0001104659-22-118680 | 10-Q | XBRL Viewer

Warrants - Fair value of warrant liabilities (Details) - Private warrants $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Changes in the fair value of warrants liability:
Warrants liability as at December 31, 2021	$ 3,126
Decrease in fair value of warrants liability	(892)
Warrants liability as at September 30, 2022	$ 2,234

Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Condensed Consolidated Balance Sheets
Common shares, no par value	$ 0	$ 0
Common shares, issued	265,529,989	225,432,493

Warrants (Tables)

9 Months Ended

Sep. 30, 2022

Warrants

Schedule of changes in the fair value of warrant liabilities


	Private
	Warrants
Warrants liability as at December 31, 2021	$	3,126
Decrease in fair value of warrants liability		(892)
Warrants liability as at September 30, 2022	$	2,234

Schedule of provides quantitative information regarding Level 3 fair value measurements


	September 30,			December 31,
	2022			2021
Exercise price	$	11.50		$	11.50
Share price	$	1.05		$	2.08
Volatility		91.72	%		64.6	%
Term		3.9 years			4.7 years
Risk-free rate		4.07	%		1.2	%
Dividend yield		0.0	%		0.0	%

- Definition

Tabular disclosure of all significant concentrations of risk, including credit risk and market risk, arising from all financial instruments (as defined), whether from an individual counterparty or groups of counterparties. The disclosure concerning concentrations of risk may consist of the following information: (1) for concentrations of credit risk disclosure may include: (a) information about the (shared) activity, region, or economic characteristic that identifies the concentration, (b) the maximum amount of loss due to credit risk that, based on the gross fair value of the financial instrument, the entity would incur if parties to the financial instruments that make up the concentration failed completely to perform according to the terms of the contracts and the collateral or other security, if any, for the amount due proved to be of no value to the entity, (c) the policy of requiring collateral or other security to support financial instruments subject to credit risk, information about the entity's access to that collateral or other security, and the nature and a brief description of the collateral or other security supporting those financial instruments, and (d) the policy of entering into master netting arrangements to mitigate the credit risk of financial instruments, information about the arrangements for which the entity is a party, and a brief description of the terms of those arrangements, including the extent to which they would reduce the entity's maximum amount of loss due to credit risk and (2) for disclosure of quantitative information about the market risks of financial instruments that is consistent with the way the company manages or adjusts those risks, disclosure may include: (a) more details about current positions and perhaps activity during the period, (b) the hypothetical effects on comprehensive income (or net assets), or annual income, of several possible changes in market prices, (c) a gap analysis of interest rate re-pricing or maturity dates, (d) the duration of the financial instruments, (e) the entity's value at risk from derivatives and from other positions at the end of the reporting period and the average value at risk during the year, or (f) other ways of reporting quantitative information as internally developed.

+ References + Details

Subsequent Events (Details) - Subsequent event - PMTS Agreement Amendment [Member] $ / shares in Units, $ in Millions	Nov. 11, 2022 USD ($) $ / shares
Subsequent Event
Final Payment	$ 10.0
Issuance Of Common share \| $ / shares	$ 1.00
Allseas Warrants
Subsequent Event
Final Payment	$ 11.6
Warrants Vested to exercisable	$ 11.6

Share-Based Compensation - Employee Share Purchase Plan (Details)		1 Months Ended	3 Months Ended	9 Months Ended
	May 31, 2022 USD ($) M item shares	Jan. 31, 2022 shares	Sep. 30, 2022 USD ($) shares	Sep. 30, 2022 USD ($) shares	Dec. 31, 2022
Share-Based Compensation
Employee stock purchase plan offering period \| M	24
Employee stock purchase plan, purchase period \| item	4
Percentage of purchased share price	85.00%
Percentage of employees contribution limited to employees annual gross earnings	15.00%
Employee annual gross earnings not to exceed amount per year \| $	$ 25,000
Employee purchases in any offering period cannot exceed common shares \| shares	15,000
Percentage of employees purchases capped not to exceed total outstanding common shares	5.00%
Employee Share Purchase Plan
Share-Based Compensation
Comprehensive loss \| $			$ 39,000	$ 62,000
Shares issued to employees \| shares			0	42,426
Employee Share Purchase Plan \| Subsequent event
Share-Based Compensation
Percentage of common stock shares outstanding					1.00%
Employee Share Purchase Plan \| General and administration expenses
Share-Based Compensation
Comprehensive loss \| $			$ 27,000	$ 41,000
Employee Share Purchase Plan \| Exploration and evaluation activities
Share-Based Compensation
Comprehensive loss \| $			$ 12,000	$ 21,000
Employee Share Purchase Plan \| Common Stock
Share-Based Compensation
Issuance of shares under PIPE financing - net proceeds (in shares) \| shares	5,254,324
Issuance of common shares added to ESPP \| shares		2,254,324

Commitments and Contingent Liabilities

9 Months Ended

Sep. 30, 2022

Commitments and Contingent Liabilities

Commitments and Contingent Liabilities

10.Commitments and Contingent Liabilities

NORI Exploration Contract

As part of the NORI Exploration Contract with the ISA, NORI submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period. The periodic review report, which included a proposed work plan and estimated budget for 2022 to 2026, has been reviewed by and agreed with the ISA, and we are implementing the next five-year plan. NORI has estimated its work plan for 2022 and 2023 to be approximately $40 million and $25 million, respectively, which may be settled in cash or equity. The cost of the estimated work plan for 2024 onwards is contingent on the ISA’s approval of the NORI Area D exploitation application. Should the approval of NORI’s exploitation application for NORI Area D be delayed or rejected, NORI intends to revise its estimated future work plan in respect of its NORI Area. Work plans are reviewed annually by the Company, agreed with the ISA and may be subject to change depending on the Company’s progress to date.

Marawa Exploration Contract

Through DGE’s Marawa Option Agreement and Services Agreement with Marawa with respect to the Marawa Area, Marawa and DGE committed to spend a defined amount of funds on exploration activities on an annual basis. The commitment for fiscal 2022, 2023 and 2024 is Australian dollar (“AUD”) $1 million, AUD $3 million and AUD $2 million, respectively. Such commitment is negotiated with the ISA as part of a five-year plan submission and is subject to regular periodic reviews. To date, very limited offshore marine resource definition activities in the Marawa Contract Area have occurred and DGE expects to commit future resources as contractually agreed with Marawa to evaluate the future commercial viability of any project in such area. Marawa has not completed adequate exploration to establish the economic viability of any project in the Marawa Contract Area. Further work will need to be conducted in order to assess the viability of any potential project in the Marawa Contract Area and such work may take several years until such assessment can be made. Marawa has delayed certain of its efforts in the Marawa Contract Area while it determines how it will move forward with additional assessment work.

TOML Exploration Contract

As part of the TOML Exploration Contract, TOML submitted a periodic review report to the ISA in 2021, covering the 2017-2021 period. The periodic review report included a summary of work completed over the five-year period and a program of activities and estimated budget for the next five-year period. TOML had committed to spend $30.0 million over the five-year period from 2017 to 2021. Such commitment has flexibility where the amount can be reduced and such reduction would be dependent upon various factors including the success of the exploration programs and the availability of funding.

The Company has spent approximately $13.3 million in connection with the TOML Exploration Contract from 2017 to 2021. The ISA has reviewed TOML’s periodic review report for the 2017-2021 period and submitted its initial findings at the end of September 2022, which management is currently reviewing.

Contingent Liability

On October 28, 2021, a shareholder filed a putative class action against the Company and certain of its executives in federal district court for the Eastern District of New York, styled Caper v. TMC The Metals Company Inc. F/K/A Sustainable Opportunities Acquisition Corp., Gerard Barron and Scott Leonard. The complaint alleges that all defendants violated Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, and Messrs. Barron and Leonard violated Section 20(a) of the Exchange Act, by making false and/or misleading statements and/or failing to disclose information about the Company’s operations and prospects during the period from March 4, 2021 and October 5, 2021. On November 15, 2021, a second complaint containing substantially the same allegations was filed, captioned Tran v. TMC the Metals Company, Inc. These cases have been consolidated. On March 6, 2022, a lead plaintiff was selected. An amended complaint was filed on May 12, 2022, reflecting substantially similar allegations. The Company denies any allegations of wrongdoing and the Company has filed and served the plaintiff a motion to dismiss on July 12, 2022 and intends to defend against this lawsuit. As of September 26, 2022, the motion to dismiss is fully briefed and the parties are awaiting a ruling. There is no assurance, however, that the Company or the other defendants will be successful in their defense of this lawsuit or that insurance will be available or adequate to fund any settlement or judgment or the litigation costs of this action. If the motion to dismiss is unsuccessful, there is a possibility that the Company may incur a loss in this matter. Such losses or range of possible losses either cannot be reliably estimated. A resolution of this lawsuit adverse to the Company or the other defendants, however, could have a material effect on the Company’s financial position and results of operations in the period in which the lawsuit is resolved.

Nature of Operations

9 Months Ended

Sep. 30, 2022

Nature of Operations

Nature of Operations

1.Nature of Operations

TMC the metals company Inc. (“TMC” or the “Company”), formerly known as Sustainable Opportunities Acquisition Corporation (“SOAC”), was incorporated as a Cayman Islands exempted company limited by shares on December 18, 2019 and continued as a corporation under the laws of the province of British Columbia, Canada on September 9, 2021. On September 9, 2021, the Company completed its business combination (the “Business Combination”) with DeepGreen Metals Inc. (“DeepGreen”). The Company’s corporate office, registered address and records office is located at 10^th floor, 595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5. The Company’s common shares and warrants to purchase common shares are listed for trading on the Nasdaq Global Select Market (“Nasdaq”) under tickers “TMC” and “TMCWW”, respectively. In connection with closing of the Business Combination, DeepGreen merged with a wholly-owned subsidiary of SOAC and became a wholly-owned subsidiary of the Company. DeepGreen was determined to be the accounting acquirer and therefore, all information prior to the Business Combination, including the prior period financial information, represents the financial condition and operating results of DeepGreen.

The Company is a deep-sea minerals exploration company focused on the collection and processing of polymetallic nodules found on the seafloor in international waters of the Clarion Clipperton Zone in the Pacific Ocean (“CCZ”), located approximately 1,300 nautical miles southwest of San Diego, California. These nodules contain high grades of four metals (nickel, copper, cobalt, manganese) which can be used as (i) feedstock for battery cathode precursors (nickel and cobalt sulfates, or intermediate nickel-copper-cobalt matte) for electric vehicles (“EV”) and renewable energy storage markets, (ii) copper cathode for EV wiring, clean energy transmission and other applications and (iii) manganese silicate for manganese alloy production required for steel production.

Exploration and exploitation of seabed minerals in international waters is regulated by the International Seabed Authority (“ISA”), an intergovernmental organization established pursuant to the 1994 Agreement Relating to the Implementation of the United Nations Convention on the Law of the Sea. The ISA grants contracts to sovereign states or to private contractors who are sponsored by a sovereign state. The Company’s wholly-owned subsidiary, Nauru Ocean Resources Inc. (“NORI”), was granted an exploration contract (the “NORI Exploration Contract”) by the ISA in July 2011 under the sponsorship of the Republic of Nauru (“Nauru”) giving NORI exclusive rights to explore for polymetallic nodules in an area covering 74,830 km² in the CCZ (“NORI Area”). On March 31, 2020, the Company acquired Tonga Offshore Mining Limited (“TOML”), which was granted an exploration contract (the “TOML Exploration Contract”) by the ISA in January 2012 under the sponsorship of the Kingdom of Tonga (“Tonga”) and has exclusive rights to explore for polymetallic nodules covering an area of 74,713 km² in the CCZ (“TOML Area”). Marawa Research and Exploration Limited (“Marawa”), an entity owned and sponsored by the Republic of Kiribati (“Kiribati”), was granted rights by the ISA to polymetallic nodules exploration in an area of 74,990 km² in the CCZ (“Marawa Area”). In 2013, the Company through its subsidiary DeepGreen Engineering Pte. Ltd. (“DGE”) entered into an option agreement (the “Marawa Option Agreement”) with Marawa which granted DGE exclusive rights to manage and carry out all exploration and exploitation in the Marawa Area in return for a royalty payable to Marawa. The Company is working with its strategic partner and investor, Allseas Group S.A. (“Allseas”), to develop a system to collect, lift and transport nodules from the seafloor to shore and to subsequently convert that system into an early commercial production system (Note 4).

The realization of the Company’s assets and attainment of profitable operations is dependent upon many factors including, among other things: financing being arranged by the Company to continue operations, development of a nodule collection system for the recovery of polymetallic nodules from the seafloor as well as development of processing technology for the treatment of polymetallic nodules, the establishment of mineable reserves, the commercial and technical feasibility of seafloor polymetallic nodule collection and processing, metal prices, and regulatory approvals and environmental permitting for commercial operations. The outcome of these matters cannot presently be determined because they are contingent on future events and may not be fully under the Company’s control.

Since March 2020, several measures have been implemented by the governments in Canada, the United States of America (“US”), Australia, and the rest of the world in the form of office closures and limiting the movement of personnel in response to the increased impact from the novel coronavirus (“COVID-19”). While the impact of COVID-19 has not been significant to the Company’s business operations to date, the current circumstances are dynamic and could negatively impact the Company’s business operations, exploration and development plans, results of operations, financial position, and cash flows.

PIPE Financing

9 Months Ended

Sep. 30, 2022

PIPE Financing

PIPE Financing

9.PIPE Financing

On August 12, 2022, the Company entered into three securities purchase agreements for the private placement of an aggregate of 37,978,680 of the Company’s common shares. The Company entered into a securities purchase agreement (the “PIPE Purchase Agreement”) with the purchasers named therein (the “PIPE Purchasers”) for the issuance and sale of an aggregate of 31,625,000 Common Shares at a purchase price of $0.80 per share, a separate securities purchase agreement with Gerard Barron, the Company’s Chief Executive Officer and Chairman, for the issuance and sale of 103,680 Common Shares at $0.9645 per share, the consolidated closing bid price per Common Share on August 11, 2022 (the “Barron Purchase Agreement”), and a separate securities purchase agreement with ERAS Capital LLC, the family fund of the Company’s director, Andrei Karkar, for the issuance and sale of 6,250,000 common shares at a purchase price of $0.80 per share (the “ERAS Purchase Agreement”, together with the PIPE Purchase Agreement and the Barron Purchase Agreement, the “Purchase Agreements”). As at September 30, 2022, all of the 37,978,680 shares were issued and the Company received gross proceeds amounting to $30.4 million. The Company incurred $1.0 million as placement agent fees and offering expenses out of which expenses amounting to $0.2 million were settled by issuing 287,500 shares at issue price of $0.80 per share.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Exploration Contracts - Exploration and evaluation expenses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Schedule Of Break Down Of Exploration Expenses [Line Items]
Environmental Studies	$ 15,360	$ 18,570	$ 20,534	$ 44,004
Exploration Labor	1,030	819	3,374	2,397
Mining, Technological and Process Development	242	694	813	1,658
PMTS	3,685	26	6,458	48
Share-based compensation	1,587	3,032	7,399	30,577
Sponsorship, Training and Stakeholder Engagement	455	499	1,116	802
Other	304	208	646	695
Exploration and evaluation expenses	22,663	23,848	40,340	80,181
NORI Exploration Contract
Schedule Of Break Down Of Exploration Expenses [Line Items]
Environmental Studies	15,360	14,871	20,526	35,331
Exploration Labor	700	435	2,308	1,286
Mining, Technological and Process Development	214	429	704	960
PMTS	3,226	15	5,461	32
Share-based compensation	1,122	1,578	5,142	16,680
Sponsorship, Training and Stakeholder Engagement	300	428	654	563
Other	278	194	573	587
Exploration and evaluation expenses	21,200	17,950	35,368	55,439
Marawa Option Agreement
Schedule Of Break Down Of Exploration Expenses [Line Items]
Environmental Studies		1,852	8	4,341
Exploration Labor	167	199	541	555
Mining, Technological and Process Development	16	185	57	402
PMTS	229	7	499	9
Share-based compensation	231	594	1,123	6,925
Sponsorship, Training and Stakeholder Engagement	62	6	148	73
Other	11	14	16	70
Exploration and evaluation expenses	716	2,857	2,392	12,375
TOML Exploration Contract
Schedule Of Break Down Of Exploration Expenses [Line Items]
Environmental Studies		1,847		4,332
Exploration Labor	163	185	525	556
Mining, Technological and Process Development	12	80	52	296
PMTS	230	4	498	7
Share-based compensation	234	860	1,134	6,972
Sponsorship, Training and Stakeholder Engagement	93	65	314	166
Other	15		57	38
Exploration and evaluation expenses	$ 747	$ 3,041	$ 2,580	$ 12,367

Share-Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended
Share-Based Compensation (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Share-Based Compensation
Stock options issued	1,237,329
Aggregate vested units outstanding	19,284		19,284
General and administration expenses
Share-Based Compensation
Share-based compensation expense	$ 300,000		$ 300,000
Short Term Incentive Plan
Share-Based Compensation
Number of stock options outstanding (in shares)	15,356,340		15,356,340
Stock options issued or exercised	100,000		118,461
Long Term Incentive Plan
Share-Based Compensation
Number of stock options outstanding (in shares)	9,783,922		9,783,922
Restricted Stock Units ("RSUs")
Share-Based Compensation
Share-based compensation expense	$ 1,800,000	$ 35,000	$ 5,700,000	$ 35,000
Granted			$ 1.75
Shares issued	1,072,572		1,072,572
Amount to settle liabilities	$ 1,800,000		$ 1,800,000
Stock options forfeited	339,007		396,691
Unrecognized share-based compensation expense	$ 7,700,000		$ 7,700,000		$ 12,300,000
Restricted Stock Units ("RSUs") \| General and administration expenses
Share-Based Compensation
Share-based compensation expense	900,000	35,000	3,000,000.0	35,000
Restricted Stock Units ("RSUs") \| Exploration and evaluation activities
Share-Based Compensation
Share-based compensation expense	900,000	0	2,800,000	0
Restricted Stock Units ("RSUs") \| Non-Employee Directors
Share-Based Compensation
Fair value of units granted as annual grants			700,000	0
Employee stock option \| General and administration expenses
Share-Based Compensation
Share-based compensation expense	1,000,000.0	6,400,000	4,600,000	24,700,000
Employee stock option \| Exploration and evaluation activities
Share-Based Compensation
Share-based compensation expense	700,000	3,000,000	4,600,000	30,600,000
Equity option
Share-Based Compensation
Share-based compensation expense	$ 176,000,000	$ 9,500,000	$ 9,200,000	$ 55,200,000
2021 Incentive Equity Plan
Share-Based Compensation
Aggregate number of common shares reserved for issuance under the plan	33,699,685		33,699,685
Additional shares including to the plan 2022	9,017,299		9,017,299
Common Shares issued and outstanding percentage			4.00%
2021 Incentive Equity Plan \| Non-employee directors
Share-Based Compensation
Stock option number of shares outstanding (in shares)	2,243,853		2,243,853

PIPE Financing (Details) $ / shares in Units, $ in Thousands		9 Months Ended
	Aug. 12, 2022 item $ / shares shares	Sep. 30, 2022 USD ($) $ / shares shares
PIPE Financing
Proceeds from PIPE financing \| $		$ 30,400
Securities purchase agreement
PIPE Financing
Number of securities purchase agreements \| item	3
Issuance of shares under PIPE financing - net proceeds (in shares)	37,978,680	37,978,680
Proceeds from PIPE financing \| $		$ 30,400
Placement agent fees and offering expenses \| $		1,000
Placement agent fees and offering expenses settled by issuing shares \| $		$ 200
Securities purchase agreement \| PIPE Purchasers
PIPE Financing
Issuance of shares under PIPE financing - net proceeds (in shares)	31,625,000
Common shares per share \| $ / shares	$ 0.80
Securities purchase agreement \| Gerard Barron, the Company's Chief Executive Officer and Chairman
PIPE Financing
Issuance of shares under PIPE financing - net proceeds (in shares)	103,680
Common shares per share \| $ / shares	$ 0.9645
Securities purchase agreement \| ERAS Capital LLC, the family fund of the Company's director, Andrei Karkar
PIPE Financing
Issuance of shares under PIPE financing - net proceeds (in shares)	6,250,000
Common shares per share \| $ / shares	$ 0.80
Securities purchase agreement \| Placement agent
PIPE Financing
Common shares per share \| $ / shares		$ 0.80
Number of shares issued to settle placement fee and offering expenses		287,500

Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
Basis of Presentation (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Jun. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Basis of Presentation
Fair value of assets, Transfers from Level 1 to Level 2	$ 0		$ 0	$ 0	$ 0
Fair value of assets, Transfers from Level 2 to Level 1	0		0	0	0
Fair value of liabilities, Transfers from Level 1 to Level 2	0		0	0	0
Fair value of liabilities, Transfers from Level 2 to Level 1	0		0	0	0
Fair value of liabilities, Transfers into (out of) Level 3	0		0	0	0
Fair value of assets, Transfers into (out of) Level 3	$ 0		$ 0	$ 0	$ 0
Percentage of employees purchase of common shares at discount price		15.00%

Warrants - Fair value measurements assumptions (Details) - Private Warrants - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Class of Warrant or Right:
Exercise price	$ 11.50	$ 11.50
Share price	$ 1.05	$ 2.08
Volatility	91.72%	64.60%
Term	3 years 10 months 24 days	4 years 8 months 12 days
Risk-free rate	4.07%	1.20%
Dividend yield	0.00%	0.00%

Exploration Contracts (Tables)

9 Months Ended

Sep. 30, 2022

Exploration Contracts.

Schedule of exploration and evaluation expenses


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	15,360	$	—	$	—	$	15,360
Exploration Labor		700		167		163		1,030
Mining, Technological and Process Development		214		16		12		242
PMTS		3,226		229		230		3,685
Share-based compensation (Note 6)		1,122		231		234		1,587
Sponsorship, Training and Stakeholder Engagement		300		62		93		455
Other		278		11		15		304
	$	21,200	$	716	$	747	$	22,663


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2021	Contract		Agreement		Contract		Total
Environmental Studies	$	14,871	$	1,852	$	1,847	$	18,570
Exploration Labor		435		199		185		819
Mining, Technological and Process Development		429		185		80		694
PMTS		15		7		4		26
Share-based compensation (Note 6)		1,578		594		860		3,032
Sponsorship, Training and Stakeholder Engagement		428		6		65		499
Other		194		14		—		208
	$	17,950	$	2,857	$	3,041	$	23,848


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2022	Contract		Agreement		Contract			Total
Environmental Studies	$	20,526	$	8	$	—	$	20,534
Exploration Labor		2,308		541		525		3,374
Mining, Technological and Process Development		704		57		52		813
PMTS		5,461		499		498		6,458
Share-based compensation (Note 6)		5,142		1,123		1,134		7,399
Sponsorship, Training and Stakeholder Engagement		654		148		314		1,116
Other		573		16		57		646
	$	35,368	$	2,392	$	2,580	$	40,340


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2021	Contract		Agreement		Contract		Total
Environmental Studies	$	35,331	$	4,341	$	4,332	$	44,004
Exploration Labor		1,286		555		556		2,397
Mining, Technological and Process Development		960		402		296		1,658
PMTS		32		9		7		48
Share-based compensation (Note 6)		16,680		6,925		6,972		30,577
Sponsorship, Training and Stakeholder Engagement		563		73		166		802
Other		587		70		38		695
	$	55,439	$	12,375	$	12,367	$	80,181

Share-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Compensation

Share-Based Compensation

6.Share-Based Compensation

The Company’s 2021 Incentive Equity Plan (the “Plan”) provides that the aggregate number of common shares reserved for future issuance under the Plan is 33,699,685 common shares, including 9,017,299 shares added to the Plan in January 2022 pursuant to the Plan’s automatic annual increase provision described below, provided that 2,243,853 of the outstanding common shares shall only be available for awards made to non-employee directors of the Company. On the first day of each fiscal year beginning in 2022 to the tenth anniversary of the closing of the Business Combination, the number of common shares that may be issued pursuant to the Plan is automatically increased by an amount equal to the lesser of 4% of the number of outstanding common shares or an amount determined by the Board of Directors.

Stock options

As at September 30, 2022, there were 15,356,340 stock options outstanding under the Company’s Short-Term Incentive Plan (“STIP”) and 9,783,922 stock options outstanding under the Company’s Long-Term Incentive Plan (“LTIP”). During the three and nine months ended September 30, 2022, 100,000 STIP stock options and 118,461 STIP stock options, respectively were exercised, and no new options were granted.

During the three and nine months ended September 30, 2022, the Company recognized $176 million and $9.2 million respectively (three and nine months ended September 30, 2021 - $9.5 million and $55.2 million, respectively) of share-based compensation expense for stock options in the statement of loss and comprehensive loss. For the three and nine months ended September 30, 2022 a total of $0.7 million and $4.6 million respectively, was recorded in exploration and evaluation expenses (three and nine months ended September 30, 2021 - $3 million and $30.6 million, respectively). The amount recorded in general and administration expenses for three and nine months ended September 30, 2022 was $1.0 million and $4.6 million respectively (three and nine months ended September 31, 2021 - $6.4 million and $24.7 million respectively).

During the third quarter of 2022, the Company extended the expiry dates of 1,237,329 of its issued stock options in recognition of the continued services provided by the option holders and as a result recorded $0.3 million of share-based compensation expense in general and administrative expenses for the three months and nine months ended September 30, 2022.

Restricted Share Units

The details of RSUs granted during the three and nine months ended September 30, 2022 are described below.


Vesting Period	Three months ended September 30,		Nine months ended September 30,
	2022	2021	2022	2021
Vesting Immediately	8,576	—	1,721,729	—
Vesting in thirds on each anniversary of the grant date	95,238	56,224	464,632	56,224
Vesting in fourths on each anniversary of the grant date	—	—	527,800	—
Vesting fully on the anniversary of the grant date	—	—	476,189	—

Out of the 1,721,729 units vesting immediately on grant date, 1,072,572 units were issued to settle liabilities with a carrying amount of $1.8 million at a weighted average grant date fair value of $1.75 per RSU.

During the three and nine months ended September 30, 2022, an aggregate of nil and 476,189 units respectively were granted to the Company’s non-employee directors under the Company’s Non-employee Director Compensation Policy, which vest upon the Company’s 2023 annual shareholders meeting. The total fair value of units granted as annual grants to the non-employee directors in the first nine months of 2022 amounted to $700,000 ($nil in the first nine months of 2021).

During the three and nine months ended September 30, 2022, a total of 339,007 and 396,691 units respectively were forfeited.

During the three and nine months ended September 30, 2022, a total of $1.8 million and $5.7 million respectively (three and nine months ended September 30, 2021 - $35 thousand) was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs. For the three and nine months ended September 30, 2022, a total of $0.9 million and $2.8 million respectively, was recorded in exploration and evaluation expenses (three and nine months ended September 30, 2021 - $nil). The amount recorded in general and administration expenses for three and nine months ended September 30, 2022 was $0.9 million and $3.0 million respectively (three and nine months ended September 30, 2021- $35 thousand). As at September 30, 2022, total unrecognized share-based compensation expense for RSUs was $7.7 million (December 31, 2021 - $12.3 million).

As at September 30, 2022, an aggregate of 19,284 vested units were outstanding and due to be converted into common shares.

Employee Share Purchase Plan

On May 31, 2022, TMC’s 2021 Employee Share Purchase Plan was approved at the Company’s 2022 annual shareholders meeting, including the approval of the issuance of up to 5,254,324 common shares under the ESPP. This included 2,254,324 shares added to the ESPP in January 2022 pursuant to the ESPP’s annual increase provision. As per the annual increase provision on the first day of each of the Company’s fiscal years after 2022, common shares equal to the lesser of (i) 1% percent of the common shares outstanding on the last day of the immediately preceding fiscal year, or (ii) such lesser number of shares as is determined by the Board of Directors will be added to the ESPP.

Participation in the ESPP is available to all full-time and certain part-time employees. The ESPP comprises offering periods that are twenty-four (24) months in length, which begin on approximately every June 1 and December 1. Each offering period includes four purchase periods of six months each, which begin on approximately every June 1 and December 1, or at such other times designated by the Board of Directors or its compensation committee. At the exercise date, which is the last business day of each purchase period, the accumulated deductions from participating employees are used to purchase common shares of the Company. Shares are purchased at a price equal to 85% of the lower of either the share price of the Company’s common shares on the first business day of the particular offering period or the last business day of the purchase period. The plan also has an automatic reset feature wherein, if the share price of the common share on any exercise date is less than the share price of the common share on the first business day of the applicable offering period, then such offering period shall automatically terminate immediately after the purchase of the common shares. In such case, a new offering period shall commence on the first business day following the exercise date.

The ESPP includes the following limitations:

●

an employee’s contribution is limited to 15% of the employee’s annual gross earnings, not to exceed $25,000 per year,

●

an employee’s purchases in any offering period cannot exceed 15,000 common shares, and

●

an employee’s purchases are capped, not to exceed 5% of the Company’s total outstanding common shares

During the three and nine months ended September 30, 2022, a total of $39 thousand and $62 thousand respectively was charged to the condensed consolidated statement of loss and comprehensive loss. For the three and nine months ended September 30, 2022, a total of $12 thousand and $21 thousand respectively, was recorded in exploration and evaluation expenses. The amount recorded in general and administration expenses for three and nine months ended September 30, 2022 was $27 thousand and $41 thousand respectively. During the three and nine months ended September 30, 2022, the Company issued nil and 42,426 common shares respectively to its employees as part of its ESPP program.

Loss per Share - Anti-dilutive common equivalent shares (Details) - shares	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Loss per Share
Total anti-dilutive common equivalent shares	202,514,745	197,662,478
Outstanding options to purchase common shares
Loss per Share
Total anti-dilutive common equivalent shares	25,140,262	25,287,670
Outstanding RSUs
Loss per Share
Total anti-dilutive common equivalent shares	5,021,783	56,224
Outstanding shares under ESPP
Loss per Share
Total anti-dilutive common equivalent shares	34,116
Outstanding warrants
Loss per Share
Total anti-dilutive common equivalent shares	36,078,620	36,078,620
Outstanding Special Shares and options to purchase Special Shares
Loss per Share
Total anti-dilutive common equivalent shares	136,239,964	136,239,964

Nature of Operations (Details)	Sep. 30, 2022 km²
NORI
Exclusive rights to explore for polymetallic nodules:
Area of exploration granted (in square km)	74,830
TOML
Exclusive rights to explore for polymetallic nodules:
Area of exploration granted (in square km)	74,713
Marawa
Exclusive rights to explore for polymetallic nodules:
Area of exploration granted (in square km)	74,990

Exploration Contracts (Details) - Allseas Group S.A - USD ($) shares in Millions, $ in Millions			3 Months Ended			9 Months Ended		12 Months Ended
	Nov. 09, 2022	Apr. 25, 2022	Dec. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Amount of expenses				$ 1.3	$ 12.9	$ 4.0	$ 12.9
Owned common shares (in shares)				22.7		22.7		16.2
Common shares outstanding, percentage						8.60%		7.20%
PMTS
Finite-Lived Intangible Assets [Line Items]
Payment	$ 10.0
PMTA
Finite-Lived Intangible Assets [Line Items]
Payment		$ 10.0
Completion of the PMTS
Finite-Lived Intangible Assets [Line Items]
Amount payable			$ 10.0

Loss per Share (Tables)

9 Months Ended

Sep. 30, 2022

Loss per Share

Schedule of anti-dilutive common equivalent shares


	Nine months ended	Nine months ended
	September 30,	September 30,
	2022	2021
Outstanding options to purchase common shares	25,140,262	25,287,670
Outstanding RSUs	5,021,783	56,224
Outstanding shares under ESPP	34,116	—
Outstanding warrants	36,078,620	36,078,620
Outstanding Special Shares and options to purchase Special Shares	136,239,964	136,239,964
Total anti-dilutive common equivalent shares	202,514,745	197,662,478

Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2022

Basis of Presentation

Basis of Presentation

These unaudited condensed consolidated interim financial statements are prepared in accordance with US Generally Accepted Accounting Principles (“U.S. GAAP”) for interim financial statements. Accordingly, certain information and footnote disclosures required by U.S. GAAP have been condensed or omitted in these unaudited condensed consolidated interim financial statements pursuant to such rules and regulation. In management’s opinion, these unaudited condensed consolidated interim financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position, operating results for the periods presented, comprehensive loss, shareholder’s equity and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2022 or for any other period. These unaudited condensed consolidated interim financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2021. The Company has applied the same accounting policies as in the prior year, except as disclosed below.

All share and per share amounts have been adjusted to reflect the impact of the Business Combination.

Certain comparative figures in note 4 have been reclassified to conform to the current period’s presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and the notes thereto. Significant estimates and assumptions reflected in these condensed consolidated interim financial statements include, but are not limited to, the valuation of share-based payments, including valuation of incentive stock options (Note 6) and the common shares issued to Maersk Supply Service A/S, and warrants liability (Note 5). Actual results could differ materially from those estimates.

Fair Value of Financial Instruments

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value.

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. In accordance with U.S. GAAP, the Company utilizes a three-tier hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

●

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

●

Level 2 - Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

●

Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.

There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2022 and 2021.

As at September 30, 2022 and December 31, 2021, the carrying values of cash, receivables, and accounts payable and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The financial instruments also include public and private warrants issued by the Company. The warrants are valued at fair value which is disclosed in Note 5.

Share-Based Compensation on Employee Share Purchase Plan

Share-Based Compensation on Employee Share Purchase Plan

During the second quarter of 2022, the Company implemented an employee share purchase plan (the “ESPP”) whereby employees can purchase common shares of the Company at a 15% discount to its share price at the time of purchase, through payroll deductions (Note 6). Employee contributions are converted into common shares at a discount to the lower of the share price at the beginning of the offering period and the share price at the end of the purchase period. The fair value of the shares purchased under the ESPP is estimated on the grant date using a Black-Scholes option-pricing model and is reported as share-based compensation over the offering period, using the accelerated attribution method. Share-based compensation costs are charged to exploration and evaluation expenses or general and administrative expenses in the statement of loss and comprehensive loss.

- Definition

Disclosure of accounting policy for award under share-based payment arrangement. Includes, but is not limited to, methodology and assumption used in measuring cost.

+ References + Details

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current
Cash	$ 66,872	$ 84,873
Receivables and prepayments	5,037	3,686
Total current assets	71,909	88,559
Non-current
Exploration contracts	43,150	43,150
Equipment	2,098	1,416
Total non-current assets	45,248	44,566
TOTAL ASSETS	117,157	133,125
Current
Accounts payable and accrued liabilities	25,188	26,573
Total current liabilities	25,188	26,573
Non-current
Deferred tax liability	10,675	10,675
Warrants liability	2,234	3,126
TOTAL LIABILITIES	38,097	40,374
EQUITY
Common shares (unlimited shares, no par value - issued: 265,529,989 (December 31, 2021 - 225,432,493))	328,911	296,051
Class A - J Special Shares	0	0
Additional paid in capital	116,917	102,073
Accumulated other comprehensive loss	(1,216)	(1,216)
Deficit	(365,552)	(304,157)
TOTAL EQUITY	79,060	92,751
TOTAL LIABILITIES AND EQUITY	$ 117,157	$ 133,125

Related Party Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions

Related Party Transactions

8.Related Party Transactions

The Company’s subsidiary, DeepGreen Engineering Pte. Ltd., is engaged in a consulting agreement with SSCS Pte. Ltd. (“SSCS”) to manage offshore engineering studies. A director of DGE is employed through SSCS. Consulting services during the three and nine months ended September 30, 2022 totaled $69 thousand and $206 thousand (three and nine months ended September 30, 2021 - $75 thousand and $213 thousand respectively) out of which for three and nine months ended September 30, 2022 a total of $55 thousand and $165 thousand, respectively (three and nine months ended September 30, 2021 - $60 thousand and $170 thousand, respectively) is disclosed as exploration labor within exploration and evaluation expenses (Note 4) and $14 thousand and $41 thousand respectively for three and nine months ended September 30, 2022 is disclosed as general and administration expenses (three and nine months ended September 30, 2021 - $15 thousand and $43 thousand respectively). As at September 30, 2022, the amount payable to SSCS was $nil (December 31, 2021 - $23 thousand).

The Company’s Chief Ocean Scientist provides consulting services to the Company through Ocean Renaissance LLC (“Ocean Renaissance”) where he is a principal. Consulting services during the three and nine months ended September 30, 2022 amounted to $94 thousand and $281 thousand respectively (three and nine months ended September 30, 2021 $93 thousand and $281 thousand), evenly apportioned between exploration and evaluation expenses (Note 4) and general and administration expenses for three and nine months ended September 30, 2022 and September 30, 2021. As at September 30, 2022, the amount payable to Ocean Renaissance was $nil (December 31, 2021 - $nil).

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Share-Based Compensation

Summary of the RSU activity


Vesting Period	Three months ended September 30,		Nine months ended September 30,
	2022	2021	2022	2021
Vesting Immediately	8,576	—	1,721,729	—
Vesting in thirds on each anniversary of the grant date	95,238	56,224	464,632	56,224
Vesting in fourths on each anniversary of the grant date	—	—	527,800	—
Vesting fully on the anniversary of the grant date	—	—	476,189	—

Warrants (Details) $ / shares in Units, $ in Thousands		9 Months Ended
Warrants (Details) $ / shares in Units, $ in Thousands	Nov. 11, 2022 USD ($)	Sep. 30, 2022 USD ($) D $ / shares shares	Dec. 31, 2021 USD ($) shares
PMTS Agreement Amendment [Member] \| Subsequent event
Class of Warrant or Right:
Settlement Of final Payment \| $	$ 10,000
Private warrants
Class of Warrant or Right:
Fair value of outstanding recorded as warrants liability \| $		$ 2,234	$ 3,126
Public Warrants
Class of Warrant or Right:
Number of warrants outstanding		15,000,000	15,000,000
Outstanding Public Warrants \| $		$ 19,500
Public Warrants \| SOAC \| IPO [Member]
Class of Warrant or Right:
Warrants to acquire shares of common stock		15,000,000
Public Warrants \| Minimum
Class of Warrant or Right:
Trading days for redemption of public warrants \| D		20
Public Warrants \| Maximum [Member]
Class of Warrant or Right:
Consecutive trading days for redemption of public warrants \| D		30
Public Warrants \| Redemption Of Warrants When Price Per Share Of Class Common Stock Equals Or Exceeds 18.00
Class of Warrant or Right:
Issue price per share \| $ / shares		$ 18.00
Private Warrants
Class of Warrant or Right:
Number of warrants outstanding		9,500,000	9,500,000
Number of shares issuable per warrant		0
Private Warrants \| SOAC \| Private warrants
Class of Warrant or Right:
Warrants to acquire shares of common stock		9,500,000
Allseas Warrants \| PMTS Agreement Amendment [Member] \| Subsequent event
Class of Warrant or Right:
Settlement Of final Payment \| $	$ 11,600
Allseas Warrants \| PMTS is completed by September 30, 2023
Class of Warrant or Right:
Number of warrants purchased		11,600,000
Allseas Warrants \| PMTS is completed after September 30, 2025
Class of Warrant or Right:
Number of warrants purchased		5,800,000

Commitments and Contingent Liabilities (Details) $ in Thousands, $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended			60 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2024 AUD ($)	Dec. 31, 2023 AUD ($)	Dec. 31, 2022 AUD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Commitments and Contingent Liabilities
Exploration and evaluation expenses	$ 22,663	$ 23,848	$ 40,340	$ 80,181
Nauru Ocean Resources Inc
Commitments and Contingent Liabilities
NORI spend in 2022									$ 25,000	$ 40,000
Marawa Research and Exploration Limited
Commitments and Contingent Liabilities
Exploration and evaluation expenses					$ 2	$ 3	$ 1
Tonga Off shore Mining Limited
Commitments and Contingent Liabilities
Spending committed								$ 30,000
Exploration and evaluation expenses								$ 13,300
Long-term Purchase Commitment, Period								5 years

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2022	Nov. 14, 2022
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Entity File Number	001-39281
Entity Registrant Name	TMC THE METALS COMPANY INC.
Entity Incorporation, State or Country Code	A1
Entity Tax Identification Number	00-0000000
Entity Address, Address Line One	595 Howe Street, 10th Floor
Entity Address, City or Town	Vancouver
Entity Address, State or Province	BC
Entity Address, Postal Zip Code	V6C 2T5
City Area Code	574
Local Phone Number	252-9333
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		265,532,666
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001798562
Entity Ex Transition Period	false
Amendment Flag	false
Common Shares, without par value
Document And Entity Information
Title of 12(b) Security	Common Shares, without par value
Trading Symbol	TMC
Security Exchange Name	NASDAQ
Redeemable warrants, each whole warrant exercisable for one Common Share, each at an exercise price of $11.50 per share
Document And Entity Information
Title of 12(b) Security	Redeemable warrants, each whole warrant exercisable for one Common Share, each at an exercise price of $11.50 per share
Trading Symbol	TMCWW
Security Exchange Name	NASDAQ

Condensed Consolidated Statements of Loss and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Operating expenses
Exploration and evaluation expenses	$ 22,663	$ 23,848	$ 40,340	$ 80,181
General and administrative expenses	5,944	13,334	22,502	41,138
Operating loss	28,607	37,182	62,842	121,319
Other items
Change in fair value of warrant liability	(350)	(878)	(892)	(878)
Foreign exchange loss (gain)	(11)	5	(11)	57
Interest expense (income)	(352)	342	(544)	1,003
Loss and comprehensive loss for the period	$ 27,894	$ 36,651	$ 61,395	$ 121,501
Loss per share
Loss per share, Basic	$ 0.12	$ 0.18	$ 0.27	$ 0.61
Loss per share, Diluted	$ 0.12	$ 0.18	$ 0.27	$ 0.61
Weighted average number of common shares outstanding - basic	239,740,984	205,248,258	231,028,587	198,092,309
Weighted average number of common shares outstanding - diluted	239,740,984	205,248,258	231,028,587	198,092,309

Segmented Information - Schedule of equipment (Details)	9 Months Ended
Segmented Information - Schedule of equipment (Details)	Sep. 30, 2022 segment
Segmented Information
Number of operating segments	1

Exploration Contracts

9 Months Ended

Sep. 30, 2022

Exploration Contracts.

Exploration Contracts

4.Exploration Contracts

Strategic Partnerships

Pilot Mining Test Project with Allseas

The Company made the second $10 million payment of the amended Pilot Mining Test Agreement (“PMTA”) on April 25, 2022, upon successful completion of the North Sea drive test on March 25, 2022. The third and final $10 million payment will be payable upon successful completion of the pilot trial of the Pilot Mining Test System (“PMTS”) in NORI Area D. Completion of the pilot trial of the PMTS and third and final payment is expected to occur in the fourth quarter of 2022.

Total cost recorded as exploration and evaluation expenses for the PMTS during the three and nine months ended September 30, 2022 amounted to $1.3 million and $4 million, respectively (three and nine months ended September 30, 2021 amounted to $12.9 million). The Company has not recorded a liability for the third payment as at September 30, 2022.

On March 16, 2022, the Company’s subsidiary, NORI, and Allseas entered into a non-binding term sheet which contemplates an upgrade of the PMTS into a commercial nodule collection system and commercial operation of this system in NORI Area D. The terms are subject to negotiation between NORI and Allseas and if successful, may result in amendments to the existing Strategic Alliance Agreement.

As at September 30, 2022, Allseas owned 22.7 million TMC common shares (December 31, 2021 – 16.2 million TMC common shares) which constituted 8.6% (December 31, 2021 – 7.2%) of total common shares outstanding.

On November 9, 2022, the Company and Allseas agreed to settle the third and final payment of $10 million in either cash or shares of the Company, at the Company’s election. With the successful completion of the pilot trial of the PMTS, as approved by the Company’s Board of Directors on November 11, 2022, the Company intends to satisfy the Allseas obligation through the issuance of common shares in the fourth quarter of 2022, subject to regulatory approval (Note 12).

Exploration and Evaluation Expenses

The detail of exploration and evaluation expenses is as follows:


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2022	Contract		Agreement		Contract		Total
Environmental Studies	$	15,360	$	—	$	—	$	15,360
Exploration Labor		700		167		163		1,030
Mining, Technological and Process Development		214		16		12		242
PMTS		3,226		229		230		3,685
Share-based compensation (Note 6)		1,122		231		234		1,587
Sponsorship, Training and Stakeholder Engagement		300		62		93		455
Other		278		11		15		304
	$	21,200	$	716	$	747	$	22,663


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the three months ended September 30, 2021	Contract		Agreement		Contract		Total
Environmental Studies	$	14,871	$	1,852	$	1,847	$	18,570
Exploration Labor		435		199		185		819
Mining, Technological and Process Development		429		185		80		694
PMTS		15		7		4		26
Share-based compensation (Note 6)		1,578		594		860		3,032
Sponsorship, Training and Stakeholder Engagement		428		6		65		499
Other		194		14		—		208
	$	17,950	$	2,857	$	3,041	$	23,848


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2022	Contract		Agreement		Contract			Total
Environmental Studies	$	20,526	$	8	$	—	$	20,534
Exploration Labor		2,308		541		525		3,374
Mining, Technological and Process Development		704		57		52		813
PMTS		5,461		499		498		6,458
Share-based compensation (Note 6)		5,142		1,123		1,134		7,399
Sponsorship, Training and Stakeholder Engagement		654		148		314		1,116
Other		573		16		57		646
	$	35,368	$	2,392	$	2,580	$	40,340


	NORI		Marawa		TOML
	Exploration		Option		Exploration
For the nine months ended September 30, 2021	Contract		Agreement		Contract		Total
Environmental Studies	$	35,331	$	4,341	$	4,332	$	44,004
Exploration Labor		1,286		555		556		2,397
Mining, Technological and Process Development		960		402		296		1,658
PMTS		32		9		7		48
Share-based compensation (Note 6)		16,680		6,925		6,972		30,577
Sponsorship, Training and Stakeholder Engagement		563		73		166		802
Other		587		70		38		695
	$	55,439	$	12,375	$	12,367	$	80,181

Recent Accounting Pronouncements Issued and Adopted

9 Months Ended

Sep. 30, 2022

Recent Accounting Pronouncements Issued and Adopted

Recent Accounting Pronouncements Issued and Adopted

3.Recent Accounting Pronouncements Issued and Adopted

Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options

In May 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-04, “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options”, which clarified and reduced diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. Specifically, an issuer should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. Modification or an exchange that is a part of or directly related to a modification or an exchange of an existing debt instrument should be measured as the difference between the fair value of the modified or exchanged written call option and the fair value of that written call option immediately before it is modified or exchanged. The effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange on the basis of the substance of the transaction should be recognized in the same manner as if cash had been paid as consideration. ASU 2021-04 is effective for fiscal periods ending on or after December 15, 2021, with early adoption permitted. ASU 2021-04 is applied prospectively to modifications or exchanges occurring on or after the effective date. The adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on the Company’s condensed consolidated interim financial statements.

Subsequent Events

9 Months Ended

Sep. 30, 2022

Subsequent Events

Subsequent Events

12.Subsequent Events

On November 11, 2022, the Company’s Board of Directors agreed with management’s assessment that the criteria for the successful completion of the pilot trial of the PMTS in the NORI Area D, as prescribed in the Strategic Alliance Agreement (SAA) with Allseas, had been met.

As a result, the Company intends to settle the third and final payment of $10 million of the amended PMTA through the issuance of common shares in the fourth quarter of 2022, at a price of $1.00 per share, subject to regulatory approval (Note 4).

Similarly, with the successful completion of the pilot trial of the PMTS, the 11.6 million Allseas Warrants have vested and are exercisable (Note 5).

Loss per Share

9 Months Ended

Sep. 30, 2022

Loss per Share

Loss per Share

7.Loss per Share

Basic and diluted loss per share was the same for each period presented as the inclusion of all common share equivalents would have been anti-dilutive. Anti-dilutive equivalent common shares were as follows:


	Nine months ended	Nine months ended
	September 30,	September 30,
	2022	2021
Outstanding options to purchase common shares	25,140,262	25,287,670
Outstanding RSUs	5,021,783	56,224
Outstanding shares under ESPP	34,116	—
Outstanding warrants	36,078,620	36,078,620
Outstanding Special Shares and options to purchase Special Shares	136,239,964	136,239,964
Total anti-dilutive common equivalent shares	202,514,745	197,662,478

Basis of Presentation

9 Months Ended

Sep. 30, 2022

Basis of Presentation

Basis of Presentation

2.Basis of Presentation

All share and per share amounts have been adjusted to reflect the impact of the Business Combination.

Certain comparative figures in note 4 have been reclassified to conform to the current period’s presentation.

Use of Estimates

Fair Value of Financial Instruments

●

Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that an entity has the ability to access.

●

Level 3 - Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

There were no transfers between fair value measurement levels during the three and nine months ended September 30, 2022 and 2021.

Significant Accounting Policies Adopted during the period

Share-Based Compensation on Employee Share Purchase Plan

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating activities
Loss for the period	$ (61,395)	$ (121,501)
Items not affecting cash:
Amortization	299	324
Expenses settled with share-based payments	16,298	69,357
Interest on convertible debentures		1,003
Change in fair value of warrants liability	(892)	(878)
Unrealized foreign exchange	56	(31)
Changes in working capital:
Receivables and prepayments	(1,426)	(8)
Accounts payable and accrued liabilities	300	23,395
Net cash used in operating activities	(46,760)	(28,339)
Investing activities
Settlement of deferred acquisition costs		(3,440)
Acquisition of equipment	(959)	(402)
Net cash used in investing activities	(959)	(3,842)
Financing activities
Proceeds from PIPE financing	30,400
Expenses paid for PIPE financing	(680)
Proceeds from employee share purchase plan	56
Proceeds from exercise of stock options	76	4,236
Proceeds from issuance of convertible debentures		26,000
Taxes withheld and paid on share-based compensation	(78)
Proceeds from Business Combination (net of fees and other costs)		104,465
Net cash provided by financing activities	29,774	134,701
(Decrease) increase in cash	(17,945)	102,520
Impact of exchange rate changes on cash	(56)	24
Cash - beginning of period	84,873	10,096
Cash - end of period	$ 66,872	$ 112,640

Warrants

9 Months Ended

Sep. 30, 2022

Warrants

Warrants

5.Warrants

For accounting purposes, the Company was considered to have issued the 15,000,000 common share warrants issued by SOAC as part of the units offered in its initial public offering (“Public Warrants”) and the 9,500,000 private placement common share warrants issued by SOAC in a private placement simultaneously with the closing of the initial public offering (“Private Warrants”) as part of the Business Combination.

Public Warrants

As at September 30, 2022, 15,000,000 (December 31, 2021 - 15,000,000) Public Warrants were outstanding. Public Warrants may only be exercised for a whole number of shares.

As at September 30, 2022, the value of outstanding Public Warrants of $19.5 million was recorded in additional paid in capital.

Private Warrants

As at September 30, 2022, 9,500,000 Private Warrants were outstanding (December 31, 2021 - 9,500,000).

The Company re-measures the fair value of the Private Warrants at the end of each reporting period. The Private Warrants were valued using a Black-Scholes model, which resulted in a Level 3 fair value measurement. The primary unobservable input utilized in determining the fair value of the Private Warrants was the expected volatility of the Company’s common shares. The expected volatility was estimated using a binomial model based on consideration of the implied volatility from the Company’s Public Warrants adjusted to account for the call feature of the Public Warrants at prices above $18.00 during 20 trading days within any 30-trading day period.

As at September 30, 2022, the fair value of outstanding Private Warrants of $2.2 million is recorded as warrants liability. The following table presents the changes in the fair value of warrants liability:


	Private
	Warrants
Warrants liability as at December 31, 2021	$	3,126
Decrease in fair value of warrants liability		(892)
Warrants liability as at September 30, 2022	$	2,234

As at September 30, 2022 and December 31, 2021, the fair value of the Private Warrants was estimated using the following assumptions:


	September 30,			December 31,
	2022			2021
Exercise price	$	11.50		$	11.50
Share price	$	1.05		$	2.08
Volatility		91.72	%		64.6	%
Term		3.9 years			4.7 years
Risk-free rate		4.07	%		1.2	%
Dividend yield		0.0	%		0.0	%

There were no exercises or redemptions of the Public Warrants or Private Warrants during the three and nine months ended September 30, 2022.

Allseas Warrants

Allseas holds warrants to purchase common shares (the Allseas Warrants), which will vest and become exercisable upon successful completion of the PMTS and will expire on September 30, 2026. 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 the PMTS is completed after September 30, 2025. The Company will record the expense for the Allseas Warrants upon successful completion of the pilot trial of the PMTS in the NORI Area D. No expense or liability has been recorded as at and for the three and nine months ended September 30, 2022.

With the successful completion of the pilot trial of the PMTS, as approved by the Company’s Board of Directors on November 11, 2022, the 11.6 million Allseas Warrants have vested and are exercisable (Note 12).

Segmented Information

9 Months Ended

Sep. 30, 2022

Segmented Information

Segmented Information

11.Segmented Information

The Company’s business consists of only one operating segment, namely exploration of seafloor polymetallic nodules, which includes the development of a metallurgical process to treat such seafloor polymetallic nodules.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI https://asc.fasb.org/topic&trid=2134510

+ Details

Share-Based Compensation - Restricted Stock Units (Details) - Restricted stock units - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Vesting Period
Granted	0		476,189
Vesting Immediately
Vesting Period
Granted	8,576		1,721,729
Vesting in thirds on each anniversary of the grant date
Vesting Period
Granted	95,238	56,224	464,632	56,224
Vesting in fourths on each anniversary of the grant date
Vesting Period
Granted			527,800
Vesting fully on the anniversary of the grant date
Vesting Period
Granted			476,189

Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Common Shares	Preferred Shares	Special Shares	Additional Paid in Capital	Accumulated Other Comprehensive Loss	Deficit	Total
Balance at Dec. 31, 2020	$ 154,431	$ 550		$ 45,347	$ (1,216)	$ (162,858)	$ 36,254
Balance (in Shares) at Dec. 31, 2020	189,493,593
Exercise of stock options	$ 14,297			(10,061)			4,236
Exercise of stock options (in shares)	6,312,902
Common shares to be issued for exploration and evaluation expenses (in shares)	4,245,031
Common shares to be issued for exploration and evaluation expenses	$ 25,664			(12,879)			12,785
Share-based compensation				55,276			55,276
Conversion of debentures	$ 27,003						27,003
Conversion of debentures (in shares)	3,126,565
Common shares to be issued for stock options exercise	$ 1,296						1,296
Common shares issued for services (in shares)	187,432
Net equity from Business Combination	$ 60,987			30,339			91,326
Common shares issued for acquisition of Tonga Offshore Minerals Limited	60,987			30,339			91,326
Conversion of preferred shares to common shares	$ 550	(550)
Conversion of preferred shares to common shares (in shares)	509,458
Loss for the period						(121,501)	(121,501)
Balance (in Shares) at Sep. 30, 2021	203,874,981
Balance at Sep. 30, 2021	$ 284,228	0	$ 0	108,022	(1,216)	(284,359)	106,675
Balance at Jun. 30, 2021	$ 188,901	550		72,541	(1,216)	(247,708)	13,068
Balance (in Shares) at Jun. 30, 2021	197,794,399
Exercise of stock options	$ 6,039			(4,366)			1,673
Exercise of stock options (in shares)	2,321,967
Share-based compensation				9,508			9,508
Conversion of debentures	$ 26,503						26,503
Conversion of debentures (in shares)	3,068,672
Common shares issued for services	$ 1,248						1,248
Common shares issued for services (in shares)	180,485
Net equity from Business Combination	$ 60,987			30,339			91,326
Common shares issued for acquisition of Tonga Offshore Minerals Limited	60,987			30,339			91,326
Conversion of preferred shares to common shares	$ 550	(550)
Conversion of preferred shares to common shares (in shares)	509,458
Loss for the period						(36,651)	(36,651)
Balance (in Shares) at Sep. 30, 2021	203,874,981
Balance at Sep. 30, 2021	$ 284,228	0	0	108,022	(1,216)	(284,359)	106,675
Balance at Dec. 31, 2021	$ 296,051	$ 0	$ 0	102,073	(1,216)	(304,157)	92,751
Balance (in Shares) at Dec. 31, 2021	225,432,493
Exercise of stock options	$ 142			(66)			76
Exercise of stock options (in shares)	118,461
Conversion of restricted share units, net of shares withheld for taxes (in shares)	1,670,429
Conversion of restricted share units, net of shares withheld for taxes	$ 2,984			(3,062)			(78)
Share purchase under employee share purchase plan	$ 66			(10)			56
Share purchase under employee share purchase plan (in shares)	42,426
Share-based compensation				17,982			17,982
Loss for the period						(61,395)	(61,395)
Balance (in Shares) at Sep. 30, 2022	265,529,989
Balance at Sep. 30, 2022	$ 328,911			116,917	(1,216)	(365,552)	79,060
Issuance of shares under PIPE financing - net proceeds	$ 29,668						29,668
Issuance of shares under PIPE financing - net proceeds (in shares)	38,266,180
Balance at Jun. 30, 2022	$ 299,056			113,487	(1,216)	(337,658)	73,669
Balance (in Shares) at Jun. 30, 2022	227,158,455
Exercise of stock options	$ 120			(56)			64
Exercise of stock options (in shares)	100,000
Conversion of restricted share units, net of shares withheld for taxes (in shares)	5,354
Conversion of restricted share units, net of shares withheld for taxes	$ 67			(67)
Share-based compensation				3,553			3,553
Loss for the period						(27,894)	(27,894)
Balance (in Shares) at Sep. 30, 2022	265,529,989
Balance at Sep. 30, 2022	$ 328,911			$ 116,917	$ (1,216)	$ (365,552)	79,060
Issuance of shares under PIPE financing - net proceeds	$ 29,668						$ 29,668
Issuance of shares under PIPE financing - net proceeds (in shares)	38,266,180

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
SSCS Pte. Ltd
Related Party Transactions
Consulting services	$ 69	$ 75	$ 206	$ 213
Amount payable					$ 23
SSCS Pte. Ltd \| General and administration expenses
Related Party Transactions
Consulting services	14	15	41	43
SSCS Pte. Ltd \| Exploration and Evaluation
Related Party Transactions
Consulting services	55	60	165	170
Ocean Renaissance LLC
Related Party Transactions
Amount payable					$ 0
Ocean Renaissance LLC \| General and administration expenses
Related Party Transactions
Consulting services		$ 93		$ 281
Ocean Renaissance LLC \| Exploration and evaluation activities
Related Party Transactions
Consulting services	$ 94		$ 281