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H.S. junior Bad
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Financial report summary
?Risks
- There is substantial doubt about Li-Cycle’s ability to continue as a going concern.
- The development of Li-Cycle’s Rochester Hub, Spoke network and other future projects is subject to risks, including with respect to financing, engineering, permitting, procurement, construction, commissioning and ramp-up, and Li-Cycle cannot guarantee that these projects will be resumed, completed in a timely manner or at all, that their costs will not be significantly higher than estimated, that financing will be sufficient to cover costs or escalated costs, or that the completed projects will meet expectations with respect to their productivity or the specifications of their respective end products, among others.
- Li-Cycle has a history of losses and expects to incur significant expenses for the foreseeable future and may never achieve or sustain profitability.
- There can be no assurance that the Cash Preservation Plan or the efforts to pursue financing options or strategic alternatives will achieve any of the intended results.
- Li-Cycle may not be able to successfully implement its global growth strategy, on a timely basis or at all.
- Li-Cycle may be unable to manage future global growth effectively.
- Li-Cycle’s success will depend on its ability to economically and efficiently source, recover and recycle lithium-ion battery 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.
- 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.
- 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 a 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.
- 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. The trading price of our common shares could be subject to wide fluctuations due to a variety of factors, including:
- Our shareholder rights plan could impede or discourage a takeover or change of control.
- Our executive officers and directors may have interests different than yours and may take actions with which you disagree.
- The NYSE may delist our common shares, which could limit investors’ ability to engage in transactions in our common shares and subject us to additional trading restrictions.
- 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, and the rules of NYSE, 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, the Glencore Convertible Notes and the A&R Glencore Convertible Notes and the Glencore Senior Secured Convertible Note 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.
- The Company’s ability 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.
- The Company may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition, results of operations and share price, which could cause you to lose some or all of your investment.
- The Company could be or may become a passive foreign investment company, which could result in materially adverse U.S. federal income tax consequences.
Management Discussion
- 1Adjusted EBITDA is a non-GAAP financial measure and does not have a standardized meaning under U.S. GAAP. Refer to the section titled “Non-GAAP Reconciliations and Supplementary Information” below, including a reconciliation to comparable U.S. GAAP financial measures.
- logistics and recycling and destruction of batteries. Sales of intermediate products are presented net of fair value gains or losses recognized in the period. Refer to the section titled “—Critical Accounting Policies and Estimates” below for additional details on the Company’s revenue recognition policy.
- For the twelve months ended December 31, 2023, revenue was $18.3 million, compared to $16.5 million in the corresponding period of 2022. The Company’s revenue is impacted by the market price for certain constituent metals contained in its products, notably cobalt and nickel. The primary driver of the increase in revenue for the twelve months ended December 31, 2023 compared to 2022 was an increase in Recycling service revenue partially offset by changes in fair value pricing adjustments. Recycling service revenue increased by 338% between 2022 and 2023, driven by new service contracts entered during the period, including recycling service arrangements for damaged, defective, and recalled batteries. Product revenue increased by 10% between 2022 and 2023, driven by a higher-value product sales mix partially offset by a decrease in market prices of cobalt and nickel in 2023 compared to 2022. Sales of Black Mass & Equivalents were 4,324 tonnes for the twelve months ended December 31, 2023, compared to 4,192 tonnes in the corresponding period of 2022. Revenue for the twelve months ended December 31, 2023 was impacted by unfavorable fair value pricing adjustments of $5.3 million, compared to unfavorable adjustments of $1.1 million in the corresponding period of 2022, driven by decreasing cobalt and nickel prices in the period.