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): March 12, 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<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 March 12, 2020, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal quarter ended January 31, 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 March 12, 2020. |
|---|---|
| * | Exhibit<br> 99.1 is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange<br> Act 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> March 12, 2020 | By: | /s/ Tom Y. Lee |
| Tom<br> Y. Lee | ||
| Chief<br> Executive Officer |
EXHIBITINDEX
| Exhibit<br><br> Number | Description |
|---|---|
| 99.1 | Press Release, dated March 12, 2020. |
PUREBioscience Reports Fiscal 2020 Second Quarter
andSix-Month Financial Results
Updateon SDC-Based Antimicrobial Food Safety Solutions
RANCHO CUCAMONGA, CA (March 12, 2020) – PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal second quarter and six-month period ended January 31, 2020.
Q2:Summary of Results of Operations
| ● | Revenues<br> for the fiscal second quarter ended January 31, 2020 decreased 11% to $349,000, compared to revenues of $394,000 in<br> the prior year fiscal second quarter. The decrease was attributable to a reduction in sales to one of our distributors. |
|---|---|
| ● | Net<br> loss for the fiscal second quarter in 2020 was ($666,000), compared to a loss of ($1.3 million) for the fiscal<br> second quarter in 2019. Net loss, excluding share-based compensation, for the fiscal second quarter in 2020 was ($577,000),<br> compared to a loss of ($839,000) for the fiscal second quarter in 2019. |
| ● | Net<br> loss per share was ($0.01) for the fiscal second quarter in 2020 compared to ($0.02) for the fiscal second quarters<br> in 2019 and 2018. |
| ● | Gross<br> margin was 59% for both the three months ended January 31, 2020 and January 31, 2019. |
SixMonths: Summary of Results of Operations
| ● | Revenues<br> for the six months ended January 31, 2020 decreased 12% to $747,000, compared to revenues of $984,000 for the six<br> months ended January 31, 2019. The decrease was primarily attributable to a reduction in sales to one of our distributors,<br> as well as a reduction in sales of our raw material ingredient, SILVÉRION^®^. |
|---|---|
| ● | Net<br> loss for the six months ended January 31, 2020 was ($1.8 million), compared to ($3.9 million) for the six months<br> ended January 31, 2019. Net loss, excluding share-based compensation, for the six months ended January 31, 2020 was ($1.2million),<br> compared to ($1.7 million) for the six months ended January 31, 2019. |
| ● | Net<br> loss per share was ($0.02) compared to ($0.05) for the six months ended January 31, 2019 and January 31,<br> 2018. |
| ● | Gross<br> margin was 60% for the six months ended January 31, 2020 compared to 63% for the six months ended January<br> 31, 2019. The decrease in gross margin percentage was primarily attributable to the sale of higher margin formulations<br> and packaging configurations of our products during the six months ended January 31, 2019 compared to the six months<br> ended January 31, 2020. |
BusinessUpdate
| ● | PURE<br> Control^®^ |
|---|---|
| o | SmartWash®<br> Boost: We have continued to collaborate with SmartWash Solutions using PURE Control® as a pretreatment that has revolutionized<br> results on pre-cut iceberg lettuce. With the testing on iceberg nearing completion the focus has been on verification of the<br> efficacy on romaine lettuce which is of immediate and utmost importance to the produce industry as a whole. |
| --- | --- |
| o | We<br> are now in five facilities with another multinational produce processor currently using PURE Control to process berries and<br> tomatoes. Rollout into additional facilities is underway. |
| o | To<br> date, work is ongoing with six additional processors for treatment of herbs, tomatoes, onions, broccoli, cabbage and cut lettuce. |
| ● | PURE^®^Hard Surface |
| --- | --- |
| o | Food<br> Transportation Sanitization: We continue to supply two of the largest food distribution groups and are continuing<br> discussions with additional transportation companies that service restaurant chains, food processors and grocery store<br> chains. In addition, work has begun using our proprietary application technology to sanitize ocean-going containers<br> on export and import. |
| --- | --- |
| o | The<br> sales cycle has begun in poultry breeder barns and hatcheries for enhanced environmental control across all species. |
| o | We<br> have continued working with dairy industry leaders to provide new PURE Hard Surface applications directed at cheese production,<br> spray-drying operations and now wet operations (A Total Dairy Solution). We are now in 15 plants at two large national dairy<br> facilities with evaluations continuing in other locations. |
Tom Y. Lee, Chief Executive Officer, said that, “Our revenue for the three and six months ended January 31, 2020, was negatively impacted by a reduction in sales to a large distributor and a year-over-year reduction in sales of our raw material ingredient, SILVÉRION^®^.
I’m pleased to note that revenue for our fiscal third quarter is off to a record start. However, it is still too soon to tell if we will achieve our goal of cash flow breakeven. Based on customer forecasts and implementation plans we remain confident we will achieve our cash flow goal in the coming months.”
AboutPURE Bioscience, Inc.
PURE Bioscience, Inc. is focused on developing and commercializing our proprietary antimicrobial products primarily in the food safety arena — providing solutions to 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, or SDC. SDC 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
Anystatements contained in this press release that do not describe historical facts may constitute forward-looking statements asthat term is defined in the Private Securities Litigation Reform Act of 1995. Statements in this press release concerning theCompany’s expectations, plans, business outlook or future performance, and any other statements concerning assumptionsmade 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 materiallyfrom 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; acceptanceof the Company’s current and future products and services in the marketplace, including the Company’s ability to convertsuccessful evaluations and tests for PURE Control and PURE Hard Surface into customer orders and customers continuing to placeproduct orders as expected and to expand their use of the Company’s products; 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 second fiscal quarter ended January31, 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<br> 31, 2019 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash<br> and cash equivalents | 246,000 | $ | 398,000 | ||
| Accounts receivable | 156,000 | 373,000 | |||
| Inventories, net | 141,000 | 177,000 | |||
| Restricted cash | 75,000 | 75,000 | |||
| Prepaid expenses | 15,000 | 18,000 | |||
| Total current assets | 633,000 | 1,041,000 | |||
| Property, plant and equipment, net | 351,000 | 362,000 | |||
| Patents, net | 484,000 | 529,000 | |||
| Total assets | 1,468,000 | $ | 1,932,000 | ||
| Liabilities and stockholders’<br> equity | |||||
| Current liabilities | |||||
| Accounts payable | 589,000 | $ | 553,000 | ||
| Accrued liabilities | 103,000 | 185,000 | |||
| Total current liabilities | 692,000 | 738,000 | |||
| Deferred rent | — | 4,000 | |||
| Total liabilities | 692,000 | 742,000 | |||
| Commitments and contingencies | |||||
| Stockholders’ equity | |||||
| Preferred stock,<br> 0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding | — | — | |||
| Common stock, 0.01<br> par value: 100,000,000 shares authorized, 79,994,402 shares issued and outstanding at January 31, 2020, and 76,732,334 shares<br> issued and outstanding at July 31, 2019 | 800,000 | 768,000 | |||
| Additional paid-in<br> capital | 125,245,000 | 123,900,000 | |||
| Accumulated deficit | (125,269,000 | ) | (123,478,000 | ) | |
| Total stockholders’ equity | 776,000 | 1,190,000 | |||
| Total liabilities and stockholders’<br> equity | 1,468,000 | $ | 1,932,000 |
All values are in US Dollars.
PUREBioscience, Inc.
CondensedConsolidated Statements of Operations
(Unaudited)
| Six<br> Months Ended | Three<br> months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January<br> 31, | January<br> 31, | |||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net product sales | $ | 747,000 | $ | 984,000 | $ | 349,000 | $ | 394,000 | ||||
| Operating costs and expenses | ||||||||||||
| Cost of goods sold | 298,000 | 363,000 | 142,000 | 160,000 | ||||||||
| Selling, general<br> and administrative | 2,100,000 | 4,312,000 | 810,000 | 1,459,000 | ||||||||
| Research and development | 142,000 | 164,000 | 60,000 | 67,000 | ||||||||
| Total operating costs and expenses | 2,540,000 | 4,839,000 | 1,012,000 | 1,686,000 | ||||||||
| Loss from operations | (1,793,000 | ) | (3,855,000 | ) | (663,000 | ) | (1,292,000 | ) | ||||
| Other income (expense) | ||||||||||||
| Interest expense,<br> net | (3,000 | ) | (4,000 | ) | (1,000 | ) | (1,000 | ) | ||||
| Other income (expense),<br> net | 5,000 | (3,000 | ) | (2,000 | ) | (3,000 | ) | |||||
| Total other income (expense) | 2,000 | (7,000 | ) | (3,000 | ) | (4,000 | ) | |||||
| Net loss | $ | (1,791,000 | ) | $ | (3,862,000 | ) | $ | (666,000 | ) | $ | (1,296,000 | ) |
| Basic and diluted net loss per share | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.02 | ) |
| Shares used in computing basic and diluted<br> net loss per share | 78,999,237 | 71,312,898 | 79,994,402 | 71,623,494 |
PUREBioscience, Inc.
CondensedConsolidated Statements of Stockholders’ Equity
(Unaudited)
| Six<br> Months Ended January 31, 2020 | Six<br> Months Ended January 31, 2019 | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Common<br> Stock | Additional<br><br> Paid-In | Accumulated | Total<br><br> Stockholders’ | Common<br> Stock | Additional<br><br> Paid-In | Accumulated | Total<br><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 | 2,862,068 | 28,000 | 802,000 | — | 830,000 | 3,333,964 | 33,000 | 1,464,000 | — | 1,497,000 | ||||||||||||||||
| Share-based compensation<br> expense - stock options | — | — | 336,000 | — | 336,000 | — | — | 1,247,000 | — | 1,247,000 | ||||||||||||||||
| Share-based compensation<br> expense - restricted stock units | — | — | 211,000 | — | 211,000 | — | — | 954,000 | — | 954,000 | ||||||||||||||||
| Issuance of common stock<br> for vested restricted stock units | 400,000 | 4,000 | (4,000 | ) | — | — | 131,250 | 1,000 | (1,000 | ) | — | — | ||||||||||||||
| Net<br> loss | — | — | — | (1,791,000 | ) | (1,791,000 | ) | — | — | — | (3,862,000 | ) | (3,862,000 | ) | ||||||||||||
| Balances<br> at end 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 | ||||||
| Three<br> Months Ended January 31, 2020 | Three<br> Months Ended January 31, 2019 | |||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Common<br> Stock | Additional<br><br> Paid-In | Accumulated | Total<br> <br>Stockholders’ | Common<br> Stock | Additional<br><br> Paid-In | Accumulated | Total<br> <br>Stockholders’ | |||||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | Shares | Amount | Capital | Deficit | Equity | |||||||||||||||||
| Balances<br> at beginning of period (Unaudited) | 79,994,402 | $ | 800,000 | $ | 125,156,000 | $ | (124,603,000 | ) | $ | 1,353,000 | 71,582,122 | $ | 716,000 | $ | 120,730,000 | $ | (119,490,000 | ) | $ | 1,956,000 | ||||||
| Share-based compensation<br> expense - stock options | — | — | 68,000 | — | 68,000 | — | — | 244,000 | — | 244,000 | ||||||||||||||||
| Share-based compensation<br> expense - restricted stock units | — | — | 21,000 | — | 21,000 | — | — | 213,000 | — | 213,000 | ||||||||||||||||
| Issuance of common stock<br> for vested restricted stock units | — | 131,250 | 1,000 | (1,000 | ) | — | — | |||||||||||||||||||
| Net<br> loss | — | — | — | (666,000 | ) | (666,000 | ) | — | — | — | (1,296,000 | ) | (1,296,000 | ) | ||||||||||||
| Balances<br> at end 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 |
PUREBioscience, Inc.
CondensedConsolidated Statements of Cash Flows
(Unaudited)
| Six<br> Months Ended | |||||
|---|---|---|---|---|---|
| January<br> 31, | |||||
| 2020 | 2019 | ||||
| Operating<br> activities | |||||
| Net<br> loss | $ | (1,791,000 | ) | $ | (3,862,000 |
| Adjustments<br> to reconcile net loss to net cash used in operating activities: | |||||
| Share-based<br> compensation | 547,000 | 2,201,000 | |||
| Amortization<br> of stock issued for services | 4,000 | 25,000 | |||
| Depreciation<br> and amortization | 100,000 | 143,000 | |||
| Interest<br> expense on promissory note | — | 1,000 | |||
| Changes<br> in operating assets and liabilities: | |||||
| Accounts<br> receivable | 217,000 | 146,000 | |||
| Inventories | 36,000 | (8,000 | |||
| Prepaid<br> expenses | (1,000 | ) | (16,000 | ||
| Accounts<br> payable and accrued liabilities | (46,000 | ) | (128,000 | ||
| Deferred<br> rent | (4,000 | ) | (3,000 | ||
| Net<br> cash used in operating activities | (938,000 | ) | (1,501,000 | ||
| Investing<br> activities | |||||
| Purchases<br> of property, plant and equipment | (44,000 | ) | (8,000 | ||
| Net<br> cash used in investing activities | (44,000 | ) | (8,000 | ||
| Financing<br> activities | |||||
| Net<br> proceeds from the sale of common stock | 830,000 | 993,000 | |||
| Net<br> cash provided by financing activities | 830,000 | 993,000 | |||
| Net<br> decrease in cash, cash equivalents, and restricted cash | (152,000 | ) | (516,000 | ||
| Cash,<br> cash equivalents, and restricted cash at beginning of period | 473,000 | 926,000 | |||
| Cash,<br> cash equivalents, and restricted cash at end of period | $ | 321,000 | $ | 410,000 | |
| Reconciliation<br> of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets | |||||
| Cash<br> and cash equivalents | $ | 246,000 | $ | 335,000 | |
| Restricted<br> cash | $ | 75,000 | $ | 75,000 | |
| Total<br> cash, cash equivalents and restricted cash | $ | 321,000 | $ | 410,000 | |
| Supplemental<br> disclosure of non-cash financing activities | |||||
| Cash<br> paid for taxes | $ | 2,000 | |||
| Conversion<br> of promissory note and accrued interest from a related party to common stock | $ | — | $ | 504,000 |
All values are in US Dollars.