HeartCore Enterprises Provides Update on March Go IPO Warrant Sale and Outlook

HeartCore Enterprises, Inc. (Nasdaq: HTCR) announced updates around the previously announced sale of a Go IPO warrant.

In March 2024, HeartCore announced the sale of a Go IPO client’s warrant to a Japanese financial institution for $9 million. During the first quarter ended March 31, 2024, $5 million was received, with the remaining $4 million received in April 2024. With referral fees of $3.36 million having been made to So Management Inc. for sourcing this lead, the Company generated $5.64 million in net sales. However, due to specific accounting treatments and stipulations in the warrant agreement, HeartCore will not recognize the $9 million as revenue on the balance sheet until the client becomes a publicly listed company, which is expected to occur in Fall 2024. Until then, the $9 million will be classified as debt on the balance sheet.

“Although the successful sale of warrants won’t be reflected in our upcoming quarterly financials, HeartCore has already received the full $9 million in gross payment from the financial institution we sold the Go IPO warrant to in March,” said HeartCore CEO Sumitaka Kanno Yamamoto. “Although we have not yet recorded the $9 million as revenue, even though $5 million was received before the close of the first quarter, we have already reaped the benefits of this deal and have directed the capital towards various initiatives, including the authorization of our dividend payment announced in early April.”

HeartCore’s Go IPO pipeline continues to remain robust, with three new client wins announced year to date. The Company has received approximately $1.7 million in initial fees and received warrants between 2% and 3% from these contract wins.

HeartCore CEO Sumitaka Kanno Yamamoto added: “Our Go IPO pipeline remains a key driver and catalyst to fuel our growth and expansion. We have several companies slated to go public this year, and we anticipate capitalizing on the financial benefits and opportunities presented post-IPO. Our outlook on the IPO market remains positive, and we are confident in our ability to continue drumming up interest in companies looking to go public.”