Li-Cycle Holdings Corp.
Headnote
Application for exemptive relief from the filing deadline under subsection 4.3(4) of NI 51-102 in respect of the Issuer's restated interim financial reports prepared in accordance with U.S. GAAP for the interim periods since its most recently completed financial year for which annual financial statements have been filed -- pursuant to paragraph 4.3(4)(d) of NI 51-102, the issuer is required to file its restated interim financial reports and the accompanying MD&A on or before the filing deadline for its audited annual financial statements for the year ended December 31, 2023 -- the Issuer has encountered unanticipated delays in its work plan and the required restated interim financial reports will not be finalized when its annual financial statements are filed -- relief granted subject to conditions set out in decision document, including that the Issuer files its restated interim financial reports and related MD&A on or before 45 days following the filing deadline.
Statutes Cited
National Instrument 51-102 Continuous Disclosure Obligations, s. 4.3(4)(d) and Part 13.
IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF LI-CYCLE HOLDINGS CORP. (the Filer)
DECISION
Background
The securities regulatory authority in Ontario (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdiction (the Legislation) for exemptive relief pursuant to Section 13.1 of National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) from the requirements pursuant to subsection 4.3(4) of NI 51-102 to file restated interim financial reports prepared in accordance with U.S. GAAP for the interim periods since its most recently completed financial year for which annual financial statements have been filed (being the financial year ended December 31, 2022) on or before the deadline for the Filer to file its audited annual financial statements for the year ended December 31, 2023 (the Annual Financial Statements) set out in paragraph 4.2(a) of NI 51-102 and in accordance with paragraph 4.3(4)(d) of NI 51-102, provided that the Filer files the Restated Interim Financial Reports (as defined below) and related MD&A on or before the earlier of (i) 45 days from the date the Filer files its Annual Financial Statements, and (ii) May 14, 2024 (the Exemption Sought).
Interpretation
Terms defined in National Instrument 14-101 Definitions and NI 51-102 have the same meanings if used in this decision, unless otherwise defined.
Representations
This decision is based on the following facts represented by the Filer:
(1) The Filer is a corporation existing under the Business Corporations Act (Ontario). The registered and head office of the Filer is located at 207 Queens Quay West, Suite 590, Toronto, Ontario, M5J 1A7.
(2) The common shares of the Filer (the Common Shares) are listed and posted for trading only on the New York Stock Exchange (NYSE) under the trading symbol "LICY".
(3) The Filer is a reporting issuer in the Province of Ontario.
(4) The Filer's financial year end is December 31.
(5) The Filer is subject to reporting obligations under the U.S. Securities Exchange Act of 1934, as amended (the 1934 Act), and files continuous disclosure documents with the U.S. Securities and Exchange Commission (the SEC).
(6) Up to January 1, 2024, the Filer reported under the 1934 Act as a "foreign private issuer" as defined in Rule 405 of Regulation C under the U.S. Securities Act of 1933, as amended, and Rule 3b-4 under the 1934 Act (a foreign private issuer). The Filer was required at the end of every second fiscal quarter, to test whether it continued to qualify as a foreign private issuer.
(7) As of June 30, 2023, the Filer determined that it no longer met the criteria for qualification as a foreign private issuer on the basis that (i) 50% or more of the Filer's outstanding voting securities are directly or indirectly held of record by residents of the United States, (ii) the majority of the Filer's executive officers or directors are U.S. citizens or residents, and (iii) more than 50% of the Filer's assets are located in the United States. As a result, effective January 1, 2024, the Filer became subject to the reporting requirements applicable to U.S. domestic registrants.
(8) In accordance with Regulation S-X, as of January 1, 2024, the Filer is required to prepare its annual financial statements in accordance with U.S. GAAP (rather than IFRS).
(9) On or about February 29, 2024, the Filer is expected to file its annual report on Form 10-K for the year ended December 31, 2023 (the Annual Report) in accordance with the requirements of the SEC, including (i) the Annual Financial Statements and related MD&A, as well as (ii) restated financial statements in accordance with U.S. GAAP for the Filer's transition period ended December 31, 2022, financial year ended October 31, 2022, and financial year ended October 31, 2021.
(10) Pursuant to subsection 4.3(4) of NI 51-102, the Filer is required to file with the Ontario Securities Commission restated interim financial reports for the three interim periods since December 31, 2022, namely the periods ended March 31, 2023, June 30, 2023 and September 30, 2023, in accordance with U.S. GAAP (the Restated Interim Financial Reports), on or before the deadline for the Filer to file the Annual Financial Statements.
(11) Pursuant to paragraph 4.2(b) of NI 51-102, the deadline for the Filer to file the Annual Financial Statements with the Ontario Securities Commission is the earlier of (i) April 1st, 2024 (as March 30, 2024, the 90th day after the end of its most recently completed financial year, falls on a day that is not a business day), and (ii) the date of filing, in a foreign jurisdiction, of the Annual Financial Statements (the Filing Deadline).
(12) On October 23, 2023, the Filer announced that it was pausing construction work on its Rochester Hub project, pending completion of a comprehensive review of the go-forward strategy for the project, and on November 13, 2023, the Filer announced that, in connection with its comprehensive review of the go-forward strategy of its Rochester Hub project, the Board of Directors of the Filer had established a Special Committee of independent directors to, among other things, (1) oversee and supervise a strategic review of all or any of the Filer's operations and capital projects including its sales, general and administration functions, and (2) consider financing and other strategic alternatives (the Strategic Review).
(13) Unanticipated employee departures critical to the Filer's financial reporting function following the announcements referenced above combined with the time demands of the Strategic Review have resulted in the Filer expecting that it will be unable to complete the Restated Interim Financial Reports, and related MD&A, in accordance with U.S. GAAP by the Filing Deadline.
(14) The Filer is not in default of securities legislation in any jurisdiction of Canada.
Decision
The Decision Maker is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Maker under the Legislation is that the Exemption Sought is granted, subject to all of the following conditions:
a) on or before the earlier of (a) 45 days from the date the Filer files its Annual Financial Statements, and (b) May 14, 2024, the Filer files the Restated Interim Financial Reports and related MD&A;
b) the Filer issues and files on to SEDAR+, no later than the date the Filer files its Annual Financial Statements, a news release (the Exemption News Release) that discloses:
i) that it is relying on this exemption;
ii) that its management and other insiders are subject to an insider trading black-out policy that reflects the principles in section 9 of National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions; and
iii) the anticipated date by which the Restated Interim Financial Reports and related MD&A are expected to be filed.
c) the Filer does not file a preliminary prospectus or a final prospectus for an offering of securities in any jurisdiction of Canada until it has filed all documents for which it is relying on this exemption.
DATED at Toronto, Ontario, this 21st day of February 2024.
OSC File #: 2024/0035