HTCR HeartCore Enterprises Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): November 14, 2024

 

HEARTCORE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41272		87-0913420
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

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

(Address of principal executive offices)

 

+81-3-6409-6966

(Registrant’s telephone number, including area code)

 

N/A

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

 

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

 

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

 

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

 

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

 

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

 

Emerging growth company ☒

 

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

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 14, 2024, HeartCore Enterprises, Inc. (the “Company”) issued a press release announcing financial results for the quarter ended September 30, 2024. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in any website is not a part of this Current Report on Form 8-K.

 

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

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release of the registrant dated November 14, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

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

 

	HEARTCORE ENTERPRISES, INC.
Dated: November 14, 2024	By:	/s/ Sumitaka Yamamoto
	Name:	Sumitaka Yamamoto
	Title:	Chief Executive Officer

 

 

 

Exhibit 99.1

 

 

HeartCore Reports Third Quarter 2024 Financial Results

 

Q3 2024 Revenues Increased 281% to $17.9 Million

Q3 2024 Net Income Increased 526% to $10.8 Million

 

NEW YORK and TOKYO, November 14, 2024 (GLOBE NEWSWIRE) – HeartCore Enterprises, Inc. (Nasdaq: HTCR) (“HeartCore” or “the Company”), a leading enterprise software and consulting services company based in Tokyo, reported financial results for the third quarter ended September 30, 2024.

 

Third Quarter 2024 and Recent Operational Highlights

 

●	Regained compliance with Nasdaq Listing Requirements
●	Expanded CMS platform offering into a SaaS delivery model
●	Entered into a sales collaboration with Tosho Computer Systems Co., Ltd.
●	Announced transition from annual contracts to multi-year agreements for core software business contracts
●	Partnered with NTT Data Business Brains Corporation to enhance website development service capabilities
●	Achieved top market share in Japan for nine consecutive years
●	Awarded new contract from Fourmix Co., Ltd. to implement CMS platform
●	Announced Go IPO Client, SBC Medical Group Holdings Incorporated, began trading on the Nasdaq Stock Exchange
●	Partnered with INCUDATA Corp. to enhance corporate digital marketing strategies
●	Announced Go IPO Client, BloomZ Inc., began trading on the Nasdaq Stock Exchange
●	Authorized second dividend payment of $0.02 per share
●	Partnered with Hitachi Systems, Ltd. to offer combined package of HeartCore CMS and GRED Web Security Assessment Cloud

 

Management Commentary

 

“I am pleased to announce the strongest quarter of HeartCore’s history, supported by the progress made across our Go IPO business,” said HeartCore CEO Sumitaka Kanno. “The third quarter saw two new Go IPO clients successfully listed on the Nasdaq. The warrants and ordinary shares received from these deals contributed to our highest financial results since the inception of the service, driving us into profitable operations for the quarter and year-to-date. This quarter’s results showcased the immense value of our consulting business, and with an optimistic outlook on the U.S. IPO market for Japanese companies, we anticipate closing additional deals over the next several months that will further support the growth of our Go IPO business. We continue to remain in serious discussions with prospective Go IPO clients and look forward to sharing future wins as they come.”

 

“We also accomplished key developments in our software business, positioning us for sustained and predictable growth in the coming quarters. First, we transitioned towards offering multi-year software licensing agreements to our customers, a move designed to generate recurring revenue streams and enhance our margin profile. Furthermore, we added a SaaS delivery model for our CMS platform designed to support our sales and marketing team to tap into a new pool of prospective customers. While Go IPO contains the prospect of significant upside, our adjustments in the software business model are intended to create more stable, durable, and long-term revenue for future quarters. We look forward to continuing driving growth across both arms of the business and carrying this momentum into 2025.”

 

 

 

Third Quarter 2024 Financial Results

 

Revenues increased 281% to $17.9 million compared to $4.7 million in the same period last year. The increase was primarily due to revenue from warrants and ordinary shares associated with the successful listing of two Go IPO consulting service clients.

 

Gross profit increased 1,640% to $14.4 million compared to $0.8 million in the same period last year. The increase was primarily due to the aforementioned reason above.

 

Operating expenses decreased to $2.3 million compared to $2.6 million in the same period last year. The improvement was primarily due to lower selling, general and administrative, and research and development expenses.

 

Net income increased 526% to $10.8 million or $0.53 per diluted share compared to a net loss of $2.5 million or $(0.11) per diluted share, in the same period last year.

 

As of September 30, 2024, the Company had cash and cash equivalents of $1.2 million compared to $1.0 million on December 31, 2023.

 

Nine-Months 2024 Financial Results

 

Revenues increased 46% to $27.0 million compared to $18.5 million in the same period last year. The increase was primarily because revenue recognized from warrants and ordinary shares associated with the successful listing of two Go IPO consulting service clients in current periods was greater than that of recognized in the nine months ended September 30, 2023.

 

Gross profit increased 117% to $17.3 million compared to $8.0 million in the same period last year. The increase was primarily due to the aforementioned reason above.

 

Operating expenses decreased to $7.3 million compared to $8.9 million in the same period last year. The decrease was primarily due to lower selling and general and administrative expenses.

 

Net income increased 506% to $7.1 million or $0.37 per diluted share compared to a net loss of $1.8 million or $(0.07) per diluted share, in the same period last year.

 

About HeartCore Enterprises, Inc.

 

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

 

 

 

Forward-Looking Statements

 

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

 

HeartCore Investor Relations Contact:

 

Gateway Group, Inc.

Matt Glover and John Yi

HTCR@gateway-grp.com

(949) 574-3860

 

 

 

HEARTCORE ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

 

		September 30,				December 31,
		2024				2023
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	1,232,117			$	1,012,479
Accounts receivable			2,578,855				2,623,682
Investments in marketable securities			7,349,575				642,348
Investment in equity securities			-				300,000
Prepaid expenses			769,183				536,865
Current portion of long-term note receivable			100,000				100,000
Due from related party			43,852				44,758
Other current assets			177,381				234,761
Total current assets			12,250,963				5,494,893
Non-current assets:
Accounts receivable, non-current			766,972				-
Property and equipment, net			663,447				763,730
Operating lease right-of-use assets			2,184,344				2,467,889
Intangible asset, net			4,037,500				4,515,625
Goodwill			3,276,441				3,276,441
Long-term investment in SAFE			350,000				-
Long-term investment in equity securities			300,000				-
Long-term investment in warrants			551,787				2,004,308
Long-term note receivable			200,000				200,000
Deferred tax assets			392,617				369,436
Security deposits			336,117				348,428
Long-term loan receivable from related party			146,354				182,946
Other non-current assets			15,812				71
Total non-current assets			13,221,391				14,128,874
Total assets		$	25,472,354			$	19,623,767
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses		$	1,779,799			$	1,757,038
Accounts payable and accrued expenses - related party			28,772				-
Accrued payroll and other employee costs			633,514				723,305
Due to related party			1,438				1,476
Short-term debt			-				135,937
Current portion of long-term debts			462,121				371,783
Insurance premium financing			65,392				-
Factoring liability			305,472				562,767
Operating lease liabilities, current			382,594				396,535
Finance lease liabilities, current			17,375				17,445
Income tax payables			170,453				162,689
Deferred revenue			1,927,582				2,166,175
Other current liabilities			756,766				216,405
Total current liabilities			6,531,278				6,511,555
			-
Non-current liabilities:
Long-term debts			1,382,048				1,770,352
Operating lease liabilities, non-current			1,859,948				2,135,160
Finance lease liabilities, non-current			52,005				66,779
Deferred tax liabilities			1,130,500				1,264,375
Other non-current liabilities			200,818				208,732
Total non-current liabilities			4,625,319				5,445,398
Total liabilities			11,156,597				11,956,953
Shareholders’ equity:
Preferred shares ($0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2024 and December 31, 2023)			-				-
Common shares ($0.0001 par value, 200,000,000 shares authorized; 20,864,144 and 20,842,690 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively)			2,085				2,083
Additional paid-in capital			18,997,059				19,594,801
Accumulated deficit			(6,990,113	)			(14,763,469	)
Accumulated other comprehensive income			392,397				331,881
Total HeartCore Enterprises, Inc. shareholders’ equity			12,401,428				5,165,296
Non-controlling interests			1,914,329				2,501,518
Total shareholders’ equity			14,315,757				7,666,814
Total liabilities and shareholders’ equity		$	25,472,354			$	19,623,767

 

 

 

HEARTCORE ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

 

		For the nine months ended September 30,								For the three months ended September 30,
		2024				2023				2024				2023
Revenues		$	26,963,531			$	18,518,431			$	17,850,411			$	4,688,908
Cost of revenues			9,708,074				10,548,245				3,433,024				3,860,241
Gross profit			17,255,457				7,970,186				14,417,387				828,667
Operating expenses:
Selling expenses			642,225				1,330,747				243,110				274,043
General and administrative expenses			6,395,429				7,305,392				1,966,717				2,172,298
Research and development expenses			307,931				289,303				107,529				170,071
Total operating expenses			7,345,585				8,925,442				2,317,356				2,616,412
Income (loss) from operations			9,909,872				(955,256	)			12,100,031				(1,787,745	)
Other income (expenses):
Changes in fair value of investments in marketable securities			(308,059	)			(500,762	)			122,272				(271,740	)
Changes in fair value of investment in warrants			1,631,700				(294,565	)			2,869,407				(460,672	)
Loss on sale of warrants			(3,970,628	)			-				(3,970,628	)			-
Interest income			15,557				64,633				10,933				14,363
Interest expenses			(105,094	)			(125,073	)			(31,393	)			(42,619	)
Other income			158,914				176,641				24,040				52,640
Other expenses			(131,507	)			(62,701	)			(82,457	)			(25,947	)
Total other expenses			(2,709,117	)			(741,827	)			(1,057,826	)			(733,975	)
Income (loss) before income tax provision			7,200,755				(1,697,083	)			11,042,205				(2,521,720	)
Income tax expense			72,945				58,859				225,275				19,413
Net income (loss)			7,127,810				(1,755,942	)			10,816,930				(2,541,133	)
Less: net loss attributable to non-controlling interests			(645,546	)			(419,211	)			(240,876	)			(233,913	)
Net income (loss) attributable to HeartCore Enterprises, Inc.		$	7,773,356			$	(1,336,731	)		$	11,057,806			$	(2,307,220	)
Other comprehensive income (loss):
Foreign currency translation adjustment			51,678				(85,244	)			65,503				(90,743	)
Total comprehensive income (loss)			7,179,488				(1,841,186	)			10,882,433				(2,631,876	)
Less: comprehensive loss attributable to non-controlling interests			(654,384	)			(422,352	)			(241,913	)			(235,094	)
Comprehensive income (loss) attributable to HeartCore Enterprises, Inc.		$	7,833,872			$	(1,418,834	)		$	11,124,346			$	(2,396,782	)
Net income (loss) per common share attributable to HeartCore Enterprises, Inc.
Basic		$	0.37			$	(0.07	)		$	0.53			$	(0.11	)
Diluted		$	0.37			$	(0.07	)		$	0.53			$	(0.11	)
Weighted average common shares outstanding
Basic			20,861,012				20,257,020				20,864,144				20,842,690
Diluted			20,861,012				20,257,020				20,864,144				20,842,690

 

 

 

HEARTCORE ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the nine months ended September 30,
		2024				2023
Cash flows from operating activities
Net income (loss)		$	7,127,810			$	(1,755,942	)
Adjustments to reconcile net income (loss) to net cash flows used in operating activities:
Depreciation and amortization expenses			561,659				495,200
Loss (gain) on disposal of property and equipment			1,894				(4,737	)
Amortization of debt issuance costs			3,791				2,257
Non-cash lease expense			272,208				254,876
Loss (gain) on termination of lease			(469	)			76
Deferred income taxes			(163,199	)			(109,690	)
Stock-based compensation			236,826				1,267,699
Marketable securities received as noncash consideration			(572,010	)			-
Warrants received as noncash consideration			(12,969,683	)			(4,009,335	)
Changes in fair value of investments in marketable securities			308,059				500,762
Changes in fair value of investment in warrants			(1,631,700	)			294,565
Loss on sale of warrants			3,970,628				-
Changes in assets and liabilities:
Accounts receivable			(685,531	)			(322,583	)
Prepaid expenses			(72,315	)			187,269
Other assets			40,761				(23,982	)
Accounts payable and accrued expenses			34,752				597,247
Accounts payable and accrued expenses - related party			28,315				-
Accrued payroll and other employee costs			(68,323	)			7,471
Due to related party			(7	)			7,562
Operating lease liabilities			(275,850	)			(231,499	)
Income tax payables			17,971				101,058
Deferred revenue			(205,109	)			200,256
Other liabilities			540,008				83,809
Net cash flows used in operating activities			(3,499,514	)			(2,457,661	)
Cash flows from investing activities
Purchases of property and equipment			(4,134	)			(516,658	)
Proceeds from disposal of property and equipment			-				24,935
Advance on note receivable			-				(600,000	)
Purchase of long-term investment in SAFE			(350,000	)			-
Net proceeds from sale of warrants			5,640,000				-
Repayment of loan provided to related party			31,457				34,823
Payment for acquisition of subsidiary, net of cash acquired			-				(724,910	)
Net cash flows provided by (used in) investing activities			5,317,323				(1,781,810	)
Cash flows from financing activities
Payments for finance leases			(12,568	)			(16,537	)
Proceeds from short-term and long-term debts			68,138				219,427
Repayment of short-term and long-term debts			(453,048	)			(584,779	)
Repayment of insurance premium financing			(107,297	)			(266,756	)
Net proceeds from factoring arrangement			-				217,250
Net repayment of factoring arrangement			(257,295	)			-
Payments for debt issuance costs			-				(656	)
Distribution of dividends			(834,566	)			-
Capital contribution from non-controlling shareholder			67,195				-
Net cash flows used in financing activities			(1,529,441	)			(432,051	)
Effect of exchange rate changes			(68,730	)			(306,239	)
Net change in cash and cash equivalents			219,638				(4,977,761	)
Cash and cash equivalents - beginning of the period			1,012,479				7,177,326
Cash and cash equivalents - end of the period		$	1,232,117			$	2,199,565
Supplemental cash flow disclosures:
Interest paid		$	104,880			$	59,290
Income taxes paid		$	201,035			$	91,657
Non-cash investing and financing transactions
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		$	125,735			$	317,040
Finance lease right-of-use assets obtained in exchange for finance lease liabilities		$	-			$	93,117
Remeasurement of operating lease liabilities and right-of-use assets due to lease modification		$	-			$	12,579
Insurance premium financing		$	172,689			$	389,035
Liabilities assumed in connection with purchase of property and equipment		$	-			$	9,602
Common shares issued for acquisition of subsidiary		$	-			$	3,150,000
Warrants converted to marketable securities		$	6,443,276			$	1,257,868

 

 

 

v3.24.3

Cover	Nov. 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 14, 2024
Entity File Number	001-41272
Entity Registrant Name	HEARTCORE ENTERPRISES, INC.
Entity Central Index Key	0001892322
Entity Tax Identification Number	87-0913420
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1-2-33
Entity Address, Address Line Two	Higashigotanda
Entity Address, Address Line Three	Shinagawa-ku
Entity Address, City or Town	Tokyo
Entity Address, Country	JP
City Area Code	+81
Local Phone Number	3-6409-6966
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	HTCR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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