TEN Holdings posts $3.73M Q3 2026 net loss
Management says additional liquidity will be needed over the next 12 months, despite lower operating cash use than a year earlier.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
TEN Holdings, Inc. (XHLD) reported third-quarter 2026 revenue of $640,000, up from $543,000, while net loss widened to $3.734 million from $1.987 million. For the first nine months of 2026, revenue was $2.224 million versus $2.398 million, and net loss was $9.622 million versus $9.607 million. Platform usage revenue declined to $1.688 million from $2.059 million, while professional and managed services revenue rose to $536,000 from $339,000.
Operating cash use was $5.445 million, compared with $9.035 million a year earlier; cash and cash equivalents were $3.505 million as of September 30, 2026. On June 30, 2026, the company completed a registered offering of 7,500,000 shares at $1.00 per share, with approximately $7.138 million in net proceeds. Management said additional liquidity will be required over the next 12 months and concluded substantial doubt exists about the company’s ability to continue as a going concern.
The company said it is cooperating with ongoing DOJ and SEC investigations relating to its IPO and other matters, including four contracts. As of September 30, 2026, the investigations remained ongoing, with no conclusions or final determinations.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointThird-quarter revenue increased 17.9% to $640,000.
- Moderate pointOperating cash use fell to $5.445 million from $9.035 million year over year.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Going-concern substantial doubt; additional liquidity required over the next 12 months.
- Moderate pointNine-month revenue declined 7.3% to $2.224 million.
- Moderate pointThird-quarter net loss widened 87.9% to $3.734 million.
Filing Explained
At
Key Figures
Key Terms
going concern financial
Software-as-a-Service (SaaS) technical
performance obligation financial
Adjusted EBITDA financial
restricted cash financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How did XHLD perform in the third quarter of 2026?
What were XHLD's revenue and net loss for the first nine months of 2026?
How much operating cash did XHLD use in the first nine months of 2026?
Does XHLD report a going-concern warning?
What were the terms of XHLD's June 2026 registered offering?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For
the quarterly period ended
OR
For the transition period from to
Commission
File Number:
(Exact name of registrant as specified in its charter)
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
TEN Holdings, Inc.
c/o Studio
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As
of November 5, 2026, there were
TEN
Holdings, Inc.
Form 10-Q
For the Quarterly Period Ended September 30, 2026
Contents
| Page | ||
| Part I | Financial Information | 1 |
| Item 1 | Financial Statements | 1 |
| Condensed Consolidated Balance Sheets as of September 30, 2026 (Unaudited) and December 31, 2025 | 1 | |
| Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 2 | |
| Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficiency) for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 3 | |
| Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 4 | |
| Notes to Condensed Consolidated Financial Statements | 5 | |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 |
| Item 3 | Quantitative and Qualitative Disclosures about Market Risk | 30 |
| Item 4 | Controls and Procedures | 30 |
| Part II | Other Information | 31 |
| Item 1 | Legal Proceedings | 31 |
| Item 1A | Risk Factors | 31 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 32 |
| Item 3 | Defaults Upon Senior Securities | 32 |
| Item 4 | Mine Safety Disclosures | 32 |
| Item 5 | Other Information | 32 |
| Item 6 | Exhibits | 32 |
| Signatures | 33 |
| i |
TEN
Holdings, Inc.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TEN
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | — | |||||||
| Accounts receivable, net | ||||||||
| Receivable due from related parties | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other assets | — | |||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Trade accounts payable | $ | $ | ||||||
| Other payable and accrued expenses | ||||||||
| Deferred revenue | ||||||||
| Current portion of operating lease liabilities | — | |||||||
| Short-term loans - Related party | ||||||||
| Other current liabilities | — | |||||||
| Total Current Liabilities | ||||||||
| Non-current Liabilities: | ||||||||
| Non-current operating lease liabilities | — | |||||||
| Total Non-current Liabilities | — | |||||||
| Total Liabilities | ||||||||
| Commitments and Contingencies (Note 7) | - | |||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock; $ | — | — | ||||||
| Common stock, $ | -* | |||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities & Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| * |
| 1 |
TEN
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative expense | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense), net | ( | ) | ( | ) | ||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax expense | — | — | — | — | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per share attributable to common stockholders, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted-average number of common shares outstanding used to compute net loss per share, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 2 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)
(in thousands, except share data)
(Unaudited)
| Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ | ||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Issuance of shares upon exercise of stock options | -* | — | ||||||||||||||||||
| Stock-based compensation | — | — | ( | ) | — | ( | ) | |||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||
| Balance, December 31, 2025 | $ | — | $ | $ | ( | ) | $ | |||||||||||||
| Issuance of shares, net of offering costs | — | |||||||||||||||||||
| Issuance of shares upon exercise of stock options | -* | — | ||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2026 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||
| Balance, June 30, 2025 | $ | — | $ | $ | ( | ) | $ | |||||||||||||
| Shares issued for cash | -* | — | ||||||||||||||||||
| Issuance of underwriter shares | -* | — | — | — | ||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2025 | $ | -* | $ | $ | ( | ) | $ | |||||||||||||
| Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | ||||||||||||||||
| Balance, December 31, 2024 | $ | -* | $ | $ | ( | ) | $ | ( | ) | |||||||||||
| Issuance of shares upon initial public offering, net of 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) | -* | - | ||||||||||||||||||
| Shares issued for cash | -* | - | ||||||||||||||||||
| Issuance of underwriter shares | -* | - | - | - | ||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2025 | $ | -* | $ | $ | ( | ) | $ | |||||||||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| * |
| 3 |
TEN
HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| 2026 | 2025 | |||||||
| Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Non-cash lease expenses | ||||||||
| Non-cash interest expenses | ||||||||
| Stock-based compensation | ||||||||
| Loss on extinguishment of debt | — | |||||||
| Gain on lease modification | ( | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Advance – related party | — | ( | ) | |||||
| Prepaid expenses and other assets | ( | ) | ||||||
| Other assets | — | |||||||
| Trade accounts payable | ( | ) | ( | ) | ||||
| Other payable and accrued expenses | ( | ) | ||||||
| Deferred revenue | ( | ) | ||||||
| Other liabilities | — | |||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activity: | ||||||||
| Purchase of capitalized internal-use software | — | ( | ) | |||||
| Net cash used in investing activity | — | ( | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from short-term loans - Related party | ||||||||
| Repayments of short-term loans - Related party | ( | ) | ( | ) | ||||
| Proceeds from issuance of shares | ||||||||
| Payment for deferred offering costs | — | ( | ) | |||||
| Proceeds from exercise of stock options | — | |||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash, cash equivalents and restricted cash | ||||||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | - | |||||||
| Total cash, cash equivalents and restricted cash | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Settlement of debt through offsetting with receivable due from related party | $ | $ — | ||||||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 4 |
TEN
HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 in May of 2011 and is an operating entity. TEN Events was formed for the purpose of planning, producing, and broadcasting virtual, hybrid and self-service events using its event platforms, the Xyvid Pro platform and TEN 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 reorganization involved 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 relationships were not established.
On
November 10, 2025,
On
May 19, 2026, Apexmind Solutions Inc. (“Apexmind Solutions”) was incorporated under the Business Corporations Act of British
Columbia, Canada, as a wholly owned subsidiary of the Company. Apexmind Solutions is authorized to issue an unlimited number of common
shares without par value. Upon incorporation, Apexmind Solutions issued one common share to the Company for consideration of CAD 1. During
the period from its incorporation through September 30, 2026, the Company made a capital contribution of approximately $
The capital contribution and the corresponding investment in Apexmind Solutions were eliminated in consolidation. The accounts of Apexmind Solutions have been included in the Company’s consolidated financial statements from its date of incorporation.
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.
| 5 |
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 its ability to attract and retain revenue-generating customers, obtain new customer contracts and secure 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, 2026, the Company had a net loss of $
Management’s plans to address these conditions include pursuing additional revenue-generating customer contracts, implementing cost control measures, and evaluating additional debt or equity financing alternatives.
There can be no assurance that the Company will be successful in obtaining new customer contracts, receiving related-party support when needed, or securing additional financing on acceptable terms or at all. 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, 2026 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 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, V-Cube USA Acquisition Company, LLC and Apexmind Solutions Inc. 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, impairment of long-lived assets and valuation allowance of deferred tax assets. Actual results could differ from those estimates.
| 6 |
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 |
Platform usage and professional and managed services revenue
Revenue from platform usage and professional and managed services is generated from producing and delivering hybrid, virtual or self-service events using the Company’s platforms, the Xyvid Pro and TEN Pro platforms and SaaS Development, 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
| 7 |
Concentration of Customers and Vendors
The
consolidated balance sheet items that potentially subject the Company to concentrations of credit risk are primarily cash, accounts receivable
and receivable due from related parties. 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, 2026 and 2025, two customers and one customer, respectively, accounted for more than
For
the nine months ended September 30, 2026 and 2025, three suppliers and one supplier, respectively, accounted for more than
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid short-term investments purchased with an initial maturity date of three months or less to be cash equivalents.
Restricted
cash represents cash balances that are subject to contractual restrictions and are not available for the Company’s general operating
purposes. In connection with the Company’s registered offering completed in June 2026, the Company deposited $
As
of September 30, 2026 and December 31, 2025, restricted cash was $
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
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, 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 customer composition has remained constant. The Company did
| 8 |
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, 2026 and the year ended December 31, 2025.
Deferred Offering Costs
Deferred offering costs consist of incremental costs directly attributable to proposed equity offerings. Upon completion of an equity offering, the related costs are charged against the gross proceeds of the offering as a reduction of additional paid-in capital. Costs associated with an abandoned offering are expensed.
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 | |
| Computers and equipment | ||
| Furniture and fixtures | ||
| Leasehold improvements | 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
Impairment 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 sale 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.
| 9 |
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
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. During the nine months ended
September 30, 2026 and 2025, the Company recognized revenue of approximately $
Cost of Revenue
Cost of revenue primarily consists of costs paid to its employees for delivering events and costs of renting equipment and studio.
| 10 |
Advertising and Marketing Costs
Advertising
and marketing costs are expensed as incurred and are included in selling, general and administrative expenses in the Consolidated Statements
of Operations. For the nine months ended September 30, 2026 and 2025, 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, 2026 and 2025, 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.
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 and Canada and in other jurisdictions in which it is subject to income-tax filing requirements. 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.
Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per common share is computed by dividing the net loss by the weighted-average number of shares of common stock 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 December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU addresses issues across a wide variety of Topics, making amendments that clarify guidance, correct errors, or make minor improvements to the Codification. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies the interim disclosure requirements and the applicability of Topic 270. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.
| 11 |
In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. This ASU clarifies the scope of derivative accounting for certain contracts and the accounting for share-based noncash consideration received from customers. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06 Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software This ASU modernizes the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The guidance is effective for fiscal years beginning after December 15, 2027, 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 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 guidance is 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 October 2023, the FASB issued ASU No. 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 statements.
3. Prepaid Expenses and Other Current Assets
As of September 30, 2026 and December 31, 2025, prepaid expenses and other current assets include the following components:
Schedule of Prepaid Expenses and Other Current Assets
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| Other | — | |||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
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4. Property and Equipment, Net
As of September 30, 2026 and December 31, 2025, property and equipment consisted of the following:
Schedule of Property and Equipment
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Computers and equipment | $ | $ | ||||||
| Furniture and fixtures | ||||||||
| Leasehold improvements | ||||||||
| Total property and equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
The
Company recognized depreciation expenses on property and equipment of $
5. Intangible Assets, Net
The Company’s intangible assets consist of internally developed capitalized software.
During
the year ended December 31, 2025, the Company performed impairment assessment and identified triggering events including recurring
operating losses and negative cash flows indicating that the carrying amount of the intangible assets may not be recoverable. Accordingly,
the Company recognized an impairment loss of $
As of September 30, 2026 and December 31, 2025, intangible assets consisted of the following:
Schedule of Intangible Assets
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Capitalized software | $ | $ | ||||||
| Under the application development stage | — | — | ||||||
| Total intangible assets | ||||||||
| Less: Impairment | ( | ) | ( | ) | ||||
| Less: Accumulated Amortization | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | — | $ | — | ||||
The
Company recognized amortization expenses on intangible assets of nil and $
6. Leases
The Company has an operating lease for its office space in Pennsylvania. During the three months ended June 30, 2026, the Company entered into an amendment to the lease agreement that shortened the contractual lease term to December 31, 2026. The amendment was accounted for as a lease modification that decreased the scope of the original lease.
As
of the effective date of the modification, the Company reduced the carrying amounts of the operating lease liability and the related
right-of-use asset by approximately $
| 13 |
As of September 30, 2026 and December 31, 2025, 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, | |||||||
| 2026 | 2025 | |||||||
| Right-of-Use Assets | ||||||||
| Operating lease assets | $ | $ | ||||||
| Lease Liabilities | ||||||||
| Operating lease liabilities - Current | $ | — | $ | |||||
| Operating lease liabilities - Non-current | $ | — | $ | |||||
In
July 2026, the Company paid approximately $
The following table illustrates information for the Company’s operating lease during the nine months ended September 30, 2026 and the year ended December 31, 2025:
Schedule of Operating Lease Cost
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Total operating lease cost | $ | $ | ||||||
| Cash paid for amounts included in the measurement of the operating lease liability | $ | $ | ||||||
| Weighted average remaining lease term (years) | N/A | |||||||
| Weighted average discount rate | N/A | % | ||||||
7. Commitments and Contingencies
Guarantees and Commitments
There were no material purchase or guarantee commitments as of September 30, 2026 and December 31, 2025.
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, 2026 and December 31, 2025, except those disclosed below.
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 the Company’s initial public offering. The Company has produced records in response to that grand jury subpoena. Subsequently, the Company received additional DOJ requests for information to include, but not limited to, documents and communications relating to four contracts the Company executed after its IPO. The Company has complied with these additional requests for information.
| 14 |
On October 28, 2025, the Company learned that the SEC is conducting a related investigation pursuant to its authority. On March 10, 2026, the Company received a subpoena for documents from the SEC, which also calls for the production of documents and communications related to the Company’s initial public offering and other items. The Company is aware that its former Chief Executive Officer also received a SEC subpoena that seeks records and communications relating to these investigations.
Pursuant to an internal investigation overseen by the Board of Directors of the Company (the “Board”) in consultation with the Company’s counsel, the Board believes that certain agreements executed at the direction of former members of management in connection with the Company’s initial public offering, which were terminated as disclosed in the Company’s Form 8-K filed on July 24, 2026 (the “8-K”), lacked economic substance and any direct benefit to the Company, and may have solely benefited the counterparties to those agreements rather than the Company. The Company has informed the DOJ and SEC of these facts and continues to cooperate with the above investigations. The Company has undertaken remedial measures, including terminating the identified contracts and third-party relationships as disclosed in the 8-K and enhancing its compliance program and internal policies and controls; in addition, incumbent members of management and the Board at the time of the initial public offering are no longer with the Company.
The Company is continuing to fully cooperate with both investigations and will comply with its obligations under the subpoenas. The Company cannot predict the scope or timing of the investigations, the resolution or the outcome of the investigations, the costs or the potential impact on the Company.
Based on the information currently available, the Company has not recorded a loss contingency in connection with these matters because management does not believe that a loss is both probable and reasonably estimable as of September 30, 2026. The Company is also currently unable to reasonably estimate the amount or range of any possible loss that may result from these matters. The Company will continue to evaluate developments relating to the investigations and will recognize an accrual or provide additional disclosure if and when required. As of the reporting date, to the Company’s knowledge, the investigations remain ongoing, no conclusions have been reached, and no final determinations have been made.
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.
8. Other Payables and Accrued Expenses
As of September 30, 2026 and December 31, 2025, other payable and accrued expenses include the following components:
Schedule of Other Payables and Accrued Expenses
| September 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Other payable | $ | $ | ||||||
| Accrued operating expenses | ||||||||
| Accrued payroll expenses | ||||||||
| Other accrued expenses | ||||||||
| Total other payable and accrued expenses | $ | $ | ||||||
| 15 |
9. Short-term Loans – Related Party
Short-term loans – related party as of September 30, 2026 and December 31, 2025 consisted of the following:
Schedule of Short-term Loans– Related Party
| September 30, | December 31, | ||||||||||||||
| Interest Rate | Maturity | 2026 | 2025 | ||||||||||||
| V-Cube Inc. | % | $ | — | $ | |||||||||||
| Wizlearn Technologies Pte. Ltd. | % | — | |||||||||||||
| Pave Education Pte. Ltd. | % | — | |||||||||||||
| Naoaki Mashita | % | ||||||||||||||
| Total short-term loans | $ | $ | |||||||||||||
The Company’s outstanding short-term loans from related parties are unsecured and are contractually repayable at their respective maturity dates in accordance with the underlying loan agreements.
10. 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
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| 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 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
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
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Common stock options | ||||||||||||||||
11. Stockholders’ Equity
Preferred Stock
As
of September 30, 2026, the Company has authorized
| 16 |
Common Stock
As
of September 30, 2026, the Company is authorized to issue
On
December 1, 2025, the Company effected a
On
May 22, 2026, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the investor, pursuant
to which the Company issued
On
June 30, 2026, the Company completed a registered offering of
12. 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 | % | |||
In
June 2025, the Company granted options to purchase
In
January 2026, the Company granted options to purchase
In
June 2026, the Company granted options to purchase
In
August 2026, the Company granted options to purchase
During the
three months ended September 30, 2026, stock options to purchase an aggregate of
| 17 |
As
of September 30, 2026,
The
Company recognized stock-based compensation expenses of $
As
of September 30, 2026, the Company’s unrecognized stock-based compensation expense related to unvested stock options was $
13. Revenue
Disaggregation of Revenue
The tables below reflect revenue by major source and timing of transfer of goods and services for the three and nine months ended September 30, 2026 and 2025. The Company had no revenue derived from geographical regions outside of the U.S. during the three and nine months ended September 30, 2026 and 2025. All revenue during the three and nine months ended September 30, 2026 and 2025 was recognized when the performance obligation was satisfied at a point in time.
Schedule of Disaggregation of Revenue
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Platform Usage | $ | $ | $ | $ | ||||||||||||
| Professional & Managed Services | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table summarizes the activity in deferred revenue during the nine months ended September 30, 2026 and the year ended December 31, 2025:
Schedule of Activity In Deferred Revenue
Nine Months Ended September 30, | Year Ended December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance, beginning of period | $ | $ | ||||||
| Revenue earned | ( | ) | ( | ) | ||||
| Deferral of revenue | ||||||||
| Balance, end of period | $ | $ | ||||||
| 18 |
14. Cost of Revenue
Disaggregation of Cost of Revenue
The table below reflects cost of revenue by major source for the three and nine months ended September 30, 2026 and 2025.
Schedule of Disaggregation of Cost of Revenue
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Platform Usage | $ | $ | $ | $ | ||||||||||||
| Professional & Managed Services | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
15. 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 was to provide investor communications and market
awareness services to the Company for a six-month term. As compensation, the MC Advisor received a $
On
February 5, 2024, V-Cube, Inc., the former principal stockholder 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
16. Segment Information
The Company operates as a single operating and reportable segment. The CODM is its Chief Executive Officer (“CEO”). The CODM reviews financial performance and allocates resources based on the Company’s consolidated financial information. The CODM uses net income (loss) as the measure of segment profit or loss to assess operating performance, monitor actual results compared with budgeted results and make decisions regarding the allocation of personnel and financial resources.
Revenue is derived primarily from two sources:
| 1. | Platform Usage | |
| 2. | Professional & Managed Services |
The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the segment and decides how to allocate resources based on net income (loss) that also is reported on the Consolidated Statement of Operations. The measure of segment assets is reported on the Consolidated Balance Sheet as total assets.
| 19 |
The CODM uses net income (loss) to evaluate income generated from segment assets (i.e., return on assets) in deciding whether to reinvest profits into the segment or into other parts of the entity, such as for acquisitions or to pay dividends, if any. Net income (loss) is used to monitor budget versus actual results.
Because
the Company has
17. Related Parties
During the periods presented, the Company had transactions and outstanding balances with certain entities and individuals that were related parties at the time of the respective transactions.
The Company reassessed these relationships during 2026 and determined that certain parties no longer qualified as related parties as of September 30, 2026. Accordingly, the disclosures below include material historical related-party transactions and balances for the periods presented, including transactions and balances arising before the respective relationships ceased.
The Company had the following related party balances as of September 30, 2026 and December 31, 2025:
Schedule of Related Party Balances
| September 30, | December 31, | |||||||||
| Nature of transactions | 2026 | 2025 | ||||||||
| Receivable due from related party: | ||||||||||
| V-Cube, Inc. | For additional paid-in capital | $ | $ | |||||||
| 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 | |||||||||
The Company’s outstanding short-term loans from related parties are unsecured and are contractually repayable at their respective maturity dates in accordance with the underlying loan agreements.
The Company had no revenue, purchases or other operating transactions with related parties during the nine months ended September 30, 2026 and 2025.
18. Subsequent Events
The Company has evaluated subsequent events after the consolidated balance sheet date through November 6, 2026, 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.
| 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” sections included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2026, as amended on September 10, 2026 (the “Annual Report”) and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, filed with the SEC on August 10, 2026, and the risks discussed in this Quarterly Report on Form 10-Q.
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
TEN Holdings, Inc. (the “Company,” “TEN Holdings,” “we,” “us,” or “our”), headquartered in New York, New York, was incorporated on February 12, 2024, in Pennsylvania to serve as the holding company of TEN Events, Inc. (“TEN Events”), an operating subsidiary incorporated in Pennsylvania in May 2011. On July 24, 2024, the Company changed its state of incorporation from Pennsylvania to Nevada.
The Company is a technology-driven provider of digital experience, enterprise communications, and audience engagement solutions designed to help organizations connect, communicate, and engage with their customers, employees, partners, and other stakeholders. Through its technology offerings and complementary professional services, the Company supports a range of business applications, including virtual and hybrid events, corporate communications, marketing and demand generation, customer engagement, training and continuing education, and digital content delivery.
The Company is transitioning from a predominantly event-driven services business towards a broader, platform-oriented technology model. As part of this strategy, the Company has introduced its TEN platform, which we expect will provide organizations with a unified environment for managing digital experiences, delivering content, facilitating audience engagement, and accessing related analytics. The Company intends to continue expanding its platform capabilities and integrating additional functionality to support recurring enterprise use cases beyond individual events.
| 21 |
In addition to its technology offerings, the Company provides managed production, broadcasting, livestreaming, and event-related professional services for virtual, hybrid, and physical experiences. These services complement the Company’s technology solutions and allow customers to choose between self-service capabilities and fully managed engagements.
As of the date of this Quarterly Report on Form 10-Q, the Company continues to generate a substantial portion of its revenue from virtual and hybrid events and related managed services delivered primarily to corporate customers. The Company is pursuing opportunities to increase recurring platform-based revenue and diversify its revenue streams through broader enterprise adoption of its technology solutions. We experienced an increase in our total revenue in the third quarter of fiscal year 2026, mainly due to the completion of customer transactions initiated in prior periods, along with revenue contributions from new customers acquired during the current period. For the nine months ended September 30, 2026 and 2025, we had total revenue of approximately $2.2 million and $2.4 million, respectively, and net loss of approximately $9.6 million and $9.6 million, respectively. For the nine months ended September 30, 2026 and 2025, the revenue generated from platform usage was approximately $1.7 million and $2.1 million, respectively, accounting for approximately 76% and 86% of our total revenue, respectively; and the revenue generated from professional and managed services was approximately $0.5 million and $0.3 million, respectively, accounting for approximately 24% and 14% of our total revenue, respectively.
Our mission is to empower organizations to connect people, content, and technology through integrated digital experiences that strengthen communication, engagement, and collaboration. Our long-term objective is to establish TEN Holdings as a leading enterprise digital experience platform, supporting how organizations engage their audiences across marketing, customer relationships, internal communications, education, and other business-critical interactions.
Key Financial Performance Indicators
Revenue
Our revenue is generated from our integrated technology offering and complementary professional services provided to enterprise customers. Our solutions enable organizations to plan, manage, and deliver webinars, virtual, hybrid, self-service, and in-person events, with revenue derived from platform access, technology-enabled services, and related event execution.
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 and depreciation expenses. Operating profit margin is the operating profit as a percentage of revenue.
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Other income (expenses)
From time to time, we have non-recurring, non-operating gains and losses which are reflected through other income (expenses).
Interest expenses
Interest expenses consist of interest expenses arising from borrowings.
Results of Operations
Comparison of Results of Operations for the three months ended September 30, 2026 and 2025
The following table sets forth our statements of operations for the three months ended September 30, 2026 and 2025:
| (in thousands, except change % data) | ||||||||||||||||
| Three Months Ended September 30, | Change (2026 vs. 2025) | |||||||||||||||
| 2026($) | 2025($) | $ | YoY % | |||||||||||||
| Revenue | ||||||||||||||||
| Platform Usage | 428 | 491 | (63 | ) | (12.8 | )% | ||||||||||
| Professional & Managed Services | 212 | 52 | 160 | 307.7 | % | |||||||||||
| Total Revenue | 640 | 543 | 97 | 17.9 | % | |||||||||||
| Cost of revenue | 261 | 138 | 123 | 89.1 | % | |||||||||||
| Gross Profit | 379 | 405 | (26 | ) | (6.4 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | 4,113 | 2,185 | 1,928 | 88.2 | % | |||||||||||
| Depreciation and amortization expenses | 10 | 147 | (137 | ) | (93.2 | )% | ||||||||||
| Total operating expenses | 4,123 | 2,332 | 1,791 | 76.8 | % | |||||||||||
| Loss from operations | (3,744 | ) | (1,927 | ) | (1,817 | ) | 94.3 | % | ||||||||
| Other income (expenses), net | 12 | (1 | ) | 13 | 1,300 | % | ||||||||||
| Interest expenses | (2 | ) | (59 | ) | 57 | (96.6 | )% | |||||||||
| Loss before income taxes | (3,734 | ) | (1,987 | ) | (1,747 | ) | 87.9 | % | ||||||||
| Provision for income taxes | — | — | — | 0.0 | % | |||||||||||
| Net Loss | (3,734 | ) | (1,987 | ) | (1,747 | ) | 87.9 | % | ||||||||
Revenue
Revenue increased by $0.1 million, or 17.9 %, to $0.6 million. The increase was primarily driven by the completion of customer transactions initiated in prior periods, along with revenue contributions from new customers acquired during the current period.
Cost of Revenue
Cost of revenue increased by $0.1 million, or 89.1%, to $0.3 million, driven by a higher number of physical events held during the three months ended September 30, 2026 compared to the same period in 2025.
Selling, General and Administrative Expenses (“SG&A expenses”)
SG&A expenses increased by $1.9 million, or 88.2%, to $4.1 million, primarily driven by a $1.8 million write-off of previously capitalized service contracts that had been subject to amortization. The Company also incurred approximately $0.5 million in legal expenses related to ongoing investigations and related legal matters. Excluding these non-recurring expenses, SG&A expenses would have decreased by $0.4 million, representing an improvement of 18% compared to the prior-year period.
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Depreciation and Amortization Expense
Depreciation and amortization expenses decreased by $0.1 million, or 93.2%, to $0.01 million. The decrease was primarily due to the impairment loss recognized on the software during the year ended December 31, 2025, and the Company no longer had any software assets subject to amortization during the three months ended September 30, 2026.
Other Income (Expense), net
Other income (expenses), net was net income of $0.012 million for the three months ended September 30, 2026, compared with net expense of $0.001 million for the same period in 2025. Net income for the three months ended September 30, 2026 primarily consisted of a gain on a lease modification.
Interest Expenses
Interest expenses decreased by $0.06 million, or 96.6%, to $0.002 million, primarily due to a lower outstanding short-term loan balance during the three months ended September 30, 2026.
Net Loss
As a result of the foregoing, the net loss was $3.7 million during the three months ended September 30, 2026, compared to the net loss of $2.0 million during the three months ended September 30, 2025.
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.
The following table provides a reconciliation of net loss to non-GAAP net loss for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands, except share and per share data) | ||||||||
| Net Loss | $ | (3,734 | ) | $ | (1,987 | ) | ||
| Stock-based compensation expense | (282 | ) | 2 | |||||
| Non-GAAP net loss | $ | (4,016 | ) | $ | (1,985 | ) | ||
| Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted | 11,999,366 | 2,359,622 | ||||||
| Net loss per share – basic and diluted | $ | (0.31 | ) | $ | (0.84 | ) | ||
| Non-GAAP net loss per share – basic and diluted | $ | (0.33 | ) | $ | (0.84 | ) | ||
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 (income) expense, and (v) stock-based compensation expense.
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The following table provides a reconciliation of net loss to Adjusted EBITDA for the three months ended September 30, 2026 and 2025:
| Three Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (3,734 | ) | $ | (1,987 | ) | ||
| Interest expenses | 2 | 59 | ||||||
| Provision for income taxes | — | — | ||||||
| Depreciation and amortization | 10 | 147 | ||||||
| Other (income) expenses, net | (12 | ) | 1 | |||||
| Stock-based compensation expenses | (282 | ) | 2 | |||||
| Adjusted EBITDA | $ | (4,016 | ) | $ | (1,778 | ) | ||
Comparison of Results of Operations for the nine months ended September 30, 2026 and 2025
The following table sets forth our statements of operations for the nine months ended September 30, 2026 and 2025:
| (in thousands, except change % data) | ||||||||||||||||
| Nine Months Ended September 30, | Change (2026 vs. 2025) | |||||||||||||||
| 2026($) | 2025($) | $ | YoY % | |||||||||||||
| Revenue | ||||||||||||||||
| Platform Usage | 1,688 | 2,059 | (371 | ) | (18.0 | )% | ||||||||||
| Professional & Managed Services | 536 | 339 | 197 | 58.1 | % | |||||||||||
| Total Revenue | 2,224 | 2,398 | (174 | ) | (7.3 | )% | ||||||||||
| Cost of revenue | 673 | 499 | 174 | 34.9 | % | |||||||||||
| Gross Profit | 1,551 | 1,899 | (348 | ) | (18.3 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | 11,097 | 9,504 | 1,593 | 16.8 | % | |||||||||||
| Depreciation and amortization expenses | 32 | 444 | (411 | ) | (92.8 | )% | ||||||||||
| Total operating expenses | 11,129 | 9,947 | 1,182 | 11.9 | % | |||||||||||
| Loss from operations | (9,578 | ) | (8,048 | ) | (1,530 | ) | 19.0 | % | ||||||||
| Other income (expenses), net | 47 | (1,351 | ) | 1,398 | (103.5 | )% | ||||||||||
| Interest expenses | (91 | ) | (208 | ) | 117 | (56.3 | )% | |||||||||
| Loss before income taxes | (9,622 | ) | (9,607 | ) | (15 | ) | 0.2 | % | ||||||||
| Provision for income taxes | — | — | — | 0.0 | % | |||||||||||
| Net Loss | (9,622 | ) | (9,607 | ) | (15 | ) | 0.2 | % | ||||||||
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Revenue
Revenue decreased by $0.2 million, or 7.3%, to $2.2 million, primarily reflecting the Company’s ongoing transition from a managed services provider (MSP) model to a Software-as-a-Service (SaaS) model, which has resulted in changes to the timing and recognition of revenue. Despite this transition, the Company’s customer engagement and transaction activity remain strong.
Cost of Revenue
Cost of revenue increased by $0.2 million, or 34.9%, to $0.7 million. The increase was primarily due to a higher number of physical events held for other customers during the nine months ended September 30, 2026 compared to the same period last year, which resulted in higher contract labor costs. This increase in cost of revenue occurred despite the overall decrease in revenue during the period, as the decline was concentrated on one customer, due to shifting of its opportunities, rather than a reduction in physical events overall.
Selling, General and Administrative Expenses (“SG&A expenses”)
SG&A expenses increased by $1.6 million, or 16.8%, to $11.1 million. The increase was primarily attributable to the write-off of previously capitalized service contracts, additional legal expenses associated with ongoing investigations and related legal matters, and non-cash expenses, including stock-based compensation recognized during the current year. These expenses contributed to the year-over-year increase in SG&A, partially offset by improvements in the Company’s underlying operating cost structure.
Depreciation and Amortization Expense
Depreciation and amortization expenses decreased by $0.4 million, or 92.8%, to $0.03 million, primarily due to the impairment loss recognized on the software during the year ended December 31, 2025, and the Company no longer had any software assets subject to amortization during the nine months ended September 30, 2026.
Other Income (Expense), net
Other income (expenses), net was net other income of approximately $0.05 million for the nine months ended September 30, 2026 compared to a net expense of $1.4 million for the nine months ended September 30, 2025. The decrease was primarily attributable to changes in the classification of certain public company-related expenses, which were previously recorded within other expenses but are now recognized in their appropriate general ledger accounts and corresponding expense categories, resulting in a year-over-year variance.
Interest Expenses
Interest expenses decreased by $0.1 million, or 56.3%, to $0.1 million, primarily due to a lower outstanding short-term loan balance during the nine months ended September 30, 2026.
Net Loss
As a result of the foregoing, the net loss was $9.6 million during the nine months ended September 30, 2026 compared to the net loss of $9.6 million during the nine months ended September 30, 2025.
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Non-GAAP Financial Measures
Non-GAAP Net Loss and Non-GAAP Net Loss per Share
The following table provides a reconciliation of net loss to non-GAAP net loss for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands, except share and per share data) | ||||||||
| Net Loss | $ | (9,622 | ) | $ | (9,607 | ) | ||
| Stock-based compensation expense | 588 | 3,517 | ||||||
| Non-GAAP net loss | $ | (9,034 | ) | $ | (6,090 | ) | ||
| Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted | 6,781,534 | 2,074,380 | ||||||
| Net loss per share – basic and diluted | $ | (1.42 | ) | $ | (4.63 | ) | ||
| Non-GAAP net loss per share – basic and diluted | $ | (1.33 | ) | $ | (2.94 | ) | ||
Adjusted EBITDA
The following table provides a reconciliation of net loss to Adjusted EBITDA for the nine months ended September 30, 2026 and 2025:
| Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (9,622 | ) | $ | (9,607 | ) | ||
| Interest expenses | 91 | 208 | ||||||
| Provision for income taxes | — | — | ||||||
| Depreciation and amortization | 32 | 443 | ||||||
| Other (income) expenses, net | (47 | ) | 1,351 | |||||
| Stock-based compensation expenses | 588 | 3,517 | ||||||
| Adjusted EBITDA | $ | (8,958 | ) | $ | (4,088 | ) | ||
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, 2026 and December 31, 2025, we had cash and cash equivalents of $3.5 million and $1.6 million, 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, borrow funds from financial institutions. In addition, as we continue to grow, we expect to continue funding our operations by issuing shares of our common stock to a wider stockholder base, subject to market conditions.
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 have incurred and continue to incur losses from operations and negative cash flows from operating activities. For the nine months ended September 30, 2026, we incurred a net loss of $9.6 million and used $5.4 million of cash in operating activities. As of September 30, 2026, we had an accumulated deficit of $31.1 million and short-term related-party debt obligations of $0.1 million, all of which will mature within the next twelve months.
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Our ability to continue as a going concern depends upon our ability to attract and retain revenue-generating customers, acquire new customer contracts, implement cost control measures, and secure additional debt or equity financing. Management is always evaluating additional debt or equity financing alternatives, although there can be no assurance that any such financing will be available on acceptable terms or at all.
Based on our current cash resources, recurring losses, negative operating cash flows, and short-term debt obligations, we will require additional liquidity to fund our operating expenses and cash obligations over the next twelve months. There can be no assurance that we will be successful in obtaining new customer contracts, receiving related-party support when needed, implementing cost reductions, or securing additional financing. If we are unable to obtain sufficient liquidity, we may be required to delay, reduce, or eliminate certain operating activities or otherwise modify our business plans. As a result, management has concluded that substantial doubt exists about our ability to continue as a going concern. See Note 1 to our condensed consolidated financial statements, which are included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Contractual Obligations and Commitments
As of September 30, 2026, the Company had a total of $0.2 million in contractual obligations for future payments.
| As of September 30, 2026 | ||||||||||||||||||||
| (in thousands) | Payments due by period: | |||||||||||||||||||
| Total | Less than 1 year | 1 – 3 years | 4 – 5 years | More than 5 years | ||||||||||||||||
| Short-term debt | $ | 120 | $ | 120 | $ | — | $ | — | $ | — | ||||||||||
| Operating lease payments | — | — | — | — | — | |||||||||||||||
| Total | $ | 120 | $ | 120 | $ | — | $ | — | $ | — | ||||||||||
As of September 30, 2026, we had outstanding short-term debt obligations of $0.1 million which mature within the next twelve months.
Capital Expenditures
Our capital expenditures primarily consist of acquisitions of computer hardware equipment and capitalized software.
During the nine months ended September 30, 2026 and 2025, we spent nil and $0.8 million, respectively, on capitalized software.
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Off-Balance Sheet Arrangements
As of September 30, 2026, 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, 2026 and 2025
| (in thousands) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | (9,622 | ) | (9,607 | ) | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 32 | 444 | ||||||
| Non-cash lease expenses | 68 | 56 | ||||||
| Non-cash interest expenses | 88 | 207 | ||||||
| Stock-based compensation | 588 | 3,517 | ||||||
| Loss on extinguishment of debt | — | 1,345 | ||||||
| Gain on lease modification | (50 | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 232 | (23 | ) | |||||
| Advance – related party | — | (4,726 | ) | |||||
| Prepaid expenses and other assets | 2,660 | (11 | ) | |||||
| Other assets | 914 | — | ||||||
| Accounts payable | (133 | ) | (136 | ) | ||||
| Other payable and accrued expenses | 43 | (157 | ) | |||||
| Deferred revenue | (186 | ) | 109 | |||||
| Other liabilities | 41 | — | ||||||
| Operating lease liabilities | (120 | ) | (53 | ) | ||||
| Net cash used in operating activities | (5,445 | ) | (9,035 | ) | ||||
| Cash flows from investing activity: | ||||||||
| Purchase of capitalized internal-use software | — | (828 | ) | |||||
| Net cash used in investing activity | — | (828 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from short-term loans – related party | 310 | 2,827 | ||||||
| Repayments of short-term loans – related party | (760 | ) | (2,000 | ) | ||||
| Proceeds from issuance of shares | 7,138 | 9,326 | ||||||
| Payment for deferred offering costs | — | (28 | ) | |||||
| Proceeds from exercise of stock options | 731 | — | ||||||
| Net cash provided by financing activities | 7,419 | 10,125 | ||||||
| Net change in cash, cash equivalents and restricted cash | 1,974 | 262 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,631 | 48 | ||||||
| Cash, cash equivalents and restricted cash at end of period | 3,605 | 310 | ||||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||
| Cash and cash equivalents | 3,505 | 310 | ||||||
| Restricted cash | 100 | — | ||||||
| Total cash, cash equivalents and restricted cash | 3,605 | 310 | ||||||
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, 2026, net cash used in operating activities was $5.4 million, compared to $9.0 million during the nine months ended September 30, 2025. The decrease in cash outflow was primarily attributable to the absence of $4.7 million in advances to related parties made during the prior-year period, which was partially offset by a $2.9 million decrease in stock-based compensation expense and the absence of a $1.3 million non-cash loss on extinguishment of debt recognized in the prior-year period.
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Investing Activity
Net cash used in investing activity decreased to nil for the nine months ended September 30, 2026, compared to $0.8 million for the nine months ended September 30, 2025. The decrease was due to the absence of expenditure for capitalized internal-use software during the current-year period.
Financing Activities
Net cash provided by financing activities was $7.4 million for the nine months ended September 30, 2026, compared to $10.1 million for the nine months ended September 30, 2025. The decrease was primarily attributable to a $2.2 million decrease in proceeds from the issuance of shares and a $2.5 million decrease in proceeds from short-term related-party loans received during the prior-year period. These decreases were partially offset by a $1.2 million decrease in repayments of short-term related-party loans and $0.7 million in proceeds from the exercise of stock options during the current-year period.
Critical Accounting 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 as of September 30, 2026 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 ending December 31, 2026 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, other than as disclosed below. 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 matter 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.
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 the Company’s initial public offering. The Company has produced records in response to that grand jury subpoena. Subsequently, the Company received additional DOJ requests for information to include, but not limited to, documents and communications relating to four contracts the Company executed after its IPO. The Company has complied with these additional requests for information.
On October 28, 2025, the Company learned that the SEC is conducting a related investigation pursuant to its authority. On March 10, 2026, the Company received a subpoena for documents from the SEC, which also calls for the production of documents and communications related to the Company’s initial public offering and other items. The Company is aware that its former Chief Executive Officer also received a SEC subpoena that seeks records and communications relating to these investigations.
Pursuant to an internal investigation overseen by the Board of Directors of the Company (the “Board”) in consultation with the Company’s counsel, the Board believes that certain agreements executed at the direction of former members of management in connection with the Company’s initial public offering, which were terminated as disclosed in the Company’s Form 8-K filed on July 24, 2026 (the “8-K”), lacked economic substance and any direct benefit to the Company, and may have solely benefited the counterparties to those agreements rather than the Company. The Company has informed the DOJ and SEC of these facts and continues to cooperate with the above investigations. The Company has undertaken remedial measures, including terminating the identified contracts and third-party relationships as disclosed in the 8-K and enhancing its compliance program and internal policies and controls; in addition, incumbent members of management and the Board at the time of the initial public offering are no longer with the Company.
The Company is continuing to fully cooperate with both investigations and will comply with its obligations under the subpoenas. The Company cannot predict the scope or timing of the investigations, the resolution or the outcome of the investigations, the costs or the potential impact on the Company.
Based on the information currently available, the Company has not recorded a loss contingency in connection with these matters because management does not believe that a loss is both probable and reasonably estimable as of September 30, 2026. The Company is also currently unable to reasonably estimate the amount or range of any possible loss that may result from these matters. The Company will continue to evaluate developments relating to the investigations and will recognize an accrual or provide additional disclosure if and when required. As of the reporting date, to the Company’s knowledge, the investigations remain ongoing, no conclusions have been reached, and no final determinations have been made.
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, as supplemented by our subsequent Quarterly Reports on Form 10-Q, except that the following risk factor corrects and supersedes the risk factor entitled “Anti-takeover provisions in our articles of incorporation and bylaws and under Nevada law could prevent or delay an acquisition of us, which may be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.”
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Anti-takeover provisions in our articles of incorporation and bylaws and under Nevada law could prevent or delay an acquisition of us, which may be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
Provisions of the Nevada Revised Statutes, our articles of incorporation, as amended, and our bylaws, as amended, could make it more difficult to acquire us by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, which are summarized below, may have the effect of discouraging takeover bids.
| ● | require super-majority voting to amend some provisions in our articles of incorporation and bylaws; | |
| ● | authorize the issuance of “blank check” preferred stock that our Board could use to implement a stockholder rights plan; | |
| ● | eliminate the ability of our stockholders to call special meetings of stockholders; and | |
| ● | prohibit cumulative voting. |
In addition, Nevada Revised Statutes imposes certain restrictions on business combinations and certain changes or potential changes in control of a Nevada corporation. Anti-takeover provisions in our articles of incorporation and bylaws and under Nevada law could prevent or delay an acquisition of us, which may be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Sales of Unregistered Securities
There were no unregistered sales of equity securities during the three months ended September 30, 2026 which have not been previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.
Use of Proceeds
Not applicable.
Purchase of Equity Securities
We did not repurchase any shares of common stock during the three months ended September 30, 2026.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
Incorporated by Reference (Unless Otherwise Indicated) | ||||||||||
| Exhibit Number | Exhibit Title | Form |
File |
Exhibit |
Filing Date | |||||
| 3.1 | Articles of Incorporation | 10-Q | 001-42515 | 3.1 | November 10, 2025 | |||||
| 3.2 | Bylaws | 10-Q | 001-42515 | 3.2 | November 10, 2025 | |||||
| 4.1 | Specimen Stock Certificate | S-1 | 333-282621 | 4.1 | October 11, 2024 | |||||
| 10.1† | Performance Incentive Bonus Agreement, dated July 15, 2026, between Mr. Virgilio Torres and the Company | 8-K/A | 001-42515 | 10.1 | July 16, 2026 | |||||
| 10.2 | Consulting Agreement, dated September 30, 2026, between the Company and Everest Advisors LLC. | 8-K | 001-42515 | 10.1 | October 5, 2026 | |||||
| 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 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. |
| † | Management contract or compensatory plan or arrangement. |
| 32 |
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 6, 2026
| TEN Holdings, Inc. | ||
| By: | /s/ Virgilio D. Torres | |
| Virgilio D. Torres | ||
| Chief Executive Officer | ||
| By: | /s/ Ian M. Lawson | |
| Ian M. Lawson | ||
| Interim Chief Financial Officer | ||
| 33 |