What changed in this filing

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Item 9A. Controls and Procedures

2025-03-27 compared with 2024-03-25 · 77 added, 54 removed, 193 unchanged (40% of the section changed)

2 unchanged sentences

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2023, as a result of a material weakness in our internal control over financial reporting as described below.

Based on this evaluation and considering the previously reported material weakness as described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2024.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

In light of the material weakness in our internal control over financial reporting, we performed additional procedures to ensure that our consolidated financial statements included in this Annual Report were prepared in accordance with U.S.

Following such additional procedures, our management, including our principal executive officer and principal financial officer, has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in this Annual Report, in conformity with U.S.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act, as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

The company’s internal control over financial reporting includes those policies and procedures that:

3 unchanged sentences

As of December 31, 2024, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, management concluded that our internal control over financial reporting was not effective as management identified a material weakness in our internal control over the accounting for significant non-routine transactions that resulted from the inadequate and untimely involvement of stakeholders and technical advisors with an appropriate level of expertise to account for a non-routine, unusual and complex transaction.

Based on this assessment, our management concluded that, as of December 31, 2024, our internal control over financial reporting, were not effective, as a result of the material weakness discussed below.

As previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), management identified a material weakness in the operating effectiveness of our internal control over the accounting for significant, non-routine transactions that resulted from the inadequate and untimely involvement of stakeholders and technical advisors with an appropriate level of expertise to account for significant, non-routine transactions.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

This material weakness resulted in errors in the financial statements and related disclosures in our Quarterly Reports on Form 10-Q for the quarter ended March 31, 2023, and for the six months ended June 30, 2023 and nine months ended September 30, 2023.

The cumulative errors in the three periods were made by management in the financial statements as of and for the year ended December 31, 2023 included in this Annual Report, and as such, had no impact on our annual audited financial statements for the year ended December 31, 2023 included in this Annual Report.

See Note 22 to the audited consolidated financial statements for the year ended December 31, 2023 included elsewhere in this Annual Report for more information about these changes.

In order to remediate this material weakness, we are in the process of developing and rolling out training on processes and controls related to non-routine transactions and evaluating the circumstances under which we use technical advisors in connections with evaluating non-routine transactions.

We are also considering engaging the assistance of additional third-party resources as deemed appropriate to assist management in its remediation efforts.

Our internal control over significant non-routine transactions need to be in operation and tested for sufficient instances to be considered effective.

Consequently, the controls for non-routine transactions were ineffective as of December 31, 2023.

Notwithstanding our material weakness, we have concluded that the financial statements and other financial information included in this Annual Report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented in conformity with U.S.

See Note 23 to the audited consolidated financial statements for the year ended December 31, 2023, included in our 2023 Annual Report on Form 10-K for more information about these errors and our revisions to these previously issued financial statements.

In order to remediate this material weakness, during 2024, we developed a policy to assist with the identification of significant, non-routine transactions and to define the processes to follow in addressing the accounting and reporting requirements of these transactions.

In addition, we rolled out training on processes and controls related to significant, non-routine transactions and identifying circumstances under which we use technical advisors in connection with evaluating such transactions.

During the fourth quarter of the year ended December 31, 2024, we identified a significant, non-routine transaction that occurred and we applied the processes as required under the new policy.

Although management believes the new policy, processes and training worked effectively for this significant, non-routine transaction, the new internal control over significant, non-routine transactions needs to be in operation and tested for sufficient instances to be considered effective and, therefore, these changes can only be deemed effective once they have been in place over a longer time period and applied in additional instances.

We will continue to review the effectiveness of our newly implemented controls and make improvements as warranted.

This is no assurance, however, that these control modifications will ultimately have the intended effects.

Notwithstanding the material weakness, management has concluded that our audited financial statements included in this Annual Report on Form 10-K are fairly stated in all material respects in accordance with U.S.

GAAP for each of the periods presented therein.

Changes in Internal Control over Financial Reporting

Except as noted above, there were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal controls that occurred during the fourth quarter of the year ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as noted above, there were no changes in our internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the fourth quarter of the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Disclosure Controls and Procedures

8 unchanged sentences

OTHER INFORMATION

Amendment to Credit Facility with Allseas

On March 22, 2024, we entered into the Second Amendment to the Unsecured Credit Facility with Argentum Credit Virtuti GCV (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 we or the Lender gives notice of termination of the agreement.

Under the amended credit facility, we may borrow from the Lender up to $25,000,000 in the aggregate through August 31, 2025.

The foregoing description of the amendment to the Credit Facility does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the amendment to the Credit Facility attached as Exhibit 10.33 to this Annual Report and incorporated herein by reference.

Credit Facility with ERAS Capital LLC and Gerard Barron

On March 22, 2024, we 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, we may borrow from the 2024 Lenders up to $20,000,000 in the aggregate ($10,000,000 from each of the 2024 Lenders), from time to time, subject to certain conditions.

All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (SOFR), 180-day average plus 4.0% per annum payable in cash semi-annually (or plus 5% if paid-in-kind at maturity, at our election) on the first business day of each of June and January.

We 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.

We have 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 we or any of our subsidiaries raise at least USD $50,000,000 in the aggregate (i) through the issuance of any of our or our subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement.

The foregoing description of the 2024 Credit Facility does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the 2024 Credit Facility attached as Exhibit 10.34 to this Annual Report and incorporated herein by reference.

Extension of Credit Facility with ERAS Capital LLC and Gerard Barron

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

The Third Amendment also provides that the 2024 Lenders may extend the term of the 2024 Credit Facility by up to two additional one-year periods (until June 30, 2028 at the latest) and that the 2024 Lenders may terminate the 2024 Credit Facility upon certain company financings.

The foregoing description of the Third Amendment does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the Third Amendment attached as Exhibit 10.45 to this Annual Report and incorporated herein by reference.

Extension of Allseas Working Capital Loan Agreement and Termination of Allseas 2023 Credit Facility

On March 24, 2025, we entered into a Letter Agreement (the “Letter Agreement”) with Allseas Investments SA (“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.

The foregoing description of the Letter Agreement does not purport to be a complete description of the rights and obligations of the parties thereunder and is qualified in its entirety by reference to the full text of the Letter Agreement attached as Exhibit 10.41 to this Annual Report and incorporated herein by reference.

Rule 10b5-1 Trading Arrangements

2 unchanged sentences

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Management and Corporate Governance,” “Code of Business Conduct and Ethics” and “Delinquent Section 16(a) Reports” in the Company’s proxy statement for the 2024 annual meeting of shareholders (the “Proxy Statement”).

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Management and Corporate Governance,” “Code of Business Conduct and Ethics” and “Delinquent Section 16(a) Reports”, if applicable, in our Proxy Statement for the 2025 annual meeting of shareholders (the “Proxy Statement”) to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024 and any other applicable sections of the Proxy Statement.

EXECUTIVE COMPENSATION

The response to this item is incorporated by reference from the discussion responsive thereto under the caption “ Executive Officer and Director Compensation ” in the Proxy Statement.

The response to this item is incorporated by reference from the discussion responsive thereto under the caption “ Executive Officer and Director Compensation ” in the Proxy Statement and any other applicable sections of the Proxy Statement.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Certain Relationships and Related Person Transactions” and “Management and Corporate Governance” in the Proxy Statement.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.

The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Proposal No.

3 - Appointment of the Independent Registered Public Accounting Firm” in the Proxy Statement and any other applicable sections of the Proxy Statement.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

22 unchanged sentences

(Exhibit 4.1)

Amended and Restated Registration Rights Agreement, by and between Sustainable Opportunities Acquisition Corp., Sustainable Opportunities Holdings LLC, the parties listed under Sponsor Group Holders on the signature page(s) thereto and the parties listed under DeepGreen Holders on the signature page(s) thereto

Form S-4/A (Exhibit 10.5 – Annex H)

Strategic Alliance Agreement, dated as of March 29, 2019, by and between DeepGreen Metals Inc.

and Allseas Group S.A.

Form of Class B Warrant to Purchase Common Stock

(Exhibit 4.1)

Pilot Mining Test Agreement dated as of July 8, 2019, by and between DeepGreen Metals Inc.

Strategic Alliance Agreement, dated as of March 29, 2019, by and between DeepGreen Metals Inc.

and Allseas Group S.A.

9 unchanged sentences

(Exhibit 10.1)

Exclusive Vessel Use Agreement, dated August 1, 2023, by and between TMC the metals company Inc.

and Allseas Group S.A.

(Exhibit 10.1)

Sponsorship Agreement, dated as of March 8, 2008, by and between the Kingdom of Tonga and Tonga Offshore Mining Limited

14 unchanged sentences

(Exhibit 10.19)

Employment Agreement, dated December 15, 2017, by and between DeepGreen Metals Inc.

and Gerard Barron

Employment Agreement, dated April 16, 2024, by and between DeepGreen Metals UAE and Gerard Barron

(Exhibit 10.1)

Employment Agreement, dated September 1, 2018, by and between DeepGreen Metals Inc.

Amended and Restated Employment Agreement, dated November 11, 2022, by and between TMC the metals company Inc.

and Erika Ilves

5 unchanged sentences

(Exhibit 10.2)

Services Agreement, dated April 9, 2024 by and between TMC the metals company Inc.

and Steve Jurvetson

(Exhibit 10.1)

TMC the metals company Inc.

16 unchanged sentences

(Exhibit 99.1)

Form S-4/A (Exhibit 10.5 – Annex H)

Form of Subscription Agreement for institutional investors, by and between Sustainable Opportunities Acquisition Corp.

and the subscriber parties thereto

(Exhibit 10.1)

(Exhibit 10.1 – Annex E-1)

Form of Subscription Agreement for accredited investors, by and between Sustainable Opportunities Acquisition Corp.

and the subscriber parties thereto

(Exhibit 10.2)

(Exhibit 10.2 – Annex E-2)

Form of Securities Purchase Agreement, dated August 12, 2022, by and among the Company and the Purchasers named therein

4 unchanged sentences

(Exhibit 10.3)

Form of Securities Purchase Agreement, dated August 14, 2023

(Exhibit 10.1)

Form of Securities Purchase Agreement, dated November 14, 2024

(Exhibit 10.1)

Form of First Amendment to Securities Purchase Agreement, dated November 26, 2024

(Exhibit 10.1)

At-The-Market Equity Distribution Agreement, dated December 22, 2022, by and among TMC the metals company Inc., Stifel, Nicolaus & Company, Incorporated and Wedbush Securities Inc.

9 unchanged sentences

Unsecured Credit Facility, dated March 22, 2023, by and between TMC the metals company Inc.

and Argentum Credit Virtuti GCV

and Argentum Cedit Virtuti GCV

(Exhibit 10.31)

Amendment to the Unsecured Credit Facility, dated July 31, 2023, by and between TMC the metals company Inc.

and Argentum Credit Virtuti GCV

and Argentum Cedit Virtuti GCV

(Exhibit 10.2)

Second Amendment to the Unsecured Credit Facility, dated March 22, 2024, by and between TMC the metals company Inc.

and Argentum Credit Virtuti GCV

and Argentum Cedit Virtuti GCV

Form 10-K (Exhibit 10.33)

Third Amendment to the Unsecured Credit Facility, dated August 16, 2024, by and between TMC the metals company Inc.

Argentum Cedit Virtuti GCV

(Exhibit 10.1)

Working Capital Loan Agreement, dated September 9, 2024, by and between TMC the metals company Inc.

and Allseas Investments SA

(Exhibit 10.1)

First Amendment to the Working Capital Loan Agreement, dated October 18, 2024, by and between the Company and Allseas Investments SA

(Exhibit 10.1)

Letter Agreement, dated March 24, 2025, by and among the Company, Allseas Investments SA and Argentum Cedit Virtuti GCV

Unsecured Credit Facility, dated March 22, 2024, by and among TMC the metals company Inc., Gerard Barron and ERAS Capital LLC

Exclusive Vessel Use Agreement, dated August 1, 2023, by and between TMC the metals company Inc.

and Allseas Group S.A.

(Exhibit 10.34)

Form of Securities Purchase Agreement, dated August 14, 2023

First Amendment to the Unsecured Credit Facility, dated August 13, 2024, by and between TMC the metals company Inc.

and Gerard Barron and ERAS Capital LLC

(Exhibit 10.5)

Second Amendment to the Unsecured Credit Facility, dated November 14, 2024, by and between TMC the metals company Inc.

and Gerard Barron and ERAS Capital LLC

Third Amendment to the Unsecured Credit Facility, dated March 26, 2025, by and between TMC the metals company Inc.

and Gerard Barron and ERAS Capital LLC

Insider Trading Policy

List of Subsidiaries

(Exhibit 21.1)

Consent of Ernst & Young LLP

4 unchanged sentences

(Exhibit 96.1)

Technical Report Summary — Initial Assessment of the TOML Mineral Resource, Clarion Clipperton Zone, Pacific Ocean, for Deep Green Metals Inc., effective as of March 26, 2021, by AMC Consultants Pty Ltd and other qualified persons.

Technical Report Summary — TOML Mineral Resource, Clarion Clipperton Zone, Pacific Ocean, for Deep Green Metals Inc., effective as of March 26, 2021, by AMC Consultants Pty Ltd and other qualified persons

(Exhibit 96.2)

1 unchanged sentence

Clawback Policy

(Exhibit 97.1)

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

31 unchanged sentences

March 27, 2025

/s/ Christian Madsbjerg

March 25, 2024

Christian Madsbjerg

/s/ Andrew Hall

March 27, 2025

/s/ Steve Jurvetson

March 27, 2025

Steve Jurvetson

/s/ Sheila Khama

6 unchanged sentences

Amelia Kinahoi Siamomua

/s/ Kathleen McAllister

/s/ Christian Madsbjerg

March 27, 2025

Kathleen McAllister

Christian Madsbjerg

/s/ Brendan May

March 27, 2025

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 9A. Controls and Procedures