TaoWeave, Inc. Segments Disclosure

Note 9 - Segment Reporting

 

The Company currently operates in three segments: (1) "Digital Assets," which represents the business surrounding our treasury activity with Bittensor, (2) “Managed Services,” which represents the business surrounding managed services for video collaboration and network solutions, and (3) “Collaboration Products,” which represents the business surrounding our Mezzanine™ product offerings. 

 

For each of the years ended December 31, 2025, and 2024, the CODM for three and two segments, respectively, was Pete Holst, the Company's President and Chief Executive Officer. Management reviewed the information provided to the CODM and updated the presentation of that information, including Significant Segment Expenses ("SSEs"). 

 

Certain information concerning the Company’s segments for the years ended December 31, 2025, and 2024 is presented in the following tables (in thousands):

 

		For the Years Ended December 31,
		2025				2024				% Change
Revenue
Digital Assets		$	186			$	—				100	%
Managed Services			1,957				2,062				(5	)%
Collaboration Products			294				316				(7	)%
Consolidated		$	2,437			$	2,378				2	%
Cost of revenues
Digital Assets		$	24			$	—				100	%
Managed Services			1,384				1,337				4	%
Collaboration Products			15				710				(98	)%
Consolidated		$	1,423			$	2,047				(30	)%
Gross Margin
Digital Assets		$	162			$	—				100	%
Managed Services			573				725				(21	)%
Collaboration Products			279				(394	)			(171	)%
Consolidated		$	1,014			$	331				206	%
Operating expenses
Digital Assets (1)		$	209			$	—				100	%
Managed Services (2)			—				—				0	%
Collaboration Products (3)			11				341				(97	)%
Corporate (4)			3,756				4,192				(10	)%
Consolidated		$	3,976			$	4,533				(12	)%
Other income (expense), net
Digital Assets (5)		$	(3,519	)		$	—				(100	)%
Managed Services (6)			—				(1	)			(100	)%
Collaboration Products (6)			—				16				100	%
Corporate (7)			128				154				(17	)%
Consolidated		$	(3,391	)		$	169				(2107	)%
Net loss before taxes		$	(6,353	)		$	(4,033	)			58	%
Income tax expense		$	2			$	10				(80	)%
Net loss		$	(6,355	)		$	(4,043	)			57	%
		As of December 31,
Total assets		2025				2024				% Change
Digital Assets (8)		$	5,562			$	—				100	%
Managed Services (9)			401				422				(5	)%
Collaboration Products (10)			258				285				(9	)%
Corporate (11)			1,998				4,568				(56	)%
Consolidated		$	8,219			$	5,275				56	%

 

 

(1)	Operating expenses related to our Digital Assets segment include cash and stock-based advisory fees.
(2)	There were no operating expenses related to our Managed Service segment in 2025 and 2024.
(3)	Operating expenses related to our Collaboration Products segment include non-capitalized software costs and commission expenses. In 2025 and 2024, $18,000 in bad debt recovery and $2,000 in bad debt expense were recorded, respectively.
(4)	Corporate operating expenses include costs that are not specific to a particular segment but are general to the group. These include expenses for administrative, information technology, and accounting staff; general liability and other insurance; professional fees; and similar corporate expenses.
(5)	Other expense for our Digital Assets segment includes unrealized losses from revaluations of our digital assets.
(6)	Other income (expense) for Managed Services and Collaboration Products segments include interest expense and non-operating income.
(7)	Unallocated other income in Corporate is primarily related to interest income.
(8)	Digital Asset assets include the fair value of the Company's digital asset holdings as of the end of the period, and unamortized stock-based advisor expense.
(9)	Managed Services assets include cash equivalents, accounts receivable, and prepaid expenses.
(10)	Collaboration Products' assets include cash equivalents and prepaid expenses.
(11)	Unallocated assets in Corporate include cash and prepaid expenses that are corporate in nature and don't apply to a single segment.

 

The Company's SSEs for our Digital Assets segment include cash and non-cash transaction fees, cash and stock-based advisory expenses, and unrealized losses on revaluation. The Company’s SSEs for our Managed Services and Collaboration Products segments include direct labor costs and segment-based management expenses (collectively, “labor and labor-related”), circuit and network cost of revenue, other non-inventory cost of revenue, research and development costs, and bad debt (recovery) expense. These are specific costs regularly provided to the CODM and used to evaluate segment performance. Other segment items include expenses recorded within cost of revenue and operating expenses, which are not regularly provided to the CODM. The CODM evaluates segment profit each period against historical results, factoring in macroeconomic factors such as labor and supply costs, to assess segment performance.

 

		Year Ended December 31, 2025
		Digital Assets				Managed Services				Collaboration Products				Total
Revenue
Digital Assets		$	186			$	—			$	—			$	186
Network Services			—				1,898				—				1,898
Video Collaboration			—				44				294				338
Professional and other services			—				15				—				15
Total revenue			186				1,957				294				2,437
Significant Segment Expenses
Labor and labor-related (1)			—				261				19				280
Property and office expense			—				—				21				21
Cash digital asset transaction fees			16				—				—				16
Non-cash digital asset transaction fees			8				—				—				8
Stock-based expense			169				—				—				169
Circuit and network cost of revenue			—				1,123				—				1,123
Advisory fees			40				—				—				40
Unrealized loss on digital asset revaluation			3,519				—				—				3,519
Bad debt recovery			—				—				(18	)			(18	)
Other segment items (2)			—				—				4				4
Segment profit (loss)		$	(3,566	)		$	573			$	268			$	(2,725	)
Segment margin			(1917	)%			29	%			91	%
Unallocated expenses (income)
Corporate expenses (3)														$	3,756
Interest income															(128	)
Loss before income tax expense														$	(6,353	)

 

		Year Ended December 31, 2024
		Managed Services				Collaboration Products				Total
Revenue
Network services		$	1,990			$	—			$	1,990
Video collaboration			56				316				372
Professional and other services			16				—				16
Total revenue			2,062				316				2,378
Significant Segment Expenses
Labor and labor-related (1)			132				550				682
Severance			—				46				46
Circuit and network cost of revenue			1,202				—				1,202
Inventory and inventory-related			—				273				273
Other non-inventory cost of revenue			4				19				23
Research and development			—				145				145
Bad debt expense			—				2				2
Segment profit (loss)		$	724			$	(719	)		$	5
Segment margin			35	%			(228	)%
Unallocated expenses (income) (3)
Corporate expenses										$	4,067
Stock compensation											62
Severance											60
Interest income											(151	)
Loss before income tax expense										$	(4,033	)

 

(1)	Includes direct labor costs (including sales and marketing costs), employment taxes, employee benefits, workers' compensation, and office expenses. For the year ended December 31, 2024, this also includes $46,000 of severance costs.
(2)	Other segment items include other income and expenses, net; interest expense; certain professional services; and miscellaneous taxes and fees.
(3)	Represents general and administrative costs, less the amounts allocated to the segments for labor and benefits, general liability insurance, professional services, property taxes, and interest income. For the year ended December 31, 2024, this also includes severance costs of $59,000.

 

For the years ended December 31, 2025, and 2024, no material revenue was attributable to any individual foreign country. Approximately 1% of foreign revenue is billed in foreign currency, and foreign currency gains and losses are not material. Revenue by geographic area is allocated as follows (in thousands):

 

		Year Ended December 31,
		2025				2024
Domestic		$	1,142			$	913
Foreign			1,295				1,465
		$	2,437			$	2,378

 

The Company considers a significant customer to be one that comprises more than 10% of its consolidated revenues or accounts receivable. Losing or reducing sales or anticipated sales to our most significant customer or several of our smaller customers could have a material adverse effect on our business, financial condition, and results of operations.

 

Concentration of consolidated revenues was as follows:

 

			Year Ended December 31, 2025
			2025				2024
	Segment		% of Revenue				% of Revenue
Customer A	Managed Services			79.0	%			84.9	%

 

 

Concentration of consolidated accounts receivable was as follows:

 

			As of December 31,
			2025				2024
	Segment		% of Accounts Receivable				% of Accounts Receivable
Customer A	Managed Services			97.3	%			82.6	%