Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Rule 3b-6 promulgated thereunder. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to: any projections of earnings, revenue, or other financial items; any statements regarding the adequacy, availability, and sources of capital; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words "may," "might," "will," "should," "would," "could," "likely," "estimate," "intend," "continue," "future," "potential," "believe," "expect," "plan," "project," "target," "forecast," "outlook," or "anticipate," and other similar words or phrases. In addition to any assumptions and other factors and matters referred to specifically in connection with such forward-looking statements, factors that could cause actual results or outcomes to differ materially from those contained in the forward-looking statements include those factors set forth in the "Risk Factors" sections included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the "SEC") on March 18, 2026, as amended on September 10, 2026 (the "Annual Report") and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, filed with the SEC on August 10, 2026, and the risks discussed in this Quarterly Report on Form 10-Q.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed in this Quarterly Report on Form 10-Q. We do not intend, and undertake no obligation, to update any forward-looking statement, except as required by law.

The information included in this Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes included in this Quarterly Report on Form 10-Q, and the audited consolidated financial statements and notes and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the Annual Report.

Business Overview

TEN Holdings, Inc. (the "Company," "TEN Holdings," "we," "us," or "our"), headquartered in New York, New York, was incorporated on February 12, 2024, in Pennsylvania to serve as the holding company of TEN Events, Inc. ("TEN Events"), an operating subsidiary incorporated in Pennsylvania in May 2011. On July 24, 2024, the Company changed its state of incorporation from Pennsylvania to Nevada.

The Company is a technology-driven provider of digital experience, enterprise communications, and audience engagement solutions designed to help organizations connect, communicate, and engage with their customers, employees, partners, and other stakeholders. Through its technology offerings and complementary professional services, the Company supports a range of business applications, including virtual and hybrid events, corporate communications, marketing and demand generation, customer engagement, training and continuing education, and digital content delivery.

The Company is transitioning from a predominantly event-driven services business towards a broader, platform-oriented technology model. As part of this strategy, the Company has introduced its TEN platform, which we expect will provide organizations with a unified environment for managing digital experiences, delivering content, facilitating audience engagement, and accessing related analytics. The Company intends to continue expanding its platform capabilities and integrating additional functionality to support recurring enterprise use cases beyond individual events.

In addition to its technology offerings, the Company provides managed production, broadcasting, livestreaming, and event-related professional services for virtual, hybrid, and physical experiences. These services complement the Company's technology solutions and allow customers to choose between self-service capabilities and fully managed engagements.

As of the date of this Quarterly Report on Form 10-Q, the Company continues to generate a substantial portion of its revenue from virtual and hybrid events and related managed services delivered primarily to corporate customers. The Company is pursuing opportunities to increase recurring platform-based revenue and diversify its revenue streams through broader enterprise adoption of its technology solutions. We experienced an increase in our total revenue in the third quarter of fiscal year 2026, mainly due to the completion of customer transactions initiated in prior periods, along with revenue contributions from new customers acquired during the current period. For the nine months ended September 30, 2026 and 2025, we had total revenue of approximately $2.2 million and $2.4 million, respectively, and net loss of approximately $9.6 million and $9.6 million, respectively. For the nine months ended September 30, 2026 and 2025, the revenue generated from platform usage was approximately $1.7 million and $2.1 million, respectively, accounting for approximately 76% and 86% of our total revenue, respectively; and the revenue generated from professional and managed services was approximately $0.5 million and $0.3 million, respectively, accounting for approximately 24% and 14% of our total revenue, respectively.

Our mission is to empower organizations to connect people, content, and technology through integrated digital experiences that strengthen communication, engagement, and collaboration. Our long-term objective is to establish TEN Holdings as a leading enterprise digital experience platform, supporting how organizations engage their audiences across marketing, customer relationships, internal communications, education, and other business-critical interactions.

Key Financial Performance Indicators

Revenue

Our revenue is generated from our integrated technology offering and complementary professional services provided to enterprise customers. Our solutions enable organizations to plan, manage, and deliver webinars, virtual, hybrid, self-service, and in-person events, with revenue derived from platform access, technology-enabled services, and related event execution.

Cost of revenue

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

Selling, general and administrative expenses

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

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

Operating profit and operating profit margin

Operating profit is the difference between our revenue and cost of revenue and selling, general and administrative expenses and depreciation expenses. Operating profit margin is the operating profit as a percentage of revenue.

Other income (expenses)

From time to time, we have non-recurring, non-operating gains and losses which are reflected through other income (expenses).

Interest expenses

Interest expenses consist of interest expenses arising from borrowings.

Results of Operations

Comparison of Results of Operations for the three months ended September 30, 2026 and 2025

The following table sets forth our statements of operations for the three months ended September 30, 2026 and 2025:

(in thousands, except change % data)
		Three Months Ended September 30,								Change (2026 vs. 2025)
		2026($)				2025($)				$				YoY %
Revenue
Platform Usage			428				491				(63	)			(12.8	)%
Professional & Managed Services			212				52				160				307.7	%
Total Revenue			640				543				97				17.9	%
Cost of revenue			261				138				123				89.1	%
Gross Profit			379				405				(26	)			(6.4	)%
Operating expenses:
Selling, General and Administrative Expenses			4,113				2,185				1,928				88.2	%
Depreciation and amortization expenses			10				147				(137	)			(93.2	)%
Total operating expenses			4,123				2,332				1,791				76.8	%
Loss from operations			(3,744	)			(1,927	)			(1,817	)			94.3	%
Other income (expenses), net			12				(1	)			13				1,300	%
Interest expenses			(2	)			(59	)			57				(96.6	)%
Loss before income taxes			(3,734	)			(1,987	)			(1,747	)			87.9	%
Provision for income taxes			-				-				-				0.0	%
Net Loss			(3,734	)			(1,987	)			(1,747	)			87.9	%

Revenue

Revenue increased by $0.1 million, or 17.9 %, to $0.6 million. The increase was primarily driven by the completion of customer transactions initiated in prior periods, along with revenue contributions from new customers acquired during the current period.

Cost of Revenue

Cost of revenue increased by $0.1 million, or 89.1%, to $0.3 million, driven by a higher number of physical events held during the three months ended September 30, 2026 compared to the same period in 2025.

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

SG&A expenses increased by $1.9 million, or 88.2%, to $4.1 million, primarily driven by a $1.8 million write-off of previously capitalized service contracts that had been subject to amortization. The Company also incurred approximately $0.5 million in legal expenses related to ongoing investigations and related legal matters. Excluding these non-recurring expenses, SG&A expenses would have decreased by $0.4 million, representing an improvement of 18% compared to the prior-year period.

Depreciation and Amortization Expense

Depreciation and amortization expenses decreased by $0.1 million, or 93.2%, to $0.01 million. The decrease was primarily due to the impairment loss recognized on the software during the year ended December 31, 2025, and the Company no longer had any software assets subject to amortization during the three months ended September 30, 2026.

Other Income (Expense), net

Other income (expenses), net was net income of $0.012 million for the three months ended September 30, 2026, compared with net expense of $0.001 million for the same period in 2025. Net income for the three months ended September 30, 2026 primarily consisted of a gain on a lease modification.

Interest Expenses

Interest expenses decreased by $0.06 million, or 96.6%, to $0.002 million, primarily due to a lower outstanding short-term loan balance during the three months ended September 30, 2026.

Net Loss

As a result of the foregoing, the net loss was $3.7 million during the three months ended September 30, 2026, compared to the net loss of $2.0 million during the three months ended September 30, 2025.

Non-GAAP Financial Measures

Non-GAAP Net Loss and Non-GAAP Net Loss per Share

We define non-GAAP net loss as GAAP net loss excluding the impact of stock-based compensation expense. Non-GAAP net loss per share is calculated by dividing non-GAAP net loss by the diluted weighted-average shares of common stock outstanding. Our management believes non-GAAP net loss and non-GAAP net loss per share are key performance measures and uses such measures to evaluate our operating performance. Accordingly, we believe that the presentation of these adjusted operating results provides useful supplemental information to investors and facilitates the analysis and comparison of our operating results across reporting periods. Our calculation of non-GAAP net loss and non-GAAP net loss per share may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Non-GAAP net loss and non-GAAP net loss per share should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

The following table provides a reconciliation of net loss to non-GAAP net loss for the three months ended September 30, 2026 and 2025:

		Three Months Ended September 30,
		2026				2025
		(in thousands, except share and per share data)
Net Loss		$	(3,734	)		$	(1,987	)
Stock-based compensation expense			(282	)			2
Non-GAAP net loss		$	(4,016	)		$	(1,985	)
Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted			11,999,366				2,359,622
Net loss per share - basic and diluted		$	(0.31	)		$	(0.84	)
Non-GAAP net loss per share - basic and diluted		$	(0.33	)		$	(0.84	)

Adjusted EBITDA

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

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

The following table provides a reconciliation of net loss to Adjusted EBITDA for the three months ended September 30, 2026 and 2025:

		Three Months Ended September 30,
		2026				2025
		(in thousands)
Net loss		$	(3,734	)		$	(1,987	)
Interest expenses			2				59
Provision for income taxes			-				-
Depreciation and amortization			10				147
Other (income) expenses, net			(12	)			1
Stock-based compensation expenses			(282	)			2
Adjusted EBITDA		$	(4,016	)		$	(1,778	)

Comparison of Results of Operations for the nine months ended September 30, 2026 and 2025

The following table sets forth our statements of operations for the nine months ended September 30, 2026 and 2025:

(in thousands, except change % data)
		Nine Months Ended September 30,								Change (2026 vs. 2025)
		2026($)				2025($)				$				YoY %
Revenue
Platform Usage			1,688				2,059				(371	)			(18.0	)%
Professional & Managed Services			536				339				197				58.1	%
Total Revenue			2,224				2,398				(174	)			(7.3	)%
Cost of revenue			673				499				174				34.9	%
Gross Profit			1,551				1,899				(348	)			(18.3	)%
Operating expenses:
Selling, General and Administrative Expenses			11,097				9,504				1,593				16.8	%
Depreciation and amortization expenses			32				444				(411	)			(92.8	)%
Total operating expenses			11,129				9,947				1,182				11.9	%
Loss from operations			(9,578	)			(8,048	)			(1,530	)			19.0	%
Other income (expenses), net			47				(1,351	)			1,398				(103.5	)%
Interest expenses			(91	)			(208	)			117				(56.3	)%
Loss before income taxes			(9,622	)			(9,607	)			(15	)			0.2	%
Provision for income taxes			-				-				-				0.0	%
Net Loss			(9,622	)			(9,607	)			(15	)			0.2	%

Revenue

Revenue decreased by $0.2 million, or 7.3%, to $2.2 million, primarily reflecting the Company's ongoing transition from a managed services provider (MSP) model to a Software-as-a-Service (SaaS) model, which has resulted in changes to the timing and recognition of revenue. Despite this transition, the Company's customer engagement and transaction activity remain strong.

Cost of Revenue

Cost of revenue increased by $0.2 million, or 34.9%, to $0.7 million. The increase was primarily due to a higher number of physical events held for other customers during the nine months ended September 30, 2026 compared to the same period last year, which resulted in higher contract labor costs. This increase in cost of revenue occurred despite the overall decrease in revenue during the period, as the decline was concentrated on one customer, due to shifting of its opportunities, rather than a reduction in physical events overall.

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

SG&A expenses increased by $1.6 million, or 16.8%, to $11.1 million. The increase was primarily attributable to the write-off of previously capitalized service contracts, additional legal expenses associated with ongoing investigations and related legal matters, and non-cash expenses, including stock-based compensation recognized during the current year. These expenses contributed to the year-over-year increase in SG&A, partially offset by improvements in the Company's underlying operating cost structure.

Depreciation and Amortization Expense

Depreciation and amortization expenses decreased by $0.4 million, or 92.8%, to $0.03 million, primarily due to the impairment loss recognized on the software during the year ended December 31, 2025, and the Company no longer had any software assets subject to amortization during the nine months ended September 30, 2026.

Other Income (Expense), net

Other income (expenses), net was net other income of approximately $0.05 million for the nine months ended September 30, 2026 compared to a net expense of $1.4 million for the nine months ended September 30, 2025. The decrease was primarily attributable to changes in the classification of certain public company-related expenses, which were previously recorded within other expenses but are now recognized in their appropriate general ledger accounts and corresponding expense categories, resulting in a year-over-year variance.

Interest Expenses

Interest expenses decreased by $0.1 million, or 56.3%, to $0.1 million, primarily due to a lower outstanding short-term loan balance during the nine months ended September 30, 2026.

Net Loss

As a result of the foregoing, the net loss was $9.6 million during the nine months ended September 30, 2026 compared to the net loss of $9.6 million during the nine months ended September 30, 2025.

Non-GAAP Financial Measures

Non-GAAP Net Loss and Non-GAAP Net Loss per Share

The following table provides a reconciliation of net loss to non-GAAP net loss for the nine months ended September 30, 2026 and 2025:

		Nine Months Ended September 30,
		2026				2025
		(in thousands, except share and per share data)
Net Loss		$	(9,622	)		$	(9,607	)
Stock-based compensation expense			588				3,517
Non-GAAP net loss		$	(9,034	)		$	(6,090	)
Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted			6,781,534				2,074,380
Net loss per share - basic and diluted		$	(1.42	)		$	(4.63	)
Non-GAAP net loss per share - basic and diluted		$	(1.33	)		$	(2.94	)

Adjusted EBITDA

The following table provides a reconciliation of net loss to Adjusted EBITDA for the nine months ended September 30, 2026 and 2025:

		Nine Months Ended September 30,
		2026				2025
		(in thousands)
Net loss		$	(9,622	)		$	(9,607	)
Interest expenses			91				208
Provision for income taxes			-				-
Depreciation and amortization			32				443
Other (income) expenses, net			(47	)			1,351
Stock-based compensation expenses			588				3,517
Adjusted EBITDA		$	(8,958	)		$	(4,088	)

Liquidity and Capital Resources

Sources of Liquidity

Our primary liquidity needs for the next 12 months and beyond will include cash to (i) provide capital to facilitate the growth of our business, (ii) pay our short-term debt obligations, as discussed in the notes to the consolidated financial statements, and (iii) pay our operating expenses.

As of September 30, 2026 and December 31, 2025, we had cash and cash equivalents of $3.5 million and $1.6 million, respectively. Liquidity is a measure of our ability to meet potential cash requirements. We generally fund our operations with cash flow from operations, and, when needed, borrow funds from financial institutions. In addition, as we continue to grow, we expect to continue funding our operations by issuing shares of our common stock to a wider stockholder base, subject to market conditions.

Our principal use of liquidity has been to fund our daily operations and working capital and we expect that to continue for the next 12 months and beyond. We have incurred and continue to incur losses from operations and negative cash flows from operating activities. For the nine months ended September 30, 2026, we incurred a net loss of $9.6 million and used $5.4 million of cash in operating activities. As of September 30, 2026, we had an accumulated deficit of $31.1 million and short-term related-party debt obligations of $0.1 million, all of which will mature within the next twelve months.

Our ability to continue as a going concern depends upon our ability to attract and retain revenue-generating customers, acquire new customer contracts, implement cost control measures, and secure additional debt or equity financing. Management is always evaluating additional debt or equity financing alternatives, although there can be no assurance that any such financing will be available on acceptable terms or at all.

Based on our current cash resources, recurring losses, negative operating cash flows, and short-term debt obligations, we will require additional liquidity to fund our operating expenses and cash obligations over the next twelve months. There can be no assurance that we will be successful in obtaining new customer contracts, receiving related-party support when needed, implementing cost reductions, or securing additional financing. If we are unable to obtain sufficient liquidity, we may be required to delay, reduce, or eliminate certain operating activities or otherwise modify our business plans. As a result, management has concluded that substantial doubt exists about our ability to continue as a going concern. See Note 1 to our condensed consolidated financial statements, which are included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Contractual Obligations and Commitments

As of September 30, 2026, the Company had a total of $0.2 million in contractual obligations for future payments.

		As of September 30, 2026
(in thousands)		Payments due by period:
		Total				Less than 1 year				1 - 3 years				4 - 5 years				More than 5 years
Short-term debt		$	120			$	120			$	-			$	-			$	-
Operating lease payments			-				-				-				-				-
Total		$	120			$	120			$	-			$	-			$	-

As of September 30, 2026, we had outstanding short-term debt obligations of $0.1 million which mature within the next twelve months.

Capital Expenditures

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

During the nine months ended September 30, 2026 and 2025, we spent nil and $0.8 million, respectively, on capitalized software.

Off-Balance Sheet Arrangements

As of September 30, 2026, the Company did not have any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Cash flows for the nine months ended September 30, 2026 and 2025

(in thousands)
		Nine Months Ended September 30,
		2026				2025
Cash flows from operating activities:
Net loss			(9,622	)			(9,607	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			32				444
Non-cash lease expenses			68				56
Non-cash interest expenses			88				207
Stock-based compensation			588				3,517
Loss on extinguishment of debt			-				1,345
Gain on lease modification			(50	)			-
Changes in operating assets and liabilities:
Accounts receivable			232				(23	)
Advance - related party			-				(4,726	)
Prepaid expenses and other assets			2,660				(11	)
Other assets			914				-
Accounts payable			(133	)			(136	)
Other payable and accrued expenses			43				(157	)
Deferred revenue			(186	)			109
Other liabilities			41				-
Operating lease liabilities			(120	)			(53	)
Net cash used in operating activities			(5,445	)			(9,035	)
Cash flows from investing activity:
Purchase of capitalized internal-use software			-				(828	)
Net cash used in investing activity			-				(828	)
Cash flows from financing activities:
Proceeds from short-term loans - related party			310				2,827
Repayments of short-term loans - related party			(760	)			(2,000	)
Proceeds from issuance of shares			7,138				9,326
Payment for deferred offering costs			-				(28	)
Proceeds from exercise of stock options			731				-
Net cash provided by financing activities			7,419				10,125
Net change in cash, cash equivalents and restricted cash			1,974				262
Cash, cash equivalents and restricted cash at beginning of period			1,631				48
Cash, cash equivalents and restricted cash at end of period			3,605				310
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents			3,505				310
Restricted cash			100				-
Total cash, cash equivalents and restricted cash			3,605				310

Operating Activities

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

For the nine months ended September 30, 2026, net cash used in operating activities was $5.4 million, compared to $9.0 million during the nine months ended September 30, 2025. The decrease in cash outflow was primarily attributable to the absence of $4.7 million in advances to related parties made during the prior-year period, which was partially offset by a $2.9 million decrease in stock-based compensation expense and the absence of a $1.3 million non-cash loss on extinguishment of debt recognized in the prior-year period.

Investing Activity

Net cash used in investing activity decreased to nil for the nine months ended September 30, 2026, compared to $0.8 million for the nine months ended September 30, 2025. The decrease was due to the absence of expenditure for capitalized internal-use software during the current-year period.

Financing Activities

Net cash provided by financing activities was $7.4 million for the nine months ended September 30, 2026, compared to $10.1 million for the nine months ended September 30, 2025. The decrease was primarily attributable to a $2.2 million decrease in proceeds from the issuance of shares and a $2.5 million decrease in proceeds from short-term related-party loans received during the prior-year period. These decreases were partially offset by a $1.2 million decrease in repayments of short-term related-party loans and $0.7 million in proceeds from the exercise of stock options during the current-year period.

Critical Accounting Estimates

The preparation of the consolidated financial statements and accompanying notes included elsewhere in this Quarterly Report on Form 10-Q in conformity with U.S. GAAP requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We base our estimates on historical experience, management's best knowledge of current events, actions that the Company may undertake in the future, and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Our actual results could differ from these estimates under different assumptions or conditions. Refer to "Critical Accounting Policies and Estimates" contained in Part II, Item 7 of the Annual Report for a complete discussion of our critical accounting policies and estimates. There have been no material changes to our critical accounting policies and estimates since the Annual Report.