PURE BIOSCIENCE INC
For the period ended Apr 30, 2024. Filed Jun 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 30, 2024 · Filed Jun 14, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-01-31; filed 2024-03-18.
0001493152-24-010313
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-04-30; filed 2024-06-14.
0001493152-24-023869
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 79 previous paragraphs and 78 current paragraphs.
54 unchanged; 18 reworded; 6 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
For the three months ended April 30, 2023, one individual customer accounted for 39% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Current report
Cost of goods sold was $183,000 and $211,000 for the three months ended April 30, 2024 and 2023, respectively. The decrease of $28,000 was primarily attributable to the sale of higher margin products during the current quarter.
Current report
Comparison of the Nine Months Ended April 30, 2024 and 2023
Current report
For the nine months ended April 30, 2024, one individual customer accounted for 23% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Current report
For the nine months ended April 30, 2023, one individual customers accounted for 20% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Current report
Cost of goods sold was $612,000 and $625,000 for the nine months ended April 30, 2024 and 2023, respectively. The decrease of $13,000 was primarily attributable to the sale of higher margin products during the current fiscal year.
Removed paragraphs (7)
Previous report
For the three months ended January 31, 2023, two customers accounted for 16% and 15% of net product sales, respectively. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Previous report
Cost of goods sold was $149,000 and $200,000 for the three months ended January 31, 2024 and 2023, respectively.
Previous report
The decrease of $51,000 was primarily attributable to a reduction in sales.
Previous report
Comparison of the Six Months Ended January 31, 2024 and 2023
Previous report
For the six months ended January 31, 2024, one individual customer accounted for 30% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Previous report
For the six months ended January 31, 2023, one individual customer accounted for 10% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Previous report
Cost of goods sold was $429,000 and $414,000 for the six months ended January 31, 2024 and 2023, respectively. The increase of $15,000 was primarily attributable to increased sales.
Reworded paragraphs (18)
Previous wording
Net product sales were $325,000 and $396,000 for the three months ended January 31, 2024 and 2023, respectively. The decrease of $71,000 was attributable to decreased sales across our end user network. Our top customer accounted for $38,000 of net product sales for the three months ended January 31, 2024.
Current wording
Net product sales were $440,000 and $406,000 for the three months ended April 30, 2024 and 2023, respectively. The increase of $34,000 was attributable to increased sales across our end user network. Our top customer accounted for $90,000 of net product sales for the three months ended April 30, 2024.
Previous wording
For the three months ended January 31, 2024, one customer accounted for 12% of net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Current wording
For the three months ended April 30, 2024, one customer accounted for 20% of net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Previous wording
Gross margin as a percentage of net product sales, or gross margin percentage, was 54% and 49% for the three months ended January 31, 2024 and 2023, respectively. The increase in gross margin percentage was primarily attributable to increased sales of higher margin packaging configurations of our products during the quarter ended January 31, 2024, as compared with the prior period.
Current wording
Gross margin as a percentage of net product sales, or gross margin percentage, was 58% and 48% for the three months ended April 30, 2024 and 2023, respectively. The increase in gross margin percentage was primarily attributable to increased sales of higher margin packaging configurations of our products during the quarter ended April 30, 2024, as compared with the prior period.
Previous wording
Selling, general and administrative expense was $1,065,000 and $1,180,000 for the three months ended January 31, 2024 and 2023, respectively. The decrease of $115,000 was primarily attributable to decreased personnel costs, professional service fees and share-based compensation. These decreases were partially offset by increased travel and marketing expense.
Current wording
Selling, general and administrative expense was $998,000 and $997,000 for the three months ended April 30, 2024 and 2023, respectively. The slight increase was due to increased professional service fees and travel and marketing expense. These increases were partially offset by decreased personnel costs.
Previous wording
Share-based compensation expense, included in selling, general and administrative expense, was $64,000 and $127,000 for the three months ended January 31, 2024 and 2023, respectively. The decrease of $63,000 is primarily due to the prior year vesting of stock options and restricted stock units granted to employees, directors and consultants supporting our selling, general and administrative functions.
Current wording
Share-based compensation expense, included in selling, general and administrative expense, was $32,000 and $64,000 for the three months ended April 30, 2024 and 2023, respectively. The decrease of $32,000 is primarily due to the prior year vesting of stock options and restricted stock units granted to employees, directors and consultants supporting our selling, general and administrative functions.
Previous wording
Research and development expense, primarily consisting of third-party fees and personnel costs, was $76,000 and $75,000 for the three months ended January 31, 2024 and 2023, respectively.
Current wording
Research and development expense, primarily consisting of third-party fees and personnel costs, was $77,000 and $74,000 for the three months ended April 30, 2024 and 2023, respectively.
Previous wording
Interest expense was $38,000 and $2,000 for the three months ended January 31, 2024 and 2023, respectively. The increase of $36,000 was primarily due to accrued interest on the July and October 2023 convertible notes.
Current wording
Interest expense was $41,000 and $2,000 for the three months ended April 30, 2024 and 2023, respectively. The increase of $39,000 was primarily due to accrued interest on convertible notes issued in 2023 and 2024.
Previous wording
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 network. Our top customer accounted for $309,000 of net product sales for the six months ended January 31, 2024.
Current wording
Net product sales were $1,483,000 and $1,269,000 for the nine months ended April 30, 2024 and 2023, respectively. The increase of $214,000 was attributable to increased sales across our end user network. Our top customer accounted for $345,000 of net product sales for the nine months ended April 30, 2024.
Previous wording
During the six months ended January 31, 2024 and 2023, we recognized $5,000 in royalties from a nonexclusive third-party distributor, respectively.
Current wording
During the nine months ended April 30, 2024 and 2023, we recognized $6,000 in royalties from a nonexclusive third-party distributor, respectively.
Previous wording
Gross margin as a percentage of net product sales, or gross margin percentage, was 59% and 52% for the six months ended January 31, 2024 and 2023, respectively. The increase in gross margin percentage was primarily attributable to the sale of higher margin packaging configurations of our products during the six months ended January 31, 2024, as compared with the prior period.
Current wording
Gross margin as a percentage of net product sales, or gross margin percentage, was 59% and 51% for the nine months ended April 30, 2024 and 2023, respectively. The increase in gross margin percentage was primarily attributable to the sale of higher margin packaging configurations of our products during the nine months ended April 30, 2024, as compared with the prior period.
Previous wording
Selling, general and administrative expense was $2,138,000 and $2,345,000 for the six months ended January 31, 2024 and 2023, respectively. The decrease of $207,000 was primarily attributable to decreased personnel costs, professional service fees, board of director fees and share-based compensation. These decreases were partially offset by increased travel expense.
Current wording
Selling, general and administrative expense was $3,136,000 and $3,342,000 for the nine months ended April 30, 2024 and 2023, respectively. The decrease of $206,000 was primarily attributable to decreased personnel costs, professional service fees, board of director fees and share-based compensation. These decreases were partially offset by increased travel expense.
Previous wording
Share-based compensation expense, included in selling, general and administrative expense, was $144,000 and $211,000 for the six months ended January 31, 2024 and 2023, respectively. The decrease of $67,000 is primarily due to the prior year vesting of stock options and restricted stock units granted to employees, directors and consultants supporting our selling, general and administrative functions.
Current wording
Share-based compensation expense, included in selling, general and administrative expense, was $176,000 and $275,000 for the nine months ended April 30, 2024 and 2023, respectively. The decrease of $99,000 is primarily due to the prior year vesting of stock options and restricted stock units granted to employees, directors and consultants supporting our selling, general and administrative functions.
Previous wording
Research and development expense, primarily consisting of third-party fees and personnel costs, was $156,000 and $153,000 for the six months ended January 31, 2024 and 2023, respectively.
Current wording
Research and development expense, primarily consisting of third-party fees and personnel costs, was $233,000 and $227,000 for the nine months ended April 30, 2024 and 2023, respectively.
Previous wording
Interest expense was $62,000 and $4,000 for the six months ended January 31, 2024 and 2023, respectively. The increase of $58,000 was primarily due to accrued interest on the July and October 2023 convertible note.
Current wording
Interest expense was $103,000 and $6,000 for the nine months ended April 30, 2024 and 2023, respectively. The increase of $97,000 was primarily due to accrued interest on the outstanding convertible notes.
Previous wording
As of January 31, 2024, we had $632,000 in cash and cash equivalents compared with $1,170,000 in cash and cash equivalents as of July 31, 2023. The net decrease in cash and cash equivalents was attributable to cash used to fund continuing operations. Additionally, as of January 31, 2024, we had $545,000 of current liabilities, including $409,000 in accounts payable, compared with $532,000 of current liabilities, including $422,000 in accounts payable as of July 31, 2023. The net decrease in current liabilities was due to a reduction of trade payables due to our contract manufactures.
Current wording
As of April 30, 2024, we had $517,000 in cash and cash equivalents compared with $1,170,000 in cash and cash equivalents as of July 31, 2023. The net decrease in cash and cash equivalents was attributable to cash used to fund continuing operations. Additionally, as of April 30, 2024, we had $666,000 of current liabilities, including $506,000 in accounts payable, compared with $532,000 of current liabilities, including $422,000 in accounts payable as of July 31, 2023. The net increase in current liabilities was due to increased trade payables owed to our contract manufactures.
Previous wording
We have a history of recurring losses, and as of January 31, 2024 we have a stockholder deficiency of $1,321,000. During the six months ended January 31, 2024, we recorded a net loss of $1,737,000 on recorded net revenue of $1,048,000. In addition, during the six months ended January 31, 2024 we used $1,323,000 in operating activities resulting in a cash balance of $557,000 as of January 31, 2024. Our history of recurring operating losses, and negative cash flows from operating activities give rise to substantial doubt regarding our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from our possible inability to continue as a going concern.
Current wording
We have a history of recurring losses, and as of April 30, 2024 we have a stockholder deficiency of $2,146,000. During the nine months ended April 30, 2024, we recorded a net loss of $2,594,000 on recorded net revenue of $1,489,000. In addition, during the nine months ended April 30, 2024 we used $1,938,000 in operating activities resulting in a cash balance of $442,000 as of April 30, 2024. Our history of recurring operating losses, and negative cash flows from operating activities give rise to substantial doubt regarding our ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from our possible inability to continue as a going concern.
Previous wording
We recognize revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 606, Revenue from Contracts with Customers (“Topic 606”). Under Topic 606, revenue is recognized at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following 5-step process:
Current wording
We recognize revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, ASC, Topic 606, Revenue from Contracts with Customers, Topic 606. Under Topic 606, revenue is recognized at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following 5-step process:
Previous wording
The Company’s licensing contracts typically provide for royalties based on the licensee’s sales of various configurations of PURE Hard Surface. The Company records its royalty revenue in the month in which the licensee sold our products to end users. Payments are generally received in the subsequent month.
Current wording
Our licensing contracts typically provide for royalties based on the licensee’s sales of various configurations of PURE Hard Surface. We record royalty revenue in the month in which the licensee sold our products to end users. Payments are generally received in the subsequent month.