Hawaii-based biotech firm Cardax Inc. continues to bleed cash, is delaying payments to employees and plans to sell more stock to fund operations.
The company, which is developing "nutraceutical" and pharmaceutical products that would provide many of the anti-inflammatory benefits of steroids, said in a filing Friday with the U.S. Securities and Exchange Commission that it intends to raise additional capital that would fund its operations through at least the end of this year.
Cardax said it is negotiating the terms of additional financing with investors and is considering a private placement of its common stock and warrants to purchase common stock.
Cardax, which is a development-stage company with no revenue, reported in a 10-K filing that its losses more than quadrupled to $17 million in 2014 from $4.4 million in the previous year.
In January, Cardax disclosed it reached an agreement with its employees and executives to defer cash payment of compensation until the company has sufficient cash resources. Cardax said that as of Thursday it had nine full-time employees dedicated to its consumer health and pharmaceutical business.
President and Chief Executive Officer David Watumull, 65, received a pay package of $495,337 in 2014, including a base salary of $484,891 that includes the payment of salary accrued in prior years, according to the filing.
Since its inception in 2006, Cardax has funded its operations by issuing securities, and has accumulated a total deficit of just under $50 million. The company reported that at the end of 2014 it had $35,696 in cash, down from $222,410 at the end of 2013.
Cardax, which is thinly traded, rose 1 cent to 32 cents Monday on the over-the-counter market. The stock did not trade Tuesday.
