Press release

PURE Bioscience Reports Fiscal 2022 Financial Results

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PURE Bioscience, Inc. (OTCQB: PURE) (“PURE,” the “Company” or “we”), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal year ended July 31, 2022.

Summary of Results – Year-End Operations

  • Net product sales were $1,813,000 and $3,698,000 for the fiscal years ended July 31, 2022 and 2021, respectively. The decrease of $1,885,000 was attributable to decreased sales across our distribution and end-user network servicing the food processing, transportation, and janitorial industries. In addition, during the fiscal year ended July 31, 2022, we recognized $40,000 in royalties, compared to $229,000 in royalties for the fiscal year ended July 31, 2021.
  • Net loss for the fiscal year ended July 31, 2022 was ($3.5 million), compared to ($2.3 million) for the fiscal year ended July 31, 2021.
  • Net loss, excluding share-based compensation, for the fiscal year ended July 31, 2022 was ($2.9 million), compared to ($1.3 million) for the fiscal year ended July 31, 2021.
  • Net loss per share was ($0.04) for the fiscal year ended July 31, 2022, compared to ($0.03) per share for the fiscal year ended July 31, 2021.
  • Net cash used in operations for the fiscal year ended July 31, 2022 was ($2.5 million), compared to ($1.2 million) for the fiscal year ended July 31, 2021.

Business Update

John Kasperski, Vice President of Sales, immediately began building a seasoned sales team after joining PURE to execute PURE’s sales plan. PURE’s sales team is now made up of three street sales executives, a Midwest regional manager, and two assistant vice presidents of corporate accounts. Additionally, as part of the sales plan, a premier Customer Resource Management (CRM) software license was purchased and implemented to allow the daily tracking of sales activity and related transactions.

Under John’s direction, PURE has implemented a two-team sales approach to support our existing food safety clients and our new street sales team assigned to janitorial and sanitation accounts. Both teams have sales quotas and are expected to develop new business. Our street sales team has a combined total of over 25 years of experience in selling cleaners, sanitizers, and disinfectants. Their focus will be on food preparation, food service, long-term care facilities, schools, and day care centers. Having previously relied on distributors to make breakthroughs in these segments, PURE is seizing an opportunity to secure more of the janitorial and sanitation market share with its own in-house sales team.

Dr. Zhinong Yan, Executive Vice President of Science and Business Development, has been active in supporting PURE’s corporate account efforts with his contacts in the industry. He also led the Company’s efforts at the Food Science Association, one of the leading groups of the International Association of Food Protection. Additionally, Dr. Yan is slated to chair two sessions at the 2023 China International Food Safety and Quality Conference.

Tom Y. Lee, Chief Executive Officer, said, “The hiring of a technical sales team with proven experience has been accomplished in the Midwest region of the country. We will continue to expand regionally, as we expect increased revenue to emerge over the next two quarters as we ramp up sales efforts in food service, education, and long-term care segments. In addition, I’m pleased with the number of quality new distributors and end users that have committed to our unique SDC solution during the recent fiscal year,” concluded Lee.

About PURE Bioscience, Inc.

PURE is focused on developing and commercializing our proprietary antimicrobial products primarily in the food safety arena. We provide solutions to combat 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, better known as SDC. This is a broad-spectrum, non-toxic antimicrobial agent, 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 mitigation of bacterial resistance. PURE is headquartered in Rancho Cucamonga, California (San Bernardino 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. Statements in this press release, including quotes from management, concerning the Company’s expectations, plans, business outlook, future performance, future potential revenues, expected results of the Company’s marketing efforts, the execution of contracts under negotiation and any other statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements.” 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; economic and other disruptions resulting from COVID-19; 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 for PURE Control and PURE Hard Surface into customer orders and customers continuing to place product orders as expected and to expand their use of the Company’s products; the Company’s ability to maintain relationships with its partners and other counterparties; the Company’s ability to generate sufficient revenues and reduce its operating expenses in order to reach profitability; the Company’s ability to raise the funding required to support its continued operations and the implementation of its business plan; 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, including customer acceptance of the Company’s SDC-based products that are typically more expensive than existing treatment chemicals; 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, 2022. 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.

Consolidated Balance Sheets

 

 

July 31, 2022

 

 

July 31, 2021

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,391,000

 

 

$

2,390,000

 

Accounts receivable

 

 

201,000

 

 

 

368,000

 

Inventories, net

 

 

179,000

 

 

 

332,000

 

Restricted cash

 

 

75,000

 

 

 

75,000

 

Prepaid expenses

 

 

18,000

 

 

 

32,000

 

Total current assets

 

 

3,864,000

 

 

 

3,197,000

 

Property, plant and equipment, net

 

 

620,000

 

 

 

740,000

 

Patents, net

 

 

 

 

 

366,000

 

Total assets

 

$

4,484,000

 

 

$

4,303,000

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$

488,000

 

 

$

593,000

 

Accrued liabilities

 

 

87,000

 

 

 

138,000

 

Loan payable

 

 

 

 

 

239,000

 

Total current liabilities

 

 

575,000

 

 

 

970,000

 

Total liabilities

 

 

575,000

 

 

 

970,000

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

Preferred stock, $0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding

 

 

 

 

 

 

Common stock, $0.01 par value: 150,000,000 shares authorized, 111,356,473 shares issued and outstanding at July 31, 2022, and 87,223,141 shares issued and outstanding at July 31, 2021

 

 

1,114,000

 

 

 

873,000

 

Additional paid-in capital

 

 

132,079,000

 

 

 

128,253,000

 

Accumulated deficit

 

 

(129,284,000

)

 

 

(125,793,000

)

Total stockholders’ equity

 

 

3,909,000

 

 

 

3,333,000

 

PURE Bioscience, Inc.

Consolidated Statements of Operations

 

 

Year ended

 

 

 

July 31,

 

 

 

2022

 

 

2021

 

Net product sales

 

$

1,813,000

 

 

$

3,698,000

 

Royalty revenue

 

 

40,000

 

 

 

229,000

 

Total revenue

 

 

1,853,000

 

 

 

3,927,000

 

Cost of goods sold

 

 

853,000

 

 

 

1,852,000

 

Gross Profit

 

 

1,000,000

 

 

 

2,075,000

 

Operating costs and expenses

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

4,106,000

 

 

 

4,047,000

 

Research and development

 

 

319,000

 

 

 

339,000

 

Impairment of intangibles

 

 

299,000

 

 

 

 

Total operating costs and expenses

 

 

4,724,000

 

 

 

4,386,000

 

Loss from operations

 

 

(3,724,000

)

 

 

(2,311,000

)

Other income (expense)

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(6,000

)

 

 

(4,000

)

Other income (expense), net

 

 

 

 

 

(4,000

)

Gain on extinguishment of indebtedness, net

 

 

239,000

 

 

 

 

Total other income (expense)

 

 

233,000

 

 

 

(8,000

)

Net loss

 

$

(3,491,000

)

 

$

(2,319,000

)

Basic and diluted net loss per share

 

$

(0.04

)

 

$

(0.03

)

Shares used in computing basic and diluted net loss per share

 

 

88,835,424

 

 

 

87,174,312

 

PURE Bioscience, Inc.

Consolidated Statements of Stockholders’ Equity

 

 

Common Stock

 

 

Additional

Paid-In

 

 

Accumulated

 

 

Total

Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Equity

 

Balance July 31, 2020

 

 

87,072,951

 

 

$

871,000

 

 

$

127,414,000

 

 

$

(123,474,000

)

 

$

4,811,000

 

Share-based compensation expense – stock options

 

 

 

 

 

 

 

 

758,000

 

 

 

 

 

 

758,000

 

Share-based compensation expense – restricted stock units

 

 

 

 

 

 

 

 

83,000

 

 

 

 

 

 

83,000

 

Issuance of common stock upon the exercise of stock options

 

 

150,190

 

 

 

2,000

 

 

 

(2,000

)

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(2,319,000

)

 

 

(2,319,000

)

Balance July 31, 2021

 

 

87,223,141

 

 

873,000

 

 

 

128,253,000

 

 

 

(125,793,000

)

 

 

3,333,000

 

Issuance of common stock in private placements to related parties, net

 

 

23,333,332

 

 

 

233,000

 

 

 

3,267,000

 

 

 

 

 

 

3,500,000

 

Share-based compensation expense – stock options

 

 

 

 

 

 

 

 

465,000

 

 

 

 

 

 

465,000

 

Share-based compensation expense – restricted stock units

 

 

 

 

 

 

 

 

102,000

 

 

 

 

 

 

102,000

 

Issuance of common stock for vested restricted stock units

 

 

800,000

 

 

 

8,000

 

 

 

(8,000

)

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(3,491,000

)

 

 

(3,491,000

)

Balance July 31, 2022

 

 

111,356,473

 

 

$

1,114,000

 

 

$

132,079,000

 

 

$

(129,284,000

)

 

$

3,909,000

 

PURE Bioscience, Inc.

Consolidated Statements of Cash Flows

 

 

Year Ended

 

 

 

July 31,

 

 

 

2022

 

 

2021

 

Operating activities

 

 

 

 

 

 

 

 

Net loss

 

$

(3,491,000

)

 

$

(2,319,000

)

Adjustments to reconcile loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Share-based compensation

 

 

567,000

 

 

 

841,000

 

Fixed assets write-off

 

 

55,000

 

 

 

 

Depreciation and amortization

 

 

213,000

 

 

 

172,000

 

Reserve for inventory obsolescence

 

 

75,000

 

 

 

150,000

 

Impairment of intangibles

 

 

299,000

 

 

 

 

Gain on extinguishment of indebtedness

 

 

(239,000

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

167,000

 

 

 

721,000

 

Inventories

 

 

78,000

 

 

 

65,000

 

Prepaid expenses

 

 

14,000

 

 

 

(16,000

)

Accounts payable and accrued liabilities

 

 

(156,000

)

 

 

(781,000

)

Net cash used in operating activities

 

 

(2,418,000

)

 

 

(1,167,000

)

Investing activities

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(81,000

)

 

 

(521,000

)

Net cash used in investing activities

 

 

(81,000

)

 

 

(521,000

)

Financing activities

 

 

 

 

 

 

 

 

Net proceeds from the sale of common stock

 

 

3,500,000

 

 

 

 

Net proceeds from paycheck protection program loan

 

 

 

 

 

239,000

 

Net cash provided by financing activities

 

 

3,500,000

 

 

 

239,000

 

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

1,001,000

 

 

 

(1,449,000

)

Cash, cash equivalents, and restricted cash at beginning of year

 

 

2,465,000

 

 

 

3,914,000

 

Cash, cash equivalents, and restricted cash at end of year

 

$

3,466,000

 

 

$

2,465,000

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,391,000

 

 

$

2,390,000

 

Restricted cash

 

 

75,000

 

 

 

75,000

 

Total cash, cash equivalents and restricted cash

 

$

3,466,000

 

 

$

2,465,000

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

Cash paid for taxes

 

$

2,000

 

 

$

4,000