TEN Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2026

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 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 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 is a provider of event planning, production, and broadcasting services. TEN Events produces virtual, hybrid, self-service, and physical events. Virtual, hybrid, and self-service events could involve virtual and hybrid event planning, production and broadcasting services, and continuing education services, all of which are supported by our proprietary Xyvid Pro platform and TEN Pro platform. Physical events were added to our revenue streams, due to our corporate restructuring completed in fiscal year 2023, and mainly involve live streaming and video recording of physical events.

As of the date of this Quarterly Report on Form 10-Q, we primarily generate revenue from virtual and hybrid events delivered to corporate customers. We experienced an increase in our total revenue in the first quarter of fiscal year 2026, mainly due to one of our repeatable clients increasing their revenue quarter-over-quarter by over 100%, compared to the same period last year. For the three months ended March 31, 2026 and 2025, we had total revenue of approximately $0.9 million and $0.7 million, respectively, and net loss of approximately $2.9 and $4.8 million, respectively. For the three months ended March 31, 2026 and 2025, the revenue generated from virtual and hybrid events was approximately $0.8 and $0.7 million, respectively, accounting for approximately 92.7% and 96.4% of our total revenue, respectively; and the revenue generated from physical events was approximately $0.1 and $0.03 million, respectively, accounting for approximately 7.3% and 3.6% of our total revenue, respectively.

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 derived from the provision of virtual and hybrid events and physical events on our Xyvid Pro and TEN Pro platforms.

Cost of revenue

Our cost of revenue is primarily driven by the costs paid to our employees for producing events and the costs of renting equipment and our studio.

Selling, general and administrative expenses

Selling, general and administrative expenses are primarily composed of personnel costs for sales and marketing staff and general corporate functions, computer and software costs, and advertising and marketing expenses.

We expect general and administrative expenses to fluctuate as a result of operating as a public company.

Operating profit and operating profit margin

Operating profit is the difference between our revenue and cost of revenue and selling, general and administrative expenses. Operating profit margin is the 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 March 31, 2026 and 2025

The following table sets forth our statements of operations for the three months ended March 31, 2026 and 2025:

(in thousands, except change % data)

Revenue

Revenue increased by $0.1 million, or 15.4%, to $0.9 million. The increase was primarily driven by one of our major customers increasing their revenue quarter-over-quarter by 100%.

Cost of Revenue

Cost of revenue increased by $0.1 million, or 65.1%, to $0.3 million, driven by one major event that took place in the quarter from one of our customers that did not take place during the same period last year.

Selling, General and Administrative Expenses (“SG&A expenses”)

SG&A expenses decreased by $1.8 million, or 34.6%, to $3.4 million, due to lower headcount cost during the same period last year as well as the less stock-based compensation expenses recognized in the current period.

Depreciation Expense

Deprecation expense decreased by $0.1 million to $0.01 million due to the company taking a large impairment expense at the end of 2025 which will cause all future periods to be less than 2025.

Other Income (Expense), net

Other income (expense), net increased by $0.006 million, or 120.0%, from $0.005 million of other expenses to $0.001 million of other income, primarily due to interest income.

Interest Expenses

Interest expenses increased by $0.008 million, or 11.6%, to $0.06 million, primarily due to continued accrued interest on the loans taken by the Company.

Net Loss

As a result of the foregoing, the net loss was $2.9 million during the three months ended March 31, 2026 compared to the net loss of $4.8 million during the three months ended March 31, 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.

(in thousands, except share data)

Adjusted EBITDA

Adjusted EBITDA is a key measure used by our management to help us analyze our financial results, establish budgets and operating goals for managing our business, evaluate our performance and make strategic decisions. Accordingly, we believe that the presentation of Adjusted EBITDA is useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. Our calculation of Adjusted EBITDA may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

We define Adjusted EBITDA as our net loss excluding: (i) interest expense, (ii) provision for income taxes, (iii) depreciation and amortization, (iv) other expense (income), and (v) stock-based compensation expense.

The following table provides a reconciliation of net loss to Adjusted EBITDA:

(in thousands)

21

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 March 31, 2026 and December 31, 2025, we had cash of $0.1 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, borrowed funds from financial institutions and related parties. 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. In June 2025, we entered into a purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), giving the us the right, but not the obligation to sell to Lincoln Park up to $20.0 million worth of shares of our common stock (the “ELOC”). We do not intend to sell further shares pursuant to the ELOC at this time.

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 three months ended March 31, 2026, we incurred a net loss of $2.9 million and used $1.1 million of cash in operating activities. As of March 31, 2026, we had an accumulated deficit of $24.3 million and short-term related-party debt obligations of $3.0 million, all of which mature within the next twelve months. These conditions, together with our limited cash balance as of March 31, 2026, raise substantial doubt about our ability to continue as a going concern.

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, receive financial support from related parties, and secure additional debt or equity financing. In March 2026, we entered into a Corporate Support and Funding Agreement with V-Cube, Inc., pursuant to which V-Cube committed to provide financial support in the aggregate amount of $5.4 million, payable in installments during 2026. Management is also 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 March 31, 2026, the Company had a total of $3.6 million in contractual obligations for future payments.

(in thousands)

As of March 31, 2026, we had outstanding short-term debt obligations of $3.0 million which mature within the next twelve months. We also have $0.6 million in operating lease obligations due over the next five years.

Capital Expenditures

Our capital expenditures primarily consist of acquisition of computer hardware equipment and capitalized software.

During the three months ended March 31, 2026 and 2025, we spent nil and $0.3 million, respectively, on acquisitions of capitalized software.

Off-Balance Sheet Arrangements

As of March 31, 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 three months ended March 31, 2026 and 2025

(in thousands)

Operating Activities

Net cash used in operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation expense and depreciation and amortization, as well as the effect of changes in operating assets and liabilities during each period.

For the three months ended March 31, 2026, net cash used in operating activities was $1.1 million, compared to $6.8 million during the three months ended March 31, 2025. The decrease was primarily due a lower net loss during the current period.

Investing Activities

Net cash used in investing activities decreased to nil for the three months ended March 31, 2026, compared to $0.3 million for the three months ended March 31, 2025. The decrease was primarily due to reduced expenditures for capitalized software during the current period.

Financing Activities

Net cash provided by financing activities shifted to a net outflow of $0.5 million for the three months ended March 31, 2026, compared to a net inflow of $7.3 million for the three months ended March 31, 2025. The decrease was primarily driven by $8.9 million in proceeds from issuance of shares received during the prior-year period, which did not recur in the current quarter.

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.

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 March 31, 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 first 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.

TEN Holdings, Inc.

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.