TaoWeave, Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001437749-25-034612
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001437749-26-017382
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 80 current paragraphs.
17 unchanged; 15 reworded; 47 added; 31 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 21 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (47)
Current report
Unless the context otherwise indicates, as used in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the terms “we,” “us,” “our,” “TaoWeave, Inc,” the “Company,” and similar terms refer to TaoWeave, Inc and its subsidiaries. This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (this “Report”). The matters discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contain certain forward-looking statements that reflect the Company’s current expectations, the actual outcomes of which involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Current report
Critical Accounting Estimates
Current report
The preparation of the unaudited condensed consolidated financial statements requires us to make assumptions, estimates, and judgments that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Certain of our more critical accounting policies require management to exercise significant judgment in selecting appropriate assumptions when calculating financial estimates. By their nature, these judgments are subject to a degree of inherent uncertainty. On an ongoing basis, we evaluate our judgments, including but not limited to those related to income taxes, litigation, and contingencies. We use historical experience and other assumptions as the basis for our judgments and estimates. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in those estimates will be reflected in our consolidated financial statements as they occur.
Current report
Our critical accounting estimates have not changed materially from those described in Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 20, 2026.
Current report
We are a public company focused on the Bittensor ecosystem, a decentralized, open-source protocol that coordinates the development and deployment of artificial intelligence (“AI”) models. Our principal asset is TAO, Bittensor’s native cryptocurrency, which we accumulate and stake on the Bittensor network to generate yield in the form of additional TAO tokens. Our goal is to provide public-market investors with economic exposure to the Bittensor ecosystem. As of March 31, 2026, we held approximately 23,557 TAO tokens valued at $7.2 million, with BitGo Trust Company, Inc. (“BitGo”) and the Kraken exchange (“Kraken”, and together with BitGo, the “TAO Custodians”). All of our TAO is staked through our TAO Custodians. As of the filing of this report, we have increased our TAO token holdings to approximately 25,600.
Current report
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 2025 financing, the Company began migrating its product focus from Mezzanine™ and managed services to building a digital asset treasury company.
Current report
Our Cryptocurrency Asset Strategy
Current report
Our current primary activity is accumulating and staking TAO, and we allocate substantial portions of our available cash to purchase TAO with the goal of maximizing TAO holdings per outstanding common share. As of March 31, 2026, and December 31, 2025, approximately 72% and 66% of our total assets (including cash) were held in TAO, respectively. We intend to continue allocating substantial portions of our excess cash to TAO without a formal cap on the percentage of assets invested. While our strategy is to accumulate and hold TAO over the long term, we may, from time to time, sell a portion of our TAO holdings to fund operating expenses or otherwise manage the Company's cash and liquidity position. During the three months ended March 31, 2026, we sold 1,457 TAO tokens for this purpose. SeeNote 3 - Digital Assets for further details.
Current report
We do not hedge our TAO exposure and do not hold any other digital assets. All TAO is staked as soon as trade settlement permits, and we currently spread staking across both of our TAO Custodians. There are significant risks associated with our concentrated, unhedged position in a single digital asset. We have not implemented any hedging strategies to date, and there can be no assurance that any such strategies will be implemented or, if implemented, effective. See “Item 1A. Risk Factors.” We stake substantially all of our TAO through our TAO Custodians, who delegate our tokens to validators on the Bittensor network. In exchange for our staked TAO supporting a validator’s operations, we receive a proportional share of the TAO rewards earned by that validator, net of the validator’s commission (commonly referred to as the validator’s “take”). Rewards are calculated and distributed directly to our digital wallets by the network as part of its consensus mechanism.
Current report
We have also been evaluating opportunities to participate more directly in the Bittensor network, including potential investments in or partnerships with teams operating subnets on the platform. During 2025, and through the date of this Report, we conducted due diligence on a number of subnet projects to assess their viability, technology, and potential alignment with our strategy. As of the date of this Report, we have not entered into any binding commitments with respect to subnet investments or partnerships, and no assurance can be given that any such opportunities will be pursued or, if pursued, will be completed on terms favorable to the Company or at all.
Current report
Results of Operations
Current report
Digital Assets revenue was $86,000 for the 2026 First Quarter. The Company did not have Digital Assets operations during the 2025 First Quarter, as the Company began its digital asset treasury strategy in June 2025. The revenue was entirely comprised of TAO staking rewards.
Current report
Managed Services revenue was $422,000 and $508,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, a decrease of $86,000, or 17%. The decrease was primarily attributable to the following:
Current report
Collaboration Products revenue was $199,000 and $114,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, an increase of $86,000, or 75%.
Current report
The Managed Services segment recorded a cost of revenue of 223,000 and $371,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, a decrease of $148,000, or 40%. The Managed Services segment recorded a gross profit percentage of 47% and 27% for the 2026 First Quarter and the 2025 First Quarter, respectively. The increase in gross margin was primarily due to reduced personnel expenses for the 2026 First Quarter.
Current report
The Collaboration Products segment recorded a cost of revenue of $8,000 and $2,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, an increase of $6,000. The Collaboration Products segment recorded a gross profit percentage of 96% and 98% for the 2026 First Quarter and the 2025 First Quarter, respectively. The decrease in gross margin is mainly attributable to a bad debt recovery during the 2025 First Quarter.
Current report
*Other Income, Net.*Other income, net, was $2,256,000 and $26,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, an increase of $2,230,000. The increase was primarily driven by $2,250,000 of unrealized gains and $52,000 of realized gains on the Company’s digital assets during the 2026 First Quarter. Other income for the 2025 First Quarter was primarily comprised of $27,000 in interest income related to the Company’s cash accounts.
Current report
*Loss from Operations.*The Company recorded an operating loss of $559,000 and $691,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, a decrease in operating loss of $132,000, or 19%. The improvement was mainly attributable to an increase in gross profit of $221,000, partially offset by an increase in total operating expenses of $89,000.
Current report
Investing activities provided $522,000 of net cash for the three months ended March 31, 2026, consisting of proceeds from the sale of digital assets. While our long-term strategy is to accumulate and hold TAO, we expect to continue to sell portions of our TAO holdings from time to time to fund operating expenses and manage our cash and liquidity position. The amount and timing of future sales will depend on our operating cash needs, prevailing TAO market prices, and our assessment of market liquidity conditions at the time. However, our ability to convert TAO to cash in practice depends on available market liquidity on the exchanges where TAO trades, and we have not entered into any committed credit facilities or other arrangements that would provide liquidity independent of our digital asset holdings. TAO prices are highly volatile and could decline significantly from current levels, which would reduce the fair value of our holdings and potentially impair our ability to fund operations through digital asset sales without depleting our token position at unfavorable prices
Current report
Long-Term Capital Needs
Current report
Outstanding warrants to purchase shares of the Company's Common Stock, as of March 31, 2026, are presented below.
Current report
Common Stock Warrants and 2023 Placement Agent Warrants
Current report
On March 30, 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.
Current report
In connection with the 2023 Private Placement, pursuant to an engagement letter dated March 30, 2023 (the "Engagement Letter"), between the Company and Dawson James Securities, Inc. (the “Placement Agent”), the Company agreed to (i) pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds raised in the 2023 Private Placement, and (ii) grant to the Placement Agent warrants (the “2023 Placement Agent Warrants”) to purchase 7,663 shares of Common Stock.
Current report
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 of 5 years, commencing six months and one day from the date of issuance, and are currently exercisable for $3.41 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 is no 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.
Current report
During the years ended December 31, 2024 and 2025, 24,104 and 152,519 additional Common Warrants were issued, respectively, in accordance with the exercise provisions of the Preferred Warrants. These Common Warrants are exercisable at an exercise price of $3.41 and have a term of five years.
Current report
2025 Private Placement and Pre-Funded Warrants
Current report
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.
Current report
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.
Current report
The Pre-Funded Warrants were 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 least 61 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.
Current report
2025 Placement Agent Warrants
Current report
Dawson James again served as the Company’s exclusive Placement Agent in connection with the 2025 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 the 2025 Engagement Letter, the Company paid the Placement Agent (i) a total cash fee equal to 5% of the aggregate gross proceeds raised in the 2025 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, may only be exercised a cashless basis if there is no effective registration statement registering the underlying shares, and in the event of a Fundamental Transaction as defined in the Placement Agent Warrants, warrant holders may require 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 is not within the Company’s control, as described in the Placement Agent Warrants. There is no established public trading market for the Placement Agent Warrants, and we do not intend to list the Placement Agent Warrants on any national securities exchange or nationally recognized trading system.
Current report
Advisor Warrants
Current report
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, 2025 at a price of $3.77 per share of Common Stock, and will vest in equal installments at a rate of 1/12th (8.33%) per month, beginning on the thirty day anniversary of the issue date, for twelve month.
Current report
Series F Preferred Stock Obligations
Current report
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 March 31, 2023. The 2023 Private Placement closed on March 31, 2023.
Current report
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 a current conversion price of $3.77 (the “Conversion Price”). The holders of the Series F Preferred Shares may also 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 the five lowest Closing Bid Prices (as defined in the Certificate of Designations) for trading days in the 30 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).
Current report
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 may be paid, at our option, in cash, and if not 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 have no 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.
Current report
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.
Current report
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 entered into concurrently with the 2023 Purchase 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, is not appointed within thirty (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.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Removed paragraphs (31)
Previous report
Oblong is building a robust cryptocurrency treasury focused on decentralized artificial intelligence ("AI") and the acquisition of $TAO, the native cryptocurrency of Bittensor, a decentralized blockchain network for machine learning and AI. The Company also provides innovative video collaboration and network solutions, centered around our patented Mezzanine™ product line and managed services.
Previous report
Staking Rewards on Digital Assets
Previous report
In exchange for staking digital assets on blockchain networks, the Company is entitled to a fractional share of the fixed digital asset award a third-party validator node receives for successfully validating or adding a block to the blockchain. This award is remitted in the native token of the validator node and is referred to as a staking reward. The Company’s staking reward received from delegating to a third-party validator node is proportionate to the digital assets staked by the Company compared to the total digital assets staked by all delegators to that node at that time. Token rewards earned from staking are calculated and distributed directly to Oblong's digital wallets by the blockchain networks as part of their consensus mechanisms.
Previous report
Strategy
Previous report
During the last several years, the Company has faced declining revenues for both our Mezzanine product offering and our Managed Services. These setbacks prompted us to undertake a comprehensive review of our strategic direction with the aim of enhancing shareholder value through various means.
Previous report
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 report
Oblong envisions a dynamic integration into the Bittensor ecosystem, embracing its decentralized AI network to build a thriving and sustainable future. By staking $TAO tokens within Bittensor’s framework, the Company seeks to create a robust foundation that could fuel long-term growth and engagement, focusing on internal initiatives and collaborative partnerships to amplify its impact in the decentralized AI landscape. The Company is also exploring partnerships within the Bittensor ecosystem to potentially develop technology offerings, further aligning its operational and treasury strategies.
Previous report
The Company aims to act as a central catalyst, uniting community engagement, user empowerment, and technical expertise within subnets. It seeks to foster collaboration through vibrant spaces for knowledge-sharing, equip users with intuitive tools to seamlessly explore the ecosystem, and contribute operational insights to enhance decentralized AI. By harmonizing these efforts, Oblong hopes to spark innovation, deepen connections across Bittensor’s network, and become a tangible contributor in shaping the future of decentralized intelligence, creating an inclusive environment where creativity and participation thrive.
Previous report
Oblong’s Results of Operations
Previous report
Segment Reporting
Previous report
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 report
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 report
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 report
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 report
*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 report
*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 report
Oblong’s Results of Operations
Previous report
Nine Months Ended September 30, 2025,compared to the Nine Months Ended September 30, 2024
Previous report
Segment Reporting
Previous report
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 report
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 report
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 report
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 report
Our digital assets recorded a gross profit as a percentage of revenue of 91% for the nine months ended September 30, 2025. Our cost of revenue for digital assets is made up of asset fees charged by the custodian and advisor fees on our staked digital assets.
Previous report
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 report
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 report
*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 report
*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 report
Critical Accounting Policies
Previous report
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 report
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.
Reworded paragraphs (15)
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 business surrounding managed services for network solutions and video collaboration. The Company has included its digital asset operations in its non-segmented corporate activities.
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 (see further description of Mezzanine™ in Part I, Item 1). 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 interaction 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
Historically, customers have used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces. Sales of our Mezzanine™ product have been adversely affected during the last several years by the commercial response to the COVID-19 pandemic and its aftermath. Like many technology companies in recent months, we will continue to monitor and manage our costs relative to demand with the goal of growing the Company’s revenue in the future. We are not currently investing in research and development or sales and marketing for our Mezzanine™ product. To the extent we believe new investments in these areas are warranted as a result of changes in market demand, we believe additional capital will be required to fund those efforts and our ongoing operations.
Current wording
Historically, customers have used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces. Sales of our Mezzanine™ product have been adversely affected during the last several years by the commercial response to the COVID-19 pandemic and its aftermath. We have not invested in research and development or sales and marketing for our Mezzanine™ product in recent years. Given the declines in sales, we announced the end of life for Mezzanine™ in December 2025, and we expect no product revenue from Mezzanine™ products and only minor maintenance revenue for the remainder of 2026.
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 purchasing and reselling 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 adoption of video collaboration throughout 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.
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
Three Months Ended September 30, 2025 (the*** “2025 Third Quarter”), compared to the Three Months Ended September 30, 2024*** (the**“2024 Third Quarter”)
Current wording
Three Months Ended March 31, 2026 (the*** “2026 First Quarter”), compared to the Three Months Ended March 31, 2025*** (the**“2025 First Quarter”)
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 Third Quarter and the 2024 Third 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 2026 First Quarter and the 2025 First Quarter (in thousands):
Previous 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.
Current wording
*Revenue.*Total revenue was $707,000 and $622,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, an increase of $85,000 or 14%. The increase was driven by $86,000 of Digital Asset staking revenue, a new revenue stream that commenced in the second half of fiscal year 2025 and an increase of $85,000 in Collaboration Products Revenue. This increase was partially offset by a decrease of $86,000 in Managed Services Revenue. 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
*Cost of Revenue.*Cost of revenue includes all internal and external costs related to the delivery of revenue. Cost of revenue also includes taxes, which have been billed to customers. Cost of revenue by segment is presented in the following table (in thousands):
Current wording
*Cost of Revenue.*Total cost of revenue was $237,000 and $373,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, a decrease of $136,000, or 36%. Cost of revenue includes all internal and external costs related to the delivery of revenue, including taxes billed to customers. Cost of revenue by segment is presented in the following table (in thousands):
Previous wording
Our digital assets recorded a gross profit as a percentage of revenue of 92% for the 2025 Third Quarter. Our cost of revenue for digital assets is made up of asset fees charged by the custodian and advisor fees on our staked digital assets.
Current wording
The Digital Assets segment recorded a cost of revenue of $6,000 and a gross profit of $80,000, or 93%, for the 2026 First Quarter. The Company did not have Digital Assets operations during the 2025 First Quarter. Cost of revenue for digital assets consists of custodian fees and advisor fees on the Company’s staked digital assets.
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 Third Quarter compared to the 2024 Third 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 were $3,000 for the 2025 First Quarter, and there were no research and development expenses for the 2025 First Quarter. Research and development expenses include internal and external costs related to developing features and enhancements to existing product offerings. The 100% decrease is primarily attributable to the Company’s change in focus to digital asset treasury.
Previous 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.
Current wording
Sales and Marketing Expenses. Sales and marketing expenses were $7,000 and $8,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, a decrease of $1,000, or 13%. The decrease is primarily attributable to reduced personnel expenses during the 2026 First Quarter.
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 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.
Current wording
General and Administrative Expenses. General and administrative expenses were $1,022,000 and $929,000 for the 2026 First Quarter and the 2025 First Quarter, respectively, an increase of $93,000, or 10%. 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 increase is primarily attributable to higher professional service fees, stock-based expense, and insurance expenses, driven by the transition into the digital asset space.
Previous 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.
Current wording
As of March 31, 2026, we had $2,130,000 in cash and cash equivalents, $7,209,000 in digital assets, and working capital of $8,723,000. For the three months ended March 31, 2026, we recorded net income of $1,697,000, and we used $650,000 of net cash in operating activities.
Previous 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.
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 through the exercise of outstanding common and/or preferred warrants, and/or through 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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 fund operations or provide growth capital, we will need to raise capital through the exercise of outstanding warrants and/or one or more debt 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.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
*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 report — wording carried elsewhere
*Cost of Revenue.*Cost of revenue includes all internal and external costs related to the delivery of revenue. Cost of revenue also includes taxes, which have been billed to customers. Cost of revenue by segment is presented in the following table (in thousands):
Previous report — wording carried elsewhere
Operating expenses are presented in the following table (in thousands):
Previous report — wording carried elsewhere
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.