PURE Bioscience Business Update and Goals – Food Safety Strategy Gaining Traction
SAN DIEGO, CA (January 30, 2014) – PURE Bioscience, Inc. (OTCQB: PURE), creator of the patented silver dihydrogen citrate (SDC) antimicrobial, announced that execution of its Food Safety Solutions Strategy continues to progress. The Company also announced its goals for calendar year 2014.
Business Strategy on Track as Food Safety Solutions Provider
As previously reported, PURE underwent a comprehensive management and corporate governance change in August 2013. Since then, its stated business strategy has been focused on:
- Commercialization of its SDC-based products as a food safety solution, with a focus on foodservice operators and food processors;
- Optimization of operations and termination of non-core activities;
- Implementation of a lean organization with the relevant experience to drive commercialization and accelerate growth;
- Restoring a strong financial position, and providing the resources to fund execution of its strategy.
In less than six months, the Company reports that significant progress has been made and continues to be made in implementing its new business strategy:
- PURE has developed a new customer pipeline of +25 national food companies in various stages of evaluating and testing SDC-based products in their operations;
- Customer pipeline represents potential annual revenue of $20 - $30 million if fully adopted.
- In-field testing results of SDC-based products to-date have been compelling, with 90% to 200% superiority in both level and speed of pathogen kill compared with incumbent chemical sanitization products.
- Secured initial commercial orders from 3 U.S. food processors, with customer rollout plans in development.
- Completed final in-store testing with a national brand QSR, confirming multiple outstanding prior testing results, where SDC-based products have continually been demonstrated to provide superior efficacy.
- Plans are in development for a phased system-wide rollout in the chain in the US.
- Initiated a new development project for the application of SDC as a direct food contact processing aid for produce, poultry and meats;
- Estimated potential addressable U.S. market opportunity for this new market exceeds $1.0 billion.
- Filing for required regulatory approval from the USDA and FDA is expected later in 2014.
- Implemented a strategic collaboration agreement with Intercon Chemical Company to out-source manufacturing and supply chain of SDC-based products and establish distribution:
- Allows for future reduction of non-core operating activities and preserves capital.
- Provides manufacturing capacity for anticipated future SDC-based product market demand.
- Provides potential future royalty income for SDC-based products through Intercon’s institutional cleaning and sanitation distribution channel.
- Executed a distribution agreement with Brenntag Specialties, Inc., an industry and market leading company, to continue to distribute SDC-based antimicrobial SILVÉRION® 2400 as an active ingredient or preservative for use in personal care products as a replacement for triclosan.
- Raised approximately $5.0 million in private equity placements to initiate its strategy.
- Early pay-off of a $1.125 million note payable for $500,000.
- Reduced total liabilities over $2 million, or 65%, since fiscal 2013 and eliminated all long-term debt.
2014 Company Goals
- Continue to rebuild credibility with all stakeholders: shareholders, customers, and employees.
- Achieve financial stability to execute strategy.
- Secure customer adoption in food safety with 2+ national QSR chains and 5+ national food processors;
- Fiscal 4Q 2014 (July 31 2014) annual revenue run rate $3-$5M.
- Fiscal 4Q 2015 (July 31 2015): positive EBITDA.
- Complete outsourcing of operations and supply chain;
- Provide incremental cost savings and increase production scale.
- Secure FDA and USDA authorization for use of SDC as a direct food contact/processing aid;
- Initiate commercialization by calendar 4Q 2014.
- License PURE distribution and SDC applications to non-core markets.
- Upgrade PURE listing to a national stock exchange.
Current Financial Position
The Company reported that since the corporate governance change on August 13, 2013 and thru January 30, 2014, the Company raised approximately $5.0 million through private equity placements, and efforts continue to secure the additional capital needed to fully execute its business strategy.
Food Safety Solutions Provider
PURE announced that its near-term business focus is to drive customer adoption of its products in the food industry. Its proprietary SDC-based products uniquely address food safety issues across the supply chain and help to prevent or mitigate food contamination and the potential for food-borne illness. The Company’s target customers are foodservice operators, food processors and food manufacturers. The Company estimates that the addressable U.S. market opportunity for this segment is projected to be $1.5 - $2.0 billion.
Hank Lambert, Chief Executive Officer, said, “Our team has made tremendous progress in less than six months in executing the initial phase of our new, focused business strategy. By December 2013 we eliminated significant liabilities, restructured our operations and established a robust customer pipeline, providing a clean runway to build our commercial operations in 2014 and beyond. Our goal is to drive innovation, focused on enhancing food safety solutions by providing superior pathogen and hygiene control to protect the health and safety of consumers and their environment.”
About PURE Bioscience, Inc.
PURE Bioscience, Inc. is focused on developing and commercializing its proprietary antimicrobial products that provide solutions to the health and environmental challenges of pathogen and hygienic control within the food industry. The Company’s technology platform is based on patented stabilized ionic silver, and its initial products contain silver dihydrogen citrate, or SDC. SDC is a broad-spectrum, non-toxic antimicrobial agent, which offers 24-hour residual protection. As a platform technology, SDC is distinguished from existing products in the marketplace by its superior efficacy, reduced toxicity and the inability of bacteria to form a resistance to it. PURE is headquartered in El Cajon, California (San Diego metropolitan area). Additional information on PURE is available at www.purebio.com
Redwood Investment Group
Terri MacInnis, Director of IR
Bibicoff + MacInnis, Inc.
Peter C. Wulff, CFO & COO
PURE Bioscience, Inc.