Subsequent events

12 Months Ended

Dec. 31, 2024

Subsequent Events [Abstract]

Subsequent events

Subsequent events

Underwritten Offering

On January 14, 2025, Li-Cycle commenced an underwritten public offering in the United States (the "Underwritten Offering") to offer and sell units consisting of (i) common shares (or pre-funded warrants in lieu thereof) and (ii) warrants to purchase common shares.

On January 16, 2025, the Company closed the Underwritten Offering with gross proceeds of approximately $15.0 million before deducting offering expenses payable by the Company including underwriting fees and expenses. Li-Cycle intends to use the net proceeds from the offering for working capital and general corporate purposes.

The Underwritten Offering consisted of 5,000,000 units (the “Units”) and 10,000,000 pre-funded units (“Pre-Funded Units”). Each Unit consists of: (i) one common share, (ii) one Series A Warrant to purchase one common share (“Series A Warrant”), and (iii) one Series B Warrant to purchase one common share (“Series B Warrant”). Each Pre-Funded Unit consists of: (i) one pre-funded warrant to purchase one common share (the “Pre-Funded Warrant” and together with the Series A Warrant and the Series B Warrant, the “Warrants”), (ii) one Series A Warrant, and (iii) one Series B Warrant.

The public offering price per Unit was $1.00 and the public offering price per Pre-Funded Unit was $0.99999, which is equal to the public offering price per Unit minus an exercise price of $0.00001 per Pre-Funded Warrant. The initial exercise price of each Series A Warrant is $1.00 per common share. The Series A Warrants will be immediately exercisable and will expire on the eight-month anniversary of the initial date of issuance (i.e., September 16, 2025). The initial exercise price of each Series B

Warrant is $1.00 per common share. The Series B Warrants will be immediately exercisable and will expire on the five-year anniversary of the initial date of issuance (i.e., January 16, 2030).

In connection with the Underwritten Offering, the Company granted Aegis Capital Corp. a 45-day option to purchase additional common shares and/or Series A Warrants and/or Series B Warrants representing up to 15% of the total common shares and up to 15% of the total Series A Warrants and Series B Warrants sold in the Offering solely to cover over-allotments, if any, at a price of $0.99998 per common share, $0.00001 per Series A Warrant, and $0.00001 per Series B Warrant. On January 27, 2025, Aegis Capital Corp. exercised its over-allotment option in full, resulting in additional gross proceeds of approximately $2.25 million before deducting offering expenses payable by the Company, including underwriting fees and expenses.

In connection with the Underwritten Offering, on January 14, 2025, the Company entered into a consent and waiver agreement (the “Consent and Waiver Agreement”) with Glencore Canada Corporation, a related party of the Company and the holder of the Glencore Convertible Notes, pursuant to which Glencore Canada Corporation has, among other things, granted its consent to the issuance by the Company of the Warrants and agreed to waive any potential default or event of default under the Glencore Senior Secured Convertible Note which may occur as a result of the issuance of the Warrants and the Company’s compliance with certain terms of the Warrants (the “Consent and Waiver Agreement”). In return, the Company agreed to amend the Glencore Convertible Notes and the form of warrants attached thereto (collectively, the “Glencore Notes”), to reflect any terms contained in the Warrants that are more favorable to the holders of the Warrants than those contained in the Glencore Notes, to the extent requested by Glencore, within ten business days following the closing of the Offering. The Glencore Notes and the Glencore Senior Secured Convertible Notes Purchase Agreement have now been amended and restated as required by the Consent and Waiver Agreement, as described below.

Amendment of the Glencore Convertible Notes and the Glencore Warrants

In accordance with the Consent and Waiver Agreement, on January 31, 2025, the Company amended and restated each of the Glencore Convertible Notes (including the form of warrants attached thereto). The Company also entered into an amendment to the Glencore Senior Secured Notes Purchase Agreement to, among other things:

•Entitle the holders of the Glencore Convertible Notes (and any holders of Glencore Warrants) to equivalent pro rata distributions made to common shareholders;

•Entitle any holders of Glencore Warrants issued in accordance with the Glencore Convertible Notes to have the Company repurchase their Glencore Warrants for cash upon a change of control, at the holder’s option, based on a Black-Scholes lite valuation;

•Entitle holders of the Glencore Convertible Notes (and any holders of Glencore Warrants) to an economic anti-dilution adjustment, in addition to modification of the conversion or exchange price, as applicable, in the event of a reverse stock split or similar share combination;

•Add provisions to the Glencore Convertible Notes (and the Glencore Warrants) that specify conversion or exchange price adjustments, as applicable, in connection with the future issuance by the Company of additional common shares or instruments exchangeable or convertible into common shares;

•Add provisions to the Glencore Convertible Notes (and the Glencore Warrants) that provide for compensation in the event that the Company fails to timely deliver common shares upon conversion of the Glencore Convertible Notes or exercise of the related Glencore Warrants, as applicable; and

•Remove contractual transfer restrictions on the Glencore Warrants issued in accordance with the Glencore Convertible Notes and the common shares underlying such Glencore Warrants.

NYSE Delisting and Quotation on OTCQX® Best Market

On February 26, 2025, the Company announced that it had received written notice from the NYSE that it had suspended trading of the common shares and started the process to delist the common shares from the NYSE. The NYSE determined that the Company was not in compliance with the requirements of Section 802.01C of the NYSE’s Listed Company Manual, because the average closing price of the common shares was less than $1.00 over a consecutive 30 trading-day period and the Company had effected a reverse stock split within the prior one-year period. The Company did not appeal the NYSE’s delisting determination. The Company obtained waivers from its convertible debt holders, Glencore Canada Corporation and Wood River Capital, LLC, under the terms of the Glencore Convertible Notes and the KSP Convertible Notes, respectively, to permit the Company to move to the OTCQX® Best Market as an eligible market for the common shares, which waivers extend to April 30, 2025. The common shares commenced trading on OTCQX under the symbol “LICYF” on February 27, 2025. The Company plans to list its common shares on another eligible market in accordance with the terms of its convertible debt, or to seek a further extension of the waivers, prior April 30, 2025.