UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______, 20___, to _____, 20___.

Commission File Number 001-41272

HeartCore Enterprises, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		87-0913420
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)

1-2-33, Higashigotanda, Shinagawa-ku

Tokyo, Japan 141-0022

(Address of Principal Executive Offices) (Zip Code)

+81-3-6409-6966

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each Exchange on which Registered
Common Stock		HTCR		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 15, 2026, there were 1,441,565 shares of outstanding common stock of the registrant.

HeartCore Enterprises, Inc.

Contents

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6

Item 4.	Controls and Procedures	6

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	7

Item 1A.	Risk Factors	7

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7

Item 3.	Defaults Upon Senior Securities	7

Item 4.	Mine Safety Disclosures	7

Item 5.	Other Information	7

Item 6.	Exhibits	7

Signatures		8

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HEARTCORE ENTERPRISES, INC.

CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2026			2025
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	774,033		$	1,985,962
Accounts receivable		572,547			707,865
Investments in marketable securities		3,394,190			3,690,187
Prepaid expenses		222,818			182,077
Current portion of long-term note receivable		100,000			100,000
Deferred offering costs		250,000			250,000
Other current assets		175,335			208,503
Proceeds receivable from sale of discontinued operations		1,382,897			1,291,298
Total current assets		6,871,820			8,415,892

Non-current assets:
Property and equipment, net		279,185			291,589
Operating lease right-of-use assets		506,456			29,449
Long-term investment in warrants		273,859			280,924
Deferred tax assets		22,633			23,121
Security deposits		278,154			282,958
Other non-current assets		241			549
Long-term proceeds receivable from sale of discontinued operations		3,539,421			3,736,995
Total non-current assets		4,899,949			4,645,585

Total assets	$	11,771,769		$	13,061,477

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	1,230,686		$	1,146,501
Accounts payable and accrued expenses – related party		96,333			124,618
Accounts payable and accrued expenses		96,333			124,618
Accrued payroll and other employee costs		663,683			509,547
Due to related party		401			285
Short-term debt – related party		69,000			75,000
Current portion of long-term debts		51,697			50,598
Insurance premium financing		97,773			13,430
Factoring liability		124,508			135,982
Operating lease liabilities, current		308,119			32,793
Income tax payables		1,847,411			1,857,386
Deferred revenue		650,469			676,216
Derivative liability		122,589			121,719
Other current liabilities		598,602			586,175
Total current liabilities		5,861,271			5,330,250

Non-current liabilities:
Long-term debts		434,895			448,376
Operating lease liabilities, non-current		211,544			-
Total non-current liabilities		646,439			448,376

Total liabilities		6,507,710			5,778,626

Shareholders’ equity:
Preferred shares, $0.0001 par value, 20,000,000 shares authorized; Series A convertible preferred shares, 4,000 shares designated, 1,017 shares issued and outstanding as of March 31, 2026 and December 31, 2025; aggregate liquidation preference of $1,262,686 and $1,158,362 as of March 31, 2026 and December 31, 2025, respectively		691,858			691,858
Common shares, $0.0001 par value, 200,000,000 shares authorized, 1,288,812 and 1,270,991 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively*		129			127
Additional paid-in capital		21,876,230			21,902,169
Accumulated deficit		(15,627,241	)		(13,755,534	)
Accumulated other comprehensive loss		(66,099	)		(58,497	)
Total HeartCore Enterprises, Inc. shareholders’ equity		6,874,877			8,780,123
Non-controlling interests		(1,610,818	)		(1,497,272	)
Total shareholders’ equity		5,264,059			7,282,851

Total liabilities and shareholders’ equity	$	11,771,769		$	13,061,477

*	On April 2, 2026, the Company effected a 1-for-20 reverse stock split of the Company’s issued and outstanding common shares. References to share and per share information of common shares in the unaudited consolidated financial statements have been retroactively adjusted. See NOTE 14.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-1

HEARTCORE ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

	2026			2025
	For the Three Months
	Ended March 31,
	2026			2025
Revenues	$	1,245,844		$	2,093,413
Cost of revenues (including cost of revenues resulting from transactions with a related party of $114,535 and $25,195 for the three months ended March 31, 2026 and 2025, respectively)		1,171,799			1,549,639
Gross profit		74,045			543,774

Operating expenses:
Selling expenses		42,812			152,922
General and administrative expenses (including general and administrative expenses resulting from transactions with a related party of nil and $17,615 for the three months ended March 31, 2026 and 2025, respectively)		1,571,734			1,581,205
Total operating expenses		1,614,546			1,734,127

Loss from continuing operations		(1,540,501	)		(1,190,353	)

Other income (expenses):
Changes in fair value of investments in marketable securities		(295,997	)		(1,781,664	)
Changes in fair value of investment in warrants		(7,065	)		(51,621	)
Changes in fair value of derivative liability		(870	)		-
Interest income		582			2,243
Interest expenses		(16,625	)		(17,794	)
Other income		14,095			9,313
Other expenses		(112,865	)		(547	)
Total other expenses		(418,745	)		(1,840,070	)
Loss from continuing operations before income tax expense		(1,959,246	)		(3,030,423	)
Income tax expense		17,469			39,608
Net loss from continuing operations		(1,976,715	)		(3,070,031	)
Loss from discontinued operations, net of income tax		-			(67,350	)
Net loss		(1,976,715	)		(3,137,381	)
Less: net loss attributable to non-controlling interests		(105,008	)		(50,389	)
Net loss attributable to HeartCore Enterprises, Inc.		(1,871,707	)		(3,086,992	)
Dividends accrued on Series A convertible preferred shares		(27,968	)		-
Net loss attributable to HeartCore Enterprises, Inc. common shareholders	$	(1,899,675	)	$	(3,086,992	)

Other comprehensive loss:
Foreign currency translation adjustment		(16,140	)		(8,014	)
Total comprehensive loss		(1,992,855	)		(3,145,395	)
Less: comprehensive loss attributable to non-controlling interests		(113,546	)		(49,152	)
Comprehensive loss attributable to HeartCore Enterprises, Inc.	$	(1,879,309	)	$	(3,096,243	)

Net loss from continuing operations attributable to HeartCore Enterprises, Inc. per common share*
Basic	$	(1.49	)	$	(2.74	)
Diluted	$	(1.49	)	$	(2.74	)

Loss from discontinued operations per common share*
Basic	$	-		$	(0.06	)
Diluted	$	-		$	(0.06	)

Net loss attributable to HeartCore Enterprises, Inc. per common share*
Basic	$	(1.49	)	$	(2.80	)
Diluted	$	(1.49	)	$	(2.80	)

Weighted average common shares outstanding*
Basic		1,271,631			1,102,702
Diluted		1,271,631			1,102,702

*	On April 2, 2026, the Company effected a 1-for-20 reverse stock split of the Company’s issued and outstanding common shares. References to share and per share information of common shares in the unaudited consolidated financial statements have been retroactively adjusted. See NOTE 14.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-2

HEARTCORE ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

			Shares*		Amount		Receivable			Capital		Deficit			Income			Equity			Interests			Equity
			Common Shares							Additional					Accumulated Other			Total HeartCore Enterprises, Inc.						Total
			Number of				Subscription			Paid-in		Accumulated			Comprehensive			Shareholders’			Non-controlling			Shareholders’
			Shares*		Amount		Receivable			Capital		Deficit			Income			Equity			Interests			Equity
Balance, January 1, 2025	-	-		1,096,900	$	110	$	(103,942	)	$	20,658,236	$	(16,244,843	)	$	343,936		$	4,653,497		$	(1,191,482	)	$	3,462,015
Net loss				-		-		-			-		(3,086,992	)		-			(3,086,992	)		(50,389	)		(3,137,381	)
Foreign currency translation adjustment				-		-		-			-		-			(9,251	)		(9,251	)		1,237			(8,014	)
Issuance of common shares related to at the market offering agreement				794		-		-			30,445		-			-			30,445			-			30,445
Collection of subscription receivable				-		-		103,942			-		-			-			103,942			-			103,942
Exercise of stock options				5,000		1		-			116,999		-			-			117,000			-			117,000
Stock-based compensation	-	-		1,073		-		-			32,280		-			-			32,280			-			32,280
Balance, March 31, 2025	-	-		1,103,767	$	111	$	-		$	20,837,960	$	(19,331,835	)	$	334,685		$	1,840,921		$	(1,240,634	)	$	600,287

	Shares		Amount		Shares*		Amount		Capital			Deficit			Loss			Equity			Interests			Equity
	Preferred Shares				Common Shares				Additional						Accumulated Other			Total HeartCore Enterprises, Inc.						Total
	Number of				Number of				Paid-in			Accumulated			Comprehensive			Shareholders’			Non-controlling			Shareholders’
	Shares		Amount		Shares*		Amount		Capital			Deficit			Loss			Equity			Interests			Equity
Balance, January 1, 2026		1,017	$	691,858		1,270,991	$	127	$	21,902,169		$	(13,755,534	)	$	(58,497	)	$	8,780,123		$	(1,497,272	)	$	7,282,851
Net loss		-		-		-		-		-			(1,871,707	)		-			(1,871,707	)		(105,008	)		(1,976,715	)
Foreign currency translation adjustment		-		-		-		-		-			-			(7,602	)		(7,602	)		(8,538	)		(16,140	)
Dividends accrued on Series A convertible preferred shares		-		-		-		-		(27,968	)		-			-			(27,968	)		-			(27,968	)
Stock-based compensation		-		-		796		-		2,031			-			-			2,031			-			2,031
Reverse stock split rounding adjustment		-		-		17,025		2		(2	)		-			-			-			-			-
Balance, March 31, 2026		1,017	$	691,858		1,288,812	$	129	$	21,876,230		$	(15,627,241	)	$	(66,099	)	$	6,874,877		$	(1,610,818	)	$	5,264,059

*	On April 2, 2026, the Company effected a 1-for-20 reverse stock split of the Company’s issued and outstanding common shares. References to share and per share information of common shares in the unaudited consolidated financial statements have been retroactively adjusted. See NOTE 14.

The accompanying notes are an integral part of these unaudited consolidated financial statements.

F-3

HEARTCORE ENTERPRISES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	2026			2025
	For the Three Months
	Ended March 31,
	2026			2025
Cash flows from operating activities of continuing operations:
Net loss	$	(1,976,715	)	$	(3,137,381	)
Loss from discontinued operations, net of income tax		-			(67,350	)
Net loss from continuing operations		(1,976,715	)		(3,070,031	)
Adjustments to reconcile net loss from continuing operations to net cash flows used in operating activities of continuing operations:
Depreciation expense		7,720			20,289
Loss on disposal of property and equipment		-			116,981
Non-cash lease expense		70,229			31,662
Gain on termination of lease		-			(9,059	)
Deferred income taxes		-			27,515
Stock-based compensation		2,031			32,280
Changes in fair value of investments in marketable securities		295,997			1,781,664
Changes in fair value of investment in warrants		7,065			51,621
Changes in fair value of derivative liability		870			-
Gain on settlement of asset retirement obligations		-			(45,873	)
Changes in assets and liabilities:
Accounts receivable		135,238			(180,823	)
Prepaid expenses		66,924			50,591
Other assets		107,886			(26,711	)
Accounts payable and accrued expenses		85,404			(97,118	)
Accounts payable and accrued expenses – related party		(28,338	)		(24,224	)
Accounts payable and accrued expenses		(28,338	)		(24,224	)
Accrued payroll and other employee costs		154,736			(23,483	)
Due to related party		125			(884	)
Operating lease liabilities		(60,127	)		(24,435	)
Income tax payables		(9,785	)		(80,196	)
Deferred revenue		(25,747	)		(233,911	)
Other liabilities		12,897			12,686
Net cash flows used in operating activities of continuing operations		(1,153,590	)		(1,691,459	)

Cash flows from investing activities of continuing operations:
Purchases of property and equipment		(954	)		-
Proceeds from sale of marketable securities		-			462,763
Net cash flows provided by (used in) investing activities of continuing operations		(954	)		462,763

Cash flows from financing activities of continuing operations: