DEF 14C: TEN Holdings Plans Reverse Stock Split to Maintain Nasdaq Listing

TEN Holdings, Inc. is pursuing a reverse stock split, ranging from 1-for-10 to 1-for-20, to address its Nasdaq minimum bid price deficiency and maintain its listing.

Summary

• Consenting stockholders, holding 52.7% of outstanding common stock, approved a reverse stock split (Action No. 1) on October 30, 2025.
• The Board of Directors has discretion to effect the split in a ratio between 1-for-10 and 1-for-20 until December 12, 2025.
• The primary purpose is to raise the per share bid price to comply with Nasdaq Listing Rule 5550(a)(2), which requires a minimum $1.00 bid price.
• The company received a deficiency letter from Nasdaq on June 30, 2025, and has 180 calendar days to regain compliance.
• As of October 30, 2025, there were 44,592,464 shares of Common Stock outstanding.
• The reverse stock split will not affect the par value of $0.0001 per share, but reported per share net income or loss will be higher due to fewer outstanding shares.
• Fractional shares will be cashed out, and no dissenters' or appraisal rights are provided.

Sentiment

Score: 4

Explanation: The filing addresses a critical regulatory compliance issue (Nasdaq listing) which is positive for continued market access. However, reverse stock splits are often viewed negatively by the market, and the outcome regarding sustained price increase and liquidity is uncertain. It's a necessary defensive move rather than a growth-oriented one, hence a slightly negative to neutral sentiment.

Positives

• Addresses the critical issue of maintaining the Nasdaq Capital Market listing, preventing potential delisting.
• A higher stock price may attract institutional investors and brokerage recommendations, potentially increasing market acceptability.
• The effective increase in authorized but unissued shares provides flexibility for future corporate purposes, including potential capital raises.

Negatives

• No assurance that the post-split market price will be maintained or that Nasdaq compliance will be sustained.
• The market may view a reverse stock split negatively, potentially impacting the stock price adversely.
• A reduced number of outstanding shares could lead to decreased trading liquidity and fewer market makers.
• Stockholders holding less than one hundred shares (odd lots) after the split may incur incrementally higher trading costs.
• The increase in authorized shares could have an anti-takeover effect by diluting ownership or voting rights.

Risks

• Failure to regain or maintain compliance with Nasdaq's minimum bid price rule could lead to delisting, negatively affecting the ability to raise financing, investor trading, and stock value/liquidity.
• The market price of common stock after the reverse split may not increase proportionately or be sustained, and could even decline.
• Reduced liquidity of common stock due to fewer outstanding shares, potentially leading to increased sales by retail investors and a smaller number of market makers.
• Higher transaction costs for stockholders holding odd lots (less than one hundred shares) after the reverse split.
• Uncertainty regarding U.S. federal income tax consequences, as the IRS may not agree with the company's conclusions.

Future Outlook

The Board of Directors retains sole discretion to implement or abandon the reverse stock split until December 12, 2025, based on market conditions, stock prices, and Nasdaq listing requirements. The company anticipates the split will help regain Nasdaq compliance and potentially increase stock attractiveness to long-term investors. If implemented, the reverse stock split will also effectively increase the number of authorized shares available for future issuance for general corporate purposes.

Management Comments

• The Board believes that the Reverse Stock Split is an effective means for us to regain compliance with the Bid Price Rule.
• We believe that implementing the Reverse Stock Split may provide benefits to the Company and our existing stockholders in a number of ways.
• The Board does not intend for the Reverse Stock Split to be the first step in a series of plans or proposals of a going private transaction within the meaning of Rule 13e-3 of the Exchange Act.

Industry Context

Reverse stock splits are a common corporate action undertaken by companies facing minimum bid price deficiencies to maintain their listing on major exchanges like Nasdaq. Maintaining a listing is crucial for liquidity, investor confidence, and access to capital markets. Companies often pursue such actions to avoid the negative implications of delisting, which can include reduced investor interest, difficulty in raising capital, and decreased stock value.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct industry comparison. The action described is a standard defensive measure for companies facing delisting from Nasdaq due to minimum bid price requirements, a situation many small-cap companies encounter.

Corporate Governance

Legal Proceedings

• Received a deficiency letter from The Nasdaq Stock Market LLC on June 30, 2025, notifying the company of non-compliance with the minimum $1.00 per share bid price requirement (Nasdaq Listing Rule 5550(a)(2)).

Stakeholder Impact

• Shareholders: Will own a reduced number of shares but maintain the same percentage ownership (except for fractional shares). May experience a higher per-share price, but also potential for reduced liquidity and higher trading costs for odd lots.
• Investors (Institutional): A higher stock price post-split may make the company more attractive to institutional investors and brokerage houses that have policies against low-priced stocks.
• Employees: Delisting from Nasdaq could lead to a potential loss of employee confidence.
• Creditors/Lenders: Maintaining Nasdaq listing can positively impact the company's perceived financial stability and access to capital, which could indirectly affect credit terms.

Next Steps

• The Board of Directors will determine the exact reverse stock split ratio (between 1-for-10 and 1-for-20) and decide whether to implement the split by December 12, 2025.
• If implemented, the company will issue a press release at least two business days before the effective time, announcing the final ratio and effective time.
• A Current Report on Form 8-K will be filed within four business days following the effective time of the reverse stock split.
• The transfer agent will notify stockholders of record and process cash payments in lieu of fractional shares as soon as practicable after the effective time.

Key Dates

Recommendation

The proposed reverse stock split is a critical defensive maneuver to address the Nasdaq minimum bid price deficiency and avoid delisting. While necessary for maintaining market access and potentially attracting a broader investor base, it does not fundamentally alter the company's operational performance or financial health. The success of the split in sustaining a higher stock price and improving liquidity is not guaranteed, and the market often views reverse splits with caution. Investors should hold to observe the effectiveness of this action and await further clarity on the company's underlying business trajectory and financial results before making further investment decisions.

Keywords

Reverse Stock Split, Nasdaq Listing, DEF 14C, TEN Holdings, Stock Price Compliance, Corporate Governance, Shareholder Action, Capital Market, Equity Incentive Plan