TMC the metals Co Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TMC THE METALS COMPANY INC. ​ ​ ​ ​ ​ Page Index to Financial Statements and Financial Statement Schedules Number ​ ​ ​ Financial Statements: ​ ​ ​ ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID: 1263 ) ​ 123 Consolidated Balance Sheets as at December 31, 2023 and 2022 ​ 124 Consolidated Statements of Loss and Comprehensive Loss for the Years Ended December 31, 2023 and 2022 ​ 125 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2023 and 2022 ​ 126 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 ​ 127 Notes to Consolidated Financial Statements ​ 128 ​ ​ ​ 122 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of TMC the metals company Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of TMC the metals company Inc. (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the two years then in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP ​ We have served as the Company’s auditor since 2012. Vancouver, Canada March 25, 2024 ​ ​ 123 Table of Contents TMC the metals company Inc. Consolidated Balance Sheets (in thousands of US Dollars, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at ​ As at ​ ​ ​ ​ December 31, December 31, ASSETS ​ Note ​ 2023 ​ 2022 Current ​ ​ Cash 2 $ 6,842 $ 46,876 Receivables and prepayments 2,6 ​ 1,978 ​ 2,726 ​ ​ ​ ​ 8,820 ​ 49,602 Non-current ​ ​ Exploration contracts 10 ​ 43,150 ​ 43,150 Equipment 7 ​ 2,776 ​ 2,025 Right-of-use asset ​ 8 ​ 5,721 ​ — Investment ​ 9 ​ ​ 8,429 ​ ​ — ​ ​ ​ ​ ​ 60,076 ​ ​ 45,175 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ASSETS $ 68,896 $ 94,777 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ Current ​ ​ Accounts payable and accrued liabilities ​ 31,334 ​ 41,614 ​ ​ ​ ​ 31,334 ​ 41,614 Non-current ​ ​ Deferred tax liability ​ ​ ​ ​ 10,675 ​ ​ 10,675 Royalty liability 9 ​ 14,000 ​ — Warrants liability 13 ​ 1,969 ​ 983 TOTAL LIABILITIES $ 57,978 $ 53,272 ​ ​ ​ ​ ​ ​ ​ ​ ​ EQUITY ​ ​ Common shares (unlimited shares, no par value – issued: 306,558,710 (December 31, 2022 – 266,812,131 )) ​ ​ 438,239 ​ 332,882 Special Shares ​ ​ — ​ — Additional paid in capital ​ 122,797 ​ 184,960 Accumulated other comprehensive loss ​ ( 1,216 ) ​ ( 1,216 ) Deficit ​ ( 548,902 ) ​ ( 475,121 ) TOTAL EQUITY ​ 10,918 ​ 41,505 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES AND EQUITY $ 68,896 $ 94,777 ​ Nature of Operations (Note 1) Commitments and Contingent Liabilities (Note 19) Subsequent Events (Note 23) ​ The accompanying notes are an integral part of these consolidated financial statements. 124 Table of Contents TMC the metals company Inc. Consolidated Statements of Loss and Comprehensive Loss (in thousands of US Dollars, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended For the year ended ​ ​ ​ ​ December 31, ​ December 31, ​ ​ Note ​ 2023 ​ 2022 Operating expenses ​ ​ Exploration and evaluation expenses 10 $ 49,849 $ 144,599 General and administrative expenses 11 ​ 22,540 ​ 29,518 Operating loss ​ ​ 72,389 ​ 174,117 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other items ​ ​ ​ ​ ​ Equity-accounted investment loss 9 ​ 571 ​ — Change in fair value of warrants liability 13 ​ 986 ​ ( 2,143 ) Foreign exchange loss ​ ​ 310 ​ 24 Interest income ​ ​ ​ ​ ( 1,297 ) ​ ​ ( 1,111 ) Fees and interest on credit facility ​ 8 ​ ​ 781 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss and comprehensive loss for the year, before tax ​ ​ ​ $ 73,740 ​ $ 170,887 ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax expense ​ 21 ​ ​ 41 ​ ​ 77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss and comprehensive loss for the year, after tax $ 73,781 $ 170,964 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share - basic and diluted 16 $ 0.26 ​ $ 0.71 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of Common Shares outstanding – basic and diluted ​ ​ 288,643,700 ​ ​ 239,867,019 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 125 Table of Contents TMC the metals company Inc. Consolidated Statements of Changes in Equity (in thousands of US Dollars, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares Special Additional Accumulated Other ​ ​ ​ ​ For the year ended December 31, 2023 Shares Amount Shares Paid in Capital Comprehensive Loss Deficit Total December 31, 2022 266,812,131 ​ $ 332,882 $ — $ 184,960 $ ( 1,216 ) $ ( 475,121 ) $ 41,505 Shares issued to Allseas (Note 8) ​ 15,000,000 ​ ​ 15,910 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 15,910 Exercise of warrant by Allseas (Note 8 and 13) 11,578,620 ​ ​ 70,016 ​ — ​ ( 69,900 ) ​ — ​ — ​ 116 Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 12) 7,961,540 ​ ​ 11,420 ​ — ​ 3,179 ​ — ​ — ​ 14,599 Conversion of restricted share units, net of shares withheld for taxes (Note 15) 4,912,747 ​ ​ 7,720 ​ — ​ ( 7,690 ) ​ — ​ — ​ 30 Shares purchased under Employee Share Purchase Plan (Note 15) 173,672 ​ ​ 147 ​ — ​ ( 45 ) ​ — ​ — ​ 102 Exercise of stock options (Note 15) ​ 120,000 ​ ​ 144 ​ ​ — ​ ​ ( 67 ) ​ ​ — ​ ​ — ​ ​ 77 Share-based compensation and Expenses settled with equity (Note 15) ​ — ​ ​ — ​ ​ — ​ ​ 12,360 ​ ​ — ​ ​ — ​ ​ 12,360 Loss for the year — ​ ​ — ​ — ​ — ​ — ​ ( 73,781 ) ​ ( 73,781 ) December 31, 2023 306,558,710 ​ $ 438,239 $ — $ 122,797 $ ( 1,216 ) $ ( 548,902 ) $ 10,918 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares Special Additional Accumulated Other ​ ​ ​ ​ For the year ended December 31, 2022 Shares Amount Shares Paid in Capital Comprehensive Loss Deficit Total December 31, 2021 225,432,493 ​ $ 296,051 $ — $ 102,073 $ ( 1,216 ) $ ( 304,157 ) $ 92,751 Vesting of Allseas Warrant — ​ ​ — ​ — ​ 69,900 ​ — ​ — ​ 69,900 Issuance of shares under PIPE financing - net of expenses (Note 12) ​ 38,266,180 ​ ​ 29,621 ​ — ​ — ​ — ​ — ​ 29,621 Conversion of restricted share units, net of shares withheld for taxes 2,877,068 ​ ​ 6,875 ​ — ​ ( 6,945 ) ​ — ​ — ​ ( 70 ) Exercise of stock options ​ 118,461 ​ ​ 142 ​ ​ — ​ ​ ( 66 ) ​ ​ — ​ ​ — ​ ​ 76 Shares purchased under Employee Share Purchase Plan 117,929 ​ ​ 193 ​ ​ — ​ ​ ( 79 ) ​ ​ — ​ ​ — ​ ​ 114 Share-based compensation and Expenses settled with equity ​ — ​ ​ — ​ ​ — ​ ​ 20,077 ​ ​ — ​ ​ — ​ ​ 20,077 Loss for the year — ​ ​ — ​ — ​ — ​ — ​ ( 170,964 ) ​ ( 170,964 ) December 31, 2022 266,812,131 ​ $ 332,882 $ — $ 184,960 $ ( 1,216 ) $ ( 475,121 ) $ 41,505 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 126 Table of Contents TMC the metals company Inc. Consolidated Statements of Cash Flows (in thousands of US Dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended For the year ended ​ ​ ​ ​ December 31, ​ December 31, ​ ​ Note ​ 2023 ​ 2022 Cash provided by (used in) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ ​ Loss for the year $ ( 73,781 ) $ ( 170,964 ) Items not affecting cash: ​ ​ ​ ​ Amortization ​ 360 ​ 418 Lease expense ​ 8 ​ ​ 795 ​ ​ — Share-based compensation and Expenses settled with equity 15 ​ 12,360 ​ 20,077 Equity-accounted investment loss 9 ​ 571 ​ — Change in fair value of warrants liability 13 ​ 986 ​ ( 2,143 ) Vesting of Allseas Warrant ​ 8 ​ ​ — ​ ​ 69,900 Unrealized foreign exchange movement ​ ( 51 ) ​ ( 53 ) Changes in working capital: ​ ​ ​ ​ Receivables and prepayments 2 ​ 748 ​ 960 Accounts payable and accrued liabilities ​ ( 1,561 ) ​ 15,202 Net cash used in operating activities ​ ( 59,573 ) ​ ( 66,603 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Investing activities ​ ​ Acquisition of equipment 7 ​ ( 578 ) ​ ( 1,169 ) Net cash used in investing activities ​ ( 578 ) ​ ( 1,169 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing activities ​ ​ Proceeds from Registered Direct Offering ​ 12 ​ ​ 15,923 ​ ​ — Expenses paid for Registered Direct Offering ​ 12 ​ ​ ( 1,182 ) ​ ​ — Proceeds from PIPE financing 12 ​ — ​ 30,399 Expenses paid for PIPE financing 12 ​ — ​ ( 797 ) Proceeds from employee share purchase plan 15 ​ 102 ​ 114 Proceeds from exercise of stock options ​ 15 ​ ​ 77 ​ ​ 76 Proceeds from exercise of warrants by Allseas ​ 8 & 13 ​ ​ 116 ​ ​ — Proceeds from issuance of shares ​ ​ ​ ​ 30 ​ ​ — Proceeds from Low Carbon Royalties investment ​ 9 ​ ​ 5,000 ​ ​ — Taxes withheld and paid on share-based compensation ​ ​ — ​ ( 70 ) Net cash provided by financing activities ​ 20,066 ​ 29,722 ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease in cash $ ( 40,085 ) $ ( 38,050 ) Impact of exchange rate changes on cash ​ 51 ​ 53 Cash - beginning of year ​ 46,876 ​ 84,873 Cash - end of year ​ 6,842 $ 46,876 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 127 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 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. On September 9, 2021, the Company completed its business combination (the “Business Combination”) with DeepGreen Metals Inc. (“DeepGreen”). 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 74,830 square kilometers in the CCZ (“NORI Area”). On March 31, 2020, the Company acquired Tonga Offshore Mining Limited (“TOML”), which was granted an exploration contract (the “TOML Exploration Contract”) by the ISA in January 2012 under the sponsorship of the Kingdom of Tonga (“Tonga”) and has exclusive rights to explore for polymetallic nodules covering an area of 74,713 square kilometers in the CCZ (“TOML Area”). Marawa Research and Exploration Limited (“Marawa”), an entity owned and sponsored by the Republic of Kiribati (“Kiribati”), was granted rights by the ISA to polymetallic nodules exploration in an area of 74,990 square kilometers in the CCZ (“Marawa Area”). In 2013, the Company through its subsidiary DeepGreen Engineering Pte. Ltd. (“DGE”) entered into an option agreement (the “Marawa Option Agreement”) with Marawa which granted DGE exclusive rights to manage and carry out all exploration and exploitation in the Marawa Area in return for a royalty payable to Marawa. The Company is working with its strategic partner and investor, Allseas Group S.A. (“Allseas”), to deliver a system to collect, lift and transport nodules from the seafloor to shore that meets the requirements of an early commercial production system (Note 8). 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 Statement of Compliance These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) and include the accounts of TMC and its wholly-owned subsidiaries. 128 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Comparative figures reported in the Consolidated Balance Sheet, for cash, receivables and prepayments, and figures reported in the Consolidated Statements of Cash Flows, for Expenses settled with equity and changes in working capital have been reclassified to conform to the current year’s presentation. Basis of Measurement These consolidated financial statements have been prepared under the historical cost convention, except for warrants liability that has been measured at fair value and are presented in United States (“US”) dollars. Consolidation These consolidated financial statements include the financial statements of the Company and its subsidiaries. The principal subsidiaries of the Company, their activities, and their geographic locations as at December 31, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proportion of ​ ​ ​ ​ ​ ​ Interest Held Subsidiary ​ Principal Activity ​ Location ​ by the Company DeepGreen Engineering Pte. Ltd. Mineral exploration Singapore 100 % DeepGreen Metals ULC Mineral exploration Canada 100 % DeepGreen Resources, LLC Holding Company USA 100 % DeepGreen TOML Holding 1 Ltd. Holding Company British Virgin Islands 100 % DeepGreen TOML Holding 2 Ltd. Holding Company British Virgin Islands 100 % DeepGreen TOML Singapore Pte. Ltd. Mineral exploration Singapore 100 % Koloa Moana Resources Ltd. Holding Company Canada 100 % Nauru Education and Training Foundation Inc. (“NEAT”) Holding Company Republic of Nauru 100 % Nauru Health and Environment Foundation Inc. (“NHEF”) Holding Company Republic of Nauru 100 % Nauru Ocean Resources Inc. Mineral exploration Republic of Nauru 100 % Offshore Minerals Pty. Ltd. Mineral exploration Australia 100 % The Metals Company Australia Pty Ltd Holding Company Australia 100 % TMC The Metals Company UK Limited Holding Company United Kingdom 100 % Tonga Offshore Mining Ltd. Mineral exploration Kingdom of Tonga 100 % ​ All intra-group balances have been eliminated on consolidation. 3. Significant Accounting Policies i. Foreign Currencies The functional currency is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and all its subsidiaries is the U.S. Dollar, except for NEAT and NHEF, whose functional currency is the Australian Dollar. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated into the functional currency at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in currencies other than the U.S. Dollar are translated at rates prevailing at the date when the fair value was determined. All gains and losses on translation of these foreign currency transactions are included in the statements of loss and comprehensive loss. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated. 129 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ For consolidation purposes, the assets and liabilities of entities with functional currencies other than the US Dollar are translated at the period end rates of exchange, and the results of their operations are translated at average rates of exchange for the period. The resulting changes are recognized in accumulated other comprehensive loss within equity as currency translation differences. ii. 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 consolidated 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 15), as well as the valuation of warrants liability (Note 13), and the valuation of the investment in Low Carbon Royalties Inc. (“Low Carbon Royalties”) (Note 9). Actual results could differ materially from those estimates. iii. Loss Per Share Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted loss per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on the loss per share. The dilutive effect of convertible securities is reflected in the diluted loss per share by application of the “if converted” method. The dilutive effect of outstanding options and their equivalents is reflected in the diluted loss per share by application of the treasury stock method. iv. Financial Instruments Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired, or have been transferred, and the Company has transferred substantially all risks and rewards of ownership. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled, or expires. The Company’s financial instruments consists of cash and cash equivalents, receivables, accounts payable and accrued liabilities, and deferred acquisition costs which are recorded at amortized cost as well as warrants to acquire common shares of the Company which are measured at fair value. v. 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 U.S. 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. 130 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ ● 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 no transfers between fair value measurement levels during the years ended December 31, 2023 and 2022. As at December 31, 2023 and 2022, the carrying values of cash, receivables, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The financial instruments also include warrants which are valued at fair value as disclosed in Note 13. vi. Cash and Cash Equivalents Cash include cash on hand and term deposits with a remaining term to maturity at acquisition of three months or less. As at December 31, 2023 and 2022, the Company had no cash equivalents. vii. Equipment Equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, when it is probable that future economic benefits from such assets will flow to the Company and the cost of such assets can be measured reliably. The carrying amount of an asset is derecognized when it is replaced or taken out of service. Repairs and maintenance costs are charged to the statement of loss and comprehensive loss during the period they are incurred. The major categories of equipment are amortized on a declining balance basis as follows: ​ ​ ​ ​ ​ Exploration and other equipment 30 % Office equipment 30 % ​ The Company allocates the amount initially recognized to each asset’s significant components and depreciates each component separately. Amortization methods and useful life of the assets are reviewed at each financial period end and adjusted on a prospective basis, if required. Gains and losses on disposals of equipment are determined by comparing the proceeds with the carrying amount of the asset and are included in the statement of loss and comprehensive loss. viii. Exploration Contracts The Company is in the exploration stage with respect to its investment in exploration contracts and follows the practice of capitalizing costs related to the acquisition of such exploration contracts. The cost of exploration contracts will be charged to operations using a unit-of-production method based on proven and probable reserves once commercial production commences in the future. 131 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ ix. Exploration and Evaluation Expenses While in the exploration phase, the Company expenses all costs related to exploration and development of exploration contracts. Such exploration and development costs include, but are not limited to, exploration contract management, geological, geochemical and geophysical studies, environmental studies and process development. x. Share-Based Compensation Share-based compensation is measured at the grant date based on the fair value of the award and is recognized over the requisite service period. Share-based compensation costs are charged to exploration and evaluation expenses or general and administrative expenses in the statement of loss and comprehensive loss. The Company recognizes forfeiture of any awards as they occur. The Company records share-based compensation from the issuance of stock options and restricted share units (“RSUs”) to employees with service-based conditions using the accelerated attribution method. For stock options and restricted share units issued with performance conditions (Note 15), the Company recognizes share-based compensation cost when the specific performance targets become probable of being achieved using the accelerated attribution method. When these costs relate to equity financing, they are netted against share capital as a share issuance cost. The fair value of stock option awards with only service and/or performance conditions is estimated on the grant date using a Black-Scholes option-pricing model. For stock options issued with market conditions (Note 15), the Company recognizes share-based compensation cost over the expected achievement period for the related market capitalization milestone determined on the grant date. If the related market capitalization milestone is achieved earlier than its expected achievement period, then any unamortized share-based compensation cost for that milestone is recognized at that time. The fair value of market-based stock option awards is estimated on the grant date using Monte-Carlo simulations. The Company at times grants common shares, stock options or RSUs in lieu of cash to certain vendors for their services to the Company. The Company recognizes the associated cost in the same period and manner as if the Company paid cash for the services provided. xi. Warrants Liability The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to U.S. GAAP Accounting Standard Coding (“ASC”) 480, Distinguishing Liability from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company accounts for the Public Warrants and Private Warrants (as defined below) in accordance with the guidance contained in ASC 815 (Subtopic 40), Derivative and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”), and the U.S. Securities and Exchange Commission (“SEC”) Division of Corporation Finance’s April 12, 2021 Public Statement, Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SEC Statement”), under which the 15,000,000 common share warrants issued by SOAC as part of the units offered in its initial public offering (“Public Warrants”) were determined to meet the criteria for equity classification, while the 9,500,000 private placement common share warrants issued by SOAC in a private placement simultaneously with the closing of the initial public offering (“Private Warrants”) did not meet the criteria for equity classification and were recorded as liabilities. Specifically, the terms of the Private Warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a Private Warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the Private Warrants from being classified in equity and should be classified as a liability. Accordingly, the Company classified the Private Warrants as liabilities measured at fair value and adjusts the Private Warrants to their fair value at the end of each reporting period. Fair value changes in the Private Warrants are recognized in the Company’s statement of loss and comprehensive loss. 132 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ The Company granted warrants to Allseas on March 4, 2021 to acquire 11.6 million TMC common shares at a nominal value (the “Allseas Warrant”). The Allseas Warrant vested and became exercisable upon successful completion of the PMTS in the fourth quarter of 2022, and had been accounted for as equity, since the warrants do not meet the criteria to be classified as liability as defined in ASC Topic 480, Distinguishing Liabilities from Equity. The Company issued Class A Warrants under the Registered Direct Offering (Note 12) in the third quarter of 2023. The Class A Warrants issued met the criteria for equity classification and were recorded under additional paid in capital (Note 13). xii. Income Taxes Income tax expense represents the sum of current tax expense and deferred tax expense. Current tax expense is based on taxable profit for the year and includes any adjustments to tax payable in respect of previous years. Taxable profit differs from accounting profit or loss as reported in the consolidated income statement because it excludes (i) items of income or expense that are taxable or deductible in other years and (ii) items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date. The Company’s policy is to account for income tax related interest and penalties in income tax expense in the accompanying statements of loss and comprehensive loss. Deferred tax income taxes are accounted for using the asset and liability method. Deferred income tax assets and liabilities are based on temporary differences, which are differences between the accounting basis and tax basis of assets and liabilities, non-capital loss, capital loss, and tax credits carryforwards and are measured using the enacted tax rates and laws expected to apply when these differences reverse. Deferred tax benefits, including non-capital loss, capital loss, and tax credit carryforwards are recognized to the extent that realization of such benefits is considered more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated income statement in the period that enactment occurs. When realization of deferred income tax assets does not meet the more likely than not criterion for recognition, a valuation allowance is provided. Significant Accounting Policies Adopted during the year i. Leases The Company records leases in accordance with ASC 842, Leases , and determines if an arrangement contains a lease at inception. Specifically, a contract is or contains a lease when (1) the contract contains an explicitly or implicitly identified asset and (2) we obtain substantially all of the economic benefits from the use of that underlying asset and direct how and for what purpose the asset is used during the term of the contract in exchange for consideration. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term. The discount rate used to calculate the present value of lease payments is the rate implicit in the lease. Lease liabilities due within the subsequent 12 months of the reporting date are classified as current lease liabilities and are included in accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheet. Lease liabilities payable after the subsequent 12 months of the reporting date are classified as non-current lease liabilities and are presented as non-current lease liability in the condensed consolidated balance sheet. 133 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. ROU assets are recorded as Right-of-use assets, net of any amortization on the condensed consolidated balance sheet. Operating ROU assets are amortized on a straight-line basis over the lease term, whereas Finance ROU assets are amortized on a front-loaded basis. Depending on the nature of the ROU asset, the amortization expense is either included in exploration and evaluation expenses or in general and administrative expenses. The Company subsequently measures the ROU assets for an operating lease at the amount of the remeasured lease liability (i.e. the present value of the remaining lease payments), adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized initial direct costs. The ROU assets for a finance lease are subsequently measured by amortizing them on a straight-line basis over the shorter of the lease term or useful life and also adjustment for any impairments. In the third quarter of 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas (Note 8) which was recognized as a lease agreement in accordance with accounting standards. ii. Investments The Company consolidates investments over which it has control in accordance with ASC 810, Consolidation (“ASC 810”). Where the Company does not have control over the investment, but has significant influence, the Company records the investment in accordance with ASC 323, Investments-Equity Method and Joint Ventures (“ASC 323”) whereby, after recording the initial investment, the Company recognizes its proportional share of results of operations of the affiliate in its consolidated financial statements. The value of the equity method investments is impaired if it is determined that there is an other-than-temporary decline in value. Investments over which the Company does not have control nor significant influence are recorded at cost. The Company and its wholly-owned subsidiary, NORI, entered into an investment with Low Carbon Royalties on February 21, 2023 (Note 9). 4. Significant Accounting Estimates and Judgements The preparation of financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Significant management judgments and estimates were applied to the following areas: i. Evaluation of Going Concern The Company evaluates its ability to operate as a going concern at each reporting period. This evaluation requires the Company to estimate its cash flow commitments over a forecast period of twelve months and whether it has the financial ability to pay for such commitments. Changes in these estimates and assumptions may have a material impact on this assessment. ii. Valuation of Share-Based Payments The fair market value of share-based awards granted to employees, non-employees and directors is based on the closing market price of the Company’s shares, on the date these were granted (Note 15). 134 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ This valuation approach involves the use of estimates, judgments and assumptions that are subjective, such as those regarding the probability of future events. Changes in these estimates and assumptions impact the Company’s valuation as of the valuation date and may have a material impact on the valuation of the Company’s common shares. Changes in these assumptions used to determine the fair value of incentive stock options, including the vesting timeline of granted stock options, could have a material impact on the Company’s loss and comprehensive loss. iii. Valuation of Warrants Liability The Company re-measures the fair value of the Private Warrants at the end of each reporting period (Note 13). The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model whereby the expected volatility was estimated using a binomial model based on consideration of the implied volatility from the Company’s Public Warrants adjusted to account for the call feature of the Public Warrants at prices above $ 18.00 during 20 trading days within any 30 -trading-day period. During the year the Company issued Class A warrants as a part of the Registered Direct Offering (Note 12 & Note 13). The warrants were valued using a Monte Carlo simulation by running 250,000 trials. The model assumed that the Company’s share price follows geometric Brownian motion which is a standard assumption used in Monte Carlo univariate pricing models. The valuation was calculated under a risk-neutral framework using a zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve for a term until the expiry of the Warrants. The Company’s share price was simulated up to the expiration date using a blended volatility, calculated by assigning equal weights to both implied volatility of the Company’s Public Warrants and the historical volatility of the Company’s share price. iv. Valuation of Royalty Liability The Company re-measures the fair value of its royalty liability at each reporting date. As NORI is in an advanced exploration stage and pre-production, the fair value of the royalty liability is measured by 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 of its royalty liability at the reporting date. 5. Recent Accounting Pronouncements Issued and Adopted There were no recent accounting pronouncements applicable to the Company during the year. 6. Receivables and Prepayments The amounts of outstanding receivables and prepayments at December 31, 2023 and 2022 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31 2023 December 31 2022 Taxes and other receivables $ 467 $ 117 Prepayments ​ 1,511 ​ 2,609 ​ $ 1,978 $ 2,726 ​ 135 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 7. Equipment The movements in the Company’s capital equipment are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration and ​ ​ ​ ​ Cost ​ other equipment ​ Office equipment ​ Total December 31, 2021 $ 2,800 ​ $ 21 ​ $ 2,821 Additions ​ 1,026 ​ — ​ 1,026 December 31, 2022 $ 3,826 ​ $ 21 ​ $ 3,847 Additions ​ 1,111 ​ — ​ 1,111 December 31, 2023 $ 4,937 ​ $ 21 ​ $ 4,958 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated depreciation ​ ​ ​ December 31, 2021 $ ( 1,386 ) ​ $ ( 19 ) ​ $ ( 1,405 ) Amortization for the year ​ ( 416 ) ​ ( 1 ) ​ ( 417 ) December 31, 2022 $ ( 1,802 ) ​ $ ( 20 ) ​ $ ( 1,822 ) Amortization for the year ​ ( 359 ) ​ ( 1 ) ​ ( 360 ) December 31, 2023 $ ( 2,161 ) ​ $ ( 21 ) ​ $ ( 2,182 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net book value ​ ​ ​ ​ ​ ​ As at December 31, 2022 $ 2,024 ​ $ 1 ​ $ 2,025 As at December 31, 2023 $ 2,776 ​ $ — ​ $ 2,776 ​ ​ 8. Strategic Alliance with Allseas and Affiliates Pilot Mining Test Project On March 29, 2019, the Company and Allseas entered into a Strategic Alliance Agreement (“SAA”) with the objective to develop and operate commercial nodule collection systems in the Company’s contract areas. The SAA included the intent to develop and deploy a Pilot Mining Test System (“PMTS”), the successful completion of which would support the Company’s application for an exploitation contract with the ISA. Allseas committed to a fixed price development contract and would own all intellectual property used and generated in the development of the PMTS. Under the terms of the SAA, Allseas subscribed for and ultimately received 6.7 million common shares for a total of $ 20.0 million paid in cash to the Company. On July 8, 2019, as contemplated by the SAA, the Company and Allseas entered into the Pilot Mining Test Agreement (“PMTA”) which governs the terms, design specifications, procedures, and timetable under which Allseas agreed to complete a pilot trial of the PMTS in NORI Area D. Under the PMTA, in exchange for Allseas’ development efforts, upon successful delivery of the pilot trial of the PMTS in NORI Area D by Allseas, the Company agreed to pay Allseas: ● First milestone payment: $ 10 million within 10 business days of the closing of the Business Combination and Allseas providing confirmation of placing an order for certain equipment and demonstrating certain progress on construction of the PMTS; ● Second milestone payment: $ 10 million on the later of (i) January 1, 2022, and (ii) confirmation of successful completion of the North Sea drive test; ● Third milestone payment: $ 10 million upon successful completion of the pilot trial of the PMTS in NORI Area D; and ● 11.6 million warrants which would vest and become exercisable upon successful completion of the PMTS. 136 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ On November 11, 2022, the Board approved the successful completion of the PMTS in NORI Area D and payment of the third milestone amounting to $ 10 million by issuing 10 million common shares as agreed with Allseas. Accordingly in relation to the third milestone payment, the Company has recorded an expense equal to $ 8.7 million based on the fair market value of the Company’s shares on November 11, 2022. On February 13, 2023, the Company entered into a Fifth Amendment to the Pilot Mining Test Agreement (the “PMTA”) and Third Amendment to the Strategic Alliance Agreement (together with the PMTA, the “Amendments”), which was effective as of February 8, 2023, with DGE, DeepGreen Metals ULC. and Allseas. The Amendments relate to the Company’s settlement of the third and final payment of $ 10 million due to Allseas upon successful completion of the trial of the PMTS in NORI Area D and certain other costs due to Allseas under the PMTA through the issuance of 10,850,000 common shares to Allseas, priced at $ 1.00 per share. On February 23, 2023, the Company settled the third milestone payment of $ 10 million and additional PMTS overage charges amounting to $ 0.9 million by issuing 10.85 million of its common shares to Allseas. On August 9, 2023, 11,578,620 common shares were issued to Allseas upon the exercise of the Allseas Warrant granted in March 2021, and receipt of the exercise fee of $ 115.8 thousand. The warrant vested and became exercisable on successful completion of the PMTS in November 2022 (refer Allseas Warrant, Note 13). 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. During the year ended December 31, 2023, in relation to the development of the commercial nodule collection system, Allseas provided the Company with engineering, project management and vessel use services consisting of lay-up and transit costs totaling $ 12.1 million, recorded as mining, technological and process development within exploration and evaluation expenses (Note 10). For the year ended December 31, 2022, Allseas managed and delivered the PMTS project, with services totaling $ 15.7 million, recorded as PMTS within exploration and evaluation expenses (Note 10). 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 until the system is completed or December 31, 2026, whichever is earlier. In consideration of the exclusivity term, the Company, on August 14, 2023, issued 4.15 million common shares to Allseas. Allseas can terminate the agreement if the Company ceases normal operations, assigns assets to creditors, initiates bankruptcy proceedings, or faces unresolved bankruptcy-related actions. The Company concluded that the agreement was a lease, as the Hidden Gem was considered an identified asset and the Company had the right to direct the use of the Hidden Gem for the development of the Project Zero System and obtain substantially all of the economic benefits from its use. The lease was determined to be an operating lease given that ownership of the vessel remained with Allseas, the duration of the lease is considerably shorter than the vessel’s economic life and the present value of lease payments is significantly lower than the fair value of the vessel. The Company recorded a lease liability and right-of-use asset of $ 6.5 million, which represents the fair value of 4.15 million common shares issued to Allseas on August 14, 2023, as consideration, and equal to the present value of the lease payments. As the entire lease liability was settled within 14 days of the commencement of the lease, the discount rate for calculating the present value of lease payments was determined to be insignificant. For the year ended December 31, 2023, the Company has recognized $ 0.8 million as lease expense recorded as exploration and evaluation expense. 137 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ As at December 31, 2023, the net amount of the lease liability and right-of-use asset is as follows: ​ ​ ​ ​ ​ ​ Lease Liability Balance as at August 1, 2023 ​ $ 6,515 Payments made during the year by issuing 4.15 million common shares ​ 6,515 Balance as at December 31, 2023 ​ $ — ​ ​ ​ ​ ​ ​ Right-of-use Asset Balance as on August 1, 2023 ​ $ 6,515 Lease expense during the year ​ 794 Balance as at December 31, 2023 ​ $ 5,721 ​ Credit Facility with Allseas Affiliate On March 22, 2023, the Company entered into an Unsecured Credit Facility Agreement, which was amended on July 31, 2023 (“Credit Facility”), with Argentum Credit 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 $ 25 million in the aggregate, from time to time, subject to certain conditions. All amounts drawn under the Credit Facility will bear interest based on the 6-month Secured Overnight Financing Rate, 180 -day average plus a margin of 4.0 % per annum payable in cash semi-annually (or plus 5 % if paid-in-kind at maturity, at the Company’s election) on the first business day of each of June and January. The Company will pay an underutilization fee equal to 4.0 % per annum payable semi-annually for any amounts that remain undrawn under the Credit Facility. The Company has the right to pre-pay the entire amount outstanding under the Credit Facility at any time before the Credit Facility’s maturity. The Company has the ability to settle the drawn credit facility, the interest on the drawn credit facility and underutilitzation fee in cash or in equity at discretion of the Company. On March 22, 2024, the maturity date of this Credit Facility was extended to August 31, 2025. The Credit Facility also contains customary events of default. During the year ended December 31, 2023, the Company had not drawn any amount from the Credit Facility and had incurred $ 0.8 million as underutilization fees, which would be payable only in the event the Credit Facility is not drawn down upon at the time such fees are payable. As at December 31, 2023, the amount payable to Allseas and its affiliates was $ 13.8 million (December 31, 2022: $ 10.2 million). Other Activity As a part of the Registered Direct Offering in August 2023 (Note 12), Allseas purchased 3,500,000 common shares and accompanying Class A Warrants to purchase 1,750,000 Common Shares (Note 13) for a total purchase price of $ 7 million. As at December 31, 2023, Allseas and its affiliates owned 53.8 million TMC common shares (2022: 23.7 million TMC common shares) which constituted 17.6 % (December 31, 2022: 8.9 %) of total common shares outstanding. 138 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 9. 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, a private corporation formed under the laws of British Columbia, Canada, to finance low carbon emitting energy production and technologies (natural gas, nuclear, renewables), transition metals and minerals required for energy storage and electrification (Cu, Li, Ni, Co, Mn), and the evolving environmental markets (the “Partnership”). In connection with the Royalty Agreement, NORI contributed a 2 % gross overriding royalty (the “NORI Royalty”) on the Company’s NORI project area in the CCZ in which NORI currently holds exclusive exploration rights for polymetallic nodules from the ISA to Low Carbon Royalties. The Company retained the right to repurchase up to 75 % of the NORI Royalty at an agreed capped return, exercisable in two transactions, between the second and the tenth anniversaries of the Partnership. If both repurchase transactions are executed, the NORI Royalty will be reduced to 0.5 %. At the Closing Date, Low Carbon Royalties also owned a 1.56 % gross overriding royalty on a producing natural gas field in Latin America (the “LCR-owned Royalty”). In consideration of the NORI Royalty, TMC received 35.0 % of the common shares issued by Low Carbon Royalties and $ 5 million in cash, as of the Closing Date. In connection with the Royalty Agreement the Company entered into an Investor Rights Agreement with Low Carbon Royalties and a shareholder of Low Carbon Royalties, pursuant to which the Company and this shareholder each have a right, subject to certain percentage maintenance, to nominate a director to Low Carbon Royalties’ board of directors, along with registration and information rights. As a condition of closing the Royalty Agreement, the parties entered into an agreement with Low Carbon Royalties to mitigate risks associated with the potential termination of the exploitation license granted for one of the royalty-producing natural gas fields in Latin America (the “Exploitation License”). As per the agreement, 5 million contingent value rights (“CVR”) were issued to NORI. The CVR would convert into 5 million additional shares of Low Carbon Royalties being issued to NORI, in the event the Exploitation License is found, in a final decision, to be invalid by the Colombian National Agency of Hydrocarbons prior to the earlier of (1) five years from the issuance of the CVR and (2) the date Low Carbon Royalties becomes a publicly listed entity. Although the Company does not control Low Carbon Royalties (as per ASC 810), it does however exercise significant influence and therefore the equity method of accounting is applied (as per ASC 323). On March 21, 2023, Low Carbon Royalties acquired additional gross overriding royalties on natural gas fields in Latin America, increasing its total gross overriding royalty on the existing first license block from 1.56 % to 3.13 % and acquiring a new gross overriding royalty of 1.44 % on a second license block. The royalty acquisitions were financed through the issuance of Low Carbon Royalties common shares to the third-party vendor of such royalties, thereby reducing the Company’s ownership in the Partnership to 32 % from 35 %. Based on the fair value of the NORI Royalty granted and the cash received, the Company recorded $ 9 million as investment in Low Carbon Royalties on the Closing Date. For the year ended December 31, 2023, the Company’s share of the net loss generated by the Low Carbon Royalties was $ 0.6 million. ​ ​ ​ ​ ​ ​ Investment Fair value of NORI Royalty ​ $ 14,000 Cash received ​ $ ( 5,000 ) Cost of Investment on Closing Date ​ $ 9,000 Equity-accounted investment loss for the year ​ ( 571 ) Investment as at December 31, 2023 ​ $ 8,429 ​ 139 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ The NORI Royalty was recorded as a royalty liability in the consolidated Balance Sheet as this represented a sale of future revenues which falls within the scope of 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 December 31, 2023, remained unchanged at $ 14 million. Financial results of Low Carbon Royalties are summarized below: ​ ​ ​ ​ ​ ​ December 31 For the year ended ​ 2023 Current Assets ​ $ 1,091 Non-Current Assets ​ ​ 26,315 Current Liabilities ​ ​ 131 ​ ​ ​ ​ Royalty Income ​ $ 399 Total Revenue ​ 480 Comprehensive Income (Loss) for the year ​ $ ( 1,747 ) ​ ​ 10. Exploration Contracts Significant Exploration Agreements NORI Exploration Contract: The Company’s wholly-owned subsidiary, NORI, was granted the NORI Exploration Contract on July 22, 2011 under the sponsorship of Nauru. The contract application fee of $ 0.3 million, provides NORI with exclusive rights to explore for polymetallic nodules in the NORI Area for an initial term of 15 years (renewable for successive five-year periods) subject to complying with the exploration contract terms (Note 19) and provides NORI with the priority right to apply for an exploitation contract to collect polymetallic nodules in the same area. NORI has a right to renounce, without penalty, in whole or part of its rights in the NORI Area at any time and therefore does not have a fixed commitment with relation to the NORI Exploration Contract (Note 19). Marawa Agreements: Marawa executed the Marawa Exploration Contract with the ISA on January 19, 2015. The Marawa Exploration Contract provides Marawa with exclusive rights to explore for polymetallic nodules in the Marawa Area for an initial term of 15 years (subject to renewal for successive five-year periods) subject to complying with the exploration contract terms and the priority right to apply for an exploitation contract to collect polymetallic nodules in the same area. On March 17, 2012, the Company’s wholly-owned subsidiary, DeepGreen Engineering Pte. Ltd. (“DGE”), entered into an Option Agreement (“Marawa Option Agreement”) with Marawa and Kiribati. DGE has the right to terminate the Marawa Services Agreement at its sole discretion by giving written notice to Marawa and Kiribati, and such termination shall take effect two months following the date of the termination notice, provided that DGE shall pay to the ISA on behalf of Marawa the fees or payments legally owed to the ISA by Marawa (including the annual ISA exploration fee and ISA royalties and taxes) that are outstanding at the date of termination or that are incurred within 12 months after the date of such termination. 140 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ TOML Exploration Contract: TOML was granted the TOML Exploration Contract on January 11, 2012 under the sponsorship of Tonga. The TOML Exploration Contract provides TOML with exclusive rights to explore for polymetallic nodules in the TOML Area for an initial term of 15 years (renewable for successive five-year periods) subject to complying with the exploration contract terms and a priority right to apply for an exploitation contract to collect polymetallic nodules in the same area. On March 31, 2020, the Company entered into an acquisition agreement with Deep Sea Mining Finance Ltd. to acquire TOML and other related entities in the group (the “TOML Acquisition”). Total purchase price of the TOML Acquisition, before transaction costs, was $ 32.0 million comprising of $ 42.7 million for exploration contracts offset by $ 10.7 million for deferred tax liability. TOML holds an ISA exploration contract in the CCZ (“TOML Exploration Contract”) and some exploration related equipment. Reconciliation – Exploration Contracts A reconciliation of the Company’s capitalized exploration contracts is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marawa ​ ​ ​ ​ ​ ​ NORI ​ Option ​ TOML ​ ​ ​ ​ ​ Contract ​ Agreement ​ Contract ​ Total December 31, 2022 $ 250 ​ $ 199 ​ $ 42,701 ​ $ 43,150 December 31, 2023 $ 250 ​ $ 199 ​ $ 42,701 ​ $ 43,150 ​ Exploration and Evaluation Expenses The detail of exploration and evaluation expenses is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI Marawa TOML ​ ​ ​ ​ Exploration ​ Option ​ Exploration ​ ​ ​ For the year ended December 31, 2023 ​ Contract ​ Agreement ​ Contract ​ Total Environmental Studies ​ $ 16,421 ​ $ — ​ $ — ​ $ 16,421 Exploration Labor ​ ​ 7,268 ​ ​ 227 ​ ​ 711 ​ ​ 8,206 Share-Based Compensation (Note 15) ​ 4,444 ​ 146 ​ 443 ​ 5,033 Mining, Technological and Process Development ​ ​ 13,694 ​ ​ — ​ ​ 1,262 ​ ​ 14,956 Prefeasibility Studies ​ ​ 1,345 ​ ​ — ​ ​ — ​ ​ 1,345 Sponsorship, Training and Stakeholder Engagement (1) ​ ​ 2,248 ​ ​ 202 ​ ​ 996 ​ ​ 3,446 Other ​ 433 ​ — ​ 9 ​ 442 ​ ​ $ 45,853 ​ $ 575 ​ $ 3,421 ​ $ 49,849 (1) Sponsorship, Training and Stakeholder Engagement include $ 80 thousand of equity (RSU) settled expenses in 2023 (2022: $ nil ) 141 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI Marawa TOML ​ ​ ​ ​ Exploration ​ Option ​ Exploration ​ ​ ​ For the year ended December 31, 2022 ​ Contract ​ Agreement ​ Contract ​ Total Environmental Studies ​ $ 38,022 ​ $ — ​ $ — ​ $ 38,022 Exploration Labor ​ ​ 4,420 ​ ​ 758 ​ ​ 842 ​ ​ 6,020 Share-Based Compensation (Note 15) ​ 6,086 ​ 1,167 ​ 1,235 ​ 8,488 Mining, Technological and Process Development ​ ​ 1,823 ​ ​ 47 ​ ​ 118 ​ ​ 1,988 PMTS ​ ​ 15,603 ​ ​ 670 ​ ​ 1,546 ​ ​ 17,819 Allseas Warrant (Note 13) ​ 62,910 ​ — ​ 6,990 ​ 69,900 Sponsorship, Training and Stakeholder Engagement ​ ​ 891 ​ ​ 194 ​ ​ 476 ​ ​ 1,561 Other ​ ​ 706 ​ ​ 16 ​ ​ 79 ​ ​ 801 ​ ​ $ 130,461 ​ $ 2,852 ​ $ 11,286 ​ $ 144,599 ​ ​ 11. General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended For the year ended ​ ​ December 31, ​ December 31, ​ ​ 2023 ​ 2022 Professional and consulting fees (1) ​ $ 6,584 ​ $ 6,795 Investor relations (2) ​ 1,547 ​ 1,514 Office and sundry ​ 3,503 ​ 4,926 Salaries and wages ​ 4,995 ​ 5,921 Director fees ​ 774 ​ 788 Share-based compensation ​ 4,122 ​ 8,596 Transfer agent and filing fees ​ 363 ​ 378 Travel expenses ​ 609 ​ 600 Other expenses ​ 43 ​ — General and Administrative Expenses ​ $ 22,540 ​ $ 29,518 (1) Professional and consulting fees include $ 0.4 million of equity (RSU) settled expenses in 2023 (2022: $ 1 million). (2) Investor relations include $ nil million of equity (RSU) settled expenses in 2023 (2022: $ 0.3 million). ​ 12. Financing Activity Registered Direct Offering On August 14, 2023, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “Registered Direct Offering”) 12,461,540 common shares and issue Class A Warrants to purchase 6,230,770 common shares (Note 13). Each common share and accompanying Class A Warrant were sold at a price of $ 2.00 per unit. The exercise price to purchase one common share under the Class A warrants is $ 3.00 , subject to adjustment as provided in the warrant agreement. The aggregate gross proceeds to the Company from the Registered Direct Offering were expected to be approximately $ 24.9 million, before deducting fees payable to financial advisors and other estimated offering expenses payable by the Company ($ 23.6 million net of fees). As at December 31, 2023, 7,961,540 common shares and Class A Warrants to purchase 3,980,770 common shares had been issued and the Company received gross proceeds amounting to $ 15.9 million. The Company incurred $ 1.3 million as offering expenses, resulting in net proceeds received of $ 14.6 million. Out of the total net proceeds received of $ 14.6 million, the net proceeds attributable to common shares were $ 11.4 million and the net proceeds attributable to Class A Warrants were $ 3.2 million. 142 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ On January 30, 2024, the Company received the remaining committed funding of $ 9 million (representing 4,500,000 common shares and 2,250,000 warrants) from an investor affiliated with the Company. The common shares and warrants were issued on January 31, 2024. PIPE Financing On August 12, 2022, the Company entered into three securities purchase agreements for the private placement of an aggregate of 37,978,680 of the Company’s common shares. As at December 31, 2022, all of the 37,978,680 shares were issued and the Company received gross proceeds amounting to $ 30.4 million. The Company incurred $ 1.0 million as placement agent fees and offering expenses out of which expenses amounting to $ 0.2 million were settled by issuing 287,500 shares at an issue price of $ 0.80 per share. ​ 13. Warrants Public Warrants Each whole Public Warrant entitles the holder to purchase one TMC common share at a price of $ 11.50 per share beginning on October 9, 2021, subject to restrictions described below. As at December 31, 2023, 15,000,000 Public Warrants were outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will expire on September 9, 2026 or earlier upon redemption or liquidation. Public Warrant holders do not have the rights or privileges of holders of common shares nor any voting rights until they exercise their warrants and receive common shares. The Company will not be obligated to deliver any common shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act of 1933, as amended (“Securities Act”) with respect to the common shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrants will be exercisable and the Company will not be obligated to issue a common share upon exercise of a Public Warrant unless the common share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Public Warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any Public Warrants. In the event that a registration statement is not effective for the exercised Public Warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the common share underlying such unit. The Company may call the Public Warrants for redemption: ● in whole and not in part; ● at a price of $ 0.01 per warrant; ● upon a minimum of 30 days ’ prior written notice of redemption; and ● if, and only if, the closing price of the common shares equals or exceeds $ 18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - day trading period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. 143 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ If the Company calls the Public Warrants for redemption in certain circumstances, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, by surrendering the Public Warrants for a number of common shares per warrant equal to the lesser of: ● the quotient obtained by dividing (x) the product of the number of common shares underlying such warrant, multiplied by the excess of the average reported closing price of common shares for the ten trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders (“Fair Market Value”) over the warrant price by (y) the Fair Market Value, and ● 0.365 . Private Warrants As at December 31, 2023, 9,500,000 Private Warrants were outstanding. The Private Warrants (including the common shares issuable upon exercise of the Private Warrants) were not transferable, assignable or salable until October 9, 2021, except to permitted transferees. The Private Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its permitted transferees: (i) the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and (ii) the Private Warrants are not redeemable by the Company. The Private Warrants are subject to the Company’s redemption option at the price of $ 0.01 per warrant, if not held by the Sponsor or any of its permitted transferees, provided that the other conditions of such redemption are met, as described above. If holders of the Private Warrants elect to exercise the warrants on a cashless basis, the holder would pay the exercise price by surrendering their Private Warrants for a number of common shares equal to: ● the quotient obtained by dividing (x) the product of the number of common shares underlying the warrants, multiplied by the excess of the average reported closing price of the common shares for the ten trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent (“fair market value”) over the exercise price of the warrants by (y) the fair market value. If the Private Warrants are held by a holder other than the Sponsor or any of its permitted transferees, the Private Warrants are redeemable by the Company in all redemption scenarios applicable to the Public Warrants and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Private Warrants under ASC 815-40, in conjunction with the SEC Statement , and concluded that they do not meet the criteria to be classified in shareholders’ equity. Specifically, the terms of the warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrants should be classified as a liability. The Private Warrants were valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected volatility of the Company’s common shares. As the Company’s shares reached their two-year trading anniversary on September 9, 2023, the Company changed its approach in calculating volatility from solely the implied volatility of the Company’s Public Warrants to now include an equal weight blend of the Public Warrants volatility and the historical volatility of the Company’s share price. The expected volatility was estimated using a binomial model based on consideration of the implied volatility from the Company’s Public Warrants adjusted to account for the call feature of the Public Warrants at prices above $ 18.00 during 20 trading days within any 30 -day trading period and historical volatility of the share price of the common shares. 144 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ As at December 31, 2023, the fair value of outstanding Private Warrants of approximately $ 2 million is recorded as warrants liability. The following table presents the changes in the fair value of warrants liability: ​ ​ ​ ​ ​ ​ Private ​ ​ Warrants Warrants liability as at December 31, 2022 ​ $ 983 Increase in fair value of warrants liability ​ 986 Warrants liability as at December 31, 2023 ​ $ 1,969 ​ As at December 31, 2023, the fair value of the Private Warrants was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 ​ Exercise price ​ $ 11.50 ​ $ 11.50 ​ Share price ​ $ 1.10 ​ $ 0.77 ​ Volatility (1) ​ 105.34 % ​ 88.05 % Term ​ 2.69 years ​ 3.69 years Risk-free rate ​ 3.98 % ​ 4.04 % Dividend yield ​ 0.0 % ​ 0.0 % 1. The Company used a blended volatility approach to calculate the fair value of the warrants on December 31, 2023 by assigning equal weights to both implied volatility of the Company’s Public Warrants and the historical volatility of the share price. The volatility used in calculating the fair value of the warrants as at December 31, 2022 comprised only of the implied volatility of the Company’s Public Warrants. There were no exercises or redemptions of the Public Warrants or Private Warrants during the year ended December 31, 2023. Allseas Warrant The Allseas Warrant that was granted on March 4, 2021, vested and became exercisable for 11.6 million common shares upon successful completion of the PMTS in November 2022. The Company recognized a charge of $ 69.9 million in the fourth quarter of 2022, representing the fair market value of the Allseas Warrant on the date it was granted. On July 26, 2023, the Allseas Warrant was exercised resulting in the issuance of 11,578,620 common shares of the Company on August 9, 2023, once the exercise amount of $ 115.8 thousand was received from Allseas (Note 8). Class A Warrants As a part of the Registered Direct Offering (Note 12), the Company issued 3,980,770 Class A Warrants for the purchase of common shares at an exercise price of $ 3.00 per share. The Class A Warrants expire on December 31, 2027. The valuation of these Class A Warrants was determined using a Monte Carlo simulation. ​ 145 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ The Class A Warrants were valued on August 14, 2023, at a fair value of $ 0.80 per warrant. The fair value of the Class A Warrants was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ August 14, ​ ​ 2023 ​ Exercise price ​ $ 3.00 ​ Share price ​ $ 1.41 ​ Call price threshold ​ $ 6.50 ​ Volatility ​ 107.08 % Term (years) ​ 4.38 ​ Risk-free rate ​ 4.32 % Dividend yield ​ 0.0 % ​ The Class A Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 30 consecutive trading days exceeds $ 6.50 , and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation of the unexercised warrants, offering $ 0.0001 per Warrant Share. If conditions for the call are met, the unexercised portion of these warrants will be cancelled ten Trading Days after the call notice is received. The Class A Warrants were not determined to be liabilities under ASC 480 as they were not required to be redeemed. The Company classified the Class A Warrants as equity (per ASC 815), as the warrants entailed physical settlement and were also considered to be indexed to the Company’s share, wherein, upon exercise, a fixed number of common shares would be issued on payment of a fixed exercise price. As at December 31, 2023, the Company recorded $ 3.2 million as additional paid in capital. On January 31, 2024, the Company issued the remaining 2,250,000 Class A Warrants, after receiving the remaining committed funding from the Registered Direct Offering of $ 9 million (Notes 12 and 22). ​ 14. Common Shares Authorized and Issued As at December 31, 2023, the authorized, issued and outstanding common shares and Special Shares of the Company are as follows: ​ ​ ​ ​ ​ ​ ​ Issued and ​ ​ Authorized ​ Outstanding Common shares Unlimited , with no par value 306,558,710 Class A Special Shares 5,000,000 , with no par value 4,448,259 Class B Special Shares 10,000,000 , with no par value 8,896,399 Class C Special Shares 10,000,000 , with no par value 8,896,399 Class D Special Shares 20,000,000 , with no par value 17,792,922 Class E Special Shares 20,000,000 , with no par value 17,792,922 Class F Special Shares 20,000,000 , with no par value 17,792,922 Class G Special Shares 25,000,000 , with no par value 22,241,179 Class H Special Shares 25,000,000 , with no par value 22,241,179 Class I Special Shares 500,000 , with no par value 500,000 Class J Special Shares 741,000 , with no par value 741,000 ​ The holders of the Company’s common shares are entitled to one vote for each common share held. 146 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Each class of Special Shares do not have voting rights and do not participate in earnings. The Special Shares automatically convert to TMC common shares if TMC common shares trade at a price on any 20 trading days within any 30 -trading day period that is greater than or equal to the specific trigger price for the respective class of Special Share. Below is a summary of the Special Shares and their respective vesting thresholds, assuming the full amount of Special Shares from Rollover Options are issued: ​ Special Share Class A B C D E F G H I J Share Trigger price ($) 15 25 35 50 75 100 150 200 50 12 Special Shares (million) 5 10 10 20 20 20 25 25 0.5 0.7 ​ As the Special Shares meet the indexation and equity classification criteria under ASC 815-40, the Special Shares have been classified as equity instruments at issuance. Common Share Continuity ​ ​ ​ ​ ​ ​ ​ Common shares Number Amount December 31, 2021 225,432,493 ​ $ 296,051 Issuance of shares under PIPE financing (Note 12) 38,266,180 ​ ​ 29,621 Exercise of stock options (Note 15) 118,461 ​ ​ 142 Conversion of restricted share units ​ 2,877,068 ​ ​ 6,875 Share purchase under Employee Stock Purchase Plan (Note 15) 117,929 ​ ​ 193 December 31, 2022 266,812,131 ​ $ 332,882 Issuance of shares under Registered Direct Offering (Note 12) 7,961,540 ​ ​ 11,420 Exercise of warrant by Allseas (Note 13) ​ 11,578,620 ​ ​ 70,016 Shares issued to Allseas (Notes 8) ​ 15,000,000 ​ ​ 15,910 Exercise of stock options (Note 15) ​ 120,000 ​ ​ 144 Conversion of restricted share units (Note 15) ​ 4,912,747 ​ ​ 7,720 Share purchase under Employee Stock Purchase Plan (Note 15) ​ 173,672 ​ ​ 147 December 31, 2023 306,558,710 ​ $ 438,239 ​ ​ 15. Share-Based Compensation The Company’s 2021 Incentive Equity Plan (the “Plan”) provides that the aggregate number of common shares reserved for future issuance under the Plan as of December 31, 2023, is 44,372,170 common shares, including 10,672,485 shares added to the Plan in January 2023 pursuant to the Plan’s automatic annual increase provision, provided that 2,243,853 of the outstanding common shares shall only be available for awards made to non-employee directors of the Company. On the first day of each fiscal year beginning in 2022 to the tenth anniversary of the closing of the Business Combination, the number of common shares that may be issued pursuant to the Plan is automatically increased by an amount equal to the lesser of 4 % of the number of outstanding common shares or an amount determined by the board of directors. Stock options Pursuant to the Company’s stock option plan, directors may, from time to time, authorize the issuance of stock options to directors, officers, employees, and consultants of the Company and its subsidiaries. The board of directors grants such options with vesting periods and exercise prices determined at its sole discretion. 147 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ As at December 31, 2023, there were 15,074,240 stock options outstanding under the Company’s Short-Term Incentive Plan (“STIP”) and 9,783,922 stock options outstanding under the Company’s Long-Term Incentive Plan (“LTIP”). The Company makes awards under the STIP and LTIP under its equity incentive plans in effect at the time of the award, which is currently the Plan. No new stock options were granted by the Company under the STIP or LTIP plans during 2023 and 2022. Outstanding under STIP plan : A continuity schedule summarizing the movements in the Company’s stock options under the STIP plan is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Aggregate ​ Weighted ​ ​ average intrinsic average ​ ​ Number of ​ exercise ​ value of ​ contractual ​ ​ Options ​ price per ​ stock ​ life ​ ​ Outstanding ​ option ​ options ​ (years) Outstanding – December 31, 2021 15,503,748 ​ $ 1.40 $ 17,415 ​ 6.33 Cancelled/Forfeited ( 28,947 ) ​ ​ 2.60 ​ — ​ — Exercised ( 118,461 ) ​ ​ 0.65 ​ — ​ — Outstanding – December 31, 2022 15,356,340 ​ $ 1.40 $ 1,582 ​ 5.11 Granted — ​ ​ — ​ — ​ — Expired ( 162,100 ) ​ ​ 0.87 ​ — ​ — Cancelled/Forfeited — ​ ​ — ​ — ​ — Exercised ( 120,000 ) ​ ​ 0.65 ​ — ​ — Outstanding – December 31, 2023 15,074,240 ​ $ 1.41 $ 5,425 ​ 4.18 Vested and exercisable – December 31, 2023 14,804,073 ​ $ 1.28 $ 5,425 ​ 4.17 ​ A summary of the Company’s stock options granted and outstanding under the Company’s STIP as at December 31, 2023 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average Number of Number of ​ ​ ​ ​ ​ life to expiry ​ Options ​ Options Expiry Date ​ Exercise price ​ (years) ​ Outstanding ​ Exercisable March 31, 2024 ​ $ 0.65 0.25 73,811 73,811 December 31, 2025 ​ $ 0.65 2.00 11,578 11,578 January 27, 2026 ​ $ 0.52 - $2.59 2.08 975,229 975,229 February 2, 2026 ​ $ 0.65 2.09 57,893 57,893 February 17, 2026 ​ $ 0.22 - $0.52 2.13 431,494 431,494 June 1, 2028 ​ $ 0.65 - $8.64 4.42 12,829,518 12,559,351 June 30, 2028 ​ $ 2.59 4.50 694,717 694,717 ​ ​ ​ ​ ​ ​ 15,074,240 14,804,073 ​ The total grant date fair value of STIP stock options that vested during the year ended December 31, 2023, was $ 1.5 million. As at December 31, 2023, total unrecognized share-based compensation expense of $ 47 thousand is expected to be recognized over a weighted-average recognition period of approximately one year . As at December 31, 2023, the closing market price of the Company’s common shares was $ 1.10 per share which was considered to be the fair value of the Company’s common share used to determine the intrinsic value of outstanding stock options. The aggregate intrinsic value of stock options exercised during the year ended December 31, 2023 was $ 188 thousand. 148 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Outstanding under LTIP plan: On March 4, 2021, the Company granted 9,783,922 stock options under its LTIP. These stock options have an exercise price of $ 0.65 per option and expire on June 1, 2028. The LTIP awards vest as follows: (1) Tranche 1 - 25 % when the Company’s market capitalization equals $ 3 billion; (2) Tranche 2 - 35 % when the Company’s market capitalization equals $ 6 billion; (3) Tranche 3 - 20 % upon the date that the ISA grants an exploitation contract to the Company; and (4) Tranche 4 - 20 % upon the commencement of the first commercial production following the grant of the exploitation contract. Tranche 1 and Tranche 2 vest based on the Company’s market capitalization of $ 3 billion and $ 6 billion, respectively. Accordingly, these options are determined to be market-based awards for which the Company has calculated fair value and derived a service period through which to expense the related fair value. The options included in Tranche 1 and Tranche 2 had a grant date fair value of $ 5.59 per share and $ 5.42 per share and derived service periods of 0.33 years and 1.41 years, respectively. The Company will expense these awards ratably over the remaining service period. Tranche 3 and Tranche 4 of the LTIP stock options vest based on the date the ISA grants an exploitation contract and the commencement of commercial production. These options are determined to be performance-based awards. The Company will recognize compensation costs for the performance-based awards if and when the Company concludes that it is probable that the performance conditions will be achieved. As at December 31, 2023, no compensation expense related to the performance based awards was recorded as the awarding of an ISA contract is outside the control of the Company. The Company will reassess the probability of the vesting of the performance-based awards at each reporting period and adjust the compensation cost when determined to be probable. The aggregate intrinsic value of LTIP stock options as at December 31, 2023 was $ 4.4 million. None of the LTIP stock options were exercisable on December 31, 2023. The Company expects LTIP options to vest as and when the market and performance milestones described below are achieved. As at December 31, 2023, total unrecognized share-based compensation expense for the LTIP stock options was $ 23 million. During the year ended December 31, 2023, the Company recognized $ 0.5 million of share-based compensation expense for stock options (originally issued under STIP and LTIP plans) in the statement of loss and comprehensive loss (2022: $ 9.5 million). Share-based compensation expense for stock options totaling $ 0.3 million related to general and administration matters were charged to the statement of loss and comprehensive loss for the year ended December 31, 2023 (2022: $ 4.8 million). The Company recorded a total of $ 0.2 million of share-based compensation expense for stock options related to exploration and evaluation activities for the year ended December 31, 2023 (2022: $ 4.7 million). Restricted Share Units The Company may, from time to time, grant RSUs to directors, officers, employees, and consultants of the Company and its subsidiaries under the Plan. On each vesting date, RSU holders are entitled to receive common shares equivalent to the number of RSUs held provided the holder is providing service to the Company on such vesting date. ​ 149 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ The details of RSUs granted by the Company during the year are as follows: ​ ​ ​ ​ ​ ​ Vesting Period 2023 2022 Vesting Immediately (1)(2) 3,561,078 1,721,729 Vesting fully on the anniversary of the grant date (3) 1,014,349 476,189 Vesting in thirds on each anniversary of the grant date (4) 8,689,481 464,632 Vesting in fourths on each anniversary of the grant date 404,277 527,800 Total Units Granted 13,669,185 3,190,350 1. Of the 3,561,078 units vesting immediately on grant date, 3,198,648 units were issued to settle liabilities with a carrying amount of $ 2.8 million, at a weighted average grant date fair value of $ 0.89 per RSU. 2. During the year ended December 31, 2023, the Company granted 274,912 units to consultants (2022: 649,157 units) resulting in $ 0.3 million, charged to professional and consulting fees under general and administrative expenses and $ 11 thousand charged to exploration and evaluation activities for the year ended December 31, 2023 (2022: $ 1.2 million of general and administrative expenses). During the year ended December 31, 2023, the Company also granted 43,478 units to consultants as a prepayment for their services (2022: nil ). 3. During the year ended December 31, 2023, the Company granted 1,014,349 RSUs (2022: 476,189 ) to its non-employee directors under the Company’s Non-employee Director Compensation Policy, which vest upon the Company’s 2024 annual shareholders meeting. The total fair value of units granted as annual grants to the non-employee directors amounted to $ 700,000 ( $ 700,000 in 2022). 4. During the year ended December 31, 2023, the Company granted 8,645,465 units, as payment for the 2022 LTIP awards and 44,016 units as a sign-on grant. The 2021 LTIP awards were granted in the fourth quarter of 2021 and totaled 3,500,000 units. A summary of the RSU activity in 2023 is presented in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Number of ​ average grant- ​ ​ RSUs ​ date fair value ​ ​ Outstanding ​ per RSU Outstanding – December 31, 2022 3,815,143 $ 2.75 Granted 13,669,185 ​ 0.92 Forfeited ​ ( 86,700 ) ​ ​ 0.96 Exercised ​ ( 4,912,748 ) ​ ​ 1.57 Outstanding – December 31, 2023 12,484,880 $ 1.23 ​ The grant date fair value of RSUs is equivalent to the closing share price of the Company’s common shares on the date of grant. During the year, a total of $ 8.6 million was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs (2022: $ 7.5 million). Share-based compensation expense for RSUs totaling $ 3.8 million related to general and administration matters was charged to the statement of loss and comprehensive loss for the year ended December 31, 2023 (2022: $ 3.8 million). The Company recorded a total of $ 4.8 million of share-based compensation expense for RSUs related to exploration and evaluation activities for the year ended December 31, 2023 (2022: $ 3.7 million). As at December 31, 2023, total unrecognized share-based compensation expense for RSUs was $ 6.9 million (December 31, 2022 - $ 6.1 million). The fair value of shares vested during the year ended December 31, 2023, amounted to $ 8.3 million (December 31, 2022 - $ 7.2 million). As at December 31, 2023, an aggregate of 746,445 vested units were being processed and due to be converted into common shares. 150 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Employee Stock Purchase Plan On May 31, 2022, TMC’s 2021 Employee Stock Purchase Plan (“ESPP”) was approved at the Company’s 2022 annual shareholders meeting. As of December 31, 2023, there were 7,922,445 common shares reserved for issuance under the ESPP. This included 2,668,121 shares added to the ESPP in January 2023 pursuant to the ESPP’s automatic annual increase provision discussed below. Under the ESPP, the number of shares reserved for issuance is subject to an annual increase provision which provides that on the first day of each of the Company’s fiscal years starting in 2022, common shares equal to the lesser of (i) 1 % percent of the common shares outstanding on the last day of the immediately preceding fiscal year, or (ii) such lesser number of shares as is determined by the board of directors will be added to the ESPP. Participation in the ESPP is available to all full-time and certain part-time employees, subject to certain conditions. The ESPP comprises offering periods that are twenty-four (24) months in length, which begin on approximately every June 1 and December 1. Each offering period includes four purchase periods of six months each, which begin on approximately every June 1 and December 1, or at such other times designated by the board of directors or its compensation committee. At the exercise date, which is the last business day of each purchase period, the accumulated deductions from participating employees are used to purchase common shares of the Company. Shares are purchased at a price equal to 85 % of the lower of either the share price of the Company’s common shares on the first business day of the particular offering period or the last business day of the purchase period. The ESPP also has an automatic reset feature wherein, if the share price of the common share on any exercise date is less than the share price of the common share on the first business day of the applicable offering period, then such offering period shall automatically terminate immediately after the purchase of the common shares. In such case, a new offering period shall commence on the first business day following the exercise date. The ESPP includes the following limitations: ● an employee’s contribution is limited to 15 % of the employee’s annual gross earnings, not to exceed $ 25,000 per year, ● an employee’s purchases in any offering period cannot exceed 15,000 common shares, and ● an employee’s purchases are capped, not to exceed 5 % of the Company’s total outstanding common shares. During 2023, the Company issued 173,672 common shares (2022: 117,929 common shares) to its employees as part of its ESPP program. A total of $ 47 thousand was charged to the statement of loss and comprehensive loss as share-based compensation expense for the year ended December 31, 2023, representing the share price purchase discount offered by the Company (2022: $ 0.1 million). From the amount charged in 2023, $ 26 thousand was recorded in exploration and evaluation expenses (2022: $ 35 thousand) and $ 21 thousand was recorded in general and administrative expenses (2022: $ 67 thousand). ​ 16. Loss per Share Basic loss per share is computed by dividing the loss by the weighted-average number of common shares of the Company outstanding during the period. Diluted loss per share is computed by giving effect to all common share equivalents of the Company, including outstanding stock options, RSUs, warrants, Special Shares and options to purchase Special Shares, to the extent these are dilutive. Basic and diluted loss per share was the same for each period presented as the inclusion of all common share equivalents would have been anti-dilutive. 151 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Anti-dilutive equivalent common shares were as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ For the year ended ​ ​ December 31, ​ December 31, ​ 2023 2022 Outstanding options to purchase common shares ​ 24,858,162 ​ 25,140,262 Outstanding RSUs 12,484,880 3,815,143 Outstanding shares under ESPP ​ 8,802 ​ 12,212 Outstanding warrants 28,480,770 36,078,620 Outstanding Special Shares and options to purchase Special Shares 136,239,964 136,239,964 Total anti-dilutive common equivalent shares 202,072,578 201,286,201 ​ 17. Financial Instruments Categories of Financial Instruments ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Financial assets ​ ​ Amortized cost ​ ​ Cash $ 6,842 $ 46,876 Receivables and Prepayments ​ ​ 1,978 ​ ​ 2,726 ​ $ 8,820 $ 49,602 ​ ​ ​ ​ ​ ​ ​ Financial liabilities ​ ​ Amortized cost ​ ​ Accounts payable and accrued liabilities $ 31,334 $ 41,614 Fair value through profit or loss ​ — ​ ​ — Royalty liability ​ ​ 14,000 ​ ​ — Warrants liability ​ ​ 1,969 ​ ​ 983 ​ $ 47,303 $ 42,597 ​ ​ 18. Related Party Transactions The Company’s subsidiary, DeepGreen Engineering Pte. Ltd., is engaged in a consulting agreement with SSCS Pte. Ltd. (“SSCS”) to manage offshore engineering studies. A director of DGE is employed through SSCS. Consulting services during the year ended December 31, 2023 totaled $ 212 thousand, (2022: $ 275 thousand), out of which a total $ 170 thousand (2022: $ 220 thousand), is disclosed as exploration labor within exploration and evaluation expenses (Note 10) and $ 42 thousand is disclosed as general and administrative expenses (2022: $ 55 thousand). As at December 31, 2023, the amount payable to SSCS was $ 17 thousand (December 31, 2022 - $ 17 thousand). The Company’s Chief Ocean Scientist provides consulting services to the Company through Ocean Renaissance LLC (“Ocean Renaissance”) where he is a principal. Consulting services during year ended December 31, 2023 amounted to $ 331 thousand (2022: $ 375 thousand), out of which $ 149 thousand (2022 $ 188 thousand:), is disclosed as exploration labor within exploration and evaluation expenses (Note 10) and $ 182 thousand is disclosed as general and administrative expenses (2022: $ 187 thousand). As at December 31, 2023, the amount payable to Ocean Renaissance was $ 25 thousand (December 31, 2022- $ nil ). The Registered Direct Offering announced on August 14, 2023, included approximately $ 0.3 million from the participation of several of the Company’s Directors and Officers. In addition, the committed funding included $ 10 million from ERAS Capital LLC, the investment fund of one of the Company’s Directors, $ 1 million of which was received on August 16, 2024 and the remaining $ 9 million was received on January 30, 2024 (Note 12). Apart from the above-mentioned transactions, the Company had transactions with Allseas which are detailed in Note 8. 152 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 19. Commitments and Contingent Liabilities NORI Exploration Contract As part of the NORI Exploration Contract with the ISA, NORI submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period. The periodic review report, which included a proposed work plan and estimated budget for 2022 to 2026, has been reviewed by and agreed with the ISA, and the Company is implementing the five-year plan. The cost of the estimated work plan for 2024 onwards is dependent on the ISA’s approval of the NORI Area D exploitation application. Should the approval of NORI’s exploitation application for NORI Area D be delayed or rejected, NORI intends to revise its estimated future work plan in respect of its NORI Area. Work plans are reviewed annually by the Company, agreed with the ISA and may be subject to change depending on the Company’s progress to date. Marawa Option Agreement and Services Agreement Through DGE’s Marawa Option Agreement and separate Services Agreement with Marawa with respect to the Marawa Area, Marawa and DGE submitted a periodic review report to the ISA in 2019, covering 2015-2019. The periodic review report includes a proposed work plan and estimated budget for the 2020-2024 five-year period. The five-year estimated expenditure is indicative and subject to change, Marawa will review the program regularly and Marawa will inform the ISA of any changes through its annual reports. To date, limited offshore marine resource definition activities in the Marawa Contract Area have occurred. The Company expects to collaborate with Marawa to assess the viability of any potential project in the Marawa Contract Area, although the timing of such assessment is unclear. Marawa has delayed certain of its efforts in the Marawa Contract Area while it determines how it will move forward with additional assessment work. TOML Exploration Contract As part of the TOML Exploration Contract, TOML submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period. The periodic review report included a summary of work completed over the five-year period and a program of activities and estimated budget for the next five-year period. On December 23, 2022, the ISA accepted TOML’s proposed program of activities for the 2022-2026 five-year period, which included an estimated five-year expenditure of up to $ 44 million. The five-year estimated expenditure is indicative and subject to change, TOML will review the program regularly and TOML will inform the ISA of any changes through its annual reports. Offtake Agreements On May 25, 2012, the Company’s wholly-owned subsidiary, DGE, and Glencore International AG (“Glencore”) entered into a copper offtake agreement and a nickel offtake agreement. DGE has agreed to deliver to Glencore 50 % of the annual quantity of copper and nickel produced at a DGE-owned processing facility from nodules derived from the NORI Area at London Metal Exchange referenced market pricing with allowances for product quality and delivery location. Both the copper and nickel offtake agreements are for the life of the Company’s rights to the NORI Area. Either party may terminate the agreement upon a material breach or insolvency of the other party. Glencore may also terminate the agreement by giving twelve months’ notice. Sponsorship Agreements On July 5, 2017, Nauru, the Nauru Seabed Minerals Authority and NORI entered into a sponsorship agreement formalizing certain obligations of the parties in relation to NORI’s exploration and potential exploitation of the NORI Area. Upon reaching the minimum recovery level within the exploitation contract area, NORI will pay Nauru a seabed mineral recovery payment based on the polymetallic nodules recovered from the exploitation contract area. In addition, NORI will pay an administration fee each year to Nauru for such administration and sponsorship, which is subject to review and increase in the event NORI is granted an ISA exploitation contract. NORI has begun discussions with the Government of Nauru to renegotiate the existing sponsorship agreement and has also committed to ensuring NORI pays corporate income tax within Nauru. 153 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ On March 8, 2008, Tonga and TOML entered into a sponsorship agreement formalizing certain obligations of the parties in relation to TOML’s exploration and potential exploitation of the TOML Area (“TOML Sponsorship Agreement”). Upon reaching the minimum recovery level within the exploitation contract area, TOML has agreed to pay Tonga a seabed mineral recovery payment based on the polymetallic nodules recovered from the exploitation contract area. In addition, TOML has agreed to pay reasonable direct costs incurred by Tonga to administer the obligations of Tonga to the ISA. On September 23, 2021, the Company and Tonga updated the TOML Sponsorship Agreement harmonizing the terms of its engagement with TOML with those held by NORI with Nauru. TOML expects to renegotiate the existing sponsorship agreement with Tonga prior to entering into operations in the TOML area and has committed to paying corporate income tax within Tonga. Contingent Liability On October 28, 2021, a shareholder filed a putative class action against the Company, one of the Company’s executives and a former director in federal district court for the Eastern District of New York, captioned Caper v. TMC The Metals Company Inc. F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard. The complaint alleges that all defendants violated Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Messrs. Barron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about the Company’s operations and prospects during the period from March 4, 2021 and October 5, 2021. On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v. TMC the Metals Company, Inc. These cases have been consolidated. On March 6, 2022, a lead plaintiff was selected. An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations, with the Plaintiff seeking to recover compensable damages caused by the alleged wrongdoings. The Company denies any allegations of wrongdoing and filed and served the plaintiff a motion to dismiss on July 12, 2022 and intend to defend against this lawsuit. On July 12, 2023, an oral hearing on the motion to dismiss was held. The parties are currently awaiting a ruling. There is no assurance, however, that the Company or the other defendants will be successful in the Company’s defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. If the motion to dismiss is unsuccessful, there is a possibility that the Company may incur a loss in this matter. Such losses or range of possible losses cannot be reliably estimated. A resolution of this lawsuit adverse to the Company or the other defendants, however, could have a material effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved. ​ On January 23, 2023, investors in the 2021 private placement from the Business Combination filed a lawsuit against us in the Commercial Division of New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al. v. Sustainable Opportunities Acquisition Corp. n/k/a TMC The Metals Company Inc., Index No. 650449/2023 (N.Y. Sup. Ct.). The Company filed a motion to dismiss on March 31, 2023, after which the plaintiffs filed an amended complaint on June 5, 2023. The amended complaint alleges that the Company breached the representations and warranties in the plaintiffs’ private placement Subscription Agreements and breached the covenant of good faith and fair dealing. The Plaintiffs are seeking to recover compensable damages caused by the alleged wrongdoings. The Company deny any allegations of wrongdoing and filed a motion to dismiss the amended complaint on July 28, 2023. On December 7, 2023, the Court granted our motion to dismiss the claim for breach of the covenant of good faith and fair dealing and denied our motion to dismiss the breach of the Subscription Agreement claim. The Company filed a notice of appeal regarding the Court’s denial of our motion to dismiss the breach of the Subscription Agreement claim. There is no assurance that the Company will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Such losses or range of possible losses cannot be reliably estimated. ​ ​ ​ 154 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 20. Segmented Information The Company’s business consists of only one operating segment, namely exploration of seafloor polymetallic nodules, which includes the development of a metallurgical process to treat such seafloor polymetallic nodules. Details on the geographical segmentation of the Company’s long-lived assets based on where each legal entity is domiciled are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Equipment December 31, 2023 December 31, 2022 Nauru $ 1,128 $ 1,154 Singapore ​ ​ 1,643 ​ ​ 863 Tonga ​ 5 ​ 7 North America ​ — ​ 1 Total $ 2,776 $ 2,025 ​ ​ ​ 21. Income Taxes Reconciliation of Effective Tax Rate The Company is subject to Canadian federal and provincial tax for the estimated assessable profit at a rate of 26.68 % for the year ended December 31, 2023 (2022: 26.61 %). The Company had no assessable profit in Canada for all periods disclosed. The income tax expense at statutory rates for the Company can be reconciled to the reported loss for the years 2023 and 2022 per the statement of loss and comprehensive loss as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ For the year ended ​ ​ ​ December 31, ​ December 31, ​ ​ 2023 2022 (1) Loss for the year, before taxes ​ $ ( 73,740 ) ​ $ ( 170,887 ) ​ Canadian Federal and Provincial income tax rates ​ 26.68 % ​ 26.61 % Income tax recovery based on the above rates $ ( 19,677 ) $ ( 45,473 ) ​ Permanent differences ​ 1,556 ​ 1,926 ​ Effect of differences in future and foreign tax rates ​ 14,038 ​ 36,903 ​ Valuation allowance changes affecting the provision of income taxes ​ 4,124 ​ 6,721 ​ Total income taxes $ 41 $ 77 ​ (1) Comparative amounts for the year ended December 31, 2022 are restated based on actual tax returns filed. The Company currently has no uncertain tax positions and is therefore not reflecting any adjustments. 155 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Components of the Company’s deferred income tax assets (liabilities) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Deferred Tax Assets ​ ​ Non-capital losses $ 21,195 $ 16,011 Investments ​ 384 ​ 172 Equipment ​ 260 ​ 79 Share issuance costs ​ 496 ​ 218 Total deferred income tax assets $ 22,335 $ 16,480 Valuation allowance ​ ( 22,335 ) ​ ( 16,480 ) Deferred tax asset recognized $ — $ — ​ ​ ​ ​ ​ ​ ​ Deferred Tax Liability ​ ​ ​ ​ ​ ​ Difference between the book value and the tax basis of the TOML exploration contract (Note 7) ​ $ ( 10,675 ) ​ $ ( 10,675 ) Deferred tax liability recognized $ ( 10,675 ) $ ( 10,675 ) (1) Comparative amounts for the year ended December 31, 2022 are restated based on actual tax returns filed. Deductible temporary differences, unused tax losses and unused tax credits are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 December 31, 2022 Expiry Date Range ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-capital losses $ 89,333 $ 67,409 See below Investments $ 2,856 $ 1,273 Not applicable Equipment $ 962 $ 291 Not applicable Share issuance costs $ 1,860 $ 821 Not applicable ​ As at December 31, 2023, the Company had non-capital loss carry-forwards of $ 89.3 million that may be used to offset future taxable income. These losses, if not utilized, will expire as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada Singapore United States Tonga 2035 $ — $ — $ 2 $ — 2041 ​ 3,741 ​ — ​ — ​ — 2042 ​ ​ 13,707 ​ ​ — ​ ​ 1 ​ ​ — 2043 ​ ​ 12,343 ​ ​ — ​ ​ 3 ​ ​ — No expiry ​ — ​ 20,567 ​ — ​ 38,969 Loss carry-forwards ​ $ 29,791 ​ $ 20,567 ​ $ 6 ​ $ 38,969 ​ The Company files income tax returns in Canada, the United States, Singapore and Tonga, and is subject to examination in these jurisdictions for all years since the Company’s inception in 2011. As at December 31, 2023, all tax years are subject to examination by the tax authorities and no tax authority audits are currently underway. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years which have been carried forward and may be audited in subsequent years when utilized. The timing of the resolution, settlement and closure of any income tax audits is highly uncertain, and the Company is unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. It is possible that the balance of gross unrecognized tax benefits could significantly change in the next twelve months. As at December 31, 2023, the 2023 tax year filings for the Company and its subsidiaries (where applicable) remain unfiled and have not been assessed by the relative tax authorities. 156 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 22. Quarterly Financial Data (Unaudited) Restatement of Previously Issued Financial Statements The right to royalty payments underlying the NORI asset (sale of future revenue) amounting to $ 14 million (Note 9) was considered as the transfer (sale) of a non-financial asset in the Company’s previously issued financial statements for the three months ended March 31, 2023, the six months ended June 30, 2023 and the nine months ended September 30, 2023 contained in its Quarterly Reports on Form 10-Q for the quarter ended March 31, 2023, June 30, 2023 and September 30, 2023, respectively, filed with the SEC (the “Previous Financial Statements”). In preparing the Previous Financial Statements, the Company derecognized the capitalized exploration contract related to the NORI project amounting to $ 0.25 million and recorded the remaining value of the non-financial asset received amounting to $ 13.75 million as a gain on disposition. In connection with the preparation of the financial statements for the year ended December 31, 2023 and a re-evaluation of ASC 470 by the Company, the Company concluded that the sale of future revenue falls within the scope of ASC 470 and, as a result, the Company re-evaluated whether the offsetting entry to the proceeds it received from Low Carbon Royalties should be classified as debt or deferred income. As the transaction with Low Carbon Royalties was considered an equity investment rather than a sale transaction, the sale of future revenue was reclassified as Royalty Liability, as per ASC 470, in the Company’s 2023 financial statements for the year ended December 31, 2023. Factors that also influenced this reclassification included the Company’s continued significant involvement in generating future cash flows from operations and the fact that the earnings process implied in this transaction had not been completed. As a result, the Company has restated the Previous Financial Statements. - This error had no impact on our annual audited financial statements as of December 31, 2023. - This error had no impact on the consolidated statements of loss and comprehensive loss for the three-month period ended June 30, 2023 and the three month period ended September 30, 2023 - The error and restatement of the 2023 quarterly financial statements does not impact the Company's reported cash position in any of the previously reported periods or as of December 31, 2023. ​ In the following tables, we have presented a reconciliation of our unaudited condensed consolidated financial information as originally reported in the Previous Financial Statements to the as restated amounts as of and for the three months ended March 31, 2023, six months ended June 30, 2023, and nine months ended September 30, 2023. The restatements will be reflected in the comparative financial statements included in our future filings of our 2024 unaudited condensed consolidated financial statements within our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024, respectively. The tables below set forth the unaudited condensed consolidated balance sheet information, the unaudited condensed statements of loss and comprehensive loss and the unaudited condensed consolidated statements of cash flows including the amounts as reported, adjustments and the amounts as restated (in thousands, except per share amounts): ​ 157 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Condensed Consolidated Balance Sheet Information ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at March 31, 2023 ​ As at June 30, 2023 ​ As at September 30, 2023 ​ ​ As Previously Restatement ​ ​ ​ ​ As Previously ​ Restatement ​ ​ ​ ​ As Previously ​ Restatement ​ ​ ​ ​ Reported ​ Adjustments As Restated Reported Adjustments As Restated Reported Adjustments As Restated ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash ​ $ 28,390 ​ $ — ​ ​ 28,390 ​ $ 20,006 ​ $ — ​ ​ 20,006 ​ $ 22,548 ​ ​ — $ 22,548 Receivables and prepayments ​ 3,230 ​ — ​ 3,230 ​ 1,637 ​ — ​ 1,637 ​ 5,325 ​ — ​ 5,325 ​ ​ 31,620 ​ — ​ 31,620 ​ 21,643 ​ — ​ 21,643 ​ 27,873 ​ — ​ 27,873 Non-current ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration contracts ​ 42,900 ​ 250 ​ 43,150 ​ 42,900 ​ 250 ​ 43,150 ​ 42,900 ​ 250 ​ 43,150 Equipment ​ 1,997 ​ — ​ 1,997 ​ 1,970 ​ — ​ 1,970 ​ 2,078 ​ — ​ 2,078 Right-of-use asset ​ — ​ — ​ — ​ — ​ — ​ — ​ 6,198 ​ — ​ 6,198 Investment ​ 8,781 ​ — ​ 8,781 ​ 8,644 ​ — ​ 8,644 ​ 8,525 ​ — ​ 8,525 ​ ​ 53,678 ​ 250 ​ 53,928 ​ 53,514 ​ 250 ​ 53,764 ​ 59,701 ​ 250 ​ 59,951 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ASSETS ​ $ 85,298 ​ $ 250 ​ $ 85,548 ​ $ 75,157 ​ $ 250 ​ $ 75,407 ​ $ 87,574 ​ $ 250 ​ $ 87,824 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ 17,544 ​ — ​ 17,544 ​ 18,113 ​ — ​ 18,113 ​ 19,344 ​ — ​ 19,344 ​ ​ 17,544 ​ — ​ 17,544 ​ 18,113 ​ — ​ 18,113 ​ 19,344 ​ — ​ 19,344 Non-current ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred tax liability ​ 10,675 ​ — ​ 10,675 ​ 10,675 ​ — ​ 10,675 ​ 10,675 ​ — ​ 10,675 Royalty Liability ​ — ​ 14,000 ​ 14,000 ​ — ​ 14,000 ​ 14,000 ​ — ​ 14,000 ​ 14,000 Warrants liability ​ 1,528 ​ — ​ 1,528 ​ 2,314 ​ — ​ 2,314 ​ 2,197 ​ — ​ 2,197 TOTAL LIABILITIES ​ $ 29,747 ​ $ 14,000 ​ $ 43,747 ​ $ 31,102 ​ $ 14,000 ​ $ 45,102 ​ $ 32,216 ​ $ 14,000 ​ $ 46,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ Common shares (unlimited shares, no par value) ​ 345,090 ​ — ​ 345,090 ​ 345,775 ​ — ​ 345,775 ​ 434,099 ​ — ​ 434,099 Special Shares ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — Additional paid in capital ​ 186,796 ​ — ​ 186,796 ​ 188,722 ​ — ​ 188,722 ​ 124,168 ​ — ​ 124,168 Accumulated other comprehensive loss ​ ( 1,216 ) ​ — ​ ( 1,216 ) ​ ( 1,216 ) ​ — ​ ( 1,216 ) ​ ( 1,216 ) ​ — ​ ( 1,216 ) Deficit ​ ( 475,119 ) ​ ( 13,750 ) ​ ( 488,869 ) ​ ( 489,226 ) ​ ( 13,750 ) ​ ( 502,976 ) ​ ( 501,693 ) ​ ( 13,750 ) ​ ( 515,443 ) TOTAL EQUITY ​ $ 55,551 ​ ( 13,750 ) ​ $ 41,801 ​ $ 44,055 ​ ( 13,750 ) ​ $ 30,305 ​ $ 55,358 ​ ​ ( 13,750 ) ​ $ 41,608 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES AND EQUITY ​ $ 85,298 ​ $ 250 ​ $ 85,548 ​ $ 75,157 ​ $ 250 ​ $ 75,407 ​ $ 87,574 ​ $ 250 ​ $ 87,824 ​ ​ 158 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Condensed Consolidated Statements of Loss and Comprehensive Loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For three months period ended ​ For six months period ended ​ For nine months period ended ​ ​ March 31, 2023 ​ June 30, 2023 ​ September 30, 2023 ​ ​ As Previously ​ Restatement ​ ​ ​ ​ As Previously ​ Restatement ​ ​ ​ ​ As Previously ​ Restatement ​ ​ ​ ​ Reported Adjustments As Restated Reported Adjustments As Restated Reported Adjustments As Restated Operating expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ Exploration and evaluation expenses ​ $ 7,169 ​ — ​ $ 7,169 ​ $ 15,267 ​ — ​ $ 15,267 ​ $ 23,172 ​ — ​ $ 23,172 General and administrative expenses ​ 6,214 ​ — ​ 6,214 ​ 11,345 ​ — ​ 11,345 ​ 15,958 ​ — ​ 15,958 Operating loss ​ 13,383 ​ — ​ 13,383 ​ 26,612 ​ — ​ 26,612 ​ 39,130 ​ — ​ 39,130 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other items ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity-accounted investment loss ​ 219 ​ — ​ 219 ​ 356 ​ — ​ 356 ​ 475 ​ — ​ 475 Gain on disposition of asset ​ ( 13,750 ) ​ 13,750 ​ — ​ ( 13,750 ) ​ 13,750 ​ — ​ ( 13,750 ) ​ 13,750 ​ — Change in fair value of warrants liability ​ 544 ​ — ​ 544 ​ 1,331 ​ — ​ 1,331 ​ 1,214 ​ — ​ 1,214 Foreign exchange loss ​ 29 ​ — ​ 29 ​ 52 ​ — ​ 52 ​ 66 ​ — ​ 66 Interest income ​ ( 454 ) ​ — ​ ( 454 ) ​ ( 773 ) ​ — ​ ( 773 ) ​ ( 1,092 ) ​ — ​ ( 1,092 ) Fees and interest on credit facility ​ 27 ​ — ​ 27 ​ 277 ​ — ​ 277 ​ 529 ​ — ​ 529 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss and comprehensive loss for the year, before tax ​ $ ( 2 ) ​ $ 13,750 ​ $ 13,748 ​ $ 14,105 ​ $ 13,750 ​ $ 27,855 ​ $ 26,572 ​ $ 13,750 ​ $ 40,322 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax expense ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss (gain) and comprehensive loss (gain) for the period, after tax ​ $ ( 2 ) ​ $ 13,750 ​ $ 13,748 ​ $ 14,105 ​ $ 13,750 ​ $ 27,855 ​ $ 26,572 ​ $ 13,750 ​ $ 40,322 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share ​ ​ ​ ​ ​ ​ ​ ​ ​ - basic and diluted ​ — ​ $ 0.05 ​ $ 0.05 ​ $ 0.05 ​ $ 0.05 ​ $ 0.10 ​ $ 0.09 ​ $ 0.05 ​ $ 0.14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of Common Shares outstanding – basic ​ 272,029,603 ​ 272,029,603 ​ 272,029,603 ​ 276,702,050 ​ 276,702,050 ​ 276,702,050 ​ 282,745,892 ​ 282,745,892 ​ 282,745,892 Weighted average number of Common Shares outstanding – diluted ​ 300,376,133 ​ 272,029,603 ​ 272,029,603 ​ 276,702,050 ​ 276,702,050 ​ 276,702,050 ​ 282,745,892 ​ 282,745,892 ​ 282,745,892 ​ ​ 159 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Condensed Consolidated Statements of Cash Flows ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For three months period ended ​ For six months period ended ​ For nine months period ended ​ ​ March 31, 2023 ​ June 30, 2023 ​ September 30, 2023 ​ ​ As Previously ​ Restatement ​ ​ ​ As Previously ​ Restatement ​ ​ ​ As Previously ​ Restatement ​ ​ ​ Reported Adjustments As Restated Reported Adjustments As Restated Reported Adjustments As Restated Operating activities Gain/(Loss) for the period 2 ( 13,750 ) ( 13,748 ) ( 14,105 ) ( 13,750 ) ( 27,855 ) ( 26,572 ) ( 13,750 ) ( 40,322 ) Items not affecting cash: Amortization 88 — 88 175 — 175 262 — 262 Lease expense — — — — — — 318.00 — 318.00 Expenses settled with share-based payments 1,775 — 1,775 4,307 — 4,307 6,839 — 6,839 Expenses to be settled with share-based payments 15 — 15 — — — — — — Equity-accounted investment loss 219 — 219 356 — 356 475 — 475 Gain on disposition of asset ( 13,750 ) 13,750 — ( 13,750 ) 13,750 — ( 13,750 ) 13,750 — Change in fair value of warrants liability 545 — 545 1,331 — 1,331 1,214 — 1,214 Vesting of Allseas Warrant — — — — — — — — — Unrealized foreign exchange movement ( 20 ) — ( 20 ) ( 17 ) — ( 17 ) ( 24 ) — ( 24 ) Changes in working capital: — — — — — — — Receivables and prepayments ( 469 ) — ( 469 ) 1,123 — 1,123 ( 2,364 ) — ( 2,364 ) Accounts payable and accrued liabilities ( 11,877 ) — ( 11,877 ) ( 11,277 ) — ( 11,277 ) ( 10,757 ) — ( 10,757 ) Net cash used in operating activities ( 23,472 ) — ( 23,472 ) ( 31,857 ) — ( 31,857 ) ( 44,359 ) — ( 44,359 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Investing activities Cash received from investment in Low Carbon Royalties 5,000 ( 5,000 ) — 5,000 ( 5,000 ) — 5,000 ( 5,000 ) — Acquisition of equipment — — — ( 75 ) — ( 75 ) ( 175 ) ( 175 ) Net cash provided by (used in) investing activities 5,000 ( 5,000 ) — 4,925 ( 5,000 ) ( 75 ) 4,825 ( 5,000 ) ( 175 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing activities Proceeds from Low Carbon Royalties investment — 5,000 5,000 — 5,000 5,000 — 5,000 5,000 Proceeds from Registered Direct Offering — — — — — — 15,723 — 15,723 Expenses paid for Registered Direct Offering — — — — — — ( 779 ) — ( 779 ) Proceeds from PIPE financing — — — — — — — — — Expenses paid for PIPE financing — — — — — — — — — Proceeds from employee stock plan — — — 49 — 49 49 — 49 Proceeds from exercise of stock options — — — — — — 77 — 77 Proceeds from exercise of warrants by Allseas — — — — — — 116 — 116 Proceeds from issuance of shares — — — 30 — 30 30 — 30 Taxes withheld and paid on share-based compensation — — — — — — — — Net cash provided by financing activities — 5,000 5,000 79 5,000 5,079 15,216 5,000 20,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease in cash ( 18,472 ) — ( 18,472 ) ( 26,853 ) — ( 26,853 ) ( 24,318 ) — ( 24,318 ) Impact of exchange rate changes on cash 20 — 20 17 — 17 24 — 24 Cash - beginning of period 46,842 — 46,842 46,842 — 46,842 46,842 — 46,842 Cash - end of period 28,390 — 28,390 20,006 — 20,006 22,548 — 22,548 ​ ​ 160 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 23. Subsequent Events Amendment to Credit Facility with Allseas Affiliate On March 22, 2024, the Company entered into the Second Amendment to the Unsecured Credit Facility with the Lender, the parent of Allseas Investments S.A. and an affiliate of Allseas, to extend the Credit Facility to August 31, 2025 and to provide that the underutilization fee thereunder shall cease to be payable after the date on which the Company or the Lender gives notice of termination of the agreement. Under the amended Credit Facility, the Company may borrow from the Lender up to $ 25,000,000 in the aggregate through August 31, 2025. Credit Facility with ERAS Capital LLC and Gerard Barron On March 22, 2024, the Company entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar (collectively, the “2024 Lenders”), pursuant to which, the Company may borrow from the 2024 Lenders up to $ 20,000,000 in the aggregate ($ 10,000,000 from each of the 2024 Lenders), from time to time, subject to certain conditions. All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (SOFR), 180 -day average plus 4.0 % per annum payable in cash semi-annually (or plus 5 % if paid-in-kind at maturity, at our election) on the first business day of each of June and January. The Company will pay an underutilization fee equal to 4.0 % per annum payable semi-annually for any amounts that remain undrawn under the 2024 Credit Facility. The Company has the right to pre-pay the entire amount outstanding under the 2024 Credit Facility at any time, before the 2024 Credit Facility’s maturity of September 22, 2025. The 2024 Credit Facility also contains customary events of default. The 2024 Credit Facility will terminate automatically if the Company or any of its subsidiaries raise at least $ 50,000,000 in the aggregate (i) through the issuance of any of the Company’s or its subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement. ​ ​ 161 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.