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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 159 added, 166 removed, 360 unchanged (47% of the section changed)

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The discussion should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto for the year ended December 31, 2024 contained in our 2024 Annual Report on Form 10-K.

This discussion contains forward looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in “Risk Factors” in Item 1A of Part I of the 2024 Annual Report on Form 10-K, as updated and/or supplemented in subsequent filings with the SEC, including our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and this Quarterly Report on Form 10-Q.

Actual results may differ materially from those contained in any forward-looking statements.

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and its consolidated subsidiaries.

The unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2025 and 2024, respectively, present the financial position and results of operations of TMC the metals company Inc.

The unaudited condensed consolidated interim financial statements for the three and nine months ended September 30, 2025 and 2024, respectively, present the financial position and results of operations of TMC the metals company Inc.

and its consolidated subsidiaries.

We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the CCZ, with NORI Area D located approximately1,500 miles south-west of San Diego, California.

We are a deep-sea minerals exploration and development company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the CCZ, with NORI Area D located approximately1,500 miles south-west of San Diego, California.

The CCZ is a geological submarine fracture zone of abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 kilometers (4,500 miles) that spans approximately 4,500,000 square kilometers (1,737,000 square miles).

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If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products:

(i) feedstock for battery cathode precursors (nickel, cobalt and manganese sulfates, or intermediate nickel-copper-cobalt matte or nickel-copper-cobalt alloy) for nickel-rich lithium-ion batteries, (ii) copper cathode for electric wiring, energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel manufacturing.

(i) feedstock for battery cathode precursors (nickel, cobalt and manganese sulfates, or intermediate nickel-copper-cobalt matte or nickel-copper-cobalt alloy) for nickel-rich lithium-ion batteries, (ii) copper cathode for electric wiring, energy transmission and other applications and (iii) feedstock for steel manufacturing (nickel metal for stainless and other specialty steels, manganese silicate for manganese alloy production cobalt metal for high-performance steel alloys).

Our mission is to build a carefully managed shared stock of metal (a “metal commons”) that can be used, recovered and reused for generations to come.

Significant quantities of newly mined metal are required because existing metal stocks are insufficient to meet rapidly rising demand.

We are now in the evaluation stage following release of the TMC USA-A Prefeasibility Study, Technical Report Summary on August 4, 2025 where the Company declared world first mining reserves for a seafloor polymetallic nodule project.

We have not yet obtained an exploitation contract or a commercial recovery permit from any regulators.

We are now in the evaluation stage following the release of S-K 1300 NORI Area D Technical Report on August 4, 2025 where the Company declared mining reserves for a seafloor polymetallic nodule project.

We have not yet obtained an exploitation license, a commercial recovery permit and all other related offshore and onshore permits from the regulators.

Additionally, we do not yet hold the environmental or other permits required to construct and operate commercial-scale polymetallic nodule processing and refining facilities on land.

The ISA, comprised of 170 countries and the European Union, established regulations over deep-sea mining activities of their nationals, pursuant to UNCLOS.

The ISA has adopted exploration regulations and issued 19 polymetallic nodule exploration contracts but has been unable to adopt the final exploitation regulations, standards and guidelines despite initiating work in 2014.

The International Seabed Authority (“ISA”), comprised of 170 countries and the European Union, established regulations over deep-sea exploration activities of their nationals, pursuant to the United Nations Convention on the Law of the Sea (“UNCLOS”).

The ISA has adopted exploration regulations and issued 19 polymetallic nodule exploration contracts (17 of which located in the CCZ) but has been unable to adopt the final exploitation regulations, standards and guidelines despite initiating work in 2014.

Almost 30 countries, including the United States, have not ratified UNCLOS and are not member states of the ISA.

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Together, the resources are estimated to contain approximately 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2.0 million tonnes of cobalt, and 345 million tonnes of manganese.

These applications reflect our belief that DSHMRA provides a viable and robust regulatory path to commercial production, distinct from the ISA regime under UNCLOS, which has repeatedly delayed the adoption of the Mining Code.

We welcomed the recent Executive Order signed by President Trump on April 24, 2025, titled “Unleashing America’s Offshore Critical Minerals and Resources”, which directs the Commerce Secretary to implement an expedited permitting process under DSHMRA.

These applications reflect our belief that DSHMRA provides a viable and robust regulatory path to commercial production, distinct from the ISA regime under UNCLOS, which despite expectations to the contrary, has repeatedly delayed the adoption of the Regulations on the Exploitation of Mineral Resources in the Area.

On April 24, 2025, the Executive Order, titled “Unleashing America’s Offshore Critical Minerals and Resources”, was signed, which directs the Commerce Secretary to implement an expedited permitting process under DSHMRA.

In addition to directing the International Development Finance Corporation, Export-Import Bank and Trade and Development Agency to identify tools to support this new industry, the Executive Order instructs the Departments of Defense and Energy to assess the use of the National Defense Stockpile for nodule-derived minerals and of entering into offtake agreements for the procurement of these minerals.

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At the same time as we pursue the U.S.

pathway, we continue to preserve our rights under the ISA system.

regulatory pathway, we continue to preserve our rights and comply with all our contractual obligations under the ISA system.

While the ISA does not have jurisdiction over activities conducted under the regulatory authority of the United States, we maintain two ISA exploration contracts in the CCZ, one held by our subsidiary Nauru Ocean Resources Inc., or NORI, sponsored by the Republic of Nauru (“Nauru”), and one held by Tonga Offshore Mining Limited, or TOML, sponsored by the Kingdom of Tonga (“Tonga”).

The ISA has issued a total of 19 exploration contracts covering approximately 1.28 million square kilometers, 17 of which are located in the CCZ.

Currently, we are increasingly focused on pursuing commercial production through the U.S.

We are increasingly focused on pursuing commercial production through the U.S.

regulatory pathway under DSHMRA, following the April 2025 submission of TMC USA’s exploration license and commercial recovery permit applications to NOAA.

We do not believe pursuing licenses and permits with NOAA under DSHMRA affects our ISA exploration contracts.

We have key strategic partnerships with (i) Allseas, a leading global offshore contractor, which developed and tested a pilot collection system, and is now working to modify it into the first commercial production system, (ii) Pacific Metals Co.

(“PAMCO”), an experienced Japanese ferronickel producer, which is responsible for pre-feasibility and feasibility studies on nodule processing, and (iii) Glencore International AG (“Glencore”) which holds offtake rights to 50% of the NORI nickel and copper production if produced from the our subsidiary DeepGreen Engineering Pte Ltd.

(“DGE”) owned or controlled facility.

We believe that the pursuit of licenses and permits with NOAA under DSHMRA by TMC USA should not adversely affect the ISA exploration contracts held by NORI and TOML.

We have key strategic partnerships with (i) Allseas, a leading global offshore engineering contractor, which developed and tested a pilot collection system, and is now working to modify it into the first commercial production system, (ii) Pacific Metals Co.

(“PAMCO”), an experienced Japanese ferronickel producer, which is responsible for pre-feasibility and feasibility studies on nodule processing, (iii) Korea Zinc, a world leader in non-ferrous metal refining and precursor Cathode Active Material technology, partnering to advance development in the U.S.

and (iv) Glencore International AG (“Glencore”) which holds offtake rights to 50% of the NORI nickel and copper production if produced from the our subsidiary DeepGreen Engineering Pte Ltd.’s (“DGE”) owned or controlled facility.

In addition, we have worked with engineering firm Hatch Ltd.

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(i) define our resource and project economics, (ii) develop a commercial offshore nodule collection system, (iii) assess the environmental and social impacts of offshore nodule collection, and (iv) develop onshore technology to process collected polymetallic nodules into a manganese silicate product, and an intermediate nickel-copper-cobalt alloy or matte product and/or end-products like nickel and cobalt sulfates, and copper cathode.

Developments in the Second Quarter 2025

Below are some of the major developments that occurred in the second quarter of 2025:

TMC USA Submits Application for Commercial Recovery of Deep-Sea Minerals Under U.S.

Seabed Mining Code

On April 29, 2025, we announced that TMC USA had submitted the first-ever application for a commercial recovery permit and two exploration licenses under the Deep Seabed Hard Mineral Resources Act of 1980 (DSHMRA), advancing the Company’s timeline ahead of its original June 27, 2025 ISA application target.

The application area for the commercial recovery permit, TMC USA-A_2, covers a total combined area of 25,160 square kilometers in the CCZ which includes areas that contain the Company’s already indicated and measured resources.

TMC USA also submitted two exploration license applications:

TMC USA-A and TMC USA-B with a total combined area of 187,017 square kilometers.

The Company believes the TMC USA-A and USA-B exploration areas contain SEC SK 1300-compliant resources of 1.635 billion wet tonnes of polymetallic nodules supported by existing issued technical report summaries, with an additional estimated 300 million tonnes of potential exploration upside.

The resources are estimated to contain approximately 15.5 million tonnes of nickel, 12.8 million tonnes of copper, 2.0 million tonnes of cobalt, and 345 million tonnes of manganese.

TMC Welcomes U.S.

Executive Order to Expedite Permitting and Evaluate Offtake of Critical Minerals from Nodules in the High Seas

On April 25, 2025, we welcomed an Executive Order signed by President Trump to create a robust domestic supply for critical minerals derived from seabed resources.

The Executive Order, ‘Unleashing America’s Offshore Critical Minerals and Resources’, directs the Commerce Secretary to implement an expedited permitting process under the DSHMRA, a statute passed by Congress in 1980.

In addition to directing the International Development Finance Corporation, Export-Import Bank and Trade and Development Agency to identify tools to support this new industry, the order instructs the Departments of Defense and Energy to assess the use of the National Defense Stockpile for nodule-derived minerals and entering into offtake agreements for the procurement of these minerals.

These departments are also directed to review and revise domestic processing capabilities for seabed mineral resources and Defense Production Act authorities.

The executive order also issued a directive for a joint assessment, led by the Secretaries of Commerce, State, Interior, and Energy in coordination with U.S.

partners and allies, on the feasibility of an international seabed benefit-sharing mechanism.

NOAA Confirms Substantial Compliance for TMC USA’s Exploration License Applications

On May 29, 2025, the U.S.

National Oceanic and Atmospheric Administration confirmed substantial compliance for TMC USA’s exploration license applications over the USA-A and USA-B exploration areas.

The confirmation secures TMC USA’s priority over these areas, including its commercial recovery permit application.

TMC Announces Registered Direct Offering for $37 million

On May 12, 2025, we entered into a securities purchase agreement with certain new and existing investors, including an existing strategic investor, for the sale of an aggregate of 12,333,333 common shares (the “Shares”) and accompanying Class C warrants (the “Class C Warrants”), in a registered direct offering.

The offering price was $3.00 per Share, resulting in gross proceeds of $37.0 million ($36.75 million after associated fees), with each Share including an accompanying Class C Warrant to purchase one common share.

The Class C Warrants are exercisable immediately upon issuance at a price of $4.50 per share and expire three years from issuance.

The Class C Warrants include customary anti-dilution protections and a repurchase feature, permitting the Company to repurchase the warrants for $0.0001 per Common Share underlying the Class C Warrants if the volume-weighted average price of the Company’s common shares exceeds $7.00 per share for each trading day in a consecutive 20-trading-day period.

TMC and Nauru Announce Updated Sponsorship Agreement for Nauru Ocean Resources Inc.

On June 4, 2025, we and the Government of the Republic of Nauru jointly announced the signing of a revised Sponsorship Agreement (Agreement), updating the terms of the Agreement signed between the parties in 2017.

The Agreement guarantees that the Republic of Nauru will continue to receive existing financial benefits, training and capacity building programs and in-country community and social programs it receives today, while ensuring that, in consideration for its continued sponsorship of Nauru Ocean Resources Inc (“NORI”), Nauru will receive continuity benefits upon the commencement of commercial production by any subsidiary of TMC, other than NORI, under the U.S.

regulatory regime.

Strategic Investment from Korea Zinc — a World-Leader in Non-Ferrous Metal Refining and pCAM Technology

On June 16, 2025, we announced that Korea Zinc Company Ltd.

(“Korea Zinc”), a world leader in non-ferrous metal refining and precursor Cathode Active Material (pCAM) technology, had agreed to make a strategic investment of approximately $85.2 million in us through the purchase of common shares and warrants in a private placement.

Under the terms of the agreement, Korea Zinc purchased 19.6 million common shares at the last market closing price of $4.34 per share and received a three-year warrant to purchase 6.9 million common shares (0.35 warrant shares for every 1 initial common share for no additional consideration) with an exercise price of $7.00 per share, subject to call exercise provisions at our option should our common shares trade above $10.00 for 20 consecutive days.

Upon closing on June 26, 2025, Korea Zinc became one of our largest strategic shareholders with ownership of approximately 5% of the Company’s outstanding common shares.

As part of this investment, in July 2025, Yun B.

Choi, the Chief Executive Officer of Korea Zinc became a non-voting observer to our board of directors.

Appointment of Michael Hess and Alex Spiro to our Board of Directors

On June 16, 2025, we announced the appointment of Michael Hess and Alex Spiro to our Board of Directors strengthening TMC’s Board as we execute on our U.S.

strategy and accelerate progress toward commercial recovery of polymetallic nodules in international waters under the existing U.S.

seabed mining code.

Michael brings deep operational and investment experience in the U.S.

energy sector, along with a strong network and strategic perspective that will support our path toward commercial operations under U.S.

Alex adds significant legal and capital markets expertise, and his counsel is already proving valuable as we work closely with NOAA and engage with the new Administration to advance our application.

Developments Subsequent to June 30, 2025

Developments in the Third Quarter 2025

Below are some of the major developments that occurred in the third quarter of 2025:

Publication of Technical Reports Prepared under Subpart 1300 of Regulation S-K

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and other qualified persons relating to its polymetallic nodule projects in the Clarion Clipperton Zone of the Pacific Ocean.

The NORI TRS covers NORI Area D where the Company is applying for an exploration license and commercial permit under DSHMRA and was filed as Exhibit 96.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 4, 2025 (the “August Form 8-K”).

The NORI TRS covers NORI Area D for which the Company has applied for an exploration license and a commercial recovery permit under DSHMRA and was filed as Exhibit 96.1 to the Company’s Current Report on Form 8-K filed with the SEC on August 4, 2025 (the “August Form 8-K”).

The NORI and TOML Initial Assessment covers the remaining NORI and TOML areas where the Company is applying for an exploration license under DSHMRA and was filed as Exhibit 96.2 to the August 4, 2025 Form 8-K.

TMC and Tonga Announce Updated Sponsorship Agreement for Tonga Offshore Mining Ltd.

On August 4, 2025, we and the Government of the Kingdom of Tonga jointly announced the signing of a revised Sponsorship Agreement (Agreement), updating the terms of the Agreement signed between the parties in 2021.

The Agreement guarantees that the Kingdom of Tonga will continue to receive existing financial benefits, training and capacity building programs and in-country community and social programs it receives today, while ensuring that, in consideration for its continued sponsorship of Tonga Offshore Mining Limited (“TOML”), the Kingdom of Tonga will receive continuity benefits upon the commencement of commercial production by any subsidiary of TMC, other than TOML, under the U.S.

On August 4, 2025, the Company and the Government of the Kingdom of Tonga jointly announced the signing of a revised Sponsorship Agreement (Agreement), updating the terms of the Agreement signed between the parties in 2021.

The Agreement guarantees that the Kingdom of Tonga will continue to receive existing financial benefits, training and capacity building programs and in-country community and social programs it receives today, while ensuring that, in consideration for its continued sponsorship of TOML, the Kingdom of Tonga will receive continuity benefits upon the commencement of commercial production by any subsidiary of TMC, other than TOML, under the U.S.

regulatory regime.

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On August 11, 2025, TMC USA received notice of full compliance from NOAA on its exploration applications, and confirmation that TMC USA has priority right over both exploration areas.

Both applications entered the certification stage in late July, which we expect to be approximately 100 days.

The news follows earlier determinations of substantial compliance in May 2025, demonstrating a systematic regulatory process under DSHMRA as the Company targets a fourth quarter 2027 production start

Regulatory Updates

This notice follows earlier determinations of substantial compliance in May 2025.

The Company currently anticipates a potential production start in the fourth quarter of 2027, subject to required regulatory approvals.

Developments Subsequent to September 30, 2025

TMC Pioneers Process to Produce High-Purity Manganese Sulfate from Seafloor Nodules

In November 2025, we announced that we had successfully produced battery-grade, high-purity manganese sulfate from our nodule-derived intermediate manganese silicate product during bench scale trials at our partner KPM’s operating facility in Ontario.

North America is largely reliant on foreign sources of manganese.

As the planet's largest source of manganese, nodules hold significant potential to supply a range of key industries from steelmaking and infrastructure to energy, defense and automotive manufacturing, with automakers increasingly turning toward manganese-rich cathode chemistries for their next-generation electric vehicles.

Regulation of Mining of Deep-Sea Polymetallic Nodules by the United States

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commercial interests in seabed minerals while minimizing environmental and diplomatic risk.

TMC’s wholly owned subsidiary, TMC USA, a US-registered company established in 2013, has submitted three applications to NOAA:

two for exploration licenses and one for a commercial recovery permit.

Exploration licenses under DSHMRA grant exclusive rights to conduct technical studies in a defined area and are issued for ten-year terms.

We believe NOAA has historically adopted a cautious and science-based regulatory posture under DSHMRA, coordinating with other U.S.

federal agencies and supporting environmental studies to inform future decisions.

In the 1980s and 1990s, the United States entered into reciprocal recognition arrangements with other nations with similar domestic seabed mining laws, helping avoid overlapping claims prior to the establishment of the ISA.

Once the ISA became operational in the 1990s, most reciprocating states transitioned to the UNCLOS/ISA system.

The United States, however, remains outside that framework.

NOAA is not restricted under DSHMRA from issuing licenses or permits over areas that are also subject to ISA exploration or exploitation contracts.

Exploration licenses under DSHMRA grant exclusive rights to conduct technical studies in a defined area and are issued for ten-year terms, subject to extension.

Commercial recovery permits authorize full-scale extraction for a period of 20 years subject to extension and are subject to enhanced environmental and operational requirements.

To date, NOAA has issued exploration licenses over four areas, of which two are active, however it has not issued any commercial recovery permits under DSHMRA as no U.S.

To date, NOAA has issued exploration licenses over four areas.

Two of these licenses (USA-1 and USA-4) remain active and are currently held by Lockheed Martin.

These licenses have been renewed until 2027 in accordance with DSHMRA’s statutory provisions, which require NOAA to grant extensions if the licensee has substantially complied with license terms.

NOAA has not issued any commercial recovery permits under DSHMRA as no U.S.

citizen had applied for a commercial recovery permit prior to TMC USA.

TMC’s wholly owned subsidiary, TMC USA, a US-registered company established in 2013, has submitted three applications to NOAA:

two for exploration licenses and one for a commercial recovery permit.

TMC USA initiated pre-application consultations with NOAA in the first quarter of 2025 and, following those discussions, submitted its applications in April 2025.

These are now under agency review.

The NOAA review process includes a determination whether applications for exploration licenses are in full or substantial compliance with the applicable requirements under DSHMRA and its implementing regulations within 30 days of receipt and whether applications for a commercial recovery permit are complete within 60 days.

NOAA has notified the Company that its exploration license applications are in substantial compliance with the applicable requirements.

NOAA is then expected to proceed with a full review of the applications, including interagency consultation with other U.S.

government departments (including the Department of State, the Department of Defense, and the Environmental Protection Agency), preparation of an Environmental Impact Statement, or EIS, under NEPA, and a public comment period.

NOAA will determine whether to issue the requested licenses and permit, and if so, under what terms and conditions.

On May 28, 2025, NOAA determined that TMC USA’s two exploration license applications were in substantial compliance and confirmed TMC USA has priority of right over both exploration application areas.

On July 27, 2025, TMC USA submitted amended exploration applications with additional information requested by NOAA.

NOAA confirmed that both exploration license applications were fully compliant, and it had begun its certification process.

The certification process includes an interagency consultation with other U.S.

government departments (including the Department of State, the Department of Defense, and the Environmental Protection Agency).

Following certification, an Environmental Impact Statement, or EIS, is expected to be prepared under NEPA, and a public comment period will be provided.

Following the public comment period, NOAA will determine whether to issue the requested licenses and permit, and if so, under what terms and conditions.

All licenses and permits issued under DSHMRA are subject to oversight, periodic reporting, and potential suspension or revocation for noncompliance or unforeseen environmental harm.

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2025-12513 (90 Fed.

The proposed rule introduces a new consolidated application procedure under § 971.214, allowing applicants to submit a single application for both an exploration license and commercial recovery permit.

The proposed regulation introduces a new consolidated application procedure under § 971.214, allowing applicants to submit a single application for both an exploration license and commercial recovery permit.

The revisions also include updated electronic submission requirements, restructured environmental review protocols, revised fee schedules, and clarified procedures for interagency consultation and public disclosure.

These changes are intended to modernize and streamline the DSHMRA permitting process.

The proposed rule remains subject to public comment until September 5, 2025.

DSHMRA and its regulations do not include a statutory deadline for application review.

These changes are intended to modernize and streamline the permitting process under DSHMRA implementing regulations.

Public comment period closed on September 5, 2025 and public comments are now under consideration by NOAA.

DSHMRA and its implementing regulations do not include a statutory deadline for application review.

However, the Executive Order signed by President Trump on April 24, 2025, directs the Commerce Secretary to implement an expedited permitting process under DSHMRA.

NOAA issued four exploration licenses in 1984 to U.S.-sponsored consortia for polymetallic nodule exploration in the CCZ.

Two of these licenses (USA-1 and USA-4) remain active and are currently held by Lockheed Martin.

These licenses have been renewed until 2027 in accordance with DSHMRA’s statutory provisions, which require NOAA to grant extensions if the licensee has substantially complied with license terms.

We believe NOAA has historically adopted a cautious and science-based regulatory posture under DSHMRA, coordinating with other U.S.

federal agencies and supporting environmental studies to inform future decisions.

Once the ISA became operational in the 1990s, most reciprocating states transitioned to the UNCLOS/ISA system.

The United States, however, remains outside that framework.

NOAA is not restricted under DSHMRA from issuing licenses or permits over areas that are also subject to ISA exploration or exploitation contracts.

In addition, DSHMRA requires that all mining vessels and at least one transport vessel are U.S.

DSHMRA requires that all mining vessels and at least one transport vessel are U.S.

TMC USA will ensure all vessels contracted for commercial recovery comply with relevant laws pertaining to vessel standards and crew safety.

DSHMRA also requires that recovered minerals be processed in the United States unless a waiver is granted, in which case the permittee is required to provide assurances that processed materials are returned to the United States.

We are currently evaluating U.S.-based vessel and processing options to satisfy this requirement as well as working with Japan and South Korea-based supply chain to ensure processed materials can be returned to the United States in case the permit to process outside the United States is granted for an initial period.

We are currently evaluating U.S.-based vessel and processing options to satisfy this requirement as well as working with Japan and South Korea-based supply chain to ensure processed materials can be returned to the United States in the event the permit to process outside the United States is granted for an initial period.

If necessary, we expect to seek a waiver based on the statutory criteria and applicable regulations.

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laws and regulations as development progresses and are in the early stages of analyzing their applicability and potential impact on our operations.

On May 28, 2025, the National Oceanic and Atmospheric Administration (NOAA) determined that TMC USA’s two exploration license applications were in substantial compliance and confirmed TMC USA has priority of right over both exploration application areas.

On July 27, 2025, TMC USA submitted amended exploration applications with additional information requested by NOAA.

NOAA confirmed that both exploration license applications were fully compliant and it had begun its certification process.

Existing ISA Exploration Contracts

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The D block of the NORI area (“NORI Area D”) is the seafloor parcel where we have performed the most resource definition and environmental work to date.

NORI commissioned AMC Consulting Ltd (“AMC”), a leading mining consulting firm, to undertake an Initial Economic Assessment of the mineral resource contained in NORI Area D and to compile a technical report compliant with Canadian National Instrument (NI 43-101), which was completed in March 2021.

AMC subsequently compiled the NORI Technical Report Summary, dated March 2021, which included an initial assessment and an economic analysis of NORI Area D prepared in accordance with the SEC’s Modernization of Property Disclosures for Mining Registrants set forth in subpart 1300 of Regulation S-K (the “SEC Mining Rules”).

On August 4, 2025 a pre-feasibility study, summarized in the technical report entitled “ S-K 1300 NORI Area D Technical Report ” (the “NORI TRS”), and a technical report entitled “ Technical Report Summary—Initial Assessment of TOML and NORI Properties, Clarion-Clipperton Zone ”, dated August 4, 2025 (the “NORI AND TOML Initial Assessment” together with the TRS, the “Technical Reports”) prepared by AMC Consultants Pty Ltd.

and other qualified persons, each a “qualified person” as defined in subpart 1300 of Regulation S-K.

were released.

TOML, our wholly-owned subsidiary which we acquired in March 2020, holds exploration rights to an area covering 74,713 square kilometers in the CCZ that were granted by the ISA in January 2012 (the “TOML Contract Area”).

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The sponsorship agreement was updated on August 4, 2025.

TOML commissioned a Technical Report Summary by AMC, dated March 2021.

On August 4, 2025 the technical report entitled “ Technical Report Summary—Initial Assessment of TOML and NORI Properties, Clarion-Clipperton Zone ”, dated August 4, 2025 (the “NORI AND TOML Initial Assessment” together with the TRS, the “Technical Reports”), prepared by AMC Consultants Pty Ltd.

and other qualified persons, each a “qualified person” as defined in subpart 1300 of Regulation S-K was released.

Key Trends, Opportunities and Uncertainties

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We believe that our performance and future success pose risks and challenges, including those related to the approval of an application for a commercial recovery permit, development of environmental terms, conditions and restrictions associated with our application and development of our technologies to collect and process polymetallic nodules.

The timing of NOAA’s review and decision on our exploration license and commercial recovery permit applications under DSHMRA remains uncertain and is outside the Company’s control.

Actual timelines for certification, environmental review, and potential issuance of licenses or permits may differ materially from management’s expectations.

These risks, as well as other risks, are discussed in the section entitled “ Risk Factors ” in Item 1A of Part I of the 2024 Annual Report on Form 10-K, as further updated and/or supplemented in subsequent filings with the SEC.

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Components of Results of Operations

We are an exploration-stage company with no revenue to date and a net loss of $74.3 million and $94.9 million for three and six months ended June 30, 2025, respectively, compared to a net loss of $20.2 million and $45.4 million in the same period of 2024, respectively.

We have an accumulated deficit of approximately $726.4 million from inception through June 30, 2025.

We are an exploration and development company with no revenue to date and a net loss after tax of $184.5 million and $279.4 million for three and nine months ended September 30, 2025, respectively, compared to a net loss of $20.5 million and $65.9 million in the same periods of 2024, respectively.

We have an accumulated deficit of approximately $910.9 million from inception through September 30, 2025.

Our historical results may not be indicative of our future results for reasons that may be difficult to anticipate.

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We recognize forfeiture of any awards as they occur.

Nauru Warrant cost

The Nauru Warrant cost represents the fair value of the warrants issued as part of the revised sponsorship agreement with the Government of the Republic of Nauru signed on May 29, 2025.

Nauru and Tonga Warrant costs

The Nauru and Tonga Warrant costs represent the fair value of the warrants issued as part of the revised sponsorship agreement with the Government of the Republic of Nauru signed on May 29, 2025 and the revised sponsorship agreement with the Tonga Seabed Minerals Authority signed on August 4, 2025.

As the warrants did not contain complex features, the fair value was calculated using a Black-Scholes valuation model.

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Results of Operations

The following is a discussion of our results of operations for the three and six months ended June 30, 2025 and 2024.

The following is a discussion of our results of operations for the three and nine months ended September 30, 2025 and 2024.

Our accounting policies are described in Note 3 “Significant Accounting Policies” in our financial statements filed as part of the 2024 Annual Report on Form 10-K.

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

For the Three Months Ended

For the Six months ended

For the Nine Months Ended

(Dollar amounts in thousands, except as noted)

September 30,

Exploration and evaluation expenses

General and administrative expenses

Nauru Warrant cost

Nauru and Tonga Warrant costs

Equity-accounted investment loss (income)

Gain on dilution of investment

Change in fair value of royalty liability

Change in fair value of warrants liability

Foreign exchange loss (gain)

Foreign exchange loss

Interest income

Fees and interest on borrowings and credit facilities

Net Loss for the period

Three Months ended June 30, 2025 compared to Three Months ended June 30, 2024

We reported a net loss of approximately $74.3 million in the second quarter of 2025, compared to a net loss of $20.2 million in the same period of 2024.

The following explains the major reasons for the increase in the net loss in the second quarter of 2025.

Net Loss for the period, before tax

Three Months ended September 30, 2025 compared to Three Months ended September 30, 2024

We reported a net loss before tax of approximately $184.4 million in the third quarter of 2025, compared to a net loss of $20.5 million in the same period of 2024.

The following explains the major reasons for the increase in the net loss in the third quarter of 2025.

During the quarter, results were primarily affected by non-cash and non-recurring items, including share-based compensation impacted by one-time grants, fair-value changes in the royalty and warrant liabilities, and the recognition of warrant costs associated with updated sponsorship agreements.

Exploration and Evaluation Expenses

Exploration and evaluation expenses for the three months ended June 30, 2025 were $10.5 million, compared to $12.4 million for the same period in 2024.

The decrease of $1.9 million is primarily due to a decrease in mining, technological and process development activities of $2.4 million compared to the same quarter of 2024, partially offset by an increase in share-based compensation of $0.2 million due to the amortization of the fair value of RSUs and options granted to officers in the second quarter of 2024.

Exploration and evaluation expenses for the three months ended September 30, 2025 were $9.6 million, compared to $11.8 million for the same period in 2024.

The decrease of $2.2 million is primarily due to a decrease in mining, technological and process development activities of $2.3 million compared to the same quarter of 2024, decrease of $0.7 million in environmental studies cost as campaign 8 was completed in 2024, partially offset by an increase in share-based compensation of $1 million due to the amortization of grants made in the third quarter of 2025.

General and Administrative Expenses

G&A expenses for the three months ended June 30, 2025 were $11.5 million compared to $7.9 million for the same period in 2024.

The increase of $3.6 million in G&A expenses was mainly the result of an increase in share-based compensation of $1 million due to the amortization of the fair value of RSUs and options granted to the directors and officers in the second quarter of 2024, an increase of $2 million in consulting costs to pursue the U.S.

regulatory route and financing activities.

Nauru Warrant cost

As part of the signing of a revised Sponsorship Agreement with the Government of the Republic of Nauru on May 29, 2025, we issued 9,146,268 warrants to the Republic to purchase common shares of the Company.

The fair value of the Nauru Warrants, calculated using a Black-Scholes valuation model, valued each warrant at $3.62 for a total value of $33.1 million.

For further details on this non-recurring item, refer to Note 12 in the Company’s second quarter 2025 interim financial statements.

Change in F air V alue of W arrants L iability

The increase in the fair value of the 9,500,000 Private Warrants liability in the three months ended June 30, 2025 of $16.2 million, results from the significant increase in the price of the Company’s shares and the price of our public warrants over this same period (284% and 568% respectively).

Refer to Note 12 in the Company’s second quarter 2025 interim financial statements for further details on this non-operating, non-cash increase.

G&A expenses for the three months ended September 30, 2025 were $45.7 million compared to $8.1 million for the same period in 2024.

The increase of $37.6 million in G&A expenses was mainly the result of an increase in share-based compensation of $35 million from the amortization of the fair value of retention grants and RSUs and options granted to directors and consultants in the third quarter of 2025 (a non-cash item), an increase of $2 million in professional and consulting fees mainly relating to the Company pursuing the U.S.

regulatory route and financing activities, an increase of consulting fees as the Company became a large accelerated filer in the third quarter of 2025 and an increase in the legal costs.

Tonga Warrant costs

As part of the signing of a revised Sponsorship Agreement with the Tonga Seabed Minerals Authority (the “State”) on August 4, 2025, we issued 1,000,000 warrants to the State to purchase common shares of the Company.

The fair value of the Tonga Warrants, calculated using a Black-Scholes valuation model, valued each warrant at $5 for a total value of $5 million.

For further details on this non-recurring item, refer to Note 13 in the Company’s third quarter 2025 interim financial statements.

Gain on Dilution of Investment

During the three months ended September 30, 2025, Low Carbon Royalties issued 2,139,770 common shares through a private placement, raising $10.7 million of gross proceeds.

The Company did not participate in the offering, which reduced its ownership interest from 32.27% to 30.73% (December 31, 2024:

As the shares were issued at a price higher than the Low Carbon Royalties book value per share, the Company recorded a dilution gain of $3 million.

Change in Fair Value of Royalty Liability

The fair value of the royalty liability as at September 30, 2025 was valued using a market approach for NORI Areas A to C (valued at $15 million), while for Area D an income approach was used following the Company’s filing of its Pre-Feasibility Study (PFS) on its NORI Area D project in August 2025 (valued at $130 million).

The resulting royalty liability fair value of NORI Areas A to D totaled $145 million, an increase of $131 million in the third quarter of 2025 (refer to Note 7 in the Company’s third quarter 2025 interim financial statements in Item 1 for further details on this non-operating, non-cash increase).

Change in Fair Value of Warrants Liability

The fair value of the 9,500,000 Private Warrants liability at September 30, 2025 of $13.7 million, represents a decrease of $3.9 million in the third quarter 2025, results from the decrease in the price of the Company’s shares and the price of our public warrants over this same period (-3% and -29% respectively).

Refer to Note 13 in the Company’s third quarter 2025 interim financial statements for further details on this non-operating, non-cash increase.

Fees and Interest on Borrowings and Credit Facilities

The interest charged on the Company’s short-term debt borrowings was $0.1 million in the second quarter of 2025 ($nil for the same period of 2024), while interest on drawn amounts on the Company’s credit facilities was $0.1 million and underutilization fees on these same facilities was $0.6 million in the second quarter of 2025 ($0.1 and $0.4 million over the same periods in 2024, respectively).

Six Months ended June 30, 2025 compared to Six Months ended June 30, 2024

We reported a net loss of $94.9 million in the first half of 2025, compared to a net loss of $45.4 million in the same period of 2024.

The following explains the major reasons for the increase in the net loss in the first half of 2025.

During the third quarter of 2025, underutilization fees on the Company’s credit facilities was $0.7 million, while interest on drawn amounts on the same facilities was $nil ($0.5 and $0.1 million over the same period in 2024, respectively).

Nine Months ended September 30, 2025 compared to Nine Months ended September 30, 2024

We reported a net loss before tax of $279.3 million in the first nine months of 2025, compared to a net loss of $65.9 million in the same period of 2024.

The following explains the major reasons for the increase in the net loss in the first nine months of 2025.

Exploration and Evaluation Expenses

Exploration and evaluation expenses for the six months ended June 30, 2025 were $20.0 million, compared to $30.5 million for the same period in 2024.

The decrease of $10.5 million was primarily due to an decrease of $11 million in mining, technological and process development cost and a decrease of $1.2 million incurred on environmental studies as the costs incurred in the first six months of 2024 were higher on account of transit costs of the Allseas vessel in the first quarter of 2024, transportation of nodules to PAMCO’s facility in Japan and due to Campaign 8 which was completed in the first quarter of 2024, offset by increase in share-based compensation of $1.2 million due to amortization of the fair value of RSUs and options granted to the officers in the second quarter of 2024.

Exploration and evaluation expenses for the nine months ended September 30, 2025 were $29.6 million, compared to $42.3 million for the same period in 2024.

The decrease of $12.7 million was primarily due to a decrease of $13 million in mining, technological and process development cost due to costs incurred in 2024 for Campaign 8 resource definition work, Allseas vessel transit cost and transportation of nodules to PAMCO’s facility in Japan, a decrease of $1 million incurred on environmental studies due to Campaign 8 which was completed in the first quarter of 2024, decrease in ISA permitting application cost in 2025, partially offset by an increase in share-based compensation of $2.2 million on the amortization of the fair value of grants made in the third quarter of 2025 and RSUs and options granted to officers in the first quarter of 2025.

General and Administrative Expenses

G&A expenses for the six months ended June 30, 2025 were $19.9 million, compared to $14.5 million for the same period in 2024.

The increase of $5.4 million in G&A expenses in the first half of 2025 was mainly the result of an increase in share-based compensation of $3.2 million due to amortization of the fair value of RSUs and options granted to the directors and officers in the second quarter of 2024, an increase in consulting cost of $1.5 million to pursue the U.S.

regulatory route, and higher cost incurred on legal, and advisory activities.

Nauru Warrant cost

G&A expenses for the nine months ended September 30, 2025 were $65.7 million, compared to $22.6 million for the same period in 2024.

The increase of $43.1 million in G&A expenses in the first nine months of 2025 was mainly the result of an increase in share-based compensation of $38 million due to the amortization of the fair value of retention grants, RSUs and options granted to directors and consultants in the third quarter of 2025, an increase of $4.8 million in professional and consulting fees mainly related to the Company pursuing the U.S.

regulatory route, and higher costs incurred on legal, financing and advisory activities.

Nauru and Tonga Warrant costs

The fair value of the Nauru Warrants, calculated using a Black-Scholes valuation model, valued each warrant at $3.62 for a total value of $33.1 million.

For further details on this non-recurring item, refer to Note 12 in the Company’s second quarter 2025 interim financial statements.

Change in F air V alue of W arrants L iability

The significant increase in the fair value of the 9,500,000 Private Warrants liability in the first half of 2025 of $16.7 million, results from the significant increase in the price of the Company’s shares and the price of our public warrants, mainly over the second quarter of 2025.

Refer to Note 12 in the Company’s second quarter 2025 interim financial statements for further details on this non-operating, non-cash increase.

The fair value of the Tonga Warrants, calculated using a Black-Scholes valuation model, valued each warrant at $5 for a total value of $5 million.

For further details on this non-recurring item, refer to Note 13 in the Company’s third quarter 2025 interim financial statements.

Gain on Dilution of Investment

During the nine months ended September 30, 2025, Low Carbon Royalties issued 2,139,770 common shares through a private placement, raising $10.7 million of gross proceeds.

The Company did not participate in the offering, which reduced its ownership interest from 32.27% to 30.73% (December 31, 2024:

As the shares were issued at a price higher than the Low Carbon Royalties book value per share, the Company recorded a dilution gain of $3 million.

Change in Fair Value of Royalty Liability

The fair value of the royalty liability as at September 30, 2025 was valued using a market approach for NORI Areas A to C, while for Area D an income approach was used following the Company’s filing of its Pre-Feasibility Study (PFS) on its NORI Area D project in August 2025.

The resulting royalty liability fair value of NORI Areas A to D totaled $145 million, an increase of $131 million in the first nine months of 2025.

Change in Fair Value of Warrants Liability

The significant increase in the fair value of the 9,500,000 Private Warrants liability in the first nine months of 2025 of $12.8 million, results from the significant increase in the price of the Company’s shares and the price of our public warrants, mainly over the second quarter of 2025.

Refer to Note 13 in the Company’s third quarter 2025 interim financial statements for further details on this non-operating, non-cash increase.

Fees and Interest on Borrowings and Credit Facilities

For the nine months ended September 2025, underutilization fees on the Company’s credit facilities were $2.1 million, while interest on drawn amounts on the same facilities was $0.4 million (2024:

$1.2 million as underutilization fees, $0.1 million as interest on credit facilities and $0.1 million as interest on short term debt).

Overall Summary of Quarterly Results

During the quarter, results were primarily affected by non-cash and non-recurring items, as explained above.

Following the completion of recent financings, the Company’s cash position has been strengthened, and management believes available liquidity is sufficient to support near-term operating and permitting activities for at least the next twelve months.

There were no material changes to the Company’s previously disclosed risk factors.

Management remains focused on maintaining strong internal controls and continuing remediation efforts identified through ongoing SOX readiness work.

Liquidity and Capital Resources

Our primary sources of financing have come from private placements and public offerings of Common Shares and warrants, the issuance of convertible debentures and from credit facilities.

As of June 30, 2025, we had cash on hand of $115.8 million.

In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for a commercial recovery permit contract for the TMC USA-A area, and by negotiating the settlement of program expenditures with our equity whenever possible.

We have yet to generate any revenue from our business operations.

We are an exploration-stage company and the recovery of our investment in mineral exploration contracts and attainment of profitable operations is dependent upon many factors including, among other things, the development of commercial production system for collecting polymetallic nodules from the seafloor as well as the development of our processing technology for the metallurgical treatment of such nodules, the establishment of mineable reserves, the demonstration of commercial and technical feasibility of seafloor polymetallic nodule collection and processing systems, metal prices, and securing US exploration licenses and a commercial recovery permit and ISA exploitation contracts or provisional approvals.

While we have obtained financing in the past, there is no assurance that such financing will continue to be available on favorable terms, in sufficient amounts, or at all.

We expect to incur significant expenses and operating losses for the foreseeable future, as we advance our application to NOAA for exploration licenses and a commercial recovery permit and preparation for potential commercialization.

As of September 30, 2025, we had cash on hand of $115.6 million.

Based on our current cash balance, when compared with our forecasted cash expenditures, we believe we will have sufficient funds to meet our obligations that become due within the next twelve months.

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If these financing or other financing sources are not available, or if the terms of financing are less desirable than we expect, or if in insufficient amounts, we may be forced to delay our exploration and/or exploitation activities or further scale back our operations, which could have a material adverse impact on our business and financial prospects.

We have yet to generate any revenue from our business operations.

We are an exploration and development company and the recovery of our investment in mineral exploration contracts and attainment of profitable operations is dependent upon many factors including, among other things, the development of commercial production system for collecting polymetallic nodules from the seafloor as well as the development of our processing technology for the metallurgical treatment of such nodules, the establishment of mineable reserves, the demonstration of commercial and technical feasibility of seafloor polymetallic nodule collection and processing systems, metal prices, and securing US exploration licenses and a commercial recovery permit and ISA exploitation contracts or provisional approvals.

While we have obtained financing in the past, there is no assurance that such financing will continue to be available on favorable terms, in sufficient amounts, or at all.

On September 16, 2022, we filed a registration statement on Form S-3 with the SEC, which the SEC declared effective on October 14, 2022, to sell up to $100 million of securities.

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In 2024 we sold 3,251,590 Common Shares for gross proceeds of $4.9 million under this offering.

In the three and six months ended June 30, 2025, we issued 4,567,770 and 7,542,996 common shares, respectively, at an average share price of $2.08 and $2.02, for net proceeds of $9.2 million and $14.8 million respectively.

As of the date of this Quarterly Report, $9.8 million remains available for sale under the Sales Agreement.

In the three and nine months ended September 30, 2025, we issued nil and 7,542,996 Common Shares.

During the nine months ended September 30, 2025, the Common Shares were issued at an average share price of $2.02, for net proceeds of $14.8 million.

The Sales Agreement expired in October 2025.

On March 22, 2023, we entered into the 2023 Credit Facility with Argentum Cedit Virtuti GCV, the parent of Allseas Investments S.A.

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For the Three Months Ended

For the Six months ended

For the Nine Months Ended

September 30,

Net cash used in operating activities

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Increase (Decrease) in cash

Six Months ended June 30, 2025 compared to Six Months ended June 30, 2024

Nine Months ended September 30, 2025 compared to Nine Months ended September 30, 2024

Cash flows used in Operating Activities

For the six months ended June 30, 2025, major operating activities over this period included advanced work on pre-feasibility studies and work to advance our permit applications, resulting in net cash used in operating activities of $20 million.

This consisted of $5.4 million on payroll costs, $4.9 million on various environmental work, $2.1 million on stakeholder engagement, $2.1 million on legal and consulting fees, $2 million on business development, investor relations and communications, $1.7 on interest paid on 2024 credit facilities and working capital loan, and $1.8 million for various expenses.

For the six months ended June 30, 2024, major operating activities over this period involved Campaign 8, as well as advanced work on engineering and pre-feasibility studies as we advance towards our application to the ISA for an exploitation contract and prepare for potential future commercial production.

Net cash used in operating activities in the first half of 2024, amounted to $23.9 million, and consisted mainly of $12.1 million on various environmental work, $3.6 million on personnel costs, $2.8 million on legal, advisory and consulting, $1.5 million for sponsorship, training and stakeholder engagement support, $1.8 million spent on engineering and pre-feasibility studies, $1.1 million on communication and business development expenses, and additional payments of $1 million for various expenses.

For the nine months ended September 30, 2025, major operating activities over this period included advanced work on pre-feasibility studies and work to advance our permit applications, resulting in net cash used in operating activities of $31.5 million.

This consisted of $8.3 million on payroll costs, $7.6 million on various environmental work, $3.8 million on legal and consulting fees, $3.1 million on stakeholder engagement, $3.0 million on interest and underutilization fees paid on the 2024 credit facilities and working capital loan, $2.6 million on business development, investor relations and communications, $1 million on mining technological and process development and $2.1 million for various expenses.

For the nine months ended September 30, 2024, major operating activities over this period involved Campaign 8, as well as advanced work on engineering and pre-feasibility studies as we advance towards our application to the ISA for a NORI exploitation contract and prepare for potential future commercial production.

Net cash used in operating activities in the first nine months of 2024, amounted to $29.7 million, and consisted mainly of $13.0 million on various environmental work, $6.1 million on personnel costs, $3.9 million on legal, advisory and consulting, $1.9 million for sponsorship, training and stakeholder engagement support, $1.7 million spent on engineering and pre-feasibility studies, $1.5 million on communication and business development expenses, and additional payments of $1.6 million for various expenses.

Cash flows used in Investing Activities

Net cash generated by investing activities for the six months ended June 30, 2025 was $0.2 million which included proceeds from the return of capital from Low Carbon Royalties offset by the purchase of equipment and software development.

Net cash generated by investing activities for the nine months ended September 30, 2025 was $0.2 million which included proceeds from the return of capital from Low Carbon Royalties offset by the purchase of equipment and software development.

In the comparative period of 2024, $0.5 million was spent on acquisition of equipment and software development.

Cash flows provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2025 was $132.1 million, which comprised of net cash proceeds received from the Korea Zinc investment of $85.2 million, net proceeds from the 2025 Registered Direct Offerings of $30.0 million, the remaining net proceeds from the 2024 Registered Direct Offerings of $4.5 million, proceeds from shares issued from ATM of $14.8 million and proceeds from exercise of stock options and warrants of $6.9 million.

Net cash provided by financing activities for the nine months ended September 30, 2025 was $143.5 million, which comprised of net cash proceeds received from the Korea Zinc investment of $85.2 million, net proceeds from the 2025 Registered Direct Offerings of $36.7 million, the remaining net proceeds from the 2024 Registered Direct Offerings of $4.5 million, proceeds from shares issued from ATM of $14.8 million and proceeds from the exercise of stock options and warrants of $14.0 million.

This increase was partially offset by repayments totaling $11.8 million on our credit facilities and on the Allseas Working Capital loan.

The first half results of 2024 represent the net proceeds from the 2024 Registered Direct Offerings of $8.9 million, proceeds from shares issued from ATM of $2.5 million, proceeds from the drawdown of our credit facilities and Allseas Debt Agreement of $5.9 million and proceeds from the exercise of stock options of $0.4 million.

The first nine months results of 2024 represent the net proceeds from the 2024 Registered Direct Offerings of $8.9 million, proceeds from shares issued from ATM of $4.9 million, proceeds from the drawdown of our credit facilities and Allseas Debt Agreement of $11.2 million and proceeds from the exercise of stock options of $0.4 million.

This increase was partially offset by the repayment on the Allseas Working Capital loan of $2 million.

Contractual Obligations and Commitments

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On July 5, 2017, Nauru, the Nauru Seabed Minerals Authority and NORI entered into the NORI Sponsorship Agreement formalizing certain obligations of the parties in relation to NORI’s exploration and potential exploitation of the NORI Area.

NORI is required to 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.

On May 29, 2025, NORI and the Government of Nauru entered into an updated sponsorship agreement that superseded the 2017 agreement and reaffirms the Government of Nauru’s sponsorship of NORI under the ISA regime.

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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.

The pilot nodule collection system developed and tested by Allseas is expected to be upgraded to a commercial system with an expanded targeted production capacity of up to an estimated 3.0 million tonnes of wet nodules per year, to be delivered in stepped increments.

NORI and Allseas intend to equally finance all costs related to developing and getting the first commercial system into production.

Once in production, NORI is expected to pay Allseas a nodule collection and transshipment fee and, as Allseas scales up production to up to an estimated 3.0 million wet tonnes of nodules per year, it is expected that unit costs will be reduced.

The pilot nodule collection system developed and tested by Allseas is expected to be upgraded to a commercial system, to be delivered in stepped increments.

TMC USA and Allseas intend to equally finance all costs related to developing and getting the first commercial system into production.

Once in production, NORI is expected to pay Allseas a nodule collection and transshipment fee.

Following the successful completion of the NORI Area D pilot collection system trials in November 2022 and subsequent analysis of pilot data, the parties are reviewing Project Zero Offshore Nodule Collection System production targets, system design and cost estimates and intend to enter into a binding Heads of Terms by the end of 2025.

The parties expect to further detail their relationship in three separate definitive agreements for engineering, conversion/build and commercial operations phase, respectively.

Subject to the necessary regulatory approvals, Allseas and NORI also intend to investigate acquiring a second production vessel similar to the Hidden Gem , another Samsung 10000, with the potential for an additional production rate of three million tonnes of wet nodules per year and lower associated per tonne production cost.

Subject to the necessary regulatory approvals, Allseas and TMC USA are investigating acquiring a second production vessel similar to the Hidden Gem .

There can be no assurances, however, that we will enter into definitive agreements with Allseas contemplated by the non-binding term sheet in a particular time period, or at all, or on terms similar to those set forth in the non-binding term sheet, or that if such definitive agreements are entered into by us that the proposed commercial systems and second production vessel will be successfully developed or operated in a particular time period, or at all.

Through June 30, 2025, we have made the following payments to Allseas under the PMTA:

Through September 30, 2025, we have made the following payments to Allseas under the PMTA:

(a) $10 million in cash in February 2020, (b) $10 million through the issuance of 3.2 million Common Shares valued at $3.11 per share in February 2020, (c) issued Allseas a warrant to purchase 11.6 million Common Shares at a nominal exercise price per share in March 2021, (d) $10 million in cash in October 2021, following the closing of the Business Combination and meeting certain progress targets on the PMTS and (e) on February 23, 2023 issued 10.85 million Common Shares to Allseas.

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On March 26, 2025, we entered into the Third Amendment to, among other things, increase the borrowing limit to $44 million in the aggregate ($22 million from each of the 2024 Lenders) and extend the maturity of the 2024 Credit Facility to June 30, 2026.

In the three months ended June 30, 2025, the Company incurred $58 thousand as interest expense and $0.7 million as underutilization fees.

During the second quarter of 2025, the Company repaid outstanding interest payable amounting to $0.1 million of outstanding underutilization fees amounting to $0.9 million.

In the three months ended September 30, 2025, the Company incurred $nil as interest expense and $0.7 million as underutilization fees.

During the third quarter of 2025, the Company repaid outstanding interest payable amounting to $0.1 million and outstanding underutilization fees amounting to $1.2 million.

Off-Balance Sheet Arrangements

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Cautionary Statements Regarding the NORI TRS and the NORI and TOML Initial Assessment]

Except where otherwise stated, the scientific and technical information set forth in this Quarterly Report on Form 10-Q relating to the area our subsidiary TMC-USA has applied for an exploration license and commercial permit under DSHMRA (which includes part of the area under which our subsidiary NORI holds an exploration contract issued by the ISA) (“NORI Area D”) and the area under which our subsidiary TMC-USA has applied for an additional exploration license under DSHMRA (which includes part of the area under which our subsidiary NORI holds an exploration contract issued by the ISA and includes the area under which our subsidiary TOML holds an exploration contract issued by the ISA) (the “NORI and TOML Properties”)) is based on technical reports prepared in accordance with the SEC rules set forth in subpart 1300 of Regulation S-K (the “SEC Mining Rules”).

Except where otherwise stated, the scientific and technical information set forth in this Quarterly Report on Form 10-Q relating to the area our subsidiary TMC-USA has applied for an exploration license and commercial recovery permit under DSHMRA (which includes part of the area under which our subsidiary NORI holds an exploration contract issued by the ISA) (“NORI Area D”) and the area under which our subsidiary TMC-USA has applied for an additional exploration license under DSHMRA (which includes part of the area under which our subsidiary NORI holds an exploration contract issued by the ISA and includes the area under which our subsidiary TOML holds an exploration contract issued by the ISA) (the “NORI and TOML Properties”)) is based on technical reports prepared in accordance with the SEC rules set forth in subpart 1300 of Regulation S-K (the “SEC Mining Rules”).

In respect of NORI Area D, the pre-feasibility study in the technical report entitled “ S-K 1300 NORI Area D Technical Report ”, dated August 4, 2025 (the “NORI TRS”) , prepared by AMC Consultants Pty Ltd.

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The pre-feasibility study included in the NORI TRS indicated that the development of NORI Area D is technically and economically viable.

The pre-feasibility study, however, does not represent a feasibility study and does not support a development decision and additional project planning and design are needed to make this decision.

The pre-feasibility study, however, does not represent a feasibility study and does not support a development decision, as additional project planning and design are needed to make this decision.

In addition, the initial assessment included in the NORI and TOML Initial Assessment Report is a conceptual study of the potential viability of mineral resources in the NORI and TOML Properties.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis