Lets leave CDNL for a minute and talk about how I evaluate investment grade companies on the big boards.
Using fundamentals, I always look at what the big guys are doing. "What is the Institutional ownership %".
Institutional investment managers have many college grad's running financial numbers. They invest millions when the fundamentals are good. They know what retail investors don't know. They research deeper with departments of people that do nothing but research, using computer models and the like.
So it stands to reason; if Institutional investment is strong. The big guys know MORE then me. So I follow that fundamental as a main factor. On average under 30% institution is poor, 30% to 50% average and above 50% strong. So I personally wouldn't event think of holding a long position in a company with less then 50% Institutional ownership.
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Now we'll go back to CDNL. Think of Mr. Li Jie Shan, the China big guy, as an OTC institutional investor. I see he wants eventually to own 51% of the company. So I feel he has a plan to increase potential to reality. Because he has used many business types to aid with a $7.5 mil funding deal decision. He knows a hell of a lot more then me, about CDNL's potential. He designed an agreement that protects himself, as Cardinal Resources has also.
So the more I can understand the China JV future share structure requirements in the various funding stages, the more I'll raise my comfort level, of the deal completing. What is Li Jie Shan's end game.
Due to my research; I'm seeing he requires CDNL's assets to be owned by the China JV company. He require the product manufacturing to be by "probably a related manufacturer" in China. He requires his board member added. He wants CDNL to be debit free. He wanted room in the share structure for increase investment (debit conversion). Yet he wants buy backs ??? and a reverse splits to position that share structure to eventually conform to big board company standards eventually. When the complete deal is finished.
He also WANTED retail to see 10 cents a share as true value !!! He wants existing debit holders to convert and hold cheap shares. Thus eating up a part of the new AS. Then IMO he expects the OTC game to be used by these VC investment firms for their ROI. (maybe event ask for) Which will raise the company fundamentals as price moves to 10 cents a share. Putting CDNL market cap closer to up listing requirements. When a reverse split will cap it all off, raising price also.
VC shares are not restricted like his. IMO his plan is to use them to get the share price to his first tranche 10 cent price level. And when they are all gone. He'll close his second trance at high discount levels allowing a 51% ownership for the China JV.
Each stage giving him assurances he's plan is on track, before enacting the next stage. Ending with Cardinal Resources becoming a Chinese company, with product manufacturing, & board members from China. But listed on a US national exchange.
What happens to the existing owner? He will go from owning over 10% of a start up. To owning 49% of a large company. And probably maintain a board seat. Without having to except a reverse merger deal and remaining on the OTC. His protection is the blank check preferred shares he can issue himself for .001 any time he doesn't like what's going on and regain complete control.
Welcome to my mind!
IMO this whole process should take over a year and I'll be watching filings to see if my guessing is correct. While swing trading the price action along the way.
Mr. Li Jie Shan has protection built into this deal, Kevin Jones has and I also have.
Watching cost nothing. That's my protection.
