Cardax Inc.’s revenue plunged 47.3% in the first quarter as the health store chain selling its anti-inflammatory product ZanthoSyn worked through existing inventory and ramped up promotions.
The Honolulu-based company, which launched ZanthoSyn in August 2016, reported in a Securities and Exchange Commission filing Wednesday that revenue fell to $164,972 from $313,310 in the year-earlier period. The company, which has never made a profit, saw its loss for the January-March period widen to $1.1 million from $1 million in the year-earlier quarter.
Cardax began selling ZanthoSyn to General Nutrition Corp. stores in Hawaii on Jan. 25, 2017, and GNC stores across the United States on Aug. 10, 2017. The product is now available at more than 3,000 GNC corporate stores in the U.S.
”The decrease in revenues … was primarily attributed to a combination of … GNC selling through existing ZanthoSyn inventory we sold to GNC during the prior year, which impacted the timing and amounts of replenishment orders during the current period, and … increased promotional activities at GNC stores, which increased the sales discounts passed through to us during the current period,” Cardax said in the filing.
During the first quarter, Cardax raised additional capital to carry out its business plan by receiving $45,000 in gross proceeds through a private unit offering and issuing $1 million in debt. In April, following the end of the quarter, Cardax raised an additional $200,000 in another private unit offering and issued a $150,000 convertible note that later may be converted into shares.
The company had $73,355 in cash at the end of the first quarter.
Cardax’s stock fell 14.3%, or 2.5 cents, to 15 cents on Wednesday after the financial results were announced.
FIRST-QUARTER LOSS
$1.1 million
YEAR-EARLIER LOSS
$1 million
ON THE MOVE
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