SOURCE: PURE Bioscience, Inc

PURE Bioscience, Inc

June 10, 2014 16:04 ET

PURE Bioscience Reports Fiscal Third Quarter 2014 Financial Results

Early SDC Food Safety Revenue Led By QSR Commercial Market Test Rollout

SAN DIEGO, CA--(Marketwired - Jun 10, 2014) - PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the second fiscal quarter ended April 30, 2014.

Fiscal Q3 Milestones
The Company reported that during the third fiscal quarter 2014, the new management team generated significant momentum in advancing its business strategy to commercialize its SDC-based technology as a food safety solution:

  • Extended commercial market test launch of PURE® Hard Surface Disinfectant to over 650 stores with a national brand QSR (quick service restaurant);
    • Positive customer field feedback on both SDC product performance and ease of use
    • Phased U.S. national rollout under development for expected system-wide launch
  • Rollout plans in development for wider plant adoption from five national food processors who placed commercial pilot orders;
    • Expanding SDC usage with enhanced hygiene and operating protocols
  • Reported outstanding initial test results for the application of SDC as a direct food contact processing aid for raw poultry;
    • Test results achieved undetectable levels of salmonella in raw poultry
      • Enhanced safety profile provides benefit to both plant environment and staff
    • Estimated potential addressable U.S. market opportunity for this new application exceeds $1 billion for poultry, produce and meats
    • Filing for required regulatory authorization from the FDA and USDA is expected later this month for poultry and Q3 2014 for produce and meats
    • Expected approval for U.S. commercial use by end of calendar 2014 for poultry

Summary of Results of Operations
Revenues for the third fiscal quarter of 2014 were $261,000, compared with revenues of $258,000 for the third fiscal quarter of 2013. Total operating costs and expenses, excluding share-based compensation, other share-based expenses, and restructuring costs, for the third fiscal quarter of 2014 and 2013, were $1.7 million, and $1.7 million, respectively. The net loss for the third fiscal quarter of 2014 was $(2.1) million, or $(0.07) per share, compared with a net loss of $(1.5) million, or $(0.14) per share, in the third fiscal quarter of 2013.

Revenues for the nine months ended April 30, 2014 were $417,000, compared with revenues of $631,000 for the nine months ended April 30, 2013. Total operating costs and expenses, excluding share-based compensation, other share-based expense, and restructuring costs, were $4.4 million, and $5.2 million, respectively, a reduction of 15%. The net loss for the nine months ended April 30, 2014 was $(8.4) million, or $(0.34) per share, compared with a net loss of $(5.5) million, or $(0.53) per share, in the nine months ended April 30, 2013. The adjusted net loss for the nine months ended April 30, 2014, as adjusted for significant items, was $(3.8) million compared with prior year adjusted net loss of $(4.9) million, a decrease of approximately a $1.1 million, or 22%.

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

  • Accelerate market penetration and revenue adoption of restaurant chains and food processors with SDC-based products
  • Leverage out-sourcing of its manufacturing operations
  • Out-license the SDC-technology platform to non-food markets
  • Secure additional capital to execute its business plan

Calendar 2014 Goals

  • Increase financial strength to accelerate strategy execution.
  • Secure customer adoption in food safety with 2+ national QSR chains and 5+ national food processors;
    a. Fiscal 4Q 2014 (July 31 2014): annual revenue run rate $3-$5M
    b. Fiscal 4Q 2015 (July 31 2015): positive EBITDA
  • Leverage outsourcing of operations and supply chain;
    a. Provide incremental cost savings and increase production scale
  • Secure FDA and USDA authorization for use of SDC as a direct food contact/processing aid;
    a. Initiate commercialization as a processing aid for poultry by end of calendar 2014
  • License PURE distribution and SDC applications to non-core markets.

Food Safety Solutions Provider
PURE's 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.

"This quarter operating results are in line with our expectations of completing the manufacturing technology transfer and initiating out-sourced production and distribution to our QSR market test and other customers," stated Peter C. Wulff, Chief Financial Officer and Chief Operating Officer. "We believe we are well positioned with our new operating structure to meet expected market demand."

Hank R. Lambert, Chief Executive Officer, said, "The recent progress we have made in extending the usage of PURE Hard Surface in QSRs and food processors, combined with compelling results generated by our testing of SDC as a processing aid for poultry, provide strong validation for our unique antimicrobial technology and give us great optimism for building revenue momentum in the coming months. We are increasingly confident that SDC will prove to be one of the most important advances in food safety in recent history."

Q3 Results Conference Call
The Company will host an investor conference call on Tuesday, June 10th, 2014 at 1:30pm PDT (4:30pm EDT).

The Participant Dial-In Number for the conference call is 1-412-902-6720. Participants should dial in to the call at least five minutes before 1:30pm PDT (4:30pm EDT) on June 10th, 2014. The call can also be accessed "live" or via replay online on the Company's website (http://www.purebio.com/about/investor_relations). The replay of the webcast will be available by dialing 1-877-870-5176 (international participants dial 1-858-384-5517) starting June 10th, 2014, at 7:30pm EDT through June 24th, 2014 at 11:59 pm EDT. Please use PIN Number 90610.

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       
(Unaudited)       
                         
    Nine months ended     Three months ended  
    April 30,     April 30,  
    2014     2013     2014     2013  
                                 
Net product sales   $ 417,000     $ 631,000     $ 261,000     $ 258,000  
                                 
Operating costs and expenses                                
  Cost of goods sold     145,000       155,000       89,000       67,000  
  Selling, general and administrative     3,506,000       4,093,000       1,338,000       1,332,000  
  Research and development     750,000       979,000       248,000       283,000  
  Share-based compensation     2,191,000       583,000       770,000       153,000  
  Other share-based expenses     308,000       -       -       -  
  Restructuring costs     2,754,000       -       -       -  
Total operating costs and expenses     9,654,000       5,810,000       2,445,000       1,835,000  
                                 
Loss from operations     (9,237,000 )     (5,179,000 )     (2,184,000 )     (1,577,000 )
                                 
Other income (expense)                                
  Change in derivative liability     (56,000 )     270,000       3,000       30,000  
  Interest expense, net     (7,000 )     (591,000 )     (2,000 )     (2,000 )
  Gain on extinguishment of debt     727,000       -       -       -  
  Other income (expense), net     198,000       (12,000 )     134,000       15,000  
Total other income (expense)     862,000       (333,000 )     135,000       43,000  
                                 
Net loss   $ (8,375,000 )   $ (5,512,000 )   $ (2,049,000 )   $ (1,534,000 )
                                 
Basic and diluted net loss per share   $ (0.34 )   $ (0.53 )   $ (0.07 )   $ (0.14 )
                                 
Shares used in computing basic and diluted net loss per share     24,479,959       10,310,721       27,864,746       11,255,833  
                                 
                                 
                                 
Pure Bioscience, Inc.  
Condensed Consolidated Balance Sheets  
             
    April 30,     July 31,  
    2014     2013  
    (Unaudited)        
Assets                
Current assets                
  Cash and cash equivalents   $ 416,000     $ 32,000  
  Accounts receivable, net     34,000       18,000  
  Inventories, net     387,000       365,000  
  Prepaid expenses     194,000       71,000  
  Total current assets     1,031,000       486,000  
                 
Property, plant and equipment, net     42,000       146,000  
Patents, net     1,378,000       1,430,000  
                 
Total assets   $ 2,451,000     $ 2,062,000  
                 
Liabilities and stockholders' equity (deficit)                
Current liabilities                
  Accounts payable   $ 529,000     $ 1,134,000  
  Restructuring liability     512,000       -  
  Note payable, current     -       368,000  
  Accrued liabilities     105,000       600,000  
  Derivative liability     10,000       51,000  
  Total current liabilities     1,156,000       2,153,000  
                 
Note payable, less current portion     -       887,000  
Deferred rent     -       13,000  
Total liabilities     1,156,000       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, 28,555,500 shares issued and outstanding at April 30, 2014, and 12,569,503 shares issued and outstanding at July 31, 2013     286,000       126,000  
  Additional paid-in capital     79,555,000       69,054,000  
  Accumulated deficit     (78,546,000 )     (70,171,000 )
Total stockholders' equity (deficit)     1,295,000       (991,000 )
                 
Total liabilities and stockholders' equity (deficit)   $ 2,451,000     $ 2,062,000  
                 
                 
                 
Pure Bioscience, Inc.  
Reconciliation of Non-GAAP Financial Measures  
(Unaudited)  
                         
    Nine months ended     Three months ended  
    April 30,     April 30,  
    2014     2013     2014     2013  
                         
Net loss, as reported   $ (8,375,000 )   $ (5,512,000 )   $ (2,049,000 )   $ (1,534,000 )
                                 
Add back significant items:                                
  Share-based compensation     2,191,000       583,000       770,000       153,000  
  Other share-based expenses     308,000       -       -       -  
  Restructuring costs     2,754,000       -       -       -  
  Gain on extinguishment of debt     (727,000 )             -       -  
Net loss, as adjusted for significant items   $ (3,849,000 )   $ (4,929,000 )   $ (1,279,000 )   $ (1,381,000 )
                                 
                                 
                                 

Contact Information

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

    Terri MacInnis
    VP 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