TaoWeave, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

Note1 - Business Description and Significant Accounting Policies

Business Description

Oblong, Inc. (“Oblong” or “we” or “us” or the “Company”) was formed as a Delaware corporation in* May 2000*and provides patented multi-stream collaboration technologies and managed services for video collaboration and network applications.

Basis of Presentation

The Company’s fiscal year ends on* December 31of each calendar year. The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared on substantially the same basis as our annual Consolidated Financial Statements for the fiscal year ended December 31, 2024*. In the opinion of the Company’s management, these interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations, and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

The* December 31, 2024* Condensed Consolidated Balance Sheet data in this document was derived from audited consolidated financial statements. The Condensed Consolidated Financial Statements and notes included in this quarterly report on Form10-Q donot include all disclosures required by U.S. generally accepted accounting principles and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended* December 31, 2024*, and notes thereto included in the Company’s fiscal2024 Annual Report on Form10-K, filed with the Securities and Exchange Commission (“SEC”) on* March**18,* 2025 (the “2024 Annual Report”).

On* August 23, 2024,the Company effected a1*-for-40 reverse stock split (the “Reverse Split”) for its Common Stock. All Common Stock share and per share data throughout these Condensed Consolidated Financial Statements have been retroactively adjusted to reflect the Reverse Split.

The results of operations and cash flows for the interim periods included in these Condensed Consolidated Financial Statements arenot necessarily indicative of the results to be expected for any future period or the entire fiscal year.

Principles of Consolidation

The Condensed Consolidated Financial Statements include the accounts of Oblong and our 100%-owned subsidiaries (i) GP Communications, LLC (“GP Communications”), whose business function is to provide interstate telecommunications services for regulatory purposes, and (ii) Oblong Industries, Inc. All inter-company balances and transactions have been eliminated in consolidation. The U.S. Dollar is the functional currency for all subsidiaries.

Cash and Cash Equivalents

As of* March 31, 2025*, our total cash balance of $4,316,000 is available. Of this balance, $500,000 was held in short-term certificates of deposit with MidFirst Bank. As of* December 31, 2024*, our total cash balance of $4,965,000 was available, with $500,000 held in short-term certificates of deposit with MidFirst Bank. The Company considers highly liquid investments with original maturities ofthree months or less to be cash equivalents.

Segments

The Company currently operates intwo segments: (1) “Collaboration Products,” which represents the business surrounding our Mezzanine™ product offerings, and (2) “Managed Services,” which represents the business surrounding managed services for video collaboration and network solutions.**See Note7 - Segment Reporting **for further discussion.

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Use of Estimates

Preparation of the Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates made. We continually evaluate estimates used in the preparation of our consolidated financial statements for reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. The significant areas of estimation include determining the estimated credit losses and the inputs used in the fair value of equity-based awards.

Significant Accounting Policies

The significant accounting policies used in the preparation of these Condensed Consolidated Financial Statements are disclosed in our2024 Annual Report, and there have beenno changes to the Company’s significant accounting policies during thethree months ended* March 31, 2025*.

Recently Issued Accounting Pronouncements

In* December 2023,the FASB issued ASUNo.* 2023-09, Improvements to Tax Disclosures (Topic740*), to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2025,*with early adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

In* November 2024,the FASB issued ASUNo.* 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40) Disaggregation of Income Statement Expenses, which requires public business entities to disclose additional information about certain expenses in the notes to the financial statements. This guidance is effective for annual reporting periods beginning after* December 15, 2026,and interim reporting periods beginning after December 15, 2027.*Early adoption is permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

Note2 - Liquidity

As of* March 31, 2025*, we had $4,316,000 in cash and cash equivalents and working capital of $3,345,000. For thethree months ended* March 31, 2025*, we incurred a net loss of $672,000, financing activities provided $31,000 in net cash, and we used net cash of $680,000 in operating activities.

We believe our existing cash and cash equivalents will be sufficient to fund our operations and meet our working capital requirements into thefourth quarter of2026.

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Note3 - Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

As of* March 31, 2025*, and* December 31, 2024*, our Managed Services segment had accrued expenses and other current liabilities of $21,000 and $18,000, respectively. These expenses consisted primarily of taxes and regulatory fees. The increase was primarily related to higher regulatory fees.

As of* March 31, 2025*, and* December 31, 2024*, accrued expenses and other current liabilities for our Collaboration Products segment were $257,000 and $252,000, respectively. These amounts primarily consist of rent expenses and customer deposits.

Unallocated accrued expenses were $1,016,000 and $861,000 as of* March 31, 2025*, and* December 31, 2024*, respectively. Unallocated accrued expenses consisted primarily of compensation expenses, professional service expenses, accrued dividends, and corporate franchise taxes.

Note4 - Capital Stock

Common Stock

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “OBLG.” As of* March 31, 2025*, we had 150,000,000 shares of our Common Stock authorized, with 1,154,926 and 1,154,737 shares issued and outstanding, respectively.

On* August 23, 2024,the Company effected the Reverse Stock Split. The Company’s shares of Common Stock began trading on a split-adjusted basis at the commencement of trading on August 26, 2024.Upon effectiveness, every 40 shares of Common Stock were converted into1* share of Common Stock. The number of authorized shares and the par value of each share remained unchanged.No fractional shares were issued as a result of the Reverse Split, and any fractional shares that would have otherwise resulted from the Reverse Split were rounded up to the nearest whole share.

During thethree months ended* March 31, 2025*,10,000 shares of the Company’s Common Stock were issued related to the exercise of 10,000 Common Warrants granted on* March 30, 2023.There wereno Common Warrant exercises during thethree* months ended* March 31, 2024*.

During thethree months ended* March 31, 2024*,90,056 shares of the Company’s Common Stock were issued related to the conversion of 922 shares of Series F Preferred Stock, plus accrued dividends. There wereno preferred stock conversions during thethree months ended* March 31, 2025*.**See Note5 - Preferred Stock **for further details.

Common Stock activity for the year ended* December 31, 2024* andthree months ended* March 31, 2025* is presented below.

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Common Stock Warrants

On* March30,* 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we issued and sold, in a private placement (the “Private Placement”) (i)6,550 shares of our newly designated Series F Preferred Stock, $0.0001 par value per share (the “Series F Preferred Stock”), (ii) preferred warrants (the “Preferred Warrants”) to acquire 32,750 shares of Series F Preferred Stock, and (iii) common warrants (“Common Warrants” and with the Preferred Warrants the “Investor Warrants”) to acquire up to 95,764 shares of Common Stock. Please refer toNote5 - Preferred Stock **for further discussion on the Series F Preferred Stock and Preferred Warrants.

In connection with the Private Placement, pursuant to an engagement letter dated* March**30,* 2023 (the “Engagement Letter”), between the Company and Dawson James Securities, Inc. (the “Placement Agent”), the Company agreed to (i) pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds raised in the Private Placement, and (ii) grant to the Placement Agent warrants (the “Placement Agent Warrants”) to purchase 7,663 shares of Common Stock.

On* March**31,* 2023, the Company issued the Common Warrants and the Placement Agent Warrants to purchase an aggregate of 103,427 shares of the Company’s Common Stock. The Common Warrants and Placement Agent Warrants have a term of5 years, commencingsix months andone day from the date of issuance, and were initially exercisable for $68.40 per share. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination, recapitalization, or other similar transactions involving the Common Stock, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price for the Common Warrants (subject to certain exceptions). The Common Warrants and Placement Agent Warrants are exercisable for cash, provided that if there isno effective registration statement permitting the resale of the common shares, they* may*be exercised on a cashless basis. Exercise of the Common Warrants and Placement Agent Warrants is subject to certain limitations, including a 4.99% beneficial ownership limitation.

On* October 6, 2023,the Company and the Investors holding a majority of the outstanding shares of the Preferred Stock agreed to waive any and all provisions, terms, covenants and obligations in the Certificate of Designations or Common Warrants to the extent such provisions permit the conversion or exercise of the Preferred Stock and the Common Warrants, respectively, to occur at a price below $11.17 (the “Waiver”). Notwithstanding anything to the contrary in the Certificate of Designations, each of the “Alternate Conversion Price” and the “Floor Price” as set forth in the Certificate of Designations shall inno* event be less than $11.17 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events). On* September 13, 2024,the Company and the Investors agreed to delete Section2* of the Waiver, removing the minimum price restriction on the exercise of Common Warrants.

During the year ended* December 31, 2024*,24,104 Common Warrants were issued in accordance with the exercise provisions of the Preferred Warrants.See Note5 - Preferred Stock for additional details on the exercises of the Preferred Warrants. These Common Warrants were exercisable at an initial exercise price of $68.40 and have a term offive years.

Pursuant to Sections2(a) and2(c) of the Common Warrants (the “Make Whole Provision”), as a result of the Reverse Split, the exercise price of the Common Warrants and Placement Agent Warrants were adjusted to $3.41 per share, and the number of Common Warrant shares that* maybe purchased upon exercise of the Common Warrants and the Placement Agent Warrants were increased proportionately, so that after the exercise price adjustment the aggregate exercise price payable hereunder for the adjusted number of Common Warrant Shares was the same as the aggregate exercise price in effect immediately prior to the exercise price adjustment. These adjustments resulted in an aggregate of 2,401,047 Common Warrants and 153,470 Placement Agent Warrants remaining outstanding following the Reverse Split. The additional warrants created by the Make Whole Provision resulted in an aggregate deemed dividend of $8,974,000, which reduced the net income available to common shareholders during the year ended December 31, 2024*. Details of the Make Whole Provision transactions are presented below:

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During thethree months ended* March 31, 2025*,10,000 Common Warrants were exercised at a price of $3.41 per share for 10,000 shares of Common Stock. The Company received gross and net proceeds of $34,000 and $31,000, respectively. No Common Warrants were exercised during thethree months ended* March 31, 2024.*

One of our directors, Jonathan Schechter, is currently a partner at The Special Equities Group (“SEG”), a division of Dawson James Securities, Inc. (“Dawson James”). In* March 2023,prior to Mr. Schechter’s appointment to our board in May 2023and pursuant to our Engagement Letter, Dawson James acted as placement agent in connection with our March 30, 2023Purchase Agreement. During thethree* months ended* March 31, 2025*, pursuant to the terms of the Placement Agent Agreement, we paid Dawson James a cash fee equal to 8% of the aggregate gross proceeds raised from the exercise of the Common Stock Warrants. The fee was $3,000. Mr. Schechter didnot receive any of the fee paid.

Common Warrants outstanding as of* March 31, 2025* are as follows:

Common Warrant activity for the year ended* December 31, 2024*, and thethree months ended* March 31, 2025*, is presented below.

Treasury Shares

The Company maintains treasury stock for the Common Stock shares repurchased when withholding shares to cover taxes on transactions related to equity awards. There wereno treasury stock transactions during thethree months ended* March 31, 2025*, or the year ended* December 31, 2024*.

Note5 - Preferred Stock

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. As of* March 31, 2025* and* December 31, 2024*, we had 1,983,250 designated shares of preferred stock and 545 shares of preferred stock issued and outstanding.

Series F Preferred Stock

The terms of the Series F Preferred Stock are as set forth in the Certificate of Designations of Series F Preferred Stock of Oblong, Inc. (the “Certificate of Designations”), which was filed and became effective with the Secretary of State of the State of Delaware on* March31,* 2023. The Private Placement closed on* March31,* 2023, in exchange for gross and net proceeds of $6,386,000 and $5,364,000, respectively. The financing fees associated with the Purchase Agreement were $1,022,000.

The Series F Preferred Shares are convertible into fully paid and non-assessable shares of the Company’s Common Stock at the election of the holder at any time at an initial conversion price of $68.40 (the “Conversion Price”). The holders of the Series F Preferred Shares* mayalso elect to convert their shares at an alternative conversion price equal to the lower of (i)80% of the applicable Conversion Price as in effect on the date of the conversion, (ii)80% of the closing price on the trading day immediately preceding the delivery of the conversion notice, and (iii) the greater of (a) the Floor Price (as defined in the Certificate of Designations) and (b) the quotient of (x) the sum of thefive* lowest Closing Bid Prices (as defined in the Certificate of Designations) for trading days in the30 consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable Conversion Notice, divided by (y) five. The Conversion Price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalization, or other similar transactions involving the Common Stock, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of our common stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions).

On* October 6, 2023,the Company and Investors holding a majority of the outstanding shares of the Preferred Stock agreed to waive any and all provisions, terms, covenants and obligations in the Certificate of Designations to the extent such provisions permit the conversion or exercise of the Preferred Stock to occur at a price below $11.17. Notwithstanding anything to the contrary in the Certificate of Designations, each of the “Alternate Conversion Price” and the “Floor Price” as set forth in the Certificate of Designations shall inno* event be less than $11.17 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).

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Under the Certificate of Designations, the Series F Preferred Shares have an initial stated value of $1,000 per share (the “Stated Value”). The holders of the Series F Preferred Shares are entitled to dividends of 9% per annum, which will be payable in arrears quarterly. Accrued dividends* maybe paid, at our option, in cash, and ifnot* paid, shall increase the stated value of the Series F Preferred Shares. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series F Preferred Shares will accrue dividends at the rate of 20% per annum (the “Default Rate”). The Series F Preferred Shares haveno voting rights, other than with respect to certain matters affecting the rights of the Series F Preferred Shares. On matters with respect to which the holders of the Series F Preferred Shares have a right to vote, holders of the Preferred Shares will have voting rights on an as-converted basis.

Our ability to settle conversions is subject to certain limitations set forth in the Certificate of Designations. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of the Series F Preferred Shares.

The Certificate of Designations includes certain Triggering Events (as defined in the Certificate of Designations), including, among other things, (i) the failure to file and maintain an effective registration statement covering the sale of the holder’s securities registrable pursuant to the Registration Rights Agreement, (ii) the failure to pay any amounts due to the holders of the Series F Preferred Shares when due, and (iii) if Peter Holst ceases to be the chief executive officer of the Company other than because of his death, and a qualified replacement, reasonably acceptable to a majority of the holders of the Series F Preferred Shares, isnot appointed withinthirty (30) business days. In connection with a Triggering Event, the Default Rate is triggered. We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), maintenance of properties and the transfer of assets, among other matters.

During thethree months ended* March 31, 2024*,922 shares of Series F Preferred Stock, plus accrued dividends of $84,000, were converted into 90,056 shares of the Company’s Common Stock. There wereno Series F Preferred Stock conversions during thethree months ended* March 31, 2025*. There were 545 shares of Series F Preferred Stock outstanding and accrued dividends of $41,000 as of* March 31, 2025*.

Series F Preferred Stock transactions are summarized in the table below:

Series F Preferred Stock Warrants

The Preferred Warrants are exercisable for Series F Preferred Shares at an exercise price of $975. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalizations, or other similar transactions involving the Common Stock. The Preferred Warrants expire three years from the date of issuance and are exercisable for cash. For each Preferred Warrant exercised, the Investors shall receive Common Warrants to purchase a number of shares of Common Stock equal to 100% of the number of shares of Common Stock the Investors would receive if the Series F Preferred Shares issuable upon exercise of such Warrant were converted at the applicable Conversion Price. The fair value of the Preferred Warrants was recorded within additional paid-in capital upon issuance.

During thethree months ended* March 31, 2025* no Preferred Warrants were exercised. As of* March 31, 2025*,31,102 Preferred Warrants remained outstanding.

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Note6 - Net Loss Per Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares of common stock outstanding doesnot include any potentially dilutive securities or unvested Restricted Stock.

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, preferred stock, warrants, and unvested Restricted Stock, to the extent they are dilutive. For thethree months ended* March 31, 2025and2024*, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive (due to the net loss).

The following table sets forth the computation of the Company’s basic and diluted net loss per share (in thousands, except share and per share data):

The following table represents the potential shares that were excluded from the computation of weighted-average number of shares of common stock in computing the diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (due to the net loss):

Note7 - Segment Reporting

The Company currently operates intwo segments for purposes of segment reporting: (1) “Collaboration Products,” which represents the Oblong Industries business surrounding our Mezzanine™ product offerings, and (2) “Managed Services,” which represents the Oblong business surrounding managed services for network solutions and video collaboration.

In2024, the Company adopted ASU2023-07. ASU2023-07 created certain additional disclosure requirements, including, among other requirements, disclosure of the Company’s Significant Segment Expenses (“SSEs”) regularly provided to the Company’s Chief Operating Decision Maker (“CODM”) included within each reported measure of segment profit or loss, a required disclosure for other segment items and a narrative description of such items, a disclosure of the title and the position of the CODM and a narrative disclosure describing how the CODM uses the reported segment profit or loss measures to assess segment performance and allocate resources.

The CODM for both segments for thethree months ended* March 31, 2025* and2024, was Pete Holst, the Company’s President and Chief Executive Officer. As part of the adoption of ASU2023-07, management reviewed the information provided to the CODM and updated the presentation of such information, including SSEs, to better align with the requirements of ASU2023-07. Certain prior period segment information has been recast to conform with current-period presentation requirements, including the allocation methodology of bad debt expense, labor and labor-related costs, and certain other segment items to segments. The CDOM reviews assets as a whole entity for decision making.

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Certain information concerning the Company’s segments for thethree months ended* March 31, 2025*, and2024 is presented in the following tables (in thousands):

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The Company’s SSEs for each segment include direct labor costs and segment-based management expenses (collectively, “labor and labor related”), costs to purchase, store, and ship inventory, and inventory impairments (inventory and inventory related), circuit and network cost of revenue, other non-inventory cost of revenue, research and development costs, and bad debt recovery, as these are specific costs regularly provided to the CODM and used to evaluate segment performance. Other segment items include expenses recorded within cost of revenue and operating expenses, which arenot regularly provided to the CODM. The CODM evaluates segment profit each period against historical results, factoring in macroeconomic factors such as the cost of labor and supplies, to assess segment performance.

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For thethree months ended* March 31, 2025*, and2024,no material revenue was attributable to any individual foreign country. Approximately 1% of foreign revenue is billed in foreign currency, and foreign currency gains and losses arenot material. Revenue by geographic area is allocated as follows (in thousands):

The Company considers a significant customer to beone that comprises more than10% of the Company’s consolidated revenues or accounts receivable. The loss of or a reduction in sales or anticipated sales to our most significant or several of our smaller customers could have a material adverse effect on our business, financial condition, and results of operations.

Concentration of consolidated revenues was as follows:

Concentration of consolidated accounts receivable was as follows:

Note8 - Commitments and Contingencies

From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we have insurance coverage. As of the date hereof, we arenot party to any legal proceedings that we currently believe will have a material adverse effect on our business, financial position, results of operations, or liquidity.

Note9 - Subsequent Events

On* April 17, 2025,the Company’s Board of Directors authorized a stock repurchase program (the “Stock Repurchase Program”) granting the Company authority to repurchase up to $500,000 of the Company’s Common Stock. Under the Company’s Stock Repurchase Program, repurchases of Common Stock maybe funded using the Company’s existing cash balance and/or future cash flows through repurchases made in the open market, in privately negotiated transactions, or pursuant to other means determined by the Company, in each case as permitted by securities laws and other legal requirements. The number of shares purchased under the Stock Repurchase Program and the timing of any purchases maybe based on many factors, including the level of the Company’s available cash, general business conditions, and the pricing of the Common Stock. The Stock Repurchase Program doesnot* obligate the Company to acquire a specific number of shares, and* maybe suspended, modified, or terminated at any time. All shares of Common Stock repurchased under the Stock Repurchase Program are recorded as treasury stock. The Stock Repurchase Program doesnot* have an expiration date. As of the filing of this Report, the Company hasnot repurchased any shares of Common Stock and has $500,000 remaining under the Stock Repurchase Program.

In* April 2025,*165,000 Common Warrants were exercised, at a price of $3.41 per share, for 165,000 shares of Common Stock. The Company received gross and net proceeds of $598,000 and $520,000, respectively.

In* April 2025,*52 shares of Series F Preferred Stock, plus accrued dividends of $4,000, were converted into 5,044 shares of the Company’s Common Stock.

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