Oblong Announces Letter of Intent to Merge with Dwellwell Analytics

Rhea-AI Summary

Oblong (Nasdaq: OBLG) announced a non-binding letter of intent to merge with Dwellwell Analytics. If finalized, Dwellwell security holders would own 67% of the combined company, while Oblong shareholders would hold 33%. The merger aims to expand Oblong's AI platform into property management using Dwellwell's patented multi-sensing technology. This technology enables real-time and predictive maintenance for residential properties, potentially reducing costs for owners. Both entities are undergoing due diligence, and the merger requires various approvals. No assurance of completion is provided.

Positive

• Potential expansion into property management with AI technology.
• Dwellwell's technology could revolutionize maintenance by predicting issues.
• Shareholders of Oblong would own 33% of the combined company.
• Opportunity to enter a $40 trillion U.S. residential real estate market.
• Combination could create substantial value for Oblong shareholders.
• Dwellwell's patented IoT technologies address critical maintenance needs.

Negative

• The merger is non-binding and may not be completed.
• Requires board, shareholder, and regulatory approvals.
• Completion contingent on satisfying net cash closing conditions.
• No assurance that terms will remain as outlined in the letter of intent.

Insights

Financial Analyst

Financial Analyst's Perspective:

From a financial standpoint, the Letter of Intent (LOI) between Oblong and Dwellwell marks a significant corporate maneuver. The ownership structure proposed—67% for Dwellwell securityholders and 33% for Oblong's—is a telling sign of the perceived value and synergies both companies expect from this merger.

Considering Oblong's current market position, this merger could offer a strategic realignment towards AI-driven solutions, potentially revitalizing its revenue streams. Investors should note the proposed equity split, which suggests Dwellwell’s technology and market potential is highly valued. This could be beneficial for Oblong shareholders, assuming Dwellwell’s technology scales successfully and achieves market penetration.

However, it is important to remain cautious as this is a non-binding LOI, meaning there is no guarantee the merger will complete. Additionally, the merger involves different layers of approval and due diligence. If the merger fails, it could negatively impact Oblong's share price owing to market speculation and possible operational disruptions.

Short-term investors might experience price volatility as the market absorbs this information. Long-term investors should focus on the potential synergies and growth prospects from Dwellwell’s AI technology. If successful, the merger could enhance recurring revenue streams and operational efficiency.

Tech Expert

Tech Expert's Perspective:

Dwellwell's technology, particularly its Ambient Inference™ AI and multi-sensing solutions, represents a promising advancement in property management. By utilizing remote sensing to monitor entire buildings, the technology could substantially reduce maintenance costs and improve operational efficiencies.

The potential for predictive maintenance is a significant value proposition. Predictive maintenance refers to techniques that predict when equipment will fail, allowing for timely maintenance before that happens. This approach is more cost-effective than reactive maintenance, where issues are addressed after they occur. As a result, both institutional and individual property owners could benefit from lowered maintenance expenses and prolonged asset lifespans.

For retail investors, an essential consideration is the scalability and adoption of this technology. The ability to successfully integrate and commercialize these AI-driven solutions will be crucial. Potential challenges may include integration issues, user adoption and the competitive landscape within the property tech industry.

Strategically, if Oblong and Dwellwell can leverage each other's strengths, this merger could result in a technological edge that drives long-term growth. However, the risks associated with emerging technologies and market adoption should not be overlooked.

Market Research Analyst

Market Research Analyst's Perspective:

From a market research perspective, the merger between Oblong and Dwellwell could reshape the dynamics within the property management technology sector. The AI and IoT-driven solutions that Dwellwell brings to the table align with current trends where the property management industry is increasingly adopting smart technologies for efficiency and cost reduction.

The residential real estate market, valued at over $40T in the U.S. alone, presents a substantial opportunity. The combined entity could target diverse segments, including multi-family buildings, single-family homes and short-term rentals. The market's appetite for innovative and proactive maintenance solutions suggests a significant growth potential for the combined company.

In the short term, investors may witness increased market activity and volatility as the details of the merger unfold and as the market assesses the strategic benefits. In the long term, success will hinge on how well the combined company can execute its growth strategies, effectively market its solutions and fend off competition from other property tech firms.

Investors should consider the broader market trends and competitive landscape. While the merger holds promise, it is also essential to weigh the risks inherent in such strategic shifts.

Transaction Will Enable Combined Company to Expand its AI Platform Revolutionizing Property Management

DENVER--(BUSINESS WIRE)-- Oblong, Inc. (Nasdaq: OBLG) (“Oblong”), the award-winning maker of multi-stream collaboration solutions, announced today that it has signed a non-binding letter of intent (the “Letter of Intent”) with Dwellwell Analytics (“Dwellwell”), to acquire 100% of the outstanding equity interests of Dwellwell (the “Merger”). Pursuant to the terms of the Letter of Intent, Dwellwell securityholders would, after giving effect to the proposed Merger, own 67% of the equity of the combined company and equity holders of Oblong would own 33% of the equity of the combined company, on a fully diluted basis.

The contemplated business combination would give Oblong investors a unique opportunity to be part of Dwellwell’s journey. The Dwellwell solution combines patented and patent-pending, multi-sensing technology and artificial intelligence to take the guesswork out of maintenance for both institutional and individual owners of residential property. Dwellwell’s unique approach uses remote sensing to monitor an entire residential building instead of individual systems or appliances.

Ambient Inference™, a unique form of artificial intelligence allows Dwellwell’s SaaS platform to identify maintenance issues as soon as they arise, and ultimately predict issues before they occur. Dwellwell enables customers, including owners of multi-family buildings, single-family homes, and short-term rentals, to address repairs proactively, significantly reducing costs across multiple operational areas.

“After undertaking a comprehensive process to explore and evaluate a range of strategic options, our Board and Management team believe this transaction with Dwellwell is the best strategic alternative for Oblong and represents an opportunity to create substantial value for our shareholders,” said Pete Holst, Oblong CEO. “This business combination, if completed, will result in Oblong investors having an equity stake in a company that is focused on developing and commercializing AI-centered technology and solutions that could transform how real estate is monitored and maintained under the leadership of a world-class team with decades of domain expertise spanning machine learning/AI, software systems, applied physics, advanced sensors, user-centered design, and building maintenance.”

“Dwellwell has created disruptive patented IoT technologies to address a critical need, the deployment of comprehensive, smarter maintenance solutions for residential real estate, an asset class worth over $40T in the U.S. alone,” says Dan Simpkins, CEO, Dwellwell Analytics. “Combining with Oblong’s team will enable us to scale our company and more rapidly meet the needs of the real estate community. This merger will provide resources that Dwellwell needs to achieve its long-term objective, to be the leading provider of smart maintenance products.”

Both parties are currently completing their respective due diligence reviews and are continuing to negotiate the terms of a Definitive Merger Agreement. Accordingly, Oblong cannot provide any assurance that it and Dwellwell will successfully negotiate and enter into a Definitive Merger Agreement or that it will effect the Merger with Dwellwell or, even if it is able to consummate such a Merger, that the terms of any such Merger will be on the terms set forth in the Letter of Intent. The Merger would be subject to board and shareholder approval, regulatory approval, each party satisfying a net cash closing condition and other customary closing conditions.

Important Information About the Proposed Transaction and Where to Find It

This press release relates to a proposed transaction between Oblong, Inc., a Delaware corporation (“Oblong”), and Dwellwell Analytics, Inc., a Delaware corporation (“Dwellwell”) (the “proposed transaction”). If the parties enter into a definitive merger agreement, Oblong intends to file a registration statement on Form S-4 (the “Form S-4”) with the U.S. Securities and Exchange Commission (“SEC”), which will include a preliminary prospectus and proxy statement of Oblong in connection with the proposed transaction, referred to as a proxy statement/prospectus. When and if available, a proxy statement/prospectus will be sent to all Oblong stockholders as of a record date to be established for voting on the transaction and to the stockholders of Dwellwell. Oblong also will file other documents regarding the proposed transaction with the SEC.

Before making any voting decision, investors and security holders are urged to read the registration statement, the proxy statement/prospectus, and amendments thereto, and the definitive proxy statement/prospectus in connection with Oblong’s solicitation of proxies for its stockholders’ meeting to be held to approve the transaction, and all other relevant documents filed or that will be filed with the SEC in connection with the proposed transaction as and if they become available because they will contain important information about Oblong, Dwellwell and the proposed transaction.

Investors and securityholders will be able to obtain free copies of the registration statement, the proxy statement/prospectus and all other relevant documents filed or that will be filed with the SEC by Oblong through the website maintained by the SEC at www.sec.gov.

The documents filed by Oblong with the SEC may also be obtained free of charge at Oblong’s website at www.oblong.com or upon written request to: Oblong, 110 16th Street, Suite 1400-1024, Denver, CO 80202.

NEITHER THE SEC NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE TRANSACTIONS DESCRIBED IN THIS PRESS RELEASE, PASSED UPON THE MERITS OR FAIRNESS OF THE TRANSACTION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THIS PRESS RELEASE. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

Forward looking and cautionary statements

This press release contains 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 regarding the terms of the proposed transaction, the entry into a definitive merger agreement, the filing of a registration statement in connection with the proposed transaction, the benefits of the proposed transaction, the products under development by Dwellwell and the markets in which it plans to operate, the advantages of Dwellwell’s technology, Dwellwell’s competitive positioning, and Dwellwell’s growth plans and strategies. 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 that may cause actual results in future periods to differ materially from such statements, which include, but are not limited to:

• the risk that the proposed transaction may not be completed in a timely manner or at all, which may adversely affect the price of Oblong’s securities;

• the failure to satisfy the conditions to the consummation of the proposed transaction, including the adoption of the merger agreement by the shareholders of Oblong;

• the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;

• the effect of the announcement or pendency of the proposed transaction on Oblong’s and Dwellwell’s business relationships, performance, and business generally;

• risks that the proposed transaction disrupts current plans of Oblong and Dwellwell and potential difficulties in Oblong’s and Dwellwell’s employee retention as a result of the proposed transaction;

• the outcome of any legal proceedings that may be instituted against Dwellwell or against Oblong related to the merger agreement or the proposed transaction;

• failure to realize the anticipated benefits of the proposed transaction;

• the inability to meet and maintain the listing of Oblong’s securities (or the securities of the post-combination company) on Nasdaq;

• the risk that the price of Oblong’s securities (or the securities of the post-combination company) may be volatile due to a variety of factors, including changes in the competitive industries in which Oblong and Dwellwell operate, variations in performance across competitors, changes in laws, regulations, technologies that may impose additional costs and compliance burdens on Oblong and Dwellwell’s operations, global supply chain disruptions and shortages, national security tensions, and macro-economic and social environments affecting Oblong and Dwellwell’s business and changes in the combined capital structure;

• the inability to implement business plans, forecasts, and other expectations after the completion of the proposed transaction, and identify and realize additional opportunities;

• the risk that Dwellwell has a limited operating history;

• the risk that the post-combination company may never achieve or sustain profitability;

• the risk that Dwellwell, Oblong and the post-combination company may be unable to raise additional capital on acceptable terms to finance its operations and remain a going concern;

• the risk that the post-combination company experiences difficulties in managing its growth and expanding operations;

• the risk that competitors develop competitive ambient sensing technology that adversely affect Dwellwell’s market position;

• the risk that Dwellwell’s future patent applications may not be approved or may take longer than expected, and Dwellwell may incur substantial costs in enforcing and protecting its intellectual property;

• the risk that Dwellwell’s estimates of market demand may be inaccurate; and

• other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in Oblong’s Annual Report on Form 10-K for the year ended December, 31, 2023 (the “2023 Form 10-K”) and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, as such factors may be updated from time to time in Oblong’s filings with the SEC, the registration statement on Form S-4 and the proxy statement/prospectus contained therein. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.

Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. Neither Oblong nor Dwellwell gives any assurance that either Oblong or Dwellwell or the post-combination company will achieve its expected results. Neither Oblong nor Dwellwell undertakes any duty to update these forward-looking statements, except as otherwise required by law.

Participants in the Solicitation

Oblong and Dwellwell and their respective directors and officers and other members of management may, under SEC rules, be deemed to be participants in the solicitation of proxies from Oblong’s stockholders with the proposed transaction and the other matters set forth in the registration statement. Information about Oblong’s directors and executive officers is set forth in Oblong’s filings, including Oblong’s 2023 Form 10-K. Additional information regarding the direct and indirect interests, by security holdings or otherwise, of those persons and other persons who may be deemed participants in the proposed transaction may be obtained by reading the proxy statement/prospectus regarding the proposed transaction when it becomes available. You may obtain free copies of these documents as described above under “Important Information About the Proposed Transaction and Where to Find It.”

No Offer or Solicitation

This press release is not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and is not intended to and does not constitute an offer to sell or the solicitation of an offer to buy, sell or solicit any securities or any proxy, vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be deemed to be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.

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 meeting technology platform that offers simultaneous content sharing to optimize audience engagement and situational awareness. For more information, visit www.oblong.com and Oblong’s Twitter and Facebook pages.

About Dwellwell Analytics

Dwellwell is the only comprehensive Check Engine Light for Homes™. The powerful technology diagnoses and alerts residential property owners and managers to irregularities in the performance of an entire residential building, including HVAC, electrical, plumbing, and even environmental concerns. The SaaS platform provides early detection of issues before they lead to system failure or a catastrophic event. With its simple plug-and-play installation capability, Dwellwell proactively diagnoses issues across an entire building, helping multifamily and short-term rental owners streamline maintenance, generate cost savings, improve NOI, and ensure resident/guest comfort. For more information, visit www.dwellwell.ai.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240604867764/en/

Investor Relations:

David Clark

investors@oblong.com

(213) 683-8863 ext. 5

Source: Oblong, Inc.

FAQ

What is the Oblong (OBLG) and Dwellwell Analytics merger about?

The merger involves Oblong acquiring 100% of Dwellwell Analytics, combining their AI technologies to enhance property management solutions.

How will the equity be distributed post-merger between Oblong and Dwellwell?

Dwellwell security holders will own 67% and Oblong shareholders will own 33% of the combined company.

What technologies does Dwellwell Analytics bring to Oblong (OBLG)?

Dwellwell provides patented multi-sensing technology and AI for predictive maintenance in residential properties.

What are the key benefits of the Oblong (OBLG) and Dwellwell merger?

The merger could revolutionize property maintenance, reduce operational costs, and provide entry into the $40 trillion U.S. residential real estate market.

What approvals are needed to complete the Oblong (OBLG) and Dwellwell merger?

The merger requires board, shareholder, and regulatory approvals, along with satisfying net cash closing conditions.

What percentage of the combined company will Oblong (OBLG) shareholders own post-merger?

Oblong shareholders will own 33% of the combined company post-merger.

Is the Oblong (OBLG) and Dwellwell merger guaranteed to happen?

No, the merger is non-binding and subject to various approvals and conditions.