Financial Performance and Concerns - As of December 31, 2023, the company reported an accumulated deficit of $90,750,457, indicating a history of operating losses and uncertainty regarding future profitability [27]. - The independent registered public accountants expressed substantial doubt about the company's ability to continue as a going concern for the next twelve months [28]. - The company may require additional capital to fund its business and support growth, with potential dilution of existing shareholders if new equity is issued [29]. - The company may experience lengthy sales cycles, which could result in unexpected revenue shortfalls if large orders are delayed [73]. - Economic uncertainties or downturns could limit the availability of funds for customers, adversely affecting the company's business [103]. - The company does not expect to pay cash dividends in the foreseeable future, requiring investors to rely on stock price appreciation for returns [171]. - The trading price of the company's common shares is likely to be volatile, influenced by various market factors and operational results [169]. - The company may face significant adverse consequences if it fails to comply with Nasdaq's continued listing requirements [175]. Internal Controls and Compliance - Material weaknesses in internal controls over financial reporting were identified in 2023, 2022, and 2021, which could impact the accuracy of financial reporting and timely filing of reports [31]. - The company has taken steps to remediate identified material weaknesses in internal controls, particularly in revenue recognition and inventory management [33]. - The company acknowledges the ongoing risk of undiscovered material weaknesses that could affect the accuracy of its financial reporting [40]. - The independent auditors identified three material weaknesses in internal control over financial reporting for the year ended December 31, 2023, three for 2022, and six for 2021 [195]. - The company has taken steps to remediate material weaknesses but acknowledges that future weaknesses may still be discovered, which could impact financial reporting accuracy [196]. Market and Competitive Landscape - The company faces risks related to competitive pressures in the industry, which may hinder its ability to respond effectively to market changes [17]. - The company faces significant competition from major players like LG, Apple, and Samsung, which may impact its market share and profitability [51]. - The mobile device market is characterized by rapidly changing technology and customer needs, requiring the company to modify its products to remain competitive [67]. - The company is focused on expanding into new vertical markets and increasing awareness of its solutions' benefits [60]. Supply Chain and Manufacturing Risks - The company has a limited history of contracting with third-party manufacturers, which may lead to manufacturing capacity constraints [17]. - There is a risk of manufacturing capacity constraints due to limited experience with third-party manufacturers in Asia, which could impact the timely supply of devices [74]. - The company does not own manufacturing facilities and relies on independent suppliers, which could affect product quality and availability [91]. - There are no long-term supply agreements with suppliers, increasing vulnerability to supply interruptions and price fluctuations [84]. - The company faces risks related to reliance on third-party suppliers, which could lead to delays in product shipments and reduced sales due to potential shortages [83]. Economic and Geopolitical Risks - The company may face significant adverse impacts from economic uncertainties, including geopolitical events like the Middle East War, affecting its financial performance [17]. - The 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 [75][77]. - The evolving conflict situation in Israel makes it difficult to predict its duration or severity and its effects on business [150]. - Political, economic, and military conditions in Israel may adversely affect the company's operations and results, particularly due to historical conflicts and ongoing tensions in the region [152]. - Increased labor costs in China may materially affect the company's results of operations, as the cost of labor has been rising due to economic development [160]. Strategic and Operational Challenges - The company faces challenges in adapting to rapidly changing technological and application needs, which may hinder its ability to develop effective solutions for user demands [61]. - The company anticipates that delays in the deployment of dedicated public safety LTE networks could negatively impact demand for its solutions [87]. - The company relies on industry data and projections that may prove inaccurate, potentially impacting its business and stock price [79]. - The company faces risks related to demand forecasting for inventory and supply needs, which could lead to additional costs or manufacturing delays [81]. Shareholder and Stock Market Information - As of December 31, 2023, the company had 570,462 Common Shares issued and outstanding [185]. - There are up to an additional 530,000 Common Shares underlying outstanding warrants that are unrestricted and freely tradable [173]. - The company has 259,161 pre-funded warrants remaining to be exercised at $0.07 as of December 31, 2023 [173]. - The company underwent a 100-1 reverse stock split on August 3, 2023, followed by a 7-1 reverse stock split on December 4, 2023, to remediate delisting issues [177]. - The company was notified by Nasdaq that it was not in compliance with the minimum bid price requirement, with the closing bid price below $1.00 for 30 consecutive business days [176]. Regulatory and Legal Risks - Compliance with anti-corruption and economic sanctions laws is critical to avoid significant penalties and reputational harm [123]. - Regulatory and safety laws could impose future costs and liabilities, affecting production capabilities and financial performance [129]. - Changes in laws and regulations regarding telecommunication bandwidth could increase costs and adversely impact the business [132]. - The company is subject to a variety of privacy and data security laws, which are rapidly evolving and may increase compliance costs [133]. - The General Data Protection Regulation (GDPR) may impose additional obligations and risks, potentially increasing penalties for non-compliance [134]. - The California Consumer Privacy Act (CCPA) introduces significant new disclosure obligations and privacy rights for consumers [135]. Company Overview - Siyata Mobile Inc. is a B2B global developer of next-generation Push-To-Talk over Cellular handsets and accessories, serving various sectors including police, fire, and ambulance organizations [206]. - The company offers enterprise-grade In-Vehicle solutions and Cellular Booster systems to enhance communication in vehicles and areas with weak cellular signals [207]. - Siyata sells its products through leading U.S. cellular carriers and international distributors in Canada, Europe, Australia, and the Middle East [207]. - The company has undergone several name changes and corporate restructuring since its incorporation in 1986, with the most recent name change to Siyata Mobile Inc. occurring in 2015 [198]. - The common shares of the company were listed on the Nasdaq Capital Market after voluntarily delisting from the TSX Venture Exchange on October 19, 2020 [200].
SIYATA MOBL.EQ.WARRT(SYTAW) - 2024 Q1 - Quarterly Report