China Waste Corporation Ltd (ASX: CWC) appears headed for voluntary administration, unless the company can urgently raise capital.

The company received a polite enquiry from the ASX recently, given the company had spent $616,000 in the last quarter, and had just $262,000 in the bank. Quite rightly, the ASX wonders whether the company can continue as a going concern. It doesn’t help that the company failed to generate even one dollar of revenue in the quarter (or the previous quarter, or since it listed for that matter).

China Waste listed on the ASX in June 2015 via a back-door listing through a resources exploration company Central West Gold Limited. The company owns Harvest Champion and its subsidiary Hong Kong-incorporated China Urban Mining Holdings Limited.

In the prospectus, China Waste said it expected its businesses to bring ‘together the procurement, development and exploitation of green technologies, process and products including in the area of waste disposal and treatment and recycling of waste products’. A nice sentiment no doubt.

But how investors were convinced to invest in this company is beyond me. The company has virtually no assets and no revenue generating business, nor any business for that matter that looks like generating any revenue.

And yet, China Waste’s share price has risen 77% in the past 12 months to 49.5 cents, giving the company a market cap of $44.4 million.

The company says it is confident it can raise equity or debt funding, but I certainly wouldn’t be willing to invest my hard earned in this company.

Foolish takeaway

In my opinion, there’s a very real risk China Waste’s shares could end up being next to worthless. Buyer beware.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.