Cold-fX maker fined by Alberta Securities Commission
The Alberta Securities Commission has fined the Edmonton-based manufacturer of cold and flu remedy Cold-fX $740,000 in relation to the failed launch of the product in the U.S. in 2006.
Penalties and costs were levied against Afexa Life Sciences, then known as CV Technologies, and five former company officials.
In the settlement with the securities commission, Afexa acknowledged it overstated revenue in its 2006 year-end and first-quarter 2007 financial statements. Cold-fX products distributed in the United States were listed as revenue without taking into account the large amounts that were later returned unsold.
"What we have as background to this situation is two sets of financial statements issued by Afexa — CV Technologies as it was then known — back in 2006 and early 2007 which contained overstatements of sales revenues," said John Petch, the director of enforcement for the securities commission.
The company filed financial restatements with the adjusted information in June 2007.
Afexa agreed to pay $440,000 in penalties and costs as part of the settlement. Former CEO Jacqueline Shan paid $125,000 and will not be a director or officer of a public company for five years. She is allowed to continue in her current role as the chief scientific officer for Afexa.
The company's former chief financial officer Gordon Brown and three audit committee members were also fined penalties and costs.
Brown has also agreed not to act as a director or officer of a public company for four years.