Kimio Hosaka
About Kimio Hosaka
Kimio Hosaka, age 57, is Chief Operating Officer (COO) of HeartCore Enterprises (HTCR) and has served as a director since May 18, 2021. He has been COO and a member of the Board of Managers of HeartCore Co. (Japan) since August 2015 and holds a B.S. in Physics from Chuo University (Tokyo). The company discloses no other public company directorships for Hosaka . Company performance over the last fiscal year showed revenue growth from FY 2023 to FY 2024 and a swing to positive EBITDA, useful context for assessing pay-for-performance alignment (see Company Performance table below) .
Company Performance (context for pay-for-performance)
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Revenue ($) | 21,845,830 | 30,407,229 |
| EBITDA ($) | -3,436,336* | 7,968,970* |
*Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| HeartCore Co. (subsidiary) | COO; Board of Managers | Aug 2015 – present | Operations leadership; experience in business and operations matters |
| HeartCore Enterprises, Inc. | Director | May 2021 – present | Employee-director; contributes operating expertise |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | Company disclosures state Hosaka does not hold, and has not previously held, directorships in reporting companies |
Fixed Compensation
- Employment agreement (amended Jan 10, 2023) increased Hosaka’s annual base salary from $95,459 to $164,770 effective Jan 1, 2023 .
- The company was historically a “controlled company,” forming fully independent Compensation and Nominating Committees in Feb 2025 as it exited controlled status; this may influence future compensation governance .
Summary Compensation – Kimio Hosaka
| Component | FY 2023 | FY 2024 |
|---|---|---|
| Salary ($) | 159,102 | 139,714 |
| Bonus ($) | — | — |
| Stock Awards ($) | — | 6,316 |
| Option Awards ($) | — | — |
| Non-Equity Incentive ($) | — | — |
| All Other ($) | — | — |
| Total ($) | 159,102 | 146,030 |
Notes:
- Employees who serve as directors receive no additional director compensation .
Performance Compensation
- No annual cash bonus or non-equity incentive payout is disclosed for 2023–2024 .
- Equity awards (time- or performance-based) are granted under the 2021 and 2023 Plans. The plans allow use of performance metrics, but specific metric weightings/targets for Hosaka’s grants are not disclosed; the plans permit RSUs, performance shares/units, SARs, and options, with administrator discretion on vesting and potential acceleration .
No company-disclosed metric/weighting/target/payout schedule for Hosaka’s annual incentive plan or PSUs during 2023–2024; equity appears primarily time-based during the period .
Equity Ownership & Alignment
- Anti-hedging and anti-pledging: The insider trading policy prohibits hedging transactions and pledging/margining of company stock; pre-clearance is required for trades and blackout policies apply .
- Beneficial ownership (selected dates):
| Date | Shares Beneficially Owned | % Outstanding |
|---|---|---|
| Record Date (Aug 2, 2024 Proxy) | 107,124 | <1% |
| Dec 31, 2024 (10-K) | 109,705 | <1% |
| Record Date (Jul 28, 2025 Proxy) | 112,568 | <1% |
- Outstanding equity awards:
| As-of Date | Options Exercisable (#) | Options Unexercisable (#) | Exercise Price ($) | Expiration | Unvested RSUs/Stock (#) | Market Value/Share ($) |
|---|---|---|---|---|---|---|
| Dec 31, 2023 | 50,000 | 50,000 | 2.50 | 12/25/2031 | 8,592 | 0.638 |
| Dec 31, 2024 | 75,000 | 25,000 | 2.50 | 12/25/2031 | 5,729 | 1.815 |
Observations:
- Unvested equity will generally accelerate upon termination without Cause or for Good Reason (see Employment Terms) .
- Pledging prohibited, reducing alignment risk from collateralized positions .
Form 4 insider trading data was attempted but could not be retrieved due to a data source authorization error; consider reviewing recent Form 4s on EDGAR for near-term selling/buying pressure.
Employment Terms
- Structure: One-year initial term; auto-renews for successive one-year terms unless either party gives 30 days’ notice; employment is at-will .
- Definitions: “Cause,” “Good Reason,” and “Change of Control” are defined; Good Reason includes post-CoC material diminution of comp/benefits, salary/bonus reduction (outside broad management cuts), >50-mile relocation, or material breach not cured in 10 days .
- Severance (without Cause or with Good Reason):
- Lump sum equal to base salary for the remainder of the current term (initial or renewal), plus accrued pay/benefits/expenses .
- Unvested equity vests to the extent not already vested .
- Termination for Cause or resignation without Good Reason: Unvested equity forfeited; accrued pay/benefits/expenses only .
- Death/Disability: Accrued pay/benefits, pro-rata bonus based on target for year of termination, unvested equity forfeited .
- 280G Gross-Up: Agreements include excise tax gross-up for excess parachute payments (shareholder-unfriendly; red flag) .
- Clawback: Robust Dodd-Frank/Nasdaq-compliant clawback policy covering incentive-based comp tied to financial reporting measures; recovery of “excess compensation” required, with recovery methods including reimbursement and award cancellation .
- Restrictive covenants: Non-solicitation during employment and for three years after; enforceability may vary by state; “blue pencil” provision included .
- Governing law / dispute resolution: Delaware law; disputes via courts in Santa Clara County, CA, and arbitration provisions described .
Board Governance
- Board service: Director since May 18, 2021 . As an employee-director, he received no additional compensation for board service .
- Independence and committees: In 2025, HTCR ceased to be a controlled company and formed independent Compensation and Nominating & Corporate Governance Committees (Feb 14, 2025). Audit, Compensation, and Nominating committees are comprised of independent directors (chairs noted in proxy) .
- Attendance: In 2024, the Board held 12 meetings and each director attended >75% of combined board/committee meetings .
Related Party Transactions (screen for conflicts)
- Item 13 disclosures list related-party balances and transactions involving the CEO, a non-controlling shareholder (Luvina Software), a receivable from a company controlled by the CEO, and short-term debt to a director/CSO. No Hosaka-specific related-party transactions are identified in the disclosures .
Compliance / Trading Controls
- Insider trading policy: Pre-clearance required; quarterly and event-driven blackout periods; prohibition on short-term trading under six months absent consent .
- Anti-hedging and anti-pledging policy explicitly prohibits hedging and pledging/margining company stock, enhancing alignment .
- Section 16 compliance: The 10-K notes one late Form 4 by Hosaka in FY 2024 (and certain others), a minor compliance footnote .
Compensation Structure Analysis
- Mix and trend: Cash-heavy compensation with modest equity awards; no disclosed annual bonus or PSU payouts in 2023–2024 .
- Equity design: Options (2.50 strike expiring 2031) and time-based stock awards outstanding; outstanding RSUs decreased year-over-year, and options shifted more into exercisable status (from 50k/50k to 75k/25k) .
- Governance shift: Formation of an independent Compensation Committee in 2025 may tighten pay-for-performance linkage going forward .
- Red flags: 280G excise tax gross-up in agreements is shareholder-unfriendly .
Investment Implications
- Alignment: Ownership is modest (<1% beneficially owned across reported dates), but (i) unexercised options and unvested RSUs provide ongoing skin-in-the-game, and (ii) anti-hedging/anti-pledging policies reduce misalignment risks .
- Retention/vesting supply: Equity acceleration on termination without Cause/with Good Reason and time-based vesting could create supply upon vesting or exit; monitor upcoming RSU vesting and option exercises for trading pressure .
- Governance trajectory: Exit from controlled status and establishment of independent Compensation and Nominating committees should improve oversight over incentives and director independence; continued monitoring of incentive metric disclosure is warranted .
- Pay-for-performance: FY 2024 delivered revenue growth and a swing to positive EBITDA, but Hosaka’s disclosed pay remained predominantly salary with limited equity; future design changes may be needed to better tie pay to specific, disclosed performance metrics .
- Risk flags to watch: 280G gross-up exposure in a change-in-control; prior minor Section 16 timeliness footnote; ensure clawback policy is operationalized for any financial restatements .
Citations:
S&P Global disclaimer: EBITDA values marked with an asterisk were retrieved from S&P Global.