Good day, and welcome to the Siyata Mobile Annual 2020 and First Quarter 2021 Financial Results and Corporate Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Daniel Kim, Vice President, Corporate Development of Siyata. Please go ahead.

Good morning, everyone. Thank you for joining Siyata Mobile Fourth Quarter and Year-End 2020 and First Quarter 2021 Conference Call. Today, I'm joined by our CEO, Marc Seelenfreund; our CFO, Gerald Bernstein; and our VP of International Sales, Glenn Kennedy. We will all be available for questions at the end of the presentation. During the course of this call, management will make express and implied forward-looking statements within the Private Securities Litigation Reform Act of 1995 and other U.S. federal securities laws. These forward-looking statements include, but are not limited to, those statements regarding future product offerings, that the capital raise in 2020 is sufficient to both grow our business and address potential M&A opportunities, in the belief that our first quarter results put us on the path for strong organic growth coupled with higher gross margins. The goal to deliver strong year-over-year revenue growth and reached profitability in the coming quarters; the belief that the worst of the pandemic is behind us and that we will continue to see strong sales in all of our product lines and across our various markets, our expectations relating to our Clear RF acquisition. Our future acquisition strategy and the timing of the sale of our rugged handsets to North American carriers and the belief that we are better positioned today than we have ever been to be able to monetize the trends driving our industry. Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. The forward-looking statements contained in this presentation are subject to other risks and uncertainties, included those discussed in the Risk Factors section and elsewhere in the company's annual report on Form 20-F for the year ended December 31, 2020, filed with the Securities and Exchange Commission. I would now like to turn the call over to Marc.

Thank you, Daniel. In many respects, 2020 was a turning point for Siyata Mobile. After having completed major Tier 1 North American carrier qualifications in 2019, 2020 was marked with significant new sales hires to manage these key accounts. We signed agreements with numerous new distribution partners and resellers and launched multiple new products. We also successfully listed on the NASDAQ Capital Market in September 2020 and raised $13 million in gross proceeds in the process. A subsequent private placement financing for an additional $13 million was completed at the end of 2020. We believe that this new capital is not only a testament to strong institutional support for our business, but also provides us with sufficient working capital to both grow our business and address M&A opportunities. Now in 2021, we are focused on driving our company to profitability. And as we witnessed in our first quarter results, we believe that we are on the path, for strong organic growth coupled with higher gross margins. Our goal is to deliver to our shareholders strong year-over-year revenue growth and to reach profitability in the coming quarters. Ultimately, our strategy is to augment our organic growth with complementary and accretive acquisitions. By the same token, like many companies, 2020 was also challenging for Siyata due to the COVID-19 pandemic. In our commercial vehicle vertical, significantly fewer commercial vehicles were on the road, yellow school buses remained in their parking lots and enterprise customers were not spending in our space. Our biggest sales decline was in the Israeli market, where sales dropped significantly as this market suffered both from COVID shutdowns as well as the lack of government contracts and budget cuts due to the political situation there. However, as demonstrated by our Q1 2021 financials, we have a reason to believe…

Thank you, Marc. Over the last 1.5 years, we have experienced numerous positive trends in each of our end markets. In 2021, FirstNet, a dedicated cellular network for American First responders announced it supports over 2.2 million connections with more than 16,000 subscribing agencies. This marked the fifth consecutive quarter FirstNet had reported at least 200,000 new connections and gained at least 1,000 subscribing agencies. Over the last year, FirstNet has grown its subscriber base by 69% and subscribing agencies by 33%. As the market continues to appreciate the advantage of push-to-talk over cellular compared to land mobile radio, we believe we are well positioned to capitalize on this trend with our innovative solutions. We note that over this forecast period, push-to-talk over cellular growth is expected to outstrip land mobile radio growth by a factor of 2. Industry forecasts, most recently from market insights, forecast the push-to-talk over cellular industry will grow at a 10% compound annual growth rate to $9.1 billion by 2027. We believe these trends play right into our innovative and market-leading product offerings. As previously mentioned, our cellular booster business enjoyed increased demand in 2020. This demand shift has been driven by enterprise and other Fortune 500 companies who wish to complement connectivity with strong consistent cellular signals. Cellular communication provides a robust secure environment not just for remote workers in home and in vehicles, but also for restaurant patrons who wish to download menus for patients at pharmacies who need to verify identity and download scripts for remote workers who require strong clear cellular signals and for first responders where connectivity literally means the difference between life and death, just to name a few. With that, I'd like to pass the line to Glenn, who will discuss the success of the recent sales trends we have been enjoying.

Thank you, Daniel. Looking at our sales funnel, we have enjoyed both an increased cadence and size of recently announced contracts, and we see strong sales potential in each of our 3 product categories. First, in our in-vehicle devices category, we are seeing projects that had been put on hold in 2020 due to COVID-19 now start to become active opportunities again. We have initiated new proof-of-concept trials with several state and local government agencies in the U.S. And in addition, we are seeing growing international demand for the UV350, which remains the market's flagship in-vehicle device and the only one that is approved for sale on North American wireless carriers' networks. Secondly, in our rugged handset product category, we historically sold these devices in international markets. Currently, we have just presented a new innovative rugged handset that supports mission-critical push-to-talk or MCPTT to North American wireless carriers and the feedback from them has been strong. Our objective is to have multiple wireless carriers in North America and internationally to begin selling our new rugged handset with the goal of launching in the second half of 2021. And thirdly, in our cellular booster product category, we saw consistent demand for cellular boosters throughout 2020 as people who work from home offices recognize the importance of having strong cellular signals in their homes to do their work. Encouragingly, we are also now seeing sales opportunities with the wireless operators as they sell to large enterprise and government customers, some of whom need innovative solutions like our cellular boosters. Having launched the Hero Series in 2020, which are the first cellular boosters to support Band-14 for FirstNet and having completed our acquisition of ClearRF, a small cellular booster company in Q1 of 2021, we believe that Siyata is now well positioned to capture large cellular booster opportunities for government agencies and for Fortune 500 companies who require strong cellular signal throughout their brick-and-mortar locations and within their fleet vehicles. We have some very large cellular booster opportunities that we hope to close in 2021. Overall, we're very pleased with the growing acceptance by customers of our truly unique disruptive solutions and we expect, based on what we're seeing today, continued rapid adoption in all of our product categories. I will now hand the line back to Marc for closing remarks.

Thanks, Glenn. We believe that Siyata Mobile is better positioned today than it has ever been to be able to monetize on the strong trends driving our industry. While COVID had a negative impact on our business in 2020, many of our end markets are now rebounding due to pent-up demand, coupled with a long-term fundamental shift to next-generation cellular solutions for enterprise customers and first responders. In summary, we have the right sales team, the right product portfolio and the right customer relationships in place in North America and internationally to drive sales throughout the balance of 2021, and we are very excited about how we will grow our sales with a clear focus on reaching profitability in coming quarters. That concludes our formal remarks. With that, operator, kindly open the call to questions. Thank you.

[Operator Instructions] And the first question comes from Jack Vander Aarde with Maxim Group.

Okay. Great. I'll start with a question for Marc. So obviously, the fourth quarter of 2020 was a challenging time. And I also understand that the Israel sales somewhat collapsed. But then you followed up with first quarter results. which were exceptionally strong. So it was really good to see that rebound there, at least in the data. So maybe just a couple of things. How are Israel sales tracking this year now that we're in 2021? And then looking at the remainder of 2021, do you expect this Q1 kind of $4 million plus revenue number, do you expect the remainder quarters to kind of work off this as a base level? Just how do you expect the rest of 2021 to play out from a revenue stance? And then how are Israel sales tracking to summarize that?

Jack, thank you for the questions. So the Israeli market has definitely come back. Israel went through a difficult COVID period like many other countries, but they've actually -- because of the vaccinations the market has opened up not fully, but relatively, it's opened up relative to the rest of the world very nicely. And we definitely see that in our sales. We've won some very large contracts, both in Q1 and in Q2, and we expect that to continue going forward in 2021. As I mentioned on the call earlier, we expect to be able to reach profitability in the coming quarters, and I think that that's very realistic. And that's going to be based, of course, not just in Israel, but the fact that Israel is part of the mix is very helpful for us. And we see very large scale opportunities that we're coming into also in the United States and in Canada and internationally. And I think that you're going to be very pleased with 2021. My goal is to outbeat your estimations or projections, and I think that, that's very achievable. Maybe one more thing. One more thing, Jack. I think that -- one more thing, I just wanted to mention that also the gross margins that we're seeing now are -- we discussed this sort of at the end of last year that we want it to be around 40% gross margin. And I think that, that is achievable and sustainable. I think that as we have more and more sales in North America, we're seeing much better gross margin than that market. And therefore, I think that, that gross margin is also sustainable. And that's really what -- a mix between the revenue growth and the higher gross margin will allow us to reach profitability.

Got you. I appreciate the added color there. And then maybe zeroing in more on a segment perspective. So cellular booster seems like you guys are really getting momentum there. It seems like it has a bright future. But I would like to understand kind of what's going on behind the scenes a little more. So you made this acquisition of ClearRF. Just what are you providing out there with your cellular boosters, like we had COVID that had -- is it a one-off event where consumers maybe are having increased demand because they're at home. What happens beyond COVID with boosters from a consumer perspective what's the commercial opportunity? Just anything you can share on cellular boosters because it seems like it's a big opportunity.

Yes. So I would say that historically, the company was more focused on consumers and sort of selling over the internet and less to enterprise customers. Last year was the first time that we really started focusing on enterprise customers. And with our Band 14 portfolio, that's almost 100% enterprise customers because that's really for first responders. So in general, we see that this is going to be a very large-scale market for us. I can tell you that our largest competitor sells anywhere between $150 million to $200 million a year, just boosters. That's all they sell. And we think that it's a large-scale market -- And certainly, the Band 14 part of the market is also a very large-scale market for us because think about it, if AT&T wants to give coverage, this is the most cost-effective way for them to be able to give a vehicle or a building coverage without having put out a base station. So in that sense, we think that this is a very big market for us, and it's not just a one-off COVID issue as people are working more and more from their home offices. And as offices in general and first responders need to have better cellular coverage, whether it's in their vehicles or in their buildings, this is just -- this is the cheapest way to be able to get into to allow you to have that kind of store coverage. So we think that this is a very large-scale market for us. It's a growing market, and it's definitely not a one-off just due to COVID.

Jack, this is Dan. I would add to that, that cellular is a very unique broadband medium, whereby WiFi, we are all experiencing, it has its own volatility issues. And the other big issue with Wi-Fi is it's not a secure environment. It's an open network by design. So enterprises are recognizing that not only does cellular provide the boosters provide good cellular connection, but also much better bandwidth. So with consumers moving more and more towards doing things online on their phone or working at home, there's a growing need for that kind of environment where you have constant connectivity, much better bandwidth and a much more secure environment. So that's a dynamic that's really benefiting this.

One more thing, Jack. We're working now with multiple governed in offices and states on large-scale opportunities specifically for vehicles that need to have better coverage for Band 14. So again, if you're a vehicle and you don't want to have to put out additional base stations because that's far more expensive and you want to be able to give good coverage on Band 14, which, of course, Band 14 is becoming popular, but the coverage is never going to be as good as the regular cellular network, right? You'll give them a booster and that will allow them to have better coverage, okay? So those types of opportunities we never had in the past, and that's why we're very bullish on this segment in our business. Another thing is that as 5G comes into the market, right, so 5G, as you know, works in higher frequencies, right? That higher frequency has a hard time getting into a building, right? So again, if you want to put up less base stations and you want to be able to get in to build things, you're going to need more repeaters. So really, the market is playing into this segment of ours, and we think that it's going to be going, forward for many years, a very good part of our business.

Excellent. Excellent. And then maybe I'll just ask one more, and I can hop back in the queue. I wanted to ask a question on the UV350 or maybe just in-vehicle device sales in general. I think you mentioned in the prepared remarks that, that segment was, obviously, like most products were under pressure because of COVID during the year -- during -- But now that business that was maybe delayed or pushed out, it's coming back as you mentioned. I recall months ago that there was, I believe, a case study you guys provided on yellow school buses. And obviously, with vaccines rolling out in the U.S.. And schools coming back online and your target customer opportunity for you guys is yellow school buses. Can you just maybe talk about what this business that's coming back online is related to in-vehicle devices and particularly maybe with school systems?

Sure. Glenn, do you want to take that?

Yes, sure, sure. So Jack, yes, one of the key things -- one of the key vertical markets that we've looked at with the UV350 device is the yellow school bus market, not the only one, but certainly one of the primary ones. And for sure, Marc mentioned earlier in his prepared comments that, that particular vertical market during COVID, many of the buses were not active. Now certainly planning ahead for the September -- August, September time frame. These school districts are reengaging with their buses and reengaging with spending. So we're actually seeing that vertical segment, but also other vertical segments as well begin to reengage with us and begin to start to do trials again and those things. We're doing a variety of trials on the state and government side of things with various DOT, Department of Transportation agencies throughout the U.S. as well. So we're very bullish on that market, rebounding this year in 2021. We're already seeing some real positive signs reengaging with customer trials both in the yellow school bus market as well as other vertical markets.

The next question comes from Bruce Krugel with KRC Insights.

Yes. It seems that these 2 questions are related, so I'll ask them together. It's about the inventories and receivables. So in both on inventories and receivables, you took write-offs and then in Q1, both came back quite strongly. Can you just provide some color, some context what happened in Q4 and obviously, what happened in the increase in Q1?

Dan, do you want to take that?

Bruce, thank you. Good question. So with regards to what happened in Q4, we went through an unusual period with COVID where we gave some extended payment terms to some key customers. Given the pandemic, obviously, things were slowing down for everybody. As a result, we decided, as that inventory started to age, we took that back, so we had to write that off. With regards to how things are shaping up for the first quarter, yes, inventory did increase sequentially, roughly just over $1 million from $3.7 million in Q4. But if you look at our inventory days, they're at 149 days, which gives us roughly 2.5x turns, which is very normal given the revenue that we saw in Q1. And likewise, on the receivable side as well. So receivables, likewise, had a similar dollar value increase. up roughly $1.3 million sequentially. But again, that's at 91 days sales outstanding. So a very normal number, and we're quite comfortable with where they sit today.

Yes. Okay. tough. Do you have anything specific in terms of near-term catalysts that investors might expect?

Can you say the question again? Near term what? I didn't hear that.

Revenue catalysts.

So 1 thing that we just want to bring to your attention is that -- and we mentioned this also on the call is that we are sort of at the end of developing a very unique mission-critical push-to-talk device. And we put out an announcement about 2 months ago. That device, we think, is going to be very innovative in the industry. It's going to be probably the lowest cost mission-critical push-to-talk device. And it's going to be a very high-volume product in our opinion. We're going to be selling it in North America as well as in international markets, and we plan to launch that product in the second half of this year. So we think that, that could be a major, major catalyst for the company simply because it's a very high volume type of product and companies that sell these types of products are able to sell literally hundreds of thousands of units. And we think that there is a very, very strong market for this specific product. And as I said, it's very unique. It's in its design and its functionality. We haven't actually announced exactly what the product looks like, that we plan to do probably in the next 30 to 60 days, something like that. And when you hear about it, we think that, that's going to be very interesting for the company, and it will be just a new catalyst. Because until now, the bulk of the handheld devices that we sold have been either in Israel or in Europe, they were never in North America, right? So now we'll actually have all 3 of our product categories in North America, vehicle devices, cellular boosters, and handheld devices. And obviously, the American market and the North American market is a very large-scale market. And as I mentioned before, we've been in discussions with leading carriers in the United States. We think that we're going to be able to launch with them and we think that this can be a very big catalyst for the company going forward.

And just as a reminder, Bruce, if you recall, as we continue to transition our portfolio towards North America. That is all 4G related. And as a result, our margin profile on these products are significantly higher than our legacy 3G products. So you saw that benefit happen in Q1. And we would hope, as we continue to launch these new products into North America, as Marc has suggested, with the new product category, that will continue to benefit our -- both our top line and our margin profile for the balance of the year.

The next question comes from Daniel Shahrabani with Fard Investments.

I just want to ask you 2 questions. One is my typical green questions and I always speak to Marc about is that with the growing -- I would say, exponential growth of electric vehicles and charging stations. For example, here in Quebec Lion Electric with the school buses, is on -- coming up with its own system to help computerize the school buses whenever they get -- need to get charged again. So this -- is Siyata even dreaming to be in that space where you can have your devices on the fleet which help them maybe recharge more efficiently or go to closest charging station? I don't know if that even coincide with your space. And the second question is more of a capital raising question. Do you foresee that in the next, let's say, one year, would have to go out against the capital markets to get more funds if we're having this expansion? Or if you can just give us an idea of what you think the next capital raising event would be?

So, Glenn, maybe you want to take the first question?

Yes, for sure. So yes, on that first question, definitely because our in-vehicle device, the UV350, is an Android-based device that can support various Android apps running on the product. And therefore, if there is an app developed that will help either commercial vehicles or whomever buses you mentioned, whomever is in need of finding the local charging station. If an app is developed to do exactly that, that can run on our products. And therefore, yes, we can help drivers to find their closest charging station. That's why that's the beauty of the Android system. While often people are interested in push-to-talk over cellular that particular app, we can also support many other kinds of apps like the one you mentioned as well. And then on the raising of capital, Marc, do you or Dan want to address that question?

Yes, I'll take that. So I wouldn't say on a conference call that we're never going to raise money or that we're not going to mine in the next year because obviously, we would raise money if we had to for advantageous reasons if we wanted to do a large-scale M&A or if we had some reason that we wanted to do that. Right now, our cash position is strong, and we don't have to. So I don't foresee it happening specifically in the near future. But again, if we feel that it's important for the company and the price is correct and it's advantageous for the company, then we would do that. But the idea is to do as little dilution as possible for shareholders only if we have to then -- otherwise, then we would do it.

[Operator Instructions] The next question comes from Tim Moore with Zach.

Most of my questions have already been addressed, but I was wondering regarding your reaching profitability in the coming quarters, if you can maybe elaborate or share some thoughts on maybe what revenue milestone you have to achieve in North America given its higher margin accretion to really get to breakeven or profitability. And along those lines, if you can maybe mention some details or actions taken recently or the year-to-date regarding maybe sales force improvements and additions?

Great question. So we have to do about $5 million a quarter to reach profitability. That's sort of the number, or $20 million on an annual basis. And I think that based on the various opportunities that we're going after. I think that it's -- I wouldn't say that I think that we can achieve it in the coming quarters, if I didn't think that we could, we're working on opportunities that are far greater than -- that would allow us to have far greater sales than just $5 million a quarter. And therefore, we think that we can reach those numbers. And I think that it's going to happen in the coming quarters. I think it's very realistic. And again, we're not dependent on one product or on one customer. We sell to multiple customers. We have a large product portfolio. We have various verticals that we're going after. We're not going after just the yellow school buses, or just first responders, we're also going after utilities and waste management and government contracts and whatnot. So in that sense, we're really not limited. We have North American markets. We have international markets. We think that we're going to be able to launch with a large-scale carrier this year outside of the United States also. So between all of those opportunities, we think that it's very probable for us to be able to get to at least $5 million quarters and then have higher and higher margins and higher revenue going forward, okay? We have hired over the past, I want to say, a year, specifically people, salespeople in the United States. We have a very good team that now manages AT&T and Verizon. We have a very strong team that manages our booster sales. We hired additional 2 booster…

As we have no further questions, this concludes our question-and-answer session. I would now like to turn the conference back over to Marc Seelenfreund for any closing remarks.

So I just want to thank our shareholders for bearing with us through this period of the delayed financials. We didn't realize it was going to take as long as it did, and I'm glad that it's now behind us. Anybody that has additional questions is always welcome to reach out to the company or to myself, and I would be happy to be in touch with all of our investors. Thank you very much.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.