0001193125-23-042038.txt : 20230217 0001193125-23-042038.hdr.sgml : 20230217 20230217163142 ACCESSION NUMBER: 0001193125-23-042038 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 31 CONFORMED PERIOD OF REPORT: 20230217 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20230217 DATE AS OF CHANGE: 20230217 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MP Materials Corp. / DE CENTRAL INDEX KEY: 0001801368 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 844465489 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-39277 FILM NUMBER: 23643151 BUSINESS ADDRESS: STREET 1: 1700 S. PAVILION CENTER DR. STREET 2: SUITE 800 CITY: LAS VEGAS STATE: NV ZIP: 89135 BUSINESS PHONE: (702) 844-6111 MAIL ADDRESS: STREET 1: 1700 S. PAVILION CENTER DR. STREET 2: SUITE 800 CITY: LAS VEGAS STATE: NV ZIP: 89135 FORMER COMPANY: FORMER CONFORMED NAME: Fortress Value Acquisition Corp. DATE OF NAME CHANGE: 20200128 8-K 1 d390534d8k.htm 8-K 8-K
MP Materials Corp. / DE 0001801368 false 0001801368 2023-02-17 2023-02-17 0001801368 dei:FormerAddressMember 2023-02-17 2023-02-17

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 17, 2023

 

 

MP MATERIALS CORP.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-39277   84-4465489
(State or other jurisdiction
of incorporation)
 

(Commission

File Number)

  (IRS Employer
Identification No.)

1700 S. Pavilion Center Drive, Suite 800

Las Vegas, Nevada 89119

(Address of principal executive offices and Zip Code)

(702) 844-6111

(Registrant’s telephone number, including area code)

6720 Via Austi Parkway, Suite 450

Las Vegas, Nevada 89119

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

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value of $0.0001 per share   MP   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 8.01

Other Events.

On February 16, 2023, MP Materials Corp. (the “Company”) filed an application, which is attached hereto as Exhibit 99.1 (the “Application”), in the Court of Chancery of State of Delaware pursuant to Section 205 of the Delaware General Corporation Law (“DGCL”) seeking to validate a Charter Amendment (as defined below) and the shares that may be issued pursuant thereto to resolve any uncertainty with respect to those matters. On February 16, 2023, the Court of Chancery granted the Company’s motion to expedite proceedings and set a hearing date for the Application to be heard. The hearing has been set for March 6, 2023 at 1:30 p.m. Eastern Time at the Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801.

This Form 8-K constitutes notice of the hearing. If any stockholder of the Company wishes to express a position on the Application, such stockholders of the Company may (i) appear at the hearing or (ii) in advance of the hearing, file a written submission with the Register in Chancery, Leonard L. Williams Justice Center, 500 North King Street, Wilmington, Delaware 19801, referring to the case caption In re MP Materials Corp., C.A. No. 2023-0192-LWW (Del. Ch.). Any such written submissions should also be emailed in advance of the hearings to the Company’s counsel, Edward Micheletti, Skadden, Arps, Slate, Meagher & Flom LLP at edward.micheletti@skadden.com.

Charter Amendment

On November 13, 2020, the stockholders of MP Materials Corp. (the “Company”, then known as Fortress Value Acquisition Corp.), voted at a special meeting of stockholders (the “Special Meeting”) to approve certain matters relating to the business combination in which the Company acquired MP Mine Operations LLC and Secure Natural Resources LLC (the “Business Combination”). Among these matters was a proposal to amend the Company’s then-effective Amended and Restated Certificate of Incorporation dated April 29, 2020, to, among other things, increase the total number of authorized shares of Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”), from 200,000,000 to 450,000,000 shares and increase the number of authorized shares of Preferred Stock, par value $0.0001 per share, from 1,000,000 to 50,000,000 shares (the “Charter Amendment”).

Majority of Shares Approved the Charter Amendment

The Charter Amendment was approved by a majority of the shares of the Company’s Class A Common Stock and Class F Common Stock, voting as a single class, that were outstanding as of the record date for the Special Meeting. At the Special Meeting, the stockholders also voted to approve the Business Combination and, on November 17, 2020, the Company filed its Second Amended and Restated Certificate of Incorporation (the “Charter”) with the Delaware Secretary of State. Although the vote on the Charter Amendment was not structured as a separate class vote by the holders of Class A Common Stock, the Charter Amendment received the approval of the votes of a majority of shares of Class A Common Stock.

A recent decision of the Delaware Court of Chancery has created uncertainty regarding the validity of the Charter Amendment and whether a separate vote of the majority of the then-outstanding shares of Class A Common Stock would have been required under Section 242(b)(2) of the DGCL. In light of the recent Delaware Court of Chancery decision, on February 16, 2023, the Company filed the Application to validate the Charter Amendment and the shares that may be issued pursuant thereto to resolve any uncertainty with respect to those matters. Section 205 of the DGCL permits the Delaware Court of Chancery, in its discretion, to validate potentially defective corporate acts and stock after considering a variety of factors.

If the Company is not successful in the Section 205 proceeding, the uncertainty with respect to the Company’s capitalization resulting from the Delaware Court of Chancery’s decision referenced above could have a material adverse effect on the Company until the underlying issues are definitively resolved.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit
    No.    

  

Description

99.1    Application for Relief Pursuant to 8 Del. C. § 205
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


Cautionary Note on Forward-Looking Statements.

This Current Report on Form 8-K may include “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements are any statements other than statements of historical fact. Forward-looking statements represent our current judgment about possible future events and are often identified by words such as “aim,” “anticipate,” “appears,” “approximately,” “believe,” “continue,” “could,” “designed,” “effect,” “estimate,” “evaluate,” “expect,” “forecast,” “goal,” “initiative,” “intend,” “may,” “objective,” “outlook,” “plan,” “potential,” “priorities,” “project,” “pursue,” “seek,” “should,” “target,” “when,” “will,” “would,” or the negative of any of those words or similar expressions. In making these statements, we rely upon assumptions and analysis based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors we consider appropriate under the circumstances. We believe these judgments are reasonable, but these statements are not guarantees of any future events or financial results, and our actual result may differ materially due to a variety of important factors, many of which are described in our Annual Report on Form 10-K, our subsequently filed Quarterly Reports on Form 10-Q, and our other filings with the U.S. Securities and Exchange Commission. If the Company is unsuccessful in the Section 205 proceeding, the uncertainty with respect to the Company’s capitalization could limit its ability to complete equity or debt financing transactions or issue stock-based compensation to its employees, directors and officers until the underlying issues are definitively resolved and have a material adverse impact on the Company. We caution readers not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors that affect the subject of these statements, except where we are expressly required to do so by law.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    February 17, 2023

 

MP Materials Corp.
By:  

/s/ Elliot D. Hoops

    Elliot D. Hoops
    General Counsel and Secretary
EX-99.1 2 d390534dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

  

EFiled: Feb 16 2023 10:45AM EST

Transaction ID 69162434

Case No. 2023-0192-

   LOGO

 

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

 

   )   
IN RE MP MATERIALS CORP.    )    C.A. No. 2023-             -        
   )   

VERIFIED APPLICATION PURSUANT TO 8 DEL. C. § 205

1. MP Materials Corp. (“MPMC” or the “Company”), a Delaware corporation, by and through its undersigned counsel, hereby brings this Verified Application Pursuant to 8 Del. C. § 205 (“Section 205”) for an Order validating an amendment to the Company’s certificate of incorporation increasing the authorized shares of Class A Common Stock from 200,000,000 to 450,000,000 shares, and increasing the number of authorized shares of Preferred Stock from 1,000,000 to 50,000,000 shares (the “Authorized Share Amendment”).

2. At all times, the Company had a good faith belief that the Authorized Share Amendment was properly approved and adopted in compliance with Delaware law and the governing certificate of incorporation. In light of a recent decision by the Delaware Court of Chancery captioned, Garfield v. Boxed, Inc., 2022 WL 17959766, at *1 (Del. Ch. Dec. 27, 2022), uncertainty has been created around the approval and adoption of the Authorized Share Amendment. Through this Application, the Company seeks to resolve this uncertainty.

3. As explained further herein, the Company has been treating the approval of the Authorized Share Amendment as valid and has taken significant actions in reliance on its validity, including the filing of an amended certificate of incorporation reflecting the increase in authorized shares contemplated by the Authorized Share Amendment, the closing of the Merger and the Company’s listing and public trading of its stock on the New York Stock Exchange.

4. In addition, as explained further herein, the Company’s stockholders would not be harmed by validation of the Authorized Share Amendment. However, the Company and all of the Company’s stockholders would be irreparably harmed if the Authorized Share Amendment is not validated.

5. Accordingly, and for the reasons set forth more fully below, the Court should grant the Application and issue an Order validating the Authorized Share Amendment.1

NATURE OF THE ACTION

6. This action arises out of a de-SPAC transaction completed on November 17, 2020, pursuant to which the Company, a special purpose acquisition company (“SPAC”) formerly known as Fortress Value Acquisition Corp., acquired MP Mine Operations LLC and Secure Natural Resources LLC (the “Merger”).2

 

1 

As set forth in the proposed order to the Motion to Expedite, filed contemporaneously herewith, the Company intends to file a Form 8-K providing notice of the Application in advance of any hearing on the Application, in accordance with the notice procedures set forth in In re Lordstown Motors Corp., C.A. No. 2023-0083-LWW, at 10 (Del. Ch. Feb. 3, 2023) (ORDER), In re Chargepoint Holdings, Inc., C.A. No. 2023-0113-LWW (Del. Ch. Feb. 3, 2023) (ORDER), In re Lucid Group, Inc., C.A. No. 2023-0116-LWW (Del. Ch. Feb. 3, 2023) (ORDER) and In re Fisker Inc., C.A. No. 2023-0119-LWW (Del. Ch. Feb. 3, 2023) (ORDER).

2 

After the Merger, the combined entity changed its name to MP Materials Corp.


7. At the time of the Merger, the Company’s Amended and Restated Certificate of Incorporation (Exhibit A, the “Pre-Merger Charter”) stated that “[t]he total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 221,000,000, consisting of (a) 220,000,000 shares of common stock (the ‘Common Stock’), including (i) 200,000,000 shares of Class A Common Stock (the ‘Class A Common Stock’) and (ii) 20,000,000 shares of Class F Common Stock (the ‘Class F Common Stock’), and (b) 1,000,000 shares of Preferred Stock (the ‘Preferred Stock’).” (Pre-Merger Charter § 4.1)

8. In connection with the Merger, on October 27, 2020, the Company filed a prospectus/proxy statement (Exhibit B, the “Proxy”) informing the Company’s stockholders of a special meeting of the stockholders to be held on November 13, 2020 (the “Special Meeting”) and soliciting stockholder approval of certain proposals to be voted upon at the Special Meeting.

9. In addition to approval of the Merger, among other proposals, the Proxy solicited stockholders to vote to approve an amendment to the Pre-Merger Charter to increase the number of authorized shares of the Company’s Common Stock and Preferred Stock (the “Authorized Share Amendment Proposal”). Specifically, the Authorized Share Amendment Proposal contemplated increasing the number of the authorized shares of the Company’s Class A Common Stock from 200,000,000 to 450,000,000 shares, and increasing the number of authorized shares of Preferred Stock from 1,000,000 to 50,000,000. (Proxy at 306)

10. The Proxy stated that “[a]lthough [the Company] has a sufficient number of authorized but unissued shares of [the Company’s] Common Stock to complete the [Merger] and the other issuances described in” the Proxy, the increase in authorized shares of Class A Common Stock “is desirable and in the best interests of stockholders because it will enhance MPMC’s flexibility to consider and respond to future business needs and opportunities as they arise from time to time following the consummation of the [Merger], without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance.” (Id.)

11. The Proxy stated that the approval of the Authorized Share Amendment Proposal required “the affirmative vote of holders of a majority of the outstanding shares of [the Company’s] Common Stock, voting together as a single class.” (Id. at 305)3

12. On November 13, 2020, the Company held the Special Meeting. At the Special Meeting, a majority of the Company’s stockholders voted in favor of all of the proposals set forth in the Proxy, including the Authorized Share Amendment Proposal. As of the October 12, 2020 record date set for the Special Meeting (the “Record Date”), there were 43,125,000 shares of the Company’s Common Stock outstanding. (Proxy at 76) At the Special Meeting, 29,871,824 shares of the Company’s Common Stock were voted in favor of the Authorized Share Amendment Proposal, representing 69.27% of the total shares outstanding of the Company’s Common Stock. (Exhibit C at 1)

13. Although the vote on the Authorized Share Amendment Proposal was not structured as a separate class vote by the Class A stockholders, the Authorized Share Amendment Proposal received the approval of the votes of a majority of shares of Class A Common Stock. As of the Record Date, there were 34,500,000 shares of Class A Common Stock outstanding and 8,625,000 shares of Class F Common Stock outstanding. (Proxy at 76) A total of 29,871,824 shares of Common Stock approved the Authorized Share Amendment Proposal. (Exhibit C at 1) Even assuming that all 8,625,000 shares of Class F Common Stock voted in favor of the proposals, a minimum of 21,246,824 of the affirmative votes would have been from Class A Common Stock, representing a 61.58% majority of the total shares of Class A Common Stock for the voting in favor of the Authorized Share Amendment Proposal.

14. On November 16, 2020, the Company announced the results of the votes at the Special Meeting, including the approval of the Merger and the Authorized Share Amendment Proposal (Exhibit C), and on November 17, 2020, the Company announced that it had completed and closed the Merger. (Exhibit D)

15. On November 17, 2020, in reliance on the validity of the approval of Authorized Share Amendment Proposal, the Company filed a Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware (Exhibit E, the “Post-Merger Charter”).

16. In connection with the closing of the Merger and a related private placement, the Company issued 121,420,632 shares of Class A Common Stock, such that 155,920,632 shares of the Company’s Class A Common Stock were issued and outstanding as of November 17, 2020.4 (Proxy at 76; Exhibit D at 3-4)

17. On November 18, 2020, the Company’s Class A Common Stock was listed on the New York Stock Exchange, and has been actively traded on that exchange since.

 

3 

As of the Record Date (defined below), there were no shares of Preferred Stock outstanding. Accordingly, there were no holders of Preferred Stock entitled to vote on the increase in the number of authorized shares of Preferred Stock contemplated by the Authorized Share Amendment Proposal.

4 

The Company has since issued additional shares of Class A Common Stock.

 

2


18. On December 27, 2022, this Court issued an opinion in Garfield v. Boxed, Inc. that potentially calls into question the effectiveness of the stockholder approval of the Authorized Share Amendment. 2022 WL 17959766, at *1 (Del. Ch. Dec. 27, 2022). The SPAC in Boxed previously sought stockholder approval to amend its charter to increase the number of authorized shares of Class A common stock in connection with a de-SPAC transaction. Id. The vote was scheduled to be taken as a single vote of all common stockholders voting as a single class. Id. Prior to the stockholder vote, the stockholder plaintiff sent a letter to the SPAC’s board asserting that the proposed voting structure for the vote on the amendment violated the Class A common stockholders’ voting rights pursuant to Section 242(b) of the DGCL and demanded that the company provide a separate class vote for the Class A common stockholders. Id. After receiving the letter, the company amended its merger agreement and supplemented its proxy statement to require a separate vote of the Class A common stockholders to approve the amendment. Id. The stockholder plaintiff then brought an action in this Court seeking attorneys’ fees and expenses for the benefits he purportedly conferred on the company and its stockholders by causing the separate class vote. Id.

19. In determining whether the stockholder plaintiff had conferred a corporate benefit worthy of an award of fees and expenses, the Court considered whether the plaintiff’s demand was meritorious – i.e., whether the plaintiff could “demonstrate that a combined vote of both Class A and Class B common stock … would have violated Section 242(b)(2).” Id. at *4. The Court’s analysis “hinge[d] on whether the [SPAC’s] Charter authorized Class A and Class B as two classes of common stock” – which would require a separate class vote of Class A stockholders – “or as series within a single class” – which would have allowed a combined vote by all common stockholders voting as a single class. Id. at *6. The Court explained that the SPAC’s charter only used the word “class” and not “series” to describe the authorized shares of common stock, and interpreted the charter as designating the Class A and Class B shares each as a class, as opposed to a series, of common stock. Id. at *7, *9.

20. The Court also explained that Section 102(a)(4) requires a corporation’s charter to set forth the number of shares of all classes combined, as well as each separate class, and whether the shares are par or no-par, whereas no such description is required for series of stock. Id. at *8. Because the charter in Boxed separately listed the number of shares of Class A common stock, Class B common stock and preferred stock, and also set forth the par value of the shares of each class of stock, the Court interpreted the charter as authorizing three classes of stock (Class A, Class B and preferred) pursuant to DGCL Section 102(a)(4). Id. at *9. The Court observed that the charter’s provision on preferred stock vested the board with authority to provide for “one or more series of Preferred Stock” and to establish “the number of shares to be included in each such series” by resolution, in accordance with Section 102(a)(4)’s grant of authority to the board to fix by resolution the number and terms of series of stock that are not provided in the charter. Id. The Court explained that the charter did not include a similar provision fixing or authorizing the board to fix any series of common stock, and that “[w]hile that omission may have been accidental, given the requirements of Delaware law this Court cannot presume so and thereafter supply the missing provisions.” Id. (citation omitted). The Court ultimately concluded that the Class A and Class B shares were “each a class of common stock, not series,” and thus the amendment to increase the authorized number of shares of Class A common stock required a separate Class A vote pursuant to DGCL Section 242(b)(2). Id. Accordingly, the Court held, in the context of the plaintiff stockholder’s fee application, that the demand for the separate Class A vote was meritorious when filed. Id. The Court also held that the demand conferred a substantial benefit on the SPAC and its stockholders because, among other things, “[t]he separate vote on the Share Increase Amendment … prevented a cloud from hanging over the Company’s capital structure by ensuring ‘scrupulous adherence to statutory formalities.’” Id. at *11 (citation omitted).

21. Here, like the charter at issue in Boxed, Section 4.1 of the Pre- Merger Charter refers to the shares of Common Stock existing at the time as “Class A Common Stock” and “Class F Common Stock.” Also like the charter in Boxed, Section 4.1 of the Pre-Merger Charter sets forth the number of shares and par value of Class A Common Stock, Class F Common Stock and Preferred Stock. Finally, as in Boxed, Section 4.2 of the Pre-Merger Charter vests the board with authority to provide for “one or more series” of Preferred Stock and to establish by resolution the number of shares and terms of such series, whereas no such “series”- related language exists for common stock. Accordingly, while the Opinion in Boxed was in the context of a fee application and is not a final ruling on the merits, in light of the similarities between the charter at issue in Boxed and the Pre-Merger Charter, the decision suggests that the Court could interpret the Company’s Class A Common Stock as a separate class of stock under the Pre-Merger Charter. Under that interpretation, the Authorized Share Amendment Proposal would have required a separate class vote of the holders of the Company’s Class A Common Stock, which did not occur.

22. Thus, in light of the Boxed opinion, there is a potential uncertainty relating to the Company’s authorized capital structure resulting from the voting structure of the Authorized Share Amendment Proposal.

23. At all times, the Company believed in good faith that the Authorized Share Amendment complied with the DGCL and the Pre-Merger Charter, and has treated the approval of the Authorized Share Amendment Proposal as a valid corporate act in the time since, which is evidenced by the Company’s subsequent actions. Acting in good faith reliance on the effectiveness of the approval of the Authorized Share Amendment Proposal, the Company announced that the vote was successful, filed the Post-Merger Charter with the Secretary of State for the State of Delaware, closed the Merger and listed its stock on the New York Stock Exchange, where it has been actively traded since it was listed.

 

3


24. The Company and all of its stockholders will be harmed if the cloud of uncertainty surrounding the Authorized Share Amendment is not resolved. Among other things, the Company will not be able to certify the amount of shares outstanding or available for issuance. The uncertainty also risks the Company’s ability to timely meet applicable reporting obligations and obtain financing, and harms the ongoing operations of the Company.

25. Further, entering an order validating the Authorized Share Amendment will not cause harm to any of the Company’s stockholders because a majority of shares of Class A Common Stock were already voted in favor of the Authorized Share Amendment Proposal (in addition to the Merger itself) at the Special Meeting.

26. For these reasons, and those discussed below, the Court should validate the Authorized Share Amendment under Section 205(a)(4).

APPLICANT

27. The Company is a Delaware corporation originally formed as a SPAC under the name of Fortress Value Acquisition Corp. on January 24, 2020. Following the completion and closing of the Company’s de-SPAC acquisition on November 17, 2020, the Company renamed itself MP Materials Corp., and describes itself as the largest producer of rare earth materials in the Western Hemisphere. The Company’s stock trades on the New York Stock Exchange under the ticker symbol “MP.”

THE PROXY, SPECIAL MEETING AND MERGER

28. On October 27, 2020, the Company filed the Proxy, setting forth 10 proposals for the Company’s stockholders to vote upon at the Special Meeting to be held on November 13, 2020. Among the 10 proposals was the Authorized Share Amendment Proposal, which contemplated increasing the number of the authorized shares of the Company’s Class A Common Stock from 200,000,000 to 450,000,000 shares, and increasing the number of authorized shares of Preferred Stock from 1,000,000 to 50,000,000 shares. (Proxy at 306)

29. The Proxy stated that “[a]lthough [the Company] has a sufficient number of authorized but unissued shares of [the Company’s] Common Stock to complete the [Merger] and the other issuances described in” the Proxy, the increase in authorized shares of Class A Common Stock “is desirable and in the best interests of stockholders because it will enhance MPMC’s flexibility to consider and respond to future business needs and opportunities as they arise from time to time following the consummation of the [Merger], without incurring the risk, delay and potential expense incident to obtaining stockholder approval for a particular issuance.” (Id.)

30. The Proxy stated that the approval of the Authorized Share Amendment Proposal required “the affirmative vote of holders of a majority of the outstanding shares of [the Company’s] Common Stock, voting together as a single class.” (Id. at 305)

31. On November 13, 2020, the Company held the Special Meeting. At the Special Meeting, a majority of the Company’s stockholders voted

in favor of all of the proposals set forth in the Proxy, including the Authorized Share Amendment Proposal. As of the Record Date, there were 43,125,000 shares of the Company’s Common Stock outstanding. (Proxy at 76) At the Special Meeting, 29,871,824 shares of the Company’s Common Stock were voted in favor of the Authorized Share Amendment Proposal, representing 69.27% of the total shares outstanding of the Company’s Common Stock. (Exhibit C at 1)

32. Although the vote on the Authorized Share Amendment Proposal was not structured as a separate class vote by the Class A stockholders, the Authorized Share Amendment Proposal received the approval of the votes of a majority of shares of Class A Common Stock. As of the Record Date, there were 34,500,000 shares of Class A Common Stock outstanding and 8,625,000 shares of Class F Common Stock outstanding. (Proxy at 76) A total of 29,871,824 shares of Common Stock approved the Authorized Share Amendment Proposal. (Exhibit C at 1) Even assuming that all 8,625,000 shares of Class F Common Stock voted in favor of the proposals, a minimum of 21,246,824 of the affirmative votes would have been from Class A Common Stock, representing a 61.58% majority of the total shares of Class A Common Stock for the voting in favor of the Authorized Share Amendment Proposal.

33. On November 16, 2020, the Company announced the results of the votes at the Special Meeting, including the approval of the Merger and the

Authorized Share Amendment Proposal (Exhibit C), and on November 17, 2020, the Company announced that it had completed and closed the Merger. (Exhibit D)

34. On November 17, 2020, in reliance on the validity of the approval of Authorized Share Amendment Proposal, the Company filed the Post- Merger Charter with the Secretary of State of the State of Delaware.

 

4


35. In connection with the closing of the Merger and a related private placement, the Company issued 121,420,632 shares of Class A Common Stock, such that 155,920,632 shares of the Company’s Class A Common Stock were issued and outstanding as of November 17, 2020. (Proxy at 76; Exhibit D at 3-4)

36. On November 18, 2020, the Company’s Class A Common Stock was listed on the New York Stock Exchange, and has been actively traded on that exchange since.

THE AUTHORIZED SHARE AMENDMENT CAN AND

SHOULD BE VALIDATED UNDER SECTION 205

37. Pursuant to Section 205(a)(4), the Court is empowered to “[d]etermine the validity of any corporate act or transaction and any stock, rights or options to acquire stock.” Under Section 205(a)(4), a corporate act may be validated even though it is not defective. See In re Baxter Int’l Inc., C.A. No. 11609-CB, at 15-16, 18, 23 (Del. Ch. June 22, 2016) (TRANSCRIPT); see also In re Devon Energy Corp., C.A. No. 2021-0143-SG (Del. Ch. Mar. 17, 2021) (ORDER).

38. Further, the Court may use Section 205 to “eliminate equitably any uncertainty regarding the validity” of a corporate act. In re Genelux Corp., 126 A.3d 644, 666-67 (Del. Ch. 2015), vacated in part on other grounds, Genelux Corp. v. Roeder, 143 A.3d 20 (Del. 2016).

39. The Authorized Share Amendment is a “corporate act” susceptible of validation under Section 205(a)(4). See In re Baxter, C.A. No. 11609-CB, Tr. at 20 (“Baxter has undertaken a concrete corporate action, namely, amending its charter.”)

40. In evaluating an application for validation under Section 205, the Court may consider various factors and considerations, including those the Court deems just and equitable. These factors weigh in favor of validating the Authorized Share Amendment under Section 205(a)(4):

 

  a.

The Company believed in good faith that the Authorized Share Amendment was approved in compliance with the DGCL and the Pre-Merger Charter.

 

  b.

The Company has treated the approval of the Authorized Share Amendment as valid and has taken significant actions in reliance on the validity of the Authorized Share Amendment, including announcing the vote was successful, filing the Post-Merger Charter with the Secretary of State for the State of Delaware, closing the Merger and listing its stock on the New York Stock Exchange.

 

  c.

The Company’s stockholders would not be harmed by validation of the Authorized Share Amendment because a majority (approximately 69%) of all shares outstanding, voting together, approved the Authorized Share Amendment. In addition, if calculated as a separate class, at least 61% of Class A Common Stock – a majority of the Class A Common Stock – approved the Authorized Share Amendment Proposal.

 

  d.

Conversely, the Company and all of the Company’s stockholders would be harmed if the Authorized Share Amendment is not validated. Among other things, the Company will not be able to certify the amount of shares outstanding or available for issuance. The uncertainty also risks the Company’s ability to timely meet applicable reporting obligations and obtain financing, and harms the ongoing operations of the Company.

41. Accordingly, the Court should exercise its power under Section 205(a)(4) to validate the Authorized Share Amendment.

COUNT I: VALIDATION OF CORPORATE ACT

(Pursuant to 8 Del. C. § 205)

42. The Company repeats and reiterates the allegations above as if fully set forth herein.

43. The Company is authorized to bring this petition pursuant to 8 Del. C. § 205(a).

44. Pursuant to Section 205(a)(4), the Court is empowered to “[d]etermine the validity of any corporate act or transaction and any stock, rights or options to acquire stock.” Under Section 205(a)(4), a corporate act may be validated even though it is not defective.

45. The Company effectuated the Authorized Share Amendment with the good faith belief that it was approved and adopted in compliance with the DGCL and the Pre-Merger Charter.

46. The Company has treated the approval of the Authorized Share Amendment as valid and has taken significant actions in reliance on its validity, including announcing the vote was successful, filing the Post-Merger Charter with the Secretary of State for the State of Delaware, closing the Merger and listing its stock on the New York Stock Exchange.

 

 

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47. The Company’s stockholders would not be harmed by validation of the Authorized Share Amendment because a majority (approximately 69%) of all shares outstanding, voting together, approved the Authorized Share Amendment Proposal. In addition, if calculated as a separate class, at least 61% of Class A Common Stock – a majority of the Class A Common Stock – approved the Authorized Share Amendment Proposal.

48. The Company and all of the Company’s stockholders would be irreparably harmed if the Authorized Share Amendment is not validated.

PRAYER FOR RELIEF

WHEREFORE, MPMC respectfully prays for the following relief:

A. An Order pursuant to 8 Del. C. § 205, declaring that the vote on the Authorized Share Amendment Proposal and the resulting Authorized Share Amendment are valid and effective; and

B. Such other and further relief as the Court deems just and proper under the circumstances.

 

  

/s/ Edward B. Micheletti

OF COUNSEL:    Edward B. Micheletti (ID No. 3794)
   Sarah Runnells Martin (ID No. 5230)
Susan L. Saltzstein    Trevor T. Nielsen (ID No. 6688)
SKADDEN, ARPS, SLATE,    SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP    MEAGHER & FLOM LLP
One Manhattan West    One Rodney Square
New York, New York 10001-8602    P.O. Box 636
Tel.: (212) 735-3000    Wilmington, Delaware 19899-0636
Fax: (212) 735-2000    Tel.: (302) 651-3000
   Fax: (302) 651-3001
   Attorneys for MP Materials Corp.
DATED: February 16, 2023   

 

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EFiled: Feb 16 2023 10:45AM EST

Transaction ID 69162434

Case No. 2023-0192-

   LOGO

Exhibit A


Exhibit 3.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

FORTRESS VALUE ACQUISITION CORP.

April 29, 2020

Fortress Value Acquisition Corp., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY AS FOLLOWS:

1. The name of the Corporation is “Fortress Value Acquisition Corp.”. The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on January 24, 2020 (the “Original Certificate”).

2. This Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate”), which both restates and amends the provisions of the Original Certificate, was duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”).

3. The text of the Original Certificate is hereby restated and amended in its entirety to read as follows:

ARTICLE I

NAME

The name of the corporation is Fortress Value Acquisition Corp. (the “Corporation”).

ARTICLE II

PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the DGCL. In addition to the powers and privileges conferred upon the Corporation by law and those incidental thereto, the Corporation shall possess and may exercise all the powers and privileges that are necessary or convenient to the conduct, promotion or attainment of the business or purposes of the Corporation, including, but not limited to, effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Corporation and one or more businesses (a “Business Combination”).

ARTICLE III

REGISTERED AGENT

The address of the Corporation’s registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the name of the Corporation’s registered agent at such address is The Corporation Trust Company.


ARTICLE IV

CAPITALIZATION

Section 4.1 Authorized Capital Stock. The total number of shares of all classes of capital stock, each with a par value of $0.0001 per share, which the Corporation is authorized to issue is 221,000,000 shares, consisting of (a) 220,000,000 shares of common stock (the “Common Stock”), including (i) 200,000,000 shares of Class A Common Stock (the “Class A Common Stock”), and (ii) 20,000,000 shares of Class F Common Stock (the “Class F Common Stock”), and (b) 1,000,000 shares of preferred stock (the “Preferred Stock”).

Section 4.2 Preferred Stock. Subject to Article IX of this Amended and Restated Certificate, the Board of Directors of the Corporation (the “Board”) is hereby expressly authorized to provide out of the unissued shares of the Preferred Stock for one or more series of Preferred Stock and to establish from time to time the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof, as shall be stated in the resolution or resolutions adopted by the Board providing for the issuance of such series and included in a certificate of designation (a “Preferred Stock Designation”) filed pursuant to the DGCL, and the Board is hereby expressly vested with the authority to the full extent provided by law, now or hereafter, to adopt any such resolution or resolutions.

Section 4.3 Common Stock.

(a) Voting.

(i) Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of the Common Stock shall exclusively possess all voting power with respect to the Corporation.

(ii) Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), the holders of shares of Common Stock shall be entitled to one vote for each such share on each matter properly submitted to the stockholders on which the holders of the Common Stock are entitled to vote.

(iii) Except as otherwise required by law or this Amended and Restated Certificate (including as set forth in Section 9.9 hereof and any Preferred Stock Designation), at any annual or special meeting of the stockholders of the Corporation, holders of the Class A Common Stock and holders of the Class F Common Stock, voting together as a single class, shall have the exclusive right to vote for the election of directors and on all other matters properly submitted to a vote of the stockholders. Notwithstanding the foregoing, except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), holders of shares of any series of Common Stock shall not be entitled to vote on any amendment to this Amended and Restated Certificate (including any amendment to any Preferred Stock Designation) that relates solely to the terms of one or more outstanding series of Preferred Stock or other series of Common Stock if the holders of such affected series of Preferred Stock or Common Stock, as applicable, are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Amended and Restated Certificate (including any Preferred Stock Designation) or the DGCL.

 

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(b) Class F Common Stock.

(i) Shares of Class F Common Stock shall be convertible into shares of Class A Common Stock on a one-for-one basis (the “Initial Conversion Ratio”) (A) at any time and from time to time at the option of the holder thereof and (B) automatically upon the consummation of the Business Combination.

(ii) Notwithstanding the Initial Conversion Ratio, in the case that additional shares of Class A Common Stock, or Equity-linked Securities (as defined below), are issued or deemed issued in excess of the amounts issued in the Corporation’s initial public offering of securities (the “Offering”) and related to the closing of the initial Business Combination, all issued and outstanding shares of Class F Common Stock shall automatically convert into shares of Class A Common Stock at the time of the closing of the initial Business Combination at a ratio for which:

 

   

the numerator shall be equal to the sum of (A) 25% of all shares of Class A Common Stock issued or issuable (upon the conversion or exercise of any Equity-linked Securities or otherwise) in each case by the Corporation related to or in connection with the consummation of the initial Business Combination (excluding any shares of Class A Common Stock or Equity-linked Securities issued or issuable to any seller in the initial Business Combination) plus (B) the number of shares of Class F Common Stock issued and outstanding prior to the closing of the initial Business Combination; and

 

   

the denominator shall be the number of shares of Class F Common Stock issued and outstanding prior to the closing of the initial Business Combination.

As used herein, the term “Equity-linked Securities” means any securities of the Corporation which are convertible into, exchangeable for or exercisable for Common Stock.

Notwithstanding anything to the contrary contained herein, (i) the foregoing adjustment to the Initial Conversion Ratio may be waived as to any particular issuance or deemed issuance of additional shares of Class A Common Stock or Equity-linked Securities by the written consent or agreement of holders of a majority of the shares of Class F Common Stock then outstanding consenting or agreeing separately as a single class in the manner provided in Section 4.3(b)(iii), and (ii) in no event shall the Class F Common Stock convert into Class A Common Stock at a ratio that is less than one-for-one.

The foregoing conversion ratio shall also be adjusted to account for any subdivision (by stock split, subdivision, exchange, stock dividend, reclassification, recapitalization or otherwise) or combination (by reverse stock split, exchange, reclassification, recapitalization or otherwise) or similar reclassification or recapitalization of the outstanding shares of Class A Common Stock into a greater or lesser number of shares occurring after the original filing of this Amended and Restated Certificate without a proportionate and corresponding subdivision, combination or similar reclassification or recapitalization of the outstanding shares of Class F Common Stock.

 

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Each share of Class F Common Stock shall convert into its pro rata number of shares of Class A Common Stock pursuant to this Section 4.3(b). The pro rata share for each holder of Class F Common Stock will be determined as follows: Each share of Class F Common Stock shall convert into such number of shares of Class A Common Stock as is equal to the product of one (1) multiplied by a fraction, the numerator of which shall be the total number of shares of Class A Common Stock into which all of the issued and outstanding shares of Class F Common Stock shall be converted pursuant to this Section 4.3(b) and the denominator of which shall be the total number of issued and outstanding shares of Class F Common Stock at the time of conversion.

(iii) Voting. Except as otherwise required by law or this Amended and Restated Certificate (including any Preferred Stock Designation), for so long as any shares of Class F Common Stock shall remain outstanding, the Corporation shall not, without the prior vote or written consent of the holders of a majority of the shares of Class F Common Stock then outstanding, voting separately as a single class, amend, alter or repeal any provision of this Amended and Restated Certificate, whether by merger, consolidation or otherwise, if such amendment, alteration or repeal would alter or change the powers, preferences or relative, participating, optional or other or special rights of the Class F Common Stock. Any action required or permitted to be taken at any meeting of the holders of Class F Common Stock may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of the outstanding Class F Common Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of Class F Common Stock were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which minutes of proceedings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. Prompt written notice of the taking of corporate action without a meeting by less than unanimous written consent of the holders of Class F Common Stock shall, to the extent required by law, be given to those holders of Class F Common Stock who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders of Class F Common Stock to take the action were delivered to the Corporation.

(c) Dividends. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and the provisions of Article IX hereof, the holders of shares of Common Stock shall be entitled to receive such dividends and other distributions (payable in cash, property or capital stock of the Corporation) when, as and if declared thereon by the Board from time to time out of any assets or funds of the Corporation legally available therefor and shall share equally on a per share basis in such dividends and distributions.

 

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(d) Liquidation, Dissolution or Winding Up of the Corporation. Subject to applicable law, the rights, if any, of the holders of any outstanding series of the Preferred Stock and the provisions of Article IX hereof, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation, the holders of shares of Common Stock shall be entitled to receive all the remaining assets of the Corporation available for distribution to its stockholders, ratably in proportion to the number of shares of Class A Common Stock (on an as converted basis with respect to the Class F Common Stock) held by them.

Section 4.4 Rights and Options. The Corporation has the authority to create and issue rights, warrants and options entitling the holders thereof to acquire from the Corporation any shares of its capital stock of any class or classes, with such rights, warrants and options to be evidenced by or in instrument(s) approved by the Board. The Board is empowered to set the exercise price, duration, times for exercise and other terms and conditions of such rights, warrants or options; provided, however, that the consideration to be received for any shares of capital stock issuable upon exercise thereof may not be less than the par value thereof.

ARTICLE V BOARD OF

DIRECTORS

Section 5.1 Board Powers. The business and affairs of the Corporation shall be managed by, or under the direction of, the Board. In addition to the powers and authority expressly conferred upon the Board by statute, this Amended and Restated Certificate or the Bylaws of the Corporation (“Bylaws”), the Board is hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the DGCL, this Amended and Restated Certificate, and any Bylaws adopted by the stockholders; provided, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

Section 5.2 Number, Election and Term.

(a) The number of directors of the Corporation, shall be fixed from time to time in the manner provided in the Bylaws.

(b) Subject to Section 5.5 hereof, commencing at the first annual meeting of the stockholders, and at each annual meeting of the stockholders thereafter, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the second annual meeting of the stockholders after their election.

(c) Subject to Section 5.5 hereof, a director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.

(d) Unless and except to the extent that the Bylaws shall so require, the election of directors need not be by written ballot.

 

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Section 5.3 Newly Created Directorships and Vacancies. Subject to Section 5.5 hereof, newly created directorships resulting from an increase in the number of directors and any vacancies on the Board resulting from death, resignation, retirement, disqualification, removal or other cause may be filled solely and exclusively by a majority vote of the remaining directors then in office, even if less than a quorum, or by a sole remaining director (and not by stockholders), and any director so chosen shall hold office for the remainder of the full term of the director to which the new directorship was added or in which the vacancy occurred and until his or her successor has been elected and qualified, subject, however, to such director’s earlier death, resignation, retirement, disqualification or removal.

Section 5.4 Removal. Subject to Section 5.5 hereof and except as otherwise required by this Amended and Restated Certificate (including as set forth on Section 9.9 hereof), any or all of the directors may be removed from office at any time, but only for cause and only by the affirmative vote of holders of a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

Section 5.5 Preferred Stock - Directors. Notwithstanding any other provision of this Article V, and except as otherwise required by law, whenever the holders of one or more series of the Preferred Stock shall have the right, voting separately by class or series, to elect one or more directors, the term of office, the filling of vacancies, the removal from office and other features of such directorships shall be governed by the terms of such series of the Preferred Stock as set forth in this Amended and Restated Certificate (including any Preferred Stock Designation) and such directors shall not be included in any of the classes created pursuant to this Article V unless expressly provided by such terms.

ARTICLE VI

BYLAWS

In furtherance and not in limitation of the powers conferred upon it by law, the Board shall have the power and is expressly authorized to adopt, amend, alter or repeal the Bylaws. The affirmative vote of a majority of the Board shall be required to adopt, amend, alter or repeal the Bylaws. The Bylaws also may be adopted, amended, altered or repealed by the stockholders; provided, however, that in addition to any vote of the holders of any class or series of capital stock of the Corporation required by law or by this Amended and Restated Certificate (including any Preferred Stock Designation), the affirmative vote of the holders of at least a majority of the voting power of all then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required for the stockholders to adopt, amend, alter or repeal the Bylaws; and provided further, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the Board that would have been valid if such Bylaws had not been adopted.

ARTICLE VII

MEETINGS OF STOCKHOLDERS; ACTION BY WRITTEN CONSENT

Section 7.1 Meetings. Subject to the rights, if any, of the holders of any outstanding series of the Preferred Stock, and to the requirements of applicable law, special meetings of stockholders of the Corporation may be called only by the Chairman of the Board, Chief Executive Officer of the Corporation, or the Board pursuant to a resolution adopted by a majority of the Board, and the ability of the stockholders to call a special meeting is hereby specifically denied. Except as provided in the foregoing sentence, special meetings of stockholders may not be called by another person or persons.

 

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Section 7.2 Advance Notice. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws.

Section 7.3 Action by Written Consent. Except as may be otherwise provided for or fixed pursuant to this Amended and Restated Certificate (including any Preferred Stock Designation and Section 4.3(b)(iii) hereof), subsequent to the consummation of the Offering, any action required or permitted to be taken by the stockholders of the Corporation must be effected by a duly called annual or special meeting of such stockholders and may not be effected by written consent of the stockholders.

ARTICLE VIII LIMITED LIABILITY;

INDEMNIFICATION

Section 8.1 Limitation of Director Liability. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists or may hereafter be amended unless they violated their duty of loyalty to the Corporation or its stockholders, acted in bad faith, knowingly or intentionally violated the law, authorized unlawful payments of dividends, unlawful stock purchases or unlawful redemptions, or derived improper personal benefit from their actions as directors. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal.

Section 8.2 Indemnification and Advancement of Expenses.

(a) To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes and penalties and amounts paid in settlement) reasonably incurred by such indemnitee in connection with such proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an

 

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indemnitee in defending or otherwise participating in any proceeding in advance of its final disposition; provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking, by or on behalf of the indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the indemnitee is not entitled to be indemnified under this Section 8.2 or otherwise. The rights to indemnification and advancement of expenses conferred by this Section 8.2 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators. Notwithstanding the foregoing provisions of this Section 8.2(a), except for proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.

(b) The rights to indemnification and advancement of expenses conferred on any indemnitee by this Section 8.2 shall not be exclusive of any other rights that any indemnitee may have or hereafter acquire under law, this Amended and Restated Certificate, the Bylaws, an agreement, vote of stockholders or disinterested directors, or otherwise.

(c) Any repeal or amendment of this Section 8.2 by the stockholders of the Corporation or by changes in law, or the adoption of any other provision of this Amended and Restated Certificate inconsistent with this Section 8.2, shall, unless otherwise required by law, be prospective only (except to the extent such amendment or change in law permits the Corporation to provide broader indemnification rights on a retroactive basis than permitted prior thereto), and shall not in any way diminish or adversely affect any right or protection existing at the time of such repeal or amendment or adoption of such inconsistent provision in respect of any proceeding (regardless of when such proceeding is first threatened, commenced or completed) arising out of, or related to, any act or omission occurring prior to such repeal or amendment or adoption of such inconsistent provision.

(d) This Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than indemnitees.

ARTICLE IX

BUSINESS COMBINATION REQUIREMENTS; EXISTENCE

Section 9.1 General.

(a) The provisions of this Article IX shall apply during the period commencing upon the effectiveness of this Amended and Restated Certificate and terminating upon the consummation of the Corporation’s initial Business Combination and no amendment to this Article IX shall be effective prior to the consummation of the initial Business Combination unless approved by the affirmative vote of the holders of at least sixty-five percent (65%) of all then outstanding shares of the Common Stock.

 

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(b) Immediately after the Offering, a certain amount of the net offering proceeds received by the Corporation in the Offering (including the proceeds of any exercise of the underwriter’s over-allotment option) and certain other amounts specified in the Corporation’s registration statement on Form S-1, as initially filed with the Securities and Exchange Commission (the “SEC”) on March 6, 2020, as amended (the “Registration Statement”), shall be deposited in a trust account (the “Trust Account”), established for the benefit of the Public Stockholders (as defined below) pursuant to a trust agreement described in the Registration Statement. Except for the withdrawal of interest to fund the Corporation’s working capital requirements, subject to an annual limit of $750,000, and/or to pay taxes, none of the funds held in the Trust Account (including the interest earned on the funds held in the Trust Account) will be released from the Trust Account until the earliest to occur of (i) the completion of the initial Business Combination, (ii) the redemption of 100% of the Offering Shares (as defined below) if the Corporation is unable to complete the initial Business Combination within 24 months from the closing of the Offering (the “Required Period”) and (iii) the redemption of shares in connection with a vote seeking to amend any provisions of this Amended and Restated Certificate (A) to modify the substance or timing of the Corporation’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of the Offering Shares if the Corporation does not complete its initial Business Combination within the Required Period or (B) relating to stockholders’ rights or pre-initial Business Combination activity (as described in Section 9.7) and, for purposes of this clause (iii), only with respect to the redemption of those Offering Shares that a stockholder properly elects to redeem. Holders of shares of Common Stock included as part of the units sold in the Offering (the “Offering Shares”) (whether such Offering Shares were purchased in the Offering or in the secondary market following the Offering and whether or not such holders are affiliates of Fortress Acquisition Sponsor LLC (the “Sponsor”) or officers or directors of the Corporation) are referred to herein as “Public Stockholders.”

Section 9.2 Redemption Rights.

(a) Prior to the consummation of the initial Business Combination, the Corporation shall provide all holders of Offering Shares with the opportunity to have their Offering Shares redeemed upon the consummation of the initial Business Combination pursuant to, and subject to the limitations of, Sections 9.2(b) and 9.2(c) (such rights of such holders to have their Offering Shares redeemed pursuant to such Sections, the “Redemption Rights”) hereof for cash equal to the applicable redemption price per share determined in accordance with Section 9.2(b) hereof (the “Redemption Price”); provided, however, that the Corporation shall not redeem or repurchase Offering Shares to the extent that such redemption would result in the Corporation’s failure to have net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or any successor rule)) in excess of $5 million or any greater net tangible asset or cash requirement which may be contained in the agreement relating to the initial Business Combination (such limitation hereinafter called the “Redemption Limitation”). Notwithstanding anything to the contrary contained in this Amended and Restated Certificate, there shall be no Redemption Rights or liquidating distributions with respect to any warrant issued pursuant to the Offering.

 

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(b) If the Corporation offers to redeem the Offering Shares other than in conjunction with a stockholder vote on an initial Business Combination with a proxy solicitation pursuant to Regulation 14A of the Exchange Act (or any successor rules or regulations) and filing proxy materials with the SEC, the Corporation shall offer to redeem the Offering Shares upon the consummation of the initial Business Combination, subject to lawfully available funds therefor, in accordance with the provisions of Section 9.2(a) hereof pursuant to a tender offer in accordance with Rule 13e-4 and Regulation 14E of the Exchange Act (or any successor rule or regulation) (such rules and regulations hereinafter called the “Tender Offer Rules”) which it shall commence prior to the consummation of the initial Business Combination and shall file tender offer documents with the SEC prior to the consummation of the initial Business Combination that contain substantially the same financial and other information about the initial Business Combination and the Redemption Rights as is required under Regulation 14A of the Exchange Act (or any successor rule or regulation) (such rules and regulations hereinafter called the “Proxy Solicitation Rules”), even if such information is not required under the Tender Offer Rules; provided, however, that if a stockholder vote is required by applicable law or stock exchange listing requirements to approve the proposed initial Business Combination, or the Corporation decides to submit the proposed initial Business Combination to the stockholders for their approval for business or other reasons, the Corporation shall offer to redeem the Offering Shares, subject to lawfully available funds therefor, in accordance with the provisions of Section 9.2(a) hereof in conjunction with a proxy solicitation pursuant to the Proxy Solicitation Rules (and not the Tender Offer Rules) at a price per share equal to the Redemption Price calculated in accordance with the following provisions of this Section 9.2(b). In the event that the Corporation offers to redeem the Offering Shares pursuant to a tender offer in accordance with the Tender Offer Rules, the Redemption Price per share of the Common Stock payable to holders of the Offering Shares tendering their Offering Shares pursuant to such tender offer shall be equal to the quotient obtained by dividing: (i) the aggregate amount on deposit in the Trust Account, calculated as of two business days prior to the consummation of the initial Business Combination, including interest not previously released to the Corporation to pay taxes, by (ii) the total number of then outstanding Offering Shares. If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on the proposed initial Business Combination pursuant to a proxy solicitation, the Redemption Price per share of the Common Stock payable to holders of the Offering Shares exercising their Redemption Rights shall be equal to the quotient obtained by dividing (a) the aggregate amount on deposit in the Trust Account, calculated as of two business days prior to the consummation of the initial Business Combination, including interest not previously released to the Corporation to pay taxes, by (b) the total number of then outstanding Offering Shares.

(c) If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination pursuant to a proxy solicitation, 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)(3) of the Exchange Act), shall be restricted from seeking Redemption Rights with respect to more than an aggregate of 15% of the Offering Shares without the prior written consent of the Corporation.

(d) In the event that the Corporation has not consummated an initial Business Combination within the Required Period, the Corporation shall (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter subject to lawfully available funds therefor, redeem 100% of the Offering Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing

 

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(A) the aggregate amount then on deposit in the Trust Account, including interest not previously released to the Corporation to pay taxes (less up to $100,000 of such net interest to pay dissolution expenses), by (B) the total number of then outstanding Offering Shares, which redemption will completely extinguish rights of the Public Stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject in each case to the Corporation’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.

(e) If the Corporation offers to redeem the Offering Shares in conjunction with a stockholder vote on an initial Business Combination, the Corporation shall consummate the proposed initial Business Combination only if (i) such initial Business Combination is approved by the affirmative vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder meeting held to consider such initial Business Combination and (ii) the Redemption Limitation is not exceeded.

(f) If the Corporation conducts a tender offer pursuant to Section 9.2(b), the Corporation shall consummate the proposed initial Business Combination only if the Redemption Limitation is not exceeded.

Section 9.3 Distributions from the Trust Account.

(a) A Public Stockholder shall be entitled to receive funds from the Trust Account only as provided in Sections 9.2(a), 9.2(b), 9.2(d) or 9.7 hereof. In no other circumstances shall a Public Stockholder have any right or interest of any kind in or to distributions from the Trust Account, and no stockholder other than a Public Stockholder shall have any interest in or to the Trust Account.

(b) Each Public Stockholder that does not exercise its Redemption Rights shall retain its interest in the Corporation and shall be deemed to have given its consent to the release of the remaining funds in the Trust Account to the Corporation, and following payment to any Public Stockholders exercising their Redemption Rights, the remaining funds in the Trust Account shall be released to the Corporation.

(c) The exercise by a Public Stockholder of the Redemption Rights shall be conditioned on such Public Stockholder following the specific procedures for redemptions set forth by the Corporation in any applicable tender offer or proxy materials sent to Public Stockholders relating to the proposed initial Business Combination. Payment of the amounts necessary to satisfy the Redemption Rights properly exercised shall be made as promptly as practical after the consummation of the initial Business Combination.

Section 9.4 Share Issuances. Prior to the consummation of the Corporation’s initial Business Combination, the Corporation shall not issue any additional shares of capital stock of the Corporation that would entitle the holders thereof to receive funds from the Trust Account or vote as a class with the Class A Common Stock on any initial Business Combination.

 

11


Section 9.5 Transactions with Affiliates. In the event the Corporation enters into an initial Business Combination with a target business that is affiliated with the Sponsor, or the directors or officers of the Corporation, the Corporation, or a committee of the independent directors of the Corporation, shall obtain an opinion from an independent accounting firm or an independent investment banking firm that is a member of the Financial Industry Regulatory Authority that such Business Combination is fair to the Corporation from a financial point of view.

Section 9.6 No Transactions with Other Blank Check Companies. The Corporation shall not enter into an initial Business Combination solely with another blank check company or a similar company with nominal operations.

Section 9.7 Additional Redemption Rights. If, in accordance with Section 9.1(a), any amendment is made to Section 9.2(d) that would affect the substance or timing of the Corporation’s obligation to allow redemption in connection with its initial Business Combination or to redeem 100% of the Offering Shares if the Corporation has not consummated an initial Business Combination within the Required Period, the Public Stockholders shall be provided with the opportunity to redeem their Offering Shares upon the approval of any such amendment, 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 the Corporation to pay taxes, divided by the number of then outstanding Offering Shares. The Corporation’s ability to provide such opportunity is subject to the Redemption Limitation.

Section 9.8 Minimum Value of Target. In the event that the Corporation’s securities are listed on the New York Stock Exchange, the Corporation’s initial Business Combination must occur with one or more operating businesses or assets with a fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in the Trust Account) at the time of the Corporation’s signing a definitive agreement in connection with its initial Business Combination.

Section 9.9 Appointment and Removal of Directors. Notwithstanding any other provision in this Amended and Restated Certificate, prior to the closing of the initial Business Combination, the holders of Class F Common Stock shall have the exclusive right to elect and remove any director, and the holders of Class A Common Stock shall have no right to vote on the election or removal of any director. This Section 9.9 may only be amended by a resolution passed by holders of at least ninety percent (90%) of the outstanding Common Stock entitled to vote thereon.

ARTICLE X CORPORATE

OPPORTUNITY

The doctrine of corporate opportunity, or any other analogous doctrine, shall not apply with respect to the Corporation or any of its officers or directors, or any of their respective affiliates, in circumstances where the application of any such doctrine would conflict with any fiduciary duties or contractual obligations they may have as of the date of this Amended and Restated Certificate or in the future. In addition to the foregoing, the doctrine of corporate

 

12


opportunity shall not apply to any other corporate opportunity with respect to any of the directors or officers of the Corporation unless such corporate opportunity is offered to such person solely in his or her capacity as a director or officer of the Corporation and such opportunity is one the Corporation is legally and contractually permitted to undertake and would otherwise be reasonable for the Corporation to pursue.

ARTICLE XI AMENDMENT OF AMENDED AND RESTATED CERTIFICATE OF

INCORPORATION

The Corporation reserves the right at any time and from time to time to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate (including any Preferred Stock Designation), and other provisions authorized by the laws of the State of Delaware at the time in force that may be added or inserted, in the manner now or hereafter prescribed by this Amended and Restated Certificate and the DGCL; and, except as set forth in Article VIII, all rights, preferences and privileges of whatever nature herein conferred upon stockholders, directors or any other persons by and pursuant to this Amended and Restated Certificate in its present form or as hereafter amended are granted subject to the right reserved in this Article XI; provided, however, that Article IX of this Amended and Restated Certificate may be amended only as provided therein.

 

13


IN WITNESS WHEREOF, Fortress Value Acquisition Corp. has caused this Amended and Restated Certificate to be duly executed and acknowledged in its name and on its behalf by an authorized officer as of the date first set forth above.

 

FORTRESS VALUE ACQUISITION CORP.
By:  

/s/ Andrew A. McKnight

Name:   Andrew A. McKnight
Title:   Chief Executive Officer


Exhibit B


Filed pursuant to Rule 424(b)(3)

Registration No. 333-248433

 

LOGO

Dear Stockholder:

On July 15, 2020, Fortress Value Acquisition Corp., a Delaware corporation (“FVAC”), entered into an Agreement and Plan of Merger (as amended on August 26, 2020, the “Merger Agreement”), by and among FVAC, FVAC Merger Corp. I, a Delaware corporation and a direct, wholly-owned subsidiary of FVAC (“MPMO Merger Corp.”), FVAC Merger LLC II, a Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes and a direct, wholly-owned subsidiary of FVAC (“SNR Merger Company”), FVAC Merger LLC III, a Delaware limited liability company and a direct wholly-owned subsidiary of FVAC (“MPMO Merger LLC”), FVAC Merger LLC IV, a Delaware limited liability company and a direct wholly-owned subsidiary of FVAC (“SNR Merger LLC” and, together with MPMO Merger Corp., SNR Merger Company and MPMO Merger LLC, the “Merger Subs”), MP Mine Operations LLC, a Delaware limited liability company (“MPMO”) and Secure Natural Resources LLC, a Delaware limited liability company (“SNR” and, together with MPMO, each a “Company” and collectively, the “Companies”) pursuant to which the Companies will become indirect wholly-owned subsidiaries of FVAC. The transactions contemplated by the Merger Agreement will constitute a “business combination” as contemplated by FVAC’s Amended and Restated Certificate of Incorporation.

In accordance with the Merger Agreement, among other things, (a) the Companies will, prior to the consummation of the transactions contemplated by the Merger Agreement, complete a reorganization (the “Pre-Closing Reorganization”), pursuant to which, among other things, (i) MPMO or an affiliate of an MPMO equityholder will form a new Delaware corporation (“MPMO HoldCo”), and SNR will form a new Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes (“SNR HoldCo”) and (ii) each of MPMO HoldCo and SNR HoldCo will form wholly-owned subsidiaries, MPMO Transition Sub, LLC and SNR Transition Sub, LLC, respectively, and each of MPMO and SNR will merge with MPMO Transition Sub, LLC and SNR Transition Sub, LLC, respectively, with MPMO and SNR being the surviving company of each merger and becoming wholly-owned subsidiaries of MPMO HoldCo and SNR HoldCo, respectively, (b) through two consecutive mergers constituting part of the same overall transaction, MPMO Merger Corp., a wholly-owned subsidiary of FVAC, will merge with and into MPMO HoldCo, with MPMO HoldCo being the surviving corporation, and immediately thereafter MPMO HoldCo will merge with and into MPMO Merger LLC, with MPMO Merger LLC being the surviving company (such mergers, the “MPMO Mergers”) and (c) through two consecutive mergers constituting part of the same overall transaction, SNR Merger Company will merge with and into SNR HoldCo, with SNR HoldCo being the surviving company, and immediately thereafter SNR HoldCo will merge with and into SNR Merger LLC, with SNR Merger LLC being the surviving company (such mergers, the “SNR Mergers”, and together with the MPMO Mergers and the other transactions and ancillary agreements contemplated by the Merger Agreement, the “Business Combination”). As a result of the Business Combination, each of MPMO and SNR will become indirect wholly-owned subsidiaries of FVAC.

Fortress Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and FVAC’s officers and directors (together with the Sponsor, the “Insiders”) each have agreed to (i) vote all of their shares of FVAC Class F common stock in favor of the Business Combination and certain other matters, (ii) certain restrictions on their shares of FVAC Class F common stock (other than any shares of FVAC Class F common stock received in exchange for Private Placement Warrants (as defined below)), and (iii) subject to the satisfaction of the closing conditions in the Merger Agreement, if the amount of cash available in the Trust Account, less (1) any amounts required to satisfy the FVAC stockholder redemptions, plus (2) the PIPE Investment Amount, is less than $495 million, surrender to FVAC a number of shares of FVAC Class F common stock (the “Surrendered Shares”) equal to such holder’s (such holders, the “Class F Holders”) pro rata share of the product of (x) 8,625,000 and (y) a fraction, the numerator of which is (1) $495 million, minus (2)(A) the cash available in FVAC’s trust account (the “Trust Account”) after deducting the amount required to satisfy redemptions, plus (B) the amount of the PIPE Investment (the “PIPE Investment Amount”), and the denominator of which is $495 million.


The Sponsor and FVAC’s independent directors, have agreed that, as of the consummation of the Business Combination, all of the shares of FVAC Class A common stock (which, after the consummation of the Business Combination we refer to as “MPMC Class A common stock”) issued upon the conversion of their shares of FVAC Class F common stock (the “Founder Shares”) purchased prior to FVAC’s IPO (other than the Surrendered Shares) shall be subject to certain vesting and forfeiture provisions (the “Vesting Shares”), as follows: (i) 50% of the Vesting Shares beneficially owned by them vest if a $12.00 Stock Price Level is achieved on or before the tenth (10th) anniversary of the consummation of the Business Combination, (ii) 25% of the Vesting Shares beneficially owned by them vest if a $14.00 Stock Price Level is achieved on or before the tenth (10th) anniversary of the consummation of the Business Combination and (iii) 25% of the Vesting Shares beneficially owned by them vest if a $16.00 Stock Price Level is achieved on or before the tenth (10th) anniversary of the consummation of the Business Combination. As used in this proxy statement/consent solicitation/prospectus, the applicable “Stock Price Level” will be considered achieved only when the volume-weighted average price (“VWAP”) of FVAC Class A common stock on NYSE equals or exceeds the applicable threshold for any twenty (20) trading days within any thirty (30) trading day period.

FVAC and the Sponsor have also agreed that, in connection with the consummation of the Business Combination, Sponsor shall exchange all 5,933,333 of its Private Placement Warrants for an aggregate of 890,000 shares of FVAC Class F common stock that, upon the consummation of the Business Combination, will be converted into FVAC Class A common stock (which will not be subject to vesting or forfeiture restrictions under the Parent Sponsor Letter Agreement), subject to and immediately prior to the consummation of the Business Combination.

In connection with the consummation of the Business Combination, the holders of MPMO HoldCo preferred stock, MPMO HoldCo common stock and SNR HoldCo common stock immediately prior to the consummation of the Business Combination will receive, in the aggregate, 91,941,543 shares of MPMC Class A common stock and shall have the contingent right to receive additional shares of MPMC Class A common stock (the “Earnout Shares”), after the closing of the Business Combination and on or before the tenth (10th) anniversary thereof, if the VWAP of MPMC Class A common stock exceeds certain thresholds. 6,430,000 Earnout Shares will be issued if the VWAP of MPMC Class A common stock exceeds $18.00 for any twenty (20) trading days within any thirty (30) trading day period. An additional 6,430,000 Earnout Shares will be issued if the VWAP of MPMC Class A common stock exceeds $20.00 for any twenty (20) trading days within any thirty (30) trading day period. The price targets and the number of Earnout Shares issued shall be equitably adjusted for any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event affecting MPMC Class A common stock.

It is anticipated that, upon consummation of the Business Combination: (i) existing FVAC public stockholders will own approximately 23.4% of the issued and outstanding MPMC Class A common stock; (ii) the Sponsor will own approximately 0.9% of the issued and outstanding MPMC Class A common stock, (iii) the Companies’ current unitholders (the “Companies’ unitholders”) will own approximately 62.4% of the issued and outstanding FVAC Class A common stock, and (iv) the PIPE investors (other than Sponsor) will own approximately 13.2% of the issued and outstanding FVAC Class A common stock. The ownership percentages of FVAC following the Business Combination assume no redemptions by the existing FVAC public stockholders and exclude the impact of 8,625,000 Founder Shares and public warrants, and assume that approximately 147.3 million shares of FVAC common stock will be outstanding after the consummation of the Business Combination (excluding Vesting Shares). FVAC Class A common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “FVAC”. FVAC’s public warrants are listed on the NYSE under the symbol “FVAC WS”. FVAC’s units that have not separated are listed on the NYSE under the symbol “FVAC.U”. Following the Business Combination, MPMC Class A common stock (including common stock issuable in the Business Combination) will be listed on the NYSE under the symbol “MP”.

FVAC will hold a virtual special meeting of stockholders (the “FVAC Special Meeting”) to consider matters relating to the proposed Business Combination. MPMO and SNR cannot complete the Business Combination unless FVAC’s stockholders consent to the approval of the Business Combination, including the issuance of


FVAC Class A common stock as the merger consideration in the Business Combination, and MPMO and SNR unitholders consent to adoption and approval of the Merger Agreement and the transactions contemplated thereby. FVAC is sending you this proxy statement/consent solicitation/prospectus to ask you to vote in favor of the Business Combination and the other matters described in this proxy statement/consent solicitation/prospectus.

The FVAC Special Meeting will be held exclusively via a live webcast at www.virtualshareholdermeeting.com/FVAC2020, on November 13, 2020 at 9:00 a.m., Eastern Time. To participate in the virtual meeting, an FVAC stockholder of record will need the 16-digit control number included on your proxy card or instructions that accompanied your proxy materials, if applicable, or to obtain a proxy form from your broker, bank or other nominee. The FVAC Special Meeting webcast will begin promptly at 9:00 a.m., Eastern Time. FVAC stockholders are encouraged to access the FVAC Special Meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF FVAC COMMON STOCK YOU OWN. To ensure your representation at the FVAC Special Meeting, please complete and return the enclosed proxy card or submit your proxy by following the instructions contained in this proxy statement/consent solicitation/prospectus and on your proxy card. Please submit your proxy promptly whether or not you expect to attend the meeting. Submitting a proxy now will NOT prevent you from being able to vote virtually at the meeting. If you hold your shares in “street name”, you should instruct your broker, bank or other nominee how to vote in accordance with the voting instruction form you receive from your broker, bank or other nominee.

The FVAC board of directors has unanimously approved the Merger Agreement and the transactions contemplated thereby and recommends that FVAC stockholders vote “FOR” the approval of the Merger Agreement, “FOR” the issuance of FVAC Class A common stock to be issued as the merger consideration and “FOR” the other matters to be considered at the FVAC Special Meeting.

Each of the Companies’ boards of managers has unanimously approved the Merger Agreement and the transactions contemplated thereby and recommends that the MPMO and SNR unitholders, respectively, consent to adopt and approve in all respects the Merger Agreement and the transactions contemplated thereby.

This proxy statement/consent solicitation/prospectus provides you with detailed information about the proposed Business Combination. It also contains or references information about FVAC, MPMO and SNR and certain related matters. You are encouraged to read this proxy statement/consent solicitation/prospectus carefully. In particular, you should read the “Risk Factors” section beginning on page 44 for a discussion of the risks you should consider in evaluating the proposed Business Combination and how it will affect you.

If you have any questions regarding the accompanying proxy statement/consent solicitation/prospectus, you may contact D.F. King & Co., Inc., FVAC’s proxy solicitor, toll-free at (800) 870-0653 or collect at (212) 269-5550 or email at FVAC@dfking.com.

Sincerely,

 

LOGO

Andrew A. McKnight

Chief Executive Officer

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of the Business Combination, the issuance of shares of FVAC Class A common stock in connection with the Business Combination or the other transactions described in this proxy statement/consent solicitation/prospectus, or passed upon the adequacy or accuracy of the disclosure in this proxy statement/consent solicitation/prospectus. Any representation to the contrary is a criminal offense.

This proxy statement/consent solicitation/prospectus is dated October 27, 2020, and is first being mailed to stockholders of FVAC on or about October 27, 2020.


Fortress Value Acquisition Corp.

NOTICE OF THE SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON NOVEMBER 13, 2020

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders (the “FVAC Special Meeting”), of Fortress Value Acquisition Corp., a Delaware corporation (which is referred to as “FVAC”) will be held exclusively via a live webcast at www.virtualshareholdermeeting.com/FVAC2020, on November 13, 2020 at 9:00 a.m., Eastern Time. You are cordially invited to attend the FVAC Special Meeting for the following purposes:

 

1.

The Business Combination Proposal—To consider and vote upon a proposal to approve the Agreement and Plan of Merger, dated as of July 15, 2020 (as amended on August 26, 2020, the “Merger Agreement”), by and among FVAC, FVAC Merger Corp. I, a Delaware corporation and a direct, wholly-owned subsidiary of FVAC (“MPMO Merger Corp.”), FVAC Merger LLC II, a Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes and a direct, wholly-owned subsidiary of FVAC (“SNR Merger Company”), FVAC Merger LLC III, a Delaware limited liability company and a direct wholly-owned subsidiary of FVAC (“MPMO Merger LLC”), FVAC Merger LLC IV, a Delaware limited liability company and a direct wholly-owned subsidiary of FVAC (“SNR Merger LLC” and, together with MPMO Merger Corp., SNR Merger Company and MPMO Merger LLC, the “Merger Subs”), MP Mine Operations LLC, a Delaware limited liability company (“MPMO”) and Secure Natural Resources LLC, a Delaware limited liability company (“SNR” and, together with MPMO, each a “Company” and collectively, the “Companies”) and the transactions contemplated thereby, pursuant to which each of the Companies shall become indirect wholly-owned subsidiaries of FVAC upon consummation of the business combination (the “Business Combination”). A copy of the Merger Agreement is attached to this proxy statement/consent solicitation/prospectus as Annex A (Proposal No. 1);

 

2.

The Charter Proposals—To consider and vote upon:

 

  a.

separate proposals to approve the following material differences between the proposed second amended and restated certificate of incorporation of FVAC (the “proposed charter”) that will be in effect upon the closing of the Business Combination and FVAC’s current certificate of incorporation (the “current charter”), a copy of which is attached to this proxy statement/consent solicitation/prospectus as Annex B:

 

  i.

To consider and vote upon an amendment to FVAC’s current charter to approve the increase of the total number of authorized shares of all classes of capital stock from 221,000,000 shares to 500,000,000, consisting of (a) 450,000,000 shares of MPMC Class A common stock and (b) 50,000,000 shares of preferred stock (Proposal No. 2);

 

  ii.

To consider and vote upon an amendment to FVAC’s current charter that the MPMC board of directors be divided into three classes, with only one class of directors being elected each year and members of each class (except for those directors appointed to Class I and Class II in connection with the Business Combination) serving a three-year term, and to make certain related changes (Proposal No. 3);

 

  iii.

To consider and vote upon an amendment to FVAC’s current charter that MPMC will not be governed by Section 203 of the Delaware General Corporation Law (“DGCL”) and, instead, will be governed under a provision that is substantially similar to Section 203 of the DGCL, but excludes the Sponsor, JHL Capital Group LLC and any Exempt Transferee (as defined in the proposed charter) and their respective affiliates or successors or any “group”, or any member of any such group, to which such persons are a party from the definition of “interested stockholder,” and to make certain related changes (Proposal No. 4);

 

  iv.

To consider and vote upon an amendment to FVAC’s current charter to include an exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum

 

1


  for certain stockholder litigation, other than with respect to any complaint asserting a cause of action arising under then United States federal securities laws, including the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for which the federal courts of the United States of America will be the exclusive jurisdiction under the amended and restated certificate of incorporation to the fullest extent permitted by law (Proposal No. 5);

 

  v.

To consider and vote upon an amendment to FVAC’s current charter to require that any amendments relating to Article V (Board of Directors) may only be amended, in addition to any vote required by applicable law, by the affirmative vote of the holders of at least 66.7% of the voting power of all the then-outstanding shares of stock of MPMC entitled to vote in the election of directors, voting together as a single class (Proposal No. 6);

 

  vi.

A proposal to approve the proposed charter, which includes the approval of all other changes in the proposed charter in connection with replacing the current charter with the proposed charter as of the closing of the Business Combination (Proposal No. 7);

 

  3.

The NYSE Issuance Proposal—To consider and vote upon a proposal to approve, for purposes of complying with applicable listing rules of the NYSE, the issuance of shares of common stock pursuant to the Merger Agreement, the Subscription Agreements and the Parent Sponsor Warrant Exchange Agreement (Proposal No. 8);

 

  4.

The Director Election Proposal—To consider and vote upon a proposal to elect seven directors to serve staggered terms on the board of directors of FVAC (the “FVAC Board”) until immediately following the 2021, 2022 and 2023 annual meetings of FVAC stockholders, as applicable, and until their respective successors are duly elected and qualified, subject to their earlier death, resignation or removal (Proposal No. 9); and

 

  5.

The Incentive Plan Proposal—To consider and vote upon a proposal to approve and adopt the Incentive Plan (as defined below) (Proposal No. 10).

Only holders of record of FVAC Common Stock at the close of business on October 12, 2020 are entitled to notice of the FVAC Special Meeting and to vote at the FVAC Special Meeting and any adjournments or postponements of the FVAC Special Meeting. A complete list of FVAC stockholders of record entitled to vote at the FVAC Special Meeting will be available for 10 days before the FVAC Special Meeting at the principal executive offices of FVAC for inspection by stockholders by appointment only during ordinary business hours for any purpose germane to the FVAC Special Meeting. The eligible FVAC stockholder list will also be available on the FVAC Special Meeting website for examination by any stockholder attending the FVAC Special Meeting webcast.

In accordance with FVAC’s current charter, FVAC will provide holders (“public stockholders”) of its FVAC Class A common stock (“public shares”) with the opportunity to redeem their public shares for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account (as defined below), which holds the proceeds of FVAC’s initial public offering (“FVAC’s IPO”), as of two (2) business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to FVAC to pay taxes) upon the closing of the Business Combination. For illustrative purposes, based on funds in the Trust Account of approximately $345.07 million on October 12, 2020, the estimated per share redemption price would have been approximately $10.00, excluding additional interest earned on the funds held in the Trust Account and not previously released to FVAC to pay taxes. Public stockholders may elect to redeem their public shares whether they vote for or against, or whether they abstain from voting on, the Business Combination. A public stockholder, together with any of his, her or its affiliates or any other person with whom he, she or it is acting in concert or as a “group” (as defined in Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to more than an aggregate of 15% of the public shares. Fortress Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”), and FVAC’s officers

 

2


and directors (together with the Sponsor, the “Insiders”) have agreed to waive their redemption rights in connection with the consummation of the Business Combination with respect to any shares of FVAC Common Stock they may hold. Currently, the Insiders own approximately 20% of FVAC Common Stock, consisting of FVAC Class F common stock (“Founder Shares”). Founder Shares will be excluded from the pro rata calculation used to determine the per-share redemption price. The Insiders have agreed to vote any shares of FVAC Common Stock owned by them in favor of the Business Combination Proposal.

Approval of each of the Business Combination Proposal, the NYSE Issuance Proposal and the Incentive Plan Proposal requires the affirmative vote of a majority of the votes cast by holders of outstanding shares of FVAC Common Stock represented virtually or by proxy at the FVAC Special Meeting and entitled to vote thereon, voting together as a single class. Approval of the Charter Proposals requires the affirmative vote of the holders of a majority of the outstanding shares of FVAC Common Stock, voting together as a single class. Approval of the Director Election Proposal requires the affirmative vote (virtually or by proxy) of holders of a plurality of the votes cast by holders of outstanding shares of FVAC Common Stock entitled to vote thereon at the FVAC Special Meeting, voting as a single class. The FVAC Board has already unanimously approved each of the proposals.

As of June 30, 2020, there was approximately $345.0 million in the Trust Account, which FVAC intends to use for the purposes of consummating the Business Combination and to pay approximately $12.1 million in deferred underwriting commissions to the underwriters of FVAC’s IPO. Each redemption of public shares by its public stockholders will decrease the amount in the Trust Account. FVAC will not consummate the Business Combination if the redemption of public shares would result in (i) FVAC’s failure to have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) (or any successor rule)) or (ii) the Merger Agreement condition that FVAC have at least $150,000,000 in available cash immediately prior to the consummation of the Business Combination (after taking into account (x) payments required to satisfy FVAC’s stockholder redemptions and (y) the net proceeds from the PIPE Investment (the “Minimum Cash Condition”)) is not satisfied or waived.

If FVAC stockholders fail to approve the Business Combination Proposal, the Business Combination will not occur. The proxy statement/consent solicitation/prospectus accompanying this notice explains the Merger Agreement and the transactions contemplated thereby, as well as the proposals to be considered at the FVAC Special Meeting. Please review the proxy statement/consent solicitation/prospectus carefully.

The FVAC Board has set October 12, 2020 as the record date for the FVAC Special Meeting. Only holders of record of shares of FVAC common stock at the close of business on October 12, 2020 will be entitled to notice of and to vote at the FVAC Special Meeting and any adjournments or postponements thereof. Any stockholder entitled to attend and vote at the FVAC Special Meeting is entitled to appoint a proxy to attend and vote on such stockholder’s behalf. Such proxy need not be a holder of shares of FVAC common stock.

YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES OF FVAC COMMON STOCK OWN. Whether or not you plan to attend the FVAC Special Meeting virtually, please complete, sign, date and mail the enclosed proxy card in the postage-paid envelope provided at your earliest convenience. You may also submit a proxy by telephone or via the Internet by following the instructions printed on your proxy card. If you hold your shares through a broker, bank or other nominee, you should direct the vote of your shares in accordance with the voting instruction form received from your broker, bank or other nominee.

The FVAC Board has unanimously approved the Merger Agreement and the transactions contemplated thereby and recommends that you vote “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the NYSE Issuance Proposal, “FOR” the Director Election Proposal, and “FOR” the Incentive Plan Proposal.

If you have any questions regarding the accompanying proxy statement/consent solicitation/prospectus, you may contact D.F. King & Co., Inc., FVAC’s proxy solicitor, toll-free at (800) 870-0653 or collect at (212) 269-5550 or email at FVAC@dfking.com.

 

3


If you plan to attend the FVAC Special Meeting virtually, you will be required to take certain actions ahead of the meeting so that you can participate. Please carefully read the sections in the proxy statement/consent solicitation/prospectus regarding attending and voting at the annual meeting to ensure that you comply with these requirements.

 

BY ORDER OF THE FVAC BOARD OF DIRECTORS
LOGO
Andrew McKnight
Chief Executive Officer and Director

October 27, 2020

 

4


Secure Natural Resources LLC

c/o JHL Capital Group LLC

900 North Michigan Avenue, Suite 2000

Chicago, Illinois 60611

NOTICE OF SOLICITATION OF WRITTEN CONSENT

To Unitholders of Secure Natural Resources LLC:

Pursuant to an Agreement and Plan of Merger, dated as of July 15, 2020 (as amended on August 26, 2020, the “merger agreement”), by and among Secure Natural Resources LLC (“Secure Natural Resources”), MP Mine Operations LLC (“MPMO”), Fortress Value Acquisition Corp. (“FVAC”), FVAC Merger Corp. I, FVAC Merger LLC II, FVAC Merger LLC III and FVAC Merger LLC IV, Secure Natural Resources and MPMO will become indirect wholly-owned subsidiaries of FVAC (the “business combination”).

This proxy statement/consent solicitation/prospectus is being delivered to you on behalf of the Secure Natural Resources board of managers to request that holders of Secure Natural Resources units execute and return written consents to adopt and approve the merger agreement and the business combination, including the pre-closing reorganization.

This proxy statement/consent solicitation/prospectus describes the proposed merger, the pre-closing reorganization and the actions to be taken in connection with the business combination and provides additional information about the parties involved. Please give this information your careful attention. A copy of the merger agreement is attached as Annex A to this proxy statement/consent solicitation/prospectus.

The Secure Natural Resources board of managers has considered the business combination and the terms of the merger agreement and has unanimously determined that the business combination and the merger agreement (including the pre-closing reorganization) are advisable, fair to and in the best interests of Secure Natural Resources and its unitholders and recommends that Secure Natural Resources unitholders adopt the merger agreement and consent to the consummation of the transactions contemplated thereby (including the pre-closing reorganization) by submitting a written consent.

Please complete, date and sign the written consent furnished with this proxy statement/consent solicitation/prospectus and return it promptly to Secure Natural Resources by one of the means described in “Companies’ Solicitation of Written Consents”.

By Order of the Board of Managers                                                     

 

1


TABLE OF CONTENTS

 

     Page  

FREQUENTLY USED TERMS

     1  

QUESTIONS AND ANSWERS

     4  

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

     4  

QUESTIONS AND ANSWERS ABOUT FVAC’S SPECIAL STOCKHOLDER MEETING

     7  

SUMMARY

     15  

Parties to the Business Combination

     15  

The Business Combination and the Merger Agreement

     16  

Consideration to the Companies Unitholders in the Business Combination

     16  

Related Agreements

     16  

Organizational Structure of MPMO and SNR

     18  

Organizational Structure of FVAC

     19  

Redemption Rights

     20  

MPMC Board of Directors Following the Business Combination

     22  

The Charter Proposals

     23  

Other Proposals

     24  

Date, Time and Place of Special Meeting

     24  

Voting Power; Record Date for Special Meeting

     24  

Accounting Treatment

     25  

Appraisal Rights

     25  

Proxy Solicitation

     25  

Interests of FVAC’s Directors and Officers in the Business Combination

     25  

Conditions to Closing of the Business Combination

     25  

Regulatory Matters

     26  

Material U.S. Federal Income Tax Considerations

     26  

No Solicitation

     27  

Termination

     28  

Listing of Securities

     28  

Comparison of Stockholders’ Rights

     28  

Quorum and Required Vote for Proposals for the FVAC Special Meeting

     28  

Recommendation of the FVAC Board of Directors; Reasons for the Approval of the Business Combination

     29  

Recommendation of the MPMO Board and Reasons for the Business Combination

     30  

Recommendation of the SNR Board and Reasons for the Business Combination

     30  

Risk Factors

     30  

Opinion of SNR’s Financial Advisor

     31  

Companies’ Solicitation of Written Consents

     31  

 

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TABLE OF CONTENTS

(Continued)

 

     Page  

Interests of Directors and Officers of the Companies in the Business Combination

     33  

Summary of the Transactions

     33  

Summary Historical Financial Data for FVAC

     35  

Summary Historical Financial Data for MPMO

     36  

Summary Historical Financial Data for SNR

     37  

Summary Unaudited Pro Forma Condensed Combined Financial Information

     38  

Unaudited Historical Comparative and Pro Forma Combined Per Share Data of FVAC and the Companies

     40  

MARKET PRICE AND DIVIDEND INFORMATION

     43  

FVAC

     43  

Holders

     43  

Dividend Policy

     43  

The Companies

     43  

RISK FACTORS

     44  

Risks Relating to the Companies’ Business and Industry

     44  

Risks Related to Environmental Regulation

     55  

Risks Relating to FVAC and the Business Combination

     60  

Additional Risks Relating to Ownership of MPMC Common Stock Following the Business Combination

     67  

Risks Relating to Redemption

     73  

SPECIAL MEETING OF FVAC STOCKHOLDERS

     76  

Date, Time and Place of FVAC Special Meeting

     76  

Voting Power; Record Date

     76  

Proposals at the FVAC Special Meeting

     76  

Vote of FVAC’s Sponsor, Directors and Officers

     78  

Quorum and Required Vote for Proposals for the FVAC Special Meeting

     78  

Recommendation to FVAC’s Stockholders

     79  

Abstentions and Broker Non-Votes

     80  

Attending the FVAC Special Meeting; Voting Virtually at the Meeting

     80  

Voting Your Shares—Stockholders of Record

     81  

Voting Your Shares—Beneficial Owners

     82  

Revoking Your Proxy

     82  

No Additional Matters

     82  

Who Can Answer Your Questions About Voting

     82  

Redemption Rights

     82  

Appraisal Rights

     84  

Proxy Solicitation Costs

     84  

 

ii


TABLE OF CONTENTS

(Continued)

 

     Page  

THE BUSINESS COMBINATION

     86  

Terms of the Business Combination

     86  

Conversion of Shares; Exchange Procedures

     87  

Certain Companies Projected Financial Information

     87  

Background of the Business Combination

     89  

Recommendation of the FVAC Board of Directors and Reasons for the Business Combination

     98  

Recommendation of the MPMO Board of Directors and Reasons for the Business Combination

     101  

Recommendation of the SNR Board of Directors and Reasons for the Business Combination

     104  

Opinion of SNR’s Financial Advisor

     107  

Satisfaction of 80% Test

     111  

Interests of FVAC’s Directors and Officers in the Business Combination

     111  

Interests of Directors and Officers of the Companies in the Business Combination

     112  

Total FVAC Shares to be Issued in the Business Combination

     113  

Board of MPMC following the Business Combination

     113  

MPMC Certificate of Incorporation

     113  

Name; Headquarters

     114  

Appraisal Rights

     114  

Accounting Treatment of the Business Combination

     114  

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

     115  

Tax Consequences of the Business Combination to Holders of Equity of MPMO and SNR

     116  

Tax Consequences of a Redemption of FVAC Public Shares

     120  

Information Reporting and Backup Withholding

     124  

FATCA Withholding Taxes

     124  

THE MERGER AGREEMENT

     125  

Effects of the Business Combination

     125  

Merger Consideration

     125  

Closing and Effective Time of the Business Combination

     126  

Covenants and Agreements

     126  

Representations and Warranties

     135  

Conditions to the Business Combination

     138  

Termination

     139  

Effect of Termination

     140  

Amendments

     140  

Specific Performance

     140  

Stock Market Listing

     141  

Fees and Expenses

     141  

RELATED AGREEMENTS

     142  

Parent Sponsor Letter Agreement

     142  

Subscription Agreements

     143  

 

iii


TABLE OF CONTENTS

(Continued)

 

     Page  

Parent Sponsor Warrant Exchange Agreement

     143  

SupportAgreements

     143  

Amended and Restated Registration Rights Agreement

     144  

Reorganization Joinders

     144  

REGULATORY APPROVALS RELATED TO THE BUSINESS COMBINATION

     145  

SELECTED HISTORICAL FINANCIAL INFORMATION OF FVAC

     146  

SELECTED HISTORICAL FINANCIAL INFORMATION OF MPMO

     147  

SELECTED HISTORICAL FINANCIAL INFORMATION OF SNR

     149  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     150  

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     159  

COMPANIES’ SOLICITATION OF WRITTEN CONSENTS

     166  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     169  

INFORMATION ABOUT FVAC

     172  

General

     172  

Redemption of Public Shares and Liquidation if no Initial Business Combination

     173  

Initial Business Combination

     175  

Redemption Rights for Holders of Public Shares

     176  

Submission of Our Initial Business Combination to a Stockholder Vote

     176  

Limitations on Redemption Rights

     176  

Acquisition Criteria

     176  

Facilities

     176  

Employees

     176  

Legal Proceedings

     177  

MANAGEMENT OF FVAC

     178  

Directors and Executive Officers

     178  

Summary Compensation Table

     179  

FVAC’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     181  

Overview

     181  

Results of Operations

     182  

Liquidity and Capital Resources

     182  

Accounting Policies and Estimates

     183  

Off-Balance Sheet Arrangements

     184  

JOBS Act

     184  

 

iv


TABLE OF CONTENTS

(Continued)

 

     Page  

INFORMATION ABOUT THE COMPANIES’ BUSINESS

     185  

The Business

     185  

History of Ownership and Current Operations

     186  

Rare Earth Industry Overview and Market Opportunity

     189  

Our Strengths

     194  

Our Business Strategy

     196  

The Mountain Pass Facility

     199  

Rare Earth Reserves

     201  

Reserve Estimate

     205  

Customers

     206  

Suppliers

     206  

Patents, Trademarks and Licenses

     206  

Competition

     207  

Environmental, Health and Safety Matters

     207  

Facilities and Employees

     211  

Legal Proceedings

     212  

MANAGEMENT OF THE COMPANIES

     213  

MPMO’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     214  

Overview

     214  

Recent Developments and Comparability of Results

     215  

Key Performance Indicators

     219  

Key Factors Affecting Our Performance

     222  

Key Components of Sales and Expenses

     224  

Results of Operations

     225  

Non-GAAP Financial Measures

     228  

Quarterly Performance Trend

     230  

Liquidity and Capital Resources

     231  

Contractual Obligations

     234  

Off-Balance Sheet Commitments and Arrangements

     234  

Critical Accounting Policies

     234  

Recently Adopted and Issued Accounting Pronouncements and Regulatory Items

     236  

Emerging Growth Company Accounting Election

     236  

Quantitative and Qualitative Disclosures About Market Risk

     236  

 

v


TABLE OF CONTENTS

(Continued)

 

     Page  

SNR’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     238  

EXECUTIVE COMPENSATION

     240  

FVAC

     240  

Companies

     240  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     246  

Anticipated Executive Officers and Directors Upon Consummation

     246  

Board of Directors

     248  

Committees of the Board of Directors

     248  

Code of Ethics

     250  

DESCRIPTION OF SECURITIES

     251  

Authorized and Outstanding Stock

     251  

Common Stock

     251  

Warrants

     255  

Dividends

     262  

Transfer Agent and Warrant Agent

     262  

Certain Anti-Takeover Provisions of Delaware Law, FVAC’s Certificate of Incorporation and Bylaws

     262  

Rule 144 and Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

     264  

Registration Rights

     266  

Listing of Securities

     266  

DESCRIPTION OF CERTAIN INDEBTEDNESS

     267  

MPMO Unsecured Note

     267  

MPMO Secured Note

     267  

Shenghe Prepayment Funding

     267  

Equipment Notes

     267  

PPP Loan

     267  

COMPARISON OF STOCKHOLDER RIGHTS

     269  

General

     269  

Comparison of Stockholders’ Rights

     269  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     288  

Certain Relationships and Related Person Transactions—FVAC

     288  

Certain Relationships and Related Person Transactions—Companies

     289  

Certain Relationships and Related Person Transactions—MPMC

     295  

BENEFICIAL OWNERSHIP OF SECURITIES

     296  

PRICE RANGE OF SECURITIES AND DIVIDENDS

     301  

 

vi


TABLE OF CONTENTS

(Continued)

 

     Page  

FVAC PROPOSALS

     302  

PROPOSAL NO. 1—THE BUSINESS COMBINATION PROPOSAL

     302  

PROPOSALS NO. 2 THROUGH 7—THE CHARTER PROPOSALS

     303  

PROPOSAL NO. 8: THE NYSE SHARE ISSUANCE PROPOSAL

     312  

PROPOSAL NO. 9: THE DIRECTOR ELECTION PROPOSAL

     312  

PROPOSAL NO. 10: THE INCENTIVE PLAN PROPOSAL

     313  

LEGAL MATTERS

     321  

EXPERTS

     321  

TRANSFER AGENT AND REGISTRAR

     321  

SUBMISSION OF SHAREHOLDER PROPOSALS

     321  

FUTURE SHAREHOLDER PROPOSALS

     321  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     323  

GLOSSARY OF SELECTED MINING TERMS

     324  

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     F-1  

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

     F-1  

Annex A—Agreement and Plan of Merger

     A-1  

Annex A-1—First Amendment to Agreement and Plan of Merger

     A-1-1  

Annex B—Form of Second Amended and Restated Certificate of Incorporation of FVAC

     B-1  

Annex C—Form of Amended and Restated Bylaws of FVAC

     C-1  

Annex D—Form of Subscription of Agreement

     D-1  

Annex E—MPMO Support Agreement

     E-1  

Annex F—SNR Support Agreement

     F-1  

Annex G—Parent Sponsor Warrant Exchange Agreement

     G-1  

Annex H—Parent Sponsor Letter Agreement

     H-1  

Annex I—Form of Amended and Restated Registration Rights Agreement

     I-1  

Annex J—Form of Pre-Closing Reorganization Joinders

     J-1  

Annex K—Form of Incentive Plan

     K-1  

Annex L—Opinion of SNR’s Financial Advisor

     L-1  

 

vii


FREQUENTLY USED TERMS

As used in this proxy statement/consent solicitation/prospectus, unless otherwise noted or the context otherwise requires:

 

   

“Amended and Restated Bylaws” means those certain Amended and Restated Bylaws of MPMC, substantially in the form attached hereto as Annex C, to be adopted at the closing of the Business Combination.

 

   

“A&R RRA” means that certain Amended and Restated Registration Rights Agreement, substantially in the form attached hereto as Annex I, to be entered into at the closing of the Business Combination, by and among FVAC, the Insiders and the other parties that will be signatory thereto.

 

   

“A&R RRA Parties” means FVAC, the Insiders, and the other parties that will be signatory to the A&R RRA.

 

   

“closing” means the closing of the transactions contemplated by the Merger Agreement.

 

   

“closing date” means the date on which the closing of the transactions contemplated by the Merger Agreement occurs.

 

   

“Companies” means MPMO and SNR, collectively.

 

   

“current charter” means the current amended and restated articles of incorporation of FVAC.

 

   

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

   

“Founder Shares” means shares of FVAC Class F common stock initially purchased by the Insiders whether or not converted into shares of FVAC Class A common stock.

 

   

“FVAC” means Fortress Value Acquisition Corp., a Delaware corporation.

 

   

“FVAC Board” means the board of directors of FVAC.

 

   

“FVAC Class A common stock” means the shares of Class A common stock, par value $0.0001 per share, of FVAC.

 

   

“FVAC Class F common stock” means the shares of Class F common stock, par value $0.0001 per share, of FVAC.

 

   

“FVAC Common Stock” means the shares of common stock, par value $0.0001 per share, of FVAC, consisting of FVAC Class A common stock and FVAC Class F common stock.

 

   

“FVAC Special Meeting” means the virtual special meeting of FVAC’s stockholders that is the subject of this proxy statement/consent solicitation/prospectus.

 

   

“HoldCos” means MPMO HoldCo and SNR HoldCo, collectively.

 

   

“Insiders” means holders of Founder Shares prior to FVAC’s IPO.

 

   

“FVAC’s IPO” means FVAC’s initial public offering, consummated on May 4, 2020, through the sale of 34,500,000 units (including 4,500,000 units sold pursuant to the underwriters’ exercise of their over-allotment option) at $10.00 per unit.

 

   

“FVAC units” means one share of FVAC Class A common stock and one-third of one redeemable public warrant of FVAC, whereby each public warrant entitles the holder thereof to purchase one share of FVAC Class A common stock at an exercise price of $11.50 per share of FVAC Class A common stock, sold in FVAC’s IPO.

 

   

“Merger Subs” means MPMO Merger Corp., SNR Merger Company, MPMO Merger LLC and SNR Merger LLC collectively.

 

1


   

“MPMC” means MP Materials Corp. (f/k/a Fortress Value Acquisition Corp.) and its consolidated subsidiaries, after giving effect to the Business Combination.

 

   

“MPMC Board” means the board of directors of MPMC.

 

   

“MPMC Class A common stock” means the shares of Class A common stock, par value $0.0001 per share, of MPMC.

 

   

“MPMO” means MP Mine Operations LLC, a Delaware limited liability company.

 

   

“MPMO Board” means the board of managers of MPMO.

 

   

“MPMO Merger Corp.” means FVAC Merger Corp. I, a Delaware corporation and a direct, wholly owned subsidiary of FVAC.

 

   

“MPMO Merger LLC” means FVAC Merger LLC III, a Delaware limited liability company and a direct wholly owned subsidiary of FVAC.

 

   

“MPMO Transition Sub” means MPMO Transition Sub, LLC, which shall be a new Delaware limited liability company that is treated as an entity that is disregarded as separate from its owner for U.S. federal income tax purposes, formed by MPMO HoldCo as a wholly-owned subsidiary pursuant to the Merger Agreement.

 

   

“MPMO HoldCo” means MPMO Holding Company, which shall be a Delaware corporation formed by MPMO or an Affiliate of a MPMO unitholder pursuant to the Merger Agreement.

 

   

“NYSE” means the New York Stock Exchange.

 

   

“Parent Sponsor Letter Agreement” means that certain amended and restated letter agreement dated July 15, 2020, and amended and restated on August 26, 2020, by and among FVAC and the Class F Holders, a copy of which is attached hereto as Annex H, as it may be amended and/or restated from time to time.

 

   

“Parent Sponsor Warrant Exchange Agreement” means that certain exchange agreement dated July 15, 2020, a copy of which is attached hereto as Annex G, by and between FVAC and Sponsor.

 

   

“PIPE Investors” means the Sponsor and certain other investors who entered into Subscription Agreements with FVAC (together with any permitted assigns under the Subscription Agreements) in connection with the Business Combination.

 

   

“Pre-Closing Reorganization Joinders” means those joinders to the Merger Agreement, substantially in the form attached hereto as Annex I, that each of MPMO HoldCo and SNR HoldCo shall execute pursuant to the Merger Agreement.

 

   

“proposed charter” means the proposed Second Amended and Restated Certificate of Incorporation of FVAC, a form of which is attached hereto as Annex B, which will become MPMC’s certificate of incorporation subject to the approval of the Charter Proposals, assuming the consummation of the Business Combination.

 

   

“public warrants” means the warrants included in the public units issued in FVAC’s IPO, each of which is exercisable for one share of FVAC Class A common stock, in accordance with its terms.

 

   

“SEC” means the United States Securities and Exchange Commission.

 

   

“Securities Act” means the Securities Act of 1933, as amended.

 

   

“SNR” means Secure Natural Resources LLC, a Delaware limited liability company.

 

   

“SNR Board” means the board of managers of SNR.

 

   

“SNR HoldCo” means SNR Holding Company, LLC, which shall be a Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes, formed by SNR pursuant to the Merger Agreement.

 

2


   

“SNR Merger LLC” means FVAC Merger LLC IV, a Delaware limited liability company and a direct wholly owned subsidiary of FVAC.

 

   

“SNR Merger Company” means FVAC Merger LLC II, a Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes and a direct, wholly owned subsidiary of FVAC.

 

   

“SNR Transition Sub” means SNR Transition Sub, LLC, which shall be a Delaware limited liability company that is treated as an entity that is disregarded as separate from its owner for U.S. federal income tax purposes, formed by SNR HoldCo as a wholly-owned subsidiary pursuant to the Merger Agreement.

 

   

“Sponsor” means Fortress Acquisition Sponsor LLC, a Delaware limited liability company.

 

   

“Subscription Agreements” means those certain Subscription Agreements, each dated as of July 15, 2020, by and between FVAC and each of the PIPE Investors.

 

   

“Support Agreements” means the MPMO Support Agreement and the SNR Support Agreement.

Unless specified otherwise, amounts in this proxy statement/consent solicitation/prospectus are presented in United States (“U.S.”) dollars.

Defined terms in the financial statements contained in this proxy statement/consent solicitation/prospectus have the meanings ascribed to them in the financial statements.

 

3


QUESTIONS AND ANSWERS

The following are answers to certain questions that you may have regarding the Business Combination and the stockholder meeting. We urge you to carefully read the remainder of this proxy statement/consent solicitation/prospectus because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to this proxy statement/consent solicitation/prospectus.

QUESTIONS AND ANSWERS ABOUT THE BUSINESS COMBINATION

 

Q:

WHAT IS THE BUSINESS COMBINATION?

 

A:

FVAC, FVAC Merger Corp. I, a Delaware corporation and a direct, wholly owned subsidiary of FVAC (“MPMO Merger Corp.”), FVAC Merger LLC II, a Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes and a direct, wholly owned subsidiary of FVAC (“SNR Merger Company”), FVAC Merger LLC III, a Delaware limited liability company and a direct wholly owned subsidiary of FVAC (“MPMO Merger LLC”), FVAC Merger LLC IV, a Delaware limited liability company and a direct wholly owned subsidiary of FVAC (“SNR Merger LLC” and, together with MPMO Merger Corp., SNR Merger Company and MPMO Merger LLC, the “Merger Subs”), MP Mine Operations LLC, a Delaware limited liability company (“MPMO”) and Secure Natural Resources LLC, a Delaware limited liability company (“SNR”, and together with MPMO, each a “Company” and collectively, the “Companies”) have entered into an Agreement and Plan of Merger, dated as of July 15, 2020, (as amended on August 26, 2020, the “Merger Agreement”), pursuant to which the Companies will become indirect wholly-owned subsidiaries of FVAC.

In accordance with the Merger Agreement, among other things, (a) the Companies will, prior to the consummation of the transactions contemplated by the Merger Agreement, complete a reorganization (the “Pre-Closing Reorganization”), pursuant to which, among other things, (i) MPMO or an affiliate of an equityholder thereof will form a new Delaware corporation (“MPMO HoldCo”), and SNR will form a new Delaware limited liability company that is treated as a corporation for U.S. federal income tax purposes (“SNR HoldCo”) and (ii) each of MPMO HoldCo and SNR HoldCo will form wholly-owned subsidiaries, MPMO Transition Sub, LLC and SNR Transition Sub, LLC, respectively, and each of MPMO and SNR will merge with MPMO Transition Sub, LLC and SNR Transition Sub, LLC, respectively, with MPMO and SNR being the surviving company of each merger and becoming wholly-owned subsidiaries of MPMO HoldCo and SNR HoldCo, respectively, (b) through two consecutive mergers constituting part of the same overall transaction, MPMO Merger Corp., a wholly-owned subsidiary of FVAC, will merge with and into MPMO HoldCo, with MPMO HoldCo being the surviving corporation, and immediately thereafter MPMO HoldCo will merge with and into MPMO Merger LLC, with MPMO Merger LLC being the surviving company (such mergers, the “MPMO Mergers”) and (c) through two consecutive mergers constituting part of the same overall transaction, SNR Merger Company will merge with and into SNR HoldCo, with SNR HoldCo being the surviving company, and immediately thereafter SNR HoldCo will merge with and into SNR Merger LLC, with SNR Merger LLC being the surviving company (such mergers, the “SNR Mergers”, and together with the MPMO Mergers, the “Mergers”, and the other transactions and ancillary agreements contemplated by the Merger Agreement, the “Business Combination”). As a result of the Business Combination, each of MPMO and SNR will become indirect wholly-owned subsidiaries of FVAC.

FVAC will hold the FVAC Special Meeting to, among other things, obtain the approvals required for the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement and you are receiving this proxy statement/consent solicitation/prospectus in connection with such meeting. See “The Merger Agreement” beginning on page 125 of this proxy statement/consent solicitation/prospectus. In addition, a copy of the Merger Agreement is attached to this proxy statement/consent solicitation/prospectus as Annex A. We urge you to carefully read this proxy statement/consent solicitation/prospectus and the Merger Agreement in their entirety.

 

4


The Companies are, through delivery of this proxy statement/consent solicitation/prospectus, soliciting the written consent of their respective unitholders to the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement (including the Pre-Closing Reorganization). If you are a unitholder of SNR or MPMO, you are receiving this proxy statement/consent solicitation/prospectus in connection with such solicitation. See “The Merger Agreement” beginning on page 125 of this proxy statement/consent solicitation/prospectus. In addition, a copy of the Merger Agreement is attached to this proxy statement/consent solicitation/prospectus as Annex A. We urge you to carefully read this proxy statement/consent solicitation/prospectus and the Merger Agreement in their entirety. See also “Companies’ Solicitation of Written Consents” beginning on page 166 of this proxy statement/consent solicitation/prospectus.

 

Q:

WHY AM I RECEIVING THIS DOCUMENT?

 

A:

FVAC is sending this proxy statement/consent solicitation/prospectus to its stockholders to help them decide how to vote their shares of FVAC common stock with respect to the matters to be considered at the FVAC Special Meeting.

The Business Combination cannot be completed unless FVAC’s stockholders approve the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal and the Director Election Proposal as set forth in this proxy statement/consent solicitation/prospectus for their approval.

This document constitutes a proxy statement of FVAC, a consent solicitation statement of the Companies, and a prospectus of FVAC. It is a proxy statement because the FVAC Board is soliciting proxies using this proxy statement/consent solicitation/prospectus from its stockholders. It is a consent solicitation statement because the board of managers of each of the Companies is soliciting written consent using this proxy statement/consent solicitation/prospectus from its unitholders (the “Companies’ approval”). It is a prospectus because FVAC, in connection with the Business Combination, is offering shares of FVAC Class A common stock to the current holders of outstanding equity of the Companies through a series of transactions. See “The Merger Agreement—Merger Consideration” beginning on page 125 of this proxy statement/consent solicitation/prospectus.

The Companies are delivering this proxy statement/consent solicitation/prospectus to their respective unitholders to help them decide how to vote their units of the respective Companies and to solicit the written consent of their respective unitholders to the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement (including the Pre-Closing Reorganization).

If you are a unitholder of SNR or MPMO, you are receiving this proxy statement/consent solicitation/prospectus in connection with such solicitation. See “The Merger Agreement” beginning on page 125 of this proxy statement/consent solicitation/prospectus. In addition, a copy of the Merger Agreement is attached to this proxy statement/consent solicitation/prospectus as Annex A. We urge you to carefully read this proxy statement/consent solicitation/prospectus and the Merger Agreement in their entirety. See also “Companies’ Solicitation of Written Consents” beginning on page 166 of this proxy statement/consent solicitation/prospectus.

 

Q:

WHEN WILL THE BUSINESS COMBINATION BE COMPLETED?

 

A:

The parties currently expect that the Business Combination will be completed during the fourth quarter of 2020. However, neither FVAC nor the Companies can assure you of when or if the Business Combination will be completed and it is possible that factors outside of the control of FVAC and the Companies could result in the Business Combination being completed at a different time or not at all. FVAC must first obtain the approval of FVAC stockholders for each of the proposals set forth in this proxy statement/consent solicitation/prospectus for their approval and FVAC and the Companies must also first obtain certain necessary regulatory approvals and satisfy other closing conditions. See “The Merger Agreement— Conditions to the Business Combination” beginning on page 138 of this proxy statement/consent solicitation/prospectus.

 

5


Q:

WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT COMPLETED?

 

A:

If the Business Combination is not completed, the Companies’ respective equityholders will not receive any consideration for their equity in the Companies. Instead, each of the Companies will remain an independent company. See the section entitled “Risk Factors” beginning on page 44 of this proxy statement/consent solicitation/prospectus.

 

Q:

WHAT EFFECT WILL THE BUSINESS COMBINATION HAVE ON THE SPONSOR’S INVESTMENT IN FVAC?

 

A:

The Insiders, including the Sponsor, each have agreed to (i) vote all of their shares of FVAC Class F common stock in favor of the Business Combination and certain other matters, (ii) certain restrictions on their shares of FVAC Class F common stock (other than any shares of FVAC Class F common stock received in exchange for Private Placement Warrants (as defined below)), in each case upon the terms and subject to the conditions set forth in the Parent Sponsor Letter Agreement and (iii) subject to the satisfaction of the closing conditions in the Merger Agreement, if the amount of cash available in the Trust Account, less (1) any amounts required to satisfy the FVAC stockholder redemptions, plus (2) the PIPE Investment Amount, is less than $495 million, surrender to FVAC a number of shares of FVAC Class F common stock (the “Surrendered Shares”) equal to such holder’s (such holders, the “Class F Holders”) pro rata share of the product of (x) 8,625,000 and (y) a fraction, the numerator of which is (1) $495 million, minus (2)(A) the cash available in FVAC’s trust account (the “Trust Account”) after deducting the amount required to satisfy redemptions, plus (B) the amount of the PIPE Investment (the “PIPE Investment Amount”), and the denominator of which is $495 million.

The Insiders, including the Sponsor, have agreed that, as of the consummation of the Business Combination, all of the shares of MPMC Class A Common Stock issued upon the conversion of the Founder Shares purchased prior to FVAC’s IPO (other than the Surrendered Shares) shall be subject to certain vesting and forfeiture provisions (the “Vesting Shares”), as follows: (i) 50% of the Vesting Shares beneficially owned by the Insiders shall vest if a $12.00 Stock Price Level is achieved on or before the tenth (10th) anniversary of the Closing, (ii) 25% of the Vesting Shares beneficially owned by the Insiders shall vest if a $14.00 Stock Price Level is achieved on or before the tenth (10th) anniversary of the Closing and (iii) 25% of the Vesting Shares beneficially owned by the Insiders shall vest if a $16.00 Stock Price Level is achieved on or before the tenth (10th) anniversary of the Closing. As used in this proxy statement/consent solicitation/prospectus, the applicable “Stock Price Level” will be considered achieved only when the VWAP of MPMC Class A common stock on the New York Stock Exchange (“NYSE”) equals or exceeds the applicable threshold for any twenty (20) trading days within any thirty (30) trading day period.

FVAC and the Sponsor have also agreed that, in connection with the consummation of the PIPE Investment, Sponsor shall provide equity financing in an aggregate amount of $5,000,000, conditioned upon consummation of the Business Combination and pursuant to which FVAC will issue and sell 500,000 shares of FVAC Class A common stock to Sponsor at a purchase price of $10.00 per share.

FVAC and the Sponsor have also agreed that, in connection with the consummation of the Business Combination, Sponsor shall exchange all 5,933,333 of its Private Placement Warrants for an aggregate of 890,000 shares of FVAC Class F common stock that, upon the consummation of the Business Combination, will be converted into 890,000 shares of MPMC Class A common stock (which will not be subject to vesting or forfeiture restrictions under the Parent Sponsor Letter Agreement), subject to and immediately prior to the consummation of the Business Combination.

 

Q:

WHAT WILL THE COMPANIES’ UNITHOLDERS RECEIVE IN THE BUSINESS COMBINATION?

 

A:

Each share of MPMO HoldCo preferred stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC

 

6


Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive additional shares of MPMC Class A common stock (the “Earnout Shares”) that may be issued in accordance with the terms of the Merger Agreement.

Each share of MPMO HoldCo common stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

Each share of SNR HoldCo common stock issued and outstanding immediately prior to the effective time of the initial SNR merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 20,000,000 divided by (B) the number of shares of SNR HoldCo common stock outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

No fractional shares will be issued in connection with the Business Combination. In lieu thereof, FVAC shall pay or cause to be paid cash to each holder who otherwise would have been entitled to receive a fractional share.

The holders of MPMO HoldCo preferred stock, MPMO HoldCo common stock and SNR HoldCo common stock immediately prior to the closing of the Business Combination will have the contingent right to receive Earnout Shares if, after the closing of the Business Combination and on or before the tenth (10th) anniversary thereof, the VWAP of MPMC Class A common stock exceeds certain thresholds. 6,430,000 Earnout Shares will be issued if the VWAP of MPMC Class A common stock exceeds $18.00 for any twenty (20) trading days within any thirty (30) trading day period. 6,430,000 Earnout Shares will be issued if the VWAP of MPMC Class A common stock exceeds $20.00 for any twenty (20) trading days within any thirty (30) trading day period. The price targets and the number of Earnout Shares issued shall be equitably adjusted for any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, or any similar event affecting MPMC Class A common stock.

See the section entitled “The Merger Agreement—Merger Consideration” beginning on page 125 of this proxy statement/consent solicitation/prospectus.

QUESTIONS AND ANSWERS ABOUT FVAC’S SPECIAL STOCKHOLDER MEETING

 

Q:

WHAT AM I BEING ASKED TO VOTE ON?

 

A:

FVAC stockholders are being asked to vote on the following proposals:

 

  1.

the Business Combination Proposal;

  2.

the Charter Proposals;

  3.

the NYSE Issuance Proposal;

  5.

the Director Election Proposal; and

  6.

the Incentive Plan Proposal.

 

Q:

WHY IS FVAC PROPOSING THE BUSINESS COMBINATION?

 

A:

FVAC was organized to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities (collectively, a “business combination”).

 

7


On May 4, 2020, FVAC completed its initial public offering, generating gross proceeds of $345,000,000. Since FVAC’s IPO, FVAC’s activity has been limited to the evaluation of business combination candidates.

The Companies own and operate the Mountain Pass rare earth mining and processing facility, one of the world’s largest integrated rare earth mining and processing facilities and the only one of its kind in the Western Hemisphere. With approximately 250 employees, the Companies produce a significant portion of the rare earth materials consumed in the global market, which are essential for advanced technologies such as electric vehicles, drones, defense systems, medical equipment, wind turbines, robotics and many others. The Companies operate a green mining and processing facility and are currently a low-cost producer of rare earth concentrate. The Companies play a leadership role in advocating for a more robust and competitive rare earths industry in the U.S.

Based on its due diligence investigation of the Companies and the industry in which it operates, including the financial and other information provided by the Companies in the course of their negotiations in connection with the Merger Agreement, FVAC believes the Companies are well-positioned in their industry for growth, that their businesses provide a valuable mining opportunity in a premier location, and that they possess a strong management team of which the senior management intends to remain with MPMC in the capacity of officers and/or directors. As a result, FVAC believes that the Business Combination will provide FVAC stockholders with an opportunity to participate in the ownership of a company with significant growth potential. See the section entitled “The Business Combination—Recommendation of the FVAC Board of Directors and Reasons for the Business Combination” beginning on page 98 of this proxy statement/consent solicitation/prospectus.

 

Q:

DID THE FVAC BOARD OBTAIN A THIRD-PARTY VALUATION OR FAIRNESS OPINION IN DETERMINING WHETHER OR NOT TO PROCEED WITH THE BUSINESS COMBINATION?

 

A:

FVAC’s board of directors did not obtain a third-party valuation or fairness opinion in connection with their determination to approve the Business Combination. FVAC’s officers, directors and advisors have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and backgrounds, together with the experience and sector expertise of FVAC’s financial advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination. In addition, FVAC’s officers, directors and advisors have substantial experience with mergers and acquisitions. Accordingly, investors will be relying solely on the judgment of FVAC’s board of directors and management in valuing the Companies’ business.

 

Q:

DO I HAVE REDEMPTION RIGHTS?

 

A:

If you are a holder of public shares, you have the right to demand that FVAC redeem such shares for a pro rata portion of the cash held in the Trust Account, which holds the proceeds of FVAC’s IPO, as of two (2) business days prior to the consummation of the transactions contemplated by the Business Combination Proposal (including interest earned on the funds held in the Trust Account and not previously released to FVAC to pay taxes) upon the closing of the Business Combination (such rights, “redemption rights”). Public stockholders may elect to redeem their public shares whether they vote for or against, or whether you abstain from voting on, the Business Combination.

Notwithstanding the foregoing, a holder of public shares, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from seeking redemption with respect to more than 15% of the public shares. Accordingly, all public shares in excess of 15% held by a public stockholder, together with any affiliate of such holder or any other person with whom such holder is acting in concert or as a “group”, will not be redeemed.

Under FVAC’s current charter, the Business Combination may be consummated only if FVAC has at least $5,000,001 of net tangible assets after giving effect to all holders of public shares that properly demand

 

8


redemption of their public shares for cash. Additionally, neither FVAC nor the Companies will be required to consummate the Business Combination if the Minimum Cash Condition is not satisfied or waived by the Companies and FVAC.

 

Q:

WILL HOW I VOTE AFFECT MY ABILITY TO EXERCISE REDEMPTION RIGHTS?

 

A:

No. You may exercise your redemption rights whether you vote your public shares for or against, or whether you abstain from voting on, the Business Combination Proposal or any other proposal described in this proxy statement/consent solicitation/prospectus. As a result, the Business Combination Proposal can be approved by stockholders who will redeem their public shares and no longer remain stockholders and the Business Combination may be consummated even though the funds available from the Trust Account and the number of public stockholders are substantially reduced as a result of redemptions by public stockholders. However, neither FVAC nor the Companies will be required to consummate the Business Combination if the Minimum Cash Condition is not satisfied or waived. Also, with fewer public shares and public stockholders, the trading market for MPMC Class A common stock following the Business Combination may be less liquid than the market for FVAC Class A common stock prior to the Business Combination and MPMC may not be able to meet the listing standards of the NYSE.

 

Q:

HOW DO I EXERCISE MY REDEMPTION RIGHTS?

 

A:

If you are a holder of public shares and wish to exercise your redemption rights, you must demand that FVAC redeem your public shares for cash no later than the second business day preceding the FVAC Special Meeting by delivering your stock to FVAC’s transfer agent physically or electronically using Depository Trust Company’s DWAC (Deposit and Withdrawal at Custodian) system. Any holder of public shares will be entitled to demand that such holder’s public shares be redeemed for a full pro rata portion of the amount then in the Trust Account (which, for illustrative purposes, was approximately $345.07 million, or $10.00 per share, as of October 12, 2020, the record date). Such amount, including interest earned on the funds held in the Trust Account and not previously released to pay its taxes, will be paid promptly upon consummation of the Business Combination. However, under Delaware law, the proceeds held in the Trust Account could be subject to claims which could take priority over those of FVAC’s public stockholders exercising redemption rights, regardless of whether such holders vote for or against the Business Combination Proposal. Therefore, the per-share distribution from the Trust Account in such a situation may be less than originally anticipated due to such claims. Your vote on any proposal other than the Business Combination Proposal will have no impact on the amount you will receive upon exercise of your redemption rights.

Any request for redemption, once made by a holder of public shares, may be withdrawn at any time up to the time the vote is taken with respect to the Business Combination Proposal at the FVAC Special Meeting. If you deliver your public shares for redemption to FVAC’s transfer agent and later decide prior to the FVAC Special Meeting not to elect redemption, you may request that FVAC’s transfer agent return the shares (physically or electronically). You may elect to redeem your public shares whether you vote for or against, or whether you abstain from voting on, the Business Combination.

Any corrected or changed proxy card or written demand of redemption rights must be received by FVAC’s transfer agent prior to the vote taken on the Business Combination Proposal at the FVAC Special Meeting. No demand for redemption will be honored unless the holder’s stock has been delivered (either physically or electronically) to FVAC’s transfer agent.

If a holder of public shares properly makes a request for redemption and the public shares are delivered as described to FVAC’s transfer agent as described herein, then, if the Business Combination is consummated, FVAC will redeem these public shares for a pro rata portion of funds deposited in the Trust Account. If you exercise your redemption rights, then you will be exchanging your public shares for cash.

For a discussion of the material U.S. federal income tax considerations for holders of public shares with respect to the exercise of these redemption rights, see “Material U.S. Federal Income Tax Consequences—

 

9


Tax Consequences of a Redemption of FVAC Public Shares” beginning on page 120 of this proxy statement/consent solicitation/prospectus.

 

Q:

WHAT HAPPENS TO THE FUNDS DEPOSITED IN THE TRUST ACCOUNT AFTER CONSUMMATION OF THE BUSINESS COMBINATION?

 

A:

The net proceeds of FVAC’s IPO, together with funds raised from the private sale (the “Private Placement”) of an aggregate of 5,933,333 private placement warrants (the “Private Placement Warrants”) simultaneously with the consummation of FVAC’s IPO, was placed in the Trust Account immediately following FVAC’s IPO. After consummation of the Business Combination, the funds in the Trust Account will be used to pay holders of the public shares who exercise redemption rights, to pay fees and expenses incurred in connection with the Business Combination (including aggregate fees of approximately $12.1 million as deferred underwriting commissions related to FVAC’s IPO) and for MPMC’s working capital and general corporate purposes, including to pay down a portion of the Companies’ debt.

 

Q:

WHAT HAPPENS IF THE BUSINESS COMBINATION IS NOT CONSUMMATED?

 

A:

If FVAC does not complete the Business Combination for any reason, FVAC would search for another target business with which to complete a business combination. If FVAC does not complete the Business Combination or acquire another target business by May 4, 2022, FVAC must: (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, subject to lawfully available funds therefor, redeem 100% of its public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the trust account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible following such redemption, subject to the approval of FVAC’s remaining stockholders and the FVAC Board, dissolve and liquidate, subject in each case to FVAC’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to the FVAC warrants, which will expire worthless if it fails to complete its initial business combination within the 24-month time period.

 

Q:

HOW DOES THE SPONSOR INTEND TO VOTE ON THE PROPOSALS?

 

A:

The Insiders own of record and are entitled to vote an aggregate of approximately 20% of the outstanding shares of FVAC Common Stock. The Insiders have agreed to vote any Founder Shares, and any public shares held by them as of the record date, in favor of the proposals. See “Related Agreements—Parent Sponsor Letter Agreement” beginning on page 142 of this proxy statement/consent solicitation/prospectus.

 

Q:

WHAT CONSTITUTES A QUORUM AT THE FVAC SPECIAL MEETING?

 

A:

A quorum of FVAC’s stockholders is necessary to hold a valid meeting. A quorum will be present at the FVAC Special Meeting if holders of a majority in voting power of FVAC Common Stock issued and outstanding and entitled to vote at the FVAC Special Meeting is present virtually or represented by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum at the FVAC Special Meeting. The holders of the Founder Shares, who currently own approximately 20% of the issued and outstanding shares of FVAC Common Stock, will count towards this quorum. Whether or not there is a quorum, the chairman of the FVAC Special Meeting has the power to adjourn the FVAC Special Meeting. As of the record date for the FVAC Special Meeting, 21,562,501 shares of FVAC Common Stock would be required to achieve a quorum.

 

10


Q:

WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL AT THE FVAC SPECIAL MEETING?

 

A:

The Business Combination Proposal: The affirmative vote of the holders of a majority of the votes cast by holders of the outstanding shares of FVAC Common Stock present virtually at the FVAC Special Meeting webcast or represented by proxy, voting together as a single class, is required to approve the Business Combination Proposal. FVAC stockholders must approve the Business Combination Proposal in order for the Business Combination to occur. If FVAC stockholders fail to approve the Business Combination Proposal, the Business Combination will not occur. As further discussed in the section entitled “Related Agreements—Parent Sponsor Letter Agreement” beginning on page 142 of this proxy statement/consent solicitation/prospectus, the Insiders have entered into an amended and restated letter agreement with FVAC (and amended and restated on August 26, 2020, and as it may be amended and/or restated from time to time, the “Parent Sponsor Letter Agreement”) pursuant to which the Insiders have agreed to vote shares of FVAC Common Stock held by them, representing approximately 20% of the aggregate voting power of the FVAC Common Stock, all in favor of the Business Combination Proposal.

The Charter Proposals: The affirmative vote of the holders of a majority of the outstanding shares of FVAC Common Stock, voting together as a single class, is required to approve each Charter Proposal. Notwithstanding the approval of the Charter Proposals, if the Business Combination is not consummated for any reason, the actions contemplated by the Charter Proposals will not be effected.

The NYSE Issuance Proposal: The affirmative vote of holders of a majority of the votes cast by holders of the outstanding shares of FVAC Common Stock present virtually at the FVAC Special Meeting webcast or represented by proxy, voting together as a single class, is required to approve the NYSE Issuance Proposal. If FVAC stockholders fail to approve the NYSE Issuance Proposal, the Business Combination will not occur.

The Director Election Proposal: The affirmative vote (virtually or by proxy) of holders of a plurality of the votes cast by holders of outstanding shares of FVAC Common Stock entitled to vote thereon at the FVAC Special Meeting, voting as a single class, is required to approve the Director Election Proposal. If FVAC stockholders fail to approve the Director Election Proposal, the Business Combination will not occur. Notwithstanding the approval of the Director Election Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Director Election Proposal will not be effected.

The Incentive Plan Proposal: The affirmative vote of holders of a majority of the votes cast by holders of the outstanding shares of FVAC Common Stock present virtually at the FVAC Special Meeting webcast or represented by proxy, voting together as a single class, is required to approve the Incentive Plan Proposal. Notwithstanding the approval of the Incentive Plan Proposal, if the Business Combination is not consummated for any reason, the actions contemplated by the Incentive Plan Proposal will not be effected.

 

Q:

DO ANY OF FVAC’S DIRECTORS OR OFFICERS HAVE INTERESTS IN THE BUSINESS COMBINATION THAT MAY DIFFER FROM OR BE IN ADDITION TO THE INTERESTS OF FVAC STOCKHOLDERS?

 

A:

FVAC’s executive officers and certain non-employee directors have interests in the Business Combination that may be different from, or in addition to, the interests of FVAC stockholders generally. The FVAC Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in approving the Merger Agreement and in recommending that the Merger Agreement and the transactions contemplated thereby be approved by the stockholders of FVAC. See “The Business Combination—Interests of FVAC’s Directors and Officers in the Business Combination” beginning on page 111 of this proxy statement/consent solicitation/prospectus.

 

11


Q:

WHAT DO I NEED TO DO NOW?

 

A:

After carefully reading and considering the information contained in this proxy statement/consent solicitation/prospectus, please submit your proxies as soon as possible so that your shares will be represented at the FVAC Special Meeting. Please follow the instructions set forth on the proxy card or on the voting instruction form provided by your broker, bank or other nominee if your shares are held in the name of your broker, bank or other nominee.

 

Q:

HOW DO I VOTE?

 

A:

If you are a stockholder of record of FVAC as of October 12, 2020 (the “FVAC record date”) you may submit your proxy before the FVAC Special Meeting in any of the following ways, if available:

 

   

Vote by Mail: by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope;

 

   

Vote by Internet: visit http://www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on November 12, 2020 (have your proxy card in hand when you visit the website);

 

   

Vote by Phone: by calling toll-free (within the U.S. or Canada) 1-800-690-6903 (have your proxy card in hand when you call); or

 

   

Vote at the FVAC Special Meeting: by casting your vote at the FVAC Special Meeting via the special meeting website. There will not be a physical meeting location. Any stockholder of record as of the FVAC record date can attend the FVAC Special Meeting webcast by visiting www.virtualshareholdermeeting.com/FVAC2020, where such stockholders may vote during the special meeting. The Special Meeting starts at 9:00 a.m., Eastern Time. We encourage you to allow ample time for online check-in, which will open at 8:45 a.m., Eastern Time. Please have your 16-digit control number to join the FVAC Special Meeting webcast. Instructions on who can attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com.

If your shares are held in “street name” through a broker, bank or other nominee, your broker, bank or other nominee will send you separate instructions describing the procedure for voting your shares. Simply complete, sign and date your voting instruction card and return it in the postage-paid envelope provided to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet as instructed by your broker, bank or other nominee. “Street name” stockholders who wish to vote at the FVAC Special Meeting will need the 16-digit control number included on the instructions that accompanied your proxy materials, if applicable, or to obtain a proxy form from your broker, bank or other nominee.

 

Q:

WHEN AND WHERE IS THE FVAC SPECIAL MEETING?

 

A:

The FVAC Special Meeting will be held exclusively via a live webcast at www.virtualshareholdermeeting.com/FVAC2020, on November 13, 2020 at 9:00 a.m., Eastern Time. To participate in the virtual meeting, an FVAC stockholder of record will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. The FVAC Special Meeting webcast will begin promptly at 9:00 a.m., Eastern Time. FVAC stockholders are encouraged to access the FVAC Special Meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

 

Q:

IF MY SHARES ARE HELD IN “STREET NAME” BY A BROKER, BANK OR OTHER NOMINEE, WILL MY BROKER, BANK OR OTHER NOMINEE VOTE MY SHARES FOR ME?

 

A:

If your shares are held in “street name” in a stock brokerage account or by a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please

 

12


follow the voting instructions provided by your broker, bank or other nominee. Please note that you may not vote shares held in “street name” by returning a proxy card directly to FVAC.

Under the rules of the NYSE, brokers who hold shares in “street name” for a beneficial owner of those shares typically have the authority to vote in their discretion on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are not permitted to exercise their voting discretion with respect to the approval of matters that the NYSE determines to be “non-routine” without specific instructions from the beneficial owner. It is expected that all proposals to be voted on at the FVAC Special Meeting are “non-routine” matters. Broker non-votes occur when a broker or nominee is not instructed by the beneficial owner of shares to vote on a particular proposal for which the broker does not have discretionary voting power.

If you are a FVAC stockholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on the Business Combination Proposal, the NYSE Issuance Proposal, the Director Election Proposal, or the Incentive Plan Proposal. Such broker non-votes will have no effect on the vote count for such proposals.

If you are a FVAC stockholder holding your shares in “street name” and you do not instruct your broker, bank or other nominee on how to vote your shares, your broker, bank or other nominee will not vote your shares on Charter Proposals. Such broker non-votes will have the same effect as a vote “AGAINST” the Charter Proposals.

 

Q:

WHAT IF I ATTEND THE FVAC SPECIAL MEETING VIRTUALLY AND ABSTAIN OR DO NOT VOTE?

 

A:

For purposes of the FVAC Special Meeting, an abstention occurs when a stockholder is present virtually at the FVAC Special Meeting webcast and does not vote or returns a proxy with an “abstain” vote.

If you are a FVAC stockholder that attends the FVAC Special Meeting webcast virtually and fails to vote on the Business Combination Proposal, the NYSE Issuance Proposal, the Director Election Proposal, or the Incentive Plan Proposal, or if respond to such proposals with an “abstain” vote, your failure to vote or “abstain” vote in each case will have no effect on the vote count for such proposals.

If you are a FVAC stockholder that attends the FVAC Special Meeting webcast virtually and fails to vote on the Charter Proposals, or if respond to such proposals with an “abstain” vote, your failure to vote or “abstain” vote in each case will have the same effect as a vote “AGAINST” such Charter Proposal.

 

Q:

WHAT WILL HAPPEN IF I RETURN MY PROXY CARD WITHOUT INDICATING HOW TO VOTE?

A: If you sign and return your proxy card without indicating how to vote on any particular proposal, the FVAC stock represented by your proxy will be voted as recommended by the FVAC Board with respect to that proposal.

 

Q:

MAY I CHANGE MY VOTE AFTER I HAVE DELIVERED MY PROXY OR VOTING INSTRUCTION CARD?

A: Yes. You may change your vote at any time before your proxy is voted at the FVAC Special Meeting. You may do this in one of three ways:

 

   

filing a notice with the corporate secretary of FVAC;

 

   

mailing a new, subsequently dated proxy card; or

 

   

by attending the FVAC Special Meeting webcast and electing to vote your shares electronically.

 

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If you are a stockholder of record of FVAC and you choose to send a written notice or to mail a new proxy, you must submit your notice of revocation or your new proxy to Fortress Value Acquisition Corp., 1345 Avenue of the Americas, 46th Floor, New York, New York 10105, and it must be received at any time before the vote is taken at the FVAC Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than 11:59 p.m. New York City time on November 12, 2020, or by voting electronically at the FVAC Special Meeting webcast. Simply attending the FVAC Special Meeting webcast will not revoke your proxy. If you have instructed a broker, bank or other nominee to vote your shares of FVAC Common Stock, you must follow the directions you receive from your broker, bank or other nominee in order to change or revoke your vote.

 

Q:

WHAT HAPPENS IF I FAIL TO TAKE ANY ACTION WITH RESPECT TO THE FVAC SPECIAL MEETING?

 

A:

If you fail to take any action with respect to the FVAC Special Meeting and the Business Combination is approved by stockholders and consummated, you will continue to be a stockholder of FVAC. Failure to take any action with respect to the FVAC Special Meeting will not affect your ability to exercise your redemption rights. If you fail to take any action with respect to the FVAC Special Meeting and the Business Combination is not approved, you will continue to be a stockholder of FVAC while FVAC searches for another target business with which to complete a business combination.

 

Q:

WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?

 

A:

Stockholders may receive more than one set of voting materials, including multiple copies of this proxy statement/consent solicitation/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 under 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.

 

Q:

WHOM SHOULD I CONTACT IF I HAVE ANY QUESTIONS ABOUT THE PROXY MATERIALS OR VOTING?

 

A:

If you have any questions about the proxy materials, need assistance submitting your proxy or voting your shares or need additional copies of this proxy statement/consent solicitation/prospectus or the enclosed proxy card, you should contact D.F. King & Co., Inc., FVAC’s proxy solicitor, toll-free at (800) 870-0653 (banks and brokers call (212) 269-5550) or email at FVAC@dfking.com.

 

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SUMMARY

This summary highlights selected information included in this proxy statement/consent solicitation/prospectus and does not contain all of the information that may be important to you. You should read this entire document and its annexes and the other documents to which we refer before you decide how to vote. Each item in this summary includes a page reference directing you to a more complete description of that item.

Parties to the Business Combination

FVAC

FVAC is a blank check company incorporated in Delaware on January 24, 2020, 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. FVAC’s Class A common stock, units and warrants are currently listed on the NYSE under the symbols “FVAC”, “FVAC.U” and “FVAC WS,” respectively. The mailing address of FVAC’s principal executive office is 1345 Avenue of the Americas, 46th Floor, New York, New York 10105 and the telephone number of FVAC’s principal executive office is (212) 798-6100.

MPMO

MPMO owns and operates the Mountain Pass facility, one of the world’s largest integrated rare earth mining and processing facilities and the only major rare earths resource in the Western Hemisphere. MPMO acquired the Mountain Pass mine and processing facilities out of bankruptcy in July 2017. Since acquiring Mountain Pass, MPMO has implemented a disciplined operating approach that has already produced superior product output and performance compared to that of the prior ownership, while also generating cash flow from the sale of its rare earth concentrate. MPMO is now beginning to reinvest that cash flow into the further optimization of the facility to enable integrated separation operations, thereby ensuring upstream supply of REOs and setting a foundation for long-term growth and value creation for stakeholders.

MPMO’s mission is to maximize shareholder returns over the long-term by executing a disciplined business strategy to re-establish a secure and sustainable domestic supply chain for critical sectors of the modern global economy. MPMO believes it can generate positive outcomes for U.S. national security and industry, the U.S. workforce, and the environment.

MPMO is a limited liability company formed under the laws of the State of Delaware. The mailing address of MPMO’s principal executive office is 6720 Via Austi Parkway, Suite 450, Las Vegas, NV 89119. The telephone number of MPMO is (702) 844-6111. For more information about MPMO, please see the sections entitled “Information About the Companies’ Business,” “MPMO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Management After the Business Combination” of this proxy statement/consent solicitation/prospectus.

SNR

SNR is a Delaware limited liability company that holds mineral rights to the Mountain Pass mine and surrounding areas as well as intellectual property rights related to the processing and development of rare earth minerals. The mailing address of SNR’s office is c/o JHL Capital Group LLC, 900 North Michigan Avenue, Suite 2000, Chicago, Illinois 60611 and the telephone number of SNR’s office is (312) 628-7350. For more information about SNR, please see the sections entitled “Information About the Companies’ Business” and “SNR’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this proxy statement/consent solicitation/prospectus.

 

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The Business Combination and the Merger Agreement

The terms and conditions of the Business Combination are contained in the Merger Agreement, which is attached as Annex A to this proxy statement/consent solicitation/prospectus. We encourage you to read the Merger Agreement carefully, as it is the legal document that governs the Business Combination.

If the Merger Agreement is approved and adopted and the Business Combination is subsequently completed, each of MPMO and SNR will be an indirect wholly-owned subsidiary of FVAC.

Consideration to the Companies Unitholders in the Business Combination

Each share of MPMO HoldCo preferred stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

Each share of MPMO HoldCo common stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

Each share of SNR HoldCo common stock issued and outstanding immediately prior to the effective time of the initial SNR merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 20,000,000 divided by (B) the number of shares of SNR HoldCo common stock outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

No fractional shares will be issued in connection with the Business Combination. In lieu thereof, FVAC shall pay or cause to be paid cash to each holder who otherwise would have been entitled to receive a fractional share.

See “The Merger Agreement—Merger Consideration” beginning on page 125 of this proxy statement/consent solicitation/prospectus.

Related Agreements (page 142)

Parent Sponsor Letter Agreement

Concurrently with the execution of the Merger Agreement and as amended and restated on August 26, 2020, the Class F Holders entered into the Parent Sponsor Letter Agreement, pursuant to which the Class F Holders agreed to (i) vote all of their shares of FVAC Class F common stock in favor of the Business Combination and certain other matters, (ii) certain restrictions on their shares of FVAC Class F common stock (other than any shares of FVAC Class F common stock received in exchange for Private Placement Warrants), in each case upon the terms and subject to the conditions set forth therein, and (iii) subject to the satisfaction of the closing conditions in the Merger Agreement, surrender to FVAC the Surrendered Shares, if the amount of cash available in the Trust Account, less (1) any amounts required to satisfy the FVAC stockholder redemptions, plus (2) the PIPE Investment Amount, is less than $495 million.

 

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For a more detailed discussion, please see “Related Agreements—Parent Sponsor Letter Agreement” beginning on page 142 of this proxy statement/consent solicitation/prospectus.

Subscription Agreements

In connection with the execution of the Merger Agreement, FVAC entered into the Subscription Agreements a form of which is attached to this proxy statement/consent solicitation/prospectus as Annex D, with the PIPE Investors, including the Sponsor, pursuant to which the PIPE Investors have committed to provide equity financing to FVAC in an aggregate amount of $200,000,000, conditioned upon consummation of the Business Combination and pursuant to which FVAC will issue and sell 20,000,000 shares of FVAC Class A common stock, par value $0.0001 per share at a purchase price of $10.00 per share (the consummation of the transactions contemplated by the Subscription Agreements shall be referred to herein as the “PIPE Investment”).

Additionally, FVAC agreed that within fifteen (15) business days after the closing of the initial business combination, FVAC will file with the SEC a registration statement for the registration, under the Securities Act, of the shares of FVAC Class A common stock issuable in connection with the PIPE Investment.

For a more detailed discussion, please see “Related Agreements— Subscription Agreements” beginning on page 143 of this proxy statement/consent solicitation/prospectus.

Parent Sponsor Warrant Exchange Agreement

In connection with the execution of the Merger Agreement, FVAC and the Sponsor entered into the Parent Sponsor Warrant Exchange Agreement, a copy of which is attached to this proxy statement/consent solicitation/prospectus as Annex G, pursuant to which the Sponsor agreed to exchange all 5,933,333 of its Private Placement Warrants for an aggregate of 890,000 shares of FVAC Class F common stock that, upon the consummation of the Business Combination, will be converted into FVAC Class A common stock (which will not be subject to vesting or forfeiture restrictions under the Parent Sponsor Letter Agreement), subject to and immediately prior to the consummation of the Business Combination.

For a more detailed discussion, please see “Related Agreements— Parent Sponsor Warrant Exchange Agreement” beginning on page 143 of this proxy statement/consent solicitation/prospectus.

Support Agreements

Shortly after the execution of the Merger Agreement, the equityholders of MPMO holding a majority of the common units of MPMO issued and outstanding as of the date of the Merger Agreement executed and delivered to FVAC a support agreement (the “MPMO Support Agreement”), a copy of which is attached to this proxy statement/consent solicitation/prospectus as Annex E, and (b) the equityholders of SNR holding a majority of the common units of SNR issued and outstanding as of the date of the Merger Agreement executed and delivered to FVAC a support agreement (“SNR Support Agreement”), a copy of which is attached to this proxy statement/consent solicitation/prospectus as Annex F, pursuant to which, among other things, such equityholders have agreed to (a) vote in favor of and support the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement, subject to certain customary conditions, (b) refrain from transferring, except for affiliate transfers, any common units of MPMO or SNR, as applicable, and (c) not to commence, join in, facilitate, assist or encourage, and agrees to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against FVAC, MPMO, SNR or the other parties to the Merger Agreement or any of their respective successors or directors challenging the validity of, or seeking to enjoin the operation of, any provision of the Support Agreements.

For a more detailed discussion, please see “Related Agreements— Support Agreements” beginning on page 143 of this proxy statement/consent solicitation/prospectus.

 

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Amended and Restated Registration Rights Agreement

In connection with the consummation of the Business Combination, FVAC, the A&R RRA Parties will enter into the A&R RRA, a form of which is attached to this proxy statement/consent solicitation/prospectus as Annex I. In accordance with the A&R RRA, the A&R RRA Parties and their permitted transferees will be entitled to, among other things, customary registration rights, including demand, piggy-back and shelf registration rights. The A&R RRA also provides that FVAC will pay certain expenses relating to such registrations and indemnify the registration rights holders against (or make contributions in respect of) certain liabilities which may arise under the Securities Act.

Holders of substantially all of the Companies’ units and the Insiders have each agreed with FVAC, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of MPMC Class A common stock during the period from the date of the closing of the Business Combination continuing through the date (i) in the case of MPMC Class A common stock of the New Holders other than the JHL Holders (as each such term is defined in the A&R RRA), 180 days after the closing date of the Business Combination or (ii) in the case of the MPMC Class A common stock of the Insiders and of the JHL Holders, one year after the consummation of the Business Combination.

For a more detailed discussion, please see “Related Agreements—Amended and Restated Registration Rights Agreement” beginning on page 144 of this proxy statement/consent solicitation/prospectus.

Reorganization Joinders

In connection with the Business Combination, certain newly-formed subsidiaries of MPMO and SNR, MPMO HoldCo and SNR HoldCo, respectively, shall execute the Pre-Closing Reorganization Joinders, a form of which is attached to this proxy statement/consent solicitation/prospectus as Annex J, pursuant to which, automatically and without any further action by any person, MPMO HoldCo and SNR HoldCo will each become a party to the Merger Agreement, and shall cause MPMO and SNR, respectively, to comply with all covenants and perform all obligations of MPMO and SNR set forth in the Merger Agreement.

For a more detailed discussion, please see “Related Agreements— Reorganization Joinders” beginning on page 144 of this proxy statement/consent solicitation/prospectus.

Organizational Structure of MPMO and SNR

The following diagram depicts, in a simplified form, the current ownership structure of MPMO as of the date of this proxy statement/consent solicitation/prospectus:

 

LOGO

 

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The following diagram depicts, in a simplified form, the current ownership structure of SNR as of the date of this proxy statement/consent solicitation/prospectus:

 

LOGO

Organizational Structure of FVAC

The following diagram illustrates, in a simplified form, the ownership structure of FVAC prior to the consummation of the Business Combination.

 

LOGO

 

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The following diagram illustrates, in a simplified form, the ownership structure of MPMC immediately following consummation of the Business Combination assuming no redemptions (excluding the potential dilutive effect of the Earnout Shares, Vesting Shares, and exercise of FVAC public warrants).

 

LOGO

 

*

FVAC Independent Directors’ ownership of Vesting Shares is excluded for purposes of ownership calculation

 

**

Other than Fortress Acquisition Sponsor, LLC

Redemption Rights (page 82)

Pursuant to FVAC’s current charter, a holder of FVAC public shares may request that FVAC redeem all or a portion of such stockholder’s public shares for cash if the Business Combination is consummated. Public stockholders may elect to redeem their public shares whether they vote for or against, or whether they abstain from voting on, the Business Combination. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, FVAC will redeem each redeeming stockholder’s public shares for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two (2) business days prior to the consummation of the Business Combination, including interest not previously released to FVAC to pay its taxes, divided by the number of then issued and outstanding public shares.

In order to exercise your redemption rights, you must:

 

   

if you hold public units, separate the underlying FVAC public shares and FVAC public warrants;

 

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prior to 5:00 p.m. Eastern Time on November 10, 2020 (two (2) business days before the FVAC Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to the transfer agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attn: Mark Zimkind

Email: mzimkind@continentalstock.com

and

 

   

deliver your FVAC public shares either physically or electronically through Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system to the transfer agent at least two (2) business days before the FVAC Special Meeting. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is FVAC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, FVAC does not have any control over this process and it may take longer than two weeks. Public stockholders who hold their FVAC public shares in street name will have to coordinate with their bank, broker or other nominee to have the FVAC public shares certificated or delivered electronically. If you do not submit a written request and deliver your FVAC public shares as described above, your FVAC public shares will not be redeemed.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” are required to either tender their certificates to the transfer agent prior to the date set forth in these proxy materials or deliver their shares to the transfer agent electronically using DTC’s 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 public shares for redemption to the transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that the transfer agent return the shares (physically or electronically). The requirement for physical or electronic delivery prior to the FVAC Special Meeting ensures that a redeeming public stockholder’s election to redeem is irrevocable once the Business Combination is approved.

Holders of outstanding public units must separate the underlying FVAC public shares and public warrants prior to exercising redemption rights with respect to the FVAC public shares.

If you hold public units registered in your own name, you must deliver the certificate for such public units to the transfer agent, with written instructions to separate such public units into FVAC public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the public units.

If a broker, dealer, commercial bank, trust company or other nominee holds your public units, you must instruct such nominee to separate your public units. Your nominee must send written instructions by facsimile to the transfer agent. Such written instructions must include the number of public units to be split and the nominee holding such public units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the public units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

 

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Each redemption of shares of FVAC Class A common stock by public stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $345.0 million as of June 30, 2020. The Merger Agreement provides that FVAC’s and the Companies’ respective obligations to consummate the Business Combination are conditioned on, among other things, satisfaction or waiver of, the Minimum Cash Condition. This condition to the respective obligations of the parties is for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of FVAC public shares by public stockholders, this condition is not met (or waived), then FVAC or the Companies may elect not to consummate the Business Combination. In addition, in no event will FVAC redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001. Holders of public warrants do not have redemption rights in connection with the Business Combination.

Prior to exercising redemption rights, stockholders should verify the market price of FVAC Class A common stock as they may receive higher proceeds from the sale of their FVAC Class A common stock in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. FVAC cannot assure you that you will be able to sell your FVAC Class A common stock in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in FVAC Class A common stock when you wish to sell your shares.

If you exercise your redemption rights, the shares of FVAC Class A common stock will cease to be outstanding immediately prior to the Business Combination and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account. You will no longer own those shares and will have no right to participate in, or have any interest in, the future growth of FVAC, if any. You will be entitled to receive cash for these shares only if you properly and timely demand redemption.

If the Business Combination is not approved and FVAC does not consummate an initial business combination by May 4, 2022, FVAC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the public stockholders and FVAC warrants will expire worthless.

Board of MPMC Following the Business Combination (page 113)

In connection with the consummation of the transactions contemplated by the Merger Agreement, FVAC will amend and restate its current charter to (i) change its name to “MP Materials Corp.”, and (ii) have a classified board that will initially consist of seven (7) directors. The MPMC Board shall be divided into three classes, Class I, Class II and Class III, with only one class of directors being elected in each year and each class (except for those directors appointed to Class I and Class II in connection with the Business Combination) serving a three-year term. The term of office of the Class I directors will expire at the first annual meeting of stockholders of MPMC following the effectiveness of the Second Amended and Restated Certificate of Incorporation. The term of office of the Class II directors will expire at the second annual meeting of stockholders of MPMC following the effectiveness of the Second Amended and Restated Certificate of Incorporation. The term of office of the Class III directors will expire at the third annual meeting of stockholders of MPMC following the effectiveness of the Second Amended and Restated Certificate of Incorporation.

See “Board of MPMC Following the Business Combination” beginning on page 113 of this proxy statement/consent solicitation/prospectus.

 

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The Charter Proposals (page 303)

To consider and vote upon six (6) separate proposals to approve, assuming the Business Combination Proposal, the NYSE Issuance Proposal and the Director Election Proposal are approved and adopted, the following Charter Proposals:

 

   

To consider and vote upon an amendment to FVAC’s current charter to approve the increase of the total number of authorized shares of all classes of capital stock from 221,000,000 shares to 500,000,000, consisting of (a) 450,000,000 shares of MPMC Class A common stock and (b) 50,000,000 shares of preferred stock;

 

   

To consider and vote upon an amendment to FVAC’s current charter that the MPMC Board be divided into three classes, with only one class of directors being elected each year and members of each class (except for those directors appointed to Class I and Class II in connection with the Business Combination) serving a three-year term, and to make certain related changes;

 

   

To consider and vote upon an amendment to FVAC’s current charter that MPMC will not be governed by Section 203 of the DGCL and, instead, will be governed under a provision that is substantially similar to Section 203 of the DGCL, but excludes the Sponsor, JHL Capital Group LLC (“JHL Capital Group”) and any Exempt Transferee (as defined in the proposed charter) and their respective affiliates or successors or any “group”, or any member of any such group, to which such persons are a party from the definition of “interested stockholder,” and to make certain related changes;

 

   

To consider and vote upon an amendment to FVAC’s current charter to include an exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation other than with respect to any complaint asserting a cause of action arising under the United States federal securities laws for which the federal courts of the United States of America will be the exclusive jurisdiction under the Second Amended and Restated Certificate of Incorporation to the fullest extent permitted by law;

 

   

To consider and vote upon an amendment to FVAC’s current charter to require that any amendments relating to Article V (Board of Directors) may only be amended, in addition to any vote required by applicable law, by the affirmative vote of the holders of at least 66.7% of the voting power of all the then-outstanding shares of stock of MPMC entitled to vote in the election of directors, voting together as a single class;

 

   

To consider and vote upon an amendment to FVAC’s current charter to authorize all other proposed changes, including, among other things, (i) changing the post-Business Combination corporate name from “Fortress Value Acquisition Corp.” to “MP Materials Corp.” and removing certain obsolete provisions relating to FVAC’s status as a blank check company, such as its purpose of effecting a business combination and the establishment of a Trust Account and stockholder redemption rights, and the FVAC Class F common stock, that will no longer apply upon consummation of the Business Combination, or (ii) administrative or clarifying revisions, including (a) providing that the number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of at least a majority of the voting power of stock entitled to vote thereon, and (b) the removal of language without substantive effect.

We refer to Proposals No. 2 - 7 collectively as the “Charter Proposals”. Please see the sections entitled “FVAC Proposals” beginning on page 302 of this proxy statement/consent solicitation/prospectus for more information.

 

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Other Proposals

In addition, at the FVAC Special Meeting, FVAC stockholders will vote on the following proposals:

 

   

To consider and vote upon a proposal to approve the Merger Agreement and approve the transactions contemplated thereby;

 

   

To consider and vote upon a proposal, for purposes of complying with applicable provisions of Rule 312.03 of the NYSE Listed Company Manual, to approve (i) the issuance of more than twenty percent (20%) of FVAC’s currently issued and outstanding FVAC Common Stock in connection with the Business Combination, and (ii) the issuance of more than one percent (1%) of FVAC’s currently issued and outstanding FVAC Common Stock to a Related Party (as defined in Rule 312.03 of the NYSE Listed Company Manual) in connection with the Business Combination, which we refer to as the “NYSE Issuance Proposal”;

 

   

To consider and vote upon a proposal to elect seven directors to serve staggered terms on the FVAC Board until immediately following the 2021, 2022 and 2023 annual meetings of FVAC stockholders, as applicable, and until their respective successors are duly elected and qualified, subject to their earlier death, resignation or removal, which we refer to as the “Director Election Proposal”; and

 

   

To consider and vote upon a proposal to approve and adopt the Long Term Incentive 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 proxy statement/consent solicitation/prospectus as Annex K.

Please see the section entitled “FVAC Proposals” beginning on page 302 of this proxy statement/consent solicitation/prospectus.

Date, Time and Place of Special Meeting (page 76)

The FVAC Special Meeting will be held exclusively via a live webcast at www.virtualshareholdermeeting.com/FVAC2020, on November 13, 2020 at 9:00 a.m., Eastern Time. To participate in the virtual meeting, an FVAC stockholder of record will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. The FVAC Special Meeting webcast will begin promptly at 9:00 a.m., Eastern Time. FVAC stockholders are encouraged to access the FVAC Special Meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

Voting Power; Record Date for Special Meeting (page 76)

As a stockholder of FVAC, you have a right to vote on the matters presented at the FVAC Special Meeting, which are summarized above and fully set forth in this proxy statement/consent solicitation/prospectus. You will be entitled to vote or direct votes to be cast at the FVAC Special Meeting if you owned FVAC Common Stock at the close of business on October 12, 2020, which is the record date for the FVAC Special Meeting. You are entitled to one vote for each share of FVAC 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 43,125,000 shares of FVAC Common Stock outstanding, of which 34,500,000 are shares of FVAC Class A common stock and 8,625,000 are shares of FVAC Class F common stock held by the Insiders.

In connection with FVAC’s IPO, the Insiders agreed to vote their Founder Shares and any public shares purchased during or after FVAC’s IPO in favor of the Business Combination. Currently, the Insiders own

 

24


approximately 20% of the issued and outstanding FVAC Common Stock, including all of the outstanding Founder Shares. As a result, it is expected that the Insiders will vote all of such shares in favor of each of the proposals.

Accounting Treatment of the Business Combination (page 114)

The Business Combination will be accounted for as a reverse recapitalization for which MPMO has been determined to be the accounting acquirer (the “Reverse Recapitalization”). As the Business Combination will be accounted for as a reverse recapitalization no goodwill or other intangible assets will be recorded, in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, FVAC will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization will be treated as the equivalent of MPMO issuing stock for the net assets of FVAC, accompanied by a recapitalization. The net assets of FVAC will be stated at historical cost. Operations prior to the Reverse Recapitalization will be those of MPMO.

FVAC’s acquisition of SNR (the “SNR Mineral Rights Acquisition”) will be treated as an asset acquisition under Accounting Standard Codification 805, “Business Combinations” (“ASC 805”) and will be accounted for using the cost accumulation and allocation model. Under this method of accounting, MPMC will allocate the cost of the acquisition on a relative fair value basis to the net assets acquired.

Appraisal Rights (page 114)

Appraisal rights are not available to holders of FVAC Common Stock in connection with the Business Combination under Delaware law. Appraisal rights are not available to equityholders of MPMO or SNR in connection with the Business Combination under Delaware law.

Proxy Solicitation (page 84)

Proxies may be solicited by mail. FVAC has engaged D.F. King & Co., Inc. to assist in the solicitation of proxies.

If a stockholder grants a proxy, it may still vote its shares virtually if it revokes its proxy before the FVAC Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section entitled “Special Meeting of FVAC Stockholders—Revoking Your Proxy” beginning on page 82 of this proxy statement/consent solicitation/prospectus.

Interests of FVAC’s Directors and Officers in the Business Combination (page 111)

Certain of FVAC’s executive officers and directors have interests in the Business Combination that may be different from, or in addition to, the interests of FVAC’s stockholders. The members of the FVAC Board were aware of and considered these interests, among other matters, when they approved the Merger Agreement and recommended that FVAC stockholders approve the proposals required to effect the Business Combination. See “The Business Combination—Interests of FVAC’s Directors and Officers in the Business Combination” beginning on page 111 of this proxy statement/consent solicitation/prospectus.

Conditions to the Business Combination (page 138)

The consummation of the Business Combination contemplated by the Merger Agreement is subject to certain conditions, among others: (i) approval by FVAC’s stockholders and the Companies’ respective

 

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equityholders, (ii) FVAC having at least $5,000,001 of net tangible assets as of the effective time of the consummation of the Business Combination, (iii) the expiration or termination of the waiting period under the HSR Act, (iv) provision of notice to the relevant government agencies concerning nuclear licenses and the receipt of any related approvals, including any necessary consent by the U.S. Nuclear Regulatory Commission (“NRC”) and the California Department of Public Health, Division of Radiation Safety and Environmental Management (“DPH”), (v) the listing of the shares of FVAC Class A common stock to be issued in connection with the closing of the transactions contemplated by the Merger Agreement on the NYSE and the effectiveness of this Registration Statement, (vi) the satisfaction of the Minimum Cash Condition, (vii) the consummation of (a) the Pre- Closing Reorganization and (b) the transactions contemplated by the Parent Sponsor Letter Agreement and (viii) the delivery by SNR and MPMO to FVAC of a title opinion and survey in respect of the Mountain Pass facility consistent with the terms of the Merger Agreement, which has been satisfied as of the date of this proxy statement/consent solicitation/prospectus.

See “The Merger Agreement—Conditions to the Business Combination” beginning on page 138 of this proxy statement/consent solicitation/prospectus.

Regulatory Matters

Completion of the Business Combination is subject to governmental approval, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) and any necessary consent from the NRC and the DPH. FVAC and the Companies have agreed to use their respective reasonable best efforts to obtain all required regulatory approvals. FVAC and the Companies received early termination of the waiting period under the HSR Act on August 11, 2020.

The Companies and FVAC have also agreed to act as promptly as practicable but in no event later than ten (10) business days after the date of the Merger Agreement to comply with the notification and reporting requirements of the DPH and NRC. The Companies and FVAC will promptly and in good faith respond to all information requested of them by DPH and NRC in connection with such notification and otherwise cooperate in good faith with each other and agree to use their best efforts to obtain any approvals that may be required by DPH and NRC. Completion of the Business Combination is subject to the issuance of an order by the NRC consenting to the indirect change of control of NRC Export License Nos. XSOU8707 and XSOU8827 (the “Licenses”) as requested by the NRC’s Office of International Programs. On August 17, 2020, MPMO submitted an application requesting that the NRC issue an order consenting to the indirect change of control of the licenses, and the NRC consented to the indirect change of control of the licenses on September 21, 2020.

On July 29, 2020, MPMO notified DPH of the Business Combination. DPH has determined that the Business Combination results in a change of control requiring an amendment to MPMO’s existing radioactive materials license, and indicated that DPH intends to issue the amendment subsequent to the consummation of the Business Combination.

The regulatory approvals to which completion of the Business Combination are subject are described in more detail in the section of this proxy statement/consent solicitation/prospectus entitled “Regulatory Approvals Related to the Business Combination” beginning on page 145 of this proxy statement/consent solicitation/prospectus.

Material U.S. Federal Income Tax Considerations (page 115)

As described more fully below, a holder of FVAC 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 holder holds its FVAC Class A common stock as a capital asset). There may be certain circumstances in which the redemption may be treated as a distribution of an amount equal to the redemption proceeds, for U.S. federal income tax purposes, depending on the amount of

 

26


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).

The parties intend for each of the Pre-Closing Reorganization, the MPMO Mergers (taken together) and the SNR Mergers (taken together) to be treated as a “reorganization” for U.S. federal income tax purposes within the meaning of Section 368(a) of the Code and the discussion below assumes that the transactions will so qualify. The obligations of MPMO, SNR and FVAC to complete the Business Combination are not conditioned on the receipt of opinions from any tax advisor or rulings from the Internal Revenue Service (“IRS”) to the effect that any of the Pre-Closing Reorganization, the MPMO Mergers or the SNR Mergers will qualify as a “reorganization” within the meaning of Section 368(a) of the Code for U.S. federal income tax purposes, and the Business Combination will occur even if they do not so qualify.

The tax consequences of the Business Combination to each stockholder may depend on such holder’s particular facts and circumstances. Accordingly, each holder is urged to consult its tax advisor with respect to the particular tax consequence of the Business Combination to such holder. For more information, see “Material U.S. Federal Income Tax Consequences” beginning on page 115.

No Solicitation (page 132)

Except as expressly permitted by the provisions of the Merger Agreement summarized under the heading “The Merger Agreement—Covenants and AgreementsNo Solicitation” (the “no solicitation provisions”), from the date of the Merger Agreement to the closing of the Business Combination or, if earlier, the termination of the Merger Agreement in accordance with its terms, the Companies agreed not to, and agreed to cause their respective subsidiaries not to, and agreed to direct its respective employees, agents, officers, directors, representatives and advisors not to, directly or indirectly:

 

   

solicit, initiate, enter into or continue discussions, negotiations or transactions with, or encourage or respond to any inquiries or proposals by, or provide any information to, any person (other than FVAC and its agents, representatives, advisors) concerning any company business combination;

 

   

enter into any agreement regarding, continue or otherwise participate in any discussions or negotiations regarding, or cooperate in any way that would otherwise reasonably be expected to lead to a company business combination; or

 

   

commence, continue or renew any due diligence investigation regarding a company business combination.

The Companies also agreed that immediately following the execution of the Merger Agreement it shall, and shall cause each of its subsidiaries and shall direct its respective employees, agents, officers, directors, representatives and advisors to, immediately cease any and all existing discussions or negotiations with any person with respect to any company business combination.

Except as expressly permitted by the provisions of the Merger Agreement summarized under this heading “—No Solicitation” (the “no solicitation provisions”), from the date of the Merger Agreement to the closing of the Business Combination or, if earlier, the termination of the Merger Agreement in accordance with its terms, FVAC agreed not to, and agreed to cause its subsidiaries not to, and agreed to direct its respective employees, agents, officers, directors, representatives and advisors not to, directly or indirectly:

 

   

solicit, initiate, enter into or continue discussions or transactions with, or encourage or respond to any inquiries or proposals by, or provide any information to, any person (other than the Companies, the Companies’ unitholders and their respective Company representatives) concerning any parent business combination;

 

27


   

enter into any agreement regarding, continue or otherwise participate in any discussions or negotiations regarding, or cooperate in any way that would otherwise reasonably be expected to lead to a parent business combination; or

 

   

commence, continue or renew any due diligence investigation regarding a parent business combination.

FVAC also agreed that immediately following the execution of the Merger Agreement it shall, and shall direct its respective employees, agents, officers, directors, representatives and advisors to, immediately cease any and all existing discussions or negotiations with any person with respect to any parent business combination.

See “The Merger Agreement—Covenants and Agreements” beginning on page 126 of this proxy statement/consent solicitation/prospectus.

Termination (page 139)

The Merger Agreement may be terminated under certain customary and limited circumstances prior to the consummation of the Business Combination, including (i) by mutual written consent of the parties, (ii) by either FVAC or the Companies if (a) the consummation of the Business Combination has not occurred on or prior to March 31, 2021 (the “Outside Date”), (b) a final and nonappealable order has been issued or governmental action permanently restrains, enjoins or otherwise prohibits the Business Combination or (c) FVAC’s stockholder approval is not obtained, (iii) by the Companies upon a breach by FVAC or the Merger Subs if such breach gives rise to a failure of a closing condition and cannot or has not been cured within the earlier of 30 days’ notice by the Companies or the Outside Date, and (iv) by FVAC (a) upon a breach by the Companies if such breach gives rise to a failure of a closing condition and cannot or has not been cured within the earlier of 30 days’ notice by FVAC or the Outside Date, (b) if a majority of the MPMO equityholders do not enter into the MPMO Support Agreement within 24 hours of the date of the Merger Agreement, (c) if a majority of the SNR equityholders do not enter into the SNR Support Agreement within 24 hours of the date of the Merger Agreement or (d) if either of the Companies respective equityholder approvals are not obtained within three business days of this Registration Statement being declared effective by the SEC.

See “The Merger Agreement—Termination” beginning on page 139 of this proxy statement/consent solicitation/prospectus.

Listing of Securities (page 266)

FVAC Class A common stock is listed on the NYSE under the symbol “FVAC”. FVAC’s public warrants are listed on the NYSE under the symbol “FVAC WS”. FVAC’s units that have not separated are listed on the NYSE under the symbol “FVAC.U”. Following the Business Combination, MPMC Class A common stock (including common stock issuable in the Business Combination) will be listed on the NYSE under the symbol “MP”.

Comparison of Stockholders’ Rights (page 269)

Following the Business Combination, the rights of MPMO and SNR unitholders who become MPMC stockholders in the Business Combination will no longer be governed by the respective certificates of formation and limited liability company agreements of MPMO and SNR and instead will be governed by the Second Amended and Restated Certificate of Incorporation and the Amended and Restated Bylaws. See “Comparison of Stockholders’ Rights” beginning on page 269.

Quorum and Required Vote for Proposals for the FVAC Special Meeting

A quorum of FVAC’s stockholders is necessary to hold a valid meeting. A quorum will be present at the FVAC Special Meeting if holders of a majority in voting power of FVAC Common Stock issued and outstanding

 

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and entitled to vote at the FVAC Special Meeting is present virtually or represented by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum at the FVAC Special Meeting.

The approval of each of the Business Combination Proposal, the NYSE Issuance Proposal, and the Incentive Plan Proposal requires the affirmative vote of majority of the votes cast by holders of the outstanding shares of FVAC Common Stock represented virtually or by proxy at the FVAC Special Meeting and entitled to vote thereon. If a valid quorum is established, a stockholder’s failure to vote by proxy or virtually at the FVAC 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 Insiders have agreed to vote their Founder Shares and any public shares they may hold in favor of the Business Combination. Currently, the Insiders own approximately 20% of the issued and outstanding FVAC 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 the outstanding shares of FVAC Common Stock entitled to vote thereon at the FVAC Special Meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or virtually at the FVAC Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposals, will each have the same effect as a vote “AGAINST” such Charter Proposals.

Approval of the Director Election Proposal requires the affirmative vote (virtually or by proxy) of holders of a plurality of the votes cast by holders of outstanding shares of FVAC Common Stock entitled to vote thereon at the FVAC Special Meeting, voting as a single class. Failure to vote by proxy or to vote virtually at the FVAC Special Meeting or an abstention from voting will have no effect on the outcome of the vote on the Director Election Proposal. Proxies will have full discretion to cast votes for other persons in the event that any nominee is unable to serve. Failure to vote by proxy or to vote virtually at the FVAC Special Meeting, abstentions and broker non-votes will have no effect on the vote for the Director Election Proposal.

The transactions contemplated by the Merger Agreement will be consummated only if the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal and the Director Election Proposal are approved at the FVAC Special Meeting. It is important for you to note that in the event that the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal and the Director Election Proposals do not receive the requisite vote for approval, we will not consummate the Business Combination.

Recommendation of the FVAC Board of Directors; Reasons for the Approval of the Business Combination (page 98)

The FVAC Board has unanimously determined that the Business Combination, on the terms and conditions set forth in the Merger Agreement, is advisable and in the best interests of FVAC and its stockholders and has directed that the proposals set forth in this proxy statement/consent solicitation/prospectus be submitted to its stockholders for approval at the FVAC Special Meeting on the date and at the time and place set forth in this proxy statement/consent solicitation/prospectus.

After careful consideration, the FVAC Board unanimously recommends voting “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the NYSE Share Proposal, “FOR” the Director Election Proposal, and “FOR” the Incentive Plan Proposal. See “The Business Combination—Recommendation of the FVAC Board of Directors and Reasons for the Business Combination” beginning on page 98 of this proxy statement/consent solicitation/prospectus.

 

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Recommendation of the MPMO Board and Reasons for the Business Combination (page 101)

After consideration, the MPMO Board adopted resolutions determining that the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement are advisable, fair to, and in the best interests of MPMO and its unitholders, and adopting and approving the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement. The MPMO Board recommends that the holders of MPMO common units adopt and approve the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement by executing and delivering the written consent furnished with this proxy statement/consent solicitation/prospectus.

For a description of various factors considered by the MPMO Board in reaching its decision to adopt and approve the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement, see the section titled “The Business Combination—Recommendation of the MPMO Board and Reasons for the Business Combination” beginning on page 101 of this proxy statement/consent solicitation/prospectus.

Recommendation of the SNR Board and Reasons for the Business Combination (page 104)

After consideration, the SNR Board adopted resolutions, determining that the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement (including the Pre-Closing Reorganization as it applies to SNR) are advisable, fair to, and in the best interests of SNR and its unitholders, and adopting and approving the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement (including the Pre-Closing Reorganization as it applies to SNR). The SNR Board recommends that the holders of SNR units adopt and approve the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement (including the Pre-Closing Reorganization as it applies to SNR) by executing and delivering the written consent furnished with this proxy statement/consent solicitation/prospectus.

For a description of various factors considered by the SNR Board in reaching its decision to adopt the merger agreement and approve the Business Combination and the other transactions and ancillary agreements contemplated by the merger agreement, see the section titled “The Business Combination—Recommendation of the SNR Board and Reasons for the Business Combination” beginning on page 104 of this proxy statement/consent solicitation/prospectus.

Risk Factors (page 44)

You should consider all the information contained in this proxy statement/consent solicitation/prospectus in deciding how to vote for the proposals presented in the proxy statement/consent solicitation/prospectus. In particular, you should consider the factors described under “Risk Factors” beginning on page 44 of this proxy statement/consent solicitation/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 the Companies and FVAC to complete the Business Combination, and (ii) the business, cash flows, financial condition and results of operations of MPMC following consummation of the Business Combination.

 

30


Opinion of SNR’s Financial Advisor (page 107)

In connection with the adoption of the merger agreement, the SNR Board considered the opinion of Murray, Devine & Co., Inc. (“Murray Devine”), a financial advisory firm. Murray Devine has given a fairness opinion to the SNR Board that, as of the date of the opinion, the consideration payable to the SNR unitholders in connection with the Business Combination was fair, from a financial point of view, to holders of SNR units. The opinion is based on and subject to the procedures, matters and limitations described in the opinion and other matters that Murray Devine considered relevant.

The full text of the written opinion of Murray Devine, dated July 14, 2020, which sets forth the assumptions made, procedures followed, factors considered and limitations upon the review undertaken by Murray Devine in rendering its opinion, is attached to this proxy statement/consent solicitation/prospectus as Annex L and is incorporated by reference herein. Murray Devine’s advisory services and opinion were provided solely for the information and assistance of the SNR Board in connection with its consideration of the Business Combination and does not constitute a recommendation as to any action the SNR Board should take or how any FVAC stockholders, MPMO unitholders or SNR unitholders should vote with respect to the Business Combination or any other matter.

Murray Devine was retained by SNR to act as its financial advisor in connection with the Business Combination and to provide financial advisory services and to render its fairness opinion to the SNR Board in connection therewith. For further information, see “The Business Combination—Opinion of SNR’s Financial Advisor” beginning on page 107 of this proxy statement/consent solicitation/prospectus.

Companies’ Solicitation of Written Consents (page 166)

Companies’ Unitholders Entitled to Consent

The MPMO and SNR unitholders holding common units are being asked to consent to adopt and approve in all respects the Merger Agreement and the transactions contemplated thereby, including the adoption and approval of the Pre-Closing Reorganization (the “Companies’ Merger Proposal”).

Only MPMO or SNR unitholders holding common units as of the date of first mailing of this proxy statement/consent solicitation/prospectus are entitled to sign and deliver written consents with respect to the Companies’ Merger Proposal. As of the date of first mailing of this proxy statement/consent solicitation/prospectus there were 1,000 MPMO common units outstanding and entitled to sign and deliver written consents with respect to the Companies’ Merger Proposal. As of the date of first mailing of this proxy statement/consent solicitation/prospectus there were 6,850,677.97 SNR common units outstanding and entitled to sign and deliver written consents with respect to the Companies’ Merger Proposal. You are urged to return a signed written consent as soon as possible.

Consents; Required Consents

Written consents from (i) members of MPMO representing at least a majority of common units of MPMO, and (ii) members of SNR representing at least a majority of common units of SNR, in each case, are required in order to adopt and approve, with respect to MPMO and SNR, respectively, the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement, including the Pre-Closing Reorganization, in accordance with applicable law and the respective limited liability company agreements of each of the Companies.

Following entry by the parties into the Merger Agreement, FVAC entered into (i) the MPMO Support Agreement with each of the MPMO unitholders party thereto, and (ii) the SNR Support Agreement with each of

 

31


the SNR unitholders party thereto, as applicable. Pursuant to each Support Agreement, the MPMO or SNR, as applicable, unitholders party thereto agreed to vote, consent or approve all common units of MPMO or SNR, as applicable, held by such unitholder in favor of adopting and approving the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement, including the Pre-Closing Reorganization. The common units of MPMO that are owned by the MPMO unitholders party to the MPMO Support Agreement and subject to the MPMO Support Agreement represent approximately 98% of the outstanding common units of MPMO. The common units of SNR that are owned by the SNR unitholders party to the SNR Support Agreement and subject to the SNR Support Agreement represent approximately 89% of the outstanding common units of SNR. The written consents of the MPMO and SNR unitholders party to the Support Agreements with respect to the common units of MPMO or SNR, as applicable, that are owned by such unitholders will be, when delivered, sufficient to adopt the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement, including the Pre-Closing Reorganization, in accordance with applicable law and the respective limited liability company agreements of the Companies.

Submission of Consents

You may consent to the Companies’ Merger Proposal with respect to your common units of MPMO or SNR, as applicable, by signing the written consent enclosed with this proxy statement/consent solicitation/prospectus and returning it to MPMO or SNR, as applicable.

If you hold common units of MPMO and you wish to give your written consent, you must sign the enclosed written consent, and promptly return it to MPMO. Once you have signed the written consent, you may deliver it to MPMO by emailing a .pdf copy to sbangalore@mpmaterials.com or by mailing it to 6720 Via Austi Parkway, Suite 450, Las Vegas, NV 89119, Attention: Sheila Bangalore, Chief Strategy Officer and General Counsel.

If you hold common units of SNR, and you wish to give your written consent, you must sign the enclosed written consent, and promptly return it to Continental Stock Transfer & Trust Company. Once you have signed the written consent, you may deliver it to Continental Stock Transfer & Trust Company, by mailing it to 1 State St—30th Floor, New York, NY 10004, Attention: Corporate Actions—SNR, or by uploading the notice to Continental Stock Transfer & Trust Company via the following secure URL address: “https://cstt.citrixdata.com/r_r7b41c4546534ccaa”. In order to avoid delays, please label any uploaded notice with your name and date. If you have questions concerning the mailing or uploading of the notice, please contact Continental Stock Transfer & Trust Company at reorg+SNR@continentalstock.com.

Each of the MPMO Board and the SNR Board requests that you return a signed written consent as soon as possible. Once a sufficient number of consents to adopt the Merger Agreement has been received, the consent solicitation will conclude. The written consents of the MPMO and SNR unitholders party to the Support Agreements with respect to the common units of MPMO or SNR, as applicable, that are owned by such unitholders will be, when delivered, sufficient to adopt the Merger Agreement, the Business Combination and the other transactions and ancillary agreements contemplated by the Merger Agreement, including the Pre-Closing Reorganization, in accordance with applicable law and the respective limited liability company agreements of the Companies.

Executing Consents; Revocation of Consents

You may execute a written consent only to approve of the Companies’ Merger Proposal. A written consent to approve the Companies’ Merger Proposal is the equivalent to a vote for such proposal.

If you do not return your written consent, it will have the same effect as a vote “AGAINST” the Companies’ Merger Proposal. If you are a holder of common units of MPMO or SNR, as applicable, and you return a signed written consent, you will have consented to the Companies’ Merger Proposal.

 

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If you are a holder of common units of MPMO or SNR, as applicable, you may change or revoke your written consent (subject to any contractual obligations you may otherwise have) at any time before the consents of a sufficient number of common units of MPMO or SNR, as applicable, to approve the Companies’ Merger Proposal have been delivered to such Company. If you wish to change or revoke your consent before that time, you may do so by sending a notice of revocation (i) in the case of MPMO, by emailing a .pdf copy to sbangalore@mpmaterials.com or by mailing it to 6720 Via Austi Parkway, Suite 450, Las Vegas, NV 89119, Attention: Sheila Bangalore, Chief Strategy Officer and General Counsel, or (ii) in the case of SNR, by mailing it to Continental Stock Transfer & Trust Company at 1 State St—30th Floor, New York, NY 10004, Attention: Corporate Actions—SNR, or by uploading the notice to Continental Stock Transfer & Trust Company via the following secure URL address: “https://cstt.citrixdata.com/r_r7b41c4546534ccaa”. In order to avoid delays, please label any uploaded notice with your name and date. If you have questions concerning the mailing or uploading of the notice, please contact Continental Stock Transfer & Trust Company at reorg+SNR@continentalstock.com.

Solicitation of Consents; Expenses

The expense of preparing, printing and mailing these consent solicitation materials is being borne by the Companies. Officers and employees of the respective Companies may solicit the respective consents by telephone and personally, in addition to solicitation by mail. These persons will receive their regular salaries but no special compensation for soliciting consents.

Interests of Directors and Officers of the Companies in the Business Combination (page 112)

When you consider the recommendations of the MPMO Board and the SNR Board in favor of approval of the Companies’ Merger Proposal, you should keep in mind that the directors and officers of the Companies have interests in the Business Combination that are different from, or in addition to, those of the Companies’ respective unitholders generally. These interests include, among other things, the fact that certain of the Companies’ directors and officers will become directors and officers of MPMC upon the consummation of the Business Combination.

The existence of financial and personal interests of one or more of the Companies’ 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 such Company. Please see the sections entitled “Risk Factors” and “The Business Combination – Interests of Certain Persons in the Business Combination” of this proxy statement/consent solicitation/prospectus for a further discussion of this and other risks.

Summary of the Transactions

Set forth below is a summary of transactions that are contemplated to occur in connection with the Business Combination.

Pre-Closing Restructuring of the Companies

In accordance with the Merger Agreement, the Companies will, prior to the consummation of the Business Combination, complete a reorganization of the Companies, pursuant to which, among other things, the actions described below will be undertaken.

 

  1.

The Shenghe Warrant will be exercised in full, and MPMO will issue to Shenghe Resources (Singapore) International Trading Pte. Ltd. (“Shenghe Resources (Singapore)”) (Singapore) 89.88 MPMO preferred units.

 

  2.

MPMO or an affiliate of an MPMO unitholder will form MPMO HoldCo.

 

  3.

MPMO HoldCo will form MPMO Transition Sub.

 

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  4.

SNR will form SNR HoldCo, and, effective the same day, SNR HoldCo will make an initial entity classification election to be classified as a corporation for U.S. federal income tax purposes.

 

  5.

SNR HoldCo will form SNR Transition Sub.

 

  6.

MPMO Transition Sub, MPMO HoldCo and MPMO will enter into an Agreement and Plan of Merger, pursuant to which MPMO Transition Sub will merge with and into MPMO, with MPMO Transition Sub ceasing to exist and MPMO continuing as the surviving legal entity under applicable law. Pursuant to the MPMO Transition Merger, (i) each MPMO common unit (or fraction thereof) issued and outstanding immediately prior to the effective time of the MPMO Transition Merger will be cancelled in exchange for the issuance by MPMO HoldCo of one share of MPMO HoldCo common stock (or fraction thereof), (ii) each MPMO preferred unit (or fraction thereof) issued and outstanding immediately prior to the effective time of the MPMO Transition Merger will be cancelled in exchange for the issuance by MPMO HoldCo of one share of MPMO HoldCo preferred stock (or fraction thereof); (iii) each share of MPMO HoldCo common stock issued and outstanding immediately prior to the effective time of the MPMO Transition Merger will be cancelled and will cease to be outstanding; and (iv) each unit of membership interests in MPMO Transition Sub issued and outstanding immediately prior to the effective time of the MPMO Transition Merger will be cancelled in exchange for the issuance by MPMO of not less than one MPMO preferred unit and not less than one MPMO common unit.

 

  7.

At least one day after the date of the MPMO Transition Merger, MPMO will elect to be disregarded as an entity separate from MPMO HoldCo for U.S. federal income tax purposes.

 

  8.

SNR Transition Sub, SNR HoldCo and SNR will enter an Agreement and Plan of Merger, pursuant to which SNR Transition Sub will merge with and into SNR, with SNR Transition Sub ceasing to exist and SNR continuing as the surviving legal entity under applicable state law. Pursuant to the SNR Transition Merger, (i) each SNR common unit (or fraction thereof) issued and outstanding immediately prior to the effective time of the SNR Transition Merger will be cancelled in exchange for the issuance by SNR HoldCo of one SNR HoldCo common unit (or fraction thereof); (ii) each unit of membership interests SNR HoldCo issued and outstanding immediately prior to the effective time of the SNR Transition Merger will be cancelled and will cease to be outstanding; and (iii) each unit of membership interests in SNR Transition Sub issued and outstanding immediately prior to the effective time of the SNR Transition Merger will be cancelled in exchange for the issuance by SNR of not less than one SNR common unit.

 

  9.

At least one day after the date of the SNR Transition Merger, SNR will elect to be disregarded as an entity separate from SNR HoldCo for U.S. federal income tax purposes.

We refer to the foregoing transactions as the “Pre-Closing Reorganization”.

SNR Distribution

Under the Merger Agreement, SNR is permitted to declare, set aside or pay any cash distributions, or repurchase or redeem its membership interests for cash, in each case, at any time prior to the Closing.

Conversion of Equity Interests

Each share of MPMO HoldCo preferred stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

 

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Each share of MPMO HoldCo common stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

Each share of SNR HoldCo common stock issued and outstanding immediately prior to the effective time of the initial SNR merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 20,000,000 divided by (B) the number of shares of SNR HoldCo common stock outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

No fractional shares will be issued in connection with the Business Combination. In lieu thereof, FVAC shall pay or cause to be paid cash to each holder who otherwise would have been entitled to receive a fractional share.

Upon the closing of the Business Combination, all Founder Shares outstanding at the time of the Business Combination will automatically convert, in accordance with FVAC’s existing charter, to FVAC Class A common stock, and a percentage of such shares will be subject to the vesting and forfeiture provisions set forth in the Parent Sponsor Letter Agreement. For more information, see “Related Agreements—Parent Sponsor Letter Agreement”.

We refer these transactions, together with the Mergers and the other transactions and ancillary agreements contemplated by the Merger Agreement as the “Business Combination”.

Parent Sponsor Warrant Exchange Agreement

Immediately prior to the consummation of the Business Combination, the Sponsor will exchange all 5,933,333 of its Private Placement Warrants for an aggregate of 890,000 Founder Shares that, upon the consummation of the Business Combination, will be converted into FVAC Class A common stock (which will not be subject to vesting or forfeiture restrictions under the Amended and Restated Parent Sponsor Letter Agreement). For more information, see “Related Agreements—Parent Sponsor Warrant Exchange Agreement”.

PIPE Investment

Immediately prior to the closing of the Business Combination, the PIPE Investors, including the Sponsor, will purchase 20,000,000 shares of FVAC Class A common stock in a in a private placement at a price of $10.00 per share. For more information, see “Related Agreements—Subscription Agreements”.

Summary Historical Financial Data for FVAC (page 146)

The following tables summarize financial results achieved by FVAC for the periods and at the dates indicated to assist you in your analysis of the financial aspects of the Business Combination. FVAC’s statement of operations data for the period from January 24, 2020 (date of inception) through June 30, 2020 and balance sheet data as of June 30, 2020 is derived from FVAC’s audited financial statements included elsewhere in this proxy statement/consent solicitation/prospectus. This information is only a summary and should be read in conjunction with “FVAC’s Management’s Discussion and Analysis of Financial Condition and Results of

 

35


Operations” and FVAC’s financial statements and related notes contained elsewhere herein. You should not assume the results of operations for past periods indicate results for any future period.

 

     For the period from
January 24, 2020
(inception) through
June 30, 2020
 

Statement of Operations Data:

  

General and administrative expenses

   $ 271,902  

Franchise tax expense

     86,814  
  

 

 

 

Loss from operations

     (358,716

Interest income

     36,875  
  

 

 

 

Net loss

   $ (321,841
  

 

 

 

Weighted average shares outstanding—Class A common stock

     34,500,000  
  

 

 

 

Basic and diluted net loss per share, Class A

   $ 0.00  
  

 

 

 

Weighted average shares outstanding—Class F common stock

     8,625,000  
  

 

 

 

Basic and diluted net loss per share, Class F

   $ (0.04
  

 

 

 

 

     As of
June 30, 2020
 

Balance Sheet Data:

  

Total assets

   $ 346,917,733  

Total liabilities

   $ 13,146,642  

Class A common stock, $0.0001 par value; 32,877,109 shares subject to possible redemption

   $ 328,771,090  

Total stockholders’ equity

   $ 5,000,001  

Total liabilities and stockholders’ equity

   $ 346,917,733  

Summary Historical Financial Data for MPMO (page 147)

The summary historical consolidated financial information and other data for MPMO presented below for the years ended December 31, 2019 and 2018, and the summary consolidated balance sheet and other data as of December 31, 2019 and 2018 have been derived from MPMO’s audited financial statements included in this proxy statement/consent solicitation/prospectus.

The summary historical consolidated financial information presented below as of June 30, 2020 and for each of the six month periods ended June 30, 2020 and June, 2019 have been derived from the MPMO’s unaudited condensed financial statements included in this proxy statement/consent solicitation/prospectus. The unaudited financial data presented have been prepared on a basis consistent with the MPMO’s audited consolidated financial statements. In the opinion of MPMO’s management, such unaudited financial data reflect all adjustments, consisting only of normal and recurring adjustments necessary for a fair presentation of the results for those periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or any future period.

The summary information in the following tables should be read in conjunction with “Selected Historical Financial Information of MPMO”, “MPMO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and MPMO’s historical financial statements and related notes thereto included

 

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elsewhere in this proxy statement/consent solicitation/prospectus. Information below is in thousands of dollars (except production and sales volumes, Realized Price per REO MT and Cost of Production per REO MT).

 

     Six Months Ended
June 30,
     Year Ended December 31,  
     2020      2019      2019      2018  
                   (in thousands)         

Statements of Operations Data:

           

Product Sales (including sales to related parties)

   $ 51,110      $ 25,447      $ 73,411      $ 67,418  

Operating costs and expenses (excluding one-time settlement charge)

     (43,093      (36,589      (81,031      (76,302

One time settlement charge

     (66,615      —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Operating loss

     (58,598      (11,142      (7,620      (8,884

Other income, net

     237        2,385        4,278        839  

Interest expense

     (1,869      (1,846      (3,412      (5,420
  

 

 

    

 

 

    

 

 

    

 

 

 

Loss before income taxes

     (60,230      (10,603      (6,754      (13,465

Income tax expense

     (336      (1      (1      (1
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss

   $ (60,566    $ (10,604    $ (6,755    $ (13,466
  

 

 

    

 

 

    

 

 

    

 

 

 

 

     As of June 30,      As of December 31,  
     2020      2019      2018  

Balance Sheet Data:

        

Cash and cash equivalents

   $ 38,551      $ 2,757      $ 2,832  

Total assets

   $ 147,604      $ 101,794      $ 96,270  

Total debt

   $ 107,199      $ 18,078      $ 20,897  

Total stockholders’ (deficit) equity

   $ (24,742    $ (18,022    $ (11,267

 

     Six months Ended June 30,      Year Ended December 31,  
     2020      2019      2019      2018  

Statement of Cash Flows Data:

           

Net cash provided by (used in) operating activities

   $ 2,242      $ (11,230    $ (437    $ 20,196  

Net cash provided by (used in) investing activities

   $ (4,828    $ 2,827      $ 5,624      $ (5,880

Net cash provided by (used in) financing activities

   $ 38,728      $ 7,444      $ (4,096    $ (30,740

 

     Six months Ended June 30,      Year Ended December 31,  
     2020      2019      2019      2018  

REO Production Volume (MTs)

     18,969        9,530        27,620        13,914  

REO Sales Volume (MTs)

     18,618        8,408        26,821        13,378  

Realized Price per REO MT

   $ 2,848      $ 2,998      $ 2,793      $ 3,382  

Cost of Production per REO MT

   $ 1,362      $ 2,698      $ 1,980      $ 2,822  

Summary Historical Financial Data for SNR (page 149)

The summary historical consolidated financial information and other data for SNR presented below for the years ended December 31, 2019 and 2018, and the summary consolidated balance sheet and other data as of December 31, 2019 and 2018 have been derived from SNR’s audited consolidated financial statements included in this proxy statement/consent solicitation/prospectus.

The summary historical consolidated financial information presented below as of June 30, 2020 and for the six month periods ended June 30, 2020 and 2019 have been derived from SNR’s unaudited condensed

 

37


consolidated financial statements included in this proxy statement/consent solicitation/prospectus. The unaudited financial data presented have been prepared on a basis consistent with SNR’s audited consolidated financial statements. In the opinion of SNR’s management, such unaudited financial data reflect all adjustments, consisting only of normal and recurring adjustments necessary for a fair presentation of the results for those periods. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year or any future period.

The summary information in the following tables should be read in conjunction with “Selected Historical Financial Information of SNR”, “SNR’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” and SNR’s consolidated financial statements and related notes thereto included elsewhere in this proxy statement/consent solicitation/prospectus. Financial information below is in whole dollars unless otherwise stated.

 

     Six Months Ended June 30,      Year Ended December 31,  
     2020      2019      2019      2018  

Statements of Operations Data:

           

Royalty revenue from related party

   $ 1,409,735      $ 649,498      $ 2,019,835      $ 1,041,064  

General and administrative expenses, total expenses

     191,422        345,602        590,059        650,659  

Operating income

     1,218,313        303,896        1,429,776        390,405  

Interest income

     12,205        38,294        73,100        20,648  

Income before income taxes

     1,230,518        342,190        1,502,876        411,053  

Income tax (expense) benefit

     (310,397      —          368,259        —    

Net income

   $ 920,121      $ 342,190      $ 1,871,135      $ 411,053  

 

     As of June 30,      As of December 31,  
     2020      2019      2018  

Balance Sheet Data:

        

Cash and cash equivalents

   $ 5,786,289      $ 4,232,326      $ 3,766,629  

Total assets

   $ 7,040,220      $ 6,271,927      $ 4,434,924  

Total liabilities

   $ 178,640      $ 181,146      $ 215,278  

Total members’ equity

   $ 6,861,580      $ 6,090,781      $ 4,219,646  

 

     Six months Ended June 30,      Year Ended December 31,  
     2020      2019      2019      2018  

Statement of Cash Flows Data:

           

Net cash provided by (used in) operating activities

   $ 1,703,285      $ 368,806      $ 465,697      $ (80,191

Net cash used in financing activities

   $ (149,322    $ —        $ —        $ —    

Summary Unaudited Pro Forma Condensed Combined Financial Information (page 150)

The following summary unaudited pro forma condensed combined financial information (the “Summary Pro Forma Information”) gives effect to the transactions contemplated by the Merger Agreement. The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, FVAC will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be reflected as the equivalent of MPMO issuing stock for the net assets of FVAC, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Business Combination will be those of MPMO. The SNR Mineral Rights Acquisition will be treated as an asset acquisition as it does not meet the definition of a business under ASC 805, and is accounted

 

38


for in accordance with the “Acquisition of Assets Rather Than a Business” subsections of ASC 805-50 by using a cost accumulation model. The summary unaudited pro forma condensed combined balance sheet data as of June 30, 2020 gives effect to the Business Combination as if it had occurred on June 30, 2020. The summary unaudited pro forma condensed combined statements of operations data for the six months ended June 30, 2020 and year ended December 31, 2019 give effect to the Business Combination as if it had occurred on January 1, 2019.

The Summary Pro Forma Information has been derived from, and should be read in conjunction with, the more detailed unaudited pro forma condensed combined financial information of the post-combination company appearing elsewhere in this proxy statement/consent solicitation/prospectus and the accompanying notes to the unaudited pro forma condensed combined financial information. See “Selected Historical Financial Information of FVAC”, “Selected Historical Financial Information of MPMO” and “Selected Historical Financial Information of SNR”. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical financial statements and related notes of FVAC, MPMO, and SNR for the applicable periods included elsewhere in this proxy statement/consent solicitation/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information.” The Summary Pro Forma Information has been presented for informational purposes only and is not necessarily indicative of what the post-combination company’s financial position or results of operations actually would have been had the Business Combination been completed as of the dates indicated. In addition, the Summary Pro Forma Information does not purport to project the future financial position or operating results of the post-combination company.

The unaudited pro forma condensed combined financial information has been prepared using the assumptions below with respect to the potential redemption by FVAC’s public stockholders of shares of FVAC Class A common stock for cash equal to their pro rata share of the aggregate amount on deposit (as of two (2) business days prior to the closing of the Business Combination) in the Trust Account:

 

   

Assuming No Redemptions: This presentation assumes that no public stockholders of FVAC exercise redemption rights with respect to their public shares for a pro rata share of the funds in the Trust Account.

 

39


   

Assuming Maximum Redemptions: This presentation assumes that stockholders holding 34.5 million of FVAC’s public shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. This scenario gives effect to public share redemptions for aggregate redemption payments of $345.0 million using a per share redemption price that was calculated as $345,036,875 in the Trust Account less $36,875 in interest income used to pay a portion of the outstanding franchise tax payable divided by 34,500,000 FVAC public shares, in each case, as of June 30, 2020. Additionally, this scenario gives effect to the surrender of 5,140,152 Founder Shares pursuant to the Parent Sponsor Letter Agreement.

 

     Pro Forma
Combined
(Assuming No
Redemption)
     Pro Forma
Combined
(Assuming
Maximum
Redemption)
 
     (in thousands, except share and per share data)  

Summary Unaudited Pro Forma Condensed Combined

     

Statement of Operations Data

     

Six Months Ended June 30, 2020

     

Revenue

   $ 51,110      $ 51,110  

Basic and diluted net loss per share, Class A

   $ (0.45    $ (0.59

Weighted average Class A shares outstanding—basic and diluted

     147,331,543        112,831,543  

Summary Unaudited Pro Forma Condensed Combined

     

Statement of Operations Data

     

Year Ended December 31, 2019

     

Revenue

   $ 73,411      $ 73,411  

Basic and diluted net loss per share, Class A

   $ (0.12    $ (0.16

Weighted average Class A shares outstanding—basic and diluted

     147,331,543        112,831,543  

Summary Unaudited Pro Forma Condensed Combined

     

Balance Sheet Data as of June 30, 2020

     

Total assets

   $ 999,921      $ 654,921  

Total liabilities

   $ 251,381      $ 251,381  

Total stockholders’ equity

   $ 748,540      $ 403,540  

Unaudited Historical Comparative and Pro Forma Combined Per Share Data of FVAC and the Companies

The following table sets forth selected historical comparative share information for FVAC, MPMO and SNR and unaudited pro forma condensed combined per share information of the combined company after giving effect to the Business Combination, assuming two redemption scenarios as follows:

 

   

Assuming No Redemptions: This presentation assumes that no public stockholders of FVAC exercise redemption rights with respect to their public shares for a pro rata share of the funds in the Trust Account.

 

   

Assuming Maximum Redemptions: This presentation assumes that stockholders holding 34.5 million of FVAC’s public shares will exercise their redemption rights for their pro rata share (approximately $10.00 per share) of the funds in the Trust Account. This scenario gives effect to public share redemptions for aggregate redemption payments of $345.0 million using a per share redemption price that was calculated as $345,036,875 in the Trust Account less $36,875 in interest income used to pay a portion of the outstanding franchise tax payable divided by 34,500,000 FVAC public shares, in each case, as of June 30, 2020. Additionally, this scenario gives effect to the surrender of 5,140,152 Founder Shares pursuant to the Parent Sponsor Letter Agreement.

 

40


The pro forma book value information reflects the Business Combination as if it had occurred on June 30, 2020. The weighted average shares outstanding and net loss per share information give pro forma effect to the Business Combination as if it had occurred on January 1, 2019.

This information is only a summary and should be read together with the selected historical financial information included elsewhere in this proxy statement/consent solicitation/prospectus, and the historical financial statements of FVAC, MPMO and SNR and related notes that are included elsewhere in this proxy statement/consent solicitation/prospectus. See “Selected Historical Financial Information of FVAC”, “Selected Historical Financial Information of MPMO” and “Selected Historical Financial Information of SNR”. The unaudited pro forma combined per share information of FVAC, MPMO and SNR is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/consent solicitation/prospectus. See “Unaudited Pro Forma Condensed Combined Financial Information.

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of FVAC, MPMO and SNR would have been had the companies been combined during the periods presented.

 

                        Pro Forma Combined  
     FVAC
(Historical)
    MPMO
(Historical)
    SNR
(Historical)
     (Assuming
No
Redemption)
    (Assuming
Maxi mum
Redemption)
 
                 (in actuals)               

As of and for the six months ended June 30, 2020

           

Book Value per share (1)

   $ 0.12     $ (80,863.00   $ 0.99      $ 5.08     $ 3.58  

Weighted average shares outstanding of FVAC Class A common stock – basic and diluted

     34,500,000            147,331,543       112,831,543  

Weighted average shares outstanding of FVAC Class F common stock—basic and diluted

     8,625,000            —         —    

Weighted average common units outstanding of MPMO and SNR – basic and diluted

       1,000       6,914,555       

Net income (loss) per share of FVAC Class A common stock – basic and diluted

   $ —            $ (0.45   $ (0.59

Net income (loss) per share of FVAC Class F common stock – basic and diluted

   $ (0.04        $ —       $ —    

Net income (loss) per common unit of MPMO and SNR – basic and diluted

     $ (60,566.00   $ 0.13       

 

41


                        Pro Forma Combined  
     FVAC
(Historical)
    MPMO
(Historical)
    SNR
(Historical)
     (Assuming
No
Redemption)
    (Assuming
Maximum
Redemption)
 
                 (in actuals)               

As of and for the year ended December 31, 2019

           

Book Value per share (1)

     N/A (2)    $ (20,297.00   $ 0.87        N/A (3)      N/A (3) 

Weighted average shares outstanding of FVAC Class A common stock—basic and diluted

     N/A (2)           147,331,543       112,831,543  

Weighted average common units outstanding of MPMO and SNR—basic and diluted

       1,000       7,000,000       

Net loss per share of FVAC Class A common stock —basic and diluted

     N/A (2)         $ (0.12   $ (0.16

Net income (loss) per common unit of MPMO and SNR—basic and diluted

     $ (6,755.00   $ 0.27       

 

(1)

Book value per share = (Total equity excluding preferred shares)/shares outstanding.

(2)

Not applicable as FVAC was incorporated on January 24, 2020.

(3)

Pro forma balance sheet for year ended December 31, 2019 not required and as such, no such calculation included in this table.

 

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MARKET PRICE AND DIVIDEND INFORMATION

FVAC

FVAC’s units, FVAC Class A common stock and public warrants are currently listed on the NYSE under the symbols “FVAC.U”, “FVAC” and “FVAC WS”, respectively.

The closing price of the FVAC units, FVAC Class A common stock and public warrants on July 14, 2020, the last trading day before announcement of the execution of the Merger Agreement, was $10.41, $10.00 and $1.45, respectively. As of October 12, 2020, the record date for the FVAC Special Meeting, the most recent closing price for FVAC units, FVAC Class A common stock and public warrants was $15.71, $14.32 and $3.64, respectively.

Holders of the FVAC units, FVAC Class A common stock and public warrants should obtain current market quotations for their securities. The market price of FVAC’s securities could vary at any time before the Business Combination.

Holders

As of October 12, 2020, there was one (1) holder of record of FVAC’s units, one (1) holder of record of FVAC Class A common stock, three (3) holders of record of FVAC Class F common stock, one (1) holder of record of Private Placement Warrants, and one (1) holder of FVAC public warrants. The number of holders of record does not include a substantially greater number of “street name” holders or beneficial holders whose FVAC units, FVAC Class A common stock and FVAC public warrants are held of record by banks, brokers and other financial institutions.

Dividend Policy

FVAC has not paid any cash dividends on its FVAC Common Stock to date and does not intend to pay cash dividends prior to the completion of the Business Combination. The payment of cash dividends in the future will be dependent upon MPMC’s revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of the Business Combination. The payment of any cash dividends subsequent to the merger will be within the discretion of MPMC’s board of directors at such time. MPMC’s ability to declare dividends may also be limited by restrictive covenants pursuant to any debt financing.

The Companies

Historical market price information for MPMO’s units is not provided because there is no public market for MPMO’s units. See “MPMO’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 214 of this proxy statement/consent solicitation/prospectus.

Historical market price information for SNR’s units is not provided because there is no public market for SNR’s units. See “SNR’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 238 of this proxy statement/consent solicitation/prospectus.

 

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RISK FACTORS

You should carefully review and consider the following risk factors and the other information contained in this proxy statement/consent solicitation/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 FVAC Special Meeting or the consent solicitation of the Companies. The following risk factors apply to the businesses of the Companies, the operations of the business by the Companies and will also apply to the business and operations of the Companies 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 MPMC. You should carefully consider the following risk factors in addition to the other information included in this proxy statement/consent solicitation/prospectus, including matters addressed in the section entitled “Cautionary Note Regarding Forward-Looking Statements.” MPMC may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair MPMC’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 Relating to the Companies’ Business and Industry

Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “the Company” or “our company” refer to the Companies as they currently exist prior to consummation of the Business Combination, and to MPMC from and after the consummation of the Business Combination.

The production of rare earth products is a capital-intensive business and the completion of our Stage II optimization project at the Mountain Pass facility will require the commitment of substantial resources. Unanticipated costs or delays associated with our ongoing Stage II optimization project could have a material adverse effect on our financial condition or results of operations.

The completion of our Stage II optimization project at the Mountain Pass facility will require the commitment of substantial resources and capital expenditures. We expect to incur approximately $170 million in capital costs to complete the project and reach anticipated production rates for the separation of REOs by the end of 2022. Our estimated expenses may increase as consultants, personnel and equipment associated with our efforts are added. The progress of our Stage II optimization project, the amounts and timing of expenditures and the success of this project will depend in part on the following:

 

   

the operational resumption of a portion of the existing process, plant and equipment, certain of which is currently in a cold-idle state, and the further enhancement and development of such existing process, plant and equipment;

 

   

our ability to timely procure new equipment or repair existing equipment, certain of which may involve long lead-times;

 

   

maintaining, and procuring, as required, applicable federal, state and local permits;

 

   

the results of consultants’ analysis and recommendations;

 

   

negotiating contracts for equipment, earthwork, construction, equipment installation, labor and completing infrastructure and construction work;

 

   

impact of planned and unplanned shut-downs and delays in our production;

 

   

impact of stoppages or delays on construction projects;

 

   

disputes with contractors or other third parties;

 

   

negotiating sales and offtake contracts for our planned production;

 

44


   

the execution of any joint venture agreements or similar arrangements with strategic partners;

 

   

the impact of COVID-19 or similar pandemics on our business, our strategic partners’ or suppliers’ businesses, logistics or the global economy; and

 

   

other factors, many of which are beyond our control.

Most of these activities require significant lead times and must be advanced concurrently. Unanticipated costs or delays associated with our Stage II optimization project could have a material adverse effect on our financial condition or results of operations and could require us to seek additional capital, which may not be available on commercially acceptable terms or at all.

The actual amount of capital required for the Stage II optimization project at the Mountain Pass facility may vary materially from our current estimates, in which case we may need to raise additional funds, which could delay completion and have a material adverse effect on our business and financial condition.

The anticipated funding required to complete the Stage II optimization project at the Mountain Pass facility is based on certain estimates and assumptions we have made about the additional equipment, labor, permits and other factors required to complete the project. If any of these estimates or assumptions change, the actual timing and amount of capital required to complete the Stage II optimization project may vary materially from what we anticipate. Additional funds may be required in the event of significant departures from our current plans, unforeseen delays, cost overruns, engineering design changes or other unanticipated events or expenses. There can be no assurance that additional financing will be available to us, or, if available, that it can be obtained on a timely basis and on commercially acceptable terms.

Our continued growth depends on our ability to complete the Stage II optimization project at the Mountain Pass facility, which is our only rare earth mining and processing facility.

Our only rare earth mining and processing facility at this time is the Mountain Pass facility. Our continued growth is based on successfully completing the Stage II optimization project and reaching anticipated production rates for the separation of REOs in accordance with our expected timeframe. The deterioration or destruction of any part of the Mountain Pass facility, or a delay in the procurement of any necessary equipment, may significantly hinder our ability to reach or maintain anticipated production rates within the expected time frame or at all. If we are unsuccessful in reaching and maintaining expected production rates for REOs at the Mountain Pass facility, within expected time frames or at all, we may not be able to build a sustainable or profitable business as currently expected or at all.

We currently rely on Shenghe Resources (Singapore) to purchase all of our rare earth concentrate product on a “take-or-pay” basis and sell that product to end users in China. We cannot assure you that they will continue to honor their contractual obligations to purchase and sell our products, or that they will make optimum efforts to market and sell our products.

Our current ability to generate revenues from the sale of our rare earth concentrate is reliant on our arrangement under our amended and restated offtake agreement (the “A&R Offtake Agreement”) with Shenghe Resources (Singapore). While Shenghe Resources (Singapore) is obligated under the A&R Offtake Agreement to purchase all of our rare earth concentrate product on a “take-or-pay” basis (such that they are obliged to pay for product even if they are unable or unwilling to take delivery), we cannot guarantee that Shenghe Resources (Singapore) will continue to purchase all of the products that it is contractually bound to purchase.

Additionally, Shenghe Resources (Singapore) sells the rare earth concentrate it acquires under our A&R Offtake Agreement to customers in China who separate and extract the individual rare earth elements from our rare earth concentrate. We do not control the amount and timing of resources that Shenghe Resources (Singapore) will dedicate to their sales efforts, which could impact the duration of the A&R Offtake Agreement.

 

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Under the A&R Offtake Agreement, Shenghe Resources (Singapore) is entitled to retain the gross profits from the sales of our products, and those gross profits are credited against the prepayment funding provided by Shenghe Resources (Singapore). When Shenghe Resources (Singapore) has recouped all of its prepayment funding, the A&R Offtake Agreement will terminate. Any decline or delay in Shenghe Resources (Singapore)’s sales efforts will prolong the duration of the A&R Offtake Agreement. As of June 30, 2020, the prepayment funding balance under the A&R Offtake Agreement was approximately $93.3 million. See “Certain Relationships and Related Transactions—Certain Relationships and Related Person Transactions— Companies—Shenghe Agreements.”

The loss of business from our arrangement with Shenghe Resources (Singapore) would materially and adversely affect our results of operations until such time, if ever, as we are able to replace the lost business. To the extent we remain reliant on Shenghe Resources (Singapore), we are also subject to the risks faced by Shenghe Resources (Singapore) where such risks impede their ability to stay in business, make timely payments to us, perform their obligations to us, or sell our products to their end-customers.

We may not be able to convert current commercial discussions with customers for the sale of REO products into contracts, which may have a material adverse effect on our financial position and results of operations.

Currently, we sell all of our rare earth concentrate product to Shenghe Resources (Singapore) on a take-or-pay basis under our A&R Offtake Agreement. That A&R Offtake Agreement will terminate after Shenghe Resources (Singapore) has recovered the full amount of the funding it has provided to us, which funding effectively constitutes a prepayment for products to be supplied by us under the A&R Offtake Agreement. After the A&R Offtake Agreement terminates, we will no longer have a contractual agreement requiring Shenghe Resources (Singapore) to purchase rare earth products from the Mountain Pass facility. See “Certain Relationships and Related Transactions—Certain Relationships and Related Person Transactions— Companies—Shenghe Agreements.”

We are actively working on our Stage II optimization project, which includes installing a concentrate drying and roasting circuit, reconfiguring and restarting the product leaching circuit, recommissioning separation and extraction circuits, and enlarging product finishing capacity to re-establish the full capability to produce separated, individual rare earth products at Mountain Pass. Upon reaching anticipated production rates for REOs and other planned downstream products at the Mountain Pass facility, we expect to produce approximately 20,000 mt of separated REO per year, excluding cerium concentrate, consisting of approximately 6,075 mt of NdPr per year. Prior to reaching expected production rates for REOs and other planned downstream products at the Mountain Pass facility, we intend to enter into short- and long-term sales contracts with new customers. However, there can be no assurance that these customers will enter into sales contracts for REOs. The failure to enter into such contracts may have a material adverse effect on our financial position and results of operations.

Changes in China’s political environment and policies, including changes in export policy or the interpretation of China’s export policy and policy on rare earths production or the import of rare earth feedstock may adversely affect our financial condition and results of operations.

Because all of our rare earth concentrate product is currently sold to Shenghe Resources (Singapore) under our A&R Offtake Agreement, which subsequently sells the product to customers in China, the possibility of adverse changes in trade or political relations with China, political instability in China, increases in labor or shipping costs, the occurrence of prolonged adverse weather conditions or a natural disaster such as an earthquake or typhoon, or the continuation of COVID-19 or the outbreak of another global pandemic disease could severely interfere with the sale and/or shipment of our products and would have a material adverse effect on our operations.

Our sales may be adversely affected by the current and future political environment in China and the policies of the China Central Government. China’s government has exercised and continues to exercise

 

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substantial control over nearly all sectors of the Chinese economy through regulation and state ownership. Our ability to ship products to China may be adversely affected by changes in Chinese laws and regulations, including those relating to taxation, import and export tariffs, raw materials, environmental regulations, land use rights, property and other matters. Under its current leadership, China’s government has been pursuing economic reform policies that encourage private economic activity and greater economic decentralization. There is no assurance, however, that China’s government will continue to pursue these policies, or that it will not significantly alter these policies from time to time without notice. The United States government has called for substantial changes to foreign trade policy with China and has raised (as well as has proposed to further raise in the future), tariffs on several Chinese goods. China has retaliated with increased tariffs on United States goods. Any further changes in United States trade policy could trigger retaliatory actions by affected countries, including China, resulting in trade wars. Any changes in United States and China relations, including through changes in policies by the Chinese government could adversely affect our financial condition and results of operations, including: changes in laws, regulations or the interpretation thereof, confiscatory taxation, governmental royalties, restrictions on currency conversion, imports or sources of supplies, or the expropriation or nationalization of private enterprises.

In addition, there may be circumstances where we may have to incur premium freight charges to expedite the delivery of our products to customers or as a result of being required to ship to alternative ports due to local Chinese government regulations or delays at the ports that we typically utilize. If we incur a significant amount of freight charges, our gross profit will be negatively affected if we are unable to pass on those charges to customers.

We may be adversely affected by fluctuations in demand for, and prices of, rare earth minerals and products.

Because our revenue is, and will for the foreseeable future be, from the sale of rare earth products, changes in demand for, and the market price of, and taxes and other tariffs and fees imposed upon rare earth minerals and products could significantly affect our profitability. Our financial results may be significantly adversely affected by declines in the prices of rare earth minerals and products. Rare earth minerals and product prices may fluctuate and are affected by numerous factors beyond our control such as interest rates, exchange rates, taxes, inflation or deflation, fluctuation in the relative value of the U.S. dollar against foreign currencies on the world market, shipping and other transportation and logistics costs, global and regional supply and demand for rare earth minerals and products, potential industry trends, such as competitor consolidation or other integration methodologies, and the political and economic conditions of countries that produce and procure rare earth minerals and products. Furthermore, supply side factors have a significant influence on price volatility for rare earth minerals. Supply of rare earth minerals is dominated by Chinese producers. The Chinese Central Government regulates production via quotas and environmental standards, and has and may continue to change such production quotas and environmental standards. Over the past few years, there has been significant restructuring of the Chinese market in line with Chinese Central Government policy; however, periods of over supply or speculative trading of rare earth minerals can lead to significant fluctuations in the market price of rare earth minerals.

A prolonged or significant economic contraction in the United States or worldwide could put downward pressure on market prices of rare earth minerals and products. Protracted periods of low prices for rare earth minerals and products could significantly reduce revenues and the availability of required development funds in the future. This could cause substantial reductions to, or a suspension of, REO production operations, impair asset values and reduce our proven and probable rare earth ore reserves.

Demand for our products may be impacted by demand for downstream products incorporating rare earths, including hybrid and electric vehicles, wind turbines, robotics, medical equipment, military equipment and other high-growth, advanced motion technologies, as well as demand in the general automotive and electronic industries. Lack of growth in these markets may adversely affect the demand for our products.

 

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In contrast, extended periods of high commodity prices may create economic dislocations that may be destabilizing to rare earth minerals supply and demand and ultimately to the broader markets. Periods of high rare earth mineral market prices generally are beneficial to our financial performance. However, strong rare earth mineral prices also create economic pressure to identify or create alternate technologies that ultimately could depress future long-term demand for rare earth minerals and products, and at the same time may incentivize development of competing mining properties.

The COVID-19 pandemic could have an adverse effect on our business.

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, among other things, extreme volatility in financial markets, a slowdown in economic activity, extreme volatility in commodity prices and an increased possibility 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 and sentiment, globally. The outbreak has affected our business and operations and may continue to do so, by among others, increasing the cost of operations and reducing employee productivity, limiting travel of our personnel, adversely affecting the health and welfare of our personnel, or preventing or delaying important third party service providers from performing normal and contracted activities crucial to the operation of our business.

The outbreak has resulted in significant governmental measures being implemented to control the spread of the virus, including, among others, restrictions on manufacturing and the movement of employees in many regions of China, the U.S. and other countries. These disruptions could continue to impact the rare earth market, particularly the supply chain for China and the U.S., which in turn could impact our business or business prospects as under our A&R Offtake Agreement with Shenghe Resources (Singapore), pursuant to which we rely on Shenghe Resources (Singapore) to purchase all of our rare earth concentrate products and sell those products to customers in China. See “Certain Relationships and Related Transactions—Certain Relationships and Related Person Transactions—Companies—Shenghe Agreements.”

Decisions beyond our control, such as canceled events, restricted travel, barriers to entry, temporary closures or limited availability of county, state or federal government agencies, or other factors may affect our ability to perform mining operations, corporate activities, and other actions 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 operate in a highly competitive industry.

The rare earths mining and processing markets are capital intensive and competitive. Production of rare earths is dominated by our Chinese competitors. These competitors may have greater financial resources, as well as other strategic advantages to operate, maintain, improve and possibly expand their facilities. Additionally, our Chinese competitors have historically been able to produce at relatively low costs due to domestic economic and regulatory factors, including less stringent environmental and governmental regulations and lower labor and benefit costs. For instance, many of our Chinese competitors dispose of the waste material from beneficiation in wet tailings dams, which are significantly less expensive to operate and potentially more harmful to the environment than the dry tailings method that we employ. Even upon successful completion of our Stage II optimization project at the Mountain Pass facility, if we are not able to achieve our anticipated costs of production, then any strategic advantages that our competitors may have over us, including, without limitation, lower labor, compliance and production costs, could have a material adverse effect on our business.

 

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Industry consolidation may result in increased competition, which could result in a reduction in revenue.

Some of our competitors have made, or may make acquisitions or enter into partnerships or other strategic relationships to achieve competitive advantages. In addition, new entrants not currently considered competitors may enter our market through acquisitions, partnerships or strategic relationships. We expect these trends to continue as demand for rare earth materials increases. Industry consolidation may result in competitors with more compelling product offerings or greater pricing flexibility than we have, or business practices that make it more difficult for us to compete effectively, including on the basis of price, sales, technology or supply. These competitive pressures could have a material adverse effect on our business.

The success of our business will depend, in part, on the growth of existing and emerging uses for rare earth products.

The success of our business will depend, in part, on the growth of existing and emerging uses for rare earth products. Our strategy is to develop rare earth products, including NdPr, which are used in critical existing and emerging technologies, such as hybrid and electric vehicles, wind turbines, robotics, medical equipment, military equipment and other high-growth, advanced motion technologies. The success of our business depends on the continued growth of these end markets and successfully commercializing rare earth products, including NdPr, in such markets. If the market for these critical existing and emerging technologies does not grow as we expect, grows more slowly than we expect, or if the demand for our products in these markets decreases, then our business, prospects, financial condition and operating results could be harmed. In addition, the market for these technologies, particularly in the automotive industry, tends to be cyclical, which exposes us to increased volatility, and it is uncertain as to how such macroeconomic factors will impact our business. Any unexpected costs or delays in the commercialization of NdPr or any of our other expected products, or less than expected demand for the critical existing and emerging technologies that use rare earth products, could have a material adverse effect on our financial condition or results of operations.

An increase in the global supply of rare earth products, dumping, predatory pricing and other tactics designed to inhibit our further downstream integration by our competitors may materially adversely affect our profitability.

The pricing and demand for rare earth products is affected by a number of factors beyond our control, including growth of economic development and the global supply and demand for REO products. According to CRU, China was projected to account for approximately 83% of global REO production in 2020. China also dominates the manufacture of metals and NdFeB magnets from rare earths, capabilities that are not currently present in the United States, and the Chinese Central Government regulates production via quotas and environmental standards. Over the past few years, there has been significant restructuring of the Chinese markets in line with China Central Government policy. Assuming that we reach anticipated production rates for REOs and other planned downstream products and subsequently become fully operational and integrated, the increased competition may lead our competitors to engage in predatory pricing or other behaviors designed to inhibit our further downstream integration. Any increase in the amount of rare earth products exported from other nations and increased competition may result in price reductions, reduced margins or loss of potential market share, any of which could materially adversely affect our profitability. As a result of these factors, we may not be able to compete effectively against current and future competitors.

A power shortage at the Mountain Pass facility could temporarily delay mining and processing operations and increase costs, which may materially adversely impact our business.

Our facilities currently rely on electricity provided by a single utility company in Southern California. Instability in electrical supply could cause sporadic outages and brownouts. Any such outages or brownouts could have a negative impact on our production. The natural gas-powered CHP plant that was installed at the Mountain Pass facility to produce electricity and steam and to minimize or eliminate reliance on the regional

 

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electric power grid is currently idle. Subject to any required permit approvals and other required certifications, we plan to restart the CHP facility in 2021, and we have incorporated the assumed cost savings associated with restarting the CHP facility in the estimation of our reserves, however there can be no assurance that we will be successful in these efforts. If the CHP plant remains idle or is unable to provide sufficient energy for the operation of our Mountain Pass facility, we will incur higher operating costs, remain subject to the effects of occasional power outages and brownouts and could experience temporary interruptions of mining and processing operations. We then may be unable to fill customer orders in a timely manner and may be subject to higher power costs at the Mountain Pass facility. As a result, our revenue could be adversely impacted and our relationships with our customers could suffer, adversely impacting our ability to generate future revenue and otherwise perform our contractual obligations. In addition, if power to the Mountain Pass facility is disrupted during certain phases of our REO extraction process, we may incur significant expenses that may adversely affect our business.

Increasing costs or limited access to raw materials may adversely affect our profitability.

We use significant amounts of chemical reagents to process REOs. Even though the Mountain Pass facility includes a chlor-alkali facility that we expect to restart and believe will enable us to produce much of our chemical reagents demand on-site by the end of 2023, on-site production of these reagents could be delayed and any production could be hampered by any disruptions in the process used to produce these chemicals. Prior to commencing production of these chemicals, during any disruption to such production or for chemicals we cannot produce, we will need to purchase chemical reagents in the open market and as a result, we could be subject to significant volatility in the cost and availability of these chemicals and to restrictions on chemical use imposed by environmental regulations or law. We may not be able to pass increased prices for these chemicals through to our customers in the form of price increases. A significant increase in the price, or decrease in the availability of these chemicals before we restart our ability to produce them on-site, or restrictions imposed by environmental regulations or law on chemical use, could materially increase our operating costs and adversely affect our profit margins and production volumes.

Fluctuations in transportation costs or disruptions in transportation services or damage or loss during transport could decrease our competitiveness or impair our ability to supply rare earth minerals or products to our customers, which could adversely affect our results of operations.

We currently transport our rare earth concentrate product to China to be purchased by Shenghe Resources (Singapore) under our A&R Offtake Agreement. In the future, we will need to transport our products to our future customers wherever they may be located. Finding affordable and dependable transportation is important because it allows us to supply customers around the world. Labor disputes, embargos, government restrictions, work stoppages, pandemics, derailments, damage or loss events, adverse weather conditions, other environmental events, changes to rail or ocean freight systems or other events and activities beyond our control could interrupt or limit available transport services, which could result in customer dissatisfaction and loss of sales potential and could materially adversely affect our results of operations.

We will need to process REOs to exacting specifications in order to provide future customers with a consistently high quality product. An inability to perfect the mineral extraction processes to meet individual customer specifications may have a material adverse effect on our financial condition or results of operations.

Upon the completion of our Stage II optimization project, we expect to be able to process REOs to meet customer needs and specifications and to provide customers with a consistently high quality product and to meet ever-stricter purity requirements. An inability to perfect the mineral extraction processes to meet individual customer specifications may have a material adverse effect on our financial condition or results of operations. In addition, customer needs and specifications may change with time. Any delay or failure in developing processes to meet changing customer needs and specifications may have a material adverse effect on our financial condition or results of operations. Such events and conditions, including flooding and other natural disasters, could also impact the facilities of our customers which could have a material adverse affect on our ability to deliver our product to our customers.

 

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Diminished access to water may adversely affect our operations.

Processing of REOs requires significant amounts of water. The technology we currently use to beneficiate REOs is a sustainable, “green” process with dry tailings that limits the need for fresh water usage. Although we believe our current process is sustainable, any disruption in the process could prompt the need for significant access to fresh water. Additionally, once we complete our Stage II optimization project, we will require an even greater amount of water for our separation and extraction operations, including additional fresh water. We maintain and operate one water supply well field for potable and process water and own land and wells in another water supply well field that we may be able to operate in the future. Any disruption to our current process or decrease in available water supply may have a material adverse effect on our operations and our financial condition or results of operations.

Uncertainty in our estimates of REO reserves could result in lower than expected revenues and higher than expected costs.

We base our REO reserve estimates on engineering, economic and geological data assembled and analyzed by outside firms, which are reviewed by our engineers and geologists. Ore reserve estimates, however, are necessarily imprecise and depend to some extent on professional interpretation, including statistical inferences drawn from available drilling data, which may prove unreliable. There are numerous uncertainties inherent in estimating quantities and qualities of REO reserves and costs to mine recoverable reserves, including many factors beyond our control. Estimates of economically recoverable REO reserves necessarily depend upon a number of variable factors and assumptions, all of which may vary considerably from actual results, such as:

 

   

geological, mining and processing conditions and/or effects from prior mining that may not be fully identified by available data or that may differ from experience;

 

   

changes to the strategic approach to mining and processing the deposit depending upon market demand, corporate strategy and other prevailing economic conditions;

 

   

assumptions concerning future prices of rare earth products, foreign exchange rates, process recovery rates, transportation costs, operating costs, capital costs and reclamation costs; and

 

   

assumptions concerning future effects of regulation, including the issuance of required permits and taxes by governmental agencies and foreign government policies relating to the import or export of rare earth products.

Uncertainty in our estimates related to our REO reserves could result in lower than expected revenues and higher than expected costs or a shortened estimated life for the mine at the Mountain Pass facility. Fluctuations in factors out of our control such as changes in future product pricing, foreign government policies on the import or export of rare earths and foreign exchange rates can have a significant impact on the estimates of reserves and can result in significant changes in the quantum of our reserves period-to-period.

Period-to-period conversion of probable REO reserves to proven ore reserves may result in increases or decreases to the total reported amount of ore reserves. Conversion rates are affected by a number of factors, including geological variability, applicable mining methods and changes in safe mining practices, economic considerations and new regulatory requirements.

We may not successfully establish or maintain collaborative, joint venture and licensing arrangements, which could adversely affect our ability to vertically integrate into further downstream processing of our REOs.

A key element of our long-term business strategy is to vertically integrate into further downstream processing of our REOs into rare earth metal alloys and finished magnets for clean-energy, high-growth, advanced motion technologies. To implement this vertical integration strategy successfully, we may need to license certain intellectual property related to these downstream processes and/or develop the ability, or

 

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collaborate with, purchase or form a joint venture with, an existing magnet producer for the final production of finished rare earth magnets. In addition, other licenses that may be necessary for some of these downstream processing steps have not yet been obtained. Any failure to establish or maintain collaborative, joint venture or licensing arrangements for the production of downstream products on favorable terms could adversely affect our business prospects, financial condition or ability to develop and commercialize downstream rare earth products.

Our ability to reach our full revenue potential is dependent on our ability to fully fund, commence and complete our Stage III downstream expansion strategy.

Our ability to reach our full revenue potential will be dependent on our ability to fully fund and commence Stage III and complete our downstream expansion strategy to process our REOs into rare earth metal alloys and finished magnets. We expect to commence Stage III downstream expansion in 2025 or thereafter, however our proposed timeline is based on certain estimates and assumptions we have made about our business over the next few years, including the successful completion of our Stage II optimization project. If any of these estimates or assumptions prove to be wrong or we are unable to complete our Stage II optimization project, it may significantly hinder our ability to commence Stage III downstream expansion within the expected time frame or at all. If we are unsuccessful in being able to fully fund, commence and complete our Stage III downstream expansion strategy, within the expected time frame or at all, we will not be able to take advantage of our downstream value creation opportunity and thus we may not be able to reach our full revenue potential.

Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and materially adversely affect our results of operations.

A work stoppage by any of the third-parties providing services in connection with the construction projects at the Mountain Pass facility could significantly delay our Stage II optimization project and disrupt our operations, reduce our revenues and materially adversely affect our results of operations.

A shortage of skilled technicians and engineers may further increase operating costs, which may materially adversely affect our results of operations.

Efficient production of rare earth products using modern techniques and equipment requires skilled technicians and engineers. In addition, our optimization and eventual downstream efforts will significantly increase the number of skilled operators, maintenance technicians, engineers and other personnel required to successfully operate our business. In the event that we are unable to hire, train and retain the necessary number of skilled technicians, engineers and other personnel there could be an adverse impact on our labor costs and our ability to reach anticipated production levels in a timely manner, which could have a material adverse effect on our results of operations.

We depend on key personnel for the success of our business.

We depend on the services of our senior management team and other key personnel. The loss of the services of any member of senior management or a key employee could have an adverse effect on our business. We may not be able to locate, attract or employ on acceptable terms qualified replacements for senior management or other key employees if their services are no longer available.

Because of the dangers involved in the mining of minerals and the manufacture of mineral products, there is a risk that we may incur liability or damages as we conduct our business.

The mining of minerals and the manufacture of mineral products involves numerous hazards, including:

 

   

unusual and unexpected rock formations affecting ore or wall rock characteristics;

 

   

ground or slope failures (including open pits, waste rock and tailings disposal areas);

 

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environmental hazards;

 

   

industrial accidents;

 

   

bodily injury or harm;

 

   

processing problems;

 

   

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

 

   

mechanical equipment failure and facility performance problems.

Although we maintain insurance to address certain risks involved in our business, such as coverage for property damage, business interruption, natural disasters, terrorism and workers compensation, there can be no assurance that we will be able to maintain insurance to cover these risks at economically feasible premiums. Additionally, we cannot be certain that all claims we may make under our insurance policies will be deemed to be within the scope of, or fully covered by, our policies. We might also become subject to liability for environmental issues, damage or other hazards that may be uninsurable or for which we may elect not to insure because of premium costs or commercial impracticality. These policies contain limits of coverage and exclusions that are typical of such policies generally. The payment of such premiums, or the assumption of such liabilities, may have a material adverse effect on our financial position and results of operations.

Our facilities or operations could be adversely affected by events outside of our control, such as natural disasters, wars or health epidemics or pandemics.

We may be impacted by natural disasters, wars, health epidemics or pandemics or other events outside of our control. For example, our Mountain Pass rare earth facility is located in San Bernardino County, California near active faults, which could lead to nearby earthquakes. If major disasters such as earthquakes, wild fires, health epidemics or pandemics, floods or other events occur, or our information system or communications network breaks down or operates improperly, our ability to continue operations at the Mountain Pass facility may be seriously damaged, or we may have to stop or delay production and shipment of our products. We may incur expenses or delays relating to such events outside of our control, which could have a material adverse impact on our business, operating results and financial condition.

We are dependent upon information technology systems, which are subject to cyber threats, disruption, damage and failure.

We depend upon information technology systems in the conduct of our operations. Our information technology systems are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security breaches, cyber-attacks, natural disasters and defects in design. Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information or the corruption of data. Various measures have been implemented to manage our risks related to information technology systems and network disruptions. However, given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from remedial actions, any of which could have a material adverse effect on our business, operating results and financial condition.

We may not be able to adequately protect our intellectual property rights. If we fail to adequately enforce or defend our intellectual property rights, our business may be harmed.

Much of the technology used in the markets in which we compete is protected by patents and trade secrets, and our commercial success will depend in significant part on our ability to obtain and maintain patent and trade

 

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secret protection for our products and methods. To compete in these markets, we rely on a combination of trade secret protection, nondisclosure and licensing agreements, patents and trademarks to establish and protect our proprietary intellectual property rights, including our proprietary rare earth production processes that are not patented. Our intellectual property rights may be challenged or infringed upon by third parties or we may be unable to maintain, renew or enter into new license agreements with third-party owners of intellectual property on reasonable terms. In addition, our intellectual property may be subject to infringement or other unauthorized use outside of the United States. In such case, our ability to protect our intellectual property rights by legal recourse or otherwise may be limited, particularly in countries where laws or enforcement practices are undeveloped or do not recognize or protect intellectual property rights to the same extent as the United States. Unauthorized use of our intellectual property rights or our inability to preserve existing intellectual property rights could adversely impact our competitive position and results of operations. The loss of our patents could reduce the value of the related products. In addition, the cost to litigate infringements of our patents, or the cost to defend ourselves against patent infringement actions by others, could be substantial and, if incurred, could materially affect our business and financial condition.

Proprietary trade secrets and unpatented know-how are also very important to our business. We rely on trade secrets to protect certain aspects of our technology, especially where we do not believe that patent protection is appropriate or obtainable. However, trade secrets are difficult to protect. Our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential or proprietary information. Enforcing a claim that a third party illegally obtained and is using our trade secrets is expensive and time consuming, and the outcome is unpredictable. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. Failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

We may not be able to obtain additional patents and the legal protection afforded by any additional patents may not adequately protect our rights or permit us to gain or keep any competitive advantage.

Our ability to obtain additional patents is uncertain and the legal protection afforded by these patents is limited and may not adequately protect our rights or permit us to gain or keep any competitive advantage. In addition, the specific content required of patents and patent applications that are necessary to support and interpret patent claims is highly uncertain due to the complex nature of the relevant legal, scientific and factual issues. Changes in either patent laws or interpretations of patent laws in the United States or elsewhere may diminish the value of our intellectual property or narrow the scope of our patent protection. Even if patents are issued regarding our products and processes, our competitors may challenge the validity of those patents. Patents also will not protect our products and processes if competitors devise ways of making products without infringing our patents.

If we infringe, or are accused of infringing, the intellectual property rights of third parties, it may increase our costs or prevent us from being able to commercialize new products.

There is a risk that we may infringe, or may be accused of infringing, the proprietary rights of third parties under patents and pending patent applications belonging to third parties that may exist in the United States and elsewhere in the world that relate to our rare earth products and processes. Because the patent application process can take several years to complete, there may be currently pending applications that may later result in issued patents that cover our products and processes. In addition, our products and processes may infringe existing patents.

Defending ourselves against third-party claims, including litigation in particular, would be costly and time consuming and would divert management’s attention from our business, which could lead to delays in our Stage II optimization project or Stage III downstream expansion. If third parties are successful in their claims, we

 

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might have to pay substantial damages or take other actions that are adverse to our business. As a result of intellectual property infringement claims, or to avoid potential claims, we might:

 

   

be prohibited from, or delayed in, selling or licensing some of our products or using some of our processes unless the patent holder licenses the patent to us, which it is not required to do;

 

   

be required to pay substantial royalties or grant a cross license to our patents to another patent holder; or

 

   

be required to redesign a product or process so it does not infringe a third party’s patent, which may not be possible or could require substantial funds and time.

In addition, we could be subject to claims that our employees, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of third parties.

If we are unable to resolve claims that may be brought against us by third parties related to their intellectual property rights on terms acceptable to us, we may be precluded from offering some of our products or using some of our processes.

Our ability to generate revenue will be diminished if we are unable to compete with substitutions for our rare earth materials.

Technology changes rapidly in the industries and end markets that utilize our materials. If these industries introduce new technologies or products that no longer require the rare earth materials we produce to function or suitable substitutes become available, it could result in a decline in demand for our rare earth materials. If the demand for our rare earth materials decreases, it will have a material adverse effect on our business and the results of our operations and financial condition.

Our profitability could be adversely affected if we fail to maintain satisfactory labor relations.

Production in our Mountain Pass facility is dependent upon the efforts of our employees. Although none of our employees are currently subject to any collective bargaining arrangements, our employees could, in the future, choose to be represented as a collective unit, which may result in labor disputes, work stoppages or other disruptions in our production efforts that could adversely affect us.

Risks Related to Environmental Regulation

Our operations are subject to extensive and costly environmental requirements; and current and future laws, regulations and permits impose significant costs, liabilities or obligations or could limit or prevent our ability to continue our current operations or to undertake new operations.

We are subject to numerous and detailed, federal, state and local environmental laws, certifications, regulations and permits, including, without limitation, those pertaining to employee health and safety, air emissions, water usage, wastewater and stormwater discharges, air quality standards, greenhouse gas (“GHG”), emissions, water usage and pollution, waste management, plant and wildlife protection, handling and disposal of radioactive substances, remediation of soil and groundwater contamination, land use, reclamation and restoration of properties, the discharge of materials into the environment, procurement of certain materials used in our operations and groundwater quality and availability. These requirements may result in significant costs, liabilities and obligations, impose conditions that are difficult to achieve or otherwise delay, limit or prohibit current or planned operations. Consequently, the modernization and expansion of the Mountain Pass facility may be delayed, limited or prevented and current operations may be curtailed. Failure to comply with these laws, regulations and permits, including as they evolve, may result in the assessment of administrative, civil and criminal penalties, the issuance of injunctions to limit or cease operations, fines, or the suspension or revocation of permits and other sanctions. Pursuant to such requirements, we may also be subject to third-party claims,

 

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including for damages to property or injury to persons arising from our operations. Moreover, environmental legislation and regulation are evolving in a manner which may require stricter standards and enforcement, increased fines and penalties for non-compliance, cessation of operations, more stringent environmental assessments, and a heightened degree of responsibility for companies and their officers, directors and employees. Any changes in these laws, regulations or permits (or the interpretation or enforcement thereof) or any sanctions, damages, costs, obligations or liabilities in respect of these matters could have a material adverse effect on our business and/or the results of our operations and financial condition.

Examples of some of the current U.S. federal laws that may affect our business and planned operations include, but are not limited to, the following:

 

   

The Comprehensive Environmental, Response, Compensation, and Liability Act (“CERCLA”), and comparable state laws, impose strict, joint and several liability on current and former owners and operators of sites and on persons who disposed of or arranged for the disposal of hazardous substances found at such sites, regardless of the lawfulness of the original activities that led to the contamination. Moreover, current owners or operators of sites can be held liable for contamination caused by others, including former owners or operators, even if the current owners or operators did not contribute to the contamination. CERCLA authorizes the United States Environmental Protection Agency (“EPA”) and, in some cases, third parties to take actions in response to threats to public health or the environment and to seek to recover from the potentially responsible parties the costs of such actions. It is not uncommon for the government to file claims requiring cleanup actions, demands for reimbursement for government-incurred cleanup costs, or natural resource damages, or for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by hazardous substances released into the environment.

 

   

The Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes, govern the disposal of solid waste and hazardous waste and authorize the imposition of substantial fines and penalties for noncompliance, as well as requirements for corrective actions. Although certain mining, beneficiation, and mineral processing wastes currently are exempt from regulation as hazardous wastes under RCRA, EPA has limited the disposal options for certain wastes designated as hazardous wastes under RCRA. It is possible that certain wastes generated by our operations may in the future be designated as hazardous wastes and may therefore become subject to more rigorous and costly management, disposal and clean-up requirements.

 

   

The Nuclear Regulatory Commission (“NRC”), pursuant to its authority under the Atomic Energy Act of 1954, as amended (the “Atomic Energy Act”), oversees the regulatory framework governing the control of radioactive materials, including beneficiation and processing of rare earth elements (“REE”) that contain radioactive source materials such as uranium and thorium. The NRC is responsible for issuing licenses that govern the handling of source material involving certain concentrations of radioactive material. Our operations, including waste generation, may be subject to NRC regulations in order to receive title to, possess, use, transfer, deliver or export source and byproduct materials.

 

   

The Clean Air Act (“CAA”), and comparable state statutes, restrict the emission of air pollutants from many stationary and mobile sources, including mining, beneficiation, and processing activities. Our operations may produce air emissions, including fugitive dust and other air pollutants, from stationary equipment, storage facilities, and the use of mobile sources, such as trucks and heavy construction equipment, that are subject to review, monitoring, control requirements and emission limits under the CAA and state air quality laws. New sources, equipment or process enhancements, including with respect to the growth of our operations and Stage II optimization project, may require additional permits, and existing sources may be required to incur capital costs to remain in compliance. In addition, permitting rules and issued permits or licenses may impose conditions or other limitations on production levels or result in additional capital or other expenditures to comply with such rules or permits. In certain circumstances, private citizens may also sue sources of pollutants for alleged violations of the CAA.

 

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The Clean Water Act (“CWA”) and comparable state statutes impose restrictions and controls on the discharge of pollutants into waters of the United States. The CWA can regulate storm water from mining facilities and requires a storm water discharge permit for certain activities. Such a permit requires the regulated facility to monitor and sample storm water run-off from its operations. The CWA and regulations implemented thereunder also prohibit discharges of dredged and fill material in wetlands and other waters of the United States unless authorized by an appropriately issued permit. CWA regulations and controls generally have become more stringent over time, and it is possible that additional restrictions will be imposed in the future. Violation of the CWA and similar state regulatory programs can result in civil, criminal and administrative penalties for unauthorized discharges of hazardous substances and other pollutants and substantial liability for the costs of removal or remediation associated with such discharges. The CWA and comparable state statutes provide for civil, criminal and administrative penalties for unauthorized discharges of pollutants and impose liability on parties responsible for those discharges for the costs of cleaning up any environmental damage caused by the releases and for natural resource damages resulting from the releases.

 

   

The Safe Drinking Water Act (“SDWA”) and comparable state statutes, the Underground Injection Control (“UIC”) program, and related state-administered programs regulate the drilling and operation of subsurface injection wells. Violation of these regulations and/or contamination of groundwater by mining related activities may result in fines, penalties, and/or remediation costs, among other sanctions and liabilities under the SDWA and state laws.

 

   

The Endangered Species Act (“ESA”) and comparable state statutes regulate activities that could have an adverse effect on threatened and endangered species, including the habitat and ecosystems upon which they depend. Compliance with ESA requirements can significantly delay, limit, or even prevent the development of projects, including the development of mining claims, and can also result in increased development costs. In addition, the ESA authorizes both civil and criminal penalties for ESA violations and authorizes citizen suits against any person alleged to be in violation of the ESA.

 

   

The National Environmental Policy Act (“NEPA”) and comparable state statutes require agencies to integrate environmental considerations into their decision-making processes by evaluating the environmental impacts of their proposed actions, including issuance of permits to mining facilities, and assessing alternatives to those actions. If a proposed action could significantly affect the environment, the agency must prepare a detailed statement known as an Environmental Impact Statement (“EIS”). EPA, other agencies, and any interested third parties will review and comment on the scoping of the EIS and the adequacy of and findings set forth in the draft and final EIS. This process can cause delays in issuance of required permits or result in changes to a project to mitigate its potential environmental impacts, which can in turn impact the economic feasibility of a proposed project.

We may be unable to obtain, maintain, exchange or renew permits necessary for the development or operation of the Mountain Pass facility, which could have a material adverse effect on our business, results of operations and financial condition.

We must obtain, including by way of exchanging or amending currently held permits, a number of additional permits that impose strict conditions, requirements and obligations relating to various environmental and health and safety matters in connection with our current and future operations, including the modernization and expansion of the Mountain Pass facility. To obtain certain permits, we may be required to conduct environmental studies and collect and present data to governmental authorities pertaining to the potential impact of our current and future operations upon the environment and to take steps to avoid or mitigate those impacts. The permitting rules, and interpretation thereof, are complex and have generally become more stringent over time. In some cases, the public (including environmental interest groups) has rights to comment upon, and submit objections to, permit applications and environmental impact statements prepared in connection therewith, and otherwise participate in the permitting process, including challenging the issuance of permits, validity of environmental impact statements and determinations and performance of permitted activities. Accordingly,

 

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permits required for our operations, including the modernization and expansion of the Mountain Pass facility, may not be issued, maintained, exchanged, amended or renewed in a timely fashion or at all, or may be issued or renewed upon conditions that restrict our ability to conduct our operations economically. Any such failure to obtain, maintain, exchange, amend or renew permits, or other permitting delays or conditions, including in connection with any environmental impact analyses, could have a material adverse effect on our business, results of operations and financial condition.

We are subject to the Federal Mine Safety and Health Act of 1977 and the California Occupational Safety and Health Program, and regulations adopted pursuant thereto, which impose stringent health and safety standards on numerous aspects of our operations.

Our operations at the Mountain Pass facility are subject to the Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New Emergency Response Act of 2006, and the regulations adopted by the California Occupational Safety and Health Administration, which impose stringent health and safety standards on numerous aspects of mineral extraction and processing operations, including training of mine personnel, mining procedures, blasting, the equipment used in mining operations and other matters. Our failure to comply with such standards, or changes in such standards or the interpretation or enforcement thereof, could have a material adverse effect on our business, financial condition or otherwise impose significant restrictions on our ability to conduct mining operations.

Our operations may affect the environment or cause exposure to hazardous substances, any of which could result in material costs, obligations or liabilities.

Our operations currently use, and in the past have used, hazardous materials and generate, and in the past have generated, hazardous and naturally occurring radioactive wastes. While we maintain policies and other standard operation procedures as they relate to the handling and disposing of chemicals or other substances by personnel in supporting our operations, risks, including bodily injury and property damage, persist. The Mountain Pass facility has also been used for mining and related purposes since 1952, and contamination is known to exist around the facility. We may be subject to claims under environmental laws, regulations and permits for toxic torts, natural resource damages and other liabilities, as well as for the investigation and remediation of soil, surface water, groundwater and other environmental media. The Mountain Pass facility is subject to an order issued by the Lahontan Regional Water Quality Control Board pursuant to which we have conducted various investigatory and remedial actions, primarily related to contamination emanating from certain on-site impoundments during prior periods of operation, including groundwater monitoring, extraction and treatment. We are still in the process of delineating the extent of groundwater contamination at and around the facility and cannot assure you that we will not incur material costs relating to the remediation of such contamination. Also, prior to our acquisition of the Mountain Pass facility, leaks in a wastewater pipeline from the Mountain Pass facility to offsite evaporation ponds on the Ivanpah dry lake bed caused contamination. Pursuant to a settlement agreement, that contamination has been remediated by Chevron Mining Inc., which retained ownership of the ponds and the pipeline and provided a full indemnity to the previous buyer of the Mountain Pass Mine for liabilities related to the Ivanpah wastewater pipeline. A small portion of the pipeline extends onto the Mountain Pass facility. In addition to claims arising out of our current or former properties, such claims may arise in connection with contaminated third-party sites at which we have disposed of waste. As a matter of law, and despite any contractual indemnity or allocation arrangements or acquisition agreements to the contrary, our liability for these claims may be joint and several, so that we may be held responsible for more than our share of any contamination, or even for the entire share. These and similar unforeseen impacts that our operations may have on the environment, as well as human exposure to hazardous or radioactive materials or wastes associated with our operations, could have a material adverse effect on our business, reputation, results of operation and financial condition.

 

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Our inability to acquire, maintain or renew financial assurances related to the reclamation and restoration of mining property could have a material adverse effect on our business and results of operations.

Under the California Surface Mining and Reclamation Act we are generally obligated to restore property after it has been mined in accordance with regulatory standards and our approved mining plan. Additionally, we are required under various federal, state and local laws to maintain financial assurances, such as surety bonds, to secure such obligations. The failure to acquire, maintain or renew such assurances, as required by federal, state and local laws, could subject us to fines and penalties as well as the revocation of our mining permits. Such failure could result from a variety of factors, including:

 

   

the lack of availability, higher expense or unreasonable terms of such financial assurances;

 

   

the ability of current and future financial assurance counterparties to increase required collateral; and

 

   

the exercise by third-party financial assurance counterparties of any rights to refuse to renew the financial assurance instruments.

Our inability to acquire or failure to maintain or renew such financial assurances could have a material adverse effect on our business, financial condition and results of operations.

If the assumptions underlying our reclamation plan and mine closure obligations are inaccurate, we could be required to expend materially greater amounts than anticipated to reclaim mined property, which could materially and adversely affect our business, results of operations and financial condition.

Federal, state and local laws and regulations establish reclamation and closure standards applicable to our surface mining and other operations as well. Estimates of our total reclamation and mine closing liabilities are based upon our reclamation plan, third-party expert reports, current applicable laws and regulations, certain permit terms, our engineering expertise related to these requirements and review by regulatory agencies. Any change in the underlying assumptions, permissions, or other variation between the estimated liabilities and actual costs could materially and adversely affect our business, results of operations and financial condition.

Regulations and evolving 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 international, federal, state or local governments or governmental bodies have introduced or are contemplating regulatory changes in response to the potential impact of climate change. For example, EPA issued a notice of finding and determination that emissions of carbon dioxide, methane, and other greenhouse gases (GHGs) present an endangerment to human health and the environment, which allowed EPA to begin regulating emissions of GHGs under existing provisions of the CAA. 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, permitting, 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 and countries not subject to such limitations. Given the political significance, regulatory or compliance obligations and uncertainty around the impact of climate change and how it should be addressed, 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 our reputation. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These impacts may adversely impact the cost, production and financial performance of our operations.

 

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Risks Relating to FVAC and the Business Combination

Because the market price of shares of FVAC Class A common stock will fluctuate, the Companies’ unitholders cannot be sure of the value of the Business Combination consideration they will receive.

Upon completion of the Business Combination:

(i) each share of MPMO HoldCo preferred stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (A) the number of shares of FVAC Class A common stock equal to (1) 71,941,543.08436 divided by (2) the sum of (x) the number of shares of MPMO HoldCo common stock plus (y) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (B) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement;

(ii) each share of MPMO HoldCo common stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (A) the number of shares of FVAC Class A common stock equal to (1) 71,941,543.08436 divided by (2) the sum of (x) the number of shares of MPMO HoldCo common stock plus (y) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (B) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement; and

(iii) each share of SNR HoldCo common stock issued and outstanding immediately prior to the effective time of the initial SNR merger will be converted into the right to receive (A) the number of shares of FVAC Class A common stock equal to (1) 20,000,000 divided by (2) the number of shares of SNR HoldCo common stock outstanding as of immediately prior to the closing and (B) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement. No fractional shares will be issued in connection with the Business Combination. In lieu thereof, FVAC shall pay or cause to be paid cash to each holder who otherwise would have been entitled to receive a fractional share. The merger consideration that the Companies’ unitholders will receive is a fixed number of shares of FVAC Class A common stock; it is not a number of shares with a particular fixed market value. See “The Merger Agreement—Merger Consideration” beginning on page 125 of this proxy statement/consent solicitation/prospectus.

The market value of FVAC Class A common stock and the Companies’ units at the effective time of the Business Combination may vary significantly from their respective values on the date the Merger Agreement was executed or at other dates. Because the exchange ratio is fixed and will not be adjusted to reflect any changes in the market value of shares of FVAC Class A common stock or the Companies’ units, the market value of the shares of FVAC Class A common stock issued in connection with the Business Combination and the Companies’ units converted in connection with the Business Combination may be higher or lower than the values of those shares on earlier dates, and may be higher or lower than the value used to determine the exchange ratio. Stock price changes may result from a variety of factors, including changes in the business, operations or prospects of FVAC or the Companies, regulatory considerations, and general business, market, industry or economic conditions. Many of these factors are outside of the control of FVAC and the Companies.

FVAC stockholders will have a reduced ownership and voting interest after the Business Combination and will exercise less influence over management.

Upon the issuance of the shares of MPMC Class A common stock to the Companies’ unitholders, current FVAC stockholders’ percentage ownership will be diluted. Assuming no public stockholders exercise their redemption rights and excluding the potential dilutive effect of the Earnout Shares, Vesting Shares, and exercise of FVAC public warrants, current FVAC public stockholders’ percentage ownership in MPMC following the issuance of shares to the Companies’ unitholders would be 23.4%. Assuming that 34,500,000 public shares (the maximum number of public shares that could be redeemed in connection with the Business Combination in order to satisfy the Minimum Cash Condition) are redeemed in connection with the Business Combination and excluding the potential dilutive effect of the Earnout Shares, Vesting Shares, and exercise of FVAC public warrants, current FVAC public stockholders’ percentage ownership in MPMC following the issuance of shares of

 

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MPMC Class A common stock to the Companies’ unitholders would be 0%. Additionally, of the expected members of the MPMC Board after the completion of the Business Combination, only one is a current director of FVAC and the rest will be current directors of the Companies or newly appointed directors. The percentage of MPMC’s common stock that will be owned by current FVAC stockholders as a group will vary based on the number of shares of FVAC Class A common stock for which the holders thereof request redemption in connection with the Business Combination. Because of this, current FVAC stockholders, as a group, will have less influence on the MPMC Board, management and policies of MPMC than they now have on the FVAC Board, management and policies of FVAC.

Even if FVAC consummates the Business Combination, there is no guarantee that the FVAC public warrants will ever be in the money, and they may expire worthless and the terms of FVAC’s public warrants may be amended.

The exercise price for FVAC public warrants is $11.50 per share of FVAC Class A common stock. There is no guarantee that the FVAC public warrants will ever be in the money prior to their expiration, and as such, the FVAC public warrants may expire worthless and the terms may be amended.

The market price of shares of MPMC Class A common stock after the Business Combination may be affected by factors different from those currently affecting the price of shares of FVAC Class A common stock.

Upon completion of the Business Combination, the Companies’ unitholders will become holders of shares of MPMC Class A common stock. Prior to the Business Combination, FVAC has had limited operations. Upon completion of the Business Combination, MPMC’s results of operations will depend upon the performance of the Companies’ businesses, which are affected by factors that are different from those currently affecting the results of operations of FVAC.

FVAC has not obtained an opinion from an independent investment banking firm, and consequently, there is no assurance from an independent source that the Business Combination consideration is fair to FVAC’s stockholders from a financial point of view.

FVAC is not required to, and has not, obtained an opinion from an independent investment banking firm that the consideration it is paying for the Companies in the Business Combination is fair to FVAC’s stockholders from a financial point of view. The equity value of the Companies has been determined by the FVAC Board based upon standards generally accepted by the financial community, such as potential revenue and the price for which comparable businesses or assets have been valued. FVAC’s stockholders will be relying on the judgment of the FVAC Board with respect to such matters.

If the Business Combination’s benefits do not meet the expectations of financial analysts, the market price of MPMC Class A common stock may decline.

The market price of the FVAC common stock may decline as a result of the Business Combination if MPMC does not achieve the perceived benefits of the Business Combination as rapidly, or to the extent anticipated by, financial analysts or the effect of the Business Combination on MPMC’s financial results is not consistent with the expectations of financial analysts. Accordingly, holders of FVAC common stock may experience a loss as a result of a decline in the market price of MPMC Class A common stock. In addition, a decline in the market price of MPMC Class A common stock could adversely affect MPMC’s ability to issue additional securities and to obtain additional financing in the future.

Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or cannot be met.

Before the transactions contemplated by the Merger Agreement can be completed, approval must be obtained under the HSR Act. In deciding whether to grant antitrust clearance, the relevant governmental

 

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authorities will consider a variety of factors, including the effect of the Business Combination on competition within their relevant jurisdiction. The terms and conditions of the approvals that are granted may impose requirements, limitations or costs, or place restrictions on the conduct of MPMC’s business. The requirements, limitations or costs imposed by the relevant governmental authorities could delay the closing of the Business Combination or diminish the anticipated benefits of the Business Combination. Additionally, the completion of the Business Combination is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory authority of competent jurisdiction that would prohibit or make illegal the completion of the Business Combination. FVAC and the Companies believe that the Business Combination should not raise significant regulatory concerns and that FVAC and the Companies will be able to obtain all requisite regulatory approvals in a timely manner. However, FVAC and the Companies cannot be certain when or if regulatory approvals will be obtained or, if obtained, the conditions that may imposed. In addition, neither FVAC nor the Companies can provide assurance that any such conditions, terms, obligations or restrictions will not result in delay. See “Regulatory Approvals Related to the Business Combination” beginning on page 145 of this proxy statement/consent solicitation/prospectus.

The Companies and FVAC have also agreed to act as promptly as practicable but in no event later than ten (10) business days after the date of the Merger Agreement to comply with the notification and reporting requirements of the California Department of Public Health, Division of Radiation Safety and Environmental Management (“DPH”) and the U.S. Nuclear Regulatory Commission (the “NRC”). Before the transactions contemplated by the Merger Agreement can be completed, written consent must be obtained from the NRC. The Companies and FVAC will promptly and in good faith respond to all information requested of them by the DPH and the NRC in connection with such notification and otherwise cooperate in good faith with each other and agree to use their best efforts to obtain any approvals that may be required by the DPH and the NRC. The Companies and FVAC will promptly furnish to the other such information and assistance as the other may reasonably request in connection with its preparation of any filing or submission that is necessary (if any) and will take all other actions necessary or desirable to obtain the required consents or cause the expiration or termination of the applicable waiting periods (if any) as soon as practicable. The Companies and FVAC will promptly provide the other with copies of all written communications (and memoranda setting forth the substance of all oral communications) between each of them, any of their affiliates and their respective agents, representatives and advisors, on the one hand, and either the DPH or NRC, on the other hand, with respect to the Merger Agreement or the Business Combination.

The consummation of the Business Combination is subject to a number of conditions and if those conditions are not satisfied or waived, the Merger Agreement may be terminated in accordance with its terms and the Business Combination may not be completed.

The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Business Combination. Those conditions include: (i) approval by FVAC’s stockholders and the Companies’ unitholders, (ii) FVAC having at least $5,000,001 of net tangible assets as of the effective time of the consummation of the Business Combination, (iii) the expiration or termination of the waiting period under the HSR Act, (iv) provision of notice to the relevant government agencies concerning receipt of Nuclear Licenses and any related approvals, including written consent by the NRC (v) the listing of the shares of FVAC Class A common stock to be issued in connection with the closing of the transactions contemplated by the Merger Agreement on the NYSE and the effectiveness of this Registration Statement, (vi) the satisfaction of the Minimum Cash Condition, (vii) the consummation of (a) the Pre-Closing Reorganization and (b) the transactions contemplated by the Parent Sponsor Letter Agreement (as defined below) and (viii) the delivery by SNR and MPMO to FVAC of a title opinion and survey in respect of the Mountain Pass facility consistent with the terms of the Merger Agreement, which has been satisfied as of the date of this proxy statement/consent solicitation/prospectus. In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after stockholder approval, or FVAC or the Companies may elect to terminate the Merger Agreement in certain other circumstances. See “The Merger Agreement—Termination” beginning on page 139 of this proxy statement/consent solicitation/prospectus.

 

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FVAC may waive one or more of the conditions to the Business Combination.

FVAC may agree to waive, in whole or in part, one or more of the conditions to FVAC’s obligations to complete the Business Combination, to the extent permitted by FVAC’s current certificate of incorporation and bylaws and applicable laws. For example, it is a condition to FVAC’s obligations to close the Business Combination that Seller have performed and complied in all material respects with the obligations required to be performed or complied with by Seller under the Merger Agreement. However, if the FVAC Board determines that a breach of this obligation is not material, then the FVAC Board may elect to waive that condition and close the Business Combination. FVAC may not waive the condition that FVAC stockholders approve the Business Combination. Please see the section entitled “The Merger Agreement— Conditions to the Business Combination” beginning on page 138 of this proxy statement/consent solicitation/prospectus for additional information.

The exercise of discretion by FVAC’s directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of FVAC’s stockholders.

In the period leading up to the consummation of the Business Combination, other events may occur that, pursuant to the Merger Agreement, would require FVAC to agree to amend the Merger Agreement, to consent to certain actions or to waive rights that it is entitled to under the Merger Agreement. Such events could arise because of changes in the course of the business of the Companies, a request by Companies and the Companies’ management to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on the business of the Companies and could entitle FVAC to terminate the Merger Agreement. In any of such circumstances, it would be in the discretion of FVAC, acting through the FVAC Board, to grant its consent or waive its rights. The existence of the financial and personal interests of the FVAC directors described elsewhere in this proxy statement/consent solicitation/prospectus may result in a conflict of interest on the part of one or more of the FVAC directors between what he or she may believe is best for FVAC and FVAC stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action. As of the date of this proxy statement/consent solicitation/prospectus, FVAC does not believe there will be any changes or waivers that FVAC’s directors and officers would be likely to make after FVAC stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the stockholders, FVAC will be required to circulate a new or amended proxy statement/consent solicitation/prospectus or supplement thereto and resolicit the vote of FVAC’s stockholders with respect to the Business Combination Proposal.

Termination of the Merger Agreement could negatively impact FVAC.

If the Business Combination is not completed for any reason, including as a result of FVAC stockholders declining to approve the proposals required to effect the Business Combination, the ongoing businesses of FVAC may be adversely impacted and, without realizing any of the anticipated benefits of completing the Business Combination, FVAC would be subject to a number of risks, including the following:

 

   

FVAC may experience negative reactions from the financial markets, including negative impacts on its stock price (including to the extent that the current market price reflects a market assumption that the Business Combination will be completed);

 

   

FVAC will have incurred substantial expenses and will be required to pay certain costs relating to the Business Combination, whether or not the Business Combination is completed; and

 

   

since the Merger Agreement restricts the conduct of FVAC’s businesses prior to completion of the Business Combination, FVAC may not have been able to take certain actions during the pendency of

 

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  the Business Combination that would have benefitted it as an independent company, and the opportunity to take such actions may no longer be available (see the section entitled “The Merger Agreement—Covenants and Agreements” beginning on page 126 of this proxy statement/consent solicitation/prospectus for a description of the restrictive covenants applicable to FVAC).

If the Merger Agreement is terminated and FVAC’s board of directors seeks another merger or business combination, FVAC stockholders cannot be certain that FVAC will be able to find another acquisition target that would constitute a business combination or that such other merger or business combination will be completed. See “The Merger Agreement—Termination” beginning on page 139 of this proxy statement/consent solicitation/prospectus.

The Companies will be subject to business uncertainties and contractual restrictions while the Business Combination is pending.

Uncertainty about the effect of the Business Combination on employees and other business participants may have an adverse effect on the Companies and consequently on FVAC. These uncertainties may impair the Companies’ ability to attract, retain and motivate key personnel until the Business Combination is completed, and could cause others that deal with the Companies to seek to change existing business relationships with the Companies. Retention of certain employees may be challenging during the pendency of the Business Combination, as certain employees may experience uncertainty about their future roles. If key employees depart because of issues relating to the uncertainty or a desire not to remain with the business, MPMC’s business following the Business Combination could be negatively impacted. In addition, the Merger Agreement restricts the Companies from making certain expenditures and taking other specified actions without the consent of FVAC until the Business Combination occurs. These restrictions may prevent the Companies from pursuing attractive business opportunities that may arise prior to the completion of the Business Combination. See “The Merger Agreement—Covenants and Agreements” beginning on page 126 of this proxy statement/consent solicitation/prospectus.

FVAC directors and officers have interests in the Business Combination that may be different from the interests of FVAC Stockholders.

Executive officers of FVAC negotiated the terms of the Merger Agreement with their counterparts at the Companies, and the FVAC Board determined that entering into the Merger Agreement was in the best interests of FVAC and its stockholders, declared the Merger Agreement advisable and recommended that FVAC stockholders approve the proposals required to effect the Business Combination. In considering these facts and the other information contained in this proxy statement/consent solicitation/prospectus, you should be aware that FVAC’s executive officers and directors may have financial interests in the Business Combination that may be different from, or in addition to, the interests of FVAC stockholders, including through ownership of Founder Shares and/or interests in the Sponsor, which will be without value if FVAC does not consummate a business combination prior to May 4, 2022. The FVAC Board and the audit committee thereof was aware of and considered these interests, among other matters, in reaching the determination to approve the terms of the Business Combination and in recommending to FVAC’s stockholders that they vote to approve the Business Combination. For a detailed discussion of the special interests that FVAC’s directors and executive officers may have in the Business Combination, please see the section entitled “The Business Combination—Interests of FVAC’s Directors and Officers in the Business Combination” beginning on page 111 of this proxy statement/consent solicitation/prospectus.

The Insiders will control the election of FVAC’s Board until consummation of FVAC’s initial business combination and will hold a substantial interest in FVAC. As a result, the Insiders may exert a substantial influence on actions requiring a stockholder vote.

Upon the closing of FVAC’s IPO, the Insiders owned approximately 20% of the outstanding shares of FVAC Common Stock. In addition, the Founder Shares, all of which are held by the Insiders, entitle such holders

 

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to elect all of FVAC’s directors prior to its initial business combination. Public stockholders of FVAC Common Stock will have no right to vote on the election of directors during such time. In addition, as a result of their substantial ownership in FVAC, the Insiders may exert substantial influence on other actions requiring a stockholder vote, potentially in a manner that FVAC public stockholders do not support, including amendments to FVAC’s current charter or current bylaws and approval of the Business Combination.

Currently, FVAC’s Board is not composed of a majority of directors that are independent from the Sponsor.

As a newly public company, FVAC’s Board is not currently composed of a majority of directors that are independent from the Sponsor as permitted by the transition period provided under NYSE listing rules. Accordingly, should the interests of the Sponsor differ from those of other FVAC stockholders, the other FVAC stockholders may not have the same protections afforded to stockholders of companies with a majority independent board that are subject to all of the corporate governance rules for publicly-listed companies.

The Business Combination will result in changes to the board of directors of MPMC that may affect the strategy of MPMC.

If the parties complete the Business Combination, the composition of MPMC Board will change from the current FVAC Board. The board of directors of MPMC will consist of James H. Litinsky, Randall Weisenburger, Daniel Gold, Andrew McKnight, General (Retired) Richard B. Myers, Maryanne R. Lavan and Connie K. Duckworth. This new composition of the MPMC Board may affect the business strategy and operating decisions of MPMC upon the completion of the Business Combination.

The Merger Agreement contains provisions that may discourage FVAC from seeking an alternative business combination.

The Merger Agreement contains provisions that prohibit FVAC from seeking alternative business combinations during the pendency of the Business Combination. Further, if FVAC is unable to obtain the requisite approval of its stockholders, either party may terminate the Merger Agreement.

The unaudited pro forma condensed combined financial information included in this proxy statement/consent solicitation/prospectus is preliminary and the actual financial condition and results of operations after the Business Combination may differ materially.

The unaudited pro forma condensed combined financial information for MPMC following the Business Combination in this proxy statement/consent solicitation/prospectus is presented for illustrative purposes only and is not necessarily indicative of what our actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See “Unaudited Pro Forma Condensed Combined Financial Information” beginning on page 150 of this proxy statement/consent solicitation/prospectus.

FVAC and the Companies will incur transaction costs in connection with the Business Combination.

Each of FVAC and the Companies has incurred and expects that it will incur significant, non-recurring costs in connection with consummating the Business Combination. The Companies may also incur additional costs to retain key employees. FVAC and the Companies will also incur significant legal, financial advisor, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the Business Combination. FVAC estimates that it will incur approximately $12.1 million in deferred underwriting fees and $11.4 million in transaction costs. The Companies estimate that they will incur approximately $17.3 million in transaction costs associated with the Business Combination. Some of these costs are payable regardless of whether the Business Combination is completed. See “The Business Combination —Terms of the Business Combination” beginning on page 86 of this proxy statement/consent solicitation/prospectus.

 

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The Companies’ unitholders will have their rights as stockholders governed by MPMC’s organizational documents.

As a result of the completion of the Business Combination, the Companies’ unitholders will become holders of shares of MPMC Class A common stock, which will be governed by MPMC’s organizational documents. As a result, there will be differences between the rights currently enjoyed by the Companies’ unitholders and the rights they will have as stockholders of MPMC. See “Comparison of Stockholders’ Rights” beginning on page 269 of this proxy statement/consent solicitation/prospectus.

The Sponsor has agreed to vote in favor of the proposals at the FVAC Special Meeting, regardless of how public stockholders vote.

As of the date hereof, the Founder Shares owned by FVAC’s Insiders represent approximately 20% of the voting power of the outstanding FVAC Common Stock. Pursuant to the Parent Sponsor Letter Agreement, the Insiders have agreed to vote their Founder Shares and any public shares held by them in favor of each of the proposals at the FVAC Special Meeting, regardless of how public stockholders vote. Accordingly, the agreement by the Insiders to vote in favor of each of the proposals at the FVAC Special Meeting will increase the likelihood that FVAC will receive the requisite stockholder approval for the Business Combination and the transactions contemplated thereby.

If FVAC’s due diligence investigation of the business of the Companies was inadequate, then stockholders of MPMC following the Business Combination could lose some or all of their investment.

Even though FVAC conducted a due diligence investigation of the business of the Companies, FVAC cannot be sure that this diligence uncovered all material issues that may be present inside the business of the Companies, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the business of the Companies and outside of its control will not later arise.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of MPMC’s income or other tax returns could adversely affect MPMC’s financial condition and results of operations.

MPMC will be subject to income taxes in the United States, and MPMC’s domestic tax liabilities will be subject to the allocation of expenses in differing jurisdictions. MPMC’s future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

 

   

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

 

   

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

 

   

tax effects of stock-based compensation;

 

   

costs related to intercompany restructurings;

 

   

changes in tax laws, regulations or interpretations thereof; and

 

   

lower than anticipated future earnings in jurisdictions where MPMC has lower statutory tax rates and higher than anticipated future earnings in jurisdictions where MPMC has higher statutory tax rates.

In addition, MPMC may be subject to audits of MPMC’s income, sales and other taxes by U.S. federal, state, local and non-U.S. taxing authorities. Outcomes from these audits could have an adverse effect on MPMC’s financial condition and results of operations.

 

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Additional Risks Relating to Ownership of MPMC Class A Common Stock Following the Business Combination

MPMC’s stock price may change significantly following the Business Combination and you could lose all or part of your investment as a result.

The trading price of the MPMC Class A common stock is likely to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate to the operating performance of particular companies. You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “—Risks Relating to the Companies’ Business and Industry” and the following:

 

   

results of operations that vary from the expectations of securities analysts and investors;

 

   

changes in expectations as to MPMC’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

 

   

declines in the market prices of stocks generally;

 

   

strategic actions by MPMC or its competitors;

 

   

announcements by MPMC or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments;

 

   

any significant change in MPMC’s management;

 

   

changes in general economic or market conditions or trends in MPMC’s industry or markets;

 

   

changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to MPMC’s business;

 

   

future sales of MPMC’s common stock or other securities;

 

   

investor perceptions or the investment opportunity associated with MPMC’s common stock relative to other investment alternatives;

 

   

the public’s response to press releases or other public announcements by MPMC or third parties, including MPMC’s filings with the SEC;

 

   

litigation involving MPMC, MPMC’s industry, or both, or investigations by regulators into MPMC’s operations or those of MPMC’s competitors;

 

   

guidance, if any, that MPMC provides to the public, any changes in this guidance or MPMC’s failure to meet this guidance;

 

   

the development and sustainability of an active trading market for MPMC’s stock;

 

   

actions by institutional or activist stockholders;

 

   

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

 

   

other events or factors, including those resulting from natural disasters, war, acts of terrorism, health pandemics or responses to these events.

These broad market and industry fluctuations may adversely affect the market price of MPMC’s Class A common stock, regardless of MPMC’s actual operating performance. In addition, price volatility may be greater if the public float and trading volume of MPMC’s Class A common stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If MPMC was involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from MPMC’s business regardless of the outcome of such litigation.

 

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Because there are no current plans to pay cash dividends on MPMC’s Class A common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

MPMC intends to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of MPMC Class A common stock will be at the sole discretion of MPMC’s board of directors. MPMC’s board of directors may take into account general and economic conditions, MPMC’s financial condition and results of operations, MPMC’s available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by MPMC to its stockholders or by its subsidiaries to it and such other factors as MPMC’s board of directors may deem relevant. In addition, MPMC’s ability to pay dividends may be limited by covenants of any future indebtedness MPMC incurs. As a result, you may not receive any return on an investment in MPMC’s Class A common stock unless you sell MPMC’s Class A common stock for a price greater than that which you paid for it.

If securities analysts do not publish research or reports about MPMC’s business or if they downgrade MPMC’s stock or MPMC’s sector, MPMC’s stock price and trading volume could decline.

The trading market for MPMC’s Class A common stock will rely in part on the research and reports that industry or financial analysts publish about MPMC or its business. MPMC will not control these analysts. In addition, some financial analysts may have limited expertise with the Companies’ model and operations. Furthermore, if one or more of the analysts who do cover MPMC downgrade its stock or industry, or the stock of any of its competitors, or publish inaccurate or unfavorable research about its business, the price of MPMC’s stock could decline. If one or more of these analysts ceases coverage of MPMC or fails to publish reports on it regularly, MPMC could lose visibility in the market, which in turn could cause its stock price or trading volume to decline.

Future sales, or the perception of future sales, by MPMC or its stockholders in the public market following the Business Combination could cause the market price for MPMC’s Class A common stock to decline.

The sale of shares of MPMC’s Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of MPMC’s Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for MPMC to sell equity securities in the future at a time and at a price that it deems appropriate.

Upon consummation of the Business Combination, MPMC will have a total of approximately 147.3 million shares of MPMC Class A common stock (assuming no redemptions) outstanding. All shares issued in the Business Combination other than shares issued in connection with the PIPE Investment or the Parent Sponsor Warrant Exchange Agreement will be freely tradable without registration under the Securities Act and without restriction by persons other than MPMC’s “affiliates” (as defined under Rule 144 of the Securities Act, “Rule 144”), including MPMC’s directors, executive officers and other affiliates.

In connection with the Business Combination, certain holders of the Companies’ units and the Insiders have each agreed with FVAC, subject to certain exceptions, not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of MPMC Class A common stock during the period from the date of the closing of the Business Combination continuing through the date (i) in the case of MPMC Class A common stock of the New Holders other the JHL Holders (as each such term is defined in the A&R RRA), 180 days after the closing date of the Business Combination or (ii) in the case of MPMC Class A common stock of the Insiders and of the JHL Holders, one year after the closing date of the Business Combination. See “Related Agreements—Amended and Restated Registration Rights Agreement” beginning on page 144 of this proxy statement/consent solicitation/prospectus for a description of these lock-up arrangements.

Upon the expiration or waiver of the lock-ups described above, shares held by the Insiders and certain other stockholders of MPMC will be eligible for resale, subject to volume, manner of sale and other limitations under

 

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Rule 144. In addition, pursuant to the A&R RRA, the Insiders and certain other stockholders will have the right, subject to certain conditions, to require MPMC to register the sale of their shares of MPMC’s Class A common stock under the Securities Act. By exercising their registration rights and selling a large number of shares, these stockholders could cause the prevailing market price of MPMC’s Class A common stock to decline. Following completion of the Business Combination, the shares covered by registration rights could represent over 66% of MPMC’s outstanding common stock.

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of shares of MPMC’s Class A common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for MPMC to raise additional funds through future offerings of MPMC’s shares of MPMC Class A common stock or other securities.

In addition, the shares of MPMC’s Class A common stock reserved for future issuance under MPMC’s equity incentive plans will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable. Assuming no redemptions, the aggregate number of shares of MPMC’s Class A Common Stock expected to be reserved for future issuance under its equity incentive plans will be 9,653,671, which represents 6.0% of the issued and outstanding shares of MPMC Class A common stock, on a fully diluted basis, immediately following consummation of the Business Combination. The compensation committee of MPMC’s board of directors may determine the exact number of shares to be reserved for future issuance under its equity incentive plans at its discretion. MPMC is expected to file one or more registration statements on Form S-8 under the Securities Act to register shares of MPMC’s Class A common stock or securities convertible into or exchangeable for shares of MPMC’s Class A common stock issued pursuant to MPMC’s equity incentive plans. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market.

In the future, MPMC may also issue its securities in connection with investments or acquisitions. The amount of shares of MPMC’s Class A common stock issued in connection with an investment or acquisition could constitute a material portion of MPMC’s then-outstanding shares of MPMC Class A common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to MPMC’s stockholders.

Anti-takeover provisions in MPMC’s organizational documents could delay or prevent a change of control.

Certain provisions of MPMC’s Second Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws to become effective upon the consummation of the Business Combination may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by MPMC’s stockholders.

These provisions provide for, among other things:

 

   

there is no cumulative voting with respect to the election of the MPMC Board;

 

   

the division of the MPMC Board into three classes, with only one class of directors being elected in each year;

 

   

the ability of MPMC’s board of directors to issue one or more series of preferred stock;

 

   

advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at MPMC’s annual meetings;

 

   

certain limitations on convening special stockholder meetings;

 

   

limiting the ability of stockholders to act by written consent;

 

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the ability of the MPMC Board to fill a vacancy created by the expansion of the board of directors or the resignation, death, or removal of a director in certain circumstances;

 

   

providing that MPMC’s board of directors is expressly authorized to make, alter or repeal MPMC’s bylaws;

 

   

the removal of directors only for cause; and

 

   

that certain provisions may be amended only by the affirmative vote of at least 66.7% of the shares of MPMC Class A common stock entitled to vote generally in the election of MPMC directors.

These anti-takeover provisions could make it more difficult for a third party to acquire MPMC, even if the third-party’s offer may be considered beneficial by many of MPMC’s stockholders. As a result, MPMC’s stockholders may be limited in their ability to obtain a premium for their shares. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause MPMC to take other corporate actions you desire. See “Description of Securities—Certain Anti-Takeover Provisions of Delaware Law, FVAC’s Certificate of Incorporation and Bylaws” beginning on page 262 of this proxy statement/consent solicitation/prospectus.

FVAC’s Second Amended and Restated Certificate of Incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by MPMC’s stockholders, which could limit MPMC’s stockholders’ ability to obtain a favorable judicial forum for disputes with MPMC or its directors, officers, employees or stockholders.

The Second Amended and Restated Certificate of Incorporation will provide that, subject to limited exceptions, any (i) derivative action or proceeding brought on behalf of MPMC, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to MPMC or its stockholders, (iii) action asserting a claim arising pursuant to any provision of the DGCL or FVAC’s Second Amended and Restated Certificate of Incorporation or FVAC’s Amended and Restated Bylaws or (iv) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware. The Second Amended and Restated Certificate of Incorporation will also provide that, to the fullest extent permitted by law, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the United States federal securities laws, including the Securities Act and the Exchange Act. Additionally, investors cannot waive MPMC’s compliance with federal securities laws and the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in shares of MPMC’s capital stock shall be deemed to have notice of and to have consented to the provisions of MPMC’s certificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with MPMC or its directors, officers or other employees, which may discourage such lawsuits against MPMC and its directors, officers and employees. There is uncertainty as to whether a court would enforce such an exclusive forum provision with respect to claims under the Securities Act. If a court were to find these provisions of FVAC’s Second Amended and Restated Certificate of Incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, MPMC may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect MPMC’s business and financial condition.

Affiliates of JHL Capital Group will control MPMC, and their interests may conflict with MPMC’s or yours in the future.

Immediately following the closing of the Business Combination, affiliates of JHL Capital Group will beneficially own between approximately 39.1% (assuming there are no redemptions of public shares) and 51.1% (assuming all public shares are redeemed) of MPMC’s Class A common stock. For so long as JHL Capital Group

 

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continues to beneficially own a significant percentage of MPMC’s Class A common stock, JHL Capital Group will still be able to significantly influence the composition of MPMC’s board of directors and the approval of actions requiring stockholder approval. Accordingly, for such period of time, JHL Capital Group will have significant influence with respect to MPMC’s management, business plans and policies, including the appointment and removal of MPMC’s officers. In particular, for so long as JHL Capital Group continues to beneficially own a significant percentage of MPMC’s Class A common stock, JHL Capital Group will be able to cause or prevent a change of control of MPMC or a change in the composition of MPMC’s board of directors and could preclude any unsolicited acquisition of MPMC. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of common stock as part of a sale of MPMC and ultimately might affect the market price of MPMC’s Class A common stock. In addition, JHL Capital Group may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you. For example, JHL Capital Group could cause MPMC to make acquisitions that increase MPMC’s indebtedness or cause MPMC to sell revenue-generating assets. In certain circumstances, acquisitions of debt at a discount by purchasers that are related to a debtor can give rise to cancellation of indebtedness income to such debtor for U.S. federal income tax purposes. So long as JHL Capital Group continues to beneficially own a significant amount of MPMC’s combined voting power, even if such amount is less than 50%, JHL Capital Group will continue to be able to strongly influence or effectively control MPMC’s decisions.

Notwithstanding JHL Capital Group’s control of or substantial influence over MPMC, MPMC may from time to time enter into transactions with JHL Capital Group and its affiliates, or enter into transactions in which JHL Capital Group or its affiliates otherwise have a direct or indirect material interest. In connection with the Business Combination, MPMC expects to adopt a formal written policy for the review and approval of transactions with related persons. A description of certain transactions FVAC entered into with JHL Capital Group and its affiliates in connection with the execution of the Merger Agreement, as well as a description of the policy MPMC expects to adopt with respect to the approval or ratification of transactions in which related persons, such as JHL Capital Group and its affiliates, have a direct or indirect material interest is included in this proxy statement/consent solicitation/prospectus. For more information, see “Certain Relationships and Related Party Transactions—Certain Relationships and Related Person Transactions—Companies” beginning on page 289 of this proxy statement/consent solicitation/prospectus.

Certain of MPMC’s stockholders, including JHL Capital Group, the Sponsor and the QVT Holders, and any affiliates thereof, may engage in business activities which compete with MPMC or otherwise conflict with MPMC’s interests.

JHL Capital Group, the Sponsor, the QVT Holders and their affiliates are in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with MPMC.

The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies.

FVAC qualifies as an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, which we refer to as the “JOBS Act.” As such, following the consummation of the Business Combination, MPMC will take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies for as long as it continues to be an emerging growth company, including (i) the exemption from the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, (ii) the exemptions from say-on-pay, say-on-frequency and say-on-golden parachute voting requirements and (iii) reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements. As a result, MPMC’s stockholders may not have access to certain information they deem

 

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important. MPMC will remain an emerging growth company until the earliest of (i) the last day of the fiscal year (a) following May 4, 2024, the fifth anniversary of the closing of FVAC’s IPO, (b) in which MPMC has total annual gross revenue of at least $1.07 billion or (c) in which MPMC is deemed to be a large accelerated filer, which means the market value of MPMC Class A common stock that are held by non-affiliates exceeds $700 million as of the last business day of MPMC’s prior second fiscal quarter, and (ii) the date on which MPMC has issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the exemption from complying with new or revised accounting standards provided in Section 7(a)(2)(B) of the Securities Act as long as MPMC is an emerging growth company. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies, but any such election to opt out is irrevocable. MPMC has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, MPMC, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of MPMC’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

FVAC cannot predict if investors will find MPMC Class A common stock less attractive because MPMC will rely on these exemptions. If some investors find MPMC Class A common stock less attractive as a result, there may be a less active trading market for MPMC Class A common stock and MPMC’s stock price may be more volatile.

Transformation of the Companies into a listed public company will increase its costs and may disrupt the regular operations of its business.

The Companies have operated as a privately owned company and expect to incur additional legal, regulatory, finance, accounting, investor relations and other administrative expenses as a result of having publicly traded common stock. In addition, while the Companies are currently in compliance with portions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Companies will be required under the Sarbanes-Oxley Act, as well as rules adopted by the SEC and the NYSE, to implement specified corporate governance practices that currently do not apply to either of the Companies as private companies.

MPMC will be required to ensure that it has the ability to prepare financial statements on a timely basis that fully comply with all SEC reporting requirements and maintain effective internal controls over financial reporting.

The additional demands associated with being a public company may disrupt regular operations of MPMC’s business by diverting the attention of some of its senior management team away from revenue producing activities to management and administrative oversight, adversely affecting MPMC’s ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing MPMC’s businesses. In addition, failure to comply with any laws or regulations applicable to MPMC as a public company may result in legal proceedings and/or regulatory investigations, and may cause reputational damage. Any of these effects could harm MPMC’s business, financial condition and results of operations.

 

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As private companies, the Companies were not required to document and test their internal controls over financial reporting. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm MPMC’s operating results or cause MPMC to fail to meet our reporting obligations.

As private companies, the Companies were not required to document and test their internal controls over financial reporting nor was their management required to certify the effectiveness of their internal controls and their auditors were not required to opine on the effectiveness of their internal control over financial reporting. Effective internal controls will be necessary for MPMC to provide reliable financial reports, prevent fraud and operate successfully as a public company. If MPMC cannot provide reliable financial reports or prevent fraud, its reputation and operating results would be harmed. MPMC cannot be certain that its efforts to develop and maintain its internal controls will be successful, that it will be able to maintain adequate controls over our financial processes and reporting in the future or that it will be able to comply with our obligations under Section 404 of the Sarbanes Oxley Act of 2002. Any failure to develop or maintain effective internal controls, or difficulties encountered in implementing or improving our internal controls, could harm MPMC’s operating results or cause MPMC to fail to meet our reporting obligations. For example, MPMO identified a material weakness in its internal controls over financial reporting in that, as of December 31, 2019, it did not have sufficient resources with the appropriate level of experience in U.S. GAAP and financial reporting. Ineffective internal controls could also cause investors to lose confidence in our reported financial information, which would likely have a negative effect on the trading price of our common stock.

Risks Relating to Redemption

There is no guarantee that a FVAC public stockholder’s decision whether to redeem their public shares for a pro rata portion of the Trust Account will put such stockholder in a better future economic position.

No assurance can be given as to the price at which a public stockholder may be able to sell the shares of MPMC Class A common stock in the future following the completion of the Business Combination. Certain events following the consummation of any business combination, including the Business Combination, may cause an increase in MPMC’s stock price, and may result in a lower value realized now than a FVAC public stockholder might realize in the future had the FVAC public stockholder not elected to redeem such stockholder’s public shares. Similarly, if a FVAC public stockholder does not redeem his, her or its shares, such FVAC public stockholder will bear the risk of ownership of MPMC Class A common stock after the consummation of the Business Combination, and there can be no assurance that a FVAC public stockholder can sell his, her or its shares of MPMC Class A common stock in the future for a greater amount than the redemption price set forth in this proxy statement/consent solicitation/prospectus. A FVAC public stockholder should consult his, her or its own tax and/or financial advisor for assistance on how this may affect its individual situation.

If FVAC public stockholders fail to comply with the redemption requirements specified in this proxy statement/consent solicitation/prospectus, they will not be entitled to redeem their public shares for a pro rata portion of the funds held in the Trust Account.

To exercise their redemption rights, holders are required to deliver their stock, either physically or electronically using Depository Trust Company’s DWAC System, to FVAC’s transfer agent. If a holder properly seeks redemption as described in this proxy statement/consent solicitation/prospectus and the Business Combination is consummated, FVAC will redeem these shares for a pro rata portion of funds deposited in the Trust Account and the holder will no longer own such shares following the Business Combination. See the section entitled “Special Meeting of FVAC StockholdersRedemption Rights” beginning on page 82 of this proxy statement/consent solicitation/prospectus for additional information on how to exercise your redemption rights.

 

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FVAC does not have a specified maximum redemption threshold. The absence of such a redemption threshold may make it possible for FVAC to complete the Business Combination with which a substantial majority of FVAC’s stockholders do not agree.

FVAC’s current charter does not provide a specified maximum redemption threshold, except that FVAC will not redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Minimum Cash Condition to the respective obligations of the parties is for the sole benefit of the parties thereto, as such the closing of the Business Combination could occur if FVAC maintains at least $5,000,001 of net tangible assets. As a result, FVAC may be able to complete the Business Combination even though a substantial portion of FVAC’s public stockholders do not agree with the Business Combination and have redeemed their public shares.

If third parties bring claims against FVAC, the proceeds held in the Trust Account could be reduced and the per-share redemption amount received by stockholders may be less than $10.00 per share.

FVAC’s placing of funds in the Trust Account may not protect those funds from third-party claims against it. Although FVAC seeks to have all vendors, service providers (other than FVAC’s independent auditors), prospective target businesses or other entities with which FVAC does business execute agreements with it waiving any right, title, interest or claim of any kind in or to any funds held in the Trust Account for the benefit of public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against FVAC’s assets, including the funds held in the Trust Account. If any third party refuses to execute an agreement waiving such claims to the funds held in the Trust Account, FVAC’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to it than any alternative. If any third party refuses to execute an agreement waiving such claims to the funds held in the Trust Account, FVAC’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third-party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to it than any alternative.

Examples of possible instances where FVAC may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with FVAC and will not seek recourse against the Trust Account for any reason. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with FVAC and will not seek recourse against the Trust Account for any reason. Upon redemption of public shares, if FVAC is unable to complete the Business Combination within the prescribed timeframe, or upon the exercise of a redemption right in connection with the Business Combination, FVAC will be required to provide for payment of claims of creditors that were not waived that may be brought against it within the ten years following redemption. Accordingly, the per-share redemption amount received by public stockholders could be less than the $10.00 per share initially held in the Trust Account, due to claims of such creditors. The Sponsor has agreed that it will be liable to FVAC if and to the extent any claims by a third party (other than FVAC’s independent auditor) for services rendered or products sold to FVAC, or a prospective target business with which FVAC has discussed entering into a business combination agreement, reduce the amount of funds in the Trust Account to below (i) $10.00 per public share or (ii) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party who executed a waiver

 

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of any and all rights to seek access to the Trust Account and except as to any claims under indemnity of the underwriters of FVAC’s IPO against certain liabilities, including liabilities under the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third party claims. FVAC has not independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and FVAC has not asked the Sponsor to reserve for such indemnification obligations.

FVAC directors may decide not to enforce the indemnification obligation of the Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to public stockholders.

In the event that the proceeds in the Trust Account are reduced below (i) $10.00 per share or (ii) such lesser amount per share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and the Sponsor asserts that it is unable to satisfy its indemnification obligations or that it has no indemnification obligations related to a particular claim, FVAC’s independent directors would determine whether to take legal action against the Sponsor to enforce its indemnification obligations. While FVAC currently expects that its independent directors would take legal action on FVAC’s behalf against the Sponsor to enforce its indemnification obligations to us, it is possible that FVAC’s independent directors in exercising their business judgment and subject to FVAC’s fiduciary duties may choose not to do so in any particular instance. If FVAC’s independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to public stockholders may be reduced below $10.00 per share.

If you or a “group” of stockholders of which you are a part are deemed to hold an aggregate of more than 15% of the public shares, you (or, if a member of such a group, all of the members of such group in the aggregate) will lose the ability to redeem all such shares in excess of 15% of the public shares.

A public stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act), will be restricted from redeeming in the aggregate his, her or its public shares or, if part of such a group, the group’s public shares, in excess of 15% of the public shares. Your inability to redeem any such excess public shares could resulting in you suffering a material loss on your investment in FVAC if you sell such excess public shares in open market transactions. FVAC cannot assure you that the value of such excess public shares will appreciate over time following the Business Combination or that the market price of the public shares will exceed the per- share redemption price.

However, FVAC’s stockholders’ ability to vote all of their public shares (including such excess shares) for or against the Business Combination Proposal is not restricted by this limitation on redemption.

If a stockholder fails to receive notice of FVAC’s offer to redeem public shares of FVAC Class A common stock in connection with the Business Combination, or fails to comply with the procedures for tendering its shares, such shares of FVAC Class A common stock may not be redeemed.

If, despite FVAC’s compliance with the proxy rules, a public stockholder fails to receive FVAC proxy materials, such stockholder may not become aware of the opportunity to redeem its shares of FVAC Class A common stock. In addition, the proxy materials that FVAC is furnishing to holders of public shares of FVAC Class A common stock in connection with the Business Combination describe the various procedures that must be complied with in order to validly redeem public shares of FVAC Class A common stock. In the event that a stockholder fails to comply with these procedures, its shares of FVAC Class A common stock may not be redeemed.

 

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SPECIAL MEETING OF FVAC STOCKHOLDERS

This proxy statement/consent solicitation/prospectus is being provided to FVAC stockholders as part of a solicitation of proxies by the FVAC Board for use at the FVAC Special Meeting to be held on November 13, 2020, and at any adjournment or postponement thereof. This proxy statement/consent solicitation/prospectus contains important information regarding the FVAC Special Meeting, the proposals on which you are being asked to vote and information you may find useful in determining how to vote and voting procedures.

This proxy statement/consent solicitation/prospectus is being first mailed on or about October 27, 2020 to all stockholders of record of FVAC as of October 12, 2020, the record date for the FVAC Special Meeting. Stockholders of record who owned shares of FVAC Common Stock at the close of business on the FVAC record date are entitled to receive notice of, attend and vote at the FVAC Special Meeting. On the FVAC record date, there were 43,125,000 shares of FVAC Common Stock outstanding.

Date, Time and Place of FVAC Special Meeting

The FVAC Special Meeting will be held exclusively via a live webcast at www.virtualshareholdermeeting.com/FVAC2020, on November 13, 2020 at 9:00 a.m., Eastern Time. To participate in the virtual meeting, an FVAC stockholder of record will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. The FVAC Special Meeting webcast will begin promptly at 9:00 a.m., Eastern Time. FVAC stockholders are encouraged to access the FVAC Special Meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

Voting Power; Record Date

As a stockholder of FVAC, you have a right to vote on the matters presented at the FVAC Special Meeting, which are summarized above and fully set forth in this proxy statement/consent solicitation/prospectus. You will be entitled to vote or direct votes to be cast at the FVAC Special Meeting if you owned FVAC Common Stock at the close of business on October 12, 2020, which is the record date for the FVAC Special Meeting. You are entitled to one vote for each share of FVAC Common Stock that you owned as of the close of business on the FVAC 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 FVAC record date, there were 43,125,000 shares of FVAC Common Stock outstanding, of which 34,500,000 are shares of FVAC Class A common stock and 8,625,000 are shares of FVAC Class F common stock held by the Insiders.

Proposals at the FVAC Special Meeting

At the FVAC Special Meeting, FVAC stockholders will vote on the following proposals:

 

   

Proposal No. 1—The Business Combination Proposal: To consider and vote upon a proposal to approve the Merger Agreement and approve the transactions contemplated thereby;

The Charter Proposals: To consider and vote upon the following six (6) proposals to approve, assuming the Business Combination Proposal and the NYSE Issuance Proposal are approved and adopted:

 

   

Proposal No. 2—To consider and vote upon an amendment to FVAC’s current charter to approve the increase of the total number of authorized shares of all classes of capital stock from 221,000,000 shares to 500,000,000, consisting of (a) 450,000,000 shares of MPMC Class A common stock and (b) 50,000,000 shares of preferred stock;

 

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Proposal No. 3—To consider and vote upon an amendment to FVAC’s current charter that the MPMC Board be divided into three classes, with only one class of directors being elected each year and members of each class (except for those directors appointed to Class I and Class II in connection with the Business Combination) serving a three-year term, and to make certain related changes;

 

   

Proposal No. 4—To consider and vote upon an amendment to FVAC’s current charter that MPMC will not be governed by Section 203 of the DGCL and, instead, will be governed under a provision that is substantially similar to Section 203 of the DGCL, but excludes the Sponsor, JHL Capital Group and any Exempt Transferee (as defined in the proposed charter) and their respective affiliates or successors or any “group”, or any member of any such group, to which such persons are a party from the definition of “interested stockholder,” and to make certain related changes;

 

   

Proposal No. 5—To consider and vote upon an amendment to FVAC’s current charter to include an exclusive forum provision adopting the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation other than respect to any complaint asserting a cause of action arising under the United States federal securities laws for which the federal courts of the United States of America will be the exclusive jurisdiction under the Second Amended and Restated Certificate of Incorporation to the fullest extent permitted by law;

 

   

Proposal No. 6—To consider and vote upon an amendment to FVAC’s current charter to require that any amendments relating to Article V (Board of Directors) may only be amended, in addition to any vote required by applicable law, by the affirmative vote of the holders of at least 66.7% of the voting power of all the then-outstanding shares of stock of MPMC entitled to vote in the election of directors, voting together as a single class.

 

   

Proposal No. 7—To consider and vote upon an amendment to FVAC’s current charter to authorize all other proposed changes, including, among other things, (i) changing the post-Business Combination corporate name from “Fortress Value Acquisition Corp.” to “MP Materials Corp.” and removing certain obsolete provisions relating to FVAC’s status as a blank check company, such as its purpose of effecting a business combination and the establishment of a Trust Account and stockholder redemption rights, and the FVAC Class F common stock, such as conversion and voting rights related thereto, that will no longer apply upon consummation of the Business Combination, or (ii) administrative or clarifying revisions, including (a) providing that the number of authorized shares of any class or classes of stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of at least a majority of the voting power of stock entitled to vote thereon, and (b) the removal of language without substantive effect.

We refer to Proposals No. 2—7 collectively as the “Charter Proposals”;

 

   

Proposal No. 8—The NYSE Issuance Proposal: To consider and vote upon a proposal for purposes of complying with applicable provisions of Rule 312.03 of the NYSE Listed Company Manual, to approve (i) the issuance of more than twenty percent (20%) of FVAC’s currently issued and outstanding FVAC Common Stock in connection with the Business Combination, and (ii) the issuance of more than one percent (1%) of FVAC’s currently issued and outstanding FVAC Common Stock to a Related Party (as defined in Rule 312.03 of the NYSE Listed Company Manual) in connection with the Business Combination;

 

   

Proposal No. 9—The Director Election Proposal: To consider and vote upon a proposal to elect seven directors to serve staggered terms on the FVAC Board until immediately following the 2021, 2022 and 2023 annual meetings of FVAC stockholders, as applicable, and until their respective successors are duly elected and qualified, subject to their earlier death, resignation or removal; and

 

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Proposal No. 10—The Incentive Plan Proposal: To consider and vote upon a proposal to approve and adopt the Long Term 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 proxy statement/consent solicitation/prospectus as Annex K.

THE FVAC BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THESE PROPOSALS.

Vote of FVAC’s Sponsor, Directors and Officers

The Insiders, including the Sponsor, have agreed to vote their Founder Shares and any public shares held by them in favor of the Business Combination Proposal and all other proposals presented to FVAC stockholders in this proxy statement/consent solicitation/prospectus. Currently, the Insiders own approximately 20% of the issued and outstanding FVAC Common Stock, including all of the outstanding Founder Shares.

The Insiders have waived any redemption rights, including with respect to any shares of FVAC Class A common stock purchased in FVAC’s IPO or in the aftermarket, in connection with the Business Combination.

Quorum and Required Vote for Proposals for the FVAC Special Meeting

A quorum of FVAC’s stockholders is necessary to hold a valid meeting. A quorum will be present at the FVAC Special Meeting if holders of a majority in voting power of FVAC Common Stock issued and outstanding and entitled to vote at the FVAC Special Meeting is present virtually or represented by proxy. Abstentions and broker non-votes will count as present for the purposes of establishing a quorum at the FVAC Special Meeting.

The approval of each of the Business Combination Proposal, the NYSE Issuance Proposal, and the Incentive Plan Proposal requires the affirmative vote of majority of the votes cast by holders of the outstanding shares of FVAC Common Stock represented virtually or by proxy at the FVAC Special Meeting and entitled to vote thereon. If a valid quorum is established, a stockholder’s failure to vote by proxy or virtually at the FVAC 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 Insiders have agreed to vote their Founder Shares and any public shares they may hold in favor of the Business Combination. Currently, the Insiders own approximately 20% of the issued and outstanding FVAC 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 the outstanding shares of FVAC Common Stock entitled to vote thereon at the FVAC Special Meeting. Accordingly, if a valid quorum is otherwise established, a stockholder’s failure to vote by proxy or virtually at the FVAC Special Meeting, as well as an abstention from voting and a broker non-vote with regard to the Charter Proposals, will each have the same effect as a vote “AGAINST” such Charter Proposals.

Approval of the Director Election Proposal requires the affirmative vote (virtually or by proxy) of holders of a plurality of the votes cast by holders of outstanding shares of FVAC Common Stock entitled to vote thereon at the FVAC Special Meeting, voting as a single class. Failure to vote by proxy or to vote virtually at the FVAC Special Meeting or an abstention from voting will have no effect on the outcome of the vote on the Director Election Proposal. Proxies will have full discretion to cast votes for other persons in the event that any nominee is unable to serve. Failure to vote by proxy or to vote virtually at the FVAC Special Meeting, abstentions and broker non-votes will have no effect on the vote for the Director Election Proposal.

The transactions contemplated by the Merger Agreement are conditioned upon the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal, the Director Election Proposal and

 

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the Incentive Plan Proposal at the FVAC Special Meeting. It is important for you to note that in the event that the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal, and the Director Election Proposal do not receive the requisite vote for approval, we will not consummate the Business Combination.

Recommendation to FVAC’s Stockholders

The FVAC Board believes that each of the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal, the Director Election Proposal, and the Incentive Plan Proposal to be presented at the FVAC Special Meeting is in the best interests of FVAC and FVAC stockholders and recommends that its stockholders vote “FOR” each of the proposals.

When you consider the recommendation of the FVAC Board in favor of approval of the Business Combination Proposal, you should keep in mind that the Sponsor and certain members of the FVAC Board and officers have interests in the Business Combination that may be different from or in addition to (or which may conflict with) your interests as a stockholder. Stockholders should take these interests into account in deciding whether to approve the proposals presented at the FVAC Special Meeting, including the Business Combination Proposal. These interests include, among other things:

 

   

the fact that the FVAC Board is not comprised of a majority of independent directors, and that the Sponsor, who will hold a controlling interest in FVAC until consummation of our initial business combination, will control the composition of the FVAC Board until consummation of our initial business combination;

 

   

the fact that the PIPE Investors, including the Sponsor, entered into Subscription Agreements for the purchase of an aggregate of 20,000,000 shares of FVAC Class A common stock at a purchase price of $10.00 per share, for an aggregate purchase price of $200,000,000, a pro rata portion of which shares will be issued to each PIPE Investor, including the Sponsor;

 

   

the fact that the Insiders have agreed not to redeem any of the outstanding Founder Shares in connection with the Business Combination Proposal;

 

   

the fact that the Sponsor paid an aggregate of $25,000 for the 8,625,000 outstanding Founder Shares for approximately $0.003 per share which, if valued based on the closing price of $14.32 per share on the NYSE on October 12, 2020, would be valued at approximately $123.5 million (after giving effect to the conversion of such shares into shares of FVAC Class A common stock);

 

   

the fact that the Insiders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to their Founder Shares;

 

   

the fact that the Sponsor paid an aggregate of $8,900,000 for 5,933,333 Private Placement Warrants, which, if valued based on the closing price of $3.64 per public warrant on the NYSE on October 12, 2020, would be valued at approximately $21.5 million, but may expire and become worthless if FVAC fails to complete a business combination;

 

   

the continued right of the Sponsor to hold MPMC Class A common stock and shares of MPMC Class A common stock to be issued to the Sponsor upon conversion of its Private Placement Warrants into 890,000 shares of FVAC Class F common stock in connection with the Business Combination, which FVAC Class F common stock shall convert into MPMC Class A common stock and will not be subject to any vesting restrictions in connection with the Business Combination;

 

   

the fact that if FVAC consummates the Business Combination, any amounts outstanding under any loan made by the Sponsor to FVAC, including the unsecured promissory note in an amount up to $300,000 issued to the Sponsor on January 31, 2020, will be repayable in cash, and if FVAC fails to complete a business combination there may be insufficient assets outside the Trust Account to satisfy such loan;

 

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the fact that if FVAC consummates the Business Combination, the Sponsor will (a) surrender to FVAC the Surrendered Shares, if applicable, for no consideration, (b) convert any remaining shares of FVAC Class F common stock into MPMC Class A common stock (subject to certain vesting and forfeiture provisions), and (c) exchange its Private Placement Warrants for additional shares of FVAC Class F common stock which will convert into MPMC Class A common stock;

 

   

the fact that in connection with the PIPE Investment and the consummation of the Business Combination, Sponsor will purchase 500,000 shares of FVAC Class A common stock for aggregate gross proceeds of $5,000,000;

 

   

the continued indemnification of FVAC’s existing directors and officers and the continuation of FVAC’s directors’ and officers’ liability insurance after the Business Combination;

 

   

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

 

   

the fact that, as described in Proposal No. 4, the current charter will be amended to exclude the Sponsor, JHL Capital Group and any Exempt Transferee (as defined in the proposed charter) and their respective affiliates or successors or any “group”, or any member of any such group, to which such persons are a party from the definition of “interested stockholder,” and to make certain related changes;

 

   

the fact that, as of the closing of the Business Combination, FVAC will enter into the A&R RRA with the A&R RRA Parties, which provides for certain demand, piggy-back and shelf registration rights to the A&R RRA Parties and their permitted transferees;

 

   

the anticipated election of Andrew McKnight as a director of MPMC; and

 

   

if the Trust Account is liquidated, including in the event FVAC is unable to complete an initial business combination within the required time period, Sponsor has agreed to indemnify FVAC to ensure that proceeds in the Trust Account are not reduced below $10.00 per public share, or such lesser per public share amount as is in the Trust Account on the liquidation date, by the claims of prospective target businesses with which FVAC has discussed entering into a transaction agreement or any third party (other than FVAC’s independent auditors) for services rendered or products sold to FVAC, but only if such third party or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

Abstentions and Broker Non-Votes

Abstentions are considered present for purposes of establishing a quorum. Abstentions will have the same effect as a vote “AGAINST” the Charter Proposals, but will have no effect on the Business Combination Proposal, the NYSE Issuance Proposal, the Director Election Proposal, or the Incentive Plan Proposal.

In general, if your shares are held in “street” name and you do not instruct your broker, bank or other nominee on a timely basis on how to vote your shares, your broker, bank or other nominee, in its sole discretion, may either leave your shares unvoted or vote your shares on routine matters, but not on any non-routine matters. The Business Combination Proposal, the Charter Proposals, the NYSE Share Issuance Proposal, the Director Election Proposal, and the Incentive Plan Proposal are considered non-routine matters. As such, without your voting instructions, your brokerage firm cannot vote your shares on any of the foregoing proposals to be voted on at the FVAC Special Meeting without your instruction.

Attending the FVAC Special Meeting; Voting Virtually at the Meeting

In light of on-going developments related to the coronavirus (COVID-19) and after careful consideration, the FVAC Board has determined to hold the special meeting virtually in order to facilitate stockholder attendance and participation by enabling stockholders to participate from any location and at no cost.

 

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To participate in the virtual special meeting, which we refer to as the “FVAC Special Meeting”, the FVAC stockholder will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. The FVAC Special Meeting webcast will begin promptly at 9:00 a.m., Eastern Time. FVAC stockholders are encouraged to access the FVAC Special Meeting prior to the start time. Online check-in will begin at 8:45 a.m., Eastern Time, and FVAC stockholders should allow ample time for the check-in procedures. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

FVAC stockholders will be able to attend the FVAC Special Meeting online, vote their shares electronically and submit questions during the FVAC Special Meeting by visiting www.virtualshareholdermeeting.com/FVAC2020. To submit questions, you will need the 16-digit control number included on their proxy card or instructions that accompanied their proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. The FVAC Board will try to answer as many stockholder-submitted questions as time permits that comply with the meeting rules of conduct. However, the FVAC Board reserves the right to edit profanity or other inappropriate language, or to exclude questions that are not pertinent to FVAC Special Meeting matters or that are otherwise inappropriate. If substantially similar questions are received, they will be grouped together, and a single response will be provided to avoid repetition.

Voting Your Shares—Stockholders of Record

If you are a FVAC stockholder of record, you may vote by mail or virtually at the FVAC Special Meeting. Each share of FVAC Common Stock that you own in your name entitles you to one vote on each of the proposals for the FVAC Special Meeting. Your one or more proxy cards show the number of shares of FVAC Common Stock that you own.

Voting By Mail, Internet or Phone. If you are a stockholder of record of FVAC as of the FVAC record date you may also submit your proxy before the FVAC Special Meeting in any of the following ways, if available:

 

   

Vote by Mail: by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope;

 

   

Vote by Internet: visit http://www.proxyvote.com, 24 hours a day, seven days a week, until 11:59 p.m. Eastern Time on November 12, 2020 (have your proxy card in hand when you visit the website); or

 

   

Vote by Phone: by calling toll-free (within the U.S. or Canada) 1-800-690-6903 (have your proxy card in hand when you call).

If your shares are held in “street name” through a broker, bank or other nominee, your broker, bank or other nominee will send you separate instructions describing the procedure for voting your shares. Simply complete, sign and date your voting instruction card and return it in the postage- paid envelope provided to ensure that your vote is counted. 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. Alternatively, you may vote by telephone or over the internet as instructed by your broker, bank or other nominee. “Street name” stockholders who wish to vote at the FVAC Special Meeting will need the 16- digit control number included on the instructions that accompanied your proxy materials, if applicable, or to obtain a proxy form from your broker, bank or other nominee. If you sign and return the proxy card but do not give instructions on how to vote your shares, your common shares will be voted as recommended by the FVAC Board. The FVAC Board recommends voting “FOR” the Business Combination Proposal, “FOR” the Charter Proposals, “FOR” the NYSE Share Proposal, “FOR” the Director Election Proposal, and “FOR” the Incentive Plan Proposal. Votes submitted by mail must be received prior to the closing of the polls.

 

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Voting Your Shares—Beneficial Owners

If your shares of FVAC Common Stock are held in an account at a brokerage firm, bank or other nominee, then you are the beneficial owner of shares of FVAC Common Stock held in “street name” and this proxy statement/consent solicitation/prospectus is being sent to you by that broker, bank or other nominee. The broker, bank or other nominee holding your account is considered to be the stockholder of record for purposes of voting at the FVAC Special Meeting. As a beneficial owner, you have the right to direct your broker, bank or other nominee regarding how to vote the shares of FVAC Common Stock in your account by following the instructions that the broker, bank or other nominee provides you along with this proxy statement/consent solicitation/prospectus. As a beneficial owner, if you wish to vote at the FVAC Special Meeting, you will need the 16-digit control number included on your proxy card or instructions that accompanied your proxy materials, if applicable, or to obtain a proxy form from their broker, bank or other nominee. Please see “Attending the FVAC Special Meeting? Voting Virtually at the Meeting” above for more details.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before the FVAC Special Meeting or at the FVAC Special Meeting webcast by doing any one of the following:

 

   

filing a notice with the corporate secretary of FVAC;

 

   

mailing a new, subsequently dated proxy card; or

 

   

by attending the FVAC Special Meeting webcast and electing to vote your shares electronically, as indicated above.

If you are a stockholder of record of FVAC and you choose to send a you must submit your notice of revocation or your new proxy to Fortress Value Acquisition Corp., 1345 Avenue of the Americas, 46th Floor, New York, New York 10105, and it must be received at any time before the vote is taken at the FVAC Special Meeting. Any proxy that you submitted may also be revoked by submitting a new proxy by mail, or online or by telephone, not later than 11:59 p.m. New York City time on November 12, 2020, or by voting electronically at the FVAC Special Meeting webcast. Simply attending the FVAC Special Meeting webcast will not revoke your proxy. If you have instructed a broker, bank or other nominee to vote your shares of FVAC Common Stock, you must follow the directions you receive from your broker, bank or other nominee in order to change or revoke your vote.

No Additional Matters

The FVAC Special Meeting has been called only to consider the approval of the Business Combination Proposal, the Charter Proposals, the NYSE Issuance Proposal, the Director Election Proposal, and the Incentive Plan Proposal. Other than procedural matters incident to the conduct of the FVAC Special Meeting no other matters may be considered at the FVAC Special Meeting if they are not included in this proxy statement/consent solicitation/prospectus, which serves as the notice of the FVAC Special Meeting.

Who Can Answer Your Questions About Voting

If you have any questions about how to vote or direct a vote in respect of your FVAC Common Stock, you may call FVAC’s proxy solicitor, contact D.F. King & Co., Inc., FVAC’s proxy solicitor, toll-free at (800) 870-0653 (banks and brokers call (212) 269-5550) or email at FVAC@dfking.com.

Redemption Rights

In accordance with FVAC’s current charter, a holder of FVAC public shares may request that FVAC redeem all or a portion of such stockholder’s public shares for cash if the Business Combination is consummated.

 

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Public stockholders may elect to redeem their public shares whether they vote for or against the Business Combination. If a public stockholder properly exercises its right to redeem its public shares and timely delivers its shares to the transfer agent, FVAC will redeem each redeeming stockholder’s public shares for a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, calculated as of two (2) business days prior to the consummation of the Business Combination, including interest not previously released to FVAC to pay its taxes, divided by the number of then issued and outstanding public shares.

In order to exercise your redemption rights, you must:

 

   

if you hold public units, separate the underlying FVAC public shares and FVAC public warrants;

 

   

prior to 5:00 p.m. Eastern Time on November 10, 2020 (two (2) business days before the FVAC Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your public shares for cash to the transfer agent, at the following address:

Continental Stock Transfer & Trust Company

1 State Street, 30th Floor

New York, NY 10004

Attn: Mark Zimkind

Email: mzimkind@continentalstock.com

and

 

   

deliver your FVAC public shares either physically or electronically through DTC’s DWAC system to the transfer agent at least two (2) business days before the FVAC Special Meeting. Stockholders seeking to exercise their redemption rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is FVAC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, FVAC does not have any control over this process and it may take longer than two weeks. Stockholders who hold their FVAC shares in street name will have to coordinate with their bank, broker or other nominee to have the FVAC shares certificated or delivered electronically. If you do not submit a written request and deliver your FVAC public shares as described above, your FVAC shares will not be redeemed.

Stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” are required to either tender their certificates to the transfer agent prior to the date set forth in these proxy materials or deliver their shares to the transfer agent electronically using Depository Trust Company’s (“DTC”) Deposit/Withdrawal At Custodian (“DWAC”) system, at such stockholder’s option. Any demand for redemption, once made, may be withdrawn at any time until the deadline for exercising redemption requests and thereafter, with our consent, until the vote is taken on the Business Combination. If you delivered your shares for redemption to our transfer agent and decide within the required timeframe not to exercise your redemption rights, you may request that our transfer agent return the shares (physically or electronically). The requirement for physical or electronic delivery prior to the FVAC Special Meeting ensures that a redeeming stockholder’s election to redeem is irrevocable once the Business Combination is approved.

Holders of outstanding public units must separate the underlying public shares and public warrants prior to exercising redemption rights with respect to the public shares.

If you hold public units registered in your own name, you must deliver the certificate for such public units to the transfer agent, with written instructions to separate such public units into public shares and public warrants. This must be completed far enough in advance to permit the mailing of the public share certificates back to you so that you may then exercise your redemption rights upon the separation of the public shares from the public units.

 

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If a broker, dealer, commercial bank, trust company or other nominee holds your public units, you must instruct such nominee to separate your public units. Your nominee must send written instructions by facsimile to the transfer agent. Such written instructions must include the number of public units to be split and the nominee holding such public units. Your nominee must also initiate electronically, using DTC’s DWAC system, a withdrawal of the relevant units and a deposit of an equal number of public shares and public warrants. This must be completed far enough in advance to permit your nominee to exercise your redemption rights upon the separation of the public shares from the public units. While this is typically done electronically on the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your public shares to be separated in a timely manner, you will likely not be able to exercise your redemption rights.

Each redemption of shares of FVAC Class A common stock by public stockholders will reduce the amount in the Trust Account, which held marketable securities with a fair value of approximately $345.0 million as of June 30, 2020. The Merger Agreement provides that FVAC’s and the Companies’ respective obligations to consummate the Business Combination are conditioned on, among other things, satisfaction or waiver of the Minimum Cash Condition. This condition to the respective obligations of the parties is for the sole benefit of the parties thereto and may be waived by such parties. If, as a result of redemptions of FVAC public shares by public stockholders, this condition is not met (or waived), then FVAC or the Companies may elect not to consummate the Business Combination. In addition, in no event will FVAC redeem public shares in an amount that would cause its net tangible assets to be less than $5,000,001. Holders of public warrants do not have redemption rights in connection with the Business Combination.

Prior to exercising redemption rights, public stockholders should verify the market price of FVAC public shares as they may receive higher proceeds from the sale of their FVAC public shares in the public market than from exercising their redemption rights if the market price per share is higher than the redemption price. FVAC cannot assure you that you will be able to sell your FVAC public shares in the open market, even if the market price per share is higher than the redemption price stated above, as there may not be sufficient liquidity in FVAC public shares when you wish to sell your FVAC public shares.

If you exercise your redemption rights, the shares of FVAC Class A common stock will cease to be outstanding immediately prior to the Business Combination and will only represent the right to receive a pro rata share of the aggregate amount on deposit in the Trust Account. You will no longer own those FVAC public shares and will have no right to participate in, or have any interest in, the future growth of FVAC, if any. You will be entitled to receive cash for these shares only if you properly and timely demand redemption.

If the Business Combination is not approved and FVAC does not consummate an initial business combination by May 4, 2022, FVAC will be required to dissolve and liquidate the Trust Account by returning the then remaining funds in such account to the public stockholders and FVAC warrants will expire worthless.

Appraisal Rights

Appraisal rights are not available to holders of FVAC Common Stock in connection with the Business Combination under Delaware law.

Appraisal rights are not available to equityholders of MPMO or SNR in connection with the Business Combination under Delaware law.

Proxy Solicitation Costs

FVAC is soliciting proxies on behalf of the FVAC Board. This proxy solicitation is being made by mail, but also may be made by telephone or in person. FVAC has engaged D.F. King & Co., Inc. to assist in the

 

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solicitation of proxies for the FVAC Special Meeting. FVAC and its directors, officers and employees may also solicit proxies in person. FVAC will ask banks, brokers and other institutions, nominees and fiduciaries to forward the proxy materials to their principals and to obtain their authority to execute proxies and voting instructions.

FVAC will bear the entire cost of the proxy solicitation, including the preparation, assembly, printing, mailing and distribution of the proxy materials. FVAC will pay D.F. King & Co., Inc. a fee of $12,500, plus costs and expenses. FVAC will reimburse D.F. King & Co., Inc. for reasonable out-of-pocket expenses and will indemnify D.F. King & Co., Inc. and its affiliates against certain claims, liabilities, losses, damages and expenses. FVAC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of FVAC Common Stock for their expenses in forwarding soliciting materials to beneficial owners of the FVAC Common Stock and in obtaining voting instructions from those beneficial owners. FVAC’s 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.

 

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THE BUSINESS COMBINATION

The following is a discussion of the Business Combination and the material terms of the Merger Agreement by and among FVAC, MPMO Merger Corp., SNR Merger Company, MPMO Merger LLC, SNR Merger LLC, MPMO and SNR. You are urged to carefully read the Merger Agreement in its entirety, a copy of which is attached as Annex A to this proxy statement/consent solicitation/prospectus. This summary does not purport to be complete and may not contain all of the information about the Merger Agreement that is important to you. We encourage you to read the Merger Agreement carefully and in its entirety. This section is not intended to provide you with any factual information about FVAC, MPMO or SNR. Such information can be found elsewhere in this proxy statement/consent solicitation/prospectus.

Terms of the Business Combination

Transaction Structure

The Merger Agreement provides that (i) MPMO and SNR will, prior to the consummation of the transactions contemplated by the Merger Agreement, complete a reorganization, pursuant to which, among other things, (a) MPMO or an affiliate of an MPMO equityholder will form a MPMO HoldCo, and SNR will form SNR HoldCo, (b) each of MPMO HoldCo and SNR HoldCo will form wholly-owned subsidiaries, MPMO Transition Sub, LLC and SNR Transition Sub, LLC, respectively, and each of MPMO and SNR will merge with a MPMO Transition Sub, LLC and SNR Transition Sub, LLC, respectively, with MPMO and SNR being the surviving company in each such merger and becoming wholly-owned subsidiaries of MPMO HoldCo and SNR HoldCo, respectively, (ii) through two consecutive mergers constituting part of the same overall transaction, MPMO Merger Corp., a wholly-owned subsidiary of FVAC, will merge with and into MPMO HoldCo, with MPMO HoldCo being the surviving corporation, and immediately thereafter MPMO HoldCo will merge with and into MPMO Merger LLC, with MPMO Merger LLC being the surviving company and (iii) through two consecutive mergers constituting part of the same overall transaction, SNR Merger Company will merge with and into SNR HoldCo, with SNR HoldCo being the surviving company, and immediately thereafter SNR HoldCo will merge with and into SNR Merger LLC, with SNR Merger LLC being the surviving company. As a result of the transactions described above, each of MPMO and SNR will be an indirect wholly-owned subsidiary of FVAC.

Merger Consideration

Each share of MPMO HoldCo preferred stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

Each share of MPMO HoldCo common stock issued and outstanding immediately prior to the effective time of the initial MPMO merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 71,941,543.08436 divided by (B) the sum of (1) the number of shares of MPMO HoldCo common stock plus (2) the number of shares of MPMO HoldCo preferred stock, in each case, outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

Each share of SNR HoldCo common stock issued and outstanding immediately prior to the effective time of the initial SNR merger will be converted into the right to receive (i) the number of shares of FVAC Class A common stock equal to (A) 20,000,000 divided by (B) the number of shares of SNR HoldCo common stock outstanding as of immediately prior to the closing and (ii) the contingent right to receive Earnout Shares that may be issued in accordance with the terms of the Merger Agreement.

 

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No fractional shares will be issued in connection with the Business Combination. In lieu thereof, FVAC shall pay or cause to be paid cash to each holder who otherwise would have been entitled to receive a fractional share.

See “The Merger Agreement—Merger Consideration” beginning on page 125 of this proxy statement/consent solicitation/prospectus.

Conversion of Shares; Exchange Procedures

The conversion of MPMO HoldCo preferred stock and MPMO HoldCo common stock into the right to receive the merger consideration will occur automatically at the effective time of the initial MPMO merger. As promptly as practicable after the effective time of the initial MPMPO merger, MPMC shall cause the exchange of the MPMO HoldCo preferred stock and MPMO HoldCo common stock for merger consideration to be received pursuant to the terms of the Merger Agreement.

The conversion of SNR HoldCo common stock into the right to receive the merger consideration will occur automatically at the effective time of the initial SNR merger. As promptly as practicable after the effective time of the initial SNR merger, MPMC shall cause the exchange of the SNR HoldCo common stock for merger consideration to be received pursuant to the terms of the Merger Agreement.

Letters of Transmittal

As promptly as practicable after the closing of the Business Combination, MPMC will send a letter of transmittal to each holder of record of (i) MPMO HoldCo preferred stock, (ii) MPMO HoldCo common stock and (iii) SNR HoldCo common stock immediately prior to the effective time of the (a) initial MPMO merger and (b) initial SNR merger, respectively. This mailing will contain instructions on how to surrender shares of (i) MPMO HoldCo preferred stock, (ii) MPMO HoldCo common stock and (iii) SNR HoldCo common in exchange for the merger consideration the holder is entitled to receive under the Merger Agreement. From and after the initial MPMO effective time and initial SNR effective time, MPMO HoldCo stockholders and SNR HoldCo stockholders, respectively, who properly surrender their shares to MPMC, together with a properly completed and duly executed letter of transmittal, and such other documents as may be required pursuant to such instructions, will receive for each share of (i) MPMO HoldCo preferred stock, (ii) MPMO HoldCo common stock and (iii) SNR HoldCo common stock, the merger consideration.

Certain Projected Financial Information of the Companies

The Companies prepared certain unaudited projected financial information that was made available to FVAC, in connection with its evaluation of the Business Combination and to Murray Devine, for Murray Devine’s use and reliance in connection with its financial analyses and opinion summarized under the section entitled “The Business Combination—Opinion of SNR’s Financial Advisor.” The unaudited projected financial information of the Companies was prepared by the respective management of the Companies based on assumptions that management believed were reasonable and that reflected management’s best available estimates of the future financial performance of the Companies. The inclusion of this unaudited projected financial information should not be regarded as an indication that any of FVAC, the FVAC Board, MPMO, the MPMO Board, SNR, the SNR Board, their respective financial advisors or any other recipient of this information considered, or now considers, it to be necessarily predictive of actual future results, and this unaudited projected financial information should not be relied upon as such.

The unaudited projected financial information is not being included in this proxy statement/consent solicitation/prospectus to influence your decision whether to vote for or against the Business Combination but is being included because this unaudited projected financial information was provided to FVAC in connection with its evaluation of the Business Combination and to Murray Devine, for Murray Devine’s use and reliance in connection with its financial analyses and opinion.

 

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The projected results may not be realized and the actual results may be significantly higher or lower than estimated. Since the unaudited projected financial information covers multiple years, that information by its nature becomes less predictive with each successive year. The unaudited projected financial information was also based on numerous variables and assumptions. Such assumptions are inherently uncertain and may be beyond the control of the Companies. Important factors that may affect actual results and cause these financial forecasts to not be achieved include, but are not limited to, risks and uncertainties relating to the Companies’ industry and business (including unanticipated costs or delays associated with MPMO’s ongoing Stage II optimization project, changes in demand for, and prices of, rare earth minerals and products, the highly competitive nature of the rare earths industry, changes in China’s political environment and policies which could impact MPMO’s arrangements with Shenghe Resources (Singapore), changes in raw materials costs, transportation costs or disruptions in transportation services, inaccuracies in rare earth reserve estimates, adverse effects of COVID-19, changes in environmental or other governmental regulations, and other factors described under the captions “Risk Factors—Risks Relating to the Companies’ Business” and “Cautionary Note Regarding Forward-Looking Statements”. You are encouraged to review the risks and uncertainties described under these captions in this proxy statement/consent solicitation/prospectus. The unaudited projected financial information was not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the Public Company Accounting Oversight Board for preparation and presentation of projected financial information. The Companies’ respective independent registered public accounting firms have not compiled, examined or performed any procedures with respect to the unaudited prospective financial information contained herein, nor have they expressed any opinion or any other form of assurance on the information or its achievability.

In June 2020 and July 2020, the Companies provided FVAC and Murray Devine, respectively, with unaudited projected financial information relating to the Companies’ revenue, Adjusted EBITDA, capital expenditures, free cash flow and cash balances for the years ending December 31, 2020 through December 31, 2023. The unaudited projected financial information summarized in the table below. See “Cautionary Note Regarding Forward-Looking Statements.”

 

     Forecast Year Ended December 31, (1)  
(USD in millions)    2020E      2021E      2022E      2023E  

Revenue

   $ 102      $ 171      $ 349      $ 415  

Adjusted EBITDA (2)(3)

   $ 29      $ 82      $ 172      $ 252  

Capital expenditures

   $ 35      $ 149      $ 10      $ 42  

Free cash flow (4)

   ($ 36    ($ 96    $ 102      $ 138  

Cash balance (5)

   $ 512      $ 367      $ 429      $ 566  

 

(1)

All figures are pro forma for the combination of MPMO and SNR.

(2)

Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion and amortization.

(3)

Assumes (i) full recognition of the gross profits recoupment under the A&R Offtake Agreement, (ii) add-backs from non-cash items, and (iii) pro forma adjustments for the combination of MPMO and SNR.

(4)

Free cash flow is defined as net cash from operations, less net purchases of property, plant, and equipment.

(5)

Cash balance is pro forma for the Business Combination and includes cash, cash equivalents and current deposits.

The material assumptions underlying the unaudited projected financial information are as follows:

 

   

Projections for 2020E included actual results through the first quarter, and assumed production and sales of mixed rare earth concentrate at approximately the same levels as during the first quarter at the then-prevailing market price of $3,444 per REO MT before value added tax and import duties.

 

   

Projections for 2021E assumed MPMO continued to produce its “Stage I” product of rare earth concentrate with a planned increase in REO production and sales volumes of approximately 10% year-over-year. Due to tightening supply and demand for NdPr and rare earth concentrate primarily driven

 

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by expected growth in demand for magnets for electric vehicles, market prices were estimated at approximately $4,700 per REO MT before value added tax and import duties, reflecting management’s expectation of rare earth concentrate pricing supported by an estimated Chinese domestic NdPr oxide price of $50/kg.

 

   

Projections for 2022E assume completion of the Stage II optimization and a change to production and sales of separated rare earth oxides in place of rare earth concentrate. NdPr production and sales were estimated at 6,075 MT and other REO production and sales were estimated at approximately 15,000 MT. Realized pricing for NdPr was assumed to be $52.34/kg, reflecting a Chinese domestic price of $65/kg and two- thirds of NdPr sales subject to Chinese value added tax and tariffs, while other REO prices were assumed to be $1.99/kg.

 

   

Projections for 2023E assumed flat year-over-year production and sales volumes, but an improvement in realized NdPr and other REO prices to $63.18/kg (reflecting a $70/kg Chinese domestic price and one-third of sales subject to Chinese tariff and value added tax) and $2.02/kg, respectively.

 

   

None of the financial projections assumed implementation of MPMO’s Stage III downstream expansion strategy into the production of rare earth metal alloys and finished magnets.

The assumptions that respective management of the Companies made in preparing the foregoing unaudited projected financial information may not reflect actual future conditions. The estimates and assumptions underlying the unaudited projected financial information involve judgments with respect to, among other things, costs and timing of MPMO’s ongoing Stage II optimization project, future demand for, and prices of, rare earth minerals and products, competition in the rare earths industry, China’s political environment and policies which could impact MPMO’s arrangements with Shenghe Resources (Singapore), future raw materials costs, transportation costs and the availability of transportation services, rare earth reserve estimates, potential effects of COVID-19, future environmental or other governmental regulations and the other risks and uncertainties described under “Risk Factors—Risks Relating to the Companies’ Business and Industry” and “Cautionary Note Regarding Forward-Looking Statements”, all of which are difficult to predict and many of which are beyond the control of the Companies. The underlying assumptions and projected results may not be realized and actual results differ.

Additionally, although presented with numerical specificity, the unaudited projected financial information with respect to the Companies and the Mountain Pass facility reflects numerous assumptions and estimates as to future events made by the respective management of the Companies. You are cautioned not to place undue reliance on the unaudited projected financial information set forth above. No representation is made by the Companies or any other person to any stockholders regarding the ultimate performance of MPMC compared to the information included in the above unaudited projected financial information. The inclusion of unaudited projected financial information in this proxy statement/consent solicitation/prospectus should not be regarded as an indication that this information will be necessarily predictive of actual future events, and this information should not be relied on as such.

The unaudited projected financial information does not take into account any circumstances or events occurring after the date they were prepared, and, except as may be required in order to comply with applicable securities laws, none of the Companies or any of their respective representatives intend to update, or otherwise revise, the unaudited projected financial information, or the specific portions presented, to reflect circumstances existing after the date when they were made or to reflect the occurrence of future events, even in the event that any or all of the assumptions are shown to be in error. In addition, the unaudited projected financial information does not reflect the impact of the Business Combination, nor does it take into account the effect of any failure of the Business Combination to occur.

Background of the Business Combination

FVAC is a blank check company originally incorporated on January 24, 2020, as a Delaware corporation for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar

 

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business combination with one or more businesses. The transactions contemplated by the Merger Agreement and Related Agreements, including the Business Combination and PIPE Investment, are a result of an extensive search for a potential transaction utilizing the global network and investing, operating and transaction experience of FVAC’s management team and board of directors. The terms of the Merger Agreement are the result of an arm’s length negotiation between representatives and management teams of FVAC and the Companies.

The following chronology summarizes the key meetings and events that led to the signing of the Merger Agreement. The following chronology does not purport to catalogue every conversation among representatives of FVAC, the Companies and other parties.

On January 31, 2020, FVAC issued an aggregate of 8,625,000 shares of FVAC Class F common stock to the Sponsor for an aggregate purchase price of $25,000, or approximately $0.003 per share. Prior to such time, FVAC had no assets, tangible or intangible. The proceeds were used for formation and offering costs and to fund working capital needs of FVAC. Of the 8,625,000 shares of FVAC Class F common stock, an aggregate of up to 1,125,000 shares were subject to forfeiture to FVAC by the Sponsor for no consideration to the extent that the underwriters’ over-allotment option was not exercised. On May 4, 2020, the underwriters exercised their over-allotment option in full. As a result, these shares were no longer subject to forfeiture.

The registration statement for FVAC’s IPO was declared effective on April 29, 2020.

On May 4, 2020, FVAC consummated FVAC’s IPO of 34,500,000 FVAC units, which included the issuance of 4,500,000 FVAC units as a result of the underwriters’ exercise of their over-allotment option in full, at $10.00 per FVAC unit, generating gross proceeds of $345.0 million and incurring offering costs of approximately $19.8 million, inclusive of approximately $12.1 million in deferred underwriting commissions.

Substantially concurrently with FVAC’s IPO, FVAC consummated a Private Placement of 5,933,333 Private Placement Warrants, at a price of $1.50 per Private Placement Warrant, with the Sponsor generating gross proceeds of $8.9 million. The proceeds were to be used for formation and offering costs and to fund working capital needs of FVAC.

Upon the closing of FVAC’s IPO and Private Placement, $345.0 million ($10.00 per FVAC unit) of the aggregate net proceeds of the sale of the FVAC units in FVAC’s IPO and the Private Placement was placed in the Trust Account.

Following FVAC’s IPO, FVAC commenced an active search for prospective businesses and assets to acquire. From the date of FVAC’s IPO on May 4, 2020, through the execution of the Merger Agreement with the Companies on July 15, 2020, Joshua Pack, Chairman of FVAC, Andrew A. McKnight, Chief Executive Officer and director of FVAC, R. Edward Albert III, director and President of FVAC, Daniel N. Bass, Chief Financial Officer of FVAC, and Micah Kaplan, Chief Operating Officer of FVAC, and, along with representatives of each of FVAC’s financial advisors RBC Capital Markets, LLC (“RBCCM”), Deutsche Bank Securities Inc. (“Deutsche Bank”), and Morgan Stanley & Co. LLC (“Morgan Stanley”) contacted, and were contacted by, a number of individuals and entities with respect to business combination opportunities. As part of this process, representatives of FVAC considered and evaluated over one hundred seventy-five (175) potential acquisition targets in a wide variety of industry sectors, seventeen (17) of which progressed to the evaluation of illustrative transaction structures to effect an initial business combination and four (4) of which progressed to discussions between FVAC and the potential target companies. FVAC engaged in meaningful discussions with the management teams of two potential targets, one of which was the Companies.

FVAC did not pursue further a potential transaction with the other potential acquisition target with which it engaged in meaningful discussions for a variety of factors, including the inability to reach agreement on a mutually acceptable valuation with such target and the decision by FVAC management to pursue an alternative transaction with the Companies.

 

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FVAC decided to pursue an acquisition of the Companies because it determined that the Companies represented a compelling opportunity given their strong management team, fast-growing and large market opportunity, and position to capitalize on changing consumer and socio-economic habits that prioritize environmentally responsible technologies and practices. Compared to the Companies, FVAC and its advisors did not consider the other alternative acquisition targets to be as compelling when taking into consideration their business prospects, strategy, management teams, structure, likelihood of execution and valuation considerations. See also “—Recommendation of the FVAC Board of Directors and Reasons for the Business Combination.”

Prior to the formation of FVAC, certain funds managed by affiliates of the Sponsor (collectively, the “Fortress Credit Funds”) evaluated the possibility of an investment opportunity with a predecessor of the Companies, Molycorp Minerals LLC (“Molycorp”). During September of 2013, the Fortress Credit Funds evaluated the possibility of an asset acquisition of the Mountain Pass facility from its then-owner, Molycorp, through a sale- leaseback transaction. After consideration, the Fortress Credit Funds decided not to pursue a transaction with Molycorp because they did not believe it was an attractive investment at that time given its risk and return profile. Then, in July of 2015, the Fortress Credit Funds evaluated the possibility of extending debtor-in-possession financing to Molycorp in connection with Molycorp’s Chapter 11 bankruptcy that commenced in June of 2015. After consideration, the Fortress Credit Funds decided not to pursue the debtor-in-possession financing based on the same reasons they had declined to progress the investment in 2013.

Members of the Fortress Credit Funds’ management team continued to monitor developments during Molycorp’s Chapter 11 bankruptcy, including discussing private capital solutions for the emergence of some of Molycorp’s assets from bankruptcy at various points with JHL Capital Group, the largest secured creditor of Molycorp at the time, and prior to the Companies’ subsequent formation. These discussions were revisited in 2017 after the formation of the Companies and their acquisition of the Mountain Pass facility out of bankruptcy, but never developed beyond a preliminary nature.

From February of 2019 through July of 2019, members of the Fortress Credit Funds and the Companies’ management engaged in preliminary discussions about the possibility of a business combination with Mosaic Acquisition Corp. (“Mosaic”), a Delaware corporation and, at the time, a blank check company affiliated with the Fortress Credit Funds. As part of these discussions, members of the Fortress Credit Funds and Mosaic visited the Mountain Pass facility in March of 2019 in connection with diligence performed on behalf of Mosaic. The discussions during this period did not materialize into a transaction, as Mosaic management determined that the timing of the transaction was not appropriate for Mosaic at the Companies’ desired valuation based on the position of the Companies and the Mountain Pass mine in the post-bankruptcy acquisition life-cycle.

In February 2020, members of the Fortress Credit Funds once again evaluated the possibility of a transaction between Fortress Credit Funds and the Companies in connection with a private placement opportunity. Although the Fortress Credit Funds signed a nondisclosure agreement with the Companies on February 28, 2020, in connection with their evaluation of the private placement opportunity, the Fortress Credit Funds decided not to pursue a private placement transaction, as members of the Fortress Credit Funds’ investment team determined that the fully-equitized transaction structure being sought by the Companies was not consistent with the investment profile of their funds at that time. During the period from February 28, 2020 to the week of April 20, 2020, the Fortress Credit Funds did not meaningfully pursue the private placement opportunity with the Companies as resources were focused on other opportunities arising as a result of the volatility and uncertainty in the global markets due to the COVID-19 pandemic. The Companies had also notified the Fortress Credit Funds of their intent to pursue other potential transactions, including a potential IPO led by Morgan Stanley.

On April 22, 2020, Mr. Litinsky emailed Mr. McKnight a press release that the Companies had released earlier that morning. Following the closing of FVAC’s IPO, on April 30, 2020, Mr. McKnight sent an email to Mr. Litinsky to express interest in the possibility of a transaction between FVAC and the Companies. Mr. Litinsky reconnected the FVAC team with the Morgan Stanley team managing the transaction process for the Companies.

 

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On May 5, 2020, Morgan Stanley, in its capacity as the Companies’ financial advisor, sent Mr. McKnight and other members of the FVAC management team a confidential information memorandum (the “CIM”) and an invitation to join a virtual data room for purposes of initiating diligence on the Companies.

On May 24, 2020, Mr. Litinsky had a call with Mr. McKnight in order to discuss the possibility of a transaction between FVAC and the Companies. On that call, Mr. Litinsky noted to Mr. McKnight that the Companies were currently in detailed discussions with other parties, including another blank check company, regarding a potential business combination. While the discussions with the other blank check company were very developed, the respective parties had not yet resolved all definitive terms of a potential transaction.

Following that discussion, Mr. Litinsky sent Mr. McKnight a framework of a proposed transaction acceptable to the Companies, including an enterprise value of $1.0 billion for the Companies. Mr. McKnight discussed Mr. Litinsky’s initial proposal and valuation metrics with members of FVAC’s management in conjunction with a review of the CIM. FVAC’s management further discussed and evaluated the proposal based on knowledge of the Companies and agreed that a transaction on similar terms could be compelling for FVAC, especially in light of the fact that the closing of FVAC’s IPO in early May coincided with MPMO reporting strong financial results for the first quarter of 2020, and it was worth pursuing a limited exclusivity period to conduct due diligence and validate the valuation.

On May 26, 2020, Mr. McKnight and Mr. Litinsky had another call to further discuss the possibility of a transaction between FVAC and the Companies, and it was agreed that RBCCM and Deutsche Bank, at FVAC’s direction, would begin preparing the initial draft of an FVAC letter of intent (the “LOI”) that would include a transaction structure and valuation metrics similar to those previously presented by Mr. Litinsky. Morgan Stanley did not participate in FVAC’s preparation of the LOI due to its representation of the Companies in respect of the potential transaction.

On May 27, 2020, FVAC sent representatives of each of the Companies and Morgan Stanley an initial draft of the LOI, which provided for the following terms, among other things: (i) an enterprise value for the Companies of $1.0 billion, on a pre-transaction, cash-free, debt-free basis, and an equity value of $945 million, (ii) a $150 million equity financing achieved through a PIPE and (iii) a forty-five (45) day exclusivity period following initial due diligence.

On May 31, 2020, representatives of each of the Companies and Morgan Stanley sent FVAC a proposed timeline and list of potential investors that may be interested in participating in the PIPE Investment.

On June 2, 2020, representatives of each of the Companies and Morgan Stanley sent FVAC a revised LOI which proposed, among other things: (i) to introduce the surrender of all Founder Shares held by the Sponsor with the opportunity to earn up to 8,625,000 shares of MPMC Class A common stock (based on the amount of cash available at the closing) if during the first five (5) years following the closing of the Business Combination certain MPMC Class A common stock share price thresholds were met, (ii) to introduce an earn-out for the Companies’ unitholders to receive up to 8,000,000 shares of MPMC Class A common stock after the closing of the Business Combination if certain MPMC Class A common stock share price thresholds were met, (iii) further terms for an exclusivity period covering both FVAC and the Companies that would commence on the date of the LOI and terminate on the earlier of mutual agreement or forty-five (45) days following the date of the LOI, (iv) a revised equity value of $912 million and (v) clarified that the value of the Companies would be allocated 80% to MPMO and 20% to SNR.

On June 3, 2020, FVAC sent representatives of each of the Companies and Morgan Stanley a revised LOI, which proposed, among other things: (i) to extend the period by which the Sponsor could earn and receive additional MPMC Class A common stock from five (5) years to ten (10) years, (ii) the exchange of the private placement warrants held by the Sponsor for Founder Shares and (iii) to remove the concept of an earn-out for MPMO unitholders to receive up to 8,000,000 shares of MPMC Class A common stock after the closing of the Business Combination if certain MPMC Class A common stock share price thresholds were met.

 

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On June 4, 2020, following a call between Mr. Litinsky and Mr. McKnight, representatives of each of the Companies and Morgan Stanley sent FVAC a proposed final LOI which accepted FVAC’s proposals, other than the deletion of the earn-out for the Companies’ unitholders, which after discussions between Mr. Litinsky and Mr. McKnight earlier in the day was re-inserted to better align investor interests and decrease marketing risk.

On June 4, 2020, the LOI was executed by FVAC and the Companies, including the following terms, among other things: (i) an enterprise value for the Companies of $1.0 billion, on a pre-transaction, cash-free, debt-free basis, and an equity value of $912 million, with the combined value of the Companies being allocated 80% to MPMO and 20% to SNR, and from which the exchange ratio for MPMO and SNR units would be determined based on the allocated equity value divided by the number of outstanding units for each of SNR and MPMO, (ii) a $150 million equity financing achieved through a PIPE, (iii) an earn-out of up to 8,000,000 shares of MPMC Class A common stock to be issued to the Companies’ equity holders after the closing of the Business Combination if certain MPMC Class A common stock share price thresholds were met, (iv) the surrender of all Founder Shares held by the Sponsor with the opportunity to earn up to 8,625,000 shares of MPMC Class A common stock based on the amount of cash available at the closing and if after the closing of the Business Combination certain MPMC Class A common stock share price thresholds were met, (v) the exchange of the private placement warrants held by the Sponsor for Founder Shares and (vi) a forty-five (45) day exclusivity period ending on July 19, 2020 to allow FVAC to complete its due diligence and for the parties to negotiate and finalize definitive documentation.

Throughout the negotiation of the LOI and subsequent process to negotiate and finalize definitive documentation in respect of the Business Combination, Mr. McKnight and other members of the FVAC management and legal team, with input from representatives of each of RBCCM and Deutsche Bank, regularly corresponded via email and over the telephone with the Companies in respect of the LOI and the Business Combination.

From June 5, 2020, through July 15, 2020 (the date the Merger Agreement was executed), Weil, Gotshal & Manges LLP (“Weil”), counsel to FVAC, together with Mitchell Chadwick, counsel to FVAC engaged on July 7, 2020, for its expertise in the mining industry, Environmental Resource Management (“ERM”), engaged on June 19, 2020 for its general environmental-related expertise, Cau Engineers & Associates (“Cau Engineers”), engaged on July 6, 2020, for its expertise in mining operations Ernst & Young LLP (E&Y”), engaged on June 25, 2020 for its financial and accounting expertise, and Marsh & McLennan Companies (“Marsh”), engaged on June 25, 2020 for its insurance and underwriting expertise, conducted a thorough due diligence investigation of the Companies, which diligence was conducted through document review, numerous telephonic conferences with representatives of the Companies, including the Companies’ management team, covering, among other things, commercial operations, real property and mining matters, environmental and regulatory matters, litigation and legal compliance, intellectual property and privacy matters, employment and benefits-related and labor matters, financial and insurance matters, IT and general corporate matters.

On June 9, 2020, the FVAC Board held a telephonic meeting, to discuss, among other things, (i) the evaluation of potential acquisition targets, (ii) a detailed review of the LOI and the material terms of the proposed transaction with the Companies, (iii) the proposed scope of diligence that was to be conducted on the Companies and (iv) the overall status of discussions with the Companies. After an update on the target search process and a presentation by FVAC management on the Companies and the terms of the LOI, the FVAC Board had a discussion regarding the potential transaction and the due diligence plan for the Companies.

Also on June 9, 2020, representatives of each of FVAC, the Companies, Weil, Sidley Austin LLP (“Sidley”), counsel to MPMO and Simpson Thacher & Bartlett LLP (“Simpson Thacher”), counsel to SNR, held a telephonic conference to discuss a potential transaction between FVAC and the Companies, including potential transaction structures and the process for completing a transaction with FVAC, including modifying the surrender/reissuance of Founder Shares contemplated by the LOI into a vesting/forfeiture structure.

On June 10, 2020, Weil sent to Sidley a confidentiality agreement to be entered into by and among FVAC and the Companies, which upon its execution was effective as of June 4, 2020.

 

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On June 11, 2020, FVAC and the Companies agreed to amend the LOI to extend the exclusivity period from July 19, 2020 to July 31, 2020, in order to provide FVAC the opportunity to complete its diligence process, and for the parties to negotiate and finalize definitive documentation.

On June 12, 2020, Weil delivered an initial draft of the Subscription Agreement to Sidley to be used in connection with the PIPE. Over the next month, FVAC and the Companies continued to negotiate the transaction documents that would be expected to be executed or in final form simultaneously with the execution of the Merger Agreement.

On June 15, 2020, FVAC executed an engagement letter with Deutsche Bank whereby Deutsche Bank was engaged as FVAC’s capital markets advisor to provide certain advisor and investment banking services in connection with the Business Combination.

On June 16, 2020, Davis Polk & Wardell LLP (“DPW”), legal counsel to Morgan Stanley, sent Weil a draft placement agent agreement (“Placement Agent Agreement”), pursuant to which Morgan Stanley proposed to act as FVAC’s exclusive placement agent in connection with the proposed private placement of FVAC Class A common stock in connection with the Business Combination. Morgan Stanley has acted as (i) financial advisor to MPMO in connection with the Business Combination (the “MP Advisory Role”), (ii) placement agent to FVAC in connection with the PIPE Private Placement (the “PIPE Placement Agent Role”) and (iii) an underwriter in FVAC’s IPO (the “Underwriter Role”). As a result, Morgan Stanley sent FVAC a conflicts waiver letter agreement (“Conflicts Waiver”) on June 16, 2020, pursuant to which FVAC would consent to Morgan Stanley’s performance of each of these roles in connection with the Business Combination.

Later on June 16, 2020, Weil sent Morgan Stanley and DPW a revised (i) Placement Agent Agreement that provided, among other things, that Morgan Stanley would act as the lead, rather than exclusive, placement agent for FVAC in the PIPE Investment and (ii) Conflicts Waiver, pursuant to which FVAC consented to Morgan Stanley acting in each of the MP Advisory Role, the PIPE Placement Agent Role and the Underwriter Role. Concurrently, it was proposed that FVAC would engage, and enter into a joinder agreement to the Private Placement Agreement (the “PAA Joinders”) with, Deutsche Bank and RBCCM, pursuant to which Deutsche Bank and RBCCM would act as co-placement agents to Morgan Stanley in connection with the PIPE Investment. On June 16, 2020, FVAC also executed an engagement letter with RBCCM whereby RBCCM was engaged as FVAC’s capital markets advisor to provide certain advisor and investment banking services in connection with the Business Combination.

FVAC entered into the Placement Agent Agreement and the PAA Joinders with Morgan Stanley, Deutsche Bank and RBCCM, respectively, on June 17, 2020. Similarly, the Conflicts Waiver between FVAC and Morgan Stanley was executed on June 17, 2020. Prior to entering into the Placement Agent Agreement, PAA Joinders and Conflicts Waiver, members of the FVAC management and legal team advised FVAC’s board members of the risks and benefits of the Placement Agent Agreement, Morgan Stanley’s participation as a result of its MP Advisory Role, the PIPE Placement Agent Role, and the Underwriter Role, and the corresponding Conflicts Waiver and the PAA Joinders. Following the execution of the Private Placement Agreement and the PAA Joinders, each of Morgan Stanley, Deutsche Bank and RBCCM began marketing an investment in the PIPE to a limited number of potential investors with whom they had pre-existing relationships. Based on the initial feedback received from such potential investors, members of the FVAC management and representatives of the Companies discussed the possibility of revising upward the PIPE Investment Amount to $200 million, subject to an upward adjustment of the Earnout Shares to the Companies’ stockholders.

Throughout the month of June, Morgan Stanley worked with the Companies and FVAC to put together an investor presentation to present to potential investors in the PIPE Investment. The investor presentation outlined the proposed business combination and included information regarding the Companies, which was refined through many rounds of review and comment amongst the FVAC management team, the Companies’ management team and each of their respective professional advisors.

 

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Following discussion amongst the FVAC management team, in late June, certain representatives of FVAC management and Fortress Credit Funds travelled to the Mountain Pass facility to review the current status of the Companies’ performance and implementation of their long-term growth strategy. Following the site visit, it was noted to other members of FVAC management and the Sponsor that the activity at the Mountain Pass facility was consistent with what the Companies had represented in the diligence process to date and that the Companies were seeing positive results from the successful implementation of their long term growth strategy. Following the site visit, there were discussions among representatives of Fortress Credit Funds, members of FVAC management and the Sponsor regarding the direct participation in the PIPE Investment by the Sponsor.

On June 27, 2020, Murray Devine and SNR executed an engagement letter pursuant to which Murray Devine was engaged to provide an opinion as to the fairness to SNR from a financial perspective of the consideration to be received by SNR’s unitholders. Representatives of SNR and Mr. Randall Weisenburger, the independent board member of SNR, shared certain financial and operational information and projections communicated with Murray Devine in connection with such engagement. On November 20, 2019, the Board of SNR had acted by written consent to delegate to Mr. Weisenburger the power and authority to take certain actions, including independently reviewing, evaluating and deciding whether to proceed with a potential strategic transaction with MPMO (including a potential sale of the combined entities). On July 2, 2020, representatives of SNR and Murray Devine had a telephonic meeting to discuss the materials shared and respond to questions posed by Murray Devine in connection with its preparation of the fairness opinion.

On July 2, 2020, the FVAC Board held a telephonic meeting to discuss, among other things, (i) FVAC management’s view of the potential transaction, (ii) the status of discussions regarding the potential transaction, (iii) the diligence conducted on the Companies to date, and (iv) the engagement of E&Y for its financial and accounting expertise. During this meeting, FVAC’s management gave a presentation to the FVAC Board outlining the structure and rationale for the proposed transaction. This presentation outlined why a potential transaction with the Companies was determined not to be appropriate for the Fortress Credit Funds, but, in the view of FVAC’s management was an appropriate and attractive opportunity for FVAC and its stockholders. FVAC’s management also outlined for the FVAC Board the potential risks associated with the proposed transactions. Representatives of Weil then reviewed in detail with the FVAC Board their fiduciary duties under applicable law in evaluating the potential transaction. The FVAC Board was supportive of continuing discussion with the Companies and their advisors in connection with a potential Business Combination.

Also on July 2, 2020, Weil delivered an initial draft of the Merger Agreement to Sidley and Simpson Thacher. The initial draft Merger Agreement provided for, among other things: (i) delivery of Support Agreements by which a majority of each of the Companies’ unitholders would agree to support the Business Combination, (ii) a meeting of the Companies’ unitholders’ to approve the Business Combination, (iii) the issuance of FVAC Class A common stock as consideration in the Business Combination pursuant to a registration statement on Form S-4, (iv) the consummation of the transactions contemplated by the Subscription Agreements, and (v) representations, warranties and covenants customary for transactions of this type.

On July 7, 2020, Sidley delivered a revised draft of the Merger Agreement to Weil, and also on that day