TaoWeave, Inc.

Note1 - Business Description and Significant Accounting Policies

Business Description

TaoWeave, Inc. (“TaoWeave” or “we” or “us” or the “Company”) was formed as a Delaware corporation in* May 2000,and we are a digital asset treasury company dedicated exclusively to Bittensor, a decentralized blockchain network for artificial intelligence ("AI") development and machine learning. The Company is also operating legacy businesses centered around our patented Mezzanine™ product line and our managed services for video collaboration and network solutions. In conjunction with the Company's June 2025financing, the Company began migrating its product focus from Mezzanine™ and managed services to building a digital asset treasury company. Prior to December 11, 2025,*TaoWeave, Inc. was named Oblong, Inc.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of TaoWeave 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.

Segments

The Company currently operates inthree segments: (1) "Digital Assets", which represents the business surrounding our treasury activity with Bittensor, (2) “Collaboration Products”, which represents the business surrounding our Mezzanine™ product offerings, and (3) “Managed Services”, which represents the business surrounding managed services for video collaboration and network solutions. SeeNote9 - Segment Reporting for further discussion.

Use of Estimates

Preparation of the 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* may*differ from the estimates. 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 estimated credit losses and the inputs used to measure the fair value of equity-based awards.

Cash and Cash Equivalents

As of* December 31, 2025,and2024*, our total cash balances were $2,258,000 and $4,965,000, respectively; however, of this balance, $500,000 was held in short-term certificates of deposit with MidFirst Bank in both years. The Company considers highly liquid investments with original maturities ofthree months or less to be cash equivalents.

Digital Assets

In* December 2023,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic350-60): Accounting for and Disclosure of Crypto Assets* ("ASU2023-08"). ASU2023-08 requires in-scope digital assets (including the Company's digital asset holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such digital assets recognized in net income each reporting period. ASU2023-08 also requires certain interim and annual disclosures for crypto assets within its scope. The Company adopted this guidance during the year ended* December 31, 2025*.

-F-6-

The Company's TAO tokens are held withtwo custodians, BitGo Trust Company, Inc. ("BitGo") and Kraken (together the "TAO Custodians"). The TAO Custodians secure the Company's digital assets in regulated, insured, cold storage, and facilitate the Company's acquisitions of TAO. BitGo serves as the Company's principal market for its digital assets. The fair value of digital assets is primarily determined using pricing data from BitGo.

Digital assets are measured at their fair market values using the last close price of the day in the UTC time zone at each reporting period end, as reflected on the balance sheet. The Company's digital assets are presented as current assets. The majority of the Company's digital assets are staked withno lock-up period, and are considered current assets in accordance with ASC210-10-20, Balance Sheet, due to the Company's ability to sell them in a liquid marketplace and with a reasonable expectation that they will be realized in cash during the normal operating cycle of our business to support operations if needed.

Due to the availability of unadjusted quoted prices in active markets, the Company has determined that its digital assets are measured using Level1 input. The unrealized gains and losses resulting from remeasurement of digital assets are recorded in other income on the Consolidated Statement of Operations. The Company recorded an unrealized loss of $3,519,000 for the year ended* December 31, 2025*. As of* December 31, 2025*, the fair value of our digital assets was $5,395,000.

The cost basis of the Company's digital assets is measured at fair value based on the spot price at the time of receipt if obtained through staking rewards, or the purchase price if obtained by cash, consistent with the applicable guidance under ASC350-60. The Company has elected to adopt the First-In, First-Out ("FIFO") method for determining the cost basis of digital assets disposed of. The method assumes that the assets that were acquiredfirst are disposed of first. Realized gains and losses from the disposal of digital assets are included in other income in the Consolidated Statements of Operations. The Company hadno realized gains or losses from the disposal of digital assets for the year ended* December 31, 2025*.

Accounts Receivable and Provision for Estimated Credit Losses

Accounts receivable are customer obligations due under normal trade terms. The Company sells its Managed Services to end-users and its Collaboration Products to both resell partners and end-users. The Company extends credit to its customers based on their creditworthiness and historical data and performs ongoing credit evaluations of their financial condition. The Company maintains an allowance for estimated credit losses on accounts receivable for future expected bad debt resulting from customers' inability or unwillingness to make required payments. We estimate our allowance for estimated credit losses based on relevant information, including historical experience, current economic conditions, and future expectations for specifically identified customer balances. This allowance is adjusted as appropriate to reflect current conditions. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. We donot obtain collateral from our customers to secure accounts receivable.

As of* December 31, 2025*, the Company's accounts receivable balance of $138,000 related to our Managed Services segment. As of* December 31, 2024*, the Company had accounts receivable balances of $161,000 and $25,000 for our Managed Services and Collaboration Products segments, respectively.

The company recorded a recovery of bad debt of $18,000 for our Collaboration Products segment during the year ended* December 31, 2025*, and a bad debt expense of $2,000 for our Collaboration Products segment during the year ended* December 31, 2024*. As of* December 31, 2025*, the Company's analysis resulted inno credit loss reserve remaining on the Consolidated Balance Sheet.

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Inventory

Inventory consists of finished goods for our Mezzanine™ products in our Collaboration Products segment, and is determined using average costs and stated at the lower of cost or net realizable value. The Company periodically performs analyses to identify obsolete or slow-moving inventory. Due to declining sales of our Mezzanine™ products, management has determined that there isno guarantee our inventory on hand will be sold, and as a result, has recorded a full reserve, resulting inzero net inventory as of both* December 31, 2025*, and* December 31, 2024*. The following is a summary of the changes in inventory and the reserve for inventory for the years ended* December 31, 2025*, and2024:

Prepaid Expenses

As of* December 31, 2025,and2024*, consolidated prepaid expenses and other current assets were $424,000 and $118,000, respectively. Of the balances as of* December 31, 2025* i) $168,000 was attributable to our Digital Assets segment and consisted of unamortized stock-based advisor expense; ii) $15,000 was attributable to our Managed Services segment and primarily consisted of licensing fees, iii) $7,000 was attributable to our Collaboration Products segment and primarily consisted of software licenses; and iv) $234,000 was allocated to corporate and attributable to insurance, software licenses, and personnel expenses due to the timing of payroll. The 259% year-over-year increase was primarily due to higher stock-based expense, insurance expense, and the timing of cash outflows for the final payroll of the year. Of the balance as of* December 31, 2024i) $8,000 was attributable to our Managed Services segment primarily consisting of licensing fees, ii) $7,000 was attributable to our Collaboration Products Segment primarily consisting of software licenses, and $103,000 was allocated to Corporate. The following is a summary of our prepaid expense balances as of December 31, 2025*, and2024:

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Fair Value Measurements

The Company considers its cash and cash equivalents, digital assets, accounts receivable, and accounts payable to meet the definition of financial instruments. The carrying amount of cash and cash equivalents, accounts receivable, and accounts payable approximated their fair value due to the short maturities of these instruments. Due to the availability of unadjusted quoted prices in active markets, the Company has determined that its digital assets are measured using Level1 input.

The Company measures fair value as required by Accounting Standards Codification (“ASC”) Topic820“*Fair Value Measurements and Disclosures” (“ASC Topic820”). ASC Topic820* defines fair value, establishes a framework, provides guidance on the methods used to measure fair value, and expands disclosures about fair value measurements. ASC Topic820 clarifies that fair value is an exit price, representing the amount that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined using assumptions that market participants would use to price an asset or liability. As a basis for considering such assumptions, there exists athree-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

This hierarchy requires the Company to use observable market data when available and to minimize the use of unobservable inputs when determining fair value.

Revenue Recognition

The Company accounts for revenue in accordance with ASC Topic606.

The Company recognizes revenue using thefive-step model as prescribed by Topic606:

Digital Assets

The Company had staked $5,395,000 of digital assets as of* December 31, 2025*. The Company’s ability to sell or transfer staked digital assets is subject to restrictions related to unbonding periods, which are based on network traffic on the respective blockchains. As of* December 31, 2025*, all staked digital assets could be unbonded immediately. The $186,000 in rewards generated from proprietary staking activities for the year ended* December 31, 2025*, was recorded as point-in-time revenue. The Company stakes its TAO directly from BitGo and Kraken custody, qualified custodians, enabling yield generation while maintaining the highest standards of security and regulatory compliance. As of* December 31, 2025*, the Company's staked assets have immediate terms, meaning there isno lock-up period upon unstaking.

In exchange for staking the crypto assets on blockchain networks, the Company is entitled to a fractional share of the fixed digital asset award athird-party validator node receives for successfully validating or adding a block to the blockchain. This award is remitted in the validator node's native token and is referred to as a staking reward. The Company’s staking reward received from delegating to athird-party validator node is proportional to the Company's staked digital assets relative to the total staked by all delegators to that node at that time. Token rewards earned from staking are calculated and distributed directly to TaoWeave's digital wallets by the blockchain networks as part of their consensus mechanisms.

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The Company considers the provision of validating blockchain transactions an output of the Company’s ordinary activities, providing a service to the blockchain network, and accounts for the staking rewards under ASC606. Each separate validation under a smart contract with a network represents a performance obligation. The satisfaction of the performance obligation for processing and validating blockchain transactions occurs at a point in time when confirmation is received from the network indicating that the validation is complete, and the awards are available for transfer. At that point, the fair value of the staking reward is recognized and recorded as revenue. Once the Company has acquired the reward, the tokens are added to our digital asset holdings, and their fair value is accounted for in accordance with ASC820.

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, under Topic606, are deferred on our consolidated balance sheets and amortized over the expected life of the customer contract. During the year ended* December 31, 2025*, the Company recorded $1,957,000 as point-in-time revenue. As of* December 31, 2025*, and2024, there wasno deferred revenue related to Managed Services.

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 the commencement of revenue recognition for maintenance services, ranging fromone tothree years. Revenue from maintenance services is recognized over time. During the year ended* December 31, 2025*, the Company recorded $231,000 of point-in-time revenue and $63,000 of over time revenue. Deferred revenue for Collaboration Products, as of* December 31, 2025* and2024, totaled $13,000 and $36,000, respectively, as certain performance obligations werenot 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*.

Consolidated revenue recorded over time for the years ended* December 31, 2025,and2024* was $63,000 and $156,000, respectively. Revenue recorded at a point in time for the years ended* December 31, 2025,and2024* was $2,374,000 and $2,222,000, respectively.

The Company disaggregates its revenue by geographic region. SeeNote9 - Segment Reporting for more information.

Taxes Billed to Customers and Remitted to Taxing Authorities

We recognize taxes billed to customers in revenue and taxes remitted to taxing authorities in our cost of revenue. For the years ended* December 31, 2025,and2024*, we included taxes of $62,000 and $68,000, respectively, in revenue and $70,000 and $74,000, respectively, in cost of revenue.

Concentration of Credit Risk

Financial instruments that* maysubject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. We place our cash needed for operations in commercial checking accounts, and the majority of our cash is held in a money market fund. Commercial bank balances may,from time to time, exceed federal insurance limits. Deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”) in an amount up to$250,000* for any depositor; any deposit in excess of this insured amount could be lost.

Income Taxes

On* July 4, 2025,the U.S.H.R.1, an act to provide for reconciliation pursuant to title II of H. Con. Res.14. (the “OBBBA”) was enacted. The OBBBA introduces multiple tax law and other legislative changes, including modifications to income tax provisions such as existing21%* corporate income tax rate made permanent, domestic research and development expenses, the restoration of100% bonus depreciation, changes to Section163(j) interest limitations, and U.S. taxation of international earnings; the repeal or acceleration of the sunset of certain tax credits under the2022 Inflation Reduction Act and elimination of certain penalties for violations of certain regulatory credit programs. We have recognized the effects of the OBBBA provisions in our financial results to the extent they are applicable to the year ended* December 31, 2025*.

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Stock-based Compensation

Stock-based awards have been accounted for as required by ASC Topic718 “Compensation–* Stock Compensation*” (“ASC Topic718”). Under ASC Topic718, stock-based awards are valued at fair value on the date of grant, and that fair value is recognized over the requisite service period. The Company accounts for forfeitures when they occur. The Company recorded $62,000 in stock compensation for the year ended* December 31, 2024*. As of* December 31, 2025*, there areno stock compensation awards outstanding.See Note7 - Stock-Based Compensation for further details.

Stock-based Expense

In* June 2025,the Company granted warrants to an advisor related to digital assets.**See Note5* - Capital Stock for further information.** The total stock-based cost of these warrants is $335,000, which will be expensed ratably over thetwelve-month original life of the contract and vesting period of the warrants. During the year ended* December 31, 2025*, $169,000 was recorded as stock-based advisory fees in general and administrative expense, as such expense wasnot directly related to staking revenue. As of* December 31, 2025*, $168,000 of expense remains to be recognized through* June 2026.*

Research and Development

Research and development expenses include internal and external costs related to developing new service offerings, features, and enhancements to our existing product offerings.

Treasury Stock

Purchases and sales of treasury stock are recorded under the cost method. Under this method, shares acquired are recorded at the acquisition price directly to the treasury stock account. Upon sale, the treasury stock account is reduced by the original acquisition price of the shares, and any excess is recorded in additional paid-in capital on afirst-in,first-out basis. The Company doesnot recognize a gain or loss to income from the purchase and sale of treasury stock.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

In* December 2023,the FASB issued ASUNo.* 2023‑09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures by requiring additional disaggregation in the effective tax rate reconciliation and disclosures of income taxes paid by jurisdiction. The guidance doesnot change the recognition or measurement of income taxes. The Company adopted ASU2023‑09 effective* January 1, 2025,on a prospective basis. The adoption impacted the Company’s income tax disclosures but didnot* have a material impact 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* December 31, 2025*, we had $2,258,000 in cash and cash equivalents, $5,395,000 in digital assets, and working capital of $7,029,000. 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.

Cash used in investing activities for the year ended* December 31, 2025*, was $8,736,000, consisting of new investments in digital assets. There wasno cash used in investing activities for the year ended* December 31, 2024*.

Net cash provided by financing activities during the year ended* December 31, 2025*, was $9,043,000, consisting of net proceeds from the2025 Private Placement and warrant exercises. Net cash provided by financing activities during the year ended* December 31, 2024*, was $2,381,000, consisting of net proceeds from warrant exercises (seeNote5 - Capital StockandNote6 - Preferred Stockto our Consolidated Financial Statements).

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Future Capital Requirements

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 nexttwelve 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 inone or more debt and/or equity offerings. There can beno 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.

Note3 - Digital Assets

Our Cryptocurrency Asset Strategy

In connection with the Company’s financing in* June**2025,* we adopted a differentiated cryptocurrency treasury strategy focused on TAO, the native cryptocurrency of Bittensor.See Note5 - Capital Stock for further details of the financing. We seek to stake TAO for revenue generation and capital appreciation, a strategy that underscores our mission to create significant value for shareholders. The Company accounts for its digital assets, comprised solely of TAO tokens, as indefinite-lived intangible assets in accordance with ASC350. The Company’s digital assets are initially recorded at cost and measured at fair value at each reporting period. TAO tokens are available as partial tokens. The Company shows its token holdings rounded to the nearestone-hundredth of a token.

The Company has adopted a long-only TAO accumulation policy under which we allocate substantial portions of our excess cash to purchase TAO to maximize tokens per share. As of* December 31, 2025*, approximately 70% of our treasury holdings were invested in TAO, and our current plan is to continue allocating substantial portions of our excess cash to TAO without a formal cap on the percentage of our treasury holdings invested in TAO. We donot currently hedge our TAO exposure and haveno diversification strategy into other crypto assets; we are a long-only TAO holder. The Company’s TAO tokens are stored with the TAO Custodians. There are significant risks associated with digital asset price volatility. We havenot implemented any hedging strategies to date, and there can beno assurance that any such strategies will be implemented or, if implemented, effective.

Although a liquid market for TAO exists, we havenot monetized (i.e., sold) any TAO to date. All TAO is staked as soon as trade settlement permits, and we currently spread staking between the Company’s TAO Custodians.

The following table summarizes the Company's digital asset activity for the year ended* December 31, 2025*, and the fair value is presented as of* December 31, 2025* (in thousands except for tokens):

As holders of TAO tokens, we can stake any amount of the liquidity we hold to a validator. Also known as “delegation”, staking supports validators because their total stake in the subnet, including stake delegated to them by others, determines their consensus power and their share of emissions. After the validator extracts their take, the remaining emissions are credited back to us in proportion to our stake with that validator.

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In exchange for staking TAO on the Bittensor blockchain network, the Company is entitled to a fractional share of the fixed digital asset award athird-party validator node receives for successfully validating or adding a block to the blockchain. This award is remitted in the validator node's native token (TAO) and is referred to as a staking reward. The Company’s staking reward received from delegating to athird-party validator node is proportional to the Company's staked digital assets relative to the total staked by all delegators to that node at that time. TAO token rewards earned from staking are calculated and distributed directly to the Company’s digital wallets by the blockchain networks as part of their consensus mechanisms.

As of* December 31, 2025*, all of our TAO token holdings were staked. All staking services are provided through the Company’s TAO Custodians, enabling yield generation while maintaining the highest standards of security and regulatory compliance. We rely on these custodians to facilitate our TAO token staking activities. Through their staking services, our TAO Custodians hold and stake our TAO through their selected validators. The Bittensor blockchain doesnot impose protocol-enforced delays or unbonding periods. As of* December 31, 2025*, the Company's staked TAO tokens have immediate terms, meaning there isno lock-up period upon the asset being unstaked.

The following table summarizes the Company's Staking Rewards as of* December 31, 2025* (in thousands except for tokens):

Our cost of revenue for digital assets consists of custodian fees and advisor fees on our staked digital assets. For the year ended* December 31, 2025*, the Company recorded a cost of revenue of $24,000 related to digital asset staking, resulting in a gross profit of $162,000, or 87%.

Digital assets are measured at their fair market values using the last close price of the day in the UTC time zone at each reporting period end. The unrealized gains and losses resulting from remeasurement of digital assets are recorded in other income on the Consolidated Statement of Operations. The following table summarizes the Company's digital asset holdings as of* December 31, 2025* (in thousands except for tokens):

The Company recorded an unrealized loss of $3,519,000 for the year ended* December 31, 2025*. As of* December 31, 2025*, the fair value of our digital assets was $5,395,000.

Note4 - Accrued Expenses and Other Current Liabilities

Consolidated accrued expenses and other current liabilities were $1,061,000 and $1,131,000 as of* December 31, 2025,and2024*, respectively, consisting primarily of compensation, taxes and fees, and rent expenses. The 6% year-over-year decrease was primarily due to a decrease in accrued compensation, partially offset by an increase in taxes and fees.

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Our consolidated balances for the years ended* December 31, 2025,and2024* consisted of the following (in thousands):

As of* December 31, 2025,and2024*, our Managed Services segment had accrued expenses and other current liabilities of $5,000 and $18,000, respectively. These expenses consisted primarily of taxes and regulatory fees. The 72% year-over-year decrease was primarily related to a reduction in these taxes and regulatory fees.

As of* December 31, 2025,and2024*, accrued expenses and other current liabilities for our Collaboration Products segment were $269,000 and $252,000, respectively. These amounts primarily consist of rent expenses and customer deposits. The 7% year-over-year increase was driven by higher customer deposits.

Unallocated accrued expenses were $787,000 and $861,000 as of* December 31, 2025,and2024*, respectively. For both2024 and2025, unallocated accrued expenses consisted primarily of compensation expenses, professional service expenses, and corporate franchise taxes. The 9% year-over-year decrease is primarily related to a decrease in compensation expenses, partially offset by an increase in corporate franchise tax.

Note5 - Capital Stock

Common Stock

The Company’s Common Stock is listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “TWAV.” As of* December 31, 2025*, we had 150,000,000 shares of our Common Stock authorized, with 3,327,399 and 3,327,210 shares issued and outstanding, respectively.

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.

During the year ended* December 31, 2025*,521,725 shares of the Company’s Common Stock were issued related to the exercise of 521,725 Common Warrants. During the year ended* December 31, 2024*,282,314 shares of the Company's Common Stock were issued related to the exercise of 282,314 Common Warrants. See discussion of Common Warrants below for further details.

During the year ended* December 31, 2025*,1,403,131 shares of the Company's Common Stock were issued related to the exercise of 1,403,131 Pre-Funded Warrants. See discussion of2025 Private Placement and Pre-Funded Warrants below for further details.

During the year ended* December 31, 2025*,257,617 shares of the Company's Common Stock were issued related to the conversion of 970 shares of Series F Preferred Stock, plus accrued dividends of approximately $39,000. During the year ended* December 31, 2024*,288,968 shares of the Company’s Common Stock were issued related to the conversion of 3,033 shares of Series F Preferred Stock, plus accrued dividends of approximately $191,000.See Note6 - Preferred Stock for further details.

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Common Stock activity for the years ended* December 31, 2025,and2024* is presented below.

Common Stock Warrants and2023 Placement Agent 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*“2023* 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 toNote6 - Preferred Stock**** **for further discussion on the Series F Preferred Stock and Preferred Warrants.

In connection with the2023 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 the2023 Private Placement, and (ii) grant to the Placement Agent warrants (the*“2023* 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 available 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, recapitalization, 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 Note6 - Preferred Stock for additional detail 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.

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Pursuant to Sections2(a) and2(c) of the Common Warrants (the "Make-whole Provision"), as a result of the1-for-40 reverse stock split effected on* August 23, 2024 (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 may*be 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 2023 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 will reduce the net income available to common shareholders. Details of the Make-whole Provision transactions are presented below:

(1) Original exercise price based on the March 30, 2023 Purchase Agreement.

(2) Adjusted by the Reverse Split.

(3) Based on the original aggregate exercise price divided by the Make Whole Provision exercise price.

(4) Calculated by dividing (x) the sum of the dollar volume-weighted average price of the Company's Common Stock for each of the five lowest trading days during the sixteen trading days after the Reverse Split by (y) five.

During the year ended* December 31, 2025*,152,519 Common Warrants were issued in accordance with the exercise provisions of the Preferred Warrants.See Note6 - Preferred Stock for additional detail on the exercises of the Preferred Warrants. These Common Warrants are exercisable at an exercise price of $3.41 and have a term offive years.

During the year ended* December 31, 2025*,521,725 Common Warrants were exercised at a price of $3.41 per share for shares of Common Stock, and the Company received gross and net proceeds of $1,781,000 and $1,639,000, respectively. During the year ended* December 31, 2024*,282,314 Common Warrants were exercised at a price of $3.41 per share for shares of Common Stock, and the Company received gross and net proceeds of $964,000 and $887,000, respectively.

As of* December 31, 2025*,1,749,527 Common Warrants remained outstanding.

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 2023,and pursuant to our2023* Engagement Letter, Dawson James acted as placement agent in connection with our* March 30, 2023Purchase Agreement. During the year ended December 31, 2025*, pursuant to the terms of the2023 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 fees were $142,000. During the year ended* December 31, 2024*, we paid Dawson James a cash fee of $77,000. Mr. Schechter didnot receive any of the fees paid.

2025 Private Placement and Pre-Funded Warrants

On* June 6, 2025,we entered into a securities purchase agreement, dated as of June 5, 2025 (the“2025* Securities Purchase Agreement”), with certain accredited investors (the “Investors”), pursuant to which we issued and sold, in a private placement (the*“2025* Private Placement”), pre-funded warrants to acquire up to 1,989,392 shares of our Common Stock (the “Pre-Funded Warrants") in exchange for gross proceeds of approximately $7.5 million. Net proceeds to the Company were approximately $6,888,000, after deducting placement agent fees of $375,000 and other offering expenses of $237,000 payable by the Company.

During the year ended* December 31, 2025*,1,403,131 Pre-Funded Warrants were exercised, and as of* December 31, 2025*,586,261 Pre-Funded Warrants remained outstanding. Nominal proceeds were received by the Company upon exercise of the Pre-Funded Warrants.

-F-16-

The exercise price upon exercise of each Pre-Funded Warrant is $0.0001 per share of Common Stock, with an aggregate exercise price of $3.77 per share of Common Stock, of which $3.7699 per share of Common Stock was paid by the holders at the closing on* June 10, 2025.The exercise price of the Pre-Funded Warrants is subject to appropriate adjustment in the event of stock dividends, subdivisions, stock splits, stock combinations, cash distributions, reclassifications, exchanges, combinations, or substitutions affecting our Common Stock. In lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holders of Pre-Funded Warrants may*elect instead to receive upon such exercise the net number of shares of Common Stock determined according to a formula set forth in the Pre-Funded Warrants.

The Pre-Funded Warrants are exercisable immediately upon issuance, subject to the conditions and limitations on exercise set forth in each Pre-Funded Warrant. A holder of the Pre-Funded Warrants* may**not* exercise any portion of such holder’s Pre-Funded Warrants to the extent that the holder, together with its affiliates, would beneficially own more than 4.99% (or, at the election of the holder,9.99%) of the Company’s outstanding shares of Common Stock immediately after exercise, except that upon at least61 days’ prior notice from the holder to the Company, the holder* may*increase the beneficial ownership limitation to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise.

Pursuant to the2025 Private Placement, the Company agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the shares of Common Stock underlying the Pre-Funded Warrantsno later than15 days after the date of the Purchase Agreement, and to use commercially reasonable efforts to have the registration statement declared effective within60 days following the date of the Purchase Agreement (or90 days following the date of the Purchase Agreement in the event of a “full review” by the SEC). The Company filed the registration statement on* June 20, 2025,and it was declared effective on August 1, 2025.*

The2025 Private Placement is exempt from the registration requirements of the Securities Act of1933, as amended (the “Securities Act”) pursuant to the exemption for transactions by an issuernot involving any public offering under Section4(a)(2) of the Securities Act and Rule506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. Each of the Investors has represented to the Company that it is an accredited investor within the meaning of Rule501(a) of Regulation D and that it is acquiring the securities for investment only andnot with a view towards, or for resale in connection with, the public sale or distribution thereof. The Pre-Funded Warrants are being offered without any general solicitation by the Company or its representatives.

Subject to applicable laws and the restriction on transfer set forth in the Pre-Funded Warrants, the Pre-Funded Warrants* maybe transferred. Upon the consummation of a fundamental transaction (as described in the Pre-Funded Warrants, and generally including any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our assets, our consolidation or merger with or into another person in which we arenot* the surviving entity, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power of our outstanding common stock), a holder of the Pre-Funded Warrants will be entitled to receive, upon exercise of the Pre-Funded Warrants, the same kind and amount of securities, cash or other property that such holder would have received had they exercised the Pre-Funded Warrants immediately prior to such fundamental transaction, without regard to any limitations on exercise contained in the Pre-Funded Warrants. Except for the right to participate in certain dividends and distributions and as otherwise provided in the Pre-Funded Warrants or by virtue of a holder’s ownership of our Common Stock, the holders of the Pre-Funded Warrants donot have the rights or privileges of holders of our Common Stock, including any voting rights, until they exercise their Pre-Funded Warrants.No term of the Pre-Funded Warrants* may*be amended or waived without the written consent of the holder of such Pre-Funded Warrants.

2025 Placement Agent Warrants

Dawson James again served as the Company’s exclusive Placement Agent in connection with the2025 Private Placement, pursuant to that engagement letter, dated as of* June 4, 2025,as amended, between the Company and Placement Agent (the“2025* Engagement Letter”). Pursuant to the2025 Engagement Letter, the Company paid the Placement Agent (i) a total cash fee equal to 5% of the aggregate gross proceeds raised in the2025 Private Placement and (ii) up to $50,000 for fees and expenses of legal counsel and other out-of-pocket expenses. In addition, the Company issued to the Placement Agent or its designees warrants (the*“2025* Placement Agent Warrants”) to purchase up to an aggregate of 99,470 shares of Common Stock. The Placement Agent Warrants are exercisable immediately upon issuance. The terms of the Placement Agent Warrants are substantially the same as those of the Pre-Funded Warrants, except that the Placement Agent Warrants will expire on* June 10, 2030,are initially exercisable at a price of $4.71 per share of Common Stock, mayonly be exercised a cashless basis if there isno* effective registration statement registering the underlying shares, and in the event of a Fundamental Transaction as defined in the Placement Agent Warrants, warrant holders* mayrequire the company to purchase the remaining unexercised portion of a Placement Agent Warrant for an amount equal to the Black-Scholes Value of that portion, as of the date of the Fundamental Transaction, unless the Fundamental Transaction isnot* within the Company’s control, as described in the Placement Agent Warrants. There isno established public trading market for the Placement Agent Warrants, and we donot intend to list the Placement Agent Warrants on any national securities exchange or nationally recognized trading system.

-F-17-

The2025 Placement Agent Warrants were issued on* June 10, 2025,and as of December 31, 2025*, no 2025 Placement Agent Warrants have been exercised.

As discussed above,one of our directors is currently a partner at SEG, a division of Dawson James. During the year ended* December 31, 2025*, pursuant to the terms of the2025 Placement Agent Agreement, we paid Dawson James a cash fee equal to $375,000 (or 5% of the aggregate gross proceeds raised from the2025 Private Placement) and $50,000 in fees and expenses. Mr. Schechter didnot receive any of the fees paid, nor were any of the2025 Placement Agent Warrants issued to him.

Advisor Warrants

On* June 5, 2025,the Company issued warrants to acquire up to 100,000 shares of our Common Stock (the "Advisor Warrants") to Brandon Sofer, our advisory agent (in such capacity, the "Advisory Agent"), in connection with the Advisory Agent's provision of certain treasury advisory services. The terms of the Advisor Warrants are identical to those of the Placement Agent Warrants, except that the Advisor Warrants will expire on June 5, 2028,are initially exercisable in part beginning on July 7, 2025at a price of $3.77 per share of Common Stock, and will vest in equal installments at a rate of1/12th* (8.33%) per month, beginning on thethirty day anniversary of the issue date, fortwelve month.

As of* December 31, 2025*,50,000 of the Advisor Warrants had vested andno Advisor Warrants had been exercised.

Outstanding warrants for the Company's Common Stock, as of* December 31, 2025*, are as follows:

(1) The aggregate exercise price for the Pre-Funded Warrants is $3.77, of which $3.7699 was paid upon issuance of the warrants and $0.0001 payable upon exercise of the warrant. The exercise of these warrants willnot result in material proceeds for the Company.

Warrant activity for the years ended* December 31, 2025,and2024* is presented below:

Treasury Shares

The Company maintains Treasury Stock for the Common Stock shares it buys when it withholds shares to cover taxes on stock compensation transactions. There wereno treasury stock transactions during the years ended* December 31, 2025,and2024*, and the treasury shares outstanding were 189 as of* December 31, 2025,and2024*.

-F-18-

Note6 - Preferred Stock

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. As of* December 31, 2025,and2024*, we had 1,983,250 designated shares of preferred stock and 150 and 545 shares of preferred stock issued and outstanding, respectively.

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 TaoWeave, Inc. (the “Certificate of Designations”), which was filed and became effective with the Secretary of State of the State of Delaware on* March31,* 2023. The2023 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 under the Purchase Agreement totaled $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 $3.77. 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 $3.77 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations, and similar events).

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.

-F-19-

During the years ended* December 31, 2025,and2024*,970 and 3,033 shares of Series F Preferred Stock, respectively, plus accrued dividends, were converted to 257,617 and 288,968 shares of the Company’s common stock, respectively. There were 150 and 545 shares of Series F Preferred Stock outstanding, respectively, and accrued dividends of $22,000 and $29,000 as of* December 31, 2025,and2024*, respectively. 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 recapitalization, 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 the year ended* December 31, 2025*,575 Preferred Warrants were exercised at a price of $975 per share. The Company received gross and net proceeds of $561,000 and $516,000, respectively. During the year ended* December 31, 2024*,1,648 Preferred Warrants were exercised at a price of $975 per share. The Company received gross and net proceeds of $1,607,000 and $1,478,000, respectively. As of* December 31, 2025*,30,527 Preferred Warrants remained outstanding.

As discussed inNote5 - Capital Stock,one of our directors is currently a partner at The Special Equities Group ("SEG"), a division of Dawson James Securities, Inc. During the year ended* December 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 575 Preferred Stock Warrants. The fee was $45,000. During the year ended* December 31, 2024*, we paid the Placement Agent a cash fee of $129,000 for the exercise of the 1,648 Preferred Stock Warrants. Mr. Schechter didnot receive any of the fees paid.

-F-20-

Note7 - Stock-Based Compensation

Amended and Restated2019 Equity Incentive Plan

On* December**19,* 2019, the TaoWeave, Inc.2019 Equity Incentive Plan (the*“2019* Plan”) was approved by the Company’s stockholders at the Company’s2019 Annual Meeting of Stockholders. The2019 Plan is an omnibus equity incentive plan pursuant to which the Company* maygrant equity and cash incentive awards to certain key service providers of the Company and its subsidiaries. As of December 31, 2024*, there wereno remaining shares in the share pool available for new grants under the2019 Plan. On* December 17, 2025,at the Company's Annual Meeting of Stockholders, an amendment to the2019* Plan was approved to i) increase the number of shares available for grant of awards by 2,000,000 shares, subject to adjustment for certain changes in our capitalization, and ii) beginning on* January 1, 2026,incorporate an annual increase of shares available under the2019* plan, equal to 5% of the total shares of our common stock outstanding on the last day of the immediately preceding calendar year (the "Evergreen Provision"). As of* December 31, 2025*, there were 2,000,000 shares in the share pool available for new grants. On* January 1, 2026,*pursuant to the Evergreen Provision, this amount increased to 2,166,360 shares.

During the year ended* December 31, 2024*, no stock options were granted,84 stock options vested, and 250 vested stock options expired. As of* December 31, 2024*, no stock options were outstanding. There wasno stock option activity during the year ended* December 31, 2025*.

Stock compensation expense recorded for the year ended* December 31, 2024*, was $62,000. This compensation was all related to stock options and was recorded in general and administrative expense on the Consolidated Statement of Operations. As of* December 31, 2024*, and2025, no unamortized stock-based compensation remains.

Note8 - 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 shares of common stock. Vested RSUs (for which shares of common stock havenot yet been delivered) are included in the calculations of basic net loss per share.

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including warrants, stock options, RSUs, and unvested restricted stock awards, to the extent they are dilutive. For the years ended* December 31, 2025* and2024,all such common stock equivalents have been excluded from diluted net loss per share as the effect on net loss per share would be anti-dilutive (due to the net losses).

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

-F-21-

The following table represents the potential shares that were excluded from the computation of the 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:

Note9 - Segment Reporting

The Company currently operates inthree 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.

For each of the years ended* December 31, 2025,and2024*, the CODM forthree andtwo segments, respectively, was Pete Holst, the Company's President and Chief Executive Officer. Management reviewed the information provided to the CODM and updated the presentation of that information, including Significant Segment Expenses ("SSEs").

-F-22-

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

-F-23-

The Company's SSEs for our Digital Assets segment include cash and non-cash transaction fees, cash and stock-based advisory expenses, and unrealized losses on revaluation. The Company’s SSEs for our Managed Services and Collaboration Products segments include direct labor costs and segment-based management expenses (collectively, “labor and labor-related”), circuit and network cost of revenue, other non-inventory cost of revenue, research and development costs, and bad debt (recovery) expense. 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 labor and supply costs, to assess segment performance.

-F-24-

For the years ended* December 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 its consolidated revenues or accounts receivable. Losing or reducing sales or anticipated sales to our most significant customer or several of our smaller customers could have a material adverse effect on our business, financial condition, and results of operations.

-F-25-

Concentration of consolidated revenues was as follows:

Concentration of consolidated accounts receivable was as follows:

Note10 - Commitments and Contingencies

From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including those covered by insurance. As of the date hereof, we arenot a 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.

Note11 - Income Taxes

In* December 2023,the FASB issued ASUNo.* 2023‑09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which enhances the transparency of income tax disclosures by requiring additional disaggregation in the effective tax rate reconciliation and disclosures of income taxes paid by jurisdiction. The guidance doesnot change the recognition or measurement of income taxes. The Company adopted ASU2023‑09 effective* January 1, 2025,on a prospective basis. The adoption impacted the Company’s income tax disclosures but didnot* have a material impact on its consolidated financial statements

The following table sets forth pretax book loss (in thousands):

-F-26-

The following table sets forth income before taxes and the income tax expense for the years ended* December 31, 2025,and2024* (in thousands):

Upon adoption of ASU2023-09, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended* December 31, 2025*, was as follows (in thousands, except for percentages):

The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended* December 31, 2024*, in accordance with the guidance prior to the adoption of ASU2023-0, was as follows (in thousands):

Upon adoption of ASU2023-09, cash paid for income taxes, net of refunds, during the year ended* December 31, 2025*, was as follows (in thousands):

-F-27-

The tax effect of the temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of* December 31, 2025,and2024* is presented below (in thousands):

The ending balances of the deferred tax asset have been fully reserved, reflecting uncertainties regarding the realizability, as evidenced by the Company’s historical results. The change in the valuation allowance for the year ended* December 31, 2025*, is an increase of $1,356,000. The change in the valuation allowance for the year ended* December 31, 2024*, was a decrease of $1,026,000.

We and our subsidiary file federal and state tax returns on a consolidated basis. On* October 1, 2019,TaoWeave, Inc. (fka Oblong, Inc.) acquired the stock of Oblong Industries Inc., resulting in Oblong Industries Inc.'s shareholders owning75%* of TaoWeave, Inc. Therefore, an “ownership change” occurred on this date (as defined under Section382 of the Internal Revenue Code of1986, as amended), which places an annual limitation on the utilization of the net operating loss (“NOL”) carryforwards accumulated before the ownership change. If additional ownership changes have occured or do occur in the future, the use of NOL carryforwards and research and development credits could be subject to further limitation. As a result of this annual limitation and the limited carryforward life of the accumulated NOLs, we determined the2019 ownership change resulted in a permanent loss of approximately $30,880,000 of federal NOL carryforwards. State NOL carryforwards were limited in a similar fashion. The Company hasnot conducted a study subsequent to the2019 one to determine if any such additional changes have occurred that could limit the Company's ability to use net operating losses and tax credit carryforwards.

The Company had federal net operating loss carryforwards of $146,673,000 as of* December 31, 2025*. Of this amount, $75,138,000 will expire in various amounts from2026 through2037. As of* December 31, 2025*, the Company also has various state net operating loss carryforwards of an estimated $107,065,000. The determination of the state net operating loss carryforwards is dependent upon apportionment percentages and state laws that can change, from year to year and impact the amount of such carryforwards. The Company has Research and Development credits carryforward of $2,154,000 at* December 31, 2025*. The Research and Development credits begin to expire in2026.

There wereno significant matters determined to be unrecognized tax benefits taken or expected to be taken in a tax return, in accordance with ASC Topic740 “Income Taxes” (“ASC740”), which clarifies the accounting for uncertainty in income taxes recognized in the financial statements, that have been recorded on the Company’s Consolidated Financial Statements for the years ended* December 31, 2025,and2024*. The Company doesnot anticipate any material change to its unrecognized tax benefits in the nexttwelve months.

-F-28-

Additionally, ASC740 provides guidance on the recognition of interest and penalties related to unrecognized tax benefits. There wereno interest or penalties related to income taxes that have been accrued or recognized as of and for the years ended* December 31, 2025,and2024*.

The Internal Revenue Service* maygenerally assess additional income tax for the lastthree* years. This would generally prevent the Service from opening an examination for years ended on or before* December 31, 2022.However, there are exceptions that can extend the statute of limitations tosix* years and, in some cases, prevent it from ever expiring.

Note12 -401(k) Plan

We have adopted a Section401(k) retirement plan under the Internal Revenue Code. The401(k) plan covers substantially all employees who meet minimum age and service requirements. Company contributions to the401(k) plan for the years ended* December 31, 2025,and2024* were $37,000 and $58,000, respectively.

-F-29-