Oblong Announces Financial Results for Fourth Quarter 2023 and Provides Business Update
- The company raised $5.9 million in funding in 2023 to strengthen its balance sheet
- CEO Peter Holst outlined a growth strategy focusing on organic expansion and seeking inorganic growth through partnerships or acquisitions
- The company is exploring strategic alternatives such as business combinations, reverse mergers, or a sale
- Q4 2023 financial results show $6.0 million in cash, $0.9 million revenue, a net loss of $1.2 million, and an AEBITDA loss of $0.9 million
- Total revenue decreased from $1.4 million in Q4 2022 to $0.9 million in Q4 2023
- The company reported a net loss of $1.2 million in Q4 2023, the same as in Q4 2022
- AEBITDA loss was $0.9 million in Q4 2023, compared to $1.2 million in Q4 2022
Insights
The financial results reported by Oblong, Inc. reflect a contraction in total revenue year-over-year, from $1.4 million in the fourth quarter of 2022 to $0.9 million in the same period of 2023. This decrease is a significant indicator of the company's performance and could influence investor sentiment. The consistency of the net loss at $1.2 million across both quarters suggests that while the company's revenue streams have diminished, its cost structure may have seen parallel reductions, possibly due to the operational optimization mentioned. However, the reduction in Adjusted EBITDA loss from $1.2 million to $0.9 million indicates an improvement in operational efficiency despite the drop in revenue.
From a market expansion perspective, the CEO's statement on exploring strategic alternatives, including acquisitions or mergers, indicates a proactive approach towards growth. This could be appealing to investors looking for companies with a clear strategy for market expansion. The focus on early-stage technology ventures aligns with the current market trend of investing in innovative startups with high growth potential. However, the success of such a strategy is contingent upon the company's ability to effectively integrate new acquisitions and realize synergies.
The raise of $5.9 million in funding in 2023, which is expected to provide liquidity through mid-2025, is a positive signal of investor confidence and financial stability. This financial cushion could give Oblong the flexibility to navigate market conditions and invest in strategic initiatives. However, it's important to note that while the current cash position of $6.0 million with no debt is a strong point, the company's ability to turn this liquidity into profitable growth is yet to be seen. Stakeholders should monitor the deployment of these funds, ensuring they are used to generate a return on investment.
Given the current tech landscape's competitive nature, Oblong's strategic financing and lack of debt could provide it with an advantage over leveraged competitors, especially in a rising interest rate environment. However, the key will be how effectively the company can leverage its financial position to achieve the growth and scalability it aims for, without diluting shareholder value.
Oblong's strategic focus on early-stage technology companies for potential partnerships or acquisitions could be indicative of a high-risk, high-reward strategy. The pursuit of transformative technology aligns with the broader market interest in innovation-driven growth. However, the inherent risks associated with early-stage investments, such as the uncertainty of product viability and market acceptance, must be weighed against the potential long-term benefits. Investors should closely evaluate the company's criteria for selecting these ventures and the due diligence process to mitigate investment risks.
The financial results, particularly the revenue decrease, could impact the stock performance in the short term as markets react to immediate financial health. Long-term implications will depend on the company's execution of its growth strategy and its ability to capitalize on the identified market opportunities. Investors should consider the balance between the potential for future growth and the current financial health of the company when making investment decisions.
During 2023, the Company diligently optimized its operations, streamlined expenditures, and strengthened Oblong’s balance sheet to position itself as a lean and agile innovator in the tech landscape. Oblong raised
"Our strategy for growth and enhancing shareholder value is twofold. We aim to grow organically by expanding our market presence while actively seeking inorganic growth opportunities through strategic partnerships or acquisitions," said Peter Holst, CEO of Oblong. "Our exploration of strategic alternatives is diverse, encompassing the consideration of a range of transformative actions. These include the possibility of a business combination; a reverse merger; or outright sale of the company. Each option is being carefully evaluated to ensure it aligns with our overarching goal of sustainable growth and value creation. Specifically, we are interested in early-stage technology companies creating transformative approaches to leveraging technology for the betterment of human life. These companies may complement our existing offerings but could also open new avenues for expansion by tapping into significant market opportunities. In our quest to find the right partners, we are particularly focused on ventures that have demonstrated their ability to innovate and capture early-stage interest of their target markets, indicating a clear path to scalability and a substantial market presence."
Fourth Quarter 2023 Financial Results
-
As of December 31, 2023, the Company had
$6.0 million
-
Total revenue was
$0.9 million $1.4 million
-
Net loss of
$1.2 million $1.2 million
-
Adjusted EBITDA (“AEBITDA”) loss of
$0.9 million $1.2 million
Non-GAAP Financial Information
Adjusted EBITDA (“AEBITDA”) loss, a non-GAAP financial measure, is defined as net loss before depreciation and amortization, stock-based compensation and expense, impairment charges, casualty loss, severance, income tax expense (benefit), and interest and other income, net. AEBITDA loss is not intended to replace operating loss, net loss, cash flow or other measures of financial performance reported in accordance with generally accepted accounting principles (GAAP). Rather, AEBITDA loss is an important measure used by management to assess the operating performance of the Company and to compare such performance between periods. AEBITDA loss as defined here may not be comparable to similarly titled measures reported by other companies due to differences in accounting policies. Therefore, AEBITDA loss should be considered in conjunction with net loss and other performance measures prepared in accordance with GAAP, such as operating loss or cash flow used in operating activities, and should not be considered in isolation or as a substitute for GAAP measures, such as net loss, operating loss or any other GAAP measure of liquidity or financial performance. A GAAP to non-GAAP reconciliation of net loss to AEBITDA loss is shown under “GAAP to Non-GAAP Reconciliation” later in this release.
About Oblong, Inc.
Oblong (Nasdaq:OBLG) provides innovative and patented technologies that change the way people work, create, and communicate. Oblong’s flagship product Mezzanine™ is a remote meeting technology platform that offers simultaneous content sharing to achieve situational awareness for both in-room and remote collaborators. Oblong supplies Mezzanine systems to Fortune 500 and enterprise customers. For more information, visit www.oblong.com and Oblong’s Twitter and Facebook pages.
Forward looking and cautionary statements
This press release and any oral statements made regarding the subject of this release contain forward-looking statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, that address activities that Oblong assumes, plans, expects, believes, intends, projects, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Oblong’s actual results may differ materially from its expectations, estimates and projections, and consequently you should not rely on these forward-looking statements as predictions of future events. Without limiting the generality of the foregoing, forward-looking statements contained in this press release include statements relating to (i) the Company’s exploration of strategic alternatives, including the Company’s goal to forge partnerships with select early-stage technology companies and the mission to deliver innovative technology solutions, and (ii) the Company’s liquidity and operating expense projections. There can be no assurance that the strategic review being undertaken will result in a merger, sale or other business combination involving the Company. The forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events, and involve factors, risks, and uncertainties, including the volatility of market price for our securities, that may cause actual results in future periods to differ materially from such statements. A list and description of these and other risk factors can be found in the Company’s Annual Report on Form 10-K for the year ending December 31, 2023 and in other filings made by the Company with the SEC from time to time. Any of these factors could cause Oblong’s actual results and plans to differ materially from those in the forward-looking statements. Therefore, the Company can give no assurance that its future results will be as estimated. The Company does not intend to, and disclaims any obligation to, correct, update, or revise any information contained herein.
OBLONG, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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($ in thousands, except par value and stated value) |
|||||||
|
December 31, 2023 |
|
December 31, 2022 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
5,990 |
|
|
$ |
3,085 |
|
Accounts receivable, net |
|
424 |
|
|
|
415 |
|
Inventory, net |
|
239 |
|
|
|
723 |
|
Prepaid expenses and other current assets |
|
243 |
|
|
|
649 |
|
Total current assets |
|
6,896 |
|
|
|
4,872 |
|
Property and equipment, net |
|
— |
|
|
|
3 |
|
Intangibles, net |
|
— |
|
|
|
604 |
|
Operating lease, right-of-use assets |
|
17 |
|
|
|
142 |
|
Other assets |
|
12 |
|
|
|
40 |
|
Total assets |
$ |
6,925 |
|
|
$ |
5,661 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
|
211 |
|
|
|
184 |
|
Accrued expenses and other current liabilities |
|
1,038 |
|
|
|
1,074 |
|
Current portion of deferred revenue |
|
132 |
|
|
|
436 |
|
Current portion of operating lease liabilities |
|
17 |
|
|
|
219 |
|
Total current liabilities |
|
1,398 |
|
|
|
1,913 |
|
Long-term liabilities: |
|
|
|
||||
Deferred revenue, net of current portion |
|
26 |
|
|
|
114 |
|
Operating lease liabilities, net of current portion |
|
— |
|
|
|
17 |
|
Total long-term liabilities |
|
26 |
|
|
|
131 |
|
Total liabilities |
|
1,424 |
|
|
|
2,044 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock Series F, convertible; |
|
— |
|
|
|
— |
|
Common stock, |
|
2 |
|
|
|
— |
|
Treasury stock, 8,000 common shares at December 31, 2023 and 2022 |
|
(181 |
) |
|
|
(181 |
) |
Additional paid-in capital |
|
233,911 |
|
|
|
227,645 |
|
Accumulated deficit |
|
(228,231 |
) |
|
|
(223,847 |
) |
Total stockholders’ equity |
|
5,501 |
|
|
|
3,617 |
|
Total liabilities and stockholders’ equity |
|
6,925 |
|
|
|
5,661 |
|
OBLONG, INC. |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
($ in thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
$ |
944 |
|
|
$ |
1,426 |
|
|
$ |
3,810 |
|
|
$ |
5,476 |
|
Cost of revenue (exclusive of depreciation and amortization and casualty loss) |
|
655 |
|
|
|
1,130 |
|
|
|
2,899 |
|
|
|
3,930 |
|
Gross profit |
|
289 |
|
|
|
296 |
|
|
|
911 |
|
|
|
1,546 |
|
Operating expenses (gains): |
|
|
|
|
|
|
|
||||||||
Research and development |
|
4 |
|
|
|
65 |
|
|
|
20 |
|
|
|
1,699 |
|
Sales and marketing |
|
68 |
|
|
|
270 |
|
|
|
309 |
|
|
|
1,431 |
|
General and administrative |
|
1,147 |
|
|
|
1,174 |
|
|
|
4,870 |
|
|
|
5,278 |
|
Impairment charges |
|
260 |
|
|
|
25 |
|
|
|
262 |
|
|
|
12,740 |
|
Casualty (gain) loss, net |
|
— |
|
|
|
(50 |
) |
|
|
(400 |
) |
|
|
483 |
|
Depreciation and amortization |
|
86 |
|
|
|
85 |
|
|
|
345 |
|
|
|
1,903 |
|
Total operating expenses |
|
1,565 |
|
|
|
1,569 |
|
|
|
5,406 |
|
|
|
23,534 |
|
Loss from operations |
|
(1,276 |
) |
|
|
(1,273 |
) |
|
|
(4,495 |
) |
|
|
(21,988 |
) |
Interest and other income, net |
|
(44 |
) |
|
|
(41 |
) |
|
|
(138 |
) |
|
|
(40 |
) |
Loss before income taxes |
|
(1,232 |
) |
|
|
(1,232 |
) |
|
|
(4,357 |
) |
|
|
(21,948 |
) |
Income tax expense (benefit) |
|
(11 |
) |
|
|
(15 |
) |
|
|
27 |
|
|
|
(7 |
) |
Net loss |
$ |
(1,221 |
) |
|
$ |
(1,217 |
) |
|
$ |
(4,384 |
) |
|
$ |
(21,941 |
) |
GAAP to Non-GAAP Reconciliation: |
|||||||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
December 31, |
|
December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(1,221 |
) |
|
$ |
(1,217 |
) |
|
$ |
(4,384 |
) |
|
$ |
(21,941 |
) |
Depreciation and amortization |
|
86 |
|
|
|
85 |
|
|
|
345 |
|
|
|
1,903 |
|
Interest and other income, net |
|
(44 |
) |
|
|
(41 |
) |
|
|
(138 |
) |
|
|
(40 |
) |
Income tax (benefit) expense |
|
(11 |
) |
|
|
(15 |
) |
|
|
27 |
|
|
|
(7 |
) |
Impairment charges |
|
260 |
|
|
|
25 |
|
|
|
262 |
|
|
|
12,740 |
|
Casualty loss (gain) |
|
— |
|
|
|
(50 |
) |
|
|
(400 |
) |
|
|
483 |
|
Severance |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
294 |
|
Stock-based compensation and expense |
|
31 |
|
|
|
31 |
|
|
|
504 |
|
|
|
61 |
|
Adjusted EBITDA Loss |
$ |
(899 |
) |
|
$ |
(1,182 |
) |
|
$ |
(3,784 |
) |
|
$ |
(6,507 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240319264133/en/
Investor Relations Contact
David Clark
investors@oblong.com
(213) 683-8863 ext. 5
Source: Oblong, Inc.
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