Maker of Cold-FX, former officials, pay for breaching Alberta security laws

By John Cotter, The Canadian Press

EDMONTON - The Alberta Securities Commission says the maker of Cold-FX cold remedy and some its former officials have paid a $690,000 settlement for breaching securities laws.

The commission names Afexa Life Sciences Inc. (TSX: FXA.TO), formerly known as CV Technologies Inc.

The officials include former CEO Jacqueline Shan and former chief financial officer Gordon Brown.

The ASC says the company wrongly stated its revenues in 2006 and early in 2007 as it launched its product into the U.S. market.

"They made a misstatement in their financial statements that didn't follow the rules," Mark Dickey, a commission spokesman, said Thursday.

"They wrongly recognized the revenue that they would generate from Cold FX sales from U.S. retailers."

The company also admits that it acted contrary to the public interest by not disclosing other information about its U.S. operations.

Cold-FX has used NHL legends such as Mark Messier and Don Cherry as pitchmen and is an official sponsor of the 2010 Vancouver Olympics.

Last April CV Technologies announced it was changing its corporate name to Afexa Life Sciences Inc. as part of a rebranding strategy.

Last year Shan stepped aside as chief executive officer and two individuals with the company were accused of insider trading.

The commission also said Thursday that Shan cannot be a director of the company for four years.

The company says that Cold-FX helps prevent cold and flu, but that claim has been debated in medical circles.

The substance was being reviewed by Canada's athletic banned substances certification program, although the product has been used by athletes attending previous Olympic games.

In the United States, it's marketed as a dietary supplement because the Food and Drug Administration hasn't approved its claims to bolster immune systems.

A study published in the Canadian Medical Association Journal found that a group of people who took Cold-FX came down with fewer respiratory infections than did a group taking a placebo, but further reviews of those studies suggested the methodology rendered the results suspect.