Andrew Gardner, the Waterloo, Ont. entrepreneur behind the magnetic Polar Pen, says he stands to lose around $100,000 after a cease and desist order from Health Canada.
Gardner, 27, invented the segmented pen, which is made with strong rare earth magnets. He raised almost $1 million to manufacture the pen through the crowdsourcing website Kickstarter.
Now Health Canada has issued a cease and desist order on Gardner's pen, based on what the federal agency says are health concerns about the small magnets.
"I stand to personally lose a hundred thousand dollars. And that's not business money, so it's not like my business will be out a hundred thousand dollars worth of sales, like we will go into debt a hundred thousand dollars," said Gardner.
Gardner had already invested money to mass produce the pen.
"We've pushed forward to start manufacturing here in Waterloo. So now we have basically a hundred thousand dollars invested into producing products for people that have bought it and now we feel we will probably have to [give them a] refund."
Gardner says he'll likely have to refund the about $1 million total earned through Kickstarter.
In a letter, Health Canada wrote that the magnets can be harmful and even deadly if swallowed by children.
"The results of swallowing small powerful magnets can be very serious and life-threatening," the letter said. "Swallowing incidents have often resulted in considerable damage to the gastrointestinal tissues and required emergency surgical treatment and extended hospitalization. For survivors, there can be serious long-term health consequences."