Sec Form 13D Filing - Johnston Timothy filing for Li-Cycle Holdings Corp. (LICY) - 2021-08-16

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

SCHEDULE 13D

UNDER THE SECURITIES EXCHANGE ACT OF 1934

Li-Cycle Holdings Corp.

(Name of Issuer)

Common Shares without par value

(Title of Class of Securities)

50202P105

(CUSIP Number)

Timothy Johnston

Li-Cycle Holdings Corp.

2351 Royal Windsor Dr. Unit 10

Mississauga, ON L5J 4S7

(877) 542-9253

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 5, 2021

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box:

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

The class of equity securities to which this Schedule 13D relates is common shares, without par value of Li-Cycle Holdings Corp. The principal executive office of the Issuer is located at 2351 Royal Windsor Dr Unit 10, Mississauga, Ontario, Canada L5J 4S7.

(a) This Schedule 13D is being filed by (1) Timothy Johnston, the Executive Chairman and a member of the board of directors (the “Board”) of the Issuer, (2) Keperra Holdings, a corporation organized under the laws of Guernsey, which is controlled by Mr. Johnston through Artemis Nominees, which holds legal title to 100 shares of Keperra Holdings as nominee and trustee for Mr. Johnston and (3) Artemis Nominees, a corporation organized under the laws of Guernsey, which is a nominee of and trustee for Mr. Johnston (together, the “Reporting Persons”).

(b) The address and principal business office of Timothy Johnston is 2351 Royal Windsor Dr Unit 10, Mississauga, Ontario, Canada L5J 4S7. The address and principal business office of Keperra Holdings and Artemis Nominees is Trafalgar Court, 2nd Floor, East Wing, Admiral Park, St Peter Port, Guernsey, GY1 3EL. The name, business address, present principal occupation or employment (and the name of any principal business or other organization in which such employment is conducted) and citizenship of each director and executive officer of Keperra Holdings and Artemis Nominees are set forth on Schedule A and incorporated by reference.

(c) Timothy Johnston serves as the Executive Chairman and as a member of the Board of the Issuer. The principal executive office of the Issuer is located at 2351 Royal Windsor Dr Unit 10, Mississauga, Ontario, Canada L5J 4S7. The principal business of Keperra Holdings is investment. Mr. Johnston is the sole shareholder of Keperra Holdings. The principal business of Keperra Holdings is nominee shareholding. Artemis Nominees is a nominee of and trustee for Mr. Johnston. The principal business of Artemis Nominees is fiduciary services.

(d) During the past five years, none of the Reporting Persons nor any of the persons listed on Schedule A has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) Mr. Johnston was previously a director and the chief executive officer of Desert Lion Energy Inc. (“Desert Lion”), a lithium exploration and development company whose securities were listed on the TSX Venture Exchange (the “TSX-V”), from February 2018 to July 2019, when Desert Lion was sold to a third party. In mid-2019, the TSX-V initiated a review of the Desert Lion senior management team, including Mr. Johnston, to assess their suitability to act as directors or officers of a listed issuer as a result of certain incorrect statements and omissions made by Desert Lion in its press releases for a financing transaction and its listing application with the TSX-V for approval of the issuance of shares in connection with such transaction. On May 11, 2020, the TSX-V made a procedural determination that requires Mr. Johnston to make a written application to and obtain the prior written acceptance from the Compliance & Disclosure Department of the TSX-V for any proposed involvement by Mr. Johnston as a director or officer of (or to perform similar functions for) any TSX-V-listed issuer. The TSX-V has subsequently publicly stated that it has not reached any conclusions regarding the suitability of Mr. Johnston to be a director or officer of a TSX-V listed company in the future.

During the past five years, neither Keperra Holdings nor Artemis Nominees have, nor have any of the persons listed on Schedule A (other than Mr. Johnston, as noted above), been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he or it was, or is, subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.

(f) Mr. Johnston is a citizen of Australia. Keperra Holdings is a corporation organized under the laws of Guernsey. Artemis Nominees is a corporation organized under the laws of Guernsey.

On August 10, 2021 (the “Closing Date”), the Issuer consummated the previously announced business combination (the “Business Combination”) between Li-Cycle Corporation., a corporation organized under the laws of the Province of Ontario, Canada (“Li-Cycle”) and Peridot Acquisition Corp., a Cayman Islands exempted company, (“Peridot”), contemplated by the business combination agreement (the “Business Combination Agreement”), dated as of February 15, 2021, by and among Peridot, Li-Cycle and Li-Cycle Holdings Corp. (a predecessor of the Issuer) (“Newco”).

In connection with the Business Combination, Peridot continued as a corporation existing under the laws of the Province of Ontario (“Peridot Ontario”). Peridot Ontario and Newco amalgamated (the “Amalgamation” and Peridot Ontario and Newco as so amalgamated, “Amalco”), and in connection therewith, the Class A common shares and warrants to purchase Class A common shares of Peridot Ontario converted into an equivalent number of common shares of Amalco (the “Amalco Shares”) and warrants to purchase an equivalent number of Amalco Shares, and the common share in the Issuer held by Li-Cycle was exchanged for an Amalco Share; (ii) the Amalco Share held by Li-Cycle was purchased for cancellation by Amalco for cash equal to the subscription price for the common share in Newco for which such Amalco Share was exchanged pursuant to the Amalgamation; (iii) the preferred shares of Li-Cycle converted into common shares of Li-Cycle (“Li-Cycle Common Shares); and (iv) Amalco acquired all of the issued and outstanding Li-Cycle Common Shares from Li-Cycle’s shareholders (including Li-Cycle Common Shares issued upon exercise, cancellation, exchange or settlement of all issued and outstanding equity awards (whether vested or unvested), including pursuant to the plan of arrangement (the “Arrangement”), but excluding any equity awards that were cancelled and exchanged for equity awards of Amalco and remained outstanding on the day following the Closing Date) in exchange for Amalco Shares having an aggregate equity value of $975 million. Upon the closing of the Business Combination, Li-Cycle became a wholly-owned subsidiary of Amalco and Amalco began using the name Li-Cycle Holdings Corp.

Prior to the Business Combination, in 2018, Mr. Johnston transferred his Li-Cycle Common Shares to Keperra Holdings. In connection with the closing of the Business Combination, the Common Shares were received by Keperra Holdings in exchange for Li-Cycle Common Shares, based on the exchange ratio of one Li-Cycle Common Share for 39.91 Common Shares (the “Exchange Ratio”).

As part of the Business Combination, Mr. Johnston acquired ownership of 91,594 Common Shares in exchange for restricted share units of Li-Cycle held by him prior to the effective time of the Arrangement. 45,797 Common Shares were withheld to satisfy Mr. Johnston’s tax obligations from the conversion of 91,594 restricted stock units of Li-Cycle.

As part of the Business Combination, each outstanding option to acquire Li-Cycle Common Shares was automatically converted into an option exercisable for Common Shares of the Issuer based on the Exchange Ratio in accordance with the Business Combination Agreement. Each such option was converted by multiplying the number of Li-Cycle Common Shares subject to such option by the Exchange Ratio to arrive at the number of Issuer shares subject to such converted option, and dividing the exercise price by the Exchange Ratio to arrive at the exercise price of such converted option. The Exchange Ratio for purposes of the Business Combination was 39.91 and was determined by dividing (i) the sum of (A) 975,000,000, and (B) the Aggregate Exercise Price (as defined in the Business Combination Agreement) divided by $10, by (ii) the Company Fully Diluted Shares (as defined in the Business Combination Agreement).

Pursuant to the Arrangement, the options that Mr. Johnston was granted by Li-Cycle under the Li-Cycle Share Option Plan (the “Legacy Option Plan”) fully vested in connection with the Business Combination and he elected to roll over such options so that they remain outstanding under the Legacy Option Plan. Such options were adjusted in accordance with the terms of the Legacy Option Plan and the Arrangement and now cover Common Shares of Issuer. Pursuant to the Arrangement, Mr. Johnston’s options expiring on September 12, 2022 were adjusted to have an exercise price of $0.02 and cover 399,100 Common Shares of Issuer, his options expiring on April 11, 2023 were adjusted to have an exercise price of $0.02 and cover 159,640 Common Shares of Issuer and his options expiring on July 19, 2024 were adjusted to have an exercise price of $0.36 and cover 199,550 Common Shares of Issuer.

The information set forth in Item 4 and Item 6 of this Schedule 13D is incorporated by reference herein.

The Reporting Persons became the beneficial owners of more than 5% of the outstanding Common Shares of the Issuer upon their receipt, as part of the Arrangement (as defined below), of 11,047,167 Common Shares issued to Keperra Holdings Limited in exchange for the Li-Cycle Common Shares transferred from Mr. Johnston.

Mr. Johnston also received the following securities as part of the Arrangement:

At any time and from time to time, Mr. Johnston and the other Reporting Person may acquire beneficial ownership of additional Common Shares, additional options and other equity awards, warrants or other securities convertible, exchangeable or exercisable for Common Shares by either (i) acquisition or purchase in the open market or in privately-negotiated transactions or otherwise or (ii) in the case of Mr. Johnston, receipt from the Issuer of future compensatory equity incentive awards for which he qualifies, including, but not limited to, any stock option, share appreciation right, restricted share award, restricted share unit award, performance award, other share-based award or other cash-based award related to the Common Shares. In addition, at any time and from time to time, Mr. Johnston or Keperra Holdings may determine, to the extent permitted by the lock-up arrangements (the “Lock-Up Arrangements”) set forth in an investor and registration rights agreement, entered into on August 10, 2021, by and among the Issuer, the holders of Peridot Class B Shares and certain former holders of Li-Cycle Common Shares (“Certain Former Li-Cycle Holders”), including Keperra Holdings (the “Investor Agreement”), (i) to dispose of all or a portion of the Common Shares (or securities exercisable for, exchangeable or convertible into Common Shares) which are beneficially owned by such Reporting Person and over which such Reporting Person has investment

power in the open market or in privately-negotiated transactions or otherwise or (ii) to the extent permitted by law and the policies of the Issuer, to engage in hedging or pledging transactions with respect to the Common Shares or other securities of the Issuer. Each of the Reporting Persons may also determine to sell, purchase, hold, vote, trade, dispose of or otherwise deal in Common Shares and/or other equity, debt or other securities of the Issuer and/or its affiliates at times, and in such manner, as he or it deems advisable, to the extent permitted by the Lock-Up Arrangements and the transfer restrictions imposed by the instruments governing securities of the Issuer or by applicable law.

Other than as described above, none of the Reporting Persons has any current plans or proposals which relate to, or would result in:

(a) The acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer;

(b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries;

(c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries;

(d) Any change in the present Board or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the Board;

(e) Any material change in the present capitalization or dividend policy of the Issuer;

(f) Any other material change in the Issuer’s business or corporate structure;

(g) Changes in the Issuer’s memorandum of association, amended and restated articles and by-laws (or equivalent documents) or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person;

(h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

(i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

(j) Any action similar to any of those enumerated above.

Each of the Reporting Persons, however, may, at any time and from time to time, review or reconsider their position and/or change their purpose and/or formulate other plans and/or make other proposals, and take such actions with respect to his investment in the Issuer, including any or all of the actions set forth in clauses (a) through (j) above. Such positions and/or plans or proposals may include one or more plans or proposals that relate to or would result in any of the actions required to be reported herein, including, without limitation, such matters as acquiring additional securities of the Issuer or disposing of securities of the Issuer; entering into a n extraordinary transaction such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; selling or transferring a material amount of assets of the Issuer or any of its subsidiaries; changing the present board of directors or management of the Issuer, including changing the number or term of directors or filling any existing vacancies on the board of directors of the Issuer; materially changing the present capitalization or distribution policy of the Issuer; materially changing the Issuer’s business or structure; changing the Issuer’s certificate of incorporation, bylaws or instruments corresponding thereto or taking other actions which may impede the acquisition of control of the Issuer by any person; causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; causing a class of equity securities of the Issuer to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Act of 1933, as amended; and taking any action similar to any of those enumerated above.

In addition, in his roles serving as the Executive Chairman and as a member of the Board of the Issuer, Mr. Johnston has the ability directly or indirectly to influence the management and policies of the Issuer. In his capacity as the Executive Chairman and a member of the Board, Mr. Johnston may from time to time discuss matters related to clauses (a) through (j) of Item 4 of Schedule 13D with members of management or directors of the Issuer, other shareholders, industry analysts, existing or potential strategic partners or competitors, investment and financing professionals, sources of credit and other investors and may take actions with respect to such matters in his capacity as the Executive Chairman and as a member of the Board of the Issuer.

The information set forth in Items 5 and 6 of this Schedule 13D is incorporated by reference herein.

(a) As of August 10, 2021, upon the closing of the Business Combination, Mr. Johnston may be deemed to beneficially own an aggregate of 11,897,051 Common Shares of the Issuer, representing approximately 7.3% of the outstanding Common Shares, and consisting of (1) 91,594 Common Shares directly owned by Mr. Johnston, (2) 11,047,167 Common Shares directly owned by Keperra Holdings, which is owned by Artemis Nominees, a nominee company that is the nominee and trustee for Mr. Johnston, (3) options to acquire 758,290 Common Shares which remain outstanding under the Legacy Option Plan, all of which were exercisable as of August 10, 2021. As of August 10, 2021, upon the closing of the Business Combination, Keperra Holdings was the record owner of 11,047,167 Common Shares and may be deemed to beneficially own an aggregate of 11,047,167 Common Shares, representing approximately 6.7% of the outstanding Common Shares.

(b) As of August 10, 2021, Mr. Johnston has:

As of August 10, 2021, Keperra Holdings has:

As of August 10, 2021, Artemis Nominees has:

(c) Except as otherwise described in Item 3, Item 4 and Item 6 and elsewhere in this Schedule 13D, no transactions in the Common Shares of the Issuer were effected by the Reporting Persons during the past 60 days.

(d) Except as set forth herein, to the knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any Common Shares of the Issuer beneficially owned by the Reporting Persons.

(e) Not applicable.

The information set forth in Items 3, 4 and 6 is incorporated by reference herein.

Set forth below are the contracts, arrangements, understandings or relationships (legal or otherwise) between each of the Reporting Persons and any other persons with respect to any securities of the Issuer.

Investor Agreement

On August 10, 2021, the Issuer, the holders of Peridot Class B Shares and Certain Former Li-Cycle Holders (together, the “Holders”), including Keperra Holdings, entered into the Investor Agreement. Pursuant to the Investor Agreement, securities of the Issuer held by the Holders will be subject to certain transfer restrictions until (i) with respect to the holders of the Peridot Class B Shares, the earliest of (a) one year after the Closing (as defined in the Investor Agreement) and (b) (x) the last consecutive trading day where the last reported sale price of the Common Shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing

at least 150 days after the Closing (as defined in the Investor Agreement), or (y) the date on which the Issuer completes a liquidation, merger, share exchange or other similar transaction that results in all of its public shareholders having the right to exchange their Common Shares for cash, securities or other property, and (ii) with respect to the Certain Former Li-Cycle Holders, 180 days following the Closing.

Pursuant to the Investor Agreement, the Issuer will be obligated to file a registration statement to register the resale of certain Common Shares held by the Holders within 30 days after the Closing and to use commercially reasonable efforts to cause such registration statement to be declared effective as soon as practicable after such filing, but no later than the earlier of (i) the 75th day (or the 105th day if the SEC notifies that it will “review” such registration statement) following the Closing Date (as defined in the Investor Agreement) and (ii) the 15th business day after the date the SEC notified that such registration statement will not be “reviewed” or will not be subject to further review. In addition, pursuant to the terms of the Investor Agreement and subject to certain requirements and customary conditions, including with regard to the number of demand rights that may be exercised, the Holders may demand at any time or from time to time, that the Issuer file a registration statement on Form F-3 (or on Form F-1 if Form F-3 is not available) to register the securities of the Issuer held by such Holders, and each may specify that such demand registration take the form of an underwritten offering, in each case subject to limitations on the number of demands and underwritten offerings that can be requested by each Holder, as specified in the Investor Agreement. Holders will also have “piggy-back” registration rights, subject to certain requirements and customary conditions. The Investor Agreement also provides that the Issuer will pay certain expenses relating to such registrations and indemnify the Holders against (or make contributions in respect of) certain liabilities that may arise under the Securities Act of 1933, as amended.

The foregoing description of the Investor Agreement is qualified in its entirety by reference to the full text of the Investor Agreement, a copy of which is included as Exhibit 10.1 hereto and is incorporated herein by reference.

Compensation Plans

Li-Cycle Share Option Plan

Historically, Li-Cycle has made equity-based awards to its executive officers, including Mr. Johnston, which included grants of options under the Li-Cycle Share Option Plan (the “Legacy Option Plan”). Immediately prior to the Business Combination, Mr. Johnston held 19,000 options under the Legacy Option Plan, including (i) 10,000 options with an exercise price of CDN $0.81 and an expiration date of September 12, 2022, (ii) 4,000 options with an exercise price of CDN $0.81 and an expiration date of April 11, 2023 and (iii) 5,000 options with an exercise price of CDN $18.03 and an expiration date of July 19, 2024. Pursuant to the Arrangement, Mr. Johnston’s options under the Legacy Option Plan fully vested in connection with the Business Combination and he elected to roll over such options so that they remain outstanding under the Legacy Option Plan. Such options were adjusted in accordance with the terms of the Legacy Option Plan and the Arrangement and now cover Common Shares of Issuer. Pursuant to the Arrangement, Mr. Johnston’s options expiring on September 12, 2022 were adjusted to have an exercise price of $0.02 and cover 399,100 Common Shares of Issuer, his options expiring on April 11, 2023 were adjusted to have an exercise price of $0.02 and cover 159,640 Common Shares of Issuer and his options expiring on July 19, 2024 were adjusted to have an exercise price of $0.36 and cover 199,550 Common Shares of Issuer.

Issuer 2021 Incentive Award Plan

In connection with the Business Combination, Issuer adopted the Issuer 2021 Incentive Award Plan, pursuant to which Issuer may grant equity awards, including share options, share appreciation rights, restricted share units, dividend equivalents, share payments and other incentive awards, to eligible employees, consultants and directors of Issuer and its subsidiaries, including Mr. Johnston.

From time to time, Mr. Johnston may acquire beneficial ownership of additional Common Shares of Issuer, additional options and other equity awards, warrants or other securities convertible, exchangeable or exercisable for Common Shares of Issuer by receipt from Issuer of future compensatory equity incentive awards for which he qualifies, including, but not limited to, awards under the Issuer 2021 Incentive Award Plan.

The foregoing description of the Issuer 2021 Incentive Award Plan is qualified in its entirety by reference to the full text of the Issuer 2021 Incentive Award Plan, a copy of which is included as Exhibit 10.2 hereto and is incorporated herein by reference.

Employment Agreement

On September 1, 2020, Li-Cycle entered into an employment agreement with Mr. Johnston (the “Employment Agreement”) setting forth the terms and conditions of his employment as Li-Cycle’s Executive Chairman, including base salary, annual performance bonus and benefits. Mr. Johnston’s employment is for an indefinite period, subject to termination in accordance with the terms of the Employment Agreement. Pursuant to the Employment Agreement, Mr. Johnston’s annual base salary is CDN $200,000, and he is eligible to receive an annual bonus award in the sole and absolute discretion of Issuer, provided that he is actively employed through the date of any bonus payment.    

In the case of Issuer’s termination of Mr. Johnston’s employment other than for cause, or in the case of Mr. Johnston’s termination of his employment for good reason (as defined in the Employment Agreement) following a change of control (as defined in the Employment Agreement and which was not triggered by consummation of the Business Combination), Mr. Johnston is entitled to accrued but unpaid base salary, vacation pay, expense reimbursements and benefits, an additional fifty-two weeks’ base salary and bonus (calculated on the basis of an average of each bonus received by Mr. Johnston in the three fiscal years preceding the termination date), and, until the earlier of fifty-two weeks from the termination date or the date on which Mr. Johnston commences alternative employment or consulting work, continued coverage under Issuer group benefit plans in place and as amended from time to time.

If Mr. Johnston is terminated for cause, he will not be entitled to any severance pay, notice or compensation in lieu of notice, nor to any bonus payment, other than any minimum entitlements to which he would be entitled under applicable law. He will, however, be entitled to payment of any unpaid base salary, vacation pay and expense reimbursements accrued to the termination date.

The information set forth in Item 3 and Item 4 of this Schedule 13D is incorporated by reference herein.

The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is included as Exhibit 10.3 hereto and is incorporated herein by reference.

Except as described above and elsewhere in this Schedule 13D, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any person with respect to any securities of the Issuer.

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: August 16, 2021

Schedule A

Keperra Holdings Limited

The names, citizenship and present principal occupation or employment and business address of the directors and executive officers are set forth below.

Directors

Executive Officers

None.

Artemis Nominees Limited

The names, citizenship and present principal occupation or employment and business address of the directors and executive officers are set forth below.

Directors

Executive Officers

None.