What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-27 compared with 2024-03-25 · 459 added, 449 removed, 724 unchanged (56% of the section changed)

13 unchanged sentences

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.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, 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, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

generally accepted accounting principles.

24 unchanged sentences

Accounts payable and accrued liabilities

Short-term debt

Deferred tax liability

4 unchanged sentences

340,708,460 (December 31, 2023 – 306,558,710 ))

Special Shares

Class A - J Special Shares

Additional paid in capital

15 unchanged sentences

Equity-accounted investment loss

Change in fair value of warrants liability

Foreign exchange loss

Loss on termination of contract

Change in fair value of warrant liability

Foreign exchange loss (gain)

Interest income

Fees and interest on credit facility

Fees and interest on borrowings and credit facilities

Loss and comprehensive loss for the year, before tax

Loss and comprehensive loss for the year, after tax

Loss and comprehensive loss for the year

Loss per share - Basic and diluted

9 unchanged sentences

Comprehensive Loss

December 31, 2022

Shares issued to Allseas (Note 8)

Exercise of warrant by Allseas (Note 8 and 13)

Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 12)

January 1, 2024

Shares and warrants issued under Registered Direct Offering, net of expenses (Note 13)

Adjustment to Class A Warrant (Note 15)

Conversion of restricted share units, net of shares withheld for taxes (Note 17)

Shares purchased under Employee Share Purchase Plan (Note 15)

Shares issued as per At-the-Market Equity Distribution Agreement (Note 14)

Exercise of stock options (Note 17)

Share purchase under Employee Share Purchase Plan (Note 17)

Share-based compensation and expenses settled with equity (Note 17)

Foreign currency translation adjustment

Loss for the year

5 unchanged sentences

Comprehensive Loss

December 31, 2021

Vesting of Allseas Warrant

Issuance of shares under PIPE financing - net of expenses (Note 12)

January 1, 2023

Shares issued to Allseas

Exercise of warrant by Allseas

Shares and warrants issued under Registered Direct Offering, net of expenses

Conversion of restricted share units, net of shares withheld for taxes

Share purchase under Employee Share Purchase Plan

Exercise of stock options

Shares purchased under Employee Share Purchase Plan

Share-based compensation and expenses settled with equity

12 unchanged sentences

Lease Expense

Accrued interest on credit facilities

Share-based compensation and expenses settled with equity

1 unchanged sentence

Change in fair value of warrants liability

Vesting of Allseas Warrant

Unrealized foreign exchange movement

Loss on termination of contract

Unrealized foreign exchange

Interest paid on Short-Term Debt

Changes in working capital:

3 unchanged sentences

Investing activities

Acquisition of equipment

Acquisition of equipment and software

Net cash used in investing activities

2 unchanged sentences

Expenses paid for registered direct offering

Proceeds from PIPE financing

Expenses paid for PIPE financing

Proceeds from employee share purchase plan

Proceeds from Shares issued from ATM

Proceeds from drawdown of Credit Facilities

Proceeds from Drawdown of Allseas Short-Term Debt

Repayment of Allseas Short-Term Debt

Proceeds from drawdown of Allseas Working Capital Loan Agreement

Proceeds from Low Carbon Royalties Investment

Proceeds from employee stock plans

Proceeds from exercise of stock options

1 unchanged sentence

Proceeds from issuance of shares

Proceeds from Low Carbon Royalties investment

Taxes withheld and paid on share-based compensation

Net cash provided by financing activities

9 unchanged sentences

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.

(“TMC” or the “Company”) has been operating as a corporation under the laws of the province of British Columbia, Canada since September 9, 2021.

The Company’s corporate office, registered address and records office is located at 1111 West Hastings Street, 15 th Floor, Vancouver, British Columbia, Canada, V6E 2J3.

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.

These nodules contain four metals (nickel, copper, cobalt, manganese) which can be used as (i) feedstock for battery cathode precursors (nickel and cobalt sulfates, or intermediary nickel-copper-cobalt matte, or nickel-copper-cobalt alloy) for electric vehicles (“EV”) and 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.

3 unchanged sentences

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.

(“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).

(“DGE”) entered into an option agreement (the “Marawa Option Agreement”) with Marawa Research and Exploration Limited (“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.

On November 14, 2024, DGE issued a formal termination notice to Marawa pursuant to DGE’s right to terminate for convenience under the Agreement.

The termination became effective on January 14, 2025.

The realization of the Company’s assets and attainment of profitable operations is dependent upon many factors including, among other things:

5 unchanged sentences

GAAP”) and include the accounts of TMC and its wholly-owned subsidiaries.

The comparative figures reported in the Consolidated Balance Sheet for software development costs and equipment have been reclassified to conform to the current year’s presentation.

TMC the metals company Inc.

1 unchanged sentence

(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.

These consolidated financial statements have been prepared under the historical cost convention, except for warrants liability and royalty liability that have been measured at fair value and are presented in United States (“US”) dollars.

Consolidation

3 unchanged sentences

Interest Held

Subsidiary (1)

Principal Activity

4 unchanged sentences

Mineral exploration

DeepGreen Resources, LLC

The Metals Company USA, LLC

Holding Company

5 unchanged sentences

British Virgin Islands

DeepGreen TOML Singapore Pte.

DeepGreen TOML Singapore Ltd.

Mineral exploration

1 unchanged sentence

Holding Company

Nauru Education and Training Foundation Inc.

Holding Company

Republic of Nauru

Nauru Health and Environment Foundation Inc.

Holding Company

Republic of Nauru

Nauru Ocean Resources Inc.

8 unchanged sentences

United Kingdom

Tonga Offshore Mining Ltd.

Tonga Offshore Mining Limited

Mineral exploration

Kingdom of Tonga

Seafloor Mineral Ventures (2)

Mineral exploration

(1) The Company’s wholly owned subsidiaries Nauru Education and Training Foundation Inc.

and Nauru Health and Foundation Inc.

were voluntarily dissolved on June 30, 2024.

(2) PT Seafloor Mineral Ventures was incorporated on May 17, 2024.

All intra-group balances have been eliminated on consolidation.

3 unchanged sentences

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.

1 unchanged sentence

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.

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.

All gains and losses on translation of these foreign currency transactions are included in the statements of loss and comprehensive loss.

Use of Estimates

1 unchanged sentence

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).

Significant estimates and assumptions

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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 17), as well as the valuation of warrants liability (Note 15), and the valuation of the royalty liability (Note 9).

Actual results could differ materially from those estimates.

8 unchanged sentences

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.

The Company’s financial instruments consist of cash and cash equivalents, receivables, short-term debt, accounts payable and accrued liabilities which are recorded at cost as well as royalty liability and warrants to acquire common shares of the Company which are measured at fair value.

Fair Value of Financial Instruments

7 unchanged sentences

● 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.

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.

2 unchanged sentences

There were no transfers between fair value measurement levels during the years ended December 31, 2024 and 2023.

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.

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, 2024, and 2023, the carrying values of cash, receivables, short-term debt, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments.

The financial instruments also include royalty liability and warrants which are recorded at fair value as disclosed in Note 9.

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.

Cash includes cash on hand and term deposits with a remaining term to maturity at acquisition of three months or less.

As at December 31, 2024 and 2023, the Company had no cash equivalents.

Equipment and Software

Equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

9 unchanged sentences

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.

Software is currently under development and is stated at cost.

The software will be used to monitor nodule collection on the sea floor.

The Company will amortize the cost of the software over its useful life after it is put in use, on commencement of nodule collection and treatment at a commercial scale.

Exploration Contracts

1 unchanged sentence

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.

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 evaluates impairment indicators on its exploration contracts at each reporting period and adjusts its carrying value if an impairment is identified.

Exploration and Evaluation Expenses

1 unchanged sentence

Such exploration and development costs include, but are not limited to, exploration contract management, geological, geochemical and geophysical studies, environmental studies and process development.

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Share-Based Compensation

6 unchanged sentences

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.

For stock options and restricted share units issued with market conditions (Note 17), 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.

7 unchanged sentences

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.

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 the Company 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 the Company 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.

1 unchanged sentence

Fair value changes in the Private Warrants are recognized in the Company’s statement of loss and comprehensive loss.

The Company issued Class A Warrants and Class B Warrants in 2024.

The Class A Warrants and Class B Warrants met the criteria for equity classification and were recorded under additional paid in capital (Note 15).

TMC the metals company Inc.

1 unchanged sentence

(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).

Income tax expense represents the sum of current tax expense and deferred tax expense.

8 unchanged sentences

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

The Company records leases in accordance with ASC 842, Leases , and determines if an arrangement contains a lease at inception.

6 unchanged sentences

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.

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.

5 unchanged sentences

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.

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 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.

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 , 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).

Short term debt

The Company records borrowings under its short-term debt and line of credit at the amount drawn, net of any directly attributable financing costs.

Interest expense is recognized as incurred based on the interest rate specified in the debt and line of credit agreements (Notes 8 and 20).

Short-term debt and outstanding balances under the line of credit, are stated under Short-term debt and classified as a current liability.

The accrued interest payable amount on the short-term debt and line of credit is disclosed under Accounts payable and accrued liabilities and classified as current liability.

Significant Accounting Estimates and Judgements

10 unchanged sentences

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 17).

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.

1 unchanged sentence

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.

Valuation of Warrants Liability

Valuation of Warrants

The Company re-measures the fair value of the Private Warrants at the end of each reporting period (Note 15).

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 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 that assigned equal weight to the implied volatility of the Company’s Public Warrants, adjusted for the call feature triggered at prices above $ 18.00 over 20 trading days within any 30 -day period, and the historical volatility of the common share price.

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

During the year the Company issued Class A warrants and Class B warrants (Note 15).

The warrants were valued using a Monte Carlo simulation by running 250,000 trials.

3 unchanged sentences

Valuation of Royalty Liability

The Company re-measures the fair value of its royalty liability at each reporting date.

The Company re-measures the fair value of its royalty liability at each reporting date (Note 9).

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.

1 unchanged sentence

Recent Accounting Pronouncements Issued and Adopted

There were no recent accounting pronouncements applicable to the Company during the year.

In November 2023, Accounting Standard Update (“ASU”) 2023-07 was issued which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses and assets.

The ASU applies to all public entities that are required to report segment information in accordance with ASC 280.

The adoption of this update did not have a material impact on the Company’s consolidated financial statements or disclosures.

Receivables and Prepayments

6 unchanged sentences

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Equipment and Software

The movements in the Company’s capital equipment are as follows:

Exploration and

other equipment

Office equipment

December 31, 2022

10 unchanged sentences

As at December 31, 2024

(1) The software is under development and not in use.

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;

● 11.6 million warrants which would vest and become exercisable upon successful completion of the PMTS.

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.

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).

During the year ended December 31, 2024, Allseas provided the Company with engineering, project management and vessel use services consisting of lay-up and transit costs totaling $ 11.9 million, as part of the development of the commercial nodule collection system:

these costs were recorded as mining, technological and process development within exploration and evaluation expenses (Note 10) (2023:

$ 12.1 million).

Exclusive Vessel Use Agreement with Allseas

2 unchanged sentences

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.

TMC the metals company Inc.

1 unchanged sentence

(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:

For the year ended December 31, 2024, the Company has recognized $ 1.9 million as lease expense recorded as exploration and evaluation expense (December 31, 2023:

$ 0.8 million).

As at December 31, 2024, the net amount of the lease liability was $ nil and right-of-use asset is as follows:

Lease Liability

Balance as at August 1, 2023

Payments made during the year by issuing 4.15 million common shares

Balance as at December 31, 2023

Payments made on August 14, 2023, by issuing 4.15 million common shares

Balance as at December 31, 2023 and 2024

Right-of-use Asset

2 unchanged sentences

Balance as at December 31, 2023

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.

Lease expense during the year

Balance as at December 31, 2024

2023 Credit Facility and Loan Agreements with Company Related to Allseas

On March 22, 2023, the Company entered into an Unsecured Credit Facility Agreement, which was amended on July 31, 2023 (“2023 Credit Facility”), with Argentum Cedit Virtuti GCV (the “Lender”), the parent of Allseas Investments S.A.

(“Allseas Investments”) 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 2023 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 a margin of 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 2023 Credit Facility.

The Company has the right to pre-pay the entire amount outstanding under the 2023 Credit Facility at any time before the 2023 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 Company has the ability to settle certain charges under the 2023 Credit Facility in cash or in equity at the discretion of the Company.

The 2023 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:

On March 22, 2024, the Company entered into the Second Amendment to the Unsecured Credit Facility with the Lender, to extend the 2023 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 2023 Credit Facility, the Company may borrow from the Lender up to $ 25 million in the aggregate through August 31, 2025.

On August 16, 2024, the Company entered into the Third Amendment to the 2023 Credit Facility, to increase the borrowing limit of the 2023 Credit Facility to $ 27.5 million.

On November 14, 2024, as a result of the 2024 Registered Direct Offering (Note 13) the borrowing limit of the 2023 Credit Facility was returned to $ 25 million.

During the year ended December 31, 2024, the Company has not drawn any amount from the 2023 Credit Facility and has incurred $ 1 million as underutilization fees (December 31, 2023:

$ 0.8 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.

On May 27, 2024, the Company entered into a short-term loan agreement with the Lender.

In accordance with the agreement, the Lender provided a short-term loan to the Company amounting to $ 2 million (the “Short-Term Loan”) on May 30, 2024.

The Short-Term Loan matured on September 10, 2024 (maturity date) and accrued interest at a rate of 8 % per annum.

On the maturity date, Company repaid the entire Loan of $ 2 million and the accrued interest amounting to $ 46 thousand., which was recorded as interest expense.

On September 9, 2024, the Company entered into a working capital loan agreement (the “Working Capital Loan Agreement”) with Allseas Investments, a company related to Allseas.

In accordance with the Working Capital Loan Agreement, Allseas Investments provided a loan to the Company of $ 5 million (the “Working Capital Loan”) on September 10, 2024, to be used towards general corporate purposes and for the repayment of all outstanding amounts under the Short-Term Loan between the Company and the

TMC the metals company Inc.

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(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

The Working Capital Loan is payable to Allseas Investments on or before the earlier of (i) the occurrence of certain financing events and (ii) April 1, 2025 (the “Repayment Date”).

The Working Capital Loan will bear interest based on the 6-month Secured Overnight Financing Rate, 180 -day average plus a margin of 4.0 % per annum and is payable in two installments on January 2, 2025, and the Repayment Date (or plus a margin of 5.0 % if all interest payments are deferred to the Repayment Date, at the Company’s election).

On October 18, 2024, the Company entered into the First Amendment to the Working Capital Loan Agreement with Allseas Investments, resulting in a further draw of $ 2.5 million by the Company and a total Working Capital Loan drawn amount of $ 7.5 million.

On March 24, 2025, the Company entered into a Letter Agreement with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the Repayment Date under the Working Capital Loan Agreement was extended to September 30, 2025, with principal and interest now repayable on that date.

Additionally, under the same Letter Agreement, the Company and Argentum Cedit Virtuti GCV agreed to cancel the unsecured credit facility established under the 2023 Facility Agreement with no outstanding amounts remaining, other than the Company’s obligation to pay Argentum the Underutilization Fee.

During the year ended December 31, 2024, the Company incurred $ 0.2 million as interest expense.

As at December 31, 2024, the total amount payable to Allseas and its affiliates was $ 33.3 million, with $ 7.5 million of this amount recorded as short-term debt and the remaining balance recorded in accrued liabilities in the Consolidated Balance Sheet (Note 12) (December 31, 2023:

$ 13.8 million, recorded as accrued liabilities).

As at December 31, 2024, Allseas and its affiliates owned 53.8 million TMC common shares (2023:

53.8 million TMC common shares) which constituted 15.8 % (December 31, 2023:

17.6 % ) of total common shares outstanding.

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”).

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 Inc.

(“Low Carbon Royalties”).

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 to Low Carbon Royalties.

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.

On March 21, 2023, Low Carbon Royalties acquired additional gross overriding royalties on natural gas fields in Latin America.

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 %.

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.

1 unchanged sentence

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 CVR would convert into 5 million additional shares of Low Carbon Royalties all of which would be 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.

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, 2024, the Company’s share of the net loss generated by the Low Carbon Royalties was $ 0.2 million (2023:

0.6 million).

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Fair value of NORI Royalty

1 unchanged sentence

Cost of Investment on Closing Date

Equity-accounted investment loss for the year

Equity-accounted investment loss for the year ended 2023

Investment as at December 31, 2023

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").

Equity-accounted investment loss for the year ended 2024

Investment as at December 31, 2024

The NORI Royalty was recorded as a royalty liability in the consolidated Balance Sheet in accordance with ASC 470, Debt (“ASC 470”).

The Company elected to account for the royalty liability at fair value through profit and loss.

2 unchanged sentences

The fair value of the royalty liability as at December 31, 2024 remained unchanged at $ 14 million.

Financial results of Low Carbon Royalties are summarized below:

For the year ended

Financial results of Low Carbon Royalties as at and for the years ended December 31, 2024 and 2023 are summarized below:

Current Assets

3 unchanged sentences

Total Revenue

Comprehensive Income (Loss) for the year

Comprehensive Loss for the Year

Exploration Contracts

4 unchanged sentences

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 21).

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.

(“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.

TMC the metals company Inc.

11 unchanged sentences

December 31, 2023

Termination of Marawa Agreement

December 31, 2024

Exploration and Evaluation Expenses

The detail of exploration and evaluation expenses is as follows:

6 unchanged sentences

Sponsorship, Training and Stakeholder Engagement

(1) Sponsorship, Training and Stakeholder Engagement include $ 80 thousand of equity (RSU) settled expenses in 2023 (2022:

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Permit Application Activities

For the year ended December 31, 2023

3 unchanged sentences

Mining, Technological and Process Development

Allseas Warrant (Note 13)

Prefeasibility Studies

Sponsorship, Training and Stakeholder Engagement

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

General and Administrative Expenses

11 unchanged sentences

General and Administrative Expenses

(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:

(1) Professional and consulting fees include $ 1.2 million of expenses settled with RSUs in 2024 (2023:

$ 0.4 million).

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at December 31, 2024 and 2023 are as follows:

Accounts Payable

Accrued Liabilities (1)

As at December 31, 2024, accrued liabilities totaled $36.5 million (December 31, 2023 - $ 28.9 million), of which $ 25.8 million relates to Allseas (Note 8) (December 31, 2023 - $ 13.8 million).

Financing Activity

2023 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).

On August 14, 2023, the Company entered into a securities purchase agreement (the “2023 Purchase Agreement”) with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “2023 Registered Direct Offering”) 12,461,540 common shares and issue Class A Warrants to purchase 6,230,770 common shares (“Class A Warrants”) (Note 15).

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.

On January 30, 2024, the Company received the final balance of the committed funding amounting to $ 9 million (representing 4,500,000 common shares and 2,250,000 Class A Warrants) from an investor affiliated with the Company.

As at December 31, 2024, all common shares and Class A Warrants to purchase common shares under the 2023 Registered Direct Offering had been issued and the Company received gross proceeds amounting to $ 24.9 million.

The Company incurred $ 1.3 million as offering expenses, resulting in net proceeds received of $ 23.6 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.

Out of the total net proceeds received of $ 23.6 million, the net proceeds attributable to common shares were $ 18.9 million (Note 16) and the net proceeds attributable to Class A Warrants were $ 4.7 million (Note 15).

TMC the metals company Inc.

1 unchanged sentence

(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.

2024 Registered Direct Offering

On November 14, 2024, the Company entered into a securities purchase agreement (the “2024 Purchase Agreement”) with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “2024 Registered Direct Offering”) 17,500,000 common shares and issue Class B Warrants to purchase 8,750,000 Common Shares (“Class B Warrants”) (Note 15).

Each common share and accompanying Class B Warrant were sold at a price of $ 1.00 per unit.

The exercise price to purchase one common share under the Class B Warrants is $ 2.00 , subject to adjustment as provided in the 2024 Purchase Agreement.

On November 26, 2024, the Company and the requisite initial investors entered into the First Amendment to the 2024 Purchase Agreement, pursuant to which the Company agreed to sell and issue an additional 2,400,000 common shares and accompanying Class B Warrants to purchase 1,200,000 common shares to new investors on the same terms and conditions as initially offered.

Including the First Amendment to the 2024 Purchase Agreement, the Company agreed to sell and issue in aggregate 19,900,000 common shares and Class B Warrants to purchase 9,950,000 common shares.

As at December 31, 2024, 14,900,000 common shares and Class B Warrants to purchase 7,450,000 common shares under the 2024 Registered Direct Offering had been issued following the receipt of gross proceeds of $ 14.9 million.

The Company incurred $ 0.7 million as offering expenses, resulting in net proceeds received of $ 14.2 million.

Out of the total net proceeds received of $ 14.2 million, the net proceeds attributable to common shares were $ 9.7 million (Note 16) and the net proceeds attributable to Class B Warrants were $ 4.5 million (Note 15).

On February 6, 2025, the Company received the final balance of committed funding of $ 5 million (representing 5,000,000 common shares and 2,500,000 Class B Warrants).

Shares issued as per At-the-Market Equity Distribution Agreement (“ATM”)

In December 2022, the Company filed a prospectus supplement with the Securities and Exchange Commission to sell up to $ 30 million of the Company’s common shares from time to time through an ATM.

In 2024, the Company issued 3,251,588 common shares (2023:

nil ) at an average share price of $ 1.53 , resulting in net proceeds of $ 4.9 million, after incurring $ 113 thousand as commission and fees (Note 16).

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, 2024, 15,000,000 Public Warrants were outstanding.

Each whole Public Warrant entitles the holder to purchase one common share at a price of $ 11.50 per share beginning on October 9, 2021, subject to restrictions as described further.

Public Warrants may only be exercised for a whole number of shares.

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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 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

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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.

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● 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.

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

As at December 31, 2024, the value of outstanding Public Warrants of $ 19.5 million was recorded in additional paid in capital.

Private Warrants

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● 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.

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 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.

3 unchanged sentences

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.

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 expected volatility was estimated using a binomial model that assigned equal weight to the implied volatility of the Company’s Public Warrants, adjusted for the call feature triggered at prices above $ 18.00 over 20 trading days within any 30 - day period, and the historical volatility of the common share price.

As at December 31, 2024, the fair value of outstanding Private Warrants of approximately $ 0.9 million is recorded as warrants liability.

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Warrants liability as at December 31, 2023

Increase in fair value of warrants liability

Decrease in fair value of warrants liability

Warrants liability as at December 31, 2024

3 unchanged sentences

Exercise price

Volatility (1)

Risk-free rate

Dividend yield

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.

Under the 2023 Registered Direct Offering (Note 13) which closed on August 14, 2023, the Company issued 3,980,770 Class A Warrants to purchase common shares at an exercise price of $ 3.00 per share.

These Class A Warrants were valued on August 14, 2023, at a fair value of $ 0.80 per warrant, using a Monte Carlo valuation.

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

TMC the metals company Inc.

1 unchanged sentence

(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:

fixed exercise price.

As at December 31, 2023, the Company recorded the total fair value of these Class A Warrants amounting to $ 3.2 million as additional paid in capital.

On January 30, 2024, the Company received the final balance of the committed funding under the 2023 Registered Direct Offering (Note 13) and on January 31, 2024, issued 2,250,000 Class A Warrants to purchase common shares at an exercise price of $ 3.00 per share.

The Class A Warrants issued on January 31, 2024 had the same terms as the Class A Warrants issued in 2023.

The remaining 2,250,000 Class A Warrants were valued on January 31, 2024, using a Monte Carlo simulation, resulting in a fair value of $ 0.69 per warrant, with the total fair value of these warrants amounting to $ 1.6 million which was recorded as additional paid in capital.

The fair value of the Class A Warrants issued on January 31, 2024 was estimated using the following assumptions:

Exercise price

2 unchanged sentences

Dividend yield

The 2023 Purchase Agreement stipulates a down round feature wherein if between August 14, 2023, and December 31, 2024, the Company, or its subsidiaries issue, sell, or grant options or rights to purchase common shares or equivalents at a price lower than either i) $ 2.00 or ii) the exercise price in effect, the exercise price of the outstanding Class A Warrants will automatically reset to the lower of these two amounts.

On reset of the exercise price, the number of shares issuable will not change.

On November 14, 2024, the Company entered into the 2024 Purchase Agreement (Note 13), pursuant to which the Company agreed to sell and issue one common share and the accompanying Class B Warrant to purchase one half of a common share at a price of $ 1.00 .

As the issuance under the 2024 Purchase Agreement was less than $ 2.00 per common share, the down round feature of the Class A Warrants was triggered on November 14, 2024 (the “Trigger date”) and the exercise price was reset from $ 3.00 per share to $ 2.00 per share.

In accordance with ASC 260, Earnings per Share , on the Trigger date, the Company measured the difference between the fair values of the Class A Warrants using an exercise price of $ 3.00 per share and an exercise price of $2.00 per share.

The fair values of the Class A Warrants on November 14, 2024, with an exercise price of $ 2.00 per share and an exercise price of $ 3.00 per share were $ 0.50 per warrant and $ 0.41 per warrant, respectively, and were estimated using Monte Carlo simulations based on the following assumptions:

Call price threshold

Risk-free rate

Dividend yield

The difference in the above-mentioned fair values was $ 0.09 per warrant, or $ 0.6 million in aggregate.

In accordance with ASC 260, the difference in the fair values was considered to be a deemed dividend and was recorded as additional paid in capital on November 14, 2024.

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, 2024, 6,230,770 Class A Warrants were outstanding.

Class B Warrants

As a part of the 2024 Registered Direct Offering (Note 13), the Company issued 7,450,000 Class B Warrants for the purchase of common shares at an exercise price of $ 2.00 per share.

The Class B Warrants expire on November 14, 2029.

The valuation of these Class B Warrants was determined using a Monte Carlo simulation.

The Class B Warrants were valued on November 14, 2024 at a fair value of $ 0.60 per warrant.

The fair value of the Class B Warrants was estimated using the following assumptions:

Exercise price

Call price threshold

Risk-free rate

Dividend yield

The Class B Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 30 consecutive trading days exceeds $ 5.00 , and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation 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.

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).

As the Class B Warrants had the same features as the above-mentioned Class A Warrants, the Company classified the Class B Warrants as equity (per ASC 815) and on November 14, 2024, recorded the fair value of the Class B Warrants amounting to $ 4.5 million as additional paid in capital.

There were no exercises or redemptions of the Public Warrants, Private Warrants, Class A Warrants and Class B Warrants during the year ended December 31, 2024.

As on December 31, 2024, 7,450,000 Class B Warrants were outstanding.

On February 6, 2025, the Company received the final balance of committed funding and issued the remaining 2,500,000 Class B Warrants.

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Common Shares

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The holders of the Company’s common shares are entitled to one vote for each common share held.

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:

Below is a summary of the Special Shares and their respective vesting thresholds, assuming the full number of Special Shares from Rollover Options are issued:

Special Share Class

2 unchanged sentences

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.

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Common Share Continuity

1 unchanged sentence

December 31, 2022

Issuance of shares under PIPE financing (Note 12)

Issuance of shares under 2023 Registered Direct Offering (Note 13)

Exercise of warrant by Allseas

Shares issued to Allseas

Exercise of stock options (Note 17)

Conversion of restricted share units

Conversion of restricted share units (Note 17)

Share purchase under Employee Stock Purchase Plan (Note 17)

1 unchanged sentence

Issuance of shares under 2023 Registered Direct Offering (Note 13)

Exercise of warrant by Allseas (Note 13)

Shares issued to Allseas (Notes 8)

Exercise of stock options (Note 15)

Issuance of shares under 2024 Registered Direct Offering (Note 13)

Shares issued as per At-the Market Equity Distribution Agreement (Note 14)

Conversion of restricted share units (Note 17)

Exercise of stock options (Note 17)

Share purchase under Employee Stock Purchase Plan (Note 17)

1 unchanged sentence

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.

The Company’s 2021 Incentive Equity Plan (the “ Incentive Plan”) provides that the aggregate number of common shares reserved for future issuance under the Incentive Plan.

As of December 31, 2024, there were a total of 56,634,518 common shares reserved for issuance under the Incentive Plan out of which 37,870,371 common shares remained available for future issuances.

These amounts include 12,262,348 shares added to the Incentive Plan in January 2024 pursuant to the Incentive 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 from 2022 to 2031, the number of common shares that may be issued pursuant to the Incentive 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.

Share-based awards consisting of Restricted Share Units (“RSU”) and options under the Short-Term Incentives Plan (“STIP”) and Long-Term Incentives Plan (“LTIP”) have been issued under the 2021 Incentive Equity Plan.

Prior to the 2021 Incentive Plan, the Company had granted share-based awards under the 2018 Stock Option Plan (“2018 Plan”).

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.

Outstanding under the Incentive Plan.

On April 9, 2024, the Company entered into a consulting agreement with Mr.

Jurvetson, a director of the Company.

As per the agreement, Mr.

Jurvetson would serve as a special advisor to the Company’s Chief Executive Officer for a term of five years .

As the sole compensation for his advisory services, Mr.

Jurvetson was granted stock options to purchase 3,440,000 of the Company’s common shares, with an exercise price equal to $ 1.71 , under the Incentive Plan.

The options vest in thirds on each anniversary of the grant date of the options provided that Mr.

Jurvetson is still providing services to the Company at such time and expire on April 9, 2031.

On April 9, 2024, the Company also granted stock options to purchase 500,000 shares to a consultant in exchange for advisory services over a 5-year period ending April 9, 2029.

TMC the metals company Inc.

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(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 :

The Company determined the fair value of the options to be $ 1.36 per unit using the Black-Scholes valuation method.

The fair value was estimated using the following assumptions:

Exercise price

Risk-free rate

Dividend yield

(1) As these were the first options granted under the Incentive Plan, the expected term was estimated using the simplified method which is calculated as the average of the time to vest for each tranche from the grant date and the 7-year contractual term.

During the year, the Company recognized $ 1.3 million of share-based compensation expense related to the amortization of stock options, reported under general and administrative expenses in the statement of loss and comprehensive loss.

There were no forfeitures and exercises during the year and as at December 31, 2024, there were 3,940,000 options outstanding under the Company’s 2021 Incentive Plan (2023:

The intrinsic value of the outstanding stock options was $ nil and was calculated by considering the closing market price of the Company’s common shares as the fair value of the Company’s common share.

The total unrecognized share-based compensation expense of $ 4 million is expected to be recognized over a period of approximately two years .

Outstanding under the Company’s 2018 Plan.

No new stock options were granted by the Company as STIPs or LTIPs under the 2018 Plan during 2024 and 2023.

Outstanding STIPs under the 2018 plan:

A continuity schedule summarizing the movements in the Company’s stock options under the STIP plan is as follows:

Outstanding – December 31, 2022

Cancelled/Forfeited

Outstanding – December 31, 2023

Cancelled/Forfeited

Outstanding – December 31, 2023

Vested and exercisable – December 31, 2023

Outstanding – December 31, 2024 Vested and exercisable

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

A summary of the Company’s stock options granted and outstanding under the Company’s STIP as at December 31, 2024 is as follows:

Weighted average

Number of Options

life to expiry

Outstanding and

Exercise price

March 31, 2024

December 31, 2025

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The total grant date fair value of STIP stock options that vested during the year ended December 31, 2024, was $ 1 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.

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.

As at December 31, 2024, all the options are vested and the total unrecognized share-based compensation expense was $ nil .

As at December 31, 2024, the closing market price of the Company’s common shares is considered to be the fair value of the Company’s common share to determine the intrinsic value of outstanding stock options.

The aggregate intrinsic value of stock options exercised during the year ended December 31, 2024, was $ 0.7 million.

During the year, the Company recognized $ 47 thousand of share-based compensation expense for STIP stock options in the statement of loss and comprehensive loss (2023:

$ 0.5 million) out of which share-based compensation expense related to exploration and evaluation activities amounted to $ 14 thousand (2023 - $ 0.2 million) and the share-based compensation expense recognized related to general and administrative matters amounted to $ 33 thousand (2023 - $ 0.3 million).

Outstanding LTIPs under the 2018 plan:

On March 4, 2021, the Company granted 9,783,922 stock options as LTIP.

These stock options have an exercise price of $ 0.65 per option and expire on June 1, 2028.

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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.

The Company expensed 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.

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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.

As at December 31, 2024, no compensation expense related to the performance-based

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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, 2024, was $ 4.5 million.

None of the LTIP stock options were exercisable on December 31, 2023.

An aggregate 139,048 LTIP stock options were forfeited during 2024 and as at December 31, 2024, none of the LTIP stock options were exercisable.

The Company expects LTIP options to vest as and when the market and performance milestones described below are achieved.

As at December 31, 2024, an aggregate of 9,644,875 LTIP stock options were outstanding.

As at December 31, 2024, 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).

In 2024, the Company reversed $ 0.6 million of previously recognized share-based compensation expense to record the forfeiture of unvested LTIP stock options in the statement of loss and comprehensive loss (2023:

$ nil ), evenly apportioned between exploration and evaluation expenses (Note 10) and general and administration expenses.

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.

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

Vesting Immediately (1)(2)

Vesting fully on the anniversary of the grant date (3)

Vesting in thirds on each anniversary of the grant date (4)

Vesting in fourths on each anniversary of the grant date

Total Units Granted

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.

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:

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).

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.

On each vesting date, RSU holders are issued common shares equivalent to the number of RSUs held provided the holder is providing service to the Company on such vesting date.

A summary of the RSU activity in 2024 is presented in the table below:

Number of RSUs

average grant-

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Outstanding – December 31, 2023

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:

( 10,734,581 )

Outstanding – December 31, 2024

The details of RSUs granted by the Company during the year are as follows:

Vesting Period

Vesting Immediately (1)

Vesting fully on the first anniversary of the grant date (2)

Vesting in thirds on each anniversary of the grant date (3)

Vesting in fourths on each anniversary of the grant date

Vesting based on market conditions (4)

Total Units Granted

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) Of the 4,538,922 RSUs granted during 2024 and vesting immediately, 2,812,802 RSUs were issued to settle liabilities with a carrying amount of $ 4.1 million, at a weighted average grant date fair value of $ 1.44 per RSU.

In addition, the Company granted 662,399 RSUs, to consultants (2023:

274,912 RSUs) resulting in $ 1.1 million, charged as general and administrative expenses (2023:

$ 0.3 million charged as general and administrative expenses).

In 2024, the Company also granted 57,756 RSUs, to consultants as a prepayment for their services (2023:

43,478 units).

(2) Of the 493,430 units granted during 2024, an aggregate amount of 476,189 RSUs (2023:

1,014,349 RSUs) were granted to the Company’s non-employee directors under the Company’s Non-employee Director Compensation Policy, which will vest at the Company’s 2025 annual shareholders meeting.

The total fair value of units granted as annual grants to non-employee directors amounted to $ 0.7 million (2023:

$ 0.7 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.

The remaining 17,241 units were granted to a director as annual fees for consulting services to be provided, which were fair valued at $ 25 thousand.

(3) Of the 7,212,374 units granted during 2024, the Company granted 7,144,347 RSUs, as payment for the 2023 LTIP awards (2023:

8,645,465 RSUs were issued as payment for the 2022 LTIP awards).

The remaining 68,027 units were granted to a non-employee director of the Company as an initial grant, as prescribed under the Company’s Non-employee Director Compensation Policy.

(4) On April 16, 2024, the Company entered into a new employment agreement with Gerard Barron, the Company’s Chief Executive Officer and Chairman (the “Employment Agreement”) that replaced and superseded Mr.

Barron’s existing employment agreement.

Under the Employment Agreement, the Company granted Mr.

Barron a one-time signing bonus award of market-based restricted stock units (the “Signing RSUs”) amounting to 20,000,000 of the Company’s common shares.

The Signing RSUs will vest upon the common shares achieving the following closing prices per common share, based on the trailing 30 -day average price (the “Closing Price”), on or prior to April 16, 2029 (maturity date), subject to Mr.

Barron’s continued service with the Company on the applicable vesting date:

one -third of the Signing RSUs vest on achievement of a Closing Price of $ 7.50 , a further one -third vest on achievement of a Closing Price of $ 10.00 and the final one -third vest on achievement of a Closing Price of $ 12.50 (each subject to equitable adjustment for any stock splits, combinations, reclassifications, stock dividends and the like).

Pursuant to the Employment Agreement, Mr.

Barron has agreed not to sell any of the common shares issuable upon vesting of the Signing RSUs until after the fifth anniversary of entering into the Employment Agreement.

The Company determined the fair value of the options using the Monte-Carlo valuation method.

The fair value of each tranche and the derived service period are as follows:

Fair Value per RSU

Derived Service Period

Achievement of a Closing Price of $ 7.50

1.58 years from the grant date

Achievement of a Closing Price of $ 10

1.87 years from the grant date

Achievement of a Closing Price of $ 12.50

2.10 years from the grant date

The fair value of the Signing RSUs was estimated using the following assumptions:

April 16, 2024

Performance period

April 16, 2024 – April 16, 2029

Risk-free rate

Cost of Equity

Dividend yield

The grant date fair value of all RSUs, apart from the Signing RSUs, is equivalent to the closing share price of the Company’s common shares on the date of grant.

The grant date fair value of the RSUs vesting based on market conditions was determined

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

using the Monte-Carlo valuation method.

During the year, a total of $ 19.5 million was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs (2023:

$ 8.6 million) of which share-based compensation expense related to exploration and evaluation activities amounted to $ 10.7 million (2023 - $ 4.8 million) and share-based compensation expense related to general and administration matters amounted to $ 8.8 million (2023 - $ 3.8 million).

As at December 31, 2024, total unrecognized share-based compensation expense for RSUs was $ 20.5 million (December 31, 2023 - $ 6.9 million) which is expected to be recognized over 1.24 years.

The fair value of shares vested during the year ended December 31, 2024, amounted to $ 14.1 million (2023 - $ 8.3 million).

As at December 31, 2024, an aggregate of 128,642 vested RSUs were being processed and due to be converted into common shares.

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.

As of December 31, 2024, there were a total of 10,988,032 common shares reserved for issuance under the ESPP out of which 10,648,622 common shares remained available for future issuance under the ESPP.

These amounts include 3,065,587 shares added to the ESPP in January 2024 pursuant to the ESPP’s automatic annual increase provision.

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.

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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 contribution is limited to 15 % of the employee’s annual gross earnings, not exceeding the $ 25,000 annual limit set under the Internal Revenue Code (IRC) established by the Internal Revenue Service (IRS).

● an employee’s purchases in any offering period cannot exceed 15,000 common shares, and

3 unchanged sentences

A total of $ 37 thousand was charged to the statement of loss and comprehensive loss as share-based compensation expense for the year ended December 31, 2024, representing the share price purchase discount offered by the Company (2023:

$ 0.1 million).

$ 47 thousand).

From the amount charged in 2024, $ 19 thousand was recorded in exploration and evaluation expenses (2023:

1 unchanged sentence

$ 21 thousand).

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.

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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 year.

Basic and diluted loss per share was the same for each year presented as the inclusion of all common share equivalents would have been anti-dilutive.

Anti-dilutive equivalent common shares were as follows:

13 unchanged sentences

Amortized cost

Receivables and Prepayments

Taxes and other receivables (Note 6)

Financial liabilities

1 unchanged sentence

Accounts payable and accrued liabilities

Short-term debt

Fair value through profit or loss

2 unchanged sentences

Related Party Transactions

The Company’s subsidiary, DeepGreen Engineering Pte.

Ltd., is engaged in a consulting agreement with SSCS Pte.

One of the Company’s subsidiaries has a consulting agreement with SSCS Pte.

(“SSCS”) to manage offshore engineering studies.

1 unchanged sentence

Consulting services during the year ended December 31, 2024, totaled $ 75 thousand, (2023:

$ 275 thousand), out of which a total $ 170 thousand (2022:

$ 212 thousand), out of which a total of $ 53 thousand (2023:

$ 170 thousand), is disclosed as exploration labor within exploration and evaluation expenses (Note 10) and $ 22 thousand is disclosed as general and administrative expenses (2023:

$ 42 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.

As at December 31, 2024, the amount payable to SSCS was $nil (December 31, 2023 - $ 17 thousand).

One of the Company’s directors, who was appointed at the Company’s annual general meeting held on May 31, 2024, is the Chairman of Stonehaven Campaigns Limited and Robertsbridge Consultants Limited, which provide the Company with consulting

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

From May 31, 2024, until December 31, 2024, Stonehaven Campaigns Limited and Robertsbridge Consultants Limited, provided consulting services amounting to $ 18 thousand and $ 26 thousand respectively, recorded in general and administrative expenses.

As at December 31, 2024, the amount payable to both Stonehaven Campaigns Limited and Robertsbridge Consultants Limited was $nil.

On January 30, 2024, as part of the Registered Direct Offering (Note 13), the Company received the remaining committed funding of $ 9 million from ERAS Capital LLC, the investment fund of one of the Company’s directors.

On March 22, 2024, the Company entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, the Company’s Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of one of the Company’s directors, (collectively, the “2024 Lenders”), pursuant to which, the Company may borrow from the 2024 Lenders up to $ 20 million in the aggregate ($ 10 million 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 million 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.

On August 13, 2024, the Company entered into the First Amendment to the 2024 Credit Facility with the 2024 Lenders, to increase the borrowing limit of the 2024 Credit Facility to $ 25 million in the aggregate ($ 12.5 million from each of the 2024 Lenders).

Under the terms of the First Amendment, the borrowing limit will return to $ 20 million in the aggregate ($ 10 million from each of the 2024 Lenders) upon certain financing events.

On November 14, 2024, the Company entered into the Second Amendment to the 2024 Credit Facility with the 2024 Lenders, to increase the borrowing limit to $ 38 million in the aggregate ($ 19 million from each of the 2024 Lenders) and to extend the maturity of the 2024 Credit Facility to December 31, 2025 .

As per the Second Amendment, the rate of underutilization fee was retroactively increased from March 22, 2024 to 6.5 % on any undrawn amounts under the 2024 Credit Facility.

On March 26, 2025, the Company entered into the Third Amendment to the 2024 Credit Facility with the 2024 Lenders, 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 .

During the year ended December 31, 2024, the Company has drawn $ 4.3 million from the 2024 Credit Facility and incurred $ 0.2 million as interest expense.

During 2024, the Company incurred $ 1.1 million, as underutilization fees, which would be payable only in the event the 2024 Credit Facility is not drawn down at the time such fees are payable.

During the year, the Company repaid interest amounting to $ 25 thousand, and underutilization fees amounting to $ 0.1 million to the 2024 Lenders.

On January 31, 2025, the Company repaid the drawn amount and outstanding interest on the 2024 Credit Facility amounting to $ 1.8 million and $ 0.1 million, respectively.

Apart from the above-mentioned transactions, the Company had transactions with Allseas which are detailed in Note 8 and issued share-based grants to the Company’s directors which are detailed in Note 17.

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.

NORI is currently implementing its approved 2022 to 2026 five-year plan.

The cost of the estimated work plan for 2025 onwards is dependent on the ISA’s approval of the NORI Area D exploitation application.

1 unchanged sentence

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.

NORI’s exploration contract expires on July 21, 2026.

NORI is required to submit an application for

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

extension no later than six months before the expiration of the contract.

NORI intends to submit an application for a five-year extension in 2025.

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.

TOML is currently implementing its approved 2022 to 2026 five-year plan, 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.

10 unchanged sentences

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.

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”).

7 unchanged sentences

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.

The complaint alleges that all defendants violated Section 10(b) of the Exchange Act 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.

6 unchanged sentences

On July 12, 2023, an oral hearing on the motion to dismiss was held.

The parties are currently awaiting a ruling.

The parties are

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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.

2 unchanged sentences

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.

On January 23, 2023, investors in the 2021 private placement from the Business Combination filed a lawsuit against the Company in the Commercial Division of New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al.

Sustainable Opportunities Acquisition Corp.

4 unchanged sentences

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 denies any allegations of wrongdoing and filed a motion to dismiss the amended complaint on July 28, 2023.

On December 7, 2023, the Court granted the Company’s motion to dismiss the claim for breach of the covenant of good faith and fair dealing and denied the Company’s 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.

The appeal was heard on November 8, 2024.

The NY Appellate Division upheld the lower court’s ruling in December 2024, moving the case into the discovery phase.

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.

On November 8, 2024, a shareholder filed a putative class action against the Company and certain of its executives in federal district court for the Central District of California, captioned Lin v.

TMC The Metals Company Inc., Gerard Barron, and Craig Shesky.

The complaint alleges that all defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Messrs.

Barron and Shesky violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information regarding the classification of the non-financial asset received from our partnership with Low Carbon Royalties Inc.

and the derecognition of the capitalized exploration contract related to NORI.

The alleged misstatements and omissions pertain to the Company’s initial classification of this non-financial asst as a gain on disposition (being a sale of future revenue) and subsequent reclassification thereof as a royalty liability (and re-capitalization of the exploration contract) and the restatement of our previously issued financial statements as a result thereof for the three months ended March 31, 2023, the six months ended June 30, 2023 and the nine months ended September 30, 2023 in March 2024.

The complaint purports to represent a class of shareholders who acquired the Company’s securities between May 12, 2023, and March 25, 2024, and seeks to recover compensable damages caused by the alleged wrongdoings.

On February 6, 2025, the Court appointed a lead plaintiff.

An amended complaint was filed on March 6, 2025.

Pursuant to court-approved scheduling, we are expected to serve a motion to dismiss by April 10, 2025, the lead plaintiff is expected to file an opposition by May 15, 2025, and we are expected to reply by June 5, 2025.

The Company intends to defend against the lawsuit.

There can be no assurance, however, that the Company will be successful in its defense, or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action.

Due to the early stage of this litigation, such losses or range of possible losses cannot be reliably estimated.

Fair Value Accounting

The following tables set forth the Company’s assets and liabilities measured at fair value (Note 3):

Fair Value at December 31, 2024

Receivables and prepayments

Exploration contracts

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Right of use asset

Accounts payable and accrued liabilities

Short-term debt

Deferred tax liability

Royalty liability

Warrants liability

Fair Value at December 31, 2023

Receivables and prepayments

Exploration contracts

Right of use asset

Accounts payable and accrued liabilities

Deferred tax liability

Royalty liability

Warrants liability

Segmented Information

3 unchanged sentences

December 31, 2023

North America

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Reconciliation of Effective Tax Rate

13 unchanged sentences

The Company currently has no uncertain tax positions and is therefore not reflecting any adjustments.

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:

10 unchanged sentences

Deferred tax liability recognized

(1) Comparative amounts for the year ended December 31, 2022 are restated based on actual tax returns filed.

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

Deductible temporary differences, unused tax losses and unused tax credits are as follows:

6 unchanged sentences

Share issuance costs

Restricted interest and financing expenses

Not applicable

9 unchanged sentences

As at December 31, 2024, the 2024 tax year filings for the Company and its subsidiaries (where applicable) remain unfiled and have not been assessed by the relative tax authorities.

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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):

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

Receivables and prepayments

Exploration contracts

Right-of-use asset

Accounts payable and accrued liabilities

Deferred tax liability

Royalty Liability

Warrants liability

TOTAL LIABILITIES

Common shares (unlimited shares, no par value)

Special Shares

Additional paid in capital

Accumulated other comprehensive loss

TOTAL LIABILITIES AND EQUITY

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

Operating expenses

Exploration and evaluation expenses

General and administrative expenses

Operating loss

Equity-accounted investment loss

Gain on disposition of asset

Change in fair value of warrants liability

Foreign exchange loss

Interest income

Fees and interest on credit facility

Loss and comprehensive loss for the year, before tax

Loss (gain) and comprehensive loss (gain) for the period, after tax

Loss per share

- basic and diluted

Weighted average number of Common Shares outstanding – basic

Weighted average number of Common Shares outstanding – diluted

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

Operating activities

Gain/(Loss) for the period

Items not affecting cash:

Lease expense

Expenses settled with share-based payments

Expenses to be settled with share-based payments

Equity-accounted investment loss

Gain on disposition of asset

Change in fair value of warrants liability

Vesting of Allseas Warrant

Unrealized foreign exchange movement

Changes in working capital:

Receivables and prepayments

Accounts payable and accrued liabilities

Net cash used in operating activities

Investing activities

Cash received from investment in Low Carbon Royalties

Acquisition of equipment

Net cash provided by (used in) investing activities

Financing activities

Proceeds from Low Carbon Royalties investment

Proceeds from Registered Direct Offering

Expenses paid for Registered Direct Offering

Proceeds from PIPE financing

Expenses paid for PIPE financing

Proceeds from employee stock plan

Proceeds from exercise of stock options

Proceeds from exercise of warrants by Allseas

Proceeds from issuance of shares

Taxes withheld and paid on share-based compensation

Net cash provided by financing activities

Decrease in cash

Impact of exchange rate changes on cash

Cash - beginning of period

Cash - end of period

TMC the metals company Inc.

Notes to Consolidated Financial Statements

(in thousands of US Dollars, except share, per share amounts and unless otherwise stated)

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.

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.

On March 24, 2025, we entered into a Letter Agreement (the “Letter Agreement”) with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the repayment date under our Working Capital Loan agreement with Allseas Investments dated September 9, 2024 was extended to September 30, 2025.

Additionally, under the Letter Agreement, we and Argentum Cedit Virtuti GCV agreed to cancel the unsecured credit facility established in 2023 with no outstanding amounts remaining, other than our obligation to pay the underutilization fee thereunder.

On March 27, 2025, the Company announced that it initiated a process with the U.S.

National Oceanic and Atmospheric Administration and the U.S.

Department of Commerce under the U.S.

Deep Seabed Hard Mineral Resources Act to consider a U.S.-based regulatory pathway for the commercial production of deep-sea polymetallic nodules in the CCZ.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data