Few junior techs have made as much noise of late as Siyata Mobile (Siyata Mobile Stock Quote, Chart: TSXV:SIM).
The company, which designs next-gen connected vehicle products aimed at professional fleets, kicked off November by inking a deal with U.S. tech giant Ingram Micro. The company then bagged a tier-one American cellular operator for its lead offering, the UV350, the world’s first and only dedicated 4G in-vehicle smartphone with Push-to-Talk over Cellular.
The early result of this flurry of activity is a stock that has surged back to investor attention, trading millions of shares and posting a double-digit advance already this month.
Cantech Letter caught up with CEO Marc Seelenfreund to talk about what’s next.
Marc, you recently announced what you described as “supply agreement with a leading Tier 1 cellular carrier in the United States”. What can you tell us about this news?
A Tier 1 cellular carrier enters into a supply agreement with vendors it plans to buy devices from. As we get closer to commercially launching our UV350 commercial vehicle smartphone at this this carrier, we entered into a supply agreement with them which covers pricing, logistics and other commercial terms. This is a very big milestone for Siyata as we have worked for over two years to get to this point.
You recently launched the UV350, which is described as a “Next Generation Vehicle Communicator” in Israel. What does this device do that previous generations didn’t?
UV350 is light years ahead of our legacy devices as smartphones are from feature phones. Our previous generations mainly were for cellular voice calls whereas UV350 supports cellular voice calls, push to talk over cellular, fleet applications, GPS navigation, voice dialing and more. This is truly an all in one device that allows drivers to communicate safely with their peers while keeping their eyes on the road and their hands on the wheel.
The UV350 will also launch in the United States through a deal you have made with Ingram Micro. How did that partnership happen?
The tier 1 Cellular carrier has customers that they sell to directly and others that they sell to via their distribution partner Ingram Micro. We were introduced to Ingram by the carrier and signed a sales and distribution agreement with them accordingly.
“There are over 12 million commercial and first responder vehicles in North America which is our main target market giving us a potential market size just in NA of over 12 billion dollars…”
What is Band 14 and how will its expansion benefit Siyata Mobile?
Band 14 is the dedicated band that was allocated by the US government to support the new first responders network called FirstNet. The Government is investing over $40 billion to set up this network with a goal to move all first responders to this band over the next 5 years. Only devices that support band 14 can potentially get approval to sell to FirstNet and we therefore designed the UV350 to support this band. There are over 2mm first responder vehicles in the US which is a very large-scale opportunity for us.
How big do you think the global market is for the UV350?
There are over 12 million commercial and first responder vehicles in North America which is our main target market giving us a potential market size just in NA of over 12 billion dollars. We also have opportunities to sell this product in Europe, Australia, South America and more which makes the opportunity even greater.
What are the margins like on your various offerings and how can you transition to a higher margin mix?
Our current gross margins on the mix of legacy products are around 26 percent and we expect to grow this to around 35 percent as we continue to roll out our new 4G push to talk portfolio. As we focus our sales in NA and international markets on 4G devices, and as sales volumes grow, we believe our gross margins will also improve further.
“We plan to dramatically ramp up sales at two tier one US carriers and at Bell in Q1 2019 which in itself will bring strong momentum to our operations…”
What does the competitive landscape look like for Siyata?
There are various technologies offered for commercial fleet communication such as Land Mobile Radio (LMR), Data Rugged Tablets and vehicle mounted feature phones, but we have not seen any direct competition to UV350 that can offer a comprehensive all in one solution. The Uniden® UV350 is the only dedicated 4G/LTE in-vehicle smartphone in the world.
What does your balance sheet look like? Will you have to raise more money?
We have approximately 7mm dollars in working capital, and $1M in cash at any given time with 4mm dollars in debt that is convertible at $0.60 per share. Should we decide to raise money it will be for growth capital and additional inventory.
What milestones should investors look for over the next twelve months?
We plan to dramatically ramp up sales at two tier one US carriers and at Bell in Q1 2019 which in itself will bring strong momentum to our operations. I believe that we will win multiple high profile, large scale accounts as our distribution partnerships grow in the United States. In addition, we will be partnering with land mobile radio companies, vehicle technology distributors, additional international cellular carriers and more which makes us confident that 2019 will be a very exciting year!