(i)

Nature of Operations

Li-Cycle

Holdings Corp. and its subsidiaries, collectively

(“Li-Cycle”

or the “Company”) started their business as

Li-Cycle

Corp.

Li-Cycle

Corp was incorporated in Ontario, Canada under the

Business Corporations Act

(Ontario)

on November 18, 2016.

Li-Cycle’s

core business model is to build, own and operate recycling plants tailored to regional needs.

Li-Cycle’s

Spoke & Hub Technologies

™

provide an environmentally friendly resource recovery solution that addresses the growing global

lithium-ion

battery recycling challenges, supporting the global transition toward electrification.

On March 28, 2019,

Li-Cycle

Corp. incorporated a owned subsidiary in Delaware, U.S.,

Li-Cycle

Inc., under the

General Corporation Law of the State of Delaware.

On September 2, 2020,

Li-Cycle

Corp. incorporated a owned subsidiary in Delaware, U.S.,

Li-Cycle

North America Hub, Inc., under the

General Corporation Law of the State of Delaware

(ii)

Business Combination

On February 12, 2021,

Li-Cycle

Corp. incorporated a 100% owned subsidiary in Ontario, Canada,

Li-Cycle

Holdings Corp., under the

Business Corporations Act

(Ontario).

On February 16, 2021,

Li-Cycle

Corp. entered into a definitive business combination agreement with Peridot Acquisition Corp. (NYSE: PDAC) and

Li-Cycle

Holdings Corp.

On August 10, 2021, in accordance with the plan of arrangement to reorganize

Li-Cycle

Corp., the Company finalized the business combination with Peridot Acquisition Corp. (NYSE: PDAC), and the combined company was renamed

Li-Cycle

Holdings Corp.

As part of this transaction, a total of 3,377,626 Class A shares of Peridot Acquisition Corp. were redeemed by Peridot shareholders, resulting in a total redemption payment of approximately $33.8 million, while the remaining 26,622,374 of Class A shares were converted into common shares of the combined entity,

Li-Cycle

Holdings Corp. In addition, 7,500,000

Class B shares of Peridot Acquisition Corp were converted

into 7,500,000

common shares of the combined entity, Li-Cycle Holdings Corp. upon closing.

Li-Cycle

Corp.’s existing shareholders exchanged 2,552,450 fully diluted shares of

Li-Cycle

Corp. for the shares of the combined entity,

Li-Cycle

Holdings Corp., at an Exchange Ratio of approximately 1:39.91, as determined per the Plan of Arrangement, resulting in 97,508,181 shares of

Li-Cycle

Holdings Corp. and 4,242,707 stock options of

Li-Cycle

Holdings Corp. for the existing shareholders of

Li-Cycle

Corp.

31,549,000 shares of the combined entity,

Li-Cycle

Holdings Corp., were issued to the new investors at US$10 per share for a total of US$315.5 million of Private Investment in Public Equity.

On closing, the common shares and warrants of

Li-Cycle

Holdings Corp. were listed on the New York Stock Exchange and are traded under the symbols “LICY” and “LICY.WS”, respectively.

Li-Cycle

Corp. has been identified as the acquirer for accounting purposes. As Peridot Acquisition Corp. does not meet the definition of a business as defined in IFRS 3—Business Combinations (“IFRS 3”), the acquisition is not within the scope of IFRS 3 and is accounted for as a share-based payment transaction in accordance with IFRS 2 – Share-based Payment (“IFRS 2”). These consolidated

financial statements represent the continuance of

Li-Cycle

Corp. and reflect the identifiable assets acquired and the liabilities assumed of Peridot Acquisition Corp. at fair value. Under IFRS 2, the transaction was measured at the fair value of the common shares, escrowed shares and warrants deemed to have been issued by

Li-Cycle

Corp., in order for the ownership interest in the combined entity to be the same as if the transaction had taken the legal form of

Li-Cycle

Corp. acquiring 100% of Peridot Acquisition Corp. Any difference between the fair value of the common shares, escrowed shares and warrants deemed to have been issued by

Li-Cycle

Corp. and the fair value of Peridot Acquisition Corp.’s identifiable net assets acquired and liabilities assumed represents a Listing Fee.

The fair value of the warrants assumed in the transaction was determined based on the market closing price

of $2.10 per warrant resulting in total fair value of $48.3 million.

As a result of this reverse asset acquisition, a Listing Fee of $152.7 million has been recorded to reflect the difference between the estimated fair value of the common shares, escrowed shares and warrants deemed issued to the shareholders of Peridot Acquisition Corp. and the net fair value of the assets of Peridot Acquisition Corp. acquired.

Li-Cycle

and Peridot incurred transaction-related costs of $27.0 million and $29.6 million, respectively.

Li-Cycle’s

transaction-related costs, such as commissions, professional fees and regulatory fees are directly attributable to common shares issuances and were deducted from the proceeds of the offering.

The details of the purchase price allocation of the identifiable assets acquired and liabilities assumed are as follows:


	2021
	$
Fair value of consideration transferred:
Common shares		656,713,740

Total fair value of consideration transferred		656,713,740


Fair value of assets acquired and liabilities assumed:
Cash and cash equivalents		581,862,621
Warrants		(48,299,987	)
Other payables		(29,567,903	)

Total fair value of assets acquired and liabilities assumed		503,994,731


Excess of fair value of consideration transferred over fair value of assets acquired and liabilities assumed, recognized as Listing Fee		152,719,009

Gross proceeds		581,862,621
Transaction-related costs		(26,965,445	)
Other payables acquired		(29,567,903	)

Net proceeds		525,329,273

The fair value of the consideration transferred to acquire Peridot Acquisition Corp. and to issue shares to the PIPE investors was

$656,713,740 calculated as 65,671,374 common shares at $10.00 per common share.

The fair value per common share was based on the fair value of

Li-Cycle

Corp. common shares.

As a result of the closing of this transaction, 163,179,555 common shares of the Company were issued and outstanding immediately after the closing. At October 31, 2021, 163,179,655 common shares were outstanding.