UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. )
| Filed
by the Registrant ☒ |
Filed
by a Party other than the Registrant ☐ |
Check
the appropriate box:
| ☐ |
Preliminary Proxy Statement |
| ☐ |
Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2)) |
| ☒ |
Definitive Proxy Statement |
| ☐ |
Definitive Additional Materials |
| ☐ |
Soliciting Material under § 240.14a-12 |
PURE
Bioscience, Inc.
(Name
of Registrant as Specified In Its Charter)
Not
Applicable
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check all boxes that apply):
| ☒ |
No fee required. |
| ☐ |
Fee paid previously with preliminary materials. |
| ☐ |
Fee computed on table in exhibit required by Item 25(b)
per Exchange Act Rules 14a-6(i)(1) and 0-11. |
PURE
BIOSCIENCE, INC.
NOTICE
OF 2023 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON February 8, 2023
TO
OUR STOCKHOLDERS:
December
23, 2022
Dear
Stockholder:
You
are cordially invited to attend this year’s annual meeting of stockholders of PURE Bioscience, Inc. on Wednesday, February 8, 2023
at 10:30 a.m. local time. The meeting will be held at our corporate offices at 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730.
We
are pleased to take advantage of the rules established by the Securities and Exchange Commission (the “SEC”) that allow companies
to furnish proxy materials primarily over the internet. We believe that this will allow us to promptly provide proxy materials to you,
while lowering the costs of distribution and reducing the environmental impact of our annual meeting.
On
December 23, 2022, we mailed to our stockholders (other than those who previously requested electronic or paper delivery) a Notice of
Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy materials, including
our Proxy Statement and Annual Report to Stockholders for the fiscal year ended July 31, 2022, over the internet. The Notice also provides
instructions on how to vote online or by telephone and includes instructions on how you can receive a paper copy of the proxy materials
by mail. If you receive your proxy materials by mail, the Annual Report, the Notice of 2023 Annual Meeting of Stockholders, the Proxy
Statement, and proxy card will be enclosed.
The
matters to be acted upon are described in the Notice of 2023 Annual Meeting of Stockholders and Proxy Statement. Following the formal
business of the meeting, we will report on our operations and respond to questions from stockholders.
Whether
or not you plan to attend the meeting, your vote is very important and we encourage you to vote promptly. You may vote by proxy over
the internet or by telephone, or, if you received paper copies of the proxy materials by mail, you can also vote by mail by following
the instructions on your proxy card. If you attend the meeting you will have the right to revoke your proxy and vote your shares in person.
If you hold your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from
your brokerage firm, bank or other nominee to vote your shares.
We
look forward to seeing you at the annual meeting.
| Sincerely yours, |
|
| |
|
| /s/ Tom
Y. Lee |
|
| Chief Executive Officer |
|
PURE
BIOSCIENCE, INC.
NOTICE
OF 2023 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
FEBRUARY
8, 2023
TO
OUR STOCKHOLDERS:
Our
2023 annual meeting of stockholders (the “Annual Meeting”) of PURE Bioscience, Inc. will be held at our corporate offices
at 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730, on February 8, 2023 at 10:30 a.m. local time, for the following purposes:
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1. |
To elect seven directors
to hold office until the next annual meeting and until their respective successors are elected and qualified; |
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|
|
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2. |
To ratify the appointment
of Weinberg & Company, P.A. as our independent registered public accounting firm for the fiscal year ending July 31, 2023; and |
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|
|
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3. |
To approve, on a non-binding
advisory basis, the compensation of our named executive officers, during the fiscal year ended July 31, 2022. |
To
transact such other business as may properly be brought before the meeting or any adjournment or postponement thereof.
Our
Board of Directors recommends a vote FOR each of the seven director nominees and FOR proposals 2 and 3 listed above. Stockholders
of record at the close of business on December 15, 2022 are entitled to notice of, and to vote on, all matters at the Annual Meeting
and any reconvened meeting following any adjournments or postponements thereof. For ten days prior to the meeting, a complete list of
stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder, for any purpose relating to
the meeting, during ordinary business hours at our principal offices located at 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730.
All
stockholders are invited to attend the Annual Meeting. You are urged to vote or submit your proxy as soon as possible so that your shares
can be voted at the Annual Meeting in accordance with your instructions. Telephone and internet voting are available. For specific instructions
on voting, please refer to the instructions in the Notice of Internet Availability of Proxy Materials or the proxy card. If you hold
your shares through an account with a brokerage firm, bank or other nominee, please follow the instructions you receive from them to
vote your shares.
IMPORTANT
NOTICE REGARDING AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING: Our Annual Report on Form 10-K, Notice and Proxy Statement
are available electronically at www.proxydocs.com.
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By Order of the Board of Directors |
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|
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/s/ Tom
Y. Lee |
| |
Chief Executive Officer |
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|
| December 23, 2022 |
|
TABLE
OF CONTENTS
PURE
BIOSCIENCE, INC.
9669
Hermosa Avenue
Rancho
Cucamonga, CA 91730
PROXY
STATEMENT FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON FEBRUARY 8, 2023
GENERAL
INFORMATION
The
accompanying proxy is solicited by the Board of Directors of PURE Bioscience, Inc. (the “Board” or “Board of Directors”)
to be voted at the 2023 Annual Meeting of Stockholders (the “Meeting” or “Annual Meeting”) to be held on Wednesday,
February 8, 2023 at our corporate offices at 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730 at 10:30 a.m., local time, and any adjournments
or postponements thereof. This “Proxy Statement” and the accompanying proxy are being made available to our stockholders
on or about December 23, 2022. References in this Proxy Statement to “the Company,” “we,” “PURE,”
“our,” and “us” are to PURE Bioscience, Inc.
In
accordance with the rules of the Securities and Exchange Commission (the “SEC”), we are permitted to furnish proxy materials,
including this Proxy Statement and our Annual Report for the fiscal year ended July 31, 2022 (the “Annual Report”) to stockholders
by providing access to these documents through the internet instead of mailing printed copies. Most stockholders will not receive printed
copies of the proxy materials unless requested. Instead, our Notice of Internet Availability of Proxy Materials provides instructions
on how to access and review the proxy materials on the internet. The Notice of Internet Availability of Proxy Materials also provides
instructions on how to cast your vote via the internet or by telephone. If you would like to receive a printed or email copy of our proxy
materials, please follow the instructions for requesting the materials in the Notice of Internet Availability of Proxy Materials.
Record
Date
Holders
of record of our shares of Common Stock, our only class of issued and outstanding voting securities (the “Common Stock”),
at the close of business on December 15, 2022 (the “Record Date”) are entitled to notice of and to vote at the Annual Meeting.
On December 15, 2022, 111,356,485 shares of our Common Stock were issued and outstanding.
Broker
Non-Votes
“Broker
non-votes” are shares held in street name by brokers or nominees who are present in person or represented by proxy, but which are
not voted on a particular matter because the brokers or nominees do not have discretionary authority with respect to that proposal and
they have not received voting instructions from the beneficial owner. Under the rules that govern brokers, brokers have the discretion
to vote on routine matters, but not on non-routine matters. Routine matters include the ratification of the appointment of the Company’s
independent registered public accountants. The remaining proposals to be considered at the Annual Meeting are considered to be non-routine
matters, including the election of directors, and the non-binding advisory vote on the compensation of our named executive officers.
As a result, if you do not provide your broker or nominee with voting instructions on these non-routine matters your shares will
not be voted on these proposals.
Quorum
The
presence, in person or by proxy, of the holders of a majority of the outstanding shares of Common Stock entitled to vote at the Annual
Meeting is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Votes for and against, abstentions
and “broker non-votes” will each be counted as present for purposes of determining the presence of a quorum.
The
Annual Meeting may be adjourned from time to time and at any reconvened meeting, action with respect to the matters specified in this
notice may be taken without further notice to stockholders except as required by applicable law and our charter documents.
Stockholders
of Record
You
are a “stockholder of record” if, on December 15, 2022, your shares are registered directly in your name with our transfer
agent, Transfer Online, Inc. As a stockholder of record, you have the right to grant your voting proxy directly to the proxies designated
by the Company or to vote in person at the Annual Meeting. As of the record date, we had 219 holders of record.
Shares
Held in Street Name
You
are deemed to beneficially own your shares in “street name” if your shares are held in an account at a brokerage firm, bank,
broker-dealer, trust or other similar organization. If this is the case, you will receive a separate voting instruction form with this
Proxy Statement from such organization. As the beneficial owner, you have the right to direct your broker, bank, trustee, or nominee
how to vote your shares, and you are also invited to virtually attend the Annual Meeting. If you hold your shares in street name and
do not provide voting instructions to your broker, bank, trustee or nominee, your shares will not be voted on any proposals on which
such party does not have discretionary authority to vote (a “broker non-vote”), as further described above under the heading
“Broker Non-Votes.”
Please
note that if your shares are held of record by a broker, bank, trustee or nominee and you wish to vote at the Annual Meeting, you will
not be permitted to vote in person unless you first obtain a proxy issued in your name from the record holder.
Voting
Matters
Stockholders
are entitled to cast one vote per share of Common Stock on each matter presented for consideration by the stockholders. A list of stockholders
entitled to vote at the Annual Meeting will be available for examination by any stockholder for a proper purpose during normal business
hours at the executive offices of the Company for a period of at least 10 days preceding the day of the Annual Meeting.
There
are three proposals scheduled to be voted on at the Annual Meeting:
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1. |
To elect seven directors
to hold office until the next annual meeting and until their respective successors are elected and qualified; |
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2. |
To ratify the appointment
of Weinberg & Company, P.A. as our independent registered public accounting firm for the fiscal year ending July 31, 2023; and |
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|
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3. |
To approve, on a non-binding
advisory basis, the compensation of our named executive officers, during the fiscal year ended July 31, 2022. |
Our
Board of Directors recommends a vote FOR each of the seven director nominees and FOR proposals 2 and 3 listed above.
We
are currently unaware of any matters to be raised at the Annual Meeting other than those referred to in this Proxy Statement. If other
matters are properly presented at the Annual Meeting for consideration and you are a stockholder of record and have submitted your proxy,
the persons named in your proxy will have the discretion to vote on those matters for you.
Required
Vote
Assuming
a quorum is present, either in person or by proxy, the following vote is required for the proposals scheduled to be voted on at the Annual
Meeting:
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1. |
Election of Directors:
Directors will be elected by a plurality of the votes, which means the seven nominees who receive the greatest number of FOR
votes will be elected. If you hold your shares through a broker and you do not instruct the broker on how to vote on this proposal,
your broker will not have authority to vote your shares. Abstentions and “broker non-votes” will each be counted as present
for purposes of determining the presence of a quorum, but will not have any effect on the outcome of the proposal. |
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2. |
Ratification of Auditors:
The ratification of the appointment of Weinberg & Company, P.A. as our independent registered public accounting firm for the
fiscal year ending July 31, 2023 requires that a majority of the votes cast, whether in person or represented by proxy, are voted
FOR this proposal. Abstentions will be counted as present for purposes of determining the presence of a quorum, but will have
no effect on the outcome of the vote. |
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3. |
Executive Compensation:
The approval, on a non-binding advisory basis, of the compensation of our named executive officers requires that a majority of the
votes cast, whether in person or represented by proxy, are voted FOR this proposal. Abstentions and “broker non-votes”
will each be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of the
vote. |
Voting
Instructions
If
you are a stockholder of record, you can vote in the following ways:
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● |
By Internet:
By following the Internet voting instructions included in the Notice of Internet Availability of Proxy Materials or by following
the instructions on the proxy card at any time up until 11:59 p.m., Eastern Standard Time, on February 7, 2023. |
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● |
By Telephone:
By following the telephone voting instructions included in the Notice of Internet Availability of Proxy Materials or by following
the instructions on the proxy card at any time up until 11:59 p.m., Eastern Standard Time, on February 7, 2023. |
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By Mail:
You may vote by mail by marking, dating and signing your proxy card in accordance with the instructions on it and returning it by
mail in the pre-addressed reply envelope provided with the proxy materials. The proxy card must be received prior to the Annual Meeting. |
If
your shares are held in street name, please follow the separate voting instructions you receive from your broker, bank, trustee or other
nominee.
Proxies
All
shares represented by a proxy will be voted at the Annual Meeting, and where a stockholder specifies a choice with respect to any matter
to be acted upon, the shares will be voted in accordance with the specification so made. If a stockholder does not indicate a choice
on the proxy card, the shares will be voted in favor of the election of each of the nominees for director contained in this Proxy Statement
and in favor of each of the other proposals considered at the Annual Meeting.
If
your shares are held by a broker, bank or other stockholder of record, in nominee name or otherwise, exercising fiduciary powers (typically
referred to as being held in “street name”), you will receive a separate voting instruction form with your proxy materials.
Your broker may vote your shares on the proposal to ratify our independent auditors, but will not be permitted to vote your shares with
respect to the election of directors or on any of the other proposals unless you provide instructions as to how to vote your shares.
Please note that if your shares are held of record by a broker, bank or nominee and you wish to vote at the meeting, you will not be
permitted to vote in person unless you first obtain a proxy issued in your name from the record holder.
Multiple
Proxies
If
you receive more than one set of proxy materials it generally means you hold shares registered in multiple accounts. To ensure that all
your shares are voted, please submit proxies or voting instructions for all of your shares.
Proxy
Revocation Procedure
If
you are a stockholder of record, you may revoke your proxy: (i) by written notice of revocation mailed to and received by the Secretary
of the Company prior to the date of the Annual Meeting; (ii) voting again via the Internet or by telephone at a later time before the
closing of those voting facilities at 11:59 p.m. (Eastern Standard Time) on February 7, 2023; (iii) by executing and delivering to the
Secretary a proxy dated as of a later date than a previously executed and delivered proxy (provided, however, that such action must be
taken prior to 11:59 p.m. (Eastern Standard Time) on February 7, 2023); or (iv) by virtually attending the Annual Meeting and voting
via the virtual meeting platform. Attendance at the Annual Meeting will not in and of itself revoke a proxy.
Solicitation
Costs
The
Company will bear the expenses of calling and holding the Annual Meeting and the solicitation of proxies therefor. This Proxy Statement
and the accompanying materials, in addition to being mailed directly to stockholders, will be distributed through brokers, custodians,
nominees and other like parties to beneficial owners of shares of Common Stock. The Company will pay reasonable expenses incurred in
forwarding the proxy materials to the beneficial owners of shares and in obtaining the written instructions of such beneficial owners.
The Company may consider the engagement of a proxy solicitation firm. Our directors, officers and employees may also solicit proxies
by mail, telephone and personal contact, but they will not receive any additional compensation for these activities.
Voting
Results
We
will announce preliminary voting results at the Annual Meeting. We will report final results in a Form 8-K report filed with the SEC.
GOVERNANCE
OF OUR COMPANY
Overview
We
are committed to maintaining high standards of business conduct and corporate governance, which we believe are fundamental to the overall
success of our business, serving our stockholders well and maintaining our integrity in the marketplace. Our Corporate Governance Guidelines
and Code of Business Conduct and Ethics, together with our Certificate of Incorporation, Bylaws, as amended (the “Bylaws”)
and the charters of our Board Committees, form the basis for our corporate governance framework. As discussed below, our Board of Directors
has established two standing committees to assist it in fulfilling its responsibilities to the Company and its stockholders: the Audit
Committee and the Compensation Committee. The Board of Directors performs the functions typically assigned to a Nominating and Corporate
Governance Committee.
Corporate
Governance Guidelines
Our
Corporate Governance Guidelines are designed to ensure effective corporate governance of our Company. Our Corporate Governance Guidelines
cover topics including, but not limited to, director qualification criteria, director responsibilities, director compensation, director
orientation and continuing education, communications from stockholders to the Board, succession planning and the annual evaluations of
the Board and its Committees. Our Corporate Governance Guidelines are reviewed regularly by the Board and revised when appropriate. The
full text of our Corporate Governance Guidelines can be found in the “Corporate Governance” section of our website accessible
at www.purebio.com. A printed copy may also be obtained by any stockholder upon request to our Corporate Secretary.
Code
of Business Conduct and Ethics
We
have adopted a Code of Business Conduct and Ethics (the “Code of Conduct”) that applies to all of our employees, officers
and directors. This Code of Conduct constitutes a “code of ethics” as defined by the rules of the SEC. This Code of Conduct
also contains “whistle blower” procedures adopted by our Audit Committee regarding the receipt, retention and treatment of
complaints related to accounting, internal accounting controls or auditing matters and procedures for confidential anonymous employee
complaints related to questionable accounting or auditing matters. Copies of the Code of Conduct may be obtained free of charge from
our website, www.purebio.com. Any amendments to, or waivers from, a provision of our Code of Conduct that applies to any of our
executive officers will be posted on our website in accordance with the rules of the SEC. Other than as specifically referenced herein,
the information contained on, or that can be accessed through, our website is not a part of this Proxy Statement.
Director
Independence
We
are not currently listed on any national securities exchange or in an inter-dealer quotation system that has established a standard for
independence. However, in evaluating the independence of our members and the composition of the committees of our Board of Directors,
our Board utilizes the definition of “independence” as that term is defined by applicable listing standards of the NYSE American.
As of the date hereof, our Board consists of five members, three of whom are considered independent as that term is defined by applicable
listing standards of the NYSE American. Our independent directors include: Messrs. Chen and Rendall and Ms. Taylor.
Board
and Committee Attendance
During
the fiscal year ended July 31, 2022, the Board of Directors met five times and it took action by unanimous written consent twice. During
the fiscal year ended July 31, 2022 our Audit Committee met four times. Each of the directors attended 100% of the meetings of the Board
of Directors.
Director
Attendance at Annual Meeting
We
believe the annual meeting of stockholders provides a good opportunity for our directors to hear any feedback the stockholders may share
with the Company at the meeting. As a result, we encourage our directors to attend our annual meeting. We reimburse our directors for
the reasonable expenses incurred by them in attending the annual meeting.
Executive
Sessions
Executive
sessions of our independent directors are held at each regularly scheduled meeting of our Board and at other times as necessary and are
chaired by the Chairman of the Board. The Board’s policy is to hold executive sessions without the presence of management, including
our President and Chief Executive Officer and Chief Operating Officer, who are the only non-independent directors on the Board. Our Board
Committees also generally meet in executive session at the end of each committee meeting.
Board
Committees
Compensation
Committee. The Compensation Committee of the Board of Directors currently consists of Messrs. Chen (Chair) and Rendall and Ms. Taylor.
The Board by unanimous written consent has designated director nominees Robert Bartlett and Bernard Blotner to serve on the Compensation
Committee effective February 8, 2023. The functions of the Compensation Committee include the approval of the compensation offered to
our executive officers and recommending to the full Board of Directors the compensation to be offered to our directors, including our
Chairman. The Board has determined that Messrs. Chen and Rendall and Ms. Taylor are each an “independent director” under
the listing standards of the NYSE American. In addition, the members of the Compensation Committee qualify as a “non-employee directors”
for purposes of Rule 16b-3 under the Exchange Act and as an “outside director” for purposes of Section 162(m) of the Internal
Revenue Code of 1986, as amended. The Compensation Committee is governed by a written charter approved by the Board of Directors, a copy
of which is available on our website at www.purebio.com.
Audit
Committee. The Audit Committee of the Board of Directors, currently consists of Messrs. Chen (Chair) and Rendall and Ms. Taylor.
The Board by unanimous written consent has designated director nominees Robert Bartlett and Bernard Blotner to serve on the Audit Committee
effective February 8, 2023. The functions of the Audit Committee include the retention of our independent registered public accounting
firm, reviewing and approving the planned scope, proposed fee arrangements and results of the Company’s annual audit, reviewing
the adequacy of the Company’s accounting and financial controls and reviewing the independence of the Company’s independent
registered public accounting firm. The Board has determined that Messrs. Chen and Rendall and Ms. Taylor are “independent director”
under the listing standards of the NYSE American. The Board of Directors has also determined that Messrs. Chen and Rendall and Ms. Taylor
are each an “audit committee financial expert” within the applicable definition of the SEC. The Audit Committee is governed
by a written charter approved by the Board of Directors, a copy of which is available on our website at www.purebio.com.
Nominating
Committee. The Board has not established a Nominating Committee, and as a result performs the functions typically assigned to a Nominating
Committee, including the identification, recruitment and nomination of candidates for the Board and its committees, determining the structure,
composition and functioning of the Board and its committees including the reporting channels through which the Board receives information
and the quality and timeliness of the information, developing and recommending to the Board corporate governance guidelines applicable
to the Company and annually reviewing and recommending changes, as necessary or appropriate, overseeing the annual evaluation of the
Board’s effectiveness and performance.
Board
and Committee Effectiveness
The
Board and each of its Committees perform an annual self-assessment to evaluate their effectiveness in fulfilling their obligations. The
Board and Committee evaluations cover a wide range of topics, including, among others, the fulfillment of the Board and Committee responsibilities
identified in the Corporate Governance Guidelines and charters for each Committee.
Board
Leadership Structure
Our
Bylaws provide our Board with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer in
accordance with its determination that utilizing one or the other structure would be in the best interests of our company. At the current
time, Mr. Chen serves as our Chairman of the Board, and Mr. Lee serves as our Chief Executive Officer. Our Board believes our leadership
structure enhances the accountability of our Chief Executive Officer to the Board and encourages balanced decision making. In addition,
the Board believes that this structure provides an environment in which its independent directors are fully informed, have significant
input into the content of Board meetings and are able to provide objective and thoughtful oversight of management. Our Board also separated
the roles in recognition of the differences in responsibilities. While our Chief Executive Officer is responsible for the day-to-day
leadership of the Company and its business operations, the Chairman of the Board provides guidance to the Board, sets the agenda for
Board meetings and presides over the meetings of the full Board and the meetings of the Board’s non-management directors. The Board
Chairman also provides performance feedback on behalf of the Board to our Chief Executive Officer. The Board intends to carefully evaluate
from time to time whether our Chief Executive Officer and Chairman positions should remain separate based on what the Board believes
is best for the Company and its stockholders.
Board
Oversight of Risk
The
Board is actively involved in the oversight of risks that could affect the Company. The Board as a whole has responsibility for risk
oversight of the Company’s risk management policies and procedures, with reviews of certain areas being conducted by the relevant
Board committee. The Board satisfies this responsibility through reports by each Committee Chair regarding the Committee’s considerations
and actions, as well as through regular reports directly from management responsible for oversight of particular risks within the Company.
Specifically, the Board committees address the following risk areas:
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● |
The Compensation Committee
is responsible for overseeing the management of risks related to the Company’s executive compensation plans and arrangements.
|
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|
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The Audit Committee discusses
with management the Company’s major financial and other risk exposures and the steps management has taken to monitor and control
such exposures. |
The
Board as a whole considers risks related to regulatory and compliance matters as well as risks related to the Company’s sales and
marketing and research and development initiatives.
The
Board encourages management to promote a corporate culture that incorporates risk management into the Company’s day-to-day business
operations.
Stockholder
Recommendations for Director Nominees
In
nominating candidates for election as a director, the Board will consider a reasonable number of candidates recommended by a single stockholder
who has held over 20% of PURE Bioscience Common Stock for over one year and who satisfies the notice, information and consent provisions
set forth in our Bylaws and Corporate Governance Guidelines. Stockholders who wish to recommend a candidate may do so by writing to the
Board of Directors in care of the Corporate Secretary, PURE Bioscience, Inc., 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730. The Board
of Directors will use the same evaluation process for director nominees recommended by stockholders as it uses for other director nominees.
A printed copy of our Bylaws may be obtained by any stockholder upon request to our Corporate Secretary.
Identification
and Evaluation of Director Nominees
In
evaluating nominees for membership on our Board, our Board applies the Board membership criteria set forth in our Corporate Governance
Guidelines. Under these criteria, the Board takes into account many factors, including an individual’s business experience and
skills (including skills in core areas such as operations, management, technology, accounting and finance, strategic planning and international
markets), as well as independence, judgment, knowledge of our business and industry, professional reputation, leadership, diversity of
experience, integrity and ability to represent the best interests of the Company’s stockholders. In addition, the Board also considers
the ability to commit sufficient time and attention to the activities of the Board, as well as the absence of any potential conflicts
with the Company’s interests. The Board does not assign specific weights to particular criteria and no particular criterion is
necessarily applicable to all prospective nominees. The Board does not have a formal policy with respect to diversity of nominees. Rather,
our Board considers Board membership criteria as a whole and seeks to achieve diversity of occupational and personal backgrounds on the
Board.
Our
Board regularly assesses the appropriate size of our Board, and whether any vacancies on our Board are expected due to retirement or
otherwise. In the event that vacancies are anticipated, or otherwise arise, the Board will consider various potential candidates who
may come to the attention of the Board through current Board members, professional search firms, stockholders or other persons. Each
candidate brought to the attention of the Board, regardless of who recommended such candidate, is considered on the basis of the criteria
set forth in our corporate governance guidelines. As stated above, our Board will consider candidates proposed for nomination by our
significant stockholders. Stockholders may propose candidates by submitting the names and supporting information to: Corporate Secretary,
PURE Bioscience, Inc., 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730. Supporting information should include (a) the name and address
of the candidate and the proposing stockholder, (b) a comprehensive biography of the candidate and an explanation of why the candidate
is qualified to serve as a director taking into account the criteria identified in our corporate governance guidelines, (c) proof of
ownership, the class and number of shares, and the length of time that the shares of our voting securities have been beneficially owned
by each of the candidate and the proposing stockholder, and (d) a letter signed by the candidate stating his or her willingness to serve,
if elected.
Communications
with the Board of Directors
The
Board desires that the views of stockholders will be heard by the Board, its Committees or individual directors, as applicable, and that
appropriate responses will be provided to stockholders on a timely basis. Stockholders wishing to formally communicate with the Board,
any Board Committee, the independent directors as a group or any individual director may send communications directly to the Company
in care of the Corporate Secretary, PURE Bioscience, Inc., 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730. All clearly marked written
communications, other than unsolicited advertising or promotional materials, are logged and copied, and forwarded to the director(s)
to whom the communication was addressed. Please note that the foregoing communication procedure does not apply to (i) stockholder proposals
pursuant to Exchange Act Rule 14a-8 and communications made in connection with such proposals or (ii) service of process or any other
notice in a legal proceeding.
PROPOSAL
ONE
ELECTION
OF DIRECTORS
Nominees
for Director
Our
business is managed under the oversight of our Board of Directors. Our board of directors currently consists of the following five individuals:
Tom Y. Lee, CPA, Ivan Chen, Tom Myers, Kristin Taylor and David Rendall. Our Board has nominated the following persons for election or
re-election at the Annual Meeting:
| Name
|
|
Age |
|
Director
Since |
|
Position(s)
Held |
| Tom Y. Lee, CEO |
|
74 |
|
2014 |
|
CEO / Director |
| Ivan Chen, Chairman |
|
40 |
|
2018 |
|
Chairman |
| Tom Myers, COO |
|
70 |
|
2021 |
|
COO / Director |
| Kristin A. Taylor |
|
55 |
|
2021 |
|
Director |
| David M. Rendall |
|
50 |
|
2021 |
|
Director |
| Robert Bartlett |
|
78 |
|
- |
|
Director Nominee |
| Bernard Blotner |
|
72 |
|
- |
|
Director Nominee |
In
addition to the information regarding our directors and skills that led our Board to conclude that the individual should serve as a director,
we also believe that all of our directors have a reputation for integrity, honesty and adherence to high ethical standards. We believe
they each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our company
and our Board.
The
Board also believes that re-electing five of our incumbent directors helps to promote stability and continuity. The Board expects that
each such directors will continue to make substantial contributions to the Company by virtue of their familiarity with, and insight into,
the Company’s business and the Company’s business strategy.
All
of the nominees have indicated a willingness to continue serving as directors, and the Company has no reason to believe that any nominee
will be unavailable or unable to serve. If any of them should decline or be unable to act as a director, the proxy holders will vote
for the election of any other person or persons the Board may nominate.
The
following sets forth information regarding the business experience of our five current directors and two director nominees as of December
1, 2022:
Ivan
Chen joined our Board in June 2018 and has served as Chairman of the Board since August 2021. Mr. Chen brings extensive experience
in the healthcare, life sciences and technology industries, with expertise in areas including licensing, joint ventures, mergers &
acquisitions, securities and corporate governance. He currently serves as Vice President, General Counsel and Corporate Secretary at
Imagen Dental Partners, LLC, a dental partnership organization that provides non-clinical support services to dental practices across
the United States. In this role, he oversees all legal, compliance, government relations, insurance/risk and patient relations matters
at Imagen. Before joining Imagen, he was Director, Senior Corporate Counsel at Pacific Dental Services, LLC (PDS), one of the largest
dental support organizations in the United States, where he focused on acquisitions, dispositions, commercial contracts and healthcare
compliance. Mr. Chen also served as the principal legal counsel to the Pacific Dental Services Foundation, a nonprofit organization providing
oral healthcare to underserved communities worldwide. At PDS, he received numerous organization-wide awards for outstanding performance.
Prior to joining PDS, he was Director, Global M&A Counsel at eBay Inc., a publicly-traded e-commerce platform. In this position,
he led the negotiation and execution of numerous U.S. and cross-border acquisitions. Earlier in his career, he was an associate at Morrison
& Foerster LLP and at Skadden, Arps, Slate, Meagher & Flom LLP, both large international law firms. In these roles, he focused
on transactional, securities and corporate governance matters.
In
addition to serving on the Board of our company, Mr. Chen also is on the Board of AiTmed Incorporated, a privately-held, early-stage
telehealth platform.
Mr.
Chen earned a J.D. from Harvard Law School, a master’s degree from the University of Cambridge, and a bachelor’s degree from
Northwestern University. He is admitted to the bar in California and New York and is a registered in-house counsel in Arizona.
We
believe Mr. Chen’s qualifications to serve as a director on our Board include his executive leadership experience as an attorney
and entrepreneur, as well as his educational background.
Tom
Y. Lee, CPA joined our Board in October 2014. He has served as Chairman of the Board from January 2019 to August 2021. He is our
current Chief Executive Officer and President. Since 2018, Mr. Lee has served as the President of MicroTube, Inc. as well. Mr. Lee was
formerly audit committee chairman at First Continental Bank (which merged with United Commercial Bank in 2003). Mr. Lee has been an active
CPA since 1983 and earned a Master’s Degree in Accounting from California State University, Long Beach and a Bachelor’s Degree
in Business Administration from TamKang University in Taipei, Taiwan.
We
believe Mr. Lee’s qualifications to serve as a director on our Board include his accounting background and expertise as a CPA.
The Board also considered Mr. Lee’s commitment to the Company and its technology platform based on his investments in the Company’s
stock.
Tom
Myers joined our Board in January 2021. He also serves as our Chief Operating Officer. Prior to serving as our Chief Operating Officer,
he was our Executive Vice President, Technical Support Services. In this role, he led the implementation and application of our silver
di-hydrogen citrate (SDC) technology in customer facilities through problem identification and solution development, custom protocol
development and training. Mr. Myers has over 40 years of food industry experience focusing on operations management, quality control
and assurance, research and development, product and process development, plant design and construction, food safety and regulatory compliance.
Prior to joining our company, Mr. Myers served as the President and Principal of Idaho Milk Products, where he built a $105 million green
field dairy proteins plant and launched a worldwide business with revenues in excess of $200 million annually. Mr. Myers also has held
executive management roles at Weider Nutrition International, Puritan Quartz Pharmaceuticals, FruitSource Associates and FruitSource
Confections, Nancy’s Specialty Foods, Izaki Glico and Berkshire Hathaway Corporation (See’s Candies and See’s Candy
Shops). Mr. Myers holds a Bachelor of Science from California State University, Long Beach.
We
believe Mr. Myers’s qualifications to serve as a director on our Board include his executive leadership experience as the Company’s
Chief Operating Officer and his experience in building and growing the Company’s technology.
Kristin
A. Taylor was appointed to our Board on January 20, 2021. Ms. Taylor is an accomplished technology executive with over 25 years of
experience in the tech sector. In March of 2020, Ms. Taylor was named President and Chief Executive Officer of Imageware Systems, Inc.
a software SaaS leader in biometric identification and authentication for state, local, federal governments, including law enforcement/public
safety, as well as commercial businesses in the financial, healthcare, education, manufacturing and call center verticals. Taylor was
named Chair of the Board in May of 2020. Prior to serving as President and Chief Executive Officer of Imageware Systems, Inc., Ms. Taylor
was a strategy consultant providing advisory services on communications, marketing, and analyst relations for Veritas Lux and Kristin
A Taylor Consulting in which she developed a proprietary algorithmic methodology to weigh and rank the most influential global technical
analysts. From September of 2017 to April of 2019, Ms. Taylor served as Vice President of Worldwide Analyst Relations at IBM and led
the efforts to modernize and transform IBM’s Analyst Relations organization to drive not only influence but materialize revenue.
From August 2013 to August of 2017, she served as Vice President, of Global Analyst and Public Relations at MediaTek, the third largest
fabless semiconductor company worldwide with a $62 billion market cap, where she led the buildout of a new global Public and Analyst
Relations organization to penetrate the North American, European, Latin American, Russian and Indian markets. Prior to that from September
1998 to December 2010, she served in various positions of increasing responsibility with Qualcomm including Head of Industry Analyst
Relations, Senior Director of Business Development, and as a Director in Information Technology. During her tenure with Qualcomm, she
drove development and launched the world’s first embedded wireless WAN module inside of notebook computers that resulted in the
creation of a new corporate division for computing, with Gobi becoming a core element of 300+ product offerings. In October of 2020,
she was named to the Top 50 Women Leaders in SaaS by The Software Report. She earned degrees in Business Management and Sociology from
the University of New Hampshire in Durham.
We
believe that Ms. Taylor’s qualifications to serve as a director on our Board include her experience in Fortune 500 and micro-cap
businesses along with her insight in sales, business development, analyst and public relations, marketing, and go-to-market strategies.
David
M. Rendall joined our Board in January 2021. Mr. Rendall is an attorney and licensed real estate broker in the state of California.
Mr. Rendall has been the broker and owner of RE/MAX of Santa Clarita, RE/MAX of Valencia, and RE/MAX Gateway since February 2014. Mr.
Rendall manages approximately 175 agents and has annual gross sales volume of over $1 billion. He is the owner of Group One Investments,
Inc., a licensed real estate property management and real estate investment firm specializing in commercial management, Value Add commercial
real estate investments, real estate syndication and development. He currently sits on the Santa Clarita Valley Economic Development
Corporation board and is the Chief Executive Officer of Escrow Advantage, Inc., an independent escrow company. Mr. Rendall also is the
general partner, owner, president, managing member, and/or member of multiple businesses and real estate partnerships. In addition to
his real estate companies, he is the Principal and Partner of Group One Legal, PC. Mr. Rendall has been practicing real estate since
2001 and law since 2003, when he was admitted to the state bar of California. Mr. Rendall earned a J.D. from Loyola Law School, a bachelor’s
degree in Political Science and Sociology from University of California, Los Angeles. He also was an adjunct professor at College of
the Canyons, where he taught Real Estate Principles, Real Estate Practices, and Legal Aspects of Real Estate.
We
believe Mr. Rendall’s qualifications to serve as a director on our Board include his substantial managerial and business expertise
and insight into specific areas of sales and marketing can provide leadership to the Company through various stages of potential development
and growth. In addition, the Board values his legal expertise.
Robert
Bartlett has been nominated by the Board for election at the Annual Meeting. Mr. Bartlett retired in 2006 as Chairman of the Board
of Advanced Marketing Services, a major distributor of books and media to warehouse clubs worldwide. Since 1995, he has been the founder
and was managing director of Combined Resources International, a manufacturer and distributor of picture frames, cork erase boards, and
children’s furniture to warehouse clubs in the United States and Canada. From October of 1993 to June 1995, he served as Vice President,
Divisional Manager at Anderson Chamberlain, Inc., an in-house general merchandise and food broker for Costco’s warehouse clubs
worldwide. From September 1990 to December 1993, he served as Senior Vice President, Operations, Merchandising, Traffic and Distribution
with Source Club, Inc., a division of Meijer Stores. From December 1989 to December 1990, he served as Executive Vice President Merchandising,
Operations, Traffic and Distribution with The Wholesale Club, Inc. until it was sold to Walmart in 1990. Prior to that, from November
1981 to September 1989, he was promoted to the position of Executive Vice President, Merchandising, Traffic and Distribution at The Price
Company, Inc., the first membership warehouse club, started in San Diego, CA, which later merged with Costco. He served in the United
States Army after being drafted in December of 1965, schooled as artillery surveyor/training NCO for an Artillery Battalion, were he
was attached to the 7th Army in Europe where he was honorably discharged at the rank of Sergeant E-5 in 1967. After discharge
he attended Junior College under the GI Bill.
We
believe Mr. Bartlett’s qualifications to serve as a director on our Board include his vast executive experience and expertise in
merchandising and distribution to large retail stores and club warehouses and the insight he has into large retail sales and marketing.
Bernard
Blotner has been nominated by the Board for election at the Annual Meeting. Mr. Blotner retired in April 2020 as Senior Vice President
and Corporate Client Group Director with Morgan Stanley Wealth Management. He was associated with Morgan Stanley since 1983, having joined
the firm originally with E.F. Hutton & Company. Beginning in 1988, Mr. Blotner and his team focused on serving the investment needs
of high net worth individuals and corporations, specifically in relation to stock option plans, stock purchase plans, restricted stock
plans, control and restricted securities, and Rule 144 transactions. The team’s assets under management was over $750 million,
and plans ranged from small, local companies to multinational Fortune 500 companies. He was a member of the National Association of Stock
Plan Professionals (NASPP), and his licenses included FINRA Series 7, Series 65, Series 63 and Series 3. Mr. Blotner was named to the
list of Forbes Best-In-State Wealth Advisors (2020). He graduated cum laude from Boston College with a Bachelor of Arts degree and received
his Master of Arts degree from San Diego State University. Mr. Blotner has served on the Boards of Directors of several not for profit
organizations. Prior to joining Morgan Stanley, he was the Program Director of the Jewish Community Center in San Diego.
We
believe Mr. Blotner’s qualifications to serve as a director on our Board include his considerable experience in wealth management
and asset management and valuable knowledge of the financial markets.
Relationships
Mr.
Ivan Chen is the nephew of Mr. Tom Y. Lee. There are no other family relationships between any current director executive officer, or
any director or executive offer during the fiscal year ended July 31, 2022.
Compensation
Committee Interlocks and Insider Participation.
None
of the members of our Compensation Committee are or have been an officer or employee of us. During fiscal years 2022 and 2021, no member
of our Compensation Committee had any relationship with us requiring disclosure under Item 404 of Regulation S-K. Additionally, none
of our executive officers served on the Compensation Committee (or its equivalent) or board of directors of another entity any of whose
executive officers served on our Compensation Committee or board of directors.
Vote
Required and Board Recommendation
If
a quorum is present, either in person or by proxy, directors will be elected by a plurality of the votes, which means the seven nominees
who receive the greatest number of FOR votes will be elected. If you hold your shares through a broker and you do not instruct
the broker on how to vote on this proposal, your broker will not have authority to vote your shares. Abstentions and “broker non-votes”
will each be counted as present for purposes of determining the presence of a quorum, but will not have any effect on the outcome of
the proposal.
Each
person nominated for election has agreed to serve if elected. If any nominee becomes unavailable for any reason (which event is not anticipated)
to serve as a director at the time of the meeting, then the shares represented by such proxy may be voted for such other person as may
be determined by the proxy holders, unless a contrary instruction is indicated in the proxy.
Directors
are to be elected to hold office until the next annual meeting of stockholders and until their successors are elected and qualified,
or their earlier death, resignation or removal.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE NOMINEES LISTED ABOVE (ITEM 1 ON THE PROXY CARD).
PROPOSAL
TWO
RATIFICATION
OF APPOINTMENT OF WEINBERG & COMPANY, P.A. AS THE COMPANY’S
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
At
the Annual Meeting, our stockholders will be asked to ratify the appointment of Weinberg & Company, P.A. (“Weinberg”)
as our independent registered public accounting firm for the fiscal year ending July 31, 2023. Weinberg has served as the Company’s
auditor since 2019. Our Audit Committee is responsible for approving the engagement of Weinberg as the Company’s independent registered
public accounting firm for the year ending July 31, 2023. In the event our stockholders fail to ratify the appointment of Weinberg, the
Audit Committee will reconsider its selection. In addition, even if our stockholders ratify the selection, the Audit Committee in its
discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it
believes that a change would be in the best interests of the Company and its stockholders.
The
Audit Committee meets with Weinberg on a quarterly or more frequent basis. At such times, the Audit Committee reviews the services performed
by Weinberg, as well as the fees charged for such services.
A
representative of Weinberg maybe present at the Annual Meeting and will have an opportunity to make a statement if he or she desires.
If present the representative is also expected to be available to respond to appropriate questions from stockholders.
Fees
Billed to the Company by its independent auditors during Fiscal Years 2022 and 2021.
The
following table provides information regarding the fees billed to us by Weinberg & Company, P.A. for the years ended July 31, 2022
and 2021, respectively. All fees described below were approved by the Board or the Audit Committee:
| | |
For the years ended July 31, | |
| | |
2022 | | |
2021 | |
| Audit Fees | |
$ | 107,000 | | |
$ | 85,000 | |
| Audit-Related Fees | |
$ | — | | |
$ | — | |
| Tax Fees | |
$ | 17,000 | | |
$ | 12,000 | |
| All Other Fees | |
$ | — | | |
$ | — | |
| Total Fees | |
$ | 124,000 | | |
$ | 97,000 | |
| |
Audit Fees: For
the years ended July 31, 2022 and 2021, the aggregate audit fees billed by our independent public accounting firm were for services
rendered for the audit and quarterly reviews of our financial statements, including our Annual Report on Form 10-K and our periodic
reports, and fees incurred related to the filings of registration statements. |
| |
|
| |
Audit-Related Fees:
For the years ended July 31, 2022 and 2021, there were no audit-related fees billed by our independent public accounting firm. |
| |
|
| |
Tax Fees: consist
of amounts billed by an affiliate of our independent auditors for services in connection with the preparation of our federal and
state tax returns. |
| |
|
| |
All Other Fees:
For the years ended July 31, 2022 and 2021, there were no fees billed by our independent public accounting firm for other services,
other than the fees described above. |
Pre-Approval
Policies and Procedures
Our
Audit Committee’s policy is to pre-approve all audit and permissible non-audit services provided by our independent auditors. These
services may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for
up to one year and any pre-approval is detailed as to the particular service or category of services. The independent auditor and management
are required to periodically report to the Audit Committee regarding the extent of services provided by the independent auditor in accordance
with this pre-approval. Any proposed services not included within the list of pre-approved services or any proposed services that will
cause the Company to exceed the pre-approved aggregate amount requires specific pre-approval by the Audit Committee. All audit fees and
tax fees listed in the table above were approved by the Audit Committee pursuant to its pre-approval policies and procedures.
Interest
of Certain Persons in Matters to be Acted Upon
There
are no persons who have a direct or indirect substantial interest in the matter described under Proposal 2 above.
Vote
Required and Board Recommendation
The
ratification of the appointment of Weinberg as our independent registered public accounting firm for the fiscal year ending July 31,
2023 requires a majority of the votes cast, whether in person or represented by proxy, to vote FOR this proposal. Abstentions
will be counted as present for purposes of determining the presence of a quorum, but will have no effect on the outcome of the vote.
Submission
of the appointment to stockholder approval is not required. However, if our stockholders fail to ratify the appointment, the Audit Committee
will reconsider whether to retain Weinberg as our independent auditor or whether to consider the selection of a different firm. Even
if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditor at
any time during the fiscal year ending July 31, 2023.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE RATIFICATION OF WEINBERG & COMPANY, P.A. AS INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE COMPANY FOR THE FISCAL YEAR ENDING JULY 31, 2023 (ITEM 2 ON THE PROXY CARD).
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
following is the report of the Audit Committee of the Board of Directors of PURE Bioscience, Inc. with respect to PURE Bioscience’s
audited financial statements for the fiscal year ended July 31, 2022, included in the Company’s Annual Report on Form 10-K, filed
with the SEC on October 28, 2022. The information contained in this report shall not be deemed to be “soliciting material”
or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates
it by reference in such filing.
The
Audit Committee of the Board of Directors currently consists of three non-employee directors, including Messrs. Chen (Chair) and Rendall
and Ms. Taylor. The Board has determined that each of Messrs. Chen and Rendall and Ms. Taylor, are “independent director”
under the listing standards of the NYSE American.
The
Audit Committee oversees our financial reporting process on behalf of the Board of Directors. Management has the responsibility for the
financial statements and the reporting process, including internal control systems. Our independent registered public accounting firm
for the fiscal year ended July 31, 2022, Weinberg was responsible for expressing an opinion as to the conformity of our audited financial
statements with generally accepted accounting principles.
Review
with Management
The
Audit Committee reviewed and discussed the audited financial statements with management of the Company.
Review
and Discussions with Independent Accountants
The
Audit Committee met with Weinberg to review the financial statements for the fiscal year ended July 31, 2022. The Audit Committee discussed
with a representative of Weinberg the matters required to be discussed by Auditing Standard No. 1301, “Communicating with Audit
Committees”. In addition, the Audit Committee met with Weinberg, with and without management present, to discuss the overall scope
of Weinberg’s audit, the results of its examinations and the overall quality of the Company’s financial reporting. The Audit
Committee received the written disclosures and the letter from Weinberg required by Rule 3526 of the Public Company Accounting Oversight
Board, Communication with Audit Committee Concerning Independence, and has discussed with Weinberg its independence, and satisfied itself
as to the independence of Weinberg.
Conclusion
Based
on the above review, discussions, and representations received, the Audit Committee recommended to the Board of Directors that the audited
financial statements for the fiscal year ended July 31, 2022 be included in the Company’s Annual Report on Form 10-K filed with
the SEC.
The
Audit Committee of the Board of Directors:
Ivan
Chen, Chair
Kristin
Taylor
David
Rendall
PROPOSAL
THREE
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
Background
Section
14A of the Exchange Act requires that we provide our stockholders with the opportunity to vote to approve, on a non-binding advisory
basis, the compensation of our named executive officers as disclosed in this Proxy Statement. This proposal, commonly known as a “Say
on Pay” proposal, gives you, as a stockholder, the opportunity to endorse or not endorse our executive compensation program and
the compensation paid to our named executive officers as reported in this Proxy Statement.
The
Say on Pay vote is advisory, and therefore not binding on the Compensation Committee or the Board. Although the vote is non-binding,
the Compensation Committee and the Board will review the voting results, seek to determine the cause or causes of any significant negative
voting, and take the voting results into consideration when making future decisions regarding executive compensation. At our 2022 Annual
Meeting, our stockholders approved our Say on Pay Proposal by a vote of 88.41% of the votes cast. Additionally, at our 2021 Annual Meeting
our stockholders approved an annual Say on Pay vote at our 2021 Annual Meeting, otherwise known as a “Say When on Pay” proposal.
As such, we have determined to hold an advisory vote to approve, on a non-binding advisory basis, the compensation of our named executive
officers annually.
The
Compensation Committee of the Board of Directors, which is comprised solely of independent directors, has the responsibility for evaluating
and authorizing the compensation payable to our executive officers. The goal of our executive compensation program is to attract, motivate
and retain executives of outstanding ability, performance and potential. To achieve this goal, the Compensation Committee has designed
a package that combines competitive base pay, with incentive cash compensation conditioned on the achievement of predetermined annual
performance goals and long-term equity awards. The Compensation Committee believes this package encourages employee retention and the
creation of stockholder value. Our compensation program also seeks to be internally consistent with differentials commensurate with the
scope of a named executive officer’s responsibilities.
Fiscal
Year 2022
During
the fiscal year ended July 31, 2022, our “named executive officers” were (i) Tom Y. Lee, who serves as our Chief Executive
Officer, (ii) Tom Myers, who serves as our Chief Operating Officer, and (iii) Mark Elliott, who serves as Vice President, Finance.
Elements
of Compensation
Consistent
with the size and nature of our Company, our executive compensation program is simple, consisting of a base salary, an annual performance-based
cash bonus, long-term equity awards, and eligibility to participate in employee benefit plans that we make available to all of our full-time
employees, including group health plan, group term life insurance, and short- and long-term disability benefits.
Taken
as a whole, the elements of our compensation package are comparable to those offered by other similarly sized companies in our industry.
This allows us to compete in acquiring talent and retaining key executives. Our annual performance-based cash bonuses link executive
compensation to the Company’s performance and the individual achievements and performance of our executives. Likewise, equity awards
align the interests of our named executive officers with those of our stockholders, thereby creating an incentive to build stockholder
value and acting as a retention tool.
The
Compensation Committee did not retain a compensation consultant during fiscal year 2022 given the Company’s cash constraints.
Stockholders
are encouraged to read the Executive Compensation section of this Proxy Statement for a more detailed discussion of our compensation
program.
Base
Salary
Base
salaries of our named executive officers depend on their job responsibilities, the market rate of compensation paid by companies in our
industry for similar positions, our financial position and cash constraints, and external factors like inflation and the projected strength
of the economy. The Compensation Committee reviews the base salaries of our named executive officers at least annually.
The
annual base salaries of our named executive officers are reflected in the Summary Compensation Table included in this Proxy Statement.
Annual
Performance-Based Cash Bonus
The
annual performance-based cash bonus paid to our named executive officers is determined by the Compensation Committee based on the achievement
of our corporate goals, weighted by importance, as well as individual goals applicable to the named executive officer’s position.
Our corporate goals consist of progress on sales and regulatory approval goals for our product offerings as well as on individual goals.
The individual goals of our named executive officers are based on the executive’s job title and responsibilities. In addition,
the Compensation Committee retains discretion to adjust the actual amount of the annual bonus based on our stock performance, our accomplishments
determined on a qualitative basis, and the strength of our financial and market position at the end of the fiscal year.
Following
the end of each fiscal year, the Compensation Committee is responsible for determining the bonus amount payable to the executive officer
based on the Company’s and the executive officer’s performance against the performance metrics established by the Compensation
Committee for the recently completed fiscal year.
Due
to the Company’s limited financial resources and the Company’s performance below the operating plan approved by the Board
of Directors, our named executive officers did not receive any cash bonuses for the years ended July 31, 2022 and 2021.
Long-Term
Incentive Awards
During
the fiscal year ended July 31, 2022, there were no long-term equity awards granted to our executive officers.
Miscellaneous
Our
named executive officers are eligible to participate in employee benefit plans available to all full-time employees, including group
health plan, group term life insurance, and short- and long-term disability benefits. We do not sponsor any defined benefit pension plan,
nonqualified defined contribution plan, or deferred compensation plan; nor do we provide post-retirement health coverage for our named
executive officers.
Vote
Required
The
Board and Compensation Committee believe the Company’s executive compensation program uses appropriate structures and sound pay
practices that are effective in achieving the Company’s core compensation objectives. Accordingly, the Board recommends that you
vote in favor of the following resolution:
“RESOLVED,
that the stockholders of PURE Bioscience, Inc. hereby approve, on an advisory basis, the compensation of the Company’s named executive
officers, as disclosed in this Proxy Statement, under the section entitled “Executive Compensation.”
If
a quorum is present, the approval, on a non-binding advisory basis, of the compensation of our named executive officers requires that
a majority of the votes cast, whether in person or represented by proxy, are voted FOR this proposal. Abstentions and “broker
non-votes” will each be counted as present for purposes of determining the presence of a quorum, but will have no effect on the
outcome of the vote.
The
approval of this proposal is not a condition to the approval of any other proposals submitted to the stockholders.
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS (ITEM 3 ON THE PROXY CARD).
EXECUTIVE
OFFICERS
Information
Regarding Our Executive Officers
Information
with respect to our current named executive officers is shown below. Since Tom Y. Lee and Tom Myers also serve on the Board, their biographies
are set forth under “Nominees for Directors” above.
| Name |
|
Age |
|
Position(s)
Held |
|
Position(s)
Held Since |
| Tom Y. Lee |
|
74 |
|
Chief Executive Officer |
|
2019 |
| Mark Elliott |
|
47 |
|
Vice President, Finance |
|
2015 |
| Tom Myers |
|
70 |
|
Chief Operating Officer |
|
2018 |
Mark
Elliott was appointed as our Vice President Finance and Principal Financial and Accounting Officer in July 2015. Mr. Elliott joined
the Company in 2004 and has been responsible for managing all accounting and regulatory reporting activities since he was promoted to
Controller in May 2006. He has also been responsible for establishing all current financial and reporting systems. Prior to joining the
Company, Mr. Elliott worked in government accounting. He earned a Bachelor of Science, Business Administration-Accountancy at California
State University-San Marcos.
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The
following table sets forth a summary of cash and non-cash compensation awarded, earned or paid for services rendered to us during the
fiscal years ended July 31, 2022 and July 31, 2021 by our named executive officers, consisting of (i) each individual serving as principal
executive officer during the fiscal year ended July 31, 2022 and (ii) our other two most highly compensated officers serving during the
fiscal year ended July 31, 2022.
| Name and Principal Position | |
Fiscal Year | | |
Salary ($)(1) | | |
Bonus | | |
Option Awards ($)(2) | | |
All Other Compensation ($)(3) | | |
Total Compensation ($) | |
| Tom Y. Lee | |
| 2022 | | |
$ | — | | |
| — | | |
| — | | |
$ | 74,000 | | |
$ | 74,000 | |
| Chief Executive Officer | |
| 2021 | | |
$ | — | | |
| — | | |
$ | 100,000 | (4) | |
$ | 64,000 | | |
$ | 164,000 | |
| Mark Elliott | |
| 2022 | | |
$ | 180,000 | | |
| — | | |
| — | | |
$ | — | | |
$ | 180,000 | |
| Vice President Finance | |
| 2021 | | |
$ | 162,000 | | |
| — | | |
$ | 27,000 | (5) | |
$ | — | | |
$ | 189,000 | |
| Tom Myers | |
| 2022 | | |
$ | 200,000 | | |
| — | | |
| — | | |
$ | — | | |
$ | 200,000 | |
| Chief Operating Officer | |
| 2021 | | |
$ | 200,000 | | |
| — | | |
$ | 31,000 | (6) | |
$ | — | | |
$ | 231,000 | |
| (1) |
Amounts reflect salary
earned during the respective fiscal years. |
| |
|
| (2) |
Amounts for the years ended
July 31, 2022 and 2021 reflect the grant date fair value for financial statement reporting purposes with respect to stock options
granted during the respective fiscal years, calculated in accordance with authoritative guidance. |
| |
|
| (3) |
Represents $60,000 in Board
fees and $14,000 for medical insurance payments reimbursed to Mr. Lee during the fiscal year ended July 31, 2022. Represents $51,000
in Board fees and $13,000 for medical insurance payments reimbursed to Mr. Lee during the fiscal year ended July 31, 2021. |
| |
|
| (4) |
Represents two awards consisting
of options to purchase 350,000 shares of Common Stock. |
| |
|
| (5) |
Represents an award consisting
of options to purchase 100,000 shares of Common Stock. |
| |
|
| (6) |
Represents an award consisting
of options to purchase 125,000 shares of Common Stock. |
Narrative
to Summary Compensation Table
The
compensation program established for the Company’s executive officers consisted of the following elements:
Base
Salary: The base salaries of our named executive officers depend on their job responsibilities, the market rate of compensation
paid by companies in our industry for similar positions, our financial position and performance, and the strength of our business. Base
salaries provide a fixed means of compensation in order to attract and retain talent. Mr. Lee received no base salary as Chief Executive
Officer during the fiscal year ended July 31, 2022. Mr. Elliott’s salary was $180,000 per year during the fiscal year ended July
31, 2022. The base salary for Mr. Myers was $200,000 per year during the fiscal year ended July 31, 2022.
Performance-Based
Cash Awards: As part of the Company’s executive compensation program, our executive officers are eligible to receive performance-based
cash awards. The annual performance-based cash awards are based on the executive officer’s individual performance and the Company’s
actual performance compared to the corporate goals approved by the Board and the Compensation Committee. Following the end of each fiscal
year, the Board and the Compensation Committee is responsible for determining the bonus amount payable to an executive officer based
on that executive officer’s individual performance during the fiscal year and its determination of the Company’s actual performance
compared to the corporate goals established for that fiscal year. Due to the Company’s limited financial resources and performance,
our named executive officers did not receive any performance-based cash bonuses for the years ended July 31, 2022 and 2021.
Long-Term
Equity Awards: Equity ownership by our executive officers and key employees encourages them to create long-term value and aligns
their interests with those of our stockholders. As a result, our executive compensation program provides for the issuance of stock options
and restricted stock units (“RSUs”), as determined by the Compensation Committee and our Board. During the fiscal year ended
July 31, 2022, there were no long-term equity awards granted to our executive officers.
Outstanding
Equity Awards at Year-End
The
following table provides a summary of all equity awards held by our named executive officers that were outstanding as of July 31, 2022.
| | |
Option Awards | | |
|
| |
Stock Awards | |
| Name | |
Number of Securities Underlying Unexercised Options (#) Exercisable | | |
Number of Securities Underlying Unexercised Options (#) Unexercisable | | |
Option Exercise Price ($) | | |
Option Expiration Date |
| |
Number of shares or Units of stock that have not vested(#) | | |
Market Value of shares or Units of stock that have not vested ($)(1) | |
| Tom Y. Lee | |
| 150,000 | | |
| — | | |
$ | 0.45 | | |
| 6 /18/2031 |
(2) | |
| — | | |
$ | — | |
| | |
| 200,000 | | |
| — | | |
$ | 0.45 | | |
| 6 /18/2031 |
(2) | |
| — | | |
$ | — | |
| | |
| 350,000 | | |
| — | | |
$ | 0.79 | | |
| 5 /15/2030 |
(3) | |
| — | | |
$ | — | |
| | |
| 200,000 | | |
| — | | |
$ | 0.33 | | |
| 1 /29/2030 |
(3) | |
| — | | |
$ | — | |
| | |
| 150,000 | | |
| — | | |
$ | 0.29 | | |
| 10 /1/2029 |
(3) | |
| — | | |
$ | — | |
| | |
| 100,000 | | |
| — | | |
$ | 0.78 | | |
| 2 /26/2023 |
(4) | |
| — | | |
$ | — | |
| | |
| 200,000 | | |
| — | | |
$ | 1.19 | | |
| 6 /22/2027 |
(5) | |
| — | | |
$ | — | |
| Mark Elliott | |
| 100,000 | | |
| — | | |
$ | 0.45 | | |
| 6 /18/2031 |
(6) | |
| — | | |
$ | — | |
| | |
| 150,000 | | |
| — | | |
$ | 0.33 | | |
| 1 /29/2030 |
(7) | |
| — | | |
$ | — | |
| | |
| 150,000 | | |
| — | | |
$ | 0.79 | | |
| 5 /15/2030 |
(7) | |
| — | | |
$ | — | |
| | |
| 150,000 | | |
| — | | |
$ | 0.78 | | |
| 2 /26/2023 |
(8) | |
| — | | |
$ | — | |
| | |
| 10,000 | | |
| — | | |
$ | 0.86 | | |
| 1/24/2023 |
| |
| — | | |
$ | — | |
| Tom Myers | |
| 125,000 | | |
| — | | |
$ | 0.45 | | |
| 6 /18/2031 |
(9) | |
| — | | |
$ | — | |
| | |
| — | | |
| — | | |
$ | — | | |
| — |
| |
| 166,667 | | |
$ | 33,000 | (10) |
| | |
| 125,000 | | |
| — | | |
$ | 0.33 | | |
| 1 /29/2030 |
(11) | |
| — | | |
$ | — | |
| | |
| 125,000 | | |
| — | | |
$ | 0.79 | | |
| 5 /15/2030 |
(11) | |
| — | | |
$ | — | |
| | |
| 100,000 | | |
| — | | |
$ | 0.78 | | |
| 2 /26/2023 |
(12) | |
| — | | |
$ | — | |
| | |
| 40,000 | | |
| — | | |
$ | 0.73 | | |
| 2/6/2023 |
| |
| — | | |
$ | — | |
| (1) |
The market value was determined
by multiplying the number of shares underlying the awards by the closing price for our common stock on July 31, 2022, which was $0.20. |
| |
|
| (2) |
During the year ended July
31, 2021, we granted Mr. Lee awards consisting of an option to purchase 350,000 shares of Common Stock. 200,000 options vest quarterly
over one year. The remaining 150,000 options vest quarterly over two years. All 350,000 options have a ten-year term. |
| |
|
| (3) |
During the year ended July
31, 2020, we granted Mr. Lee awards consisting of an option to purchase 700,000 shares of Common Stock. 500,000 options vest quarterly
over one year. The remaining 200,000 options vest quarterly over two years. All 700,000 options have a ten-year term. |
| |
|
| (4) |
During the year ended July
31, 2018, we granted Mr. Lee a five-year award consisting of an option to purchase 100,000 shares of Common Stock. 50% of the option
vested January 15, 2019 with the remaining 50% vesting on January 15, 2020. |
| |
|
| (5) |
During the year ended July
31, 2017, we granted Mr. Lee a ten-year award consisting of an option to purchase 200,000 shares of Common Stock. 50% of the option
vested January 15, 2018 with the remaining 50% vesting on January 15, 2019. |
| |
|
| (6) |
During the year ended July
31, 2021, we granted Mr. Elliott awards consisting of an option to purchase 100,000 shares of Common Stock. The options have a ten-year
term and vest in four quarterly installments. |
| |
|
| (7) |
During the year ended July
31, 2020, we granted Mr. Elliott awards consisting of an option to purchase 300,000 shares of Common Stock. The options have a five-year
term and vest in four quarterly installments. |
| (8) |
During the year ended July
31, 2018, we granted Mr. Elliott an award consisting of an option to purchase 150,000 shares of Common Stock. The option has a five-year
term and vests in four quarterly installments. |
| |
|
| (9) |
During the year ended July
31, 2021, we granted Mr. Myers awards consisting of an options to purchase 125,000 shares of Common Stock. The options have a ten-year
term and vest in four quarterly installments. |
| |
|
| (10) |
During the year ended July
31, 2020, we granted Mr. Myers an award consisting of 500,000 RSUs. The RSU vest in equal installments over a three-year period and
carry a ten-year term. |
| |
|
| (11) |
During the year ended July
31, 2020, we granted Mr. Myers awards consisting of an options to purchase 250,000 shares of Common Stock. The options have a five-year
term and vest in four quarterly installments. |
| |
|
| (12) |
During the year ended July
31, 2018, we granted Mr. Myers an award consisting of an option to purchase 100,000 shares of Common Stock. The option has a five-year
term and vests in four quarterly installments. |
During
the year ended July 31, 2022, Messrs. Lee, Myers and Elliott had 400,000, 156,250 and 137,500 option awards vest, respectively. There
was no respective value on vesting.
Code
Section 162(m) Provisions
Section
162(m) of the U.S. Internal Revenue Code (the “Code”) generally disallows a tax deduction to public companies for compensation
in excess of $1 million paid to the Chief Executive Officer or any of the four most highly compensated officers. Prior to changes in
tax law taking effect in 2018, there was an exception to the $1.0 million limitation for performance-based compensation, including stock
options, meeting certain requirements. Before such amendments we had not adopted a policy that all compensation must qualify as deductible
under Section 162(m) of the Code. The exemption from the Section 162(m) deduction limit for performance-based compensation has been repealed,
effective for taxable years beginning after December 31, 2017, such that compensation paid to our Chief Executive Officer and certain
other executive officers in excess of $1.0 million will not be deductible unless it qualifies for transition relief applicable to certain
arrangements in place as of November 2, 2017.
DIRECTOR
COMPENSATION
Compensation
of Directors
Our
directors play a critical role in guiding our strategic direction and overseeing the management of our Company. Ongoing developments
in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public
company directors. The many responsibilities and risks and the substantial time commitment of being a director of a public company require
that we provide adequate incentives for our directors’ continued performance by paying compensation commensurate with our directors’
workload. Our non-employee directors are compensated based upon their respective levels of Board participation and responsibilities,
including service on Board committees.
Our
director compensation is overseen by the Compensation Committee, which makes recommendations to our Board of Directors on the appropriate
structure for our non-employee director compensation program and the appropriate amount of compensation to offer to our non-employee
directors. Our Board of Directors is responsible for final approval of our non-employee director compensation program and the compensation
paid to our non-employee directors. The Compensation Committee did not retain a compensation consultant to review the compensation of
our directors during fiscal year 2021 given the Company’s cash constraints.
Non-Employee
Director Compensation
The
following table sets forth compensation earned in the fiscal year ended July 31, 2022 by each of our non-employee directors who are not
named executive officers.
| | |
Fees Earned or Paid in Cash | | |
Total Compensation | |
| Name | |
($) | | |
($) | |
| Ivan Chen | |
$ | 75,000 | | |
$ | 75,000 | |
| Kristin A. Taylor | |
$ | 65,000 | | |
$ | 65,000 | |
| David M. Rendall | |
$ | 65,000 | | |
$ | 65,000 | |
Narrative
to Director Compensation Table
Each
non-employee director of the Company receives cash fees from the Company for their services as members of the Board and any committee
of the Board as follows:
| |
● |
Each non-employee director
receives an annual fee of $60,000 payable for such director’s service on the Board and each member of the Audit Committee and
Compensation Committee receives an additional annual fee of $4,000 and $2,500, respectively, payable for such director’s service
on the committee. |
| |
|
|
| |
● |
The Chair of the Audit
Committee receives an additional annual fee of $10,000 for such Chair’s service and the Chair of the Compensation Committee
receives an additional annual fee of $5,000 for such Chair’s service. |
Annual
fees are normally paid to each non-employee director in four equal installments on a quarterly basis. Any non-employee directors serving
a portion of the year are entitled to receive such fees on a pro rata basis based on their length of service during the year. Mr. Myers
did not receive any additional compensation for his board service.
Additionally,
new members of the Board are entitled to receive stock options in an amount to be determined by the Compensation Committee or the Board.
There
were no equity awards granted to our non-employee directors during the fiscal year ended July 31, 2022.
In
the past, our Board has approved each year, generally in the first or second calendar quarter of the year, an annual option or stock
grant for our non-employee directors. Any such grant is at the discretion of the Board, which considers the recommendation of our Compensation
Committee. Upon the Board’s approval of any such grant, each non-employee director generally may elect whether to receive the grant
as an option or stock award.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table provides information regarding the beneficial ownership of our Common Stock as of December 1, 2022 (the “Evaluation
Date”) by: (i) each of our current directors, (ii) each of our named executive officers as set forth in this Proxy Statement, (iii)
all such directors and executive officers as a group and (iv) our five percent or greater stockholders. The table is based upon information
supplied by our officers, directors and principal stockholders and a review of Schedules 13D and 13G, if any, filed with the SEC. Unless
otherwise indicated in the footnotes to the table and subject to community property laws where applicable, we believe that each of the
stockholders named in the table has sole voting and investment power with respect to the shares indicated as beneficially owned.
Applicable
percentages are based on 111,356,473 shares outstanding as of the Evaluation Date, adjusted as required by rules promulgated by the SEC.
These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power
with respect to those securities. In addition, the rules include shares of our Common Stock issuable pursuant to the exercise of stock
options or warrants or settlement of restricted stock units that are either immediately exercisable or exercisable within 60 days of
the Evaluation Date. These shares are deemed to be outstanding and beneficially owned by the person holding those securities for the
purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the
percentage ownership of any other person.
| Name (1) | |
Number of Shares Beneficially Owned | | |
Percent of Common Stock | |
| Tom Y. Lee | |
| 45,313,125 | (2) | |
| 40.15 | % |
| Mark Elliott | |
| 632,350 | (3) | |
| * | |
| Tom Myers | |
| 1,198,433 | (4) | |
| 1.07 | % |
| Ivan Chen | |
| 1,262,500 | (5) | |
| 1.13 | % |
| David M. Rendall | |
| 452,371 | (6) | |
| * | |
| Kristin A. Taylor | |
| 50,000 | (7) | |
| * | |
| All of our named executive officers and directors as a group (6 persons) | |
| 48,908,779 | (8) | |
| 42.42 | % |
| * |
Indicates less than one
percent of the outstanding shares of the Company’s common stock. |
| |
|
| (1) |
Unless, noted below, the
address for each person listed in the table is c/o PURE Bioscience, Inc., 9669 Hermosa Avenue Rancho Cucamonga, CA 91730. |
| |
|
| (2) |
Consists of 1,350,000 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date, and 43,963,125 shares
of Common Stock held directly by Mr. Lee and his affiliates. |
| |
|
| (3) |
Consists of 560,000 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date, and 72,350 shares
of Common Stock held directly by Mr. Elliott. |
| |
|
| (4) |
Consists of 515,000 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date, and 683,433 shares
of Common Stock held directly by Mr. Myers. |
| |
|
| (5) |
Consists of 512,500 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date, and 750,000 shares
of Common Stock held directly by Mr. Chen. |
| |
|
| (6) |
Consists of 50,000 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date, and 402,371 shares
of Common Stock held directly by Mr. Rendall. |
| |
|
| (7) |
Consists of 50,000 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date held directly by Ms.
Taylor. |
| |
|
| (8) |
Consists of 3,037,500 shares
of Common Stock subject to options currently exercisable or exercisable within 60 days of the Evaluation Date and 45,871,279 shares
of Common Stock, held by all directors and executive officers as a group. |
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended (the “Act”), requires our executive officers and directors and persons
who beneficially own more than 10% of our Common Stock to file initial reports of beneficial ownership and reports of changes in beneficial
ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such
persons.
To
the Company’s knowledge, other than as described below, no person who, during the fiscal year ended July 31, 2022, was a director
or officer of the Company, or beneficial owner of more than ten percent of the Company’s Common Stock (which is the only class
of securities of the Company registered under Section 12 of the Act), failed to file on a timely basis reports required by Section 16
of the Act during such fiscal year.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Certain
Relationships and Related Transactions, and Director Independence
Except
as described below and other than Board or employment relationships and compensation resulting from those employment relationships, no
director, executive officer, 5% stockholder or immediate family member of any of the foregoing, was a party to any transaction or series
of transactions since August 1, 2020 (the beginning of the year ended July 31, 2021), or is to be a party to any currently proposed transaction
or series of proposed transactions, in which (i) we were or are to be a participant, (ii) the amount involved exceeds the lesser of $120,000
or one percent of the average of our total assets at fiscal year-end for the fiscal years ended July 31, 2022 and 2021, which is $44,000,
and (iii) any director, executive officer, or immediate family member of any of the foregoing had or will have a direct or indirect material
interest.
For
information with respect to the compensation paid to our executive officers and directors, see heading “Executive Compensation”
of this Proxy Statement.
On
July 29, 2019, we entered into a Sublease Agreement or the Sublease with SwabPlus L.P. or SwabPlus, effective July 25, 2019, pursuant
to which we subleased certain office and industrial space for our corporate headquarters. The premises are located in Rancho Cucamonga,
California. In December 2020, the Sublease expired but we continue to rent on a month-to-month basis. The Company is currently negotiating
a new lease agreement. Rent expense, including common area maintenance and real property taxes, were $87,000 for the years ended July
31, 2022 and 2021, respectively.
Mr.
Lee, our Chief Executive Officer, President and member of our Board, is a limited partner of SwabPlus. Mr. Lee also serves as president
of Hermosa Property, Inc., the landlord of the premises subject to the Sublease. The Sublease was considered by the Company in accordance
with the Company’s Related Party Transaction and Procedures Policy, and approved by the disinterested members of our Board.
Equity
Transactions with our Directors and Officers
On
July 15, 2022, we completed a closing (the “Closing”) of a private placement financing (the “Private Placement Financing”)
to accredited investors (the “Investors”). We raised $3.5 million in the Closing and issued an aggregate of 23,333,332 shares
(collectively, the “Shares”) of our Common Stock at a purchase price of $0.15 per share. The Shares issued in the Private
Placement Financing were issued pursuant to a Securities Purchase Agreement (the “Securities Purchase Agreement”) entered
into with the Investors. Entities affiliated with Mr. Lee, our Chief Executive Officer, President and member of our Board, purchased
$3,261,250 of shares of our Common Stock in the Private Placement Financing. In addition, Messrs. Chen and Rendall, each a member of
our Board, purchased $45,000 and $48,750 of shares of our Common Stock in the Private Placement Financing, respectively. The disinterested
members of our Board approved the Private Placement Financing.
Compensation
of Our Current Directors and Executive Officers
For
information with respect to the compensation offered to our current directors and executive officers, please see the descriptions under
the headings “Executive Compensation” and “Director Compensation” in this Proxy Statement.
Related
Party Transaction Policy and Procedures
Pursuant
to our Related Party Transaction and Procedures, our executive officers, directors, and principal stockholders, including their immediate
family members and affiliates, are prohibited from entering into a related party transaction with us without the prior consent of our
Audit Committee or our independent directors. Any request for us to enter into a transaction with an executive officer, director, principal
stockholder, or any of such persons’ immediate family members or affiliates, must first be presented to our Audit Committee for
review, consideration and approval. In approving or rejecting the proposed agreement, our Audit Committee will consider the relevant
facts and circumstances available and deemed relevant, including, but not limited, to the risks, costs and benefits to us, the terms
of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s
independence. Our Audit Committee shall approve only those agreements that, in light of known circumstances, are in, or are not inconsistent
with, our best interests, as our Audit Committee determines in the good faith exercise of its discretion.
Compensation
Committee Interlocks and Insider Participation.
None
of the members of our Compensation Committee are or have been an officer or employee of us. During fiscal 2022, 2021 and 2020, no member
of our Compensation Committee had any relationship with us requiring disclosure under Item 404 of Regulation S-K, except as set forth
above, none of our executive officers served on the Compensation Committee (or its equivalent) or board of directors of another entity
any of whose executive officers served on our Compensation Committee or board of directors.
OTHER
MATTERS
The
management of the Company is not aware of any matter to be acted upon at the Annual Meeting other than the matters described above. However,
if any other matter properly comes before the Annual Meeting, the proxy holders will vote the proxies thereon in accordance with their
best judgment on such matter.
STOCKHOLDER
PROPOSALS FOR 2024 ANNUAL MEETING
Stockholders
interested in submitting a proposal for consideration at our 2024 Annual Meeting of Stockholders must do so by sending such proposal
to our Corporate Secretary at PURE Bioscience, Inc., 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730 telephone (619) 596-8600. Under
the SEC’s proxy rules (Rule 14a-8), the deadline for submission of proposals to be included in our proxy materials for the 2024
Annual Meeting is August 25, 2023. Accordingly, in order for a stockholder proposal to be considered for inclusion in our proxy materials
for the 2024 Annual Meeting in accordance with the SEC’s proxy rules, any such stockholder proposal must be received by our Corporate
Secretary on or before August 25, 2023, and comply with the procedures and requirements set forth in Rule 14a-8 under the Securities
Exchange Act of 1934, as well as the applicable requirements of our Bylaws. Any stockholder proposal received after August 25, 2023 will
be considered untimely, and will not be included in our proxy materials. In addition, stockholders interested in submitting a proposal
outside of Rule 14a-8 must properly submit such a proposal in accordance with our Bylaws. To comply
with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than
the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange
Act of 1934 no later than December 10, 2023.
Our
Bylaws require advance notice of business to be brought before a stockholders’ meeting, including nominations of persons for election
as directors. Pursuant to our Bylaws, the date after which notice to the Company of a stockholder proposal submitted outside the process
of Rule 14a-8 is considered timely is as follows, provided that such notice meets the information and other requirements set forth in
our Bylaws:
| |
● |
A stockholder seeking to
have a proposal, including nominations of persons for election as directors, included in the Company’s proxy materials must
deliver written notice to the Company of such proposal between June 26, 2023 and August 25, 2023, unless the date of the 2024 Annual
Meeting is more than 30 days before or after the one-year anniversary of the Annual Meeting, in which case such notice must be delivered
to the Company on the later of the 90th day before the date of the 2024 Annual Meeting or the 15th day following the day on which
public announcement of the date of the 2024 Annual Meeting is first made. |
| |
|
|
| |
● |
A stockholder not seeking
inclusion of a proposal in the Company’s proxy materials must deliver written notice to the Company not less than 90 days before
the date of the 2024 Annual Meeting. |
If
a stockholder that has notified the Company of its intention to present a proposal at the 2024 Annual Meeting does not appear or send
a qualified representative to present his proposal at the 2024 Annual Meeting, the Company need not present the proposal for a vote at
the 2024 Annual Meeting.
HOUSEHOLDING
OF ANNUAL MEETING MATERIALS
We
have adopted “householding,” a procedure approved by the SEC under which stockholders who share an address will receive a
single copy of the Important Notice Regarding the Availability of Proxy Materials and, if applicable, the proxy materials. This procedure
reduces printing costs and mailing fees, while also reducing the environmental impact of the distribution of documents related to the
Annual Meeting. If you reside at the same address as another PURE Bioscience stockholder and wish to receive a separate copy of the Important
Notice Regarding the Availability of Proxy Materials and, if applicable, the proxy materials, you may submit a written or oral request
to: Attn: Corporate Secretary, PURE Bioscience, Inc., 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730, telephone (619) 596-8600. Upon
your request, we will promptly deliver a separate copy to you. Stockholders who participate in
householding will continue to have access to and utilize separate proxy voting instructions. The Proxy Statement and our Annual
Report are also available at www.proxyvote.com.
Some
brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary
instructions have been received from the affected stockholders.
Once
you have received notice from your broker that they will be householding materials to your address, householding will continue until
you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would
prefer to receive a separate proxy statement or notice, please notify your broker directly. You may also call (800) 542-1061 or write
to: Householding Department, Broadridge, 51 Mercedes Way, Edgewood, New York 11717, and include your name, the name of your broker or
other nominee, and your account number(s). Any stockholders who share the same address and currently receive multiple copies of the Important
Notice Regarding the Availability of Proxy Materials and, if applicable the Annual Meeting materials who wish to receive only one copy
in the future may contact their bank, broker, or other holder of record, or PURE Bioscience at the contact information listed above,
to request information about householding.
ANNUAL
REPORT
Our
Annual Report to Stockholders, which contains our Annual Report on Form 10-K for the year ended July 31, 2022, which we filed with the
SEC on October 28, 2022, will also be made available (without exhibits), free of charge, to interested stockholders upon written request
to PURE Bioscience, Inc., 9669 Hermosa Avenue, Rancho Cucamonga, CA 91730, Attention: Corporate Secretary. The Annual Report on Form
10-K is not incorporated into this Proxy Statement and is not considered to be proxy-soliciting material.
| |
BY ORDER OF THE BOARD OF DIRECTORS |
| |
|
| |
/s/ Tom
Y. Lee, CPA |
| December 23, 2022 |
Chief Executive Officer |
PURE Bioscience (PK) (USOTC:PURE)
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