PURE Bioscience Reports Fiscal 2018 Year-End Financial Results


Update on PURE’s SDC-Based Antimicrobial Food Safety Solutions Outlook


SAN DIEGO, CA (October 25, 2018) – PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the fiscal year ended July 31, 2018.


Summary of Results – Year End Operations


Revenues for the fiscal year ended July 31, 2018 decreased 3% to $1,774,000, compared with revenues of $1,831,000 in the prior fiscal year. The decrease of $57,000 was entirely attributable to reduced sales within our existing legacy, non-food safety customer base.
Core food safety revenues for fiscal 2018 increased 23% as compared with food safety revenues in fiscal 2017. Fiscal Q4 food safety revenues increased 165% and we anticipate that in fiscal Q1 ’19 triple digit revenue growth year-over-year will continue.
Net loss for fiscal 2018 was $7.4 million, as compared with $6.3 million for fiscal 2017. Net loss, excluding inducement expense, derivative expense, and share-based compensation, for fiscal 2018 was $4.7 million, as compared with $4.9 million for fiscal 2017.
Net loss per share was ($0.11) as compared with ($0.10) for fiscal 2017.
Gross margin was 60% for fiscal 2018 as compared with 61% for the same period in fiscal 2017. The decrease was primarily attributable to the sale of higher margin formulations and packaging configurations of our products during fiscal 2017 as compared with the current year.


Update – Fiscal Q4 to Present


  In July, we raised $500,000 in the form of a promissory note from Tom Lee, a member of our Board of Directors and our largest shareholder.
  In August, we closed on an approximately $1.5 million private placement with existing shareholders. The funds raised included cancelled indebtedness of approximately $504,000 held by Lee.
  Proceeds of both financings were used for general working capital purposes.
Striving towards our previously stated goal to achieve cash flow breakeven in late calendar Q1 2019, in August, we continued to implement meaningful restructuring and cost reduction measures while pursuing immediate revenue generating opportunities, including:
  Board and management salaries and fees have been reduced, in some cases by 50%,
  Material reductions were made in outside advisor and service costs, and
  Sales and marketing expenses not directly related to new customer acquisitions and revenue growth were eliminated.
  BOD and Strengthened Management:
  In July, we named attorney and entrepreneur Ivan Chen to our Board of Directors, filling the vacancy left by the retirement of Director William Otis.
  In October, we promoted seven-year PURE veteran Tom Myers to Chief Operating Officer to oversee operations, and our go-to-market strategy and team.






Hank R. Lambert, CEO, said “We are pleased to have closed the fiscal fourth quarter with strong momentum – and quarterly food safety revenues putting us on a $2 million annualized run rate. We are also very encouraged that fiscal Q1 is off to a strong start. Our quarterly core food safety revenue growth has grown to triple digits, which reflects our strategic focus and the game changing nature of our SDC-based solutions.”


Lambert continued, “We are seeing expanding use by Taylor Farms of PURE Control (our direct food contact antimicrobial solution), accelerating progress in gaining adoption of our truck sanitizing solution among food transport companies, and accelerating expansion of PURE Hard Surface use in processing plants and restaurant chains.


“We have squarely addressed expenses and taken a series of meaningful steps to significantly reduce our overhead. This combination of revenue momentum and expense control lead me to reaffirm my expectation that, based upon our projections of customer adoption and rollout, we can achieve a cash flow breakeven annual revenue run rate of approximately $6 million by the end of calendar Q1 2019,” concluded Lambert.


2018 Fiscal Year-End Financial Results Conference Call


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 ET) on Thursday, October 25, 2018. The call can also be accessed “live” online at http://public.viavid.com/index.php?id=131359.


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 25, 2018, at 7:30pm ET through November 1, 2018 at 11:59 pm ET. Please use PIN Number 10005505.


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. Statements in this press release concerning the company’s expectations, plans, business outlook or future performance, 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; 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 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 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, 2018 and Form 10-Q for the third fiscal quarter ended April 30, 2018. 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
PURE Bioscience, Inc. Bibicoff + MacInnis, Inc.
619-596-8600 ext.103 hlambert@purebio.com 818-379-8500 terri@bibimac.com




PURE Bioscience, Inc.

Consolidated Balance Sheets


   July 31, 2018   July 31, 2017 
Current assets          
Cash and cash equivalents  $851,000   $1,640,000 
Accounts receivable   275,000    297,000 
Inventories, net   197,000    273,000 
Restricted cash   75,000    75,000 
Prepaid expenses   58,000    174,000 
Total current assets   1,456,000    2,459,000 
Property, plant and equipment, net   461,000    548,000 
Patents, net   658,000    822,000 
Total assets  $2,575,000   $3,829,000 
Liabilities and stockholders’ equity          
Current liabilities          
Accounts payable  $608,000   $426,000 
Promissory note payable   503,000     
Accrued liabilities   170,000    249,000 
Derivative liabilities       1,853,000 
Total current liabilities   1,281,000    2,528,000 
Deferred rent   13,000    11,000 
Total liabilities   1,294,000    2,539,000 
Commitments and contingencies (See Note 4)          
Stockholders’ equity          
Preferred stock, $0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding        
Common stock, $0.01 par value: 100,000,000 shares authorized, 68,248,158 shares issued and outstanding at July 31, 2018, and 63,093,153 shares issued and outstanding at July 31, 2017   683,000    631,000 
Additional paid-in capital   117,522,000    110,141,000 
Accumulated deficit   (116,924,000)   (109,482,000)
Total stockholders’ equity   1,281,000    1,290,000 
Total liabilities and stockholders’ equity  $2,575,000   $3,829,000 






PURE Bioscience, Inc.

Consolidated Statements of Operations


   Year ended 
   July 31, 
   2018   2017 
Net product sales  $1,774,000   $1,831,000 
Operating costs and expenses          
Cost of goods sold   763,000    760,000 
Selling, general and administrative   5,235,000    5,230,000 
Research and development   459,000    779,000 
Share-based compensation   2,359,000    1,070,000 
Total operating costs and expenses   8,816,000    7,839,000 
Loss from operations   (7,042,000)   (6,008,000)
Other income (expense)          
Inducement to exercise warrants   (876,000)    
Change in derivative liabilities   459,000    (277,000)
Interest expense, net   (8,000)   (5,000)
Other income, net   25,000    27,000 
Total other expense   (400,000)   (255,000)
Net loss  $(7,442,000)  $(6,263,000)
Basic and diluted net loss per share  $(0.11)  $(0.10)
Shares used in computing basic and diluted net loss per share   67,279,124    63,492,406 


PURE Bioscience, Inc.

Consolidated Statements of Stockholders’ Equity


   Common Stock   Additional
   Accumulated   Total
   Shares   Amount   Capital   Deficit   Equity 
Balance July 31, 2016   64,823,917   $649,000   $107,593,000   $(103,219,000)  $5,023,000 
Issuance of common stock in private placements, net   1,572,941    16,000    1,033,000        1,049,000 
Share-based compensation expense - stock options           968,000        968,000 
Share-based compensation expense - restricted stock units           102,000        102,000 
Warrant liability removed due to warrant exercise           226,000        226,000 
Issuance of common stock upon vesting of restricted stock units   150,000    1,000    (1,000)        
Issuance of common stock upon exercise of warrants   346,295    3,000    182,000        185,000 
Restricted stock unit cancellation   (3,800,000)   (38,000)   38,000         
Net loss               (6,263,000)   (6,263,000)
Balance July 31, 2017   63,093,153   $631,000   $110,141,000   $(109,482,000)  $1,290,000 
Share-based compensation expense - stock options           1,525,000        1,525,000 
Share-based compensation expense - restricted stock units           834,000        834,000 
Warrant liability removed due to warrant exercise           1,394,000        1,394,000 
Issuance of common stock upon exercise of warrants   4,914,505    49,000    2,583,000        2,632,000 
Stock issued for services   240,500    3,000    169,000         172,000 
Inducement to exercise warrants           876,000        876,000 
Net loss               (7,442,000)   (7,442,000)
Balance July 31, 2018   68,248,158   $683,000   $117,522,000   $(116,924,000)  $1,281,000 






PURE Bioscience, Inc.

Consolidated Statements of Cash Flows


   Year ended 
   July 31, 
   2018   2017 
Operating activities          
Net loss  $(7,442,000)  $(6,263,000)
Adjustments to reconcile net loss to net cash used in operating activities:          
Share-based compensation   2,359,000    1,070,000 
Amortization of stock issued for services   122,000    144,000 
Stock issued for services   121,000     
Depreciation and amortization   285,000    276,000 
Inventory write-off   58,000    50,000 
Gain on inventory recovery   (19,000)    
Change in fair value of derivative liabilities   (459,000)   277,000 
Inducement to exercise warrants   876,000     
Interest expense on promissory note   3,000     
Changes in operating assets and liabilities:          
Accounts receivable   22,000    (34,000)
Inventories   37,000    27,000 
Prepaid expenses   45,000    (58,000)
Accounts payable and accrued liabilities   103,000    (59,000)
Deferred rent   2,000    8,000 
Net cash used in operating activities   (3,887,000)   (4,562,000)
Investing activities          
Investment in patents   (15,000)   (20,000)
Purchases of property, plant and equipment   (19,000)   (206,000)
Net cash used in investing activities   (34,000)   (226,000)
Financing activities          
Net proceeds from the exercise of warrants   2,632,000    185,000 
Net proceeds from promissory note financing   500,000     
Net proceeds from the sale of common stock       1,049,000 
Net cash provided by financing activities   3,132,000    1,234,000 
Net decrease in cash and cash equivalents   (789,000)   (3,554,000)
Cash and cash equivalents at beginning of year   1,640,000    5,194,000 
Cash and cash equivalents at end of year  $851,000   $1,640,000 
Supplemental disclosure of cash flow information          
Cash paid for taxes  $3,000   $7,000 
Noncash investing and financing activities          
Warrant liability removed due to settlements  $1,394,000   $226,000 
Common stock issued for prepaid services  $51,000     
Restricted stock unit cancelation  $   $38,000 




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