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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>The WTR Sustainable Index was up by 0.5% W/W versus the S&amp;P 500 Index (up 1.0%), the Russell 2000 Index (up 0.5%), and the Nasdaq Index (up 0.9%).</li><li>Energy Technology (12.4% of the index) was down by 1.8%, while Industrial Climate and Ag Technology (49.4% of the index) was up 0.5%, ClimateTech Mining was down 1.9%, andAdvanced Transportation Solutions was up 1.3%.</li><li>Top 10 Performers: CLIR, NVLH, NXH, EFOI, IRBT, TMC, GCEI, PEV, PNPN, FTCI</li></ul>

The WTR Sustainable Index was up by 0.5% W/W versus the S&amp;P 500 Index (up 1.0%), the Russell 2000 Index (up 0.5%), and the Nasdaq Index (up 0.9%).Energy Technology (12.4% of the index) was down by 1.8%, while Industrial Climate and Ag Technology (49.4% of the index) was up 0.5%, ClimateTech Mining was down 1.9%, andAdvanced Transportation Solutions was up 1.3%.Top 10 Performers: CLIR, NVLH, NXH, EFOI, IRBT, TMC, GCEI, PEV, PNPN, FTCI

Weekly Sustainable Investing Surveyor - Week Ended November 24, 2023

Equity Bottom-Up

<ul><li>3Q23 results showcase management’s focus. TMC reported 3Q23 results that included solid cost control as G&amp;A expenses declined to $4.6 million and operating loss was reduced to $12.5 million for the quarter versus the $28.6 million loss in the year-ago period.</li><li>Liquidity to cover operating and capital costs. With $22.5 million of cash on hand as of September 2023 and with the infusion of the $25 million in equity raise (inclusive of $9 million to be received by the end of 2023), in addition to the $25 million undrawn unsecured credit facility from Allseas, TMC has the liquidity and capital tools it needs to submit the provisional application to the ISA in 2H24.</li><li>The company continues to work on securing more strategic funding to ensure sufficient liquidity to get into production once the exploitation application has been submitted.</li></ul>

3Q23 results showcase management’s focus. TMC reported 3Q23 results that included solid cost control as G&amp;A expenses declined to $4.6 million and operating loss was reduced to $12.5 million for the quarter versus the $28.6 million loss in the year-ago period.Liquidity to cover operating and capital costs. With $22.5 million of cash on hand as of September 2023 and with the infusion of the $25 million in equity raise (inclusive of $9 million to be received by the end of 2023), in addition to the $25 million undrawn unsecured credit facility from Allseas, TMC has the liquidity and capital tools it needs to submit the provisional application to the ISA in 2H24.The company continues to work on securing more strategic funding to ensure sufficient liquidity to get into production once the exploitation application has been submitted.

TMC the Metals Company, Inc. -ISA Discussions on Track and PAMCO MoU Adds a Strong Partner

<ul><li>The WTR Sustainable Index was up by 5.8% W/W versus the S&amp;P 500 Index (up 5.9%), the Russell 2000 Index (up 7.6%), and the Nasdaq Index (up 6.5%).</li><li>Energy Technology (13.5% of the index) was up by 10.5%, while Industrial Climate and Ag Technology (48.7% of the index) was up 5.5%, ClimateTech Mining was down 1.3%, and Advanced Transportation Solutions was up 5.2%.</li><li>Top 10 Performers<strong>:</strong><span style="font-size: var(--content-font-size);"> LILM, HLGN, LICY, PEV, ARVL, FHYD, GMGMF, HASI, TMC, GCEI</span></li></ul>

The WTR Sustainable Index was up by 5.8% W/W versus the S&amp;P 500 Index (up 5.9%), the Russell 2000 Index (up 7.6%), and the Nasdaq Index (up 6.5%).Energy Technology (13.5% of the index) was up by 10.5%, while Industrial Climate and Ag Technology (48.7% of the index) was up 5.5%, ClimateTech Mining was down 1.3%, and Advanced Transportation Solutions was up 5.2%.Top 10 Performers: LILM, HLGN, LICY, PEV, ARVL, FHYD, GMGMF, HASI, TMC, GCEI

Weekly Sustainable Investing Surveyor - Week Ended November 3, 2023

<ul><li><p>Putting science first. TMC’s recent announcement of a deepening of its relationship with Norway’s leading software company, Kongsberg Digital, to further develop its Digital Twin software serves as another indication of the company’s efforts to move beyond simplistic and often alarmist computer models based on little to no actual data and instead to develop robust monitoring and analytical capabilities that can help regulators ensure mining code compliance, while helping TMC optimize its production process, increase operating efficiencies, and further reduce the environmental impact of seabed mining.</p></li><li><p>Putting multiple tools to work. As with many of TMC’s key system components, the prototype Digital Twin was deployed and put to work during the company’s successful large-scale pilot collection test conducted in 4Q22 that not only collected and transported to the surface more than 300 wet tons of polymetallic nodules but generated more than 200 terabytes of data collected from a suite of marine sensors throughout the water column.</p></li><li><p>The renewed and expanded collaboration between TMC and Kongsberg will allow for integration of Digital Twin into the broader Adaptive Management System that will use AI and hybrid machine learning to analyze data from the immense amount of live operational sensor telemetry and provide real-time 3D visualization of TMC’s deep-sea operating environment to mining regulators and other stakeholders that can help monitor and assess the impact of seabed mining from operational and environmental perspectives.</p></li></ul>

Putting science first. TMC’s recent announcement of a deepening of its relationship with Norway’s leading software company, Kongsberg Digital, to further develop its Digital Twin software serves as another indication of the company’s efforts to move beyond simplistic and often alarmist computer models based on little to no actual data and instead to develop robust monitoring and analytical capabilities that can help regulators ensure mining code compliance, while helping TMC optimize its production process, increase operating efficiencies, and further reduce the environmental impact of seabed mining.Putting multiple tools to work. As with many of TMC’s key system components, the prototype Digital Twin was deployed and put to work during the company’s successful large-scale pilot collection test conducted in 4Q22 that not only collected and transported to the surface more than 300 wet tons of polymetallic nodules but generated more than 200 terabytes of data collected from a suite of marine sensors throughout the water column.The renewed and expanded collaboration between TMC and Kongsberg will allow for integration of Digital Twin into the broader Adaptive Management System that will use AI and hybrid machine learning to analyze data from the immense amount of live operational sensor telemetry and provide real-time 3D visualization of TMC’s deep-sea operating environment to mining regulators and other stakeholders that can help monitor and assess the impact of seabed mining from operational and environmental perspectives.

TMC the Metals Company, Inc. - Scientific Data > Preconceptions

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Keeping a tight rein on expenses. TMC reported 2Q23 results that included a significant reduction in SG&amp;A expenses from $8.1 million in year-ago period to $5.1 million, demonstrating the company’s ability to operate and move the NORI project forward at a significantly lower cash burn rate, suggesting that liquidity may be a diminishing investor concern.</p></li><li><p>Time to production extended; certainty increased.</p></li><li><p>While some observers may have been disappointed with the ISA’s failure to complete the undersea mining code creation process in July 2023, as originally envisioned, the July session featured the ISA’s renewed commitment to complete the code over the next three sessions (and inter-session discussions) that allowed TMC to announce a definitive timeline for NORI-D exploitation applications submission (3Q24) and beginning of commercial nodule collection envisioned under Project Zero (4Q25), establishing a timetable for getting to revenue and profitability.</p></li></ul></div></div></div></div>

Keeping a tight rein on expenses. TMC reported 2Q23 results that included a significant reduction in SG&amp;A expenses from $8.1 million in year-ago period to $5.1 million, demonstrating the company’s ability to operate and move the NORI project forward at a significantly lower cash burn rate, suggesting that liquidity may be a diminishing investor concern.Time to production extended; certainty increased.While some observers may have been disappointed with the ISA’s failure to complete the undersea mining code creation process in July 2023, as originally envisioned, the July session featured the ISA’s renewed commitment to complete the code over the next three sessions (and inter-session discussions) that allowed TMC to announce a definitive timeline for NORI-D exploitation applications submission (3Q24) and beginning of commercial nodule collection envisioned under Project Zero (4Q25), establishing a timetable for getting to revenue and profitability.

TMC the Metals Company, Inc. -The Resource Is the Resource

Canada

TMC the metals company Inc. operates as an electric vehicles battery metal company. The Company produces metals from polymetallic rocks to store clean energy and power electric vehicles. TMC the metals serves customers worldwide.

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TMC the metals co (TMC US)

Weekly Sustainable Investing Surveyor - Week Ended November 24, 2023

The WTR Sustainable Index was up by 0.5% W/W versus the S&P 500 Index (up 1.0%), the Russell 2000 Index (up 0.5%), and the Nasdaq Index (up 0.9%).

Water Tower Research

TMC the Metals Company, Inc. -ISA Discussions on Track and PAMCO MoU Adds a Strong Partner

The company continues to work on securing more strategic funding to ensure sufficient liquidity to get into production once the exploitation...

Water Tower Research

Weekly Sustainable Investing Surveyor - Week Ended November 3, 2023

The WTR Sustainable Index was up by 5.8% W/W versus the S&P 500 Index (up 5.9%), the Russell 2000 Index (up 7.6%), and the Nasdaq Index (up 6.5%).

Water Tower Research

TMC the Metals Company, Inc. - Scientific Data > Preconceptions

TMC’s recent announcement of a deepening of its relationship with Norway’s leading software company, Kongsberg Digital, to further develop its...

Water Tower Research

TMC the Metals Company, Inc. -The Resource Is the Resource

TMC reported 2Q23 results that included a significant reduction in SG&A expenses from $8.1 million in year-ago period to $5.1 million

Water Tower Research

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