HeartCore Divests Software Business Subsidiary, HeartCore Co., Ltd

Core Insights - HeartCore Enterprises, Inc. has sold its subsidiary HeartCore Japan to Volaris Group for approximately ¥1.8 billion (around USD $12 million) in an all-cash deal [1] - The decision to divest the software business is driven by the rapid evolution of generative AI, which has changed the competitive landscape for traditional software businesses [2] - The company aims to focus on its Go IPO consulting business, which is expected to drive sustainable long-term value for shareholders despite a reduction in near-term revenue from the divestiture [3] Financial Implications - A one-time distribution payment of $0.13 per share will be made to shareholders, representing approximately 17.2% of the company's stock price as of October 29, 2025 [4] - Proceeds from the sale of HeartCore Japan will be partially used to fund this distribution [4] Strategic Focus - The Tokyo Stock Exchange's new minimum market capitalization requirement for Growth Market companies is expected to create a favorable environment for HeartCore's Go IPO business, as companies will seek alternative strategies for greater liquidity and visibility [5] - The company is committed to organic growth in Japan and Korea, with plans to build a pipeline of clients benefiting from its Go IPO services [6]