Business Context and Reporting Period
This Form 8-K is a Current Report filed by Sustainable Opportunities Acquisition Corp. (SOAC) on August 25, 2021. The filing addresses Item 8.01 (Other Events) regarding the proposed business combination between SOAC and DeepGreen Metals Inc. (DeepGreen). The report details the issuance of supplemental disclosures to the Proxy Statement/Prospectus following receipt of shareholder demand letters alleging disclosure deficiencies.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, or debt levels for the reporting period. The only specific financial figure disclosed relates to transaction costs:
- Advisory Fee: Citigroup (Citi) will receive a one-time payment of $7,500,000 for advisory services provided in connection with the Business Combination.
- Fee Condition: This fee is payable only upon the successful closing of the Business Combination; if the transaction fails to close, Citi is not entitled to the fee.
Material Changes and Events
The primary material event is the voluntary supplementation of the Proxy Statement/Prospectus to address shareholder concerns. Key developments include:
- Shareholder Litigation Risk: SOAC received six demand letters from purported shareholders between April 12, 2021, and August 10, 2021, alleging disclosure deficiencies regarding the Business Combination.
- Management Stance: SOAC maintains that the original disclosures were compliant and the allegations are without merit. However, the company chose to supplement disclosures to moot the claims, avoid litigation costs, and prevent delays to the closing.
- Supplemental Disclosures:
- Clarification that SOAC entered into non-disclosure agreements with over 90 potential targets, including DeepGreen.
- Disclosure that Citi assisted with financial analysis for investor presentations and will receive the $7.5 million fee upon closing.
- Meeting Schedule: The supplemental disclosures do not affect the timing of the extraordinary general meeting, scheduled for September 3, 2021.
Guidance, Outlook, and Risks
Management Commentary: The Board of Directors continues to recommend that shareholders vote "FOR" the proposals at the extraordinary general meeting. The company emphasizes that the supplemental disclosures are not an admission of legal necessity or materiality.
Risks and Contingencies: The filing includes extensive forward-looking statement disclaimers. Significant risks identified include:
- Failure to obtain shareholder or regulatory approvals.
- Termination of the Business Combination Agreement.
- Technical and commercial feasibility of seafloor polymetallic nodule mining.
- Regulatory uncertainty regarding deep seabed mining and the International Seabed Authority (ISA).
- Market volatility for battery metals and the impact of the COVID-19 pandemic.
Investor Verification Checklist
- Verify the final vote count and outcome of the extraordinary general meeting scheduled for September 3, 2021.
- Confirm the status of regulatory approvals required for the Business Combination, particularly regarding deep seabed mining regulations.
- Review the definitive Proxy Statement/Prospectus (as amended) for full details on the $7.5 million advisory fee and the scope of Citi's involvement.
- Monitor for any updates regarding the six shareholder demand letters and whether litigation was successfully avoided.
- Assess the commercial viability and resource estimates of DeepGreen's seafloor mining operations as detailed in the prospectus.