HONOLULU, May 14, 2021 /PRNewswire/ -- Cardax, Inc. (OTCQB:CDXI) reported its Q1 2021 results. Highlights:
Financial Results. Operating loss decreased from $906,031 in Q1 2020 to $771,312 in Q1 2021 primarily due to reduced salaries & wages, professional fees, stock based compensation, and selling, general, & administrative expenses. Other expenses increased from $96,837 in Q1 2020 to $610,806 in Q1 2021, primarily due to a non-cash reduction in the gain from modification of debt instruments and a non-cash change in the fair value of the derivative liability. Net loss increased from $1,002,868 in Q1 2020 to $1,382,118 in Q1 2021.
ZanthoSyn® Sales. Cardax net revenues from ZanthoSyn®, the Company's astaxanthin dietary supplement, decreased from $142,813 in Q1 2020 to $104,574 in Q1 2021, resulting primarily from reduced orders by the Company's largest customer, General Nutrition Corporation ("GNC"). The Company believes the reduction in orders as well as decrease in sell-through at GNC stores was driven primarily by COVID-19 related impacts on GNC store sales and the reduced store count resulting from GNC's reorganization in 2020.
Funding Activities. Cardax raised $661,359 in Q1 2021, primarily through notes and convertible notes, compared to $770,000 in Q1 2020. The proceeds were used for general corporate purposes, issuance costs, and debt servicing. In late April 2021, the Company received $500,000 from the Small Business Administration's Economic Injury Disaster Loan program, with repayment amortized at an interest rate of 3.75% over 30 years and first payment due in October 2022.
Funding Opportunities. Cardax is seeking financing for development of CDX-101, the Company's lead pharmaceutical candidate, as well as creation of additional sales channels for ZanthoSyn®. The Company is actively engaged in discussions with multiple funding sources, but there can be no assurance that any such financing transaction will be completed on acceptable terms, or at all. The previously submitted COVID-19 federal grant was not funded this review cycle and the Company is evaluating the feasibility of pursuing other COVID-19 funding opportunities.
CHASE Study. The Cardiovascular Health Astaxanthin Supplement Evaluation ("CHASE") study is the Company's randomized, double-blind, placebo-controlled trial evaluating the cardiovascular health benefits of ZanthoSyn® in subjects with documented cardiovascular risk factors. In March 2020, Cardax suspended recruitment of new subjects and study visits for existing subjects due to the COVID-19 pandemic and the related governmental "stay-at-home" orders. Recruitment and study visits remain suspended at this time and the Company is evaluating its options regarding the future of the trial.
COVID-19 Impact. The Company believes that its operations, including revenues and any public or private offerings, will continue to be affected by the ongoing COVID-19 pandemic, although the extent of the impact is uncertain at this time. The Company would again like to thank its shareholders, employees, contractors, advisors, and professional service providers for their efforts during these challenging times.
"We continue to seek financing to advance our business strategy and are pleased that discussions with multiple funding sources are progressing based on our strong scientific fundamentals," said David G. Watumull, Cardax CEO.
Cardax is a biopharmaceutical company primarily focused on the development of pharmaceuticals for diseases driven by inflammation. The Company also has a commercial business unit that markets ZanthoSyn®, a physician recommended astaxanthin dietary supplement for inflammatory health.* CDX-101, the Company's astaxanthin pharmaceutical candidate, is being developed for cardiovascular inflammation and dyslipidemia, with a target initial indication of severe hypertriglyceridemia. CDX-301, the Company's zeaxanthin pharmaceutical candidate, is being developed for macular degeneration. CDX-101 and CDX-301 are currently in pre-clinical development, including the planning of IND enabling studies. The safety and efficacy of the Company's pharmaceutical candidates have not been directly evaluated in clinical trials or confirmed by the FDA.
This release may contain certain forward-looking statements regarding our prospective performance and strategies within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of said safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies, and expectations of our company, are generally identified by use of words "anticipate," "believe," "estimate," "expect," "intend," "plan," "project," "seek," "strive," "try," or future or conditional verbs such as "could," "may," "should," "will," "would," or similar expressions. Our ability to predict results or the actual effects of our plans or strategies is inherently uncertain, including without limitation the potential to be awarded any grant funding as described in this release as well as the effects that COVID-19 may have on our financing, sales, or any other aspect of our business, financial condition, or results of operations. Accordingly, actual results may differ materially from anticipated results. Some of the factors that could cause our actual results to differ from our expectations or beliefs include, without limitation, the risks discussed from time to time in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Except as required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
* These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.