UNITED STATES
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TMC THE METALS COMPANY INC.
FORM 10-Q
For the quarterly period ended June 30, 2024
TABLE OF CONTENTS
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In this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” the “Company” and “TMC” mean TMC the metals company Inc. and our subsidiaries. TMC is incorporated under the laws of the province of British Columbia, Canada. The Company’s common shares and public warrants to purchase common shares trade on the Nasdaq Global Select Market (“Nasdaq”), under the symbols “TMC” and “TMCWW,” respectively.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events, our future operations or financial performance, or our plans, strategies and prospects. These statements are based on the beliefs and assumptions of our management team. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or performance, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates” or “intends” or the negative of these terms, or other comparable terminology intended to identify statements about the future, although not all forward-looking statements contain these identifying words. The forward-looking statements are based on projections prepared by, and are the responsibility of, our management. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
● | the commercial and technical feasibility of seafloor polymetallic nodule collection and processing; |
● | our and our partners’ development and operational plans, including with respect to the planned uses of polymetallic nodules, where and how nodules will be obtained and processed, the expected environmental, social and governance impacts thereof and our plans to assess these impacts and the timing and scope of these plans, including the timing and expectations with respect to our receipt of exploitation contracts and our commercialization plans; |
● | the supply and demand for battery metals and battery cathode feedstocks, copper cathode and manganese ores; |
● | the future prices of battery metals and battery cathode feedstocks, copper cathode and manganese ores; |
● | the timing and content of International Seabed Authority’s (“ISA”) final exploitation regulations that will create the legal and technical framework for exploitation of polymetallic nodules in the Clarion Clipperton Zone of the Pacific Ocean (“CCZ”); |
● | government regulation of mineral extraction from the deep seafloor and changes in mining laws and regulations; |
● | technical, operational, environmental, social and governance risks of developing and deploying equipment to collect and ship polymetallic nodules at sea, and to process such nodules on land; |
● | the sources and timing of potential revenue as well as the timing and amount of estimated future production, costs of production, other expenses, capital expenditures and requirements for additional capital; |
● | cash flow provided by operating activities; |
● | the expected activities of our partners under our key strategic relationships; |
● | the sufficiency of our cash on hand and the borrowing ability under our credit facility with a company related to Allseas Group S.A., as we expect it to be amended, and credit facility with ERAS Capital LLC/Gerard Barron to meet our working capital and capital expenditure requirements, the need for additional financing and our ability to continue as a going concern; |
● | our ability to raise financing in the future, the nature of any such financing and our plans with respect thereto; |
● | our agreement in principle to amend our credit facility with a company related to Allseas Group S.A.; |
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● | any litigation to which we are a party; |
● | claims and limitations on insurance coverage; |
● | our plans to mitigate our material weakness in our internal control over financial reporting; |
● | the restatement of our financial statements; |
● | geological, metallurgical and geotechnical studies and opinions; |
● | mineral resource estimates and our ability to define and declare reserve estimates; |
● | our status as an emerging growth company, non-reporting Canadian issuer and passive foreign investment company; |
● | infrastructure risks; |
● | dependence on key management personnel and executive officers; |
● | political and market conditions beyond our control; |
● | the impact of pandemics on our business; and |
● | our financial performance. |
These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q, and current expectations, forecasts and assumptions, and involve a number of judgments, risks and uncertainties. Important factors could cause actual results, performance or achievements to differ materially from those indicated or implied by forward-looking statements such as those described under the caption “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”), on March 25, 2024, as amended on April 18, 2024 (the “2023 Annual Report on Form 10-K”), as updated and/or supplemented in subsequent filings we make with the SEC, including this Quarterly Report on Form 10-Q. Such risks are not exhaustive. New risk factors emerge from time to time, and it is not possible to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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PART I – FINANCIAL INFORMATION
Item 1.Financial Statements
TMC the metals company Inc.
Condensed Consolidated Balance Sheets
(in thousands of US Dollars, except share amounts)
(Unaudited)
As at | As at | |||||||
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| June 30, |
| December 31, | ||||
ASSETS |
| Note |
| 2024 |
| 2023 | ||
Current |
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Cash | $ | |
| $ | | |||
Receivables and prepayments |
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Non-current |
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Exploration contracts |
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Right of use asset | 6 | | | |||||
Equipment |
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Software | | | ||||||
Investment | 7 | | | |||||
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TOTAL ASSETS | $ | |
| $ | | |||
LIABILITIES |
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Current |
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Accounts payable and accrued liabilities |
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Short-term debt | 6,14 | | — | |||||
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Non-current |
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Deferred tax liability |
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Royalty liability | 7 | | | |||||
Warrants liability |
| 10 |
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TOTAL LIABILITIES | $ | |
| $ | | |||
EQUITY |
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Common shares(unlimited shares, |
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Class A - J Special Shares | — | — | ||||||
Additional paid in capital |
| |
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Accumulated other comprehensive loss |
| ( |
| ( | ||||
Deficit |
| ( |
| ( | ||||
TOTAL EQUITY |
| ( |
| | ||||
TOTAL LIABILITIES AND EQUITY | $ | |
| $ | |
Nature of Operations (Note 1)
Contingent Liabilities (Note 15)
Subsequent Event (Note 17)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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TMC the metals company Inc.
Condensed Consolidated Statements of Loss and Comprehensive Loss
(in thousands of US Dollars, except share and per share amounts)
(Unaudited)
Three months ended | Six months ended | |||||||||||||
|
| June 30, | June 30, | |||||||||||
| Note |
| 2024 |
| 2023 |
| 2024 |
| 2023 | |||||
Operating expenses |
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|
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|
|
|
|
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Exploration and evaluation expenses |
| 8 | $ | |
| $ | |
| $ | |
| $ | | |
General and administrative expenses | |
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Operating loss | |
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Other items |
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|
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|
|
| ||||||||
Equity-accounted investment loss | 7 | | | | ||||||||||
Change in fair value of warrant liability | 10 | ( | | ( | | |||||||||
Foreign exchange loss (gain) |
| ( |
| |
| ( |
| | ||||||
Interest income | ( |
| ( |
| ( |
| ( | |||||||
Fees and interest on borrowings and credit facilities | 6,14 | |
| |
| |
| | ||||||
Net Loss and comprehensive loss for the period | $ | |
| $ | |
| $ | |
| $ | | |||
Net Loss per share - Basic and diluted |
| $ | |
| $ | |
| $ |
| $ | | |||
Weighted average number of common shares outstanding – basic and diluted |
|
| |
| |
| |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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TMC the metals company Inc.
Condensed Consolidated Statements of Changes in Equity
(in thousands of US Dollars, except share amounts)
(Unaudited)
Accumulated | |||||||||||||||||||||||
Common Shares | Additional | Other | |||||||||||||||||||||
Preferred | Special | Paid in | Comprehensive | ||||||||||||||||||||
Three months ended June 30, 2024 |
| Shares |
| Amount |
| Shares |
| Shares |
| Capital |
| Loss |
| Deficit |
| Total | |||||||
April 1, 2024 | | $ | | $ | — | $ | — |
| $ | |
| $ | ( |
| $ | ( |
| $ | | ||||
Conversion of restricted share units, net of shares withheld for taxes (Note 11) | | | — | — | ( | — | — | — | |||||||||||||||
Shares issued from ATM (Note 12) | | | — | — | — | — | — | | |||||||||||||||
Exercise of stock options (Note 11) | | | — | — | ( | — | — | | |||||||||||||||
Share purchase under Employee Share Purchase Plan (Note 11) | | | — | — | ( | — | — | | |||||||||||||||
Share-based compensation and expenses settled with equity (Note 11) | — | — | — | — | | — | — | | |||||||||||||||
Loss for the period | — | — | — | — |
| — |
| — |
| ( |
| ( | |||||||||||
June 30, 2024 | | $ | | $ | — | $ | — |
| $ | |
| $ | ( |
| $ | ( |
| $ | ( |
Accumulated | |||||||||||||||||||||||
Common Shares |
|
| Additional |
| Other |
|
| ||||||||||||||||
Preferred | Special | Paid in | Comprehensive | ||||||||||||||||||||
Three months ended June 30, 2023 |
| Shares |
| Amount |
| Shares |
| Shares |
| Capital |
| Loss |
| Deficit |
| Total | |||||||
April 1, 2023 | | $ | | $ | — | $ | — | $ | | $ | ( | $ | ( | $ | | ||||||||
Conversion of restricted share units, net of shares withheld for taxes | | | — | — | ( | — | — | | |||||||||||||||
Share purchase under Employee Share Purchase Plan | | | — | — | ( | — | — | | |||||||||||||||
Share-based compensation and expenses settled with equity |
| — | — | — |
| — |
| |
| — |
| — |
| | |||||||||
Loss for the period |
| — | — | — |
| — |
| — |
| — |
| ( |
| ( | |||||||||
June 30, 2023 |
| | $ | | $ | — |
| $ | — |
| $ | |
| $ | ( |
| $ | ( |
| $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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TMC the metals company Inc.
Condensed Consolidated Statements of Changes in Equity
(in thousands of US Dollars, except share amounts)
(Unaudited)
Accumulated | |||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||
Common Shares | Preferred | Special | Paid in | Comprehensive | |||||||||||||||||||
Six months ended June 30, 2024 |
| Shares |
| Amount |
| Shares |
| Shares |
| Capital |
| Loss |
| Deficit |
| Total | |||||||
January 1, 2024 | | $ | | $ | — | $ | — | $ | | $ | ( | $ | ( | $ | | ||||||||
Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 9) |
| |
| |
| — | — |
| |
| — |
| — |
| | ||||||||
Conversion of restricted share units, net of shares withheld for taxes (Note 11) | | | — | — | ( | — | — | — | |||||||||||||||
Shares issued as per At-the-Market Equity Distribution Agreement (Note 12) | | | — | — | — | — | — | | |||||||||||||||
Exercise of stock options (Note 11) | | | — | — | ( | — | — | | |||||||||||||||
Share purchase under Employee Share Purchase Plan (Note 11) |
| |
| |
| — | — |
| ( |
| — |
| — |
| | ||||||||
Share-based compensation and expenses settled with equity (Note 11) | — | — | — | — | | — | — | | |||||||||||||||
Loss for the period |
| — |
| — |
| — | — |
| — |
| — |
| ( |
| ( | ||||||||
June 30, 2024 |
| |
| $ | |
| $ | — | $ | — |
| |
| $ | ( |
| $ | ( |
| $ | ( |
Accumulated | |||||||||||||||||||||||
Additional | Other | ||||||||||||||||||||||
Common Shares | Preferred | Special | Paid in | Comprehensive | |||||||||||||||||||
Six months ended June 30, 2023 |
| Shares |
| Amount |
| Shares |
| Shares |
| Capital |
| Loss |
| Deficit |
| Total | |||||||
January 1, 2023 | | $ | | $ | — | $ | — | $ | | $ | ( | $ | ( | $ | | ||||||||
Conversion of restricted share units, net of shares withheld for taxes |
| |
| | — |
| — |
| ( |
| — |
| — |
| | ||||||||
Share purchase under Employee Share Purchase Plan |
| |
| | — |
| — |
| ( |
| — |
| — |
| | ||||||||
Shares issued to Allseas |
| |
| | — |
| — |
| — |
| — |
| — |
| | ||||||||
Share-based compensation and expenses settled with equity | — | — | — | — | | — | — | | |||||||||||||||
Loss for the period |
| — |
| — | — |
| — |
| — |
| — |
| ( |
| ( | ||||||||
June 30, 2023 |
| | $ | | $ | — | $ | — | | $ | ( | $ | ( | $ | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
TMC the metals company Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands of US Dollars)
(Unaudited)
Six months ended | Six months ended | |||||||
|
| June 30, |
| June 30, | ||||
| Note |
| 2024 |
| 2023 | |||
Cash provided by (used in) |
|
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|
|
| |||
Operating activities |
| |||||||
Loss for the period |
| $ | ( |
| $ | ( | ||
Items not affecting cash: |
|
| ||||||
Amortization | | | ||||||
Lease Expense | 6 | | — | |||||
Accrued interest on credit facilities | 6,14 | | — | |||||
Share-based compensation and expenses settled with equity | 11 | | | |||||
Equity-accounted investment loss |
| 7 | |
| | |||
Change in fair value of warrants liability |
| 10 | ( |
| | |||
Unrealized foreign exchange | ( | ( | ||||||
Changes in working capital: |
|
| ||||||
Receivables and prepayments |
| |
| | ||||
Accounts payable and accrued liabilities |
| |
| ( | ||||
Net cash used in operating activities | ( |
| ( | |||||
Investing activities |
|
| ||||||
Acquisition of equipment and software | ( | ( | ||||||
Net cash used in investing activities | ( |
| ( | |||||
Financing activities |
|
| ||||||
Proceeds from registered direct offering | 9 | | — | |||||
Expenses paid for registered direct offering | 9 | ( | — | |||||
Proceeds from Shares issued from ATM | 12 | | — | |||||
Proceeds from Drawdown of Credit Facilities | 14 | | — | |||||
Proceeds from Drawdown of Allseas Debt Agreement | 6 | | — | |||||
Interest paid on amounts drawn from credit facilities | 14 | ( | — | |||||
Proceeds from Low Carbon Royalties Investment | — | | ||||||
Proceeds from employee stock plans | 11 | | | |||||
Proceeds from exercise of stock options | 11 | | — | |||||
Proceeds from issuance of shares | — | | ||||||
Net cash provided by financing activities | | |||||||
Decrease in cash |
| $ | ( |
| $ | ( | ||
Impact of exchange rate changes on cash |
| |
| | ||||
Cash - beginning of period |
| |
| | ||||
Cash - end of period |
| |
| |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
9
TMC the metals company Inc.
Notes to Condensed Consolidated Financial Statements
(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)
(Unaudited)
1.Nature of Operations
TMC the metals company Inc. (“TMC” or the “Company”) was incorporated as a Cayman Islands exempted company limited by shares on December 18, 2019 and continued as a corporation under the laws of the province of British Columbia, Canada on September 9, 2021. The Company’s corporate office, registered address and records office is located at 10th floor, 595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5. The Company’s common shares and warrants to purchase common shares are listed for trading on the Nasdaq Global Select Market (“Nasdaq”) under tickers “TMC” and “TMCWW”, respectively.
The Company is a deep-sea minerals exploration company focused on the collection and processing of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone in the Pacific Ocean (“CCZ”), located approximately 1,300 nautical miles southwest of San Diego, California. These nodules contain high grades of four metals (nickel, copper, cobalt, manganese) which can be used as (i) feedstock for battery cathode precursors (nickel, cobalt and manganese sulfates, or intermediate nickel-copper-cobalt matte) for electric vehicles (“EV”) and renewable energy storage markets, (ii) copper cathode for EV wiring, energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel production.
Exploration and exploitation of seabed minerals in international waters is regulated by the International Seabed Authority (“ISA”), an intergovernmental organization established pursuant to the 1994 Agreement Relating to the Implementation of the United Nations Convention on the Law of the Sea. The ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state. The Company’s wholly owned subsidiary, Nauru Ocean Resources Inc. (“NORI”), was granted an exploration contract (the “NORI Exploration Contract”) by the ISA in July 2011 under the sponsorship of the Republic of Nauru (“Nauru”) giving NORI exclusive rights to explore for polymetallic nodules in an area covering
The realization of the Company’s assets and attainment of profitable operations is dependent upon many factors including, among other things: financing being arranged by the Company to continue operations, development of a nodule collection system for the recovery of polymetallic nodules from the seafloor as well as development of processing technology for the treatment of polymetallic nodules at commercial scale, the establishment of mineable reserves, the commercial and technical feasibility of seafloor polymetallic nodule collection and processing, metal prices, and regulatory approvals and environmental permitting for commercial operations. The outcome of these matters cannot presently be determined because they are contingent on future events and may not be fully under the Company’s control.
2.Basis of Presentation
These unaudited condensed consolidated interim financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statements. Accordingly, certain information and footnote disclosures required by U.S. GAAP have been condensed or omitted in these unaudited condensed consolidated interim financial statements pursuant to such rules and regulation. In management’s opinion, these unaudited condensed consolidated interim financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position, operating results for the periods presented, comprehensive loss, shareholder’s equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2024 or for any other period. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2023. The Company has applied the same accounting policies as in the prior year, except as disclosed below.
10
TMC the metals company Inc.
Notes to Condensed Consolidated Financial Statements
(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)
(Unaudited)
Comparative figures reported in the Condensed Consolidated Balance Sheet, for software development costs and equipment, and figures reported in the Condensed Consolidated Statements of Cash Flows, for expenses settled with equity and changes in working capital have been reclassified to conform to the current period’s presentation.
3.Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the notes thereto. Significant estimates and assumptions reflected in these condensed consolidated interim financial statements include, but are not limited to, the evaluation of going concern, the valuation of share-based payments, including valuation of incentive stock options (Note 11), valuation of Class A warrants (Note 10) as well as the valuation of private warrants (Note 10), the valuation of the Royalty liability (Note 7) and the valuation of leases (Note 6). Actual results could differ materially from those estimates.
4.Fair Value of Financial Instruments
Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.
The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. In accordance with US GAAP, the Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:
● | Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. |
● | Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. |
● | Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
There were
As at June 30, 2024, and December 31, 2023, the carrying values of cash, receivables, and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The financial instruments also include royalty liability, and warrants issued by the Company. These warrants and royalty liability are valued at fair value, which is disclosed in Note 10.
5.Recent Accounting Pronouncements Issued and Adopted
There were no recent accounting pronouncements issued and adopted by the Company during the period.
11
TMC the metals company Inc.
Notes to Condensed Consolidated Financial Statements
(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)
(Unaudited)
6.Strategic Alliance with Allseas and Affiliates
Development of Project Zero Offshore Nodule Collection System
On March 16, 2022, NORI and Allseas entered into a non-binding term sheet for the development and operation of a commercial nodule collection system. For the three and six months ended June 30, 2024, Allseas provided the Company with engineering, project management and vessel use services consisting of lay-up and transit costs totaling $
Exclusive Vessel Use Agreement with Allseas
On August 1, 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas pursuant to which Allseas will give exclusive use of the vessel (“Hidden Gem”) to the Company in support of the development of the Project Zero Offshore Nodule Collection System.
The Company determined that the Exclusive Vessel Use Agreement with Allseas is a lease agreement, classified as an operating lease.
For the three and six months ended June 30, 2024, the Company has recognized $
As at June 30, 2024, the net amount of the right-of-use asset is as follows:
| Right-of-use Asset | ||
Balance as at December 31, 2023 | $ | | |
Lease expense during the period |
| ( | |
Balance as at June 30, 2024 | $ | |
Credit Facility and Loan Agreement with Company Related to Allseas
On March 22, 2023, the Company entered into an Unsecured Credit Facility Agreement, which was amended on July 31, 2023 (“Credit Facility”), with Argentum Cedit Virtuti GCV (the “Lender”), the parent of Allseas Investments S.A. and an affiliate of Allseas, pursuant to which, the Company may borrow from the Lender up to $
During the three months and six months ended June 30, 2024, the Company has not drawn any amount from the Credit Facility and has incurred $
12
TMC the metals company Inc.
Notes to Condensed Consolidated Financial Statements
(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)
(Unaudited)
On May 27, 2024, the Company entered into a short-term loan agreement with the Lender. In accordance with the agreement, the Lender provided a short-term loan to the Company amounting to $
As at June 30, 2024, the total amount payable to Allseas and its affiliates was $
As at June 30, 2024, Allseas and its affiliates owned
7.Investment in Low Carbon Royalties
On February 21, 2023 (the “Closing Date”), the Company and its wholly-owned subsidiary, NORI, entered into an investment agreement (the “Royalty Agreement”) with Low Carbon Royalties. In connection with the Royalty Agreement, NORI contributed a
Based on the fair value of the NORI Royalty granted and the cash received, the Company recorded $
| Investment | ||
Fair value of NORI Royalty | $ | | |
Cash received | ( | ||
Cost of Investment on Closing Date | | ||
Equity-accounted investment loss for the year ended 2023 |
| ( | |
Investment as at December 31, 2023 | $ | | |
Equity-accounted investment loss for the period ended June 30, 2024 | ( | ||
Investment as at June 30, 2024 | $ | |
The NORI Royalty was recorded as a royalty liability in the consolidated Balance Sheet in accordance with ASC 470, Debt (“ASC 470”). The Company elected to account for the royalty liability at fair value through profit and loss. The fair value was determined using a market approach which entails examining recent royalty transactions prior to the reporting date, focusing on those transactions that involve similar metals as contained in NORI’s polymetallic nodules. The Company compares the specific characteristics of these transactions to estimate the fair value. The fair value of the royalty liability as at June 30, 2024, remained unchanged at $
Financial results of Low Carbon Royalties as at and for the three and six months ended June 30, 2024 and 2023 are summarized below:
| As at June 30, |
| As at June 30, | ||
| 2024 |
| 2023 | ||
Current Assets | $ | |
| | |
Non-Current Assets |