PURE BIOSCIENCE, INC.

Previous wording

Net product sales were $2,198,000 and $1,955,000 for the fiscal years ended July 31, 2025 and 2024, respectively. The increase of $243,000 was attributable to increased sales across our end-user and distribution network servicing the food processing industry. Our top three customers accounted for $787,000 of net product sales for the fiscal year ended July 31, 2025.

Current wording

Net product sales were $2,315,000 and $2,198,000 for the fiscal years ended July 31, 2026 and 2025, respectively. The increase of $117,000 was attributable to increased sales across our end-user network servicing the food processing industry. Our top three customers accounted for $824,000 of net product sales for the fiscal year ended July 31, 2026.

Previous wording

For the year ended July 31, 2024, one customer accounted for 20% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. There were no foreign sales during the fiscal year ended July 31, 2024.

Current wording

For the year ended July 31, 2026, one customer accounted for 24% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. There were no foreign sales during the fiscal year ended July 31, 2026.

Previous wording

During the fiscal years ended July 31, 2025 and 2024, we recognized $4,000 and $8,000 in royalties from a non-exclusive third-party distributor, respectively.

Current wording

During the fiscal years ended July 31, 2026 and 2025, we recognized $3,000 and $4,000 in royalties from a non-exclusive third-party distributor, respectively.

Previous wording

Cost of goods sold was $899,000 and $811,000 for the years ended July 31, 2025 and 2024, respectively. The increase of $88,000 was primarily attributable to increased sales during the current fiscal year.

Current wording

Cost of goods sold was $992,000 and $899,000 for the years ended July 31, 2026 and 2025, respectively. The increase of $93,000 was primarily attributable to increased sales during the current fiscal year.

Previous wording

Gross margin, as a percentage of net product sales, was 59% for the years ended July 31, 2025 and 2024. Gross margin is a result of product mix. Our bulk volume products have higher margin formulations compared to our smaller configurations that require increased labor and packaging costs.

Current wording

Gross margin, as a percentage of net product sales, was 57% and 59% for the years ended July 31, 2026 and 2025, respectively. Gross margin is a result of product mix. Our bulk volume products have higher margin formulations compared to our smaller configurations that require increased labor and packaging costs.

Previous wording

Selling, general and administrative expense was $3,259,000 and $3,981,000 for the years ended July 31, 2025 and 2024, respectively. The decrease of $722,000 was primarily attributable to decreased personnel, facility and board fees. These decreases were offset by increased marketing and travel fees.

Current wording

Selling, general and administrative expense was $3,077,000 and $3,259,000 for the years ended July 31, 2026 and 2025, respectively. The decrease of $182,000 was primarily attributable to decreased personnel and board fees. These decreases were partially offset by increased professional service fees.

Previous wording

Share-based compensation expense included in selling, general and administrative expense, was $147,000 and $214,000 for the fiscal years ended July 31, 2025 and 2024, respectively. The decrease of $67,000 is 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 $197,000 and $147,000 for the fiscal years ended July 31, 2026 and 2025, respectively. The increase of $50,000 is due to the current year vesting of stock options 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 $316,000 and $302,000 for the years ended July 31, 2025 and 2024, respectively. The slight decrease was primarily attributable to decreased third-party testing and research supporting our EPA and FDA efforts.

Current wording

Research and development expense, primarily consisting of third-party fees and personnel costs, was $332,000 and $316,000 for the years ended July 31, 2026 and 2025, respectively. The slight increase was primarily attributable to increased third-party testing and research supporting our EPA and FDA efforts.

Previous wording

Interest expense was $299,000 and $155,000 for the fiscal year ended July 31, 2025 and 2024, respectively. The increase of $144,000 was primarily due to accrued interest on the outstanding convertible notes.

Current wording

Interest expense was $407,000 and $299,000 for the fiscal year ended July 31, 2026 and 2025, respectively. The increase of $108,000 was primarily due to accrued interest on the outstanding convertible notes.

Previous wording

Other income was $172,000 compared to other expense of $4,000 for the fiscal year ended July 31, 2025 and 2024, respectively. During the fiscal year ended July 31, 2025, we received $175,000 from the U.S. Governments Employee Retention Tax Credit Program.

Current wording

Other income was $7,000 compared to other income of $172,000 for the fiscal year ended July 31, 2026 and 2025, respectively. During the fiscal year ended July 31, 2025, we received $175,000 from the U.S. Governments Employee Retention Tax Credit Program.

Previous wording

As of July 31, 2025, we had $409,000 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 the use of cash to fund our operations. Additionally, as of July 31, 2025, we had $6,174,000 of total liabilities, including $784,000 in accounts payable, compared with $3,682,000 of total liabilities, including $601,000 in accounts payable as of July 31, 2024. The net increase in total liabilities was due to the multiple note payable financings, summarized below, that occurred during the fiscal years ended July 31, 2025, 2024 and 2023.

Current wording

As of July 31, 2026, we had $569,000 in cash and cash equivalents compared with $334,000 in cash and cash equivalents as of July 31, 2025. The net increase in cash and cash equivalents was attributable to cash received from financing activities of $1,973,000. Additionally, as of July 31, 2026, we had $7,592,000 of total liabilities, including $820,000 in accounts payable, compared with $6,174,000 of total liabilities, including $784,000 in accounts payable as of July 31, 2025. The net increase in total liabilities was due to the multiple note payable financings, summarized below, that occurred during the fiscal years ended July 31, 2026, 2025, 2024 and 2023.

Previous wording

We have a history of recurring losses, and as of July 31, 2025 we have a stockholders deficiency of $5,116,000. During the fiscal year ended July 31, 2025, we recorded a net loss of $2,399,000 on recorded net revenue of $2,202,000. In addition, during the year ended July 31, 2025 we used $2,015,000 in operating activities resulting in a cash balance of $334,000 as of July 31, 2025. 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 July 31, 2026, had a stockholders’ deficiency of $6,399,000. For the fiscal year ended July 31, 2026, the Company incurred a net loss of $2,483,000 on net revenue of $2,318,000 and used $1,738,000 of cash in operating activities, leaving a cash balance of $569,000 as of July 31, 2026. In addition, as of July 31, 2026, convertible notes payable of $1,015,000 were past due. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of this report. 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

In accordance with GAAP, if indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment by comparing the carrying value of the asset to the fair value of the asset and we record the impairment as a reduction in the carrying value of the related asset and a charge to operating results. Estimating the undiscounted future cash flows associated with long-lived assets requires judgment, and assumptions could differ materially from actual results. During the fiscal year ended July 31, 2024, management impaired $60,000 of computer software previously capitalized as fixed assets.

Current wording

In accordance with GAAP, if indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment by comparing the carrying value of the asset to the fair value of the asset and we record the impairment as a reduction in the carrying value of the related asset and a charge to operating results. Estimating the undiscounted future cash flows associated with long-lived assets requires judgment, and assumptions could differ materially from actual results. There were no fixed asset impairments during the fiscal year ended July 31, 2026.