S-4/A 1 tm207279-7_s4a.htm S-4/A tm207279-7_s4a - block - 93.404178s
As filed with the United States Securities and Exchange Commission on April 24, 2020
Registration No. 333-236460
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2
to
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 fee(3)
Class A common stock, issued as part of the business combination, par value $0.0001 per share
15,512,091
$ 10.00 $ 155,120,910 $ 20,134.69
(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.
(3)
An amount of $22,529.21 was previously paid on February 14, 2020.
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 (as amended from time to time, 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 APRIL 24, 2020
JOINT PROXY STATEMENT/PROSPECTUS FOR SPECIAL MEETING OF MUDRICK CAPITAL ACQUISITION CORPORATION AND SPECIAL MEETING OF HYCROFT MINING CORPORATION
PROSPECTUS FOR
15,512,091 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 and amended on February 26, 2020 (as it may be further 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”), (B) Seller’s obligations under the Sprott Credit Agreement (as defined herein) and (C) Seller’s liabilities and obligations under the Seller Warrant Agreement (as defined herein) (collectively, the “debt and warrant 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 the 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 15,512,091 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 20,871,243 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 pursuant to the Subscription/Backstop Agreements, 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 2,000,000 shares of HYMC Class A common stock issued in connection with an incremental equity investment in an aggregate amount of up to $20,000,000, (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 received in connection with the business combination in exchange for restricted stock units convertible into shares of Seller common stock, (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”), (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”) and (N) up to 12,721,623 Seller warrants (as defined herein) assumed by HYMC in the business combination, which as of May 1, 2020 were each exercisable into 2.239 shares of Seller common stock at a price of $5.03 per share, and will become exercisable following consummation of the business combination to purchase shares of HYMC Class A common stock, subject to an equitable adjustment, in accordance with the terms of the Seller Warrant Agreement, of both the exercise price and number of shares of HYMC Class A common stock into which such Seller warrants will be exercisable. The Seller warrants are currently out-of-the money as the exercise price of $5.03 per share is substantially higher than the value attributable to the shares of Seller common stock in the business combination, which, based upon the foregoing assumptions of outstanding shares of Seller common stock (including an assumed conversion of the Second Lien Notes) as of May 29, 2020, is estimated to range from approximately $1.01 per share in the no redemption scenario to approximately $1.12 per share in the maximum redemption scenario.
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 MAY [], 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 May [•], 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 and amended on February 26, 2020 (as it may be further 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”), (B) Seller’s obligations under the Sprott Credit Agreement (as defined herein) and (C) Seller’s liabilities and obligations under the Seller Warrant Agreement (as defined herein) (collectively, the “debt and warrant 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 the 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 410,000,000, which would consist of (a) 400,000,000 shares of Class A common stock and (b) 10,000,000 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 to 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 in respect of MUDS;
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 to 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 there is exclusive federal or concurrent federal and state 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 upon 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 April 17, 2020. Only stockholders of record at the close of business on that date may vote at the MUDS special meeting or any adjournment thereof.
While all stockholders are cordially invited to attend the MUDS special meeting, due to the impact of the novel coronavirus disease COVID-19 and potential limitations on in person meetings, to ensure that as many shares as possible are represented, we strongly encourage you to vote in advance of the MUDS special meeting.
In addition, as part of our effort to maintain a safe and healthy environment at the MUDS special meeting and to protect the well-being of our stockholders, we are closely monitoring statements and guidance issued by the World Health Organization (who.int) and the Centers for Disease Control and Prevention (cdc.gov) regarding the novel coronavirus disease, COVID-19. While we currently intend to hold the MUDS special meeting in person, in the event it is not possible or if we determine it is inadvisable to hold the MUDS special meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting by means of remote communication. If we do hold the MUDS special meeting in person, we may impose additional procedures or limitations on meeting attendees consistent with public health guidance. Any such updates (including if we decide to use remote communication) will be announced by press release and included in updated information filed by MUDS with the SEC, which would be available through the EDGAR system at www.sec.gov.
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, assuming consummation of the business combination on May 29, 2020, the value of the aggregate consideration in the business combination is expected to be approximately $613,600,000, 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 and warrant 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 entitled “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 approximately 42.9% 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 of any excess of (a) the sum of (w) cash remaining in MUDS’ trust account following the satisfaction of MUDS’ stockholder redemptions, (x) the difference (not below zero) between (A) $65,000,000 and (B) the cash remaining in the trust account in excess of $󰏗0,000,000 following the satisfaction of the MUDS stockholder redemptions, (y) the net proceeds from the forward purchase and (z) the net proceeds from the Sprott Credit Agreement and Sprott Royalty Agreement (as defined herein), over (b) $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 units sold 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, the 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, the Excess Noteholders, the 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 entitled “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 April 17, 2020, this would have amounted to approximately $10.40 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 defined under 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 MAY [], 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 May [•], 2020 at 9:00 a.m. Mountain Time 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 and amended on February 26, 2020 (as it may be further 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 April 17, 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.
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.
While all stockholders are cordially invited to attend the Seller special meeting, due to the impact of the novel coronavirus disease COVID-19 and potential limitations on in person meetings, to ensure that as many shares as possible are represented, we strongly encourage you to vote in advance of the Seller special meeting.
In addition, as part of our effort to maintain a safe and healthy environment at the Seller special meeting and to protect the well-being of our stockholders, we are closely monitoring statements and guidance issued by the World Health Organization (who.int) and the Centers for Disease Control and Prevention (cdc.gov) regarding the novel coronavirus disease, COVID-19. While we currently intend to hold the Seller special meeting in person in the event it is not possible or determined it is inadvisable to hold the Seller special meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the Seller special meeting solely by means of remote communication.
 

 
If we do hold the meeting in person, we may impose additional procedures or limitations on meeting attendees consistent with applicable public health guidelines. We plan to announce any such updates (including if we decide to use remote communication) by press release and posting on our website at www.hycroftmining.com. We strongly encourage you to regularly check this website for any updates prior to the Seller special meeting. Note that any decision to proceed with a virtual-only meeting does not mean we will utilize a virtual-only format or any means of remote communication for future annual or special meetings.
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 to 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, March 12, 2020, April 16, 2020 and such other dates on which such notes may be issued from time to time pursuant to Note Purchase Agreements between 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 to 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 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 of any excess of (i) the sum of (A) cash remaining in the trust account following the satisfaction of the MUDS stockholder redemptions, if any, (B) the difference (not below zero) between (x) $65,000,000 and (y) the cash remaining in the trust account in excess of $10,000,000 following the satisfaction of the MUDS stockholder
redemptions, (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, over (ii) $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 and warrant 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, (y) the Sprott Credit Agreement and (z) Seller’s liabilities and obligations under the Seller Warrant 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.
 
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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.
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 units sold 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 Mine” means the Hycroft Open Pit Mine, located in Winnemucca, Nevada that produces gold and silver using a heap leach mining process.
 
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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.
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.
 
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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.
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 and amended on February 26, 2020 (as it may be further 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/
 
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Backstop Agreements, the Forward Purchase Contract, the UA Amendment, the Sprott Credit Agreement, 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.
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 Seller, certain of 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 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 issued pursuant to the Seller Warrant Agreement.
Seller Warrant Agreement” means that certain warrant agreement, dated as of October 22, 2015, by and between Seller and Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered trust company, collectively as warrant agent.
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.
 
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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 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 with 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 May [], 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, assuming consummation of the business combination on May 29, 2020, the value of the aggregate consideration in the business combination is expected to be approximately $613,600,000, 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 and warrant 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. Please see the section entitled “The Business Combination — Consideration to Seller Stockholders in the Business Combination” beginning on page [•] of this joint proxy statement/prospectus 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 May [•], 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.
As part of the precautions with respect to the novel coronavirus disease, COVID-19, we are planning for the possibility that the MUDS special meeting will be held solely by means of remote communication. If we make such a determination, we will announce by press release the details on how to participate as soon as practicable, which information will also be included in updated information filed by MUDS with the SEC, which would be available through the EDGAR system at www.sec.gov.
 
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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.
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 410,00,000, which would consist of (a) 400,000,000 shares of Class A common stock and (b) 10,000,000 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 to 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 in respect of MUDS;
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 to 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 there is exclusive federal or concurrent federal and state 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
 
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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”;
10.
Proposal No. 10 — The Incentive Plan Proposal — To consider and vote upon 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, please see the section entitled “The Purchase Agreement and Related Agreements — Conditions to Closing of the Business Combination” of this joint proxy statement/prospectus.
 
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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.
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 approximately 42.9% 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, 6,054,644 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’
 
11

 
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 42.9% 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.
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 April 17, 2020, the record date for the MUDS special meeting. As of the close of business on the record date, there were 12,109,287 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 approximately 42.9% 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.
 
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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, 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(d) 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 $71,848,371 as of April 17, 2020, the estimated per share redemption price would have been approximately $10.40. 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(d) 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
 
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redemptions, the payoff amount and any payments due to the Excess Noteholders and the 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.
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 5:00 p.m Eastern Time on May [•], 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 defined under 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 defined under 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
 
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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 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” of this joint proxy statement/prospectus 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.
 
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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” of this joint proxy statement/prospectus for information regarding the parties’ specific termination rights.
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” of this joint proxy statement/prospectus.
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 will be the concentration of ownership and voting power of HYMC common stock upon the closing of the business combination?
A:
It is anticipated that, upon completion of the business combination, assuming that no shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders and subject to the assumptions set forth below, the concentration of ownership of HYMC immediately following the consummation of the business combination will be as follows:
Beneficial owners
Ownership
Percentage
MUDS’ existing public stockholders
13.8%
Sponsor
12.8%
Mudrick Capital Management L.P. and affiliated fund entities
27.3%
Whitebox Advisors and affiliated fund entities
19.3%
Highbridge Capital Management LLC and affiliated fund entities
11.0%
Aristeia Capital, LLC and affiliated fund entities
7.4%
Wolverine Asset Management, LLC and affiliated fund entities
3.6%
Seller stockholders (collectively, but excluding the Initial Subscribers)
1.0%
Cantor
0.9%
Lender
1.0%
Investors in incremental private placement equity investment
2.0%
 
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Alternatively, it is anticipated that, upon completion of the business combination, assuming all shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders and subject to the assumptions set forth below, the concentration of ownership of HYMC immediately following the consummation of the business combination will be as follows:
Beneficial owners
Ownership
Percentage
MUDS’ existing public stockholders
0.0%
Sponsor
9.5%
Mudrick Capital Management L.P. and affiliated fund entities
33.5%
Whitebox Advisors and affiliated fund entities
23.6%
Highbridge Capital Management LLC and affiliated fund entities
13.5%
Aristeia Capital, LLC and affiliated fund entities
9.0%
Wolverine Asset Management, LLC and affiliated fund entities
4.4%
Seller stockholders (collectively, but excluding the Initial Subscribers)
1.1%
Cantor
0.5%
Lender
1.0%
Investors in incremental private placement equity investment
4.0%
The ownership percentages of HYMC set forth in the foregoing tables (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, including Seller warrants assumed in 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) the completion of the business combination occurs on May 29, 2020, (2) the issuance of 315,163 shares (in the no redemption scenario) and 6,500,000 shares (in the maximum redemption scenario) of HYMC Class A common stock to the Initial Subscribers in the private investment, for aggregate gross proceeds of $3,151,630 or $65,000,000, respectively, (3) the issuance of 1,000,000 shares (in the no redemption scenario) and 2,000,000 shares (in the maximum redemption scenario) of HYMC Class A common stock in an incremental equity investment for aggregate gross proceeds of $10,000,000 or $20,000,000, respectively, (4) the issuance of 1% of the outstanding shares of HYMC Class A common stock to the Lender pursuant to the Sprott Credit Agreement, (5) 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, (6) 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 clauses (b)(2) and (b)(3) hereof, resulting in the surrender of 1,941,667 shares (in the no redemption scenario) or 3,584,616 shares (in the maximum redemption scenario) of MUDS Class B common stock, respectively, (7) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (b)(2) and (b)(3) hereof, shall result in the issuance of approximately 456,104 shares (in the no redemption scenario) or 237,067 shares (in the maximum redemption scenario) of HYMC Class A common stock, respectively, and (8) that approximately 50,000,610 shares (in the no redemption scenario) or 50,057,687 shares (in the maximum redemption scenario) 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.” Please see the section entitled Beneficial Ownership of Securities for more information regarding beneficial ownership of MUDS Class A common stock and projected beneficial ownership of HYMC Class A common stock following the consummation of the business combination. Please see the section entitled “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.
 
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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 April 17, 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 May [•], 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 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,
 
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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 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
 
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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” of this joint proxy statement/prospectus.
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?” of this joint proxy statement/prospectus. 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 May [•], 2020, at 9:00 a.m. Mountain Time, unless the Seller special meeting is adjourned.
As part of our precautions regarding the novel coronavirus, COVID-19, we are planning for the possibility that the Seller special meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so as soon as practicable, and provide details on how to participate, which will be available on our website at www.hycroftmining.com. We strongly encourage you to regularly check this website for any updates prior to the Seller special meeting.
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”;
 
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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 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 (April 17, 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.
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 May [•], 2020).
As part of our precautions regarding the novel coronavirus, COVID-19, we are planning for the possibility that the Seller special meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so as soon as practicable, and provide details on how to participate, which will be available on our website at www.hycroftmining.com. We strongly encourage you to regularly check this website for any updates prior to the Seller special meeting.
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 2,897,568 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, 1,448,785 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.
 
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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.
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, please see “Seller Special Meeting” beginning on page [•] of this joint 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, please see the section entitled “Seller Special Meeting — Recommendation to Seller’s Stockholders” beginning on page [•] of this joint proxy statement/prospectus.
Q:
How do other Seller stockholders intend to vote?
A:
In connection with the business combination, 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, 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
 
23

 
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.
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.
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.
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 Seller 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 consummation of the business combination, at which time the Seller Warrant Agreement will be assumed by HYMC and the Seller warrants, subject to an equitable adjustment in accordance with the terms of the Seller Warrant Agreement, will be exercisable to purchase shares of HYMC Class A common stock. 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 May 1, 2020) of $5.03 per share, which is substantially in excess of the value attributed to shares of Seller common stock in the business combination, which is estimated, as of May 29, 2020, to range from approximately $1.01 per share to $1.12 per share depending upon the number of shares of MUDS Class A common stock redeemed and the number of shares of HYMC Class A common stock issued to Seller and Seller’s noteholders in the business combination.
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,
 
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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 May [•], 2020) or attend the Seller special meeting in person and vote. 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 mailing it to Seller’s secretary to the address above or emailing it to Seller at info@hycroftmining.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
 
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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, please see “Material Tax Considerations” of this joint proxy statement/prospectus.
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. On February 26, 2020, we amended the Purchase Agreement to provide for the assumption by HYMC of Seller's liabilities and obligations under the Seller Warrant Agreement upon consummation of the transactions contemplated by the Purchase Agreement.

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 and warrant 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 units sold in the IPO
 
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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.

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” of this joint proxy statement/prospectus.

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” of this joint proxy statement/prospectus.

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, assuming consummation of the business combination on May 29, 2020, the value of the aggregate consideration in the business combination is expected to be approximately $613,600,000, 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 and
 
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warrant 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 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 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” of this joint proxy statement/prospectus.

It is anticipated that, upon completion of the business combination, assuming that no shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders and subject to the assumptions set forth below, the concentration of ownership of HYMC immediately following the consummation of the business combination will be as follows:
Beneficial owners
Ownership Percentage
MUDS’ existing public stockholders
13.8%
Sponsor
12.8%
Mudrick Capital Management L.P. and affiliated fund entities
27.3%
Whitebox Advisors and affiliated fund entities
19.3%
Highbridge Capital Management LLC and affiliated fund entities
11.0%
Aristeia Capital, LLC and affiliated fund entities
7.4%
Wolverine Asset Management, LLC and affiliated fund entities
3.6%
Seller stockholders (collectively, but excluding the Initial Subscribers)
1.0%
Cantor
0.9%
Lender
1.0%
Investors in incremental private placement equity investment
2.0%
Alternatively, it is anticipated that, upon completion of the business combination, assuming all shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders and subject to the assumptions set forth below, the concentration of ownership of HYMC immediately following the consummation of the business combination will be as follows:
Beneficial owners
Ownership Percentage
MUDS’ existing public stockholders
0.0%
Sponsor
9.5%
Mudrick Capital Management L.P. and affiliated fund entities
33.5%
Whitebox Advisors and affiliated fund entities
23.6%
Highbridge Capital Management LLC and affiliated fund entities
13.5%
Aristeia Capital, LLC and affiliated fund entities
9.0%
Wolverine Asset Management, LLC and affiliated fund entities
4.4%
Seller stockholders (collectively, but excluding the Initial Subscribers)
1.1%
Cantor
0.5%
Lender
1.0%
Investors in incremental private placement equity investment
4.0%
The ownership percentages of HYMC set forth in the foregoing tables (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, including Seller warrants assumed in the business combination, and (2) any
 
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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) the completion of the business combination occurs on May 29, 2020, (2) the issuance of 315,163 shares (in the no redemption scenario) and 6,500,000 shares (in the maximum redemption scenario) of HYMC Class A common stock to the Initial Subscribers in the private investment, for aggregate gross proceeds of $3,151,630 or $65,000,000, respectively, (3) the issuance of 1,000,000 shares (in the no redemption scenario) and 2,000,000 shares (in the maximum redemption scenario) of HYMC Class A common stock in an incremental equity investment for aggregate gross proceeds of $10,000,000 or $20,000,000, respectively, (4) the issuance of 1% of the outstanding shares of HYMC Class A common stock to the Lender pursuant to the Sprott Credit Agreement, (5) 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, (6) 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 clauses (b)(2) and (b)(3) hereof, resulting in the surrender of 1,941,667 shares (in the no redemption scenario) or 3,584,616 shares (in the maximum redemption scenario) of MUDS Class B common stock, respectively, (7) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (b)(2) and (b)(3) hereof, shall result in the issuance of approximately 456,104 shares (in the no redemption scenario) or 237,067 shares (in the maximum redemption scenario) of HYMC Class A common stock, respectively, and (8) that approximately 50,000,610 shares (in the no redemption scenario) and 50,057,687 shares (in the maximum redemption scenario) 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.” Please see the section entitled Beneficial Ownership of Securities for more information regarding beneficial ownership of MUDS Class A common stock and projected beneficial ownership of HYMC Class A common stock following the consummation of the business combination. Please see the section entitled “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.

Following the consummation of the business combination, HYMC does not intend to operate as a “Controlled Company” under the definition of the NASDAQ stock exchange.

MUDS’ management and the MUDS Board considered various factors in determining whether to approve the Purchase Agreement and the business combination. Please 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”;

Proposal No. 10 — The Incentive Plan Proposal — To consider and vote upon 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
 
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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” of this joint proxy statement/prospectus. 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 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 May [•], 2020, at 9:00 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 “Seller Special Meeting” of this joint 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” of this joint proxy statement/prospectus.

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” of this joint proxy statement/prospectus.

The proposed business combination involves numerous risks. For more information about these risks, please see the section entitled “Risk Factors” of this joint proxy statement/prospectus.

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 of MUDS 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 approximately 648,950 shares of Seller common stock, and, as of April 24, 2020, an aggregate of $41.8 million in principal amount of Seller’s First Lien Notes, an aggregate of $57.3 million in principal amount of Seller’s 1.5 Lien Notes, including accrued interest, an aggregate of $84.7 million in principal amount of Seller’s Second Lien Notes, including accrued interest, and an aggregate of $46.5 million in principal amount of Seller’s 1.25 Lien Notes, including accrued interest. In addition, Mudrick Capital has the right to receive any payments made in respect of the phantom shares that were awarded to Mr. Kirsch in his capacity as a non-employee director of the Seller since his appointment to the Seller Board in October 2015, which will result in the payment of approximately $0.5 million in cash to Mudrick Capital in connection with the consummation of the business combination. It is anticipated that Mr. Kirsch will remain on the board of directors of HYMC following the closing of the business combination. 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 evaluating and negotiating the business
 
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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. 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” beginning on pages [•] and [•], respectively, of this joint proxy statement/prospectus 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, including Seller warrants assumed in 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) the completion of the business combination occurs on May 29, 2020, (2) all shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders, (3) the issuance of 6,500,000 shares of HYMC Class A common stock to the Initial Subscribers in the private investment, for aggregate gross proceeds of $65,000,000, (4) the issuance of 2,000,000 shares of HYMC Class A common stock in an incremental equity financing for aggregate gross proceeds of $20,000,000, (5) the issuance of 1% of the outstanding shares of HYMC Class A common stock to the Lender pursuant to the Sprott Credit Agreement, (6) 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, (7) 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 clauses (b)(2), (b)(3) and (b)(4) hereof, resulting in the surrender of approximately 3,584,616 shares of MUDS Class B common stock, (8) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (b)(2), (b)(3) and (b)(4) hereof, shall result in the issuance of approximately 237,067 shares of HYMC Class A common stock and (9) that approximately 50,057,687 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.
 
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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.
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.
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.
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.
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” of this joint proxy statement/prospectus.
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
 
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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.
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
The Purchase Agreement was amended on February 26, 2020 to provide for the assumption by HYMC of Seller’s liabilities and obligations under the Seller Warrant Agreement upon consummation of the transactions contemplated under the Purchase Agreement. Subject to the terms and conditions of the Purchase Agreement, each warrant of Seller outstanding and unexercised immediately prior to the effective time will be assumed by HYMC and be exercisable to purchase HYMC Class A common stock subject to an equitable adjustment of the exercise price and number of shares into which such warrants are exercisable following consummation of the transactions contemplated by the Purchase Agreement. A Seller warrant holder is 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 participate in the distribution of purchase shares pursuant to the plan of dissolution must exercise their Seller warrants at a price (as of May 1, 2020) of $5.03 per share, which is substantially in excess of the value attributed to shares of Seller common stock in the business combination, which is estimated, as of May 29, 2020, to range from approximately $1.01 per share to $1.12 per share depending upon the number of shares of MUDS Class A common stock redeemed and the number of shares of HYMC Class A common stock issued to Seller and Seller’s noteholders in the business combination, prior to the consummation of the business combination, at which time the Seller Warrant Agreement will be assumed by HYMC and the Seller warrants, subject to an equitable adjustment in accordance with the terms of the Seller Warrant Agreement, will be exercisable to purchase shares of HYMC Class A common stock, respectively. Seller currently anticipates filing such certificate of dissolution promptly following the consummation of the business combination. Pursuant to the Seller Warrant Agreement to be assumed by HYMC under the Purchase Agreement in connection with the consummation of the business combination, because the HYMC common stock into which the Seller warrants will be exercisable following the closing will be listed for trading on a national securities exchange, HYMC will use commercially reasonable efforts to list the Seller warrants for trading on such national securities exchange (subject to applicable listing requirements).
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” of this joint proxy statement/prospectus.
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
 
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more information regarding the Seller Support Agreement, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Seller Support Agreement” of this joint proxy statement/prospectus.
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” of this joint proxy statement/prospectus.
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 Termination Letter, please see the section entitled “The Purchase Agreement and Related Agreements — Related Agreements — Trust Termination Letter” of this joint proxy statement/prospectus.
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” of this joint proxy statement/prospectus.
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 and warrant 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” of this joint proxy statement/prospectus.
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” of this joint proxy statement/prospectus.
 
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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 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” of this joint proxy statement/prospectus.
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, piggy-back and shelf registration rights, subject to cut-back provisions. HYMC may be required to register up to approximately 48.3 million shares of HYMC Class A common stock pursuant to the Amended and Restated Registration Rights Agreement. 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” of this joint proxy statement/prospectus.
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 units sold 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” of this joint proxy statement/prospectus.
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, 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.
 
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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 Credit Agreement, 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 and warrant 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” of this joint proxy statement/prospectus.
Organizational Structure
The following diagram depicts the current ownership structure of Seller and its subsidiaries (percentages shown as basic ownership):
[MISSING IMAGE: tm207279d3-fc_orgstr4c.jpg]
 
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The following diagram illustrates the ownership structure of HYMC immediately following the business combination (percentages shown reflect the maximum redemption scenario):
[MISSING IMAGE: tm207279d3-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.
It is anticipated that, upon completion of the business combination, assuming all shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders and subject to the assumptions set forth below, the concentration of ownership of HYMC immediately following the consummation of the business combination will be as follows:
Beneficial owners
Ownership Percentage
MUDS’ existing public stockholders
0.0%
Sponsor
9.5%
Mudrick Capital Management L.P. and affiliated fund entities
33.5%
Whitebox Advisors and affiliated fund entities
23.6%
Highbridge Capital Management LLC and affiliated fund entities
13.5%
Aristeia Capital, LLC and affiliated fund entities
9.0%
Wolverine Asset Management, LLC and affiliated fund entities
4.4%
Seller stockholders (collectively, but excluding the Initial Subscribers)
1.1%
Cantor
0.5%
Lender
1.0%
Investors in incremental private placement equity investment
4.0%
Alternatively, it is anticipated that, upon completion of the business combination, assuming that no shares of MUDS Class A common stock are elected to be redeemed by MUDS stockholders and subject to
 
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the assumptions set forth below, the concentration of ownership of HYMC immediately following the consummation of the business combination will be as follows:
Beneficial owners
Ownership Percentage
MUDS’ existing public stockholders
13.8%
Sponsor
12.8%
Mudrick Capital Management L.P. and affiliated fund entities
27.3%
Whitebox Advisors and affiliated fund entities
19.3%
Highbridge Capital Management LLC and affiliated fund entities
11.0%
Aristeia Capital, LLC and affiliated fund entities
7.4%
Wolverine Asset Management, LLC and affiliated fund entities
3.6%
Seller stockholders (collectively, but excluding the Initial Subscribers)
1.0%
Cantor
0.9%
Lender
1.0%
Investors in incremental private placement equity investment
2.0%
The ownership percentages of HYMC set forth in the foregoing tables (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, including Seller warrants assumed in 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) the completion of the business combination occurs on May 29, 2020, (2) the issuance of 315,163 shares (in the no redemption scenario) and 6,500,000 shares (in the maximum redemption scenario) of HYMC Class A common stock to the Initial Subscribers in the private investment, for aggregate gross proceeds of $3,151,630 or $65,000,000, respectively, (3) the issuance of 1,000,000 shares (in the no redemption scenario) and 2,000,000 shares (in the maximum redemption scenario) of HYMC Class A common stock in an incremental equity investment for aggregate gross proceeds of $10,000,000 or $20,000,000, respectively, (4) the issuance of 1% of the outstanding shares of HYMC Class A common stock to the Lender pursuant to the Sprott Credit Agreement, (5) 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, (6) 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 clauses (b)(2) and (b)(3) hereof, resulting in the surrender of 1,941,667 shares (in the no redemption scenario) or 3,584,616 shares (in the maximum redemption scenario) of MUDS Class B common stock, respectively, (7) the consummation of the underwriting commission issuance, which, on the basis of the assumptions set forth in clauses (b)(2) and (b)(3) hereof, shall result in the issuance of approximately 456,104 shares (in the no redemption scenario) or 237,067 shares (in the maximum redemption scenario) of HYMC Class A common stock, respectively, and (8) that approximately 50,000,610 (in the no redemption scenario) or 50,057,687 shares (in the maximum redemption scenario) 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.” Please see the section entitled Beneficial Ownership of Securities for more information regarding beneficial ownership of MUDS Class A common stock and projected beneficial ownership of HYMC Class A common stock following the consummation of the business combination. Please see the section entitled “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.
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
 
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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 April 17, 2020, this would have amounted to approximately $10.40 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 defined under 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 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” of this joint proxy statement/prospectus 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” of this joint proxy statement/prospectus 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 410,000,000, which would consist of (a) 400,000,000 shares of Class A common stock and (b) 10,000,000 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 to 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 in respect of MUDS;
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 to approve a provision in the proposed charter that is substantially similar to Section 203 of the DGCL, but excludes
 
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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 there is exclusive federal or concurrent federal and state 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.
We refer to Proposals No. 2 – 8 collectively as the “Charter Proposals”. Please see the sections entitled “Proposals 2 Through 8 — The Charter Proposals” of this joint proxy statement/prospectus 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” of this joint proxy statement/prospectus.
Date, Time and Place of the MUDS Special Meeting
The MUDS special meeting will be held on May [•], 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.
 
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Voting Power; Record Date for the MUDS Special Meeting
Only MUDS’ stockholders of record at the close of business on April 17, 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 12,109,287 shares of common stock outstanding and entitled to vote, of which 6,909,287 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 fact that four of the seven director nominees to the HYMC board of directors are current directors of Seller (and such nominees are therefore expected to comprise a majority of the HYMC board of directors following the business combination), 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. At any redemption level, including the maximum, Seller’s common stockholders prior to the consummation of the business combination (and after issuance of additional shares of Seller common stock pursuant to the conversion of the Second Lien Notes) and the holders of the Excess Notes and the 1.5 Lien Notes receiving shares of MUDS Class A common stock in exchange for their notes, will hold more than 50% at a minimum, and up to approximately 94% at a maximum, of the total shares of MUDS Class A common stock which will be issued and outstanding upon consummation of the business combination.
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. Please see the section entitled “The Business Combination — Accounting Treatment” of this joint proxy statement/prospectus for more information.
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” of this joint proxy statement/prospectus.
Interests of Certain Persons in the Business Combination
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 of MUDS 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 approximately 648,950 shares of Seller common stock, and, as of April 24, 2020, an aggregate of $41.8
 
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million in principal amount of Seller’s First Lien Notes, an aggregate of $57.3 million in principal amount of Seller’s 1.5 Lien Notes, including accrued interest, an aggregate of $84.7 million in principal amount of Seller’s Second Lien Notes, including accrued interest, and an aggregate of $46.5 million in principal amount of Seller’s 1.25 Lien Notes, including accrued interest. In addition, Mudrick Capital has the right to receive any payments made in respect of the phantom shares that were awarded to Mr. Kirsch in his capacity as a non-employee director of the Seller since his appointment to the Seller Board in October 2015, which will result in the payment of approximately $0.5 million in cash to Mudrick Capital in connection with the consummation of the business combination. It is anticipated that Mr. Kirsch will remain on the board of directors of HYMC following the closing of the business combination. 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 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.
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” beginning on pages [•] and [•], respectively, of this joint proxy statement/prospectus 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” of this joint proxy statement/prospectus.
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 Plan 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;

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;
 
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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” of this joint proxy statement/prospectus.
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 Notification and Report Forms with the Antitrust Division and the FTC or until early termination is granted.
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
 
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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. On January 28, 2020, MUDS and Seller filed the required forms under the HSR Act with Antitrust Division and the FTC and requested early termination of the HSR Act 30-day waiting period, which was granted on February 25, 2020.
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 42.9% 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 MUDS special meeting is in the best interests of MUDS and MUDS’ stockholders and recommends that its stockholders vote “FOR” each of the proposals.
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
 
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their interests as stockholders, sponsor and certain members of the MUDS Board and officers of MUDS 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 approximately 648,950 shares of Seller common stock, and, as of April 24, 2020, an aggregate of $41.8 million in principal amount of Seller’s First Lien Notes, an aggregate of $57.3 million in principal amount of Seller’s 1.5 Lien Notes, including accrued interest, an aggregate of $84.7 million in principal amount of Seller’s Second Lien Notes, including accrued interest, and an aggregate of $46.5 million in principal amount of Seller’s 1.25 Lien Notes, including accrued interest. In addition, Mudrick Capital has the right to receive any payments made in respect of the phantom shares that were awarded to Mr. Kirsch in his capacity as a non-employee director of the Seller since his appointment to the Seller Board in October 2015, which will result in the payment of approximately $0.5 million in cash to Mudrick Capital in connection with the consummation of the business combination. It is anticipated that Mr. Kirsch will remain on the board of directors of HYMC following the closing of the business combination. 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 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. Please see the sections “The Business Combination — Interests of Certain Persons in the Business Combination” and “Special Meeting of MUDS Stockholders — Recommendation to MUDS’ Stockholders” beginning on pages [•] and [•], respectively of this joint proxy statement/prospectus for more information.
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
 
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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 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, please see the section entitled “The Business Combination — Opinion of MUDS’ Financial Advisor” beginning on page [•] of this joint proxy statement/prospectus.
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 Seller are urged to read the entire opinion and the section entitled “The Business Combination — Opinion of Seller’s Financial Advisor” of this joint proxy statement/prospectus 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.
 
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For a further discussion of Greenhill’s opinion, please see the section entitled “The Business Combination — Opinion of Seller’s Financial Advisor” beginning on page [•] of this joint proxy statement/prospectus.
Special Meeting of Seller Stockholders
Date, Time and Place of Special Meeting of Seller’s Stockholders
The Seller special meeting will be held at 9:00 a.m. Mountain Time on May [•], 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.
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 2,897,568 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.
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, 1,448,785 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 [•] of this joint proxy statement/prospectus.
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
 
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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 15,213,372 shares of HYMC Class A common stock, the directors and officers of Seller may be deemed to collectively beneficially own up to approximately 13.5% of the outstanding stock of HYMC.
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. Please see the sections entitled Risk FactorsandSeller Special Meeting — Recommendation to Seller Stockholdersof this joint proxy statement/prospectus for 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 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 April 2, 2020, December 31, 2019 and December 31, 2018, were $1,617, $1,515 and $1,279 per ounce for gold, respectively, and $14.17, $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.
Our activities may be adversely affected by the COVID-19 pandemic, whether those effects are local, nationwide or global. Matters outside our control may prevent us from executing on our mining operations, limit travel of Company representatives, adversely affect the health and welfare of Company personnel or prevent important vendors and contractors from performing normal and contracted activities, including mining operations.
The current COVID-19 pandemic is significantly impacting the national and global economy and commodity and financial markets. The full extent and impact of the COVID-19 pandemic is unknown and to date has included extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices (including precious metals) and has raised the prospect of a global recession. The response to COVID-19 has led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility and a general reduction in consumer activity, globally. Matters outside our control have affected our business and operations and may continue to: prevent us from executing on our mining operations; limit travel of Hycroft representatives, including between our corporate headquarters in Colorado and the Hycroft Mine in Nevada; adversely affect the health and welfare of Hycroft personnel; or prevent important vendors and contractors from performing normal and contracted activities, including mining operations. If significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures or other restrictions in connection with the COVID-19 pandemic, our operations will likely be adversely impacted. It is possible that the continued spread of COVID-19 could also further cause disruption in our supply chains, adversely affect our business partners, delay our mining operations or cause other unpredictable events.
We, our people, investors, contractors or other stakeholders, have been and may continue to be limited or prevented from travel or normal attendance to activities in conducting the Hycroft business, including mining operations, and conducting presentations, meetings or other activities in connection with this business combination and related transactions. The spread of COVID-19 throughout Colorado and Nevada may result in our employees being forced to work from home or missing work if they or a member of their family contract COVID-19, which could harm our operations and negatively impact our financial condition. We have and may continue to also be limited or prevented from receiving goods or services from contractors. Decisions beyond our control, such as canceled events, restricted travel, barriers to entry or other factors may affect our ability to accomplish drilling programs, mining operations, equity raising activities, and other needs that would normally be accomplished without such limitations. The extent to which the COVID-19 outbreak will impact our operations, our business and the economy is highly uncertain. We cannot predict the impact of the COVID-19 pandemic, but it may materially and adversely affect our business, financial condition and results of operations.
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.
 
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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, 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,
 
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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 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.
 
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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.
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
 
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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.
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.
 
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Risks Related to the Hycroft Business
Unless the context otherwise requires, for purposes of this section, the termswe,” “us,” “the Company,” “Hycroftorour company refer 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 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;
 
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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 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, pandemic (such as COVID󰓆19), 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:
 
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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.
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.
 
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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, including the impact of global public health crises such as the spread of the novel coronavirus, COVID-19, on the global economy, and applicable regulatory regimes. The prices of 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
 
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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 pro