Form 4: TMC Director Karkar Exercises Options, Acquires Special Shares

TMC Director Andrei Karkar exercised stock options to acquire common shares and was issued various classes of special shares, increasing his direct beneficial ownership.

Summary

• Andrei Karkar, a Director and 10% owner of TMC the metals Co Inc., exercised stock options on February 3, 2026.
• He acquired 63,682 common shares at an exercise price of $0.52 per share.
• Concurrently, he was issued 37,510 Special Shares (Class A through H) for no additional consideration.
• These Special Shares convert into common shares on a one-for-one basis if TMC's common shares trade at specific price thresholds ranging from $15.00 to $200.00, or upon certain changes of control.
• Following these transactions, Karkar directly owns 394,009 common shares.
• ERAS Capital LLC, where Karkar is the managing member, indirectly holds 60,953,495 common shares.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive signal. An insider exercising options and receiving performance-based equity with high conversion thresholds suggests strong confidence in the company's long-term potential, aligning management's interests with significant shareholder value creation.

Positives

• Andrei Karkar, a Director and 10% owner, exercised stock options, indicating continued confidence in the company's future prospects.
• The acquisition of Special Shares, which convert at significantly higher price thresholds (up to $200.00), aligns management's long-term incentives with substantial share price appreciation.

Risks

• The conversion of Special Shares is contingent on the common shares reaching significantly higher price thresholds (e.g., $15.00 to $200.00), which may not be achieved.

Future Outlook

The issuance of Special Shares with high conversion price thresholds suggests a long-term optimistic outlook by management regarding significant future appreciation in the company's common share price.

Management Comments

• Andrei Karkar disclaims beneficial ownership over any securities owned by ERAS other than to the extent of any pecuniary interest he may have therein.

Industry Context

StockSavvy.ai notes that insider option exercises, particularly when coupled with the issuance of performance-based equity like these Special Shares, often signal strong internal conviction in a company's future growth trajectory. This type of compensation structure is common in growth-oriented industries, aiming to align executive incentives with long-term shareholder value creation.

Comparison to Industry Standards

• StockSavvy.ai observes that the tiered conversion thresholds for the Special Shares (ranging from $15.00 to $200.00) are aggressive and significantly higher than current market prices for many early-stage resource companies.
• For example, while some exploration companies might offer performance rights tied to specific project milestones or lower share price targets (e.g., $5-$10), these thresholds suggest an expectation of substantial, multi-bagger returns, comparable to the ambitious targets seen in high-growth tech or biotech sectors rather than typical mining or metals companies.
• This structure is more akin to 'super-performance' options designed to reward extraordinary long-term value creation.

Related Party Transactions

• The exercise of stock options and issuance of Special Shares to Andrei Karkar, a Director and 10% owner, constitutes a related party transaction.

Stakeholder Impact

• Shareholders: The transaction increases Andrei Karkar's direct ownership and aligns his incentives with long-term share price appreciation due to the high conversion thresholds of the Special Shares. Potential dilution upon conversion of Special Shares if thresholds are met.
• Management: Andrei Karkar's compensation structure is further tied to the company's stock performance.

Next Steps

• The Special Shares will automatically convert into common shares on a one-for-one basis if specific price thresholds are met (e.g., common shares trade at or above $15.00 for Class A, up to $200.00 for Class H, for 20 trading days within any 30 trading day period).
• Conversion of Special Shares may also occur in the event of certain changes of control.

Key Dates

Recommendation

While the insider's option exercise and acquisition of performance-based special shares signal strong long-term confidence, the extremely high conversion thresholds for the special shares (up to $200.00) indicate a highly speculative outlook. This transaction is a positive signal of insider alignment, but it doesn't fundamentally change the company's operational or financial standing in the short term. Investors should hold and monitor progress towards these ambitious targets, recognizing the significant upside potential but also the inherent risks in achieving such high valuations.

Keywords

TMC the metals Co Inc., TMC, Andrei Karkar, Stock Options, Beneficial Ownership, Insider Transaction, Special Shares, Corporate Governance, Director, 10% Owner