TMC the metals (TMC) risk factors, FY2025 10-K

Other

1. 01Summary of Material Risks Associated with Our Business
2. 02Our business is subject to numerous regulatory uncertainties which, if not resolved in our favor, would have a material adverse impact on our businessNew
3. 03On March 4, 2023, the United Nations finalized the text of the UN High Seas Treaty. The treaty does not replace or amend UNCLOS, or the authority of the ISA, and must be interpreted consistently with the provisions of the Convention, including the rights granted thereunder48% rewritten
4. 04Our efforts to pursue deep-sea nodule exploration licenses and a commercial recovery permit under DSHMRA may subject us to conflicting regulatory regimes, uncertain legal interpretations, and operational risks that could adversely affect our businessNew
5. 05Our resource development activities are subject to changes in government regulation and political instability31% rewritten
6. 06Changes to any of the laws, rules, regulations or policies to which we are subject could have a significant impact on our business83% rewritten
7. 07We may become subject to environmental liabilities as a result of noncompliance with existing or future regulations
8. 08The 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
9. 09No 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 objectives50% rewritten
10. 10We 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 objectives79% rewritten
11. 11Mineral resource and mineral reserve estimates from the contract areas of NORI and TOML are only estimates 51% rewritten
12. 12Our business is subject to significant risks, and we may never develop minerals in sufficient grade or quantities to justify commercial operations
13. 13Uncertainty in our estimates of polymetallic nodule deposits could result in lower-than-expected revenues and higher costs
14. 14We operate in a competitive industry, and there are no assurances that our efforts will be successful27% rewritten
15. 15The prevailing market prices of nickel, manganese, copper, cobalt, and other commodities will have a material impact on our ability to achieve commercial success
16. 16We may be adversely affected by fluctuations in demand for nickel, manganese, copper, cobalt, and other commodities
17. 17We may experience difficulty in creating market acceptance for a novel manganese product
18. 18Our ability to generate revenue will be diminished if we are unable to compete with substitutions for the minerals that we intend to process or adapt to shifts in end-market demand35% rewritten
19. 19Negative perceptions related to the offshore collection of polymetallic nodules could have a material adverse effect on our business
20. 20We, our partners and our shareholders may be adversely impacted by pressure and lobbying from non-governmental organizations
21. 21Offshore collection and onshore processing and refining operations pose inherent risks and costs that may negatively impact our business
22. 22The polymetallic nodules that we may recover may require specialized transfer and delivery equipment and processes, and there is no certainty that we will be able to develop or otherwise access such transfer and delivery equipment or processes that are suitable for our purposes
23. 23Our 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
24. 24Some of the offshore equipment that we will need to accomplish our objectives has not been manufactured and/or tested
25. 25Our business is substantially dependent on our strategic relationship with Allseas. If we and Allseas are unable to successfully maintain and expand this relationship, our business may be materially harmed
26. 26While the metallurgical recovery estimates have been derived from commercial operation benchmarking, benchscale and pilot scale testwork, the commercial metal recoveries to products could vary significantly from these estimates43% rewritten
27. 27Our exploration, development and polymetallic nodule collecting activities may be affected by natural hazards, which could have a material adverse effect on our business
28. 28Fluctuations 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
29. 29Actual 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 operations60% rewritten
30. 30We 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 future64% rewritten
31. 31Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and materially adversely affect our results of operations
32. 32A shortage of skilled technicians and engineers may further increase operating costs, which could materially adversely affect our results of operations
33. 33We 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
34. 34Our growth will depend on our ability to execute on our plans and expand our operations and controls while maintaining effective cost controls
35. 35We are dependent upon information technology systems, which are subject to cyber threats, disruption, damage and failure
36. 36Our business is subject to a variety of risks, some of which may not be covered by our future or existing insurance policies
37. 37We 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
38. 38We 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
39. 39If 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
40. 40If we are unable to resolve claims that may be brought against us by third parties related to their intellectual property rights on terms acceptable to us, we may be precluded from offering some of our products or using some of our processes
41. 41VI. Public Company Risks and Risks Related to our Securities23% rewritten
42. 42We 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 fall43% rewritten
43. 43If our outstanding warrants are exercised, the number of shares eligible for future resale in the public market will increase and result in dilution to our shareholders. You will likely experience further dilution if we issue common shares in future financing transactions61% rewritten
44. 44There can be no assurance that the Public Warrants, Private Warrants, Class A Warrants, Class B Warrants, Class C Warrants, Korea Zinc Warrants, Nauru Warrants, and Tonga Warrants will be in the money, and they may expire worthless55% rewritten
45. 45We are involved in litigation that may adversely affect usNew
46. 46We 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 controlNew
47. 47An active trading market for our common shares and warrants may not be sustained, which would adversely affect the liquidity and price of our securities
48. 48There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq
49. 49As a public company, we are required to implement and maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. There is no guarantee we will maintain effective internal controls in the future43% rewritten
50. 50The market price of our securities may be volatile, which could cause the value of your investment to decline
51. 51We may redeem unexpired warrants prior to their exercise at a time that is disadvantageous, thereby making the warrants worthless
52. 52Reports 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
53. 53As we are not a reporting issuer in Canada, our common shares and Special Shares may be subject to restrictions on resale in Canada
54. 54We are exposed to risks vis-à-vis our multi-national operations, which could adversely affect our business
55. 55Canadian 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
56. 56For instance, our Notice of Articles and Articles contain provisions that establish certain advance notice procedures for nomination of candidates for election as directors at shareholders’ meetings
57. 57Further changes to critical minerals policies and regulations in Canada and the U.S. and elsewhere may impact our ability to conduct our businesses internationally, including processing and sales of minerals and metals, and the ability to negotiate or agree any merger, acquisition or change of control
58. 58Our 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
59. 59As 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