TMC TMC the Metals Company Inc

On August 12, 2022, TMC the metals company Inc. (the “Company”) entered into three securities purchase agreements for the private placement of an aggregate of 37,978,680 of the Company's common shares ("Common Shares") (the "Private Placement"). The Company entered into a securities purchase agreement (the “PIPE Purchase Agreement”) with the purchasers named therein (the “PIPE Purchasers”) for the issuance and sale of an aggregate of 31,625,000 Common Shares at a purchase price of $0.80 per share, a separate securities purchase agreement with Gerard Barron, the Company’s Chief Executive Officer and Chairman, for the issuance and sale of 103,680 Common Shares at $0.9645 per share, the consolidated closing bid price per Common Share on August 11, 2022 (the “Barron Purchase Agreement”), and a separate securities purchase agreement with ERAS Capital LLC, the family fund of the Company's director, Andrei Karkar, for the issuance and sale of 6,250,000 common shares at a purchase price of $0.80 per share (the “ERAS Purchase Agreement”, together with the PIPE Purchase Agreement and the Barron Purchase Agreement, the “Purchase Agreements”). The Common Shares issuable in the Private Placement pursuant to the Purchase Agreements are referred to herein as the “Shares” and the PIPE Purchasers, together with Mr. Barron and ERAS Capital LLC are referred to herein as the “Purchasers.” The Company expects to receive aggregate gross proceeds of approximately $30.4 million this quarter from the Private Placement and net proceeds of approximately $30 million, after deducting placement agent fees and offering expenses.

The Company intends to use the net proceeds from the Private Placement for working capital and general corporate purposes.

In addition, pursuant to the Purchase Agreements, the Company also agreed to file a registration statement with the Securities and Exchange Commission (the “SEC”) on or before September 16, 2022 (subject to certain exceptions) for purposes of registering the resale of the Shares, to use its commercially reasonable efforts to have such registration statement declared effective within the time period set forth in the Purchase Agreements, and to keep such registration statement effective for up to three years.

The Purchase Agreements contain customary closing conditions, representations, warranties and agreements by the Company, indemnification obligations of the Company and the Purchasers, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”), and other obligations of the parties. The representations, warranties and covenants contained in the Purchase Agreements were made only for purposes of such Purchase Agreements and are made as of specific dates; are solely for the benefit of the parties (except as specifically set forth therein); may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Purchase Agreements, instead of establishing matters as facts; and may be subject to standards of materiality and knowledge applicable to the contracting parties that differ from those applicable to the investors generally. Investors should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of the Company.

The Private Placement is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. The Purchasers represented that they were accredited investors within the meaning of Rule 501(a) of Regulation D, and were acquiring the securities for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof. The securities were offered without any general solicitation by the Company or its representatives. The securities sold and issued in the Private Placement will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from the registration requirements.

The foregoing description of the Purchase Agreements does not purport to be complete and is qualified in its entirety by reference to the form of the PIPE Purchase Agreement, the Barron Purchase Agreement and the ERAS Purchase Agreement, filed as Exhibits 10.1, 10.2 and 10.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.