XML 77 R27.htm IDEA: XBRL DOCUMENT v3.24.0.1
Common stock and additional paid-in capital
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
Common stock and additional paid-in capital Common stock and additional paid-in capital
(a)Common stock and additional paid-in capital
Li-Cycle Corp. is authorized to issue an unlimited number of voting common shares, Class A non-voting common shares, preference shares and Class A preferred shares, in each case without par value. All issued shares are fully paid. Li-Cycle Holdings Corp. is authorized to issue an unlimited number of voting common shares without par value. All issued shares are fully paid.
Description of Securities

General

The following description of the material terms of the Company's share capital includes a summary of certain provisions of the Articles of Arrangement that became effective upon the closing of the Business Combination (the “Articles”).

Share Capital

The Company's authorized share capital consists of an unlimited number of common shares and an unlimited number of preferred shares issuable in series.

Common Shares

Voting Rights. Under the Articles, the common shares are entitled to receive notice of, and to attend and vote at all meetings of shareholders, except meetings at which only holders of a specified class of shares are entitled to vote. Each common share entitles its holder to one vote.

Dividend Rights. The holders of outstanding common shares are entitled to receive dividends at such times and in such amounts and form as the board may from time to time determine, but subject to the rights of the holders of any preferred shares. The Company is permitted to pay dividends unless there are reasonable grounds for believing that: (i) the Company is, or would after such payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of the Company’s assets would, as a result of such payment, be less than the aggregate of its liabilities and stated capital of all classes of shares. The timing, declaration, amount and payment of any future dividends will depend on the Company’s financial condition, earnings, capital requirements and debt service obligations, as well as legal requirements, industry practice and other factors that our board deems relevant.

Preemptive Rights. There are no preemptive rights relating to the common shares.

Repurchase of Common Shares. Under the OBCA, the Company will be entitled to purchase or otherwise acquire any of its issued shares, subject to restrictions under applicable securities laws and provided that the Company will not be permitted to make any payment to purchase or otherwise acquire any of its issued shares if there are reasonable grounds for believing that: (i) the Company is, or would after such payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of the Company’s assets would, as a result of such payment, be less than the aggregate of its liabilities and stated capital of all classes of shares.

Liquidation. Upon the dissolution, liquidation or winding up of the Company, or any other distribution of assets of the Company, among its shareholders for the purpose of winding up its affairs, subject to the rights of the holders of any outstanding series of preferred shares, the holders of common shares will be entitled to receive the remaining property and assets of the Company available for distribution to its shareholders ratably in proportion to the number of common shares held by them.
(in millions)Number of shares outstanding*Amount
Common shares and additional paid-in capital outstanding as at November 1, 202083.4 $16.3 
Issuance of shares – Series C private placement (i)11.2 21.6 
Issuance of shares for non-cash costs0.5 — 
Issuance of shares through Business Combination (ii)
65.7 477.0 
Settlement of RSUs0.4 0.8 
Exercise of stock options2.1 0.2 
RSUs expense— 0.7 
Stock-based compensation - options— 2.7 
Common shares and additional paid-in capital outstanding as at October 31, 2021163.3 519.3 
Settlement of RSUs0.3 — 
Exercise of stock options1.4 — 
Exercise of warrants5.7 46.0 
Issuance of shares to LGES and LGC (iii)5.3 49.7 
Stock-based compensation - RSUs— 11.5 
Stock-based compensation - options— 6.6 
Common shares and additional paid-in capital outstanding as at October 31, 2022176.0 633.1 
Settlement of RSUs— — 
Exercise of stock options0.1 — 
Stock-based compensation - RSUs— 1.6 
Stock-based compensation - options— 0.6 
Common shares and additional paid-in capital outstanding as at December 31, 2022176.1 635.3 
Settlement of RSUs0.8 — 
Exercise of stock options1.3 — 
Stock-based compensation - RSUs— 9.8 
Stock-based compensation - options— 3.6 
Payment to the holders of non-controlling interest in subsidiary— (0.4)
Common shares and additional paid-in capital outstanding as at December 31, 2023178.2 $648.3 
*The number of Li-Cycle Corp. common shares and Class A preferred shares on the consolidated statements of equity have been recast by the Business Combination exchange ratio of 1:39.91 for periods prior to the completion of the Business Combination on August 10, 2021.
(i)On November 13, 2020, Li-Cycle Corp. completed a Series C private placement with two entities to purchase 281,138 Class A preferred shares at a price of $81.81 per share, for total proceeds of $23.0 million and incurred transaction fees of $1.4 million.
(ii)On August 10, 2021, the Company finalized the business combination described in Note 1. All outstanding common shares and Class A preferred shares of Li-Cycle Corp., 2,407,535 in total, were exchanged for 96,084,679 common shares of Li-Cycle Holdings Corp. at the exchange ratio of 1:39.91. Li-Cycle Holdings Corp. issued an additional 65,671,374 common shares for net proceeds of $525,329,273. As part of this transaction, all outstanding 9,829 Restricted Share Units of Li-Cycle Corp. were settled by issuance of additional 392,276 common shares of Li-Cycle Holdings Corp. and a cashless exercise of 28,779 stock options of Li-Cycle Corp. resulted in an additional 1,031,226 common shares of Li-Cycle Holdings Corp.
(iii)On May 12, 2022, the Company announced the successful completion of the $50 million aggregate investment in common shares of the Company by LG Energy Solution, Ltd. (“LGES”) and LG Chem, Ltd. (“LGC”). The Company issued 5,300,352 shares at an average price of $9.43 per common shares to LGES and LGC (being 2,650,176 common shares each). The investment was split into two tranches: (i) an initial tranche of 4,416,960 common shares, in the aggregate, at a price of $10.00 per share (for an aggregate initial tranche subscription price of approximately $44.2 million), and (ii) a second tranche of 883,392 common shares, in the aggregate, at a price of $6.60 per share (for an aggregate second tranche subscription price of approximately $5.8 million). The total cash inflow, net of transaction costs, was $49.7 million.
(b)Long-term incentive plans
The number of common shares authorized for awards under the Company's 2021 Long-Term Incentive Plan (“LTIP plan”) is 35,999,035 common shares as of December 31, 2023.
Stock options
Stock options have been issued under the Company's LTIP plan and certain legacy plans (“Legacy Plans”). Each of the Company's stock options converts into one common share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. The vesting period is three years, one-third on the first-year anniversary of the grant of the option, and one-third every consecutive year thereafter. If an option remains unexercised after a period of 10 years from the date of grant, the option expires. In general, vested options are forfeited 90 days following employee termination and all non-vested options at the time of termination are immediately forfeited.
A summary of stock option activities is as follows:
Number of stock optionsWeighted average exercise price
Balance as at November 1, 20205,327,980 $0.38 
Grants2,320,989 6.13 
Exercises(2,172,820)0.62 
Forfeitures/cancellations/expirations(179,595)1.06 
Balance, as at October 31, 20215,296,554 2.81 
Grants763,829 7.81 
Cashless exercises(1,547,113)0.46 
Forfeitures/cancellations/expirations(2,619)10.93 
Balance, as at October 31, 20224,510,651 4.46 
Grants— — 
Cashless exercises(141,919)0.81 
Forfeitures/cancellations/expirations— — 
Balance, as at December 31, 20224,368,732 4.58 
Grants1,088,500 5.76 
Cashless exercises(1,581,424)0.74 
Forfeitures/cancellations/expirations(157,122)9.80 
Balance, as at December 31, 20233,718,686 6.34 
Exercisable stock options as at December 31, 20231,963,937$5.85 
The aggregate intrinsic value of the stock options exercised, outstanding and exercisable was $6.1 million, $nil, and $nil for the year ended December 31, 2023 ($0.7 million, $9.6 million, and $9.6 million for the 2 month period ended December 31, 2022, $10.2 million, $13.4 million, and $13.4 million for the year ended October 31, 2022, $18.7 million, $53.6 million, and $51.5 million for the year ended October 31, 2021).
Cash received from the stock options exercised for the year ended December 31, 2023 was $nil (2 month period ended December 31, 2022: $nil, year ended October 31, 2022: $nil, year ended October 31, 2021: $0.2 million). There were no tax benefits recognized by the Company related to stock options exercised as at December 31, 2023 (December 31, 2022: $nil; October 31, 2022: $nil; October 31, 2021: $nil).
A summary of non-vested stock options for the year ended December 31, 2023 is shown below:
NumberWeighted average grant date fair value
Non-vested balance as at November 1, 2020
2,822,515 $0.44 
Granted during the period
2,320,989 3.59 
Vested during the period(3,910,062)0.60 
Forfeited during the period(179,595)0.75 
Non-vested balance as at October 31, 20211,053,8476.68 
Granted during the period
763,829 4.87 
Vested during the period(557,693)6.42 
Forfeited during the period(2,619)6.68 
Non-vested balance as at October 31, 20221,257,3645.58 
Vested during the period(10,575)7.88 
Forfeited during the period— — 
Non-vested balance, as at December 31, 20221,246,7895.56 
Granted during the period
1,088,500 3.33 
Vested during the period(466,188)5.69 
Forfeited during the period(114,352)5.88 
Non-vested balance, as at December 31, 20231,754,749$4.12 
A summary of the outstanding stock options is as follows:
As at December 31, 2023
PlansRange of exercise pricesNumber of stock optionsWeighted-average remaining contractual life (years)Expiration year
Legacy Plans
$ 0.37 - 2.15
972,2515.63April 2024 - February 2031
LTIP Plan
4.94 - 13.20
2,746,4358.33August 2031 - May 2033
Total3,718,686
The Company recognized total expenses of $3.6 million related to stock options for the year ended December 31, 2023 (2 month period ended December 31, 2022: $0.6 million; year ended October 31, 2022: $6.6 million; year ended October 31, 2021: $2.7 million).
As of December 31, 2023, there was $2.3 million of total unrecognized compensation cost arising from stock options. This cost is expected to be recognized over a weighted average period of 1.33 years. The total fair value of stock options vested during the year ended December 31, 2023 was $2.7 million (2022 and 2021 was $3.6 million and $2.4 million, respectively).
The fair value of the stock options granted during the year ended December 31, 2023 was determined to be $3.6 million (2 month period ended December 31, 2022: $nil; year ended October 31, 2022: $3.7 million, year ended October 31, 2021: $8.3 million), using the Black-Scholes Merton option pricing model. The assumptions used in the stock option pricing model for the grants during the year ended December 31, 2023 were as follows:
Risk free interest rate
3.45% - 3.59%
Expected life of options
6 years
Expected dividend yield0%
Expected stock price volatility
57.81% - 58.65%
Expected forfeiture rate0.19%
Expected volatility was determined by calculating the average historical volatility of a group of listed entities that are considered similar in nature to the Company.
Restricted share units
Under the terms of the Company's LTIP plan, restricted share units (“RSUs”) of Li-Cycle Holdings Corp. have been issued to executives, directors, employees and advisors. The RSU vesting periods range from several months to 3 years. The RSUs
represent the right to receive common shares from Li-Cycle Holdings Corp. in an amount equal to the fair market value of a common share of Li-Cycle Holdings Corp. at the time of distribution. RSUs issued under the LTIP plan are expected to be settled in common shares. RSUs issued under the LTIP plan are classified as equity on the consolidated balance sheets.
The Company recognized stock-based compensation expense relating to RSUs totaling $9.8 million in the year ended December 31, 2023 (2 month period ended December 31, 2022: $1.6 million, year ended October 31, 2022: $11.5 million, year ended October 31, 2021: $0.7 million).
A summary of RSU activities is as follows:
Number of RSUsWeighted average share price on grant
Balance as at November 1, 202087,084 $1.07 
Granted1,021,955 8.29 
Vested and settled(392,276)1.87 
Forfeited/cancelled/expired— — 
Balance, as at October 31, 2021716,763 10.93 
Granted1,703,966 8.38 
Vested and settled(317,619)11.22 
Forfeited/cancelled/expired(55,073)9.98 
Balance, as at October 31, 20222,048,037 8.79 
Granted— — 
Vested and settled(42,534)13.20 
Forfeited/cancelled/expired(4,823)10.36 
Balance, as at December 31, 20222,000,680 8.69 
Granted9,541,333 1.98 
Vested and settled(827,692)8.70 
Forfeited/cancelled/expired(855,240)6.13 
Balance, as at December 31, 20239,859,081 $2.42 
RSUs granted in the year ended December 31, 2023 vest over 0.5 to 3 years and are settled upon vesting.
There was no tax benefit recognized by the Company related to the RSUs vested for the year ended December 31, 2023 (2 month period ended December 31, 2022: $nil, year ended October 31, 2022: $nil; year ended October 31, 2021: $nil).
As of December 31, 2023, there was $10.6 million of total unrecognized compensation cost arising from restricted stock awards. This cost is expected to be recognized over a weighted average period of 1.13 years. The total fair value of restricted stock vested during the year ended December 31, 2023 was $7.2 million (2022 and 2021 was $3.6 million and $0.7 million, respectively).
For the year ended December 31, 2023, the Company capitalized $0.7 million in RSU and stock option costs to assets under construction (year ended October 31, 2022: $0.6 million, year ended October 31, 2021: $nil).