Form 8-K PURE BIOSCIENCE, INC. For: Oct 27

 

 

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): October 27, 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 October 27, 2016, PURE Bioscience, Inc. (the “Company”) issued a press release announcing financial results for the fiscal year ended July 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 October 27, 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: October 27, 2016	By:	/s/ Henry R. Lambert
		Henry R. Lambert
		Chief Executive Officer

 

 

EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release, dated October 27, 2016.

 

 

 

 

 

PURE Bioscience Reports Fiscal 2016 Year-End Financial Results

 

– Updates Ongoing Plant Trials for Use of SDC-Based PURE Control^® as a Food Safety Solution for Fresh Produce and for Raw Poultry –

 

SAN DIEGO (Oct. 27, 2016) – PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal year ended July 31, 2016.

 

Summary of Results of Operations

 

Revenues for the fiscal year ended 2016 increased 77% to $1,289,000 compared with prior year-end revenues of $729,000. Core food safety revenues for the year ended July 31, 2016 increased 195% as compared with food safety revenues in the fiscal year ended 2015, affirming PURE’s focused strategy has accelerating momentum. Gross margin improved to 66% in F’16 as compared with 61% in F’15. Total operating costs and expenses, excluding cost of goods sold and share-based compensation, for the fiscal year ended of 2016 and 2015, were $6.0 million and $5.7 million, respectively. The fiscal year end net loss, excluding non-cash derivative expense was ($7.0) million compared with ($7.6) million for fiscal year end 2015.

 

Update – Fiscal Q4 to Present

 

	●	Increasing revenues from PURE® Hard Surface disinfectant used in environmental and surface applications by both restaurant chains (to combat Norovirus) and food processors/manufacturers (to combat Listeria) are now at +$2 million annualized run rate;
	●	In June, PURE raised $1.27 million from warrant exercises; it expanded its sales and marketing reach for PURE Hard Surface disinfectant and partnered with a leading west coast distributor;
	●	In July, PURE received a USDA No Objection Letter for use of PURE Control® (a direct food contact processing aid) in poultry processing for pre-OLR and post chill applications;
	●	In September, two national restaurant chains (including Chipotle Mexican Grill) adopted PURE Hard Surface as a food safety solution;
	●	In September, four leading produce processors were conducting use trials for PURE Control to eliminate pathogens in processed produce sold to consumers.

 

Hank R. Lambert, Chief Executive Officer, said that, “In fiscal 2016, PURE achieved three key regulatory milestones paving the way for an important new revenue source from direct food contact uses. PURE Control received FDA approvals for use in both produce and poultry processing and USDA approval for two uses in poultry processing. Also this year, we reached a +$2million annualized sales run rate for PURE Hard Surface disinfectant and we look forward to building upon that foundation. SDC continues to prove to be a game changing, non-toxic food safety solution to reduce the risks of food contamination and foodborne illness outbreaks,” said Lambert.

 

PURE anticipates beginning sales of PURE Control in the processing aids market - first from fresh produce processors, followed by raw poultry processor sales. Both these industries have persistent, unsolved pathogen issues, and PURE believes it has the solution with PURE Control. These two markets represent a combined US market opportunity of +$650 million.

 

-Continued-

 

 

Lambert continued, “A leading produce processor is now in the later stages of its pilot plant testing and optimization for use of PURE Control as a fresh produce processing aid before it moves to testing in its operating plant. Three additional produce processors are in various stages of their own validation and optimization testing, and we are in discussions with several other produce processors. We anticipate receiving our first order for PURE Control from a produce processor around calendar year end.”

 

As part of the USDA poultry review process, PURE is conducting in-plant processing validation and optimization trials with the authorization of the USDA for OLR (online reprocessing). Upon receipt of that USDA approval, PURE anticipates its first PURE Control order for poultry processing in calendar Q1 2017.

 

“Once we receive USDA approval for poultry processing, we will work to complete our own testing for PURE Control as a beef and pork processing aid. We will then pursue those necessary FDA and USDA approvals. This will open a new $400 million US market opportunity for us. It is our goal to achieve at least 10% penetration of the combined +$1 billion processing aid markets,” concluded Lambert.

 

2016 Fiscal Year End Financial Results Conference Call

 

The Company will host an investor conference call on October 27, 2016 at 1:30pm PDT (4:30pm EDT).

 

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 PDT (4:30pm EDT) on October 27, 2016. The call can also be accessed “live” online at http://public.viavid.com/index.php?id=121552

 

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 October 27, 2016, at 7:30pm EDT through November 3, 2016 at 11:59 pm EDT. Please use PIN Number 10001861.

 

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, 2015 and its Form 10-Q for the second quarter ended January 31, 2016, and its Form 10-Q for the third quarter ended April 30, 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		Terri MacInnis, VP of IR		Tom Hemingway
PURE Bioscience, Inc.		Bibicoff + MacInnis, Inc.		Redwood Investment Group
619-596-8600 ext.103		818-379-8500		714-978-4425
[email protected]		[email protected]		[email protected]

 

-Continued-

 

 

PURE Bioscience, Inc.

 

Consolidated Statements of Operations

 

		Year Ended
		July 31,
		2016				2015
Net product sales		$	1,289,000			$	729,000
Operating costs and expenses
Cost of goods sold			441,000				285,000
Selling, general and administrative			5,076,000				4,912,000
Research and development			927,000				790,000
Share-based compensation			1,902,000				2,382,000
Total operating costs and expenses			8,346,000				8,369,000
Loss from operations			(7,057,000	)			(7,640,000	)
Other income (expense)
Fair value of derivative liabilities in excess of proceeds			(1,867,000	)			-
Change in derivative liability			(5,481,000	)			5,000
Interest expense, net			(10,000	)			(8,000	)
Other income (expense), net			44,000				16,000
Total other income (expense)			(7,314,000	)			13,000
Net loss		$	(14,371,000	)		$	(7,627,000	)
Basic and diluted net loss per share		$	(0.25	)		$	(0.19	)
Shares used in computing basic and diluted net loss per share			56,830,533				39,748,935

 

-Continued-

 

 

PURE Bioscience, Inc.

 

Consolidated Balance Sheets

 

		July 31, 2016				July 31, 2015
Assets
Current assets
Cash and cash equivalents		$	5,194,000			$	1,321,000
Accounts receivable, net			263,000				189,000
Inventories, net			350,000				207,000
Restricted cash			75,000				75,000
Prepaid expenses			260,000				187,000
Total current assets			6,142,000				1,979,000
Property, plant and equipment, net			440,000				90,000
Patents, net			980,000				1,192,000
Total assets		$	7,562,000			$	3,261,000
Liabilities and stockholders’ equity (deficit)
Current liabilities
Accounts payable		$	479,000			$	560,000
Restructuring liability			39,000				59,000
Accrued liabilities			216,000				246,000
Derivative liability			1,802,000				4,000
Total current liabilities			2,536,000				869,000
Deferred rent			3,000				9,000
Total liabilities			2,539,000				878,000
Commitments and contingencies
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 July 31, 2016, and 41,859,297 shares issued and outstanding at July 31, 2015			649,000				420,000
Additional paid-in capital			107,593,000				90,811,000
Accumulated deficit			(103,219,000	)			(88,848,000	)
Total stockholders’ equity (deficit)			5,023,000				2,383,000
Total liabilities and stockholders’ equity (deficit)		$	7,562,000			$	3,261,000

 

-Continued-

 

 

PURE Bioscience, Inc.

 

Consolidated Statements of Cash Flows

 

		July 31,
		2016				2015
Operating activities
Net loss		$	(14,371,000	)		$	(7,627,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation			1,902,000				2,382,000
Amortization of stock issued for services			225,000				115,000
Fair value of derivative liabilities in excess of proceeds			1,867,000				-
Impairment of Patents			48,000
Depreciation and amortization			219,000				206,000
Change in fair value of derivative liabilities			5,481,000				(5,000	)
Depreciation			40,000
Changes in operating assets and liabilities:
Accounts receivable			(74,000	)			(142,000	)
Inventories			(143,000	)			42,000
Restricted cash			-				(75,000	)
Prepaid expenses			(8,000	)			-
Accounts payable and accrued liabilities			(131,000	)			(955,000	)
Deferred rent			(6,000	)			(4,000	)
Net cash used in operating activities			(4,991,000	)			(6,063,000	)
Investing activities
Investment in patents			(15,000	)			(26,000	)
Purchases of property, plant and equipment			(390,000	)			(81,000	)
Net cash used in investing activities			(405,000	)			(107,000	)
Financing activities
Net proceeds from the sale of common stock			8,000,000				7,401,000
Net proceeds from the exercise of warrants			1,269,000				4,000
Net cash provided by financing activities			9,269,000				7,405,000
Net increase in cash and cash equivalents			3,873,000				1,235,000
Cash and cash equivalents at beginning of period			1,321,000				86,000
Cash and cash equivalents at end of period		$	5,194,000			$	1,321,000
Supplemental disclosure of cash flow information
Cash paid for taxes		$	2,000			$	1,600
Warrant liability removed due to settlements		$	13,550,000			$	-
Fair value of warrant liability at issuance		$	9,867,000			$	-
Common stock issued for prepaid services		$	290,000			$	206,000

 

 

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