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Investing.com -- Abacus Life Inc. (NASDAQ:ABL) stock jumped 10% after the company announced a warrant exchange offer aimed at simplifying its capital structure and reducing potential dilution.
The alternative asset management firm is offering warrant holders the opportunity to receive 0.23 shares of common stock for each warrant tendered. Through this exchange, Abacus could issue up to 4,743,381 new shares of common stock in exchange for all outstanding warrants.
The company stated that the purpose of the offer is to "simplify the Company’s capital structure and reduce the potential dilutive impact of the warrants, thereby providing the Company with more flexibility for financing its operations in the future."
Concurrent with the exchange offer, Abacus is soliciting consent from public warrant holders to amend the warrant agreement. The amendment would allow the company to require that any remaining warrants after the offer closes be exchanged at a 10% less favorable ratio of 0.207 shares per warrant.
The company has already secured agreements from holders representing approximately 25% of outstanding public warrants and 94% of private placement warrants to participate in the exchange. The offer will remain open until July 29, 2025.
As of June 30, Abacus had 97,867,821 shares of common stock outstanding and 20,623,395 total warrants. If all warrant holders participate in the exchange, the company’s outstanding shares would increase by approximately 5% to 102,611,202, while eliminating all outstanding warrants.
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