READ THE FULL SYTA RESEARCH REPORT
Siyata (NASDAQ:SYTA) reported 1st quarter 2022 results on May 16th. Reported revenues were $832,974 compared to $4.01 million in prior period. This decline was largely due to the transition from the legacy product sales cycle to the new product line in which production and marketing efforts were focused on the new SD7 rugged handset. Of that revenue total, approximately $463,000 was related to cellular boosters and accessories while the remaining was related to rugged handsets and accessories.
Gross profits for the quarter came in at $255,051 (30.6% gross margin) compared to $1,740,091 (43.2% gross margin) in the prior year period. This was largely due to the sales issues noted above and those sales being at lower margins compared to the sale of industrial boosters in the U.S. marketplace at slightly higher margins in the prior-year period.
Adjusted EBITDA in the quarter was negative ($2,629,373) versus negative ($291,346) in the prior year period. Our adjusted EBITDA numbers may differ from the company's as we do not add back stock-based compensation.
The company produced a net loss for the quarter of $(4,893,491) as compared to a net loss of ($2,115,406) in the prior year period.
Cash balances at quarter-end stood at $9.2 million and working capital was positive at $11.1 million. The company has no long-term debt but $3.2 million remains on the convertible notes that mature in November 2023 ($2.0 million marked-to-market on the balance sheet).
In January 2022, Siyata closed an underwritten public offering of 8.97 million common shares at a combined effective offering price of $2.30. Each common share unit included one warrant (SYTAW) to purchase one common share. Final net proceeds received were approximately $18.3 million.
We believe that based on early purchase orders already received by the company as well as rollouts in other international markets, Siyata could sell approximately 15,000 units in 2022. That would produce revenues of $4.5 million and perhaps an additional $1.35 million in related accessories.
If the company is able to make significant traction in the Tier 1 carrier markets, the unit number could triple to 45,000 in 2023 which would produce unit revenue of $13.5 million and accessory revenues of approximately $2.7 million.
The company believes it has significant growth opportunities in its three distinct product categories. These include rugged handsets, in-vehicle wireless devices, and cellular boosters.
There are expected to be many catalysts which could occur in 2022 that will drive strong revenue growth and a path to profitability going forward. These include new customer wins across all product lines, significant progress in new wireless carrier launches, and new distribution and marketing partnerships. In addition, the company is continuing to innovate and upgrade its product lines in order to stay current with new technologies and to meet end customers changing needs.
One specific example of near-term catalyst would be FirstNet. FirstNet is a national broadband network operated by AT&T that is dedicated to public safety and is designed to provide mission critical communications with push-to-talk technology to first responders. The organization is targeting aging land mobile radio systems that have been around for many decades. FirstNet recently reported it now has approximately 3.3 million subscribers, mostly first responders. However, the organization recently expanded its potential addressable market by offering its service to secondary public-safety entities such as utility provides, government, transportation, and healthcare users. With this expansion, FirstNet's new addressable market could exceed 10 million users.
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