TaoWeave, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and Six Months Ended June 30, 2026

Note1 - Business Description and Significant Accounting Policies

Business Description

TaoWeave, Inc. ("TaoWeave" or the "Company") was formed as a Delaware corporation in* May 2000.*

TaoWeave is focused on the Bittensor ecosystem, a decentralized, open-source protocol that coordinates the development and deployment of artificial intelligence (“AI”) models. The Company's principal asset is TAO, Bittensor’s native cryptocurrency, which the Company accumulates and stakes on the Bittensor network to generate yield in the form of additional TAO tokens. The Company's goal is to provide public-market investors with economic exposure to the Bittensor ecosystem. The Company also operates legacy businesses including managed services for network solutions and video collaboration and collaboration products.

Basis of Presentation

The Company’s fiscal year ends on* December 31of each calendar year. The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared on substantially the same basis as the Company's annual Consolidated Financial Statements for the fiscal year ended December 31, 2025*. In the opinion of the Company’s management, these interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the Company's financial position, results of operations, and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

The* December 31, 2025* Condensed Consolidated Balance Sheet data in this document was derived from audited consolidated financial statements. The Condensed Consolidated Financial Statements and notes included in this quarterly report on Form10-Q donot include all disclosures required by U.S. generally accepted accounting principles and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended* December 31, 2025*, and notes thereto included in the Company’s fiscal2025 Annual Report on Form10-K, filed with the Securities and Exchange Commission (“SEC”) on* March 20, 2026* (the “2025 Annual Report”).

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

Principles of Consolidation

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

Cash and Cash Equivalents

As of* June 30, 2026*, the Company's total cash balance of $735,000 is available. As of* December 31, 2025*, the Company's total cash balance of $2,258,000 was available, with $500,000 held in short-term certificates of deposit with MidFirst Bank. The Company considers highly liquid investments with original maturities ofthree months or less to be cash equivalents.

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Stock-Based Expense

In* June 2025,the Company granted warrants to an advisor related to digital assets.**See Note8* - Capital Stock for further information.** The total stock-based cost of these warrants is $335,000, which was expensed ratably over thetwelve-month original life of the contract and the vesting period of the warrants. During thethree andsix months ended* June 30, 2026*, $82,000 and $166,000 was recorded as stock-based advisory fees in general and administrative expense, respectively. During the year ended* December 31, 2025*, $169,000 was recorded as stock-based advisory fees in general and administrative expense, and as of* June 30, 2026*,no expense remains to be recognized.

Segments

The Company currently operates inthree segments: (1) "Digital Assets", which represents the business surrounding the Company's 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 the Company's Mezzanine™ product offerings.**See Note12 - Segment Reporting **for further discussion. The Company continually evaluates its operations for changes in its segment activity.

Use of Estimates

Preparation of the Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates made. The Company continually evaluates the reasonableness of estimates used in the preparation of the Company's consolidated financial statements. 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, the inputs used to determine the fair value of equity-based awards, fair value of the SAFE investment, and the fair value of digital assets.

Significant Accounting Policies

The significant accounting policies used in the preparation of these Condensed Consolidated Financial Statements are disclosed in the Company's2025 Annual Report and there have beenno changes, other than those listed below, to the Company’s significant accounting policies during thesix months ended* June 30, 2026*.

Investments in Equity Securities. Investments in equity securities and other ownership interests in entities that the Company doesnot consolidate and over which it doesnot exercise significant influence are accounted for under ASC321. The Company evaluates each investment for embedded features requiring bifurcation under ASC815-15; where separation is required, the host instrument remains within ASC321. Equity securities with a readily determinable fair value are measured at fair value with changes recognized in net income. For equity securities without a readily determinable fair value, the Company* mayelect the fair value option under ASC825*-10 on an instrument-by-instrument basis at initial recognition; absent such election, the Company applies the measurement alternative under ASC321-10-35-2 and measures the investment at cost less impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company performs a qualitative impairment assessment each reporting period and writes the investment down to fair value, with the loss recognized in net income, if that assessment indicates impairment.

Investment in Manako.** Because Manako is a private company andno readily determinable fair value exists for our SAFE investment (as defined inNote5 - Investment in Manako Labs Ltd.), we account for it under the measurement alternative in ASC321-10-35-2, at cost of $1.0 million, less impairment, if any, adjusted for any observable price changes in orderly transactions for identical or similar Manako securities. Determining whether an impairment indicator exists, and the amount of any impairment or upward adjustment, requires significant judgment, including with respect to Manako’s cash runway, the continued operation of Subnet44, and the occurrence of any future Manako financing transactions that could serve as an observable price input.No impairment was determined to exist during thethree andsix months ended* June 30, 2026*. SeeNote5 - Investment in Manako Labs Ltd. **for further information.

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Intangible Assets. The Company records intangible assets when it acquires, or is granted, a contractual or other legal right to an identifiable, non-monetary asset that lacks physical substance, including licenses, distribution and commercialization rights, permits, and similar arrangements. Intangible assets are initially recorded at cost or, where acquired other than for cash at the fair value of the consideration given or the asset received, whichever is more clearly determinable, consistent with ASC350-30 and, where applicable, ASC718 or ASC805. The Company’s intangible assets to date have finite useful lives. The Company amortizes finite-lived intangible assets on a straight-line basis over their estimated useful lives, which management determines based on the contractual or legal term of the underlying arrangement (including expected renewals where appropriate), the period over which the asset is expected to contribute to future cash flows, and any other pertinent factors, such as the level of required maintenance expenditures and the effects of obsolescence, demand, competition, and industry conditions. The Company doesnot currently hold any intangible assets with indefinite useful lives. The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group)* may**not* be recoverable, in accordance with ASC360-10-35. Impairment indicators the Company considers include significant underperformance of the underlying arrangement relative to expectations, a significant adverse change in the manner in which an asset is used, the likelihood of early termination of a related contract, or significant negative industry or economic trends. If such indicators are present, the Company compares the carrying amount of the asset to the sum of the undiscounted future cash flows expected to result from its use and eventual disposition. If the carrying amount exceeds those undiscounted cash flows, the Company recognizes an impairment loss equal to the amount by which the carrying amount exceeds the asset’s fair value, with fair value generally estimated using a discounted cash flow or other applicable valuation technique. The Company reassesses the remaining useful life of each intangible asset each reporting period and, if its estimate of the remaining period of benefit changes, accounts for the change prospectively as a change in accounting estimate, adjusting the periodic amortization charge over the revised remaining useful life.

Valuation of the Closing Warrant and useful life of the related intangible asset. We measured the Closing Warrant (as defined inNote6) issued to Manako at its grant-date fair value of $60,000 using the Black-Scholes option-pricing model, which requires management to select assumptions for expected volatility, the risk-free interest rate, and the expected term. We capitalized this amount as an intangible commercialization and licensing rights asset because it represents consideration for a multi-period contractual right rather than a currently consumed good or service, and we are amortizing it on a straight-line basis over an estimated three-year useful life of the underlying license Term and renewal expectations. During thethree andsix months ended* June 30, 2026*, the Company recorded amortization expense of $2,000, andno impairment was determined to exist. SeeNote6 - Intangible Asset for further information.

**Revenue Recognition.**The Company recognizes revenue in accordance with ASC606, Revenue from Contracts with Customers. Under ASC606, the Company recognizes revenue upon transfer of control of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. The Company applies the followingfive-step model: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the identified performance obligations; and (v) recognize revenue as, or when, the Company satisfies each performance obligation, either over time or at a point in time, depending on the nature of the good or service and the terms of the arrangement.

Principal versus agent determination. We evaluated our role in Customer Agreements entered into under the TLDA (as defined inNote5 - Investment in Manako Labs Ltd.) and concluded we act as principal, based on our control over pricing (within Manako’s pricing floor), primary responsibility for customer fulfillment andfirst-level support, and discretion in setting price, in accordance with ASC606-10-55-36 through55-40. This conclusion required judgment, and a different conclusion would result in Net Revenue (as defined inNote10) being presented net of the Revenue Share (as defined inNote10) rather than gross, with a corresponding decrease in both revenue and cost of revenue butno effect on gross profit or net loss. SeeNote10 - Revenue Recognition - Manako Technology License and Distribution Agreement for further information.

Recently Issued Accounting Pronouncements

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.

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Note2 - Liquidity

As of* June 30, 2026*, the Company had $735,000 in cash and cash equivalents, $4,709,000 in digital assets, and working capital of $4,432,000. For thesix months ended* June 30, 2026*, the Company recorded a net loss of $1,593,000, used net cash of $334,000 in investing activities, and used net cash of $1,189,000 in operating activities.

The Company believes its existing cash and cash equivalents, and the fair value of its TAO tokens (if converted to cash), will be sufficient to fund the Company's operations and meet the Company's working capital requirements for at least the nexttwelve months from the date of this Report.

Note3 - Digital Assets

The Company's Cryptocurrency Asset Strategy

The Company's current primary activity is accumulating and staking TAO, and the Company allocates substantial portions of its available cash to purchase TAO with the goal of maximizing TAO holdings per outstanding common share. As of* June 30, 2026* and* December 31, 2025*, approximately 69% and 66% of the Company's total assets (including cash) were held in TAO, respectively. The Company intends to continue allocating substantial portions of its excess cash to TAO without a formal cap on the percentage of assets invested in TAO.

The Company doesnot hedge its TAO exposure and doesnot hold any other digital assets. All TAO is staked as soon as trade settlement permits, and the Company currently spreads staking across both BitGo Trust Company, Inc. ("BitGo") and the Kraken exchange ("Kraken", and together with BitGo, the "TAO Custodians").

Digital assets are measured at their fair market value using the last close price of the day in the UTC time zone at the end of each reporting period. The unrealized gains and losses resulting from remeasurement of digital assets are recorded in other income on the Condensed Consolidated Statement of Operations.

The Company recorded net unrealized losses of $2,295,000 and $97,000 for thethree andsix months ended* June 30, 2026*, respectively. The Company recorded an unrealized net gain of $31,000 for thethree andsix months ended* June 30, 2025*. These gains and losses are recorded in other (expense) income on the Condensed Consolidated Statement of Operations.

As of* June 30, 2026*, the Company held 23,335.18 TAO tokens with an approximate fair value of $4,709,000.

The Company's Staking Program

As holders of TAO tokens, the Company can stake any amount of the liquidity it holds to a validator. The Company stakes substantially all of its TAO through its TAO Custodians, who delegate the Company's tokens to validators on the Bittensor network. 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. In exchange for the Company's staked TAO supporting a validator’s operations, the Company receives 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 in proportion to the Company's staked digital assets relative to the total staked by all delegators to the node at that time, and distributed directly to the Company's digital wallets in the validator node's native token (TAO) by the network as part of its consensus mechanism. The Company records these rewards as revenue in its Condensed Consolidated Statement of Operations.

As of* June 30, 2026* and* December 31, 2025*, all of the Company's TAO token holdings were staked. The Bittensor protocol doesnot impose lock-up periods or unbonding delays; as of* June 30, 2026*, all of the Company's staked TAO could be unstaked and transferred without protocol-enforced waiting periods. The Company doesnot currently engage in direct subnet mining or validation, but* may*explore such activities in the future.

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Staking yields are variable and depend on several factors, including validator performance, total network stake, and the dynamics of the specific subnets to which the Company's TAO is delegated. The following tables summarize the Company's staking rewards for thethree andsix months ended* June 30, 2026,and2025* (in thousands except for tokens):

The Company's cost of revenue for digital assets consists of custodian fees and advisor fees on its staked digital assets. For thethree andsix months ended* June 30, 2026*, the Company recorded cost of revenue of $6,000 and $12,000, related to digital asset staking, respectively, resulting in gross profits of $99,000 and $179,000, respectively, or 94% for both periods. The following table summarizes the Company's cost of revenue for thethree andsix months ended* June 30, 2026,and2025* (in thousands):

During thethree andsix months ended* June 30, 2026*, the Company purchased 1,900.00 TAO tokens for $506,000.

During thethree andsix months ended* June 30, 2026*, the Company sold 2,502.23 and 3,959.23 tokens for cash proceeds of $650,000 and $1,172,000, respectively. The Company recognized realized losses on the sale of TAO tokens of $166,000 and $114,000 for thethree andsix months ended* June 30, 2026*, respectively. These losses are recorded in other (expense) income on the Condensed Consolidated Statement of Operations.

The following tables summarize disposition activity for thethree andsix months ended* June 30, 2026* (in thousands except for tokens):

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The following table summarizes the Company's digital asset activity for the year ended* December 31, 2025*, and thethree andsix months ended* June 30, 2026*. The fair value is presented as of* June 30, 2026* (in thousands except for tokens):

Note4 - Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

As of* June 30, 2026*, and* December 31, 2025*, the Company's Digital Assets segment hadzero and $168,000 in prepaid expenses, respectively. These prepaid expenses were related to unamortized stock-based advisor expenses.

As of* June 30, 2026*, and* December 31, 2025*, the Company's Managed Services segment had $7,000 and $15,000 in prepaid expenses, respectively. These prepaid expenses primarily consisted of licensing expenses.

As of* June 30, 2026*, and* December 31, 2025*, the Company's Collaboration Products segment had $2,000 and $7,000 in prepaid expenses, respectively. These prepaid expenses primarily consisted of software licenses.

As of* June 30, 2026*, and* December 31, 2025*, the Company's unallocated prepaid expenses were $258,000 and $234,000, respectively. These prepaid expenses were primarily attributable to insurance and software licenses. As of* June 30, 2026*, the amount also included expenses related to the filing of a registration statement, and as of* December 31, 2025*, the amount also included personnel expenses due to the timing of payroll.

Note5 - Investment in Manako Labs Ltd.

On* May 28, 2026,the “Company entered into a Technology License and Distribution Agreement (the “TLDA”) with Manako Labs Ltd, a company organized under the laws of England and Wales (“Manako”). The TLDA establishes an integration partnership combining Manako’s Score AI computer vision platform operating on Bittensor Subnet44* and related technologies with the Company’s North American enterprise relationships, commercial infrastructure, and public market credibility. See**Note10 - Revenue Recognition - Manako Technology License and Distribution Agreement **for further discussion on the TLDA.

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Concurrently with the TLDA, we entered into a Simple Agreement for Future Equity (the “SAFE”) pursuant to which we invested $1.0 million in Manako (the “Manako Investment”), and a related SAFE Side Letter Agreement (the "SAFE Side Letter Agreement") providing us with certain information, key-person notice, and pro rata investment rights. The TLDA’s commercial terms, including Manako’s platform-availability obligations and our revenue-share payment obligations, didnot become operative until we funded the full SAFE investment amount, which occurred on* May 29, 2026 (*the “Commercial Commencement Date”).

Under the SAFE, upon a future qualifying equity financing by Manako, the SAFE will automatically convert into shares of Manako capital stock at a conversion price equal to the lesser of (i) $40,000,000 divided by the number of shares of Manako outstanding immediately prior to such financing on a fully diluted basis, or (ii)80% of the lowest price per share paid by investors in such financing (i.e., a 20% discount), whichever results in the greater number of shares issued to the Company. The SAFE also entitles the Company to a liquidation-preference-like payment upon a liquidity or dissolution event equal to the greater of the Company’s $1,000,000 investment or its as-converted value, and will automatically convert into Manako ordinary shares on* December 1, 2027 (the “Longstop Date”) ifno* equity financing, liquidity event, or dissolution event has occurred before that date. Pursuant to a related SAFE Side Letter Agreement, Manako granted the Company certain information rights, notice rights regarding changes to Manako’s key personnel, and the right to subscribe for its pro rata share of shares issued in Manako’s next equity financing.

The SAFE requires the Company to receive equity securities (or a cash payment only upon a liquidity or dissolution event that neither party can unilaterally force), and it doesnot permit routine net cash settlement. The SAFE doesnot provide the Company with significant influence over Manako — the Company receivesno voting rights, board representation, or participating rights over Manako’s operating and financing decisions.

Accordingly, the Company has accounted for the Manako Investment as an equity security without a readily determinable fair value under ASC321-10-35-2 (the “measurement alternative”). The Manako Investment is initially measured at cost and is subsequently remeasured only for (a) impairment and (b) observable price changes in orderly transactions for identical or similar Manako securities. As of* June 30, 2026*, the carrying value of the Manako Investment was $1,000,000, and the Company hadnot identified any observable price changes or indicators of impairment. The Company will continue to monitor Manako’s cash runway, financing activity, and the operational status of the Bittensor Subnet44 network on which Manako’s platform depends, for indicators of impairment or observable transactions requiring remeasurement in future periods. The Manako Investment is included as an equity investment on the Company’s Condensed Consolidated Balance Sheet.

Note6 - Intangible Asset

In connection with the TLDA described inNote10 - Revenue Recognition - Manako Technology License and Distribution Agreement, on the Commercial Commencement Date, the Company issued Manako a warrant to purchase up to 100,000 shares of the Company’s common stock at an exercise price of $3.41 per share, exercisable at any time through* November 29, 2027 (the “Closing Warrant”). The Closing Warrant was issued to Manako, a non-employee business counterparty, in exchange for TaoWeave’s designation as Manako’s preferred commercialization partner in the Territory and the associated distribution and business-referral rights under the TLDA, rather than for cash. The Company evaluated the Closing Warrant under the indexation and equity-classification guidance in ASC815*-40-15 and815-40-25 and concluded it is equity-classified: it is settleable in a fixed number of shares for a fixed exercise price (subject only to customary anti-dilution adjustments that donot preclude equity classification), is subject to a 9.99% beneficial ownership blocker, and the Company isnot required to net-cash-settle the warrant.

Because the award was issued to a non-employee in exchange for rights received rather than for cash, the Company measured the Closing Warrant at its grant-date fair value under ASC718-10 (as amended by ASU2018-07), using the Black-Scholes option-pricing model with the following assumptions: TaoWeave’s quoted closing stock price of $1.36 on* May 29, 2026;an exercise price of$3.41; a contractual term through November 29, 2027;*expected volatility of 142.8%; a risk-free interest rate of 3.89%; andno expected dividends. The resulting grant-date fair value of $60,000 was capitalized as an intangible asset, “Commercialization and Licensing Rights,” because it represents consideration for an identifiable, multi-period contractual right — preferred-partner status, referral and market-development-fee rights, and license rights extending through the Initial Term and any Renewal Terms of the TLDA — rather than for day-one goods or services.

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Management's best estimate of the useful life of this intangible asset isthree years, and the asset will be amortized on a straight-line basis. Amortization began in* June 2026*and is recorded within general and administrative expense on its Condensed Consolidated Statement of Operations.

Amortization expense was $2,000 for the period ended* June 30, 2026*. Based on the carrying amount as of* June 30, 2026*, the Company expects to record future amortization expense of approximately $10,000 for the remainder of2026, $20,000 for each of the years ending* December 31, 2027,2028, and $9,000 for the year ended December 31, 2029,and will reassess the asset for impairment if events or circumstances indicate its carrying amount maynot* be recoverable, including in the event of a Subnet Disruption Event (as defined and discussed inNote10 - Revenue Recognition - Manako Technology License and Distribution Agreement**) or termination of the TLDA.

Contingent Tranche A and Tranche B warrants. The TLDA also contemplates the issuance of up to 200,000 additional warrants to Manako —100,000 at a $4.50 exercise price (“Tranche A”) and 100,000 at a $5.50 exercise price (“Tranche B”) — in consideration for Manako’s advisory support of a potential future Company-operated Bittensor subnet. Under ASC718-10-25-5 through25-19, a grant date doesnot occur until there is a mutual understanding of the key terms of an award and the recipient’s compensation begins to be affected by changes in the issuer’s stock price. Because the scope of Manako’s advisory services remains to be defined in a statement of work that hasnot yet been executed, and because the Company retains sole discretion over whether to pursue the underlying subnet initiative at all, the Company concluded thatno grant date had occurred for the Tranche A or Tranche B warrants as of* June 30, 2026*. Accordingly,no compensation cost or equity has been recognized for these contingent warrants. The Company will reassess this conclusion each reporting period and will recognize the awards at fair value beginning when a statement of work is executed, and the ASC718 grant-date criteria are satisfied.

Note7 - Accrued Expenses and Other Current Liabilities

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

As of* June 30, 2026*, and* December 31, 2025*, the Company's Digital Assets segment had accrued expenses of $20,000 and $21,000, respectively. These expenses were related to advisory fees.

As of* June 30, 2026*, and* December 31, 2025*, the Company's Managed Services segment had accrued expenses and other current liabilities of $11,000. These expenses consisted primarily of accrued taxes and regulatory fees.

As of* June 30, 2026*, and* December 31, 2025*, accrued expenses and other current liabilities for the Company's Collaboration Products segment were $170,000 and $269,000, respectively. These amounts primarily consisted of rent expenses and customer deposits.

Unallocated accrued expenses were $975,000 and $760,000 as of* June 30, 2026*, and* December 31, 2025*, respectively. Unallocated accrued expenses consisted primarily of compensation expenses, professional service expenses, accrued dividends, and corporate franchise taxes.

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Note8 - Capital Stock

Common Stock

The Company’s common stock, par value $0.0001 per share ("Common Stock"), is listed on the Nasdaq Capital Market (“Nasdaq”) under the ticker symbol “TWAV.” As of* June 30, 2026*, we had 150,000,000 shares of the Company's Common Stock authorized, with 3,571,590 and 3,571,401 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. The Stock Repurchase Program hasno* 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.

Common Stock activity for the year ended* December 31, 2025* and thesix months ended* June 30, 2026*, is presented below. During thethree andsix months ended* June 30, 2026*,244,191 shares of the Company's Common Stock were issued related to the exercise of 244,191 Pre-Funded Warrants. During thethree andsix months ended* June 30, 2025*,394,864 and 404,864 shares of the Company's Common Stock were issued related to the exercise of 394,864 and 404,864 Common Warrants, respectively.

Common Stock Warrants

Common Warrants

On* March 30, 2023,the Company entered into a Securities Purchase Agreement (the“2023* Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company issued and sold, in a private placement transaction (the “Private Placement”) (i) shares of the Company’s Series F convertible preferred stock, $0.0001 par value per share (the “Series F Preferred Stock”), (ii) preferred warrants (“Preferred Warrants”) to acquire shares of Series F Preferred Stock (the “Warrant Preferred Shares”) and (iii) common warrants (“Common Warrants”), to acquire shares of Common Stock. The Private Placement closed on* March 31, 2023.*

The Common Warrants have a term offive years from the date that issix months andone day from the date of issuance. Pursuant to the terms of the2023 Purchase Agreement, additional Common Warrants were issued in2024 and2025. The Common Warrants are currently exercisable at $3.41 per share, and a cash fee of 8% of the proceeds is payable to the Placement Agent (defined below) upon exercise. During thethree andsix months ended* June 30, 2025*, Common Warrants to purchase 394,864 and 404,864 shares of Common Stock, respectively, were exercised at $3.41 per share. The Company received gross proceeds of $1,348,000 and $1,382,000, respectively, and net proceeds of $1,241,000 and $1,272,000, respectively. There wasno Common Warrant activity during thethree andsix months ended* June 30, 2026*.

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2023 Placement Agent Warrants

In connection with the Private Placement, pursuant to an Engagement Letter dated* March 30, 2023 (the “Engagement Letter”), between the Company and Dawson James Securities Inc. (the “Placement Agent”), the Company agreed to (i) pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds raised in the Private Placement, and (ii) grant to the Placement Agent warrants (the “Placement Agent Warrants”) to purchase shares of Common Stock. The Placement Agent Warrants have the same terms and conditions as the Common Warrants issued in the Private Placement. As of June 30, 2026*,no 2023 Placement Agent Warrants had been exercised, and2023 Placement Agent Warrants to purchase up to 153,470 shares of Common Stock are issued and outstanding.

Advisor Warrants

On* June 5, 2025,the Company issued warrants to purchase 100,000 shares of the Company's Common Stock to an Advisor (the "Advisor Warrants"), in connection with the provision of certain treasury advisory services. The Advisor Warrants vested in equal installments at a rate of1/12th* (8.33%) per month, beginning on thethirty-day anniversary of the issue date, fortwelve months. As of* June 30, 2026*, all 100,000 Advisor Warrants have vested, andno Advisor Warrants have been exercised. The Advisor Warrants expire on* June 5, 2028,*and vested warrants are exercisable at a price of $3.77 per share.

Pre-Funded Warrants

On* June 6, 2025,the Company entered into a securities purchase agreement, dated as of June 5, 2025 (the“2025* Purchase Agreement”), pursuant to which the Company issued pre-funded warrants to acquire up to 1,989,392 shares of its Common Stock (the “Pre-Funded Warrants") in exchange for gross and net proceeds to the Company of approximately $7.5 million and $6.9 million, respectively, after deducting placement agent fees of $375,000 and other offering expenses of $237,000 payable by the Company. 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, 2025.244,191 Pre-Funded Warrants were exercised during thethree* andsix months ended* June 30, 2026*.

2025 Placement Agent Warrants

On* June 10, 2025,pursuant to the2025* Purchase Agreement, the Company issued warrants to purchase shares of the Company's Common Stock to the Placement Agent (the*"2025* Placement Agent Warrants"). The2025 Placement Agent Warrants are exercisable immediately upon issuance. The terms of the2025 Placement Agent Warrants are substantially the same as those of the Pre-Funded Warrants, except that the2025 Placement Agent Warrants will expire on* June 10, 2030,and are exercisable at a price of $4.71 per share. As of June 30, 2026*, no 2025 Placement Agent Warrants have been exercised, and2025 Placement Agent Warrants to purchase up to 99,470 shares of Common Stock are issued and outstanding.

Manako Warrants

On* May 29, 2026,in connection with the SAFE discussed in**Note5* - Investment in Manako Labs Ltd., and the TLDA discussed inNote10 - Revenue Recognition - Manako Technology License and Distribution Agreement** the Company issued warrants to purchase up to 100,000 shares of the Company’s Common Stock, to Manako Labs, Ltd., at an exercise price of $3.41 per share (the “Closing Warrant”).

In connection with potential joint development of the Company’s own subnet on the Bittensor network, the Company* may*issue additional warrants to Manako as follows: (i) warrants to purchase up to 100,000 shares of Common Stock at an exercise price of $4.50 per share, issuable upon the satisfaction of certain conditions (“Tranche A Warrants”), and (ii) warrants to purchase up to 100,000 shares of Common Stock at an exercise price of $5.50 per share, issuable upon the achievement of certain milestones (“Tranche B Warrants” and together with the Closing Warrant and Tranche A Warrants, the “Manako Warrants”).

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The exercise price of each Manako Warrant is subject to customary adjustments for stock dividends, stock splits, reclassifications, stock combinations and the like and dilutive issuances (in each case, subject to certain exceptions). There isno established public trading market for the Warrants, and the Company doesnot intend to list the Warrants on any national securities exchange or nationally recognized trading system.

Manako* may**not* exercise any portion of such Manako Warrants to the extent that they, together with any affiliates, would beneficially own more than 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, Manako* may*increase or decrease the beneficial ownership limitation, subject to a maximum of up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise.

The Manako Warrants and the shares of Common Stock underlying the Manako Warrants (the “Warrant Shares”) havenot been registered under the Securities Act. Pursuant to the TLDA, the Company, within180 days of the Effective Date, must file a registration statement for the resale of the Warrant Shares. The Company must use commercially reasonable efforts to cause such registration statement to become effective as soon as practicable thereafter and to keep such registration statement effective at all times untilno Warrants or Warrants Shares are outstanding.

In connection with the TLDA, on* May 28, 2026,the Company and Manako entered into a Lock-Up Agreement (the “Lock-Up Agreement”), pursuant to which the Manako Warrants are subject to a lock-up period ofsix* (6) months following issuance or until effective registration of Warrant Shares, whichever is later, followed bytwenty-four (24) months of post-lock-up trading restrictions including a daily volume cap often percent (10%) of average daily trading volume, a price floor ofone hundred twenty percent (120%) of the relevant exercise price, andthree (3) trading days’ advance notice of sales. The Lock-Up Agreement provides carve-outs from the post-lock-up trading restrictions for (i) block trades to institutional investors through a registered broker-dealer, (ii) private transfers to Manako affiliates bound by the same obligations, (iii) transfers in connection with any merger, tender offer, or similar transaction involving the Company as issuer, and (iv) sales pursuant to a Rule10b5-1 plan established outside a blackout period.

Outstanding warrants for the Company's Common Stock, as of* June 30, 2026*, are presented below.

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Common warrant activity for the year ended* December 31, 2025* and thesix months ended* June 30, 2026* is presented below.

Treasury Shares

The Company maintains treasury stock for the Common Stock shares repurchased when withholding shares to cover taxes on equity award transactions. There wereno treasury stock transactions during thethree andsix months ended* June 30, 2026*, or the year ended* December 31, 2025*.

Note9 - Preferred Stock

The Company Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. As of* June 30, 2026*, the Company had 42,000 shares of Series F Preferred Stock ("Series F Preferred Shares") authorized and 150 shares issued and outstanding.

Series F Preferred Stock

The terms of the Series F Preferred Stock are as set forth in the Certificate of Designations of Series F Preferred Stock of 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 the current conversion price of $3.77 (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).

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Under the Certificate of Designations, shares of 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 are 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 Stock will accrue dividends at the rate of 20% per annum (the “Default Rate”). The Series F Preferred Stock hasno voting rights, other than with respect to certain matters affecting the rights of the Series F Preferred Stock. On matters with respect to which the holders of the Series F Preferred Stock have a right to vote, holders of the Series F 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 entered into concurrently with the2023 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, isnot appointed withinthirty (30) business days. In connection with a Triggering Event, the Default Rate is triggered. We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), maintenance of properties, and the transfer of assets, among other matters.

During thethree andsix months ended* June 30, 2025*,190 shares of Series F Preferred Stock, plus accrued dividends of $19,000, were converted into 45,163 shares of the Company's Common Stock. There wereno Series F Preferred Shares converted to Common Stock during thethree andsix months ended* June 30, 2026*. As of* June 30, 2026*,150 shares of Series F Preferred Stock and $30,000 of accrued dividends were outstanding.

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

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Series F Preferred Stock Warrants

The Preferred Warrants are exercisable for Series F Preferred Shares at an exercise price of $975. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalizations, or other similar transactions involving the Common Stock. 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 Preferred Warrants were initially set to expirethree years from the date of issuance, or* March 31, 2026,and are exercisable for cash. On March 31, 2026,the Company and the Preferred Warrant holders agreed to extend the terms of the Preferred Warrants to expire May 15, 2026.On May 15, 2026,the Company and the Preferred Warrant holders agreed to extend the terms of the Preferred Warrants to expire June 30, 2026.On June 30, 2026,the Company and the Preferred Warrant holders agreed to extend the terms of the Preferred Warrants to expire September 30, 2026.*

No Preferred Warrants were exercised during thethree andsix months ended* June 30, 2026*, or2025. As of* June 30, 2026*,30,527 Preferred Warrants are issued and outstanding.

Note10 - Revenue Recognition - Manako Technology License and Distribution Agreement

On* May 28, 2026,the Company entered into the TLDA with Manako, under which Manako granted the Company a non-exclusive, non-transferable, sublicensable license during the License Term to market, demonstrate, sell, and distribute Manako’s Score AI computer vision platform (the “Platform”) to enterprise customers in the United States and Canada (the “Territory”). The TLDA has an initialone*-year term beginning* May 28, 2026,which automatically renews for successive12*-month periods unless either party gives at least60 days’ prior notice of non-renewal. The Platform is a computer vision technology that operates on Bittensor Subnet44, an external,third-party-operated blockchain subnetnot controlled by the Company or, following certain governance actions described below, entirely by Manako.

The Company contracts directly with Territory end-customers under customer agreements (the "Customer Agreements") it negotiates, controls pricing within Manako’s established pricing floor, and is primarily responsible forfirst-level customer support and overall fulfillment of the customer relationship, while Manako retains ownership of the underlying platform intellectual property and providessecond-level support. Applying the indicators of control in ASC606-10-55-36 through55-40, the Company concluded it acts as principal in Customer Agreements it enters into directly, and recognizes gross net revenue ("Net Revenue") from those arrangements as it satisfies its performance obligation of providing access to and use of the Platform together withfirst-level support. In consideration for the license and rights granted under the TLDA, the Company pays Manako a revenue share equal to a certain percentage of Net Revenue (the "Revenue Share"), which the Company records as a variable, usage-based cost of revenue rather than as a reduction of revenue. Net revenue is defined generally as gross revenue received from customers under Customer Agreements, less refunds, credits, applicable taxes, andthird-party payment processing fees.

Where Manako instead enters into a direct customer agreement with a Territory customer that was sourced by the Company, is a previously agreed Company-named account, or was closed with the Company’s material involvement, Manako pays the Company a referral fee equal to a certain percentage of the customer contract value. Where Manako sources, leads, and closes a Territory opportunity directly without the Company’s material involvement (subject to customary exclusions for Manako’s pre-existing relationships), Manako pays the Company a market development fee equal to a certain percentage of thefirst twelve months of the customer contract value, provided the Company has maintained an active Territory commercial program. The Company recognizes referral fees and market development fees received from Manako as revenue when earned under the applicable provisions of the TLDA.

The commercial terms of the TLDA, including Manako’s obligation to make the Platform available and the Company’s obligation to pay the Revenue Share, didnot become operative until the Company funded the SAFE investment described inNote5 - Investment in Manako Labs Ltd. on* May 29, 2026.*

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As of* June 30, 2026*, the Company hasnot recognized any revenue or associated Revenue Share cost of revenue under Customer Agreements entered into pursuant to the TLDA.

Subnet Disruption Event. Because the Platform operates on Bittensor Subnet44, its availability depends on the continued operation of thatthird-party network. The TLDA defines a “Subnet Disruption Event” to include the suspension or material reduction of network emissions to Subnet44, adverse governance actions affecting Subnet44, deregistration or forced migration of Subnet44, or material disruption to the arrangements between Manako and the other parties that operate or support Subnet44. During any Subnet Disruption Event, Manako’s platform-availability obligations and the Company’s obligation to pay the Revenue Share are both suspended, and if a Subnet Disruption Event continues for more than20 consecutive days, the Company* may*terminate the TLDA immediately upon written notice.

Note11 - 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 ("Restricted Stock").

Diluted net loss per share is computed by giving effect to all potential shares of Common Stock, including stock options, preferred stock, warrants, and unvested Restricted Stock, to the extent they are dilutive. For thethree andsix months ended* June 30, 2026*, and2025, all such Common Stock equivalents have been excluded from diluted net loss per share as the effect would be anti-dilutive.

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

The following table represents the potential shares of Common Stock that were excluded from the computation of diluted weighted-average number of shares for thesix months ended* June 30, 2026,and2025*, because including them would have had an anti-dilutive effect:

The Pre-Funded warrants are included in the weighted average shares outstanding.

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Note12 - Segment Reporting

The Company currently operates inthree segments: (1) "Digital Assets", which represents the business surrounding the Company's 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 the Company's Mezzanine™ product offerings. The Company continually evaluates its operations for changes in its segment activity. Although operations resulting from the Manako TLDA could become a separate segment in the future, its operations are currently reported in the Corporate, or unallocated segment. Management will continue to evaluate the materiality of the operations and its impact on the Company for possible separation.

For thethree andsix months ended* June 30, 2026*, and2025, the CODM for thethree segments, was Peter 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").

Certain information concerning the Company’s segments for thethree andsix months ended* June 30, 2026*, and2025, is presented in the following tables (in thousands):

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The Company’s SSEs for each segment include direct labor costs and segment-based management expenses (collectively, “labor and labor related”), costs to purchase, store, and ship inventory, and inventory impairments (inventory and inventory related), circuit and network cost of revenue, other non-inventory cost of revenue, research and development costs, and bad debt recovery, as these are specific costs regularly provided to the CODM and used to evaluate segment performance. Other segment items include expenses recorded within cost of revenue and operating expenses, which are not regularly provided to the CODM. The CODM evaluates segment profit each period against historical results, factoring in macroeconomic factors such as the cost of labor and supplies, to assess segment performance.

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For thethree andsix months ended* June 30, 2026*, and2025,no material revenue was attributable to any individual foreign country, and all foreign revenue is billed in US Dollar. Revenue by geographic area is allocated as follows (in thousands):

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

Concentration of consolidated revenues was as follows:

Staking rewards on the Company's digital assets made up 20% and 16% of the Company's consolidated revenue for thethree andsix months ended* June 30, 2026*, respectively.

Concentration of consolidated accounts receivable was as follows:

Note13 - Commitments and Contingencies

Registration rights. The Company is required to file a registration statement on Form S-3 (or other form then available) covering the resale of the shares of common stock issuable upon exercise of the Closing Warrant, and any Tranche A and Tranche B warrants that* maybecome issuable,no later than November 24, 2026 (180 days after May 28, 2026),and to use commercially reasonable efforts to cause the registration statement to become effective as soon as practicable thereafter and to keep it effective untilno* such warrants or underlying shares remain outstanding. The TLDA doesnot provide for cash liquidated damages if the Company fails to timely file or maintain the effectiveness of this registration statement; accordingly, the Company hasnot recognized a separate liability under the registration payment arrangement guidance in ASC825-20 with respect to this obligation. The Company will continue to evaluate this conclusion if the terms of the registration obligation change.

Lock-up and resale restrictions. In connection with the TLDA, Manako agreed to a lock-up period with respect to the Closing Warrant shares (and any Tranche A/B warrant shares) ending on the later ofsix months after issuance or the effective date of the registration statement described above, followed by24 months of post-lock-up trading restrictions, including a daily volume cap of10% of average trading volume, a price floor of120% of the applicable exercise price, andthree trading days’ advance notice of sales, subject to customary carve-outs for block trades, permitted affiliate transfers, change-of-control transactions, and Rule10b5-1 plans. The Company considered this transfer restriction in estimating the grant-date fair value of the Closing Warrant as a marketability discount, consistent with ASC820-10-35, rather than as a separate unit of account.

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Contingent warrants. As described inNote8 - Capital Stock, the Company* maybecome obligated to issue up to 200,000 additional warrants to Manako (100,000 at $4.50 per share and 100,000 at $5.50 per share) in connection with potential advisory services related to a Company-operated Bittensor subnet. Issuance of these warrants is contingent on the Company’s discretionary decision to pursue that initiative, execution of a statement of work defining Manako’s advisory obligations, and satisfaction of related performance milestones.No liability or equity has been recognized for these contingent warrants as of June 30, 2026.*

Indemnification. The TLDA contains mutual indemnification obligations customary for arrangements of this type, subject in each direction to an aggregate liability cap generally equal totwo times the amounts paid or payable under the TLDA (subject to certain carve-outs, including for a Manako indemnification obligation related to certain regulatory filing exposure). The Company hasnot recorded a liability for these indemnification obligations as of* June 30, 2026,asno* claims have been asserted andno loss is probable and estimable.

Right offirst* refusal / post-termination distribution rights.* Following expiration or termination of the TLDA (other than termination by Manako for cause), the Company’s distribution rights terminate but it retains a right offirst refusal on new Territory business opportunities for a period of12 to18 months, depending on cumulative Net Revenue generated during the License Term, together with a post-termination continuation license (up to24 months) to service existing Customer Agreements and a12-month transition period. These provisions donot currently give rise to a recognizable asset or liability.

From time to time, the Company is subject to various legal proceedings arising in the ordinary course of business, including proceedings for which the Company has insurance coverage. As of the date hereof, the Company isnot party to any legal proceedings that it currently believes will have a material adverse effect on the Company's business, financial position, results of operations, or liquidity.

Note14 - Subsequent Events

On* July 28, 2026and August 6, 2026,*the Company issued 196,818 and 109,000 shares of Common Stock, respectively, related to the exercise of 196,818 and 109,000 Pre-Funded Warrants, respectively. As of the date of this filing,36,252 Pre-Funded Warrants remain outstanding.

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