiscal 2021 Third Quarter
AndNine-Month Financial Results
Updateon Business Segments and PURE’s SDC-Based Antimicrobial Food Safety Solutions
RANCHO CUCAMONGA, CA (June 14, 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 third quarter and nine-month period ended April 30, 2021.
Q3:Summary of Results of Operations
| ● | Net<br> product sales for the fiscal third quarter ended April 30, 2021 decreased 75% to $556,000,<br> compared to $2,221,000 for the fiscal third quarter ended April 30, 2020. The decrease of<br> $1,665,000 was attributable to decreased sales across our distribution and end-user network<br> servicing the food processing and transportation industry. During the three months ended<br> April 30, 2020, the Company experienced a drastic increase in sales of SDC due to the onset<br> of the COVID-19 pandemic. |
|---|---|
| ● | Net<br> loss for the fiscal third quarter ended April 30, 2021 was $811,000, compared to net income<br> of $473,000 for the fiscal third quarter ended April 30, 2020. Net loss, excluding share-based<br> compensation, for the fiscal third quarter ended April 30, 2021 was $598,000, compared to<br> net income of $519,000 for the fiscal third quarter ended April 30, 2020. |
| --- | --- |
| ● | Net<br> loss per share was ($0.01) for the fiscal third quarter ended April 30, 2021, compared to<br> net income per share of $0.01 for the fiscal third quarter ended April 30, 2020. |
| --- | --- |
| ● | Gross<br> margin as a percentage of net product sales was 56% for the fiscal second quarters ended<br> April 30, 2021 and 2020. |
| --- | --- |
NineMonths: Summary of Results of Operations
| ● | Net<br> product sales for the nine months ended April 30, 2021 decreased 4% to $2,841,000, compared<br> to $2,968,000 for the nine months ended April 30, 2020. The decrease of $127,000 was attributable<br> to decreased sales across our distribution and end-user network servicing the food processing<br> and transportation industry. In addition, during the nine months ended April 30, 2021, we<br> recognized $227,000 in royalties from a nonexclusive third-party distributor. |
|---|---|
| ● | Net<br> loss for the nine months ended April 30, 2021 was $1,586,000, compared to $1,318,000 for<br> the nine months ended April 30, 2020. Net loss, excluding share-based compensation, for the<br> nine months ended April 30, 2021 was $903,000, compared to $725,000 for the nine months ended<br> April 30, 2020. |
| --- | --- |
| ● | Net<br> loss per share was ($0.02) for the nine months ended April 30, 2021 and 2020. |
| --- | --- |
| ● | Gross<br> margin as a percentage of net product sales was 56% and 57% for the nine months ended April<br> 30, 2021 and 2020, respectively. The decrease in gross margin percentage was primarily attributable<br> to the sale of lower-margin formulations and packaging configurations of our products during<br> the nine months ended April 30, 2021, compared to the nine months ended April 30, 2020. |
| --- | --- |
BusinessUpdate
| ● | PURE®<br> Hard Surface |
|---|---|
| ○ | During<br> the fiscal third quarter, PURE has worked alongside our customers to ensure supply and support<br> as their volumes increase following pandemic business interruptions. Taylor Farms has asked<br> us to work closely with their management to ensure the use of PURE Hard Surface, which they<br> deem critical to their Food Safety programs. PURE will be providing re-training and ensuring<br> the use of our chemistry in each of their locations across the United States (U.S.). We are<br> taking similar steps with our protein customers and are seeing increased orders as the industry<br> as a whole begins increased throughput. |
| --- | --- |
| ○ | Final<br> evaluation and procedures are being completed with three large national produce companies<br> with a combined total of 61 U.S. facilities for use in their environmental food safety programs<br> and another national vegetable processor with 12 facilities is in evaluation protocol. Efforts<br> continue in dairy, bakery and restaurant segments as well. |
| --- | --- |
| ○ | Our<br> janitorial and cleaning distribution continues as businesses open. Along with the on-going<br> business in government and private locations, PURE has finalized protocols for treating school<br> buses and county school districts in five states that are now treating their fleets with<br> PURE Hard Surface. We expect to grow this effective and easy-to-use program as more districts<br> open. |
| --- | --- |
| ○ | As<br> we discussed in the Business Update for the fiscal second quarter ended January 31, 2021,<br> the Government Supply Administration (GSA) this past<br> February listed PURE Hard Surface on the AbilityOne Program, the program in which federal<br> agencies procure goods and services from companies that provide employment opportunities<br> to individuals with disabilities. Under program rules, agencies procuring goods and services<br> must purchase from companies whose goods and services are listed on the AbilityOne program.<br> Lighthouse for the Blind and Visually Impaired (LHBVI), PURE’s AbilityOne program<br> partner, has completed construction of its Northern California bottling facility and will<br> begin deploying PURE’s packaging line at that location in June 2021. Once this occurs,<br> agencies that wish to purchase surface sanitizer/disinfectant<br> products will be required to purchase PURE Hard Surface, the only surface sanitizer/disinfectant<br> product listed on the AbilityOne program that is EPA Category IV (lowest toxicity and irritant<br> level), has the shortest kill times and requires no rinse even on food contact surfaces.<br> Along with the current LHBVI distributors already purchasing PURE Hard Surface, the AbilityOne<br> distribution network is comprised of 276 independent distributors, 211 military base supply<br> distributors and four national distribution networks, all of which will have access to our<br> products. We are seeing an increase in sales from LHBVI as GSA distributors begin to stock<br> PURE Hard Surface ahead of the mandatory requirements. We are also expecting to see an increased<br> use by the Federal Aviation Administration (FAA) as travel increases and more FAA employees<br> are brought back to work. |
| --- | --- |
| ● | PURE<br> Control® |
| --- | --- |
| ○ | PURE<br> and Smart Wash Solutions continue to be committed to the adoption of PURE Control as a solution<br> for chopped and shredded leafy greens. |
| --- | --- |
| ○ | As<br> reported, the use of PURE Control continues in the treatment of pre-cut lettuce, berries<br> and tomatoes at various locations. Our efforts continue with processors on fruit and vegetable<br> products. |
| --- | --- |
| ○ | We<br> continue to work with several processors to use PURE Control to enhance the protection of<br> fruit, herbs, onions, broccoli and other processed vegetables. |
| --- | --- |
Tom Y. Lee, Chief Executive Officer, said that, “Comparing third quarter net sales from this year to last year reflects the initial impact of the COVID crisis as sales increased 612% during Q3 of fiscal 2020. During the early stages of the pandemic, many of our end-users and distributors over-purchased product due to global supply chain uncertainty, an experience affecting industry as a whole. Over the course of the last few months, we are seeing regular reorders from our customer base and are continuing to grow new and existing opportunities. In addition, with the restaurant business severely curtailed during the pandemic, both our protein and produce food processing customers experienced a corresponding reduction in their orders which resulted in reduced production of food processing. This was evident in both our large protein and produce segment customers in fiscal third quarter 2021. Coming out of the shutdown we are now working with all our produce customers to ensure the continued use of PURE Hard Surface and PURE Control as part of their food safety programs. We are also taking similar steps with our protein customers and are seeing an increased frequency in orders as the industry as a whole returns to pre-COVID output,” 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
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 SmartWash and FAA), plans, business outlook or future performance, and anyother statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-lookingstatements.” Forward-looking statements inherently involve risks and uncertainties that could cause our actual results to differmaterially from any forward-looking statements. Factors that could cause or contribute to such differences include, but are not limitedto, the Company’s failure to implement or otherwise achieve the benefits of its proposed business initiatives and plans; economicand 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 customerorders and 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 sufficient revenuesand reduce its operating expenses in order to reach profitability; the Company’s ability to raise the funding required to supportits continued operations and the implementation of its business plan; the ability of the Company to develop effective new products andreceive required regulatory approvals for such products, including the required data and regulatory approvals required to use its SDC-basedtechnology as a direct food contact processing aid in raw meat processing and to expand its use in OLR poultry processing; competitivefactors, including customer acceptance of the Company’s SDC-based products that are typically more expensive than existing treatmentchemicals; dependence upon third-party vendors, including to manufacture its products; and other risks detailed in the Company’speriodic report filings with the Securities and Exchange Commission (the SEC), including its Form 10-K for the fiscal year ended July31, 2020, Form 10-Q for the fiscal first quarter ended October 31, 2020, Form 10-Q for the fiscal second quarter ended January 31, 2021,and Form 10-Q for the fiscal third quarter ended April 30, 2021. 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 obligationto update these statements for revisions or 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, 2020 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 2,819,000 | $ | 3,839,000 | ||
| Accounts receivable | 221,000 | 1,089,000 | |||
| Inventories | 568,000 | 547,000 | |||
| Restricted cash | 75,000 | 75,000 | |||
| Prepaid expenses | 35,000 | 16,000 | |||
| Total current assets | 3,718,000 | 5,566,000 | |||
| Property, plant and equipment, net | 747,000 | 316,000 | |||
| Patents, net | 381,000 | 441,000 | |||
| Total assets | 4,846,000 | $ | 6,323,000 | ||
| Liabilities and stockholders’ equity | |||||
| Current liabilities | |||||
| Accounts payable | 557,000 | $ | 1,344,000 | ||
| Accrued liabilities | 142,000 | 168,000 | |||
| Loan payable | 239,000 | — | |||
| Total current liabilities | 938,000 | 1,512,000 | |||
| 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, 87,223,141 shares issued and outstanding at April 30, 2021, and 87,072,951 shares issued and outstanding at July 31, 2020 | 873,000 | 871,000 | |||
| Additional paid-in capital | 128,095,000 | 127,414,000 | |||
| Accumulated deficit | (125,060,000 | ) | (123,474,000 | ) | |
| Total stockholders’ equity | 3,908,000 | 4,811,000 | |||
| Total liabilities and stockholders’ equity | 4,846,000 | $ | 6,323,000 |
All values are in US Dollars.
PUREBioscience, Inc.
CondensedConsolidated Statements of Operations
(Unaudited)
| Nine Months Ended | Three months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| April 30, | April 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Net product sales (including related party sales of $124,000 in the three and nine months ended April 30, 2020) | $ | 2,841,000 | $ | 2,968,000 | $ | 556,000 | $ | 2,221,000 | ||||
| Royalty revenue | 227,000 | — | 5,000 | — | ||||||||
| Total revenue | 3,068,000 | 2,968,000 | 561,000 | 2,221,000 | ||||||||
| Cost of goods sold | 1,250,000 | 1,270,000 | 246,000 | 972,000 | ||||||||
| Gross profit | 1,818,000 | 1,698,000 | 315,000 | 1,249,000 | ||||||||
| Operating costs and expenses | ||||||||||||
| Selling, general and administrative | 3,136,000 | 2,790,000 | 1,036,000 | 690,000 | ||||||||
| Research and development | 265,000 | 227,000 | 89,000 | 85,000 | ||||||||
| Total operating costs and expenses | 3,401,000 | 3,017,000 | 1,125,000 | 775,000 | ||||||||
| Loss from operations | (1,583,000 | ) | (1,319,000 | ) | (810,000 | ) | 474,000 | |||||
| Other income (expense) | ||||||||||||
| Interest expense, net | (3,000 | ) | (4,000 | ) | (1,000 | ) | (1,000 | ) | ||||
| Other income, net | — | 5,000 | — | — | ||||||||
| Total other income (expense) | (3,000 | ) | 1,000 | (1,000 | ) | (1,000 | ) | |||||
| Net income (loss) | $ | (1,586,000 | ) | $ | (1,318,000 | ) | $ | (811,000 | ) | $ | 473,000 | |
| Net income (loss) per common share-basic | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | 0.01 | |
| Net income (loss) per common share-diluted | $ | (0.02 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | 0.01 | |
| Weighted average shares-basic | 87,157,857 | 80,634,951 | 87,223,141 | 83,979,076 | ||||||||
| Weighted average shares-diluted | 87,157,857 | 80,634,951 | 87,223,141 | 85,702,650 |
PUREBioscience, Inc.
CondensedConsolidated Statement of Stockholders’ Equity
(Unaudited)
| Nine Months Ended April 30, 2021 | Nine Months Ended April 30, 2020 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common Stock | Additional<br> Paid-In | Accumulated | Total<br> Stockholders’ | Common Stock | Additional<br> Paid-In | Accumulated | Total<br> Stockholders’ | |||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||
| Balances at beginning of period | 87,072,951 | $ | 871,000 | $ | 127,414,000 | $ | (123,474,000 | ) | $ | 4,811,000 | 76,732,334 | $ | 768,000 | $ | 123,900,000 | $ | (123,478,000 | ) | $ | 1,190,000 | ||||||
| Issuance of common stock in private placements, net | — | — | — | — | — | 9,758,619 | 97,000 | 2,733,000 | — | 2,830,000 | ||||||||||||||||
| Share-based compensation expense - stock options | — | — | 621,000 | — | 621,000 | — | — | 382,000 | — | 382,000 | ||||||||||||||||
| Share-based compensation expense - restricted stock units | — | — | 62,000 | — | 62,000 | — | — | 211,000 | — | 211,000 | ||||||||||||||||
| Issuance of common stock upon the exercise of stock options | 150,190 | 2,000 | (2,000 | ) | — | — | — | — | — | — | — | |||||||||||||||
| Issuance of common stock for vested restricted stock units | — | — | — | — | — | 400,000 | 4,000 | (4,000 | ) | — | — | |||||||||||||||
| Net loss | — | — | — | (1,586,000 | ) | (1,586,000 | ) | — | — | — | (1,318,000 | ) | (1,318,000 | ) | ||||||||||||
| Balances at end of period (Unaudited) | 87,223,141 | $ | 873,000 | $ | 128,095,000 | $ | (125,060,000 | ) | $ | 3,908,000 | 86,890,953 | $ | 869,000 | $ | 127,222,000 | $ | (124,796,000 | ) | $ | 3,295,000 | ||||||
| Three Months Ended April 30, 2021 | Three Months Ended April 30, 2020 | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Common Stock | Additional<br> Paid-In | Accumulated | Total<br> Stockholders’ | Common Stock | Additional<br> Paid-In | Accumulated | Total<br> Stockholders’ | |||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||
| Balances at beginning of period (Unaudited) | 87,223,141 | $ | 873,000 | $ | 127,882,000 | $ | (124,249,000 | ) | $ | 4,506,000 | 79,994,402 | $ | 800,000 | $ | 125,245,000 | $ | (125,269,000 | ) | $ | 776,000 | ||||||
| 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 | — | — | 193,000 | — | 193,000 | — | — | 46,000 | — | 46,000 | ||||||||||||||||
| Share-based compensation expense - restricted stock units | — | — | 20,000 | — | 20,000 | — | — | — | — | — | ||||||||||||||||
| Issuance of common stock upon the exercise of stock options | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||
| Net (loss) income | — | — | — | (811,000 | ) | (811,000 | ) | — | — | — | 473,000 | 473,000 | ||||||||||||||
| Balances at end of period (Unaudited) | 87,223,141 | $ | 873,000 | $ | 128,095,000 | $ | (125,060,000 | ) | $ | 3,908,000 | 86,890,953 | $ | 869,000 | $ | 127,222,000 | $ | (124,796,000 | ) | $ | 3,295,000 |
PUREBioscience, Inc.
CondensedConsolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| April 30, | ||||||
| 2021 | 2020 | |||||
| Operating activities | ||||||
| Net loss | $ | (1,586,000 | ) | $ | (1,318,000 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||
| Share-based compensation | 683,000 | 593,000 | ||||
| Amortization of stock issued for services | — | 4,000 | ||||
| Depreciation and amortization | 133,000 | 145,000 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | 868,000 | (1,234,000 | ) | |||
| Inventories | (21,000 | ) | (105,000 | ) | ||
| Prepaid expenses | (19,000 | ) | 4,000 | |||
| Accounts payable and accrued liabilities | (813,000 | ) | 753,000 | |||
| Deferred rent | — | (4,000 | ) | |||
| Net cash used in operating activities | (755,000 | ) | (1,162,000 | ) | ||
| Investing activities | ||||||
| Purchases of property, plant and equipment | (504,000 | ) | (44,000 | ) | ||
| Net cash used in investing activities | (504,000 | ) | (44,000 | ) | ||
| Financing activities | ||||||
| Net proceeds from the sale of common stock | — | 2,830,000 | ||||
| Net proceeds from payroll protection program loan | 239,000 | — | ||||
| Net cash provided by financing activities | 239,000 | 2,830,000 | ||||
| Net decrease and increase in cash, cash equivalents, and restricted cash | (1,020,000 | ) | 1,624,000 | |||
| Cash, cash equivalents, and restricted cash at beginning of period | 3,914,000 | 473,000 | ||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 2,894,000 | $ | 2,097,000 | ||
| Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | ||||||
| Cash and cash equivalents | $ | 2,819,000 | $ | 2,022,000 | ||
| Restricted cash | $ | 75,000 | $ | 75,000 | ||
| Total cash, cash equivalents and restricted cash | $ | 2,894,000 | $ | 2,097,000 | ||
| Supplemental disclosure of non-cash activities | ||||||
| Cash paid for taxes | $ | — | $ | 2,000 |