SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: June 29, 2005
PURE BIOSCIENCE
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(Exact name of registrant as specified in its charter)
California 33-0530289
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1725 Gillespie Way, El Cajon, California 92020
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(Address of principal executive offices)(Zip Code)
(619) 596 8600
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note on Amendment
The Current Report on Form 8-K dated June 3, 2005 is hereby amended to file Item
9.01 b. Pro Forma Financial Information
Item 9.01 Financial Information and Exhibits
b. Pro Forma Financial Information: Sale of Water Treatment Division
In May 2005, PURE Bioscience sold the assets of its water treatment division to
Maryland-based Innovative Medical Services, LLC for $2,375,000. At closing, PURE
received $1,950,000 in cash. In June, PURE received $225,000, one of two
post-closing payments. An additional $200,000 is due within 90 days of closing.
The sale of the water treatment division assets to Innovative Medical Services,
LLC will be a transaction taxable for United States federal and California
income tax purposes. The Company will recognize taxable income equal to the
amount realized on the sale in excess of the tax basis in the assets sold. The
amount realized on the sale will consist of the cash received in exchange for
the assets sold, plus the amount of related liabilities assumed by Innovative
Medical Services, LLC. The realized gain to the Company on the sale is
approximately $2,178,000.
Although the sale of the water treatment division assets will result in a
taxable gain, a portion of the taxable gain will be offset to the extent of
current year losses from operations plus available net operating loss carry
forwards, as currently reflected on our consolidated federal and California
income tax returns. The taxable gain will differ from the gain to be reported in
the PURE Bioscience financial statements due to temporary tax differences and
certain other differences between the tax laws and generally accepted accounting
principles.
We believe we will be able to apply our approximately $12.1 million tax loss
carry forward without limitation against the taxable gain from the sale of the
water treatment division assets. However, due to the limitation of net operating
loss carry forwards under the federal alternative minimum tax system, a portion
of the taxable gain reduced by our net operating loss carry forwards is subject
to the federal alternative minimum income tax. Also, California net operating
loss carry forwards are subject to more limitations than the federal tax laws
provide. The availability and amount of net operating loss carry forwards are
subject to audit and adjustment by the Internal Revenue Service. In the event
that the Internal Revenue Service adjusts the net operating loss carry forwards,
we may incur an increased tax liability. The Company estimates its federal and
California tax liability resulting from the sale to be approximately $60,000.
The following unaudited pro forma condensed consolidated financial statements
are based on the historical consolidated financial statements of PURE Bioscience
and subsidiaries, adjusted to give effect to the disposition of the water
treatment division
The unaudited pro forma consolidated balance sheets give effect to the
transaction as if it occurred on the date of the balance sheet. The cash
proceeds and resulting gain are included in the April 30, 2005 balance sheet.
The unaudited pro forma consolidated statements of operations for the nine
months ended April 30, 2005 give effect to the transaction as if it had occurred
as of the beginning of the fiscal year, August 1, 2004.
The pro forma consolidated financial information is presented for illustrative
purposes only, and is not necessarily indicative of the operating results or
financial position that would have occurred if all of the events as described
above had occurred on the first day of the respective periods presented, nor is
it necessarily indicative of our future operating results or financial position.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the historical consolidated financial statements for
PURE Bioscience.
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PRO FORMA CONSOLIDATED BALANCE SHEETS
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April 30
2005
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Adjusted for
Sale of Water
Division
Historical (May 2005) Pro forma
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ASSETS
Current Assets
Cash and cash equivalents $ 163,497 $ 2,175,000 (1) $ 2,338,497
Notes receivable -- 200,000 (1) 200,000
Other current assets 370,062 -- 370,062
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Total current assets 533,559 2,375,000 2,908,559
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Property, Plant and Equipment 124,350 -- 124,350
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Noncurrent Assets 2,345,886 -- 2,345,886
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Assets of the water division held for resale 251,557 (251,557)(1) --
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Total assets $ 3,255,352 $ 2,123,443 $ 5,378,795
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LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities
Loans from shareholders $ 660,000 $ -- $ 660,000
Income taxes payable -- 60,000 (1) 60,000
Other current liabilities 991,784 -- 991,784
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Total current liabilities 1,651,784 60,000 1,711,784
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Liabilities of the water division held for resale 46,300 (46,300)(1) --
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Stockholders' Equity
Class A common stock, no par value 18,375,336 -- 18,375,336
Warrants 883,268 -- 883,268
Accumulated deficit (17,701,336) 2,109,743 (1) (15,591,593)
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Total stockholders' equity 1,557,268 2,109,743 3,667,011
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Total liabilities and stockholders' equity $ 3,255,352 $ 2,123,443 $ 5,378,795
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(1) Gives effect of the net cash proceeds, gain on disposition, and related
taxes as a result of the sale of the water treatment division as if it
occurred on August 1, 2004. The cash amount reflects the $2,175,000 million
payment from Innovative Medical Services, LLC with the remaining $200,000
shown as notes receivable. The gain reflected in accumulated deficit is
composed primarily of the cash proceeds, net of the net assets sold, direct
costs, and taxes payable less liabilities assumed by the purchaser.
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PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
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For the Nine Months Ended
April 30
2005
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Adjusted for
Sale of Water
Division
Historical (May 2005) Pro forma
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Net revenues $ 117,818 $ -- $ 117,818
Cost of sales 45,393 -- 45,393
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Gross profit 72,425 -- 72,425
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Operating costs 1,986,770 -- 1,986,770
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Loss from operations (1,914,345) -- (1,914,345)
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Other income (expense) (19,156) -- (19,156)
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Loss from continuing operations $(1,933,501) $ -- $(1,933,501)
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Net loss per common share, basic and diluted
Continuing operations $ (0.12) $ -- $ (0.12)
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The Water Treatment Division has been reported as discontinued operations
beginning in October of 2003 when the Company made the decision to dispose of
the segment. Because of this the condensed pro forma statements show no effect
resulting from the sale.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PURE BIOSCIENCE
Dated: June 29, 2005
/s/ MICHAEL L. KRALL
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Michael L. Krall, Chief Executive Officer
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