Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Document And Entity Information | ||
Document Type | 10-Q/A | |
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 | |
Amendment Description | Amendment No. 1 | |
Entity Ex Transition Period | false | |
Amendment Flag | true | |
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 $11.50 per share | |
Trading Symbol | TMCWW | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ 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 |
Condensed Consolidated Balanc_2
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 |
Condensed Consolidated Statemen
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 | [1] | |
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 | |
[1] Three months ended |
Condensed Consolidated Statem_2
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 |
Condensed Consolidated Statem_3
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 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2022 | |
Nature of Operations | |
Nature of Operations | 1. 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 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 km 2 2 2 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. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation | |
Basis of Presentation | 2. 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. Significant Accounting Policies Adopted during the period 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. |
Recent Accounting Pronouncement
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. 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” |
Exploration Contracts
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 |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2022 | |
Warrants | |
Warrants | 5. 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). |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Compensation | |
Share-Based Compensation | 6. 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 $1.7 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
Loss per Share | 9 Months Ended |
Sep. 30, 2022 | |
Loss per Share | |
Loss per Share | 7. 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 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | 8. 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). |
PIPE Financing
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. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingent Liabilities | |
Commitments and Contingent Liabilities | 10. 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 Tran v. TMC the Metals Company, Inc. |
Segmented Information
Segmented Information | 9 Months Ended |
Sep. 30, 2022 | |
Segmented Information | |
Segmented Information | 11. 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | 12. 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). |
Basis of Presentation (Policies
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 | 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 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. |
Exploration Contracts (Tables)
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 |
Warrants (Tables)
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 % |
Share-Based Compensation (Table
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 — |
Loss per Share (Tables)
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 |
Nature of Operations (Details)
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 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
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% |
Exploration Contracts (Details)
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 | $ 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 | |||||||
PMTA | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Payment | $ 10 | |||||||
Completion of the PMTS | ||||||||
Finite-Lived Intangible Assets [Line Items] | ||||||||
Amount payable | $ 10 |
Exploration Contracts - Explora
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 | [1] |
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 | |
[1] Three months ended |
Warrants (Details)
Warrants (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
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 | ||
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 |
Warrants - Fair value of warran
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 |
Warrants - Fair value measureme
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% | 0% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
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 | 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 | 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 | $ 1,700,000 | $ 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% | ||||
2021 Incentive Equity Plan | Non-employee directors | |||||
Share-Based Compensation | |||||
Stock option number of shares outstanding (in shares) | 2,243,853 | 2,243,853 |
Share-Based Compensation - Rest
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 |
Share-Based Compensation - Empl
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% | ||||
Percentage of employees contribution limited to employees annual gross earnings | 15% | ||||
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% | ||||
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% | ||||
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 |
Loss per Share - Anti-dilutive
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 |
Related Party Transactions (Det
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 |
PIPE Financing (Details)
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 |
Commitments and Contingent Li_2
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 ($) | Sep. 30, 2021 USD ($) | [1] | 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 | ||||||||||
[1] Three months ended |
Segmented Information - Schedul
Segmented Information - Schedule of equipment (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segmented Information | |
Number of operating segments | 1 |
Subsequent Events (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 |
Issuance Of Common share | $ / shares | $ 1 |
Allseas Warrants | |
Subsequent Event | |
Final Payment | $ 11.6 |
Warrants Vested to exercisable | $ 11.6 |