TMC the metals Co Inc. 10-Q

Item 1. Financial Statements TMC the metals company Inc. Condensed Consolidated Balance Sheets (in thousands of US Dollars, except share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at ​ As at ​ ​ September 30, December 31, ASSETS Note 2024 2023 Current ​ ​ ​ ​ ​ Cash ​ ​ ​ $ 360 $ 6,842 Receivables and prepayments ​ ​ ​ 2,557 ​ 1,978 ​ ​ ​ ​ 2,917 ​ 8,820 Non-current ​ ​ ​ ​ ​ ​ Exploration contracts ​ ​ 43,150 ​ 43,150 Right of use asset ​ 6 ​ ​ 4,291 ​ ​ 5,721 Equipment ​ ​ ​ 854 ​ 1,133 Software ​ ​ ​ ​ 1,868 ​ ​ 1,643 Investment ​ 7 ​ ​ 8,232 ​ ​ 8,429 ​ ​ ​ ​ 58,395 ​ 60,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ASSETS ​ ​ ​ $ 61,312 $ 68,896 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ ​ ​ ​ ​ Current ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ ​ 48,065 ​ 31,334 Short-term debt ​ 6,14 ​ ​ 9,175 ​ ​ — ​ ​ ​ ​ 57,240 ​ 31,334 Non-current ​ ​ ​ ​ ​ ​ Deferred tax liability ​ ​ 10,675 ​ 10,675 Royalty liability ​ 7 ​ ​ 14,000 ​ ​ 14,000 Warrants liability 10 ​ 866 ​ 1,969 ​ ​ ​ ​ ​ 25,541 ​ ​ 26,644 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES ​ ​ ​ $ 82,781 $ 57,978 ​ ​ ​ ​ ​ ​ ​ ​ ​ EQUITY ​ ​ ​ ​ ​ ​ Common shares (unlimited shares, no par value – issued: 324,131,896 (December 31, 2023 – 306,558,710 )) ​ ​ 463,366 ​ 438,239 Class A - J Special Shares ​ ​ ​ ​ — ​ ​ — Additional paid in capital ​ ​ ​ 131,152 ​ 122,797 Accumulated other comprehensive loss ​ ​ ​ ( 1,203 ) ​ ( 1,216 ) Deficit ​ ​ ​ ( 614,784 ) ​ ( 548,902 ) TOTAL EQUITY ​ ​ ​ ( 21,469 ) ​ 10,918 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES AND EQUITY ​ ​ ​ $ 61,312 $ 68,896 ​ Nature of Operations (Note 1) Contingent Liabilities (Note 15) Subsequent Event (Note 17) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Table of Contents TMC the metals company Inc. Condensed Consolidated Statements of Loss and Comprehensive Loss (in thousands of US Dollars, except share and per share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended ​ Nine months ended ​ ​ September 30, ​ September 30, ​ Note 2024 2023 2024 2023 Operating expenses ​ ​ ​ ​ ​ ​ Exploration and evaluation expenses 8 ​ $ 11,813 $ 7,905 $ 42,339 $ 23,172 General and administrative expenses ​ ​ ​ ​ 8,149 ​ 4,613 ​ 22,600 ​ 15,958 Operating loss ​ ​ ​ ​ 19,962 ​ 12,518 ​ 64,939 ​ 39,130 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other items ​ ​ ​ ​ ​ ​ ​ ​ Equity-accounted investment loss ​ 7 ​ ​ 58 ​ ​ 119 ​ ​ 197 ​ ​ 475 Change in fair value of warrant liability ​ 10 ​ ​ ( 1,054 ) ​ ​ ( 117 ) ​ ​ ( 1,103 ) ​ ​ 1,214 Foreign exchange loss (gain) ​ ​ ​ 946 ​ 14 ​ 596 ​ 66 Interest income ​ ​ ​ ​ ( 7 ) ​ ( 319 ) ​ ( 125 ) ​ ( 1,092 ) Fees and interest on borrowings and credit facilities ​ 6,14 ​ ​ 615 ​ 252 ​ 1,378 ​ 529 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss for the period ​ ​ ​ $ 20,520 $ 12,467 $ 65,882 $ 40,322 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share - Basic and diluted ​ ​ $ 0.06 $ 0.04 $ 0.21 $ 0.14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding – basic and diluted ​ ​ ​ 323,663,607 ​ 294,636,496 ​ 318,710,622 ​ 282,745,892 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ 6 Table of Contents TMC the metals company Inc. Condensed Consolidated Statements of Changes in Equity (in thousands of US Dollars, except share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred ​ Special ​ Paid in ​ Comprehensive ​ ​ ​ ​ ​ ​ Three months ended September 30, 2024 Shares ​ Amount Shares Shares Capital Loss Deficit Total July 1, 2024 ​ 322,241,883 ​ $ 460,573 ​ $ — ​ $ — $ 125,300 $ ( 1,216 ) $ ( 594,264 ) $ ( 9,607 ) Conversion of restricted share units, net of shares withheld for taxes (Note 11) ​ 188,293 ​ ​ 384 ​ ​ — ​ ​ — ​ ​ ( 384 ) ​ ​ — ​ ​ — ​ ​ — Shares issued as per At-the-Market Equity Distribution Agreement (Note 12) ​ 1,617,000 ​ ​ 2,279 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 2,279 Exercise of stock options (Note 11) ​ 84,720 ​ ​ 130 ​ ​ — ​ ​ — ​ ​ ( 76 ) ​ ​ — ​ ​ — ​ ​ 54 Share-based compensation and expenses settled with equity (Note 11) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,312 ​ ​ — ​ ​ — ​ ​ 6,312 Foreign currency translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 13 ​ ​ — ​ ​ 13 Net loss for the period ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ — ​ ( 20,520 ) ​ ( 20,520 ) September 30, 2024 ​ 324,131,896 ​ $ 463,366 ​ $ — ​ $ — $ 131,152 $ ( 1,203 ) $ ( 614,784 ) $ ( 21,469 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ ​ ​ ​ ​ Additional Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred ​ Special ​ Paid in ​ Comprehensive ​ ​ ​ ​ ​ ​ Three months ended September 30, 2023 Shares Amount Shares Shares Capital Loss Deficit Total July 1, 2023 ​ 281,136,415 ​ $ 345,775 ​ $ — ​ $ — ​ $ 188,722 ​ $ ( 1,216 ) ​ $ ( 502,976 ) ​ $ 30,305 Exercise of stock options 120,000 ​ ​ 144 ​ ​ — ​ — ​ ( 67 ) ​ — ​ — ​ 77 Exercise of warrant by Allseas ​ 11,578,620 ​ ​ 70,016 ​ ​ — ​ ​ — ​ ​ ( 69,900 ) ​ ​ — ​ ​ — ​ ​ 116 Shares issued to Allseas ​ 4,150,000 ​ ​ 6,516 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,516 Conversion of restricted share units, net of shares withheld for taxes ​ 183,281 ​ ​ 299 ​ ​ — ​ ​ — ​ ​ ( 299 ) ​ ​ — ​ ​ — ​ ​ — Issuance of shares and warrants under Registered Direct Offering, net of expenses ​ 7,961,540 ​ ​ 11,349 ​ ​ — ​ ​ — ​ ​ 3,179 ​ ​ — ​ ​ — ​ ​ 14,528 Share-based compensation and expenses settled with equity — ​ ​ — ​ ​ — ​ — ​ 2,533 ​ — ​ — ​ 2,533 Net loss for the period — ​ ​ — ​ ​ — ​ — ​ — ​ — ​ ( 12,467 ) ​ ( 12,467 ) September 30, 2023 305,129,856 ​ $ 434,099 ​ $ — $ — $ 124,168 $ ( 1,216 ) $ ( 515,443 ) $ 41,608 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ ​ 7 Table of Contents TMC the metals company Inc. Condensed Consolidated Statements of Changes in Equity (in thousands of US Dollars, except share amounts) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Preferred ​ Special ​ Paid in ​ Comprehensive ​ ​ ​ ​ ​ ​ Nine months ended September 30, 2024 Shares Amount Shares Shares Capital Loss Deficit Total January 1, 2024 ​ 306,558,710 ​ $ 438,239 ​ $ — ​ $ — ​ $ 122,797 ​ $ ( 1,216 ) ​ $ ( 548,902 ) ​ $ 10,918 Issuance of shares and warrants under Registered Direct Offering, net of expenses (Note 9) 4,500,000 ​ 7,447 ​ — ​ ​ — ​ 1,553 ​ — ​ — ​ 9,000 Conversion of restricted share units, net of shares withheld for taxes (Note 11) ​ 9,078,432 ​ ​ 10,869 ​ ​ — ​ ​ — ​ ​ ( 10,869 ) ​ ​ — ​ ​ — ​ ​ — Shares issued as per At-the-Market Equity Distribution Agreement (Note 12) ​ 3,251,588 ​ ​ 4,866 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 4,866 Exercise of stock options (Note 11) ​ 715,772 ​ ​ 1,891 ​ ​ — ​ ​ — ​ ​ ( 1,428 ) ​ ​ — ​ ​ — ​ ​ 463 Share purchase under Employee Share Purchase Plan (Note 11) 27,394 ​ 54 ​ — ​ ​ — ​ ( 30 ) ​ — ​ — ​ 24 Share-based compensation and expenses settled with equity (Note 11) ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 19,129 ​ ​ — ​ ​ — ​ ​ 19,129 Foreign currency translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 13 ​ ​ — ​ ​ 13 Net loss for the period — ​ — ​ — ​ ​ — ​ — ​ — ​ ( 65,882 ) ​ ( 65,882 ) September 30, 2024 324,131,896 $ 463,366 $ — ​ $ — $ 131,152 $ ( 1,203 ) $ ( 614,784 ) $ ( 21,469 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Common Shares ​ Preferred ​ Special ​ Paid in ​ Comprehensive ​ ​ ​ ​ ​ ​ Nine months ended September 30, 2023 Shares Amount Shares Shares Capital Loss Deficit Total January 1, 2023 ​ 266,812,131 ​ $ 332,882 ​ $ — ​ $ — ​ $ 184,960 ​ $ ( 1,216 ) ​ $ ( 475,121 ) ​ $ 41,505 Exercise of stock options ​ 120,000 ​ ​ 144 ​ ​ — ​ ​ — ​ ​ ( 67 ) ​ ​ — ​ ​ — ​ ​ 77 Exercise of warrant by Allseas 11,578,620 ​ 70,016 ​ ​ — ​ — ​ ( 69,900 ) ​ — ​ — ​ 116 Shares issued to Allseas 15,000,000 ​ 15,910 ​ ​ — ​ — ​ — ​ — ​ — ​ 15,910 Conversion of restricted share units, net of shares withheld for taxes ​ 3,573,993 ​ ​ 3,704 ​ ​ — ​ ​ — ​ ​ ( 3,674 ) ​ ​ — ​ ​ — ​ ​ 30 Issuance of shares and warrants under Registered Direct Offering, net of expenses 7,961,540 ​ 11,349 ​ ​ — ​ — ​ 3,179 ​ — ​ — ​ 14,528 Share purchase under Employee Share Purchase Plan 83,572 ​ 94 ​ ​ — ​ — ​ ( 45 ) ​ — ​ — ​ 49 Share-based compensation and expenses settled with equity ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 9,715 ​ ​ — ​ ​ — ​ ​ 9,715 Net loss for the period — ​ — ​ ​ — ​ — ​ — ​ — ​ ( 40,322 ) ​ ( 40,322 ) September 30, 2023 305,129,856 ​ $ 434,099 ​ $ — ​ $ — ​ ​ 124,168 ​ $ ( 1,216 ) ​ $ ( 515,443 ) ​ $ 41,608 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ ​ ​ 8 Table of Contents TMC the metals company Inc. Condensed Consolidated Statements of Cash Flows (in thousands of US Dollars) (Unaudited) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ Nine months ended ​ ​ September 30, September 30, ​ Note 2024 2023 Cash provided by (used in) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ ​ ​ ​ ​ ​ ​ Loss for the period ​ ​ $ ( 65,882 ) $ ( 40,322 ) Items not affecting cash: ​ ​ ​ ​ ​ ​ Amortization ​ ​ ​ ​ 280 ​ ​ 262 Lease Expense ​ 6 ​ ​ 1,430 ​ ​ 318 Accrued interest on credit facilities ​ 6,14 ​ ​ 150 ​ ​ — Share-based compensation and expenses settled with equity ​ 11 ​ ​ 19,129 ​ ​ 9,715 Equity-accounted investment loss 7 ​ ​ 197 ​ 475 Change in fair value of warrants liability 10 ​ ​ ( 1,103 ) ​ 1,214 Unrealized foreign exchange ​ ​ ​ ​ ( 334 ) ​ ​ ( 24 ) Changes in working capital: ​ ​ ​ ​ ​ ​ Receivables and prepayments ​ ​ ​ ( 580 ) ​ ( 2,393 ) Accounts payable and accrued liabilities ​ ​ ​ 17,036 ​ ( 13,633 ) Net cash used in operating activities ​ ​ ​ ​ ( 29,677 ) ​ ( 44,388 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Investing activities ​ ​ ​ ​ ​ ​ Acquisition of equipment and software ​ ​ ​ ​ ( 465 ) ​ ​ ( 175 ) Net cash used in investing activities ​ ​ ​ ​ ( 465 ) ​ ( 175 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing activities ​ ​ ​ ​ ​ ​ Proceeds from registered direct offering ​ 9 ​ ​ 9,000 ​ ​ 15,723 Expenses paid for registered direct offering ​ 9 ​ ​ ( 142 ) ​ ​ ( 779 ) Proceeds from Shares issued from ATM ​ 12 ​ ​ 4,866 ​ ​ — Proceeds from Drawdown of Credit Facilities ​ 14 ​ ​ 4,175 ​ ​ — Proceeds from Drawdown of Loan with Allseas Affiliate ​ 6 ​ ​ 2,000 ​ ​ — Repayment of Loan with Allseas Affiliate ​ 6 ​ ​ ( 2,000 ) ​ ​ — Proceeds from Drawdown of Loan with Allseas ​ 6 ​ ​ 5,000 ​ ​ — Interest paid on amounts drawn from credit facilities ​ 14 ​ ​ ( 73 ) ​ ​ — Proceeds from Low Carbon Royalties Investment ​ ​ ​ ​ — ​ ​ 5,000 Proceeds from employee stock plans ​ 11 ​ ​ 24 ​ ​ 49 Proceeds from exercise of stock options ​ 11 ​ ​ 463 ​ ​ 77 Proceeds from exercise of warrants by Allseas ​ ​ ​ ​ — ​ ​ 116 Proceeds from issuance of shares ​ ​ ​ ​ — ​ ​ 30 Net cash provided by financing activities ​ ​ ​ ​ 23,313 ​ ​ 20,216 ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease in cash ​ ​ $ ( 6,829 ) $ ( 24,347 ) Impact of exchange rate changes on cash ​ ​ ​ 347 ​ 24 Cash - beginning of period ​ ​ ​ 6,842 ​ 46,876 Cash - end of period ​ ​ $ 360 $ 22,553 ​ The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. ​ ​ ​ 9 Table of Contents 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) (Unaudited) 1. Nature of Operations TMC the metals company Inc. (“TMC” or the “Company”) was incorporated as a Cayman Islands exempted company limited by shares on December 18, 2019, and continued as a corporation under the laws of the province of British Columbia, Canada on September 9, 2021. 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. 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 private contractors sponsored by a sovereign state. The Company’s wholly owned subsidiary, Nauru Ocean Resources Inc. (“NORI”), was granted an exploration contract (the “NORI Exploration Contract”) by the ISA in July 2011 under the sponsorship of the Republic of Nauru (“Nauru”) giving NORI exclusive rights to explore for polymetallic nodules in an area covering 74,830 square kilometers in the CCZ (“NORI Area”). On March 31, 2020, the Company acquired Tonga Offshore Mining Limited (“TOML”), which was granted an exploration contract (the “TOML Exploration Contract”) by the ISA in January 2012 under the sponsorship of the Kingdom of Tonga (“Tonga”) and has exclusive rights to explore for polymetallic nodules covering an area of 74,713 square kilometers in the CCZ (“TOML Area”). Marawa Research and Exploration Limited (“Marawa”), an entity owned and sponsored by the Republic of Kiribati (“Kiribati”), was granted rights by the ISA to polymetallic nodules exploration in an area of 74,990 square kilometers in the CCZ (“Marawa Area”). In 2013, the Company through its subsidiary DeepGreen Engineering Pte. Ltd. (“DGE”) entered 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: financing being arranged by the Company to continue operations, development of a nodule collection system for the recovery of polymetallic nodules from the seafloor as well as development of processing technology for the treatment of polymetallic nodules at commercial scale, the establishment of mineable reserves, the commercial and technical feasibility of seafloor polymetallic nodule collection and processing, metal prices, and regulatory approvals and environmental permitting for commercial operations. The outcome of these matters cannot presently be determined because they are contingent on future events and may not be fully under the Company’s control. ​ 10 Table of Contents 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) (Unaudited) 2. Basis of Presentation These unaudited condensed consolidated interim financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statements. Accordingly, certain information and footnote disclosures required by U.S. 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 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. 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. 3. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the notes thereto. Significant estimates and assumptions reflected in these 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. 4. Fair Value of Financial Instruments Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value. The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. In accordance with US GAAP, the Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: ● Level 1  - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. ● Level 2  - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. ● Level 3  - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. 11 Table of Contents 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) (Unaudited) 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. 5. Recent Accounting Pronouncements Issued and Adopted There were no recent accounting pronouncements issued and adopted by the Company during the period. 6. Strategic Alliance with Allseas and Affiliates 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. 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 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 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 Balance as at December 31, 2023 ​ $ 5,721 Lease expense during the period ​ ( 1,430 ) Balance as at September 30, 2024 ​ $ 4,291 ​ ​ 12 Table of Contents 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) (Unaudited) 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 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 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 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 “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 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. 13 Table of Contents 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) (Unaudited) ​ 7. 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. 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 %. 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 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). ​ ​ ​ ​ ​ ​ Investment Fair value of NORI Royalty ​ $ 14,000 Cash received ​ ​ ( 5,000 ) Cost of Investment on Closing Date ​ ​ 9,000 Equity-accounted investment loss for the year ended 2023 ​ ( 571 ) Investment as at December 31, 2023 ​ $ 8,429 Equity-accounted investment loss for the period ended September 30, 2024 ​ ​ ( 197 ) Investment as at September 30, 2024 ​ $ 8,232 ​ 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. The fair value was determined using a market approach which entails examining recent royalty transactions prior to the reporting date, focusing on those transactions that involve similar metals as contained in NORI’s polymetallic nodules. The Company compares the specific characteristics of these transactions to estimate the fair value. The fair value of the royalty liability as at 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, As at September 30, ​ 2024 2023 Current Assets ​ $ 1,553 1,091 Non-Current Assets ​ 25,488 27,406 Current Liabilities ​ 96 131 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ended Nine months ended ​ September 30, September 30, September 30, September 30, ​ 2024 2023 2024 2023 Royalty Income ​ $ 356 62 1,143 186 Total Revenue ​ 368 76 1,182 255 Comprehensive Loss for the period ​ $ ( 179 ) ( 371 ) ( 612 ) ( 1,449 ) ​ ​ 14 Table of Contents 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) (Unaudited) 8 . Exploration and Evaluation Expenses The detail of exploration and evaluation expenses is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI ​ Marawa ​ TOML ​ ​ ​ ​ ​ Exploration ​ Option ​ Exploration ​ ​ ​ Three months ended September 30, 2024 Contract Agreement Contract Total Environmental Studies $ 978 $ 53 $ — $ 1,031 Exploration Labor ​ 2,467 ​ 21 ​ 160 ​ 2,648 Share-Based Compensation (Note 11) ​ 2,860 ​ 8 ​ 376 ​ 3,244 Mining, Technological and Process Development ​ 3,250 ​ — ​ 281 ​ 3,531 Prefeasibility Studies ​ ​ 253 ​ ​ — ​ ​ — ​ ​ 253 Sponsorship, Training and Stakeholder Engagement ​ 681 ​ 31 ​ 197 ​ 909 Permit Application Activities ​ ​ 22 ​ ​ — ​ ​ — ​ ​ 22 Other ​ 159 ​ — ​ 16 ​ 175 ​ $ 10,670 $ 113 $ 1,030 $ 11,813 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI ​ Marawa ​ TOML ​ ​ ​ ​ ​ Exploration ​ Option ​ Exploration ​ ​ ​ Three months ended September 30, 2023 Contract Agreement Contract Total Environmental Studies $ 906 ​ $ — ​ $ — ​ $ 906 Exploration Labor ​ 1,392 ​ ​ 50 ​ ​ 161 ​ ​ 1,603 Share-Based Compensation ​ 1,242 ​ 43 ​ 132 ​ 1,417 Mining, Technological and Process Development ​ 2,300 ​ — ​ 207 ​ 2,507 Prefeasibility Studies ​ 300 ​ — ​ — ​ 300 Sponsorship, Training and Stakeholder Engagement ​ 654 ​ ​ 55 ​ ​ 297 ​ ​ 1,006 Other ​ ​ 163 ​ — ​ 3 ​ 166 ​ $ 6,957 ​ $ 148 ​ $ 800 ​ $ 7,905 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI Marawa TOML ​ ​ ​ Exploration Option Exploration ​ ​ ​ Nine months ended September 30, 2024 Contract Agreement Contract ​ Total Environmental Studies ​ $ 4,297 ​ $ 53 ​ $ — ​ $ 4,350 Exploration Labor ​ 6,874 ​ 61 ​ 470 ​ 7,405 Share-Based Compensation (Note 11) ​ 6,779 ​ 7 ​ 552 ​ 7,338 Mining, Technological and Process Development ​ 18,128 ​ — ​ 937 ​ 19,065 Prefeasibility Studies ​ 838 ​ — ​ — ​ 838 Sponsorship, Training and Stakeholder Engagement ​ 1,925 ​ 92 ​ 505 ​ 2,522 Permit Application Activities ​ 225 ​ — ​ — ​ 225 Other ​ 519 ​ — ​ 77 ​ 596 ​ ​ $ 39,585 ​ $ 213 ​ $ 2,541 ​ $ 42,339 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI Marawa TOML ​ ​ ​ Exploration Option Exploration ​ ​ ​ Nine months ended September 30, 2023 Contract Agreement Contract ​ Total Environmental Studies ​ $ 5,433 ​ $ — ​ $ — ​ $ 5,433 Exploration Labor ​ 3,637 ​ 136 ​ 430 ​ 4,203 Share-Based Compensation ​ 3,330 ​ 112 ​ 347 ​ 3,789 Mining, Technological and Process Development ​ 5,287 ​ — ​ 509 ​ 5,796 Prefeasibility Studies ​ 1,105 ​ — ​ — ​ 1,105 Sponsorship, Training and Stakeholder Engagement ​ 1,557 ​ 176 ​ 756 ​ 2,489 Other ​ 354 ​ — ​ 3 ​ 357 ​ ​ $ 20,703 ​ $ 424 ​ $ 2,045 ​ $ 23,172 ​ ​ 15 Table of Contents 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) (Unaudited) 9. 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 (“Class A Warrants) (Note 10). 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. 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. Out of the total net proceeds received of $ 23.6 million, the net proceeds attributable to common shares were $ 18.9 million and the net proceeds attributable to Class A Warrants were $ 4.7 million. 10 . Warrants The Company issued 15,000,000 common share warrants as part of its predecessor’s initial public offering in May 2020 (“Public Warrants”) and 9,500,000 private placement common share warrants in a private placement simultaneously with the closing of its predecessor’s initial public offering (“Private Warrants”). Public Warrants 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. 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 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. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected volatility of the Company’s common shares. 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. ​ 16 Table of Contents 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) (Unaudited) 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: ​ ​ ​ ​ ​ ​ Private ​ ​ Warrants Warrants liability as at December 31, 2023 ​ $ 1,969 Decrease in fair value of warrants liability ​ ( 1,103 ) Warrants liability as at September 30, 2024 ​ $ 866 ​ The fair value of the Private Warrants was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ September 30, ​ December 31, ​ 2024 2023 Exercise price ​ $ 11.50 ​ $ 11.50 Share price ​ $ 1.06 ​ $ 1.10 Volatility ​ ​ 103.21 % ​ 105.34 % Term ​ ​ 1.94 years ​ 2.69 years Risk-free rate ​ ​ 3.60 % ​ 3.98 % Dividend yield ​ ​ 0.0 % ​ 0.0 % ​ Class A Warrants 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. ​ 11 . 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 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. Share-based awards consisting of Restricted Share Units (STIP and LTIP) and options granted by TMC have been issued under the 2021 Incentive Equity Plan. Stock options 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. 17 Table of Contents 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) (Unaudited) A continuity schedule summarizing the movements in the Company’s stock options under the various plans is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Number of Number of Options ​ ​ Options ​ Options Outstanding ​ ​ Outstanding ​ Outstanding under ​ ​ under STIP under LTIP Incentive Plan Outstanding – December 31, 2022 15,356,340 9,783,922 ​ — Granted ​ — ​ — ​ — Expired ( 162,100 ) — ​ — Exercised ( 120,000 ) — ​ — Outstanding – December 31, 2023 15,074,240 9,783,922 ​ — Granted ​ — ​ — ​ 3,940,000 Forfeited — ( 139,048 ) ​ — Exercised ( 715,772 ) — ​ — Outstanding – September 30, 2024 14,358,468 9,644,874 ​ 3,940,000 ​ Restricted Share Units (“RSU”) 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 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 during the nine-month period ended September 30, 2024, is presented in the table below: ​ ​ ​ ​ ​ Number of RSUs ​ ​ Outstanding Outstanding – December 31, 2023 12,484,880 Granted 32,707,638 Forfeited ( 380,581 ) Exercised ( 9,078,432 ) Outstanding – September 30, 2024 35,733,505 ​ ​ 18 Table of Contents 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) (Unaudited) The details of RSUs granted by the Company during the three months and nine months ended September 30, 2024 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three months ​ Three months Nine months ​ Nine months ​ ​ ended September 30, ​ ended September 30, ​ ended September 30, ​ ended September 30, Vesting Period 2024 2023 2024 2023 Vesting Immediately (1) ​ 160,823 ​ — ​ 4,167,518 ​ 3,237,710 Vesting fully on the first anniversary of the grant date (2) — — 493,430 1,014,349 Vesting in thirds on each anniversary of the grant date (3) — — 7,212,375 8,683,486 Vesting in fourths on each anniversary of the grant date 132,435 — 834,315 343,750 Vesting based on market conditions (4) ​ — ​ — ​ 20,000,000 ​ — Total Units Granted ​ 293,258 ​ — ​ 32,707,638 ​ 13,279,295 1. 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: nil ). 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 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. 2. 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. 3. 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. 19 Table of Contents 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) (Unaudited) 4. 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: one -third of the Signing RSUs vest on achievement of a Closing Price of $ 7.50 ; one -third of the Signing RSUs vest on achievement of a Closing Price of $ 10.00 ; 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 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. 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 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 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 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 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). ​ 20 Table of Contents 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) (Unaudited) 12. 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 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. 13 . 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. Anti-dilutive equivalent common shares were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Nine months ended ​ Nine months ended ​ ​ September 30, ​ September 30, ​ 2024 2023 Outstanding options to purchase common shares ​ 27,943,343 25,020,262 Outstanding RSUs ​ 35,733,505 13,477,784 Outstanding shares under ESPP ​ 11,027 ​ 77,241 Outstanding warrants ​ 30,730,770 ​ 28,480,770 Outstanding Special Shares and options to purchase Special Shares ​ 136,239,964 ​ 136,239,964 Total anti-dilutive common equivalent shares ​ 230,658,609 203,296,021 ​ ​ 14 . Related Party Transactions One of the Company’s subsidiaries has a consulting agreement with SSCS Pte. Ltd. (“SSCS”) to manage offshore engineering studies. A director of DGE is employed through SSCS. Consulting services during the 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. 21 Table of Contents 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) (Unaudited) 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 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. ​ 15 . 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. v. Sustainable Opportunities Acquisition Corp. n/k/a TMC The Metals Company Inc., Index No. 650449/2023 (N.Y. Sup. Ct.). The Company filed a motion to dismiss on March 31, 2023, after which the plaintiffs filed an amended complaint on June 5, 2023. The amended complaint alleges that the Company breached the representations and warranties in the plaintiffs’ private placement Subscription Agreements and breached the covenant of good faith and fair dealing. The Plaintiffs are seeking to recover compensable damages caused by the alleged wrongdoings. The Company 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 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. ​ 22 Table of Contents 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) (Unaudited) ​ 16. 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. ​ 17. 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. Ltd. (“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. ​ ​ 23 ​ Table of Contents