PURE Corporate Presentation July 2016

PURE Bioscience, Inc.
DELIVERING SUPERIOR
FOOD SAFETY SOLUTIONS
Corporate Presentation
July, 2016
(OTCQB: PURE)
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Forward-Looking Statements
Any statements contained in this presentation that do not describe historical facts may
constitute forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and
uncertainties that could cause our actual results to differ materially from the forward-looking
statements. Factors that could cause or contribute to such differences include, but are not
limited to, the Company’s failure to implement or otherwise achieve the benefits of its
proposed business initiatives and plans; acceptance of the Company's current and future
products and services in the marketplace, including the scope and timing of the market
acceptance of the Company’s PURE Control® and PURE ® Hard Surface and the Company’s
ability to convert successful evaluations into customer orders; the ability of the Company to
develop effective new products and receive required regulatory approvals for such products,
including the required data and regulatory approvals required to use its SDC-based
technology as a direct food contact processing aid in Raw Meat Processing; competitive
factors; dependence upon third-party vendors, including to manufacture its products; and
other risks detailed in the Company's periodic report filings with the Securities and Exchange
Commission (the SEC), including its Form 10-K for the fiscal year ended July 31, 2015 and its
Form 10-Q for the fiscal third quarter ended April 30, 2016. You should not place undue
reliance on these forward-looking statements, which speak only as of the date of this
presentation. By making these forward-looking statements, the Company undertakes no
obligation to update these statements for revisions or changes after the date of this
presentation.
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Problem: Foodborne Illness Outbreaks on the Rise
Listeria Prompts Recall of 42
Brands of Frozen Fruits & Veggies
Chipotle Store Closed For Second Day on Norovirus Fears
Dole Withdraws Packaged Salads After Listeria Outbreak
Spreads to Six States, Killing 1 Person
DOJ Investigating Blue Bell Creameries Response
to Listeria Contamination
Chipotle Sales Plunge as Troubled Chain
Gets Federal Subpoena
28 Years for Salmonella: Peanut Exec.
Gets Groundbreaking Sentence
Foster Farms Salmonella Outbreak Expands
3
Additional Market Drivers
Increasing Regulatory Requirements
Food Safety Modernization Act
• Preventive controls implementation
• Increased verification/validation
USDA Salmonella Action Plan
25+% of raw poultry sold to consumers is contaminated
• Today
with Salmonella
• New ‘maximum acceptable’ standard reduced to 15%
• USDA est. 63% of plants are presently out of compliance
Dept. of Justice and FDA
• Recently increased efforts to conduct criminal investigations in
foodborne illness outbreaks
4
Revolutionizing Food Safety
The FDA says the US food supply is among the safest in the world –
yet 1 in 6 Americans are sickened each year. That’s 48 million cases
of foodborne illness annually – ranging from mild discomfort to
life-threatening illness (3,000 deaths a year)
PURE Control® processing aids and PURE® Hard Surface disinfectant
eliminate the ‘bad bugs’ (including E. coli, Salmonella, Listeria,
Campylobacter and Norovirus) that exist
• In our vulnerable food supply, and
• In foods contaminated while being processed and/or prepared
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SDC: Making Food Safer
Two SDC Food Safety Products in the Market
Superior, broad spectrum, non-toxic antimicrobial disinfectant and
processing aids based on patented SDC (silver dihydrogen citrate)
PURE®
Hard Surface
PURE
Control®
•
•
FDA approved for direct
food contact
- Fresh Produce
Processing
- Raw Poultry
Processing
Testing validates
dramatic reductions in
most persistent
pathogens vs. the
competition
•
•
EPA registered for
disinfecting surfaces
that come in contact
with food. First new EPA
registration in 30 years.
Testing: 90%+
improvement in
pathogen reduction on
surfaces vs. incumbent
products
Solutions For
Growing Needs
•
Food processing, retail
and foodservice
•
Rising concerns
- Illness outbreaks
- Product recalls
- Brand protection
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New SDC Use: Direct Food Contact
Applied Directly onto Food During Processing
New Focus
• New FDA and USDA Approvals
• Produce Processing and Poultry Processing
New Market
• Food Processing Aids
New Product
• PURE Control
New Opportunity
• Revenue Target 10+% of $650 Million US Market
Higher Margins
• High 40%
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Investment Opportunity
SDC Disruptive Technology
•
Commercializing superior food safety solutions to the food industry
Multiple Large Markets
•
•
PURE Control® - $1.0B+ market in US Food Processing Aids for Produce, Poultry, Meats
• Commercialization for Produce Processing and Poultry Processing underway
PURE® Hard Surface - $1.5 B - $2.0B market for EPA approved US Foodservice and Food
Manufacturing
® and other restaurant chains
Sales
to
food
processors/manufacturers,
SUBWAY
•
Customers With Unmet Needs
•
•
PURE Control - Food Processors/Manufacturers
PURE Hard Surface - Food Processors/Manufacturers, Restaurant Chains
Competitive Barriers
•
•
12 US Patents (extending to 2030)
Unique EPA Registration and FDA Approvals
* SUBWAY® is a registered trademark of Doctor’s Associates, Inc.
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Strategic Objective
$2.5 Billion Total Addressable
US Market Opportunity

$1.0+ B: Direct Food Contact
processing aids used in Produce,
Poultry, Meat Processing

$1.5 - $2.0 B: Surface
disinfectants, cleaners used in
restaurants (560,000 stores) and
food manufacturers/processors
(116,000 facilities)
$250 Million
Revenue Target

Capture significant (10+%)
market share and achieve
$250+ million revenues (fiveyear goal) as the most
effective, unique, disruptive
& non toxic technology for
enhanced food safety
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Experienced Leadership Team
Dave Pfanzelter, Chairman
• Former Senior VP, Kellogg Company; President, Kellogg’s Specialty Channels & President, Kellogg
•
Canada
Director SUBWAY® Restaurants, Director Wrigley advisory board
Hank Lambert, President and CEO
• 35+ years food industry/consumer products/food safety experience as executive driving
revenues/earnings with Heublein, RJ Reynolds, Nabisco, Pinnacle Foods, Underwriters
Laboratories
Mark Elliott, VP Finance
• 10+ years of financial accounting and management leadership as Controller for PURE
Cliff Wechsler, EVP Sales
• 30+ years sales leadership in foodservice at Kraft Foods
Tom Myers, EVP Technical Services
• 40+ years marketing and R&D leadership in food science and processing industries
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10
Board of Directors
Dave Pfanzelter, Chairman
Hank Lambert, President and CEO
David Theno, Jr. Ph.D., Strategic Food Safety Advisor
•
CEO, Gray Dog Partners, Inc., consulting firm specializing in food safety, manufacturing,
restaurant operations, supply chain management, strategic planning and facility design. Former
VP, Food Safety for Jack in the Box
Bill Otis
•
Executive Vice President - Operations Packaged Meats Division, Smithfield Foods, Inc.
Gary Cohee
•
President and CEO, PMB Securities Corp.
Tom Lee, CPA
•
Chairman and CEO of Swabplus, Inc.
Scientific Advisory Board
James L. Marsden, Ph.D. – Chairman, PURE Scientific Advisory Board
• Executive Director of Food Safety at Chipotle Mexican Grill
• Emeritus Distinguished Professor of Food Safety and Security, Kansas State University
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11
PURE Control
®
Enhanced Food Safety for an Unsolved Problem –
Persistence of Pathogens on Processed Produce and Poultry
•
PURE Control is applied directly onto fresh produce or raw poultry
during processing reducing potentially deadly pathogens in our food
supply, including E. coli, Salmonella, Listeria and Campylobacter
•
PURE Control – a pathogen solution with superior effectiveness and
lower toxicity than any on the market today
•
Nothing will totally eliminate foodborne illness (or those pathogens)
but PURE Control is the new, leading-edge solution for the food
industry to meet this challenge
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PURE Control Commercialization
FDA Approved, PURE Control is a Proven, Leading-Edge,
Non-Toxic Food Safety Solution with Superior Efficacy and
Safety
Push / Pull
Marketing
• Push – direct sales to processors, retailers, distributors
• Pull – retailers and restaurant chains specify product
to their produce and poultry suppliers
Targeting
Processors
• Already using PURE Hard Surface for environmental
plant & equipment sanitation
• Industry leaders
• With known pathogen issues
Goal
• Capture significant market share – at least 10+% of
combined $650+ million US produce ($300m) & poultry
($350m) processing aids market within 3-5 years
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Direct Food Contact - Produce
Initial target customers for PURE Control for
Produce Processing include:
•
•
•
•
•
•
Taylor Farms
Ready Pac Foods, Inc.
Simplot Food Group
Fresh Express
Dole Food Co., Inc.
Reser’s Fine Foods
First user (a leading Produce Processor
already using PURE Hard Surface):
• Is completing validation and optimization testing
in its pilot plant this fiscal quarter;
•
Using as a new processing step for added protection
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Produce – Dramatic Pathogen Reductions
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Direct Food Contact – Poultry
USDA Approved for Pre-OLR and Post-Chill Applications
USDA Approval for OLR Pending Plant Trials (Est. Q3/Q4 2016)
Poultry Processing Aids: $350+ million annual US market.
Top six processors control nearly 50% of that market.
Initial target customers for Poultry Processing
will include:
•
•
•
•
•
•
•
Tyson Foods
Pilgrim’s Pride
Perdue Farms
Foster Farms
Wayne Farms
Koch Foods
Amick Farms
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Poultry – Dramatic Salmonella Reductions
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The PURE Control Advantage –
Produce and Poultry Processing
Superior
Performance
•
•
Poultry: Potential to
reduce Salmonella to
below detection levels
Produce: 100-fold
pathogen reduction
over current practices
(E.coli, Salmonella,
Listeria)
•
Poultry: Neutral to
positive impact on yield
•
No organoleptic issues
Superior
Superior
Product
Product
•
Easier to handle &
dilute
•
Non-corrosive to
processing equipment
•
Lowest toxicity – does
not create noxious
fumes
•
User & environment
friendly
•
Mitigates bacterial
resistance
Superior
Brand Protection
•
For processors,
retailers, restaurant
chains
•
Risk management
•
Mitigating scrutiny,
liability and financial
penalties
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Future Commercialization – Meats
Testing by PURE of SDC as an Intervention for Salmonella and
E. Coli in the Processing of Beef & Pork (A $400+ Million US
Market) Ongoing in Calendar 2016
• Pending successful test results, PURE estimates it will file for
FDA approval for Meats Processing late 2016
• After the FDA’s mandatory 120-day review period and receipt of
that approval it will file for USDA approval
• The Company would then expect to begin commercialization
for US Meats Processing late in the first half of calendar ’17
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PURE Hard Surface
Processors / Manufacturers
Applied to Plant and Equipment Surfaces; Environmental Misting Replaces Less Effective, Toxic Legacy Products
Growing Adoption
• 25+ national
food
processors/
manufacturers
• Superior
Listeria
eradication
Sales Pipeline
• 45+ national
companies
• $20-$30 million
revenue
potential
Customers
• Bakeries
• Ready To Eat
Foods
• Pet Foods
• Tortillas
• Dairy
• Meats, Poultry,
and Produce
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PURE Hard Surface – Restaurant Chains
Applied to Surfaces Which Come in Contact With Food; Replaces Less Effective,
Toxic Legacy Products; Uniquely Effective for Norovirus Elimination/Prevention
Other National
Restaurant Chains
• Approved Supplier to
SUBWAY® Restaurants*
• Franchise-by-franchise
sales ongoing to 27,000
US stores
• Adopted by 2 casual
dining and 2 QSRs to
combat Norovirus
• 4 additional chains
evaluating
• Orders from 17 regions /
7,100 stores / 25%
penetration
*SUBWAY® is a registered trademark of Doctor’s Associates, Inc.
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Overview: Food Safety Market Strategy
Currently Approved
Registration
Category
•
Definition
Target
Segment
•
Hard Surface
Disinfectant/Sanitizer
No-rinse on food contact
surfaces
Incidental food contact with
adequate drainage
•
•
Food Service /
Manufacturing / Processing
•
•
•
•
Foodservice facilities and
food prep equip.
Processing plant and
equipment
Hard sided storage bins,
tanks, silos, etc.
Clean-in-place systems: lines,
tanks, etc.
Addressable US Market
$1.5 - $2B
Future
Processing Aid/
Direct Food Contact
USDA Approval
Food Additive,
Preservative
Processing Aid/
Direct Food Contact
FDA Approved
Food Contact Surfaces:
Current EPA Registration
•
Pending Approval
Direct food contact as
processing aid
Present in finished
product in insignificant
levels and performs no
function in the finished
goods
•
•
Food Processing
•
•
Produce spray and dip
with kill claims
Poultry carcass and
parts spray and dip with
kill claims
{
Direct food contact as
processing aid
Present in finished
product in insignificant
levels and performs no
function in the finished
goods
Food Processing
•
•
>$1B
Poultry carcass and
parts spray and dip with
kill claims
Beef and pork carcass
and parts wash with kill
claims
}
• Food additive acting
as preservative
• Added to extend
shelf life
• Requires labeling
Food Processing /
Packaging
• Shelf life
enhancement
• Packaged produce
• Packaged meats and
poultry
TBD
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Licensing Platform Technology
Out-License to Partners in Non-Food Markets
Current non-exclusive licensees include:
Brenntag
• Personal care
products
outside of the
United States
• Institutional,
janitorial,
sanitation,
med. facilities,
cruise lines
• Disinfection of
dental rinse
water for
patients
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Financial Overview
$8 million equity financing completed in calendar
Q4 ’15 provides adequate working capital to:
• Accelerate commercialization of SDC as a food safety solution
• Support operations into calendar Q2 ’17
Common stock (as of 4/30/16)
• 61 Million Primary
• 71 Million Fully Diluted
 No long-term debt
 No preferred stock
Nine Months Ended
April 30, 2016
Net Product Sales
$
765,000
Net Loss Per Share
$
(0.25)
Cash
$ 5,405,000
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Milestones for Success (Calendar 2016)
PURE Control
• Fresh Produce Processing - product launch; market penetration
• Raw Poultry Processing – product launch for pre-OLR and post chill uses;
est. calendar Q3/Q4 ’16 receipt of additional USDA approval; market
penetration
• Beef and Pork Processing – complete testing and file for regulatory approvals
from FDA and USDA
PURE Hard Surface
• Continue building commercial traction
• Supply 5+ national restaurant chains, and
35+ national food manufacturers / processors
Continued Licensing
• PURE products distribution, and
• SDC technology for non-food applications
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Revolutionizing
Food Safety With SDC
One of the Most
Powerful Antimicrobials
in the Industry
PURE Bioscience, Inc.
Hank Lambert, CEO
1725 Gillespie Way, El Cajon, CA 92020
(619) 596-8600 x 103 www.purebio.com
Investor Contact
Terri MacInnis, VP of IR, Bibicoff + MacInnis, Inc.
(818) 379-8500 [email protected]
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