TMC the metals Co Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ TMC THE METALS COMPANY INC. ​ ​ ​ ​ ​ Page Index to Financial Statements and Financial Statement Schedules Number ​ ​ ​ Financial Statements: ​ ​ ​ ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID: 1263 ) ​ 119 Consolidated Balance Sheets as at December 31, 2024 and 2023 ​ 120 Consolidated Statements of Loss and Comprehensive Loss for the Years Ended December 31, 2024 and 2023 ​ 121 Consolidated Statements of Changes in Equity for the Years Ended December 31, 2024 and 2023 ​ 122 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 ​ 123 Notes to Consolidated Financial Statements ​ 124 ​ ​ ​ 118 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of TMC the metals company Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of TMC the metals company Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of loss and comprehensive loss, changes in equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (the “PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP ​ We have served as the Company’s auditor since 2012. Vancouver, Canada March 27, 2025 ​ ​ 119 Table of Contents TMC the metals company Inc. Consolidated Balance Sheets (in thousands of US Dollars, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As at ​ As at ​ ​ ​ ​ December 31, December 31, ASSETS ​ Note ​ 2024 ​ 2023 Current ​ ​ Cash ​ $ 3,480 $ 6,842 Receivables and prepayments 6 ​ 1,851 ​ 1,978 ​ ​ ​ ​ 5,331 ​ 8,820 Non-current ​ ​ Exploration contracts 10 ​ 42,951 ​ 43,150 Right of use asset ​ 8 ​ ​ 3,814 ​ ​ 5,721 Equipment 7 ​ 771 ​ 1,133 Software ​ 7 ​ 1,928 ​ 1,643 Investment ​ 9 ​ ​ 8,203 ​ ​ 8,429 ​ ​ ​ ​ ​ 57,667 ​ ​ 60,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ASSETS $ 62,998 $ 68,896 ​ ​ ​ ​ ​ ​ ​ ​ ​ LIABILITIES ​ ​ Current ​ ​ Accounts payable and accrued liabilities 12 ​ 42,754 ​ 31,334 Short-term debt 8, 20 ​ 11,775 ​ — ​ ​ ​ ​ 54,529 ​ 31,334 Non-current ​ ​ Deferred tax liability ​ 10 ​ ​ 10,675 ​ ​ 10,675 Royalty liability 9 ​ 14,000 ​ 14,000 Warrants liability 15 ​ 912 ​ 1,969 ​ ​ ​ ​ ​ 25,587 ​ ​ 26,644 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES $ 80,116 $ 57,978 ​ ​ ​ ​ ​ ​ ​ ​ ​ EQUITY ​ ​ Common shares ( unlimited shares, no par value – issued: 340,708,460 (December 31, 2023 – 306,558,710 )) 16 ​ 477,217 ​ 438,239 Class A - J Special Shares ​ ​ — ​ — Additional paid in capital ​ 138,303 ​ 122,797 Accumulated other comprehensive loss ​ ( 1,203 ) ​ ( 1,216 ) Deficit ​ ( 631,435 ) ​ ( 548,902 ) TOTAL EQUITY ​ ( 17,118 ) ​ 10,918 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES AND EQUITY $ 62,998 $ 68,896 ​ Nature of Operations (Note 1) Commitments and Contingent Liabilities (Note 21) Subsequent Events (Note 25) ​ The accompanying notes are an integral part of these consolidated financial statements. 120 Table of Contents TMC the metals company Inc. Consolidated Statements of Loss and Comprehensive Loss (in thousands of US Dollars, except share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended For the year ended ​ ​ ​ ​ December 31, ​ December 31, ​ ​ Note ​ 2024 ​ 2023 Operating expenses ​ ​ Exploration and evaluation expenses 10 $ 50,643 $ 49,849 General and administrative expenses 11 ​ 30,644 ​ 22,540 Operating loss ​ ​ 81,287 ​ 72,389 ​ ​ ​ ​ ​ ​ ​ ​ ​ Other items ​ ​ ​ ​ ​ Equity-accounted investment loss 9 ​ 226 ​ 571 Loss on termination of contract 10 ​ 199 ​ — Change in fair value of warrant liability 15 ​ ( 1,057 ) ​ 986 Foreign exchange loss (gain) ​ ​ ​ ​ ( 1,186 ) ​ ​ 310 Interest income ​ ​ ​ ​ ( 176 ) ​ ​ ( 1,297 ) Fees and interest on borrowings and credit facilities ​ 8, 20 ​ ​ 2,602 ​ ​ 781 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss and comprehensive loss for the year, before tax ​ ​ ​ $ 81,895 ​ $ 73,740 ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax Expense ​ 24 ​ ​ 48 ​ ​ 41 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss and comprehensive loss for the year $ 81,943 $ 73,781 ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share - Basic and diluted ​ $ 0.25 ​ $ 0.26 ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average number of common shares outstanding – basic and diluted ​ ​ 321,875,050 ​ ​ 288,643,700 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 121 Table of Contents TMC the metals company Inc. Consolidated Statements of Changes in Equity (in thousands of US Dollars, except share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares Additional Accumulated Other ​ ​ ​ ​ For the year ended December 31, 2024 Shares Amount Paid in Capital Comprehensive Loss Deficit Total January 1, 2024 306,558,710 ​ $ 438,239 $ 122,797 $ ( 1,216 ) $ ( 548,902 ) $ 10,918 Shares and warrants issued under Registered Direct Offering, net of expenses (Note 13) ​ 19,400,000 ​ ​ 17,190 ​ ​ 6,023 ​ ​ — ​ ​ — ​ ​ 23,213 Adjustment to Class A Warrant (Note 15) — ​ ​ — ​ 590 ​ — ​ ( 590 ) ​ — Conversion of restricted share units, net of shares withheld for taxes (Note 17) 10,734,581 ​ ​ 14,954 ​ ( 14,954 ) ​ — ​ — ​ — Shares issued as per At-the-Market Equity Distribution Agreement (Note 14) 3,251,588 ​ ​ 4,866 ​ — ​ — ​ — ​ 4,866 Exercise of stock options (Note 17) 715,772 ​ ​ 1,891 ​ ( 1,428 ) ​ — ​ — ​ 463 Share purchase under Employee Share Purchase Plan (Note 17) ​ 47,809 ​ ​ 77 ​ ​ ( 38 ) ​ ​ — ​ ​ — ​ ​ 39 Share-based compensation and expenses settled with equity (Note 17) ​ — ​ ​ — ​ ​ 25,313 ​ ​ — ​ ​ — ​ ​ 25,313 Foreign currency translation adjustment ​ — ​ ​ — ​ ​ — ​ ​ 13 ​ ​ — ​ ​ 13 Loss for the year — ​ ​ — ​ — ​ — ​ ( 81,943 ) ​ ( 81,943 ) December 31, 2024 340,708,460 ​ $ 477,217 $ 138,303 $ ( 1,203 ) $ ( 631,435 ) $ ( 17,118 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Shares Additional Accumulated Other ​ ​ ​ ​ For the year ended December 31, 2023 Shares Amount Paid in Capital Comprehensive Loss Deficit Total January 1, 2023 266,812,131 ​ $ 332,882 $ 184,960 $ ( 1,216 ) $ ( 475,121 ) $ 41,505 Shares issued to Allseas 15,000,000 ​ ​ 15,910 ​ — ​ — ​ — ​ 15,910 Exercise of warrant by Allseas 11,578,620 ​ ​ 70,016 ​ ( 69,900 ) ​ — ​ — ​ 116 Shares and warrants issued under Registered Direct Offering, net of expenses ​ 7,961,540 ​ ​ 11,420 ​ 3,179 ​ — ​ — ​ 14,599 Conversion of restricted share units, net of shares withheld for taxes 4,912,747 ​ ​ 7,720 ​ ( 7,690 ) ​ — ​ — ​ 30 Share purchase under Employee Share Purchase Plan ​ 173,672 ​ ​ 147 ​ ​ ( 45 ) ​ ​ — ​ ​ — ​ ​ 102 Exercise of stock options 120,000 ​ ​ 144 ​ ​ ( 67 ) ​ ​ — ​ ​ — ​ ​ 77 Share-based compensation and expenses settled with equity ​ — ​ ​ — ​ ​ 12,360 ​ ​ — ​ ​ — ​ ​ 12,360 Loss for the year — ​ ​ — ​ — ​ — ​ ( 73,781 ) ​ ( 73,781 ) December 31, 2023 306,558,710 ​ $ 438,239 ​ 122,797 $ ( 1,216 ) $ ( 548,902 ) $ 10,918 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 122 Table of Contents TMC the metals company Inc. Consolidated Statements of Cash Flows (in thousands of US Dollars) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended For the year ended ​ ​ ​ ​ December 31, ​ December 31, ​ ​ Note ​ 2024 ​ 2023 Cash provided by (used in) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating activities ​ ​ Loss for the year $ ( 81,943 ) $ ( 73,781 ) Items not affecting cash: ​ ​ ​ ​ Amortization 7 ​ 362 ​ 360 Lease Expense ​ 8 ​ ​ 1,907 ​ ​ 795 Accrued interest on credit facilities 8, 20 ​ 416 ​ — Share-based compensation and expenses settled with equity 17 ​ 25,313 ​ 12,360 Equity-accounted investment loss 9 ​ 226 ​ 571 Change in fair value of warrants liability ​ 15 ​ ​ ( 1,057 ) ​ ​ 986 Loss on termination of contract 10 ​ 199 ​ — Unrealized foreign exchange ​ ​ ​ ​ ( 1,222 ) ​ ​ ( 51 ) Interest paid on Short-Term Debt ​ 8 ​ ​ ( 73 ) ​ ​ — Changes in working capital: ​ ​ ​ ​ Receivables and prepayments ​ ​ 127 ​ 748 Accounts payable and accrued liabilities ​ 12,277 ​ ( 1,561 ) Net cash used in operating activities ​ ( 43,468 ) ​ ( 59,573 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Investing activities ​ ​ Acquisition of equipment and software 7 ​ ( 515 ) ​ ( 578 ) Net cash used in investing activities ​ ( 515 ) ​ ( 578 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Financing activities ​ ​ Proceeds from registered direct offering ​ 13 ​ ​ 23,900 ​ ​ 15,923 Expenses paid for registered direct offering ​ 13 ​ ​ ( 357 ) ​ ​ ( 1,182 ) Proceeds from Shares issued from ATM 14 ​ 4,866 ​ — Proceeds from drawdown of Credit Facilities ​ 20 ​ ​ 4,275 ​ ​ — Proceeds from Drawdown of Allseas Short-Term Debt ​ 8 ​ ​ 2,000 ​ ​ — Repayment of Allseas Short-Term Debt 8 ​ ( 2,000 ) ​ — Proceeds from drawdown of Allseas Working Capital Loan Agreement 8 ​ 7,500 ​ — Proceeds from Low Carbon Royalties Investment ​ ​ ​ ​ — ​ ​ 5,000 Proceeds from employee stock plans ​ 17 ​ ​ 39 ​ ​ 102 Proceeds from exercise of stock options ​ 17 ​ ​ 463 ​ ​ 77 Proceeds from exercise of warrants by Allseas ​ ​ ​ ​ — ​ ​ 116 Proceeds from issuance of shares ​ ​ — ​ 30 Net cash provided by financing activities ​ 40,686 ​ 20,066 ​ ​ ​ ​ ​ ​ ​ ​ ​ Decrease in cash $ ( 3,297 ) $ ( 40,085 ) Impact of exchange rate changes on cash ​ ( 65 ) ​ 51 Cash - beginning of year ​ 6,842 ​ 46,876 Cash - end of year $ 3,480 $ 6,842 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements. 123 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 1. Nature of Operations TMC the metals company Inc. (“TMC” or the “Company”) has been operating as a corporation under the laws of the province of British Columbia, Canada since September 9, 2021. The Company’s corporate office, registered address and records office is located at 1111 West Hastings Street, 15 th Floor, Vancouver, British Columbia, Canada, V6E 2J3. The Company’s common shares and warrants to purchase common shares are listed for trading on the Nasdaq Global Select Market (“Nasdaq”) under tickers “TMC” and “TMCWW”, respectively. The Company is a deep-sea minerals exploration company focused on the collection and processing of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone in the Pacific Ocean (“CCZ”), located approximately 1,300 nautical miles southwest of San Diego, California. These nodules contain four metals (nickel, copper, cobalt, manganese) which can be used as (i) feedstock for battery cathode precursors (nickel and cobalt sulfates, or intermediary nickel-copper-cobalt matte, or nickel-copper-cobalt alloy) for electric vehicles (“EV”) and energy storage markets, (ii) copper cathode for EV wiring, energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel production. Exploration and exploitation of seabed minerals in international waters is regulated by the International Seabed Authority (“ISA”), an intergovernmental organization established pursuant to the 1994 Agreement Relating to the Implementation of the United Nations Convention on the Law of the Sea. The ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state. The Company’s wholly owned subsidiary, Nauru Ocean Resources Inc. (“NORI”), was granted an exploration contract (the “NORI Exploration Contract”) by the ISA in July 2011 under the sponsorship of the Republic of Nauru (“Nauru”) giving NORI exclusive rights to explore for polymetallic nodules in an area covering 74,830 square kilometers in the CCZ (“NORI Area”). On March 31, 2020, the Company acquired Tonga Offshore Mining Limited (“TOML”), which was granted an exploration contract (the “TOML Exploration Contract”) by the ISA in January 2012 under the sponsorship of the Kingdom of Tonga (“Tonga”) and has exclusive rights to explore for polymetallic nodules covering an area of 74,713 square kilometers in the CCZ (“TOML Area”). In 2013, the Company through its subsidiary DeepGreen Engineering Pte. Ltd. (“DGE”) entered into an option agreement (the “Marawa Option Agreement”) with Marawa Research and Exploration Limited (“Marawa”) which granted DGE exclusive rights to manage and carry out all exploration and exploitation in the Marawa Area in return for a royalty payable to Marawa. On November 14, 2024, DGE issued a formal termination notice to Marawa pursuant to DGE’s right to terminate for convenience under the Agreement. The termination became effective on January 14, 2025. The realization of the Company’s assets and attainment of profitable operations is dependent upon many factors including, among other things: financing being arranged by the Company to continue operations, development of a nodule collection system for the recovery of polymetallic nodules from the seafloor as well as development of processing technology for the treatment of polymetallic nodules at commercial scale, the establishment of mineable reserves, the commercial and technical feasibility of seafloor polymetallic nodule collection and processing, metal prices, and regulatory approvals and environmental permitting for commercial operations. The outcome of these matters cannot presently be determined because they are contingent on future events and may not be fully under the Company’s control. 2. Basis of Presentation Statement of Compliance These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) and include the accounts of TMC and its wholly-owned subsidiaries. The comparative figures reported in the Consolidated Balance Sheet for software development costs and equipment have been reclassified to conform to the current year’s presentation. 124 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Basis of Measurement These consolidated financial statements have been prepared under the historical cost convention, except for warrants liability and royalty liability that have been measured at fair value and are presented in United States (“US”) dollars. Consolidation These consolidated financial statements include the financial statements of the Company and its subsidiaries. The principal subsidiaries of the Company, their activities, and their geographic locations as at December 31, 2024, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Proportion of ​ ​ ​ ​ ​ ​ Interest Held Subsidiary (1) ​ Principal Activity ​ Location ​ by the Company DeepGreen Engineering Pte. Ltd. Mineral exploration Singapore 100 % DeepGreen Metals ULC Mineral exploration Canada 100 % The Metals Company USA, LLC Holding Company USA 100 % DeepGreen TOML Holding 1 Ltd. Holding Company British Virgin Islands 100 % DeepGreen TOML Holding 2 Ltd. Holding Company British Virgin Islands 100 % DeepGreen TOML Singapore Ltd. Mineral exploration Singapore 100 % Koloa Moana Resources Ltd. Holding Company Canada 100 % Nauru Ocean Resources Inc. Mineral exploration Republic of Nauru 100 % Offshore Minerals Pty. Ltd. Mineral exploration Australia 100 % The Metals Company Australia Pty Ltd Holding Company Australia 100 % TMC The Metals Company UK Limited Holding Company United Kingdom 100 % Tonga Offshore Mining Limited Mineral exploration Kingdom of Tonga 100 % Seafloor Mineral Ventures (2) ​ Mineral exploration ​ Indonesia ​ 100 % (1) The Company’s wholly owned subsidiaries Nauru Education and Training Foundation Inc. and Nauru Health and Foundation Inc. were voluntarily dissolved on June 30, 2024. (2) PT Seafloor Mineral Ventures was incorporated on May 17, 2024. All intra-group balances have been eliminated on consolidation. 3. Significant Accounting Policies i. Foreign Currencies The functional currency is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and all its subsidiaries is the U.S. Dollar. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated into the functional currency at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in currencies other than the U.S. Dollar are translated at rates prevailing at the date when the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated. All gains and losses on translation of these foreign currency transactions are included in the statements of loss and comprehensive loss. ii. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the notes thereto. Significant estimates and assumptions 125 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ reflected in these consolidated financial statements include, but are not limited to, the evaluation of going concern, the valuation of share-based payments, including valuation of incentive stock options (Note 17), as well as the valuation of warrants liability (Note 15), and the valuation of the royalty liability (Note 9). Actual results could differ materially from those estimates. iii. Loss Per Share Basic loss per share is computed by dividing loss available to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted loss per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on the loss per share. The dilutive effect of convertible securities is reflected in the diluted loss per share by application of the “if converted” method. The dilutive effect of outstanding options and their equivalents is reflected in the diluted loss per share by application of the treasury stock method. iv. Financial Instruments Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired, or have been transferred, and the Company has transferred substantially all risks and rewards of ownership. A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled, or expires. The Company’s financial instruments consist of cash and cash equivalents, receivables, short-term debt, accounts payable and accrued liabilities which are recorded at cost as well as royalty liability and warrants to acquire common shares of the Company which are measured at fair value. v. Fair Value of Financial Instruments Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value. The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. In accordance with U.S. GAAP, the Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: ● Level 1  - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access. ● Level 2  - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. ● Level 3  - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. There were no transfers between fair value measurement levels during the years ended December 31, 2024 and 2023. 126 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ As at December 31, 2024, and 2023, the carrying values of cash, receivables, short-term debt, accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The financial instruments also include royalty liability and warrants which are recorded at fair value as disclosed in Note 9. vi. Cash and Cash Equivalents Cash includes cash on hand and term deposits with a remaining term to maturity at acquisition of three months or less. As at December 31, 2024 and 2023, the Company had no cash equivalents. vii. Equipment and Software Equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, when it is probable that future economic benefits from such assets will flow to the Company and the cost of such assets can be measured reliably. The carrying amount of an asset is derecognized when it is replaced or taken out of service. Repairs and maintenance costs are charged to the statement of loss and comprehensive loss during the period they are incurred. The major categories of equipment are amortized on a declining balance basis as follows: ​ ​ ​ ​ ​ Exploration and other equipment 30 % Office equipment 30 % ​ The Company allocates the amount initially recognized to each asset’s significant components and depreciates each component separately. Amortization methods and useful life of the assets are reviewed at each financial period end and adjusted on a prospective basis, if required. Gains and losses on disposals of equipment are determined by comparing the proceeds with the carrying amount of the asset and are included in the statement of loss and comprehensive loss. Software is currently under development and is stated at cost. The software will be used to monitor nodule collection on the sea floor. The Company will amortize the cost of the software over its useful life after it is put in use, on commencement of nodule collection and treatment at a commercial scale. viii. Exploration Contracts The Company is in the exploration stage with respect to its investment in exploration contracts and follows the practice of capitalizing costs related to the acquisition of such exploration contracts. The cost of exploration contracts will be charged to operations using a unit-of-production method based on proven and probable reserves once commercial production commences in the future. The Company evaluates impairment indicators on its exploration contracts at each reporting period and adjusts its carrying value if an impairment is identified. ix. Exploration and Evaluation Expenses While in the exploration phase, the Company expenses all costs related to exploration and development of exploration contracts. Such exploration and development costs include, but are not limited to, exploration contract management, geological, geochemical and geophysical studies, environmental studies and process development. 127 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ x. Share-Based Compensation Share-based compensation is measured at the grant date based on the fair value of the award and is recognized over the requisite service period. Share-based compensation costs are charged to exploration and evaluation expenses or general and administrative expenses in the statement of loss and comprehensive loss. The Company recognizes forfeiture of any awards as they occur. The Company records share-based compensation from the issuance of stock options and restricted share units (“RSUs”) to employees with service-based conditions using the accelerated attribution method. For stock options and restricted share units issued with performance conditions (Note 17), the Company recognizes share-based compensation cost when the specific performance targets become probable of being achieved using the accelerated attribution method. When these costs relate to equity financing, they are netted against share capital as a share issuance cost. The fair value of stock option awards with only service and/or performance conditions is estimated on the grant date using a Black-Scholes option-pricing model. For stock options and restricted share units issued with market conditions (Note 17), the Company recognizes share-based compensation cost over the expected achievement period for the related market capitalization milestone determined on the grant date. If the related market capitalization milestone is achieved earlier than its expected achievement period, then any unamortized share-based compensation cost for that milestone is recognized at that time. The fair value of market-based stock option awards is estimated on the grant date using Monte-Carlo simulations. The Company at times grants common shares, stock options or RSUs in lieu of cash to certain vendors for their services to the Company. The Company recognizes the associated cost in the same period and manner as if the Company paid cash for the services provided. xi. Warrants Liability The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to U.S. GAAP Accounting Standard Coding (“ASC”) 480, Distinguishing Liability from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”). The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The Company accounts for the Public Warrants and Private Warrants (as defined below) in accordance with the guidance contained in ASC 815 (Subtopic 40), Derivative and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”), and the U.S. Securities and Exchange Commission (“SEC”) Division of Corporation Finance’s April 12, 2021 Public Statement, Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SEC Statement”), under which the 15,000,000 common share warrants issued by the Company as part of the units offered in its initial public offering (“Public Warrants”) were determined to meet the criteria for equity classification, while the 9,500,000 private placement common share warrants issued by the Company in a private placement simultaneously with the closing of the initial public offering (“Private Warrants”) did not meet the criteria for equity classification and were recorded as liabilities. Specifically, the terms of the Private Warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a Private Warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the Private Warrants from being classified in equity and should be classified as a liability. Accordingly, the Company classified the Private Warrants as liabilities measured at fair value and adjusts the Private Warrants to their fair value at the end of each reporting period. Fair value changes in the Private Warrants are recognized in the Company’s statement of loss and comprehensive loss. The Company issued Class A Warrants and Class B Warrants in 2024. The Class A Warrants and Class B Warrants met the criteria for equity classification and were recorded under additional paid in capital (Note 15). 128 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ xii. Income Taxes Income tax expense represents the sum of current tax expense and deferred tax expense. Current tax expense is based on taxable profit for the year and includes any adjustments to tax payable in respect of previous years. Taxable profit differs from accounting profit or loss as reported in the consolidated income statement because it excludes (i) items of income or expense that are taxable or deductible in other years and (ii) items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted by the balance sheet date. The Company’s policy is to account for income tax related interest and penalties in income tax expense in the accompanying statements of loss and comprehensive loss. Deferred tax income taxes are accounted for using the asset and liability method. Deferred income tax assets and liabilities are based on temporary differences, which are differences between the accounting basis and tax basis of assets and liabilities, non-capital loss, capital loss, and tax credits carryforwards and are measured using the enacted tax rates and laws expected to apply when these differences reverse. Deferred tax benefits, including non-capital loss, capital loss, and tax credit carryforwards are recognized to the extent that realization of such benefits is considered more likely than not. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated income statement in the period that enactment occurs. When realization of deferred income tax assets does not meet the more likely than not criterion for recognition, a valuation allowance is provided. xiii. Leases The Company records leases in accordance with ASC 842, Leases , and determines if an arrangement contains a lease at inception. Specifically, a contract is or contains a lease when (1) the contract contains an explicitly or implicitly identified asset and (2) we obtain substantially all of the economic benefits from the use of that underlying asset and direct how and for what purpose the asset is used during the term of the contract in exchange for consideration. If an arrangement contains a lease, the Company performs a lease classification test to determine if the lease is an operating lease or a finance lease. Right-of-use (“ROU”) assets represent the right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are recognized on the commencement date of the lease based on the present value of the future lease payments over the lease term. The discount rate used to calculate the present value of lease payments is the rate implicit in the lease. Lease liabilities due within the subsequent 12 months of the reporting date are classified as current lease liabilities and are included in accounts payable and accrued liabilities on the Company’s condensed consolidated balance sheet. Lease liabilities payable after the subsequent 12 months of the reporting date are classified as non-current lease liabilities and are presented as non-current lease liability in the condensed consolidated balance sheet. ROU assets are valued at the initial measurement of the lease liability, plus any indirect costs or rent prepayments, and reduced by any lease incentives and any deferred lease payments. ROU assets are recorded as Right-of-use assets, net of any amortization on the condensed consolidated balance sheet. Operating ROU assets are amortized on a straight-line basis over the lease term, whereas Finance ROU assets are amortized on a front-loaded basis. Depending on the nature of the ROU asset, the amortization expense is either included in exploration and evaluation expenses or in general and administrative expenses. The Company subsequently measures the ROU assets for an operating lease at the amount of the remeasured lease liability (i.e. the present value of the remaining lease payments), adjusted for the remaining balance of any lease incentives received, any cumulative prepaid or accrued rent if the lease payments are uneven throughout the lease term and any unamortized initial direct costs. The ROU assets for a finance lease are subsequently measured by amortizing them on a straight-line basis over the shorter of the lease term or useful life and also adjustment for any impairments. 129 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ xiv. Investments The Company consolidates investments over which it has control in accordance with ASC 810, Consolidation (“ASC 810”). Where the Company does not have control over the investment, but has significant influence, the Company records the investment in accordance with ASC 323, Investments-Equity Method and Joint Ventures , whereby, after recording the initial investment, the Company recognizes its proportional share of results of operations of the affiliate in its consolidated financial statements. The value of the equity method investments is impaired if it is determined that there is an other-than-temporary decline in value. xv. Short term debt The Company records borrowings under its short-term debt and line of credit at the amount drawn, net of any directly attributable financing costs. Interest expense is recognized as incurred based on the interest rate specified in the debt and line of credit agreements (Notes 8 and 20). Short-term debt and outstanding balances under the line of credit, are stated under Short-term debt and classified as a current liability. The accrued interest payable amount on the short-term debt and line of credit is disclosed under Accounts payable and accrued liabilities and classified as current liability. 4. Significant Accounting Estimates and Judgements The preparation of financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Significant management judgments and estimates were applied to the following areas: i. Evaluation of Going Concern The Company evaluates its ability to operate as a going concern at each reporting period. This evaluation requires the Company to estimate its cash flow commitments over a forecast period of twelve months and whether it has the financial ability to pay for such commitments. Changes in these estimates and assumptions may have a material impact on this assessment. ii. Valuation of Share-Based Payments The fair market value of share-based awards granted to employees, non-employees and directors is based on the closing market price of the Company’s shares, on the date these were granted (Note 17). This valuation approach involves the use of estimates, judgments and assumptions that are subjective, such as those regarding the probability of future events. Changes in these estimates and assumptions impact the Company’s valuation as of the valuation date and may have a material impact on the valuation of the Company’s common shares. Changes in these assumptions used to determine the fair value of incentive stock options, including the vesting timeline of granted stock options, could have a material impact on the Company’s loss and comprehensive loss. iii. Valuation of Warrants The Company re-measures the fair value of the Private Warrants at the end of each reporting period (Note 15). The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model whereby the expected volatility was estimated using a binomial model that assigned equal weight to the implied volatility of the Company’s Public Warrants, adjusted for the call feature triggered at prices above $ 18.00 over 20 trading days within any 30 -day period, and the historical volatility of the common share price. 130 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ During the year the Company issued Class A warrants and Class B warrants (Note 15). The warrants were valued using a Monte Carlo simulation by running 250,000 trials. The model assumed that the Company’s share price follows geometric Brownian motion which is a standard assumption used in Monte Carlo univariate pricing models. The valuation was calculated under a risk-neutral framework using a zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve for a term until the expiry of the Warrants. The Company’s share price was simulated up to the expiration date using a blended volatility, calculated by assigning equal weights to both implied volatility of the Company’s Public Warrants and the historical volatility of the Company’s share price. iv. Valuation of Royalty Liability The Company re-measures the fair value of its royalty liability at each reporting date (Note 9). As NORI is in an advanced exploration stage and pre-production, the fair value of the royalty liability is measured by using a market approach which entails examining recent royalty transactions prior to the reporting date, focusing on those transactions that involve similar metals as contained in NORI’s polymetallic nodules. The Company compares the specific characteristics of these transactions to estimate the fair value of its royalty liability at the reporting date. ​ 5. Recent Accounting Pronouncements Issued and Adopted ​ In November 2023, Accounting Standard Update (“ASU”) 2023-07 was issued which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses and assets. The ASU applies to all public entities that are required to report segment information in accordance with ASC 280. The adoption of this update did not have a material impact on the Company’s consolidated financial statements or disclosures. 6. Receivables and Prepayments The amounts of outstanding receivables and prepayments at December 31, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31 2024 December 31 2023 Taxes and other receivables $ 249 $ 467 Prepayments ​ 1,602 ​ 1,511 ​ $ 1,851 $ 1,978 ​ 131 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ ​ 7. Equipment and Software The movements in the Company’s capital equipment are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost ​ Equipment ​ Software (1) December 31, 2022 $ 2,963 ​ $ 863 Additions ​ 331 ​ 780 December 31, 2023 $ 3,294 ​ $ 1,643 Additions ​ — ​ 285 December 31, 2024 $ 3,294 ​ $ 1,928 ​ ​ ​ ​ ​ ​ ​ Accumulated depreciation ​ ​ ​ December 31, 2022 $ ( 1,801 ) ​ $ — Amortization for the year ​ ( 360 ) ​ — December 31, 2023 $ ( 2,161 ) ​ $ — Amortization for the year ​ ( 362 ) ​ — December 31, 2024 $ ( 2,523 ) ​ $ — ​ ​ ​ ​ ​ ​ ​ Net book value ​ ​ ​ ​ As at December 31, 2023 $ 1,133 ​ $ 1,643 As at December 31, 2024 $ 771 ​ $ 1,928 (1) The software is under development and not in use. ​ 8. Strategic Alliance with Allseas and Affiliates Development of Project Zero Offshore Nodule Collection System On March 16, 2022, NORI and Allseas entered into a non-binding term sheet for the development and operation of a commercial nodule collection system. During the year ended December 31, 2024, Allseas provided the Company with engineering, project management and vessel use services consisting of lay-up and transit costs totaling $ 11.9 million, as part of the development of the commercial nodule collection system: these costs were recorded as mining, technological and process development within exploration and evaluation expenses (Note 10) (2023: $ 12.1 million). Exclusive Vessel Use Agreement with Allseas On August 1, 2023, the Company entered into an Exclusive Vessel Use Agreement with Allseas pursuant to which Allseas will give exclusive use of the vessel (“ Hidden Gem”) to the Company in support of the development of the Project Zero Offshore Nodule Collection System until the system is completed or December 31, 2026, whichever is earlier. In consideration of the exclusivity term, the Company, on August 14, 2023, issued 4.15 million common shares to Allseas. Allseas can terminate the agreement if the Company ceases normal operations, assigns assets to creditors, initiates bankruptcy proceedings, or faces unresolved bankruptcy-related actions. The Company recorded a lease liability and right-of-use asset of $ 6.5 million, which represents the fair value of 4.15 million common shares issued to Allseas on August 14, 2023, as consideration, and equal to the present value of the lease payments. As the entire lease liability was settled within 14 days of the commencement of the lease, the discount rate for calculating the present value of lease payments was determined to be insignificant. 132 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ For the year ended December 31, 2024, the Company has recognized $ 1.9 million as lease expense recorded as exploration and evaluation expense (December 31, 2023: $ 0.8 million). As at December 31, 2024, the net amount of the lease liability was $ nil and right-of-use asset is as follows: ​ ​ ​ ​ ​ ​ Lease Liability Balance as at August 1, 2023 ​ $ 6,515 Payments made on August 14, 2023, by issuing 4.15 million common shares ​ 6,515 Balance as at December 31, 2023 and 2024 ​ $ — ​ ​ ​ ​ ​ ​ Right-of-use Asset Balance as on August 1, 2023 ​ $ 6,515 Lease expense during the year ​ ​ 794 Balance as at December 31, 2023 ​ $ 5,721 Lease expense during the year ​ 1,907 Balance as at December 31, 2024 ​ $ 3,814 ​ 2023 Credit Facility and Loan Agreements with Company Related to Allseas On March 22, 2023, the Company entered into an Unsecured Credit Facility Agreement, which was amended on July 31, 2023 (“2023 Credit Facility”), with Argentum Cedit Virtuti GCV (the “Lender”), the parent of Allseas Investments S.A. (“Allseas Investments”) and an affiliate of Allseas, pursuant to which, the Company may borrow from the Lender up to $ 25 million in the aggregate, from time to time, subject to certain conditions. All amounts drawn under the 2023 Credit Facility will bear interest based on the 6-month Secured Overnight Financing Rate, 180 -day average plus a margin of 4.0 % per annum payable in cash semi-annually (or plus a margin of 5 % if paid-in-kind at maturity, at the Company’s election) on the first business day of each of June and January. The Company will pay an underutilization fee equal to 4.0 % per annum payable semi-annually for any amounts that remain undrawn under the 2023 Credit Facility. The Company has the right to pre-pay the entire amount outstanding under the 2023 Credit Facility at any time before the 2023 Credit Facility’s maturity. The Company has the ability to settle certain charges under the 2023 Credit Facility in cash or in equity at the discretion of the Company. The 2023 Credit Facility also contains customary events of default. On March 22, 2024, the Company entered into the Second Amendment to the Unsecured Credit Facility with the Lender, to extend the 2023 Credit Facility to August 31, 2025 and to provide that the underutilization fee thereunder shall cease to be payable after the date on which the Company or the Lender gives notice of termination of the agreement. Under the amended 2023 Credit Facility, the Company may borrow from the Lender up to $ 25 million in the aggregate through August 31, 2025. On August 16, 2024, the Company entered into the Third Amendment to the 2023 Credit Facility, to increase the borrowing limit of the 2023 Credit Facility to $ 27.5 million. On November 14, 2024, as a result of the 2024 Registered Direct Offering (Note 13) the borrowing limit of the 2023 Credit Facility was returned to $ 25 million. During the year ended December 31, 2024, the Company has not drawn any amount from the 2023 Credit Facility and has incurred $ 1 million as underutilization fees (December 31, 2023: $ 0.8 million). On May 27, 2024, the Company entered into a short-term loan agreement with the Lender. In accordance with the agreement, the Lender provided a short-term loan to the Company amounting to $ 2 million (the “Short-Term Loan”) on May 30, 2024. The Short-Term Loan matured on September 10, 2024 (maturity date) and accrued interest at a rate of 8 % per annum. On the maturity date, Company repaid the entire Loan of $ 2 million and the accrued interest amounting to $ 46 thousand., which was recorded as interest expense. On September 9, 2024, the Company entered into a working capital loan agreement (the “Working Capital Loan Agreement”) with Allseas Investments, a company related to Allseas. In accordance with the Working Capital Loan Agreement, Allseas Investments provided a loan to the Company of $ 5 million (the “Working Capital Loan”) on September 10, 2024, to be used towards general corporate purposes and for the repayment of all outstanding amounts under the Short-Term Loan between the Company and the 133 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Lender. The Working Capital Loan is payable to Allseas Investments on or before the earlier of (i) the occurrence of certain financing events and (ii) April 1, 2025 (the “Repayment Date”). The Working Capital Loan will bear interest based on the 6-month Secured Overnight Financing Rate, 180 -day average plus a margin of 4.0 % per annum and is payable in two installments on January 2, 2025, and the Repayment Date (or plus a margin of 5.0 % if all interest payments are deferred to the Repayment Date, at the Company’s election). On October 18, 2024, the Company entered into the First Amendment to the Working Capital Loan Agreement with Allseas Investments, resulting in a further draw of $ 2.5 million by the Company and a total Working Capital Loan drawn amount of $ 7.5 million. On March 24, 2025, the Company entered into a Letter Agreement with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the Repayment Date under the Working Capital Loan Agreement was extended to September 30, 2025, with principal and interest now repayable on that date. Additionally, under the same Letter Agreement, the Company and Argentum Cedit Virtuti GCV agreed to cancel the unsecured credit facility established under the 2023 Facility Agreement with no outstanding amounts remaining, other than the Company’s obligation to pay Argentum the Underutilization Fee. During the year ended December 31, 2024, the Company incurred $ 0.2 million as interest expense. As at December 31, 2024, the total amount payable to Allseas and its affiliates was $ 33.3 million, with $ 7.5 million of this amount recorded as short-term debt and the remaining balance recorded in accrued liabilities in the Consolidated Balance Sheet (Note 12) (December 31, 2023: $ 13.8 million, recorded as accrued liabilities). As at December 31, 2024, Allseas and its affiliates owned 53.8 million TMC common shares (2023: 53.8 million TMC common shares) which constituted 15.8 % (December 31, 2023: 17.6 % ) of total common shares outstanding. ​ 9. Investment in Low Carbon Royalties On February 21, 2023 (the “Closing Date”), the Company and its wholly-owned subsidiary, NORI, entered into an investment agreement (the “Royalty Agreement”) with Low Carbon Royalties Inc. (“Low Carbon Royalties”). In connection with the Royalty Agreement, NORI contributed a 2 % gross overriding royalty (the “NORI Royalty”) on the Company’s NORI project area in the CCZ to Low Carbon Royalties. In consideration of the NORI Royalty, TMC received 35.0 % of the common shares issued by Low Carbon Royalties and $ 5 million in cash, as of the Closing Date. On March 21, 2023, Low Carbon Royalties acquired additional gross overriding royalties on natural gas fields in Latin America. The royalty acquisitions were financed through the issuance of Low Carbon Royalties common shares to the third-party vendor of such royalties, thereby reducing the Company’s ownership in the Partnership to 32 % from 35 %. In connection with the Royalty Agreement the Company entered into an Investor Rights Agreement with Low Carbon Royalties and a shareholder of Low Carbon Royalties, pursuant to which the Company and this shareholder each have a right, subject to certain percentage maintenance, to nominate a director to Low Carbon Royalties’ board of directors, along with registration and information rights. As a condition of closing the Royalty Agreement, the parties entered into an agreement with Low Carbon Royalties to mitigate risks associated with the potential termination of the exploitation license granted for one of the royalty-producing natural gas fields in Latin America (the “Exploitation License”). As per the agreement, 5 million contingent value rights (“CVR”) were issued to NORI. The CVR would convert into 5 million additional shares of Low Carbon Royalties all of which would be issued to NORI, in the event the Exploitation License is found, in a final decision, to be invalid by the Colombian National Agency of Hydrocarbons prior to the earlier of (1) five years from the issuance of the CVR and (2) the date Low Carbon Royalties becomes a publicly listed entity. Based on the fair value of the NORI Royalty granted and the cash received, the Company recorded $ 9 million as investment in Low Carbon Royalties on the Closing Date. For the year ended December 31, 2024, the Company’s share of the net loss generated by the Low Carbon Royalties was $ 0.2 million (2023: 0.6 million). ​ 134 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ ​ ​ ​ ​ ​ Investment Fair value of NORI Royalty ​ $ 14,000 Cash received ​ ​ ( 5,000 ) Cost of Investment on Closing Date ​ ​ 9,000 Equity-accounted investment loss for the year ended 2023 ​ ( 571 ) Investment as at December 31, 2023 ​ $ 8,429 Equity-accounted investment loss for the year ended 2024 ​ ​ ( 226 ) Investment as at December 31, 2024 ​ $ 8,203 ​ The NORI Royalty was recorded as a royalty liability in the consolidated Balance Sheet in accordance with ASC 470, Debt (“ASC 470”). The Company elected to account for the royalty liability at fair value through profit and loss. The fair value was determined using a market approach which entails examining recent royalty transactions prior to the reporting date, focusing on those transactions that involve similar metals as contained in NORI’s polymetallic nodules. The Company compares the specific characteristics of these transactions to estimate the fair value. The fair value of the royalty liability as at December 31, 2024 remained unchanged at $ 14 million. Financial results of Low Carbon Royalties as at and for the years ended December 31, 2024 and 2023 are summarized below: ​ ​ ​ ​ ​ ​ ​ ​ ​ As at As at ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Current Assets ​ $ 1,660 ​ ​ 1,091 Non-Current Assets ​ ​ 25,277 ​ ​ 26,315 Current Liabilities ​ ​ — ​ ​ 131 ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Royalty Income ​ $ 1,459 ​ ​ 399 Total Revenue ​ 1,515 ​ ​ 480 Comprehensive Loss for the Year ​ $ ( 689 ) ​ ​ ( 1,747 ) ​ ​ 10. Exploration Contracts Significant Exploration Agreements NORI Exploration Contract: The Company’s wholly-owned subsidiary, NORI, was granted the NORI Exploration Contract on July 22, 2011 under the sponsorship of Nauru. The contract application fee of $ 0.3 million, provides NORI with exclusive rights to explore for polymetallic nodules in the NORI Area for an initial term of 15 years (renewable for successive five-year periods) subject to complying with the exploration contract terms (Note 21) and provides NORI with the priority right to apply for an exploitation contract to collect polymetallic nodules in the same area. NORI has a right to renounce, without penalty, in whole or part of its rights in the NORI Area at any time and therefore does not have a fixed commitment with relation to the NORI Exploration Contract (Note 21). 135 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ TOML Exploration Contract: TOML was granted the TOML Exploration Contract on January 11, 2012 under the sponsorship of Tonga. The TOML Exploration Contract provides TOML with exclusive rights to explore for polymetallic nodules in the TOML Area for an initial term of 15 years (renewable for successive five-year periods) subject to complying with the exploration contract terms and a priority right to apply for an exploitation contract to collect polymetallic nodules in the same area. On March 31, 2020, the Company entered into an acquisition agreement with Deep Sea Mining Finance Ltd. to acquire TOML and other related entities in the group (the “TOML Acquisition”). Total purchase price of the TOML Acquisition, before transaction costs, was $ 32.0 million comprising of $ 42.7 million for exploration contracts offset by $ 10.7 million for deferred tax liability. TOML holds an ISA exploration contract in the CCZ (“TOML Exploration Contract”) and some exploration related equipment. Reconciliation – Exploration Contracts A reconciliation of the Company’s capitalized exploration contracts is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Marawa ​ ​ ​ ​ ​ ​ NORI ​ Option ​ TOML ​ ​ ​ ​ ​ Contract ​ Agreement ​ Contract ​ Total December 31, 2023 $ 250 ​ $ 199 ​ $ 42,701 ​ $ 43,150 Termination of Marawa Agreement ​ ​ — ​ ​ ( 199 ) ​ ​ — ​ ​ ( 199 ) December 31, 2024 $ 250 ​ $ — ​ $ 42,701 ​ $ 42,951 ​ The detail of exploration and evaluation expenses is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI Marawa TOML ​ ​ ​ ​ Exploration ​ Option ​ Exploration ​ ​ ​ For the year ended December 31, 2024 ​ Contract ​ Agreement ​ Contract ​ Total Environmental Studies ​ $ 2,891 ​ $ 270 ​ $ 73 ​ $ 3,234 Exploration Labor ​ ​ 8,706 ​ ​ 85 ​ ​ 633 ​ ​ 9,424 Share-Based Compensation (Note 17) ​ 9,638 ​ 14 ​ 799 ​ 10,451 Mining, Technological and Process Development ​ ​ 21,173 ​ ​ — ​ ​ 1,219 ​ ​ 22,392 Prefeasibility Studies ​ ​ 1,120 ​ ​ — ​ ​ — ​ ​ 1,120 Sponsorship, Training and Stakeholder Engagement ​ ​ 2,353 ​ ​ 115 ​ ​ 601 ​ ​ 3,069 Permit Application Activities ​ ​ 297 ​ ​ — ​ ​ — ​ ​ 297 Other ​ 640 ​ — ​ 16 ​ 656 ​ ​ $ 46,818 ​ $ 484 ​ $ 3,341 ​ $ 50,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORI Marawa TOML ​ ​ ​ ​ Exploration ​ Option ​ Exploration ​ ​ ​ For the year ended December 31, 2023 ​ Contract ​ Agreement ​ Contract ​ Total Environmental Studies ​ $ 16,421 ​ $ — ​ $ — ​ $ 16,421 Exploration Labor ​ ​ 7,268 ​ ​ 227 ​ ​ 711 ​ ​ 8,206 Share-Based Compensation (Note 17) ​ 4,444 ​ 146 ​ 443 ​ 5,033 Mining, Technological and Process Development ​ ​ 13,694 ​ ​ — ​ ​ 1,262 ​ ​ 14,956 Prefeasibility Studies ​ ​ 1,345 ​ ​ — ​ ​ — ​ ​ 1,345 Sponsorship, Training and Stakeholder Engagement ​ ​ 2,248 ​ ​ 202 ​ ​ 996 ​ ​ 3,446 Other ​ ​ 433 ​ ​ — ​ ​ 9 ​ ​ 442 ​ ​ $ 45,853 ​ $ 575 ​ $ 3,421 ​ $ 49,849 ​ ​ 136 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 11. General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended For the year ended ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 Professional and consulting fees (1) ​ $ 8,532 ​ $ 6,584 Investor relations ​ 1,547 ​ 1,547 Office and sundry ​ 3,047 ​ 3,503 Salaries and wages ​ 5,813 ​ 4,995 Director fees ​ 814 ​ 774 Share-based compensation ​ 9,793 ​ 4,122 Transfer agent and filing fees ​ 321 ​ 363 Travel expenses ​ 494 ​ 609 Other expenses ​ 283 ​ 43 General and Administrative Expenses ​ $ 30,644 ​ $ 22,540 (1) Professional and consulting fees include $ 1.2 million of expenses settled with RSUs in 2024 (2023: $ 0.4 million). ​ 12. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities at December 31, 2024 and 2023 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, ​ ​ 2024 ​ 2023 Accounts Payable ​ $ 6,198 ​ $ 2,442 Accrued Liabilities (1) ​ 36,556 ​ 28,892 ​ ​ $ 42,754 ​ $ 31,334 (1) As at December 31, 2024, accrued liabilities totaled $36.5 million (December 31, 2023 - $ 28.9 million), of which $ 25.8 million relates to Allseas (Note 8) (December 31, 2023 - $ 13.8 million). 13. Financing Activity 2023 Registered Direct Offering On August 14, 2023, the Company entered into a securities purchase agreement (the “2023 Purchase Agreement”) with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “2023 Registered Direct Offering”) 12,461,540 common shares and issue Class A Warrants to purchase 6,230,770 common shares (“Class A Warrants”) (Note 15). Each common share and accompanying Class A Warrant were sold at a price of $ 2.00 per unit. The exercise price to purchase one common share under the Class A Warrants is $ 3.00 , subject to adjustment as provided in the warrant agreement. On January 30, 2024, the Company received the final balance of the committed funding amounting to $ 9 million (representing 4,500,000 common shares and 2,250,000 Class A Warrants) from an investor affiliated with the Company. As at December 31, 2024, all common shares and Class A Warrants to purchase common shares under the 2023 Registered Direct Offering had been issued and the Company received gross proceeds amounting to $ 24.9 million. The Company incurred $ 1.3 million as offering expenses, resulting in net proceeds received of $ 23.6 million. Out of the total net proceeds received of $ 23.6 million, the net proceeds attributable to common shares were $ 18.9 million (Note 16) and the net proceeds attributable to Class A Warrants were $ 4.7 million (Note 15). 137 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 2024 Registered Direct Offering On November 14, 2024, the Company entered into a securities purchase agreement (the “2024 Purchase Agreement”) with certain investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering (the “2024 Registered Direct Offering”) 17,500,000 common shares and issue Class B Warrants to purchase 8,750,000 Common Shares (“Class B Warrants”) (Note 15). Each common share and accompanying Class B Warrant were sold at a price of $ 1.00 per unit. The exercise price to purchase one common share under the Class B Warrants is $ 2.00 , subject to adjustment as provided in the 2024 Purchase Agreement. On November 26, 2024, the Company and the requisite initial investors entered into the First Amendment to the 2024 Purchase Agreement, pursuant to which the Company agreed to sell and issue an additional 2,400,000 common shares and accompanying Class B Warrants to purchase 1,200,000 common shares to new investors on the same terms and conditions as initially offered. Including the First Amendment to the 2024 Purchase Agreement, the Company agreed to sell and issue in aggregate 19,900,000 common shares and Class B Warrants to purchase 9,950,000 common shares. As at December 31, 2024, 14,900,000 common shares and Class B Warrants to purchase 7,450,000 common shares under the 2024 Registered Direct Offering had been issued following the receipt of gross proceeds of $ 14.9 million. The Company incurred $ 0.7 million as offering expenses, resulting in net proceeds received of $ 14.2 million. Out of the total net proceeds received of $ 14.2 million, the net proceeds attributable to common shares were $ 9.7 million (Note 16) and the net proceeds attributable to Class B Warrants were $ 4.5 million (Note 15). On February 6, 2025, the Company received the final balance of committed funding of $ 5 million (representing 5,000,000 common shares and 2,500,000 Class B Warrants). ​ 14. Shares issued as per At-the-Market Equity Distribution Agreement (“ATM”) ​ In December 2022, the Company filed a prospectus supplement with the Securities and Exchange Commission to sell up to $ 30 million of the Company’s common shares from time to time through an ATM. In 2024, the Company issued 3,251,588 common shares (2023: nil ) at an average share price of $ 1.53 , resulting in net proceeds of $ 4.9 million, after incurring $ 113 thousand as commission and fees (Note 16). ​ 15. Warrants Public Warrants As at December 31, 2024, 15,000,000 Public Warrants were outstanding. Each whole Public Warrant entitles the holder to purchase one common share at a price of $ 11.50 per share beginning on October 9, 2021, subject to restrictions as described further. Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will expire on September 9, 2026 or earlier upon redemption or liquidation. Public Warrant holders do not have the rights or privileges of holders of common shares nor any voting rights until they exercise their warrants and receive common shares. The Company will not be obligated to deliver any common shares pursuant to the exercise of a Public Warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act of 1933, as amended (“Securities Act”) with respect to the common shares underlying the Public Warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No Public Warrants will be exercisable and the Company will not be obligated to issue a common share upon exercise of a Public Warrant unless the common share issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In the event that the conditions in the two immediately preceding sentences are not satisfied with respect to a Public Warrant, the holder of such warrant will not be entitled 138 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ to exercise such warrant and such warrant may have no value and expire worthless. In no event will the Company be required to net cash settle any Public Warrants. In the event that a registration statement is not effective for the exercised Public Warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the common share underlying such unit. The Company may call the Public Warrants for redemption: ● in whole and not in part; ● at a price of $ 0.01 per warrant; ● upon a minimum of 30 days ’ prior written notice of redemption; and ● if, and only if, the closing price of the common shares equals or exceeds $ 18.00 per share (as adjusted for share subdivisions, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - day trading period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the Public Warrants for redemption in certain circumstances, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a cashless basis, by surrendering the Public Warrants for a number of common shares per warrant equal to the lesser of: ● the quotient obtained by dividing (x) the product of the number of common shares underlying such warrant, multiplied by the excess of the average reported closing price of common shares for the ten trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders (“Fair Market Value”) over the warrant price by (y) the Fair Market Value, and ● 0.365 . As at December 31, 2024, the value of outstanding Public Warrants of $ 19.5 million was recorded in additional paid in capital. Private Warrants As at December 31, 2024, 9,500,000 Private Warrants were outstanding. The Private Warrants (including the common shares issuable upon exercise of the Private Warrants) were not transferable, assignable or salable until October 9, 2021, except to permitted transferees. The Private Warrants are identical to the Public Warrants, except that so long as they are held by the Sponsor or any of its permitted transferees: (i) the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and (ii) the Private Warrants are not redeemable by the Company. The Private Warrants are subject to the Company’s redemption option at the price of $ 0.01 per warrant, if not held by the Sponsor or any of its permitted transferees, provided that the other conditions of such redemption are met, as described above. If holders of the Private Warrants elect to exercise the warrants on a cashless basis, the holder would pay the exercise price by surrendering their Private Warrants for a number of common shares equal to: ● the quotient obtained by dividing (x) the product of the number of common shares underlying the warrants, multiplied by the excess of the average reported closing price of the common shares for the ten trading days ending on the third trading day prior to the date on which the notice of warrant exercise is sent to the warrant agent (“fair market value”) over the exercise price of the warrants by (y) the fair market value. 139 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ If the Private Warrants are held by a holder other than the Sponsor or any of its permitted transferees, the Private Warrants are redeemable by the Company in all redemption scenarios applicable to the Public Warrants and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Private Warrants under ASC 815-40, in conjunction with the SEC Statement , and concluded that they do not meet the criteria to be classified in shareholders’ equity. Specifically, the terms of the warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and, because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrants should be classified as a liability. The Private Warrants were valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected volatility of the Company’s common shares. The expected volatility was estimated using a binomial model that assigned equal weight to the implied volatility of the Company’s Public Warrants, adjusted for the call feature triggered at prices above $ 18.00 over 20 trading days within any 30 - day period, and the historical volatility of the common share price. As at December 31, 2024, the fair value of outstanding Private Warrants of approximately $ 0.9 million is recorded as warrants liability. The following table presents the changes in the fair value of warrants liability: ​ ​ ​ ​ ​ ​ Private ​ ​ Warrants Warrants liability as at December 31, 2023 ​ $ 1,969 Decrease in fair value of warrants liability ​ 1,057 Warrants liability as at December 31, 2024 ​ $ 912 ​ As at December 31, 2024, the fair value of the Private Warrants was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 ​ Exercise price ​ $ 11.50 ​ $ 11.50 ​ Share price ​ $ 1.12 ​ $ 1.10 ​ Volatility ​ 108.97 % ​ 105.34 % Term ​ 1.69 years ​ 2.69 years Risk-free rate ​ 4.14 % ​ 3.98 % Dividend yield ​ 0.0 % ​ 0.0 % ​ Class A Warrants Under the 2023 Registered Direct Offering (Note 13) which closed on August 14, 2023, the Company issued 3,980,770 Class A Warrants to purchase common shares at an exercise price of $ 3.00 per share. These Class A Warrants were valued on August 14, 2023, at a fair value of $ 0.80 per warrant, using a Monte Carlo valuation. The Class A Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 30 consecutive trading days exceeds $ 6.50 , and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation of the unexercised warrants, offering $ 0.0001 per Warrant Share. If conditions for the call are met, the unexercised portion of these warrants will be cancelled ten trading days after the call notice is received. The Class A Warrants were not determined to be liabilities under ASC 480 as they were not required to be redeemed. The Company classified the Class A Warrants as equity (per ASC 815), as the warrants entailed physical settlement and were also considered to be indexed to the Company’s share, wherein, upon exercise, a fixed number of common shares would be issued on payment of a 140 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ fixed exercise price. As at December 31, 2023, the Company recorded the total fair value of these Class A Warrants amounting to $ 3.2 million as additional paid in capital. On January 30, 2024, the Company received the final balance of the committed funding under the 2023 Registered Direct Offering (Note 13) and on January 31, 2024, issued 2,250,000 Class A Warrants to purchase common shares at an exercise price of $ 3.00 per share. The Class A Warrants issued on January 31, 2024 had the same terms as the Class A Warrants issued in 2023. The remaining 2,250,000 Class A Warrants were valued on January 31, 2024, using a Monte Carlo simulation, resulting in a fair value of $ 0.69 per warrant, with the total fair value of these warrants amounting to $ 1.6 million which was recorded as additional paid in capital. The fair value of the Class A Warrants issued on January 31, 2024 was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ January 31, ​ ​ 2024 ​ Exercise price ​ $ 3.00 ​ Share price ​ $ 1.31 ​ Call price threshold ​ $ 6.50 ​ Volatility ​ 105.08 % Term (years) ​ 3.92 ​ Risk-free rate ​ 3.89 % Dividend yield ​ 0.0 % ​ The 2023 Purchase Agreement stipulates a down round feature wherein if between August 14, 2023, and December 31, 2024, the Company, or its subsidiaries issue, sell, or grant options or rights to purchase common shares or equivalents at a price lower than either i) $ 2.00 or ii) the exercise price in effect, the exercise price of the outstanding Class A Warrants will automatically reset to the lower of these two amounts. On reset of the exercise price, the number of shares issuable will not change. On November 14, 2024, the Company entered into the 2024 Purchase Agreement (Note 13), pursuant to which the Company agreed to sell and issue one common share and the accompanying Class B Warrant to purchase one half of a common share at a price of $ 1.00 . As the issuance under the 2024 Purchase Agreement was less than $ 2.00 per common share, the down round feature of the Class A Warrants was triggered on November 14, 2024 (the “Trigger date”) and the exercise price was reset from $ 3.00 per share to $ 2.00 per share. In accordance with ASC 260, Earnings per Share , on the Trigger date, the Company measured the difference between the fair values of the Class A Warrants using an exercise price of $ 3.00 per share and an exercise price of $2.00 per share. The fair values of the Class A Warrants on November 14, 2024, with an exercise price of $ 2.00 per share and an exercise price of $ 3.00 per share were $ 0.50 per warrant and $ 0.41 per warrant, respectively, and were estimated using Monte Carlo simulations based on the following assumptions: ​ ​ ​ ​ ​ ​ ​ November 14, ​ ​ 2024 Share price ​ $ 0.96 ​ Call price threshold ​ $ 6.50 ​ Volatility ​ 106.81 % Term (years) ​ 3.13 ​ Risk-free rate ​ 4.21 % Dividend yield ​ 0.0 % ​ The difference in the above-mentioned fair values was $ 0.09 per warrant, or $ 0.6 million in aggregate. In accordance with ASC 260, the difference in the fair values was considered to be a deemed dividend and was recorded as additional paid in capital on November 14, 2024. 141 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ As at December 31, 2024, 6,230,770 Class A Warrants were outstanding. Class B Warrants As a part of the 2024 Registered Direct Offering (Note 13), the Company issued 7,450,000 Class B Warrants for the purchase of common shares at an exercise price of $ 2.00 per share. The Class B Warrants expire on November 14, 2029. The valuation of these Class B Warrants was determined using a Monte Carlo simulation. The Class B Warrants were valued on November 14, 2024 at a fair value of $ 0.60 per warrant. The fair value of the Class B Warrants was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ November 14, ​ ​ 2024 Exercise price ​ $ 2.00 ​ Share price ​ $ 0.96 ​ Call price threshold ​ $ 5.00 ​ Volatility ​ 109.38 % Term (years) ​ 5.00 ​ Risk-free rate ​ 4.23 % Dividend yield ​ 0.0 % ​ The Class B Warrants contain a call provision under which if the Volume Weighted Average Price “VWAP” for 30 consecutive trading days exceeds $ 5.00 , and the warrant holder does not possess material non-public information provided by the Company, the Company may call for cancellation the unexercised warrants, offering $ 0.0001 per Warrant Share. If conditions for the call are met, the unexercised portion of these warrants will be cancelled ten trading days after the call notice is received. As the Class B Warrants had the same features as the above-mentioned Class A Warrants, the Company classified the Class B Warrants as equity (per ASC 815) and on November 14, 2024, recorded the fair value of the Class B Warrants amounting to $ 4.5 million as additional paid in capital. There were no exercises or redemptions of the Public Warrants, Private Warrants, Class A Warrants and Class B Warrants during the year ended December 31, 2024. As on December 31, 2024, 7,450,000 Class B Warrants were outstanding. On February 6, 2025, the Company received the final balance of committed funding and issued the remaining 2,500,000 Class B Warrants. ​ 142 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 16. Common Shares Authorized and Issued As at December 31, 2024, the authorized, issued and outstanding common shares and Special Shares of the Company are as follows: ​ ​ ​ ​ ​ ​ ​ Issued and ​ ​ Authorized ​ Outstanding Common shares Unlimited , with no par value 340,708,460 Class A Special Shares 5,000,000 , with no par value 4,448,259 Class B Special Shares 10,000,000 , with no par value 8,896,399 Class C Special Shares 10,000,000 , with no par value 8,896,399 Class D Special Shares 20,000,000 , with no par value 17,792,922 Class E Special Shares 20,000,000 , with no par value 17,792,922 Class F Special Shares 20,000,000 , with no par value 17,792,922 Class G Special Shares 25,000,000 , with no par value 22,241,179 Class H Special Shares 25,000,000 , with no par value 22,241,179 Class I Special Shares 500,000 , with no par value 500,000 Class J Special Shares 741,000 , with no par value 741,000 ​ The holders of the Company’s common shares are entitled to one vote for each common share held. Each class of Special Shares do not have voting rights and do not participate in earnings. The Special Shares automatically convert to TMC common shares if TMC common shares trade at a price on any 20 trading days within any 30 -trading day period that is greater than or equal to the specific trigger price for the respective class of Special Share. Below is a summary of the Special Shares and their respective vesting thresholds, assuming the full number of Special Shares from Rollover Options are issued: ​ Special Share Class A B C D E F G H I J Share Trigger price ($) 15 25 35 50 75 100 150 200 50 12 Special Shares (million) 5 10 10 20 20 20 25 25 0.5 0.7 ​ As the Special Shares meet the indexation and equity classification criteria under ASC 815-40, the Special Shares have been classified as equity instruments at issuance. 143 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Common Share Continuity ​ ​ ​ ​ ​ ​ ​ Common shares Number Amount December 31, 2022 266,812,131 ​ $ 332,882 Issuance of shares under 2023 Registered Direct Offering (Note 13) 7,961,540 ​ ​ 11,420 Exercise of warrant by Allseas 11,578,620 ​ ​ 70,016 Shares issued to Allseas 15,000,000 ​ ​ 15,910 Exercise of stock options (Note 17) 120,000 ​ ​ 144 Conversion of restricted share units (Note 17) ​ 4,912,747 ​ ​ 7,720 Share purchase under Employee Stock Purchase Plan (Note 17) 173,672 ​ ​ 147 December 31, 2023 306,558,710 ​ $ 438,239 Issuance of shares under 2023 Registered Direct Offering (Note 13) 4,500,000 ​ ​ 7,447 Issuance of shares under 2024 Registered Direct Offering (Note 13) ​ 14,900,000 ​ ​ 9,743 Shares issued as per At-the Market Equity Distribution Agreement (Note 14) ​ 3,251,588 ​ ​ 4,866 Conversion of restricted share units (Note 17) ​ 10,734,581 ​ ​ 14,954 Exercise of stock options (Note 17) ​ 715,772 ​ ​ 1,891 Share purchase under Employee Stock Purchase Plan (Note 17) ​ 47,809 ​ ​ 77 December 31, 2024 340,708,460 ​ $ 477,217 ​ ​ 17. Share-Based Compensation The Company’s 2021 Incentive Equity Plan (the “ Incentive Plan”) provides that the aggregate number of common shares reserved for future issuance under the Incentive Plan. As of December 31, 2024, there were a total of 56,634,518 common shares reserved for issuance under the Incentive Plan out of which 37,870,371 common shares remained available for future issuances. These amounts include 12,262,348 shares added to the Incentive Plan in January 2024 pursuant to the Incentive Plan’s automatic annual increase provision, provided that 2,243,853 of the outstanding common shares shall only be available for awards made to non-employee directors of the Company. On the first day of each fiscal year from 2022 to 2031, the number of common shares that may be issued pursuant to the Incentive Plan is automatically increased by an amount equal to the lesser of 4 % of the number of outstanding common shares or an amount determined by the board of directors. Share-based awards consisting of Restricted Share Units (“RSU”) and options under the Short-Term Incentives Plan (“STIP”) and Long-Term Incentives Plan (“LTIP”) have been issued under the 2021 Incentive Equity Plan. Prior to the 2021 Incentive Plan, the Company had granted share-based awards under the 2018 Stock Option Plan (“2018 Plan”). Stock options Outstanding under the Incentive Plan. On April 9, 2024, the Company entered into a consulting agreement with Mr. Jurvetson, a director of the Company. As per the agreement, Mr. Jurvetson would serve as a special advisor to the Company’s Chief Executive Officer for a term of five years . As the sole compensation for his advisory services, Mr. Jurvetson was granted stock options to purchase 3,440,000 of the Company’s common shares, with an exercise price equal to $ 1.71 , under the Incentive Plan. The options vest in thirds on each anniversary of the grant date of the options provided that Mr. Jurvetson is still providing services to the Company at such time and expire on April 9, 2031. On April 9, 2024, the Company also granted stock options to purchase 500,000 shares to a consultant in exchange for advisory services over a 5-year period ending April 9, 2029. 144 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ The Company determined the fair value of the options to be $ 1.36 per unit using the Black-Scholes valuation method. The fair value was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ April 9, ​ ​ 2024 Exercise price ​ $ 1.71 ​ Share price ​ $ 1.71 ​ Volatility ​ 114.32 % Term (1) ​ 4.5 years ​ Risk-free rate ​ 4.29 % Dividend yield ​ 0.0 % (1) As these were the first options granted under the Incentive Plan, the expected term was estimated using the simplified method which is calculated as the average of the time to vest for each tranche from the grant date and the 7-year contractual term. During the year, the Company recognized $ 1.3 million of share-based compensation expense related to the amortization of stock options, reported under general and administrative expenses in the statement of loss and comprehensive loss. There were no forfeitures and exercises during the year and as at December 31, 2024, there were 3,940,000 options outstanding under the Company’s 2021 Incentive Plan (2023: Nil ). The intrinsic value of the outstanding stock options was $ nil and was calculated by considering the closing market price of the Company’s common shares as the fair value of the Company’s common share. The total unrecognized share-based compensation expense of $ 4 million is expected to be recognized over a period of approximately two years . Outstanding under the Company’s 2018 Plan. No new stock options were granted by the Company as STIPs or LTIPs under the 2018 Plan during 2024 and 2023. Outstanding STIPs under the 2018 plan: A continuity schedule summarizing the movements in the Company’s stock options under the STIP plan is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ Aggregate ​ Weighted ​ ​ average intrinsic average ​ ​ Number of ​ exercise ​ value of ​ contractual ​ ​ Options ​ price per ​ stock ​ life ​ ​ Outstanding ​ option ​ options ​ (years) Outstanding – December 31, 2022 15,356,340 ​ $ 1.40 $ 1,582 ​ 5.11 Expired ( 162,100 ) ​ ​ 0.87 ​ — ​ — Exercised ( 120,000 ) ​ ​ 0.65 ​ — ​ — Outstanding – December 31, 2023 15,074,240 ​ $ 1.41 $ 5,425 ​ 4.18 Exercised ( 715,772 ) ​ ​ 0.65 ​ — ​ — Expired ( 57,893 ) ​ ​ 2.60 ​ — ​ — Outstanding – December 31, 2024 Vested and exercisable 14,300,575 ​ $ 1.45 $ 5,321 ​ 3.25 ​ 145 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ A summary of the Company’s stock options granted and outstanding under the Company’s STIP as at December 31, 2024 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average Number of Options ​ ​ ​ ​ ​ life to expiry ​ Outstanding and Expiry Date ​ Exercise price ​ (years) ​ Exercisable December 31, 2025 ​ $ 0.65 1.00 11,578 January 27, 2026 ​ $ 0.52 - $2.59 1.07 590,509 February 2, 2026 ​ $ 0.65 1.09 57,893 February 17, 2026 ​ $ 0.22 - $0.52 1.13 431,493 June 1, 2028 ​ $ 0.65 - $8.64 3.42 12,514,385 June 30, 2028 ​ $ 2.59 3.50 694,717 ​ ​ ​ ​ ​ ​ 14,300,575 ​ The total grant date fair value of STIP stock options that vested during the year ended December 31, 2024, was $ 1 million. As at December 31, 2024, all the options are vested and the total unrecognized share-based compensation expense was $ nil . As at December 31, 2024, the closing market price of the Company’s common shares is considered to be the fair value of the Company’s common share to determine the intrinsic value of outstanding stock options. The aggregate intrinsic value of stock options exercised during the year ended December 31, 2024, was $ 0.7 million. During the year, the Company recognized $ 47 thousand of share-based compensation expense for STIP stock options in the statement of loss and comprehensive loss (2023: $ 0.5 million) out of which share-based compensation expense related to exploration and evaluation activities amounted to $ 14 thousand (2023 - $ 0.2 million) and the share-based compensation expense recognized related to general and administrative matters amounted to $ 33 thousand (2023 - $ 0.3 million). Outstanding LTIPs under the 2018 plan: On March 4, 2021, the Company granted 9,783,922 stock options as LTIP. These stock options have an exercise price of $ 0.65 per option and expire on June 1, 2028. The LTIP awards vest as follows: (1) Tranche 1 - 25 % when the Company’s market capitalization equals $ 3 billion; (2) Tranche 2 - 35 % when the Company’s market capitalization equals $ 6 billion; (3) Tranche 3 - 20 % upon the date that the ISA grants an exploitation contract to the Company; and (4) Tranche 4 - 20 % upon the commencement of the first commercial production following the grant of the exploitation contract. Tranche 1 and Tranche 2 vest based on the Company’s market capitalization of $ 3 billion and $ 6 billion, respectively. Accordingly, these options are determined to be market-based awards for which the Company has calculated fair value and derived a service period through which to expense the related fair value. The options included in Tranche 1 and Tranche 2 had a grant date fair value of $ 5.59 per share and $ 5.42 per share and derived service periods of 0.33 years and 1.41 years, respectively. The Company expensed these awards ratably over the remaining service period. Tranche 3 and Tranche 4 of the LTIP stock options vest based on the date the ISA grants an exploitation contract and the commencement of commercial production. These options are determined to be performance-based awards. The Company will recognize compensation costs for the performance-based awards if and when the Company concludes that it is probable that the performance conditions will be achieved. As at December 31, 2024, no compensation expense related to the performance-based 146 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ awards was recorded as the awarding of an ISA contract is outside the control of the Company. The Company will reassess the probability of the vesting of the performance-based awards at each reporting period and adjust the compensation cost when determined to be probable. The aggregate intrinsic value of LTIP stock options as at December 31, 2024, was $ 4.5 million. An aggregate 139,048 LTIP stock options were forfeited during 2024 and as at December 31, 2024, none of the LTIP stock options were exercisable. The Company expects LTIP options to vest as and when the market and performance milestones described below are achieved. As at December 31, 2024, an aggregate of 9,644,875 LTIP stock options were outstanding. As at December 31, 2024, total unrecognized share-based compensation expense for the LTIP stock options was $ 23 million. In 2024, the Company reversed $ 0.6 million of previously recognized share-based compensation expense to record the forfeiture of unvested LTIP stock options in the statement of loss and comprehensive loss (2023: $ nil ), evenly apportioned between exploration and evaluation expenses (Note 10) and general and administration expenses. Restricted Share Units The Company may, from time to time, grant RSUs to directors, officers, employees, and consultants of the Company and its subsidiaries under the Plan. On each vesting date, RSU holders are issued common shares equivalent to the number of RSUs held provided the holder is providing service to the Company on such vesting date. A summary of the RSU activity in 2024 is presented in the table below: ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted ​ ​ Number of RSUs ​ average grant- ​ ​ Outstanding ​ date fair value Outstanding – December 31, 2022 3,815,143 ​ $ 2.75 Granted 13,669,185 ​ 0.92 Forfeited ( 86,700 ) ​ 0.96 Exercised ( 4,912,748 ) ​ 1.57 Outstanding – December 31, 2023 12,484,880 ​ $ 1.23 Granted 33,079,041 ​ 1.18 Forfeited ( 516,685 ) ​ 1.45 Exercised ( 10,734,581 ) ​ 1.39 Outstanding – December 31, 2024 34,312,655 ​ $ 1.12 ​ The details of RSUs granted by the Company during the year are as follows: ​ ​ ​ ​ ​ ​ Vesting Period 2024 2023 Vesting Immediately (1) 4,538,922 3,561,078 Vesting fully on the first anniversary of the grant date (2) 493,430 1,014,349 Vesting in thirds on each anniversary of the grant date (3) 7,212,374 8,689,481 Vesting in fourths on each anniversary of the grant date 834,315 404,277 Vesting based on market conditions (4) 20,000,000 — Total Units Granted 33,079,041 13.669.185 147 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ (1) Of the 4,538,922 RSUs granted during 2024 and vesting immediately, 2,812,802 RSUs were issued to settle liabilities with a carrying amount of $ 4.1 million, at a weighted average grant date fair value of $ 1.44 per RSU. In addition, the Company granted 662,399 RSUs, to consultants (2023: 274,912 RSUs) resulting in $ 1.1 million, charged as general and administrative expenses (2023: $ 0.3 million charged as general and administrative expenses). In 2024, the Company also granted 57,756 RSUs, to consultants as a prepayment for their services (2023: 43,478 units). (2) Of the 493,430 units granted during 2024, an aggregate amount of 476,189 RSUs (2023: 1,014,349 RSUs) were granted to the Company’s non-employee directors under the Company’s Non-employee Director Compensation Policy, which will vest at the Company’s 2025 annual shareholders meeting. The total fair value of units granted as annual grants to non-employee directors amounted to $ 0.7 million (2023: $ 0.7 million). The remaining 17,241 units were granted to a director as annual fees for consulting services to be provided, which were fair valued at $ 25 thousand. (3) Of the 7,212,374 units granted during 2024, the Company granted 7,144,347 RSUs, as payment for the 2023 LTIP awards (2023: 8,645,465 RSUs were issued as payment for the 2022 LTIP awards). The remaining 68,027 units were granted to a non-employee director of the Company as an initial grant, as prescribed under the Company’s Non-employee Director Compensation Policy. (4) On April 16, 2024, the Company entered into a new employment agreement with Gerard Barron, the Company’s Chief Executive Officer and Chairman (the “Employment Agreement”) that replaced and superseded Mr. Barron’s existing employment agreement. Under the Employment Agreement, the Company granted Mr. Barron a one-time signing bonus award of market-based restricted stock units (the “Signing RSUs”) amounting to 20,000,000 of the Company’s common shares. The Signing RSUs will vest upon the common shares achieving the following closing prices per common share, based on the trailing 30 -day average price (the “Closing Price”), on or prior to April 16, 2029 (maturity date), subject to Mr. Barron’s continued service with the Company on the applicable vesting date: one -third of the Signing RSUs vest on achievement of a Closing Price of $ 7.50 , a further one -third vest on achievement of a Closing Price of $ 10.00 and the final one -third vest on achievement of a Closing Price of $ 12.50 (each subject to equitable adjustment for any stock splits, combinations, reclassifications, stock dividends and the like). Pursuant to the Employment Agreement, Mr. Barron has agreed not to sell any of the common shares issuable upon vesting of the Signing RSUs until after the fifth anniversary of entering into the Employment Agreement. The Company determined the fair value of the options using the Monte-Carlo valuation method. The fair value of each tranche and the derived service period are as follows: ​ ​ ​ ​ ​ ​ ​ Tranche Fair Value per RSU Derived Service Period Achievement of a Closing Price of $ 7.50 ​ $ 1.07 1.58 years from the grant date Achievement of a Closing Price of $ 10 ​ $ 1.04 1.87 years from the grant date Achievement of a Closing Price of $ 12.50 ​ $ 1.00 2.10 years from the grant date ​ The fair value of the Signing RSUs was estimated using the following assumptions: ​ ​ ​ ​ ​ ​ ​ April 16, 2024 Share price ​ $ 1.72 ​ Performance period ​ April 16, 2024 – April 16, 2029 ​ Volatility ​ 113.83 % Risk-free rate ​ 4.57 % Cost of Equity ​ 19.56 % Dividend yield ​ 0.0 % ​ The grant date fair value of all RSUs, apart from the Signing RSUs, is equivalent to the closing share price of the Company’s common shares on the date of grant. The grant date fair value of the RSUs vesting based on market conditions was determined 148 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ using the Monte-Carlo valuation method. During the year, a total of $ 19.5 million was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs (2023: $ 8.6 million) of which share-based compensation expense related to exploration and evaluation activities amounted to $ 10.7 million (2023 - $ 4.8 million) and share-based compensation expense related to general and administration matters amounted to $ 8.8 million (2023 - $ 3.8 million). As at December 31, 2024, total unrecognized share-based compensation expense for RSUs was $ 20.5 million (December 31, 2023 - $ 6.9 million) which is expected to be recognized over 1.24 years. The fair value of shares vested during the year ended December 31, 2024, amounted to $ 14.1 million (2023 - $ 8.3 million). As at December 31, 2024, an aggregate of 128,642 vested RSUs were being processed and due to be converted into common shares. Employee Stock Purchase Plan On May 31, 2022, TMC’s 2021 Employee Stock Purchase Plan (“ESPP”) was approved at the Company’s 2022 annual shareholders meeting. As of December 31, 2024, there were a total of 10,988,032 common shares reserved for issuance under the ESPP out of which 10,648,622 common shares remained available for future issuance under the ESPP. These amounts include 3,065,587 shares added to the ESPP in January 2024 pursuant to the ESPP’s automatic annual increase provision. Under the ESPP, the number of shares reserved for issuance is subject to an annual increase provision which provides that on the first day of each of the Company’s fiscal years starting in 2022, common shares equal to the lesser of (i) 1 % percent of the common shares outstanding on the last day of the immediately preceding fiscal year, or (ii) such lesser number of shares as is determined by the board of directors will be added to the ESPP. Participation in the ESPP is available to all full-time and certain part-time employees, subject to certain conditions. The ESPP comprises offering periods that are twenty-four (24) months in length, which begin on approximately every June 1 and December 1. Each offering period includes four purchase periods of six months each, which begin on approximately every June 1 and December 1, or at such other times designated by the board of directors or its compensation committee. At the exercise date, which is the last business day of each purchase period, the accumulated deductions from participating employees are used to purchase common shares of the Company. Shares are purchased at a price equal to 85 % of the lower of either the share price of the Company’s common shares on the first business day of the particular offering period or the last business day of the purchase period. The ESPP also has an automatic reset feature wherein, if the share price of the common share on any exercise date is less than the share price of the common share on the first business day of the applicable offering period, then such offering period shall automatically terminate immediately after the purchase of the common shares. In such case, a new offering period shall commence on the first business day following the exercise date. The ESPP includes the following limitations: ● an employee’s contribution is limited to 15 % of the employee’s annual gross earnings, not exceeding the $ 25,000 annual limit set under the Internal Revenue Code (IRC) established by the Internal Revenue Service (IRS). ● an employee’s purchases in any offering period cannot exceed 15,000 common shares, and ● an employee’s purchases are capped, not to exceed 5 % of the Company’s total outstanding common shares. During 2024, the Company issued 47,809 common shares (2023: 173,672 common shares) to its employees as part of its ESPP program. A total of $ 37 thousand was charged to the statement of loss and comprehensive loss as share-based compensation expense for the year ended December 31, 2024, representing the share price purchase discount offered by the Company (2023: $ 47 thousand). From the amount charged in 2024, $ 19 thousand was recorded in exploration and evaluation expenses (2023: $ 26 thousand) and $ 18 thousand was recorded in general and administrative expenses (2023: $ 21 thousand). 149 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 18. Loss per Share Basic loss per share is computed by dividing the loss by the weighted-average number of common shares of the Company outstanding during the year. Diluted loss per share is computed by giving effect to all common share equivalents of the Company, including outstanding stock options, RSUs, warrants, Special Shares and options to purchase Special Shares, to the extent these are dilutive. Basic and diluted loss per share was the same for each year presented as the inclusion of all common share equivalents would have been anti-dilutive. Anti-dilutive equivalent common shares were as follows: ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ For the year ended ​ ​ December 31, ​ December 31, ​ 2024 2023 Outstanding options to purchase common shares ​ 27,885,450 ​ 24,858,162 Outstanding RSUs 34,312,655 12,484,880 Outstanding shares under ESPP ​ 1,882 ​ 8,802 Outstanding warrants 38,180,770 28,480,770 Outstanding Special Shares and options to purchase Special Shares 136,239,964 136,239,964 Total anti-dilutive common equivalent shares 236,620,721 202,072,578 ​ 19. Financial Instruments Categories of Financial Instruments ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Financial assets ​ ​ Amortized cost ​ ​ Cash $ 3,480 $ 6,842 Taxes and other receivables (Note 6) ​ ​ 249 ​ ​ 467 ​ $ 3,729 $ 7,309 ​ ​ ​ ​ ​ ​ ​ Financial liabilities ​ ​ Amortized cost ​ ​ Accounts payable and accrued liabilities $ 42,754 $ 31,334 Short-term debt ​ 11,775 ​ ​ — Fair value through profit or loss ​ ​ — ​ ​ — Royalty liability ​ ​ 14,000 ​ ​ 14,000 Warrants liability ​ ​ 912 ​ ​ 1,969 ​ $ 69,441 $ 47,303 ​ ​ 20. Related Party Transactions One of the Company’s subsidiaries has a consulting agreement with SSCS Pte. Ltd. (“SSCS”) to manage offshore engineering studies. A director of DGE is employed through SSCS. Consulting services during the year ended December 31, 2024, totaled $ 75 thousand, (2023: $ 212 thousand), out of which a total of $ 53 thousand (2023: $ 170 thousand), is disclosed as exploration labor within exploration and evaluation expenses (Note 10) and $ 22 thousand is disclosed as general and administrative expenses (2023: $ 42 thousand). As at December 31, 2024, the amount payable to SSCS was $nil (December 31, 2023 - $ 17 thousand). One of the Company’s directors, who was appointed at the Company’s annual general meeting held on May 31, 2024, is the Chairman of Stonehaven Campaigns Limited and Robertsbridge Consultants Limited, which provide the Company with consulting 150 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ services. From May 31, 2024, until December 31, 2024, Stonehaven Campaigns Limited and Robertsbridge Consultants Limited, provided consulting services amounting to $ 18 thousand and $ 26 thousand respectively, recorded in general and administrative expenses. As at December 31, 2024, the amount payable to both Stonehaven Campaigns Limited and Robertsbridge Consultants Limited was $nil. On January 30, 2024, as part of the Registered Direct Offering (Note 13), the Company received the remaining committed funding of $ 9 million from ERAS Capital LLC, the investment fund of one of the Company’s directors. On March 22, 2024, the Company entered into an Unsecured Credit Facility (the “2024 Credit Facility”) with Gerard Barron, the Company’s Chief Executive Officer and Chairman, and ERAS Capital LLC, the family fund of one of the Company’s directors, (collectively, the “2024 Lenders”), pursuant to which, the Company may borrow from the 2024 Lenders up to $ 20 million in the aggregate ($ 10 million from each of the 2024 Lenders), from time to time, subject to certain conditions. All amounts drawn under the 2024 Credit Facility will bear interest at the 6-month Secured Overnight Funding Rate (SOFR), 180 -day average plus 4.0 % per annum payable in cash semi-annually (or plus 5 % if paid-in-kind at maturity, at our election) on the first business day of each of June and January. The Company will pay an underutilization fee equal to 4.0 % per annum payable semi-annually for any amounts that remain undrawn under the 2024 Credit Facility. The Company has the right to pre-pay the entire amount outstanding under the 2024 Credit Facility at any time, before the 2024 Credit Facility’s maturity of September 22, 2025. The 2024 Credit Facility also contains customary events of default. The 2024 Credit Facility will terminate automatically if the Company or any of its subsidiaries raise at least $ 50 million in the aggregate (i) through the issuance of any of the Company’s or its subsidiaries’ debt or equity securities, or (ii) in prepayments under an off-take agreement or similar commercial agreement. On August 13, 2024, the Company entered into the First Amendment to the 2024 Credit Facility with the 2024 Lenders, to increase the borrowing limit of the 2024 Credit Facility to $ 25 million in the aggregate ($ 12.5 million from each of the 2024 Lenders). Under the terms of the First Amendment, the borrowing limit will return to $ 20 million in the aggregate ($ 10 million from each of the 2024 Lenders) upon certain financing events. On November 14, 2024, the Company entered into the Second Amendment to the 2024 Credit Facility with the 2024 Lenders, to increase the borrowing limit to $ 38 million in the aggregate ($ 19 million from each of the 2024 Lenders) and to extend the maturity of the 2024 Credit Facility to December 31, 2025 . As per the Second Amendment, the rate of underutilization fee was retroactively increased from March 22, 2024 to 6.5 % on any undrawn amounts under the 2024 Credit Facility. On March 26, 2025, the Company entered into the Third Amendment to the 2024 Credit Facility with the 2024 Lenders, to, among other things, increase the borrowing limit to $ 44 million in the aggregate ($ 22 million from each of the 2024 Lenders) and extend the maturity of the 2024 Credit Facility to June 30, 2026 . During the year ended December 31, 2024, the Company has drawn $ 4.3 million from the 2024 Credit Facility and incurred $ 0.2 million as interest expense. During 2024, the Company incurred $ 1.1 million, as underutilization fees, which would be payable only in the event the 2024 Credit Facility is not drawn down at the time such fees are payable. During the year, the Company repaid interest amounting to $ 25 thousand, and underutilization fees amounting to $ 0.1 million to the 2024 Lenders. On January 31, 2025, the Company repaid the drawn amount and outstanding interest on the 2024 Credit Facility amounting to $ 1.8 million and $ 0.1 million, respectively. Apart from the above-mentioned transactions, the Company had transactions with Allseas which are detailed in Note 8 and issued share-based grants to the Company’s directors which are detailed in Note 17. ​ 21. Commitments and Contingent Liabilities NORI Exploration Contract NORI is currently implementing its approved 2022 to 2026 five-year plan. The cost of the estimated work plan for 2025 onwards is dependent on the ISA’s approval of the NORI Area D exploitation application. 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 the Company, agreed with the ISA and may be subject to change depending on the Company’s progress to date. NORI’s exploration contract expires on July 21, 2026. NORI is required to submit an application for 151 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ extension no later than six months before the expiration of the contract. NORI intends to submit an application for a five-year extension in 2025. TOML Exploration Contract TOML is currently implementing its approved 2022 to 2026 five-year plan, which included an estimated five-year expenditure of up to $ 44 million. The five-year estimated expenditure is indicative and subject to change, TOML will review the program regularly and TOML will inform the ISA of any changes through its annual reports. Offtake Agreements On May 25, 2012, the Company’s wholly-owned subsidiary, DGE, and Glencore International AG (“Glencore”) entered into a copper offtake agreement and a nickel offtake agreement. DGE has agreed to deliver to Glencore 50 % of the annual quantity of copper and nickel produced at a DGE-owned processing facility from nodules derived from the NORI Area at London Metal Exchange referenced market pricing with allowances for product quality and delivery location. Both the copper and nickel offtake agreements are for the life of the Company’s rights to the NORI Area. Either party may terminate the agreement upon a material breach or insolvency of the other party. Glencore may also terminate the agreement by giving twelve months’ notice. Sponsorship Agreements On July 5, 2017, Nauru, the Nauru Seabed Minerals Authority and NORI entered into a 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. On March 8, 2008, Tonga and TOML entered into a sponsorship agreement formalizing certain obligations of the parties in relation to TOML’s exploration and potential exploitation of the TOML Area (“TOML Sponsorship Agreement”). Upon reaching the minimum recovery level within the exploitation contract area, TOML has agreed to pay Tonga a seabed mineral recovery payment based on the polymetallic nodules recovered from the exploitation contract area. In addition, TOML has agreed to pay reasonable direct costs incurred by Tonga to administer the obligations of Tonga to the ISA. On September 23, 2021, the Company and 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. Contingent Liability On October 28, 2021, a shareholder filed a putative class action against the Company, one of the Company’s executives and a former director in federal district court for the Eastern District of New York, captioned Caper v. TMC The Metals Company Inc. F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard. The complaint alleges that all defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Messrs. Barron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about the Company’s operations and prospects during the period from March 4, 2021 and October 5, 2021. On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v. TMC the Metals Company, Inc. These cases have been consolidated. On March 6, 2022, a lead plaintiff was selected. An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations, with the Plaintiff seeking to recover compensable damages caused by the alleged wrongdoings. The Company denies any allegations of wrongdoing and filed and served the plaintiff a motion to dismiss on July 12, 2022 and intend to defend against this lawsuit. On July 12, 2023, an oral hearing on the motion to dismiss was held. The parties are 152 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ currently awaiting a ruling. There is no assurance, however, that the Company or the other defendants will be successful in the Company’s defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. If the motion to dismiss is unsuccessful, there is a possibility that the Company may incur a loss in this matter. Such losses or range of possible losses cannot be reliably estimated. A resolution of this lawsuit adverse to the Company or the other defendants, however, could have a material effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved. On January 23, 2023, investors in the 2021 private placement from the Business Combination filed a lawsuit against the Company in the Commercial Division of New York Supreme Court, New York County, captioned Atalaya Special Purpose Investment Fund II LP et al. v. Sustainable Opportunities Acquisition Corp. n/k/a TMC The Metals Company Inc., Index No. 650449/2023 (N.Y. Sup. Ct.). The Company filed a motion to dismiss on March 31, 2023, after which the plaintiffs filed an amended complaint on June 5, 2023. The amended complaint alleges that the Company breached the representations and warranties in the plaintiffs’ private placement Subscription Agreements and breached the covenant of good faith and fair dealing. The Plaintiffs are seeking to recover compensable damages caused by the alleged wrongdoings. The Company denies any allegations of wrongdoing and filed a motion to dismiss the amended complaint on July 28, 2023. On December 7, 2023, the Court granted the Company’s motion to dismiss the claim for breach of the covenant of good faith and fair dealing and denied the Company’s motion to dismiss the breach of the Subscription Agreement claim. The Company filed a notice of appeal regarding the Court’s denial of our motion to dismiss the breach of the Subscription Agreement claim. The appeal was heard on November 8, 2024. The NY Appellate Division upheld the lower court’s ruling in December 2024, moving the case into the discovery phase. There is no assurance that the Company will be successful in our defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Such losses or range of possible losses cannot be reliably estimated. On November 8, 2024, a shareholder filed a putative class action against the Company and certain of its executives in federal district court for the Central District of California, captioned Lin v. TMC The Metals Company Inc., Gerard Barron, and Craig Shesky. The complaint alleges that all defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Messrs. Barron and Shesky violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information regarding the classification of the non-financial asset received from our partnership with Low Carbon Royalties Inc. and the derecognition of the capitalized exploration contract related to NORI. The alleged misstatements and omissions pertain to the Company’s initial classification of this non-financial asst as a gain on disposition (being a sale of future revenue) and subsequent reclassification thereof as a royalty liability (and re-capitalization of the exploration contract) and the restatement of our previously issued financial statements as a result thereof for the three months ended March 31, 2023, the six months ended June 30, 2023 and the nine months ended September 30, 2023 in March 2024. The complaint purports to represent a class of shareholders who acquired the Company’s securities between May 12, 2023, and March 25, 2024, and seeks to recover compensable damages caused by the alleged wrongdoings. On February 6, 2025, the Court appointed a lead plaintiff. An amended complaint was filed on March 6, 2025. Pursuant to court-approved scheduling, we are expected to serve a motion to dismiss by April 10, 2025, the lead plaintiff is expected to file an opposition by May 15, 2025, and we are expected to reply by June 5, 2025. The Company intends to defend against the lawsuit. There can be no assurance, however, that the Company will be successful in its defense, or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. Due to the early stage of this litigation, such losses or range of possible losses cannot be reliably estimated. ​ 22. Fair Value Accounting ​ The following tables set forth the Company’s assets and liabilities measured at fair value (Note 3): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at December 31, 2024 ​ Total Level 1 Level 2 Level 3 Assets: ​ ​ ​ ​ Cash ​ $ 3,480 ​ $ 3,480 ​ $ — ​ $ — Receivables and prepayments ​ 1,851 ​ — ​ 1,851 ​ — Exploration contracts ​ 42,951 ​ — ​ — ​ 42,951 153 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Right of use asset ​ 3,814 ​ — ​ — ​ 3,814 Equipment ​ 771 ​ — ​ — ​ 771 Software ​ 1,928 ​ — ​ — ​ 1,928 Investment ​ 8,203 ​ — ​ — ​ 8,203 ​ ​ $ 62,998 ​ $ 3,480 ​ $ 1,851 ​ $ 57,667 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ $ 42,754 ​ $ — ​ $ 42,754 ​ $ — Short-term debt ​ 11,775 ​ — ​ 11,775 ​ — Deferred tax liability ​ 10,675 ​ — ​ 10,675 ​ — Royalty liability ​ 14,000 ​ — ​ — ​ 14,000 Warrants liability ​ 912 ​ — ​ — ​ 912 ​ ​ $ 80,116 ​ $ — ​ $ 65,204 ​ $ 14,912 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value at December 31, 2023 ​ Total Level 1 Level 2 Level 3 Assets: ​ ​ ​ ​ Cash ​ $ 6,842 ​ $ 6,842 ​ $ — ​ $ — Receivables and prepayments ​ 1,978 ​ — ​ 1,978 ​ — Exploration contracts ​ 43,150 ​ — ​ — ​ 43,150 Right of use asset ​ 5,721 ​ — ​ — ​ 5,721 Equipment ​ 1,133 ​ — ​ — ​ 1,133 Software ​ 1,643 ​ — ​ — ​ 1,643 Investment ​ 8,429 ​ — ​ — ​ 8,429 ​ ​ $ 68,896 ​ $ 6,842 ​ $ 1,978 ​ $ 60,076 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ Accounts payable and accrued liabilities ​ $ 31,334 ​ $ — ​ $ 31,334 ​ $ — Deferred tax liability ​ 10,675 ​ — ​ 10,675 ​ — Royalty liability ​ 14,000 ​ — ​ — ​ 14,000 Warrants liability ​ 1,969 ​ — ​ — ​ 1,969 ​ ​ $ 57,978 ​ $ — ​ $ 42,009 ​ $ 15,969 ​ ​ 23. Segmented Information The Company’s business consists of only one operating segment, namely exploration of seafloor polymetallic nodules, which includes the development of a metallurgical process to treat such seafloor polymetallic nodules. Details on the geographical segmentation of the Company’s long-lived assets based on where each legal entity is domiciled are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Equipment December 31, 2024 December 31, 2023 Nauru $ 771 $ 1,128 Tonga ​ — ​ 5 Total $ 771 $ 1,133 ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, Software ​ 2024 ​ 2023 Singapore ​ 1,928 ​ 1,643 Total ​ $ 1,928 ​ $ 1,643 ​ ​ 154 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ 24. Income Taxes Reconciliation of Effective Tax Rate The Company is subject to Canadian federal and provincial tax for the estimated assessable profit at a rate of 26.72 % for the year ended December 31, 2024 (2023: 26.68 %). The Company had no assessable profit in Canada for all periods disclosed. The income tax expense at statutory rates for the Company can be reconciled to the reported loss for the years 2024 and 2023 per the statement of loss and comprehensive loss as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended ​ For the year ended ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 2023 (1) Loss for the year, before taxes ​ $ ( 81,895 ) ​ $ ( 73,740 ) ​ Canadian Federal and Provincial income tax rates ​ 26.72 % ​ 26.68 % Income tax recovery based on the above rates $ ( 21,882 ) $ ( 19,674 ) ​ Permanent differences ​ 2,502 ​ 1,556 ​ Effect of differences in future and foreign tax rates ​ 14,424 ​ 14,038 ​ Valuation allowance changes affecting the provision of income taxes ​ 5,004 ​ 4,121 ​ Total income taxes $ 48 $ 41 ​ (1) Comparative amounts for the year ended December 31, 2023 are restated based on actual tax returns filed. The Company currently has no uncertain tax positions and is therefore not reflecting any adjustments. Components of the Company’s deferred income tax assets (liabilities) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Deferred Tax Assets ​ ​ Non-capital losses $ 24,270 $ 21,195 Investments ​ 111 ​ 384 Equipment ​ 227 ​ 260 Share issuance costs ​ 1,804 ​ 496 Total deferred income tax assets $ 26,412 $ 22,335 Valuation allowance ​ ( 26,412 ) ​ ( 22,335 ) Deferred tax asset recognized $ — $ — ​ ​ ​ ​ ​ ​ ​ Deferred Tax Liability ​ ​ ​ ​ ​ ​ Difference between the book value and the tax basis of the TOML exploration contract (Note 10) ​ $ ( 10,675 ) ​ $ ( 10,675 ) Deferred tax liability recognized $ ( 10,675 ) $ ( 10,675 ) ​ 155 Table of Contents TMC the metals company Inc. Notes to Consolidated Financial Statements (in thousands of US Dollars, except share, per share amounts and unless otherwise stated) ​ Deductible temporary differences, unused tax losses and unused tax credits are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 December 31, 2023 Expiry Date Range ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-capital losses $ 100,995 $ 89,333 See below Investments $ 829 $ 2,856 Not applicable Equipment $ 841 $ 962 Not applicable Share issuance costs $ 3,649 $ 1,860 2025-2028 Restricted interest and financing expenses ​ $ 3,102 ​ $ — ​ Not applicable ​ As at December 31, 2024, the Company had non-capital loss carry-forwards of $ 101.0 million that may be used to offset future taxable income. These losses, if not utilized, will expire as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Canada Singapore United States Tonga 2035 $ — $ — $ 2 $ — 2041 ​ 3,183 ​ — ​ — ​ — 2042 ​ 12,599 ​ — ​ 1 ​ — 2043 ​ ​ 11,324 ​ ​ — ​ ​ 3 ​ ​ — 2044 ​ ​ 10,778 ​ ​ — ​ ​ 179 ​ ​ — No expiry ​ — ​ 20,361 ​ — ​ 42,566 Loss carry-forwards ​ $ 37,884 ​ $ 20,361 ​ $ 185 ​ $ 42,566 ​ The Company files income tax returns in Canada, the United States, Singapore and Tonga, and is subject to examination in these jurisdictions for all years since the Company’s inception in 2011. As at December 31, 2024, all tax years are subject to examination by the tax authorities and no tax authority audits are currently underway. Fiscal years outside the normal statute of limitation remain open to audit by tax authorities due to tax attributes generated in those early years which have been carried forward and may be audited in subsequent years when utilized. The timing of the resolution, settlement and closure of any income tax audits is highly uncertain, and the Company is unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits. It is possible that the balance of gross unrecognized tax benefits could significantly change in the next twelve months. As at December 31, 2024, the 2024 tax year filings for the Company and its subsidiaries (where applicable) remain unfiled and have not been assessed by the relative tax authorities. ​ 25. Subsequent Events On March 24, 2025, we entered into a Letter Agreement (the “Letter Agreement”) with Allseas Investments and Argentum Cedit Virtuti GCV, pursuant to which the repayment date under our Working Capital Loan agreement with Allseas Investments dated September 9, 2024 was extended to September 30, 2025. Additionally, under the Letter Agreement, we and Argentum Cedit Virtuti GCV agreed to cancel the unsecured credit facility established in 2023 with no outstanding amounts remaining, other than our obligation to pay the underutilization fee thereunder. On March 27, 2025, the Company announced that it initiated a process with the U.S. National Oceanic and Atmospheric Administration and the U.S. Department of Commerce under the U.S. Deep Seabed Hard Mineral Resources Act to consider a U.S.-based regulatory pathway for the commercial production of deep-sea polymetallic nodules in the CCZ. ​ ​ 156 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.