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HeartCore Enterprises, Inc. (NASDAQ:HTCR) ("HeartCore" or the "Company"), an IPO consulting services company based in Tokyo, announced today it has sold its subsidiary HeartCore Co. Ltd. ("HeartCore Japan") to Volaris Group UK Holdco LTD ("Volaris Group") in an all-cash deal for approximately ¥1.8 billion yen (equivalent to approximately USD $12 million, based on the October 24, 2025 Federal Reserve conversion rate of ¥152.82 = USD $1). HeartCore Japan is engaged in the business of developing and sales of comprehensive software.
"The rapid evolution of generative AI has fundamentally reshaped the competitive landscape for traditional software businesses like ours," said HeartCore CEO Sumitaka Kanno. "Generative AI agents are now capable of matching and even outperforming many conventional software offerings and businesses. With this apparent change in the industry, we have spent the past several months carefully evaluating the best path forward to continue delivering value to our shareholders. Rather than expending resources to compete against this industry-wide shift, HeartCore's management and board have made the strategic decision to sell our software business assets in Japan at what we believe to be the highest achievable value at this stage and to concentrate our efforts on our robust Go IPO consulting business.
"While this transaction does not include our subsidiary Sigmaways, we will continue to assess all strategic alternatives to divest this portion of the business as soon as possible. We believe that the planned exit from all software business activities will allow us to focus exclusively on our highly profitable Go IPO business, transitioning from a software and consulting business model to a financial consulting firm. While the divestiture of our software business will reduce near-term revenue, our Go IPO pipeline remains strong. Looking ahead to 2026, we have multiple Go IPO clients scheduled to begin trading, and we believe the highly profitable nature of this business will enable us to drive sustainable, long-term value for our shareholders."
Use of Proceeds – Distribution to Shareholders
As previously announced, the Company has authorized a one-time distribution payment to its shareholders in the amount of $0.13 per share of common stock. We expect to use a portion of the proceeds from the HeartCore Japan sale to pay the distribution. The record date for holders of the common stock to participate in the distribution is November 10, 2025, and the payment date will be November 17, 2025. The one-time distribution payment of $0.13 per share represents approximately 17.2% of the Company's stock price as of market close on October 29, 2025.
Posted In: HTCR
