The B.C. Securities Commission has issued its first investor warning about a company being “aggressively” promoted by marketers for its purported COVID-19-related initiatives.
Revive Therapeutics Ltd. is a Toronto-based junior company trading on the Canadian Securities Exchange and a reporting issuer in B.C.
The BCSC warning on Monday follows a similar alert on April 2 from Germany’s Federal Financial Supervisory Authority, as the company also trades on the Frankfurt Exchange.
The German regulator, according to the BCSC, is “warning that buy recommendations are currently being made on a large scale in the form of market letters and emails.
“The promotions in Germany make aggressive claims about Revive’s potential success in treating COVID-19 and the prospects of investors receiving large profits.”
Prior to the pandemic, Revive purported to be a cannabis and psychedelic life sciences company researching liver disease treatments via CBD (marijuana).
In February, the company also announced ventures into magic mushrooms.
Revive traded for as low as three cents per share last December, and on March 18 the company, with shares trading at five cents, announced it closed a private placement of 33.5 million five-cent units for $1.67 million.
The company subsequently issued a number of COVID-19 news releases in an apparent shift of priorities following the rapid escalation of the pandemic in the West.
On March 20, the company announced it would be “exploring” the use of a little-known drug as a “potential” treatment of COVID-19. Then, on March 24, the company announced hiring infectious disease expert Dr. David Boulware from University of Minnesota to assist its future clinical programs. The next day another news release was issued announcing a partnership with Pharm-Olam LLC to manage the firm’s COVID-19 studies. On March 30, the company’s COVID-19 research goals advanced further to, according to the news release, “seek to advance its product pipeline to human clinical studies.”
On April 2, shares more than doubled, to 12 cents per share, since its first COVID-19 news release on March 18.
Revive’s new CEO Michael Frank issued a new release April 3 distancing the company from the marketing and promotion companies making claims of profit.
Revive, stated Frank, “has learnt that buy recommendations and letters are being circulated in Germany. The Company, along with the Federal Financial Supervisory Authority of Germany (“BaFin”) suggests shareholders fully understand these materials.”
Frank stated, “Revive has not paid any compensation for activity that addresses target prices.”
Also on April 3, Frank issued another COVID-19 news release about the company filing a meeting request with the U.S. Food and Drug Administration.
Revive did pay for some publicity in B.C. via stock tout Equity Guru, which did not speak to potential profits in its March 30 article but rather addressed much of the information provided in Revive’s recent COVID-19-related news releases.
Revive’s accumulated deficit is $10.9 million, as of June 30, 2019. While reporting no revenue, its past president Fabio Chianelli and CEO Craig Leon, who both left the company last December, earned $250,000 each in annual salary, according to the 2019 audited financial statement. The company spent $124,808 on research costs and $285,727 on professional fees last year.
The BCSC stated that investors should “exercise caution when considering aggressive promotions as a basis for investment decisions as these promotions may make false claims of large profits. At this time, there is no vaccine or any health product that is authorized to treat or protect against COVID-19.”
More information about the BCSC’s response to the COVID-19 crisis is available here.