Cardax filed a form with the Securities and Exchange Commission that allows it to voluntarily suspend its period financial reporting requirements. As a result, the company “anticipates its common stock will be quoted on the OTC Pink Open Market (the ‘Pink Sheets’), although it can give no assurance that any broker will continue to make a market in the stock.”
The company claims the move is meant to save money on accounting functions that can be redirected toward business development. That includes marketing a dietary supplement based on synthetic astaxanthin branded as ZanthoSyn which is sold by GNC. The company reported that in the first quarter of 2021 it sold $104,574 worth of ZanthoSyn, compared to $142,813 the year previously. The company reported a net loss of $1.4 million in the first quarter and a full year loss for 2020 of more than $5 million.
“After weighing our options, we are voluntarily suspending our reporting obligations to make more efficient use of the Company's resources. The expected savings in legal fees, accounting costs, and management time should help us execute our core business strategies,” said CEO David G. Watamull.
Natural vs synthetic
Most astaxanthin on the market is derived from Haematococcus pluvialis algae or Phaffia yeast. Cardax’s dietary supplement is based on a synthesized form, which it characterizes as “pure astaxanthin prepared by natural product total synthesis.”
The Natural Algae Astaxanthin Association (NAXA) was formed eight years ago to draw a line between the various forms of astaxanthin. NAXA claimed the sterioisomer differences between the forms were profound enough that the scientific results backing the natural algae-derived forms could not be applied to the synthetic product.
Cardax says it had been planning a double-blind, placebo-controlled study on ZanthoSyn but that the research was interrupted by the COVID-19 pandemic when stay-at-home recommendations made it difficult to recruit new participants and schedule office visits. No further information was available on whether the research will resume.
Astaxanthin was not one of the supplement ingredients that benefited directly from pandemic-induced demand. Before the global pandemic hit in March the market for the ingredient appeared to be robust. Cardax said reduced orders from GNC is the primary reason for the falling ZanthoSyn revenues.
