Financial Condition and Profitability - As of June 30, 2025, the company had an accumulated deficit of $123,573,435, indicating a history of operating losses and uncertainty regarding future profitability[28] - The independent registered public accountants expressed substantial doubt about the company's ability to continue as a going concern for the next twelve months, as noted in their report for the fiscal year ended December 31, 2024[29] - The company may require additional capital to fund its business and support growth, with potential future equity or debt financings that could dilute existing shareholders[30] - The company reported that $4,659,648 of inventory was impaired due to slow movement for the year ended 2021, compared to $1,571,649 in 2020[45] - The company does not expect to pay any cash dividends for the foreseeable future, requiring investors to rely on sales of Common Shares for returns[179] Internal Controls and Compliance - Material weaknesses in internal controls over financial reporting were identified by independent registered public accountants for the years 2024, 2023, 2022, and 2021, which could impact the accuracy of financial reporting[32] - The company has instituted remediation efforts for identified material weaknesses in internal controls, but failure to fully address these could hinder timely and accurate financial reporting[34] - In 2024, the company identified material weaknesses in internal control over financial reporting, including issues with documentation and signing processes of agreements, insufficient control over agreement closure, and inadequate revenue recognition practices[35] - The company has partially remediated material weaknesses identified in previous audits but acknowledges the risk of future control deficiencies[43] - The company identified three material weaknesses in its internal control over financial reporting for the year ended December 31, 2023, and has taken steps to remediate these weaknesses[203] Revenue Generation and Market Dependency - The company relies heavily on channel partners for revenue generation, and any failure in performance or unfavorable agreements could significantly harm operating results[17] - For the three months ended June 30, 2025 and 2024, over 72% and 70% of the company's revenues were generated through sales by channel partners, primarily wireless carriers[48] - The company is dependent on the adoption of its solutions by industrial enterprises and public sector markets, with revenue adversely impacted if end customers do not purchase these solutions[17] - The company is materially dependent on the adoption of its solutions by industrial enterprise and public sector markets, which could impact revenue if not widely accepted[54] - Company derived 64% and 52% of its revenue from five customers/channel partners for fiscal years ended December 31, 2024 and 2023, respectively[91] Risks and Challenges - The company faces risks associated with lengthy sales cycles, which could lead to unexpected revenue shortfalls if large orders are delayed[18] - The company is exposed to risks from economic uncertainties, political changes, and natural disasters that could disrupt operations and negatively impact financial results[21] - The company faces significant competition from established players like LG, Apple, and Samsung, which may affect market share and profitability[55] - The company faces potential risks from product defects, which could lead to reduced demand, loss of sales, and increased warranty costs[58] - The company is exposed to risks associated with strategic acquisitions and investments, which may not yield anticipated benefits or successful integration of technologies and personnel[113] Supply Chain and Manufacturing - The company has a limited history of contracting with third-party manufacturers in Asia, which may lead to manufacturing capacity constraints[18] - The company does not have long-term supply agreements with suppliers, increasing vulnerability to supply interruptions[89] - The company relies on third-party suppliers and manufacturers in China, where rising labor costs and regulatory changes could materially affect operational results[168] - Political and economic instability in China poses risks, including potential changes in laws that could impact operations and the ability to retain necessary legal permits[169] - The company is subject to risks associated with sourcing and manufacturing, relying on independent suppliers for product quality and timely delivery[96] Regulatory and Legal Risks - The company is subject to various anti-corruption and anti-bribery laws, which could lead to significant liabilities if non-compliance occurs[131] - The U.S. has imposed economic sanctions that restrict transactions with designated foreign entities, which could impact the company's operations[132] - The company faces increasing regulatory requirements related to product safety, environmental laws, and energy efficiency, which could impact production capabilities[136] - The company may face litigation related to intellectual property rights, which could delay product development and commercialization[146] - The reliance on open source software may expose the company to legal risks and impact the development of its products[147] Market and Economic Conditions - Ongoing geopolitical conflicts, such as the Middle East war and the Russian invasion of Ukraine, could adversely affect the company’s financial condition and operations[80][82] - Changes in federal funding for public safety could impact opportunities with public sector end customers[107] - Economic uncertainties or downturns could limit the availability of funds for customers, adversely impacting the company's business[108] - Ongoing trade tensions and uncertainty regarding future trade policies could negatively impact global economic conditions and the company's business performance[130] - Fluctuating foreign currency rates could impact sales and increase costs associated with purchasing and receivables collection outside the United States[171] Corporate Governance and Structure - The company is a foreign private issuer, which may afford less protection to investors compared to domestic issuers[191] - The company may lose its foreign private issuer status if more than 50% of its outstanding voting securities are owned by U.S. residents, which could lead to significant additional costs and expenses[197] - The company incurred significant legal, accounting, and other expenses as a result of operating as a public company in the U.S., which could adversely affect its financial condition and results of operations[198] - The company has undergone several name changes and consolidations since its incorporation in 1986, reflecting its evolving business focus[205] - The company completed a reverse acquisition in 2015, acquiring telecom operations from an Israel-based cellular technology company[206] Stock and Market Performance - The company faced a compliance issue with Nasdaq's minimum bid price requirement, with the closing bid price below $1.00 for 30 consecutive business days[184] - A 100-1 reverse stock split was executed on August 3, 2023, followed by a 7-1 reverse stock split on December 4, 2023, to remediate the delisting issue[185] - The market for Common Shares may not provide adequate liquidity, influenced by financial condition, operating results, and investor interest[178] - Outstanding warrants and future sales of Common Shares may dilute existing shares and adversely impact their market price[181] - The company may face significant adverse consequences if delisted from Nasdaq, including reduced liquidity and increased volatility[186]
SIYATA MOBL.EQ.WARRT(SYTAW) - 2025 Q2 - Quarterly Report