HeartCore Enterprises, Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
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FY2025 · Filed Mar 31, 2026
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Item 1. Business
This Business section, along with other sections of this annual report on Form 10-K, includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data and we do not make any representation as to the accuracy of the information. Unless the context otherwise requires, references herein to “we,” “us” or the “Company” refer to HeartCore Enterprises, Inc. (“HeartCore USA”) and its consolidated subsidiaries, including HeartCore Financial, Inc. (“HeartCore Financial”) and its branch office in Japan, Higgs Field Co., Ltd. (“Higgs Field”), HeartCore Luvina Vietnam Company Limited (“HeartCore Luvina”), and Sigmaways, Inc. (“Sigmaways”) and its subsidiaries.
Overview
We were incorporated in the State of Delaware on May 18, 2021. In 2022, HeartCore USA started the GO IPO business, which supports Japanese companies listing on The Nasdaq Stock Market (“Nasdaq”) and the New York Stock Exchange (“NYSE”) in the United States. As of March 31, 2026, we have entered into consulting agreements with 16 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.
Prior to November 2025, we were also a software development company based in Tokyo, Japan. We provided software through two business units. The first business unit, our CX division, included a customer experience management business (the “CXM Platform”). The second business unit, our DX division, was a digital transformation business which provided customers with robotics process automation, process mining and task mining to accelerate the digital transformation of enterprises. In 2025, we made the strategic decision to sell our software business assets in Japan and to concentrate our efforts on our GO IPO consulting business. On October 31, 2025, the Company entered into a Purchase Agreement (the “HeartCore Japan Agreement”) with Smith Japan Holdings KK (“Smith Japan”), pursuant to which the Company agreed to sell to Smith Japan, and Smith Japan agreed to purchase (the “HeartCore Japan Sale”), all of the outstanding equity interests of HeartCore Co., Ltd., a then-wholly owned subsidiary of the Company (“HeartCore Japan”). The HeartCore Japan Sale closed on October 31, 2025.
Go IPO Consulting Services
Since February 2022, we have been offering “Go IPO” consulting services to a number of private Japanese companies where we assist such private Japanese companies and/or their affiliates with their initial public offerings (“IPOs”) in the United States as well as their simultaneous listings onto the Nasdaq Stock Market, the New York Stock Exchange or the NYSE American. More specifically, these consulting services (collectively, “Services”) include the following:
| ● | Assisting with introductions to law firms, underwriters and auditing firms, in order that clients can make their selections, at their sole discretion; |
| ● | Provision of process mining and task mining licenses for internal audit and internal control; |
| ● | Assisting in the preparation of documentation for internal controls required for an initial public offering and simultaneous listing on the Nasdaq Stock Market, the New York Stock Exchange or the NYSE American; |
| ● | Providing support services to remove problematic accounting accounts upon listing support; |
| ● | Translation of requested documents into English; |
| ● | Attend and, if requested by the other party, lead, meetings of management and employees; |
| ● | Provide support services related to the Nasdaq, the New York Stock Exchange or the NYSE American listing; |
| ● | Conversion of accounting data from Japanese standards to accounting principles generally accepted in the U.S. (“U.S. GAAP”); |
| ● | Assist in the preparation of S-1 or F-1 filings; |
| ● | Creation of English web page; and |
| ● | Preparing an investor presentation/deck and executive summary of the operations. |
In providing the Services, we do not provide investment advice regarding the value of securities, nor do we engage in the solicitation of investors or the negotiation of securities transactions. We do not provide accounting or legal advice, and we do not act as an investment advisor or broker-dealer.
Pursuant to the terms of the consulting agreements with the issuers, the parties agree that we will not provide the following services, among others: negotiation of the sale of the issuers’ securities; participation in discussions between the issuers and potential investors; assisting in structuring any transactions involving the sale of the issuers’ securities; pre-screening of potential investors; due diligence activities; and providing advice relating to valuation of or financial advisability of any investments in the issuers. Additionally, we do not take part in the selection of, or negotiation of terms with, law firms, underwriters or audit firms. Such selection and negotiation is the sole responsibility of the client.
Pursuant to the terms of the consulting agreements with the issuers, the issuers agree to compensate us as follows in return for the provision of Services during the initial term of the consulting agreements:
| (a) | A cash fee payable in installment payments; and |
| (b) | Issuance by issuers to us of warrants or stock acquisition rights to acquire a number of shares of capital stock of the issuer, to initially be equal to a designated percentage of the fully diluted share capital of the issuer, subject to adjustment as set forth in the warrants or stock acquisition rights. |
Sales and Marketing
Our sales and marketing strategy is focused on supporting growth-stage Japanese enterprises seeking access to U.S. capital markets through our Go IPO service offering. We specialize in providing end-to-end advisory and execution support to companies navigating the transition from Japanese domestic standards to the regulatory, financial reporting, and governance requirements applicable to U.S. public companies.
Unlike traditional software-driven sales models, our go-to-market approach is relationship-driven and highly targeted. We primarily source potential clients through our established network of strategic partners, including securities firms, legal advisors, accounting firms, and financial consultants, as well as through referrals from existing clients and industry participants. We also engage directly with prospective clients through industry seminars, educational workshops, and targeted outreach to companies that we believe are suitable candidates for U.S. listings.
Our sales process typically begins with an initial assessment of a prospective client’s readiness for a U.S. public listing, including an evaluation of financial reporting capabilities, internal controls, and corporate governance structures. Based on this assessment, we provide tailored advisory proposals that outline the scope of services required to achieve compliance with U.S. regulatory standards. Engagements are generally structured as long-term advisory relationships, reflecting the complexity and duration of the IPO preparation process.
We further expand our client base by cultivating long-term relationships with key stakeholders in the capital markets ecosystem. Our partnerships enable us to maintain a steady pipeline of potential clients and enhance our ability to deliver integrated solutions across legal, financial, and operational domains.
Our marketing efforts are focused on establishing thought leadership and building credibility within our target market. We conduct and participate in industry events, publish educational content related to U.S. capital markets and regulatory requirements, and leverage our professional network to increase awareness of our services. These efforts are designed to position us as a trusted partner for Japanese companies seeking cross-border capital market opportunities.
In addition, we support client retention and expansion through ongoing advisory services following initial engagements. As clients progress through their IPO journey and beyond, we provide continuous support in areas such as financial reporting, compliance, and investor relations, which may lead to additional service opportunities.
Competition
The market for providing consulting services to private Japanese companies seeking to list on United States securities exchanges is highly competitive and fragmented. We compete with a wide range of firms, from large global consultancies to specialized boutique firms and financial services providers.
Competitive Landscape
Our primary competitors generally fall into the following categories:
| ● | Global Consulting and Accounting Firms: Large multinational firms provide comprehensive IPO readiness, internal control conversion, and U.S. GAAP reconciliation services (from generally accepted accounting principles in Japan (“Japanese GAAP”). These firms possess significant brand recognition, vast global resources, and long-standing relationships with Japanese conglomerates. |
| ● | Specialized Financial Advisory and IR Firms: Various boutique firms in both Japan and the U.S. specialize in investor relations, “equity story” development, and English-language financial communications. |
| ● | Investment Banks and Underwriters: While we do not act as an underwriter or broker-dealer, the advisory arms of major investment banks often provide preliminary structuring and “readiness” advice to their clients as part of the underwriting relationship. |
Our Competitive Advantages
We believe our ability to compete effectively depends on several factors, including but not limited to, our specific expertise in the Japan-to-U.S. listing pipeline, our unique fee structure, and the quality of our bilingual execution. Our competitive strengths include:
| ● | Niche Specialization: Unlike broad-based consultancies, our Go IPO suite is specifically engineered for the unique regulatory and cultural hurdles Japanese issuers face when entering the U.S. markets (e.g., Japanese GAAP to U.S. GAAP conversion and SEC-compliant internal control documentation). |
| ● | Integrated Execution: By combining technical accounting support, process mining technology, English-language translation, and investor deck preparation into a single service suite, we offer a “one-stop” solution that reduces the administrative burden on the issuer’s management. |
| ● | Aligned Compensation Model: Our willingness to accept a portion of our compensation in the form of warrants aligns our long-term interests with the successful public debut and post-listing performance of our clients. |
| ● | Independence: Because we do not act as auditors, underwriters or legal counsel, we occupy an independent advisory role that allows us to assist clients with introductions to these third-party professionals without the conflicts of interest inherent in integrated financial institutions. We do not take part in the selection of, or negotiation of terms with, law firms, underwriters or audit firms. Such selection and negotiation is the sole responsibility of the client. |
Competitive Risks
Many of our current and potential competitors have significantly greater financial, technical, and marketing resources than we do. They may have longer operating histories, larger client bases, and more established relationships with U.S. exchanges and regulators. Increased competition could result in price reductions, reduced operating margins, or a loss of market share. To remain competitive, we must continue to enhance our service offerings and maintain our reputation for successfully navigating the complexities of the U.S. IPO process for Japanese issuers.
Recent Developments
Establishment of Higgs Field Co., Ltd.
In October 2025, the Company established Higgs Field Co., Ltd. as a new subsidiary in Japan as part of its strategic transition toward financial services-related business opportunities.
Higgs Field Co., Ltd. is currently engaged in providing consulting services related to digital securities, including self-offered corporate bonds and similar instruments. Over the longer term, the Company intends to expand this business by pursuing registration as a licensed securities firm in Japan, which would enable it to broaden the scope of its services, subject to obtaining the necessary regulatory approvals.
Sale of 51% Interest in Sigmaways, Inc.
In 2025, the Company made the strategic decision to sell its software business assets in Japan and to concentrate its efforts on the GO IPO consulting business. In connection therewith, in addition to the HeartCore Japan Sale, which closed on October 31, 2025, the Company is assessing all strategic alternatives to divest its 51% equity interest in Sigmaways, Inc. to a third party.
As of the date of this report, the Company has not entered into a definitive agreement with respect to a sale of its equity interest in Sigmaways. Accordingly, there can be no assurance that any transaction will be consummated. Any potential transaction remains subject to, among other things, the negotiation and execution of definitive agreements and the satisfaction of customary closing conditions.
Sale of HeartCore Japan
On October 31, 2025, the Company entered into the HeartCore Japan Agreement with Smith Japan in relation to the HeartCore Japan Sale. Pursuant to the terms of the HeartCore Japan Agreement, the purchase price of the HeartCore Japan Sale was ¥1,800,418,650 (equivalent to approximately $12 million, based on the October 31, 2025 Federal Reserve conversion rate of ¥154.10 = USD $1) (the “Purchase Price”), subject to adjustment as set forth in the HeartCore Japan Agreement, to be paid as follows:
| (a) | An amount of ¥1,013,340,000 less the amount of HeartCore Japan’s debts as set forth in the HeartCore Japan Agreement (the “Estimated Debt”) will be paid by the Smith Japan to the Company on the closing date (such final amount, the “Closing Payment”). |
| (b) | An amount of ¥126,133,200 (the “Holdback Amount”) will be retained by the Smith Japan from the Closing Payment, and, subject to the provisions of the HeartCore Japan Agreement, will be paid by Smith Japan to the Company on the first business day occurring the later of: (a) 180 days after the closing date, or (b) if applicable, the date the Net Tangible Assets (as defined in the HeartCore Japan Agreement) is finally determined pursuant to the terms of the HeartCore Japan Agreement (the “Holdback Release Date”). |
| (c) | An amount of ¥273,866,800 (the “Long Term Holdback Amount”) in respect of the agreements (“Multi-year Licensing Agreements”) concerning the licensing of HeartCore Japan’s “HeartCore CMS” product to a specified customer for a period of more than one year will be retained by Smith Japan from the Closing Payment and will be paid by Smith Japan as set forth in the HeartCore Japan Agreement. |
| (d) | Subject to the provisions of the HeartCore Japan Agreement, an amount of ¥387,078,650 (the “Deferred Consideration”), which shall consist of a principal amount of ¥322,700,000 with an uncompounded rate of interest of 6.65% per annum, will be retained by Smith Japan from the Closing Payment and will be paid by Smith Japan on October 31, 2028, the third annual anniversary of the closing date. |
| (e) | Within five business days following the final determination of the actual amount of HeartCore Japan’s debts as of the closing (the “Final Debt Amount”), Smith Japan shall pay to the Company an amount equal to (i) the Estimated Debt minus (ii) the Final Debt Amount. For the avoidance of doubt, if the Final Debt Amount is greater than the Estimated Debt, no payment shall be owed by Smith Japan. |
Pursuant to the terms of the HeartCore Japan Agreement, for a period of six months following the closing date, (i) the Company agreed to provide Smith Japan with certain accounting and reporting transition services, and (ii) Smith Japan agreed to provide the Company with certain human resources transition services.
The HeartCore Japan Agreement contains customary representations, warranties, conditions, covenants, and indemnification obligations for a transaction of this type.
The HeartCore Japan Sale closed on October 31, 2025.
One-Time Distribution to Stockholders
HeartCore USA and its Board of Directors deemed it in the best interests of HeartCore USA and its stockholders to authorize a one-time payment to its stockholders in the amount of $0.13 per share of common stock. For U.S. federal tax purposes, this payment to stockholders will be deemed to be a distribution. The record date for holders of HeartCore USA’s common stock to participate in the distribution was November 10, 2025, and the payment date was November 17, 2025.
Nasdaq Notice Regarding Minimum Bid Price Requirement
On May 6, 2025, we received written notice (the “Bid Price Notice”) from the Nasdaq Listing Qualification Department (the “Nasdaq Staff”) indicating that we were 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 our common stock on the Nasdaq Capital Market under the symbol “HTCR,” and we are currently monitoring the closing bid price of our common stock and evaluating our 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, we no longer meet this requirement. The Bid Price Notice indicated that we will be provided 180 calendar days, or until November 3, 2025, in which to regain compliance. If we failed to regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, but meet 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 provide written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then we may be granted an additional 180 calendar days to regain compliance with Rule 5550(a)(2).
On November 4, 2025, the Nasdaq Staff notified us of its determination that HeartCore USA is eligible for an additional 180-day period, or until May 1, 2026, to regain compliance with the Minimum Bid Price Requirement. If at any time during this additional time period the closing bid price of HeartCore USA’s security is at least $1 per share for a minimum of 10 consecutive business days, Nasdaq will close the matter.
If compliance cannot be timely demonstrated, the Nasdaq Staff will provide notify us that our common stock will be delisted. At that time, we may appeal the Nasdaq Staff’s determination to a Hearings Panel. There can be no assurance that we will be able to regain compliance with the Minimum Bid Price Requirement, even if we maintain compliance with the other listing requirements. We are considering actions that we may take in response to the Bid Price Notice in order to regain compliance with the continued listing requirements, including a reverse stock split, if necessary, but no decisions regarding a response have been made at this time.
Properties
Our corporate headquarters were previously operated through HeartCore Co., Ltd. On October 31, 2025, we disposed of HeartCore Co., Ltd. and, on the same date, established Higgs Field Co., Ltd. From November 1, 2025 through January 10, 2026, Higgs Field Co., Ltd. operated from office space within HeartCore Co., Ltd. On January 11, 2026, we relocated our office to 14F, Shibuya Sakura Stage Central Building, 1-2 Sakuragaoka-cho, Shibuya-ku, Tokyo, Japan, where we lease approximately 2,005 square feet of office space from an unaffiliated third party. This lease has a term from January 11, 2026 through January 10, 2028, with an expected renewal period of an additional two years. Terms of the office lease provide for a base rent payment of $23,268 per month and a share of sales taxes of $2,327 per month.
The Japan branch office of HeartCore Financial, Inc. is located at JP Tower 14F, 2-7-2 Marunouchi, Chiyoda-ku, Tokyo, Japan, where we lease office space from an unaffiliated third party. This lease has a term ending in March 2026. Terms of the office lease provide for a base rent payment of $935 per month and a share of sales taxes of $94 per month.
The office of HeartCore Luvina Vietnam Company Limited is located at Software Park Building, No. 2 Quang Trung, Hai Chau district, Da Nang City, Vietnam, where we lease approximately 915 square feet of office space from an unaffiliated third party with lease term ending in January 2026. Terms of the office lease provide for a quarterly base rent payment of $2,516.
Employees and Human Capital Management
We are passionate about building a company culture where people can do their best work. Our company culture and our people are not just human resources priorities but critical business priorities. As a result, we consistently focus on how we can continue to help employees grow, both personally and professionally.
Since 2009, we have expanded beyond our Japanese headquarters to several offices globally and have built a large remote community. Currently, we are operating primarily from our office in Japan. As of December 31, 2025, we had 44 full-time employees. None of our employees is represented by a union. We consider our relations with our employees to be good.
| ● | Culture and Values. Our culture is built on the firm belief that personal and professional growth is just as important as business growth. We believe the best people do not only fit our culture, they further it. |
| ● | Diversity, Inclusion, and Belonging. We have launched various initiatives to further our goal of being a more diverse, inclusive, and equitable workplace. We have a team dedicated to diversity, inclusion, and belonging initiatives, including but not limited to, hiring goals focused on increasing black, indigenous and people of color representation company-wide, anti-racism training for employees and managers, key external partnerships, and our annual diversity report. |
| ● | Compensation and Benefits. We provide competitive compensation and benefits for our employees globally. Our compensation packages may include base salary, commission or semi-annual bonuses, and stock-based compensation. We evaluate both compensation and benefit offerings on an annual basis to ensure competitiveness of both programs and we make adjustments as needed. |
Government Regulation
Investment Company Act of 1940
Our GO IPO business assists companies in navigating the IPO process in the U.S. markets. We assist companies in improving their internal systems, planning, and readiness to take their company through the IPO process. We also assist with introductions to third party professional advisors such as law firms, investment bankers, and auditors, in order that clients can make their selections, at their sole discretion. We do not provide investment advice regarding the value of securities, nor do we engage in the solicitation of investors or the negotiation of securities transactions. We do not provide accounting or legal advice. If state or federal regulatory agencies determined that we provided legal or investment advice in violation of existing law, there could be a material adverse effect on our business operations and stock value.
We are not an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”). The 1940 Act has restrictions that could make it impractical for us to continue our business as contemplated. Our GO IPO services are consulting services only, and we are not in the business of investing, reinvesting or trading in securities. An entity will generally be deemed an “investment company” under Section 3(a)(1) of the 1940 Act if: (a) it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or (b) absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We conduct our operations so that we will not be deemed an investment company.
If our activities were deemed to be those of an unregistered broker-dealer or investment adviser, we could face significant civil and criminal penalties and our consulting contracts could be rendered void.
Anti-Money Laundering (“AML”)
The Financial Crimes Enforcement Network (“FinCEN”) is a bureau of the U.S. Department of the Treasury that safeguards the financial system from illicit use, combats money laundering, and counters terrorism financing. Beginning January 1, 2026, new FinCEN rules have expanded AML compliance program requirements to a broader range of consultants and advisers. We maintain internal protocols designed to monitor for suspicious activity as part of our internal risk management practices.
Our operations in Japan are subject to complex and evolving regulatory requirements, and failure to comply with these regulations could have a material adverse effect on our business.
We operate, and intend to expand our operations, in Japan in areas that may be subject to regulation under various Japanese laws and regulations, including, but not limited to, the Financial Instruments and Exchange Act, the Foreign Exchange and Foreign Trade Act, and the Act on the Protection of Personal Information. These laws impose, or may impose, restrictions, licensing requirements, reporting obligations, and other compliance obligations on our current and planned business activities.
In particular, our current consulting services relating to digital securities and our planned expansion into financial services may require us to obtain registrations or licenses under the Financial Instruments and Exchange Act, including registration as a Type I Financial Instruments Business Operator. There can be no assurance that we will be able to obtain such licenses in a timely manner, or at all. If we are required to obtain such licenses and fail to do so, we may be subject to administrative penalties, business restrictions, or other enforcement actions, which could materially and adversely affect our business.
In addition, our cross-border activities and transactions may be subject to regulations under the Foreign Exchange and Foreign Trade Act, including notification or approval requirements. Failure to comply with such requirements could result in penalties or restrictions on our operations.
We also collect and process certain personal information in the course of our operations, and are therefore subject to data protection and privacy regulations in Japan, including the Act on the Protection of Personal Information. Any failure to comply with applicable data protection laws or to adequately safeguard personal information could result in legal liability, regulatory penalties, and reputational harm.
Furthermore, applicable laws and regulations in Japan are subject to change, and regulatory authorities may introduce new interpretations or enforcement practices. As a result, we may be required to modify our business practices, incur additional compliance costs, or obtain additional approvals, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Legal Proceedings
From time to time, we are involved in various legal proceedings arising from the normal course of business activities. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.