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Are Conditions Favorable for Building Turbines Inc. (PINKSHEETS: BLDW) or will Wind Turbine System Designer Fall Short?

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While green technology and the push for alternative energy continues to be one of the most important issues for our future there is no denying that the majority of companies that have tried to capitalize on in growing industry have failed miserably. Beyond having a good idea a company must have the resources to actually develop and manufacture a product and judging by the financial condition of Building Turbines Inc. (PINKSHEETS: BLDW), a designer and manufacturer of commercial rooftop wind turbine systems and other renewable energy technologies, may soon join that list. Putting aside the numerous difficulties associated with wind turbine systems BLDW has, as of their latest annual report published on January 9, 2012, a total of $697 in cash. That’s not exactly the kind of balance you would expect from a company that designs, manufactures and deploys “revolutionary rooftop mounted horizontal-axis wind turbines.” Now consider BLDW has generated $30,000 in revenue the past four years, all of it coming in the last quarter. Making matters worse, the cost of goods sold actually totaled $61,816 while for the three-month period ended September 30, 2011 BLDW recorded a net loss of $417,562. That’s not even the worst part of it; over the last four years BLDW has accumulated operating losses of $4,607,145. Obviously something isn’t working here and while BLDW announced earlier this month that they were “diversifying its renewable energy product lines through the establishment of a new division called “EcruosA,” with the purpose being “to develop and market technologies that increase the efficiency of electrical power sources” there is little reason to believe this will be successful. Max Champie, COO of BLDW, stated in that press release “The launch of EcruosA reflects our commitment to being leaders in the development of revolutionary, renewable energy technologies and products that advance the use of limitless and untapped energy sources that are clean, green and environmentally responsible.” It goes without saying; it’s hard to be a leader when you don’t even have enough cash to purchase your own products. So what does BLDW have on the horizon? Well they announced on February 1, 2012 that they were “working with officials at 21 Rio Apartments on a plan for potentially installing a wind turbine system on the roof of the 21-story luxury apartment building located near downtown Austin.” Seeing the word “potentially” is never a good sign for shareholders, it usually means the plan is going to fall flat. While Building Turbines Inc. is headquartered in Austin, Texas the company may have looked outside of their home city for a more ideal location to install a wind turbine system. According to city-data.com Texas boasts 23 cities on the list of 101 cities with the highest average wind speed, a critical factor for wind turbines, and Austin wasn’t one of those cities. BLDW states that one of the advantages with their turbine is they can generate electricity even at a moderately low (8+ mph) wind speeds and follows this with the belief that their wind turbine is cost effective, given appropriate wind conditions. Generating electricity is one thing but if you’re living in a luxury apartment building you would expect electricity on demand regardless of wind speed. This is one of the biggest issues with wind turbine systems, they require extremely favorable conditions to produce the kind of electricity consumers want. It’s not as simple as throwing a turbine on a rooftop, the positioning of that turbine has to be in an ideal location to maximize the wind speed. This generally means that rooftop has to be high enough to overcome air turbulence, a problem that will slow the speed of wind and decrease the energy a wind turbine needs to operate at its maximum capacity. From an investors perspective it would be difficult to find much positive about where BLDW is with their business operations. They have very little money and are dependent upon the sale of securities to keep their business going. Right now BLDW is the subject of a promotional campaign which means there will be a number of shares dumped and the share price will almost certainly suffer in the coming days.

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