Mudrick Capital Acquisition Corp. (MUDS), as expected, filed a preliminary proxy this evening to extend their completion deadline by an additional six months, from February 12, 2020 to August 12, 2020. However, just like Leo Holding Corp. (which filed to extend yesterday), MUDS is not offering any additional contribution to trust for non-redeemers at their extension vote.  And since MUDS is asking for six whole months, they’re probably looking at a significant number of redemptions.

Mudrick Capital only just announced their combination with Hycroft Mining on Monday.  However, they seem to have anticipated investors questioning this “no-contribution” move by stating that yes, the trust could be depleted, but then go on to list out their backstop, forward purchase agreement, etc.  Per the proxy….

“The withdrawal of funds from the trust account in connection with the Election will reduce the amount held in the trust account following the redemption, and the amount remaining in the trust account may be significantly reduced from the approximately $[•] million that was in the trust account as of? [•], 2020. In such event, the Company may need to obtain additional funds to complete a business combination and there can be no assurance that such funds will be available on terms acceptable to the parties or at all. However, concurrently with the signing of the Purchase Agreement, the Company entered into subscription/backstop agreements with certain existing investors in the Seller for the purchase and sale of 6,500,000 shares of Class A common stock of the Company, and the issuance to such investors of 3,250,000 warrants exercisable at $11.50 per share, for an aggregate purchase price of up to $65,000,000, through a private placement offered pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “private placement”), which amount shall be subject to reduction if? (i) prior to the consummation of the business combination, the Company enters into subscription agreements or other instruments pursuant to which the Company agrees to issue and sell to certain third-party investors all or any portion of the shares to be issued in connection with the transactions contemplated by such subscription/backstop agreements or (ii) in connection with the consummation of the business combination, the cash remaining in the Company’s trust account following the satisfaction of stockholder redemptions exceeds $10,000,000. In addition, Mudrick Capital Acquisition Holdings LLC, our sponsor, has committed, pursuant to a forward purchase contract with us, to purchase, in a private placement for gross proceeds of? $25,000,000 to occur concurrently with the consummation of our initial business combination, 2,500,000 of our units on substantially the same terms as the sale of units in our initial public offering at $10.00 per unit, and 625,000 shares of Class A common stock.”

So, whereas it sounds like Leo Holdings needs to reduce the trust amount via redemptions (because maybe they have TOO MUCH cash?), Mudrick Capital doesn’t necessarily want redemptions, but they’re okay with it if it happens.  Either way, redeemers gonna redeem.

There are still a lot of blanks in the proxy since this is just a preliminary filing, however, the record date has been set as today, January 15, 2020.  A vote date wasn’t listed yet, but the vote will need to happen before February 12th, so most likely, a few days before that February deadline.