Core AI Holdings Inc. (NASDAQ:CHAI) announced on Monday the completion of a definitive agreement to divest Siyata Mobile Inc. and its related subsidiaries, executing the transaction with immediate effect. This divestiture aligns with Core AI's strategy to center its operations predominantly on artificial intelligence ventures and to optimize capital deployment accordingly.
The rationale behind divesting Siyata stems from a reassessment of the anticipated benefits expected from the integration of Siyata's operations within Core AI's framework. Management concluded that the forecasted technology and commercial synergies did not come to fruition as anticipated, prompting a strategic course correction.
Management Insights
Aitan Zacharin, CEO of Core AI Holdings, articulated the reasoning for the divestment by stating, "In pursuing a deeper commitment to advancing our artificial intelligence capabilities, we recognized the divergence between projected synergies and actual outcomes related to Siyata. This divestiture effectively removes around $12 million in annual cash burn, substantially mitigates operational losses, and results in a streamlined balance sheet."
He further elaborated on the financial and strategic benefits: "This move enhances the congruency between our asset base and core AI-oriented strategy, fortifies our overall financial condition, and liberates capital and resources that can be redeployed toward higher-yield investment avenues, which we anticipate will contribute to enduring shareholder value creation."
Details of the Divestiture Agreement
Under the terms set forth in the sale agreement, Core AI is slated to receive an upfront cash payment totaling $100,000. Subsequent compensation will be linked to Siyata's financial performance via an earn-out arrangement. Specifically, Core AI will obtain three annual payments. Each installment will be the greater of $200,000 or 1% of Siyata's gross revenue during the respective fiscal period, as verified through audited IFRS financial statements.
Financial Impact and Prospective Positioning
Analyzing the unaudited pro forma financial data as of September 30, 2025, Core AI's net loss over the preceding nine months has declined markedly to $4.8 million, a notable improvement from the prior net loss of $12.5 million. This $8.7 million reduction primarily derives from the excision of Siyata's operational expense burden.
Concurrently, the company's asset base contracted to $31.6 million from $51.6 million, while total liabilities decreased to $18.3 million from $22.4 million, reflecting the simplification of the balance sheet post-divestment.
CEO Zacharin emphasized the strategic advantages gained: "With Siyata no longer within our operational scope, Core AI functions with a more efficient cost architecture and an unambiguous growth mandate. This positions us to accelerate investments in the development of our AI platform and to pursue targeted growth strategies that hold promise for scalable returns."
Market Reaction
Following the news, Core AI Holdings' share price remained steady at $2.06 during Monday's trading session, as recorded by Benzinga Pro data.
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