Sec Form 13D Filing - JHL Capital Group LLC filing for MP Materials Corp. (MP) - 2020-11-27

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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On July 15, 2020, the MP Mine Operations LLC (“MPMO”) and Secure Natural Resources LLC (“SNR”) entered into a merger agreement (the “Merger Agreement”) pursuant to which, effective November 17, 2020, SNR and MPMO combined with the predecessor to the Issuer, Fortress Value Acquisition Corp. (“FVAC”), a special purpose acquisition company, and FVAC was renamed MP Materials Corp. (the “Business Combination”). Upon the consummation of the Business Combination, MPMO and SNR each became indirect wholly-owned subsidiaries of the Issuer.

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Prior to the Business Combination, Mr. Litinsky served as the co-Chairman of MPMO and Chairman of SNR. Also prior to the Business Combination, JHL Capital Group Holdings Two LLC held approximately 60% of the interests, on a fully diluted basis, in MPMO, and JHL Capital Group Holdings One LLC held approximately 72.6% of the interests in SNR.  In advance of the Business Combination, each of JHL Capital Group Holdings Two LLC and JHL Capital Group Holdings One LLC transferred certain common units of MPMO and SNR, respectively, to JHL Capital Group and the Revocable Trust and the common units of MPMO and SNR were converted into shares of MPMO Holding Company (“MPMO Holdco”) common stock and SNR Holding Company, LLC (“SNR Holdco”) common stock, respectively.

In connection with the consummation of the Business Combination, in accordance with the applicable terms of the Merger Agreement: (i) JHL Capital Group received 1,652 shares of Common Stock; (ii) JHL Group Holdings Two received 31,204,994 shares of Common Stock; and (iii) the Revocable Trust received 11,927,365 shares of Common Stock, each in exchange for the shares of MPMO Holdco common stock held by such person.

Also in connection with the consummation of the Business Combination, in accordance with the applicable terms of the Merger Agreement: (i) JHL Capital Group received 556 shares of Common Stock; (ii) JHL Group Holdings One received 10,498,799 shares of Common Stock; and (iii) the Revocable Trust received 4,012,916 shares of Common Stock, each in exchange for the shares of SNR Holdco common stock held by such person.

In lieu of fractional shares, the Issuer paid cash to each holder who otherwise would have been entitled to receive a fractional share.

In addition, in connection with the consummation of the Business Combination, in accordance with the applicable terms of the Merger Agreement, 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 additional shares of Common Stock, subject to certain conditions.  Specifically, each of JHL Capital Group, JHL Group Holdings One, JHL Group Holdings Two and the Revocable Trust will have the contingent right to receive the number of shares of Common Stock set forth in the table below pursuant to the following earnout schedule (collectively, the “Earnout Consideration”), subject to adjustment for certain corporate events affecting the Common Stock and subject to acceleration in the event of a sale of the Issuer, each in accordance with the applicable terms of the Merger Agreement: (a) if, at any time during the ten years following the closing of the Business Combination, the VWAP of Common Stock is greater than or equal to $18.00 for any twenty trading days within any thirty-trading day period; and (b) if, at any time during the ten years following the closing of the Business Combination, the VWAP of Common Stock is greater than or equal to $20.00 for any twenty trading days within any thirty-trading day period.

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The response to Item 3 of this Schedule 13D is incorporated by reference herein.

For so long as the Reporting Persons continue to beneficially own a significant percentage of the outstanding Common Stock, the Reporting Persons will be able to significantly influence the composition of the Issuer’s board of directors (the “Board”) and the approval of actions requiring stockholder approval. Accordingly, for such period of time, the Reporting Persons will have significant influence with respect to the Issuer’s management, business plans and policies, including the appointment and removal of the Issuer’s officers. In particular, for so long as the Reporting Persons continue to beneficially own a significant percentage of Common Stock, the Reporting Persons will be able to cause or prevent a change of control of the Issuer or a change in the composition of the Board and could preclude any unsolicited acquisition of the Issuer.

Effective upon the closing of the Business Combination, pursuant to an employment agreement dated August 7, 2020, Mr. Litinsky serves as Chairman of the Board and Chief Executive Officer of the Issuer.

The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may from time to time and at any time in the future depending on various factors, including, without limitation, the disclosures set forth above, the terms of the agreements described in Item 6 herein, the Issuer’s financial position, operations, prospects, capital structure, strategic direction, actions taken by the Board, price levels of the Common Stock, other investment opportunities available to the Reporting Persons, conditions in the securities market and general economic and industry conditions, take such actions with respect to their respective investments in the Issuer as they deem appropriate, including, without limitation: (i) proposing measures which they believe would enhance shareholder value; (ii) acquiring additional Common Stock and/or other equity, debt, notes, other securities, or derivative or other instruments that are based upon or relate to the value of the Common Stock or the Issuer (collectively, “Securities”) of the Issuer in the open market or otherwise; (iii) disposing of any or all of their Securities in the open market or otherwise; (iv) engaging in any hedging or similar transactions with respect to the Securities; or (v) proposing or considering one or more of the actions described in subsections (a) through (j) of Item 4 of Schedule 13D.

Also, consistent with their investment intent, the Reporting Persons have engaged, and may further engage, in communications with, without limitation, one or more shareholders of the Issuer, one or more officers of the Issuer and/or one or more members of the Board regarding the Issuer, including but not limited to its operations, governance and control.

(a, b)  As of the date hereof, Mr. Litinsky may be deemed to beneficially own 57,646,282 shares of Common Stock, representing approximately 37.0% of the shares of Common Stock outstanding. This amount consists of:  (i) 2,208 shares of Common Stock held directly by JHL Capital Group, representing approximately 0.0% of the shares of Common Stock outstanding; (ii) 10,498,799 shares of Common Stock held directly by JHL Group Holdings One, representing approximately 6.7% of the shares of Common Stock outstanding; (iii) 31,204,994 shares of Common Stock held directly by JHL Group Holdings Two, representing approximately 20.0% of the shares of Common Stock outstanding; and (iv) 15,940,281 shares of Common Stock held in the Revocable Trust, representing approximately 10.2% of the shares of Common Stock outstanding.

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As the 100% owner of each of JHL Group Holdings One and JHL Group Holdings Two, Master Fund may be deemed to beneficially own 41,703,793 shares of Common Stock, representing approximately 26.7% of the shares of Common Stock outstanding.  This amount consists of (i) 10,498,799 shares of Common Stock held directly by JHL Group Holdings One, representing approximately 6.7% of the shares of Common Stock outstanding and (ii) 31,204,994 shares of Common Stock held directly by JHL Group Holdings Two, representing approximately 20.0% of the shares of Common Stock outstanding.  As the general partner of Master Fund, Master Fund GP may be deemed to beneficially own the 41,703,793 shares of Common Stock beneficially owned by Master Fund, representing approximately 26.7% of the shares of Common Stock outstanding.

As the investment manager of Master Fund and the 100% owner of Master Fund GP, JHL Capital Group may be deemed to beneficially own 41,706,001 shares of Common Stock, representing approximately 26.7% of the shares of Common Stock outstanding. This amount consists of: (i) 2,208 shares of Common Stock held directly by JHL Capital Group, representing approximately 0.0% of the shares of Common Stock outstanding; (ii) 10,498,799 shares of Common Stock held directly by JHL Group Holdings One, representing approximately 6.7% of the shares of Common Stock outstanding; and (iii) 31,204,994 shares of Common Stock held directly by JHL Group Holdings Two, representing approximately 20.0% of the shares of Common Stock outstanding.  As the 100% owner of JHL Capital Group, JHL Capital Group L.P. may be deemed to beneficially own the 41,706,001 shares of Common Stock beneficially owned by JHL Capital Group, representing approximately 26.7% of the shares of Common Stock outstanding.

The percentage of shares of Common Stock outstanding reported herein is based on 155,920,632 shares of Common Stock outstanding as of closing of the Business Combination and related transactions on November 17, 2020, as set forth in the Issuer’s current report on Form 8-K, filed on November 17, 2020.

(c) The responses to Items 3 and 4 of this Schedule 13D are incorporated by reference herein.  Other than as set forth herein, no transactions in the Issuer’s securities have been effected by the Reporting Persons during the past 60 days.

(d) To the knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock covered by the Schedule 13D.

(e) Not applicable.

Amended and Restated Registration Rights Agreement.  As of the closing of the Business Combination, the Issuer entered into the Amended and Restated Registration Rights Agreement (“A&R RRA”) with JHL Capital Group, JHL Group Holdings One, JHL Group Holdings Two, the Revocable Trust and certain other Issuer stockholders.  In accordance with the A&R RRA, the parties to the A&R RRA and their permitted transferees are entitled to, among other things, customary registration rights, including demand, piggy-back and shelf registration rights. The A&R RRA also provides that the Issuer 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.

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Pursuant to the terms of the A&R RRA, JHL Capital Group, JHL Group Holdings One, JHL Group Holdings Two and the Revocable Trust have agreed to be subject to a 1-year lockup in respect of their Common Stock, subject to certain customary exceptions (including the attainment of certain trading price thresholds).

Exhibit 2 – Amended and Restated Registration Rights Agreement, dated November 17, 2020 (incorporated by reference to Exhibit 10.6 of the Issuer’s current report on Form 8-K, filed with the SEC on November 17, 2020)

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SIGNATURES

 

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