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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): May 15, 2025

 

HEARTCORE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-41272   87-0913420

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

 

1-2-33, Higashigotanda, Shinagawa-ku, Tokyo, Japan

(Address of principal executive offices) 00000

 

+81-3-6409-6966

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions.

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock   HTCR   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On May 15, 2025, HeartCore Enterprises, Inc. (the “Company”) issued a press release announcing financial results for the quarter ended March 31, 2025. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in any website is not a part of this Current Report on Form 8-K.

 

The information included in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit

No.

  Description
99.1   Press release of the registrant dated May 15, 2025.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  HEARTCORE ENTERPRISES, INC.
     
Dated: May 15, 2025 By: /s/ Sumitaka Yamamoto
  Name: Sumitaka Yamamoto
  Title: Chief Executive Officer

 

 

EX-99.1 2 ex99-1.htm EX-99.1

 

Exhibit 99.1

 

 

HeartCore Reports First Quarter 2025 Financial Results

 

NEW YORK and TOKYO, May 15, 2025 (GLOBE NEWSWIRE) – HeartCore Enterprises, Inc. (Nasdaq: HTCR) (“HeartCore” or the “Company”), a leading enterprise software and consulting services company based in Tokyo, reported financial results for the first quarter ended March 31, 2025.

 

First Quarter 2025 and Recent Operational & Financial Highlights

 

  Announced strategic partnership with NEC Solutions Innovators, Ltd. to enhance CMS implementation process
  Established new business development team aimed at strengthening customer success across HeartCore’s CMS business
  Announced plans to expand the Go IPO consulting business into South Korea. The Company adjusted its scheduled South Korea IPO seminar event to September 2025

 

Management Commentary

 

HeartCore CEO Sumitaka Kanno commented: “We continued to make meaningful strategic advancements across our software business this quarter, the cornerstone of HeartCore Enterprises. Building on the foundational improvements implemented last year, we launched a dedicated business development team this past quarter focused on strengthening customer success initiatives to better serve our CMS customers and maintain our strong retention rate. Our subsidiary Sigmaways has also made encouraging progress in reducing costs and has narrowed its losses compared to the same period last year. We will continue to closely monitor and prudently manage costs across Sigmaways’ operations. The deficit on our balance sheet this quarter does not directly reflect the performance of our core business but is rather attributable to the SBC Medical Group shares we hold. The subsequent decline in their stock price has ultimately reduced the value of the assets held by HeartCore. Nevertheless, these shares continue to offer additional liquidity options if needed. Furthermore, a few of our Go IPO clients are expected to begin trading in 2025, which will in turn provide us with additional equity in these companies following their listings. With our upcoming South Korea IPO seminar scheduled for September, we are preparing our efforts to expand our footprint beyond Japan into new APAC regions. We look forward to announcing incremental updates across both businesses throughout the rest of the year.”

 

First Quarter 2025 Financial Results

 

Revenues were $3.6 million compared to $5.0 million in the same period last year. The decrease was primarily due to decreased on-premise software revenue, decreased customized software development and services revenue attributed to the business slowdown of Sigmaways, and decreased Go IPO consulting services revenue as no new IPO consulting orders were entered this quarter.

 

Gross profit was $1.1 million compared to $2.0 million in the same period last year. The decrease was primarily due to a decrease of gross profit from on-premises software and Go IPO consulting services.

 

Operating expenses decreased 14% to $2.3 million, compared to $2.7 million in the same period last year. The improvement was primarily due to a decrease in general and administrative expenses.

 

Net loss was $3.1 million, compared to $1.5 million in the same period last year, as a result of the aforementioned decrease in revenue and gross profit for the quarter.

 

Adjusted EBITDA for the year totaled a loss of $1.3 million, compared to a loss of $0.3 million in the same period last year.

 

As of March 31, 2025, the Company had cash and cash equivalents of $0.7 million, compared to $2.1 million on December 31, 2024.

 

 

 

 

About HeartCore Enterprises, Inc.

 

Headquartered in Tokyo, Japan, HeartCore Enterprises is a leading enterprise software and consulting services company. HeartCore offers Software as a Service (SaaS) solutions to enterprise customers in Japan and worldwide. The Company also provides data analytics services that allow enterprise businesses to create tailored web experiences for their clients through best-in-class design. HeartCore’s customer experience management platform (CXM Platform) includes marketing, sales, service and content management systems, as well as other tools and integrations, which enable companies to enhance the customer experience and drive engagement. HeartCore also operates a digital transformation business that provides customers with robotics process automation, process mining and task mining to accelerate the digital transformation of enterprises. HeartCore’s GO IPOSM consulting services helps Japanese-based companies go public in the U.S. Additional information about the Company’s products and services is available at and https://heartcore-enterprises.com/.

 

Non-GAAP Financial Measures Disclaimer

 

This document includes references to adjusted EBITDA, which is a non-GAAP financial measure. For the purposes of this presentation, adjusted EBITDA is calculated by adjusting net loss to exclude depreciation and amortization, impairment of intangible asset, and impairment of goodwill.

 

This measure is presented as supplemental information and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.

 

Management believes that this adjusted EBITDA provides useful information to investors by highlighting the company’s core operational performance, excluding non-cash and non-recurring items. However, non-GAAP financial measures have limitations and should not be considered in isolation or as a substitute for financial results prepared in accordance with GAAP.

 

Item   FY25 Q1     FY24 Q1  
Net Loss   -$ 3.1 million     -$ 1.5 million  
(+) Depreciation and amortization expense   $ 0.0 million     $ 0.2 million  
(+) Changes in fair value of investments in marketable securities   $ 1.8 million     $ 0.2 million  
(+) Changes in fair value of investment in warrants   $ 0.1 million     $ 0.7 million  
(+) Interest income   $ 0.0 million     $ 0.0 million  
(+) Interest expenses   $ 0.0 million     $ 0.0 million  
Adjusted EBITDA   -$ 1.3 million     -$ 0.3 million  

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, or the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this press release are forward-looking statements. In some cases, forward-looking statements can be identified by words such as “believed,” “intend,” “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 are discussed in HeartCore’s filings with the Securities and Exchange Commission. Investors should not place any undue reliance on forward-looking statements since they involve known and unknown, uncertainties and other factors which are, in some cases, beyond HeartCore’s control which could, and likely will materially affect actual results, and levels of activity, performance, or achievements. Any forward-looking statement reflects HeartCore’s current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to operations, results of operations, growth strategy, and liquidity. HeartCore assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The contents of any website referenced in this press release are not incorporated by reference herein.

 

HeartCore Investor Relations Contact:

 

Gateway Group, Inc.

Matt Glover and John Yi

HTCR@gateway-grp.com

(949) 574-3860

 

 

 

 

HEARTCORE ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

 

    March 31,     December 31,  
    2025     2024  
    (Unaudited)        
ASSETS                
Current assets:                
Cash and cash equivalents   $ 738,984     $ 2,121,089  
Accounts receivable     2,114,655       1,950,050  
Investments in marketable securities     2,251,276       4,495,703  
Prepaid expenses     537,970       458,839  
Current portion of long-term note receivable     100,000       100,000  
Due from related party     42,453       40,139  
Other current assets     278,961       251,545  
Total current assets     6,064,299       9,417,365  
                 
Non-current assets:                
Accounts receivable, non-current     694,302       752,930  
Property and equipment, net     438,243       584,854  
Operating lease right-of-use assets     1,830,486       1,936,097  
Long-term investment in warrants     526,165       577,786  
Long-term note receivable     100,000       100,000  
Deferred tax assets     115,802       152,300  
Security deposits     325,441       307,996  
Long-term loan receivable from related party     120,459       123,928  
Other non-current assets     7,810       11,778  
Total non-current assets     4,158,708       4,547,669  
                 
Total assets   $ 10,223,007     $ 13,965,034  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
                 
Current liabilities:                
Accounts payable and accrued expenses   $ 1,839,759     $ 2,039,323  
Accounts payable and accrued expenses - related party     22,814       47,199  
Accrued payroll and other employee costs     517,436       675,502  
Due to related parties     239       932  
Short-term debt     134,689       -  
Short-term debt - related party     75,000       75,000  
Current portion of long-term debts     367,871       401,255  
Insurance premium financing     127,567       16,626  
Factoring liability     127,053       172,394  
Operating lease liabilities, current     279,840       371,951  
Finance lease liabilities, current     16,932       15,956  
Income tax payables     739,450       822,014  
Deferred revenue     1,437,248       1,876,490  
Other current liabilities     1,009,373       907,080  
Total current liabilities     6,695,271       7,421,722  
                 
Non-current liabilities:                
Long-term debts     1,166,678       1,238,813  
Operating lease liabilities, non-current     1,600,977       1,614,996  
Finance lease liabilities, non-current     41,854       43,593  
Other non-current liabilities     117,940       183,895  
Total non-current liabilities     2,927,449       3,081,297  
                 
Total liabilities     9,622,720       10,503,019  
                 
Shareholders’ equity:                
Preferred shares ($0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of March 31, 2025 and December 31, 2024)     -       -  
Common shares ($0.0001 par value, 200,000,000 shares authorized; 22,075,333 and 21,937,987 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively)     2,207       2,193  
Subscription receivable     -       (103,942 )
Additional paid-in capital     20,835,864       20,656,153  
Accumulated deficit     (19,331,835 )     (16,244,843 )
Accumulated other comprehensive income     334,685       343,936  
Total HeartCore Enterprises, Inc. shareholders’ equity     1,840,921       4,653,497  
Non-controlling interests     (1,240,634 )     (1,191,482 )
Total shareholders’ equity     600,287       3,462,015  
                 
Total liabilities and shareholders’ equity   $ 10,223,007     $ 13,965,034  

 

 

 

 

HEARTCORE ENTERPRISES, INC.

Unaudited Consolidated Statements of Operations and Comprehensive Loss

 

    For the three
months ended
March 31,
    For the three
months ended
March 31,
 
    2025     2024  
             
Revenues   $ 3,587,026     $ 5,046,732  
Cost of revenues     2,486,742       3,014,543  
Gross profit     1,100,284       2,032,189  
                 
Operating expenses:                
Selling expenses     291,160       219,707  
General and administrative expenses     1,929,388       2,406,303  
Research and development expenses     123,893       89,134  
Total operating expenses     2,344,441       2,715,144  
                 
Loss from operations     (1,244,157 )     (682,955 )
                 
Other income (expenses):                
Changes in fair value of investments in marketable securities     (1,781,664 )     (234,082 )
Changes in fair value of investment in warrants     (51,621 )     (678,887 )
Interest income     3,020       2,594  
Interest expenses     (29,133 )     (36,661 )
Other income     35,359       97,016  
Other expenses     (12,549 )     (25,194 )
Total other expenses     (1,836,588 )     (875,214 )
                 
Loss before income tax expense (benefit)     (3,080,745 )     (1,558,169 )
                 
Income tax expense (benefit)     56,636       (80,167 )
                 
Net loss     (3,137,381 )     (1,478,002 )
Less: net loss attributable to non-controlling interests     (50,389 )     (144,652 )
Net loss attributable to HeartCore Enterprises, Inc.   $ (3,086,992 )   $ (1,333,350 )
                 
Other comprehensive income (loss):                
Foreign currency translation adjustment     (8,014 )     10,295  
                 
Total comprehensive loss     (3,145,395 )     (1,467,707 )
Less: comprehensive loss attributable to non-controlling interests     (49,152 )     (149,563 )
Comprehensive loss attributable to HeartCore Enterprises, Inc.   $ (3,096,243 )   $ (1,318,144 )
                 
Net loss per common share attributable to HeartCore Enterprises, Inc.                
Basic   $ (0.14 )   $ (0.06 )
Diluted   $ (0.14 )   $ (0.06 )
                 
Weighted average common shares outstanding                
Basic     22,054,029       20,854,714  
Diluted     22,054,029       20,854,714  

 

 

 

 

HEARTCORE ENTERPRISES, INC.

Unaudited Consolidated Statements of Cash Flows

 

    For the three
months ended
March 31,
    For the three
months ended
March 31,
 
    2025     2024  
             
Cash flows from operating activities:                
Net loss   $ (3,137,381 )   $ (1,478,002 )
Adjustments to reconcile net loss to net cash flows                
used in operating activities:                
Depreciation and amortization expenses     26,907       188,085  
Loss on disposal of property and equipment     117,305       -  
Amortization of debt issuance costs     1,222       1,173  
Non-cash lease expense     90,508       93,133  
Gain on termination of lease     (9,059 )     (469 )
Deferred income taxes     43,932       (80,780 )
Stock-based compensation     32,280       91,712  
Changes in fair value of investments in marketable securities     1,781,664       234,082  
Changes in fair value of investment in warrants     51,621       678,887  
Gain on settlement of asset retirement obligations     (45,873 )     -  
Changes in assets and liabilities:                
Accounts receivable     (14,678 )     (523,110 )
Prepaid expenses     78,792       102,028  
Other assets     (13,759 )     (18,618 )
Accounts payable and accrued expenses     (219,830 )     295,799  
Accounts payable and accrued expenses - related party     (24,224 )     -  
Accrued payroll and other employee costs     (178,339 )     (149,603 )
Due to related parties     (702 )     (1,161 )
Operating lease liabilities     (84,948 )     (90,035 )
Income tax payables     (84,284 )     (2,387 )
Deferred revenue     (496,079 )     (300,011 )
Other liabilities     84,134       60,658  
Net cash flows used in operating activities     (2,000,791 )     (898,619 )
                 
Cash flows from investing activities:                
Net proceeds from sale of warrants     -       1,640,000  
Proceeds from sale of marketable securities     462,763       -  
Repayment of loan provided to related party     10,298       10,814  
Net cash flows provided by investing activities     473,061       1,650,814  
                 
Cash flows from financing activities:                
Payments for finance leases     (4,071 )     (4,474 )
Proceeds from short-term debt     134,689       68,138  
Repayment of short-term and long-term debts     (165,165 )     (207,486 )
Repayment of insurance premium financing     (28,559 )     (14,772 )
Net repayment of factoring arrangement     (45,341 )     (383,353 )
Capital contribution from non-controlling shareholder     -       67,195  
Proceeds from issuance of common shares     30,445       -  
Proceeds from collection of subscription receivable     103,942       -  
Proceeds from exercise of stock options     117,000       -  
Net cash flows provide 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  
               
Supplemental cash flow disclosures:                
Interest paid   $ 22,857     $ 37,098  
Income taxes paid   $ 93,586     $ 117,524  
                 
Non-cash investing and financing transactions                
Operating lease right-of-use assets obtained in exchange for operating lease liabilities   $ -     $ 125,735  
Insurance premium financing   $ 139,500     $ 172,689