TMC the metals (TMC) Financial Report Summaries

Risks

• Our business is subject to numerous regulatory uncertainties which, if not resolved in our favor, would have a material adverse impact on our business.
• Our resource development activities are subject to changes in government regulation and political instability.
• Changes to any of the laws, rules, regulations or policies to which we are subject could have a significant impact on our business.
• Our exploration, collecting, processing and refining activities are subject to extensive and costly environmental requirements, and current and future laws, regulations, and permits may impose significant costs, liabilities, or obligations, or could limit or prevent our ability to continue our operations as currently contemplated or to undertake new operations.
• We may become subject to environmental liabilities as a result of noncompliance with existing or future regulations.
• The grade and quality of the polymetallic nodule deposits that we intend to develop are estimates, and there are no guarantees that such deposits will be suitable for collecting or commercialization.
• No seafloor polymetallic nodule deposit has ever been commercially collected, and our offshore collection technology and development plans and processes may not be sufficient to accomplish our objectives.
• We are reliant on third parties to conduct independent analyses with respect to our business, and any inaccuracies in such analyses could have a material adverse effect on our offshore collection and onshore processing and refining objectives.
• Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations.
• Uncertainty in our estimates of polymetallic nodule deposits could result in lower-than-expected revenues and higher costs.
• We operate in a competitive industry, and there are no assurances that our efforts will be successful.
• The prevailing market prices of nickel, manganese, copper, cobalt, and other commodities will have a material impact on our ability to achieve commercial success.
• We may be adversely affected by fluctuations in demand for nickel, manganese, copper, cobalt, and other commodities.
• Our ability to generate revenue will be diminished if we are unable to compete with substitutions for the minerals that we intend to process.
• Reduced growth in the adoption of electric vehicles by consumers may change our strategy and our business and operating results may be impacted.
• We, our partners and our shareholders may be adversely impacted by pressure and lobbying from non-governmental organizations.
• Offshore collection and onshore processing and refining operations pose inherent risks and costs that may negatively impact our business.
• Our business is contingent on our ability to successfully identify, collect, ship and process polymetallic nodules profitably, and in doing so, we will need to rely on certain existing and future strategic relationships, some of which we may be unable to maintain and/or develop.
• Some of the offshore equipment that we will need to accomplish our objectives has not been manufactured and/or tested.
• The polymetallic nodules that we may recover may require specialized onshore processing and refining, and there is no certainty that such processes will result in a recovery of metals that is consistent with our expectations, or that we will be able to develop or otherwise access processing plants that are suitable for our purposes.
• Our exploration and polymetallic nodule collecting activities may be affected by natural hazards, which could have a material adverse effect on our business.
• Fluctuations in transportation costs or disruptions in transportation, processes or services, or damage or loss during transport could decrease our profitability or impair our ability to supply polymetallic nodules, processed minerals or products to our customers, which could adversely affect our results of operations.
• Actual capital costs, financing strategies, operating costs, production and economic returns may differ significantly from those we have anticipated and there can be no assurance that any future development activities will result in profitable metal production operations.
• We have limited operating history, and there can be no assurance that we will be able to commercially develop our resource areas or achieve profitability in the future.
• Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and materially adversely affect our results of operations.
• A shortage of skilled technicians and engineers may further increase operating costs, which could materially adversely affect our results of operations.
• We depend on key personnel for the success of our business. The loss of key personnel or the hiring of ineffective personnel could negatively impact our operations and profitability.
• Our growth will depend on our ability to execute on our plans and expand our operations and controls while maintaining effective cost controls.
• We are dependent upon information technology systems, which are subject to cyber threats, disruption, damage and failure.
• Our business is subject to a variety of risks, some of which may not be covered by our future or existing insurance policies.
• We may not be able to adequately protect our intellectual property rights. If we fail to adequately enforce or defend our intellectual property rights, our business may be harmed.
• We or our partners may not be able to obtain necessary patents and the legal protection afforded by any patents may not adequately protect our or our partners’ rights or permit us to gain or keep any competitive advantage.
• If we infringe, or are accused of infringing, on the intellectual property rights of third parties, it may increase our costs or prevent us from being able to commercialize new products.
• We may issue additional Common Shares or other equity securities without shareholder approval, which would dilute your ownership interests and may depress the market price of our common shares and sales of a substantial amount of our Common Shares may cause the price of our Common Shares to fall.
• We are involved in litigation that may adversely affect us and may not be successful in our litigation related to non-performing Private Investment in Public Equity (“PIPE”) investors.
• We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “emerging growth companies” or “smaller reporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
• We may incur debt in the future, and our ability to satisfy our obligations thereunder remains subject to a variety of factors, many of which are not within our control.
• An active trading market for our Common Shares and warrants may not be sustained, which would adversely affect the liquidity and price of our securities.
• There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
• The market price of our securities may be volatile, which could cause the value of your investment to decline.
• We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous, thereby making the warrants worthless.
• Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our Common Shares.
• As we are not a reporting issuer in Canada, our Common Shares and Special Shares may be subject to restrictions on resale in Canada.
• We are exposed to risks in our international operations, which could adversely affect our business.
• We may be classified as a PFIC in any taxable year which could result in adverse U.S. federal income tax consequences to U.S. holders.
• Canadian law and our Notice and Articles contain certain provisions, including anti-takeover provisions that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.
• Our Notice of Articles and Articles provide that any derivative actions, actions relating to breach of fiduciary duties and other matters relating to our internal affairs will be required to be litigated in the Province of British Columbia, Canada, and will contain an exclusive federal forum provision for certain claims under the Securities Act, which could limit your ability to obtain a favorable judicial forum for disputes with us.
• Our Notice and Articles permit us to issue an unlimited number of Common Shares and preferred shares without seeking approval of the holders of our Common Shares.
• As a company incorporated in British Columbia with some of our directors and officers residing outside of the U.S., it may be difficult for investors in the U.S. to enforce civil liabilities against us based solely upon the federal securities laws of the U.S.