PURE BIOSCIENCE INC

Previous wording

We are focused on developing and commercializing proprietary antimicrobial products that provide safe and cost-effective 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 residual protection and formulates well with other compounds. As a platform technology, we believe SDC is distinguished from existing products in the marketplace because of its superior efficacy, reduced toxicity, non-causticity and the inability of bacteria to form a resistance to it.

Current wording

We are dedicated to developing and commercializing proprietary antimicrobial products that address health and environmental challenges related to pathogen and hygienic control. Our technology platform is based on patented stabilized ionic silver, and our initial products contain Silver Dihydrogen Citrate, or SDC. This broad-spectrum, non-toxic antimicrobial agent is available in liquid form and various concentrations, distinguished by its superior efficacy, reduced toxicity, non-causticity, and the inability of bacteria to develop resistance.

Previous wording

We believe there is a significant market opportunity for our safe, non-toxic, non-caustic and effective SDC-based solutions. We currently offer PURE® Hard Surface as a food contact surface sanitizer and disinfectant to restaurant chains, food processors and food transportation companies. We also offer PURE Control® as a direct food contact processing aid. In addition to our direct sales efforts with PURE Hard Surface and PURE Control, we market and sell our SDC-based products indirectly through third-party distributors supporting various industries.

Current wording

We see significant market opportunities for our safe and effective SDC-based solutions, particularly in the food industry. Our registered offerings include PURE® Hard Surface, a food contact surface sanitizer and disinfectant designed for restaurant chains, food processors, and transportation companies, as well as PURE Control®, a direct food contact processing aid. Our products are sold directly to end-use customers, as well as third-party distributors who market and sell our products across various industries, maximizing our reach and impact.

Previous wording

Our goal is to become a sustainable company by commercializing the SDC-based products we have developed with our proprietary technology platform. We are focused on delivering leading antimicrobial products that address food safety risks across the food industry supply chain. Key aspects of our business strategy include:

Current wording

Our goal is to establish a sustainable company by commercializing SDC-based products developed through our proprietary technology platform. We aim to deliver leading antimicrobial solutions that tackle food safety risks across the entire food industry supply chain. Our products are sold directly to end-use customers and through our expanding distribution network. Key elements of our business strategy include:

Previous wording

In addition to our current products addressing food safety, we intend to leverage our technology platform through licensing and distribution collaborations in order to develop new products and enter into new markets that could potentially generate multiple sources of revenue.

Current wording

In addition to our existing food safety products, we plan to leverage our technology platform through licensing and distribution collaborations to create new products and explore additional markets, aiming to generate multiple revenue streams.

Previous 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.

Current wording

Net product sales were $555,000 and $718,000 for the three months ended October 31, 2024 and 2023, respectively. The decrease of $163,000 was attributable to decreased sales across our end user customer base. Our top customer accounted for $166,000 of net product sales for the three months ended October 31, 2024.

Previous wording

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 wording

For the three months ended October 31, 2024, two individual customers accounted for 30% and 10% of our 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 wording

During the three months ended April 30, 2024 and 2023, we recognized $1,000 in royalties from a nonexclusive third-party distributor, respectively.

Current wording

During the three months ended October 31, 2024 and 2023, we recognized $1,000 and $4,000 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 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.

Current wording

Gross margin as a percentage of net product sales, or gross margin percentage, was 58% and 61% for the three months ended October 31, 2024 and 2023, respectively. The decrease in gross margin percentage was primarily attributable to the sale of higher packaging configurations of our products during the quarter ended October 31, 2023, as compared with the current period.

Previous 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.

Current wording

Selling, general and administrative expense was $881,000 and $1,073,000 for the three months ended October 31, 2024 and 2023, respectively. The decrease of $192,000 was primarily attributable to decreased personnel costs and facilities expenses. These decreases were partially offset by increased travel and marketing expense.

Previous 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.

Current wording

Share-based compensation expense, included in selling, general and administrative expense, was $57,000 and $80,000 for the three months ended October 31, 2024 and 2023, respectively. The decrease of $23,000 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 $77,000 and $74,000 for the three months ended April 30, 2024 and 2023, respectively.

Current wording

Research and development expense, primarily consisting of third-party fees and personnel costs, was $71,000 and $80,000 for the three months ended October 31, 2024 and 2023, respectively.

Previous 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.

Current wording

Interest expense was $62,000 and $24,000 for the three months ended October 31, 2024 and 2023, respectively. The increase of $38,000 was due to accrued interest on the convertible notes payable due to related parties.

Previous 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.

Current wording

As of October 31, 2024, we had $421,000 in cash and cash equivalents compared with $424,000 in cash and cash equivalents as of July 31, 2024. The net decrease in cash and cash equivalents was attributable to cash used to fund operations offset by the note payable financing that occurred in September 2024. Additionally, as of October 31, 2024, we had $911,000 of current liabilities, including $718,000 in accounts payable, compared with $733,000 of current liabilities, including $601,000 in accounts payable as of July 31, 2024. The net increase in current liabilities was due to trade payables due to our vendors.

Previous 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.

Current wording

We have a history of recurring losses, and as of October 31, 2024 we have a stockholder deficiency of $3,496,000. During the three months ended October 31, 2024, we recorded a net loss of $689,000 on recorded net revenue of $556,000. In addition, during the three months ended October 31, 2024 we used $503,000 in operating activities resulting in a cash balance of $346,000 as of October 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.

Previous 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:

Current 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:

Previous wording

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. We sell various configurations and dilutions of SDC direct to customers and through distributors. We currently offer PURE® Hard Surface as a food contact surface sanitizer and disinfectant to restaurant chains, food processors and food transportation companies. We also offer PURE Control® as a direct food contact processing aid.

Current wording

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 residual protection and formulates well with other compounds. We sell various configurations and dilutions of SDC direct to customers and through distributors. We currently offer PURE® Hard Surface as a food contact surface sanitizer and disinfectant to restaurant chains, food processors and food transportation companies. We also offer PURE Control® as a direct food contact processing aid.

Previous 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.

Current 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.