
Heartcore Reports First Quarter 2024 Financial Results
March 31, | December 31, | ||||||
2024 | 2023 | ||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,219,251 | $ | 1,012,479 | |||
Accounts receivable | 3,086,203 | 2,623,682 | |||||
Investments in marketable securities | 408,266 | 642,348 | |||||
Investment in equity securities | - | 300,000 | |||||
Prepaid expenses | 3,942,371 | 536,865 | |||||
Current portion of long-term note receivable | 100,000 | 100,000 | |||||
Due from related party | 41,948 | 44,758 | |||||
Other current assets | 223,222 | 234,761 | |||||
Total current assets | 9,021,261 | 5,494,893 | |||||
Non-current assets: | |||||||
Property and equipment, net | 688,826 | 763,730 | |||||
Operating lease right-of-use assets | 2,271,955 | 2,467,889 | |||||
Intangible asset, net | 4,356,250 | 4,515,625 | |||||
Goodwill | 3,276,441 | 3,276,441 | |||||
Long-term investment in equity securities | 300,000 | - | |||||
Long-term investment in warrants | 1,325,421 | 2,004,308 | |||||
Long-term note receivable | 200,000 | 200,000 | |||||
Deferred tax assets | 381,307 | 369,436 | |||||
Security deposits | 325,267 | 348,428 | |||||
Long-term loan receivable from related party | 160,974 | 182,946 | |||||
Other non-current assets | 22,566 | 71 | |||||
Total non-current assets | 13,309,007 | 14,128,874 | |||||
Total assets | $ | 22,330,268 | $ | 19,623,767 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 2,015,959 | $ | 1,757,038 | |||
Accrued payroll and other employee costs | 550,916 | 723,305 | |||||
Due to related party | 256 | 1,476 | |||||
Short-term debt | 66,081 | 135,937 | |||||
Current portion of long-term debts | 446,601 | 371,783 | |||||
Insurance premium financing | 157,917 | - | |||||
Factoring liability | 179,414 | 562,767 | |||||
Operating lease liabilities, current | 374,671 | 396,535 | |||||
Finance lease liabilities, current | 16,512 | 17,445 | |||||
Income tax payables | 150,174 | 162,689 | |||||
Deferred revenue | 1,791,697 | 2,166,175 | |||||
Other current liabilities | 5,268,130 | 216,405 | |||||
Total current liabilities | 11,018,328 | 6,511,555 | |||||
Non-current liabilities: | |||||||
Long-term debts | 1,524,485 | 1,770,352 | |||||
Operating lease liabilities, non-current | 1,959,671 | 2,135,160 | |||||
Finance lease liabilities, non-current | 58,087 | 66,779 | |||||
Deferred tax liabilities | 1,219,750 | 1,264,375 | |||||
Other non-current liabilities | 191,933 | 208,732 | |||||
Total non-current liabilities | 4,953,926 | 5,445,398 | |||||
Total liabilities | 15,972,254 | 11,956,953 | |||||
Shareholders' equity: | |||||||
Preferred shares ($0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of March 31, 2024 and December 31, 2023) | - | - | |||||
Common shares ($0.0001 par value, 200,000,000 shares authorized; 20,864,144 and 20,842,690 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively) | 2,085 | 2,083 | |||||
Additional paid-in capital | 19,686,511 | 19,594,801 | |||||
Accumulated deficit | (16,096,819 | ) | (14,763,469 | ) | |||
Accumulated other comprehensive income | 347,087 | 331,881 | |||||
Total HeartCore Enterprises, Inc. shareholders' equity | 3,938,864 | 5,165,296 | |||||
Non-controlling interests | 2,419,150 | 2,501,518 | |||||
Total shareholders' equity | 6,358,014 | 7,666,814 | |||||
Total liabilities and shareholders' equity | $ | 22,330,268 | $ | 19,623,767 | |||
HEARTCORE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
For the three months ended March 31, | For the three months ended March 31, | ||||||
2024 | 2023 | ||||||
Revenues | $ | 5,046,732 | $ | 8,734,150 | |||
Cost of revenues | 3,014,543 | 3,101,066 | |||||
Gross profit | 2,032,189 | 5,633,084 | |||||
Operating expenses: | |||||||
Selling expenses | 219,707 | 568,642 | |||||
General and administrative expenses | 2,406,303 | 2,685,207 | |||||
Research and development expenses | 89,134 | 79,624 | |||||
Total operating expenses | 2,715,144 | 3,333,473 | |||||
Income (loss) from operations | (682,955 | ) | 2,299,611 | ||||
Other income (expenses): | |||||||
Changes in fair value of investments in marketable securities | (234,082 | ) | - | ||||
Changes in fair value of investments in warrants | (678,887 | ) | 193,365 | ||||
Interest income | 2,594 | 31,605 | |||||
Interest expenses | (36,661 | ) | (39,840 | ) | |||
Government grants | - | - | |||||
Other income | 97,016 | 14,201 | |||||
Other expenses | (25,194 | ) | (29,457 | ) | |||
Total other income (expenses) | (875,214 | ) | 169,874 | ||||
Income (loss) before income tax provision | (1,558,169 | ) | 2,469,485 | ||||
Income tax expense (benefit) | (80,167 | ) | 661,448 | ||||
Net income (loss) | (1,478,002 | ) | 1,808,037 | ||||
Less: net loss attributable to non-controlling interests | (144,652 | ) | (74,252 | ) | |||
Net income (loss) attributable to HeartCore Enterprises, Inc. | $ | (1,333,350 | ) | $ | 1,882,289 | ||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustment | 10,295 | (25,034 | ) | ||||
Total comprehensive income (loss) | (1,467,707 | ) | 1,783,003 | ||||
Less: comprehensive loss attributable to non-controlling interests | (149,563 | ) | (76,542 | ) | |||
Comprehensive income (loss) attributable to HeartCore Enterprises, Inc. | $ | (1,318,144 | ) | $ | 1,859,545 | ||
Net income (loss) per common share attributable to HeartCore Enterprises, Inc. | |||||||
Basic | $ | (0.06 | ) | $ | 0.10 | ||
Diluted | $ | (0.06 | ) | $ | 0.10 | ||
Weighted average common shares outstanding | |||||||
Basic | 20,854,714 | 19,066,160 | |||||
Diluted | 20,854,714 | 19,066,160 | |||||
HEARTCORE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, | For the three months ended March 31, | ||||||
2024 | 2023 | ||||||
Cash flows from operating activities | |||||||
Net income (loss) | $ | (1,478,002 | ) | $ | 1,808,037 | ||
Adjustments to reconcile net income (loss) to net cash | |||||||
used in operating activities: | |||||||
Depreciation and amortization expenses | 188,085 | 123,312 | |||||
Amortization of debt issuance costs | 1,173 | 758 | |||||
Non-cash lease expense | 93,133 | 76,017 | |||||
Deferred income taxes | (80,780 | ) | (17,284 | ) | |||
Stock-based compensation | 91,712 | 915,228 | |||||
Warrants received as noncash consideration | - | (4,009,335 | ) | ||||
Changes in fair value of investments in marketable securities | 234,082 | - | |||||
Changes in fair value of investments in warrants | 678,887 | (193,365 | ) | ||||
Gain on termination of lease | (469 | ) | - | ||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (523,110 | ) | (66,833 | ) | |||
Prepaid expenses | (3,257,972 | ) | (45 | ) | |||
Other assets | (18,618 | ) | 78,241 | ||||
Accounts payable and accrued expenses | 295,799 | (94,363 | ) | ||||
Accrued payroll and other employee costs | (149,603 | ) | (178,733 | ) | |||
Due to related party | (1,161 | ) | 2,544 | ||||
Operating lease liabilities | (90,035 | ) | (73,147 | ) | |||
Income tax payables | (2,387 | ) | 678,725 | ||||
Deferred revenue | (300,011 | ) | (167,873 | ) | |||
Other liabilities | 5,060,658 | 70,057 | |||||
Net cash flows provided by (used in) operating activities | 741,381 | (1,048,059 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | - | (9,409 | ) | ||||
Repayment of loan provided to related party | 10,814 | 11,955 | |||||
Payment for acquisition of subsidiary, net of cash acquired | - | (724,910 | ) | ||||
Net cash flows provided by (used in) investing activities | 10,814 | (722,364 | ) | ||||
Cash flows from financing activities | |||||||
Payments for finance leases | (4,474 | ) | (5,658 | ) | |||
Proceeds from short-term debt | 68,138 | - | |||||
Repayment of short-term and long-term debts | (207,486 | ) | (265,255 | ) | |||
Repayment of insurance premium financing | (14,772 | ) | (36,517 | ) | |||
Net proceeds from factoring arrangement | - | 173,582 | |||||
Net repayment of factoring arrangement | (383,353 | ) | - | ||||
Payments for debt issuance costs | - | (448 | ) | ||||
Capital contribution from non-controlling shareholder | 67,195 | - | |||||
Net cash flows used in financing activities | (474,752 | ) | (134,296 | ) | |||
Effect of exchange rate changes | (70,671 | ) | (62,692 | ) | |||
Net change in cash and cash equivalents | 206,772 | (1,967,411 | ) | ||||
Cash and cash equivalents - beginning of the period | 1,012,479 | 7,177,326 | |||||
Cash and cash equivalents - end of the period | $ | 1,219,251 | $ | 5,209,915 | |||
Supplemental cash flow disclosures: | |||||||
Interest paid | $ | 37,098 | $ | 16,968 | |||
Income taxes paid | $ | 117,524 | $ | - | |||
Non-cash investing and financing transactions | |||||||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | 125,735 | $ | - | |||
Insurance premium financing | $ | 172,689 | $ | 389,035 | |||
Liabilities assumed in connection with purchase of property and equipment | $ | - | $ | 6,288 | |||
Common shares issued for acquisition of subsidiary | $ | - | $ | 3,150,000 | |||

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