Cardax Inc. said Tuesday that it is refocusing its business strategy on its anti-inflammatory astaxanthin dietary supplement ZanthoSyn and restructuring its board of directors as it seeks to reduce its corporate cost structure.
The Honolulu-based biopharmaceutical company, which announced last month that it was voluntarily suspending its reporting obligations with the U.S. Securities and Exchange Commission to reduce legal and accounting expenses, as well as management time, also said Tuesday it has reduced its employee head count and implemented other cost-saving measures to support the refocused business strategy.
Cardax said Chairman George W. Bickerstaff III, Terence A. Kelly, Michele Galen, Elona Kogan and Makarand Jawadekar have resigned effective immediately from the board of directors.
The company said the former directors are supportive of the corporate
refocus and that their departures are not the result of any disagreements with the company regarding its operations, policies or practices.
David G. Watumull, Cardax chief executive officer and director, has also been appointed chairman and serves as the company’s sole director. The company said it might seek additional directors with consumer health expertise.
In connection with the suspension of SEC reporting obligations, the company said its chief financial officer, John B. Russell, an independent contractor who previously took care of the company’s public reporting obligations, resigned to reduce corporate overhead.
Cardax Chief Operating Officer David M. Watumull, the son of the CEO, has assumed the additional role of chief financial officer.
The company said it is aiming to rebuild consumer sales with a reduced corporate cost structure to improve operating cash flow and achieve profitability. Cardax said attempts to
finance its continued development have been unsuccessful. The company said it might seek to monetize its pharmaceutical assets through licensing or sale and is engaged in discussions with third parties around this strategy.
“After careful consideration, we believe this refocused strategic direction provides the most efficient path to value creation and is in the best interests of our stakeholders,” David G. Watumull said in a statement. “We wholeheartedly thank our departing Board members and other former personnel for their years of dedicated service and insightful contributions. We will miss working with them.”
Cardax, which has never made a profit, last reported its financials for the quarter that ended March 31. In that report the company said its net loss widened to $1.4 million from a loss of $1 million in the year-earlier period and that its revenue had declined 27% to $104,574 from $142,813.
