Filed Pursuant to Rule 424(b)(5)
Registration No. 333-267479
PROSPECTUS SUPPLEMENT
(to Prospectus dated October 14, 2022)
TMC THE METALS COMPANY INC.
$30,000,000
Common Shares
We have entered into an At-The-Market
Equity Distribution Agreement, or the Distribution Agreement, with Stifel, Nicolaus & Company, Incorporated and Wedbush
Securities Inc., as Sales Agents, relating to the sale of our common shares offered by this prospectus supplement. In accordance with
the terms of the Distribution Agreement, under this prospectus supplement we may offer and sell our common shares, without par value,
having an aggregate offering price of up to $30,000,000 from time to time through the Sales Agents.
Sales of our common shares
under this prospectus supplement, if any, may be made by any method deemed to be an “at the market offering” as defined in
Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or the Securities Act, including block trades and sales
made in ordinary brokers’ transactions on the Nasdaq Global Select Market, or Nasdaq, or otherwise at market prices prevailing at
the time of the sale, at prices related to prevailing market prices or at negotiated prices. The Sales Agents are not required to sell
any specific number or dollar amount of common shares. Each of the Sales Agents has agreed to use its commercially reasonable efforts
to sell on our behalf all of the common shares requested to be sold by us, consistent with its normal trading and sales practices, on
mutually agreed terms among the Sales Agents and us. There is no arrangement for funds to be received in any escrow, trust or similar
arrangement. We also may sell shares to each of the Sales Agents as principal for their own accounts, at a price agreed upon at the time
of sale. If we sell shares to the Sales Agents as principal, we will enter into a separate terms agreement with the Sales Agents setting
forth the terms of such transaction, and we will describe this agreement in a separate pricing supplement.
The Sales Agents will be
entitled to compensation under the terms of the Distribution Agreement at a commission rate equal to up to 3.0% of the gross sales price
per share sold. In connection with the sale of common shares on our behalf, each of the Sales Agents will be deemed to be an “underwriter”
within the meaning of the Securities Act, and the compensation of the Sales Agents will be deemed to be underwriting commissions or discounts.
We have agreed to provide indemnification and contribution to the Sales Agents with respect to certain liabilities, including liabilities
under the Securities Act.
The offering of common shares
pursuant to the Distribution Agreement will terminate upon the earlier of (1) the sale of common shares having an aggregate sales
price of $30,000,000, (2) the expiration date of the registration statement of which this prospectus supplement is a part and (3) the
termination by us or the Sales Agents of the Distribution Agreement pursuant to its terms. See “Plan of Distribution.”
The net proceeds from any
sales under this prospectus supplement will be used as described under the section entitled “Use of Proceeds.” See “Plan
of Distribution” for additional information regarding compensation to be paid to the Sales Agents. The proceeds we receive from
sales of our common shares, if any, will depend on the number of shares actually sold and the offering price of such shares.
Our common shares and publicly
listed warrants to purchase common shares, or the Public Warrants, are listed on Nasdaq under the symbol “TMC” and “TMCWW”,
respectively. On December 21, 2022, the closing price of our common shares was $0.60 and the closing price for our Public Warrants
was $0.0501.
We are an “emerging
growth company” and “smaller reporting company” under the federal securities laws and, as such, are subject to reduced
public company reporting requirements. See “Prospectus Summary—Implications of Being an Emerging Growth Company and Smaller
Reporting Company.”
Investing in our
common shares involves a high degree of risk. See “Risk Factors” beginning on page S-8 of this prospectus
supplement and page 5 of the accompanying prospectus and in the other documents that are incorporated by reference in this
prospectus supplement.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus
supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The securities offered
by this prospectus supplement have not been qualified for distribution in Canada and may not be offered or sold in Canada.
| Stifel |
Wedbush Securities |
The date of this prospectus supplement is December 22,
2022.
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PROSPECTUS
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement
and the accompanying prospectus are part of a registration statement on Form S-3 (File No. 333-267479) that we filed with the Securities and Exchange Commission, or SEC, on September 16, 2022, as amended, that was declared effective by the SEC on October 14,
2022. This document is in two parts. The first part is this prospectus supplement, which describes the specific terms of the offering
and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this
prospectus supplement and the accompanying prospectus. The second part, the accompanying prospectus dated October 14, 2022, including
the documents incorporated by reference therein, provides more general information. Generally, when we refer to this prospectus, we are
referring to both parts of this document combined. To the extent there is a conflict between the information contained in this prospectus
supplement, on the one hand, and the information contained in the accompanying prospectus or in any document incorporated by reference
that was filed with the SEC before the date of this prospectus supplement, on the other hand, you should rely on the information in this
prospectus supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later
date - for example, a document incorporated by reference in the accompanying prospectus - the statement in the document having the later
date modifies or supersedes the earlier statement. You should read this prospectus supplement and the accompanying prospectus, including
the information incorporated by reference and any free writing prospectus that we have authorized for use in connection with this offering,
in their entirety before making an investment decision.
You should rely only on the
information contained in or incorporated by reference in this prospectus supplement and the accompanying prospectus, along with the information
contained in any free writing prospectus that we have authorized for use in connection with this offering. If the description of the offering
varies between this prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.
We have not, and Stifel, Nicolaus & Company, Incorporated and Wedbush Securities Inc. have not, authorized anyone to provide
you with different or additional information. You should assume that the information appearing in this prospectus supplement, the accompanying
prospectus, the documents incorporated by reference in this prospectus supplement and the accompanying prospectus, and in any free writing
prospectus that we have authorized for use in connection with this offering is accurate only as of the respective dates of those documents.
Our business, financial condition, results of operations and prospects may have changed since those dates.
We further note that the representations,
warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in
this prospectus supplement or the accompanying prospectus were made solely for the benefit of the parties to such agreement, including,
in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations, warranties and covenants were accurate only as of the date when made; therefore,
such representations, warranties and covenants should not be relied on as accurate representations of the current state of our affairs.
Unless the context otherwise
requires, “the Company,” “we,” “us,” “our” and similar terms refer to TMC the metals company
Inc. and our subsidiaries.
This prospectus supplement,
the accompanying prospectus and the information incorporated by reference includes trademarks, service marks and trade names owned by
us or other companies. All trademarks, service marks and trade names included or incorporated by reference into this prospectus supplement
or the accompanying prospectus are the property of their respective owners.
PROSPECTUS
SUPPLEMENT SUMMARY
The following is a summary
of what we believe to be the most important aspects of our business and the offering of our common shares under this prospectus supplement.
We urge you to read this entire prospectus supplement, the accompanying prospectus, including the more detailed consolidated financial
statements, notes to the consolidated financial statements and other information incorporated by reference from our other filings with
the SEC. Investing in our common shares involves risks. Therefore, carefully consider the risk factors set forth in our most recent annual,
quarterly and other filings with the SEC, as well as other information in this prospectus supplement and the accompanying prospectus and
the documents incorporated by reference herein or therein, before purchasing our common shares. Each of the risk factors could adversely
affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our common shares.
About TMC the metals company Inc.
We are 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, or the CCZ, about 1,300 nautical miles south-west of San Diego, California. The CCZ is a geological submarine
fracture zone of abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 km (4,500 miles) that
spans approximately 4,500,000 square kilometers (1,700,000 sq. mi). Polymetallic nodules are discrete rocks that sit unattached to the
seafloor, occur in significant quantities in the CCZ and have high concentrations of nickel, manganese, cobalt and copper in a single
rock.
These four metals contained
in the polymetallic nodules are critical for the transition to clean energy. Our resource definition work to date shows that nodules in
our contract areas represent the world’s largest estimated undeveloped source of critical battery metals. If we are able to collect
polymetallic nodules from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products: (i) feedstock
for battery cathode precursors (nickel and cobalt sulfates, or intermediate nickel-copper-cobalt matte) for electric vehicles, or EVs,
and renewable energy storage markets, (ii) nickel-copper-cobalt matte and/or copper cathode for EV wiring, clean energy transmission
and other applications and (iii) manganese silicate for manganese alloy production required for steel production. Our mission is
to build a carefully managed shared stock of metal, which we refer to as a metals common, that can be used, recovered and reused for generations
to come. Significant quantities of newly mined metal are required because existing metal stocks are insufficient to meet rapidly rising
demand.
Exploration and exploitation
of seabed minerals in international waters is regulated by the International Seabed Authority, or the 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, or UNCLOS.
The ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state. The ISA requires that a
contractor obtains and maintains sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS and such nation must
maintain effective supervision and regulatory control over such sponsored contractor. The ISA has issued a total of 19 polymetallic nodule
exploration contracts covering approximately 1.28 million km2, or 0.4% of the global seafloor, 17 of which are in the CCZ. We hold exclusive
exploration and commercial rights to three of the 17 polymetallic nodule contract areas in the CCZ: two based on the ISA exploration contracts
through our subsidiaries Nauru Ocean Resources Inc., or NORI, and Tonga Offshore Mining Limited, or TOML, sponsored by the Republic of
Nauru and the Kingdom of Tonga, respectively, and exclusive commercial rights through our subsidiary, DeepGreen Engineering Pte. Ltd.’s,
arrangement with Marawa Research and Exploration Limited, a company owned and sponsored by the Republic of Kiribati.
We have key strategic alliances
with (i) Allseas Group S.A., a leading global offshore contractor, which developed a pilot collection system, which is expected to
be modified into an initial smaller scale commercial production system and serve as the basis for the design of a full-scale commercial
production system and (ii) Glencore International AG, or Glencore, which holds offtake rights to 50% of nickel and copper production
from the NORI area. In addition, we have worked with an engineering firm Hatch Ltd. and consultants Kingston Process Metallurgy Inc. to
develop a near-zero solid waste flowsheet. The pyrometallurgical stages of the flowsheet were tested as part of our pilot plant program
at FLSmidth & Co. A/S’s and XPS Solutions’ (a Glencore subsidiary) facilities and bench-scale hydrometallurgical
refining work is being carried out at SGS SA. The near-zero solid waste flowsheet provides a design that is expected to serve as the basis
for our onshore processing facilities. In March 2022, we entered into a non-binding memorandum of understanding with Epsilon Carbon
Pvt, LTD., or Epsilon Carbon, in which Epsilon Carbon expressed its intent to conduct pre-feasibility work to potentially finance,
engineer, permit, construct and operate a commercial polymetallic nodule processing plant in India.
We are currently focused on
applying for our first exploitation contract from the ISA on the NORI Area D contract area and, subject to regulatory review and approval
by the ISA, intend to start commercial production in 2024. To reach our objective, we are: (i) defining our resource and project
economics, (ii) developing and testing an offshore nodule collection system, (iii) assessing the environmental, social and governance
impacts of offshore nodule collection, and (iv) developing and testing onshore technology and system to process collected polymetallic
nodules into a manganese silicate product, and an intermediate nickel-copper-cobalt matte product and/or end-products like nickel and
cobalt sulfates, and copper cathode. We will need additional funding to reach our expected commercial production in 2024.
We are still in the exploration
phase and have not yet declared mineral reserves. We have yet to obtain exploitation contracts from the ISA to commence commercial scale
polymetallic nodule collection in the CCZ and have yet to obtain the applicable environmental permits and other permits required to build
and operate commercial scale polymetallic nodule processing and refining plants on land.
Cautionary Statements Regarding the NORI
Initial Assessment and TOML Mineral Resource Statement
We have estimated the size
and quality of our resource in the NORI and TOML contracted areas in our SEC Regulation S-K (subpart 1300), referred to herein as the
SEC Mining Rules, compliant Technical Report Summary - Initial Assessment, of the NORI Property, Clarion-Clipperton Zone, Pacific Ocean
dated March 17, 2021, or the NORI Initial Assessment, and Technical Report Summary - TOML Mineral Resource, Clarion - Clipperton
Zone, Pacific Ocean dated March 26, 2021, or the TOML Mineral Resource Statement, respectively, prepared by AMC Consultants Ltd.,
or AMC, each of which is filed as an exhibit to the registration statement to which this prospectus supplement forms a part. We plan to
continue to refine our resource estimate for the NORI and TOML areas and better resolve the project economics. The initial assessment
included in the NORI Initial Assessment Report is a conceptual study of the potential viability of mineral resources in NORI Area D. This
initial assessment indicates that development of the mineral resource in NORI Area D is potentially technically and economically viable;
however, due to the preliminary nature of project planning and design, and the untested nature of the specific seafloor production systems
at a commercial scale, economic viability has not yet been demonstrated.
The NORI Initial Assessment
and TOML Mineral Resource Statement do not include the conversion of mineral resources to mineral reserves.
As used in this prospectus
supplement or in the applicable report summary, the terms “mineral resource,” “measured mineral resource,” “indicated
mineral resource” and “inferred mineral resource”, as applicable, are defined and used in accordance with the SEC Mining
Rules.
You are specifically cautioned
not to assume that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves, as defined
by the SEC. You are also cautioned that mineral resources do not have demonstrated economic value. Information concerning our mineral
properties in the NORI and TOML Technical Report Summaries and in this prospectus supplement includes information that has been prepared
in accordance with the requirements of the SEC Mining Rules. Under SEC standards, mineralization, such as mineral resources, may not be
classified as a “reserve” unless the determination has been made that the mineralization would be economically and legally
produced or extracted at the time of the reserve determination. Inferred mineral resources have a high degree of uncertainty as to their
existence and to whether they can be economically or legally commercialized. Under the SEC Mining Rules, estimates of inferred mineral
resources may not form the basis of an economic analysis. It cannot be assumed that all or any part of an inferred mineral resource will
ever be upgraded to a higher category. A significant amount of exploration must be completed in order to determine whether an inferred
mineral resource may be upgraded to a higher category. Therefore, you are cautioned not to assume that all or any part of an inferred
mineral resource exists, that it can be economically or legally commercialized, or that it will ever be upgraded to a higher category.
Approximately 97% of the NORI Area D resource is categorized as measured or indicated.
Likewise, you are cautioned
not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves.
Our Corporate Information
The Company was originally
known as Sustainable Opportunities Acquisition Corp., or SOAC. On September 9, 2021, or the Closing Date, we consummated a business
combination, or the Business Combination, pursuant to the terms of the business combination agreement, or the Business Combination Agreement,
dated as of March 4, 2021, by and among SOAC, 1291924 B.C. Unlimited Liability Company, an unlimited liability company existing under
the laws of British Columbia, Canada, and DeepGreen Metals Inc., a company existing under the laws of British Columbia, Canada, or DeepGreen.
In connection with the closing of the Business Combination, or the Closing, SOAC changed its name to “TMC the metals company Inc.”
Our principal executive offices are located at 595 Howe Street, 10th Floor, Vancouver,
British Columbia V6C 2T5, and our telephone number is (574) 252-9333. We do not have a physical office in Vancouver, British Columbia,
our directors and executive officers work remotely in various countries around the world, and the Vancouver, British Columbia address
disclosed as our principal executive office has been provided because it is our records office required under the Business Corporations
Act (British Columbia). Our website address is www.metals.co. The information contained on, or that can be accessed through,
our website is not and shall not be deemed to be part of this prospectus supplement. We have included our website address in this prospectus
supplement solely as an inactive textual reference. Investors should not rely on any such information in deciding whether to purchase
our common shares or other securities.
All service marks, trademarks
and trade names appearing in this prospectus supplement are the property of their respective owners. We do not intend our use or display
of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by,
these other companies. Solely for convenience, trademarks and tradenames referred to in this prospectus supplement may appear without
the ® or ™ symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent
under applicable law, our rights, or that the applicable owner will not assert its rights, to these trademarks and tradenames.
Implications of Being an Emerging Growth Company
and a Smaller Reporting Company
We qualify as an “emerging
growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. For so long as we remain an emerging
growth company, we may take advantage of relief from certain reporting requirements and other burdens that are otherwise applicable generally
to public companies. These provisions include:
| ● | reduced obligations with respect to financial data, including only being required to present two years
of audited financial statements, in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” disclosure; |
| ● | an exception from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley
Act of 2002, as amended; |
| ● | reduced disclosure about our executive compensation arrangements in our periodic reports, proxy statements
and registration statements; |
| ● | exemptions from the requirements of holding non-binding advisory votes on executive compensation or golden
parachute arrangements; and |
| ● | an exemption from compliance with the requirements of the Public Company Accounting Oversight Board regarding
the communication of critical audit matters in the auditor’s report on financial statements. |
We may take advantage of these
provisions until we no longer qualify as an emerging growth company. We will cease to qualify as an emerging growth company on the date
that is the earliest of: (i) December 31, 2026, (ii) the last day of the fiscal year in which we have more than $1.07 billion
in total annual gross revenues, (iii) the date on which we are deemed to be a “large accelerated filer” under the rules of
the SEC which means the market value of our common shares that is held by non-affiliates exceeds $700 million as of the prior June 30th,
or (iv) the date on which we have issued more than $1.0 billion of non-convertible debt over the prior three-year period. We may
choose to take advantage of some but not all of these reduced reporting burdens. We have taken advantage of certain reduced reporting
requirements in this prospectus supplement. Accordingly, the information contained herein may be different than you might obtain from
other public companies in which you hold equity interests.
In addition, under the JOBS
Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private
companies. We have elected to take advantage of the extended transition period to comply with new or revised accounting standards and
to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of the accounting standards
election, we will not be subject to the same implementation timing for new or revised accounting standards as other public companies that
are not emerging growth companies, which may make comparison of our financials to those of other public companies more difficult. As a
result of these elections, the information that we provide in this prospectus supplement may be different than the information you may
receive from other public companies in which you hold equity interests. In addition, it is possible that some investors will find our
common shares less attractive as a result of these elections, which may result in a less active trading market for our common shares and
higher volatility in our share price.
We are also a “smaller
reporting company,” meaning that the market value of our shares held by non-affiliates is less than $700 million and our annual
revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if
either (i) the market value of our shares held by non-affiliates is less than $250 million or (ii) our annual revenue was less
than $100 million during the most recently completed fiscal year and the market value of our shares held by non-affiliates is less than
$700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on
exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting
company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K
and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
THE
OFFERING
| Common shares offered by us |
|
Common shares having an aggregate offering price of up to $30,000,000. |
| |
|
|
| Common shares to be outstanding after this offering |
|
Up to 315,529,989 common shares, assuming sales of 50,000,000 common shares in this offering at an offering price of $0.60 per share, the last reported sale price of our common shares on the Nasdaq on December 21, 2022. The actual number of common shares issued will vary depending on the sales price under this offering. |
| |
|
|
| Manner of offering |
|
“At the market offering” that may be made from time to time through our Sales Agents. We may also sell common shares to each of the Sales Agents as principal for its own account. See “Plan of Distribution” on page S-17. |
| |
|
|
| Use of proceeds |
|
We intend to use the net proceeds from this offering for working capital and general corporate purposes. See “Use of Proceeds” on page S-14 of this prospectus supplement. |
| |
|
|
| Risk factors |
|
You should read the “Risk Factors” section of this prospectus supplement and in the documents incorporated by reference herein for a discussion of factors to consider carefully before deciding to invest in our common shares. |
| |
|
|
| Nasdaq Global Select Market symbol |
|
“TMC” |
The number of common shares
to be outstanding after this offering is based on 265,529,989 common shares outstanding as of September 30, 2022. The number of outstanding
common shares does not include:
| ● | 25,140,263 common shares and 14,896,783 special shares, which are automatically convertible into common
shares on a one-for-one basis if certain price thresholds are met, issuable upon exercise of share options outstanding as of September 30,
2022 under our stock incentive plans, at a weighted average per option exercise price of $1.11; |
| ● | 5,021,783 common shares issuable upon the vesting of restricted stock units outstanding as of September 30,
2022; |
| ● | 31,789,503 common shares available as of September 30, 2022 for future grant under the TMC Incentive
Equity Plan; |
| ● | 5,211,898 common shares available as of September 30, 2022 for future issuance under the 2021 Employee
Stock Purchase Plan; |
| ● | 136,239,964 common shares reserved for issuance upon conversion of our outstanding special shares, which
are automatically convertible into common shares on a one-for-one basis if certain price thresholds are met; |
| ● | 36,078,620 common shares issuable upon exercise of outstanding warrants to purchase common shares, at
a weighted average per warrant exercise price of $7.81; and |
| ● | 10,850,000 common shares we intend to issue after September 30, 2022 at a price of $1.00 to Allseas
Group SA as the third and final $10 million milestone payment as described in the original and amended Pilot Mining Test Agreement with
Allseas and a $850,000 payment for additional costs related to the successful completion of pilot collection system trials. |
RISK
FACTORS
Investing in our common
shares involves a high degree of risk. Before you decide to invest in our common shares, you should carefully consider the risks and uncertainties
described below together with all other information contained in this prospectus supplement, the accompanying prospectus and in our filings
with the SEC that we have incorporated by reference into this prospectus supplement. See the sections of this prospectus supplement entitled
“Where You Can Find More Information” and “Incorporation of Certain Information by Reference.” If any of the following
risks actually occurs, our business, prospects, operating results and financial condition could suffer materially. In such event, the
trading price of our common shares could decline and you might lose all or part of your investment.
Risks Related to the Company
There can be no assurance that we will be
able to comply with the continued listing standards of Nasdaq, including the Nasdaq’s
minimum closing bid price.
On September 10,
2021, our common shares and Public Warrants began trading on the Nasdaq Global Select Market under the symbols “TMC” and “TMCWW,” respectively.
The Nasdaq has qualitative and quantitative listing criteria. If we are unable to meet any of the Nasdaq listing requirements in the
future, including the $1.00 minimum closing bid price per share discussed below, Nasdaq could determine to delist our common shares.
If in the future Nasdaq delists our common shares from trading on its exchange for failure to meet the listing standards, we and our
shareholders could face significant material adverse consequences including:
| ● | a limited availability of market quotations for our securities; |
| ● | reduced liquidity for our securities; |
| ● | a deterrent for broker-dealers making a market in or otherwise seeking or generating interest in our securities; |
| ● | a deterrent for certain institutions and persons from investing in our securities at all; |
| ● | a determination that our common shares are “penny
stock” which will require brokers trading in our common shares
to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for
our securities; |
| ● | a limited amount of news and analyst coverage; and |
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. |
On December 5,
2022, we received a written notice from Nasdaq because the closing bid price of our common shares has been below the minimum $1.00
closing bid price per share since October 21, 2022. To regain compliance, the closing bid price of our common shares must be at
least $1.00 per share (the “Minimum Bid Requirement”) for a minimum of 10 consecutive business days by June 5, 2023
(the “Grace Period”). If we do not achieve compliance with the Minimum Bid Requirement by the end of the Grace Period,
we may be eligible for an additional 180 calendar day period to regain compliance. To qualify, we would be required, among other
things, to meet the continued listing requirement for the market value of our publicly held shares and all other Nasdaq initial
listing standards, with the exception of the bid price requirement, and would need to provide written notice to Nasdaq of our
intention and plan to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary.
However, if it appears to Nasdaq staff that we will not be able to cure the deficiency, or if we do not meet the other listing
standards, Nasdaq could provide notice that our common shares and Public Warrants will be subject to delisting. In the event we
receive notice that our common shares and Public Warrants are being delisted, we would be entitled to appeal the determination to a
Nasdaq Listing Qualifications Panel and request a hearing.
In the event that our common
shares and Public Warrants are delisted from Nasdaq and are not eligible for quotation or listing on another market or exchange, trading
of our common shares and warrants could be conducted only in the over-the-counter market or on an electronic bulletin board established
for unlisted securities such as the Pink Sheets or the OTC Bulletin Board. In such event, it could become more difficult to dispose of,
or obtain accurate price quotations for, our common shares and Public Warrants, and there would likely also be a reduction in our coverage
by securities analysts and the news media, which could cause the price of our common shares and Public Warrants to decline further.
Additional Risks Related to This Offering
Resales of our common shares in the public market during this
offering by our shareholders may cause the market price of our common shares to fall.
We may issue common shares from time to time in
connection with this offering. The issuance from time to time of these common shares, or our ability to issue these common shares in this
offering, could result in re-sales of our common shares by our current shareholders concerned about the potential dilution of their holdings.
In turn, these re-sales could have the effect of depressing the market price for our common shares.
We have broad discretion in how we use the net proceeds of this
offering, and we may not use these proceeds effectively or in ways with which you agree.
We have not designated any portion of the net proceeds
from this offering to be used for any particular purpose. Our management will have broad discretion as to the application of the net proceeds
of this offering and could use them for purposes other than those contemplated at the time of this offering. Our shareholders may not
agree with the manner in which our management chooses to allocate and spend the net proceeds. Moreover, our management may use the net
proceeds for corporate purposes that may not increase the market price of our common shares.
If you purchase common shares in this offering, you may suffer
immediate dilution of your investment.
The offering price per share
in this offering may exceed the net tangible book value per common share outstanding prior to this offering. Because the sales of the
common shares offered hereby will be made directly into the market, the prices at which we sell these shares will vary and these variations
may be significant. Purchasers of the common shares we sell, as well as our existing shareholders, will experience significant dilution
if we sell shares at prices significantly below the price at which they invested.
Investors in this offering may experience
future dilution.
In order to raise additional
capital, we may in the future offer additional common shares or other securities convertible into, or exchangeable for, our common shares
at prices that may not be the same as the price per share in this offering. We cannot assure you that we will be able to sell our common
shares or other related securities in any other offering at a price per share that is equal to or greater than the price per share paid
by investors in this offering. If the price per share at which we sell additional common shares or related securities in future transactions
is less than the price per share in this offering, investors who purchase our common shares in this offering will suffer dilution in their
investment.
The actual number of common shares we will
issue under the Distribution Agreement, at any one time or in total, is uncertain.
Subject to certain limitations
in the Distribution Agreement and compliance with applicable law, we have the discretion to deliver a placement notice to the Sales Agents
at any time throughout the term of the Distribution Agreement. The per share price of the common shares that are sold by the Sales Agents
after delivering a placement notice will fluctuate based on the market price of our common shares during the sales period and limits we
set with the Sales Agents. Because the price per share of each common share sold will fluctuate based on the market price of our common
shares during the sales period, it is not possible at this stage to predict the number of common shares that will be ultimately issued.
Sales of a significant number of common
shares in the public markets, or the perception that such sales could occur, could depress the market price of our common shares.
Sales of a substantial number
of our common shares in the public markets, or the perception that such sales could occur, could depress the market price of our common
shares and impair our ability to raise capital through the sale of additional equity or equity-based securities. We cannot predict the
effect that future sales of our common shares would have on the market price of our common shares.
The common shares offered hereby will be
sold in “at the market offerings,” and investors who buy shares at different times will likely pay different prices.
Investors who purchase common
shares in this offering at different times will likely pay different prices, and so may experience different levels of dilution and different
outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares
sold, and there is no minimum or maximum sales price. Investors may experience a decline in the value of their common shares as a result
of share sales made at prices lower than the prices they paid.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement,
the accompanying prospectus and the documents incorporated by reference therein include forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, that relate to future events or our future financial performance and involve known and unknown
risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially
from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words
such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,”
“may,” “plan,” “potential,” “predict,” “project,” “targets,” “likely,”
“will,” “would,” “could,” “should,” “continue,” and similar expressions or
phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. Although we believe that we have a reasonable basis for each forward-looking statement contained
in this prospectus supplement, the accompanying prospectus and the documents incorporated by reference therein, we caution you that these
statements are based on our projections of the future that are subject to known and unknown risks and uncertainties and other factors
that may cause our actual results, level of activity, performance or achievements expressed or implied by these forward-looking statements,
to differ. The sections in our periodic reports, including our most recent Annual Report on Form 10-K, as revised or supplemented
by our subsequent Quarterly Reports on Form 10-Q or our Current Reports on Form 8-K, entitled “Business,” “Risk
Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well
as other sections in this prospectus supplement, the accompanying prospectus and the other documents or reports incorporated by reference
therein, discuss some of the factors that could contribute to these differences. These forward-looking statements include, among other
things, statements about:
| ● | our use of the net proceeds from this offering; |
| ● | the commercial and technical feasibility of seafloor polymetallic nodule collection and processing; |
| ● | our and our partners’ development and operational plans, including with respect to the planned uses
of polymetallic nodules, where and how nodules will be obtained and processed, the expected environmental, social and governance impacts
thereof and our plans to assess these impacts and the timing and scope of these plans, including the timing and expectations with respect
to our receipt of exploitation contracts and our potential commercialization plans; |
| ● | the supply and demand for battery metals and battery cathode feedstocks, copper cathode and manganese
ores; |
| ● | the future prices of battery metals and battery cathode feedstocks, copper cathode and manganese ores; |
| ● | the timing and content of ISA’s final exploitation regulations that will create the legal and technical
framework for exploitation of polymetallic nodules in the CCZ; |
| ● | government regulation of mineral extraction from the deep seafloor and changes in mining laws and regulations; |
| ● | technical, operational, environmental, social and governance risks of developing and deploying equipment
to collect polymetallic nodules at sea and to process such nodules on land; |
| ● | the sources and timing of potential revenue as well as the timing and amount of estimated future production,
costs of production, other expenses, capital expenditures and requirements for additional capital; |
| ● | cash flow provided by operating activities; |
| ● | the expected activities of our partners under our key strategic relationships; |
| ● | the sufficiency of our cash on hand to meet our working capital and capital expenditure requirements and
the need for additional financing; |
| ● | our ability to raise financing in the future and the nature of such financings; |
| ● | any litigation to which we are a party; |
| ● | claims and limitations on insurance coverage; |
| ● | our plans to mitigate our material weaknesses in our internal control over financial reporting; |
| ● | the restatement of our financial statements; |
| ● | geological, metallurgical and geotechnical studies and opinions; |
| ● | mineral resource estimates; |
| ● | our status as an emerging growth company, non-reporting Canadian issuer and passive foreign investment
company; |
| ● | dependence on key management personnel and executive officers; |
| ● | political and market conditions beyond our control; |
| ● | COVID-19 and the impact of the COVID-19 pandemic on our business; and |
| ● | our financial performance. |
We may not actually achieve
the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking
statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking
statements we make. We have included important cautionary statements in this prospectus supplement, the accompanying prospectus and in
the documents incorporated by reference therein, particularly in the “Risk Factors” section, that we believe could cause actual
results or events to differ materially from the forward-looking statements that we make. For a summary of such factors, please refer to
the section entitled “Risk Factors” in this prospectus supplement and the accompanying prospectus, as updated and supplemented
by the discussion of risks and uncertainties under “Risk Factors” contained in any supplements to this prospectus supplement
and in our most recent Annual Report on Form 10-K, as revised or supplemented by our subsequent Quarterly Reports on Form 10-Q
or our Current Reports on Form 8-K, as well as any amendments thereto, as filed with the SEC and which are incorporated herein by
reference. The information contained in this document is believed to be current as of the date of this document. We do not intend to update
any of the forward-looking statements after the date of this document to conform these statements to actual results or to changes in our
expectations, except as required by law.
In light of these assumptions,
risks and uncertainties, the results and events discussed in the forward-looking statements contained in this prospectus supplement, the
accompanying prospectus or in any document incorporated herein by reference might not occur. Investors are cautioned not to place undue
reliance on the forward-looking statements, which speak only as of the date of this prospectus supplement or the date of the document
incorporated by reference in this prospectus supplement. We are not under any obligation, and we expressly disclaim any obligation, to
update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking
statements attributable to us or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section.
USE
OF PROCEEDS
We may issue and sell our
common shares having aggregate gross sales proceeds of up to $30.0 million from time to time pursuant to the Distribution Agreement. Because
there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions
and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will sell any common shares under or
fully utilize the Distribution Agreement as a source of financing.
We currently intend to use
the net proceeds, if any, for working capital and general corporate purposes. Pending these uses, we intend to invest the net proceeds
in investment-grade, interest-bearing securities.
DILUTION
If you invest in this offering,
your ownership interest will be diluted to the extent of the difference between the public offering price per share and the as adjusted
net tangible book value per share after giving effect to this offering. We calculate net tangible book value per share by dividing the
net tangible book value, which is tangible assets less total liabilities, by the number of outstanding common shares. Dilution represents
the difference between the amount per share paid by purchasers of common shares in this offering and the as adjusted net tangible book
value per share immediately after giving effect to this offering. Our net tangible book value as of September 30, 2022 was approximately
$35.1 million, or $0.13 per share.
After giving effect to the
sale of our common shares in the aggregate amount of $30.0 million at an assumed offering price of $0.60 per share, which was the
last reported sale price of our common shares on the Nasdaq Global Select Market on December 21, 2022 and after deducting offering
commissions and estimated offering expenses payable by us, our net tangible book value as of September 30, 2022 would have been $63.9
million, or $0.20 per share. This represents an immediate increase in the net tangible book value of $0.07 per share to our
existing shareholders and an immediate dilution in net tangible book value of $0.40 per share to new investors. The following table
illustrates this per share dilution:
| Assumed offering price per share | |
| | | |
$ | 0.60 | |
| Net tangible book value per share as of September 30, 2022 | |
$ | 0.13 | | |
| | |
| Increase per share attributable to this offering | |
| 0.07 | | |
| | |
| As adjusted net tangible book value per share as of September 30, 2022 after this offering | |
| | | |
| 0.20 | |
| Dilution per share to new investors | |
| | | |
$ | 0.40 | |
The table above assumes
for illustrative purposes that an aggregate of 50,000,000 common shares are sold at a price of $0.60 per share, which was the last
reported sale price of our common shares on the Nasdaq Global Select Market on December 21, 2022, for aggregate gross proceeds
of $30.0 million. The shares sold in this offering, if any, will be sold from time to time at various prices. An increase of $0.25
per share in the price at which the common shares are sold from the assumed offering price of $0.60 per share shown in the table
above, assuming all of our common shares in the aggregate amount of $30.0 million during the term of the Distribution Agreement is
sold at that price, would increase our as adjusted net tangible book value per share after the offering to $0.21 per share and would
increase the dilution in net tangible book value per share to new investors in this offering to $0.64 per share, after
deducting offering commissions and estimated offering expenses payable by us. A decrease of $0.25 per share in the price at which
the common shares are sold from the assumed offering price of $0.60 per share shown in the table above, assuming all of our
common shares in the amount of $30.0 million during the term of the Distribution Agreement is sold at that price, would decrease our
as adjusted net tangible book value per share after the offering to $0.18 per share and would decrease the dilution in net
tangible book value per share to new investors in this offering to $0.17 per share, after deducting offering commissions and
estimated offering expenses payable by us. This information is supplied for illustrative purposes only and may differ based on the
actual offering price and the actual number of shares offered.
The above discussion is based
on 265,529,989 common shares outstanding as of September 30, 2022. It does not include:
| ● | 25,140,263 common shares and 14,896,783 special shares, which are automatically convertible into common
shares on a one-for-one basis if certain price thresholds are met, issuable upon exercise of share options outstanding as of September 30,
2022 under our stock incentive plans, at a weighted average per option exercise price of $1.11; |
| ● | 5,021,783 common shares issuable upon the vesting of restricted stock units outstanding as of September 30,
2022; |
| ● | 31,789,503 common shares available as of September 30, 2022 for future grant under the TMC Incentive
Equity Plan; |
| ● | 5,211,898 common shares available as of September 30, 2022 for future issuance under the 2021 Employee
Stock Purchase Plan; |
| ● | 136,239,964 common shares reserved for issuance upon conversion of our outstanding special shares, which
are automatically convertible into common shares on a one-for-one basis if certain price thresholds are met; |
| ● | 36,078,620 common shares issuable upon exercise of outstanding warrants to purchase common shares, at
a weighted average per warrant exercise price of $7.81; and |
| ● | 10,850,000 common shares we intend to issue after September 30, 2022 at a price of $1.00 to Allseas
Group SA as the third and final $10 million milestone payment as described in the original and amended Pilot Mining Test Agreement with
Allseas and a $850,000 payment for additional costs related to the successful completion of pilot collection system trials. |
PLAN
OF DISTRIBUTION
We have entered into the Distribution
Agreement with Stifel, Nicolaus & Company, Incorporated and Wedbush Securities Inc., collectively referred to as Sales Agents
and each individually a Sales Agent, under which we may, over a period of time and from time to time, offer and sell our common shares
having an aggregate sales price of up to $30.0 million through the Sales Agents or to the Sales Agents. A copy of the Distribution Agreement
will be filed as an exhibit to a Current Report on Form 8-K and will be incorporated by reference into this prospectus supplement.
The sales, if any, of our common shares made under the Distribution Agreement, and to which this prospectus supplement relates, will be
made in “at-the-market” offerings as defined in Rule 415 under the Securities Act, including sales made directly on the
Nasdaq Global Select Market, the existing trading market for our common shares, or sales made to or through a market maker or through
an electronic communications network. In addition, our common shares may be offered and sold by such other methods, including privately
negotiated transactions, as we and the Sales Agents agree to in writing. The sales may be made at market prices prevailing at the time
of the sale, at prices related to prevailing market prices or at negotiated prices.
We also may sell our common
shares to the Sales Agents, as principal for their own respective accounts, at a price per share agreed upon at the time of sale. If we
sell our common shares to the Sales Agents, as principal, we will enter into a separate terms agreement with the Sales Agents, and we
will describe the agreement in a separate prospectus supplement or pricing supplement.
From time to time during the
term of the Distribution Agreement, we may deliver a placement notice to a Sales Agent specifying the length of the selling period, the
amount of common shares to be sold and the minimum price below which sales may not be made.
The Sales Agents have agreed
that, upon receipt of a placement notice from us that is accepted by such Sales Agent, and is subject to the terms and conditions of the
Distribution Agreement, the applicable Sales Agent will use its commercially reasonable efforts consistent with its normal trading and
sales practices to sell such common shares on such terms. We or the applicable Sales Agent may suspend the offering of the common shares
at any time upon proper notice to the other party, upon which the selling period will immediately terminate. Settlement for sales of the
common shares is expected to occur on the second business day, that is also a trading day, following the date on which any sales were
made, or on some other date that is agreed upon by us and the applicable Sales Agent in connection with a particular transaction. The
obligation of the Sales Agents under the Distribution Agreement to sell common shares pursuant to any placement notice is subject to a
number of conditions, which the Sales Agents reserve the right to waive in their sole discretion.
If acting as a sales agent,
the applicable Sales Agent will provide to us written confirmation following the close of trading on the Nasdaq Global Select Market on
each trading day on which shares are sold under the Distribution Agreement. Each confirmation will include the number of shares sold on
that day, the aggregate gross sales proceeds of the shares, the net proceeds to us (after deduction of any transaction fees, transfer
taxes or similar taxes or fees imposed by any governmental entity or self-regulatory organization in respect of such sales) and the aggregate
compensation payable by us to the applicable Sales Agent with respect to such sales. We will report, on a quarterly basis, the number
of shares sold by or through the Sales Agents during such quarterly fiscal period, the net proceeds received by the Company and the aggregate
compensation paid by the Company to the Sales Agents with respect to such sales.
We will pay the Sales Agents
an aggregate commission of up to 3.0% of the gross sales price per share for any shares sold through it as an agent under the Distribution
Agreement. We have agreed to reimburse the Sales Agents for certain fees and expenses in connection with this offering, including the
fees and disbursements of counsel to the Sales Agents, in an amount not to exceed $75,000 in the aggregate. We estimate that the total
expenses of this offering payable by us, excluding commissions and reimbursements payable to the Sales Agents under the Distribution Agreement,
will be approximately $275,000.
In connection with the sale
of our common shares on our behalf, either Sales Agent may be deemed to be an “underwriter” within the meaning of the Securities
Act, and the compensation paid to the Sales Agents may be deemed to be underwriting commissions or discounts. We have agreed in the Distribution
Agreement to provide indemnification and contribution to the Sales Agents against certain civil liabilities, including liabilities under
the Securities Act.
Sales of the common shares
as contemplated by this prospectus supplement will be settled through the facilities of the Depository Trust Company or by such other
means as we and the Sales Agents may agree upon. The offering of the common shares pursuant to the Distribution Agreement will terminate
upon the earliest of (1) the sale of the maximum aggregate amount of our common shares subject to the Distribution Agreement, (2) the
expiration date of the registration statement of which this prospectus supplement is a part, and (3) the termination of the Distribution
Agreement by any party at any time upon three days’ notice, or by the Sales Agents, upon notice to us, in certain circumstances,
including certain bankruptcy events relating to us or any material subsidiary, our failure to maintain a listing of our common shares
on the Nasdaq Global Select Market or the occurrence of a material adverse effect on our Company, as defined in the Distribution Agreement.
The Sales Agents and their
affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and
investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and
other financial and non-financial activities and services. The Sales Agents and their affiliates have provided, and may in the future
provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive
customary fees and expenses.
In the ordinary course of
their various business activities, the Sales Agents and their affiliates, officers, directors and employees may purchase, sell or hold
a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other
financial instruments for their own accounts and for the accounts of their customers, and such investment and trading activities may involve
or relate to our assets, securities and/or instruments (directly, as collateral securing other obligations or otherwise) and/or persons
and entities with relationships with us. The Sales Agents and their affiliates may also communicate independent investment recommendations,
market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments
and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and
instruments.
Selling Restrictions
Other than in the United States,
no action has been taken by us or the Sales Agents that would permit a public offering of the common shares offered by this prospectus
supplement in any jurisdiction where action for that purpose is required. The common shares offered by this prospectus supplement may
not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other offering material or advertisements in
connection with the offer and sale of any such shares be distributed or published in any jurisdiction, except under circumstances that
will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus
supplement comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution
of this prospectus supplement. This prospectus supplement does not constitute an offer to sell or a solicitation of an offer to buy any
common shares offered by this prospectus supplement in any jurisdiction in which such an offer or a solicitation is unlawful.
You should be aware that the
laws and practices of certain countries require investors to pay stamp taxes and other charges in connection with purchases of securities.
Notice to Prospective Investors in the European
Economic Area
In relation to each Member
State of the European Economic Area (each a “Relevant State”), none of our common shares have been offered or will be offered
pursuant to the offering to the public in that Relevant State prior to the publication of a prospectus in relation to the shares which
has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified
to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation, except that offers of shares may
be made to the public in that Relevant State at any time under the following exemptions under the Prospectus Regulation:
| a. | to any legal entity which is a qualified investor as defined under the Prospectus Regulation; |
| b. | to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus
Regulation), subject to obtaining the prior consent of representatives for any such offer; or |
| c. | in any other circumstances falling within Article 1(4) of the Prospectus Regulation,
provided that no such offer of shares shall require the Issuer or the Sales Agents to publish a prospectus pursuant to Article 3
of the Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the Prospectus Regulation. |
Each person in a Relevant
State who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and
with us and the Sales Agents that it is a qualified investor within the meaning of the Prospectus Regulation.
In the case of any shares
being offered to a financial intermediary as that term is used in Article 5(1) of the Prospectus Regulation, each such financial
intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired
on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances
which may give rise to an offer to the public other than their offer or resale in a Relevant State to qualified investors, in circumstances
in which the prior consent of the Sales Agent has been obtained to each such proposed offer or resale.
We, the Sales Agents and our
respective affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision,
the expression an “offer to the public” in relation to any shares in any Relevant State means the communication in any form
and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide
to purchase or subscribe for any shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
The above selling restriction
is in addition to any other selling restrictions set out below.
Notice to Prospective Investors in the United
Kingdom
In relation to the United
Kingdom (“UK”), no shares have been offered or will be offered pursuant to the offering to the public in the UK prior to the
publication of a prospectus in relation to the shares which has been approved by the Financial Conduct Authority in the UK in accordance
with the UK Prospectus Regulation and the FSMA, except that offers of shares may be made to the public in the UK at any time under the
following exemptions under the UK Prospectus Regulation and the FSMA:
| a. | to any legal entity which is a qualified investor as defined under the UK Prospectus Regulation; |
| b. | to fewer than 150 natural or legal persons (other than qualified investors as defined under the UK Prospectus
Regulation), subject to obtaining the prior consent of representatives for any such offer; or |
| c. | at any time in other circumstances falling within section 86 of the FSMA, provided that no such offer
of shares shall require the Issuer or the Sales Agents to publish a prospectus pursuant to Section 85 of the FSMA or Article 3
of the UK Prospectus Regulation or supplement a prospectus pursuant to Article 23 of the UK Prospectus Regulation. |
Each person in the UK who
initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed to and with us
and the Sales Agents that it is a qualified investor within the meaning of the UK Prospectus Regulation.
In the case of any shares
being offered to a financial intermediary as that term is used in Article 5(1) of the UK Prospectus Regulation, each such financial
intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been acquired
on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances
which may give rise to an offer to the public other than their offer or resale in the UK to qualified investors, in circumstances in which
the prior consent of the Sales Agents has been obtained to each such proposed offer or resale.
We, the Sales Agents and our
respective affiliates will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.
For the purposes of this provision,
the expression an “offer to the public” in relation to any in the UK means the communication in any form and by any means
of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase or
subscribe for any shares, the expression “UK Prospectus Regulation” means Regulation (EU) 2017/1129 as it forms part of domestic
law by virtue of the European Union (Withdrawal) Act 2018, and the expression “FSMA” means the Financial Services and Markets
Act 2000.
This document is for distribution
only to persons who (i) have professional experience in matters relating to investments and who qualify as investment professionals
within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended,
the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high
net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom,
or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of
the Financial Services and Markets Act 2000, as amended (“FSMA”)) in connection with the issue or sale of any securities may
otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”).
This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any
investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with
relevant persons.
Notice to Prospective Investors in Switzerland
The shares may not be publicly
offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or on any other stock exchange or regulated
trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses
under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of
the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither
this document nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise
made publicly available in Switzerland.
Neither this document nor
any other offering or marketing material relating to the offering, the Company, the shares have been or will be filed with or approved
by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of shares will not be supervised
by, the Swiss Financial Market Supervisory Authority FINMA (FINMA), and the offer of shares has not been and will not be authorized under
the Swiss Federal Act on Collective Investment Schemes (“CISA”). The investor protection afforded to acquirers of interests
in collective investment schemes under the CISA does not extend to acquirers of shares.
Notice to Prospective Investors in the Dubai
International Financial Centre
This prospectus relates to
an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This
prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must
not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection
with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility
for the prospectus. The shares to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective
purchasers of the shares offered should conduct their own due diligence on the shares. If you do not understand the contents of this prospectus
you should consult an authorized financial advisor.
Notice to Prospective Investors in Australia
No placement document, prospectus,
product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission (“ASIC”),
in relation to the offering. This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document
under the Corporations Act 2001 (the “Corporations Act”), and does not purport to include the information required for a prospectus,
product disclosure statement or other disclosure document under the Corporations Act.
Any offer in Australia of
the shares may only be made to persons (the “Exempt Investors”) who are “sophisticated investors” (within the
meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of
the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful
to offer the shares without disclosure to investors under Chapter 6D of the Corporations Act.
The shares applied for by
Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the
offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant
to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies
with Chapter 6D of the Corporations Act. Any person acquiring shares must observe such Australian on-sale restrictions.
This prospectus contains general
information only and does not take account of the investment objectives, financial situation or particular needs of any particular person.
It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to
consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek
expert advice on those matters.
Notice to Prospective Investors in Hong Kong
The securities have not been
offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors”
as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (b) in
other circumstances which do not result in the document being a “prospectus” as defined in the Companies Ordinance (Cap. 32)
of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance. No advertisement, invitation or document
relating to the securities has been or may be issued or has been or may be in the possession of any person for the purposes of issue,
whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of
Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to securities which are or are
intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the Securities
and Futures Ordinance and any rules made under that Ordinance.
Notice to Prospective Investors in Japan
The securities have not been
and will not be registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948, as amended) and, accordingly,
will not be offered or sold, directly or indirectly, in Japan, or for the benefit of any Japanese Person or to others for re-offering
or resale, directly or indirectly, in Japan or to any Japanese Person, except in compliance with all applicable laws, regulations and
ministerial guidelines promulgated by relevant Japanese governmental or regulatory authorities in effect at the relevant time. For the
purposes of this paragraph, “Japanese Person” shall mean any person resident in Japan, including any corporation or other
entity organized under the laws of Japan.
Notice to Prospective Investors in Singapore
This prospectus has not been
registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the securities were not offered or sold or caused to
be made the subject of an invitation for subscription or purchase and will not be offered or sold or caused to be made the subject of
an invitation for subscription or purchase, and this prospectus or any other document or material in connection with the offer or sale,
or invitation for subscription or purchase, of the securities, has not been circulated or distributed, nor will it be circulated or distributed,
whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A
of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the “SFA”)) pursuant
to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of
the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275
of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.
Where the securities are subscribed
or purchased under Section 275 of the SFA by a relevant person which is:
securities or securities-based
derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights
and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired
the securities pursuant to an offer made under Section 275 of the SFA except:
| a. | to an institutional investor or to a relevant person, or to any person arising from an offer referred
to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; |
| b. | where no consideration is or will be given for the transfer; |
| c. | where the transfer is by operation of law; or |
| d. | as specified in Section 276(7) of the SFA. |
Notice to Prospective Investors in Canada
The Company is not a reporting
issuer in any Province or Territory of Canada. The securities have not been registered or qualified by prospectus for distribution in
any Province or Territory of Canada, and are not eligible for sale or resale in Canada. The Sales Agents have agreed not to sell, offer
to sell or solicit offers to purchase common shares in Canada, or to or from persons resident in any Province or Territory of Canada or
to or from any person acquiring such common shares for the benefit of another person resident in any Province or Territory of Canada.
LEGAL
MATTERS
Fasken Martineau DuMoulin
LLP, or Fasken, has passed upon the validity of the common shares offered by this prospectus supplement and certain other legal matters
related to Canadian law. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., or Mintz, has passed upon certain other legal matters. Goodwin
Procter LLP is counsel to Stifel, Nicolaus & Company, Incorporated and Wedbush Securities Inc. in connection with this offering.
Fasken and Mintz own 14,630 and 36,361 common shares, respectively.
EXPERTS
The financial statements of
TMC the metals company Inc. as of December 31, 2021 and 2020 and for the years then ended have been incorporated by reference herein
and in the registration statement in reliance on the report of Ernst & Young LLP, independent registered public accounting firm,
incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We have filed with the SEC
a registration statement on Form S-3 (File No. 333-267479), of which this prospectus supplement and the accompanying prospectus
form a part, under the Securities Act of 1933, to register our common shares offered by this prospectus supplement. This prospectus supplement
and the accompanying prospectus do not contain all of the information contained in the registration statement and the exhibits and schedules
to the registration statement. For further information about us and the common shares, please refer to the registration statement, including
the exhibits to the registration statement. The exhibits to the registration statement provide more details of the matters discussed in
this prospectus supplement and the accompanying prospectus.
In addition, we file annual,
quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public on a website
maintained by the SEC located at www.sec.gov. We also maintain a website at www.metals.co. Through our website, we make
available, free of charge, annual, quarterly and current reports, proxy statements and other information as soon as reasonably practicable
after they are electronically filed with, or furnished to, the SEC. The information contained on, or that may be accessed through, our
website is not part of, and is not incorporated into, this prospectus supplement or the accompanying prospectus. We include our website
address in this prospectus supplement and the accompanying prospectus only as an inactive textual reference. Information contained in
our website does not constitute a part of this prospectus supplement and the accompanying prospectus or our other filings with the SEC.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” information into this prospectus supplement, which means that we can disclose important information to you by referring
you to another document filed separately with the SEC. The SEC file number for the documents incorporated by reference in this prospectus
supplement is 001-39281. The documents incorporated by reference into this prospectus supplement contain important information that you
should read about us.
The following documents are
incorporated by reference into this document:
| ● | our Quarterly Reports on Form 10-Q and amendments thereto for the quarters ended March 31, 2022,
June 30, 2022 and September 30, 2022 that we filed with the SEC on May 9, 2022, August 15, 2022, November 14
and November 15, 2022, respectively; |
| ● | our Current Reports on Form 8-K
and amendments thereto that we filed with the SEC on February 10,
2022, March 17,
2022, June 2,
2022, August 15,
2022, October 3,
2022, October 12,
2022, October 20,
2022, November 14,
2022 and December 6,
2022 (other than any portion of such filings that are furnished under applicable SEC rules rather than filed); |
| ● | all reports and other documents subsequently filed by us with the SEC (other than any portion of such
filings that are furnished under applicable SEC rules rather than filed) pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act after the date of this prospectus supplement and prior to the termination or completion of the offering of securities
under this prospectus supplement shall be deemed to be incorporated by reference in this prospectus supplement and to be a part hereof
from the date of filing such reports and other documents. |
We will provide to each person,
including any beneficial owner, to whom a prospectus is delivered, without charge upon written or oral request, a copy of any or all of
the documents that are incorporated by reference into this prospectus supplement or the accompanying prospectus but not delivered with
the prospectus, including exhibits which are specifically incorporated by reference into such documents. You should direct any requests
for documents to TMC the metals company Inc., 595 Howe Street, 10 Floor, Vancouver, British Columbia V6C 2T5.
In accordance with Rule 412
of the Securities Act, any statement contained in a document incorporated by reference herein shall be deemed modified or superseded to
the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
Filed
Pursuant to Rule 424(b)(3)
Registration No. 333-267479
PROSPECTUS
TMC THE METALS
COMPANY INC.
$100 MILLION
OF
COMMON SHARES
PREFERRED SHARES
DEBT SECURITIES
WARRANTS
UNITS
AND
38,266,180 COMMON
SHARES
OFFERED BY SELLING
SHAREHOLDERS
We may offer and sell securities from time to
time in one or more offerings of up to $100 million in aggregate offering price. This prospectus describes the general terms of these
securities and the general manner in which these securities will be offered by us. We will provide you with the specific terms of any
offering in one or more supplements to this prospectus. The prospectus supplements will also describe the specific manner in which these
securities will be offered and may also supplement, update or amend information contained in this document. You should read this prospectus
and any prospectus supplement, as well as any documents incorporated by reference into this prospectus or any prospectus supplement,
carefully before you invest.
In addition, the selling shareholders identified
in this prospectus may from time to time sell up to 38,266,180 of our common shares, without par value, or the Common Shares. We will
not receive any proceeds from the sale, if any, of Common Shares by the selling shareholders. Unless otherwise set forth in a prospectus
supplement, if required, the selling shareholders will pay any underwriting discounts and commissions and transfer taxes incurred by
the selling shareholders in disposing of the Common Shares.
Our securities may be sold directly by us to
you, through agents designated from time to time or to or through underwriters or dealers. For additional information on the methods
of sale, you should refer to the section entitled “Plan of Distribution” in this prospectus and in the applicable prospectus
supplement. If any underwriters or agents are involved in the sale of our securities with respect to which this prospectus is being delivered,
the names of such underwriters or agents and any applicable fees, commissions or discounts and over-allotment and other options to purchase
additional securities will be set forth in a prospectus supplement. The price to the public of such securities and the net proceeds that
we expect to receive from such sale will also be set forth in a prospectus supplement.
Our Common Shares are listed on the Nasdaq Global
Select Market under the symbol “TMC”. On October 4, 2022, the last reported sale price of our Common Shares was $1.02 per
share. We also have warrants to purchase Common Shares listed on the Nasdaq Global Select Market under the symbol “TMCWW”.
On October 4, 2022, the last reported sale price of these public warrants to purchase Common Shares was $0.148. The applicable prospectus
supplement will contain information, where applicable, as to any other listing, if any, on The Nasdaq Stock Market or any securities
market or other securities exchange of the securities covered by the prospectus supplement. Prospective purchasers of our securities
are urged to obtain current information as to the market prices of our securities, where applicable.
Investing in our securities involves a high
degree of risk. See “Risk Factors” included in any accompanying prospectus supplement and in the documents incorporated by
reference in this prospectus for a discussion of the factors you should carefully consider before deciding to purchase these securities.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus
is October 14, 2022.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
on Form S-3 that we filed with the Securities and Exchange Commission, or the SEC, using a shelf registration process. Using this
process, we may, from time to time, sell any securities described in this prospectus in one or more offerings up to a total dollar amount
of $100,000,000. This prospectus provides a general description of the securities we may offer. Each time we sell any securities under
this prospectus, we will provide a prospectus supplement that will contain more specific information about the terms of the securities
being offered and the specific manner in which they will be offered.
This prospectus does not contain all of the information
included in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the
registration statement, including its exhibits. The prospectus supplement may also add, update or change information contained or incorporated
by reference in this prospectus. However, no prospectus supplement will offer a security that is not registered and described in this
prospectus at the time of its effectiveness. This prospectus, together with the applicable prospectus supplements and the documents incorporated
by reference into this prospectus, includes all material information relating to the offering of securities under this prospectus. You
should carefully read this prospectus, the applicable prospectus supplement, the information and documents incorporated herein by reference
and the additional information under the heading “Where You Can Find More Information” before making an investment decision.
Information about the selling shareholders may
change over time. When the selling shareholders sell our Common Shares under this prospectus, we will, if necessary and required by law,
provide a prospectus supplement that will contain specific information about the terms of that offering.
You should rely only on the information we have
provided or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized anyone to provide you with
information different from that contained or incorporated by reference in this prospectus. No dealer, salesperson or other person is
authorized to give any information or to represent anything not contained or incorporated by reference in this prospectus. You must not
rely on any unauthorized information or representation. This prospectus is an offer to sell only the securities offered hereby, but only
under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this prospectus or any
prospectus supplement is accurate only as of the date on the front of the document and that any information we have incorporated herein
by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus
or any sale of a security.
We further note that the representations, warranties
and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus
were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among
the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should
not be relied on as accurately representing the current state of our affairs.
This prospectus may not be used to consummate
sales of our securities by us, unless it is accompanied by a prospectus supplement. To the extent there are inconsistencies between any
prospectus supplement, this prospectus and any documents incorporated by reference, the document with the most recent date will control.
Unless the context otherwise requires, “the
Company,” “we,” “us,” “our” and similar terms refer to TMC the metals company Inc. and our
subsidiaries.
For
investors outside the United States: We have not done anything that would permit these offerings or possession or distribution
of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. You are required to
inform yourselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.
PROSPECTUS SUMMARY
The following is a summary of what we believe
to be the most important aspects of our business and the offering of our securities under this prospectus. We urge you to read this entire
prospectus, including the more detailed consolidated financial statements, notes to the consolidated financial statements and other information
incorporated by reference from our other filings with the SEC or included in any applicable prospectus supplement. Investing in our securities
involves risks. Therefore, carefully consider the risk factors set forth in any prospectus supplements and in our most recent annual,
quarterly and other filings with the SEC, as well as other information in this prospectus and any prospectus supplements and the documents
incorporated by reference herein or therein, before purchasing our securities. Each of the risk factors could adversely affect our business,
operating results and financial condition, as well as adversely affect the value of an investment in our securities.
About TMC the metals company Inc.
We are 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, or the CCZ, about 1,300 nautical miles south-west of San Diego, California. The CCZ is a geological submarine fracture zone of
abyssal plains and other formations in the Eastern Pacific Ocean, with a length of around 7,240 km (4,500 miles) that spans approximately
4,500,000 square kilometers (1,700,000 sq. mi). Polymetallic nodules are discrete rocks that sit unattached to the seafloor, occur in
significant quantities in the CCZ and have high concentrations of nickel, manganese, cobalt and copper in a single rock.
These four metals contained in the polymetallic
nodules are critical for the transition to clean energy. Our resource definition work to date shows that nodules in our contract areas
represent the world’s largest estimated undeveloped source of critical battery metals. If we are able to collect polymetallic nodules
from the seafloor on a commercial scale, we plan to use such nodules to produce three types of metal products: (i) feedstock for
battery cathode precursors (nickel-copper-cobalt matte and/or nickel and cobalt sulfates) for electric vehicles, or EVs, and renewable
energy storage markets, (ii) nickel-copper-cobalt matte and/or copper cathode for EV wiring, clean energy transmission and other
applications and (iii) manganese silicate for manganese alloy production required for steel production. Our mission is to build
a carefully managed shared stock of metal, which we refer to as a metals common, that can be used, recovered and reused for generations
to come. Significant quantities of newly mined metal are required because existing metal stocks are insufficient to meet rapidly rising
demand.
Exploration and exploitation of seabed minerals
in international waters is regulated by the International Seabed Authority, or the 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, or UNCLOS. The
ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state. The ISA requires that a contractor
must obtain and maintain sponsorship by a host nation that is a member of the ISA and signatory to UNCLOS and such nation must maintain
effective supervision and regulatory control over such sponsored contractor. The ISA has issued a total of 19 polymetallic nodule exploration
contracts covering approximately 1.28 million km2, or 0.4% of the global seafloor, 17 of which are in the CCZ. We hold exclusive exploration
and commercial rights to three of the 17 polymetallic nodule contract areas in the CCZ through our subsidiaries Nauru Ocean Resources
Inc., or NORI, and Tonga Offshore Mining Limited, or TOML, sponsored by the Republic of Nauru and the Kingdom of Tonga, respectively,
and exclusive commercial rights through our subsidiary, DeepGreen Engineering Pte. Ltd.’s, arrangement with Marawa Research and
Exploration Limited, a company owned and sponsored by the Republic of Kiribati.
We have key strategic alliances with (i) Allseas
Group S.A., a leading global offshore contractor, which is developing a pilot collection system, which is expected to be modified into
an initial smaller scale commercial production system and serve as the basis for the design of a full-scale commercial production system
and (ii) Glencore International AG, or Glencore, which holds offtake rights on 50% of the NORI nickel and copper production. In
addition, we have worked with an engineering firm Hatch Ltd. and consultants Kingston Process Metallurgy Inc. to develop a near-zero
solid waste flowsheet. The pyrometallurgical stages of the flowsheet were tested as part of our pilot plant program at FLSmidth &
Co. A/S’s and XPS Solutions’ (a Glencore subsidiary) facilities and bench-scale hydrometallurgical refining stages are being
carried out at SGS SA. The near-zero solid waste flowsheet is in the process design that is expected to serve as the basis for our onshore
processing facilities. In March 2022, we entered into a non-binding memorandum of understanding with Epsilon Carbon Pvt, LTD.,
or Epsilon Carbon, in which Epsilon Carbon expressed its intent to conduct pre-feasibility work to potentially finance, engineer, permit,
construct and operate a commercial polymetallic nodule processing plant in India.
We are currently focused on applying for our
first exploitation contract from the ISA on the NORI Area D contract area with the goal of potentially starting commercial production
in 2024. To reach our objective and initiate commercial production in 2024, we are: (i) defining our resource and project economics,
(ii) developing an offshore nodule collection system, (iii) assessing the environmental, social and governance (ESG) impacts
of offshore nodule collection, and (iv) developing onshore technology to process collected polymetallic nodules into a manganese
silicate product, and an intermediate nickel-copper-cobalt matte product and/or end-products like nickel and cobalt sulfates, and copper
cathode. We will need additional funding to reach our expected commercial production in 2024.
We are still in the exploration phase and have
not yet declared mineral reserves. We have yet to obtain exploitation contracts from the ISA to commence commercial scale polymetallic
nodule collection in the CCZ and have yet to obtain the applicable environmental permits and other permits required to build and operate
commercial scale polymetallic nodule processing and refining plants on land.
Cautionary Statements Regarding the NORI Initial Assessment
and TOML Mineral Resource Statement
We have estimated the size and quality of our
resource in the NORI and TOML contracted areas in our SEC Regulation S-K (subpart 1300), referred to herein as the SEC Mining Rules,
compliant Technical Report Summary - Initial Assessment, of the NORI Property, Clarion-Clipperton Zone, Pacific Ocean dated March 17,
2021, or the NORI Initial Assessment, and Technical Report Summary - TOML Mineral Resource, Clarion-Clipperton Zone, Pacific Ocean dated
March 26, 2021, or the TOML Mineral Resource Statement, respectively, prepared by AMC Consultants Ltd., or AMC, each of which is
filed as an exhibit to the registration statement to which this prospectus forms a part. We plan to continue to refine our resource estimate
for the NORI and TOML areas and better resolve the project economics. The initial assessment included in the NORI Initial Assessment
Report is a conceptual study of the potential viability of mineral resources in NORI Area D. This initial assessment indicates that development
of the mineral resource in NORI Area D is potentially technically and economically viable; however, due to the preliminary nature of
project planning and design, and the untested nature of the specific seafloor production systems at a commercial scale, economic viability
has not yet been demonstrated.
The NORI Initial Assessment and TOML Mineral
Resource Statement do not include the conversion of mineral resources to mineral reserves.
As used in this prospectus or in the applicable
report summary, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource”
and “inferred mineral resource”, as applicable, are defined and used in accordance with the SEC Mining Rules.
You are specifically cautioned not to assume
that any part or all of the mineral deposits in these categories will ever be converted into mineral reserves, as defined by the SEC.
You are also cautioned that mineral resources do not have demonstrated economic value. Information concerning our mineral properties
in the NORI and TOML Technical Report Summaries and in this prospectus includes information that has been prepared in accordance with
the requirements of the SEC Mining Rules. Under SEC standards, mineralization, such as mineral resources, may not be classified as a
“reserve” unless the determination has been made that the mineralization would be economically and legally produced or extracted
at the time of the reserve determination. Inferred mineral resources have a high degree of uncertainty as to their existence and to whether
they can be economically or legally commercialized. Under the SEC Mining Rules, estimates of inferred mineral resources may not form
the basis of an economic analysis. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to
a higher category. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may
be upgraded to a higher category. Therefore, you are cautioned not to assume that all or any part of an inferred mineral resource exists,
that it can be economically or legally commercialized, or that it will ever be upgraded to a higher category. Approximately 97% of the
NORI Area D resource is categorized as measured or indicated.
Likewise, you are cautioned not to assume that
all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves.
Additional Information
For additional information related to our business
and operations, please refer to the reports incorporated herein by reference, as described under the caption “Incorporation of
Documents by Reference” on page 46 of this prospectus.
Our Corporate Information
The Company was originally known as Sustainable
Opportunities Acquisition Corp., or SOAC. On September 9, 2021, we consummated a business combination, or the Business Combination,
pursuant to the terms of the business combination agreement dated as of March 4, 2021 by and among SOAC, 1291924 B.C. Unlimited
Liability Company, an unlimited liability company existing under the laws of British Columbia, Canada, and DeepGreen Metals Inc., a company
existing under the laws of British Columbia, Canada, or DeepGreen. In connection with the Business Combination, SOAC changed its name
to “TMC the metals company Inc.” Our principal executive offices are located at 595 Howe Street, 10th Floor, Vancouver, British
Columbia V6C 2T5, and our telephone number is (574) 252-9333. Our website address is www.metals.co. The information contained
on, or that can be accessed through, our website is not and shall not be deemed to be part of this prospectus. We have included our website
address in this prospectus solely as an inactive textual reference. Investors should not rely on any such information in deciding whether
to purchase our Common Shares or other securities.
All service marks, trademarks and trade names
appearing in this prospectus are the property of their respective owners. We do not intend our use or display of other companies’
trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, these other companies.
Solely for convenience, trademarks and tradenames referred to in this prospectus may appear without the ® or ™ symbols, but
such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights,
or that the applicable owner will not assert its rights, to these trademarks and tradenames.
Offerings Under This Prospectus by Us
Under this prospectus, we may offer our securities
from time to time at prices and on terms to be determined by market conditions at the time of the offering. This prospectus provides
you with a general description of the securities we may offer. Each time we offer securities under this prospectus, we will provide a
prospectus supplement that will describe the specific amounts, prices and other important terms of the securities.
The prospectus supplement also may add, update
or change information contained in this prospectus or in documents we have incorporated by reference into this prospectus. However, no
prospectus supplement will fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered
and described in this prospectus at the time of its effectiveness.
We may sell the securities directly to investors
or to or through agents, underwriters or dealers. We, and our agents or underwriters, reserve the right to accept or reject all or part
of any proposed purchase of securities. If we offer securities through agents or underwriters, we will include in the applicable prospectus
supplement:
| ● | the names of those agents or underwriters; |
| ● | applicable fees, discounts and commissions to be paid to them; |
| ● | details regarding over-allotment and other options to purchase additional
securities, if any; and |
This prospectus may not be used to consummate a sale of any securities
by us unless it is accompanied by a prospectus supplement.
The Securities Selling Shareholders May Offer
The selling shareholders named in this prospectus
may offer and resell from time to time up to 38,266,180 Common Shares. We will not receive any proceeds from the sale of Common Shares
by the selling shareholders. Please see the section titled “Selling Shareholders” in this prospectus.
RISK FACTORS
Investing in our securities involves significant
risk. The prospectus supplement applicable to each offering of our securities will contain a discussion of the risks applicable to an
investment in us. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed
under the heading “Risk Factors” in the applicable prospectus supplement, together with all of the other information contained
or incorporated by reference in the prospectus supplement or appearing or incorporated by reference in this prospectus. You should also
consider the risks, uncertainties and assumptions discussed under the heading “Risk Factors” included in our most recent
Annual Report on Form 10-K, as revised or supplemented by our subsequent Quarterly Reports on Form 10-Q or our Current Reports
on Form 8-K that we have filed with the SEC, all of which are incorporated herein by reference, and which may be amended, supplemented
or superseded from time to time by other reports we file with the SEC in the future. The risks and uncertainties we have described are
not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also
affect our operations. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus and the documents incorporated
by reference in this prospectus include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that
relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of
activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,”
“expect,” “anticipate,” “estimate,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “targets,” “likely,” “will,”
“would,” “could,” “should,” “continue,” and similar expressions or phrases, or the negative
of those expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain
these identifying words. Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus
and incorporated by reference in this prospectus, we caution you that these statements are based on our projections of the future that
are subject to known and unknown risks and uncertainties and other factors that may cause our actual results, level of activity, performance
or achievements expressed or implied by these forward-looking statements, to differ. The sections in our periodic reports, including
our most recent Annual Report on Form 10-K, as revised or supplemented by our subsequent Quarterly Reports on Form 10-Q or
our Current Reports on Form 8-K, entitled “Business,” “Risk Factors,” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” as well as other sections in this prospectus and the other documents
or reports incorporated by reference in this prospectus, discuss some of the factors that could contribute to these differences. These
forward-looking statements include, among other things, statements about:
| ● | our
use of the net proceeds from this offering; |
| ● | the
commercial and technical feasibility of seafloor polymetallic nodule collection and processing; |
| ● | our
and our partners’ development and operational plans, including with respect to the
planned uses of polymetallic nodules, where and how nodules will be obtained and processed,
the expected environmental, social and governance impacts thereof and our plans to assess
these impacts and the timing and scope of these plans, including the timing and expectations
with respect to our receipt of exploitation contracts and our potential commercialization
plans; |
| ● | the
supply and demand for battery metals and battery cathode feedstocks, copper cathode and manganese
ores; |
| ● | the
future prices of battery metals and battery cathode feedstocks, copper cathode and manganese
ores; |
| ● | the
timing and content of ISA’s final exploitation regulations that will create the legal
and technical framework for exploitation of polymetallic nodules in the CCZ; |
| ● | government
regulation of mineral extraction from the deep seafloor and changes in mining laws and regulations; |
| ● | technical,
operational, environmental, social and governance risks of developing and deploying equipment
to collect polymetallic nodules at sea and to process such nodules on land; |
| ● | the
sources and timing of potential revenue as well as the timing and amount of estimated future
production, costs of production, other expenses, capital expenditures and requirements for
additional capital; |
| ● | cash
flow provided by operating activities; |
| ● | the
expected activities of our partners under our key strategic relationships; |
| ● | the
sufficiency of our cash on hand to meet our working capital and capital expenditure requirements
and the need for additional financing; |
| ● | our
ability to raise financing in the future and the nature of such financings; |
| ● | any
litigation to which we are a party; |
| ● | claims
and limitations on insurance coverage; |
| ● | our
plans to mitigate our material weaknesses in our internal control over financial reporting; |
| ● | the
restatement of our financial statements; |
| ● | geological,
metallurgical and geotechnical studies and opinions; |
| ● | mineral
resource estimates; |
| ● | our
status as an emerging growth company, non-reporting Canadian issuer and passive foreign investment
company; |
| ● | COVID-19 and the
impact of the COVID-19 pandemic on our business; and |
| ● | our financial performance. |
We may not actually achieve the plans, intentions
or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.
Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements
we make. We have included important cautionary statements in this prospectus and in the documents incorporated by reference in this prospectus,
particularly in the “Risk Factors” section, that we believe could cause actual results or events to differ materially from
the forward-looking statements that we make. For a summary of such factors, please refer to the section entitled “Risk Factors”
in this prospectus, as updated and supplemented by the discussion of risks and uncertainties under “Risk Factors” contained
in any supplements to this prospectus and in our most recent Annual Report on Form 10-K, as revised or supplemented by our subsequent
Quarterly Reports on Form 10-Q or our Current Reports on Form 8-K, as well as any amendments thereto, as filed with the SEC
and which are incorporated herein by reference. The information contained in this document is believed to be current as of the date of
this document. We do not intend to update any of the forward-looking statements after the date of this document to conform these statements
to actual results or to changes in our expectations, except as required by law.
In light of these assumptions, risks and uncertainties,
the results and events discussed in the forward-looking statements contained in this prospectus or in any document incorporated herein
by reference might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only
as of the date of this prospectus or the date of the document incorporated by reference in this prospectus. We are not under any obligation,
and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information,
future events or otherwise. All subsequent forward-looking statements attributable to us or to any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained or referred to in this section.
USE OF PROCEEDS
Unless otherwise indicated in the applicable
prospectus supplement, we intend to use any net proceeds from our sale of securities under this prospectus for general corporate purposes.
We will have broad discretion over the use of any proceeds. Pending application of the net proceeds, we may initially invest the net
proceeds in short-term, investment-grade, interest-bearing securities or apply them to the reduction of any indebtedness.
The selling shareholders will make offers and
sales pursuant to this prospectus and, if required, any applicable prospectus supplement. We will not receive any proceeds from the sale
or other disposition by the selling shareholders of the Common Shares covered hereby, or interests therein. The selling shareholders
will pay any expenses incurred by the selling shareholders for brokerage, accounting, tax or legal services or any other expenses incurred
by the selling shareholders in disposing of these shares. We will bear all other costs, fees and expenses incurred in effecting the registration
of the shares covered by this prospectus, including, without limitation, all registration fees, listing fees of The Nasdaq Stock Market
and fees and expenses of our counsel and our independent registered public accounting firm.
SELLING SHAREHOLDERS
We are registering for resale an aggregate of
38,266,180 Common Shares, all of which have been issued by us as of the date of this prospectus, that may be sold by the selling shareholders
set forth herein. Of these shares, 37,978,680 Common Shares were issued to the selling shareholders pursuant to that certain securities
purchase agreement, dated August 12, 2022, or the PIPE Purchase Agreement, with the purchasers named therein 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, our Chief Executive Officer and Chairman, or the Barron Purchase Agreement, for the issuance and sale of 103,680 Common Shares
at $0.9645 per share, the consolidated closing bid price per Common Share on the Nasdaq Global Select Market on August 11, 2022, the
date immediately preceding the signing of the Barron Purchase Agreement, and a separate securities purchase agreement with ERAS Capital
LLC, the family fund of one of our directors, Andrei Karkar, for the issuance and sale of 6,250,000 Common Shares at a purchase price
of $0.80 per share, or the ERAS Purchase Agreement. The PIPE Purchase Agreement, the Barron Purchase Agreement and the ERAS Purchase
Agreement are referred to herein collectively as the Purchase Agreements. An aggregate of 287,500 Common Shares were issued to certain
of our advisors in connection with advisory services they rendered related to the issuances of Common Shares pursuant to the Purchase
Agreements. We are registering the resale of these Common Shares pursuant to the Purchase Agreements as well as arrangements with certain
of our advisors. We will not receive any proceeds from the resale of the Common Shares by the selling shareholders.
The following table and the accompanying footnotes
are based in part on information supplied to us by the selling shareholders. The table and footnotes assume that the selling shareholders
will sell all of the shares listed. However, because the selling shareholders may sell all or some of their shares under this prospectus
from time to time, or in another permitted manner, we cannot assure you as to the actual number of shares that will be sold by the selling
shareholders or that will be held by the selling shareholders after completion of any sales. We do not know how long the selling shareholders
will hold the shares before selling them.
The following table sets forth certain information
with respect to the beneficial ownership of our Common Shares as of August 31, 2022 by each selling shareholder. Beneficial ownership
is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. We deem
Common Shares that may be acquired by an individual or group within 60 days of August 31, 2022 pursuant to the exercise of options or
conversion of convertible securities to be outstanding for the purpose of computing the percentage ownership of such individual or group,
but those shares are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in
the table. The Common Shares issuable upon conversion of any Special Shares owned by the selling shareholders are not beneficially owned
by any of the selling shareholders and are excluded from the beneficial ownership columns in the table below since the conversions of
such Special Shares are subject to the Common Share trading price thresholds described herein. Please see the section titled “Description
of Common Shares and Special Shares” in this prospectus. Except as indicated in footnotes to this table, we believe that the shareholders
named in this table have sole voting and investment power with respect to all Common Shares shown to be beneficially owned by them based
on information provided to us by these shareholders. Percentage of ownership prior to the offering is based on 265,424,635 Common Shares
outstanding on August 31, 2022, assuming that we issued all of the 37,978,680 Common Shares issued under the Purchase Agreements and
the 287,500 Common Shares issued to our advisors on or before such date.
| Name
of Selling Shareholder(1) |
|
Common
Shares Beneficially
Owned Prior to Offering |
|
|
Number
of
Common
Shares Being |
|
|
Common
Shares to be
Beneficially Owned After
Offering |
|
| |
Number |
|
|
Percentage |
|
Offered |
|
Number |
|
|
Percentage |
|
| Willeese
Pty Ltd ATF Wilson Family Trust(2) |
|
1,522,990 |
|
|
|
|
* |
|
|
|
375,000 |
|
|
|
1,147,990 |
|
|
|
* |
|
| Cadence
Capital Limited(3) |
|
2,250,000 |
|
|
|
|
* |
|
|
|
2,250,000 |
|
|
|
- |
|
|
|
- |
|
| Cadence
Opportunities Fund Limited(4) |
|
250,000 |
|
|
|
|
* |
|
|
|
250,000 |
|
|
|
- |
|
|
|
- |
|
| Carrera
Capital International Ltd.(5) |
|
1,719,890 |
|
|
|
|
* |
|
|
|
250,000 |
|
|
|
1,469,890 |
|
|
|
* |
|
| Lucas
Cahill(6) |
|
1,198,298 |
|
|
|
|
* |
|
|
|
687,500 |
|
|
|
510,798 |
|
|
|
* |
|
| Brian
Paes-Braga(7) |
|
2,325,731 |
|
|
|
|
* |
|
|
|
1,562,500 |
|
|
|
763,231 |
|
|
|
* |
|
| Valola
Holdings Corp.(8) |
|
2,500,000 |
|
|
|
|
* |
|
|
|
2,500,000 |
|
|
|
- |
|
|
|
- |
|
| South
Lake One LLC(9) |
|
12,284,667 |
|
|
|
|
4.6% |
|
|
|
2,500,000 |
|
|
|
9,784,667 |
|
|
|
3.7% |
|
| Brian
Stewart(10) |
|
125,000 |
|
|
|
|
* |
|
|
|
125,000 |
|
|
|
- |
|
|
|
- |
|
| Namdar
Family Holdings LLC(11) |
|
5,000,000 |
|
|
|
|
1.9% |
|
|
|
5,000,000 |
|
|
|
- |
|
|
|
- |
|
| Majid
Fahd M Alghaslan(12) |
|
4,011,000 |
|
|
|
|
1.5% |
|
|
|
3,750,000 |
|
|
|
261,000 |
|
|
|
* |
|
| BMO
Nesbitt Burns Inc. ITF Lynwood Opportunities Master Fund(13) |
|
1,250,000 |
|
|
|
|
* |
|
|
|
1,250,000 |
|
|
|
- |
|
|
|
- |
|
| Nero
Resource Fund Pty Ltd(14) |
|
625,000 |
|
|
|
|
* |
|
|
|
625,000 |
|
|
|
- |
|
|
|
- |
|
| Peter
Jon Deschenes Jr(15) |
|
275,000 |
|
|
|
|
* |
|
|
|
250,000 |
|
|
|
25,000 |
|
|
|
* |
|
| The
RF Trust(16) |
|
250,000 |
|
|
|
|
* |
|
|
|
250,000 |
|
|
|
- |
|
|
|
- |
|
| Gadi
Slade(17) |
|
500,000 |
|
|
|
|
* |
|
|
|
500,000 |
|
|
|
- |
|
|
|
- |
|
| Ronit
Global Opportunities Master Fund Limited(18) |
|
1,748,154 |
|
|
|
|
* |
|
|
|
1,500,000 |
|
|
|
248,154 |
|
|
|
* |
|
| Leste
Global Fund SPC - Segregated Portfolio B(19) |
|
1,250,000 |
|
|
|
|
* |
|
|
|
1,250,000 |
|
|
|
- |
|
|
|
- |
|
| Light
Doors LLC(20) |
|
125,000 |
|
|
|
|
* |
|
|
|
125,000 |
|
|
|
- |
|
|
|
- |
|
| Lydia
Barron(21) |
|
489,338 |
|
|
|
|
* |
|
|
|
125,000 |
|
|
|
364,338 |
|
|
|
* |
|
| Claudia
Barron(22) |
|
389,632 |
|
|
|
|
* |
|
|
|
125,000 |
|
|
|
264,632 |
|
|
|
* |
|
| Charlotte
Barron(23) |
|
396,538 |
|
|
|
|
* |
|
|
|
125,000 |
|
|
|
271,538 |
|
|
|
* |
|
| Allseas
Group S.A.(24) |
|
22,701,648 |
|
|
|
|
8.6% |
|
|
|
6,250,000 |
|
|
|
16,451,648 |
|
|
|
6.2% |
|
| Gerard
Barron(25) |
|
18,806,677 |
|
|
|
|
7.0% |
|
|
|
103,680 |
|
|
|
18,702,997 |
|
|
|
6.9% |
|
| ERAS
Capital LLC(26) |
|
53,370,692 |
|
|
|
|
20.0% |
|
|
|
6,250,000 |
|
|
|
47,120,692 |
|
|
|
17.7% |
|
| Odeon
Capital Group LLC(27) |
|
186,250 |
|
|
|
|
* |
|
|
|
186,250
|
|
|
|
- |
|
|
|
- |
|
| Edward
Sugar(28) |
|
70,875 |
|
|
|
|
* |
|
|
|
70,875
|
|
|
|
- |
|
|
|
- |
|
| Rogier
de la Rambelje(29) |
|
10,125 |
|
|
|
|
* |
|
|
|
10,125
|
|
|
|
- |
|
|
|
- |
|
| Matthew
Bonner(30) |
|
20,250 |
|
|
|
|
* |
|
|
|
20,250
|
|
|
|
- |
|
|
|
- |
|
*
Represents beneficial ownership of less than 1% of the outstanding Common Shares.
| (1) |
Unless otherwise indicated, the business address of
each of these holders is c/o TMC the metals company Inc., 595 Howe Street, 10th Floor, Vancouver, British Columbia, Canada V6C 2T5. |
| (2) |
Paul David Wilson may be deemed to have voting and
investment power over the shares held by Willeese Pty Ltd ATF Wilson Family Trust. The business address of such holder is 58 Warragal
Road, Turramurra, New South Wales, 2074, Australia. |
| (3) |
Cadence Capital Limited is a company listed on the
Australian Securities Exchange. The business address of such holder is 11/131 Macquarie Street, Sydney, NSW, 2000. |
| (4) |
Cadence Opportunities Fund Limited is a company listed
on the Australian Securities Exchange. The business address of such holder is 11/131 Macquarie Street, Sydney, NSW, 2000. |
| (5) |
Jeffrey Zicherman may be deemed to have voting and
investment power over the shares held by Carrera Capital International Ltd. The business address of such holder is One Nexus Way,
Camana Bay, Grand Cayman, Cayman Islands, KY1-9005. |
| (6) |
The business address of such holder is One Connaught
Place, 1st Floor, London, W2 WET, United Kingdom. |
| (7) |
Includes 57,893 Common Shares held by its wholly-owned
subsidiary, WTP Capital Corp. and 126,407 Common Shares underlying options that are exercisable within 60 days of August 31, 2022.
Mr. Paes-Braga may be deemed to have voting and investment power over the shares held by WTP Capital Corp. and Valola Holdings Corp.
The business address of such holder is One Connaught Place, 1st Floor, London, W2 WET, United Kingdom. Mr. Paes-Braga was formerly
a non-employee director of DeepGreen. |
| (8) |
Brian Paes-Braga may be deemed to have voting and
investment power over the shares held by Valola Holdings Corp. The business address of such holder is One Nexus Way, Camana Bay,
Grand Cayman, Cayman Islands, KY1-9005. |
| (9) |
Isidoro Alfonso Quiroga Cortés, María
Victoria Quiroga Moreno, Martín Abraham Guiloff Salvador and Luis Felipe Correa González, in their capacity as members
of the board of managers, may be deemed to have voting and dispositive power (acting jointly Isidoro Alfonso Quiroga Cortés
or María Victoria Quiroga Moreno with any of between Martín Abraham Guiloff Salvador and Luis Felipe Correa González)
with respect to the securities held by South Lake One LLC. The business address of such holder is Presidente Riesco 5711
office 1603, Las Condes, Santiago, Chile. |
| (10) |
The business address of such holder is 48 Weathervane
Circle, Cream Ridge, NJ 08514. |
| (11) |
Igal Namdar may be deemed to have voting and investment
power over the shares held by Namdar Family Holdings LLC. The business address of such holder is 150 Great Neck Road, Suite 304,
Great Neck, NY, 11021. |
| (12) |
The business address of such holder is 3618, Al Amir
Muhammad bin Fahd Rd, Al Qusur Unit 6, Dhahran, Kingdom of Saudi Arabia. |
| (13) |
Ben Shapiro may be deemed to have voting and investment
power over the shares held by BMO Nesbitt Burns Inc. ITF Lynwood Opportunities Master Fund. The business address of such holder is
FG Services Limited, #2206, Cassia Court, 72 Market St., Camana Bay, P.O. Box 30869 Grand Cayman KY1-1204, Cayman Islands. |
| (14) |
The business address of such holder is AAM PO Box 107, Morley, Western Australia,
Australia 6943. |
| (15) |
The business address of such holder is 115 East 67th
Street, Apartment 4B, New York, NY 10065. |
| (16) |
Muriel Rubin and Harriet Rothfeld may be deemed to
have voting and investment power over the shares held by The RF Trust. The business address of such holder is PO Box 213399, Royal
Palm Beach, Florida 33421. |
| (17) |
The business address of such holder is 48 Owenoke
Park, Westport, CT 06880, USA. |
| (18) |
Ronit Capital LLP may be deemed to have voting and
investment power over the shares held by Ronit Global Opportunities Master Fund Limited. The business address of such holder is C/O
Ronit Capital LLP, 20 North Audley Street, London, W1K 6WE, UK. |
| (19) |
Emmanuel Rose Hermann may be deemed to have voting
and investment power over the shares held by Leste Global Fund SPC - Segregated Portfolio B. The business address of such holder
is Conyers Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681, George Town, Grand Cayman, KY1-1111, Cayman
Islands. |
| (20) |
Mathew Van Alstyne may be deemed to have voting and
investment power over the shares held by Light Doors LLC. The business address of such holder is 750 Lexington Avenue, 27th Floor,
NY, NY 10022. |
| (21) |
Represents (i) 399,944 Common Shares and (ii) 89,394
Common Shares issued upon exercise of warrants. |
| (22) |
Represents (i) 300,238 Common Shares and (ii) 89,394 Common Shares issued upon exercise
of warrants. |
| (23) |
Represents (i) 307,144 Common Shares and (ii) 89,394 Common Shares issued upon exercise
of warrants. |
| (24) |
Does not include 11,578,620 Common Shares issuable
upon exercise of the warrant held by Allseas Group S.A. (“Allseas”). Edward Heerema, the Administrateur President of
Allseas, has sole authority over Allseas. Edward Hereema, Allseas Investments S.A. (“Allseas Investments”), the majority
parent of Allseas, Argentum Cedit Virtuti GCV (“ACV”), the parent of Allseas Investments, and Stichting Administratiekantoor
Aequa Lance Foundation, the parent of ACV, may be deemed to have beneficial ownership of the shares owned by Allseas. The business
address of such holder is 18 Route de Pra de Plan, Case Postale, 411 1618 Chatel-Saint-Denis, Switzerland. We have a strategic relationship
with Allseas in connection with the development of our collection systems. |
| (25) |
Represents (i) 14,639,239 Common Shares, (ii) 4,078,044
Common Shares that are issuable upon exercise of options that are exercisable within 60 days of August 31, 2022, and (iii) 89,394
Common Shares underlying warrants. Does not include (i) up to 781,250 restricted stock units, each representing the right
to receive one Common Share upon vesting, which vest in three equal annual installments beginning on November 22, 2022 and ending
on November 22, 2024 and (ii) up to 12,113,741 special shares (which includes special shares underlying options) which
automatically convert into Common Shares on a one for one basis, if on any twenty trading days within any thirty trading day period,
the Common Shares trade for a price that is greater than or equal to the price threshold for such class of special shares. |
| (26) |
Represents (i) 51,955,976 Common Shares and (ii) 1,414,716
Common Shares issuable upon exercise of warrants owned by ERAS Capital LLC (“ERAS”). Andrei Karkar has voting and dispositive
control over the securities held by ERAS and therefore Mr. Karkar may be deemed to have beneficial ownership of the shares held by
ERAS. The business address of such holder is 323 Marina Blvd, San Francisco, CA 94123-1213. |
| (27) |
Mathew Van Alstyne may be deemed to have voting and
investment power over the shares held by Odeon Capital Group LLC. The business address of such holder is 750 Lexington Avenue, 27th
Floor, NY, NY 10022. The Common Shares being offered were issued by us in connection with advisory services rendered to us related
to the issuance of the Common Shares pursuant to the Purchaser Agreement. |
| (28) |
The business address of such holder is 785 Fifth Avenue,
Apt. 11-C, New York, NY 10022. The Common Shares being offered were issued by us in connection with advisory services rendered to
us related to the issuance of the Common Shares pursuant to the Purchaser Agreement. |
| (29) |
The business address of such holder is 54 Morton Street,
Apt 4F, New York, NY 10014. The Common Shares being offered were issued by us in connection with advisory services rendered to us
related to the issuance of the Common Shares pursuant to the Purchaser Agreement. |
| (30) |
The business address of such holder is 3600 North
Lake Blvd, #186, Tahoe City, CA 96145. The Common Shares being offered were issued by us in connection with advisory services rendered
to us related to the issuance of the Common Shares pursuant to the Purchaser Agreement. |
PLAN OF DISTRIBUTION
We or the selling shareholders may offer securities
under this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination
of these methods or any of the following:
| |
● |
ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| |
● |
block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction; |
| |
● |
purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| |
● |
an
exchange distribution in accordance with the rules of the applicable exchange; |
| |
● |
privately
negotiated transactions; |
| |
● |
settlement
of short sales entered into after the effective date of the registration statement of which this prospectus is a part; |
| |
● |
broker-dealers
may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share; |
| |
● |
through
the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise;
|
| |
● |
a
combination of any such methods of sale; and |
| |
● |
any
other method permitted pursuant to applicable law. |
We or the selling shareholders may sell the securities
(1) through underwriters or dealers, (2) through agents or (3) directly to one or more purchasers, or through a combination
of such methods. We or the selling shareholders may distribute the securities on any national securities exchange or quotation service
on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than
on these exchanges or systems or in the over-the-counter market from time to time in one or more transactions at:
| |
● |
a fixed
price or prices, which may be changed from time to time; |
| |
● |
market
prices prevailing at the time of sale; |
| |
● |
prices
related to the prevailing market prices; or |
| |
● |
negotiated
prices. |
We may also designate agents to solicit offers
to purchase the securities from time to time, and may enter into arrangements for “at-the-market,” equity line or similar
transactions. We will name in a prospectus supplement any underwriter or agent involved in the offer or sale of the securities.
If we or the selling shareholders utilize a dealer
in the sale of the securities being offered by this prospectus, we or the selling shareholders, as applicable, will sell the securities
to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer
at the time of resale.
If an underwriter is used in the sale of the
securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale, and
the name of any underwriter will be provided in any prospectus supplement, if required, which the underwriter will use to make resales
of the securities to the public. In connection with the sale of the securities, we or the selling shareholders, or the purchasers of
the securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions.
The underwriter may sell the securities to or through dealers, and the underwriter may compensate those dealers in the form of discounts,
concessions or commissions.
With respect to underwritten public offerings,
negotiated transactions and block trades, we or the selling shareholders, if required, will provide in the applicable prospectus supplement
information regarding any compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and
any discounts, concessions or commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating
in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act, and any discounts and
commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and
commissions. We or the selling securities may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities,
including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof. To the
extent required by the Purchase Agreements, we have agreed to indemnify certain of the selling shareholders against liabilities, including
liabilities under the Securities Act and state securities laws, relating to the registration of certain of the shares offered by this
prospectus.
If so indicated in a prospectus supplement, if
required, we or the selling shareholders will authorize the underwriters, dealers or other persons acting as our agents to solicit offers
by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and delivery on the
date stated in each applicable prospectus supplement, if required. Each contract will be for an amount not less than, and the aggregate
amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in each applicable
prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all cases
be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:
| ● | the purchase by an institution of
the securities covered under that contract shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which that institution is subject; and |
| ● | if the securities are also being sold
to underwriters acting as principals for their own account, the underwriters shall have purchased
such securities not sold for delayed delivery. The underwriters and other persons acting
as our agents will not have any responsibility in respect of the validity or performance
of delayed delivery contracts. |
One or more firms, referred to as “remarketing
firms,” may also offer or sell the securities, if a prospectus supplement, if required, so indicates, in connection with a remarketing
arrangement upon their purchase. Remarketing firms will act as principals for their own accounts or as our agents. These remarketing
firms will offer or sell the securities in accordance with the terms of the securities. Each prospectus supplement, if required, will
identify and describe any remarketing firm and the terms of its agreement, if any, with us and will describe the remarketing firm’s
compensation. Remarketing firms may be deemed to be underwriters in connection with the securities they remarket. Remarketing firms may
be entitled under agreements that may be entered into with us to indemnification by us against certain civil liabilities, including liabilities
under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary course of business.
Certain underwriters may use this prospectus
and any accompanying prospectus supplement, if required, for offers and sales related to market-making transactions in the securities.
These underwriters may act as principal or agent in these transactions, and the sales will be made at prices related to prevailing market
prices at the time of sale. Any selling shareholders and underwriters involved in the sale of the securities may qualify as “underwriters”
within the meaning of Section 2(a)(11) of the Securities Act. In addition, the underwriters’ commissions, discounts or concessions
may qualify as underwriters’ compensation under the Securities Act and the rules of the Financial Industry Regulatory Authority, Inc.,
or FINRA. Selling shareholders who are “underwriters” within the meaning of Section 2(a)(11) of the Securities Act will
be subject to the prospectus delivery requirements of the Securities Act.
Common Shares sold pursuant to the registration
statement of which this prospectus is a part will be authorized for listing and trading on The Nasdaq Stock Market. The applicable prospectus
supplement, if required, will contain information, where applicable, as to any other listing, if any, on The Nasdaq Stock Market or any
securities market or other securities exchange of the securities covered by the prospectus supplement. Underwriters may make a market
in our Common Shares, but will not be obligated to do so and may discontinue any market making at any time without notice. We can make
no assurance as to the liquidity of or the existence, development or maintenance of trading markets for any of the securities.
In order to facilitate the offering of the securities,
certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the
securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the
offering of more securities than we sold to them. In these circumstances, these persons would cover such over-allotments or short positions
by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain
the price of the securities by bidding for or purchasing the applicable security in the open market or by imposing penalty bids, whereby
selling concessions allowed to dealers participating in the offering may be reclaimed if the securities sold by them are repurchased
in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the
securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.
The underwriters, dealers and agents may engage in other transactions
with us, or perform other services for us, in the ordinary course of their business.
The selling shareholders also may resell all
or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that
rule, or Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the
criteria and conform to the requirements of those provisions.
Broker-dealers engaged by the selling shareholders
may arrange for other broker-dealers to participate in sales. If the selling shareholders effect such transactions by selling Common
Shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the
form of discounts, concessions or commissions from the selling shareholders or commissions from purchasers of the Common Shares for whom
they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set
forth in a supplement to this prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission
in compliance with FINRA Rule 5110.
In connection with sales of the Common Shares
or otherwise, the selling shareholders may enter into hedging transactions with broker-dealers or other financial institutions, which
may in turn engage in short sales of the Common Shares in the course of hedging in positions they assume. The selling shareholders may
also sell Common Shares short and if such short sale shall take place after the effective date of this registration statement, the selling
shareholders may deliver Common Shares covered by this prospectus to close out short positions and to return borrowed shares in connection
with such short sales. The selling shareholders may also loan or pledge Common Shares to broker-dealers that in turn may sell such shares,
to the extent permitted by applicable law. The selling shareholders may also enter into option or other transactions with broker-dealers
or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer
or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such transaction, if required). Notwithstanding the foregoing,
the selling shareholders have been advised that they may not use shares registered on this registration statement to cover short sales
of Common Shares made prior to the effective date of the registration statement, of which this prospectus forms a part.
The selling shareholders may, from time to time,
pledge or grant a security interest in some or all of the Common Shares owned by them and, if they default in the performance of their
secured obligations, the pledgees or secured parties may offer and sell the Common Shares from time to time pursuant to this prospectus
or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act, amending, if
necessary, the list of selling shareholders to include the pledgee, transferee or other successors in interest as selling shareholders
under this prospectus. The selling shareholders also may transfer and donate the Common Shares in other circumstances in which case the
transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
Each selling shareholder has informed the Company
that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with
any person to distribute the Common Shares. Upon the Company being notified in writing by a selling shareholders that any material arrangement
has been entered into with a broker-dealer for the sale of Common Shares through a block trade, special offering, exchange distribution
or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to
Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling shareholders and of the participating
broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the Common Shares were sold, (iv) the
commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did
not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other
facts material to the transaction.
Under the securities laws of some states, the
Common Shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the Common
Shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
There can be no assurance that any selling shareholders
will sell any or all of the Common Shares registered pursuant to the shelf registration statement, of which this prospectus forms a part.
Each selling shareholder and any other person
participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the Common
Shares by the selling shareholders and any other participating person. Regulation M may also restrict the ability of any person engaged
in the distribution of the Common Shares to engage in market-making activities with respect to the Common Shares. All of the foregoing
may affect the marketability of the Common Shares and the ability of any person or entity to engage in market-making activities with
respect to the Common Shares.
We will pay all expenses of the registration
of the Common Shares pursuant to the Purchase Agreements, including, without limitation, SEC filing fees and expenses of compliance with
state securities or “blue sky” laws; provided, however, that each selling shareholder will pay all underwriting discounts
and selling commissions, if any. We will indemnify the selling shareholders against certain liabilities, including some liabilities under
the Securities Act, in accordance with the Purchase Agreements, or the selling shareholders will be entitled to contribution. We may
be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act, that may arise
from any written information furnished to us by the selling shareholders specifically for use in this prospectus, in accordance with
the Purchase Agreements, or we may be entitled to contribution.
DESCRIPTION OF COMMON SHARES
AND SPECIAL SHARES
Our authorized capital consists of (a) an
unlimited number of Common Shares, (b) an unlimited number of preferred shares, issuable in series, (c) 5,000,000 Class A
Special Shares, (d) 10,000,000 Class B Special Shares, (e) 10,000,000 Class C Special Shares, (f) 20,000,000
Class D Special Shares, (g) 20,000,000 Class E Special Shares, (h) 20,000,000 Class F Special Shares, (i) 25,000,000
Class G Special Shares, (j) 25,000,000 Class H Special Shares, (k) 500,000 Class I Special Shares, and (l) 741,000
Class J Special Shares, each without par value.
The following summaries of certain provisions
of our Common Shares and Special Shares do not purport to be complete. You should refer to the section of this prospectus entitled “Certain
Important Provisions of The Notice of Articles and Articles and the BCBCA”, “Ownership and Exchange Controls” and our
notice of articles and articles, both of which are included as exhibits to the registration statement of which this prospectus is a part.
The summaries below are also qualified by provisions of applicable law.
Common Shares
As of September 30, 2022, there were 265,529,989
Common Shares issued and outstanding. As of September 30, 2022, we had approximately 125 record holders of our Common Shares.
General
Holders of Common Shares are entitled to one
(1) vote per share on all matters upon which holders of shares are entitled to vote. Subject to the Business Corporations Act
(British Columbia), or the BCBCA, and prior rights of the holders of preferred shares and any other class ranking senior to the Common
Shares, the holders of Common Shares are entitled to receive dividends as, if and when declared by the board of directors. Subject to
the prior rights of the holders of Special Shares and preferred shares, and any other class ranking senior to the Common Shares, in the
event of our liquidation, dissolution or winding-up or other distribution of our assets among our shareholders, the holders of Common
Shares will be entitled to share pro rata in the distribution of the balance of our assets. Holders of Common Shares will have no pre-emptive
or conversion or exchange rights or other subscription rights. There are no redemption, retraction, purchase for cancellation or surrender
provisions or sinking or purchase fund provisions applicable to Common Shares. There is no provision in the notice of articles and articles
requiring holders of Common Shares to contribute additional capital, or permitting or restricting the issuance of additional securities
of authorized share capital or any other material restrictions. The special rights or restrictions attached to Common Shares are subject
to and may be adversely affected by, the rights attached to any series of preferred shares that the board of directors may designate
in the future.
Transfer Agent and Registrar
The transfer agent for our Common Shares is Continental Stock Transfer &
Trust Company.
Stock Exchange Listing
Our Common Shares are listed for trading on the Nasdaq Global Select
Market under the symbol “TMC”.
Special Shares
As of September 30, 2022, there were issued and
outstanding (a) 4,999,973 Class A Special Shares, (b) 9,999,853 Class B Special Shares, (c) 9,999,853 Class C
Special Shares, (d) 19,999,855 Class D Special Shares, (e) 19,999,855 Class E Special Shares, (f) 19,999,855
Class F Special Shares, (g) 24,999,860 Class G Special Shares, (h) 24,999,860 Class H Special Shares, (i) 500,000
Class I Special Shares and (j) 741,000 Class J Special Shares.
Holders of Special Shares are not entitled to
any voting rights, except as required under the BCBCA in certain circumstances, and are not entitled to receive dividends. Subject to
the prior rights of the holders of preferred shares, in the event of our liquidation, dissolution or winding-up or other distribution
of our assets among our shareholders, the holders of Special Shares will be entitled to receive an amount equal to $0.00000000001 per
Special Share, or the Redemption Price. Holders of Special Shares have no pre-emptive or exchange rights or other subscription rights.
There is no provision in our notice of articles and articles requiring holders of Special Shares to contribute additional capital. The
special rights or restrictions attached to Special Shares are subject to and may be adversely affected by, the rights attached to any
series of preferred shares that the board of directors may designate in the future. Our notice of articles and articles provide that
the Special Shares may not be, directly or indirectly, sold, transferred, assigned, pledged, mortgaged, exchanged, hypothecated or encumbered
without the prior approval of the board of directors, which shall only be given under certain circumstances specified in our notice or
articles and articles, referred to herein as a Permitted Transfer. Notwithstanding the foregoing, any holder of Special Shares may, at
any time, provide an irrevocable direction and agreement in favor of us that a proposed transfer shall be deemed not to be a Permitted
Transfer and that irrevocable direction may provide that any other Permitted Transfer shall require that the transferee provide an identical
type of irrevocable direction and agreement.
Subject to the provisions of the BCBCA, any Special
Shares then outstanding shall be redeemed by us without any action on the part of the holders of Special Shares (i) at any time
after the 15th year anniversary of the original issue date of the Special Shares or (ii) at any time after a Change of Control,
in each case at the Redemption Price. For the purposes of our notice of articles and articles, “Change of Control” shall
mean any transaction or series of related transactions (x) under which any person or one or more persons that are affiliates or
that are acting as a “group” (as defined in Section 13(d)(3) of the Exchange Act), directly or indirectly, acquires
or otherwise purchases (i) the Company or (ii) all or a material portion of assets, businesses or our Equity Securities (as
defined below) or (y) that results, directly or indirectly, in our shareholders as of immediately prior to such transaction holding,
in the aggregate, less than 50% of the voting Equity Securities immediately after the consummation thereof (excluding, for the avoidance
of doubt, any Special Shares and the Common Shares issuable upon conversion thereof) (in the case of each of clause (x) and (y),
whether by amalgamation, merger, consolidation, arrangement, tender offer, recapitalization, purchase or issuance of Equity Securities
or otherwise), and “Equity Securities” shall refer to Common Shares, the preferred shares, Special Shares or any other class
of shares or series thereof in our capital or similar interest us (including any stock appreciation, phantom stock, profit participation
or similar rights), and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable therefor.
The Special Shares will automatically convert
into Common Shares on a one (1) for one (1) basis (unless adjusted as described below) upon the occurrence of the following
events:
| ● | in
the case of the Class A Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $15.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$15.00 per Common Share; |
| ● | in
the case of the Class B Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $25.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$25.00 per Common Share; |
| ● | in
the case of the Class C Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $35.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$35.00 per Common Share; |
| ● | in
the case of the Class D Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $50.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$50.00 per Common Share; |
| ● | in
the case of the Class E Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $75.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$75.00 per Common Share; |
| ● | in
the case of the Class F Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $100.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$100.00 per Common Share; |
| ● | in
the case of the Class G Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $150.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$150.00 per Common Share; |
| ● | in
the case of the Class H Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $200.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$200.00 per Common Share; |
| ● | in
the case of the Class I Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $50.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$50.00 per Common Share; and |
| ● | in
the case of the Class J Special Shares, if (a) on any twenty (20) trading days
within any thirty (30) trading day period, the Common Shares trade on the principal securities
exchange or securities market on which Common Shares are then traded for a price that is
greater than or equal to $12.00, or (b) there occurs any transaction resulting in a
Change of Control with a valuation of the Common Shares that is greater than or equal to
$12.00 per Common Share. |
No fractional Common Share will be issued upon
the conversion of the Special Shares and no payment will be made to the holders of Special Shares in lieu thereof. Rather, the holders
of Special Shares shall be entitled to the number of Common Shares determined by rounding the entitlement down to the nearest whole number.
In the event that the Common Shares are at any
time sub-divided, consolidated, converted or exchanged for a greater or lesser number of shares of the same or another class, then appropriate
adjustments will be made in the rights and conditions attaching to the Special Shares so as to preserve in all respects the benefits
of the holders of Special Shares.
In the event of any merger, amalgamation, consolidation,
arrangement, reorganization or other business combination involving the Company with another entity, other than a Change of Control,
the holders of Special Shares will be entitled to receive, on conversion, such securities or other property as if on the effective date
of the event they were registered holders of the number of Common Shares which such holders of Special Shares were entitled to receive
upon conversion of their Special Shares.
DESCRIPTION OF PREFERRED SHARES
The
following description of our preferred shares and the description of the terms of any particular series of preferred shares that we choose
to issue hereunder are not complete. These descriptions are qualified in their entirety by reference to notice of articles and
articles, both of which are included as exhibits to the registration statement of which this prospectus is a part.
We are authorized to
issue an unlimited number of preferred shares, issuable in series. Accordingly, the board of directors is authorized, without shareholder
approval but subject to the provisions of the BCBCA and notice of articles, to determine the maximum number of shares of each series,
create an identifying name for each series and attach such special rights or restrictions, including dividend, liquidation and voting
rights, as the board of directors may determine, and such special rights or restrictions, including dividend, liquidation and voting
rights, may be superior to those of the Common Shares. The issuance of preferred shares, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or discouraging
potential acquisition proposals and might adversely affect the market price of the Common Shares and the voting and other rights of the
holders of Common Shares. We have no current plan to issue any preferred shares.
Transfer Agent and Registrar
The transfer agent and registrar for our
preferred shares will be set forth in the applicable prospectus supplement.
DESCRIPTION OF DEBT SECURITIES
The following description, together with the
additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the debt
securities that we may offer under this prospectus. While the terms we have summarized below will apply generally to any future debt
securities we may offer pursuant to this prospectus, we will describe the particular terms of any debt securities that we may offer in
more detail in the applicable prospectus supplement. If we so indicate in a prospectus supplement, the terms of any debt securities offered
under such prospectus supplement may differ from the terms we describe below, and to the extent the terms set forth in a prospectus supplement
differ from the terms described below, the terms set forth in the prospectus supplement shall control.
We may sell from time to time, in one or more
offerings under this prospectus, debt securities, which may be senior or subordinated. We will issue any such senior debt securities
under a senior indenture that we will enter into with a trustee to be named in the senior indenture. We will issue any such subordinated
debt securities under a subordinated indenture, which we will enter into with a trustee to be named in the subordinated indenture. We
have filed forms of these documents as exhibits to the registration statement, of which this prospectus is a part. We use the term “indentures”
to refer to either the senior indenture or the subordinated indenture, as applicable. The indentures will be qualified under the Trust
Indenture Act of 1939, as in effect on the date of the indenture. We use the term “debenture trustee” to refer to either
the trustee under the senior indenture or the trustee under the subordinated indenture, as applicable.
The following summaries of material provisions
of the senior debt securities, the subordinated debt securities and the indentures are subject to, and qualified in their entirety by
reference to, all the provisions of the indenture applicable to a particular series of debt securities.
General
Each indenture provides that debt securities
may be issued from time to time in one or more series and may be denominated and payable in foreign currencies or units based on or relating
to foreign currencies. Neither indenture limits the amount of debt securities that may be issued thereunder, and each indenture provides
that the specific terms of any series of debt securities shall be set forth in, or determined pursuant to, an authorizing resolution
and/or a supplemental indenture, if any, relating to such series.
We will describe in each prospectus supplement the following terms
relating to a series of debt securities:
| ● | the
title or designation; |
| ● | the
aggregate principal amount and any limit on the amount that may be issued; |
| ● | the
currency or units based on or relating to currencies in which debt securities of such series
are denominated and the currency or units in which principal or interest or both will or
may be payable; |
| ● | whether
we will issue the series of debt securities in global form, the terms of any global securities
and who the depositary will be; |
| ● | the
maturity date and the date or dates on which principal will be payable; |
| ● | the
interest rate, which may be fixed or variable, or the method for determining the rate and
the date interest will begin to accrue, the date or dates interest will be payable and the
record dates for interest payment dates or the method for determining such dates; |
| ● | whether
or not the debt securities will be secured or unsecured, and the terms of any secured debt; |
| ● | the
terms of the subordination of any series of subordinated debt; |
| ● | the
place or places where payments will be payable; |
| ● | our
right, if any, to defer payment of interest and the maximum length of any such deferral period; |
| ● | the
date, if any, after which, and the price at which, we may, at our option, redeem the series
of debt securities pursuant to any optional redemption provisions; |
| ● | the
date, if any, on which, and the price at which we are obligated, pursuant to any mandatory
sinking fund provisions or otherwise, to redeem, or at the holder’s option to purchase,
the series of debt securities; |
| ● | whether
the indenture will restrict our ability to pay dividends, or will require us to maintain
any asset ratios or reserves; |
| ● | whether we will be restricted from incurring any additional
indebtedness; |
| ● | a discussion of any material or special U.S. federal income
tax considerations applicable to a series of debt securities; |
| ● | the denominations in which we will
issue the series of debt securities, if other than denominations of $1,000 and any integral
multiple thereof; and |
| ● | any other specific terms, preferences, rights or limitations
of, or restrictions on, the debt securities. |
We may issue debt securities that provide for
an amount less than their stated principal amount to be due and payable upon declaration of acceleration of their maturity pursuant to
the terms of the indenture. We will provide you with information on the federal income tax considerations and other special considerations
applicable to any of these debt securities in the applicable prospectus supplement.
Conversion or Exchange Rights
We will set forth in the prospectus supplement
the terms, if any, on which a series of debt securities may be convertible into or exchangeable for our common shares or our other securities.
We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include
provisions pursuant to which the number of our common shares or our other securities that the holders of the series of debt securities
receive would be subject to adjustment.
Consolidation, Merger or Sale; No Protection in Event of a Change
of Control or Highly Leveraged Transaction
The indentures do not contain any covenant that
restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets.
However, any successor to or acquirer of such assets must assume all of our obligations under the indentures or the debt securities,
as appropriate.
Unless we state otherwise in the applicable prospectus
supplement, the debt securities will not contain any provisions that may afford holders of the debt securities protection in the event
we have a change of control or in the event of a highly leveraged transaction (whether or not such transaction results in a change of
control), which could adversely affect holders of debt securities.
Events of Default Under the Indenture
The following are events of default under the indentures with respect
to any series of debt securities that we may issue:
| ● | if we fail to pay interest when due and our failure continues
for 90 days and the time for payment has not been extended or deferred; |
| ● | if we fail to pay the principal, or premium, if any, when due
and the time for payment has not been extended or delayed; |
| ● | if we fail to observe or perform
any other covenant set forth in the debt securities of such series or the applicable indentures,
other than a covenant specifically relating to and for the benefit of holders of another
series of debt securities, and our failure continues for 90 days after we receive written
notice from the debenture trustee or holders of not less than a majority in aggregate principal
amount of the outstanding debt securities of the applicable series; and |
| ● | if specified events of bankruptcy, insolvency or reorganization
occur as to us. |
No event of default with respect to a particular
series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization) necessarily constitutes an event
of default with respect to any other series of debt securities. The occurrence of an event of default may constitute an event of default
under any bank credit agreements we may have in existence from time to time. In addition, the occurrence of certain events of default
or an acceleration under the indenture may constitute an event of default under certain of our other indebtedness outstanding from time
to time.
If an event of default with respect to debt securities
of any series at the time outstanding occurs and is continuing, then the trustee or the holders of not less than a majority in principal
amount of the outstanding debt securities of that series may, by a notice in writing to us (and to the debenture trustee if given by
the holders), declare to be due and payable immediately the principal (or, if the debt securities of that series are discount securities,
that portion of the principal amount as may be specified in the terms of that series) of and premium and accrued and unpaid interest,
if any, on all debt securities of that series. Before a judgment or decree for payment of the money due has been obtained with respect
to debt securities of any series, the holders of a majority in principal amount of the outstanding debt securities of that series (or,
at a meeting of holders of such series at which a quorum is present, the holders of a majority in principal amount of the debt securities
of such series represented at such meeting) may rescind and annul the acceleration if all events of default, other than the non-payment of
accelerated principal, premium, if any, and interest, if any, with respect to debt securities of that series, have been cured or waived
as provided in the applicable indenture (including payments or deposits in respect of principal, premium or interest that had become
due other than as a result of such acceleration). We refer you to the prospectus supplement relating to any series of debt securities
that are discount securities for the particular provisions relating to acceleration of a portion of the principal amount of such discount
securities upon the occurrence of an event of default.
Subject to the terms of the indentures, if an
event of default under an indenture shall occur and be continuing, the debenture trustee will be under no obligation to exercise any
of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities,
unless such holders have offered the debenture trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding
debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available
to the debenture trustee, or exercising any trust or power conferred on the debenture trustee, with respect to the debt securities of
that series, provided that:
| ● | the direction so given by the holder is not in conflict with
any law or the applicable indenture; and |
| ● | subject to its duties under the
Trust Indenture Act, the debenture trustee need not take any action that might involve it
in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. |
A holder of the debt securities of any series
will only have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies
if:
| ● | the holder previously has given written notice to the debenture
trustee of a continuing event of default with respect to that series; |
| ● | the holders of at least a majority
in aggregate principal amount of the outstanding debt securities of that series have made
written request, and such holders have offered reasonable indemnity to the debenture trustee
to institute the proceeding as trustee; and |
| ● | the debenture trustee does not institute
the proceeding, and does not receive from the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series (or at a meeting of holders of such
series at which a quorum is present, the holders of a majority in principal amount of the
debt securities of such series represented at such meeting) other conflicting directions
within 60 days after the notice, request and offer. |
These limitations do not apply to a suit instituted
by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on, the debt securities.
We will periodically file statements with the applicable debenture
trustee regarding our compliance with specified covenants in the applicable indenture.
Modification of Indenture; Waiver
The debenture trustee and we may change the applicable
indenture without the consent of any holders with respect to specific matters, including:
| ● | to fix any ambiguity, defect or inconsistency in the indenture;
and |
| ● | to change anything that does not
materially adversely affect the interests of any holder of debt securities of any series
issued pursuant to such indenture. |
In addition, under the indentures, the rights
of holders of a series of debt securities may be changed by us and the debenture trustee with the written consent of the holders of at
least a majority in aggregate principal amount of the outstanding debt securities of each series (or, at a meeting of holders of such
series at which a quorum is present, the holders of a majority in principal amount of the debt securities of such series represented
at such meeting) that is affected. However, the debenture trustee and we may make the following changes only with the consent of each
holder of any outstanding debt securities affected:
| ● | extending the fixed maturity of the series of debt securities; |
| ● | reducing the principal amount, reducing
the rate of or extending the time of payment of interest, or any premium payable upon the
redemption of any debt securities; |
| ● | reducing the principal amount of discount securities payable
upon acceleration of maturity; |
| ● | making the principal of or premium or interest on any debt security
payable in currency other than that stated in the debt security; or |
| ● | reducing the percentage of debt securities, the holders of which
are required to consent to any amendment or waiver. |
Except for certain specified provisions, the
holders of at least a majority in principal amount of the outstanding debt securities of any series (or, at a meeting of holders of such
series at which a quorum is present, the holders of a majority in principal amount of the debt securities of such series represented
at such meeting) may on behalf of the holders of all debt securities of that series waive our compliance with provisions of the indenture.
The holders of a majority in principal amount of the outstanding debt securities of any series may on behalf of the holders of all the
debt securities of such series waive any past default under the indenture with respect to that series and its consequences, except a
default in the payment of the principal of, premium or any interest on any debt security of that series or in respect of a covenant or
provision, which cannot be modified or amended without the consent of the holder of each outstanding debt security of the series affected;
provided, however, that the holders of a majority in principal amount of the outstanding debt securities of any series may rescind an
acceleration and its consequences, including any related payment default that resulted from the acceleration.
Discharge
Each indenture provides that we can elect to
be discharged from our obligations with respect to one or more series of debt securities, except for obligations to:
| ● | the transfer or exchange of debt securities of the series; |
| ● | replace stolen, lost or mutilated debt securities of the series; |
| ● | maintain paying agencies; |
| ● | hold monies for payment in trust; |
| ● | compensate and indemnify the trustee; and |
| ● | appoint any successor trustee. |
In order to exercise our rights to be discharged
with respect to a series, we must deposit with the trustee money or government obligations sufficient to pay all the principal of, the
premium, if any, and interest on, the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series
only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations
of $1,000 and any integral multiple thereof. The indentures provide that we may issue debt securities of a series in temporary or permanent
global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company or another depositary
named by us and identified in a prospectus supplement with respect to that series.
At the option of the holder, subject to the terms
of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of
the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination
and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the
limitations applicable to global securities set forth in the applicable prospectus supplement, holders of the debt securities may present
the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed
if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated
by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange or in the
applicable indenture, we will make no service charge for any registration of transfer or exchange, but we may require payment of any
taxes or other governmental charges.
We will name in the applicable prospectus supplement
the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities.
We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the
debt securities of each series.
If we elect to redeem the debt securities of any series, we will not
be required to:
| ● | issue, register the transfer of,
or exchange any debt securities of that series during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of any debt securities
that may be selected for redemption and ending at the close of business on the day of the
mailing; or |
| ● | register the transfer of or exchange
any debt securities so selected for redemption, in whole or in part, except the unredeemed
portion of any debt securities we are redeeming in part. |
Information Concerning the Debenture
Trustee
The debenture trustee,
other than during the occurrence and continuance of an event of default under the applicable indenture, undertakes to perform only those
duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the debenture trustee
under such indenture must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the debenture trustee is under no obligation to exercise any of the powers given it by the indentures at the
request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities
that it might incur.
Payment and Paying Agents
Unless we otherwise
indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest payment
date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business
on the regular record date for the interest.
We will pay principal
of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated by us, except
that unless we otherwise indicate in the applicable prospectus supplement, will we make interest payments by check which we will mail
to the holder. Unless we otherwise indicate in a prospectus supplement, we will designate the corporate trust office of the debenture
trustee in the City of New York as our sole paying agent for payments with respect to debt securities of each series. We will name in
the applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series.
We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to
a paying agent or the debenture trustee for the payment of the principal of or any premium or interest on any debt securities which remains
unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the
holder of the security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the
debt securities will be governed by and construed in accordance with the laws of the State of New York, except to the extent that the
Trust Indenture Act is applicable.
Subordination of Subordinated Debt
Securities
Our obligations pursuant
to any subordinated debt securities will be unsecured and will be subordinate and junior in priority of payment to certain of our other
indebtedness to the extent described in a prospectus supplement. The subordinated indenture does not limit the amount of senior indebtedness
we may incur. It also does not limit us from issuing any other secured or unsecured debt.
DESCRIPTION
OF WARRANTS
General
We may issue warrants
to purchase our common shares, preferred shares and/or debt securities in one or more series together with other securities or separately,
as described in the applicable prospectus supplement. Below is a description of certain general terms and provisions of the warrants
that we may offer. Particular terms of the warrants will be described in the warrant agreements and the prospectus supplement relating
to the warrants.
The applicable prospectus supplement will
contain, where applicable, the following terms of and other information relating to the warrants:
| ● | the specific designation and aggregate number of, and the price
at which we will issue, the warrants; |
| ● | the currency or currency units in which the offering price,
if any, and the exercise price are payable; |
| ● | the designation, amount and terms of the securities purchasable
upon exercise of the warrants; |
| ● | if applicable, the exercise price
for our common shares and the number of our common shares to be received upon exercise of
the warrants; |
| ● | if applicable, the exercise price
for our preferred shares, the number of preferred shares to be received upon exercise, and
a description of that series of our preferred shares; |
| ● | if applicable, the exercise price
for our debt securities, the amount of debt securities to be received upon exercise, and
a description of that series of debt securities; |
| ● | the date on which the right to exercise
the warrants will begin and the date on which that right will expire or, if you may not continuously
exercise the warrants throughout that period, the specific date or dates on which you may
exercise the warrants; |
| ● | whether the warrants will be issued
in fully registered form or bearer form, in definitive or global form or in any combination
of these forms, although, in any case, the form of a warrant included in a unit will correspond
to the form of the unit and of any security included in that unit; |
| ● | any applicable material U.S. federal income tax consequences; |
| ● | the identity of the warrant agent
for the warrants and of any other depositaries, execution or paying agents, transfer agents,
registrars or other agents; |
| ● | the proposed listing, if any, of
the warrants or any securities purchasable upon exercise of the warrants on any securities
exchange; |
| ● | if applicable, the date from and
after which the warrants and the common shares, preferred shares and/or debt securities will
be separately transferable; |
| ● | if applicable, the minimum or maximum amount of the warrants
that may be exercised at any one time; |
| ● | information with respect to book-entry procedures, if any; |
| ● | the anti-dilution provisions of the warrants, if any; |
| ● | any redemption or call provisions; |
| ● | whether the warrants may be sold separately or with other securities
as parts of units; |
| ● | the governing law of the warrants; and |
| ● | any additional terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the warrants. |
The transfer agent and registrar for any
warrants we offer will be set forth in the applicable prospectus supplement.
Outstanding Warrants
Public Warrants
As of September 30, 2022, there were an aggregate
of 15,000,000 outstanding public warrants held of record by one holder, which entitle the holder to acquire Common Shares. Each whole
public warrant entitles the registered holder to purchase one Common Share at an exercise price of $11.50 per share, subject to adjustment
as discussed below, beginning on October 9, 2021. Pursuant to the warrant agreement, a warrant holder may exercise its warrants
only for a whole number of Common Shares. This means only a whole warrant may be exercised at a given time by a warrant holder. No fractional
warrants will be issued upon separation of the units, and only whole warrants will trade. Accordingly, unless you hold at least three
units, you will not be able to receive or trade a whole warrant. The warrants will expire on September 9, 2026, at 5:00 p.m.,
New York City time, or earlier upon redemption or liquidation.
We will not be obligated to deliver any Common
Shares pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement
under the Securities Act with respect to the Common Shares underlying the warrants is then effective and a prospectus relating thereto
is current, subject to our satisfying our obligations described below with respect to registration, or a valid exemption from registration
is available. No warrant will be exercisable and we will not be obligated to issue a Common Share upon exercise of a 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 warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant
may have no value and expire worthless. In no event will we be required to net cash settle any warrant. In the event that a registration
statement is not effective for the exercised 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.
Redemptions
Once the warrants become exercisable, we may call the warrants for
redemption:
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon not less than 30 days’ prior written notice of redemption
to each warrant holder; and |
| ● | if, and only if, the closing price
of the Common Shares equals or exceeds $18.00 per share (as adjusted for share splits, share
capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days
within a 30-trading day period ending on the third trading day prior to the date on which
notice of the redemption is given to the warrant holder. |
If and when the warrants become redeemable by
us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable
state securities laws.
We have established the last of the redemption
criterion discussed above to prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise
price. If the foregoing conditions are satisfied and we issue a notice of redemption of the warrants, each warrant holder will be entitled
to exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the Common Shares may fall below the
$18.00 redemption trigger price (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like)
as well as the $11.50 (for whole shares) warrant exercise price after the redemption notice is issued.
Redemption Procedures and Cashless Exercise
If we call the warrants for redemption when the
price per share of Common Shares equals or exceeds $18.00, our management will have the option to require any holder that wishes to exercise
his, her or its warrant to do so on a “cashless basis” beginning on the third trading day prior to the date on which
notice of the redemption is given to the holders of warrants. In determining whether to require all holders to exercise their warrants
on a “cashless basis,” our management will consider, among other factors, our cash position, the number of warrants that
are outstanding and the dilutive effect on our shareholders of issuing the maximum number of Common Shares issuable upon the exercise
of our warrants. If our management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering
their warrants for that number of shares equal to the lesser of (A) the quotient obtained by dividing (x) the product of the
number of Common Shares underlying the warrants, multiplied by the excess of the “fair market value” (defined below) over
the exercise price of the warrants by (y) the fair market value and (B) 0.365. The “fair market value” will mean
the average closing price of the Common Shares for the ten (10) trading days ending on the third trading day prior to
the date on which the notice of redemption is sent to the holders of warrants. If our management takes advantage of this option, the
notice of redemption will contain the information necessary to calculate the number of Common Shares to be received upon exercise of
the warrants, including the “fair market value” in such case. Requiring a cashless exercise in this manner will reduce the
number of shares to be issued and thereby lessen the dilutive effect of a warrant redemption. We believe this feature is an attractive
option to us if we do not need the cash from the exercise of the warrants after our initial business combination. If we call our warrants
for redemption and our management team does not take advantage of this option, the permitted transferees of Sustainable Opportunities
Holdings LLC would still be entitled to exercise their private placement warrants for cash or on a cashless basis using the same formula
described above that other warrant holders would have been required to use had all warrant holders been required to exercise their warrants
on a cashless basis, as described in more detail below.
A holder of a warrant may notify us in writing
in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent
that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual
knowledge, would beneficially own in excess of 4.9% or 9.8% (as specified by the holder) of the Common Shares issued and outstanding
immediately after giving effect to such exercise.
Anti-dilution Adjustments
If the number of outstanding Common Shares is
increased by a capitalization or share dividend payable in Common Shares, or by a split-up of common shares or other similar event,
then, on the effective date of such capitalization or share dividend, split-up or similar event, the number of Common Shares issuable
on exercise of each warrant will be increased in proportion to such increase in the outstanding common shares. A rights offering made
to all or substantially all holders of common shares entitling holders to purchase Common Shares at a price less than the “historical
fair market value” (as defined below) will be deemed a share dividend of a number of Common Shares equal to the product of (i) the
number of Common Shares actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering
that are convertible into or exercisable for Common Shares) and (ii) one minus the quotient of (x) the price per Common Shares
paid in such rights offering and (y) the historical fair market value. For these purposes, (i) if the rights offering is for
securities convertible into or exercisable for Class A ordinary shares, in determining the price payable for Common Shares, there
will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion
and (ii) “historical fair market value” means the volume weighted average price of Common Shares as reported during
the 10 trading day period ending on the trading day prior to the first date on which the Common Shares trade on the applicable
exchange or in the applicable market, regular way, without the right to receive such rights.
In addition, if we, at any time while the warrants
are outstanding and unexpired, pay a dividend or make a distribution in cash, securities or other assets to all or substantially
all the holders of Common Shares on account of such shares (or other securities into which the warrants are convertible), other than
(a) as described above, (b) any cash dividends or cash distributions which, when combined on a per share basis with all other
cash dividends and cash distributions paid on the Common Shares during the 365-day period ending on the date of declaration
of such dividend or distribution does not exceed $0.50 (as adjusted to appropriately reflect any other adjustments and excluding
cash dividends or cash distributions that resulted in an adjustment to the exercise price or to the number of Common Shares issuable
on exercise of each warrant) but only with respect to the amount of the aggregate cash dividends or cash distributions equal to or less
than $0.50 per share, or (c) to satisfy the redemption rights of the holders of Common Shares in connection with the Business
Combination, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the
amount of cash and/or the fair market value of any securities or other assets paid on each share of Common Shares in respect of such
event.
If the number of outstanding Common Shares is
decreased by a consolidation, combination, reverse share split or reclassification of share of Common Shares or other similar event,
then, on the effective date of such consolidation, combination, reverse share split, reclassification or similar event, the number of
Common Shares issuable on exercise of each warrant will be decreased in proportion to such decrease in outstanding Common Shares.
Whenever the number of Common Shares purchasable
upon the exercise of the warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant
exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of Common Shares
purchasable upon the exercise of the warrants immediately prior to such adjustment and (y) the denominator of which will be the
number of Common Shares so purchasable immediately thereafter.
In case of any reclassification or reorganization
of the outstanding Common Shares (other than those described above or that solely affects the par value of such Common Shares), or in
the case of any merger or consolidation of with or into another company (other than a consolidation or merger in which we are the continuing
company and that does not result in any reclassification or reorganization of our outstanding Common Shares), or in the case of any sale
or conveyance to another company or entity of the assets or other property of us as an entirety or substantially as an entirety in connection
with which we are dissolved, the holders of the warrants will thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in the warrants and in lieu of the Common Shares immediately theretofore purchasable and receivable
upon the exercise of the rights represented thereby, the kind and amount of Common Shares or other securities or property (including
cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or
transfer, that the holder of the warrants would have received if such holder had exercised their warrants immediately prior to such event.
If less than 70% of the consideration receivable by the holders of Common Shares in such a transaction is payable in the form of Common
Shares in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market,
or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises
the warrant within thirty (30) days following public disclosure of such transaction, the warrant exercise price will be reduced
as specified in the warrant agreement based on the Black-Scholes value (as defined in the warrant agreement) of the warrant. The
purpose of such exercise price reduction is to provide additional value to holders of the warrants when an extraordinary transaction
occurs during the exercise period of the warrants pursuant to which the holders of the warrants otherwise do not receive the full potential
value of the warrants.
The warrants are issued in registered form under
a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides
that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision
or correct any mistake, including to conform the provisions of the warrant agreement to the description of the terms of the warrants
and the warrant agreement set forth in SOAC’s prospectus for its initial public offering, but requires the approval by the holders
of at least 50% of the then outstanding public warrants to make any change that adversely affects the interests of the registered holders.
You should review a copy of the warrant agreement, which is filed as an exhibit to the registration statement of which this prospectus
is a part, for a complete description of the terms and conditions applicable to the warrants.
The warrant holders do not have the rights or
privileges of holders of Common Shares and any voting rights until they exercise their warrants and receive Common Shares.
No fractional warrants will be issued upon separation
of the units and only whole warrants will trade. If, upon exercise of the warrants, a holder would be entitled to receive a fractional
interest in a share, we will, upon exercise, round down to the nearest whole number the number of Common Shares to be issued to the warrant
holder.
Warrant Agent and Registrar
The warrant agent for our public warrants is Continental Stock Transfer &
Trust Company.
Stock Exchange Listing
Our public warrants are listed for trading on the Nasdaq Global Select
Market under the symbol “TMCWW”.
Private Placement Warrants
As of September 30, 2022, there were 9,500,000
private placement warrants outstanding held of record by 32 holders. The private placement warrants (including the Common Shares issuable
upon exercise of the private placement warrants) were not transferable, assignable or salable until October 9, 2021, except pursuant
to limited exceptions to our officers and directors and other persons or entities affiliates with the initial purchasers of the private
placement warrants, and they are not redeemable by us, except as described above when the prices per share of Common Shares equals or
exceeds $10.00, so long as they are held by SOAC or its permitted transferees. SOAC, or its permitted transferees, has the option to
exercise the private placement warrants on a cashless basis. Except as described below, the private placement warrants have terms and
provisions that are identical to those of the public warrants. If the private placement warrants are held by holders other than SOAC
or its permitted transferees, the private placement warrants will be redeemable by us and exercisable by the holders on the same basis
as the public warrants.
Except as described
above regarding redemption procedures and cashless exercise in respect of the public warrants, if holders of the private placement warrants
elect to exercise them on a cashless basis, they would pay the exercise price by surrendering his, her or its warrants for that 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 “fair market value” (defined below) over the exercise price of the warrants by (y) the
fair market value. The “fair market value” shall mean the average reported closing price of the Common Shares for the ten
(10) 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.
Allseas Warrant
On March 4, 2021,
DeepGreen issued a warrant to Allseas Group S.A., or the Allseas Warrant, which shall vest upon successful completion of a prescribed
project, referred to as the PMTS, and become exercisable for a maximum of 11,578,620 Common Shares (as it may be adjusted based on the
formula described therein) at a purchase price of $0.01 per share. A maximum of 11.6 million warrants to purchase common shares will
vest if the PMTS is completed by September 30, 2023, gradually decreasing to 5.8 million warrants to purchase Common Shares if PMTS
is completed after September 30, 2025. The Allseas Warrant shall vest only upon (and not before) the successful completion
of PMTS and will expire on September 30, 2026.
DESCRIPTION
OF UNITS
The following description,
together with the additional information we may include in any applicable prospectus supplements, summarizes the material terms and provisions
of the units that we may offer under this prospectus. While the terms summarized below will apply generally to any units that we may
offer, we will describe the particular terms of any series of units in more detail in the applicable prospectus supplement. If we indicate
in the prospectus supplement, the terms of any units offered under that prospectus supplement may differ from the terms described below.
Specific unit agreements will contain additional important terms and provisions and will be incorporated by reference as an exhibit to
the registration statement that includes this prospectus.
General
We may issue units consisting
of debt securities, common shares, preferred shares, or warrants, for the purchase of common shares and/or preferred shares in one or
more series, in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included
in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement
under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time
or at any time before a specified date.
We will describe in the applicable prospectus
supplement the terms of the series of units being offered, including:
| ● | the
designation and terms of the units and of the securities comprising the units, including
whether and under what circumstances those securities may be held or transferred separately; |
| ● | any
provisions of the governing unit agreement that differ from those described below; |
| ● | the
governing law of the unit agreement; and |
| ● | any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of
the securities comprising the units. |
We may issue units in such amounts and in
such numbers of distinct series as we determine.
The provisions described
in this section, as well as those described under “Description of Common Shares and Special Shares,” “Description of
Preferred Shares,” “Description of Debt Securities” and “Description of Warrants” will apply to each unit,
as applicable, and to any common share, preferred share or warrant included in each unit, as applicable.
Unit Agent
The name and address of the unit agent for
any units we offer will be set forth in the applicable prospectus supplement.
Enforceability of Rights by Holders of
Units
Each unit agent will
act solely as our agent under the applicable unit agreement and will not assume any obligation or relationship of agency or trust with
any holder of any unit. A single bank or trust company may act as unit agent for more than one series of units. A unit agent will have
no duty or responsibility in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility
to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the
related unit agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included
in the unit.
CERTAIN IMPORTANT PROVISIONS
OF THE NOTICE OF ARTICLES AND ARTICLES AND THE BCBCA
The following is a summary of certain important
provisions of our Articles and certain related sections of the BCBCA. Please note that this is only a summary and is not intended to
be exhaustive. This summary is subject to, and is qualified in its entirety by reference to, the provisions of our Articles and the BCBCA.
Stated Objects or Purposes
The notice of articles and articles do not contain
stated objects or purposes and do not place any limitations on the business that we may carry on.
Directors
Power to vote on matters in which a director
is materially interested. Under the BCBCA, a director or senior officer of a company is liable to account to the company for any profit
that accrues to the director or senior officer under or as a result of a contract or transaction in which the director or officer holds
a disclosable interest if the contract or transaction is material to the company, the company has entered, or proposes to enter, into
the contract or transaction, and either the director or senior officer has a material interest in the contract or transaction or is a
director or senior officer of, or has a material interest in, a person who has a material interest in the contract or transaction, unless
otherwise provided for in the BCBCA. A director or senior officer does not hold a disclosable interest in a contract or transaction if
the contract or transaction: (i) is an arrangement by way of security granted by the company for money loaned to, or obligations
undertaken by, the director or senior officer, or a person in whom the director or senior officer has a material interest, for the benefit
the company or for one of our affiliates’ benefit; (ii) relates to an indemnity or insurance permitted under the BCBCA; (iii) relates
to the remuneration of the director or senior officer in his or her capacity as director, officer, employee or agent of the company or
of one of its affiliates; (iv) relates to a loan to the company and the director or senior officer, or a person in whom the director
or senior officer has a material interest, is the guarantor of some or all of the loan; or (v) is with a company that is affiliated
to the company and the director or senior officer is also a director or senior officer of that company or an affiliate of that company.
A director or senior officer who holds a disclosable
interest may also be liable to account to the company for any profit that accrues to the director or senior officer under or as a result
of a contract or transaction in which the director or senior officer holds a disclosable interest, unless the contract or transaction
is: (i) approved by the other non-interested directors (unless all directors have a disclosable interest) or by a special resolution
of the shareholders, after the nature and extent of the disclosable interest has been disclosed to the directors or shareholders, as
applicable, or (ii) the contract or transaction was entered into before the individual became a director or senior officer, the
disclosable interest was disclosed to the other directors or shareholders and the director or senior officer who holds the disclosable
interest does not vote on any decision or resolution touching on the contract or transaction. Directors and senior officers are also
required to comply with certain other relevant provisions of the BCBCA regarding conflicts of interest. A director who holds such disclosable
interest in respect of any material contract or transaction into which the company has entered or propose to enter may be required to
absent himself or herself from the meeting while discussions and voting with respect to the matter are taking place.
Directors’ power to determine the remuneration
of directors. The remuneration of our directors, if any, may be determined by our directors subject to our Articles. The remuneration
may be in addition to any salary or other remuneration paid to any of our employees (including executive officers) who are also directors.
Number of shares required to be owned by a director.
Our Articles do not and the BCBCA does not provide that a director is required to hold any of Common Shares as a qualification for holding
his or her office.
Shareholder Meetings
Subject to applicable exchange requirements,
and the BCBCA, we will have to hold a general meeting of our shareholders at least once every year at a time and place determined by
our board of directors, provided that the meeting must not be held later than 15 months after the preceding annual general meeting, unless
an extension is obtained. A meeting of our shareholders may be held anywhere in or outside British Columbia. The board of directors may
also determine that shareholders may attend a meeting of shareholders by means of telephone, electronic or other communications facilities
that permit all participants to communicate with each other during the meeting.
A notice to convene a meeting, specifying the
date, time and location of the meeting, and, where a meeting is to consider special business, the general nature of the special business,
among other things, must be sent to each shareholder entitled to attend the meeting and to each director and the auditors, so long that
the company is a public company, not less than 21 days and no more than two months prior to the meeting, although, as a result of applicable
securities laws, the minimum time for notice is effectively longer in most circumstances. Under the BCBCA, shareholders entitled to notice
of a meeting may waive or reduce the period of notice for that meeting, provided applicable securities laws are met. The accidental omission
to send notice of any meeting of shareholders to, or the non-receipt of any notice by, any person entitled to notice does not invalidate
any proceedings at that meeting.
A quorum for meetings of shareholders is present
if at least two shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to vote at the meeting, are present
in person or represented by proxy at the meeting. If a quorum is not present within one half hour from the time set for the opening of
any meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place, unless the meeting
was requisitioned by shareholders, in which case the meeting is dissolved.
Holders of Common Shares are entitled to attend
and vote at meetings of our shareholders except meetings at which only holders another class of shares are entitled to vote. Except as
otherwise provided with respect to any particular series of preferred shares or Special Shares, and except as otherwise required by law,
the holders of our preferred shares and/or Special Shares are not entitled to vote at any meetings of our shareholders. Our directors
and officers, our auditor and any other persons invited by our directors or the chair of the meeting are entitled to attend any meeting
of our shareholders but will not be counted in the quorum or be entitled to vote at the meeting unless he or she is a shareholder or
proxyholder entitled to vote at the meeting.
Shareholder Proposals and Advance Notice Procedures
Under the BCBCA, qualified shareholders holding
at least either (i) 1% of the Common Shares or (ii) Common Shares with a fair market value in excess of CAD$2,000 may make
proposals for matters to be considered at the annual general meeting of shareholders. Such proposals must be sent to us in advance of
any proposed meeting by delivering a timely written notice in proper form to our registered office in accordance with the requirements
of the BCBCA. The notice must include information on the business the shareholder intends to bring before the meeting. To be a qualified
shareholder, a shareholder must currently be and have been a registered or beneficial owner of at least one Common Share for at least
two years before the date of signing the proposal.
Certain advance notice provisions with respect
to the election of our directors are included in the notice of articles and articles, referred to herein as the Advance Notice Provisions.
The Advance Notice Provisions are intended to: (i) facilitate orderly and efficient annual general meetings or, where the need arises,
special meetings; (ii) ensure that all shareholders receive adequate notice of board nominations and sufficient information with
respect to all nominees; and (iii) allow shareholders to register an informed vote. Only persons who are nominated in accordance
with the Advance Notice Provisions will be eligible for election as directors at any annual meeting of shareholders, or at any special
meeting of shareholders if one of the purposes for which the special meeting was called was the election of directors.
Under the Advance Notice Provisions, a shareholder
wishing to nominate a director would be required to provide us notice, in the prescribed form, within the prescribed time periods. These
time periods include, (i) in the case of an annual meeting of shareholders (including annual and special meetings), not less than
30 days prior to the date of the annual meeting of shareholders; provided, that if the first public announcement of the date of the annual
meeting of shareholders, referred to herein as the Notice Date, is less than 50 days before the meeting date, not later than the close
of business on the 10th day following the Notice Date; and (ii) in the case of a special meeting (which is not also an annual meeting)
of shareholders called for any purpose which includes electing directors, not later than the close of business on the 15th day following
the Notice Date.
These provisions could have the effect of delaying
until the next shareholder meeting the nomination of certain persons for director that are favored by the holders of a majority of our
outstanding voting securities.
Forum Selection
The notice of articles and articles include a
forum selection provision that provides that, unless we consent in writing to the selection of an alternative forum, the Supreme Court
of British Columbia, Canada and the appellate courts therefrom, are the sole and exclusive forum for (i) any derivative action or
proceeding brought on our behalf; (ii) any action or proceeding asserting a claim of breach of a fiduciary duty owed by any of our
directors, officers, or other employees to our company; (iii) any action or proceeding asserting a claim arising pursuant to any
provision of the BCBCA or the notice of articles and articles (as each may be amended from time to time); or (iv) any action or
proceeding asserting a claim otherwise related to the relationships among us, our affiliates and our respective shareholders, directors
and/or officers, but excluding claims related to our business or of such affiliates. The forum selection provision also provides that
our securityholders are deemed to have consented to personal jurisdiction in the Province of British Columbia and to service of process
on their counsel in any foreign action initiated in violation of the foregoing provisions. This provision does not apply to suits brought
to enforce any duty or liability created by the Securities Act or the Exchange Act, or the rules and regulations thereunder.
For claims brought under the Securities Act,
Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all claims brought to enforce
any duty or liability created by the Securities Act or the rules and regulations thereunder and the notice of articles and articles
provides that the federal district courts of the United States of America, to the fullest extent permitted by law, are the sole and exclusive
forum for resolving any complaint asserting a cause of action arising under the Securities Act, referred to herein as the Federal Forum
Provision. Application of the Federal Forum Provision means that suits brought by our shareholders to enforce any duty or liability created
by the Securities Act must be brought in federal court and cannot be brought in state court.
Section 27 of the Exchange Act creates exclusive
federal jurisdiction over all claims brought to enforce any duty or liability created by the Exchange Act or the rules and regulations
thereunder. Accordingly, actions by our shareholders to enforce any duty or liability created by the Exchange Act or the rules and
regulations thereunder must be brought in federal court. Our shareholders will not be deemed to have waived our compliance with the federal
securities laws and the regulations promulgated thereunder.
Any person or entity purchasing or otherwise
acquiring or holding any interest in any of Common Shares shall be deemed to have notice of and consented to the aforementioned forum
selection provisions, including the Federal Forum Provision. Additionally, our shareholders cannot waive compliance with the federal
securities laws and the rules and regulations thereunder. These provisions may limit our shareholders’ ability to bring a
claim in a judicial forum they find favorable for disputes with us or our directors, officers, or other employees, which may discourage
lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision
contained in the notice of articles and articles to be inapplicable or unenforceable in an action, we may incur additional costs associated
with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Limitation of Liability and Indemnification
Under the BCBCA, a company may indemnify: (i) a
current or former director or officer of that company; (ii) a current or former director or officer of another company if, at the
time such individual held such office, such company was an affiliate of the company, or if such individual held such office at the company’s
request; or (iii) an individual who, at the request of the company, held, or holds, an equivalent position in another entity, or
an indemnifiable person, against all judgments, penalties or fines, or amounts paid to settle a proceeding or an action, in respect of
any legal proceeding or investigative action (whether current, threatened, pending or completed) in which he or she is involved because
of that person’s position as an indemnifiable person, or an eligible proceeding, unless: (i) the individual did not act honestly
and in good faith with a view to the best interests of such company or the other entity, as the case may be; or (ii) in the case
of a proceeding other than a civil proceeding, the individual did not have reasonable grounds for believing that the individual’s
conduct in respect of which proceeding was brought was lawful. A company cannot indemnify an indemnifiable person if it is prohibited
from doing so under its articles or by applicable law. A company may pay, as they are incurred in advance of the final disposition of
an eligible proceeding, the expenses actually and reasonably incurred, subject to the indemnifiable person providing an undertaking that
such person will repay the amounts advanced if it is ultimately determined that the payment of such expenses is prohibited by the BCBCA.
OWNERSHIP AND EXCHANGE CONTROLS
There is no limitation imposed by Canadian law
or by the notice of articles and articles on the right of a non-resident to hold or vote Common Shares, other than discussed below.
Competition Act
Limitations on the ability to acquire and hold
Common Shares may be imposed by the Competition Act (Canada). This legislation permits the Commissioner of Competition, or the Commissioner,
to review any acquisition or establishment, directly or indirectly, including through the acquisition of shares, of control over or of
a significant interest in us. This legislation grants the Commissioner jurisdiction, for up to one year after the acquisition has been
substantially completed, to challenge this type of acquisition by seeking a remedial order, including an order to prohibit the acquisition
or require divestitures, from the Canadian Competition Tribunal, which may be granted where the Competition Tribunal finds that the acquisition
substantially prevents or lessens, or is likely to substantially prevent or lessen, competition.
This legislation also requires any person or
persons who intend to acquire more than 20% of our voting shares or, if such person or persons already own more than 20% of our voting
shares prior to the acquisition, more than 50% of our voting shares, to file a notification with the Canadian Competition Bureau if certain
financial thresholds are exceeded. Where a notification is required, unless an exemption is available, the legislation prohibits completion
of the acquisition until the expiration of the applicable statutory waiting period, unless the Commissioner either waives or terminates
such waiting period or issues an advance ruling certificate. The Commissioner’s review of a notifiable transaction for substantive
competition law considerations may take longer than the statutory waiting period.
Investment Canada Act
The Investment Canada Act requires each “non
Canadian” (as defined in the Investment Canada Act) who acquires “control” of an existing “Canadian business,”
to file a notification in prescribed form with the responsible federal government department or departments not later than 30 days after
closing, provided the acquisition of control is not a reviewable transaction under the Investment Canada Act. Subject to certain exemptions,
a transaction that is reviewable under the Investment Canada Act may not be implemented until an application for review has been filed
and the responsible Minister of the federal cabinet has determined that the investment is likely to be of “net benefit to Canada”
taking into account certain factors set out in the Investment Canada Act. Under the Investment Canada Act, an investment in Common Shares
by a non-Canadian who is an investor originating from a country with which Canada has a free trade agreement, including a United States
investor, and is not a state-owned enterprise, would be reviewable only if it were an investment to acquire control of us pursuant to
the Investment Canada Act and our enterprise value (as determined pursuant to the Investment Canada Act and its regulations) was equal
to or greater than the amount specified, which is currently CAD$1.711 billion. For most other investors who are not state-owned enterprises
the threshold is currently CAD$1.141 billion for 2022.
The Investment Canada Act contains various rules to
determine if there has been an acquisition of control. Generally, for purposes of determining whether an investor has acquired control
of a corporation by acquiring shares, the following general rules apply, subject to certain exceptions: the acquisition of a majority
of the undivided ownership interests in the voting shares of the corporation is deemed to be acquisition of control of that corporation;
the acquisition of less than a majority, but one-third or more, of the voting shares of a corporation or of an equivalent undivided ownership
interest in the voting shares of the corporation is presumed to be acquisition of control of that corporation unless it can be established
that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of voting shares; and the acquisition
of less than one-third (1/3) of the voting shares of a corporation or of an equivalent undivided ownership interest in the voting shares
of the corporation is deemed not to be acquisition of control of that corporation.
Under the national-security-review regime in
the Investment Canada Act, review on a discretionary basis may also be undertaken by the federal government in respect to a much broader
range of investments by a non-Canadian to “acquire, in whole or part, or to establish an entity carrying on all or any part of
its operations in Canada.” No financial threshold applies to a national-security review. The relevant test is whether such investment
by a non-Canadian could be “injurious to national security.” The responsible ministers have broad discretion to determine
whether an investor is a non-Canadian and therefore subject to national-security review. Review on national-security grounds is at the
discretion of the responsible ministers, and may occur on a pre- or post-closing basis.
Certain transactions relating to Common Shares
will generally be exempt from the Investment Canada Act, subject to the federal government’s prerogative to conduct a national-security
review, including:
| ● | the acquisition of Common Shares
by a person in the ordinary course of that person’s business as a trader or dealer
in securities; |
| ● | the acquisition of control of us
in connection with the realization of security granted for a loan or other financial assistance
and not for any purpose related to the provisions of the Investment Canada Act; and |
| ● | the acquisition of control of us
by reason of an amalgamation, merger, consolidation or corporate reorganization following
which the ultimate direct or indirect control in fact of us, through ownership of Common
Shares, remains unchanged. |
Other
There is no law, governmental decree or regulation
in Canada that restricts the export or import of capital, or that would affect the remittance of dividends (if any) or other payments
by us to non-resident holders of Common Shares, other than withholding tax requirements.
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion
is a summary of material U.S. federal income tax considerations applicable to you if you are a U.S. Holder (as defined below) of our
Common Shares and/or public warrants. This discussion addresses only those U.S. Holders that hold our Common Shares and/or public warrants
as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended, or the Code (generally property
held for investment). This summary does not discuss all aspects of U.S. federal income taxation that may be relevant to particular investors
in light of their particular circumstances, or to investors subject to special tax rules, such as:
| |
● |
financial institutions; |
| |
● |
traders in securities that
elect mark-to-market treatment; |
| |
● |
regulated investment companies; |
| |
● |
real estate investment
trusts; |
| |
● |
tax-exempt organizations
(including private foundations); |
| |
● |
investors that hold our
Common Shares or public warrants as part of a “straddle,” “hedge,” “conversion,” “synthetic
security,” “constructive ownership transaction,” “constructive sale” or other integrated transaction
for U.S. federal income tax purposes; |
| |
● |
investors subject to the
alternative minimum tax provisions of the Code; |
| |
● |
U.S. Holders that have
a functional currency other than the U.S. dollar; |
| |
● |
U.S. expatriates or former
long-term residents of the United States; |
| |
● |
investors subject to the
U.S. “inversion” rules; |
| |
● |
U.S. Holders owning or
considered as owning (directly, indirectly, or through attribution) 5% (measured by vote or value) or more of our Common Shares; |
| |
● |
persons that acquired our
Common Shares or public warrants pursuant to an exercise of employee share options, in connection with employee share incentive
plans or otherwise as compensation as compensation; |
| |
● |
controlled foreign corporations; |
| |
● |
accrual method taxpayers
that file applicable financial statements as described in Section 451(b) of the Code; |
| |
● |
passive foreign investment
companies (except to the limited extent provided herein); and |
| |
● |
persons who are not U.S.
Holders, all of whom may be subject to tax rules that differ materially from those summarized below. |
This summary does not discuss
any state, local, or non-U.S. tax considerations, any non-income tax (such as gift or estate tax) considerations, the alternative minimum
tax or the Medicare tax on net investment income. If a partnership (including an entity or arrangement treated as a partnership for U.S.
federal income tax purposes) holds Common Shares or public warrants the tax treatment of a partner in such partnership will generally
depend upon the status of the partner, the activities of the partnership and the partner and certain determinations made at the partner
level. If you are a partner of a partnership holding Common Shares or public warrants, you are urged to consult your tax advisor regarding
the tax consequences to you of the ownership and disposition of Common Shares or public warrants by the partnership.
This summary is based upon
the Code, the U.S. Department of Treasury regulations, or Treasury Regulations, current administrative interpretations and practices
of the Internal Revenue Service, or IRS, and judicial decisions, all as currently in effect and all of which are subject to differing
interpretations or to change, possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court
would not sustain a position contrary to any of the tax considerations described below.
For purposes of this discussion, a “U.S.
Holder” is a beneficial owner of Common Shares or public warrants, as the case may be, that is:
| |
● |
an individual who is a
U.S. citizen or resident of the United States; |
| |
● |
a corporation (including
an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia; |
| |
● |
an estate the income of
which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
| |
● |
a trust (A) the administration
of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons (within the meaning of the
Code) who have the authority to control all substantial decisions of the trust or (B) that has in effect a valid election under
applicable Treasury Regulations to be treated as a U.S. person. |
Tax Consequences of Ownership and Disposition of Common Shares
and Public Warrants
Dividends and Other Distributions on Common Shares
Subject to the PFIC rules discussed
below under the heading “- Passive Foreign Investment Company Rules,” distributions on Common Shares will generally
be taxable as a dividend for U.S. federal income tax purposes to the extent paid from the Company’s current or accumulated earnings
and profits, as determined under U.S. federal income tax principles. Distributions in excess of the Company’s current and accumulated
earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. Holder’s
adjusted tax basis in its Common Shares. Any remaining excess will be treated as gain realized on the sale or other disposition of the
Common Shares and will be treated as described below under the heading “- Tax Consequences of Ownership and Disposition of Common
Shares and Public Warrants - Sale, Taxable Exchange or Other Taxable Disposition of Common Shares and Public Warrants.” The
amount of any such distribution will include any amounts withheld by us (or another applicable withholding agent) in respect of Canadian
income taxes. Any amount treated as dividend income will be treated as foreign-source dividend income. Amounts treated as dividends that
the Company pays to a U.S. Holder that is a taxable corporation generally will be taxed at regular rates and will not qualify for the
dividends received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. With
respect to non-corporate U.S. Holders, under tax laws currently in effect and subject to certain exceptions (including, but not limited
to, dividends treated as investment income for purposes of investment interest deduction limitations), dividends generally will be taxed
at the lower applicable long-term capital gains rate only if Common Shares are readily tradable on an established securities market in
the United States or the Company is eligible for benefits under an applicable tax treaty with the United States, and the Company is not
treated as a PFIC with respect to such U.S. Holder at the time the dividend was paid or in the preceding year and provided certain holding
period requirements are met. The amount of any dividend distribution paid in Canadian dollars will be the U.S. dollar amount calculated
by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact
converted into U.S. dollars at that time. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S.
dollars after the date of receipt.
Subject to applicable limitations,
non-refundable Canadian income taxes withheld from dividends on Common Shares at a rate not exceeding the rate provided by the applicable
treaty with the United States will be eligible for credit against the U.S. treaty beneficiary’s U.S. federal income tax liability.
The rules governing foreign tax credits are complex and U.S. Holders are urged to consult their tax advisers regarding the creditability
of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, a U.S. Holder may deduct foreign taxes,
including any Canadian income tax, in computing their taxable income, subject to generally applicable limitations under U.S. law. An
election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable
year.
Sale, Taxable Exchange or Other Taxable Disposition of Common Shares
and Public Warrants
Subject to the PFIC rules discussed
below under the heading “- Passive Foreign Investment Company Rules,” upon any sale, exchange or other taxable disposition
of Common Shares or public warrants, a U.S. Holder generally will recognize gain or loss in an amount equal to the difference between
(i) the sum of (x) the amount cash and (y) the fair market value of any other property, received in such sale, exchange
or other taxable disposition and (ii) the U.S. Holder’s adjusted tax basis in such Common Shares or public warrants, in each
case as calculated in U.S. dollars. If a U.S. Holder acquired such Common Shares or public warrants as part of a unit, the adjusted tax
basis in the Common Shares or public warrants will be the portion of the acquisition cost allocated to the shares or warrants, respectively,
or if such Common Shares were received upon exercise of public warrants, the initial basis of the Common Shares upon exercise of public
warrants (generally determined as described below in “- Tax Consequences of Ownership and Disposition of Common Shares and Public
Warrants - Exercise or Lapse of a Public Warrant”). Any such gain or loss generally will be capital gain or loss and will be
long-term capital gain or loss if the U.S. Holder’s holding period for such Common Shares exceeds one (1) year. Long-term
capital gain realized by a non-corporate U.S. Holder generally will be taxable at a reduced rate. The deduction of capital losses is
subject to limitations. This gain or loss generally will be treated as U.S. source gain or loss.
Exercise or Lapse of a Public Warrant
A U.S. Holder generally
will not recognize taxable gain or loss on the acquisition of a Common Share upon exercise of a public warrant for cash. The U.S. Holder’s
tax basis in the Common Share received upon exercise of the public warrant generally will be an amount equal to the sum of the U.S. Holder’s
initial investment in the public warrant (i.e., its tax basis, calculated in U.S. dollars) and the exercise price. The U.S. Holder’s
holding period for a Common Share received upon exercise of the of a public warrant will begin on the day following the date of exercise
(or possibly the date of exercise) of the public warrant and will not include the period during which the U.S. Holder held the public
warrant. If a public warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such U.S.
Holder’s tax basis in the warrant (calculated in U.S. dollars). Such loss will be long-term if the warrant has been held for more
than one (1) year.
The tax consequences of
a cashless exercise of a public warrant are not clear under current tax law. A cashless exercise may not be taxable, either because the
exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In
either situation, a U.S. Holder’s tax basis in the shares of Common Shares received generally should equal the U.S. Holder’s
tax basis in the public warrants. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding
period for the Common Shares would be treated as commencing on the date of exercise of the public warrant or the day following the date
of exercise of the public warrant. If the cashless exercise were treated as a recapitalization, the holding period of the shares of Common
Shares received would include the holding period of the public warrant.
It is also possible that
a cashless exercise may be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder
may be deemed to have surrendered a number of public warrants having a value equal to the exercise price for the total number of public
warrants to be exercised. The U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair
market value of the public warrants deemed surrendered and the U.S. Holder’s tax basis in the public warrants deemed surrendered.
In this case, a U.S. Holder’s tax basis in the shares of Common Shares received would equal the sum of the U.S. Holder’s
tax basis in the public warrants exercised, and the exercise price of such public warrants. It is unclear whether a U.S. Holder’s
holding period for the shares of Common Shares would commence on the date of exercise of the public warrant or the day following the
date of exercise of the public warrant; in either case, the holding period will not include the period during which the U.S. Holder held
the public warrant.
Due to the absence of authority
on the U.S. federal income tax treatment of a cashless exercise, including when a U.S. Holder’s holding period would commence with
respect to the shares of Common Shares received, there can be no assurance as to which, if any, of the alternative tax consequences and
holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders are urged to consult their tax
advisors regarding the tax consequences of a cashless exercise.
If the Company redeems public
warrants for cash or if the Company purchases public warrants in an open market transaction, such redemption or purchase generally will
be treated as a taxable disposition to the U.S. Holder, taxed as described above under “- Tax Consequences of Ownership and
Disposition of Common Shares and Public Warrants - Sale, Taxable Exchange or Other Taxable Disposition of Common Shares and Public Warrants.”
Adjustment to Exercise Price
Under Section 305 of
the Code, if certain adjustments are made (or not made) to the number of shares to be issued upon the exercise of a public warrant or
to the public warrant’s exercise price, a U.S. Holder may be deemed to have received a constructive distribution with respect to
the warrant, which could result in adverse consequences for the U.S. Holder, including the inclusion of dividend income (with the consequences
generally as described above under the heading “- Tax Consequences of Ownership and Disposition of Common Shares and Public
Warrants - Dividends and Other Distributions on Common Shares”). The rules governing constructive distributions as a result
of certain adjustments with respect to a public warrant are complex, and U.S. Holders are urged to consult their tax advisors on the
tax consequences any such constructive distribution with respect to a public warrant.
Passive Foreign Investment Company Rules
The treatment of U.S. Holders
of Common Shares and public warrants could be materially different from that described above if the Company is treated as a PFIC for
U.S. federal income tax purposes.
If the Company is a PFIC
for any taxable year, U.S. Holders of Common Shares or public warrants may be subject to adverse U.S. federal income tax consequences
with respect to dispositions of, and distributions with respect to Common Shares, and may be subject to additional reporting requirements.
A non-U.S. corporation will
be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year, including
its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares by value, is passive
income, or the Income Test or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value
and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own
at least 25% of the shares by value, are held for the production of, or produce, passive income, or the Asset Test. Passive income generally
includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business)
and gains from the disposition of passive assets.
Based on our initial assessment,
we do not believe that the Company was classified as a PFIC for U.S. federal income tax purposes for the taxable year ending December 31,
2021. However, the application of the PFIC rules is subject to uncertainty in several respects, and we cannot assure you that the
IRS will not take a contrary position. Furthermore, whether the Company is classified as a PFIC is a factual determination that must
be made annually after the close of each taxable year. Accordingly, there can be no assurance with respect to the Company’s status
as a PFIC for the current or any future taxable year. Although PFIC status is generally determined annually, if the Company is determined
to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder of Common Shares and the
U.S. Holder did not make either a qualifying electing fund, or QEF, election or a mark-to-market election, or collectively, the PFIC
Elections, for the first taxable year of the Company in which it was treated as a PFIC, and in which the U.S. Holder held (or was deemed
to hold) such shares, or such U.S. Holder does not otherwise make an applicable purging election described below, such U.S. Holder generally
will be subject to special and adverse rules with respect to (i) any gain recognized by the U.S. Holder on the sale or other
disposition of its Common Shares and (ii) any “excess distribution” made to the U.S. Holder (generally, any distributions
to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received
by such U.S. Holder in respect of the Common Shares during the three preceding taxable years of such U.S. Holder or, if shorter, such
U.S. Holder’s holding period for the Common Shares).
Under these rules:
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● |
the U.S. Holder’s
gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Common Shares; |
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● |
the amount allocated to
the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, and to any
period in the U.S. Holder’s holding period before the first day of the Company’s first taxable year in which the
Company is a PFIC, will be taxed as ordinary income; |
| |
● |
the amount allocated to
other taxable years (or portions thereof) of the U.S. Holder and included in its holding period will be taxed at the highest tax
rate in effect for that year and applicable to the U.S. Holder; and |
| |
● |
an additional tax equal
to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder with respect to the tax attributable
to each such other taxable year of the U.S. Holder. |
PFIC Elections
In general, if the Company is determined to be
a PFIC, a U.S. Holder may avoid the adverse PFIC tax consequences described above in respect of Common Shares by making and maintaining
a timely and valid QEF election (if eligible to do so) to include in income its pro rata share of the Company’s net capital gains
(as long-term capital gain) and other earnings and profits (as ordinary income), on a current basis, in each case whether or not distributed,
in the first taxable year of the U.S. Holder in which or with which the Company’s taxable year ends and each subsequent taxable
year. A U.S. Holder generally may make a separate election to defer the payment of taxes on undistributed income inclusions under the
QEF rules, but if deferred, any such taxes will be subject to an interest charge.
In order to comply with
the requirements of a QEF election, a U.S. Holder must receive a PFIC Annual Information Statement from us. If the Company determines
that it is a PFIC, the Company intends to provide the information necessary for U.S. Holders to make or maintain a QEF election, including
information necessary to determine the appropriate income inclusion amounts for purposes of the QEF election. However, there is also
no assurance that the Company will have timely knowledge of its status as a PFIC in the future or of the required information to be provided.
Alternatively, if the Company
is a PFIC and Common Shares constitute “marketable stock,” a U.S. Holder may avoid the adverse PFIC tax consequences discussed
above if such U.S. Holder makes a mark-to-market election with respect to such shares for the first taxable year in which it holds (or
is deemed to hold) Common Shares and each subsequent taxable year. Such U.S. Holder generally will include for each of its taxable years
as ordinary income the excess, if any, of the fair market value of its Common Shares at the end of such year over its adjusted basis
in its Common Shares. The U.S. Holder also will recognize an ordinary loss in respect of the excess, if any, of its adjusted basis of
its Common Shares over the fair market value of its Common Shares at the end of its taxable year (but only to the extent of the net amount
of previously included income as a result of the mark-to-market election). The U.S. Holder’s basis in its Common Shares will be
adjusted to reflect any such income or loss amounts, and any further gain recognized on a sale or other taxable disposition of its Common
Shares will be treated as ordinary income. Currently, a mark-to-market election may not be made with respect to public warrants.
The mark-to-market election
is available only for “marketable stock,” generally, stock that is regularly traded on a national securities exchange that
is registered with the SEC, including the Nasdaq (on which Common Shares are intended to be listed), or on a foreign exchange or market
that the IRS determines has rules sufficient to ensure that the market price represents a legitimate and sound fair market value.
If made, a mark-to-market election would be effective for the taxable year for which the election was made and for all subsequent taxable
years unless the Common Shares cease to qualify as “marketable stock” for purposes of the PFIC rules or the IRS consents
to the revocation of the election. U.S. Holders are urged to consult their tax advisors regarding the availability and tax consequences
of a mark-to-market election with respect to Common Shares under their particular circumstances.
The application of the PFIC
rules to public warrants is unclear. A proposed Treasury Regulation issued under these rules generally treats an “option”
(which would include a public warrant) to acquire the stock of a PFIC as stock of the PFIC, while a final Treasury Regulation issued
under these rules provides that the holder of an option is not entitled make the PFIC Elections. Another proposed Treasury Regulation
provides that for purposes of the PFIC rules, stock acquired upon the exercise of an option will be deemed to have a holding period that
includes the period the U.S. Holder held the public warrants. As a result, if the proposed Treasury Regulations were to apply, and a
U.S. Holder were to sell or otherwise dispose of such public warrants (other than upon exercise of such public warrants for cash) and
the Company was a PFIC at any time during the U.S. Holder’s holding period of such public warrants, any gain recognized generally
would be treated as an excess distribution, taxed as described above. If a U.S. Holder that exercises such public warrants properly makes
and maintains a QEF election with respect to the newly acquired Common Shares (or has previously made a QEF election with respect to
Common Shares), the QEF election will apply to the newly acquired Common Shares. Notwithstanding such QEF election, if the proposed Treasury
Regulations were to apply, the adverse tax consequences relating to PFIC shares, adjusted to take into account the current income inclusions
resulting from the QEF election, would continue to apply with respect to such newly acquired Common Shares (which generally will be deemed
to have a holding period for purposes of the PFIC rules that includes the period the U.S. Holder held the public warrants), unless
the U.S. Holder makes a purging election under the PFIC rules described in the following paragraph.
If the Company is treated as a PFIC and a U.S.
Holder failed or was unable to timely make a PFIC Election for prior periods, a U.S. Holder might seek make a purging election to rid
the Common Shares of the PFIC taint. A purging election might be desirable if, for example, a U.S. Holder misses the deadline for filing
a QEF election for a prior period, or if the Common Shares were acquired through the exercise of public warrants with a holding period
that includes the period the warrants were held, either as a result of the application of the proposed Treasury Regulations, or because
the Common Shares are acquired through a cashless exercise that is treated as a recapitalization. Under one type of purging election,
the U.S. Holder will be deemed to have sold such shares at their fair market value and any gain recognized on such deemed sale will be
treated as an excess distribution, as described above. Under another type of purging election, the Company will be deemed to have made
a distribution to the U.S. Holder of such U.S. Holder’s pro rata share of the Company’s earnings and profits as determined
for U.S. federal income tax purposes. In order for the U.S. Holder to make the second election, the Company must also be determined to
be a “controlled foreign corporation” as defined by the Code (which is not currently expected to be the case). As a result
of either purging election, the U.S. Holder will have a new basis and holding period in the Common Shares acquired upon the exercise
of the public warrants solely for purposes of the PFIC rules.
The QEF election is made
on a shareholder-by-shareholder basis and, once made, can be revoked only with the consent of the IRS. A U.S. Holder generally makes
a QEF election by attaching a completed IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company
or Qualified Electing Fund), including the information provided in a PFIC Annual Information Statement, to a timely filed U.S. federal
income tax return for the tax year to which the election relates. Retroactive QEF elections generally may be made only by filing a protective
statement with such return and if certain other conditions are met or with the consent of the IRS. U.S. Holders are urged to consult
their tax advisors regarding the availability and tax consequences of a retroactive QEF election under their particular circumstances.
Related PFIC Rules
If the Company is a PFIC
and, at any time, has a foreign subsidiary that is classified as a PFIC, a U.S. Holder generally would be deemed to own a proportionate
amount of the shares of such lower-tier PFIC, and generally could incur liability for the deferred tax and interest charge described
above if the Company receives a distribution from, or disposes of all or part of its interest in, the lower-tier PFIC, or the U.S. Holder
otherwise was deemed to have disposed of an interest in the lower-tier PFIC. In certain circumstances, a U.S. Holder may make a QEF election
with respect to any lower-tier PFIC.
A U.S. Holder that owns
(or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may have to file an IRS Form 8621 (whether or
not a QEF or mark-to-market election is made) and to provide such other information as may be required by the U.S. Treasury Department.
Failure to do so, if required, will extend the statute of limitations applicable to such U.S. Holder until such required information
is furnished to the IRS.
The rules dealing with
PFICs and with the QEF and mark-to-market elections are very complex and are affected by various factors in addition to those described
above. Accordingly, U.S. Holders of Common Shares and public warrants are urged to consult their own tax advisors concerning the application
of the PFIC rules to the Company’s securities under their particular circumstances.
Information Reporting and Backup Withholding
Payments of dividends and
sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries are subject to information
reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in
the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject
to backup withholding.
The amount of any backup
withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability
and may entitle it to a refund, provided that the required information is timely furnished to the IRS.
The U.S. federal income tax discussion set forth
above is included for general information only and may not be applicable to you depending upon your particular situation. You are urged
to consult your own tax advisor with respect to the tax consequences to you of the ownership and disposition of our Common Shares and
public warrants including the tax consequences under state, local, estate, foreign and other tax laws and tax treaties and the possible
effects of changes in U.S. or other tax laws.
MATERIAL
CANADIAN FEDERAL INCOME TAX CONSIDERATIONS
The following is, as of
the date of this prospectus, a summary of the principal Canadian federal income tax considerations pursuant to the Income Tax Act
(Canada) and the regulations thereunder, (the “Tax Act”) that generally apply to the acquisition, holding or disposition
of Common Shares and public warrants by a person who is neither resident nor deemed to be resident in Canada for purposes of the Tax
Act and acquires a beneficial interest in Common Shares or public warrants, (a “Non-Resident Holder”).
This summary applies only to a Non-Resident Holder
who, at all relevant times, for purposes of the Tax Act:
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● |
holds Common Shares or public warrants as capital
property; |
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● |
does not, and is not deemed to, use or hold Common
Shares or public warrants in the course of carrying on a business in Canada; and |
| |
● |
deals at arm’s length and is not affiliated with
us. |
Special rules, which are
not discussed in this summary, may apply to a Non-Resident Holder that is an insurer that carries on an insurance business in Canada
and elsewhere.
This summary is based on
the current provisions of the Tax Act, all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister
of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and an understanding of the current administrative policies
and assessing practices of the Canada Revenue Agency (the “CRA”) made publicly available prior to the date hereof. This summary
assumes the Tax Proposals will be enacted in the form proposed, however, no assurance can be given that the Tax Proposals will be enacted
in the form proposed, or at all. Except for the Tax Proposals, this summary does not take into account or anticipate any changes in law
or administrative policies or assessing practices of the CRA, whether by legislative, governmental or judicial action, nor does it take
into account other federal or any provincial, territorial or foreign income tax legislation or considerations, which may differ significantly
from those discussed herein.
Generally, for the purposes
of the Tax Act, all amounts relating to the acquisition, holding or disposition of Common Shares and public warrants (including dividends,
adjusted cost base and proceeds of disposition) must be expressed in Canadian dollars. Amounts denominated in U.S. dollars must be converted
into Canadian dollars using the applicable rate of exchange (for the purposes of the Tax Act) quoted by the Bank of Canada on the date
such amounts arose, or such other rate of exchange as is acceptable to the CRA.
This summary is not
exhaustive of all possible Canadian federal income tax considerations that apply to an investment in Common Shares and public warrants.
Moreover, the income and other tax consequences of acquiring, holding or disposing of Common Shares or public warrants will vary depending
on an investor’s particular circumstances. Accordingly, this summary is of a general nature only and is not intended to be, nor
should it be construed to be, legal or tax advice to any investor. Consequently, investors should consult their own tax advisors for
advice with respect to the income tax consequences of an investment in Common Shares and public warrants based on their particular circumstances.
Adjusted Cost base of Common Shares
The adjusted cost base to a Non-Resident Holder
of a Common Share acquired pursuant to this offering will be determined by averaging the cost of that Common Share with the adjusted
cost base (determined immediately before the acquisition of the Common Share) of all other Common Shares held as capital property by
the Non-Resident Holder immediately prior to such acquisition.
Exercise of Public Warrants
No gain or loss will be
realized by a Non-Resident Holder upon the exercise of a public warrant to acquire a Common Share. A Non-Resident Holder’s cost
of a Common Share so acquired will equal the aggregate of such Non-Resident Holder’s adjusted cost base of the public warrant exercised
plus the exercise price paid for such Common Share. The Non-Resident Holder’s adjusted cost base of such Common Share will be determined
by averaging the cost of the Common Share with the adjusted cost base (determined immediately before the acquisition of the Common Share)
of all other Common Shares held as capital property by such Non-Resident Holder immediately prior to such acquisition.
Dividends on Common Shares
Every Non-Resident Holder
is liable to pay a Canadian withholding tax on every dividend that is or is deemed to be paid or credited to the Non-Resident Holder
on the Non-Resident Holder’s Common Shares. The statutory rate of withholding tax is 25% of the gross amount of the dividend paid.
Generally, the Canada - United States Tax Convention (1980), as amended (the “Treaty”) reduces the statutory rate with respect
to dividends paid to a Non-Resident Holder who is resident in the U.S. for purposes of the Treaty, the beneficial owner of such dividends,
and entitled to benefits under the Treaty, to 15% of the gross amount of the dividend. The Company is required to withhold the applicable
tax from dividends payable to the Non-Resident Holder, and to remit the tax to the Receiver General of Canada for the account of the
Non-Resident Holder.
Dispositions of Common Shares and Public Warrants
A Non-Resident Holder will
not be subject to tax under the Tax Act on any capital gain realized on a disposition or deemed disposition of Common Shares (other than
a disposition to us, which may result in a deemed dividend, unless purchased by us in the open market in the manner in which Common Shares
are normally purchased by any member of the public in the open market, in which case other considerations may arise) or public warrants,
unless the Common Shares or public warrants are “taxable Canadian property” of the Non-Resident Holder for purposes of the
Tax Act and the Non-Resident Holder is not entitled to relief under the Treaty.
Generally, the Common Shares
and public warrants will not constitute “taxable Canadian property” of a Non-Resident Holder at a particular time provided
that the Common Shares are listed at that time on a “designated stock exchange” for purposes of the Tax Act (which currently
includes the Nasdaq), unless, at any particular time during the 60-month period that ends at that time, both of the following are true:
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1. |
(a) the Non-Resident
Holder, (b) persons with whom the Non-Resident Holder does not deal with at arm’s length, (c) partnerships in which
the Non-Resident Holder or a person described in (b) holds an interest directly or indirectly through one or more partnerships,
or (d) any combination of (a) to (c), owned 25% or more of the issued shares of any class or series of our capital stock;
and |
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2. |
more than 50% of the fair
market value of the Common Shares was derived directly or indirectly from one or any combination of: (a) real or immovable properties
situated in Canada, (b) “Canadian resource properties” (as defined in the Tax Act), (c) “timber resource
properties” (as defined in the Tax Act), and (d) options in respect of, or interests in, or for civil law rights in, property
in any of the foregoing whether or not the property exists. |
NOTWITHSTANDING THE FOREGOING, IN CERTAIN
CIRCUMSTANCES SET OUT IN THE TAX ACT, COMMON SHARES AND PUBLIC WARRANTS MAY BE DEEMED TO BE TAXABLE CANADIAN PROPERTY. NON-RESIDENT
HOLDERS WHOSE COMMON SHARES OR PUBLIC WARRANTS MAY CONSTITUTE TAXABLE CANADIAN PROPERTY SHOULD CONSULT THEIR OWN TAX ADVISORS.
LEGAL MATTERS
Fasken Martineau DuMoulin LLP, or Fasken, has
passed upon the validity of the securities offered by this prospectus and certain other legal matters related to Canadian law. Mintz,
Levin, Cohn, Ferris, Glovsky and Popeo, P.C., or Mintz, has passed upon the validity of certain other legal matters. Fasken and Mintz
own 14,630 and 36,361 Common Shares, respectively.
EXPERTS
The financial statements of TMC the metals company
Inc. as of December 31, 2021 and 2020 and for the years then ended have been incorporated by reference herein and in the registration
statement in reliance on the report of Ernst & Young LLP, independent registered public accounting firm, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-3,
including exhibits, under the Securities Act with respect to the securities offered by this prospectus. This prospectus does not contain
all of the information included in the registration statement. For further information pertaining to us and our securities, you should
refer to the registration statement and our exhibits.
In addition, we file annual, quarterly and current
reports, proxy statements and other information with the SEC. Our SEC filings are available to the public on a website maintained by
the SEC located at www.sec.gov. We also maintain a website at www.metals.co. Through our website, we make available, free
of charge, annual, quarterly and current reports, proxy statements and other information as soon as reasonably practicable after they
are electronically filed with, or furnished to, the SEC. The information contained on, or that may be accessed through, our website is
not part of, and is not incorporated into, this prospectus. We include our website address in this prospectus only as an inactive textual
reference. Information contained in our website does not constitute a part of this prospectus or our other filings with the SEC.
INCORPORATION OF DOCUMENTS
BY REFERENCE
The SEC allows us to “incorporate by reference”
information that we file with them. Incorporation by reference allows us to disclose important information to you by referring you to
those other documents. The information incorporated by reference is an important part of this prospectus, and information that we file
later with the SEC will automatically update and supersede this information. We filed a registration statement on Form S-3 under
the Securities Act with the SEC with respect to the securities we may offer pursuant to this prospectus. This prospectus omits certain
information contained in the registration statement, as permitted by the SEC. You should refer to the registration statement, including
the exhibits, for further information about us and the securities we may offer pursuant to this prospectus. Statements in this prospectus
regarding the provisions of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily
complete and each statement is qualified in all respects by that reference. Copies of all or any part of the registration statement,
including the documents incorporated by reference or the exhibits, may be obtained upon payment of the prescribed rates at the offices
of the SEC listed above in “Where You Can Find More Information.” The documents we are incorporating by reference are:
| ● | our Quarterly Reports on Form 10-Q
for the quarters ended March 31, 2022 and June 30, 2022 that we filed with the
SEC on May 9,
2022 and August 15,
2022; |
| ● | our Current Reports on Form 8-K and amendments thereto that we filed with the SEC on February 10,
2022, March 17,
2022, June 2,
2022, August 15,
2022,
October 3, 2022 and October 12, 2022 (other than any portion of such filings that are furnished under applicable SEC
rules rather than filed); |
| ● | all reports and other documents
subsequently filed by us with the SEC (other than any portion of such filings that are furnished
under applicable SEC rules rather than filed) pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this prospectus and prior to the termination
or completion of the offering of securities under this prospectus shall be deemed to be incorporated
by reference in this prospectus and to be a part hereof from the date of filing such reports
and other documents. |
The SEC file number for each of the documents listed above is 001-39281.
Any statement contained in this prospectus or
in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document
that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or
superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request, orally or in writing, a copy
of any or all of the documents incorporated herein by reference. These documents will be provided to you at no cost, by contacting:
TMC the metals company Inc.
595 Howe Street, 10 Floor
Vancouver, British Columbia
V6C 2T5
(574) 252-9333
You may also access these documents on our website,
www.metals.co. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We
have included our website address in this prospectus solely as an inactive textual reference.
You should rely only on information contained
in, or incorporated by reference into, this prospectus and any prospectus supplement. We have not authorized anyone to provide you with
information different from that contained in this prospectus or incorporated by reference in this prospectus. We are not making offers
to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such
offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.
TMC THE METALS COMPANY INC.
$30,000,000
Common Shares
PROSPECTUS SUPPLEMENT
December 22, 2022
TMC the Metals (NASDAQ:TMC)
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