20-F/A: Siyata Mobile Files Amendment to 20-F Annual Report, Updates Corporate Governance Disclosures

Sentiment:

20-F/A Amendment 3 May 2024 4:30 PM

Siyata Mobile Inc. has filed an amendment to its 20-F annual report to update disclosures regarding corporate governance practices and highlight certain transactions in compliance with Nasdaq rules.

Capital raiseOn October 27, 2021, the Company entered into a securities purchase agreement relating to the purchase and sale of a senior secured convertible note for gross proceeds of USD$6,000,000 with an institutional fund manager.On January 11, 2022, the Company closed an underwritten public offering of 8,695,652 common shares (or pre-funded warrants to purchase common shares in lieu thereof) and accompanying warrants to purchase up to 8,695,652 common shares.On October 13, 2022, the Company closed a $4.0 million underwritten registered direct offering.On January 19, 2023, the Company entered into warrant exercise agreements with 14 existing accredited investors to exercise certain outstanding warrants to purchase up to an aggregate of 18,042,857 of the Companys common Shares.On June 26, 2023, the Company entered into a Securities Purchase Agreement with a certain institutional investor, pursuant to which the Company agreed to issue and sell to the purchaser and to certain additional institutional investors an aggregate of 50,000,000 of the Companys common shares, no par value per share, at a purchase price of $0.045 per common share.On July 11, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors named therein, pursuant to which the Company agreed to issue and sell, in a registered direct offering 51,450,000 of the Companys common shares, no par value per share, at a purchase price of $0.045 per common share.On October 27, 2023, the Company entered into a Securities Purchase Agreement with certain institutional investors named therein, pursuant to which the Company agreed to issue and sell, in a best efforts offering: (i) 1,870,000 of the Companys common shares at a purchase price of $0.65 per common share, (ii) 530,000 pre-funded warrants to purchase common shares, at a purchase price of $0.64 per pre-funded warrant, if purchasing the pre-funded warrants.On April 9, 2024, the Company in a private placement, entered into a Securities Purchase with an institutional investor, selling: (i) 290 shares of the Companys Class C Preferred Shares, stated value $1,000 per share, at a price of $1,000 per share, convertible into Companys common shares and (ii) a warrant to purchase up to 118,000 shares of common shares.On April 17, 2024, the Company entered into a Securities Purchase Agreement with an institutional investor, pursuant to which the Company sold, in a private placement, (i) 290 shares of the Companys Class C Preferred Shares, stated value $1,000 per share, at a price of $1,000 per share, convertible into Companys common shares.

Summary

Siyata Mobile Inc. filed Amendment No. 1 to its Annual Report on Form 20-F for the year ended December 31, 2023.
The amendment primarily updates Item 16G of Part II, focusing on corporate governance practices, and highlights transactions/offerings undertaken in accordance with the Nasdaq exemption of Nasdaq Marketplace Rule 5635.
The company is a foreign private issuer and is permitted to follow its home country practices in lieu of most of the requirements of the 5600 Series of the Nasdaq Marketplace Rules.
The company complies with British Columbia corporate and securities laws and its Articles which requires a quorum of two or more persons who are, or represent by proxy, shareholders holding, in the aggregate, at least five percent (5%) of the issued shares entitled to be voted at the meeting.
The company solicits proxies in accordance with applicable rules and regulations in Canada.
The company has determined to comply with British Columbia corporate and securities laws which do not require the distribution of annual or interim reports to shareholders.
The company has relied upon its home country exemption in place of Nasdaq Marketplace Rule 5635 for several transactions, including securities purchase agreements, public offerings, and warrant exercises.
As of December 31, 2023, the company had 570,462 common shares outstanding.
The company has also elected to rely on home country governance requirements and certain exemptions thereunder rather than the Nasdaq Stock Market Rules, with respect to the following requirements: board of director independence, independent director meetings, and nominations committee implementation.

Sentiment

Score: 6

Explanation: The document is primarily informational, detailing compliance with regulations and corporate governance practices. While there are no explicit negative statements, the reliance on exemptions and history of dilutive transactions could be a concern for some investors, resulting in a neutral to slightly positive sentiment.

Positives

The company is transparently disclosing differences between its corporate governance practices and Nasdaq requirements.
The company is complying with British Columbia corporate and securities laws, which are its home country standards.
The company is providing certifications from the CEO and CFO regarding the accuracy and completeness of the report.

Negatives

The company does not comply with certain Nasdaq corporate governance rules, such as quorum requirements, proxy delivery, and distribution of annual and interim reports.
The company has relied on home country exemptions for dilutive events, which may not be subject to shareholder approval.
The company does not follow Nasdaq rules regarding board of director independence, independent director meetings, and nominations committee implementation.

Risks

The company's reliance on home country exemptions could be viewed negatively by some investors who prefer stricter corporate governance standards.
The company's non-compliance with certain Nasdaq rules could potentially lead to delisting if Nasdaq determines the deviations are too significant.
The company's history of dilutive transactions without shareholder approval could raise concerns about shareholder value.

Future Outlook

The document does not contain specific forward-looking statements beyond the intention to comply with applicable regulations and reporting requirements.

Industry Context

As a foreign private issuer listed on Nasdaq, Siyata Mobile operates within a framework that allows for certain exemptions from U.S. corporate governance standards, aligning with practices in its home country, British Columbia, Canada. This is a common practice among foreign companies listed on U.S. exchanges, balancing compliance with local regulations and attracting international investment.

Comparison to Industry Standards

Many foreign private issuers listed on Nasdaq, such as Nokia (Finland) and Teva Pharmaceutical Industries (Israel), also leverage home country governance exemptions.
These exemptions often relate to board composition, shareholder approval for certain transactions, and proxy rules.
Compared to U.S. domestic issuers, Siyata's corporate governance structure may appear less stringent in certain areas, but it aligns with Canadian standards.
For example, the 5% quorum requirement is lower than the Nasdaq's 33% minimum, potentially making it easier to conduct shareholder meetings.
The lack of mandatory distribution of annual reports is also a deviation from U.S. practice, where companies like Apple and Microsoft are required to provide these reports to shareholders.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Quorum Requirement	The Company complies with British Columbia corporate and securities laws and its Articles which requires a quorum of two or more persons who are, or represent by proxy, shareholders holding, in the aggregate, at least five percent (5%) of the issued shares entitled to be voted at the meeting, instead of Nasdaq Marketplace Rule 5620(c) which requires that each company that is not a limited partnership shall provide for a quorum as specified in its by-laws for any meeting of holders of common stock; provided, however, that in no case shall such quorum be less than 33% of the outstanding shares of the companys common voting stock.	N/A	Lower quorum requirement may make it easier to conduct shareholder meetings.
Proxy Delivery Requirements	The Company solicits proxies in accordance with applicable rules and regulations in Canada, instead of Nasdaq Marketplace Rule 5620(b) which requires that a listed company that is not a limited partnership shall solicit proxies and provide proxy statements for all meetings of shareholders, and also provide copies of such proxy solicitation materials to Nasdaq.	N/A	Compliance with Canadian proxy rules.
Distribution of Annual and Interim Reports	The Company has determined to comply with British Columbia corporate and securities laws which do not require the distribution of annual or interim reports to shareholders, instead of Nasdaq Marketplace Rule 5250(d)(1) and 5250(d)(4)(A).	N/A	Shareholders may need to request reports instead of receiving them automatically.
Shareholder Approval Requirements	The Company complies with British Columbia corporate and securities laws, which do not require shareholder approval for dilutive events unless the Company were to dispose of all or substantially all of its undertaking, instead of Nasdaq Marketplace Rule 5635.	N/A	Dilutive events may occur without shareholder approval.
Board of Director Independence	The Company follows home country practice that permits our board of directors not to have a majority of independent directors in lieu of complying with Rule 5605(b)(1) of the NASDAQ.	N/A	The board may not have a majority of independent directors.
Independent Director Meetings	The Company follows home country practice that permits our independent directors not to hold regularly scheduled meetings at which only independent directors are present in lieu of complying with Rule 5605(b)(2) of the NASDAQ.	N/A	Independent directors may not hold regularly scheduled meetings without non-independent directors present.
Nominations Committee	The Company follows home country practice that permits our board of directors not to implement a nominations committee, in lieu of complying with Rule 5605(e) of the NASDAQ Rules that requires the implementation of a nominations committee.	N/A	The company does not have a nominations committee.

Stakeholder Impact

Shareholders may be impacted by the company's reliance on home country exemptions, which could affect corporate governance standards and shareholder rights.
The company's compliance with British Columbia laws may affect the availability of information to shareholders, as annual and interim reports are not automatically distributed.
The company's history of dilutive transactions could impact shareholder value.

Key Dates

Date	Description
December 31, 2023	Fiscal year ended
April 8, 2024	Original Filing of Form 20-F
April 9, 2024	Private placement with institutional investor
April 17, 2024	Securities Purchase Agreement with institutional investor
May 3, 2024	Date of Amendment No. 1 filing

Keywords

corporate governance, Nasdaq, 20-F, Siyata Mobile, foreign private issuer, shareholder approval, dilutive events, British Columbia, securities, exemptions

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.