NEW YORK, Nov. 15, 2024 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons or entities who purchased or otherwise acquired TMC the metals company Inc. (“TMC” or the “Company”) (NASDAQ: TMC) securities between May 12, 2023 and March 25, 2024, inclusive (the “Class Period”). The lawsuit seeks to recover damages for the Company’s investors under the federal securities laws.
TMC is a deep-sea minerals exploration company focused on the collection, processing, and refining of polymetallic nodules.
In February 2023, TMC and its wholly owned subsidiary, Nauru Ocean Resources Inc. (“NORI”), entered into a strategic partnership with Low Carbon Royalties Inc. (“LCR”) (the “LCR Partnership”). In a press release discussing the terms of the LCR Partnership, TMC stated that “[t]he Company agreed with LCR to a purchase and sale agreement whereby LCR acquired a 2.0% gross overriding royalty on [TMC’s] NORI project area in the Clarion Clipperton Zone of the Pacific Ocean” and, “[i]n consideration . . ., the Company received $5,000,000 cash and an initial 35.0% equity interest in LCR.”
The Complaint alleges that Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) TMC maintained deficient internal controls over financial reporting; (ii) as a result, the Company inaccurately classified the sale of future revenue attributable to the LCR Partnership as deferred income rather than debt; (iii) the foregoing misclassification, when it became known, would require TMC to restate one or more of its previously issued financial statements; and (iv) as a result, Defendants’ public statements were materially false and/or misleading at all relevant times.
On March 25, 2024, TMC disclosed in a filing with the United States Securities and Exchange Commission that the Company’s financial statements for the first three quarters of 2023 “should be restated and, accordingly, should no longer be relied upon”, citing the “re-evaluat[ion of] whether the offsetting entry to the proceeds it received from LCR should be classified as debt or deferred income.” Further, TMC explained that “[a]s the transaction with LCR was considered an equity investment rather than a sale transaction, the sale of future revenue will be reclassified as Royalty liability” per appropriate accounting standards.
On this news, TMC’s stock price fell $0.205 per share, or 13.23%, to close at $1.345 per share on March 26, 2024.
Investors who purchased or otherwise acquired shares of TMC should contact the Firm prior to the January 7, 2025 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
