[10-Q] TEN Holdings, Inc. Quarterly Earnings Report
TEN Holdings (XHLD) reported Q3 2025 results showing modest revenue growth but significantly wider losses. Revenue was $543,000, up 1.5% year over year, while net loss widened to $1,987,000 from $975,000. Gross profit was $405,000. Operating expenses rose to $2,332,000, driven mainly by public‑company costs and platform development, pushing loss from operations to $1,927,000.
For the nine months, revenue was $2,398,000 (down 10.7%) as virtual and hybrid event revenue fell to $2,059,000, partly offset by physical events at $339,000. Net loss was $9,607,000. SG&A included $3,517,000 of stock‑based compensation. Adjusted EBITDA for Q3 was a loss of $1,778,000.
Liquidity remains tight: cash was $310,000, current liabilities were $6,520,000, and short‑term related‑party loans totaled $4,572,000. Shareholders’ equity improved to $3,784,000, with 36,637,646 shares outstanding at quarter‑end and 44,592,464 shares outstanding as of October 30, 2025. The company disclosed “substantial doubt” about its ability to continue as a going concern. TEN can sell up to $20 million of stock under a Lincoln Park agreement; in Q3 it sold 1,458,859 shares for $426,000, and later issued 4,454,818 additional shares for $945,542.
- None.
- Going concern disclosed: management cited “substantial doubt” based on losses and cash flow.
- Losses widened materially: Q3 net loss $1.99M vs $0.98M; YTD loss $9.61M vs $1.80M.
- Tight liquidity: cash $310k vs current liabilities $6.52M; reliance on related‑party short‑term debt $4.57M.
- Dilution risk: equity sales under $20M purchase agreement and subsequent issuances increased outstanding shares.
Insights
Losses widened; going concern disclosure and tight liquidity.
TEN Holdings posted Q3 revenue of
Liquidity is constrained: cash was
Execution depends on maintaining event demand and accessing external financing. Subsequent share issuances increase outstanding shares, and actual cash runway hinges on future drawdowns under the purchase agreement and operating performance.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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As
of October 30, 2025, there were
TEN Holdings, Inc.
Form 10-Q
For the Quarterly Period Ended September 30, 2025
Contents
| Page | |||
| Part I | Financial Information | 1 | |
| Item 1 | Financial Statements | 1 | |
| Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 | 1 | ||
| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) | 2 | ||
| Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (Unaudited) | 3 | ||
| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (Unaudited) | 5 | ||
| Notes to Unaudited Condensed Consolidated Financial Statements | 6 | ||
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 | |
| Item 3 | Quantitative and Qualitative Disclosures about Market Risk | 29 | |
| Item 4 | Controls and Procedures | 29 | |
| Part II | Other Information | 30 | |
| Item 1 | Legal Proceedings | 30 | |
| Item 1A | Risk Factors | 30 | |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 31 | |
| Item 3 | Defaults Upon Senior Securities | 31 | |
| Item 4 | Mine Safety Disclosures | 31 | |
| Item 5 | Other Information | 31 | |
| Item 6 | Exhibits | 32 | |
| Signatures | 33 |
| i |
TEN Holdings, Inc.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Advance - related party | — | |||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets: | ||||||||
| Advance - non-current - related party | — | |||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Intangible assets, net | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Short-term loans - related party | ||||||||
| Total Current Liabilities | ||||||||
| Non-current Liabilities: | ||||||||
| Non-current operating lease liabilities | ||||||||
| Total Non-current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Shareholders’ Equity: | ||||||||
| Preferred stock; $ | - | - | ||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Shareholders’ Equity (Deficit) | ( | ) | ||||||
| Total Liabilities & Shareholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 1 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended Sep 30, | Nine Months Ended Sep 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | ||||||||||||||||
| Depreciation expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expenses, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax credit | — | ( | ) | — | ( | ) | ||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to common shareholders, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average number of common stocks outstanding used to compute net loss per share, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 2 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIENCY)
(in thousands, except share data)
(Unaudited)
| Stock Class | Additional | Total
Stockholders’ | ||||||||||||||||||
| Common Stocks | Paid-In | Accumulated | Equity | |||||||||||||||||
| Shares | Amount | Capital | deficit | (Deficit) | ||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( | ) | $ | | |||||||||||||
| Shares issued for cash | - | |||||||||||||||||||
| Issuance of underwriter shares | - | - | - | - | ||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock Class | Additional | Total Stockholders’ | ||||||||||||||||||
Common Stocks | Paid-In | Accumulated | Equity | |||||||||||||||||
| Shares | Amount | Capital | deficit |
(Deficit) | ||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Issuance of shares upon initial public offering, net off offering costs | -* | - | ||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||
| Issuance of shares in connection with consulting agreement | - | - | - | - | ||||||||||||||||
| Issuance of shares in settlement of claims, pursuant to Section 3(a)(10) | - | |||||||||||||||||||
| Issuance of shares in settlement of claims | - | |||||||||||||||||||
| Share issued for cash | - | |||||||||||||||||||
| Issuance of underwriter shares | - | - | - | - | ||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| * |
| 3 |
| Stock Class | Additional | Total Stockholders’ | ||||||||||||||||||
Common Stocks | Paid-In | Accumulated | Equity | |||||||||||||||||
| Shares | Amount | Capital | deficit |
(Deficit) | ||||||||||||||||
| Balance, June 30, 2024 | $ | $ | — | $ | $ | | ||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2024 | $ | $ | — | $ | ( | ) | $ | ( | ) | |||||||||||
| Stock Class | Additional | Total Stockholders’ | ||||||||||||||||||
Common Stocks | Paid-In | Accumulated | Equity | |||||||||||||||||
| Shares | Amount | Capital | deficit |
(Deficit) | ||||||||||||||||
| Balance, December 31, 2023 | $ | $ | — | $ | $ | | ||||||||||||||
| Balance | $ | $ | — | $ | $ | | ||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2024 | $ | $ | — | $ | ( | ) | $ | ( | ) | |||||||||||
| Balance | $ | $ | — | $ | ( | ) | $ | ( | ) | |||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 4 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Noncash lease expenses | ||||||||
| Noncash interest expenses | — | |||||||
| Stock-based compensation | — | |||||||
| Loss on extinguishment of debt | — | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Advance - related party | ( | ) | — | |||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Income tax receivable | — | |||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | - | ( | ) | |||||
| Purchase of capitalized internal-use software | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from short-term loans - related party | ||||||||
| Repayments of short-term loans - related party | ( | ) | - | |||||
| Proceed from issuance of shares | - | |||||||
| Payment for deferred offering costs | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of period | ||||||||
| Cash and cash equivalents at end of period | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| 5 |
TEN HOLDINGS, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. Organization, Nature of Business
TEN Holdings, Inc. (the “Company”) was incorporated on February 12, 2024 in Pennsylvania to act as the holding company of Ten Events, Inc. (“Ten Events”), which was incorporated in Pennsylvania on December 5, 2011 and is an operating entity. Ten Events was formed for the purpose of planning, producing, and broadcasting virtual and hybrid events using its event platform, the Xyvid Pro Platform, and delivering physical events. Ten Events’ platform provides a dynamic, interactive, and engaging virtual event experience to its clients and enables clients to engage and interact with their target audience anywhere in the world through event webcasting.
At
incorporation, the Company issued
On
July 24, 2024, the Company changed its domicile of incorporation from the Commonwealth of Pennsylvania to the State of Nevada. Thereupon,
each share of common stock, no par value per share, of the Company that was issued and outstanding was automatically converted into a
share of common stock, par value $
On
October 9, 2024, the
Company’s sole director and majority shareholder approved a reverse stock split of the Company’s issued
The reorganization involves entities under common control. Under the guidance in ASC 805-50, for transactions between entities under common control, the assets, liabilities, and results of operations are recognized at their carrying amounts on the date of the restructuring, which required retrospective combination of the Company and Ten Events. The Company’s consolidated financial statements have been prepared as if the existing corporate structure had been in existence throughout all periods presented rather than from the incorporation. This includes a retrospective presentation for all equity related disclosures, which were under common control throughout the relevant periods as a single economic enterprise although legal parent-subsidiary relationship were not established.
Going concern
The Company has evaluated whether there are certain conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
The Company’s consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to attract and retain revenue generating customers, acquire new customer contracts, and additional financing.
The
Company has incurred and continues to incur losses from operations as well as negative cash flow from operations. For the nine months
ended September 30, 2025, the Company had a net loss of $
| 6 |
The Company may consider obtaining additional financing in the future through the issuance of the Company’s common stock, through other equity or debt financing, or other means. The Company, however, is dependent upon its ability to obtain new revenue generating customer contracts and its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements.
The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the Company’s financial position, results of operations, shareholders’ equity, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2025 or any other future interim periods.
As an emerging growth company, the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The Company has elected to delay adoption of certain new or revised accounting standards. As a result, the Company’s consolidated financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective date for new or revised accounting standards that are applicable to public companies.
Basis of Consolidation
The Company consolidates entities in which it has a controlling financial interest: Ten Events and V-Cube USA Acquisition Company, LLC. Intercompany balances and transactions have been eliminated in such consolidation.
Use of Estimates
The preparation of the consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenue and expense during the reporting period. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, allowance for credit losses, useful lives of property and equipment and capitalized software, the carrying value of operating lease right-of-use assets and impairment of long-lived assets. Actual results could differ from those estimates.
Revenue Recognition
The Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented in the consolidated financial statements. To determine the appropriate amount of revenue to be recognized in accordance with ASC 606, the Company follows a five-step model as follows:
1 – Identification of the contract with a customer
2 – Identification of the performance obligation in the contract
3 – Determination of the transaction price
4 – Allocation of the transaction price to the performance obligation in the contract
5 – Recognition of revenue when, or as, a performance obligation is satisfied
| 7 |
Hybrid, virtual and physical event revenue
Revenue from hybrid, virtual and physical events is generated from producing and delivering hybrid or virtual events using the Company’s platform, the Xyvid Pro Platform, or delivering physical events. Virtual events are online events and conferences where participants interact in an online environment, and physical events are events where participants meet in a physical location.
The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. The transaction price is generally fixed at contract inception and is based on the agreed upon rates stated in the contract which indicates the amount of consideration the Company expects to be entitled to in exchange for satisfaction of performance obligation (i.e., delivering events). The amount on the final invoice depends on the actual work performed and might differ from the amount stated in the initial contract. When there is variable consideration included in the transaction price if, in the management’s judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur, the Company and the customer agree on the price on the final invoice, and revenue is recognized based on the amount on the final invoice. None of our contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government entities.
Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised services to the customer, which is upon completion of the event. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those services.
The Company sometimes enters into the contract with a bundle of events. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price. The Company’s contracts with multiple performance obligations are generally sold over the same contract terms as that of the contract with single performance obligation and have the same pattern of transferring services to the customer, and therefore, they are accounted for as one combined performance obligation in the context of the contract.
From time to time, the Company engages subcontractors for delivering events. The Company assesses and records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. For events delivered with subcontractors, the Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified vendors, (ii) has the discretion to select the vendors and establish their price and duties, and (iii) bears the risk for services that are not fully paid for by its customers.
Segment Information
The
Company currently operates its business as
Concentration of Customers and Vendors
The
consolidated balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash and accounts
receivable. The Company continuously evaluates the credit worthiness of its customers’ financial condition and generally does not
require collateral. The Company maintains cash balances in bank accounts that may, at times, exceed Federal Deposit Insurance Corporation
(“FDIC”) limits of $
For
the nine months ended September 30, 2025 and 2024, there was one customer who accounted for more than
For
the nine months ended September 30, 2025 and 2024, there was one supplier and there were two suppliers, respectively, who accounted for
more than
| 8 |
Cash and Cash Equivalents
The Company considers all highly liquid short-term investments purchased with an initial maturity date of three months or less to be cash equivalents.
Accounts Receivable, Net
Accounts receivable primarily consist of the amounts billed and currently due from customers, net of an allowance for credit losses, if recorded. When the Company has an unconditional right to payment, subject only to the passage of time, the right is treated as receivable. The Company’s accounts receivable balances are unsecured, bearing no interest. Fees billed in advance of the related contractual term represent contract liabilities and are presented as deferred revenue. Typical payment terms provide for customer payment within 30 to 90 days of the invoice date.
Accounts receivable are subject to collection risk. The Company performs evaluations of its customers’ financial positions and generally extends credit on account, without collateral.
At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist.
The
allowance estimate is derived from a review of the Company’s historical losses on the aging of receivables. This estimate is adjusted
for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other
factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate
the expected allowance for credit losses as the Company’s customers’ composition have remained constant. The Company did
The Company writes off receivables when there is information that indicates the debtor is facing significant financial difficulty and there is no possibility of recovery. If any recoveries are made from any accounts previously written off, they will be recognized in income or an offset to credit loss expense in the year of recovery. The Company did not have any write-offs of receivables during the nine months ended September 30, 2025 and 2024.
The
amount of accounts receivable included at December 31, 2024 and 2023 as the beginning of each period presented was $
Deferred Offering Costs
Deferred offering costs include specific incremental costs directly attributable to the Company’s initial public offering of securities. Deferred offering costs exclude management salaries or other general and administrative expenses. These costs are being deferred and were charged against the gross proceeds of the offering. Deferred offering costs are included in prepaid expenses and other current assets in the Consolidated Balance Sheets.
Upon the completion of the initial public offering, the deferred offering costs were fully charged to additional paid-in capital, and there was no balance as of September 30, 2025.
| 9 |
Property and Equipment, Net
Property and equipment are recorded at the cost less accumulated depreciation. Depreciation is computed using the straight-line method. The estimated useful lives of assets are as follows:
Schedule of Estimated Useful Lives of Assets
| Property and Equipment | Estimated Useful Life | |
| Computer and equipment | ||
| Furniture and fixture | ||
| Leasehold improvement | Shorter of 10 years or lease term |
Repair and maintenance costs are expensed as incurred.
Intangible Assets
Intangible assets consist of capitalized software. The Company accounts for its software development costs in accordance with the guidance in ASC 350-40, Internal-use software. The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training, data conversion and maintenance costs are expensed as incurred. Costs of capitalized software are amortized on a straight-line basis over the estimated period of benefit, which is approximately five to seven years, and are recorded in cost of revenue in the Consolidated Statements of Operations.
Impairment or Disposal of Long-Lived Assets
Long-lived assets used in operations are reviewed for impairment whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. For long-lived assets to be held and used, the Company recognizes an impairment loss only if the carrying amount is not recoverable when compared to the Company’s undiscounted cash flows, and the impairment loss is measured based on the difference between the carrying amount and fair value. Long-lived assets held for sales are reported at the lower of cost or fair value less costs to sell.
Leases
Leases are comprised of operating leases for office space. In accordance with FASB ASC Topic 842, Leases, the Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, current portion of operating lease liabilities, and non-current operating lease liabilities in the Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.
For leases with terms greater than 12 months, the Company records a ROU asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, or the Company’s collateralized incremental borrowing rate. The implicit rate within the Company’s leases is generally not determinable and, therefore, the incremental borrowing rate at lease commencement is utilized to determine the present value of lease payments. The Company estimates its incremental borrowing rate based on third-party lender quotes to obtain secured debt in a like currency for a similar asset over a timeframe similar to the term of the lease. For those contracts that include fixed rental payments for both the use of the asset (“lease costs”) as well as for other occupancy or service costs relating to the asset (“non-lease costs”), the Company generally includes both the lease costs and non-lease costs in the measurement of the lease asset and liability.
The
Company accounts for each lease and any non-lease components associated with that lease as a single lease component for all asset classes.
Lease expenses for the Company’s operating leases are recognized on a straight-line basis over the lease term except for variable
lease costs, which are expensed as incurred. The Company does not recognize ROU assets and operating lease liabilities that arise from
leases with an initial lease term of
| 10 |
Fair Value Measurements
The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC Topic 820 Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.
ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement.
The levels of the fair value hierarchy are as follows:
Level 1: Quoted price in an active market for identical assets or liabilities.
Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable.
Level 3: Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions).
The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable, and short-term loans approximate fair values due to the short-term nature of these instruments.
Deferred Revenue
Contract
liabilities consist of deferred revenue. Revenue is deferred when the Company has the right to invoice in advance of performance under
a customer contract. The current portion of deferred revenue balances is recognized over the next 12 months. The amount of revenue recognized
during the nine months ended September 30, 2025 and the year ended December 31, 2024 that was included in deferred revenue at the beginning
of each period was $
Cost of Revenue
Cost of revenue primarily consists of costs paid to its employees for delivering events and costs of renting equipment and studio.
Advertising and Marketing Costs
Advertising
and marketing costs are expensed as incurred and are included in selling, general and administrative expenses in the Consolidated Statement
of Operations. For the nine months ended September 30, 2025 and 2024, these costs were $
Employee Benefit Plan
Substantially
all employees are eligible to participate in the 401(k) defined contribution plan which is sponsored by the Company. Participants may
contribute a portion of their compensation to the plan up to the maximum amount permitted under Section 401(k) of the Internal Revenue
Code. At the Company’s discretion, the Company can match a portion of the participants’ contributions. During the nine months
ended September 30, 2025 and 2024, the Company recognized $
Income Taxes
The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the differences between the financial statement and tax basis of assets, liabilities and net operating loss by using enacted tax rate in effect for the fiscal year in which the differences are expected to reverse. The effect of a change in tax rate on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
| 11 |
The Company recognizes deferred tax assets to the extent that these assets are believed to be more likely than not to be realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.
The Company files tax returns in the tax jurisdictions of the United States. Tax benefits for uncertain tax positions are based upon management’s evaluation of the information available at the reporting date. To be recognized in the financial statements, a tax benefit must be at least more likely than not of being sustained based on technical merits. The benefit for positions meeting the recognition threshold is measured as the largest benefit more likely than not of being realized upon settlement with a taxing authority that has full knowledge of all relevant information.
Net Loss per Share
Basic net loss per common stock is calculated by dividing the net loss by the weighted-average number of common stocks outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per common stock is computed by dividing the net loss by the weighted-average number of common stocks and potentially dilutive securities outstanding for the period determined using the treasury stock method.
Recently Issued Accounting Pronouncements
The following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board (“FASB”) which relate to or could relate to the Company as concerns the Company’s normal ongoing operations or the industry in which the Company operates.
In July 30, 2025, the FASB issued ASU No. 2025-05 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provide (1) all entities with a practical expedient and (2) entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The requirements are effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted, and entities should apply the amendments prospectively. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03 Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires public business entities to disclose, for interim and annual reporting periods, additional information about certain income statement expense categories. The requirements are effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Entities are permitted to apply either the prospective or retrospective transition methods. The Company is currently evaluating the impact that the adoption of this ASU will have on its consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires entities to disclose specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. It also requires entities to disclose certain information about income taxes paid and other disclosures related to income and income tax expense from continuing operations. The standard is effective for fiscal years beginning after December 15, 2024 for public business entities and for fiscal years beginning after December 15, 2025 for all other entities. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements.
| 12 |
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). This ASU incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification (“ASC”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of ASC Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the ASC with the SEC’s regulations. The ASU has an unusual effective date and transition requirements since it is contingent on future SEC rule setting. If the SEC fails to enact required changes by June 30, 2027, this ASU is not effective for any entities. Early adoption is not permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statement
3. Property and Equipment, Net
As of September 30, 2025 and December 31, 2024, property and equipment consisted of the following:
Schedule of Property and Equipment
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Computer and equipment | $ | $ | ||||||
| Furniture and fixture | ||||||||
| Leasehold improvement | ||||||||
| Total property and equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
The
Company recognized depreciation expenses on property and equipment of $
4. Intangible Assets, Net
The
Company’s intangible assets consist of internally developed capitalized software. As of September 30, 2025 and December 31, 2024,
the balance of the capitalized software was $
As of September 30, 2025 and December 31, 2024, intangible assets consisted of the following:
Schedule of Intangible Assets
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Capitalized software | $ | $ | ||||||
| Under the application development stage | ||||||||
| Total intangible assets | ||||||||
| Less: Accumulated amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
The
Company recognized amortization expenses on intangible assets of $
| 13 |
5. Leases
The Company has an operating lease for its office space in Pennsylvania. As of September 30, 2025 and December 31, 2024, the following amounts were recorded in the Consolidated Balance Sheets relating to the Company’s operating lease.
Schedule of Operating Lease
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Right-of-Use Assets | ||||||||
| Operating lease assets | $ | $ | ||||||
| Lease Liabilities | ||||||||
| Operating lease liabilities - Current | $ | $ | ||||||
| Operating lease liabilities - Non-current | $ | $ | ||||||
The following table summarizes the contractual maturities of operating lease liabilities as of September 30, 2025:
Schedule of Maturities of Operating Lease Liabilities
| 2025 (remaining) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less amounts representing interest | ( | ) | ||
| Present value of lease payments | ||||
| Less: current portion | ( | ) | ||
| Non-current lease liabilities | $ |
The following table illustrates information for the Company’s operating lease during the nine months ended September 30, 2025 and the year ended December 31, 2024:
Schedule of Operating Lease Cost
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Total operating lease cost | $ | $ | ||||||
| Cash paid for amounts included in the measurement of the operating lease liability | $ | $ | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
6. Commitments and Contingencies
Guarantees and Commitments
There were no commitments under certain purchase or guarantee arrangements as of September 30, 2025 and December 31, 2024.
Legal Matters
From time to time, in the normal course of business, the Company may be subject to various legal matters such as threatened or pending claims or proceedings. There were no such material matters as of September 30, 2025 and December 31, 2024.
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Indemnification
In the ordinary course of business, the Company often includes standard indemnification provisions in its arrangements with third parties. To date, the Company has not paid any material claims or been required to defend any material actions related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.
7. Accrued Expenses
As of September 30, 2025 and December 31, 2024, accrued expenses include the following components:
Schedule of Accrued Expenses
| September 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued operating expenses | $ | $ | ||||||
| Accrued payroll expenses | ||||||||
| Other accrued expenses | ||||||||
| Total accrued expenses | $ | $ | ||||||
8. Short-term Loans – Related Party
Short-term loans as of September 30, 2025 and December 31, 2024 consisted of the followings:
Schedule of Short-term Loans
| September 30, | December 31, | |||||||||||||
| Interest Rate | Maturity | 2025 | 2024 | |||||||||||
| V-cube Inc. | % | $ | $ | |||||||||||
| Wizlearn Technologies Pte. Ltd. | % | |||||||||||||
| Pave Education Pte. Ltd. | % | — | ||||||||||||
| Naoaki Mashita | % | — | ||||||||||||
| Total short-term loans | $ | $ | ||||||||||||
9. Net Loss per Share
The following table sets forth the computation of basic and diluted net loss per share:
Schedule of Net Loss per Share
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Basic and diluted net loss per common share: | ||||||||||||||||
| Net loss attributable | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average common shares outstanding – basic and diluted | ||||||||||||||||
| Net loss per common share – basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
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The following potentially dilutive securities were excluded from the computation of diluted net loss per share calculations for the periods presented because the impact of including them would have been anti-dilutive:
Schedule of Dilutive Securities Excluded from Computation of Net Loss
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Common stock options | - | - | ||||||||||||||
10. Shareholders’ Equity
Preferred Stock
As
of September 30, 2025, the Company has authorized
Common Stock
As
of September 30, 2025, the Company has authorized
On
October 9, 2024, the Company’s sole director and majority shareholder approved a reverse stock split of the Company’s issued
On
December 23, 2024, the convertible promissory note dated September 5, 2024, held by Naoaki Mashita, the Chief Executive Officer of V-Cube,
Inc., the principal shareholder of the Company, having the outstanding principal balance of $
On
February 18, 2025, the Company completed its initial public offering (“IPO”) of
On
February 19, 2025, Spirit Advisors, LLC (“Spirit Advisors”) elected to exercise certain warrants in full that were issued
to it by the Company in partial consideration for consulting services rendered in connection with the IPO. The net shares issued pursuant
to such exercise were
On
March 17, 2025, the Company’s Board of Directors approved a share repurchase program under which the Company may repurchase up
to $
On
April 23, 2025, the Company entered into a Settlement Agreement and Stipulation (the “Settlement Agreement”) with
Sunpeak Holdings Corporation (“SHC”), which became effective on April 30, 2025, to settle outstanding claims owed to
SHC. Pursuant to the Settlement Agreement, SHC has agreed to purchase certain outstanding payables between the Company and
designated vendors of the Company totaling approximately $
| 16 |
On
June 23, 2025, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Lincoln Park Capital
Fund, LLC (“Lincoln Park Capital”). Under the Purchase Agreement, the Company may, from time to time over a 24-month period,
sell to Lincoln Park Capital up to an aggregate of $
11. Equity incentive plan
On
September 27, 2024, the Company’s Board of Directors approved the Company’s 2024 Equity Incentive Plan (the “Equity
Incentive Plan”). On October 10, 2024, the Company granted stock options to certain individuals who were the Company’s directors
and employees to purchase an aggregate of
The fair value of the stock options was estimated using the Black-Scholes option-pricing model. The following table summarizes the significant assumptions used to estimate the fair value of the stock option.
Schedule of Assumptions Used to Estimate the Fair Value of the Stock Option
| Expected term | ||||
| Expected volatility | % | |||
| Expected dividend rate | % | |||
| Risk-free rate | % |
The
Company recognized stock-based compensation expenses of $
The following is a summary of stock option activity under the Company’s Equity Incentive Plan during the nine months ended September 30, 2025:
Schedule of Stock Option Activity
| Number of shares | Weighted-Average Grant-Date Fair Value | Weighted-average remaining contractual term (in years) | ||||||||||
| Unvested balance as of December 31, 2024 | $ | | ||||||||||
| Granted | ||||||||||||
| Vested | ( | ) | ||||||||||
| Unvested balance as of September 30, 2025 | $ | |||||||||||
As
of September 30, 2025, the Company’s unrecognized stock-based compensation expense for unvested options was $
| 17 |
12. Revenue
Disaggregation of Revenue
The tables below reflect revenue by major source and timing of transfer of goods and services for the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024. The Company had no revenue derived from geographical regions outside of the U.S. during the nine months ended September 30, 2025 and 2024. All revenue during the nine months ended September 30, 2025 and 2024 was recognized when the performance obligation was satisfied at point in time.
Schedule of Disaggregation of Revenue
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Delivered events - Virtual and Hybrid | $ | $ | $ | $ | ||||||||||||
| Delivered events - Physical | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table summarizes the activity in deferred revenue during the nine months ended September 30, 2025 and the year ended December 31, 2024:
Schedule of Activity In Deferred Revenue
Nine Months Ended September 30, | Year Ended December 31, | |||||||
| 2025 | 2024 | |||||||
| Balance, beginning of year | $ | $ | ||||||
| Revenue earned | ( | ) | ( | ) | ||||
| Deferral of revenue | ||||||||
| Balance, end of year | $ | $ | ||||||
13. Cost of Revenue
Disaggregation of Cost of revenue
The table below reflects cost of revenue by major source for the three months ended September 30, 2025 and 2024 and for the nine months ended September 30, 2025 and 2024.
Schedule of Disaggregation of Cost of Revenue
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Delivered events - Virtual and Hybrid | $ | $ | $ | $ | ||||||||||||
| Delivered events - Physical | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
14. Consulting and Advisory Agreement
On July 18, 2025, the Company entered into a market
awareness agreement, dated as of June 27, 2025 (the “MCA Agreement”), with MicroCap Advisory, LLC (the “MC Advisor”),
pursuant to which the MC Advisor will provide investor communications and market awareness services to the Company for a six-month term.
The MC Advisor will develop and implement a multi-step investor outreach strategy, including positioning, media planning, and campaign
execution. As compensation, the MC Advisor will receive a $
On
February 5, 2024, the V-Cube, Inc., the majority shareholder of the Company, entered into a consulting and services agreement with Spirit
Advisors, which agreement was assigned to and assumed by the Company on September 5, 2024. Pursuant to the agreement, the Company agreed
to compensate Spirit Advisors with warrants, which became exercisable upon completion of the Company’s IPO for the period of
The
warrants became exercisable upon the completion of the IPO. On February 19, 2025, Spirit Advisors elected to exercise its warrants in
full. The net shares issued under this exercise were
| 18 |
15. Related Party
The related parties that had material balances as of September 30, 2025 and December 31, 2024 and transactions for the nine months ended September 30, 2025 and 2024 consist of the following:
Schedule of Related Parties Material Balances and Transactions
| Name of Related Party | Nature of Relationship at September 30, 2025 | |
| V-Cube, Inc. | ||
| Wizlearn Technologies Pte. Ltd. | ||
| Naoaki Mashita |
| Name of Related Party | Nature of Relationship at December 31, 2024 | |
| Dyventive, Inc | ||
| GHDLCK, LLC | ||
| PharMethod, Inc | ||
| V-Cube, Inc. | ||
| Wizlearn Technologies Pte. Ltd. |
The Company had the following related party balances as of September 30, 2025 and December 31, 2024:
Schedule of Related Party Balances
| September 30, | December 31, | |||||||||
| Nature of transactions | 2025 | 2024 | ||||||||
| Advance to related party: | ||||||||||
| V-Cube, Inc. | Advance payment made for IT outsourcing and market advisory services | — | ||||||||
| V-Cube, Inc. | Advance payment made for marketing and business development | — | ||||||||
| V-Cube, Inc. | Advance payment made for consultancy services | — | ||||||||
| V-Cube, Inc. | Advance payment made for advisory services | — | ||||||||
| Payable due to related party: | ||||||||||
| GHDLCK, LLC | Accounts payable related to rental expenses | — | ||||||||
| PharMethod, Inc | Accounts payable related to operating expenses | — | ||||||||
| Short-term loans due to related parties: | ||||||||||
| V-cube Inc. | Loan payable for working capital | |||||||||
| Wizlearn Technologies Pte. Ltd. | Loan payable for working capital | |||||||||
| Pave Education Pte. Ltd. | Loan payable for working capital | — | ||||||||
| Naoaki Mashita | Loan payable for working capital | — | ||||||||
| 19 |
Advance
— related party balances are unsecured and bearing no interest, including $
The Company had the following related party transactions during the nine months ended September 30, 2025 and 2024:
Schedule of Related Party Transactions
| Nine Months Ended September 30, | ||||||||||
| Nature of transactions | 2025 | 2024 | ||||||||
| Revenue from related parties: | ||||||||||
| Dyventive, Inc | Sales from delivered events | $ | — | $ | ||||||
| PharMethod, Inc | Sales from delivered events | — | ||||||||
| Selling, General and Administrative Expenses with related party: | ||||||||||
| GHDLCK, LLC | Rental expense for the Company’s office | — | ||||||||
16. Subsequent Events
The Company has evaluated subsequent events after the consolidated balance sheet date through November 10, 2025, the date the consolidated financial statements were available for issuance. Management has determined that no significant events or transactions have occurred subsequent to the consolidated balance sheet date that require both recognition and disclosure in the consolidated financial statements, except those disclosed below.
Subsequent
to September 30, 2025, the Company issued
On
October 28, 2025, SHC initiated a share exchange of
| 20 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “might,” “will,” “should,” “would,” “could,” “likely,” “estimate,” “intend,” “continue,” “future,” “potential,” “believe,” “expect,” “plan,” “project,” “target,” “forecast,” “outlook,” or “anticipate,” and other similar words or phrases. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities Exchange Commission (the “SEC”) on March 28, 2025 (the “Annual Report”) .
Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this Quarterly Report on Form 10-Q. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.
The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Annual Report.
Business Overview
We are a provider of event planning, production, and broadcasting services headquartered in Pennsylvania. We mainly produce virtual and hybrid events and physical events. Virtual and hybrid events involve virtual and hybrid event planning, production and broadcasting services, and continuing education services, all of which are supported by our proprietary Xyvid Pro Platform. Physical events were added to our revenue streams, due to our corporate restructuring completed in fiscal year 2023, and mainly involve live streaming and video recording of physical events.
As of the date of this Quarterly Report on Form 10-Q, we primarily generate revenue from virtual and hybrid events delivered to corporate customers. We experienced an increase in our total revenue in the third quarter of fiscal year 2025, mainly due to a higher demand in physical events during the period vs the same period last year. For the nine months ended September 30, 2025 and 2024, we had total revenue of approximately $543,000 and $535,000, respectively, and net loss of approximately $1,987,000 and $975,000, respectively. For the nine months ended September 30, 2025 and 2024, the revenue generated from virtual and hybrid events was approximately $2,059,000 and $2,462,000, respectively, accounting for approximately 86% and 92% of our total revenue, respectively; and the revenue generated from physical events was approximately $339,000 and $224,000, respectively, accounting for approximately 14% and 8% of our total revenue, respectively.
Our mission is to deliver top-tier planning, production, and broadcasting services for virtual, hybrid and physical events. Our goal is to become a global leader in innovative virtual events that enhance engagement and connectivity, making impactful and memorable experiences accessible to all.
| 21 |
Key Financial Performance Indicators
Revenue
Our revenue is derived from the provision of virtual and hybrid events and physical events on our Xyvid Pro Platform.
Cost of revenue
Our cost of revenue is primarily driven by the costs paid to our employees for producing events and the costs of renting equipment and our studio.
Selling, general and administrative expenses
Selling, general and administrative expenses are primarily composed of personnel costs for sales and marketing staff and general corporate functions, computer and software costs, and advertising and marketing expenses.
We expect general and administrative expenses to fluctuate as a result of operating as a public company.
Operating profit and operating profit margin
Operating profit is the difference between our revenue and cost of revenue and selling, general and administrative expenses. Operating profit margin is the profit margin as a percentage of revenue.
Other income (expenses)
From time to time, we have non-recurring, non-operating gains and losses which are reflected through other income (expense) such as gains/losses of assets, non-cash valuation adjustments related to the 3(a)(10), impairment and or write-offs of investments.
Interest expenses
Interest expenses consist of interest expenses arising from borrowings.
| 22 |
Results of Operations
Comparison of Results of Operations for the three months ended September 30, 2025 and 2024
The following table sets forth our statements of operations for the three months ended September 30, 2025 and 2024:
(in thousands, except change % data)
| Three Months Ended September 30, | Change (2025 vs. 2024) | |||||||||||||||
| 2025($) | 2024($) | $ | YoY % | |||||||||||||
| Revenues | ||||||||||||||||
| Delivered events - Virtual and Hybrid | 491 | 490 | 1 | 0.2 | % | |||||||||||
| Delivered events - Physical | 52 | 45 | 7 | 15.6 | % | |||||||||||
| Total Revenues | 543 | 535 | 8 | 1.5 | % | |||||||||||
| Cost of revenues | 138 | 109 | 29 | 26.6 | % | |||||||||||
| Gross Profit | 405 | 426 | (21 | ) | (4.9 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | 2,185 | 1,311 | 874 | 66.7 | % | |||||||||||
| Depreciation expenses | 147 | 14 | 133 | 950.0 | % | |||||||||||
| Total operating expenses | 2,332 | 1,325 | 1,007 | 76.0 | % | |||||||||||
| Loss from operations | (1,927 | ) | (899 | ) | (1,028 | ) | 114.3 | % | ||||||||
| Other expenses, net | (1 | ) | (23 | ) | 22 | (95.7 | )% | |||||||||
| Interest expenses | (59 | ) | (62 | ) | 3 | (4.8 | )% | |||||||||
| Loss before income taxes | (1,987 | ) | (984 | ) | (1,003 | ) | 101.9 | % | ||||||||
| Income tax credit | - | (9 | ) | 9 | (100.0 | )% | ||||||||||
| Net Loss | (1,987 | ) | (975 | ) | (1,012 | ) | 103.8 | % | ||||||||
Revenue
Revenue increased by $8,000, or 1.5%, to $543,000. The increase was primarily driven by following factors:
| ● | Revenue from delivered events – Virtual and Hybrid decreased by $18,000 mainly due to events shifting out of the current quarter due to shifting in event timelines from our customers. | |
| ● | Revenue from delivered events – physical events increased by $26,000, mainly due to a large number of physical events taking place in the quarter from our clients allowing us to recognize all of the revenue within the period. |
Cost of Revenue
Cost of revenue increased by $29,000, or 26.6%, to $138,000, reflecting the increase amount of physical events that took place within the period since it has a larger labor component then virtual events.
Selling, General and Administrative Expenses (“SG&A expenses”)
SG&A expenses increased by $874,000, or 66.7%, to $2,185,000, due to additional company related expense due to being a public entity which was not the case during the same period last year. Expenses such as quarterly reviews and yearly audits, NASDAQ fees, D&O insurance, and SEC legal expenses.
Depreciation Expense
Deprecation expense increased by $133,000 to $147,000 due to the continued development of Xivid Pro.
Other Income (Expense), net
Other expense decreased by $22,000, or 95.7%, to $1,000, primarily due to no one time items taking place in the quarter.
| 23 |
Interest Expenses
Interest expenses decreased by $3,000, or 4.8%, to $59,000, primarily due to the lower outstanding short-term loans during the three months ended September 30, 2025.
Net Loss
As a result of the foregoing, the net loss was $1,987,000 during the three months ended September 30, 2025 compared to the net loss of $975,000 during the three months ended September 30, 2024.
Non-GAAP Financial Measures
Non-GAAP Net Loss and Non-GAAP Net Loss per Share
We define non-GAAP net loss as GAAP net loss excluding the impact of stock-based compensation expense. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the diluted weighted average shares of common stock outstanding. Our management believes non-GAAP net loss and non-GAAP net loss per share are key performance measures and uses such measures to evaluate our operating performance. Accordingly, we believe that the presentation of these adjusted operating results provides useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. Our calculation of non-GAAP net loss and non-GAAP net loss per share may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Non-GAAP net loss and non-GAAP net loss per share should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
| Three Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands, except share data) | ||||||||
| Net Loss | $ | (1,987 | ) | $ | (975 | ) | ||
| Stock-based compensation expense | 2 | - | ||||||
| Non-GAAP net loss | $ | (1,985 | ) | $ | (975 | ) | ||
| Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted | 20,567,937 | 25,000,000 | ||||||
| Net loss per share - basic and diluted | $ | (0.10 | ) | $ | (0.04 | ) | ||
| Non-GAAP net loss per share - basic and diluted | $ | (0.10 | ) | $ | (0.04 | ) | ||
Adjusted EBITDA
Adjusted EBITDA is a key measure used by our management to help us analyze our financial results, establish budgets and operating goals for managing our business, evaluate our performance and make strategic decisions. Accordingly, we believe that the presentation of Adjusted EBITDA is useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. Our calculation of Adjusted EBITDA may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
We define Adjusted EBITDA as our net loss excluding: (i) interest expense, (ii) provision for income taxes, (iii) depreciation and amortization, (iv) other expense (income), and (v) stock-based compensation expense.
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The following table provides a reconciliation of net loss to Adjusted EBITDA:
| Three Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (1,987 | ) | $ | (975 | ) | ||
| Interest expenses | 59 | 62 | ||||||
| Provision for income taxes | - | (9 | ) | |||||
| Depreciation and amortization | 147 | 14 | ||||||
| Other expenses | 1 | 23 | ||||||
| Stock-based compensation expenses | 2 | - | ||||||
| Adjusted EBITDA | $ | (1,778 | ) | $ | (885 | ) | ||
Comparison of Results of Operations for the nine months ended September 30, 2025 and 2024
The following table sets forth our statements of operations for the nine months ended September 30, 2025 and 2024:
(in thousands, except change % data)
| Nine Months Ended September 30, | Change (2025 vs. 2024) | |||||||||||||||
| 2025($) | 2024($) | $ | YoY % | |||||||||||||
| Revenues | ||||||||||||||||
| Delivered events - Virtual and Hybrid | 2,059 | 2,462 | (403 | ) | (16.4 | )% | ||||||||||
| Delivered events - Physical | 339 | 224 | 115 | 51.3 | % | |||||||||||
| Total Revenues | 2,398 | 2,686 | (288 | ) | (10.7 | )% | ||||||||||
| Cost of revenues | 499 | 534 | (35 | ) | (6.6 | )% | ||||||||||
| Gross Profit | 1,899 | 2,152 | (253 | ) | (11.8 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | 9,504 | 3,759 | 5,745 | 152.8 | % | |||||||||||
| Depreciation expenses | 443 | 41 | 402 | 980.5 | % | |||||||||||
| Total operating expenses | 9,947 | 3,800 | 6,147 | 161.8 | % | |||||||||||
| Loss from operations | (8,048 | ) | (1,648 | ) | (6,400 | ) | 388.3 | % | ||||||||
| Other income (expenses), net | (1,351 | ) | (26 | ) | (1,325 | ) | 5,096.2 | % | ||||||||
| Interest expenses | (208 | ) | (136 | ) | (72 | ) | 52.9 | % | ||||||||
| Loss before income taxes | (9,607 | ) | (1,810 | ) | (7,797 | ) | 430.8 | % | ||||||||
| Income tax credit | - | (9 | ) | 9 | (100.0 | )% | ||||||||||
| Net Loss | (9,607 | ) | (1,801 | ) | (7,806 | ) | 433.4 | % | ||||||||
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Revenue
Revenue decreased by $288,000, or 10.7%, to $2,398,000. The decrease was primarily driven by following factors:
| ● | Revenue from delivered events – Virtual and Hybrid decreased by $403,000 mainly due to an event series with our biggest customer that took place in the three-month ended March 31, 2024, but did not repeat in the three month ended March 31, 2025. This event is held by our biggest customer every other year. | |
| ● | Revenue from delivered events – physical events increased by $115,000, mainly due to a significant amount of more deals closed and delivered within the period vs the same time period last year. |
Cost of Revenue
Cost of revenue decreased by $35,000, or 6.6%, to $499,000, reflecting the lower direct costs associated with the lower revenue during the nine months ended September 30, 2025.
Selling, General and Administrative Expenses
SG&A expenses increased by $5,745,000, or 152.8%, to $9,504,000, primarily due to $3,500,000 of stock compensation expenses along with additional expenses of being a public company.
Deprecation expense increased by $402,000 to $443,000 due to the continued development of Xivid Pro.
Other Income (Expense), net
Other expense increased by $1,325,000, or 5,096.2%, to $1,351,000, primarily due to expenses in connection with entry into the Settlement Agreement during the nine months ended September 30, 2024.
Interest Expenses
Interest expenses increased by $72,000, or 52.9%, to $208,000, primarily due to the increase in short-term loans during the nine months ended September 30, 2025.
Net Loss
As a result of the foregoing, the net loss was $9,607,000 during the nine months ended September 30, 2025 compared to the net loss of $1,801,000 during the nine months ended September 30, 2024.
Non-GAAP Financial Measures
Non-GAAP Net Loss and Non-GAAP Net Loss per Share
We define non-GAAP net loss as GAAP net loss excluding the impact of stock-based compensation expense. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the diluted weighted average shares of common stock outstanding. Our management believes non-GAAP net loss and non-GAAP net loss per share are key performance measures and uses such measures to evaluate our operating performance. Accordingly, we believe that the presentation of these adjusted operating results provides useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. Our calculation of non-GAAP net loss and non-GAAP net loss per share may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Non-GAAP net loss and non-GAAP net loss per share should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands, except share data) | ||||||||
| Net Loss | $ | (9,607 | ) | $ | (1,801 | ) | ||
| Stock-based compensation expense | 3,517 | - | ||||||
| Non-GAAP net loss | $ | (6,090 | ) | $ | (1,801 | ) | ||
| Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted | 31,095,401 | 25,000,000 | ||||||
| Net loss per share - basic and diluted | $ | (0.31 | ) | $ | (0.07 | ) | ||
| Non-GAAP net loss per share - basic and diluted | $ | (0.20 | ) | $ | (0.07 | ) | ||
Adjusted EBITDA
Adjusted EBITDA is a key measure used by our management to help us analyze our financial results, establish budgets and operating goals for managing our business, evaluate our performance and make strategic decisions. Accordingly, we believe that the presentation of Adjusted EBITDA is useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. Our calculation of Adjusted EBITDA may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.
We define Adjusted EBITDA as our net loss excluding: (i) interest expense, (ii) provision for income taxes, (iii) depreciation and amortization, (iv) other expense (income), and (v) stock-based compensation expense.
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The following table provides a reconciliation of net loss to Adjusted EBITDA:
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (9,607 | ) | $ | (1,801 | ) | ||
| Interest expenses | 208 | 136 | ||||||
| Provision for income taxes | - | (9 | ) | |||||
| Depreciation and amortization | 443 | 41 | ||||||
| Other expenses | 1,351 | 26 | ||||||
| Stock-based compensation expenses | 3,517 | - | ||||||
| Adjusted EBITDA | $ | (4,088 | ) | $ | (1,607 | ) | ||
Liquidity and Capital Resources
Sources of Liquidity
Our primary liquidity needs for the next 12 months and beyond will include cash to (i) provide capital to facilitate the growth of our business, (ii) pay our short-term debt obligations, as discussed in the notes to the consolidated financial statements, and (iii) pay our operating expenses.
As of September 30, 2025 and December 31, 2024, we had cash of $310,000 and $48,000, respectively. Liquidity is a measure of our ability to meet potential cash requirements. We generally fund our operations with cash flow from operations, and, when needed, borrowed funds from financial institutions and capital injections from our majority shareholders. In June 2025, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), giving the us the right, but not the obligation to sell to Lincoln Park up to $20.0 million worth of shares of our common stock. As of September 30, 2025, we have sold 1,520,609 shares of common stock to Lincoln Park for proceeds of $426,000, as part of the equity line financing arrangement. As of September 30, 2025, $19.6 million was available to draw pursuant to the purchase agreement with Lincoln Park.
Our principal use of liquidity has been to fund our daily operations and working capital and we expect that to continue for the next 12 months and beyond. We expect that our cash and cash equivalents will be sufficient to fund our operating expenses and cash obligations for the next 12 months and beyond, although our ability to continue as a going concern depends upon our ability to attract and retain revenue generating customers, acquire new customer contracts, and secure additional financing.
Contractual Obligations and Commitments
As of September 30, 2025, the Company had total of $5,182,0000 contractual obligations for future payments.
| As of September 30, 2025 | ||||||||||||||||||||
| (in thousands) | Payments due by period: | |||||||||||||||||||
| Total | Less than 1 year | 1 – 3 years | 4 – 5 years | More than 5 years | ||||||||||||||||
| Short-term debt | $ | 4,572 | $ | 4,572 | $ | - | $ | - | $ | - | ||||||||||
| Operating lease payments | 610 | 26 | 220 | 238 | 126 | |||||||||||||||
| Total | $ | 5,182 | $ | 4,598 | $ | 220 | $ | 238 | $ | 126 | ||||||||||
As of September 30, 2025, we had outstanding short-term debt obligations of $4,572,000 which matures within the next twelve months. We also have $610,000 in operating lease obligations due over the next six years.
Capital Expenditures
Our capital expenditures primarily consist of acquisition of computer hardware equipment and capitalized software.
During the nine months ended September 30, 2025 and 2024, we spent $828,000 and $781,000, respectively, on acquisitions of computer hardware/equipment and capitalized software.
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Off-Balance Sheet Arrangements
As of September 30, 2025, the Company did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Cash flows for the nine months ended September 30, 2025 and 2024
(in thousands)
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (9,607 | ) | $ | (1,799 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 444 | 40 | ||||||
| Noncash lease expenses | 56 | 53 | ||||||
| Noncash interest expenses | 207 | — | ||||||
| Stock-based compensation | 3,517 | — | ||||||
| Loss on extinguishment of debt | 1,345 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (23 | ) | (33 | ) | ||||
| Advance - related party | (4,726 | ) | — | |||||
| Prepaid expenses and other assets | (11 | ) | 52 | |||||
| Income tax receivable | — | 91 | ||||||
| Accounts payable | (136 | ) | (50 | ) | ||||
| Accrued expenses | (157 | ) | 35 | |||||
| Deferred revenue | 109 | (105 | ) | |||||
| Operating lease liabilities | (53 | ) | (47 | ) | ||||
| Net cash used in operating activities | (9,035 | ) | (1,763 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | - | (36 | ) | |||||
| Purchase of capitalized internal-use software | (828 | ) | (781 | ) | ||||
| Net cash used in investing activities | (828 | ) | (817 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from short-term loans - related party | 2,827 | 3,274 | ||||||
| Repayments of short-term loans - related party | (2,000 | ) | - | |||||
| Proceed from issuance of shares | 9,326 | - | ||||||
| Payment for deferred offering costs | (28 | ) | (794 | ) | ||||
| Net cash provided by financing activities | 10,125 | 2,480 | ||||||
| Net change in cash and cash equivalents | 262 | (100 | ) | |||||
| Cash and cash equivalents at beginning of period | 48 | 357 | ||||||
| Cash and cash equivalents at end of period | $ | 310 | $ | 257 | ||||
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Operating Activities
Net cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense and depreciation and amortization, as well as the effect of changes in operating assets and liabilities during each period.
For the nine months ended September 30, 2025, net cash used in operating activities was $9,035,000, compared to $1,763,000 during the nine months ended September 30, 2024. The increase was primarily due to a higher net loss during the nine months ended September 30, 2025.
Investing Activities
Net cash used in investing activities increased from $817,000 during the nine months ended September 30, 2024 to $828,000 during the nine months ended September 30, 2025. The increase was mainly due to higher spending on capitalized software development costs.
Financing Activities
Net cash provided by financing activities increased from $2,480,000 during the nine months ended September 30, 2024 to $10,125,000 during the nine months ended September 30, 2025. The increase was primarily due to proceeds from the issuance of shares, partially offset by the repayment of short-term loans.
Critical Accounting Policies and Estimates
The preparation of the consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience, management’s best knowledge of current events, actions that the Company may undertake in the future, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results could differ from these estimates under different assumptions or conditions. Refer to “Critical Accounting Policies and Estimates” contained in Part II, Item 7 of the Annual Report for a complete discussion of our critical accounting policies and estimates. There have been no material changes to our critical accounting policies and estimates since the Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide this information.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.
In accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures from December 31, 2024 through September 30, 2025 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date.
Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting (as the term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the third fiscal quarter of the fiscal year ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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TEN Holdings, Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently involved in any material legal proceedings. From time-to-time we are, and we anticipate that we will be, involved in legal proceedings, claims, and litigation arising in the ordinary course of our business and otherwise. The ultimate costs to resolve any such matters could have a material adverse effect on our financial statements. We could be forced to incur material expenses with respect to these legal proceedings, and in the event that there is an outcome in any that is adverse to us, our financial position and prospects could be harmed.
Item 1A. Risk Factors
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K filed with the SEC on March 28, 2025, except that we have identified the additional risk factors set forth below.
We currently have a substantial number of shares of common stock subject to potential issuance associated with our Equity Line of Credit (“ELOC”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”). The issuance or sale of shares under our ELOC would substantially increase the number of shares outstanding and result in dilution to our security holders. This might substantially decrease the market price of our common stock.
We have a substantial number of shares of our common stock that may be issued in the future. On June 23, 2025, we entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park, pursuant to which Lincoln Park committed to purchase from us, from time to time and subject to certain limitations and conditions, up to an aggregate of $20,000,000 of our common stock over the 24-month term of the Purchase Agreement. On that date, we issued Lincoln Park 882,145 shares of our common stock. During the three months ended September 30, 2025, we issued an additional 1,520,609 shares of our common stock to Lincoln Park under our ELOC. To the extent that shares of common stock are issued or sold under our ELOC, dilution to our security holders may occur. The issuance of these additional securities may have an adverse effect on the market price of our securities.
Failure to comply with The Nasdaq Capital Market continued listing requirements may result in our common stock being delisted from The Nasdaq Capital Market.
On June 30, 2025, we received a deficiency letter (the “Notice”) from the Listing Qualifications Department of Nasdaq indicating that, based upon the closing bid price of our common stock for 30 consecutive business days prior to the delivery of the Notice, we are not in compliance with the bid price requirement, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). We were provided a compliance period of 180 calendar days from the date of the Notice, or until December 29, 2025, to regain compliance with the Bid Price Requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A).
We will continue to monitor the closing bid price of our common stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods and may, if appropriate, consider available options, including implementation of a reverse stock split of our common stock, to regain compliance with the Bid Price Requirement. As previously disclosed in the preliminary information statement filed on Schedule 14C filed on October 30, 2025, our stockholders have authorized our Board to implement a reverse stock split in the range of 1-for-10 to 1-for-20. If we seek to implement a reverse stock split in order to remain listed on Nasdaq, the announcement or implementation of such a reverse stock split could negatively affect the price of our common stock. If we do not regain compliance within the allotted compliance periods, including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that we will regain compliance with the Bid Price Requirement during the 180-day compliance period or maintain compliance with the other Nasdaq listing requirements. A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Use of Proceeds from Initial Public Offering of Common Stock
On February 7, 2025, the SEC declared effective the Registration Statement on Form S-1, as amended (File Number 333-282621), for our initial public offering (the “IPO”), (the “IPO Registration Statement”). There has been no change to the information provided under “Use of Proceeds” in Part II, Item 2 of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025
Sales of Unregistered Securities
During the three months ended September 30, 2025, we issued (i) 1,458,859 shares of common stock to Lincoln Park for a price of weighted average price of $0.29 per share, or an aggregate of $424,736, pursuant to the terms of our ELOC and (ii) 83,350 shares of common stock to Bancroft Capital, LLC (“Bancroft”) upon exercise of warrants granted to Bancroft in connection with the IPO for an exercise price of $7.20 per share, or an aggregate of $600,120. These shares were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act based upon certain factual representations received from Lincoln Park and Bancroft.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
On October 27, 2025, the Company received a grand jury subpoena from the U.S. Attorney’s Office in connection with an investigation in the Southern District of New York. The subpoena calls for the production of documents relating to its initial public offering. On October 28, 2025, the Company learned that SEC is conducting a related investigation. The Company intends to fully cooperate with the investigations and comply with its obligations under the subpoena. It is not possible at this time to predict when the investigation will be resolved, the outcome of the investigation, or its potential impact on the Company.
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Item 6. Exhibits
Incorporated by Reference (Unless Otherwise Indicated) | ||||||||||
| Exhibit Number | Exhibit Title | Form | File | Exhibit | Filing Date | |||||
| 3.1 | Certificate of Incorporation | Filed herewith | ||||||||
| 3.2 | Bylaws | Filed herewith | ||||||||
| 4.1 | Specimen Stock Certificate | S-1 | 333-282621 | 4.1 | October 11, 2024 | |||||
| 10.1 | Employment Agreement by and between the Company and Virgilio D. Torres | 8-K | 001-42515 | 10.1 | July 1, 2025 | |||||
| 10.2 | Market Awareness Agreement, dated as of June 27, 2025, between TEN Holdings, Inc. and MicroCap Advisory, LLC | 8-K | 001-42515 | 10.1 | August 8, 2025 | |||||
| 10.3+ | Reseller Program Agreement, dated as of October 21, 2025, between TEN Holdings, Inc. and Xcyte Digital Corporation | Filed herewith | ||||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed herewith | ||||||||
| 32.1* | Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | ||||||||
| 32.2* | Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished herewith | ||||||||
| 101.INS | Inline XBRL Instance Document | Filed herewith | ||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith | ||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | ||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | ||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed herewith | ||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed herewith | ||||||||
| * | In accordance with Item 601(b)(32)(ii) of Regulation S-K, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. |
| + | The schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon its request. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 10, 2025
| TEN Holdings, Inc. | ||
| By: | /s/ Randolph Wilson Jones III | |
| Randolph Wilson Jones III | ||
| Chief Executive Officer | ||
| By: | /s/ Virgilio D. Torres | |
| Virgilio D. Torres | ||
| Chief Financial Officer |
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FAQ
What were TEN Holdings (XHLD) Q3 2025 revenue and net loss?
How did year-to-date results look for XHLD through September 30, 2025?
What drove higher operating expenses in Q3 2025?
What is XHLD’s liquidity position at quarter-end?
Did the company raise equity during and after Q3?
Is there a going concern warning?
How many shares were outstanding after quarter-end?
