SOURCE: PURE Bioscience, Inc.

PURE Bioscience, Inc.

December 12, 2013 16:05 ET

PURE Bioscience Reports Fiscal First Quarter 2014 Financial Results

Early Progress on Food Safety Solutions Strategy, Improved Financial Condition

SAN DIEGO, CA--(Marketwired - Dec 12, 2013) - PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal first quarter ended October 31, 2013 (Fiscal Q1 2014).

The Company reported its Fiscal Q1 2014 revenues were $115,000 compared with $110,000 for the fiscal quarter ended October 31, 2012. The Fiscal Q1 2014 net loss was $3.8 million compared with $2.2 million for Fiscal Q1 2013, an increase of $1.6 million. The Company reported for Fiscal Q1 2014 a restructuring expense of $2.7 million related to the corporate governance changes in August 2013. On a pro forma basis, excluding the restructuring expense, the adjusted Fiscal Q1 2014 net loss was $1.1 million, a reduction of $1.1 million, or 50%, compared with the Fiscal Q1 2013 net loss.

The Company also reported its cash position as of October 31, 2013 of $1.1 million. On a pro forma basis, the adjusted cash position as of October 31, 2013 would be $2.5 million, reflecting the additional $1.4 million in proceeds raised through a private equity placement reported on December 11, 2013.

Early Progress in Refocused Business Strategy - Food Safety Solutions Provider
As previously reported, the Company underwent a comprehensive management and corporate governance change in August 2013. At that time, the Company stated its new business strategy focused on:

  • Commercialization of its SDC-based products as a food safety solution, with a focus on foodservice operators and food processors;
  • Optimization of operations and termination of non-core activities;
  • Implementation of a lean organization with the relevant experience to drive commercialization and accelerate growth;
  • Restoring a strong financial position, and providing the resources to fund execution of our strategy.

For the first 100 days, the Company reported significant progress in implementing the new business strategy:

  • Developed a new customer pipeline of 25 national food companies in various stages of evaluating and testing SDC-based products in their operations.
    • Testing results shared with the Company to-date are compelling with 90% to 200% superiority in both level and speed of pathogen kill compared with incumbent chemical sanitization products;
    • Secured initial commercial orders from food processors, with customer rollout plans in development.
  • Initiated a new development project for the application of SDC as a direct food contact processing aid for produce, meats and poultry.
    • Estimated potential addressable U.S. market opportunity for this new market exceeds $1 Billion.
    • Regulatory approval required from the USDA and FDA.
  • Executed a strategic collaboration agreement with Intercon Chemical Company to out-source manufacturing and supply chain of SDC-based products and establish distribution:
    • Allows for future reduction of non-core operating activities and preserves capital.
    • Provides manufacturing capacity for future SDC-based product market demand.
    • Provides potential future royalty income for SDC-based products through Intercon's institutional cleaning and sanitation distribution channel.
  • Executed a distribution agreement with Brenntag Specialities, Inc., an industry and market leading company, to continue to distribute SDC-based antimicrobial SILVÉRION® 2400 as an active ingredient or preservative for use in personal care products.

Improving Financial Position
The Company reported that it has raised a total $4.7 million through private equity placements since August 13, 2013. As of October 31, 2013, the Company reported a cash position of $1.1 million as the result of private equity placements less one-time payments related to separation pay to the former management team, other re-organization expenses and reduction of liabilities. Excluding accrued severance liability recorded due to the corporate governance change, total adjusted liabilities reported as of October 31, 2013 of $2.3 million decreased approximately $800,000, or 25%, compared with prior period reported liabilities of $3.1 million.

As the Company continues to execute its new business strategy, it intends to:

  • Reduce its non-core operating activities upon completion of out-sourcing its manufacturing operations, and license the SDC-technology platform to non-food markets.
  • Secure additional capital.

The Company does not have sufficient capital to fund its operations over the next twelve months unless it receives additional capital through revenues or through private or public offerings of securities. The Company announced that since October 31, 2013, the Company has raised an additional $1.4 million through private equity placements.

Food Safety Solutions Provider
PURE announced that its near-term business focus is to drive customer adoption of its products in the food industry. Its proprietary SDC-based products uniquely address food safety issues across the supply chain and help to prevent or mitigate food contamination and the potential for food-borne illness. The Company's target customers are foodservice operators, food processors and food manufacturers.

"The results of the first 90 plus days of executing our new strategic plan are gratifying," stated Peter C. Wulff, Chief Financial Officer and Chief Operating Officer. "The financial position of PURE is significantly improved since its fiscal year-end report. This is all due to the hard work and dedication of our employees and support from our shareholders to allow us to focus and execute. However, we are only in the initial stages of executing our business plan and work remains to be done to fully restore the Company's health and credibility. We look forward to accelerating our momentum to develop, build and secure revenues to drive a sustainable business."

Hank Lambert, Chief Executive Officer, said, "Our team's dedication and focus on driving customer education, product testing and evaluation has resulted in access to a growing customer pipeline with significant future revenue potential. Our goal is to build PURE as the innovator and leader, focused on enhancing food safety solutions by providing superior pathogen and hygiene control to protect the health and safety of consumers and their environment."

About PURE Bioscience, Inc.

PURE Bioscience, Inc. is focused on developing and commercializing its proprietary antimicrobial products that provide solutions to the health and environmental challenges of pathogen and hygienic control within the food industry. The Company's technology platform is based on patented stabilized ionic silver, and its initial products contain silver dihydrogen citrate, or SDC. SDC is a broad-spectrum, non-toxic antimicrobial agent, which offers 24-hour residual protection. As a platform technology, SDC is distinguished from existing products in the marketplace by 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 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 cash position and liquidity requirements, 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, the ability of the Company to develop effective new products and receive regulatory approvals of such products, 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, including our annual report on Form 10-K filed October 24, 2013. 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.

   
   
PURE Bioscience, Inc.  
Condensed Consolidated Statements of Operations  
     
                 
    Three months ended  
    October 31,  
    2013     2012  
                 
Net product sales   $ 115,000     $ 110,000  
                 
Operating costs and expenses                
  Cost of goods sold     36,000       31,000  
  Selling, general and administrative     993,000       1,476,000  
  Research and development     234,000       395,000  
  Restructuring costs     2,684,000       -  
Total operating costs and expenses     3,947,000       1,902,000  
                 
Loss from operations     (3,832,000 )     (1,792,000 )
                 
Other income (expense)                
  Change in derivative liability     (58,000 )     228,000  
  Interest expense, net     (3,000 )     (588,000 )
  Other (expense) income, net     49,000       (2,000 )
Total other income (expense)     (12,000 )     (362,000 )
                 
Net loss   $ (3,844,000 )   $ (2,154,000 )
                 
Basic and diluted net loss per share   $ (0.19 )   $ (0.25 )
                 
Shares used in computing basic                
and diluted net loss per share     20,701,547       8,720,980  
                 
                 
   
   
PURE Bioscience, Inc.  
Condensed Consolidated Balance Sheets  
                 
    October 31,     July 31,  
    2013     2013  
    (Unaudited)          
Assets                
Current assets                
  Cash and cash equivalents   $ 1,068,000     $ 32,000  
  Accounts receivable, net     31,000       18,000  
  Inventories, net     430,000       365,000  
  Prepaid expenses     231,000       71,000  
  Total current assets     1,760,000       486,000  
                 
Property, plant and equipment, net     127,000       146,000  
Patents, net     1,399,000       1,430,000  
                 
Total assets   $ 3,286,000     $ 2,062,000  
                 
Liabilities and stockholders' equity (deficit)                
Current liabilities                
  Accounts payable   $ 771,000     $ 1,134,000  
  Restructuring liability     778,000       -  
  Note payable, current     503,000       368,000  
  Accrued liabilities     227,000       600,000  
  Derivative liability     53,000       51,000  
  Total current liabilities     2,332,000       2,153,000  
                 
Note payable, less current portion     731,000       887,000  
Deferred rent     12,000       13,000  
Total liabilities     3,075,000       3,053,000  
                 
Commitments and contingencies                
                 
Stockholders' equity (deficit)                
  Preferred stock, $0.01 par value:                
    5,000,000 shares authorized, no shares issued     -       -  
  Common stock, $0.01 par value:                
    100,000,000 shares authorized                
    23,866,615 shares issued and outstanding at October 31, 2013, and                
    12,569,503 shares issued and outstanding at July 31, 2013.     239,000       126,000  
  Additional paid-in capital     73,987,000       69,054,000  
  Accumulated deficit     (74,015,000 )     (70,171,000 )
Total stockholders' equity (deficit)     211,000       (991,000 )
                 
Total liabilities and stockholders' equity (deficit)   $ 3,286,000     $ 2,062,000  
                 
                 

Contact Information

  • Contacts:
    Tom Hemingway
    Redwood Investment Group
    714-978-4425
    Email Contact

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

    Company Contact:
    Peter C. Wulff, CFO & COO
    PURE Bioscience, Inc.
    619-596-8600 ext.111
    Email Contact