What changed in this filing

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Item 1A. Risk Factors

2024-04-09 compared with 2023-03-31 · 159 added, 111 removed, 1635 unchanged (14% of the section changed)

107 unchanged sentences

can be no assurance that we will be able to comply with Nasdaq Capital Market’s continued listing standards.

On March 12, 2023, Signature Bank was closed by its state chartering authority, the New York State Department of

Financial Services.

On the same date the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver and transferred

all customer deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that is

being operated by the FDIC.

March 12, 2023, Signature Bank was closed by its state chartering authority, the New York State Department of Financial Services.

On the same date the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver and transferred all customer

deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that is being

operated by the FDIC.

The Company automatically became a customer of Signature Bridge Bank, N.A.

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as of March 12, 2023.

Normal banking activities resumed on

Monday, March 13, 2023.

Normal banking activities resumed

on Monday, March 13, 2023.

Related to Our Business and Strategy

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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.

This results in even lower sales in 2022 than in 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 resulting 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 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 fees ranging

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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exchange or in the over the counter trading market in the United States.

March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation

requirements of the HFCA Act.

March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements

of the HFCA Act.

On December 2, 2021, the SEC adopted amendments to finalize such rules.

We will be required to comply

with these rules if the SEC identifies us as having a “non-inspection” year by evaluating the annual report we file, in

which we will identify the auditor who provide opinions related to the financial statements presented in our annual report, the

location where the auditor’s report has been issued and the PCAOB ID number of such audit firm or branch.

If we have three

consecutive non-inspection years, the SEC will implement the trading prohibition of our common stock through stop orders, and the

exact timeline for when the SEC will delist an issuer after three consecutive non-inspection years remain imprecise.

2021, the United States Senate passed the Accelerating Holding Foreign Companies Accountable Act (the “AHFCAA”), which, if enacted, would decrease

the number of non-inspection years from three years to two, thus reducing the time period before our common stock may be prohibited

from trading or delisted.

On December 29, 2022, the AHFCAA was signed into law.

On August 26, 2022, the PCAOB

announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory Commission and the Ministry

of Finance of the People’s Republic of China (together, the “PRC Authorities”).

The Protocol provides the PCAOB with:

(1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates, without any involvement

of Chinese authorities;

(2) procedures for PCAOB inspectors and investigators to view complete audit work papers with all information

included and for the PCAOB to retain information as needed;

(3) direct access to interview and take testimony from all personnel associated

with the audits the PCAOB inspects or investigates.

On December 15, 2022, the PCAOB

announced in its 2022 HFCA Act Determination Report (the “2022 Report”) its determination that the PCAOB was able to secure

complete access to inspect and investigate audit firms in the People’s Republic of China (PRC), and the PCAOB Board voted to vacate

previous determinations to the contrary.

According to the 2022 Report, this determination was reached after the PCAOB had thoroughly tested

compliance with every aspect of the Protocol necessary to determine complete access, including on-site inspections and investigations

in a manner fully consistent with the PCAOB’s methodology and approach in the U.S.

We will be required to comply with these rules

if the SEC identifies us as having a “non-inspection” year by evaluating the annual report we file, in which we will identify

the auditor who provide opinions related to the financial statements presented in our annual report, the location where the auditor’s

report has been issued and the PCAOB ID number of such audit firm or branch.

If we have three consecutive non-inspection years, the SEC

will implement the trading prohibition of our common stock through stop orders, and the exact timeline for when the SEC will delist an

issuer after three consecutive non-inspection years remain imprecise.

On June 22, 2021, the United States Senate passed the Accelerating

Holding Foreign Companies Accountable Act (the “AHFCAA”), which, if enacted, would decrease the number of non-inspection

years from three years to two, thus reducing the time period before our common stock may be prohibited from trading or delisted.

29, 2022, the AHFCAA was signed into law.

August 26, 2022, the PCAOB announced and signed a Statement of Protocol (the “Protocol”) with the China Securities Regulatory

Commission and the Ministry of Finance of the People’s Republic of China (together, the “PRC Authorities”).

provides the PCAOB with:

(1) sole discretion to select the firms, audit engagements and potential violations it inspects and investigates,

without any involvement of Chinese authorities;

(2) procedures for PCAOB inspectors and investigators to view complete audit work papers

with all information included and for the PCAOB to retain information as needed;

(3) direct access to interview and take testimony from

all personnel associated with the audits the PCAOB inspects or investigates.

December 15, 2022, the PCAOB announced in its 2022 HFCA Act Determination Report (the “2022 Report”) its determination that

the PCAOB was able to secure complete access to inspect and investigate audit firms in the People’s Republic of China (PRC), and

the PCAOB Board voted to vacate previous determinations to the contrary.

According to the 2022 Report, this determination was reached

after the PCAOB had thoroughly tested compliance with every aspect of the Protocol necessary to determine complete access, including

on-site inspections and investigations in a manner fully consistent with the PCAOB’s methodology and approach in the U.S.

and globally.

According to the 2022 Report, the

PRC Authorities had fully assisted and cooperated with the PCAOB in carrying out the inspections and investigations according to the Protocol,

and have agreed to continue to assist the PCAOB’s investigations and inspections in the future.

The PCAOB may reassess its determinations

and issue new determinations consistent with the HFCAA at any time.

Our financial statements contained

in this Annual Report on Form 10-K have been audited by MaloneBailey, LLP, an independent registered public accounting firm that is headquartered

in the United States with offices in Beijing and Shenzhen, China.

MaloneBailey, LLP is not among the PCAOB-registered public accounting

firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination on December 16, 2021 of having been unable

to inspect or investigate completely.

As of the date of this annual report, we have not been identified by the SEC as a commission-identified

issuer under the HFCA Act.

However, given that MaloneBailey, LLP is relying upon support from their China-based offices, the trading of

our common stock may be prohibited and our common stock may be delisted from Nasdaq Capital Market or any other U.S.

stock exchange under

the HFCA Act if the PCAOB is unable to inspect our auditor.

The prohibition of trading of our common stock and the delisting of our common stock, or the threat of their being

prohibited or delisted, may cause the value of our common stock to significantly decline or, in extreme cases, become worthless.

While the HFCA Act and AHFCAA are not currently applicable to the Company

because MaloneBailey LLP, the Company’s current independent registered public accounting firm, is subject to PCAOB review, if this

changes in the future for any reason, the Company may be subject to the HFCAA and AHFCAA.

The implications of this regulation if the Company

were to become subject to it are uncertain.

Such uncertainty could cause the market price of our common stock to be materially and adversely

affected, and our securities could be delisted or prohibited from being traded on Nasdaq earlier than would be required by the HFCAA and

If our common stock is unable to be listed on another securities exchange by then, such a delisting would substantially impair

your ability to sell or purchase the common stock when you wish to do so, and the risk and uncertainty associated with a potential delisting

would have a negative impact on the price of the common stock.

According to the 2022 Report, the PRC Authorities had fully assisted and cooperated with the PCAOB in carrying out the inspections and

investigations according to the Protocol, and have agreed to continue to assist the PCAOB’s investigations and inspections in the

The PCAOB may reassess its determinations and issue new determinations consistent with the HFCAA at any time.

financial statements contained in this Annual Report on Form 10-K have been audited by MaloneBailey, LLP, an independent registered public

accounting firm that is headquartered in the United States with offices in Beijing and Shenzhen, China, and Tokyo, Japan.

MaloneBailey, LLP is not among

the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination on

December 16, 2021 of having been unable to inspect or investigate completely.

As of the date of this annual report, we have not been

identified by the SEC as a commission-identified issuer under the HFCA Act.

However, given that MaloneBailey, LLP is relying upon support

from their China-based offices, the trading of our common stock may be prohibited and our common stock may be delisted from Nasdaq Capital

Market or any other U.S.

stock exchange under the HFCA Act if the PCAOB is unable to inspect our auditor.

The prohibition of trading

of our common stock and the delisting of our common stock, or the threat of their being prohibited or delisted, may cause the value of

our common stock to significantly decline or, in extreme cases, become worthless.

the HFCA Act and AHFCAA are not currently applicable to the Company because MaloneBailey LLP, the Company’s current independent

registered public accounting firm, is subject to PCAOB review, if this changes in the future for any reason, the Company may be subject

to the HFCAA and AHFCAA.

The implications of this regulation if the Company were to become subject to it are uncertain.

Such uncertainty

could cause the market price of our common stock to be materially and adversely affected, and our securities could be delisted or prohibited

from being traded on Nasdaq earlier than would be required by the HFCAA and AHFCAA.

If our common stock is unable to be listed on another

securities exchange by then, such a delisting would substantially impair your ability to sell or purchase the common stock when you wish

to do so, and the risk and uncertainty associated with a potential delisting would have a negative impact on the price of the common

are dependent upon customer renewals, the addition of new customers, increased revenue from existing customers and the continued growth

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our expectations or justify the cost of the initial investments, our results of operations and financial condition may be adverse affected.

Related to Our GO IPO Consulting Services

provide consulting services and ultimately do not control our client’s abilities to go public in the United States or secure a

listing on American stock exchanges.

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

Pursuant to 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;

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

pre-screening of potential investors;

due diligence activities;

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.

clients may rely on advice from their third party advisors, including law firms and underwriters.

Any of these third party advisors

may advise our GO IPO clients on strategies that could delay or even terminate their ability to go public in the United States or

secure a listing on an American stock exchange.

The ability of our client to go public in the United States or secure a listing on

an American stock exchange is subject to our client’s ability to execute their business plan and attract investors.

Ultimately, market conditions could also create delays or terminate our client’s plans.

value of the equity rights we receive from our GO IPO clients could be volatile, lose value, and even become worthless.

do not control the management or strategies of our GO IPO client companies.

The value of our equity rights received from our consulting

Services is tied to the market value of the client and will likely be volatile.

Among other factors the following occurrences, which

is not an exhaustive list, could reduce the value of our equity rights or even cause our equity rights to become worthless:

a client company changes management or strategies;

a client company is engaged in material litigation;

a client company cannot develop a liquid market for their shares underlying our equity rights;

a client company cannot satisfy a listing requirement to be listed on an exchange;

the market value of the equity rights is too low;

the client company cannot secure market makers;

the client company cannot meet the rules and requirements mandated by the exchanges and markets;

the client company suffers a business downturn, through their fault or caused by a material partner or events that affect the market

the market conditions do not provide an opportunity to capitalize on the equity rights.

GO IPO business assists companies in navigating the initial public offering process in the US markets.

We do not provide investment,

accounting, or legal advice.

If state or federal regulatory agency determined our Company provided legal or investment advice in violation

of existing law, there could be a material adverse effect on our business operations and stock value.

GO IPO services assist companies in improving their internal systems, planning, and readiness to take their company through the IPO

We also assist with introductions to third party professional advisors such as law firms, investment bankers, and auditors,

in order that clients can make their selections, at their sole discretion.

are not an Investment Company under the Investment Company Act of 1940 (the “1940 Act”).

The 1940 Act has restrictions that

could make it impractical for us to continue our business as contemplated.

Our GO IPO services providing consulting services and are

not in the business of investing, reinvesting or trading in securities.

An entity will generally be deemed an “investment company”

under Section 3(a)(1) of the Investment Company Act of 1940, as amended (the “1940 Act”) if:

(a) it is or holds itself out

as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities, or (b)

absent an applicable exemption, it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its

total assets (exclusive of U.S.

government securities and cash items) on an unconsolidated basis.

We conduct our operations so that we

will not be deemed an investment company.

to comply with laws and regulations could harm our business.

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of Nasdaq Capital Market corporate governance rules.

As of March 31, 2023, Sumitaka Yamamoto, our Chief Executive Officer, beneficially

owned an aggregate of 10,995,969 shares of our common stock, which represents 52.8% of the voting power of our outstanding common stock.

As a “controlled company” within the meaning of the corporate governance rules of Nasdaq Capital Market, we are exempt from

Nasdaq Capital Market’s corporate governance rules requiring that listed companies have (i) a majority of the board of directors

consist of “independent” directors under the listing standards of Nasdaq Capital Market, (ii) a nominating/corporate governance

committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting the requirements

of Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee

charter meeting the requirements of Nasdaq Capital Market.

We currently utilize and presently intend to continue to utilize these exemptions.

Accordingly, you may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance

requirements of Nasdaq Capital Market.

See “Management—Controlled Company and Director Independence”.

As of December 31, 2023, Sumitaka Yamamoto, our Chief Executive Officer, beneficially

owned an aggregate of 10,607,159 shares of our common stock, which represents 50.9% of the voting power of our

outstanding common stock.

As a “controlled company” within the meaning of the corporate governance rules of Nasdaq Capital

Market, we are exempt from Nasdaq Capital Market’s corporate governance rules requiring that listed companies have (i) a majority

of the board of directors consist of “independent” directors under the listing standards of Nasdaq Capital Market, (ii) a

nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee

charter meeting the requirements of Nasdaq Capital Market, and (iii) a compensation committee composed entirely of independent directors

and a written compensation committee charter meeting the requirements of Nasdaq Capital Market.

We currently utilize and presently intend

to continue to utilize these exemptions.

Accordingly, you may not have the same protections afforded to stockholders of companies that

are subject to all of the corporate governance requirements of Nasdaq Capital Market.

See “Management—Controlled Company

and Director Independence”.

the voting power of our capital stock continues to be highly concentrated, it may prevent you and other minority stockholders from influencing

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See “Executive Compensation” and “Description of Securities.”

have never paid dividends on our common stock and have no plans to do so in the future.

of shares of our common stock are entitled to receive such dividends as may be declared by our board of directors.

To date, we have paid

no cash dividends on our shares of common stock and we do not expect to pay cash dividends on our common stock in the foreseeable future.

We intend to retain future earnings, if any, to provide funds for operations of our business.

Therefore, any return investors in our

common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock.

See “Dividend

common stock may be subject to the “penny stock” rules in the future.

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investors are willing to pay for our securities.

UNRESOLVED STAFF COMMENTS

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 1A. Risk Factors