As high as shares of Structural Enhancement Technologies Corp. (PINKSHEETS: EMWW) spiked on Monday they have experienced considerable volatility since that time, trading between a low of 0.020 and a high of 0.0345. Monday’s jump to 0.040 could be attributed to a number of stock promoters publishing alerts on EMWW, a catalyst that likely triggered more trading activity than the press release the company issued on the same day, their first since January of this year.
EMWW’s most recent press release detailed the immediate plans of their subsidiary, Extreme Mobile Coatings, Inc., a plan that includes a December/January roll out of their “Select Cities Restaurant” antimicrobial protection package program in New York City. The goal of the program is “to give restaurant patrons the best bacteria and virus protection on location in existence today.” It’s probably safe to say this news wasn’t the inspiration behind investors trading activity on Monday.
In fact it’s hard to find anything inspirational about the business operations of EMWW which has struggled to generate not just meaningful revenue but any revenue. Looking at the company’s most recent 10-Q/A there is a considerable amount of information related to importance of antimicrobial powder coatings and their belief that there is a “latent need” for a “antimicrobial coating to protect surfaces which come in continuous contact with the general public, such protection to be long lasting, and such protection to be cost effective.” What the company’s financial filing lacks is recent financial information.
It is wonderful that EMWW plans to offer “franchise opportunities to operate a mobile business which provides painting or coating on various surfaces utilizing a special patented mobile system,” a system developed by Environmental Infrastructure Holdings Corp. (formerly known as Xiom Corp.) and licensed to Extreme, and others, but that has been the plan since 2007. From Feb 2, 2007 through December 31, 2008 EMWW generated revenue of just over $5,600, this despite EMWW identifying their potential customer base as hospitals and other health care facilities, schools, day care centers, marinas and the food service industry.
During that same period EMWW has total expenses of $446,173 resulting in a loss from operations of $440,486. Since that time it has been more of the same for EMWW as they have still yet to establish themselves as an attractive business. Yes they have improved their revenue to a degree, producing $6,218 during the three month period ending March 31, 2011 but during that same time they incurred a net loss of $255,043. Their cash balance at March 31, 2011 was $9,202 while holding a working capital deficit in the amount of $704.662.
The problem for EMWW is they simply don’t have any reliable revenue stream and they have considerable debt that they have failed to pay down. So what is the plan for EMWW, well their press release on Monday discusses “plans” for a program roll out and their “intention” to form a group of five strategic restaurants as initial “city partners” in New York to act as development and show piece centers of excellence. Unfortunately “plans” and “intentions” don’t always translate into revenue and that is something EMWW needs desperately.
While EMWW’s business is predicated on the belief that they can franchise this mobile business design they have yet to provide any evidence that this belief can be substantiated. If EMWW can’t succeed in franchising this mobile business then they can’t survive.