Less Than Six Months After IPO, Lucy Scientific Names New CEO

Lucy Scientific went public in February.

Lucy Scientific Discovery Inc. (Nasdaq: LSDI) has already moved on to another chief executive officer, replacing former CEO Chris McElvany with Executive Chairman Richard Nanula.

Nanula will remain as chairman, while McElvany will transition into a consulting role with the company. Lucy Scientific only became a publicly traded company in February 2023.

Nanula brings years of executive experience from a variety of industries including hospitality and biotech. He is also currently listed on LinkedIn as the CEO of CBD company PureForm Global. He was the executive vice president and CFO at Amgen from 2001-2007, and while Lucy touts his Disney experience, Nanula hasn’t been at Disney, where he served as executive vice president and CFO, since 1998.

“Lucy is in a unique position to leverage the growing industry coupled with its reach as a NASDAQ-listed Company,” said Nanula. “I have assumed the role of CEO to lead our commitment to advancing the field of psychotropic drug development and to address the unmet needs of the global wellness community.”

Nanula received a salary of $100,000 as executive chairman, while McElvany received a salary of $300,000 as CEO. The company has not yet filed Nanula’s employment agreement with the SEC.

Lucy Scientific has close ties with High Times Holding Corp., which has also cycled through CEOs at a fast clip.

Going Concern

Lucy last reported earnings in May and at that time stated in its filings, “During the nine months ended March 31, 2023, the Company used cash in operations of $2,405,776. The historical operating results raise substantial doubt about the Company’s ability to continue as a going concern for at least twelve months after issuing these financial statements in the absence of management’s plans to improve the Company’s liquidity.”

The company said it was relying on a line of credit it established in November 2020 for $4,932,388 (C$6,675,000). The company said it may draw up to $369,467 (C$500,000) per quarter under the line of credit until it matures in November 2023.

It can’t sell more shares until the 12-month anniversary of its IPO.

Still, the company said that it believes it has enough cash on hand plus anticipated revenue to fund the company and make debt repayments. The company had cash of $3.4 million at the end of March 2023 and an accumulated deficit of $41 million.

The company reported that its last quarter had no revenue and operating expenses of $2.3 million and reported a net loss of $4.1 million.

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.

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