Tender Offer Statement by Issuer (sc To-i)
26 August 2017 - 6:56AM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
TO
TENDER
OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
PURE
BIOSCIENCE, INC.
(Name
of Subject Company (Issuer) and Filing Person (Offeror))
WARRANTS
TO PURCHASE COMMON STOCK
(Title of Class of Securities)
74621T209
(CUSIP Number of Common Stock Underlying Warrants)
Henry
R. Lambert
Chief Executive Officer
1725 Gillespie Way
El Cajon, California 92020
Phone: (619) 596-8600
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Filing Person)
WITH
COPY TO:
Jeffrey C. Thacker, Esq.
Ryan J. Gunderson, Esq.
Gunderson
Dettmer Stough Villeneuve
Franklin & Hachigian, LLP
3570
Carmel Mountain Rd., Suite 200
San Diego, California 92130
Tel: (858) 436-8064
Fax: (877) 881-9192
CALCULATION
OF FILING FEE:
Transaction valuation
(1)
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Amount of filing fee
(1)(2)
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$9,120,187
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$1,057.03
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(1)
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Estimated
for purposes of calculating the amount of the filing fee only. An offer to amend and exercise warrants to purchase an aggregate
of 7,664,022 shares of common stock (the “
Offer to Amend and Exercise
”), including: (i) outstanding warrants
to purchase 4,104,980 shares of the Company’s common stock issued to investors participating in the Company’s
private placement financing completed on August 29, 2014, as amended; (ii) outstanding warrants to purchase 1,986,101 shares
of the Company’s common stock issued to investors participating in the Company’s private placement financing completed
on November 23, 2015, as amended and (iii) outstanding warrants to purchase 1,572,941 shares of the Company’s common
stock issued to investors participating in the Company’s private placement financing completed on January 23, 2017.
The transaction value is calculated pursuant to Rule 0-11 using $1.19 per share of common stock, which represents the average
of the high and low sales price of the common stock on August 22, 2017, as reported by the OTCQB.
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(2)
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Calculated
by multiplying the transaction value by 0.0001159.
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[ ]
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Check
the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by registration statement number or the Form or Schedule and the date
of its filing.
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Amount
Previously Paid: N/A
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Form
or Registration Number: N/A
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Filing
Party: N/A
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Date
Filed: N/A
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[ ]
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Check
the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.
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Check
the appropriate boxes below to designate any transactions to which the statement relates:
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[ ]
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third
party tender offer subject to Rule 14d-1.
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[X]
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issuer
tender offer subject to Rule 13e-4.
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[ ]
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going
private transaction subject to Rule 13e-3.
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[ ]
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amendment
to Schedule 13D under Rule 13d-2.
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Check
the following box if the filing is a final amendment reporting the results of a tender offer: [ ]
The
alphabetical subsections used in the Item responses below correspond to the alphabetical subsections of the applicable items of
Regulation M-A promulgated under the federal securities laws.
If
applicable, check the appropriate box(es) below to designate the appropriate note provision(s):
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[ ]
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Rule
13e-4(i) (Cross-Border Issuer Tender Offer)
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[ ]
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Rule
14d-1(d) (Cross-Border Third-Party Tender Offer)
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TABLE
OF CONTENTS
EX-99(a)(1)(A)
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EX-99(a)(1)(B)
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EX-99(a)(1)(C)
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EX-99(a)(1)(D)
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EX-99(a)(1)(E)
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EX-99(a)(1)(F)
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EX-99(a)(1)(G)
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EX-99(a)(1)(H)
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EX-99(a)(5)(A)
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EX-99(a)(5)(B)
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EX-99(a)(5)(C)
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EX-99(a)(5)(D)
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EX-99(a)(5)(E)
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EX-99(a)(5)(F)
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EX-99(a)(5)(G)
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EX-99(a)(5)(H)
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EX-99(d)(1)
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EX-99(d)(2)
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EX-99(d)(3)
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Item
1. SUMMARY TERM SHEET
The
information under the heading “Summary of Terms” in the Offer to Amend and Exercise filed as Exhibit (a)(1)(B) to
this Schedule TO is incorporated herein by reference.
Item
2. SUBJECT COMPANY INFORMATION
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(a)
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The
name of the subject company (issuer) and filing person (offeror) is PURE Bioscience, Inc., a Delaware corporation (the “
Company
”).
The address and telephone number of its principal executive offices are 1725 Gillespie Way, El Cajon, California 92020, telephone
(619) 596-8600.
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(b)
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As
of August 17, 2017, the Company has: (i) outstanding warrants to purchase 4,104,980 shares of the Company’s common stock
issued to investors participating in the Company’s private placement financing completed on August 29, 2014, as amended
(the “
2014 Warrants
”); (ii) outstanding warrants to purchase 1,986,101 shares of the Company’s common
stock issued to investors participating in the Company’s private placement financing completed on November 23, 2015,
as amended (the “
2015 Warrants
”) and (iii) outstanding warrants to purchase 1,572,941 shares of the Company’s
common stock issued to investors participating in the Company’s private placement financing completed on January 23,
2017 (the “
2017 Warrants
”, and together with the 2014 Warrants and the 2015 Warrants, the “
Original
Warrants
”).
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Pursuant
to the Offer to Amend and Exercise, the Original Warrants will be amended (the “
Amended Warrants
”
)
to: (i) reduce the exercise price of the 2014 Warrants from $0.75 per share to $0.60 per share of common stock in cash, (ii)
reduce the exercise price of the 2015 Warrants from $0.45 per share to $0.40 per share of common stock in cash, (iii) reduce
the exercise price of the 2017 Warrants from $1.25 per share to $0.85 per share of common stock in cash, (iv) shorten the
exercise period of the Original Warrants so that they expire concurrently with the expiration of the Offer to Amend and Exercise
at 5:00 p.m. (Pacific Time) on September 25, 2017, as may be extended by the Company in its sole discretion (“
Expiration
Date
”) unless extended until the Subsequent Expiration Date (as defined below), (v) delete the cashless exercise
provisions in the Original Warrants and (vi) delete the price-based anti-dilution provisions contained in the 2015 Warrants.
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Additionally,
the Company is requesting the holders of a majority of the shares issuable upon exercise of the 2014 Warrants (the “
2014
Requisite Majority
”), 2015 Warrants (the “
2015 Requisite Majority
”) and 2017 Warrants (the “
2017
Requisite Majority
”) to approve an amendment of all of the outstanding 2014 Warrants, 2015 Warrants and 2017 Warrants,
respectively, to amend such Original Warrants in the same manner as set forth above (the “
Aggregate Warrant Amendment
”),
except the Expiration Date shall be extended until February 5, 2017 (the “
Subsequent Expiration Date
”).
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Pursuant
to the terms of the Original Warrants, if the 2014 Requisite Majority, 2015 Requisite Majority and/or 2017 Requisite Majority
approves the amendment to the outstanding 2014 Warrants, 2015 Warrants and/or 2017 Warrants, respectively, the amendments
set forth above will apply to all of the outstanding 2014 Warrants, 2015 Warrants and/or 2017 Warrants, respectively, regardless
of whether or not the individual holder of the Original Warrant voted in favor of the Aggregate Warrant Amendment. In such
case, each holder of an Original Warrant, as applicable, must exercise its Original Warrant by the Subsequent Expiration Date
or the Amended Warrant held by such holder will expire unexercised by its amended terms.
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Other
than set forth above, the terms of the Original Warrants will remain unmodified and in full force and effect
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As
of June 30, 2017, the Company had: (i) 62,943,153 shares of common stock outstanding; (ii) outstanding warrants to purchase
8,539,952 shares of common stock (comprised of the Original Warrants and other outstanding warrants); (iii) outstanding options
to purchase 5,308,832 shares of common stock (the “
Plan
”); and (iv) 1,110,000 shares of common stock issuable
upon vesting of restricted stock units under the Plan. In addition, the Company has reserved an additional 560,971 shares
of common stock for issuance pursuant to the Company’s Amended and Restated 2007 Equity Incentive Plan (the “
Plan
”).
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(c)
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No
trading market exists for the Original Warrants. Information about the trading market and price of the Company’s common
stock under Section 11: “Trading Market and Price Range of Common Stock” of the Offer to Amend and Exercise is
incorporated herein by reference.
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Item
3. IDENTITY AND BACKGROUND OF FILING PERSON
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(a)
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The
Company is the filing person and the subject company. The address and telephone number of each of the Company’s executive
officers and directors is c/o PURE Bioscience, Inc., 1725 Gillespie Way, El Cajon, California 92020, telephone (619) 596-8600.
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Pursuant
to General Instruction C to Schedule TO promulgated by the United States Securities and Exchange Commission (the “
SEC
”),
the following persons are executive officers, directors and/or control persons of the Company:
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Name
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Position(s)
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Henry
Lambert
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Chief
Executive Officer and Director
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Mark
Elliott
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Vice
President Finance
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Dave
Pfanzelter
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Chairman
of the Board
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Gary
Cohee
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Director
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William
Otis
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Director
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Tom
Lee
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Director
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Janet
Risi Field
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Director
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Franchise
Brands, LLC beneficially owns approximately 20,799,999 shares of the Company’s common stock, reflecting approximately 32%
of our outstanding common stock based on our records and our outstanding common stock as of June 30, 2017.
Item
4. TERMS OF THE TRANSACTION
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(a)
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Information
about the terms of the transaction under the headings “Summary of Terms” and “Description of Offer to Amend
and Exercise” of the Offer to Amend and Exercise is incorporated herein by reference.
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(b)
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See
Item 8 below for a description of the directors and affiliates who hold Original Warrants and who will have an opportunity
to participate in the Offer to Amend and Exercise on the same terms and conditions as the other holders of Original Warrants.
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Item
5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
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(e)
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The
Company entered into a Registration Rights Agreement pursuant to which the Company is obligated, upon request of investors
holding 75% of the Issuable Shares (as defined therein) and subject to certain conditions, to register the common stock underlying
the 2015 Warrants for resale by the holders thereof. A copy of the Registration Rights Agreement is included as Exhibit (d)(1)
to this Schedule TO.
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The
Company entered into a Registration Rights Agreement pursuant to which the Company was obligated, to register the common stock
underlying the 2017 Warrants for resale by the holders thereof. A copy of the Registration Rights Agreement is included as
Exhibit (d)(2) to this Schedule TO.
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See
Item 9 below for a description of the Company’s retention of Garden State Securities Inc. to serve as the Warrant Solicitation
Agents for the Offer to Amend and Exercise with respect to the 2017 Warrants.
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Item
6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
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(a)
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The
information about the purposes of the transaction under Section 2: “Purposes of the Offer to Amend and Exercise and
Use of Proceeds” of the Offer to Amend and Exercise is incorporated herein by reference.
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(b)
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If
an eligible holder elects not to participate in the Offer to Amend and Exercise and the 2014 Requisite Majority, 2015 Requisite
Majority and/or 2017 Requisite Majority approve the Aggregate Warrant Amendment, the 2014 Warrants, 2015 Warrants and/or 2017
Warrants, as applicable, will be amended pursuant to the terms of the Offer to Amend and Exercise and the Company will provide
notice to all holders of the Original Warrants, as applicable, notice of its receipt of approval by the applicable Requisite
Majority and such Original Warrants will expire unexercised on the Subsequent Expiration Date if not so exercised. Eligible
holders may only elect to amend and exercise
all
of their 2014 Warrants, 2015 and/or 2017 Warrants, as applicable,
if they elect to so amend and exercise such Original Warrants.
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(c)
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No
plans or proposals described in this Schedule TO or in any materials sent to the holders of the Original Warrants in connection
with this Offer to Amend and Exercise relate to or would result in the conditions or transactions described in Regulation
M-A, Item 1006(c)(1) through (10), except as follows:
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Any
holder of Original Warrants who elects to exercise his, her or its Original Warrants will acquire additional shares of common
stock of the Company as a result of such exercise. As of June 30, 2017, the Company had 62,943,153 shares of common stock
outstanding. The Original Warrants are exercisable for an aggregate of 7,664,022 shares of common stock. Assuming all Original
Warrants are exercised, the Company’s outstanding shares of common stock would increase to 70,607,175 shares, with the
shares issued upon exercise of the Original Warrants representing 10.9% of the then outstanding shares of common stock.
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Item
7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
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(a)
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Not
applicable.
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(b)
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Not
applicable.
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(d)
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Not
applicable.
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Item
8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
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(a)
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As
of August 17, 2017, there were outstanding Original Warrants to purchase an aggregate of 7,664,022 shares of common stock.
The Company’s executive officers, directors and control persons, as described below, hold the following Original Warrants
and will be entitled to participate in the Offer to Amend and Exercise on the same terms and conditions as the other holders
of Original Warrants:
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Name
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Position with the Company
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Number of
2014
Warrants Held
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Percentage of
2014
Warrants Held
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Number of
2015
Warrants held
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Percentage of
2015
Warrants Held
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Tom Lee
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Director
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319,999
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7.8
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%
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374,704
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18.9
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%
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William Otis
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Director
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9,066
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*
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-
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-
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David Pfanzelter
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Chairman of the Board
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16,000
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*
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-
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-
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* Less than 1%
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The
executive officer, directors and control persons of the Company do not hold any 2017 Warrants.
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Franchise
Brands, LLC, the Company’s largest stockholder, holds 2,133,333 2014 Warrants (approximately (approximately 49.9% of
the total 2014 Warrants) as of August 17, 2017.
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Except
as set forth above, none of the Company’s other executive officers, directors or control persons hold Original Warrants.
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(b)
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None
of our directors or executive officers participated in any transaction involving the Original Warrants during the past 60
days.
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Item
9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
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(a)
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We
have agreed to retain Garden State Securities Inc. to act as Warrant Solicitation Agent for the Offer to Amend and Exercise
with respect to the 2017 Warrants pursuant to an Engagement Agreement, dated August 21, 2017 attached as Exhibit (d)(3) to
this Schedule TO. The Warrant Solicitation Agent shall use best efforts to contact holders of the 2017 Warrants by mail, telephone,
facsimile, or other electronic means and solicit their participation in the Offer to Amend and Exercise. The Warrant Solicitation
Agent will receive a fee equal to 5% of the cash exercise prices paid by holders of the 2017 Warrants who participate in the
Offer to Amend and Exercise. As of August 17, 2017, the Warrant Solicitation Agent holds a warrant to purchase 117,647 shares
of the Company’s common stock that was issued as compensation for prior placement services provided in connection with
the private placement financing completed in January 2017.
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(b)
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We
intend to use the services of our officers and employees to solicit holders of the Original Warrants to participate in the
Offer to Amend and Exercise without additional compensation.
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Item
10. FINANCIAL STATEMENTS.
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(a)
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The
financial information required by Item 1010(a) is included under Section 16 “Historical and Pro-Forma Financial Information
Regarding the Company” of the Offer to Amend and Exercise, as amended and supplemented, is incorporated by reference.
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(b)
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The
pro forma financial information required by Item 1010(b) is included under Section 16 “Historical and Pro-Forma Financial
Information Regarding the Company” of the Offer to Amend and Exercise, as amended and supplemented, is incorporated
by reference.
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Item
11. ADDITIONAL INFORMATION.
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(a)
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(1)
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Except
as set forth in Items 8 and 9 above, there are no present or proposed contracts, arrangements, understandings or relationships
between the Company and its executive officers, directors or affiliates relating, directly or indirectly, to the Offer to
Amend and Exercise.
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(2)
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Except
with respect to the Post-Effective No. 1 to Registration Statement on Form S-1 (File No. 333-215915), filed on or about the
date of this Schedule TO, which registers the resale of shares of the Company’s common stock and the issuance and resale
of the shares of common stock underlying the 2017 Warrants and is listed as an exhibit under Item 12 and described in the
Offer to Amend and Exercise, there are no applicable regulatory requirements or approvals needed for the Offer to Amend and
Exercise.
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(3)
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There
are no applicable anti-trust laws.
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(4)
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The
margin requirements of Section 7 of the Securities Exchange Act of 1934, as amended, and the applicable regulations are inapplicable.
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(5)
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None.
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(b)
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Not
applicable.
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(c)
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None.
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Item
12. EXHIBITS.
The
following are attached as exhibits to this Schedule TO:
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(a)
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(1)(A)
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Letter
to Holders of Original Warrants
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(1)(B)
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Offer
to Amend and Exercise
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(1)(C)
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Form
of Election to Participate and Exercise Warrant and Approve Aggregate Warrant Amendment Offer
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(1)(D)
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Form
of Notice of Withdrawal
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(1)(E)
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Form
of Notice of Approval of Aggregate Warrant Amendment Offer
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(1)(F)
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Form
of 2014 Amended Warrant
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(1)(G)
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Form
of 2015 Amended Warrant
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(1)(H)
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Form
of 2017 Amended Warrant
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(5)(A)
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Annual
Report on Form 10-K containing audited financial statements for the fiscal years ended July 31, 2016 and 2015 (as filed with
the SEC on October 27, 2016 and incorporated herein by reference)
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(5)(B)
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Quarterly
Report on Form 10-Q for the quarter ended October 31, 2016 (as filed with the SEC on December 14, 2016 and incorporated herein
by reference)
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(5)(C)
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Quarterly
Report on Form 10-Q for the quarter ended January 31, 2017 (as filed with the SEC on March 2, 2017 and incorporated herein
by reference)
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(5)(D)
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Quarterly
Report on Form 10-Q for the quarter ended April 30, 2017 (as filed with the SEC on June 8, 2017 and incorporated herein by
reference)
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(5)(E)
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Form
of 2014 Warrant (incorporated by reference to Exhibit 4.1 to the Company’ Current Report on Form 8-K, as filed with
the SEC on August 27, 2014)
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(5)(F)
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Form
of 2015 Warrant (incorporated by reference to Exhibit 4.11 to the Company’ Annual Report on Form 10-K, as filed with
the SEC on October 28, 2015)
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(5)(G)
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Form
of 2017 Warrant (incorporated by reference to Exhibit 4.1 to the Company’ Current Report on Form 8-K, as filed with
the SEC on December 7, 2016)
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(5)(H)
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Post-Effective
No. 1 to Registration Statement on Form S-1 (File No. 333-215915), filed on or about the date of this Schedule TO, which registers
the issuance of the shares of common stock underlying the 2017 Warrants (as filed with the SEC on February 6, 2017 and incorporated
herein by reference)
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(b)
|
Not
applicable.
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(d)
|
(1)
Registration Rights Agreement, dated October 8, 2015, by and between the Company and the purchaser party thereto (incorporated
by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10-K, as filed with the SEC on October 28, 2015)
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(2)
Registration Rights Agreement, dated December 1, 2016, by and between the Company and the parties thereto (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 10-K, as filed with the SEC on December 7, 2017)
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(3)
Engagement Agreement, dated as of August 21, 2017, by and between the Company and Garden State Securities Inc.
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(g)
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None.
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(h)
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None.
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Item
13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
Not
Applicable.
SIGNATURE
After
due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete
and correct.
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PURE BIOSCIENCE, INC.
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By:
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/s/
Henry R. Lambert
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Name:
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Henry R. Lambert
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Title:
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Chief Executive Officer
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(Principal
Executive Officer)
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Date:
August 25, 2017
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