PURE Bioscience (PURE, Financial) filed Quarterly Report for the period ended 2009-01-31.
Innovative Medical Services is engaged principally in the business of manufacturing and marketing the Fillmaster a water purification measuring and dispensing apparatus used in pharmacies to reconstitute oral antibiotic suspensions. Innovative Medical Services has also entered the consumer market with Nutripure a residential drinking water system. The company markets for both products proprietary filters that require changing at intervals of nine to twelve months or whenever indicated by the systems' water quality monitors. PURE Bioscience has a market cap of $64.1 million; its shares were traded at around $2.15 with and P/S ratio of 43.1. PURE Bioscience had an annual average earning growth of 5.8% over the past 5 years.
Legal fees charged to general and administrative expense, primarily related to the development of contracts and protection of our intellectual property, increased by $64,100 compared to the same period in the prior fiscal year, while insurance costs increased by $64,700. Other general and administrative expenditures such as depreciation, board of director fees and other professional services also increased during the Second Quarter compared with the same period of the prior fiscal year, however these increases were offset by a decline of $311,400 in stock option expense charged to general and administrative expense. During the three months ended January 31, 2008 we issued an option to purchase up to 100,000 shares of our common stock to a new director, for which $351,000 of expense was recorded in the period. We recognized employee and director stock option non-cash expense in general and administrative expenses for the Second Quarter of $64,000, and for the three months ended January 31, 2008 of $375,800.
General and administrative payroll expense increased by $215,000 year over year due to new hires and salary increases, and accounting and legal fees increased by $269,000. Additionally, insurance, depreciation, rent, and board of director fees accounted for $213,400 of the increase in general and administrative expense for the six months ended January 31, 2009 compared with the six months ended January 31, 2008. These increases were partially offset by a decline of $279,200 in stock option expense for the six month period ended January 31, 2009 compared with the same period of the prior fiscal year. We recognized employee and director stock option non-cash expense in general and administrative expenses for the six months ended January 31, 2009 of $121,400, and for the six months ended January 31, 2008 of $400,700.
LIQUIDITY AND CAPITAL RESOURCES From inception through the present, we have financed our operations primarily through sales of our equity securities, through lines of credit and the issuance of debentures and in May 2005 by the sale of our Water Treatment Division. At January 31, 2009, we had cash, cash equivalents and short-term investments of $4,067,400, a decline of $2,564,900 from July 31, 2008, and no long-term debt. Cash and cash equivalents at January 31, 2009 were $519,400, a decrease for the six month period from July 31, 2008 of $1,505,000, while short-term investments decreased over the same period by $1,059,900, to $3,548,000.
During the six months ended January 31, 2009, cash provided by investing activities was $952,900. Of this amount, a net amount (cash sales less cash purchases) of $1,059,200 was provided by short-term investments. In addition, during the six months ended January 31, 2009 we invested $39,700 in patents, however the capitalized value of our patents at January 31, 2009 declined by $45,800 from July 31, 2008 due to an excess of patent amortization over capitalization. Total property, plant and equipment at January 31, 2009 of $968,400 declined by $66,400 from July 31, 2008, due to an excess of depreciation over new asset acquisitions. Our purchases of property, plant and equipment for the six month period ended January 31, 2009 were $66,600.
Total cash inflows from financing activities for the six months ended January 31, 2009 were $894,200, all of which was derived from proceeds from the exercise of stock options and warrants. In August 2008, we received an aggregate of $150,000 from the exercise of non-employee options to purchase 50,000 shares of our common stock at an exercise price of $3.00, and received $15,100 from the exercise of options to purchase 28,450 shares of our common stock by two officers, at an average exercise price of $0.53. In December 2008, we received an aggregate of $631,600 from a director for the exercise of options to purchase 339,800 shares of our common stock at an average exercise price of $1.86. In January 2009, we received $79,500 from a director for the exercise of options to purchase 150,000 shares of our common stock at an exercise price of $0.53; and received $18,000 from the same director for the exercise of common stock warrants to purchase 36,000 shares of our common stock at an exercise price of $0.50.
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Innovative Medical Services is engaged principally in the business of manufacturing and marketing the Fillmaster a water purification measuring and dispensing apparatus used in pharmacies to reconstitute oral antibiotic suspensions. Innovative Medical Services has also entered the consumer market with Nutripure a residential drinking water system. The company markets for both products proprietary filters that require changing at intervals of nine to twelve months or whenever indicated by the systems' water quality monitors. PURE Bioscience has a market cap of $64.1 million; its shares were traded at around $2.15 with and P/S ratio of 43.1. PURE Bioscience had an annual average earning growth of 5.8% over the past 5 years.
Highlight of Business Operations:
Operating Costs Operating costs increased by $818,300, from $1,680,000 in the three months ended January 31, 2008, to $2,498,300 in the Second Quarter. Within these aggregate operating costs, selling expenses declined by $20,700 to $185,900 in the Second Quarter compared with the same period in the prior fiscal year. The decrease in selling expenses is primarily due to $91,400 of additional salary expense in the Second Quarter being more than offset by $115,400 of consulting fees in the three month period ended January 31, 2008.Legal fees charged to general and administrative expense, primarily related to the development of contracts and protection of our intellectual property, increased by $64,100 compared to the same period in the prior fiscal year, while insurance costs increased by $64,700. Other general and administrative expenditures such as depreciation, board of director fees and other professional services also increased during the Second Quarter compared with the same period of the prior fiscal year, however these increases were offset by a decline of $311,400 in stock option expense charged to general and administrative expense. During the three months ended January 31, 2008 we issued an option to purchase up to 100,000 shares of our common stock to a new director, for which $351,000 of expense was recorded in the period. We recognized employee and director stock option non-cash expense in general and administrative expenses for the Second Quarter of $64,000, and for the three months ended January 31, 2008 of $375,800.
General and administrative payroll expense increased by $215,000 year over year due to new hires and salary increases, and accounting and legal fees increased by $269,000. Additionally, insurance, depreciation, rent, and board of director fees accounted for $213,400 of the increase in general and administrative expense for the six months ended January 31, 2009 compared with the six months ended January 31, 2008. These increases were partially offset by a decline of $279,200 in stock option expense for the six month period ended January 31, 2009 compared with the same period of the prior fiscal year. We recognized employee and director stock option non-cash expense in general and administrative expenses for the six months ended January 31, 2009 of $121,400, and for the six months ended January 31, 2008 of $400,700.
LIQUIDITY AND CAPITAL RESOURCES From inception through the present, we have financed our operations primarily through sales of our equity securities, through lines of credit and the issuance of debentures and in May 2005 by the sale of our Water Treatment Division. At January 31, 2009, we had cash, cash equivalents and short-term investments of $4,067,400, a decline of $2,564,900 from July 31, 2008, and no long-term debt. Cash and cash equivalents at January 31, 2009 were $519,400, a decrease for the six month period from July 31, 2008 of $1,505,000, while short-term investments decreased over the same period by $1,059,900, to $3,548,000.
During the six months ended January 31, 2009, cash provided by investing activities was $952,900. Of this amount, a net amount (cash sales less cash purchases) of $1,059,200 was provided by short-term investments. In addition, during the six months ended January 31, 2009 we invested $39,700 in patents, however the capitalized value of our patents at January 31, 2009 declined by $45,800 from July 31, 2008 due to an excess of patent amortization over capitalization. Total property, plant and equipment at January 31, 2009 of $968,400 declined by $66,400 from July 31, 2008, due to an excess of depreciation over new asset acquisitions. Our purchases of property, plant and equipment for the six month period ended January 31, 2009 were $66,600.
Total cash inflows from financing activities for the six months ended January 31, 2009 were $894,200, all of which was derived from proceeds from the exercise of stock options and warrants. In August 2008, we received an aggregate of $150,000 from the exercise of non-employee options to purchase 50,000 shares of our common stock at an exercise price of $3.00, and received $15,100 from the exercise of options to purchase 28,450 shares of our common stock by two officers, at an average exercise price of $0.53. In December 2008, we received an aggregate of $631,600 from a director for the exercise of options to purchase 339,800 shares of our common stock at an average exercise price of $1.86. In January 2009, we received $79,500 from a director for the exercise of options to purchase 150,000 shares of our common stock at an exercise price of $0.53; and received $18,000 from the same director for the exercise of common stock warrants to purchase 36,000 shares of our common stock at an exercise price of $0.50.
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