8-K: HeartCore Enterprises Forges Strategic Partnership with Silver Egg Technology to Integrate AI Recommendation Engine into CMS Platform

HeartCore Enterprises, Inc. has entered into an OEM sales agreement with Silver Egg Technology to integrate Silver Egg's AI recommendation service, Aigent Recommender, into its CMS platform, aiming to boost digital marketing capabilities and recurring revenue.

Summary

• HeartCore Co., Ltd., a wholly owned subsidiary of HeartCore Enterprises, Inc., entered into an OEM Sales Agreement with Silver Egg Technology CO., Ltd. on June 23, 2025.
• The agreement allows HeartCore to OEM provide Silver Egg's AI recommendation service, Aigent Recommender, as part of its HeartCore CMS service and as a standalone product tentatively named HeartCore Recommend.
• The initial term of the Silver Egg Agreement is two years, with automatic renewals for additional two-year periods unless either party provides six months' written notice of non-renewal.
• Individual contracts for the service will have a 12-month term, automatically renewing unless 30 days' written notice of non-renewal is given.
• HeartCore aims to achieve a target of 20 contracts per year for the service.
• Monthly service fees paid by HeartCore to Silver Egg vary based on page views (PVs) and whether the target number of contracts (20) is met by June 30, 2026.
• If the target of 20 contracts is met by June 30, 2026, monthly fees for the second year (July 1, 2026 June 30, 2027) are: 30,000 Yen for up to 500,000 PVs, 48,000 Yen for 500,001-800,000 PVs, and 60,000 Yen for 800,001-1,000,000 PVs.
• If the target of 20 contracts is not met by June 30, 2026, monthly fees for the second year (July 1, 2026 June 30, 2027) are: 35,000 Yen for up to 500,000 PVs, 56,000 Yen for 500,001-800,000 PVs, and 70,000 Yen for 800,001-1,000,000 PVs.
• The new AI recommendation feature is scheduled to launch on August 25, 2025.
• HeartCore plans to convert 30% of customers who newly implement its CMS from the free version (where the recommendation feature will be included as a standard platform function) into paid plans within the first year of launching the new service.

Sentiment

Score: 8

Explanation: The announcement is highly positive, detailing a strategic partnership that enhances product offerings, targets new markets, and is expected to drive recurring revenue and customer engagement. The financial terms are clear, and management expresses strong confidence in the initiative. The only minor negative is the potential for higher costs if contract targets are not met, but this is a performance-based incentive that aligns with growth.

Positives

• Integration of cutting-edge AI-driven recommendation engine (Aigent Recommender) significantly enhances HeartCore's CMS platform capabilities.
• Positions HeartCore as an early adopter in a largely untapped market for automated recommendation solutions, particularly beyond traditional e-commerce.
• Aims to drive recurring revenue growth and increase customer wallet share by offering enhanced platform features.
• The new feature will act as a key driver for upselling and cross-selling to existing clients, supported by HeartCore's Business Development (BizDev) team.
• Expected to improve customer experience and sales efficiency through AI-driven personalization, automating lead nurturing, customer journey optimization, and conversion rate maximization.
• Low-code integration via HeartCore CMS @function feature simplifies implementation for customers.
• The OEM agreement allows HeartCore to offer the service under its own brand ('HeartCore Recommend') without displaying Silver Egg's name or trademarks.
• The agreement includes a non-competition clause preventing HeartCore from seeking similar OEM services or developing competing software without Silver Egg's consent, protecting the partnership's exclusivity.

Negatives

• HeartCore incurs monthly service fees to Silver Egg, which will increase if a target of 20 contracts is not met by June 30, 2026.
• Functional limitations for the 'Recommender S Service' (low-cost version) include a maximum monthly request count of 1 million, maximum 15,000 items, and RPS of 5 or less, with normal responses not guaranteed if these limits are exceeded.
• Regular maintenance for the Recommender S Service (approximately every three months) may cause temporary service unavailability.
• Support for the Recommender S Service is exclusively via email, which might be a limitation for some users.
• HeartCore bears full compensation responsibility for any damages caused to website operators or end-users due to reasons attributable to HeartCore, its terms of use, contracts, or sales activities.

Risks

• Failure to achieve the target number of 20 contracts by June 30, 2026, will result in higher monthly service fees to Silver Egg, impacting profitability.
• Risk of service disruption or malfunction if monthly maximum request count, item count, or requests per second (RPS) limits are exceeded, potentially leading to customer dissatisfaction.
• Temporary service unavailability due to regular system updates or maintenance could affect user experience.
• Potential for disputes or administrative sanctions if HeartCore fails to comply with applicable laws and regulations regarding end-user information collection and usage.
• Risk of damages if HeartCore violates the non-competition clause or confidentiality obligations outlined in the agreement.
• Reliance on third-party cloud services for the Service provision, with HeartCore not liable for disruptions caused by such third-party services, which could impact service reliability.
• Forward-looking statements involve inherent risks and uncertainties, and actual results could differ materially from those anticipated.

Future Outlook

HeartCore aims to convert 30% of new CMS customers from the free version to paid plans within the first year of launching the new AI recommendation service. The company expects the integration of Aigent Recommender to strengthen its ability to upsell and cross-sell to its existing customer base and expand recurring revenue streams, with the BizDev team playing a central role in driving this initiative.

Management Comments

• "Aigent Recommender's integrated AI tool represents a significant competitive advantage, one that further sets us apart from many in the industry and will unlock new use cases in areas where recommendation technologies have traditionally been underutilized." Sumitaka Kanno, CEO.
• "With a strong customer base spanning our core business, subsidiaries, and established partners, we expect this product to further strengthen our ability to upsell and cross-sell." Sumitaka Kanno, CEO.
• "Our BizDev team will play a central role in driving this initiative forward, and we remain focused on evolving our business model, expanding recurring revenue streams, and increasing wallet share." Sumitaka Kanno, CEO.

Industry Context

The partnership addresses a significant market gap where conventional recommendation engines have primarily served large-scale e-commerce sites, leaving industries like B2B corporate websites and manufacturing portals with underutilized content assets. HeartCore aims to bridge this gap by offering AI-driven personalization to a broader range of industries, moving beyond traditional mass marketing and enabling businesses to unlock the full value of their content assets.

Comparison to Industry Standards

• The document highlights that conventional recommendation engines have primarily been designed for large-scale e-commerce sites with extensive product catalogs and content libraries.
• It notes that industries like B2B corporate websites and manufacturing portals have seen limited adoption of recommendation technologies, indicating an untapped market that HeartCore aims to address.
• The Aigent Recommender is described as "cutting-edge AI-driven" and providing "real-time, personalized recommendations by analyzing user behavior and anticipating customer needs," suggesting it aims to surpass basic product recommendations.
• HeartCore believes this integration will "further sets us apart from many in the industry," implying a competitive advantage over existing solutions by targeting underutilized areas and offering advanced AI capabilities.

Stakeholder Impact

• Shareholders: Potential for increased recurring revenue, enhanced competitive advantage, and improved financial performance through new product offerings and market expansion.
• Customers (Website Operators): Access to advanced AI-driven recommendation technology to enhance their digital marketing, improve customer engagement, and unlock value from content assets, potentially leading to increased satisfaction and productivity.
• Employees (BizDev Team): New strategic focus and responsibilities in driving upselling and cross-selling initiatives.
• Silver Egg Technology CO., Ltd.: New OEM partnership provides a channel for their Aigent Recommender service to a broader market through HeartCore's CMS platform, potentially increasing their revenue and market reach.

Next Steps

• Launch of the new AI recommendation feature (Aigent Recommender / HeartCore Recommend) on August 25, 2025.
• HeartCore's Business Development (BizDev) team will drive the initiative forward, focusing on upselling and cross-selling.
• HeartCore aims to convert 30% of new CMS customers from free to paid plans within the first year of service launch.
• Automatic renewal of the OEM Sales Agreement for additional two-year periods unless six months' written notice is given.
• Automatic renewal of individual contracts for additional 12-month periods unless 30 days' written notice is given.

Key Dates

Recommendation

Keywords

AI recommendation, CMS, content management system, digital marketing, OEM agreement, Aigent Recommender, HeartCore Recommend, SaaS, enterprise software, customer experience management, recurring revenue, upselling, cross-selling, B2B marketing, machine learning, user behavior analysis