SOURCE: PURE Bioscience, Inc

PURE Bioscience, Inc

October 26, 2015 08:36 ET

PURE Bioscience Completes $6 Million Financing; Accelerates Direct Food Contact Go-To-Market Strategies to Commercialize SDC to Prevent Foodborne Illness

Launch Plans for 'PURE Control®,' a Uniquely Powerful, Less Toxic SDC-Based Processing Aid to Help U.S. Food Manufacturers Comply With Tightening Food Safety Requirements

SAN DIEGO, CA--(Marketwired - Oct 26, 2015) - PURE Bioscience, Inc., (OTCQB: PURE), creator of the patented silver dihydrogen citrate (SDC) antimicrobial, today announced that it has closed a $6 million private placement with strategic lead investor Franchise Brands LLC. This is Franchise Brands' second investment in PURE. Franchise Brands, LLC was created in 2005 with the support and guidance of the founders of SUBWAY® restaurants*.

Financing Advances SDC Commercialization
The Company intends to use the proceeds of the financing to:

  • Accelerate advancement of the commercialization of SDC as an FDA and USDA approved direct food contact processing aid for raw poultry and fresh produce;
  • Pursue regulatory approval for use of SDC as a direct food contact processing aid for raw meats;
  • Further accelerate the development of both the food processor and restaurant chain markets for PURE® Hard Surface as a food contact surface disinfectant; and
  • Support its operations for at least 12 months.

Go-To-Market Strategies and Programs Underway
The US market for poultry processing aids is estimated to be in excess of $350 million, and in excess of $300 million for produce processing aids. With a goal of being positioned to commercialize and execute immediately upon obtaining regulatory approvals, PURE is proactively engaged in both "push" and "pull" sales and marketing initiatives with processors, retailers and distributors to prime demand for PURE Control®, its SDC based processing aid.

  • A number of leading processors, in both poultry and produce, are already using EPA registered PURE® Hard Surface disinfectant on plant equipment, and therefore are familiar with the benefits of PURE's superior SDC technology.
  • For this reason, PURE anticipates that it may be able to achieve accelerated market adoption with a relatively short sales cycle. Additional market dynamics expected to drive adoption include:
    • PURE Control's superior efficacy and dramatically lower toxicity vs. processing aids currently in use, and
    • The urgent pressure of increasing regulatory requirements (discussed below).

Compelling Regulatory Market Drivers for PURE Control

1. In spite of industry's best efforts, food borne illness outbreaks continue to persist and grow, impacting an estimated 48 million people annually and resulting in 3,000 deaths. The associated corporate and individual costs and liabilities are staggering, with estimates exceeding $75 Billion annually in the US.
2. Increasing regulatory requirements:

a. Food Safety Modernization Act

  • Long-awaited rules for Preventive Controls for Human Food were recently released by the FDA, requiring food manufacturing facilities to maintain a written food safety plan and institute preventive controls for identified potential hazards in processes and facility sanitation.

b. USDA Salmonella Action Plan (focused on increased scrutiny of poultry inspection and processing practices)

  • Presently, 25%+ of raw chicken sold to consumers is contaminated with Salmonella,
  • New Action Plan 'maximum acceptable' standard reduced to 15%,
  • USDA estimates that 63% of plants today would be out of compliance for the reduced threshold.

3. The escalating need for brand and product protection: increasing retailer and manufacturer focus; risk management to mitigate scrutiny and liability (both corporate and individual).

In anticipation of regulatory approvals, the Company is actively engaged in preparing for the commercialization of SDC-based PURE Control into the direct food contact/processing aid markets for processing raw poultry and fresh produce.

Extensive test results document SDC as an exceptionally effective solution to prevent foodborne illnesses (resulting from contamination by pathogens including Salmonella, Listeria, and E. coli) when applied during the processing of raw poultry and fresh produce.

  • Materially significant reductions in Salmonella contamination in raw poultry;
  • Materially significant reductions in Salmonella, Listeria and E.coli in fresh produce;
  • In both cases, far superior to processing aids currently in use;
  • While achieving silver residue levels that are virtually non-detectable; and
  • Are below existing FDA guidelines.

Hank R. Lambert, CEO, said, "We were very gratified to receive the FDA's Acknowledgement Letter for our poultry FCN last month, enabling us to immediately initiate the USDA review process. We already have plans in place for the in-plant trials that are prescribed as part of the USDA process. With anticipated USDA approval for use of SDC on raw poultry, together with anticipated FDA approval for use on fresh produce, we are well along in preparing for commercialization in both markets in calendar Q1 2016.

"With the recent financing, we have every resource and every reason to believe we will be able to achieve meaningful market penetration with PURE Control quickly," Lambert concluded.

NOTE: The securities offered and issued in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or resold in the U.S. absent registration or an applicable exemption from registration requirements. This press release is not and shall not be deemed to be an offer to sell or the solicitation of an offer to buy any of the securities issued in the private placement.

About PURE 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 the inability of bacteria to form a resistance to it. PURE is headquartered in El Cajon, California (San Diego metropolitan area). Additional information on PURE is available at http://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. Forward-looking statements inherently involve risks and uncertainties that could cause our actual results to differ materially from the 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; acceptance of the Company's current and future products and services in the marketplace, including acceptance of the Company's PURE Hard Surface disinfectant by SUBWAY® franchisees; and the ability to convert successful evaluations into customer orders; 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 poultry, produce and raw meat processing; competitive factors; 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, 2015 and filed with the SEC on October 28, 2015. 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.

* SUBWAY® is a registered trademark of Doctor's Associates Inc.

Contact Information

  • Contacts:
    Hank Lambert
    CEO
    PURE Bioscience, Inc.
    619-596-8600 ext.103
    Email Contact

    Terri MacInnis
    VP of IR
    Bibicoff + MacInnis, Inc.
    818-379-8500
    Email Contact

    Tom Hemingway
    Redwood Investment Group
    714-978-4425
    Email Contact