Third Quarter 2025 and Recent Operational & Financial Highlights
Divested software business subsidiary, HeartCore Co., Ltd ("HeartCore Japan")
Authorized one-time distribution payment to stockholders
Announced Go IPO client, rYojbaba Co., Ltd. began trading on the Nasdaq Stock Market
Signed 16th Go IPO contract
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 ResultsRevenues 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 StatementsThis 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 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
-
