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What changed in TaoWeave, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TaoWeave, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+282 added−351 removedSource: 10-K (2026-03-20) vs 10-K (2025-03-18)

Top changes in TaoWeave, Inc.'s 2025 10-K

282 paragraphs added · 351 removed · 143 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeManaged Services for Video Collaboration We provide a range of managed services for video collaboration, from automated to orchestrated, to simplify the user experience in an effort to drive the adoption of video collaboration throughout our customers’ enterprise. We deliver our services through a hybrid service platform or as a service layer on top of our customers’ video infrastructure.
Biggest changeWe 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.
Spatial input allows content to be spread across screens, spanning different walls, scalable to an arbitrary number of displays, and interact with our proprietary wand device. Mezzanine™ substantially enhances day-to-day virtual meetings with technology that accelerates decision-making, improves communication, and increases productivity.
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.
With the technology advancements over the past few years, including browser-based and mobile video, the options for video collaboration solutions and services are greater than ever before. With respect to our managed services for the network, we primarily compete with telecommunications carriers, including British Telecom, AT&T, Verizon, and Telus.
With the technology advancements over the past few years, including browser-based and mobile video, the options for video collaboration solutions and services are greater than ever before. Regarding our network managed services, we primarily compete with telecommunications carriers, including British Telecom, AT&T, Verizon, and Telus.
Corporate History Oblong, Inc. was formed as a Delaware corporation in May 2000. Prior to March 6, 2020, Oblong, Inc. was named Glowpoint, Inc. (“Glowpoint”).
Corporate History TaoWeave, Inc. was formed as a Delaware corporation in May 2000. Prior to March 6, 2020, TaoWeave, Inc. was named Glowpoint, Inc. (“Glowpoint”).
Certain features of our current Mezzanine™ product offerings compete in the communication and collaboration technologies market with products offered by Cisco WebEx, Zoom, LogMeIn, and GoToMeeting, along with bundled productivity solutions providers who offer limited content-sharing capabilities such as Microsoft Teams and Google G Suite.
Certain features of our current Mezzanine™ product offerings compete in the communication and collaboration technologies market with products offered from Cisco WebEx, Zoom, LogMeIn, and GoToMeeting, as well as with bundled productivity solutions providers that offer limited content-sharing capabilities, such as Microsoft Teams and Google G Suite.
You may review these documents on our website at www.oblong.com by accessing the investor relations section. Our website and the information contained on or connected to our website are not incorporated by reference herein, and our web address is included as an inactive textual reference only. -6- Table of Contents
You may review these documents on our website at www.taoweave.ai by accessing the investor relations section. Our website and the information contained on or connected to our website are not incorporated by reference herein, and our web address is included as an inactive textual reference only. 4 Table of Contents
Consequently, our financial results may fluctuate significantly from period to period based on the actions of one or more significant customers. -4- Table of Contents Competition The market for communication and collaboration technology services is competitive and rapidly changing.
Consequently, our financial results may fluctuate significantly from period to period based on the actions of one or more significant customers. Competition – Mezzanine ™ and Managed Services The market for communication and collaboration technology services is competitive and rapidly changing.
The Act requires us to file periodic reports, proxy statements, and other information with the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC.
Available Information We are subject to the Exchange Act's reporting requirements. The Act requires us to file periodic reports, proxy statements, and other information with the Securities and Exchange Commission (“SEC”). The SEC maintains an Internet site at http://www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC.
We expect this trend to continue in the future for our managed services business. Intellectual Property G-speak is the core technology platform for Mezzanine™. It enables applications to be developed that run across multiple screens and devices.
We expect this trend to continue for our managed services business. 3 Table of Contents Intellectual Property – Mezzanine ™ and Managed Services G-speak is the core technology platform for Mezzanine™. It enables the development of applications that run across multiple screens and devices.
Our competitors offer services similar to ours both on a bundled and unbundled basis, creating a highly competitive environment with pressure on the pricing of such services. Revenue attributable to our managed services described above has declined in recent years primarily due to the loss of customers to competition.
Our competitors offer services similar to ours both bundled and unbundled, creating a highly competitive environment that puts pressure on the pricing of these services. Revenue attributable to our managed services described above has declined in recent years, primarily due to customer losses to competition.
Our customers use the platform to solve big data problems, collaborate more effectively, and go from viewing pixels on a single screen to interacting with pixels on every screen. Videoconferencing has traditionally presented challenges for the user by presenting a complex maze of systems and networks that must be navigated and closely managed.
Our customers use the platform to solve big data problems, collaborate more effectively, and go from viewing pixels on a single screen to interacting with pixels on every screen. Videoconferencing has traditionally posed challenges for users, requiring a complex maze of systems and networks to navigate and closely manage.
Customers who purchase a Cisco, Polycom, Avaya, or LifeSize (Logitech) system or use certain other third-party video communications software such as Microsoft, WebEx, or WebRTC may all take advantage of our services regardless of their choice of network.
Customers who purchase a Cisco, Polycom, Avaya, or LifeSize (Logitech) system, or use certain other third-party video communications software, such as Microsoft, WebEx, or WebRTC, may all take advantage of our services regardless of their network choice. Our services support all standard video signaling protocols, including SIP, H.323, and Integrated Services Digital Network (“ISDN”), using infrastructure from various manufacturers.
Customers The majority of our revenue for the years ended December 31, 2024, and 2023 was generated from direct sales, with the remainder sold through distribution channels. These channels include systems integrators, channel partners, other resellers, and distributors. Sales to these service providers have been characterized by large and sporadic purchases and longer sales cycles.
Customers – Mezzanine ™ and Managed Services The majority of our revenue for the years ended December 31, 2025, and 2024, was generated from direct sales, with the remainder sold through distribution channels. These channels include systems integrators, channel partners, other resellers, and distributors.
To preserve capital, the Company significantly reduced its investments in sales and marketing during the last several years. For the years ended December 31, 2024, and 2023, sales and marketing expenses were $181,000 and $309,000, respectively.
Sales and Marketing – Mezzanine ™ and Managed Services We sell globally through direct customer sales and channel partners. To preserve capital, the Company significantly reduced its investments in sales and marketing during the last several years. For the years ended December 31, 2025, and 2024, sales and marketing expenses were $21,000 and $181,000, respectively.
The composition of our significant customers will vary from period to period, and we expect that most of our revenue will continue, for the foreseeable future, to come from a relatively small number of customers.
For the years ended December 31, 2025, and 2024, one major customer accounted for 79% and 85% of the Company’s total consolidated revenue, respectively. The composition of our significant customers will vary from period to period, and we expect that most of our revenue will continue, for the foreseeable future, to come from a relatively small number of customers.
Item 1. Business Overview We are a provider of patented multi-stream collaboration products and managed services for network solutions and video collaboration. Mezzanine ™ Product Offerings Our product is called Mezzanine™, a family of turn-key products that enable dynamic and immersive visual collaboration across multi-users, multi-screens, multi-devices, and multi-locations.
Mezzanine ™ Product Offerings 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.
Network services are offered to our customers on a subscription basis. Our network services business carries variable costs associated with the purchasing and reselling of this connectivity.
Network services are offered to our customers on a subscription basis. Our network services business incurs variable costs associated with purchasing and reselling this connectivity. Managed Services for Video Collaboration 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.
Pursuant to the Merger Agreement, among other things, Oblong Industries became a wholly owned subsidiary of the Company (the “Merger”). On March 6, 2020, Glowpoint changed its name to Oblong, Inc. Available Information We are subject to the Exchange Act's reporting requirements.
Pursuant to the Merger Agreement, among other things, Oblong Industries became a wholly owned subsidiary of the Company (the “Merger”). On March 6, 2020, Glowpoint changed its name to Oblong, Inc. Oblong, Inc. changed its name to TaoWeave, Inc. on December 8, 2025, reflecting its evolution into a digital asset treasury company designed for public market investors.
Historically, we have seen fluctuations in our gross margins based on changes in the balance of our distribution channels. A significant portion of our revenue is generated from a limited number of customers. For the years ended December 31, 2024, and 2023, one major customer accounted for 84.9% and 55.9% of the Company’s total consolidated revenue, respectively.
Sales to these service providers have been characterized by large and sporadic purchases and longer sales cycles. Historically, we have seen fluctuations in our gross margins based on changes in the balance of our distribution channels. A significant portion of our revenue is generated from a limited number of customers.
Our services support all standard video signaling protocols, including SIP, H.323, and Integrated Services Digital Network (“ISDN”), using infrastructure from a variety of manufacturers. Research and Development During the years ended December 31, 2024, and 2023, the Company incurred research and development expenses of $155,000 and $20,000, respectively, related to developing features and enhancements to our Mezzanine™ product offerings.
Research and Development During the years ended December 31, 2025, and 2024, the Company incurred research and development expenses of $10,000 and $155,000, respectively, related to developing features and enhancements to our Mezzanine™ product offerings. Employees As of December 31, 2025, we had 7 total full-time employees.
Gestural interaction makes it easy to move and highlight content to focus the attention of the team. Historically, customers have generally used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces.
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™. Historically, customers have used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces.
Our compensation program is designed to attract, retain, and motivate highly qualified employees and executives and is comprised of a mix of competitive base salary, bonus, and equity compensation awards, as well as other employee benefits. Our employees are not covered by a collective bargaining agreement, and we consider our relations with our employees to be good.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and new employees, advisors, and consultants. Our compensation program is designed to attract, retain, and motivate highly qualified employees and executives and comprises a mix of competitive base salaries, bonuses, equity compensation awards, and other employee benefits.
We are committed to diversity and inclusion as well as equitable pay within our workforce.
Our employees are not covered by a collective bargaining agreement, and we consider our relations with our employees to be good. We are committed to diversity and inclusion as well as equitable pay within our workforce. In addition, the health and safety of our employees, customers, and communities are of primary concern to us.
Although we cannot presently quantify the future financial impacts of this trend, such impacts will likely continue to have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows. -3- Table of Contents Managed Services for Network We provide our customers with network solutions that ensure reliable, high-quality, and secure traffic of video, data, and internet.
Given the declines in sales, we announced end-of-life for Mezzanine™ in 2025, and we expect to end the sale of Mezzanine™ products and maintenance after the first quarter of 2026. 2 Table of Contents Managed Services for Network We provide our customers with network solutions that ensure reliable, high-quality, and secure traffic of video, data, and internet.
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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™. Key capabilities and features of Mezzanine™ include: • Share Work With Others. Easily present work by plugging in or sharing wirelessly with the Mezzanine™ app.
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Item 1. Business Overview 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.
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Share up to 10 connected devices, including laptops, in-room PCs, and digital media players. Upload images and slides to present and explore content alongside live video streams. • Capture Ideas Instantly. Save snapshots of on-screen content to make sure good ideas don’t get lost. Annotate content in the Mezzanine™ app and share thoughts with others.
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Our goal is to provide public-market investors with economic exposure to the Bittensor ecosystem. During the year ended December 31, 2025, we deployed approximately $8.7 million to acquire approximately 24,128 TAO tokens through purchases executed via BitGo Trust Company, Inc. (“BitGo”) and the Kraken exchange (“Kraken”, and together with BitGo, the “TAO Custodians”).
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Download meeting materials to reference or share after the meeting. • Visualize Options and Outcomes . Mezzanine™ content spans multiple displays, so the information needed is in sight and on hand. Share more content, see more detail, and improve visual storytelling. Arrange content for side-by-side comparisons and cross-referencing. • Unite Distributed Teams.
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As of December 31, 2025, we held approximately 24,665 TAO tokens, inclusive of approximately 544 TAO earned through staking rewards during the period. All of our TAO is staked.
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Connect teams and get everyone on the same page. Meeting participants share the same visual workspace so they can perform like they are in the same room. Everyone in every location can add content and steer the conversation, increasing the opportunity and motivation to participate. • Connect with Ease.
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Since our private placement financing in June 2025 (the “2025 Private Placement”), 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.
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Mezzanine™ works seamlessly with existing video conferencing and collaboration solutions so teams can join meetings with the tools they use every day. Integration with Cisco and Polycom systems simplifies connecting rooms with voice, video, and content. • Orchestrate Content . Place content anywhere in the room from anywhere in the room with Mezzanine's™ award-winning wands.
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During 2025, we conducted due diligence on a number of subnet projects to assess their viability, technology, and potential alignment with our strategy.
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As discussed below, revenue declines for our Mezzanine™ products are primarily due to lower demand, largely a consequence of the commercial reactions to the COVID-19 pandemic and its prolonged effects. We believe the COVID-19 pandemic fundamentally altered the way businesses consider the use of physical office spaces and, consequently, the demand for technologies that enable in-person collaboration within these spaces.
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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.
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Our analysis indicates that the reduced demand for our Mezzanine™ products, particularly in the aftermath of COVID-19 , reflects a broader reassessment among our customers regarding the necessity and investment in collaboration solutions tailored for traditional office environments. Continuation of this trend could cause further declines in our revenue for this business.
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We also operate legacy businesses centered around our patented Mezzanine™ product line and managed services for video collaboration and network solutions. In conjunction with our 2025 Private Placement, we began transitioning our focus from these legacy operations to the Bittensor ecosystem.
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We offer our customers the following networking solutions that can be tailored to each customer’s needs: • Cloud Connect: Video ™ : Allows our customers to outsource the management of their video traffic to us and provides the customer’s office locations with a secure, dedicated video network connection to the Oblong Cloud for video communications. • Cloud Connect: Converge ™ : Provides customized Multiprotocol Label Switching (“MPLS”) solutions for customers who require a converged network.
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Background on Bittensor and TAO Bittensor is a decentralized network, built on a dedicated Layer 1 blockchain called “Subtensor” using the Substrate framework, that creates an open marketplace for AI. The network is organized into independent sub-networks called “subnets,” each focused on a specific type of AI task such as text generation, image recognition, or data analysis.
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A converged network is an efficient network solution that combines the customer’s voice, video, data, and Internet traffic over one or more common access circuits.
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Within each subnet, independent contributors (commonly referred to as “miners”) produce AI outputs, and other participants (commonly referred to as “validators”) evaluate the quality of that work.
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We fully manage and prioritize traffic to ensure that video and other business-critical applications run smoothly. • Cloud Connect: Cross Connect ™ : Allows the customer to leverage their existing carrier for the extension of a Layer 2 private line to our data center.
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An on-chain algorithm called Yuma Consensus aggregates validator evaluations across the network and allocates newly minted TAO rewards accordingly—a process commonly referred to as “Proof-of-Intelligence.” Contributors who produce higher-quality outputs earn more TAO; validators who evaluate accurately also earn more TAO.
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We provide our customers with the following services to meet their videoconferencing needs: • Managed Videoconferencing is a “high-touch” concierge-based offering where we set up and manage customer videoconferences and webcasts. Our managed videoconferencing services are offered to our customers on either a usage basis or on a monthly subscription.
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TAO serves three functions within the network: it is the unit of value used to reward participants, the staking asset that determines a participant’s influence and share of rewards, and the token used to pay transaction fees on the Subtensor blockchain. TAO has a fixed supply cap of 21,000,000 tokens.
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These services include call scheduling and launching and videoconference monitoring, support, and reporting. • Remote Service Management provides an overlay to enterprise information technology (“IT”) and channel partner support organizations and provides 24/7 support and management of customer video environments.
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New TAO is emitted as rewards to network participants at a rate that declines over time through periodic “halving” events, similar in structure to Bitcoin’s supply schedule. The first halving occurred in December 2025, reducing daily emissions from approximately 7,200 TAO to approximately 3,600 TAO.
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Our services are designed to align with a globally recognized set of best practices, Information Technology Infrastructure Library (“ITIL”), to standardize processes and communicate through a consistent set of terms with our customers and partners.
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As of the filing of this Report, TAO’s circulating supply was approximately 10.8 million tokens with a market capitalization of approximately $3.0 billion, according to publicly available sources. Circulating supply is dynamic: daily emissions are partially offset by tokens consumed through subnet registration and other protocol mechanisms. Our Cryptocurrency Asset Strategy Our current primary activity is accumulating and staking TAO.
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We offer, on a monthly subscription basis, three tiers of Remote Service Management options, ranging from remote proactive automated monitoring to end-to-end management to complement the needs of IT support organizations (including 24x7 support desk, incident/problem/change management, site certifications, and service level agreements). Sales and Marketing We sell globally through direct customer sales and channel partners.
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We have adopted a long-only TAO accumulation policy under which we allocate substantial portions of our available cash to purchase TAO with the goal of maximizing TAO holdings per outstanding common share. As of December 31, 2025, approximately 66% of our total assets (including cash) were held in TAO.
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Employees As of December 31, 2024, we had 7 total full-time employees. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and new employees, advisors, and consultants.
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We intend to continue allocating substantial portions of our excess cash to TAO without a formal cap on the percentage of assets invested. We do not hedge our TAO exposure and do not hold any other digital assets. We have not sold any TAO since inception of our digital asset strategy.
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In addition, the health and safety of our employees, customers, and communities are of primary concern to us. -5- Table of Contents Strategy In recent years, our Company has faced significant challenges, leading to declining revenues for both our Mezzanine™ product offerings and our Managed Services.
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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.
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These setbacks have prompted us to undertake a comprehensive review of our strategic direction with the aim of enhancing shareholder value through various means. Our exploration of strategic alternatives is diverse, encompassing the consideration of a range of transformative actions.
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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.” 1 Table of Contents Our Staking Program We stake substantially all of our TAO through our TAO Custodians, who delegate our tokens to validators on the Bittensor network.
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These include the possibility of a business combination, where we might merge with or be acquired by another company; a reverse merger, where a private company merges with us to become public without going through the traditional initial public offering process; or outright sale of the company.
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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.
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Each option is being carefully evaluated to ensure it aligns with our overarching goal of sustainable growth and value creation. Our strategy for growth is twofold: (i) we aim to grow organically by expanding our market presence and increasing adoption of our products and services, and (ii) we are actively seeking inorganic growth opportunities through strategic partnerships or acquisitions.
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During the year ended December 31, 2025, we earned approximately 544 TAO through staking, representing approximately $186,000 in revenue. Staking yields are variable and depend on several factors, including validator performance, total network stake, and the dynamics of the specific subnets to which our TAO is delegated.
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Specifically, we are interested in early-stage technology companies that are not just innovating but have also developed minimum viable products (MVPs) that have gained some measure of market acceptance. These companies may complement our existing offerings but could also open new avenues for expansion by tapping into significant market opportunities.
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The Bittensor protocol does not impose lock-up periods or unbonding delays; as of December 31, 2025, all of our staked TAO could be unstaked and transferred without protocol-enforced waiting periods. We do not currently engage in direct subnet mining or validation but may explore such activities in the future.
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In our quest to find the right partners or acquisition targets, we are particularly focused on ventures that have demonstrated their ability to innovate and capture the early-stage interest of their target markets. These ventures indicate a clear path to scalability and a substantial market presence.
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In February 2025, the Bittensor network implemented an upgrade known as Dynamic TAO (“dTAO”), which changed how staking rewards flow through the network. Prior to dTAO, stakers received a share of rewards based on their overall network delegation. Under dTAO, staking is directed into specific subnets, where TAO is exchanged for that subnet’s internal token (“alpha”).
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However, it's important to note that while we are committed to this strategic review process, there is no guaranteed outcome. The process of identifying and executing the right strategic alternative, whether it be a merger, sale, or business combination, is complex and uncertain.
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Rewards flow to stakers within each subnet based on their alpha holdings, and exiting a subnet position converts alpha back to TAO at prevailing market rates.
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We want our shareholders to understand that, despite our best efforts, there is no assurance that this strategic review will culminate in a definitive transaction involving the Company. Our priority remains clear: to explore every avenue that could potentially enhance the value we deliver to our shareholders and ensure the long-term success of our Company.
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This means our staking returns are now influenced by which subnets we stake into and how those subnets perform relative to the broader network, adding a layer of variability that did not exist before the upgrade. See “Item 1A. Risk Factors” for further discussion of risks related to dTAO.
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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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe market price for our common stock may be influenced by many factors, including the following: • conversions of Series F Preferred Stock into common stock and the subsequent sales of common stock; • investor reaction to our business strategy; • the success of competitive products or technologies; • our ability to comply with the continued listing standards of the Nasdaq Capital Market; • regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our products; • variations in our financial results or those of companies that are perceived to be similar to us; • our ability or inability to raise additional capital and the terms on which we raise it; • declines in the market prices of stocks generally; • the trading volume of our common stock; • conversions of Series F Preferred Stock into common stock and the subsequent sales of common stock; • sales of our common stock by us or our stockholders; • general economic, industry, and market conditions; • the transformation of our business to deliver more software and subscription offerings where revenue is recognized over time; • fluctuations in demand for our products and services, especially with respect to distributors and partners, in part due to changes in the global economic environment; • the introduction and market acceptance of new technologies and products, and our success in new evolving markets and in emerging technologies, as well as the adoption of new standards; • the ability of our customers, channel partners, contract manufacturers, and suppliers to obtain financing or to fund capital expenditures, especially during a period of global credit market disruption or in the event of a customer, channel partner, contract manufacturer, or supplier financial problem; • the overall movement toward industry consolidation among both our competitors and our customers; • changes in sales and implementation cycles for our products and reduced visibility into our customers’ spending plans and associated revenue; • the timing, size, and mix of orders from customers; • manufacturing and customer lead times; • how well we execute our strategy and operating plans and the impact of changes in our business model that could result in significant restructuring charges; • our ability to achieve targeted cost reductions; • benefits anticipated from our investments; • changes in tax law or accounting rules, or interpretations thereof; • actual events, circumstances, outcomes, and amounts differing from judgments, assumptions, and estimates used in determining the values of certain assets (including the amounts of related valuation allowances), liabilities, and other items reflected in our Consolidated Financial Statements; • other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, such as the outbreak of COVID-19, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our suppliers or result in political or economic instability; and • the failure of any bank and the resulting economic uncertainty caused by such failures.
Biggest changeThe market price for our common stock may be influenced by many factors, including the following: • investor reaction to our business strategy; • the success of competitive products or technologies; • our ability to comply with the continued listing standards of the Nasdaq Capital Market; • regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our products; • variations in our financial results or those of companies that are perceived to be similar to us; • our ability or inability to raise additional capital and the terms on which we raise it; • declines in the market prices of stocks generally; • the trading volume of our common stock; • conversions of Series F Preferred Stock into common stock and the subsequent sales of common stock; • sales of our common stock by us or our stockholders; • general economic, industry, and market conditions; • fluctuations in demand for our services in part due to changes in the global economic environment; • the overall movement toward industry consolidation among both our competitors and our customers; • changes in sales and implementation cycles for our services and reduced visibility into our customers’ spending plans and associated revenue; • the timing, size, and mix of orders from customers; • how well we execute our strategy and operating plans, and the impact of changes in our business model that could result in significant restructuring charges; • our ability to achieve targeted cost reductions; • benefits anticipated from our investments; • changes in tax law or accounting rules, or interpretations thereof; • actual events, circumstances, outcomes, and amounts differing from judgments, assumptions, and estimates used in determining the values of certain assets, liabilities, and other items reflected in our Consolidated Financial Statements; • other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, such as the outbreak of COVID-19, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations, disrupt the operations of our suppliers or result in political or economic instability; and • the failure of any bank and the resulting economic uncertainty it causes.
In the future, we may not be able to achieve revenue growth or profitability or generate positive cash flow on a quarterly or annual basis. If we do not achieve profitability in the future, the value of our common stock may be adversely impacted, and we could have difficulty obtaining capital to continue our operations.
In the future, we may not be able to achieve revenue growth, profitability, or generate positive cash flow on a quarterly or annual basis. If we do not achieve profitability in the future, the value of our common stock may be adversely impacted, and we could have difficulty obtaining capital to continue our operations.
A customer may take actions that affect the Company for reasons that we cannot anticipate or control, such as reasons related to the customer’s financial condition, changes in the customer’s business strategy or operations, changes in technology, and the introduction of alternative competing products, or as the result of the perceived quality or cost-effectiveness of our products or services.
A customer may take actions that affect the Company for reasons that we cannot anticipate or control, such as reasons related to the customer’s financial condition, changes in the customer’s business strategy or operations, changes in technology, and the introduction of alternative competing products, or as a result of the perceived quality or cost-effectiveness of our products or services.
These factors, as well as general economic and political conditions and the announcement of proposed and completed acquisitions or other significant transactions, or any difficulties associated with such transactions, by us or our current or potential competitors, may materially adversely affect the market price of our common stock in the future.
These factors, as well as general economic and political conditions and the announcement of proposed and completed acquisitions or other significant transactions, or any difficulties associated with such transactions, by our current or potential competitors or us, may materially adversely affect the market price of our common stock in the future.
Vendors of services, like us, are typically held responsible by taxing authorities for the collection and payment of any applicable sales taxes and federal fees. If one or more taxing authorities determine that taxes should have, but have not, been paid with respect to our services, we may be liable for past taxes in addition to taxes going forward.
Vendors of services, like us, are typically held responsible by taxing authorities for the collection and payment of any applicable sales taxes and federal fees. If one or more taxing authorities determine that taxes should have been paid but were not with respect to our services, we may be liable for past taxes in addition to taxes going forward.
We do not currently believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act. Although we are exploring strategic alternatives, we intend to conduct our operations so that we will not be deemed an investment company.
We do not currently believe that we are an “investment company,” as such term is defined in either of those sections of the 1940 Act. Although we are exploring strategic alternatives, we intend to conduct our operations so as not to be deemed an investment company.
Any future disposition of assets and business could have material and adverse effects on business, financial conditions, and operations if not consummated in a timely manner. As part of our corporate strategy, our management considers and evaluates opportunities involving dispositions of assets and business.
Any future disposition of assets and business could have material and adverse effects on business, financial conditions, and operations if not consummated in a timely manner. As part of our corporate strategy, our management considers and evaluates opportunities involving dispositions of assets and businesses.
As a result of one or more of these factors, we may increase our hiring in geographic areas outside the United States, which could subject us to additional geopolitical and exchange rate risk.
As a result of one or more of these factors, we may increase hiring in geographic areas outside the United States, which could subject us to additional geopolitical and exchange-rate risk.
Our success depends upon our ability to implement, expand, and adapt our network infrastructure and support services to accommodate an increasing amount of video traffic and evolving customer requirements at an acceptable cost. This has required and will continue to require that we enter into agreements with providers of infrastructure capacity, equipment, facilities, and support services on an ongoing basis.
Our success depends on our ability to implement, expand, and adapt our network infrastructure and support services to accommodate increasing video traffic and evolving customer requirements at an acceptable cost. This has required and will continue to require that we enter into agreements with providers of infrastructure capacity, equipment, facilities, and support services on an ongoing basis.
If our customers were to experience losses due to a failure of a depository institution to return their deposits, it could expose us to an increased risk of nonpayment under our contracts with them. In addition, our customers may seek to renegotiate the terms of current agreements or renewals, and/or our customers may choose not to renew our services.
If our customers were to experience losses due to a depository institution's failure to return their deposits, it could expose us to an increased risk of nonpayment under our contracts with them. In addition, our customers may seek to renegotiate the terms of current agreements or renewals, and/or choose not to renew our services.
In the past, following periods of volatility in the market, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations, and growth prospects.
Following periods of market volatility, securities class-action litigation has often been instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business, financial condition, results of operations, and growth prospects.
If we are unable to access all or a significant portion of the amounts we have deposited at financial institutions for any extended period of time, we may not be able to pay our operational expenses or make other payments until we are able to move our funds to accounts at one or more other financial institutions, which process could cause a temporary delay in making payments to our vendors and employees and cause other operational challenges. -21- Table of Contents
If we are unable to access all or a significant portion of the amounts we have deposited at financial institutions for any extended period of time, we may not be able to pay our operational expenses or make other payments until we are able to move our funds to accounts at one or more other financial institutions, which process could cause a temporary delay in making payments to our vendors and employees and cause other operational challenges.
If we are required to collect and pay back taxes and the associated interest and penalties, and if our customers fail or refuse to reimburse us for all or a portion of these amounts, we will incur unplanned expenses that may be substantial.
If we are required to collect and pay back taxes, including associated interest and penalties, and our customers fail or refuse to reimburse us for all or a portion of these amounts, we will incur unplanned expenses that may be substantial.
In the event that a material customer or customers default on their payment obligations to us, discontinue buying services from us, or use their buying power with us to reduce its revenue, this could materially adversely affect our financial condition, results of operations, or cash flows. -12- Table of Contents Failure to retain and recruit key personnel would harm our ability to meet key objectives.
In the event that a material customer or customers default on their payment obligations to us, discontinue buying services from us, or use their buying power with us to reduce their revenue, this could materially adversely affect our financial condition, results of operations, or cash flows. 10 Table of Contents Failure to retain and recruit key personnel would harm our ability to meet key objectives.
While our common stock has recently experienced increased trading volume, we cannot ensure that this level of trading volume will continue or that the increased trading volumes will lessen the historic volatility in the price of our common stock.
While our common stock has recently experienced increased trading volume, we cannot ensure that this level of trading volume will continue or that the increased trading volumes will lessen the historical volatility in the price of our common stock.
Penny stock regulations may impose certain restrictions on the marketability of our securities. The SEC has adopted regulations that generally define a “penny stock” to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.
Penny stock regulations may impose certain restrictions on the marketability of our securities. The SEC has adopted regulations that generally define a “penny stock” as any equity security with a market price of less than $5.00 per share, subject to certain exceptions.
Each state has different rules and regulations governing sales and use taxes, and these rules and regulations are subject to varying interpretations that may change over time.
Each state has different rules and regulations governing sales and use taxes, which are subject to varying interpretations that may change over time.
The products and services we sell to customers inevitably contain vulnerabilities or critical security defects that have not been remedied and cannot be disclosed without compromising security. We may also make prioritization decisions in determining which vulnerabilities or security defects to fix and the timing of these fixes, which could result in an exploit that compromises security.
The products and services we sell to customers inevitably contain vulnerabilities or critical security defects that have not been remedied and cannot be disclosed without compromising security. We may also make prioritization decisions about which vulnerabilities or security defects to fix and the timing of those fixes, which could result in an exploit that compromises security.
The Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024, have been prepared assuming that the Company will continue as a going concern. We have experienced revenue declines in recent fiscal years and incurred net losses.
The Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025, have been prepared on the assumption that the Company will continue as a going concern. We have experienced revenue declines in recent fiscal years and incurred net losses.
Finally, monthly statements must be sent disclosing recent price information for the “penny stock” held in the account and information on the limited market in “penny stocks.” Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our securities and may negatively affect the ability of purchasers of our shares of common stock to sell such securities.
Finally, monthly statements must disclose recent price information for the “penny stock” held in the account and information on the limited market for “penny stocks.” Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our securities and may negatively affect the ability of purchasers of our shares of common stock to sell such securities.
Factors that cause fluctuation in our results of operations include a lack of revenue growth or declines in revenue, declines in gross margins, and increases in operating expenses. Accordingly, it is possible that in one or more future quarters, our operating results will be adversely affected and fall below the expectations of securities analysts and investors.
Factors that cause fluctuations in our results of operations include a lack of revenue growth, declines in revenue, declines in gross margins, and increases in operating expenses. Accordingly, it is possible that, in one or more future quarters, our operating results will be adversely affected and fall short of the expectations of securities analysts and investors.
In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market price of many technology companies, in particular, and that have often been unrelated to the operating performance of these companies.
In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market prices of many technology companies, in particular, and that have often been unrelated to their operating performance.
We cannot ensure that any of these agreements can be obtained on satisfactory terms and conditions. We also anticipate that future expansions and adaptations of our network infrastructure facilities may be necessary in order to respond to growth in the number of customers served. In addition, we utilize third-party vendors of network connectivity related to our network services business.
We cannot ensure that any of these agreements can be obtained on satisfactory terms and conditions. We also anticipate that future expansions and adaptations of our network infrastructure facilities may be necessary to accommodate growth in the number of customers we serve. In addition, we utilize third-party vendors of network connectivity related to our network services business.
There can be no guarantee that our stock price will remain at current prices or that future sales of our common stock will not be at prices lower than those sold to investors. -18- Table of Contents Throughout much of our corporate history, our common stock has been thinly traded, and therefore has therefore been susceptible to wide price swings.
There can be no guarantee that our stock price will remain at current levels or that future sales of our common stock will not be at prices lower than those at which we sold to investors. 14 Table of Contents Throughout much of our corporate history, our common stock has been thinly traded and therefore susceptible to wide price swings.
In addition, evolving legal requirements restricting or controlling the collection, processing, or cross-border transmission of data, including regulation of cloud-based services, could materially affect our customers’ ability to use and our ability to sell our products and offers.
In addition, evolving legal requirements restricting or controlling the collection, processing, or cross-border transmission of data, including regulations governing cloud-based services, could materially affect our customers’ ability to use our products and our ability to sell them.
Moreover, the imposition of such taxes on our services going forward will effectively increase the cost of such services to our customers and may adversely affect our ability to retain existing customers or to gain new customers in the areas in which such taxes are imposed.
Moreover, the imposition of such taxes on our services going forward will effectively increase the cost of those services to our customers and may adversely affect our ability to retain existing customers or attract new customers in the areas in where such taxes are imposed.
We have undertaken measures to protect the safety and security of our inventory and our information systems, and the data maintained within those systems, and on an annual basis, we test the adequacy of our security measures.
We have undertaken measures to protect the safety and security of our inventory and information systems, as well as the data maintained within them. On an annual basis, we test the adequacy of our security measures.
While the sale of shares to the public might increase the trading volume of our common stock and, thus, the liquidity of our stockholders’ investments, the resulting increase in the number of shares available for public sale could drive the price of our common stock down, reducing the value of our stockholders’ investments and perhaps hindering our ability to raise additional funds in the future. -19- Table of Contents The issuance of the securities in the March 2023 private placement significantly diluted the ownership interest of the existing holders of our common stock, and the market price of our common stock has declined significantly as a result of sales of such securities into the public market by the private placement investors and subsequent investors or the perception that such sales may occur.
While the sale of shares to the public might increase the trading volume of our common stock and, thus, the liquidity of our stockholders’ investments, the resulting increase in the number of shares available for public sale could drive the price of our common stock down, reducing the value of our stockholders’ investments and perhaps hindering our ability to raise additional funds in the future. 15 Table of Contents The issuance of the securities in the 2023 Private Placement and the 2025 Private Placement significantly diluted the ownership interest of the existing holders of our Common Stock, and the market price of our Common Stock will likely decline significantly as a result of sales of such securities into the public market by the selling stockholders and subsequent investors or the perception that such sales may occur.
The standard form of service agreement with us includes an auto-renewal clause at the end of each term if the customer does not choose to terminate service at that time. Certain customers and partners negotiate master agreements with custom termination liabilities that differ from our standard form of service agreement.
The standard service agreement with us includes an auto-renewal clause at the end of each term, unless the customer chooses to terminate service at that time. Certain customers and partners negotiate master agreements with custom termination liabilities that differ from our standard form of service agreement.
Liability for past taxes may also include very substantial interest and penalty charges. Our customer contracts provide that our customers must pay all applicable sales taxes and fees. Nevertheless, customers may be reluctant to pay back taxes and may refuse responsibility for interest or penalties associated with those taxes.
Liability for past taxes may also include very substantial interest and penalty charges. Our customer contracts require our customers to pay all applicable sales taxes and fees. Nevertheless, customers may be reluctant to pay back taxes and may refuse to assume responsibility for any interest or penalties associated with those taxes.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on its board of directors; • the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors or a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of our board of directors, by majority vote, to amend the Company’s amended and restated bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the amended and restated bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company. -20- Table of Contents We could fail to satisfy the standards to maintain our listing on a stock exchange.
These provisions include: • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the ability of our board of directors to issue shares of preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death, or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the requirement that a special meeting of stockholders may be called only by the chairman of our board of directors or a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • the ability of our board of directors, by majority vote, to amend the Company’s amended and restated bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the amended and restated bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company. 18 Table of Contents General Risks We incur significant accounting and administrative costs as a publicly traded corporation that impact our financial condition.
Despite our implementation of security measures, there can be no assurance our safety and security measures will detect and prevent security incidents in a timely manner or otherwise prevent damage or interruption of our systems and operations or inventory theft.
Despite our implementation of security measures, there can be no assurance that they will detect and prevent security incidents in a timely manner or prevent damage or interruption to our systems and operations, or inventory theft.
We may also become subject to tax audits or similar procedures in states where we already pay sales and use taxes. The assessment of taxes, interest, and penalties as a result of audits, litigation, or otherwise could be materially adverse to our current and future results of operations and financial condition.
We may also become subject to tax audits or similar procedures in states where we already pay sales and use taxes. The assessment of taxes, interest, and penalties arising from audits, litigation, or other sources, could be materially adverse to our current and future results of operations and financial condition.
The financial covenants could limit our ability to make needed expenditures or otherwise conduct necessary or desirable business activities. -14- Table of Contents Risks Related to Cybersecurity and Regulations Cyber-attacks, data incidents, malware, or an intrusion into our physical security systems may disrupt our business operations, result in the loss of critical and confidential information, harm our operating results and financial condition, and damage our reputation; and cyber-attacks or data incidents on our customers ’ networks, or in cloud-based services provided by or enabled by us, could result in claims of liability against us, damage our reputation or otherwise harm our business.
Risks Related to Cybersecurity and Regulations Cyber-attacks, data incidents, malware, or an intrusion into our physical security systems may disrupt our business operations, result in the loss of critical and confidential information, harm our operating results and financial condition, and damage our reputation; and cyber-attacks or data incidents on our customers ’ networks, or in cloud-based services provided by or enabled by us, could result in claims of liability against us, damage our reputation or otherwise harm our business.
Customers may also not deploy a security release or decide not to upgrade to the latest versions of our products, services, or cloud-based solutions containing the release, leaving them vulnerable.
Customers may also choose not to deploy a security release or to upgrade to the latest versions of our products, services, or cloud-based solutions that include it, leaving them vulnerable.
We cannot ensure that these vendors will perform to the satisfaction of our customers, which could result in the loss of revenue. Our network depends upon telecommunications carriers who could limit or deny us access to their network or fail to perform, which would have a material adverse effect on our business.
We cannot ensure that these vendors will perform to our customers' satisfaction, which could result in lost revenue. Our network depends on telecommunications carriers, and they may limit or deny us access to their network or fail to perform, which would have a material adverse effect on our business.
Efforts to limit the ability of malicious actors to disrupt the operations of the Internet or undermine our own security efforts may be costly to implement and meet with resistance and may not be successful.
Efforts to limit malicious actors' ability disrupt the operations of the Internet or undermine our security may be costly to implement, meet resistance, and fail.
Customers also need to test security releases before they can be deployed, which can delay implementation. In addition, we rely on third-party providers of software and cloud-based services, and we cannot control the rate at which they remedy vulnerabilities.
Customers also need to test security releases before deployment, which can delay implementation. In addition, we rely on third-party software and cloud-based service providers, and we cannot control the pace at which they remediate vulnerabilities.
In particular, changes in telecommunications regulations could impact our service provider customers’ purchase of our products and offers, and they could also impact sales of our own regulated offers.
In particular, changes in telecommunications regulations could affect our service provider customers’ purchase of our products and offers, as well as sales of our own regulated offers.
In the event that we again become non-compliant with Rule 5550(a)(2) or other continued listing requirements of Nasdaq and cannot re-establish compliance within the required timeframe, our Common Stock could be delisted from The Nasdaq Capital Market, which could have a material adverse effect on our financial condition and which may cause the value of our Common Stock to decline.
In the event that we are unable to maintain compliance with the continued listing requirements and cannot re-establish compliance within the required timeframe, our Common Stock could be delisted from The Nasdaq Capital Market, which could have a material adverse effect on our financial condition, and which would cause the value of our Common Stock to decline.
In the ordinary course of providing video communications services, we transmit sensitive and proprietary information of our customers. We are dependent on the proper function, availability, and security of our information systems, including, without limitation, those systems utilized in our operations.
In the ordinary course of providing video communications services, we transmit sensitive and proprietary customer information. We depend on the proper functioning, availability, and security of our information systems, including, without limitation, those systems used in our operations.
While the private placement investors may experience a positive rate of return based on the trading price of our securities, the existing holders of our common stock may not experience a similar rate of return on the shares of common stock they purchased due to differences in the applicable purchase price and trading price.
While the selling stockholders may realize a positive rate of return based on the trading price of our securities, the existing holders of our Common Stock may not realize a similar rate of return on the shares of Common Stock they purchased due to differences between the purchase price and the trading price.
Such transactions may expose us to unknown or unforeseeable challenges resulting in disruption of business operations, loss of key personnel and ongoing tax benefits treatment, failure to obtain necessary statutory and regulatory approvals, provide ongoing indemnity, and compliance with post-closing obligations, which may affect or prevent us from consummating the transactions, and have a material and adverse effect on our business, financial conditions, and operations.
Such transactions may expose us to unknown or unforeseeable challenges resulting in disruption of business operations, loss of key personnel and ongoing tax benefits treatment, failure to obtain necessary statutory and regulatory approvals, provide ongoing indemnity, and compliance with post-closing obligations, which may affect or prevent us from consummating the transactions, and have a material and adverse effect on our business, financial conditions, and operations. 9 Table of Contents We rely on a limited number of customers for a significant portion of our revenue, and the loss of any one of those customers, or several of our smaller customers, could materially harm our business.
Vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services, or solutions could result in claims of liability against us, damage our reputation or otherwise harm our business.
Cybersecurity incidents in our customers’ networks or in cloud-based services provided by or enabled by us, whether attributable to a vulnerability in our products or services, could result in claims of liability against us, damage our reputation, or otherwise harm our business. 12 Table of Contents Vulnerabilities and critical security defects, prioritization decisions regarding remedying vulnerabilities or security defects, failure of third-party providers to remedy vulnerabilities or security defects, or customers not deploying security releases or deciding not to upgrade products, services, or solutions could result in claims of liability against us, damage our reputation, or otherwise harm our business.
We believe that our existing cash and cash equivalents will be sufficient to fund our operations and meet our working capital requirements for at least the next 12 months from the filing date of this Report with the SEC.
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.
During the year ended December 31, 2024, the Company received net proceeds of $2,381,000 from the exercise of common and preferred warrants. To access capital to fund operations or provide growth capital, we will need to raise capital from the exercise of outstanding common and/or preferred warrants, and/or in one or more debt and/or equity offerings.
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.
The loss of or a reduction in sales or anticipated sales to our most significant or several of our smaller customers could have a material adverse effect on our business, financial condition, and results of operations. Any system failures or interruptions may cause a loss of customers.
A loss of, or a reduction in, sales or anticipated sales to our most significant or several of our smaller customers, could have a material adverse effect on our business, financial condition, and results of operations. We depend on our network providers and facilities infrastructure.
Historically, our common stock has experienced substantial price volatility, particularly as a result of variations between our actual financial results and the published expectations of analysts and as a result of announcements by our competitors and us.
Historically, our common stock has experienced substantial price volatility, particularly due to differences between our actual financial results and analysts' published expectations, as well as announcements by us and our competitors.
Additionally, recently, securities of certain companies have experienced significant and extreme volatility in stock price due to short sellers of shares of common stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and in the market and have led to the price per share of those companies to trade at a significantly inflated rate that is disconnected from the underlying value of the company.
Additionally, in recent years, the stock prices of certain companies have experienced significant volatility due to short sellers of common stock, known as a “short squeeze.” These short squeezes have caused extreme volatility in those companies and the market, leading to their prices trading at significantly inflated levels disconnected from the companies' underlying value.
In addition, it may be difficult for us to raise additional capital if we are not listed on a national securities exchange.
In addition, it may be difficult for us to raise additional capital if we are not listed on a national securities exchange. We may be delisted from the Nasdaq if we fail to maintain a minimum market value of $5.0 million in listed securities.
The private placement investors may potentially make a significant profit with the resale of the securities depending on the trading price of our securities at the time of a sale and the purchase price of such securities by them.
The selling stockholders may make a significant profit from the resale of the securities, depending on the trading price of our securities at the time of sale and the purchase price they paid for them.
We have been able to raise capital in the past to maintain liquidity, but there can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company.
There can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital on terms acceptable to us, it could have a material adverse effect on the Company.
We may experience material disconnections and/or reductions in the prices of our services and may not be able to replace the loss of revenues. Historically, we have experienced both significant disconnections of services and also reductions in the prices of our services. We endeavor to obtain long-term commitments from new customers, as well as expand our relationships with current customers.
Historically, we have experienced both significant service disruptions and reductions in the prices of our services. We endeavor to secure long-term commitments from new customers and expand our relationships with current customers.
Our ability to comply with these covenants may be adversely affected by events beyond our control, and we cannot assure you that we can maintain compliance with these covenants.
Our ability to comply with these covenants may be adversely affected by events beyond our control, and we cannot assure you that we be able to maintain compliance. The financial covenants could limit our ability to make needed expenditures or otherwise conduct necessary or desirable business activities.
In addition, companies in our industry whose employees accept positions with competitors frequently claim that competitors have engaged in improper hiring practices. We have received these claims in the past and may receive additional claims to this effect in the future.
In addition, companies in our industry whose employees accept positions with competitors frequently claim that competitors have engaged in improper hiring practices.
Risks Related to Our Business Our Company experienced declines in revenue in recent fiscal years and may continue to experience further revenue decline in future periods. In recent fiscal years, our Company has faced a troubling trend of decreasing revenue, a situation that may not only persist but potentially worsen in the future.
In recent fiscal years, our Company has faced a troubling trend of decreasing revenue, a situation that may not only persist but potentially worsen in the future. Specifically, our Mezzanine™ and Managed Services revenue has suffered due to significant customer losses and a decline in demand for our offerings.
Should our sales continue to decline or if we are unsuccessful at increasing prices to cover higher expenditures for internal controls and audits, our costs associated with regulatory compliance will rise as a percentage of sales. Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.
Some of our competitors are privately owned, so their comparatively lower accounting and administrative costs can be a competitive disadvantage for us. Should our sales continue to decline, or if we are unsuccessful at increasing prices to cover higher expenditures for internal controls and audits, our costs associated with regulatory compliance will rise as a percentage of sales.
For the year ended December 31, 2024, one major customer accounted for 84.9% of the Company’s total consolidated revenue. The composition of our significant customers will vary from period to period, and we expect that most of our revenue will continue, for the foreseeable future, to come from a relatively small number of customers.
The composition of our significant customers will vary from period to period, and we expect that most of our revenue will continue, for the foreseeable future, to come from a relatively small number of customers. Consequently, our financial results may fluctuate significantly from period to period based on the actions of one or more significant customers.
Our existing holders of common stock have been significantly diluted by the issuance of the securities in the March 31, 2023 private placement.
Our existing holders of Common Stock have been significantly diluted by the issuance of the securities in the 2023 Private Placement and would be subject to additional dilution as a result of the conversion of those securities and the securities issued in the 2025 Private Placement into shares of Common Stock.
If we are unable to successfully address the challenges of integrating offerings based upon open-source technology into our business; our business and operating results may be adversely affected, and our development costs may increase. -17- Table of Contents Risks to Owning Our Common Stock Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our common stock could incur substantial losses.
Changes in regulatory requirements in these areas could have a material adverse effect on our business, operating results, and financial condition. 13 Table of Contents Risks to Owning Our Common Stock Our stock price has fluctuated in the past, has recently been volatile, and may be volatile in the future, and as a result, investors in our common stock could incur substantial losses.
Our public float was significantly increased and the market price of our common stock has declined significantly as a result of subsequent sales of the shares of common stock obtained from conversions of Series F Preferred Stock issued in the private placement.
Our public float was significantly increased, and the market price of our Common Stock could decline significantly as a result of subsequent sales of the shares of Common Stock issued, or underlying the securities issued in the 2023 Private Placement and the 2025 Private Placement, which could occur at any time, or the perception that such sales may occur.
Our Common Stock is listed on The Nasdaq Capital Market. In order to maintain that listing, we must satisfy minimum financial and other continued listing requirements and standards.
Our Common Stock is listed on the Nasdaq Capital Market. To maintain that listing, we must meet the minimum financial and other continued listing requirements and standards, including but not limited to maintaining a minimum closing bid price of $1.00 per share and at least $2.5 million of stockholders’ equity.
In addition, our effective tax rate for future periods is uncertain and could be impacted by mergers and acquisitions. Risks related to new product development also apply to acquisitions. If our actual liability for sales and use taxes and federal regulatory fees is different from our accrued liability, it could have a material impact on our financial condition.
We have received these claims in the past and may receive additional claims to this effect in the future. 11 Table of Contents If our actual liability for sales and use taxes and federal regulatory fees is different from our accrued liability, it could have a material impact on our financial condition.
If regulatory requirements were to become more stringent or if controls thought to be effective later fail, we may be forced to make additional expenditures, the amounts of which could be material. Some of our competitors are privately owned, so their comparatively lower accounting and administrative costs can be a competitive disadvantage for us.
As a publicly traded corporation, we incur certain costs to comply with regulatory requirements. If regulatory requirements become more stringent or if controls previously deemed effective later fail, we may be forced to incur additional expenditures, the amounts of which could be material.
Specifically, our Managed Services revenue has suffered due to a significant loss of customers and a decrease in demand for our offerings. This downturn can be attributed to the fiercely competitive landscape of our industry, where we face intense pressure to lower prices to remain competitive.
This downturn can be attributed to the fiercely competitive landscape of our industry, where we face intense pressure to lower prices to remain competitive. We expect further declines in the future for these businesses. We have a history of substantial net operating losses and may incur future losses. We reported substantial net losses in recent years.
We rely on a limited number of customers for a significant portion of our revenue, and the loss of any one of those customers, or several of our smaller customers, could materially harm our business. A significant portion of our revenue is generated from a limited number of customers.
A significant portion of our revenue is generated from a limited number of customers. For the year ended December 31, 2025, one major customer accounted for 79% of the Company’s total consolidated revenue.
Removed
Similarly, our Mezzanine™ product offerings, designed for use in conventional settings like conference rooms and operational centers, have also experienced a marked decrease in revenue. This decline is largely a consequence of the commercial reactions to the COVID-19 pandemic and its prolonged effects.
Added
Risks Related to Digital Assets We own and may purchase additional digital assets, the prices of which have been, and will likely continue to be, highly volatile. We currently own digital assets and expect to purchase more in the future. Digital assets are generally highly volatile assets.
Removed
We believe the pandemic has fundamentally altered the way businesses consider the use of physical office spaces and, consequently, the demand for technologies that enable in-person collaboration within these spaces.
Added
In addition, digital assets do not pay interest or other returns, so the ability to generate a return on investment from the net proceeds of the June 2025 and future offerings will depend on whether their value appreciates following our purchases of digital assets with those proceeds.
Removed
Our analysis indicates that the reduced demand for our Mezzanine™ products, particularly in the aftermath of COVID-19, reflects a broader reassessment among our customers regarding the necessity and investment in collaboration solutions tailored for traditional office environments. Should this trend of reevaluation and reduced demand continue, our company faces a significant risk of further revenue decline.
Added
Future fluctuations in digital asset trading prices may result in our converting digital assets purchased into cash with a value substantially below the purchase price. If any of the digital assets that we hold are classified as a security, we may be subject to extensive regulation, which could result in significant costs or force us to cease certain operations.
Removed
This situation highlights the critical need for our Company to adapt strategically, recognizing the shifting dynamics of workplace configurations and the evolving needs of our customers in the post-pandemic era.
Added
Regulatory changes or interpretations that classify digital assets that we hold as a security under the Securities Act of 1933, as amended (the “Securities Act”), or the Investment Company Act of 1940, as amended (the “Investment Company Act”), could require us to register and comply with additional regulations. Compliance with these requirements could impose extraordinary, non-recurring expenses on our business.
Removed
Revenue growth and an increase in the market share of our current product offerings depend on the successful adoption of our Mezzanine ™ product offerings with our channel partners, which requires sufficient sales, marketing, and product development funding. Our goal is to grow revenue from an increase in adoption of our product offerings.
Added
If the costs and regulatory burdens become too great, we may be forced to modify or cease certain operations, which could be detrimental to our investors. The SEC has previously indicated that certain digital assets may be considered securities depending on their structure and use.
Removed
If we cannot successfully gain adoption of our Mezzanine™ product offerings through direct sales or our channel partners, we may not be able to grow revenue and/or increase the market share of our products. We have significantly reduced investments in product development and sales and marketing in recent years.
Added
Future developments could change the legal status of digital assets that we may hold, requiring us to comply with securities laws. If we fail to do so, we may be forced to discontinue some or all of our business activities, which could negatively impact investments in our securities.
Removed
We cannot assure you that we will have sufficient funds available to invest in sales and marketing and product development in order to achieve revenue growth. We have a history of substantial net operating losses and may incur future losses. We reported substantial net losses in recent years.
Added
If the SEC or other regulators determine that digital assets that we may hold qualify as securities, we may be required to register as an investment company under the Investment Company Act. This classification would subject us to additional periodic reporting, disclosure requirements, and regulatory compliance obligations, significantly increasing our operational costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have developed an incident management process designed to coordinate the activities to prepare to respond and recover from cybersecurity incidents, which include processes to triage, assess severity, investigate, escalate, contain, and remediate an incident, as well as to comply with potentially applicable legal obligations and mitigate any reputational damage.
Biggest changeWe have developed an incident management process to coordinate activities for preparing to respond to and recover from cybersecurity incidents, including triage, severity assessment, investigation, escalation, containment, and remediation, as well as compliance with applicable legal obligations and mitigation of reputational damage.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have a multilayered framework for detecting and responding to reasonably foreseeable cybersecurity risks and threats. To protect our information technology (“IT”) systems from cybersecurity threats, we use various tools that help prevent, detect, escalate, investigate , resolve, and recover from identified vulnerabilities and security incidents in a timely manner.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have a multilayered framework for detecting and responding to reasonably foreseeable cybersecurity risks and threats. To protect our information technology (“IT”) systems from cybersecurity threats, we use various tools to prevent, detect, escalate, investigate, resolve, and recover from identified vulnerabilities and security incidents in a timely manner.
The Audit Committee oversees the processes over internal controls and financial reporting, including controls and procedures that are designed to ensure that significant cybersecurity incidents are communicated to both senior management and the Audit Committee.
The Audit Committee oversees internal controls and financial reporting, including controls and procedures that are designed to ensure that significant cybersecurity incidents are communicated to both senior management and the Audit Committee.
We leverage technical safeguards intended to protect the Company’s information systems from cybersecurity threats, including firewalls, threat monitoring, intrusion prevention and detection systems, anti-malware, access controls, privilege management, asset and endpoint management, and ongoing system security assessments. We oversee third -party service providers by conducting vendor diligence and reviews on a regular basis.
We leverage technical safeguards intended to protect the Company’s information systems from cybersecurity threats, including firewalls, threat monitoring, intrusion prevention and detection systems, anti-malware, access controls, privilege management, asset and endpoint management, and ongoing system security assessments. We oversee third-party service providers through regular vendor diligence and reviews.
In the event of a material change to our systems or operations, we would assess the internal and external threats to the security, confidentiality, integrity, and availability of our data and systems, along with other material risks to our operations.
In the event of a material change to our systems or operations, we would assess the internal and external threats to the security, confidentiality, integrity, and availability of our data and systems, as well as other material risks to our operations.
Our business strategy, results of operations, and financial condition have not been materially affected as a result of previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or any future material incidents.
Our business strategy, results of operations, and financial condition have not been materially affected by previously identified cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks or by any future material incidents. For more information on our cybersecurity-related risks, see “Item 1A, Risk Factors” in this Annual Report.
For more information on our cybersecurity-related risks, see “Item 1A, Risk Factors” in this Annual Report. Governance Oblong’s Director of IT is responsible for assessing and managing cybersecurity risks. It has extensive experience focused on increasing the organization's resilience to security threats and staying current on new developments by monitoring the cybersecurity landscape.
Governance TaoWeave's Director of IT is responsible for assessing and managing cybersecurity risks. It has extensive experience focused on increasing the organization's resilience to security threats and staying current on new developments by monitoring the cybersecurity landscape.
The team monitors Oblong’s IT environment for potential security threats, investigating and acting on security events to minimize potential risks to the environment. Oblong’s Audit Committee engages in oversight of Oblong's cybersecurity risks and receives regular updates from management on technology and security updates and Oblong’s assessment of cybersecurity threats and mitigation plans.
The team monitors TaoWeave's IT environment for potential security threats, investigating and responding to security events to minimize risk. 19 Table of Contents TaoWeave's Audit Committee oversees TaoWeave's cybersecurity risks and receives regular updates from management on technology and security developments, as well as TaoWeave's assessment of cybersecurity threats and mitigation plans.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We currently lease warehouse space in a facility in Denver, CO, to store our inventory. With the exception of the warehouse space just described, we currently operate out of remote employment sites with a remote office located at 110 16th Street, Suite 1400-1024, Denver, CO 80202.
Biggest changeItem 2. Properties We currently lease warehouse space in a facility in Denver, CO, to store our inventory. With the exception of the warehouse space just described, we currently operate from remote employment sites and have a remote office at 110 16th Street, Suite 1400-1024, Denver, CO 80202.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including proceedings for which we have insurance coverage.
Biggest changeItem 3. Legal Proceedings From time to time, we are subject to various legal proceedings arising in the ordinary course of business, including those covered by insurance.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of March 14, 2025, 1,154,926 shares of our common stock were issued and outstanding. As of March 14, 2025, there were 183 holders of record of our common stock. Equiniti is the transfer agent and registrar of our common stock.
Biggest changeAs of March 19, 2026, 3,327,210 shares of our common stock were issued and outstanding. As of March 19, 2026, there were 185 holders of record of our common stock. Equiniti is the transfer agent and registrar of our common stock.
Our board of directors will make any future determination of the payment of dividends based on conditions then existing, including our earnings, financial condition, and capital requirements, as well as such economic and other conditions as our board of directors may deem relevant.
Our board of directors will make any future determination regarding the payment of dividends based on conditions then existing, including our earnings, financial condition, and capital requirements, as well as such economic and other conditions as our board of directors may deem relevant.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Market Information The Company’s common stock trades on the Nasdaq Capital Market under the symbol “OBLG.” As reported on the Nasdaq Capital Market, the closing sale price of our common stock was $3.35 per share on March 14, 2025.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Market Information The Company’s common stock trades on the Nasdaq Capital Market under the symbol “TWAV.” As reported on the Nasdaq Capital Market, the closing sale price of our common stock was $1.33 per share on March 19, 2026.
Added
Purchases of Equity Securities by the Issuer 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 Company did not repurchase any shares of its common stock during the quarter ended December 31, 2025.
Added
As of December 31, 2025, $500,000 remained available for repurchase under the Stock Repurchase Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAs part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the year ended December 31, 2024, we updated certain segment information in 2024 and recast certain prior period segment information from 2023 in order to conform with our current period segment presentation. -24- Table of Contents 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 years ended December 31, 2024, and 2023 (in thousands): For the Years Ended December 31, 2024 2023 % Change Revenue Managed Services $ 2,062 $ 2,518 (18 )% Collaboration Products 316 1,292 (76 )% Consolidated $ 2,378 $ 3,810 (38 )% Cost of revenues Managed Services $ 1,337 $ 1,671 (20 )% Collaboration Products 710 1,228 (42 )% Consolidated $ 2,047 $ 2,899 (29 )% Gross Margin Managed Services 35 % 34 % 5 % Collaboration Products (125 )% 5 % (2,617 )% Consolidated 14 % 24 % (42 )% Operating expenses Managed Services (1) $ - $ 3 (100 )% Collaboration Products (2) 341 486 (30 )% Corporate (3) 4,192 4,917 (15 )% Consolidated $ 4,533 $ 5,406 (16 )% Other income (expense), net (4) Managed Services $ (1 ) $ (10 ) 90 % Collaboration Products 16 (18 ) 189 % Corporate 154 166 (7 )% Consolidated 169 138 22 % Net loss before taxes (4,033 ) (4,357 ) (7 )% Income tax expense 10 27 (63 )% Net loss $ (4,043 ) $ (4,384 ) (8 )% As of December 31, 2024 2023 % Change Total assets Managed Services (5) $ 422 $ 613 (31 )% Collaboration Products (6) 285 822 (65 )% Corporate (7) 4,568 5,490 (17 )% Consolidated $ 5,275 $ 6,925 (24 )% (1) There were no operating expenses related to our Managed Service segment in 2024.
Biggest changeThe 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 years ended December 31, 2025, and 2024 (in thousands): For the Years Ended December 31, 2025 2024 % Change Revenue Digital Assets $ 186 $ — 100 % Managed Services 1,957 2,062 (5 )% Collaboration Products 294 316 (7 )% Consolidated $ 2,437 $ 2,378 2 % Cost of revenues Digital Assets $ 24 $ — 100 % Managed Services 1,384 1,337 4 % Collaboration Products 15 710 (98 )% Consolidated $ 1,423 $ 2,047 (30 )% Gross Margin Digital Assets $ 162 $ — 100 % Managed Services 573 725 (21 )% Collaboration Products 279 (394 ) (171 )% Consolidated $ 1,014 $ 331 206 % Operating expenses Digital Assets (1) $ 209 $ — 100 % Managed Services (2) — — 0 % Collaboration Products (3) 11 341 (97 )% Corporate (4) 3,756 4,192 (10 )% Consolidated $ 3,976 $ 4,533 (12 )% Other income (expense), net Digital Assets (5) $ (3,519 ) $ — (100 )% Managed Services (6) — (1 ) (100 )% Collaboration Products (6) — 16 100 % Corporate (7) 128 154 (17 )% Consolidated (3,391 ) 169 (2107 )% Net loss before taxes (6,353 ) (4,033 ) 58 % Income tax expense 2 10 (80 )% Net loss $ (6,355 ) $ (4,043 ) 57 % As of December 31, Total assets 2025 2024 % Change Digital Assets (8) $ 5,562 $ — 100 % Managed Services (9) 401 422 (5 )% Collaboration Products (10) 258 285 (9 )% Corporate (11) 1,998 4,568 (56 )% Consolidated $ 8,219 $ 5,275 56 % 23 Table of Contents (1) Operating expenses related to our Digital Assets segment include cash and stock-based advisory fees.
Spatial input allows content to be spread across screens, spanning different walls, scalable to an arbitrary number of displays, and interact with our proprietary wand device. Mezzanine™ substantially enhances day-to-day virtual meetings with technology that accelerates decision-making, improves communication, and increases productivity.
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.
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our consolidated balance sheets as of December 31, 2024, and 2023, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years ended December 31, 2024, and 2023, and the related notes attached thereto.
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our consolidated balance sheets as of December 31, 2025, and 2024, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years ended December 31, 2025, and 2024, and the related notes attached thereto.
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™. Historically, customers have generally used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces.
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™. Historically, customers have used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces.
The costs associated with obtaining a customer contract are deferred on our consolidated balance sheet and amortized over the expected life of the customer contract. There was no deferred revenue related to Managed Services as of December 31, 2024, or December 31, 2023.
The costs associated with obtaining a customer contract are deferred on our consolidated balance sheet and amortized over the expected life of the customer contract. There was no deferred revenue recorded or recognized to Managed Services as of December 31, 2025, or December 31, 2024.
Revenue recorded at a period in time for the years ended December 31, 2024, and 2023 was $2,222,000 and $3,294,000, respectively. Off-Balance Sheet Arrangements As of December 31, 2024, and 2023, we had no off-balance sheet arrangements.
Revenue recorded at a period in time for the years ended December 31, 2025, and 2024, was $2,374,000 and $2,222,000, respectively. Off-Balance Sheet Arrangements As of December 31, 2025, and 2024, we had no off-balance sheet arrangements.
For the year ended December 31, 2023, this same customer made up 84.6% of Managed Services revenue. Collaboration Products • Customers generally use our Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces.
For the year ended December 31, 2024, this same customer made up 98% of Managed Services revenue and 85% of consolidated revenue. Collaboration Products • Customers generally use our Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces.
During the year ended December 31, 2023, the Company recorded $435,000 of revenue that was included in deferred revenue as of December 31, 2022. Revenue recorded over time for the years ended December 31, 2024, and 2023 was $156,000 and $516,000, respectively.
During the year ended December 31, 2024, the Company recorded $132,000 of revenue that was included in deferred revenue as of December 31, 2023. Revenue recorded over time for the years ended December 31, 2025, and 2024, was $63,000 and $156,000, respectively.
(3) Corporate operating expenses include costs that are not specific to a particular segment but are general to the group. These include expenses for administrative, information technology, and accounting staff, general liability and other insurance, professional fees, and similar corporate expenses. (4) Other income (expense) for our segments includes interest expense and non-operating income.
(4) Corporate operating expenses include costs that are not specific to a particular segment but are general to the group. These include expenses for administrative, information technology, and accounting staff; general liability and other insurance; professional fees; and similar corporate expenses. (5) Other expense for our Digital Assets segment includes unrealized losses from revaluations of our digital assets.
Revenue for these services is recognized ratably over the service period. Deferred revenue, as of December 31, 2024, totaled $36,000 as certain performance obligations were not satisfied as of this date. During the year ended December 31, 2024, the Company recorded $132,000 of revenue that was included in deferred revenue as of December 31, 2023.
Revenue from maintenance services is recognized over time. Deferred revenue, as of December 31, 2025, totaled $13,000 as certain performance obligations were not satisfied as of this date. During the year ended December 31, 2025, the Company recorded $36,000 of revenue that was included in deferred revenue as of December 31, 2024.
Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings for our Collaboration Products segment. The year-over-year increase in research and development expenses for 2024 compared to 2023 is primarily attributable to the development of features and enhancements to our Mezzanine™ product offerings.
Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings for our Collaboration Products segment. The year-over-year decrease in research and development expenses in 2025 relative to 2024 is primarily attributable to lower consulting and outsourced labor costs.
Net cash provided by financing activities for 2024 was $2,381,000 attributable to the exercise of warrants, and the net cash provided by financing activities for 2023 was $5,898,000 attributable to a private placement resulting in net proceeds of $5,364,000 and warrant exercises resulting in net proceeds of (see Note 5 - Capital Stock and Note 6 - Preferred Stock to our Consolidated Financial Statements).
Net cash provided by financing activities for 2025 was $9,043,000, consisting of net proceeds from the 2025 Private Placement and warrant exercises. Net cash provided by financing activities for 2024 was $2,381,000, consisting of net proceeds from warrant exercises (see Note 5 - Capital Stock and Note 6 - Preferred Stock to our Consolidated Financial Statements).
During the year ended December 31, 2024, the Company received net proceeds of $2,381,000 from the exercise of common and preferred warrants. To access capital to fund operations or provide growth capital, we will need to raise capital from the exercise of outstanding common and/or preferred warrants, and/or in one or more debt and/or equity offerings.
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.
General and administrative expenses include primarily direct corporate expenses related to costs of personnel in the various corporate support categories, including executive, legal, finance and accounting, human resources and information technology.
General and Administrative . General and administrative expenses primarily include direct corporate expenses for personnel across the following corporate support categories: executive, legal, finance and accounting, human resources, and information technology.
Depreciation and Amortization . The year-over-year decrease in depreciation and amortization expenses is attributable to the disposition and impairment of certain assets during 2023. Loss from Operations. The year-over-year decrease in the Company’s loss from operations is mainly attributable to the reduction in impairment charges and other operating expenses, as addressed above. Interest and Other Income, Net .
The year-over-year decrease in the Company’s loss from operations is mainly attributable to the reduction in operating expenses, as addressed above, and the introduction of our Digital Assets segment. Other (Expense) Income, Net .
We recorded an income tax expense of $10,000 in 2024, compared to $27,000 in 2023 (see Note 11 - Income Taxes to our Consolidated Financial Statements). -28- Table of Contents Liquidity and Capital Resources As of December 31, 2024, we had $4,965,000 of cash and cash equivalents and $3,997,000 of working capital.
We recorded income tax expense of $2,000 in 2025, compared to $10,000 in 2024 (see Note 11 - Income Taxes to our Consolidated Financial Statements). 26 Table of Contents Liquidity and Capital Resources As of December 31, 2025, we had $2,258,000 in cash and cash equivalents, $5,395,000 in digital asset balances, and $7,029,000 in working capital.
Our network services are offered to our customers on a subscription basis. Revenue for these services is generally recognized on a monthly basis as services are performed. Revenue related to professional services is recognized at the time the services are performed.
The Company’s managed videoconferencing services are offered to our customers on either a usage- or subscription-based model. Our network services are offered to our customers on a subscription basis. Revenue for these services is generally recognized on a monthly basis as services are performed. Revenue from professional services is recognized when the services are performed.
There were no research and development costs for our Managed Services segment for 2024 or 2023. Sales and Marketing . The year-over-year decrease in sales and marketing expenses for our Collaboration Products segment in 2024 compared to 2023 is primarily attributable to lower personnel costs due to reduced headcount and reduced office expenses year-over-year related to leases exited during 2023.
The year-over-year decrease in sales and marketing expenses for our Collaboration Products segment in 2025 compared to 2024 is primarily attributable to lower personnel costs, driven by our headcount reduction in September 2024. There were no sales and marketing expenses for our Managed Services segment in 2025 or 2024, and there were none for our Digital Assets segment in 2025.
The Company recognizes revenue using the five-step model as prescribed by Topic 606: • Identification of the contract, or contracts, with a customer; • Identification of the distinct performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies a performance obligation. -29- Table of Contents The Company’s managed videoconferencing services are offered to our customers on either a usage basis or on a subscription basis.
The Company recognizes revenue using the five-step model as prescribed by Topic 606: • Identification of the contract, or contracts, with a customer; • Identification of the distinct performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies a performance obligation. 27 Table of Contents The Company had staked $5,395,000 of digital assets as of December 31, 2025.
We have been able to raise capital in the past to maintain liquidity, but there can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company.
There can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital on terms acceptable to us, it could have a material adverse effect on the Company.
Cost of revenue by segment is presented in the following table (in thousands): Year Ended December 31, 2024 2023 Cost of Revenue Managed Services $ 1,337 $ 1,671 Collaboration Products 710 1,228 Total cost of revenue $ 2,047 $ 2,899 Managed Services The cost of revenue for our Managed Services segment remained steady year over year.
Cost of revenue by segment is presented in the following table (in thousands): Year Ended December 31, 2025 2024 Cost of Revenue Digital Assets $ 24 $ — Managed Services 1,384 1,337 Collaboration Products 15 710 Total cost of revenue $ 1,423 $ 2,047 Digital Assets Our Digital Assets segment recorded a gross profit percentage of 87% in 2025.
During the year ended December 31, 2023, the Company recorded $1,000 of revenue that was included in deferred revenue as of December 31, 2022. The Company’s visual collaboration products are composed of hardware and embedded software sold as a complete package and generally include installation and maintenance services. Revenue for hardware and software is recognized upon shipment to the customer.
The Company’s visual collaboration products are composed of hardware and embedded software sold as a complete package and generally include installation and maintenance services. Revenue for hardware and software is recognized upon shipment to the customer. Installation revenue is recognized upon completion of the installation, triggering recognition of revenue for maintenance services, ranging from one to three years.
The discussion of results, causes, and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future. Business We are a provider of patented multi-stream collaboration products and managed services for network solutions and video collaboration.
The discussion of results, causes, and trends should not be construed to imply any conclusion that such results or trends will necessarily continue in the future. Business We are a digital asset treasury company dedicated exclusively to Bittensor, a decentralized blockchain network for artificial intelligence ("AI") development and machine learning.
Critical Accounting Policies We prepare our Consolidated Financial Statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Our significant accounting policies are described in Note 1 - Business Description and Significant Accounting Policies to our Consolidated Financial Statements attached hereto.
Our significant accounting policies are described in Note 1 - Business Description and Significant Accounting Policies to our Consolidated Financial Statements attached hereto. We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
As of December 31, 2024, the Company has recorded a full reserve against our inventory on hand, resulting in zero net inventory. Consolidated The year-over-year decrease in the cost of revenue is mainly due to lower costs associated with the revenue decrease during the same period and reduced personnel expenses related to cost-cutting measures.
As of December 31, 2024, the Company recorded a full reserve against our inventory on hand, resulting in zero net inventory. 25 Table of Contents Consolidated The year-over-year decrease in the cost of revenue is mainly attributable to lower costs in our Collaboration Products segment. The Company’s consolidated gross profit percentage was 42% in 2025 compared to 14% in 2024.
The Company currently operates in two segments: (1) “Collaboration Products,” which represents the business surrounding our Mezzanine™ product offerings, and (2) “Managed Services,” which represents the business surrounding managed services for network solutions and video collaboration. -23- Table of Contents Mezzanine ™ Product Offerings Our product is called Mezzanine™, a family of turn-key products that enable dynamic and immersive visual collaboration across multi-users, multi-screens, multi-devices, and multi-locations.
Mezzanine ™ Product Offerings 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.
Network services are offered to our customers on a subscription basis. Our network services business carries variable costs associated with the purchasing and reselling of this connectivity.
Network services are offered to our customers on a subscription basis. Our network services business incurs variable costs for purchasing and reselling this connectivity. Managed Services for Video Collaboration 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.
Interest and other income, net in 2024 and 2023, primarily comprised of interest income related to our cash accounts. Income Tax Expense.
Other expense, net for 2025, is primarily comprised of unrealized losses on the revaluation of our digital assets, slightly offset by interest income related to our cash accounts. Other income, net for 2024, is primarily comprised of interest income related to our cash accounts. Income Tax Expense.
Results of Operations Year Ended December 31, 2024 ( “ 2024 ” ) versus Year Ended December 31, 2023 ( “ 2023 ” ) Segment Reporting The Company currently operates in two segments for purposes of segment reporting: (1) “Collaboration Products,” which represents the Oblong Industries business surrounding our Mezzanine™ product offerings, and (2) “Managed Services,” which represents the Oblong (formerly Glowpoint) business surrounding managed services for network solutions and video collaboration.
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. 22 Table of Contents Results of Operations Year Ended December 31, 2025 ( “ 2025 ” ) versus Year Ended December 31, 2024 ( “ 2024 ” ) Segment Reporting 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.
Cost of revenue, exclusive of depreciation, amortization, and casualty gain, 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 also includes taxes, which have been billed to customers.
Managed Services for Video Collaboration We provide a range of managed services for video collaboration, from automated to orchestrated, to simplify the user experience in an effort to drive the adoption of video collaboration throughout our customers’ enterprise. We deliver our services through a hybrid service platform or as a service layer on top of our customers’ video infrastructure.
We deliver our services through a hybrid service platform or as a service layer on top of our customers’ video infrastructure.
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. See Note 10 - Commitments and Contingencies to our Consolidated Financial Statements for discussion regarding certain additional factors that could impact the Company’s liquidity in the future.
See Note 10 - Commitments and Contingencies to our Consolidated Financial Statements for discussion regarding certain additional factors that could impact the Company’s liquidity in the future. Critical Accounting Policies We prepare our Consolidated Financial Statements in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).
We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our Consolidated Financial Statements. Revenue Recognition The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606.
Revenue Recognition The Company accounts for revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606.
The year-over-year decrease in general and administrative expenses in 2024 compared to 2023 is mainly attributable to decreases in personnel costs due to reduced headcount, reduced office expenses related to leases exited in 2023, and reduced stock compensation expense. These reductions were partially offset by $59,000 in severance costs in 2024. Impairment Charges .
The year-over-year decrease in general and administrative expenses in 2025 compared to 2024 is mainly attributable to decreases in personnel costs resulting from our headcount reduction in September 2024 and a recovery in bad debt, partially offset by increases in professional service, stock-based expense, and insurance expense. Loss from Operations.
For the years ended December 31, 2024, and 2023, we incurred net losses of $4,043,000 and $4,384,000, respectively, and net cash used in operating activities was $3,406,200 and $2,993,000, respectively.
For the year ended December 31, 2025, we incurred a net loss of $6,355,000, and we used $3,015,000 of net cash in operating activities. Cash used in investing activities for 2025 was $8,736,000, consisting of new investments in digital assets. No cash was used in investing activities in 2024.
Operating expenses are presented in the following table (in thousands): Year Ended December 31, 2024 2023 $ Change % Change Operating expenses (gain): Research and development $ 155 $ 20 $ 135 675 % Sales and marketing 181 309 (128 ) (41 )% General and administrative 4,197 4,870 (673 ) (14 )% Impairment charges — 262 (262 ) (100 )% Casualty recovery — (400 ) 400 (100 )% Depreciation and amortization — 345 (345 ) (100 )% Total operating expenses $ 4,533 $ 5,406 $ (873 ) (16 )% -27- Table of Contents Research and Development .
Operating expenses are presented in the following table (in thousands): Year Ended December 31, 2025 2024 $ Change % Change Operating expenses: Research and development $ 10 $ 155 $ (145 ) (94 )% Sales and marketing 21 181 (160 ) (88 )% General and administrative 3,945 4,197 (252 ) (6 )% Total operating expenses $ 3,976 $ 4,533 $ (557 ) (12 )% Research and Development .
This reduction was partially offset by severance costs of $16,000 for 2024. There were no sales and marketing expenses for our Managed Services segment for 2024 or 2023. General and Administrative .
There were no research and development costs for our Managed Services segment in 2025 or 2024, and there were none for our Digital Assets segment in 2025. Sales and Marketing .
(7) Unallocated assets in Corporate include cash, prepaid expenses, and accruals that are corporate in nature and don't apply to a single segment. -25- Table of Contents Revenue. Total revenue decreased 37.6% for the year ended December 31, 2024, compared to the year ended December 31, 2023.
(9) Managed Services assets include cash equivalents, accounts receivable, and prepaid expenses. (10) Collaboration Products' assets include cash equivalents and prepaid expenses. (11) Unallocated assets in Corporate include cash and prepaid expenses that are corporate in nature and don't apply to a single segment. Revenue.
The following table summarizes the changes in components of our revenue, and the significant changes in revenue are discussed in more detail below (in thousands): Year Ended December 31, 2024 % of Revenue 2023 % of Revenue Revenue: Managed Services Network services $ 1,990 84 % $ 2,301 60 % Video collaboration 56 2 % 183 5 % Professional and other services 16 1 % 34 1 % Total Managed Services revenue $ 2,062 87 % $ 2,518 66 % Revenue: Collaboration Products Visual collaboration product offerings $ 316 13 % $ 1,291 34 % Licensing — 0 % 1 0 % Total Collaboration Products revenue $ 316 13 % $ 1,292 34 % Total consolidated revenue $ 2,378 100 % $ 3,810 100 % Managed Services • The decrease in revenue for video collaboration services is mainly attributable to lower revenue from existing customers (either from reductions in price or level of services) and loss of customers to competition. • The decrease in revenue for network services is mainly attributable to the net attrition of customers and lower demand for our services, given the competitive environment and pressure on pricing that exists in the network services business. • For the year ended December 31, 2024, one customer made up 97.9% of Managed Services revenue.
The following table summarizes the changes in components of our revenue, and the significant changes in revenue are discussed in more detail below (in thousands): Year Ended December 31, 2025 % of Revenue 2024 % of Revenue Revenue: Digital Assets Staking rewards $ 186 8 % $ — 0 % Total Digital Assets revenue $ 186 8 % $ — 0 % Revenue: Managed Services Network services $ 1,898 78 % $ 1,990 84 % Video collaboration 44 2 % 56 2 % Professional and other services 15 1 % 16 1 % Total Managed Services revenue $ 1,957 80 % $ 2,062 87 % Revenue: Collaboration Products Visual collaboration product offerings $ 294 12 % $ 316 13 % Total Collaboration Products revenue $ 294 12 % $ 316 13 % Total consolidated revenue $ 2,437 100 % $ 2,378 100 % Digital Assets • During the year ended December 31, 2025, we earned 544 TAO tokens through staking, or $186,000 in revenue. • In exchange for staking TAO on the Bittensor blockchain network, 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.
Although we cannot presently quantify the future financial impacts of this trend, such impacts will likely continue to have a material adverse impact on the Company’s consolidated financial condition, results of operations, and cash flows. Managed Services for Network We provide our customers with network solutions that ensure reliable, high-quality, and secure traffic of video, data, and internet.
Given the declines in sales, we announced end-of-life for Mezzanine™ in December 2025, and we expect to end the sale of Mezzanine™ products and maintenance after the first quarter of 2026. Managed Services for Network We provide our customers with network solutions that ensure reliable, high-quality, and secure traffic of video, data, and internet.
Removed
As discussed below, revenue declines for our Mezzanine™ products are primarily due to lower demand, largely a consequence of the commercial reactions to the COVID-19 pandemic and its prolonged effects. We believe the COVID-19 pandemic fundamentally altered the way businesses consider the use of physical office spaces and, consequently, the demand for technologies that enable in-person collaboration within these spaces.
Added
Bittensor allows individuals and organizations to contribute computational power to train, validate, and improve AI models while earning rewards through TAO, Bittensor’s native cryptocurrency. In 2025, the Company invested $8,736,000 to acquire 24,128 TAO tokens. As of December 31, 2025, the Company holds 24,665 TAO tokens.
Removed
Our analysis indicates that the reduced demand for our Mezzanine™ products, particularly in the aftermath of COVID-19 , reflects a broader reassessment among our customers regarding the necessity and investment in collaboration solutions tailored for traditional office environments. Continuation of this trend could cause further declines in our revenue for this business.
Added
The Company’s TAO holdings are all fully staked in the Bittensor network, enabling the Company to generate revenue and yield through earning staking rewards in the form of TAO tokens. The Company is also operating legacy businesses centered around our patented Mezzanine™ product line and our managed services for video collaboration and network solutions.
Removed
We provide our customers with i) managed videoconferencing, where we set up and manage customer videoconferencing, and ii) remote service management, where we provide 24/7 support and management of customer video environments.
Added
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.
Removed
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.
Added
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. 21 Table of Contents Digital Assets As a digital asset treasury company dedicated exclusively to Bittensor, a decentralized blockchain network for AI development and machine learning, the Company generates revenue and yield through earning staking rewards.
Removed
In 2023, the operating expenses for the Managed Services were primarily related to a loss on the sale of property. (2) Operating expenses related to our Collaboration Products Segment include research and development, sales and marketing, bad debt, impairment, and other miscellaneous expenses. In 2023, operating expenses also included a bad debt recovery of $52,000.
Added
Bittensor allows individuals and organizations to contribute computational power to train, validate, and improve AI models while earning rewards through TAO, Bittensor’s native cryptocurrency. We generally stake all our TAO token holdings, subject to various liquidity and operational considerations, and we review this allocation periodically.
Removed
Corporate other income includes interest income on our cash and cash equivalents. (5) Managed Services assets include cash equivalents, accounts receivable, and prepaid expenses, which are primarily current. (6) Collaboration Products' assets include cash equivalents, accounts receivable, prepaid expenses, and inventory, which are primarily current.
Added
All staking services are provided through the TAO Custodians, enabling yield generation while maintaining the highest standards of security and regulatory compliance. Through their staking services, our TAO Custodians hold and stake our TAO through their selected validators.
Removed
The year-over-year decrease in revenue for our Collaboration Products business is due to lower demand, largely a consequence of the workplace reactions to the COVID-19 pandemic and its prolonged effects. We believe the pandemic has fundamentally altered the way businesses consider the use of physical office spaces and, consequently, the demand for technologies that enable in-person collaboration within these spaces.
Added
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.
Removed
Our analysis indicates that the reduced demand for our Mezzanine™ products, particularly in the aftermath of COVID-19, reflects a broader reassessment among our customers regarding the necessity and investment in collaboration solutions tailored for traditional office environments. -26- Table of Contents Cost of Revenue (exclusive of depreciation and amortization).
Added
(2) There were no operating expenses related to our Managed Service segment in 2025 and 2024. (3) Operating expenses related to our Collaboration Products segment include non-capitalized software costs and commission expenses. During 2025, and 2024, $18,000 bad debt recovery and $2,000 bad debt expense were recorded, respectively.
Removed
In 2024, the cost of revenue was 65% of its revenue, compared to 66% in 2023. Collaboration Products As a percentage of sales, the cost of revenue for the Collaboration Products segment was 225% in 2024, compared to 95% in 2023.
Added
(6) Other income (expense) for Managed Services and Collaboration Products segments includes interest expense and non-operating income. (7) Unallocated other income in Corporate is primarily related to interest income. (8) Digital Asset assets include the fair value of the Company's digital asset holdings as of the end of the period and unamortized stock-based compensation expense.
Removed
The year-over-year increase in the cost of revenue for our Collaborations Products segment is primarily related to the larger relative charges related to obsolete inventory.
Added
Total revenue increased 2.5% for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Removed
During the year ended December 31, 2023, the Company recorded charges related to obsolete inventory of $239,000 and inventory disposals of $103,000, compared to charges related to obsolete inventory of $191,000, partially offset by severance costs of $30,000 for the year ended December 31, 2024.
Added
This award is remitted in the validator node's native token (TAO) and is referred to as a staking reward. The Company’s staking reward received from delegating to a third-party validator node is proportional to the Company's staked digital assets relative to the total staked by all delegators to that node at that time.
Removed
The Company’s consolidated gross profit as a percentage of revenue was 14% in 2024 compared to 24% in 2023. This decrease was primarily due to the decline in the gross profit percentage for our Collaboration Products segment.
Added
TAO token rewards earned from staking are calculated and distributed directly to the Company’s digital wallets by the blockchain networks as part of their consensus mechanisms. 24 Table of Contents Managed Services • The decrease in revenue for network services is mainly attributable to disconnects at certain customer locations. • The decrease in revenue from video collaboration services is mainly attributable to lower revenue from existing customers (due to price or service level reductions) and to customer losses to competitors. • For the year ended December 31, 2025, one customer accounted for 98% of Managed Services revenue and 79% of consolidated revenue.
Removed
There were no impairment charges recorded for the year ended December 31, 2024. The impairment charges in 2023 are attributable to impairment charges of $259,000 related to intangible assets in our Collaboration Products segment and related to the disposal of property for our Managed Services segment. Casualty Gain.
Added
The year-over-year decrease in revenue for our Collaboration Products business is mainly attributable to lower sales of our Mezzanine™ products, driven by lower demand. Cost of Revenue (exclusive of depreciation and amortization). Cost of revenue, exclusive of depreciation, amortization, and casualty gain, includes all internal and external costs related to the delivery of revenue.
Removed
In June 2022, the Company discovered that $533,000 of inventory related to our Collaboration Products segment had been stolen from its warehouse in the City of Industry, California. During 2023, we received recovery payments from our insurance policies of $400,000, resulting in a casualty gain of $400,000 in 2023. We do not expect any further recovery of the loss.
Added
Our cost of revenue for digital assets consists of custodian fees and advisor fees on our staked digital assets. Managed Services Our Managed Services segment recorded a gross profit percentage of 29% and 35% for 2025 and 2024, respectively. The year-over-year decrease was primarily due to the reallocation of personnel following our September 2024 headcount reduction.
Removed
Future Capital Requirements We believe that our existing cash and cash equivalents will be sufficient to fund our operations and meet our working capital requirements into mid-2026. We believe additional capital will be required in the long term to fund operations and provide growth capital, including potential strategic alternatives and investments in technology, product development, and sales and marketing.
Added
Collaboration Products Our Collaboration Products segment recorded a gross profit percentage of 95% for 2025, compared to a negative gross profit percentage of 125% for 2024. The year-over-year decrease in cost of revenue for our Collaborations Products segment is mainly attributable to lower personnel costs in 2025, driven by headcount reductions in September 2024, and a reduction in inventory-related expenses.
Removed
Installation revenue is recognized upon completion of installation, which also triggers the beginning of recognition of revenue for maintenance services, which range from one to three years. Revenue is recognized over time for maintenance services. Licensing agreements are for the Company’s core technology platform, g-speak, and are generally one year in length.
Added
Future Capital Requirements We believe our existing cash, cash equivalents, and the fair value of our TAO tokens (if converted to cash) will be sufficient to fund our operations and meet our working capital requirements for at least the next twelve months from the filing of this Report.
Added
This assessment is based on current market conditions, regulatory environment, and the Company's operational plans, all of which are subject to change. In the long term, we believe additional capital will be required to fund operations and provide growth capital, including expanding our cryptocurrency treasury.
Added
The Company’s ability to sell or transfer staked digital assets is subject to restrictions related to unbonding periods, which are based on network traffic on the respective blockchains. As of December 31, 2025, all staked digital assets could be unbonded immediately.
Added
The $186,000 in rewards generated from proprietary staking activities for the year ended December 31, 2025, was recorded as point-in-time revenue. The Company stakes its TAO directly from BitGo and Kraken custody, qualified custodians, enabling yield generation while maintaining the highest standards of security and regulatory compliance.

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