TaoWeave, Inc 10-Q for FY2022 Q2

TaoWeave, Inc. (TWAV)

10-Q 2022-08-10 For: 2022-06-30

Added on April 06, 2026

About this 10-Q

TaoWeave, Inc filed this 10-Q on August 10, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.33M; down 34.9% from $2.05M a year earlier
Net loss: $9.03M; compared with a net loss of $2.25M a year earlier
Diluted EPS: -$0.29; compared with -$0.08 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware			77-0312442
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)


Large accelerated filer ☐			Accelerated filer ☐
Non-accelerated filer ☒			Smaller reporting company ☒
			Emerging growth company ☐


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements		1
	Condensed Consolidated Balance Sheets at June 30, 2022 (unaudited) and December 31, 2021	1
	Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2022 and 2021	2
	Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the three and six months ended June 30, 2022 and 2021	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021	5
	Notes to unaudited Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		26
Item 4. Controls and Procedures		26

PART II - OTHER INFORMATION
Item 1. Legal Proceedings		26
Item 1A. Risk Factors		26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		27
Item 3. Defaults Upon Senior Securities		28
Item 4. Mine Safety Disclosures		28
Item 5. Other Information		28
Item 6. Exhibits		29
Signatures		30


	June 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash	$	5,107	$	8,939
Restricted cash	—		61
Accounts receivable, net	491		849
Inventory	1,078		1,821
Prepaid expenses and other current assets	1,150		1,081
Total current assets	7,826		12,751
Property and equipment, net	75		159
Goodwill	—		7,367
Intangibles, net	6,402		7,562
Operating lease - right of use asset, net	245		659
Other assets	22		109
Total assets	$	14,570	$	28,607
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Accounts payable	325		259
Accrued expenses and other current liabilities	976		959
Current portion of deferred revenue	686		783
Current portion of operating lease liabilities	378		492



Total current liabilities	2,365		2,493
Long-term liabilities:


Operating lease liabilities, net of current portion	68		236
Deferred revenue, net of current portion	213		381

Total long-term liabilities	281		617
Total liabilities	2,646		3,110
Commitments and contingencies (see Note 11)
Stockholders’ equity:





Common stock, $.0001 par value; 150,000,000 shares authorized; 30,929,331 shares issued and 30,816,048 outstanding at June 30, 2022 and December 31, 2021	3		3
Treasury stock, 113,283 shares of common stock at June 30, 2022 and December 31, 2021	(181)		(181)
Additional paid-in capital	227,580		227,581
Accumulated deficit	(215,478)		(201,906)
Total stockholder's equity	11,924		25,497
Total liabilities and stockholders’ equity	$	14,570	$	28,607


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Revenue	$	1,333	$	2,049	$	2,865	$	3,967
Cost of revenue (exclusive of depreciation and amortization and casualty loss)	926		1,249		1,959		2,539
Gross profit	407		800		906		1,428

Operating expenses:
Research and development	398		599		1,402		1,291
Sales and marketing	317		572		879		1,099
General and administrative	1,185		1,383		2,875		3,450
Impairment charges	6,408		17		7,546		48
Casualty loss	533		—		533		—
Depreciation and amortization	599		707		1,226		1,429
Total operating expenses	9,440		3,278		14,461		7,317
Loss from operations	(9,033)		(2,478)		(13,555)		(5,889)



Interest and other expense (income), net	—		(232)		6		(210)
Loss before income taxes	(9,033)		(2,246)		(13,561)		(5,679)
Income tax expense	—		—		11		—
Net loss	(9,033)		(2,246)		(13,572)		(5,679)
Preferred stock dividends	—		—		—		1
Undeclared dividends	—		—		—		366
Induced conversion of Series A-2 Preferred Stock	—		—		—		300

Net loss attributable to common stockholders	$	(9,033)	$	(2,246)	$	(13,572)	$	(6,346)

Net loss attributable to common stockholders per share:
Basic and diluted net loss per share	$	(0.29)	$	(0.08)	$	(0.44)	$	(0.29)


Weighted-average number of shares of common stock:
Basic and diluted	30,816		26,644		30,816		22,250


	Common Stock			Treasury Stock
	Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Total
Balance at December 31, 2021	30,929,331	$	3	113,283	$	(181)	$	227,581	$	(201,906)	$	25,497
Net loss	—	—		—	—		—		(4,539)		(4,539)
Stock-based compensation	—	—		—	—		52		—		52
Forfeiture of unvested stock options	—	—		—	—		(84)		—		(84)
Balance at March 31, 2022	30,929,331	3		113,283	(181)		227,549		(206,445)		20,926
Net loss	—	—		—	—		—		(9,033)		(9,033)
Stock-based compensation	—	—		—	—		31		—		31

Balance at June 30, 2022	30,929,331	$	3	113,283	$	(181)	$	227,580	$	(215,478)	$	11,924


	Series A-2 Preferred Stock			Series D Preferred Stock	Series E Preferred Stock			Common Stock			Treasury Stock
	Shares	Amount			Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Total
Balance at Balance at December 31, 2020	45	$	—		1,697,958	$	—	131,579	$	—	7,861,912	$	1	113,283	$	(181)	$	215,092	$	(192,855)	$	22,057
Net loss	—	—			—	—		—	—		—	—		—	—		—		(3,433)		(3,433)
Stock-based compensation	—	—			—	—		—	—		—	—		—	—		33		—		33
Conversion of Series A-2 Preferred Stock, including dividend accrual	(45)	—			—	—		—	—		84,292	—		—	—		—		—		—
Conversion of Series D and E Preferred Stock	—	—			(1,697,022)	—		(131,579)	—		18,762,119	2		—	—		(2)		—		—
Issuance of stock for services	—	—			—	—		—	—		21,008	—		—	—		274		—		274
Forfeitures of restricted stock	—	—			(81)	—		—	—		—	—		—	—		—		—		—

Series D Preferred shares to pay withholding taxes	—	—			(855)	—		—	—		—	—		—	—		—		—		—
Balance at March 31, 2021	—	—			—	—		—	—		26,729,331	3		113,283	(181)		215,397		(196,288)		18,931
Net loss	—	—			—	—		—	—		—	—		—	—		—		(2,246)		(2,246)
Issuance of stock from financing, net of issuance costs	—	—			—	—		—	—		4,000,000	—		—	—		11,504		—		11,504
Issuance of stock for services	—	—			—	—		—	—		—	—		—	—		116		—		116







Balance at June 30, 2021	—	$	—		—	$	—	—	$	—	30,729,331	$	3	113,283	$	(181)	$	227,017	$	(198,534)	$	28,305


	Six Months Ended June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(13,572)	$	(5,679)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,226		1,429
Bad debt expense	125		449
Stock-based compensation	83		33
Stock-based expense for services	—		390
Forfeiture of unvested stock options	(84)		—
Gain on extinguishment of liability	—		(227)
Casualty loss on inventory	533		—
Loss on foreign currency remeasurement	—		3
Impairment charges - property and equipment	—		48
Impairment charges - right of use asset	179		—
Impairment charges - goodwill	7,367		—
Changes in operating assets and liabilities:
Accounts receivable	233		1,764
Inventory	210		(1,205)
Prepaid expenses and other current assets	(69)		(702)
Right of use asset	235		250
Other assets	87		7
Accounts payable	66		205
Accrued expenses and other current liabilities	17		408
Deferred revenue	(265)		(429)
Lease liabilities	(282)		(414)
Net cash used in operating activities	(3,911)		(3,670)
Cash flows from investing activities:
Purchases of property and equipment	(11)		(17)
Proceeds from sale of equipment	29		—
Net cash provided by (used in) investing activities	18		(17)
Cash flows from financing activities:
Proceeds from stock issuance, net of issuance costs	—		11,504

Net cash provided by financing activities	—		11,504
(Decrease) increase in cash and restricted cash	(3,893)		7,817
Cash and restricted cash at beginning of period	9,000		5,277
Cash and restricted cash at end of period	$	5,107	$	13,094

Supplemental disclosures of cash flow information:

Reconciliation of cash and restricted cash
Cash	$	5,107	$	13,033
Restricted cash	—		61
Total cash and restricted cash	$	5,107	$	13,094

Cash paid during the period for interest	$	6	$	2
Non-cash investing and financing activities:
Accrued preferred stock dividends	$	—	$	1
Inducement to convert Series A-2 Preferred Stock to common	$	—	$	300
Common stock issued for conversion of Preferred Stock	$	—	$	3


	As of June 30, 2022						As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Lives




Developed technology	$	10,060	$	(5,544)	$	4,516	$	10,060	$	(4,537)	$	5,523	5 years
Trade names	2,410		(663)		1,747		2,410		(542)		1,868		10 years
Distributor relationships	310		(171)		139		310		(139)		171		5 years

Total	$	12,780	$	(6,378)	$	6,402	$	12,780	$	(5,218)	$	7,562



Remainder of 2022	$	1,158
2023	2,309
2024	1,791
2025	241
2026	241
Thereafter	662
Total	$	6,402


	June 30,		December 31,
	2022		2021

Accrued compensation costs	$	677	$	551
Accrued professional fees	77		69
Accrued taxes and regulatory fees	84		92
Customer deposits	115		145
Other accrued expenses and liabilities	23		102


Accrued expenses and other liabilities	$	976	$	959


Remaining Lease Payments
2022	$	221
2023	225
2024	17
Total lease payments	463
Effect of discounting	(17)
Total lease liability	$	446


	Right-of-Use Asset		Operating Lease Liability
Balance at December 31, 2020	$	903	$	1,432
Additions	60		60
Terminations and Modifications	192		156
Amortization and Payments	(496)		(920)

Balance at December 31, 2021	$	659	$	728


Amortization and Payments	(235)		(282)
Impairment Charges	(179)		—
Balance at June 30, 2022	$	245	$	446


Issue Date	Warrants Issued	Exercise Price		Expiration Date
October 21, 2020	521,500	$	4.08	October 22, 2022
December 6, 2020	625,000	5.49		December 7, 2022
June 30, 2021 - Series A(1)	1,000,000	4.00		January 4, 2023
June 30, 2021 - Series B	3,000,000	4.40		June 30, 2024
	5,146,500
(1) Series A Warrants shown as amended on December 31, 2021


	Outstanding
	Number of Warrants (in thousands)	Weighted Average Exercise Price
Warrants outstanding and exercisable, December 31, 2020	1,146,500	$	4.85
Granted	4,000,000	4.30



Warrants outstanding and exercisable, December 31, 2021	5,146,500	4.42




Warrants outstanding and exercisable, June 30, 2022	5,146,500	$	4.42


	Outstanding				Exercisable
Range of price	Number of Options	Weighted Average Remaining Contractual Life (In Years)	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
$0.00 – $10.00	152,500	8.88	$	3.34	52,500	$	1.20
$10.01 – $20.00	97,500	0.56	19.32		97,500	19.32



	250,000	5.63	$	9.57	150,000	$	12.98


	Three Months Ended June 30,
	2022		% of Revenue		2021		% of Revenue
Revenue: Managed Services
Video collaboration services	$	79	6	%	$	230	11	%
Network services	723		54	%	830		41	%
Professional and other services	8		1	%	18		1	%
Total Managed Services revenue	$	810	61	%	$	1,078	53	%

Revenue: Collaboration Products
Visual collaboration product offerings	$	520	39	%	$	942	46	%

Licensing	3		—	%	29		1	%
Total Collaboration Products revenue	523		39	%	971		47	%
Total revenue	$	1,333	100	%	$	2,049	100	%


	Six Months Ended June 30,
	2022		% of Revenue		2021		% of Revenue
Revenue: Managed Services
Video collaboration services	$	195	7	%	$	521	23	%
Network services	1,544		54	%	1,711		75	%
Professional and other services	37		1	%	41		2	%
Total Managed Services revenue	$	1,776	62	%	$	2,273	57	%

Revenue: Collaboration Products
Visual collaboration product offerings	$	1,082	38	%	$	1,635	80	%

Licensing	7		—	%	59		3	%
Total Collaboration Products revenue	1,089		38	%	1,694		43	%
Total revenue	$	2,865	100	%	$	3,967	100	%


	Three Months Ended June 30,
	2022		% of Revenue		2021		% of Revenue
Revenue: Managed Services
Video collaboration services	$	79	6	%	$	230	11	%
Network services	723		54	%	830		41	%
Professional and other services	8		1	%	18		1	%
Total Managed Services revenue	$	810	61	%	$	1,078	53	%

Revenue: Collaboration Products
Visual collaboration product offerings	$	520	39	%	$	1,635	46	%
Licensing	3		—	%	59		1	%
Total Collaboration Products revenue	$	523	39	%	$	971	47	%
Total revenue	$	1,333	100	%	$	2,049	100	%


	Outstanding			Exercisable
	Number of Options	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
Options outstanding and exercisable, December 31, 2020	107,500	$	19.64	107,500	$	19.64
Granted	300,000	3.25		—	—



Options outstanding and exercisable, December 31, 2021	407,500	7.57		107,500	19.64


Vested	—	—		50,000	3.25
Expired	(7,500)	27.40		(7,500)	27.40
Forfeited	(150,000)	3.25		—	—
Options outstanding and exercisable, June 30, 2022	250,000	$	9.57	150,000	$	12.98


	Three and Six Months Ended June 30,
	2022	2021
Unvested restricted stock awards	627	627

Outstanding stock options	250,000	407,500
Warrants	5,146,500	5,146,500


	Three Months Ended June 30, 2022
	Managed Services			Collaboration Products			Corporate		Total
Revenue	$	810		$	523		$	—	$	1,333
Cost of revenues	525			401			—		926
Gross profit	$	285		$	122		$	—	$	407
Gross profit %	35		%	23		%			31		%

Allocated operating expenses	$	1		$	8,254		$	—	$	8,255
Unallocated operating expenses	—			—			1,185		1,185
Total operating expenses	$	1		$	8,254		$	1,185	$	9,440

Income (loss) from operations	$	284		$	(8,132)		$	(1,185)	$	(9,033)
Interest and other expense, net	—			—			—		—
Net income (loss) before tax	$	284		$	(8,132)		$	(1,185)	$	(9,033)
Income tax expense	(1)			1			—		—
Net income (loss)	$	285		$	(8,133)		$	(1,185)	$	(9,033)


	Six Months Ended June 30, 2022
	Managed Services			Collaboration Products			Corporate		Total
Revenue	$	1,776		$	1,089		$	—	$	2,865
Cost of revenues	1,170			789			—		1,959
Gross profit	$	606		$	300		$	—	$	906
Gross profit %	34		%	28		%			32		%

Allocated operating expenses	$	57		$	11,529		$	—	$	11,586
Unallocated operating expenses							2,875		2,875
Total operating expenses	$	57		$	11,529		$	2,875	$	14,461

Income (loss) from operations	$	549		$	(11,229)		$	(2,875)	$	(13,555)
Interest and other expense, net	6			—			—		6
Net income (loss) before tax	$	543		$	(11,229)		$	(2,875)	$	(13,561)
Income tax expense	8			3			—		11
Net income (loss)	$	535		$	(11,232)		$	(2,875)	$	(13,572)


	Three Months Ended June 30, 2021
	Managed Services			Collaboration Products			Corporate		Total
Revenue	$	1,078		$	971		$	—	$	2,049
Cost of revenues	739			510			—		1,249
Gross profit	$	339		$	461		$	—	$	800
Gross profit %	31		%	47		%			39		%

Allocated operating expenses	$	82		$	1,796		$	—	$	1,878
Unallocated operating expenses	—			—			1,400		1,400
Total operating expenses	$	82		$	1,796		$	1,400	$	3,278

Income (loss) from operations	$	257		$	(1,335)		$	(1,400)	$	(2,478)
Interest and other expense, net	9			(241)			—		(232)
Income (loss) before income taxes	$	248		$	(1,094)		$	(1,400)	$	(2,246)
Income tax expense	—			—			—		—
Net income (loss)	$	248		$	(1,094)		$	(1,400)	$	(2,246)


	Six Months Ended June 30, 2021
	Managed Services			Collaboration Products			Corporate		Total
Revenue	$	2,273		$	1,694		$	—	$	3,967
Cost of revenues	1,572			967			—		2,539
Gross profit	$	701		$	727		$	—	$	1,428
Gross profit %	31		%	43		%			36		%

Allocated operating expenses	$	193		$	3,626		$	—	$	3,819
Unallocated operating expenses	—			—			3,498		3,498
Total operating expenses	$	193		$	3,626		$	3,498	$	7,317

Income (loss) from operations	$	508		$	(2,899)		$	(3,498)	$	(5,889)
Interest and other expense, net	14			(224)			—		(210)
Net income (loss) before tax	$	494		$	(2,675)		$	(3,498)	$	(5,679)
Income tax expense	—			—			—		—
Net income (loss)	$	494		$	(2,675)		$	(3,498)	$	(5,679)


Exhibit Number						Description
31.1*						Rule 13a—14(a)/15d—14(a) Certification of the Chief Executive Officer.
31.2*						Rule 13a—14(a)/15d—14(a) Certification of the Chief Financial Officer.
32.1**						Section 1350 Certification of the Chief Executive Officer and Chief Financial Officer.
101.INS						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
101.LAB						XBRL Taxonomy Extension Label Linkbase
101.PRE						XBRL Taxonomy Extension Presentation Linkbase


	OBLONG, INC.

August 10, 2022	By:	/s/ Peter Holst
		Peter Holst
		Chief Executive Officer
		(Principal Executive Officer)


August 10, 2022	By:	/s/ David Clark
		David Clark
		Chief Financial Officer
		(Principal Financial and Accounting Officer)