Transaction advances portfolio optimization strategy, reduces exposure to non-core loss-making operations, and supports focus on cornerstone capital markets and financial services initiatives
NEW YORK and TOKYO, June 25, 2026 (GLOBE NEWSWIRE) -- HeartCore Enterprises, Inc. (Nasdaq: HTCR) ("HeartCore" or the "Company"), an IPO consulting services company based in Tokyo, completed the strategic divestiture of its 51% ownership interest in Sigmaways, Inc. ("Sigmaways"), together with the assignment of related intercompany loans and other receivables, to a third party.
The divestiture is part of HeartCore's ongoing efforts to streamline its operating structure, strengthen its consolidated financial profile, and focus resources on higher-priority growth initiatives, including its Go IPO consulting services and potential expansion into financial services and capital markets advisory-related businesses. To date, the Company currently has three Go IPO client engagements and two M&A advisory engagements.
Strategic Rationale
• Reduces exposure to a non-core, loss-making subsidiary: Sigmaways has experienced continued revenue declines and operating losses since its acquisition in 2023, creating an ongoing drag on HeartCore's consolidated results.
• Addresses negative equity impact: As of March 31, 2026, Sigmaways had a shareholders' deficit of approximately $3.6 million (unaudited), which has weighed on HeartCore's consolidated balance sheet.
• Enhances operational focus: The transaction allows HeartCore to dedicate management attention and capital resources to its core strategic priorities, including Go IPO services, financial services and capital markets advisory opportunities.
• Improves go-forward financial positioning: By separating Sigmaways from HeartCore's consolidated operations, the Company expects to reduce future exposure to Sigmaways' operating losses and working capital needs.
Management Commentary
HeartCore CEO Sumitaka Kanno commented, "The completion of this divestiture represents an important step in our broader effort to optimize HeartCore's business portfolio and improve our go-forward financial profile. Sigmaways has faced a challenging operating environment, including declining revenue, continued losses, and negative shareholders' equity. After careful evaluation, we believe that separating this non-core business is the most prudent path to reducing financial drag and allowing HeartCore to focus more effectively on areas where we see stronger long-term growth potential.