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TMC US Equity

TMC the metals Co Inc.Materials · Metal Mining · CIK 1798562 · FY ends Dec 31
$4.79
+0.82 (+20.65%)
USD · as of 2026-08-21 · marketstack

TMC · 10-K · period ended 2020-12-31

← all TMC documents
filed 2021-03-30 · EDGAR original ↗

Our rendering of the filing — original pagination and typography are not reproduced, and tables are reduced to their short label cells (the figures live on FA). Nothing is summarized: every line below is the filing's own text.

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10-K

1

f10k2020_sustainable.htm

ANNUAL REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

to

SUSTAINABLE OPPORTUNITIES

ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

(Address of principal executive offices) (Zip Code)

Registrant’s

telephone number, including area code: (952) 456-5304

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b)

of the Act:

Title of Each Class: Trading Symbol: Name of Each Exchange on Which Registered:

Securities registered pursuant to Section 12(g)

of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer,

as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports

pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports

required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such

shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for

the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically

every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during

the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒

No ☐

Indicate by check mark whether the registrant is a large accelerated

filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition

of “large accelerated filer,” “accelerated filer, “smaller reporting company” and “emerging

growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant

has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided

pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on

and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under

Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued

its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as

defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

As of June 30, 2020, the last business day of the registrant’s

most recently completed second fiscal quarter, the aggregate market value of the ordinary shares outstanding, other than shares

held by persons who may be deemed affiliates of the registrant, computed by reference to the closing sales price for the ordinary

shares on June 30, 2020, as reported on the NYSE, was approximately $291,000,000.

As of March 30, 2021, 30,000,000 Class A ordinary

shares (which includes Class A ordinary shares that are underlying the company’s units), par value $0.0001, and 7,500,000 Class

B ordinary shares, par value $0.0001, were issued and outstanding.

Documents Incorporated by Reference:

None.

TABLE OF CONTENTS

Page

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS iii

PART I 1

Item 1. Business 1

Item 1A. Risk Factors 22

Item 1B. Unresolved Staff Comments 52

Item 2. Properties 52

Item 3. Legal Proceedings 52

Item 4. Mine Safety Disclosures 52

Item 6. Selected Financial Data 54

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 58

Item 8. Financial Statements and Supplementary Data 58

Item 9A. Controls and Procedures 58

Item 9B. Other Information 58

PART III 59

Item 10. Directors, Executive Officers and Corporate Governance 59

Item 11. Executive Compensation 66

Item 14. Principal Accountant Fees and Services 70

Item 15. Exhibit and Financial Statement Schedules 71

i

CERTAIN TERMS

Unless otherwise stated

in this Annual Report on Form 10-K (this “Report”), or the context otherwise requires, references to:

● “Founders” are to Scott Leonard and Scott Honour;

ii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING

STATEMENTS

Some of the statements contained

in this Report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements

include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions

or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations

of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,”

“believe,” “continue,” “could,” “estimate,” “expect,” “intends,”

“may,” “might,” “plan,” “possible,” “potential,” “predict,”

“project,” “should,” “would” and similar expressions may identify forward-looking statements,

but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this

Report may include, for example, statements about our ability to consummate any acquisition or other business combination and

any other statements that are not statements of current or historical facts. These statements are based on management’s

current expectations, but actual results may differ materially due to various factors, including but not limited to:

● our expectations around the performance of the prospective target business;

● our pool of prospective target businesses;

● our public securities’ potential liquidity and trading;

● the lack of a market for our securities;

● the trust account not being subject to claims of third parties; or

● our financial performance.

Future developments affecting

us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some

of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different

from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited

to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize,

or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking

statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information,

future events or otherwise, except as may be required under applicable securities laws. These risks and others described under

“Risk Factors” may not be exhaustive.

By their nature, forward-looking

statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur

in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results

of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from

those made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results or operations,

financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking

statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent

periods.

iii

SUMMARY OF RISK FACTORS

The following is a summary

of the principal risks described below in Part I, Item 1A “Risk Factors” in this Report. We believe that the risks

described in the “Risk Factors” section are material to investors, but other factors not presently known to us or

that we currently believe are immaterial may also adversely affect us. The following summary should not be considered an exhaustive

summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and

the other information contained in this Report.

iv

v

PART I

ITEM 1. BUSINESS

Introduction

We are a blank check company

incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share

purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to throughout

this Report as our initial business combination. We are an emerging growth company and, as such, we are subject to all of the

risks associated with emerging growth companies.

We believe that there are significant,

attractive investment opportunities that exist within industries that benefit from strong Environmental, Social and Governance

(“ESG”) profiles. While investing in ESG covers a broad range of themes, we are focused on evaluating suitable targets

that have existing environmental sustainability practices or that may benefit, both operationally and economically, from our management

team’s commitment and expertise in executing such practices. We believe our management team’s experience allows us

to evaluate targets in industries such as manufacturing (including auto, building materials), chemicals, services (including waste,

environmental, construction), logistics (including transportation, distribution), technology (hardware, software, devices), agriculture

(including biofuels) and energy (with focus on renewable generation, utility services, energy efficiency/management), among others.

Furthermore, our target universe could include companies undergoing a transition to increase their environmental sustainability

profiles, reflecting an opportunity to bring environmentally sustainable practices to companies that may not have historically

been focused on environmental sustainability. We believe there is a wide array of companies undergoing this “brown-to-green”

transition in our target universe. Companies in our target universe tend to have stable growth rates and would greatly benefit

from access to public market capital.

We believe in the ability of

our management team to add significant value to a target company from a commercial, operating, strategic and sustainability perspective.

In particular, we intend to identify and acquire a business that could benefit from a hands-on owner with extensive operational

experience and the public company expertise our management team possesses, or that relies on the target’s executive and

operational expertise but presents potential for an attractive risk-adjusted return profile under our stewardship. Even fundamentally

sound companies can often underperform their potential due to underinvestment, a temporary period of dislocation in the markets

in which they operate, over-levered capital structures, excessive cost structures, incomplete management teams and/or inappropriate

business strategies. Our management team has extensive experience in identifying and executing such strategies. In addition, our

team has significant hands-on experience working with private companies in preparing for and executing an initial public

offering and serving as active owners and directors by working closely with these companies to continue their transformations

and help create value in the public markets.

Our Founders, Our Board of Directors and

Management

Scott Leonard serves as our

Chief Executive Officer and on our board of directors. Mr. Leonard has over 15 years of experience leading highly successful

business transformations and transitions. Mr. Leonard also has deep expertise over the past eight years driving decarbonization

through technology adoption, product lifecycle management and development and industrial demand destruction. Mr. Leonard

has held various roles at both public and private companies including Chief Executive Officer, Chief Financial Officer, Chief

Restructuring Officer and Independent Director. Previously, Mr. Leonard served as Chief Financial Officer/Chief Restructuring

Officer at GenOn Energy from 2017 until 2018, and Chief Executive Officer of GenOn Mid-Atlantic LLC in 2018. From 2014 to

2016, Mr. Leonard was at Hewlett Packard Enterprise (NYSE: HPE), where he served as the Senior Vice President of Global Commercial

Functions for the Enterprise Services business. Prior to that, Mr. Leonard served as Deputy Executive Director, Chief Strategy & Administrative Officer for the Texas Department of Transportation from 2012 to 2014. From 2005 to 2012, Mr. Leonard

held positions as Senior Vice President, Performance Improvement and Vice President, Corporate Planning at TXU Corp. and its successor

Energy Future Holdings Corp. Mr. Leonard previously served on the board of directors of NRG REMA, LLC and Lonestar II Generation

Holdings. Earlier in his career, Mr. Leonard was with McKinsey & Co. as a management consultant and Donaldson Lufkin & Jenrette as an investment banker. Mr. Leonard earned a B.S. with Highest Honors from Georgia Tech, and an M.B.A. with

Distinction from The Kellogg Graduate School of Management at Northwestern.

Scott Honour serves as the

Chairman of our board of directors. Mr. Honour has over 30 years of private equity investment experience and has been involved

in over 100 transactions totaling over $20 billion in transaction value. Mr. Honour is Managing Partner of Northern

Pacific Group (“NPG”), a private equity firm, which he co-founded in 2012. Prior to that, Mr. Honour

was at The Gores Group, a Los Angeles based private equity firm, for ten years, serving as Senior Managing Director and one of

the firm’s top executives. During his time at The Gores Group, the firm raised four funds, totaling $4 billion in aggregate,

and made over 35 investments. Mr. Honour also served on the investment committee for The Gores Group. Prior to joining The

Gores Group, Mr. Honour was a Managing Director at UBS Investment Bank from 2000 to 2002 and was an investment banker at

Donaldson, Lufkin & Jenrette from 1991 to 2000. Mr. Honour began his career at Trammell Crow Company in 1988. Mr. Honour

has served on the board of directors of numerous public and private companies, including Solar Spectrum Holdings LLC, Anthem Sports & Entertainment Inc., 1st Choice Delivery, LLC, United Language Group, Inc., Renters Warehouse LLC, Real Dolmen

(REM:BB) and Westwood One, Inc. (formerly Nasdaq: WWON), and is a co-founder of Titan CNG LLC and YapStone Inc. Mr. Honour

earned a B.S. and B.A., cum laude, in Business Administration and Economics from Pepperdine University and an M.B.A.

in Finance and Marketing from the Wharton School of the University of Pennsylvania.

1

David Quiram serves as our

Chief Financial Officer. Dr. Quiram has over 20 years of leadership experience in technology, strategy and finance organizations

with a deep understanding of the chemicals, emerging technology, bioscience and energy sectors. Previously, Dr. Quiram served

as Head of Financial Planning and Analysis and Tax at GenOn Energy (“GenOn”) from 2017 until 2019, where he was responsible

for standing up the financial and administrative functions of GenOn as a stand-alone entity from NRG Energy Inc. (NYSE: NRG).

Prior to that, Dr. Quiram served as Head of Investments for Enterprise Services of Hewlett Packard Enterprise (NYSE: HPE) from

2014 until 2017, where he directed investments into products and services. From 2010 to 2014, Dr. Quiram was with Accenture (NYSE:

ACN) as a Senior Manager in their Strategy practice focused on transforming utilities, independent power producers, and energy

retailers. From 2006 to 2009, Dr. Quiram worked at multiple roles at TXU Energy starting in finance and later served as Vice President

of Retail Pricing and Procurement where he led the pricing and hedging for TXU Energy’s retail portfolio. Dr. Quiram began

his career at McKinsey & Co where he worked as an Engagement Manager from 2001 until 2005, and as a Research Scientist at

DuPont (NYSE: DD) from 1998 to 2001. Dr. Quiram earned a B.S. in Chemical Engineering with Highest Distinction from the University

of Virginia, and an M.S. and Ph.D. in Chemical Engineering from the Massachusetts Institute of Technology.

Rick Gaenzle serves on our

board of directors. Mr. Gaenzle has over 30 years of private equity investment and corporate finance experience; he is the

founder and currently serves as a Managing Director of Gilbert Global Equity Capital, L.L.C., the principal investment advisor

to Gilbert Global Equity Partners, L.P. and related entities, a $1.2 billion leveraged buyout and private equity fund. Mr. Gaenzle

spent twenty-eight years at Gilbert Global and its predecessor entity, completing over 110 direct equity investments, co-investments and

add-on acquisitions for portfolio companies. Previously, Mr. Gaenzle was a Principal of Soros Capital L.P., the principal

venture capital and leveraged equity entity of the Quantum Group of Funds and a principal advisor to Quantum Industrial Holdings

Ltd. Prior to joining Soros Capital, Mr. Gaenzle held various positions at PaineWebber Inc. Mr. Gaenzle currently serves

as a Senior Advisor to Impact Delta, an impact-investing and impact-measurement advisory firm; an Operating Partner

of NPG; and Chairman of Lake Street Homes, a single-family rental investment vehicle. Mr. Gaenzle holds a B.A. from

Hartwick College and an M.B.A. from Fordham University.

Isaac Barchas serves on our

board of directors. Mr. Barchas is the President and Chief Executive Officer of Research Bridge Partners (“RBP”),

a socially-driven investment company, which he founded in 2016. RBP uses both concessionary and nonconcessionary investment

to create startup companies based on university research and advance those companies into the venture capital markets. Prior to

founding RBP, Mr. Barchas led the Austin Technology Incubator (“ATI”) at The University of Texas at Austin from

2006 to 2016. ATI’s Clean Energy Incubator was the first university clean tech incubation program in the United States.

During Mr. Barchas’ leadership, ATI companies raised over $1 billion in the capital markets. Mr. Barchas

joined the university from McKinsey & Co., where he worked in the Chicago, Sydney, Auckland, and Dallas offices, from 1996

to 2006 and served on the leadership teams of McKinsey’s North American Healthcare Practice and Global Organization Practice.

Mr. Barchas has served on multiple private company boards and on philanthropic boards including Pecan Street Inc., the largest

analytically-focused clean energy and climate data consortium in the United States, where he was a founding board member.

Mr. Barchas earned a J.D. (honors) and M.A. (Century Fellowship) from The University of Chicago. He received an A.B. from

Stanford University (honors and Phi Beta Kappa).

Justin Kelly serves on our

board of directors. Mr. Kelly is currently the Chief Executive Officer and Chief Investment Officer of Winslow Capital Management,

LLC (“Winslow Capital”), Nuveen’s center of excellence for growth investing. Mr. Kelly also serves

as lead portfolio manager on the firm’s flagship U.S. Large Cap Growth Strategy. Mr. Kelly has been with Winslow Capital

for over two decades and has transformed the firm from a single strategy, niche investment firm to a thought leader globally in

growth equity investing with four strategies. Prior to joining Winslow Capital in 1999, Mr. Kelly was an equity analyst at

Investment Advisors in Minneapolis. Prior to that, Mr. Kelly worked at Prudential Bache, from 1993 to 1996 as Investment

Banker, and Salomon Brothers, from 1996 to 1997 as Investment Banker. Mr. Kelly earned a B.S. in Finance/Investments from

Babson College.

2

We are further supported by

our team of advisors comprised of former senior executives from leading global companies with experience in a wide range of sub-sectors and

functional areas, who have previously worked together over the last decade or more. They provide us with access to their expertise

and extensive industry networks from which we intend to source and evaluate targets as well as devise plans to optimize any business

that we acquire.

Our management team is supported

by NPG, a technology and business services focused private equity firm based in Wayzata, Minnesota. NPG has considerable experience

investing in ESG related portfolio companies with community impact, workplace diversity and integrity, and environmental resource

management acting as cornerstones to key investment decisions. NPG has offset its carbon footprint to net zero, achieving CarbonNeutral®

status. The partners of NPG have been involved in acquisitions, financings and advisory transactions totaling over $20 billion

in transaction value and have significant experience investing across a variety of economic cycles and a track record of identifying

high-quality assets, businesses and management teams with significant resources, capital and optimization potential.

With respect to the above,

past performance of our management team is not a guarantee of either (i) success with respect to a business combination that may

be consummated or (ii) the ability to successfully identify and execute a transaction. You should not rely on the historical record

of management or their respective affiliates as indicative of future performance. See “Item 1A. Risk Factors — Past

performance by our management team, including investments and transactions in which they have participated and businesses with

which they have been associated, may not be indicative of future performance of an investment in us, and we may be unable to provide

positive returns to shareholders.” For a list of our executive officers and entities for which a conflict of interest may

or does exist between such officers and the company, please refer to “Item 10. Directors, Executive Officers and Corporate

Governance—Conflicts of Interest.”

Proposed Business Combination

Merger Agreement

On March 4, 2021, we entered

into a Business Combination Agreement (as it may be amended, supplemented or otherwise modified from time to time, the “Business

Combination Agreement”), by and among SOAC, 1291924 B.C. Unlimited Liability Company, an unlimited liability company existing

under the laws of British Columbia, Canada (“NewCo Sub”), and DeepGreen Metals Inc., a company existing under the

laws of British Columbia, Canada (“DeepGreen”).

The Business Combination

Pursuant to the Business Combination

Agreement, SOAC will migrate to and be continued as a company in British Columbia, Canada (the “SOAC Continuance”).

Following the SOAC Continuance, pursuant to a plan of arrangement (the “Plan of Arrangement”) under the Business

Corporations Act (British Columbia), (i) SOAC will acquire all of the issued and outstanding shares in the capital of

DeepGreen (the “DeepGreen Shares”) from DeepGreen shareholders in exchange for SOAC Common Shares (as defined below)

and Company Earnout Shares (as defined below) (the “Share Exchange”), (ii) DeepGreen will become a wholly-owned

subsidiary of SOAC, and (iii) DeepGreen and NewCo Sub will amalgamate to continue as one unlimited liability company, in each

case, on the terms and subject to the conditions set forth in the Business Combination Agreement and the Plan of Arrangement and

in accordance with the provisions of applicable law (collectively, with the Share Exchange, the “Share Exchange and Amalgamation”

and, together with the other transactions contemplated by the Business Combination Agreement, the Plan of Arrangement and the

ancillary documents entered into in connection with the Business Combination Agreement, collectively, the “Business Combination”).

In accordance with the terms

and subject to the conditions of the Business Combination Agreement, pursuant to the Plan of Arrangement, each option to purchase

common shares in the capital of DeepGreen (the “DeepGreen Options”) will become an option to purchase SOAC Common

Shares and Company Earnout Shares on the same terms and conditions (including applicable vesting, expiration and forfeiture provisions)

that applied to the corresponding DeepGreen Options immediately prior to closing of the Business Combination.

3

The Business Combination is

expected to close in the second quarter of 2021, following the receipt of the required approval by SOAC’s shareholders and

the fulfillment of other conditions.

Business Combination Consideration

In accordance with the terms

and subject to the conditions of the Business Combination Agreement, pursuant to the Plan of Arrangement, the shareholders and

the optionholders of DeepGreen will be entitled to receive, in exchange for their DeepGreen Shares or DeepGreen Options, as applicable,

(i) shares in the capital of SOAC or comparable equity awards that are settled or are exercisable for shares in the capital of

SOAC, as applicable, based on an implied company equity value of $2.25 billion after giving effect to the SOAC Continuance (the

“SOAC Common Shares”), (ii) 5,000,000 Class A Special Shares, (iii) 10,000,000 Class B Special Shares, (iv) 10,000,000

Class C Special Shares, (v) 20,000,000 Class D Special Shares, (vi) 20,000,000 Class E Special Shares, (vii) 20,000,000 Class

F Special Shares, (viii) 25,000,000 Class G Special Shares and (ix) 25,000,000 Class H Special Shares, in each case, in the capital

of SOAC (collectively, the “Company Earnout Shares”), or, as applicable, options to purchase such SOAC Common Shares

and Company Earnout Shares.

In accordance with the terms

and subject to the conditions of the Business Combination Agreement, immediately prior to closing of the Business Combination,

the Sponsor will exchange 10% of the SOAC Common Shares it will own following the SOAC Continuance for (i) 500,000 Class I Special

Shares (the “Sponsor Earnout Shares”) in the capital of SOAC, and (ii) 741,000 Class J Special Shares in the capital

of SOAC (the “Class J Special Shares”).

Representations and Warranties; Covenants

The Business Combination Agreement

contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of this

type. Each of SOAC and DeepGreen has also agreed to take all action within its power as may be necessary or appropriate such that,

effective immediately after the closing of the Business Combination, the SOAC board of directors shall consist of nine directors,

which shall be comprised of eight individuals determined by DeepGreen prior to the effectiveness of the Registration

Statement on Form S-4 (the “Registration Statement”) and one director determined by the Sponsor,

prior to the effectiveness of the Registration Statement. In addition, SOAC has agreed to adopt an equity incentive plan, as described

in the Business Combination Agreement.

Conditions to Each Party’s Obligations

The

obligation of SOAC and DeepGreen to consummate the Business Combination is subject to certain closing conditions, including, but

not limited to, (i) the absence of any order, law or other legal restraint or prohibition issued by any court of competent jurisdiction

or other governmental entity of competent jurisdiction preventing the consummation of the Business Combination, (ii) the effectiveness

of the Registration Statement, (iii) the approval of SOAC’s shareholders, (iv)

the approval of DeepGreen’s shareholders and optionholders, (v) receipt of a final Canadian court order with respect to

the Plan of Arrangement (the “Final Order”), (vi) receipt of approval or deemed approval by the applicable minister

under Part IV of the Investment Canada Act (Canada) (if required), (vii) the approval by NYSE of SOAC’s initial listing

application in connection with the Business Combination and (viii) SOAC having at least $5,000,001 of net tangible assets

(as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended) remaining after the closing

of the Business Combination.

In

addition, the obligation of DeepGreen to consummate the Business Combination is subject to the fulfillment of other closing conditions,

including, but not limited to, (i) the aggregate cash proceeds from SOAC’s trust account, together with the proceeds from

the PIPE financing, equaling no less than $250,000,000 (after deducting any amounts paid to SOAC shareholders that exercise their

redemption rights in connection with the Business Combination and net of SOAC’s unpaid transaction expenses and SOAC’s

unpaid liabilities), (ii) no SOAC Material Adverse Effect (as defined in the Business Combination Agreement) having occurred that

is continuing, (iii) SOAC having delivered, or caused to be delivered, to DeepGreen, the Registration Rights Agreement (as defined

in the Business Combination Agreement), duly executed by an authorized officer of SOAC and (iv) SOAC having taken all actions

necessary or appropriate such that the board of directors of SOAC consists of the number of directors, and is comprised of the

individuals, determined pursuant to the Business Combination Agreement.

4

Termination

The

Business Combination Agreement may be terminated under certain customary and limited circumstances prior to the closing of the

Business Combination, including, but not limited to, by (i) mutual written consent of SOAC and DeepGreen, (ii) SOAC if the representations

and warranties of DeepGreen are not true and correct or if DeepGreen fails to perform any covenant or agreement set forth in the

Business Combination Agreement such that certain conditions to closing cannot be satisfied and the breach or breaches of such

representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured or cannot be

cured within certain specified time periods, (iii) DeepGreen if the representations and warranties of any SOAC Party (as defined

in the Business Combination Agreement) are not true and correct or if any SOAC Party fails to perform any covenant or agreement

set forth in the Business Combination Agreement such that certain conditions to closing cannot be satisfied and the breach or

breaches of such representations or warranties or the failure to perform such covenant or agreement, as applicable, are not cured

or cannot be cured within certain specified time periods, (iv) either SOAC or DeepGreen if the Business Combination is not consummated

by October 4, 2021, subject to certain limited exceptions, (v) either SOAC or DeepGreen, if any governmental entity of competent

jurisdiction shall have issued an order permanently enjoining or prohibiting the Business Combination and such order shall have

become final and nonappealable, (vi) either SOAC or DeepGreen if certain required approvals are not obtained by SOAC shareholders

after the conclusion of a meeting of SOAC’s shareholders held for such purpose at which such shareholders voted on such

approvals and (vi) SOAC if DeepGreen Required Approval (as defined in the Business Combination Agreement) is not obtained at the

DeepGreen Shareholder Meeting (as defined in the Business Combination Agreement).

If

the Business Combination Agreement is validly terminated, none of the parties to the Business Combination Agreement will have

any liability or any further obligation under the Business Combination Agreement, except in the case of Willful Breach or Fraud

(each, as defined in the Business Combination Agreement) and for customary obligations that survive the termination thereof (such

as confidentiality obligations).

Alternative Transaction

In

the event that the Final Order is not obtained (for any reason other than as a result of a material breach of SOAC’s covenants

or obligations under the Business Combination Agreement), the parties to the Business Combination Agreement have agreed to take

all actions reasonably required to execute and deliver all related documentation in order to complete the Business Combination

by way of an amalgamation under Part 9, Division 3 of the BCBCA (an “Alternative Transaction”). In such event, the

parties may consider effecting a share exchange for certain shareholders prior to consummating the Alternative Transaction.

This description of the Business

Combination Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Business

Combination Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.

Business Strategy

Our acquisition and value creation

strategy is to identify and complete our initial business combination with a company in an industry that complements the experience

and expertise of our management team and is focused on, or could benefit from, environmentally sustainable business practices.

We seek to:

5

● Deliver creative approaches to transaction sourcing;

Our selection process in choosing

an attractive investment opportunity leverages our management team’s network of industry, private equity sponsor, credit

fund sponsor and lending community relationships as well as relationships with management teams of public and private companies,

investment bankers, restructuring advisers, attorneys and accountants, which provides us with a number of business combination

opportunities. We have deployed a proactive, thematic sourcing strategy and focus on companies where we believe the combination

of our operating experience, relationships, capital and capital markets expertise can be a catalyst to transform a target company

and can help accelerate the target’s growth, performance and sustainability profile. Since the completion of our initial

public offering, members of our management team have communicated with their network of relationships to articulate our initial

business combination criteria, including the parameters of our search for a target business, and have begun the disciplined process

of pursuing and reviewing promising leads.

The members of our management

team have experience in:

● Sourcing, structuring, acquiring and selling businesses;

Competitive Strengths

The sourcing, valuation, diligence

and execution capabilities of our management team provide us with a significant pipeline of opportunities from which to evaluate

and select a business that will benefit from our expertise. Our competitive strengths include the following:

6

Investment Criteria

Consistent with our strategy,

we have identified the following general criteria and guidelines which we believe are important in evaluating prospective target

businesses. We have used these criteria and guidelines in evaluating acquisition opportunities, but we may decide to enter into

our initial business combination with a target business that does not meet these criteria and guidelines. We intend to acquire

one or more businesses or entities that we believe:

7

These criteria are not intended

to be exhaustive. Any evaluation relating to the merits of a particular initial business combination may be based, to the extent

relevant, on these general guidelines as well as other considerations, factors and criteria that our management may deem relevant.

In the event that we decide to enter into our initial business combination with a target business that does not meet the above

criteria and guidelines, we will disclose that the target business does not meet the above criteria in our shareholder communications

related to our initial business combination, which, as discussed in this Report, would be in the form of tender offer documents

or proxy solicitation materials that we would file with the SEC.

Our Acquisition Process

In evaluating a prospective

target business, we expect to conduct a thorough due diligence review that will encompass, among other things, meetings with incumbent

management and employees, document reviews, inspection of facilities, as well as a review of financial, operational, legal and

other information which will be made available to us. We will also utilize our operational and capital planning experience.

We are not prohibited from

pursuing an initial business combination with a company that is affiliated with our Sponsor, officers or directors. In the event

we seek to complete our initial business combination with a company that is affiliated with our Sponsor, officers or directors,

we, or a committee of independent directors, will obtain an opinion that our initial business combination is fair to our company

from a financial point of view from either an independent investment banking firm or other independent entity that commonly renders

valuation opinions or an independent accounting firm.

Members of our management team

may directly or indirectly own our ordinary shares and/or private placement warrants following our initial public offering, and,

accordingly, may have a conflict of interest in determining whether a particular target business is an appropriate business with

which to effectuate our initial business combination. Further, each of our officers and directors may have a conflict of interest

with respect to evaluating a particular business combination if the retention or resignation of any such officers and directors

is included by a target business as a condition to any agreement with respect to our initial business combination.

Initial Business Combination

Our initial business combination

must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets

held in the trust account (excluding the amount of deferred underwriting discounts held in trust and taxes payable on the income

earned on the trust account) at the time of signing the agreement to enter into the initial business combination. If our board

of directors is not able to independently determine the fair market value of the target business or businesses or we are considering

an initial business combination with an affiliated entity, we will obtain an opinion with respect to the satisfaction of such

criteria from an independent investment banking firm or other independent entity that commonly renders valuation opinions. We

do not intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination. Subject

to this requirement, our management has virtually unrestricted flexibility in identifying and selecting one or more prospective

businesses, although we are not permitted to effectuate our initial business combination with another blank check company or a

similar company with nominal operations.

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We anticipate structuring our

initial business combination so that the post-transaction company in which our public shareholders own shares will own or

acquire 100% of the equity interests or assets of the target business or businesses. We may, however, structure our initial business

combination such that the post-transaction company owns or acquires less than 100% of such interests or assets of the target

business in order to meet certain objectives of the prior owners of the target business, the target management team or shareholders

or for other reasons, but we will only complete such business combination if the post-transaction company owns or acquires

50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient

for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended, or the Investment

Company Act. Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our

shareholders prior to the business combination may collectively own a minority interest in the post-transaction company,

depending on valuations ascribed to the target and us in the business combination transaction. For example, we could pursue a

transaction in which we issue a substantial number of new shares in exchange for all of the outstanding capital stock of a target.

In this case, we would acquire a 100% controlling interest in the target. However, as a result of the issuance of a substantial

number of new shares, our shareholders immediately prior to our initial business combination could own less than a majority of

our issued and outstanding shares subsequent to our initial business combination. If less than 100% of the equity interests or

assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business

or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test. If the business combination

involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses

and we will treat the target businesses together as the initial business combination for purposes of a tender offer or for seeking

shareholder approval, as applicable. In addition, we have agreed not to enter into a definitive agreement regarding an initial

business combination without the prior consent of our Sponsor.

To the extent we effect our

initial business combination with a company or business that may be financially unstable or in its early stages of development

or growth, we may be affected by numerous risks inherent in such company or business. Although our management will endeavor to

evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all

significant risk factors.

In evaluating a prospective

target business, we expect to conduct a thorough due diligence review which will encompass, among other things, meetings with

incumbent management and employees, document reviews, inspection of facilities, as well as a review of financial, operational,

legal and other information which will be made available to us.

The time required to select

and evaluate a target business and to structure and complete our initial business combination, and the costs associated with this

process, are not currently ascertainable with any degree of certainty. Any costs incurred with respect to the identification and

evaluation of a prospective target business with which our initial business combination is not ultimately completed will result

in our incurring losses and will reduce the funds we can use to complete another business combination.

Other Considerations

We are not prohibited from

pursuing an initial business combination or subsequent transaction with a company that is affiliated with our Sponsor, Founders,

officers or directors. In the event we seek to complete our initial business combination or, subject to certain exceptions, subsequent

material transactions with a company that is affiliated with our Sponsor or any of our Founders, officers or directors, we, or

a committee of independent directors, will obtain an opinion from an independent investment banking firm or other independent

entity that commonly renders valuation opinions that such initial business combination or transaction is fair to our company from

a financial point of view.

In addition, certain of our

Founders, officers and directors presently have, and any of them in the future may have, additional fiduciary and contractual

duties to other entities. As a result, if any of our Founders, officers or directors becomes aware of a business combination opportunity

which is suitable for an entity to which he, she or it has then-current fiduciary or contractual obligations, then, subject

to their fiduciary duties under Cayman Islands law, he, she or it will need to honor such fiduciary or contractual obligations

to present such business combination opportunity to such entity, before we can pursue such opportunity. If these other entities

decide to pursue any such opportunity, we may be precluded from pursuing the same. However, we do not expect these duties to materially

affect our ability to complete our initial business combination. Our amended and restated memorandum and articles of association

provides that we renounce our interest in any business combination opportunity offered to any director or officer unless such

opportunity is expressly offered to such person solely in his or her capacity as a director or officer of the company and it is

an opportunity that we are able to complete on a reasonable basis.

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Our Sponsor, directors and

officers may sponsor, form or participate in other blank check companies similar to ours or may pursue other business or investment

ventures during the period in which we are seeking an initial business combination. Any such companies, businesses or investments

may present additional conflicts of interest in pursuing an initial business combination. However, we do not believe that any

such potential conflicts would materially affect our ability to complete our initial business combination. In addition, our Founders,

officers and directors are not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts

of interest in allocating management time among various business activities, including identifying potential business combinations

and monitoring the related due diligence.

Status as a Public Company

We believe our structure will

make us an attractive business combination partner to target businesses. As an existing public company, we offer a target business

an alternative to the traditional initial public offering through a merger or other business combination with us. In a business

combination transaction with us, the owners of the target business may, for example, exchange their shares of stock in the target

business for our Class A ordinary shares (or shares of a new holding company) or for a combination of our Class A ordinary shares

and cash, allowing us to tailor the consideration to the specific needs of the sellers. We believe target businesses will find

this method a more expeditious and cost effective method to becoming a public company than the typical initial public offering.

The typical initial public offering process takes a significantly longer period of time than the typical business combination

transaction process, and there are significant expenses in the initial public offering process, including underwriting discounts

and commissions, that may not be present to the same extent in connection with a business combination with us.

Furthermore, once a proposed

business combination is completed, the target business will have effectively become public, whereas an initial public offering

is always subject to the underwriter’s ability to complete the offering, as well as general market conditions, which could

delay or prevent the offering from occurring or have negative valuation consequences. Once public, we believe the target business

would then have greater access to capital, an additional means of providing management incentives consistent with shareholders’

interests and the ability to use its shares as currency for acquisitions. Being a public company can offer further benefits by

augmenting a company’s profile among potential new customers and vendors and aid in attracting talented employees.

While we believe that our structure

and our management team’s backgrounds will make us an attractive business partner, some potential target businesses may

view our status as a blank check company, including our lack of an operating history and our potential need to seek shareholder

approval of any proposed initial business combination, negatively.

We are an “emerging growth

company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act. As such, we are eligible to take

advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not

“emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in

our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on

executive compensation and shareholder approval of any golden parachute payments not previously approved. If some investors find

our securities less attractive as a result, there may be a less active trading market for our securities and the prices of our

securities may be more volatile.

In addition, Section 107 of

the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period

provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an

“emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies. We intend to take advantage of the benefits of this extended transition period.

10

We will remain an emerging

growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion

of our initial public offering, (b) in which we have total annual gross revenue of at least $1.07 billion, or (c) in which

we are deemed to be a large accelerated filer, which means the market value of our Class A ordinary shares that are held by non-affiliates exceeds

$700 million as of the prior June 30th, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt

during the prior three-year period.

Financial Position

With funds available for a

business combination initially in the amount of $292,000,000, after payment of the expenses of our initial public offering and

$10,500,000 of deferred underwriting fees, we offer a target business a variety of options such as creating a liquidity event

for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet

by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities,

or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor

the consideration to be paid to the target business to fit its needs and desires. However, we have not taken any steps to secure

third-party financing and there can be no assurance it will be available to us.

Effecting Our Initial Business Combination

General

We are not presently engaged

in, and we will not engage in, any operations for an indefinite period of time following our initial public offering. We intend

to effectuate our initial business combination using cash from the proceeds of our initial public offering, the private placements

of the private placement warrants, our equity, debt or a combination of these as the consideration to be paid in our initial business

combination. We may seek to complete our initial business combination with a company or business that may be financially unstable

or in its early stages of development or growth, which would subject us to the numerous risks inherent in such companies and businesses.

If our initial business combination

is paid for using equity or debt securities, or not all of the funds released from the trust account are used for payment of the

consideration in connection with our initial business combination or used for redemptions of our Class A ordinary shares, we may

apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance

or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred

in completing our initial business combination, to fund the purchase of other companies or for working capital.

Although our management will

assess the risks inherent in a particular target business with which we may combine, we cannot assure you that this assessment

will result in our identifying all risks that a target business may encounter. Furthermore, some of those risks may be outside

of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely affect a target

business.

We may need to obtain additional

financing to complete our initial business combination, either because the transaction requires more cash than is available from

the proceeds held in our trust account, or because we become obligated to redeem a significant number of our public shares upon

completion of the business combination, in which case we may issue additional securities or incur debt in connection with such

business combination. There are no prohibitions on our ability to issue securities or incur debt in connection with our initial

business combination. We are not currently a party to any arrangement or understanding with any third party with respect to raising

any additional funds through the sale of securities, the incurrence of debt or otherwise.

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Sources of Target Businesses

We anticipate that target business

candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private

equity groups, investment banking firms, consultants, accounting firms and large business enterprises. Target businesses may be

brought to our attention by such unaffiliated sources as a result of being solicited by us through calls or mailings. These sources

may also introduce us to target businesses in which they think we may be interested on an unsolicited basis, since many of these

sources will have read the prospectus relating to our initial public offering and know what types of businesses we are targeting.

Our officers and directors, as well as their affiliates, may also bring to our attention target business candidates that they

become aware of through their business contacts as a result of formal or informal inquiries or discussions they may have, as well

as attending trade shows or conventions. In addition, we expect to receive a number of proprietary deal flow opportunities that

would not otherwise necessarily be available to us as a result of the business relationships of our officers and directors. While

we do not presently anticipate engaging the services of professional firms or other individuals that specialize in business acquisitions

on any formal basis, we may engage these firms or other individuals in the future, in which event we may pay a finder’s

fee, consulting fee or other compensation to be determined in an arm’s length negotiation based on the terms of the transaction.

Source: SEC EDGAR (public domain) · 10-K for the period ended 2020-12-31, filed 2021-03-30 · accession 0001213900-21-018753

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