x min read

New America Energy Corp (OTCMKTS:NECA) Making Smart Moves

New America Energy Corp (OTCMKTS:NECA) Making Smart Moves
Written by
Jarrod Wesson
Published on
October 1, 2017
Copy URL
Share on LinkedIn
Share on Reddit
Share on Twitter/X
Share on Facebook
InsidrFinancial

New America Energy Corp. (OTCMKTS:NECA), which provides short-term high interest loans to consumers, became recently one of the most assessed stocks in the small cap world. Company LogoThe share price increased astonishingly in a very short period of time. From $0.0002 per share to $0.0008 in only ten days. But, that's not all; the amount of shares that changed hands some days was higher than 2 billion.Have a look at the recent share price action and form your own opinion: 4 years chart for NECAWhat happened?The company signed a new agreement with another public company, On4 Communications Inc. (OTCMKTS:ONCI), which has also been pushed up by the market recently.In this article, we will provide more information about the agreement, but we encourage the readers to check our article on ONCI. It seems to be creeping up before NECA does and could help indicate in advance new share price spikes.BusinessNECA, incorporated in 2006 under the laws of the State of Nevada, is focused on providing short term loans to clients without credit from traditional bank loans.According to the company materials, the current economic conditions have imposed that people who qualified in the past for traditional loans don't do so now. Title King LLC, a subsidiary of NECA, provides easy access to cash on property already owned by the consumer. The company provides "an affordable pay-back schedule for the borrower and will allow them the opportunity to pay off the entire loan at any time." We checked the company's website and found that the type of assets that the NECA is looking for are cars, trucks, luxury cars, & motorcycles.Let's revisit some of the old press releases to understand the business direction of NECA. It will also help readers understand the stage in which the company is right now. We need to look back to February to see the last news, which we appreciated.On February 14, 2017, the company announced that a new Line of Credit had been executed for up to $250,000.00 to exclusively fund future title pawn loans to the customers. We found that the loan conditions are interesting and will be extremely profitable for NECA.

  • Twenty-four-months term and will charge two percent (2%) monthly.
  • All loans made by the company carry a twelve and one-half percent (12.5%) interest rate.
  • Ten and one-half percent (10.5%) per month, which is equal to 127.5% APR.

Additionally, the company provided information regarding the work of the auditors, who will be checking the missing periods in the company's most recent years. We appreciate the information, as it means that a full picture of the business will be provided to the market. Furthermore, the company noted that NECA is committed to trading on a higher OTC tier as a result.We appreciate the following words of Jeff Canouse, the CEO of the company:

"Clearly a lot of work has been going on behind the scenes and securing this LOC is a truly significant milestone. Not only will the LOC give our flagship store the muscle it needs to get cash flow positive, but it also gives us the confidence to truly plan for additional stores. At a One Hundred Twenty-Seven percent (127%) APR, having Two Hundred Fifty Thousand ($250,000) out in loans is a huge deal." Source

On September 14, 2017, as we said earlier, NECA and ONCI announced a Revenue Sharing agreement, under which ONCI will promote the BestTitleDeal (BTD) app. Additionally, it was noted that NECA and ONCI will share 50% of all the sales obtained from this app.Is this a good opportunity for NECA?It seems so.ONCI has over 1,000 dealerships throughout the country and NECA will benefit. Additionally, ONCI has other products that will be able to be sold to NECA's clients. We believe that the synergies generated could increase the top of the P&L of NECA.What's the BestTitleDeal App?It is a software that helps clients know what is the worth of their car and how much amount of money they can borrow and what is the interest rate. On September 22, 2017, new information regarding the deal was received by the market. Here are the new comments of Jeff Canouse, CEO:

"With ONCI's relationships and knowledge of the auto industry and NECA's development team, we wanted to further build our relationship with this joint venture. Our team has the capacity to take on these new projects and possibly more. I'm excited about this relationship with ONCI and both companies are looking forward to future projects as well." Source

ConclusionCurrently trading with a market cap of $2.7 million, NECA is an exciting story among small caps. With only $0.078 million in cash reported in its last 10-k, it seems that the market is pushing up the share price believing that the company will grow at a high pace. We cannot blame market participants, as we believe that the company is delivering outstanding news that denote such type of growth. As the share price dynamics are being driven by the company's announcements, we recommend shareholders to be alert. We will be updating our subscribers as soon as we know more. For the latest updates on NECA, sign up below!Image courtesy of Curtis Locke via FlickrDisclosure: We have no position in NECA or ONCI and have not been compensated for this article.

Discover Hidden Gems

Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.