DEFA14A: Li-Cycle to Appoint Marcum Canada LLP as New Independent Auditor; Reconvenes Shareholder Meeting

Li-Cycle is set to appoint Marcum Canada LLP as its new independent auditor, replacing KPMG LLP, and will reconvene its annual general and special meeting on October 15, 2024, to seek shareholder approval.

Summary

• Li-Cycle Holdings Corp. is reconvening its Annual General and Special Meeting of Shareholders on October 15, 2024, to vote on the appointment of Marcum Canada LLP as the company's new independent registered public accounting firm.
• This decision follows KPMG LLP's notification that it would decline reappointment as the company's auditor.
• The Audit Committee unanimously approved the selection of Marcum Canada LLP, citing their expertise, capabilities, fit, and understanding of Li-Cycle's industry and business.
• Shareholders are also being asked to authorize the Board to determine Marcum Canada LLP's remuneration.
• Craig Cunningham has been appointed as Li-Cycle's Chief Financial Officer, after serving as interim CFO since March 2024.
• Jacqueline (Jacqui) Dedo has been appointed as Li-Cycle's independent Board Chair.
• Shareholders of record as of September 10, 2024, are entitled to vote at the reconvened meeting.
• If shareholders have already voted, they must resubmit their vote on Proposal No. 2 by submitting the new proxy card enclosed with this Supplement or by voting online or by telephone.
• If shareholders previously submitted their vote over the telephone or through the Internet, or voted on Proposal No. 2 by proxy using the previous proxy card made available to you, and do not submit your new proxy or voting instructions, your previously submitted proxy or voting instructions will not be counted.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The company is addressing a necessary change in auditors and has appointed new leadership, which are generally positive steps. However, the change in auditors and reconvening of the meeting could also introduce some uncertainty.

Positives

• The appointment of a new auditor, Marcum Canada LLP, is expected to bring fresh perspective and expertise to Li-Cycle's financial oversight.
• The appointment of Craig Cunningham as CFO provides stability and leadership in financial matters.
• Jacqueline Dedo's appointment as Board Chair brings experience and a deep understanding of the company.
• The company is actively addressing the auditor situation and seeking shareholder input.

Negatives

• KPMG LLP's decision to decline reappointment as auditor may raise concerns about the company's financial situation.
• The reconvening of the shareholder meeting indicates a delay in finalizing the auditor appointment.
• Shareholders who have already voted must resubmit their vote on Proposal No. 2.

Risks

• Failure to secure shareholder approval for the appointment of Marcum Canada LLP could create uncertainty regarding the company's financial oversight.
• Any issues identified by the new auditor could negatively impact investor confidence.
• The transition to a new auditor could pose challenges in terms of knowledge transfer and continuity.

Future Outlook

Li-Cycle is focused on executing its strategic priorities with the new CFO and Board Chair in place, pending shareholder approval of the new auditor.

Management Comments

• Ajay Kochhar, President, CEO and Director: 'Marcum Canada LLP is a top-ranked national accounting firm in Canada that offers a complete spectrum of tax, assurance, and advisory services; they have been selected due to their expertise, capabilities, fit, and understanding of our industry and business.'
• Ajay Kochhar, President, CEO and Director: 'We look forward to [Craig Cunningham's] continued leadership and expertise as we plan to execute on our strategic priorities.'
• Ajay Kochhar, President, CEO and Director: 'I would like to congratulate Jacqui on her new role and look forward to her enhanced contributions, continued guidance, and leadership.'

Industry Context

The change in auditors comes at a time when scrutiny of financial reporting in the battery recycling industry is increasing, making the selection of a reputable and experienced firm like Marcum Canada LLP crucial.

Comparison to Industry Standards

• The selection of Marcum Canada LLP aligns with industry practices of engaging reputable accounting firms for financial oversight.
• Many companies in the resource and technology sectors use similar firms for auditing and advisory services.
• Comparable companies such as Redwood Materials or Ascend Elements would also be expected to have similar audit arrangements.

Management Changes

Stakeholder Impact

• Shareholders are directly impacted by the change in auditor and are required to vote on the appointment.
• Employees may be indirectly affected by any changes in financial oversight or strategic direction.
• The appointment of a new auditor could impact the company's credibility with customers, suppliers, and creditors.

Next Steps

• Shareholders need to vote on the appointment of Marcum Canada LLP as the new independent auditor.
• The company will proceed with the reconvened shareholder meeting on October 15, 2024.
• Li-Cycle will continue to execute its strategic priorities under the leadership of the new CFO and Board Chair.

Key Dates

Keywords

Li-Cycle, auditor, Marcum Canada LLP, KPMG LLP, shareholder meeting, proxy statement, CFO, Board Chair, corporate governance, accounting