0000746210 Oblong, Inc. false --12-31 Q3 2024 0.0001 0.0001 560,884 560,884 42,000 42,000 545 545 1,930 1,930 0.0001 0.0001 150,000,000 150,000,000 1,071,545 1,071,356 573,644 573,455 189 189 0 106,000 5 1,648 3 0 0 0 0 0 0 false false false false Calculated by dividing (x) the sum of the dollar volume-weighted average price of the Company's Common Stock for each of the five lowest trading days during the sixteen trading days after the Reverse Split by (y) five. Based on the original aggregate exercise price divided by the Make Whole Provision exercise price. Calculation assumes conversion of the stated value, and accrued dividends, of the Series F Preferred Stock into Common Stock at the Floor Price of $11.17 as of September 30, 2024, and at the initial conversion price of $68.40 as of September 30, 2023. Calculation assumes conversion of the stated value, and accrued dividends, of the Series F Preferred Stock into Common Stock at the Floor Price as of June 30, 2024, and at the initial conversion price of $1.71 as of June 30, 2023. Original exercise price based on the March 30, 2023 initial exercise price. Calculation assumes exercise of the Series F Preferred Warrants for cash into Series F Preferred Stock and subsequent conversion of the Series F Preferred Stock into Common Stock at the Floor Price as of June 30, 2024 and at the initial conversion price of $1.71 as of June 30, 2023. Calculation assumes exercise of the Series F Preferred Warrants for cash into Series F Preferred Stock and subsequent conversion of the Series F Preferred Stock into Common Stock at the Floor Price of $11.17 per share as of September 30, 2024 and at the initial conversion price of $68.40 as of September 30, 2023. 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Table of Contents

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

 

☒ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2024.

or

 

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission file number: 001-35376

OBLONG, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware

77-0312442

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification No.)

 

110 16th Street, Suite 1400-1024, Denver, CO 80202

(Address of Principal Executive Offices, including Zip Code)

 

(213) 683-8863 ext. 5

(Registrant’s Telephone Number, including Area Code)

 

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

OBLG

 

Nasdaq Capital Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒  No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒  No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☐

  

Non-accelerated filer ☒

Smaller reporting company ☒

  
 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes ☐ No ☒

 

The number of shares outstanding of the registrant’s common stock as of November 5, 2024 was 1,144,926.

 

 
Table of Contents

 

 

OBLONG, INC.

Index

 

PART I - FINANCIAL INFORMATION

  
   

Item 1. Financial Statements

1
   

Condensed Consolidated Balance Sheets at September 30, 2024 (unaudited) and December 31, 2023

1
   

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023

2
   

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2024 and 2023

3
   

Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023

5
   

Notes to unaudited Condensed Consolidated Financial Statements

6
   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

21
   

Item 3. Quantitative and Qualitative Disclosures About Market Risk

29
   

Item 4. Controls and Procedures

29
   
   

PART II - OTHER INFORMATION

  
   

Item 1. Legal Proceedings

30
   

Item 1A. Risk Factors

30
   

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

31
   

Item 3. Defaults Upon Senior Securities

31
   

Item 4. Mine Safety Disclosures

31
   

Item 5. Other Information

31
   

Item 6. Exhibits

32
   

Signatures

33

 

 
Table of Contents

 

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

 

This quarterly report on Form 10-Q (this “Report”) contains statements that are considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and its rules and regulations (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, and its rules and regulations (the “Exchange Act”). These forward-looking statements include, but are not limited to, statements about the plans, objectives, expectations and intentions of Oblong, Inc. (“Oblong” or “we” or “us” or the “Company”). All statements other than statements of current or historical fact contained in this Report, including statements regarding Oblong’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” and similar expressions, as they relate to Oblong, are intended to identify forward-looking statements. These statements are based on Oblong’s current plans, and Oblong’s actual future activities and results of operations may be materially different from those set forth in the forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. Any or all of the forward-looking statements in this Report may turn out to be inaccurate. Oblong has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions. There are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors that are discussed under the section entitled “Part I. Item 1A. Risk Factors” and in our consolidated financial statements and the footnotes thereto for the fiscal year ended December 31, 2023, each included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2024, as well as under “Part II. Item 1A. Risk Factors” in this report. Oblong undertakes no obligation to publicly revise these forward-looking statements to reflect events occurring after the date hereof. All subsequent written and oral forward-looking statements attributable to Oblong or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this Report. Forward-looking statements in this Report include, among other things: opportunities for and benefits of potential strategic alternatives; our expectations and estimates relating to customer attrition, demand for our product offerings, sales cycles, future revenues, expenses, capital expenditures and cash flows; evolution of our customer solutions and our service platforms; our ability to fund operations and continue as a going concern; our liquidity projection; expectations regarding adjustments to our cost of revenue and other operating expenses; our ability to finance investments in product development and sales and marketing; the future exercise of warrants; our ability to raise capital through sales of additional equity or debt securities and/or loans from financial institutions; our beliefs about the ongoing performance and success of our Managed Service business; statements relating to market need and evolution of the industry, our solutions and our service platforms; and the adequacy of our internal controls. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those summarized below:

 

•

our ability to raise capital in one or more debt and/or equity offerings in order to fund operations or any growth initiatives and our ability to continue as a going concern;

•

the impact of the issuance of our Series F Preferred Stock in the March 2023 private placements, conversions of our Series F Preferred Stock, exercises of the Series F Preferred Stock warrants and Common Warrants, and sales of the underlying conversion shares.

•

customer acceptance and demand for our video collaboration services and network applications;

•

our ability to launch new products and offerings and to sell our solutions;

•

our ability to compete effectively in the video collaboration services and network services businesses;

•

the ongoing performance and success of our Managed Services business;

•

our ability to maintain and protect our proprietary rights;

•

our ability to withstand industry consolidation;

•

our ability to adapt to changes in industry structure and market conditions;

•

actions by our competitors, including price reductions for their competitive services;

•

the quality and reliability of our products and services;

•

the prices for our products and services and changes to our pricing model;

•

the success of our sales and marketing approach and efforts, and our ability to grow revenue;

•

customer renewal and retention rates;

•

the continued impact from the aftermath of the coronavirus pandemic on our revenue and results of operations;

•

risks related to the concentration of our customers and the degree to which our sales, now or in the future, depend on certain large client relationships;

•

increases in material, labor or other manufacturing-related costs;

•

changes in our go-to-market cost structure;

•

inventory management and our reliance on our supply chain;

•

our ability to attract and retain highly skilled personnel;

•

our reliance on open-source software and technology;

•

potential federal and state regulatory actions;

•

our ability to innovate technologically, and, in particular, our ability to develop next generation Oblong technology;

•

changes in our capital structure and/or stockholder mix;

•

the costs, disruption, and diversion of management’s attention associated with campaigns commenced by activist investors; and

•

our management’s ability to execute its plans, strategies and objectives for future operations.

 

 
Table of Contents
 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

OBLONG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except shares, par value, and stated value)

 

  

September 30, 2024

  

December 31, 2023

 
  

(Unaudited)

     

ASSETS

        

Current assets:

        

Cash and cash equivalents

 $5,619  $5,990 

Accounts receivable, net

  33   424 

Inventory, net

  50   239 

Prepaid expenses and other current assets

  283   243 

Total current assets

  5,985   6,896 

Operating lease - right of use asset, net

  —   17 

Other assets

  8   12 

Total assets

 $5,993  $6,925 

LIABILITIES AND STOCKHOLDERS’ EQUITY

        

Current liabilities:

        

Accounts payable

 $93  $211 

Accrued expenses and other current liabilities

  1,175   1,038 

Current portion of deferred revenue

  52   132 

Operating lease liabilities

  —   17 

Total current liabilities

  1,320   1,398 

Long-term liabilities:

        

Deferred revenue, net of current portion

  2   26 

Total liabilities

  1,322   1,424 

Commitments and contingencies (see Note 9)

          

Stockholders’ equity:

        

Preferred stock Series F, convertible; $0.0001 par value; $560,884 stated value; 42,000 shares authorized, 545 and 1,930 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

  —   — 

Common stock, $0.0001 par value; 150,000,000 shares authorized; 1,071,545 shares issued and 1,071,356 shares outstanding at September 30, 2024 and 573,644 shares issued and 573,455 outstanding at December 31, 2023

  —   — 

Treasury Stock, 189 common shares

  (181)  (181)

Additional paid-in capital

  236,242   233,913 

Accumulated deficit

  (231,390)  (228,231)

Total stockholders' equity

  4,671   5,501 

Total liabilities and stockholders’ equity

 $5,993  $6,925 

 

See accompanying notes to condensed consolidated financial statements.

 

 

-1-
Table of Contents
 

 

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Revenue

 $578  $872  $1,815  $2,866 

Cost of revenue (exclusive of amortization)

  499   648   1,619   2,244 

Gross profit

  79   224   196   622 
                 

Operating expenses:

                

Research and development

  38   5   153   16 

Sales and marketing

  66   81   177   241 

General and administrative

  1,047   977   3,140   3,723 

Amortization

  —   86   —   259 

Impairment charges

  —   —   —   2 

Casualty gain (insurance proceeds)

  —   —   —   (400)

Total operating expenses

  1,151   1,149   3,470   3,841 

Operating loss

  (1,072)  (925)  (3,274)  (3,219)

Interest income, net

  (32)  (30)  (124)  (94)

Loss before income taxes

  (1,040)  (895)  (3,150)  (3,125)

Income tax expense

  —   —   9   38 

Net loss

  (1,040)  (895)  (3,159)  (3,163)

Preferred stock dividends

  12   133   76   282 

Deemed dividend

  8,974   —   8,974   — 

Warrant modification

  —   —   —   25 

Induced conversion of warrants

  —   —   —   751 

Net loss attributable to common stockholders

 $(10,026) $(1,028) $(12,209) $(4,221)
                 

Net loss attributable to common stockholders per share:

                

Basic and diluted net loss per share

 $(11.25) $(4.22) $(16.60) $(18.34)

Weighted-average number of shares of common stock:

                

Basic and diluted

  890,943   243,378   735,286   230,214 

 

See accompanying notes to condensed consolidated financial statements.

 

-2-
Table of Contents
 

 

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three and Nine Months Ended September 30, 2024

(In thousands, except shares data)

(Unaudited)

 

  

Series F Preferred Stock

  

Common Stock

  

Treasury Stock

             
                          

Additional

  

Accumulated

     
  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Paid-In Capital

  

Deficit

  

Total

 

Balance at December 31, 2023

  1,930  $—   573,644  $—   189  $(181) $233,913  $(228,231) $5,501 

Net loss

  —   —   —   —   —   —   —   (1,136)  (1,136)

Stock-based compensation

  —   —   —   —   —   —   31   —   31 

Series F Preferred Stock conversions

  (922)  —   90,056   —   —   —   82   —   82 

Series F Preferred Stock dividends

  —   —   —   —   —   —   (44)  —   (44)

Balance at March 31, 2024

  1,008   —   663,700   —   189   (181)  233,982   (229,367)  4,434 

Net loss

  —   —   —   —   —   —   —   (983)  (983)

Stock-based compensation

  —   —   —   —   —   —   31   —   31 

Preferred warrant exercise, net of fees

  1,648   —   —   —   —   —   1,478   —   1,478 

Series F Preferred Stock conversions

  (2,111)  —   198,912   —   —   —   112   —   112 

Series F Preferred Stock dividends

  —   —   —   —   —   —   (20)  —   (20)

Balance at June 30, 2024

  545   —   862,612   —   189   (181)  235,583   (230,350)  5,052 

Net loss

  —   —   —   —   —   —   —   (1,040)  (1,040)

Common warrant exercise, net of fees

  —   —   208,933   —   —   —   671   —   671 

Series F Preferred Stock dividends

  —   —   —   —   —   —   (12)  —   (12)

Balance at September 30, 2024

  545  $—   1,071,545  $—   189  $(181) $236,242  $(231,390) $4,671 

 

See accompanying notes to condensed consolidated financial statements.

 

-3-
Table of Contents

 

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three and Nine Months Ended September 30, 2023

(In thousands, except shares data)

(Unaudited)

 

  

Series F Preferred Stock

  

Common Stock

  

Treasury Stock

             
                          

Additional

  

Accumulated

     
  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Paid-In Capital

  

Deficit

  

Total

 

Balance at December 31, 2022

  —  $—   208,018  $—   189  $(181) $227,645  $(223,847) $3,617 

Net loss

  —   —   —   —   —   —   —   (1,219)  (1,219)

Stock-based compensation

  —   —   —   —   —   —   31   —   31 

Proceeds from private placement, net of fees and amounts held in escrow

  6,550   —   —   —   —   —   1,473   —   1,473 

Balance at March 31, 2023

  6,550   —   208,018   —   189   (181)  229,149   (225,066)  3,902 

Net loss

  —   —   —   —   —   —   —   (1,049)  (1,049)

Stock-based compensation

  —   —   4,491   —   —   —   411   —   411 

Common warrant exercise, net of fees

  —   —   8,516   —   —   —   534   —   534 

Release of escrow from March 31, 2023 private placement

  —   —   —   —   —   —   4,000   —   4,000 

Fees associated with Series F Preferred Stock issuance

  —   —   —   —   —   —   (38)  —   (38)

Series F Preferred Stock conversions

  (175)  —   3,669   —   —   —   4   —   4 

Series F Preferred Stock dividends

  —   —   —   —   —   —   (149)  —   (149)

Balance at June 30, 2023

  6,375   —   224,694   —   189   (181)  233,911   (226,115)  7,615 

Net loss

  —   —   —   —   —   —   —   (895)  (895)

Stock-based compensation

  —   —   —   —   —   —   31   —   31 

Foundry exchange

  —   —   (10,170)  —   —   —   —   —   — 

Series F Preferred Stock conversions

  (1,229)  —   49,143   —   —   —   43   —   43 

Series F Preferred Stock dividends

  —   —   —   —   —   —   (133)  —   (133)

Balance at September 30, 2023

  5,146  $—   263,667  $—   189  $(181) $233,852  $(227,010) $6,661 

 

See accompanying notes to condensed consolidated financial statements.

 

-4-
Table of Contents
 

 

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

  

Nine Months Ended September 30,

 
  

2024

  

2023

 

Cash flows from operating activities:

        

Net loss

 $(3,159) $(3,163)

Adjustments to reconcile net loss to net cash used in operating activities:

        

Amortization

  —   259 

Bad debt (recovery) expense

  —   (55)

Non-cash lease expense from right-of-use asset

  17   101 

Stock-based compensation

  62   473 

Impairment charges - property and equipment

  —   2 

Changes in operating assets and liabilities:

        

Accounts receivable

  391   313 

Inventory

  189   399 

Prepaid expenses and other current assets

  (40)  319 

Other assets

  4   24 

Accounts payable

  (118)  (78)

Accrued expenses and other current liabilities

  254   (335)

Deferred revenue

  (104)  (354)

Lease liabilities

  (17)  (193)

Net cash used in operating activities

  (2,521)  (2,288)

Cash flows from financing activities:

        

Proceeds from private placement, net of issuance costs and amounts in escrow

  —   5,435 

Net proceeds from exercise of common stock warrants

  671   534 

Net proceeds from exercise of preferred stock warrants

  1,478   — 

Net cash provided by financing activities

  2,149   5,969 

(Decrease) increase in cash

  (372)  3,681 

Cash and cash equivalents at beginning of period

  5,990   3,085 

Cash and cash equivalents at end of period

 $5,618  $6,766 

Supplemental disclosures of cash flow information:

        
         

Reconciliation of cash and cash equivalents

        

Cash

 $5,119  $6,266 

Current certificates of deposit

 $500  $500 

Total cash and cash equivalents

 $5,619  $6,766 
         

Cash paid during the period for interest

 $—  $18 

Cash paid for income taxes

 $—  $31 
         

Non-cash investing and financing activities:

        

Preferred stock dividends

 $76  $282 

Deemed dividend

 $8,974  $— 

Warrant modification

 $—  $25 

Common stock issued for conversion of Preferred Stock

 $194  $47 

Induced exercise of common stock warrants

 $—  $751 

 

See accompanying notes to condensed consolidated financial statements.

 

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OBLONG, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

(Unaudited)

 

 

Note 1 - Business Description and Significant Accounting Policies

 

Business Description

 

Oblong, Inc. (“Oblong” or “we” or “us” or the “Company”) was formed as a Delaware corporation in May 2000 and is a provider of patented multi-stream collaboration technologies and managed services for video collaboration and network applications.

 

Basis of Presentation

 

The Company's fiscal year ends on December 31 of each calendar year. The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared on substantially the same basis as our annual Consolidated Financial Statements for the fiscal year ended December 31, 2023. In the opinion of the Company's management, these interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

 

The December 31, 2023 Condensed Consolidated Balance Sheet data in this document was derived from audited consolidated financial statements. The Condensed Consolidated Financial Statements and notes included in this quarterly report on Form 10-Q do not include all disclosures required by U.S. generally accepted accounting principles and should be read in conjunction with the Company's audited consolidated financial statements as of and for the year ended December 31, 2023 and notes thereto included in the Company's fiscal 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 19, 2024 (the “2023 Annual Report”).

 

On August 23, 2024, the Company effected a 1-for-40 reverse stock split (the "Reverse Split") for its Common Stock. All Common Stock share and per share data throughout these Condensed Consolidated Financial Statements have been retroactively adjusted to reflect the Reverse Split.

 

The results of operations and cash flows for the interim periods included in these Condensed Consolidated Financial Statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

 

Principles of Consolidation

 

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

 

Cash and Cash Equivalents

 

As of September 30, 2024, our total cash balance of $5,619,000 is available. Of this balance $500,000 was held in short-term certificates of deposit with MidFirst Bank. As of December 31, 2023, our total cash balance of $5,990,000 was available with $500,000 held in short-term certificates of deposit with MidFirst Bank. The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents.

 

Segments

 

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. See Note 8 - Segment Reporting for further discussion.

 

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Use of Estimates

 

Preparation of the Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates made. We continually evaluate estimates used in the preparation of our consolidated financial statements for reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. The significant areas of estimation include determining the allowances for inventory obsolescence and estimated credit losses and the inputs used in the fair value of equity-based awards.

 

Amortization Expense

 

As of September 30, 2024 and December 31, 2023, we had no intangible assets. Amortization expense related to intangible assets for the three and nine months ended September 30, 2023 was $86,000 and $259,000, respectively.

 

Operating Lease Right-of-use-Assets and Liabilities

 

In February 2024, we exited our warehouse lease in City of Industry, California, and are no longer a party to any long-term operating leases. Right-of-use assets, net totaled $17,000 as of December 31, 2023, consisting of the warehouse lease discussed above. As of September 30, 2024, the Company had no right-of-use assets remaining. The remaining operating lease liability as of December 31, 2023 was $17,000, consisting of the warehouse lease discussed above. As of September 30, 2024, the Company had no lease liability remaining. During the nine months ended September 30, 2024, we recorded $17,000 in lease expenses. During the three and nine months ended September 30, 2023, we recorded $70,000 and $123,000 in lease expenses, respectively. The 2023 expenses are net of common charges, and sublease proceeds. There were no sublease proceeds for the three months ended September 30, 2023 and $27,000 in sublease proceeds for the nine months ended September 30, 2023.

 

Significant Accounting Policies

 

The significant accounting policies used in preparation of these Condensed Consolidated Financial Statements are disclosed in our 2023 Annual Report, and there have been no changes to the Company’s significant accounting policies during the nine months ended September 30, 2024.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures. The new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the impact that the adoption of this ASU will have on the financial statements and related disclosures, which is not expected to be material.

 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Tax Disclosures (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.

 

 

Note 2 - Liquidity

 

As of September 30, 2024, we had $5,619,000 in cash and cash equivalents and working capital of $4,665,000. For the nine months ended September 30, 2024 we incurred a net loss of $3,159,000, financing activities provided $2,149,000 in net cash, and we used net cash of $2,521,000 in operating activities.

 

In September 2024, in order to reduce operating expenses and preserve capital, the Company reduced its workforce by nine employees. This resulted in severance costs of $106,000 which are recorded in operating expenses for the three and nine months ended September 30, 2024 and is included in accrued compensation as of September 30, 2024. The entirety of the severance costs were paid out in October 2024.

 

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.

 

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Note 3 - Accrued Expenses and Other Current Liabilities

 

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

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Compensation costs

 $856  $448 

Customer deposits

  77   118 

Professional fees

  20   104 

Taxes and regulatory fees

  25   21 

Accrued rent

  170   202 

Accrued dividends on Series F Preferred Stock

  16   136 

Other accrued expenses and liabilities

  11   9 

Accrued expenses and other liabilities

 $1,175  $1,038 

 
 

Note 4 - Capital Stock

 

Common Stock

 

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed on the Nasdaq Capital Market (“Nasdaq”), under the ticker symbol “OBLG”. As of September 30, 2024, we had 150,000,000 shares of our Common Stock authorized, with 1,071,545 and 1,071,356 shares issued and outstanding, respectively.

 

On August 23, 2024, the Company effected the Reverse Stock Split. The Company's shares of Common Stock began trading on a split-adjusted basis at the commencement of trading on August 26, 2024. Upon effectiveness, every 40 shares of Common Stock were converted into 1 share of Common Stock. The number of authorized shares and the par value of each share remained unchanged. No fractional shares were issued as a result of the Reverse Split, and any fractional shares that would have otherwise resulted from the Reverse Split were rounded up to the nearest whole share.

 

During the nine months ended September 30, 2023, 8,516 shares of the Company's Common Stock were issued related to the exercise of 8,516 warrants granted at various dates between October 2020 and June 2021. During the three months ended September 30, 2024, 208,933 shares of the Company's Common Stock were issued related to the exercise of 208,933 Common Warrants. Details related to these exercises are below.

 

During the three and nine months ended September 30, 2023, 49,143 and 52,812 shares of the Company's Common Stock were issued related to the conversion of 1,229 and 1,404 shares of Series F Preferred Stock, plus accrued dividends, respectively. During the nine months ended September 30, 2024, 288,968 shares of the Company's Common Stock were issued related to the conversion of 3,033 shares of Series F Preferred Stock, plus accrued dividends. See Note 5 - Preferred Stock for further detail.

 

During the nine months ended September 30, 2023, 4,491 shares of the Company's Common Stock were issued related to stock compensation.  See Note 6 - Stock Based Compensation for further detail.

 

Common Stock activity for the year ended December 31, 2023 and nine months ended September 30, 2024 is presented below.

 

Issued Shares as of December 31, 2022

  208,018 

Issuances from Preferred Stock conversions

  352,624 

Issuances related to warrant exercises

  18,681 

Issuances related to stock compensation

  4,491 

Common shares exchanged for prepaid warrants

  (10,170)

Issued Shares as of December 31, 2023

  573,644 

Issuances from Common Warrant Exercises

  208,933 

Issuances from Preferred Stock conversions

  288,968 

Issued Shares as of September 30, 2024

  1,071,545 

Less Treasury Shares:

  (189)

Outstanding Shares as of September 30, 2024

  1,071,356 

 

 

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Common Stock Warrants

 

On March 30, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we issued and sold, in a private placement (the “Private Placement”) (i) 6,550 shares of our newly designated Series F Preferred Stock, $0.0001 par value per share (the “Series F Preferred Stock”), (ii) preferred warrants (the “Preferred Warrants”) to acquire 32,750 shares of Series F Preferred Stock, and (iii) common warrants (“Common Warrants” and with the Preferred Warrants the “Investor Warrants”) to acquire up to 95,764 shares of Common Stock. Please refer to Note 5 - Preferred Stock for further discussion on the Series F Preferred Stock and Preferred Warrants.

 

In connection with the Private Placement, pursuant to an engagement letter dated March 30, 2023 (the "Engagement Letter"), between the Company and Dawson James Securities, Inc. (the “Placement Agent”), the Company agreed to (i) pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds raised in the Private Placement, and (ii) grant to the Placement Agent warrants (the “Placement Agent Warrants”) to purchase 7,663 shares of Common Stock.

 

On March 31, 2023, the Company issued the Common Warrants and the Placement Agent Warrants to purchase an aggregate of 103,427 shares of the Company’s Common Stock. The Common Warrants and Placement Agent Warrants have a term of 5 years, commencing six months and one day from the date of issuance, and were initially exercisable for $68.40 per share. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination, recapitalization, or other similar transactions involving the Common Stock, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price for the Common Warrants (subject to certain exceptions). The Common Warrants and Placement Agent Warrants are exercisable for cash, provided that if there is no effective registration statement available permitting the resale of the common shares, they may be exercised on a cashless basis. Exercise of the Common Warrants and Placement Agent Warrants is subject to certain limitations, including a 4.99% beneficial ownership limitation.

 

On October 6, 2023, the Company and the Investors holding a majority of the outstanding shares of the Preferred Stock agreed to waive any and all provisions, terms, covenants and obligations in the Certificate of Designations or Common Warrants to the extent such provisions permit the conversion or exercise of the Preferred Stock and the Common Warrants, respectively, to occur at a price below $11.168 (the "Waiver"). Notwithstanding anything to the contrary in the Certificate of Designations, each of the “Alternate Conversion Price” and the “Floor Price” as set forth in the Certificate of Designations shall in no event be less than $11.168 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events). On September 13, 2024, the Company and the Investors agreed to delete Section 2 of the Waiver, removing the minimum price restriction on the exercise of Common Warrants.

 

During the nine months ended September 30, 2024, 24,104 Common Warrants were issued in accordance with the exercise provisions of the Preferred Warrants. See Note 5 - Preferred Stock for additional detail on the exercises of the Preferred Warrants. These Common Warrants were exercisable at an initial exercise price of $68.40 and have a term of five years.

 

Pursuant to Sections 2(a) and 2(c) of the Common Warrants (the "Make Whole Provision"), as a result of the Reverse Split, the exercise price of the Common Warrants and Placement Agent Warrants were adjusted to $3.41438 per share, and the number of Common Warrant shares that may be purchased upon exercise of the Common Warrants and the Placement Agent Warrants were increased proportionately, so that after the exercise price adjustment the aggregate exercise price payable hereunder for the adjusted number of Common Warrant Shares was the same as the aggregate exercise price in effect immediately prior to the exercise price adjustment. These adjustments resulted in an aggregate of 2,401,047 Common Warrants and 153,470 Placement Agent Warrants remaining outstanding following the Reverse Split. The additional warrants created by the Make Whole Provision resulted in an aggregate deemed dividend of $8,974,000 which will reduce the net income available to common shareholders. Details of the Make Whole Provision transactions are presented below:

 

 

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Warrant Tranche

 

Original Warrants Issued

  

Original Exercise Price (1)

  

Warrants Post Reverse Split (2)

  

Exercise Price Post Reverse Split (2)

  

Warrants Post Make Whole Provision (3)

  

Exercise Price Post Make Whole Provision (4)

  

Deemed Dividend

 

Common Warrants issued in 2023

  3,830,417  $1.71   95,764  $68.40   1,918,371  $3.41  $6,739,000 

Common Warrants issued in 2024

  963,745  $1.71   24,104  $68.40   482,676  $3.41  $1,696,000 

Placement Agent Warrants

  306,433  $1.71   7,663  $68.40   153,470  $3.41  $539,000 

Total

  5,100,595       127,531       2,554,517      $8,974,000 
                             

Aggregate Exercise Price

 $8,722,000      $8,722,000      $8,722,000         

 

(1) Original exercise price based on the March 30, 2023 initial exercise price.

(2) Adjusted by the Reverse Split.

(3) Based on the original aggregate exercise price divided by the Make Whole Provision exercise price.

(4) Calculated by dividing (x) the sum of the dollar volume-weighted average price of the Company's Common Stock for each of the five lowest trading days during the sixteen trading days after the Reverse Split by (y) five.

 

During the three months ended September 30, 2024, 208,933 Common Warrants were exercised, at a price of $3.41438 per share, for 208,933 shares of Common Stock. The Company received gross and net proceeds of $713,000 and $671,000, respectively. Subsequent to September 30, 2024, an additional 73,381 Common Warrants were exercised, at a price of $3.41438 per share, for 73,381 shares of Common Stock.  The Company received gross and net proceeds of $251,000 and $231,000, respectively.

 

One of our directors, Jonathan Schechter, is currently a partner at The Special Equities Group ("SEG"), a division of Dawson James Securities, Inc. In March 2023, prior to Mr. Schechter's appointment to our board in May 2023 and pursuant to our Engagement Letter, SEG acted as placement agent in connection with our March 30, 2023 Purchase Agreement. During the three months ended September 30, 2024, pursuant to the terms of the Placement Agent Agreement, we paid SEG a cash fee equal to 8% of the aggregate gross proceeds raised from the exercise of the 208,933 Common Stock Warrants. The fee was $57,000. Mr. Schechter did not receive any of the fee paid.

 

Common Warrants outstanding as of September 30, 2024 are as follows:

 

Issue Date

 

Warrants Outstanding

  

Exercise Price

 

Expiration Date

          

Q2 2021

  19  $2,640.00 

Q4 2024

Q1 2023

  1,872,908  $3.41 

Q3 2028

Q2 2024

  472,676  $3.41 

Q4 2029

   2,345,603      

 

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Common Warrant activity for the year ended December 31, 2023 and nine months ended September 30, 2024 is presented below.

 

  

Outstanding and Exercisable

 
  

Number of Warrants

  

Weighted Average Exercise Price

 

Warrants outstanding and exercisable, December 31, 2022

  8,609  $2,653.60 

Granted

  113,597   10.17 

Exercised

  (18,681)  31.18 

Expired

  (72)  2,853.75 

Warrants outstanding and exercisable, December 31, 2023

  103,453   69.03 

Granted

  24,104   68.40 

Make Whole Provision

  2,426,986   3.41 

Exercised

  (208,933)  3.41 

Expired

  (7)  2,400.00 

Warrants outstanding and exercisable, September 30, 2024

  2,345,603  $3.44 

 

Treasury Shares

 

The Company maintains treasury stock for the Common Stock shares bought back by the Company when withholding shares to cover taxes on transactions related to equity awards. There were no treasury stock transactions during the nine months ended September 30, 2024 or the year ended December 31, 2023.

 

 

Note 5 - Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. As of September 30, 2024, we had 1,983,250 designated shares of preferred stock and 545 shares of preferred stock issued and outstanding. As of December 31, 2023, we had 1,930 shares of preferred stock issued and outstanding.

 

 

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Series F Preferred Stock

 

The terms of the Series F Preferred Stock are as set forth in the Certificate of Designations of Series F Preferred Stock of Oblong, Inc. (the “Certificate of Designations”), which was filed and became effective with the Secretary of State of the State of Delaware on March 31, 2023. The Private Placement closed on March 31, 2023, in exchange for gross and net proceeds of $6,386,000 and $5,364,000, respectively. The financing fees associated with the Purchase Agreement were $1,022,000.

 

The Series F Preferred Shares are convertible into fully paid and non-assessable shares of the Company’s Common Stock at the election of the holder at any time at an initial conversion price of $68.40 (the “Conversion Price”). The holders of the Series F Preferred Shares may also elect to convert their shares at an alternative conversion price equal to the lower of (i) 80% of the applicable Conversion Price as in effect on the date of the conversion, (ii) 80% of the closing price on the trading day immediately preceding the delivery of the conversion notice, and (iii) the greater of (a) the Floor Price (as defined in the Certificate of Designations) and (b) the quotient of (x) the sum of the five lowest Closing Bid Prices (as defined in the Certificate of Designations) for trading days in the 30 consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable Conversion Notice, divided by (y) five. The Conversion Price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalization, or other similar transactions involving the Common Stock, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of our common stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions).

 

On October 6, 2023, the Company and Investors holding a majority of the outstanding shares of the Preferred Stock agreed to waive any and all provisions, terms, covenants and obligations in the Certificate of Designations to the extent such provisions permit the conversion or exercise of the Preferred Stock to occur at a price below $11.168. Notwithstanding anything to the contrary in the Certificate of Designations, each of the “Alternate Conversion Price” and the “Floor Price” as set forth in the Certificate of Designations shall in no event be less than $11.168 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).

 

Under the Certificate of Designations, the Series F Preferred Shares have an initial stated value of $1,000 per share (the “Stated Value”). The holders of the Series F Preferred Shares are entitled to dividends of 9% per annum, which will be payable in arrears quarterly. Accrued dividends may be paid, at our option, in cash and if not paid, shall increase the stated value of the Series F Preferred Shares. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series F Preferred Shares will accrue dividends at the rate of 20% per annum (the “Default Rate”). The Series F Preferred Shares have no voting rights, other than with respect to certain matters affecting the rights of the Series F Preferred Shares. On matters with respect to which the holders of the Series F Preferred Shares have a right to vote, holders of the Preferred Shares will have voting rights on an as-converted basis.

 

Our ability to settle conversions is subject to certain limitations set forth in the Certificate of Designations. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of the Series F Preferred Shares.

 

The Certificate of Designations includes certain Triggering Events (as defined in the Certificate of Designations), including, among other things, (i) the failure to file and maintain an effective registration statement covering the sale of the holder’s securities registrable pursuant to the Registration Rights Agreement, (ii) the failure to pay any amounts due to the holders of the Series F Preferred Shares when due, and (iii) if Peter Holst ceases to be the chief executive officer of the Company other than because of his death, and a qualified replacement, reasonably acceptable to a majority of the holders of the Series F Preferred Shares, is not appointed within thirty (30) business days. In connection with a Triggering Event, the Default Rate is triggered. We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), maintenance of properties and the transfer of assets, among other matters.

 

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During the nine months ended September 30, 2024, 1,648 Series F Preferred Shares were issued upon exercise of 1,648 Preferred Warrants. The Company received gross and net proceeds of $1,607,000 and $1,478,000, respectively. 

 

During the three and nine months ended September 30, 2023, 1,229 and 1,404 shares of Series F Preferred Stock, plus accrued dividends of $43,000 and $47,000, were converted into 49,143 and 52,812 shares of the Company's Common Stock, respectively. During the nine months ended September 30, 2024, 3,033 shares of Series F Preferred Stock, plus accrued dividends of $194,000, were converted into 288,968 shares of the Company’s Common Stock. There were 545 shares of Series F Preferred Stock outstanding and accrued dividends of $16,000 as of September 30, 2024.

 

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

 

  

Series F Preferred Stock Shares

  

Preferred Stock Dividends

  

Weighted Average Conversion Price

  

Common Shares Issued from Conversions

 

March 31, 2023 Issuance

  6,550  $—       — 

2023 Accrued Dividends

  —   343,000       — 

2023 Conversions

  (4,620)  (207,000) $13.60   352,624 

December 31, 2023 Balance

  1,930   136,000       352,624 

2024 Issuances

  1,648   —       — 

2024 Accrued Dividends

  —   76,000       — 

2024 Conversions

  (3,033)  (196,000) $11.20   288,968 

September 30, 2024 Balance

  545  $16,000  $11.17   641,592 

 

Series F Preferred Stock Warrants

 

The Preferred Warrants are exercisable for Series F Preferred Shares at an exercise price of $975. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalizations or other similar transactions involving the Common Stock. The Preferred Warrants expire three years from the date of issuance and are exercisable for cash. For each Preferred Warrant exercised, the Investors shall receive Common Warrants to purchase a number of shares of Common Stock equal to 100% of the number of shares of Common Stock the Investors would receive if the Series F Preferred Shares issuable upon exercise of such Warrant were converted at the applicable Conversion Price. The fair value of the Preferred Warrants was recorded within additional paid-in capital upon issuance.

 

During the nine months ended September 30, 2024, 1,648 Preferred Warrants were exercised at a price of $975 per share. The Company received gross and net proceeds of $1,607,000 and $1,478,000, respectively. In accordance with the exercise provisions of the Preferred Stock, 24,104 Common Warrants were issued during the nine months ended September 30, 2023. See Note 4 - Capital Stock for further discussion of the Common Warrants. As of September 30, 2024, 31,102 Preferred Warrants remained outstanding.

 

In accordance with the Engagement Letter discussed in Note - 4. Capital Stock, during the nine months ended September 30, 2024, we paid SEG a cash fee equal to 8% of the aggregate gross proceeds raised from the exercise of the 1,648 Series F Preferred Warrants. The fee was $129,000. Mr. Schechter did not receive any of the fee paid.

 

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Note 6 - Stock Based Compensation

 

2019 Equity Incentive Plan

 

On December 19, 2019, the Oblong, Inc. 2019 Equity Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders. The 2019 Plan is an omnibus equity incentive plan pursuant to which the Company may grant equity and cash incentive awards to certain key service providers of the Company and its subsidiaries. As of  December 31, 2023 and September 30, 2024, there were no remaining shares in the share pool available for new grants under the 2019 Plan.

 

Stock Options

 

A summary of stock option activity under our plans, and options outstanding as of, and changes made during the nine months ended September 30, 2024 and year ended December 31, 2023 is presented below:

 

  

Outstanding

  

Exercisable

 
  

Number of Options

  

Weighted Average Exercise Price

  

Number of Options

  

Weighted Average Exercise Price

 

Options outstanding and exercisable, December 31, 2022

  417  $5,744.82   250  $8,274.91 

Vested

  —   —   83   1,950.00 

Expired

  (167)  11,435.60   (167)  11,435.60 

Options outstanding and exercisable, December 31, 2023

  250   1,950.00   166   1,950.00 

Vested

  —   —   84   1,950.00 

Options outstanding and exercisable, September 30, 2024

  250  $1,950.00   250  $1,950.00 

 

The intrinsic value of vested and unvested options was not significant for all periods presented. Stock compensation expense related to stock options for the three months ended September 30, 2024 and 2023 was zero and $31,000, respectively. Stock compensation expense related to stock options for the nine months ended September 30, 2024 and 2023 was $62,000 and $93,000, respectively. The stock compensation expense was included as a general and administrative expense on our Condensed Consolidated Statements of Operations. As of September 30, 2024 there is no remaining unamortized stock compensation expense.

 

Restricted Stock

 

As of September 30, 2024 and December 31, 2023, there were no outstanding restricted stock awards ("RSAs") or restricted stock units (“RSUs,” collectively "Restricted Stock"). There was no Restricted Stock activity or expense for the three and nine months ended September 30, 2024. During the nine months ended September 30, 2023, in relation to the departure of certain board members, 2 RSAs became fully vested. The 2 RSAs, along with 49 previously vested RSUs, were delivered in shares of the Company's Common Stock in accordance with the terms of the agreements. This Restricted Stock was issued in 2014 and had been fully expensed, so there was no stock compensation expense related to Restricted Stock for nine months ended September 30, 2023. During the nine months ended September 30, 2023, 4,440 RSUs were granted to certain board members. These RSU's vested immediately upon issuance and the stock compensation related to RSUs for the nine months ended September 30, 2023 was $380,000, which was included in general and administrative expense on our Condensed Consolidated Statements of Operations. 

 

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Note 7 - Net Loss Per Share

 

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares of common stock outstanding does not include any potentially dilutive securities or unvested Restricted Stock. 

 

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, preferred stock, warrants, and unvested Restricted Stock, to the extent they are dilutive. For the three and nine months ended September 30, 2024 and 2023, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive (due to the net loss).

 

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

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Numerator:

                

Net loss

 $(1,040) $(895) $(3,159) $(3,163)

Less: preferred stock dividends

  12   133   76   282 

Less: deemed dividend

  8,974   —   8,974   — 

Less: inducement of warrant exercise

  —   —   —   751 

Less: warrant modification

  —   —   —   25 

Net loss attributable to common stockholders

 $(10,026) $(1,028) $(12,209) $(4,221)

Denominator:

                

Weighted-average number of shares of common stock for basic and diluted net loss per share

  890,943   243,378   735,286   230,214 

Basic and diluted net loss per share

 $(11.25) $(4.22) $(16.60) $(18.34)

 

The following table represents the potential shares that were excluded from the computation of weighted-average number of shares of common stock in computing the diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (due to the net loss):

 

  

As of September 30,

 
  

2024

  

2023

 

Outstanding stock options

  250   250 

Common stock issuable upon conversion of Series F Preferred Stock (1)

  164,857   1,507,155 

Common stock issuable upon conversion of Series F Preferred Warrants (2)

  2,784,921   2,932,486 

Common stock issuable upon conversion of Common Stock warrants

  2,345,603   113,623 

 

 

(1)

Calculation assumes conversion of the stated value, and accrued dividends, of the Series F Preferred Stock into Common Stock at the Floor Price of $11.168 as of September 30, 2024, and at the initial conversion price of $68.40 as of September 30, 2023.

  

 

 

(2)

Calculation assumes exercise of the Series F Preferred Warrants for cash into Series F Preferred Stock and subsequent conversion of the Series F Preferred Stock into Common Stock at the Floor Price of $11.168 per share as of September 30, 2024 and at the initial conversion price of $68.40 as of  September 30, 2023.

  

 

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Note 8 - Segment Reporting

 

The Company currently operates in two segments: (1) “Managed Services” which represents the business surrounding managed services for video collaboration and network applications; and (2) “Collaboration Products” which represents the business surrounding our Mezzanine™ product offerings.

 

Certain information concerning the Company’s segments for the three and nine months ended September 30, 2024 and 2023 is presented in the following tables (in thousands):

 

  

Three Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $510  $68  $—  $578 

Cost of revenues

  295   204   —   499 

Gross profit

 $215  $(136) $—  $79 

Gross profit %

  42%  (200)%     14%
                 

Allocated operating expenses

 $60  $104  $—  $164 

Unallocated operating expenses

  —   —   987   987 

Total operating expenses

 $60  $104  $987  $1,151 
                 

Operating income (loss)

 $155  $(240) $(987) $(1,072)

Interest income, net

  (31)  (1)  —   (32)

Income (loss) before income taxes

  186   (239)  (987)  (1,040)

Income tax expense

  —   —   —   — 

Net income (loss)

 $186  $(239) $(987) $(1,040)

 

  

Three Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $603  $269  $—  $872 

Cost of revenues

  398   250   —   648 

Gross profit

 $205  $19  $—  $224 

Gross profit %

  34%  7%     26%
                 

Allocated operating expenses

 $—  $151  $—  $151 

Unallocated operating expenses

  —   —  $998   998 

Total operating expenses

 $—  $151  $998  $1,149 
                 

Operating income (loss)

 $205  $(132) $(998) $(925)

Interest income, net

  (35)  5   —   (30)

Income (loss) before income taxes

  240   (137)  (998)  (895)

Income tax expense

  —   —   —   — 

Net income (loss)

 $240  $(137) $(998) $(895)

 

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Nine Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,540  $275  $—  $1,815 

Cost of revenues

  995   624   —   1,619 

Gross profit

 $545  $(349) $—  $196 

Gross profit %

  35%  (127)%     11%
                 

Allocated operating expenses

 $122  $347  $—  $469 

Unallocated operating expenses

  —   —   3,001   3,001 

Total operating expenses

 $122  $347  $3,001  $3,470 
                 

Operating income (loss)

 $423  $(696) $(3,001) $(3,274)

Interest income, net

  (98)  (26)  —   (124)

Income (loss) before income taxes

  521   (670)  (3,001)  (3,150)

Income tax expense

  6   3   —   9 

Net income (loss)

 $515  $(673) $(3,001) $(3,159)

 

 

  

Nine Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,933  $933  $—  $2,866 

Cost of revenues

  1,288   956   —   2,244 

Gross profit

 $645  $(23) $—  $622 

Gross profit %

  33%  (2)%     22%
                 

Allocated operating expenses

 $3  $61  $—  $64 

Unallocated operating expenses

  —   —   3,777   3,777 

Total operating expenses

 $3  $61  $3,777  $3,841 
                 

Operating income (loss)

 $642  $(84) $(3,777) $(3,219)

Interest income, net

  (69)  (25)  —   (94)

Income (loss) before income taxes

  711   (59)  (3,777)  (3,125)

Income tax expense

  7   31   —   38 

Net income (loss)

 $704  $(90) $(3,777) $(3,163)

 

Unallocated operating expenses in Corporate include costs for the three and nine months ended September 30, 2024 and 2023 that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees, and other similar corporate expenses.

 

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For the three months ended September 30, 2023, 11% of our revenue was attributable to the United Kingdom. For the three months ended September 30, 2024, and the nine months ended September 30, 2024 and 2023, there was no material revenue attributable to any individual foreign country.

 

Revenue by geographic area is allocated as follows (in thousands):

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Domestic

 $227  $356  $698  $1,356 

Foreign

 $351  $516   1,117   1,510 
  $578  $872  $1,815  $2,866 

 

 

Disaggregated information for the Company’s revenue has been recognized in the accompanying Condensed Consolidated Statements of Operations and is presented below according to contract type (in thousands):

 

  

Three Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $6   1% $38   4%

Network services

  502   87%  557   64%

Professional and other services

  2   —%  8   1%

Total Managed Services revenue

 $510   88% $603   69%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $68   12% $268   31%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $68   12% $269   31%

Total revenue

 $578   100% $872   100%

 

 

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Nine Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $41   2% $148   5%

Network services

  1,489   82%  1,758   61%

Professional and other services

  10   1%  27   1%

Total Managed Services revenue

 $1,540   85% $1,933   67%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $275   15% $932   33%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $275   15% $933   33%

Total revenue

 $1,815   100% $2,866   100%

 

The Company considers a significant customer to be one that comprises more than 10% of the Company’s consolidated revenues or accounts receivable. 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.

 

Concentration of consolidated revenues was as follows:

 

   

Three Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  87%  60%

 

 

   

Nine Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  83%  56%

 

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Concentration of accounts receivable was as follows:

 

   

As of September 30,

 
   

2024

  

2023

 
   

% of Accounts

  

% of Accounts

 
 

Segment

 

Receivable

  

Receivable

 

Customer A

Managed Services

  15%  —%

Customer B

Collaboration Products

  55%  —%

Customer C

Collaboration Products

  —%  38%

Customer D

Collaboration Products

  —%  12%

Customer E

Managed Services

  11%  —%

Customer F

Collaboration Products

  11%  —%

 
 

Note 9 - Commitments and Contingencies

 

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. As of the date hereof, we are not party to any legal proceedings that we currently believe will have a material adverse effect on our business, financial position, results of operations or liquidity.

 

COVID-19

 

On March 11, 2020, the World Health Organization (“WHO”) announced that infections of the novel Coronavirus (COVID-19) had become pandemic, and on March 13, 2020, the U.S. President announced a National Emergency relating to the disease. In May 2023, the WHO declared COVID-19 over as a global health emergency. Customers generally use our Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces. Revenue declines for our Collaboration Products business 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. 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. Although the Company 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.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

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 flagship 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. As discussed below, sales of our Mezzanine product have been adversely affected 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 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’ enterprise. 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.

 

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 the purchasing and reselling of this connectivity.

 

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Strategy

 

In recent years, our Company has faced significant challenges, leading to 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.

 

 

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Oblong’s Results of Operations

 

Three Months Ended September 30, 2024 (the “2024 Third Quarter”) compared to the Three Months Ended September 30, 2023 (the “2023 Third Quarter”)

 

Certain information concerning the Company’s segments for the three months ended September 30, 2024 and 2023 is presented below (in thousands):

 

   

Three Months Ended September 30, 2024

  
   

Managed Services

    

Collaboration Products

    

Corporate

    

Total

  

Revenue

   $ 510     $ 68     $ —     $ 578  

Cost of revenues

     295       204       —       499  

Gross profit

   $ 215     $ (136 )   $ —     $ 79  

Gross profit %

     42 %     (200 )%             14 %
                                 

Allocated operating expenses

   $ 60     $ 104     $ —     $ 164  

Unallocated operating expenses

     —       —       987       987  

Total operating expenses

   $ 60     $ 104     $ 987     $ 1,151  
                                 

Operating income (loss)

   $ 155     $ (240 )   $ (987 )   $ (1,072 )

Interest income, net

     (31 )     (1 )     —       (32 )

Income (loss) before income taxes

     186       (239 )     (987 )     (1,040 )

Income tax expense

     —       —       —       —  

Net income (loss)

   $ 186     $ (239 )   $ (987 )   $ (1,040 )

 

   

Three Months Ended September 30, 2023

  
   

Managed Services

    

Collaboration Products

    

Corporate

    

Total

  

Revenue

   $ 603     $ 269     $ —     $ 872  

Cost of revenues

     398       250       —       648  

Gross profit

   $ 205     $ 19     $ —     $ 224  

Gross profit %

     34 %     7 %             26 %
                                 

Allocated operating expenses

   $ —     $ 151     $ —     $ 151  

Unallocated operating expenses

     —       —     $ 998       998  

Total operating expenses

   $ —     $ 151     $ 998     $ 1,149  
                                 

Operating income (loss)

   $ 205     $ (132 )   $ (998 )   $ (925 )

Interest income, net

     (35 )     5       —       (30 )

Income (loss) before income taxes

     240       (137 )     (998 )     (895 )

Income tax expense

     —       —       —       —  

Net income (loss)

   $ 240     $ (137 )   $ (998 )   $ (895 )

 

Unallocated operating expenses in Corporate include costs during the 2024 and 2023 Third Quarters that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees, and other similar corporate expenses.

 

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Revenue. Total revenue decreased 33.7% in the 2024 Third Quarter compared to the 2023 Third 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.

 

   

Three Months Ended September 30,

  
   

2024

    

% of Revenue

    

2023

    

% of Revenue

  

Revenue: Managed Services

                                

Video collaboration services

   $ 6       1 %   $ 38       4 %

Network services

     502       87 %     557       64 %

Professional and other services

     2       — %     8       1 %

Total Managed Services revenue

   $ 510       88 %   $ 603       69 %
                                 

Revenue: Collaboration Products

                                

Visual collaboration product offerings

   $ 68       12 %   $ 268       31 %

Professional and other services

     -       — %     1       — %

Total Collaboration Products revenue

   $ 68       12 %   $ 269       31 %

Total revenue

   $ 578       100 %   $ 872       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 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 three months ended September 30, 2024, one customer made up 97% of Managed Services revenue. For the three months ended September 30, 2023, this same customer made up 88% 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. 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 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. 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.

 

Cost of Revenue (exclusive of amortization). Cost of revenue, exclusive of amortization and casualty loss, 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):

 

   

Three Months Ended September 30,

  
   

2024

    

2023

  

Cost of Revenue

                

Managed Services

   $ 295     $ 398  

Collaboration Products

     204       250  

Total cost of revenue

   $ 499     $ 648  

 

The decrease in our consolidated cost of revenue is mainly attributable to lower costs associated with the decrease in revenue during the same period, and by a decrease in the expense related to our reserve for obsolescence on our inventory asset for our Collaboration Products segment, partially offset by severance costs incurred during the 2024 Third Quarter related to certain headcount reductions in September 2024. Our consolidated gross profit as a percentage of revenue was 14% in the 2024 Third Quarter compared to a consolidated gross profit as a percentage of revenue of 26% in the 2023 Third Quarter.

 

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Our Managed Services segment recorded a 42% gross profit as a percentage of sales for the 2024 Third Quarter compared to 34% in the 2023 Third Quarter.

 

Our Collaboration Products segment recorded a negative gross profit as a percentage of sales of 200% for the 2024 Third Quarter compared to a gross profit as a percentage of sales of 7% in the 2023 Third Quarter. This decrease was mainly attributable to an increase in personnel costs as a percentage of revenue, severance costs of $30,000 incurred in the 2024 Third Quarter related to headcount reductions in September 2024, partially offset by a reduction in the expense related to our inventory obsolescence reserve of $24,000 in the 2024 Third Quarter compared to the 2023 Third Quarter.

 

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

 

   

Three Months Ended September 30,

                  
   

2024

    

2023

    

$ Change

    

% Change

  

Operating expenses:

                                

Research and development

   $ 38     $ 5     $ 33       660 %

Sales and marketing

     66       81       (15 )     (19 )%

General and administrative

     1,047       977       70       7 %

Amortization

     —       86       (86 )     (100 )%

Total operating expenses

   $ 1,151     $ 1,149     $ 2       0 %

 

Research and Development. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The increase in research and development expenses for the 2024 Third Quarter compared to the 2023 Third Quarter is primarily attributable to an increase in consulting, and outsourced labor costs between these periods.

 

Sales and Marketing Expenses. The decrease in sales and marketing expenses for the 2024 Third Quarter compared to the 2023 Third Quarter is primarily attributable to reduced personnel expenses during the 2024 Third Quarter, partially offset by severance costs of $16,000 related to headcount reductions in September 2024.

 

General and Administrative Expenses. General and administrative expenses include direct corporate expenses and costs of personnel in the various corporate support categories, including executive, finance and accounting, legal, human resources and information technology. The increase in general and administrative expenses for the 2024 Third Quarter compared to the 2023 Third Quarter is primarily attributable to increased professional service expenses as a result of severance costs of $60,000 related to headcount reductions in September 2024, partially offset by reduced stock compensation expense as a result of stock options being fully expensed.

 

Amortization. The decrease in amortization expense for the 2024 Third Quarter compared to the 2023 Third Quarter is attributable to the impairment of certain assets during the year ended 2023.

 

Interest Income, Net. Interest income, net for the 2024 Third Quarter and the 2023 Third Quarter is primarily comprised of interest income related to our cash accounts.

 

Loss from Operations. The increase in the Company’s loss from operations for the 2024 Third Quarter compared to the 2023 Third Quarter is mainly attributable to the severance costs we recorded in the 2024 Third Quarter, as addressed above.

 

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Oblong’s Results of Operations

 

Nine Months Ended September 30, 2024 (the “2024 Third Quarter”) compared to the Nine Months Ended September 30, 2023 (the “2023 Third Quarter”)

 

Certain information concerning the Company’s segments for the nine months ended September 30, 2024 and 2023 is presented below (in thousands):

 

 

   

Nine Months Ended September 30, 2024

  
   

Managed Services

    

Collaboration Products

    

Corporate

    

Total

  

Revenue

   $ 1,540     $ 275     $ —     $ 1,815  

Cost of revenues

     995       624       —       1,619  

Gross profit

   $ 545     $ (349 )   $ —     $ 196  

Gross profit %

     35 %     (127 )%             11 %
                                 

Allocated operating expenses

   $ 122     $ 347     $ —     $ 469  

Unallocated operating expenses

     —       —       3,001       3,001  

Total operating expenses

   $ 122     $ 347     $ 3,001     $ 3,470  
                                 

Operating income (loss)

   $ 423     $ (696 )   $ (3,001 )   $ (3,274 )

Interest income, net

     (98 )     (26 )     —       (124 )

Income (loss) before income taxes

     521       (670 )     (3,001 )     (3,150 )

Income tax expense

     6       3       —       9  

Net income (loss)

   $ 515     $ (673 )   $ (3,001 )   $ (3,159 )

 

   

Nine Months Ended September 30, 2023

  
   

Managed Services

    

Collaboration Products

    

Corporate

    

Total

  

Revenue

   $ 1,933     $ 933     $ —     $ 2,866  

Cost of revenues

     1,288       956       —       2,244  

Gross profit

   $ 645     $ (23 )   $ —     $ 622  

Gross profit %

     33 %     (2 )%             22 %
                                 

Allocated operating expenses

   $ 3     $ 61     $ —     $ 64  

Unallocated operating expenses

     —       —       3,777       3,777  

Total operating expenses

   $ 3     $ 61     $ 3,777     $ 3,841  
                                 

Operating income (loss)

   $ 642     $ (84 )   $ (3,777 )   $ (3,219 )

Interest income, net

     (69 )     (25 )     —       (94 )

Income (loss) before income taxes

     711       (59 )     (3,777 )     (3,125 )

Income tax expense

     7       31       —       38  

Net income (loss)

   $ 704     $ (90 )   $ (3,777 )   $ (3,163 )

 

Unallocated operating expenses in Corporate include costs during the nine months ended September 30, 2024 and 2023 that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees, and other similar corporate expenses.

 

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Revenue. Total revenue decreased 36.7% in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. 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.

 

   

Nine Months Ended September 30,

  
   

2024

    

% of Revenue

    

2023

    

% of Revenue

  

Revenue: Managed Services

                                

Video collaboration services

   $ 41       2 %   $ 148       5 %

Network services

     1,489       82 %     1,758       61 %

Professional and other services

     10       1 %     27       1 %

Total Managed Services revenue

   $ 1,540       85 %   $ 1,933       67 %
                                 

Revenue: Collaboration Products

                                

Visual collaboration product offerings

   $ 275       15 %   $ 932       33 %

Professional and other services

     -       — %     1       — %

Total Collaboration Products revenue

   $ 275       15 %   $ 933       33 %

Total revenue

   $ 1,815       100 %   $ 2,866       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 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 nine months ended September 30, 2024, one customer made up 98% of Managed Services revenue. For the nine months ended September 30, 2023, this same customer made up 87% 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. 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 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. 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.

 

Cost of Revenue (exclusive of amortization). Cost of revenue, exclusive of amortization and casualty loss, 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):

 

   

Nine Months Ended September 30,

  
   

2024

    

2023

  

Cost of Revenue

                

Managed Services

   $ 995     $ 1,288  

Collaboration Products

     624       956  

Total cost of revenue

   $ 1,619     $ 2,244  

 

The decrease in our consolidated cost of revenue is mainly attributable to lower costs associated with the decrease in revenue during the same period and a decrease in the expense related to our reserve for obsolescence on our inventory asset for our Collaboration Products segment, partially offset by severance costs during the nine months ended September 30, 2024 related to certain headcount reductions in September 2024. Our consolidated gross profit as a percentage of revenue was 11% in the nine months ended September 30, 2024 compared to a consolidated gross profit as a percentage of revenue of 22% in the nine months ended September 30, 2023.

 

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Our Managed Services segment recorded a 35% gross profit as a percentage of sales for the nine months ended September 30, 2024 compared to a gross profit as a percentage of revenue of 33% in the nine months ended September 30, 2023.

 

Our Collaboration Products segment recorded a negative gross profit as a percentage of sales of 127% for the nine months ended September 30, 2024 compared to a negative gross profit as a percentage of sales of 2% in the nine months ended September 30, 2023. This decrease was mainly attributable to an increase in personnel costs as a percentage of revenue and severance costs of $30,000 during the nine months ended September 30, 2024, partially offset by a reduction in the expense related to our inventory obsolescence reserve of $92,000 in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

 

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

 

   

Nine Months Ended September 30,

                  
   

2024

    

2023

    

$ Change

    

% Change

  

Operating expenses:

                                

Research and development

   $ 153     $ 16     $ 137       856 %

Sales and marketing

     177       241       (64 )     (27 )%

General and administrative

     3,140       3,723       (583 )     (16 )%

Amortization

     —       259       (259 )     (100 )%

Casualty gain (insurance proceeds)

     —       (400 )     400       (100 )%

Impairment charges

     —       2       (2 )     (100 )%

Total operating expenses

   $ 3,470     $ 3,841     $ (371 )     (10 )%

 

Research and Development. Research and development expenses include internal and external costs related to developing features and enhancements to our existing product offerings. The increase in research and development expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily attributable to an increase in consulting, and outsourced labor costs between these periods.

 

Sales and Marketing Expenses. The decrease in sales and marketing expenses for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily attributable to lower personnel costs due to reduced marketing costs between these periods, partially offset by severance costs of $16,000 during the nine months ended September 30, 2024 related to headcount reductions in September 2024.

 

General and Administrative Expenses. General and administrative expenses include direct corporate expenses and costs of personnel 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 nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is primarily attributable to reduced stock compensation expense as a result of stock options being fully expensed, partially offset by severance costs of $60,000 during the nine months ended September 30, 2024 due to headcount reductions in September 2024.

 

Casualty Gain/Loss. In June 2022, the Company discovered that $533,000 of inventory was stolen from the Company's warehouse in City of Industry, California, and we recorded a casualty loss in operating expenses. During the nine months ended September 30, 2023, we recorded a recovery payment from one of our insurance policies of $400,000 as an offset to this casualty loss.

 

Amortization. The decrease in amortization expense for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is attributable to the impairment of certain assets during the year ended 2023.

 

Interest Income, Net. Interest income, net for the nine months ended September 30, 2024 and 2023 is primarily comprised of interest income related to our cash accounts.

 

Loss from Operations. The increase in the Company’s loss from operations for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 is mainly attributable to the casualty loss recovery we recorded during the nine months ended September 30, 2023, the severance costs recorded during the nine months ended September 30, 2024, and lower gross profit, as addressed above.

 

Off-Balance Sheet Arrangements

 

As of September 30, 2024, 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.

 

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Critical Accounting Policies

 

There have been no changes to our critical accounting policies during the nine months ended September 30, 2024. 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 2023 Annual Report.

 

Liquidity and Capital Resources

 

As of September 30, 2024, we had $5,619,000 in cash and cash equivalents and working capital of $4,665,000. For the nine months ended September 30, 2024 we incurred a net loss of $3,159,000 and we used $2,521,000 of net cash in operating activities.

 

Financing activities provided $2,149,000 of net cash for the nine months ended September 30, 2024, consisting of net proceeds from warrant exercises.

 

In September 2024, in order to reduce operating expenses and preserve capital, the Company reduced its workforce by nine employees. This resulted in severance costs of $106,000 which are recorded in operating expenses for the three and nine months ended September 30, 2024 and is included are accrued compensation as of September 30, 2024. The entirety of the severance costs were paid out in October 2024.

 

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 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 in one or more debt and/or equity offerings. There can be no assurance that we will be successful in raising 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.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

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

 

ITEM 4. CONTROLS AND PROCEDURES

 

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 September 30, 2024. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, 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 September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

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PART II - OTHER INFORMATION

 

ITEM 1. 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. As of the date hereof, we are not party to any legal proceedings that we currently believe will have a material adverse effect on our business, financial position, results of operations, or liquidity.

 

ITEM 1A. RISK FACTORS

 

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 2023 Annual Report. Except as set forth below, there have been no material changes to these risks during the nine months ended September 30, 2024. The risks described in the 2023 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, also may 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 and nine months ended September 30, 2024, one major customer accounted for 87% and 83% 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. 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 of 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 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. 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 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, Nasdaq Listing Rule 5810(c)(3)(A)(iv) states that any listed company that fails to meet Listing Rule 5810(c)(3)(A) after effecting one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one will not be eligible for an automatic 180-day grace compliance period and the Nasdaq Listing Qualifications Department is obligated to immediately issue a delisting determination.

 

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Unregistered Sales of Equity Securities by the Company

 

There have been no unregistered sales of securities by the Company during the period covered by this Report that have not been previously reported in a Current Report on Form 8-K.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

 

ITEM 5. OTHER INFORMATION

 

(c) During the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

 

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Table of Contents
 
 

ITEM 6. EXHIBITS

 

Exhibit
Number

  

Description

3.1*

  

Amended and Restated Certificate of Incorporation, as amended.

4.1

  

Certificate of Designations, Preferences and Rights of Series D Preferred Stock (filed as Exhibit 4.6 to the Registrant’s Current Report on Form 8-K filed with the SEC on September 24, 2007, and incorporated herein by reference).

4.2

  

Certificate of Designations, Preferences and Rights of Series A-2 Preferred Stock of the Registrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 11, 2009, and incorporated herein by reference).

4.3

  

Certificate of Designations, Preferences and Rights of Perpetual Series B Preferred Stock of the Registrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on March 30, 2010, and incorporated herein by reference).

4.4

  

Certificate of Designations, Preferences and Rights of Perpetual Series B-1 Preferred Stock of the Registrant (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 9, 2011, and incorporated herein by reference).

4.5

  

Certificate of Designations of Rights, Powers, Preferences, Privileges and Restrictions of the 0% Series B Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on November 14, 2017, and incorporated herein by reference).

4.6

  

Certificate of Designations of Rights, Powers, Preferences, Privileges and Restrictions of the 0% Series C Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on January 25, 2018, and incorporated herein by reference).

4.7

  

Certificate of Designations of the 6.0% Series D Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference).

4.8

  

Certificate of Designations of the 6.0% Series E Convertible Preferred Stock (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on October 7, 2019, and incorporated herein by reference).

4.9

  

Certificate of Designations of the 9.0% Series F Convertible Preferred Stock (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2023, and incorporated herein by reference).

4.10

  

Form of Common Warrant (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2023, and incorporated herein by reference).

4.11

  

Form of Preferred Warrant (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2023, and incorporated herein by reference).
10.1   Amendment to Waiver, dated as of September 13, 2024, by and among Oblong, Inc. and the investors named therein (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the SEC on September 13, 2024, and incorporated herein by reference).

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

  

Inline XBRL Instance Document

101.SCH

  

Inline XBRL Taxonomy Extension Schema

101.CAL

  

Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF

  

Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB

  

Inline XBRL Taxonomy Extension Label Linkbase

101.PRE

  

Inline XBRL Taxonomy Extension Presentation Linkbase
104   Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

 

* Filed herewith.

** Furnished herewith.

 

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SIGNATURES

 

In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.    

 

 

OBLONG, INC.

  
       

November 7, 2024

By:

/s/ Peter Holst

  
   

Peter Holst

  
   

Chief Executive Officer

  
   

(Principal Executive Officer)

  

 

 

November 7, 2024

By:

/s/ David Clark

  
   

David Clark

  
   

Chief Financial Officer

  
   

(Principal Financial and Accounting Officer)

  

 

-33-

EXHIBIT 3.1

 

CONFORMED COPY TO REFLECT AMENDMENTS MADE

THROUGH SEPTEMBER 30, 2024

 

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

OF

OBLONG, INC.

 

FIRST:                  The name of the Corporation is Oblong, Inc.

 

SECOND:         The address of its registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, 19808, County of New Castle. The name of its registered agent at such address is Corporation Service Company.

 

THIRD:         The nature of the business of the Corporation and the objects or purposes to be transacted, promoted or carried on by it are as follows: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law (the “GCL”) of the State of Delaware.

 

FOURTH:         The total number of shares of all classes of stock that the Corporation is authorized to issue is one hundred fifty-five million (155,000,000) shares, consisting of one hundred fifty million (150,000,000) shares of Common Stock with a par value of $0.0001 per share and five million (5,000,000) shares of Preferred Stock with a par value of $0.0001 per share.

 

Upon the effectiveness of this Certificate of Amendment [filed with the Secretary of State of the State of Delaware on January 10, 2011], every four (4) issued and outstanding shares of Common Stock of the Corporation shall be changed and reclassified into one (1) share of Common Stock, which shares shall be fully paid and nonassessable shares of Common Stock of the Corporation; provided, however, that in lieu of fractional interests in shares of Common Stock to which any stockholder would otherwise be entitled pursuant hereto (taking into account all shares of Common Stock owned by such stockholder), any such fractional interests in shares of Common Stock shall be paid in cash in an amount equal to such fraction multiplied by the average of the high and low trading prices of the Corporation’s Common Stock on the OTC Bulletin Board during regular trading hours for the five trading days immediately preceding the effectiveness of this Certificate of Amendment [on January 10, 2011].

 

Upon the filing and effectiveness (the “[2019] Effective Time”), pursuant to the Delaware General Corporation Law, of this Certificate of Amendment to the Certificate of Incorporation of the Corporation [filed with the Secretary of State of the State of Delaware on April 17, 2019], each ten (10) shares of Common Stock either issued and outstanding or held by the Corporation in treasury stock immediately prior to the [2019] Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) fully paid and nonassessable share of Common Stock (the “[2019] Reverse Stock Split”). No fractional shares shall be issued in connection with the [2019] Reverse Stock Split. In lieu of any fractional share of Common Stock to which a stockholder would otherwise be entitled in connection with the [2019] Reverse Stock Split (taking into consideration all shares of Common Stock owned by such stockholder), the Corporation will issue that number of shares of Common Stock resulting from the [2019] Reverse Stock Split as rounded up to the nearest whole share upon the submission of a transmission letter by a stockholder holding the shares in book-entry form and, where shares are held in certificated form, upon the surrender of the stockholder’s Old Certificates (as defined below). Each certificate that immediately prior to the [2019] Effective Time represented shares of Common Stock (“[2019] Old Certificates”), shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the [2019] Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above.

 

The par value per share of the Corporation’s capital stock and the total number of shares of all classes of capital stock that the Corporation is authorized to issue pursuant to this Article IV shall, in each case, not be affected by the [2019] Reverse Stock Split.

 

 

 
 

 

 

Upon the filing and effectiveness (the “[2023] Effective Time”), pursuant to the Delaware General Corporation Law, of this Certificate of Amendment to the Certificate of Incorporation of the Corporation [filed with the Secretary of State of the State of Delaware on December 30, 2022 and effective on January 3, 2023], each fifteen (15) shares of Common Stock either issued and outstanding or held by the Corporation in treasury stock immediately prior to the [2023] Effective Time, shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) fully paid and nonassessable share of Common Stock (the “[2023] Reverse Stock Split”). No fractional shares shall be issued in connection with the [2023] Reverse Stock Split. In lieu of any fractional share of Common Stock to which a stockholder would otherwise be entitled in connection with the [2023] Reverse Stock Split (taking into consideration all shares of Common Stock owned by such stockholder), the Corporation will issue that number of shares of Common Stock resulting from the [2023] Reverse Stock Split as rounded up to the nearest whole share upon the submission of a transmission letter by a stockholder holding the shares in book-entry form and, where shares are held in certificated form, upon the surrender of the stockholder’s [2023] Old Certificates (as defined below). Each certificate that immediately prior to the [2023] Effective Time, represented shares of Common Stock (“[2023] Old Certificates”), shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the [2023] Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above in this paragraph.

 

The par value per share of the Corporation’s capital stock and the total number of shares of all classes of capital stock that the Corporation is authorized to issue pursuant to this Article IV shall, in each case, not be affected by the [2023] Reverse Stock Split.

 

Upon the filing and effectiveness (the “[2024] Effective Time”), pursuant to the Delaware General Corporation Law, of this Certificate of Amendment to the Certificate of Incorporation of the Corporation [filed with the Secretary of State of the State of Delaware on August 22, 2024 and effective on August 23, 2024], each forty (40) shares of Common Stock either issued and outstanding or held by the Corporation in treasury stock immediately prior to the [2024] Effective Time shall, automatically and without any action on the part of the respective holders thereof, be combined and converted into one (1) fully paid and nonassessable share of Common Stock (the “[2024] Reverse Stock Split”). No fractional shares shall be issued in connection with the [2024] Reverse Stock Split. In lieu of any fractional share of Common Stock to which a stockholder would otherwise be entitled in connection with the [2024] Reverse Stock Split (taking into consideration all shares of Common Stock owned by such stockholder), the Corporation will issue that number of shares of Common Stock resulting from the [2024] Reverse Stock Split as rounded up to the nearest whole share upon the submission of a transmission letter by a stockholder holding the shares in book-entry form and, where shares are held in certificated form, upon the surrender of the stockholder’s [2024] Old Certificates (as defined below). Each certificate that immediately prior to the [2024] Effective Time represented shares of Common Stock (“[2024] Old Certificates”), shall thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the [2024] Old Certificate shall have been combined, subject to the elimination of fractional share interests as described above.

 

The par value per share of the Corporation’s capital stock and the total number of shares of all classes of capital stock that the Corporation is authorized to issue pursuant to this Article IV shall, in each case, not be affected by the [2024] Reverse Stock Split.

 

FIFTH:                  The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

 

a)    The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

 

b)    The directors shall have concurrent power with the stockholders to make, alter, amend, change, add to or repeal the By-Laws of the Corporation.

 

c)    The number of directors of the Corporation shall be as from time to time fixed by, or in the manner provided in, the By-Laws of the Corporation. Election of directors need not be by written ballot unless the By-Laws so provide.

 

 

 
 

 

d)    No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the GCL or (iv) for any transaction from which the director derived an improper personal benefit. Any repeal or modification of this Article Seventh by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

 

e)    In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as my be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Certificate of Incorporation, and any By-Laws adopted by the stockholders; provided, however, that no By-Laws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such By-Laws had not been adopted.

 

SIXTH:         Meetings of stockholders may be held within or without the State of Delaware, as the By-Laws may provide. The books of the Corporation my be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as my be designated from time to time by the Board of Directors or in the By-Laws of the Corporation.

 

SEVENTH:         The Board of Directors shall not be divided into classes. Each director shall be elected to serve a one-year term expiring at the next Annual Meeting of Shareholders and until her or her successor is duly elected and qualified.

 

EIGHTH:         Whenever a compromise or arrangement is proposed between this Corporation and its creditors or any class of them and/or between this Corporation and its stockholders of any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this Corporation or any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this Corporation under the provisions of Section 291 of Title 8 of the Delaware Code or on the application of trustees in dissolution or of any receiver or receivers appointed for this Corporation under the provisions of Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, to be summoned in such manner as the said court directs. If a majority in number representing three-fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this Corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this Corporation as a consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this Corporation, as the case may be, and also on this Corporation.

 

NINTH:         The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

 

 

 

 

 
 

 

 

ANNEX I

 

Certificates of Designation and Certificates Eliminating Reference

 

The Corporation has filed the following Certificates of Designation, Preferences and Rights of Preferred Stock and Certificates Eliminating Reference with the Secretary of State of the State of Delaware:

 

 

1.

Series A Preferred Stock of Wire One Technologies, Inc. filed June 14, 2000;
 

a.

Certificate of Amendment filed June 22, 2001;
 

b.

Certificate Eliminating Reference to Series A Preferred Stock from the Certificate of Incorporation of Glowpoint, Inc. filed December 6, 2007*;
 

2.

Series B Convertible Preferred Stock of Glowpoint, Inc. filed January 22, 2004;
 

a.

Certificate Eliminating Reference to Series B Convertible Preferred Stock from the Certificate of Incorporation of Glowpoint, Inc. filed December6, 2007*;
 

3.

Series C Preferred Stock of Glowpoint, Inc. filed September 21, 2007;
 

a.

Certificate Eliminating Reference to Series C Preferred Stock from the Certificate of Incorporation of Glowpoint, Inc. filed August 6, 2009*;
 

4.

Series D Preferred Stock of Glowpoint, Inc. filed September 21, 2007*;
 

5.

Series A Preferred Stock of Glowpoint, Inc. filed November 25, 2008;
 

a.

Certificate Eliminating Reference to Series A Preferred Stock from the Certificate of Incorporation of Glowpoint, Inc. filed August 6, 2009*;
 

6.

Series A-1 Convertible Preferred Stock of Glowpoint, Inc. filed March 16, 2009;
 

a.

Certificate Eliminating Reference to Series A-1 Convertible Preferred Stock from the Certificate of Incorporation of Glowpoint, Inc. filed April 6, 2010*;
 

7.

Series A-2 Convertible Preferred Stock of Glowpoint, Inc. filed August 10, 2009*;
 

8.

Perpetual Series B Preferred Stock of Glowpoint, Inc. filed March 29, 2010*;
 

9.

Series B-1 Preferred Stock of Glowpoint, Inc. filed August 3, 2011*;
 

10.

0% Series B Convertible Preferred Stock of Glowpoint, Inc. filed October 23, 2017*;
 

a.

a Certificate of Correction to the Certificate of Designation of the 0% Series B Convertible Preferred Stock of Glowpoint. Inc., filed November 9, 2017*;
 

11.

0% Series C Convertible Preferred Stock of Glowpoint, Inc. filed January 22, 2018*;
 

12.

6.0% Series D Convertible Preferred Stock of Glowpoint, Inc. filed October 1, 2019*;
 

13.

6.0% Series E Convertible Preferred Stock of Glowpoint, Inc. filed October 1, 2019*; and
 

14.

Series F Convertible Preferred Stock of Oblong, Inc. filed March 31, 2023*.

 

 

* Publicly filed as an exhibit to the Corporation’s filings with the Securities and Exchange Commission.

 

 

 

Exhibit 31.1

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

 

I, Peter Holst, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Oblong, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: November 7, 2024

 

  /s/ Peter Holst  
  Peter Holst  
  Chief Executive Officer
  (principal executive officer)

 

 

Exhibit 31.2

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, David Clark, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of Oblong, Inc.;

 

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

 

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

 

 

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

 

 

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

Date: November 7, 2024

 

  /s/ David Clark  
  David Clark  
  Chief Financial Officer
  (principal financial and accounting officer)

 

 

Exhibit 32.1

 

SECTION 906 CERTIFICATION

 

The undersigned officers of Oblong, Inc., a Delaware corporation (the "Company"), do hereby certify, in accordance with 18 U.S.C. Section 1350, as created pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

 

1.

The accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2024 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

 

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 7, 2024

 

  /s/ Peter Holst  
  Peter Holst  
  Chief Executive Officer
     
  /s/ David Clark  
  David Clark  
  Chief Financial Officer

 

 
v3.24.3
Document And Entity Information - shares
 9 Months Ended
Sep. 30, 2024
Nov. 05, 2024
Document Information [Line Items]    
Entity Central Index Key 0000746210  
Entity Registrant Name Oblong, Inc.  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2024  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2024  
Document Transition Report false  
Entity File Number 001-35376  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 77-0312442  
Entity Address, Address Line One 110 16th Street, Suite 1400-1024  
Entity Address, City or Town Denver  
Entity Address, State or Province CO  
Entity Address, Postal Zip Code 80202  
City Area Code 213  
Local Phone Number 683-8863 ext. 5  
Title of 12(b) Security Common Stock, par value $0.0001 per share  
Trading Symbol OBLG  
Security Exchange Name NASDAQ  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   1,144,926
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Current assets:    
Cash and cash equivalents $ 5,619,000 $ 5,990,000
Accounts receivable, net 33,000 424,000
Inventory, net 50,000 239,000
Prepaid expenses and other current assets 283,000 243,000
Total current assets 5,985,000 6,896,000
Operating lease - right of use asset, net 0 17,000
Other assets 8,000 12,000
Total assets 5,993,000 6,925,000
Current liabilities:    
Accounts payable 93,000 211,000
Accrued expenses and other current liabilities 1,175,000 1,038,000
Current portion of deferred revenue 52,000 132,000
Operating lease liabilities 0 17,000
Total current liabilities 1,320,000 1,398,000
Long-term liabilities:    
Deferred revenue, net of current portion 2,000 26,000
Total liabilities 1,322,000 1,424,000
Commitments and contingencies (see Note 9)
Stockholders’ equity:    
Preferred stock Series F, convertible; $0.0001 par value; $560,884 stated value; 42,000 shares authorized, 545 and 1,930 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 0 0
Common stock, $0.0001 par value; 150,000,000 shares authorized; 1,071,545 shares issued and 1,071,356 shares outstanding at September 30, 2024 and 573,644 shares issued and 573,455 outstanding at December 31, 2023 0 0
Treasury Stock, 189 common shares (181,000) (181,000)
Additional paid-in capital 236,242,000 233,913,000
Accumulated deficit (231,390,000) (228,231,000)
Total stockholders' equity 4,671,000 5,501,000
Total liabilities and stockholders’ equity $ 5,993,000 $ 6,925,000
v3.24.3
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, stated value $ 560,884 $ 560,884
Preferred stock, shares authorized (in shares) 42,000 42,000
Preferred stock, shares issued (in shares) 545 1,930
Preferred stock, shares outstanding (in shares) 545 1,930
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, auhtoirzed (in shares) 150,000,000 150,000,000
Common stock, issued (in shares) 1,071,545 573,644
Common stock, outstanding (in shares) 1,071,356 573,455
Treasury stock, shares (in shares) 189 189
v3.24.3
Condensed Consolidated Statements of Operations (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue $ 578,000 $ 872,000 $ 1,815,000 $ 2,866,000
Cost of revenues 499,000 648,000 1,619,000 2,244,000
Gross profit 79,000 224,000 196,000 622,000
Operating expenses:        
Research and development 38,000 5,000 153,000 16,000
Sales and marketing 66,000 81,000 177,000 241,000
General and administrative 1,047,000 977,000 3,140,000 3,723,000
Amortization 0 86,000 0 259,000
Impairment charges 0 0 0 2,000
Casualty gain (insurance proceeds) 0 0 0 (400,000)
Total operating expenses 1,151,000 1,149,000 3,470,000 3,841,000
Operating loss (1,072,000) (925,000) (3,274,000) (3,219,000)
Interest income, net (32,000) (30,000) (124,000) (94,000)
Loss before income taxes (1,040,000) (895,000) (3,150,000) (3,125,000)
Income tax expense 0 0 9,000 38,000
Net loss (1,040,000) (895,000) (3,159,000) (3,163,000)
Preferred stock dividends 12,000 133,000 76,000 282,000
Warrants, deemed dividend 8,974,000 0 8,974,000 0
Warrant modification 0 0 0 25,000
Induced conversion of warrants 0 0 0 751,000
Net loss attributable to common stockholders $ (10,026,000) $ (1,028,000) $ (12,209,000) $ (4,221,000)
Net loss attributable to common stockholders per share:        
Basic and diluted net loss per share (in dollars per share) $ (11.25) $ (4.22) $ (16.6) $ (18.34)
Weighted-average number of shares of common stock:        
Basic and diluted (in shares) 890,943 243,378 735,286 230,214
v3.24.3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)
Preferred Stock [Member]
Common Stock [Member]
Treasury Stock, Common [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance (in shares) at Dec. 31, 2022 0 208,018 189      
Balance at Dec. 31, 2022 $ 0 $ 0 $ (181,000) $ 227,645,000 $ (223,847,000) $ 3,617,000
Net loss 0 0 0 0 (1,219,000) (1,219,000)
Stock-based compensation $ 0 $ 0 $ 0 31,000 0 31,000
Balance (in shares) at Mar. 31, 2023 6,550 208,018 189      
Balance at Mar. 31, 2023 $ 0 $ 0 $ (181,000) 229,149,000 (225,066,000) 3,902,000
Issuance, preferred (in shares) 6,550 0 0      
Proceeds from private placement, net of fees and amounts held in escrow $ 0 $ 0 $ 0 1,473,000 0 1,473,000
Balance (in shares) at Dec. 31, 2022 0 208,018 189      
Balance at Dec. 31, 2022 $ 0 $ 0 $ (181,000) 227,645,000 (223,847,000) 3,617,000
Net loss           $ (3,163,000)
Issuances related to stock compensation (in shares)   4,491        
Issuances related to warrant exercises (in shares)           8,516
Balance (in shares) at Sep. 30, 2023 5,146 263,667 189      
Balance at Sep. 30, 2023 $ 0 $ 0 $ (181,000) 233,852,000 (227,010,000) $ 6,661,000
Balance (in shares) at Dec. 31, 2022 0 208,018 189      
Balance at Dec. 31, 2022 $ 0 $ 0 $ (181,000) 227,645,000 (223,847,000) 3,617,000
Issuances related to stock compensation (in shares)   4,491,000        
Issuances from Preferred Stock conversions (in shares)   352,624,000        
Issuances related to warrant exercises (in shares)   18,681,000        
Balance (in shares) at Dec. 31, 2023 1,930 573,644 189      
Balance at Dec. 31, 2023 $ 0 $ 0 $ (181,000) 233,913,000 (228,231,000) 5,501,000
Foundry exchange (in shares)   10,170,000        
Balance (in shares) at Mar. 31, 2023 6,550 208,018 189      
Balance at Mar. 31, 2023 $ 0 $ 0 $ (181,000) 229,149,000 (225,066,000) 3,902,000
Net loss $ 0 $ 0 $ 0 0 (1,049,000) (1,049,000)
Issuances related to stock compensation (in shares) 0 4,491 0      
Stock-based compensation $ 0 $ 0 $ 0 411,000 0 411,000
Issuances from Preferred Stock conversions (in shares) (175) 3,669 0      
Series F Preferred Stock conversions $ 0 $ 0 $ 0 4,000 0 4,000
Series F Preferred Stock dividends $ 0 $ 0 $ 0 (149,000) 0 (149,000)
Issuances related to warrant exercises (in shares) 0 8,516 0      
Preferred warrant exercise, net of fees $ 0 $ 0 $ 0 534,000 0 534,000
Balance (in shares) at Jun. 30, 2023 6,375 224,694 189      
Balance at Jun. 30, 2023 $ 0 $ 0 $ (181,000) 233,911,000 (226,115,000) 7,615,000
Release of escrow from March 31, 2023 private placement 0 0 0 4,000,000 0 4,000,000
Fees associated with Series F Preferred Stock issuance 0 0 0 (38,000) 0 (38,000)
Net loss 0 0 0 0 (895,000) (895,000)
Stock-based compensation $ 0 $ 0 $ 0 31,000 0 31,000
Issuances from Preferred Stock conversions (in shares) (1,229) 49,143 0      
Series F Preferred Stock conversions $ 0 $ 0 $ 0 43,000 0 43,000
Series F Preferred Stock dividends $ 0 $ 0 $ 0 (133,000) 0 (133,000)
Balance (in shares) at Sep. 30, 2023 5,146 263,667 189      
Balance at Sep. 30, 2023 $ 0 $ 0 $ (181,000) 233,852,000 (227,010,000) 6,661,000
Foundry exchange (in shares) 0 (10,170) 0      
Balance (in shares) at Dec. 31, 2023 1,930 573,644 189      
Balance at Dec. 31, 2023 $ 0 $ 0 $ (181,000) 233,913,000 (228,231,000) 5,501,000
Net loss $ 0 $ 0 $ 0 0 (1,136,000) (1,136,000)
Issuances related to stock compensation (in shares) 0 0 0      
Stock-based compensation $ 0 $ 0 $ 0 31,000 0 31,000
Issuances from Preferred Stock conversions (in shares) (922) 90,056 0      
Series F Preferred Stock conversions $ 0 $ 0 $ 0 82,000 0 82,000
Series F Preferred Stock dividends $ 0 $ 0 $ 0 (44,000) 0 (44,000)
Balance (in shares) at Mar. 31, 2024 1,008 663,700 189      
Balance at Mar. 31, 2024 $ 0 $ 0 $ (181,000) 233,982,000 (229,367,000) 4,434,000
Balance (in shares) at Dec. 31, 2023 1,930 573,644 189      
Balance at Dec. 31, 2023 $ 0 $ 0 $ (181,000) 233,913,000 (228,231,000) 5,501,000
Net loss           (3,159,000)
Issuances from Preferred Stock conversions (in shares)   288,968,000        
Balance (in shares) at Sep. 30, 2024 545 1,071,545 189      
Balance at Sep. 30, 2024 $ 0 $ 0 $ (181,000) 236,242,000 (231,390,000) 4,671,000
Balance (in shares) at Mar. 31, 2024 1,008 663,700 189      
Balance at Mar. 31, 2024 $ 0 $ 0 $ (181,000) 233,982,000 (229,367,000) 4,434,000
Net loss 0 0 0 0 (983,000) (983,000)
Stock-based compensation $ 0 $ 0 $ 0 31,000 0 31,000
Issuances from Preferred Stock conversions (in shares) (2,111) 198,912 0      
Series F Preferred Stock conversions $ 0 $ 0 $ 0 112,000 0 112,000
Series F Preferred Stock dividends $ 0 $ 0 $ 0 (20,000) 0 (20,000)
Issuances related to warrant exercises (in shares) 1,648          
Preferred warrant exercise, net of fees       1,478,000   1,478,000
Balance (in shares) at Jun. 30, 2024 545 862,612 189      
Balance at Jun. 30, 2024 $ 0 $ 0 $ (181,000) 235,583,000 (230,350,000) 5,052,000
Net loss 0 0 0 0 (1,040,000) (1,040,000)
Series F Preferred Stock dividends $ 0 $ 0 $ 0 (12,000) 0 (12,000)
Issuances related to warrant exercises (in shares)   208,933        
Preferred warrant exercise, net of fees       671,000   671,000
Balance (in shares) at Sep. 30, 2024 545 1,071,545 189      
Balance at Sep. 30, 2024 $ 0 $ 0 $ (181,000) $ 236,242,000 $ (231,390,000) $ 4,671,000
v3.24.3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Cash flows from operating activities:              
Net loss $ (1,040,000) $ (1,136,000) $ (895,000) $ (1,219,000) $ (3,159,000) $ (3,163,000)  
Adjustments to reconcile net loss to net cash used in operating activities:              
Amortization 0   86,000   0 259,000  
Bad debt (recovery) expense         0 (55,000)  
Non-cash lease expense from right-of-use asset         17,000 101,000  
Stock-based compensation         62,000 473,000  
Impairment charges - property and equipment         0 2,000  
Changes in operating assets and liabilities:              
Accounts receivable         391,000 313,000  
Inventory         189,000 399,000  
Prepaid expenses and other current assets         (40,000) 319,000  
Other assets         4,000 24,000  
Accounts payable         (118,000) (78,000)  
Accrued expenses and other current liabilities         254,000 (335,000)  
Deferred revenue         (104,000) (354,000)  
Lease liabilities         (17,000) (193,000)  
Net cash used in operating activities         (2,521,000) (2,288,000)  
Cash flows from financing activities:              
Proceeds from private placement, net of issuance costs and amounts in escrow         0 5,435,000  
Net cash provided by financing activities         2,149,000 5,969,000  
(Decrease) increase in cash         (372,000) 3,681,000  
Cash and cash equivalents at beginning of period   $ 5,990,000   $ 3,085,000 5,990,000 3,085,000 $ 3,085,000
Cash and cash equivalents at end of period 5,618,000   6,766,000   5,618,000 6,766,000 5,990,000
Reconciliation of cash and cash equivalents              
Cash 5,119,000   6,266,000   5,119,000 6,266,000  
Current certificates of deposit 500,000   500,000   500,000 500,000 500,000
Total cash and cash equivalents 5,619,000   6,766,000   5,619,000 6,766,000 $ 5,990,000
Cash paid during the period for interest         0 18,000  
Cash paid for income taxes         0 31,000  
Non-cash investing and financing activities:              
Preferred stock dividends         76,000 282,000  
Warrants, deemed dividend 8,974,000   0   8,974,000 0  
Warrant modification         0 25,000  
Common stock issued for conversion of Preferred Stock         194,000 47,000  
Induced exercise of common stock warrants $ 0   $ 0   0 751,000  
Common Stock Warrants [Member]              
Cash flows from financing activities:              
Net proceeds from exercise of common stock warrants         671,000 534,000  
Preferred Warrants [Member]              
Cash flows from financing activities:              
Net proceeds from exercise of common stock warrants         $ 1,478,000 $ 0  
v3.24.3
Note 1 - Business Description and Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Business Description and Accounting Policies [Text Block]

Note 1 - Business Description and Significant Accounting Policies

 

Business Description

 

Oblong, Inc. (“Oblong” or “we” or “us” or the “Company”) was formed as a Delaware corporation in May 2000 and is a provider of patented multi-stream collaboration technologies and managed services for video collaboration and network applications.

 

Basis of Presentation

 

The Company's fiscal year ends on December 31 of each calendar year. The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared on substantially the same basis as our annual Consolidated Financial Statements for the fiscal year ended December 31, 2023. In the opinion of the Company's management, these interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

 

The December 31, 2023 Condensed Consolidated Balance Sheet data in this document was derived from audited consolidated financial statements. The Condensed Consolidated Financial Statements and notes included in this quarterly report on Form 10-Q do not include all disclosures required by U.S. generally accepted accounting principles and should be read in conjunction with the Company's audited consolidated financial statements as of and for the year ended December 31, 2023 and notes thereto included in the Company's fiscal 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 19, 2024 (the “2023 Annual Report”).

 

On August 23, 2024, the Company effected a 1-for-40 reverse stock split (the "Reverse Split") for its Common Stock. All Common Stock share and per share data throughout these Condensed Consolidated Financial Statements have been retroactively adjusted to reflect the Reverse Split.

 

The results of operations and cash flows for the interim periods included in these Condensed Consolidated Financial Statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

 

Principles of Consolidation

 

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

 

Cash and Cash Equivalents

 

As of September 30, 2024, our total cash balance of $5,619,000 is available. Of this balance $500,000 was held in short-term certificates of deposit with MidFirst Bank. As of December 31, 2023, our total cash balance of $5,990,000 was available with $500,000 held in short-term certificates of deposit with MidFirst Bank. The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents.

 

Segments

 

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. See Note 8 - Segment Reporting for further discussion.

 

Use of Estimates

 

Preparation of the Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates made. We continually evaluate estimates used in the preparation of our consolidated financial statements for reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. The significant areas of estimation include determining the allowances for inventory obsolescence and estimated credit losses and the inputs used in the fair value of equity-based awards.

 

Amortization Expense

 

As of September 30, 2024 and December 31, 2023, we had no intangible assets. Amortization expense related to intangible assets for the three and nine months ended September 30, 2023 was $86,000 and $259,000, respectively.

 

Operating Lease Right-of-use-Assets and Liabilities

 

In February 2024, we exited our warehouse lease in City of Industry, California, and are no longer a party to any long-term operating leases. Right-of-use assets, net totaled $17,000 as of December 31, 2023, consisting of the warehouse lease discussed above. As of September 30, 2024, the Company had no right-of-use assets remaining. The remaining operating lease liability as of December 31, 2023 was $17,000, consisting of the warehouse lease discussed above. As of September 30, 2024, the Company had no lease liability remaining. During the nine months ended September 30, 2024, we recorded $17,000 in lease expenses. During the three and nine months ended September 30, 2023, we recorded $70,000 and $123,000 in lease expenses, respectively. The 2023 expenses are net of common charges, and sublease proceeds. There were no sublease proceeds for the three months ended September 30, 2023 and $27,000 in sublease proceeds for the nine months ended September 30, 2023.

 

Significant Accounting Policies

 

The significant accounting policies used in preparation of these Condensed Consolidated Financial Statements are disclosed in our 2023 Annual Report, and there have been no changes to the Company’s significant accounting policies during the nine months ended September 30, 2024.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures. The new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the impact that the adoption of this ASU will have on the financial statements and related disclosures, which is not expected to be material.

 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Tax Disclosures (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.
v3.24.3
Note 2 - Liquidity
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Substantial Doubt about Going Concern [Text Block]

Note 2 - Liquidity

 

As of September 30, 2024, we had $5,619,000 in cash and cash equivalents and working capital of $4,665,000. For the nine months ended September 30, 2024 we incurred a net loss of $3,159,000, financing activities provided $2,149,000 in net cash, and we used net cash of $2,521,000 in operating activities.

 

In September 2024, in order to reduce operating expenses and preserve capital, the Company reduced its workforce by nine employees. This resulted in severance costs of $106,000 which are recorded in operating expenses for the three and nine months ended September 30, 2024 and is included in accrued compensation as of September 30, 2024. The entirety of the severance costs were paid out in October 2024.

 

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.

 
v3.24.3
Note 3 - Accrued Expenses and Other Current Liabilities
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 3 - Accrued Expenses and Other Current Liabilities

 

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

 

  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Compensation costs

 $856  $448 

Customer deposits

  77   118 

Professional fees

  20   104 

Taxes and regulatory fees

  25   21 

Accrued rent

  170   202 

Accrued dividends on Series F Preferred Stock

  16   136 

Other accrued expenses and liabilities

  11   9 

Accrued expenses and other liabilities

 $1,175  $1,038 

 
v3.24.3
Note 4 - Capital Stock
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Equity [Text Block]

Note 4 - Capital Stock

 

Common Stock

 

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed on the Nasdaq Capital Market (“Nasdaq”), under the ticker symbol “OBLG”. As of September 30, 2024, we had 150,000,000 shares of our Common Stock authorized, with 1,071,545 and 1,071,356 shares issued and outstanding, respectively.

 

On August 23, 2024, the Company effected the Reverse Stock Split. The Company's shares of Common Stock began trading on a split-adjusted basis at the commencement of trading on August 26, 2024. Upon effectiveness, every 40 shares of Common Stock were converted into 1 share of Common Stock. The number of authorized shares and the par value of each share remained unchanged. No fractional shares were issued as a result of the Reverse Split, and any fractional shares that would have otherwise resulted from the Reverse Split were rounded up to the nearest whole share.

 

During the nine months ended September 30, 2023, 8,516 shares of the Company's Common Stock were issued related to the exercise of 8,516 warrants granted at various dates between October 2020 and June 2021. During the three months ended September 30, 2024, 208,933 shares of the Company's Common Stock were issued related to the exercise of 208,933 Common Warrants. Details related to these exercises are below.

 

During the three and nine months ended September 30, 2023, 49,143 and 52,812 shares of the Company's Common Stock were issued related to the conversion of 1,229 and 1,404 shares of Series F Preferred Stock, plus accrued dividends, respectively. During the nine months ended September 30, 2024, 288,968 shares of the Company's Common Stock were issued related to the conversion of 3,033 shares of Series F Preferred Stock, plus accrued dividends. See Note 5 - Preferred Stock for further detail.

 

During the nine months ended September 30, 2023, 4,491 shares of the Company's Common Stock were issued related to stock compensation.  See Note 6 - Stock Based Compensation for further detail.

 

Common Stock activity for the year ended December 31, 2023 and nine months ended September 30, 2024 is presented below.

 

Issued Shares as of December 31, 2022

  208,018 

Issuances from Preferred Stock conversions

  352,624 

Issuances related to warrant exercises

  18,681 

Issuances related to stock compensation

  4,491 

Common shares exchanged for prepaid warrants

  (10,170)

Issued Shares as of December 31, 2023

  573,644 

Issuances from Common Warrant Exercises

  208,933 

Issuances from Preferred Stock conversions

  288,968 

Issued Shares as of September 30, 2024

  1,071,545 

Less Treasury Shares:

  (189)

Outstanding Shares as of September 30, 2024

  1,071,356 

 

 

Common Stock Warrants

 

On March 30, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we issued and sold, in a private placement (the “Private Placement”) (i) 6,550 shares of our newly designated Series F Preferred Stock, $0.0001 par value per share (the “Series F Preferred Stock”), (ii) preferred warrants (the “Preferred Warrants”) to acquire 32,750 shares of Series F Preferred Stock, and (iii) common warrants (“Common Warrants” and with the Preferred Warrants the “Investor Warrants”) to acquire up to 95,764 shares of Common Stock. Please refer to Note 5 - Preferred Stock for further discussion on the Series F Preferred Stock and Preferred Warrants.

 

In connection with the Private Placement, pursuant to an engagement letter dated March 30, 2023 (the "Engagement Letter"), between the Company and Dawson James Securities, Inc. (the “Placement Agent”), the Company agreed to (i) pay the Placement Agent a cash fee equal to 8% of the aggregate gross proceeds raised in the Private Placement, and (ii) grant to the Placement Agent warrants (the “Placement Agent Warrants”) to purchase 7,663 shares of Common Stock.

 

On March 31, 2023, the Company issued the Common Warrants and the Placement Agent Warrants to purchase an aggregate of 103,427 shares of the Company’s Common Stock. The Common Warrants and Placement Agent Warrants have a term of 5 years, commencing six months and one day from the date of issuance, and were initially exercisable for $68.40 per share. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination, recapitalization, or other similar transactions involving the Common Stock, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable exercise price for the Common Warrants (subject to certain exceptions). The Common Warrants and Placement Agent Warrants are exercisable for cash, provided that if there is no effective registration statement available permitting the resale of the common shares, they may be exercised on a cashless basis. Exercise of the Common Warrants and Placement Agent Warrants is subject to certain limitations, including a 4.99% beneficial ownership limitation.

 

On October 6, 2023, the Company and the Investors holding a majority of the outstanding shares of the Preferred Stock agreed to waive any and all provisions, terms, covenants and obligations in the Certificate of Designations or Common Warrants to the extent such provisions permit the conversion or exercise of the Preferred Stock and the Common Warrants, respectively, to occur at a price below $11.168 (the "Waiver"). Notwithstanding anything to the contrary in the Certificate of Designations, each of the “Alternate Conversion Price” and the “Floor Price” as set forth in the Certificate of Designations shall in no event be less than $11.168 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events). On September 13, 2024, the Company and the Investors agreed to delete Section 2 of the Waiver, removing the minimum price restriction on the exercise of Common Warrants.

 

During the nine months ended September 30, 2024, 24,104 Common Warrants were issued in accordance with the exercise provisions of the Preferred Warrants. See Note 5 - Preferred Stock for additional detail on the exercises of the Preferred Warrants. These Common Warrants were exercisable at an initial exercise price of $68.40 and have a term of five years.

 

Pursuant to Sections 2(a) and 2(c) of the Common Warrants (the "Make Whole Provision"), as a result of the Reverse Split, the exercise price of the Common Warrants and Placement Agent Warrants were adjusted to $3.41438 per share, and the number of Common Warrant shares that may be purchased upon exercise of the Common Warrants and the Placement Agent Warrants were increased proportionately, so that after the exercise price adjustment the aggregate exercise price payable hereunder for the adjusted number of Common Warrant Shares was the same as the aggregate exercise price in effect immediately prior to the exercise price adjustment. These adjustments resulted in an aggregate of 2,401,047 Common Warrants and 153,470 Placement Agent Warrants remaining outstanding following the Reverse Split. The additional warrants created by the Make Whole Provision resulted in an aggregate deemed dividend of $8,974,000 which will reduce the net income available to common shareholders. Details of the Make Whole Provision transactions are presented below:

 

 

Warrant Tranche

 

Original Warrants Issued

  

Original Exercise Price (1)

  

Warrants Post Reverse Split (2)

  

Exercise Price Post Reverse Split (2)

  

Warrants Post Make Whole Provision (3)

  

Exercise Price Post Make Whole Provision (4)

  

Deemed Dividend

 

Common Warrants issued in 2023

  3,830,417  $1.71   95,764  $68.40   1,918,371  $3.41  $6,739,000 

Common Warrants issued in 2024

  963,745  $1.71   24,104  $68.40   482,676  $3.41  $1,696,000 

Placement Agent Warrants

  306,433  $1.71   7,663  $68.40   153,470  $3.41  $539,000 

Total

  5,100,595       127,531       2,554,517      $8,974,000 
                             

Aggregate Exercise Price

 $8,722,000      $8,722,000      $8,722,000         

 

(1) Original exercise price based on the March 30, 2023 initial exercise price.

(2) Adjusted by the Reverse Split.

(3) Based on the original aggregate exercise price divided by the Make Whole Provision exercise price.

(4) Calculated by dividing (x) the sum of the dollar volume-weighted average price of the Company's Common Stock for each of the five lowest trading days during the sixteen trading days after the Reverse Split by (y) five.

 

During the three months ended September 30, 2024, 208,933 Common Warrants were exercised, at a price of $3.41438 per share, for 208,933 shares of Common Stock. The Company received gross and net proceeds of $713,000 and $671,000, respectively. Subsequent to September 30, 2024, an additional 73,381 Common Warrants were exercised, at a price of $3.41438 per share, for 73,381 shares of Common Stock.  The Company received gross and net proceeds of $251,000 and $231,000, respectively.

 

One of our directors, Jonathan Schechter, is currently a partner at The Special Equities Group ("SEG"), a division of Dawson James Securities, Inc. In March 2023, prior to Mr. Schechter's appointment to our board in May 2023 and pursuant to our Engagement Letter, SEG acted as placement agent in connection with our March 30, 2023 Purchase Agreement. During the three months ended September 30, 2024, pursuant to the terms of the Placement Agent Agreement, we paid SEG a cash fee equal to 8% of the aggregate gross proceeds raised from the exercise of the 208,933 Common Stock Warrants. The fee was $57,000. Mr. Schechter did not receive any of the fee paid.

 

Common Warrants outstanding as of September 30, 2024 are as follows:

 

Issue Date

 

Warrants Outstanding

  

Exercise Price

 

Expiration Date

          

Q2 2021

  19  $2,640.00 

Q4 2024

Q1 2023

  1,872,908  $3.41 

Q3 2028

Q2 2024

  472,676  $3.41 

Q4 2029

   2,345,603      

 

Common Warrant activity for the year ended December 31, 2023 and nine months ended September 30, 2024 is presented below.

 

  

Outstanding and Exercisable

 
  

Number of Warrants

  

Weighted Average Exercise Price

 

Warrants outstanding and exercisable, December 31, 2022

  8,609  $2,653.60 

Granted

  113,597   10.17 

Exercised

  (18,681)  31.18 

Expired

  (72)  2,853.75 

Warrants outstanding and exercisable, December 31, 2023

  103,453   69.03 

Granted

  24,104   68.40 

Make Whole Provision

  2,426,986   3.41 

Exercised

  (208,933)  3.41 

Expired

  (7)  2,400.00 

Warrants outstanding and exercisable, September 30, 2024

  2,345,603  $3.44 

 

Treasury Shares

 

The Company maintains treasury stock for the Common Stock shares bought back by the Company when withholding shares to cover taxes on transactions related to equity awards. There were no treasury stock transactions during the nine months ended September 30, 2024 or the year ended December 31, 2023.
v3.24.3
Note 5 - Preferred Stock
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Preferred Stock [Text Block]

Note 5 - Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. As of September 30, 2024, we had 1,983,250 designated shares of preferred stock and 545 shares of preferred stock issued and outstanding. As of December 31, 2023, we had 1,930 shares of preferred stock issued and outstanding.

 

 

Series F Preferred Stock

 

The terms of the Series F Preferred Stock are as set forth in the Certificate of Designations of Series F Preferred Stock of Oblong, Inc. (the “Certificate of Designations”), which was filed and became effective with the Secretary of State of the State of Delaware on March 31, 2023. The Private Placement closed on March 31, 2023, in exchange for gross and net proceeds of $6,386,000 and $5,364,000, respectively. The financing fees associated with the Purchase Agreement were $1,022,000.

 

The Series F Preferred Shares are convertible into fully paid and non-assessable shares of the Company’s Common Stock at the election of the holder at any time at an initial conversion price of $68.40 (the “Conversion Price”). The holders of the Series F Preferred Shares may also elect to convert their shares at an alternative conversion price equal to the lower of (i) 80% of the applicable Conversion Price as in effect on the date of the conversion, (ii) 80% of the closing price on the trading day immediately preceding the delivery of the conversion notice, and (iii) the greater of (a) the Floor Price (as defined in the Certificate of Designations) and (b) the quotient of (x) the sum of the five lowest Closing Bid Prices (as defined in the Certificate of Designations) for trading days in the 30 consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable Conversion Notice, divided by (y) five. The Conversion Price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalization, or other similar transactions involving the Common Stock, and subject to price-based adjustment, on a full ratchet basis, in the event of any issuances of our common stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions).

 

On October 6, 2023, the Company and Investors holding a majority of the outstanding shares of the Preferred Stock agreed to waive any and all provisions, terms, covenants and obligations in the Certificate of Designations to the extent such provisions permit the conversion or exercise of the Preferred Stock to occur at a price below $11.168. Notwithstanding anything to the contrary in the Certificate of Designations, each of the “Alternate Conversion Price” and the “Floor Price” as set forth in the Certificate of Designations shall in no event be less than $11.168 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).

 

Under the Certificate of Designations, the Series F Preferred Shares have an initial stated value of $1,000 per share (the “Stated Value”). The holders of the Series F Preferred Shares are entitled to dividends of 9% per annum, which will be payable in arrears quarterly. Accrued dividends may be paid, at our option, in cash and if not paid, shall increase the stated value of the Series F Preferred Shares. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series F Preferred Shares will accrue dividends at the rate of 20% per annum (the “Default Rate”). The Series F Preferred Shares have no voting rights, other than with respect to certain matters affecting the rights of the Series F Preferred Shares. On matters with respect to which the holders of the Series F Preferred Shares have a right to vote, holders of the Preferred Shares will have voting rights on an as-converted basis.

 

Our ability to settle conversions is subject to certain limitations set forth in the Certificate of Designations. Further, the Certificate of Designations contains a certain beneficial ownership limitation after giving effect to the issuance of shares of common stock issuable upon conversion of the Series F Preferred Shares.

 

The Certificate of Designations includes certain Triggering Events (as defined in the Certificate of Designations), including, among other things, (i) the failure to file and maintain an effective registration statement covering the sale of the holder’s securities registrable pursuant to the Registration Rights Agreement, (ii) the failure to pay any amounts due to the holders of the Series F Preferred Shares when due, and (iii) if Peter Holst ceases to be the chief executive officer of the Company other than because of his death, and a qualified replacement, reasonably acceptable to a majority of the holders of the Series F Preferred Shares, is not appointed within thirty (30) business days. In connection with a Triggering Event, the Default Rate is triggered. We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, acquisition transactions, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), maintenance of properties and the transfer of assets, among other matters.

 

During the nine months ended September 30, 2024, 1,648 Series F Preferred Shares were issued upon exercise of 1,648 Preferred Warrants. The Company received gross and net proceeds of $1,607,000 and $1,478,000, respectively. 

 

During the three and nine months ended September 30, 2023, 1,229 and 1,404 shares of Series F Preferred Stock, plus accrued dividends of $43,000 and $47,000, were converted into 49,143 and 52,812 shares of the Company's Common Stock, respectively. During the nine months ended September 30, 2024, 3,033 shares of Series F Preferred Stock, plus accrued dividends of $194,000, were converted into 288,968 shares of the Company’s Common Stock. There were 545 shares of Series F Preferred Stock outstanding and accrued dividends of $16,000 as of September 30, 2024.

 

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

 

  

Series F Preferred Stock Shares

  

Preferred Stock Dividends

  

Weighted Average Conversion Price

  

Common Shares Issued from Conversions

 

March 31, 2023 Issuance

  6,550  $—       — 

2023 Accrued Dividends

  —   343,000       — 

2023 Conversions

  (4,620)  (207,000) $13.60   352,624 

December 31, 2023 Balance

  1,930   136,000       352,624 

2024 Issuances

  1,648   —       — 

2024 Accrued Dividends

  —   76,000       — 

2024 Conversions

  (3,033)  (196,000) $11.20   288,968 

September 30, 2024 Balance

  545  $16,000  $11.17   641,592 

 

Series F Preferred Stock Warrants

 

The Preferred Warrants are exercisable for Series F Preferred Shares at an exercise price of $975. The exercise price is subject to customary adjustments for stock splits, stock dividends, stock combination recapitalizations or other similar transactions involving the Common Stock. The Preferred Warrants expire three years from the date of issuance and are exercisable for cash. For each Preferred Warrant exercised, the Investors shall receive Common Warrants to purchase a number of shares of Common Stock equal to 100% of the number of shares of Common Stock the Investors would receive if the Series F Preferred Shares issuable upon exercise of such Warrant were converted at the applicable Conversion Price. The fair value of the Preferred Warrants was recorded within additional paid-in capital upon issuance.

 

During the nine months ended September 30, 2024, 1,648 Preferred Warrants were exercised at a price of $975 per share. The Company received gross and net proceeds of $1,607,000 and $1,478,000, respectively. In accordance with the exercise provisions of the Preferred Stock, 24,104 Common Warrants were issued during the nine months ended September 30, 2023. See Note 4 - Capital Stock for further discussion of the Common Warrants. As of September 30, 2024, 31,102 Preferred Warrants remained outstanding.

 

In accordance with the Engagement Letter discussed in Note - 4. Capital Stock, during the nine months ended September 30, 2024, we paid SEG a cash fee equal to 8% of the aggregate gross proceeds raised from the exercise of the 1,648 Series F Preferred Warrants. The fee was $129,000. Mr. Schechter did not receive any of the fee paid.

 
v3.24.3
Note 6 - Stock Based Compensation
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 6 - Stock Based Compensation

 

2019 Equity Incentive Plan

 

On December 19, 2019, the Oblong, Inc. 2019 Equity Incentive Plan (the “2019 Plan”) was approved by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders. The 2019 Plan is an omnibus equity incentive plan pursuant to which the Company may grant equity and cash incentive awards to certain key service providers of the Company and its subsidiaries. As of  December 31, 2023 and September 30, 2024, there were no remaining shares in the share pool available for new grants under the 2019 Plan.

 

Stock Options

 

A summary of stock option activity under our plans, and options outstanding as of, and changes made during the nine months ended September 30, 2024 and year ended December 31, 2023 is presented below:

 

  

Outstanding

  

Exercisable

 
  

Number of Options

  

Weighted Average Exercise Price

  

Number of Options

  

Weighted Average Exercise Price

 

Options outstanding and exercisable, December 31, 2022

  417  $5,744.82   250  $8,274.91 

Vested

  —   —   83   1,950.00 

Expired

  (167)  11,435.60   (167)  11,435.60 

Options outstanding and exercisable, December 31, 2023

  250   1,950.00   166   1,950.00 

Vested

  —   —   84   1,950.00 

Options outstanding and exercisable, September 30, 2024

  250  $1,950.00   250  $1,950.00 

 

The intrinsic value of vested and unvested options was not significant for all periods presented. Stock compensation expense related to stock options for the three months ended September 30, 2024 and 2023 was zero and $31,000, respectively. Stock compensation expense related to stock options for the nine months ended September 30, 2024 and 2023 was $62,000 and $93,000, respectively. The stock compensation expense was included as a general and administrative expense on our Condensed Consolidated Statements of Operations. As of September 30, 2024 there is no remaining unamortized stock compensation expense.

 

Restricted Stock

 

As of September 30, 2024 and December 31, 2023, there were no outstanding restricted stock awards ("RSAs") or restricted stock units (“RSUs,” collectively "Restricted Stock"). There was no Restricted Stock activity or expense for the three and nine months ended September 30, 2024. During the nine months ended September 30, 2023, in relation to the departure of certain board members, 2 RSAs became fully vested. The 2 RSAs, along with 49 previously vested RSUs, were delivered in shares of the Company's Common Stock in accordance with the terms of the agreements. This Restricted Stock was issued in 2014 and had been fully expensed, so there was no stock compensation expense related to Restricted Stock for nine months ended September 30, 2023. During the nine months ended September 30, 2023, 4,440 RSUs were granted to certain board members. These RSU's vested immediately upon issuance and the stock compensation related to RSUs for the nine months ended September 30, 2023 was $380,000, which was included in general and administrative expense on our Condensed Consolidated Statements of Operations. 

 
v3.24.3
Note 7 - Net Loss Per Share
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Earnings Per Share [Text Block]

Note 7 - Net Loss Per Share

 

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The weighted-average number of shares of common stock outstanding does not include any potentially dilutive securities or unvested Restricted Stock. 

 

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, preferred stock, warrants, and unvested Restricted Stock, to the extent they are dilutive. For the three and nine months ended September 30, 2024 and 2023, all such common stock equivalents have been excluded from diluted net loss per share as the effect to net loss per share would be anti-dilutive (due to the net loss).

 

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

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Numerator:

                

Net loss

 $(1,040) $(895) $(3,159) $(3,163)

Less: preferred stock dividends

  12   133   76   282 

Less: deemed dividend

  8,974   —   8,974   — 

Less: inducement of warrant exercise

  —   —   —   751 

Less: warrant modification

  —   —   —   25 

Net loss attributable to common stockholders

 $(10,026) $(1,028) $(12,209) $(4,221)

Denominator:

                

Weighted-average number of shares of common stock for basic and diluted net loss per share

  890,943   243,378   735,286   230,214 

Basic and diluted net loss per share

 $(11.25) $(4.22) $(16.60) $(18.34)

 

The following table represents the potential shares that were excluded from the computation of weighted-average number of shares of common stock in computing the diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect (due to the net loss):

 

  

As of September 30,

 
  

2024

  

2023

 

Outstanding stock options

  250   250 

Common stock issuable upon conversion of Series F Preferred Stock (1)

  164,857   1,507,155 

Common stock issuable upon conversion of Series F Preferred Warrants (2)

  2,784,921   2,932,486 

Common stock issuable upon conversion of Common Stock warrants

  2,345,603   113,623 

 

 

(1)

Calculation assumes conversion of the stated value, and accrued dividends, of the Series F Preferred Stock into Common Stock at the Floor Price of $11.168 as of September 30, 2024, and at the initial conversion price of $68.40 as of September 30, 2023.

  

 

 

(2)

Calculation assumes exercise of the Series F Preferred Warrants for cash into Series F Preferred Stock and subsequent conversion of the Series F Preferred Stock into Common Stock at the Floor Price of $11.168 per share as of September 30, 2024 and at the initial conversion price of $68.40 as of  September 30, 2023.

  

 
v3.24.3
Note 8 - Segment Reporting
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 8 - Segment Reporting

 

The Company currently operates in two segments: (1) “Managed Services” which represents the business surrounding managed services for video collaboration and network applications; and (2) “Collaboration Products” which represents the business surrounding our Mezzanine™ product offerings.

 

Certain information concerning the Company’s segments for the three and nine months ended September 30, 2024 and 2023 is presented in the following tables (in thousands):

 

  

Three Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $510  $68  $—  $578 

Cost of revenues

  295   204   —   499 

Gross profit

 $215  $(136) $—  $79 

Gross profit %

  42%  (200)%     14%
                 

Allocated operating expenses

 $60  $104  $—  $164 

Unallocated operating expenses

  —   —   987   987 

Total operating expenses

 $60  $104  $987  $1,151 
                 

Operating income (loss)

 $155  $(240) $(987) $(1,072)

Interest income, net

  (31)  (1)  —   (32)

Income (loss) before income taxes

  186   (239)  (987)  (1,040)

Income tax expense

  —   —   —   — 

Net income (loss)

 $186  $(239) $(987) $(1,040)

 

  

Three Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $603  $269  $—  $872 

Cost of revenues

  398   250   —   648 

Gross profit

 $205  $19  $—  $224 

Gross profit %

  34%  7%     26%
                 

Allocated operating expenses

 $—  $151  $—  $151 

Unallocated operating expenses

  —   —  $998   998 

Total operating expenses

 $—  $151  $998  $1,149 
                 

Operating income (loss)

 $205  $(132) $(998) $(925)

Interest income, net

  (35)  5   —   (30)

Income (loss) before income taxes

  240   (137)  (998)  (895)

Income tax expense

  —   —   —   — 

Net income (loss)

 $240  $(137) $(998) $(895)

 

  

Nine Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,540  $275  $—  $1,815 

Cost of revenues

  995   624   —   1,619 

Gross profit

 $545  $(349) $—  $196 

Gross profit %

  35%  (127)%     11%
                 

Allocated operating expenses

 $122  $347  $—  $469 

Unallocated operating expenses

  —   —   3,001   3,001 

Total operating expenses

 $122  $347  $3,001  $3,470 
                 

Operating income (loss)

 $423  $(696) $(3,001) $(3,274)

Interest income, net

  (98)  (26)  —   (124)

Income (loss) before income taxes

  521   (670)  (3,001)  (3,150)

Income tax expense

  6   3   —   9 

Net income (loss)

 $515  $(673) $(3,001) $(3,159)

 

 

  

Nine Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,933  $933  $—  $2,866 

Cost of revenues

  1,288   956   —   2,244 

Gross profit

 $645  $(23) $—  $622 

Gross profit %

  33%  (2)%     22%
                 

Allocated operating expenses

 $3  $61  $—  $64 

Unallocated operating expenses

  —   —   3,777   3,777 

Total operating expenses

 $3  $61  $3,777  $3,841 
                 

Operating income (loss)

 $642  $(84) $(3,777) $(3,219)

Interest income, net

  (69)  (25)  —   (94)

Income (loss) before income taxes

  711   (59)  (3,777)  (3,125)

Income tax expense

  7   31   —   38 

Net income (loss)

 $704  $(90) $(3,777) $(3,163)

 

Unallocated operating expenses in Corporate include costs for the three and nine months ended September 30, 2024 and 2023 that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees, and other similar corporate expenses.

 

For the three months ended September 30, 2023, 11% of our revenue was attributable to the United Kingdom. For the three months ended September 30, 2024, and the nine months ended September 30, 2024 and 2023, there was no material revenue attributable to any individual foreign country.

 

Revenue by geographic area is allocated as follows (in thousands):

 

  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Domestic

 $227  $356  $698  $1,356 

Foreign

 $351  $516   1,117   1,510 
  $578  $872  $1,815  $2,866 

 

 

Disaggregated information for the Company’s revenue has been recognized in the accompanying Condensed Consolidated Statements of Operations and is presented below according to contract type (in thousands):

 

  

Three Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $6   1% $38   4%

Network services

  502   87%  557   64%

Professional and other services

  2   —%  8   1%

Total Managed Services revenue

 $510   88% $603   69%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $68   12% $268   31%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $68   12% $269   31%

Total revenue

 $578   100% $872   100%

 

 

 

  

Nine Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $41   2% $148   5%

Network services

  1,489   82%  1,758   61%

Professional and other services

  10   1%  27   1%

Total Managed Services revenue

 $1,540   85% $1,933   67%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $275   15% $932   33%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $275   15% $933   33%

Total revenue

 $1,815   100% $2,866   100%

 

The Company considers a significant customer to be one that comprises more than 10% of the Company’s consolidated revenues or accounts receivable. 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.

 

Concentration of consolidated revenues was as follows:

 

   

Three Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  87%  60%

 

 

   

Nine Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  83%  56%

 

Concentration of accounts receivable was as follows:

 

   

As of September 30,

 
   

2024

  

2023

 
   

% of Accounts

  

% of Accounts

 
 

Segment

 

Receivable

  

Receivable

 

Customer A

Managed Services

  15%  —%

Customer B

Collaboration Products

  55%  —%

Customer C

Collaboration Products

  —%  38%

Customer D

Collaboration Products

  —%  12%

Customer E

Managed Services

  11%  —%

Customer F

Collaboration Products

  11%  —%

 
v3.24.3
Note 9 - Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

Note 9 - Commitments and Contingencies

 

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. As of the date hereof, we are not party to any legal proceedings that we currently believe will have a material adverse effect on our business, financial position, results of operations or liquidity.

 

COVID-19

 

On March 11, 2020, the World Health Organization (“WHO”) announced that infections of the novel Coronavirus (COVID-19) had become pandemic, and on March 13, 2020, the U.S. President announced a National Emergency relating to the disease. In May 2023, the WHO declared COVID-19 over as a global health emergency. Customers generally use our Mezzanine™ products in traditional office and operating center environments such as conference rooms or other presentation spaces. Revenue declines for our Collaboration Products business 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. 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. Although the Company 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.

 
v3.24.3
Insider Trading Arrangements
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Insider Trading Arr Line Items    
Material Terms of Trading Arrangement [Text Block]  

ITEM 5. OTHER INFORMATION

 

(c) During the period covered by this Quarterly Report on Form 10-Q, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

 
Rule 10b5-1 Arrangement Terminated [Flag] false  
Non-Rule 10b5-1 Arrangement Terminated [Flag] false  
Rule 10b5-1 Arrangement Adopted [Flag] false  
Non-Rule 10b5-1 Arrangement Adopted [Flag] false  
v3.24.3
Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

 

The Company's fiscal year ends on December 31 of each calendar year. The accompanying interim Condensed Consolidated Financial Statements are unaudited and have been prepared on substantially the same basis as our annual Consolidated Financial Statements for the fiscal year ended December 31, 2023. In the opinion of the Company's management, these interim Condensed Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

 

The December 31, 2023 Condensed Consolidated Balance Sheet data in this document was derived from audited consolidated financial statements. The Condensed Consolidated Financial Statements and notes included in this quarterly report on Form 10-Q do not include all disclosures required by U.S. generally accepted accounting principles and should be read in conjunction with the Company's audited consolidated financial statements as of and for the year ended December 31, 2023 and notes thereto included in the Company's fiscal 2023 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 19, 2024 (the “2023 Annual Report”).

 

On August 23, 2024, the Company effected a 1-for-40 reverse stock split (the "Reverse Split") for its Common Stock. All Common Stock share and per share data throughout these Condensed Consolidated Financial Statements have been retroactively adjusted to reflect the Reverse Split.

 

The results of operations and cash flows for the interim periods included in these Condensed Consolidated Financial Statements are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

 
Consolidation, Policy [Policy Text Block]

Principles of Consolidation

 

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

 
Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

 

As of September 30, 2024, our total cash balance of $5,619,000 is available. Of this balance $500,000 was held in short-term certificates of deposit with MidFirst Bank. As of December 31, 2023, our total cash balance of $5,990,000 was available with $500,000 held in short-term certificates of deposit with MidFirst Bank. The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents.

 
Segment Reporting, Policy [Policy Text Block]

Segments

 

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. See Note 8 - Segment Reporting for further discussion.
Use of Estimates, Policy [Policy Text Block]

Use of Estimates

 

Preparation of the Condensed Consolidated Financial Statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from the estimates made. We continually evaluate estimates used in the preparation of our consolidated financial statements for reasonableness. Appropriate adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. The significant areas of estimation include determining the allowances for inventory obsolescence and estimated credit losses and the inputs used in the fair value of equity-based awards.

 
Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Amortization Expense

 

As of September 30, 2024 and December 31, 2023, we had no intangible assets. Amortization expense related to intangible assets for the three and nine months ended September 30, 2023 was $86,000 and $259,000, respectively.

 
Lessee, Leases [Policy Text Block]

Operating Lease Right-of-use-Assets and Liabilities

 

In February 2024, we exited our warehouse lease in City of Industry, California, and are no longer a party to any long-term operating leases. Right-of-use assets, net totaled $17,000 as of December 31, 2023, consisting of the warehouse lease discussed above. As of September 30, 2024, the Company had no right-of-use assets remaining. The remaining operating lease liability as of December 31, 2023 was $17,000, consisting of the warehouse lease discussed above. As of September 30, 2024, the Company had no lease liability remaining. During the nine months ended September 30, 2024, we recorded $17,000 in lease expenses. During the three and nine months ended September 30, 2023, we recorded $70,000 and $123,000 in lease expenses, respectively. The 2023 expenses are net of common charges, and sublease proceeds. There were no sublease proceeds for the three months ended September 30, 2023 and $27,000 in sublease proceeds for the nine months ended September 30, 2023.

 
New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic280): Improvements to Reportable Segment Disclosures. The new guidance is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective retrospectively for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is in the process of evaluating the impact that the adoption of this ASU will have on the financial statements and related disclosures, which is not expected to be material.

 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Tax Disclosures (Topic 740), to enhance the transparency and decision usefulness of income tax disclosures through changes to the rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of adopting this new accounting guidance on its Consolidated Financial Statements.
v3.24.3
Note 3 - Accrued Expenses and Other Current Liabilities (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Accrued Liabilities [Table Text Block]
  

September 30,

  

December 31,

 
  

2024

  

2023

 
         

Compensation costs

 $856  $448 

Customer deposits

  77   118 

Professional fees

  20   104 

Taxes and regulatory fees

  25   21 

Accrued rent

  170   202 

Accrued dividends on Series F Preferred Stock

  16   136 

Other accrued expenses and liabilities

  11   9 

Accrued expenses and other liabilities

 $1,175  $1,038 
v3.24.3
Note 4 - Capital Stock (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Common Stock Outstanding Roll Forward [Table Text Block]

Issued Shares as of December 31, 2022

  208,018 

Issuances from Preferred Stock conversions

  352,624 

Issuances related to warrant exercises

  18,681 

Issuances related to stock compensation

  4,491 

Common shares exchanged for prepaid warrants

  (10,170)

Issued Shares as of December 31, 2023

  573,644 

Issuances from Common Warrant Exercises

  208,933 

Issuances from Preferred Stock conversions

  288,968 

Issued Shares as of September 30, 2024

  1,071,545 

Less Treasury Shares:

  (189)

Outstanding Shares as of September 30, 2024

  1,071,356 
Warrants and Rights Outstanding, Make Whole Provision [Table Text Block]

Warrant Tranche

 

Original Warrants Issued

  

Original Exercise Price (1)

  

Warrants Post Reverse Split (2)

  

Exercise Price Post Reverse Split (2)

  

Warrants Post Make Whole Provision (3)

  

Exercise Price Post Make Whole Provision (4)

  

Deemed Dividend

 

Common Warrants issued in 2023

  3,830,417  $1.71   95,764  $68.40   1,918,371  $3.41  $6,739,000 

Common Warrants issued in 2024

  963,745  $1.71   24,104  $68.40   482,676  $3.41  $1,696,000 

Placement Agent Warrants

  306,433  $1.71   7,663  $68.40   153,470  $3.41  $539,000 

Total

  5,100,595       127,531       2,554,517      $8,974,000 
                             

Aggregate Exercise Price

 $8,722,000      $8,722,000      $8,722,000         
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

Issue Date

 

Warrants Outstanding

  

Exercise Price

 

Expiration Date

          

Q2 2021

  19  $2,640.00 

Q4 2024

Q1 2023

  1,872,908  $3.41 

Q3 2028

Q2 2024

  472,676  $3.41 

Q4 2029

   2,345,603      
  

Outstanding and Exercisable

 
  

Number of Warrants

  

Weighted Average Exercise Price

 

Warrants outstanding and exercisable, December 31, 2022

  8,609  $2,653.60 

Granted

  113,597   10.17 

Exercised

  (18,681)  31.18 

Expired

  (72)  2,853.75 

Warrants outstanding and exercisable, December 31, 2023

  103,453   69.03 

Granted

  24,104   68.40 

Make Whole Provision

  2,426,986   3.41 

Exercised

  (208,933)  3.41 

Expired

  (7)  2,400.00 

Warrants outstanding and exercisable, September 30, 2024

  2,345,603  $3.44 
v3.24.3
Note 5 - Preferred Stock (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Stock by Class [Table Text Block]
  

Series F Preferred Stock Shares

  

Preferred Stock Dividends

  

Weighted Average Conversion Price

  

Common Shares Issued from Conversions

 

March 31, 2023 Issuance

  6,550  $—       — 

2023 Accrued Dividends

  —   343,000       — 

2023 Conversions

  (4,620)  (207,000) $13.60   352,624 

December 31, 2023 Balance

  1,930   136,000       352,624 

2024 Issuances

  1,648   —       — 

2024 Accrued Dividends

  —   76,000       — 

2024 Conversions

  (3,033)  (196,000) $11.20   288,968 

September 30, 2024 Balance

  545  $16,000  $11.17   641,592 
v3.24.3
Note 6 - Stock Based Compensation (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Share-Based Payment Arrangement, Activity [Table Text Block]
  

Outstanding

  

Exercisable

 
  

Number of Options

  

Weighted Average Exercise Price

  

Number of Options

  

Weighted Average Exercise Price

 

Options outstanding and exercisable, December 31, 2022

  417  $5,744.82   250  $8,274.91 

Vested

  —   —   83   1,950.00 

Expired

  (167)  11,435.60   (167)  11,435.60 

Options outstanding and exercisable, December 31, 2023

  250   1,950.00   166   1,950.00 

Vested

  —   —   84   1,950.00 

Options outstanding and exercisable, September 30, 2024

  250  $1,950.00   250  $1,950.00 
v3.24.3
Note 7 - Net Loss Per Share (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Numerator:

                

Net loss

 $(1,040) $(895) $(3,159) $(3,163)

Less: preferred stock dividends

  12   133   76   282 

Less: deemed dividend

  8,974   —   8,974   — 

Less: inducement of warrant exercise

  —   —   —   751 

Less: warrant modification

  —   —   —   25 

Net loss attributable to common stockholders

 $(10,026) $(1,028) $(12,209) $(4,221)

Denominator:

                

Weighted-average number of shares of common stock for basic and diluted net loss per share

  890,943   243,378   735,286   230,214 

Basic and diluted net loss per share

 $(11.25) $(4.22) $(16.60) $(18.34)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
  

As of September 30,

 
  

2024

  

2023

 

Outstanding stock options

  250   250 

Common stock issuable upon conversion of Series F Preferred Stock (1)

  164,857   1,507,155 

Common stock issuable upon conversion of Series F Preferred Warrants (2)

  2,784,921   2,932,486 

Common stock issuable upon conversion of Common Stock warrants

  2,345,603   113,623 
v3.24.3
Note 8 - Segment Reporting (Tables)
 9 Months Ended
Sep. 30, 2024
Notes Tables  
Schedule of Segment Reporting Information, by Segment [Table Text Block]
  

Three Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $510  $68  $—  $578 

Cost of revenues

  295   204   —   499 

Gross profit

 $215  $(136) $—  $79 

Gross profit %

  42%  (200)%     14%
                 

Allocated operating expenses

 $60  $104  $—  $164 

Unallocated operating expenses

  —   —   987   987 

Total operating expenses

 $60  $104  $987  $1,151 
                 

Operating income (loss)

 $155  $(240) $(987) $(1,072)

Interest income, net

  (31)  (1)  —   (32)

Income (loss) before income taxes

  186   (239)  (987)  (1,040)

Income tax expense

  —   —   —   — 

Net income (loss)

 $186  $(239) $(987) $(1,040)
  

Three Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $603  $269  $—  $872 

Cost of revenues

  398   250   —   648 

Gross profit

 $205  $19  $—  $224 

Gross profit %

  34%  7%     26%
                 

Allocated operating expenses

 $—  $151  $—  $151 

Unallocated operating expenses

  —   —  $998   998 

Total operating expenses

 $—  $151  $998  $1,149 
                 

Operating income (loss)

 $205  $(132) $(998) $(925)

Interest income, net

  (35)  5   —   (30)

Income (loss) before income taxes

  240   (137)  (998)  (895)

Income tax expense

  —   —   —   — 

Net income (loss)

 $240  $(137) $(998) $(895)
  

Nine Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,540  $275  $—  $1,815 

Cost of revenues

  995   624   —   1,619 

Gross profit

 $545  $(349) $—  $196 

Gross profit %

  35%  (127)%     11%
                 

Allocated operating expenses

 $122  $347  $—  $469 

Unallocated operating expenses

  —   —   3,001   3,001 

Total operating expenses

 $122  $347  $3,001  $3,470 
                 

Operating income (loss)

 $423  $(696) $(3,001) $(3,274)

Interest income, net

  (98)  (26)  —   (124)

Income (loss) before income taxes

  521   (670)  (3,001)  (3,150)

Income tax expense

  6   3   —   9 

Net income (loss)

 $515  $(673) $(3,001) $(3,159)
  

Nine Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,933  $933  $—  $2,866 

Cost of revenues

  1,288   956   —   2,244 

Gross profit

 $645  $(23) $—  $622 

Gross profit %

  33%  (2)%     22%
                 

Allocated operating expenses

 $3  $61  $—  $64 

Unallocated operating expenses

  —   —   3,777   3,777 

Total operating expenses

 $3  $61  $3,777  $3,841 
                 

Operating income (loss)

 $642  $(84) $(3,777) $(3,219)

Interest income, net

  (69)  (25)  —   (94)

Income (loss) before income taxes

  711   (59)  (3,777)  (3,125)

Income tax expense

  7   31   —   38 

Net income (loss)

 $704  $(90) $(3,777) $(3,163)
Revenue from External Customers by Geographic Areas [Table Text Block]
  

Three Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Domestic

 $227  $356  $698  $1,356 

Foreign

 $351  $516   1,117   1,510 
  $578  $872  $1,815  $2,866 
Disaggregation of Revenue [Table Text Block]
  

Three Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $6   1% $38   4%

Network services

  502   87%  557   64%

Professional and other services

  2   —%  8   1%

Total Managed Services revenue

 $510   88% $603   69%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $68   12% $268   31%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $68   12% $269   31%

Total revenue

 $578   100% $872   100%
  

Nine Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $41   2% $148   5%

Network services

  1,489   82%  1,758   61%

Professional and other services

  10   1%  27   1%

Total Managed Services revenue

 $1,540   85% $1,933   67%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $275   15% $932   33%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $275   15% $933   33%

Total revenue

 $1,815   100% $2,866   100%
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]
   

Three Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  87%  60%
   

Nine Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  83%  56%
   

As of September 30,

 
   

2024

  

2023

 
   

% of Accounts

  

% of Accounts

 
 

Segment

 

Receivable

  

Receivable

 

Customer A

Managed Services

  15%  —%

Customer B

Collaboration Products

  55%  —%

Customer C

Collaboration Products

  —%  38%

Customer D

Collaboration Products

  —%  12%

Customer E

Managed Services

  11%  —%

Customer F

Collaboration Products

  11%  —%
v3.24.3
Note 1 - Business Description and Significant Accounting Policies (Details Textual)
 3 Months Ended 9 Months Ended
Aug. 23, 2024
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents   $ 6,766,000 $ 5,619,000 $ 6,766,000 $ 5,990,000
Certificates of Deposit, at Carrying Value   500,000 $ 500,000 500,000 500,000
Number of Operating Segments     2    
Intangible Assets, Net (Excluding Goodwill)     $ 0   0
Amortization of Intangible Assets   86,000   259,000  
Operating Lease, Right-of-Use Asset     0   17,000
Operating Lease, Liability     0   $ 17,000
Operating Lease, Expense   70,000 $ 17,000 123,000  
Sublease Income   $ 0   $ 27,000  
G P Communications [Member]          
Subsidiary, Ownership Percentage, Parent     100.00%    
Reverse Stock Split [Member]          
Stockholders' Equity Note, Stock Split, Conversion Ratio 40        
v3.24.3
Note 2 - Liquidity (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents $ 5,619,000     $ 6,766,000     $ 5,619,000 $ 6,766,000 $ 5,990,000
Working Capital 4,665,000           4,665,000    
Net Income (Loss) Attributable to Parent (1,040,000) $ (983,000) $ (1,136,000) $ (895,000) $ (1,049,000) $ (1,219,000) (3,159,000) (3,163,000)  
Net Cash Provided by (Used in) Financing Activities             2,149,000 5,969,000  
Net Cash Provided by (Used in) Operating Activities             (2,521,000) $ (2,288,000)  
Severance Costs $ 106,000           $ 106,000    
v3.24.3
Note 3 - Accrued Expenses and Other Current Liabilities - Schedule of Accrued Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2024
Dec. 31, 2023
Compensation costs $ 856 $ 448
Customer deposits 77 118
Professional fees 20 104
Taxes and regulatory fees 25 21
Accrued rent 170 202
Accrued dividends on Series F Preferred Stock 16 136
Other accrued expenses and liabilities 11 9
Accrued expenses and other liabilities $ 1,175 $ 1,038
v3.24.3
Note 4 - Capital Stock (Details Textual)
 1 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 18 Months Ended
Aug. 23, 2024
$ / shares
shares
Mar. 31, 2023
$ / shares
shares
Mar. 30, 2023
$ / shares
shares
Nov. 06, 2024
USD ($)
$ / shares
shares
Sep. 30, 2024
USD ($)
$ / shares
shares
Mar. 31, 2024
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Jun. 30, 2023
shares
Mar. 31, 2023
$ / shares
shares
Sep. 30, 2024
USD ($)
$ / shares
shares
Sep. 30, 2023
USD ($)
$ / shares
shares
Dec. 31, 2023
$ / shares
shares
Jun. 30, 2024
shares
Oct. 06, 2023
$ / shares
Dec. 31, 2022
$ / shares
shares
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares         $ 0.0001         $ 0.0001   $ 0.0001      
Common Stock, Shares Authorized (in shares)         150,000,000         150,000,000   150,000,000      
Common Stock, Shares, Issued (in shares)         1,071,545         1,071,545   573,644      
Common Stock, Shares, Outstanding (in shares)         1,071,356         1,071,356   573,455      
Stock Issued During Period, Shares, Warrants Exercised (in shares)                     8,516        
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares         $ 0.0001         $ 0.0001   $ 0.0001      
Class of Warrant or Right, Outstanding (in shares)         2,345,603         2,345,603          
Warrant Adjustment, Deemed Dividend | $         $ 8,974,000   $ 0     $ 8,974,000 $ 0        
Series F Preferred Stock [Member]                              
Stock Issued During Period, Shares, Warrants Exercised (in shares)         1,648                    
Conversion of Stock, Shares Converted (in shares)                   3,033   4,620      
Stock Issued During Period, Shares, New Issues (in shares)   6,550               1,648          
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares     $ 68.4   $ 11.17   $ 68.4     $ 11.17 $ 68.4        
Preferred Stock, Convertible, Floor Price (in dollars per share) | $ / shares         $ 11.168         $ 11.168       $ 11.168  
Private Placement [Member] | Series F Preferred Stock [Member]                              
Stock Issued During Period, Shares, New Issues (in shares)     6,550                        
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares     $ 0.0001                        
Common Stock [Member]                              
Common Stock, Shares, Outstanding (in shares)         1,071,356,000         1,071,356,000          
Stock Issued During Period, Shares, Warrants Exercised (in shares)         208,933     8,516       18,681,000      
Stock Issued During Period, Shares, Common Warrants Exercised (in shares)                   208,933,000          
Shares Issued, Shares, Share-Based Payment Arrangement, after Forfeiture (in shares)           0   4,491     4,491 4,491,000      
Stock Issued During Period, Shares, New Issues (in shares)                 0            
Conversion of Series F Preferred Stock to Common Stock [Member]                              
Conversion of Stock, Shares Issued (in shares)             49,143     288,968 52,812 352,624 641,592    
Conversion of Stock, Shares Converted (in shares)             1,229     3,033 1,404        
Common Warrants [Member]                              
Stock Issued During Period, Shares, Warrants Exercised (in shares)         208,933                    
Class of Warrant or Right, Exercised (in shares)         208,933         208,933 8,516 18,681      
Stock Issued During Period, Shares, Common Warrants Exercised (in shares)         208,933                    
Class of Warrant or Right, Cash Fee, Percentage of Proceeds         8.00%                    
Class of Warrant or Right, Issued (in shares)                   24,104   113,597      
Warrants and Rights Outstanding, Term (Year)         5 years         5 years          
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares $ 3.41438       $ 3.44         $ 3.44   $ 69.03     $ 2,653.6
Class of Warrant or Right, Outstanding (in shares) 2,401,047       2,345,603         2,345,603   103,453     8,609
Class of Warrant or Right, Exercise Price of Warrants or Rights Exercised (in dollars per share) | $ / shares         $ 3.41438         $ 3.41   $ 31.18      
Proceeds from Warrant Exercises | $         $ 713,000                    
Proceeds From Warrant Exercises, Net | $         671,000                    
Class of Warrant or Right, Cash Fee | $         $ 57,000                    
Common Warrants [Member] | Subsequent Event [Member]                              
Stock Issued During Period, Shares, Warrants Exercised (in shares)       73,381                      
Class of Warrant or Right, Exercised (in shares)       73,381                      
Class of Warrant or Right, Exercise Price of Warrants or Rights Exercised (in dollars per share) | $ / shares       $ 3.41438                      
Proceeds from Warrant Exercises | $       $ 251,000                      
Proceeds From Warrant Exercises, Net | $       $ 231,000                      
Preferred Warrants [Member]                              
Stock Issued During Period, Shares, Warrants Exercised (in shares)                   1,648          
Class of Warrant or Right, Exercised (in shares)         1,648         1,648          
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)     32,750                        
Class of Warrant or Right, Cash Fee, Percentage of Proceeds                   8.00%          
Warrants and Rights Outstanding, Term (Year)         3 years         3 years          
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share) | $ / shares         $ 975         $ 975          
Class of Warrant or Right, Outstanding (in shares)         31,102         31,102          
Class of Warrant or Right, Exercise Price of Warrants or Rights Exercised (in dollars per share) | $ / shares                   $ 975          
Proceeds from Warrant Exercises | $                   $ 1,607,000          
Proceeds From Warrant Exercises, Net | $                   1,478,000 $ 0        
Class of Warrant or Right, Cash Fee | $                   129,000          
Investor Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)     95,764                        
Placement Agent Warrants [Member]                              
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)   103,427 7,663           103,427            
Class of Warrant or Right, Cash Fee, Percentage of Proceeds     8.00%                        
Preferred Stock, Convertible, Conversion Price (in dollars per share) | $ / shares   $ 68.4             $ 68.4            
Class of Warrant or Right, Beneficial Ownership Percentage   4.99%             4.99%            
Class of Warrant or Right, Outstanding (in shares) 153,470                            
Warrant Adjustment, Deemed Dividend | $                   $ 539,000          
Reverse Stock Split [Member]                              
Stockholders' Equity Note, Stock Split, Conversion Ratio 40                            
v3.24.3
Note 4 - Capital Stock - Summary of Common Stock Outstanding (Details) - shares
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Issuances related to warrant exercises (in shares)             8,516  
Less Treasury Shares: (in shares) (189)         (189)   (189)
Common stock, outstanding (in shares) 1,071,356         1,071,356   573,455
Common Stock [Member]                
Issued Shares (in shares)     573,644,000     573,644,000 208,018,000 208,018,000
Issuances from Preferred Stock conversions (in shares)   198,912 90,056 49,143 3,669 288,968,000   352,624,000
Issuances related to warrant exercises (in shares) 208,933       8,516     18,681,000
Issuances related to stock compensation (in shares)     0   4,491   4,491 4,491,000
Common shares exchanged for prepaid warrants (in shares)       10,170       (10,170,000)
Issuances from Common Warrant Exercises (in shares)           208,933,000    
Issued Shares (in shares) 1,071,545,000         1,071,545,000   573,644,000
Less Treasury Shares: (in shares) (189,000)         (189,000)    
Common stock, outstanding (in shares) 1,071,356,000         1,071,356,000    
v3.24.3
Note 4 - Capital Stock - Make Whole Provision Transactions (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Aug. 23, 2024
Warrants outstanding (in shares) 2,345,603   2,345,603    
Warrants, deemed dividend $ 8,974,000 $ 0 $ 8,974,000 $ 0  
Original Warrants [Member]          
Warrants outstanding (in shares) 5,100,595   5,100,595    
Aggregate Exercise Price $ 8,722,000   $ 8,722,000    
Warrants Post Reverse Split [Member]          
Warrants outstanding (in shares) [1] 127,531   127,531    
Aggregate Exercise Price [1] $ 8,722,000   $ 8,722,000    
Warrants Post Make Whole Provision [Member]          
Warrants outstanding (in shares) [2] 2,554,517   2,554,517    
Aggregate Exercise Price [2] $ 8,722,000   $ 8,722,000    
Warrants Issued on March 31, 2023 [Member]          
Warrants outstanding (in shares) 19   19    
Warrants, exercise price (in dollars per share) $ 2,640   $ 2,640    
Warrants, deemed dividend     $ 6,739,000    
Warrants Issued on March 31, 2023 [Member] | Original Warrants [Member]          
Warrants outstanding (in shares) 3,830,417   3,830,417    
Warrants, exercise price (in dollars per share) [3] $ 1.71   $ 1.71    
Warrants Issued on March 31, 2023 [Member] | Warrants Post Reverse Split [Member]          
Warrants outstanding (in shares) [1] 95,764   95,764    
Warrants, exercise price (in dollars per share) $ 68.4   $ 68.4    
Warrants Issued on March 31, 2023 [Member] | Warrants Post Make Whole Provision [Member]          
Warrants outstanding (in shares) [2] 1,918,371   1,918,371    
Warrants, exercise price (in dollars per share) [4] $ 3.41   $ 3.41    
Warrants Issued in Q2 2024 [Member]          
Warrants, deemed dividend     $ 1,696,000    
Warrants Issued in Q2 2024 [Member] | Original Warrants [Member]          
Warrants outstanding (in shares) 963,745   963,745    
Warrants, exercise price (in dollars per share) [3] $ 1.71   $ 1.71    
Warrants Issued in Q2 2024 [Member] | Warrants Post Reverse Split [Member]          
Warrants outstanding (in shares) [1] 24,104   24,104    
Warrants, exercise price (in dollars per share) $ 68.4   $ 68.4    
Warrants Issued in Q2 2024 [Member] | Warrants Post Make Whole Provision [Member]          
Warrants outstanding (in shares) [2] 482,676   482,676    
Warrants, exercise price (in dollars per share) [4] $ 3.41   $ 3.41    
Placement Agent Warrants [Member]          
Warrants outstanding (in shares)         153,470
Warrants, deemed dividend     $ 539,000    
Placement Agent Warrants [Member] | Original Warrants [Member]          
Warrants outstanding (in shares) 306,433   306,433    
Warrants, exercise price (in dollars per share) [3] $ 1.71   $ 1.71    
Placement Agent Warrants [Member] | Warrants Post Reverse Split [Member]          
Warrants outstanding (in shares) [1] 7,663   7,663    
Warrants, exercise price (in dollars per share) $ 68.4   $ 68.4    
Placement Agent Warrants [Member] | Warrants Post Make Whole Provision [Member]          
Warrants outstanding (in shares) [2] 153,470   153,470    
Warrants, exercise price (in dollars per share) [4] $ 3.41   $ 3.41    
[1] Adjusted by the Reverse Split.
[2] Based on the original aggregate exercise price divided by the Make Whole Provision exercise price.
[3] Original exercise price based on the March 30, 2023 initial exercise price.
[4] Calculated by dividing (x) the sum of the dollar volume-weighted average price of the Company's Common Stock for each of the five lowest trading days during the sixteen trading days after the Reverse Split by (y) five.
v3.24.3
Note 4 - Capital Stock - Summary of Warrants Activity (Details) - $ / shares
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Aug. 23, 2024
Q2 2021 (in shares) 2,345,603 2,345,603      
Warrants outstanding and exercisable (in shares)          
Warrants outstanding and exercisable (in shares) 2,345,603 2,345,603      
Warrants Issued on March 31, 2023 [Member]          
Q2 2021 (in shares) 19 19      
Q2 2021 (in dollars per share) $ 2,640 $ 2,640      
Warrants outstanding and exercisable (in shares)          
Warrants outstanding and exercisable, exercise price (in dollars per share)          
Warrants outstanding and exercisable (in shares) 19 19      
Warrants outstanding and exercisable, exercise price (in dollars per share) $ 2,640 $ 2,640      
Second Warrants Issued on March 31, 2023 [Member]          
Q2 2021 (in shares) 1,872,908 1,872,908      
Q2 2021 (in dollars per share) $ 3.41 $ 3.41      
Warrants outstanding and exercisable (in shares)          
Warrants outstanding and exercisable, exercise price (in dollars per share)          
Warrants outstanding and exercisable (in shares) 1,872,908 1,872,908      
Warrants outstanding and exercisable, exercise price (in dollars per share) $ 3.41 $ 3.41      
Common Warrants [Member]          
Q2 2021 (in shares) 2,345,603 2,345,603   103,453 2,401,047
Q2 2021 (in dollars per share) $ 3.44 $ 3.44   $ 69.03 $ 3.41438
Warrants outstanding and exercisable (in shares)   103,453 8,609 8,609  
Warrants outstanding and exercisable, exercise price (in dollars per share)   $ 69.03 $ 2,653.6 $ 2,653.6  
Granted, warrants (in shares)   24,104   113,597  
Granted, warrants, exercise price (in dollars per share)   $ 68.4   $ 10.17  
Exercised, warrants (in shares) (208,933) (208,933) (8,516) (18,681)  
Exercised, warrants, exercise price (in dollars per share) $ 3.41438 $ 3.41   $ 31.18  
Expired, warrants (in shares)   (7)   (72)  
Expired, warrants, exercise price (in dollars per share)   $ 2,400   $ 2,853.75  
Make Whole Provision, warrants (in shares)   2,426,986      
Make Whole Provision, weighted average exercise price (in dollars per share)   $ 3.41      
Warrants outstanding and exercisable (in shares) 2,345,603 2,345,603   103,453  
Warrants outstanding and exercisable, exercise price (in dollars per share) $ 3.44 $ 3.44   $ 69.03  
Warrants Issued on June 28, 2021 [Member]          
Q2 2021 (in shares) 472,676 472,676      
Q2 2021 (in dollars per share) $ 3.41 $ 3.41      
Warrants outstanding and exercisable (in shares)          
Warrants outstanding and exercisable, exercise price (in dollars per share)          
Warrants outstanding and exercisable (in shares) 472,676 472,676      
Warrants outstanding and exercisable, exercise price (in dollars per share) $ 3.41 $ 3.41      
v3.24.3
Note 5 - Preferred Stock (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended 18 Months Ended
Oct. 06, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Jun. 30, 2024
Aug. 23, 2024
Mar. 30, 2023
Dec. 31, 2022
Preferred Stock, Shares Authorized (in shares)     42,000   42,000   42,000        
Preferred Stock, Shares Designated (in shares)     1,983,250   1,983,250            
Preferred Stock, Shares Issued (in shares)     545   545   1,930        
Stock Issued During Period, Shares, Warrants Exercised (in shares)           8,516          
Preferred Stock, Shares Outstanding (in shares)     545   545   1,930        
Class of Warrant or Right, Outstanding (in shares)     2,345,603   2,345,603            
Conversion of Series F Preferred Stock to Common Stock [Member]                      
Conversion of Stock, Shares Converted (in shares)       1,229 3,033 1,404          
Conversion of Stock, Amount of Dividends Converted       $ 43,000 $ 194,000 $ 47,000          
Conversion of Stock, Shares Issued (in shares)       49,143 288,968 52,812 352,624 641,592      
Preferred Warrants [Member]                      
Stock Issued During Period, Shares, Warrants Exercised (in shares)         1,648            
Class of Warrant or Right, Exercised (in shares)     1,648   1,648            
Proceeds from Warrant Exercises         $ 1,607,000            
Proceeds From Warrant Exercises, Net         $ 1,478,000 $ 0          
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)     $ 975   $ 975            
Warrants and Rights Outstanding, Term (Year)     3 years   3 years            
Class of Warrant or Right, Percentage of Securities Called by Warrants or Rights     100.00%   100.00%            
Class of Warrant or Right, Exercise Price of Warrants or Rights Exercised (in dollars per share)         $ 975            
Class of Warrant or Right, Outstanding (in shares)     31,102   31,102            
Class of Warrant or Right, Cash Fee, Percentage of Proceeds         8.00%            
Class of Warrant or Right, Cash Fee         $ 129,000            
Common Warrants [Member]                      
Stock Issued During Period, Shares, Warrants Exercised (in shares)     208,933                
Class of Warrant or Right, Exercised (in shares)     208,933   208,933 8,516 18,681        
Proceeds from Warrant Exercises     $ 713,000                
Proceeds From Warrant Exercises, Net     $ 671,000                
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)     $ 3.44   $ 3.44   $ 69.03   $ 3.41438   $ 2,653.6
Warrants and Rights Outstanding, Term (Year)     5 years   5 years            
Class of Warrant or Right, Exercise Price of Warrants or Rights Exercised (in dollars per share)     $ 3.41438   $ 3.41   $ 31.18        
Class of Warrant or Right, Issued (in shares)         24,104   113,597        
Class of Warrant or Right, Outstanding (in shares)     2,345,603   2,345,603   103,453   2,401,047   8,609
Class of Warrant or Right, Cash Fee, Percentage of Proceeds     8.00%                
Class of Warrant or Right, Cash Fee     $ 57,000                
Series F Preferred Stock [Member]                      
Preferred Stock, Convertible, Conversion Price (in dollars per share)     $ 11.17 $ 68.4 $ 11.17 $ 68.4       $ 68.4  
Preferred Stock, Convertible, Conversion Price Percentage                   80.00%  
Preferred Stock, Convertible, Floor Price (in dollars per share) $ 11.168   $ 11.168   $ 11.168            
Preferred Stock, Stated Value Per Share (in dollars per share) $ 1,000                    
Preferred Stock, Dividend Rate, Percentage 9.00%       20.00%            
Stock Issued During Period, Shares, Warrants Exercised (in shares)     1,648                
Conversion of Stock, Shares Converted (in shares)         3,033   4,620        
Preferred Stock, Shares Outstanding (in shares)     545   545   1,930        
Dividends Payable     $ 16,000,000   $ 16,000,000   $ 136,000,000        
Private Placement [Member]                      
Proceeds from Issuance or Sale of Equity   $ 6,386,000                  
Proceeds from Issuance or Sale of Equity, Net   5,364,000                  
Payments of Stock Issuance Costs   $ 1,022,000                  
Maximum [Member]                      
Preferred Stock, Shares Authorized (in shares)     5,000,000   5,000,000            
v3.24.3
Note 5 - Preferred Stock - Schedule of Stock by Class (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended 12 Months Ended 18 Months Ended
Mar. 31, 2023
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Jun. 30, 2024
Mar. 30, 2023
Accrued Dividends amount     $ 76 $ 282      
Preferred stock, shares outstanding (in shares)     545   1,930    
Conversion of Series F Preferred Stock to Common Stock [Member]              
Conversions, preferred (in shares)   (1,229) (3,033) (1,404)      
Conversions, Shares Issued (in shares)   49,143 288,968 52,812 352,624 641,592  
Series F Preferred Stock [Member]              
Issuance, preferred (in shares) 6,550   1,648        
Accrued Dividends amount     $ 76,000   $ 343,000    
Conversions, preferred (in shares)     (3,033)   (4,620)    
Conversions dividend     $ (196,000)   $ (207,000)    
Convertible, Conversion Price (in dollars per share)   $ 68.4 $ 11.17 $ 68.4     $ 68.4
Preferred stock, shares outstanding (in shares)     545   1,930    
Balance dividend     $ 16,000   $ 136,000    
Series F Preferred Stock [Member] | Weighted Average [Member]              
Convertible, Conversion Price (in dollars per share)     $ 11.2   $ 13.6    
v3.24.3
Note 6 - Stock Based Compensation (Details Textual) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2022
Dec. 31, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant (in shares) 0   0     0
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount $ 0   $ 0      
Share-Based Payment Arrangement, Option [Member]            
Share-Based Payment Arrangement, Expense 0 $ 31,000 62,000 $ 93,000    
Restricted Stock [Member]            
Share-Based Payment Arrangement, Expense $ 0   $ 0 $ 0    
Share-Based Compensation Arrangement by Share-Based Payment Award, Non-Option Equity Instruments, Outstanding, Number (in shares) 0   0     0
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)       2 49  
Restricted Stock Units (RSUs) [Member]            
Share-Based Payment Arrangement, Expense       $ 380,000    
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Vested in Period (in shares)       4,440    
v3.24.3
Note 6 - Stock Based Compensation - Summary of Stock Based Compensation Activity (Details) - $ / shares
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Options outstanding, number of options (in shares) 250 417
Options outstanding, Weighted Average Exercise Price (in dollars per share) $ 1,950 $ 5,744.82
Options exercisable, number of options (in shares) 166 250
Options exercisable, Weighted Average Exercise Price (in dollars per share) $ 1,950 $ 8,274.91
Vested, outstanding, number of options (in shares) 0 0
Vested, outstanding, , Weighted Average Exercise Price (in dollars per share) $ 0 $ 0
Vested exercisable, number of options (in shares) 84 83
Vested exercisable, Weighted Average Exercise Price (in dollars per share) $ 1,950 $ 1,950
Expired, outstanding, number of options (in shares)   (167)
Expired, outstanding, Weighted Average Exercise Price (in dollars per share)   $ 11,435.6
Expired exercisable, number of options (in shares)   (167)
Expired exercisable, Weighted Average Exercise Price (in dollars per share)   $ 11,435.6
Options outstanding, number of options (in shares) 250 250
Options outstanding, Weighted Average Exercise Price (in dollars per share) $ 1,950 $ 1,950
Options exercisable, number of options (in shares) 250 166
Options exercisable, Weighted Average Exercise Price (in dollars per share) $ 1,950 $ 1,950
v3.24.3
Note 7 - Net Loss Per Share (Details Textual) - Series F Preferred Stock [Member] - $ / shares
Sep. 30, 2024
Oct. 06, 2023
Sep. 30, 2023
Mar. 30, 2023
Preferred Stock, Convertible, Floor Price (in dollars per share) $ 11.168 $ 11.168    
Preferred Stock, Convertible, Conversion Price (in dollars per share) $ 11.17   $ 68.4 $ 68.4
v3.24.3
Note 7 - Net Loss Per Share - Schedule of Earning Per Share (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Net loss $ (1,040,000) $ (983,000) $ (1,136,000) $ (895,000) $ (1,049,000) $ (1,219,000) $ (3,159,000) $ (3,163,000)
Preferred stock dividends 12,000     133,000     76,000 282,000
Warrants, deemed dividend 8,974,000     0     8,974,000 0
Induced conversion of warrants 0     0     0 751,000
Warrant modification 0     0     0 25,000
Net loss attributable to common stockholders $ (10,026,000)     $ (1,028,000)     $ (12,209,000) $ (4,221,000)
Basic and diluted (in shares) 890,943     243,378     735,286 230,214
Basic and diluted net loss per share (in dollars per share) $ (11.25)     $ (4.22)     $ (16.6) $ (18.34)
v3.24.3
Note 7 - Net Loss Per Share - Schedule of Antidilutive Securities (Details) - shares
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Share-Based Payment Arrangement, Option [Member]    
Antidilutive Securities (in shares) 250 250
Convertible Series F Preferred Stock [Member]    
Antidilutive Securities (in shares) [1],[2] 164,857 1,507,155
Series F Preferred Warrants [Member]    
Antidilutive Securities (in shares) [3],[4] 2,784,921 2,932,486
Common Stock Warrants [Member]    
Antidilutive Securities (in shares) 2,345,603 113,623
[1] Calculation assumes conversion of the stated value, and accrued dividends, of the Series F Preferred Stock into Common Stock at the Floor Price as of June 30, 2024, and at the initial conversion price of $1.71 as of June 30, 2023.
[2] Calculation assumes conversion of the stated value, and accrued dividends, of the Series F Preferred Stock into Common Stock at the Floor Price of $11.17 as of September 30, 2024, and at the initial conversion price of $68.40 as of September 30, 2023.
[3] Calculation assumes exercise of the Series F Preferred Warrants for cash into Series F Preferred Stock and subsequent conversion of the Series F Preferred Stock into Common Stock at the Floor Price as of June 30, 2024 and at the initial conversion price of $1.71 as of June 30, 2023.
[4] Calculation assumes exercise of the Series F Preferred Warrants for cash into Series F Preferred Stock and subsequent conversion of the Series F Preferred Stock into Common Stock at the Floor Price of $11.17 per share as of September 30, 2024 and at the initial conversion price of $68.40 as of September 30, 2023.
v3.24.3
Note 8 - Segment Reporting (Details Textual)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Number of Operating Segments     2  
Geographic Concentration Risk [Member] | Revenue, Segment Benchmark [Member] | UNITED KINGDOM        
Concentration Risk, Percentage   11.00%    
Geographic Concentration Risk [Member] | Revenue, Segment Benchmark [Member] | Non-US [Member]        
Concentration Risk, Percentage 0.00%   0.00% 0.00%
v3.24.3
Note 8 - Segment Reporting - Schedule of Segment Reporting Information by Segment (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue $ 578,000     $ 872,000     $ 1,815,000 $ 2,866,000
Cost of revenues 499,000     648,000     1,619,000 2,244,000
Gross profit $ 79,000     $ 224,000     $ 196,000 $ 622,000
Gross profit % 14.00%     26.00%     11.00% 22.00%
Operating expenses $ 1,151,000     $ 1,149,000     $ 3,470,000 $ 3,841,000
Operating income (loss) (1,072,000)     (925,000)     (3,274,000) (3,219,000)
Interest income, net (32,000)     (30,000)     (124,000) (94,000)
Income (loss) before income taxes (1,040,000)     (895,000)     (3,150,000) (3,125,000)
Income tax expense 0     0     9,000 38,000
Net loss (1,040,000) $ (983,000) $ (1,136,000) (895,000) $ (1,049,000) $ (1,219,000) (3,159,000) (3,163,000)
Reportable Subsegments [Member]                
Operating expenses 164,000     151,000     469,000 64,000
Intersubsegment Eliminations [Member]                
Operating expenses 987,000     998,000     3,001,000 3,777,000
Managed Services [Member]                
Revenue 510,000     603,000     1,540,000 1,933,000
Collaboration Products [Member]                
Revenue 68,000     269,000     275,000 933,000
Operating Segments [Member] | Managed Services [Member]                
Revenue 510,000     603,000     1,540,000 1,933,000
Cost of revenues 295,000     398,000     995,000 1,288,000
Gross profit $ 215,000     $ 205,000     $ 545,000 $ 645,000
Gross profit % 42.00%     34.00%     35.00% 33.00%
Operating expenses $ 60,000     $ 0     $ 122,000 $ 3,000
Operating income (loss) 155,000     205,000     423,000 642,000
Interest income, net (31,000)     (35,000)     (98,000) (69,000)
Income (loss) before income taxes 186,000     240,000     521,000 711,000
Income tax expense 0     0     6,000 7,000
Net loss 186,000     240,000     515,000 704,000
Operating Segments [Member] | Managed Services [Member] | Reportable Subsegments [Member]                
Operating expenses 60,000     0     122,000 3,000
Operating Segments [Member] | Managed Services [Member] | Intersubsegment Eliminations [Member]                
Operating expenses 0     0     0 0
Operating Segments [Member] | Collaboration Products [Member]                
Revenue 68,000     269,000     275,000 933,000
Cost of revenues 204,000     250,000     624,000 956,000
Gross profit $ (136,000)     $ 19,000     $ (349,000) $ (23,000)
Gross profit % (200.00%)     7.00%     (127.00%) (2.00%)
Operating expenses $ 104,000     $ 151,000     $ 347,000 $ 61,000
Operating income (loss) (240,000)     (132,000)     (696,000) (84,000)
Interest income, net (1,000)     5,000     (26,000) (25,000)
Income (loss) before income taxes (239,000)     (137,000)     (670,000) (59,000)
Income tax expense 0     0     3,000 31,000
Net loss (239,000)     (137,000)     (673,000) (90,000)
Operating Segments [Member] | Collaboration Products [Member] | Reportable Subsegments [Member]                
Operating expenses 104,000     151,000     347,000 61,000
Operating Segments [Member] | Collaboration Products [Member] | Intersubsegment Eliminations [Member]                
Operating expenses 0     0     0 0
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]                
Revenue 0     0     0 0
Cost of revenues 0     0     0 0
Gross profit $ 0     $ 0     $ 0 $ 0
Gross profit %        
Operating expenses $ 987,000     $ 998,000     $ 3,001,000 $ 3,777,000
Operating income (loss) (987,000)     (998,000)     (3,001,000) (3,777,000)
Interest income, net 0     0     0 0
Income (loss) before income taxes (987,000)     (998,000)     (3,001,000) (3,777,000)
Income tax expense 0     0     0 0
Net loss (987,000)     (998,000)     (3,001,000) (3,777,000)
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member] | Reportable Subsegments [Member]                
Operating expenses 0     0     0 0
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member] | Intersubsegment Eliminations [Member]                
Operating expenses $ 987,000     $ 998,000     $ 3,001,000 $ 3,777,000
v3.24.3
Note 8 - Segment Reporting - Revenue From External Customers by Geographic Areas (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue $ 578 $ 872 $ 1,815 $ 2,866
UNITED STATES        
Revenue 227 356 698 1,356
Non-US [Member]        
Revenue $ 351 $ 516 $ 1,117 $ 1,510
v3.24.3
Note 8 - Segment Reporting - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue $ 578 $ 872 $ 1,815 $ 2,866
All Products [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 100.00% 100.00% 100.00% 100.00%
Managed Services [Member]        
Revenue $ 510 $ 603 $ 1,540 $ 1,933
Managed Services [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 88.00% 69.00% 85.00% 67.00%
Managed Services [Member] | Video Collaboration Service [Member]        
Revenue $ 6 $ 38 $ 41 $ 148
Managed Services [Member] | Video Collaboration Service [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 1.00% 4.00% 2.00% 5.00%
Managed Services [Member] | Network Services [Member]        
Revenue $ 502 $ 557 $ 1,489 $ 1,758
Managed Services [Member] | Network Services [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 87.00% 64.00% 82.00% 61.00%
Managed Services [Member] | Professional and Other Services [Member]        
Revenue $ 2 $ 8 $ 10 $ 27
Managed Services [Member] | Professional and Other Services [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 0.00% 1.00% 1.00% 1.00%
Collaboration Products [Member]        
Revenue $ 68 $ 269 $ 275 $ 933
Collaboration Products [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 12.00% 31.00% 15.00% 33.00%
Collaboration Products [Member] | Video Collaboration Service [Member]        
Revenue $ 68 $ 268 $ 275 $ 932
Collaboration Products [Member] | Video Collaboration Service [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 12.00% 31.00% 15.00% 33.00%
Collaboration Products [Member] | Professional and Other Services [Member]        
Revenue $ 0 $ 1 $ 0 $ 1
Collaboration Products [Member] | Professional and Other Services [Member] | Product Concentration Risk [Member] | Revenue from Contract with Customer Benchmark [Member]        
Concentration Risk, Percentage 0.00% 0.00% 0.00% 0.00%
v3.24.3
Note 8 - Segment Reporting - Schedules of Concentration of Risk by Risk Factor (Details) - Customer Concentration Risk [Member]
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Revenue from Contract with Customer Benchmark [Member] | Managed Services [Member] | Customer A [Member]        
Concentration Risk, Percentage 87.00% 60.00% 83.00% 56.00%
Accounts Receivable [Member] | Managed Services [Member] | Customer A [Member]        
Concentration Risk, Percentage     15.00% 0.00%
Accounts Receivable [Member] | Managed Services [Member] | Customer D [Member]        
Concentration Risk, Percentage     0.00% 12.00%
Accounts Receivable [Member] | Managed Services [Member] | Customer F [Member]        
Concentration Risk, Percentage     11.00% 0.00%
Accounts Receivable [Member] | Collaboration Products [Member] | Customer B [Member]        
Concentration Risk, Percentage     55.00% 0.00%
Accounts Receivable [Member] | Collaboration Products [Member] | Customer C [Member]        
Concentration Risk, Percentage     0.00% 38.00%
Accounts Receivable [Member] | Collaboration Products [Member] | Customer E [Member]        
Concentration Risk, Percentage     11.00% 0.00%
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