Cardinal Resources Inc. (OTCMKTS:CDNL) Buckles Under The Pressure

Cardinal Resources Inc. (OTCMKTS:CDNL) had managed to rise to a dizzying high of nearly two cents – but it looks like its ascent may be at an end. And is it really any wonder that the ticker is now falling?

A quick check reveals that CDNL‘s prolonged jump was sparked and maintained by announcements that the company has gotten its hands on some cash to finance its operations. While that was universally regarded as good news worth notice, frankly, said announcements caused quite a bit of hype – and we all know what the ultimate fate of hyped up OTC markets tickers is.

In CDNL‘s case, the danger of a crash was especially high, since those scant few optimistic announcements were the only source of information that investors had on the company. It was supposed to file its annual report for the fiscal 2015 a couple of weeks ago. Said filings is yet to hit the web – which is enough to shake the confidence of any investor.

This state of developments is especially troubling in light of the company’s tendency to resort to toxic dilution, which was still haunting investor value the last time it reported. As per said filing, as of the end of September 2015, CDNL had about $500 thousand worth of debt convertible into shares of the company’s common stock at discounts varying between 25% and 50%. And, judging by how the company’s share structure has changed over time, the holders of said notes are not the least bit shy to exercise them.

Suffice it to say that January 14, 2016 saw the total shares that CDNL had outstanding rise all the way to to 216 million. This total was 80 million higher than it had been on October 15, 2015 – and that’s not even the end of it. No, not by a long shot.

The April 11 Schedule 13G statement clearly states that, in owning over 51 million shares of CDNL‘s common stock, Tangiers Investment Group, LLC. now owned 10% of CDNL‘s total common stock outstanding. Investors are advised to do the math here, because it would benefit them to know how the facts stand, even if said facts are not to their liking.

So far, we have listed three separate enormous red flags, any one of which could have been responsible for CDNL’s crash. There are plenty more when those came from – and investors are wholeheartedly advised to familiarize themselves with said potential pitfalls, because, as the two previous sessions proved, CDNL‘s route on the charts from this point onward is far from certain.