LAS VEGAS--(BUSINESS WIRE)--Jan. 5, 2006--AXM Pharma, Inc. (Amex: AXJ) ("AXM"), a manufacturer of proprietary and generic pharmaceutical and nutraceutical products for the Chinese and other Asian markets, announced today that it has received notification from The Securities and Exchange Commission ("SEC") that it has commenced a formal investigation to determine if AXM Pharma, Inc., and unnamed persons formerly and currently associated with the Company, violated the federal securities laws. Pursuant to a Formal Order of Investigation issued on December 8, 2005 and made available to the Company on December 29, 2005, the SEC staff is seeking to determine if SEC filings and press releases issued by AXM, including for the period from April 2005 through October 2005, contained false and misleading statements of material fact regarding the Company's revenues, expenses, earnings and losses. In addition, the SEC staff is investigating, among other things, whether or not, for the relevant time period, AXM failed to keep required books and records, failed to devise and maintain sufficient internal accounting controls, falsified books and records and made false and misleading statements to its independent accountants.
