What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-15 compared with 2024-08-14 · 212 added, 215 removed, 319 unchanged (57% of the section changed)

3 unchanged sentences

(in thousands of US Dollars, except share amounts)

September 30,

Receivables and prepayments

21 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Operating expenses

7 unchanged sentences

Fees and interest on borrowings and credit facilities

Net Loss and comprehensive loss for the period

Net loss for the period

Net loss per share - Basic and diluted

6 unchanged sentences

Comprehensive

Three months ended June 30, 2024

April 1, 2024

Three months ended September 30, 2024

Conversion of restricted share units, net of shares withheld for taxes (Note 11)

Shares issued from ATM (Note 12)

Shares issued as per At-the-Market Equity Distribution Agreement (Note 12)

Exercise of stock options (Note 11)

Share purchase under Employee Share Purchase Plan (Note 11)

Share-based compensation and expenses settled with equity (Note 11)

Loss for the period

June 30, 2024

Foreign currency translation adjustment

Net loss for the period

September 30, 2024

Common Shares

Comprehensive

Three months ended June 30, 2023

April 1, 2023

Three months ended September 30, 2023

Exercise of stock options

Exercise of warrant by Allseas

Shares issued to Allseas

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

Share purchase under Employee Share Purchase Plan

Issuance of shares and warrants under Registered Direct Offering, net of expenses

Share-based compensation and expenses settled with equity

Loss for the period

June 30, 2023

Net loss for the period

September 30, 2023

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4 unchanged sentences

Comprehensive

Six months ended June 30, 2024

Nine months ended September 30, 2024

January 1, 2024

5 unchanged sentences

Share-based compensation and expenses settled with equity (Note 11)

Loss for the period

June 30, 2024

Foreign currency translation adjustment

Net loss for the period

September 30, 2024

Common Shares

Comprehensive

Six months ended June 30, 2023

Nine months ended September 30, 2023

January 1, 2023

Exercise of stock options

Exercise of warrant by Allseas

Shares issued to Allseas

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

Issuance of shares and warrants under Registered Direct Offering, net of expenses

Share purchase under Employee Share Purchase Plan

Shares issued to Allseas

Share-based compensation and expenses settled with equity

Loss for the period

June 30, 2023

Net loss for the period

September 30, 2023

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands of US Dollars)

Six months ended

Nine months ended

September 30,

Cash provided by (used in)

20 unchanged sentences

Proceeds from Drawdown of Credit Facilities

Proceeds from Drawdown of Allseas Debt Agreement

Proceeds from Drawdown of Loan with Allseas Affiliate

Repayment of Loan with Allseas Affiliate

Proceeds from Drawdown of Loan with Allseas

Interest paid on amounts drawn from credit facilities

2 unchanged sentences

Proceeds from exercise of stock options

Proceeds from exercise of warrants by Allseas

Proceeds from issuance of shares

11 unchanged sentences

(“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.

The Company’s corporate office, registered address and records office is located at 10th floor, 595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5.

The Company’s 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.

2 unchanged sentences

Exploration and exploitation of seabed minerals in international waters is regulated by the International Seabed Authority (“ISA”), an intergovernmental organization established pursuant to the 1994 Agreement Relating to the Implementation of the United Nations Convention on the Law of the Sea.

The ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state.

The ISA grants contracts to sovereign states or private contractors sponsored by a sovereign state.

The Company’s wholly owned subsidiary, Nauru Ocean Resources Inc.

3 unchanged sentences

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.

(“DGE”) entered a services agreement (the “Marawa Services 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 6).

In November 2023, the Company entered into a binding Memorandum of Understanding (“MoU”) with Pacific Metals Co Ltd (PAMCO) of Japan pursuant to which PAMCO committed to complete a feasibility study whereby it would process nodules at its existing facilities and produce two products:

nickel-copper-cobalt alloy, an intermediate product used as feedstock to produce lithium-ion battery cathodes, and a manganese silicate product used to make silico-manganese alloy, a critical input into steel manufacturing.

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

1 unchanged sentence

The outcome of these matters cannot presently be determined because they are contingent on future events and may not be fully under the Company’s control.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Basis of Presentation

4 unchanged sentences

GAAP have been condensed or omitted in these unaudited condensed consolidated interim financial statements pursuant to such rules and regulation.

In management’s opinion, these unaudited condensed consolidated interim financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position, operating results for the periods presented, comprehensive loss, shareholder’s equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2024 or for any other period.

In management’s opinion, these unaudited condensed consolidated interim financial statements include all adjustments of a routine recurring nature necessary for the fair presentation of the Company’s statement of financial position, operating results for the periods presented, comprehensive loss, shareholder’s equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2024 or for any other period.

These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2023.

The Company has applied the same accounting policies as in the prior year, except as disclosed below.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Comparative figures reported in the Condensed Consolidated Balance Sheet, for software development costs and equipment, and figures reported in the Condensed Consolidated Statements of Cash Flows, for expenses settled with equity and changes in working capital have been reclassified to conform to the current period’s presentation.

2 unchanged sentences

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 condensed consolidated interim 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 11), valuation of Class A warrants (Note 10) as well as the valuation of private warrants (Note 10), the valuation of the Royalty liability (Note 7) and the valuation of leases (Note 6).

Significant estimates and assumptions reflected in these condensed consolidated interim financial statements include, but are not limited to, the evaluation of going concern, the valuation of share-based payments, including the valuation of incentive stock options (Note 11), the valuation of Class A warrants (Note 10) as well as the valuation of private warrants (Note 10), the valuation of the Royalty liability (Note 7) and the valuation of leases (Note 6).

Actual results could differ materially from those estimates.

10 unchanged sentences

In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

There were no transfers between fair value measurement levels during the three and six months ended June 30, 2024, and 2023.

As at June 30, 2024, and December 31, 2023, the carrying values of cash, receivables, and 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 issued by the Company.

These warrants and royalty liability are valued at fair value, which is disclosed in Note 10.

Recent Accounting Pronouncements Issued and Adopted

There were no recent accounting pronouncements issued and adopted by the Company during the period.

TMC the metals company Inc.

1 unchanged sentence

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

There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2024, and 2023.

As at September 30, 2024, and December 31, 2023, the carrying values of cash, receivables, and 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 issued by the Company.

These warrants (Note 10) and royalty liability (Note 7) are valued at fair value.

Recent Accounting Pronouncements Issued and Adopted

There were no recent accounting pronouncements issued and adopted by the Company during the period.

Strategic Alliance with Allseas and Affiliates

1 unchanged sentence

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.

For the three and six months ended June 30, 2024, Allseas provided the Company with engineering, project management and vessel use services consisting of lay-up and transit costs totaling $ 3.2 million and $ 6.9 million respectively which were recorded as mining, technological and process development within exploration and evaluation expenses (three months and six months ended June 30, 2023 - $ 1.9 million and $ 2.9 million respectively) (Note 8).

For the three and nine months ended September 30, 2024, Allseas provided the Company with engineering, project management and vessel use services consisting of lay-up and transit costs totalling $ 2.8 million and $ 9.6 million respectively which were recorded as mining, technological and process development costs within exploration and evaluation expenses (three months and nine months ended September 30, 2023 - $ 1.9 million and $ 4.8 million respectively) (Note 8).

Exclusive Vessel Use Agreement with Allseas

On August 1, 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas pursuant to which Allseas will give exclusive use of the vessel (“ Hidden Gem ”) to the Company in support of the development of the Project Zero Offshore Nodule Collection System.

On August 1, 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas pursuant to which Allseas provided exclusive use of the vessel (“Hidden Gem”) to the Company in support of the development of the Project Zero Offshore Nodule Collection System.

The Company determined that the Exclusive Vessel Use Agreement with Allseas is a lease agreement, classified as an operating lease.

For the three and six months ended June 30, 2024, the Company has recognized $ 0.5 million and $ 1 million, respectively as lease expense recorded as mining, technological and process development within exploration and evaluation expenses.

As at June 30, 2024, the net amount of the right-of-use asset is as follows:

For the three and nine months ended September 30, 2024, the Company has recognized $ 0.5 million and $ 1.4 million, respectively as lease expense recorded as mining, technological and process development within exploration and evaluation expenses.

As at September 30, 2024, the net amount of the right-of-use asset is as follows:

Right-of-use Asset

1 unchanged sentence

Lease expense during the period

Balance as at June 30, 2024

Credit Facility and Loan Agreement with Company Related to Allseas

Balance as at September 30, 2024

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

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 (“Credit Facility”), with Argentum Cedit 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.

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 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 Credit Facility.

The Company has the right to pre-pay the entire amount outstanding under the Credit Facility at any time before the Credit Facility’s maturity.

The Company has the ability to settle certain charges under this Credit Facility in cash or in equity at the discretion of the Company.

The Company has the ability to settle certain charges under this Credit Facility in cash or equity at the discretion of the Company.

The Credit Facility also contains customary events of default.

On March 22, 2024, the Company entered into the Second Amendment to the Unsecured Credit Facility with the Lender, 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.

During the three months and six months ended June 30, 2024, the Company has not drawn any amount from the Credit Facility and has incurred $ 0.3 million and $ 0.5 million, respectively (three months ended and six months ended June 30, 2023:

$ 0.3 million) as underutilization fees.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Under the amended 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 Credit Facility, to increase the borrowing limit of the Credit Facility to $ 27.5 million.

Under the terms of the Third Amendment, the borrowing limit will return to $ 25 million upon certain financing events.

During the three months and nine months ended September 30, 2024, the Company has not drawn any amount from the Credit Facility and has incurred $ 0.3 million and $ 0.8 million, respectively (three months ended and nine months ended September 30, 2023:

$ 0.3 million and $ 0.5 million, respectively) as underutilization fees.

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 “Loan”) on May 30, 2024.

The Loan has priority over the 2024 Credit Facility with Gerard Barron and ERAS Capital LLC (Note 14).

The Loan and accrued interest are payable to the Lender on or before the earlier of (i) the Company’s next financing and (ii) September 10, 2024 (maturity date).

The Loan accrues interest at a rate of 8 % per annum.

During the three and six months ended June 30, 2024, the Company has incurred $ 14 thousand as interest expense.

As at June 30, 2024, the total amount payable to Allseas and its affiliates was $ 22.8 million (December 31, 2023:

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 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 amounting to $ 2 million and the accrued interest amounting to $ 46 thousand.

During the three and nine months ended September 30, 2024, the Company incurred $ 32 thousand and $ 46 thousand, respectively as interest expense.

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

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

The Working Capital Loan is payable to the Lender 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).

During the three and nine months ended September 30, 2024, the Company incurred $ 31 thousand as interest expense.

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 (Note 17).

As at September 30, 2024, the total amount payable to Allseas and its affiliates was $ 29.7 million (December 31, 2023:

$ 13.8 million).

As at June 30, 2024, Allseas and its affiliates owned 53.8 million TMC common shares (2023:

As at September 30, 2024, Allseas and its affiliates owned 53.8 million TMC common shares (2023:

53.8 million TMC common shares) which constituted 16.6 % (December 31, 2023:

17.6 %) of total common shares outstanding.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Investment in Low Carbon Royalties

5 unchanged sentences

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 three and six months ended June 30, 2024, the Company’s share of the net loss generated by the Low Carbon Royalties was $ 62 thousand and $ 139 thousand, respectively (share of net loss for three months and six months ended June 30, 2023:

For the three and nine months ended September 30, 2024, the Company’s share of the net loss generated by the Low Carbon Royalties was $ 58 thousand and $ 197 thousand, respectively (share of net loss for three months and nine months ended September 30, 2023:

$ 0.1 million and $ 0.5 million respectively).

4 unchanged sentences

Investment as at December 31, 2023

Equity-accounted investment loss for the period ended June 30, 2024

Investment as at June 30, 2024

Equity-accounted investment loss for the period ended September 30, 2024

Investment as at September 30, 2024

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

2 unchanged sentences

The Company compares the specific characteristics of these transactions to estimate the fair value.

The fair value of the royalty liability as at June 30, 2024, remained unchanged at $ 14 million.

Financial results of Low Carbon Royalties as at and for the three and six months ended June 30, 2024 and 2023 are summarized below:

As at June 30,

The fair value of the royalty liability as at September 30, 2024, remained unchanged at $ 14 million.

Financial results of Low Carbon Royalties as at and for the three and nine months ended September 30, 2024 and 2023 are summarized below:

As at September 30,

Current Assets

1 unchanged sentence

Current Liabilities

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

ended June 30,

Three months ended

Nine months ended

September 30,

Royalty Income

1 unchanged sentence

Comprehensive Loss for the period

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Exploration and Evaluation Expenses

The detail of exploration and evaluation expenses is as follows:

Three months endedJune 30, 2024

Three months ended September 30, 2024

Environmental Studies

5 unchanged sentences

Permit Application Activities

Three months ended June 30, 2023

Three months ended September 30, 2023

Environmental Studies

4 unchanged sentences

Sponsorship, Training and Stakeholder Engagement

Six months ended June 30, 2024

Nine months ended September 30, 2024

Environmental Studies

5 unchanged sentences

Permit Application Activities

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Six months ended June 30, 2023

Nine months ended September 30, 2023

Environmental Studies

4 unchanged sentences

Sponsorship, Training and Stakeholder Engagement

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Registered Direct Offering

2 unchanged sentences

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.

As at June 30, 2024, all common shares and Class A Warrants to purchase common shares under the Registered Direct Offering had been issued and the Company received gross proceeds amounting to $ 24.9 million.

As at September 30, 2024, all common shares and Class A Warrants to purchase common shares under the 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.

2 unchanged sentences

Public Warrants

As at June 30, 2024, 15,000,000 (June 30, 2023 - 15,000,000 ) Public Warrants were outstanding.

As at September 30, 2024, 15,000,000 (September 30, 2023 - 15,000,000 ) Public Warrants were outstanding.

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

As at June 30, 2024, the value of outstanding Public Warrants of $ 19.5 million was recorded in additional paid in capital.

The exercise price for the Public Warrants is $ 11.50 per common share.

The Public Warrants will expire on September 9, 2026 or earlier upon redemption or liquidation.

As at September 30, 2024, the value of outstanding Public Warrants of $ 19.5 million was recorded in additional paid in capital.

Private Warrants

As at June 30, 2024, 9,500,000 (June 30, 2023 - 9,500,000 ) Private Warrants were outstanding.

As at September 30, 2024, 9,500,000 (September 30, 2023 - 9,500,000 ) Private Warrants were outstanding.

The exercise price for the Private Warrants is $ 11.50 per common share.

The Private Warrants will expire on September 9, 2026 or earlier upon redemption or liquidation.

The Private Warrants were valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement.

4 unchanged sentences

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

As at June 30, 2024, the fair value of outstanding Private Warrants of $ 1.9 million is recorded as warrants liability.

As at September 30, 2024, the fair value of outstanding Private Warrants of $ 0.9 million is recorded as warrants liability.

The following table presents the changes in the fair value of warrants liability:

Warrants liability as at December 31, 2023

Increase in fair value of warrants liability

Warrants liability as at June 30, 2024

Decrease in fair value of warrants liability

Warrants liability as at September 30, 2024

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

September 30,

Exercise price

2 unchanged sentences

Class A Warrants

As at June 30, 2024, 6,230,770 (June 30, 2023 – nil ) Class A warrants were outstanding, and the total fair value of the outstanding Class Warrants recorded in additional paid in capital was $ 4.7 million (December 31, 2023 - $ 3.2 million).

There were no exercises or redemptions of the Public Warrants, Private Warrants and Class A warrants during the three-month and six-month period ended June 30, 2024.

As at September 30, 2024, 6,230,770 (September 30, 2023 – nil ) Class A warrants were outstanding, and the total fair value of the outstanding Class Warrants recorded in additional paid in capital was $ 4.7 million (December 31, 2023 - $ 3.2 million).

There were no exercises or redemptions of the Public Warrants, Private Warrants and Class A warrants during the three-month and nine-month period ended September 30, 2024.

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 June 30, 2024, is 56,634,518 common shares, including 12,262,348 shares added to the Plan in January 2024 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.

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 September 30, 2024, is 56,634,518 common shares, including 12,262,348 shares added to the Plan in January 2024 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 from 2022 to 2031, 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.

1 unchanged sentence

Stock options

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

Jurvetson, a director of the Company (the “Agreement”).

The Agreement provides, among other things, that 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 Company’s 2021 Incentive Plan (“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.

As at September 30, 2024, there were 3,940,000 options outstanding under the Company’s 2021 Incentive Plan.

During the three and nine months ended September 30, 2024, the Company recognized $ 0.5 million and $ 0.9 million of share-based compensation expense reported as general and administrative expenses in the statement of loss and comprehensive loss.

As at September 30, 2024, there were 14,358,468 stock options outstanding under the Company’s 2018 Stock Option Short-Term Incentive Plan (“STIP”) and 9,644,874 stock options outstanding under the Company’s 2018 Stock Option Long-Term Incentive Plan (“LTIP”).

The Company has not granted any options under the STIP and LTIP since September 9, 2021 (date of the Business Combination) and has fully recognized the fair value of the options issued in prior periods under the STIP and LTIP.

TMC the metals company Inc.

1 unchanged sentence

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

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

The expected term is 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 three and six months ended June 30, 2024, the Company recognized $ 0.4 million of share-based compensation expense reported as general and administrative expenses in the statement of loss and comprehensive loss.

As at June 30, 2024, there were 14,443,188 stock options outstanding under the Company’s Short-Term Incentive Plan (“STIP”) and 9,644,874 stock options outstanding under the Company’s Long-Term Incentive Plan (“LTIP”).

During the six months ended June 30, 2024, the Company recorded the forfeiture of unvested stock options (issued under LTIP plans) thereby reversing $ 0.6 million previously recorded as share-based compensation expense in the statement of loss and comprehensive loss (six months ended June 30, 2023:

$ nil ), evenly apportioned between exploration and evaluation expenses (Note 8) and general and administration expenses.

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

2 unchanged sentences

Outstanding – December 31, 2023

Outstanding – June 30, 2024

Outstanding – September 30, 2024

Restricted Share Units (“RSU”)

1 unchanged sentence

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.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

A summary of the RSU activity during the six-month period ended June 30, 2024 is presented in the table below:

A summary of the RSU activity during the nine-month period ended September 30, 2024, is presented in the table below:

Number of RSUs

1 unchanged sentence

( 9,078,432 )

Outstanding – June 30, 2024

The details of RSUs granted by the Company during the three months and six months ended June 30, 2024 are as follows:

ended June 30,

Outstanding – September 30, 2024

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

The details of RSUs granted by the Company during the three months and nine months ended September 30, 2024 are as follows:

ended September 30,

Vesting Period

5 unchanged sentences

Total Units Granted

Of the 4,006,695 RSUs vesting immediately on grant date, 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.

Of the 206,260 RSUs vesting immediately on the grant date issued during the three months ended June 30, 2024, the Company granted 140,260 RSUs, to consultants (three months ended June 30, 2023:

nil ) resulting in $ 0.2 million, charged as general and administrative expenses for the three months ended June 30, 2024 (three ended June 30, 2023:

Of the 4,006,695 RSUs vesting immediately on the grant date issued during the six months ended June 30, 2024, the Company granted 186,593 RSUs, to consultants (six months ended June 30, 2023:

23,438 RSUs) resulting in $ 0.3 million, charged as general and administrative expenses for the six months ended June 30, 2024 (six months ended June 30, 2023:

Of the 160,823 RSUs vesting immediately on the grant date issued during the three months ended September 30, 2024, the Company granted 147,549 RSUs to consultants (three months ended September 30, 2023:

nil ) resulting in $ 0.2 million, charged as general and administrative expenses for the three months ended September 30, 2024 (three months ended September 30, 2023:

Of the 4,167,518 RSUs vesting immediately on the grant date issued during the nine months ended September 30, 2024, the Company granted 351,034 RSUs, to consultants (nine months ended September 30, 2023:

23,438 RSUs) resulting in $ 0.5 million, charged as general and administrative expenses (nine months ended September 30, 2023:

$ 23 thousand charged as general and administrative expenses).

During the three and six months ended June 30, 2024, the Company also granted 39,174 RSUs and 66,497 RSUs, respectively, to consultants as a prepayment for their services (three and six months ended June 30, 2023:

During the three and six months ended June 30, 2024, an aggregate of 476,189 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 $ 700,000 .

During the six months ended June 30, 2024, the Company granted 7,144,348 RSUs, as payment for the 2023 LTIP awards (six months ended June 30, 2023:

During the three and nine months ended September 30, 2024, the Company also granted 13,274 RSUs and 79,771 RSUs, respectively, to consultants as a prepayment for their services (three and nine months ended September 30, 2023:

nil and 15,625 units, respectively).

Of the 4,167,518 RSUs vesting immediately on grant date, 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.

Of the 493,430 units granted during the nine months ended September 30, 2024, an aggregate amount of 476,189 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.

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.

Of the 7,212,375 units granted during the nine months ended September 30, 2024, the Company granted 7,144,348 RSUs, as payment for the 2023 LTIP awards (nine months ended September 30, 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.

TMC the metals company Inc.

1 unchanged sentence

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

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.

On April 16, 2024, the Company entered into a new employment agreement with Gerard Barron, the Company’s Chief Executive Officer and Chairman under which the Company granted Mr.

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

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

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

2 unchanged sentences

and one -third of the Signing RSUs 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

Pursuant to the 2024 Barron 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 2024 Barron Employment Agreement.

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.

During the three and six months ended June 30, 2024, a total of $ 5.3 million and $ 8.5 million, respectively, was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs (three and six months ended June 30, 2023:

The grant date fair value of the RSUs vesting based on market conditions was determined using the Monte-Carlo valuation method.

During the three and nine months ended September 30, 2024, a total of $ 5.6 million and $ 14.1 million, respectively, was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs (three and nine months ended September 30, 2023:

$ 2.4 million and $ 6.4 million, respectively).

For the three and six months ended June 30, 2024, a total of $ 3.1 million and $ 4.4 million, respectively, was recognized as share-based compensation expense and related to exploration and evaluation activities (three and six months ended June 30, 2023 - $ 1.4 million and $ 2.3 million, respectively).

The amount of share-based compensation expense related to general and administration matters for three and six months ended June 30, 2024 was $ 2.2 million and $ 4.1 million, respectively (three and six months ended June 30, 2023 - $ 1 million and $ 1.7 million, respectively).

As at June 30, 2024, total unrecognized share-based compensation expense for RSUs was $ 31.7 million (December 31, 2023 - $ 6.9 million).

As at June 30, 2024, an aggregate of 72,318 vested RSUs were being processed and due to be converted into common shares.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

For the three and nine months ended September 30, 2024, share-based compensation expense related to exploration and evaluation activities amounted to $ 3.2 million and $ 7.6 million, respectively, (three and nine months ended September 30, 2023 - $ 1.4 million and $ 3.6 million, respectively).

The amount of share-based compensation expense related to general and administration matters for three and nine months ended September 30, 2024 was $ 2.4 million and $ 6.5 million, respectively (three and nine months ended September 30, 2023 - $ 1 million and $ 2.8 million, respectively).

As at September 30, 2024, total unrecognized share-based compensation expense for RSUs was $ 26 million (December 31, 2023 - $ 6.9 million).

As at September 30, 2024, an aggregate of 137,760 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 June 30, 2024, there were 10,998,032 common shares reserved for issuance under the ESPP.

As of September 30, 2024, there were 10,998,032 common shares reserved for issuance under the ESPP.

This included 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.

During the three and six months ended June 30, 2024, a total of $ 13 thousand and $ 31 thousand, respectively, was charged to the condensed consolidated statement of loss and comprehensive loss (for three and six months ended June 30, 2023:

During the three and nine months ended September 30, 2024, a total of $ 3 thousand and $ 33 thousand, respectively, was charged to the condensed consolidated statement of loss and comprehensive loss (for three and nine months ended September 30, 2023:

$ 28 thousand and $ 47 thousand, respectively) as share-based compensation expense for ESPP issuances.

For the three and six months ended June 30, 2024, a total of $ 6 thousand and $ 15 thousand, respectively, of this recognized share-based compensation expense was related to exploration and evaluation activities (three and six months ended June 30, 2023 - $ 19 thousand and $ 26 thousand, respectively).

The amount of this share-based compensation expense related to general and administration matters for three and six months ended June 30, 2024 was $ 7 thousand and $ 16 thousand, respectively (three and six months ended June 30, 2023 - $ 9 thousand and $ 21 thousand, respectively).

On May 31, 2024, the Company issued 27,394 common shares to its employees, thereby converting employee payroll contributions over the previous six months into shares, as prescribed in its ESPP program (in the three and six months ended June 30, 2023, 83,572 common shares were issued).

For the three and nine months ended September 30, 2024, a total of $ 2 thousand and $ 17 thousand, respectively, of this recognized share-based compensation expense was related to exploration and evaluation activities (three and nine months ended September 30, 2023 - $ 19 thousand and $ 26 thousand, respectively).

The amount of this share-based compensation expense related to general and administration matters for three and nine months ended September 30, 2024 was $ 1 thousand and $ 16 thousand, respectively (three and nine months ended September 30, 2023 - $ 9 thousand and $ 21 thousand, respectively).

On May 31, 2024, the Company issued 27,394 common shares to its employees, thereby converting employee payroll contributions over the previous six months into shares, as prescribed in its ESPP program (in the three and nine months ended September 30, 2023, 83,572 common shares were issued).

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

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.

During the three months and six months ended, the Company issued 1,634,588 common shares at an average share price of $ 1.61 resulting in net proceeds amounting to $ 2.6 million after incurring $ 42 thousand as commission and fees.

During the three and nine months ended September 30, 2024, the Company issued 1,617,000 common shares and 3,251,588 common shares, respectively.

For three and nine months ended September 30, 2024, the common shares were issued at an average share price of $ 1.45 and $ 1.53 , respectively resulting in net proceeds amounting to $ 2.3 million and $ 4.9 million, after incurring $ 71 thousand and $ 113 thousand, respectively, as commission and fees.

Loss per Share

3 unchanged sentences

Anti-dilutive equivalent common shares were as follows:

Six months ended

Nine months ended

September 30,

Outstanding options to purchase common shares

4 unchanged sentences

Total anti-dilutive common equivalent shares

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

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.

A director of DGE is employed through SSCS.

Consulting services during the three and six months ended June 30, 2024 totaled $ 25 thousand and $ 50 thousand, respectively (three and six months ended June 30, 2023 - $ 69 thousand and $ 138 thousand, respectively), out of which for three and six months ended June 30, 2024 a total of $ 18 thousand $ 35 thousand, respectively (three and six months ended June 30, 2023 - $ 55 thousand and $ 110 thousand, respectively), is disclosed as exploration labor within exploration and evaluation expenses (Note 8) and $ 7 thousand and $ 15 thousand, respectively, for three and six months ended June 30, 2024 is disclosed as general and administration expenses (three and six months ended June 30, 2023 - $ 14 thousand and $ 28 thousand, respectively).

As at June 30, 2024, the amount payable to SSCS was $ nil (December 31, 2023 - $ 17 thousand).

One of the Company’s directors who was appointed in 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 services.

During the three and six months ended June 30, 2024, Stonehaven Campaigns Limited provided consulting services amounting to nil and $ 12 thousand recorded in general and administrative expenses.

During the three and six months ended June 30, 2024, Robertsbridge Consultants Limited provided consulting services amounting to $ 5 thousand and $ 36 thousand recorded in general and administrative expenses.

As at June 30, 2024, the amount payable to both Stonehaven Campaigns Limited and Robertsbridge Consultants Limited was nil .

Consulting services during the three and nine months ended September 30, 2024 totaled $ 25 thousand and $ 75 thousand, respectively (three and nine months ended September 30, 2023 - $ 40 thousand and $ 177 thousand, respectively).

Consulting services provided for three and nine months ended September 30, 2024 amounting to $ 17 thousand $ 52 thousand, respectively (three and nine months ended September 30, 2023 - $ 55 thousand and $ 165 thousand, respectively), are disclosed as exploration labor within exploration and evaluation expenses (Note 8).

Consulting services amounting to $ 8 thousand and $ 23 thousand, respectively, for three and nine months ended September 30, 2024 are disclosed as general and administrative expenses (three and nine months ended September 30, 2023 - $ 8 thousand and $ 36 thousand, respectively).

As at September 30, 2024, the amount payable to SSCS was $ 17 thousand (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 services.

During the three and nine months ended September 30, 2024, Stonehaven Campaigns Limited provided consulting services amounting to $ 6 thousand and $ 18 thousand, respectively, recorded in general and administrative expenses.

During the three and nine months ended September 30, 2024, Robertsbridge Consultants Limited provided consulting services amounting to $ 16 thousand and $ 21 thousand, respectively, recorded in general and administrative expenses.

As at September 30, 2024, the amount payable to both Stonehaven Campaigns Limited and Robertsbridge Consultants Limited was $ 18 thousand and $ 16 thousand, respectively.

On January 30, 2024, as part of the Registered Direct Offering (Note 9), 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 director, (collectively, the “2024 Lenders”), pursuant to which, the Company may borrow from the 2024 Lenders up to $ 20,000,000 in the aggregate ( $ 10,000,000 from each of the 2024 Lenders), from time to time, subject to certain conditions.

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

The Company will pay an underutilization fee equal to 4.0 % per annum payable semi-annually for any amounts that remain undrawn under the 2024 Credit Facility.

The Company has the right to pre-pay the entire amount outstanding under the 2024 Credit Facility at any time, before the 2024 Credit Facility’s maturity of September 22, 2025.

The 2024 Credit Facility also contains customary events of default.

The 2024 Credit Facility will terminate automatically if the Company or any of its subsidiaries raise at least $ 50,000,000 in the aggregate (i) through the issuance of any of the Company’s or its subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement.

During the three and six months ended June 30, 2024, the Company has drawn $ 3.9 million from the 2024 Credit Facility and incurred $ 50 thousand as interest expense.

During the three and six months ended June 30, 2024, the Company incurred $ 0.2 million as underutilization fees, which would be payable only in the event the 2024 Credit Facility is not drawn down upon at the time such fees are payable.

In the second quarter of 2024, the Company repaid interest amounting to $ 25 thousand and underutilization fees amounting to $ 0.1 million to the 2024 Lenders.

The borrowing limit of the 2024 Credit Facility was increased to $ 25 million ($ 12.5 million from each of the 2024 Lenders) subsequent to June 30, 2024 (Note 17).

Apart from the above-mentioned transactions, the Company had transactions with Allseas which are detailed in Note 6 and issued share-based grants to Company’s directors which are detailed in Note 11.

Commitments and Contingent Liabilities

On June 15, 2024, the Company signed a retainership agreement pursuant to which a non-refundable retainer fee of $ 0.4 million is payable.

TMC the metals company Inc.

1 unchanged sentence

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

Contingent Liability

On October 28, 2021, a shareholder filed a putative class action against the Company, one of the Company’s executives and a former director in federal district court for the Eastern District of New York, captioned Caper v.

TMC The Metals Company Inc.

F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard.

The complaint alleges that all defendants violated Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Messrs.

Barron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about the Company’s operations and prospects during the period from March 4, 2021 and October 5, 2021.

On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v.

TMC the Metals Company, Inc.

These cases have been consolidated.

On March 6, 2022, a lead plaintiff was selected.

An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations, with the Plaintiff seeking to recover compensable damages caused by the alleged wrongdoings.

The Company denies any allegations of wrongdoing and filed and served the plaintiff a motion to dismiss on July 12, 2022 and intend to defend against this lawsuit.

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

The parties are currently awaiting a ruling.

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

If the motion to dismiss is unsuccessful, there is a possibility that the Company may incur a loss in this matter.

Such losses or range of possible losses either cannot be reliably estimated.

A resolution of this lawsuit adverse to the Company or the other defendants, however, could have a material effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved.

On 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.

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 December 31, 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 13, 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 .

During the three and nine months ended September 30, 2024, the Company has drawn from the 2024 Credit Facility $ 0.3 million and $ 4.2 million, respectively, and incurred $ 96 thousand and $ 146 thousand, respectively, as interest expense.

During the three and nine months ended September 30, 2024, the Company incurred $ 0.2 million and $ 0.4 million, respectively, as underutilization fees, which would be payable only in the event the 2024 Credit Facility is not drawn down upon at the time such fees are payable.

During the three and nine months ended September 30, 2024, the Company repaid interest amounting to $ nil and $ 25 thousand, respectively, and underutilization fees amounting to $ nil and $ 0.1 million, respectively to the 2024 Lenders.

On October 9, 2024, the Company drew $ 0.1 million from the 2024 Credit Facility.

Apart from the above-mentioned transactions, the Company had transactions with Allseas which are detailed in Note 6 and issued share-based grants to the Company’s directors which are detailed in Note 11.

Contingent Liabilities

On January 23, 2023, certain 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.

7 unchanged sentences

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 its motion to dismiss the breach of the Subscription Agreement claim.

The Company filed a notice of appeal regarding the Court’s denial of its motion to dismiss the breach of the Subscription Agreement claim in March 2024 and the appeal was heard by the Court on November 8, 2024.

The parties are currently awaiting a ruling.

There is no assurance that the Company will be successful in its 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.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

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

Segmented Information

The Company’s business consists of only one operating segment, namely exploration of seafloor polymetallic nodules, which includes the development of a metallurgical process to treat such seafloor polymetallic nodules.

Subsequent Event

On August 13, 2024, the Company entered into the First Amendment to the 2024 Credit Facility with the 2024 Lenders, Gerard Barron and ERAS Capital LLC, 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.

Subsequent Events

On November 14, 2024, the Company entered into a securities purchase agreement with certain new and existing institutional investors for the sale of an aggregate of 17,500,000 common shares (the “Shares”) and accompanying Class B warrants (the “Class B Warrants”), in a registered direct offering.

The offering price was $ 1.00 per Share (gross proceeds of $ 17.5 million), with each Share including an accompanying Class B Warrant to purchase 0.5 common shares.

The Class B Warrants are exercisable immediately upon issuance at a price of $ 2.00 per share and expire five years from issuance.

The Class B Warrants include customary anti-dilution protections and a repurchase feature, permitting the Company to repurchase the warrants for $ 0.0001 per Common Share underlying the Class B Warrants if the volume-weighted average price of the Company’s common shares exceeds $ 5.00 per share for each trading day in a consecutive 30 -trading-day period.

Upon closing of the Offering, under the terms of the Third Amendment, the borrowing limit under the Allseas Credit Facility will return to $ 25 million.

On November 14, 2024, DeepGreen Engineering Pte.

(“DeepGreen”) issued a formal termination notice to Marawa Research and Exploration Limited, ending the Services Agreement dated October 1, 2013 (the “Agreement”), pursuant to DeepGreen’s right to terminate for convenience under the Agreement.

The termination will take effect two months from the date of the notice, on January 14, 2025.

The impact of the cancellation of this agreement will not have a material impact on the Company’s financial results.

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

What changed 10-Q

Item 1. Financial Statements