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