S-4 1 tm207279-1_s4.htm S-4 tm207279-1_s4 - none - 102.3369984s
As filed with the United States Securities and Exchange Commission on February 14, 2020
Registration No. [•]​
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Mudrick Capital Acquisition Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
6770
(Primary Standard Industrial
Classification Code Number)
2657796
(I.R.S. Employer
Identification Number)
527 Madison Avenue, 6th Floor
New York, NY 10022
Telephone: (646) 747-9500
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
Jason Mudrick
Chief Executive Officer
527 Madison Avenue, 6th Floor
New York, NY 10022
Telephone: (646) 747-9500
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Jaclyn L. Cohen
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Tel: (212) 310-8000
Fax: (212) 310-8007
Stephen M. Jones
Executive Vice President and Chief Financial Officer
Hycroft Mining Corporation
8181 E. Tufts Avenue
Denver, CO 80237
Tel: (303) 524-1947
Fax: (775) 201-1045
David S. Stone
Neal, Gerber & Eisenberg LLP
Two North LaSalle Street, Suite 1700
Chicago, IL 60602
Tel: (312) 269-8411
Fax: (312) 578-1796
Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after this Registration Statement is declared effective and all other conditions to the business combination
described in the enclosed Joint Proxy Statement/Prospectus have been satisfied or waived.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐
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 the definitions 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 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities
to be Registered
Amount to be
Registered(1)
Proposed maximum
offering price per
share(2)
Proposed maximum
aggregate offering
price(2)
Amount of
registration fees
Class A common stock, par value $0.0001 per share
17,356,861
$ 10.00 $ 173,568,610 $ 22,529.21
(1)
Represents the maximum number of shares of Class A common stock, par value $0.0001 per share (“Class A common stock”) of Mudrick Capital Acquisition Corporation, a Delaware corporation (“MUDS”), that will be issued to Hycroft Mining Corporation, a Delaware corporation (“Seller”) and distributed to the stockholders of Seller in the business combination.
(2)
Estimated solely for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the United States Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 
EXPLANATORY NOTE
Pursuant to the business combination, Mudrick Capital Acquisition Corporation (“MUDS”) intends to acquire all of the issued and outstanding equity interests of the direct subsidiaries of Hycroft Mining Corporation (“Seller”) and substantially all of the other assets and liabilities of Seller. As a result, MUDS has determined that it is appropriate to include in this registration statement on Form S-4 (the “Registration Statement”) the financial statements of Seller and its consolidated subsidiaries as the financial statements of the acquired business.
 

The information in this preliminary joint proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described herein until the registration statement filed with the United States Securities and Exchange Commission is declared effective. This preliminary joint proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS — SUBJECT TO COMPLETION, DATED FEBRUARY 14, 2020
JOINT PROXY STATEMENT/PROSPECTUS FOR SPECIAL MEETING OF MUDRICK CAPITAL ACQUISITION CORPORATION AND SPECIAL MEETING OF HYCROFT MINING CORPORATION
PROSPECTUS FOR
17,356,861 SHARES OF CLASS A COMMON STOCK
The board of directors of Mudrick Capital Acquisition Corporation (the “MUDS Board”), a Delaware corporation (“MUDS,” the “Company,” “we,” “us” or “our”) has approved (a) the purchase agreement, dated as of January 13, 2020 (as it may be amended from time to time, the “Purchase Agreement”), by and among MUDS, MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect, wholly-owned subsidiary of MUDS (“Acquisition Sub”) and Hycroft Mining Corporation, a Delaware corporation (“Seller”), pursuant to which (i) Acquisition Sub will acquire from Seller the issued and outstanding equity interests of Allied Nevada Gold Holdings, LLC, a Nevada limited liability company (“Nevada Gold”), Allied VGH Inc., a Nevada corporation (“Allied VGH”) and Allied Nevada Delaware Holdings Inc., a Delaware corporation (“Allied Delaware” and, together with Nevada Gold and Allied VGH, the “Hycroft direct subsidiaries”), the direct subsidiaries of Seller, and MUDS or Acquisition Sub will acquire substantially all of the assets and assume substantially all of the liabilities of Seller (such equity interests and assets and liabilities together, the “Hycroft business”) in exchange for (x) shares of HYMC Class A common stock (as defined herein) and (y) the 1.5 Lien Notes and the Excess Notes, if any (each as defined herein), (ii) Seller will promptly distribute all of the shares of HYMC Class A common stock it receives to its stockholders pro rata (the “distribution”) and (iii) the parties will consummate the other transactions contemplated thereby, including (x) the assumption by MUDS of  (A) up to $80,000,000 in aggregate principal amount of Seller’s New Subordinated Notes (as defined herein) (the “Assumed New Subordinated Notes”) and (B) Seller’s obligations under the Sprott Credit Agreement (as defined herein) (collectively, the “debt assumption”) and (y) the payoff of certain outstanding indebtedness of Seller, including the First Lien Credit Agreement and the Jacobs Note (each as defined herein) (such amount, the “payoff amount”), on the terms and subject to the conditions set forth therein, (b) the exchange agreement, dated as of January 13, 2020 (the “Exchange Agreement”), by and among Seller, Acquisition Sub, the 1.25 Lien Noteholders (as defined herein) and 1.5 Lien Noteholders (as defined herein), pursuant to which Acquisition Sub will acquire any New Subordinated Notes in excess of the Assumed New Subordinated Notes (such notes, the “Excess Notes”) and the issued and outstanding 1.5 Lien Notes (as defined herein) (the “exchange”), and (c) the conversion and consent agreement, dated as of January 13, 2020 (the “Second Lien Conversion Agreement”), by and among Seller and all of the Second Lien Noteholders (as defined herein), pursuant to which the Second Lien Noteholders have agreed to convert their Second Lien Notes (as defined herein) into shares of Seller common stock (the “conversion,” and all of the transactions described in the foregoing clauses (a) — (c) in the order provided for in the Purchase Agreement and the Exchange Agreement and the Second Lien Conversion Agreement, together, the “business combination”). Copies of the Purchase Agreement and the Exchange Agreement are attached to this joint proxy statement/prospectus as Annex A and Annex B, respectively. In connection with the consummation of the business combination, MUDS will change its name to “Hycroft Mining Holding Corporation.” We refer to MUDS following the consummation of the business combination as “HYMC.”
Upon effectiveness of the business combination, HYMC’s issued and outstanding share capital will consist of, assuming the separation of all public units (as defined herein) into shares and warrants: (A) up to 17,356,861 shares of Class A common stock, par value $0.0001 per share (“HYMC Class A common stock”), issued to Seller and distributed to Seller’s stockholders in the business combination (the “purchase shares”), (B) up to 3,258,333 shares of HYMC Class A common stock, which shares shall have converted from an equal number of shares of MUDS Class B common stock in accordance with the terms of the Amended and Restated Certificate of Incorporation of MUDS, as amended, in effect immediately prior to the consummation of the business combination and the Parent Sponsor Letter Agreement, dated as of January 13, 2020, by and between MUDS and Mudrick Capital Acquisition Holdings LLC (“sponsor”), (C) up to 19,026,474 shares of HYMC Class A common stock issued to the holders of the Excess Notes and the 1.5 Lien Notes in the exchange, (D) (x) up to 6,500,000 shares of HYMC Class A common stock issued pursuant to (i) the Subscription/Backstop Agreements, each dated as of January 13, 2020, by and between the Initial Subscribers (as defined herein) and MUDS and/or (ii) such other subscription agreements with certain Third-Party Private Investors (as defined herein) and (y) 3,250,000 warrants (the “PIPE warrants”) to purchase one share of HYMC Class A common stock for $11.50 per share issued to the Initial Subscribers, in each case, in a private placement offered to a limited number of accredited investors (as defined by Rule 501 of Regulation D) pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “private investment”), (E) up to 1,000,000 shares of HYMC Class A common stock issued in connection with an incremental equity investment in an aggregate amount of $10,000,000, (F) up to 6,909,287 shares of HYMC Class A common stock, representing outstanding shares held by MUDS public stockholders and not redeemed in connection with the business combination (assuming no redemption of MUDS Class A common stock (as defined herein) in connection with the business combination), (G) 20,800,000 outstanding warrants to purchase one share of HYMC Class A common stock for $11.50 per share (“public warrants”), (H) 625,000 shares of HYMC Class A common stock (the “forward purchase shares”) and 2,500,000 units (the “forward purchase units”), each such unit comprised of one share of HYMC Class A common stock and one warrant to purchase one share of HYMC Class A common stock for $11.50 per share, issued to sponsor in connection with the transactions contemplated by the Forward Purchase Contract, dated as of January 24, 2018, by and between MUDS and sponsor, (I) 6,700,000 warrants to purchase one share of HYMC Class A common stock (the “sponsor private placement warrants”) issued to sponsor, pursuant to the Private Placement Warrants Purchase Agreement, dated as of January 15,

2018, by and between MUDS and sponsor, (J) 1,040,000 warrants to purchase one share of HYMC Class A common stock (the “Cantor private placement warrants” and, together with the sponsor private placement warrants, the “private placement warrants”) issued to Cantor Fitzgerald & Co. (“Cantor”), pursuant to the Private Placement Warrant Purchase Agreement, dated as of January 16, 2018, by and between MUDS and Cantor, (K) restricted stock units convertible into shares of HYMC Class A common stock valued at no more than $4,277,000 issued in exchange for restricted stock units convertible into shares of Seller common stock received in connection with the business combination, (L) up to 478,000 shares of HYMC Class A common stock issued to Cantor as partial payment of Cantor’s deferred underwriting commission (the “underwriting commission issuance”), pursuant to the Underwriting Agreement, dated as of February 7, 2018, as amended on February 12, 2020, by and among MUDS and Cantor, as representative of the several underwriters (the “UA Amendment” and together with the Underwriting Agreement, the “Amended Underwriting Agreement”) and (M) a number of shares of HYMC Class A common stock equal to 1% of the total number of shares of HYMC Class A common stock outstanding immediately after the consummation of the business combination which shall be issued to Lender (as defined herein) pursuant to the Sprott Credit Agreement (the “lender issuance”).
MUDS’ publicly-traded units, Class A common stock and warrants are currently listed on the NASDAQ Capital Market (“NASDAQ”) under the symbols “MUDSU”, “MUDS” and “MUDSW”, respectively. MUDS intends to apply to continue the listing of its publicly-traded Class A common stock and public warrants, to be effective upon the consummation of the business combination, on NASDAQ under the proposed symbols “HYMC” and “HYMCW”, respectively. MUDS will not have units traded following consummation of the business combination.
As described in this joint proxy statement/prospectus, (i) MUDS’ stockholders are being asked to consider and vote upon (among other things) the proposed business combination, and (ii) Seller’s stockholders are being asked to consider and vote upon the proposed business combination.
Proposals to approve the business combination and other matters discussed in this joint proxy statement/prospectus will be presented at the special meeting of the stockholders of MUDS (the “MUDS special meeting”) scheduled to be held on [•], 2020.
Proposals to approve the Purchase Agreement and the plan of dissolution as discussed in this joint proxy statement/prospectus will be presented at the special meeting of the stockholders of Seller (the “Seller special meeting”) scheduled to be held on [•], 2020.
This joint proxy statement/prospectus provides the stockholders of MUDS with detailed information about the business combination and other matters to be considered at the MUDS special meeting. This joint proxy statement/prospectus provides stockholders of Seller with detailed information about the business combination and other matters to be considered at the Seller special meeting. We encourage you to carefully read this entire document and the documents incorporated herein by reference. You should also carefully consider the risk factors described in Risk Factorsbeginning on page [•] of this joint proxy statement/prospectus.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the transactions described in this joint proxy statement/prospectus, passed upon the fairness of the Purchase Agreement, the Exchange Agreement, the Second Lien Conversion Agreement or the transactions contemplated thereby, or passed upon the adequacy or accuracy of this joint proxy statement/​prospectus. Any representation to the contrary is a criminal offense.
This joint proxy statement/prospectus is dated [•], 2020, and is first being mailed to MUDS’ stockholders and Seller’s stockholders on or about [•], 2020.

 
MUDRICK CAPITAL ACQUISITION CORPORATION
527 Madison Avenue, 6th Floor
New York, NY 10022
NOTICE OF SPECIAL MEETING
TO BE HELD ON [], 2020
TO THE STOCKHOLDERS OF MUDRICK CAPITAL ACQUISITION CORPORATION:
NOTICE IS HEREBY GIVEN that a special meeting of Mudrick Capital Acquisition Corporation, a Delaware corporation (“MUDS,” the “Company,” “we,” “us” or “our”), will be held on [•], 2020 at 9:00 a.m. Eastern Time at the offices of Weil, Gotshal & Manges LLP, located at 767 Fifth Avenue, New York, NY 10153 (the “MUDS special meeting”). You are cordially invited to attend the special meeting to conduct the following items of business:
1.
Proposal No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt (a) the purchase agreement, dated as of January 13, 2020 (as it may be amended from time to time, the “Purchase Agreement”), by and among MUDS, MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect, wholly-owned subsidiary of MUDS (“Acquisition Sub”) and Hycroft Mining Corporation, a Delaware corporation (“Seller”), pursuant to which (i) Acquisition Sub will acquire from Seller the issued and outstanding equity interests of Allied Nevada Gold Holdings, LLC, a Nevada limited liability company (“Nevada Gold”), Allied VGH Inc., a Nevada corporation (“Allied VGH”) and Allied Nevada Delaware Holdings Inc., a Delaware corporation (“Allied Delaware” and, together with Nevada Gold and Allied VGH, the “Hycroft direct subsidiaries”), the direct subsidiaries of Seller, and MUDS or Acquisition Sub will acquire substantially all of the assets and assume substantially all of the liabilities of Seller (such equity interests and assets and liabilities together, the “Hycroft business”) in exchange for (x) shares of HYMC Class A common stock (as defined herein) and (y) the 1.5 Lien Notes and the Excess Notes, if any (each as defined herein), (ii) Seller will promptly distribute all of the shares of HYMC Class A common stock it receives to its stockholders pro rata (the “distribution”) and (iii) the parties will consummate the other transactions contemplated thereby, including (x) the assumption by MUDS of  (A) up to $80,000,000 in aggregate principal amount of Seller’s New Subordinated Notes (as defined herein) (the “Assumed New Subordinated Notes”) and (B) Seller’s obligations under the Sprott Credit Agreement (as defined herein) (collectively, the “debt assumption”) and (y) the payoff of certain outstanding indebtedness of Seller, including the First Lien Credit Agreement and the Jacobs Note (each as defined herein) (such amount, the “payoff amount”), on the terms and subject to the conditions set forth therein, (b) the exchange agreement, dated as of January 13, 2020 (the “Exchange Agreement”), by and among Seller, Acquisition Sub, the 1.25 Lien Noteholders (as defined herein) and 1.5 Lien Noteholders (as defined herein), pursuant to which Acquisition Sub will acquire any New Subordinated Notes in excess of the Assumed New Subordinated Notes (such notes, the “Excess Notes”) and the issued and outstanding 1.5 Lien Notes (the “exchange”), and (c) the conversion and consent agreement, dated as of January 13, 2020 (the “Second Lien Conversion Agreement”), by and among Seller and all of the Second Lien Noteholders (as defined herein), pursuant to which the Second Lien Noteholders have agreed to convert their Second Lien Notes (as defined herein) into shares of Seller common stock (the “conversion,” and all of the transactions described in the foregoing clauses (a) — (c) in the order provided for in the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement, together, the “business combination,” and such proposal, the “Business Combination Proposal”). Copies of the Purchase Agreement and the Exchange Agreement are attached to this joint proxy statement/prospectus as Annex A and Annex B, respectively.
The Charter Proposals — To consider and vote upon seven separate proposals to approve, assuming the Business Combination Proposal and the NASDAQ Proposal are approved and adopted, the following material differences between MUDS’ existing amended and restated certificate of incorporation, as amended (the “existing charter”) and the proposed second amended and restated certificate of incorporation (the “proposed charter”) of MUDS (which will be renamed “Hycroft Mining Holding Corporation” after consummation of the business combination and which is referred to herein as “HYMC” following the business combination).
 

 
2.
Proposal No. 2 — To consider and vote upon an amendment to MUDS’ existing charter to increase the total number of authorized shares of all classes of capital stock from 111,000,000 shares to [•], which would consist of  (a) [•] shares of Class A common stock and (b) [•] shares of preferred stock;
3.
Proposal No. 3 — To consider and vote upon an amendment to MUDS’ existing charter to declassify the HYMC board of directors, so that each member of the HYMC board of directors will be elected at each annual meeting of stockholders, as opposed to MUDS having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term, and make certain related changes;
4.
Proposal No. 4 — To consider and vote upon an amendment to MUDS’ existing charter to provide that certain transactions are not “corporate opportunities” and that each of Mudrick Capital, Highbridge, Whitebox, Aristeia and Wolverine (as each is defined below) and the investment funds affiliated with or managed by Mudrick Capital, Highbridge, Whitebox, Aristeia and Wolverine and their respective successors and affiliates and all of their respective partners, principals, directors, officers, members, managers, equity holders and/or employees, including any of the foregoing who served as officers or directors of MUDS (each, an “Exempted Person”) are not subject to the doctrine of corporate opportunity;
5.
Proposal No. 5 — To consider and vote upon an amendment to MUDS’ existing charter to permit stockholder action by written consent;
6.
Proposal No. 6 — To consider and vote upon an amendment to MUDS’ existing charter to provide that HYMC will not be governed by Section 203 of the Delaware General Corporation Law (“DGCL”) and approve a provision in the proposed charter that is substantially similar to Section 203 of the DGCL, but excludes the investment funds affiliated with sponsor and their respective successors and affiliates and the investment funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine and their respective successors and affiliates (the “Sponsor Holders”) from the definition of  “interested stockholder,” and to make certain related changes. Upon consummation of the business combination, the Sponsor Holders will become “interested stockholders” within the meaning of Section 203 of the DGCL, but will not be subject to the restrictions on business combinations set forth in Section 203 of the DGCL, as the MUDS Board approved the business combination in which the Sponsor Holders became interested stockholders prior to such time as they became interested stockholders;
7.
Proposal No. 7 — To consider and vote upon an amendment to MUDS’ existing charter to clarify that the exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation shall not apply to any action to enforce any liability or duty under the Securities Act or the Exchange Act for which federal courts have exclusive jurisdiction; and
8.
Proposal No. 8 — To consider and vote upon an amendment to MUDS’ existing charter to authorize all other proposed changes, including, among others, those (i) resulting from the business combination, including changing the post-business combination corporate name from “Mudrick Capital Acquisition Corporation” to “Hycroft Mining Holding Corporation” and removing certain provisions relating to MUDS’ prior status as a blank check company and MUDS Class B common stock that will no longer apply upon consummation of the business combination, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect.
Proposals No. 2-8 are collectively referred to as the “Charter Proposals”;
9.
Proposal No. 9 — The Director Election Proposal — To consider and vote upon a proposal, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, to elect seven directors to serve on the HYMC board of directors until the next annual meeting of stockholders, or until their respective successors are duly elected and qualified, which we refer to as the “Director Election Proposal”;
 

 
10.
Proposal No. 10 — The Incentive Plan Proposal — To consider and vote on a proposal to approve and adopt, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, the HYMC 2020 Performance and Incentive Pay Plan (the “Incentive Plan”) and the material terms thereunder, which we refer to as the “Incentive Plan Proposal”. A copy of the Incentive Plan is attached to the accompanying joint proxy statement/​prospectus as Annex C; and
11.
Proposal No. 11 — The NASDAQ Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal and the Charter Proposals are approved and adopted, for purposes of complying with applicable provisions of NASDAQ Listing Rule 5635, the issuance of more than 20% of MUDS’ issued and outstanding common stock in connection with the business combination, the private investment, an incremental equity investment, the forward purchase, the underwriting commission issuance and the lender issuance, and the related change in control, which we refer to as the “NASDAQ Proposal.”
The above matters are more fully described in the accompanying joint proxy statement/prospectus, which also includes as Annex A a copy of the Purchase Agreement. We urge you to read carefully the accompanying joint proxy statement/prospectus in its entirety, including the Annexes and the accompanying financial statements of MUDS and Seller.
The record date for the MUDS special meeting is [•], 2020. Only stockholders of record at the close of business on that date may vote at the MUDS special meeting or any adjournment thereof.
We are providing the accompanying joint proxy statement/prospectus and accompanying proxy card to MUDS’ stockholders in connection with the solicitation of proxies to be voted at the MUDS special meeting and at any adjournments of the MUDS special meeting. Information about the MUDS special meeting, the business combination and other related business to be considered by MUDS’ stockholders at the MUDS special meeting is included in this joint proxy statement/prospectus. Whether or not you plan to attend the MUDS special meeting, we urge all of MUDS’ stockholders to read the accompanying joint proxy statement/prospectus, including the Annexes and the accompanying financial statements of MUDS and Seller, carefully and in their entirety.
IN PARTICULAR, WE URGE YOU TO READ CAREFULLY THE SECTION ENTITLEDRISK FACTORSBEGINNING ON PAGE [•] OF THE ACCOMPANYING JOINT PROXY STATEMENT/​PROSPECTUS.
After careful consideration, the MUDS Board has approved the business combination and recommends that stockholders vote “FOR” adoption of the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement and approval of the transactions contemplated thereby, including the business combination, and “FOR” all other proposals presented to MUDS’ stockholders in the accompanying joint proxy statement/prospectus. When you consider the MUDS Board’s recommendation of these proposals, you should keep in mind that MUDS’ directors and officers have interests in the business combination that may conflict with your interests as a stockholder. Please see the sections entitled “The Business Combination — Interests of Certain Persons in the Business Combination” and “Special Meeting of MUDS’ Stockholders — Recommendation to MUDS’ Stockholders” for additional information.
As a result of the business combination, MUDS and Acquisition Sub will acquire the Hycroft business. Subject to the terms of the Purchase Agreement, the value of the aggregate consideration in the business combination is expected to be approximately $537,000,000, which amount is inclusive of  (i) the value of the HYMC Class A common stock being issued to Seller and distributed to Seller’s stockholders in the business combination (the “purchase shares”), (ii) the value of the Excess Notes and the 1.5 Lien Notes, (iii) the debt assumption and (iv) the payoff amount. The consideration to be paid to Seller will be comprised of  (x) a number of shares of HYMC Class A common stock, equal to (1) (A) $325,000,000, plus (B) the value of the Surrendered Shares (as defined herein) valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount (each as defined herein), minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount (each as defined herein), divided by (2) $10.00, and (y) the Excess Notes and the 1.5 Lien Notes. Promptly following the issuance of the purchase shares to Seller in connection with the business combination, Seller intends to
 

 
distribute the purchase shares pro rata to its stockholders and Seller will cancel and retire the Excess Notes and 1.5 Lien Notes. See the section titled “The Business Combination — Consideration to Seller Stockholders in the Business Combination” beginning on page [•] for further details. Copies of the Purchase Agreement and the Exchange Agreement are attached to the accompanying joint proxy statement/prospectus as Annex A and Annex B, respectively.
In connection with MUDS’ initial public offering (the “IPO”), the initial stockholders agreed to vote all shares of Class B common stock and any shares of Class A common stock purchased during or after the IPO in favor of the business combination. Currently, the initial stockholders own 43% of MUDS’ issued and outstanding common stock, including all of the Class B shares.
Concurrently with the signing of the Purchase Agreement, Acquisition Sub, the 1.25 Lien Noteholders and the 1.5 Lien Noteholders entered into an exchange agreement (the “Exchange Agreement”), pursuant to which, as part of the consummation of the business combination, (i) the holders of New Subordinated Notes (as defined herein) in excess of the Assumed New Subordinated Notes (the “Excess Notes,” and such holders, the “Excess Noteholders”) will transfer the Excess Notes to Acquisition Sub in exchange for an amount equal to 100% of the total principal amount outstanding thereunder (plus accrued but unpaid interest and outstanding fees thereon), paid in cash to the extent that the sum of  (a) cash remaining in MUDS’ trust account following the satisfaction of MUDS’ stockholder redemptions, (b) the net proceeds from the Subscription/Backstop Agreements (as defined herein), (c) the net proceeds from the forward purchase and (d) the net proceeds from the Sprott Credit Agreement and Sprott Royalty Agreement (as defined herein), is in excess of  $220,000,000 (such excess amount, the “Cash Available for Payment” and the amount of cash therefore paid in respect of the Excess Notes, the “Excess Notes Cash Payment Amount”), and the balance, if any, to be paid in respect of the Excess Notes shall be paid in HYMC Class A common stock valued at $10.00 per share (any such balance, the “Excess Notes Share Payment Amount” and the number of shares issued in respect thereof, the “Excess Notes Share Payment”), and (ii) the 1.5 Lien Noteholders will transfer the 1.5 Lien Notes to Acquisition Sub in exchange for an amount equal to 110% of the total principal amount outstanding thereunder (plus accrued but unpaid interest and outstanding fees thereon), paid in cash to the extent that there is remaining Cash Available for Payment after any cash payments with respect to the Excess Notes are made (provided, that such cash payment amounts will be reduced such that MUDS has not less than $70,000,000 in unrestricted and available cash after giving effect to the business combination and the cash payments in respect of the Excess Notes and 1.5 Lien Notes) (such amounts to be paid in cash, the “1.5 Lien Cash Payment Amount”), and the balance, if any, to be paid in respect of the 1.5 Lien Notes shall be paid in HYMC Class A common stock valued at $10.00 per share (any such balance, the “1.5 Lien Share Payment Amount,” and the number of shares issued in respect thereof, the “1.5 Lien Share Payment”).
Concurrently with the signing of the Purchase Agreement, MUDS entered into subscription/backstop agreements (the “Subscription/Backstop Agreements”) with certain funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine (the “Initial Subscribers”), pursuant to which MUDS will issue and sell to the Initial Subscribers $65,000,000 of MUDS Class A common stock at a purchase price of  $10.00 per share, and the Initial Subscribers will receive an aggregate of 3,250,000 warrants to purchase MUDS Class A common stock at a price of  $11.50 per share, in each case, in connection with and conditioned upon the consummation of the business combination. Pursuant to the terms of the Subscription/Backstop Agreements, if  (a) prior to the consummation of the business combination, MUDS enters into subscription agreements or other instruments pursuant to which MUDS agrees to issue and sell to certain Third-Party Private Investors all or any portion of the shares to be issued in connection with the transactions contemplated by the Subscription/Backstop Agreements or (b) in connection with the consummation of the business combination, the cash remaining in MUDS’ trust account following the satisfaction of stockholder redemptions exceeds $10,000,000, then the aggregate number of shares to be issued to the Initial Subscribers may be correspondingly reduced such that, at the consummation of the business combination, an amount of HYMC Class A common stock equal to the difference (not less than zero) between (i) $65,000,000 and (ii) the amount of cash in excess of  $10,000,000 remaining in MUDS’ trust account following the satisfaction of stockholder redemptions will be issued to the Initial Subscribers and such Third-Party Private Investors (as defined herein), in the aggregate, at a purchase price of  $10.00 per share (the consummation of the transactions contemplated by the Subscription/Backstop Agreements and/or such other subscription agreements, collectively, the “private investment”).
 

 
Concurrently with the signing of the Purchase Agreement, sponsor entered into a letter agreement (the “Parent Sponsor Letter Agreement”) pursuant to which sponsor agreed to surrender to MUDS, immediately prior to the consummation of the business combination and for no consideration, a number of shares of MUDS Class B common stock, par value $0.0001 per share, equal to (i) 1,941,667 plus (ii) the product of (A) 1,941,667 and (B) the difference between (I) 1 and (II) a fraction (not greater than 1), the numerator of which is the sum of  (x) the amount of proceeds from subscription agreements with Third-Party Private Investors other than the Subscription/Backstop Agreements and (y) the amount of cash remaining in MUDS’ trust account following the satisfaction of stockholder redemptions, and the denominator of which is $65,000,000 (the “Surrendered Shares”).
Concurrently with the consummation of the business combination, sponsor will purchase 2,500,000 MUDS units having substantially the same terms as the sale of units in the IPO and 625,000 shares of MUDS Class A common stock, for gross proceeds of  $25,000,000, in accordance with the terms of the Forward Purchase Contract.
At the closing of the business combination, HYMC, sponsor, Cantor, certain current officers and directors of MUDS, the Excess Noteholders, 1.5 Lien Noteholders, certain stockholders of Seller that receive HYMC Class A common stock in the business combination and may be affiliates of HYMC after consummation of the business combination, the Initial Subscribers and any other Third-Party Private Investors, and Lender (such officers and directors, Cantor, Excess Noteholders, 1.5 Lien Noteholders, certain stockholders of Seller, Initial Subscribers, Third-Party Private Investors, if applicable, Lender and sponsor, collectively the “restricted stockholders”) will enter into an Amended and Restated Registration Rights Agreement with HYMC substantially in the form attached to the accompanying joint proxy statement/prospectus as Annex D in respect of shares of Class A common stock and, to the extent applicable, warrants, held by them, providing for, among other things, customary registration rights, including demand, piggy-back and shelf registration rights, subject to cut-back provisions. See the section titled “The Purchase Agreement and Related Agreements — Related Agreements — Amended and Restated Registration Rights Agreement” in the accompanying joint proxy statement/prospectus for more information.
Pursuant to MUDS’ existing charter, a holder of MUDS’ public shares may request that MUDS redeem all or a portion of such stockholder’s public shares for cash if the business combination is consummated. You will be entitled to receive cash for any public shares to be redeemed if, prior to 5:00 p.m. Eastern Time on [•], 2020 (two business days before the MUDS special meeting), you tender your shares physically or electronically and submit a request in writing that MUDS redeem your public shares for cash to MUDS’ transfer agent.
Holders of public units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds public units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so. Public stockholders may elect to redeem their public shares even if they vote “for” the Business Combination Proposal. If the business combination is not consummated, the public shares will not be redeemed for cash. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, MUDS will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account established in connection with the IPO (the “trust account”), calculated as of two business days prior to the consummation of the business combination, including interest not previously released to MUDS to pay its franchise and income taxes, divided by the number of then issued and outstanding public shares. For illustrative purposes, as of  [•], 2020, this would have amounted to approximately $[•] per public share. If a public stockholder exercises its redemption rights, then it will be exchanging its redeemed public shares for cash and will no longer own such shares. See the section entitled “Special Meeting of MUDS Stockholders — Redemption Rights” in the accompanying joint proxy statement/prospectus for a detailed description of the procedures to be followed if you wish to redeem your public shares for cash.
Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such public stockholder or any other person with whom such public stockholder is acting in concert or as a “group” (as provided in Section 13(d) of the Securities Exchange Act of 1934, as amended), will be restricted from
 

 
redeeming its public shares with respect to more than an aggregate of 15% of the public shares without MUDS’ prior consent. Accordingly, if a public stockholder, alone or acting in concert or as a group, seeks to redeem more than 15% of the public shares, then any such shares in excess of that 15% limit would not be redeemed for cash unless such stockholder first obtains MUDS’ prior consent.
In no event will MUDS redeem public shares in an amount that would cause its net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. Holders of public warrants do not have redemption rights in connection with the business combination.
The initial stockholders have agreed to waive their redemption rights with respect to shares of Class B common stock and with respect to any public shares they may have held in connection with the consummation of the business combination and to convert such shares of Class B common stock into shares of Class A common stock in connection with the consummation of the business combination. The shares of Class B common stock will be excluded from the pro rata calculation used to determine the per-share redemption price at the time of the redemptions.
The approval of each of the Business Combination Proposal, the Incentive Plan Proposal and the NASDAQ Proposal requires the affirmative vote of a majority of the votes cast by holders of MUDS outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. The approval of the Charter Proposals requires the affirmative vote of the holders of a majority of MUDS’ shares of common stock entitled to vote thereon. Directors are elected by a plurality of all of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon.
Your vote is very important. Whether or not you plan to attend the MUDS special meeting, please vote as soon as possible by following the instructions in this joint proxy statement/prospectus to make sure that your shares are represented at the MUDS special meeting. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the MUDS special meeting. The transactions contemplated by the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement will be consummated only if the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are approved at the MUDS special meeting. Each of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are cross-conditioned on the approval of each other. The Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal.
If you sign, date and return your proxy card without indicating how you wish to vote, your proxy will be voted FOR each of the proposals presented at the MUDS special meeting. If you fail to return your proxy card or fail to instruct your bank, broker or other nominee how to vote, and do not attend the MUDS special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the MUDS special meeting. If you are a stockholder of record and you attend the MUDS special meeting and wish to vote in person, you may withdraw your proxy and vote in person.
 

 
Your attention is directed to the joint proxy statement/prospectus accompanying this notice (including the annexes thereto) for a more complete description of the proposed business combination and related transactions and each of the proposals. We encourage you to read the accompanying joint proxy statement/​prospectus carefully. If you have any questions or need assistance voting your common stock, please contact MUDS’ proxy solicitor, Advantage Proxy, Inc., at (877) 870-8565 (toll free) or banks and brokers can call collect at (206) 870-8565 or by email to ksmith@advantageproxy.com.
Thank you for your participation. We look forward to your continued support.
By Order of the MUDS Board,
Jason Mudrick
Chief Executive Officer and Director
 

 
HYCROFT MINING CORPORATION
8181 E. Tufts Ave., Suite 510
Denver, CO 80237
NOTICE OF SPECIAL MEETING
TO BE HELD ON [], 2020
TO THE STOCKHOLDERS OF HYCROFT MINING CORPORATION:
NOTICE IS HEREBY GIVEN that a special meeting of the stockholders (the “Seller special meeting”) of Hycroft Mining Corporation, a Delaware corporation (“Seller”), will be held on [•], 2020 at [•] a.m. at the offices of Seller, 8181 E. Tufts Ave., Denver, CO 80237. You are cordially invited to attend the Seller special meeting to conduct the following items of business:
Proposal No. 1 — The Seller Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the purchase agreement, dated as of January 13, 2020 (as it may be amended from time to time, the “Purchase Agreement”), by and among Mudrick Capital Acquisition Corporation, a Delaware corporation (“MUDS”) , MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect wholly owned subsidiary of MUDS (“Acquisition Sub”) and Seller, pursuant to which Acquisition Sub will acquire from Seller the issued and outstanding equity interests of Allied Nevada Gold Holdings, LLC, a Nevada limited liability company (“Nevada Gold”), Allied VGH Inc., a Nevada corporation (“Allied VGH”) and Allied Nevada Delaware Holdings Inc., a Delaware corporation (“Allied Delaware” and, together with Nevada Gold and Allied VGH, the “Hycroft direct subsidiaries”), the direct subsidiaries of Seller, and MUDS or Acquisition Sub will acquire substantially all of the other assets and assume substantially all of the liabilities of Seller (the “acquisition,” and such equity interests and assets and liabilities together, the “Hycroft business”), in exchange for shares of HYMC Class A common stock (as defined herein), the 1.5 Lien Notes (as defined herein) and the Excess Notes (as defined herein), and the parties will consummate the other transactions contemplated by the Purchase Agreement, on the terms and subject to the conditions set forth therein (such transaction the “business combination,” and such proposal, the “Seller Business Combination Proposal”);
Proposal No. 2 — The Seller Dissolution Proposal — To consider and vote upon a proposal to approve and adopt the plan of dissolution of Seller, which we refer to as the “plan of dissolution”, attached to the joint proxy statement/prospectus as Annex E, including the distribution of shares of HYMC Class A common stock received in the business combination and the dissolution and liquidation of Seller contemplated thereby, subject to the approval of the Seller Business Combination Proposal and the consummation of the business combination contemplated thereby. We refer to such proposal as the “Seller Dissolution Proposal;” and
Proposal No. 3 — Seller Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the Seller special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for, or otherwise in connection with, the approval of one or more proposals to be submitted for stockholder approval at the Seller special meeting, which we refer to as the “Seller Adjournment Proposal.”
The above matters are more fully described in the accompanying joint proxy statement/prospectus, which also includes as Annex A, a copy of the Purchase Agreement and as Annex E, a copy of the plan of dissolution. We urge you to read carefully the accompanying joint proxy statement/prospectus in its entirety, including the Annexes and the accompanying financial statements of MUDS and Seller.
The record date for the Seller special meeting is [•], 2020 (the “Seller record date”). Only stockholders of record at the close of business on that date may vote at the Seller special meeting or any adjournment thereof.
 

 
We are providing the accompanying joint proxy statement/prospectus and accompanying proxy card to Seller’s stockholders in connection with the solicitation of proxies to be voted at the Seller special meeting and at any adjournments of the Seller special meeting. Information about the Seller special meeting, the business combination and other related business to be considered by Seller’s stockholders at the Seller special meeting is included in this joint proxy statement/prospectus. Whether or not you plan to attend the Seller special meeting, we urge all of Seller’s stockholders to read the accompanying joint proxy statement/prospectus, including the Annexes and the accompanying financial statements of MUDS and Seller, carefully and in their entirety.
IN PARTICULAR, WE URGE YOU TO READ CAREFULLY THE SECTION ENTITLED “RISK FACTORSBEGINNING ON PAGE [•] OF THE ACCOMPANYING JOINT PROXY STATEMENT/​PROSPECTUS.
After careful consideration, the Seller Board has approved the Seller Business Combination Proposal and recommends that stockholders vote “FOR” adoption of the Purchase Agreement and approval of the transactions contemplated thereby. The Seller Board has also approved the Seller Dissolution Proposal and recommends that stockholders vote “FOR” adoption of the plan of dissolution. When you consider the Seller Board’s recommendations of these proposals, you should keep in mind that the Seller’s directors and officers have interests in the business combination that may conflict with your interests as a stockholder. Please see the section entitled “Seller Special Meeting — Recommendation to Seller’s Stockholders” for additional information.
In connection with the business combination, Seller stockholders representing a sufficient number of shares of Seller’s outstanding common stock necessary to approve the Seller Business Combination Proposal have entered into the Seller Support Agreement with MUDS, pursuant to which such holders have agreed, among other things, to vote in favor of the adoption of the Purchase Agreement and the business combination, subject to the terms of such Seller Support Agreement. Seller stockholders representing a sufficient number of shares of Seller’s outstanding common stock necessary to approve the Seller Dissolution Proposal have also indicated their intention to vote “FOR” the Seller Dissolution Proposal.
Your vote is very important. Whether or not you plan to attend the Seller special meeting, please vote as soon as possible by following the instructions in this joint proxy statement/prospectus to make sure that your shares are represented at the Seller special meeting. You may submit a proxy for your shares by completing, signing and dating the enclosed proxy card and returning it as promptly as possible in the enclosed postage-prepaid envelope. The transactions contemplated by the Purchase Agreement will be consummated only if the Seller Business Combination Proposal is approved at the Seller special meeting. The Seller Business Combination Proposal is not conditioned upon approval of the Seller Dissolution Proposal, but the Seller Dissolution Proposal is conditioned upon the approval of the Seller Business Combination Proposal and Seller will not proceed with the Seller Dissolution Proposal if the Seller Business Combination Proposal is not approved by Seller’s stockholders. The Seller Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this joint proxy statement/prospectus. Holders of outstanding warrants to purchase Seller common stock are not entitled to vote at the Seller special meeting unless such warrants have been duly and validly exercised prior to the record date for such special meeting.
You may revoke your proxy in the manner described in the accompanying joint proxy statement/​prospectus at any time before it has been voted at the Seller special meeting. If you attend the Seller special meeting, you may vote your shares in person even if you have previously submitted a proxy.
You are not entitled to appraisal rights in connection with the business combination.
By Order of the Hycroft Board,
[•]
Randy E. Buffington
Chairman, Chief Executive Officer and President
 

 
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FREQUENTLY USED TERMS
In this joint proxy statement/prospectus:
1.25 Lien Exchange” means the exchange by the 1.25 Lien Noteholders of the outstanding 1.25 Lien Notes for New Subordinated Notes.
1.25 Lien Exchange Agreement” means that certain note exchange agreement, dated as of January 13, 2020, by and among Seller and certain investment funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine, pursuant to which the 1.25 Lien Exchange will occur immediately prior to the consummation of the business combination.
1.25 Lien Notes” means the notes issued pursuant the Note Purchase Agreements, dated as of February 22, 2019, May 21, 2019, June 27, 2019, August 6, 2019, August 29, 2019, September 25, 2019, October 16, 2019, November 21, 2019, December 17, 2019, January 17, 2020, February 7, 2020, and such other dates on which such notes may be issued from time to time pursuant to Note Purchase Agreements between the Seller, the guarantors and the purchasers named therein and WBox 2015-5 Ltd., as collateral agent.
1.25 Lien Noteholders” means the holders of the 1.25 Lien Notes and, subsequent to the 1.25 Lien Exchange, the holders of the New Subordinated Notes.
1.5 Lien Cash Payment Amount” means the cash payment to the 1.5 Lien Noteholders equal to the positive difference, if any, between (i) the Cash Available for Payment and (ii) the Excess Notes Cash Payment Amount; provided, however, that the amount of such cash payment amount will be reduced such that MUDS and the Seller subsidiaries have not less than $70,000,000 in unrestricted and available cash after giving effect to the business combination and payments to satisfy MUDS stockholder redemptions, if any.
1.5 Lien Notes” means the notes issued pursuant the Note Purchase Agreements, dated as of May 3, 2016, July 29, 2016, September 22, 2016, November 30, 2016, February 2, 2017, April 12, 2017, June 30, 2017, July 14, 2017, December 20, 2017, March 8, 2018, May 10, 2018, July 10, 2018, August 22, 2018, November 1, 2018, and December 19, 2018 between the Seller, the guarantors and the purchasers named therein and WBox 2015-5 Ltd., as collateral agent.
1.5 Lien Noteholders” means certain investment funds affiliated with Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine that hold the 1.5 Lien Notes.
1.5 Lien Share Payment” means the number of shares of HYMC Class A common stock, valued at $10.00 per share, equal to the 1.5 Lien Share Payment Amount.
1.5 Lien Share Payment Amount” means (i) 110% of the total principal amount outstanding of 1.5 Lien Notes, plus (ii) the accrued but unpaid interest on the 1.5 Lien Notes, plus (iii) any outstanding fees on the 1.5 Lien Notes, in each case of  (i), (ii) and (iii), immediately prior to the effective time, minus (iv) the 1.5 Lien Cash Payment Amount, if any.
Amended and Restated Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement, substantially in the form attached hereto as Annex D, to be entered into at the closing of the business combination, by and among HYMC and the restricted stockholders.
Acquisition Sub” means MUDS Acquisition Sub, Inc., a Delaware corporation and an indirect, wholly-owned subsidiary of MUDS.
Aristeia” means Aristeia Capital, LLC.
Assumed New Subordinated Notes” means up to $80,000,000 in aggregate principal amount of New Subordinated Notes to be assigned to, and assumed by, MUDS in connection with the business combination, on a pro rata basis across holders of New Subordinated Notes.
business combination” means the transactions contemplated by the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement and to be consummated in the order provided for in such agreements.
 
1

 
business day” means a day, other than Saturday, Sunday or such other day on which commercial banks in New York, New York are authorized or required by applicable laws to close.
Cantor” means Cantor Fitzgerald & Co.
Cash Available for Payment” means the amount of cash equal to the amount by which, if any, the sum of  (A) cash remaining in the trust account following the satisfaction of the MUDS stockholder redemptions, if any, (B) the net proceeds from the Subscription/Backstop Agreements, (C) the net proceeds from the consummation of the transactions contemplated by the Forward Purchase Contract and (D) the net proceeds available to the Seller subsidiaries and/or MUDS immediately following the closing pursuant to the Sprott Credit Agreement and the Sprott Royalty Agreement, is in excess of  $220,000,000.
Class A common stock” or “MUDS Class A common stock” means the Class A common stock, par value $0.0001 per share, of MUDS, which will be referred to as “HYMC Class A common stock” following the consummation of the business combination.
Class B common stock” or “MUDS Class B common stock” means the Class B common stock, par value $0.0001 per share, of MUDS.
Class B holders” means sponsor and the initial stockholders, solely in their capacity as holders of Class B common stock.
closing” means the closing of the transactions contemplated by the Purchase Agreement.
closing date” means the date on which the closing of the transactions contemplated by the Purchase Agreement occurs.
Code” means the Internal Revenue Code of 1986, as amended.
common stock” or “MUDS common stock” means Class A common stock and Class B common stock of MUDS.
Continental” or “transfer agent” or “trustee” means Continental Stock Transfer & Trust Company.
conversion” means the conversion of the Second Lien Notes into shares of Seller common stock, pursuant to the terms of the Second Lien Conversion Agreement.
Duff  & Phelps” means Duff  & Phelps, LLC.
DGCL” means the General Corporation Law of the State of Delaware.
debt assumption” means the assignment by Seller and the assumption by MUDS of  (x) up to $80,000,000 in aggregate principal amount of New Subordinated Notes and (y) the Sprott Credit Agreement.
effective time” means 9:00 a.m. New York time on the closing date.
employee benefit plan” means any material “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.
Excess Noteholders” means the holders of the Excess Notes.
Excess Notes” means the New Subordinated Notes in excess of the Assumed New Subordinated Notes, to be exchanged pursuant to the Exchange Agreement.
Excess Notes Cash Payment Amount” means the cash payment to the Excess Noteholders, if any, equal to the sum of  (i) 100% of the total principal amount outstanding of the Excess Notes, plus (ii) all accrued but unpaid interest on the Excess Notes, if any, plus (iii) any outstanding fees on the Excess Notes; provided, however, that in no event shall the Excess Notes Cash Payment Amount be greater than the Cash Available for Payment.
Excess Notes Share Payment” means the number of shares of HYMC Class A common stock, valued at $10.00 per share, issued to the Excess Noteholders equal to the Excess Notes Share Payment Amount.
 
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Excess Notes Share Payment Amount” means (i) the sum of  (x) 100% of the total principal amount outstanding of the Excess Notes, plus (y) all accrued but unpaid interest on the Excess Notes, plus (z) any outstanding fees on the Excess Notes, minus (ii) the Excess Notes Cash Payment Amount.
exchange” means the exchange of the 1.5 Lien Notes and the Excess Notes, if any, for shares of HYMC Class A common stock valued at $10.00 per share and/or cash payment pursuant to the terms of the Exchange Agreement.
Exchange Act” means the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
Exchange Agreement” means that certain Exchange Agreement, dated as of January 13, 2020, by and among Seller, Acquisition Sub, the 1.5 Lien Noteholders and the 1.25 Lien Noteholders.
Feasibility Study” means the NI 43-101 Technical Report: Heap Leaching Feasibility Study prepared by M3 Engineering and Technology Corporation with an effective date of July 31, 2019, which formed the substantive basis for the Hycroft Technical Report that was prepared to comply with subpart 1300 of Regulation S-K.
First Lien Credit Agreement” means the first lien term loan credit agreement between Seller and The Bank of Nova Scotia, as administrative agent, and other lenders.
First Lien Notes” means the notes under the First Lien Credit Agreement.
Forward Purchase Contract” means the Forward Purchase Contract, dated January 24, 2018, by and between MUDS and sponsor, pursuant to which sponsor shall purchase 2,500,000 units having substantially the same terms as the sale of units in the IPO and 625,000 shares of MUDS Class A common stock, for gross proceeds of  $25,000,000, concurrently with the consummation of the business combination.
forward purchase” means the issuance to sponsor of MUDS units and shares of MUDS Class A common stock pursuant to the terms of the Forward Purchase Contract.
founder shares” means shares of MUDS Class B common stock initially purchased by sponsor whether or not converted into shares of MUDS Class A common stock.
GAAP” means generally accepted accounting principles in the United States.
governmental entity” means (i) any federal, provincial, state, local, municipal, national or international court, governmental commission, government or governmental authority, department, regulatory or administrative agency, board, bureau, agency or instrumentality, tribunal, arbitrator or arbitral body (public or private), or similar body, (ii) any self-regulatory organization or (iii) any political subdivision of any of the foregoing.
Highbridge” means Highbridge Capital Management, LLC.
HRDI” means Hycroft Resources & Development, Inc., a Nevada corporation and an indirect, wholly-owned subsidiary of Seller.
HSR Act” means the Hart Scott Rodino Antitrust Improvements Act of 1976.
Hycroft business” means all of the issued and outstanding equity interests of the Hycroft direct subsidiaries and substantially all of the other assets and liabilities of Seller.
Hycroft direct subsidiaries” means Allied Nevada Gold Holdings, LLC, a Nevada limited liability company, Allied VGH Inc., a Nevada Corporation, and Allied Nevada Delaware Holdings Inc., a Delaware corporation.
Hycroft Technical Report” means that certain Technical Report Summary, Heap Leaching Feasibility Study prepared for Seller with an effective date of July 31, 2019 by M3 Engineering and Technology Corporation and other qualified persons, prepared in accordance with the requirements of the New Mining Rules set forth in subpart 1300 of Regulation S-K,which is filed as Exhibit 96.1 to the Registration Statement of which this joint proxy statement/prospectus forms a part.
 
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HYMC” means Hycroft Mining Holding Corporation.
HYMC Board” means the board of directors of Hycroft Mining Holding Corporation.
HYMC Class A common stock” means the Class A common stock, par value $0.0001 per share, of HYMC.
Incentive Plan” means the HYMC 2020 Performance and Incentive Pay Plan.
initial stockholders” means holders of founder shares prior to the IPO.
Initial Subscribers” means investment funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine (together with any permitted assigns under the Subscription/Backstop Agreements).
IPO” means MUDS’ initial public offering, consummated on February 12, 2018, through the sale of 20,800,000 public units (including 800,000 units sold pursuant to the underwriters’ partial exercise of their overallotment option) at $10.00 per unit.
Jacobs Note” means the secured promissory note issued by Seller to Jacobs Field Services North America, Inc.
Law” means, in any applicable jurisdiction, any applicable statute or law (including common law), ordinance, rule, treaty, code, directive or regulation and any decree, injunction, judgment, order, ruling, assessment, writ or other legal requirement, in any such case, of any applicable governmental entity.
Lender” means Sprott Private Resource Lending II (Collector), LP.
Mudrick Capital” means Mudrick Capital Management, L.P., a Delaware limited partnership, an affiliate of sponsor.
MUDS,” “we,” “us,” “company,” or “our company” means Mudrick Capital Acquisition Corporation, a Delaware corporation, except in the sections entitled “Information About Seller and the Hycroft Business” and “Seller’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” where, in each case, “we,” “us,” “company,” or “our company” means Seller (as defined below); the term “HYMC” refers to MUDS as it will be renamed following the adoption of the Second Amended and Restated Certificate of Incorporation.
MUDS Board” means the board of directors of MUDS.
MUDS securities” means collectively, MUDS Class A common stock and MUDS warrants.
MUDS special meeting” means the special meeting of MUDS’ stockholders that is the subject of this joint proxy statement/prospectus.
NASDAQ” means the National Association of Securities Dealers Automated Quotations Capital Market.
New Subordinated Notes” means the 10% payment-in-kind subordinated notes of Seller to be issued pursuant to the 1.25 Lien Exchange Agreement.
Non-U.S. Holder” is a beneficial owner of MUDS securities who or that is not a “U.S. person” or a partnership (including any entity or arrangement treated as a partnership), for U.S. federal income tax purposes.
Parent Sponsor Letter Agreement” means that certain letter agreement, dated as of January 13, 2020, by and between MUDS and sponsor, as amended from time to time.
payoff amount” means the aggregate outstanding principal amounts (including any accrued interest and/or fees to be paid in kind), all accrued and unpaid interest, all outstanding fees and all other amounts owing as of the closing of the business combination under the (i) First Lien Credit Agreement and (ii) the Jacobs Note.
 
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PIPE warrants” means the warrants to purchase one share of HYMC Class A common stock at a price of  $11.50 per share issued to the Initial Subscribers in the private investment.
plan of dissolution” means the Seller’s plan of dissolution adopted by the Seller Board on February 7, 2020.
private investment” means the equity financing through a private placement of equity securities in MUDS pursuant to Section 4(a)(2) of the Securities Act, for gross proceeds to MUDS in an aggregate amount of at least the difference (not below zero) of  (a) $65,000,000 and (b) the cash remaining in MUDS’ trust account in excess of  $10,000,000 following the satisfaction of MUDS stockholder redemptions, if any, which shall be funded in accordance with the terms of  (i) the Subscription/Backstop Agreements between the Initial Subscribers and MUDS, dated January 13, 2020, and/or (ii) similar subscription agreements or other instruments pursuant to which MUDS agrees to issue and sell to certain Third-Party Private Investors all or any portion of the shares to be issued in connection with the transactions contemplated by the Subscription/Backstop Agreements or additional shares.
private placement warrants” means the warrants issued to sponsor and Cantor in a private placement simultaneously with the closing of the IPO.
proposed charter” means the proposed Second Amended and Restated Certificate of Incorporation of MUDS, a form of which is attached hereto as Annex F, which will become HYMC’s certificate of incorporation subject to the approval of the Charter Proposals, assuming the consummation of the business combination.
proposed bylaws” means the proposed Amended and Restated Bylaws of MUDS which will become HYMC’s bylaws, assuming the consummation of the business combination.
public stockholders” means the holders of MUDS public shares.
public shares” means shares of MUDS Class A common stock sold as part of the units in the IPO.
public units” or “MUDS units” means one share of MUDS Class A common stock and one redeemable public warrant of MUDS, whereby each public warrant entitles the holder thereof to purchase one share of MUDS Class A common stock at an exercise price of  $11.50 per share of MUDS Class A common stock, sold in the IPO.
public warrants” means the warrants included in the units issued in MUDS’ IPO, where one warrant entitles the holder thereof to purchase one share of MUDS Class A common stock at an exercise price of $11.50 per share of MUDS Class A common stock in accordance with the terms of the warrant agreements governing the warrants.
Purchase Agreement” means that certain Purchase Agreement, dated January 13, 2020 (as it may be amended from time to time), by and among MUDS, Acquisition Sub and Seller, a copy of which is attached to this joint proxy statement/prospectus as Annex A.
purchase shares” means the shares of HYMC Class A common stock issued to Seller and then promptly distributed to the Seller stockholders in the business combination.
Reimbursement and Exclusivity Agreement” means that certain expense reimbursement agreement, dated as of January 24, 2019 and amended on May 28, 2019, as further amended and modified as a reimbursement and exclusivity agreement on October 4, 2019, and further amended on December 2, 2019, by and between MUDS and Seller.
Related Agreements” means the Seller Support Agreement, the Parent Sponsor Letter Agreement, the Trust Termination Letter, the Exchange Agreement, the 1.25 Lien Exchange Agreement, the Second Lien Conversion Agreement, the Amended and Restated Registration Rights Agreement, the Subscription/​Backstop Agreements, the Forward Purchase Contract, the UA Amendment, the Sprott Credit Agreement and the Sprott Royalty Agreement and the Reimbursement and Exclusivity Agreement.
representatives” means a Person’s officers, directors, employees, accountants, consultants, agents, legal counsel, and other representatives.
 
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restricted stockholders” means, collectively, sponsor, Cantor, certain directors and officers of MUDS (as set forth in the Amended and Restated Registration Rights Agreement), the 1.5 Lien Noteholders, certain stockholders of Seller that receive HYMC Class A common stock in the business combination, the Initial Subscribers and such other Third-Party Private Investors, if any, pursuant to the private investment, and Lender.
SEC” means the United States Securities and Exchange Commission.
Second Lien Conversion Agreement” means that certain note conversion and consent agreement by and among Seller and the Second Lien Noteholders, dated January 13, 2020.
Second Lien Notes” means the notes issued pursuant to (a) that certain Note Purchase Agreement, dated as of October 22, 2015, by and among Seller, certain of its affiliates and the purchasers named therein and (b) that certain Note Purchase Agreement, dated as of December 2, 2015, by and among the Seller, certain of the Seller’s subsidiaries and the purchasers named therein, in each case, entered into pursuant to the 15% Senior Secured Convertible Notes Due 2020 Indenture, dated as of October 22, 2015, by and among the Seller, the guarantors (as defined therein) and Wilmington Trust, National Association, as trustee and collateral agent as of January 6, 2016 and March 24, 2016.
Second Lien Noteholders” means certain funds affiliated with Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine and two additional noteholders.
Securities Act” means the Securities Act of 1933, as amended.
Seller” or “Hycroft” means Hycroft Mining Corporation, a Delaware corporation.
Seller Board” means the board of directors of Seller.
Seller common stock” means Seller’s common stock, par value $0.001 per share.
Seller equity award” means a restricted stock unit award convertible into shares of Seller common stock.
Seller special meeting” means the special meeting of Seller’s stockholders that is the subject of this joint proxy statement/prospectus.
Seller stockholders” means the holders of Seller common stock immediately prior to the effective time of the business combination, including as a result of the conversion.
Seller Support Agreement” means that certain Seller Support Agreement, dated as of January 13, 2020, by and among MUDS and Seller’s stockholders holding at least a majority of Seller’s outstanding Class A common stock.
Seller warrant” means a warrant to purchase shares of Seller common stock.
sponsor” means Mudrick Capital Acquisition Holdings LLC, a Delaware limited liability company, which is 100% owned by investment funds and separate accounts managed by Mudrick Capital.
Sprott Agreements” means the Sprott Credit Agreement and the Sprott Royalty Agreement.
Sprott Credit Agreement” means that certain credit agreement, dated as of October 4, 2019, between Seller, as borrower, Hycroft Resources & Development, Inc. and Allied VGH Inc., as guarantors, Sprott Private Resource Lending II (Collector), LP, as lender, and Sprott Resource Lending Corp., as arranger.
Sprott Royalty Agreement” means that certain royalty agreement to be entered into between MUDS, Hycroft Resources & Development, Inc. and Sprott Private Resource Lending II (Co) Inc. as of the consummation of the business combination.
Subscription/Backstop Agreements” means those certain Subscription/Backstop Agreements, dated as of January 13, 2020, by and among MUDS and the Initial Subscribers.
Surrendered Shares” means a number of shares of MUDS Class B common stock equal to (i) 1,941,667 plus (ii) the product of  (A) 1,941,667 and (B) the difference between (I) 1 and (II) a fraction (not greater
 
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than 1), the numerator of which is the sum of  (x) the amount of proceeds from subscription agreements with Third-Party Private Investors other than the Subscription/Backstop Agreements and (y) the amount of cash remaining in MUDS’ trust account following the satisfaction of stockholder redemptions, and the denominator of which is $65,000,000.
Third-Party Private Investors” means any person other than the Initial Subscribers, Sprott Inc. or any entity affiliated or associated with Sprott Inc. (but solely with respect to an amount of equity financing up to $10,000,000, with any such member being deemed to be a “Third-Party Private Investor” to the extent of any amount in excess thereof), or their respective affiliates that (a) has a substantive and pre-existing relationship with MUDS or its advisors, (b) was contacted prior to the date of the Purchase Agreement regarding the private investment and (c) enters into subscription agreements or similar instruments prior to the closing of the business combination pursuant to which such person agrees to purchase MUDS Class A common stock in an equity financing transaction concurrently with the closing of the business combination.
Treasury Regulation” means the regulations promulgated by the U.S. Department of the Treasury pursuant to and in respect of provisions of the Tax Code.
trust account” means the trust account of MUDS that holds the proceeds from the IPO.
Trust Termination Letter” means that certain Trust Termination Letter to be delivered by MUDS to the trustee on the effective date.
UA Amendment” means that certain amendment to the Underwriting Agreement, dated as of February 12, 2020, modifying the terms respect to the deferred underwriting commission.
Underwriters” means the underwriters of the IPO.
Underwriting Agreement” means that certain Underwriting Agreement, dated as of February 7, 2018, among MUDS and Cantor, as representatives of the Underwriters.
U.S. Holder” means a beneficial owner of MUDS securities who or that is, for U.S. federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof of the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax regardless of its source, or (iv) a trust, if  (a) a court within the United States is able to exercise primary supervision over the administration of the trust or one or more U.S. persons (as defined in the U.S. Tax Code) have authority to control all substantial decisions of the trust or (b) it has a valid election in effect under Treasury Regulations to be treated as a U.S. person.
U.S. Tax Code” means the Internal Revenue Code of 1986, as amended.
Whitebox” means Whitebox Advisors, LLC.
Wolverine” means Wolverine Asset Management, LLC.
 
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QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR MUDS STOCKHOLDERS
The questions and answers below highlight only selected information from this document and only briefly address some commonly asked questions about the proposals to be presented at the MUDS special meeting, including with respect to the proposed business combination. The following questions and answers do not include all the information that is important to MUDS stockholders. We urge stockholders to read carefully this entire joint proxy statement/prospectus, including the Annexes and the other documents referred to herein, to fully understand the proposed business combination and the voting procedures for the MUDS special meeting, which will be held on [], 2020 at 9:00 a.m. Eastern Time at the offices of Weil, Gotshal & Manges, LLP located at 767 Fifth Avenue, New York, New York, 10153.
Q:
Why am I receiving this joint proxy statement/prospectus?
A:
MUDS stockholders are being asked to consider and vote upon, among other proposals, a proposal to approve and adopt the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement and approve the business combination. As a result of the business combination, MUDS will acquire the Hycroft business from Seller. Subject to the terms of the Purchase Agreement, the value of the aggregate consideration in the business combination is expected to be approximately $537,000,000, which amount is inclusive of  (i) the value of the HYMC Class A common stock being issued to Seller and distributed to Seller’s stockholders in the business combination (the “purchase shares”), (ii) the value of the Excess Notes and the 1.5 Lien Notes, (iii) the debt assumption and (iv) the payoff amount. The consideration to be paid to Seller will be comprised of  (x) a number of shares of HYMC Class A common stock, equal to (1) (A) $325,000,000, plus (B) the value of the Surrendered Shares valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount, minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount divided by (2) $10.00, and (y) the Excess Notes and the 1.5 Lien Notes. Promptly following the issuance of the purchase shares to Seller in connection with the consummation of the business combination, Seller intends to distribute the purchase shares pro rata to its stockholders and Seller will cancel and retire the Excess Notes and 1.5 Lien Notes. See the section titled “The Business Combination —  Consideration to Seller Stockholders in the Business Combination” beginning on page [•] for further details. Copies of the Purchase Agreement and the Exchange Agreement are attached to the accompanying joint proxy statement/prospectus as Annex A and Annex B, respectively.
This joint proxy statement/prospectus and its Annexes contain important information about the proposed business combination and the other matters to be acted upon at the MUDS special meeting. You should read this joint proxy statement/prospectus and its Annexes carefully and in their entirety.
Your vote is important. You are encouraged to submit your proxy as soon as possible after carefully reviewing this joint proxy statement/prospectus and its Annexes.
Q:
When and where is the MUDS special meeting?
A:
The MUDS special meeting will be held on [•], 2020 at 9:00 a.m. Eastern Time at the offices of Weil, Gotshal & Manges, LLP located at 767 Fifth Avenue, New York, New York, 10153.
Q:
What are the specific proposals on which I am being asked to vote at the MUDS special meeting?
A:
MUDS stockholders are being asked to approve the following proposals:
1.
Proposal No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Purchase Agreement, the Exchange Agreement, the Second Lien Conversion Agreement and the business combination, which we refer to as the “Business Combination Proposal”;
The Charter Proposals — To consider and vote upon seven separate proposals to approve, assuming the Business Combination Proposal and the NASDAQ Proposal are approved and adopted, the following material differences between MUDS’ existing charter and the proposed charter.
 
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2.
Proposal No. 2 — To consider and vote upon an amendment to MUDS’ existing charter to increase the total number of authorized shares of all classes of capital stock from 111,000,000 shares to [•], which would consist of  (a) [•] shares of Class A common stock and (b) [•] shares of preferred stock;
3.
Proposal No. 3 — To consider and vote upon an amendment to MUDS’ existing charter to declassify the HYMC board of directors, so that each member of the HYMC board of directors will be elected at each annual meeting of stockholders, as opposed to MUDS having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term, and make certain related changes;
4.
Proposal No. 4 — To consider and vote upon an amendment to MUDS’ existing charter to provide that certain transactions are not “corporate opportunities” and that each of Mudrick Capital, Highbridge, Whitebox, Aristeia and Wolverine and the investment funds affiliated with or managed by Mudrick Capital, Highbridge, Whitebox, Aristeia and Wolverine and their respective successors and affiliates and all of their respective partners, principals, directors, officers, members, managers, equity holders and/or employees, including any of the foregoing who served as officers or directors of MUDS (each, an “Exempted Person”) are not subject to the doctrine of corporate opportunity;
5.
Proposal No. 5 — To consider and vote upon an amendment to MUDS’ existing charter to permit stockholder action by written consent;
6.
Proposal No. 6 — To consider and vote upon an amendment to MUDS’ existing charter to provide that HYMC will not be governed by Section 203 of the Delaware General Corporation Law (“DGCL”) and approve a provision in the proposed charter that is substantially similar to Section 203 of the DGCL, but excludes the investment funds affiliated with sponsor and their respective successors and affiliates and the investment funds affiliated with or managed by Mudrick Capital, Whitebox, Highbridge, Aristeia and Wolverine and their respective successors and affiliates (the “Sponsor Holders”) from the definition of  “interested stockholder,” and to make certain related changes. Upon consummation of the business combination, the Sponsor Holders will become “interested stockholders” within the meaning of Section 203 of the DGCL, but will not be subject to the restrictions on business combinations set forth in Section 203 of the DGCL, as the MUDS Board approved the business combination in which the Sponsor Holders became interested stockholders prior to such time as they became interested stockholders;
7.
Proposal No. 7 — To consider and vote upon an amendment to MUDS’ existing charter to clarify that the exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation shall not apply to any action to enforce any liability or duty under the Securities Act or the Exchange Act for which federal courts have exclusive jurisdiction; and
8.
Proposal No. 8 — To consider and vote upon an amendment to MUDS’ existing charter to authorize all other proposed changes, including, among others, those (i) resulting from the business combination, including changing the post-business combination corporate name from “Mudrick Capital Acquisition Corporation” to “Hycroft Mining Holding Corporation” and removing certain provisions relating to MUDS’ prior status as a blank check company and MUDS Class B common stock that will no longer apply upon consummation of the business combination, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect.
We refer to Proposals No. 2-8 collectively as the “Charter Proposals”;
9.
Proposal No. 9 — The Director Election Proposal — To consider and vote upon a proposal, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, to elect seven directors to serve on the HYMC board of directors until the next annual meeting of stockholders, or until their respective successors are duly elected and qualified, which we refer to as the “Director Election Proposal”;
 
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10.
Proposal No. 10 — The Incentive Plan Proposal — To consider and vote on a proposal to approve and adopt, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, the HYMC 2020 Performance and Incentive Pay Plan (the “Incentive Plan”) and the material terms thereunder, which we refer to as the “Incentive Plan Proposal”. A copy of the Incentive Plan is attached to the accompanying joint proxy statement/​prospectus as Annex C; and
11.
Proposal No. 11 — The NASDAQ Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal and the Charter Proposals are approved and adopted, for purposes of complying with applicable provisions of NASDAQ Listing Rule 5635, the issuance of more than 20% of MUDS’ issued and outstanding common stock in connection with the business combination, the private investment, an incremental equity investment, the forward purchase, the underwriting commission issuance and the lender issuance, and the related change in control, which we refer to as the “NASDAQ Proposal.”
Q:
Why is MUDS providing stockholders with the opportunity to vote on the business combination?
A:
Under MUDS’ current certificate of incorporation, MUDS must provide all holders of public shares with the opportunity to have their public shares redeemed upon the consummation of its initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. For business and other reasons, MUDS has elected to provide its stockholders with the opportunity to have their public shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, MUDS is seeking to obtain the approval of its stockholders of the Business Combination Proposal in order to allow its public stockholders to effectuate redemptions of their public shares in connection with the closing of the business combination. The approval of MUDS’ stockholders of the Business Combination Proposal is also a condition to the closing of the business combination under the Purchase Agreement.
Q:
When is the business combination expected to be completed?
A:
The consummation of the business combination is expected to take place on or prior to the second business day following the satisfaction or waiver of the conditions set forth in the Purchase Agreement and described below in the subsection entitled “The Purchase Agreement and Related Agreements — Conditions to Closing of the Business Combination.” The closing of the business combination, which is expected in the first half of 2020, is subject to customary and other closing conditions, including regulatory approvals and receipt of approvals from MUDS’ stockholders and Seller’s stockholders. The Purchase Agreement may be terminated by MUDS or Seller if the consummation of the business combination has not occurred by August 12, 2020 (the “outside date”), as a result of the approval by MUDS’ stockholders at a special meeting held on February 10, 2020, to extend the deadline for completion of a business combination from February 12, 2020 to August 12, 2020 (the “Extension Meeting” and such extension, the “extension”).
For a description of the conditions to the completion of the business combination, see the section entitled “The Purchase Agreement and Related Agreements — Conditions to Closing of the Business Combination.”
Q:
Following the business combination, will MUDS’ securities continue to trade on a stock exchange?
A:
Yes. Our publicly-traded units, MUDS Class A common stock and warrants are currently listed on the NASDAQ Capital Market under the symbols “MUDSU,” “MUDS” and “MUDSW,” respectively. We intend to apply to continue the listing of our publicly-traded Class A common stock and warrants on NASDAQ under the proposed symbols “HYMC” and “HYMCW,” respectively, upon the consummation of the business combination. As a result, our publicly-traded units will separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate entity.
 
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Q:   What happens if I sell my shares of MUDS Class A common stock before the MUDS special meeting?
A:
The record date for the MUDS special meeting is earlier than the date that the business combination is expected to be completed. If you transfer your shares of MUDS Class A common stock after the record date, but before the MUDS special meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the MUDS special meeting. However, you will not be able to seek redemption of the shares of MUDS Class A common stock because you will no longer be able to deliver them for redemption upon consummation of the business combination. If you transfer your shares of MUDS Class A common stock prior to the record date, you will have no right to vote those shares at the MUDS special meeting or redeem those shares for a pro rata portion of the proceeds held in the trust account.
Q:
If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?
A:
Under the rules of various national and regional securities exchanges, your broker, bank, or nominee cannot vote your shares with respect to non-routine matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank, or nominee. MUDS believes the proposals presented to the stockholders at the MUDS special meeting will be considered non-routine and, therefore, your broker, bank, or nominee cannot vote your shares without your instruction on the proposals presented at the MUDS special meeting. As a result, your shares will not be voted on any matter unless you affirmatively instruct your broker, bank or nominee how to vote yours shares in one of the ways indicated by your broker, bank or nominee. If you do not provide instructions with your proxy, your broker, bank, or other nominee may deliver a proxy card expressly indicating that it is NOT voting your shares on any proposal; this indication that a broker, bank, or nominee is not voting your shares is referred to as a “broker non-vote.” Broker non-votes will not be counted for purposes of determining the existence of a quorum or for purposes of determining the number of votes cast at the MUDS special meeting in respect of any proposal. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.
Q:
What constitutes a quorum at the MUDS special meeting?
Holders of a majority in voting power of MUDS’ common stock issued and outstanding and entitled to vote at the MUDS special meeting, present in person or represented by proxy, constitute a quorum. The initial stockholders, who currently own 43% of MUDS’ issued and outstanding shares of common stock, will count towards this quorum. At the MUDS special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present. Broker non-votes will not be counted for purposes of determining the existence of a quorum. In the absence of a quorum, the chairman of the MUDS special meeting has power to adjourn the MUDS special meeting. As of the record date for the MUDS special meeting, [•] shares of MUDS common stock would be required to achieve a quorum.
Q:
What vote is required to approve the proposals presented at the MUDS special meeting?
The approval of each of the Business Combination Proposal, the Incentive Plan Proposal and the NASDAQ Proposal requires the affirmative vote of a majority of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. If a valid quorum is established, a stockholder’s failure to vote by proxy or in person at the MUDS special meeting will have no effect on the outcome of any vote on any of the foregoing proposals. Abstentions will be counted in connection with determination of whether a valid quorum is established, but will have no effect on the vote with respect to such proposals. Broker non-votes will also have no effect on the vote with respect to such proposals. The initial stockholders have agreed to vote their founder shares and any public shares they may hold in favor of the business combination. Currently, the initial stockholders own approximately 43% of MUDS’ issued and outstanding common stock, including all of the outstanding founder shares.
 
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The approval of the Charter Proposals requires the affirmative vote of the holders of a majority of MUDS’ outstanding shares of common stock entitled to vote thereon at the MUDS special meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or in person at the MUDS special meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposals, each will have the same effect as a vote “AGAINST” such Charter Proposals.
Directors are elected by a plurality of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. This means that the seven director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions, broker non-votes and failure to vote by proxy or in person will have no effect on the election of directors.
Q:
How many votes do I have at the MUDS special meeting?
A:
MUDS stockholders are entitled to one vote on each proposal presented at the MUDS special meeting for each share of common stock held of record as of  [•], 2020, the record date for the MUDS special meeting. As of the close of business on the record date, there were [•] shares of common stock outstanding.
Q:
How will the sponsor, directors and officers vote?
A:
In connection with the IPO, the initial stockholders agreed to vote their founder shares and any public shares purchased during or after the IPO in favor of the business combination. None of the sponsor, directors or officers has purchased any shares of common stock during or after the IPO and, as of the date of this joint proxy statement/prospectus, neither we nor sponsor, the directors or officers have entered into agreements, and are not currently in negotiations, to purchase shares prior to the consummation of the business combination. Currently, the initial stockholders own 43% of MUDS’ issued and outstanding shares of common stock, including all of the founder shares, and will be able to vote all such shares at the MUDS special meeting.
Q:
What happens if I vote against the Business Combination Proposal?
A:
If you vote against the Business Combination Proposal but the Business Combination Proposal still obtains the affirmative vote of a majority of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon, then the Business Combination Proposal will be approved and, assuming the approval of the NASDAQ Proposal and the Charter Proposals and the satisfaction or waiver of the other conditions to closing, the business combination will be consummated in accordance with the terms of the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement.
If you vote against the Business Combination Proposal and the Business Combination Proposal does not obtain the affirmative vote of a majority of the votes cast by holders of outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon, then the Business Combination Proposal will fail and we will not consummate the business combination.
Q:
Do I have redemption rights?
A:
If you are a public stockholder and you properly exercise your right to redeem your public shares and timely deliver your shares to the transfer agent, MUDS will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest not previously released to MUDS to pay its franchise and income taxes, divided by the number of then issued and outstanding public shares; provided that MUDS will not redeem any public shares to the extent that such redemption would result in MUDS having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) of less than $5,000,001. A public stockholder,
 
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together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming in this aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of common stock included as part of units sold in the IPO unless such stockholder obtains MUDS’ prior consent. Holder of MUDS’ outstanding public warrants do not have any redemption rights in connection with the business combination.
The initial stockholders have agreed to waive their redemption rights with respect to their founder shares and with respect to any public shares they may hold in connection with the consummation of the business combination. The founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price. For illustrative purposes, based on the fair value of marketable securities held in the trust account of approximately $[•] as of  [•], 2020, the estimated per share redemption price would have been approximately $[•]. Additionally, shares properly tendered for redemption will only be redeemed if the business combination is consummated; otherwise holders of such shares will only be entitled to a pro rata portion of the trust account (including interest but net of franchise and income taxes payable) in connection with the liquidation of the trust account, unless we complete an alternative business combination prior to August 12, 2020, as a result of the extension.
Q:
Can MUDS’ initial stockholders redeem their founder shares in connection with consummation of the business combination?
A:
No. The initial stockholders have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the consummation of the business combination.
Q:
Is there a limit on the number of shares that may be redeemed?
A:
Yes. A public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), is restricted from seeking redemption rights with respect to more than an aggregate of 15% of the shares of common stock included as part of units sold in the IPO without MUDS’ prior consent. Accordingly, all shares in excess of 15% owned by a public stockholder will not be redeemed for cash without such stockholder first obtaining MUDS’ prior consent. On the other hand, a public stockholder who holds less than 15% of the public Class A common stock may redeem all of the public shares held by such public stockholder for cash.
In no event is your ability to vote all of your shares (including those shares held by you in excess of 15% of the shares of common stock included as part of units sold in the IPO) for or against the business combination restricted.
There is no specified maximum redemption threshold under MUDS’ existing charter, other than the aforementioned 15% threshold. Each redemption of Class A common stock by public stockholders will reduce the amount in the trust account. The Purchase Agreement provides that MUDS’ and Seller’s respective obligations to consummate the business combination are conditioned on (i) immediately prior to the consummation of the business combination, the amount in the trust account and the proceeds from the private investment and the forward purchase contract and available under the Sprott Credit Agreement and the Sprott Royalty Agreement equaling or exceeding $210,000,000, and (ii) immediately after the consummation of the business combination and after payment in respect of all stockholder redemptions, the payoff amount and any payments due to Excess Noteholders and 1.5 Lien Noteholders in the exchange, if any, unrestricted and available cash equaling or exceeding $50,000,000. In addition, in no event will MUDS redeem public shares in connection with the business combination in an amount that would cause its net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) to be less than $5,000,001. Holders of public warrants do not have redemption rights in connection with the business combination.
 
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Q:
Will my vote affect my ability to exercise redemption rights?
A:
No. You may exercise your redemption rights whether you vote your shares of common stock for or against, or whether you abstain from voting on the Business Combination Proposal or any other proposal described by this joint proxy statement/prospectus. As a result, the business combination can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less-liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of NASDAQ.
Q:
How do I exercise my redemption rights?
A:
In order to exercise your redemption rights, you must: (i) if you hold public units, separate the underlying public shares and public warrants, and (ii) prior to [•] Eastern Time on [•], 2020 (two business days before the MUDS special meeting), (x) tender your shares physically or electronically and (y) submit a request in writing that MUDS redeem your public shares for cash to Continental Stock Transfer & Trust Company, MUDS’ transfer agent, at the following address:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
Please state in your written redemption request sent to Continental Stock Transfer & Trust Company, MUDS’ transfer agent, if you are not acting in concert or as a “group” (as provided in Section 13(d) of the Exchange Act) with any other stockholder with respect to shares of common stock. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as provided in Section 13(d) of the Exchange Act) will be restricted from exercising redemption rights with respect to more than an aggregate of 15% of the shares of Class A common stock included in the units sold in the IPO without MUDS’ prior consent. Accordingly, all public shares in excess of the 15% threshold beneficially owned by a public stockholder or group will not be redeemed for cash unless such stockholder first obtains MUDS’ prior consent.
Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent time to effect delivery. It is our understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, MUDS does not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in “street name” will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.
Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” are required to either tender their certificates to the transfer agent prior to the date set forth in these proxy materials or deliver their shares to the transfer agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken on the business combination. If you delivered your shares for redemption to our transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that our transfer agent return the shares (physically or electronically). The requirement for physical or electronic delivery prior to the MUDS special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the business combination is approved.
There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge a tendering broker a fee and it is in the broker’s discretion whether or not to pass this cost on to the
 
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redeeming stockholder. However, this fee would be incurred regardless of whether or not MUDS requires stockholders seeking to exercise redemption rights to tender their shares, as the need to deliver shares is a requirement to exercising redemption rights, regardless of the timing of when such delivery must be effectuated.
Q:
What are the U.S. federal income tax consequences of exercising my redemption rights or choosing not to exercise such redemption rights?
A:
As described more fully below, a U.S. Holder of MUDS Class A common stock that exercises its redemption rights to receive cash in exchange for such shares may be treated as selling ordinary shares resulting in the recognition of capital gain or capital loss (assuming such U.S. Holder holds its MUDS Class A common stock as a capital asset). There may be certain circumstances in which the redemption may be treated as a distribution as an amount equal to the redemption proceeds, for U.S. federal income tax purposes, depending on the amount of ordinary shares or common stock, as the case may be, that a U.S. Holder owns or is deemed to own by attribution (including through the ownership of warrants).
Please see the section entitled “Material Tax Considerations — MUDS Material U.S. Federal Income Tax Considerations” for a discussion of material U.S. federal income tax consequences of exercising your redemption rights or choosing not to exercise such redemption rights. You are urged to consult your tax advisors regarding the tax consequences of exercising your redemption rights.
Q:
If I am a public warrant holder, can I exercise redemption rights with respect to my public warrants?
A:
No. The holders of public warrants have no redemption rights with respect to the public warrants in connection with the business combination.
Q:
If I am a public unit holder, can I exercise redemption rights with respect to my public units?
A:
No. Holders of outstanding units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares.
If you hold units registered in your own name, in order to redeem your underlying shares you must deliver the certificate for such units to Continental Stock Transfer & Trust Company, MUDS’ transfer agent, with written instructions to separate such units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights with respect to the public shares.
If a broker, dealer, commercial bank, trust company or other nominee holds your units, you must instruct such nominee to separate your units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company, MUDS’ transfer agent. Such written instructions must include the number of units to be split and the nominee holding such units. Your nominee must also initiate electronically, using DTC’s deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant units and a deposit of an equal number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights with respect to the public shares upon the separation of the public shares from the units. While this is typically done electronically the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.
Q:
Do I have appraisal rights if I object to the proposed business combination?
A:
No. Appraisal rights are not available to holders of MUDS shares in connection with the business combination.
Q:
What happens if the business combination is not consummated?
A:
There are certain circumstances under which the Purchase Agreement may be terminated. Please see the section entitled “The Purchase Agreement and Related Agreements — Termination” for information regarding the parties’ specific termination rights.
 
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If MUDS does not consummate the business combination, we may continue to try to complete a business combination with a different target business until August 12, 2020. If MUDS fails to complete a business combination by August 12, 2020, then at such time we will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten (10) business days thereafter, redeem our public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest not previously released to MUDS to pay its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish MUDS’ public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of MUDS’ remaining stockholders and the MUDS Board, dissolve and liquidate, subject in each case to its obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including trust account assets) will be less than the initial public offering price per unit in the IPO. Please see the section entitled “Risk Factors — Risks Related to MUDS and the Business Combination.
Holders of MUDS founder shares have waived any right to any liquidating distribution with respect to such shares. In addition, if MUDS fails to complete a business combination by August 12, 2020, there will be no redemption rights or liquidating distributions with respect to MUDS’ outstanding warrants, which will expire worthless.
Q:
What do I need to do now?
A:
You are urged to read carefully and consider the information contained in this joint proxy statement/​prospectus, including the Annexes, and to consider how the business combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this joint proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.
Q:
How do I vote?
A:
If you were a holder of record of MUDS common stock on [•], 2020, the record date for the MUDS special meeting, you may vote with respect to the proposals in person at the MUDS special meeting, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided or by facsimile.
Voting by Mail or Facsimile.   By signing the proxy card and returning it either (i) in the enclosed prepaid envelope Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or (ii) by facsimile to Continental Stock Transfer & Trust Company by sending the completed, signed and dated proxy card to (212) 509-5152, you are authorizing the individuals named on the proxy card to vote your shares at the MUDS special meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the MUDS special meeting so that your shares will be voted if you are unable to attend the MUDS special meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. Votes submitted by mail must be received by [•] Eastern Time on [•], 2020.
Voting in Person at the Meeting.   If you attend the MUDS special meeting and plan to vote in person, we will provide you with a ballot at the MUDS special meeting. If your shares are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the MUDS special meeting. If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the MUDS special meeting and vote in person, you will need to bring to the MUDS special meeting a legal proxy from your broker, bank or nominee authorizing
 
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you to vote these shares. For additional information, please see the section entitled “Special Meeting of MUDS Stockholders” beginning on page [•] of this joint proxy statement/prospectus.
If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should contact your broker, bank or nominee to ensure that votes related to the shares you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the special meeting and vote in person, obtain a proxy from your broker, bank or nominee.
Q:
What will happen if I sign and return my proxy card without indicating how I wish to vote?
A:
Signed and dated proxies received by us without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxy holders may use their discretion to vote on any other matters which properly come before the MUDS special meeting.
Q:
If I am not going to attend the MUDS special meeting in person, should I return my proxy card instead?
A:
Yes. Whether you plan to attend the MUDS special meeting or not, please read the enclosed joint proxy statement/prospectus carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or by facsimile to Continental Stock Transfer & Trust Company by sending the completed, signed and dated proxy card to (212) 509-5152.
Q:
May I change my vote after I have mailed my signed proxy card?
A:
Yes. You may change your vote by sending a later-dated, signed proxy card to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004, by facsimile to Continental Stock Transfer & Trust Company by sending the completed, signed and dated proxy card to (212) 509-5152 or by attending the MUDS special meeting in person and voting. You also may revoke your proxy by sending a notice of revocation to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or by facsimile to Continental Stock Transfer & Trust Company by sending the completed, signed and dated proxy card to (212) 509-5152, which must be received by Continental Stock Transfer & Trust Company prior to the MUDS special meeting.
Q:
What should I do if I receive more than one set of voting materials?
A:
You may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or by facsimile to Continental Stock Transfer & Trust Company by sending the completed, signed and dated proxy card to (212) 509-5152 in order to cast your vote with respect to all of your shares.
Q:
Who will solicit and pay the cost of soliciting proxies for the MUDS special meeting?
A:
MUDS will pay the cost of soliciting proxies for the MUDS special meeting. MUDS has engaged Advantage Proxy, Inc. to assist in the solicitation of proxies for the MUDS special meeting. MUDS has agreed to pay Advantage Proxy, Inc. a fee of  $7,500, plus costs and expenses, which fee also includes Advantage Proxy, Inc. acting as the inspector of elections at the MUDS special meeting. MUDS will reimburse Advantage Proxy, Inc. for reasonable out-of-pocket expenses and will indemnify Advantage Proxy, Inc. and its affiliates against certain claims, liabilities, losses, damages and expenses. MUDS will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of MUDS common stock for their expenses in forwarding soliciting materials to
 
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beneficial owners of the MUDS common stock and in obtaining voting instructions from those beneficial owners. MUDS’ directors and officers may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.
Q:
Who can help answer my questions?
A:
If you have questions about the proposals or if you need additional copies of this joint proxy statement/​prospectus or the enclosed proxy card you should contact:
Jason Mudrick, Chief Executive Officer and Secretary or Glenn Springer, Chief Financial Officer
c/o Mudrick Capital Acquisition Corporation
527 Madison Avenue, 6th Floor
New York, NY 10022
Tel: (646) 747-9500
Email: info@mudrickcapital.com
You may also contact MUDS’ proxy solicitor at:
Advantage Proxy, Inc.
PO Box 13581
Des Moines, WA 98198
Tel: (877) 870-8565 (toll free)
Banks and brokers can call collect at: (206) 870-8565
Email: ksmith@advantageproxy.com
To obtain timely delivery, MUDS’ stockholders must request the materials no later than five business days prior to the MUDS special meeting.
You may also obtain additional information about us from documents filed with the SEC by following the instructions in the section entitled “Where You Can Find More Information.”
If you intend to seek redemption of your public shares, you will need to send a letter demanding redemption and deliver your stock (either physically or electronically) to MUDS’ transfer agent prior to the MUDS special meeting in accordance with the procedures detailed under the question “How do I exercise my redemption rights?” If you have questions regarding certification of your position, redemption or delivery of your stock, please contact MUDS’ transfer agent:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, New York 10004
Attention: Mark Zimkind
Email: mzimkind@continentalstock.com
 
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QUESTIONS AND ANSWERS FOR SELLER STOCKHOLDERS
Q:
Why am I receiving this joint proxy statement/prospectus?
A:
Seller stockholders are being asked to consider and vote upon a proposal to approve the Purchase Agreement and the business combination contemplated thereby. As a result of the business combination, MUDS and Acquisition Sub will acquire the Hycroft business from Seller. Seller intends to promptly distribute the shares of HYMC Class A common stock received in connection with the business combination to its stockholders on a pro rata basis, subject to the approval of the Seller Dissolution Proposal, and to wind-up its affairs after retaining sufficient assets to conduct the plan of dissolution and wind up its affairs, in accordance with the plan of dissolution. In order to complete the dissolution and liquidation of Seller pursuant to the plan of dissolution, Seller stockholders must approve the Seller Business Combination Proposal and the Seller Dissolution Proposal. Seller will hold a special meeting of its stockholders in order to obtain this approval. In connection with the business combination, Seller stockholders representing a sufficient number of shares of Seller’s outstanding common stock necessary to approve the Seller Business Combination Proposal have agreed, among other things, to vote in favor of the adoption of the Purchase Agreement and the business combination, subject to certain exceptions, and Seller stockholders representing a sufficient number of shares of Seller’s outstanding common stock necessary to approve the Seller Dissolution Proposal have also indicated their intention to vote “FOR” the Seller Dissolution Proposal. As a result, we believe that the Seller Business Combination Proposal and the Seller Dissolution Proposal will be approved by the Seller stockholders. As a result of the business combination, and assuming approval of the Seller Dissolution Proposal, pursuant to the plan of dissolution Seller will liquidate and distribute to each holder of Seller common stock, including shares of Seller common stock issued in connection with the conversion of the Second Lien Notes (as further described herein), his, her or its pro rata portion of the net assets of Seller, which are expected to consist primarily of issued and outstanding shares of HYMC Class A common stock. Seller expects that the number of shares of HYMC Class A common stock, to be received in the business combination will be equal to (1) (A) $325,000,000, plus (B) the value of the Surrendered Shares valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount, minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount divided by (2) $10.00. A copy of each of the Purchase Agreement and the plan of dissolution is attached to this joint proxy statement/prospectus as Annex A and Annex E, respectively.
This joint proxy statement/prospectus and its Annexes contain important information about the Purchase Agreement and the business combination. Seller stockholders should read this joint proxy statement/prospectus and its Annexes carefully and in their entirety.
Seller stockholders are encouraged to return their proxy card as soon as possible after carefully reviewing this joint proxy statement/prospectus and its Annexes.
Q:
When and where will the Seller special meeting be held?
A:
The Seller special meeting will be held at Seller’s offices at 8181 E. Tufts Avenue, Denver, CO 80237, on [•], 2020, at [•] a.m., unless the Seller special meeting is adjourned.
Q:
What are the specific proposals on which I am being asked to vote at the Seller special meeting?
A:
Seller stockholders are being asked to approve the following proposals:
Proposal No. 1 — The Seller Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Purchase Agreement and the business combination contemplated thereby, which we refer to as the “Seller Business Combination Proposal”;
Proposal No. 2 — The Seller Dissolution Proposal — To consider and vote upon a proposal to approve and adopt the plan of dissolution attached to the joint proxy statement/prospectus as Annex E, including the dissolution and distribution of Seller’s assets contemplated thereby, subject to the approval of the
 
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Seller Business Combination Proposal and the consummation of the business combination, which we refer to as the “Seller Dissolution Proposal;” and
Proposal No. 3 — Seller Adjournment Proposal — To consider and vote upon a proposal to approve the adjournment of the Seller special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event that there are insufficient votes for the approval of one or more proposals to be submitted for stockholder approval at the Seller special meeting, which we refer to as the “Seller Adjournment Proposal.”
Q:
Who is entitled to vote?
A:
The holders of Seller common stock as of the Seller record date ([•], 2020) are entitled to vote on matters that come before the Seller special meeting. However, a stockholder may only vote his, her its shares if he, she or it is present in person or is represented by proxy at the Seller special meeting. Holders of outstanding warrants to purchase shares of Seller common stock are not entitled to vote unless such warrants are duly and validly exercised prior to the record date of the Seller special meeting.
Q:
How can I vote?
A:
If you are a holder of record of Seller common stock on the record date, you may vote in person at the Seller special meeting or by submitting a proxy for the Seller special meeting. You may submit your proxy by completing, signing, dating and returning the enclosed proxy card to Seller’s secretary by mail to Hycroft Mining Corporation at 8181 E. Tufts Ave., Suite 510, Denver, CO 80237, Attention: Corporate Secretary, so that it is received by Seller’s secretary prior to the vote at the Seller special meeting (which is scheduled to take place on [•], 2020).
Q:
How many votes do I have?
A:
Each share of Seller common stock is entitled to one vote per share at the Seller special meeting. As of the close of business on the Seller record date, there were [•] shares of Seller common stock outstanding and entitled to vote.
Q:
What constitutes a quorum?
A:
A quorum of Seller stockholders is necessary to hold a valid meeting. A quorum will be present at the Seller special meeting if a majority of the issued and outstanding shares entitled to vote is represented in person or by proxy at the special meeting. As of the Seller record date for the Seller special meeting, [•] shares of Seller common stock would be required to achieve a quorum. At the Seller special meeting, we will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal as present for purposes of determining whether a quorum is present.
Q:
What vote is required to approve the proposals presented at the Seller special meeting?
A:
The approval of the Seller Business Combination Proposal and the Seller Dissolution Proposal require the affirmative vote of a majority of the outstanding shares of Seller common stock entitled to vote at the Seller special meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or in person at the Seller special meeting as well as an abstention from voting with regard to the Business Combination Proposal and the Seller Dissolution Proposal, will have the same effect as a vote “AGAINST” such proposal.
The approval of the Seller Adjournment Proposal requires the affirmative vote for the proposal by the holders of a majority of the shares of common stock represented in person or by proxy and voting at the Seller special meeting. If a valid quorum is established, a stockholder’s failure to vote by proxy or in person at the Seller special meeting will have no effect on the outcome of any vote on the Seller Adjournment Proposal. Abstentions will be counted in connection with the determination of whether a valid quorum is established but will have no effect on the vote with respect to such proposal.
 
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Q:
What are the recommendations of the Seller Board?
A:
The Seller Board recommends that Seller stockholders vote “FOR” the Business Combination Proposal and “FOR” the Seller Dissolution Proposal. The Seller Board has determined that the business combination is expedient, fair to, and in the best interests of, Seller and its stockholders and it has determined that the plan of dissolution is advisable and in the best interests of Seller and its stockholders. Accordingly, the Seller Board has approved the Purchase Agreement and the business combination contemplated thereby and the plan of dissolution. For a more complete description of the recommendation of the Seller Board, see “Seller Special Meeting” beginning on page [•] of this proxy statement/prospectus.
The existence of financial and personal interests of one or more of Seller’s directors may result in a conflict of interest on the part of such director(s) between what he or they may believe is in the best interests of Seller and its stockholders and what he or they may believe is best for himself or themselves in determining to recommend that stockholders vote for the proposals. For a more detailed discussion, see the section entitled “Seller Special Meeting — Recommendation to Seller’s Stockholders” beginning on page [•] of this proxy statement/prospectus.
Q:
How do other Seller stockholders intend to vote?
A:
In connection with the business combination, each of Mudrick Capital Management, LP, Highbridge, Whitebox, Aristeia and Wolverine and the investment funds affiliated with or managed by Mudrick Capital Management, LP, Highbridge, Whitebox, Aristeia and Wolverine, representing stock holdings of more than a majority of the outstanding Seller common stock, have entered into the Seller Support Agreement pursuant to which they have agreed to support and vote all of their shares of Seller common stock in favor of the Seller Business Combination Proposal. Each of Mudrick Capital, Highbridge and Whitebox and the investment funds affiliated with or managed by Mudrick Capital, Highbridge and Whitebox have also indicated their intention to vote “FOR” the Seller Dissolution Proposal.
Q:
What happens if the business combination is not approved or consummated?
A:
If the Seller Business Combination Proposal is not adopted by Seller’s stockholders or if the business combination is not completed for any other reason, Seller will remain an independent private company. Seller does not intend to adopt and implement the plan of dissolution to liquidate, dissolve and distribute its assets unless the business combination is completed. Seller has incurred recurring operating losses and continues to have working capital funding requirements. If the business combination is not approved and consummated on a timely basis, and/or Seller does not obtain substantial new debt or private investment on a timely basis, Seller would not likely have sufficient resources to continue operations and may be required to seek protection under the U.S. Bankruptcy Code or similar relief. In such an event, it is possible that there would not be significant assets, or any assets, available for distribution to Seller’s stockholders.
Q:
What will happen if the Seller Business Combination Proposal is approved and the Seller Dissolution Proposal is not approved?
A:
If Seller stockholders approve the Purchase Agreement and the Seller Business Combination Proposal and the related business combination but do not approve the plan of dissolution, Seller will complete the business combination as contemplated in the Purchase Agreement and will review methods to promptly distribute the HYMC Class A common stock Seller receives to its stockholders upon consummation of the business combination. In connection with the business combination, Seller stockholders representing a sufficient number of shares of Seller’s outstanding common stock necessary to approve the Seller Business Combination Proposal have agreed, among other things, to vote in favor of the adoption of the Purchase Agreement and the business combination, subject to certain exceptions, and Seller stockholders representing a sufficient number of shares of Seller’s outstanding common stock necessary to approve the Seller Dissolution Proposal have also indicated their intention to vote “FOR” the Seller Dissolution Proposal. As a result, we believe that the Seller Business Combination Proposal and the Seller Dissolution Proposal will be approved by the Seller stockholders.
 
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Q:
Do Seller stockholders have appraisal rights in connection with the proposed business combination?
A:
No. Appraisal rights are not available to holders of Seller common stock in connection with the business combination or the plan of dissolution under applicable Delaware law.
Under the plan of dissolution, Seller will file a certificate of dissolution with the Secretary of State of the State of Delaware, Seller’s jurisdiction of incorporation, to dissolve Seller as a legal entity following the satisfaction of its outstanding liabilities. Seller currently intends to file the certificate of dissolution promptly following the consummation of the business combination in order to effect the distribution to Seller’s stockholders of the HYMC Class A common stock to be received by Seller in the business combination, including holders of Seller common stock received in connection with the conversion of the Second Lien Notes into shares of Seller common stock under the Second Lien Conversion Agreement. Holders of outstanding warrants to purchase shares of Seller common stock do not have rights as stockholders of Seller and will not receive any assets upon distribution pursuant to the plan of dissolution unless such holders duly and validly exercise such Seller warrants prior to the filing by Seller of the certificate of dissolution with the Secretary of State of the State of Delaware. Holders of Seller warrants that wish to participate in the distribution of purchase shares pursuant to the plan of dissolution must exercise their Seller warrants at a price (as of December 31, 2019) of  $5.20 per share, which is in excess of the value attributed to shares of Seller common stock.
Q:
If the Seller Business Combination Proposal and the Seller Dissolution Proposal are approved and the business combination is consummated on the terms contained in the Purchase Agreement, what does Seller estimate that the holders of Sellers common stock will receive?
A:
Each holder of issued and outstanding shares of Seller common stock, including Seller common stockholders as a result of the conversion of the Second Lien Notes (as further described herein), are expected to receive a pro rata number of shares of HYMC Class A common stock, equal to (1) (A) $325,000,000, plus (B) the value of the Surrendered Shares valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount, minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount divided by (2) $10.00.
Q:
What do I need to do now?
A:
Seller urges you to read carefully and consider the information contained in this joint proxy statement/​prospectus, including the annexes, and to consider how the business combination and subsequent dissolution and liquidation of Seller will affect you as a stockholder of Seller. Stockholders should then vote as soon as possible in accordance with the instructions provided in this joint proxy statement/​prospectus and on the enclosed proxy card.
Q:
What happens if I sell my shares of Seller common stock before the Seller special meeting?
A:
The Seller record date for the Seller special meeting is earlier than the date of the Seller special meeting and earlier than the date that the business combination is expected to be completed. If you transfer your shares of Seller common stock after the applicable record date, but before the Seller special meeting, unless you grant a proxy to the transferee, you will retain your right to vote at such Seller special meeting. Shares of Seller common stock are subject to the transfer restrictions set forth in Seller’s amended and restated certificate of incorporation and the Seller stockholders agreement dated as of October 22, 2015 to which all stockholders of Seller are a party. Any attempt to transfer your shares of Seller common stock must comply with the terms and conditions set forth in the amended and restated certificate of incorporation and the Seller stockholders agreement.
Q:
May I change my vote after I have returned my signed proxy card?
A:
Yes. Stockholders may send a later-dated, signed proxy card to Seller’s secretary by mailing it to Hycroft Mining Corporation at 8181 E. Tufts Ave., Suite 510, Denver, CO 80237, Attention: Corporate Secretary, so that it is received by Seller’s secretary prior to the vote at the Seller special meeting (which is scheduled to take place on [•], 2020) or attend the Seller special meeting in person and vote.
 
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Stockholders also may revoke their proxy by sending a notice of revocation to Seller’s secretary, which must be received by Seller’s secretary prior to the vote at the Seller special meeting. Stockholders may send a notice of revocation by emailing it to Hycroft Mining Corporation, Attention: David Stone at dstone@nge.com.
Q:
What happens if I fail to take any action with respect to the Seller special meeting?
A:
If you fail to take any action with respect to the Seller special meeting and the business combination and plan of dissolution are approved by stockholders and the business combination is consummated, pursuant to the plan of dissolution you will receive a distribution of your pro-rata share of the shares of HYMC Class A common stock received by Seller in the business combination and you will become a stockholder of HYMC. If you fail to take any action with respect to the Seller special meeting and the business combination and plan of dissolution are not approved, you will remain a stockholder of Seller only.
Q:
What should I do with my stock certificates?
A:
As a result of the consummation of the business combination, holders of Seller common stock will receive shares of HYMC Class A common stock without needing to take any action and accordingly such holders should not submit the certificates relating to their shares of Seller common stock.
Q:
What should I do if I receive more than one set of voting materials?
A:
Seller stockholders may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast a vote with respect to all of your shares of Seller common stock.
Q:
What are the United States federal income tax consequences of the business combination, including the underlying asset sale and distribution of HYMC Class A common stock in connection with the plan of dissolution?
A:
Subject to the qualifications set forth in this joint proxy statement/prospectus, Seller’s sale of the Hycroft business should be treated as a taxable sale of the assets comprising the Hycroft business and any gain recognized on such sale should be subject to U.S. federal income tax at the 21-percent U.S. federal corporate income tax rate. However, Seller believes that its net operating loss carryforwards should be sufficient to fully offset the gain, if any, arising from the sale. Seller’s distribution of HYMC Class A common stock to its stockholders as a liquidating distribution in connection with Seller’s plan of dissolution should be treated as a taxable sale or exchange of such HYMC Class A common stock by Seller. However, because Seller’s tax basis in the HYMC Class A common stock should be equal to such stock’s fair market value at the time of distribution, no additional gain should be recognized by Seller upon such distribution. The receipt of HYMC Class A common stock by a Seller stockholder in connection with the liquidation and dissolution of Seller should be treated as a sale or exchange of all of such Seller stockholder’s interest in Seller with respect to which such stockholder will recognize gain or loss in an amount equal to the difference, if any, between (i) the fair market value of the HYMC Class A common stock received pursuant to the distribution and (ii) such stockholder’s adjusted tax basis in the Seller common stock exchanged therefore. Assuming the Seller common stock was held as a capital asset, any gain or loss recognized on such deemed sale or exchange should be treated as capital gain or loss.
For additional information and a general discussion of such tax considerations, see “Material Tax Considerations.”
 
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Tax matters are complicated and the tax consequences of the business combination to you will depend on the facts of your particular circumstances. Because individual circumstances may differ, you should consult with your tax advisor as to the specific tax consequences of the business combination to you.
Q:
Who can help answer my questions?
A:
If you have any questions about the Purchase Agreement, the business combination, the plan of dissolution or how to return your proxy card, or if you need additional copies of this joint proxy statement/prospectus, you should contact Tracey Thom, Vice President Investor Relations and Corporate Communications by phone at (303) 524-1948 or by mailing your request to Tracey Thom, c/o Hycroft Mining Corporation, 8181 E. Tufts Ave., Suite 510, Denver, CO 80237.
 
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SUMMARY TERM SHEET
This summary term sheet, together with the sections entitled “Questions and Answers about the Proposals for MUDS Stockholders,” “Questions and Answers for Seller Stockholders” and “Summary of the Joint Proxy Statement/Prospectus,” summarizes certain information contained in this joint proxy statement/​prospectus, but does not contain all of the information that is important to you. You should read carefully this entire joint proxy statement/prospectus, including the attached Annexes, for a more complete understanding of the matters to be considered at the MUDS special meeting. In addition, for definitions used commonly throughout this joint proxy statement/prospectus, including this summary term sheet, please see the section entitled “Frequently Used Terms.”

Mudrick Capital Acquisition Corporation, a Delaware corporation, or MUDS, is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On January 13, 2020, MUDS, Acquisition Sub and Seller entered into the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, Acquisition Sub will acquire from Seller the issued and outstanding equity interests of the Hycroft direct subsidiaries and MUDS or Acquisition Sub will acquire substantially all of the other assets and assume substantially all of the liabilities of Seller. Prior to the business combination, Allied Delaware, Allied VGH and its wholly owned subsidiaries will be converted to Delaware limited liability companies in accordance with Delaware law.

Concurrently with the signing of the Purchase Agreement, Seller and the 1.25 Lien Noteholders entered into the 1.25 Lien Exchange Agreement. Pursuant to the terms of the 1.25 Lien Exchange Agreement, prior to the consummation of the business combination, the 1.25 Lien Noteholders will transfer the 1.25 Lien Notes to Seller in exchange for the New Subordinated Notes. In connection with the business combination, and as part of the debt assumption thereunder, HYMC will assume the Assumed New Subordinated Notes.

Concurrently with the signing of the Purchase Agreement, Acquisition Sub, the 1.5 Lien Noteholders and the 1.25 Lien Noteholders entered into the Exchange Agreement. Pursuant to the terms of the Exchange Agreement, as part of the business combination, (i) the Excess Noteholders will transfer the Excess Notes to Acquisition Sub in exchange for the Excess Notes Cash Payment Amount and the Excess Notes Share Payment, in each case if and to the extent applicable, and (ii) the 1.5 Lien Noteholders will transfer the 1.5 Lien Notes to Acquisition Sub in exchange for the 1.5 Lien Cash Payment Amount and the 1.5 Lien Share Payment, in each case if and to the extent applicable.

Concurrently with the signing of the Purchase Agreement, Seller and the Second Lien Noteholders entered into the Second Lien Conversion Agreement. Pursuant to the terms of the Second Lien Conversion Agreement agreed to convert their Second Lien Notes to Seller common stock in accordance with the terms of such notes as part of the business combination and waive certain provisions and terms of the Second Lien Notes.

Concurrently with the signing of the Purchase Agreement, MUDS entered into the Subscription/​Backstop Agreements with the Initial Subscribers for the purchase and sale of 6,500,000 shares of HYMC Class A common stock at a purchase price of  $10.00 per share, and the issuance to such investors of 3,250,000 PIPE warrants, for an aggregate purchase price of up to $65,000,000, which number of shares of HYMC Class A common stock issued and aggregate purchase price shall be subject to reduction if  (i) prior to the consummation of the business combination, MUDS enters into subscription agreements or other instruments pursuant to which MUDS agrees to issue and sell to certain Third-Party Private Investors all or any portion of the shares to be issued in connection with the transactions contemplated by such Subscription/Backstop Agreements or (ii) in connection with the consummation of the business combination, the cash remaining in MUDS’ trust account following the satisfaction of stockholder redemptions exceeds $10,000,000.

Concurrently with the consummation of the business combination, sponsor will purchase in a private placement 2,500,000 units having substantially the same terms as the sale of units in the IPO and 625,000 shares of Class A common stock for an aggregate purchase price of  $25,000,000, pursuant to the Forward Purchase Contract entered into by MUDS and sponsor in connection with the IPO.
 
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Concurrently with the signing of the Purchase Agreement, sponsor and MUDS entered into the Parent Sponsor Letter Agreement, pursuant to which sponsor agreed to surrender to MUDS, immediately prior to the consummation of the business combination and for no consideration, the Surrendered Shares.

On February  12, 2020, MUDS entered into the UA Amendment, pursuant to which the deferred underwriting fees, which were originally payable by MUDS to the Underwriters in cash upon completion of the business combination, are payable upon completion of the business combination through a combination of  (i) shares of HYMC Class A common stock, valued at $10 per share, (ii) cash and (iii) additional HYMC Class A common stock or cash dependent upon the amount of Class A common stock owned by Cantor as of February  12, 2020 and by independent third parties as of the consummation of the business combination, after taking into account any redemptions. The UA Amendment did not amend, modify or supplement any other terms of the Underwriting Agreement.

There are currently 12,109,287 shares of MUDS common stock issued and outstanding, consisting of  (i) 6,909,287 shares of MUDS Class A common stock originally issued in the IPO (equal to the 20,800,000 shares of MUDS Class A common stock issued in the IPO, reduced by the 13,890,713 shares of MUDS Class A common stock redeemed by public stockholders in connection with the Extension Meeting) and (ii) 5,200,000 shares of MUDS Class B common stock that were issued to the initial stockholders, which includes sponsor. There are currently no shares of MUDS preferred stock issued and outstanding. In addition, MUDS issued 20,800,000 public warrants to purchase shares of Class A common stock as part of the units sold in the IPO and 7,740,000 private placement warrants in a private placement concurrently with the IPO, of which 6,700,000 were sold to the sponsor and 1,040,000 were sold to Cantor. Each warrant entitles its holder to purchase one share of MUDS Class A common stock at an exercise price of  $11.50 per share, and can be exercised only for a whole number of MUDS Class A common shares. The warrants will become exercisable 30 days after the completion of the business combination and they expire five years after the completion of the business combination or earlier upon their redemption or liquidation. Once the warrants become exercisable, the public warrants may be redeemed, at a price of  $0.01 per warrant, if the last sale price of the Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading day period ending on the third business day before the notice of redemption is sent to the warrant holders. The private placement warrants, however, are non-redeemable so long as they are held by sponsor, Cantor or their permitted transferees. The shares of Class B common stock that were issued to the initial stockholders, which includes sponsor, will be converted into shares of HYMC Class A common stock in connection with the business combination. For more information regarding the warrants, please see the section entitled “Description of Securities.”

Seller is a U.S.-based gold producer that has historically focused on mining, developing, and exploring properties in the state of Nevada in a safe, environmentally responsible and cost-effective manner. Gold and silver sales have historically represented, and following the restart of mining operations are expected to, continue to represent 100% of Seller’s operating revenues. Accordingly, the market prices of gold and silver significantly impact Seller and its business’s financial position, operating results and cash flows.
For more information about Seller and the Hycroft business, please see the sections entitled “Information about Seller and the Hycroft Business,” “Seller’s Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Seller Management” and “Management after the Business Combination.”

Under the terms of the Purchase Agreement, MUDS and Acquisition Sub will acquire the Hycroft business from Seller. Subject to the terms of the Purchase Agreement, the value of the aggregate consideration in the business combination is expected to be approximately $537,000,000, which amount is inclusive of  (i) the value of the purchase shares, (ii) the value of the Excess Notes and the 1.5 Lien Notes, (iii) the debt assumption and (iv) the payoff amount. The consideration to be paid to Seller will be comprised of a (x) a number of shares of HYMC Class A common stock, equal to (1) (A) $325,000,000, plus (B) the value of the Surrendered Shares valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount, minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount, and (y) the Excess Notes and the 1.5 Lien Notes divided by (2) $10.00. Promptly following
 
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the issuance of the purchase shares to Seller in the business combination, Seller will distribute the purchase shares pro rata to its stockholders and Seller will cancel and retire the Excess Notes and 1.5 Lien Notes. For more information about the Purchase Agreement, please see the section entitled “The Purchase Agreement and Related Agreements.”

It is anticipated that, upon completion of the business combination (assumed to be April  30, 2020): (i) MUDS’ public stockholders will retain approximately 1.9% of HYMC; (ii) sponsor will own approximately 9.5% of HYMC, including shares and units issued in connection with the Forward Purchase Contract (after giving effect to the surrender of shares of Class B common stock in connection with the Parent Sponsor Letter Agreement); (iii) the Initial Subscribers will own approximately 83.9% of HYMC as a result of  (x) the private investment and (y) such investors’ ownership of 1.5 Lien Notes, Excess Notes and Second Lien Notes of Seller, (iv) the Seller stockholders (excluding any Initial Subscribers, including in their capacity as Second Lien Noteholders) will own approximately 1.2% of HYMC; (v) Cantor will own approximately 0.5% as a result of the underwriting commission issuance; (vi) Lender will own approximately 1% as a result of the lender issuance pursuant to the Sprott Credit Agreement; and (vii) approximately 2% of HYMC will be issued in an incremental equity investment. The ownership percentages of HYMC following the business combination (a) exclude (1) the shares of HYMC Class A common stock issuable upon the exercise of warrants that will remain outstanding following the business combination and (2) any shares of HYMC Class A common stock issuable upon the conversion of mirror replacement equity awards issued to holders of outstanding Seller equity awards in connection with the business combination, and (b) assume (1) all but approximately 964,320 shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders, (2) the issuance of 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers in the private placement, for aggregate gross proceeds of $65,000,000, (3) the issuance of 1,000,000 shares of HYMC Class A common stock in an incremental equity investment for aggregate gross proceeds of  $10,000,000, (4) that there is no Cash Available for Payment in connection with the consummation of the exchange and that the consideration in the exchange is comprised entirely of the Excess Notes Share Payment and the 1.5 Lien Share Payment, (5) the consummation of the transactions contemplated by the Parent Sponsor Letter Agreement, including the share surrender, on the basis of the assumptions set forth in clause (2) hereof with respect to the private investment, resulting in the surrender of approximately 3,584,615 shares of MUDS Class B common stock, (6) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (1) and (2) hereof, shall result in the issuance of approximately 235,744 shares of HYMC Class A common stock and (7) that approximately 50,020,315 shares of HYMC Class A common stock are outstanding immediately after consummation of the business combination. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” See the section titled “The Purchase Agreement and Related Agreements — Related Agreements” beginning on page [•] of this joint proxy statement/​prospectus for further details regarding the transactions related to the business combination.

MUDS’ management and the MUDS Board considered various factors in determining whether to approve the Purchase Agreement and the business combination. See the section entitled “The Business Combination — The MUDS Board’s Reasons for the Approval of the Business Combination” on page  [•] of this joint proxy statement/prospectus.

In addition to voting on the proposal to approve the business combination, at the MUDS special meeting, the stockholders of MUDS will be asked to vote on:

The Charter Proposals — To consider and vote upon seven separate proposals to approve, assuming the Business Combination Proposal and the NASDAQ Proposal are approved and adopted, certain material differences between MUDS’ existing charter and the proposed charter of HYMC, which we refer to collectively as the “Charter Proposals”;

Proposal No. 9 — The Director Election Proposal — To consider and vote upon a proposal, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are approved and adopted to elect seven directors to serve on the HYMC Board until the next annual meeting of stockholders, or until their respective successors are duly elected and qualified, which we refer to as the “Director Election Proposal”;
 
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Proposal No. 10 — The Incentive Plan Proposal — To consider and vote on a proposal to approve and adopt, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, the HYMC 2020 Performance and Incentive Pay Plan (the “Incentive Plan”) and the material terms thereunder, which we refer to as the “Incentive Plan Proposal”. A copy of the Incentive Plan is attached to the accompanying joint proxy statement/prospectus as Annex C; and

Proposal No. 11 — The NASDAQ Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal and the Charter Proposals are approved and adopted, for purposes of complying with applicable provisions of NASDAQ Listing Rule 5635, the issuance of more than 20% of MUDS’ issued and outstanding common stock in connection with the business combination, the private investment, an incremental equity investment, the forward purchase, the underwriting commission issuance and the lender issuance, and the related change in control, which we refer to as the “NASDAQ Proposal.”
Please see the sections entitled “Proposal No. 1 — The Business Combination Proposal,” “Proposals 2 Through 8 — The Charter Proposals,” “Proposal No. 9 — The Director Election Proposal,” “Proposal No. 10 — The Incentive Plan Proposal,” and “Proposal No. 11 — The NASDAQ Proposal.” The transactions contemplated by the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement will be consummated only if the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are approved at the MUDS special meeting. The Director Election Proposal

The Seller stockholders will be asked to approve the Purchase Agreement and business combination as well as the plan of dissolution at a special meeting of Seller’s stockholders to be held at the offices of Seller, 8181 E. Tufts Ave., Denver, CO 80237, on [•], 2020, at [•] a.m., Mountain Time (the “Seller special meeting”). For more information about the Seller special meeting, please see the sections entitled “Questions and Answers for Seller Stockholders” and see “Seller Special Meeting” of this proxy statement/prospectus.

Unless waived by the parties to the Purchase Agreement, and subject to applicable law, the consummation of the business combination is subject to a number of conditions set forth in the Purchase Agreement including, among others, termination of the waiting period under the HSR Act and receipt of certain stockholder approvals contemplated by this joint proxy statement/​prospectus. For more information about the closing conditions to the business combination, please see the section entitled “The Purchase Agreement and Related Agreements — Conditions to Closing of the Business Combination.”

The Purchase Agreement may be terminated at any time prior to the consummation of the business combination upon agreement of MUDS and Seller. For more information about the termination rights under the Purchase Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Termination.”

The proposed business combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors.”

In considering the recommendation of the MUDS Board to vote for the proposals presented at the MUDS special meeting, including the Business Combination Proposal, you should be aware that aside from their interests as stockholders, sponsor and certain members of the MUDS Board and officers have interests in the business combination that are different from, or in addition to, the interests of MUDS’ stockholders generally. These interests include the fact that investment funds affiliated with and managed by Mudrick Capital, of which Jason Mudrick, Chief Executive Officer and a director of MUDS, is the President and David Kirsch, Vice President and a director of MUDS, is Managing Director, currently hold shares of Seller common stock and First Lien Notes, 1.25 Lien Notes, 1.5 Lien Notes and Second Lien Notes of Seller, and that Mr. Kirsch is a member of the Seller Board. Mr. Kirsch did not participate as a director in meetings or votes of the Seller Board related to Seller’s consideration of the business combination and alternative transactions unless specifically requested to do so after acknowledgement and disclosure of his potential conflicts of interest. The MUDS Board was aware of and considered these interests, among other matters, in
 
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evaluating and negotiating the business combination and transaction agreements and in recommending to MUDS’ stockholders that they vote in favor of the proposals presented at the MUDS special meeting, including the Business Combination Proposal. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the MUDS special meeting, including the Business Combination Proposal. See the sections “The Business Combination — Interests of Certain Persons in the Business CombinationandSpecial Meeting of MUDS Stockholders — Recommendation to MUDS’ Stockholders” for more information.
 
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SUMMARY OF THE JOINT PROXY STATEMENT/PROSPECTUS
This summary highlights selected information contained in this joint proxy statement/prospectus and does not contain all of the information that is important to you. You should read carefully this entire joint proxy statement/prospectus, including the Annexes and the accompanying financial statements of MUDS and Seller to fully understand the proposed business combination before voting on the proposals to be considered at the MUDS special meeting. Please see the section entitledWhere You Can Find More Informationbeginning on page [•] of this joint proxy statement/prospectus. In addition, for definitions used commonly throughout this joint proxy statement/prospectus, please see the section entitled “Frequently Used Terms.”
Unless otherwise specified, all share calculations (a) exclude (1) the shares of HYMC Class A common stock issuable upon the exercise of warrants that will remain outstanding following the business combination and (2) any shares of HYMC Class A common stock issuable upon the conversion of mirror replacement equity awards issued to holders of outstanding Seller equity awards in connection with the business combination, and (b) assume (1) all but approximately 964,320 shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders, (2) the issuance of 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers in the private placement, for aggregate gross proceeds of  $65,000,000, (3) the issuance of 1,000,000 shares of HYMC Class A common stock in an incremental equity financing for aggregate gross proceeds of $10,000,000, (4) that there is no Cash Available for Payment in connection with the consummation of the exchange and that the consideration in the exchange is comprised entirely of the Excess Notes Share Payment and the 1.5 Lien Share Payment, (5) the consummation of the transactions contemplated by the Parent Sponsor Letter Agreement, including the share surrender, on the basis of the assumptions set forth in clause (2) hereof with respect to the private investment, resulting in the surrender of approximately 3,584,615 shares of MUDS Class B common stock, (6) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (1) and (2) hereof, shall result in the issuance of approximately 235,744 shares of HYMC Class A common stock and (7) that approximately 50,020,315 shares of HYMC Class A common stock are outstanding immediately after consummation of the business combination.
Parties to the Business Combination
MUDS
MUDS is a blank check company incorporated under the laws of the State of Delaware on August 28, 2017 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses with the intention of focusing its search for a target business on companies that have recently emerged from bankruptcy court protection.
MUDS’ publicly-traded units, Class A common stock and warrants are currently listed on the NASDAQ Capital Market (“NASDAQ”) under the symbols “MUDSU”, “MUDS” and “MUDSW”, respectively. MUDS intends to apply to continue the listing of its publicly-traded Class A common stock and warrants, to be effective upon the consummation of the business combination, on NASDAQ under the proposed symbols “HYMC” and “HYMCW”, respectively. As a result, MUDS’ publicly traded units will separate into the component securities upon consummation of the business combination and, as a result, will no longer trade as a separate entity.
The mailing address of MUDS’ principal executive office is 527 Madison Avenue, 6th Floor, New York, New York 10022. The telephone number of MUDS is (646) 747-9500.
Acquisition Sub
Acquisition Sub, a Delaware corporation, is an indirect, wholly-owned subsidiary of MUDS, formed by MUDS on January 3, 2020, to consummate the business combination. In the business combination, MUDS and Acquisition Sub will acquire the Hycroft business from Hycroft.
The mailing address of Acquisition Sub’s principal executive office is MUDS principal executive office at 527 Madison Avenue, 6th Floor, New York, New York 10022. The telephone number of MUDS is (646) 747-9500.
 
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Hycroft
Hycroft is a U.S.-based gold producer that has historically focused on mining, developing, and exploring properties in the state of Nevada in a safe, environmentally responsible and cost-effective manner. Gold and silver sales have historically represented 100% of Hycroft’s operating revenues and are expected to represent 100% of Hycroft’s operating revenues after restart of mining operations. Accordingly, the market prices of gold and silver significantly impact Hycroft’s financial position, operating results and cash flows.
As part of its restart of mining operations, Seller obtained a new feasibility study for its heap leaching process for transition and sulfide ores issued as the Hycroft Technical Report effective July 31, 2019.
Hycroft was incorporated as Allied Nevada Gold Corp. under the laws of the State of Delaware on September 14, 2006 and commenced operations on May 10, 2007. Hycroft changed its name from Allied Nevada Gold Corp. to Hycroft Mining Corporation on October 9, 2015 in connection with its restructuring and emergence from federal bankruptcy proceedings.
The mailing address of Hycroft’s principal executive office is 8181 E. Tufts Ave., Suite 510, Denver, CO 80237. The telephone number of Hycroft is (303) 253-3267. For more information about Hycroft, please see the sections entitled “Information About Seller and the Hycroft Business,” “Seller’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management After the Business Combination.”
The Business Combination Proposal
On January 13, 2020, MUDS entered into the Purchase Agreement, which provides for, among other things, the acquisition by MUDS and Acquisition Sub of the Hycroft business from Seller. For more information about the transactions contemplated in the Purchase Agreement, please see the sections entitled “The Business Combination” and “The Purchase Agreement and Related Agreements.” A copy of the Purchase Agreement is attached to this joint proxy statement/prospectus as Annex A.
The Seller Dissolution Proposal and Plan of Dissolution
If the business combination is completed and the plan of dissolution is approved by Seller stockholders, upon consummation of the business combination Seller intends to file a certificate of dissolution with the Secretary of State of the State of Delaware and distribute the purchase shares pro rata to its stockholders pursuant to the plan of dissolution. The filing of the certificate of dissolution will commence a formal process under which Seller will give notice of its intention to dissolve, distribute its assets, primarily consisting of shares of HYMC Class A common stock received in connection with the business combination, allow its creditors to come forward to make claims for amounts owed to them, reserve amounts for payment to its creditors (including amounts required to cover unknown or contingent liabilities), and wind-up its affairs. Any retained cash after the distribution will be used to satisfy creditors and pay the cost of winding up. The Seller Board will have the ability to establish one or more liquidating trusts for the benefit of Seller stockholders, subject to the claims of Seller’s creditors or directly for the benefit of certain creditors, and may transfer Seller assets to such trust or trusts.
Consideration to Seller Stockholders in the Business Combination and Dissolution
Holders of Seller common stock
As a result of the business combination and the subsequent dissolution of Seller and distribution of Seller’s shares of HYMC Class A common stock received in connection with the business combination, each holder of issued and outstanding shares of Seller common stock, including shares of Seller common stock received by the Second Lien Noteholders upon the conversion of the Second Lien Notes, will receive a pro rata share of the shares of HYMC Class A common stock, issued to Seller in connection with the business combination, which shall equal (1) (A) $325,000,000, plus (B) the value of the Surrendered Shares valued at $10.00 per share, minus (C) the sum of the 1.5 Lien Share Payment Amount and the 1.5 Lien Cash Payment Amount, minus (D) the sum of the Excess Notes Share Payment Amount and the Excess Notes Cash Payment Amount, in the aggregate, divided by (2) $10.00.
 
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Holders of Seller Equity Awards
As a condition to the business combination and as provided in MUDS’ Incentive Plan Proposal, HYMC will adopt and approve the Incentive Plan and will issue to each holder of Seller equity awards in connection with the business combination replacement equity incentive awards in the form of an equivalent value of restricted stock units convertible into shares of HYMC Class A common stock and upon substantially identical terms and vesting conditions.
Holders of Seller Warrants
Subject to the terms and conditions of the Purchase Agreement, each warrant of Seller outstanding and unexercised immediately prior to the effective time will remain an outstanding obligation of Seller following the consummation of the business combination. Seller warrant holders are not entitled to receive shares of HYMC Class A common stock in connection with the business combination unless such holder exercises such warrants pursuant to their terms prior to the consummation of the business combination, in which case such holder would be entitled to his, her or its pro-rata share of HYMC Class A common stock to be distributed to Seller stockholders pursuant to the plan of dissolution.
Holders of Seller warrants that wish to vote at the Seller special meeting on the Seller Business Combination Proposal and Seller Dissolution Proposal or that wish to participate in the distribution of purchase shares pursuant to the plan of dissolution must exercise their Seller warrants at a price (as of December 31, 2019) of  $5.20 per share, which is in excess of the value attributed to shares of Seller common stock, prior to the record date for the Seller special meeting or the filing by Seller of the certificate of dissolution with the Secretary of State of the State of Delaware, respectively. Seller currently anticipates filing such certificate of dissolution promptly following the consummation of the business combination.
For more information about the consideration to the Seller stockholders, please see the section entitled “The Business Combination — Consideration to Seller Stockholders in the Business Combination”.
Related Agreements
Seller Support Agreement
Concurrently with the signing of the Purchase Agreement, Seller stockholders holding at least a majority of the outstanding shares of Seller common stock executed and delivered to MUDS a Seller Support Agreement, which is attached hereto as Annex G. Pursuant to the terms of the Seller Support Agreement, such stockholders agreed, among other things, to support the business combination and the other transactions contemplated by the Purchase Agreement, subject to certain customary conditions. For more information regarding the Seller Support Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Seller Support Agreement.
Parent Sponsor Letter Agreement
Concurrently with the signing of the Purchase Agreement, MUDS and sponsor entered into the Parent Sponsor Letter Agreement, which is attached hereto as Annex H. Pursuant to the terms of the Parent Sponsor Letter Agreement, immediately prior to the consummation of the business combination and for no consideration, sponsor agreed to surrender to MUDS the Surrendered Shares and to waive certain anti-dilution rights set forth in MUDS’ organizational documents that may result from the transactions contemplated by the Purchase Agreement. For more information regarding the Parent Sponsor Letter Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Parent Sponsor Letter Agreement.
Trust Termination Letter
In connection with the closing of the business combination, MUDS will deliver to Continental a Trust Termination Letter, substantially in the form attached hereto as Annex I. The Trust Termination Letter provides notice and instructions to the trustee with respect to the transfer of funds from MUDS’ trust account following the consummation of the business combination. For more information regarding the Trust
 
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Termination Letter, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Trust Termination Letter.
Exchange Agreement
Concurrently with the signing of the Purchase Agreement, Acquisition Sub, the 1.5 Lien Noteholders and the 1.25 Lien Noteholders entered into the Exchange Agreement, which is attached hereto as Annex B. Pursuant to the terms of the Exchange Agreement, as part of the business combination, (i) the Excess Noteholders will transfer the Excess Notes to Acquisition Sub in exchange for the Excess Notes Cash Payment Amount and the Excess Notes Share Payment, in each case if and to the extent applicable, and (ii) the 1.5 Lien Noteholders will transfer the 1.5 Lien Notes to Acquisition Sub in exchange for the 1.5 Lien Cash Payment Amount and the 1.5 Lien Share Payment, in each case if and to the extent applicable. For more information regarding the Exchange Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Exchange Agreement.
1.25 Lien Exchange Agreement
Concurrently with the signing of the Purchase Agreement, Seller and the 1.25 Lien Noteholders entered into the 1.25 Lien Exchange Agreement, which is attached hereto as Annex J. Pursuant to the terms of the 1.25 Lien Exchange Agreement, prior to the consummation of the business combination, the 1.25 Lien Noteholders will transfer the 1.25 Lien Notes to Seller in exchange for the New Subordinated Notes. In connection with the business combination, and as part of the debt assumption thereunder, HYMC will assume the Assumed New Subordinated Notes. For more information regarding the 1.25 Lien Exchange Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — 1.25 Lien Exchange Agreement.
Second Lien Conversion Agreement
Concurrently with the signing of the Purchase Agreement, Seller and the Second Lien Noteholders entered into the Second Lien Conversion Agreement. Pursuant to the terms of the Second Lien Conversion Agreement, the Second Lien Noteholders agreed to convert their Second Lien Notes to Seller common stock in accordance with the terms of such notes as part of the business combination and to waive certain provisions and terms of the Second Lien Notes. For more information regarding the Second Lien Conversion Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Second Lien Conversion Agreement.
Subscription/Backstop Agreements
Concurrently with the signing of the Purchase Agreement, MUDS entered into the Subscription/​Backstop Agreements with the Initial Subscribers, a form of which is attached hereto as Annex K, for the purchase and sale of 6,500,000 shares of HYMC Class A common stock at a purchase price of  $10.00 per share, and the issuance to such investors of 3,250,000 warrants PIPE warrants, for an aggregate purchase price of up to $65,000,000, which number of shares of HYMC Class A common stock issued and aggregate purchase price shall be subject to reduction if  (i) prior to the consummation of the business combination, MUDS enters into subscription agreements or other instruments pursuant to which MUDS agrees to issue and sell to certain Third-Party Private Investors all or any portion of the shares to be issued in connection with the transactions contemplated by such Subscription/Backstop Agreements or (ii) in connection with the consummation of the business combination, the cash remaining in MUDS’ trust account following the satisfaction of stockholder redemptions exceeds $10,000,000. For more information regarding the Subscription/Backstop Agreements, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Subscription/Backstop Agreements.
Amended and Restated Registration Rights Agreement
At the consummation of the business combination, MUDS and the restricted stockholders will enter into an Amended and Restated Registration Rights Agreement with HYMC substantially in the form attached hereto as Annex D, in respect of shares of Class A common stock and, to the extent applicable, warrants, held by them, providing for, among other things, customary registration rights, including demand,
 
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piggy-back and shelf registration rights, subject to cut-back provisions. The restricted stockholders will agree not to sell, transfer, pledge or otherwise dispose of shares of HYMC Class A common stock they hold or receive, subject to certain exceptions, for certain time periods specified therein. For more information regarding the Amended and Restated Registration Rights Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Amended and Restated Registration Rights Agreement.
Forward Purchase Contract
On January 24, 2018, MUDS entered into the Forward Purchase Contract with sponsor, pursuant to which sponsor committed to purchase, in a private placement for gross proceeds of  $25,000,000 to occur concurrently with the consummation of the business combination, 2,500,000 units having substantially the same terms as the sale of units in the IPO, and 625,000 shares of Class A common stock. For more information regarding the Forward Purchase Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Forward Purchase Agreement.
Reimbursement and Exclusivity Agreement
On January 24, 2019, MUDS entered into an expense reimbursement agreement with Seller, which was amended and extended on May 28, 2019, October 4, 2019 and December 2, 2019 (as amended, the “Reimbursement and Exclusivity Agreement”), pursuant to which (i) Seller agreed to (x) reimburse the reasonable documented out-of-pocket legal and other fees and expenses incurred by MUDS in evaluating, negotiating and performing due diligence relating to the Purchase Agreement and the Related Agreements and preparing the Registration Statement of which this joint proxy statement/prospectus forms a part and (y) provide MUDS with an exclusive negotiation period through January 2, 2020, subject to customary fiduciary outs to the Seller board of directors, and (ii) MUDS agreed to permit Seller to provide non-public confidential information to specified potential strategic investors in connection with the private investment, subject to the payment of a fee equal to 2% of the enterprise value if Seller and any such potential strategic investor entered into an alternative transaction agreement during the exclusivity period.
Amended Underwriting Agreement
On February  12, 2020, MUDS entered into the UA Amendment, which is attached hereto as Annex L, pursuant to which the deferred underwriting fees, which were originally payable by MUDS to the Underwriters in cash upon completion of the business combination, are payable upon completion of the business combination through a combination of  (i) shares of HYMC Class A common stock, valued at $10 per share, (ii) cash and (iii) additional HYMC Class A common stock or cash dependent upon the amount of Class A common stock owned by Cantor as of February  12, 2020 and by independent third parties as of the consummation of the business combination, after taking into account any redemptions. The UA Amendment did not amend, modify or supplement any other terms of the Underwriting Agreement.
Sprott Agreements
On October 4, 2019, Seller, as borrower, certain subsidiaries of Seller, as guarantors, Sprott Private Resource Lending II (Collector), LP, as lender (“Lender”), and Sprott Resource Lending Corp., as arranger, executed the Sprott CreditAgreement, pursuant to which Seller will incur indebtedness with an original principal amount not in excess of  $110,000,000 in connection with the consummation of the business combination. Pursuant to the terms of the Purchase Agreement, MUDS will assume the Sprott Credit Agreement as part of the debt assumption in connection with the consummation of the business combination and will issue to Lender a number shares of HYMC Class A Common Stock equal to 1% of HYMC’s post-closing shares outstanding. Concurrently with the consummation of the business combination, HYMC and a subsidiary of Seller will enter into the Sprott Royalty Agreement with Sprott Private Resource Lending II (CO) Inc., pursuant to which, among other things, such subsidiary will receive $30,000,000 and will incur a 1.5% net smelter royalty payment obligation relating to the Hycroft mine, the principal asset of Seller’s subsidiaries being acquired in the business combination. For more information regarding the Sprott Agreements, please see the sections entitled “The Purchase Agreement and Related Agreements — Related Agreements — Sprott Agreements” and “Description of Certain Indebtedness.”
 
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Organizational Structure
The following diagram depicts the current ownership structure of Seller and its subsidiaries (percentages shown as basic ownership):
[MISSING IMAGE: tm207279d1-fc_orgstr4c.jpg]
The following diagram illustrates the ownership structure of HYMC immediately following the business combination (percentages shown reflect the assumptions described in the paragraph below):
[MISSING IMAGE: tm207279d1-fc_seller4c.jpg]
(1)
Excludes Initial Subscribers (including in their capacity as Second Lien Noteholders).
(2)
Includes shares issued pursuant to the private investment and as a result of such investors’ ownership of 1.5 Lien Notes, Excess Notes and Second Lien Notes.
 
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The ownership percentages of HYMC following the business combination (a) exclude (1) the shares of HYMC Class A common stock issuable upon the exercise of warrants that will remain outstanding following the business combination and (2) any shares of HYMC Class A common stock issuable upon the conversion of mirror replacement equity awards issued to holders of outstanding Seller equity awards in connection with the business combination, and (b) assume (1) all but approximately 964,320 shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders, (2) the issuance of 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers in the private placement, for aggregate gross proceeds of  $65,000,000, (3) the issuance of 1,000,000 shares of HYMC Class A common stock in an incremental equity investment for aggregate gross proceeds of  $10,000,000, (4) that there is no Cash Available for Payment in connection with the consummation of the exchange and that the consideration in the exchange is comprised entirely of the Excess Notes Share Payment and the 1.5 Lien Share Payment, (5) the consummation of the transactions contemplated by the Parent Sponsor Letter Agreement, including the share surrender, on the basis of the assumptions set forth in clause (2) hereof with respect to the private investment, resulting in the surrender of approximately 3,584,615 shares of MUDS Class B common stock, (6) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (1) and (2) hereof, shall result in the issuance of approximately 235,744 shares of HYMC Class A common stock and (7) that approximately 50,020,315 shares of HYMC Class A common stock are outstanding immediately after consummation of the business combination. It is anticipated that, upon completion of the business combination (assumed to be April  30, 2020): (i) MUDS’ public stockholders will retain approximately 1.9% of HYMC; (ii) sponsor will own approximately 9.5% of HYMC, including shares and units issued in connection with the Forward Purchase Contract (after giving effect to the surrender of shares of Class B common stock in connection with the Parent Sponsor Letter Agreement); (iii) the Initial Subscribers will own approximately 83.9% of HYMC as a result of  (x) the private investment and (y) such investors’ ownership of 1.5 Lien Notes, Excess Notes and Second Lien Notes of Seller, (iv) the Seller stockholders (excluding any Initial Subscribers, including in their capacity as Second Lien Noteholders) will own approximately 1.2% of HYMC; (v) Cantor will own approximately 0.5% as a result of the underwriting commission issuance; (vi) Lender will own approximately 1% as a result of the lender issuance pursuant to the Sprott Credit Agreement; and (vii)  approximately 2% of HYMC will be issued in an incremental equity investment.
Redemption Rights
Pursuant to MUDS’ existing charter, a holder of MUDS public shares may request that MUDS redeem all or a portion of such stockholder’s public shares for cash if the business combination is consummated. Holders of public units must elect to separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares. If holders hold their public units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the public units into the underlying public shares and public warrants, or if a holder holds units registered in its own name, the holder must contact the transfer agent directly and instruct it to do so.
If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, MUDS will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest not previously released to MUDS to pay its franchise and income taxes, divided by the number of then issued and outstanding public shares; provided that MUDS will not redeem any Class A common stock issued in the IPO to the extent that such redemption would result in MUDS having net tangible assets (as determined in accordance with Rule 3a51‑ 1(g) (1) of the Exchange Act) of less than $5,000,001. For illustrative purposes, as of  [•], 2020, this would have amounted to approximately $[•] per public share. Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as provided in Section 13(d) of the Exchange Act) will be restricted from seeking redemption rights with respect to more than 15% of the shares of Class A common stock included in the units sold in the IPO unless such stockholder first obtains MUDS’ prior consent.
If a public stockholder exercises its redemption rights, then such stockholder will be exchanging its redeemed public shares for cash and will no longer own such shares. Such a holder will be entitled to receive
 
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cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to MUDS’ transfer agent in accordance with the procedures described herein. If the business combination is not consummated, the public shares will not be redeemed for cash. Please see the section entitled “Special Meeting of MUDS Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.
Board of Directors of MUDS Following the Business Combination
Upon consummation of the business combination, the MUDS Board anticipates increasing its initial size from five directors to seven directors. Please see the sections entitled “Proposals 2 Through 8 — Charter Proposals — Proposal No. 3,”Proposal No. 9 — The Director Election Proposal” and “Management After the Business Combination” for additional information.
The Charter Proposals
To consider and vote upon seven separate proposals to approve, assuming the Business Combination Proposal and the NASDAQ Proposal are approved and adopted, the following charter proposals:
1.
Proposal No. 2 — To consider and vote upon an amendment to MUDS’ existing charter to increase the total number of authorized shares of all classes of capital stock from 111,000,000 shares to [•], which would consist of  (a) [•] shares of Class A common stock and (b) [•] shares of preferred stock;
2.
Proposal No. 3 — To consider and vote upon an amendment to MUDS’ existing charter to declassify the HYMC board of directors, so that each member of the HYMC board of directors will be elected at each annual meeting of stockholders, as opposed to MUDS having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term, and make certain related changes;
3.
Proposal No. 4 — To consider and vote upon an amendment to MUDS’ existing charter to provide that certain transactions are not “corporate opportunities” and that the Exempted Persons are not subject to the doctrine of corporate opportunity;
4.
Proposal No. 5 — To consider and vote upon an amendment to MUDS’ existing charter to permit stockholder action by written consent;
5.
Proposal No. 6 — To consider and vote upon an amendment to MUDS’ existing charter to provide that HYMC will not be governed by Section 203 of the DGCL and approve a provision in the proposed charter that is substantially similar to Section 203 of the DGCL, but excludes Sponsor Holders from the definition of  “interested stockholder,” and to make certain related changes. Upon consummation of the business combination, the Sponsor Holders will become “interested stockholders” within the meaning of Section 203 of the DGCL, but will not be subject to the restrictions on business combinations set forth in Section 203, as the MUDS Board approved the business combination in which the Sponsor Holders became interested stockholders prior to such time as they became interested stockholders;
6.
Proposal No. 7 — To consider and vote upon an amendment to MUDS’ existing charter to clarify that the exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation shall not apply to any action to enforce any liability or duty under the Securities Act or the Exchange Act for which federal courts have exclusive jurisdiction; and
7.
Proposal No. 8 — To consider and vote upon an amendment to MUDS’ existing charter to authorize all other proposed changes, including, among others, those (i) resulting from the business combination, including changing the post-business combination corporate name from “Mudrick Capital Acquisition Corporation” to “Hycroft Mining Holding Corporation” and removing certain provisions relating to MUDS’ prior status as a blank check company and MUDS Class B common stock that will no longer apply upon consummation of the business combination, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect.
 
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We refer to Proposals No. 2 – 8 collectively as the “Charter Proposals”. Please see the sections entitled “Proposals 2 Through 8 — The Charter Proposals” for more information.
Other Proposals
In addition, the stockholders of MUDS will be asked to vote on:

a proposal to elect, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, seven directors to the HYMC Board until the next annual meeting of stockholders, or until their respective successors are duly elected and qualified, which we refer to as the Proposal No. 9 — the Director Election Proposal”;

a proposal to approve and adopt, assuming the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, the HYMC 2020 Performance and Incentive Pay Plan (the “Incentive Plan”) and the material terms thereunder, which we refer to as Proposal No. 10 — the Incentive Plan Proposal; and

a proposal to approve, assuming the Business Combination Proposal and the Charter Proposals are approved and adopted, for purposes of complying with applicable provisions of NASDAQ Listing Rule 5635, the issuance of more than 20% of MUDS’ issued and outstanding common stock to in connection with the business combination, the private investment, an incremental equity investment forward purchase, the underwriting commission issuance and the lender issuance, and the related change in control, which we refer to as Proposal No. 11 — the NASDAQ Proposal.
Please see the sections entitled “Proposals 2 Through 8 — The Charter Proposals,” “Proposal No. 9 — The Director Election Proposal,” “Proposal No. 10 — The Incentive Plan Proposal” and “Proposal No. 11 — The NASDAQ Proposal.”
Date, Time and Place of the MUDS Special Meeting
The MUDS special meeting will be held on [•], 2020 at 9:00 a.m. Eastern Time at the offices of Weil, Gotshal & Manges, LLP located at 767 Fifth Avenue, New York, New York, 10153, or at such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.
Voting Power; Record Date for the MUDS Special Meeting
Only MUDS’ stockholders of record at the close of business on [•], 2020, the record date for the MUDS special meeting, will be entitled to vote at the MUDS special meeting. You are entitled to one vote for each share of MUDS common stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were [•] shares of common stock outstanding and entitled to vote, of which [•] are shares of Class A common stock and 5,200,000 are shares of Class B common stock held by the initial stockholders.
Accounting Treatment
The business combination will be accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, for financial reporting purposes, MUDS has been treated as the “acquired” company and Seller has been treated as the “acquirer”. This determination was primarily based on current stockholders of Seller having a relative majority of the voting power of the combined entity, the operations of Seller prior to the acquisition comprising the only ongoing operations of the combined entity and senior management of Seller comprising the majority of the senior management of the combined entity.
Accordingly, for accounting purposes, the financial statements of the combined entity will represent a continuation of the financial statements of Seller. The net assets of Seller will be stated at historical cost, with no goodwill or other intangible assets recorded.
 
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Appraisal Rights of MUDS Stockholders
Appraisal rights are not available to MUDS stockholders in connection with the business combination.
Proxy Solicitation
Proxies may be solicited by mail. MUDS has engaged Advantage Proxy, Inc. to assist in the solicitation of proxies.
If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the MUDS special meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting of MUDS Stockholders — Revoking Your Proxy.”
Interests of Certain Persons in the Business Combination
In considering the recommendation of the MUDS Board to vote in favor of the business combination, stockholders should be aware that aside from their interests as stockholders, sponsor and certain members of the MUDS Board and officers have interests in the business combination that are different from, or in addition to, those of other stockholders generally. These interests include the fact that investment funds affiliated with and managed by Mudrick Capital, of which Jason Mudrick, Chief Executive Officer and a director of MUDS, is the President and David Kirsch, Vice President and a director of MUDS, is Managing Director, currently hold shares of Seller common stock and First Lien Notes, 1.25 Lien Notes, 1.5 Lien Notes and Second Lien Notes of Seller, and that Mr. Kirsch is a member of the Seller Board. Mr. Kirsch did not participate as a director in meetings or votes of the Seller Board related to Seller’s consideration of the business combination and alternative transactions. The MUDS Board was aware of and considered these interests, among other matters, in evaluating and negotiating the business combination, and in recommending to stockholders that they approve the business combination. Stockholders should take these interests into account in deciding whether to approve the business combination.
See the sections titled “The Business Combination — Interests of Certain Persons in the Business Combination” and “Special Meeting of MUDS Stockholders — Recommendation to MUDS’ Stockholders” for more information.
Reasons for the Approval of the Business Combination
After careful consideration, the MUDS Board recommends that the stockholders vote “FOR” each proposal being submitted to a vote at the MUDS special meeting. For more information about MUDS’ decision-making process, please see the section entitled “The Business Combination — The MUDS Board’s Reasons for the Approval of the Business Combination.”
Conditions to Closing of the Business Combination
Conditions to Each Party’s Obligations
The respective obligations of each of the parties to the Purchase Agreement to effect the business combination are subject to the satisfaction of each of the following conditions:

The approval of the Business Combination Proposal, the Director Election Proposal, the Charter Proposals, the Incentive Proposal and the NASDAQ Proposal shall have been obtained;

The Seller stockholder approval of the Seller Business Combination Proposal shall have been obtained;

MUDS shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act);

The applicable waiting period under the HSR Act shall have expired or been terminated or such approval shall have otherwise been obtained and no order prohibiting the business combination shall be in effect;
 
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The shares of HYMC Class A common stock shall be listed on NASDAQ upon closing, subject to any compliance extension or ability to remedy non-compliance, in each case as permitted by the NASDAQ continued listing rules;

The Registration Statement of which this proxy statement/prospectus forms a part shall have been declared effective and remain effective;

The private investment shall have been consummated;

The exchange shall have been consummated;

The transactions contemplated by the 1.25 Lien Exchange Agreement have been consummated;

The conversion shall have been consummated;

The surrender shall have been consummated;

MUDS and the Seller subsidiaries shall have at least $210,000,000 in available cash, after taking into account the anticipated payments required to satisfy the redemptions, the net proceeds from the consummation of private investment and the forward purchase contract and the net proceeds immediately available to Seller and/or MUDS pursuant to the Sprott Credit Agreement and the Sprott Royalty Agreement; and

MUDS and the Seller subsidiaries shall have at least $50,000,000 in unrestricted and available cash, after making all of the payments to satisfy the redemptions, the payoff amounts and the cash payments, if any, to the holders of the Excess Notes, if any, and to the holders of the 1.5 Lien Notes.
Conditions to MUDS’ Obligations
The obligations of MUDS and Acquisition Sub to effect the business combination are subject to the satisfaction at or prior to the closing date of certain conditions (any of which may be waived in writing exclusively by MUDS), including, among others, (i) Seller must have performed and complied in all material respects with all obligations required to be performed or complied with by Seller under the Purchase Agreement at or prior to the closing date, (ii) the payoff letters with respect to certain indebtedness of Seller must have been delivered to Acquisition Sub and shall remain in full force and effect, (iii) each of Allied VGH Inc., Allied Nevada Delaware Holdings Inc., Hycroft Resources & Development, Inc., and Victory Exploration Inc. shall have converted to a Delaware limited liability company and (iv) no Seller Material Adverse Effect shall have occurred.
Conditions to Seller’s Obligations
The obligations of Seller to effect the business combination are subject to the satisfaction at or prior to the closing date of certain conditions (any of which may be waived in writing exclusively by Seller), including, among others, (i) MUDS and Acquisition Sub must have performed and complied in all material respects with all obligations required to be performed or complied with by them under the Purchase Agreement at or prior to the closing date, (ii) sponsor shall have consummated the forward purchase, (iii) MUDS shall have made all appropriate arrangements to have the trust account disbursed in accordance with the Purchase Agreement upon the consummation of the business combination and (iv) no MUDS Material Adverse Effect shall have occurred.
For more information regarding the Conditions to Closing of the Business Combination, please see the section entitled “The Purchase Agreement and Related Agreements — Conditions to Closing of the Business Combination.
Regulatory Matters
Under the HSR Act and the rules that have been promulgated thereunder by the U.S. Federal Trade Commission (“FTC”), certain transactions may not be consummated unless information has been furnished to the Antitrust Division of the Department of Justice (“Antitrust Division”) and the FTC and certain waiting period requirements have been satisfied. The business combination is subject to these requirements and may not be completed until the expiration of a 30-day waiting period following the filing of the required
 
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Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted. On January 28, 2020, MUDS and Seller filed the required forms under the HSR Act with the Antitrust Division and the FTC and requested early termination.
At any time before or after consummation of the business combination, notwithstanding termination of the waiting period under the HSR Act, the applicable competition authorities could take such action under applicable antitrust laws as each deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the business combination. Private parties may also seek to take legal action under the antitrust laws under certain circumstances. MUDS cannot assure you that the Antitrust Division, the FTC, any state attorney general, or any other government authority will not attempt to challenge the business combination on antitrust grounds, and, if such a challenge is made, MUDS cannot assure you as to its result. Neither MUDS nor Seller is aware of any material regulatory approvals or actions that are required for completion of the business combination other than the expiration or early termination of the waiting period under the HSR Act. It is presently contemplated that if any such additional regulatory approvals or actions are required, those approvals or actions will be sought. There can be no assurance, however, that any additional approvals or actions will be obtained.
Quorum and Required Vote for Proposals for the MUDS Special Meeting
A quorum of MUDS’ stockholders is necessary to hold a valid meeting. A quorum will be present at the MUDS special meeting if holders of a majority in voting power of MUDS common stock issued and outstanding and entitled to vote at the MUDS special meeting is present in person or represented by proxy. Abstentions will count as present for the purposes of establishing a quorum at the MUDS special meeting. Broker non-votes will not be counted for purposes of determining the existence of a quorum.
The approval of each of the Business Combination Proposal, the Incentive Plan Proposal and the NASDAQ Proposal requires the affirmative vote of a majority of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. If a valid quorum is established, a stockholder’s failure to vote by proxy or in person at the MUDS special meeting will have no effect on the outcome of any vote on any of the foregoing proposals. Abstentions will be counted in connection with determination of whether a valid quorum is established, but will have no effect on the vote with respect to such proposals. Broker non-votes will also have no effect on the vote with respect to such proposals. The initial stockholders have agreed to vote their founder shares and any public shares they may hold in favor of the business combination. Currently, the initial stockholders own approximately 43% of MUDS’ issued and outstanding common stock, including all of the outstanding founder shares.
The approval of the Charter Proposals requires the affirmative vote of the holders of a majority of MUDS’ outstanding shares of common stock entitled to vote thereon at the MUDS special meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or in person at the MUDS special meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposals, each will have the same effect as a vote “AGAINST” such Charter Proposals.
Directors are elected by a plurality of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. This means that the seven director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions, broker non-votes and failure to vote by proxy or in person will have no effect on the election of directors.
The transactions contemplated by the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement will be consummated only if the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are approved at the MUDS special meeting. Each of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are cross-conditioned on the approval of each other. The Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal. It is important for you to note that in the event that the Business Combination Proposal, the Charter Proposals or the NASDAQ Proposal do not receive the requisite vote for approval, we will not consummate the business combination.
 
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Recommendation to MUDS’ Stockholders
The MUDS Board believes that each of the Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Incentive Plan Proposal and the NASDAQ Proposal to be presented at the MUDS special meeting is in the best interests of MUDS and MUDS’ stockholders and recommends that its stockholders vote “FOR” each of the proposals.
When you consider the recommendation of the MUDS Board in favor of approval of the Business Combination Proposal, you should keep in mind that the sponsor and certain members of the MUDS Board and officers have interests in the business combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. Stockholders should take these interests into account in deciding whether to approve the business combination. These interests include the fact that investment funds affiliated with and managed by Mudrick Capital, of which Jason Mudrick, Chief Executive Officer and a director of MUDS, is the President and David Kirsch, Vice President and a director of MUDS, is Managing Director, currently hold shares of Seller common stock and First Lien Notes, 1.25 Lien Notes, 1.5 Lien Notes and Second Lien Notes of Seller, and that Mr. Kirsch is a member of the Seller Board. Mr. Kirsch did not participate as a director in meetings or votes of the Seller Board related to Seller’s consideration of the business combination and alternative transactions. For a discussion of these interests, please see the section titled “Special Meeting of MUDS Stockholders — Recommendation to MUDS’ Stockholders” beginning on page [•] of this joint proxy statement/prospectus.
Risk Factors
In evaluating the business combination and the proposals to be considered and voted on at the general meeting, you should carefully review and consider the risk factors set forth under the section entitled “Risk Factors” beginning on page [•] of this joint proxy statement/prospectus.
The occurrence of one or more of the events or circumstances described in the section entitled “Risk Factors,” alone or in combination with other events or circumstances, may have a material adverse effect on (i) the ability of MUDS and Seller to complete the business combination, and (ii) the business, cash flows, financial condition and results of operations of MUDS and Seller following consummation of the business combination.
Opinion of MUDS’ Financial Advisor
On January 13, 2020, Duff  & Phelps rendered its oral opinion to the MUDS Board (which was subsequently confirmed in writing by delivery of its written opinion dated the same date) to the effect that, subject to the assumptions, qualifications, limitations and other matters considered by Duff  & Phelps in connection with the preparation of its opinion, as of such date, the Consideration to be issued and paid by MUDS and Acquisition Sub in the Proposed Transaction pursuant to the Purchase Agreement was fair, from a financial point of view, to MUDS. In the portions of this joint proxy statement/prospectus addressing Duff  & Phelps’ opinion:

The term “Proposed Transaction” refers to the acquisition by Acquisition Sub of the Hycroft business.

The term “Consideration” refers to (i) the repayment by or at the direction of Acquisition Sub, on behalf of the Seller, of the First Lien Notes and the Jacobs Note, (ii) the assumption by MUDS of not more than $80,000,000 in aggregate principal amount of New Subordinated Notes, (iii) the acquisition by Acquisition Sub of any Excess Notes and the 1.5 Lien Notes in exchange for the Excess Notes Share Payment and the Excess Notes Cash Payment Amount, if any (together, the “Excess Notes Consideration”), and the 1.5 Lien Share Payment and the 1.5 Lien Cash Payment Amount, if any (together, the “1.5 Lien Consideration”), respectively (and the subsequent transfer of such Excess Notes and 1.5 Lien Notes to the Seller for cancellation), and (iv) the issuance by MUDS to the Seller of the purchase shares.

The term “Ancillary Transactions” refers to (i) the conversion of certain subsidiaries of Seller to limited liability companies, (ii) the issuance by MUDS of shares of MUDS Class A common stock at a price of  $10.00 per share of MUDS Class A common stock in the private investment, (iii) the
 
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exchange of the 1.25 Lien Notes for New Subordinated Notes, (iv) the conversion of the Second Lien Notes into Seller common stock (the "conversion"), (v) the consummation of the transactions contemplated by the Forward Purchase Contract, (vi) the surrender by Sponsor of the Surrendered Shares, (vii) the assumption by MUDS of the Sprott Credit Agreement and the funding of the applicable amount thereunder, and (viii) the transactions contemplated by the Sprott Royalty Agreement.
The full text of Duff  & Phelps’ opinion is included as Annex M to this joint proxy statement/prospectus and describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Duff  & Phelps. The summary of Duff  & Phelps’ opinion in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of the opinion. The opinion was furnished for the benefit of the MUDS Board (in its capacity as such) in connection with the MUDS Board’s consideration of the Proposed Transaction, and is not intended to, and does not, confer any rights or remedies upon any other person, and is not intended to be used, and may not be used, by any other person or for any other purpose, without Duff  & Phelps’ express consent. Neither Duff  & Phelps’ opinion nor the summary of its opinion and the related analyses set forth in this joint proxy statement/prospectus is intended to be or constitutes a recommendation to any stockholder of MUDS as to how such holder should act with respect to the Proposed Transaction.
For a further discussion of Duff  & Phelps’ opinion, see “The Business Combination — Opinion of MUDS’ Financial Advisor” beginning on page [•].
Opinion of Seller’s Financial Advisor
At the January 13, 2020 meeting of the Seller Board held to evaluate the business combination, Greenhill & Co. Canada Ltd. (“Greenhill”) rendered an oral opinion, confirmed by subsequent delivery of a written opinion dated January 13, 2020, to the effect that, as of such date and subject to and based on the various assumptions made, procedures followed, matters considered and qualifications and limitations of the review set forth therein, the aggregate acquisition consideration (consisting of the retirement of the Excess Notes, the retirement of the 1.5 Lien Notes, cash equal to the payoff amount, and the purchase shares, collectively referred to hereafter for the purposes of the description of Greenhill’s opinion as the “Aggregate Acquisition Consideration”) to be received by Seller, together with the assumption by MUDS of the Assumed New Subordinated Notes was fair, from a financial point of view, to Seller.
The full text of Greenhill’s written opinion, dated January 13, 2020, is attached to this joint proxy statement/prospectus as Annex N and is incorporated by reference herein. Stockholders of the Seller are urged to read the entire opinion and the section entitled “The Business Combination — Opinion of Seller’s Financial Advisor” carefully and in their entirety. The analysis performed by Greenhill should be viewed in its entirety; none of the methods of analysis should be viewed in isolation. The opinion is solely for the information of the Seller Board, in its capacity as such, and addresses only the fairness from a financial point of view to Seller of the Aggregate Acquisition Consideration, together with the assumption by MUDS of the Assumed New Subordinated Notes, to be received by Seller pursuant to the Purchase Agreement, as of the date of the opinion. The opinion does not in any manner address the underlying business decision to proceed with or effect the business combination or any related transactions, or the relative merits of the business combination as compared to other potential strategies or transactions that may be available to Seller. Greenhill’s opinion is not intended to be and does not constitute a recommendation to the members of the Seller Board as to whether they should approve the business combination or the Purchase Agreement or take any other action in connection therewith, nor does it constitute a recommendation as to how any stockholder of Seller should vote or otherwise act with respect to the business combination.
For a further discussion of Greenhill’s opinion, see “The Business Combination — Opinion of Seller’s Financial Advisor” beginning on page [•].
Special Meeting of Seller Stockholders
Date, Time and Place of Special Meeting of Seller’s Stockholders
The Seller special meeting will be held at [•] a.m. Mountain Time on [•], 2020 at the offices of Seller, 8181 E. Tufts Avenue, Denver, CO 80237, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.
 
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Voting Power; Record Date of Special Meeting of Seller’s Stockholders
Seller’s stockholders will be entitled to vote on the matters presented at the Seller special meeting, which are fully set forth in this joint proxy statement/prospectus. Each share of Seller common stock will be entitled to vote or direct votes to be cast at the Seller special meeting if you owned Seller common stock at the close of business on the Seller record date. You are entitled to one vote for each share of Seller common stock that you held of record as of the close of business on the Seller record date. On the Seller record date, there were [•] shares of Seller common stock outstanding. Holders of Seller warrants are not considered to be stockholders and will not be entitled to vote on the matters presented at the Seller special meeting unless the Seller warrants are exercised in accordance with their terms prior to the Seller record date.
Quorum and Required Vote for Proposals for the Seller Special Meeting
A quorum of Seller stockholders is necessary to hold a valid meeting. The presence, in person or by proxy, of a majority of the issued and outstanding shares of Seller common stock entitled to vote constitutes a quorum at the Seller special meeting. Abstentions, while considered present for the purposes of establishing a quorum, will not count as votes cast at the Seller special meeting. As of the Seller record date, [•] shares of Seller common stock would be required to achieve a quorum. The proposals presented at the Seller special meeting require the following votes:

Seller Business Combination Proposal: The Seller Business Combination Proposal requires the approval of a majority of the outstanding shares of Seller common stock entitled to vote under the DGCL.

Seller Dissolution Proposal: The Seller Dissolution Proposal requires the approval of a majority of the outstanding shares of Seller common stock entitled to vote under the DGCL.

Seller Adjournment Proposal: The affirmative vote of the holders of a majority of the shares of Seller common stock present in person or represented by proxy and voting at the Seller special meeting is required to adjourn the Seller special meeting.
Appraisal Rights of Seller Stockholders
Appraisal rights are not available to Seller stockholders in connection with the business combination under Delaware law.
Proxy Solicitation for Seller
Proxies may be solicited by mail, telephone or in person. If a stockholder grants a proxy, it may still vote its shares in person if it revokes its proxy before the Seller special meeting. A stockholder also may change its vote by submitting a later-dated proxy as described in the section entitled “Revoking Your Proxy” on page [•].
Interests of Seller’s Directors and Officers in the Business Combination
When you consider the recommendation of Seller’s Board in favor of approval of the Seller Business Combination Proposal, you should keep in mind that Seller’s directors and officers have interests in such proposal that are different from, or in addition to, those of Seller’s stockholders generally. These interests include, among other things, the interests listed below:

The fact that certain of Seller’s directors and officers will continue to be directors and officers of HYMC after the consummation of the business combination. As such, in the future they will receive any cash fees, stock options, stock awards or other remuneration that the HYMC Board determines to pay to its directors and officers.

Upon completion of the business combination and the issuance of HYMC Class A common stock in the business combination assuming that the Seller stockholders receive [•] shares of HYMC Class A common stock, the directors and officers of Seller will collectively beneficially own approximately [•]% of the outstanding stock of HYMC.
 
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The existence of financial and personal interests of one or more Seller directors may result in a conflict of interest on the part of such director(s) between what he, she or they may believe is best for Seller. See the sections entitled Risk FactorsandSeller Special Meeting — Recommendation to Seller Stockholdersfor a further discussion of this and other risks.
Recommendation to Stockholders of Seller
Seller’s Board believes that the Seller Business Combination Proposal, the Seller Dissolution Proposal and the Seller Adjournment Proposal are in the best interest of Seller’s stockholders and recommends that its stockholders vote “FOR” the Seller Business Combination Proposal, “FOR” the Seller Dissolution Proposal and “FOR” the Seller Adjournment Proposal. Under the terms of the Seller Support Agreement, subject to a change in recommendation by the Seller Board, holders of approximately 58% of the outstanding common stock of Seller have agreed to vote “FOR” the Seller Business Combination Proposal and holders of approximately 52% of the outstanding common stock of Seller have indicated their intention to vote “FOR” the Seller Dissolution Proposal.
 
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RISK FACTORS
You should carefully review and consider the following risk factors and the other information contained in this joint proxy statement/prospectus, including the financial statements and notes to the financial statements included herein, in evaluating the business combination and the proposals to be voted on at the MUDS special meeting. The following risk factors apply to the Hycroft business, the operations of the Hycroft business by the Seller and will also apply to the business and operations of HYMC following the completion of the business combination. The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may adversely affect the ability to complete or realize the anticipated benefits of the business combination, and may have a material adverse effect on the business, cash flows, financial condition and results of operations of HYMC. You should carefully consider the following risk factors in addition to the other information included in this joint proxy statement/prospectus, including matters addressed in the section entitledCautionary Note Regarding Forward-Looking Statements.HYMC may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair HYMC’s business or financial condition. The following discussion should be read in conjunction with the financial statements and notes to the financial statements included herein.
Risks Related to Seller’s Industry
Unless the context otherwise requires, for purposes of this section, the termswe,” “us,” “the Company,” “Hycroftorour companyrefer to Seller and its subsidiaries as they currently exist under the law of the state of each such entity’s formation prior to consummation of the business combination, and to HYMC from and after the consummation of the business combination.
The market prices of gold and silver are volatile. A decline in gold and silver prices could result in decreased revenues, decreased net income, increased losses and decreased cash inflows which may negatively affect our business.
Gold and silver are commodities. Their prices fluctuate and are affected by many factors beyond our control, including interest rates, expectations regarding inflation, speculation, currency values, central bank activities, governmental decisions regarding the disposal of precious metals stockpiles, global and regional demand and production, political and economic conditions and other factors. The prices of gold and silver, as quoted by The London Bullion Market Association on December 31, 2019 and December 31, 2018, were $1,515 and $1,279 per ounce for gold, respectively, and $18.04 and $15.46 per ounce for silver, respectively. The prices of gold and silver may decline in the future. A substantial or extended decline in gold or silver prices would adversely impact our financial position, revenues, net income and cash flows, particularly in light of our current strategy of not engaging in hedging transactions with respect to gold or silver. In addition, sustained lower gold or silver prices may:

reduce revenue potential due to cessation of the mining of deposits, or portions of deposits, that have become uneconomic at the then-prevailing gold or silver price;

reduce or eliminate the profit, if any, that we currently expect from mining operations;

halt, delay, modify, or cancel plans for the mining of oxide and sulfide ores or the development of new and existing projects;

make it more difficult for us to satisfy and/or service our debt obligations;

reduce existing reserves by removing ores from reserves that can no longer be economically processed at prevailing prices; and

cause us to recognize an impairment to the carrying values of mineral properties and long-lived assets.
Reserve and other mineralized material calculations are estimates only, and are subject to uncertainty due to factors including metal prices, inherent variability of the ore and recoverability of metal in the mining process.
The calculation of mineral reserves, mineral resources and grades are estimates and depend upon geological interpretation and statistical inferences or assumptions drawn from drilling and sampling
 
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analysis, which may prove to be unpredictable. There is a degree of uncertainty attributable to the calculation of mineral reserves and mineral resources, and corresponding grades. Until mineral reserves and mineral resources are actually mined and processed, the quantity of ore and grades must be considered as an estimate only. In addition, the quantity of mineral reserves and mineral resources may vary depending on metal prices, which largely determine whether mineral reserves and other mineralized materials are classified as ore (economic to mine) or waste (uneconomic to mine). A decline in metal prices may result in previously reported mineral reserves (ore) becoming uneconomic to mine (waste). Current reserve estimates were calculated using a $1,200 per ounce gold price and $16.50 per ounce silver price. A material decline in the current price of gold or silver could require a reduction in our reserve estimates. Any material change in the quantity of mineral reserves, mineral resources, mineralization, grade or stripping ratio may affect the economic viability of our properties. In addition, we can provide no assurance that gold and silver recoveries experienced in small-scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.
We face intense competition in the mining industry.
The mining industry is intensely competitive. As a result of this competition, some of which is with large established mining companies with substantial mining capabilities and with greater financial and technical resources than ours, we compete with other mining companies in the recruitment and retention of qualified managerial and technical employees and in acquiring attractive mining claims. If we are unable to successfully attract and retain qualified employees, our development programs and/or our operations may be slowed down or suspended, which may adversely impact HYMC’s development, financial condition and results of operations.
Mining development and processing operations pose inherent risks and costs that may negatively impact our business.
Mining development and processing operations involve many hazards and uncertainties, including, among others:

metallurgical or other processing problems;

ground or slope failures;

industrial accidents;

unusual and unexpected rock formations or water conditions;

environmental contamination or leakage;

flooding and periodic interruptions due to inclement or hazardous weather conditions or other acts of nature;

fires;

seismic activity;

organized labor disputes or work slow-downs;

mechanical equipment failure and facility performance problems; and

the availability of critical materials, equipment and skilled labor.
These occurrences could result in damage to, or destruction of, our properties or production facilities, personal injury or death, environmental damage, delays in mining or processing, increased production costs, asset write downs, monetary losses and legal liability, any of which could have an adverse effect on our results of operations and financial condition and adversely affect HYMC’s projected development and production estimates.
Our insurance may not cover all of the risks associated with our business.
The mining business is subject to risks and hazards, including, but not limited to, construction risks, environmental hazards, industrial accidents, the encountering of unusual or unexpected geological formations,
 
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slide-ins, flooding, earthquakes and periodic interruptions due to inclement or hazardous weather conditions. These occurrences could result in damage to, or destruction of, mineral properties or production facilities, personal injury or death, environmental damage, reduced production and delays in mining, asset write-downs, monetary losses and possible legal liability. Insurance fully covering many of these risks is not generally available to us and if it is, we may elect not to obtain it because of the high premium costs or commercial impracticality. We do not currently carry business interruption insurance and have no plans as HYMC to obtain such insurance in the future. Any liabilities incurred for these risks and hazards could be significant and could adversely affect HYMC’s results of operation, cash flows and financial condition.
Environmental regulations could require us to make significant expenditures or expose us to potential liability.
To the extent we become subject to environmental liabilities, the payment of such liabilities or the costs that we may incur, including costs to remedy environmental pollution, would reduce funds otherwise available to us and could have a material adverse effect on our financial condition, results of operations, and liquidity. If we are unable to fully remedy an environmental violation or release of hazardous substances, we might be required to suspend operations or enter into interim compliance measures pending completion of the required remedy or corrective action. The environmental standards that may ultimately be imposed at a mine site can vary and may impact the cost of remediation. Actual remedial costs may exceed the financial accruals that have been made for such remediation. The potential exposure may be significant and could have a material adverse effect on HYMC’s financial condition and results of operations.
Moreover, governmental authorities and private parties may bring lawsuits based upon damage to property or natural resources and injury to persons resulting from the environmental, health and safety impacts of our past and current operations, which could lead to the imposition of substantial fines, remediation costs, penalties, injunctive relief and other civil and criminal sanctions. Substantial costs and liabilities, including those required to restore the environment after the closure of mines, are inherent in our operations. We cannot provide any assurance that any such law, regulation, enforcement or private claim will not have a negative effect on HYMC’s business, financial condition or results of operations.
Our operations are subject to extensive environmental regulations, which could result in the incurrence of operational delays, penalties and costs.
All phases of our operations are subject to extensive federal and state environmental regulation, including those enacted under the following laws:

Comprehensive Environmental Response, Compensation, and Liability Act;

The Resource Conservation and Recovery Act;

The Clean Air Act;

The National Environmental Policy Act;

The Clean Water Act; and

The Safe Drinking Water Act.
Additional regulatory authorities also have jurisdiction over some of our operations and mining projects including the Environmental Protection Agency, the Nevada Division of Environmental Protection, the U.S. Fish and Wildlife Service, the U.S. Bureau of Land Management, which we refer to as the “BLM,” and the Nevada Department of Wildlife.
These environmental regulations require us to obtain various operating permits, approvals and licenses and also impose standards and controls relating to development and production activities. For instance, we are required to hold a Nevada Reclamation Permit with respect to the Hycroft Mine. This permit mandates concurrent and post-mining reclamation of mines and requires the posting of reclamation bonds sufficient to guarantee the cost of mine reclamation. Changes to the amount required to be posted for reclamation bonds for our operations at the Hycroft Mine could materially affect HYMC’s financial position, results of operations, cash flows and liquidity following consummation of the business combination. Also, the U.S. Fish and Wildlife Service may designate critical habitat and suitable habitat areas it believes are necessary for survival of a threatened or endangered species. A critical habitat or suitable habitat designation could
 
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result in further material restrictions to land use and may materially delay or prohibit land access for our development. For example, we had to obtain certain permits associated with mining in the area of an eagle habitat. Failure to obtain such required permits or failure to comply with federal and state regulations could also result in delays in beginning or expanding operations, incurring additional costs for investigation or cleanup of hazardous substances, payment of penalties for non-compliance or discharge of pollutants, and post-mining closure, reclamation and bonding, all of which could have an adverse impact on HYMC’s financial performance, results of operations and liquidity.
Compliance with current and future government regulations may cause us to incur significant costs.
Our operations are subject to extensive federal and state legislation governing matters such as mine safety, occupational health, labor standards, prospecting, exploration, production, exports, toxic and hazardous substances, explosives, management of natural resources, land use, water use, air emissions, waste disposal, environmental review and taxes. Compliance with this and other legislation could require us to make significant financial outlays. The enactment of new legislation or more stringent enforcement of current legislation may increase costs, which could have a negative effect on our financial position, results of operations, and liquidity. We cannot provide any assurances that we will be able to adapt to these regulatory developments on a timely or cost-effective basis. Violations of these laws, regulations and other regulatory requirements could lead to substantial fines, penalties or other sanctions, including possible shut-down of the Hycroft Mine or future operations, as applicable.
Changes in environmental regulations could adversely affect our cost of operations or result in operational delays.
The regulatory environment in which we operate is evolving in a manner that will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. New environmental laws and regulations or changes in existing environmental laws and regulations could have a negative effect on exploration activities, operations, production levels and methods of production.
We cannot provide any assurance that future changes in environmental laws and regulations will not adversely affect our current operations or future projects. Any changes to these laws and regulations could have an adverse impact on our financial performance and results of operations by, for example, requiring changes to operating constraints, technical criteria, fees or surety requirements.
Our operations are subject to numerous governmental permits that are difficult to obtain and we may not be able to obtain or renew all of the permits we require, or such permits may not be timely obtained or renewed.
In the ordinary course of business we are required to obtain and renew governmental permits for our operations, including in connection with our plans for heap leaching our transition and sulfide ores at the Hycroft Mine. We will also need additional governmental permits to accomplish our long-term plans to mine sulfide ores, including without limitation, permits to allow construction of additional leach pad space. Obtaining or renewing the necessary governmental permits is a complex and time-consuming process involving costly undertakings by us. The duration and success of our efforts to obtain and renew permits are contingent upon many variables not within our control, including the interpretation of applicable requirements implemented by the permitting authority and intervention by third parties in any required environmental review. We may not be able to obtain or renew permits that are necessary to our operations on a timely basis or at all, and the cost to obtain or renew permits may exceed our estimates. Failure to comply with the terms of our permits may result in injunctions, fines, suspension or revocation of permits and other penalties. We can provide no assurance that we have been, or will at all times, be in full compliance with all of the terms of our permits or that we have all required permits. The costs and delays associated with compliance with these permits and with the permitting process could alter the mine plan, delay or stop us from proceeding with the operation or development of the Hycroft Mine or increase the costs of development or production, any or all of which may materially adversely affect Hycroft’s business, results of operations, financial condition and liquidity.
 
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There are uncertainties as to title matters in the mining industry. Any defects in such title could cause us to lose our rights in mineral properties and jeopardize our business operations.
Our mineral properties consist of private mineral rights, leases covering private lands, leases of patented mining claims and unpatented mining claims. Areas of the Hycroft Mine are unpatented mining claims located on lands administered by the BLM, Nevada State office to which we have only possessory title. Because title to unpatented mining claims is subject to inherent uncertainties, it is difficult to determine conclusively ownership of such claims. These uncertainties relate to such things as sufficiency of mineral discovery, proper location and posting and marking of boundaries, and possible conflicts with other claims not determinable from descriptions of record. We believe a substantial portion of all mineral exploration, development and mining in the United States now occurs on unpatented mining claims, and this uncertainty is inherent in the mining industry.
The present status of our unpatented mining claims located on public lands allows us the right to mine and remove valuable minerals, such as precious and base metals, from the claims conditioned upon applicable environmental reviews and permitting programs. We also are generally allowed to use the surface of the land solely for purposes related to mining and processing the mineral-bearing ores. However, legal ownership of the land remains with the United States. We remain at risk that the mining claims may be forfeited either to the United States or to rival private claimants due to failure to comply with statutory requirements. Prior to 1994, a mining claim locator who was able to prove the discovery of valuable, locatable minerals on a mining claim, and to meet all other applicable federal and state requirements and procedures pertaining to the location and maintenance of federal unpatented mining claims, had the right to prosecute a patent application to secure fee title to the mining claim from the Federal government. The right to pursue a patent, however, has been subject to a moratorium since October 1994, through federal legislation restricting the BLM from accepting any new mineral patent applications. If we do not obtain fee title to our unpatented mining claims, we can provide no assurance that we will be able to obtain compensation in connection with the forfeiture of such claims.
There may be challenges to title to the mineral properties in which we hold a material interest. If there are title defects with respect to any properties, we might be required to compensate other persons or perhaps reduce our interest in the affected property. Also, in any such case, the investigation and resolution of title issues would divert our management’s time from ongoing production and development programs.
Legislation has been proposed periodically that could, if enacted, significantly affect the cost of our operations on our unpatented mining claims or the amount of Net Proceeds of Mineral Tax we pay to the State of Nevada.
Members of the U.S. Congress have periodically introduced bills which would supplant or alter the provisions of the Mining Law of 1872. Such bills have proposed, among other things, to either eliminate or greatly limit the right to a mineral patent and to impose a federal royalty on production from unpatented mining claims. Such proposed legislation could change the cost of holding unpatented mining claims and could significantly impact our ability to develop mineralized material on unpatented mining claims. A majority of our mining claims are unpatented claims. Although we cannot predict what legislated royalties might be, the enactment of these proposed bills could adversely affect the potential for development of our unpatented mining claims and the economics of our existing operating mines on federal unpatented mining claims. Passage of such legislation could adversely affect HYMC’s financial performance and results of operations.
We pay Net Proceeds of Mineral Tax, which we refer to as “NPT,” to the State of Nevada on up to 5% of net proceeds generated from our Hycroft Mine. Net proceeds are calculated as the excess of gross yield over direct costs. Gross yield is determined as the value received when minerals are sold, exchanged for anything of value or removed from the state. Direct costs generally include the costs to develop, extract, produce, transport and refine minerals. From time to time Nevada legislators introduce bills which aim to increase the amount of NPT mining companies operating in the state pay. If legislation is passed that increases the NPT we pay to the state of Nevada, HYMC’s business, results of operations, and cash flows could be negatively impacted.
 
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Regulations and pending legislation governing issues involving climate change could result in increased operating costs, which could have a material adverse effect on our business.
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us and our suppliers, including costs related to increased energy requirements, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such regulations. Given the emotion, political significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm HYMC’s reputation.
Climate change could have an adverse impact on our cost of operations.
The potential physical impacts of climate change on our operations are highly uncertain and would be particular to the area in which we operate. These climate changes may include changes in rainfall and storm patterns and intensities, water shortages and changing temperatures. These changes in climate could adversely affect our mining operations, including by affecting the moisture levels and pH of ore on our leach pads, increase the cost of production at the Hycroft Mine and adversely affect the financial performance of HYMC’s operations.
Risks Related to the Hycroft Business
Unless the context otherwise requires, for purposes of this section, the termswe,” “us,” “the Company,” “Hycroftorour companyrefer to Seller and its subsidiaries as they currently exist under the law of the state of each such entity’s formation prior to consummation of the business combination, and to HYMC from and after the consummation of the business combination.
The estimation of the ultimate recovery of gold and silver from the Hycroft Mine, although based on standard industry sampling and estimating methods, is subjective. Our results of operations, liquidity, and financial position may be negatively impacted if actual recoveries are lower than initial estimations.
Our Hycroft Mine historically utilized a heap leach process to extract gold and silver from ore. Our new plans outlined in the Hycroft Technical Report are also based on a heap leach process. The heap leach process extracts gold and silver by placing ore on an impermeable pad and applying a dilute cyanide solution that dissolves a portion of the contained gold and silver, which are then recovered in metallurgical processes. We use several integrated steps in the process of extracting gold and silver to estimate the metal content of ore placed on the leach pad. Although we refine our estimates as appropriate at each step in the process, the final amounts are not determined until a third-party smelter refines the doré and/or metal-laden carbon and determines the final ounces of gold and silver available for sale. We then review this end result and reconcile it to the estimates we developed and used throughout the production process. Based on this review, we adjust our estimation procedures when appropriate. Due to the complexity of the estimation process and the number of steps involved, among other things, actual recoveries can vary from estimates, and the amount of the variation could be significant and could have a material adverse impact on our financial condition, results of operations and liquidity.
There is only limited experience of recovering gold and silver from sulfide ores using a heap leaching process and we may not be able to economically recover gold and silver.
Under our current mine plan, we have begun to mine and extract gold and silver from transition and sulfide ores using a two-step pre-oxidation process on transition and sulfide ores using soda ash to manage pH and alkalinity during the oxidation process in accordance with the methods set forth in the Hycroft Technical Report. However, the economic parameters described in the Hycroft Technical Report include a number of assumptions and estimates that could prove to be incorrect. Additionally, this two-step process to oxidize transition and sulfide ores before heap leaching to extract gold and silver is a new and relatively
 
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untested process, is used only on a limited basis worldwide and has not been widely accepted as a viable process. We cannot provide any assurance that the development and advancement of the Hycroft Mine transition and sulfide ores leaching operations will result in economically viable mining operations, yield new mineral reserves or other mineralized material, enable us to convert other mineralized material (included within mineral resources identified by the feasibility study), or be implemented on an economic and profitable basis.
Cost estimates of operating our Hycroft Mine are uncertain, which may adversely affect our expected production and profitability.
The expenditures to implement our new two-stage pre-oxidation and leach process, and access our transition and sulfide ores, are considerable and changes in costs, construction schedules, commodity prices and other factors can adversely affect project economics and expected production and profitability. There are a number of factors that can affect costs and construction schedules and result in our assumptions and estimates about the anticipated benefits of a project being incorrect, including, among others:

changes in input commodity prices and labor costs;

recovery rates of gold and silver from the ore;

availability and terms of financing;

availability of labor, energy, transportation, equipment, and infrastructure;

changes in anticipated tonnage, grade and metallurgical characteristics of the ore to be mined and processed;

difficulty of estimating construction costs over a period of years;

delays in completing any environmental review or in obtaining environmental or other governmental permits;

weather and severe climate impacts; and

potential delays related to social and community issues.
We have previously recovered gold and silver from oxide and transition ores at the Hycroft Mine through our heap leach operations. In connection with our restarted mining operations, in addition to mining oxide ore, we are also mining gold and silver from transition and sulfide ores using a modified heap leach process, in which soda ash is being used to manage pH and alkalinity in a two-stage oxidation and leach process, in accordance with the Hycroft Technical Report. However, it is important to note that the economic parameters described in a feasibility study, such as the Hycroft Technical Report, include a number of assumptions and estimates that could prove to be incorrect. We use feasibility studies to make a reasoned determination of whether to proceed with a project and to support the required financing for a project but you should not assume that the economic analysis contained in a feasibility study is a guarantee of future performance or that the estimated net present value or internal rates of return will be achieved. Actual results may differ materially. In particular, the processing of sulfide ore and additional transition ore at the Hycroft Mine is uncertain and, therefore, the costs and timing of the commencement of the production of sulfide ore and additional transition ore operations at the Hycroft Mine could vary greatly from our estimates.
We may not achieve our production and/or sales estimates and our costs may be higher than our estimates, thereby reducing our cash flows and negatively impacting our results of operations and liquidity.
We prepare estimates of future production, sales, and costs for our operations. We develop our estimates based on, among other things, mining experience, mineral reserve and resource estimates, assumptions regarding ground conditions and physical characteristics of ores (such as hardness and presence or absence of certain metallurgical characteristics), costs to construct new leach pads and estimated rates and costs of mining and processing. All of our estimates are subject to numerous uncertainties, many of which are beyond our control. Our actual production and/or sales may be lower than our estimates and our actual costs may be higher than our estimates, which could negatively impact our cash flows and results
 
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of operations. While we believe that our estimates are reasonable at the time they are made, actual results will vary and such variations may be material. These estimates are speculative in nature, and it may be the case that one or more of the assumptions underlying such projections and estimates may not materialize. You are cautioned not to place undue reliance on the projections and estimates set forth in this joint proxy statement/prospectus, any document incorporated by reference or any document attached hereto.
We currently depend on a single mine and there is no assurance that after restarting operations we will not incur any interruptions or stoppages in our mining activities which would have a material adverse effect on our results of operations and financial condition.
The Hycroft Mine is our only mining property. We can provide no assurance that we will be successful in profitably operating the Hycroft Mine using the sulfide leaching process. Further, any interruption in our ability to operate the Hycroft Mine, such as, but not limited to, a natural disaster, loss of material permits, processing interruptions or difficulties or labor strike would have a materially adverse effect on our ability to produce gold and silver and to generate revenue.
Our reliance on third party contractors and consultants to conduct our operations and construction projects exposes us to risks.
In connection with the operation of the Hycroft Mine, we will contract and engage third party contractors and consultants to assist with aspects of our operations and related construction projects, including construction of the new leach pad, repair of the crushing facility, and mining of our ore and waste. As a result, our operations and construction projects are subject to a number of risks, some of which are outside our control, including:

negotiating agreements with contractors and consultants on acceptable terms;

the inability to replace a contractor or consultant and their operating equipment in the event that either party terminates the agreement;

reduced control over those aspects of operations which are the responsibility of the contractor or consultant;

failure of a contractor or consultant to perform under their agreement or disputes relative to their performance;

interruption of operations or increased costs in the event that a contractor or consultant ceases their business due to insolvency or other unforeseen events;

failure of a contractor or consultant to comply with applicable legal and regulatory requirements, to the extent they are responsible for such compliance; and

problems of a contractor or consultant with managing their workforce, labor unrest or other employment issues.
In addition, we may incur liability to third parties as a result of the actions of our contractors or consultants. The occurrence of one or more of these risks could decrease our gold and silver production, increase our costs, interrupt or delay our mining operations or our ability to access our ores, and adversely affect our liquidity, results of operations and financial position.
Our lack of exploration activities will lead to our inability to replace depleted reserves.
To maintain production levels over time we must replace depleted reserves by exploiting known ore bodies and locating new deposits. Pursuant to our emergence from bankruptcy, all of our exploration properties other than those associated with Hycroft Mine were sold in the chapter 11 proceedings. We have no current plans to continue further exploration other than related to the mining and processing of gold and silver contained in ore within the Hycroft Mine, and there can be no assurance that such projects will be successful. Our mineral base will decline if reserves are mined without adequate replacement, and we may not be able to sustain production beyond the currently contemplated mine life, based on projected production rates.
 
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Land reclamation requirements for the Hycroft Mine may be burdensome and expensive.
Land reclamation requirements are generally imposed on companies with mining operations in order to minimize long-term effects of land disturbance. Reclamation may include requirements to control dispersion of potentially deleterious effluents; treat ground and surface water to drinking water standards; and reasonably re-establish pre-disturbance land forms and vegetation.
In order to carry out reclamation obligations imposed on us in connection with our activities, we must allocate financial resources that might otherwise be spent on further development programs. We have established a provision for our reclamation obligations on the Hycroft Mine property, as appropriate, but this provision may not be adequate. If we are required to carry out unanticipated reclamation work, our financial position could be adversely affected.
The sale of our mineral properties and suspension of acquisition and exploration activities greatly limit our ability to generate new reserves or identify other mineralized materials to replace or expand our current reserves.
Because the Hycroft Mine has a limited life based on proven and probable mineral reserves and resources, we have previously sought to replace and expand our mineral reserves and resources. Identifying promising mining properties is difficult and speculative. As part of our emergence from federal bankruptcy proceedings, pursuant to our plan of reorganization, we sold our remaining exploration properties. The sale of our mineral properties greatly limits our ability to develop or grow our reserves or identify new mineral resources. As a result, our revenues from the future sale of gold and silver may decline, resulting in lower income and reduced growth. Further, we expect to encounter strong competition from other mining companies in connection with the acquisition of properties producing or capable of producing gold and silver. Although we have currently suspended our acquisition and exploration activities, if or when those activities are resumed, we will face competition from many of these companies that have greater financial resources than we do. Consequently, we may be unable to replace and expand current ore reserves through the acquisition of new mining properties or interests therein on terms we consider acceptable.
A shortage of equipment and supplies and/or the time it takes such items to arrive at our Hycroft Mine could adversely affect our ability to operate our business.
We are dependent on various supplies and equipment to engage in mining and development operations. The shortage of such supplies, equipment and parts and/or the time it takes such items to arrive at our Hycroft Mine could have a material adverse effect on our ability to carry out our operations and develop the Hycroft Mine, and therefore limit or increase the cost of production. Such shortages could also result in increased construction costs and cause delays in expansion projects.
The inability to obtain soda ash or delays in obtaining soda ash could adversely affect our ability to profitably operate our business.
There are a limited number of suppliers that produce and supply soda ash and to our knowledge, such suppliers do not typically mine soda ash in excess of what they believe they can sell. We have entered into a three-year agreement with a soda ash supplier to provide soda ash for our operations. However, if the contracted supplier cancels the contract, is unable to produce and supply enough soda ash or ceases operations because of the large quantities of soda ash required in our operations, we may have to temporarily stop mining until we can obtain a new contract to purchase soda ash. Further, we cannot provide any assurance as to the costs that we might incur in obtaining soda ash from a substitute supplier which could adversely affect the profitability and cash flow of our mining operations.
Changes in the cost or supply of energy or commodities used in operations may adversely affect the profitability of our operations and our financial condition.
Our mining operation is an intensive user of energy. Our principal energy sources are electricity and diesel fuel. We rely upon third parties for our supply of energy resources consumed in our mining activities. Energy prices can be affected by numerous factors beyond our control, including global and regional supply and demand, political and economic conditions, and applicable regulatory regimes. The prices of
 
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various sources of energy may increase significantly from current levels. An increase in energy prices could materially and adversely affect our results of operations and financial condition.
Disruptions in the supply of our energy resources could temporarily impair our ability to produce gold and silver or delay any expansion projects or plans. Our mining operation is in a remote location requiring the long distance transmission of power. A disruption in the transmission of energy, inadequate energy transmission infrastructure or the termination of any of our energy supply contracts could interrupt our energy supply and adversely affect our operations or expansion projects.
Our production costs are also affected by the prices of commodities we consume or use in our operations, such as diesel fuel, sodium cyanide, soda ash, lime, tires, and explosives. The prices of such commodities are influenced by supply and demand trends affecting the mining industry in general and other factors outside our control. Increases in the price for materials consumed in our mining and production activities could materially and adversely affect our liquidity, results of operations, financial condition and cash flows.
We cannot be certain that our future development activities will be commercially successful.
Substantial expenditures are required to construct additional leach pads to extract gold and silver from our transition and sulfide ore utilizing the new metallurgical processes to extract gold and silver from the transition and sulfide ores described in the Hycroft Technical Report, to further develop our Hycroft Mine to identify new mineral reserves and resources, and to expand or establish mineral reserves and resources through drilling and analysis. We cannot provide assurance that our process to extract gold and silver from transition and sulfide ores using a heap leach process can be maintained on an economic and profitable basis, that any mineral reserves or resources discovered will be in sufficient quantities to justify commercial operations or that the funds required for development can be obtained on a timely or economic basis. A number of factors, including costs, actual mineralization, consistency and reliability of ore grades and commodity prices affect successful project development. The efficient operation of processing facilities, the existence of competent operational management, as well as the availability and reliability of appropriately skilled and experienced consultants also can affect successful project development. We can provide no assurance that the development and advancement of the Hycroft Mine sulfide leaching operations will result in economically viable mining operations or yield new mineral reserves or resources.
We may be adversely affected by challenges relating to slope stability.
Our open pit mine gets deeper as we mine it, presenting certain geotechnical challenges including the possibility of slope failure. If we are required to decrease pit slope angles or provide additional road access to prevent such a failure, our stated mineral reserves could be negatively affected. Further, hydrological conditions relating to pit slopes, renewal of material displaced by slope failures and increased stripping requirements could also negatively affect our stated mineral reserves. We cannot provide any assurances that we will not have to take additional action to maintain slope stability in the future or that our actions taken to date will be sufficient. Unexpected failure or additional requirements to prevent slope failure may negatively affect our results of operations and financial condition, as well as have the effect of diminishing our stated ore reserves.
We may need to raise additional capital but such capital may not be available on favorable terms or at all.
The continuing operation of our Hycroft Mine under the new mine plan will require significant investment. Failure to obtain sufficient financing may result in the delay or indefinite postponement of development or production at the Hycroft Mine. The covenants in the Sprott Credit Agreement and the Sprott Royalty Agreement as well as downgrades to our credit ratings as a result of the bankruptcy proceedings, could significantly limit our ability to secure new or additional credit facilities, increase our cost of borrowing, and make it difficult or impossible to raise additional capital on favorable terms or at all.
Our primary future cash requirements will be to fund working capital as we ramp up operations at the Hycroft Mine and to fund future and sustaining capital. As of December 31, 2019, we had cash and cash equivalents of  $6.2 million. Using current metal price levels and our estimates of future metal sales and costs, under our new mine plan described in the Hycroft Technical Report to mine sulfide and transition ore using a heap leach process, we currently expect our future net cash used in investing activities during the
 
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fiscal years ending December 31, 2019 and 2020 to exceed our cash flows provided by operating activities during the same periods. You are cautioned that management’s expectations regarding our liquidity and capital resources are based on a number of assumptions that we believe are reasonable but could prove to be incorrect. For example, our expectations are based on assumptions regarding commodity price levels, gold and silver recovery percentages and rates, production estimates, anticipated costs and other factors that are subject to a number of risks, many of which are beyond our control. If our assumptions prove to be incorrect, we may require additional financing sooner than we expect to continue to operate our business, which may not be available on favorable terms or at all and which could have a material adverse effect on our results of operations, financial condition and liquidity.
The Sprott Credit Agreement and Sprott Royalty Agreement will impose significant operating and financial restrictions that may limit our ability to operate our business.
The Sprott Credit Agreement that HYMC will assume, and the Sprott Royalty Agreement that HYMC will enter into, in connection with the business combination will impose significant operating and financial restrictions on us and our restricted subsidiaries. These restrictions will limit our ability and the ability of our restricted subsidiaries to, among other things, as applicable:

incur additional debt;

pay dividends or make other restricted payments, including certain investments;

create or permit certain liens;

sell assets;

engage in certain transactions with affiliates; and

consolidate or merge with or into other companies, or transfer all or substantially all of our assets or the assets of our restricted subsidiaries.
These restrictions could limit our ability to finance our future operations or capital needs, make acquisitions or pursue available business opportunities.
In addition, the Sprott Credit Agreement and the Sprott Royalty Agreement will require us to comply with a number of customary covenants, including:

covenants related to the delivery of monthly, quarterly and annual financial statements, budgets and annual projections;

maintaining required insurance;

compliance with laws (including environmental);

compliance with ERISA;

maintenance of ownership of 100% of Hycroft Mine;

restrictions on consolidations, mergers or sales of assets;

limitations on liens;

limitations on issuance of certain equity interests;

limitations on issuance of additional indebtedness;

limitations on transactions with affiliates; and

other customary covenants.
We cannot assure you that we will satisfy these covenants or that our lenders will waive any future failure to do so. A breach of any of the covenants under the Sprott Credit Agreement and the Sprott Royalty Agreement could result in a default. See “Description of Certain Indebtedness — Sprott Credit Agreement” and “Description of Certain Indebtedness — Sprott Royalty Agreement” for further information. If a default occurs under the Sprott Credit Agreement and the Sprott Royalty Agreement, the lenders could elect to declare the debt, together with accrued interest and other fees, to be immediately due and
 
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payable and proceed against the collateral securing that debt, which, in the case of the Sprott Credit Agreement and the Sprott Royalty Agreement, constitutes all or substantially all of HYMC’s assets.
Our substantial indebtedness could adversely affect our financial condition.
After the business combination we will have a significant amount of indebtedness. As of December 31, 2019, we had outstanding indebtedness of  $555.0 million, including $125.5 million in aggregate principal amount of indebtedness under the First Lien Credit Agreement, $6.8 million under the Jacobs Note, $77.2 million in aggregate principal amount of indebtedness in outstanding 1.25 Lien Notes, $137.1 million in aggregate principal amount of indebtedness in outstanding 1.5 Lien Notes and $208.4 million in aggregate principal amount of indebtedness in outstanding Second Lien Notes. As a condition to the business combination, the indebtedness under the First Lien Credit Agreement and the Jacobs Note will be repaid, the 1.25 Lien Notes will be exchanged for New Subordinated Notes and up to $80,000,000 in aggregate principal amount of New Subordinated Notes will be assumed by HYMC in connection with the business combination, the 1.5 Lien Notes and any Excess Notes will be paid in cash or exchanged for shares of HYMC Class A common stock, the Second Lien Notes will be converted into shares of Seller common stock, HYMC will assume the Sprott Credit Agreement and HYMC and its wholly-owned subsidiary will enter into the Sprott Royalty Agreement. Subject to the limits contained in the Sprott Credit Agreement to be assumed, and the Sprott Royalty Agreement to be entered into, in connection with the consummation of the business combination, if we are able to incur additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes, then the risks related to our high level of debt could intensify. Our high level of debt and royalty payment obligations could:

make it more difficult for us to satisfy our obligations with respect to our outstanding debt;

require a substantial portion of our cash flows to be dedicated to debt service and/or royalty payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;

limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;

increase our vulnerability to commodity price volatility, including increases in prices of commodities that we purchase and decreases in prices of gold and silver that we sell, each as part of our operations, general adverse economic and industry conditions;

limit our flexibility in planning for and reacting to changes in the industry in which we compete;

place us at a disadvantage compared to other, less leveraged competitors; and

increase our cost of borrowing.
Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations under our debt, and the price of our common stock. The Sprott Credit Agreement to be assumed, and the Sprott Royalty Agreement to be entered into, in connection with the consummation of the business combination, each contain restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of nearly all of our debt.
If we default on our obligations to pay any of our indebtedness or otherwise default under the agreements governing our indebtedness, lenders could accelerate such debt and we may be subject to restrictions on the payment of our other debt obligations or cause a cross-acceleration.
Any default under the agreements governing our indebtedness that is not waived by the required lenders or holders of such indebtedness, and the remedies sought by the holders of such indebtedness, could prevent us from paying principal, premium, if any, and interest on other debt instruments. If we are unable to generate sufficient cash flow or are otherwise unable to obtain funds necessary to meet required payments of principal, premium, if any, and interest on our indebtedness and royalty payment obligations, or if we otherwise fail to comply with the various covenants in any agreement governing our indebtedness, we would
 
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be in default under the terms of the agreements governing such indebtedness and other indebtedness under the cross-default and cross-acceleration provisions of such agreements. In the event of such default:

the lenders or holders of such indebtedness could elect to terminate any commitments thereunder, declare all the funds borrowed thereunder to be due and payable and, if not promptly paid, in the case of our secured debt, institute foreclosure proceedings against our assets; and

even if these lenders or holders do not declare a default, they may be able to cause all of our available cash to be used to repay indebtedness owed to them.
As a result of such default and any actions the lenders may take in response thereto, HYMC could be forced into bankruptcy or liquidation.
We may not be able to generate sufficient cash to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
Our ability to make scheduled payments on our debt and royalty obligations or refinance our debt obligations (if necessary) depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control, including the market prices of gold and silver. We may be unable to maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness and our royalty obligations.
If our cash flows and capital resources are insufficient to fund our debt service obligations and our royalty obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets, seek additional debt or equity capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The Sprott Credit Agreement to be assumed, and the Sprott Royalty Agreement to be entered into, by HYMC in connection with the consummation of the business combination will restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service and royalty payment obligations then due.
In addition, we conduct a substantial portion of our operations through our subsidiaries, certain of which in the future may not be guarantors of our indebtedness. Accordingly, repayment of our indebtedness is dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors of our indebtedness, our subsidiaries do not have any obligation to pay amounts due on our indebtedness or to make funds available for that purpose. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness. Each subsidiary is a distinct legal entity, and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries. In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.
Our inability to generate sufficient cash flows to satisfy our debt and royalty obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would materially and adversely affect our financial position and results of operations and our ability to satisfy our obligations.
If we cannot make scheduled payments on our debt, we will be in default and the lenders under the Sprott Credit Agreement to be assumed, and the Sprott Royalty Agreement to be entered into, by HYMC in connection with the consummation of the business combination could foreclose against the assets securing their borrowings and we could be forced into bankruptcy or liquidation.
Our history of operations includes periods of operating and net losses, and we may incur operating and net losses in the future. Our significant net losses and our significant amount of indebtedness led us to declare bankruptcy in 2015.
Prior to our emergence from bankruptcy proceedings on October 22, 2015, we generated operating losses of  $368.9 million for period from January 1, 2015 through October 22, 2015 and $480.1 million for
 
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the year ended December 31, 2014. In the years ended December 31, 2018 and 2017 we generated operating losses of  $8.2 million and $32.9 million, respectively, and net losses of  $55.8 million and $74.1 million, respectively. In connection with the restart of operations beginning in 2019, in the nine months ended September 30, 2019, we generated operating losses of  $16.5 million and net losses of  $63.1 million. See “Seller’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018” and the financial statements for the years ended December 31, 2018 and 2017 included elsewhere in this joint proxy statement/prospectus for more information regarding our results of operations during these periods. If we continue to suffer operating and net losses, our business, financial condition, results of operations and cash flows may be negatively impacted.
Upon the conversion of the Second Lien Notes, the exchange of the 1.5 Lien Notes and Excess Notes and repayment of the First Lien Credit Agreement and the Jacobs Note in connection with the consummation of the business combination, while we will have significantly less indebtedness and interest expense, we will still have material indebtedness. We may not generate sufficient revenues in future periods to cover our payment obligations under the Sprott Credit Agreement and New Subordinated Notes to be assumed, and the Sprott Royalty Agreement to be entered into, in connection with the consummation of the business combination to pay for all of our operating or other expenses, which could have a material adverse effect on our business, results of operations and financial condition.
The chapter 11 proceedings may have disrupted our business relationships, which may materially and adversely affect our operations.
The chapter 11 reorganization that we went through in 2015 may have created a negative public perception of us in relation to our competitors and adversely impacted our relationships with our employees, suppliers, customers and other parties. Consequently, our relationships with our customers, suppliers, certain liquidity providers and employees may have been adversely impacted and our operations, currently and going forward, could be materially and adversely affected, such as if we are not extended customary business credit or payment terms.
If we lose key personnel or are unable to attract and retain additional personnel, we may be unable to develop our business.
Our development in the future will be highly dependent on the efforts of key management employees, specifically, Randy Buffington, our Executive Chairman and Chief Executive Officer, Stephen Jones, our Executive Vice President and Chief Financial Officer, and other key employees that we may hire in the future. We will need to recruit and retain other qualified managerial and technical employees to build and maintain our operations. If we are unable to successfully recruit and retain such persons, our development and growth could be significantly curtailed.
We are dependent upon information technology systems, which are subject to disruption, damage, failure and risks associated with implementation and integration.
We are dependent upon information technology systems in the conduct of our operations. Our information technology systems are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks, natural disasters and defects in design. Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, extortion to prevent or the unauthorized release of confidential or otherwise protected information and the corruption of data. Given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to production downtimes, operational delays, extortion, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our cash flows, financial condition or results of operations.
We could also be adversely affected by system or network disruptions if new or upgraded information technology systems are defective, not installed properly or not properly integrated into our operations. System
 
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modification failures could have a material adverse effect on our business, financial position and results of operations and could, if not successfully implemented, adversely impact the effectiveness of our internal controls over financial reporting.
We may be subject to legal proceedings.
Due to the nature of our business, we may be subject to regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of our business. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. We can provide no assurances that these matters will not have a material adverse effect on our business.
For example, our predecessor is currently the subject of a securities class-action lawsuit in Canada, which alleges that our predecessor made false and misleading statements in public disclosures to induce the purported class members to purchase securities at artificially inflated prices. Our predecessor disputes the claims that were brought prior to our filing for federal bankruptcy protection in the chapter 11 cases and will continue to contest such actions.
We are not currently a party to any forward sale or other significant hedging arrangements to protect against gold and silver prices and commodity prices and, as a result, our operating results are exposed to the impact of any significant decrease in the price of gold or silver or any significant increase in commodity prices.
We are not currently a party to any forward sales or other hedging arrangements to reduce the risk of exposure to volatility in commodity prices. Accordingly, our future operations will be exposed to the impact of any significant decrease in gold or silver prices and any significant increase in commodity prices. If such prices adversely change significantly, we will realize reduced revenues and increased costs.
Further, we cannot provide any assurance that the use of hedging techniques will always be to our benefit. Hedging instruments that protect against gold and silver market price volatility may prevent us from realizing the full benefit from subsequent increases in market prices with respect to covered production, which would cause us to record a mark-to-market loss, decreasing our profits. Hedging contracts also are subject to the risk that the other party may be unable or unwilling to perform its obligations under these contracts. Any significant nonperformance could have a material adverse effect on our financial condition, results of operations and cash flows.
Joint ventures and other partnerships may expose us to risks.
In the future, we may enter into joint ventures or other partnership arrangements with other parties in relation to the exploration, development and production of certain properties. Joint ventures can often require unanimous approval of the parties to the joint venture or their representatives for certain fundamental decisions such as an increase or reduction of registered capital, merger, division, dissolution, amendments of constituting documents, and the pledge of joint venture assets, which means that each joint venture party may have a veto right with respect to such decisions which could lead to a deadlock in the operations of the joint venture or partnership. Further, we may be unable to exert control over strategic decisions made in respect of such properties. Any failure of such other companies to meet their obligations to us or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the joint ventures or their properties and therefore could have a material adverse effect on our results of operations, financial performance and cash flows.
The three largest stockholders of HYMC after the business combination will be able to exert significant influence over matters submitted to stockholders for approval, which could delay or prevent a change in corporate control or result in the entrenchment of management or the HYMC Board, possibly conflicting with the interests of our other stockholders.
Mudrick Capital Management LP, an affiliate of MUDS (“Mudrick Capital”), Whitebox Advisors LLC (“Whitebox”), and Highbridge Capital Management LLC, (“Highbridge”) will beneficially own approximately [•]%, [•]% and [•]% of the outstanding shares of HYMC Class A common stock (including shares of
 
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HYMC Class A common stock received upon conversion of the Second Lien Notes and exchange of the 1.5 Lien Notes and the Excess Notes, if any, by each of Mudrick Capital, Whitebox and Highbridge), respectively, upon consummation of the business combination. Because of their significant stockholdings, each of Mudrick Capital, Whitebox and Highbridge could exert significant influence in determining the outcome of corporate actions requiring stockholder approval and otherwise influence the HYMC business. This influence could have the effect of delaying or preventing a change in control of HYMC or entrenching HYMC management or the HYMC Board, which could conflict with the interests of other stockholders and, consequently, could adversely affect the market price of HYMC Class A common stock.
Risks Related to MUDS and the Business Combination
MUDS’ initial stockholders have agreed to vote in favor of the business combination, regardless of how MUDS’ public stockholders vote.
Unlike many other blank check companies in which the initial stockholders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, MUDS’ initial stockholders have agreed to vote any shares of common stock owned by them in favor of the Business Combination Proposal. As of the date hereof, our initial stockholders own shares equal to 43% of MUDS’ issued and outstanding shares of common stock. Accordingly, it is more likely that the necessary stockholder approval will be received for the business combination than would be the case if the initial stockholders agreed to vote any shares of common stock owned by them in accordance with the majority of the votes cast by the public stockholders.
Sponsor, certain members of the MUDS Board and certain of MUDS’ officers have interests in the business combination that are different from or are in addition to those of other MUDS stockholders in recommending that stockholders vote in favor of approval of the Business Combination Proposal and approval of the other proposals described in this joint proxy statement/prospectus.
When considering the MUDS Board’s recommendation that MUDS stockholders vote in favor of the approval of the Business Combination Proposal, MUDS’ stockholders should be aware that sponsor and certain directors and officers of MUDS have interests in the business combination that may be different from, or in addition to, the interests of MUDS’ stockholders. These interests include the fact that investment funds affiliated with and managed by Mudrick Capital, of which Jason Mudrick, Chief Executive Officer and a director of MUDS, is the President and David Kirsch, Vice President and a director of MUDS, is Managing Director, currently hold shares of Seller common stock and First Lien Notes, 1.25 Lien Notes, 1.5 Lien Notes and Second Lien Notes of Seller, and that Mr. Kirsch is a member of the Seller Board. Mr. Kirsch did not participate as a director in meetings or votes of the Seller Board related to Seller’s consideration of the business combination and alternative transactions unless specifically requested to do so after acknowledgement and disclosure of his potential conflicts of interest. See the sections titled “The Business Combination — Interests of Certain Persons in the Business Combination” and “Special Meeting of MUDS Stockholders — Recommendation to MUDS’ Stockholders” for further information.
Sponsor holds a significant number of shares of MUDS common stock. Sponsor will lose its entire investment in MUDS if a business combination is not completed.
Sponsor currently owns 5,200,000 shares of MUDS Class B common stock, representing 43% of the total outstanding shares of MUDS common stock. The MUDS Class B common stock will be worthless if MUDS does not complete an initial business combination by August 12, 2020. In addition, sponsor holds an aggregate of 6,700,000 private placement warrants that will also be worthless if MUDS does not complete a business combination by August 12, 2020. The personal and financial interests of sponsor may have influenced its motivation in completing the business combination and influencing the operating of HYMC after the business combination has been consummation.
Sponsor, MUDS’ directors or officers or their affiliates may elect to purchase shares from public stockholders, which may influence a vote on a proposed business combination and reduce the public “float” of MUDS Class A common stock.
Sponsor, MUDS’ directors or executive officers or their affiliates may purchase shares in privately negotiated transactions or in the open market either prior to or following the completion of the business
 
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combination, although they are under no obligation to do so. Such a purchase may include a contractual acknowledgment that such stockholder, although still the record holder of shares of MUDS Class A common stock, is no longer the beneficial owner thereof and therefore agrees not to exercise its redemption rights. In the event that sponsor, MUDS’ directors, officers or their affiliates purchase shares in privately negotiated transactions from public stockholders who have already elected to exercise their redemption rights, such selling stockholders would be required to revoke their prior elections to redeem their shares. The purpose of such purchases could be to vote such shares in favor of the business combination and thereby increase the likelihood of obtaining stockholder approval of the business combination or to satisfy closing conditions in the Purchase Agreement regarding unrestricted and available cash prior to and following the consummation of the business combination where it appears that such requirements would otherwise not be met. This may result in the completion of the business combination that may not otherwise have been possible.
If MUDS is unable to complete an initial business combination, public stockholders may receive only approximately $10.10 per share on the liquidation of the trust account (or less than $10.10 per share in certain circumstances where a third party brings a claim against MUDS that sponsor is unable to indemnify), and MUDS’ warrants will expire worthless.
If MUDS is unable to complete an initial business combination by August 12, 2020, public stockholders may receive only approximately $10.10 per share on the liquidation of the trust account (or less than $10.10 per share in certain circumstances where a third-party brings a claim against MUDS that sponsor is unable to indemnify (as described herein)) and the MUDS’ warrants will expire worthless.
If third parties bring claims against MUDS, the proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than $10.10 per share.
MUDS’ placing of funds in the trust account may not protect those funds from third-party claims against it. Although MUDS will seek to have all vendors, service providers (other than MUDS’ independent auditors), prospective target businesses or other entities with which MUDS does business execute agreements with it waiving any right, title, interest or claim of any kind in or to any funds held in the trust account for the benefit of public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against MUDS’ assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the funds held in the trust account, MUDS’ management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to it than any alternative.
Examples of possible instances where MUDS may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with MUDS and will not seek recourse against the trust account for any reason. Upon redemption of public shares, if MUDS is unable to complete the business combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with the business combination, MUDS will be required to provide for payment of claims of creditors that were not waived that may be brought against it within the ten years following redemption. Accordingly, the per-share redemption amount received by public shareholders could be less than the $10.10 per share initially held in the trust account, due to claims of such creditors. Sponsor has agreed that it will be liable to MUDS if and to the extent any claims by a vendor for services rendered or products sold to MUDS, or a prospective target business with which MUDS has discussed entering into a business combination agreement, reduce the amount of funds in the trust account to below (i) $10.10 per public share or (ii) such lesser amount per public share held in the trust account as of the date of the liquidation of the trust account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver of any and
 
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all rights to seek access to the trust account and except as to any claims under indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, sponsor will not be responsible to the extent of any liability for such third party claims. MUDS has not independently verified whether sponsor has sufficient funds to satisfy its indemnity obligations and MUDS has not asked the sponsor to reserve for such indemnification obligations.
MUDS directors may decide not to enforce the indemnification obligation of sponsor, resulting in a reduction in the amount of funds in the trust account available for distribution to public stockholders.
In the event that the proceeds in the trust account are reduced below the lesser of  (i) $10.10 per share and (ii) the actual amount per share held in the trust account as of the date of the liquidation of the trust account if less than $10.10 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and sponsor asserts that it is unable to satisfy its obligation or that it has no indemnification obligations related to a particular claim, MUDS’ independent directors would determine whether to take legal action against sponsor to enforce its indemnification obligations. While MUDS currently expects that its independent directors would take legal action on MUDS’ behalf against sponsor to enforce its indemnification obligations to us, it is possible that MUDS’ independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance. If MUDS’ independent directors choose not to enforce these indemnification obligations, the amount of funds in the trust account available for distribution to public stockholders may be reduced below $10.10 per share.
If, before distributing the proceeds in the trust account to public stockholders, MUDS files a bankruptcy petition or an involuntary bankruptcy petition is filed against MUDS that is not dismissed, the claims of creditors of such proceeding may have priority over the claims of MUDS stockholders and the per-share amount that would otherwise be received by MUDS stockholders in connection with MUDS liquidation may be reduced.
If, before distributing the proceeds in the trust account to public stockholders, MUDS files a bankruptcy petition or an involuntary bankruptcy petition is filed against MUDS that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in MUDS bankruptcy estate and subject to the claims of third parties with priority over the claims of MUDS stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by MUDS stockholders in connection with MUDS liquidation may be reduced.
If, after MUDS distributes the proceeds in the trust account to its public stockholders, MUDS files a bankruptcy petition or an involuntary bankruptcy petition is filed against MUDS that is not dismissed, a bankruptcy court may seek to recover such proceeds, and MUDS and the MUDS Board may be exposed to claims of punitive damages.
If, after MUDS distributes the proceeds in the trust account to its public stockholders, MUDS files a bankruptcy petition or an involuntary bankruptcy petition is filed against MUDS that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by MUDS’ stockholders. In addition, the MUDS Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.
The sponsor, officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if a business combination is not completed.
At the closing of the business combination, the sponsor, executive officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses incurred in connection with activities on MUDS’ behalf, such as identifying potential target businesses and performing due diligence on suitable business combinations. There is no cap or ceiling on the reimbursement of out-of-pocket expenses
 
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incurred in connection with activities on MUDS’ behalf. The personal and financial interests of the sponsor, executive officers and directors may influence their motivation in identifying and selecting a target business combination and completing the business combination.
MUDS’ stockholders will experience dilution as a consequence of, among other transactions, the issuance of HYMC Class A common stock as consideration in the business combination, the private investment, the forward purchase, the underwriting commission issuance and the lender issuance. Having a minority share position may reduce the influence that MUDS’ current stockholders have on the management of MUDS.
It is anticipated that, upon completion of the business combination (assumed to be April 30, 2020): (i) MUDS’ public stockholders will retain approximately 1.9% of HYMC; (ii) sponsor will own approximately 9.5% of HYMC, including shares and units issued in connection with the Forward Purchase Contract (after giving effect to the surrender of shares of Class B common stock in connection with the Parent Sponsor Letter Agreement); (iii) the Initial Subscriber will own approximately 83.9% of HYMC as a result of (x) the private investment and (y) such investors’ ownership of 1.5 Lien Notes, Excess Notes and Second Lien Notes of Seller, (iv) the Seller stockholders (excluding any Initial Subscribers, including in their capacity as Second Lien Noteholders) will own approximately 1.2% of HYMC; (v) Cantor will own approximately 0.5% as a result of the underwriting commission issuance; (vi) Lender will own approximately 1% as a result of the lender issuance pursuant to the Sprott Credit Agreement; and (vii) approximately 2% of HYMC will be issued in an incremental equity investment. The ownership percentages of HYMC following the business combination (a) exclude (1) the shares of HYMC Class A common stock issuable upon the exercise of warrants that will remain outstanding following the business combination and (2) any shares of HYMC Class A common stock issuable upon the conversion of mirror replacement equity awards issued to holders of outstanding Seller equity awards in connection with the business combination, and (b) assume (1) all but approximately 964,320 shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders, (2) the issuance of 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers in the private placement, for aggregate gross proceeds of  $65,000,000, (3) the issuance of 1,000,000 shares of HYMC Class A common stock in an incremental equity investment, for aggregate gross proceeds of $10,000,000, (4) that there is no Cash Available for Payment in connection with the consummation of the exchange and that the consideration in the exchange is comprised entirely of the Excess Notes Share Payment and the 1.5 Lien Share Payment, (5) the consummation of the transactions contemplated by the Parent Sponsor Letter Agreement, including the share surrender, on the basis of the assumptions set forth in clause (2) hereof with respect to the private investment, resulting in the surrender of approximately 3,584,615 shares of MUDS Class B common stock, (6) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (1) and (2) hereof, shall result in the issuance of approximately 235,744 shares of HYMC Class A common stock and (7) that approximately 50,020,315 shares of HYMC Class A common stock are outstanding immediately after consummation of the business combination. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” See the section titled “The Purchase Agreement and Related Agreements — Related Agreements” beginning on page [•] of this joint proxy statement/prospectus for further details regarding the exchange, the private investment, the forward purchase and the underwriting commission issuance.
The Class A common stock and public warrants are currently listed on NASDAQ and will be listed on NASDAQ following the business combination. MUDS’ continued eligibility for listing may depend on, among other things, the number of public shares that are redeemed. There can be no assurance that HYMC will be able to comply with the continued listing standards of NASDAQ. If, after the business combination, NASDAQ delists HYMC Class A common stock from trading on its exchange for failure to meet the listing standards, HYMC’s stockholders could face significant material adverse consequences including:

a limited availability of market quotations for HYMC’s securities;

reduced liquidity for HYMC’s securities;

a determination that HYMC Class A common stock is a “penny stock” which will require brokers trading in HYMC Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for HYMC’s securities;

a limited amount of news and analyst coverage; and
 
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a decreased ability to issue additional securities or obtain additional financing in the future.
The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because MUDS Class A common stock and public warrants are listed on NASDAQ, they are covered securities. Although the states are preempted from regulating the sale of MUDS’ securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. While MUDS is not aware of a state, other than the state of Idaho, having used these powers to prohibit or restrict the sale of securities issued by blank check companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states. Further, if the shares were no longer listed on NASDAQ, MUDS’ securities would not be covered securities and MUDS would be subject to regulation in each state in which MUDS offers securities.
A significant portion of HYMC Class A common stock following the business combination will be restricted from immediate resale, but may be sold into the market in the future. This could cause the market price of HYMC Class A common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of common stock in the public market could occur at any time following the consummation of the business combination. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of HYMC Class A common stock.
It is anticipated that, upon completion of the business combination (assumed to be April 30, 2020): (i) MUDS’ public stockholders will retain approximately 1.9% of HYMC; (ii) sponsor will own approximately 9.5% of HYMC, including shares and units issued in connection with the Forward Purchase Contract (after giving effect to the surrender of shares of Class B common stock in connection with the Parent Sponsor Letter Agreement); (iii) the Initial Subscribers will own approximately 83.9% of HYMC as a result of (x) the private investment and (y) such investors’ ownership of 1.5 Lien Notes, Excess Notes and Second Lien Notes of Seller, (iv) the Seller stockholders (excluding any Initial Subscribers, including in their capacity as Second Lien Noteholders) will own approximately 1.2% of HYMC; (v) Cantor will own approximately 0.5% as a result of the underwriting commission issuance; (vi) Lender will own approximately 1% as a result of the lender issuance pursuant to the Sprott Credit Agreement; and (vii) approximately 2% of HYMC will be issued in an incremental equity investment. The ownership percentages of HYMC following the business combination (a) exclude (1) the shares of HYMC Class A common stock issuable upon the exercise of warrants that will remain outstanding following the business combination and (2) any shares of HYMC Class A common stock issuable upon the conversion of mirror replacement equity awards issued to holders of outstanding Seller equity awards in connection with the business combination, and (b) assume (1) all but approximately 964,320 shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders, (2) the issuance of 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers in the private placement, for aggregate gross proceeds of  $65,000,000, (3) the issuance of 1,000,000 shares of HYMC Class A common stock in an incremental equity, for aggregate gross proceeds of  $10,000,000, (4) that there is no Cash Available for Payment in connection with the consummation of the exchange and that the consideration in the exchange is comprised entirely of the Excess Notes Share Payment and the 1.5 Lien Share Payment, (5) the consummation of the transactions contemplated by the Parent Sponsor Letter Agreement, including the share surrender, on the basis of the assumptions set forth in clause (2) hereof with respect to the private investment, resulting in the surrender of approximately 3,584,615 shares of MUDS Class B common stock, (6) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (1) and (2) hereof, shall result in the issuance of approximately 235,744 shares of HYMC Class A common stock and (7) that approximately 50,020,315 shares of HYMC Class A common stock are outstanding immediately after consummation of the business combination. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
Our initial stockholders have agreed not to transfer, assign or sell any of their founder shares until the earlier to occur of: (A) one year after the completion of our initial business combination or (B) subsequent
 
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to our initial business combination, (x) if the last sale price of HYMC Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 180 days after our initial business combination or (y) the date on which we complete a liquidation, merger, share exchange, reorganization or other similar transaction after our initial business combination that results in all of our public stockholders having the right to exchange their shares of common stock for cash, securities or other property, with certain restrictions. As restrictions on resale end, the market price of HYMC Class A common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.
MUDS has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement. As such, there is a risk that MUDS will be unable to continue as a going concern if MUDS does not consummate an initial business combination by August 12, 2020. If MUDS is unable to effect a business combination by August 12, 2020, MUDS will be forced to liquidate and its warrants will expire worthless.
MUDS is a blank check company, and as MUDS has no operating history and is subject to a mandatory liquidation and subsequent dissolution requirement, there is a risk that it will be unable to continue as a going concern if MUDS does not consummate an initial business combination by August 12, 2020. If MUDS does not complete an initial business combination by August 12, 2020, it will: (i) cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest not previously released to MUDS to fund its franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of MUDS’ remaining stockholders and the MUDS Board, dissolve and liquidate, subject in each case to our obligations under the DGCL to provide for claims of creditors and the requirements of other applicable law. In the event of such distribution, it is possible that the per share value of the residual assets remaining available for distribution (including trust account assets) will be less than the initial public offering price per public unit in the IPO. In addition, if MUDS fails to complete an initial business combination by August 12, 2020, there will be no redemption rights or liquidating distributions with respect to MUDS public warrants or the private placement warrants, which will expire worthless.
MUDS and Seller have incurred and expect to incur significant costs associated with the business combination. Whether or not the business combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by MUDS if the business combination is not completed.
MUDS and Seller expect to incur significant costs associated with the business combination. Even if the business combination is not completed, MUDS expects to incur approximately $[•] million in unreimbursed expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by MUDS if the business combination is not completed.
Even if MUDS consummates the business combination, there is no guarantee that the public warrants will ever be in the money, and they may expire worthless and the terms of MUDS’ warrants may be amended.
The exercise price for MUDS public warrants is $11.50 per shares of MUDS Class A common stock. There is no guarantee that the public warrants will ever be in the money prior to their expiration, and as such, the warrants may expire worthless.
MUDS’ ability to successfully effect the business combination and to be successful thereafter will be dependent upon the efforts of MUDS’ key personnel, including the key personnel of the Hycroft business whom MUDS expects to stay with the Hycroft business following the business combination. The loss of key personnel could negatively impact the operations and profitability of HYMC’s post-combination business and its financial condition could suffer as a result.
MUDS’ ability to successfully effect the business combination is dependent upon the efforts of certain key personnel, including the key personnel of the Hycroft business. Although some of MUDS’ key personnel
 
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may remain with HYMC in advisory positions following the business combination, it is possible that HYMC will lose some key personnel, the loss of which could negatively impact the operations and profitability of HYMC’s post-combination business. HYMC anticipates that all of the management of the Hycroft business will remain in place.
HYMC’s success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. Departure by certain of the Hycroft business’ officers could have a material adverse effect on HYMC’s business, financial condition, or operating results. Seller does not maintain key-man life insurance on any of its officers. The services of such personnel may not continue to be available to HYMC.
MUDS and the Hycroft business will be subject to business uncertainties and contractual restrictions while the business combination is pending.
Uncertainty about the effect of the business combination on employees and third parties may have an adverse effect on MUDS and the Hycroft business. These uncertainties may impair MUDS or the Hycroft business’ ability to retain and motivate key personnel and could cause third parties that deal with any of us or them to defer entering into contracts or making other decisions or seek to change existing business relationships. If key employees depart because of uncertainty about their future roles and the potential complexities of the business combination, MUDS or the Hycroft business could be harmed.
MUDS may waive one or more of the conditions to the business combination.
MUDS may agree to waive, in whole or in part, one or more of the conditions to MUDS’ obligations to complete the business combination, to the extent permitted by MUDS’ current certificate of incorporation and bylaws and applicable laws. For example, it is a condition to MUDS’ obligations to close the business combination that Seller have performed and complied in all material respects with the obligations required to be performed or complied with by Seller under the Purchase Agreement. However, if the MUDS Board determines that a breach of this obligation is not material, then the MUDS Board may elect to waive that condition and close the business combination. MUDS may not waive the condition that MUDS stockholders approve the business combination. Please see the section entitled “The Purchase Agreement and Related Agreements — Conditions to Closing of the Business Combination” for additional information.
The exercise of discretion by MUDS’ directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Purchase Agreement may result in a conflict of interest when determining whether such changes to the terms of the Purchase Agreement or waivers of conditions are appropriate and in the best interests of MUDS’ stockholders.
In the period leading up to the consummation of the business combination, other events may occur that, pursuant to the Purchase Agreement, would require MUDS to agree to amend the Purchase Agreement, to consent to certain actions or to waive rights that it is entitled to under those agreements. Such events could arise because of changes in the course of the Hycroft business, a request by Seller or Seller’s management to undertake actions that would otherwise be prohibited by the terms of the Purchase Agreement or the occurrence of other events that would have a material adverse effect on the Hycroft business and would entitle MUDS to terminate the Purchase Agreement. In any of such circumstances, it would be in the discretion of MUDS, acting through the MUDS Board, to grant its consent or waive its rights. The existence of the financial and personal interests of the directors described elsewhere in this joint proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for MUDS and MUDS stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action. As of the date of this joint proxy statement/prospectus, MUDS does not believe there will be any changes or waivers that MUDS’ directors and officers would be likely to make after stockholder approval of the business combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the business combination that would have a material impact on the stockholders, MUDS will be required to circulate a new or amended joint proxy statement/prospectus or supplement thereto and resolicit the vote of MUDS’ stockholders with respect to the Business Combination Proposal.
 
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MUDS will incur significant transaction and transition costs in connection with the business combination.
MUDS has incurred and expects to incur significant, non-recurring and unreimbursable costs in connection with consummating the business combination and operating as a public company following the consummation of the business combination. MUDS may incur additional costs to retain key employees. Except for $[•] million in expenses reimbursable by Seller pursuant to the Reimbursement and Exclusivity Agreement, all expenses incurred in connection with the Purchase Agreement and the transactions contemplated thereby, including all legal, accounting, consulting, investment banking and other fees, expenses and costs, will be for the account of the party incurring such fees, expenses and costs.
MUDS’ unreimbursed transaction expenses as a result of the business combination are currently estimated at approximately $[•] million.
If MUDS is unable to complete an initial business combination, MUDS’ warrants may expire worthless.
If MUDS is unable to complete an initial business combination, MUDS’ warrants may expire worthless.
If MUDS’ due diligence investigation of the Hycroft business was inadequate, then stockholders of HYMC following the business combination could lose some or all of their investment.
Even though MUDS conducted a due diligence investigation of the Hycroft business, MUDS cannot be sure that this diligence uncovered all material issues that may be present inside the Hycroft business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the Hycroft business and outside of its control will not later arise.
Following the consummation of the business combination, HYMC’s only significant asset will be its ownership interest in the Hycroft business and such ownership may not be sufficiently profitable or valuable to enable HYMC to pay any dividends on HYMC Class A common stock or satisfy HYMC’s other financial obligations.
Following the consummation of the business combination, HYMC will have no direct operations and no significant assets other than its ownership interest in the Hycroft business. HYMC will depend on the Hycroft business for distributions, loans and other payments to generate the funds necessary to meet its financial obligations, including its expenses as a publicly traded company and to pay any dividends with respect to HYMC Class A common stock. Obligations under the Sprott Credit Agreement, the Sprott Royalty Agreement and the Assumed New Subordinated Notes and the financial condition and operating requirements of the Hycroft business may limit HYMC’s ability to obtain cash from the Hycroft business. The earnings from, or other available assets of, the Hycroft business may not be sufficient to pay dividends or make distributions or loans to enable HYMC to pay any dividends on the common stock or satisfy its other financial obligations.
See the sections titled “MUDS’ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources,” “Seller’s Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources,” and “Description of Certain Indebtedness” beginning on pages [•], [•] and [•], respectively, of this joint proxy statement/​prospectus for more information
The HYMC charter that will be effective following the completion of the business combination designate the Court of Chancery of the State of Delaware, to the fullest extent permitted by law, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by HYMC stockholders, which could limit the ability of HYMC stockholders to obtain a favorable judicial forum for disputes with HYMC or with directors, officers or employees of HYMC and may discourage stockholders from bringing such claims.
Under the HYMC charter that will be effective following the completion of the business combination, unless HYMC consents in writing to the selection of an alternative forum, the sole and exclusive forum will be the Court of Chancery of the State of Delaware for:

any derivative action or proceeding brought on behalf of HYMC;

any action asserting a claim of breach of a fiduciary duty owed by, or any wrongdoing by, any director, officer or employee of HYMC to HYMC or HYMC’s stockholders;
 
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any action asserting a claim arising pursuant to any provision of the DGCL, the certificate of incorporation (including as it may be amended from time to time), or the bylaws;

any action to interpret, apply, enforce or determine the validity of the certificate of incorporation or the bylaws; or

any action asserting a claim governed by the internal affairs doctrine, in each case, except for, (1) any action as to which the Court of Chancery determines that there is an indispensable party not subject to the personal jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten (10) days following such determination) and (2) any action asserted under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or, in each case, the rules and regulations promulgated thereunder, for which federal courts have exclusive jurisdiction.
These provisions of the HYMC charter could limit the ability of HYMC stockholders to obtain a favorable judicial forum for certain disputes with HYMC or with its directors, officers or other employees, which may discourage such lawsuits against HYMC and its directors, officers and employees. Alternatively, if a court were to find these provisions of the HYMC charter inapplicable to, or unenforceable in respect of, one or more of the types of actions or proceedings listed above, HYMC may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition and results of operations.
Sponsor and the Initial Subscribers will beneficially own a significant equity interest in HYMC and may take actions that conflict with your interests.
The interests of sponsor and the Initial Subscribers may not align with the interests of HYMC and its other stockholders. Sponsor and the Initial Subscribers are each in the business of making investments in companies and may acquire and hold interests in businesses that compete directly or indirectly with HYMC. Sponsor and the Initial Subscribers, and their respective affiliates, may also pursue acquisition opportunities that may be complementary to HYMC’s business and, as a result, those acquisition opportunities may not be available to us. HYMC’s proposed charter provides that the Initial Subscribers may engage in competitive businesses and renounces any entitlement to certain corporate opportunities offered to the Initial Subscribers or any of their managers, officers, directors, equity holders, members, principals, affiliates and subsidiaries (other than HYMC and its subsidiaries) that are not expressly offered to them in their capacities as directors or officers of HYMC. The proposed charter also provides that the Initial Subscribers or any of their managers, officers, directors, equity holders, members, principals, affiliates and subsidiaries (other than HYMC and its subsidiaries), do not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as HYMC or any of its subsidiaries.
Subsequent to the completion of the business combination, HYMC may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on HYMC’s financial condition, results of operations and HYMC’s stock price, which could cause you to lose some or all of your investment.
Although MUDS has conducted due diligence on the Hycroft business, MUDS cannot assure you that this diligence will surface all material issues that may be present in such business, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the Hycroft business and outside of MUDS’ and Seller’s control will not later arise. As a result of these factors, HYMC may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in losses. Even if MUDS’ due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with MUDS’ preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on HYMC’s liquidity, the fact that HYMC charges of this nature could contribute to negative market perceptions about HYMC or its securities. Accordingly, any of MUDS’ stockholders who choose to remain stockholders of HYMC following the business combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by MUDS’ officers or fiduciary duty owed to them, or if they are able to successfully bring a private claim under securities laws that this joint
 
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proxy statement/prospectus relating to the business combination contained an actionable material misstatement or material omission.
MUDS has no operating or financial history and MUDS’ results of operations may differ significantly from the unaudited pro forma financial data included in this joint proxy statement/prospectus.
MUDS is a blank check company and MUDS has no operating history and no revenues. This joint proxy statement/prospectus includes unaudited pro forma condensed combined financial statements for MUDS. The unaudited pro forma condensed combined statement of operations of MUDS combines the historical audited results of operations of MUDS for the year ended December 31, 2018, with the historical audited results of operations of Seller for the year ended December 31, 2018, and gives pro forma effect to the business combination as if it had been consummated on January 1, 2018. The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2019 combines the unaudited historical consolidated statement of operations of Seller for the nine months ended September 30, 2019 with the unaudited historical statement of operations of MUDS for the nine months ended September 30, 2019, giving effect to the business combination as if it had occurred as of the beginning of the earliest period presented. The unaudited pro forma condensed combined balance sheet of MUDS combines the historical balance sheets of MUDS as of September 30, 2019 and of Seller as of September 30, 2019 and gives pro forma effect to the business combination as if it had been consummated on September 30, 2019.
The unaudited pro forma condensed combined financial statements are presented for illustrative purposes only, are based on certain assumptions, address a hypothetical situation and reflect limited historical financial data. Therefore, the unaudited pro forma condensed combined financial statements are not necessarily indicative of the results of operations and financial position that would have been achieved had the business combination been consummated on the dates indicated above, or the future consolidated results of operations or financial position of MUDS. Accordingly, MUDS’ business, assets, cash flows, results of operations and financial condition may differ significantly from those indicated by the unaudited pro forma condensed combined financial statements included in this document. For more information, please see the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.”
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of HYMC’s income or other tax returns could adversely affect HYMC’s financial condition and results of operations.
HYMC will be subject to income taxes in the United States, and HYMC’s domestic tax liabilities will be subject to the allocation of expenses in differing jurisdictions. HYMC’s future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

changes in the valuation of HYMC’s deferred tax assets and liabilities;

expected timing and amount of the release of any tax valuation allowances;

tax effects of stock-based compensation;

costs related to intercompany restructurings;

changes in tax laws, regulations or interpretations thereof; and

lower than anticipated future earnings in jurisdictions where HYMC has lower statutory tax rates and higher than anticipated future earnings in jurisdictions where HYMC has higher statutory tax rates.
In addition, HYMC may be subject to audits of HYMC’s income, sales and other taxes by U.S. federal, state, local and non-U.S. taxing authorities. Outcomes from these audits could have an adverse effect on HYMC’s financial condition and results of operations.
A market for HYMC’s securities may not continue, which would adversely affect the liquidity and price of HYMC’s securities.
Following the business combination, the price of HYMC’s securities may fluctuate significantly due to the market’s reaction to the business combination and general market and economic conditions. An active
 
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trading market for HYMC’s securities following the business combination may never develop or, if developed, it may not be sustained. In addition, the price of HYMC’s securities after the business combination can vary due to general economic conditions and forecasts, HYMC’s general business condition and the release of HYMC’s financial reports. Additionally, if HYMC’s securities become delisted from NASDAQ for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of HYMC’s securities may be more limited than if HYMC was quoted or listed on NASDAQ or another national securities exchange. You may be unable to sell your securities unless a market can be established or sustained.
If the business combination’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of HYMC’s securities may decline.
If the benefits of the business combination do not meet the expectations of investors, stockholders or securities analysts, the market price of MUDS’ securities following the consummation of the business combination may decline. The market values of MUDS’ securities at the time of the business combination may vary significantly from their prices on the date the Purchase Agreement was executed, the date of this joint proxy statement/prospectus, or the date on which MUDS’ stockholders vote on the business combination.
In addition, following the business combination, fluctuations in the price of HYMC’s securities could contribute to the loss of all or part of your investment. Immediately prior to the business combination, there has not been a public market for Seller’s stock and trading in shares of MUDS Class A common stock has not been active. Accordingly, the valuation ascribed to the Hycroft business and MUDS Class A common stock in the business combination may not be indicative of the price that will prevail in the trading market following the business combination.
The trading price of the HYMC Class A common stock following the business combination may fluctuate substantially and may be lower than current price. This may be especially true for companies like ours with a small public float. If an active market for HYMC’s securities develops and continues, the trading price of HYMC’s securities following the business combination could be volatile and subject to wide fluctuations. The trading price of the HYMC Class A common stock following the business combination will depend on many factors, including those described in this “Risk Factors” section, many of which are beyond HYMC’s control and may not be related to HYMC’s operating performance. These fluctuations could cause you to lose all or part of your investment in the HYMC Class A common stock since you might be unable to sell your shares at or above the price attributed to them in the business combination. Any of the factors listed below could have a material adverse effect on your investment in HYMC’s securities and HYMC’s securities may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of HYMC’s securities may not recover and may experience a further decline.
Factors affecting the trading price of HYMC securities following the business combination may include:

actual or anticipated fluctuations in HYMC’s quarterly financial results or the quarterly financial results of companies perceived to be similar to HYMC;

changes in the market’s expectations about HYMC’s operating results;

the public’s reaction to HYMC’s press releases, HYMC’s other public announcements and HYMC’s filings with the SEC;

speculation in the press or investment community;

actual or anticipated developments in the HYMC business or HYMC’s competitors’ businesses or the competitive landscape generally;

the operating results failing to meet the expectation of securities analysts or investors in a particular period;

changes in financial estimates and recommendations by securities analysts concerning HYMC or the market in general;
 
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operating and stock price performance of other companies that investors deem comparable to HYMC;

changes in laws and regulations affecting HYMC’s business;

commencement of, or involvement in, litigation involving HYMC;

changes in HYMC’s capital structure, such as future issuances of securities or the incurrence of additional debt;

the volume of HYMC Class A common stock available for public sale;

any major change in the HYMC Board or management;

sales of substantial amounts of HYMC Class A common stock by HYMC’s directors, officers or significant stockholders or the perception that such sales could occur;

general economic and political conditions such as recessions, interest rates, “trade wars,” reductions in precious metals prices, increases in fuel and other commodity prices used in the operation of the Hycroft business, currency fluctuations and acts of war or terrorism; and

other risk factors listed under “Risk Factors” starting on page [•].
Broad market and industry factors may materially harm the market price of HYMC’s securities irrespective of HYMC’s operating performance. The stock market in general and NASDAQ have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of HYMC’s securities, may not be predictable. A loss of investor confidence in the market for the stocks of other companies which investors perceive to be similar to HYMC’s could depress HYMC’s stock price regardless of HYMC’s business, prospects, financial conditions or results of operations. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of the HYMC Class A common stock, regardless of HYMC’s actual operating performance. These fluctuations may be even more pronounced in the trading market for our stock shortly following the business combination. A decline in the market price of HYMC’s securities also could adversely affect HYMC’s ability to issue additional securities and HYMC’s ability to obtain additional financing in the future.
In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.
HYMC’s quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to mining volatility and other factors, some of which are beyond HYMC’s control, resulting in a decline in HYMC’s stock price.
HYMC’s quarterly operating results may fluctuate significantly because of several factors, including:

volatility in gold and silver commodity prices and in the market prices and trading volumes of gold mining stocks;

changes in operating performance, including gold and silver production not meeting targets and challenges to our ability to economically and profitably recover gold and silver through heap leaching of transition and sulfide ores, and stock market valuations of other mining companies generally, or those in our industry in particular;

gold and silver grades;

increases in commodities prices, including diesel, cyanide, lime, and tires;

macroeconomic conditions and uncertainties, including international, national and local conditions and uncertainties;
 
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labor availability and costs for hourly and management personnel;

weather or other natural occurrences that adversely impact HYMC’s heap leaching operations;

work stoppages or strikes;

impairment of long-lived assets;

negative publicity relating to our operations;

litigation involving us;

developments or disputes concerning our mining rights;

loss of any permit or license necessary for mining operations;

new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

changes in accounting standards, policies, guidelines, interpretations or principles;

any major change in our management; and

other events or factors, including those resulting from natural disasters, war, incidents of terrorism or responses to these events.
If, following the business combination, securities or industry analysts do not publish or cease publishing research or reports about HYMC, its business, or its market, or if they change their recommendations regarding HYMC Class A common stock adversely, then the price and trading volume of HYMC Class A common stock could decline.
The trading market for HYMC Class A common stock will be influenced by the research and reports that industry or securities analysts may publish about us, HYMC’s business and operations, HYMC’s market, or HYMC’s competitors. Securities and industry analysts do not currently, and may never, publish research on MUDS or HYMC. If no securities or industry analysts commence coverage of HYMC, HYMC’s stock price and trading volume would likely be negatively impacted. If any of the analysts who may cover HYMC change their recommendation regarding HYMC’s stock adversely, or provide more favorable relative recommendations about HYMC’s competitors, the price of HYMC Class A common stock would likely decline. If any analyst who may cover MUDS were to cease coverage of HYMC or fail to regularly publish reports on it, we could lose visibility in the financial markets, which could cause HYMC’s stock price or trading volume to decline.
There is no guarantee that an active and liquid public market for shares of the HYMC Class A common stock will develop.
Prior to the business combination, MUDS was a blank check company and there has not been a public market for shares of Seller common stock since Seller’s predecessor was delisted on March 9, 2015. The price of the HYMC Class A common stock was determined in negotiations between MUDS and Seller and may not be indicative of prices that will prevail in the trading market. The gold and silver mining industry has been highly unpredictable and volatile, and the market for the HYMC Class A common stock may be equally volatile. A liquid trading market for the HYMC Class A common stock may never develop.
In the absence of a liquid public trading market:

you may not be able to liquidate your investment in shares of the HYMC Class A common stock;

you may not be able to resell your shares of the HYMC Class A common stock at or above the price attributed to them in the business combination;

the market price of shares of the HYMC Class A common stock may experience significant price volatility; and

there may be less efficiency in carrying out your purchase and sale orders.
 
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HYMC may be unable to obtain additional financing to fund its operations or growth.
HYMC may require additional financing to fund its operations or growth. The failure to secure additional financing could have a material adverse effect on the continued development or growth of HYMC. None of MUDS’ officers, directors or stockholders will be obligated to provide any financing to us after the business combination.
Changes in laws, regulations or rules, or a failure to comply with any laws, regulations or rules, may adversely affect HYMC’s business, investments and results of operations.
HYMC will be subject to laws, regulations and rules enacted by national, regional and local governments and NASDAQ. In particular, HYMC will be required to comply with certain SEC, NASDAQ and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations or rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on HYMC’s business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material adverse effect on HYMC’s business and results of operations.
Registration of the HYMC Class A common stock underlying the MUDS public warrants may not be in place when an investor desires to exercise such warrants, thus precluding such investor from being able to exercise its public warrants except on a cashless basis and potentially causing such warrants to expire worthless.
MUDS has not registered the HYMC Class A common stock issuable upon exercise of the public warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, MUDS has agreed, as soon as practicable, but in no event later than 15 business days after the consummation of the business combination, to use its best efforts to file a registration statement under the Securities Act covering such HYMC Class A common stock and maintain a current prospectus relating to the HYMC Class A common stock issuable upon exercise of the public warrants, until the expiration of the public warrants in accordance with the provisions of the warrant agreement. MUDS cannot assure you that it will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in such registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the warrants are not registered under the Securities Act, HYMC will be required to permit holders to exercise their warrants on a cashless basis. However, no warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption is available. Notwithstanding the above, if HYMC Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at HYMC’s option, require holders of warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, but we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any warrant, or issue securities or other compensation in exchange for the warrants in the event that we are unable to register or qualify the shares underlying the warrants under applicable state securities laws. If the issuance of the shares of HYMC Class A common stock upon exercise of the warrants is not so registered or qualified or exempt from registration or qualification, the holder of such warrant shall not be entitled to exercise such warrant and such warrant may have no value and expire worthless. In such event, holders who acquired their warrants as part of a purchase of public units will have paid the full unit purchase price solely for the HYMC Class A common stock included in the units. If and when the warrants become redeemable by us, HYMC may exercise its redemption right even if HYMC is unable to register or qualify the underlying HYMC Class A common stock for sale under all applicable state securities laws.
 
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HYMC may amend the terms of the public warrants in a manner that may be adverse to holders with the approval by the holders of at least 65% of the then-outstanding warrants.
MUDS public warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and MUDS. The warrant agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then-outstanding public warrants to make any change that adversely affects the interests of the registered holders. Accordingly, HYMC may amend the terms of the warrants in a manner adverse to a holder if holders of at least 65% of the then-outstanding public warrants approve of such amendment. Although HYMC’s ability to amend the terms of the warrants with the consent of at least 65% of the then-outstanding public warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the warrants, shorten the exercise period or decrease the number of shares of HYMC Class A common stock purchasable upon exercise of a public warrant.
HYMC may redeem your unexpired public warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless.
HYMC will have the ability to redeem outstanding public warrants at any time after they become exercisable and prior to their expiration, at a price of  $0.01 per warrant, provided that the closing price of HYMC Class A common stock equals or exceeds $18.00 per share (as adjusted for share splits, share capitalizations, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to proper notice of such redemption provided that on the date we give notice of redemption. If and when the public warrants become redeemable, HYMC may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Redemption of the outstanding public warrants could force you to (i) exercise your public warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your public warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value of your warrants. None of the private placement warrants will be redeemable by us so long as they are held by sponsor, Cantor or their permitted transferees.
The exercise of outstanding MUDS public warrants would increase the number of shares eligible for future resale in the public market and result in dilution to stockholders.
MUDS issued public warrants to purchase 20,800,000 shares of Class A common stock as part of the IPO and in connection with the exercise of the over-allotment option and private placement warrants to purchase 7,740,000 shares of Class A common stock, in each case at $11.50 per share. In addition, nothing prevents MUDS from issuing additional securities in a private placement prior to the consummation of the business combination as long as they do not participate in any manner in the trust account or vote as a class with the common stock on the business combination. MUDS expects to issue (i) up to 19,026,327 shares of HYMC Class A common stock to the 1.5 Lienholders and Excess Noteholders in the exchange, (ii) up to 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers, subject to reduction as described elsewhere in this joint proxy statement/prospectus, and 3,250,000 PIPE warrants in connection with the private investment, (iii) 625,000 shares of HYMC Class A common stock and 2,500,000 units to sponsor in connection with the forward purchase, (iv) 1,000,000 shares of HYMC Class A common stock in an incremental equity investment, (v) a number of shares of HYMC Class A common stock to Lender equal to 1% of HYMC’s post-closing shares outstanding pursuant to the Sprott Credit Agreement and (vi) up to 478,000 shares of HYMC Class A common stock to Cantor in the underwriting commission issuance, in addition to the up to 17,058,288 shares of HYMC Class A common stock that will be issued to Seller and distributed to Seller’s stockholders in connection with the consummation of the business combination. The shares of HYMC Class A common stock issued in the business combination, the private investment, the forward purchase, the underwriting commission issuance and the lender issuance, and additional shares of HYMC Class A common stock issued upon exercise of MUDS’ warrants, will result in dilution to the then existing holders of shares of HYMC Class A common stock and increase the number of shares eligible
 
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for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of HYMC Class A common stock.
The private placement warrants and the PIPE warrants are identical to the public warrants sold as part of the units issued in the IPO, except that so long as, to the extent applicable, they are held by sponsor, Cantor or their permitted transferees, (i) they will not be redeemable by HYMC, (ii) they (including the HYMC Class A common stock issuable upon exercise of such MUDS warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by sponsor until 30 days after the completion of the business combination, (iii) they may be exercised by the holders on a cashless basis and (iv) are subject to registration rights.
Substantial future sales of shares of HYMC Class A common stock could cause the market price of the HYMC Class A common stock to decline.
The market price of shares of HYMC Class A common stock could decline as a result of substantial sales of HYMC Class A common stock, particularly by our significant stockholders, a large number of shares of HYMC Class A common stock becoming available for sale or the perception in the market that holders of a large number of shares intend to sell their shares. After the business combination, it is anticipated that we will have approximately 50,020,315 shares of HYMC Class A common stock outstanding (assuming all but 964,320 shares are redeemed). Shares of HYMC Class A common stock issued to Seller and promptly distributed to Seller stockholders in connection with the business combination may be, subject to certain exceptions, resold in the public market immediately without restriction.
At the consummation of the business combination, HYMC and the restricted stockholders will enter into an Amended and Restated Registration Rights Agreement, pursuant to which such stockholders will be entitled to, among other things, customary registration rights, including demand, piggy-back and shelf registration rights, subject to cut-back provisions. The restricted stockholders will agree not to sell, transfer, pledge or otherwise dispose of shares of HYMC Class A common stock they hold or receive for certain time periods, ranging from 30 days after the consummation of the business combination for certain restricted stockholders to the earlier of  (i) one year after the consummation of the business combination and (ii) certain specified milestones for certain other restricted stockholders.
We may issue additional shares of HYMC Class A common stock or other equity securities without your approval, which would dilute your ownership interests and may depress the market price of your shares.
We may issue additional shares of HYMC Class A common stock or other equity securities of equal or senior rank in the future in connection with, among other things, future acquisitions, repayment of outstanding indebtedness or under our Incentive Plan, without stockholder approval, in a number of circumstances.
Our issuance of additional shares of HYMC Class A common stock or other equity securities of equal or senior rank could have the following effects:

your proportionate ownership interest in HYMC will decrease;

the relative voting strength of each previously outstanding share of common stock may be diminished; and

the market price of our shares of HYMC stock may decline.
Anti-takeover provisions contained in HYMC’s proposed charter and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
Assuming the passage of the Charter Proposals, HYMC’s proposed charter will contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. HYMC will also be subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together, these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities. These provisions will include:
 
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no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

the right of the HYMC Board to appoint a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on the HYMC Board;

a prohibition on stockholders calling a special meeting and the requirement that a meeting of stockholders may only be called by members of the HYMC Board, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors;

the ability of the HYMC Board to determine whether to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

limiting the liability of, and providing indemnification to, the HYMC directors and officers; and

advance notice procedures that stockholders must comply with in order to nominate candidates to the HYMC Board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of HYMC.
The JOBS Act permits emerging growth companieslike us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.
MUDS qualifies as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, which we refer to as the “JOBS Act.” As such, following the consummation of the business combination, HYMC will take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. As a result, HYMC’s stockholders may not have access to certain information they deem important. HYMC will remain an emerging growth company until the earliest of  (i) the last day of the fiscal year (a) following February 12, 2023, the fifth anniversary of the IPO, (b) in which HYMC has total annual gross revenue of at least $1.07 billion or (c) in which HYMC is deemed to be a large accelerated filer, which means the market value of HYMC Class A common stock that are held by non-affiliates exceeds $700 million as of the last business day of HYMC’s prior second fiscal quarter, and (ii) the date on which HYMC has issued more than $1.0 billion in non-convertible debt during the prior three-year period.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as HYMC is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable. HYMC has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of HYMC’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
MUDS cannot predict if investors will find HYMC Class A common stock less attractive because HYMC will rely on these exemptions. If some investors find HYMC Class A common stock less attractive
 
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as a result, there may be a less active trading market for HYMC Class A common stock and HYMC’s stock price may be more volatile.
Risks Related to the Redemption
You must tender your shares of MUDS Class A common stock in order to validly seek redemption at the MUDS special meeting.
In connection with tendering your shares for redemption, you must elect either to physically tender your common stock certificates to MUDS’ transfer agent or to deliver your shares of common stock to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your shares of common stock, in each case, by two business days prior to the MUDS special meeting. The requirement for physical or electronic delivery by two business days prior to the MUDS special meeting ensures that a redeeming holder’s election to redeem is irrevocable once the business combination is approved. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the business combination.
MUDS does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for us to complete a business combination with which a substantial majority of MUDS’ stockholders do not agree.
MUDS’ existing charter does not provide a specified maximum redemption threshold, except that MUDS will not redeem public shares in an amount that would cause MUDS’ net tangible assets to be less than $5,000,001 (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act). However, the Purchase Agreement provides that MUDS’ and Seller’s respective obligations to consummate the business combination are conditioned on (i) immediately prior to the consummation of the business combination, the amount in the trust account and the proceeds from the private investment and the forward purchase contract and available under the Sprott Credit Agreement and the Sprott Royalty Agreement equaling or exceeding $210,000,000, and (ii) immediately after the consummation of the business combination and after payment in respect of all stockholder redemptions, the payoff amount and any payments due to Excess Noteholders and 1.5 Lien Noteholders in the exchange, if any, unrestricted and available cash equaling or exceeding $50,000,000. As a result, MUDS may be able to complete the business combination even though a substantial portion of public stockholders do not agree with the transaction and have redeemed their shares or have entered into privately negotiated agreements to sell their shares to sponsor, directors or officers or their affiliates. As of the date of this joint proxy statement/prospectus, no agreements with respect to the private purchase of public shares by MUDS or the persons described above have been entered into with any such investor or holder. MUDS will file a Current Report on Form 8-K with the SEC to disclose private arrangements entered into or significant private purchases made by any of the aforementioned persons that would affect the vote on the Business Combination Proposal or other proposals (as described in this joint proxy statement/prospectus) at the MUDS special meeting.
In the event that the aggregate cash consideration that MUDS would be required to pay for all shares of MUDS Class A common stock that are validly submitted for redemption, plus any amount required to satisfy the foregoing cash condition pursuant to the terms of the Purchase Agreement, exceeds the aggregate amount of cash available to MUDS, MUDS may not complete the business combination or redeem any shares, all shares of MUDS Class A common stock submitted for redemption will be returned to the holders thereof and MUDS may instead search for an alternate business combination.
Based on the amount of  $[•] in MUDS’ trust account as of  [•], 2020, and taking into account the anticipated gross proceeds of the private investment, the forward purchase and available under the Sprott Credit Agreement and the Sprott Royalty Agreement, approximately [•] shares of MUDS Class A common stock may be redeemed and still enable MUDS to have sufficient cash to satisfy the closing condition in the Purchase Agreement. We refer to this as the “maximum redemption scenario.”
 
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If you or a groupof stockholders of which you are a part are deemed to hold an aggregate of more than fifteen percent (15%) of the shares of Class A common stock issued in the IPO, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the shares of Class A common stock issued in the IPO unless you first obtain MUDS’ prior consent.
A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as provided in Section 13(d) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, in excess of 15% of the shares of MUDS Class A common stock included in the units sold in the IPO unless such stockholder first obtains MUDS’ prior consent. In order to determine whether a stockholder is acting in concert or as a group with another stockholder, MUDS will require each public stockholder seeking to exercise redemption rights to certify to MUDS whether such stockholder is acting in concert or as a group with any other stockholder. Such certifications, together with other public information relating to stock ownership available to MUDS at that time, such as Schedule 13D, Schedule 13G and Section 16 filings under the Exchange Act, will be the sole basis on which MUDS makes the above-referenced determination. Your inability to redeem any such excess shares will reduce your influence over MUDS’ ability to consummate the business combination and you could suffer a material loss on your investment in MUDS if you sell such excess shares in open market transactions. Additionally, you will not receive redemption distributions with respect to such excess shares if MUDS consummates the business combination. As a result, you will continue to hold that number of shares aggregating to more than 15% of the shares sold in the IPO and, in order to dispose of such excess shares, would be required to sell your stock in open market transactions, potentially at a loss. MUDS cannot assure you that the value of such excess shares will appreciate over time following the business combination or that the market price of shares of HYMC Class A common stock will exceed the per-share redemption price. Notwithstanding the foregoing, stockholders may challenge MUDS’ determination as to whether a stockholder is acting in concert or as a group with another stockholder in a court of competent jurisdiction.
However, MUDS’ stockholders’ ability to vote all of their shares (including such excess shares) for or against the business combination is not restricted by this limitation on redemption.
There is no guarantee that a stockholder’s decision whether to redeem its shares for a pro rata portion of the trust account will put the stockholder in a better future economic position.
MUDS can give no assurance as to the price at which a stockholder may be able to sell its public shares in the future following the completion of the business combination or any alternative business combination. Certain events following the consummation of any initial business combination, including the business combination, may cause an increase in MUDS share price, and may result in a lower value realized now than a stockholder of MUDS might realize in the future had the stockholder not redeemed its shares. Similarly, if a stockholder does not redeem its shares, the stockholder will bear the risk of ownership of the public shares after the consummation of any initial business combination, and there can be no assurance that a stockholder can sell its shares in the future for a greater amount than the redemption price set forth in this joint proxy statement/prospectus. A stockholder should consult the stockholder’s own tax and/or financial advisor for assistance on how this may affect his, her or its individual situation.
Stockholders of MUDS who wish to redeem their shares of MUDS Class A common stock for a pro rata portion of the trust account must comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline. If stockholders fail to comply with the redemption requirements specified in this joint proxy statement/ prospectus, they will not be entitled to redeem their shares of MUDS Class A common stock for a pro rata portion of the funds held in the trust account.
Public stockholders who wish to redeem their shares of MUDS Class A common stock for a pro rata portion of the trust account must, among other things (i) submit a request in writing and (ii) tender their certificates to MUDS’ transfer agent or deliver their shares of MUDS Class A common stock to the transfer agent electronically through the DWAC system at least two business days prior to the MUDS special meeting. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC and MUDS’ transfer agent will need to act to facilitate this request. It is MUDS’ understanding that
 
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stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because MUDS does not have any control over this process or over the brokers, which MUDS refers to as “DTC,” it may take significantly longer than two weeks to obtain a physical stock certificate. If it takes longer than anticipated to obtain a physical certificate, stockholders who wish to redeem their shares of MUDS Class A common stock may be unable to obtain physical certificates by the deadline for exercising their redemption rights and thus will be unable to redeem their shares of MUDS Class A common stock.
Stockholders electing to redeem their shares of MUDS Class A common stock will receive their pro rata portion of the trust account less franchise and income taxes payable, calculated as of two business days prior to the anticipated consummation of the business combination. Please see the section entitled “Special Meeting of MUDS Stockholders — Redemption Rights” for additional information on how to exercise your redemption rights.
If a stockholder fails to receive notice of MUDS’ offer to redeem public shares of MUDS Class A common stock in connection with the business combination, or fails to comply with the procedures for tendering its shares, such shares of MUDS Class A common stock may not be redeemed.
If, despite MUDS’ compliance with the proxy rules, a stockholder fails to receive MUDS proxy materials, such stockholder may not become aware of the opportunity to redeem its shares of MUDS Class A common stock. In addition, the proxy materials that MUDS is furnishing to holders of public shares of MUDS Class A common stock in connection with the business combination describes the various procedures that must be complied with in order to validly redeem public shares of MUDS Class A common stock. In the event that a stockholder fails to comply with these procedures, its shares of MUDS Class A common stock may not be redeemed.
Seller’s Risks Relating to the Business Combination and Sale of the Hycroft Business
There can be no guarantees that the business combination will be completed and, if not completed, Seller may have to file for bankruptcy and liquidation.
The consummation of the business combination and the closing of the transactions contemplated by the Purchase Agreement are subject to the satisfaction or waiver of various conditions, including the approval of the business combination and the related transactions by Seller stockholders and the stockholders of MUDS and MUDS’ satisfaction of a minimum cash condition. Neither Seller nor MUDS can guarantee that the closing conditions set forth in the Purchase Agreement will be satisfied. If either Seller or MUDS is unable to satisfy the closing conditions, the parties will not be obligated to complete the business combination. If the purchase of the Hycroft business is not completed, the Seller Board, in discharging its fiduciary obligations to its stockholders, will evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to its stockholders as the business combination with MUDS and may include a bankruptcy and the liquidation of Seller.
The failure to consummate the business combination by the prescribed deadline will likely result in the business combination being abandoned.
Either MUDS or Seller may terminate the Purchase Agreement without penalty if  (i) Seller stockholders do not approve the Seller Business Combination Proposal, (ii) MUDS’ stockholders do not approve the Business Combination Proposal or (iii) if the Purchase Agreement is otherwise not completed by August 12, 2020. If the purchase of the Hycroft business is not completed, Seller Board, in discharging its fiduciary obligations to its stockholders, will evaluate other strategic alternatives that may be available, which alternatives may not be as favorable to its stockholders as the business combination with MUDS and may include a bankruptcy and the liquidation of Seller.
Seller’s executive officers and directors may have interests in the business combination other than, or in addition to, the interests of Seller stockholders generally in recommending that Seller stockholders vote in favor of approval of the Seller Business Combination Proposal described in this joint proxy statement/​prospectus.
Members of Seller Board and Seller’s executive officers may have interests in the business combination that are different from, or are in addition to, the interests of Seller stockholders generally, including as
 
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discussed under “Certain Relationships and Related Transactions” below. Seller Board was aware of these interests and considered them, among other matters, in approving the Purchase Agreement, sale of the Hycroft business and the dissolution and liquidation of Seller.
Risks Relating to Seller’s Dissolution and Liquidation
Seller will no longer be an operating company following the closing of the business combination.
If the Seller Dissolution Proposal is approved by Seller stockholders and the business combination is consummated, Seller intends to cease to do business and intends not to engage in any business activities except for dealing with post-closing matters and for the purpose of implementing the plan of dissolution and effecting a complete liquidation of Seller, including distributing its assets to Seller’s stockholders, consisting primarily of shares of HYMC Class A common stock received in connection with the business combination, paying any debts and obligations, and doing other acts required to dissolve and wind up its business and affairs. Holders of Seller’s outstanding warrants will not receive any pro-rata distribution of Seller’s assets unless such holders duly and validly exercise such warrants prior to the filing of a certificate of dissolution by the Seller, which is expected to be done promptly following consummation of the business combination.
Holders of Seller warrants have no rights of Seller stockholders. Holders of Seller warrants that do not exercise their Seller warrants at a price (as of December 31, 2019) of  $5.20 per share, which is in excess of the value attributed to shares of Seller common stock, prior to effective time of the plan of dissolution, will not participate in the distribution of purchase shares pursuant to the plan of dissolution.
Seller stockholders could be held liable for the corporate obligations of Seller, up to the amount actually distributed to Seller stockholders in connection with Seller’s dissolution.
Seller will continue to exist for three years after its dissolution, or for such longer period as the Delaware Court of Chancery may direct, for the purpose of continuing to close its business, dispose of its non-cash assets, resolve outstanding litigation, discharge its liabilities and distribute any remaining assets to Seller stockholders. Under the DGCL, if the amount Seller reserves to satisfy its obligations proves insufficient to satisfy all of its expenses and liabilities, a Seller stockholder who receives a liquidating distribution could be held liable for payment to Seller’s creditors of Seller stockholder’s pro rata share of amounts Seller owes to its creditors in excess of the reserves, up to but not exceeding the amount actually distributed to Seller stockholders in connection with Seller’s dissolution. This means that a Seller stockholder could be required to return all liquidating distributions made to such Seller stockholder and receive nothing from Seller in connection with Seller’s dissolution and liquidation. If a Seller stockholder has paid taxes on amounts previously received, a repayment of all or a portion of those taxes could result in a Seller stockholder incurring a net tax cost if such stockholder’s repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable. There is no guaranty that the reserves established by Seller to satisfy its obligations will be adequate to cover all of its obligations.
Seller Board may abandon implementation of the plan of dissolution even if Seller stockholders approve the Seller Dissolution Proposal.
As permitted by the DGCL, Seller Board has the right to abandon the plan of dissolution even after Seller stockholders have authorized Seller’s dissolution and liquidation. While Seller Board does not currently intend to do so unless Seller stockholders do not approve the Seller Business Combination Proposal, it will do so if it determines, based on intervening circumstances, that it is not in the best interest of Seller stockholders to continue with the Seller’s dissolution and complete liquidation. If the Seller Board decides to abandon the Seller’s dissolution and complete liquidation, it will also terminate the plan of dissolution.
Although the Seller Board will be responsible for overseeing the plan of dissolution, their authority could effectively be transferred to a liquidating trustee or some other party.
Under Delaware law, a company’s board of directors retains ultimate decision-making authority following a company’s dissolution, and therefore the Seller Board would initially be responsible for overseeing the plan of dissolution. However, pursuant to the plan of dissolution, a liquidating trust could be used to
 
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complete the dissolution, or, under Delaware law, any director, creditor, stockholder or other party showing good cause could seek court appointment of a trustee or receiver to complete the dissolution.
Interests of Seller stockholders in Seller after the dissolution date, and interests of Seller stockholders in any liquidating trust established pursuant to the plan of dissolution, may not be assignable or transferable.
Seller intends to discontinue recording transfers of shares of Seller common stock after the date of dissolution, and thereafter certificates representing shares of Seller common stock will not be assignable or transferable on its books except by will, intestate succession or operation of law. In addition, if Seller were to establish a liquidating trust, the interests of Seller stockholders in such liquidating trust would similarly not be assignable or transferable except by will, intestate succession or operation of law, which could adversely affect Seller stockholders’ ability to realize the value of such interests. Furthermore, given that Seller stockholders will be deemed to have received a liquidating distribution equal to their pro rata share of the value of the net assets distributed to any entity which is treated as a liquidating trust for tax purposes, the distribution of non-transferable interests would result in tax liability to Seller stockholders without their being readily able to realize the value of such interest to pay such taxes or otherwise.
Holders of Seller warrants will not receive consideration in connection with the consummation of the business combination and Seller warrants will remain outstanding.
Subject to the terms and conditions of the Purchase Agreement, each Seller warrant outstanding and unexercised immediately prior to the effective time of the business combination will remain an outstanding obligation of Seller following the consummation of the business combination. Seller warrant holders are not entitled to receive shares of HYMC Class A common stock in connection with the business combination unless such holder exercises such warrants pursuant to their terms prior to the consummation of the business combination.
On February 7, 2020, a purported class action complaint was filed by Travus Pope, a purported holder of Seller warrants, in the Court of Chancery of the State of Delaware against Seller and MUDS. The complaint seeks a declaratory judgment that the transactions contemplated under the Purchase Agreement constitute a “Fundamental Change” under the terms of the Seller warrant agreement thereby require that the Seller warrants be assumed by MUDS as part of the transaction, in addition to asserting claims for (i) breach or anticipatory breach of contract against Seller, (ii) breach or anticipatory breach of the implied covenant of good faith and fair dealing against Seller, and (iii) tortious interference with contractual relations against MUDS. The complaint seeks unspecified money damages and also seeks an injunction enjoining Seller and MUDS from consummating the transactions. An adverse decision against Seller and MUDS could result in money damages and/or an injunction enjoining Seller and MUDS from consummating the transactions.
Seller stockholders may not be able to recognize a loss for U.S. federal income tax purposes until they receive a final distribution from us.
As a result of Seller’s dissolution and complete liquidation, for U.S. federal income tax purposes, Seller stockholders generally will recognize gain or loss, on a per share basis, equal to the difference between (i) the sum of the amount of cash and the fair market value (at the time of the distribution) of property, if any, distributed to them with respect to each share of Seller common stock and (ii) their adjusted tax basis in each share of Seller common stock. A liquidating distribution pursuant to the plan of dissolution may occur at various times and in more than one tax year. Any loss generally will be recognized by a Seller stockholder only in the tax year in which such Seller stockholder receives a final liquidating distribution, and then only if the aggregate value of all liquidating distributions with respect to a share of Seller common stock is less than the Seller stockholder’s adjusted tax basis for that share. Seller stockholders are urged to consult with their own tax advisors as to the specific tax consequences to them of Seller’s dissolution and complete liquidation and winding up pursuant to the plan of dissolution. See "Material Tax Considerations" beginning on page [•].
The tax treatment of any liquidating distribution may vary from Seller stockholder to Seller stockholder, and the discussions in this joint proxy statement/prospectus regarding tax consequences are general in nature.
Each Seller stockholder should consult his, her or its own tax advisor for tax advice instead of relying on the discussions of tax consequences in this joint proxy statement/prospectus. Seller has not requested a ruling
 
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from the IRS, and will not seek an opinion of counsel, with respect to the sale of the Hycroft business or the distribution of HYMC Class A common stock. If any of the anticipated tax consequences described in this joint proxy statement/prospectus prove to be incorrect, the result could be increased taxation at the corporate and/or stockholder level, thus reducing the benefit to Seller stockholders from Seller’s distribution. Tax considerations applicable to particular stockholders may vary with and be contingent on such Seller stockholder’s individual circumstances.
 
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SPECIAL MEETING OF MUDS STOCKHOLDERS
This joint proxy statement/prospectus is being provided to MUDS stockholders as part of a solicitation of proxies by the MUDS Board for use at the MUDS special meeting of stockholders to be held on [•], 2020, and at any adjournment or postponement thereof. This joint proxy statement/prospectus contains important information regarding the MUDS special meeting, the proposals on which you are being asked to vote and information you may find useful in determining how to vote and voting procedures.
This joint proxy statement/prospectus is being first mailed on or about [•], 2020 to all stockholders of record of MUDS as of  [•], 2020, the record date for the MUDS special meeting. Stockholders of record who owned shares of MUDS common stock at the close of business on the record date are entitled to receive notice of, attend and vote at the MUDS special meeting. On the record date, there were [•] shares of MUDS common stock outstanding.
Date, Time and Place of MUDS Special Meeting
The MUDS special meeting will be held at 9:00 a.m. Eastern Time on [•], 2020 at the offices of Weil, Gotshal & Manges, 767 Fifth Avenue, New York NY 10153, or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the proposals.
Voting Power; Record Date
As a stockholder of MUDS, you have a right to vote on the matters presented at the MUDS special meeting, which are summarized above and fully set forth in this joint proxy statement/prospectus. You will be entitled to vote or direct votes to be cast at the MUDS special meeting if you owned MUDS common stock at the close of business on [•], 2020, which is the record date for the MUDS special meeting. You are entitled to one vote for each share of MUDS common stock that you owned as of the close of business on the record date. If your shares are held in “street name” or are in a margin or similar account, you should contact your broker, bank or other nominee to ensure that votes related to the shares you beneficially own are properly counted. On the record date, there were [•] shares of MUDS common stock outstanding, of which [•] are shares of MUDS Class A common stock and [•] are shares of MUDS Class B common stock held by the initial stockholders.
Proposals at the MUDS special meeting
At the MUDS special meeting, MUDS stockholders will vote on the following proposals:
1.
Proposal No. 1 — The Business Combination Proposal — To consider and vote upon a proposal to approve and adopt the Purchase Agreement, the Exchange Agreement, the Second Lien Conversion Agreement and the business combination, which we refer to as the “Business Combination Proposal”;
The Charter Proposals — To consider and vote upon the following seven separate proposals to approve, assuming the Business Combination Proposal and the NASDAQ Proposal are approved and adopted:
2.
Proposal No. 2 — To consider and vote upon an amendment to MUDS’ existing charter to increase the total number of authorized shares of all classes of capital stock from 111,000,000 shares to [•], which would consist of  (a) [•] shares of Class A common stock and (b) [•] shares of preferred stock;
3.
Proposal No. 3 — To consider and vote upon an amendment to MUDS’ existing charter to declassify the HYMC board of directors, so that each member of the HYMC board of directors will be elected at each annual meeting of stockholders, as opposed to MUDS having three classes of directors, with only one class of directors being elected in each year and each class serving a three-year term, and make certain related changes;
 
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4.
Proposal No. 4 — To consider and vote upon an amendment to MUDS’ existing charter to provide that certain transactions are not “corporate opportunities” and that the Exempted Persons are not subject to the doctrine of corporate opportunity;
5.
Proposal No. 5 — To consider and vote upon an amendment to MUDS’ existing charter to permit stockholder action by written consent;
6.
Proposal No. 6 — To consider and vote upon an amendment to MUDS’ existing charter to provide that HYMC will not be governed by Section 203 of the DGCL and approve a provision in the proposed charter that is substantially similar to Section 203 of the DGCL, but excludes the Sponsor Holders from the definition of  “interested stockholder,” and to make certain related changes. Upon consummation of the business combination, the Sponsor Holders will become “interested stockholders” within the meaning of Section 203 of the DGCL, but will not be subject to the restrictions on business combinations set forth in Section 203, as the MUDS Board approved the business combination in which the Sponsor Holders became interested stockholders prior to such time as they became interested stockholders;
7.
Proposal No. 7 — To consider and vote upon an amendment to MUDS’ existing charter to clarify that the exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation shall not apply to any action to enforce any liability or duty under the Securities Act or the Exchange Act for which federal courts have exclusive jurisdiction; and
8.
Proposal No. 8 — To consider and vote upon an amendment to MUDS’ existing charter to authorize all other proposed changes, including, among others, those (i) resulting from the business combination, including changing the post-business combination corporate name from “Mudrick Capital Acquisition Corporation” to “Hycroft Mining Holding Corporation” and removing certain provisions relating to MUDS’ prior status as a blank check company and MUDS Class B common stock that will no longer apply upon consummation of the business combination, or (ii) that are administrative or clarifying in nature, including the deletion of language without substantive effect.
We refer to Proposals No. 2-8 collectively as the “Charter Proposals”;
9.
Proposal No. 9 — The Director Election Proposal — To consider and vote upon a proposal, assuming the Business Combination, the Charter Proposals and the NASDAQ Proposal are all approved and adopted to elect seven directors to serve on the HYMC board of directors until the next annual meeting of stockholders, or until their respective successors are duly elected and qualified, which we refer to as the “Director Election Proposal”;
10.
Proposal No. 10 — The Incentive Plan Proposal — To consider and vote on a proposal to approve and adopt, assuming the Business Combination, the Charter Proposals and the NASDAQ Proposal are all approved and adopted, the HYMC 2020 Performance and Incentive Pay Plan (the “Incentive Plan”) and the material terms thereunder, which we refer to as the “Incentive Plan Proposal”. A copy of the Incentive Plan is attached to the accompanying joint proxy statement/​prospectus as Annex C; and
11.
Proposal No. 11 — The NASDAQ Proposal — To consider and vote upon a proposal to approve, assuming the Business Combination Proposal and the Charter Proposals are approved and adopted, for purposes of complying with applicable provisions of NASDAQ Listing Rule 5635, the issuance of more than 20% of MUDS’ issued and outstanding common stock in connection with the business combination, the private investment, an incremental equity investment, the forward purchase, the underwriting commission issuance and the lender issuance, and the related change in control, which we refer to as the “NASDAQ Proposal.”
THE MUDS BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THESE PROPOSALS.
Vote of MUDS’ Sponsor, Directors and Officers
In connection with the IPO, the initial stockholders agreed to vote their founder shares and any public shares purchased during or after the IPO in favor of the business combination. Currently, the initial
 
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stockholders own 43% of MUDS’ issued and outstanding common stock, including all of the outstanding founder shares. These agreements apply to the initial stockholders, including the sponsor, as it relates to the outstanding founder shares and the requirement to vote all of the outstanding founder shares in favor of the Business Combination Proposal and for all other proposals presented to MUDS stockholders in this joint proxy statement/prospectus.
The initial stockholders, other current directors and officers have waived any redemption rights, including with respect to any shares of MUDS Class A common stock purchased in the IPO or in the aftermarket, in connection with the business combination.
Quorum and Required Vote for Proposals for the MUDS Special Meeting
A quorum of MUDS’ stockholders is necessary to hold a valid meeting. A quorum will be present at the MUDS special meeting if holders of a majority in voting power of MUDS common stock issued and outstanding and entitled to vote at the MUDS special meeting is present in person or represented by proxy. Abstentions will count as present for the purposes of establishing a quorum at the MUDS special meeting. Broker non-votes will not be counted for purposes of determining the existence of a quorum.
The approval of each of the Business Combination Proposal, the Incentive Plan Proposal and the NASDAQ Proposal requires the affirmative vote of a majority of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. If a valid quorum is established, a stockholder’s failure to vote by proxy or in person at the MUDS special meeting will have no effect on the outcome of any vote on any of the foregoing proposals. Abstentions will be counted in connection with determination of whether a valid quorum is established, but will have no effect on the vote with respect to such proposals. Broker non-votes will also have no effect on the vote with respect to such proposals. The initial stockholders have agreed to vote their founder shares and any public shares they may hold in favor of the business combination. Currently, the initial stockholders own approximately 43% of MUDS’ issued and outstanding common stock, including all of the outstanding founder shares.
The approval of the Charter Proposals requires the affirmative vote of the holders of a majority of MUDS’ outstanding shares of common stock entitled to vote thereon at the MUDS special meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or in person at the MUDS special meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposals, each will have the same effect as a vote “AGAINST” such Charter Proposals.
Directors are elected by a plurality of the votes cast by holders of MUDS’ outstanding shares of common stock represented in person or by proxy at the MUDS special meeting and entitled to vote thereon. This means that the seven director nominees who receive the most affirmative votes will be elected. Stockholders may not cumulate their votes with respect to the election of directors. Assuming a valid quorum is established, abstentions, broker non-votes and failure to vote by proxy or in person will have no effect on the election of directors.
The transactions contemplated by the Purchase Agreement, the Exchange Agreement and the Second Lien Conversion Agreement will be consummated only if the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are approved at the MUDS special meeting. Each of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal are cross-conditioned on the approval of each other. The Director Election Proposal and the Incentive Plan Proposal are conditioned on the approval of the Business Combination Proposal, the Charter Proposals and the NASDAQ Proposal. It is important for you to note that in the event that the Business Combination Proposal, the Charter Proposals or the NASDAQ Proposal do not receive the requisite vote for approval, we will not consummate the business combination.
Recommendation to MUDS’ Stockholders
The MUDS Board believes that each of the Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Incentive Plan Proposal and the NASDAQ Proposal to be presented at the
 
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MUDS special meeting is in the best interests of MUDS and MUDS stockholders and recommends that its stockholders vote FOReach of the proposals.
When you consider the recommendation of the MUDS Board in favor of approval of the Business Combination Proposal, you should keep in mind that the sponsor and certain members of the MUDS Board and officers have interests in the business combination that are different from or in addition to (or which may conflict with) your interests as a stockholder. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the MUDS special meeting, including the Business Combination Proposal. These interests include, among other things:

the fact that various funds managed by and affiliated with Mudrick Capital, an affiliate of sponsor of which Jason Mudrick, Chief Executive Officer and a director of MUDS, is the President and David Kirsch, a director and Vice President of MUDS, is Managing Director, may be deemed to beneficially own: 648,950 shares of Seller common stock (prior to the conversion), in connection with which such funds will receive shares of HYMC Class A common stock in connection with the issuance to Seller and distribution to Seller’s stockholders in the business combination; an aggregate of  $41.8 million in principal amount of First Lien Notes, which will be repaid and are included in the payoff amount; an aggregate of  $55.6 million in principal amount of 1.5 Lien Notes, including accrued interest through February 12, 2020, which will be subject to the Exchange Agreement and will be repaid or exchanged for shares of HYMC Class A common stock in the exchange; an aggregate of  $82.3 million in principal amount of Second Lien Notes, including accrued interest through February 12, 2020, which are subject to the Second Lien Conversion Agreement and, following the conversion, will receive shares of HYMC Class A common stock in connection with the issuance to Seller and distribution to Seller’s stockholders in the business combination; and an aggregate of $37.3 million in principal amount of 1.25 Lien Notes, including accrued interest through February 12, 2020, which will be subject to the 1.25 Lien Exchange Agreement pursuant to which the 1.25 Lien Notes will be exchanged for New Subordinated Notes, up to $80,000,000 in aggregate principal amount of which will be assumed on a pro rata basis by HYMC in the business combination as part of the debt assumption, and Excess Notes, if any, which will be repaid or exchanged for shares of HYMC Class A common stock in the exchange;

the fact that the Initial Subscribers, including certain investment funds managed by and affiliated with Mudrick Capital, entered into Subscription/Backstop Agreements for the purchase of 6,500,000 shares of HYMC Class A common stock at a purchase price of  $10.00 per share, and the issuance to such investors of 3,250,000 PIPE warrants, for an aggregate purchase price of up to $65,000,000, subject to reduction, a pro rata portion of which shares and warrants will be issued to each Initial Subscriber, including the investment funds affiliated with Mudrick Capital;

the fact that David Kirsch is a director of Seller. Mr. Kirsch was the primary representative of MUDS in respect of negotiating the business combination and asked to be recused as a director from all Seller Board meetings related to consideration of the business combination. Throughout the period from May 2018 through January 2020, Mr. Kirsch did not participate as a director in meetings of the Seller Board related to consideration of a transaction with MUDS or alternative transactions unless specifically requested to do so after acknowledgment and disclosure of his potential conflicts of interest.

the fact that, in connection with the private investment, negotiations on behalf of the Initial Subscribers were led by Mr. Jonathan Segal, a member of the Seller Board acting on behalf of Highbridge, and Mr. Jacob Mercer, a member of the Seller Board acting on behalf of Whitebox, and Mr. Mudrick, on behalf of the funds managed by Mudrick Capital, agreed that Mudrick Capital would participate on a pro rata basis with the other investors on the terms to which the other Initial Subscribers agreed;

the fact that the initial stockholders have agreed not to redeem any of the outstanding founder shares in connection with a stockholder vote to approve a proposed initial business combination;

the fact that sponsor paid an aggregate of  $25,000 for the outstanding founder shares for approximately $0.004 per share which, if valued based on the closing price of  $[•] per share on the NASDAQ Capital Market on [•], 2020 would be valued at approximately $[•] (after giving effect to the conversion of such shares into shares of Class A common stock);
 
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the fact that the initial stockholders have agreed to waive their rights to conversion price adjustments with respect to any MUDS common stock they may hold in connection with the consummation of the business combination;

the fact that the initial stockholders have agreed to waive their rights to liquidating distributions from the trust account with respect to their founder shares;

the fact that sponsor paid an aggregate of  $6,700,000 for 6,700,000 private placement warrants, which, if valued based on the closing price of  $[•] per warrant on the NASDAQ Capital Market on [•], 2020 would be valued at approximately $[•] but may expire worthless if MUDS fails to complete a business combination;

the continued right of sponsor to hold HYMC Class A stock and shares of HYMC Class A stock to be issued to sponsor upon exercise of its private placement warrants following the business combination, subject to certain lock-up periods;

the fact that if MUDS consummates the business combination, any amounts outstanding under any loan made by sponsor to MUDS, including the unsecured promissory note in an amount up to $1,500,000 issued to sponsor on January 2, 2020, will be repayable in cash, and if MUDS fails to complete a business combination there may be insufficient assets outside the trust account to satisfy such loan;

the fact that if MUDS consummates the business combination, sponsor will (a) surrender to MUDS the Surrender Shares for no consideration and (b) convert any remaining shares of MUDS Class B common stock into HYMC Class A common stock;

the fact that in connection with the consummation of the business combination, sponsor will purchase in a private placement for gross proceeds of  $25,000,000, 2,500,000 units having substantially the same terms as the public units and 625,000 shares of MUDS Class A common stock;

the continued indemnification of MUDS’ existing directors and officers and the continuation of MUDS’ directors’ and officers’ liability insurance after the business combination;

the fact that the sponsor, officers and directors are not permitted to participate in the formation of, or become a director or officer of, any other blank check company until MUDS has (i) entered into a definitive agreement regarding an initial business combination or (ii) failed to complete an initial business combination by August 12, 2020;

the fact that sponsor and MUDS’ officers and directors will not be reimbursed for any out-of-pocket expenses if an initial business combination is not consummated;

the fact that, as described in Proposal No. 6, the existing charter will be amended to exclude the investment funds affiliated with sponsor and the Initial Subscribers, including Mudrick Capital, and their respective successors and affiliates as “interested parties” from the list of prohibited business combinations not in compliance with Section 203 of the DGCL;

the fact that, as the closing of the business combination, HYMC will enter into the Amended and Restated Registration Rights Agreement with the restricted stockholders, which provides for registration rights to the restricted stockholders and their permitted transferees;

the anticipated election of  [•] as a director of HYMC; and

if the trust account is liquidated, including in the event MUDS is unable to complete an initial business combination within the required time period, sponsor has agreed to indemnify MUDS to ensure that proceeds in the trust account are not reduced below $10.10 per public share, or such lesser per public share amount as is in the trust account on the liquidation date, by the claims of prospective target businesses with which MUDS has entered into an acquisition agreement or claims of any third party for services rendered or products sold to MUDS, but only if such third party or target business has not executed a waiver of any and all rights to seek access to the trust account.
Abstentions and Broker Non-Votes
Abstentions are considered present for purposes of establishing a quorum. Abstentions will have the same effect as a vote “AGAINST” the Charter Proposals, but will have no effect on the Business Combination Proposal, the Director Election Proposal, the Incentive Plan Proposal or the NASDAQ Proposal.
 
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In general, if your shares are held in “street” name and you do not instruct your broker, bank or other nominee on a timely basis on how to vote your shares, your broker, bank or other nominee, in its sole discretion, may either leave your shares unvoted or vote your shares on routine matters, but not on any non-routine matters. The Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Incentive Plan Proposal and the NASDAQ Proposal are considered non-routine matters. As such, without your voting instructions, your brokerage firm cannot vote your shares on any of the foregoing proposals to be voted on at the MUDS special meeting without your instruction.
Voting Your Shares — Stockholders of Record
If you are a MUDS stockholder of record, you may vote by mail or in person at the MUDS special meeting. Each share of MUDS common stock that you own in your name entitles you to one vote on each of the proposals for the MUDS special meeting. Your one or more proxy cards show the number of shares of MUDS common stock that you own.
Voting by Mail or Facsimile.   You can vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or by facsimile to Continental Stock Transfer & Trust Company by sending the completed, signed and dated proxy card to (212) 509-5152. By signing the proxy card and returning it in the enclosed prepaid envelope to the foregoing address, you are authorizing the individuals named on the proxy card to vote your shares at the MUDS special meeting in the manner you indicate. We encourage you to sign and return the proxy card even if you plan to attend the MUDS special meeting so that your shares will be voted if you are unable to attend the MUDS special meeting. If you receive more than one proxy card, it is an indication that your shares are held in multiple accounts. Please sign and return all proxy cards to ensure that all of your shares are voted. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee to ensure that your shares are represented and voted at the MUDS special meeting. If you sign and return the proxy card but do not give instructions on how to vote your shares, your common shares will be voted as recommended by the MUDS Board. The MUDS Board recommends voting “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the Director Election Proposal, “FOR” the Incentive Plan Proposal and “FOR” the NASDAQ Proposal. Votes submitted by mail must be received by [•] Eastern Time on [•], 2020.
Voting in Person at the Meeting.   If you attend the MUDS special meeting and plan to vote in person, we will provide you with a ballot at the MUDS special meeting. If your shares of MUDS common stock are registered directly in your name, you are considered the stockholder of record and you have the right to vote in person at the MUDS special meeting. If you hold your shares of MUDS common stock in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided by your broker, bank or nominee to ensure that votes related to the shares of MUDS common stock you beneficially own are properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the MUDS special meeting and vote in person, you will need to bring to the MUDS special meeting a legal proxy from your broker, bank or nominee authorizing you to vote these shares. That is the only way we can be sure that the broker, bank or nominee has not already voted your share of MUDS common stock.
Voting Your Shares — Beneficial Owners
If your shares of MUDS common stock are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of shares of MUDS common stock held in “street name” and this joint proxy statement/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the stockholder of record for purposes of voting at the MUDS special meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares of MUDS common stock in your account by following the instructions that the broker, bank or other nominee provides you along with this joint proxy statement/​prospectus. As a beneficial owner, if you wish to vote at the MUDS special meeting, you will need to bring to the MUDS special meeting a legal proxy from your broker, bank or other nominee authorizing you to vote those shares of MUDS common stock. Please see “Attending the MUDS Special Meeting” below for more details.
 
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Attending the MUDS Special Meeting
Only MUDS stockholders on the record date or their legal proxy holders may attend the MUDS special meeting. To be admitted to the MUDS special meeting, you will need a form of photo identification and valid proof of ownership of common stock or a valid legal proxy. If you have a legal proxy from a stockholder of record, you must bring a form of photo identification and the legal proxy to the MUDS special meeting. If you have a legal proxy from a “street name” stockholder, you must bring a form of photo identification, a legal proxy from the record holder (that is, the bank, broker or other holder of record) to the “street name” stockholder that is assignable, and the legal proxy from the “street name” stockholder to you. Stockholders may appoint only one proxy holder to attend on their behalf.
Revoking Your Proxy
If you give a proxy, you may revoke it at any time before the MUDS special meeting or at the MUDS special meeting by doing any one of the following:

you may send a later-dated, signed proxy card to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or by facsimile to Continental Stock Transfer & Trust Company at (212) 509-5152;

you may send a notice of revocation in writing to Continental Stock Transfer & Trust Company, Attn: Proxy Group at 1 State Street, New York, NY 10004 or by facsimile to Continental Stock Transfer & Trust Company at (212) 509-5152, before the MUDS special meeting that have revoked your proxy; or

you may attend the MUDS special meeting, revoke your proxy, and vote in person, as indicated above.
No Additional Matters
The MUDS special meeting has been called only to consider the approval of the Business Combination Proposal, the Charter Proposals, the Director Election Proposal, the Incentive Plan Proposal and the NASDAQ Proposal. Other than procedural matters incident to the conduct of the MUDS special meeting no other matters may be considered at the MUDS special meeting if they are not included in this joint proxy statement/prospectus, which serves as the notice of the MUDS special meeting.
Who Can Answer Your Questions About Voting
If you have any questions about how to vote or direct a vote in respect of your MUDS common stock, you may call MUDS’ proxy solicitor, Advantage Proxy, Inc., at (877) 870-8565 (toll free) or banks and brokers can call collect at (206) 870-8565 or by email to ksmith@advantageproxy.com.
Redemption Rights
Pursuant to MUDS’ existing charter, a holder of MUDS public shares may request that MUDS redeem all or a portion of such stockholder’s public shares for cash if the business combination is consummated. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, MUDS will redeem each public share for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, calculated as of two business days prior to the consummation of the business combination, including interest not previously released to MUDS to pay its franchise and income taxes, divided by the number of then issued and outstanding public shares. For illustrative purposes, as of  [•], 2020, this would have amounted to approximately $[•] per MUDS public share.
In order to exercise your redemption rights, you must:

if you hold public units, separate the underlying MUDS public shares and MUDS public warrants;
 
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prior to [•] Eastern Time on [•], 2020 (two business days before the MUDS special meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to the transfer agent, at the following address:
Continental Stock Transfer & Trust Company
1 State Street, 30th Floor
New York, NY 10004
Attn: Mark Zimkind
Email: mzimkind@continentalstock.com
and

deliver your MUDS public shares either physically or electronically through DTC’s DWAC system to the transfer agent at least two business days before the MUDS special meeting. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is MUDS’ understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, MUDS does not have any control over this process and it may take longer than two weeks. Stockholders who hold their MUDS shares in street name will have to coordinate with their bank, broker or other nominee to have the MUDS shares certificated or delivered electronically. If you do not submit a written request and deliver your MUDS public shares as described above, your MUDS shares will not be redeemed.
Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” are required to either tender their certificates to the transfer agent prior to the date set forth in these proxy materials or deliver their shares to the transfer agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken on the business combination. If you delivered your shares for redemption to our transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that our transfer agent return the shares (physically or electronically). The requirement for physical or electronic delivery prior to the MUDS special meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the business combination is approved.
Holders of outstanding public units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares.
If you hold public units registered in your own name, you must deliver the certificate for such public units to the transfer agent, with written instructions to separate such public units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the public units.
If a broker, dealer, commercial bank, trust company or other nominee holds your public units, you must instruct such nominee to separate your public units. Your nominee must send written instructions by facsimile to the transfer agent. Such written instructions must include the number of public units to be split and the nominee holding such public units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the public units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.
Each redemption of shares of MUDS Class A common stock by public stockholders will reduce the amount in the trust account, which held marketable securities with a fair value of approximately $[•] as of [•], 2020. The Purchase Agreement provides that MUDS’ and Seller’s respective obligations to consummate the business combination are conditioned on (i) immediately prior to the consummation of the business
 
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combination, the amount in the trust account and the proceeds from the private investment and the forward purchase contract and available under the Sprott Credit Agreement and the Sprott Royalty Agreement equaling or exceeding $210,000,000, and (ii) immediately after the consummation of the business combination and after payment in respect of all stockholder redemptions, the payoff amount and any payments due to Excess Noteholders and 1.5 Lien Noteholders in the exchange, if any, unrestricted and available cash equaling or exceeding $50,000,000. This condition to the respective obligations of the parties is for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of MUDS public shares by public stockholders, this condition is not met (or waived), then MUDS or Seller may elect not to consummate the business combination. In addition, in no event will MUDS redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001. Holders of public warrants do not have redemption rights in connection with the business combination.
Prior to exercising redemption rights, stockholders should verify the market price of MUDS Class A common stock as they may receive higher proceeds from the sale of their MUDS Class A common stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. MUDS cannot assure you that you will be able to sell your MUDS Class A common stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in MUDS Class A common stock when you wish to sell your shares.
If you exercise your redemption rights, the shares of MUDS Class A common stock will cease to be outstanding immediately prior to the business combination and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the trust account. You will no longer own those shares and will have no right to participate in, or have any interest in, the future growth of MUDS, if any. You will be entitled to receive cash for these shares only if you properly and timely demand redemption.
If the business combination is not approved and MUDS does not consummate an initial business combination by August 12, 2020, MUDS will be required to dissolve and liquidate the trust account by returning the then remaining funds in such account to the public stockholders and MUDS warrants will expire worthless.
Appraisal Rights
Appraisal rights are not available to holders of MUDS common stock in connection with the business combination.
Proxy Solicitation Costs
MUDS is soliciting proxies on behalf of the MUDS Board. This proxy solicitation is being made by mail, but also may be made by telephone or in person. MUDS has engaged Advantage Proxy, Inc. to assist in the solicitation of proxies for the MUDS special meeting. MUDS and its directors, officers and employees may also solicit proxies in person. MUDS will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions.
MUDS will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. MUDS will pay Advantage Proxy, Inc. a fee of  $7,500, plus costs and expenses, which fee also includes Advantage Proxy, Inc. acting as the inspector of elections at the MUDS special meeting. MUDS will reimburse Advantage Proxy, Inc. for reasonable out-of-pocket expenses and will indemnify Advantage Proxy, Inc. and its affiliates against certain claims, liabilities, losses, damages and expenses. MUDS will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of MUDS common stock for their expenses in forwarding soliciting materials to beneficial owners of the MUDS common stock and in obtaining voting instructions from th