Cardax revenue doubles but loss widens

Cardax Inc.’s revenue jumped 71 percent in the third quarter as sales of its new anti-inflammatory product remained strong in Hawaii and accelerated in California, Nevada and New York.

The Honolulu-based company, which launched ZanthoSyn in August 2016, generated $549,540 in sales during the July-September period compared with $321,861 in the year-earlier quarter. Cardax began selling its product to General Nutrition Corp. stores in Hawaii on Jan. 25, 2017, and GNC stores across the United States on Aug. 10, 2017.

“We’re very pleased with the results of sales and marketing efforts at GNC, and we continue to see strong accelerations of our sales as a result,” President and CEO David Watumull said.

Despite higher sales, Cardax saw its quarterly loss more than double in the period to $928,888 from $363,156 on increased operating expenses in most categories, according to a company filing Tuesday with the Securities and Exchange Commission.

Cardax, which has raised cash by issuing securities in its operations, raised an additional $1.44 million in gross proceeds through the exchange of 9.6 million warrants during a warrant exchange offering that closed July 27. The warrants entitle the holders to purchase Cardax stock at a specific price until the expiration date.

Since inception in March 2010, the company has had a loss of about $61 million. Cardax has never had a quarterly profit due to the costs involved in researching and marketing the product. Cardax had $198,574 in cash as of Sept. 30.

“It (the accumulated deficit) is not a liability and does not have to be paid back,” Watumull said. “It represents, to a large part, the expenditure of the investment dollars that have been made in the company.”

Cardax’s stock was unchanged at 21 cents before it announced its financial results after the close of the market.

THIRD-QUARTER LOSS

$928,888

YEAR-EARLIER LOSS

$363,156