On4 Communications Inc (OTCMKTS:ONCI)
On4 Communications Inc (OTCMKTS:ONCI) shares rallied 8.70% after the holding company announced the signing of a major contract with a California dealership. The contract is for 20 dealerships in Los Angeles and Orange County, California.
“Each dealership will take 20 units per month at $200 a unit which is $100,000 per month and $1.2 million per year. The units will be delivered October 1, 2017,” said CEO Steve Berman.
In addition, the company has also signed a contract worth $450,000 with a 10 dealer group in Arizona at 150 units per month and $250 per unit.
News of the new $1.2 million contract helped push On4 Communications Inc. (OTCMKTS:ONCI) up, helping affirm a bullish momentum that began last month. The stock is currently trading at this year’s highs, after trading in a range in the first half of the year.
In addition to the new contract in California, On4 Communications Inc (OTCMKTS:ONCI) is also working on a safe driving app dubbed BSAFE. The app is currently in beta testing and is designed to protect drivers from the dangers of distracted driving.
Early this month, the company confirmed the acquisition of its 51% partner in the FMS Safe Driving APP. The acquisition according to the chief executive will reduce On4 Communications Inc. (OTCMKTS:ONCI) operation costs drastically allowing them to develop apps profitably.
“The price is $3,500,000 USD and will be paid in 6 installments over the next 6 months. This will be financed by a loan against receivables and will not be dilutive to the company. Our partner also owns a fleet business which adds another sector to our holdings and is an established business in itself,” said Mr. Berman.
Separately, On4 Communications Inc (OTCMKTS:ONCI) chief executive officer is set to meet with BMW officials at their corporate headquarters in Munich on September 15, 2017. The meeting is the first of many meetings that the company plans to use to educate automakers about the effects of distracted driving and what the company’s app can offer.
The meeting in Europe will also give On4 Communications Inc. (OTCMKTS:ONCI) an opportunity to meet with app designers to finalize the beta testing of 5 new apps. The apps are slated for release sometime in the fourth quarter. Two of the apps are for auto safety, two for the sports gaming industry and one is MJ related.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.