UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM
For the quarterly period ended
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As of May 15, 2025, there were
HeartCore Enterprises, Inc.
Contents
| Page | ||
| PART I - FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | F-1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 1 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 8 |
| Item 4. | Controls and Procedures | 8 |
| PART II - OTHER INFORMATION | 9 | |
| Item 1. | Legal Proceedings | 9 |
| Item 1A. | Risk Factors | 9 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| Item 3. | Defaults Upon Senior Securities | 9 |
| Item 4. | Mine Safety Disclosures | 9 |
| Item 5. | Other Information | 9 |
| Item 6. | Exhibits | 10 |
| Signatures | 11 | |
i
ITEM 1. FINANCIAL STATEMENTS
HEARTCORE ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Investments in marketable securities | ||||||||
| Prepaid expenses | ||||||||
| Current portion of long-term note receivable | ||||||||
| Due from related party | ||||||||
| Other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets: | ||||||||
| Accounts receivable, non-current | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Long-term investment in warrants | ||||||||
| Long-term note receivable | ||||||||
| Deferred tax assets | ||||||||
| Security deposits | ||||||||
| Long-term loan receivable from related party | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accounts payable and accrued expenses – related party | ||||||||
| Accrued payroll and other employee costs | ||||||||
| Due to related parties | ||||||||
| Short-term debt | - | |||||||
| Short-term debt – related party | ||||||||
| Current portion of long-term debts | ||||||||
| Insurance premium financing | ||||||||
| Factoring liability | ||||||||
| Operating lease liabilities, current | ||||||||
| Finance lease liabilities, current | ||||||||
| Income tax payables | ||||||||
| Deferred revenue | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities: | ||||||||
| Long-term debts | ||||||||
| Operating lease liabilities, non-current | ||||||||
| Finance lease liabilities, non-current | ||||||||
| Asset retirement obligations | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred shares ($ |
||||||||
| Common shares ($ |
||||||||
| Subscription receivable | ( |
) | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Accumulated other comprehensive income | ||||||||
| Total HeartCore Enterprises, Inc. shareholders’ equity | ||||||||
| Non-controlling interests | ( |
) | ( |
) | ||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-1
HEARTCORE ENTERPRISES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Three Months Ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues (including cost of revenues resulting from transactions with a related party of $ |
||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling expenses | ||||||||
| General and administrative expenses (including general and administrative expenses resulting from transactions with a related party of $ |
||||||||
| Research and development expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( |
) | ( |
) | ||||
| Other income (expenses): | ||||||||
| Changes in fair value of investments in marketable securities | ( |
) | ( |
) | ||||
| Changes in fair value of investment in warrants | ( |
) | ( |
) | ||||
| Interest income | ||||||||
| Interest expenses | ( |
) | ( |
) | ||||
| Other income | ||||||||
| Other expenses | ( |
) | ( |
) | ||||
| Total other expenses | ( |
) | ( |
) | ||||
| Loss before income tax expense (benefit) | ( |
) | ( |
) | ||||
| Income tax expense (benefit) | ( |
) | ||||||
| Net loss | ( |
) | ( |
) | ||||
| Less: net loss attributable to non-controlling interests | ( |
) | ( |
) | ||||
| Net loss attributable to HeartCore Enterprises, Inc. | $ | ( |
) | $ | ( |
) | ||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | ( |
) | ||||||
| Total comprehensive loss | ( |
) | ( |
) | ||||
| Less: comprehensive loss attributable to non-controlling interests | ( |
) | ( |
) | ||||
| Comprehensive loss attributable to HeartCore Enterprises, Inc. | $ | ( |
) | $ | ( |
) | ||
| Net loss per common share attributable to HeartCore Enterprises, Inc. | ||||||||
| Basic | $ | ( |
) | $ | ( |
) | ||
| Diluted | $ | ( |
) | $ | ( |
) | ||
| Weighted average common shares outstanding | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-2
HEARTCORE ENTERPRISES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
| Common Shares | Additional | Accumulated Other | Total HeartCore Enterprises, Inc. | Non- | Total | |||||||||||||||||||||||||||||||
| Number of Shares | Amount | Subscription Receivable | Paid-in Capital | Accumulated Deficit | Comprehensive Income | Shareholders’ Equity | controlling Interests | Shareholders’ Equity | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||
| Issuance of common shares | ||||||||||||||||||||||||||||||||||||
| Collection of subscription receivable | - | |||||||||||||||||||||||||||||||||||
| Exercise of stock options | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Common Shares | Additional | Accumulated Other | Total HeartCore Enterprises, Inc. | Non- | Total | |||||||||||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Accumulated Deficit | Comprehensive Income | Shareholders’ Equity | controlling Interests | Shareholders’ Equity | |||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | |||||||||||||||||||||||||||||
| Capital contribution from non-controlling shareholder | - | |||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | ) | $ | $ | $ | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-3
HEARTCORE ENTERPRISES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash flows used in operating activities: | ||||||||
| Depreciation and amortization expenses | ||||||||
| Loss on disposal of property and equipment | ||||||||
| Amortization of debt issuance costs | ||||||||
| Non-cash lease expense | ||||||||
| Gain on termination of lease | ( | ) | ( | ) | ||||
| Deferred income taxes | ( | ) | ||||||
| Stock-based compensation | ||||||||
| Changes in fair value of investments in marketable securities | ||||||||
| Changes in fair value of investment in warrants | ||||||||
| Gain on settlement of asset retirement obligations | ( | ) | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses | ||||||||
| Other assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Accounts payable and accrued expenses – related party | ( | ) | ||||||
| Accrued payroll and other employee costs | ( | ) | ( | ) | ||||
| Due to related parties | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Income tax payables | ( | ) | ( | ) | ||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Other liabilities | ||||||||
| Net cash flows used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Net proceeds from sale of warrants | ||||||||
| Proceeds from sale of marketable securities | ||||||||
| Repayment of loan provided to related party | ||||||||
| Net cash flows provided by investing activities | ||||||||
| Cash flows from financing activities: | ||||||||
| Payments for finance leases | ( | ) | ( | ) | ||||
| Proceeds from short-term debt | ||||||||
| Repayment of short-term and long-term debts | ( | ) | ( | ) | ||||
| Repayment of insurance premium financing | ( | ) | ( | ) | ||||
| Net repayment of factoring arrangement | ( | ) | ( | ) | ||||
| Capital contribution from non-controlling shareholder | ||||||||
| Proceeds from issuance of common shares | ||||||||
| Proceeds from collection of subscription receivable | ||||||||
| Proceeds from exercise of stock options | ||||||||
| Net cash flows provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rate changes | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents – beginning of the period | ||||||||
| Cash and cash equivalents – end of the period | $ | $ | ||||||
| Supplemental cash flow disclosures: | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| Non-cash investing and financing transactions: | ||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Insurance premium financing | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
F-4
HEARTCORE ENTERPRISES, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
HeartCore Enterprises, Inc. (“HeartCore
USA”), a holding company, was incorporated under the laws of the State of Delaware on
On July 16, 2021, HeartCore USA executed a share
exchange agreement with certain shareholders of HeartCore Co., Ltd. (“HeartCore Japan”), a company that was incorporated in
Japan on June 12, 2009. Pursuant to the terms of the share exchange agreement, HeartCore USA issued
The share exchange on July 16, 2021 has been accounted for as a recapitalization between entities under common control since the same controlling shareholders controlled these two entities before and after the transaction. The consolidation of HeartCore USA and its subsidiary has been accounted for at historical cost and prepared on the basis as if the transaction had become effective as of the beginning of the earliest period presented in the accompanying unaudited consolidated financial statements.
HeartCore USA, via its wholly-owned operating subsidiary, HeartCore Japan, is mainly engaged in the business of developing and sales of comprehensive software. Beginning from early 2022, HeartCore USA is engaged in the business of providing consulting services to Japanese companies with intention to go public in the United States capital market.
On September 6, 2022, HeartCore USA entered into
a share exchange and purchase agreement to acquire
In January 2023, HeartCore USA incorporated a wholly-owned subsidiary, HeartCore Financial, Inc. (“HeartCore Financial”), under the laws of the State of Delaware. HeartCore Financial is engaged in the business of providing financial consulting services.
In November 2023, HeartCore Japan established
a
In April 2024, HeartCore Financial incorporated a branch office, HeartCore Financial, Inc. – Japan Branch Office (“HeartCore Financial – Japan”), in Japan. HeartCore Financial – Japan is engaged in the business of providing financial consulting services.
HeartCore USA, HeartCore Japan, Sigmaways, Sigmaways B.V., Sigmaways Technologies, HeartCore Financial, HeartCore Luvina and HeartCore Financial – Japan are hereafter referred to as the “Company”.
F-5
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.
These unaudited interim consolidated financial statements do not include all of the information and disclosure required by the U.S. GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments consisting of normal recurring nature considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2024.
Use of Estimates
In preparing the unaudited consolidated financial statements in conformity U.S. GAAP, the management is required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information available as of the date of the unaudited consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, useful life of property and equipment, impairment of long-lived assets, valuation of stock-based compensation, valuation allowance of deferred tax assets, implicit interest rate of operating and finance leases, valuation of asset retirement obligations, valuation of investment in warrants and revenue recognition with respect to allocation of transaction price. Actual results could differ from those estimates.
Asset Retirement Obligations
Pursuant to the lease agreements for the office
space, the Company is responsible to restore these spaces back to its original statute at the time of leaving. The Company recognizes
an obligation related to these restorations as asset retirement obligations included in other non-current liabilities in the consolidated
balance sheets, in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification
(“ASC”) Topic 410, “Asset Retirement Obligation Accounting”. The Company capitalizes the associated asset retirement
cost by increasing the carrying amount of the related property and equipment.
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Beginning balance | $ | $ | ||||||
| Accretion expense | ||||||||
| Liabilities settled | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
Software Development Costs
Software development costs are expensed as incurred until the point the Company establishes technological feasibility. Technological feasibility is established upon completion of a detailed program design or the completion of a working model. Costs incurred by the Company between establishment of technological feasibility and the point at which the product is ready for general release are capitalized and amortized over the economic life of the related products. The Company’s software development costs incurred subsequent to achieving technological feasibility have not been significant and all software development costs have been expensed as incurred.
In the three months ended March 31, 2025 and 2024,
software development costs expensed as incurred amounted to $
F-6
Investment in Warrants
Investment in warrants represents stock warrants earned from its consulting service customers. The warrants are measured at fair value and any changes in fair value are recognized in other income (expenses). Investment in warrants is classified as long-term if the warrants are exercisable over one year after the date of receipt.
Investments in Marketable Securities
Investments in marketable securities represent equity securities registered for public sale with readily determinable fair value. The marketable securities are obtained through stocks of its customers received as noncash consideration from consulting services and through exercise of stock warrants of its consulting service customers and measured at fair value with changes in fair value recognized in other income (expenses).
Impairment of Long-Lived Assets
Long-lived assets with finite lives, primarily property and equipment and operating lease right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There were impairments of these assets during the three months ended March 31, 2025 and 2024.
Foreign Currency Translation
The functional currency of HeartCore Japan and HeartCore Financial – Japan is the Japanese Yen (“JPY”). The functional currency of HeartCore USA, HeartCore Financial and Sigmaways is the United States Dollar (“US$”). The functional currency of Sigmaways B.V. is the Euro (“EUR”). The functional currency of Sigmaways Technologies is the Canada Dollar (“CAD”). The functional currency of HeartCore Luvina is the Vietnam Dong (“VND”). Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the unaudited consolidated statements of operations and comprehensive loss.
The reporting currency of the Company is the US$, and the accompanying unaudited consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rate prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the unaudited consolidated statements of changes in shareholders’ equity.
Revenue Recognition
The Company recognizes revenues under ASC Topic 606, “Revenue from Contracts with Customers”.
To determine revenue recognition for contracts
with customers, the Company performs the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance
obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable
that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the
contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
F-7
The Company currently generates its revenues from the following main sources:
Revenues from On-premise Software
Licenses for on-premise software provide the customers with a right to use the software as it exists when made available to the customers. The Company provides on-premise software in the form of both perpetual licenses and term-based licenses which grant the customers with the right for a specified term. Revenues from on-premise licenses are recognized upfront at the point in time when the software is made available to the customers. Licenses for on-premise software are typically sold to the customers with maintenance and support services in a bundle. Revenues under the bundled arrangements are allocated based on the relative standalone selling prices (“SSP”) of on-premise software and maintenance and support services. The SSP for maintenance and support services is estimated based upon observable transactions when those services are sold on a standalone basis. The SSP of on-premise software is typically estimated using the residual approach as the Company is unable to establish the SSP for on-premise licenses based on observable prices given the same products are sold for a broad range of amounts (that is, the selling price is highly variable) and a representative SSP is not discernible from past transactions or other observable evidence.
Revenues from Maintenance and Support Services
Maintenance and support services provided with software licenses consist of trouble shooting, technical support and the right to receive unspecified software updates when and if available during the subscription. Revenues from maintenance and support services are recognized over time as such services are performed. Revenues for consumption-based services are generally recognized as the services are performed and accepted by the customers.
Revenues from Software as a Service (“SaaS”)
The Company’s software is available for use as hosted application arrangements under subscription fee agreements without licensing the rights of the software to the customers. Subscription fees from these applications are recognized over time on a ratable basis over the customer contract term beginning on the date the Company’s solution is made available to the customers. The subscription contracts are generally one year or less in length.
Revenues from Software Development and Other Miscellaneous Services
The Company provides customers with software development and support services pursuant to their specific requirements, which primarily compose of consulting, integration, training, custom application, and workflow development. The Company also provides other miscellaneous services, such as 3D Space photography. The Company generally recognizes revenues at a point in time when control is transferred to the customers and the Company is entitled to the payment, which is when the promised services are delivered and accepted by the customers.
Revenues from Customized Software Development and Services
The Company’s customized software development and services revenues primarily include revenues from providing software development solutions and other support services to its customers. The contract pricing is at stated billing rates per hour. These contracts are generally short-term in nature and not longer than one year in duration. For services provided under the contracts that result in the transfer of control over time, the underlying deliverable in the contracts is owned and controlled by the customers and does not create an asset with an alternative use to the Company. The Company recognizes revenues on rate per hour contracts based on the amount billable to the customers, as the Company has the right to invoice the customers in an amount that directly corresponds with the value to the customers of the Company’s performance to date.
Revenues from Consulting Services
The Company provides public listing related consulting services to customers pursuant to the specific requirements prescribed in the contracts, which primarily include communicating with intermediary parties, preparing required documents related to the initial public offering and supporting the listing process. The consulting services contracts normally include both cash and noncash considerations. Cash consideration is paid in installment payments and is recognized in revenues over the period of the contract by reference to progress toward complete satisfaction of that performance obligation. Noncash consideration is in the form of stocks and warrants of the customers and is measured at fair value at contract inception. Noncash consideration that is variable for reasons other than only the form of the consideration is included in the transaction price, but is subject to the constraint on variable consideration. The Company assesses the estimated amount of the variable noncash consideration at contract inception and subsequently, to determine when and to what extent it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur once the uncertainty associated with the variable consideration is subsequently resolved. Only when the significant revenues reversal is concluded probable of not occurring can variable consideration be included in revenues. Based on evaluation of likelihood and magnitude of a reversal in applying the constraint, the variable noncash consideration is recognized in revenues until the underlying uncertainties have been resolved.
F-8
Sales Returns and Allowances
The Company records reduction to revenues for estimated customer returns and allowances. The Company bases its estimates on historical rates of customer returns and allowances as well as the specific identification of outstanding returns. The actual amount of customer returns and allowances, which is inherently uncertain, may differ from the Company’s estimates. If the Company determines that actual or expected returns or allowances are significantly higher or lower than the reserves it established, it would record a reduction or increase, as appropriate, to revenues in the period in which it makes such a determination. Reserves for customer refunds are included within other current liabilities on the consolidated balance sheets. At a minimum, the Company reviews and refines these estimates on a quarterly basis.
Contract Balances
The timing of revenue recognition may differ from
the timing of invoicing to the customers. The Company determines that its contracts do not include a significant financing component.
The Company records a contract asset, which is included in accounts receivable, current or non-current, in the consolidated balance sheets,
when revenues are recognized prior to invoicing. The Company factors certain accounts receivable upon or after the performance obligation
is being met. The Company records deferred revenue in the consolidated balance sheets when revenues are recognized subsequent to cash
collection for an invoice. Deferred revenue is reported net of related uncollected deferred revenue in the consolidated balance sheets.
The amount of revenues recognized during the three months ended March 31, 2025 and 2024 that were included in the opening deferred revenue
balance are approximately $
Disaggregation of Revenues
The Company disaggregates its revenues from contracts
by product/service types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenues and cash
flows are affected by economic factors.
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues from on-premise software | $ | $ | ||||||
| Revenues from maintenance and support services | ||||||||
| Revenues from software as a service (“SaaS”) | ||||||||
| Revenues from software development and other miscellaneous services | ||||||||
| Revenues from customized software development and services | ||||||||
| Revenues from consulting services | ||||||||
| Total revenues | $ | $ | ||||||
The Company’s disaggregation of revenues by product/service for the three months ended March 31, 2025 and 2024 is as follows:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues from customer experience management platform | $ | $ | ||||||
| Revenues from process mining | ||||||||
| Revenues from robotic process automation | ||||||||
| Revenues from task mining | ||||||||
| Revenues from customized software development and services | ||||||||
| Revenues from consulting services | ||||||||
| Revenues from others | ||||||||
| Total revenues | $ | $ | ||||||
F-9
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist primarily of accounts receivable, note receivable and other receivable. The Company usually does not require collateral or other security to support these receivables. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.
For the three months ended March 31, 2025, customer
B represents
As of March 31, 2025 and December 31, 2024, customer A represents
For the three months ended March 31, 2025, vendor
A represents
As of March 31, 2025, no vendor accounts for more than 10% of the Company’s
total accounts payable and accrued expenses. As of December 31, 2024, vendor B represents
Segment Reporting
ASC Topic 280, “Segment Reporting”, requires use of the management approach model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker (“CODM”) organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company (see NOTE 18).
Stock-based Compensation
The Company accounts for stock-based compensation awards in accordance with ASC Topic 718, “Compensation – Stock Compensation”. The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in the unaudited consolidated statements of operations and comprehensive loss based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period or vesting period. The Company records forfeitures as they occur.
Fair Value Measurements
The Company performs fair value measurements in accordance with ASC Topic 820. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset’s or a liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC Topic 820 establishes three levels of inputs that may be used to measure fair value:
| ● | Level 1: quoted prices in active markets for identical assets or liabilities; | |
| ● | Level 2: inputs other than Level 1 that are observable, either directly or indirectly; or | |
| ● | Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. |
As of March 31, 2025 and December 31, 2024, the carrying values of current assets, except for investments in marketable securities, and current liabilities approximated their fair values reported in the consolidated balance sheets due to the short-term maturities of these instruments.
F-10
Assets measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 are summarized below (also see NOTE 6).
| Fair Value Measurements as of March 31, 2025 | ||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Fair Value at March 31, 2025 | |||||||||||||
| Investments in marketable securities | ||||||||||||||||
| Long-term investment in warrants | ||||||||||||||||
| Fair Value Measurements as of December 31, 2024 | ||||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Fair Value at December 31, 2024 | |||||||||||||
| Investments in marketable securities | ||||||||||||||||
| Long-term investment in warrants | ||||||||||||||||
Recent Accounting Pronouncements
In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. ASU No. 2023-09 is effective for public companies for annual reporting periods beginning after December 15, 2024, on a prospective basis. For all other entities, it is effective for annual reporting periods beginning after December 15, 2025, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its unaudited consolidated financial statements and related disclosures.
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, requiring public companies to disclose additional information about specific expense categories in the notes to the consolidated financial statements on an annual and interim basis. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its unaudited consolidated financial statements and related disclosures.
F-11
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable consist of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Accounts receivable – non-factored | $ | $ | ||||||
| Accounts receivable – factored with recourse | ||||||||
| Total accounts receivable, gross | ||||||||
| Less: allowance for credit losses | ||||||||
| Total accounts receivable | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Accounts receivable, non-current | $ | $ | ||||||
NOTE 4 – PREPAID EXPENSES
Prepaid expenses consist of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Prepayments to software and consulting services vendors | $ | $ | ||||||
| Prepaid marketing fees | ||||||||
| Prepaid subscription fees | ||||||||
| Prepaid insurance premium | ||||||||
| Others | ||||||||
| Total prepaid expenses | $ | $ | ||||||
NOTE 5 – RELATED PARTY TRANSACTIONS
As of March 31, 2025 and December 31, 2024, the
Company had a due to related parties balance of $
As of March 31, 2025 and December 31, 2024, the
Company had a due to related parties balance of and $
F-12
As of March 31, 2025 and December 31, 2024, the
Company had a loan receivable balance of $
As of March 31, 2025 and December 31, 2024, the
Company had a short-term debt balance of $
NOTE 6 – INVESTMENTS
Investment in Warrants
The Company received warrants from its customers as noncash consideration from consulting services. The warrants are not registered for public sale and are initially measured at fair value at contract inception. The Company’s investment in warrants is measured on a recurring basis and carried on the consolidated balance sheets at an estimated fair value at the end of the period. The valuation of investment in warrants is determined using the Black-Scholes model based on the stock price, exercise price, expected volatility, time to maturity, and risk-free interest rate for the term of the warrants exercise.
The following table summarizes the Company’s investment in warrants activities for the three months ended March 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Fair value of investment in warrants at beginning of the period | $ | $ | ||||||
| Changes in fair value of investment in warrants | ( | ) | ( | ) | ||||
| Fair value of investment in warrants at end of the period | $ | $ | ||||||
Investments in Marketable Securities
The Company’s investments in marketable
securities represent stocks received from its customers as noncash consideration from consulting services and stocks received upon the
exercise of warrants described above. They are registered for public sale with readily determinable fair values, and are measured at quoted
prices on a recurring basis at the end of the period.
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Fair value of investments in marketable securities at beginning of the period | $ | $ | ||||||
| Changes in fair value of investments in marketable securities | ( | ) | ( | ) | ||||
| Marketable securities sold | ( | ) | ||||||
| Fair value of investments in marketable securities at end of the period | $ | $ | ||||||
F-13
NOTE 7 – LONG-TERM NOTE RECEIVABLE
On September 1, 2023, the Company purchased a
$
NOTE 8 – PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Machinery and equipment | ||||||||
| Vehicle | ||||||||
| Software | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation expenses are $
NOTE 9 – LEASES
The Company has entered into operating leases
for office space with terms ranging from two to fifteen years, and finance leases for office equipment and vehicle with terms of five
years. The estimated effect of lease renewal and termination options, as applicable, that are reasonably certain to be exercised in the
determination of the lease term and initial measurement of right-of-use assets and lease liabilities is included in the unaudited consolidated
financial statements. Right-of-use assets of finance leases of $
Operating lease costs for lease payments are recognized on a straight-line basis over the lease term. Finance lease costs include amortization, which are recognized on a straight-line basis over the expected life of the leased assets, and interest expense, which are recognized following an effective interest rate method. Leases with initial term of twelve months or less are not recorded in the consolidated balance sheets.
The components of lease costs are as follows:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Finance lease costs | ||||||||
| Amortization of right-of-use assets | $ | $ | ||||||
| Interest on lease liabilities | ||||||||
| Total finance lease costs | ||||||||
| Operating lease costs | ||||||||
| Total lease costs | $ | $ | ||||||
F-14
The following table presents supplemental information related to the Company’s leases:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from finance leases | $ | $ | ||||||
| Operating cash flows from operating leases | ||||||||
| Financing cash flows from finance leases | ||||||||
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | ||||||||
| Weighted average remaining lease term (years) | ||||||||
| Finance leases | ||||||||
| Operating leases | ||||||||
| Weighted average discount rate (per annum) | ||||||||
| Finance leases | % | % | ||||||
| Operating leases | % | % | ||||||
As of March 31, 2025, the future maturity of lease liabilities is as follows:
| Year Ended December 31, | Finance lease | Operating leases | ||||||
| Remaining of 2025 | $ | $ | ||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less: imputed interest | ( | ) | ( | ) | ||||
| Total lease liabilities | ||||||||
| Less: current portion | ( | ) | ( | ) | ||||
| Non-current lease liabilities | $ | $ | ||||||
Pursuant to the operating lease agreements, the
Company made security deposits to the lessors. The security deposits amounted to $
NOTE 10 – OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued consumption taxes | $ | $ | ||||||
| Customer refund liability* | ||||||||
| Others | ||||||||
| Total other current liabilities | $ | $ | ||||||
| * |
F-15
NOTE 11 – FACTORING LIABILITY
Sigmaways, the subsidiary acquired by the Company
in February 2023, entered into a factoring and security agreement (“Factoring Agreement”) with The Southern Bank Company,
an unrelated factor (“Factor”), in 2017, for the purpose of factoring certain accounts receivable. Under the terms of the
Factoring Agreement, Sigmaways may offer for sale, and the Factor may purchase in its sole discretion, certain accounts receivable of
Sigmaways (“Purchased Receivable”). The Factoring Agreement provided for a maximum of $
Selected accounts receivable is submitted to the
Factor, and Sigmaways receives
The Factoring Agreement specifies that eligible accounts receivable is factored with recourse. Under the terms of the recourse provision, Sigmaways is required to reimburse the Factor, upon demand, for Purchased Receivable that is not paid on time by the customers. The performance of all obligations and payments to the Factor is personally guaranteed by Prakash Sadasivam, the CEO of Sigmaways and CSO of the Company, and secured by all Sigmaways’ now owned and hereafter assets and any sums maintained by the Factor that are identified as payable to Sigmaways.
The Factoring Agreement has an initial term of twelve months and automatically renews for successive twelve-month renewal periods unless terminated pursuant to the terms of the Factoring Agreement. Sigmaways may terminate the Factoring Agreement with sixty days’ written notice to the Factor and is subject to certain early termination fee.
The Factoring Agreement contains covenants that are customary for accounts receivable-based factoring agreements and also contains provisions relating to events of default that are customary for agreements of this type.
As of March 31, 2025 and December 31, 2024, there
were $
NOTE 12 – INSURANCE PREMIUM FINANCING
In January 2025, the Company entered into an insurance
premium financing agreement with AFCO Direct, a division of AFCO Credit Corporation, for $
In January 2024, the Company entered into an insurance
premium financing agreement with BankDirect Capital Finance for $
As of March 31, 2025 and December 31, 2024, the
balances of the insurance premium financing were $
NOTE 13 – DEBTS
Short-term Debt
The Company’s short-term debt represents a loan borrowed from a financial institution as follows:
| Name of Financial Institution | Original Amount Borrowed | Loan Duration | Monthly Interest Rate | Balance as of March 31, 2025 | Balance as of December 31, 2024 | ||||||||||||
| PMG Co., Ltd. | JPY | (a) | % | $ | $ | ||||||||||||
| (a) |
F-16
Long-term Debts
The Company’s long-term debts represent loans borrowed from banks and financial institutions as follows:
| Name of Banks/Financial Institutions | Original Amount Borrowed | Loan Duration | Annual Interest Rate | Balance as of March 31, 2025 | Balance as of December 31, 2024 | |||||||||||||
| Resona Bank, Limited | JPY | (b)(c) | % | $ | $ | |||||||||||||
| Resona Bank, Limited | JPY | (b)(c) | % | |||||||||||||||
| Resona Bank, Limited | JPY | (b)(c) | % | |||||||||||||||
| Sumitomo Mitsui Banking Corporation | JPY | (b)(c) | % | |||||||||||||||
| Sumitomo Mitsui Banking Corporation | JPY | (b)(c) | % | |||||||||||||||
| Sumitomo Mitsui Banking Corporation | JPY | (b)(c) | % | |||||||||||||||
| The Shoko Chukin Bank, Ltd. | JPY | % | ||||||||||||||||
| The Shoko Chukin Bank, Ltd. | JPY | Tokyo Interbank Offered Rate + | % | |||||||||||||||
| Japan Finance Corporation | JPY | % | ||||||||||||||||
| Higashi-Nippon Bank | JPY | (b) | % | |||||||||||||||
| Higashi-Nippon Bank | JPY | (b)(c) | % | |||||||||||||||
| First Home Bank | $ | (d) | Wall Street Journal U.S. Prime Rate + | % | ||||||||||||||
| U.S. Small Business Administration | $ | (d) | % | |||||||||||||||
| Aggregate outstanding principal balances | ||||||||||||||||||
| Less: unamortized debt issuance costs | ( | ) | ( | ) | ||||||||||||||
| Less: current portion | ( | ) | ( | ) | ||||||||||||||
| Non-current portion | $ | $ | ||||||||||||||||
| (b) | ||
| (c) | ||
| (d) |
F-17
Interest expenses for short-term debt and long-term
debts are $
As of March 31, 2025, future minimum principal payments for long-term debts are as follows:
| Principal | ||||
| Year Ended December 31, | Payment | |||
| Remaining of 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
NOTE 14 – INCOME TAXES
United States
HeartCore USA, Sigmaways and HeartCore Financial,
incorporated in the United States, are subject to federal income tax at
Netherlands
Sigmaways B.V. is a company incorporated in Netherlands
in November 2019. The first EUR
Canada
Sigmaways Technologies is a company incorporated
in British Columbia in Canada in August 2020. It is subject to income tax on income arising in, or derived from, the tax jurisdiction
in British Columbia it operates. The basic federal rate of Part I tax is
Vietnam
HeartCore Luvina is a company incorporated in
Vietnam in November 2023. It is subject to standard income tax rate at
Japan
The Company conducts its major businesses in Japan
and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to
examination by the local tax authority. Income taxes in Japan applicable to the Company are imposed by the national, prefectural and municipal
governments, and in the aggregate result in an effective statutory tax rate of approximately
F-18
For the three months ended March 31, 2025 and 2024, the Company’s income tax expense (benefit) are as follows:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Current | $ | $ | ||||||
| Deferred | ( | ) | ||||||
| Income tax expense (benefit) | $ | $ | ( | ) | ||||
The effective tax rate was
NOTE 15 – STOCK-BASED COMPENSATION
Stock Options
On August 6, 2021, the Board of Directors and
shareholders of the Company approved a 2021 Equity Incentive Plan (“2021 Plan”), under which
On August 9, 2022, the Company awarded stock options
to purchase
On February 3, 2023, the Company awarded stock
options to purchase
On August 25, 2023, the Company awarded stock
options to purchase
On August 1, 2023, the Board of Directors of the
Company approved a 2023 Equity Incentive Plan (“2023 Plan”), under which
The following table summarizes the stock options activities and related information for the three months ended March 31, 2025 and 2024:
| Number of Stock Options | Weighted Average Exercise Price | Weighted Average Remaining Term (Years) | Intrinsic Value | |||||||||||||
| As of January 1, 2024 | $ | $ | ||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | - | |||||||||||||||
| Forfeited | ( | ) | - | |||||||||||||
| As of March 31, 2024 | $ | $ | ||||||||||||||
| As of January 1, 2025 | $ | $ | ||||||||||||||
| Granted | - | |||||||||||||||
| Exercised | ( | ) | - | |||||||||||||
| Forfeited | - | |||||||||||||||
| As of March 31, 2025 | $ | $ | ||||||||||||||
| Vested and exercisable as of March 31, 2025 | $ | $ | ||||||||||||||
F-19
The Company recognized stock-based compensation
related to stock options of $
Restricted Stock Units (“RSUs”)
On February 9, 2022, the Company entered into
executive employment agreements with five executives and granted
The following table summarizes the RSUs activities and related information for the three months ended March 31, 2025 and 2024:
| Number of RSUs | Weighted Average Grant Date Fair Value Per Share | |||||||
| Unvested as of January 1, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Unvested as of March 31, 2024 | $ | |||||||
| Unvested as of January 1, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ( | ) | ||||||
| Unvested as of March 31, 2025 | $ | |||||||
The Company recognized stock-based compensation
related to RSUs of $
NOTE 16 – SHAREHOLDERS’ EQUITY
The Company
is authorized to issue
On October
23, 2023, the Company entered into an at the market offering agreement (“ATM Agreement”) with H.C. Wainwright & Co., LLC
(“Wainwright”), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, shares
of the Company’s common shares, par value of $
In November
2023, the Company established a
F-20
As of March
31, 2025 and December 31, 2024, there were
preferred shares were issued and outstanding as of March 31, 2025 and December 31, 2024.
NOTE 17 – NET LOSS PER SHARE
Basic net loss per share is calculated on the basis of weighted average outstanding common shares. Diluted net loss per share is computed on the basis of basic weighted average outstanding common shares adjusted for the dilutive effect of stock options and RSUs. Potentially dilutive common shares are determined by applying the treasury stock method to the assumed conversion of share repurchase liability to common shares related to the early exercised stock options and unvested RSUs, and are not included in the calculation of diluted loss per share if their effect would be anti-dilutive.
The computation of basic and diluted net loss per share for the three months ended March 31, 2025 and 2024 is as follows:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Net loss attributable to HeartCore Enterprises, Inc. common shareholders | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average number of common shares outstanding used in calculating net loss per share | ||||||||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
For the three months ended March 31, 2025 and 2024, the weighted average common shares outstanding are the same for basic and diluted net loss per share calculations, as the inclusion of potentially dilutive common shares related to the early exercised stock options and unvested RSUs would have an anti-dilutive effect.
NOTE 18 – SEGMENT AND GEOGRAPHIC INFORMATION
Segment Information
Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the CODM, the CEO of the Company, in making decisions regarding resource allocation and performance assessment. The Company determines its operations constitute a single operating segment and reportable segment in accordance with ASC Topic 280. The CODM assesses financial performance and decides how to allocate resources based on consolidated net income (loss). Segment assets are reported on the Company’s consolidated balance sheets.
The following table summarizes selected financial information with respect to the Company’s single operating segment and reportable segment for the three months ended March 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Less: | ||||||||
| Software related cost of revenues | ||||||||
| Consulting related cost of revenues | ||||||||
| Selling expenses | ||||||||
| General and administrative expenses | ||||||||
| Research and development expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Total other expenses | ( | ) | ( | ) | ||||
| Loss before income tax expense (benefit) | ( | ) | ( | ) | ||||
| Income tax expense (benefit) | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
F-21
Geographic Information
The following table summarizes the breakdown of revenues by geography for the three months ended March 31, 2025 and 2024:
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Japan | $ | $ | ||||||
| United States | ||||||||
| International | ||||||||
| Total revenues | $ | $ | ||||||
The following table summarizes the breakdown of long-lived assets by geography as of March 31, 2025 and December 31, 2024:
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Japan | $ | $ | ||||||
| United States | ||||||||
| International | ||||||||
| Total long-lived assets | $ | $ | ||||||
NOTE 19 – SUBSEQUENT EVENTS
During the subsequent period, the Company sold
marketable securities for proceeds of approximately $
F-22
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking statements made by us or on our behalf. We and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties can be found in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.
Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained in this Quarterly Report on Form 10-Q and the information incorporated by reference in this Quarterly Report on Form 10-Q to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based.
Business Overview
We are a leading software development company based in Tokyo, Japan. We provide software through two business units. The first business unit, our CX division, includes a customer experience management business (the “CXM Platform”) that has been in existence for over 15 years. Our CXM Platform includes marketing, sales, service and content management systems, as well as other tools and integrations, that enable companies to attract and engage customers throughout the customer experience. We also provide education, services and support to help customers be successful with our CXM Platform.
The second business unit, our DX division, is a digital transformation business which provides customers with robotics process automation, process mining and task mining to accelerate the digital transformation of enterprises. We also have an ongoing technology innovation team to develop software that supports the narrow needs of large enterprise customers.
1
During 2022, we started the GO IPO business, which supports Japanese companies listing on Nasdaq and NYSE in the United States. As of March 31, 2025, we have entered into consulting agreements with 14 companies to assist them in their IPO process, whereby we are entitled to receive from each company a consulting fee that ranges from $380,000 to $900,000 and warrants or stock acquisition rights to purchase 1% to 4% of the fully-diluted share capital of such companies that is exercisable on certain dates at an exercise price of $0.01 or JPY1 per share.
We were incorporated in the State of Delaware on May 18, 2021. We conduct business activities principally through our wholly owned subsidiary, HeartCore Co. Ltd. (“HeartCore Japan”), which was established in Japan by Sumitaka Yamamoto, our Chairman of Board, Chief Executive Officer and President and a significant stockholder of the Company, in 2009.
On September 6, 2022, the Company entered into a share exchange and purchase agreement to acquire 51% of the outstanding shares of Sigmaways, Inc. (“Sigmaways”), a company incorporated under the laws of the State of California, and its wholly owned subsidiaries. Sigmaways and its wholly owned subsidiaries are engaged in the business of developing and sales of software in the United States. The acquisition closed on February 1, 2023.
In the first quarter of 2023, we formed HeartCore Financial, Inc. (“HeartCore Financial”) in the U.S. as part of our Go IPO consulting business. In the fourth quarter of 2023, we formed HeartCore Luvina Vietnam Company (“HeartCore Luvina”) in Vietnam, which is engaged in the business of software development.
In April 2024, HeartCore Financial incorporated a branch office, HeartCore Financial, Inc. – Japan Branch Office, in Japan.
Recent Developments
Change in Controlled Company Status and Board Committee Formation
In the first quarter of 2025, the Company announced that its Board of Directors (the “Board”) had formed a Compensation Committee and a Nominating and Corporate Governance Committee. The Compensation Committee is comprised of three independent directors: Ferdinand Groenewald, Heather Neville (Chair) and Koji Sato. The Nominating and Corporate Governance Committee is comprised of three independent directors: Ferdinand Groenewald, Heather Neville and Koji Sato (Chair).
In exchange for their service on the Compensation Committee, the Chair of the Compensation Committee will receive an additional $7,000 annually, and the other Compensation Committee members will receive an additional $4,000 annually.
In exchange for their service on the Nominating and Corporate Governance Committee, the Chair of the Nominating and Corporate Governance Committee will receive an additional $6,000 annually, and the other Nominating and Corporate Governance Committee members will receive an additional $3,000 annually.
2
Upon initially listing with the Nasdaq Capital Market, the Company qualified as a “controlled company” because more than 50% of the voting power for the election of directors was held by Mr. Yamamoto. As a result of certain sales under the Company’s previously announced at-the-market offering, Mr. Yamamoto no longer holds more than 50% of the voting power for the election of directors and therefore, the Company no longer qualifies as a controlled company. As a result, the Company is required, subject to phase-in rules, to comply with Nasdaq requirements that:
| ● | a majority of the Board consist of independent directors as defined by Nasdaq’s applicable rules and regulations; |
| ● | the compensation of the Company’s executive officers be determined, or recommended to the Board for determination, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a compensation committee comprised solely of independent directors; and |
| ● | director nominees be selected, or recommended to the Board for selection, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a nomination committee comprised solely of independent directors. |
The Company previously availed itself of certain of the controlled company exemptions. More specifically, the Company did not have a compensation committee or a nominating and corporate governance committee.
We no longer qualify as a controlled company and accordingly, we have formed a Compensation Committee and a Nominating and Corporate Governance Committee; however, we currently utilize and presently intend to continue to utilize, the exemption relating to a majority independent Board. Pursuant to Nasdaq’s phase-in rules, we have a period of one year from the date on which we ceased to be a controlled company to comply with the majority independent Board requirement.
Three of six members of the Company’s Board are independent directors within the meaning of Nasdaq Capital Market rules: Ferdinand Groenewald, Heather Neville, and Koji Sato.
Nasdaq Notice Regarding Minimum Bid Price Requirement
On May 6, 2025, the Company received written notice (the “Bid Price Notice”) from the Nasdaq Listing Qualification Department (the “Nasdaq Staff”) indicating that the Company is not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”) for continued listing on the Nasdaq Capital Market. The notification of noncompliance has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Capital Market under the symbol “HTCR,” and the Company is currently monitoring the closing bid price of its common stock and evaluating its alternatives, if appropriate, to resolve the deficiency and regain compliance with this rule.
The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets this requirement. The Bid Price Notice indicated that the Company will be provided 180 calendar days, or until November 3, 2025, in which to regain compliance. If at any time during this period the closing bid price of the Company’s common stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Nasdaq Staff will provide the Company with written confirmation of compliance and the matter will be closed.
Alternatively, if the Company fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, but meets the continued listing requirement for market value of publicly held shares and all of the other applicable standards for initial listing on the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and provides written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then the Company may be granted an additional 180 calendar days to regain compliance with Rule 5550(a)(2).
There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement, even if it maintains compliance with the other listing requirements. The Company is considering actions that it may take in response to the Bid Price Notice in order to regain compliance with the continued listing requirements, but no decisions regarding a response have been made at this time.
Financial Overview
For the three months ended March 31, 2025 and 2024, we generated revenues of $3,587,026 and $5,046,732, respectively, and reported net loss of $3,137,381 and $1,478,002, respectively, and cash flows used in operating activities of $2,000,791 and $898,619, respectively. As noted in our unaudited consolidated financial statements, as of March 31, 2025, we had an accumulated deficit of $19,331,835.
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Results of Operations
Comparison of Results of Operations for the Three Months Ended March 31, 2025 and 2024
The following table summarizes our operating results as reflected in our unaudited statements of operations for the three months ended March 31, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.
| For the Three Months Ended March 31, | ||||||||||||||||||||||||
| 2025 | 2024 | Variance | ||||||||||||||||||||||
| % of | % of | |||||||||||||||||||||||
| Amount | Revenues | Amount | Revenues | Amount | % | |||||||||||||||||||
| Revenues | $ | 3,587,026 | 100.0 | % | $ | 5,046,732 | 100.0 | % | $ | (1,459,706 | ) | -28.9 | % | |||||||||||
| Cost of revenues | 2,486,742 | 69.3 | % | 3,014,543 | 59.7 | % | (527,801 | ) | -17.5 | % | ||||||||||||||
| Gross profit | 1,100,284 | 30.7 | % | 2,032,189 | 40.3 | % | (931,905 | ) | -45.9 | % | ||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||
| Selling expenses | 291,160 | 8.1 | % | 219,707 | 4.4 | % | 71,453 | 32.5 | % | |||||||||||||||
| General and administrative expenses | 1,929,388 | 53.8 | % | 2,406,303 | 47.6 | % | (476,915 | ) | -19.8 | % | ||||||||||||||
| Research and development expenses | 123,893 | 3.5 | % | 89,134 | 1.8 | % | 34,759 | 39.0 | % | |||||||||||||||
| Total operating expenses | 2,344,441 | 65.4 | % | 2,715,144 | 53.8 | % | (370,703 | ) | -13.7 | % | ||||||||||||||
| Loss from operations | (1,244,157 | ) | -34.7 | % | (682,955 | ) | -13.5 | % | (561,202 | ) | 82.2 | % | ||||||||||||
| Other expenses | (1,836,588 | ) | -51.2 | % | (875,214 | ) | -17.4 | % | (961,374 | ) | 109.8 | % | ||||||||||||
| Loss before income tax expense (benefit) | (3,080,745 | ) | -85.9 | % | (1,558,169 | ) | -30.9 | % | (1,522,576 | ) | 97.7 | % | ||||||||||||
| Income tax expense (benefit) | 56,636 | 1.6 | % | (80,167 | ) | -1.6 | % | 136,803 | -170.6 | % | ||||||||||||||
| Net loss | (3,137,381 | ) | -87.5 | % | (1,478,002 | ) | -29.3 | % | (1,659,379 | ) | 112.3 | % | ||||||||||||
| Less: net loss attributable to non-controlling interests | (50,389 | ) | -1.4 | % | (144,652 | ) | -2.9 | % | 94,263 | -65.2 | % | |||||||||||||
| Net loss attributable to HeartCore Enterprises, Inc. | $ | (3,086,992 | ) | -86.1 | % | $ | (1,333,350 | ) | -26.4 | % | $ | (1,753,642 | ) | 131.5 | % | |||||||||
Revenues
Our total revenues decreased by $1,459,706, or 28.9%, to $3,587,026 for the three months ended March 31, 2025 from $5,046,732 for the three months ended March 31, 2024, primarily attributable to (i) a decreased revenue of $743,854 from sale on-premise software, mainly because the Company obtained several large orders of CMS license during the first quarter of 2024, while only one such comparable large order was obtained in the current period; (ii) a decreased revenue of $336,812 from customized software development and services in connection with the intense competition of the software market in the U.S.; and (iii) a decreased revenue of $329,938 from GO IPO consulting services, as no new IPO consulting orders were entered this quarter mainly as heightened uncertainty in the U.S. stock market caused by rising tariffs.
Cost of Revenues
Our total cost of revenues decreased by $527,801, or 17.5%, to $2,486,742 for the three months ended March 31, 2025 from $3,014,543 for the three months ended March 31, 2024, mainly attributable to the decrease of $374,939 and $226,468 in the cost of customized software development and services and GO IPO consulting services, respectively, in light of the decreases in sales.
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Gross Profit
Our total gross profit decreased by $931,905, or 45.9%, to $1,100,284 for the three months ended March 31, 2025 from $2,032,189 for the three months ended March 31, 2024, mainly attributable to (i) a decrease of $751,215 in gross profit from sale of on-premises software, as the sale decreased dramatically while there was not much change in the corresponding costs as the product was developed independently and fixed, which were not proportional to sales, and (ii) a decrease of $103,470 in gross profit from GO IPO consulting services, in light of the decrease in sale.
For the reasons discussed above, our overall gross profit margin decreased by 9.6% to 30.7% for the three months ended March 31, 2025 from 40.3% for the three months ended March 31, 2024.
Selling Expenses
Our selling expenses increased by $71,453, or 32.5%, to $291,160 for the three months ended March 31, 2025 from $219,707 in the three months ended March 31, 2024, primarily attributable to an increase of $97,622 in sales salaries, commissions and welfare, resulting from the employee restructuring in late 2024 by transferring certain administrative and management department employees to sales department to promote selling activities for software business in Japan.
As a percentage of revenues, our selling expenses accounted for 8.1% and 4.4% of our total revenues for the three months ended March 31, 2025 and 2024, respectively.
General and Administrative Expenses
Our general and administrative expenses decreased by $476,915 or 19.8%, to $1,929,388 for the three months ended March 31, 2025 from $2,406,303 in the three months ended March 31, 2024, primarily attributable to (i) a decrease of $153,770 in salaries and welfare expenses, mainly resulting from the employee restructuring in late 2024 as mentioned above; (ii) a decrease of $159,874 in depreciation and amortization expenses, primarily because we fully impaired intangible asset arose from acquisition of Sigmaways at the end of last fiscal year, resulting in no amortization expenses were recorded in current quarter; and (iii) a decrease of $113,477 in office, utility and other expenses, reflecting from our continued efforts to save operating expenses.
As a percentage of revenues, general and administrative expenses were 53.8% and 47.6% of our revenues for the three months ended March 31, 2025 and 2024, respectively.
Research and Development Expenses
Our research and development expenses increased by $34,759 or 39.0%, to $123,893 in the three months ended March 31, 2025 from $89,134 in the three months ended March 31, 2024, primarily attributable to an increase of $79,348 in salaries and welfare expenses for the employees assigned to the development of a new product, Global CMS, which started in late 2024; offset by a decrease of $44,250 in outsourcing costs due to the expiration of certain outsourcing contracts in the current period.
As a percentage of revenues, research and development expenses were 3.5% and 1.8% of our revenues for the three months ended March 31, 2025 and 2024, respectively.
Other Income (Expenses), Net
Our other income (expenses) primarily includes changes in fair value of investments in marketable securities, changes in fair value of investment in warrants, interest income generated from bank deposits, interest expenses for bank loans, other income, and other expenses. Total other expenses, net, of $875,214 for the three months ended March 31, 2024 increased by $961,374 or 109.8% to total other expenses, net, of $1,836,588 for the three months ended March 31, 2025, primarily attributable to an increase of $1,547,582 in loss on fair value changes in investments in marketable securities due to decreased stock price of investees, partially offset by a decrease of $627,266 in loss on fair value changes in investment in warrants.
Income Tax Expense (Benefit)
Income tax expense was $56,636 for the three months ended March 31, 2025, representing a decrease of $136,803, or 170.6% from income tax benefit of $80,167 in the three months ended March 31, 2024, mainly because we recognized deferred income tax benefit in connection with amortization expense for intangible asset raised from acquisition of Sigmaways in the three months ended March 31, 2024, whereas, the intangible asset was fully impaired in the fourth quarter of 2024, and thus no such deferred income tax benefit recorded in current quarter. Meanwhile, the income tax expenses incurred in the current quarter mainly attributable to the decrease of deferred tax assets due to various revenue and expenses adjustments.
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Net Loss
As a result of the foregoing, we reported a net loss of $3,137,381 for the three months ended March 31, 2025, representing a $1,659,379 or 112.3% increase from a net loss of $1,478,002 for the three months ended March 31, 2024.
Net Loss Attributable to Non-controlling Interests
We owned 51% equity interest of Sigmaways and its subsidiaries and 51% equity interest of HeartCore Luvina. Accordingly, we recorded net loss attributable to the non-controlling interests of $50,389 and $144,652 in the three months ended March 31, 2025 and 2024, respectively.
Net Loss Attributable to HeartCore Enterprises, Inc.
As a result of the foregoing, we reported a net loss attributable to HeartCore Enterprises, Inc. of $3,086,992 for the three months ended March 31, 2025, representing a $1,753,642 or 131.5% increase from a net loss attributable to HeartCore Enterprises, Inc. of $1,333,350 for the three months ended March 31, 2024.
Liquidity and Capital Resources
As of March 31, 2025, we had $738,984 in cash and cash equivalents as compared to $2,121,089 as of December 31, 2024. We also had $2,114,655 in accounts receivable as of March 31, 2025. Our accounts receivable primarily include balance due from customers for our on-premise software sold and services provided and accepted by customers, as well as amounts billable to the customers for customized software development and services.
The following table sets forth summary of our cash flows for the periods indicated:
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash flows used in operating activities | $ | (2,000,791 | ) | $ | (898,619 | ) | ||
| Net cash flows provided by investing activities | 473,061 | 1,650,814 | ||||||
| Net cash flows provided by (used in) financing activities | 142,940 | (474,752 | ) | |||||
| Effect of exchange rate changes | 2,685 | (70,671 | ) | |||||
| Net change in cash and cash equivalents | (1,382,105 | ) | 206,772 | |||||
| Cash and cash equivalents, beginning of the period | 2,121,089 | 1,012,479 | ||||||
| Cash and cash equivalents, end of the period | $ | 738,984 | $ | 1,219,251 | ||||
Operating Activities
Net cash flows used in operating activities was $2,000,791 for the three months ended March 31, 2025, primarily consisting of the following:
| ● | Net loss of $3,137,381 for the three months ended March 31, 2025. | |
| ● | A decrease of $496,079 in deferred revenue, due to decreased upfront payment received for sales of on-premise software revenue as we obtained fewer orders. | |
| ● | A decrease of $219,830 in accounts payable and accrued expenses, as we continuously paid off such liabilities and decreased purchases to save operating expenses. | |
| ● | A decrease of $178,339 in accrued payroll and other employee costs, resulting from payment for accrued bonus and sales commission during the period. | |
| ● | Offset by a loss of $1,781,664 on fair value changes in investments in marketable securities. | |
| ● | Offset by a loss of $117,305 on disposal of property and equipment brought by early termination of an operating lease. | |
| ● | Offset by non-cash lease expense of $90,508. |
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Investing Activities
Net cash flows provided by investing activities amounted to $473,061 for the three months ended March 31, 2025, primarily attributable to the proceeds of $462,763 from sale of marketable securities.
Financing Activities
Net cash flows provided by financing activities amounted to $142,940 for the three months ended March 31, 2025, primarily consisting of (i) proceeds of $134,689 from short-term debt borrowing; (ii) proceeds of $117,000 from exercise of stock options; (iii) collection of subscription receivable of $103,942; and offset by (iv) repayment of $165,165 for long-term debts.
Contractual Obligations
Lease Commitment
The Company has entered into operating leases for office space with terms ranging from two to fifteen years, and a finance lease for vehicle with the term of five years.
As of March 31, 2025, future minimum lease payments under the non-cancelable lease agreements are as follows:
| Year Ended December 31, | Finance Lease | Operating Leases | ||||||
| Remaining of 2025 | $ | 13,199 | $ | 232,733 | ||||
| 2026 | 17,599 | 274,468 | ||||||
| 2027 | 17,599 | 274,468 | ||||||
| 2028 | 11,733 | 274,468 | ||||||
| 2029 | - | 274,468 | ||||||
| Thereafter | - | 637,857 | ||||||
| Total lease payments | 60,130 | 1,968,462 | ||||||
| Less: imputed interest | (1,344 | ) | (87,645 | ) | ||||
| Total lease liabilities | 58,786 | 1,880,817 | ||||||
| Less: current portion | (16,932 | ) | (279,840 | ) | ||||
| Non-current lease liabilities | $ | 41,854 | $ | 1,600,977 | ||||
Debts
The Company’s debts included short-term debt and long-term debts borrowed from banks and financial institutions.
As of March 31, 2025, future minimum principal payments for long-term debts are as follows:
| Principal | ||||
| Year Ended December 31, | Payment | |||
| Remaining of 2025 | $ | 255,284 | ||
| 2026 | 375,797 | |||
| 2027 | 403,051 | |||
| 2028 | 179,204 | |||
| 2029 | 27,924 | |||
| Thereafter | 304,723 | |||
| Total | $ | 1,545,983 | ||
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of March 31, 2025.
7
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited consolidated financial statements. These financial statements are prepared in accordance with the generally accepted accounting principles in the United States (“U.S. GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenues and expenses, to disclose contingent assets and liabilities on the date of the unaudited consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting period. We continue to evaluate the estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. We believe there are no critical accounting policies and estimates for the three months ended March 31, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2025, the Company’s disclosure controls and procedures were not effective, for the same reason as previously disclosed under Item 9A. “Controls and Procedures” in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission on March 31, 2025.
Changes in Internal Control Over Financial Reporting
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or 15d-15 of the Exchange Act that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.
ITEM 1A. RISK FACTORS
As a smaller reporting company, the Company is not required to disclose material changes to the risk factors that were contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as updated from time to time.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There have been no defaults in any material payments during the covered period.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
(a) None.
(b) There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s Board of Directors since the Company last provided disclosure in response to the requirements of Item 407(c)(3) of Regulation S-K.
(c) During the quarter ended March 31, 2025,
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ITEM 6. EXHIBITS
| Exhibit Number |
Description of Document | |
| 31.1* | Rule 13a-14(a) Certification of Principal Executive Officer. | |
| 31.2* | Rule 13a-14(a) Certification of Principal Financial Officer. | |
| 32.1** | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Principal Executive Officer and Principal Financial Officer. | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase | |
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Filed herewith. |
| ** | Furnished herewith. |
| † | Management contracts and compensation plans and arrangements. |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
| HEARTCORE ENTERPRISES, INC. | ||
| Dated: May 15, 2025 | By: | /s/ Sumitaka Yamamoto |
| Sumitaka Yamamoto | ||
| Chief Executive Officer and President (principal executive officer) | ||
| Dated: May 15, 2025 | By: | /s/ Qizhi Gao |
| Qizhi Gao | ||
| Chief Financial Officer (principal financial officer and principal accounting officer) | ||
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