SEC Form SC 13D/A filed by Nouveau Monde Graphite Inc. (Amendment)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

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 Rule 13d-1(e), Rule 13d-1(f) or Rule 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 section 240.13d-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 other subject to the liabilities of that section of Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 66979W842

CUSIP No. 66979W842

CUSIP No. 66979W842

Explanatory Note

Pursuant to Rule 13d-2 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment No. 1 to the Original Schedule 13D (as defined below) (this “Amendment No. 1”) amends and supplements certain items of the Schedule 13D related to the common shares, no par value (the “Common Shares”) of Nouveau Monde Graphite Inc. (“NMG”), a corporation existing under the federal laws of Canada, filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 1, 2022 (the “Original Schedule 13D” and, as amended by this Amendment No. 1, the “Schedule 13D”). Except as set forth below, all items of the Original Schedule 13D remain unchanged. All capitalized terms contained but not otherwise defined herein shall have the meanings ascribed to such terms in the Original Schedule 13D.

Item 1. Security and Issuer.

Item 1 of the Original Schedule 13D is hereby amended and restated as follows:

This statement on Schedule 13D relates to the Common Shares of NMG, a corporation existing under the federal laws of Canada, whose principal executive offices are located at 481 rue Brassard, Saint-Michel-des-Saints, Quebec, Canada J0K 3B0.

Except for Pallinghurst Bond, each Reporting Person was initially eligible pursuant to Section 13(d)(6)(B) and Rule 13d-1(d) under the Exchange Act to file a report on Schedule 13G as a beneficial owner of more than five percent of Common Shares before NMG registered the Common Shares under Section 12(b) of the Exchange Act on May 21, 2021 (the “Registration”). Pallinghurst International and Pallinghurst Graphite filed the Original Schedule 13D in lieu of a report on Schedule 13G, because, as a result of additional acquisitions of Common Shares of NMG by each such Reporting Persons following the Registration, Pallinghurst International and Pallinghurst Graphite acquired beneficial ownership of more than 2.0% of the Common Shares of NMG during the preceding 12-month period.

Pallinghurst Bond became obligated to file a report on Schedule 13D with respect to the Common Shares of NMG following its acquisition on November 8, 2022 of notes convertible into common shares and warrants of NMG representing, in the aggregate, more than 5.0% of the Common Shares of NMG on an as-converted basis.

Item 2. Identity and Background.

Item 2 of the Original Schedule 13D is hereby amended and restated as follows:

(a)-(c), (f)

Reporting Persons

This Schedule 13D is being filed jointly by the following persons (each a “Reporting Person” and, collectively, the “Reporting Persons”), pursuant to a Joint Filing Agreement (the “Joint Filing Agreement”), attached hereto as Exhibit 7.4, under which the Reporting Persons have agreed to file this Schedule 13D jointly in accordance with Rule 13d-1(k)(1) under the Exchange Act:

Each of the Reporting Persons has a board of directors, which makes voting and investment decisions over the Common Shares owned by it. The board of directors of each of the Reporting Persons is composed of the same individuals (named below under “Covered Individuals”). However, because these boards are elected by different shareholder bases, no single director or shareholder is technically deemed to control voting or disposition of (and to be an ultimate beneficial owner of) the Common Shares owned by each of the Reporting Persons. Thus, no individual or entity is deemed a common beneficial owner of the Common Shares of Pallinghurst International and Pallinghurst Bond.

The Reporting Persons may still be deemed a “group” for purposes of Section 13(d) of the Exchange Act, because their boards of directors are composed of the same individuals and because both Pallinghurst International and Pallinghurst Bond are parties to and have the same set of rights under the Second Amended and Restated Investment Agreement with NMG.

Covered Individuals

Set forth below are the (i) name, (ii) citizenship, (iii) residence or business address and (iv) present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted with respect to each of the directors of each Reporting Person as of the date of this filing (the “Covered Individuals”):

DIRECTORS

(d) None of the Reporting Persons nor, to the respective Reporting Person’s best knowledge, any of the Covered Individuals as of the date of this Schedule 13D, has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) None of the Reporting Persons nor, to the respective Reporting Person’s best knowledge, any of the Covered Individuals as of the date of this Schedule 13D, has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding been subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 4. Purpose of Transaction.

Item 4 of the Original Schedule 13D is hereby amended and supplemented by adding the following:

On November 8, 2022, NMG issued an unsecured convertible note (the “Convertible Note”) to Pallinghurst Bond in a principal amount of US$12,500,000 pursuant to a convertible note subscription agreement, dated October 19, 2022 (the “Convertible Note Subscription Agreement”), between NMG and Pallinghurst Bond. The conversion price of the Convertible Note is US$5.00 per unit, with each unit comprised of one Common Share of NMG and one common share purchase warrant (a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Common Share of NMG at a price of US$5.70 per Common Share for a period of 24 months from the date of issuance thereof upon conversion of the Convertible Note in accordance with its terms. If the Convertible Note were to be converted in whole, Pallinghurst Bond would acquire 2,500,000 Common Shares of NMG and 2,500,000 Warrants, with each Warrant being exercisable for an equivalent number of Common Shares of NMG.

The Convertible Note will mature 36 months from the date of issuance and bear interest at the higher of 6.0% per annum and the 90-day average SOFR+4% (calculated quarterly). Interest will be payable either quarterly in cash on the last business day of each quarter commencing on December 31, 2022, or NMG may elect to capitalize interest and settle in fully paid Common Shares of NMG, subject to the approval of the TSX Venture Exchange. Pallinghurst Bond has the right to convert all or a portion of the principal amount of the Convertible Note at any time up to the maturity date of the Convertible Note.

Upon conversion of the Convertible Note, the Warrants are issuable for no additional consideration but have an exercise price of US$5.70 per Common Share of NMG.

Assuming conversion in whole of the Convertible Note and immediate exercise of the underlying Warrants, Pallinghurst Bond would own 5,000,000 Common Shares of NMG, representing, based on the total outstanding set forth in Item 5, approximately 8.2% of the issued and outstanding Common Shares of NMG on a partially-diluted basis (excluding all other securities convertible or exchangeable into Common Shares of NMG).

Item 5. Interest in Securities of the Issuer.

Item 5 of the Original Schedule 13D is hereby amended and restated as follows:

(a)-(b)

Except as disclosed in this Schedule 13D, none of the Reporting Persons, or, to the best of the Reporting Persons’ knowledge, any of the Covered Individuals, beneficially owns any Common Shares of NMG or has the right to acquire any Common Shares of NMG.

Except as disclosed in this Schedule 13D, none of the Reporting Persons, or, to the best of the Reporting Persons’ knowledge, any of the Covered Individuals, presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Common Shares of NMG that they may be deemed to beneficially own.

(c) Except as described herein, none of the Reporting Persons or, to the best of their knowledge, any of the Covered Individuals, has effected any transaction in the Common Shares of NMG during the past 60 days.

(d) To the best knowledge of the Reporting Persons, no one other than the Reporting Persons and their respective affiliates has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Shares reported herein as beneficially owned by the Reporting Persons.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 of the Original Schedule 13D is hereby amended and supplemented by adding the following:

Convertible Note Subscription Agreement

The information in Item 4 with respect to the Convertible Note Subscription Agreement is incorporated by reference herein to the extent applicable.

This description of the Convertible Note Subscription Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which was filed as Exhibit 99.2 to the Report of Foreign Private Issuer Form 6-K furnished by NMG to the SEC on October 31, 2022 (and is incorporated by reference herein as Exhibit 7.2).

Second Amended and Restated Investment Agreement

As disclosed in Item 6 of the Original Schedule 13D, NMG and Pallinghurst International are party to an amended and restated investment agreement pursuant to which Pallinghurst International was entitled to nominate directors to the board of directors of NMG and granted pre-emptive rights in respect of future offerings of shares of NMG. In connection with the closing on the Convertible Note Subscription Agreement, on November 8, 2022, Pallinghurst International and Pallinghurst Bond (collectively, the “Pallinghurst Entities”) and NMG entered into a second amended and restated investment agreement (the “Second Amended and Restated Investment Agreement”), pursuant to which, among other terms, the Pallinghurst Entities were granted director nomination and pre-emptive rights with respect to NMG. Pursuant to the Second Amended and Restated Investment Agreement, the Pallinghurst Entities are entitled to nominate: (1) three directors to the board of directors of NMG so long as the Pallinghurst Entities (together with their affiliates) hold (in the aggregate, on an as-converted basis) at least 20% of the issued and outstanding Common Shares of NMG; and (2) two directors to the board of directors of NMG so long as the Pallinghurst Entities (together with their affiliates) hold (in the aggregate, on an as-converted basis) less than 20% but greater than 10% of the issued and outstanding Common Shares of NMG. If the Pallinghurst Entities’ aggregate as-converted ownership falls below 10%, their director nominees must resign from the board of directors of NMG and the Pallinghurst Entities will cease to have any rights with respect to director nominations. In addition, the Pallinghurst Entities will be granted by NMG pre-emptive rights in respect of subsequent offerings of Common Shares of NMG or securities that are exercisable for, convertible into or exchangeable for Common Shares of the NMG (the “Convertible Securities”) in order for each of them to maintain, after such transactions, the same pro rata ownership interest (on a partially-diluted basis) that they each respectively had in the Common Shares or Convertible Securities of NMG before such transactions, which rights will continue until the ownership interest of the Pallinghurst Entities fall below 10%. The pre-emptive rights granted under the Second Amended and Restated Investment Agreement are subject to customary exceptions (the “Dilution Events”), provided that the Pallinghurst Entities have the right following a Dilution Event (the “Top-Up Right”) to subscribe and acquire, by way of a private placement, such number of Common Shares or Convertible Securities, as applicable, in order to maintain, after such Dilution Event, the same pro rata ownership interest (on a partially-diluted basis) that they had in the shares or Convertible Securities of NMG before the Dilution Event. The price of the securities to be acquired by the Pallinghurst Entities under their Top-Up Right will be the closing price of the Common Shares of NMG on the TSX Venture Exchange.

This description of the Second Amended and Restated Investment Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which was filed as Exhibit 99.2 to the Report of Foreign Private Issuer Form 6-K furnished by NMG to the SEC on November 14, 2022 (and is incorporated by reference herein as Exhibit 7.3).

Item 7. Material to be Filed as Exhibits.

Item 7 of the Original Schedule 13D is hereby amended and restated as follows:

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.