Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Li-Cycle Holdings Corp. f/k/a Peridot Acquisition Corp. (“Li-Cycle” or the “Company”) (NYSE: LICY) securities between February 16, 2021 and March 23, 2022, inclusive (the “Course Period”). Li-Cycle investors have until June 20, 2022 to file a petition of the main plaintiff.
Investors experiencing losses on their Li-Cycle investments are encouraged to contact The Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email at [email protected] .com.
On August 10, 2021, Li-Cycle merged with special purpose acquisition company, Peridot Acquisition Corp.
On March 24, 2022, Blue Orca Capital released a report that described Li-Cycle as a “near-fatal combination of stock promotion, laughable governance, a hemorrhagic bankrupt company, and highly questionable Enron-like accounting.” “.” The report also alleged, among other things, that Li-Cycle had “diverted $529,902 in investment capital to the family  of its founders through a series of highly questionable related party payments,” and that its “cash burn is so severe and well above previous forecasts” that “will require the company to raise at least $1 billion. dollars. . . largely by massively diluting current shareholders.” The report further states that the company’s largest customer, Traxys, is not actually a customer, but a “dealer or marketing partner who resells Li-Cycle’s black mass to end buyers,” and that “no only Traxys is not the end buyer, but the revenue recognized by Li-Cycle is only Li-Cycle’s initial estimate of the price of the product it expects to receive from the end customer once the transaction is final concluded. ”
On this news, Li-Cycle’s stock fell $0.47, or 5.6%, to close at $7.93 per share on March 24, 2022, hurting investors.
The Complaint filed in this Class Action alleges that throughout the Class Period, the Defendants made materially false and/or misleading statements, and failed to disclose material adverse facts regarding the business, operations and societal prospects. Specifically, defendants failed to disclose to investors that: (1) Li-Cycle’s largest customer, Traxys North America LLC, is not actually a customer, but merely a broker providing working capital to the company while Traxys attempts to sell Cycle’s Li-Product to end customers; (2) the Company has engaged in transactions with highly questionable related parties; (3) the company’s mark-to-model accounting is vulnerable to abuse and gives a false impression of growth; (4) a significant portion of the company’s reported revenue was derived simply from gross up receivables on products that had not been sold; (5) the gross margins of the Company have probably been negative since its inception; (6) the Company will need an additional $1 billion in funding to support its expected growth (which is more than the Company raised through the merger); and (7) accordingly, Defendants’ the positive statements about the company’s business, operations and prospects were materially misleading and/or lacked reasonable basis at all relevant times.
If you have purchased Li-Cycle titles, have information or want to know more about these claims, or have any questions regarding this announcement or your rights or interests in these matters, please contact Howard G. Smith, Esquire , of the Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020, by phone at (215) 638-4847, toll free at (888) 638-4847, or by e-mail at [email protected], or visit our website at www.howardsmithlaw.com.
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