INFORMATION
STATEMENT
Pursuant
to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C promulgated
thereunder, the notice and this information statement (this “Information Statement”) will be sent or given on or about
December 12, 2016, to the stockholders of record, as of December 1, 2016 (the “Record Date”), of Cardinal Energy Group,
Inc., a Nevada corporation (hereinafter referred to as “we,” “us,” “our,” “Cardinal
Energy” or the “Company”). This Information Statement is being circulated to advise stockholders of actions
already approved and taken without a meeting by written consent of stockholders who hold a majority of the voting power of our
voting stock.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
The
action to be effective at least 20 days after the mailing of this Information Statement is as follows:
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1.
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Approve
an amendment to our articles of incorporation, as amended (the “Articles”), to increase our authorized capital
stock from 200,000,000 to 1,100,000,000 shares, of which 1,000,000,000 will be common stock and 100,000,000 will be preferred
stock (the “Amendment”).
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On
December 1, 2016, our board of directors unanimously approved the Amendment. Subsequent to our board of directors’ approval
of the Amendment, the holders of a majority of the voting power of our voting stock approved, by written consent, the Amendment
on December 1, 2016. The consenting stockholders and their respective approximate ownership percentages of our voting stock, which
total in the aggregate 61.73% of our outstanding voting power, are as follows: Timothy W. Crawford and John R. Jordan. We expect
that the Amendment will be effective on or about January 3, 2017, at such time as a certificate of amendment to our Articles is
filed with the Secretary of State of Nevada.
Pursuant
to Rule 14c-2 promulgated under the Exchange Act, the Amendment will not be effected until at least 20 calendar days after the
mailing of this Information Statement to Cardinal Energy stockholders. The Amendment will be effective after the expiration of
such 20-day period, at such time as a certificate of amendment to our Articles is filed with the Secretary of State of Nevada.
DISSENTERS’
RIGHTS
There
are no rights of appraisal or similar rights of dissenters with respect to any matter described in this Information Statement.
RECORD
DATE AND VOTING SECURITIES
Only
stockholders of record at the close of business on December 1, 2016, the Record Date, are entitled to notice of the information
disclosed in this Information Statement. As of the Record Date, our authorized securities consist of 100,000,000 shares of common
stock with a par value of $0.00001 per share and 100,000,000 shares of preferred stock with a par value of $0.00001 per share.
As of the Record Date, there were 83,429,557 shares of common stock issued and outstanding, held by 126 holders of record. Each
share of common stock is entitled to one vote per share. As of the Record Date, there were 1,000,000 shares of Series A preferred
stock issued and outstanding, held by one holder of record. Each share of Series A preferred stock is entitled to 110 votes per
share. Holders of our common stock and holders of our Series A preferred stock vote together as one class on all matters submitted
to a vote of our stockholders.
EXPENSES
The
costs of preparing, printing and mailing this Information Statement will be borne by Cardinal Energy.
THIS
IS NOT A NOTICE OF A MEETING OF STOCKHOLDERS AND NO STOCKHOLDERS’ MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED
HEREIN. THIS INFORMATION STATEMENT IS BEING FURNISHED TO YOU SOLELY FOR THE PURPOSE OF INFORMING YOU OF THE MATTER DESCRIBED HEREIN.
STOCKHOLDERS’
RIGHTS
The
elimination of the need for a special meeting of the stockholders to approve the action described in this Information Statement
is authorized by Section 78.320(2) of the Nevada Revised Statutes. Section 78.320(2) provides that any action required or permitted
to be taken at a meeting of stockholders of a corporation may be taken without a meeting, before or after the action, if a written
consent thereto is signed by the stockholders holding at least a majority of the voting power. In order to eliminate the costs
and management time involved in holding a special meeting and in order to effect the actions disclosed herein as quickly as possible
in order to accomplish the purposes of our Company, we chose to obtain the written consent of a majority of Cardinal Energy’s
voting power to approve the action described in this Information Statement.
AMENDMENT
OF OUR ARTICLES TO INCREASE OUR AUTHORIZED CAPITAL STOCK
FROM
200,000,000 TO 1,100,000,000 SHARES,
OF
WHICH 1,000,000,000 WILL BE COMMON STOCK AND 100,000,000 WILL BE PREFERRED STOCK
On
December 1, 2016, our board of directors and stockholders holding a majority of our voting power approved the Amendment, which
will have the effect of increasing our authorized capital stock from 200,000,000 to 1,100,000,000 shares, of which 1,000,000,000
will be common stock, par value $0.00001 per share, and 100,000,000 will be preferred stock, $0.00001 par value per share, with
such designations, rights and preferences as our board of directors may determine from time to time. The current Series A Preferred
Stock will remain in full force and unchanged. Set forth below is the text of the Amendment, marked to show the proposed amendments
to our current Articles, with additions underlined and deletions in strikethrough:
Section
1. Capital Stock
The
aggregate number of shares that the Corporation will have the authority to issue is
Two Hundred Million
One
Billion One Hundred Million
(
2
1
,
1
00,000,000) of which
One Hundred Million
One Billion
(
1
1
,
0
00,000,000) shares will be common stock, with a par value of $0.00001 per
share, and One Hundred Million (100,000,000) shares will be preferred stock, with a par value of $0.00001 per share.
The
Preferred Stock may be divided into and issued in series. The Board of Directors of the Corporation is authorized to divide the
authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes. The Board of Directors of the Corporation is authorized, within any limitations
prescribed by law and this Article, to fix and determine the designations, rights, qualifications, preferences, limitations and
terms of the shares of any series of Preferred Stock including but not limited to the following:
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The
rate of dividend, the time of payment of dividends, whether dividends are cumulative, and the date from which any dividends
shall accrue;
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Whether
shares may be redeemed, and, if so, the redemption price and the terms and conditions of redemption;
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The
amount payable upon shares in the event of voluntary or involuntary liquidation;
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Sinking
fund or other provisions, if any, for the redemption or purchase of shares;
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The
terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion;
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Voting
powers, if any, provided that if any of the Preferred Stock or series thereof shall have voting rights, such Preferred Stock
or series shall vote only on a share for share basis with the Common Stock on any matter, including but not limited to the
election of directors, for which such Preferred Stock or series has such rights; and,
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Subject
to the foregoing, such other terms, qualifications, privileges, limitations, options, restrictions, and special or relative
rights and preferences, if any, of shares or such series as the Board of Directors of the Corporation may, at the time so
acting, lawfully fix and determine under the laws of the State of Nevada.
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The
Corporation shall not declare, pay or set apart for payment any dividend or other distribution (unless payable solely in shares
of Common Stock or other class of stock junior to the Preferred Stock as to dividends or upon liquidation) in respect of Common
Stock, or other class of stock junior the Preferred Stock, nor shall it redeem, purchase or otherwise acquire for consideration
shares of any of the foregoing, unless dividends, if any, payable to holders of Preferred Stock for the current period (and in
the case of cumulative dividends, if any, payable to holder of Preferred Stock for the current period and in the case of cumulative
dividends, if any, for all past periods) have been paid, are being paid or have been set aside for payments, in accordance with
the terms of the Preferred Stock, as fixed by the Board of Directors.
In
the event of the liquidation of the Corporation, holders of Preferred Stock shall be entitled to received, before any payment
or distribution on the Common Stock or any other class of stock junior to the Preferred Stock upon liquidation, a distribution
per share in the amount of the liquidation preference, if any, fixed or determined in accordance with the terms of such Preferred
Stock plus, if so provided in such terms, an amount per share equal to accumulated and unpaid dividends in respect of such Preferred
Stock (whether or not earned or declared) to the date of such distribution. Neither the sale, lease or exchange of all or substantially
all of the property and assets of the Corporation, nor any consolidation or merger of the Corporation, shall be deemed to be a
liquidation for the purposes of this Article.
We
currently have authorized capital stock of 200,000,000 shares, of which 100,000,000 shares are common stock and 100,000,000 are
preferred stock. We have 83,429,557 shares of common stock and 1,000,000 shares of Series A Preferred Stock, respectively, issued
and outstanding as of the Record Date. Upon effectiveness of the Amendment, our authorized capital stock will consist of 1,100,000,000
shares, of which 1,000,000,000 will be common stock and 100,000,000 will be preferred stock, with such designations, rights and
preferences as our board of directors may determine from time to time. The current Series A Preferred Stock will remain in full
force and unchanged.
Purposes
of the Increase in Authorized Shares
Having
an increased number of authorized but unissued shares of our capital stock would allow us to take prompt action with respect to
corporate opportunities that develop, without the delay and expense of convening a special meeting of stockholders for the purpose
of approving an increase in our capitalization. There will be no change in the number of authorized preferred shares as a result
of the increase in authorized shares. The shares of preferred stock would be available for issuance from time to time as determined
by our board of directors for any proper corporate purpose. Such purposes might include, without limitation, issuance in public
or private sales for cash as a means of obtaining additional capital for use in our business and operations, and issuance as part
or all of the consideration required to be paid by us for acquisitions of other businesses or assets. Notwithstanding the foregoing,
we have no obligation to issue such shares and there are no plans, proposals or arrangements currently contemplated by us that
would involve the issuance of the preferred shares to acquire another company or its assets, or for any other corporate purpose
stated. In connection with the anticipated continued growth of our business, our board of directors believes it is in our best
interests to increase the number of authorized shares of capital stock and to create a class of preferred stock. The additional
capital stock can provide flexibility in structuring the terms of any future agreements, as well as any future financing and recapitalization
efforts.
Potential
Anti-Takeover Effects of the Increase in Capital Stock
Any
additional issuance of common or preferred stock could, under certain circumstances, have the effect of delaying or preventing
a change in control of our company by increasing the number of outstanding shares entitled to vote and by increasing the number
of votes required to approve a change in control. Shares of common or preferred stock could be issued, or rights to purchase such
shares could be issued, to render more difficult or discourage an attempt to obtain control of our company by means of a tender
offer, proxy contest, merger or otherwise. The ability of our board of directors to issue such additional shares of common stock
and/or to designate one or more series or classes of preferred stock for issuance could discourage an attempt by a party to acquire
control of our company by tender offer or other means. Such issuances could therefore deprive stockholders of benefits that could
result from such an attempt, such as the realization of a premium over the market price that such an attempt could cause. Moreover,
the issuance of such additional shares of common or preferred stock to persons whose interests are aligned with that of our board
of directors could make it more difficult to remove incumbent officers and directors from office, even if such change were to
be favorable to stockholders generally.
Although
the increased proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover
effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the
composition of our board or contemplating a tender offer or other transaction for the combination of our company with another
company), the Amendment was not proposed in response to any effort of which we are aware to accumulate shares of common stock
or obtain control of us, nor is it part of a plan by management to recommend a series of similar actions having an anti-takeover
effect to the board and our stockholders.
To
the extent that the increase in the number of authorized shares may have anti-takeover effects, the Amendment, when effected,
may encourage persons seeking to acquire us to negotiate directly with our board of directors, enabling our board to consider
a proposed transaction in a manner that best serves our stockholders’ interests.
Our
board believes that it is advisable and in the best interests of our company to have available authorized but undesignated shares
of preferred stock in an amount adequate to provide for our future needs. The designation of one or more classes or series of
preferred stock will be available for issuance from time to time as may be deemed advisable or required for various purposes,
including the issuance of shares in connection with financing or acquisition transactions. We have no present plans or commitments
for the issuance or use of the proposed shares of preferred stock in connection with any financing.
Procedure
for Effecting the Amendment of our Articles
The
Amendment will become effective at such time as a certificate of amendment to our Articles is filed with the Secretary of State
of Nevada. Pursuant to Rule 14c-2 promulgated under the Exchange Act, the Amendment will not be effected until at least 20 calendar
days after the mailing of this Information Statement to Cardinal Energy stockholders. We expect to file a certificate of amendment
to our Articles with the Secretary of State of Nevada effective on or about January 3, 2017.
INTEREST
OF CERTAIN PERSONS IN OR OPPOSITION TO MATTER TO BE ACTED UPON
Except
as disclosed elsewhere in this Information Statement, none of the following persons has any substantial interest, direct or indirect,
by security holdings or otherwise in any matter to be acted upon:
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Any
director or officer of our Company,
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Any
proposed nominee for election as a director of our Company, and
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Any
associate or affiliate of any of the foregoing persons.
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The
stockholdings of our directors and officers are listed below in the section entitled “Security Ownership of Certain Beneficial
Owners and Management.” No director has advised us that he intends to oppose the Amendment.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial ownership of our common and preferred stock as of December
1, 2016 by the following persons:
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Each
person known by the Company to beneficially own more than 5% of the Company’s outstanding common stock,
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Each
of the named executive officers (as defined in Item 402 of Regulation S-K),
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Each
of our directors, and
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All
of the Company’s executive officers and directors as a group.
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Beneficial
ownership is determined in accordance with the rules and regulations of the SEC. The number of shares and the percentage beneficially
owned by each individual listed above include shares that are subject to options held by that individual that are immediately
exercisable or exercisable within 60 days from December 1, 2016, and the number of shares and the percentage beneficially owned
by all officers and directors as a group includes shares subject to options held by all officers and directors as a group that
are immediately exercisable or exercisable within 60 days from December 1, 2016.
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Common Stock
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Series A Preferred Stock
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Shareholder
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No. of
Shares
Owned
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Percent of
Outstanding
Common
Stock (1)
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No. of
Shares
Owned
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Percent of
Outstanding
Series A
Preferred
Stock (2)
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Percent
of Total
Voting
Power (3)
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Timothy W. Crawford
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9,382,606
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11.25
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%
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1,000,000
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100.0
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%
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61.7
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%
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John R. Jordan
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50,000
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0.06
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%
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—
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—
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0.03
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%
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Total
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9,432,606
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11.31
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%
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1,000,000
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100.0
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%
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61.73
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%
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(1)
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Calculated
on the basis of 83,429,557 shares of common stock outstanding on December 1,2016.
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(2)
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Calculated
on the basis of 1,000,000 shares of Series A preferred stock outstanding on December 1,2016.
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(3)
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Calculated
on the basis of 83,429,557 shares of common stock and 1,000,000 shares of Series A preferred stock, respectively, outstanding
on December 1,2016. Each share of Series A preferred stock entitles the holder thereof to 110 votes per share. Holders of
shares of common stock and holders of shares of Series A preferred stock vote together as one class on all matters submitted
to a vote of our stockholders.
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Changes
in Control
We
are unaware of any contract of other arrangement the operation of which may at a subsequent date result in a change of control
of our Company.
ADDITIONAL
INFORMATION
We
are subject to the disclosure requirements of the Exchange Act, and in accordance therewith, file reports, information statements
and other information, including annual and quarterly reports on Form 10-K and 10-Q, respectively, with the SEC. Reports and other
information filed by Cardinal Energy can be inspected and copied at the public reference facilities maintained by the SEC at 100
F. Street, N.E., Washington DC 20549. Copies of such material can also be obtained upon written request addressed to the SEC,
Public Reference Section, 100 F. Street, N.E., Washington DC 20549 at prescribed rates. In addition, the SEC maintains a website
(http://www.sec.gov) that contains reports, information statements and other information regarding issuers that file electronically
with the SEC through the EDGAR system. You may request a copy of documents filed with or furnished to the SEC by us, at no cost,
by writing to Cardinal Energy Group, Inc., 500 Chestnut Street, Suite 1615, Abilene, TX 79602, Attn: John R. Jordan, Chief Financial
Officer, or by telephoning the Company at (325) 762-2112.
Our
principal executive office is located at 500 Chestnut Street, Suite 1615, Abilene, TX 79602. Our corporate website is www.cardinalenergygroup.com
and our phone number is (325) 762-2112.
DELIVERY
OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS
If
hard copies of the materials are requested, we will send only one Information Statement and other corporate mailings to stockholders
who share a single address unless we received contrary instructions from any stockholder at that address. This practice, known
as “householding,” is designed to reduce our printing and postage costs. However, the Company will deliver promptly
upon written or oral request a separate copy of the Information Statement to a stockholder at a shared address to which a single
copy of the Information Statement was delivered. You may make such a written or oral request by (a) sending a written notification
stating (i) your name, (ii) your shared address and (iii) the address to which the Company should direct the additional copy of
the Information Statement, to Cardinal Energy Group, Inc., 500 Chestnut Street, Suite 1615, Abilene, TX 79602, Attn: John R. Jordan,
Chief Financial Officer, or by telephoning the Company at (325) 762-2112.
If
multiple stockholders sharing an address have received one copy of this Information Statement or any other corporate mailing and
would prefer the Company to mail each stockholder a separate copy of future mailings, you may mail notification to, or call the
Company at, its principal executive offices. Additionally, if current stockholders with a shared address received multiple copies
of this Information Statement or other corporate mailings and would prefer the Company to mail one copy of future mailings to
stockholders at the shared address, notification of such request may also be made by mail or telephone to the Company’s
principal executive offices.
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Cardinal
Energy Group, Inc.
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/s/
Timothy W. Crawford
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Timothy
W. Crawford
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Chief
Executive Officer
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