Financial Condition and Performance - As of September 30, 2023, the accumulated deficit is $86,885,452, indicating a history of operating losses and uncertainty about achieving profitability[24]. - The independent registered public accountants expressed substantial doubt about the company's ability to continue as a going concern for the next twelve months[25]. - The company may require additional capital to fund its business and support growth, which could lead to significant dilution for existing shareholders[26]. - A cease trading order was issued due to late filing of financial statements, which was rectified on May 24, 2023[27]. - The company was notified of a default for not maintaining a minimum bid price of $1.00 per share, which was resolved after a 100-to-1 reverse stock split[27]. - The company plans to retain earnings to finance operations and growth, and does not anticipate paying cash dividends in the foreseeable future[159]. - The company incurred significant increased costs due to operating as a public company in the United States, which includes legal, accounting, and compliance expenses[179]. Internal Controls and Compliance - In 2022, three material weaknesses in internal controls over financial reporting were identified, including issues with revenue recognition practices and inventory controls[30]. - The company has identified material weaknesses in internal controls over financial reporting, including insufficient review of inventory balances and advances to suppliers[32]. - The company has taken steps to remediate material weaknesses, including monthly inventory comparisons and the implementation of an IT system for inventory tracking[34]. - The company has implemented peer reviews of revenue recognition practices to ensure compliance with IFRS15[31]. - The company has taken steps to remediate identified material weaknesses in internal controls, but cannot guarantee that further weaknesses will not be discovered[184]. - The company’s ability to produce accurate financial statements could be impaired if it fails to maintain effective internal controls, potentially leading to material misstatements[182]. Market and Competitive Risks - The company relies heavily on channel partners for revenue generation, making it vulnerable to their performance[15]. - Lengthy sales cycles for products could lead to unexpected revenue shortfalls if large orders are delayed[15]. - The company faces risks associated with reliance on third-party suppliers for key components, which could impact product shipment and sales[17]. - The company is materially dependent on the adoption of its solutions by industrial enterprise and public sector markets, which may impact revenue if not widely accepted[44]. - The company faces significant competition from major players like Apple and Samsung, which may affect market share and pricing strategies[45]. - The mobile device market is rapidly evolving, and the company must adapt to changing technology and customer needs to remain competitive[61]. - The company faces challenges in penetrating new markets, which could hinder revenue growth if market receptiveness is low[62]. Economic and Geopolitical Risks - The company is exposed to risks from economic uncertainties, including the impact of the Russian invasion of Ukraine on global economic activity[17]. - Ongoing geopolitical conflicts, such as the Middle East war and the Russian invasion of Ukraine, may adversely affect the company's financial condition and operations[70][72]. - Economic uncertainties or downturns could limit the availability of funds for customers, adversely impacting the company's business[98]. - The company faces risks from potential trade wars between China and the US/Europe, which could negatively impact revenues[80]. - The U.S. government proposals to address trade imbalances may lead to increased customs duties and tariffs, adversely impacting financial performance[108]. Supply Chain and Manufacturing Risks - The company faces risks associated with sourcing and manufacturing, including price volatility and availability of raw materials[90]. - The company relies on a small number of suppliers, and any disruption in supply could significantly harm production and financial condition[86]. - The company does not have long-term supply agreements with suppliers, increasing vulnerability to supply interruptions[79]. - The company has limited experience with third-party manufacturers in Asia, which could lead to manufacturing capacity constraints and supply issues[68]. Legal and Regulatory Risks - Compliance with anti-corruption and anti-bribery laws is critical, as non-compliance could lead to significant legal and financial repercussions[116]. - The company is subject to a wide range of product regulatory and safety laws, which could impact production capabilities and financial performance[122]. - Changes in privacy and data security laws may affect the company's handling of customer data and overall business operations[126]. - The company may incur substantial expenses to comply with privacy and data protection laws, which could adversely impact its overall business[130]. Shareholder and Stock Performance - As of September 30, 2023, the company had 1,853,955 Common Shares issued and outstanding, with a total of 3,902,168 Common Shares post 100-to-1 reverse split effective August 10, 2023[160]. - The company executed a 100-to-1 reverse stock split on August 10, 2023, resulting in the stock trading above $1.00[161]. - The company received a letter from Nasdaq on August 26, 2022, notifying it of non-compliance with the minimum bid price requirement, which was below $1.00 for 30 consecutive business days[165]. - If the company does not regain compliance with the Bid Price Rule, Nasdaq may notify it of potential delisting, which could lead to trading over-the-counter[167]. Strategic Initiatives and Growth - The company signed a lease for exclusive warehouse space as of April 1, 2022, to eliminate reliance on outside contract warehouses[34]. - The company plans to increase sales and marketing expenses to enhance brand awareness among end customers, focusing on direct marketing and social media initiatives[59]. - The company may consider strategic acquisitions, which involve risks related to integration and realization of anticipated benefits[102]. - The deployment of dedicated public safety LTE networks is critical for the anticipated growth in demand for the company's solutions[82].
SIYATA MOBL.EQ.WARRT(SYTAW) - 2023 Q3 - Quarterly Report