TaoWeave, Inc.

Previous wording

The Company currently operates in two 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 (formerly Glowpoint) business surrounding managed services for network solutions and video collaboration.

Current wording

The Company currently operates in three segments: (1) "Digital Assets", which represents the business surrounding our treasury activity with Bittensor, (2) “Managed Services”, which represents the business surrounding managed services for video collaboration and network solutions, and (3) “Collaboration Products”, which represents the business surrounding our Mezzanine™ product offerings.

Previous wording

Our product is called Mezzanine™, a family of turn-key products that enable dynamic and immersive visual collaboration across multi-users, multi-screens, multi-devices, and multi-locations. Mezzanine™ allows multiple people to share, control, and arrange content simultaneously from any location, enabling all participants to see the same content in its entirety at the same time in identical formats, resulting in dramatic enhancements to both in-room and virtual videoconference presentations. Applications include video telepresence, laptop and application sharing, whiteboard sharing, and slides. Spatial input allows content to be spread across screens, spanning different walls, scalable to an arbitrary number of displays, and interact with our proprietary wand device. Mezzanine™ substantially enhances day-to-day virtual meetings with technology that accelerates decision-making, improves communication, and increases productivity. Mezzanine™ scales up to support the most immersive and commanding innovation centers, across to link labs, conference spaces, and situation rooms, and down for the smallest work groups. Mezzanine’s digital collaboration platform can be sold as delivered systems in various configurations for small teams to total immersion experiences. The family includes the 200 Series (two display screen), 300 Series (three screen), and 600 Series (six screen). We also sell maintenance and support contracts related to Mezzanine™.

Current wording

Our product is called Mezzanine™, a family of turn-key products that enable dynamic and immersive visual collaboration across multi-users, multiple screens, multiple devices, and multiple locations. Mezzanine™ allows multiple people to share, control, and arrange content simultaneously, from any location, enabling all participants to see the same content in its entirety at the same time in identical formats, resulting in dramatic enhancements to both in-room and virtual videoconference presentations. Applications include video telepresence, laptop and application sharing, whiteboard sharing, and slides. Spatial input allows content to be spread across screens spanning different walls, be scalable to an arbitrary number of displays, and interact with our proprietary wand device. Mezzanine™ substantially enhances day-to-day virtual meetings with technology that accelerates decision making, improves communication, and increases productivity. Mezzanine™ scales up to support the most immersive and commanding innovation centers; across to link labs, conference spaces, and situation rooms; and down for the smallest work groups. Mezzanine’s digital collaboration platform can be sold as delivered systems in various configurations for small teams to total immersion experiences. The family includes the 200 Series (two display screens), 300 Series (three screens), and 600 Series (six screens). We also sell maintenance and support contracts related to Mezzanine™.

Previous wording

We provide our customers with network solutions that ensure reliable, high-quality, and secure traffic of video, data, and internet. Network services are offered to our customers on a subscription basis. Our network services business carries variable costs associated with the purchasing and reselling of this connectivity.

Current wording

We provide our customers with network solutions that ensure reliable, high-quality, and secure traffic of video, data, and internet. Network services are offered to our customers on a subscription basis. Our network services business incurs variable costs for purchasing and reselling this connectivity.

Previous wording

We provide a range of managed services for video collaboration, from automated to orchestrated, to simplify the user experience in an effort to drive the adoption of video collaboration throughout our customers’ enterprise. We deliver our services through a hybrid service platform or as a service layer on top of our customers’ video infrastructure. We provide our customers with i) managed videoconferencing, where we set up and manage customer videoconferencing, and ii) remote service management, where we provide 24/7 support and management of customer video environments.

Current wording

We provide a range of managed services for video collaboration, from automated to orchestrated, to simplify the user experience and drive adoption across our customers’ enterprises. We deliver our services through a hybrid service platform or as a service layer on top of our customers’ video infrastructure. We provide our customers with i) managed videoconferencing, where we set up and manage customer videoconferences, and ii) remote service management, where we provide 24/7 support and management of customer video environments.

Previous wording

We are a provider of patented multi-stream collaboration products and managed services for network solutions and video collaboration. The Company currently operates in two 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 network solutions and video collaboration.

Current wording

The Company currently operates in three segments: (1) "Digital Assets", which represents the business surrounding our treasury activity with Bittensor, (2) “Managed Services”, which represents the business surrounding managed services for video collaboration and network solutions, and (3) “Collaboration Products”, which represents the business surrounding our Mezzanine™ product offerings.

Previous wording

*Revenue.*Total revenue decreased 37.6% for the year ended December 31, 2024, compared to the year ended December 31, 2023. The following table summarizes the changes in components of our revenue, and the significant changes in revenue are discussed in more detail below (in thousands):

Current wording

*Revenue.*Total revenue increased 2.5% for the year ended December 31, 2025, compared to the year ended December 31, 2024. The following table summarizes the changes in components of our revenue, and the significant changes in revenue are discussed in more detail below (in thousands):

Previous wording

As a percentage of sales, the cost of revenue for the Collaboration Products segment was 225% in 2024, compared to 95% in 2023. The year-over-year increase in the cost of revenue for our Collaborations Products segment is primarily related to the larger relative charges related to obsolete inventory. During the year ended December 31, 2023, the Company recorded charges related to obsolete inventory of $239,000 and inventory disposals of $103,000, compared to charges related to obsolete inventory of $191,000, partially offset by severance costs of $30,000 for the year ended December 31, 2024. As of December 31, 2024, the Company has recorded a full reserve against our inventory on hand, resulting in zero net inventory.

Current wording

Our Collaboration Products segment recorded a gross profit percentage of 95% for 2025, compared to a negative gross profit percentage of 125% for 2024. The year-over-year decrease in cost of revenue for our Collaborations Products segment is mainly attributable to lower personnel costs in 2025, driven by headcount reductions in September 2024, and a reduction in inventory-related expenses. As of December 31, 2024, the Company recorded a full reserve against our inventory on hand, resulting in zero net inventory.

Previous wording

The year-over-year decrease in the cost of revenue is mainly due to lower costs associated with the revenue decrease during the same period and reduced personnel expenses related to cost-cutting measures. The Company’s consolidated gross profit as a percentage of revenue was 14% in 2024 compared to 24% in 2023. This decrease was primarily due to the decline in the gross profit percentage for our Collaboration Products segment.

Current wording

The year-over-year decrease in the cost of revenue is mainly attributable to lower costs in our Collaboration Products segment. The Company’s consolidated gross profit percentage was 42% in 2025 compared to 14% in 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 for our Collaboration Products segment. The year-over-year increase in research and development expenses for 2024 compared to 2023 is primarily attributable to the development of features and enhancements to our Mezzanine™ product offerings. There were no research and development costs for our Managed Services segment for 2024 or 2023.

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 for our Collaboration Products segment. The year-over-year decrease in research and development expenses in 2025 relative to 2024 is primarily attributable to lower consulting and outsourced labor costs. There were no research and development costs for our Managed Services segment in 2025 or 2024, and there were none for our Digital Assets segment in 2025.

Previous wording

Sales and Marketing. The year-over-year decrease in sales and marketing expenses for our Collaboration Products segment in 2024 compared to 2023 is primarily attributable to lower personnel costs due to reduced headcount and reduced office expenses year-over-year related to leases exited during 2023. This reduction was partially offset by severance costs of $16,000 for 2024. There were no sales and marketing expenses for our Managed Services segment for 2024 or 2023.

Current wording

Sales and Marketing. The year-over-year decrease in sales and marketing expenses for our Collaboration Products segment in 2025 compared to 2024 is primarily attributable to lower personnel costs, driven by our headcount reduction in September 2024. There were no sales and marketing expenses for our Managed Services segment in 2025 or 2024, and there were none for our Digital Assets segment in 2025.

Previous wording

General and Administrative. General and administrative expenses include primarily direct corporate expenses related to costs of personnel in the various corporate support categories, including executive, legal, finance and accounting, human resources and information technology. The year-over-year decrease in general and administrative expenses in 2024 compared to 2023 is mainly attributable to decreases in personnel costs due to reduced headcount, reduced office expenses related to leases exited in 2023, and reduced stock compensation expense. These reductions were partially offset by $59,000 in severance costs in 2024.

Current wording

General and Administrative. General and administrative expenses primarily include direct corporate expenses for personnel across the following corporate support categories: executive, legal, finance and accounting, human resources, and information technology. The year-over-year decrease in general and administrative expenses in 2025 compared to 2024 is mainly attributable to decreases in personnel costs resulting from our headcount reduction in September 2024 and a recovery in bad debt, partially offset by increases in professional service, stock-based expense, and insurance expense.

Previous wording

*Loss from Operations.*The year-over-year decrease in the Company’s loss from operations is mainly attributable to the reduction in impairment charges and other operating expenses, as addressed above.

Current wording

*Loss from Operations.*The year-over-year decrease in the Company’s loss from operations is mainly attributable to the reduction in operating expenses, as addressed above, and the introduction of our Digital Assets segment.

Previous wording

Interest and Other Income, Net. Interest and other income, net in 2024 and 2023, primarily comprised of interest income related to our cash accounts.

Current wording

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

Previous wording

*Income Tax Expense.*We recorded an income tax expense of $10,000 in 2024, compared to $27,000 in 2023 (seeNote 11 - Income Taxes to our Consolidated Financial Statements).

Current wording

*Income Tax Expense.*We recorded income tax expense of $2,000 in 2025, compared to $10,000 in 2024 (seeNote 11 - Income Taxes to our Consolidated Financial Statements).

Previous wording

As of December 31, 2024, we had $4,965,000 of cash and cash equivalents and $3,997,000 of working capital. For the years ended December 31, 2024, and 2023, we incurred net losses of $4,043,000 and $4,384,000, respectively, and net cash used in operating activities was $3,406,200 and $2,993,000, respectively.

Current wording

As of December 31, 2025, we had $2,258,000 in cash and cash equivalents, $5,395,000 in digital asset balances, and $7,029,000 in working capital. For the year ended December 31, 2025, we incurred a net loss of $6,355,000, and we used $3,015,000 of net cash in operating activities.

Previous wording

Net cash provided by financing activities for 2024 was $2,381,000 attributable to the exercise of warrants, and the net cash provided by financing activities for 2023 was $5,898,000 attributable to a private placement resulting in net proceeds of $5,364,000 and warrant exercises resulting in net proceeds of (seeNote 5 - Capital StockandNote 6 - Preferred Stockto our Consolidated Financial Statements).

Current wording

Net cash provided by financing activities for 2025 was $9,043,000, consisting of net proceeds from the 2025 Private Placement and warrant exercises. Net cash provided by financing activities for 2024 was $2,381,000, consisting of net proceeds from warrant exercises (seeNote 5 - Capital StockandNote 6 - Preferred Stockto our Consolidated Financial Statements).

Previous wording

We believe that our existing cash and cash equivalents will be sufficient to fund our operations and meet our working capital requirements into mid-2026. We believe additional capital will be required in the long term to fund operations and provide growth capital, including potential strategic alternatives and investments in technology, product development, and sales and marketing. During the year ended December 31, 2024, the Company received net proceeds of $2,381,000 from the exercise of common and preferred warrants. 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. We have been able to raise capital in the past to maintain liquidity, but 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 expanding 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 on terms acceptable to us, it could have a material adverse effect on the Company.

Previous wording

The Company’s managed videoconferencing services are offered to our customers on either a usage basis or on a subscription basis. Our network services are offered to our customers on a subscription basis. Revenue for these services is generally recognized on a monthly basis as services are performed. Revenue related to professional services is recognized at the time the services are performed. The costs associated with obtaining a customer contract are deferred on our consolidated balance sheet and amortized over the expected life of the customer contract. There was no deferred revenue related to Managed Services as of December 31, 2024, or December 31, 2023. During the year ended December 31, 2023, the Company recorded $1,000 of revenue that was included in deferred revenue as of December 31, 2022.

Current wording

The Company’s managed videoconferencing services are offered to our customers on either a usage- or subscription-based model. Our network services are offered to our customers on a subscription basis. Revenue for these services is generally recognized on a monthly basis as services are performed. Revenue from professional services is recognized when the services are performed. The costs associated with obtaining a customer contract are deferred on our consolidated balance sheet and amortized over the expected life of the customer contract. There was no deferred revenue recorded or recognized to Managed Services as of December 31, 2025, or December 31, 2024.

Previous wording

The Company’s visual collaboration products are composed of hardware and embedded software sold as a complete package and generally include installation and maintenance services. Revenue for hardware and software is recognized upon shipment to the customer. Installation revenue is recognized upon completion of installation, which also triggers the beginning of recognition of revenue for maintenance services, which range from one to three years. Revenue is recognized over time for maintenance services. Licensing agreements are for the Company’s core technology platform, g-speak, and are generally one year in length. Revenue for these services is recognized ratably over the service period. Deferred revenue, as of December 31, 2024, totaled $36,000 as certain performance obligations were not satisfied as of this date. During the year ended December 31, 2024, the Company recorded $132,000 of revenue that was included in deferred revenue as of December 31, 2023. During the year ended December 31, 2023, the Company recorded $435,000 of revenue that was included in deferred revenue as of December 31, 2022.

Current wording

The Company’s visual collaboration products are composed of hardware and embedded software sold as a complete package and generally include installation and maintenance services. Revenue for hardware and software is recognized upon shipment to the customer. Installation revenue is recognized upon completion of the installation, triggering recognition of revenue for maintenance services, ranging from one to three years. Revenue from maintenance services is recognized over time. Deferred revenue, as of December 31, 2025, totaled $13,000 as certain performance obligations were not satisfied as of this date. During the year ended December 31, 2025, the Company recorded $36,000 of revenue that was included in deferred revenue as of December 31, 2024. During the year ended December 31, 2024, the Company recorded $132,000 of revenue that was included in deferred revenue as of December 31, 2023.

Previous wording

Revenue recorded over time for the years ended December 31, 2024, and 2023 was $156,000 and $516,000, respectively. Revenue recorded at a period in time for the years ended December 31, 2024, and 2023 was $2,222,000 and $3,294,000, respectively.

Current wording

Revenue recorded over time for the years ended December 31, 2025, and 2024, was $63,000 and $156,000, respectively. Revenue recorded at a period in time for the years ended December 31, 2025, and 2024, was $2,374,000 and $2,222,000, respectively.