Thomas Kerr, CFA is a Senior Equity Research Analyst at Zacks Small-Cap Research with over 25 years of securities industry experience in Technology, Consumer, Industrials, Med-Tech, Healthcare & Biotechnology sectors recently assigned a $2.50 valuation on Siyata Mobile Inc. (Nasdaq: SYTA) on November 14th, 2022.
The company reported 3rd quarter 2022 results on November 10th which demonstrated strong growth for the SD7 rugged handset. Revenues for the quarter ending September 30, 2022 were $2,567,885 compared to $1,218,875 for the 3rd quarter of 2021. This 111% increase over the prior year period was primarily due to the increase in the sale of rugged devices including the SD7 rugged handset during the quarter.
Sales related to rugged handsets and accessories increased 588% to approximately $1.9 million.
Gross profit for the 3rd quarter was $856,103 (gross margin of 33.3%) compared to $429,513 (gross margin of 35.2%) for the 3rd quarter of 2021. The gross margin decline was largely attributed to lower sales of higher-margin cellular boosters.
Adjusted EBITDA was negative $1,579,980 for the quarter versus negative $4,869,303 in the same prior year period, an improvement of $3,289,323. This improvement was due to increased revenue, increased gross profit, and a decrease in operating expenses. The company defines adjusted EBITDA as the net operating loss excluding depreciation and amortization, unusual items, and stock compensation.
Net loss for the 3rd quarter was ($499,991) as compared to a net loss of ($5,667,937) in the prior year period. Part of the large improvement in net loss was driven by a positive change in fair value of warrant liability totaling $2,680,603. Excluding that gain and other unusual items, we calculate the net loss at ($2,734,037), or ($0.17) per share.
As of September 30, 2022, the Company had cash balances of $988,626 compared to $1,619,742 at the end of 2021. Working capital at quarter end was $4,951,595. Subsequent to the end of the quarter, the company raised approximately $4.0 million in proceeds from a registered direct offering from institutional investors.
CEO and founder Marc Seelenfreund stated, “We delivered on our plan to build and expand our potential customers for the SD7 during the third quarter, providing us with a foundation of increased distribution that is directly leading to many potential significant volume opportunities, of which we have begun shipping products in an increasing number of verticals beyond our primary focus on first responders, including: government, schools, utilities, security companies, defense contractors, amusement parks, and hotel resorts, to name but a few,” continued Seelenfreund. “We are just beginning to see the rapid adoption of our disruptive solutions and as the displacement of land mobile radio (LMR) by PoC continues to progress, this should drive meaningful growth for our innovative products, such as the newest addition to our lineup, the SD7+, which integrates body camera functionality with 4G cellular connectivity and PoC features in a single solution.”
Siyata Mobile Inc. (Nasdaq: SYTA) recently announced a new rugged handset, the SD7+, which features a wide-angle camera coupled with 4G cellular connectivity that will have traditional body camera functionality.
It will also encompass real-time situational and positional tracking capabilities. The SD7+ will be powered by Visual Labs’ innovative body camera software.
Visual Labs is a privately held company and a leading developer of Android-based bodycam and dashcam software. Visual Labs provides its software to public safety, private security, and other customers throughout the United States and internationally.
Strong bounces off of a strong support level provide us with ideal risk-to-reward and clear levels to trade
Locked and Loaded, stock infamous for 100% + moves every bounce off of our support zone! With the break and hold of .18 we are setting up for next leg up, and this stock has a tendency to have strong impulsive moves. With a recent break of the 50 MA on the daily chart, and approaching a bullish move of the 200 MA, we are setting up for a run.
The last day that $SYTA closed above the 50MA on the daily chart, we had a break out of over 65% in mid January.
Watch for volume over 7 million on daily chart and over 1 million the first hour of market open as a precursor to breaking out.
Shares of Siyata Mobile Inc. (Nasdaq: SYTA) recently bounced off its 52-week low of $.1051 on 11/09/2022 and with a 52-week high of $ 5.4763 set on 12/09/2021, there could be over 5,110% in upside potential if (SYTA) climbs back to that 52-week high level according to the historical pricing available at Barchart.com. To be fair, a 5,110% move back to the 52-week high is not expected, but the potential should be noted.
Looking at the daily chart above while doing very little technical analysis using StockCharts.com, you can see the following moving averages:
Daily average price is: $.14 (as of 12/8/22)
50-day moving average at $.17
200-day moving average at $.78
14-day exponential moving average $.16 (first line of potential resistance)
If shares of (SYTA) trend above its first line of resistance in the $.14 cent range, where they are very close to breaching as of 12/8/22, then the next line of potential resistance could be its 50-day moving average at $.17 which would be a 23.19% move from 12/8/22’s opening price of $.138.
But then, the next line of potential resistance for (SYTA) could be its 200-day moving average at $.78, which would be a 465.22% move from 12/8/22’s opening price of $.138.
Make no mistake, if (SYTA) is able to climb from 2/8/22’s opening price of $.138 back to its 52-week high of $5.4763 which was set on 12/09/2021, it would be capping off an incredible 5,110% move. This move isn’t expected, but the potential upside needs to be noted.
A nano-cap company is one of the smallest companies in the market.
Siyata Mobile Inc. (Nasdaq: SYTA) currently has a market cap of less than $2.5 million as of 12/8/22 according to MarketWatch.com. Companies this size are known as Nano-cap stocks.
Nano-caps have a market capitalization of less than $50 million. With a tiny nano-cap company, you could potentially witness a massive growth curve.
According to a study from Tradesmith.com, nano-cap stocks outperformed all other market capitalizations during a specific period in 2021 based on their report.
This potential scales well in any portfolio.
Nano-cap companies tend to be much more flexible than their larger counterparts. When you are small, you can adapt to the changing conditions in the market much more quickly than a larger company.
In addition to this, smaller companies tend to rely on innovation and new ideas in order to stay in business. They will often be able to get things to the market quicker than a large company.
A larger company will require a new idea to go through several different decision-makers and committees before the result of it can hit the market.
Enterprises are going through another industrial revolution known under different names, including Industry 4.0, Digital Transformation, and the Industrial Internet of Things (IIoT). The goal of the implementation of this revolution is to improve efficiency, value, and innovation.
Push-to-talk over cellular or PoC solutions is becoming increasingly popular, which is increasing the growth of the global push-to-talk market.
Large corporations are putting in place cloud-based push-to-talk solutions that offer multimedia features, real-time security, and greater use of wireless Push-to-Talk services.
Likewise, it offers improved call management, cost control, and greater convenience, fueling the expansion of the global push-to-talk market.
Other significant factors are the expanding use of push-to-talk in public safety organizations and the increased demand for rugged and ultra-rugged cell phones.
A rapid increase in the push-to-talk market is also projected as a result of the introduction of cutting-edge technologies like the LTE network and the development of 5G infrastructure.
There will be a range of changes coming for the push to speak market as a result of the Internet of Things (IoT), AI, NLP, and the rising use of online applications.
Thus, there is enormous potential for growth in the industry.
The global push-to-talk market is projected to grow at a positive CAGR of 8.9%, reaching $59.81 billion by 2030.
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