An investigation for investors in Li-Cycle Holdings Corp. (NYSE: LICY) shares over potential securities laws violations by Li-Cycle Holdings Corp. was announced.
San Diego, CA -- (SBWIRE) -- 04/15/2022 -- An investigation was announced concerning potential securities laws violations by Li-Cycle Holdings Corp. in connection with certain financial statements.
Investors who purchased shares of Li-Cycle Holdings Corp. (NYSE: LICY), have certain options and should contact the Shareholders Foundation at email@example.com or call +1(858) 779 - 1554.
The investigation by a law firm focuses on whether a series of statements by Li-Cycle Holdings Corp. regarding its business, its prospects and its operations were materially false and misleading at the time they were made.
Canada, based Li-Cycle Holdings Corp. engages in the lithium-ion battery resource recovery and lithium-ion battery recycling business in North America. On March 24, 2022, a short report was released regarding Li-Cycle Holdings Corp's operations. The report stated "In our opinion, Li-Cycle recognizes revenues using an Enron-like mark-to-model accounting gimmick. Li-Cycle recognizes revenues months prior to the actual sales of its recycled black mass, based on its own provisional estimate of the future value of the product. This accounting treatment is plainly vulnerable to abuse, giving Li-Cycle discretion over its reported revenues. We suspect that under this framework, Li-Cycle marks up the value of its receivables on unsold products and runs the gains through its revenue line. In the most recent quarter, we calculate that 45% of Li-Cycle's revenues were derived from simply marking up receivables on products that had not been sold. We suspect that such questionable accounting could explain why Li-Cycle's CFO and auditor resigned in January 2022, mere months after the Company went public." The report additionally added, "Even by SPAC standards, Li-Cycle is a governance nightmare. Its founder is a serial penny stock promoter recently sanctioned by Canadian authorities and its management team diverted half a million in shareholder money to enrich their entourage with wasteful spending, including tens of thousands of dollars on leather goods purchased from the CEO's family. Li-Cycle's cash burn is so severe and far above previous guidance that analysts have already downgraded the stock and told the market to expect Li-Cycle to raise at least $1 billion through debt and dilutive equity issuances."
Those who purchased shares of Li-Cycle Holdings Corp. (NYSE: LICY) have certain options and should contact the Shareholders Foundation.
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