A lawsuit was filed on behalf of investors in Li-Cycle Holdings Corp. (NYSE:LICY) shares over alleged securities laws violations.
San Diego, CA -- (SBWIRE) -- 05/02/2022 -- An investor, who purchased shares of Li-Cycle Holdings Corp. (NYSE: LICY), filed a lawsuit in the U.S. over alleged Securities Laws violations by Li-Cycle Holdings Corp. a/k/a Peridot Acquisition Corp.
Investors who purchased shares of Li-Cycle Holdings Corp. (NYSE: LICY) have certain options and for certain investors are short and strict deadlines running. Deadline: June 20, 2022. NYSE: LICY investors should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.
Canadian 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."
Shares of Li-Cycle Holdings Corp. (NYSE: LICY) declined from $9.48 per share on March 17, 2022, to as low as $6.39 per share on April 25, 2022.
The plaintiff claims that between February 16, 2021 and March 23, 2022, the defendants made false and/or misleading statements and/or failed to disclose that Li-Cycle's largest customer, Traxys North America LLC, is not actually a customer, but merely a broker providing working capital financial to the Company while Traxys tries to sell Li-Cycle's product to end customers, that the Company engaged in highly questionable related party transactions, that the Company's mark-to-model accounting is vulnerable to abuse and gave a false impression of growth, that a significant portion of the Company's reported revenues were derived from simply marking up receivables on products that had not been sold, that the Company's gross margins have likely been negative since inception, that the Company will require an additional $1 billion of funding to support its planned growth (which is a figure greater than the Company raised via the merger), and that as a result, defendants' public statements were materially false and/or misleading at all relevant times
Those who purchased shares of Li-Cycle Holdings Corp. (NYSE: LICY) have certain options and should contact the Shareholders Foundation.
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The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.