What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-04-09 compared with 2023-03-31 · 319 added, 227 removed, 1378 unchanged (28% of the section changed)

Business section, along with other sections of this annual report on Form 10-K, includes statistical and other industry and market

data that we obtained from industry publications and research, surveys and studies conducted by third parties.

Industry publications

and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to

be reliable, although they do not guarantee the accuracy or completeness of such information.

While we believe that these industry

publications and third-party research, surveys and studies are reliable, we have not independently verified such data and we do not

make any representation as to the accuracy of the information.

Unless the context otherwise requires, “HeartCore,”

“we,” “us,” “our,” or the “Company” refers to HeartCore Enterprises, Inc.

consolidated subsidiaries, including, but not limited to, HeartCore Co., Ltd.

(“HeartCore Co.”), HeartCore Capital

Advisors, Inc.

(“HeartCore Capital Advisors”), HeartCore Financial, Inc.

(HeartCore Financial”), and Sigmaways,

(“Sigmaways”).

HeartCore Financial was incorporated in January 2023.

HeartCore Capital Advisors was

incorporated in February 2023.

The acquisition of Sigmaways was closed in February 2023.

This Business section, along

with other sections of this annual report on Form 10-K, includes statistical and other industry and market data that we obtained from

industry publications and research, surveys and studies conducted by third parties.

Industry publications and third-party research, surveys

and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee

the accuracy or completeness of such information.

While we believe that these industry publications and third-party research, surveys

and studies are reliable, we have not independently verified such data and we do not make any representation as to the accuracy of the

Unless the context otherwise requires, “HeartCore,” “we,” “us,” “our,” or

the “Company” refers to HeartCore Enterprises, Inc.

and its consolidated subsidiaries, including, but not limited to, HeartCore

(“HeartCore Co.”) and its subsidiary, HeartCore Capital Advisors, Inc.

(“HeartCore Capital Advisors”),

HeartCore Financial, Inc.

(“HeartCore Financial”), and Sigmaways, Inc.

(“Sigmaways”) and its subsidiaries.

Financial was incorporated in January 2023.

HeartCore Capital Advisors was incorporated in February 2023.

The acquisition of Sigmaways

and its subsidiaries was closed in February 2023.

are a leading software development company based in Tokyo, Japan.

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The first business

unit includes a customer experience management business that has been in existence for 12 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.

second business unit 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.

unit, our CX division, includes a customer experience management business (the “CXM Platform”) that has been in existence

for 14 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.

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.

have made significant investments in our sales and marketing efforts globally.

As of December 31, 2023, our sales and marketing organization

was comprised of 14 employees including our field sales organization, which maintains a physical sales presence in the Japanese software

Using our go-to-market strategy, we believe we have made significant contributions in Japan and have established a diversified

revenue and customer base.

As of December 31, 2022, our combined business units (customer experience management business unit and digital

transformation business unit) had 903 total customers in Japan, of which 645, or 71.4%, were paying customers, and 24 total customers

outside Japan, of which 2, or 0.2%, was a paying customer.

Our 280 non-paying customers were originally paying customers that utilized

our paid services but now use a free version of the CXM Platform.

There is the potential for non-paying customers to become paying customers

again if and when they start utilizing our paid services again.

On September 6, 2022, HeartCore

Enterprises, Inc.

entered into a share exchange and purchase agreement (“Sigmaways Agreement”) to acquire 51% of the outstanding

shares of Sigmaways, a company incorporated under the laws of the State of California and is engaged in the business of developing and

sales of software in the United States.

The acquisition closed on February 1, 2023.

During 2022, we started the GO IPO business,

which supports Japanese companies to list on Nasdaq and NYSE in the United States.

As of March 30, 2023, we have entered into consulting agreements with nine companies to assist

them in their IPO process, whereby we are entitled to receive from each company a consulting fee ranges from $350,000 to $900,000 and

warrants or Japanese acquisition rights to purchase one to four percent of the fully-diluted share capital of such companies that is exercisable

on certain dates at an exercise price of $0.01 per share.

The revenue in the GO IPO business helped to offset the decline in sales in

the CX and DX divisions.

In the first quarter of 2023, we formed HeartCore Financial and HeartCore Capital Advisors as

a part of our Go IPO consulting business.

was comprised of 16 employees including our field sales organization, which maintains a

physical sales presence in the Japanese software market.

Using our go-to-market strategy, we believe we have made significant contributions

in Japan and have established a diversified revenue and customer base.

As of December 31, 2023, our combined business units (customer

experience management business unit and digital transformation business unit) had 949 total customers in Japan, of which 691, or 72.8%,

were paying customers, and 24 total customers outside Japan, of which 1, or 0.1%, was a paying customer.

Our 280 non-paying customers

were originally paying customers that utilized our paid services but now use a free version of the CXM Platform.

the potential for non-paying customers to become paying customers again if and when they start utilizing our paid services again.

During 2022, we started the GO

IPO business, which supports Japanese companies listing on Nasdaq and NYSE in the United States.

As of December 31, 2023, we have entered

into consulting agreements with eleven 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 one to four percent 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.

revenue in the GO IPO business helped to offset the decline in sales in the CX and DX divisions in Japan.

In the first quarter of 2023,

we formed HeartCore Financial and HeartCore Capital Advisors as a part of our Go IPO consulting business.

In the fourth quarter of 2023,

we formed HeartCore Luvina Vietnam Company Limited in Vietnam, which is engaged in the business of software development.

In February 2023, we acquired

51% of the outstanding shares of Sigmaways and its wholly-owned subsidiaries, which are primarily engaged in the business of developing

and sales of software in the United States.

Experience Management Business

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Transformation Business

is a technology that allows automation for a defined set of tasks.

RPA robots can emulate most human-computer interactions to carry out

error-free tasks at high volume and speed.

Process Automation (“RPA”) is a technology that allows automation for a defined set of tasks.

RPA robots can emulate most

human-computer interactions to carry out error-free tasks at high volume and speed.

Some common tasks RPA can do include:

(i) invoice processing;

(ii) process sales orders;

account reconciliation;

(iv) enterprise resource planning data entry for core processes such as finance, human resources, manufacturing,

supply chain, services, and procurement;

(iii) account reconciliation;

(iv) enterprise resource planning data entry for core processes

such as finance, human resources, manufacturing, supply chain, services, and procurement;

(v) employee onboarding;

(vi) payroll;

and (vii) data queries.

(vii) data queries.

companies have strived to automate, it has become more and more challenging to identify RPA opportunities.

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paying customers that utilized our paid services but now use a free version of the CXM Platform.

There is the potential for non-paying

customers to become paying customers again if and when they start utilizing our paid services again.

There is the potential for

non-paying customers to become paying customers again if and when they start utilizing our paid services again.

of our CXM Platform

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our software.

IPO Consulting Services

we concluded our initial public offering and listed on the Nasdaq Capital Market in February 2022, we have been offering “Go IPO”

consulting services to a number of private Japanese companies where we assist such private Japanese companies and/or their affiliates

(“issuers”) with their initial public offerings in the United States as well as their simultaneous listings onto the Nasdaq

Stock Market, the New York Stock Exchange or the NYSE American.

More specifically, these consulting services (collectively, “Services”)

include the following:

Assisting with introductions to law firms, underwriters and auditing firms, in order that clients can make their

selections, at their sole discretion;

of process mining and task mining licenses for internal audit and internal control;

in the preparation of documentation for internal controls required for an initial public offering and simultaneous listing on the

Nasdaq Stock Market, the New York Stock Exchange or the NYSE American;

support services to remove problematic accounting accounts upon listing support;

of requested documents into English;

and, if requested by the other party, lead, meetings of management and employees;

support services related to the Nasdaq, the New York Stock Exchange or the NYSE American listing;

of accounting data from Japanese standards to U.S.

in the preparation of S-1 or F-1 filings;

of English web page;

an investor presentation/deck and executive summary of the operations.

providing the Services, we do not perform accounting services, and do not act as an investment advisor or broker/dealer.

the terms of the consulting agreements with the issuers, 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;

in structuring any transactions involving the sale of the issuers’ securities;

pre-screening of potential investors;

due diligence

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

Such selection and negotiation is the sole responsibility of the client.

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:

cash fee payable in installment payments;

by issuers to us of a warrants or stock acquisition rights to acquire a number of shares of capital stock of the issuer, to initially

be equal to a designated percentage of the fully diluted share capital of the issuer, subject to adjustment as set forth in the warrants

or stock acquisition rights.

of December 31, 2023, we have entered into consulting agreements with eleven 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 one to four percent 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.

and Marketing

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was comprised of 16 employees including our field sales organization, which maintains a physical sales presence in the Japanese software

Using our go-to-market strategy, we believe we have made significant contributions in Japan and have established a diversified

revenue and customer base.

Our sales and marketing strategy is focused on driving growth through selling products to new customers and

driving expansion within our existing customers.

Our products officer, together with our sales, marketing, and executive teams, promote

our brand by working to cultivate long-term relationships with current and prospective customers, expand our partnership network and

foster our developer community.

Using our go-to-market strategy, we believe we have made significant contributions in Japan and have established

a diversified revenue and customer base.

Our sales and marketing strategy is focused on driving growth through selling products to new

customers and driving expansion within our existing customers.

Our products officer, together with our sales, marketing, and executive

teams, promote our brand by working to cultivate long-term relationships with current and prospective customers, expand our partnership

network and foster our developer community.

sell our solutions through a direct sales team and through channel partnerships.

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have a large and diversified customer base.

No single customer accounted for more than 10% of our revenue for the year ended December 31, 2022.

As of December 31, 2022, our combined business units (customer experience management business unit and digital transformation business

unit) had 903 total customers of varying sizes.

We pride ourselves in providing what we believe to be a great experience to every single

customer and user of our software.

Our customers span a variety of industries and across various departments within an organization and

Three customers accounted for more than 10% of our revenue for the year ended December

As of December 31, 2023, our combined business units (customer experience management business unit and digital transformation

business unit) had 949 total customers of varying sizes.

We pride ourselves in providing what we believe to be a great experience

to every single customer and user of our software.

Our customers span a variety of industries and across various departments within an

organization and include:

Electric Power Co

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/ Pharmaceuticals

Manufacturing

Pharmaceutical Company

Pharmaceutical

Life Insurance

Pharmaceutical

Marine Holdings, Inc.

Dai-ichi Life Insurance

Manufacturing

Steel Corporation

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Our solutions partners promote our brand and offer our CXM Platform to their clients.

Solutions partners and customers referred to us by our solutions partners represented approximately 50% of our total customers as of

December 31, 2022, and approximately 64% of our total revenue for the year ended December 31, 2022.

These solutions partners help us

to promote the vision of the inbound experience, efficiently reach new mid-market businesses at scale, and provide our mutual customers

with more diverse and higher-touch services.

Solutions partners and customers referred to us by our solutions partners represented approximately 62% of our customers in Japan,

and approximately 52% of our revenue in Japan for the year ended December 31, 2023.

These solutions partners help us to promote the

vision of the inbound experience, efficiently reach new mid-market businesses at scale, and provide our mutual customers with more

diverse and higher-touch services.

Pricing Strategy .

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we believe we have a significant opportunity to increase revenue from our existing customers.

We plan to increase revenue from our existing

customers by expanding their use of our CXM Platform by upselling additional offerings and features, adding additional users, and cross-selling

our marketing, sales, service, and content management products to existing customers through touchless or low touch in-product purchases.

Our scalable pricing model allows us to capture more spend as our customers grow, increase the number of their customers and prospects

managed on our CXM Platform, and offer additional functionality available from our higher price tiers and add-ons, providing us with

a substantial opportunity to increase the lifetime value of our customer relationships.

We plan to increase revenue

from our existing customers by expanding their use of our CXM Platform by upselling additional offerings and features, adding additional

users, and cross-selling our marketing, sales, service, and content management products to existing customers through touchless or low

touch in-product purchases.

Our scalable pricing model allows us to capture more spend as our customers grow, increase the number of

their customers and prospects managed on our CXM Platform, and offer additional functionality available from our higher price tiers and

add-ons, providing us with a substantial opportunity to increase the lifetime value of our customer relationships.

Expanding Internationally .

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For example, we have introduced over four new products and multiple new features over the last 24 months.

and will continue to make significant investments in research and development to bolster our existing technology and enhance usability

made and will continue to make significant investments in research and development to bolster our existing technology and enhance usability

to improve our customers’ productivity.

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We believe there is a significant opportunity to expand use of our software in the top 25 countries as measured by gross domestic

As of December 31, 2022, sales to customers located in such countries represented 100% of our total annualized renewal run-rate.

We intend to continue to make significant investments to expand our sales and drive adoption of our software throughout those markets.

In particular, we believe that North America represents a significant opportunity for us, and we intend on continuing to expand our sales

and drive adoption of our software across the region.

As of December 31, 2023, sales to customers located in such countries represented 100% of our total revenues.

We intend to continue to make significant investments to expand our sales and drive adoption of our software throughout those

In particular, we believe that North America represents a significant opportunity for us, and we intend on continuing to expand

our sales and drive adoption of our software across the region.

As of December 31, 2023, customers located in the United States represented

of our total annualized renewal run-rate.

40.21% of our total revenues.

Opportunistically

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software, know-how, and brand.

As of December 31, 2022, we held one issued patent in Japan.

Our issued patent is scheduled to expire between October

2028 and January 2030.

of December 31, 2023, we held one issued patent in Japan.

Our issued patent is scheduled to expire between October 2028 and January 2030.

As of December 31, 2023, we held one pending U.S.

trademark application, and more than two active foreign trademark

As of December 31, 2022, we held two domain names in the United States and in foreign jurisdictions.

We continually review our

development efforts to assess and identify the existence and patentability of new intellectual property.

trademark application, and more than two active foreign trademark filings.

As of December

31, 2023, we held two domain names, one registered in the United States and one registered in foreign jurisdictions.

We continually

review our development efforts to assess and identify the existence and patentability of new intellectual property.

terms of individual patents extend for varying periods of time, depending upon the date of filing of the patent application, the date

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to minimize the risk of the virus and manage its effects on our business and workforce.

Although our company has been

in existence for less than two years, our wholly owned operating subsidiary, HeartCore Co.

operated throughout the pandemic and continues

to operate after the pandemic.

HeartCore Co.’s business is affected by a variety of external factors related to the pandemic and

post-pandemic that are beyond our control.

For existing customers, the pandemic had no impact on the use of our software;

for new customers

in the travel, hotel, airline, rail, and food service industries in the CX division, the pandemic resulted in a decrease in new orders.

However, although the pandemic is coming to an end, it will take some time before the economy is fully normalized.

This results in even

lower sales in 2022 than in 2021.

Regarding the impact of the pandemic on the DX sector, demand for our DX software increased as large

companies were forced to change their work patterns, forcing employees to work remotely.

In 2022, after the pandemic, a number of employees

left the company, forcing the company to downsize its operations and resulted in a decline in sales.

During 2022, we started the GO IPO

business, which supports Japanese companies to list on Nasdaq and NYSE in the United States.

As of March 30, 2023, we have entered into

consulting agreements with nine companies to assist them in their IPO process, whereby we are entitled to receive from each company a

consulting fee ranges from $350,000 to $900,000 and warrants or Japanese acquisition rights to purchase one to four percent of the fully-diluted

share capital of such companies that is exercisable on certain dates at an exercise price of $0.01 per share.

The revenue in the GO IPO

business helped to offset the decline in sales in the CX and DX divisions.

our company has been in existence for less than three years, our wholly owned operating subsidiary, HeartCore Co.

throughout the pandemic and continues to operate after the pandemic.

HeartCore Co.’s business is affected by a variety of

external factors related to the pandemic and post-pandemic that are beyond our control.

For existing customers, the pandemic had no

impact on the use of our software;

for new customers in the travel, hotel, airline, rail, and food service industries in the CX

division, the pandemic resulted in a decrease in new orders.

Although the effects of the pandemic are decreasing, we feel it will

take additional time before the economy is fully normalized.

In addition, the Japanese yen was weakening, so that sales in dollar

terms in 2023 were slightly lower than in 2022.

Regarding the impact of the pandemic on the DX sector, demand for our DX

software increased as large companies were forced to change their work patterns, forcing employees to work remotely.

During 2022, we

started the GO IPO business, which supports Japanese companies to list on Nasdaq and NYSE in the United States.

As of December 31,

2023, we have entered into consulting agreements with eleven 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 one to four percent 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.

The revenue in the GO IPO business helped to offset the decline in sales in the CX and DX

divisions in Japan.

duration and extent of the impact from the pandemic depends on future developments that cannot be accurately predicted at this time,

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September 6, 2022, HeartCore Enterprises, Inc.

entered into a share exchange and purchase agreement (“Sigmaways Agreement”) to acquire

51% of the outstanding shares of Sigmaways, a company incorporated under the laws of the State of California

and is engaged in the business of developing and sales of software in the United States .

entered into a share exchange and purchase agreement (“Sigmaways Agreement”)

to acquire 51% of the outstanding shares of Sigmaways, a company incorporated under the laws of the State of California , and its wholly owned subsidiaries.

Sigmaways and its wholly owned subsidiaries are engaged

in the business of developing and sales of software

in the United States .

The acquisition was closed on February 1, 2023.

In the first quarter

of 2023, we formed HeartCore Financial and HeartCore Capital Advisors as a part of our Go IPO consulting business.

the first quarter of 2023, we formed HeartCore Financial in the U.S.

and HeartCore Capital Advisors in Japan, as a part of our Go IPO

consulting business.

In the fourth quarter of 2023, we formed HeartCore Luvina Vietnam Company Limited in Vietnam, which is engaged in

the business of software development.

to Share Exchange Agreement - Information Services International-Dentsu Ltd.

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Purchase Agreement – Dentsu Digital Investment Limited

August 10, 2021, the Company and Dentsu Digital Investment Limited (“Dentsu Digital”) entered into a Stock Purchase

Agreement, pursuant to which the Company agreed to purchase the 278 shares of HeartCore Co.

from Dentsu Digital in accordance with

certain terms and conditions in the Stock Purchase Agreement.

In accordance with the terms of the Stock Purchase Agreement, the

Company agreed to purchase the 278 shares of HeartCore Co.

from Dentsu Digital for 50,040,000 Japanese Yen (approximately $435,500)

on the earlier of the (i) the date the SEC declares effective a registration statement on Form S-1, for a firm commitment

underwritten initial public offering of common stock, filed by the Company with the SEC or (ii) December 20, 2022.

August 10, 2021, the Company and Dentsu Digital Investment Limited (“Dentsu Digital”) entered into a Stock Purchase Agreement,

pursuant to which the Company agreed to purchase the 278 shares of HeartCore Co.

from Dentsu Digital in accordance with certain terms

and conditions in the Stock Purchase Agreement.

In accordance with the terms of the Stock Purchase Agreement, the Company agreed to purchase

the 278 shares of HeartCore Co.

from Dentsu Digital for 50,040,000 Japanese Yen (approximately $435,500) on the earlier of the (i) the

date the SEC declares effective a registration statement on Form S-1, for a firm commitment underwritten initial public offering of common

stock, filed by the Company with the SEC or (ii) December 20, 2022.

February 24, 2022, the Company purchased 278 shares of HeartCore Co.

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As of December

31, 2022 and 2021, the Company has a due to related party balance of $402 and $1,110, respectively, from Sumitaka Yamamoto, the CEO and

major shareholder of the Company.

The balance is unsecured, non-interest bearing and due on demand.

During the year ended December 31,

2022, the Company repaid to the related party for operating expenses the related party paid on behalf of the Company in a net amount of

During the year ended December 31, 2021, the Company advanced $87,664 to this related party, and the related party paid expenses

of $111,350 on behalf of the Company.

As of December 31, 2020, Sumitaka Yamamoto held 467,622 shares issued with repurchase provision

in relation to the stock options the Company granted in May 2016 that he repurchased on behalf of the Company.

On November 3, 2021, the

Company redeemed 484,056 shares that Sumitaka Yamamoto held on behalf of the Company for $1 and settled the share repurchase payable to

him of $28, resulting in a gain on shares redemption of $27.

As of December 31, 2022 and 2021,

the Company has a loan receivable balance of $294,919 and $386,315, respectively, from Heartcore Technology Inc., a company controlled

by the CEO of the Company.

31, 2023 and 2022, the Company had a due to related party balance of $1,476 and $402, respectively, from Sumitaka Yamamoto, the Chief

Executive Officer (“CEO”) and major shareholder of the Company.

The balance is unsecured, non-interest bearing and due on

During the year ended December 31, 2023, the related party paid operating expenses on behalf of the Company and received the payments

in a net amount of $1,123.

During the year ended December 31, 2022, the Company repaid to the related party for operating expenses the

related party paid on behalf of the Company in a net amount of $575.

As of December

31, 2023 and 2022, the Company has a loan receivable balance of $227,704 and $294,919, respectively, from Heartcore Technology Inc., a

company controlled by the CEO of the Company.

The loan was made to the related party to support its operation.

The balance is unsecured, bears an annual

interest of 1.475%, and requires repayments in installments starting from February 2022.

During the year ended December 31, 2021, the

Company loaned $55,212 to this related party, and the related party paid expenses of $13,704 on behalf of the Company.

During the year

ended December 31, 2022, the Company received repayments of $44,871 from this related party.

In June 2020, Suzuyo Shinwart

Corporation became an over 10% shareholder of the Company.

In July 2021, Suzuyo Shinwart Corporation sold all its shares of the Company

to the Company’s CEO and ceased to be the Company’s related party.

During the period from January 1, 2021 to July 12, 2021,

when Suzuyo Shinwart Corporation was a related party of the Company, the Company has revenues from this related party of $157,791 from

software sales and incurred cost with this related party of $332,669 for software development services provided.

August 10, 2021, the Company and Dentsu Digital Investment Limited (“Dentsu Digital”) entered into a Stock Purchase

Agreement, pursuant to which the Company has agreed to purchase the 278 shares of HeartCore Co.

from Dentsu Digital in accordance

with certain terms and conditions in the Stock Purchase Agreement.

In accordance with the terms of the Stock Purchase Agreement, the

Company shall purchase the 278 shares of HeartCore Co.

from Dentsu Digital for 50,040,000 Japanese Yen (approximately $435,500) on

the earlier of the (i) the date the SEC declares effective a registration statement on Form S-1, for a firm commitment underwritten

initial public offering of common stock, filed by the Company with the SEC or (ii) December 20, 2022.

February 24, 2022, the Company purchased 278 shares of HeartCore Co.

The balance is unsecured,

bears an annual interest of 1.475%, and requires repayments in installments starting from February 2022.

During the years ended December

31, 2023 and 2022, the Company received repayments of $45,404 and $44,871, respectively, from this related party.

period from January 1, 2022 through January 13, 2022, the Company completed a private placement, in which, it issued 30,000 shares of

common shares at a purchase price of $2.50 per share to the officers of the Company for an aggregate amount of $75,000.

August 10, 2021, the Company and Dentsu Digital Investment Limited (“Dentsu Digital”) entered into a Stock Purchase Agreement,

pursuant to which the Company has agreed to purchase the 278 shares of HeartCore Co.

from Dentsu Digital in accordance with certain terms

and conditions in the Stock Purchase Agreement.

In accordance with the terms of the Stock Purchase Agreement, the Company was to purchase

the 278 shares of HeartCore Co.

from Dentsu Digital for 50,040,000 Japanese Yen (approximately $435,500) on the earlier of the (i) the

date the SEC declares effective a registration statement on Form S-1, for a firm commitment underwritten initial public offering of common

stock, filed by the Company with the SEC or (ii) December 20, 2022.

On February 24, 2022, the Company purchased 278 shares of HeartCore

from Dentsu Digital for 50,040,000 Japanese Yen (approximately $435,500).

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D of the Securities Act.

Our Board of Directors and stockholders approved the 2021 Equity Incentive

Plan (the “2021 Plan”) on August 6, 2021.

Under the 2021 Plan, 2,400,000 shares of common stock are authorized for issuance

to employees, directors and independent contractors (except those performing services in connection with the offer or sale of the Company’s

securities in a capital raising transaction, or promoting or maintaining a market for the Company’s securities) of the Company or

its subsidiary.

The 2021 Plan authorizes equity-based and cash-based incentives for participants.

December 25, 2021, the Company awarded options to purchase 1,534,500 shares of common stock pursuant to our 2021 Plan

at an exercise price of $2.50 per share to various officers, directors, employees and consultants of the Company.

The options vest on

each annual anniversary of the date of issuance, in an amount equal to 25% of the applicable shares of common stock, subject to the terms

and conditions of the 2021 Plan and the option award agreements pursuant to which the options were awarded.

9, 2022, the Company entered into executive employment agreements with five executives and granted 85,820 restricted stock units pursuant

to the 2021 Plan.

These common stock vest on each annual anniversary of the date of the employment agreement, in an amount equal to 25%

of the applicable shares of common shares.

On February 25, 2022, the Company

entered into a service agreement with a marketing company to purchase 6-month marketing services and granted 83,333 restricted stock units.

Board of Directors and stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”) on August 6, 2021.

2021 Plan, 2,400,000 shares of common stock are authorized for issuance to employees, directors and independent contractors (except those

performing services in connection with the offer or sale of the Company’s securities in a capital raising transaction, or promoting

or maintaining a market for the Company’s securities) of the Company or its subsidiary.

The 2021 Plan authorizes equity-based and

cash-based incentives for participants.

December 25, 2021, the Company awarded options to purchase 1,534,500 shares of common stock pursuant to our 2021 Plan at an exercise

price of $2.50 per share to various officers, directors, employees and consultants of the Company.

The options vest on each annual anniversary

of the date of issuance, in an amount equal to 25% of the applicable shares of common stock, subject to the terms and conditions of the

2021 Plan and the option award agreements pursuant to which the options were awarded.

February 9, 2022, the Company entered into executive employment agreements with five executives and granted 85,820 restricted stock units

pursuant to the 2021 Plan.

These common stock vest on each annual anniversary of the date of the employment agreement, in an amount equal

to 25% of the applicable shares of common shares.

February 25, 2022, the Company entered into a service agreement with a marketing company to purchase 6-month marketing services and granted

83,333 restricted stock units.

The restricted stock units were issued and vested on May 15, 2022.

On August 2, 2022, the Company

awarded options to purchase 2,000 shares of common stock pursuant to our 2021 Plan at an exercise price of $2.94 per

share to an employee.

The options vest on each annual anniversary of the date of issuance, in an amount equal to 25% of the applicable

shares of common stock, subject to the terms and conditions of the 2021 Plan and the option award agreements pursuant

to which the options were awarded.

On August 9, 2022, the Company

awarded options to purchase 14,500 shares of common shares at an exercise price of $2.48 per share to three prior employees of the Company.

August 2, 2022, the Company awarded options to purchase 2,000 shares of common stock pursuant to our 2021 Plan at an exercise price of

$2.94 per share to an employee.

The options vest on each annual anniversary of the date of issuance, in an amount equal to 25% of the

applicable shares of common stock, subject to the terms and conditions of the 2021 Plan and the option award agreements pursuant to which

the options were awarded.

August 9, 2022, the Company awarded options to purchase 14,500 shares of common shares at an exercise price of $2.48 per share to three

prior employees of the Company.

The options are fully vested and exercisable on the grant date, with the expiration date on August 9,

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The stock options will vest 50% on the grant date and February 1, 2024, respectively.

On March 22, 2023, the Company granted

671,350 shares of common shares to the employees and service providers of Sigmaways.

March 22, 2023, the Company granted 671,350 shares of common shares to the employees and service providers of Sigmaways.

August 1, 2023, the Board approved, and proposed for stockholder approval, the 2023 Equity Incentive Plan (the “2023 Plan”).

The shareholders approved the 2023 Plan at the Annual Shareholder’s meeting on September 29, 2023.

The 2023 Plan provides for various

stock-based incentive awards, including incentive stock options (“ISOs”) and non-qualified stock options (“NQSOs”),

stock appreciation rights (“SARs”), restricted stock and restricted stock units (“RSUs”), and other equity-based

or cash-based awards.

As of December 31, 2023, the Company has not granted any stock-based compensation awards to employees, including

officers, or non-employee directors pursuant to the 2023 Plan.

On August 25, 2023, the Company

awarded options to purchase 2,000 shares of common stock pursuant to our 2021 Plan at an exercise price of $1.10 per share to an employee.

The options vest on each annual anniversary of the date of issuance, in an amount equal to 25% of the applicable shares of common stock,

subject to the terms and conditions of the 2021 Plan and the option award agreements pursuant to which the options were awarded.

Public Offering

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LLC acted as the sole managing underwriter and bookrunner for the offering.

Share Repurchase Program

1, 2022, the Board of Directors approved a share repurchase program (“2022 Share Repurchase

Program”), pursuant to which the Company is authorized to repurchase up to $3.5 million of its outstanding common shares.

and amount of repurchases under the program are determined by the Company’s management based on its evaluation of market conditions

and other factors.

This program has no set termination date and may be suspended or discontinued at any time.

period from June 1, 2022 through September 30, 2022, the Company repurchased 1,349,390 shares

of common shares at an average price of $2.59 per share totaling approximately $3.5 million (including commissions) under the 2022 Share

the Market Offering

October 23, 2023, we entered into the At The Market Offering Agreement with H.C.

Wainwright & Co., LLC (the “Manager”),

as sales agent.

Pursuant to the prospectus supplement and accompanying base prospectus relating to the offering and under terms of the

At the Market Offering Agreement, filed with the SEC on October 23, 2023, the Company may, from time to time, in transactions that are

deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities

Act”) issue and sell through or to the Manager, up to a maximum aggregate amount of $1,988,229 of shares of the Company’s

common stock (the “Shares”).

The issuance and sale of the Shares to or through the Manager from time to time will be effected

pursuant to the Company’s effective shelf registration statement on Form S-3, as amended (File No.

333-270503), which was declared

effective by the Securities and Exchange Commission on April 12, 2023 (the “Registration Statement”), and the related prospectus

supplement and accompanying base prospectus relating to the offering of the Shares.

Repurchase Program

As of September 30, 2022, the Company has used up the entire balance authorized under the 2022 Share Repurchase Program.

On October 18, 2022, the Board

of Directors approved to retire all the repurchased shares.

As of December 31, 2022, all of the 1,349,390 treasury shares have been

June 1, 2022, the Board of Directors approved a share repurchase program (“2022 Share

Repurchase Program”), pursuant to which the Company is authorized to repurchase up to $3.5 million of its outstanding common shares.

The timing and amount of repurchases under the program are determined by the Company’s management based on its evaluation of market

conditions and other factors.

This program has no set termination date and may be suspended or discontinued at any time.

the period from June 1, 2022 through September 30, 2022, the Company repurchased 1,349,390

shares of common shares at an average price of $2.59 per share totaling approximately $3.5 million (including commissions) under the

2022 Share Repurchase Program.

As of September 30, 2022, the Company has used up the entire balance authorized under the 2022 Share Repurchase

October 18, 2022, the Board of Directors approved to retire all the repurchased shares.

As of December 31, 2022, all of the 1,349,390 treasury shares have been retired.

October 26, 2023, we received written notice (the “Bid Price Notice”) from the Nasdaq Listing Qualification Department (the

“Nasdaq Staff”) indicating that the Company is 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 the Company’s common stock on the Nasdaq

Capital Market under the symbol “HTCR,” and the Company is currently monitoring the closing bid price of its common stock

and evaluating its alternatives, if appropriate, to resolve the deficiency and regain compliance with this rule.

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, the Company no longer meets this requirement.

The Bid Price Notice indicated that the Company

will be provided 180 calendar days, or until April 23, 2024, in which to regain compliance.

If at any time during this period the closing

bid price of the Company’s common stock is at least $1.00 per share for a minimum of 10 consecutive business days, the Nasdaq Staff

will provide the Company with written confirmation of compliance and the matter will be closed.

Alternatively,

if the Company fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the 180 calendar day period, but meets 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 provides written notice of its intention to

cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then the Company may be granted

an additional 180 calendar days to regain compliance with Rule 5550(a)(2).

can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement, even if it maintains compliance

with the other listing requirements.

The Company is considering actions that it may take in response to the Bid Price Notice in order

to regain compliance with the continued listing requirements, but no decisions regarding a response have been made at this time.

corporate headquarters are located at 1-2-33, Higashigotanda, Shinagawa-ku, Tokyo, Japan, where we lease approximately 7,863 rentable

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two-year renewal option.

Terms of the office lease provide for a base rent payment of $25,309 per month and a share of sales taxes of

$2,531 per month.

We also have an office at 2-4-35, Mekaru, Naha-city, Okinawa, Japan, where we lease approximately 890 rentable square

feet of office space from an unaffiliated third party.

This lease has an original term ending in August 2023 with automatic annual renewal

Terms of the Okinawa office lease provide for a base rent payment of $1,370 per month and a share of sales taxes of $137 per

Terms of the office lease provide for a base rent payment of $23,475 per month and a

share of sales taxes of $2,348 per month.

We also have an office at 2-4-35, Mekaru, Naha-city, Okinawa, Japan, where we lease approximately

890 rentable square feet of office space from an unaffiliated third party.

This lease has an original term ending in August 2024 with

automatic annual renewal option.

Terms of the Okinawa office lease provide for a base rent payment of $1,270 per month and

a share of sales taxes of $127 per month.

The office of HeartCore Capital

Advisors, Inc.

are located at 3-2-5 Kasumigaseki, Chiyoda-ku, Tokyo, Japan, where we lease approximately 1,379 rentable square feet of

office space from an unaffiliated third party.

This lease has lease term ending in June 2026.

Terms of the office lease provide for a

base rent payment of $9,428 per month and a share of sales taxes of $943 per month.

office of Sigmaways, Inc.

are located at 39737 Paseo Padre PKWY, Suite C1 Fremont, CA, the United States, where we lease approximately

765 square feet of office space from an unaffiliated third party with lease term ending in December 2024.

Terms of the office lease provide

for a base rent payment of $1,810 per month.

and Human Capital Management

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As of December 31, 2023, we had 99 full-time employees.

None of our employees is represented

None of our employees

is represented by a union.

We consider our relations with our employees to be good.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business