Siyata Mobile Inc. (SIM.V) is a provider of vehicle mounted mobile communications platform (Push To Talk Over Cellular ("PoC") devices).
We initiated coverage a few months ago (March 28). Since then, we have published two more notes June 1 and July 3.
In our report, we alerted that investors should be on the look out for warrants (21M to 25M shares) that were set to expire on both July 17, and July 23. These ranged from $0.40-$0.60 cents. We were expecting a sell cycle though we cautioned that SIM.V's announcement could be a factor.
Ascend
Indeed, the company released a number of significant updates prior July 17 and 23 culminating to a 52 week high on July 26 ($0.76). The timing of these announcement is interesting as it coincided with the warrant expiry date that were well publicized.
July 11 - Revenue of $5.2M in Q2 2017; a 150% increase over Q2 2016 and 4th consecutive quarter of record sales. An increase of ~7% over Q1 2017. July 17 - Launches Tablet/DVR Connected Vehicle 4G Device - Uniden® CP250 built for cellular voice calls, (“PoC”), data, and DVR camera Designed to be installed on the dash or on a windshield, specifically for lighter commercial vehicles such taxis, vans and delivery trucks. July 20 - Partners With Nexar, the World’s First Vehicle-to-Vehicle Network which is an integration and resale partnership a community-based AI dash cam application including a real-time collision avoidance network. SIM.V to pre-load Nexar's software on Uniden® CP250 and sell the combined package to its customers. In return, Nexar will distribute the CP250 to its customer base. July 24 - Started technical device approval process for its Uniden® UV350 4G/LTE. It is an in-vehicle connected cellular device with a Tier 1 operator in US. SIM.V is self-reported to be a leading candidate for in-vehicle PoC solutions for FirstNet Network. July 25 - Begins trading on OTCQX under “SYATF” symbol. Also announces 700K stock options - exercise price of $0.69 per share, which will vest on a quarterly basis over a 24-month period, in eight (8) equal tranches, and shall expire, in 5 years from the date of grant.
Bump
After the 52 week high, the stock experienced some selling pressure but was able to maintain a relatively high price with the following announcements.
July 27 - Reports to have received $3.9MM (6.6M) from Exercise of Warrants. Funds to be used to continue its expansion throughout 2017. Aug. 1 - Opens New Market Opportunity in France; first PO from SETMA SA (“SETMA”). SETMA is a French based vehicle embedded electronics retailer. SETMA has 2000 points of sale and catalog of 2000 references throughout its network.
Slide
The stock experienced more selling pressure which really brought the stock back in the $0.57 to $.60 cents ranges, Of note, in this period is the selling of 11M shares on the open market in one day at $0.59 by SIM.V's parent company which occurred in a spectacular fashion. Moreover, SIM.V also re-iterated the announcement of July 11 on August 29 which did not have the same impact than on the original date (as expected).
Aug. 9 - Announces Leading Canadian Cellular Operator to Launch its Uniden® UV350 4G/LTE In-Vehicle Cellular Device. This is the second leading North American operator that will be marketing and distributing the innovative Uniden® UV350 device. Aug. 15 -Showcase Uniden® UV350 Device at the Association of Public Safety Communications Officials (APCO) annual conference. Aug. 18 - ACCEL TELECOM LTD. - Parent company sold 11 M @ $0.59 cents. Aug. 23 - Attended Great American Trucking Show in Dallas, Texas from August 24-26, 2017 - US DOT reported over 12M fleet vehicles (2015).
Aug. 29 - Record quarter of $5.2MM in revenue, positive EBITDA. Record North American sales of $1.2MM in Q2 2017.
Working capital of $8.4MM as of June 30, 2017, and an additional ~$3.5MM received from exercise of warrants in July.
Spike
Initiation of coverage by Beacon Securities and the announcement of the new 4G Cellular Booster Portfolio drove the stock price up momentarily. We believe that the selling pressure experience after these announcements are related to remaining warrant expiry.
Sep. 5 - Beacon Securities initiated coverage with a "Buy" rating and a target $1.25.
Sep. 5 - Announces New 4G Cellular Booster Portfolio at the CEDIA Show in San Diego. Supported on all U.S frequencies, will be exclusive to authorized resellers. Target users that experience weak cell phone coverage in buildings, remote locations or while on the go.
Sep. 11 - Launches Innovative 4G/LTE Uniden® UR7 HULK Push-to-Talk Rugged Device. The UR7 HULK device is based on a Qualcomm Snapdragon chipset supporting major North American bands including 4G/LTE and FirstNet (“Band 14”) for the First Responders network,
Resurgence
Currently, the stock appears to be consolidating and has been test R1 at $0.68 cents with many of the recent announcements.
Sep. 14 - Announces record sales of Cellular Booster in August up 73% YOY (.5M). Cellular signal boosters used to solve weak cellular signal issues in corporate warehouses, government embassy buildings, retirement home campuses, banks, and manufacturing plants.
Sep. 28 - Acquires distribution rights to Enterprise Workforce Software (EWS). These will be pre-installed on SIM.V;s portfolio of 4G connected in-vehicle and rugged devices. Under the terms of the agreement SIM.V will issue the Vendor US$700,000 in shares. However, SIM.V expects recurring revenue from theses as early as Q1 of 2018. Oct. 10 - Reports Revenue of $4.85MM in Q3 2017. Also $14.85 million in the first nine months, a 78% increase over the first nine months of 2016. However, the revenue also represents a decline of 6% from previous Q2 2017 which is mostly is attributed to stronger currency (CAD vs. USD).
Summary
Judging by the recent trading activity, SIM.V is entering a more constrained cycle where the stock trades in a narrow range. This is to be expected as revenues has been steady in the last three quarters. However, we believe that the company's is strategically positioning itself for its next growth phase by launching new products (devices, boosters) with the inclusion of enterprise software (Nexar, EWS). Combining these activities will generate recurring revenues and can be a catalyst for future valuation.
The EWS component of SIM.V's strategy reflect an important Industry trend; For instance Blackberry recently signed a deal with FleetComplete to provide integrated solutions. Deloitte's recent report (The Truck Industry in Transition) outlines many more initiatives coming to the fleet industry.
The question now is whether Beacon Securities ($1.25 target) is in play for the next fiscal? Paradigm Research's ($0.75-$0.85 target of April 7) was fetched in three months! As such, we ask what's in store for the rest of the year? Well, there are certainly no guarantees at this point as SIM.V is still a venture stock after all! However, we did attempt a "longer term" forecast which is tentative (as it violates a few "best practices" rules) to determine some parameters (see below). Note, the results are based on previous 6 months and include today's pivots point.
Anything can happen but it will be neat to evaluate the outcome for 2017's year end. Let's see.
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