71% and trading 6 million shares on the market. Will the climb continue is yet unknown, though the reason for the high trade is already crystal clear.Yesterday, NVAE was promoted four times and the high trade was opened. The promotional campaign has been paid by unknown promoter and the compensation wasn’t revealed, though NVAE was presented as a “Low Floater Alert with Mega Gain Potential”, which attracted traders’ attention.
Besides promotions, Savanna East has been supporting its stock price with positive news. Last week, the company reported its $10 million 2011 revenue objective, and a few days later NVAE joined a partnership to build a wireless broadband network in Kenya. Though, the final results are only projections and optimistic expectations yet.
Savanna East Africa Inc., formerly Nova Energy, Inc., is a development-stage company focused on the recovery of oil and gas reserves through acquisition and project development in Texas and North Dakota regions. In November 2010, the company used to trade approximately four times higher than now, however, since then the stock price has moved down. Apart from this fact, the financials of Savanna look disastrous.[BANNER]
According to its 10-Q report, the company’s liabilities are almost nine times higher than its total assets and the stockholders’ deficit is over $4 million. Besides, as of September 30, 2010 NVAE’s accumulated deficit during the development stage period has exceeded $4.3 million, while the revenues are missing and the net loss is constantly increasing.
Due to these facts, Savanna has entered into a few debt agreements since the end of last year, however, it is not clear how the company will recover the borrowings. The management states the company has sustained losses in all previous reporting periods and it continues to seek funding from its shareholders and other investors to pursue its business plan. However, as NVAE has no earnings and the team will be required to make significant future expenditures, the company’s future operation is dependent on loans, which could hardly make Savanna profitable.
