HeartCore Enterprises, Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
HTCR$1.51-11.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-18.
0001493152-25-023997
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001493152-26-023382
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 130 previous paragraphs and 74 current paragraphs.
24 unchanged; 21 reworded; 28 added; 71 removed; 14 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
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. and its branch office in Japan, Higgs Field Co., Ltd., HeartCore Luvina Vietnam Company Limited (“HeartCore Luvina”), and Sigmaways, Inc. (“Sigmaways”) and its subsidiaries.
Current report
Go IPO Consulting Services
Current report
Since February 2022, we have been offering Go IPO consulting services, which include the following (collectively, the “Services”):
Current report
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.
Current report
Pursuant to the terms of the consulting agreements with our clients, 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.
Current report
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:
Current report
Share Repurchase Program
Current report
During the first quarter of 2026, the Company’s Board of Directors (the “Board”) authorized a share repurchase program, pursuant to which the Company may repurchase up to $2.0 million of its outstanding shares of common stock. The Board authorized the Company to purchase its common stock from time to time on a discretionary basis through open market purchases, privately negotiated transactions or other means, including trading plans intended to qualify under Rule 10b5-1 of the Exchange Act, in accordance with applicable federal securities laws and other applicable legal requirements. The Company expects to fund these repurchases through existing cash balances. Decisions regarding the amount and the timing of purchases under the program will be influenced by the Company’s cash on hand, cash flows from operations, general market conditions and other factors, and the program may be modified, suspended or discontinued at any time. The Company is not obligated to acquire any particular amount of its common stock. This program has no set termination date.
Current report
Bylaws Amendment
Current report
On March 24, 2026, the Board adopted an amendment (the “Amendment”) to the Company’s bylaws (the “Bylaws”).
Current report
Prior to adoption of the Amendment, the second sentence of Section 7.4 of the Bylaws provided that “[i]f any action is brought by any party against another party, relating to or arising out of [the] Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action”, and Section 7.5 of the Bylaws provided (and continues to provide following adoption of the Amendment) that “[a]ll powers, duties and responsibilities provided for in [the] Bylaws, whether or not explicitly so qualified, are qualified by the provisions of the [Company’s certificate of incorporation] and applicable law.”
Current report
The Amendment had the effect of amending and restating the second sentence of Section 7.4 of the Bylaws to read as follows: “If any action is brought by any party against another party, relating to or arising out of these Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action, provided that the provisions of this sentence shall not apply with respect to “internal corporate claims” as defined in Section 115 of the DGCL or in connection with any other claim that a stockholder, acting in its capacity as a stockholder or in the right of the Corporation, has brought in an action, suit or proceeding.”
Current report
The Amendment was intended to clarify that, consistent with Section 7.5 of the Bylaws and the provisions of the Delaware General Corporation Law, including Section 109(b) thereof, the Bylaws do not contain any provision that would impose liability on a stockholder for the attorneys’ fees or expenses of the Company or any other party in connection with an internal corporate claim, or in connection with any other claim that a stockholder, acting in its capacity as a stockholder or in the right of the Company, has brought in an action, suit or proceeding.
Current report
Reverse Stock Split
Current report
As previously disclosed, on June 30, 2025, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation, as amended (the “Certificate of Incorporation”), to effectuate a reverse stock split of the Company’s outstanding shares of common stock, at a ratio of no less than 1-for-2 and no more than 1-for-30, with such ratio to be determined at the sole discretion of the Board. On March 4, 2026, the Board approved a 1-for-20 reverse stock split of the Company’s issued and outstanding common stock (the “Reverse Split”). Subsequently, the Company filed a certificate of amendment (the “Certificate of Amendment”) to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effectuate the Reverse Split. The Certificate of Amendment was effective for state law purposes at 4:00 p.m. Eastern Time on April 2, 2026 (the “Effective Time”), after the close of trading on the Nasdaq Capital Market (“Nasdaq”), such that the Company’s common stock began trading on Nasdaq at market open on April 6, 2026, on a post-Reverse Split basis.
Current report
As of the Effective Time, issued and outstanding shares of the Company’s common stock were automatically reclassified such that each 20 shares of pre-Reverse Split common stock became one share of common stock, with any fractional shares of common stock resulting being rounded up to the nearest whole share of common stock. The authorized number of shares, and par value per share, of the Company’s common stock were not affected by the Reverse Split.
Current report
Compliance with Nasdaq Minimum Bid Price Requirement
Current report
As previously disclosed, on May 6, 2025, the Company received written notice (the “Bid Price Notice”) from the Nasdaq Staff indicating that the Company was not in compliance with the Minimum Bid Price Requirement. The notification of noncompliance had no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Capital Market. The Bid Price Notice indicated that the Company was provided 180 calendar days, or until November 3, 2025, in which to regain compliance. On November 4, 2025, the Nasdaq Staff notified the Company of its determination that the Company was eligible for an additional 180-day period, or until May 1, 2026, to regain compliance with the Minimum Bid Price Requirement.
Current report
On April 20, 2026, the Company received written notice from the Nasdaq Staff that the Company has regained compliance with the Minimum Bid Price Requirement and the matter has now been closed. Accordingly, the Company’s common stock continues to be listed and traded on the Nasdaq Capital Market.
Current report
Our revenues decreased by $847,569, or 40.5%, to $1,245,844 for the three months ended March 31, 2026 from $2,093,413 for the three months ended March 31, 2025, mainly attributable to a decreased revenue of $827,435 from customized software development and services in connection with the intense competition in the U.S. software market.
Current report
Our gross profit decreased by $469,729, or 86.4%, to $74,045 for the three months ended March 31, 2026 from $543,774 for the three months ended March 31, 2025, mainly attributable to (i) a decrease of $298,720 in gross profit from our Go IPO consulting services, as we as spent more efforts and resources and incurred more outsourcing fees for Go IPO consulting services to enhance our Go IPO consulting customers experience with us, resulted in lower gross profit for our Go IPO consulting services; (ii) a decrease of $287,821 in customized software development and services in light of the decrease in customized software development and services revenues and the increase in respective cost in connection with the increasing subcontracting fees for outsourced software engineers due to the salary level increase in the overall software market; and offset by (iii) an increase of $116,812 in software development and other services provided by HeartCore Luvina due to the increase in software development and other services revenues and decrease in respective cost due to the cost control policy we implemented.
Current report
Our general and administrative expenses were $1,571,734 and $1,581,205 for the three months ended March 31, 2026 and 2025, respectively, and remained stable across periods with minor decrease.
Current report
Our income tax expense were minimal, which were $17,496 and $39,608 for the three months ended March 31, 2026 and 2025, respectively, as we incurred pre-tax loss positions across periods.
Current report
As a result of the foregoing, we reported a net loss attributable to HeartCore Enterprises, Inc. common shareholders of $1,899,675 for the three months ended March 31, 2026, representing a $1,187,317, or 38.5%, decrease from a net loss attributable to HeartCore Enterprises, Inc. common shareholders of $3,086,992 for the three months ended March 31, 2025.
Current report
As of March 31, 2026, our working capital was $1,010,549. In assessing our liquidity, management monitors and analyzes our cash, our ability to generate sufficient revenues in the future, and our operating and capital expenditure commitments.
Current report
Cash Flows from Investing Activities of Continuing Operations
Current report
Net cash flows used in investing activities of continuing operations amounted to $954 for the three months ended March 31, 2026, for purchase of property and equipment.
Current report
The Company has entered into operating leases for office space. As of March 31, 2026, the future maturity of lease liabilities is as follows:
Removed paragraphs (71)
Previous report
We have also been 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.
Previous report
In January 2023, we formed HeartCore Financial, Inc. (“HeartCore Financial”), a wholly owned subsidiary of HeartCore USA, in the U.S. as part of our GO IPO consulting business. In November 2023, we formed HeartCore Luvina Vietnam Company (“HeartCore Luvina”), a 51% owned subsidiary, in Vietnam, which is engaged in the business of software development and other services. HeartCore Luvina started operations in February 2024. In October 2025, HeartCore Japan transferred 51% of the outstanding shares of HeartCore Luvina to HeartCore USA.
Previous report
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 consulting services.
Previous report
In October 2025, HeartCore USA incorporated a wholly-owned subsidiary, Higgs Field Co., Ltd. (“Higgs Field”), in Japan. Higgs Field is engaged in the business of providing business and management consulting services.
Previous report
Sale of HeartCore Japan
Previous report
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 is ¥1,800,418,650 (equivalent to approximately $12 million, based on the October 31, 2025 Federal Reserve conversion rate of ¥154.05 = USD $1) (the “Purchase Price”), subject to adjustment as set forth in the HeartCore Japan Agreement, to be paid as follows:
Previous report
Pursuant to the terms of the HeartCore Japan Agreement, for a period of six months following the closing date (October 31, 2025), (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.
Previous report
The HeartCore Japan Agreement contains customary representations, warranties, conditions, covenants, and indemnification obligations for a transaction of this type.
Previous report
One-Time Distribution to Stockholders
Previous report
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 is November 10, 2025, and the payment date is November 17, 2025.
Previous report
Nasdaq Notice Regarding Minimum Bid Price Requirement
Previous report
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.
Previous report
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).
Previous report
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.
Previous report
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.
Previous report
For the three months ended September 30, 2025 and 2024, we generated revenues of $2,990,329 and $16,240,865, respectively, and reported a net loss from continuing operations of $137,122 and a net income from continuing operations of $11,119,592, respectively.
Previous report
Our total revenues decreased by $13,250,536, or 81.6%, to $2,990,329 for the three months ended September 30, 2025, from $16,240,865 for the three months ended September 30, 2024, primarily attributable to (i) a decreased revenue of $12,641,365 from GO IPO consulting services as only one IPO consulting customer completed IPO in the third quarter 2025 compared with two customers completed IPO in the third quarter 2024 and we generated significant noncash consideration revenue from one large IPO deal in third quarter 2024; and (ii) a decreased revenue of $505,168 from customized software development and services in connection with the intense competition of the software market in the U.S.
Previous report
Our total gross profit decreased by $12,541,707, or 89.5%, to $1,468,409 for the three months ended September 30, 2025, from $14,010,116 for the three months ended September 30, 2024, mainly attributable to (i) a decrease of $12,589,606 in gross profit from GO IPO consulting services, as we generated a significant noncash consideration of from one large IPO deal in the prior period and the significant decrease in noncash consideration revenue caused the decrease in gross profit as we did not incur cost when revenue recognized from noncash consideration as cost incurred throughout the consulting service period before IPO completion; offset by (ii) an increase of $104,962 in gross profit from customized software development and services, as Sigmaways reduced outsourcing costs by ending cooperation with costly vendors to save operating cash flows in the current quarter, resulting in costs decreased more than revenue did.
Previous report
As a percentage of revenues, our selling expenses accounted for 3.2% and 1.0% of our total revenues for the three months ended September 30, 2025 and 2024, respectively.
Previous report
Our general and administrative expenses decreased by $58,176, or 4.0%, to $1,384,838 for the three months ended September 30, 2025 from $1,443,014 in the three months ended September 30, 2024, primarily attributable to (i) a decrease of $168,711 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; (ii) a decrease of $70,983 in salaries and welfare expenses, mainly resulting from Sigmaways cut down salary expense and recruiting expenses to save operating cash flow in the current period; offset by an increase of $206,002 in consultant and professional service fees, mainly because as we incurred legal service fee in relation to the registration statement for the registration of Series A convertible preferred shares in the third quarter of 2025, and there was no such activity in the third quarter of 2024.
Previous report
As a percentage of revenues, general and administrative expenses were 46.3% and 8.9% of our revenues for the three months ended September 30, 2025 and 2024, respectively.
Previous report
Research and Development Expenses
Previous report
Our research and development expenses decreased by $63,709, or 100.0%, to nil in the three months ended September 30, 2025, from $63,709 in the three months ended September 30, 2024, primarily attributable to a decrease of $63,000 in outsourcing expenses as we cut down outsourcing research and development expenses for cash flows saving purpose in the current period.
Previous report
As a percentage of revenues, research and development expenses were 0.0% and 0.4% of our revenues for the three months ended September 30, 2025 and 2024, respectively.
Previous report
Income Tax Expenses
Previous report
Income tax expense was $3,373 for the three months ended September 30, 2025, representing a decrease of $186,352, or 98.2%, from income tax expense of $189,725 in the three months ended September 30, 2024, mainly because we recognized income tax expense due to the large pre-tax income position generated for the three months ended September 30, 2024, while we incurred pre-tax loss position in current quarter.
Previous report
Net Income (Loss) from Continuing Operations
Previous report
As a result of the foregoing, we reported a net loss from continuing operations of $137,122 for the three months ended September 30, 2025, representing a $11,256,714, or 101.2%, decrease from a net income from continuing operations of $11,119,592 for the three months ended September 30, 2024.
Previous report
Net Income
Previous report
As a result of the foregoing, we reported a net income of $351,175 for the three months ended September 30, 2025, representing a $10,465,755, or 96.8%, decrease from a net income of $10,816,930 for the three months ended September 30, 2024.
Previous report
Net Income Attributable to HeartCore Enterprises, Inc.
Previous report
As a result of the foregoing, we reported a net income attributable to HeartCore Enterprises, Inc. of $434,072 for the three months ended September 30, 2025, representing a $10,623,734, or 96.1%, decrease from a net income attributable to HeartCore Enterprises, Inc. of $11,057,806 for the three months ended September 30, 2024.
Previous report
Net Income Attributable to HeartCore Enterprises, Inc. Common Shareholders
Previous report
As a result of the foregoing, we reported a net income attributable to HeartCore Enterprises, Inc. common shareholders of $377,850 for the three months ended September 30, 2025, representing a $10,679,956, or 96.6%, decrease from a net income attributable to HeartCore Enterprises, Inc. common shareholders of $11,057,806 for the three months ended September 30, 2024.
Previous report
Revenues
Previous report
Our total revenues decreased by $14,218,092, or 66.8%, to $7,052,799 for the nine months ended September 30, 2025, from $21,270,891 for the nine months ended September 30, 2024, primarily attributable to (i) a decreased revenue of $12,944,124 from GO IPO consulting services mainly due to we generated significant revenue from noncash consideration of $12,641,365 from one large IPO deal in the prior period, and there was no such large amount of revenue recognized from noncash consideration in the same period in 2025; and (ii) a decreased revenue of $1,182,259 from customized software development and services in connection with a slowdown in revenue of Sigmaways, driven by intense competition in the U.S. software market.
Previous report
Cost of Revenues
Previous report
Our total cost of revenues decreased by $1,755,150, or 28.3%, to $4,453,735 for the nine months ended September 30, 2025, from $6,208,885 for the nine months ended September 30, 2024, mainly attributable to (i) the decrease of $1,564,757 in the cost of customized software development and services, which was in light of the decrease in sales and the decrease was also attributable to Sigmaways cut down its subcontracting cost in the current period by ending cooperation with certain costly vendors for cost saving purpose; and (ii) a decrease of $117,810 in the cost of software development services in light of the decrease of sale.
Previous report
Gross Profit
Previous report
Our total gross profit decreased by $12,462,942, or 82.7%, to $2,599,064 for the nine months ended September 30, 2025, from $15,062,006 for the nine months ended September 30, 2024, mainly attributable to (i) a decrease of $12,871,541 in gross profit from GO IPO consulting services, as we generated a significant noncash consideration of from one large IPO deal in the prior period and the significant decrease in noncash consideration revenue caused the decrease in gross profit as we did not incur cost when revenue recognized from noncash consideration as cost incurred throughout the consulting service period before IPO completion; offset by (ii) an increase of $382,498 in gross profit from customized software development and services, as Sigmaways reduced outsourcing costs by ending cooperation with costly vendors in the current period, resulting in costs decreased more than revenue did.
Showing the first 40 of 71 passages. Open the source sections for the rest.
Reworded paragraphs (21)
Previous wording
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.
Current wording
The Private Securities Litigation Reform Act of 1995, 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 Quarterly Report on Form 10-Q 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, 2025, 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.
Previous wording
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.
Current wording
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 Quarterly Report on Form 10-Q 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.
Previous wording
In 2022, HeartCore Enterprises, Inc. (“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 September 30, 2025, 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.
Current wording
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.
Previous wording
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.
Current wording
Prior to November 2025, we were also a leading 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.
Previous wording
For the nine months ended September 30, 2025 and 2024, we generated revenues of $7,052,799 and $21,270,891, respectively, reported a net loss from continuing operations of $2,913,181 and a net income from continuing operations of $6,705,342, respectively, and had cash flows used in operating activities of continuing operations $2,980,958 and $3,027,115, respectively. As noted in our unaudited consolidated financial statements, as of September 30, 2025, we had an accumulated deficit of $17,797,861.
Current wording
For the three months ended March 31, 2026 and 2025, we generated revenues of $1,245,844 and $2,093,413, respectively, and reported a net loss from continuing operations of $1,976,715 and $3,070,031, respectively, and had net cash flows used in operating activities of continuing operations of $1,153,590 and $1,691,459, respectively. As noted in our unaudited consolidated financial statements, as of March 31, 2026, we had an accumulated deficit of $15,627,241.
Previous wording
The following table summarizes our operating results as reflected in our unaudited statements of operations for the three months ended September 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.
Current wording
The following table summarizes our operating results as reflected in our unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.
Previous wording
Our total cost of revenues decreased by $708,829, or 31.8%, to $1,521,920 for the three months ended September 30, 2025, from $2,230,749 for the three months ended September 30, 2024, mainly attributable to the decrease of $610,130 in the cost of customized software development and services, which was in light of the decrease in sales and the decrease was also attributable to Sigmaways cut down its subcontracting cost in the current period by ending cooperation with certain costly vendors for cost saving purpose.
Current wording
Our cost of revenues decreased by $377,840, or 24.4%, to $1,171,799 for the three months ended March 31, 2026 from $1,549,639 for the three months ended March 31, 2025, mainly attributable to a decrease of $539,614 in the cost of customized software development and services, which was in light of the decrease in sales of respective revenues.
Previous wording
For the reasons discussed above, our overall gross profit margin decreased by 37.1%, to 49.1%, for the three months ended September 30, 2025 from 86.2% for the three months ended September 30, 2024.
Current wording
For the reasons discussed above, our overall gross profit margin decreased by 20.1% to 5.9% for the three months ended March 31, 2026 from 26.0% for the three months ended March 31, 2025.
Previous wording
Our selling expenses decreased by $67,654, or 41.7%, to $94,718 for the three months ended September 30, 2025 from $162,372 in the three months ended September 30, 2024, primarily attributable to a decrease of $42,557 in advertising expenses as we reduced certain marketing activities and cancelled promotion campaigns with lower advertising performance.
Current wording
Our selling expenses decreased by $110,110, or 72.0%, to $42,812 for the three months ended March 31, 2026 from $152,922 for the three months ended March 31, 2025, primarily attributable to a decrease of $95,668 in advertising and referral expenses, as we reduced certain marketing and referral activities and cancelled promotion campaigns with lower advertising performance.
Previous wording
Our other income (expenses) include changes in fair value of investments in marketable securities, changes in fair value of investments in warrants, loss on sale of warrants, changes in fair value of derivative liability, interest income generated from bank deposits, interest expenses for bank loans, other income and other expenses. Total other expenses, net, of $1,031,704 for the three months ended September 30, 2024 decreased by $909,102, or 88.1%, to total other expenses, net, of $122,602 for the three months ended September 30, 2025, primarily attributable to (i) a decrease of $3,970,628 in loss on sale of warrants as we sold partial of warrants received in the third quarter of 2024, and there was no such activity in the third quarter of 2025; offset by a decrease of $3,016,176 in changes in fair value of investments in warrants due to fair value measurement.
Current wording
Our other income (expenses) includes changes in fair value of investments in marketable securities, changes in fair value of investment in warrants, changes in fair value of derivative liability, interest income generated from bank deposits, interest expenses for loans, other income, and other expenses. Total other expenses, net decreased by $1,421,325, or 77.2%, to $418,745 for the three months ended March 31, 2026, from total other expenses, net of $1,840,070 for the three months ended March 31, 2025, primarily attributable to a decrease of $1,485,667 in changes of fair value of investments in marketable securities due to fair value measurement across periods.
Previous wording
Income (Loss) from Discontinued Operations, Net of Income Tax
Current wording
Loss from Discontinued Operations, Net of Income Tax
Previous wording
On July 24, 2025, the Board of Directors of the Company approved to enter into a non-binding letter of intent to sell 100% of the outstanding shares of HeartCore Japan. The results of operations of HeartCore Japan are reported as discontinued operations for all periods presented as the sale of HeartCore Japan represents a strategic shift that has or will have a major impact on its operations and financial results. The sale transaction was closed on October 31, 2025. We reported an income from discontinued operations, net of income tax of $488,297 for the three months ended September 30, 2025, representing a $790,959, or 261.3%, increase from a loss from discontinued operations, net of income tax of $302,662 for the three months ended September 30, 2024.
Current wording
On July 24, 2025, the Board of Directors of the Company approved to enter into a non-binding letter of intent to sell 100% of the outstanding shares of HeartCore Co., Ltd. On October 31, 2025, the Company entered into the HeartCore Japan Agreement with Smith Japan in relation to the sale of HeartCore Co., Ltd. The results of operations of HeartCore Co., Ltd. are reported as discontinued operations for all periods presented, as the sale of HeartCore Co., Ltd. represents a strategic shift that has a major impact on the Company’s operations and financial results. The HeartCore Co., Ltd. sale closed on October 31, 2025. We reported a loss from discontinued operations, net of income tax of $67,350 for the three months ended March 31, 2025.
Previous wording
During the three months ended September 30, 2025 and 2024, we owned a 51% equity interest of Sigmaways and its subsidiaries and 51% equity interest of HeartCore Luvina. Accordingly, we recorded net loss attributable to non-controlling interests of $82,897 and $240,876 in the three months ended September 30, 2025 and 2024, respectively.
Current wording
We owned a 51% equity interest of Sigmaways and its subsidiaries and a 51% equity interest of HeartCore Luvina. Accordingly, we recorded net loss attributable to non-controlling interests of $105,008 and $50,389 for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
On June 30, 2025, we issued 2,000 shares of Series A convertible preferred shares, which were granted a cumulative dividend of 10% per annum. Accordingly, we recorded dividends accrued on Series A convertible preferred shares of $56,222 during the three months ended September 30, 2025.
Current wording
On June 30, 2025, we issued 2,000 shares of Series A convertible preferred shares, which were granted a cumulative dividend of 10% per annum. Accordingly, we recorded dividends accrued on Series A convertible preferred shares of $27,968 and nil for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
As of September 30, 2025, we had $1,451,019 in cash and cash equivalents, as compared to $1,973,810 as of December 31, 2024. We also had $1,107,187 in accounts receivable as of September 30, 2025. Our accounts receivable primarily include the balance due from customers for our customized software development and services accepted by customers.
Current wording
As of March 31, 2026, we had $774,033 in cash and cash equivalents, as compared to $1,985,962 as of December 31, 2025. We also had $572,547 in accounts receivable as of March 31, 2026. Our accounts receivable primarily include the balance due from customers for our customized software development and services accepted by customers.
Previous wording
The following table sets forth summary of our cash flows for the periods indicated:
Current wording
The following table sets forth a summary of our cash flows for the periods indicated:
Previous wording
Cash Flows from Operating Activitiesof Continuing Operations******
Current wording
Cash Flows from Operating Activities of Continuing Operations
Previous wording
Net cash flows used in operating activities of continuing operations was $2,980,958 for the nine months ended September 30, 2025, primarily consisting of the following:
Current wording
Net cash flows used in operating activities of continuing operations was $1,153,590 for the three months ended March 31, 2026, primarily consisting of the following:
Previous wording
Net cash flows used in financing activities of continuing operations amounted to $1,168,769 for the nine months ended September 30, 2024, primarily attributable to the dividend distribution of $834,566, and net repayment of $257,295 for factoring arrangement.
Current wording
Net cash flows used in financing activities of continuing operations amounted to $53,513 for the three months ended March 31, 2026, primarily consisting of $23,657 for repayment of insurance premium financing, $12,382 for repayment of long-term debts, and $11,474 for net repayment of factoring arrangement.
Previous wording
The Company’s debts included long-term debts borrowed from a bank and a financial institution.
Current wording
The Company’s debts included long-term debts borrowed from a bank and a financial institution. As of March 31, 2026, future minimum principal payments for long-term debts were as follows:
Previous wording
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. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies reflect the more significant judgments and estimates used in preparation of our consolidated financial statements.
Current wording
Our discussion and analysis of our financial condition and results of operations are based upon our unaudited consolidated financial statements. These unaudited consolidated 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, 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net Loss Attributable to HeartCore Enterprises, Inc. Common Shareholders
Rearranged previous paragraphs (14)
Previous report — wording carried elsewhere
We made the strategic decision to sell our software business assets in Japan and to concentrate our efforts on our GO IPO consulting business.
Previous report — wording carried elsewhere
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 wholly owned subsidiary of the Company (“HeartCore Japan”). See “Recent Events” below.
Previous report — wording carried elsewhere
The Company has made the strategic decision to sell its software business assets in Japan and to concentrate its efforts on its GO IPO consulting business.
Previous report — wording carried elsewhere
The HeartCore Japan Sale closed on October 31, 2025.
Previous report — wording carried elsewhere
Comparison of Results of Operations for the Nine Months Ended September 30, 2025 and 2024
Previous report — wording carried elsewhere
The following table summarizes our operating results as reflected in our unaudited statements of operations for the nine months ended September 30, 2025 and 2024, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.
Previous report — wording carried elsewhere
For the reasons discussed above, our overall gross profit margin decreased by 33.9%, to 36.9%, for the nine months ended September 30, 2025, from 70.8% for the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
On July 24, 2025, the Board of Directors of the Company approved to enter into a non-binding letter of intent to sell 100% of the outstanding shares of HeartCore Japan. The results of operations of HeartCore Japan are reported as discontinued operations for all periods presented as the sale of HeartCore Japan represents a strategic shift that has or will have a major impact on its operations and financial results. The sale transaction was closed on October 31, 2025. We reported an income from discontinued operations, net of income tax of $1,188,481 for the nine months ended September 30, 2025, representing a $766,013, or 181.3%, increase from an income from discontinued operations, net of income tax of $422,468 for the nine months ended September 30, 2024.
Previous report — wording carried elsewhere
Net Loss Attributable to Non-controlling Interests
Previous report — wording carried elsewhere
During the nine months ended September 30, 2025 and 2024, we owned a 51% equity interest of Sigmaways and its subsidiaries and 51% equity interest of HeartCore Luvina. Accordingly, we recorded net loss attributable to non-controlling interests of $171,682 and $645,546 in the nine months ended September 30, 2025 and 2024, respectively.
Previous report — wording carried elsewhere
Dividends Accrued on Series A Convertible Preferred Shares
Previous report — wording carried elsewhere
On June 30, 2025, we issued 2,000 shares of Series A convertible preferred shares, which were granted a cumulative dividend of 10% per annum. Accordingly, we recorded dividends accrued on Series A convertible preferred shares of $56,833 in the current period.
Previous report — wording carried elsewhere
Net cash flows used in operating activities of continuing operations was $3,027,115 for the nine months ended September 30, 2024, primarily consisting of the following:
Previous report — wording carried elsewhere
As of September 30, 2025, future minimum principal payments for long-term debts are as follows: