Oblong, Inc.

Previous wording

In conjunction with Company's June 2025 private placement, the Company has started to migrate its product focus from Mezzanine™ and related services to the AI and digital assets market.

Current wording

In conjunction with the Company's June 2025 private placement, the Company has started to migrate its product focus from Mezzanine™ and related services to the AI and digital assets market.

Previous wording

Three Months Ended June 30, 2025 (the*** “2025 Second Quarter”), compared to the Three Months Ended June 30, 2024*** (the**“2024 Second Quarter”)

Current wording

Three Months Ended September 30, 2025 (the*** “2025 Third Quarter”), compared to the Three Months Ended September 30, 2024*** (the**“2024 Third Quarter”)

Previous wording

In 2024, we adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. As part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the 2025 Second Quarter and the 2024 Second Quarter, we updated certain segment information for 2025 and recast certain prior period segment information from 2024 to conform with our current period segment presentation.

Current wording

In 2024, we adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. As part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the 2025 Third Quarter and the 2024 Third Quarter, we updated certain segment information for 2025 and recast certain prior period segment information from 2024 to conform with our current period segment presentation.

Previous wording

The following table summarizes the key income statement components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the 2025 Second Quarter and the 2024 Second Quarter (in thousands):

Current wording

The following table summarizes the key income statement components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the 2025 Third Quarter and the 2024 Third Quarter (in thousands):

Previous wording

*Revenue.*Total revenue decreased 3% in the 2025 Second Quarter compared to the 2024 Second Quarter. The following table summarizes the changes in components of our revenue (in thousands), and the significant changes in revenue are discussed in more detail below.

Current wording

*Revenue.*Total revenue increased 4% in the 2025 Third Quarter compared to the 2024 Third Quarter. The following table summarizes the changes in components of our revenue (in thousands), and the significant changes in revenue are discussed in more detail below.

Previous wording

The decrease in our consolidated cost of revenue is mainly attributable to lower costs related to our Collaboration Products segment. Our consolidated gross profit as a percentage of revenue was 38% in the 2025 Second Quarter, compared to a consolidated gross profit as a percentage of revenue of 20% in the 2024 Second Quarter.

Current wording

The decrease in our consolidated cost of revenue is mainly attributable to lower costs related to our Collaboration Products segment. Our consolidated gross profit as a percentage of revenue was 26% in the 2025 Third Quarter, compared to a consolidated gross profit as a percentage of revenue of 14% in the 2024 Third Quarter.

Previous wording

Our Managed Services segment recorded a 28% gross profit as a percentage of sales for the 2025 Second Quarter, compared to 35% in the 2024 Second Quarter. This decrease was primarily due to the reallocation of personnel expenses following our reduction in headcount in September 2024.

Current wording

Our Managed Services segment recorded a 30% gross profit as a percentage of sales for the 2025 Third Quarter, compared to 42% in the 2024 Third Quarter. This decrease was primarily due to the reallocation of personnel expenses following our reduction in headcount in September 2024.

Previous wording

Our Collaboration Products segment recorded a gross profit as a percentage of sales of 96% for the 2025 Second Quarter, compared to a negative gross profit as a percentage of sales of 55% in the 2024 Second Quarter. This increase was mainly attributable to a decrease in personnel costs in the 2025 Second Quarter related to headcount reductions in September 2024 and a reduction in the expense related to our inventory obsolescence reserve of $19,000 in the 2025 Second Quarter compared to the 2024 Second Quarter.

Current wording

Our Collaboration Products segment recorded a gross profit as a percentage of sales of 71% for the 2025 Third Quarter, compared to a negative gross profit as a percentage of sales of 200% in the 2024 Third Quarter. This increase was mainly attributable to a decrease in personnel costs in the 2025 Third Quarter related to headcount reductions in September 2024 and a reduction in the expense related to our inventory obsolescence reserve of $29,000 in the 2025 Third Quarter compared to the 2024 Third Quarter.

Previous wording

Research and Development. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The decrease in research and development expenses for the 2025 Second Quarter compared to the 2024 Second Quarter is primarily attributable to a decrease in consulting and outsourced labor costs between these periods.

Current wording

Research and Development. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The decrease in research and development expenses for the 2025 Third Quarter compared to the 2024 Third Quarter is primarily attributable to a decrease in consulting and outsourced labor costs between these periods.

Previous wording

Sales and Marketing Expenses. The decrease in sales and marketing expenses for the 2025 Second Quarter compared to the 2024 Second Quarter is primarily attributable to reduced personnel expenses during the 2025 Second Quarter related to headcount reductions in September 2024.

Current wording

Sales and Marketing Expenses. The decrease in sales and marketing expenses for the 2025 Third Quarter compared to the 2024 Third Quarter is primarily attributable to reduced personnel expenses during the 2025 Third Quarter related to headcount reductions in September 2024.

Previous wording

General and Administrative Expenses. General and administrative expenses include direct corporate expenses and personnel costs in the various corporate support categories, including executive, finance and accounting, legal, human resources, and information technology. The decrease in general and administrative expenses for the 2025 Second Quarter compared to the 2024 Second Quarter is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024, and reduced stock compensation expense as a result of stock options being fully expensed.

Current wording

General and Administrative Expenses. General and administrative expenses include direct corporate expenses and personnel costs in the various corporate support categories, including executive, finance and accounting, legal, human resources, and information technology. The decrease in general and administrative expenses for the 2025 Third Quarter compared to the 2024 Third Quarter is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024, slightly offset by increased professional service fees, stock-based expense, and insurance expenses.

Previous wording

*Other Income, Net.*Other income, net for the 2025 Second Quarter and the 2024 Second Quarter, is primarily comprised of interest income related to our cash accounts and the unrealized gains on our digital assets.

Current wording

*Other (Expense) Income, Net.*Other (expense), net for the 2025 Third Quarter, is primarily comprised of unrealized losses on our digital assets, slightly offset by our interest income related to our cash accounts. Other income, net for the 2024 Third Quarter, is primarily comprised of interest income related to our cash accounts.

Previous wording

*Loss from Operations.*The decrease in the Company’s loss from operations for the 2025 Second Quarter compared to the 2024 Second Quarter is mainly attributable to an increase in gross profit and a decrease in operating expenses.

Current wording

*Loss from Operations.*The decrease in the Company’s loss from operations for the 2025 Third Quarter compared to the 2024 Third Quarter is mainly attributable to an increase in gross profit and a decrease in operating expenses.

Previous wording

In 2024, we adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. As part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the six months ended June 30, 2025, and 2024, we updated certain segment information for 2025 and recast certain prior period segment information from 2024 to conform with our current period segment presentation.

Current wording

In 2024, we adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. As part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the nine months ended September 30, 2025, and 2024, we updated certain segment information for 2025 and recast certain prior period segment information from 2024 to conform with our current period segment presentation.

Previous wording

The following table summarizes the key income statement components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the six months ended June 30, 2025, and 2024 (in thousands):

Current wording

The following table summarizes the key income statement components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the nine months ended September 30, 2025, and 2024 (in thousands):

Previous wording

*Revenue.*Total revenue decreased 2% in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The following table summarizes the changes in components of our revenue (in thousands), and the significant changes in revenue are discussed in more detail below.

Current wording

*Revenue.*Total revenue remained steady in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. The following table summarizes the changes in components of our revenue (in thousands), and the significant changes in revenue are discussed in more detail below.

Previous wording

The decrease in our consolidated cost of revenue is mainly attributable to lower costs related to our Collaboration Products segment. Our consolidated gross profit as a percentage of revenue was 39% in the six months ended June 30, 2025, compared to a consolidated gross profit as a percentage of revenue of 9% in the six months ended June 30, 2024.

Current wording

The decrease in our consolidated cost of revenue is mainly attributable to lower costs related to our Collaboration Products segment. Our consolidated gross profit as a percentage of revenue was 40% in the nine months ended September 30, 2025, compared to a consolidated gross profit as a percentage of revenue of 11% in the nine months ended September 30, 2024.

Previous wording

Our Managed Services segment recorded a 27% gross profit as a percentage of sales for the six months ended June 30, 2025, compared to 32% in the six months ended June 30, 2024. This decrease was primarily due to the reallocation of personnel expenses following our reduction in headcount in September 2024.

Current wording

Our Managed Services segment recorded a 28% gross profit as a percentage of sales for the nine months ended September 30, 2025, compared to 35% in the nine months ended September 30, 2024. This decrease was primarily due to the reallocation of personnel expenses following our reduction in headcount in September 2024.

Previous wording

Our Collaboration Products segment recorded a gross profit as a percentage of sales of 97% for the six months ended June 30, 2025, compared to a negative gross profit as a percentage of sales of 103% in the six months ended June 30, 2024. This increase was mainly attributable to a decrease in personnel costs in the six months ended June 30, 2025, related to headcount reductions in September 2024 and a reduction in the expense related to our inventory obsolescence reserve of $117,000 in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Our Collaboration Products segment recorded a gross profit as a percentage of sales of 95% for the nine months ended September 30, 2025, compared to a negative gross profit as a percentage of sales of 127% in the nine months ended September 30, 2024. This increase was mainly attributable to a decrease in personnel costs in the nine months ended September 30, 2025, related to headcount reductions in September 2024, and a reduction in the expense related to our inventory obsolescence reserve of $146,000 in the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Previous wording

Research and Development. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The decrease in research and development expenses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily attributable to a decrease in consulting and outsourced labor costs between these periods.

Current wording

Research and Development. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The decrease in research and development expenses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily attributable to a decrease in consulting and outsourced labor costs between these periods.

Previous wording

Sales and Marketing Expenses. The decrease in sales and marketing expenses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024.

Current wording

Sales and Marketing Expenses. The decrease in sales and marketing expenses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024.

Previous wording

General and Administrative Expenses. General and administrative expenses include direct corporate expenses and personnel costs in the various corporate support categories, including executive, finance and accounting, legal, human resources, and information technology. The decrease in general and administrative expenses for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024, and reduced stock compensation expense as a result of stock options being fully expensed.

Current wording

General and Administrative Expenses. General and administrative expenses include direct corporate expenses and personnel costs in the various corporate support categories, including executive, finance and accounting, legal, human resources, and information technology. The decrease in general and administrative expenses for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024, slightly offset by increased stock-based expenses and professional fees.

Previous wording

*Other Income, Net.*Other income, net for the six months ended June 30, 2025, and the six months ended June 30, 2024, is primarily comprised of interest income related to our cash accounts and unrealized gains on our digital assets.

Current wording

*Other (Expense) Income, Net.*Other (expense), net for the nine months ended September 30, 2025, is primarily comprised of unrealized losses on digital assets, slightly offset by interest income on our cash accounts. Other income, net for the nine months ended September 30, 2024, is primarily comprised of interest income related to our cash accounts.

Previous wording

*Loss from Operations.*The decrease in the Company’s loss from operations for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, is mainly attributable to an increase in gross profit and a decrease in operating expenses.

Current wording

*Loss from Operations.*The decrease in the Company’s loss from operations for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, is mainly attributable to an increase in gross profit and a decrease in operating expenses.

Previous wording

During the six months ended June 30, 2025, we adopted critical accounting policies related to our digital assets. Please refer toNote 1 - Business Description and Significant Accounting Policies -Digital Assets for further information. Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under “Critical Accounting Policies” in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our Condensed Consolidated Financial Statements and the footnotes thereto, each included in our 2024 Annual Report.

Current wording

During the nine months ended September 30, 2025, we adopted critical accounting policies related to our digital assets. Please refer toNote 1 - Business Description and Significant Accounting Policies -Digital Assets for further information. Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under “Critical Accounting Policies” in “Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in our Condensed Consolidated Financial Statements and the footnotes thereto, each included in our 2024 Annual Report.

Previous wording

As of June 30, 2025, we had $10,795,000 in cash and cash equivalents and working capital of $11,247,000. For the six months ended June 30, 2025, we incurred a net loss of $1,277,000, and we used $717,000 of net cash in operating activities.

Current wording

As of September 30, 2025, we had $3,737,000 in cash and cash equivalents and working capital of $9,820,000. For the nine months ended September 30, 2025, we incurred a net loss of $3,567,000, and we used $2,271,000 of net cash in operating activities.

Previous wording

Financing activities provided $8,197,000 of net cash for the six months ended June 30, 2025, consisting of net proceeds from the 2025 Private Placement and warrant exercises.

Current wording

Financing activities provided $9,043,000 of net cash for the nine months ended September 30, 2025, consisting of net proceeds from the 2025 Private Placement and warrant exercises.

Previous wording

We believe our existing cash and cash equivalents will be sufficient to fund our operations and meet our working capital requirements for at least the next twelve months from the filing of this Report. This assessment is based on current market conditions, regulatory environment, and the Company's operational plans, all of which are subject to change. In the long term, we believe additional capital will be required to fund operations and provide growth capital, including increasing the size of our cryptocurrency treasury. To access capital to fund operations or provide growth capital, we will need to raise capital from the exercise of outstanding common and/or preferred warrants, and/or in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital that may be needed on terms acceptable to us, it could have a material adverse effect on the Company.

Current wording

We believe our existing cash, cash equivalents, and the fair value of our $TAO tokens (if converted to cash) will be sufficient to fund our operations and meet our working capital requirements for at least the next twelve months from the filing of this Report. This assessment is based on current market conditions, regulatory environment, and the Company's operational plans, all of which are subject to change. In the long term, we believe additional capital will be required to fund operations and provide growth capital, including increasing the size of our cryptocurrency treasury. To access capital to fund operations or provide growth capital, we will need to raise capital from the exercise of outstanding common and/or preferred warrants, and/or in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital that may be needed on terms acceptable to us, it could have a material adverse effect on the Company.