If you invested in Siyata Mobile stock (SIM.V), you might have felt the last year like a roller coaster. The Company had a tough year and the stock price reflected the difficulties of the company. But now, the future looks to be brighter and the company secured strong financings and partnerships.

Siyata Mobile is a leading developer and provider of cellular communication systems for enterprise customers and first responders.They provide high quality and technologically advanced in-vehicle mounted IoT communications devices, rugged smartphones and cellular signal boosters for global first responders and enterprise customers based on Push to Talk Over Cellular (PoC) technology. After a rough year, the company started to release good nice about their worldwide sales incoming.

They recently announced the company  has received a $1.3 million purchase order primarily for police and first responder customers in the EMEA (Europe, the Middle East, and Africa) for the Company’s SD7 ruggedized devices, VK7 vehicle units and other accessories. This order brings the year-to-date orders for the SD7 and VK7 to more than $1.8 million.

Just on the US side, a division of Goosetown Enterprises, Inc., will introduce the Siyata SD7 device with its Push-to-Talk over Cellular (PoC) service TeamConnect®. Using the SD7, first responders (police, fire department, ambulance) – which number over two million in the U.S. alone, as well as secondary support personnel – can quickly connect and coordinate on unified public cellular networks in North America and other international markets without any of the difficulties managing the current generation of rugged smart/feature phones. If some units of first responders start to use this device and is getting approved,

“We are confident that Goosetown’s customers will find the SD7 offers the convenience and technical capabilities required from a next-generation device servicing the commercial and/or public safety workforce,” said Siyata CEO Marc Seelenfreund.

Fundamentals

The last earnings were pretty disappointing for Siyata. They announced a weak topline result for its September quarter.

Siyata Mobile (SYTA) reported a year-over-year sales decline of -46%  for the September quarter. $1.2 million reported was significantly far from their estimate of $3.2 million because of continued decline in Israel revenues from a winddown of 3G products and the stalling of 4G sales in North America. Yellow School buses have been slow in recovery and there was a gap in cellular signal boosters after fulfilling a huge order in 1Q.

Inventory impairment of $1.6 million in 3Q followed $1.8m taken in 2Q. $5.0 million of total inventory impairments over the past 12 months is concerning to us. Considering that equals the actual revenues of over the past 12 months. The Company explained the bulk of the inventory impairment was tied to truckfone devices (CP100 & prior UV350) that were slow-moving and some prior version device before an upgrade to Android 10.

On the positive side, gross margin of 35% improved by 300 bps from the year-ago period despite the weak topline. Adjusted EBITDA was negative -$4.1 million.

But again, things are ramping. up for the company and the next earnings should like better. Any great earnings will significantly increase the share price.

Share Structure

The stock is currently traded at $1.31 for a current market cap of $17M. The stock endured a harsh slip of -88.09% YoY and recently rebounded from its all-time low of $1.14 ( January 24th, 2022). A lot of factors affected the stock price, including the current instability of the stock market, and the most recent financing that might have cooled investors’ sentiment about the company.

During the last  months, SYTA announced 2 major financings:

• January 7th, 2022: announced a public offering of 8,695,652 common shares and accompanying warrants to purchase up to 8,695,652 common shares. Each common share is being sold together with one common warrant at a combined effective offering price of $2.30. This announcement has led to a -42% drop in one day.
• November 15th, 2021: announced funding agreement for gross proceeds of US$6,000,000 by Lind Global Partners II with a 60-month warrant to purchase up to 2,142,857 common shares at US$4.00 per share and led to an increase of 21%.

We could see some dilution coming from the warrants of the financings, but regarding the warrants from insiders, there is a long way to go as their weighted average exercise price is $10.14, and the weighted average exercise price for the options is $8.02.

The stock endured a long downtrend and the overall sentiment is more than bearish. With a Simple MA (20) at 1.42 and a Simple MA (200) at 5.20, there is a long way to go for the stock to be back on bullish sentiment. The stock is also in the oversold territory with an RSI of 33. To catch up and go back to its fair valuation, they will have to share nice earnings or big partnerships.

To check the daily fluctuations, the Bollinger bands indicate us we could see variations between $1.05 to 1.79. Throughout time, this data will tighten until once again we see significant news from the Company.

Bottom Line

Siyata went through tough times and the stock has been forgotten by investors. Besides their recent news+their revenue target for the year 2022 should ensure investors that tough days are part of the past. Indeed, they forecast $4 million of revenues in 2022 ($2m previously) solely from the SD7 launch (mostly from North America followed by Europe in late 2022). They estimate nearly breakeven adjusted EBITDA profitability in 2022 for a re-rating of the stock. Even if they lowered their price target valuation to $6 from $10 because of the share dilution, it still represents a possible 460% increase for the year 2022.

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