Q3 2024 Revenues Increased 281% to $17.9 Million

Q3 2024 Net Income Increased 526% to $10.8 Million

NEW YORK and TOKYO, Nov. 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 RequirementsExpanded CMS platform offering into a SaaS delivery modelEntered into a sales collaboration with Tosho Computer Systems Co., Ltd.Announced transition from annual contracts to multi-year agreements for core software business contractsPartnered with NTT Data Business Brains Corporation to enhance website development service capabilitiesAchieved top market share in Japan for nine consecutive yearsAwarded new contract from Fourmix Co., Ltd. to implement CMS platformAnnounced Go IPO Client, SBC Medical Group Holdings Incorporated, began trading on the Nasdaq Stock ExchangePartnered with INCUDATA Corp. to enhance corporate digital marketing strategiesAnnounced Go IPO Client, BloomZ Inc., began trading on the Nasdaq Stock ExchangeAuthorized second dividend payment of $0.02 per sharePartnered 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 IPOSM 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