metals company The Metals Company Q3 2023 Corporate Update: Unlocking the World's Largest Estimated Undeveloped Source of Battery Metals November 9, 2023 Forward looking statements. This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that relate to future events, TMC the metals company Inc.'s ("TMC" or the "Company") future operations and financial performance, ...

Financial Data and Key Metrics - The company reported a net loss of approximately $12.5 million or $0.04 per share in Q3 2023, compared to a net loss of $27.9 million or $0.12 per share in Q3 2022 [33] - Exploration and evaluation expenses decreased to $7.9 million in Q3 2023 from $22.7 million in Q3 2022, primarily due to reduced environmental study spending and completion of the pilot mining test system [33] - General and administrative expenses were $4.6 million in Q3 2023, down from $5.9 million in Q3 2022, reflecting lower share-based compensation and insurance costs [34] - Free cash flow for Q3 2023 was negative $12.6 million, compared to negative $9.1 million in Q3 2022 [35] - The company held $22.5 million in cash as of September 30, 2023, with total pro forma liquidity standing at $56 million, including expected additional capital raise proceeds and an undrawn $25 million credit facility [36] Business Line Updates - The company has made significant progress on pre-feasibility work and the environmental impact statement for the NORI D Area, key prerequisites for the exploitation contract application [3] - The expected maximum capacity of the Hidden Gem vessel has been upgraded to 3 million wet tons of nodules per year, a 130% increase from the previous estimate of 1.3 million wet tons per year [10] - Pacific Metals Co (PAMCO) in Japan has validated that seafloor nodules can be processed through their current facility, producing intermediate products that align with the company's specifications [11] - The company expects to complete the pre-feasibility study in the first half of 2024, which will inform the application for an exploitation contract over the NORI D Area [11] Market and Regulatory Updates - The company has been sharing environmental data with stakeholders worldwide, including presentations at the recent ISA Meeting in Jamaica, where the data was well-received [4] - The ISA member states are working on streamlining regulatory tax into one document, with progress expected over the next two scheduled ISA meetings [5] - The company has a pro forma liquidity position of roughly $56 million, including $9 million expected from additional capital raise proceeds, $22.5 million in cash, and a $25 million undrawn credit facility [6] - The company's NORI and TOML projects are ranked as the largest undeveloped nickel projects in the world, with a nickel equivalent grade that stands apart from other resources [7] Strategic Direction and Industry Competition - The company is focused on delivering its mission with a capital-light approach, leveraging existing facilities like PAMCO in Japan for initial production [9] - The company's NORI D project outperforms all analyzed land-based production routes for nickel and copper and most for cobalt, according to a lifecycle assessment by Benchmark Minerals [14] - The company has developed a comprehensive set of sustainability goals and is engaging stakeholders for feedback to refine and finalize a robust set of targets and KPIs [17][18] Management Commentary on Operating Environment and Future Outlook - The company is encouraged by the progress at the ISA and the positive commentary from the ISA Secretary General on the close-to-final form of the regulations [28] - The company maintains its guidance on the intention to launch an application for an exploitation contract over the NORI D Area following the July 2024 ISA meeting [29] - The company believes its liquidity will be sufficient to meet working capital and capital expenditure requirements for the next 12 months [37] Other Important Information - The company has published its Second Annual Impact Report, examining the full scope of existing and future potential impacts, including lifecycle comparisons versus land-based resources [5] - The company has executed a complex three-desal campaign and continues to build upon its rich deep-sea dataset, with eight peer-reviewed papers published and many more to come [15] - The company has advanced its industry-first digital twin, DPE, in collaboration with Kongsberg Digital, bringing AI and hybrid machine learning to future deep-sea nodule collection operations [15] Q&A Session Summary Question: Regulatory concerns and potential delays - The company noted that 23 ISA member states have expressed reservations, but the majority continue to work on finalizing robust regulations [39] - The company believes that the legal obligation to deliver the mining code is not up for debate and expects more states to support the regulations as they near finalization [43] Question: Timing of profitability - The company expects to provide more detail on the economic model and profitability timeline with the release of the pre-feasibility study results in the first half of 2024 [44] Question: Processing of nodules sent to Japan - The 22 tons of nodules delivered to PAMCO in Japan have been used to demonstrate the viability of processing through existing facilities, while the remaining 2,980 tons are being used for testing and sharing with potential strategic partners [46][47] Question: Timing of additional capital raise - The $9 million capital raise is expected to be completed in staggered amounts, with $2.5 million expected by the end of November and the remaining $6.5 million in January [48] Question: China's potential illegal mining activities - The company views China's engagement with the ISA as constructive and does not speculate on potential illegal activities [49] Question: Post-collection test campaign - The company is not disclosing specific timing for the post-collection test campaign for security reasons but expects initial results to be available by the end of Q1 2024 [50][51] Question: China's potential application submission - The company believes it is unlikely for China or any other contractor to submit an application within several years due to the prerequisite of having at least three-plus years of environmental baseline data [52] Question: Cost of additional offshore campaign - The cost of the additional offshore campaign is within the company's guidance and is expected to be covered by the capital raise proceeds [53]

Part I Financial Information [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of loss, changes in equity, and cash flows, for the periods ended September 30, 2023 Condensed Consolidated Balance Sheets (Unaudited) | (in thousands of US Dollars) | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $27,873 | $49,602 | | **Total Assets** | $87,574 | $94,777 | | **Total Current Liabilities** | $19,344 | $41,614 | | **Total Liabilities** | $32,216 | $53,272 | | **Total Equity** | $55,358 | $41,505 | Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) | (in thousands of US Dollars) | Three months ended Sep 30, 2023 | Three months ended Sep 30, 2022 | Nine months ended Sep 30, 2023 | Nine months ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Exploration and evaluation expenses** | $7,905 | $22,663 | $23,172 | $40,340 | | **General and administrative expenses** | $4,613 | $5,944 | $15,958 | $22,502 | | **Operating loss** | $12,518 | $28,607 | $39,130 | $62,842 | | **Net loss and comprehensive loss** | $12,467 | $27,894 | $26,572 | $61,395 | | **Net loss per share - basic and diluted** | $0.04 | $0.12 | $0.09 | $0.27 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (in thousands of US Dollars) | Nine months ended Sep 30, 2023 | Nine months ended Sep 30, 2022 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(44,359) | $(46,760) | | **Net cash provided by (used in) investing activities** | $4,825 | $(959) | | **Net cash provided by financing activities** | $15,216 | $29,774 | | **Decrease in cash** | $(24,318) | $(17,945) | | **Cash - end of period** | $22,548 | $66,872 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, operational results, liquidity, and capital resources, noting the company remains in the exploration phase - The company is focused on preparing an application for its first exploitation contract for the NORI Area D, to be submitted to the International Seabed Authority (ISA) after the **July 2024** meetings Production is anticipated in **Q4 2025**, assuming a **one-year review and approval process**[99](index=99&type=chunk) - In **August 2023**, the company initiated a Registered Direct Offering to sell **12,461,540 common shares** and accompanying warrants, expecting gross proceeds of **$24.9 million**[100](index=100&type=chunk) - The company reported a **net loss of $12.5 million** for Q3 2023, a significant reduction from the **$27.9 million** net loss in Q3 2022 For the nine months ended September 30, 2023, the **net loss was $26.6 million**, down from **$61.4 million** in the prior year period[122](index=122&type=chunk)[134](index=134&type=chunk)[138](index=138&type=chunk) - As of September 30, 2023, the company had **$22.5 million** in cash Management believes this, along with proceeds from the Registered Direct Offering and available credit, is sufficient for the next twelve months However, an additional **$35 to $45 million** is needed to submit the exploitation contract application[144](index=144&type=chunk)[148](index=148&type=chunk)[150](index=150&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) The company's net loss decreased significantly in the third quarter and first nine months of 2023 compared to the same periods in 2022 Comparison of Financial Results (in thousands) | | For the Three Months Ended Sep 30, | For the Nine Months Ended Sep 30, | | :--- | :--- | :--- | | | **2023** | **2022** | **2023** | **2022** | | **Exploration and evaluation expenses** | $7,905 | $22,663 | $23,172 | $40,340 | | **General and administrative expenses** | $4,613 | $5,944 | $15,958 | $22,502 | | **Net Loss for the period** | $12,467 | $27,894 | $26,572 | $61,395 | - Exploration and evaluation expenses for Q3 2023 decreased by **$14.8 million** year-over-year, mainly due to a **$14.4 million** reduction in environmental studies and a **$3.7 million** reduction in PMTS costs, as the collector test was completed in **November 2022**[135](index=135&type=chunk) - General and administrative expenses for Q3 2023 decreased by **$1.3 million** year-over-year, primarily due to lower share-based compensation as certain long-term incentive plan options were fully amortized in **2022**[136](index=136&type=chunk) - A gain of **$13.75 million** was reported in the first nine months of 2023 from NORI's contribution of a **2%** gross overriding royalty on its project area to Low Carbon Royalties[142](index=142&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from private placements and a Registered Direct Offering, with **$22.5 million** cash on hand as of September 30, 2023, and an estimated **$35-45 million** needed for the exploitation contract application - As of **September 30, 2023**, the company had cash on hand of **$22.5 million**[144](index=144&type=chunk) - The company estimates it will require an additional **$35 to $45 million** to fund the submission of a high-quality application for an exploitation contract for NORI Area D following the **July 2024** ISA meeting[150](index=150&type=chunk) - The company has a **$25 million** unsecured credit facility with an affiliate of Allseas, which was undrawn as of the report date The maturity was extended to **November 30, 2024**[154](index=154&type=chunk)[177](index=177&type=chunk) - In **August 2023**, a Registered Direct Offering was initiated To date, it has provided gross proceeds of **$15.9 million**, with an additional **$9 million** in committed funding expected by **January 31, 2024**[155](index=155&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to market risks, including interest rate, credit, and foreign currency fluctuations, with future commodity price risk anticipated upon commercial production - The company is exposed to **interest rate risk** on its cash investments, which are currently held in investment-grade short-term deposits[188](index=188&type=chunk)[189](index=189&type=chunk) - **Foreign currency risk** exists due to transactions in Canadian dollars, Australian dollars, Euros, and British Pounds, though cash is primarily held in U.S. dollars to minimize exposure[191](index=191&type=chunk) - Upon commencing commercial production, the company will be exposed to **commodity price risk** for nickel, copper, manganese, and cobalt, which will be the principal source of future revenue[193](index=193&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal control over financial reporting during Q3 2023 - Based on an evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2023[196](index=196&type=chunk) - **No changes** occurred in the company's internal control over financial reporting during the three months ended September 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[197](index=197&type=chunk) Part II Other Information [Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several material legal proceedings, including lawsuits against investors, a shareholder class action, and an SEC investigation - The company is pursuing **litigation** against two investors who failed to fund their investment commitments related to the 2021 Business Combination[202](index=202&type=chunk) - A putative **class action lawsuit** was filed against the company, an executive, and a former director, alleging false and misleading statements The company has filed a motion to dismiss and is awaiting a ruling[203](index=203&type=chunk) - The company is cooperating with an **SEC investigation** concerning its 2020 acquisition of Tonga Offshore Mining Limited (TOML) and the Business Combination[204](index=204&type=chunk) - An investor from the 2021 private placement has filed a **lawsuit alleging breach** of representations and warranties The company has filed a motion to dismiss this complaint[205](index=205&type=chunk) [Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) This section updates the company's risk factors, adding a new risk concerning the Post-Collector Environmental Assessment and its sufficiency for the NORI Area D exploitation application - A **new risk factor** was added regarding the Post-Collector Environmental Assessment, stating there can be no assurance of its success or that the data gathered will be sufficient for the NORI Area D exploitation application[207](index=207&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details unregistered equity transactions, including the issuance of **11.58 million** common shares to Allseas and **4.15 million** common shares for a vessel use agreement - On **August 9, 2023**, **11,578,620 common shares** were issued to Allseas following the exercise of the Allseas Warrant for a cash price of **$115.8 thousand**[208](index=208&type=chunk) - On **August 1, 2023**, **4.15 million common shares** were issued to Allseas as consideration for an Exclusive Vessel Use Agreement for the 'Hidden Gem' vessel[209](index=209&type=chunk) - The company **did not repurchase** any of its equity securities during the three and nine months ended September 30, 2023[210](index=210&type=chunk) [Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable, indicating no defaults upon the company's senior securities during the reporting period - **Not applicable**[211](index=211&type=chunk) [Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable, as the company is not subject to mine safety disclosure requirements - **Not applicable**[212](index=212&type=chunk) [Other Information](index=56&type=section&id=Item%205.%20Other%20Information) No other information is disclosed for the period covered by this report - **None**[213](index=213&type=chunk) [Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including key agreements and officer certifications - The report includes several **key agreements** as exhibits, such as the Exclusive Vessel Use Agreement with Allseas Group S.A. and an amendment to the Unsecured Credit Facility[215](index=215&type=chunk) - **Certifications** by the Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are filed with the report[215](index=215&type=chunk)

metals company The Metals Company Q2 2023 Corporate Update: Unlocking the World's Largest Estimated Undeveloped Source of Battery Metals August 14, 2023 Forward looking statements. This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that relate to future events, TMC the metals company Inc.'s ("TMC" or the "Company") future operations and financial performance, ...

Financial Data and Key Metrics Changes - The company reported a net loss of approximately $14.1 million or $0.05 per share for Q2 2023, compared to a net loss of $12.4 million or $0.05 per share for Q2 2022 [33] - Exploration and valuation expenses decreased to $8.1 million in Q2 2023 from $10.2 million in Q2 2022, primarily due to reduced share-based compensation and lower spending on environmental studies [34] - General and administrative expenses were $5.1 million for Q2 2023, down from $8.1 million in Q2 2022, reflecting lower share-based compensation and decreased insurance costs [34] Business Line Data and Key Metrics Changes - The company plans to increase production capacity for the Project Zero offshore system from an estimated 1.3 million wet tonnes per annum to 3.0 million wet tonnes per annum, a potential increase of 130% [8] - The company indicated that approximately $60 million to $70 million in additional cash is needed to reach the application point for exploitation, with about half of this amount allocated to the environmental and social impact assessment [50] Market Data and Key Metrics Changes - The company noted a shift in media coverage supporting nodule collection, with significant endorsements from influential figures like James Cameron [12][13] - The U.S. government is increasingly focused on securing critical minerals, with recent legislative actions emphasizing the importance of nodule processing for national security [4][15] Company Strategy and Development Direction - The company intends to submit an application for an exploitation contract for NORI Area D following the July 2024 ISA session, with production expected to begin in Q4 2025 [7][19] - The company is focused on strengthening its environmental dataset through additional offshore campaigns to support its application [19][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the likelihood of receiving contract approval due to the positive environmental data being gathered [40] - The geopolitical landscape is seen as favorable, with increasing support for nodule collection as a means to secure critical minerals and reduce reliance on land-based mining [46][47] Other Important Information - The company raised approximately $27 million in gross proceeds at $2 per share, with a potential for an additional $11 million by mid-September [10] - The company has no debt and held cash of $20 million as of June 30, 2023, which, along with the recent capital raise, is expected to meet working capital and capital expenditure commitments for at least the next 12 months [35] Q&A Session Summary Question: Can you discuss the recent financing and investor confidence? - Management highlighted the recognition of the asset's value and the political tailwinds supporting the clean energy transition as key factors driving investor confidence [37][38] Question: How will the political landscape affect ISA discussions? - Management indicated that the ISA is expected to complete the mining code, with geopolitical factors playing a significant role in the discussions [42][44] Question: What is the breakdown of the $60 million to $70 million needed for the application? - Approximately half of the costs are related to the environmental and social impact assessment, with the remainder covering operational expenses and capital expenditures [50] Question: What is the status of the Bechtel prefeasibility study? - Management stated that the prefeasibility study will be crucial for updating the resource classification and improving the economic model for the project [59]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39281 TMC THE METALS COMPANY INC. (Exact name of registrant as specified in its charter) British Columbia, Can ...

TMC the metals company Inc. (NASDAQ:TMC) Q1 2023 Earnings Conference Call May 11, 2023 4:30 PM ET Company Participants Craig Shesky - Chief Financial Officer Gerry Barron - Chairman & Chief Executive Officer Conference Call Participants Dmitry Silversteyn - Water Tower Research Malcolm McDonald - BAML Frank Jones - Norbury Partners Operator Good day and thank you for standing by. Welcome to The Metals Company First Quarter 2023 Corporate Update Conference Call. At this time, all participants are in a listen ...

Q1 2023 Financial Highlights - The company reported a net loss of $0 million for Q1 2023, which includes a $14 million gain from the sale of the NORI royalty to Low Carbon Royalties, compared to a net loss of $21.1 million in Q1 2022[5] - The company's total cash was $28.4 million as of March 31, 2023[5] - The company used $23.5 million in operations in Q1 2023, compared to $15.5 million in Q1 2022[5] Financing Activities in Q1 2023 - The company closed a $25 million unsecured credit facility with the parent of Allseas Investments SA in March 2023, which remains undrawn[6] - The company received $5 million plus a 35% initial equity stake in Low Carbon Royalties (LCR), now 32% following 2 accretive LCR transactions[6] Regulatory and Market Updates - The International Seabed Authority (ISA) is progressing towards final regulations for seabed mining, with estimated initial commercial production on the NORI-D area in late 2024 or early 2025[7, 10] - Recent global headlines reflect increasing investment and interest in seafloor resources, including activities by Transocean/GSR, Norway, Japan, and France[11, 12] NORI-D Project and Resource Estimate - The NORI-D project is estimated to have a net present value (NPV) of $6.8 billion based on the March 2021 Initial Assessment, and an estimated $13.2 billion using current metal prices[37] - The NORI-D project contains an estimated resource of 1,634 million tonnes (wet), representing 22% of the company's estimated resource[38, 39] Environmental Impact and LCA - Benchmark Mineral Intelligence completed an independent third-party lifecycle assessment (LCA) of the NORI-D Project, showing it performed better in almost every impact category analyzed than all the land-based routes chosen for comparison[6] - Research indicates that sediment plumes from nodule collection are less extensive than previously speculated, with 92-98% of the plume from the pilot nodule collector vehicle rising only 2 meters above the seafloor[32] Processing and Partnerships - The company signed a non-binding MoU with Pacific Metals Co Ltd (PAMCO) of Japan to evaluate the tolling of 1.3 million tonnes of wet polymetallic nodules per year at PAMCO's Hachinohe smelting facility starting in 2025[6, 27]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or For the transition period from to Commission File Number: 001-39281 TMC THE METALS COMPANY INC. (Exact name of registrant as specified in its charter) British Columbia, Canada Not Applicable (State or other jurisdiction of incorporation or organization) (IRS Employer Iden ...

PART I [Business](index=6&type=section&id=Item%201.%20Business) TMC is a deep-sea mineral exploration company focused on collecting polymetallic nodules containing critical metals from the CCZ - The company is focused on exploring and collecting polymetallic nodules from the Clarion Clipperton Zone (CCZ), which contain **high concentrations of nickel, manganese, cobalt, and copper**[18](index=18&type=chunk) - TMC holds **exclusive exploration and commercial rights to three of the 17 polymetallic nodule contract areas** in the CCZ through its subsidiaries NORI (sponsored by Nauru), TOML (sponsored by Tonga), and an arrangement with Marawa (sponsored by Kiribati)[20](index=20&type=chunk) - The company is in the **exploration phase** and has **not yet obtained an exploitation contract** from the ISA, which is required for commercial-scale collection[21](index=21&type=chunk) - In November 2022, a pilot test with partner Allseas **successfully collected approximately 4,500 tonnes of wet nodules and lifted over 3,000 tonnes** 4.3km to the surface, demonstrating the core collection technology[53](index=53&type=chunk)[70](index=70&type=chunk) - TMC has a non-binding MoU with PAMCO of Japan to evaluate toll treatment of **1.3 million tonnes** of wet nodules per year starting in 2025, aiming to produce a nickel-copper-cobalt alloy and a manganese silicate product[61](index=61&type=chunk)[103](index=103&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from regulatory uncertainty, unproven technologies, partner dependence, commodity price volatility, limited operating history, and financial control weaknesses - The business is subject to **significant regulatory uncertainty**, as the ISA has **not yet finalized exploitation regulations** for commercial collection. A notice submitted by Nauru obliges the ISA to complete these regulations by July 9, 2023, but delays are possible[171](index=171&type=chunk)[173](index=173&type=chunk) - **No seafloor polymetallic nodule deposit has ever been commercially collected**, and the company's offshore collection technology and development plans may not be sufficient for commercial-scale operations[199](index=199&type=chunk) - The business is **substantially dependent on its strategic relationship with Allseas** for the development of offshore collection systems. Failure to maintain this relationship or enter into definitive commercial agreements would materially harm the business[233](index=233&type=chunk) - **Material weaknesses in internal control over financial reporting have been identified**. While remediation is underway, these weaknesses could result in misstatements in financial reports and have not been fully remediated as of year-end[168](index=168&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk) - The company is involved in several legal proceedings, including a **shareholder class-action lawsuit and litigation against PIPE investors** who failed to fund their commitments, which could result in substantial costs[279](index=279&type=chunk)[280](index=280&type=chunk) - The company has a **limited operating history**, **has not generated revenue**, and **will require significant additional capital** to fund its operations and achieve commercialization. There is no assurance that this financing will be available[244](index=244&type=chunk)[263](index=263&type=chunk) [Unresolved Staff Comments](index=90&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - **None**[311](index=311&type=chunk) [Properties](index=90&type=section&id=Item%202.%20Properties) This section details the company's exploration-stage mineral properties in the CCZ, including NORI and TOML contract areas with estimated polymetallic nodule resources NORI Area | NORI Area | Category | Tonnes (Mt wet) | Abundance (wet kg/m²) | Nickel (%) | Copper (%) | Cobalt (%) | Manganese (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | D | Measured | 4 | 18.6 | 1.42 | 1.16 | 0.13 | 32.2 | | D | Indicated | 341 | 17.1 | 1.40 | 1.14 | 0.14 | 31.2 | | D | **Measured + Indicated** | **345** | **17.1** | **1.40** | **1.14** | **0.14** | **31.2** | | D | Inferred | 11 | 15.6 | 1.38 | 1.14 | 0.12 | 31.0 | | A, B, C | Inferred | 510 | 11.0 | 1.28 | 1.04 | 0.21 | 28.3 | TOML Area | TOML Area | Category | Tonnes (Mt wet) | Abundance (wet kg/m²) | Nickel (%) | Copper (%) | Cobalt (%) | Manganese (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total | Measured | 2.6 | 11.8 | 1.33 | 1.05 | 0.23 | 27.6 | | Total | Indicated | 69.6 | 11.8 | 1.35 | 1.18 | 0.21 | 30.3 | | Total | **Measured + Indicated** | **72.2** | **11.8** | **1.35** | **1.18** | **0.21** | **30.2** | | Total | Inferred | 696 | 11.3 | 1.29 | 1.14 | 0.20 | 29.0 | - The NORI Area D project has a post-tax Net Present Value (NPV) of **$6.8 billion**, based on a preliminary economic assessment with a 9% discount rate. This assessment is conceptual and does not demonstrate economic viability[77](index=77&type=chunk)[410](index=410&type=chunk) - The company cautions that **mineral resources do not have demonstrated economic value** and cannot be assumed to be convertible into mineral reserves until further studies are completed[79](index=79&type=chunk)[352](index=352&type=chunk)[463](index=463&type=chunk) [Legal Proceedings](index=131&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in multiple material legal proceedings, including a shareholder class-action lawsuit, litigation against PIPE investors, and an SEC investigation - A **putative class action lawsuit was filed** against the company and certain executives in October 2021, alleging violations of the Exchange Act by making false or misleading statements. The company denies wrongdoing and has filed a motion to dismiss[497](index=497&type=chunk)[765](index=765&type=chunk) - The company is **suing two investors who failed to fund their PIPE commitments** from the September 2021 Business Combination[496](index=496&type=chunk) - In February 2022, the company **received notice of an SEC investigation** regarding the 2020 acquisition of Tonga Offshore Mining Limited (TOML) and the Business Combination with SOAC. The company is cooperating with the investigation[498](index=498&type=chunk) - In January 2023, **another investor from the 2021 PIPE filed a lawsuit** alleging breach of the subscription agreement. The company denies the allegations and is preparing a motion to dismiss[499](index=499&type=chunk)[766](index=766&type=chunk) [Mine Safety Disclosures](index=133&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not applicable**[500](index=500&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=134&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common shares and public warrants trade on Nasdaq, with 277.9 million shares outstanding as of March 2023, and no equity repurchases in 2022 - **Common shares and Public Warrants trade on Nasdaq under symbols "TMC" and "TMCWW"**[503](index=503&type=chunk) - As of March 24, 2023, there were **277,878,995 common shares outstanding**[504](index=504&type=chunk) - The company **did not repurchase any of its equity securities in 2022**[506](index=506&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=134&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) TMC reported a net loss of $171.0 million in 2022, driven by increased exploration expenses, and relies on financing for liquidity, ending 2022 with $46.8 million cash Comparison of Financial Results (Years Ended Dec 31) | (In thousands) | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Exploration and evaluation expenses | $144,599 | $93,006 | 55% | | General and administrative expenses | $29,518 | $56,583 | (48)% | | **Loss for the year, after tax** | **$170,964** | **$141,299** | **21%** | - Exploration expenses increased by **$51.6 million** in 2022, primarily due to the recognition of a **$69.9 million** non-cash expense for the Allseas Warrant vesting upon successful completion of the Pilot Mining Test System (PMTS)[558](index=558&type=chunk) - General & Administrative expenses decreased by **$27.1 million** in 2022, mainly due to lower share-based compensation of **$24.8 million** compared to 2021, which included significant option awards related to the Business Combination[559](index=559&type=chunk) - The company ended 2022 with **$46.8 million** in cash. It raised **$30.4 million** in a private placement in August 2022 and secured a new **$25 million** credit facility with an Allseas affiliate in March 2023[563](index=563&type=chunk)[571](index=571&type=chunk) - Management believes current cash and available credit are **sufficient for the next twelve months, but additional financing will be needed** to fund continued operations and potential commercialization[567](index=567&type=chunk)[568](index=568&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=157&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks including commodity price volatility for key metals, foreign currency exposure, and interest rate fluctuations, with mitigation strategies in place - The company's primary future market risk is **commodity price volatility for nickel, copper, manganese, and cobalt**, which will be the principal source of future revenue[610](index=610&type=chunk) - **Foreign currency risk exists due to transactions in CAD, AUD, and GBP, but is mitigated by holding most cash in USD**[608](index=608&type=chunk) - **Interest rate and credit risks are considered low**, as cash is held in high-grade short-term deposits and receivables are primarily from the Canadian government[606](index=606&type=chunk)[607](index=607&type=chunk) [Financial Statements and Supplementary Data](index=160&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2022 and 2021, reflecting its exploration-stage status, significant expenses, and reliance on financing Consolidated Balance Sheet (in thousands) | | As at Dec 31, 2022 | As at Dec 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$94,777** | **$133,125** | | Cash | $46,842 | $84,873 | | Exploration contracts | $43,150 | $43,150 | | **Total Liabilities** | **$53,272** | **$40,374** | | Accounts payable and accrued liabilities | $41,614 | $26,573 | | Warrants liability | $983 | $3,126 | | **Total Equity** | **$41,505** | **$92,751** | Consolidated Statement of Loss (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Exploration and evaluation expenses | $144,599 | $93,006 | | General and administrative expenses | $29,518 | $56,583 | | **Operating loss** | **$174,117** | **$149,589** | | **Loss for the year, after tax** | **$170,964** | **$141,299** | | **Loss per share - Basic and diluted** | **$0.71** | **$0.69** | Consolidated Statement of Cash Flows (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(66,637) | $(56,092) | | Net cash used in investing activities | $(1,169) | $(3,842) | | Net cash provided by financing activities | $29,722 | $134,701 | | **Decrease (increase) in cash** | **$(38,084)** | **$74,767** | [Controls and Procedures](index=206&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of December 31, 2022, due to an un-remediated material weakness in financial reporting controls, despite ongoing remediation efforts - Management concluded that disclosure controls and procedures were **not effective as of December 31, 2022**, due to an ongoing **material weakness in internal control over financial reporting**[779](index=779&type=chunk) - The **material weakness relates to deficiencies in the financial statement close and reporting controls**, stemming from the company's prior status as a private entity with limited resources[781](index=781&type=chunk) - **Remediation efforts in 2022 included appointing a CFO, hiring qualified accounting staff, and engaging external experts**. However, management concluded these **new controls have not been in operation long enough to be deemed effective**[784](index=784&type=chunk)[785](index=785&type=chunk)[787](index=787&type=chunk) [Other Information](index=209&type=section&id=Item%209B.%20Other%20Information) On March 22, 2023, the company secured a $25 million unsecured credit facility with an Allseas affiliate, enhancing its liquidity - **On March 22, 2023, the company secured a credit facility with an affiliate of Allseas, allowing it to borrow up to $25 million**[792](index=792&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=211&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's board comprises eight directors, mostly independent, with Gerard Barron as Chairman & CEO, supported by four standing committees and robust governance policies - The board is composed of **eight directors**, with **Gerard Barron as Chairman & CEO**. **Seven of the eight directors are determined to be independent**[796](index=796&type=chunk)[815](index=815&type=chunk) - The board has **four standing committees**: Audit, Compensation, Nominating and Corporate Governance, and Sustainability and Innovation, each with a written charter[816](index=816&type=chunk) - The **Audit Committee is chaired by Kathleen McAllister**, who, along with Andrew Hall, **qualifies as an "audit committee financial expert"**[818](index=818&type=chunk)[820](index=820&type=chunk) [Executive Compensation](index=220&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for NEOs includes base salary, STIP (paid in RSUs for 2022), and LTIP equity awards, detailed in the Summary Compensation Table Summary Compensation Table (2022) | Name and Principal Position | Year | Salary ($) | Bonus ($) | All Other Compensation ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Gerard Barron, CEO | 2022 | 565,000 | 317,813 | — | 882,813 | | Anthony O'Sullivan, CDO | 2022 | 475,000 | 178,125 | 8,251 | 661,376 | | Craig Shesky, CFO | 2022 | 350,000 | 186,250 | 32,339 | 605,256 | - The 2022 Short-Term Incentive Plan (STIP) bonus was awarded at **75% of target** and **paid entirely in immediately vested Restricted Share Units (RSUs) to conserve cash**[851](index=851&type=chunk) - **No new stock option or stock awards were granted to NEOs in 2022**. The compensation table for 2021 reflects significant stock and option awards granted in connection with the Business Combination[849](index=849&type=chunk)[851](index=851&type=chunk) - Non-employee directors receive an annual cash retainer of **$90,000**, plus committee fees, and an annual equity grant of RSUs valued at **$100,000**[896](index=896&type=chunk)[898](index=898&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=240&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common shares as of January 2023, highlighting major holders and management's collective ownership, alongside equity compensation plan information Security Ownership of Major Holders and Management (as of Jan 31, 2023) | Name of Beneficial Owner | Percentage of Shares Beneficially Owned (%) | | :--- | :--- | | ERAS Capital | 19.9% | | Allseas Group S.A. | 12.3% | | Maersk Supply Service A/S | 6.4% | | Gerard Barron (CEO) | 7.1% | | Andrei Karkar (Director) | 20.2% | | All Directors and Executive Officers as a Group (12 individuals) | 31.3% | Equity Compensation Plan Information (as of Dec 31, 2022) | Plan category | Securities to be issued upon exercise () | Weighted-average exercise price ($) | Securities remaining available for future issuance () | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 29,955,405 | 1.11 | 35,719,259 | [Certain Relationships and Related Transactions, and Director Independence](index=244&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company discloses related party transactions with Allseas Group S.A., ERAS Capital LLC, and CEO Gerard Barron, with a formal policy for audit committee review and approval - **Allseas Group S.A., a major shareholder**, participated in both the 2021 and 2022 PIPE financings and is the company's **key strategic partner** for developing the offshore collection system[915](index=915&type=chunk)[916](index=916&type=chunk)[918](index=918&type=chunk) - **In March 2023, the company entered into a $25 million credit facility with an affiliate of Allseas**[921](index=921&type=chunk) - **CEO Gerard Barron and ERAS Capital LLC (affiliated with director Andrei Karkar) purchased shares in the August 2022 private placement**[916](index=916&type=chunk) - The company has an adopted policy requiring the **audit committee to review and approve or ratify related person transactions exceeding $120,000**[929](index=929&type=chunk)[930](index=930&type=chunk)[933](index=933&type=chunk) [Principal Accounting Fees and Services](index=249&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) This section details fees paid to Ernst & Young LLP for 2021 and 2022, with all audit and non-audit services pre-approved by the audit committee Accountant Fees (in USD) | Fee Type | 2022 | 2021 | | :--- | :--- | :--- | | Audit fees | $555,560 | $705,795 | | Audit-related fees | $17,576 | — | | Tax fees | — | — | | All other fees | — | — | - The audit committee has a pre-approval policy for all audit and non-audit services provided by the independent auditor and has delegated authority to the committee chairperson for interim approvals[943](index=943&type=chunk)[945](index=945&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=251&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all exhibits filed with the Form 10-K, including key agreements, governance documents, and certifications from the CEO and CFO [Form 10-K Summary](index=256&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - **Not applicable**[954](index=954&type=chunk)