{"success":true,"data":{"pressRelease":{"id":"37905","rtpr_id":"nBw1qqShsa","ticker":"TWAV","exchange":"NASDAQ","all_tickers":["TWAV"],"title":"TaoWeave Reports First Quarter 2026 Results; Treasury Appreciation Drives Return to Net Income as Company Advances Bittensor Ecosystem Operating Strategy","author":"Business Wire","published_at":"2026-05-18T13:00:02.175Z","article_body":"TaoWeave Reports First Quarter 2026 Results; Treasury Appreciation Drives\nReturn to Net Income as Company Advances Bittensor Ecosystem Operating\nStrategy\n\n$1.7 Million in Q1 Net Income Driven by $2.2 Million Unrealized Gain on TAO\nHoldings\n\nEight Months of Bittensor Subnet Diligence Has Sharpened the Company’s View\nof Where Its Operating Experience Can Be Most Valuable to the Ecosystem\n\nTaoWeave, Inc. (Nasdaq: TWAV), a technology company focused on Bittensor’s\nAI ecosystem, reported financial results for the first quarter ended March 31,\n2026.\n\nFirst Quarter 2026 Financial Highlights\n\n\n * Net income of $1.7 million, or $0.43 per diluted share, compared to a net loss\nof $0.7 million, or $(0.59) per diluted share, in Q1 2025. Q1 2026 reflects a\n$2.2 million unrealized gain and a $52,000 realized gain on the Company’s\nTAO holdings.\n\n * Total revenue of $0.7 million, an increase of 14% year-over-year, including\n$86,000 of TAO staking revenue, a new revenue stream that did not exist in the\nprior-year period.\n\n * Debt-free balance sheet with $2.1 million in cash and cash equivalents plus\n23,557 TAO tokens valued at $7.2 million (total liquid assets of $9.3 million)\nand working capital of $8.7 million at March 31, 2026.\n\n * Adjusted EBITDA loss narrowed 31% year-over-year to $0.5 million; operating\nloss narrowed 19% year-over-year to $0.6 million.\n\nTreasury Performance and Staking Operations\n\nDuring the first quarter of 2026, TaoWeave earned approximately 348 TAO tokens\nthrough staking, representing $86,000 of revenue at a segment gross margin of\n93%. The Company sold 1,457 TAO tokens for cash proceeds of $522,000 to fund\noperations, recognizing a realized gain of $52,000 on the sale. As of March\n31, 2026, the Company held approximately 23,557 TAO tokens with a fair market\nvalue of $7.2 million, representing approximately 72% of total assets, up from\n66% at year-end 2025. The Company recorded an unrealized gain of $2.2 million\non its TAO holdings for the quarter, reflecting the appreciation in the spot\nprice of TAO from December 31, 2025 to March 31, 2026.\n\nAll TAO holdings remain fully staked across the Company’s institutional\ncustodians, BitGo Trust Company and Kraken. Subsequent to quarter-end, the\nCompany purchased an additional 1,900 TAO tokens for $506,000 in April 2026,\nbringing total TAO holdings to approximately 25,663 tokens as of the date of\nthis release.\n\nFirst Quarter 2026 Segment Results\n\nTaoWeave reports results across three operating segments: Digital Assets,\nManaged Services, and Collaboration Products. Segment performance for the\nfirst quarter of 2026 was as follows:\n\n\n * Digital Assets: Revenue of $86,000 from TAO staking rewards (no comparable\nrevenue in Q1 2025), with segment gross profit of $80,000, or 93%. Segment\nalso recognized $2.2 million in unrealized gains and $52,000 in realized gains\non the Company’s TAO holdings during the quarter.\n\n * Managed Services: Revenue of $422,000, down 17% year-over-year, reflecting\ncustomer disconnects and service-level reductions. Segment gross margin\nexpanded to 47% from 27% in the prior-year period, primarily due to reduced\npersonnel expenses.\n\n * Collaboration Products: Revenue of $199,000, up 75% year-over-year, driven\nprimarily by spares orders and installation revenue. As previously disclosed,\nthe Company announced end-of-life for the Mezzanine™ product line in\nDecember 2025 and expects no further product revenue, with minor maintenance\nrevenue continuing through 2026.\n\n * Consolidated revenue grew 14% year-over-year to $707,000, with consolidated\ngross profit increasing 89% to $470,000 and consolidated gross margin\nexpanding from 40% to 66%.\n\n * Total operating expenses of $1.0 million were modestly higher year-over-year,\nwith corporate expenses essentially flat and the increase attributable\nprimarily to stock-based advisory fees related to the Company’s digital\nasset treasury program.\n\n * One customer in the Managed Services segment accounted for 58% of consolidated\nrevenue in the first quarter of 2026, compared to 81% in the first quarter of\n2025.\n\nBittensor Ecosystem Activities\n\nOver the past eight months, TaoWeave has evaluated approximately 30 Bittensor\nsubnet teams operating in enterprise verticals where its senior leadership has\npreviously operated. The markets evaluated include AI infrastructure and cloud\ncomputing, AI model development and training, enterprise computer vision,\nAI-driven trading, investment strategy and prediction markets, and AI-driven\npharmaceutical research and drug discovery.\n\nThrough this diligence process, TaoWeave has identified several subnet teams\ndeveloping differentiated technologies and beginning to demonstrate early\nsigns of commercial traction. TaoWeave believes a number of these teams could\nbenefit from a strategic partner with experience in enterprise go-to-market\nexecution, customer acquisition, operational scaling, and translating\ntechnical innovation into contracted recurring revenue opportunities.\n\nTaoWeave believes its operating background, enterprise relationships, and\npublic market platform position TaoWeave to support the commercialization\nefforts of select subnet teams as the Bittensor ecosystem continues to mature.\n\nManagement Commentary\n\n“Eight months of evaluating subnet teams across the Bittensor ecosystem has\nuncovered some great teams and services that have imminent traction in the\ncommercial market,” said Pete Holst, Chief Executive Officer. “The\ntechnical work and the speed at which many of these teams are building is\nimpressive, and a testament to how Bittensor is designed. The challenge\nseveral of them are working through is the same one every technology company\nfaces at the transition from early product market fit to commercial scale.\nBuilding the infrastructure is one discipline. Scaling that infrastructure\ninto contracted enterprise revenue is another. It requires capital ahead of\nrevenue, enterprise sales and customer success capabilities, financial\ncontrols that can withstand customer diligence, and the operational and\nreporting discipline institutional customers expect.”\n\nMr. Holst continued, “From those evaluations we have identified a small\nnumber of teams where TaoWeave believes its operating experience and\nenterprise background could provide meaningful strategic value beyond capital\nalone. As the Bittensor ecosystem continues to mature, we believe\nopportunities will emerge for experienced operators to help bridge the gap\nbetween technical innovation and enterprise adoption.”\n\nForward-Looking Statements and Risk Factors\n\nThis press release and any oral statements made regarding the subject of this\nrelease contain forward-looking statements as defined under Section 27A of the\nSecurities Act of 1933, as amended, and Section 21E of the Securities Exchange\nAct of 1934, as amended, and are made under the safe harbor provisions of the\nPrivate Securities Litigation Reform Act of 1995. All statements, other than\nstatements of historical facts, that address activities that TaoWeave assumes,\nplans, expects, believes, intends, projects, estimates, or anticipates (and\nother similar expressions) will, should, or may occur in the future are\nforward-looking statements. TaoWeave’s actual results may differ materially\nfrom its expectations, estimates, and projections, and consequently, you\nshould not rely on these forward-looking statements as predictions of future\nevents. Without limiting the generality of the foregoing, forward-looking\nstatements contained in this press release include statements relating to\nTaoWeave’s anticipated involvement in the Bittensor ecosystem. The\nforward-looking statements are based on management’s current belief, based\non currently available information, as to the outcome and timing of future\nevents, and involve factors, risks, and uncertainties, including the\nvolatility of market price for our securities, that may cause actual results\nin future periods to differ materially from such statements. Digital assets\nare highly volatile, and actual results may differ materially due to price\nfluctuations, regulatory changes, technological risks, or other factors\ndescribed in the Company’s SEC filings. The Company’s concentration in TAO\ntokens represents significant market risk. A list and description of these and\nother risk factors can be found in the Company’s Annual Report on Form 10-K\nfor the year ending December 31, 2025, the Company’s Form 10-Q filed on May\n15, 2026, and in other filings made by the Company with the SEC from time to\ntime. Any of these factors could cause TaoWeave’s actual results and plans\nto differ materially from those in the forward-looking statements. Therefore,\nthe Company can give no assurance that its future results will be as\nestimated. The Company does not intend to, and disclaims any obligation to,\ncorrect, update, or revise any information contained herein.\n\nNon-GAAP Financial Information\n\nAdjusted EBITDA is a non-GAAP financial measure. See “GAAP to Non-GAAP\nReconciliation” below for a reconciliation to net income (loss).\n\nAbout TaoWeave, Inc.\n\nTaoWeave, Inc. (Nasdaq: TWAV) is a public company focused on the Bittensor\necosystem, a decentralized, open-source protocol that coordinates the\ndevelopment and deployment of artificial intelligence models. The Company\nholds and stakes TAO, Bittensor’s native cryptocurrency, as its principal\ntreasury asset and is planning to actively build an operating business around\npartnerships with Bittensor subnet development teams, with the objective of\naccelerating the commercial adoption of decentralized AI applications in North\nAmerica. TaoWeave also operates legacy businesses centered around its patented\nMezzanine™ product line and managed services for video collaboration and\nnetwork solutions.\n                                                                                                                                               \n TAOWEAVE, INC.                                                                                                                                \n CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                         \n ($ in thousands, except shares, par value, and stated value)                                                                                  \n                                                                                                                                               \n                                                                                      March 31, 2026                 December 31, 2025         \n ASSETS                                                                                      (unaudited)                                       \n Current assets:                                                                                                                               \n Cash and cash equivalents                                                            $      2,130                   $       2,258             \n Digital assets                                                                              7,209                           5,395             \n Accounts receivable, net                                                                    135                             138               \n Prepaid expenses and other current assets                                                   500                             424               \n Total current assets                                                                        9,974                           8,215             \n Other assets                                                                                3                               4                 \n Total assets                                                                         $      9,977                   $       8,219             \n LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                          \n Current liabilities:                                                                                                                          \n Accounts payable                                                                            272                             112               \n Accrued expenses and other current liabilities                                              973                             1,061             \n Deferred revenue                                                                            6                               13                \n Total current liabilities                                                                   1,251                           1,186             \n Total liabilities                                                                           1,251                           1,186             \n Commitments and contingencies (see Note 10)                                                                                                   \n Stockholders’ equity:                                                                                                                         \n Preferred stock Series F, convertible; $0.0001 par value; $176,000 stated                   —                               —                 \n value; 42,000 shares authorized, 150 shares issued and outstanding as of March                                                                \n 31, 2026 and December 31, 2025                                                                                                                \n Common stock; $0.0001 par value; 150,000,000 shares authorized, 3,327,399                   —                               —                 \n shares issued, and 3,327,210 outstanding as of March 31, 2026 and December 31,                                                                \n 2025                                                                                                                                          \n Treasury Stock, 189 common shares                                                           (181         )                  (181      )       \n Additional paid-in capital                                                                  245,839                         245,843           \n Accumulated deficit                                                                         (236,932     )                  (238,629  )       \n Total stockholders’ equity                                                                  8,726                           7,033             \n Total liabilities and stockholders’ equity                                           $      9,977                   $       8,219             \n                                                                                                                                               \n\n TAOWEAVE, INC.                                                               \n CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                              \n ($ in thousands) (Unaudited)                                                 \n                                                                              \n                                        Three Months Ended                    \n                                        March 31,                             \n                                        2026                  2025            \n Revenue                                $    707              $    622        \n Cost of revenue                             237                   373        \n Gross profit                                470                   249        \n Operating expenses:                                                          \n Research and development                    —                     3          \n Sales and marketing                         7                     8          \n General and administrative                  1,022                 929        \n Total operating expenses                    1,029                 940        \n Operating loss                              (559   )              (691  )    \n Interest income, net                        6                     26         \n Realized gain on digital assets             52                    —          \n Unrealized gain on digital assets           2,198                 —          \n Other income, net                           2,256                 26         \n Income (loss) before income taxes           1,697                 (665  )    \n Income tax expense                          —                     7          \n Net income (loss)                      $    1,697            $    (672  )    \n\n GAAP to Non-GAAP Reconciliation:                                              \n                                                                               \n                                        Three Months Ended                     \n                                        March 31,                              \n                                        2026                   2025            \n Net income (loss)                      $    1,697             $    (672  )    \n Interest income, net                        (6      )              (26   )    \n Realized gain on digital assets             (52     )              —          \n Unrealized gain on digital assets           (2,198  )              —          \n Income tax expense                          —                      7          \n Stock-based expense                         84                     —          \n Adjusted EBITDA loss                   $    (475    )         $    (691  )    \n\n\n \n\n\n\nView source version on businesswire.com:\nhttps://www.businesswire.com/news/home/20260517043182/en/\n(https://www.businesswire.com/news/home/20260517043182/en/)\n\nInvestor Relations Contact \n\nDavid Clark\n\ninvestors@taoweave.com \n(mailto:investors@taoweave.com) \n(213) 683-8863 ext. 5\n\n\nCopyright Business Wire 2026","article_body_html":"","raw_payload":{"data":{"id":"nBw1qqShsa","title":"TaoWeave Reports First Quarter 2026 Results; Treasury Appreciation Drives Return to Net Income as Company Advances Bittensor Ecosystem Operating Strategy","author":"Business Wire","ticker":"TWAV","created":"2026-05-18T13:00:02.175Z","tickers":["TWAV"],"exchange":"NASDAQ","article_body":"TaoWeave Reports First Quarter 2026 Results; Treasury Appreciation Drives\nReturn to Net Income as Company Advances Bittensor Ecosystem Operating\nStrategy\n\n$1.7 Million in Q1 Net Income Driven by $2.2 Million Unrealized Gain on TAO\nHoldings\n\nEight Months of Bittensor Subnet Diligence Has Sharpened the Company’s View\nof Where Its Operating Experience Can Be Most Valuable to the Ecosystem\n\nTaoWeave, Inc. (Nasdaq: TWAV), a technology company focused on Bittensor’s\nAI ecosystem, reported financial results for the first quarter ended March 31,\n2026.\n\nFirst Quarter 2026 Financial Highlights\n\n\n * Net income of $1.7 million, or $0.43 per diluted share, compared to a net loss\nof $0.7 million, or $(0.59) per diluted share, in Q1 2025. Q1 2026 reflects a\n$2.2 million unrealized gain and a $52,000 realized gain on the Company’s\nTAO holdings.\n\n * Total revenue of $0.7 million, an increase of 14% year-over-year, including\n$86,000 of TAO staking revenue, a new revenue stream that did not exist in the\nprior-year period.\n\n * Debt-free balance sheet with $2.1 million in cash and cash equivalents plus\n23,557 TAO tokens valued at $7.2 million (total liquid assets of $9.3 million)\nand working capital of $8.7 million at March 31, 2026.\n\n * Adjusted EBITDA loss narrowed 31% year-over-year to $0.5 million; operating\nloss narrowed 19% year-over-year to $0.6 million.\n\nTreasury Performance and Staking Operations\n\nDuring the first quarter of 2026, TaoWeave earned approximately 348 TAO tokens\nthrough staking, representing $86,000 of revenue at a segment gross margin of\n93%. The Company sold 1,457 TAO tokens for cash proceeds of $522,000 to fund\noperations, recognizing a realized gain of $52,000 on the sale. As of March\n31, 2026, the Company held approximately 23,557 TAO tokens with a fair market\nvalue of $7.2 million, representing approximately 72% of total assets, up from\n66% at year-end 2025. The Company recorded an unrealized gain of $2.2 million\non its TAO holdings for the quarter, reflecting the appreciation in the spot\nprice of TAO from December 31, 2025 to March 31, 2026.\n\nAll TAO holdings remain fully staked across the Company’s institutional\ncustodians, BitGo Trust Company and Kraken. Subsequent to quarter-end, the\nCompany purchased an additional 1,900 TAO tokens for $506,000 in April 2026,\nbringing total TAO holdings to approximately 25,663 tokens as of the date of\nthis release.\n\nFirst Quarter 2026 Segment Results\n\nTaoWeave reports results across three operating segments: Digital Assets,\nManaged Services, and Collaboration Products. Segment performance for the\nfirst quarter of 2026 was as follows:\n\n\n * Digital Assets: Revenue of $86,000 from TAO staking rewards (no comparable\nrevenue in Q1 2025), with segment gross profit of $80,000, or 93%. Segment\nalso recognized $2.2 million in unrealized gains and $52,000 in realized gains\non the Company’s TAO holdings during the quarter.\n\n * Managed Services: Revenue of $422,000, down 17% year-over-year, reflecting\ncustomer disconnects and service-level reductions. Segment gross margin\nexpanded to 47% from 27% in the prior-year period, primarily due to reduced\npersonnel expenses.\n\n * Collaboration Products: Revenue of $199,000, up 75% year-over-year, driven\nprimarily by spares orders and installation revenue. As previously disclosed,\nthe Company announced end-of-life for the Mezzanine™ product line in\nDecember 2025 and expects no further product revenue, with minor maintenance\nrevenue continuing through 2026.\n\n * Consolidated revenue grew 14% year-over-year to $707,000, with consolidated\ngross profit increasing 89% to $470,000 and consolidated gross margin\nexpanding from 40% to 66%.\n\n * Total operating expenses of $1.0 million were modestly higher year-over-year,\nwith corporate expenses essentially flat and the increase attributable\nprimarily to stock-based advisory fees related to the Company’s digital\nasset treasury program.\n\n * One customer in the Managed Services segment accounted for 58% of consolidated\nrevenue in the first quarter of 2026, compared to 81% in the first quarter of\n2025.\n\nBittensor Ecosystem Activities\n\nOver the past eight months, TaoWeave has evaluated approximately 30 Bittensor\nsubnet teams operating in enterprise verticals where its senior leadership has\npreviously operated. The markets evaluated include AI infrastructure and cloud\ncomputing, AI model development and training, enterprise computer vision,\nAI-driven trading, investment strategy and prediction markets, and AI-driven\npharmaceutical research and drug discovery.\n\nThrough this diligence process, TaoWeave has identified several subnet teams\ndeveloping differentiated technologies and beginning to demonstrate early\nsigns of commercial traction. TaoWeave believes a number of these teams could\nbenefit from a strategic partner with experience in enterprise go-to-market\nexecution, customer acquisition, operational scaling, and translating\ntechnical innovation into contracted recurring revenue opportunities.\n\nTaoWeave believes its operating background, enterprise relationships, and\npublic market platform position TaoWeave to support the commercialization\nefforts of select subnet teams as the Bittensor ecosystem continues to mature.\n\nManagement Commentary\n\n“Eight months of evaluating subnet teams across the Bittensor ecosystem has\nuncovered some great teams and services that have imminent traction in the\ncommercial market,” said Pete Holst, Chief Executive Officer. “The\ntechnical work and the speed at which many of these teams are building is\nimpressive, and a testament to how Bittensor is designed. The challenge\nseveral of them are working through is the same one every technology company\nfaces at the transition from early product market fit to commercial scale.\nBuilding the infrastructure is one discipline. Scaling that infrastructure\ninto contracted enterprise revenue is another. It requires capital ahead of\nrevenue, enterprise sales and customer success capabilities, financial\ncontrols that can withstand customer diligence, and the operational and\nreporting discipline institutional customers expect.”\n\nMr. Holst continued, “From those evaluations we have identified a small\nnumber of teams where TaoWeave believes its operating experience and\nenterprise background could provide meaningful strategic value beyond capital\nalone. As the Bittensor ecosystem continues to mature, we believe\nopportunities will emerge for experienced operators to help bridge the gap\nbetween technical innovation and enterprise adoption.”\n\nForward-Looking Statements and Risk Factors\n\nThis press release and any oral statements made regarding the subject of this\nrelease contain forward-looking statements as defined under Section 27A of the\nSecurities Act of 1933, as amended, and Section 21E of the Securities Exchange\nAct of 1934, as amended, and are made under the safe harbor provisions of the\nPrivate Securities Litigation Reform Act of 1995. All statements, other than\nstatements of historical facts, that address activities that TaoWeave assumes,\nplans, expects, believes, intends, projects, estimates, or anticipates (and\nother similar expressions) will, should, or may occur in the future are\nforward-looking statements. TaoWeave’s actual results may differ materially\nfrom its expectations, estimates, and projections, and consequently, you\nshould not rely on these forward-looking statements as predictions of future\nevents. Without limiting the generality of the foregoing, forward-looking\nstatements contained in this press release include statements relating to\nTaoWeave’s anticipated involvement in the Bittensor ecosystem. The\nforward-looking statements are based on management’s current belief, based\non currently available information, as to the outcome and timing of future\nevents, and involve factors, risks, and uncertainties, including the\nvolatility of market price for our securities, that may cause actual results\nin future periods to differ materially from such statements. Digital assets\nare highly volatile, and actual results may differ materially due to price\nfluctuations, regulatory changes, technological risks, or other factors\ndescribed in the Company’s SEC filings. The Company’s concentration in TAO\ntokens represents significant market risk. A list and description of these and\nother risk factors can be found in the Company’s Annual Report on Form 10-K\nfor the year ending December 31, 2025, the Company’s Form 10-Q filed on May\n15, 2026, and in other filings made by the Company with the SEC from time to\ntime. Any of these factors could cause TaoWeave’s actual results and plans\nto differ materially from those in the forward-looking statements. Therefore,\nthe Company can give no assurance that its future results will be as\nestimated. The Company does not intend to, and disclaims any obligation to,\ncorrect, update, or revise any information contained herein.\n\nNon-GAAP Financial Information\n\nAdjusted EBITDA is a non-GAAP financial measure. See “GAAP to Non-GAAP\nReconciliation” below for a reconciliation to net income (loss).\n\nAbout TaoWeave, Inc.\n\nTaoWeave, Inc. (Nasdaq: TWAV) is a public company focused on the Bittensor\necosystem, a decentralized, open-source protocol that coordinates the\ndevelopment and deployment of artificial intelligence models. The Company\nholds and stakes TAO, Bittensor’s native cryptocurrency, as its principal\ntreasury asset and is planning to actively build an operating business around\npartnerships with Bittensor subnet development teams, with the objective of\naccelerating the commercial adoption of decentralized AI applications in North\nAmerica. TaoWeave also operates legacy businesses centered around its patented\nMezzanine™ product line and managed services for video collaboration and\nnetwork solutions.\n                                                                                                                                               \n TAOWEAVE, INC.                                                                                                                                \n CONDENSED CONSOLIDATED BALANCE SHEETS                                                                                                         \n ($ in thousands, except shares, par value, and stated value)                                                                                  \n                                                                                                                                               \n                                                                                      March 31, 2026                 December 31, 2025         \n ASSETS                                                                                      (unaudited)                                       \n Current assets:                                                                                                                               \n Cash and cash equivalents                                                            $      2,130                   $       2,258             \n Digital assets                                                                              7,209                           5,395             \n Accounts receivable, net                                                                    135                             138               \n Prepaid expenses and other current assets                                                   500                             424               \n Total current assets                                                                        9,974                           8,215             \n Other assets                                                                                3                               4                 \n Total assets                                                                         $      9,977                   $       8,219             \n LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                          \n Current liabilities:                                                                                                                          \n Accounts payable                                                                            272                             112               \n Accrued expenses and other current liabilities                                              973                             1,061             \n Deferred revenue                                                                            6                               13                \n Total current liabilities                                                                   1,251                           1,186             \n Total liabilities                                                                           1,251                           1,186             \n Commitments and contingencies (see Note 10)                                                                                                   \n Stockholders’ equity:                                                                                                                         \n Preferred stock Series F, convertible; $0.0001 par value; $176,000 stated                   —                               —                 \n value; 42,000 shares authorized, 150 shares issued and outstanding as of March                                                                \n 31, 2026 and December 31, 2025                                                                                                                \n Common stock; $0.0001 par value; 150,000,000 shares authorized, 3,327,399                   —                               —                 \n shares issued, and 3,327,210 outstanding as of March 31, 2026 and December 31,                                                                \n 2025                                                                                                                                          \n Treasury Stock, 189 common shares                                                           (181         )                  (181      )       \n Additional paid-in capital                                                                  245,839                         245,843           \n Accumulated deficit                                                                         (236,932     )                  (238,629  )       \n Total stockholders’ equity                                                                  8,726                           7,033             \n Total liabilities and stockholders’ equity                                           $      9,977                   $       8,219             \n                                                                                                                                               \n\n TAOWEAVE, INC.                                                               \n CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                              \n ($ in thousands) (Unaudited)                                                 \n                                                                              \n                                        Three Months Ended                    \n                                        March 31,                             \n                                        2026                  2025            \n Revenue                                $    707              $    622        \n Cost of revenue                             237                   373        \n Gross profit                                470                   249        \n Operating expenses:                                                          \n Research and development                    —                     3          \n Sales and marketing                         7                     8          \n General and administrative                  1,022                 929        \n Total operating expenses                    1,029                 940        \n Operating loss                              (559   )              (691  )    \n Interest income, net                        6                     26         \n Realized gain on digital assets             52                    —          \n Unrealized gain on digital assets           2,198                 —          \n Other income, net                           2,256                 26         \n Income (loss) before income taxes           1,697                 (665  )    \n Income tax expense                          —                     7          \n Net income (loss)                      $    1,697            $    (672  )    \n\n GAAP to Non-GAAP Reconciliation:                                              \n                                                                               \n                                        Three Months Ended                     \n                                        March 31,                              \n                                        2026                   2025            \n Net income (loss)                      $    1,697             $    (672  )    \n Interest income, net                        (6      )              (26   )    \n Realized gain on digital assets             (52     )              —          \n Unrealized gain on digital assets           (2,198  )              —          \n Income tax expense                          —                      7          \n Stock-based expense                         84                     —          \n Adjusted EBITDA loss                   $    (475    )         $    (691  )    \n\n\n \n\n\n\nView source version on businesswire.com:\nhttps://www.businesswire.com/news/home/20260517043182/en/\n(https://www.businesswire.com/news/home/20260517043182/en/)\n\nInvestor Relations Contact \n\nDavid Clark\n\ninvestors@taoweave.com \n(mailto:investors@taoweave.com) \n(213) 683-8863 ext. 5\n\n\nCopyright Business Wire 2026"},"type":"article","timestamp":"2026-05-18T13:00:02.219991876Z","server_sent_at_ms":1779109202219},"received_at":"2026-05-18T13:00:02.279Z","source_url":"https://www.businesswire.com/news/home/20260517043182/en/"},"analysis":{"id":"27352","press_release_id":"37905","analysis_json":{"industry":{"label":"Software","sector":"Information Technology"},"redFlags":["Net income is entirely non-operating (unrealized crypto gains)","High concentration risk: 72% of assets are in volatile cryptocurrency (TAO)","Core business is shrinking: Managed Services revenue down 17% YoY","Legacy product line (Mezzanine) is end-of-life with no replacement revenue strategy disclosed"],"eventType":"earnings","narrative":"TaoWeave reported Q1 2026 net income of $1.7 million, reversing a prior-year loss, but the result was driven by a $2.2 million unrealized gain on its TAO cryptocurrency treasury rather than operational performance.\n\nCore operations remain unprofitable with an operating loss of $0.56 million and Adjusted EBITDA loss of $0.48 million. Revenue grew 14% year-over-year to $707,000, aided by a new $86,000 staking revenue stream.\n\nThe company holds approximately 23,557 TAO tokens valued at $7.2 million, which constitute 72% of total assets. Management is evaluating partnerships with Bittensor subnet teams to commercialize AI infrastructure, but no specific deals were announced.","sentiment":"neutral","agentHooks":{"shouldPost":false,"suggestedAngle":"TWAV returns to profitability on paper, but it's a crypto-treasury artifact, not an operational turnaround. Core business remains loss-making with shrinking legacy revenue."},"keyFigures":{"eps":0.43,"revenue":707000,"guidance":"","revenueYoy":"14%","customDimensions":{"net_income":1697000,"gross_margin":"66%","operating_loss":559000,"tao_token_count":23557,"working_capital":8700000,"realized_gain_tao":52000,"tao_holdings_value":7209000,"total_liquid_assets":9300000,"unrealized_gain_tao":2198000,"adjusted_ebitda_loss":475000,"cash_and_equivalents":2130000,"digital_assets_revenue":86000,"managed_services_revenue":422000,"collaboration_products_revenue":199000}},"quotedText":"Eight months of evaluating subnet teams across the Bittensor ecosystem has uncovered some great teams and services that have imminent traction in the commercial market","namedEntities":{"people":[{"name":"Pete Holst","role":"CEO"},{"name":"David Clark","role":"Investor Relations"}],"products":["TAO","Bittensor","Mezzanine"],"companies":[{"name":"TaoWeave, Inc.","ticker":"TWAV","relationship":"filer"},{"name":"BitGo Trust Company","relationship":"custodian"},{"name":"Kraken","relationship":"custodian"}],"dollarAmounts":[{"amount":"$1.7 million","context":"Q1 2026 net income"},{"amount":"$2.2 million","context":"unrealized gain on TAO holdings"},{"amount":"$52,000","context":"realized gain on TAO sale"},{"amount":"$0.7 million","context":"total revenue"},{"amount":"$86,000","context":"TAO staking revenue"},{"amount":"$2.1 million","context":"cash and cash equivalents"},{"amount":"$7.2 million","context":"fair market value of TAO holdings"},{"amount":"$9.3 million","context":"total liquid assets"},{"amount":"$8.7 million","context":"working capital"},{"amount":"$0.5 million","context":"Adjusted EBITDA loss"},{"amount":"$0.6 million","context":"operating loss"},{"amount":"$522,000","context":"cash proceeds from TAO sale"},{"amount":"$506,000","context":"cost of additional TAO purchase in April"},{"amount":"$422,000","context":"Managed Services revenue"},{"amount":"$199,000","context":"Collaboration Products revenue"},{"amount":"$1.0 million","context":"total operating expenses"}]},"materialImpact":{"score":2,"reasoning":"The company returned to net income, but the $1.7M profit is entirely driven by a $2.2M unrealized gain on cryptocurrency holdings (TAO), not operational performance. Core operating loss widened slightly in absolute terms or remained high ($0.56M operating loss), and revenue growth is modest (14%) on a very small base ($0.7M). The 'earnings beat' is an accounting artifact of crypto volatility, not business improvement."},"tickerRelevance":{"others":[],"primary":"TWAV"},"globalImportance":15,"audienceRelevance":20,"eventTypeSecondary":[],"importanceComponents":{"tickerTier":"micro-cap","eventGravity":"low","sectorWeight":"neutral","cryptoExposure":"high","householdBrandBoost":0,"marketCapAdjustment":"negative","retailFavoriteBoost":0}},"event_type":"earnings","event_type_secondary":null,"sentiment":"neutral","material_impact_score":2,"narrative":"TaoWeave reported Q1 2026 net income of $1.7 million, reversing a prior-year loss, but the result was driven by a $2.2 million unrealized gain on its TAO cryptocurrency treasury rather than operational performance.\n\nCore operations remain unprofitable with an operating loss of $0.56 million and Adjusted EBITDA loss of $0.48 million. Revenue grew 14% year-over-year to $707,000, aided by a new $86,000 staking revenue stream.\n\nThe company holds approximately 23,557 TAO tokens valued at $7.2 million, which constitute 72% of total assets. Management is evaluating partnerships with Bittensor subnet teams to commercialize AI infrastructure, but no specific deals were announced.","key_figures":{"eps":0.43,"revenue":707000,"guidance":"","revenueYoy":"14%","customDimensions":{"net_income":1697000,"gross_margin":"66%","operating_loss":559000,"tao_token_count":23557,"working_capital":8700000,"realized_gain_tao":52000,"tao_holdings_value":7209000,"total_liquid_assets":9300000,"unrealized_gain_tao":2198000,"adjusted_ebitda_loss":475000,"cash_and_equivalents":2130000,"digital_assets_revenue":86000,"managed_services_revenue":422000,"collaboration_products_revenue":199000}},"named_entities":{"people":[{"name":"Pete Holst","role":"CEO"},{"name":"David Clark","role":"Investor Relations"}],"products":["TAO","Bittensor","Mezzanine"],"companies":[{"name":"TaoWeave, Inc.","ticker":"TWAV","relationship":"filer"},{"name":"BitGo Trust Company","relationship":"custodian"},{"name":"Kraken","relationship":"custodian"}],"dollarAmounts":[{"amount":"$1.7 million","context":"Q1 2026 net income"},{"amount":"$2.2 million","context":"unrealized gain on TAO holdings"},{"amount":"$52,000","context":"realized gain on TAO sale"},{"amount":"$0.7 million","context":"total revenue"},{"amount":"$86,000","context":"TAO staking revenue"},{"amount":"$2.1 million","context":"cash and cash equivalents"},{"amount":"$7.2 million","context":"fair market value of TAO holdings"},{"amount":"$9.3 million","context":"total liquid assets"},{"amount":"$8.7 million","context":"working capital"},{"amount":"$0.5 million","context":"Adjusted EBITDA loss"},{"amount":"$0.6 million","context":"operating loss"},{"amount":"$522,000","context":"cash proceeds from TAO sale"},{"amount":"$506,000","context":"cost of additional TAO purchase in April"},{"amount":"$422,000","context":"Managed Services revenue"},{"amount":"$199,000","context":"Collaboration Products revenue"},{"amount":"$1.0 million","context":"total operating expenses"}]},"model_name":"qwen3_6_27b_awq","prompt_hash":"sha256:727b4b9429a443af","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-05-18T13:03:22.882Z","global_importance":15,"audience_relevance":20,"importance_components":{"tickerTier":"micro-cap","eventGravity":"low","sectorWeight":"neutral","cryptoExposure":"high","householdBrandBoost":0,"marketCapAdjustment":"negative","retailFavoriteBoost":0}},"durationMs":33204,"modelName":"george-droid-qwen-72b"}}