TEN Holdings, Inc. 10-K

Item 9A. 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 December 31, 2024 and determined that the disclosure controls and procedures were effective at a reasonable assurance level as of that date. Internal Control Over Financial Reporting Management’s annual report on internal control over financial reporting. This annual report does not include a report of management’s assessment regarding internal control over financial reporting, due to a transition period established by rules of the SEC for newly public companies. Attestation report of the registered public accounting firm. This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this annual report. Changes in 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 fourth fiscal quarter of the fiscal year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information. None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not Applicable. 38 PART III Item 10. Directors, Executive Officers and Corporate Governance. Board of Directors Our board of directors consists of five directors, two of whom are “independent” within the meaning of the corporate governance standards of the Nasdaq listing rules and meet the criteria for independence set forth in Rule 10A-3 of the Exchange Act. Set forth below is information concerning our directors. Name Age Director Since Independent Occupation Randolph Wilson Jones III 55 2024 No Chief Executive Officer and Director of the Company John M. Orobono Jr. 43 2024 No Secretary, Chief Financial Officer and Director of the Company Naoaki Mashita 47 2024 No Director of the Company, chief executive officer of V-Cube, Inc. David Price 40 2025 Yes Managing partner of Avonwood Capital Partners Private Equity Fund, chief financial officer of TZVECL DBA Elevate Eyecare Justin Sherrock 42 2025 Yes Chief financial officer and Chief operating officer of Car Dealership Guy, LLC Mr. Randolph Wilson Jones III has served as our Chief Executive Officer since August 2024, and our Director since October 2024. Since March 2023, Mr. Jones has been the chief executive officer of Xyvid, Inc., our subsidiary, where he is responsible for the overall management of the company. From October 2020 to March 2023, Mr. Jones was the chief revenue officer of Anodot, Inc., where he oversaw sales, marketing, and client experience for the company. From October 2017 to March 2023, Mr. Jones was the chief revenue officer of ScienceLogic, Inc., where he managed the company’s global sales. Mr. Jones received his bachelor’s degree in Business Administration from the University of Dayton in 1991. Mr. John M. Orobono Jr. has served as our Secretary since February 2024, and our Chief Financial Officer and Director since October 2024. From August 2019 to July 2022, Mr. Orobono was the vice president of finance of Getta Holdings, Inc, where he was in charge of the company’s accounting and finance matters. From July 2018 to July 2019, he served as a financial planning and analysis leader at Sues WTS USA, Inc, where he was responsible for accounting and finance, and from June 2015 to April 2018, Mr. Orobono was a controller at McCaffrey’s Food Markets, also overseeing accounting and finance. Mr. Orobono received his bachelor’s degree in Finance and Marketing from Lehigh University in 2004 and his master’s degree in Accounting from Saint Joseph’s University in 2008. Mr. Naoaki Mashita has served as our Director since February 2024. Since 1998, Mr. Mashita has been the chief executive officer of V-Cube, Inc., our parent company, and was responsible for the company’s overall management. From November 2018 to August 2019, Mr. Mashita was the chief executive officer and president at Sensyn Robotics, Inc., where he oversaw the company’s daily operations. Mr. Mashita currently serves on the board of directors for Sumitomo Mitsui Trust Bank Limited, Ushio Inc., and Micin Inc. Mr. Mashita received his bachelor’s degree in Computer Science from Keio University in 2000 and his master’s degree in Computer Science from Keio University Graduate School in 2002. We believe Mr. Mashita has the requisite qualifications to serve as our Director because of his expertise in business management. Mr. David Price has served as our Independent Director since February 2025. Since January 2023, Mr. Price has served as the managing partner at Avonwood Capital Partners Private Equity Fund, where he oversees and manages investments in the healthcare space. Since April 2019, Mr. Price has served as the chief financial officer at TZVECL DBA Elevate Eyecare. From December 2016 to January 2022, Mr. Price was the founder and chief executive officer of Trailblaze CFO LLC, a project-based CFO consulting firm. From April 2011 to December 2016, Mr. Price was the chief financial officer of RevZilla Motorsports, LLC. Mr. Price received his bachelor’s degree in Business Administration from Drexel University in 2007 and his master’s degree in business administration from Villanova University in 2016. We believe Mr. Price has the requisite qualifications to serve as our Independent Director because of his expertise in business management and finance. Mr. Justin Sherrock has served as our Independent Director since February 2025. Since January 2024, Mr. Sherrock has served as the CFO and COO of Car Dealership Guy, LLC, where he manages the day-to-day operations and finance functions. From April 2021 to December 2023, Mr. Sherrock was the CEO and a director of Danis Auto Sales, LLC, dba Gettacar, where he led all business operations and finance. From December 2019 to April 2021, Mr. Sherrock was the senior vice president of I Fund Philly, LLC, dba I Fund Cities, where he led the development of an investment fund. From February 2018 to December 2019, Mr. Sherrock was the CEO of Opa Philly I, LLC where he owned a multi-unit restaurant franchise. Mr. Sherrock received his bachelor’s degree in Industrial Engineering from the Pennsylvania State University in 2005. We believe Mr. Sherrock has the requisite qualifications to serve as our Independent Director because of his extensive management experience. 39 Executive Officers Set forth below is information concerning our executive officers. Name Age Position(s) Randolph Wilson Jones III 55 Chief Executive Officer and Director of the Company John M. Orobono Jr. 43 Secretary, Chief Financial Officer and Director of the Company Mr. Randolph Wilson Jones III, a Director of the Company, is the Chief Executive Officer of the Company. His biographical information is set forth above under “—Board of Directors.” Mr. John M. Orobono Jr., a Director of the Company, is the Chief Financial Officer of the Company. His biographical information is set forth above under “—Board of Directors.” Family Relationships There is no family relationship among any directors, or executive officers. Section 16(a) Compliance Section 16(a) of the Exchange Act requires our directors and executive officers and those who beneficially own more than 10% of shares of our common stock to file initial reports of ownership and reports of changes in ownership of our common stock with the SEC. You can view these reports on the SEC’s website at www.sec.gov. During the year ended December 31, 2024, none of our officers, directors, or greater than 10% beneficial owners were subject to the filing requirements of Section 16(a) of the Exchange Act. Code of Business Conduct and Ethics Our board of directors has adopted a code of business conduct and ethics, which is applicable to all of our directors, officers, and employees. The Code of Ethics is filed as an exhibit to this annual report and also publicly available in the Governance section of the Investors tab on the Company’s website at https://www.tenholdingsinc.com/. We intend to post any amendments to or waivers from the Code of Ethics that apply to our principal executive officer, principal financial officer, and principal accounting officer, or persons performing similar functions, on our website. Corporate Governance There have been no material changes to the procedures by which our stockholders may recommend nominees to our board of directors. 40 Board Diversity The composition of our board of directors currently includes one individual who is diverse under the Nasdaq Listing Rule 5605(f) regarding board diversity, as presented in the below Board Diversity Matrix. Under Nasdaq Listing Rule 5605(f), directors who self-identify as (i) female, (ii) an underrepresented minority or (iii) LGBTQ+ are defined as being diverse. The following chart summarizes certain self-identified personal characteristics of our directors, in accordance with Nasdaq Listing Rule 5605(f) as of the date of this annual report. Each term used in the table has the meaning given to it in the rule and related instructions: Board Diversity Matrix Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors - 5 - - Part II: Demographic Background African American or Black - - - - Alaskan Native or Native American - - - - Asian - 1 - - Hispanic or Latino - - - - Native Hawaiian or Pacific Islander - - - - White - 4 - - Two or More Races or Ethnicities - - - - LGBTQ+ - - - - Did Not Disclose Demographic Background - - - - Controlled Company V-Cube, Inc. beneficially owns more than a majority of the aggregate voting power of our outstanding common stock shares. V-Cube, Inc. is a Japanese company listed on the Tokyo Stock Exchange and its chief executive officer, Naoaki Mashita, has served as our Director since February 2024 and is our minority stockholder. As a result of our shareholding structure, we are a “controlled company” within the meaning of the Nasdaq listing rules. As a controlled company, we are permitted to elect to rely on certain exemptions from the obligations to comply with certain corporate governance requirements, including: ● the requirement that a majority of the board of directors consist of independent directors; ● the requirement that our director nominees be selected or recommended solely by independent directors; and ● the requirement that we have a nominating and corporate governance committee and a compensation committee that are composed entirely of independent directors with a written charter addressing the purposes and responsibilities of the committees. We rely on the “controlled company” exemptions under the Nasdaq listing rules. Specifically, we will not form the nominating and corporate governance and compensation committees, and a majority of our board of directors does not consist of independent directors, as permitted by the “controlled company” exemptions under the Nasdaq listing rules. In the event that we cease to be a “controlled company” and our common stock continues to be listed on Nasdaq, our board of directors will take all action necessary to comply with the corporate governance rules of Nasdaq, including, but not limited to, establishing certain committees composed entirely of independent directors, subject to a permitted “phase-in” period. As a result of our election to rely on the “controlled company” exemptions, you would not have the same protection afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. S Notwithstanding the Company’s status as a “controlled company,” the Company remains subject to the corporate governance standard of Nasdaq that requires the Company to have an audit committee with at least three independent directors as well as composed entirely of independent directors. We will form an audit committee that will consist of three independent directors and we intend to phase in our compliance with the relevant audit committee composition requirements under the Nasdaq listing rules by having two independent directors at the time of our listing, and three independent directors within one year of our listing. 41 Committees of the Board of Directors Audit Committee. We have established an audit committee and adopted a charter for the audit committee. The charter can be found in the Governance section of the Investors tab on the Company’s website at https://www.tenholdingsinc.com/. Our audit committee consists of David Price, Justin Sherrock, and Randolph Wilson Jones III. Justin Sherrock is the chairperson of our audit committee. We have determined that David Price and Justin Sherrock satisfy the “independence” requirements of the Nasdaq listing rules under and Rule 10A-3 under the Exchange Act. Randolph Wilson Jones III will be replaced with an independent director within one year of our listing, so that upon one year of our listing, the audit committee will consist solely of independent directors. Our board of directors has also determined that Justin Sherrock qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq listing rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our Company. The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing with the independent auditors any audit problems or difficulties and management’s response; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. Compensation Committee. Because we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq, we are not required to, and do not currently expect to, have a compensation committee. If and when we are no longer a “controlled company”, we will be required to establish a compensation committee. We anticipate that any such compensation committee will consist of three directors who will be “independent” under the rules of the SEC, subject to the permitted “phase-in” period pursuant to the rules of Nasdaq. Upon formation of a compensation committee, we will expect to adopt a compensation committee charter defining the committee’s primary duties in a manner consistent with the rules of the SEC and Nasdaq standards. Nominating and Corporate Governance Committee. Because we are a “controlled company” within the meaning of the corporate governance standards of Nasdaq, we are not required to, and do not currently expect to, have a nominating and corporate governance committee. If and when we are no longer a “controlled company”, we will be required to establish a nominating and corporate governance committee. We anticipate that any such nominating and corporate governance committee will consist of three directors who will be “independent” under the rules of the SEC, subject to the permitted “phase-in” period pursuant to the rules of Nasdaq. Upon formation of a nominating and corporate governance committee, we will expect to adopt a nominating and corporate governance committee charter defining the committee’s primary duties in a manner consistent with the rules of the SEC and Nasdaq standards. Insider Trading Policy Our board of directors adopted an Insider Trading Policy, which prohibits, among other things, our directors, officers, and employees from engaging in any hedging or monetization transactions with respect to the Company’s securities. In addition, our Insider Trading Policy prohibits our directors, officers, and employees from engaging in certain short-term or speculative transactions in the Company’s securities, such as short-term trading, short sales, and publicly traded options, which could create heightened legal risk and/or the appearance of improper or inappropriate conduct by our directors, officers, and employees. Our Insider Trading Policy is filed as an exhibit to this annual report. 42 Item 11. Executive Compensation. This section provides an overview of our executive and director compensation programs. We meet the requirements of a “smaller reporting company” and have utilized the scaled reporting requirements available to qualifying companies. Summary Compensation Table The following table sets forth, for the fiscal years ended December 31, 2024, and 2023, the dollar value of all cash and noncash compensation earned by any person that was our principal executive officer (“PEO”) or other executive officer(s) during the last fiscal year. Name and Principal Position Year Salary ($) (1) Bonus ($) Stock Awards ($) Option Awards ($) (2) Non-Equity Incentive Plan Compensation ($) Non- Qualified Deferred Compensation Earnings ($) All Other Compensation ($) Totals ($) Randolph Wilson Jones III, CEO and Director 2024 298,077 132,536 — 4,321,644 (3) — — — 4,752,257 2023 (1) 204,808 145,000 — — — — — 349,808 John M. Orobono Jr., Secretary, CFO and Director 2024 162,077 25,000 — 864,798 (4) — — — 1,051,875 2023 (1) 51,365 6,000 — — — — — 57,365 Notes: (1) Randolph Wilson Jones III, our CEO and Director, and John M. Orobono Jr., our CFO, Secretary, and Director, started receiving compensation for services rendered to our subsidiary, TEN Events, Inc., during the fiscal year of 2023. Such persons have also served at our Company since February 2024. (2) For a summary of all assumptions made in the valuation of the option awards, see “Note 13 – Equity incentive plan” to our consolidated financial statements included elsewhere herein. (3) In October 2024, the Company granted options to purchase 1,381,750 shares of the Company’s common stock with an exercise price of $0.46 per share. The options are subject to the following vesting terms: 60% vested upon the completion of the Company’s initial public offering, and the remaining 40% have a one-year cliff, wherein approximately 13.3% of the award will vest in October 2025 and the remaining award will thereafter vest in equal monthly installments, commencing November 2025 until October 2027, so that all the shares subject to the options shall vest by October 2027. These options have an expiration date of October 10, 2034. (4) In October 2024, the Company granted options to purchase 276,500 shares of the Company’s common stock with an exercise price of $0.46 per share. The options are subject to the following vesting terms: 25% vested upon the completion of the Company’s initial public offering, and the remaining 75% have a one-year cliff, wherein 25% of the award will vest in October 2025 and the remaining award will thereafter vest in equal monthly installments, commencing November 2025 until October 2027, so that all the shares subject to the options shall vest by October 2027. These options have an expiration date of October 10, 2034. 43 Employment Agreements with Our Named Executive Officers Our Company, TEN Holdings, Inc., has entered into employment agreements with Randolph Wilson Jones III, our CEO, and John M. Orobono Jr., our Secretary and CFO. A summary of the terms of the current employment agreements with our Company is set forth below. Employment Agreements with Randolph Wilson Jones III Pursuant to the offer letter by and between our Company, TEN Holdings, Inc., and Randolph Wilson Jones III, dated August 1, 2024, Mr. Jones serves as the CEO for TEN Holdings, Inc., and is entitled to (i) an annual salary of $300,000, minus applicable taxes; (ii) a quarterly performance bonus which provides annual at-target earnings of $200,000; (iii) 5% equity stock of TEN Holdings, Inc., to be determined upon establishment of the Company’s equity plan; (iv) stock options to acquire 20,000 shares of stock of our parent company, V-Cube, Inc., and (v) certain benefit plans and a 401(k) retirement plan. Either party may terminate the employment relationship at any time without cause, and with or without notice. Employment Agreements with John M. Orobono Jr. Pursuant to the offer letter by and between our Company, TEN Holdings, Inc., and John M. Orobono Jr., dated November 4, 2024, Mr. Orobono serves as the CFO for TEN Holdings, Inc., and is entitled to (i) an annual salary of $215,000, minus applicable taxes; (ii) an annual bonus of 20% of the salary, depending on the business performance; (iii) 1% equity stock of TEN Holdings, Inc., to be determined upon establishment of the Company’s equity plan; and (iv) certain benefit plans and a 401(k) retirement plan. Either party may terminate the employment relationship at any time without cause, and with or without notice. Equity Awards to Named Executive Officers On September 5, 2024, the Company’s board of directors adopted an equity incentive plan (the “Plan”) under which an aggregate of 10% of the Company’s authorized shares of common stock, which equals 12,500,000 shares of common stock, were reserved for issuance. On September 27, 2024, the Company’s board of directors and then sole stockholder approved the resolution to change the maximum number of shares of common stock of the Company reserved and available for granting awards under the Plan from 12,500,000 to 4,000,000. The Plan allows for the issuance of options, stock appreciation rights, restricted stock, restricted stock unit, performance award, dividend equivalent, and other stock-based award to selected employees, officers, directors and consultants, for them to acquire a proprietary interest in the growth and performance of the Company. 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 2,640,250 shares of common stock at an exercise price of $0.46 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. Pursuant to the stock award agreements, an aggregate of 1,122,925 shares of common stock vested upon the completion of the Company’s initial public offering. The total value of the stock options granted on October 10, 2024 under the Company’s 2024 equity incentive plan was $8,257,803 as of such grant date. 44 A summary of the number and the value of the outstanding equity awards as of December 31, 2024, held by the named executive officers is set out in the table below. Outstanding Equity Awards at Fiscal Year-End Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Randolph Wilson Jones III — — 1,381,750 (1) 0.46 October 10, 2034 — — — — John M. Orobono Jr. — — 276,500 (2) 0.46 October 10, 2034 — — — — Notes: (1) In October 2024, the Company granted options to purchase 1,381,750 shares of the Company’s common stock with an exercise price of $0.46 per share. The options are subject to the following vesting terms: 60% vested upon the completion of the Company’s initial public offering, and the remaining 40% have a one-year cliff, wherein approximately 13.3% of the award will vest in October 2025 and the remaining award will thereafter vest in equal monthly installments, commencing November 2025 until October 2027, so that all the shares subject to the options shall vest by October 2027. (2) In October 2024, the Company granted options to purchase 276,500 shares of the Company’s common stock with an exercise price of $0.46 per share. The options are subject to the following vesting terms: 25% vested upon the completion of the Company’s initial public offering, and the remaining 75% have a one-year cliff, wherein 25% of the award will vest in October 2025 and the remaining award will thereafter vest in equal monthly installments, commencing November 2025 until October 2027, so that all the shares subject to the options shall vest by October 2027. Retirement Benefits for Our Named Executive Officers We maintain a 401(k) plan and other medical, dental and vision benefit plans in which our named executive officers are eligible to participate. Such benefits are generally available to all full-time employees. Clawback We have adopted a Compensation Recovery Policy effective as of February 2025 that complies with the Nasdaq’s new clawback rules promulgated under the SEC’s Rule 10D-1. Under this policy, a committee composed of independent members of the board must determine and recover the excess compensation related to all incentive-based compensation that was paid to our executive officers based on financial statements that were subsequently restated. The policy provides that if the committee determines that there has been a material restatement of publicly issued financial results from those previously issued to the public, the committee will review all incentive-based compensation made to executive officers during the three-year period prior to the restatement. If such payments would have been lower had they been calculated based on such restated results, our committee will recoup the payments in excess of the amount that would have been received had it been determined based on the restated amounts. Additionally, the Sarbanes-Oxley Act of 2002 subjects incentive-based compensation and stock sale profits of our CEO and CFO to forfeiture in the event of an accounting restatement resulting from any non-compliance, as a result of their misconduct, with any financial reporting requirement under securities laws. 45 Compensation of Directors The compensation of our directors is set by our board of directors. Naoaki Mashita, our Director, has served without receiving any compensation for services rendered to our Company or our subsidiary for the fiscal year ended December 31, 2024. The Company did not pay Randolph Wilson Jones III or John M. Orobono Jr. for their services as directors of the Company for the fiscal year ended December 31, 2024, in addition to the compensation awarded pursuant to their respective employment agreements with the Company for their services as executive officers of the Company as disclosed herein. Timing of Grants of Certain Equity Awards We do not have any formal policies regarding the timing of awards of options in relation to the disclosure of material nonpublic information. During the year ended December 31, 2024, none of our named executive officers were awarded options with an effective grant date during any period beginning four business days before the filing or furnishing of a Form 10-Q, Form 10-K, or Form 8-K that disclosed material nonpublic information and ending one business day after the filing or furnishing of such reports. If we grant additional options in the future, it is anticipated that the board of directors will take material nonpublic information into account when determining the timing and terms of such an award, with the goal being to not grant such awards close in time to the release of any material nonpublic information. We have never timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Compensation Committee Interlocks and Insider Participation The Company is not required to provide the disclosure required for Compensation Committee Interlocks and Insider Participation under Item 407(e)(4) of Regulation S-K, since it qualifies as a smaller reporting company. Compensation Committee Report The Company is not required to provide the disclosure required for Compensation Committee Report under Item407(e)(5) of Regulation S-K, since it qualifies as a smaller reporting company. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Equity Incentive Plan The following table provides information regarding shares outstanding and available for issuance under our existing equity compensation plan as of December 31, 2024. Number of Plan category Number of shares of common stock to be issued upon vesting of outstanding options Weighted-average exercise price of outstanding options shares of common stock remaining available for future issuance under the equity incentive plan Equity compensation plans approved by security holders 0 $ 0.46 2,640,250 Equity compensation plans not approved by security holders — — — Total 0 $ 0.46 2,640,250 46 On September 5, 2024, the Company’s board of directors adopted an equity incentive plan (the “Plan”) under which an aggregate of 10% of the Company’s authorized shares of common stock, which equals 12,500,000 shares of common stock, were reserved for issuance. On September 27, 2024, the Company’s board of directors and then sole stockholder approved the resolution to change the maximum number of shares of common stock of the Company reserved and available for granting awards under the Plan from 12,500,000 to 4,000,000. The Plan allows for the issuance of options, stock appreciation rights, restricted stock, restricted stock unit, performance award, dividend equivalent, and other stock-based award to selected employees, officers, directors and consultants, for them to acquire a proprietary interest in the growth and performance of the Company. 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 2,640,250 shares of common stock at an exercise price of $0.46 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. Pursuant to the stock award agreements, an aggregate of 1,122,925 shares of common stock vested upon the completion of the Company’s initial public offering. The total value of the stock options granted on October 10, 2024 under the Company’s 2024 equity incentive plan was $8,257,803 as of such grant date. Principal Stockholders The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our common stock as of the date of this annual report. Beneficial ownership includes voting or investment power with respect to the securities. Except as indicated below, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all common stock shown as beneficially owned by them. Percentage of beneficial ownership of each listed person is based on 28,693,442 shares of common stock outstanding. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to the securities. In computing the number of shares of common stock beneficially owned by persons listed below and the percentage ownership of such persons, shares of common stock underlying options, warrants, or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this annual report are outstanding, but are not outstanding for computing the percentage ownership of any other person. Common Stock Beneficially Owned Number Percent Directors and Named Executive Officers (1) : Randolph Wilson Jones III 829,050 (4) 2.9 % John M. Orobono Jr. 69,125 (5) * Naoaki Mashita (2)(3) 689,130 2.4 % David Price 16,222 (6) * Justin Sherrock 222 (7) * All directors and named executive officers as a group (5 individuals): 705,130 (8) 2.5 % 5% Stockholders: V-Cube, Inc. (3) 22,800,000 79.5 % Notes: * Represents less than 1% of beneficial ownership. (1) Unless otherwise indicated, the business address of each of the individuals is 1170 Wheeler Way, Langhorne, PA 19047. (2) Represents 689,130 shares of common stock issued to Mr. Naoaki Mashita on December 23, 2024, pursuant to the partial conversion of the convertible promissory note in the principal amount of $317,000 held by Mr. Naoaki Mashita, upon the conversion of the outstanding principal at a conversion price of $0.46 per share. (3) The number of shares of common stock beneficially owned represents 22,800,000 shares of common stock held by V-Cube, Inc., a Japanese company listed on the Tokyo Stock Exchange, which does not have any 50% shareholder as of the date of this annual report. No natural person exercises voting and/or dispositive power over the shares held by V-Cube, Inc. The chief executive officer of V-Cube, Inc. is Naoaki Mashita, our Director and our minority stockholder. The registered address of V-Cube, Inc. is NBF Platinum Tower, 16-17/F 1-17-3 Shirokane 108-0072, Tokyo. 47 (4) Represents 829,050 shares of common stock underlying the stock options granted to Randolph Wilson Jones III under the Company’s 2024 equity incentive plan, which options vested upon the completion of the Company’s initial public offering. The Company has granted Randolph Wilson Jones III options to purchase 1,381,750 shares of common stock with an exercise price of $0.46 per share. The options will be subject to the following vesting terms: 60% vested upon the completion of the Company’s initial public offering, and the remaining 40% have a one-year cliff, wherein approximately 13.3% of the award will vest in October 2025 and the remaining award will thereafter vest in equal monthly installments, commencing November 2025 until October 2027, so that all the shares subject to the options shall vest by October 2027. (5) Represents 69,125 shares of common stock underlying the stock options granted to John M. Orobono Jr. under the Company’s 2024 equity incentive plan, which options vested upon the completion of the Company’s initial public offering. The Company has granted John M. Orobono Jr. options to purchase 276,500 shares of common stock with an exercise price of $0.46 per share. The options will be subject to the following vesting terms: 25% vested upon the completion of the Company’s initial public offering, and the remaining 75% have a one-year cliff, wherein 25% of the award will vest in October 2025 and the remaining award will thereafter vest in equal monthly installments, commencing November 2025 until October 2027, so that all the shares subject to the options shall vest by October 2027. (6) Represents 16,000 shares of common stock personally owned by David Price, and 222 shares of common stock underlying the stock options granted to David Price under the Company’s 2024 equity incentive plan. The Company has granted David Price options to purchase 4,000 shares of common stock with an exercise price of $0.46 per share. The options vest in equal monthly installments, commencing in February 2025 when the director’s appointment became effective and will fully vest three years thereafter. (7) Represents 222 shares of common stock underlying the stock options granted to Justin Sherrock under the Company’s 2024 equity incentive plan. The Company has granted Justin Sherrock options to purchase 4,000 shares of common stock with an exercise price of $0.46 per share. The options vest in equal monthly installments, commencing in February 2025 when the director’s appointment became effective and will fully vest three years thereafter. (8) Excluding the shares of common stock underlying the stock options granted to Randolph Wilson Jones III (CEO and Director), John M. Orobono Jr. (CFO and Director), David Price and Justin Sherrock (each, an independent Director) but not exercised under the Company’s 2024 equity incentive plan, as mentioned in the notes above. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our Company. Item 13. Certain Relationships and Related Transactions, and Director Independence. Board and Committee Independence The board of directors determines whether each of our directors is considered independent. For a director to be considered independent, the director must meet the bright-line independence standards under the Nasdaq listing standards. The board of directors must also affirmatively determine that, in its opinion, each director has no relationship that would interfere with the directors’ exercise of independent judgment in carrying out the director’s responsibilities. In addition to the Nasdaq listing standards, the board of directors will consider all relevant facts and circumstances in determining whether a director is independent. There are no family relationships among any of our directors, director nominees, and executive officers. The Board has determined that two of our current five directors, David Price and Justin Sherrock, satisfy the independence requirements of Nasdaq. A majority of our board of directors does not consist of independent directors, as permitted by the “controlled company” exemptions under the Nasdaq listing rules. See “Item 10. Directors, Executive Officers and Corporate Governance—Controlled Company.” 48 Material Transactions with Related Parties The following is a description of transactions since January 1, 2024 to which we were a party in which (i) the amount involved exceeded or will exceed the lesser of (A) $120,000 or (B) one percent of our average total assets at year end for the last two completed fiscal years and (ii) any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of, or person sharing the household with, any of the foregoing persons, who had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control, and other similar arrangements, which are described under “Item 11. Executive Compensation.” These related parties of the Company with whom transactions are reported in these financial statements are as follows: Name of Related Parties Nature of Relationship on December 31, 2024 Dyventive, Inc A company controlled by Dave Kovalcik, the director of V-Cube, Inc., the principal stockholder of the Company GHDLCK, LLC A company controlled by Karen Kovalcik, wife of Dave Kovalcik, the director of V-Cube, Inc., the principal stockholder of the Company PharMethod, Inc A company controlled by Dave Kovalcik, the director of V-Cube, Inc., the principal stockholder of the Company V-Cube, Inc. The principal stockholder of the Company. Wizlearn Technologies Pte. Ltd. An affiliate of the Company and a subsidiary of V-Cube, Inc. Naoaki Mashita Chief Executive Officer of V-Cube, Inc., the principal stockholder of the Company In the ordinary course of business, during the years ended December 31, 2024 and 2023, the Company was involved in certain transactions, either at cost or current market prices, and on the normal commercial terms with related parties. The Company had the following related party balances as of December 31, 2024 and 2023 (in thousands): December 31, Nature of transactions 2024 2023 Receivable due from related parties: 　 　 　 　 　 Dyventive, Inc Accounts receivable related to sales from delivered events $ — $ 15 PharMethod, Inc Accounts receivable related to sales from delivered events — 20 Payable due to related party: GHDLCK, LLC Accounts payable related to rental expenses 83 48 PharMethod, Inc Accounts payable related to operating expenses 73 — Short-term loans due to related parties: 　 　 V-Cube, Inc. Loan payable for working capital 4,062 735 Wizlearn Technologies Pte. Ltd. Loan payable for working capital 1,555 955 During the years ended December 31, 2024 and 2023, TEN Events, Inc. entered into loan agreements with V-Cube, Inc., the principal stockholder of the Company, for the principal amounts of $4,062,000 in aggregate. No repayment was made during the years ended December 31, 2024 and 2023, and $4,062,000 was outstanding as of December 31, 2024. The interest rate of the loans is 6.0%, and the interest expense during the year ended December 31, 2024 was $115,000. The maturity date of the loans was originally December 31, 2024. On December 30, 2024, TEN Events, Inc. and V-Cube, Inc. agreed to extend the maturity date of the existing loan agreements from December 31, 2024 to March 31, 2025. Between October 2024 to January 2025, TEN Events, Inc. obtained additional loans in an amount of $1,095,000 from V-Cube, Inc. The outstanding aggregate principal balance of the loans due to V-Cube, Inc., as of January 31, 2025, was $4,187,000. 49 During the years ended December 31, 2024 and 2023, TEN Events, Inc. entered into loan agreements with Wizlearn Technologies Pte. Ltd., an affiliate of the Company, for the principal amounts of $1,555,000. No repayment was made during the years ended December 31, 2024 and 2023, and $1,555,000 was outstanding as of December 31, 2024. The interest rate of the loans is 6.0%, and the interest expense during the year ended December 31, 2024 was $89,000. The maturity date of the loans was originally December 31, 2024. On December 30, 2024, TEN Events, Inc. and Wizlearn Technologies Pte. Ltd agreed to extend the maturity date of the existing loan agreements from December 31, 2024 to March 31, 2025. Between October 2024 to January 2025, TEN Events, Inc. obtained additional loans in an amount of $259,500 from Wizlearn Technologies Pte. Ltd. The outstanding aggregate principal balance of the loans due to Wizlearn Technologies Pte. Ltd, as of January 31, 2025, was $1,814,500. On March 25, 2024, TEN Events, Inc. entered into a certain Agreement for Loan Conditions with Naoaki Mashita, our Director and the chief executive officer of V-Cube, Inc., the Company’s controlling stockholder, pursuant to which loan agreement, Mr. Mashita agreed to provide a loan to TEN Events, Inc. in the principal amount of $317,000, bearing interest at an annual interest rate of 6.0%, with an original repayment date of December 31, 2024, and which loan agreement was assigned to and assumed by the Company on September 5, 2024, and the indebtedness thereunder was memorialized in a convertible promissory note delivered on such date with the same terms, which convertible promissory note was convertible, in whole or in part, into shares of common stock of the Company prior to the maturity thereof. The interest expense during the year ended December 31, 2024 was $14,000. On December 23, 2024, we issued 689,130 shares of common stock to Mr. Naoaki Mashita, pursuant to the partial conversion of the convertible promissory note in accordance with the terms thereof, and on the same date, the Company and Mr. Mashita agreed to extend the repayment date relative to the outstanding interest component of such indebtedness as of such date of December 31, 2024 to March 31, 2025, pursuant to amendments to each of the Agreement for Loan Conditions and the convertible promissory note, entered into by the parties thereto. The repayment date of the outstanding interest due on the convertible promissory note was further extended on March 19 , 2025, to December 31, 2025, pursuant to amendments to each of the Agreement for Loan Conditions and the convertible promissory note. The Company had the following related party transactions for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Nature of transactions 2024 2023 Revenue from related parties: Dyventive, Inc Sales from delivered events $ 33 $ 142 PharMethod, Inc Sales from delivered events 47 250 Selling, General and Administrative Expenses with related party: GHDLCK, LLC Rental expense for the Company’s office 100 108 The Company leases the office from its related party, GHDLCK, LLC. The aggregate amount of all rental payments due after December 31, 2023 is $789,000. For the material terms of the lease agreement with GHDLCK, LLC, see “Item 1. Business—Property, Plants and Equipment.” Item 14. Principal Accounting Fees and Services. Audit Fees For the years ended December 31, 2024 and 2023, we incurred aggregate fees and expenses (in thousands) of $236 and $125, respectively, from Grassi & Co., CPAs, P.C. for works completed for our annual audits. Years ended December 31, 2024 2023 Audit Fees $ 236 $ 125 50 Audit-Related Expenses Audit-related expenses for the years ended December 31, 2024 and 2023 were $nil and $nil, respectively. Tax Fees We incurred aggregate tax fees and expenses of $ nil and $ nil for the years ended December 31, 2024 and 2023, respectively. All Other Fees We incurred other fees of $ nil and $ nil for the years ended December 31, 2024 and 2023. Pre-Approval Policy Pursuant to our audit committee charter, the Audit Committee is directly responsible for the appointment, compensation, retention, removal and oversight of the work of the independent auditor. PART IV Item 15. Exhibit and Financial Statement Schedules (a) Financial Statements We have filed the financial statements in Item 8. Financial Statements and Supplementary Data as a part of this Annual Report on Form 10-K. (b) Exhibits The following is a list of all exhibits filed or incorporated by reference as part of this Annual Report on Form 10-K. Incorporated by Reference (Unless Otherwise Indicated) Exhibit Number Exhibit Title Form File Exhibit Filing Date 3.1 Certificate of Incorporation S-1 333-282621 3.1 October 11, 2024 3.2 Bylaws S-1 333-282621 3.2 October 11, 2024 4.1 Specimen Stock Certificate S-1 333-282621 4.1 October 11, 2024 4.2 Description of Securities — — — Filed herewith 10.1 Employment Agreement dated August 1, 2024 by and between Randolph Wilson Jones III and the Registrant S-1 333-282621 10.1 October 11, 2024 10.2 Employment Agreement dated November 4, 2024 by and between John M. Orobono Jr. and the Registrant S-1 333-282621 10.2 October 11, 2024 10.3 Form of Indemnification Agreement by and between the Registrant and its officers and directors S-1 333-282621 10.3 October 11, 2024 10.4 Form of Director Offer Letter by and between the Registrant and its directors S-1 333-282621 10.4 October 11, 2024 10.5 Agreement for loan condition by and between V-Cube, Inc. and Xyvid, Inc. S-1 333-282621 10.5 October 11, 2024 10.6 Agreement for loan condition by and between Wizlearn Technologies Pte. Ltd. and Xyvid, Inc. S-1 333-282621 10.6 October 11, 2024 10.7 Agreement of lease by and between Xyvid, Inc. and GHDLCK LLC S-1 333-282621 10.7 October 11, 2024 10.8 Consulting Agreement with Spirit Advisors, LLC S-1 333-282621 10.8 October 11, 2024 10.9 Master Service Agreement by and between the Registrant and its Largest Customer for the Fiscal Year Ended December 31, 2023 (portions of the exhibit will be omitted pursuant to Item 601 of Regulation S-K) S-1 333-282621 10.9 October 11, 2024 51 10.10 The Registrant’s 2024 Equity Incentive Plan S-1 333-282621 10.10 October 11, 2024 10.11 Agreement for Loan Conditions by and between Xyvid, Inc. and Naoaki Mashita S-1 333-282621 10.11 October 11, 2024 10.12 The Registrant’s Amended and Restated 2024 Equity Incentive Plan S-1 333-282621 10.12 October 11, 2024 10.13 Amendment to the Agreement for Loan Conditions by and between Xyvid, Inc. and Naoaki Mashita S-1 333-282621 10.13 December 26, 2024 10.14 Agreement Regarding Extension of Maturity Date for Loans by and between TEN Events, Inc. and V-Cube, Inc. S-1 333-282621 10.14 December 30, 2024 10.15 Agreement Regarding Extension of Maturity Date for Loans by and between TEN Events, Inc. and Wizlearn Technologies Pte. Ltd. S-1 333-282621 10.15 December 30, 2024 10.16 Agreement for Loan Conditions by and between TEN Events, Inc. and Wizlearn Technologies Pte. Ltd. dated January 22, 2025 — — — Filed herewith 10.17 Agreement for Loan Conditions by and between TEN Events, Inc. and V-Cube, Inc. dated January 9, 2025 — — — Filed herewith 10.18 Agreement for Loan Conditions by and between TEN Events, Inc. and Wizlearn Technologies Pte. Ltd. dated January 28, 2025 — — — Filed herewith 10.19 Second Agreement Regarding Extension of Maturity Date for Loans by and between TEN Events, Inc. and V-Cube, Inc. dated March 28, 2025 — — — Filed herewith 10.20 Second Agreement Regarding Extension of Maturity Date for Loans by and between TEN Events, Inc. and Wizlearn Technologies Pte. Ltd. dated March 28, 2025 — — — Filed herewith 14.1 Code of Business Conduct and Ethics S-1 333-282621 14.1 October 11, 2024 19.1 Insider Trading Policy S-1 333-282621 19.1 October 11, 2024 21.1 Subsidiaries S-1 333-282621 21.1 October 11, 2024 31.1 Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — — — Filed herewith 31.2 Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — — — Filed herewith 32.1* Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — — — Furnished herewith 32.2* Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — — — Furnished herewith 97.1 Form of Compensation Recovery Policy 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 and SEC Release No. 34-47986, the certifications furnished in Exhibits 32.1 and 32.2 herewith are deemed to accompany this Form 10-K and will not be deemed filed for purposes of Section 18 of the Exchange Act. Such certifications will not be deemed to be incorporated by reference into any filings under the Securities Act or the Exchange Act. Item 16. Form 10-K Summary. None. 52 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEN Holdings, Inc. Date: March 28, 2025 By: /s/ Randolph Wilson Jones III Name: Randolph Wilson Jones III Title: CEO and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Randolph Wilson Jones III CEO and Director March 28, 2025 Name: Randolph Wilson Jones III (Principal Executive Officer) /s/ John M. Orobono Jr. Secretary, Chief Financial Officer and Director March 28, 2025 Name: John M. Orobono Jr. (Principal Accounting and Financial Officer) /s/ Naoaki Mashita Director March 28, 2025 Name: Naoaki Mashita 53 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of TEN Holdings, Inc. and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of TEN Holdings, Inc. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, stockholders’ equity (deficiency), and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt Regarding the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred losses, has negative cash flows from operations, and has negative working capital, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. GRASSI & CO., CPAs,P.C. We have served as the Company’s auditors since 2024. Jericho, New York March 28, 2025 (Grassi & Co., CPAs, P.C., NY PCAOB firm ID 606 ) F- 1 TEN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) 2024 2023 December 31, 2024 2023 ASSETS Current Assets: Cash and cash equivalents $ 48 $ 357 Accounts receivable, net 515 359 Income tax receivable — 91 Prepaid expenses and other current assets 1,224 103 Total Current Assets 1,787 910 Non-current Assets: Property and equipment, net 219 234 Operating lease right-of-use assets, net 530 601 Intangible assets, net 3,888 3,025 Total Assets $ 6,424 $ 4,770 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Accounts payable $ 634 $ 644 Accrued expenses 1,053 474 Deferred revenue 147 275 Current portion of operating lease liabilities 71 63 Short-term loans - related party 5,617 1,690 Total Current Liabilities 7,522 3,146 Non-current Liabilities: Non-current operating lease liabilities 502 573 Total Liabilities 8,024 3,719 Stockholders’ Equity: Preferred stock; $ 0.0001 par value – 1,000,000 shares authorized as of December 31, 2024 and 2023; No shares issued or outstanding as of December 31, 2024 and 2023 - - Common stock, $ 0.0001 par value – 250,000,000 shares authorized as of December 31, 2024 and 2023; 25,689,130 and 25,000,000 shares issued and outstanding as of December 31, 2024 and 2023, respectively * 5 5 Additional paid-in capital 317 — (Accumulated deficit)/ Retained earnings ( 1,922 ) 1,046 Total Stockholders’ Equity ( 1,600 ) 1,051 Total Liabilities & Stockholders’ Equity $ 6,424 $ 4,770 The accompanying notes are an integral part of the consolidated financial statements. * The number of shares presented above is adjusted retrospectively to reflect the 2 for 1 reverse stock split effected on October 9, 2024. F- 2 TEN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, 2024 and 2023 (in thousands, except share and per share data) 2024 2023 Year Ended December 31, 2024 2023 Revenue $ 3,504 $ 3,719 Cost of revenue 652 555 Gross profit 2,852 3,164 Operating expenses: Selling, General and Administrative Expenses 5,390 4,742 Depreciation expenses 190 51 Total operating expenses 5,580 4,793 Loss from operations ( 2,728 ) ( 1,629 ) Other income (expenses), net ( 30 ) 28 Interest expenses, net ( 210 ) ( 52 ) Loss before income taxes ( 2,968 ) ( 1,653 ) Provision for income taxes — 35 Net Loss $ ( 2,968 ) $ ( 1,688 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.12 ) $ ( 0.07 ) Weighted-average number of shares of common stock outstanding used to compute net loss per share, basic and diluted * 25,015,104 25,000,000 The accompanying notes are an integral part of the consolidated financial statements. * Giving retroactive effect to the 2 for 1 reverse stock split effected on October 9, 2024. F- 3 TEN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY) For the Years Ended December 31, 2024 and 2023 (in thousands, except share data) Shares Amount Capital Earnings (Deficit) Stock Class Additional Total Equity Common Stocks Paid-In Retained Stockholders’ Shares Amount Capital Earnings (Deficit) Balance, December 31, 2022 25,000,000 5 — 2,734 2,739 Net loss — — — ( 1,688 ) ( 1,688 ) Balance, December 31, 2023 25,000,000 5 — 1,046 1,051 Balance 25,000,000 5 — 1,046 1,051 Conversion of convertible promissory note 689,130 — 317 — 317 Net loss — ( 2,968 ) ( 2,968 ) Balance, December 31, 2024 25,689,130 $ 5 $ 317 $ ( 1,922 ) $ ( 1,600 ) Balance 25,689,130 $ 5 $ 317 $ ( 1,922 ) $ ( 1,600 ) The accompanying notes are an integral part of the consolidated financial statements. The number of shares presented above is adjusted retrospectively to reflect the 2 for 1 reverse stock split effected on October 9, 2024. F- 4 TEN HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2024 and 2023 (in thousands) 2024 2023 Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 2,968 ) $ ( 1,688 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 190 51 Noncash lease expenses 71 68 Noncash interest expenses 210 — Changes in operating assets and liabilities: Accounts receivable ( 156 ) 567 Other assets ( 90 ) ( 10 ) Income tax receivable 91 197 Accounts payable ( 12 ) 229 Accrued expenses 369 156 Deferred revenue ( 127 ) 221 Operating lease liabilities ( 63 ) ( 56 ) Net cash (used in)/provided by operating activities ( 2,485 ) ( 265 ) Cash flows from investing activities: Purchase of property and equipment ( 38 ) ( 25 ) Purchase of capitalized internal-use software ( 999 ) ( 1,050 ) Net cash used in investing activities ( 1,037 ) ( 1,075 ) Cash flows from financing activity Proceeds from short-term loans - related party 4,244 1,690 Payment for deferred offering costs ( 1,031 ) — Net cash provided by financing activity 3,213 1,690 Net change in cash and cash equivalents ( 309 ) 350 Cash and cash equivalents at beginning of period 357 7 Cash and cash equivalents at end of period $ 48 $ 357 Non-cash investing and financing activities: Conversion of convertible promissory note $ 317 $ — The accompanying notes are an integral part of the consolidated financial statements. F- 5 TEN HOLDINGS, INC. AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 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 on December 5, 2011 and is an operating entity. Ten Events was formed for the purpose of planning, producing, broadcasting virtual and hybrid events using its event platform, the Xyvid 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 100 shares of common stock with no stated par value. On July 2, 2024, as part of its reorganization, the Company entered into a share exchange agreement with V-Cube, Inc., the Company’s principal stockholder. The Company acquired 1,000 shares of Ten Events from V-Cube, Inc. for the Company’s 100 shares of common stock. After the share exchange, Ten Events became a wholly owned subsidiary of the Company. On July 24, 2024, the Company changed its domicile of incorporation from Pennsylvania to the state of Nevada. Upon its domestication, each share of common stock, no par value per share, of the Company that is issued and outstanding and held by V-Cube, Inc. was automatically converted into 500,000 shares of common stock, par value $ 0.0001 of the Company. After domestication, the total common stock issued and outstanding is 50,000,000 shares. On October 9, 2024, the Company’s sole director and majority stockholder approved a reverse stock split of the Company’s issued common stock at a ratio of 2:1 , which became effective on October 9, 2024. As a result of the reverse stock split, 25,000,000 shares of common stock were issued and outstanding as of October 9, 2024. The reorganization involves 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 relationship were not established. 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 the Company’s ability to attract and retain revenue generating customers, acquire new customer contracts, and additional financing. T he Company has incurred and continues to incur losses from operations as well as negative cash flow from operations. For the year ended December 31, 2024, the Company had a net loss of $ 2,968 , net cash used in operations of $ 2,485 and an accumulated deficit of $ 1,922 . These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company may consider obtaining additional financing in the future through the issuance of the Company’s common stocks through other equity or debt financing, or other means. The Company, however, is dependent upon its ability to obtain new revenue generating customer contracts and secure equity and/or debt financing and there are no assurances that the Company will be successful. 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. F- 6 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying 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”). 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 certain 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, Inc. and V-Cube USA Acquisition Company, LLC. Intercompany balances and transactions have been eliminated in 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 against net deferred tax assets. Actual results could differ from those estimates. 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 Hybrid, virtual and physical event revenue Revenue from hybrid, virtual and physical events is generated from producing and delivering hybrid or virtual events using the Company’s platform, the Xyvid Pro Platform, or delivering physical events. Virtual events are online events and conferences where participants interact in an online environment, and physical events are events where participants meet in a physical location. The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring services to the customer. The transaction price is generally fixed at contract inception and is based on the agreed upon rates stated in the contract which indicates the amount of consideration the Company expects to be entitled to in exchange for satisfaction of performance obligation (i.e., delivering events). The amount on the final invoice depends on the actual work performed and might differ from the amount stated in the initial contract. When there is variable consideration included in the transaction price if, in the management’s judgment, it is probable that a significant future reversal of cumulative revenue recognized under the contract will not occur, the Company and the customer agree on the price on the final invoice, and revenue is recognized based on the amount on the final invoice. None of our contracts contain a significant financing component. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to government entities. F- 7 Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised services to the customer, which is upon completion of the event. Revenue is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company sometimes enters into the contract with a bundle of events. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price. The Company’s contracts with multiple performance obligations are generally sold over the same contract terms as that of the contract with single performance obligation and have the same pattern of transferring services to the customer, and therefore, they are accounted for as one combined performance obligation in the context of the contract. From time to time, the Company engages subcontractors for delivering events. The Company assesses and records revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. For events delivered with subcontractors, the Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified vendors, (ii) has the discretion to select the vendors and establish their price and duties, and (iii) bears the risk for services that are not fully paid for by its customers. Segment Information The Company currently operates business as one operating segment which includes two revenue types: Hybrid and Virtual Events and Physical Events. 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 concentrations of credit risk are primarily cash and accounts receivable. The Company continuously evaluates the credit worthiness of its customers’ financial condition and generally does not require collateral. The Company maintains cash balances in bank accounts that may, at times, exceed Federal Deposit Insurance Corporation (“FDIC”) limits of $ 250,000 per institution. The Company incurred no losses from such accounts and management considers the risk of loss to be minimal. For the years ended December 31, 2024 and 2023, there was one customer, who accounted for more than 10 % of the Company’s total revenue in both periods. As of December 31, 2024 and 2023, there were two customers who accounted for more than 10 % of the Company’s total accounts receivable in both periods. For the years ended December 31, 2024 and 2023, there was one supplier , who accounted for more than 10 % of the Company’s total purchase in both periods. As of December 31, 2024 and 2023, there were four and three suppliers, respectively, who accounted for more than 10 % of the Company’s total accounts payable in the respective periods. Cash and Cash Equivalents The Company considers all highly liquid short-term investments purchased with an initial maturity date of three months or less to be cash equivalents. F- 8 Accounts Receivable, Net Accounts receivable primarily consist of the amounts billed and currently due from customers, net of an allowance for credit losses, if recorded. When the Company has an unconditional right to payment, subject only to the passage of time, the right is treated as receivable. The Company’s accounts receivable balances are unsecured, bearing no interest. Fees billed in advance of the related contractual term represent contract liabilities and are presented as deferred revenue. Typical payment terms provide for customer payment within 30 to 90 days of the invoice date. Accounts receivable are subject to collection risk. The Company performs evaluations of its customers’ financial positions and generally extends credit on account, without collateral. At each balance sheet date, the Company recognizes an expected allowance for credit losses. In addition, also at each reporting date, this estimate is updated to reflect any changes in credit risk since the receivable was initially recorded. This estimate is calculated on a pooled basis where similar risk characteristics exist. The allowance estimate is derived from a review of the Company’s historical losses on the aging of receivables. This estimate is adjusted for management’s assessment of current conditions, reasonable and supportable forecasts regarding future events, and any other factors deemed relevant by the Company. The Company believes historical loss information is a reasonable starting point in which to calculate the expected allowance for credit losses as the Company’s customers’ composition have remained constant. The Company did no t record an allowance for credit loss as of December 31, 2024 and 2023. 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 receivable during the years ended December 31, 2024 and 2023. The amount of receivable included at the beginning of each period presented was $ 359 and $ 926 , respectively. Deferred Offering Costs Deferred offering costs include specific incremental costs directly attributable to the Company’s initial public offering of securities . Deferred offering costs exclude management salaries or other general and administrative expenses. These costs are being deferred and will be charged against the gross proceeds of the offering. Deferred offering costs are included in prepaid expenses and other current assets in the Consolidated Balance Sheets. Property and Equipment, Net Property and equipment are recorded at the cost less accumulated depreciation. Depreciation is computed using the straight-line method. The estimated useful lives of assets are as follows: Schedule of Estimated Useful Lives of Assets Property and Equipment Estimated Useful Life Computer and equipment 7 years Furniture and fixture 10 years Leasehold improvement Shorter of 10 years or lease term Repair and maintenance costs are expensed as incurred. Intangible Assets Intangible assets consist of capitalized software. The Company accounts for its software development costs in accordance with the guidance in ASC 350-40, Internal-use software . The costs incurred prior to the application development stage and post implementation are expensed as incurred. Direct and incremental internal and external costs incurred during the application development stage are capitalized until the application is substantially complete and ready for its intended use, at which point amortization begins. Training, data conversion and maintenance costs are expensed as incurred. Costs of capitalized software are amortized on a straight-line basis over the estimated period of benefit, which is approximately five years, and are recorded in cost of revenue in the Consolidated Statements of Operations. F- 9 Impairment or Disposal 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 sales 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. 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 12 months or less. Fair Value Measurements The Company reports financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis in accordance with ASC Topic 820 Fair Value Measurement (“ASC 820”). ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. The U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows: Level 1: Quoted price in an active market for identical assets or liabilities. Level 2: Quoted prices for similar assets and liabilities in active markets or inputs that are observable. Level 3: Inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable, and short-term loans approximate fair values due to the short-term nature of these instruments. F- 10 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. The amount of revenue recognized during the year ended December 31, 2024 and 2023 that was included in deferred revenue at the beginning of each period was $ 275 and $ 54 , respectively. Cost of Revenue Cost of revenue primarily consists of costs paid to its employees for delivering events and costs of renting equipment and studio. Advertising and Marketing Costs Advertising and marketing costs are expensed as incurred and are included in selling, general and administrative expenses in the Consolidated Statement of Operations. For the years ended December 31, 2024 and 2023, these costs were $ 160 and $ 144 , respectively. 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 years ended December 31, 2024 and 2023, the Company recognized $ 46 and $ 63 , respectively, of expense for the defined contribution plans. 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. 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. Net Loss per Share Basic net loss per common stock is calculated by dividing the net loss by the weighted-average number of common stocks outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per common stock is computed by dividing the net loss by the weighted-average number of common stocks and potentially dilutive securities outstanding for the period determined using the treasury stock method. F- 11 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 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 requirements are 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 December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The standard requires entities to disclose specific categories in the rate reconciliation and to provide additional information for reconciling items that meet a quantitative threshold. It also requires entities to disclose certain information about income taxes paid and other disclosures related to income and income tax expense from continuing operations. The standard is effective for fiscal years beginning after December 15, 2024 for public business entities and for fiscal years beginning after December 15, 2025 for all other entities. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of this guidance did not have any impact on the Company’s segment reporting. In October 2023, the FASB issued ASU 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. Acquisition In July 2023, as part of the Company’s restructuring, Ten Events acquired 100 % of the outstanding common stocks of V-Cube USA, Inc. (“VUSA”) from V-Cube, Inc.(“V-Cube), the Company’s principal stockholder, for no consideration. Subsequently, VUSA was merged with V-Cube USA Acquisition Company, LLC (“VAC”) with VAC being the surviving entity. After the merger, VAC became a wholly owned subsidiary entity of Ten Events. 4. Property and Equipment, Net As of December 31, 2024 and 2023, property and equipment consisted of the following: Schedule of Property and Equipment 2024 2023 As of December 31, 2024 2023 Computer and equipment $ 419 $ 381 Furniture and fixture 17 17 Leasehold improvement 20 19 Total property and equipment 456 417 Less: Accumulated depreciation ( 237 ) ( 183 ) Total property and equipment, net $ 219 $ 234 The Company recognized depreciation expenses on property and equipment of $ 54 and $ 51 during the years ended December 31, 2024 and 2023, respectively. F- 12 5. Intangible Assets, Net The Company’s intangible assets consist of internally developed capitalized software. As of December 31, 2024 and 2023, the balance of the capitalized software was $ 3,888 and $ 3,025 , respectively, of which $ 218 and $ 3,025 was under the application development stage as of the respective period end. The Company has performed impairment assessment and identified no triggering events or circumstances indicating that the carrying amount of the intangibles may be impaired and determined no impairment was necessary. As of December 31, 2024 and 2023, intangible assets consisted of the following: Schedule of Intangible Assets 2024 2023 As of December 31, 2024 2023 Capitalized software $ 3,806 $ — Under the application development stage 218 3,025 Total intangible assets 4,024 3,025 Less: Accumulated Amortization ( 136 ) - Intangible assets, net $ 3,888 $ 3,025 The Company recognized amortization expenses on intangible assets of $ 136 and nil during the years ended December 31, 2024 and 2023, respectively. 6 . Leases The Company has an operating lease for its office space. As of December 31, 2024 and 2023, the following amounts were recorded in the Consolidated Balance Sheets relating to the Company’s operating lease. Schedule of Operating Lease 2024 2023 As of December 31, 2024 2023 Right-of-Use Assets Operating lease assets $ 530 $ 601 Lease Liabilities Operating lease liabilities - Current $ 71 $ 63 Operating lease liabilities - Non-current $ 502 $ 573 The following table summarizes the contractual maturities of operating lease liabilities as of December 31, 2024: Schedule of Maturities of Operating Lease Liabilities Year ending December 31, 2025 $ 104 2026 108 2027 112 2028 117 2029 121 Thereafter 126 Total lease payments 688 Less amounts representing interest ( 115 ) Present value of lease payments 573 Less: current portion ( 71 ) Non-current lease liabilities $ 502 The following table illustrates information for the Company’s operating lease during the years ended December 31, 2024 and 2023: Schedule of Operating Lease Cost 2024 2023 December 31, 2024 2023 Total operating lease cost $ 63 $ 56 Short-term lease cost $ 14 $ 8 Cash paid for amounts included in the measurement of the operating lease liability $ 100 $ 96 Weighted average remaining lease term (years) 6.0 7.0 Weighted average discount rate 6.00 % 6.00 % F- 13 7. Commitments and Contingencies Guarantees and Commitments There were no commitments under certain purchase or guarantee arrangements as of December 31, 2024 and 2023. 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 December 31, 2024 and 2023. 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. Accrued Expenses As of December 31, 2024 and 2023, accrued expenses include the following components: Schedule of Accrued Expenses 2024 2023 As of December 31, 2024 2023 Accrued operating expenses $ 393 $ 286 Accrued payroll expenses 256 136 Other accrued expenses 404 52 Total accrued expenses $ 1,053 $ 474 9. Short-term Loans – Related Party Short-term loans as of December 31, 2024 and 2023 consisted of the followings: Schedule of Short-term Loans Interest Rate Maturity 2024 2023 As of December 31, Interest Rate Maturity 2024 2023 V-Cube, Inc. 6.00 % March 31, 2025 $ 4,062 $ 735 Wizlearn Technologies Pte. Ltd. 6.00 % March 31, 2025 1,555 955 Total short-term loans $ 5,617 $ 1,690 10 . Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share: Schedule of Net Loss per Share 2024 2023 Year Ended December 31, 2024 2023 Basic and Diluted Net Loss Per Common Share: Net loss attributable $ ( 2,968 ) $ ( 1,688 ) Weighted average common shares outstanding – basic and diluted 25,015,104 25,000,000 Net loss per common share – basic and diluted $ ( 0.12 ) $ ( 0.07 ) F- 14 11. Income Taxes The component of loss before income taxes for the years ended December 31, 2024 and 2023 was as follow: Schedule of Component of Loss Before Income Taxes Year Ended December 31, 2024 2023 United States $ ( 2,968 ) $ ( 1,653 ) The components of income tax expense for the years ended December 31, 2024 and 2023 were as follows: Schedule of Income Tax Expense 2024 2023 Year Ended December 31, 2024 2023 Current $ — $ 28 Deferred — 7 Total $ — $ 35 A reconciliation of income tax expense to the amount of income tax expense at the statutory rate in the U.S. for the years ended December 31, 2024 and 2023 is as follows: Schedule of Reconciliation of Income Tax Expense 2024 2023 Year Ended December 31, 2024 2023 Income tax benefit at the statutory rate $ ( 623 ) $ ( 347 ) Increase (reduction) in taxes resulting from: State tax—net of federal ( 270 ) ( 122 ) Change in valuation allowance 1,629 377 Permanent difference 71 2 SALT Rate change ( 756 ) 159 Recognition of previously unrecognized tax benefits — — Research and development credits ( 26 ) ( 51 ) Other ( 25 ) 17 Income tax expense $ — $ 35 The tax effects of temporary differences that gave rise to a significant portion of the deferred tax assets and liabilities as of December 31, 2024 and 2023, were as follows: Schedule of Deferred Tax Assets and Liabilities 2024 2023 As of December 31, 2024 2023 Deferred tax assets: Goodwill $ 7,598 $ 7,447 Lease liability 181 181 Accrued interest 85 15 Net operating loss carryforwards 3,475 1,942 R&D credit 122 96 Other 13 1 Total deferred tax assets 11,474 9,682 Deferred tax liabilities: 　 　 Fixed assets 53 61 Right-of-use assets 167 171 Assets capitalized for book not for tax 295 267 Other 244 85 Total deferred tax liabilities 759 584 Less: Valuation allowance ( 10,715 ) ( 9,098 ) Net deferred tax assets/(liabilities) $ — $ — F- 15 As of December 31, 2024, the Company had a federal net operating loss (“NOL”) carryforwards of $ 12,373 , and state NOL carryforwards of $ 14,125 . As a result of the Tax Cuts and Jobs Act of 2017 (“TCJA”), for U.S. income tax purposes, NOL generated in tax years beginning after December 31, 2017 may be carried forward indefinitely to offset future taxable income. The total amount of the federal NOL as of December 31, 2024 which may be carried forward indefinitely is $ 11,453 . The state and city NOL may generally be carried forward for twenty years and may be applied against future taxable income. As of December 31, 2023, the Company had a NOL carryforwards of $ 7,430 , and state NOL carryforwards of $ 6,209 . The TCJA amended Internal Revenue Code Section 174 related to federal tax treatment of research and experimental expenditures paid or incurred during the taxable year. The new Section 174 rules require taxpayers to capitalize and amortize such expenditures over a period of five years for domestic research and fifteen years for non-US research. For the year ended December 31, 2024 the Company recognized a $ 506,130 favorable temporary difference for the amortization of these expenditures. For the year ended December 31, 2023, the Company recognized a $ 231,586 favorable temporary difference for the amortization of these expenditures. The Company recorded a valuation allowance against all of our deferred tax assets as of both December 31, 2024 and 2023. The Company intends to continue maintaining a full valuation allowance on its deferred tax assets until there is sufficient evident to support the reversal of all or some portion of these allowances. The valuation allowance the Company recorded as of December 31, 2024 and 2023 was $ 10,715 and $ 9,098 , respectively. The net changes in the total valuation allowance for net deferred tax assets for the years ended December 31, 2024 and 2023 consist of the following: Schedule of Deferred Tax Assets Valuation Allowance 2024 2023 Year Ended December 31, 2024 2023 Valuation allowance at beginning of year $ 9,098 $ 8,721 Additions (deductions) 1,617 377 Valuation allowance at end of year $ 10,715 $ 9,098 Currently, there are no federal or state tax audits pending. The Company’s corporate federal and state tax returns from 2021 to 2023 remain subject to examination by tax authorities. At December 31, 2024, the Company did no t have any unrecognized tax benefits and did not anticipate any significant changes to the unrecognized tax benefits within twelve months of this reporting date. In the year ended December 31, 2024, the Company recorded no interest and penalties on income taxes. As of December 31, 2024, there was no accrued interest included in income taxes payable. 12. Stockholders’ Equity Preferred Stock As of December 31, 2024, the Company has authorized 1,000,000 shares of preferred stock with rights and preferences, including voting rights, to be designated from time to time by the board of directors. There were no shares of preferred stock issued or outstanding as of December 31, 2024. Common Stock As of December 31, 2024, the Company has authorized 250,000,000 shares of common stock. Each holder of common stock shall be entitled to one vote for each share held as of the record date and shall be entitled to receive dividends, when, as and if declared by the stockholders’ meeting or the Board of Directors. The total common stock issued and outstanding as of December 31, 2024 was 25,689,130 shares. On October 9, 2024, the Company’s sole director and majority stockholder approved a reverse stock split of the Company’s issued common stock at a ratio of 2:1, which became effective on October 9, 2024. As a result of the reverse stock split, 25,000,000 shares of common stock were issued and outstanding. The Company believes it is appropriate to reflect the above transactions on a retroactive basis in accordance with ASC 260. All references made to share or per share amounts herein have been retroactively adjusted to reflect the 2:1 reverse split. On December 23, 2024, the convertible promissory note dated September 5, 2024, held by Naoaki Mashita, the Chief Executive Officer of V-Cube, Inc., the principal stockholder of the Company, having the outstanding principal balance of $ 317 was partially converted into 689,130 fully paid and non-assessable unregistered shares of common stock of the Company at a conversation price of $ 0.46 per share, relative to the principal amount outstanding, in accordance with the terms thereof . F- 16 13. Equity incentive plan On September 27, 2024, the Company’s Board of Directors approved 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 2,640,250 shares of common stock at an exercise price of $ 0.46 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 2,640,250 stock options granted, 1,122,925 stock options will vest upon the completion of the Company’s initial public offering (“IPO”). The fair value of the stock options as of the grant date was $ 3.13 and was estimated using the Black-Scholes option-pricing model. The following table summarizes the significant assumptions used to estimate the fair value of the stock option. The total value of the stock options granted and the unrecognized stock-based compensation expenses as of the grant date was $ 8,258 . At IPO, the company will recognize $ 3,512 in stock-based compensation expense due to the vesting of employee stock options. Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions Expected term 5 years Expected volatility 49.04 % Expected dividend rate 0.00 % Risk-free rate 3.75 % Fair Value of Common Stock $ 3.50 14. Revenue Disaggregation of Revenue The tables below reflect revenue by major source and timing of transfer of goods and services for the years ended December 31, 2024 and 2023. The Company had no revenue derived from geographical regions outside of the U.S. during the years ended December 31, 2024 and 2023. All revenue during the years ended December 31, 2024 and 2023 was recognized when the performance obligation was satisfied at point in time. Schedule of Disaggregation of Revenue 2024 2023 Year Ended December 31, 2024 2023 Delivered events - Virtual and Hybrid $ 3,219 $ 3,525 Delivered events - Physical 285 194 Total $ 3,504 $ 3,719 The following table summarizes the activity in deferred revenue during the years ended December 31, 2024 and 2023: Schedule of Activity In Deferred Revenue 2024 2023 Year Ended December 31, 2024 2023 Balance, beginning of year $ 275 $ 54 Revenue earned ( 1,245 ) ( 54 ) Deferral of revenue 1,117 275 Balance, end of year $ 147 $ 275 F- 17 15. Cost of Revenue Disaggregation of Cost of revenue The table below reflects cost of revenue by major source for the year ended December 31, 2024 and 2023. Schedule of Disaggregation of Cost of Revenue 2024 2023 Year Ended December 31, 2024 2023 Delivered events - Virtual and Hybrid $ 557 $ 521 Delivered events - Physical 95 34 Total $ 652 $ 555 16. Consulting Agreement On February 5, 2024, the V-Cube, Inc., the principal shareholder of the Company, entered into a consulting and services agreement with Spirit Advisors LLC (“Spirit Advisors”), which agreement was assigned to and assumed by the Company on September 5, 2024. Pursuant to the agreement, the Company has agreed to compensate Spirit Advisors with warrants, which will be exercisable upon completion of the Company’s IPO for the period of 10 years to purchase 4.9 % of the fully diluted share capital of the Company as of February 12, 2024 for an exercise price per share of US$ 0.02 , subject to adjustments as set forth in the warrant, as partial compensation for professional services to be provided by Spirit Advisors in connection with the IPO. The warrants become exercisable upon the successful completion of the IPO, which is a performance condition. Achievement of the IPO-based performance condition is not deemed to be probable until such event occurs. Therefore, no warrants are exercisable prior to the Company’s IPO. 17. Related Party The related parties that had material balances and transactions as of and for the years ended December 31, 2024 and 2023 consist of the following: Schedule of Related Parties Material Balances And Transactions Name of Related Party Nature of Relationship as of December 31, 2024 Dyventive, Inc A company controlled by Dave Kovalcik, the director of V-Cube, Inc., the principal shareholder of the Company GHDLCK, LLC A company controlled by an immediate family member of Dave Kovalcik, the director of V-Cube, Inc., the principal shareholder of the Company PharMethod, Inc A company controlled by Dave Kovalcik, the director of V-Cube, Inc., the principal shareholder of the Company V-Cube, Inc. The principal shareholder of the Company Wizlearn Technologies Pte. Ltd. An affiliate of the Company F- 18 The Company had the following related party balances as of December 31, 2024 and 2023: Schedule of Related Party Balances December 31, Nature of transactions 2024 2023 Receivable due from related parties: Dyventive, Inc Accounts receivable related to sales from delivered events $ — $ 15 PharMethod, Inc Accounts receivable related to sales from delivered events — 20 Payable due to related party: GHDLCK, LLC Accounts payable related to rental expenses 83 48 PharMethod, Inc Accounts payable related to operating expenses 73 — Short-term loans due to related parties: V-Cube Inc. Loan payable for working capital 4,062 735 Wizlearn Technologies Pte. Ltd. Loan payable for working capital 1,555 955 The Company had the following related party transactions for the years ended December 31, 2024 and 2023: Schedule of Related Party Transactions Year Ended December 31, Nature of transactions 2024 2023 Revenue from related parties: Dyventive, Inc Sales from delivered events $ 33 $ 142 PharMethod, Inc Sales from delivered events 47 250 Selling, General and Administrative Expenses with related party: GHDLCK, LLC Rental expense for the Company’s office 100 108 18. Subsequent Events The Company has evaluated subsequent events after the consolidated balance sheet date through March 28, 2025, 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. On February 18, 2025, the Company completed its IPO of 1,667,000 shares of common stock at a public offering price of $ 6.0 per share. The net proceeds to the Company from the IPO, after deducting underwriting discounts and estimated offering expenses payable by the Company, were $ 8,900 . On February 19, 2025, Spirit Advisors elected to exercise its warrants in full. The net shares issued under this exercise were 1,337,312 common shares. On March 17, 2025, the Company’s Board of Directors approved a share repurchase program under which the Company may repurchase up to $ 1,000 of its outstanding shares of common stock. On March 18, 2025, the Company entered into a letter agreement with Bancroft Capital, LLC to assist the Company with its share repurchase program. On March 28, 2025, the Company and Wizlearn Technologies Pte. Ltd, an affiliate of the Company, agreed to extend the maturity date of the existing loan agreements to December 31, 2025. which loans have an outstanding aggregate principal balance of $ 1,815 as of the date of this annual report. On March 28, 2025, the Company and V-Cube, Inc., the principal stockholder of the Company, agreed to extend the maturity date of the existing loan agreements to December 31, 2025, which loans have an outstanding aggregate principal balance of $ 2,187 as of the date of this annual report. On March 19, 2025, the Company and Naoaki Mashita, the Chief Executive Officer of V-Cube, Inc., the principal stockholder of the Company, agreed to extend the repayment date of the interest accrued on the existing convertible promissory note from March 31, 2025 to December 31, 2025 . F- 19