United States securities and exchange commission logo
June 16, 2020
David G. Watumill
President and Chief Executive Officer
CARDAX, INC.
2800 Woodlawn Drive Suite 129
Honolulu, Hawaii 96822
Re: CARDAX, INC.
Form 10-K for the
Fiscal Year Ended December 31, 2019
Filed March 30,
2020
File No. 333-181719
Dear Mr. Watumill:
We have reviewed your June 5, 2020 response to our comment letter
and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
May 21, 2020 letter.
Form 10-K for the Fiscal Year Ended December 31, 2019
Item 9A. Controls and Procedures, page 54
1. Please revise the
proposed disclosure in response to comment 1, to provide a separate
evaluation of your
disclosure controls and procedures pursuant to Item 307 of Regulation
S-X along with a
Management's report on your internal controls over financial reporting
pursuant to Item 308 of
Regulation S-K. In addition, please address the second part of
comment 1 relating to
how the omission of these required disclosures impacts your
conclusion with respect
to the effectiveness of the disclosure controls and procedures as of
December 31, 2019.
David G. Watumill
FirstName LastNameDavid G. Watumill
CARDAX, INC.
Comapany NameCARDAX, INC.
June 16, 2020
Page 2
June 16, 2020 Page 2
FirstName LastName
Notes to the Consolidated Financial Statements
Note 2- Summary of Significant Accounting Policies
Research and development, page F-11
2. We acknowledge your representations in your response to comment number
2 that, for the
years ended December 31, 2019 and 2018, substantially all of the
Company's in-house
scientific personnel's time and services supported aspects of your
business not directly or
indirectly related to research and development, and accordingly, the
compensation of your
in-house personnel was included as part of salaries and wages.
However, your proposed
disclosure appears to indicate that your in-house scientific personnel
spend considerable
time and services on research and development activities as defined in
ASC 730-10-20
and ASC 730-10-25-2e. For each of the statements in your proposed
disclosure below,
please clarify in the proposed disclosure that the time spent by your
in-house scientific
personnel is not material, as you appear to indicate in your response,
or revise your
composition of research and development expense in your Statement of
Operations in
future filings.
"In addition to directing or overseeing research and development
activities, our in-
house scientific personnel..."
"our in-house scientific personnel also support other aspects of our
business,
including ... as well as an analysis of available information on
astaxanthin, related
compounds, competing products, applications, and industry trends,
which helps to
inform management's business planning and public disclosure
assessments"
"has also presented our in-house scientific personnel with the
critical task of keeping
up-to-date on all of the latest information and interpreting and
integrating the findings
with our understanding of the mechanism of action and biological
applications of
astaxanthin and related carotenoids"
You may contact Mary Mast at (202) 551-3613 or Dan Gordon at (202)
551-3486 if you
have questions regarding comments on the financial statements and related
matters.
Sincerely,
Division of
Corporation Finance
Office of Life
Sciences