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United States securities and exchange commission logo
October 26, 2021
Christopher McElvany
Chief Executive Officer
Lucy Scientific Discovery, Inc.
301-1321 Blanshard Street
Victoria, British Columbia V8W 0B6 Canada
Re: Lucy Scientific
Discovery, Inc.
Draft Registration
Statement on Form S-1
Submitted September
28, 2021
CIK No. 0001865127
Dear Mr. McElvany:
We have reviewed your draft 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 providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. 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 the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Prospectus Summary
Overview, page 1
1. We note your disclosure
here and elsewhere in the prospectus that your future plans for
your business depend
upon further approvals from Health Canada. Please revise here and
throughout the
prospectus to disclose that there is no guarantee that you will be able to
receive such approvals.
Please also revise to disclose here and in the Business section
whether and how you
would be able to generate revenue should you not receive any
additional approvals
from Health Canada.
Christopher McElvany
FirstName LastNameChristopher
Lucy Scientific Discovery, Inc. McElvany
Comapany
October 26,NameLucy
2021 Scientific Discovery, Inc.
October
Page 2 26, 2021 Page 2
FirstName LastName
2. Please revise to disclose here and in the Business section, if true,
that the APIs and other
products that you plan to produce would only be authorized for sale in
Canada for clinical
testing purposes in an institution, for the purpose of
determining the hazards and
efficacy of the drug, and for laboratory research in an institution by
qualified investigators
since they are restricted drugs on the Schedule to Part J of the
Canadian Food and Drug
Regulations and that sales of the APIs in Canada for commercial
purposes are
currently prohibited.
3. Please revise to disclose here and in the Business section, if true,
that you have yet to
manufacture any psychedelics-based products, have not yet sold any
products and have
yet to generate any revenue.
4. We note your disclosure on page 2 that you expect to submit a license
amendment to
Health Canada to permit you to sell your products to qualified clients
once your
production facilities are fully built out and functioning. Please
revise to disclose here and
in the Business section when you anticipate making that submission and
to whom you
would be allowed to sell.
Our Business Strategy, page 2
5. Please revise here and in the Business section to briefly describe the
steps that you have
taken to date to commence your business and any obstacles involved
before you can
commence the planned operations. Please include any contingencies such
as raising
additional funds and the timelines and associated costs accompanying
each proposed step
in your business plan so that an investor can get a clearer
understanding of how and when
you expect to generate revenue.
Risk Factors
Our business could expose us to potential product liability and other liability
risks, page 25
6. Please revise to clarify why you may not be able to qualify for
product liability insurance
coverage.
Market and Industry Data, page 54
7. We note your statement regarding market data used in the prospectus
cautioning
investors "not to give undue weight" to estimates. This statement
appears to imply a
disclaimer of responsibility for this information in the registration
statement. Please either
revise this section to remove such implication or specifically state
that you are liable for
all information in the registration statement.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Critical Accounting Policies and Estimates, Share Based Payments, page 71
8. Once you have an estimated offering price or range, please explain to
us the reasons for
any differences between the recent valuations of your common stock
leading up to the
Christopher McElvany
FirstName LastNameChristopher
Lucy Scientific Discovery, Inc. McElvany
Comapany
October 26,NameLucy
2021 Scientific Discovery, Inc.
October
Page 3 26, 2021 Page 3
FirstName LastName
initial public offering and the estimated offering price. This
information will help facilitate
our review of your accounting for equity issuances including stock
compensation. Please
discuss with the staff how to submit your response.
Business
Psychotropic Therapies Yield Promising Results, page 76
9. Please balance the disclosure in this section by disclosing that only
a limited number of
psychedelics-based medicines have been approved by Health Canada and
the FDA.
Certain Relationships and Related Party Transactions, page 117
10. Please file the convertible promissory note with Downwind Investments,
LLC and the
Stipancic Settlement Agreement as exhibits or tell us why you do not
believe it is
required.
Principal Shareholders, page 125
11. Please revise your disclosure to identify the natural person or
persons who have voting
and investment control of the shares held by Astatine Capital Ltd.,
DPL Capital
Inc., Profis Investment Corporation, Roma Ventures, LLC, Roxy Capital,
Inc.
and Theseus Capital Ltd.
Consolidated Financial Statements for the Year ended June 30, 2020
Note 5. Notes Payable, page F-12
12. Please tell us how you considered ASC 470-50-40-2 in recording a gain
from
extinguishment of debt issued to a Company controlled by the former
CEO and
stockholder of the Company.
Note 6. Stockholder's Equity
Stock Options, page F-15
13. For each share-based payment arrangement, please revise to present all
required
disclosure under ASC 718-10-50. For example, we do not see the
disclosures required by
ASC 718-10-50-2(c)(2), including any disclosure about the vesting of
the options that are
outstanding at June 30, 2020.
General
14. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
Christopher McElvany
Lucy Scientific Discovery, Inc.
October 26, 2021
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 Ada D. Sarmento at 202-551-3798 or Jeffrey Gabor at
202-551-2544
with any other questions.
Sincerely,
FirstName LastNameChristopher McElvany
Division of Corporation
Finance
Comapany NameLucy Scientific Discovery, Inc.
Office of Life Sciences
October 26, 2021 Page 4
cc: Andrew Hulsh, Esq.
FirstName LastName