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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-27 · 334 added, 253 removed, 229 unchanged (72% of the section changed)

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You should read the risk factors set forth in Item 1A of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We are a deep-sea minerals exploration company focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the CCZ, about 1,500 miles south-west of San Diego, California.

We are a deep seabed minerals developer focused on the collection, processing and refining of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone (“CCZ”), with NORI Area D located about 1,500 miles (or 2,400 kilometers) south-west of San Diego, California.

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

Polymetallic nodules are discrete rocks that sit unattached to the seafloor, occur in significant quantities in the CCZ and have high concentrations of nickel, copper, cobalt and manganese in a single rock.

These four metals contained in the polymetallic nodules are critical for the transition to low carbon energy.

Our resource definition work to date shows that nodules in our contract areas represent the world’s largest estimated undeveloped source of the four critical metals contained in nodules.

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

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

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

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

Exploration and exploitation of seafloor minerals in international waters is regulated by the ISA, an intergovernmental organization established pursuant to the 1994 Agreement Relating to the Implementation of the UNCLOS.

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

The ISA requires that a contractor obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS, and such nation must maintain effective supervision and regulatory control over such sponsored contractor.

The ISA has issued a total of 19 polymetallic nodule exploration contracts covering approximately 1.28 million square kilometers, or 0.4% of the global seafloor, 17 of which are in the CCZ.

We hold exclusive exploration and commercial rights to two of the 17 polymetallic nodule contract areas in the CCZ through our subsidiaries NORI and TOML, sponsored by Nauru and Tonga, respectively.

We have key strategic alliances with (i) Allseas, a leading global offshore contractor, which developed and tested a pilot collection system, and is now working to modify it into the first commercial production system and (ii) Glencore which holds offtake rights to 50% of the NORI nickel and copper production if produced from a DGE-owned or controlled facility.

In addition, we have worked with engineering firm Hatch and consultants KPM to develop a near-zero solid waste flowsheet.

The primary processing stages of the flowsheet from nodule to NiCuCo matte intermediate were demonstrated as part of our pilot plant program at FLSmidth and XPS’ facilities.

The matte refining stages are being tested at SGS Lakefield.

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

The four metals and REEs contained in the polymetallic nodules are on the U.S.

Department of Interior’s “2025 List of Critical Minerals”, with end-uses in strategic sectors including semiconductors and AI data centers, steel manufacturing, the defense and marine industrial base.

Nickel was included on the list of 13 minerals selected by the U.S.

Department of War in March 2026 for targeted procurement efforts through the Defense Industrial Base Consortium.

Our resource definition work to date shows that nodules in our contract areas represent the world’s largest estimated undeveloped resource of several of these critical metals.

If we are able to collect polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to initially produce nickel, cobalt and copper-bearing intermediate and metal cathode products as well as a manganese silicate product of approximately 40% manganese comparable to medium-grade manganese ore.

Once in production, we may explore expanding into other product formats including silicomanganese alloy, battery-grade sulfates and precursor Cathode Active Materials (pCAM), as well as extracting REEs contained in nodules.

We are now in the development stage following the release of the results of a pre-feasibility study on one of our development areas in a report titled S-K 1300 Prefeasibility Study for NORI Area D Technical Report Summary , dated August 4, 2025, prepared by AMC Consultants Pty Ltd.

and other qualified persons (the “NORI-D PFS”), which declared the world’s first mineral reserves for a seafloor polymetallic nodule project demonstrating the project’s economic viability.

We also recently released an initial assessment of certain of our other development areas in a report titled S-K 1300 Technical Report Summary—Initial Assessment of TOML and NORI Properties , Clarion-Clipperton Zone, dated August 4, 2025, prepared by AMC Consultants Pty Lt.

and other qualified persons (the “TOML and NORI IA” together with the NORI-D PFS, the “Technical Reports”).

We have yet to obtain a commercial recovery permit or other related offshore and onshore permits from the regulators.

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

Two parallel regulatory regimes exist to regulate deep seabed exploration and extraction activities in the high seas.

The United States adopted the Deep Seabed Hard Mineral Resources Act of 1980 (“DSHMRA”), a U.S.

domestic statute administered by the U.S.

Department of Commerce through the National Oceanic and Atmospheric Administration (“NOAA”) to regulate deep-sea mining activities of its citizens in the high seas.

NOAA implemented regulations for exploration licenses in 1981 and for commercial recovery permits in 1989 and amended these regulations introducing a consolidated exploration license and commercial recovery permit application process in 2026.

In parallel, the International Seabed Authority (“ISA”), comprised today of 171 countries and the European Union was established in 1994, pursuant to the United Nations Convention on the Law of the Sea (“UNCLOS”) to regulate deep seabed exploration and exploitation activities of the nationals of Member States.

The ISA has adopted exploration regulations in 2000 (amended in 2013 and 2014) and issued 19 polymetallic nodule exploration contracts (17 of which are located in the CCZ) but has been unable to adopt the final exploitation regulations, standards and guidelines despite initiating work in 2014.

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

The United States has remained a persistent objector to UNCLOS ratification, primarily due to its Part XI seabed mining provisions.

We continue focusing on advancing our commercial production strategy under the DSHMRA regime.

In April 2025, our wholly owned subsidiary, The Metals Company USA, LLC (“ TMC USA”), submitted two exploration license applications (covering 187,017 square kilometers in the CCZ referred to as TMC USA-A and TMC USA-B) and one commercial recovery permit application (covering 25,160 square kilometers in the CCZ referred to as TMC USA-A) to NOAA.

Following the introduction of the consolidated application process by NOAA in January 2026, TMC USA submitted a consolidated exploration license and commercial recovery permit application covering a subset of TMC USA-A area previously applied over in April 2025.

The application areas in total are estimated to hold approximately 1.639 billion wet tonnes of measured, indicated and inferred mineral resources.

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

We believe that DSHMRA provides a viable and robust regulatory path to commercial production, distinct from the ISA regime under UNCLOS, which despite expectations to the contrary, has repeatedly failed to adopt the Regulations and Standards and Guidelines on the Exploitation of Mineral Resources in the Area.

On April 24, 2025, the Executive Order 14825, titled “Unleashing America’s Offshore Critical Minerals and Resources” directed the Commerce Secretary to implement an expedited permitting process under DSHMRA.

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

These departments were also directed to review and support domestic processing capabilities for seabed mineral resources.

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

regulatory pathway, we continue to maintain our ISA contracts and comply with all of our contractual obligations under the ISA system.

While the ISA does not have jurisdiction over activities conducted under the regulatory authority of the United States, we maintain two ISA exploration contracts in the CCZ, one held by our subsidiary Nauru Ocean Resources Inc.

(“NORI”), sponsored by the Republic of Nauru (“Nauru”), and another held by Tonga Offshore Mining Limited (“TOML”), sponsored by the Kingdom of Tonga (“Tonga”).

Operations of NORI and TOML in the CCZ are being conducted under our ISA exploration contracts and will be conducted under these contracts until TMC USA receives an exploration license or commercial recovery permit under DSHMRA from NOAA.

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

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

and (iv) Mariana Minerals, a software-first mineral developer and operator working as part of TMC USA’s owners’ team to accelerate the development of potential domestic onshore processing and refining facilities (“Mariana”) and (v) Glencore International AG (“Glencore”) which holds offtake rights to 50% of the NORI nickel and copper production if produced from a TMC-owned or controlled facility.

In addition, we are working with engineering firm Hatch Ltd.

(“Hatch”) and consultants Kingston Process Metallurgy Inc.

(“KPM”) to develop, test and engineer a near-zero solid waste flowsheet.

The primary processing stages of the flowsheet from nodule to NiCuCo matte intermediate were demonstrated as part of our pilot plant program at FLSmidth facilities in Pennsuylvania, USA and XPS’ (Glencore subsidiary) facilities in Ontario, Canada;

and later at industrial scale at PAMCO’s facilities in Hachinohe, Japan.

The matte refining stages have been tested at an SGS facility in Lakefield Canada with positive results.

The near-zero solid waste flowsheet provides a design that is expected to serve as the basis for our onshore processing facilities.

In November 2022, we entered into a non-binding MoU with Pacific Metals Co Ltd (PAMCO) of Japan pursuant to which PAMCO completed prefeasibility work assessing the prospect of processing nodules using their existing facilities.

In November 2023, we entered into a binding MoU with PAMCO whereby they committed to completing a feasibility study (expected to be completed by mid-2025) to toll treat 1.3 million tonnes of wet polymetallic nodules per year at its Hachinohe, Japan smelting facility, provided we obtain an exploitation contract from the ISA.

The toll treatment is intended to take place on a dedicated Rotary Kiln Electric Arc Furnace (“RKEF”) processing line 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.

We expect this partnership to progress to a definitive tolling agreement in 2025, subject to successful evaluation study outcomes and agreement to mutually acceptable commercial terms.

There can be no assurance that we will enter into such definitive strategic alliance in a particular time period, or at all, or on terms similar to those set

forth in the binding MoU, or that if such definitive tolling agreement is entered into by us or that the existing facility will be able to successfully process nodules in a particular time period, or at all.

We are currently focused on preparing our application for a plan of work to the ISA for our first exploitation contract for the NORI contract area.

Given that it is unlikely that the ISA Council would consider any application for a plan of work for exploitation before its next session in March 2025 and to ensure clarity on the submission process, consideration of the Application, and timeline, the Republic of Nauru, in consultation with NORI, formally requested that this issue be added to the agenda of the Council’s March 2025 meeting.

Nauru’s proposed agenda item was strongly opposed by Chile, and it is unlikely for there to be an agreed upon process until after an application is received.

Based on the current timeline in the consolidated draft regulations issued February 2024, the ISA application review and approval process is expected to be approximately one year from the filing date.

See “ Project and Regulatory Updates - ISA Developments ” below for a further discussion on recent developments at the ISA.

To reach our objective and initiate commercial production, we are:

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

In addition, we are also in the initial stages of considering the possibility of a U.S.-based regulatory pathway with the U.S.

National Oceanic and Atmospheric Administration (“NOAA”) and the U.S.

Department of Commerce under the U.S.

Deep Seabed Hard Mineral Resources Act (“DSHMRA”) for the commercial production of deep-sea polymetallic nodules in the CCZ.

We are still in the exploration phase and have not yet declared mineral reserves.

In addition, we do not have the applicable environmental and other permits required to build and/or operate commercial scale polymetallic nodule processing and refining plants on land.

On March 19, 2026, we signed a Strategic Partnership Agreement with Mariana focusing on the potential development of a nodule processing and refining facility in the Port of Brownsville, Texas as part of our owner’s team.

To reach our objective and initiate commercial production, we are working to:

(i) further refine our project economics, (ii) completed the development and commision a commercial offshore nodule collection system, (iii) continue to assess the environmental, social and cultural impacts of offshore nodule collection, and (iv) secure existing foreign and/or develop new domestic U.S.

onshore facilities to process collected polymetallic nodules into a manganese silicate product, an intermediate nickel-copper-cobalt matte product and end-products of nickel, cobalt and copper metal.

2025 Highlights

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Developments with our Projects

June 27, 2025 Submission Date for Subsidiary NORI’s ISA Application, and Expanded Company Strategy

NORI has set the date of June 27, 2025 for its expected submission of its ISA exploitation application.

According to the ISA Council’s decisions ISBA/28/C/24 and ISBA/28/C/25, if NORI submits an application for a plan of work for exploitation before the RRPs have been adopted, the ISA Council at its next meeting, as a matter of priority, will consider the process for considering such an application.

The ISA Council is not scheduled to meet again until March 2025 and we believe it is unlikely that the ISA Council would consider an application for a plan of work for exploitation before this session.

In light of this, Nauru formally requested that the ISA clarify the submission and review process for such an application at the March 2025 meetings before NORI submits the Application and, therefore, has decided to submit the Application after the March 2025 meetings on June 27, 2025.

At the March 2025 meetings, Nauru’s proposed agenda item was strongly opposed by Chile, and it is unlikely for there to be an agreed upon process until after an application is received.

Termination of Marawa Agreement

On November 14, 2024, DeepGreen Engineering Pte.

(“DeepGreen”) delivered 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 became effective on January 14, 2025, and we no longer have any exploration or other rights to the area of the CCZ that was covered by the Agreement.

The termination is not expected to have a material adverse effect on our financial position or operations, with non-material ongoing costs and no termination penalties applicable under the Agreement.

World-First Production of Nickel Sulfate from Deep-Seafloor Polymetallic Nodules

In April 2024, we announced that we had successfully produced the world’s first nickel sulfate derived exclusively from seafloor polymetallic nodules during pilot-scale nodule processing.

In partnership with SGS Canada Inc, the testing was undertaken on samples of nickel-cobalt-copper matte produced by us in 2021 using our efficient flowsheet to process high-grade nickel matte directly to nickel sulfate without making nickel metal, while producing fertilizer byproducts instead of solid waste or tailings.

Extensive Submission of Deep-Sea Environmental Data to the ISA

In May 2024, we announced that our subsidiary NORI had made a second submission of key environmental data from all prior environmental baseline campaigns conducted in the NORI Area D exploration area up to January 2022 to DeepData, an open database of contractor data managed by the ISA.

The submission of this batch of data includes an extensive set of geochemical and biological samples from across the water column.

World-First Cobalt Sulfate Produced from Deep-Seafloor Polymetallic Nodules

On June 12, 2024, we announced that we successfully produced the world’s first cobalt sulfate derived exclusively from seafloor polymetallic nodules.

The cobalt sulfate was generated during bench-scale testing of our hydrometallurgical flowsheet design with SGS Canada Inc.

Based on samples of nickel-cobalt-copper matte first produced by us in 2021, SGS tested our efficient flowsheet to process high-grade nickel-copper-cobalt matte directly to high-purity cobalt sulfate without making cobalt metal, while producing fertilizer byproducts instead of solid waste or tailings.

The milestone followed the news in May 2024 of our successful production of nickel sulfate, a key raw material input used in the production of energy-dense EV batteries.

Third Annual Impact Report Published

On July 29, 2024, we published our third annual Impact Report to provide an update on key milestones achieved in our assessment of the environmental impacts of nodule collection including, what we believe, is the successful collection of sufficient quantities of environmental baseline and impact data to develop an Environmental Impact Statement and Environmental Mitigation and Management Plan (EMMP) for the world’s first deep-seafloor nodule collection project.

TMC and PAMCO Successfully Produce Calcine in Commercial-Scale Processing of Polymetallic Nodules

In September 2024, we announced that we had successfully produced high temperature material (calcine) during the first phase of a commercial-scale campaign to process a 2,000-tonne sample of deep-seafloor polymetallic nodules at our partner PAMCO’s Hachinohe Rotary Kiln Electric-Arc Furnace facility in Hachinohe, Japan.

Approximately 500 tonnes of calcine were produced.

On February 18, 2025, we announced that PAMCO had successfully smelted 450 tonnes of calcine into 35 tonnes of NiCuCo alloy and 320 tonnes of Mn silicate products.

ISA Developments

ISA Consolidated Draft Regulations

In February 2024, the ISA released the first consolidated draft regulations on exploitation of Mineral resources in the Area.

The revised second consolidated text was released in November 2024.

Negotiations on the revised second consolidated text began during part 1 of the ISA’s 30 th Session.

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

On August 4, 2025, we released (i) the NORI-D PFS, which declared the world’s first mineral reserves for a seafloor polymetallic nodule project demonstrating the project’s economic viability, and the TOML and NORI IA, which provided a concept level valuation for the resources outside of NORI Area D.

The NORI-D PFS covers a portion of the area that is included in NORI’s ISA exploration contract and in TMC USA’s consolidated application for exploration license and commercial recovery permit (TMC USA-A) under DSHMRA.

The TOML and NORI IA covers the remaining areas held under NORI’s and TOML’s ISA exploration contracts and portions of the areas covered under TMC USA’s applications for exploration license and commercial recovery permits under DSHMRA.

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

Seabed Mining Code

On April 29, 2025, we announced that TMC USA had submitted the first-ever application for a commercial recovery permit and two exploration licenses under DSHMRA.

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

TMC USA also submitted two exploration license applications:

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

The Company believes the TMC USA-A and USA-B exploration areas contain 1.635 billion wet tonnes of polymetallic nodules, with an additional potential exploration upside.

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

NOAA Confirms Full Compliance of TMC USA’s Exploration License Applications

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

Both applications entered the certification stage in late July 2025.

The news follows earlier determinations by NOAA in May 2025 that the applications were in substantial compliance, which we believe demonstrates a systematic regulatory process under DSHMRA as we target a fourth quarter 2027 commissioning, subject to timely obtaining all necessary regulatory approvals.

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

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

North America is largely reliant on foreign sources of manganese.

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

TMC and PAMCO Achieve Nodule Processing Milestone

On February 18, 2025, we announced that PAMCO had successfully smelted 450 tonnes of calcine into 35 tonnes of NiCuCo alloy and 320 tonnes of Mn silicate products, during a campaign to process a 2,000-tonne sample of deep-seafloor polymetallic nodules at our partner PAMCO’s Hachinohe Rotary Kiln Electric-Arc Furnace facility in Hachinohe, Japan, demonstrating the process at scale.

The process data and operational experience gathered during the processing trial was used by PAMCO to complete a feasibility study in June 2025 which will inform expected definitive processing agreements between the parties.

Regulatory Developments

TMC Welcomes U.S.

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

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

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

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

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

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

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

Corporate Developments

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

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

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

regulatory regime.

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

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

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

regulatory regime.

Rutger Bosland, Pioneering Engineer and Technical Lead on Development of TMC’s Nodule Collection System, Joins TMC to Drive Commercial Readiness

On April 15, 2025, we announced that Rutger Bosland, the engineer and technical lead who oversaw the design, build, and successful test deployment of Allseas’ integrated nodule collection system, had joined the Company as Chief Innovation and Offshore Technology Officer (CIOTO).

Rutger will lead offshore innovation and efforts to scale our technologies for commercial production.

He brings world-class expertise in deep-sea mining, naval architecture, and offshore operations to TMC, having led a team of 80+ engineers in developing TMC’s nodule collection system, and Allseas’ program to scale-up nodule collection technology in preparation for TMC’s planned commercial operations.

Industry Developments

TMC Applauds U.S.

Congressional Mandate for 2025 Defense Department Feasibility Study on Nodule Refining

On December 30, 2024, we welcomed the signing of legislation calling for financial support from the Defense Department’s Industrial Base Policy office to “assess the feasibility of improving domestic capabilities for refining polymetallic nodule-derived intermediates into high-purity nickel, cobalt sulfate, and copper.” The legislation, signed into law by President Biden on December 23, 2024, was led by the HASC and calls for the completion of a feasibility study by the end of 2025 for a nodule-derived intermediate refinery which would bring the U.S.

closer to addressing the biggest vulnerability in its domestic battery supply chains – nickel refining – as identified in Executive Order 14017 from 2021.

In addition, our U.S.

subsidiary has an outstanding application seeking a $9 million grant under the Defense Production Act Title III program for feasibility work on a domestic refinery for nodule-derived intermediate products.

Responsible Use of Seafloor Resources Act (RUSRA)

In March 2024, legislation was introduced in the U.S.

House of Representatives calling for the U.S.

to “support international governance of seafloor resource exploration and responsible polymetallic nodule collection by allied partners”, and to “provide financial, diplomatic, or other forms of support for seafloor nodule collection, processing and refining.”

TMC CEO Testifies to U.S.

House of Representatives on Benefits of Nodules

In September 2024, our CEO Gerard Barron gave testimony during a meeting of the Critical Mineral Policy Working Group for the House Select Committee on the Chinese Communist Party to discuss the U.S.’ heavy reliance on Chinese imports of critical minerals and policy solutions to incentivize greater cooperation with allies to create alternative supplies.

Barron spoke to the potential of seafloor nodules to secure U.S.

supplies of key minerals for the energy transition and defense sectors.

Rebuttal to Publication

In July 2024, Nature Geoscience published a paper claiming that seafloor nodules produce oxygen in the absence of sunlight.

Since the paper’s publication, multiple rebuttals have been submitted to Nature warning of serious flaws with the paper’s methodology and claims, prompting calls for the paper to be retracted.

Researchers at the University of Tokyo and University of Gothenburg are among the experts that have submitted pre-print rebuttals to the article’s author.

Our own rebuttal, published September 19, 2024, notes selective reporting of data and omission of key evidence, including experiments that show oxygen levels increasing without nodules, directly contradicting the authors’ claims.

TMC Announces Registered Direct Offering

On November 14, 2024, we 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 “2024 Registered Direct Offering”).

The offering price was $1.00 per Share, resulting in initial gross proceeds of $17.5 million ($16.5 million after associated fees), 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.

On November 26, 2024, we entered into the First Amendment to the Securities Purchase Agreement, increasing the offering by an additional 2,400,000 common shares and accompanying Class B Warrants to purchase 1,200,000 common shares on the same terms and conditions.

As a result, the total number of Shares and accompanying Class B Warrants issued in the registered direct offering increased to 19,900,000 Shares and Class B Warrants to purchase 9,950,000 common shares, bringing the aggregate gross proceeds to $19.9 million, all of which has been received, before deducting offering expenses.

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

Amendment to 2023 Credit Facility with Allseas Affiliate

On March 22, 2023, we entered into a $25 million Unsecured Credit Facility (the “2023 Credit Facility”) with Argentum Cedit Virtuti GCV, the parent of Allseas Investments S.A.

(“Allseas Investments”) and an affiliate of Allseas, which was amended on July 31, 2023.

On March 22, 2024, we entered into the Second Amendment to the Unsecured Credit Facility with Argentum Cedit Virtuti GCV to further extend the 2023 Credit Facility to August 31, 2025 and to provide that the underutilization fee thereunder shall cease to be payable after the date on which we or the Lender gives notice of termination of the agreement On August 16, 2024, the Company entered into the Third Amendment to the 2023 Credit Facility, to increase the borrowing limit of the 2023 Credit Facility to $27.5 million.

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

2024 Credit Facility with ERAS Capital LLC and Gerard Barron

On March 22, 2024, we entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar (collectively, the “2024 Lenders”), pursuant to which, we may borrow from the 2024 Lenders up to $20 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.

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

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

The 2024 Credit Facility also contains customary events of default.

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

As of the date of this Annual Report, we have drawn $2.5 million from the 2024 Credit Facility.

On August 13, 2024, we 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).

On November 14, 2024, we 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.

On April 29, 2025, our CEO Gerard Barron gave testimony during a meeting of the U.S.

House Natural Resources Subcommittee on Oversight and Investigations at a hearing titled, “ Exploring the Potential of Deep-Sea Mining to Expand American Mineral Production ”.

In his remarks as an expert witness, Mr Barron highlighted the abundant, unattached polymetallic nodule resource as a platform to secure new supplies of critical minerals essential for U.S.

infrastructure, defense, energy and technology.

Another expert witness, Dr.

Thomas Peacock of MIT — one of the world’s leading experts on deep-sea sediment plume dynamics — asked the Committee to be wary of misinformation, stating “unfortunately it’s not the case” that the latest scientific findings are being used to drive decisions and discussions about deep-sea mining.

Peer-reviewed Rebuttal to Publication

On December 19, 2025, a peer-reviewed rebuttal was published in Frontiers in Marine Science refuting earlier claims in a paper published by Nature Geoscience that purported that seafloor nodules produce oxygen in the absence of sunlight.

The rebuttal argues that the dark oxygen hypothesis is incompatible with decades of established evidence, and far better explained by the deliberate omission of contradictory data and improper equipment use.

The peer-reviewed rebuttal follows the earlier submission of multiple rebuttals to Nature warning of serious flaws with the paper’s methodology and claims, including selective reporting of data and omission of key evidence which showed oxygen levels increasing without nodules, directly contradicting the authors’ claims.

Peer-reviewed Nature Study

On December 5, 2025, a peer-reviewed study published in Nature Ecology & Evolution , based on data collected two months after TMC’s test mining, confirmed that biodiversity impacts were confined to the directly mined areas, with no significant changes in plume-affected zones.

Independent researchers observed 37% fewer organisms and a 32% reduction in species richness within collector tracks—impacts that were expected and less severe than anticipated.

There will likely have been recolonization of mined areas over time, increasing species richness as has been observed with other size classes of sedimentary benthic biota.

Peer-reviewed Nature study demonstrates seafloor plume stays low, settles fast

On November 27, 2025, a peer-reviewed study published in Nature based upon in-field data gathered from TMC’s test mining using innovative thorium-tracing techniques shows the plume stays low, settles fast, with concentrations returning to background levels within just 1-2 kilometers.

TMC Announces Registered Direct Offering for $37 million

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

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

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

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

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

On June 16, 2025, we announced that Korea Zinc, a world leader in non-ferrous metal refining and precursor Cathode Active Material (pCAM) technology, had agreed to make a strategic investment of approximately $85.2 million in us through the purchase of common shares and warrants in a private placement.

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

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

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

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

TMC Board Appointments

Steve Jurvetson Joins TMC’s Board of Directors as Vice Chairman and Special Advisor to the CEO

On April 10, 2024, renowned Silicon Valley investor Steve Jurvetson joined our board of directors as Vice Chairman and special advisor to the CEO.

Jurvetson is an investor focused on founder-led, mission-driven companies at the cutting edge of disruptive technology and new industry formation.

His investments include pioneering technology companies like Tesla, Planet Labs, SpaceX and Commonwealth Fusion Systems, and represent over $800 billion in aggregate value creation.

Prominent Sustainability Strategist Brendan May Joins TMC’s Board of Directors

On June 3, 2024, we announced the appointment of Brendan May to our Board of Directors.

As a former Chief Executive of the Marine Stewardship Council (MSC) and European Chairman of the Rainforest Alliance, Mr.

May has spent over two decades at the forefront of sustainability challenges in globally significant ecosystems.

In 2010, he formed renowned global sustainability consultancy, Robertsbridge, whose counsel has been sought by leading companies and NGOs around the world.

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

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

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

seabed mining code.

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

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

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

Developments Subsequent to December 31, 2025

TMC and PAMCO Achieve Nodule Processing Milestone, Unlocking Critical Battery & Steelmaking Materials at Existing Facilities

On February 18, 2025, we announced that PAMCO had successfully smelted 450 tonnes of calcine into 35 tonnes of NiCuCo alloy and 320 tonnes of Mn silicate products, during a commercial-scale campaign to process a 2,000-tonne sample of deep-seafloor polymetallic nodules at our partner PAMCO’s Hachinohe Rotary Kiln Electric-Arc Furnace facility in Hachinohe, Japan, demonstrating

the process at scale.

The process data and operational experience gathered during the commercial-scale processing trial will inform expected definitive processing agreements between the parties.

Extension of Credit Facility with ERAS Capital LLC and Gerard Barron

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

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

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

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

Exploration of Potential U.S.-Based Regulatory Pathway

On March 27, 2025, we announced that we initiated a process with NOAA and the U.S.

Department of Commerce under the DSHMRA to consider a U.S.-based regulatory pathway for the commercial production of deep-sea polymetallic nodules in the CCZ.

We believe this regulatory pathway potentially offers a clear and predictable route to securing an exploration license and a commercial recover permit to polymetallic nodules found in the CCZ.

We are in the initial planning stages of this strategy, however, and there are no assurances that we will be able to secure any exploration or commercial recovery rights under the DSHMRA in a timely manner, or at all.

Exploration Contracts

We currently hold exclusive exploration rights to certain polymetallic nodule areas in the CCZ through our subsidiaries NORI and TOML, sponsored by the Republic of Nauru and the Kingdom of Tonga, respectively.

TMC Welcomes NOAA Rule Modernizing Deep-Seabed Mining Permits for U.S.

Companies in the High Seas

On January 21, 2026, we welcomed the new rule issued by the National Oceanic and Atmospheric Administration (NOAA) updating regulations governing deep seabed mineral exploration and commercial recovery under DSHMRA.

Final rule establishes a consolidated application and review process under DSHMRA, allowing companies that have completed the necessary exploration, environmental, and technological development work to rely on exploration-phase data in commercial recovery permit applications, reducing duplication and improving regulatory efficiency.

TMC USA Files First Consolidated Deep-Seabed Mining Application, Increasing Expected Commercial Recovery Permit Area to 65,000 km 2

On January 22, 2026, we announced that TMC USA had submitted a consolidated application to NOAA for an exploration license and a commercial recovery permit for polymetallic nodules in international waters of the CCZ.

The application represents the first consolidated exploration license and commercial recovery permit application submitted under NOAA’s new consolidated application and review process and increases the applied for commercial recovery area from ~25,000 to ~65,000 km2, with an estimated resource of 619 million tonnes (Mt) of wet nodules and a potential exploration upside.

TMC USA was able to apply under NOAA’s new consolidated process because it can demonstrate the scientific, technical and financial capability to pursue commercial recovery activities expeditiously.

NOAA Determines TMC USA’s Consolidated Deep-Seabed Mining Application is in Substantial Compliance

On March 9, 2026, we announced that NOAA determined that the consolidated application submitted by TMC USA for an exploration license and commercial recovery permit is in substantial compliance with the applicable requirements under DSHMRA and its implementing regulations.

This determination marks a key step in the U.S.

regulatory process for exploration and commercial recovery of polymetallic nodules in the CCZ under NOAA’s new rule establishing a consolidated application and review process.

The process enables a more efficient regulatory timeline by allowing exploration-phase environmental, geological, and engineering data to be incorporated directly into the commercial recovery review.

Strategic Partnership with Mariana Minerals

On March 19, 2026, we signed a Strategic Partnership Agreement with Mariana Minerals (“Mariana”) focusing on the potential development of a nodule processing and refining facility in the Port of Brownsville, Texas as part of our owner’s team.

Mariana brings an AI, software-first approach to the permitting, construction and operation of critical mineral projects:

fast-tracked capital project execution, which enabled Tesla to build its Lithium plant in Texas in less than 20 months and is core to how SpaceX and other cutting edge businesses operate, can be even further accelerated via a software-first approach and offers a faster, more modern pathway to re-industrialization.

Exclusivity on Lease Option for Site in Brownsville, Texas

On March 27, 2026, we announced that TMC USA currently holds an exclusive right of negotiation with the Port of Brownsville, Texas on a lease and / or lease option for land sufficient to develop a domestic nodule processing and refining ecosystem for TMC USA and other American nodule developers, with the ultimate decision conditional on U.S.

government support.

The option on a 50-year lease covers a total of 1,466 acres of land at the Port of Brownsville, Texas, in two separate land parcels (735 acres on the Brownsville Texas Shipping Channel and an adjacent 731 acres).

There is currently no financial commitment required of TMC USA.

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

The Deep Seabed Hard Mineral Resources Act

DSHMRA establishes a domestic legal regime for U.S.

citizens to explore for and commercially recover hard mineral resources from the seabed in areas beyond U.S.

national jurisdiction.

DSHMRA affirms that deep-sea mining is a lawful freedom of the high seas, subject to a duty of reasonable regard to the interests of other states in their exercise of those and other freedoms recognized by the general principles of international law, and provides a regulatory structure administered by NOAA, an agency under the U.S.

Department of Commerce.

NOAA’s implementing regulations detail the criteria and conditions for issuance of deep seabed exploration licenses and commercial recovery permits to U.S.

citizens, including any individual, corporation, or other entity organized under the laws of a U.S.

state or territory.

The purpose of DSHMRA is to promote the development of seabed minerals by U.S.

citizens while ensuring environmental protection, avoidance of conflict with other high seas uses, and consistency with international law.

Before any license or permit is issued, NOAA must determine that the proposed activities meet a series of statutory requirements, including that the activity:

(i) will not unreasonably interfere with the lawful use of the high seas by other states;

(ii) is consistent with U.S.

foreign policy and international obligations;

(iii) does not create a risk to international peace and security;

(iv) is not expected to result in significant adverse environmental effects;

and (v) does not pose undue risk to life or property at sea.

These findings reflect NOAA’s mandate of advancing U.S.

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

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

federal agencies and supporting environmental studies to inform future decisions.

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

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

The United States, however, remains outside that framework.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

We expect to become subject to additional U.S.

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

Existing ISA Exploration Contracts

We currently hold exploration rights to certain polymetallic nodule areas in the CCZ through our subsidiaries NORI and TOML, sponsored by the Republic of Nauru and the Kingdom of Tonga, respectively.

NORI, our wholly-owned subsidiary, holds exploration rights to four blocks (NORI Area A, B, C, and D, the “NORI Contract Area”) covering 74,830 square kilometers in the CCZ that were granted by the ISA in July 2011.

NORI is sponsored by Nauru pursuant to a certificate of sponsorship signed by the Government of Nauru on April 11, 2011.

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

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

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

The NORI Technical Report Summary is filed as Exhibit 96.1 to this Annual Report.

See Item 2 entitled “ Properties ” included in this Annual Report for additional information about the 2021 economic analysis of NORI Area D.

In September 2017, Nauru and NORI entered into a sponsorship agreement formalizing certain obligations of the parties in relation to NORI’s exploration and potential collection of nodules in the NORI Contract Area, which was revised in May 2025.

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

On March 8, 2008, Tonga and TOML entered into a sponsorship agreement formalizing certain obligations of the parties in relation to TOML’s exploration application to the ISA (subsequently granted) for the TOML Contract Area.

The sponsorship agreement was updated on September 23, 2021.

TOML commissioned a Technical Report Summary by AMC, dated March 2021, which is filed as Exhibit 96.2 to this Annual Report.

On March 8, 2008, Tonga and TOML entered into a sponsorship agreement formalizing certain obligations of the parties in relation to TOML’s exploration and potential collection of nodules in the TOML Contract Area, which was most recently revised in August 2025.

Key Trends, Opportunities and Uncertainties

We are currently a pre-revenue company, and we do not anticipate earning revenues (other than potential service revenue) until NORI receives an exploitation contract and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale.

We believe that our performance and future success pose risks and challenges, including those related to finalization of ISA regulations to allow for commercial exploitation, approval of an application for the ISA exploitation contract, development of environmental regulations associated with our business and development of our technologies to collect and process polymetallic nodules.

We are currently a pre-revenue company, and we do not anticipate earning revenues (other than potential service revenue) until one of our wholly-owned subsidiaries receives an exploitation contract or commercial recovery permit and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale.

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

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

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

These risks, as well as other risks, are discussed in Item 7A entitled “ Quantitative and Qualitative Disclosures About Market Risk ” and Item 1A entitled “ Risk Factors ” included in this Annual Report.

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Public policy risks

Awareness of climate change related impacts and commitments made by companies and governments to achieve net zero emissions, continues to grow.

We support the ambition of the U.S.

to achieve net zero greenhouse gas emissions by no later than 2050 and to reach half of all new vehicles sales to be EVs by 2030.

We are committed to achieving zero emissions and are reviewing and designing technologies to achieve this goal.

The location of our onshore plant will be key, and we will be working on science-based targets and scenario analysis.

To support the EV and battery storage value chain, we are seeking to close the emerging supply gap of the critical metals contained in nodules needed for the transition to renewable energy and adoption of EVs.

We are seeking to close the emerging supply gap of the critical metals contained in nodules needed for the transition to renewable energy and adoption of EVs and other critical and/or emerging applications.

We plan to take advantage of this opportunity to supply these potentially lower carbon critical metals, avoid deforestation, and help reduce the cost of batteries.

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Impact of Global Inflation

The global inflation rate rose sharply in 2022, and stayed relatively high in 2023 and 2024, marine fuel prices and vessel day rates remained high and have increased our exploration expenses beyond what was originally expected.

The global inflation rate stayed relatively high in 2025 and over the past several years, marine fuel prices and vessel day rates remained high and have increased our exploration expenses beyond what was originally expected.

Additionally, we are experiencing higher offshore labor costs through our contractors.

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Components of Results of Operations

We are an exploration-stage company with no revenue to date and a net loss of $81.9 million for the year ended December 31, 2024, compared to a net loss of $73.8 million in the prior year.

We are in the development stage with no revenue to date and a net loss of $319.8 million for the year ended December 31, 2025, compared to a net loss of $81.9 million in the prior year.

We have an accumulated deficit of approximately $951.3 million from inception through December 31, 2025.

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Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or projected results of operations.

We align our operating expenses based on activity performed by our personnel which allocates these costs under Exploration and Evaluation expenses and General and Administrative expenses.

This alignment is adjusted throughout the year to reflect changes in business activities.

To date, we have not generated any revenue.

We do not expect to generate revenue (other than potential service revenue) until NORI receives an exploitation contract and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale.

We expect to generate revenue once we receive a commercial recovery permit, and we are able to successfully collect and process polymetallic nodules into saleable products on a commercial scale.

Any revenue from initial production is difficult to predict.

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We expense all costs relating to exploration and development of mineral claims.

Such exploration and development costs include, but are not limited to, ISA contract management, geological, geochemical and geophysical studies, environmental baseline studies, process development and payments to Allseas for the PMTS.

Such exploration and development costs include, but are not limited to, regulatory approvals, exploration mineral title management, geological, geochemical and geophysical studies, environmental baseline studies and process development activities.

Our exploration expenses are impacted by the amount of exploration work conducted during each period.

The acquisition cost of ISA polymetallic nodule exploration contracts will be charged to operations as amortization expense on a unit-of-production method based on proven and probable reserves should commercial production commence in the future.

The acquisition cost of polymetallic nodule mineral title will be charged to operations as amortization expense on a unit-of-production method based on proven and probable reserves should commercial production commence in the future.

General and Administrative Expenses

General and administrative (“G&A”) expenses consist primarily of compensation for employees, consultants and directors, including wages and salaries, share-based compensation, consulting fees, investor relations expenses, expenses related to advertising and marketing functions, insurance costs, office and sundry expenses, professional fees (including legal, audit and tax fees), travel expenses and transfer and filing fees.

Share-based compensation costs from the issuance of stock options and restricted share units (“RSUs”) is measured at the grant date based on the fair value of the award and is recognized over the related service period.

Share-based compensation costs from the issuance of stock options and restricted share units (“RSUs”) are measured at the grant date based on the fair value of the award and are recognized over the related service period.

Share-based compensation costs are charged to exploration expenses and general and administrative expenses depending on the function fulfilled by the holder of the award.

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We recognize forfeiture of any awards as they occur.

Nauru and Tonga Warrant costs

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

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

Interest Income/Expense

Interest income consists primarily of interest income earned on our cash and cash equivalents.

Interest income consists primarily of interest earned on our cash balance.

Fees and Interest on Borrowings and Credit Facilities

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Foreign Exchange Loss

The foreign exchange income or loss for the periods primarily relates to our cash held in Canadian dollars and to the settlement of costs incurred in foreign currencies, depending on either the strengthening or weakening of the U.S.

The foreign exchange income or loss for the periods reported primarily relates to unrealized gain or loss due to revaluation of foreign denominated accounts payable and accrued liabilities.

Change in Fair Value of Warrants Liability

The change in fair value of warrants liabilities primarily consists of the change in the fair value of the 9,500,000 warrants issued to Sustainable Opportunities Holdings LLC concurrently with SOAC’s initial public offering (the “Private Warrants”).

The change in fair value of warrants liabilities primarily consists of the change in the fair value of the 9,500,000 Private Warrants issued to Sustainable Opportunities Holdings LLC concurrently with Sustainable Opportunities Acquisition Corp.’s (“SOAC”) initial public offering (the “Private Warrants”).

For accounting purposes, we were considered to have issued the Private Warrants as part of the Business Combination, and we are required to re-measure the fair value of our Private Warrants at the end of each reporting period.

Results of Operations

The following is a discussion of our results of operations for the years ended December 31, 2025 and 2024.

Our accounting policies are described in Note 3 “Significant Accounting Policies” in our annual financial statements herein.

Comparison of the periods ended December 31, 2025 and 2024

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General and administrative expenses

Equity-accounted investment loss

Nauru and Tonga warrant cost

Change in fair value of royalty liability

Equity-accounted investment loss (gain)

Gain on dilution of investment

Loss on termination of contract

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Exploration and Evaluation Expenses

Exploration and evaluation expenses for the year ended December 31, 2024 were $50.6 million, or $0.8 million higher than the same period in 2023.

The spending in 2024 as compared to the prior year reflects an increase of $7.5 million in mining, technological and process development mostly due to costs incurred for resource definition during Campaign 8, higher share-based compensation of $5.4 million primarily due to the amortization of the fair value of RSUs and options granted to officers in the second quarter of 2024.

This was offset by lower spending on environmental studies as the cost for Campaign 8 which commenced in the fourth quarter of 2023

was completed in the first quarter of 2024 and was lower than the cost of the environmental work in 2023 following the completion of the NORI pilot nodule collection system test.

Exploration and evaluation expenses for the year ended December 31, 2025 were $40.3 million, compared to $50.6 million incurred in 2024.

The decrease of $10.3 million was primarily due to a decrease of $14.8 million in mining, technological and process development cost due to costs incurred in 2024 for Campaign 8 resource definition work, Allseas vessel transit cost and transportation of nodules to PAMCO’s facility in Japan, decrease in ISA permitting application cost in 2025, partially offset by an increase in share-based compensation of $4.9 million on the amortization of the fair value of retention grants, RSUs and options granted to officers in 2025.

General and Administrative (“G&A”) Expenses

G&A expenses for the year ended December 31, 2025 were $99.8 million compared to $30.6 million for the same period in 2024.

The increase of $8.1 million in G&A expenses was mainly the result of an increase in share-based compensation of $5.7 million due to the amortization of the fair value of RSUs and options granted to directors and officers in the second quarter of 2024, higher consulting and advisory fees of $1.9 million and higher personnel costs of $0.8 million.

The increase of $69.2 million in G&A expenses was mainly the result of an increase in share-based compensation of $63.7 million due to the amortization of the fair value of retention grants, RSUs and options granted to directors and consultants in the third quarter of 2025, and higher consulting and advisory fees of $5.4 million.

This increase was partially offset by decreased travel and insurance costs incurred in 2025 compared to the same period in 2024.

Nauru and Tonga Warrant costs

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

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

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

The fair value of the Tonga Warrants, calculated using a Black-Scholes valuation model, valued each warrant at $5.00 for a total value of $5 million.

For further details on this non-recurring item, refer to Note 16 “Warrants” in our annual financial statements herein.

Gain on Dilution of Investment

In 2025, Low Carbon Royalties issued 8,013,469 common shares through a private placement and option exercises, raising $25.1 million of gross proceeds.

We did not participate in the offering, which reduced our ownership interest in Low Carbon Royalties from 32.27% to 27.19% (December 31, 2024:

As the common shares were issued in the financing at a price higher than Low Carbon Royalties’ book value per share, we recorded a dilution gain of $5.6 million.

Change in Fair Value of Royalty Liability

The fair value of the royalty liability as at December 31, 2025 was valued using a market approach for NORI Areas A to C, while for Area D an income approach was used following the release of the NORI-D PFS in August 2025.

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

Interest Income

During 2024, we earned interest of $0.2 million, as compared to $1.3 million in 2023, mainly from the investment of our cash on hand.

During 2025, we earned interest of $2.8 million, as compared to $0.2 million in 2024, mainly from the investment of our higher cash balance in 2025.

Change in Fair Value of Warrants Liability

The change in fair value of warrants liability primarily consists of the change in the fair value of the 9,500,000 Private Warrants.

The credit recorded in 2024 reflects the decrease in the market price of our warrants.

The debit recorded in 2025 reflects the increase in the fair value price of our Private Warrants due to the increase in the market price of our common shares and Public Warrants.

Fees and Interest on Borrowings and Credit Facilities

The interest charged on our short-term debt borrowings was $0.2 million in the year ended December 31, 2024 ($nil for the same period of 2023), while interest on drawn amounts on our credit facilities was $0.3 million and underutilization fees on these same facilities was $2.1 million in the year ended December 31, 2024 ($nil and $0.8 million over the same period in 2023, respectively).

The interest charged on our short-term debt borrowings was $0.3 million in the year ended December 31, 2025 ($0.2 million for the same period of 2024), while interest on drawn amounts on our credit facilities was $0.1 million and underutilization fees on these same facilities was $2.8 million in the year ended December 31, 2025 ($0.3 million and $2.1 million over the same period in 2024, respectively).

Liquidity and Capital Resources

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As of December 31, 2025, we had cash on hand of $117.6 million.

In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for an exploitation contract for the NORI Area D, and by negotiating the settlement of program expenditures with our equity whenever possible, and by utilizing existing assets for offshore and onshore production.

In light of the significant deficit in expected funding following the closing of the Business Combination in September 2021, we adopted what we call a “capital-light” strategy whereby we removed any allocation of funds to capital expenditures that were not deemed necessary to support the submission of an application for an exploitation contract for the NORI Area D and then the applications of exploration licenses and commercial recovery permits with NOAA under DHMRA, and by negotiating the settlement of program expenditures with our equity whenever possible, and by utilizing existing assets for offshore and onshore production.

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

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

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

regulatory regime or ISA exploitation contracts or provisional approvals.

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

We expect to incur significant expenses and operating losses for the foreseeable future, particularly as we advance towards our application to the ISA for an exploitation contract and preparation for potential commercialization.

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

Based on our cash balance and availability of borrowing under our credit facility with ERAS Capital LLC and Gerard Barron, when compared with our forecasted cash expenditures, we believe we will have sufficient funds to meet our obligations that become due within the next twelve months.

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In addition, we will however need and are seeking additional financing to fund our continued operations over time.

These financings could include additional public or private equity, debt financings, equity-linked financings or other sources of financing, including through non-dilutive asset, royalty or project-based and/or asset-based financings.

These financings could include additional public or private equity, debt financings, equity-linked financings or other sources of financing, including through government-based funding, non-dilutive asset, royalty or project-based and/or asset-based financings.

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

On September 16, 2022, we filed a registration statement on Form S-3 with the SEC, which the SEC declared effective on October 14, 2022, to sell up to $100 million of securities, which includes the $30 million that may be sold under the At-the-Market Equity Distribution Agreement discussed below and the Common Shares and shares underlying the Class A Warrants issued in the Registered Direct Offering.

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

In addition, on November 30, 2023, we filed an additional registration statement on Form S-3 with the SEC, which the SEC declared effective on December 8, 2023, to sell up to an additional $100 million of securities.

As previously disclosed in 2025, remaining capacity on the two previously filed Form S-3s has been nearly extinguished following various equity and warrant transactions, and we expect to file a new registration statement on Form S-3 following the filing of this Annual Report.

Securities that may be sold under the registration statements include common shares, preferred shares, debt securities, warrants and units.

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On December 22, 2022, we entered into an At-the-Market Equity Distribution Agreement (the “Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”) and Wedbush Securities Inc., as sales agents, allowing us, from time to time, to issue and sell common shares with an aggregate offering price of up to $30 million.

On December 21, 2023, we amended the Sales Agreement to remove Stifel as a sales agent.

The offer and sales of the shares are made under our effective “shelf” registration statement on Form S-3 filed with the SEC on September 16, 2022, which the SEC declared effective on October 14, 2022.

No funds were raised from the Sales Agreement in the fourth quarter of 2024, while for the 2024 year, we sold 3,251,590 Common Shares for gross proceeds of $4.9 million under this offering.

In 2025, we issued 7,542,996 common shares at an average share price of $2.02, for net proceeds of $14.8 million under the Sale Agreement.

The Sales Agreement expired in October 2025.

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

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Pursuant to the Letter Agreement we entered into on March 24, 2025, we and Argentum Cedit Virtuti GCV agreed to cancel the 2023 Credit Facility with no outstanding amounts remaining, other than our obligation to pay the underutilization fee thereunder.

On August 14, 2023, we entered into a securities purchase agreement for a Registered Direct Offering of our Common Shares and Class A Warrants (the “2023 Offering”).

The purchase price for each Common Share and Class A Warrant to purchase 0.5 Common Shares was $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.

No investor elected to exercise its right to purchase additional Common Shares and accompanying Class A Warrants on or before September 15, 2023 under the terms of the securities purchase agreement.

As of December 31, 2023, we had received gross proceeds of $15.9 million (approximately $14.6 million net of transaction fees) in the Registered Direct Offering.

We received the remaining $9 million of gross proceeds on January 31, 2024, from an investor affiliated with us.

As a result of the 2024 Purchase Agreement (as described below), the exercise price of the Class A Warrants was reset to $2.00 as the down round feature of the Class A Warrants agreement was triggered.

On March 22, 2024, we entered into the 2024 Credit Facility with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar, pursuant to which, we may borrow from the 2024 Lenders up to $25 million in the aggregate ($12.5 million from each of the 2024 Lenders), from time to time (was initially $20 million in the aggregate ($10 million from each of the 2024 Lenders), subject to certain conditions.

On March 22, 2024, we entered into the 2024 Credit Facility with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar (the “2024 Credit Facility”), pursuant to which, we may borrow from the 2024 Lenders up to $25 million in the aggregate ($12.5 million from each of the 2024 Lenders), from time to time (was initially $20 million in the aggregate ($10 million from each of the 2024 Lenders), subject to certain conditions.

All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month 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.

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On May 27, 2024, we entered into a short-term loan agreement with the Lender (Argentum Cedit Virtuti GCV), an affiliate of Allseas.

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

The Loan takes priority over the 2024 Credit Facility.

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.

On September 9, 2024, we entered into a Working Capital Loan Agreement with Allseas Investments, a company related to Allseas.

In accordance with the Working Capital Loan Agreement, Allseas Investments provided a loan to us 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 us 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 our election).

The Working Capital Loan was 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 bore interest based on the 6-month Secured Overnight Financing Rate, 180-day average plus a margin of 4.0% per annum payable in two installments on January 2, 2025, and the Repayment Date (or plus a margin of 5.0% if we deferred all interest payments to the Repayment Date).

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

On March 24, 2025, we entered into the Letter Agreement with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the repayment date under the Working Capital Loan Agreement was extended to September 30, 2025.

In the second quarter of 2025, the entire Working Capital Loan amount along with the interest payable was repaid and the facility was cancelled.

On November 14, 2024, we entered into a securities purchase agreement (the “2024 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, with each Share including an accompanying Class B Warrant to purchase 0.5 common shares.

The offering price was $1.00 per common share, with each common 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.

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

Pursuant to the 2024 Purchase Agreement, we agreed not to issue any Common Shares or Common Share equivalents with an effective price of less than $1.00 per share until May 18, 2025.

As at December 31, 2024, we received gross proceeds of $14.9 million (net proceeds of $14.2 million, after offering expenses), with the final $5 million of gross proceeds received on February 6, 2025.

We may receive up to approximately $309.1 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants and the Class B Warrants, based on the per share exercise price of such warrants.

However, the exercise price for the outstanding Public Warrants and Private Warrants is $11.50 per common share and there can be no assurance that such warrants will be in the money prior to their expiration, and as such, such warrants may expire worthless.

Based on the current trading price of our Common Shares we do not expect to receive any proceeds from the exercise of the Public Warrants and Private Warrants unless there is a significant increase in the price of our Common Shares.

In certain circumstances, the Public Warrants and Private Warrants may be exercised on a cashless basis and the proceeds from the exercise of such warrants will decrease.

even if the warrants will be in the money, the holders of the warrants are not obligated to exercise their warrants, and we cannot predict whether holders of the warrants will choose to exercise all or any of their warrants.

In addition, the exercise price to purchase one Common Share under the outstanding Class A Warrants and Class B Warrants is $2.00 (subject to customary adjustments) and there can be no assurance that such warrants will be exercised prior to their expiration, and as such, such warrants may expire and we will not receive any proceeds from the excise thereof.

We received gross proceeds in the offering, exclusive of warrant exercises, of $19.9 million (net proceeds of $14.2 million, after offering expenses), of which $5 million was received on February 6, 2025.

On May 12, 2025, we entered into a securities purchase agreement with certain new and existing investors, including an existing strategic investor, for the sale of an aggregate of 12,333,333 common shares and accompanying Class C Warrants, in a registered direct offering, for gross proceeds, exclusive of warrant exercises, of $37 million (net proceeds of $36.7 million, after offering expenses).

The offering price was $3.00 per common share, with each common share including an accompanying Class C Warrant to purchase one common share.

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

On June 16, 2025, we entered into a Securities Purchase Agreement with Korea Zinc, pursuant to which in consideration of gross cash receipt of $85.2 million, we agreed to issue and sell to Korea Zinc 19,623,376 of our common shares and accompanying warrants to purchase an aggregate of 6,868,181 common shares.

The purchase price per share and accompanying warrant was set at $4.34.

The Korea Zinc Warrant is exercisable at an exercise price of $7.00 per share and expires on June 25, 2028.

Pursuant to this Securities Purchase Agreement, subject to certain exceptions, Korea Zinc will have a right to participate in any public offering or private placement of any of our common shares or common share equivalents primarily for capital raising purposes (each a “Proposed Offering”) up to such amount of securities to maintain its percentage ownership at the time of such Proposed Offering.

Such right to participate in future financings will expire upon the earlier to occur of (i) June 16, 2030, (ii) the date on which Korea Zinc owns less than all of the common shares it purchased and subscribed pursuant to this Securities Purchase Agreement and (iii) immediately after a closing of a Proposed Offering where Korea Zinc does not exercise its participation right in full.

The funds raised under this Securities Purchase Agreement are to be used for general corporate purposes.

We may receive up to approximately $432.5 million in aggregate gross proceeds from cash exercises of the Public Warrants, the Private Warrants, the Class A Warrants, the Class B Warrants, Class C Warrants, and Warrants issued to Korea Zinc, Nauru and Tonga based on the per share exercise price of such warrants.

In certain circumstances, the Public Warrants and Private Warrants, Class A Warrants, Class B Warrants and Class C Warrants may be exercised on a cashless basis and the proceeds from the exercise of such warrants will decrease.

Furthermore, even if the warrants will be in the money, the holders of the warrants are not obligated to exercise their warrants, and we cannot predict whether holders of the warrants will choose to exercise all or any of their warrants.

The warrants issued to the Republic of Nauru and Kingdom of Tonga can only be exercised after the commercial recovery permit is received and commercial production commences and there can be no assurance that the exercise conditions will be met prior to their expiration.

In addition, the exercise price to purchase one common share under the outstanding Class A Warrants and Class B Warrants is $2.00 each, Class C Warrants is $4.5, warrants issued to Korea Zinc is $7.00, warrants issued to Republic of Nauru is $4.72 and warrants issued to Tonga is $5.87 (subject to customary adjustments) and there can be no assurance that such warrants will be exercised prior to their expiration, and as such, such warrants may expire, and we will not receive any proceeds from the exercise thereof.

Cash Flows Summary

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Cash flows used in Operating Activities

For the year ended December 31, 2025, major operating activities over this period involved advanced work on pre-feasibility studies and work to advance our permit applications with NOAA resulting in net cash used in operating activities of $42.9 million.

This mainly consisted of $11.1 million on payroll costs, $8.1 million on various environmental work, $7.5 million on legal and consulting fees, $3.7 million on stakeholder engagement, $3.7 million on interest and underutilization fees paid on the 2024 Credit Facility and working capital loan, $3.3 million on business development, investor relations and communications, $1.4 million on mining technological and process development and $4.1 million for various expenses, partially offset by interest income receipts of $2.4 million.

For the year ended December 31, 2024, major operating activities over this period involved Campaign 8, as well as advanced work on engineering and pre-feasibility studies as we advance towards our application to the ISA for a NORI exploitation contract and prepare for potential future commercial production.

Net cash used in operating activities in the year ended December 31, 2024, amounted to $43.5 million, and consisted mainly of $14.7 million on Campaign 8 and various environmental work, $11.7 million on personnel costs, $9.2 million on legal, advisory and consulting, $2.4 million for sponsorship, training and stakeholder engagement support, $1.9 million spent on engineering and pre-feasibility studies, $1.7 million on communication and business development expenses, $0.9 million on and additional payments of $1.8 million for various expenses.

For the year ended December 31, 2023, operating activities focused mainly on the continuation of environmental work following the completion of the NORI integrated collector test, as well as progressing on engineering work and pre-feasibility studies on the project.

Net cash used in operating activities in the year ended December 31, 2023, amounted to $59.6 million, and consisted mainly of $32.2 million on various environmental work, $9.3 million on personnel costs, $4.4 million on legal costs, $3.2 million for sponsorship, training, and stakeholder engagement support, $2.8 million spent on engineering and pre-feasibility studies, $1.9 million on communication and business development and additional payments of $5.8 million for various expenses.

Cash flows used in/provided by Investing Activities

Net cash used in investing activities in the year ended December 31, 2024 was $0.5 million, representing the purchase of equipment.

In the comparative year ended December 31, 2023, cash used in investing activities was $0.6 million for the purchase of equipment.

Net cash generated by investing activities 2025 was $0.4 million which included proceeds from the return of capital from Investee offset by the purchase of equipment and software development.

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

Cash flows provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2024 was $40.7 million, which comprised of net proceeds received from the Registered Direct Offering announced in November 2024 of $14.7 million, net proceeds of $8.8 million from the 2023 Offering, proceeds from short-term debt and credit facilities of $11.8 million, proceeds from shares issued from ATM of $4.9 million and proceeds from the exercise of stock options and employee stock plans of $0.5 million.

The year ended December 31, 2023 represents

mainly cash received from the Registered Direct Offering of $14.7 million and cash received of $5 million on closing of our investment in Low Carbon Royalties.

Net cash provided by financing activities for 2025 was $156.6 million, which comprised of net cash proceeds received from the Korea Zinc investment of $85.2 million, net proceeds from the 2025 Registered Direct Offering of $36.7 million, the remaining net proceeds from the 2024 Registered Direct Offerings of $4.5 million, proceeds from common shares sold under the Sales Agreement of $14.8 million and proceeds from the exercise of stock options and warrants of $27.2 million.

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

Net cash provided by financing activities for the year ended December 31, 2024 was $40.7 million, which comprised of net proceeds received from the 2024 Registered Direct Offering of $14.7 million, net proceeds of $8.8 million from the 2023 Offering, proceeds from short-term debt and credit facilities of $11.8 million, proceeds from common shares sold under the Sales Agreement of $4.9 million and proceeds from the exercise of stock options and employee stock plans of $0.5 million.

Contractual Obligations and Commitments

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NORI is currently implementing its approved five-year plan.

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

Should the approval of NORI’s exploitation application for NORI Area D be delayed or rejected, NORI intends to revise its estimated future work plan in respect of its NORI Area.

Work plans are reviewed annually by us, agreed with the ISA and may be subject to change depending on our progress to date.

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

NORI is required to submit an application for extension no later than six months before the expiration of the contract.

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

NORI submitted an application to the ISA for a five-year extension of the contract that is currently under review.

The cost of the proposed five-year plan of work include in NORI’s extension application is dependent on the ISA’s approval of the NORI extension Work plans are reviewed annually by NORI, agreed with the ISA and may be subject to change depending on their progress to date.

TOML Exploration Contract

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The five-year estimated expenditure is indicative and subject to change, TOML will review the program regularly and TOML will inform the ISA of any changes through its annual reports.

TOML’s exploration contract expires on January 10, 2027.

TOML is required to submit an application for extension no later than six months before the expiration of the contract.

TOML intends to submit an application for a five-year extension in 2026.

Regulatory Obligations Relating to Exploration Contracts

Both TOML and NORI require sponsorship from their host sponsoring nations, Tonga and Nauru, respectively.

Each company has been registered and incorporated within the applicable host nation’s jurisdiction.

The ISA requires that a contractor must obtain and maintain sponsorship by a host nation that is a member of the ISA, and such state must maintain effective supervision and regulatory control over such sponsored contractor.

Both TOML and NORI require sponsorship from their host sponsoring States, Tonga and Nauru, respectively.

Each company has been registered and incorporated within the applicable host State’s jurisdiction.

The ISA requires that a contractor must obtain and maintain sponsorship by a host state that is a member of the ISA, and such state must maintain effective supervision and regulatory control over such sponsored contractor.

Each of TOML and NORI is subject to the registration and incorporation requirements of these nations.

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Sponsorship Agreements

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

Upon reaching the minimum recovery level within the exploitation contract area, NORI will pay Nauru a seabed mineral recovery payment based on the polymetallic nodules recovered from the exploitation contract area.

In addition, NORI will pay an administration fee each year to Nauru for such administration and sponsorship, which is subject to review and increase in the event NORI is granted an ISA exploitation contract.

NORI has begun discussions with the Government of Nauru to renegotiate the existing sponsorship agreement and has also committed to ensuring NORI pays corporate income tax within Nauru, assuming our future operations are ultimately profitable.

On March 8, 2008, Tonga and TOML entered into the TOML Sponsorship Agreement formalizing certain obligations of the parties in relation to TOML’s exploration and potential exploitation of the TOML Area.

On September 23, 2021, Tonga updated the TOML Sponsorship Agreement harmonizing the terms of its engagement with TOML with those held by NORI with Nauru.

TOML expects to renegotiate the existing sponsorship agreement with Tonga prior to entering into operations in the TOML Area and has committed to paying corporate income tax within Tonga, assuming our future operations are ultimately profitable.

NORI is sponsored by Nauru pursuant to a certificate of sponsorship signed by the Government of Nauru on April 11, 2011.

NORI is a Nauruan incorporated entity and is subject to applicable Nauruan legislation and regulations.

In 2015, the Nauruan government established the Nauru Seabed Minerals Authority to regulate activities carried out by companies sponsored by Nauru.

Throughout the period of the NORI Exploration Contract, NORI must be sponsored by a State that is party to UNCLOS.

If the nationality or control of NORI changes or NORI’s sponsoring State, as defined in the ISA Regulations, terminates its sponsorship, NORI must promptly notify the ISA.

In either event, if NORI does not obtain another sponsor meeting the requirements prescribed in the ISA Regulations and fails to submit to the ISA a certificate of sponsorship for NORI in the prescribed form within six months, the NORI Exploration Contract will terminate.

On July 5, 2017, Nauru, the Nauru Seabed Minerals Authority and NORI entered into a sponsorship agreement (the “NORI Sponsorship Agreement”) formalizing certain obligations of the parties in relation to NORI’s exploration and potential collection of nodules within the NORI Contract Area of the CCZ.

On May 29, 2025 the Republic of Nauru and NORI signed a revised Sponsorship Agreement, updating the terms of the Agreement signed between the parties in 2017.

The revised Sponsorship Agreement will remain in force unless terminated by mutual agreement of the parties or earlier terminated in accordance with its terms, including in the event of a material breach by either party or upon the assignment of NORI’s rights and the transfer of sponsorship to another sponsoring State.

Under the agreement, NORI will pay Nauru a seabed mineral recovery payment of $2 per tonne of polymetallic nodules recovered under an ISA contract, subject to annual inflation adjustment.

In addition, NORI will pay an annual administration fee, initially capped at $500,000, to support Nauru’s administration of its sponsorship and regulatory oversight.

The agreement also provides for potential continuity payments to Nauru if a subsidiary other than NORI develops nodules in the NORI Contract Area under the U.S.

regulatory regime with the applicable payment amounts and schedule to be determined in accordance with the terms of the agreement.

During any period in which such continuity payments are made, NORI has agreed to maintain an office in Nauru and make annual investments in local presence, community initiatives and training and capacity-building programs for Nauruan nationals.

In connection with the Sponsorship Agreement, Nauru holds warrants to purchase 9,146,268 of our common shares at an exercise price of $4.72.

In connection with the revised Sponsorship Agreement, we also executed a Deed of Guarantee and Indemnity in favor of Nauru, under which we guarantee certain financial obligations of NORI under Nauruan law and the Sponsorship Agreement and provides limited indemnification.

TOML updated the sponsorship agreement with Tonga in September 2021 and again on August 4, 2025.

The revised Sponsorship Agreement between Tonga and TOML will remain in force unless terminated by mutual agreement of the parties or earlier terminated in accordance with its terms, including in the event of a material breach by either party.

Under the agreement, Tonga will continue to sponsor TOML’s seabed mineral activities in the ISA contract area.

Upon commencement of commercial recovery of polymetallic nodules under an ISA contract, TOML will pay the Tonga Seabed Minerals Authority a commercial recovery payment of $2 per tonne of polymetallic nodules recovered from the contract area, subject to annual inflation adjustment.

In addition, TOML will pay an annual administration fee of $90,000, which may increase by up to 5% annually, to support the administration of Tonga’s sponsorship and regulatory oversight.

The agreement also provides for potential continuity benefit payments to Tonga if a subsidiary other than TOML develops nodules in the TOML Contract Area under the U.S.

regulatory regime.

The applicable payment amounts and schedule will be determined in accordance with the terms of the agreement.

During any period in which such continuity benefits are provided, TOML has agreed to maintain an office in Tonga and make annual investments in local presence, community initiatives and training and capacity-building programs for Tongan nationals.

In connection with the Sponsorship Agreement, Tonga holds warrants to purchase 1,000,000 of our common shares at an exercise price of $5.87.

In connection with the revised Sponsorship Agreement, we also executed a Deed of Guarantee and Indemnity in favor of Tonga, under which we guarantee certain financial obligations of TOML under Tongan law and the Sponsorship Agreement and provides limited indemnification.

Allseas Agreements

On March 29, 2019, we entered into a strategic alliance with Allseas to develop a system to collect, lift and transport nodules from the seafloor to shore and agreed to enter into a nodule collection and shipping agreement whereby Allseas would provide commercial services for the collection of the first 200 million metric tonnes of polymetallic nodules on a cost plus 50% profit basis.

In furtherance of this agreement, on July 8, 2019, we entered into a Pilot Mining Test Agreement with Allseas (“PMTA”), which was amended on five

occasions through February 2023, to develop and deploy a PMTS, successful completion of which is a prerequisite for our application for an exploitation contract with the ISA.

In furtherance of this agreement, on July 8, 2019, we entered into a Pilot Mining Test Agreement with Allseas (“PMTA”), which was amended on five occasions through February 2023, to develop and deploy a PMTS, successful completion of which is a prerequisite for our application for an exploitation contract with the ISA.

Under the PMTA, Allseas agreed to cover the development cost of the project in exchange for a payment from us upon successful completion of the pilot trial of the PMTS in NORI Area D.

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

Following the successful completion of the NORI Area D pilot collection system trials in November 2022 and subsequent analysis of pilot data, the parties are reviewing Project Zero Offshore Nodule Collection System production targets, system design and cost estimates and intend to enter into a binding Heads of Terms by the end of 2024.

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

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

Following the successful completion of the NORI Area D pilot collection system trials in November 2022 and subsequent analysis of pilot data, the parties are reviewing a commercial nodule collection system production targets, system design and cost estimates and intend to enter into a binding Heads of Terms by the end of 2024.

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

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

Under the terms of the Third Amendment, upon closing of

the November 2024 Registered Direct Offering discussed above, the borrowing limit returned to $25 million.

Under the terms of the Third Amendment, upon closing of the November 2024 Registered Direct Offering discussed above, the borrowing limit returned to $25 million.

There was no outstanding balance under the 2023 Credit Facility as at December 31, 2025.

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

During the second quarter of 2025, we repaid the entire outstanding loan and interest, amounting to $7.5 million and $0.5 million, respectively, and cancelled the Working Capital Loan Agreement.

2024 Credit Facility with ERAS Capital LLC and Gerard Barron

On March 22, 2024, we entered into an Unsecured Credit Facility with Gerard Barron, our Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of our director, Andrei Karkar, pursuant to which, we may borrow from the 2024 Lenders up to $25 million in the aggregate ($12.5 million from each of the 2024 Lenders), from time to time, subject to certain conditions.

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

We have the right to pre-pay the entire amount outstanding under the 2024 Credit Facility at any time, before the 2024 Credit Facility’s maturity of December 31, 2025.

The 2024 Credit Facility also contains customary events of default.

On August 13, 2024, we 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).

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

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

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

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

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

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

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

Under the 2024 Credit Facility wit ERAS Capital LLC and Gerard Barron we may borrow up to $44 million in the aggregate ($22 million from each of the 2024 Lenders).

The Maturity Date for any borrowings under the 2024 Credit Facility is June 30, 2026.

See above for a further description of the 2024 Credit Facility.

As of December 31, 2025, we had no borrowing under the 2024 Credit Facility and are only incurring the underutilization fee.

Off-balance sheet arrangements

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We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on the consolidated financial statements.

Our significant accounting policies are described in Note 2 to our audited consolidated financial statements included in this Annual Report.

Our significant accounting policies are described in Note 2 “Basis of Presentation” to our audited consolidated financial statements included in this Annual Report.

We have the critical accounting policies and estimates which are described below.

Value of Common Share-Based Payments

We recognize the cost of share-based awards granted to employees and directors based on the estimated grant-date fair value of the awards.

We recognize the cost of share-based awards granted to employees, directors and non-employees based on the estimated grant-date fair value of the awards.

We determine the fair value of stock options using the Black-Scholes option pricing model, which is impacted by the following assumptions:

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Evaluation of Going Concern

We assess quarterly whether we have the ability to meet its committed cash requirements for the next twelve months and continue to operate as a going concern.

We assess quarterly whether we have the ability to meet our committed cash requirements for the next twelve months and continue to operate as a going concern.

This assessment requires the use of forecasts of our business activities and related estimates of future cost obligations which can be subject to change.

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Recent Accounting Pronouncements

See Note 5 to the audited consolidated financial statements included in this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations and cash flows.

Emerging Growth Company Status

Section 102(b)(1) of the Jumpstart Our Business Startups (“JOBS”) Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards.

Following the closing of the Business Combination, we expect to remain an emerging growth company at least through the end of the 2025 fiscal year and we expect to continue to take advantage of the benefits of the extended transition period at least through the end of the 2025 fiscal year, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards.

This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

See Note 5 “Recent Accounting Pronouncements Issued and Adopted” to the audited consolidated financial statements included in this Annual Report for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations and cash flows.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis