PURE Bioscience Reports Fiscal Second Quarter 2024 Financial Results

Rhea-AI Summary

PURE Bioscience reports financial results for the fiscal second quarter, highlighting net product sales, net loss, and business developments. Despite a decrease in sales, the company aims to expand its footprint in the food industry through brand advertising, trade shows, distributor focus, and continued innovation.

Positive

• Increase in net product sales for the six months ended January 31, 2024 compared to the same period in 2023.
• Decrease in net loss for the six months ended January 31, 2024 compared to the same period in 2023.
• Shift in business strategy from direct sales model to a distributor model to expand coverage in the United States.
• Focus on new food segments, brand advertising, marketing, and attending trade shows for growth initiatives.
• Development of new solutions through application equipment and exploration of new business sectors like the dairy industry and animal health market.

Negative

• - Unexpected interruption in product flow to a major customer impacted revenue negatively.
• - Disappointing fiscal second quarter revenue due to decreased sales across end user network.
• - Net loss per share remained negative for both fiscal second quarters ended January 31, 2024 and 2023.

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

EL CAJON, Calif.--(BUSINESS WIRE)-- 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 second quarter ended January 31, 2024.

Summary of Results – Fiscal Second Quarter Operations

• Net product sales were $325,000 and $396,000 for the fiscal second quarter ended January 31, 2024 and 2023, respectively. The decrease of $71,000 was attributable to decreased sales across our end user network.
• Net loss for the fiscal second quarter ended January 31, 2024 was $1,002,000, compared to $1,060,000 for the fiscal second quarter ended January 31, 2023.
• Net loss, excluding share-based compensation, for the fiscal second quarter ended January 31, 2024 was $938,000, compared to $993,000 for the fiscal second quarter ended January 31, 2023.
• Net loss per share was ($0.01) for the fiscal second quarters ended January 31, 2024 and 2023, respectively.

Six Months: Summary of Results of Operations

• Net product sales were $1,043,000 and $863,000 for the six months ended January 31, 2024 and 2023, respectively. The increase of $180,000 was attributable to increased sales across our end user and distribution network.
• Net loss for the six months ended January 31, 2024 was $1,737,000, compared to $2,053,000 for the six months ended January 31, 2023.
• Net loss, excluding share-based compensation, for the six months ended January 31, 2024 was $1,593,000, compared to $1,842,000 for the six months ended January 31, 2023.
• Net loss per share was ($0.02) for the six months ended January 31, 2024 and 2023, respectively.

Robert Bartlett, Chief Executive Officer, said, “Our fiscal second quarter revenue was very disappointing at best. While historically, this quarter is our lowest revenue generator, FYQ2 experienced an unexpected interruption in the flow of PURE products to one of our major customers. The impact of this interruption cannot be overstated. We anticipate this shortfall in revenue will be absorbed in future sales.”

Business Update

We are excited to announce that we are beginning to make headway into new food segments as we work on expanding our footprint in the food industry.

• Brand Advertising and Marketing. Having a social media presence has been a focus of the newly-formed marketing committee at PURE. Our recently updated website is a helpful sales tool for lead generation, as well as a central location for customer support and questions. PURE will continue to evolve its brand as we work with a new branding firm to guide us in clearly communicating to the public that PURE’s team and chemistry are trustworthy, offering premium products that represent a complete game changer in the world of food safety and sanitization. Our targeted end user is committed to protecting their customers, employees, the environment, as well as their own brand name.
  
  
• Trade Shows. Attending and supporting customer events and trade shows has been and will continue to be a significant part of our growth initiatives. This has proven to be an effective approach to meeting new customers and continue networking and educating the industry on our unique SDC solutions. At the end of FYQ2, PURE attended the global International Production & Processing Expo (IPPE) show for the first time. Our team was able to better understand current industry trends and solutions, as well as network and meet with key customers. In addition, the team was able to facilitate strategic meetings with key industry leaders from North America and across the globe. PURE is again registered to exhibit at the International Association for Food Protection (IAFP) annual meeting in Long Beach, California (July 14-17, 2024). The IAFP annual meeting is attended by more than 3,500 of the top industry, academic and governmental food safety professionals.
  
  
• Distributor Focus and Support. Our business strategy will be shifting focus from a direct sales model to a distributor model. This model provides a much needed expansion of coverage in all regions of the United States. With local boots on the ground, our distributors allow PURE to expand our footprint into new market segments and customer bases as we are integrated into our distribution partners’ chemical portfolios and solution offerings. Due to the unique nature of our SDC molecule and ongoing advancement in application technologies, our distributors will be able to present their customers innovative solutions previously unavailable to them. This transition facilitates:
  • Broader coverage of service personnel and more regular on-site visits to customers;
  • Strengthening and growing partnerships with current distributors;
  • Bringing on new key distributors;
  • Leveraging the PURE team to provide enhanced support from remote to on-site visits;
  • Better market penetration of our brand and product awareness;
  • Acceleration of our sales model; and
  • Expedited access to new market segments.
    
    
• Continued Innovation. The development of new solutions through application equipment is a large part of our current R&D efforts. New business sectors, including the dairy industry and the animal health market, have shown promising interest as we begin to explore the use of our SDC technology. Incorporating technology into our equipment solutions is another avenue through which we are enhancing our ability to support our customers’ greatest needs in food safety.

Tim Steffensmeier, Vice President of Sales, said, “The technical sales team we have assembled has nearly 100 years of combined food and chemical industry experience. The varying experience and unique skillsets enables our team to be productive in business development, sales and marketing, new equipment solutions, and new product development and microbiology solutions. Our team is dedicated to prioritizing the sustainability of the Company’s growth, and are actively cultivating new relationships with key stakeholders while also nurturing and expanding current key industry and distributor accounts.”

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’s mailing address of 771 Jamacha Rd. #512, El Cajon, California 92019 (San Diego County area) serves as its official address for all business requirements. 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; 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, 2023, Form 10-Q for the fiscal first quarter ended October 31, 2023, and Form 10-Q for the fiscal second quarter ended January 31, 2024. 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
		January 31, 2024				July 31, 2023
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	557,000			$	1,095,000
Accounts receivable			171,000				285,000
Inventories, net			74,000				88,000
Restricted cash			75,000				75,000
Prepaid expenses			62,000				61,000
Total current assets			939,000				1,604,000
Property, plant and equipment, net			147,000				221,000
Total assets		$	1,086,000			$	1,825,000
Liabilities and stockholders’ equity (deficiency)
Current liabilities
Accounts payable		$	409,000			$	422,000
Accrued liabilities			136,000				110,000
Total current liabilities			545,000				532,000
Long-term liabilities
Note payable to related parties			1,862,000				1,021,000
Total long-term liabilities			1,862,000				1,021,000
Total liabilities			2,407,000				1,553,000
Commitments and contingencies			-				-
Stockholders’ equity (deficiency)
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, 111,856,473 shares issued and outstanding at January 31, 2024, and July 31, 2023			1,119,000				1,119,000
Additional paid-in capital			132,542,000				132,398,000
Accumulated deficit			(134,982,000	)			(133,245,000	)
Total stockholders’ equity (deficiency)			(1,321,000	)			272,000
Total liabilities and stockholders’ equity (deficiency)		$	1,086,000			$	1,825,000

PURE Bioscience, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
		2024				2023				2024				2023
		Six Months Ended								Three months Ended
		January 31,								January 31,
		2024				2023				2024				2023
Net product sales		$	1,043,000			$	863,000			$	325,000			$	396,000
Royalty revenue			5,000				5,000				1,000				1,000
Total revenue			1,048,000				868,000				326,000				397,000
Cost of goods sold			429,000				414,000				149,000				200,000
Gross profit			619,000				454,000				177,000				197,000
Operating costs and expenses
Selling, general and administrative			2,138,000				2,345,000				1,065,000				1,180,000
Research and development			156,000				153,000				76,000				75,000
Total operating costs and expenses			2,294,000				2,498,000				1,141,000				1,255,000
Loss from operations			(1,675,000	)			(2,044,000	)			(964,000	)			(1,058,000	)
Other income (expense)
Other income (expense), net			—				(5,000	)			—				—
Interest expense, net			(62,000	)			(4,000	)			(38,000	)			(2,000	)
Total other income (expense)			(62,000	)			(9,000	)			(38,000	)			(2,000	)
Net loss		$	(1,737,000	)		$	(2,053,000	)		$	(1,002,000	)		$	(1,060,000	)
Basic and diluted net loss per share		$	(0.02	)		$	(0.02	)		$	(0.01	)		$	(0.01	)
Shares used in computing basic and diluted net loss per share			111,856,473				111,356,473				111,856,473				111,356,473

PURE Bioscience, Inc.
Condensed Consolidated Statement of Stockholders’ Equity (Deficiency)
(Unaudited)
		Six Months Ended January 31, 2024																				Six Months Ended January 31, 2023
		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			111,856,473			$	1,119,000			$	132,398,000			$	(133,245,000	)		$	272,000				111,356,473			$	1,114,000			$	132,079,000			$	(129,284,000	)		$	3,909,000
Share-based compensation expense - stock options			—				—				144,000				—				144,000				—				—				169,000				—				169,000
Share-based compensation expense - restricted stock units			—				—				—				—				—				—				—				42,000				—				42,000
Net loss			—				—				—				(1,737,000	)			(1,737,000	)			—				—				—				(2,053,000	)			(2,053,000	)
Balances at end of period (Unaudited)			111,856,473			$	1,119,000			$	132,542,000			$	(134,982,000	)		$	(1,321,000	)			111,356,473			$	1,114,000			$	132,290,000			$	(131,337,000	)		$	2,067,000

		Three Months Ended January 31, 2024																				Three Months Ended January 31, 2023
		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)			111,856,473			$	1,119,000			$	132,478,000			$	(133,980,000	)		$	(383,000	)			111,356,473			$	1,114,000			$	132,163,000			$	(130,277,000	)		$	3,000,000
Balance			111,856,473			$	1,119,000			$	132,478,000			$	(133,980,000	)		$	(383,000	)			111,356,473			$	1,114,000			$	132,163,000			$	(130,277,000	)		$	3,000,000
Share-based compensation expense - stock options			—				—				64,000				—				64,000				—				—				106,000				—				106,000
Share-based compensation expense - restricted stock units			—				—				—				—				—				—				—				21,000				—				21,000
Net loss			—				—				—				(1,002,000	)			(1,002,000	)			—				—				—				(1,060,000	)			(1,060,000	)
Balances at end of period (Unaudited)			111,856,473			$	1,119,000			$	132,542,000			$	(134,982,000	)		$	(1,321,000	)			111,356,473			$	1,114,000			$	132,290,000			$	(131,337,000	)		$	2,067,000

PURE Bioscience, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
		2024				2023
		Six Months Ended
		January 31,
		2024				2023
Operating activities
Net loss		$	(1,737,000	)		$	(2,053,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation			144,000				211,000
Depreciation and amortization			74,000				67,000
Gain on extinguishment of indebtedness			—				—
Changes in operating assets and liabilities:
Accounts receivable			114,000				45,000
Inventories			14,000				(21,000	)
Prepaid expenses			(1,000	)			(6,000	)
Interest on note payable			56,000				—
Accounts payable and accrued liabilities			13,000				(112,000	)
Net cash used in operating activities			(1,323,000	)			(1,869,000	)
Investing activities
Purchases of property, plant and equipment			—				(37,000	)
Net cash used in investing activities			—				(37,000	)
Financing activities
Net proceeds from note payable to related parties			785,000				—
Net cash provided by financing activities			785,000				—
Net decrease in cash, cash equivalents, and restricted cash			(538,000	)			(1,906,000	)
Cash, cash equivalents, and restricted cash at beginning of period			1,170,000				3,466,000
Cash, cash equivalents, and restricted cash at end of period		$	632,000			$	1,560,000
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents		$	557,000			$	1,485,000
Restricted cash		$	75,000			$	75,000
Total cash, cash equivalents and restricted cash		$	632,000			$	1,560,000
Supplemental disclosure of cash flow information
Cash paid for taxes		$	—				5,000

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240318906401/en/

Mark Elliott, VP Finance

PURE Bioscience, Inc.

Phone: 619-596-8600 ext.: 116

Source: PURE Bioscience, Inc.

FAQ

What were the net product sales for the fiscal second quarter ended January 31, 2024?

Net product sales were $325,000 for the fiscal second quarter ended January 31, 2024.

What was the net loss for the fiscal second quarter ended January 31, 2024?

The net loss for the fiscal second quarter ended January 31, 2024 was $1,002,000.

What business segments is PURE Bioscience focusing on for expansion?

PURE Bioscience is focusing on new food segments, brand advertising, marketing, and attending trade shows for growth initiatives.

What is the new business strategy PURE Bioscience is adopting?

PURE Bioscience is shifting from a direct sales model to a distributor model to expand coverage in the United States.

What is the focus of PURE Bioscience's continued innovation efforts?

PURE Bioscience is focusing on the development of new solutions through application equipment and exploring new business sectors like the dairy industry and animal health market.