TEN Holdings Inc(XHLD) - 2025 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2025 was $543,000, a slight increase from $535,000 in Q3 2024, while revenue for the nine months ended September 30, 2025, was $2,398,000, down from $2,686,000 in the same period of 2024[11]. - Gross profit for Q3 2025 was $405,000, compared to $426,000 in Q3 2024, and for the nine months ended September 30, 2025, gross profit was $1,899,000, down from $2,152,000 in 2024[11]. - Net loss for Q3 2025 was $1,987,000, compared to a net loss of $975,000 in Q3 2024, and the net loss for the nine months ended September 30, 2025, was $9,607,000, up from $1,801,000 in 2024[11]. - Total revenues decreased by $288,000, or 10.7%, to $2,398,000, primarily due to a $403,000 decrease in virtual and hybrid events revenue[143]. - Gross profit declined by $253,000, or 11.8%, to $1,899,000, reflecting the decrease in total revenues[143]. - Net loss increased to $9,607,000 for the nine months ended September 30, 2025, compared to a net loss of $1,801,000 for the same period in 2024, representing a 433.4% increase[148]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $(4,088,000), compared to $(1,607,000) in 2024[154]. Operating Expenses - Operating expenses for Q3 2025 increased to $2,332,000 from $1,325,000 in Q3 2024, with selling, general and administrative expenses rising significantly to $2,185,000 from $1,311,000[11]. - Selling, General and Administrative (SG&A) expenses surged by $5,745,000, or 152.8%, to $9,504,000, largely due to $3,500,000 in stock compensation expenses[144]. - Selling, General and Administrative (SG&A) expenses rose by $874,000, or 66.7%, to $2,185,000 due to increased costs associated with being a public entity[131]. Cash Flow and Liquidity - Cash and cash equivalents increased to $310,000 as of September 30, 2025, from $48,000 at the end of 2024[9]. - Net cash used in operating activities increased to $9,035,000 in 2025 from $1,763,000 in 2024, primarily due to a higher net loss[164]. - Net cash provided by financing activities rose significantly to $10,125,000 in 2025 from $2,480,000 in 2024, driven by proceeds from the issuance of shares[166]. Assets and Liabilities - Total assets as of September 30, 2025, were $10,746,000, up from $6,424,000 at the end of 2024[9]. - Total liabilities decreased to $6,962,000 as of September 30, 2025, from $8,024,000 at the end of 2024[9]. - Shareholders' equity improved to $3,784,000 as of September 30, 2025, compared to a deficit of $1,600,000 at the end of 2024[9]. Stock and Financing - The Company completed its IPO on February 18, 2025, issuing 1,667,000 shares at a price of $6.00 per share, resulting in net proceeds of approximately $8,900 after expenses[93]. - The company issued 4,454,818 shares of common stock at a weighted average price of $0.32 per share, totaling $945,542, after September 30, 2025[114]. - The company entered into a purchase agreement with Lincoln Park to purchase up to an aggregate of $20,000,000 of common stock over a 24-month term, with 882,145 shares issued on June 23, 2025[175]. Customer Dependency - The Company is dependent on attracting and retaining revenue-generating customers and acquiring new customer contracts to continue as a going concern[26]. - For the nine months ended September 30, 2025 and 2024, one customer accounted for more than 10% of the Company's total revenue in both periods[42]. Legal and Compliance - The company received a deficiency letter from Nasdaq on June 30, 2025, indicating non-compliance with the bid price requirement, with a compliance period until December 29, 2025[176]. - The company intends to consider a reverse stock split to regain compliance with Nasdaq requirements, with stockholder authorization for a split in the range of 1-for-10 to 1-for-20[177]. - The company received a grand jury subpoena from the U.S. Attorney's Office related to its initial public offering, and is cooperating with the investigation[181]. Operational Focus - The company is focused on expanding its event platform, the Xyvid Pro Platform, to enhance virtual and hybrid event experiences for clients[20]. - The Company operates as one segment, generating revenue from Hybrid and Virtual Events and Physical Events[40].