Lucy Scientific Anticipates Sharp Losses Amidst Regulatory and Operational Costs

LOS ANGELES- Lucy Scientific Discovery Inc. has been in the spotlight, not for its recent acquisitions but for missing its annual report filing deadline with the U.S. Securities and Exchange Commission (SEC). While the company has kept its investors in the loop about anticipated losses, the official documents are expected to be filed by Oct. 15.

The recent months have been eventful for Lucy, highlighted by the acquisition of Blue Sky Wellness and the cannabis media giant, High Times Holding Corp.

Operating Loss According to their preliminary figures, Lucy predicts an operating loss of roughly $5.84 million for the fiscal year ending June 30, 2023. This is a substantial increase from the previous year’s operating loss of $3.47 million ending June 30, 2022. The company’s cited reasons for this uptick in losses include amplified selling, general, and administrative costs, which are inherent to functioning as a public entity. These costs encompass audit-related, legal, regulatory, and tax services imperative for abiding by SEC regulations and other exchange-associated expenses.

In addition, Lucy has forecasted about $1 million in non-cash expenses that were channeled towards consulting services and a significant donation to a research foundation, all within the year concluding this past June.

Net Loss On the net loss front, Lucy’s prognosis isn’t optimistic either. The company anticipates reporting a net loss of nearly $8.99 million for the year ended June 30, 2023, a stark contrast to the net loss of $5.86 million in 2022. This loss can be primarily attributed to the aforementioned increase in operating loss and a significant loss on debt settlement.

Elaborating on the debt settlement, the company shared, “For the fiscal year ending June 30, 2023, we anticipate reporting an approximate $1.18 million related to the issuance of 613,513 common shares to settle trade payables post our initial public offering. Additionally, 461,213 common shares were issued for settling dues related to IPO.” It’s crucial to note that these shares were issued at a 40% markdown from the IPO price, resulting in a non-cash loss on the debt settlement.

Nasdaq Alert Compounding its challenges, Lucy received a cautionary notice from the Nasdaq Marketplace. The reason: Lucy’s share price languishing below the $1 mark for an extended period. The company now has a 180-day window to address and rectify this price slump, failing which it faces potential delisting.