# TaoWeave, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [TaoWeave, Inc.](/companies/twav.md) (CIK 746210)
- Form: 10-Q
- Filed: 2025-05-13
- Accepted by EDGAR: May 13, 2025, 08:36 ET
- Period: 2025-03-31
- Accession: 0001437749-25-016275
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/746210/000143774925016275/oblg20250331_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/746210/000143774925016275/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $622.0k | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $249.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $3.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$691.0k | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $7.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$672.0k | us-gaap:NetIncomeLoss |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.59 | us-gaap:EarningsPerShareBasic |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$680.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $4.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $4.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $4.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $1.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $1.4m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $3.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 17,066 characters.

### Overview

We are a provider of patented multi-stream collaboration products and managed services for video collaboration and network solutions. 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 video collaboration and network solutions.

***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 (see further description of Mezzanine™ in Part I, Item 1). Mezzanine™ allows multiple people to share, control, and arrange content simultaneously, from any location, enabling all participants to see the same content in its entirety at the same time in identical formats, resulting in dramatic enhancements to both in-room and virtual videoconference presentations. Applications include video telepresence, laptop and application sharing, whiteboard sharing, and slides. Spatial input allows content to be spread across screens, spanning different walls, scalable to an arbitrary number of displays, and interaction with our proprietary wand device. Mezzanine™ substantially enhances day-to-day virtual meetings with technology that accelerates decision making, improves communication, and increases productivity. Mezzanine™ scales up to support the most immersive and commanding innovation centers; across to link labs, conference spaces, and situation rooms; and down for the smallest work groups. Mezzanine’s digital collaboration platform can be sold as delivered systems in various configurations for small teams to total immersion experiences. The family includes the 200 Series (two display screen), 300 Series (three screen), and 600 Series (six screen). We also sell maintenance and support contracts related to Mezzanine™.

Historically, customers have used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces. Sales of our Mezzanine product have been adversely affected during the last several years by the commercial response to the COVID-19 pandemic and its aftermath. Like many technology companies in recent months, we will continue to monitor and manage our costs relative to demand with the goal of growing the Company’s revenue in the future. To the extent we believe new investments in product development, marketing, or sales are warranted as a result of changes in market demand, we believe additional capital will be required to fund those efforts and our ongoing operations.

### Managed Services for Network

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

### 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 adoption of video collaboration throughout our customers’ enterprises. We deliver our services through a hybrid service platform or as a service layer on top of our customers’ video infrastructure. We provide our customers with i) managed videoconferencing, where we set up and manage customer videoconferences, and ii) remote service management, where we provide 24/7 support and management of customer video environments.

### Strategy

During the last several years, our Company has experienced declining revenues for both our Mezzanine™ product offerings and our Managed Services. 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. 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. 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. 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.

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 early-stage interest of their target markets, indicating a clear path to scalability and a substantial market presence.

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 on the right strategic alternative, whether it be a merger, sale, or business combination, is complex and uncertain. 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.

**Oblong’s Results of Operations**

**Three Months Ended March 31, 2025 (the “2025 First Quarter”) compared to the Three Months Ended March 31, 2024 (the “2024 First Quarter”)**

### 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.

In 2024, we adopted Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. As part of our adoption of ASU 2023-07 and the Chief Operating Decision Maker’s evaluation of segment performance for the 2025 First Quarter and the 2024 First Quarter, we updated certain segment information for 2025 and recast certain prior period segment information from 2024 to conform with our current period segment presentation.

The following table summarizes the key income statement components that we use to evaluate our financial performance on a consolidated and reportable segment basis for the 2025 First Quarter and the 2024 First Quarter (in thousands):

| Revenue | For the Three Months Ended March 31, 2025 | 2024 | % Change |
| --- | ---: | ---: | ---: |
| Managed Services | $508 | $522 | (3)% |
| Collaboration Products | 114 | 104 | 10% |
| Consolidated | 622 | 626 | (1)% |
| Cost of revenues |  |  |  |
| Managed Services | 371 | 369 | 1% |
| Collaboration Products | 2 | 260 | (99)% |
| Consolidated | 373 | 629 | (41)% |
| Gross Margin |  |  |  |
| Managed Services | 137 | 153 | (10)% |
| Collaboration Products | 112 | (156) | 172% |
| Consolidated | 249 | (3) | 8400% |
| Operating expenses |  |  |  |
| Managed Services (1) | — | — | —% |
| Collaboration Products (2) | (8) | 105 | (108)% |
| Corporate (3) | 948 | 1,076 | (12)% |
| Consolidated | 940 | 1,181 | (20)% |
| Other income (expense), net (4) |  |  |  |
| Managed Services | (1) | — | (100)% |
| Collaboration Products | — | — | —% |
| Corporate | 27 | 48 | (44)% |
| Consolidated | 26 | 48 | (46)% |
| Net loss before taxes | (665) | (1,136) | (41)% |
| Income tax expense | 7 | - | 100% |
| Net loss | $(672) | $(1,136) | (41)% |

(1) There were no operating expenses related to our Managed Service segment during the 2025 First Quarter or the 2024 First Quarter.

(2) Operating expenses related to our Collaboration Products Segment include research and development, sales and marketing, and other miscellaneous expenses. 2025 operating expenses also included a bad debt recovery of $18,000.

(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. Corporate other income includes interest income on our cash and cash equivalents.

-17-

*Revenue.* Total revenue decreased 1% in the 2025 First Quarter compared to the 2024 First Quarter. The following table summarizes the changes in components of our revenue (in thousands), and the significant changes in revenue are discussed in more detail below.

| Revenue: Managed Services | Three Months Ended March 31, 2025 | % of Revenue | 2024 | % of Revenue |
| --- | ---: | ---: | ---: | ---: |
| Network services | $500 | 80.4% | $503 | 80.4% |
| Video collaboration | 6 | 1.0% | 14 | 2.2% |
| Professional and other services | 2 | 0.3% | 5 | 0.8% |
| Total Managed Services revenue | $508 | 81.7% | $522 | 83.4% |
| Revenue: Collaboration Products |  |  |  |  |
| Visual collaboration product offerings | 114 | 18.3% | 104 | 16.6% |
| Total revenue | $622 | 100.0% | $626 | 100.0% |

#### Managed Services

- The slight decrease in revenue for network services is mainly attributable to net customer attrition, given the competitive environment and pressure on pricing in the network services business.
- The slight 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 customer loss to competition.
- For the 2025 First Quarter, one customer made up 99% of Managed Services revenue. For the 2024 First Quarter, this customer made up 98% of Managed Services revenue.

#### Collaboration Products

- The slight increase in revenue for Collaboration Products was mainly attributable to an increase in sales of our Mezzanine™ products.

*Cost of Revenue.* Cost of revenue includes all internal and external costs related to the delivery of revenue. Cost of revenue also includes taxes, which have been billed to customers. Cost of revenue by segment is presented in the following table (in thousands):

| Cost of Revenue | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Managed Services | $371 | $369 |
| Collaboration Products | 2 | 260 |
| Total cost of revenue | $373 | $629 |

The decrease in our consolidated cost of revenue is mainly attributable to lower costs related to our Collaboration Products segment. Our consolidated gross profit as a percentage of revenue was 40% in the 2025 First Quarter compared to a negative consolidated gross profit as a percentage of revenue of 0.5% in the 2024 First Quarter.

Our Managed Services segment recorded a 27% gross profit as a percentage of sales for the 2025 First Quarter compared to 29% in the 2024 First Quarter. This decrease was primarily due to the reallocation of personnel expenses following our reduction in headcount in September 2024.

Our Collaboration Products segment recorded a gross profit as a percentage of sales of 98% for the 2025 First Quarter compared to a negative gross profit as a percentage of sales of 150% in the 2024 First Quarter. This increase was mainly attributable to a decrease in personnel costs in the 2025 First Quarter related to headcount reductions in September 2024 and a reduction in the expense related to our inventory obsolescence reserve of $98,000 in the 2025 First Quarter compared to the 2024 First Quarter.

Operating expenses are presented in the following table (in thousands):

| Operating expenses: | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Research and development | $3 | $50 | $(47) | (94)% |
| Sales and marketing | 8 | 54 | (46) | (85)% |
| General and administrative | 929 | 1,077 | (148) | (14)% |
| Total operating expenses | $940 | $1,181 | $(241) | (20)% |

*Research and Development*. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The decrease in research and development expenses for the 2025 First Quarter compared to the 2024 First Quarter is primarily attributable to a decrease in consulting and outsourced labor costs between these periods.

*Sales and Marketing Expenses*. The decrease in sales and marketing expenses for the 2025 First Quarter compared to the 2024 First Quarter is primarily attributable to reduced personnel expenses during the 2025 First Quarter related to headcount reductions in September 2024.

*General and Administrative Expenses*. General and administrative expenses include direct corporate expenses and personnel costs in the various corporate support categories, including executive, finance and accounting, legal, human resources, and information technology. The decrease in general and administrative expenses for the 2025 First Quarter compared to the 2024 First Quarter is primarily attributable to reduced personnel expenses related to headcount reductions in September 2024, and reduced stock compensation expense as a result of stock options being fully expensed.

*Interest Income, Net.* Interest income, net for the 2025 First Quarter and the 2024 First Quarter, is primarily comprised of interest income related to our cash accounts.

*Loss from Operations.* The decrease in the Company’s loss from operations for the 2025 First Quarter compared to the 2024 First Quarter is mainly attributable to an increase in gross profit and a decrease in operating expenses.

### Off-Balance Sheet Arrangements

As of March 31, 2025, we had no off-balance sheet arrangements.

### Inflation

Management does not believe inflation had a significant effect on the Condensed Consolidated Financial Statements for the periods presented.

### Critical Accounting Policies

There have been no changes to our critical accounting policies during the 2025 First Quarter. Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit Committee. Those policies are discussed under “*Critical Accounting Policies”* in “*Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”* as well as in our Condensed Consolidated Financial Statements and the footnotes thereto, each included in our 2024 Annual Report.

### Liquidity and Capital Resources

As of March 31, 2025, we had $4,316,000 in cash and cash equivalents and working capital of $3,345,000. For the 2025 First Quarter, we incurred a net loss of $672,000, and we used $680,000 of net cash in operating activities.

Financing activities provided $31,000 of net cash for the 2025 First Quarter, consisting of net proceeds from warrant exercises.

In April 2025, 165,000 Common Warrants were exercised, at a price of $3.41 per share, for 165,000 shares of Common Stock. The Company received gross and net proceeds of $598,000 and $520,000, respectively.

We believe our existing cash and cash equivalents will be sufficient to fund our operations and meet our working capital requirements into the fourth quarter of 2026. In the long term, we believe additional capital will be required to fund operations and provide growth capital, including our pursuit of potential strategic alternatives and investments in technology, product development, and sales and marketing. To access capital to fund operations or provide growth capital, we will need to raise capital from the exercise of outstanding common and/or preferred warrants, and/or in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising the necessary capital or that any such offering will be on terms acceptable to the Company. If we are unable to raise additional capital that may be needed on terms acceptable to us, it could have a material adverse effect on the Company.

## Market risk

As filed, 135 characters.

As a “*smaller reporting company”* as defined by the rules and regulations of the SEC, we are not required to provide this information.

## Controls and procedures

As filed, 1,423 characters.

#### Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2025, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms and are designed to ensure that information required to be disclosed by the Company in the reports we file or submit under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

#### Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 6,124 characters.

A description of the risks associated with our business, financial conditions, and results of operations is set forth in “Part I. Item 1A. Risk Factors” of our 2024 Annual Report. Except as set forth below, there have been no material changes to these risks during the nine months ended March 31, 2025. The risks described in the 2024 Annual Report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or future results.

***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. For the three months ended March 31, 2025, one major customer accounted for 81% 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. Consequently, our financial results may fluctuate significantly from period to period based on the actions of one or more significant customers. 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. Our agreements with these customers may be canceled if we materially breach the agreement or for other reasons outside our control, such as insolvency or financial hardship that may result in a customer filing for bankruptcy court protection against unsecured creditors. 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. 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, liquidity, financial condition, and results of operations.

***We could fail to satisfy the standards to maintain our listing on a stock exchange.*** 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. On September 21, 2023, we received a written notice from the Nasdaq Stock Market, LLC ("Nasdaq") indicating that the Company was not in compliance with the $1.00 minimum bid price set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market (the "Bid Price Rule"). We were granted two 180-day extensions (until September 16, 2024) to regain compliance with the Bid Price Rule. On September 10, 2024, we received written notice from Nasdaq notifying the Company that it had determined that for the last 10 consecutive business days, from August 26 to September 9, 2024, the closing bid price of the Company’s Common Stock had been at $1.00 per share or greater and that, accordingly, the Company had regained compliance with the Bid Price Rule, and that the matter was now closed.

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. If our Common Stock is not eligible for listing or quotation on another market or exchange, trading of our Common Stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities, such as the Pink Sheets or the OTC Bulletin Board. In such an event, it would become more difficult to dispose of or obtain accurate price quotations for our Common Stock, and there would likely be a reduction in our coverage by security analysts and the news media, which could cause the price of our Common Stock to decline further. In addition, it may be difficult for us to raise additional capital if we are not listed on a national securities exchange.

While Nasdaq rules do not impose a specific limit on the number of times a listed company may effect a reverse stock split to maintain or regain compliance with Listing Rule 5810(c)(3)(A), Nasdaq has stated that a series of reverse stock splits may undermine investor confidence in securities listed on Nasdaq. Accordingly, Nasdaq may determine that it is not in the public interest to maintain our listing, even if we regain compliance with Listing Rule 5810(c)(3)(A) as a result of any reverse stock split. In addition, under Nasdaq Listing Rule 5810(c)(3)(A)(iv), if a company’s securities again fail to meet the Bid Price Rule and the company has effected a reverse stock split within the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, the company will not be eligible for an automatic 180-day grace compliance period. Instead, the Nasdaq Listing Qualifications Department will immediately issue a delisting determination, unless the company timely appeals the decision to a Hearings Panel. Because we effected a 1-for-40 reverse stock split on August 23, 2024, if we were to fall out of compliance with the Bid Price Rule prior to August 23, 2025, we would not be eligible for an automatic compliance period and would immediately be issued a delisting determination, subject to our right of timely appeal.

Filed May 13, 2025.
Source: SEC EDGAR, the filing index for accession 0001437749-25-016275. Last ingested by Listed: Nov 4, 2026, 18:04 ET. No prices; not investment advice.