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Under US GAAP (ASC 205-20), the Company must reclassify the disposed subsidiary, HeartCore Co., Ltd., as discontinued operations. This removes its results from continuing operations in the financial statements.
NEW YORK and TOKYO, Nov. 18, 2025 (GLOBE NEWSWIRE) -- HeartCore Enterprises, Inc. (Nasdaq: HTCR) (“HeartCore” or the “Company”), an IPO consulting services company based in Tokyo, reported financial results for the third quarter and nine months ended September 30, 2025.
Third Quarter 2025 and Recent Operational & Financial Highlights
Management Commentary
“This past month, we made the strategic and transformative decision to divest our software business subsidiary, HeartCore Japan, in an all-cash transaction, effectively making a full pivot into our Go IPO business,” said Company CEO Sumitaka Kanno. “We believe this move positions HeartCore for long-term, sustainable success by sharpening our focus on a more profitable business in Go IPO. In parallel with this transaction, we also implemented meaningful expense reductions that will help lower operating costs going forward. A portion of the divestiture proceeds was used towards the one-time distribution payment, which was paid out yesterday. We are also continuing to assess all strategic alternatives to divest our subsidiary, Sigmaways. We believe this move will support our bottom-line performance going forward and further accelerate our shift towards the IPO consulting space.
“In recent months, we signed our 16th Go IPO client, saw one client successfully begin trading, and anticipate another will commence trading soon. Additionally, following our Go IPO Korea seminar, we have been in discussion with several prospective Korean clients which we hope to materialize in the near future. Demand from Japan also remains strong, and we believe we are on the precipice of engaging additional potential clients in the next few months. This full transition into our Go IPO business now allows us to dedicate more time and resources to its growth, and with a strong pipeline, we look forward to continued expansion of our IPO consulting business in Japan and Korea.”
Third Quarter 2025 Financial Results
Revenues were $3.0 million, compared to $16.2 million in the same period last year. The decrease was primarily due to the signature warrant revenue of $13 million from one large GO IPO deal in the prior period, and no comparable revenue in the current period.
Gross profit was $1.5 million, compared to $14.0 million in the same period last year. The decrease was primarily due to the decrease in the gross profit from GO IPO services.
Operating expenses decreased to $1.5 million, compared to $1.7 million in the same period last year. The decrease was primarily cut down of various operating expenses to save cash flows.
Net income was $0.4 million compared to a net income of $10.8 million in the same period last year.
Adjusted EBITDA was $0.5 million, compared to $12.0 million in the same period last year.
As of September 30, 2025, the Company had cash and cash equivalents of $1.5 million, compared to $2.0 million on December 31, 2024. On a pro forma basis, as of November 18, 2025, the Company has approximately $2.5 million of cash and cash equivalents, after the one-time payment to stockholders.
Nine Months 2025 Financial Results
Revenues were $7.1 million, compared to $21.3 million in the same period last year. The decrease was primarily due to the signature warrant revenue of $13M from one large GO IPO deal in the prior period, and no comparable revenue in the current period.
Gross profit was $2.6 million, compared to $15.1 million in the same period last year. The decrease was primarily due to the decrease in the gross profit from GO IPO services.
Operating expenses decreased to $4.5 million, compared to $5.5 million in the same period last year. The decrease was primarily due to a decrease in general and administrative, selling, and research and development expenses.
Net loss was $1.7 million compared to a net income of $7.1 million in the same period last year.
Adjusted EBITDA was $(0.6) million, compared to $10.4 million in the same period last year.
About HeartCore Enterprises, Inc.
HeartCore is a Tokyo-based IPO consulting services company, guiding Japanese growth companies to achieve successful U.S. exchange listings through its flagship service, Go IPO. HeartCore’s Go IPOSM consulting services provide comprehensive consultation support, including pre-IPO consulting, regulatory guidance, financial preparation, and operational readiness to help businesses navigate the complexities of a successful U.S. listing. HeartCore’s goal is to streamline the entire process for Japanese companies to provide a seamless transition into the U.S. public markets. For more details, visit https://heartcore-enterprises.com/.
Non-GAAP Financial Measures
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, changes in fair value of investments in marketable securities, changes in fair value of investment in warrants, interest income, and interest expenses.
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 accounting principles generally accepted in the U.S. (“GAAP”).
Management believes that 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.
| For the three months ended September 30, | ||
| Item | 2025 | 2024 |
| Net income | $0.4 million | $10.8 million |
| (+) Depreciation and amortization expense | $0.0 million | $0.2 million |
| (+) Changes in fair value of investments in marketable securities | $0.0 million | -$0.1 million |
| (+) Changes in fair value of investment in warrants | $0.1 million | -$2.9 million |
| (+) Loss on sale of warrants | $0.0 million | $4.0 million |
| (+) Changes in fair value of derivative liability | $0.0 million | $0.0 million |
| (‐) Interest income | $0.0 million | $0.0 million |
| (+) Interest expenses | $0.0 million | $0.0 million |
| Adjusted EBITDA | $0.5 million | $12.0 million |
| For the nine months ended September 30, | ||
| Item | 2025 | 2024 |
| Net income | -$1.7 million | $7.1 million |
| (+) Depreciation and amortization expense | $0.0 million | $0.5 million |
| (+) Changes in fair value of investments in marketable securities | $0.9 million | $0.3 million |
| (+) Changes in fair value of investment in warrants | $0.1 million | -$1.6 million |
| (+) Loss on sale of warrants | $0.0 million | $4.0 million |
| (+) Changes in fair value of derivative liability | $0.0 million | $0.0 million |
| (‐) Interest income | $0.0 million | $0.0 million |
| (+) Interest expenses | $0.1 million | $0.1 million |
| Adjusted EBITDA | -$0.6 million | $10.4 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.
John Yi and Steven Shinmachi
[email protected]
(949) 574-3860
| HeartCore Enterprises, Inc. | ||||||
| Consolidated Balance Sheets | ||||||
| September 30, | December 31, | |||||
| 2025 | 2024 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 1,451,019 | $ | 1,973,810 | ||
| Accounts receivable | 1,107,187 | 1,030,243 | ||||
| Investments in marketable securities | 2,903,815 | 4,495,703 | ||||
| Investment in warrants | 598,380 | - | ||||
| Prepaid expenses | 144,048 | 131,325 | ||||
| Current portion of long-term note receivable | 200,000 | 100,000 | ||||
| Deferred offering costs | 250,000 | - | ||||
| Other current assets | 133,056 | 136,217 | ||||
| Current assets of discontinued operations | 5,824,649 | 1,550,067 | ||||
| Total current assets | 12,612,154 | 9,417,365 | ||||
| Non-current assets: | ||||||
| Property and equipment, net | 319,361 | 475,697 | ||||
| Operating lease right-of-use assets | 29,386 | 172,594 | ||||
| Long-term investment in warrants | 354,950 | 577,786 | ||||
| Long-term note receivable | - | 100,000 | ||||
| Deferred tax assets | 3,914 | 31,575 | ||||
| Security deposits | 6,578 | 108,880 | ||||
| Other non-current assets | 10,828 | 11,715 | ||||
| Non-current assets of discontinued operations | - | 3,069,422 | ||||
| Total non-current assets | 725,017 | 4,547,669 | ||||
| Total assets | $ | 13,337,171 | $ | 13,965,034 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable and accrued expenses | $ | 1,333,724 | $ | 1,637,108 | ||
| Accounts payable and accrued expenses - related party | 25,507 | 47,199 | ||||
| Accrued payroll and other employee costs | 382,087 | 273,115 | ||||
| Due to related party | - | 885 | ||||
| Short-term debt - related party | 70,900 | 75,000 | ||||
| Current portion of long-term debts | 49,479 | 46,382 | ||||
| Insurance premium financing | 52,823 | 16,626 | ||||
| Factoring liability | 228,310 | 172,394 | ||||
| Operating lease liabilities, current | 20,400 | 134,910 | ||||
| Finance lease liabilities, current | 17,349 | 15,956 | ||||
| Income tax payables | 716,253 | 818,030 | ||||
| Deferred revenue | 472,830 | 751,251 | ||||
| Derivative liability | 245,820 | - | ||||
| Other current liabilities | 654,606 | 589,762 | ||||
| Current liabilities of discontinued operations | 4,735,007 | 2,843,104 | ||||
| Total current liabilities | 9,005,095 | 7,421,722 | ||||
| Non-current liabilities: | ||||||
| Long-term debts | 461,433 | 498,706 | ||||
| Operating lease liabilities, non-current | 12,126 | 41,530 | ||||
| Finance lease liabilities, non-current | 33,899 | 43,593 | ||||
| Asset retirement obligations | - | 72,463 | ||||
| Non-current liabilities of discontinued operations | - | 2,425,005 | ||||
| Total non-current liabilities | 507,458 | 3,081,297 | ||||
| Total liabilities | 9,512,553 | 10,503,019 | ||||
| Shareholders' equity: | ||||||
| Preferred shares, $0.0001 par value, 20,000,000 shares authorized; Series A convertible preferred shares, 2,000 and no shares designated, issued and outstanding as of September 30, 2025 and December 31, 2024, respectively; aggregate liquidation preference of $2,256,833 and nil as of September 30, 2025 and December 31, 2024, respectively | 1,360,586 | - | ||||
| Common shares, $0.0001 par value, 200,000,000 shares authorized, 23,310,770 and 21,937,987 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively | 2,331 | 2,193 | ||||
| Subscription receivable | - | (103,942 | ) | |||
| Additional paid-in capital | 21,269,122 | 20,656,153 | ||||
| Accumulated deficit | (17,797,861 | ) | (16,244,843 | ) | ||
| Accumulated other comprehensive income | 357,275 | 343,936 | ||||
| Total HeartCore Enterprises, Inc. shareholders' equity | 5,191,453 | 4,653,497 | ||||
| Non-controlling interests | (1,366,835 | ) | (1,191,482 | ) | ||
| Total shareholders' equity | 3,824,618 | 3,462,015 | ||||
| Total liabilities and shareholders' equity | $ | 13,337,171 | $ | 13,965,034 | ||
| HeartCore Enterprises, Inc. | ||||||
| Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) | ||||||
| For the nine months ended September 30, | ||||||
| 2025 | 2024 | |||||
| Revenues | $ | 7,052,799 | $ | 21,270,891 | ||
| Cost of revenues (including cost of revenues resulting from transactions with a related party of $61,078 and $117,601 for the three and nine months ended September 30, 2025, respectively, and of $101,452 and $126,569 for the three and nine months ended September 30, 2024, respectively) | 4,453,735 | 6,208,885 | ||||
| Gross profit | 2,599,064 | 15,062,006 | ||||
| Operating expenses: | ||||||
| Selling expenses | 338,615 | 518,627 | ||||
| General and administrative expenses (including general and administrative expenses resulting from transactions with a related party of nil and $29,048 for the three and nine months ended September 30, 2025, respectively, and of $17,474 and $23,947 for the three and nine months ended September 30, 2024, respectively) | 4,119,851 | 4,802,530 | ||||
| Research and development expenses | - | 172,140 | ||||
| Total operating expenses | 4,458,466 | 5,493,297 | ||||
| Income (loss) from continuing operations | (1,859,402 | ) | 9,568,709 | |||
| Other income (expenses): | ||||||
| Changes in fair value of investments in marketable securities | (908,416 | ) | (308,059 | ) | ||
| Changes in fair value of investments in warrants | (74,109 | ) | 1,631,700 | |||
| Loss on sale of warrants | - | (3,970,628 | ) | |||
| Changes in fair value of derivative liability | (9,679 | ) | - | |||
| Interest income | 4,525 | 13,280 | ||||
| Interest expenses | (66,640 | ) | (85,275 | ) | ||
| Other income | 63,327 | 26,336 | ||||
| Other expenses | (7,901 | ) | (70,246 | ) | ||
| Total other expenses | (998,893 | ) | (2,762,892 | ) | ||
| Income (loss) from continuing operations before income tax expense | (2,858,295 | ) | 6,805,817 | |||
| Income tax expense | 54,886 | 100,475 | ||||
| Net income (loss) from continuing operations | (2,913,181 | ) | 6,705,342 | |||
| Income (loss) from discontinued operations, net of income tax | 1,188,481 | 422,468 | ||||
| Net income (loss) | (1,724,700 | ) | 7,127,810 | |||
| Less: net loss attributable to non-controlling interests | (171,682 | ) | (645,546 | ) | ||
| Net income (loss) attributable to HeartCore Enterprises, Inc. | (1,553,018 | ) | 7,773,356 | |||
| Dividends accrued on Series A convertible preferred shares | (56,833 | ) | - | |||
| Net income (loss) attributable to HeartCore Enterprises, Inc. common shareholders | $ | (1,609,851 | ) | $ | 7,773,356 | |
| Other comprehensive income (loss): | ||||||
| Foreign currency translation adjustment | 9,668 | 51,678 | ||||
| Total comprehensive income (loss) | (1,715,032 | ) | 7,179,488 | |||
| Less: comprehensive loss attributable to non-controlling interests | (175,353 | ) | (654,384 | ) | ||
| Comprehensive income (loss) attributable to HeartCore Enterprises, Inc. | $ | (1,539,679 | ) | $ | 7,833,872 | |
| Net income (loss) from continuing operations attributable to HeartCore Enterprises, Inc. per common share | ||||||
| Basic | $ | (0.12 | ) | $ | 0.35 | |
| Diluted | $ | (0.12 | ) | $ | 0.35 | |
| Income (loss) from discontinued operations per common share | ||||||
| Basic | $ | 0.05 | $ | 0.02 | ||
| Diluted | $ | 0.04 | $ | 0.02 | ||
| Net income (loss) attributable to HeartCore Enterprises, Inc. per common share | ||||||
| Basic | $ | (0.07 | ) | $ | 0.37 | |
| Diluted | $ | (0.07 | ) | $ | 0.37 | |
| Weighted average common shares outstanding | ||||||
| Basic | 22,489,677 | 20,861,012 | ||||
| Diluted | 27,153,162 | 20,861,012 | ||||
| HeartCore Enterprises, Inc. | ||||||
| Unaudited Consolidated Statements of Cash Flows | ||||||
| For the nine months ended September 30, | ||||||
| 2025 | 2024 | |||||
| Cash flows from operating activities of continuing operations: | ||||||
| Net income (loss) | $ | (1,724,700 | ) | $ | 7,127,810 | |
| Income from discontinued operations, net of income tax | 1,188,481 | 422,468 | ||||
| Net income (loss) from continuing operations | (2,913,181 | ) | 6,705,342 | |||
| Adjustments to reconcile net income (loss) from continuing operations to net cash flows | ||||||
| used in operating activities: | ||||||
| Depreciation and amortization expenses | 36,994 | 532,958 | ||||
| Loss on disposal of property and equipment | 116,981 | 1,798 | ||||
| Non-cash lease expense | 52,843 | 93,554 | ||||
| Gain on termination of lease | (9,059 | ) | - | |||
| Deferred income taxes | 29,680 | (133,875 | ) | |||
| Stock-based compensation | 69,222 | 236,826 | ||||
| Marketable securities received as noncash consideration | - | (572,010 | ) | |||
| Warrants received as noncash consideration | (837,913 | ) | (12,969,683 | ) | ||
| Changes in fair value of investments in marketable securities | 908,416 | 308,059 | ||||
| Changes in fair value of investments in warrants | 74,109 | (1,631,700 | ) | |||
| Loss on sale of warrants | - | 3,970,628 | ||||
| Changes in fair value of derivative liability | 9,679 | - | ||||
| Gain on settlement of asset retirement obligations | (45,873 | ) | - | |||
| Changes in assets and liabilities: | ||||||
| Accounts receivable | (77,103 | ) | 85,152 | |||
| Prepaid expenses | 127,401 | (160,556 | ) | |||
| Other assets | 116,399 | 126,017 | ||||
| Accounts payable and accrued expenses | (304,033 | ) | 34,385 | |||
| Accounts payable and accrued expenses - related party | (20,386 | ) | 28,315 | |||
| Accrued payroll and other employee costs | 106,123 | 21,942 | ||||
| Due to related party | (884 | ) | - | |||
| Operating lease liabilities | (44,571 | ) | (98,223 | ) | ||
| Income tax payables | (105,064 | ) | 20,481 | |||
| Deferred revenue | (278,421 | ) | (55,047 | ) | ||
| Other liabilities | 7,683 | 428,522 | ||||
| Net cash flows used in operating activities of continuing operations | (2,980,958 | ) | (3,027,115 | ) | ||
| Cash flows from investing activities of continuing operations: | ||||||
| Purchase of investment in SAFE | - | (75,000 | ) | |||
| Net proceeds from sale of warrants | - | 5,640,000 | ||||
| Proceeds from sale of marketable securities | 1,071,732 | - | ||||
| Net cash flows provided by investing activities of continuing operations | 1,071,732 | 5,565,000 | ||||
| Cash flows from financing activities of continuing operations: | ||||||
| Payments for finance lease | (12,692 | ) | (12,321 | ) | ||
| Repayment of related party debt | (4,100 | ) | - | |||
| Repayment of long-term debts | (34,176 | ) | (24,485 | ) | ||
| Repayment of insurance premium financing | (103,303 | ) | (107,297 | ) | ||
| Net proceeds from factoring arrangement | 55,916 | - | ||||
| Net repayment of factoring arrangement | - | (257,295 | ) | |||
| Capital contribution from non-controlling shareholder | - | 67,195 | ||||
| Distribution of dividends | - | (834,566 | ) | |||
| Proceeds from issuance of common shares related to at the market offering agreement | 30,445 | - | ||||
| Proceeds from collection of subscription receivable | 103,942 | - | ||||
| Proceeds from exercise of stock options | 117,000 | - | ||||
| Proceeds from issuance of Series A convertible preferred shares and common shares related to securities purchase agreement, net of share issuance costs | 1,800,000 | - | ||||
| Net cash flows provided by (used in) financing activities of continuing operations | 1,953,032 | (1,168,769 | ) | |||
| Cash flows from discontinued operations: | ||||||
| Net cash flows provided by (used in) operating activities of discontinued operations | 127,672 | (747,399 | ) | |||
| Net cash flows provided by investing activities of discontinued operations | 29,222 | 27,323 | ||||
| Net cash flows used in financing activities of discontinued operations | (323,630 | ) | (360,672 | ) | ||
| Net cash flows used in discontinued operations | (166,736 | ) | (1,080,748 | ) | ||
| Effect of exchange rate changes | 26,577 | (68,730 | ) | |||
| Net change in cash and cash equivalents | (96,353 | ) | 219,638 | |||
| Cash and cash equivalents - beginning of the period | 2,121,089 | 1,012,479 | ||||
| Cash and cash equivalents - end of the period | $ | 2,024,736 | $ | 1,232,117 | ||
| Supplemental cash flow disclosures: | ||||||
| Interest paid | $ | 88,321 | $ | 104,880 | ||
| Income taxes paid | $ | 131,118 | $ | 201,035 | ||
| Non-cash investing and financing transactions: | ||||||
| Insurance premium financing | $ | 139,500 | $ | 172,689 | ||
| Warrants converted to marketable securities | $ | 388,260 | $ | 6,443,276 | ||
| Issuance of common shares related to equity purchase agreement | $ | 250,000 | $ | - | ||
| Dividends accrued on Series A convertible preferred shares | $ | 56,833 | $ | - | ||
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