RITE Reduces Potential Dilution by Nearly 2 Billion Shares and Caps the Series NMC Sinking-Fund Obligation
https://www.newsfilecorp.com/release/317038
Dallas, Texas--(Newsfile Corp. - October 2, 2026) - MineralRite Corporation (OTCID: RITE) today announced that it has completed a transaction that reduces the potential dilution that would have resulted from full exercise of the Series NMC warrants without a repurchase and establishes a contractual ceiling on the total amount payable under the sinking fund for the Series NMC Preferred Stock.
Repurchase of nearly 3.9 million Series NMC Preferred shares reduces potential dilution by nearly 2 billion shares
When RITE acquired the three leases and tailings from NMC, Inc., it issued 6.9 million Series NMC Preferred shares and warrants to acquire an additional 6.9 million Series NMC Preferred shares. Subsequently, in a private transaction, Abstract Concepts 1618 LLC acquired from NMC, Inc. the 6.9 million Series NMC Preferred shares and 6.9 million associated warrants, together with the rights, preferences and obligations associated with those securities. RITE was not a party to that transaction and issued no new securities in connection with Abstract's acquisition. Accordingly, exercise of all of the warrants would have resulted in 13.8 million Series NMC Preferred shares outstanding.
Under the transaction just completed with Abstract, RITE repurchased approximately 3.9 million of the outstanding Series NMC Preferred shares coincident with the irrevocable exercise of the 6.9 million Series NMC warrants. The shares issuable upon exercise of those warrants will be issued when duly authorized and available for issuance.
After giving effect to the repurchase of approximately 3.9 million Series NMC Preferred shares and the issuance of 6.9 million shares upon the warrant exercises, approximately 9.9 million Series NMC Preferred shares are expected to be outstanding, thereby reducing by approximately 3.9 million the number of shares that would have been outstanding had all of the warrants been exercised without a repurchase.
Each share of Series NMC Preferred stock is convertible into 500 shares of common stock. The Series NMC Preferred remains subject to the sinking fund, however, and shares repurchased under it, to the extent the Company has funds available, would not be converted.
The difference is particularly significant to RITE's common shareholders. If the outstanding Series NMC Preferred shares are not repurchased under the sinking fund and are instead converted into common stock, the repurchase will have avoided the issuance of approximately 2.0 billion shares of common stock compared with exercise of all of the warrants without a repurchase.
Contractual cap limits the total Series NMC sinking-fund amount to approximately $269 million
RITE's Series NMC Preferred shares were previously subject to a sinking-fund provision under which the dollar cost to the Company of satisfying its repurchase obligation increased by 5% annually. Under the new agreement, the accreted value of the Series NMC Preferred, approximately $27.23 per share or approximately $269 million in the aggregate, is fixed and will no longer accrete by 5% annually. The cap applies to all of the Series NMC Preferred shares that will be outstanding after the transaction, all of which are held by Abstract, and any transfer of those shares is conditioned on the transferee agreeing in writing to be bound by the same terms. The cap is a contractual agreement between the Company and Abstract.
Repurchases under the sinking fund remain contingent upon the availability of sufficient funds and are made only as the Company has the financial resources to fund them. Under the original agreement governing the Series NMC Preferred, whose rights Abstract now holds, the Company is required to make a portion of the funds it raises or otherwise generates available for additional sinking-fund repurchases of Series NMC Preferred shares.
Before the transaction, 6.9 million Series NMC Preferred shares were outstanding and Abstract held warrants to acquire 6.9 million additional shares, for a potential total of 13.8 million shares. At today's buy-back price of approximately $27.23 per share, the aggregate sinking-fund exposure for those 13.8 million shares, if all of the warrants were exercised, would have been approximately $375.8 million. Additionally, that amount would increase by 5% annually.
As a result of the transaction, approximately 9.9 million shares are expected to be outstanding, and at the buy-back price of approximately $27.23 per share, the aggregate sinking-fund exposure is approximately $269 million.
Without the addition of the cap, that amount would continue to increase by 5% annually, or approximately $13.5 million per year. Under the new agreement, that amount is fixed at approximately $269 million and will not increase.
How RITE accomplished the transaction
RITE accomplished the preferred-stock repurchase through an integrated transaction with Abstract, rather than by making a corresponding cash payment to Abstract under the Series NMC sinking-fund provisions.
Under the integrated structure, RITE repurchased approximately 3.9 million Series NMC Preferred shares, which ceased to be outstanding. At the same time, Abstract and its affiliates irrevocably exercised the previously outstanding warrants they owned for 53,500 shares of Series D Preferred Stock and 6,900,000 shares of Series NMC Preferred Stock. Those shares will be issued when duly authorized and available for issuance.
To effectuate the repurchase, RITE issued an approximately $106.7 million promissory note to Abstract. Abstract then applied the note toward the repurchase of royalty interests and the exercise of the Series D and Series NMC warrants. Those applications fully satisfied the note, which was then cancelled, allowing RITE to complete the approximately $106.7 million repurchase without a corresponding cash payment by the Company. Because the exercise prices of the warrants were satisfied through application of the Company's own note, the Company also received no cash proceeds from the warrant exercises.
Filing of a Restated Certificate of Formation with the Texas Secretary of State
RITE obtained the required approvals from the holders of its preferred-stock series and is in the process of filing a Restated Certificate of Formation with the Texas Secretary of State. Upon effectiveness, the Restated Certificate will set the authorized numbers of Series D Preferred Stock and Series NMC Preferred Stock at 60,000 and 10,000,000 shares, respectively. Upon effectiveness, the Restated Certificate will provide the authorized Series D and Series NMC Preferred shares necessary to issue the shares underlying the warrant exercises completed as part of the transaction, without increasing the Company's total authorized preferred stock.
The Restated Certificate also clarifies the treatment of repurchased or otherwise reacquired preferred shares, incorporates into each preferred-stock designation an existing Bylaw requirement concerning action by written consent, and corrects various scrivener's errors.
Related-party transaction
Abstract Concepts 1618 LLC, which is owned and managed by Lloyd B. Hendricks III, is a related party of RITE because it beneficially owns more than 5% of the Company's common stock. Mr. Hendricks and his affiliates are subject to a Shareholder Control Limitation and Standstill Agreement as previously reported in a Form 8-K filed on May 7, 2026. The prices for the Series NMC repurchase, the royalty repurchases and the warrant exercises followed existing contractual terms, and RITE and Abstract worked together to negotiate the cashless structure and the sinking-fund cap. Additional information is available in RITE's Current Report on Form 8-K filed with the SEC today.
Management Commentary
"This transaction was possible in large part because of RITE's longstanding relationship with Abstract and our ability to work together to find solutions that make sense for both parties," said James Burgauer, President and CEO of MineralRite Corporation. "Rather than looking at the preferred shares, the warrants, the royalty interests and the sinking-fund obligation as separate issues, we were able to bring them together into a single transaction that produced a significant benefit for RITE and its shareholders."
Burgauer continued, "The result speaks for itself. We repurchased approximately 3.9 million Series NMC Preferred shares, representing approximately 2 billion shares of common stock that would otherwise have been potentially issuable upon conversion had the warrants been exercised without a repurchase; agreed with Abstract to a contractual cap of approximately $269 million on the total amount payable under the Series NMC sinking fund; and completed the approximately $106.7 million repurchase through an integrated non-cash exchange, without a cash payment by the Company. I believe this transaction demonstrates the value that can be created when parties with a longstanding business relationship are willing to work together toward a mutually beneficial result."
https://www.newsfilecorp.com/release/317038
Dallas, Texas--(Newsfile Corp. - October 2, 2026) - MineralRite Corporation (OTCID: RITE) today announced that it has completed a transaction that reduces the potential dilution that would have resulted from full exercise of the Series NMC warrants without a repurchase and establishes a contractual ceiling on the total amount payable under the sinking fund for the Series NMC Preferred Stock.
Repurchase of nearly 3.9 million Series NMC Preferred shares reduces potential dilution by nearly 2 billion shares
When RITE acquired the three leases and tailings from NMC, Inc., it issued 6.9 million Series NMC Preferred shares and warrants to acquire an additional 6.9 million Series NMC Preferred shares. Subsequently, in a private transaction, Abstract Concepts 1618 LLC acquired from NMC, Inc. the 6.9 million Series NMC Preferred shares and 6.9 million associated warrants, together with the rights, preferences and obligations associated with those securities. RITE was not a party to that transaction and issued no new securities in connection with Abstract's acquisition. Accordingly, exercise of all of the warrants would have resulted in 13.8 million Series NMC Preferred shares outstanding.
Under the transaction just completed with Abstract, RITE repurchased approximately 3.9 million of the outstanding Series NMC Preferred shares coincident with the irrevocable exercise of the 6.9 million Series NMC warrants. The shares issuable upon exercise of those warrants will be issued when duly authorized and available for issuance.
After giving effect to the repurchase of approximately 3.9 million Series NMC Preferred shares and the issuance of 6.9 million shares upon the warrant exercises, approximately 9.9 million Series NMC Preferred shares are expected to be outstanding, thereby reducing by approximately 3.9 million the number of shares that would have been outstanding had all of the warrants been exercised without a repurchase.
Each share of Series NMC Preferred stock is convertible into 500 shares of common stock. The Series NMC Preferred remains subject to the sinking fund, however, and shares repurchased under it, to the extent the Company has funds available, would not be converted.
The difference is particularly significant to RITE's common shareholders. If the outstanding Series NMC Preferred shares are not repurchased under the sinking fund and are instead converted into common stock, the repurchase will have avoided the issuance of approximately 2.0 billion shares of common stock compared with exercise of all of the warrants without a repurchase.
Contractual cap limits the total Series NMC sinking-fund amount to approximately $269 million
RITE's Series NMC Preferred shares were previously subject to a sinking-fund provision under which the dollar cost to the Company of satisfying its repurchase obligation increased by 5% annually. Under the new agreement, the accreted value of the Series NMC Preferred, approximately $27.23 per share or approximately $269 million in the aggregate, is fixed and will no longer accrete by 5% annually. The cap applies to all of the Series NMC Preferred shares that will be outstanding after the transaction, all of which are held by Abstract, and any transfer of those shares is conditioned on the transferee agreeing in writing to be bound by the same terms. The cap is a contractual agreement between the Company and Abstract.
Repurchases under the sinking fund remain contingent upon the availability of sufficient funds and are made only as the Company has the financial resources to fund them. Under the original agreement governing the Series NMC Preferred, whose rights Abstract now holds, the Company is required to make a portion of the funds it raises or otherwise generates available for additional sinking-fund repurchases of Series NMC Preferred shares.
Before the transaction, 6.9 million Series NMC Preferred shares were outstanding and Abstract held warrants to acquire 6.9 million additional shares, for a potential total of 13.8 million shares. At today's buy-back price of approximately $27.23 per share, the aggregate sinking-fund exposure for those 13.8 million shares, if all of the warrants were exercised, would have been approximately $375.8 million. Additionally, that amount would increase by 5% annually.
As a result of the transaction, approximately 9.9 million shares are expected to be outstanding, and at the buy-back price of approximately $27.23 per share, the aggregate sinking-fund exposure is approximately $269 million.
Without the addition of the cap, that amount would continue to increase by 5% annually, or approximately $13.5 million per year. Under the new agreement, that amount is fixed at approximately $269 million and will not increase.
How RITE accomplished the transaction
RITE accomplished the preferred-stock repurchase through an integrated transaction with Abstract, rather than by making a corresponding cash payment to Abstract under the Series NMC sinking-fund provisions.
Under the integrated structure, RITE repurchased approximately 3.9 million Series NMC Preferred shares, which ceased to be outstanding. At the same time, Abstract and its affiliates irrevocably exercised the previously outstanding warrants they owned for 53,500 shares of Series D Preferred Stock and 6,900,000 shares of Series NMC Preferred Stock. Those shares will be issued when duly authorized and available for issuance.
To effectuate the repurchase, RITE issued an approximately $106.7 million promissory note to Abstract. Abstract then applied the note toward the repurchase of royalty interests and the exercise of the Series D and Series NMC warrants. Those applications fully satisfied the note, which was then cancelled, allowing RITE to complete the approximately $106.7 million repurchase without a corresponding cash payment by the Company. Because the exercise prices of the warrants were satisfied through application of the Company's own note, the Company also received no cash proceeds from the warrant exercises.
Filing of a Restated Certificate of Formation with the Texas Secretary of State
RITE obtained the required approvals from the holders of its preferred-stock series and is in the process of filing a Restated Certificate of Formation with the Texas Secretary of State. Upon effectiveness, the Restated Certificate will set the authorized numbers of Series D Preferred Stock and Series NMC Preferred Stock at 60,000 and 10,000,000 shares, respectively. Upon effectiveness, the Restated Certificate will provide the authorized Series D and Series NMC Preferred shares necessary to issue the shares underlying the warrant exercises completed as part of the transaction, without increasing the Company's total authorized preferred stock.
The Restated Certificate also clarifies the treatment of repurchased or otherwise reacquired preferred shares, incorporates into each preferred-stock designation an existing Bylaw requirement concerning action by written consent, and corrects various scrivener's errors.
Related-party transaction
Abstract Concepts 1618 LLC, which is owned and managed by Lloyd B. Hendricks III, is a related party of RITE because it beneficially owns more than 5% of the Company's common stock. Mr. Hendricks and his affiliates are subject to a Shareholder Control Limitation and Standstill Agreement as previously reported in a Form 8-K filed on May 7, 2026. The prices for the Series NMC repurchase, the royalty repurchases and the warrant exercises followed existing contractual terms, and RITE and Abstract worked together to negotiate the cashless structure and the sinking-fund cap. Additional information is available in RITE's Current Report on Form 8-K filed with the SEC today.
Management Commentary
"This transaction was possible in large part because of RITE's longstanding relationship with Abstract and our ability to work together to find solutions that make sense for both parties," said James Burgauer, President and CEO of MineralRite Corporation. "Rather than looking at the preferred shares, the warrants, the royalty interests and the sinking-fund obligation as separate issues, we were able to bring them together into a single transaction that produced a significant benefit for RITE and its shareholders."
Burgauer continued, "The result speaks for itself. We repurchased approximately 3.9 million Series NMC Preferred shares, representing approximately 2 billion shares of common stock that would otherwise have been potentially issuable upon conversion had the warrants been exercised without a repurchase; agreed with Abstract to a contractual cap of approximately $269 million on the total amount payable under the Series NMC sinking fund; and completed the approximately $106.7 million repurchase through an integrated non-cash exchange, without a cash payment by the Company. I believe this transaction demonstrates the value that can be created when parties with a longstanding business relationship are willing to work together toward a mutually beneficial result."
