SAN DIEGO--(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 second quarter and six-month period ended January 31, 2018.
Q2: Summary of Results of Operations
Revenues for the fiscal second quarter ended January 31, 2018
decreased 8% to $411,000, compared with revenues of $447,000 in the
prior year fiscal second quarter. The decrease was due to fluctuations
within our existing legacy customer base.
- Core food safety revenues for the fiscal second quarter ended 2018 increased 55% as compared with food safety revenues in the fiscal second quarter ended 2017.
- Net loss for the fiscal second quarter in 2018 was $2.0 million, as compared with $936,000 for fiscal second quarter in 2017. Net loss, excluding derivative income, and share-based compensation, for the second fiscal quarter in 2018 was $1.3 million, as compared with $1.2 million for the second quarter in 2017.
- Net loss per share was ($0.03) as compared with ($0.01) for the fiscal second quarter ended 2018 and 2017.
- Gross margin was 67% during the second quarter of fiscal 2018 as compared with 70% during the same period in fiscal 2017. The decrease in gross margin percentage was primarily attributable to the sale of lower margin formulations and packaging configurations of our products during the quarter ended January 31, 2018, as compared with the prior period.
Six Months: Summary of Results of Operations
Revenues for the six-months ended January 31, 2018 decreased 11% to
$875,000 compared with prior year six-month revenues of $978,000.
- Core food safety revenues for the six months ended 2018 decreased 25% as compared with food safety revenues in the six months ended 2017. The decline in both total and food safety revenues was due to timing of product orders, as the initial system-wide stocking order from Chipotle occurred in fiscal 2017 Q1.
- Net loss for the six months ended January 31, 2018, was $4.4 million compared with $2.7 million for the six month period in 2017. Net loss, excluding derivative income, inducement expense and share-based compensation, for the six months ended January 31, 2018 was $2.6 million, as compared with $2.5 million for the six month period in 2017.
- Net loss per share was ($0.07) as compared with ($0.04) for the six months ended fiscal 2018 and 2017.
- Gross margin was 65% during the first six months of fiscal 2018 as compared with 59% during the same six-month period in fiscal 2017. The increase in gross margin percentage was primarily attributable to the sale of higher margin formulations and packaging configurations of our products during the six months ended January 31, 2018 as compared with the prior period.
Hank R. Lambert, CEO, said that, “Based upon the pending roll-out plans of two of our key customers (one in produce and one in food transportation), we have every reason to expect that future financial results will finally begin to reflect the sales ramp we’ve all been expecting.
“In Q2 we launched a new vertical, receiving our first orders from two customers in the est. $50 million food transportation market. We look forward to follow on orders in the coming months from both plastic pallets and food transport customers.
Lambert continued, “Also in Q2, we named a second notable outside director to our Board. Today, Elisabeth Hagen, M.D. (former USDA Under Secretary for Food Safety), is actively leveraging her expertise and relationships to further all of our key initiatives.
“Our mission is to protect people and protect company brands by providing superior, leading edge food safety solutions to prevent foodborne illness. We are building momentum and sales traction in our food safety revenues – and we continue to look forward to calendar 2018 as our breakout year,” concluded Lambert.
2018 Fiscal Second Quarter 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 March 14, 2018. The call can also be accessed “live” online at http://public.viavid.com/index.php?id=128309.
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 March 14, 2018, at 7:30pm ET through March 21, 2018 at 11:59 pm ET. Please use PIN Number 10004295.
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.
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 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, 2017 and Form 10-Q for the second fiscal quarter ended January 31, 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.
|PURE Bioscience, Inc.|
|Condensed Consolidated Statements of Operations|
|Six Months Ended||Three months ended|
|January 31,||January 31,|
|Net product sales||$||875,000||$||978,000||$||411,000||$||447,000|
|Operating costs and expenses|
|Cost of goods sold||307,000||399,000||161,000||134,000|
|Selling, general and administrative||2,863,000||2,670,000||1,418,000||1,333,000|
|Research and development||264,000||462,000||120,000||214,000|
|Total operating costs and expenses||4,830,000||3,979,000||2,439,000||1,851,000|
|Loss from operations||(3,955,000||)||(3,001,000||)||(2,028,000||)||(1,404,000||)|
|Other income (expense)|
|Inducement to exercise warrants||(876,000||)||—||—||—|
|Change in derivative liabilities||459,000||300,000||—||459,000|
|Interest expense, net||(2,000||)||(3,000||)||(1,000||)||(2,000||)|
|Other income (expense), net||8,000||25,000||2,000||11,000|
|Total other income (expense)||(411,000||)||322,000||1,000||468,000|
|Basic and diluted net loss per share||$||(0.07||)||$||(0.04||)||$||(0.03||)||$||(0.01||)|
|Shares used in computing basic and diluted net loss per share||66,482,607||64,220,473||68,000,810||63,617,030|
|PURE Bioscience, Inc.|
|Condensed Consolidated Balance Sheets|
|January 31, 2018||July 31, 2017|
|Cash and cash equivalents||$||2,129,000||$||1,640,000|
|Total current assets||2,721,000||2,459,000|
|Property, plant and equipment, net||515,000||548,000|
|Liabilities and stockholders’ equity|
|Total current liabilities||682,000||2,528,000|
|Commitments and contingencies|
|Preferred stock, $0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding|
|Common stock, $0.01 par value: 100,000,000 shares authorized, 68,057,658 shares issued and outstanding at January 31, 2018, and 63,093,153 shares issued and outstanding at July 31, 2017||681,000||631,000|
|Additional paid-in capital||116,441,000||110,141,000|
|Total stockholders’ equity||3,274,000||1,290,000|
|Total liabilities and stockholders’ equity||$||3,973,000||$||3,829,000|
|PURE Bioscience, Inc.|
|Condensed Consolidated Statements of Cash Flows|
|Six Months Ended|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Amortization of stock issued for services||81,000||72,000|
|Depreciation and amortization||142,000||134,000|
|Change in fair value of derivative liabilities||(459,000||)||(300,000||)|
|Inducement to exercise warrants||876,000||—|
|Changes in operating assets and liabilities:|
|Accounts payable and accrued liabilities||7,000||(36,000||)|
|Net cash used in operating activities||(2,119,000||)||(2,222,000||)|
|Investment in patents||(4,000||)||(10,000||)|
|Purchases of property, plant and equipment||(20,000||)||(173,000||)|
|Net cash used in investing activities||(24,000||)||(183,000||)|
|Net proceeds from the exercise of warrants||2,632,000||—|
|Net proceeds from the sale of common stock||—||1,104,000|
|Net cash provided by financing activities||2,632,000||1,104,000|
|Net increase (decrease) in cash and cash equivalents||489,000||(1,301,000||)|
|Cash and cash equivalents at beginning of period||1,640,000||5,194,000|
|Cash and cash equivalents at end of period||$||2,129,000||$||3,893,000|
|Supplemental disclosure of cash flow information|
|Cash paid for taxes||$||—||$||2,000|
|Warrant liabilities removed due to settlements||$||1,394,000||$||8,000|
|Common stock issued for prepaid services||$||51,000||$||—|
|Restricted stock unit cancelation||$||—||$||38,000|