UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): ~~December~~February 1216, ~~2023~~2024

LUCY SCIENTIFIC DISCOVERY, INC.

(Exact name of registrant as specified in its charter)

British Columbia, Canada		001-41616		~~Not Applicable~~98-1776120
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

301-1321 Blanshard Street

Victoria, British Columbia, Canada V8W 086

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (778) 410-5195

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to 12(b) of the Act:

Title of class		Trading symbol		Name of exchange on which registered
Common Shares, no par value		LSDI		NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 13.01. ~~Entry~~Notice ~~Into~~of Delisting of Failure to Satisfy a ~~Material~~Continued ~~Definitive~~Listing ~~Agreement~~Rule or Standard; Transfer of Listing.

On ~~December~~February 1216, ~~2023~~2024, Lucy Scientific Discovery, Inc. (the “Company”) ~~entered~~ ~~into~~received a ~~securities~~letter ~~purchase agreement~~ (the “~~Purchase Agreement~~Letter”) ~~with~~from ~~three~~the Listing Qualifications Department of The Nasdaq Stock Market LLC (3“Nasdaq”) ~~accredited~~that ~~investors~~the ~~(collectively,~~Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2023 (the “~~Investors~~Form 10-Q”), ~~pursuant~~did tonot ~~which~~ satisfy the ~~Investors~~continued ~~may~~listing ~~lend~~requirement upunder toNasdaq Listing Rule 5550(b)(1), which requires that a ~~total~~listed ofcompany’s stockholders’ equity be at least $12.85 million to (the ~~Company~~“Minimum Stockholders’ Equity Requirement”). ~~The~~As ~~Company~~reported ~~received~~in its Form 10-Q, athe ~~total~~Company’s stockholders’ equity as of ~~$850~~December 31,~~000~~ 2023, ~~before~~was ~~expenses~~approximately $81,158. atIn addition, the ~~closing~~Company ofdid not meet the ~~first~~alternatives ~~tranche~~of market value of ~~the~~listed ~~financing~~securities (or net income from continuing operations as of the ~~“First~~date ~~Tranche”)~~of the Letter.

~~Pursuant~~In toaccordance with the ~~Purchase~~Nasdaq ~~Agreement~~Listing Rules, the Company ~~sold~~has 45 calendar days, or until April 1, 2024, to submit a plan to regain compliance with the ~~Investors senior~~Minimum ~~secured~~Stockholders’ ~~convertible~~Equity ~~promissory~~Requirement. ~~notes~~If ~~(each~~the ~~individually~~Company’s plan is accepted, athe ~~“Note”~~Nasdaq ~~and~~Listing ~~collectively,~~Qualifications Staff (the “~~Notes~~Staff”) incan grant an ~~aggregate~~ ~~principal~~extension ~~amount~~ of up to $2180 ~~million~~calendar days from the date of the Letter, ~~convertible~~or ~~into~~until August 14, 2024, for the Company to evidence compliance. If the Company’s ~~common~~plan ~~shares~~to (regain compliance is not accepted, the ~~“Common~~Company ~~Shares”~~will have an opportunity to appeal the decision pursuant to Nasdaq Listing Rule 5815(a); however, there can be no assurance that such appeal would be successful.

~~The~~As ~~Notes~~previously ~~carry~~disclosed, anon ~~original~~September ~~issue~~21, ~~discount~~2023, the Listing Qualifications Department of upthe toNasdaq anotified ~~total~~the Company that the bid price of its shares of common stock, no par value per share (the “Common Stock”) had closed at less than $~~200~~1.00 per share over the previous 30 consecutive business days and,~~000~~ ~~which~~as isa ~~included~~result, the Company did not comply with Listing Rule 5550(a)(2) and, in accordance with Listing Rule 5810(c)(3)(A), the upCompany was provided 180 calendar days, or until March 19, 2024, to $regain compliance with Listing Rule 5550(a)(2) ~~million~~(the ~~principal~~“Minimum ~~balance~~Bid ofPrice Rule”). As recently disclosed in a press release, the ~~Note~~Company will be effecting a 1-for-10 reverse stock split, effective February 26, 2024. The Company expects the reverse stock split to result in the Company regaining compliance with the Minimum Bid Price Rule.

The ~~Purchase~~Letter ~~Agreement~~has ~~contains~~no ~~customary representations, warranties~~immediate ~~and~~effect ~~covenants~~on of the ~~Company~~continued ~~and~~listing ~~the~~status ~~Investors. The First Tranche’s original issue discount, added to the principal amount owed by the Company, was a total~~ of ~~approximately $94,500, for a total principal balance of approximately $944,500. Pursuant to~~ the ~~Purchase Agreement,~~Common inStock ~~connection~~on ~~with~~The ~~the~~Nasdaq ~~payment~~Capital ~~of the First Tranche~~Market, ~~the Investors received warrants to purchase up to an aggregate of 1.5 million Common Shares (each~~and, ~~a “Warrant” and collectively~~therefore, the ~~“Warrants”). The Warrants are exercisable for Common Shares of the~~ Company’s ~~(the~~listing ~~“Warrant Shares”) at an exercise price of $0.25 (the “Exercise Price”). If~~ remains fully ~~exercised for cash, the Company will receive $375,000 from the exercise of the Warrants~~effective.

~~The~~There can ~~payment~~be ofno ~~further~~assurance ~~consideration~~that by the ~~Investors to the~~ Company~~, pursuant~~ towill ~~the~~be ~~Purchase~~able ~~Agreement and the Notes (up~~ to ~~$950,000~~satisfy ~~before expenses), is at~~ the ~~Investors~~Nasdaq’s ~~sole~~continued ~~discretion~~listing ~~(the~~requirements, ~~“Subsequent Tranches”).~~regain ~~The~~compliance ~~obligations of~~ with the ~~Company~~Minimum ~~under the Notes are secured by all of the Company~~Stockholders’s ~~assets~~Equity ~~pursuant~~Requirement, toor ~~the~~maintain ~~terms of~~compliance ~~the~~with ~~security~~other ~~and~~Nasdaq ~~pledge~~listing ~~agreements by and between the Company and each Investor (the “Security and Pledge Agreement”)~~requirements.

~~Secured~~If ~~Convertible~~the ~~Promissory~~Common ~~Note~~Stock ceases to be listed for trading on The Nasdaq Capital Market, the Company would expect that the Common Stock would be traded on one of the three tiered marketplaces of the OTC Markets Group.

The Notes are repayable from the date of the First Tranche, or Subsequent Tranches, if applicable, until 12 months thereafter (the “Maturity Date”) and accrue interest at a rate of 10.0% per annum. The Company may prepay the Notes at any time prior to the Maturity Date, upon 30 days’ notice to the Investors in an amount equal to 110% multiplied by the sum of (i) the outstanding principal amount, (ii) all accrued and unpaid interest, (iii) all accrued interest through the remainder of the Note term, and (iv) any other amounts due under the Note. The Company is required to make interest payments in a total amount of approximately $8,000 per month to the Investors, starting in January, until the principal amount is due in December 2024.

The Notes are convertible (in whole or in part) at any time into the number of Common Shares equal to the sum of (1) the principal amount of the Note to be converted in such conversion; plus (2) at the Investor’s option, accrued and unpaid interest, provided, however, that at the option of Investor, the accrued and unpaid interest can be converted prior to any other amounts under the Note, if any, on such principal amount at the interest rates provided in the Note to the Conversion Date (as defined in the Notes); plus (3) at the Investor’s option, the lesser of the rate of 24% per annum or the maximum legal amount permitted by law (the “Default Interest”), if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2); plus (4) the Investor’s expenses relating to a conversion, including but not limited to amounts paid by Investor on the Company’s transfer agent account; and (5) at the Investor’s option, any amounts owed to the Investor pursuant to Sections 2.3 and 2.4(g) of the Notes.

On the earliest date that the Common Shares underlying the Note would be eligible to be unrestricted in the hands of the Investors (either pursuant to registration, Rule 144, or any other applicable exemption from registration) (such date referred to as the “Equity Interest Due Date”), the Company shall issue to the Investors a number of Common Shares so that the value of such shares is equal to a total of $450,000 (the “Equity Interest Value”) based on the lowest daily VWAP (as defined in the Note) during the twenty (20) trading days preceding the date of issuance (the “Equity Interest”). The Equity Interest Value shall be pro-rated based on the portion of the total of the $1.8 million advanced prior to the Equity Interest Due Date, provided however, that the Equity Interest Value shall be at least a total of $270,000 on the Equity Interest Due Date with the remainder due upon advance of each Subsequent Tranche subsequent to the Equity Interest Date.

The Notes provide for certain covenants, whereby the Company is restricted, unless the Investors consent, in certain activities, including, variable rate transactions and Common Share repurchases. So long as any obligations of the Company under the Notes are outstanding, upon an issuance of (or announcement of intent to effect an issuance of) any security or amendment to any security originally issued prior to December 12, 2023, by the Company with any term the Investors reasonably believe is more favorable to the holder of such security than to the Investors, or with a term in favor of the holder of such security that the Investors reasonably believe was not similarly provided to Investors, then (i) the Company must notify the Investors of such additional favorable term within 3 business days of the issuance and/or amendment of the respective security and (ii) such term, at Investors’ option, shall become a part of the transaction documents with the Investors.

Subject to some exceptions, the Notes require the Company to pay to the Investors on an accelerated basis, all amounts owed pursuant to the Notes from the net proceeds of: (a) any future financings, whether debt or equity, or any other financing proceeds such as cash advances, royalties or earn-out payments or (b) the sale of any assets or securities or the receipt in cash of any tax refunds, the sale of any tax credits, or collections pursuant to any settlement or judgement.

The Notes set forth certain standard events of default (such event, an “Event of Default”), subject to certain cure periods. Upon the occurrence of an Event of Default (after the expiration of any applicable cure period), (i) interest shall accrue at the Default Interest rate (as defined in the Notes); (ii) the Notes shall become immediately due and payable and the Company shall pay to the Investors an amount equal to the sum of the principal amount then outstanding plus accrued and unpaid interest through the date of the Event of Default, plus unaccrued interest through the remainder of the term of the Notes, together with all costs, including, without limitation, legal fees and expenses of collection and Default Interest through the date of full repayment; and (iii) a liquidated damages charge equal to 25% of the outstanding balance due under the Notes will be assessed and will become immediately due and payable to the Investors.

Description of the Warrants

The Warrants are exercisable until December 12, 2028. If at any time after June 12, 2024, the market price of one Common Share is greater than the Exercise Price and the Warrant Shares are not registered under an effective non-stale registration statement of the Company, the Investors may elect to receive Warrant Shares pursuant to a cashless exercise. The Exercise Price is subject to customary adjustments for distributions of assets, Common Share issuances, Common Share dividends, and anti-dilution of the Common Shares.

All capitalized terms not defined herein shall have their respective meanings as set forth in the Purchase Agreement, Notes and Warrants. The foregoing descriptions of the Purchase Agreement, Notes, and Warrants do not purport to be complete and each is qualified in its entirety by reference to the full text of the Purchase Agreement, Security and Pledge Agreement, Notes and Warrants, the forms of which are filed as Exhibits 10.1, 10.2, 4.1, and 4.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 3.02 in its entirety. The Notes and the Warrants were and any Common Shares issuable upon conversion of the Notes or exercise of the Warrants will be issued in transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder. The Investors have represented that they are “accredited investors,” as defined in Regulation D, and were acquiring the securities described herein for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. Accordingly, the Notes and the Warrants and the Common Shares issuable upon conversion of the Notes or exercise of the Warrants have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws.

Item 9.01. Exhibits.

(d) Exhibits

Exhibit Number		Description
4.1		Form of Note
4.2		Form of Warrant
10.1		Form of Securities Purchase Agreement
10.2		Form of Security and Pledge Agreement
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: ~~December~~February 1823, ~~2023~~2024

Lucy Scientific Discovery, Inc.

/s/ Richard Nanula
Richard Nanula
Chief Executive Officer & Executive Chairman

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