narmac - your logic baffles me. I am not stuck on only one thing but I do recognize the better path for what the conditions are. Your logic has you taking on more risk for no reason or added advantage. If your warrants are near expiry and you have faith in a good outcome, you exercise and hold. If you don't feel strongly about a good outcome, you exercise and sell if you are in the money. There are varying choices in between depending on your outcome confidence. If you don't have confidence and the warrants are trading and out of the money, sell them and if they don't trade, let them expire. There are lots of options. 

On the other hand and this is where I don't understand you wanting to take on more unnecessary risk. If you are given, say a 1 year extension on the warrants, why would you want to exercise and put more money at risk. You can just hold the warrants without putting out more cash and still have the same position if there is a payday. Your price to buy is set. It doesn't matter if a buyout deal is announced and the share price jumps to $40. You then exercise at say $2.05 and buy your shares during the time that the deal is being taken to the shareholders for approval. You have still capitalized on the whole benefit but did not put that extra capital to risk before the announcement. You might have total confidence in a good outcome but the fact is you didn't need to put that cash at any risk. You could wait until there was no risk and then exercise. Then if for some unknown reason the company collapsed or any other tragedy during that warrant period happened, you have not lost any of that money you would have paid to exercise. You might say that won't happen but the fact is if you didn't exercise it wouldn't matter as far as that money because it is still in your pocket. 

That is why you don't exercise before you have to (like Ken Dart waited until the last moment) and hold the same position with less risk. As long as your warrants haven't expired, those shares are waiting in treasury for you whenever you wish so exercise when there is no risk if possible. That is why I say the only reason to exercise long before expiry is because you are in the money and want to sell. If you are exercising to hold, keep the warrants at less risk until you have to exercise or lose them. That is why extending the term to expiry will not prod people to exercise soon, rather it will make them comfortable to just hold until closer to the new expiry.