|By Marketwired .||
|June 10, 2014 04:04 PM EDT||
SAN DIEGO, CA -- (Marketwired) -- 06/10/14 -- PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented silver dihydrogen citrate (SDC) antimicrobial, today reported financial results for the second fiscal quarter ended April 30, 2014.
Fiscal Q3 Milestones
The Company reported that during the third fiscal quarter 2014, the new management team generated significant momentum in advancing its business strategy to commercialize its SDC-based technology as a food safety solution:
- Extended commercial market test launch of PURE® Hard Surface Disinfectant to over 650 stores with a national brand QSR (quick service restaurant);
- Positive customer field feedback on both SDC product performance and ease of use
- Phased U.S. national rollout under development for expected system-wide launch
- Rollout plans in development for wider plant adoption from five national food processors who placed commercial pilot orders;
- Expanding SDC usage with enhanced hygiene and operating protocols
- Reported outstanding initial test results for the application of SDC as a direct food contact processing aid for raw poultry;
- Test results achieved undetectable levels of salmonella in raw poultry
- Enhanced safety profile provides benefit to both plant environment and staff
- Estimated potential addressable U.S. market opportunity for this new application exceeds $1 billion for poultry, produce and meats
- Filing for required regulatory authorization from the FDA and USDA is expected later this month for poultry and Q3 2014 for produce and meats
- Expected approval for U.S. commercial use by end of calendar 2014 for poultry
- Test results achieved undetectable levels of salmonella in raw poultry
Summary of Results of Operations
Revenues for the third fiscal quarter of 2014 were $261,000, compared with revenues of $258,000 for the third fiscal quarter of 2013. Total operating costs and expenses, excluding share-based compensation, other share-based expenses, and restructuring costs, for the third fiscal quarter of 2014 and 2013, were $1.7 million, and $1.7 million, respectively. The net loss for the third fiscal quarter of 2014 was $(2.1) million, or $(0.07) per share, compared with a net loss of $(1.5) million, or $(0.14) per share, in the third fiscal quarter of 2013.
Revenues for the nine months ended April 30, 2014 were $417,000, compared with revenues of $631,000 for the nine months ended April 30, 2013. Total operating costs and expenses, excluding share-based compensation, other share-based expense, and restructuring costs, were $4.4 million, and $5.2 million, respectively, a reduction of 15%. The net loss for the nine months ended April 30, 2014 was $(8.4) million, or $(0.34) per share, compared with a net loss of $(5.5) million, or $(0.53) per share, in the nine months ended April 30, 2013. The adjusted net loss for the nine months ended April 30, 2014, as adjusted for significant items, was $(3.8) million compared with prior year adjusted net loss of $(4.9) million, a decrease of approximately a $1.1 million, or 22%.
As the Company continues to execute its new business strategy, it intends to:
- Accelerate market penetration and revenue adoption of restaurant chains and food processors with SDC-based products
- Leverage out-sourcing of its manufacturing operations
- Out-license the SDC-technology platform to non-food markets
- Secure additional capital to execute its business plan
Calendar 2014 Goals
- Increase financial strength to accelerate strategy execution.
- Secure customer adoption in food safety with 2+ national QSR chains and 5+ national food processors;
a. Fiscal 4Q 2014 (July 31 2014): annual revenue run rate $3-$5M
b. Fiscal 4Q 2015 (July 31 2015): positive EBITDA
- Leverage outsourcing of operations and supply chain;
a. Provide incremental cost savings and increase production scale
- Secure FDA and USDA authorization for use of SDC as a direct food contact/processing aid;
a. Initiate commercialization as a processing aid for poultry by end of calendar 2014
- License PURE distribution and SDC applications to non-core markets.
Food Safety Solutions Provider
PURE's 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.
"This quarter operating results are in line with our expectations of completing the manufacturing technology transfer and initiating out-sourced production and distribution to our QSR market test and other customers," stated Peter C. Wulff, Chief Financial Officer and Chief Operating Officer. "We believe we are well positioned with our new operating structure to meet expected market demand."
Hank R. Lambert, Chief Executive Officer, said, "The recent progress we have made in extending the usage of PURE Hard Surface in QSRs and food processors, combined with compelling results generated by our testing of SDC as a processing aid for poultry, provide strong validation for our unique antimicrobial technology and give us great optimism for building revenue momentum in the coming months. We are increasingly confident that SDC will prove to be one of the most important advances in food safety in recent history."
Q3 Results Conference Call
The Company will host an investor conference call on Tuesday, June 10th, 2014 at 1:30pm PDT (4:30pm EDT).
The Participant Dial-In Number for the conference call is 1-412-902-6720. Participants should dial in to the call at least five minutes before 1:30pm PDT (4:30pm EDT) on June 10th, 2014. The call can also be accessed "live" or via replay online on the Company's website (http://www.purebio.com/about/investor_relations). The replay of the webcast will be available by dialing 1-877-870-5176 (international participants dial 1-858-384-5517) starting June 10th, 2014, at 7:30pm EDT through June 24th, 2014 at 11:59 pm EDT. Please use PIN Number 90610.
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.
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.
Pure Bioscience, Inc. Condensed Consolidated Statements of Operations (Unaudited) Nine months ended Three months ended April 30, April 30, ------------------------ ------------------------ 2014 2013 2014 2013 ----------- ----------- ----------- ----------- Net product sales $ 417,000 $ 631,000 $ 261,000 $ 258,000 Operating costs and expenses Cost of goods sold 145,000 155,000 89,000 67,000 Selling, general and administrative 3,506,000 4,093,000 1,338,000 1,332,000 Research and development 750,000 979,000 248,000 283,000 Share-based compensation 2,191,000 583,000 770,000 153,000 Other share-based expenses 308,000 - - - Restructuring costs 2,754,000 - - - ----------- ----------- ----------- ----------- Total operating costs and expenses 9,654,000 5,810,000 2,445,000 1,835,000 ----------- ----------- ----------- ----------- Loss from operations (9,237,000) (5,179,000) (2,184,000) (1,577,000) Other income (expense) Change in derivative liability (56,000) 270,000 3,000 30,000 Interest expense, net (7,000) (591,000) (2,000) (2,000) Gain on extinguishment of debt 727,000 - - - Other income (expense), net 198,000 (12,000) 134,000 15,000 ----------- ----------- ----------- ----------- Total other income (expense) 862,000 (333,000) 135,000 43,000 ----------- ----------- ----------- ----------- Net loss $(8,375,000) $(5,512,000) $(2,049,000) $(1,534,000) =========== =========== =========== =========== Basic and diluted net loss per share $ (0.34) $ (0.53) $ (0.07) $ (0.14) =========== =========== =========== =========== Shares used in computing basic and diluted net loss per share 24,479,959 10,310,721 27,864,746 11,255,833 =========== =========== =========== =========== Pure Bioscience, Inc. Condensed Consolidated Balance Sheets April 30, July 31, 2014 2013 ------------- ------------- (Unaudited) Assets Current assets Cash and cash equivalents $ 416,000 $ 32,000 Accounts receivable, net 34,000 18,000 Inventories, net 387,000 365,000 Prepaid expenses 194,000 71,000 ------------- ------------- Total current assets 1,031,000 486,000 Property, plant and equipment, net 42,000 146,000 Patents, net 1,378,000 1,430,000 ------------- ------------- Total assets $ 2,451,000 $ 2,062,000 ============= ============= Liabilities and stockholders' equity (deficit) Current liabilities Accounts payable $ 529,000 $ 1,134,000 Restructuring liability 512,000 - Note payable, current - 368,000 Accrued liabilities 105,000 600,000 Derivative liability 10,000 51,000 ------------- ------------- Total current liabilities 1,156,000 2,153,000 Note payable, less current portion - 887,000 Deferred rent - 13,000 ------------- ------------- Total liabilities 1,156,000 3,053,000 ------------- ------------- Commitments and contingencies Stockholders' equity (deficit) 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, 28,555,500 shares issued and outstanding at April 30, 2014, and 12,569,503 shares issued and outstanding at July 31, 2013 286,000 126,000 Additional paid-in capital 79,555,000 69,054,000 Accumulated deficit (78,546,000) (70,171,000) ------------- ------------- Total stockholders' equity (deficit) 1,295,000 (991,000) ------------- ------------- Total liabilities and stockholders' equity (deficit) $ 2,451,000 $ 2,062,000 ============= ============= Pure Bioscience, Inc. Reconciliation of Non-GAAP Financial Measures (Unaudited) Nine months ended Three months ended April 30, April 30, ------------------------ ------------------------ 2014 2013 2014 2013 ----------- ----------- ----------- ----------- Net loss, as reported $(8,375,000) $(5,512,000) $(2,049,000) $(1,534,000) Add back significant items: Share-based compensation 2,191,000 583,000 770,000 153,000 Other share-based expenses 308,000 - - - Restructuring costs 2,754,000 - - - Gain on extinguishment of debt (727,000) - - ----------- ----------- ----------- ----------- Net loss, as adjusted for significant items $(3,849,000) $(4,929,000) $(1,279,000) $(1,381,000) ----------- ----------- ----------- -----------
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