Executive Summary / Key Takeaways

• Siyata Mobile is undergoing a transformative strategic pivot, merging with AI-driven mobile gaming innovator Core Gaming in an approximately $185 million transaction, aiming to unlock significant growth in the $126 billion mobile gaming industry.
• The company's traditional Push-to-Talk (PTT) over Cellular business demonstrated robust performance in Q3 2024, achieving its strongest revenue quarter ever at $5.9 million, driven by strong demand for its SD7 handset and strategic carrier "stock status."
• Core Gaming brings a substantial user base of 43 million monthly active users and a portfolio of over 2,100 games, with projections for its enterprise value to potentially exceed $963 million and revenues to reach $240.8 million by 2027.
• Siyata's PTT segment benefits from differentiated rugged devices like the SD7 and upcoming 5G portfolio, offering cost-effective, nationwide cellular communication solutions that are displacing traditional Land Mobile Radio (LMR) systems for public safety and enterprise.
• Investors should monitor the successful integration of the Core Gaming merger, the realization of its ambitious revenue and profitability targets, and the continued organic growth and path to profitability of the PTT Retained Business.

A Strategic Transformation Unfolds

Siyata Mobile Inc. (NASDAQ: SYTA) stands at the precipice of a profound strategic transformation, pivoting from its established roots in mission-critical Push-to-Talk (PTT) over Cellular communications to embrace the high-growth, AI-driven mobile gaming sector. Headquartered in Montreal, Canada, Siyata has historically focused on developing rugged handsets, in-vehicle communication devices, and cellular boosters for first responders, enterprise customers, and mobile workers across North America, Europe, Australia, and the Middle East. This core business has been built on the premise of displacing traditional Land Mobile Radio (LMR) systems with more advanced, cost-effective cellular-based solutions, a trend that continues to gain traction with public safety agencies and enterprises globally.

The industry landscape for critical communications is characterized by a significant shift towards PTT over Cellular, driven by the broader coverage and advanced capabilities of cellular networks compared to traditional LMR. For instance, FirstNet, owned by AT&T (T), reported supporting approximately 5.5 million PTT over Cellular connections for 27,500 public safety agencies as of December 31, 2023, demonstrating a clear migration trend. Siyata's strategy in this environment has been to offer specialized, rugged devices that mimic the form and function of two-way radios but operate on nationwide cellular networks, providing a broader range and often a more cost-effective solution.

However, the most significant development reshaping Siyata's future is the definitive merger agreement with Core Gaming, Inc., initially signed in February 2025 and amended in August 2025. This approximately $185 million transaction is designed to strategically pivot Siyata into the rapidly expanding AI-driven gaming sector, leveraging Core Gaming's substantial user base and innovative AI-driven applications. Post-merger, Siyata's traditional PTT business will continue as a "PTT Retained Business" under specific financial and operational oversight, while the combined entity will be led by Core Gaming's CEO, Aitan Zacharin. This dual structure aims to capitalize on the stability and growth potential of the PTT segment while aggressively pursuing opportunities in the mobile gaming market.

In the competitive landscape of rugged mobile devices and PTT solutions, Siyata faces established players like Motorola Solutions (MSI), Sonim Technologies (SONM), and Zebra Technologies (ZBRA). Motorola Solutions, a global leader in mission-critical communications, benefits from an extensive global presence and deep R&D capabilities, often leading in integrated ecosystems for public safety. Sonim Technologies specializes in ultra-durable devices for harsh environments, leveraging its reputation for ruggedness. Zebra Technologies focuses on enterprise asset intelligence, including rugged mobile computers and data analytics for logistics. Siyata's niche lies in its tailored, vehicle-centric solutions and its ability to secure "stocked status" with major carriers, which allows for subsidized pricing, making its devices highly competitive against more expensive PTT smartphones from larger rivals. While Siyata may lag in overall scale and R&D investment compared to these larger entities, its specialized focus on fleet-specific ecosystems and cost-effective solutions provides a distinct value proposition, particularly in markets like transportation and emergency services.

Technological Differentiation and Innovation

Siyata Mobile's core technology in its PTT business revolves around its rugged, cellular-based communication devices, most notably the SD7 handset. This device is engineered to function like a traditional two-way radio but operates on a nationwide cellular network, offering significantly broader range and enhanced capabilities compared to legacy LMR systems. A key differentiator is its "direct radio replacement" status, making it the only device of its kind offered by major U.S. wireless carriers. This allows carriers to market and subsidize the SD7, often bringing the upfront cost down to as low as $0.99 for customers, a "home run" for Siyata that levels the playing field against more expensive PTT smartphones.

Beyond the SD7, Siyata is actively innovating with new product introductions. The SD7 Plus, currently undergoing trials, integrates a wide-angle camera with 4G connectivity to provide body camera functionality and real-time situational awareness. This device is expected to be the only carrier-approved product offering both PTT and body camera software, creating a unique market opportunity. Furthermore, the Siyata Real Time View is an advanced video monitoring system designed for first responder and enterprise vehicles. This system, which saw initial installations in ambulances in Q3 2023 with "outstanding results," offers fleet managers enhanced control and remote visibility, providing 360-degree views around vehicles and real-time data. Both the SD7 Plus and Real Time View are designed to generate recurring revenue through partnerships with third-party software providers, such as CrisisGo for school safety applications, where Siyata receives a portion of monthly subscription fees. The company is also developing an "exciting 5G product portfolio" planned for a 2025 launch, with T-Mobile (TMUS) as the first wireless carrier partner, aiming to position Siyata as a global leader in PTT handsets.

The strategic pivot to Core Gaming introduces a new dimension of technological differentiation centered on AI. Core Gaming leverages an advanced AI-driven platform to enhance content creation, marketing strategies, and user engagement within its mobile gaming ecosystem. This includes the AI COMIC App, an AI-powered visual content creation platform that has seen rapid adoption, growing to nearly 300,000 users with strong performance in customer lifetime value (LTV) and return on investment (ROI). Core Gaming also introduced "Nowifi," an offline mini-game hub designed for flexible, private, and globally accessible gaming without the need for Wi-Fi, catering to users in low-connectivity regions. Core Gaming's AI tools are reported to boost content production by 50% and reduce production time by over 40%, providing a significant competitive edge in the crowded mobile gaming market. This technological prowess allows Core Gaming to serve tailored ads and optimize revenue per user in real-time, translating player engagement into reliable financial performance. For investors, this AI-driven innovation represents a substantial competitive moat, potentially leading to higher average revenue per user, improved operational efficiency, and a faster pace of new game development, all contributing to Core Gaming's ambitious growth projections.

Financial Performance: A Tale of Two Businesses

Siyata Mobile's recent financial performance showcases a company in transition, with its traditional PTT business demonstrating significant growth while the impending merger with Core Gaming promises a dramatic shift in its financial profile. In the third quarter of 2024, Siyata achieved its "strongest revenue quarter ever," reporting $5.9 million in revenue. This represented a remarkable 218% increase compared to Q3 2023 and a 210% increase over Q2 2024. The surge was primarily attributed to increased demand for the SD7 handset and accessories, coupled with the company's ability to fulfill this demand with adequate inventory. The U.S. market was a key driver, contributing $4.8 million, or 81% of total revenue, in Q3 2024. Gross margin percentage improved to 29% in Q3 2024 from 26.6% in Q3 2023, with gross margin dollars increasing by $1.2 million to $1.7 million.

Despite this strong Q3 performance, the company faced challenges earlier in 2024. Q2 2024 revenue decreased by $800,000 to $1.9 million compared to Q2 2023, primarily due to working capital constraints that have since been addressed through capital raises. Gross margin percentage in Q2 2024 also saw a significant drop to 10.4% from 29.7% in Q2 2023, largely due to a "one-time heavily discounted transaction with an international reseller." For the full year 2023, Siyata's total revenue increased by 27% to $8.2 million, up from $6.5 million in 2022, with gross margin dollars rising by 91% to $2.7 million and the gross margin percentage improving by 10.8 percentage points to 32.3%.

Profitability remains a key focus for Siyata. Adjusted EBITDA for Q3 2024 was negative $3.3 million, a $1.8 million negative variance compared to Q3 2023, largely due to increased marketing expenses related to investor awareness. Similarly, SG&A expenses rose by $2 million to $4.7 million in Q3 2024 for the same reason. The company's stated goal is to achieve profitability in the coming quarters, driven by aggressive revenue growth and disciplined expense management.

The financial outlook is significantly altered by the Core Gaming merger. ValueScope, LLC, a reputable valuation firm, initially valued Core Gaming at $160 million and later updated its enterprise value to $185.9 million as of November 30, 2024. Core Gaming's CEO, Aitan Zacharin, has articulated a vision to "exceed $100 million in revenue in 2025 and to have the consolidated company profitable." ValueScope further projects Core Gaming's revenue to reach $240.8 million by 2027, with a potential enterprise value topping $963 million. These projections underscore the transformative financial impact the merger is expected to have on Siyata's overall revenue and profitability profile, shifting it from a niche hardware provider to a diversified technology company with a significant presence in the mobile gaming market.

Liquidity and Capital Strategy

Siyata Mobile's liquidity has been a dynamic aspect of its financial management, particularly in the context of its growth initiatives and the impending merger. As of September 30, 2024, working capital stood at $200,000, a decrease of $1.1 million from December 31, 2023. However, excluding non-cash warrants and preferred share liabilities, working capital would have been $1.3 million. Earlier in Q2 2024, working capital was negative $8.3 million, but this was a "short-term challenge" that management addressed through "recent capital raises."

Looking ahead, management has indicated that additional capital will be required to support anticipated growth. The company expects to "have to raise another, I want to say, $2 million to $3 million to be able to support that growth" if sales ramp up as expected. The overarching goal behind these capital raises is to "get us to breakeven profitability," after which the company aims to fund its growth through its own operating cash flows.

The Amended and Restated Merger Agreement with Core Gaming introduces specific provisions regarding the liquidity and capital management of the PTT Retained Business. From the effective time of the merger, cash on hand and cash equivalents of the PTT Subsidiaries (Siyata PTT, Siyata Mobile Israel Ltd., and Signifi Mobile Inc.) will be segregated and used solely to operate the PTT Retained Business. This operation will be funded exclusively from such segregated cash and future operating cash flows or asset sales of the PTT Subsidiaries, with strict limitations on incurring new indebtedness. Furthermore, post-closing disbursements to the PTT Subsidiaries are tied to the occurrence of defined Subsequent Financings, including an aggregate of $1.08 million and an additional $100,000 for each $10 million raised in any Subsequent Financing (up to the cost of tail insurance), and reimbursement of legal fees up to $250,000 upon the receipt of at least $30 million in aggregate gross proceeds from Subsequent Financings. These measures are designed to ensure the PTT business has dedicated resources while the broader combined entity pursues its AI gaming strategy.

Outlook and Growth Catalysts

Siyata Mobile's outlook is characterized by a dual growth trajectory, driven by the continued expansion of its PTT business and the transformative potential of the Core Gaming merger. For its traditional PTT segment, management maintains a goal of "strong revenue growth with a goal of profitability in the coming quarters." The company anticipates "high double-digit growth" for the full year 2024. This optimism is fueled by the rapid adoption of its PTT product portfolio, particularly the SD7 handset, which has achieved "stocked status" with major North American carriers like AT&T, Verizon (VZ), UScellular (USM), and Bell Mobility (BCE) in Canada. This status enables carriers to market and subsidize the device, significantly enhancing its sales potential.

Further growth in the PTT segment is expected from the planned launch of a "very exciting 5G product portfolio in 2025," with T-Mobile confirmed as the first wireless carrier to introduce part of this new lineup. The company is also seeing expanding sales beyond emergency services into new verticals, with K-12 schools identified as a "largest vertical" and a "greenfield market" offering substantial upside. The SD7 Plus, with its unique body camera capabilities, is expected to contribute to revenue in 2024 following trials, and the Siyata Real Time View system is anticipated to be a "great add-on to our product portfolio in 2024 and beyond," both offering recurring revenue streams. While the order backlog can be "lumpy," management expects "much better quarters and much stronger sales" going forward, with more specific guidance anticipated by the end of Q1 2025 as the impact of the "stock product situation" becomes clearer.

The Core Gaming merger represents the most significant growth catalyst. Core Gaming's CEO, Aitan Zacharin, has set ambitious targets, aiming to "exceed $100 million in revenue in 2025 and to have the consolidated company profitable." ValueScope, LLC, projects Core Gaming's revenue to reach $240.8 million by 2027, with a potential enterprise value topping $963 million. This growth is underpinned by Core Gaming's substantial user base of 43 million monthly active users, over 790 million cumulative downloads, and its innovative AI-driven applications like AI COMIC and Nowifi. The merger positions the combined entity squarely in the rapidly expanding $126 billion global mobile gaming industry, offering a pathway to significantly higher revenue and profitability than Siyata's traditional business alone.

Risks and Challenges

Despite the compelling growth catalysts, Siyata Mobile faces several pertinent risks and challenges that investors should consider. The most significant is the inherent complexity and execution risk associated with a transformative merger, particularly one that involves a complete strategic pivot into a new industry like AI-driven mobile gaming. Integrating Core Gaming's operations, technology, and culture into Siyata's existing structure, while simultaneously managing the PTT Retained Business, will require meticulous planning and execution. The success of this pivot hinges on Core Gaming's ability to meet its ambitious revenue and profitability targets, which are substantial given its current stage.

In the PTT business, while demand for the SD7 handset is strong, the "lumpy" nature of order backlogs due to customer purchasing behavior introduces revenue variability. The company's ability to maintain sufficient inventory to fulfill demand, as highlighted by the Q3 2024 performance, remains critical. Furthermore, the need for additional capital raises, estimated at $2 million to $3 million, to support growth and reach profitability, introduces potential dilution risks for existing shareholders, although management aims to minimize this by funding future growth from operations.

Competitive pressures exist in both segments. In PTT, while Siyata benefits from its unique "cellular radio" offering and carrier "stock status," it still competes with larger, more diversified players like Motorola Solutions (MSI) and Sonim Technologies (SONM). In the mobile gaming sector, Core Gaming operates in a highly competitive and rapidly evolving market, where user acquisition and retention are constant challenges. While Core Gaming's AI-driven technology offers a competitive edge, sustained innovation and effective marketing will be crucial to differentiate itself and achieve its growth projections against numerous established and emerging gaming companies.

Conclusion

Siyata Mobile Inc. is embarking on a bold and potentially transformative journey, strategically pivoting towards the high-growth AI-driven mobile gaming sector through its merger with Core Gaming, while maintaining a focused and growing Push-to-Talk communications business. This dual strategy presents a compelling investment narrative: a stable, albeit smaller, PTT segment providing a foundation, complemented by a high-potential AI gaming venture poised for significant expansion. The PTT business, with its differentiated SD7 handset, strategic carrier partnerships, and upcoming 5G portfolio, is well-positioned to capitalize on the ongoing displacement of traditional LMR systems, as evidenced by its record Q3 2024 revenue.

The true upside, however, lies in Core Gaming's integration and execution. With its substantial user base, innovative AI-driven platforms like AI COMIC and Nowifi, and ambitious revenue and profitability targets, Core Gaming has the potential to dramatically reshape Siyata's financial profile and unlock substantial shareholder value. Investors should closely monitor the successful integration of the merger, Core Gaming's ability to achieve its projected financial milestones, and the PTT Retained Business's continued organic growth and path to profitability. The combined entity's ability to leverage technological leadership and execute effectively across both its mission-critical communications and AI gaming segments will be paramount in realizing its long-term growth ambitions and establishing a strong competitive position in these dynamic markets.