Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

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. All statements contained herein that are not historical facts, including, but not limited to, statements regarding anticipated future capital requirements, our future development plans, our ability to obtain debt, equity, or other financing, and our ability to generate cash from operations, are based on current expectations. 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. 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. 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. 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.

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.

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. 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. 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.

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

Historically, customers have used Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces. Sales of our Mezzanine™ product have been adversely affected during the last several years by the commercial response to the COVID-19 pandemic and its aftermath. We have not invested in research and development or sales and marketing for our Mezzanine™ product in recent years. Given the declines in sales, we announced 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. 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. 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.

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.

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, 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	%

(1)	Operating expenses related to our Digital Assets segment include cash and stock-based advisory fees.
(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.
(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.
(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.
(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. Total revenue increased 2.5% for the year ended December 31, 2025, compared to the year ended December 31, 2024. 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. 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. 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.

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. 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. 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. 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):

		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. 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.

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. As of December 31, 2024, the Company 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 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.

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. 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. 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. 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.

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. 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. 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. 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. 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).

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. 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.

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).

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. 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. 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 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.

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. 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.

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.

The Company had staked $5,395,000 of digital assets as of December 31, 2025. 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. 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.

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. 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.

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. 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. 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. 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.

Recent Accounting Pronouncements

See the sections titled "Summary of Significant Accounting Policies-Recently adopted accounting pronouncements" and "Recent accounting pronouncements not yet adopted" in Note 1 - Business Description and Significant Accounting Policies to our Consolidated Financial Statements for more information.