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 ~~June 30, 2022.~~March 31, 2023.

☐ 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.)

25587 Conifer Road, Suite 105-231, Conifer, CO 80433

(Address of Principal Executive Offices, including Zip Code)

(303) 640-3838

(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 ~~August 8, 2022~~May 9, 2023 was ~~30,816,048.~~2,580,370.

OBLONG, INC.

Index


PART I - FINANCIAL INFORMATION
Item 1. Financial Statements		1
	Condensed Consolidated Balance Sheets at ~~June 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021~~2022	1
	Unaudited Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	2
	Unaudited Condensed Consolidated ~~Statement~~Statements of Changes in Stockholders’ Equity for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~	5
	Notes to unaudited Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		2624
Item 4. Controls and Procedures		2624

PART II - OTHER INFORMATION
Item 1. Legal Proceedings		2624
Item 1A. Risk Factors		2624
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		2725
Item 3. Defaults Upon Senior Securities		2825
Item 4. Mine Safety Disclosures		2826
Item 5. Other Information		2826
Item 6. Exhibits		2927
Signatures		3028

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, ~~2021,~~2022, each included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 filed with the Securities and Exchange Commission (the “SEC”) on March ~~29, 2022.~~21, 2023. 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: our ability to meet commercial commitments; our expectations and estimates relating to customer attrition, the potential release of the equity financing proceeds from escrow, the future exercise of warrants, demand for our product offerings, sales cycles, future revenues, expenses, capital expenditures and cash flows; our ability to develop and launch new product offerings; evolution of our customer solutions and our service platforms; our ability to fund operations and continue as a going concern; expectations regarding adjustments to our cost of revenue and other operating expenses; our ability to finance investments in product development and sales and marketing; 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; ~~our expected insurance coverage on our second quarter 2022 casualty loss; and effectiveness~~adequacy of our ~~disclosure controls and procedures.~~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:

•the failure to obtain stockholder approval in connection with our March 2023 equity financing;

•the continued impact of the coronavirus pandemic on our business, including its impact on our customers and other business partners, our ability to conduct operations in the ordinary course, and our ability to obtain capital financing important to our ability to continue as a going concern;

•our ability to continue as a going concern;

•our ability to raise capital in one or more debt and/or equity offerings in order to fund operations or any growth initiatives;

•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;

•~~potential future impairment charges related to goodwill and intangible assets;~~

•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;

•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;

•our ability to satisfy the standards for continued listing of our common stock on the Nasdaq Capital Market;

•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.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OBLONG, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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


		June 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash	Cash	$	5,107	$	8,939	Cash	$	3,714	$	3,085
Restricted cash		—		61

Accounts receivable, net	Accounts receivable, net	491		849		Accounts receivable, net	392		415
Inventory		1,078		1,821
Inventory, net						Inventory, net	634		723
Prepaid expenses and other current assets	Prepaid expenses and other current assets	1,150		1,081		Prepaid expenses and other current assets	947		649
Total current assets	Total current assets	7,826		12,751		Total current assets	5,687		4,872
Property and equipment, net	Property and equipment, net	75		159		Property and equipment, net	3		3
Goodwill		—		7,367

Intangibles, net	Intangibles, net	6,402		7,562		Intangibles, net	518		604
Operating lease - right of use asset, net	Operating lease - right of use asset, net	245		659		Operating lease - right of use asset, net	99		142
Other assets	Other assets	22		109		Other assets	31		40
Total assets	Total assets	$	14,570	$	28,607	Total assets	$	6,338	$	5,661
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:

Accounts payable	Accounts payable	325		259		Accounts payable	$	207	$	184
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	976		959		Accrued expenses and other current liabilities	1,665		1,074
Current portion of deferred revenue	Current portion of deferred revenue	686		783		Current portion of deferred revenue	341		436
Current portion of operating lease liabilities	Current portion of operating lease liabilities	378		492		Current portion of operating lease liabilities	139		219

Total current liabilities	Total current liabilities	2,365		2,493		Total current liabilities	2,352		1,913
Long-term liabilities:	Long-term liabilities:					Long-term liabilities:

Operating lease liabilities, net of current portion	Operating lease liabilities, net of current portion	68		236		Operating lease liabilities, net of current portion	—		17
Deferred revenue, net of current portion	Deferred revenue, net of current portion	213		381		Deferred revenue, net of current portion	84		114

Total long-term liabilities		281		617

Total liabilities	Total liabilities	2,646		3,110		Total liabilities	2,436		2,044
Commitments and contingencies (see Note 11)	Commitments and contingencies (see Note 11)	0		0		Commitments and contingencies (see Note 11)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:

Common stock, $.0001 par value; 150,000,000 shares authorized; 30,929,331 shares issued and 30,816,048 outstanding at June 30, 2022 and December 31, 2021		3		3
Treasury stock, 113,283 shares of common stock at June 30, 2022 and December 31, 2021		(181)		(181)
Preferred stock Series F, convertible; $.0001 par value; $6,550,000 stated value; 42,000 shares authorized, 6,550 and zero shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively						Preferred stock Series F, convertible; $.0001 par value; $6,550,000 stated value; 42,000 shares authorized, 6,550 and zero shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	—		—
Common stock, $.0001 par value; 150,000,000 shares authorized; 2,070,861 shares issued and 2,063,308 outstanding at March 31, 2023 and December 31, 2022						Common stock, $.0001 par value; 150,000,000 shares authorized; 2,070,861 shares issued and 2,063,308 outstanding at March 31, 2023 and December 31, 2022	—		—
Treasury stock, 7,553 shares of common stock at March 31, 2023 and December 31, 2022						Treasury stock, 7,553 shares of common stock at March 31, 2023 and December 31, 2022	(181)		(181)
Additional paid-in capital	Additional paid-in capital	227,580		227,581		Additional paid-in capital	229,149		227,645
Accumulated deficit	Accumulated deficit	(215,478)		(201,906)		Accumulated deficit	(225,066)		(223,847)
Total stockholder's equity		11,924		25,497
Total stockholders' equity						Total stockholders' equity	3,902		3,617
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	14,570	$	28,607	Total liabilities and stockholders’ equity	$	6,338	$	5,661

See accompanying notes to condensed consolidated financial statements.

-1-

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2022		2021		2022		2021			2023		2022
Revenue	Revenue	$	1,333	$	2,049	$	2,865	$	3,967	Revenue	$	1,038	$	1,532
Cost of revenue (exclusive of depreciation and amortization and casualty loss)		926		1,249		1,959		2,539
Cost of revenue (exclusive of depreciation and amortization)										Cost of revenue (exclusive of depreciation and amortization)	762		1,033
Gross profit	Gross profit	407		800		906		1,428		Gross profit	276		499

Operating expenses:	Operating expenses:									Operating expenses:
Research and development	Research and development	398		599		1,402		1,291		Research and development	6		1,004
Sales and marketing	Sales and marketing	317		572		879		1,099		Sales and marketing	218		562
General and administrative	General and administrative	1,185		1,383		2,875		3,450		General and administrative	1,169		1,690
Impairment charges	Impairment charges	6,408		17		7,546		48		Impairment charges	—		1,138
Casualty loss		533		—		533		—

Depreciation and amortization	Depreciation and amortization	599		707		1,226		1,429		Depreciation and amortization	86		627
Total operating expenses	Total operating expenses	9,440		3,278		14,461		7,317		Total operating expenses	1,479		5,021
Loss from operations	Loss from operations	(9,033)		(2,478)		(13,555)		(5,889)		Loss from operations	(1,203)		(4,522)
Interest and other expense, net										Interest and other expense, net	5		6
Other income										Other income	(27)		—

Interest and other (income) expense, net										Interest and other (income) expense, net	(22)		6
Loss before income taxes										Loss before income taxes	(1,181)		(4,528)
Income tax expense										Income tax expense	38		11
Net loss										Net loss	(1,219)		(4,539)

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

Warrant Modification										Warrant Modification	25		—
Net loss attributable to common stockholders	Net loss attributable to common stockholders	$	(9,033)	$	(2,246)	$	(13,572)	$	(6,346)	Net loss attributable to common stockholders	$	(1,244)	$	(4,539)

Net loss attributable to common stockholders per share:	Net loss attributable to common stockholders per share:									Net loss attributable to common stockholders per share:
Basic and diluted net loss per share	Basic and diluted net loss per share	$	(0.29)	$	(0.08)	$	(0.44)	$	(0.29)	Basic and diluted net loss per share	$	(0.60)	$	(2.20)

Weighted-average number of shares of common stock:	Weighted-average number of shares of common stock:									Weighted-average number of shares of common stock:
Basic and diluted	Basic and diluted	30,816		26,644		30,816		22,250		Basic and diluted	2,065		2,065

See accompanying notes to condensed consolidated financial statements.

-2-

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three ~~and Six~~ Months Ended ~~June 30, 2022~~March 31, 2023

(In thousands, except shares)

(Unaudited)


		Common Stock			Treasury Stock										Series F Preferred Stock			Common Stock			Treasury Stock
		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Total			Shares	Amount		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Total
Balance at December 31, 2021		30,929,331	$	3	113,283	$	(181)	$	227,581	$	(201,906)	$	25,497
Balance at December 31, 2022														Balance at December 31, 2022	—	$	—	2,071,000	$	—	8,000	$	(181)	$	227,645	$	(223,847)	$	3,617
Net loss	Net loss	—	—		—	—		—		(4,539)		(4,539)		Net loss	—	—		—	—		—	—		—		(1,219)		(1,219)
Stock-based compensation	Stock-based compensation	—	—		—	—		52		—		52		Stock-based compensation	—	—		—	—		—	—		31		—		31
Forfeiture of unvested stock options		—	—		—	—		(84)		—		(84)
Balance at March 31, 2022		30,929,331	3		113,283	(181)		227,549		(206,445)		20,926
Net loss		—	—		—	—		—		(9,033)		(9,033)
Stock-based compensation		—	—		—	—		31		—		31

Balance at June 30, 2022		30,929,331	$	3	113,283	$	(181)	$	227,580	$	(215,478)	$	11,924
Proceeds from private placement, net of fees and amounts held in escrow														Proceeds from private placement, net of fees and amounts held in escrow	6,550	—		—	—		—	—		1,473		—		1,473
Balance at March 31, 2023														Balance at March 31, 2023	6,550	$	—	2,071,000	$	—	8,000	$	(181)	$	229,149	$	(225,066)	$	3,902

See accompanying notes to condensed consolidated financial statements.

-3-

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

Three ~~and Six~~ Months Ended ~~June 30, 2021~~March 31, 2022

(In thousands, except shares)

(Unaudited)

Series A-2 Preferred Stock Series D Preferred Stock Series E Preferred Stock Common Stock Treasury Stock
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Total
Balance at Balance at December 31, 2020 45 $ — 1,697,958 $ — 131,579 $ — 7,861,912 $ 1 113,283 $ (181) $ 215,092 $ (192,855) $ 22,057
Net loss — — — — — — — — — — — (3,433) (3,433)
Stock-based compensation — — — — — — — — — — 33 — 33
Conversion of Series A-2 Preferred Stock, including dividend accrual (45) — — — — — 84,292 — — — — — —
Conversion of Series D and E Preferred Stock — — (1,697,022) — (131,579) — 18,762,119 2 — — (2) — —
Issuance of stock for services — — — — — — 21,008 — — — 274 — 274
Forfeitures of restricted stock — — (81) — — — — — — — — — —
Series D Preferred shares to pay withholding taxes — — (855) — — — — — — — — — —
Balance at March 31, 2021 — — — — — — 26,729,331 3 113,283 (181) 215,397 (196,288) 18,931
Net loss — — — — — — — — — — — (2,246) (2,246)
Issuance of stock from financing, net of issuance costs — — — — — — 4,000,000 — — — 11,504 — 11,504
Issuance of stock for services — — — — — — — — — — 116 — 116
Balance at June 30, 2021 — $ — — $ — — $ — 30,729,331 $ 3 113,283 $ (181) $ 227,017 $ (198,534) $ 28,305


	Common Stock		Treasury Stock
		Shares	Amount		Shares	Amount		Additional Paid-In Capital		Accumulated Deficit		Total
Balance at December 31, 2021		2,071,000	$	—	8,000	$	(181)	$	227,584	$	(201,906)	$	25,497
Net loss		—	—		—	—		—		(4,539)		(4,539)
Stock-based compensation		—	—		—	—		52		—		52
Forfeiture of unvested stock options		—	—		—	—		(84)		—		(84)
Balance at March 31, 2022		2,071,000	$	—	8,000	$	(181)	$	227,552	$	(206,445)	$	20,926

See accompanying notes to condensed consolidated financial statements.

-4-

OBLONG, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(13,572)	$	(5,679)	Net loss	$	(1,219)	$	(4,539)
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:					Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	Depreciation and amortization	1,226		1,429		Depreciation and amortization	86		627
Bad debt expense		125		449
Bad debt (recovery) expense						Bad debt (recovery) expense	(24)		111
Non-cash lease expense from right-of-use asset						Non-cash lease expense from right-of-use asset	43		127
Stock-based compensation	Stock-based compensation	83		33		Stock-based compensation	31		52
Stock-based expense for services		—		390

Forfeiture of unvested stock options	Forfeiture of unvested stock options	(84)		—		Forfeiture of unvested stock options	—		(84)
Gain on extinguishment of liability		—		(227)
Casualty loss on inventory		533		—
Loss on foreign currency remeasurement		—		3
Impairment charges - property and equipment		—		48
Impairment charges - right of use asset		179		—

Impairment charges - goodwill	Impairment charges - goodwill	7,367		—		Impairment charges - goodwill	—		1,138
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	233		1,764		Accounts receivable	47		183
Inventory	Inventory	210		(1,205)		Inventory	89		103
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(69)		(702)		Prepaid expenses and other current assets	(298)		(360)
Right of use asset		235		250
Other assets	Other assets	87		7		Other assets	9		45
Accounts payable	Accounts payable	66		205		Accounts payable	23		294
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	17		408		Accrued expenses and other current liabilities	591		188
Deferred revenue	Deferred revenue	(265)		(429)		Deferred revenue	(125)		(126)
Lease liabilities	Lease liabilities	(282)		(414)		Lease liabilities	(97)		(163)
Net cash used in operating activities	Net cash used in operating activities	(3,911)		(3,670)		Net cash used in operating activities	(844)		(2,404)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property and equipment	Purchases of property and equipment	(11)		(17)		Purchases of property and equipment	—		(11)
Proceeds from sale of equipment	Proceeds from sale of equipment	29		—		Proceeds from sale of equipment	—		1
Net cash provided by (used in) investing activities		18		(17)
Net cash used in investing activities						Net cash used in investing activities	—		(10)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from stock issuance, net of issuance costs		—		11,504
Proceeds from private placement, net of issuance costs and amounts in escrow						Proceeds from private placement, net of issuance costs and amounts in escrow	1,473		—

Net cash provided by financing activities	Net cash provided by financing activities	—		11,504		Net cash provided by financing activities	1,473		—
(Decrease) increase in cash and restricted cash		(3,893)		7,817
Increase (decrease) in cash and restricted cash						Increase (decrease) in cash and restricted cash	629		(2,414)
Cash and restricted cash at beginning of period	Cash and restricted cash at beginning of period	9,000		5,277		Cash and restricted cash at beginning of period	3,085		9,000
Cash and restricted cash at end of period	Cash and restricted cash at end of period	$	5,107	$	13,094	Cash and restricted cash at end of period	$	3,714	$	6,586

Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:

Reconciliation of cash and restricted cash	Reconciliation of cash and restricted cash					Reconciliation of cash and restricted cash
Cash	Cash	$	5,107	$	13,033	Cash	$	3,714	$	6,525
Restricted cash	Restricted cash	—		61		Restricted cash	—		61
Total cash and restricted cash	Total cash and restricted cash	$	5,107	$	13,094	Total cash and restricted cash	$	3,714	$	6,586

Cash paid during the period for interest	Cash paid during the period for interest	$	6	$	2	Cash paid during the period for interest	$	2	$	—
Cash paid for income taxes						Cash paid for income taxes	$	31	$	—
Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:
Accrued preferred stock dividends		$	—	$	1
Inducement to convert Series A-2 Preferred Stock to common		$	—	$	300
Common stock issued for conversion of Preferred Stock		$	—	$	3

Warrant modification						Warrant modification	$	25	$	—

See accompanying notes to condensed consolidated financial statements.

-5-

OBLONG, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~June 30, 2022~~March 31, 2023

(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. ~~Prior to March 6, 2020, Oblong, Inc. was named Glowpoint, Inc. (“Glowpoint”). On March 6, 2020, Glowpoint changed its name to Oblong, Inc.~~

Basis of Presentation

The Company's fiscal year ends on December 31 of each calendar year. The accompanying interim ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements are unaudited and have been prepared on substantially the same basis as our annual ~~consolidated financial statements~~Consolidated Financial Statements for the fiscal year ended December 31, ~~2021.~~2022. In the opinion of the Company's management, these interim ~~condensed consolidated financial statements~~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~~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, ~~2021~~2022 year-end ~~condensed consolidated balance sheet~~Condensed Consolidated Balance Sheet data in this document was derived from audited consolidated financial statements. ~~These condensed consolidated financial statements~~The Condensed Consolidated Financial Statements and notes included in this quarterly report on Form 10-Q ~~does~~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, ~~2021~~2022 and notes thereto included in the Company's fiscal ~~2021~~2022 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March ~~29, 2022~~21, 2023 (the ~~“2021~~“2022 10-K”).

The results of operations and cash flows for the interim periods included in these ~~condensed consolidated financial statements~~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~~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, ~~and (iii) Oblong Europe Limited, a subsidiary of 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.

Segments

The Company currently operates in 2two segments: (1) “Collaboration Products” which represents the ~~Oblong Industries~~ business surrounding our Mezzanine™ product offerings, and (2) “Managed Services” which represents the ~~Oblong (formerly Glowpoint)~~ business surrounding managed services for video collaboration and network solutions. See Note 10 - Segment Reporting for further discussion.

Use of Estimates

Preparation of the ~~consolidated financial statements~~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

~~-6-~~

adjustments, if any, to the estimates used are made prospectively based upon such periodic evaluation. The significant areas of estimation include determining the allowance for doubtful accounts, the estimated lives and recoverability

-6-

of ~~property and equipment and~~ intangible assets, the inputs used in the valuation of ~~goodwill and~~ intangible assets in connection with our impairment ~~tests,~~test, and the inputs used in the fair value of ~~equity based~~equity-based awards.

Significant Accounting Policies

The significant accounting policies used in preparation of these ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements are disclosed in our ~~2021~~2022 10-K, and there have been no changes to the Company’s significant accounting policies during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023.

Recently Issued Accounting Pronouncements

In June 2016 the ~~Financial Accounting Standards Board (“FASB”)~~FASB issued ASU 2016-13, ~~as amended,~~ ~~“Financial~~“Financial Instruments - Credit Losses (Topic 326),” which was subsequently amended in February 2020 by ASU 2020-02, “Financial Instruments - Credit Losses (Topic 326) and Leases (Topic 842).” ~~Topic 326 introduces~~The amendments introduce an impairment model that is based on expected credit losses, rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g. ~~accounts receivable,~~, loans and held-to-maturity securities), including certain off-balance sheet financial instruments (e.g., loan commitments). The expected credit losses should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. Financial instruments with similar risk characteristics may be grouped together when estimating expected credit losses. ~~Topic 326 is~~The update was effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company ~~has evaluated the impact~~adopted the new guidance, ~~will have on its consolidated financial statements, and does not expect the impact to be material.~~

~~In May 2021, the FASB issued ASU 2021-04,~~ ~~Issuer’s Accounting for Certain Modifications or Exchanges~~as of ~~Freestanding Equity-Classified Written Call Options.~~ The FASB is issuing this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity classified written call options (for example, warrants) that remain equity classified after modification or exchange. ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring after the effective date of the amendments. The Company has adopted this standard, effective January 1, ~~2022,~~2023, and it did not have a material ~~affect on our financial statements.~~

~~Casualty Loss~~

During the three months ended June 30, 2022, the Company discovered that $533,000 of inventory was stolen from the Company’s warehouse in City of Industry, California. This theft has been recorded as a casualty loss of $533,000 during the three and six months ended June 30, 2022impact on the Company’s condensed consolidated Statements of Operations. The theft is being investigated further by the Los Angeles, CA Sheriff’s Department and a claim has been filed with the Company’s insurance company. We are seeking to recover the majority of the loss through our insurance policies and we will offset the casualty loss with the recognition of a gain of any proceeds should we subsequently receive them from our insurance company. No assurances can be provided that we will be successful in recovering any or all of the casualty loss.Condensed Consolidated Financial Statements.

Note 2 - Liquidity and Going Concern Uncertainty

As of ~~June 30, 2022,~~March 31, 2023, we had ~~$5,107,000~~$3,714,000 in cash and working capital of ~~$5,461,000.~~$3,335,000. For the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, we incurred a net loss of ~~$13,572,000~~$1,219,000 and used ~~$3,911,000~~$844,000 of net cash in operating activities.

Equity Private Placement

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 transaction (the “Private Placement”), (i) 6,550 shares (the “Preferred Shares”) of our newly designated Series F convertible preferred stock, $0.0001 par value per share (the “Series F Preferred Stock”), initially convertible into up to 3,830,409 shares of our Common Stock, (ii) preferred warrants (“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 3,830,413 shares of Common Stock. The terms of the Series F Preferred Stock are as set forward 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. Please see the discussion in Note 6 - Capital Stock for further details on the Common Warrants and Note 7 - Preferred Stock for further discussion on the Series F Preferred Stock and Preferred Warrants.

The aggregate gross proceeds of the Private Placement are expected to be $6,386,000. All of the Preferred Shares and Investor Warrants were issued at the Closing, but part of the purchase price equivalent to $4,000,000 was placed into an escrow account with American Stock Transfer & Trust Company (the “Escrow”), to be released upon our obtaining stockholder approval permitting the issuance of more than 19.99% of our outstanding shares of Common Stock at less than the Minimum Price (as defined under the Nasdaq Rules) in accordance with Nasdaq listing standards and as otherwise may be required (the “Stockholder Approval”). The Company expects to use the net proceeds from the Private Placement and the proceeds, if any, from the exercise of the Investor Warrants for general corporate purposes and potential strategic alternatives. We have not, nor has anyone on our behalf, initiated any substantive discussions directly or indirectly with any strategic alternatives partner.

In connection to 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 306,433 shares of Common Stock at an initial exercise price of $1.71 per share. Additionally, we agreed to reimburse the Placement Agent for certain expenses incurred in connection with the Private Placement and to pay certain contingent fees upon the occurrence of specified future events. Please see the discussion in Note 6 - Capital Stock for further details on the Placement Agent Warrants.

-7-

Future Capital Requirements and Going Concern

Our capital requirements in the future will continue to depend on numerous factors, including the ~~timing and~~potential release of the Escrow, the amount of revenue ~~for~~ the Company is able to generate, customer renewal rates and the timing of collection of outstanding accounts receivable, in each case particularly as it relates to the Company’s major customers, the expense to deliver services, expense for sales and marketing, and expense for research and ~~development, and capital expenditures. We expect to continue to invest in product development and sales and marketing expenses with the goal of growing the Company’s revenue in the future.~~development. The Company believes that, in the event the Escrow is not released, based on its current projection of revenue, expenses, ~~capital expenditures,~~ and cash flows, it will not have sufficient resources to fund its operations for the next twelve months following the filing of this Report. We believe additional capital will be required to fund operations and provide growth capital including 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

~~-7-~~

could have a material adverse effect on the Company. The factors discussed above raise substantial doubt as to our ability to continue as a going concern. The accompanying ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements do not include any adjustments that might result from these uncertainties.

Note 3 - Intangible Assets and Goodwill

As of June 30, 2022 and December 31, 2021, goodwill was zero and $7,367,000, respectively, recorded in connection with the October 1, 2019 acquisition of Oblong Industries (our Collaboration Products reporting unit).

We test goodwill for impairment on an annual basis on September 30 of each year, or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. To determine the fair value of the reporting unit for the goodwill impairment test, we use a weighted average of the discounted cash flow method and market-based method.

We considered the sustained decline in our stock price to be a triggering event for an interim goodwill impairment test, as of both March 31, 2022 and June 30, 2022, and we recorded impairment charges against the carrying value of Goodwill of $6,229,000 and $7,367,000 for the three and six months ended June 30, 2022, respectively, as the carrying amount of the Collaboration Products reporting unit exceeded its fair value on the test dates. These charges are recognized as “Impairment Charges” on our condensed consolidated Statements of Operations. Following these impairment charges, our goodwill value was reduced to zero as of June 30, 2022.

~~Note 4 - Intangible~~Intangioble Assets

The following table presents the components of net intangible assets for our Collaboration Products reporting segment (in thousands):


		As of June 30, 2022						As of December 31, 2021								As of March 31, 2023						As of December 31, 2022
		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Lives		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

Developed technology	Developed technology	$	10,060	$	(5,544)	$	4,516	$	10,060	$	(4,537)	$	5,523	5 years	Developed technology	$	486	$	(121)	$	365	$	486	$	(61)	$	425
Trade names	Trade names	2,410		(663)		1,747		2,410		(542)		1,868		10 years	Trade names	204		(51)		153		204		(25)		179
Distributor relationships		310		(171)		139		310		(139)		171		5 years

Total	Total	$	12,780	$	(6,378)	$	6,402	$	12,780	$	(5,218)	$	7,562		Total	$	690	$	(172)	$	518	$	690	$	(86)	$	604

At each reporting period, we determine if there was a triggering event that may result in an impairment of our intangible assets. During the three ~~and six~~ months ended ~~June 30, 2022,~~March 31, 2023, we considered the declines in revenue for the Collaboration Products reporting segment to be a triggering event for an impairment test of intangible assets for this ~~reporting unit.~~segment. Based on the ~~corresponding recoverability tests~~fair value of the ~~intangible assets for this reporting unit, we~~asset group, which was determined using a market approach, no impairment ~~changes~~charges were ~~required~~recorded for the three ~~and six~~ months ended June 30, 2022. The recoverability test consisted of comparing the estimated undiscounted cash flows expected to be generated by those assets to the respective carrying amounts, and involves significant judgements and assumptions, related primarily to the future revenue and profitability of the assets. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets, which range from five years to ten years in accordance with ASC Topic 350.March 31, 2023.

Related amortization expense was ~~$580,000, $1,160,000, $613,000,~~$86,000 and ~~$1,224,000~~$580,000 for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively.

~~-8-~~

Amortization expense for each of the next five succeeding years will be as follows (in thousands):

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


Remainder of 2023	$	260
2024	258



Total	$	518

Goodwill

During 2022, Goodwill was written down to zero with an impairment charge of $1,138,000 during the three months ended March 31, 2022, and a subsequent impairment charge of $6,229,000 during the three months ended June 30, 2022.

-8-

Note 54 - Accrued Expenses and Other Current Liabilities

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


		June 30,		December 31,			March 31,		December 31,
		2022		2021			2023		2022

Accrued compensation costs		$	677	$	551
Accrued professional fees		77		69
Accrued taxes and regulatory fees		84		92
Compensation costs						Compensation costs	$	779	$	707
Customer deposits	Customer deposits	115		145		Customer deposits	271		128
Professional fees						Professional fees	344		57
Taxes and regulatory fees						Taxes and regulatory fees	43		59
Other accrued expenses and liabilities	Other accrued expenses and liabilities	23		102		Other accrued expenses and liabilities	77		123

Rent expense						Rent expense	151		—

Accrued expenses and other liabilities	Accrued expenses and other liabilities	$	976	$	959	Accrued expenses and other liabilities	$	1,665	$	1,074

Note 65 - Leases

We lease 3three facilities in Los Angeles, California ~~and 1 facility in Austin, Texas, each~~ providing office ~~space. We also lease a~~space and one facility in City of Industry, California, providing warehouse space. These leases expire between ~~2022~~2023 and 2024. ~~During the six months ended June 30, 2022, we exited leases in Boston, Massachusetts and Dallas, Texas.~~ We currently occupy the warehouse space in City of ~~Industry, and~~Industry; however, we do not occupy any of the office ~~facility~~space in ~~Austin, Texas, and we~~Los Angeles. We have a sublease in place for one of the Los Angeles, California office spaces. With the exception of these spaces described above, we currently operate out of remote employment sites with a remote office located at 25587 Conifer Road, Suite 105-231, Conifer, Colorado 80433.

Lease expenses, ~~including~~net of common charges, for the three months ended March 31, 2023 and ~~net of sublet~~2022, were $46,000 and $139,000, respectively. Sublease proceeds for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, were $16,000 and ~~2021 were $76,000, $145,000, $92,000, and $167,000,~~$66,000, respectively.

The following provides balance sheet information related to leases as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 (in thousands):


			June 30, 2022		December 31, 2021				March 31, 2023		December 31, 2022
Assets	Assets						Assets
		Operating lease, right-of-use asset, net	$	245	$	659		Operating lease, right-of-use asset, net	$	99	$	142

Liabilities	Liabilities						Liabilities
		Current portion of operating lease liabilities	$	378	$	492		Current portion of operating lease liabilities	$	139	$	219
		Operating lease liabilities, net of current portion	68		236			Operating lease liabilities, net of current portion	—		17
		Total operating lease liabilities	$	446	$	728		Total operating lease liabilities	$	139	$	236

~~-9-~~

During the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ payments of ~~$125,000, $298,000, $218,000,~~$100,000 and ~~$451,000~~$173,000 were made on leases, respectively. The following table summarizes the future undiscounted cash payments reconciled to the lease liability (in thousands):


Remaining Lease Payments	Remaining Lease Payments			Remaining Lease Payments
2022		$	221
2023	2023	225		2023	$	125
2024	2024	17		2024	17
Total lease payments	Total lease payments	463		Total lease payments	142
Effect of discounting	Effect of discounting	(17)		Effect of discounting	(3)
Total lease liability	Total lease liability	$	446	Total lease liability	$	139

During the six months ended June 30, 2022, we did not enter into any new leases, we exited our Boston, MA and our Dallas, TX leases upon expiration, and we vacated two of the properties in Los Angeles. The properties we vacated are under leases until May 2023 and management does not expect to be able to sublet the properties given the limited time remaining on the leases. Therefore, due to not utilizing the asset, management believes that the right-of-use assets attached to these leases have lost their value. An impairment charge of $179,000 was recorded for these assets during the three months ended June 30, 2022. During the year ended December 31, 2021, we entered into 1 new operating lease, modified 1 operating lease, and terminated 2 operating leases. The following table provides a reconciliation of activity for our right-of-use (“ROU”) assets and lease liabilities (in thousands):

Right-of-Use Asset Operating Lease Liability
Balance at December 31, 2020 $ 903 $ 1,432
Additions 60 60
Terminations and Modifications 192 156
Amortization and Payments (496) (920)
Balance at December 31, 2021 $ 659 $ 728
Amortization and Payments (235) (282)
Impairment Charges (179) —
Balance at June 30, 2022 $ 245 $ 446

-9-


	Right-of-Use Asset		Operating Lease Liabilities
Balance at December 31, 2021	$	659	$	728
Additions	11		11

Non-cash lease expense and payments	(349)		(503)
Impairment charges	(179)		—
Balance at December 31, 2022	142		236
Additions	—		—
Terminations and modifications	$	—	$	—
Non-cash lease expense and payments	(43)		(97)
Impairment charges	—		—
Balance at March 31, 2023	$	99	$	139

The ROU assets and lease liabilities are recorded on the Company’s ~~condensed consolidated~~Condensed Consolidated Balance Sheets as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

Note 76 - Capital Stock

Common Stock

On January 3, 2023, the Company effected a 1-for-15 reverse stock split of its Common Stock. All Common Stock share information (including treasury share information) in our Condensed Consolidated Financial Statements and has been adjusted for this stock split retrospectively for all periods represented herein.

The Company’s common stock, par value $0.0001 per share (the “Common Stock”), is listed on ~~The~~the Nasdaq Capital Market (“Nasdaq”), under the ticker symbol “OBLG”. As of ~~June 30, 2022,~~March 31, 2023, we had 150,000,000 shares of our Common Stock authorized, with ~~30,929,331~~2,070,861 and ~~30,816,048~~2,063,308 shares issued and outstanding, respectively.

The Company did not issue any shares of Common Stock during the three months ended March 31, 2023.

On April 18, 2023, the Company issued 339,498 shares of Common Stock in relation to certain warrant exercises discussed below, and 177,564 shares of Common Stock related to vested RSUs discussed in Note 8 - Stock Based Compensation.

Common Stock Warrants

As described in Note 2, in connection with the Private Placement, on March 31, 2023, the Company issued the Common Warrants and Placement Agent Warrants to purchase an aggregate of 4,136,846 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 are initially exercisable for $1.71 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. The fair value of the warrants was recorded within additional paid-in capital during the three months ended ~~June 30, 2022.~~March 31, 2023.

-10-

Warrants

~~Warrants~~ outstanding as of ~~June 30, 2022~~March 31, 2023 are as follows:


Issue Date	Issue Date	Warrants Issued	Exercise Price		Expiration Date	Issue Date	Warrants Issued	Exercise Price		Expiration Date
October 21, 2020	October 21, 2020	521,500	$	4.08	October 22, 2022	October 21, 2020	34,767	$	61.20	April 22, 2023
December 6, 2020	December 6, 2020	625,000	5.49		December 7, 2022	December 6, 2020	41,667	82.35		June 7, 2023
June 30, 2021 - Series A(1)		1,000,000	4.00		January 4, 2023
June 30, 2021 - Series B		3,000,000	4.40		June 30, 2024
June 28, 2021						June 28, 2021	66,667	60.00		January 4, 2024 (a)
June 28, 2021						June 28, 2021	200,000	66.00		June 28, 2024
March 31, 2023						March 31, 2023	4,136,846	$	1.71	September 30, 2028
		5,146,500
(1) Series A Warrants shown as amended on December 31, 2021
							4,479,947

(a) On January 3, 2023, the Company and all the holders of the Series A Warrants agreed to amend the terms of the Series A Warrants to extend the termination date from January 4, 2023 to January 4, 2024. All other terms of the Series A Warrants will remain in full force and effect. The modification resulted in an incremental value adjustment, and deemed dividend, of $25,000, which was recorded within additional paid-in capital during the three months ended March 31, 2023.

On April 18, 2023, the Company entered into warrant exercise inducement offer letters with certain holders of outstanding warrants to purchase shares of the Company’s common stock originally issued on October 21, 2020, December 6, 2020, and June 28, 2021, as reflected in the table above (such holders the “Exercising Holders” and such warrants the “Existing Warrants”) pursuant to which the Exercising Holders agreed to exercise, for cash, Existing Warrants to purchase, in the aggregate, 339,498 shares of the Company’s common stock (the “Existing Warrant Shares”), in exchange for the Company’s agreement to lower the exercise price of the Existing Warrants to $1.71. The Company received net proceeds of $534,000 from the exercise of the Existing Warrants in April 2023 (net of $46,000 of financing costs). Following the exercise of the Existing Warrants, an aggregate of 3,603 Existing Warrants remained outstanding.

Warrant activity for the three months ended March 31, 2023 and the year ended December 31, ~~2021~~2022 is presented below. ~~There was no warrant activity for the three or six months ended June 30, 2022.~~


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

						Outstanding
						Number of Warrants	Weighted Average Exercise Price
Warrants outstanding and exercisable, December 31, 2021	Warrants outstanding and exercisable, December 31, 2021	5,146,500	4.42		Warrants outstanding and exercisable, December 31, 2021	343,101	$	66.34

Warrants outstanding and exercisable, June 30, 2022		5,146,500	$	4.42
Warrants outstanding and exercisable, December 31, 2022					Warrants outstanding and exercisable, December 31, 2022	343,101	66.34
Granted					Granted	4,136,846	1.71

Warrants outstanding and exercisable, March 31, 2023					Warrants outstanding and exercisable, March 31, 2023	4,479,947	$	6.66

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 ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 or the year ended December 31, ~~2021.~~2022.

Note 7 - Preferred Stock

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock. As of March 31, 2023, we had 1,983,250 designated shares of preferred stock and 6,550 shares of preferred stock issued and outstanding. As of December 31, 2022, we had no shares of preferred stock outstanding.

Series F Preferred Stock

As described in Note 2, on March 31, 2023, the Company closed a Private Placement and issued (i) 6,550 shares of our newly designated Series F Preferred Stock and (ii) Preferred Warrants to acquire 32,750 shares of Series F Preferred Stock.

As of March 31, 2023, the Company recorded net proceeds from the Private Placement of $1,473,000 to stockholders’ equity. The net proceeds included $6,386,000 in gross proceeds, less (i) $4,000,000 that is being held in escrow and (ii) $913,000 in financing costs.

-11-

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 $1.71 (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, provided that that such price may not be lower than the Minimum Price (as defined under the Nasdaq Rules) prior to obtaining Stockholder Approval for the issuance. 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).

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, provided that until receipt of Stockholder Approval, any adjustment to the Conversion Price shall not cause the Conversion Price for voting purposes to be less than the Minimum Price (as defined in Nasdaq Listing Rule 5635(d)).

Our ability to settle conversions is subject to certain limitations set forth in the Certificate of Designations, including a limit on the number of shares of Common Stock that may be issued until the time that the Stockholder Approval is obtained permitting the issuance of more than 19.99% of our outstanding shares of Common Stock in accordance with Nasdaq listing standards. We agreed to seek Stockholder Approval of these matters at a meeting to be held no later than May 31, 2023. 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. The Default Rate is also triggered in the event that we are unable, from the failure to obtain the Stockholder Approval prior to May 31, 2023 (the “Approval Date”), to issue shares of Common Stock in connection with a conversion of the Series F Preferred Stock after the Approval Date. 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.

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 during the three months ended March 31, 2023.

-12-

Note 8 - Stock Based Compensation

On January 3, 2023, the Company effected a 1-for-15 reverse stock split for its Common Stock. All Common Stock share information in the following net loss per share discussion and tables are shown as adjusted for this stock split retrospectively for all periods represented herein.

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 ~~June 30, 2022,~~March 31, 2023, the share pool available for new grants under the 2019 Plan is ~~2,663,500.~~177,567. On April 18, 2023, 177,564 restricted stock units were granted to certain members of the board, reducing the share pool available for new grants under the 2019 Plan to 3.

Stock Options

~~For~~During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, no stock options were granted ~~50,000 stock options vested, 7,500~~and 6,501 and 334 vested stock options expired, ~~and 150,000~~respectively. During the three months ended March 31, 2022, 10,000 unvested stock options were forfeited. ~~In accordance with the 2019 Plan, these cancelled unvested options were added back into the share pool. For the six months ended June 30, 2021, 300,000 stock options were granted.~~

A summary of stock options granted, expired, and forfeited under our plans, and options outstanding as of, and changes made during the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 and ~~the~~ year ended December 31, ~~2021~~2022 is presented below:

~~-11-~~


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

									Outstanding			Exercisable
									Number of Options	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
Options outstanding and exercisable, December 31, 2021	Options outstanding and exercisable, December 31, 2021	407,500	7.57		107,500	19.64		Options outstanding and exercisable, December 31, 2021	27,169	$	113.63	7,169	$	—

Vested	Vested	—	—		50,000	3.25		Vested	—	—		3,332	48.75
Expired	Expired	(7,500)	27.40		(7,500)	27.40		Expired	(501)	410.18		(501)	410.18
Forfeited	Forfeited	(150,000)	3.25		—	—		Forfeited	(10,000)	48.75		—	—
Options outstanding and exercisable, June 30, 2022		250,000	$	9.57	150,000	$	12.98
Options outstanding and exercisable, December 31, 2022								Options outstanding and exercisable, December 31, 2022	16,668	143.63		10,000	206.85

Expired								Expired	(6,501)	289.77		(6,501)	289.77

Options outstanding and exercisable, March 31, 2023								Options outstanding and exercisable, March 31, 2023	10,167	$	50.17	3,499	$	52.87

Additional information as of ~~June 30, 2022~~March 31, 2023 is as follows:

Outstanding Exercisable
Range of price Number
of Options Weighted
Average
Remaining
Contractual
Life (In Years) Weighted
Average
Exercise
Price Number
of Options Weighted
Average
Exercise
Price
$0.00 – $10.00 152,500 8.88 $ 3.34 52,500 $ 1.20
$10.01 – $20.00 97,500 0.56 19.32 97,500 19.32
250,000 5.63 $ 9.57 150,000 $ 12.98


	Outstanding				Exercisable
Range of price	Number of Options	Weighted Average Remaining Contractual Life (In Years)	Weighted Average Exercise Price		Number of Options	Weighted Average Exercise Price
$0.00 – $100.00	10,000	8.25	$	48.75	3,332	$	48.75
$100.01 – $200.00	167	0.25	135.00		167	135.00



	10,167	8.12	$	50.17	3,499	$	52.87

The intrinsic value of vested ~~options,~~and unvested options ~~and exercised options were~~was not significant for all periods presented. Stock compensation expense, related to stock options, for the three months ended March 31, 2023 was $31,000. Net stock compensation expense, related to stock options, ~~for the six months ended June 30, 2022~~ was a negative ~~$1,000~~$32,000, made up of ~~$83,000~~$52,000 in expense ~~and~~offset by $84,000 ~~in forfeiture credits. No stock compensation expense,~~ related to ~~stock options, was recorded~~forfeiture credits, for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. The remaining unrecognized stock-based compensation expense for options as of ~~June 30, 2022~~March 31, 2023 is ~~$247,000,~~$154,000, which will be recognized over a weighted average period of ~~2.00~~1.25 years.

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Restricted Stock Awards

As of ~~June 30, 2022 and 2021,~~March 31, 2023, there were ~~627~~42 unvested restricted stock awards outstanding, with a weighted average grant date price of ~~$15.80.~~$235.87. The awards were issued in 2014 and vest over the lesser of ten years, a change in control, or separation from the company. Due to the variability of the vesting, the expense was amortized over an average service period of five years, therefore, there is no unrecognized stock-based compensation expense for restricted stock awards as of ~~June 30, 2022.~~March 31, 2023.

Restricted Stock Units

As of ~~June 30, 2022 and 2021,~~March 31, 2023, there were no unvested restricted stock units (“RSUs”) outstanding. As of ~~June 30, 2022, 28,904~~March 31, 2023, 1,929 vested RSUs remain outstanding as shares of common stock have not yet been delivered for these units in accordance with the terms of the RSUs.

There was no stock compensation expense related to RSUs for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021.~~2022. There was no remaining unrecognized stock-based compensation expense for RSUs as of ~~June 30, 2022.~~March 31, 2023.

On April 18, 2023, 177,564 RSUs were granted to certain board members. These RSUs vested immediately upon issuance.

Note 9 - 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. Unvested restricted stock, although classified as issued and outstanding at ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ is considered contingently returnable until the restrictions lapse and will not be included in the basic net loss per share calculation until the shares are vested. Unvested restricted stock does not

~~-12-~~

contain non-forfeitable rights to dividends and dividend equivalents. Unvested RSUs are not included in calculations of basic net loss per share, as they are not considered issued and outstanding at time of grant.

Diluted net loss per share is computed by giving effect to all potential shares of common stock, including stock options, preferred stock, RSUs, and unvested restricted stock, to the extent they are dilutive. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ 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 per share data):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Numerator:	Numerator:									Numerator:
Net loss	Net loss	$	(9,033)	$	(2,246)	$	(13,572)	$	(5,679)	Net loss	$	(1,219)	$	(4,539)
Less: preferred stock dividends		—		—		—		(1)
Less: undeclared dividends		—		—		—		(366)
Less: loss on induced conversion of Series A-2 Preferred Stock		—		—		—		(300)

Less: warrant modification										Less: warrant modification	$	(25)	$	—
Net loss attributable to common stockholders	Net loss attributable to common stockholders	$	(9,033)	$	(2,246)	$	(13,572)	$	(6,346)	Net loss attributable to common stockholders	$	(1,244)	$	(4,539)
Denominator:	Denominator:									Denominator:
Weighted-average number of shares of common stock		30,816		26,644		30,816		22,250
Weighted-average number of shares of common stock for basic and diluted net loss per share										Weighted-average number of shares of common stock for basic and diluted net loss per share	2,065		2,065
Basic and diluted net loss per share	Basic and diluted net loss per share	$	(0.29)	$	(0.08)	$	(0.44)	$	(0.29)	Basic and diluted net loss per share	$	(0.60)	$	(2.20)

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):

Three and Six Months Ended June 30,
2022 2021
Unvested restricted stock awards 627 627
Outstanding stock options 250,000 407,500
Warrants 5,146,500 5,146,500

-14-


	Three Months Ended March 31,
	2023	2022
Unvested restricted stock awards	42	42

Outstanding stock options	10,167	16,835
Common stock issuable upon conversion of Series F Preferred Stock	3,830,409	—
Warrants	4,479,947	343,101

Note 10 - Segment Reporting

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

Certain information concerning the Company’s segments for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ is presented in the following tables (in thousands):

~~-13-~~

Three Months Ended June 30, 2022
Managed Services Collaboration Products Corporate Total
Revenue $ 810 $ 523 $ — $ 1,333
Cost of revenues 525 401 — 926
  Gross profit $ 285 $ 122 $ — $ 407
  Gross profit % 35 % 23 % 31 %
Allocated operating expenses $ 1 $ 8,254 $ — $ 8,255
Unallocated operating expenses — — 1,185 1,185
  Total operating expenses $ 1 $ 8,254 $ 1,185 $ 9,440
Income (loss) from operations $ 284 $ (8,132) $ (1,185) $ (9,033)
Interest and other expense, net — — — —
Net income (loss) before tax $ 284 $ (8,132) $ (1,185) $ (9,033)
Income tax expense (1) 1 — —
Net income (loss) $ 285 $ (8,133) $ (1,185) $ (9,033)


		Six Months Ended June 30, 2022												Three Months Ended March 31, 2023
		Managed Services			Collaboration Products			Corporate		Total				Managed Services			Collaboration Products			Corporate		Total
Revenue	Revenue	$	1,776		$	1,089		$	—	$	2,865		Revenue	$	690		$	348		$	—	$	1,038
Cost of revenues	Cost of revenues	1,170			789			—		1,959			Cost of revenues	460			302			—		762
Gross profit	Gross profit	$	606		$	300		$	—	$	906		Gross profit	$	230		$	46		$	—	$	276
Gross profit %	Gross profit %	34		%	28		%			32		%	Gross profit %	33		%	13		%			27		%

Allocated operating expenses	Allocated operating expenses	$	57		$	11,529		$	—	$	11,586		Allocated operating expenses	$	—		$	286		$	—	$	286
Unallocated operating expenses	Unallocated operating expenses	0			0			2,875		2,875			Unallocated operating expenses	—			—			1,193		1,193
Total operating expenses	Total operating expenses	$	57		$	11,529		$	2,875	$	14,461		Total operating expenses	$	—		$	286		$	1,193	$	1,479

Income (loss) from operations	Income (loss) from operations	$	549		$	(11,229)		$	(2,875)	$	(13,555)		Income (loss) from operations	$	230		$	(240)		$	(1,193)	$	(1,203)
Interest and other expense, net		6			—			—		6
Interest and other expense (income), net													Interest and other expense (income), net	3			(25)			—		(22)
Net income (loss) before tax	Net income (loss) before tax	$	543		$	(11,229)		$	(2,875)	$	(13,561)		Net income (loss) before tax	233			(215)			(1,193)		(1,181)
Income tax expense	Income tax expense	8			3			—		11			Income tax expense	7			31			—		38
Net income (loss)	Net income (loss)	$	535		$	(11,232)		$	(2,875)	$	(13,572)		Net income (loss)	$	226		$	(246)		$	(1,193)	$	(1,219)

~~-14-~~-15-


		Three Months Ended June 30, 2021												Three Months Ended March 31, 2022
		Managed Services			Collaboration Products			Corporate		Total				Managed Services			Collaboration Products			Corporate		Total
Revenue	Revenue	$	1,078		$	971		$	—	$	2,049		Revenue	$	966		$	566		$	—	$	1,532
Cost of revenues	Cost of revenues	739			510			—		1,249			Cost of revenues	645			388			—		1,033
Gross profit	Gross profit	$	339		$	461		$	—	$	800		Gross profit	$	321		$	178		$	—	$	499
Gross profit %	Gross profit %	31		%	47		%			39		%	Gross profit %	33		%	31		%			33		%

Allocated operating expenses	Allocated operating expenses	$	82		$	1,796		$	—	$	1,878		Allocated operating expenses	$	56		$	3,425		$	—	$	3,481
Unallocated operating expenses	Unallocated operating expenses	—			—			1,400		1,400			Unallocated operating expenses	—			—			1,540		1,540
Total operating expenses	Total operating expenses	$	82		$	1,796		$	1,400	$	3,278		Total operating expenses	$	56		$	3,425		$	1,540	$	5,021

Income (loss) from operations	Income (loss) from operations	$	257		$	(1,335)		$	(1,400)	$	(2,478)		Income (loss) from operations	$	265		$	(3,247)		$	(1,540)	$	(4,522)
Interest and other expense, net		9			(241)			—		(232)
Interest and other expense (income), net													Interest and other expense (income), net	6			—			—		6
Income (loss) before income taxes	Income (loss) before income taxes	$	248		$	(1,094)		$	(1,400)	$	(2,246)		Income (loss) before income taxes	271			(3,247)			(1,540)		(4,528)
Income tax expense	Income tax expense	—			—			—		—			Income tax expense	9			2			—		11
Net income (loss)	Net income (loss)	$	248		$	(1,094)		$	(1,400)	$	(2,246)		Net income (loss)	$	262		$	(3,249)		$	(1,540)	$	(4,539)

Six Months Ended June 30, 2021
Managed Services Collaboration Products Corporate Total
Revenue $ 2,273 $ 1,694 $ — $ 3,967
Cost of revenues 1,572 967 — 2,539
Gross profit $ 701 $ 727 $ — $ 1,428
Gross profit % 31 % 43 % 36 %
Allocated operating expenses $ 193 $ 3,626 $ — $ 3,819
Unallocated operating expenses — — 3,498 3,498
Total operating expenses $ 193 $ 3,626 $ 3,498 $ 7,317
Income (loss) from operations $ 508 $ (2,899) $ (3,498) $ (5,889)
Interest and other expense, net 14 (224) — (210)
Net income (loss) before tax $ 494 $ (2,675) $ (3,498) $ (5,679)
Income tax expense — — — —
Net income (loss) $ 494 $ (2,675) $ (3,498) $ (5,679)

Unallocated operating expenses in Corporate include costs for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ 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 ~~and six~~ months ended ~~June 30, 2022 and 2021,~~March 31, 2023, there was no material revenue attributable to any individual foreign country. For three months ended March 31, 2022, approximately 12% of revenue was attributable to the United Kingdom.

~~-15-~~

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


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Domestic	Domestic	$	705	$	1,227	$	1,546	$	2,242	Domestic	$	563	$	843
Foreign	Foreign	628		822		1,319		1,725		Foreign	475		689
		$	1,333	$	2,049	$	2,865	$	3,967		$	1,038	$	1,532

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

Three Months Ended June 30,
2022 % of Revenue 2021 % of Revenue
Revenue: Managed Services
Video collaboration services $ 79 6 % $ 230 11 %
Network services 723 54 % 830 41 %
Professional and other services 8 1 % 18 1 %
Total Managed Services revenue $ 810 61 % $ 1,078 53 %
Revenue: Collaboration Products
Visual collaboration product offerings $ 520 39 % $ 942 46 %
Licensing 3 — % 29 1 %
Total Collaboration Products revenue 523 39 % 971 47 %
Total revenue $ 1,333 100 % $ 2,049 100 %

Six Months Ended June 30,
2022 % of Revenue 2021 % of Revenue
Revenue: Managed Services
Video collaboration services $ 195 7 % $ 521 23 %
Network services 1,544 54 % 1,711 75 %
Professional and other services 37 1 % 41 2 %
Total Managed Services revenue $ 1,776 62 % $ 2,273 57 %
Revenue: Collaboration Products
Visual collaboration product offerings $ 1,082 38 % $ 1,635 80 %
Licensing 7 — % 59 3 %
Total Collaboration Products revenue 1,089 38 % 1,694 43 %
Total revenue $ 2,865 100 % $ 3,967 100 %
-16-


	Three Months Ended March 31,
	2023		% of Revenue		2022		% of Revenue
Revenue: Managed Services
Video collaboration services	$	64	6	%	$	116	7	%
Network services	618		60	%	821		54	%
Professional and other services	8		1	%	29		2	%
Total Managed Services revenue	$	690	67	%	$	966	63	%

Revenue: Collaboration Products
Visual collaboration product offerings	$	348	33	%	$	562	37	%

Licensing	—		—	%	4		—	%
Total Collaboration Products revenue	348		33	%	566		37	%
Total revenue	$	1,038	100	%	$	1,532	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.

~~-16-~~

Concentration of revenues was as follows:

Three Months Ended June 30,
2022 2021
Segment % of Revenue % of Revenue
Customer A Managed Services 48 % 32 %
Customer B Collaboration Products 11 % 5 %

Six Months Ended June 30,
2022 2021
Segment % of Revenue % of Revenue
Customer A Managed Services 46 % 34 %


		Three Months Ended March 31,
		2023		2022
	Segment	% of Revenue		% of Revenue
Customer A	Managed Services	52	%	44	%

Concentration of accounts receivable was as follows:


			As of June 30, 2022						As of March 31, 2023
			2022		2021				2023		2022
		Segment	% of Accounts Receivable		% of Accounts Receivable			Segment	% of Accounts Receivable		% of Accounts Receivable
Customer A	Customer A	Managed Services	42	%	22	%	Customer A	Managed Services	41	%	38	%
Customer B	Customer B	Managed Services	7	%	13	%	Customer B	Managed Services	11	%	—	%
Customer C	Customer C	Collaboration Products	10	%	—	%	Customer C	Collaboration Products	14	%	—	%

Customer D							Customer D	Collaboration Products	15	%	—	%
Customer E							Customer E	Collaboration Products	—	%	13	%
Customer F							Customer F	Collaboration Products	—	%	10	%

Note 11 - 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. ~~There has been continued widespread infection in~~In May 2023, the ~~United States and abroad, as~~WHO declared COVID-19 has had, and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures in response. Such measures have included restrictions on travel and business operations, temporary closures of businesses, hybrid operations of businesses and for workers, and quarantine and shelter-in-place orders. Some businesses have imposed vaccine mandates and many businesses are experiencing labor shortages. These factors have also impacted the supply chain, leading to significant delays and shortages. These measures, while intended to protect human life, have had serious adverse impacts on domestic and foreign economies. The severity and duration of such impacts are uncertain as new variants of the COVID-19 virus emerge and a resulting surge in diagnosed cases may be seen. The sweeping nature of the coronavirus pandemic makes it extremely difficult to predict how the Company’s business and operations will be affected in the longer run. The COVID-19 pandemic has materially affected our revenue and results of operations for 2020, 2021, and the six months ended June 30, 2022. The decreases in our revenue are primarily attributable to the effects of the global pandemic on our channel partners and customers as they evaluate how and when to re-open their commercial real estate footprints. The Company’s results reflect the challenges due to long and unpredictable sales cycles, delays in customer retrofit budgets, project starts, and supply delayed orders in our distribution channelsover as a ~~direct result of customer implementation schedules shifting due to the COVID-19 pandemic. The COVID-19 pandemic~~global health emergency. Customers generally use our Mezzanine™ products in ~~particular has,~~traditional office and ~~may continue to have, a significant economic and business impact on our Company. During 2020, 2021, and the first half of 2022, we have seen a continuing weakness in revenue~~operating center environments such as ~~our customers across all sectors delayed order placements in reaction to the ongoing impacts of the COVID-19 pandemic that caused our customers to suspend~~conference rooms or postpone real estate retrofit projects due to budget and occupancy uncertainties. We continue to monitor the impact of the COVID-19 pandemic on our customers, suppliers and logistics providers, and to evaluate governmental actions being taken to curtail and respond to the spread of the virus. The significance and duration of the ongoing impact on us is still uncertain. Material adverse effects of the COVID-19 pandemic on market drivers, our customers, suppliers or logistics providers could significantly impact our operating results. We will continue to actively follow, assess and analyze the ongoingother presentation

-17-

~~impact~~spaces. Revenue declines for our Collaboration Products business are primarily attributable to the aftermath of the COVID-19 pandemic on our existing and ~~adjust~~target customers as they continue to evaluate behavioral changes in how and when employees choose to work from traditional office environments, resulting in delayed buying decisions for our ~~organizational structure, strategies, plans and processes to respond. Because~~Collaboration Products. Continuation of the situation continues to evolve, we cannot reasonably estimate the ultimate impact to our business, results of operations, cash flows and financial position that the COVID-19 pandemic may have. Continuationongoing effects of the COVID-19 pandemic, ~~and government actions in response thereto~~ could cause further disruptions to our operations and the operations of our customers, suppliers and logistics partners and could significantly adversely affect our near-term and long-term revenues, earnings, liquidity 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.

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 ~~conventional commercial real estate spaces~~traditional office and operating center environments such as conference ~~rooms.~~rooms or other presentation spaces. As discussed below, sales of our Mezzanine product have been adversely affected by commercial response to the COVID-19 pandemic. ~~We expect to~~Like many technology companies in recent months, we will continue to ~~invest in product development~~monitor and ~~sales and marketing expenses~~manage our costs relative to demand with the goal of growing the Company’s revenue in the future. ~~These initiatives will require significant investment~~To the extent we believe new investments in ~~technology and~~ product development, ~~and~~marketing, or sales ~~and marketing. We~~are warranted as a result of changes in market demand, we believe additional capital will be required to fund ~~these investments~~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.

Oblong’s Results of Operations

Three Months Ended ~~June 30, 2022~~March 31, 2023 (the “~~2022 Second~~2023 First Quarter”) compared to the Three Months Ended ~~June 30, 2021~~March 31, 2022 (the ~~“2021 Second~~“2022 First Quarter”)

Segment Reporting

The Company currently operates in two segments: (1) “Collaboration Products,” which represents the ~~Oblong Industries~~ business surrounding our Mezzanine™ product offerings, and (2) “Managed Services,” which represents the ~~Oblong (formerly Glowpoint)~~ business surrounding managed services for video collaboration and network solutions. Certain information concerning the Company’s segments for the three months ended ~~June 30,~~March 31, 2023 and 2022 and is presented ~~in the following table~~below (in thousands):

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		Three Months Ended June 30, 2022												Three Months Ended March 31, 2023
		Managed Services			Collaboration Products			Corporate		Total				Managed Services			Collaboration Products			Corporate		Total
Revenue	Revenue	$	810		$	523		$	—	$	1,333		Revenue	$	690		$	348		$	—	$	1,038
Cost of revenues	Cost of revenues	525			401			—		926			Cost of revenues	460			302			—		762
Gross profit	Gross profit	$	285		$	122		$	—	$	407		Gross profit	$	230		$	46		$	—	$	276
Gross profit %	Gross profit %	35		%	23		%			31		%	Gross profit %	33		%	13		%			27		%

Allocated operating expenses	Allocated operating expenses	$	1		$	8,254		$	—	$	8,255		Allocated operating expenses	$	—		$	286		$	—	$	286
Unallocated operating expenses	Unallocated operating expenses	—			—			1,185		1,185			Unallocated operating expenses	—			—			1,193		1,193
Total operating expenses	Total operating expenses	$	1		$	8,254		$	1,185	$	9,440		Total operating expenses	$	—		$	286		$	1,193	$	1,479

Income (loss) from operations	Income (loss) from operations	$	284		$	(8,132)		$	(1,185)	$	(9,033)		Income (loss) from operations	$	230		$	(240)		$	(1,193)	$	(1,203)
Interest and other expense, net		—			—			—		—
Interest and other expense (income), net													Interest and other expense (income), net	3			(25)			—		(22)
Net income (loss) before tax	Net income (loss) before tax	$	284		$	(8,132)		$	(1,185)	$	(9,033)		Net income (loss) before tax	233			(215)			(1,193)		(1,181)
Income tax expense	Income tax expense	(1)			1			—		—			Income tax expense	7			31			—		38
Net income (loss)	Net income (loss)	$	285		$	(8,133)		$	(1,185)	$	(9,033)		Net income (loss)	$	226		$	(246)		$	(1,193)	$	(1,219)


	Three Months Ended March 31, 2022
	Managed Services			Collaboration Products			Corporate		Total
Revenue	$	966		$	566		$	—	$	1,532
Cost of revenues	645			388			—		1,033
Gross profit	$	321		$	178		$	—	$	499
Gross profit %	33		%	31		%			33		%

Allocated operating expenses	$	56		$	3,425		$	—	$	3,481
Unallocated operating expenses	—			—			1,540		1,540
Total operating expenses	$	56		$	3,425		$	1,540	$	5,021

Income (loss) from operations	$	265		$	(3,247)		$	(1,540)	$	(4,522)
Interest and other expense (income), net	6			—			—		6
Income (loss) before income taxes	271			(3,247)			(1,540)		(4,528)
Income tax expense	9			2			—		11
Net income (loss)	$	262		$	(3,249)		$	(1,540)	$	(4,539)

Unallocated operating expenses in Corporate include costs during the ~~2022~~2023 ~~Second~~First Quarter 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.

Revenue. Total revenue decreased ~~35%~~32% in the ~~2022 Second~~2023 First Quarter compared to the ~~2021 Second~~2022 First Quarter. The following table summarizes the changes in components of our revenue (in thousands), and the significant changes in revenue are discussed in more detail below.

Three Months Ended June 30,
2022 % of Revenue 2021 % of Revenue
Revenue: Managed Services
Video collaboration services $ 79 6 % $ 230 11 %
Network services 723 54 % 830 41 %
Professional and other services 8 1 % 18 1 %
Total Managed Services revenue $ 810 61 % $ 1,078 53 %
Revenue: Collaboration Products
Visual collaboration product offerings $ 520 39 % $ 1,635 46 %
Licensing 3 — % 59 1 %
Total Collaboration Products revenue $ 523 39 % $ 971 47 %
Total revenue $ 1,333 100 % $ 2,049 100 %

~~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.

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•~~We expect revenue declines in our Managed Services segment will continue in the future.~~


	Three Months Ended March 31,
	2023		% of Revenue		2022		% of Revenue
Revenue: Managed Services
Video collaboration services	$	64	6	%	$	116	7	%
Network services	618		60	%	821		54	%
Professional and other services	8		1	%	29		2	%
Total Managed Services revenue	$	690	67	%	$	966	63	%

Revenue: Collaboration Products
Visual collaboration product offerings	$	348	33	%	$	562	37	%
Licensing	—		—	%	4		—	%
Total Collaboration Products revenue	348		33	%	566		37	%
Total revenue	$	1,038	100	%	$	1,532	100	%

~~Collaboration Products~~

•The decrease in revenue for visual collaboration product offerings is primarily attributable to the effects of the COVID-19 pandemic on our existing and target customers as they evaluate how and when to re-open their conventional office and conference facility footprints, as Mezzanine™ ~~products are currently used in conventional spaces such as conference rooms~~. The Company’s results reflect the challenges due to long and unpredictable sales cycles, delays in customer retrofit budgets, project starts, and supply delayed orders in our distribution channels as a direct result of customer implementation schedules shifting due to the COVID-19 pandemic. The COVID-19 pandemic in particular has, and may continue to have, a significant economic and business impact on our Company. During 2020, 2021 and the first half of 2022, we saw a weakness in revenue as our prospective customers across all sectors delayed order placements in reaction to the ongoing impacts of the pandemic that caused our customers to suspend or postpone real estate retrofit projects due to budget and occupancy uncertainties. We continue to monitor the impact of the pandemic on our customers, suppliers and logistics providers, and evaluate governmental actions being taken to curtail and respond to the spread of the virus. The significance and duration of the ongoing impact on us is still uncertain. Material adverse effects of the COVID-19 pandemic on market drivers, our customers, suppliers or logistics providers may be expected to continue to significantly impact our operating results. We will continue to actively follow, assess and analyze the ongoing impact of the pandemic and adjust our organizational structure, strategies, plans and processes to respond. Because the situation continues to evolve, we cannot reasonably estimate the ultimate impact to our business, results of operations, cash flows and financial position that the pandemic may have. Continuation of thepandemic and government actions in response thereto could cause further disruptions to our operations and the operations of our customers, suppliers and logistics partners and may be expected to continue to significantly adversely affect our near-term and long-term revenues, earnings, liquidity and cash flows.

~~Cost of Revenue (exclusive of depreciation and amortization and casualty loss).~~ Cost of revenue, exclusive of depreciation and 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 June 30,
2022 2021
Cost of Revenue
Managed Services $ 525 $ 739
Collaboration Products 401 510
Total cost of revenue $ 926 $ 1,249

The decrease in cost of revenue is mainly attributable to lower costs associated with the decrease in revenue during the same period. The Company’s gross profit as a percentage of revenue was 31% in the 2022 Second Quarter compared to 39% in the 2021 Second Quarter.

~~-21-~~

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

Three Months Ended June 30,
2022 2021 $ Change % Change
Operating expenses:
Research and development $ 398 $ 599 $ (201) (34) %
Sales and marketing 317 572 (255) (45) %
General and administrative 1,185 1,383 (198) (14) %
Impairment charges 6,408 17 6,391 37594 %
Casualty loss 533 — 533 100 %
Depreciation and amortization 599 707 (108) (15) %
Total operating expenses $ 9,440 $ 3,278 $ 6,162 188 %

~~Research and Development~~. Research and development expenses include internal and external costs related to developing new product offerings as well as features and enhancements to our existing product offerings. The decrease in research and development expenses for the 2022 Second Quarter compared to the 2021 Second Quarter is primarily attributable to lower personnel costs due to reduced headcount, partially offset by a $66,000 increase in consulting and outsourced labor costs between these periods.

~~Sales and Marketing Expenses~~. The decrease in sales and marketing expenses for 2022 Second Quarter compared to the 2021 Second Quarter is mainly attributable to the lower personnel costs due to reduced headcount and lower marketing costs.

~~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 2022 Second Quarter compared to the 2021 Second Quarter is mainly attributable to a decrease in bad debt expense of $195,000.

~~Impairment Charges.~~ The impairment charges in the 2022 Second Quarter are mainly attributable to impairment charges on goodwill for our Collaboration Products reporting unit, and the impairment in the 2021 Second Quarter was attributable to impairment charges on property and equipment no longer in service. Future declines of our revenue, cash flows and/or stock price may give rise to a triggering event that may require the Company to record impairment charges in the future related to our intangible assets and other long-lived assets.

~~Casualty Loss.~~ During the second quarter of 2022, the Company discovered that $533,000 of inventory was stolen from the Company’s warehouse in City of Industry, California. This theft has been recorded as a casualty loss of $533,000 during the three and six months ended June 30, 2022 on the Company’s condensed consolidated Statements of Operations. The theft is being investigated further by the Los Angeles, CA Sheriff’s Department and a claim has been filed with the Company’s insurance company. We are seeking to recover the majority of the loss through our insurance policies and we will offset the casualty loss with the recognition of a gain of any proceeds should we subsequently receive them from our insurance company. No assurances can be provided that we will be successful in recovering any or all of the casualty loss.

~~Depreciation and Amortization~~. The decrease in depreciation and amortization expenses for the 2022 Second Quarter compared to the 2021 Second Quarter is mainly attributable to the disposition and impairment of certain assets during the second half of 2021 and the first half of 2022, as well as a decrease in depreciation as certain assets became fully depreciated.

~~Loss from Operations.~~ The increase in the Company’s loss from operations for the 2022 Second Quarter compared to the 2021 Second Quarter is mainly attributable to lower revenue and gross profit and higher operating expenses as addressed above.

~~-22-~~

~~Six Months Ended June 30, 2022 compared to the Six Months Ended June 30, 2021~~

~~Segment Reporting~~

~~Certain information concerning the Company’s two segments for the six months ended June 30, 2022 is presented in the following table (in thousands):~~

Six Months Ended June 30, 2022
Managed Services Collaboration Products Corporate Total
Revenue $ 1,776 $ 1,089 $ — $ 2,865
Cost of revenues 1,170 789 — 1,959
Gross profit $ 606 $ 300 $ — $ 906
Gross profit % 34 % 28 % 32 %
Allocated operating expenses $ 57 $ 11,529 $ — $ 11,586
Unallocated operating expenses 2,875 2,875
Total operating expenses $ 57 $ 11,529 $ 2,875 $ 14,461
Income (loss) from operations $ 549 $ (11,229) $ (2,875) $ (13,555)
Interest and other expense, net 6 — — 6
Net income (loss) before tax $ 543 $ (11,229) $ (2,875) $ (13,561)
Income tax expense 8 3 — 11
Net income (loss) $ 535 $ (11,232) $ (2,875) $ (13,572)

Unallocated operating expenses in Corporate include costs during the first half of 2022 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.

~~Revenue.~~ Total revenue decreased 28% in the first half of 2022 compared to the first half of 2021. 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.

Six Months Ended June 30,
2022 % of Revenue 2021 % of Revenue
Revenue: Managed Services
Video collaboration services $ 195 7 % $ 521 23 %
Network services 1,544 54 % 1,711 75 %
Professional and other services 37 1 % 41 2 %
Total Managed Services revenue $ 1,776 62 % $ 2,273 57 %
Revenue: Collaboration Products
Visual collaboration product offerings $ 1,082 38 % $ 1,635 80 %
Licensing $ 7 — % $ 59 3 %
Total Collaboration Products revenue $ 1,089 38 % $ 1,694 43 %
Total revenue $ 2,865 100 % $ 3,967 100 %

~~-23-~~

Managed Services

•We expect revenue declines in our Managed Services segment will continue in the future.

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 ~~visual collaboration product offerings~~our Collaboration Products business is primarily attributable to the ~~effects~~aftermath of the COVID-19 pandemic on our existing and target customers as they continue to evaluate behavioral changes in how and when employees choose to ~~re-open their conventional~~work from traditional office environments, resulting in delayed buying decisions for our Collaboration Products. Continuation of the ongoing effects of the COVID-19 pandemic, could cause further disruptions to our operations and ~~conference facility footprints, as Mezzanine™~~ ~~products are currently used in conventional spaces such as conference rooms, as discussed above in - Oblong’s Results~~the operations of ~~Operations - Three Months Ended June 30, 2022 (the “2022 Second Quarter”) compared to the Three Months Ended June 30, 2021 (the “2021 Second Quarter”).~~our customers, suppliers and logistics partners and could significantly adversely affect our near-term and long-term revenues, earnings, liquidity and cash flows.

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


		Six Months Ended June 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Cost of Revenue	Cost of Revenue					Cost of Revenue
Managed Services	Managed Services	$	1,170	$	1,572	Managed Services	$	460	$	645
Collaboration Products	Collaboration Products	789		967		Collaboration Products	302		388
Total cost of revenue	Total cost of revenue	$	1,959	$	2,539	Total cost of revenue	$	762	$	1,033

The decrease in our consolidated cost of revenue is mainly attributable to lower costs associated with the decrease in revenue during the same period. ~~The Company’s~~Our consolidated gross profit as a percentage of revenue was ~~32%~~27% in the 2023 First Quarter compared to 33% in the 2022 First Quarter. The gross profit as a percentage of revenue for our Collaboration Products segment was 13% in the ~~first half~~2023 First Quarter compared to 31% in the 2022 First Quarter. This decrease was mainly attributable to i) an increase in our inventory obsolescence reserve of $26,000 in the 2023 First Quarter as compared to the 2022 First Quarter, ii) a

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one-time assessment for common area charges on warehouse space of $12,000, and ~~36% for the first half~~iii) an increase in personnel costs as a percentage of ~~2021.~~revenue between these periods.

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


		Six Months Ended June 30, 2022									Three Months Ended March 31,
		2022		2021		$ Change		% Change			2023		2022		$ Change		% Change
Operating expenses:	Operating expenses:									Operating expenses:
Research and development	Research and development	$	1,402	$	1,291	$	111	9	%	Research and development	$	6	$	1,004	$	(998)	(99)	%
Sales and marketing	Sales and marketing	879		1,099		(220)		(20)	%	Sales and marketing	218		562		(344)		(61)	%
General and administrative	General and administrative	2,875		3,450		(575)		(17)	%	General and administrative	1,169		1,690		(521)		(31)	%
Impairment charges	Impairment charges	7,546		48		7,498		15621	%	Impairment charges	—		1,138		(1,138)		(100)	%
Casualty loss		533		—		533		100	%

Depreciation and amortization	Depreciation and amortization	1,226		1,429		(203)		(14)	%	Depreciation and amortization	86		627		(541)		(86)	%
Total operating expenses	Total operating expenses	$	14,461	$	7,317	$	(7,666)	130	%	Total operating expenses	$	1,479	$	5,021	$	(3,542)	(71)	%

Research and Development. Research and development expenses include internal and external costs related to developing new product offerings as well as features and enhancements to our existing product offerings. The ~~increase~~decrease in research and development expenses for the ~~first half of 2022~~2023 First Quarter compared to the ~~first half of 2021~~2022 First Quarter is primarily attributable to ~~a $300,000~~

~~-24-~~

~~increase~~the shut down of R&D expenses at the end of the 2022 First Quarter, in order to conserve cash, which resulted in lower personnel costs due to reduced headcount, consulting, and outsourced labor costs between these ~~periods, partially offset by lower personnel costs due to reduced headcount.~~periods.

Sales and Marketing Expenses. The decrease in sales and marketing expenses for ~~the first half of 2022~~2023 First Quarter compared to the ~~first half of 2021~~2022 First Quarter is ~~mainly~~primarily attributable to lower personnel costs due to reduced headcount, reduced marketing costs between these periods, and lower ~~marketing costs.~~sales as discussed above.

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 ~~first half of 2022~~2023 First Quarter compared to the ~~first half of 2021~~2022 First Quarter is ~~mainly attributable to decreases of $390,000 in stock-based expense for professional service fees and $324,000 in bad debt expense, partially offset by an increase in personnel expenses,~~ primarily attributable to ~~receiving an Employee Retention Credit (“ERC”) during the first half of 2021~~a decrease in office related expenses and ~~not during the first half of 2022.~~professional services.

Impairment Charges. There were no impairment charges in the 2023 First Quarter. The impairment charges in the ~~first half of~~ 2022 ~~are primarily~~First Quarter were attributable to impairment charges on goodwill for our Collaboration Products reporting unit and the impairment of the right-of-use assets associated with two of our Los Angeles, CA leases. The impairment charge in the first half of 2021 was attributable to impairment charges on property and equipment no longer in service.goodwill. Future declines of our revenue, cash flows and/or ~~stock price~~market capitalization may give rise to a triggering event that may require the Company to record impairment charges in the future related to our intangible assets and other long-lived assets.

~~Casualty Loss.~~ During the second quarter of 2022, the Company discovered that $533,000 of inventory was stolen from the Company’s warehouse. This theft has been recorded as a casualty loss of $533,000 during the three and six months ended June 30, 2022 on the Company’s condensed consolidated Statements of Operations. The theft is being investigated further by the Los Angeles, CA Sheriff’s Department and a claim has been filed with the Company’s insurance company. We are seeking to recover the majority of the loss through our insurance policies and we will offset the casualty loss with the recognition of a gain of any proceeds should we subsequently receive them from our insurance company. No assurances can be provided that we will be successful in recovering any or all of the casualty loss.

Depreciation and Amortization. The decrease in depreciation and amortization expenses for the ~~first half of 2022~~2023 First Quarter compared to the ~~first half of 2021~~2022 First Quarter is mainly attributable to the disposition and impairment of certain assets during the ~~second half of 2021 and the first half of~~year ended 2022, as well as a decrease in depreciation as certain assets became fully depreciated.

Loss from Operations. The ~~increase~~decrease in the Company’s loss from operations for the ~~first half of 2022~~2023 First Quarter compared to the ~~first half of 2021~~2022 First Quarter is mainly attributable to lower ~~revenue and gross profit and higher~~ operating expenses as addressed above.

Off-Balance Sheet Arrangements

As of ~~June 30, 2022,~~March 31, 2023, we had no off-balance sheet arrangements.

Inflation

Management does not believe inflation had a significant effect on the ~~condensed consolidated financial statements~~Condensed Consolidated Financial Statements for the periods presented.

Critical Accounting Policies

There have been no changes to our critical accounting policies during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. Critical accounting policies and the significant estimates made in accordance with such policies are regularly discussed with our Audit

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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~~Condensed Consolidated Financial Statements and the footnotes thereto, each included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021,~~2022, filed with the SEC on March ~~29, 2022~~21, 2023 (the ~~“2021~~“2022 Annual Report”).

Liquidity and Capital Resources

Equity Private Placement

~~-25-~~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 transaction (the “Private Placement”), (i) 6,550 shares (the “Preferred Shares”) of our newly designated Series F convertible preferred stock, $0.0001 par value per share (the “Series F Preferred Stock”), initially convertible into up to 3,830,409 shares of our Common Stock, (ii) preferred warrants (“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 3,830,413 shares of Common Stock. The terms of the Series F Preferred Stock are as set forward 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. Please see the discussion in Note 6 - Capital Stock for further details on the Common Warrants and Note 7 - Preferred Stock for further discussion on the Series F Preferred Stock and Preferred Warrants.

The aggregate gross proceeds of the Private Placement are expected to be $6,386,250. All of the Preferred Shares and warrants were issued at the Closing, but part of the purchase price equivalent to $4,000,000 was placed into an escrow account with American Stock Transfer & Trust Company (the “Escrow”), to be released upon our obtaining stockholder approval permitting the issuance of more than 19.99% of our outstanding shares of Common Stock at less than the Minimum Price (as defined under the Nasdaq Rules) in accordance with Nasdaq listing standards and as otherwise may be required (the “Stockholder Approval”). The Company expects to use the net proceeds from the Private Placement and the proceeds, if any, from the exercise of the Investor Warrants for general corporate purposes and potential strategic alternatives. We have not, no has anyone on our behalf, initiated any substantive discussions directly or indirectly with any strategic alternatives partner.

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 306,433 shares of Common Stock at an initial exercise price of $1.71 per share. Additionally, we agreed to reimburse the Placement Agent for certain expenses incurred in connection with the Private Placement and to pay certain contingent fees upon the occurrence of specified future events. Please see the discussion in Note 6 - Capital Stock for further details on the Placement Agent Warrants.

Future Capital Requirements and Going Concern

Our capital requirements in the future will continue to depend on numerous factors, including the ~~timing and~~potential release of the Escrow, the amount of revenue ~~for~~ the Company is able to generate, customer renewal rates and the timing of collection of outstanding accounts receivable, in each case particularly as it relates to the Company’s major customers, the expense to deliver services, expense for sales and marketing, and expense for research and ~~development, and capital expenditures. We expect to continue to invest in product development and sales and marketing expenses with the goal of growing the Company’s revenue in the future.~~development. The Company believes that, in the event the Escrow is not released, based on its current projection of revenue, expenses, ~~capital expenditures,~~ and cash flows, it will not have sufficient resources to fund its operations for the next twelve months following the filing of this Report. We believe additional capital will be required, in the short-term and the long-term, to fund operations and provide growth capital including 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. The factors discussed above raise substantial doubt as to our ability to continue as a going concern. The accompanying ~~consolidated financial statements~~Consolidated Financial Statements do not include any adjustments that might result from these uncertainties.

-23-

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 ~~June 30, 2022.~~March 31, 2023. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of ~~June 30, 2022,~~March 31, 2023, 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 ~~June 30, 2022~~March 31, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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 ~~2021~~2022 Annual Report. Except as set forth below, there have been no material changes to these risks during the ~~six~~three months ended ~~June 30, 2022.~~March 31, 2023. The risks described in the ~~2021~~2022 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.

The terms of the Series F Preferred Stock could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best interests. The Certificate of Designations for the Series F Preferred Stock contains a number of affirmative and negative covenants regarding matters such as the payment of dividends, maintenance of our properties and assets, transactions with affiliates, and our ability to issue other indebtedness. No assurances can be given that we will be able to comply with the financial or other covenants contained in the Certificate of Designations. If we are unable to comply with certain terms in the Certificate of Designations:

• dividends will accrue on the Series B Preferred Stock at 20% per annum;

• the holders of the Series B Preferred Stock could foreclose against our assets; and/or

• we could be forced into bankruptcy or liquidation.

Our ability to comply with these covenants may be adversely affected by events beyond our control, and we cannot assure you that we can maintain compliance with these covenants. The financial covenants could limit our ability to make needed expenditures or otherwise conduct necessary or desirable business activities.

The issuance of the securities in the Private Placement significantly diluted the ownership interest of the existing holders of our common stock, and the market price of our common stock will likely decline significantly as a result of sales of such securities into the public market by the Investors and subsequent investors or the perception that such sales may

~~-26-~~-24-

~~We may incur non-cash impairment charges for our right-of-use~~occur. Our existing holders of common stock have been significantly diluted by the issuance of the securities in the Private Placement. Our public float was significantly increased and ~~intangible assets which would negatively impact our operating results. The failure to use~~ the ~~full value~~market price of our ~~right-of-use assets, such~~common stock could decline significantly as ~~that which occurred~~a result of subsequent sales of the shares of common stock issued in the ~~second quarter~~Private Placement, or the perception that such sales may occur.

In addition, the exercise price or conversion price of ~~2022, could result~~these securities may be at prices below the current and/or then trading prices of shares of our common stock or at prices below the price at which our existing shareholders purchased our common stock. The Investors may potentially make a significant profit with the resale of the securities depending on the trading price of our securities at the time of a sale and the purchase price of such securities by them. While the Investors may experience a positive rate of return based on the trading price of our securities, the existing holders of our common stock may not experience a similar rate of return on the shares of common stock they purchased due to differences in ~~significant impairment charges which could have~~the applicable purchase price and trading price.

If our stockholders do not approve the issuance by us in the Private Placement of more than 19.99% of our outstanding shares of Common Stock at less than the Minimum Price (as defined under the Nasdaq listing rules), our ability to finance our operations, execute our business plan and fund our capital needs will be materially and adversely affected. All of the Preferred Shares and Investor Warrants were issued at the closing of the Private Placement, but part of the purchase price equivalent to $4 million has been placed in an ~~adverse effect on~~escrow account until the Stockholder Approval is obtained. Effectively, stockholder approval is one of the conditions for us to receive (i) $4 million in escrow and (ii) approximately $31.9 million upon the exercise of the Preferred Warrants, if exercised for cash. If the Stockholder Approval is not obtained, we will not be able to access such funds and our ~~results of operations.~~ability to execute our business plan will be jeopardized and we will be materially and adversely affected.

The ~~Company assesses the impairment~~failure of ~~purchased intangible assets subject~~our stockholders to ~~amortization when events and circumstances indicate~~approve this proposal will mean that the ~~carrying value~~conversion of the ~~assets might not~~Preferred Shares and the exercise of the Common Warrants will be ~~recoverable. The determination of related estimated useful lives and whether or not these assets are impaired involves significant judgments, related primarily~~limited to the ~~future profitability and/~~extent that such conversion or ~~future value~~exercise, together with any other securities convertible or exchangeable for shares, would result in the issuance, in the aggregate, of no more than 19.99% of the assets. Changes in the Company’s strategic plan and/or other-than-temporary changes in market conditions could significantly impact these judgments and could require adjustments to recorded asset balances.shares of our Common Stock outstanding. As a result, ~~of declines in revenue for the Collaboration Products reporting segment,~~ we ~~concluded that a triggering event had occurred and conducted impairment testing of our intangible assets during the six months ended June 30, 2022. Based on the corresponding recoverability tests~~may be unable to issue sufficient shares upon conversion of the ~~intangible assets for~~Preferred Shares or exercise of the ~~Collaboration Products reporting unit,~~Warrants which will, in lieu of those shares, require that we ~~determined that no impairment changes were required for the six months ended June 30, 2022. The recoverability test consisted of comparing the estimated undiscounted~~pay buy-in cash ~~flows expected to be generated by those assets~~amounts to the ~~respective carrying amounts.~~Investors. We do not anticipate having sufficient funds to make any substantial cash payments to the holders of the Preferred Shares.

~~The fair~~Our ability to successfully implement our business plan and ultimately generate value ~~determinations underlying~~for our stockholders is dependent upon our ability to raise capital and satisfy our ongoing business needs. If we are required to satisfy our buy-in payment obligations in cash rather than Common Stock, we may not have the ~~quantitative aspect~~capital necessary to fully satisfy our ongoing business needs, the effect of which would adversely impact future operating results, and result in a delay in our impairment testing require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of our intangible assets requires us to make assumptions and estimates regarding our future plans, as well as industry, economic and regulatory conditions. If current expectations are not met, or if market factors outside of our control change significantly, then our intangible assets might become impaired in the future, adversely affecting our operating results. The carrying amounts of our intangible assets are susceptible to impairment risk if there are unfavorable changes in such assumptions, estimates, and market factors. To the extent that we experience future declines in revenue, business ~~conditions deteriorate, or key assumptions and estimates differ significantly from our management’s expectations,~~plans. Additionally, it may be necessary for the Company to ~~recognize an impairment charge~~obtain additional financing in order to pay the ~~future.~~obligations in cash, which may result in additional transaction expenses.

~~Cyber-attacks, data breaches~~Further, pursuant to the terms of the Purchase Agreement, if our stockholders do not approve this proposal, we will be required to seek stockholder approval of this proposal again on or ~~malware~~ ~~or a breach~~before July 31, 2023, and thereafter semi-annually until we receive stockholder approval of this proposal. As such, our ~~physical security systems~~ ~~may disrupt our business operations, result in~~failure to obtain stockholder approval of this proposal at the loss of critical and confidential information, harm our operating results and financial condition, and damage our reputation; and cyber-attacks or data breaches on our customers’ networks, or in cloud-based services provided by or enabled by us, could result in claims of liability against us, damage our reputation or otherwise harm our business. In the ordinary course of providing video communications services, we transmit sensitive and proprietary information of our customers. We are dependent on the proper function, availability and security of our information systems, including without limitation those systems utilized in our operations. We have undertaken measures to protect the safety and security ~~of our inventory~~ and of our information systems and the data maintained within those systems, and on an annual basis, we test the adequacy of our security measures. Despite our implementation of security measures, there can be no assurance our safety and security measuresMay 18, 2023 Special Meeting will ~~detect and prevent security breaches in a timely manner or otherwise prevent damage or interruption of our systems and operations~~ ~~or inventory theft~~. The products and services we sell to customers, and our servers, data centers and the cloud-based solutions on which our data, and data of our customers, suppliers and business partners are stored, are vulnerable to improper functioning, cyber-attacks, data breaches, malware, and similar disruptions from unauthorized access or tampering by malicious actors or inadvertent error. Any such event could compromise our products, services and networks or those of our customers, and the proprietary information stored on our systems or those of our customers could be improperly accessed, processed, disclosed, lost or stolen, which could subjectrequire us to liability to our customers, suppliers, business partners and others, give rise to legal/regulatory action, and could have a material adverse effect on our business, operating results and financial condition and may cause damage to our reputation. ~~A security breach at any~~incur the costs of holding one ~~of our physical facilities,~~or more additional stockholder meetings until we receive such as that occurred in the second quarter of 2022, could result in a significant loss of inventory, or increase expenses relating to the resolution and future prevention of similar thefts, any of which could have an adverse effect on our business, financial condition and results of operations. Efforts to limit the ability of malicious actors to disrupt the operations of the Internet or undermine our own security efforts may be costly to implement and meet with resistance and may not be successful. Breaches of security in our customers’ networks, or in cloud-based services provided by or enabled by us, regardless of whether the breach is attributable to a vulnerability in our products or services, could result in claims of liability against us, damage our reputation, or otherwise harm our business.

approval.

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.

~~-27-~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

-25-

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

~~-28-~~-26-

ITEM 6. EXHIBITS


Exhibit Number						Description
3.1*						Amended and Restated Certificate of Incorporation, as amended.
4.1						Form of Amendment to Series A Warrants (filed as Exhibit 4.1 to the Registrants Current Report on Form 8-K, filed with the SEC on January 3, 2023, and incorporated herein by reference).
4.2						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).
4.3						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).
4.4						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).
4.5						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).
4.6						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).
4.7						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).
4.8						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).
4.9						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).
4.10						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).
4.11						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).
4.12						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						Securities Purchase Agreement, dated March 31, 2023 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2023, and incorporated herein by reference).
10.2						Registration Rights Agreement, dated March 31, 2023 (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2023, and incorporated herein by reference).
10.3						Engagement Letter, dated March 30, 2023 (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 3, 2023, and incorporated herein by reference).
10.4						Form of Warrant Repricing Letter, dated April 18, 2023 (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 24, 2023, 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						XBRL Instance Document
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
101.LAB						XBRL Taxonomy Extension Label Linkbase
101.PRE						XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

** Furnished herewith.

~~-29-~~-27-

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.

~~August~~May 10, ~~2022~~2023	By:	/s/ Peter Holst
		Peter Holst
		Chief Executive Officer
		(Principal Executive Officer)


~~August~~May 10, ~~2022~~2023	By:	/s/ David Clark
		David Clark
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

~~-30-~~-28-


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

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







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



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


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

Balance at December 31, 2021	$	659	$	728


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


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

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


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

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

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