What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-15 · 129 added, 111 removed, 296 unchanged (45% of the section changed)

3 unchanged sentences

(in thousands of US Dollars, except share amounts)

September 30,

Receivables and prepayments

18 unchanged sentences

Three months ended

Six months ended

(Restated 1 )

Nine months ended

September 30,

Operating expenses

9 unchanged sentences

Weighted average number of common shares outstanding — basic and diluted

(1) The condensed consolidated statements of loss and comprehensive loss for the three and six months ended June 30, 2021 were restated.

Refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission on November 15, 2021.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4 unchanged sentences

Comprehensive

Three months ended June 30, 2022

March 31, 2022

Three months ended September 30, 2022

June 30, 2022

Issuance of shares under PIPE financing - net proceeds (Note 9)

Exercise of stock options (Note 6)

Conversion of restricted share units, net of shares withheld for taxes (Note 6)

Share purchase under Employee Share Purchase Plan (Note 6)

Share-based compensation (Note 6)

Expenses to be settled in share-based payments

Loss for the period

June 30, 2022

Three months ended June 30, 2021

(Restated 1 )

September 30, 2022

Three months ended September 30, 2021

Common Shares

Comprehensive

March 31, 2021

June 30, 2021

Exercise of stock options (Note 6)

Share-based compensation (Note 6)

Conversion of debenture

Common shares issued for services

Net equity from Business Combination

Conversion of preferred shares to common shares

Loss for the period

June 30, 2021

(1) The condensed consolidated statement of changes in shareholders’ equity for the three months ended June 30, 2021 was restated.

Refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission on November 15, 2021.

September 30, 2021

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4 unchanged sentences

Comprehensive

Six months ended June 30, 2022

Nine months ended September 30, 2022

December 31, 2021

Issuance of shares under PIPE financing - net proceeds (Note 9)

Exercise of stock options (Note 6)

3 unchanged sentences

Loss for the period

June 30, 2022

Six months ended June 30, 2021

September 30, 2022

Nine months ended September 30, 2021

Common Shares

(Restated 1 )

Comprehensive

3 unchanged sentences

Share-based compensation (Note 6)

Common shares to be issued for stock options exercise

Common shares issued for services

Net equity from Business Combination

Conversion of debentures

Conversion of preferred shares to common shares

Loss for the period

June 30, 2021

The condensed consolidated statement of changes in shareholders’ equity for the six months ended June 30, 2021 was restated.

Refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission on November 15, 2021.

September 30, 2021

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands of US Dollars)

Six months ended

(Restated 1 )

Nine months ended

September 30,

Cash provided by (used in)

15 unchanged sentences

Financing activities

Proceeds from PIPE financing

Expenses paid for PIPE financing

Proceeds from employee share purchase plan

2 unchanged sentences

Taxes withheld and paid on share-based compensation

Net cash (used in) provided by financing activities

Proceeds from Business Combination (net of fees and other costs)

Net cash provided by financing activities

(Decrease) increase in cash

2 unchanged sentences

Cash - end of period

The condensed consolidated statement of cash flows for the six months ended June 30, 2021 was restated.

Refer to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 filed with the Securities and Exchange Commission on November 15, 2021.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

12 unchanged sentences

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) for electric vehicles (“EV”) and renewable energy storage markets, (ii) nickel-copper-cobalt matte and/or copper cathode for EV wiring, clean energy transmission and other applications and (iii) manganese silicate for manganese alloy production require for steel production.

Exploration and exploitation of seabed minerals in international waters is regulated by the International Seabed Authority (“ISA”), an intergovernmental organization established in 1994 pursuant to the United Nations Convention on the Law of the Sea.

ISA contracts are granted to sovereign states or to private contractors who are sponsored by a sovereign state.

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.

2 unchanged sentences

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 km 2 in the CCZ (“Marawa Area”).

The Company through its subsidiary DeepGreen Engineering Pte.

(“DGE”) entered into an option agreement (the “Marawa Option Agreement”) with Marawa to acquire the right to purchase tenements, as may be granted to Marawa by the ISA or any other regulatory body, granted to exclusively collect nodules from the Marawa Area in return for a royalty payable to Marawa.

In 2013, the Company through its subsidiary DeepGreen Engineering Pte.

(“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.

9 unchanged sentences

Basis of Presentation

These unaudited condensed consolidated interim financial statements are prepared in accordance with US Generally Accepted Accounting Principles (“US GAAP”) for interim financial statements.

Accordingly, certain information and footnote disclosures required by US GAAP have been condensed or omitted in these unaudited condensed consolidated interim financial statements pursuant to such rules and regulation.

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.

2 unchanged sentences

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

18 unchanged sentences

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 six months ended June 30, 2022 and 2021.

As at June 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.

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.

21 unchanged sentences

Strategic Partnerships

Strategic Alliance with Allseas Pilot Mining Test Project

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 will be payable upon successful completion of the pilot trial of the Pilot Mining Test System (“PMTS”) in NORI Area D.

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 six months ended June 30, 2022 amounted to $1.3 million and $2.6 million, respectively (three and six months ended June 30, 2021 amounted to $nil).

The Company has not recorded a liability for the third payment as at June 30, 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 June 30, 2022, Allseas owned 17.2 million TMC common shares (December 31, 2021 – 16.2 million TMC common shares) which constituted 7.6% (December 31, 2021 – 7.2%) of total common shares outstanding.

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:

For the three months ended June 30, 2022

Exploration labor

Offshore campaigns

Share-based compensation (Note 6)

External consulting

Travel, workshop and other

For the three months ended June 30, 2021

For the three months ended September 30, 2022

Environmental Studies

Exploration Labor

Offshore campaigns

Mining, Technological and Process Development

Share-based compensation (Note 6)

External consulting

Travel, workshop and other

Sponsorship, Training and Stakeholder Engagement

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)

For the six months ended June 30, 2022

For the three months ended September 30, 2021

Environmental Studies

Exploration Labor

Offshore campaigns

Mining, Technological and Process Development

Share-based compensation (Note 6)

External consulting

Travel, workshop and other

For the six months ended June 30, 2021

Sponsorship, Training and Stakeholder Engagement

For the nine months ended September 30, 2022

Environmental Studies

Exploration Labor

Offshore campaigns

Mining, Technological and Process Development

Share-based compensation (Note 6)

External consulting

Travel, workshop and other

Sponsorship, Training and Stakeholder Engagement

For the nine months ended September 30, 2021

Environmental Studies

Exploration Labor

Mining, Technological and Process Development

Share-based compensation (Note 6)

Sponsorship, Training and Stakeholder Engagement

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 June 30, 2022, 15,000,000 (December 31, 2021 - 15,000,000) Public Warrants were outstanding.

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.

On October 7, 2021, the Company filed a Registration Statement on Form S-1 with respect to the common shares underlying the Public Warrants, as well as the Private Warrants, which was declared effective by the SEC on October 22, 2021.

Following the Company’s filing of its Annual Report on Form 10-K for the year ended December 31, 2021, the Company has filed a post-effective amendment to the Registration Statement on Form S-1, which was declared effective by the SEC on July 12, 2022.

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

Private Warrants

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

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

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)

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.

2 unchanged sentences

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 June 30, 2022, the fair value of outstanding Private Warrants of $2.6 million is recorded as warrants liability.

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:

1 unchanged sentence

Decrease in fair value of warrants liability

Warrants liability as at June 30, 2022

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

Warrants liability as at September 30, 2022

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

September 30,

Exercise price

1 unchanged sentence

Dividend yield

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

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

2 unchanged sentences

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 six months ended June 30, 2022.

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.

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).

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)

Share-Based Compensation

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 June 30, 2022, there were 15,475,638 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 six months ended June 30, 2022, 18,461 STIP stock options were exercised and no new options were granted.

During the three and six months ended June 30, 2022, the Company recognized $3.6 million and $7.4 million respectively (three and six months ended June 30, 2021 - $15.4 million and $45.8 million, respectively) of share-based compensation expense for stock options in the statement of loss and comprehensive loss.

For the three and six months ended June 30, 2022 a total of $1.9 million and $3.9 million respectively, was recorded in exploration and evaluation expenses (three and six months ended June 30, 2021 - $9.5 million and $27.6 million, respectively).

The amount recorded in general and administration expenses for three and six months ended June 30, 2022 was $1.7 million and $3.5 million respectively (three and six months ended June 31, 2021 - $5.9 million and $18.2 million respectively).

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 six months ended June 30, 2022 are described below.

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

Vesting Period

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

Vesting Immediately

3 unchanged sentences

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 six months ended June 30, 2022, an aggregate of 476,189 RSUs 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 amounted to $700,000.

During the three and six months ended June 30, 2022, a total of $2.1 million and $4.0 million respectively (three and six months ended June 30, 2021 - $nil) was charged to the statement of loss and comprehensive loss as share-based compensation expense for RSUs.

For the three and six months ended June 30, 2022, a total of $1 million and $1.9 million respectively, was recorded in exploration and evaluation expenses (three and six months ended June 30, 2021 - nil).

The amount recorded in general and administration expenses for three and six months ended June 30, 2022 was $1.1 million and $2.1 million respectively (three and six months ended June 31, 2021 -$nil).

As at June 30, 2022, total unrecognized share-based compensation expense for RSUs was $10.6 million (December 31, 2021 - $12.3 million).

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 will be added to the ESPP.

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.

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)

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

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.

1 unchanged sentence

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 end of each purchase period, the accumulated deductions from participating employees are used to purchase common shares of the Company.

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.

5 unchanged sentences

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

During the three and six months ended June 30, 2022, a total of $23 thousand was charged to the condensed consolidated statement of loss and comprehensive loss out of which a total of $8 thousand was recorded in exploration and evaluation expenses and $15 thousand was recorded in general and administration expenses.

The Company issued 42,426 common shares to its employees as part of its ESPP program during the three and six months ended June 30, 2022.

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.

TMC the metals company Inc.

Notes to Condensed Consolidated Financial Statements

(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)

Loss per Share

1 unchanged sentence

Anti-dilutive equivalent common shares were as follows:

Six months ended

Nine months ended

September 30,

Outstanding options to purchase common shares

9 unchanged sentences

A director of DGE is employed through SSCS.

Consulting services during the three and six months ended June 30, 2022 totaled $69 thousand and $138 thousand (three and six months ended June 30, 2021 - $64 thousand and $138 thousand respectively) out of which for three and six months ended June 30, 2022 a total of $55 thousand $110 thousand, respectively (three and six months ended June 30, 2021 - $51 thousand and $110 thousand, respectively) is disclosed as exploration labor within exploration and evaluation expenses (Note 4) and $14 thousand and $28 thousand respectively for three and six months ended June 30, 2022 is disclosed as general and administration expenses (three and six months ended June 30, 2021 - $13 thousand and $28 thousand respectively).

As at June 30, 2022, the amount payable to SSCS was $49 thousand (December 31, 2021 - $23 thousand).

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

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.

TMC the metals company Inc.

1 unchanged sentence

(in thousands of US Dollars, except share and per share amounts and unless otherwise stated)

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 six months ended June 30, 2022 amounted to $94 thousand and $188 thousand respectively (three and six months ended June 30, 2021 -$94 thousand and $188 thousand), evenly apportioned between exploration and evaluation expenses (Note 4) and general and administration expenses for three and six months ended June 30, 2022 and June 30, 2021.

As at June 30, 2022, the amount payable to Ocean Renaissance was $nil (December 31, 2021 - $nil).

Commitments and Contingent Liabilities

1 unchanged sentence

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.

NORI had committed to spend $5 million over the five-year period from 2017 to 2021, which it has exceeded.

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.

15 unchanged sentences

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 by the ISA and such reduction would be dependent upon various factors including the success of the exploration programs and the availability of funding.

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.

Discussions with the ISA are underway to review the progress achieved to date and agree on program activities for the next 5-years, at which point the next five-year commitment will be finalized.

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.

TMC the metals company Inc.

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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.

5 unchanged sentences

Subsequent Events

On August 15, 2022, the Company announced a private placement financing with 25 accredited investors pursuant to three securities purchase agreements the Company entered into with the investors on August 12, 2022.

The Company will issue an aggregate of 37,978,680 common shares to the investors at a price per share of $0.80 ($0.9645 with respect to approximately $100,000 of common shares purchased by the Company’s Chief Executive Officer and Chairman in the private placement financing).

The Company expects to receive aggregate gross cash proceeds of approximately $30.4 million this quarter from the private placement and net cash proceeds of approximately $30 million, after deducting placement agent fees and offering expenses.

The Company agreed to file a resale registration statement for the common shares issued to the investors in the financing with the SEC on or before September 16, 2022.

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).

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements