HeartCore shares fall 17.26% after-hours as revenue plunges on strategic shift and divestiture of software unit.

HeartCore Enterprises (HTCR) fell 17.26% in after-hours trading following its strategic divestiture of the software subsidiary, HeartCore Japan, and a significant decline in Q3 and nine-month revenues. The company reclassified the subsidiary as discontinued operations, leading to a year-over-year revenue drop to $3.0 million in Q3 (from $16.2 million) and $7.1 million in nine months (from $21.3 million), primarily due to the absence of a prior-period $13 million warrant payment. Despite cost reductions and a one-time shareholder distribution, cash reserves remain limited at $1.5 million as of September 30, 2025, with pro forma cash at $2.5 million post-distribution. The pivot to IPO consulting, while strategic, has left the company dependent on securing new contracts to replace one-off revenue, raising concerns over near-term financial sustainability and operational scalability.