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United States securities and exchange commission logo
February 4, 2022
Christopher McElvany
Chief Executive Officer
Lucy Scientific Discovery, Inc.
301-1321 Blanshard Street
Victoria, British Columbia V8W 0B6 Canada
Re: Lucy Scientific
Discovery, Inc.
Registration
Statement on Form S-1
Filed January 21,
2022
File No. 333-262296
Dear Mr. McElvany:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Unless we note
otherwise, our references to prior comments are to comments in our
October 26, 2021 letter.
Registration Statement on Form S-1 filed January 21, 2022
Prospectus Summary
Overview, page 1
1. We note your response
to prior comment 1. Please revise the Overview to disclose that
your business plan
depends on the occurrence of regulatory changes for psychotropics-
based medicines market,
that Health Canada has not approved psilocybin, psilocin, N,N-
DMT, mescaline, MDMA,
LSD, and 2C-B as a drug for any indication and it is illegal to
possess without a
prescription, and that in the United States the products you intend to
produce are Schedule I
Controlled Substances under the CSA and that you would be
dependent on the FDA
rescheduling. Please also discuss the consequences if the FDA
does not reschedule and
the possibility that you may be subject to quotas.
Christopher McElvany
Lucy Scientific Discovery, Inc.
February 4, 2022
Page 2
2. Please remove statements indicating or implying that psychedelic drugs
are effective,
including, but not limited to the following:
"Recent research involving the testing of psychedelics and
psychotropics has resulted
in a promising clinical trial outcomes with respect to a variety
of conditions and
disorders. Many of these trials are targeting direct replacements
for current
pharmaceuticals, some of which are considered substandard and
ineffective."
"We believe these efforts are largely fueled by a number of
factors including:"
"the efficacy of psychotropic treatment therapies on various
mental health and
addiction disorders relative to traditional treatment options;"
and
"promising clinical outcomes and increasing public support
spurring global
regulatory change."
Conclusions related to efficacy are within the sole authority of the
FDA or equivalent
foreign regulator. Until such regulator has approved a psychedelic
drugs for the treatment
of any disorders, it is not appropriate to indicate that the clinical
trials are promising. In
an appropriate location in your document, you may provide examples of
ongoing studies
of psychedelic drugs with the objective data from such trials without
drawing the
conclusion that such trials are successful or promising. Additionally,
it is inappropriate to
draw direct comparisons to products that are approved to treat certain
indications. You
may provide objective results from trials comparing products in
clinical trials to approved
products if head to head trials were conducted. Such disclosures
should indicate the
parties conducting such trials, the relevant indications and
protocols.
Risk Factors
Our business could expose us to potential product liability and other liability
risks, page 28
3. We note your response to prior comment 6 and your revised disclosure
that you may not
be able to qualify for product liability insurance "due to the early
stage of development of
the psychedelics industry." Please clarify why the early stage
development of the
psychedelics industry would cause you not to be able to qualify for
product liability
insurance. To the extent that your inability to qualify for product
liability insurance is
based on the controlled substance status of your products in Canada,
the United States and
most other jurisdictions, please make this clear.
Market and Industry Data, page 62
4. We note your response to prior comment 7 and reissue. Your statement
cautioning
investors not to give undue weight to estimates and projections and your
statement that
you have not independently verified the accuracy or completeness of the
data contained in
FirstName LastNameChristopher McElvany
industry publications and reports imply a disclaimer of responsibility
for this information
Comapany
in theNameLucy Scientific
registration Discovery,
statement. Inc. revise this section to
remove such implication
Please either
or 4,
February specifically
2022 Pagestate
2 that you are liable for all information in the
registration statement.
FirstName LastName
Christopher McElvany
FirstName LastNameChristopher
Lucy Scientific Discovery, Inc. McElvany
Comapany4,NameLucy
February 2022 Scientific Discovery, Inc.
February
Page 3 4, 2022 Page 3
FirstName LastName
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations, page 74
5. We reference the disclosure on page 73 that you expect to continue to
incur significant
research and development expenses over the next several years.
Considering this, please
revise to disclose why you did not record any research and development
expense for the
year ended June 30, 2021, or the three months ended September 30,
2021. In addition,
revise to include a discussion about the nature of selling, general
and administrative
expense incurred during the periods presented with a discussion of the
reasons for any
material fluctuations from the prior period.
Consolidated Financial Statements for the Years Ended June 30, 2021 and 2020
Note 2. Restatement, page F-8
6. Revise to include all of the disclosures required by ASC 250-10-50-7,
including effect of
the error corrections on each financial statement line item.
Note 10. Stockholder's Equity
Share Capital, page F-17
7. Reference the disclosure that on December 1, 2021 you authorized an
18:1 reverse stock
split of its issued and outstanding Class B common stock. Please
revise to disclose that
you retroactively restated all share and per share information.
Stock Options , page F-19
8. Refer to prior comment 13. Please revise to disclose the total
compensation cost related to
nonvested awards not yet recognized as of the latest balance sheet
date presented and the
weighted-average period over which it is expected to be recognized as
required by ASC
718-10-50-2(i). Also, since your stock is not actively traded, revise
to disclose how you
determined the value of the underlying common stock as an input to the
Black Scholes
option pricing model.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
Christopher McElvany
Lucy Scientific Discovery, Inc.
February 4, 2022
Page 4
You may contact Kristin Lochhead at 202-551-3664 or Terence O'Brien at
202-551-3355
if you have questions regarding comments on the financial statements and
related matters.
Please contact Jeffrey Gabor at 202-551-2544 or Suzanne Hayes at 202-551-3675
with any other
questions.
Sincerely,
FirstName LastNameChristopher McElvany
Division of
Corporation Finance
Comapany NameLucy Scientific Discovery, Inc.
Office of Life
Sciences
February 4, 2022 Page 4
cc: Andrew Hulsh, Esq.
FirstName LastName