PURE Bioscience, Inc., creator of the patented non-toxic silver dihydrogen citrate (SDC) antimicrobial, announced today that it has closed on an approximately $1.5 million private placement with existing shareholders. The $1.5 million the company raised includes cancelled indebtedness held by the Company’s director, Tom Y. Lee, of approximately $504,000. 3,333,964 shares of common stock were issued at $0.45 per share. Proceeds of the financing will be used for general working capital purposes.
PURE also announced the retirement of Chairman David J. Pfanzelter. Pfanzelter joined PURE in 2013 as part of the Company’s focus on food safety and committed to serve for five years. Pfanzelter has agreed to the Board’s request to act as a consultant to PURE for the next three years. The office of Chairman will remain vacant.
- Board and management salaries and fees have been reduced, in some cases by 50%.
- Material reductions are being made in outside services costs.
- Sales and marketing expenses not directly related to new customer acquisitions and revenue growth are being eliminated.
As a result of these initiatives, we estimate the annual revenue run rate required to reach cash flow break even is now approximately $6.0 million (down from the $7.0 million previously projected).
Business Initiatives + Revenue Momentum
PURE Control® – Produce Update: Taylor Farms, North America’s largest supplier of salads and fresh-cut vegetables, has combined PURE Control as a pre-treatment with its SmartWash® wash system and launched SmartWash Boost as a game-changing antimicrobial treatment for produce. In 3+ years of Taylor’s rigorous testing, results show SmartWash Boost consistently demonstrated superior incremental pathogen reduction and risk mitigation when compared with products presently on the market.
Taylor Farms recently began sales and marketing of the solution to its key foodservice and retail customers:
Eight additional produce processors also are testing or evaluating PURE Control.
Food Transport: Earlier this year, Sysco approved our new PURE Hard Surface food transport sanitizing solution for use system wide in its 90+ operating companies.
- We are currently in use in 18 of these operating companies, and have a goal of being in use in 50% of Sysco’s system by the end of this calendar year.
- When fully deployed, this represents a potential $2-3 million revenue stream to PURE.
Six additional distributors and processors also are testing or evaluating PURE Hard Surface.
- Existing customers, like Taylor Farms, Del Monte, and Unilever are expanding applications and increasing usage rates. We are adding new customers at the rate of 4+ per month.
- Developing new market - we have identified a need, and developed applications and protocols, for use in poultry breeder barns and hatcheries, and are beginning testing with two leading companies.
- We have rolled out system wide to all 210 locations of The Cheesecake Factory.
- We are in final testing/evaluation with two additional national casual dining chains.
Hank R. Lambert, CEO of PURE, said, “First and foremost, on behalf of our entire Board and management team, I want to thank Dave for his numerous and valuable contributions, insights and guidance in his role as our Chairman. We look forward to an orderly transition and to reaping the benefits of Dave’s expertise for the next several years.
“We are pleased that this month, Taylor Farms has begun marketing SmartWash Boost to its foodservice and retail customers. As Taylor gains adoption, we believe these PURE Control sales will help contribute revenues to PURE of approximately $1 million per plant/per year from Taylor’s 14-plant nationwide network. As stated in the Taylor Farms video (above), SmartWash Boost ‘…provides a virtual kill step’ that ‘would have prevented’ the recent romaine outbreak and ‘is the next generation of prevention of outbreaks, period.’ This is a strong endorsement from the market leader, and we are proud to be partnered with them.”
Lambert continued, “It’s important to note that, while we continue to actively sell and market to new customers, from projections based on only our existing customer base, we are confident that we can achieve cash flow break even in calendar Q1 2019.
“Sales of PURE Hard Surface to manufacturers/processors continue to build. Customers are expanding applications and we are adding plants and new customers at a growing rate. We also continue to grow our restaurant segment business,” concluded Lambert.
PURE Bioscience, Inc.
Tel: +1 619-596-8600
Email: hlambert@purebio.com