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by Mike Caswell

The B.C. Securities Commission has found that Preveceutical Medical Inc. is not liable for disclosure failures with respect to a $6.5-million financing from 2018. Enforcement staff had claimed that Preveceutical did not tell investors that it would be spending about half of the money from that financing on consultants. A BCSC panel has ruled that the company's disclosure was misleading, but the "half-truth" had no significant effect on the market.

The finding is contained in a decision that the BCSC released on Thursday, May 2. The ruling, handed down by a three-member panel, applies to Preveceutical and to its chief executive officer, Stephen Van Deventer. It follows a hearing that the BCSC held over four days in October, 2023.

The case stems from a financing that Preveceutical arranged as it was researching biopharmaceutical technologies related to scorpion venom in 2018. At the time, the company's need for money was readily apparent, as it was spending $6-million per year and it expected that it would be 10 or more years before it developed a product that could be sent to market. On June 29, 2018, the company issued a news release in which it said that it had raised $6.5-million, issuing 130.7 million units at five cents. According to the news release, the company intended to use the money for research and development programs as well as general corporate purposes.

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