U.S. Markets closed

PURE Bioscience Reports Fiscal 2022 Third Quarter and Nine-Month Financial Results

  • Oops!
    Something went wrong.
    Please try again later.
·12 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Update on Business Segments and PURE’s SDC-Based Antimicrobial Solutions

RANCHO CUCAMONGA, Calif., June 14, 2022--(BUSINESS WIRE)--PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal third quarter and nine-month period ended April 30, 2022.

Q3: Summary of Results of Operations

  • Net product sales for the fiscal third quarter ended April 30, 2022 decreased 11% to $497,000, compared to $556,000 for the fiscal third quarter ended April 30, 2021. The decrease of $59,000 was primarily attributable to decreased sales to our distributors. In addition, during the fiscal third quarter ended April 30, 2022, we recognized $27,000 in royalties, compared to $5,000 for the fiscal third quarter ended April 30, 2021.

  • Net loss for the fiscal third quarter ended April 30, 2022 was $760,000, compared to $811,000 for the fiscal third quarter ended April 30, 2021. Net loss, excluding share-based compensation, for the fiscal third quarter ended April 30, 2022 was $637,000, compared to $598,000 for the fiscal third quarter ended April 30, 2021.

  • Net loss per share was ($0.01) for the fiscal third quarters ended April 30, 2022 and 2021, respectively.

Nine Months: Summary of Results of Operations

  • Net product sales for the nine months ended April 30, 2022 decreased 50% to $1,409,000, compared to $2,841,000 for the nine months ended April 30, 2021. The decrease of $1,432,000 was attributable to decreased sales across our distribution network servicing the food processing, transportation and janitorial industry. In addition, during the nine months ended April 30, 2022, we recognized $32,000 in royalties, compared to $227,000 for the nine months ended April 30, 2021.

  • Net loss for the nine months ended April 30, 2022 was $2,258,000, compared to $1,586,000 for the nine months ended April 30, 2021. Net loss, excluding share-based compensation, for the nine months ended April 30, 2022 was $1,765,000, compared to $903,000 for the nine months ended April 30, 2021.

  • Net loss per share was ($0.03) for the nine months ended April 30, 2022 and ($0.02) for the nine months ended April 30, 2021.

Business Update

Food Safety

PURE and Hydrite Chemical Company® entered into an exclusive distribution agreement for the dairy and plant-based beverage industries. Over the past year, PURE and Hydrite’s chemists, engineers and technical service staff have focused on the implementation of SDC to provide an efficacious solution in the dairy, beverage, and food safety segment. Hydrite, a family-owned company established in 1929, is one of the largest independent providers of chemicals and related services in the United States. Headquartered in Brookfield, Wisconsin, Hydrite has a network of manufacturing facilities, warehouses, and laboratories with locations in Illinois, Wisconsin, Iowa, Indiana, California, and Texas. In addition, Hydrite has nearly 1,000 employees in 25 states.

PURE and SmartWash Solutions® continue to develop, test and plan the rollout of PURE Control® for the fresh-cut industry. A setback occurred this April when a fire severely damaged Taylor Farms’® primary food processing facility in Salinas, California. However, Taylor Farms® remains fully operational and is running at full capacity at satellite locations in California and Yuma, Arizona. Taylor Farms plans to rebuild Salinas facility after 4-alarm fire - The King City Rustler | Your Local News Source in King City, California. Additionally, Taylor Farms® is fitting an adjacent facility with Process Boost (PURE Control®-based solution) lines by late July or early August to help meet customer needs. PURE and SmartWash Solutions® continue to market PURE Control® to the fresh-cut industry.

Janitorial and Sanitation

LightHouse for the Blind and Visually Impaired® (LightHouse) began shipping PURE® Hard Surface to the National Industries for the Blind and the Government Services Administration (NIB/GSA). In addition, Lighthouse recently signed an agreement with Office Depot® to supply PURE® Hard Surface. PURE® Hard Surface is the only disinfectant sanitizer that Office Depot® expects to distribute. Initial shipments of PURE® Hard Surface have been shipped to 16 Office Depot® distribution locations.

New Members of Management

PURE has hired John Kasperski as Vice President of Sales after conducting a national search. Mr. Kasperski has 22 years of experience in selling products business-to-business. Mr. Kasperski spent the last 11 years at Ecolab,® where he was a District Manager in the central United States. During this time, the teams he led consistently exceeded sales goals. Mr. Kasperski’s experience in chemical sales gives him a deep understanding of PURE’s customers, their decision-making processes and buying habits. He is implementing a sales plan that provides PURE with "boots on the ground" in the top four regions of the country to service restaurants, schools, long-term care facilities and hospitality, as well as a restructure of current PURE corporate accounts to increase sales revenue and provide customer support. PURE is currently recruiting for the Midwest and West Coast regions after attending the annual National Restaurant Association Exposition, which hosted approximately 55,000 attendees.

PURE also has hired Dr. Zhinong Yan as Executive Vice President of Science and Business Development. Dr. Yan has over 30 years of academic and industry experience in microbiology and food safety. Since joining PURE, Dr. Yan was instrumental in technical discussions with Hydrite and other PURE distributors. He also introduced PURE to global food companies and is guiding research on applications of PURE Control® at the University of Georgia and California Polytechnic State University, San Luis Obispo. Prior to joining PURE, Dr. Yan was the Executive Director of Walmart’s® Food Safety Collaboration Center in Beijing, China, and the Food Safety Director for Ecolab® in the Asia Pacific region. Dr. Yan also has served as the Senior Food Safety Scientist for Commercial Food Sanitation®, Intralox® and Mol Belting Systems®. Before working in industry, he was a research assistant professor at Michigan State University focusing on industry food safety needs, including sanitation. Dr. Yan has been actively engaged in food safety-related associations and promoting food safety globally with his strong leadership and networking. Dr. Yan received his Ph.D. from Auburn University in plant pathology.

Tom Y. Lee, Chief Executive Officer, said, "The addition of John Kasperski, Vice President of Sales, to the sales team is the first step to expand regionally across the United States. The near-term focus is to develop and service the food preparation, food service, education, and long-term care segments. We believe supporting our distributors and current customer base using our new 'boots on the ground' approach will help gain customer acceptance and confidence. We expect to increase revenue and expand into other regions of the United States. Dr. Zhinong Yan, Executive Vice President of Science and Business Development, is another great addition to the PURE team. We look forward to leveraging Dr. Yan’s unique skill set to grow sales, both foreign and domestic," 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-Q for the first fiscal quarter ended October 31, 2021, Form 10-Q for the fiscal second quarter ended January 31, 2022, and Form 10-Q for the fiscal third quarter ended April 30, 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.

PURE Bioscience, Inc.

Condensed Consolidated Balance Sheets

April 30, 2022

July 31, 2021

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$

511,000

$

2,390,000

Accounts receivable

198,000

368,000

Inventories, net

301,000

332,000

Restricted cash

75,000

75,000

Prepaid expenses

25,000

32,000

Total current assets

1,110,000

3,197,000

Property, plant and equipment, net

697,000

740,000

Patents, net

311,000

366,000

Total assets

$

2,118,000

$

4,303,000

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

$

416,000

$

593,000

Accrued liabilities

134,000

138,000

Loan payable

239,000

Total current liabilities

550,000

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, 88,023,141 shares issued and outstanding at April 30, 2022, and 87,223,141 shares issued and outstanding at July 31, 2021

881,000

873,000

Additional paid-in capital

128,738,000

128,253,000

Accumulated deficit

(128,051,000

)

(125,793,000

)

Total stockholders’ equity

1,568,000

3,333,000

Total liabilities and stockholders’ equity

$

2,118,000

$

4,303,000

PURE Bioscience, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

Nine Months Ended

Three Months Ended

April 30,

April 30,

2022

2021

2022

2021

Net product sales

$

1,409,000

$

2,841,000

$

497,000

$

556,000

Royalty revenue

32,000

227,000

27,000

5,000

Total revenue

1,441,000

3,068,000

524,000

561,000

Cost of goods sold

553,000

1,250,000

199,000

246,000

Gross profit

888,000

1,818,000

325,000

315,000

Operating costs and expenses

Selling, general and administrative

3,127,000

3,136,000

977,000

1,036,000

Research and development

255,000

265,000

107,000

89,000

Total operating costs and expenses

3,382,000

3,401,000

1,084,000

1,125,000

Loss from operations

(2,494,000

)

(1,583,000

)

(759,000

)

(810,000

)

Other income (expense)

Interest expense, net

(3,000

)

(3,000

)

(1,000

)

(1,000

)

Gain on extinguishment of indebtedness, net

239,000

Total other income (expense)

236,000

(3,000

)

(1,000

)

(1,000

)

Net loss

$

(2,258,000

)

$

(1,586,000

)

$

(760,000

)

$

(811,000

)

Basic and diluted net loss per share

$

(0.03

)

$

(0.02

)

$

(0.01

)

$

(0.01

)

Shares used in computing basic and diluted net loss per share

87,741,639

87,157,857

87,925,388

87,223,141

PURE Bioscience, Inc.

Condensed Consolidated Statement of Stockholders’ Equity

(Unaudited)

Nine Months Ended April 30, 2022

Nine Months Ended April 30, 2021

Common Stock

Additional
Paid-In

Accumulated

Total
Stockholders’

Common Stock

Additional
Paid-In

Accumulated

Total
Stockholders’

Shares

Amount

Capital

Deficit

Equity

Shares

Amount

Capital

Deficit

Equity

Balances at beginning of period

87,223,141

$

873,000

$

128,253,000

$

(125,793,000

)

$

3,333,000

87,072,951

$

871,000

$

127,414,000

$

(123,474,000

)

$

4,811,000

Share-based compensation expense - stock options

431,000

431,000

621,000

621,000

Share-based compensation expense - restricted stock units

62,000

62,000

62,000

62,000

Issuance of common stock upon the exercise of stock options

150,190

2,000

(2,000

)

Issuance of common stock for vested restricted stock units

800,000

8,000

(8,000

)

Net loss

(2,258,000

)

(2,258,000

)

(1,586,000

)

(1,586,000

)

Balances at end of period (Unaudited)

88,023,141

$

881,000

$

128,738,000

$

(128,051,000

)

$

1,568,000

87,223,141

$

873,000

$

128,095,000

$

(125,060,000

)

$

3,908,000

Three Months Ended April 30, 2022

Three Months Ended April 30, 2021

Common Stock

Additional
Paid-In

Accumulated

Total
Stockholders’

Common Stock

Additional
Paid-In

Accumulated

Total
Stockholders’

Shares

Amount

Capital

Deficit

Equity

Shares

Amount

Capital

Deficit

Equity

Balances at beginning of period (Unaudited)

87,873,141

$

879,000

$

128,617,000

$

(127,291,000

)

$

2,205,000

87,223,141

$

873,000

$

127,882,000

$

(124,249,000

)

$

4,506,000

Share-based compensation expense - stock options

103,000

103,000

193,000

193,000

Share-based compensation expense - restricted stock units

20,000

20,000

20,000

20,000

Issuance of common stock for vested restricted stock units

150,000

2,000

(2,000

)

Net loss

(760,000

)

(760,000

)

(811,000

)

(811,000

)

Balances at end of period (Unaudited)

88,023,141

$

881,000

$

128,738,000

$

(128,051,000

)

$

1,568,000

87,223,141

$

873,000

$

128,095,000

$

(125,060,000

)

$

3,908,000

PURE Bioscience, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended

April 30,

2022

2021

Operating activities

Net loss

$

(2,258,000

)

$

(1,586,000

)

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

Share-based compensation

493,000

683,000

Depreciation and amortization

162,000

133,000

Gain on extinguishment of indebtedness

(239,000

)

Changes in operating assets and liabilities:

Accounts receivable

170,000

868,000

Inventories

31,000

(21,000

)

Prepaid expenses

7,000

(19,000

)

Accounts payable and accrued liabilities

(181,000

)

(813,000

)

Net cash used in operating activities

(1,815,000

)

(755,000

)

Investing activities

Purchases of property, plant and equipment

(64,000

)

(504,000

)

Net cash used in investing activities

(64,000

)

(504,000

)

Financing activities

Net proceeds from payroll protection program loan

239,000

Net cash provided by financing activities

239,000

Net decrease in cash, cash equivalents, and restricted cash

(1,879,000

)

(1,020,000

)

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

2,465,000

3,914,000

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

$

586,000

$

2,894,000

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

Cash and cash equivalents

$

511,000

$

2,819,000

Restricted cash

$

75,000

$

75,000

Total cash, cash equivalents and restricted cash

$

586,000

$

2,894,000

View source version on businesswire.com: https://www.businesswire.com/news/home/20220614005485/en/

Contacts

Mark Elliott, VP Finance
PURE Bioscience, Inc.
Phone: 619-596-8600 ext.: 116