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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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the quarterly period ended
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For the transition period from to
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| ☒ | Smaller reporting company | ||
| Emerging growth company |
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As of August 5, 2026, there were shares of common stock, par value $ per share, outstanding.
TEN Holdings, Inc.
Form 10-Q
For the Quarterly Period Ended June 30, 2026
Contents
| 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)
| June 30 | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivables, net | ||||||||
| Receivable due from related party | ||||||||
| 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 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; $ par value – shares authorized as of June 30, 2026 and December 31, 2025; shares issued or outstanding as of June 30, 2026 and December 31, 2025 | ||||||||
| Common stock, $ par value – shares authorized as of June 30, 2026 and December 31, 2025; and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | * | |||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities & Stockholders’ Equity | $ | $ | ||||||
The accompanying notes are an integral part of the consolidated financial statements.
| * |
| 1 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 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 consolidated financial statements.
| 2 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
(in thousands, except share data)
(Unaudited)
| Stock Class | Additional | Total | ||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, April 1, 2026 | $ | * | $ | $ | ( |
) | $ | |||||||||||||
| Issuance of shares, net of offering costs | ||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Net loss | — | ( |
) | ( |
) | |||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| Balance, December 31, 2025 | $ | * | $ | $ | ( |
) | $ | |||||||||||||
| Issuance of shares, net of offering costs | ||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||
| Net loss | — | ( |
) | ( |
) | |||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( |
) | $ | ||||||||||||||
| Stock Class | Additional | Total | ||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Balance, April 1, 2025 | $ | * | $ | $ | ( |
) | $ | |||||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Issuance of shares in settlement of claims, pursuant to Section 3(a)(10) | * | |||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance, June 30, 2025 | $ | * | $ | $ | ( |
) | $ | |||||||||||||
| 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) | * | |||||||||||||||||||
| Net loss | - | ( |
) | ( |
) | |||||||||||||||
| Balance, June 30, 2025 | $ | * | $ | $ | ( |
) | $ | |||||||||||||
The accompanying notes are an integral part of the consolidated financial statements.
| * |
| 3 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Six Months Ended June 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 receivables | ||||||||
| Advance – related party | ( |
) | ||||||
| Prepaid expenses and other assets | ( |
) | ||||||
| Other assets | ||||||||
| Accounts payable | ( |
) | ||||||
| Other payable and accrued expenses | ( |
) | ||||||
| Deferred revenue | ( |
) | ( |
) | ||||
| Other liabilities | ||||||||
| Operating lease liabilities | ( |
) | ( |
) | ||||
| Net 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 | ( |
) | ||||||
| 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 consolidated financial statements.
| 4 |
TEN HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED 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 shares of common stock with
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 $ of the Company. After domestication, the total common stock issued and outstanding is shares.
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 June 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.
| 5 |
Going concern
The Company has evaluated whether there are certain conditions and events, considered in aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.
The Company’s consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company’s ability to continue as a going concern is dependent upon 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 six months
ended June 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, obtaining financial support from related parties, 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, stockholders’ 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 indicate 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 as 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.
| 7 |
Segment Information
The Company currently operates its business as one operating segment which includes two revenue types: platform usage and professional and managed services. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer (“CEO”), who reviews financial information for purposes of making operating decisions, assessing financial performance, and allocating resources. The Company’s CODM evaluates financial information as a whole for the purpose of assessing financial performance and making operating decisions.
Concentration of Customers and Vendors
The
consolidated balance sheet items that potentially subject the Company to concentration of credit risk are primarily cash, accounts
receivables and receivable due from related party. The Company continuously evaluates the creditworthiness 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 six months ended June 30, 2026 and 2025, there were two customers who accounted for more than
For
the six months ended June 30, 2026 and 2025, there were three and four suppliers, respectively, who 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 public offering completed in June 2026, the Company deposited $
As
of June 30, 2026 and December 31, 2025, restricted cash was $
Accounts Receivables, Net
Accounts
receivables 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 are provided for
customer payment within
Accounts receivables 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 receivables were initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist.
| 8 |
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
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 six months ended June 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:
| Property and Equipment | Estimated Useful Life | |
| Computer and equipment |
|
|
| Furniture and fixture |
|
|
| Leasehold improvement |
Repair and maintenance costs are expensed as incurred.
Intangible Assets
Intangible assets consist of capitalized software. The Company accounts for its software development costs in accordance with the guidance in ASC 350-40, Internal-use software. The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training, data conversion and maintenance costs are expensed as incurred. Costs of capitalized software are amortized on a straight-line basis over the estimated period of benefit, which is approximately five to seven years.
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 receivables, 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 six months ended
June 30, 2026 and 2025, the Company recognized revenue of approximately $
Cost of Revenue
Cost of revenue primarily consists of employees compensation costs 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 six months ended June 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 six months
ended June 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 statement.
3. Prepaid Expenses and Other Current Assets
As of June 30, 2026 and December 31, 2025, prepaid expenses and other current assets include the following components:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| Other | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
4. Property and Equipment, Net
As of June 30, 2026 and December 31, 2025, property and equipment consisted of the following:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Computer and equipment | $ | $ | ||||||
| Furniture and fixture | ||||||||
| Leasehold improvement | ||||||||
| Total property and equipment | ||||||||
| Less: Accumulated depreciation | ( |
) | ( |
) | ||||
| Total property and equipment, net | $ | $ | ||||||
The
Company recognized depreciation expenses on property and equipment of $
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 June 30, 2026 and December 31, 2025, intangible assets consisted of the following:
| June 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 and $
| 12 |
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 from December 31, 2030 to March 31, 2027. 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 $
As of June 30, 2026 and December 31, 2025, the following amounts were recorded in the Consolidated Balance Sheets relating to the Company’s operating lease.
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Right-of-Use Assets | ||||||||
| Operating lease assets | $ | $ | ||||||
| Lease Liabilities | ||||||||
| Operating lease liabilities - Current | $ | $ | ||||||
| Operating lease liabilities - Non-current | $ | $ | ||||||
The following table summarizes the contractual maturities of operating lease liabilities as of June 30, 2026:
| Year Ending December 31, | ||||
| 2026 (remaining) | $ | |||
| 2027 | ||||
| Total lease payments | ||||
| Less amounts representing interest | ( |
) | ||
| Present value of lease payments | ||||
| Less: current portion | ( |
) | ||
| Non-current lease liabilities | $ |
The following table illustrates information for the Company’s operating lease during the six months ended June 30, 2026 and the year ended December 31, 2025:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Total operating lease cost | $ | $ | ||||||
| Cash paid for amounts included in the measurement of the operating lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term (years) | ||||||||
| Weighted average discount rate | % | % | ||||||
The reason we are seeking to terminate the lease early is that, while the base rent appears reasonable on paper, the lease structure requires the company to pay significant additional maintenance and property-related expenses on top of the monthly lease payments. As part of our broader cost reduction initiatives and given that approximately half of our workforce already operates remotely, our current headcount no longer supports this amount of space. It is not economically prudent to continue carrying these occupancy costs, and we are seeking these savings effective throughout 2027.
7. Commitments and Contingencies
Guarantees and Commitments
There were no material purchase or guarantee commitments as of June 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 June 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 communication relating to four contracts the Company executed after its IPO. The Company is complying with these additional requests for information.
| 13 |
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 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 Company’s Board of Directors 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 June 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.
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 June 30, 2026 and December 31, 2025, other payable and accrued expenses include the following components:
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Other payable | $ | $ | ||||||
| Accrued operating expenses | ||||||||
| Accrued payroll expenses | ||||||||
| Other accrued expenses | ||||||||
| Total other payable and accrued expenses | $ | $ | ||||||
| 14 |
9. Short-term Loans – Related Party
Short-term loans – related party as of June 30, 2026 and December 31, 2025 consisted of the following:
| June 30, | December 31, | |||||||||||||
| Interest Rate | Maturity | 2026 | 2025 | |||||||||||
| V-Cube Inc. | % | $ | $ | |||||||||||
| Wizlearn Technologies Pte. Ltd. | % | |||||||||||||
| Pave Education Pte. Ltd. | % | |||||||||||||
| Naoaki Mashita | % | |||||||||||||
| 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. The $
| Three Months Ended June 30, | Six Months Ended June 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 | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Common stock options | ||||||||||||||||
| 15 |
11. Stockholders’ Equity
Preferred Stock
As of June 30, 2026, the Company has authorized shares of preferred stock with rights and preferences, including voting rights, to be designated from time to time by the Board. There were shares of preferred stock issued or outstanding as of June 30, 2026.
Common Stock
As of June 30, 2026, the Company is authorized to issue shares of common stock, par value $ per share. Each holder of common stock is entitled to one vote per share and to receive dividends when and if declared by the Board. As of June 30, 2026, there were shares of common stock issued and outstanding.
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 shares of the Company’s common stock in a private placement for gross proceeds of approximately
$
On
June 30, 2026, the Company completed a registered direct offering of shares of the Company’s common stock at a public offering
price of $ per share. The net proceeds to the Company from the offering, after deducting underwriting discounts and offering expenses
of approximately $
As
of June 30, 2026, the Company has an effective Common Stock Purchase Agreement with Lincoln Park Capital Fund, LLC, pursuant to which
the Company may, from time to time, sell shares of its common stock for aggregate gross proceeds of up to $
On September 27, 2024, the Board 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 shares of common stock at an exercise price of $ per share. The options have a contractual term of ten years and vest upon the satisfaction of service conditions for Company employees and performance conditions for Company directors. Of the stock options granted, stock options vested on February 18, 2025 upon the completion of the Company’s IPO.
| Expected term | years | |||
| Expected volatility | % | |||
| Expected dividend rate | % | |||
| Risk-free rate | % |
During the six months ended June 30, 2026, the Company granted options to purchase shares of common stock under the Equity Incentive Plan. One-third of the options vested immediately upon grant, and the remaining two-thirds vest in substantially equal monthly installments over two years, subject to continued service.
As of June 30, 2026, options were outstanding, of which were vested and exercisable and were unvested.
| 16 |
The Company recognized stock-based compensation expenses of $ million and $ million during the three and six months ended June 30, 2026, respectively, and $ million and $ million during the three and six months ended June 30, 2025, respectively. Stock-based compensation expenses are included in selling, general and administrative expenses in the Consolidated Statements of Operations.
As of June 30, 2026, the Company’s unrecognized stock-based compensation expense related to unvested stock options was $ million.
13. Revenue
Disaggregation of Revenue
The tables below reflect revenue by major source and timing of transfer of goods and services for the three months and the six months ended June 30, 2026 and 2025. The Company had no revenue derived from geographical regions outside of the U.S. during the six months ended June 30, 2026 and 2025. All revenue during the six months ended June 30, 2026 and 2025 was recognized when the performance obligation was satisfied at a point in time.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Platform Usage | $ | $ | $ | $ | ||||||||||||
| Professional & Managed Services | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
The following table summarizes the activity in deferred revenue during the six months ended June 30, 2026 and the year ended December 31, 2025:
| Six Months Ended June 30, | Year Ended December 31, | |||||||
| 2026 | 2025 | |||||||
| Balance, beginning of period | $ | $ | ||||||
| Revenue earned | ( |
) | ( |
) | ||||
| Deferral of revenue | ||||||||
| Balance, end of period | $ | $ | ||||||
14. Cost of Revenue
Disaggregation of Cost of Revenue
The table below reflects cost of revenue by major source for the three months and the six months ended June 30, 2026 and 2025.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Platform Usage | $ | $ | $ | $ | ||||||||||||
| Professional & Managed Services | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| 17 |
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 will provide investor communications and market
awareness services to the Company for a six-month term. The MC Advisor will develop and implement a multi-step investor outreach strategy,
including positioning, media planning, and campaign execution. As compensation, the MC Advisor received a $
As of June 30, 2026 and through the date of this report, the warrants had not been legally issued or granted, and no warrant agreement had been executed. The issuance of the warrants remains subject to completion of the applicable corporate approval and issuance process. Accordingly, the Company has not recorded any warrant-related expense or additional paid-in capital related to the MCA Agreement as of June 30, 2026. If and when the warrants are legally issued or granted, the Company will measure the fair value of the warrants on the grant date and recognize the related expense within selling, general and administrative expenses, with a corresponding increase to additional paid-in capital, as applicable.
Either party may terminate the MCA Agreement after 60 days upon 30 days’ written notice. As of the date of this report, the Company has not determined the timing of any issuance of warrants to the MC Advisor.
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 shares of common stock. These transactions were recorded within stockholders’ equity.
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.
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 one reportable segment and the reported segment amounts are the same as the corresponding consolidated amounts, no reconciliation of segment revenue, segment net loss or segment assets to the consolidated financial statements is necessary.
| 18 |
17. Related Parties
The related parties that had material balances and transactions as of June 30, 2026 and December 31, 2025 and for the six months ended June 30, 2026 and 2025 consist of the following:
| Name of Related Party | Nature of Relationship at June 30, 2026 | |
| V-Cube, Inc. | ||
| Wizlearn Technologies Pte. Ltd. | ||
| Pave Education Pte. Ltd. | ||
| Naoaki Mashita |
The Company had the following related party balances as of June 30, 2026 and December 31, 2025:
| June 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 party: | ||||||||||
| 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 six months ended June 30, 2026 and 2025.
18. Subsequent Events
The Company has evaluated subsequent events after the consolidated balance sheet date through August 10, 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, except those disclosed below.
As
described in Note 9, the Company repaid the $
| 19 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital, any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “might,” “will,” “should,” “would,” “could,” “likely,” “estimate,” “intend,” “continue,” “future,” “potential,” “believe,” “expect,” “plan,” “project,” “target,” “forecast,” “outlook,” or “anticipate,” and other similar words or phrases. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth in the “Risk Factors” section included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2026 (the “Annual Report”).
Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this Quarterly Report on Form 10-Q. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.
The information included in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Annual Report.
Business Overview
TEN Holdings, Inc. (the “Company,” “TEN Holdings,” “we,” “us,” or “our”), headquartered in Langhorne, Pennsylvania, was incorporated on February 12, 2024, in Pennsylvania to serve as the holding company for TEN Events, Inc. (“TEN Events”), an operating subsidiary incorporated in Pennsylvania in May 2011. Through TEN Events, the Company delivers technology-enabled event engagement and digital communications solutions that help organizations create, manage, and distribute virtual, hybrid, self-service, and in-person experiences. Our offerings combine proprietary software, production capabilities, and managed services to support enterprise customers throughout the event lifecycle, including content delivery, audience engagement, webinar management, and continuing education programs. Following our corporate restructuring completed during fiscal 2023, we expanded our capabilities to include in-person event production, live streaming, and multimedia content capture, further enhancing our integrated technology offering. As of the date of this Quarterly Report on Form 10-Q, we primarily generate revenue from subscriptions and usage of our technology offering, as well as related professional and managed services provided to enterprise customers. We experienced a decrease in our total revenue in the second quarter of fiscal year 2026, mainly due to less the expected revenue coming from one of our largest customers, while also having a significant number of opportunities shift to the third quarter of fiscal year 2026. For the six months ended June 30, 2026 and 2025, we had total revenue of approximately $1.6 million and $1.9 million, respectively, and net loss of approximately $5.9 and $7.6 million, respectively. For the six months ended June 30, 2026 and 2025, the revenue generated from platform usage was approximately $1.3 million and $1.6 million, respectively, accounting for approximately 79.5% and 85.6% of our total revenue, respectively; and the revenue generated from professional and managed services was approximately $0.3 million and $0.3 million, respectively, accounting for approximately 20.5% and 14.4% of our total revenue, respectively.
| 20 |
Our mission is to deliver top-tier planning, production, and broadcasting services for virtual, hybrid, self-service, and physical events. Our goal is to become a global leader in innovative virtual events that enhance engagement and connectivity, making impactful and memorable experiences accessible to all.
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.
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 June 30, 2026 and 2025
| 21 |
The following table sets forth our statements of operations for the three months ended June 30, 2026 and 2025:
(in thousands, except change % data)
| Three Months Ended June 30, |
Change (2026 vs. 2025) |
|||||||||||||||
| 2026($) | 2025($) | $ | YoY % | |||||||||||||
| Revenue | ||||||||||||||||
| Platform Usage | 469 | 855 | (386 | ) | (45.1 | )% | ||||||||||
| Professional & Managed Services | 262 | 261 | 1 | 0.4 | % | |||||||||||
| Total Revenue | 731 | 1,116 | (385 | ) | (34.5 | )% | ||||||||||
| Cost of revenue | 104 | 175 | (71 | ) | (40.6 | )% | ||||||||||
| Gross Profit | 627 | 941 | (314 | ) | (33.4 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | 3,609 | 2,153 | 1,456 | 67.6 | % | |||||||||||
| Depreciation expenses | 11 | 148 | (137 | ) | (92.6 | )% | ||||||||||
| Total operating expenses | 3,620 | 2,301 | 1,319 | 57.3 | % | |||||||||||
| Loss from operations | (2,993 | ) | (1,360 | ) | (1,633 | ) | 120.1 | % | ||||||||
| Other income (expenses), net | 36 | (1,344 | ) | 1,380 | (102.7 | )% | ||||||||||
| Interest expenses | (28 | ) | (80 | ) | 52 | (65.0 | )% | |||||||||
| Loss before income taxes | (2,985 | ) | (2,784 | ) | (201 | ) | 7.2 | % | ||||||||
| Provision for income taxes | - | - | - | 0.0 | % | |||||||||||
| Net Loss | (2,985 | ) | (2,784 | ) | (201 | ) | 7.2 | % | ||||||||
Revenue
Revenue decreased by $0.4 million, or 34.5%, to $0.7 million. The decrease was primarily driven by less revenue from one of our largest customers, while also having a significant number of opportunities shift to the third quarter of fiscal year 2026 and the related revenue to be recognized then.
Cost of Revenue
Cost of revenue decreased by $0.07 million, or 40.6%, to $0.1 million, reflecting a decrease in direct costs resulting from a decrease in related revenue.
Selling, General and Administrative Expenses (“SG&A expenses”)
SG&A expenses increased by $1.5 million, or 67.6%, to $3.6 million, primarily due to an increase in professional fees.
Depreciation Expense
Depreciation and amortization expenses decreased by $0.1 million, or 92.6%, to $0.01 million. The decrease was primarily due to the impairment loss recognized on the software during the year ended December 31, 2025, as the Company no longer had any software assets subject to amortization during the three months ended June 30, 2026.
| 22 |
Other Income (Expense), net
Other income (expense), net changed from expense of $1.4 million during the three months ended June 30, 2025 to income of $0.04 million during the three months ended June 30, 2026. The change primarily resulted from the expenses incurred in connection with the entry by the Company into a Settlement Agreement and Stipulation with Sunpeak Holdings Corporation (the “Settlement Agreement”) during the three months ended June 30, 2025, which were non-recurring.
Interest Expenses
Interest expenses decreased by $0.05 million, or 65.0%, to $0.03 million, primarily due to a lower outstanding short-term loan balance during the three months ended June 30, 2026.
Net Loss
As a result of the foregoing, the net loss was $3.0 million during the three months ended June 30, 2026 compared to the net loss of $2.8 million during the three months ended June 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 June 30, 2026 and 2025:
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands, except share data) | ||||||||
| Net Loss | $ | (2,985 | ) | $ | (2,784 | ) | ||
| Stock-based compensation expense | 584 | 3 | ||||||
| Non-GAAP net loss | $ | (2,401 | ) | $ | (2,781 | ) | ||
| Weighted average number of shares of common stock outstanding used to compute net loss per share, basic and diluted | 4,279,641 | 1,428,399 | ||||||
| Net loss per share – basic and diluted | $ | (0.70 | ) | $ | (1.95 | ) | ||
| Non-GAAP net loss per share - basic and diluted | $ | (0.56 | ) | $ | (1.95 | ) | ||
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.
| 23 |
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.
The following table provides a reconciliation of net loss to Adjusted EBITDA for the three months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (2,985 | ) | $ | (2,784 | ) | ||
| Interest expenses | 28 | 80 | ||||||
| Provision for income taxes | - | - | ||||||
| Depreciation and amortization | 11 | 148 | ||||||
| Other (income) expenses, net | (36 | ) | 1,344 | |||||
| Stock-based compensation expenses | 584 | 3 | ||||||
| Adjusted EBITDA | $ | (2,398 | ) | $ | (1,209 | ) | ||
Comparison of Results of Operations for the six months ended June 30, 2026 and 2025
The following table sets forth our statements of operations for the six months ended June 30, 2026 and 2025:
(in thousands, except change % data)
| Six Months Ended June 30, |
Change (2026 vs. 2025) |
|||||||||||||||
| 2026($) | 2025($) | $ | YoY % | |||||||||||||
| Revenue | ||||||||||||||||
| Platform Usage | 1,260 | 1,587 | (327 | ) | (20.6 | )% | ||||||||||
| Professional & Managed Services | 324 | 268 | 56 | 20.9 | % | |||||||||||
| Total Revenue | 1,584 | 1,855 | (271 | ) | (14.6 | )% | ||||||||||
| Cost of revenue | 411 | 361 | 50 | 13.9 | % | |||||||||||
| Gross Profit | 1,173 | 1,494 | (321 | ) | (21.5 | )% | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, General and Administrative Expenses | 6,987 | 7,319 | (332 | ) | (4.5 | )% | ||||||||||
| Depreciation expenses | 22 | 296 | (274 | ) | (92.6 | )% | ||||||||||
| Total operating expenses | 7,009 | 7,615 | (606 | ) | (8.0 | )% | ||||||||||
| Loss from operations | (5,836 | ) | (6,121 | ) | 285 | (4.7 | )% | |||||||||
| Other (income) expenses, net | 37 | (1,350 | ) | 1,387 | (102.7 | )% | ||||||||||
| Interest expenses | (89 | ) | (149 | ) | 60 | (40.3 | )% | |||||||||
| Loss before income taxes | (5,888 | ) | (7,620 | ) | 1,732 | (22.7 | )% | |||||||||
| Provision for income taxes | - | - | - | 0.0 | % | |||||||||||
| Net Loss | (5,888 | ) | (7,620 | ) | 1,732 | (22.7 | )% | |||||||||
Revenue
Revenue decreased by $0.3 million, or 14.6%, to $1.6 million. The decrease was primarily driven by lesser expected revenue coming from one of our largest customers, while also having a significant number of opportunities shift to the third quarter of fiscal year 2026 and the related revenue to be recognized then.
Cost of Revenue
Cost of revenue increased by $0.05 million, or 13.9%, to $0.4 million. The increase was primarily due to a higher number of physical events held for other customers during the six months ended June 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’s shifted opportunities, rather than a reduction in physical events overall.
Selling, General and Administrative Expenses (“SG&A expenses”)
SG&A expenses decreased by $0.3 million, or 4.5%, to $7.0 million. The decrease was primarily due to lower stock-based compensation expenses recognized during the six months ended June 30, 2026, partially offset by an increase in professional fees.
Depreciation Expense
Depreciation and amortization expenses decreased by $0.3 million, or 92.6%, to $0.02 million. The decrease was primarily due to the impairment loss recognized on the software during the year ended December 31, 2025, as the Company no longer had any software assets subject to amortization during the six months ended June 30, 2026.
| 24 |
Other Income (Expense), net
Other income (expenses), net changed from expense of $1.4 million during the six months ended June 30, 2025 to income of $0.04 million during the six months ended June 30, 2026. The change primarily resulted from the expenses incurred in connection with the entry into the Settlement Agreement during the six months ended June 30, 2025 which were non-recurring.
Interest Expenses
Interest expenses decreased by $0.06 million, or 40.3%, to $0.09 million, primarily due to a lower outstanding short-term loan balance during the six months ended June 30, 2026.
Net Loss
As a result of the foregoing, the net loss was $5.9 million during the six months ended June 30, 2026 compared to the net loss of $7.6 million during the six months ended June 30, 2025.
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 six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands, except share data) | ||||||||
| Net Loss | $ | (5,888 | ) | $ | (7,620 | ) | ||
| Stock-based compensation expense | 870 | 3,515 | ||||||
| Non-GAAP net loss | $ | (5,018 | ) | $ | (4,105 | ) | ||
| Weighted average number of shares of common stock outstanding used to compute net loss per share, basic and diluted | 4,129,377 | 1,927,108 | ||||||
| Net loss per share – basic and diluted | $ | (1.43 | ) | $ | (3.95 | ) | ||
| Non-GAAP net loss per share - basic and diluted | $ | (1.22 | ) | $ | (2.13 | ) | ||
Adjusted EBITDA
The following table provides a reconciliation of net loss to Adjusted EBITDA for the six months ended June 30, 2026 and 2025:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (in thousands) | ||||||||
| Net loss | $ | (5,888 | ) | $ | (7,620 | ) | ||
| Interest expenses | 89 | 149 | ||||||
| Provision for income taxes | - | - | ||||||
| Depreciation and amortization | 22 | 296 | ||||||
| Other (income) expenses, net | (37 | ) | 1,350 | |||||
| Stock-based compensation expenses | 870 | 3,515 | ||||||
| Adjusted EBITDA | $ | (4,944 | ) | $ | (2,310 | ) | ||
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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 June 30, 2026 and December 31, 2025, we had cash of $5.8 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. On June 30, 2026, we issued 7,500,000 shares of our common stock for net proceeds of $6.6 million in a registered direct offering to certain investors.
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 six months ended June 30, 2026, we incurred a net loss of $5.9 million and used $2.7 million of cash in operating activities. As of June 30, 2026, we had an accumulated deficit of $27.3 million and short-term related-party debt obligations of $0.4 million, all of which will mature within the next twelve months.
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.
Contractual Obligations and Commitments
As of June 30, 2026, the Company had a total of $0.5 million in contractual obligations for future payments.
| As of June 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 | $ | 430 | $ | 430 | $ | - | $ | - | $ | - | ||||||||||
| Operating lease payments | 98 | 98 | - | - | - | |||||||||||||||
| Total | $ | 528 | $ | 528 | $ | - | $ | - | $ | - | ||||||||||
As of June 30, 2026, we had outstanding short-term debt obligations of $0.5 million which mature within the next twelve months.
Capital Expenditures
Our capital expenditures primarily consist of acquisition of computer hardware equipment and capitalized software.
During the six months ended June 30, 2026 and 2025, we spent nil and $0.5 million, respectively, on capitalized software.
| 26 |
Off-Balance Sheet Arrangements
As of June 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 six months ended June 30, 2026 and 2025
| (in thousands) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (5,888 | ) | $ | (7,620 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 22 | 297 | ||||||
| Noncash lease expenses | 39 | 37 | ||||||
| Noncash interest expenses | 86 | 149 | ||||||
| Stock-based compensation | 870 | 3,515 | ||||||
| Loss on extinguishment of debt | - | 1,345 | ||||||
| Gain on lease modification | (35 | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivables | 196 | 282 | ||||||
| Advance – related party | - | (4,996 | ) | |||||
| Prepaid expenses and other assets | 697 | (63 | ) | |||||
| Other assets | 914 | - | ||||||
| Accounts payable | 414 | (217 | ) | |||||
| Other payable and accrued expenses | 302 | (221 | ) | |||||
| Deferred revenue | (277 | ) | (50 | ) | ||||
| Other liabilities | 3 | - | ||||||
| Operating lease liabilities | (39 | ) | (35 | ) | ||||
| Net cash used in operating activities | (2,696 | ) | (7,577 | ) | ||||
| Cash flows from investing activity: | ||||||||
| Purchase of capitalized internal-use software | - | (530 | ) | |||||
| Net cash used in investing activity | - | (530 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from short-term loans – related party | 310 | 1,925 | ||||||
| Repayments of short-term loans – related party | (450 | ) | (2,000 | ) | ||||
| Proceeds from issuance of shares | 7,138 | 8,900 | ||||||
| Payment for deferred offering costs | - | (27 | ) | |||||
| Net cash provided by financing activities | 6,998 | 8,798 | ||||||
| Net change in cash, cash equivalents and restricted cash | 4,302 | 691 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,631 | 48 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 5,933 | $ | 739 | ||||
| Reconciliation of cash, cash equivalents and restricted cash | ||||||||
| Cash and cash equivalents | $ | 5,833 | $ | 739 | ||||
| Restricted cash | 100 | - | ||||||
| Total cash, cash equivalents and restricted cash | $ | 5,933 | $ | 739 | ||||
| 27 |
Operating Activities
Net cash used in operating activities mainly consists of our net loss adjusted for certain noncash 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 six months ended June 30, 2026, net cash used in operating activities was $2.7 million, compared to $7.6 million during the six months ended June 30, 2025. The decrease in cash outflow was primarily due to lower net loss during the current period and a decrease in advance to related party, partially offset by lower non-cash adjustment for stock-based compensation expenses and loss on extinguishment of debt.
Investing Activity
Net cash used in investing activities decreased to nil for the six months ended June 30, 2026, compared to $0.5 million for the six months ended June 30, 2025. The decrease was due to the absence of purchase of property and equipment and capitalized software during the current period.
Financing Activities
Net cash provided by financing activities was $7.0 million for the six months ended June 30, 2026, compared to $8.8 million for the six months ended June 30, 2025. The decrease was primarily driven by lower proceeds received from the issuance of shares and short-term loans from related parties during the current period, partially offset by lower repayments for short-term loans from related parties.
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 June 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 second 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.
| 28 |
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 is complying 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 Company’s Board of Directors 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 June 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, 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 on Form 10-K filed with the SEC on March 18, 2026, except that we have identified the additional risk factors set forth below.
| 29 |
We are subject to government investigations and regulatory inquiries which could result in substantial costs, penalties and reputational harm.
We have received subpoenas and other requests for information from the U.S. Department of Justice (the “DOJ”) and the SEC relating to the Company’s initial public offering (the “IPO”) and four contracts the Company executed after its IPO.
Government investigations and regulatory proceedings are inherently uncertain, can be time-consuming, disruptive, and expensive, and can divert the attention of management and other personnel from our business operations. The outcome of these matters cannot be predicted with certainty, and we may be required to incur substantial legal, accounting and other professional fees in responding to these investigations.
If these investigations result in adverse findings, settlements, enforcement actions, civil litigation, criminal proceedings, injunctions, monetary penalties, disgorgement, changes to our business practices, limitations on our operations, or other remedial measures, our business, financial condition, results of operations, cashflows, and reputation could be materially adversely affected. In addition, publicity regarding these matters, regardless of the ultimate outcome, could harm our reputation, impair our ability to maintain or grow relationships with customers, investors, business partners, and employees and negatively impact the trading price of our securities.
Any adverse resolution of these matters could also impair our ability to access the capital markets, complete financing transactions, suspension of trading of our securities, maintain exchange listing standards, or satisfy contractual obligations, which could materially adversely affect our business and prospects.
Failure to comply with The Nasdaq Capital Market continued listing requirements may result in our common stock being delisted from The Nasdaq Capital Market.
There can be no assurance that we will be able to maintain the listing standards of the Nasdaq Capital Market, the exchange on which our common stock is traded, which includes requirements that we maintain our stockholders’ equity, total value of shares of common stock held by unaffiliated stockholders, minimum bid price, and market capitalization above certain specified levels. For example, on June 30, 2025, we received a deficiency letter from the Listing Qualifications Department (the “Staff”) of Nasdaq notifying us that the Company had not been in compliance with Nasdaq’s minimum bid price requirement. In order to cure the deficiency, we effected a 1-for-15 reverse stock split on December 1, 2025 to regain compliance with Nasdaq’s minimum bid price requirement. Because we effected such reverse stock split to cure our minimum bid price deficiency in December 2025, should our stock price fail to meet Nasdaq’s minimum bid price requirement at any time prior to December 1, 2026, we will not be eligible for any compliance period and our stock will be immediately delisted. In addition, on May 26, 2026, we received a deficiency letter from the Staff notifying us that we were not in compliance with Nasdaq Listing Rule 5550(b)(1), which requires us to maintain a minimum of $2,500,000 in stockholders’ equity. On June 30, 2026, we issued a press release announcing that we had closed a registered direct offering of 7,500,000 shares of common stock for net proceeds of approximately $6.6 million. As a result, we believe we have regained compliance with Nasdaq Listing Rule 5550(b)(1).
If we fail to conform to the Nasdaq listing requirements on an ongoing basis, our common stock might cease to trade on Nasdaq, and may move to the OTCQB or OTC Pink Markets operated by OTC Markets Group, Inc. These quotation services are generally considered to be markets that are less efficient and that provide less liquidity in the shares of common stock than Nasdaq. A delisting could substantially decrease trading in our common stock, adversely affect the market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws, adversely affect our ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.
| 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 June 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 June 30, 2026.
| Item 3. | Defaults Upon Senior Securities |
None.
| Item 4. | Mine Safety Disclosures |
Not applicable.
| Item 5. | Other Information |
None.
| 30 |
| 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 | Stock Purchase Agreement, dated May 22, 2026. | 8-K | 001-42515 | 10.1 | May 26, 2026 | |||||
| 10.2 | Registration Rights Agreement, dated May 22, 2026. | 8-K | 001-42515 | 10.2 | May 26, 2026 | |||||
| 10.3+ | Placement Agency Agreement, dated June 26, 2026, by and between the Registrant and WestPark Capital, Inc. | - | - | - | Filed herewith | |||||
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | - | - | - | Filed herewith | |||||
| 32.1* | Certification of Principal Executive Officer and 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 certification furnished in Exhibit 32.1 herewith is deemed to accompany this Form 10-Q and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. |
| + | Portions of this exhibit (indicated by asterisks) have been omitted because the registrant has determined that they are not material and is the type of information that the registrant treats as private and confidential. |
| 31 |
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: August 10, 2026
| TEN Holdings, Inc. | ||
| By: | /s/ Virgilio D. Torres | |
| Virgilio D. Torres | ||
| Chief Executive Officer and Chief Financial Officer | ||
| 32 |
Exhibit 10.3
CERTAIN IDENTIFIED INFORMATION, MARKED BY [***], HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL.
PLACEMENT AGENCY AGREEMENT
June 26, 2026
TEN Holdings, Inc.
1170 Wheeler Way
Langhorne, PA 19047
Attention: Virgilio D. Torres Dear Mr. Torres:
This letter (this “Agreement”) constitutes the agreement between WestPark Capital, Inc., as placement agent (the “Placement Agent”), and TEN Holdings, Inc., a company incorporated under the laws of the State of Nevada (the “Company”), that the Placement Agent shall serve as the exclusive placement agent for the Company, on a “reasonable best efforts” basis, in connection with the proposed placement (the “Placement”) of up to 7,500,000 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). The Shares will be registered, offered and sold under the Company’s registration statement on Form S-1 (File No. 333-294896) (and including any registration statement prepared and filed by the Company in accordance with Rule 462(b) pursuant to the Securities Act of 1933, as amended (the “Securities Act”) (the “Registration Statement”). The Shares actually placed by the Placement Agent are referred to herein as the “Placement Agent Securities.”
The terms of the Placement shall be mutually agreed upon by the Company and the purchasers (each, a “Purchaser” and collectively, the “Purchasers”); provided, however, that nothing herein shall obligate the Company to issue any Securities or complete the Placement. The Company expressly acknowledges and agrees that the Placement Agent and obligations hereunder are on a reasonable best efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Shares and does not ensure the successful placement of the Shares or any portion thereof or the success of the Placement Agent with respect to securing any other financing on behalf of the Company. The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf in connection with the Placement. Certain affiliates of the Placement Agent may participate in the Placement by purchasing some of the Placement Agent Securities. The sale of Placement Agent Securities to any Purchaser will be settled and closed through the coordinated efforts of the Placement Agent, the Placement Agent’s clearing firm, the Company and the Company’s transfer agent as disclosed in the Preliminary Prospectus (as defined herein).
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY; COVENANTS OF THE COMPANY.
A. Representations of the Company. The Company hereby represents, warrants, and covenants to the Placement Agent as of the date hereof, and as of each Closing Date, as follows:
The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, including the Preliminary Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the preliminary prospectus included in the Registration Statement at the time it was declared effective (the “Preliminary Prospectus”), or the final prospectus related to the Registration Statement (the “Final Prospectus”) to be filed, has been, or will be, issued by the Commission and no proceedings for that purpose have been, or will be, instituted or, to the knowledge of the Company, are threatened by the Commission. The Company shall file the Final Prospectus with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective as determined under the Securities Act, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Final Prospectus and any amendments or supplements thereto, will not, and the, Preliminary Prospectus or any amendment or supplement thereto, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The Company has filed all reports, schedules, forms, statements, and other documents required to be filed by the Company under the Securities Act and Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Preliminary Prospectus and the Final Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension (or waiver from the Commission) of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The Company represents and warrants that there are no affiliations with any FINRA member firm among the Company’s officers, directors or, to the knowledge of the Company, any ten percent (10.0%) or greater stockholder of the Company, except as set forth in the FINRA questionnaires and SEC Reports.
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B. Covenants of the Company. The Company covenants and agrees to continue to retain (i) an independent public accounting firm registered with the Public Company Accounting Oversight Board (the “PCAOB”) for a period of at least three (3) years after the Closing Date and (ii) a competent transfer agent with respect to the Placement Agent Securities for a period of three (3) years after the Closing Date. In addition, from the date hereof until ninety (90) days after the Closing Date, neither the Company nor any subsidiary of the Company (each, a “Subsidiary” and collectively, the “Subsidiaries”) shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock (the “Common Stock Equivalents”), except that such restriction shall not apply with respect to an Exempt Issuance (as defined below). In addition, from the date hereof until ninety (90) days after the Closing Date, neither the Company nor any Subsidiary shall effect or enter into an agreement to effect any issuance by the Company or any of its Subsidiaries of shares of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the Company may issue securities at a future determined price. The Placement Agent shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
“Exempt Issuance” means the issuance of (a) shares of Common Stock, restricted stock units or options, including the shares of Common Stock underlying the restricted stock units or options, to employees, officers, directors or consultants of the Company or its Subsidiary pursuant to any stock or option plan or arrangement duly adopted for such purpose by a majority of the non-employee members of the Company’s board of directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Placement Agent Securities and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations or anti-dilution provisions contained therein as disclosed in the SEC Reports) or to extend the term of such securities, and (c) securities pursuant to merger, acquisition or strategic transactions approved by a majority of the disinterested directors of the Company, and provided further that any such issuance shall only be to a person that is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to any investment of funds, but shall not include a transaction in which the Company is issuing securities for the purpose of raising capital or to an entity whose primary business is investing in securities or making loan.
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SECTION 2. REPRESENTATIONS OF THE PLACEMENT AGENT. The Placement Agent represents and warrants that it (i) is a member in good standing of FINRA, (ii) is registered as a broker/dealer under the Exchange Act, (iii) is licensed as a broker/dealer under the laws of the United States of America, applicable to the offers and sales of the Placement Agent Securities by the Placement Agent, (iv) is and will be a corporate body validly existing under the laws of its place of incorporation, and (v) has full power and authority to enter into and perform its obligations under this Agreement. The Placement Agent will immediately notify the Company in writing of any change in its status with respect to subsections (i) through (v) above. The Placement Agent covenants that it will use its reasonable best efforts to conduct the Placement hereunder in compliance with the provisions of this Agreement and the requirements of applicable law.
SECTION 3. COMPENSATION; TAIL FEE; AND EXPENSES.
A. Compensation. In consideration of the services to be provided for hereunder, the Company shall pay to the Placement Agent, or its respective designees, in cash by wire transfer of immediately available funds to an account or accounts designated by the Placement Agent, a cash fee (the “Placement Fee”) equal to seven percent (7.00%) of the aggregate gross proceeds received by the Company from the sale of all Placement Agent Securities at the closing of the Placement (the “Closing”, and the date on which the Closing occurs, the “Closing Date”). The Placement Fee shall be paid on the applicable Closing Date. In addition to the Placement Fee, the Company shall pay to the Placement Agent one percent (1.0%) of the gross proceeds of the Placement for non-accountable expenses.
B. Expenses. The Company agrees to pay all costs, fees and expenses incurred by the Company in connection with the performance of its obligations hereunder and in connection with the transactions contemplated hereby, including, without limitation: (i) all expenses incident to the issuance, delivery and qualification of the Placement Agent Securities (including all printing and engraving costs); (ii) all fees and expenses of the registrar and transfer agent of the Shares; (iii) all necessary issue, transfer and other stamp taxes in connection with the issuance and sale of the Placement Agent Securities; (iv) all fees and expenses of the Company’s counsel, independent public or certified public accountants and other advisors; (v) all costs and expenses incurred in connection with the preparation, printing, filing, shipping and distribution of the Registration Statement (including financial statements, exhibits, schedules, consents and certificates of experts), the Preliminary Prospectus and the Final Prospectus, and all amendments and supplements thereto, and this Agreement; (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the Company in connection with qualifying or registering (or obtaining exemptions from the qualification or registration of) all or any part of the Placement Agent Securities for offer and sale under the state securities or blue sky laws or the securities laws of any other country; (vii) the fees and expenses associated with including the Placement Agent Securities on the Trading Market; (viii) up to $75,000 for the reasonable, documented, and accountable expenses related to legal fees of counsel to the Placement Agent specifically incurred in connection with the Placement; (ix) up to $25,000 for other reasonable and documented out-of-pocket expenses as incurred by the Placement Agent in connection with the Placement; provided, however, that the aggregate amount paid to the Placement Agent pursuant to this Section 3.B as reimbursement of expenses incurred by the Placement Agent in connection with the Placement shall not exceed $125,000.00 (the “Expense Allowance Cap”); and provided further that this sentence in no way limits, or impairs the indemnification or contribution provisions contained in this Agreement. The Placement Agent reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Placement Agent’s aggregate compensation is in excess of the amount allowable under FINRA Rule 5110 or that the terms thereof require adjustment. Notwithstanding anything to the contrary herein, all expenses payable pursuant to this Section shall be subject to the Expense Allowance Cap. For the avoidance doubt, nothing in this Section 3.B clauses (viii) – (x) shall entitle the Placement Agent to seek reimbursement to the extent reimbursements are made pursuant an engagement letter, dated as of May 20, 2026, between the Placement Agent and the Company (the “Engagement Letter”).
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C. Tail Fee. Following the Termination Date (as defined below), the Placement Agent shall be entitled to compensation under Sections 3.A and 3.B, calculated in the manner set forth therein, with respect to any public or private offering or other financing or capital-raising transaction of any kind (“Tail Financing”) to the extent that such financing is both (i) provided to the Company by investors that were contacted by the Placement Agent or directly or indirectly introduced by the Placement Agent to the Company, or by any other investors in the Placement; and (ii) such Tail Financing is consummated at any time within the six (6) month period following the Termination Date. Within five (5) days of the earlier of the Closing and the Termination Date, the Placement Agent will provide to the Company a list of investors whom the Placement Agent has contacted or introduced to the Company in connection with the Placement. Notwithstanding anything to the contrary herein, the compensation due hereunder shall expressly not include any stock or equity of the Company issued to its officers, directors, employees, and consultants, nor shall it include any securities issued to holders of the Company’s currently outstanding options or warrants upon exercise thereof. The Tail Financing is subject to FINRA Rule 5110(g), and the Company shall have the right to terminate this Agreement for Cause. The Company’s exercise of its right to terminate this Agreement for Cause shall eliminate any obligations of the Company with respect to the Tail Financing set forth in this section. “Cause,” for the purpose of this Agreement, shall mean, as determined by a court of competent jurisdiction, willful misconduct, gross negligence or a material breach of this Agreement by the Placement Agent. For the avoidance doubt, nothing in this Section 3.C shall create any additional rights for the Placement Agent than those set forth in the Engagement Letter.
D. Escrow. At the Closing, the Company shall deposit $100,000 into an escrow account maintained at a U.S. bank. Such funds shall secure any claims, actions, or proceedings subject to indemnification or contribution under Section 4. The escrowed amount shall remain in such account for twelve (12) months following the Termination Date and shall be released to the Company immediately thereafter, subject only to deductions made to satisfy any indemnification or contribution obligations under Section 4 and any additional conditions set forth in the escrow agreement.
SECTION 4. INDEMNIFICATION.
A. To the fullest extent permitted by law, the Company shall indemnify and hold harmless the Placement Agent and each of its affiliates, stockholders, directors, officers, employees, members, and controlling persons (within the meaning of Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as amended) from and against all losses, claims, damages, liabilities, and expenses (including the reasonable fees and expenses of counsel), as the same are incurred in connection with, relating to, or arising out of the Placement Agent’s activities under this Agreement or the transactions contemplated hereby, including, without limitation, any expenses reasonably incurred in investigating, preparing for, defending, or participating in any FINRA arbitration, commenced or threatened, and any matters relating to the Company’s investigations by the U.S. Securities and Exchange Commission and the U.S. Department of Justice, and any other government agencies’ investigations. Notwithstanding the foregoing, the indemnity in this Section 4 shall not apply to the extent that any losses, claims, damages, expenses or liabilities (or actions in respect thereof) are found in a final judgment (not subject to appeal) by a court of law to have resulted from a Placement Agent’s fraud, willful misconduct or gross negligence in executing this Agreement or performing the services described herein. For the avoidance of doubt, this Section 4 is not intended to govern claims between the parties hereto.
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B. Promptly after receipt by the Placement Agent of notice of any claim or the commencement of any action or proceeding with respect to which the Placement Agent are entitled to indemnity hereunder, the Placement Agent will notify the Company in writing of such claim or of the commencement of such action or proceeding, but failure to so notify the Company shall not relieve the Company from any obligation it may have hereunder, except and only to the extent such failure results in the forfeiture by the Company of substantial rights or defenses or prejudice to the Company’s substantial rights or defenses. If the Company so elects or is requested by the Placement Agent, the Company will assume the defense of such action or proceeding and will employ counsel reasonably satisfactory to the Placement Agent and will pay the fees and expenses of such counsel. Notwithstanding the preceding sentence, the Placement Agent will be entitled to employ its own counsel separate from counsel for the Company and from any other party in such action if counsel for the Placement Agent reasonably determines that it would be inappropriate under the applicable rules of professional responsibility for the same counsel to represent both the Company and the Placement Agent. In such event, the reasonable fees and disbursements of no more than one such separate counsel will be paid by the Company, in addition to fees of local counsel. The Company will have the right to settle the claim or proceeding, provided that the Company will not settle any such claim, action or proceeding without the prior written consent of the Placement Agent, which will not be unreasonably withheld or delayed unless such settlement includes an unconditional, irrevocable release of each Indemnified Person from any and all liability arising out of such claim.
C. The Company agrees to notify the Placement Agent promptly of the assertion against it or any other person of any claim or the commencement of any action or proceeding relating to a transaction contemplated by this Agreement.
D. If for any reason the foregoing indemnity is unavailable to the Placement Agent or insufficient to hold the Placement Agent harmless, then the Company shall contribute to the amount paid or payable by the Placement Agent as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect not only the relative benefits received by the Company on the one hand and the Placement Agent on the other, but also the relative fault of the Company on the one hand and the Placement Agent on the other that resulted in such losses, claims, damages or liabilities, as well as any relevant equitable considerations. The amounts paid or payable by a party in respect of losses, claims, damages and liabilities referred to above shall be deemed to include any legal or other fees and expenses incurred in defending any litigation, proceeding or other action or claim. Notwithstanding the provisions hereof, the liable Placement Agent’s share of the liability hereunder shall not be in excess of the amount of fees actually received, or to be received, by the Placement Agent under this Agreement (excluding any amounts received as reimbursement of expenses incurred by the Placement Agent).
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E. These indemnification provisions shall remain in full force and effect whether or not the transaction contemplated by this Agreement is completed and shall survive the expiration or termination of this Agreement, and shall be in addition to any liability that the Company might otherwise have to any indemnified party under this Agreement or otherwise.
SECTION 5. ENGAGEMENT TERM. The Placement Agent’s engagement hereunder will be until the earlier of (i) the Closing Date, (ii) June 30, 2026, and (iii) the date on which this Agreement is terminated by the Placement Agent or the Company pursuant to the terms hereof (such earlier date, the “Termination Date”). In the event, however, that in the course of the Placement Agent’s performance of due diligence it deems it necessary to terminate the engagement, the Placement Agent may do so prior to the Termination Date. The Company may elect to terminate the engagement hereunder for any reason prior to the Termination Date. The Placement Agent agrees not to use any confidential information concerning the Company provided to the Placement Agent by the Company for any purposes other than those contemplated under this Agreement.
SECTION 6. PLACEMENT AGENT INFORMATION. The Company agrees that any information or advice rendered by the Placement Agent in connection with this engagement is for the confidential use of the Company only in its evaluation of the Placement and, except as otherwise required by law, the Company will not disclose or otherwise refer to the advice or information in any manner without the Placement Agent prior written consent.
SECTION 7. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not be construed as creating rights enforceable by any person or entity not a party hereto, except those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges and agrees that the Placement Agent is not and shall not be construed as a fiduciary of the Company and shall have no duties or liabilities to the equity holders or the creditors of the Company or any other person by virtue of this Agreement or the retention of the Placement Agent hereunder, all of which are hereby expressly waived.
SECTION 8. NO SALES OF SIMILAR SECURITIES. The Company shall not issue, enter into any agreement to issue, or announce the issuance or proposed issuance of, any shares of Common Stock or Common Stock Equivalents, or file any registration statement, including any amendments or supplements thereto, except for the Registration Statement or an amendment thereto, any registration statement that the Company is contractually obligated to file as of the date hereof, or a registration statement on Form S-8), until ninety (90) days after the Closing Date.
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SECTION 9. CLOSING. The obligations of the Placement Agent, and the closing of the sale of the Placement Agent Securities hereunder are subject to the accuracy, when made and on the Closing Date, of the representations and warranties on the part of the Company contained herein, to the performance by the Company of its obligations hereunder, and to each of the following additional terms and conditions, except as otherwise disclosed to and acknowledged and waived by the Placement Agent:
A. All corporate proceedings and other legal matters incident to the authorization, form, execution, delivery and validity of each of this Agreement, the Placement Agent Securities, and all other legal matters relating to this Agreement and the transactions contemplated hereby with respect to the Placement Agent Securities shall be reasonably satisfactory in all material respects to the Placement Agent.
B. The Placement Agent shall have received from Company Counsel such counsel’s written opinion with respect to the Placement Agent Securities and negative assurance letter, addressed to the Placement Agent, dated as of the Closing Date, in form and substance reasonably satisfactory to the Placement Agent.
C. The Common Stock shall be registered under the Exchange Act and, as of the Closing Date, the Placement Agent Securities shall be listed and admitted and authorized for trading on the Trading Market or other applicable U.S. national exchange and satisfactory evidence of such action shall have been provided to the Placement Agent. The Company shall have taken no action designed to, or likely to have the effect of terminating the registration of the Common Stock under the Exchange Act or removing or suspending from trading the Common Stock from the Trading Market or other applicable U.S. national exchange, nor has the Company received any information suggesting that the Commission or the Trading Market or other U.S. applicable national exchange is contemplating terminating such registration or listing, except as disclosed in the Company’s SEC Reports.
D. No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Placement Agent Securities or materially and adversely affect or potentially and adversely affect the business or operations of the Company.
E. [RESERVED].
F. FINRA shall have raised no objection to the fairness and reasonableness of the terms and arrangements of this Agreement. In addition, the Company shall, if requested by the Placement Agent, make or authorize Placement Agent counsel to make on the Company’s behalf, any filing with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, if applicable, with respect to the Placement and pay all filing fees required in connection therewith.
G. The Placement Agent shall have received customary certificates of the Company’s executive officers (the “Officer’s Certificate”) as to the accuracy of the representations and warranties contained in this Agreement, and a certificate of the Company’s secretary (the “Secretary’s Certificate”) certifying (i) that the Company’s organizational documents are true and complete, have not been modified and are in full force and effect; (ii) that the resolutions of the Company’s board of directors relating to the Placement are in full force and effect and have not been modified; and (iii) as to the incumbency of the officers of the Company. Each of the Officer’s Certificate and Secretary’s Certificate shall be dated as of the Closing Date, and all documents referenced in the Secretary’s Certificate shall be attached thereto.
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H. The Placement Agent shall have received an executed lock-up agreement in form and substance reasonably acceptable to the Placement Agent from each of the Company’s directors, officers and one percent (1.0%) or greater stockholders prior to the Closing Date.
I. On the date hereof, the Placement Agent shall have received, a letter from AssentSure PAC (the independent registered public accounting firm of the Company), addressed to the Placement Agent, dated as of the date hereof, and a bring-down “comfort letter” addressed to the Placement Agent on the Closing Date, each in form and substance satisfactory to the Placement Agent. The letters shall not disclose any change in the condition (financial or other), earnings, operations or business of the Company, which, in the Placement Agent’s sole judgment, is material and adverse and that makes it, in the Placement Agent’s sole judgment, impracticable or inadvisable to proceed with the Placement of the Shares.
If any of the conditions specified in this Section 8 shall not have been fulfilled when and as required by this Agreement, all obligations of the Placement Agent hereunder may be cancelled by the Placement Agent at, or at any time prior to, the Closing Date. Notice of such cancellation shall be given to the Company in writing or orally. Any such oral notice shall be confirmed promptly thereafter in writing.
SECTION 10. GOVERNING LAW. This Agreement will be governed by, and construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed entirely in such State. This Agreement may not be assigned by either party without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Any right to trial by jury with respect to any dispute arising under this Agreement or any transaction or conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought into the courts of the State of New York or into the Federal Court located in New York, New York and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
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SECTION 11. ENTIRE AGREEMENT/MISCELLANEOUS. This Agreement embodies the entire agreement and understanding between the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect or any other provision of this Agreement, which will remain in full force and effect. This Agreement may not be amended or otherwise modified or waived except by an instrument in writing signed by the Placement Agent, and the Company. The representations, warranties, agreements and covenants contained herein shall survive the Closing Date of the Placement and delivery of the Placement Agent Securities. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or a .pdf format file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or .pdf signature page were an original thereof.
SECTION 12. NOTICES. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is sent to the email address specified on the signature pages attached hereto prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date of transmission, if such notice or communication is sent to the email address on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m. (New York City time) on any business day, (c) the third business day following the date of mailing, if sent by U.S. internationally recognized air courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages hereto.
SECTION 13. PRESS ANNOUNCEMENTS. The Company agrees that the Placement Agent shall, on and after the Closing Date, have the right to reference the Placement and the Placement Agent role in connection therewith in the Placement Agent marketing materials and on its website and to place advertisements in financial and other newspapers and journals, in each case at its own expense.
[The remainder of this page has been intentionally left blank.]
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Please confirm that the foregoing correctly sets forth our agreement by signing and returning to the Placement Agent the enclosed copy of this Agreement.
| Very truly yours, | ||
| WESTPARK CAPITAL, INC. | ||
| By: | /s/ Richard Rappaport | |
| Name: | Richard Rappaport | |
| Title: | Chief Executive Officer | |
| Address for notice: | ||
| 1800 Century Park East, Suite 220 | ||
| Los Angeles, CA 90067 | ||
| Attention: Richard Rapparport | ||
| Email: [***] | ||
| with a copy (which shall not constitute notice) to: | ||
| Dickinson Wright PLLC | ||
| 350 East Las Olas Blvd., Suite 1750 | ||
| Fort Lauderdale, FL 33301 | ||
| Attention: Joel D. Mayersohn, Esq. | ||
| E-mail: [***] | ||
[Signature Page to Placement Agency Agreement.]
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Accepted and Agreed to as of the date first written above:
| TEN HOLDINGS, INC. | ||
| By: | /s/ Virgilio D. Torres | |
| Name: | Virgilio D. Torres | |
| Title: | Chief Executive Officer and Chief Financial Officer | |
| Address for notice: | ||
| 1170 Wheeler Way | ||
| Langhorne, PA 19047 | ||
| Attention: Virgilio D. Torres | ||
| Email: [***] | ||
[Signature Page to Placement Agency Agreement.]
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Exhibit 31.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Virgilio D. Torres, certify that:
1. I have reviewed this report on Form 10-Q of TEN Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: August 10, 2026
| /s/ Virgilio D. Torres | |
| Virgilio D. Torres | |
| Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive Officer and Principal Accounting and Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
The undersigned hereby certifies, in his capacity as an officer of TEN Holdings, Inc. (the “Company”), for the purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
(1) The Quarterly Report of the Company on Form 10-Q for the quarter ended June 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 10, 2026
| /s/ Virgilio D. Torres | |
| Virgilio D. Torres | |
| Chief Executive Officer and Chief Financial Officer | |
| (Principal Executive Officer and Principal Accounting and Financial Officer) |