In the grand scheme of things, nobody should honestly say they're surprised. The company has been lining up these deals for quite some time, and though not all of them quite materialized in the way -- or when -- a lot of shareholders were expecting, all of the deals done thus far were deals the company said were in the works weeks ago, if not months ago. All the company is doing now is just gathering the fruits of their labor.
What I'm talking about is Cardinal Resources (CDNL). Yes, you've heard a lot about CDNL from us lately, but for good reason. You're hearing about Cardinal Resources again from us today for another good reason, but a reason I'm willing to best most of you didn't have on your radar since it was the opportunity we've heard the least about so far.
Regardless of how long the opportunities have been brewing up, just know that CDNL is going to be booking the sale of at least two Red Bird Systems in the fourth quarter, largely representing its inaugural revenue from the amazing device.
I'm confident most of you are plenty familiar with CDNL by now, so I don't want to get too deep into the discussion of what it is and why it matters. But, for the benefit of those who aren't familiar with it, I can summarize the story like this - Cardinal Resources makes a water-cleaning system that works anywhere, goes anywhere, and can convert almost any source of water into clean, drinkable water. It even comes with its own solar panels, so electricity isn't needed. And we're not talking about a water pitcher with a filter in it. We're talking about a device that serves between 5000 and 20,000 people.
Almost needless to say, it's a life-changing invention for the half-a-billion people in the world that simply don't have access to clean drinking water.
While the technology is brilliant, the company hasn't had an easy go of things lately. Through no fault of its own, it's huge deal with Cameroon 's CAMWATER has been stymied by red tape, and the distributor in Panama that was supposed to take delivery of its first unit in September didn't actually do so until earlier this month.
It was worth the wait, however. Once people in Panama saw the Red Bird System in action, the wheels were immediately put into motion to buy three more. At the same time, the legal wall that's gotten in the way of proceeding with the CAMWATER agreement is slowly but surely now being torn down by the Senate.
Thing is, SURPRISE! Today's news doesn't concern progress on either of those fronts.
Remember back on October 13th how the company raised several million dollars worth of funding by selling 51% of itself to a Chinese consortium that didn't just want an investment in a novel idea, but also wanted to build a joint venture that would distribute Red Bird Systems in China? It was the first and last we heard of it until today. As it turns out, that partner/investor wasn't just blowing smoke. That partner/investor's consortium just ordered one of these systems, and is planning on buying two more as part of just its initial order.
As we mentioned on Thursday, this is one of those scenarios where the physical presence of one of the devices in a geographic market can spur the order of two or three more. Once a few of these systems are seen in action, I can something of a sales chain reaction unfurling not unlike what we've already started to see in Panama.
Thing is, I'm willing to bet China is a far bigger market than Panama (or Cameroon), just because China has an enormous population, and never seems to lack funding for the things it really, really wants. Indeed, as the press release below says, the clean water market in China is a $29 billion opportunity.
The important part of the news for investors is just appreciating the fact that the sale of the first unit is always the toughest. They get progressively easier from here, once would-be buyers see someone else has bought one and likes it.
I'd also be kidding you and myself if I were to say this wasn't a highly-vindicating event for a company that had more than its fair share of nay-sayers.
That said, while vindicating for the company, it's also been plenty rewarding for CDNL shareholders who had the guts to stick with it or the foresight to jump on board in October or early November when the stock was at a multi-month low and news wasn't flowing. This has always been a great business idea. It just took a while to prove it. Now that it has though, CDNL shares have advanced more than 1000% in less than two weeks. And, with the way the volume is still picking up on the way up, I don't know when or where (or if) the bulls will stop rampaging.
While I don't want to take the focus off of CDNL and the opportunity it offers now that the revenue switch has been flipped to "on" in a big way, there is a moral to the story here... great ideas and great technologies can't be held back forever. Eventually, buyers will find and pay for the product. Red Bird Systems are one of those highly-marketable products.
In light of that premise, the big take-away for current and potential CDNL investors is, initial sales of systems in Panama and now China are just the seeds of what we think is going to be explosive sales growth.
Here's the press release.
Cardinal Resources Returns to China With the Order of a Mobile Red Bird System
PITTSBURGH, PA--(Marketwired - November 23, 2015) - Cardinal Resources Inc. (OTC PINK: CDNL), a global producer of patented, solar powered, community-scale drinking water systems, today announced it has completed the first sale of its Mobile Red Bird System in China. This is the first system of the planned initial order of 3 systems by the HangZhou Sky Valley Water Technology Co., a China-based consortium formed to market and commercialize Cardinal Resources' water treatment technologies in Asia and other international markets. These systems will be produced from our US based manufacturing site. The first system order is a cash transaction and will be booked in the 4th Quarter of 2015.
This system will be used for demonstrations with key customers that have orders pending a successful demonstration of the system in China. "Based on the performance of our systems, we are confident of the ability of our systems to meet China's water quality regulations," stated Cardinal Resources CEO, Kevin Jones. "We have extensive experience in China through our environmental engineering services and had a pilot Red Bird System successfully treat and meet the China Standards in the past. We believe this sale and the upcoming demonstration of the Red Bird System will quickly produce large sales of our larger systems."
"We have long looked at the China market being a key element in our growth plans. For example, the United Nations reports as of June, 2015, 381 million people in China lack access to piped, treated water, and the US Dept. of Commerce ITA estimated the total addressable market in China for this sector at $29 billion in 2010. We have carefully been looking for a good technology partner in China. Based on our extensive discussions and meetings we believe we now have that partner and look forward to a long-term, sustainable market for our family of Red Bird Systems. To support this expansion, one of our scientists, who had moved back to China, has rejoined Cardinal Resources."
Cardinal Resources will be updating the market as the deployment of this system occurs and the successful demonstration in China.
About Cardinal Resources
Cardinal Resources brings a unique blend of experience, technology, and focus to projects worldwide and across the United States from its office in the Pittsburgh, Pennsylvania area. Its commitment to "Clean Water, Clean Environment, Worldwide" includes the patented Red Bird System, a solar-powered community-sized drinking water system, and the Grey Bird Approach to wastewater treatment and green infrastructure as well as a wide range of traditional environmental and engineering services. For more info, visit: www.cardinalres.com.
Forward-Looking Statements
Certain statements in this presentation constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, such as our ability to obtain financing to continue our operations; reliance on third parties for parts and equipment to produce our products; unexpected design and engineering problems related to our products; business and political conditions in the geographic areas in which we sell our products; outcomes of government reviews; continued compliance with government regulations; legislative or regulatory environments; requirements or changes adversely affecting the businesses in which we are engaged and jurisdictions in which we market and sell our products.
The information set forth herein should be read in light of such risks. You are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this presentation and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. Information on the company's website does not constitute a part of this release.
Contact Information
Company Contact:
Kevin Jones
412-374-0989