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Form 8-K PURE BIOSCIENCE, INC. For: Dec 14

December 14, 2016 4:06 PM EST

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 14, 2016

 

PURE BIOSCIENCE, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-14468   33-0530289

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

1725 Gillespie Way

El Cajon, California

  92020
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (619) 596-8600

 

Not applicable

(Former name 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 communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

   
 

 

Item 2.02. Results of Operations and Financial Condition.

 

On December 14, 2016, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal quarter ended October 31, 2016 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.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

  99.1 Press Release, dated December 14, 2016.

 

* Exhibit 99.1 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, nor shall it be incorporated by reference into any registration 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: December 14, 2016 By: /s/ Henry R. Lambert
    Henry R. Lambert
    Chief Executive Officer

 

   
 

 

EXHIBIT INDEX

 

Exhibit Number   Description
     
99.1   Press Release, dated December 14, 2016.

 

   
 

 

 

 

PURE Bioscience Reports Q1 2017 Financial Results

 

Updates Growing Sales of SDC-Based PURE® Hard Surface Disinfectant, and

Status of PURE Control® as a Food Safety Solution for Fresh Produce and Raw Poultry

 

SAN DIEGO (Dec. 14, 2016) – 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, 2016.

 

Summary of Results of Operations

 

Revenues for the fiscal first quarter ended October 31, 2016 increased 186% to $531,000 compared with prior first quarter revenues of $186,000. Core food safety revenues for the first quarter increased 902% as compared with food safety revenues in the first quarter ended 2015, validating the accelerating momentum of PURE’s focused food safety strategy. Gross margin declined to 50% during the first quarter of fiscal 2017 as compared with 71% during the same period in fiscal 2016. The decrease in gross margin percentage was primarily attributable to the sale of lower margin formulations and packaging configurations of our products during the quarter ended October 31, 2016 as compared with the prior period. Total operating costs and expenses, excluding cost of goods sold and share-based compensation, for the first quarter ended of 2016 and 2015, were $1.6 million and $1.3 million, respectively. The first quarter net loss, excluding non-cash derivative expense was ($1.6) million compared with ($1.9) million for fiscal first quarter in 2015.

 

Fiscal Q1 Review

 

Two national restaurant chains (including Chipotle Mexican Grill) adopted PURE® Hard Surface disinfectant as a food safety solution;
   
Four leading produce processors conducted use trials for FDA approved PURE Control® to eliminate pathogens, including Salmonella, E. coli and Listeria, in processed produce sold to consumers.

 

Hank R. Lambert, Chief Executive Officer, said that, “We look forward to calendar 2017 as our breakout year. We are delighted to have started fiscal 2017 with meaningful and growing sales, validating our food safety solutions strategy to commercialize products which reduce the risks of food contamination and foodborne illness outbreaks.

 

“For the first time Q1 sales of PURE Hard Surface® disinfectant exceeded $500,000. These sales included Chipotle’s initial stocking order. As a result of Chipotle’s adoption of PURE Hard Surface, we are seeing growing restaurant sales opportunities to combat pathogens, especially Norovirus. We also have restaurant chains referring us to their suppliers, in order to enhance the food safety of their supply chains.

 

Lambert continued, “Ongoing validation and optimization testing of PURE® Control by four produce processors continues to show meaningful pathogen reductions. We are optimistic that we will receive our first PURE Control order from a produce processor in calendar Q1. We continue to make progress on obtaining regulatory approval for use of PURE Control in poultry on-line reprocessing, with FDA and USDA approvals expected during calendar Q2. It is our goal to achieve at least 10% penetration of the combined +$650 million US processing aid market opportunity for produce and poultry,” concluded Lambert.

 

   
 

 

2017 Q1 Financial Results Conference Call

 

The Company will host an investor conference call today, December 14, 2016 at 1:30pm PST (4:30pm EST).

 

The Participant Dial-In Number for the conference call is 1-631-891-4304. Participants should dial in to the call at least five minutes before 1:30pm PST (4:30pm EST) on December 14, 2016. The call can also be accessed “live” online at http://public.viavid.com/index.php?id=122082.

 

A replay of the recorded call will be available for 90 days on the Company’s website (http://www.purebio.com/investors/events-presentations/). You can also listen to a replay of the call by dialing 1-844-512-2921 (international participants dial 1-412-317-6671) starting December 14, 2016, at 7:30pm EST through December 21, 2016 at 11:59 pm EST. Please use PIN Number 10002105.

 

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 it mitigates bacterial resistance. 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 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; 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 into customer orders and customers continuing to place product orders as expected and to expand their use of the Company’s products; 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 meat processing and to expand its use in OLR poultry 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, 2016, its Form 10-Q for the first quarter ended October 31, 2016. 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.

 

Contacts:    

Hank Lambert, CEO

PURE Bioscience, Inc.

619-596-8600 ext.103

[email protected]

Terri MacInnis, VP of IR

Bibicoff + MacInnis, Inc.

818-379-8500

[email protected]

Tom Hemingway

Redwood Investment Group

714-978-4425

[email protected]

 

   
 

 

PURE Bioscience, Inc.

Condensed Consolidated Balance Sheets

 

   October 31, 2016   July 31, 2016 
   (Unaudited)     
Assets          
Current assets          
Cash and cash equivalents  $4,064,000   $5,194,000 
Accounts receivable   146,000    263,000 
Inventories, net   348,000    350,000 
Restricted cash   75,000    75,000 
Prepaid expenses   331,000    260,000 
Total current assets   4,964,000    6,142,000 
Property, plant and equipment, net   495,000    440,000 
Patents, net   943,000    980,000 
Total assets  $6,402,000   $7,562,000 
Liabilities and stockholders’ equity          
Current liabilities          
Accounts payable  $654,000   $479,000 
Restructuring liability   34,000    39,000 
Accrued liabilities   193,000    216,000 
Derivative liabilities   1,961,000    1,802,000 
Total current liabilities   2,842,000    2,536,000 
Deferred rent   3,000    3,000 
Total liabilities   2,845,000    2,539,000 
Commitments and contingencies (See Note 6)          
Stockholders’ equity          
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,64,823,917 shares issued and outstanding at October 31, 2016 and July 31, 2016      649,000      649,000     
Additional paid-in capital   107,870,000    107,593,000 
Accumulated deficit   (104,962,000)   (103,219,000)
Total stockholders’ equity   3,557,000    5,023,000 
Total liabilities and stockholders’ equity  $6,402,000   $7,562,000 

 

   
 

 

PURE Bioscience, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

 

   Three months ended 
   October 31, 
   2016   2015 
Net product sales  $531,000   $186,000 
Operating costs and expenses          
Cost of goods sold   265,000    54,000 
Selling, general and administrative   1,337,000    1,086,000 
Research and development   248,000    236,000 
Share-based compensation   278,000    672,000 
Total operating costs and expenses   2,128,000    2,048,000 
Loss from operations   (1,597,000)   (1,862,000)
Other income (expense)          
Fair value of derivative liabilities in excess of proceeds       (1,008,000)
Change in derivative liabilities   (159,000)   43,000 
Interest expense, net   (1,000)   (2,000)
Other income, net   14,000    9,000 
Total other expense   (146,000)   (958,000)
Net loss  $(1,743,000)  $(2,820,000)
Basic and diluted net loss per share  $(0.03)  $(0.07)
Shares used in computing basic and diluted net loss per share   64,823,917    43,019,329 

 

   
 

 

PURE Bioscience, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

   Three months ended 
   October 31, 
   2016   2015 
Operating activities          
Net loss  $(1,743,000)  $(2,820,000)
Adjustments to reconcile net loss to net cash used in operating activities:          
Share-based compensation   278,000    672,000 
Amortization of stock issued for services   36,000    55,000 
Fair value of derivative liabilities in excess of proceeds       1,008,000 
Depreciation and amortization   65,000    51,000 
Change in fair value of derivative liabilities   159,000    (43,000)
Changes in operating assets and liabilities:          
Accounts receivable   117,000    96,000 
Inventories   2,000    (12,000)
Prepaid expenses   (108,000)   (18,000)
Accounts payable and accrued liabilities   147,000    (250,000)
Deferred rent       (1,000)
Net cash used in operating activities   (1,047,000)   (1,262,000)
Investing activities          
Investment in patents   (7,000)   (4,000)
Purchase of property, plant and equipment   (76,000)    
Net cash used in investing activities   (83,000)   (4,000)
Financing activities          
Net proceeds from the sale of common stock       6,000,000 
Net cash provided by financing activities       6,000,000 
Net increase and decrease in cash and cash equivalents   (1,130,000)   4,734,000 
Cash and cash equivalents at beginning of period   5,194,000    1,321,000 
Cash and cash equivalents at end of period  $4,064,000   $6,055,000 
Supplemental disclosure of cash flow information          
Cash paid for taxes  $2,000   $2,000 

 

   
 



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