Li-Cycle Holdings Corp.

Our Rochester Hub project includes several industrial buildings located on an approximately 49-acre parcel of land that is leased under a long-term ground lease (the “Hub Ground Lease”). We own these buildings and treat them as fixed assets under construction. The leased land is treated as an operating lease right-of-use asset. The term of the Hub Ground Lease continues for an initial term of 20 years to March 31, 2042, with rights of renewal to extend the lease term to March 31, 2071. We have entered into a lease and lease-back arrangement with the County of Monroe Industrial Development Agency (“COMIDA”), which is cash-neutral and enables us to receive certain local property tax incentives as lessee. Certain contractors, subcontractors, consultants and suppliers (together, the “lienors”) have filed purported

mechanic’s liens against our Rochester Hub property, under New York Lien Law, given alleged delays in making payments to those lienors. See the section titled “Item 3. Legal Proceedings” for additional details.

Our Rochester Hub warehouse and administrative building is located on an approximately 24-acre parcel of land leased under a long-term ground sublease agreement (the “A&R Ground Sublease”). We own this building and treat it as a fixed asset. The leased land is treated as an operating lease right of use asset. The A&R Ground Sublease extends for an initial term of 25 years to March 31, 2049, with rights of renewal to extend the lease term to March 31, 2071. Under the A&R Ground Sublease, HubCo has agreed to pay the balance of the unpaid construction costs for the Warehouse (being $5.1 million, the “Unpaid Construction Costs”) to the landlord on or before March 1, 2026. The landlord’s lien covering the Unpaid Construction Costs will be discharged only upon payment in full by HubCo of the Unpaid Construction Costs. In the event that the Unpaid Construction Costs are not paid by March 1, 2026, the Warehouse Landlord may elect to terminate the A&R Ground Sublease, take possession of the building and seek termination damages, provided that in the event that the Company voluntarily surrenders the building to the landlord free and clear of all liens and encumbrances and in good condition, the landlord will waive any termination damages otherwise due to the landlord.

• Li-Cycle’s success will depend on its ability to economically and efficiently source, recover and recycle lithium-ion battery-grade materials, as well as third-party black mass, and to meet the market demand for an environmentally sound, closed-loop solution for lithium-ion battery manufacturing scrap and end-of-life lithium-ion batteries.
• Failure to materially increase recycling capacity and efficiency could have a material adverse effect on Li-Cycle’s business, results of operations and financial condition.
• Li-Cycle may engage in strategic transactions, including acquisitions, that could disrupt its business, cause dilution to its shareholders, reduce its financial resources, result in the incurrence of debt, or prove not to be successful.
• Operating or expanding internationally involves risks that could delay any of our future expansion plans and/or prohibit us from entering markets in certain jurisdictions, which could have a material adverse effect on our results of operations.
• Li-Cycle is and will be dependent on its recycling facilities. If one or more of its current or future facilities become inoperative, capacity constrained or if operations are disrupted, Li-Cycle’s business, results of operations and financial condition could be materially adversely affected.
• Problems with the storage and handling of lithium-ion battery cells that affect Li-Cycle’s operations or result in less usage of lithium-ion batteries could materially adversely affect Li-Cycle’s business, results of operations and financial condition.
• Li-Cycle’s business is subject to operational and project development risks that could disrupt our business, some of which may not be insured or fully covered by insurance.
• Unavailability or cancellation of third-party insurance coverage would increase our overall risk exposure, as well as disrupt our operations.
• Li-Cycle’s revenue depends on maintaining and increasing feedstock supply commitments as well as securing new sources of supply.
• Li-Cycle relies on a limited number of commercial partners to generate most of its current and expected revenue.
• A decline in the adoption rate of EVs, or a decline in the support by governments for “green” energy technologies, could adversely affect the demand for Li-Cycle’s recycling services and products, and materially harm Li-Cycle’s financial results and ability to grow its business.
• Decreases in demand and fluctuations in benchmark prices for the metals contained in Li-Cycle’s products could significantly impact Li-Cycle’s costs, revenues and results of operations.
• In addition to commodity prices, Li-Cycle’s revenues are primarily driven by the volume and composition of LIB processed at its facilities and changes in the volume or composition of LIB processed could significantly impact Li-Cycle’s revenues and results of operations.
• The development of an alternative chemical make-up of lithium-ion batteries or battery alternatives could materially adversely affect Li-Cycle’s revenues and results of operations.
• Li-Cycle’s reliance on the experience and expertise of its senior management and key personnel may cause material adverse impacts on it if a senior management member or key employee departs.
• Li-Cycle relies on third-party consultants for its regulatory compliance and Li-Cycle could be materially adversely impacted if the consultants do not correctly inform Li-Cycle of legal changes.
• Li-Cycle is subject to the risk of litigation or regulatory proceedings, which could materially adversely impact its financial results.
• Li-Cycle may not be able to complete its recycling processes as quickly as customers may require, which could cause it to lose supply contracts and could harm its reputation.
• Li-Cycle operates in an emerging, competitive industry and if it is unable to compete successfully its revenue and profitability will be materially adversely affected.
• Increases in income tax rates, changes in income tax laws or disagreements with tax authorities could materially adversely affect Li-Cycle’s business, results of operations and financial condition.
• Li-Cycle’s operating and financial results may vary significantly from period to period due to fluctuations in its operating costs and other factors.
• Fluctuations in foreign currency exchange rates could result in increases in Li-Cycle’s operating costs when translated to U.S. dollars for reporting purposes.
• Unfavorable economic or geopolitical conditions, including disruptions in the global supply chain and inflation, could have a material adverse effect on Li-Cycle’s business, results of operations and financial condition.
• Changes to regulations and regulatory agencies to which Li-Cycle is subject could materially adversely affect its business
• Natural disasters, unusually adverse weather, epidemic or pandemic outbreaks, cyber incidents, boycotts and geo-political events could materially adversely affect Li-Cycle’s business, results of operations and financial condition.
• Failure to protect or enforce Li-Cycle’s intellectual property could materially adversely affect its business.
• Li-Cycle may be subject to intellectual property rights claims by third parties, which could be costly to defend, could require payment of significant damages and could limit the Company’s ability to use certain technologies.
• Li-Cycle has identified material weaknesses in its internal control over financial reporting. If its remediation of such material weaknesses is not effective, or if it fails to develop and maintain proper and effective internal control over financial reporting, its ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.
• Risks Relating to the Ownership of Our Common Shares
• Our by-laws provide, subject to limited exceptions, that the Superior Court of Justice of the Province of Ontario and the appellate courts therefrom are the sole and exclusive forum for certain shareholder litigation matters, which could limit shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or shareholders.
• We may issue additional common shares or other equity securities without shareholder approval, which would dilute the ownership interests of existing shareholders in the Company and may depress the market price of our common shares.
• The market price of our common shares has been and may be volatile.
• Our executive officers and directors may have interests different than yours and may take actions with which you disagree.
• An active, liquid trading market for our common shares may not be sustained.
• As of January 1, 2024, we are no longer reporting to the SEC as a “foreign private issuer” and we are required to comply with the provisions of the Exchange Act, applicable to “U.S. domestic issuers”, and filing under U.S.GAAP, which will continue to require us to incur significant expense and expend time and resources.
• Failure to develop and maintain effective internal control over financial reporting could have a material adverse effect on our business, results of operations and the trading price of our common shares.
• The issuance of our common shares in connection with the conversion of the KSP Convertible Notes and/or the Glencore Convertible Notes would cause substantial dilution, and could materially affect the trading price of our common shares and your interests and any future financings may cause further dilution.
• We do not currently intend to pay dividends on our common shares and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common shares.
• Our inability to meet expectations and projections in any research or reports published by securities or industry analysts, or a lack of coverage by securities or industry analysts, could result in a depressed market price and limited liquidity for its shares.
• We may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and share price, which could cause you to lose some or all of your investment.
• We may not be able to repurchase the Warrants upon a Fundamental Transaction, or make other cash payments that may be required under the Warrants.
• Provisions of the Warrants could discourage an acquisition of us by a third-party.
• We could be or may become a passive foreign investment company, which could result in materially adverse U.S. federal income tax consequences.